Washington — Calpine will pay $400,000 in penalties to settle charges stemming from more than 200 instances of noncompliance tied to battery testing, outage reporting and falsified recordkeeping, according to a settlement approved by the Federal Energy Regulatory Commission.
FERC enforcement staff found that Calpine either failed to perform a battery test, failed to retain testing records or created falsified testing records 215 times between December 29, 2012, and December 26, 2015, violating a mandatory reliability standard governing the maintenance and testing of certain protection systems, including batteries.
The alleged violations involved monthly, quarterly, annual and periodic tests for 36 batteries at eight generating plants across three regional entities -- Texas Reliability Entity (Texas RE), Western Electricity Coordinating Council and Midwest Reliability Organization. The bulk of the incidents, 199 specifically, occurred in Texas RE.
All but nine of the 215 instances of noncompliance were self-reported, and 79 of them involved falsified records whereas no testing records existed for the 136 other instances, FERC said in an order (IN17-1) Friday.
That order approved a settlement between FERC's Office of Enforcement, NERC, Texas RE, and Calpine to resolve a formal probe enforcement staff launched in October 2016.
Enforcement staff's investigation delved into whether the generator "centrally directed falsified record-keeping across its fleet," but found that the falsified records were "the result of individual circumstances at each plant."
The investigation also determined that Calpine twice violated California Independent System Operator's tariff, when it failed to report a forced outage at its 141-MW, natural gas-fired Gilroy Energy Center on October 28, 2013, and February 2, 2015.
"Enforcement notes that in both instances, [Cal-ISO] called on the Gilroy unit to run, and only then did Calpine declare the unit unavailable," according to the settlement agreement. "Failing to report a unit's unavailability can present several problems," such as adversely impacting Cal-ISO's ability to maintain system reliability and optimize schedules relative to congestion and demand.
Calpine neither admitted nor denied the alleged violations. But it agreed to pay $375,000 to Texas RE and another $25,000 to the US Treasury.
The generator, which operates 80 power plants representing nearly 26,000 MW of capacity and has a significant presence in Texas, California and the Mid-Atlantic, also agreed to perform certain mitigation activities and to be subject to at least two years of compliance monitoring.
Problems with Calpine's battery maintenance compliance were initially brought to light when an employee called the company's internal compliance hotline in February 2015 to report that the operations and maintenance manager at the Gilroy plant had "failed to report certain outages, ... ordered certain employees to falsify missing battery testing records" and engaged in other "improper behavior," the settlement said.
The matter was elevated to senior management within hours, leading to an internal investigation and subsequent termination of the manager at issue along with other corrective actions. Calpine eventually ordered a fleet-wide investigation into compliance with NERC's battery testing requirements that was conducted by its internal audit team and independent contractors. That effort resulted in "adverse employment actions against 10 additional employees," the settlement said.
FERC's order also noted that Calpine took steps to improve its review and oversight of protection systems maintenance and testing, and "updated its asset management software to standardize inspections, testing, and corrective maintenance across its generation fleet." The company also "incorporated battery testing into its internal compliance audit process," and "now outsources a significant amount of its battery testing to independent contractors," FERC said.
As part of the settlement, Calpine will have to file annual compliance reports for two years with enforcement staff, Texas RE and NERC detailing any violations of the protection systems maintenance and testing reliability standard, Cal-ISO forced outage reporting requirements or FERC regulations tied to either provision. An optional third year of reporting will be up to the enforcement staff's discretion.
FERC said the penalty and compliance monitoring were "a fair and equitable resolution," and the settlement was "in the public interest, as it reflects the nature and seriousness of the conduct."
-- Jasmin Melvin, firstname.lastname@example.org
-- Edited by Richard Rubin, email@example.com