FERC Approves $300,000 Settlement Between ReliabilityFirst and Ohio Valley Electric Corp. for Violations of NERC Reliability Standards

On November 26, 2021, FERC issued a notice stating that it would not review a Notice of Penalty filed by the North American Electric Reliability Corporation ("NERC") against Ohio Valley Electric Corporation ("OVEC"). FERC's November 26 notice effectively approves a $300,000 settlement between OVEC and the regional reliability entity, ReliabilityFirst Corporation ("RF"), for violations of NERC reliability standards FAC-003-4 R2 and FAC-003-4 R6, which address vegetation management. The settlement followed a 4.5-hour outage to one of OVEC's 345 kV transmission lines in September 2018 that resulted when contact with a cedar tree growing in close proximity tripped the line out of service. OVEC neither admitted nor denied the violations, but agreed to the assessed $300,000 penalty.

NERC filed its Notice of Penalty regarding OVEC's violations on October 28, 2021. There, NERC explained that OVEC and RF entered into a settlement agreement to resolve all outstanding issues arising from OVEC's violations of the vegetation management reliability standards. According to NERC's filing, RF determined that OVEC failed to identify a tree growing in close proximity to the line, resulting in a vegetation contact when the A phase conductor sagged into the tree, tripping the line out of service for 4 hours and 30 minutes.

In addition, NERC cited RF's determination that OVEC failed to complete 100 percent of its right-of-way inspections for vegetation in 2018, including in the area where the outage occurred. As background, NERC reliability standards require OVEC to perform a vegetation inspection of 100 percent of its applicable transmission lines at least once per calendar year. To meet this requirement, OVEC conducts aerial patrols via helicopter to identify areas where remediation may be needed to prevent vegetation from interfering with circuit operation. RF determined that OVEC did not complete 100 percent of these inspections in 2018 because a helicopter crash occurred during the inspections, and OVEC was unable to timely reschedule and complete the inspections of the remaining lines by its annual deadline.

NERC also cited to RF's determination that both violations posted a serious and substantial risk to the reliability of the bulk power system, as well as OVEC's submission of Mitigation Plans to address the violations, and subsequent certifications that it completed all mitigation activities.

FERC's November 26 notice is available here, and NERC's October 28 Notice of Penalty is available here.