In a trend that is becoming more common, the Federal Energy Regulatory Commission (“FERC”) issued a series of letter orders in late January 2010, extending the time for its review of several settlements of alleged violations of the NERC Reliability Standards that had been filed with it by the North American Electric Reliability Corporation (“NERC”). Rather than accepting those settlements with the supporting evidence that had been provided to it, FERC posited a series of Data and Document Requests to NERC and the three involved regional entities: SERC Reliability Corporation (“SERC”), the Western Electricity Coordinating Council (“WECC”) and ReliabilityFirst Corporation (“RFC”).

The orders are noteworthy because they indicate that FERC is not accepting proposed NERC settlements at face value and is expecting the regional entities to have significant evidence in support of representations made in the settlements of alleged violations of NERC’s Reliability Standards.

In Docket No. NP10-20, FERC asked seven very detailed questions regarding RFC’s proposed settlement with Duke Energy Corporation concerning alleged violations caused by a vegetation contact outage. The questions ranged from a request to see a Vegetation Outage Questionnaire that Duke Energy Corporation had submitted to RFC to wanting a description of the results of Duke Energy Corporation’s public outreach education program on managing vegetation. FERC also asked clarifying questions regarding Duke Energy Corporation’s facility ratings methodology, and how RFC identified and assessed the relative importance of the alleged violations.

In Docket No. NP10-25, FERC asked only one question, requesting WECC to address how it had assessed the risk to the bulk electric system when coming to settlement terms with El Paso Electric Company for alleged violations of BAL-005-0 and VAR-001-1 for failure to: (1) perform an annual calibration check of two frequency sensing devices used for Area Control Error determination, and (2) specify criteria that exempts generators from compliance with reporting the status of the schedule in automatic voltage regulator (AVR) control mode and its changes.

In Docket Nos. NP10-32, NP10-33, NP10-34, and NP10-35, FERC’s questions were directed at SERC and requested SERC to document information related to its settlements with Gulf Power Company, Mississippi Power Company, Alabama Power Company and Southern Power Company for alleged violations of the protection system maintenance and testing requirements. FERC asked thirteen questions, primarily related to discovering how SERC had investigated the alleged violations and asking for documentary support of its conclusions.