FERC Issues Order on FPL Settlement and Penalty regarding 2008 Blackout

On October 8, 2009, FERC issued an order in Docket No. IN08-5-000 approving a settlement agreement between FERC, NERC and Florida Power & Light Company (FPL) regarding the loss of load event that occurred in Florida on February 26, 2008 and led to the loss of 22 transmission lines, 4,300 MW of generation, and 3,650 MW of customer service or load.  Although the Order alleges that FPL violated Reliability Standards in the BAL, COM, EOP, PER, PRC, TOP, and TPL areas, neither the order nor the settlement agreement identify specific Reliability Standards of which FPL was found to be in violation.  In separate, concurring opinions accompanying the Order, Commissioners Spitzer and Moeller agreed with the outcome, but stated their view that FERC should have specifically identified the standards that were allegedly violated and the facts that support the determination that FPL's actions violated those standards. 

Under the settlement agreement, FPL agrees to pay a $25 million civil penalty but does not admit to any violations of NERC Reliability Standards.  The payment of the $25 million civil penalty will be divided as follows: FPL will pay $10 million to U.S. Treasury and $10 million to NERC. With respect to the remaining $5 million, the Order states that FPL may spend such amount, subject to FERC and NERC staff approval, on bulk power system reliability enhancement measures that go above and beyond the other reliability compliance commitments in the settlement agreement.  If FPL has not spent (or committed to spend) for approved projects the entire $5 million amount within three years of the Order, the unspent portion will revert to NERC and the U.S. Treasury in equal proportions.  In addition to the $5 million in reliability enhancement measures, FERC noted as positive factors in approving the settlement that FPL has also agreed to undertake other voluntary reliability enhancement measures.

To read FERC’s press release concerning the FPL order, click here.
To read FPL's official news release, click here.
To read the order, including the settlement agreement, click here.