Commissioner Neil Chatterjee Statement
April 15, 2021
Docket No. IN21-6-000
Order: E-10
I join the majority in directing PacifiCorp to show cause as to why it should not be found to have violated applicable Reliability Standards as detailed in the order. While I fully support this further inquiry, I write separately to urge the Commission to carefully consider in any future order in this proceeding whether the recommended $42 million civil penalty is appropriate in light of the facts and circumstances presented.
To date, the highest civil penalty assessed by the Commission for alleged Reliability Standard violations is $25 million for alleged violations of seven groups of Reliability Standards associated with “an event that led to the loss of 22 transmission lines, 4,300 MW of generation, and 3,650 MW of customer service or load.”[1] By comparison, the alleged violations of a single Reliability Standard requirement[2] here resulted in “a minimal loss of load to customers served by a local distribution line” and “no loss of BES transmission load.”[3]
It is difficult to understand how the alleged violations here are substantially more serious than those that warranted the $25 million civil penalty discussed above. The arguments in support of the recommended civil penalty are confounding. The report rigorously defends the choice to consider the Wood Hollow Fire in its determination of the recommended civil penalty, but then claims that “the violations alone . . . justify [OE] Staff’s [civil penalty] recommendation” and that its “penalty recommendation would be the same irrespective of the [Wood Hollow Fire] in light of the risk posed by the violations.”[4] The Wood Hollow Fire cannot be both relevant and irrelevant; it is illogical to point to a devastating wildfire as support for a recommended $42 million civil penalty, only to then claim that the wildfire had no bearing on the recommended penalty.[5] The Commission can and must be more transparent.
Fairness also requires the Commission to consider the fact that, as of August 2016, PacifiCorp had spent in excess of $127 million to conduct LiDAR surveys of its entire transmission system and to remediate all of the identified clearance conditions identified.[6] PacifiCorp made these substantial expenditures in the wake of the events at issue here;[7] these efforts directly relate to the alleged Reliability Standard violations and improve the reliability of the Bulk-Power System. The Commission’s penalty calculations should take into consideration such expenditures, which directly benefit PacifiCorp’s consumers.
I do not discount the seriousness and pervasiveness of the alleged violations at issue here. Rather, because the stakes are so high, if the Commission ultimately determines that Reliability Standard violations occurred, the Commission must strive to get it right and assess a penalty amount that transparently reflects the complex considerations at play in this case.
For these reasons, I respectfully concur.
[1] Florida Blackout, 129 FERC ¶ 61,016, at P 5, 10-18 (2009). The $25 million civil penalty included $5 million to be spent on “reliability enhancement measures that go above and beyond . . . what the Reliability Standards require.” Id. at 18.
[2] Reliability Standard FAC-009-1, Requirement 1 (and its successor Reliability Standard requirement) requires a transmission owner to establish facility ratings that are consistent with its Facility Ratings Methodology. See OE Staff Report at 1 & n.2.
[3] PacifiCorp 1b.19 Response at 7.
[4] OE Staff Report at 46-47. At the same time, the report states that it “considers the fire as one factor related to the seriousness of PacifiCorp’s violations.” Id. at 54.
[5] It is more appropriate to consider damages arising from wildfires in venues where the wildfire victims can receive compensation. I urge the Commission to consider that PacifiCorp has “resolved all [of the hundreds of] claims associated with the Wood Hollow fire.” PacifiCorp 1b.19 Response at 22.
[6] Id. at 12 & n.44.
[7] These expenditures substantially exceed the $56.5 million expected cost of PacifiCorp’s remediation plan. Id. at 16.