Florida Power & Light (FPL) has agreed to a settlement with the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) related to a February 26, 2008, power outage in Florida.
Under the agreement, FPL will pay $10m each to the US Treasury and NERC and will invest $5m in transmission system reliability enhancements above and beyond already planned investments. These amounts will be from FPL Group shareholder funds and will not affect customer bills.
On Feb. 26, 2008, FPL’s transmission system, the high-voltage power lines that carry electricity from power plants to substations, experienced a service interruption as a result of human error.
FERC’s Office of Enforcement had asserted violations of industry reliability standards by FPL in connection with the event. FPL believes it was in compliance at all times. As part of the settlement agreement, FERC does not conclude in any manner that FPL violated any reliability standards or laws, and FPL does not admit any violations or liability in connection with the outage, FPL said.
Armando Olivera, president and CEO of FPL, said: “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 that this incident was, unfortunately, the result of the inappropriate and unauthorized actions of an individual.
“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 course of action at this time.”
NERC had conducted two prior reliability readiness evaluations of FPL reliability practices and performance in which representatives of FERC participated. These audits found FPL had the appropriate plans, processes, procedures and personnel in place to ensure reliability, said FPL.
An independent investigation was conducted by the Florida Reliability Coordinating Council (FRCC), which has been delegated authority from NERC to propose and enforce reliability standards within the FRCC Region. The FRCC performed an analysis of all technical and human aspects of the February 26, 2008, outage and, in an October 30, 2008, report identified no FPL violations of reliability standards, FPL said.
The company stated that it also commissioned an independent investigation by ICF International, a consulting firm. ICF, whose clients have included business customers and US government agencies, concluded in its November 7, 2008, report that FPL did not violate reliability standards.
While FPL disagrees with the Office of Enforcement’s assertions regarding violations of industry reliability standards, the company agreed to implement additional measures in areas such as training and operating procedures to further strengthen the system against human error.