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FPL Fined $25M for 2008 Florida Blackout

FERC last Thursday approved a stipulation and consent agreement that requires Florida Power and Light Co. (FPL) to pay a civil penalty of $25 million for an operational staff error that plunged the lower two-thirds of Florida into a blackout in February 2008.

The agreement -- among the Federal Energy Regulatory Commission's (FERC) Office of Enforcement, the North American Reliability Corporation (NERC) and FPL -- requires the Florida utility to pay $10 million to each of the U.S. Treasury and NERC. It also allows $5 million to be spent, subject to the approval of Commission and NERC staffs, by FPL on bulk electric system (BES) reliability enhancement measures that go "above and beyond" the agreement's reliability compliance commitments or what reliability standards require.

The investigation by FERC's enforcement staff, the Commission's Office of Electric Reliability and NERC confirmed the preliminary findings into the cause of the widespread power outage -- that it was the result of human error (see NGI, March 3). However, FERC enforcement and NERC asserted that FLP was also in violation of various industry reliability standards.

As part of the agreement, FPL has agreed to add significant additional protection redundancy at several transmission stations. In addition, it said it would undertake numerous reliability enhancement measures (apart from the $5 million in expenditures), including enhancing its compliance program; enhancing training and certification requirements for operating employees; improving its frequency response; updating emergency operating procedures; providing additional staffing for BES analysis. The utility also has agreed to make quarterly progress reports to FERC enforcement and NERC, as well as to conduct an independent audit one year after the agreement is completed.

"We conclude that the penalty set forth in the agreement is a fair and equitable resolution of this matter and is in the public interest, as it reflects the nature and seriousness of FPL's alleged conduct and the event as well as the efforts taken by FPL to remedy the alleged violations," the FERC order approving the agreement said [IN08-5].

"We deeply regret the inconvenience this incident caused our customers and the communities we serve. However we disagree with the assertions of FERC's Office of Enforcement. We believe the evidence and the findings of independent investigations demonstrate that FPL was in compliance with industry reliability standards and this incident was, unfortunately, the result of the inappropriate and unauthorized actions of an individual," FPL President Armando J. Olivera said.

'This event dates back to February 2008 and could take several more years and be very costly to resolve through litigation with a federal regulatory agency. Litigation would require the time and attention of the same people who are responsible for the reliability of the grid. As a result we believe a settlement is an appropriate action at this time," he said.

The operational staff error led to the loss of 22 transmission lines in southern Florida on Feb. 26, 2008, 4,300 MW of power generation and 3,650 MW of customer service or load. Approximately 596,000 FPL customers and 354,000 non-FPL customer accounts were without service, representing approximately 8% of Florida electric customer accounts.

According to the consent agreement, the event originated at the Flagami Substation in western Miami on the FPL system when a field engineer was diagnosing a piece of BES transmission equipment that had previous malfunctioned. Just days prior to the event on "Feb. 23 and 24, when the FPL load dispatcher on duty in the FPL control center in Miami attempted to initiate separating one of the shunt reactors (a voltage control device) at Flagami from the 138 kV bus by opening the associated circuit switch, a lock-out relay for the reactor tripped the associated breaker. The relays were reset and the circuit switcher was tagged "emergency use only," the FERC order said.

On the day of the Florida blackout, a FPL protection and control engineer was sent to test the circuit switcher at Flagami. He disabled the primary protections and the breaker failure protection, which is considered the secondary level of protection. But the engineer did not notify the load dispatcher on duty in the FPL control center that he had disabled the second level of protection and neither the system operator on duty in the FPL control center nor the reliability coordinator were aware that any protection had been disabled, the order said.

"At the request of the...engineer, the load dispatcher then opened the circuit switcher, and due to the failure of the circuit switcher's bottle interrupter, a fault on the system occurred. The fault caused a 17-19 second arc which spread to the adjacent shunt reactor's circuit switcher, which in turn caused a three-phase fault on the 138 kV system. Because the primary and secondary levels of protection were disabled, the fault was cleared remotely in approximately 1.7 seconds. This resulted in significant frequency swings, voltage excursions and tripping of transmission and generation around portions of the lower two-thirds of Florida," the FERC order concluded.

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