Penalty (Audit), ReliabilityFirst actions dl/finalfiled...Electrical and Electronics Engineers (IEEE) Standard 516-2003 (Guide for Maintenance Methods on Energized Power Lines) and

March 31, 2010 Ms. Kimberly Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C. 20426 Re: NERC Notice of Penalty regarding Allegheny Power1

FERC Docket No. NP10-_-000 Dear Ms. Bose: The North American Electric Reliability Corporation (NERC) hereby provides this Notice of Penalty2

regarding Allegheny Power, NERC Registry ID# NCR02602,3 in accordance with the

Federal Energy Regulatory Commission’s (Commission or FERC) rules, regulations and orders, as well as NERC Rules of Procedure including Appendix 4C (NERC Compliance Monitoring and Enforcement Program (CMEP)).4

During an on-site Compliance Audit conducted from September 30, 2008 to October 2, 2008 (Audit), ReliabilityFirst Corporation (ReliabilityFirst) identified possible violations of Reliability Standards EOP-004-1 Requirement (R) 3 for Allegheny Power’s failure to provide a written disturbance report to ReliabilityFirst and NERC for a reportable incident that occurred on February 10, 2008,5 and FAC-003-1 R1 for: (1) failure to provide Clearance 2 distance values that were corrected for altitude for those facilities that were located more than 3,000 feet

1 The Settlement Agreement is between ReliabilityFirst Corporation and Monongahela Power Company, The Potomac Edison Company and West Penn Power Company, all doing business as Allegheny Power. 2 Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability Standards (Order No. 672), III FERC Stats. & Regs. ¶ 31,204 (2006); Notice of New Docket Prefix “NP” for Notices of Penalty Filed by the North American Electric Reliability Corporation, Docket No. RM05-30-000 (February 7, 2008). See also 18 C.F.R. Part 39 (2009). Mandatory Reliability Standards for the Bulk-Power System, FERC Stats. & Regs. ¶ 31,242 (2007) (Order No. 693), reh’g denied, 120 FERC ¶ 61,053 (2007) (Order No. 693-A). See 18 C.F.R § 39.7(c)(2). 3 ReliabilityFirst Corporation (ReliabilityFirst) confirmed that Allegheny Power (listed on the Compliance Registry as “Allegheny Power – (LSE, DP, TO)”) was included on the NERC Compliance Registry as a Distribution Provider, Load Serving Entity and Transmission Owner on May 30, 2007. As a Load Serving Entity, Allegheny Power is subject to the requirements of NERC Reliability Standard EOP-004-1. As a Transmission Owner, Allegheny Power is subject to the requirements of NERC Reliability Standard FAC-003-1. The Settlement Agreement incorrectly omits that Allegheny Power is also registered on the NERC Compliance Registry as a Distribution Provider. 4 See 18 C.F.R § 39.7(c)(2). 5 According to the Settlement Agreement, Allegheny Power became aware that the report had not been submitted to NERC and ReliabilityFirst on May 1, 2008, but failed to self-report it as a possible violation at that time. During preparation for the Audit, the audit team identified this as a possible violation and notified Allegheny Power. Allegheny Power subsequently self-reported a possible violation to ReliabilityFirst on September 26, 2008.

NERC Notice of Penalty Allegheny Power March 31, 2010 Page 2

above sea level, and (2) because Clearance 2 distances provided in Section 6.10 of Allegheny Power’s transmission vegetation management program (TVMP) were not explicitly specified under all rated electrical operating conditions (maximum sag conditions). This Notice of Penalty is being filed with the Commission because, based on information from ReliabilityFirst, ReliabilityFirst and Allegheny Power have entered into a Settlement Agreement to resolve all outstanding issues arising from a preliminary and non-public assessment resulting in ReliabilityFirst’s determination and findings of the enforceable alleged violations of EOP-004-1 R3 and FAC-003-1 R1. According to the Settlement Agreement, Allegheny Power neither admits nor denies the alleged violations, but has agreed to the proposed penalty of five thousand dollars ($5,000) to be assessed to Allegheny Power, in addition to other remedies and actions to mitigate the instant violations and facilitate future compliance under the terms and conditions of the Settlement Agreement. Accordingly, the alleged violations identified as NERC Violation Tracking Identification Numbers RFC200800076 and RFC200800083 are being filed in accordance with the NERC Rules of Procedure and the CMEP. Statement of Findings Underlying the Alleged Violations This Notice of Penalty incorporates the findings and justifications set forth in the Settlement Agreement executed on October 27, 2009, by and between ReliabilityFirst and Allegheny Power, which is included as Attachment b, and the Supplemental Record of Information dated October 30, 2009. The details of the findings and basis for the penalty are set forth in the Settlement Agreement and herein. This Notice of Penalty filing contains the basis for approval of the Settlement Agreement by the NERC Board of Trustees Compliance Committee (NERC BOTCC). In accordance with Section 39.7 of the Commission’s regulations, 18 C.F.R. § 39.7 (2007), NERC provides the following summary table identifying each alleged violation of a Reliability Standard resolved by the Settlement Agreement, as discussed in greater detail below.

Region Registered Entity

NOC ID

NERC Violation ID

Reliability Std.

Req. (R) VRF

Total Penalty

($)

RFC200800076 EOP-004-1 3 Lower6 ReliabilityFirst

Corporation Allegheny Power NOC-413 RFC200800083 FAC-003-1 1 High

5,000

EOP-004-1 The purpose of Reliability Standard EOP-004-1 is for disturbances or unusual occurrences that jeopardize the operation of the bulk power system (BPS), or result in system equipment damage or customer interruptions, to be studied and understood to minimize the likelihood of similar events in the future.

6 When NERC filed Violation Risk Factors (VRF) it originally assigned EOP-004-1 R3.2 a “Lower” VRF. The Commission approved the VRF as filed; however, it directed NERC to submit modifications. NERC submitted the modified <blank> VRF and on August 9, 2007, the Commission approved the modified <blank> VRF. Therefore, the “Lower” VRF for EOP-004-1 R3.2 was in effect from June 18, 2007 until August 9, 2007 when the <blank> VRF became effective. EOP-004-1 R3, R3.1, R3.3 and R3.4 all have a “Lower” VRF.


EOP-004-1 R3 requires each Load Serving Entity, such as Allegheny Power, to provide a preliminary written report to its Regional Entity and NERC after experiencing a reportable incident. Specifically, R3.1 requires each Load Serving Entity to submit to its Regional Reliability Organization and NERC, within 24 hours of the disturbance or unusual occurrence, either a copy of the report submitted to the U.S. Department of Energy (DOE), or, if no DOE report is required, a copy of the NERC Interconnection Reliability Operating Limit and Preliminary Disturbance Report form. Events that are not identified until some time after they occur shall be reported within 24 hours of being recognized. EOP-004-1 R3 and R3.1 each have a “Lower” Violation Risk Factor (VRF).

According to the Settlement Agreement, during the Audit, the ReliabilityFirst audit team (Audit Team) discovered a possible violation of EOP-004-1 R3. The Audit Team found that Allegheny Power did not meet the requirements of EOP-004-1 R3 because Allegheny Power experienced a reportable incident that occurred on February 10, 2008 and failed to provide a copy of the preliminary written report that was submitted to DOE (form OE-417) to ReliabilityFirst and NERC. Specifically, Allegheny Power’s DOE disturbance report for the loss of electric service to more than 50,000 customers for one hour or more on February 10, 2008, was not submitted to either ReliabilityFirst or NERC within 24 hours of the disturbance or within 24 hours after it was recognized by Allegheny Power. During this incident, the Allegheny Power Outage Management System (OMS) failed from 16:40 to 19:50 on February 10, 2008. This extended outage resulted in the use of paper tickets to record customer calls. Because of this situation, Allegheny Power was unaware that the reporting level of 50,000 customers was reached until the paper tickets were manually entered into the OMS. The employee who reviewed the finalized OMS data on February 15, 20087 recognized that Allegheny Power exceeded 50,000 customers interrupted for at least an hour. This employee immediately filled out the OE-417 form, without referencing Allegheny Power’s NERC and ReliabilityFirst procedures. The report was submitted to the DOE on February 15, 2008; however, NERC and ReliabilityFirst were not copied when the report was submitted. ReliabilityFirst determined that Allegheny Power had an alleged violation of EOP-004-1 R3 because Allegheny Power failed to provide a written report to ReliabilityFirst and NERC for a reportable incident within 24 hours of the disturbance or within 24 hours after it was recognized by Allegheny Power. ReliabilityFirst determined the duration of the alleged violation to be from February 15, 2008, when Allegheny Power recognized that the reporting level of 50,000 customers was exceeded, through December 11, 2008, when Allegheny Power completed its Mitigation Plan. FAC-003-1 The purpose of Reliability Standard FAC-003-1 is to improve the reliability of the electric transmission systems by preventing outages from vegetation located on transmission rights-of-

7 Page 3 of the Settlement Agreement and the Non-Public Audit Report incorrectly state that Allegheny Power recognized on February 21, 2008 that the reporting level of 50,000 customers was exceeded.


way (ROW) and minimizing outages from vegetation located adjacent to ROW, maintaining clearances between transmission lines and vegetation on and along transmission ROW, and reporting vegetation-related outages of the transmission systems to the respective Regional Entities and NERC.

FAC-003-1 R1 requires a Transmission Owner, such as Allegheny Power, to prepare, and keep current, a formal TVMP. The TVMP shall include the Transmission Owner’s objectives, practices, approved procedures and work specifications.8 Specifically, R1.2.2 states that the Transmission Owner shall determine and document specific radial clearances to be maintained between vegetation and conductors under all rated electrical operating conditions (Clearance 2). These minimum clearance distances are necessary to prevent flashover between vegetation and conductors and will vary due to such factors as altitude and operating voltage. These Transmission Owner-specific minimum clearance distances shall be no less than those set forth in the Institute of Electrical and Electronics Engineers (IEEE) Standard 516-2003 (Guide for Maintenance Methods on Energized Power Lines) and as specified in Section 4.2.2.3, Minimum Air Insulation Distances without Tools in the Air Gap. Additionally, R1.2.2.1 states that were transmission system transient overvoltage factors are not known, clearances shall be derived from Table 5, IEEE 516-2003, phase-to-ground distances, with appropriate altitude correction factors applied. FAC-003-1 R1 and its sub-requirements have a “High” VRF.

During the Audit, the ReliabilityFirst Audit Team also discovered a possible violation of FAC-003-1 R1. The Audit Team found that Allegheny Power did not meet the requirements of FAC-003-1 R1 because Allegheny Power failed to provide Clearance 2 distance values that were corrected for altitude for those facilities more than 3,000 feet above sea level. An investigation by Allegheny Power revealed that 41 structures on two 500 kV lines were over 3,000 feet above sea level. The Audit Team also found that the Clearance 2 distances specified in Section 6.10 of Allegheny Power’s TVMP were not explicitly specified under all rated electrical operating conditions (maximum sag conditions). ReliabilityFirst determined that Allegheny Power had an alleged violation of FAC-003-1 R1 because Allegheny Power failed to include and keep current a portion of one of the four required elements of its TVMP. Specifically, Allegheny Power failed to include certain work specifications concerning Clearance 2 values. ReliabilityFirst determined the duration of the alleged violation to be from June 18, 2007, the date the Standard became enforceable, through April 8, 2009, when Allegheny Power completed its Mitigation Plan. Allegheny Power’s Compliance Program According to the Settlement Agreement, Allegheny Power’s Compliance Program document is posted on an internal company website. There is a weekly and monthly compliance program e-mail sent to all standard owners and management as well as periodic compliance meetings with

8 ANSI A300, Tree Care Operations – Tree, Shrub and Other Woody Plant Maintenance – Standard Practices, while not a requirement of this Standard, is considered to be an industry best practice.


standard owners and management. The Chief Compliance Officer is in the senior level of corporate management and has independent access to the CEO. Further, the Chief Compliance Officer does not directly report to the corporate officers of Allegheny Power and is independent from the departments responsible for performance to the Reliability Standards. The ultimate responsibility for compliance lies with senior corporate management and the corporate officers are solely responsible for certifying compliance with the Reliability Standards. Allegheny Power conducts an internal review of 50% of the applicable standards on a biennial schedule. The review consists of a documentation/evidence evaluation for those standards under review and is conducted and completed by the end of April each year. Corporate auditing also conducts an audit of the compliance program as directed by management. In addition, the internal compliance program calls for accountability from all standard owners and reviewers by requiring verification by signature. Regional Entity’s Basis for Penalty According to the Settlement Agreement, ReliabilityFirst has assessed a penalty of five thousand dollars ($5,000) for the referenced alleged violations. In reaching this determination, ReliabilityFirst considered the following factors: (1) the alleged violations constituted Allegheny Power’s first occurrence of violations of NERC Reliability Standards; (2) Allegheny Power was cooperative throughout the enforcement process; (3) a review of Allegheny Power’s compliance program demonstrated that its program promotes a culture of compliance throughout the company, as discussed above; (4) no misrepresentation or concealment of facts was evident; (5) ReliabilityFirst determined that the alleged violation of EOP-004-1 R3 did not pose a serious or substantial risk to the BES because the alleged violation has a “Lower” Violation Risk Factor, this was a reporting issue, and while Allegheny Power did not report the event to all the necessary parties, it did in fact notify the DOE as soon as it recognized that the issue occurred. (6) ReliabilityFirst determined that the alleged violation of FAC-003-1 R1 did not pose a serious or substantial risk to the BPS because Allegheny Power had been actively utilizing the practice of considering all operating conditions (maximum sag, blow-out, etc.) when planning work and directing vegetation management crew activities. Additionally, regarding altitude correction factors, Allegheny Power has relatively few spans of 200 kV and above line located at altitudes above 3,000 feet, with the highest altitude being about 3,500 feet. Applying the appropriate altitude correction factors to spans between 3,000 and 4,000 feet decreases the minimum approach distance by 3.5 inches for 500 kV lines and by 1.2 inches for 230 kV lines. These increased distances may theoretically be reduced by at least half if the correction factor is interpolated for the spans in Allegheny Power’s transmission system. After consideration of the above factors, ReliabilityFirst determined that, in this instance, the penalty amount of five thousand dollars ($5,000) is appropriate and bears a reasonable relation to the seriousness and duration of the alleged violations.


Status of Mitigation Plans9

EOP-004-1 R3 Allegheny Power submitted a proposed Mitigation Plan to ReliabilityFirst to address its alleged violation of EOP-004-1 R3 on March 31, 2009 with a completion date of July 18, 2008.10 The Mitigation Plan was revised on April 30, 2009 to include a milestone to submit the DOE OE-417 Report for the February 10, 2008 event to NERC and ReliabilityFirst. The revised Mitigation Plan was submitted with a completion date of December 11, 2008.11 The revised Mitigation Plan was accepted by ReliabilityFirst on May 8, 2009 and approved by NERC on May 11, 2009. The Mitigation Plan for this alleged violation is designated as MIT-08-1673 and was submittedas non-public information to FERC on May 11, 2009 in accordance with FERC orders.

Allegheny Power’s Mitigation Plan stated that Allegheny Power completed the following actions:

Revised its e-mail template used for submitting the OE-417 report to pre-populate the e-mail with the correct DOE, NERC and ReliabilityFirst addresses – completed on April 23, 2008;

Modified Allegheny Power’s DOE Reporting Procedure in Appendix 4-1 of the Emergency Operations Manual Volume I to clearly state that copies of the OE-417 report must be submitted to NERC and ReliabilityFirst – completed on June 12, 2008;

Ensured that all personnel who may be required to submit a OE-417 report reviewed the procedure changes – completed July 18, 2008; and

Submitted the OE-417 report for the February 10, 2008 event to NERC and ReliabilityFirst – completed on December 11, 2008.

Allegheny Power certified on June 23, 200912 that its Mitigation Plan was completed on December 11, 2008. As evidence of completion of its Mitigation Plan, Allegheny Power submitted the following:

Allegheny Power’s revised DOE form OE-417 for the reportable event that occurred on February 10, 2008. The revised form was submitted to the DOE, NERC and ReliabilityFirst on December 11, 2008. The original form was not submitted to NERC or ReliabilityFirst as required. The submittal of the form provides NERC and ReliabilityFirst with a record of the reportable event;

Allegheny Power’s revised e-mail template to be used for the submittal of OE-417 reports. The template includes pre-populated e-mail addresses for NERC and

9 See 18 C.F.R § 39.7(d)(7). 10 ReliabilityFirst’s verification of Mitigation Plan completion document incorrectly states that the submitted Mitigation Plan had a proposed completion date of July 18, 2009. 11 Section D.2 of the Mitigation Plan states that the Mitigation Plan was completed on July 18, 2008. However, the added milestone in section D.3 was completed on December 11, 2008. Allegheny Power’s certification of Mitigation Plan completion form clarifies that the July 18, 2008 completion date in section D.2 of the Mitigation Plan was an error and the actual completion date of the Mitigation Plan was December 11, 2008. 12 The Settlement Agreement and ReliabilityFirst’s verification of Mitigation Plan completion documents state that Allegheny Power’s certification of completion form was dated May 16, 2009 and signed on May 23, 2009. However, the certification document was dated June 16, 2009 and signed on June 23, 2009.


ReliabilityFirst that will be used for any future DOE reportable events. The use of the revised e-mail template will help ensure that events that are reportable to the DOE will be reported to NERC and ReliabilityFirst at the same time;

Allegheny Power’s revised DOE Reporting Procedure and Emergency Operations Manual Volume 1, Appendix 4-1 was revised on June 12, 2008 to add additional clarification and a note that states “[w]hen reporting to DOE, [the] OE-417 report must be filed with NERC, ReliabilityFirst, and copy PJM.” The revisions to the manual make it clear that when reports are submitted to the DOE, they must also be submitted to NERC and ReliabilityFirst; and

Sign off sheets for personnel who may be required to submit DOE OE-417 reports. The sign off sheets include signatures of relevant personnel acknowledging that they have reviewed procedure changes associated with DOE reporting. Relevant personnel were required to review the material prior to assuming a shift position after July 18, 2008. This provides evidence that appropriate personnel are cognizant of procedure changes made to help ensure that when reports are required to be submitted to the DOE, that they are also sent to NERC and ReliabilityFirst.

On July 6, 2009, after reviewing Allegheny Power’s submitted evidence, ReliabilityFirst verified that Allegheny Power’s Mitigation Plan was completed on December 11, 2008 and that Allegheny Power was in compliance with EOP-004-1 R3. FAC-003-1 R1 Allegheny Power submitted a proposed Mitigation Plan to ReliabilityFirst to address its alleged violation of FAC-003-1 R1 on March 31, 2009. A revised Mitigation Plan, to correct a typographical error regarding the Requirement number, was submitted to ReliabilityFirst on April 30, 200913 with a proposed completion date of May 1, 2009. The revised Mitigation Plan was accepted by ReliabilityFirst on May 8, 2009 and approved by NERC on May 11, 2009. The Mitigation Plan for this alleged violation is designated as MIT-08-1674 and was submitted as non-public information to FERC on May 11, 2009 in accordance with FERC orders. Allegheny Power’s Mitigation Plan stated that Allegheny Power completed the following actions:

Immediately contacted its transmission foresters the day after the Compliance Audit began on October 1, 2008 to:

o re-emphasize and reinforce its practice to consider all operating conditions when directing vegetation management crew activities; and

o distribute the needed calculations and the methods to be used for increasing minimum approach distance at altitudes over 3,000 feet for its use in identifying needed work and establishing clearances the crews must achieve.

13 The revised Mitigation Plan has a signature date of March 31, 2009, because it was not changed from the initial submittal on March 31, 2009.


Revised its TVMP to include a table that reflects the minimum approach distances at altitudes between 3,001 and 4,000 feet above sea level and to explicitly state that minimum approach distances must take into account conductor movement caused by operating conditions – completed on March 26, 2009; and

Provided training on revisions to the TVMP to all affected employees and contractors – completed on April 8, 2009.14

Allegheny Power certified on June 23, 200915 that its Mitigation Plan was completed on April 8, 2009. As evidence of completion of its Mitigation Plan, Allegheny Power submitted the following:

Allegheny Power’s revised TVMP within the Construction, Operation and Maintenance Manual which was revised on March 26, 2009 to include the application of appropriate altitude correction factors to Clearance 2 distances, and to explicitly state that the minimum approach distances take into account all rated electrical operating conditions for each conductor on each line; and

Sign off sheets of affected Allegheny Power employees and contractors involved in the design and implementation of the TVMP acknowledging training received on the revisions described above to the TVMP. All training was completed by April 8, 2009.

On July 6, 2009, after reviewing Allegheny Power’s submitted evidence, ReliabilityFirst verified that Allegheny Power’s Mitigation Plan was completed on April 8, 2009 and that Allegheny Power was in compliance with FAC-003-1 R1. Statement Describing the Proposed Penalty, Sanction or Enforcement Action Imposed16

Basis for Determination Taking into consideration the Commission’s direction in Order No. 693, the NERC Sanction Guidelines and the Commission’s July 3, 2008 Guidance Order,17 the NERC BOTCC reviewed the Settlement Agreement and supporting documentation on February 10, 2010. The NERC BOTCC approved the Settlement Agreement, including ReliabilityFirst’s imposition of a financial penalty, assessing a penalty of five thousand dollars ($5,000) against Allegheny Power and other actions to facilitate future compliance required under the terms and conditions of the Settlement Agreement. In approving the Settlement Agreement, the NERC BOTCC reviewed

14 Allegheny Power has indicated to RelabilityFirst that the evidence provided for the completion of the prescribed training for all affected employees and contractors show that the final training session was conducted on April 8, 2009. This date does not agree with the April 7, 2009 completion date (Section D.2) submitted on the accepted mitigation plan dated April 30, 2009. 15 The Settlement Agreement and ReliabilityFirst’s verification of Mitigation Plan completion documents state that Allegheny Power’s certification of completion form was dated May 16, 2009 and signed on May 23, 2009. However, the certification document was dated June 16, 2009 and signed on June 23, 2009. 16 See 18 C.F.R § 39.7(d)(4). 17 North American Electric Reliability Corporation, “Guidance Order on Reliability Notices of Penalty,” 124 FERC ¶ 61,015 (2008).


the applicable requirements of the Commission-approved Reliability Standards and the underlying facts and circumstances of the alleged violations at issue. In reaching this determination, the NERC BOTCC considered the following factors:

(1) These alleged violations constituted Allegheny Power’s first occurrence of violations of NERC Reliability Standards;

(2) ReliabilityFirst reported Allegheny Power was cooperative throughout the enforcement process;

(3) there was no evidence of any attempt to conceal a violation nor evidence of intent to do so;

(4) ReliabilityFirst determined that Allegheny Power’s compliance program demonstrated that its program promotes a culture of compliance throughout the company, as discussed above; and

(5) ReliabilityFirst determined that the alleged violations did not pose a serious or substantial risk to the bulk power system, as discussed above.

For the foregoing reasons, the NERC BOTCC approves the Settlement Agreement and believes that the proposed penalty of five thousand dollars ($5,000) is appropriate for the violations and circumstances in question, and is consistent with NERC’s goal to promote and ensure reliability of the bulk power system. Pursuant to Order No. 693, the penalty will be effective upon expiration of the 30 day period following the filing of this Notice of Penalty with FERC, or, if FERC decides to review the penalty, upon final determination by FERC.


Attachments to be Included as Part of this Notice of Penalty

The attachments to be included as part of this Notice of Penalty are the following documents and material:

a) Allegheny Power’s Compliance Audit Report – Public Version for EOP-004-1 R3 and FAC-003-1 R1 dated October 31, 2008, included as Attachment a;

b) Settlement Agreement by and between ReliabilityFirst and Allegheny Power executed October 27, 2009, included as Attachment b;

i) Allegheny Power’s Mitigation Plan designated as MIT-08-1673 for EOP-004-1 R3 submitted April 30, 2009, included as Attachment A to the Settlement Agreement;

ii) Allegheny Power’s Certification of Completion of the Mitigation Plan for EOP-004-1 R3 dated June 16, 2009 and signed June 23, 2009, included as Attachment B to the Settlement Agreement;

iii) ReliabilityFirst’s Verification of Completion of the Mitigation Plan for EOP-004-1 R3 dated July 6, 2009, included as Attachment C to the Settlement Agreement;

iv) Allegheny Power’s Mitigation Plan designated as MIT-08-1674 for FAC-003-1 R1 submitted April 30, 2009, included as Attachment D to the Settlement Agreement;

v) Allegheny Power’s Certification of Completion of the Mitigation Plan for FAC-003-1 R1 dated June 16, 2009 and signed June 23, 2009, included as Attachment E to the Settlement Agreement; and

vi) ReliabilityFirst’s Verification of Completion of the Mitigation Plan for FAC-003-1 R1 dated July 6, 2009, included as Attachment F to the Settlement Agreement.

A Form of Notice Suitable for Publication18

A copy of a notice suitable for publication is included in Attachment c.

18 See 18 C.F.R § 39.7(d)(6).


Notices and Communications Notices and communications with respect to this filing may be addressed to the following:

Gerald W. Cauley* President and Chief Executive Officer David N. Cook* Vice President and General Counsel North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, N.J. 08540-5721 (609) 452-8060 (609) 452-9550 – facsimile [email protected] [email protected] William Smith* Consulting Engineer Allegheny Power 800 Cabin Hill Drive Greensburg, Pennsylvania 15601 (724) 838-6552 [email protected] Robert Mattiuz, Jr.* Director, Transmission Planning and Compliance Allegheny Power 800 Cabin Hill Drive Greensburg, Pennsylvania 15601 (724) 838-6223 [email protected] Kathryn Patton* Deputy General Counsel Allegheny Power 800 Cabin Hill Drive Greensburg, Pennsylvania 15601 (724) 838-6603 [email protected]

Rebecca J. Michael* Assistant General Counsel Holly A. Hawkins* Attorney North American Electric Reliability Corporation 1120 G Street, N.W. Suite 990 Washington, D.C. 20005-3801 (202) 393-3998 (202) 393-3955 – facsimile [email protected] [email protected] Timothy R. Gallagher* President & CEO ReliabilityFirst Corporation 320 Springside Drive, Suite 300 Akron, Ohio 44333 (330) 456-2488 (330) 456-5390 – facsimile [email protected] Raymond J. Palmieri* Vice President and Director of Compliance ReliabilityFirst Corporation 320 Springside Drive, Suite 300 Akron, Ohio 44333 (330) 456-2488 (330) 456-5408 – facsimile [email protected] Robert K. Wargo* Manager of Compliance Enforcement ReliabilityFirst Corporation 320 Springside Drive, Suite 300 Akron, Ohio 44333 (330) 456-2488 (330) 456-5408 – facsimile [email protected]

mailto:[email protected]





*Persons to be included on the Commission’s service list are indicated with an asterisk. NERC requests waiver of the Commission’s rules and regulations to permit the inclusion of more than two people on the service list.

Megan E. Gambrel* Compliance Enforcement Specialist ReliabilityFirst Corporation 320 Springside Drive, Suite 300 Akron, Ohio 44333 (330) 456-2488 (330) 456-5408 – facsimile [email protected]

Conclusion NERC respectfully requests that the Commission accept this Notice of Penalty as compliant with its rules, regulations and orders.

Respectfully submitted,

/s/ Rebecca J. Michael Gerald W. Cauley President and Chief Executive Officer David N. Cook Vice President and General Counsel North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, N.J. 08540-5721 (609) 452-8060 (609) 452-9550 – facsimile [email protected] [email protected]

Rebecca J. Michael Assistant General Counsel Holly A. Hawkins Attorney North American Electric Reliability

Corporation 1120 G Street, N.W. Suite 990 Washington, D.C. 20005-3801 (202) 393-3998 (202) 393-3955 – facsimile [email protected] [email protected]

cc: Allegheny Power ReliabilityFirst Corporation Attachments


Attachment a

Allegheny Power’s Compliance Audit Report – Public Version for EOP-004-1 R3 and FAC-003-1

R1 dated October 31, 2008

Allegheny Power Compliance Audit Report October 31, 2008

Compliance Audit Report Public Version

Allegheny Power NERC ID# NCR02602 & NCR02603

Confidential Information (including Privileged and Critical Energy Infrastructure Information)

Has Been Removed

Date of Audit: September 30 - October 2, 2008

Date of Audit Report: October 31, 2008

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FOR PUBLIC RELEASE - MARCH 31, 2010

Confidential Information (including Privileged and Critical Energy Infrastructure Information) Has Been Removed

Allegheny Power Compliance Audit Report

October 31, 2008

i

TABLE OF CONTENTS

Executive Summary ..................................................................................... 1

Audit Process ............................................................................................... 2

Objectives .................................................................................................................... 2 Scope .......................................................................................................................... 2

Confidentiality and Conflict of Interest .................................................................................. 2 On-site Audit ........................................................................................................................... 3

Methodology ................................................................................................................ 4 Opening Briefing ..................................................................................................................... 4 Audit ........................................................................................................................................ 4 Exit Briefing ............................................................................................................................ 4

Company Profile .......................................................................................................... 5 Audit Specifics ............................................................................................................. 6

Audit Results ................................................................................................ 7

Findings ....................................................................................................................... 8 Compliance Culture ..................................................................................................... 9

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EExxeeccuuttiivvee SSuummmmaarryy An on-site compliance audit of Allegheny Power was conducted from September 30, 2008 to October 2, 2008. At the time of the audit, Allegheny Power was registered (NCR02603) for the Purchasing Selling Entity (PSE) function and also registered (NCR02602) for the Transmission Owner (TO), Distribution Provider (DP) and Load Serving Entity (LSE) functions. The scope of the on-site compliance audit included both of the Allegheny Power registered entities. The audit team evaluated Allegheny Power for compliance with forty nine (49) requirements in twenty seven (27) NERC Reliability Standards and one (1) requirement in one (1) ReliabilityFirst Standard for the period of June 18, 2007 to October 2, 2008. Allegheny Power submitted information and documentation to aid the audit team’s evaluation of compliance with standards. The audit team reviewed and evaluated all information provided by Allegheny Power to assess compliance with standards applicable to the PSE, TO, DP and LSE functions. Based on the information and documentation provided by Allegheny Power, the audit team made the following determinations: ten (10) requirements and six (6) NERC Reliability Standards were determined to be not applicable to Allegheny Power; Allegheny Power was found to be compliant with thirty seven (37) of thirty nine (39) applicable requirements and nineteen (19) of twenty one (21) applicable NERC Reliability Standards. Allegheny Power was also found to be compliant with the one (1) applicable requirement of the one (1) applicable ReliabilityFirst Standard. The audit team identified two (2) possible compliance violations associated with two (2) NERC Reliability Standards. Possible compliance violations were identified for EOP-004-1, R3 and sub-requirement R3.1 and FAC-003-1 R1 sub-requirements R1.2, R1.2.2 and R1.2.2.1. These results and the basis for the possible violations are further explained in the Findings in the Audit Results section of this report which includes detailed information of the audit team’s determination of applicability and compliance for the Reliability Standards within the scope of the compliance audit. This information may be used to help determine the severity level of possible sanctions and penalties. The possible compliance violations will be processed through the NERC and ReliabilityFirst Compliance Monitoring and Enforcement Program (CMEP). Any further actions related to possible compliance violations will be through the CMEP process. There were no ongoing mitigation plans and therefore none were reviewed by the audit team.

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AAuuddiitt PPrroocceessss The compliance audit process steps are detailed in the NERC and ReliabilityFirst Compliance Monitoring and Enforcement Programs (CMEP). The NERC and ReliabilityFirst CMEP generally conform to the United States Government Accountability Office Government Auditing Standards and other generally accepted audit practices. Objectives All registered entities are subject to audit for compliance with all Reliability Standards applicable to the functions for which the entity is registered. The audit objectives are to:

• Review Allegheny Power’s compliance with the requirements of Reliability Standards that are applicable to Allegheny Power, based on the functions that Allegheny Power is registered to perform.

• Validate compliance with applicable Reliability Standards from the NERC 2008 Implementation Plan list of actively monitored standards, and additional NERC Reliability Standards selected by ReliabilityFirst.

• Validate compliance with applicable Regional Standards from the ReliabilityFirst 2008 Implementation Plan list of actively monitored standards.

• Validate evidence of self-reported violations and previous self-certifications, confirm compliance with other applicable Reliability Standards, and review the status of associated mitigation plans.

• Document the compliance culture and the compliance program of Allegheny Power. Scope The scope of the compliance audit included applicable NERC Reliability Standards in the NERC 2008 Implementation Plan and applicable Regional Standards from the ReliabilityFirst 2008 Implementation Plan. At the time of the audit, Allegheny Power was registered for the functions of Purchasing Selling Entity (PSE); Transmission Owner (TO); Distribution Provider (DP) and Load Serving Entity (LSE). The audit team evaluated Allegheny Power for compliance with twenty seven (27) NERC Reliability Standards and one (1) ReliabilityFirst Standard for the period of June 18, 2007 to October 2, 2008. Confidentiality and Conflict of Interest Confidentiality and Conflict of Interest of the audit team are governed under the ReliabilityFirst Delegation Agreement with NERC, and Section 1500 of the NERC Rules of Procedure. Allegheny Power was informed of the ReliabilityFirst obligations and responsibilities under the

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agreement and procedures. The work history for each audit team member was provided to Allegheny Power. Allegheny Power was given an opportunity to object to an audit team member’s participation on the basis of a possible conflict of interest or the existence of other circumstances that could interfere with an audit team member’s impartial performance of duties. Allegheny Power had not submitted any objections by the stated fifteen day objection due date and accepted the audit team member participants without objection. On-site Audit Allegheny Power is currently subject to a compliance audit at a minimum of once every three years. Allegheny Power was provided with a sixty (60) day notification of this scheduled audit and at that time, all necessary documents required by the ReliabilityFirst audit process were provided. The following documents were provided to Allegheny Power as part of the notification:

• 60-day Notification letter which contained a request for evidence, information and data submittals

• Compliance Audit Survey • Internal Compliance Program Survey • Audit Agenda as applicable • Audit Team Work History with discussion of objection process • General Instructions for Data or Information Submittals • Reliability Standard Auditor Worksheets (RSAWs) • Reliability Standard Questionnaires

Documents were provided to Allegheny Power in both electronic and hardcopy format. ReliabilityFirst discussed the usage of technical experts with Allegheny Power and allowed their use as deemed necessary by Allegheny Power to provide the audit team an understanding of the evidence provided to demonstrate their compliance to the standards. An audit agenda was provided to Allegheny Power in advance to allow the necessary time to prepare for the audit. Allegheny Power’s cooperation and flexibility with the agenda was appreciated by the audit team. At times, and according to the generally accepted government auditing standard 3.31, auditors are required to use professional judgment in planning, performing audits, attestation engagements and in reporting the results. Additionally, and with the generally accepted government auditing standard 3.39, while this standard places responsibility on each auditor and audit organization to exercise professional judgment in planning and performing an audit or attestation engagement, it does not imply unlimited responsibility, nor does it imply infallibility on the part of either the individual auditor or the audit organization.

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Professional judgment does not mean eliminating all possible limitations or weaknesses associated with a specific audit, but rather identifying, considering, minimizing, mitigating, and explaining them. Methodology ReliabilityFirst staff conducted the audit on-site at the Allegheny Power offices in Greensburg Pennsylvania. The audit team reviewed the information, evidence and data submitted by Allegheny Power and assessed compliance with requirements of applicable Reliability Standards. The audit team requested and received additional information and clarification from subject matter experts when the audit team determined it was necessary. Opening Briefing An Opening Briefing was conducted on September 30, 2008 in the Allegheny Power offices utilizing a PowerPoint presentation to discuss the following:

• Introduction of audit team • Audit Objective and Scope • Team Audit Expectations • Discussion on Clarification Issues • Audit Process • Exit Briefing and schedule

Audit The Audit team consisted of three ReliabilityFirst Compliance staff members, one contract auditor and a NERC observer. A ReliabilityFirst Compliance staff member was designated as the audit team lead responsible for facilitating the audit process, serving as the primary contact person for the audit team, and completing the audit report. The audit team worked together to review evidence provided by Allegheny Power and assessed compliance with the requirements of the standards that were audited. Requests for additional information, verification and clarification were communicated to the Allegheny Power primary contact throughout the audit process. Allegheny Power was NOT permitted to create new documents and/or edit existing material and/or documents that were previously provided as evidence. Exit Briefing The audit team conducted an exit briefing with Allegheny Power on October 2, 2008 utilizing a PowerPoint presentation. The primary and alternate compliance contacts, Vice President - Transmission and subject matter experts for Allegheny Power participated in the exit briefing. The status of the on-site audit process was discussed, followed by audit scope, preliminary audit findings, compliance audit report process, and feedback forms. Possible violations identified

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during the audit were discussed with the preliminary results. Allegheny Power was provided an opportunity to ask questions that the audit team addressed. Company Profile Allegheny Energy is a utility holding company that has both regulated and unregulated operations. The regulated electric utilities doing business as Allegheny Power are: Monongahela Power Company, serving customers in West Virginia; The Potomac Edison Company, serving customers in Maryland, Virginia, and West Virginia; and the West Penn Power Company, serving customers in Pennsylvania.

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Audit Specifics The compliance audit was conducted from September 30, 2008 to October 2, 2008 at the Allegheny Power offices. Audit Team Participants

Audit Team Role Title Company

Team Lead Senior Consultant ReliabilityFirst Team Member Senior Consultant ReliabilityFirst Team Member Senior Compliance Engineer ReliabilityFirst Team Member Consultant Scott Porteous and Associates Team Member/Observer

Regional Compliance Program Coordinator NERC

Allegheny Power Audit Participants

Title Organization Reliability Compliance Coordinator Allegheny Power Director – Transmission Planning & Compliance Allegheny Power Executive Director – Transmission Engineering & Operations Allegheny Power Vice President -Transmission Allegheny Power Deputy General Counsel (Chief Compliance Officer) Allegheny Energy Manager – Transmission Forestry Allegheny Power GM – Operations Planning Allegheny Power Manager – Substation Engineering Allegheny Power GM – Transmission System Operations Allegheny Power GM – Metering and System Protection Allegheny Power GM – Electric Supply Allegheny Power GM – Restoration and Emergency Preparedness Allegheny Power GM – Transmission Reliability Allegheny Power Director – Transmission Engineering Allegheny Power Director – Transmission Operation Allegheny Power GM – EMS Support Allegheny Power Forester Allegheny Power GM – Load services Allegheny Power Director – System Security Allegheny Power Sr. Engineer – Transmission Planning Allegheny Power Engineer – Transmission Planning Allegheny Power

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AAuuddiitt RReessuullttss The audit team evaluated Allegheny Power’s compliance with forty nine (49) requirements in twenty seven (27) NERC Reliability Standards and one (1) requirement in one (1) ReliabilityFirst Standard for the period since June 18, 2007. The audit team used data provided by Allegheny Power to determine compliance with the standards. Based on the information provided by Allegheny Power, of the twenty seven (27) Reliability Standards audited, ten (10) requirements and six (6) NERC Reliability Standards were determined to be not applicable. Allegheny Power was found to be compliant with thirty seven (37) of thirty nine (39) applicable requirements and nineteen (19) of twenty one (21) applicable NERC Reliability Standards. Allegheny Power was also found to be compliant with the one (1) applicable requirement of the one (1) applicable ReliabilityFirst Standard. The audit team found Allegheny Power to have possible violations of two (2) requirements in two (2) NERC Reliability Standards. The audit team carefully and methodically reviewed the submitted evidence and discussed findings as a team to determine if the evidence met the requirements of the Reliability Standards. If the evidence was inadequate or did not cover all of the requirements in the Reliability Standard, the audit team asked for additional evidence and/or clarification. Allegheny Power provided a primary compliance contact and subject matter experts for clarification during the audit. Throughout the audit, the audit team members took notes on findings of evidence of compliance. The audit team reviewed documentation in hardcopy and electronic forms provided by Allegheny Power.

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Findings The following table details the findings for compliance with the Reliability Standards listed in the NERC 2008 Implementation Plan and/or selected for this audit:

Reliability Standard Requirement Finding BAL-005-0 R1. Compliant CIP-001-1 R1. Compliant CIP-001-1 R2. Compliant CIP-001-1 R3. Compliant CIP-001-1 R4. Compliant EOP-002-2 R9. N/A EOP-004-1 R2. Compliant EOP-004-1 R3. Possible Violation FAC-003-1 R1. Possible Violation FAC-003-1 R2. Compliant FAC-003-1 R3. Compliant FAC-008-1 R1. Compliant FAC-008-1 R2. Compliant FAC-008-1 R3. Compliant FAC-009-1 R1. Compliant FAC-009-1 R2. Compliant INT-001-2 R1. N/A INT-004-1 R1. N/A INT-004-1 R2. N/A IRO-001-1 R8. Compliant IRO-004-1 R4. Compliant IRO-005-1 R13. Compliant MOD-010-1 R1. Compliant MOD-010-0 R2. Compliant MOD012-0 R1. Compliant MOD-012-0 R2. Compliant MOD-017-0 R1. Compliant MOD-019-0 R1. Compliant PRC-004-1 R1. Compliant PRC-004-1 R3. Compliant PRC-005-1 R1. Compliant PRC-005-1 R2. Compliant PRC-008-0 R1. Compliant PRC-008-0 R2. Compliant PRC-010-0 R1. N/A PRC-010-0 R2. N/A PRC-011-0 R1. N/A

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PRC-011-0 R2. N/A PRC-016-0 R1 Compliant PRC-016-0 R2. Compliant PRC-016-0 R3. Compliant PRC-017-0 R1. Compliant PRC-017-0 R2. Compliant PRC-021-1 R1 N/A PRC-021-1 R2. N/A TOP-002-2 R3. Compliant TOP-002-2 R18. Compliant TOP-005-1 R4. Compliant VAR-001-1 R5. Compliant BAL-502-RFC-1 R2. Compliant

Compliance Culture In response to the Compliance Audit Questionnaire Allegheny Power indicated that they have a compliance culture as exhibited in the governing document of the Allegheny Power internal compliance program - Allegheny Energy Corporate Business Practice –A38-08 (Allegheny Energy Reliability Standards Compliance). The purpose of this Business Practice is to establish a common framework and process for assuring, documenting, and monitoring compliance with Electric Reliability Organization (ERO) Reliability Standards and compliance requirements of the Regional Entities (RE). The goal of the process is to assure full compliance with all applicable ERO/RE Reliability Standard requirements and thereby ensure an adequate level of reliability and eliminate the risk of penalties (monetary and non-monetary) associated with non-compliance. In addition, the document seeks to define a common approach to compliance among Allegheny Energy subsidiaries. Allegheny Energy, Inc. and its subsidiaries are committed to full compliance with all applicable ERO/RE Reliability Standard requirements. The ultimate responsibility for compliance resides with the Executive level of Allegheny Energy, Inc.

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Attachment b

Settlement Agreement by and between ReliabilityFirst and Allegheny Power executed

October 27, 2009

Settlement Agreement of Allegheny Power and ReliabilityFirst Page 1 of 13

In re ) ) ALLEGHENY POWER ) DOCKET NUMBER ) ) RFC200800076 NERC Registry ID # NCR02602 ) RFC200800083 )

SETTLEMENT AGREEMENT OF

RELIABILITYFIRST CORPORATION AND

ALLEGHENY POWER

I. INTRODUCTION

1. ReliabilityFirst Corporation (“ReliabilityFirst”) and Monongahela Power Company, The Potomac Edison Company and West Penn Power Company, all doing business as Allegheny Power, enter into this Settlement Agreement ("Agreement") to resolve all outstanding issues arising from a preliminary and non-public assessment resulting in ReliabilityFirst’s determination and findings, pursuant to the North American Electric Reliability Corporation (“NERC”) Rules of Procedure, of violations by Allegheny Power of the NERC Reliability Standard(s) EOP-004-1, Requirement 3, and FAC-003-1, Requirement 1.

II. STIPULATION OF FACTS

2. The facts stipulated herein are stipulated solely for the purpose of resolving between Allegheny Power and ReliabilityFirst the matters discussed herein and do not constitute stipulations or admissions for any other purpose, including but not limited to any admission by Allegheny Power of violations of NERC Reliability Standard(s) EOP-004-1, Requirement 3, and FAC-003-1, Requirement 1. Allegheny Power and ReliabilityFirst hereby stipulate and agree to the following:

A. BACKGROUND

3. Monongahela Power Company owns generation, transmission and distribution facilities and serves retail customers in West Virginia. The Potomac Edison Company owns transmission and distribution facilities and serves retail customers in Maryland, Virginia, and West Virginia. West Penn Power Company owns transmission and distribution facilities and serves retail customers in Pennsylvania. All three of these legal entities are direct subsidiaries of Allegheny Energy, Inc. and conduct business under the trade name “Allegheny Power.” The Allegheny Power transmission system is subject to the functional control of PJM Interconnection, L.L.C., consists of over 4,600 circuit miles of transmission lines and its peak system load is approximately 8,700 MW. The Allegheny Power transmission system has 48 tie lines to neighboring transmission systems of American Electric Power Company, Inc., Duquesne Light Company, Dominion Virginia Power, First Energy, and Potomac Electric Power Company.

4. Allegheny Power is registered on the NERC Compliance Registry as a Load

Serving Entity (“LSE”) and as a Transmission Owner (“TO”) in the ReliabilityFirst region with the NERC Registry Identification Number of NCR02602, and is therefore, subject to compliance with EOP-004-1, Requirement 3 and FAC-003-1, Requirement 1.

B. ALLEGED VIOLATION OF EOP-004-1, REQUIREMENT 3 – RFC200800076

5. NERC Reliability Standard EOP-004-1, “Disturbance Reporting”, Requirement 3 states in part as follows:

A Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator or Load Serving Entity experiencing a reportable incident shall provide a preliminary written report to its Regional Reliability Organization and NERC.

R.3.1 The affected Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator or Load Serving Entity shall submit within 24 hours of the disturbance or unusual occurrence either a copy of the report submitted to DOE [United States Department of Energy], or, if no DOE report is required, a copy of the NERC Interconnection Reliability Operating Limit and Preliminary Disturbance Report form. Events that are not identified until some time after they occur shall be reported within 24 hours of being recognized.

Settlement Agreement of Allegheny Power and ReliabilityFirst

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6. An on-site compliance audit of Allegheny Power was conducted by ReliabilityFirst from September 30, 2008 to October 2, 2008. The Allegheny Power Compliance Audit Report states in part as follows:

Allegheny Power stated in the RSAW that they failed to provide a written report to the Regional Reliability Organization and NERC for a reportable incident that occurred on February 10, 2008. During this incident, the Allegheny Power Outage Management System (OMS) failed from 16:40 to 19:50. This extended outage resulted in the use of paper tickets to record customer calls. Because of this situation, Allegheny Power was unaware that the reporting level of 50,000 customers was reached until the paper tickets were hand entered into the OMS. On February 21, 2008, it became evident that the 50,000 customer level was exceeded and a preliminary report (form OE-417) was submitted to the DOE, however the report was not submitted to NERC or ReliabilityFirst. This reporting problem has since been mitigated by revisions to the reporting procedures in the Emergency Operations Manual Volume I. Allegheny Power became aware that the report had not gone to NERC and ReliabilityFirst on May 1, 2008 but did not self report it as a possible compliance violation at that time. During preparation for the audit, the audit team identified this as a possible violation and notified Allegheny Power. Allegheny Power subsequently self reported a possible compliance violation to NERC and ReliabilityFirst on September 26, 2008. After reviewing the evidence submitted, the audit team concluded that Allegheny Power now has the reporting procedures in Emergency Operations Manual Volume I to ensure that the necessary reporting occurs. The audit team found that Allegheny Power did not submit a preliminary written report to its Regional Reliability Organization and NERC as stipulated in Requirement 3. In addition as stipulated in R3.1, a DOE disturbance report for the loss of electric service to more than 50,000 customers for one hour or more on February 10, 2008 was not submitted to its Regional reliability Organization and NERC within 24 hours of the disturbance or 24 hours after it was recognized. The DOE disturbance report was submitted to DOE as soon as it was determined that the disturbance met the reporting criteria.

7. Allegheny Power provided more information regarding the alleged violation in

the Mitigation Plan. Allegheny Power stated:

“AP [Allegheny Power] did not recognize it met the reporting criteria for customer outages during the February 10, 2008 distribution event due to trouble with the AP’s Outage Management System (OMS) that collects customer outage


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information…The individual who reviewed the finalized OMS data on February 15, 2008 recognized that AP did indeed exceed 50,000 customers interrupted for at least an hour. This individual immediately filled out the OE-417, without referencing AP’s NERC and RFC procedures. The report was submitted to the DOE on February 15, 2008; however, NERC and RFC were inadvertently not copied when the report was submitted.” In addition, Allegheny Power explained the difficulty with the Outage Management System. Allegheny Power stated, “Allegheny Power (AP) and neighboring utilities were impacted by severe weather on 02/10/08. Over the duration of the wind storm a total of 100,696 AP distribution customers were interrupted. During the wind storm AP’s Outage Management System (OMS) went down from 1640 to 1915 hours on 02/10/08, causing AP to convert to taking outage calls manually. The manual process for collecting outage information is not capable of providing a real-time customer count. Prior to the OMS outage, AP’s last issued customer outage report at 1500 on 2/10/08 showed less than 50,000 customer outages. When OMS became available at 1940, it reported less than 50,000 customer outages; hence AP was not aware it had exceeded 50,000 customers interrupted. It was not until several days later when all outages recorded were manually processed and added into the OMS did AP realize that the customer outage count exceeded 50,000 for more than an hour.”

8. ReliabilityFirst alleges that Allegheny Power experienced a reportable incident

and failed to provide a copy of the preliminary written report to ReliabilityFirst and NERC. Specifically, Allegheny Power’s DOE disturbance report for the loss of electric service to more than 50,000 customers for one hour or more on February 10, 2008 was not submitted to ReliabilityFirst and NERC within 24 hours of the disturbance or within 24 hours after it was recognized by Allegheny Power.

C. ALLEGED VIOLATION OF FAC-003-1, Requirement 1 – RFC200800083

9. NERC Reliability Standard FAC-003-1, “Transmission Vegetation Management

Program”, Requirement 1, states in part as follows:

R1. The Transmission Owner shall prepare, and keep current, a formal transmission vegetation management program (TVMP). The TVMP shall include the Transmission Owner’s objectives, practices, approved procedures, and work specifications. R1.2.2. Clearance 2 — The Transmission Owner shall determine and document specific radial clearances to be maintained between vegetation and conductors under all rated electrical operating


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conditions. These minimum clearance distances are necessary to prevent flashover between vegetation and conductors and will vary due to such factors as altitude and operating voltage. These Transmission Owner-specific minimum clearance distances shall be no less than those set forth in the Institute of Electrical and Electronics Engineers (IEEE) Standard 516-2003 (Guide for Maintenance Methods on Energized Power Lines) and as specified in its Section 4.2.2.3, Minimum Air Insulation Distances without Tools in the Air Gap. R1.2.2.1 Where transmission system transient overvoltage factors are not known, clearances shall be derived from Table 5, IEEE 516-2003, phase-to-ground distances, with appropriate altitude correction factors applied.

10. An on site compliance audit of Allegheny Power was conducted from September 30, 2008 to October 2, 2008. The Allegheny Power Compliance Audit Report states in part as follows:

Clearance 2 is presented in table 6.10.1 of the Allegheny Power TVMP. These values are identical to those shown in the IEEE standard 516-2003 (Guide for Maintenance Methods on Energized Power Lines). Section 6.10 states that the Clearance 2 distances will be corrected locally for altitude however there was no evidence to show that this was done. The audit team requested Allegheny Power to provide evidence that the Clearance 2 distances shown in section 6.10.1 are corrected for altitude for those facilities 200kv and above that are greater than 3000 ft above sea level as required in the IEEE standard. Investigation by Allegheny Power revealed that 41 structures on two 500kV lines were above 3000 ft above sea level (email from Jerry Swink to Rex Bartlett dated September 30, 2008) These structures are on the following 500kV lines:

• Line 510 Prunytown [sic] to Mt. Storm • Line 572 Mt. Storm to Meadowbrook

The audit team was also unable to find evidence that the Clearance 2 values in Section 6.10 of the Allegheny Power TVMP were to be applied under all rated electrical operating conditions (maximum sag conditions).

Therefore, the audit team found a possible violation of FAC-003-1, R.1.2.2, and R.1.2.2.1. However, the audit team found that Allegheny Power was in compliance with all the other sub-requirements of FAC-003-1, R.1.


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11. Allegheny Power provided the following statement to ReliabilityFirst regarding

actual harm and the Potential Impact on the Bulk Electric System as part of its Mitigation Plan submittal. Allegheny Power stated:

Allegheny Power’s position is that the alleged violations did not jeopardize, in any way, the reliability of the Bulk Power System. Prior to the Compliance Audit, Allegheny Power had been actively utilizing the practice of considering all operating conditions (maximum sag, blow-out, etc.) when planning work and directing vegetation management crew activities. Therefore, AP feels strongly that modified language in the TVMP further clarifying that clearances between vegetation and conductors must be maintained under all rated electrical operating conditions would not have affected how AP’s TVMP was implemented. Regarding altitude correction factors, AP has relatively few spans of 200 kV and above line located at altitudes above 3000 feet, with the highest altitude being about 3500 feet. Applying the appropriate altitude correction factors to spans between 3000 and 4000 feet decreases the Minimum Approach Distance by 3.5 inches for 500 kV lines and by 1.2 inches for 230 kV lines, and these increased distances can arguably be reduced by at least half if the correction factor is interpolated for the spans in AP’s transmission system. These few inches of increased distance are negligible and impractical to implement when considering the clearances AP currently maintains under all operating conditions and the IEEE Standard 516-203. Further clarifying AP’s statement regarding altitude correction in its TVMP would not have affected how AP’s TVMP was implemented.

12. ReliabilityFirst alleges that Allegheny Power failed to include and keep current a

portion of one of the four required elements of its TVMP, in that Allegheny Power failed to include and keep current certain work specifications concerning Clearance 2 values. Specifically, Allegheny Power failed to provide Clearance 2 values that are corrected for altitude for those facilities more than 3,000 feet above sea level, and the Clearance 2 distances specified in Section 6.10 of the Allegheny Power TVMP were not explicitly specified under all rated electrical operating conditions.


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III. SEPARATE REPRESENTATIONS OF THE PARTIES

A. STATEMENT OF RELIABILITYFIRST AND SUMMARY OF FINDINGS

13. ReliabilityFirst considers this Agreement as the resolution of all issues with regard to the above captioned docket number and to bind Allegheny Power in the commitment to perform actions hereafter enumerated and listed as conditions for this Agreement.

14. EOP-004-1, Requirement 3 has a Violation Risk Factor (VRF) of Lower, as evidenced by the Violation Risk Factor Matrix from the NERC December 17, 2007 Compliance Filing.

15. FAC-003-1, Requirement 1 has a Violation Risk Factor (VRF) of High, as evidenced by the Violation Risk Factor Matrix from the NERC December 17, 2007 Compliance Filing.

16. ReliabilityFirst found noteworthy and commendable certain aspects of Allegheny Power’s compliance program including that he compliance program at Allegheny Power is comprised of the goal (Compliance), the reliability compliance structure, responsibilities, and processes for the following items: ERO and RE Reliability Standard Requirements, ERO Compliance Requests, Regional Compliance Audits, Reliability Standard Development, and Internal Review. The Compliance Program document is posted on the internal company website. There is a weekly and monthly compliance program email sent to all standard owners and management, as well as periodic compliance meetings with standard owners and management. The Chief Compliance Officer is in the senior level of corporate management, and has independent access to the CEO. The Chief Compliance Officer does not directly report to the corporate officers of Allegheny Power or Allegheny Energy, Inc., other than the CEO, and is independent from the departments responsible for performance to the Reliability Standards. The ultimate responsibility for compliance lies with senior corporate management, and the corporate officers are solely responsible for certifying compliance with the Reliability Standards. Allegheny Power conducts an internal review of 50% of the applicable standards on a biennial schedule. The review consists of documentation/evidence review for those standards under review, and is conducted and completed by the end of April each year. Corporate auditing conducts an audit of the compliance program as initiated by management. In addition, the internal compliance program (Business Practice A38-08 – Allegheny Energy Reliability Standards Compliance) calls for accountability from all Standard Owners and reviewers by requiring verification by signature.

17. ReliabilityFirst agrees that this Agreement is in the best interest of the parties and in the best interest of bulk power system reliability.


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B. STATEMENT OF ALLEGHENY POWER

18. Allegheny Power neither admits nor denies that the facts set forth and agreed to

by the parties for purposes of this Agreement constitute violations of EOP-004-1, Requirement 3, and FAC-003-1, Requirement 1.

19. Allegheny Power has agreed to enter into this Agreement with ReliabilityFirst to

avoid extended litigation with respect to the matters described or referred to herein, to avoid uncertainty, and to effectuate a complete and final resolution of the issues set forth herein. Allegheny Power agrees that this Agreement is in the best interest of the parties and in the best interest of maintaining a reliable electric infrastructure.

IV. MITIGATING ACTIONS AND PENALTY A. Mitigating Actions for EOP-004-1, Requirement 3 – RFC200800076

20. On March 31, 2009, Allegheny Power submitted to ReliabilityFirst a Mitigation Plan to address the Alleged Violation set forth in this Agreement. On April 30, 2009, Allegheny Power submitted a revised Mitigation Plan to ReliabilityFirst. On May 8, 2009, ReliabilityFirst accepted the April 30, 2009 Mitigation Plan (Mitigation Plan Tracking # MIT-08-1673, see Attachment A), and sent the accepted Mitigation Plan to NERC. NERC approved the Mitigation Plan on May 11, 2009 and submitted the Mitigation Plan to the Federal Energy Regulatory Commission (“FERC”) as confidential, non-public information on May 11, 2009. Allegheny Power submitted to ReliabilityFirst a certification of completion of the Mitigation Plan, dated May 16, 2009 and signed on May 23, 2009, which stated that the Mitigation Plan was completed on December 11, 2008 (entitled “Certification of Mitigation Plan Completion”, see Attachment B), and also submitted evidence of completion of the Mitigation Plan.

21. In the Mitigation Plan, Allegheny Power outlines actions identified and taken in order to mitigate the violation, as well as the dates the actions were taken: a. Submit the OE-417 Report for the 02/10/08 Event to NERC and RFC

(Completed on 12/11/08) b. Revise Allegheny Power’s email template used for submitting the DOE

OE-417 Report to pre-populate the email with the correct DOE, NERC, and RFC addresses. (Completed on 4/23/08)

c. Modify Allegheny Power’s DOE Reporting Procedure in Appendix 4-1 of

the Emergency Operations Manual Volume I to clearly state that copies of the DOE OE-417 Report must be submitted to NERC and RFC. (Completed on 6/12/2008)


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d. Communicate to and ensure all personnel who may be required to submit a

DOE OE-417 Report review the procedure changes described in Task 2. (Completed on 7/18/2008).

22. ReliabilityFirst reviewed the evidence Allegheny Power submitted in support of

its certification of completion of the Mitigation Plan. ReliabilityFirst performed an audit-like review to verify that all actions specified in the Mitigation Plan were successfully completed. On July 6, 2009, ReliabilityFirst verified that the Mitigation Plan was completed in accordance with its terms (see Attachment C, “Summary and Review of Evidence of Mitigation Plan Completion”).

B. Mitigating Actions for FAC-003-1, Requirement 1 – RFC200800083

23. On March 31, 2009, Allegheny Power submitted to ReliabilityFirst a Mitigation

Plan to address the Alleged Violation of FAC-003-1, Requirement 1, set forth in this Agreement. On April 30, 2009, Allegheny Power submitted a revised Mitigation Plan to ReliabilityFirst. (Mitigation Plan Tracking # MIT-08-1674, see Attachment D) On May 8, 2009, ReliabilityFirst accepted the Mitigation Plan and submitted the Mitigation Plan to NERC. NERC approved the Mitigation Plan on May 11, 2009 and submitted the Mitigation Plan to FERC as confidential, non-public information on May 11, 2009. Allegheny Power submitted a Certification of Mitigation Plan completion, dated May 16, 2009 and signed May 23, 2009, attesting that the Mitigation Plan was completed on April 8, 2009 (see Attachment E), and also submitted evidence of completion of the Mitigation Plan.

24. In the Mitigation Plan, Allegheny Power outlines immediate actions taken to mitigate the violation. Allegheny Power immediately contacted its transmission foresters after the Compliance Audit to 1) re-emphasize and reinforce its practice to consider all operating conditions when directing vegetation management crew activities, and 2) distribute the needed calculations and the methods to be used for increasing Minimum Approach Distance at altitudes over 3,000 feet for their use in identifying needed work and establishing clearances the crews must achieve.

25. In addition to the summary of immediate actions taken by Allegheny Power, the Mitigation Plan also provides a list of two additional Key Milestone Activities completed by Allegheny Power:

a. Allegheny Power shall revise the TVMP to include a table that reflects the Minimum Approach Distances at altitudes between 3,001 and 4,000 feet above sea level and to explicitly state that minimum approach distances must take into account conductor movement caused by operating conditions (by March 26, 2009).


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b. Allegheny Power shall provide training on revisions to TVMP to

all affected employees and contractors (by April 7, 2009).

26. ReliabilityFirst reviewed the evidence Allegheny Power submitted in support of its certification of completion of the Mitigation Plan. ReliabilityFirst performed an audit-like review to verify that all actions specified in the Mitigation Plan were successfully completed. On July 6, 2009, ReliabilityFirst verified that the Mitigation Plan was completed in accordance with its terms (see Attachment F, “Summary and Review of Mitigation Plan Completion”).

27. Allegheny Power shall pay a monetary penalty of Five Thousand Dollars

($5,000.00) to ReliabilityFirst. ReliabilityFirst shall present an invoice to Allegheny Power within twenty days after this Agreement is either approved by FERC or by operation of law. If Allegheny Power fails to pay such amount within thirty days after receipt of such invoice, ReliabilityFirst shall notify NERC if the payment is not received within such thirty day period and further reserves the right to assess and collect a monetary penalty, to impose a sanction or otherwise to impose enforcement actions. Allegheny Power shall retain all rights to defend against such additional enforcement actions in accordance with NERC and FERC Rules of Procedure.

28. Failure to make a timely penalty payment or to comply with any of the terms and

conditions agreed to herein, or any other conditions of this Agreement, shall be deemed by ReliabilityFirst to be either the same alleged violations that initiated the settlement reflected by this Agreement and/or additional alleged violation(s) and may subject Allegheny Power to new or additional enforcement, penalty or sanction actions in accordance with the NERC and FERC Rules of Procedure.

29. If Allegheny Power does not make the monetary penalty payment above at the

times agreed by the parties, interest payable to ReliabilityFirst will begin to accrue pursuant to FERC’s regulations at 18 C.F.R. § 35.19(a)(2)(iii) from the date that payment is due, in addition to the penalty specified above.

V. ADDITIONAL TERMS

30. The parties to this Agreement agree that they enter into this Agreement

voluntarily and that, other than the recitations set forth herein, no tender, offer or promise of any kind by any member, employee, officer, director, agent or representative of ReliabilityFirst or Allegheny Power has been made to induce the parties to enter into this Agreement.

31. ReliabilityFirst shall report the terms of all settlements of compliance matters to

NERC. NERC will review this Agreement for the purpose of evaluating its consistency with other settlement agreements entered into for similar alleged violations or under other similar circumstances. Based on this review, NERC


Page 10 of 13

will either approve or reject this Agreement and, if rejected, notify ReliabilityFirst and Allegheny Power of changes to this Agreement that would result in approval. If NERC rejects this Agreement, NERC will provide specific written reasons for such rejection and ReliabilityFirst will attempt to negotiate a revised settlement agreement with Allegheny Power including any changes to this Agreement specified by NERC. If a settlement cannot be reached, the enforcement process shall continue to conclusion. If NERC approves this Agreement, NERC will (i) report the approved settlement to FERC for its review and approval by order or operation of law and (ii) publicly post the alleged violation and the terms and conditions of this Agreement.

32. This Agreement shall become effective upon FERC’s approval of the Agreement

by order or operation of law as submitted to it or as modified in a manner acceptable to the parties.

33. Allegheny Power agrees that this Agreement, when approved by NERC and

FERC, shall represent a final settlement of all matters set forth herein and Allegheny Power waives its right to further hearings and appeal, unless and only to the extent that Allegheny Power contends that any NERC or FERC action on this Agreement contains one or more material modifications to this Agreement.

34. Allegheny Power consents to the use of ReliabilityFirst’s determinations,

findings, and conclusions set forth in this Agreement for the purpose of assessing the factors, including the factor of determining Allegheny Power’s history of violations, in accordance with the NERC Sanction Guidelines and applicable Commission orders and policy statements. Such use may be in any enforcement action or compliance proceeding undertaken by NERC and/or any Regional Entity; provided however that Allegheny Power does not consent to the use of the specific acts set forth in this Agreement as the sole basis for any other action or proceeding brought by NERC and/or Regional Entity, nor does Allegheny Power consent to the use of this Agreement by any other party in any other action or proceeding.

35. Each of the undersigned warrants that he or she is an authorized representative of

the entity designated, is authorized to bind such entity and accepts this Agreement on the entity's behalf.

36. The undersigned representative of each party affirms that he or she has read the

Agreement, that all of the matters set forth in the Agreement are true and correct to the best of his or her knowledge, information and belief, and that he or she understands that the Agreement is entered into by such party in express reliance on those representations, provided, however, that such affirmation by each party's representative shall not apply to the other party's statements of position set forth in Section III of this Agreement.

37. The Agreement may be signed in counterparts.


Page 11 of 13

38. This Agreement is executed in duplicate, each of which when so executed shall

be deemed to be an original.


Page 12 of 13

Approved by:

Datetd724/07

GallagherPresidentReliabilityFirst Corporation

Agreed to and accepted:

1 ,

Ra3Ymoid J. almieri DateVice President and Director of ComplianceReliabilityFirst Corporation

James R. Haney.Vice PresidentMonongahela Power Company,The Potomac Edison Company andWest Penn Power Company, all doingbusiness as Allegheny Power

Settlement Agreement of Allegheny Power and ReliabilityFirst Page 13 of 13

Attachment A

Mitigation Plan – EOP-004-1, R3 Dated April 30, 2009

Mit Plan ID #: MIT-08-1673

RFC200800076

Attachment A

RELIABILIT

Mitigation Plan Submittal Form

Date this Mitigation Plan is being submitted: April 30, 2009

Section A: Compliance Notices & Mitigation Plan Requirements

A.I Notices and requirements applicable to Mitigation Plans and this SubmittalFonn are set forth in "Attachment A - Compliance Notices & Mitigation PlanRequirements."

A.2 This fonn must be used to submit required Mitigation Plans for review andacceptance by ReliabilityFirst and approval by NERC.

A.3 [8J 1 have reviewed Attachment A and understand that this Mitigation PlanSubmittal Fonn will not be accepted unless this box is checked.

Section B: Registered Entity Information

B.l Identify your organization.

Company Name:

Company Address:

NERC Compliance Registry ID:

Allegheny Power

800 Cabin Hill Drive,Greensburg, PA 1560 I

NCR02602

8.2 Identify the individual in your organization who will be the Entity Contactregarding this Mitigation Plan.

Name:

Title:

Email:

Phone:

Version 2.0 - Released 7/11/08

William J. Smith

Consulting Engineer

wsmith [email protected]

(724) 838-6552

Page 1 of 12

REL ABILIT


Date this Mitigation Plan is being submitted: April 30,2009


A.I Notices and requirements applicable to Mitigation Plans and this SubmittalForm are set forth in "Attachment A - Compliance Notices & Mitigation PlanRequirements. '

A.2 This form must be used to submit required Mitigation Plans for review andacceptance by ReliabilityFirst and approval by NERC.

A.3 ~ I have reviewed Attachment A and understand that this Mitigation PlanSubmittal Form will not be accepted unless this box is checked.

Section B: Registered Entity InformationB.1 Identify your organization.

Company arne:

Company Address:


Allegheny Power

800 Cabin Hill Drive,Greensburg, PA 15601

NCR02602


arne:

Title:

Email:

Phone:


William J. Smith

Consulting Engineer

[email protected]

(724) 838-6552

Page 1 of 12For Public Release - March 31, 2010

Attachment A

RELlABILlT

Section C: Identification of Alleged or Confirmed Violation(s)Associated with this Mitigation Plan

C.I This Mitigation Plan is associated with the following Alleged or Confinnedviolation(s) of the reliability standard listed below.

NERC Reliability Requirement Violation Alleged or Method ofViolation lD Standard Number Risk Factor Confirmed Detection (e.g.,

# Violation Date!O) Audit, Self-report,lnvesti2atio~)

RFC200800076 EOP-004-1 3 Lower 021151200S"'" Compliance Audit

(.) Note: The Alleged or Confmned VlOlatlon Dale shall be expressly specified by the Registered EnIIIY,and subject to modification by ReliabilityFirst, as: (i) the date the Alleged or Confmned violation occurred;(ii) the dale lhallhe Alleged or Confirmed violation was self-reported; or (iii) the date dun the Alleged orConfinned violation has been deemed to have occurred on by ReliabilityFirst. Questions regarding thedate to use should be directed to the ReJiabilityFirst contact identified in Section G of this fonn.

0) ote: This date is different than the date stated in the Compliance Audit Report. Thiswas an oversight during the Audit. The email used to initially distribute the OEA17 wassent on 2/15/0S.

C.2 Identify the cause of the Alleged or Confinned violation(s) identified above.Additional detailed infonnation may be provided as an attachment.

AP believes the primary cause of not filing the OE-417 report with NERC andRFC is that its reporting processes and training focused on recognizing andreporting events during an event itself when its Incident Management Team(IMT) is activated. not subsequent to the event. AP did not recognize it met thereporting criteria for customer outages during the February 10, 2008 distributionevent due 10 trouble with the AP's Outage Management System (OMS) thatcollects customer outage infonnation (refer to Part C.3 for more detail). Theindividual who reviewed the finalized OMS data on February 15,2008 recognizedthat AP did indeed exceed 50,000 customers interrupted for at least an hour. Thisindividual immediately filled out the OE-417, without referencing AP's NERCand RFC Procedures. The report was submitted to DOE on February 15,2008;however, NERC and RFC were inadvertently not copied when the report wassubmitted. At the time, the main focus was to submit the DOE OEA 17 as quickly

Version 2.0 - Released 7111/08 Page 2 of 12

Section C: Identification of Alleged or Confirmed Violation(slAssociated with this Mitigation Plan

C.I This Mitigation Plan is associated with the following Alleged or ontinnedI f d I

() g p ysp y g yand ubject to modification by ReliabilityFir r. : (i) the date the Alleged or Confirmed 'olation occurred'(ii) the dale that the Alleged or Confirmed violation \ self-reported' or (iii) the date Ihal the Alleged orConfirmed violation b been deemed to ba e occurred on by Reliabi)jtyFirsf. Questio regarding thedate to e should be directed 10 the ReliabiliryFirsr contaci identified in eetian G ofthi form.

vio ation(s) 0 the reliability stan ard listed be ow.NERC Reliability Requirement Violation Alleged or Method of

Violation ill Standard umber Risk Factor Confirmed Detection (e.g.,# Violation Date(O) udit, elf-report,

Investigation)RFC200800076 EOP-004-1 3 Lower OV1512008(IKlI Compliance Audit

• Note: The Alle ed or Confirmed Violation Dale hall be ex r I ecifiedb the Re it red Entit

III ot: Thi date i diffi rent than the date tated in th mpliance U 1l Report. Thia an 0 er igbt during th Audit. The email used to initially distribute th OE-417 wa

ent n 2/15/08.

C.2 Identify the caus oftbe Alleged or Confumed violation(s) identifi d above.Additional detailed informati 11 may be provided a an attachment.

AP elie Lh primary cau 0 n t filing the 0 -417 r port \ ith ERC andRFC i that it rep rting pc c and training fo u don r gnizing andr porting ent during an \< n i elf hen it in ident ana m nt Team(L\1T) i acth t d. n t ub u nl to the e 'ent. P did not re gniz it met threp rting ent ria for custom r outages during h February J0, _00 distributionvent due [0 trou Ie ith the p' utage ana em t yst m ) thatollect Cll t mer outage infonnation (refer t Part .3 for mor detail). The

individual who re iewed th finalized OM data on February 15 2008 recogniz dthat AP did inde d exc ed 50,000 customers int rrupted for at lea. t an hour. TI1iindividual immediately filled out the OE-4] 7 without referencing I\P' NERCand RFC Pr cedure . The repol1 a submitted 0 OE on February 15 2008:ho ever. R and RFC er inadvertently not copied wh nth rep rt wasubmi ed. I lh time. th main fI Cll a to. ubmit th DOE 0 -417 as qui kl.

rsion 2.0 - Relea ed 7/11/08 Page 2 of12For Public Release - March 31, 2010

Attachment A

RELIABILIT

as possible, because it was now several days after the criteria was met. In thehaste of submitting the report, the individual did not reference the procedures andfocused on the fact that it was a DOE report, overlooking the requirement to copyNERC and RFC. AP is confident that NERC and RFC would have been copied ifthe report had been filed during the event when AP's IMT was activated, becausethe IMT reviews all regulatory agency procedures during such events as part of itsIncident Management Process. Because the reporting was done outside of theevent by an individual rather than the IMT, AP believes this was the primarycause of not copying NERC and RFC when the report was sent to DOE.

AP believes a contributing cause for not filing the OEAI7 report with NERC andRFC is that its reporting procedures were written in a manner that did not clearlystate who should receive this report. AP must report a variety of events tomultiple state and federal regulatory agencies, so AP chose to organize itsprocedures by regulatory agency. The OE-417 report is listed in AP'sDepartment of Energy (DOE) Reporting Procedure, because it is a DOE Report.AP did not clearly state in its DOE Procedure that NERC and RFC should becopied when the OEAI7 report is filed; rather, the employee(s) filing the reporthad to reference AP's NERC and RFC procedures to realize these entities mustalso receive a copy of the OE-417 report.

Note: If a fonnal root cause analysis evaluation was perfonned, submit a copy ofthe summary report.

C.3 Provide any additional relevant infonnation regarding the Alleged or Confirmedviolations associated with this Mitigation Plan. Additional detailed infonnationmay be provided as an attachment.

Allegheny Power (AP) and neighboring utilities were impacted by severe weatheron 02/10108. Over the duration of the wind stonn a total of 100,696 APdistribution customers were interrupted. During the wind stonn, AP's OutageManagement System (OMS) went down from 1640 to 1915 hours on 02/10108,causing AP to convert to taking outage calls manually. The manual process forcollecting outage infonnation is not capable of providing a real-time customercount. Prior to the OMS outage, AP's last issued customer outage report at 1500on 2/10108 showed less than 50,000 customer outages. When OMS becameavailable at 1940, it reported less than 50,000 customer outages; hence, AP wasnot aware it had exceeded 50,000 customers interrupted. It was not until severaldays later when the all outages recorded were manually processed and added intothe OMS did AP realize that the customer outage count exceeded 50,000 for morethan an hour.


REas possible, becau e it was now several days after the criteria was met. In thehaste of submitting the report, the individual did not reference the procedures andfocused on the fact tha it was a DOE report, overlooking the requirement to copyNERC and RFC. AP is confident that NERC and RFC would have been copied ifthe report had been filed during the event when AP s IMT was activated becausethe IMT reviews all regulatory agency procedures during such events as part of itsIncident Management Process. Because the reporting was done outside of theevent by an individual rather than the IMT AP believes this was the primarycause of not copyingNERC and RFC when the report was sent to DOE.

AP believes a contributing cause for not filing the OE-417 report with ERe andRFC is that its reporting procedures were written in a manner that did not clearlystate who should receive this report. AP must report a variety of events tomultiple state and federal regulatory agencies, so AP chose to organize itsprocedures by regulatory agency. The OE-417 report is listed in AP'sDepartment of Energy (DOE) Reporting Procedure, because it is a DOE Rep011.AP did not clearly state in its DOE Procedure that ERC and RFC should becopied when the OEA1? report is filed; rather, the employee(s) filing the reporthad to reference AP's NERC and RFC procedures to realize these entities mustalso receive a copy of the OE-41? report.

ote: If a formal root cause analysis evaluation was performed, submit a copy ofthe summary report.

C.3 Provide any additional relevant information regarding the Alleged or Confirmedviolations associated with this Mitigation Plan. Additional detailed informationmay be provided as an attachment.

Allegheny Power (AP) and neighboring utilities were impacted by severe weatheron 0211 0108. Over the duration of the wind stonn a total of 100,696 APdistribution customers were interrupted. During the wind storm, AP's OutageManagement System (OMS) went down from 1640 to 1915 hours on 02/1 0108,causing AP to con ert to taking outage calls manually. The manual process forcollecting outage information is not capable of providing a real-time customercount. Prior to the OMS outage AP s last issued customer outage report at 1500on 2/10108 showed less than 50,000 customer outages. When OMS becameavailable at 1940, it reported less than 50,000 customer outages' hence AP wasnot aware it had exceeded 50 000 customers interrupted. It was not until severaldays later when the all outages recorded were manually processed and added intothe OMS did AP realize that the custom r outage count exceeded 50,000 for morethan an hour.

Version 2.0 - Released 7/11/08 Page 3 of 12For Public Release - March 31, 2010

Attachment A

RELIABILIT

After the event was over and the outage information was manually input intoOMS, Allegheny Power recognized that it met the criteria to report and filed theOE-41? schedule I and 2 on 02/15108.

Section D: Details of Proposed Mitigation Plan

Mitigation Plan Contents

0.1 Identify and describe the action plan, including specific tasks and actions thatyour organization is proposing to undertake, or which it undertook if thisMitigation Plan has been completed, to correct the Alleged or Confirmedviolations identified above in Part C.l of this fonn. Additional detailedinfonnation may be provided as an attachment.

AP identified and completed three tasks to address the primary and contributingcauses described in Part C.2 of this form. The three tasks are as follows:

I. Submit the OEAI? Report for the 02/1 012008 Event to NERC and RFC.

2. Revise AP's email template used for submitting the DOE OEAI7 Report topre-populate the email with the correct DOE, NERC, and RFC addresses.

3. Modify AP's DOE Reporting Procedure in Appendix 4-1 of the EmergencyOperations Manual Volume I to clearly state that copies of the DOE OE-417Report must be submitted to NERC and RFC.

4. Communicate to and ensure all personnel who may be required to submit aDOE OE-417 Report review the procedure changes described in Task 2.

Mitigation Plan Timeline and Milestones

0.2 Provide the date by which full implementation of the Mitigation Plan will be, orhas been, completed with respect to the Alleged or Continned violationsidentified above. State whether the Mitigation Plan has been fully implemented,and/or whether the actions necessary to assure the entity has returned to fullcompliance have been completed.

The Mitigation Plan was fully implemented and completed on 07/18/2008.

Version 2.0 - Released 7/11/08 Page 4 of 12

After the event was over and the outage information wa manually input intoOMS, Allegheny Power recognized that it met the criteria to report and filed theOE-417 schedule I and 2 on 02/15/08.



D.l Identify and describe the action plan, including specific tasks and actions thatyour organization is proposing to undertake, or which it undertook if thisMitigation Plan has been completed, to correct the Alleged or Confirmedviolations identified above in Part C.I of this form. Additional detailedinformation may be provided as an attachment.

AP identified and completed three tasks to addre s the primary and contributingcauses described in Part C.2 of this form. The three task are as follows:

1. Submit the OE-4l? Report for the 02II 0/2008 Event to ERe and RFC.

2. R vise AP's email template used for submitting the DOE OEAI? Report topre-populate the email with the correct DOE ERC and RFC addresses.

3. Modify AP's DOE R porting Procedure in Appendix 4-1 of the EmergencyOperations Manual Volume I to clearly state that copies of the DOE OE-4I?Report must be submitted to ER and RFC.

4. Comrnunicat to and ensure all personnel who may be required to submit aDOE OE-417 Report review the procedure changes de cribed in Task 2.


D.2 Provide the date by which full implementation of the Mitigation Plan will be, orhas been, completed with respect to the Alleged or Confirmed violationsidentified above. State whether the Mitigation Plan has been fully implemented,and/or whether the actions necessary to assure the entity has returned to fullcompliance have been completed.

The Mitigation Plan was fully implemented and completed on 07/18/2008.


Attachment A

RELIABILIT

D.3 Enter Key Milestone Activities (with due dates) that can be used to track andindicate progress towards timely and successful completion of this MitigationPlan.




Attachment A

RELIABILIT

Key Milestone Activity Proposed/Actual Completion Date*(shall not be more than 3 months anart)

I) Submit DOE OE-417 Report 1211112008 (Actual)for the 02/10/2008 Event toNERC and RFC2) Revise AP's email template 0412312008 (Actual)used for submitting the DOE OE-417 Report to pre-populate theemail with the correct DOE,NERC, and RFC addresses.3) Modify AP's DOE Reporting 06/1212008 (Actual)Procedure in Appendix 4-1 of theEmergency Operations ManualVolume I to clearly state thatcopies of the DOE OE-417 Reportmust be submitted to NERC andRFC.4) Communicate to and ensure all 0711812008 (Actual)personnel who may be required tosubmit a DOE DEAl? Reportreview the procedure changesdescribed in Task 2.

("') Note: Additional violations could be detenruned for not completing work associated with acceptedmilestones.


RE ABILIT

Key Milestone Activity ProposedlActual Completion Date*(shall not be more than 3 months apart)

1) Submit DOE OE-41 7 Report 12/11/2008 (Actual)for the 02/10/2008 Event toNERCandRFC2) Revise AP's email template 04/23/2008 (Actual)used for submitting the DOE OE-417 Report to pre-populate theemail with the correct DOE,NERC, and RFC addresses.3) Modify AP's DOE Reporting 06/1212008 (Actual)Procedme in Appendix 4- I of theEmergency Operations ManualVolume I to clearly tate thatcopies of the DOE OE-417 Reportmust be submitted to ERe andRFC.4) Communicate to and ensure all 07118/2008 (Actual)personnel who may be required tosubmit a DOE OE-417 Reportreview the procedure changesdescribed in Task 2.

(*) Note: Additional violations couLd be determined for not completing work associated with acceptedmilestones.


Attachment A

RELIABILIT

Section E: Interim and Future Reliability Risk

Abatement of Interim BPS Reliability Risk

E.1 While your organization is implementing this Mitigation Plan the reliability of theBulk Power System (BPS) may remain at higher risk or he otherwise negativelyimpacted until the plan is successfully completed. To the extent they are, or maybe, known or anticipated: (i) identify any such risks or impacts; and (ii) discussany actions that your organization is planning to take to mitigate this increasedrisk to the reliability of the BPS. Additional detailed information may beprovided as an attachment.

AP fully implemented and completed its Mitigation Plan on 7/18/08; therefore,AP does not believe any further actions are necessary. Prior to completing theMitigation Plan, AP completed Task I of the Key Milestone Activities describedin Part D.3 as soon as the problem was identified, ensuring RFC and ERewould be copied when the OE·417 report is submitted to DOE. Until Task I wascompleted, there was a two·month window following the event when there wasthe potential for a similar reporting error ifsimilar conditions existed. APbelieves the probability of not recognizing that the 50,000 customers were out ofservice for one hour during an event, which would involve an outage to AP'sOMS under similar circumstances as described in Part C.3 of this form, wasextremely low prior to the Mitigation Plan being completed.

Prevention of Future BPS Reliability Risk

E.2 Describe how successful completion of this Mitigation Plan by your organizationwill prevent or minimize the probability that the reliability of the BPS incursfurther risk of similar violations in the future. Additional detailed informationmay be provided as an attachment.

Implementing the Mitigation Plan will prevent similar occurrences fromreoccuning in two ways. First, by clearly listing NERC and RFC as recipients ofthe DEAI7 Report in AP's DOE Reporting Procedure, these entities will not beoverlooked when AP employees reference this procedure. Second, by "hard·coding" the email addresses for DOE, NERC, and RFC into the email template ofthe OE·417 Report, AP is ensuring that these recipients will receive all OE-417reports even if the procedures are not referenced.

As evidence that its Mitigation Plan is effective, AP successfully filed OEA17reports with DOE, ERe, and RFC for three reportable events that occurred afterthe February 10, 2008 event. In June 2008, September 2008 and February 2009,

V",,;on 2.0 - Released 7/11/08 Page7ofl2

ection E: Interim and Future Reliability Risk


E.l While our organization is implementing tbi itigation Plan the reliability of theBulk Po er ystern (BPS) may remain at higher ri k or be otherwise negativelyimpa ted until the plan is uccessfully compl ted. To th ext n they are or maybe known or anticipated: (i) identify an Dch ri k or impac . and (ii) discussan action that your organization i planning to talc to mitigate thi increasedri k to the r liabili of the BPS. Additional detailed infonnation may bepro .ded an attac t

P fully implemented and completed it i igarion Plan n Ii 10 ~ therefored not belie e an furtb r a ti n ar n ary. rior t completing the

i igati n Plan. AP co pleted Tas I f the ile t ne A tivitie describedin Part D. oon as the probl maId ntifi d. en uring RFC and 1ERC

uld be opied I; hen the OE41 r p rt i submitted t DO. ntil Tas 1 wasmpl ted. there as a o-month \\ 'ndo fi II in th ent hen there \1 as

th p tential for a similar reporting error if imilar condition exi ed. APlieve the probability ofnot recognizing hatlh 50000 cu tomers ere out of

i or ne hour during an e ent. hi h would in I an outage to AP'o under imiJar circumstance a de rib d in Part . ofthi fonn was

tremely low prior to the itigation Plan bing complet d.

Prevention of Future BPS Reliability Risk

E.2 cribe how successful completion of this Mitigation Plan by your organizationwill prevent or minimize the probability that the reliability of the BPS incursfurther ri k of similar violations in the futur. Additional detailed infonnationmay be provided as an attachment.

Implementing the Mitigation Plan ill pr ot imil r c urr nees £i'omr urring in two ways. First by clearly Ii ling ~ C and RFC as recipients ofthe OE-4l7 Report in AP's DO R portin Pr dur lh e entilie will not beoverl oked when AP mployee rcfcrenc thi procedure. econd. b "bard-odin . the mail addres e forDO, R. and R} int tb emaillemplate of

the 0 -417 Rep rt, AP i ensuring that th r ipi nt will recei e all OE-417rep rt ven if the procedures are not r fer n ed.

Ih

e ion 2.0 - Relea eel 7/11108

fujI fil d OE-41e" nt that curred after

_00 and February 2009.

Page 7 oflFor Public Release - March 31, 2010

Attachment A

RELIABILIT

AP experienced storms that resulted in customer outages that exceeded 50,000customers being interrupted for one hour or more. In addition, AP filed courtesydisturbance reports for two Bulk Power disturbances and security incidents.Although these events did not meet the disturbance reporting criteria, AP felt theevent was significant enough to report to NERC, RFC and DOE using thedisturbance reporting procedure. The execution of the disturbance reportingprocedures were successful for all courtesy reports issued since the February 10,2008 event.


R LIABIL T

AP experienced stonns that resulted in customer outages that exceeded 50 000customers being inteTIllpted for one hour or more. In addition AP filed courtesydisturbance reports for two Bulk Power disturbances and security incidents.Although these events did not meet the disturbance reporting criteria AP felt theevent was significant enough to report to ERe RFC and DOE using thedisturbance reporting procedure. The execution of the disturbance reportingprocedures were successful for all courtesy reports issued since the February 102008 event.


Attachment A

RELIABILIT

Section F: Authorization

An authorized individual must sign and date this Mitigation Plan Submittal Fonn. Bydoing so, this individual, on behalf of your organization:

a) Submits this Mitigation Plan for acceptance by ReliabilityFirst and approval byNERC, and

b) If applicable, certifies that this Mitigation Plan was completed on or before thedate provided as the 'Date of Completion of the Mitigation Plan' on this fonn,and

c) Acknowledges:

1. I am [Vice President, Transmission] of [Allegheny Power].

2. I am qualified to sign this Mitigation Plan on behalf of [Allegheny Power].

3. I have read and am familiar with the contents of this Mitigation Plan.

4. [Allegheny Power] agrees to comply with, this Mitigation Plan, includingthe timetable completion date, as accepted by ReliabilityFirst and

approved by ERe. ~

Authorized Individual Signature ~dc11"f..V1 k4Name (Print): James R. Haney

Title:

Date:

Vice President, Transmission

April 30, 2009

Section G: Regional Entity Contact

Please direct completed forms or any questions regarding completion of this formto the Re1iabilityFirst Compliance e-mail address [email protected] indicate the company name and reference the NERC Violation ID # (if

known) in the subject line of the e·mail. Additionally, any ReliabilityFirstCompliance Staff member is available for questions regarding the use of thisform. Please see the contact list posted on the ReliabilityFirsl Compliance webpage.


ection F: Authorization

An authorized individual must sign and date thi itigation Plan ubmittal Form. Bdoing 0 thi indi idual on behalfof your rganization:

a) ubmit thi itigation Plan for acceptance by ReliabilityFir. 1 and appro al byRC and

b) IT applicabl certifies that thi itigation Plan was compI ted on or before thedate provid d a the Date of ompl tion oftbe Mitigation Plan on this form,and

c) Acknowledges:

1. I am [Vice President, Tran mi ion] of [AlJegheny Power].

2. I am qualified to sign thi 'tigation Plan on behalf of [Allegheny Power].

3. I ba e read and am familiar with the contents ofthi itigation Plan.

4. [llegh ny Power] agree to comply wi~ this -tigation Plan includingtb tim table completion dat as accepted by ReHabilityFir. I and

appr ed by RC. ';7 ,/

nthomed low idnal Signature "---.f4c111.R1~am (print): Jam R. Haney

Title:

Date:

Vice Pre ident Transmission

April 30, 2009


Please direct completed fonn or any que tioDS regarding completion filii fmmto the ReliabilityFir. t Compliance e-mail addr mitigationplan@rfi t.arg.Please indicate th company Dame and r fi r nce the ERe iolation ill # (if

known) in the ubj t line of the e-mail Additionally any ReliabilityFir. t

Compliance taff member i available for qu tiOD regarding the u of thiform. Plea the contact list po ted on the ReliabilityFir: t ompliance webpage.

Version 2.0 - Relea ed 7111/08 Page 9 of 12For Public Release - March 31, 2010

Attachment A

RELIABILIT

Attachment A - Compliance Notices & Mitigation Plan Requirements

I. Section 6.2 of the CMEp l sets forth the infonnation that must be included in aMitigation Plan. The Mitigation Plan must include:

(1) The Registered Entity's point of contact for the Mitigation Plan, who shall be aperson (i) responsible for filing the Mitigation Plan, (ii) teclmicallyknowledgeable regarding the Mitigation Plan, and (iii) authorized and competentto respond 10 questions regarding the status of the Mitigation Plan.

(2) The Alleged or Confirmed Violation(s) of Reliability Standard(s) the MitigationPlan will correct.

(3) The cause of the Alleged or Confirmed Violation(s).

(4) The Registered Entity's action plan to correct the Alleged or ConfirmedViolation(s).

(5) The Registered Entity's action plan to prevent recurrence ofthe Alleged orConfirmed violation(s).

(6) The anticipated impacl of the Mitigation Plan on the bulk power systemreliability and an action plan to mitigate any increased risk to the reliability of thebulk power-system while the Mitigation Plan is being implemented.

(7) A timetable for completion of the Mitigation Plan including the completion daleby which the Mitigation Plan will be fully implemented and the Alleged orConfirmed Violation(s) corrected.

(8) Key implementation milestones no more than three (3) months apart forMitigation Plans with expected completion dates more than three (3) monthsfrom the date of submission. Additional violations could be determined for notcompleting work associated with accepted milestones.

(9) Any other information deemed necessary or appropriate.

(10) The Mitigation Plan shall be signed by an officer, employee, attorney or otherauthorized representative of the Registered Entity, which if applicable, shall bethe person thaI signed the Self-Certification or Self Reporting submittals.

II. This submittal fonn must be used to provide a required Mitigation Plan for reviewand acceptance by ReliabilityFirst and approval by NERC.

III. This Mitigation Plan is submitted to ReliabilityFirst and NERC as confidentialinformation in accordance with Section 1500 of the NERC Rules of Procedure.

IV. This Mitigation Plan Submittal Form may be used to address one or more relatedAlleged or Confirmed violations of one Reliability Standard. A separate

1 "Compliance Monitoring and Enforcement Program" ofthe ReliabilityFirst Corporation;" a copy of thecurrent version approved by the Federal Energy Regulatory Commission is posted on the ReliabilityFirstwebsite.


RELIABILIT


I. Section 6.2 of the CMEP' sets forth the infonnation that must be included in aMitigation Plan. The Mitigation Plan must include:

(1) The Registered Entity's point of contact for the Mitigation Plan, who shall be aperson (i) responsible for filing the Mitigation Plan, (ii) technicallyknowledgeable regarding the Mitigation Plan, and (iii) authorized and competentto respond to questions regarding the status of the Mitigation Plan.

(2) The Alleged or Confirmed Violation(s) of Reliability Standard(s) the MitigationPlan will correct.


(4) The Registered Entity's action plan to correct the Alleged or ConfirmedViolation(s).

(5) The Registered Entity's action plan to prevent recurrence of the Alleged orConfumed violation(s).

(6) The anticipated impact of the Mitigation Plan on the bulk power systemreliability and an action plan to mitigate any increased risk to the reliability of thebulk power-system while the Mitigation Plan is being implemented.

(7) A timetable for completion of the Mitigation Plan including the completion dateby which the Mitigation Plan will be fully implemented and the Alleged orConfirmed Violation(s) corrected.



(I0) The Mitigation Plan shall be signed by an officer, employee, attorney or otherauthorized representative of the Registered Entity, which if applicable, shall bethe person that signed the Self-Certification or Self Reporting submittals.




I "Compliance Monitoring and Enforcement Program" ofthe ReliabilityFirst CO/poration;" a copy of thecurrent version approved by the Federal Energy Regulatory Commission is posted on the ReliabilityFirstwebsite.

Version 2.0 - Released 7111/08 Page 10 of]2For Public Release - March 31, 2010

Attachment A

RELIABILIT

mitigation plan is required to address Alleged or Continned violations withrespect to each additional Reliability Standard, as applicable.

V. If the Mitigation Plan is accepted by ReliabilityFirst and approved by NERC, acopy of this Mitigation Plan will be provided to the Federal Energy RegulatoryCommission in accordance with applicable Commission rules, regulations andorders.

VI. ReliabilityFirst or NERC may reject Mitigation Plans that they detennine to beincomplete or inadequate.

VII. Remedial action directives also may be issued as necessary to ensure reliability ofthe BPS.

Version 2.0 - Released 7/11/08 Page II of 12

RELIABILIT

mitigation plan is required to address Alleged or Confinned violations withrespect to each additional Reliability Standard, as applicable.




Version 2.0 - Released 7/11/08 Page 11 of12For Public Release - March 31, 2010

Attachment A

RELlABILlT

DOCUMENT CONTROL

Title:

Issue:

Date:

Distribution:

Filename:

Control:


Version 2.0

11 July 2008

Public

ReliabilityFirst Mitigation Plan Submittal Form - Ver 2.DOC

Reissue as complete document only

DOCUMENT APPROVAL

Prepared By Approved By Approval Signature Date

Robert K. Wargo Raymond J. Palmieri

Senior Consultant Vice President and~r/~ 112108

Compliance Director

Compliance

DOCUMENT CHANGEfREVISION mSTORY

Version Prepared By Summary of Changes Date

1.0 Robert K. WargoOriginal Issue - Replaces "Proposed

1/2/08Mitigation Plan" Form

Revised email address [email protected] to

2.0 Tony Purgar [email protected] 7/11/08


DOCUME

Title:

Issue:

Date:

CO TROL

'tigation Plan ubmittaJ Form

ersioD 2.0

II July 2008

Distribution: Public

Filename: ReliabilityFirst Mitigation Plan Submittal Fonn - Ver 2.DOC

Control: Reissue as complete document only

DOCUMENT APPROVAL

Prepared B Approved B pproval Signature Date


Senior Con ultant ice President and~rJ'~ ]/ 08

Complianc Director

Compliance

DOCUME GEIRE SIO mSTORY

Version Prepared B Summary of Change Date

1.0 Robert K. WargoOriginal I su - Replaces "Proposed

1/2/08Mitigation Plan Form

Revi ed email address [email protected] to


Version 2.0 - R lea ed 7/1 1/08 Page 12 of 12For Public Release - March 31, 2010

Attachment B

Certification of Mitigation Plan Completion

EOP-004-1, R3 Signed June 23, 2009

Attachment B

RELIABILIT


Submittal of a Certification of Mitigation Plan Completion shall include data or information sufficient forReliabilityFirsl Corporation to verify completion of the Mitigation Plan. ReliabilityFirsl Corporationmay request additional data or information and conduct follow-up assessments, on-site or other SpotChecking, or Compliance Audits as it deems necessary to verify that all required actions in the MitigationPlan have been completed and the Registered Entity is in compliance with the subject ReliabilityStandard. (CMEP Section 6.6)

Registered Entity Name: Allegheny Power

NERC Registry ID:NCR02602

Date of Submittal of Certification:06116/09

NERC Violation ID No(s):RFC200800076

Reliability Standard and the Reqnirement(s) of which a violation was mitigated:EOP-004-1

Date Mitigation Plan was scheduled to be completed per accepted Mitigation Plan:07/18/08

Date Mitigation Plan was actually completed: 12111/08*

Additional Comments (or List of Documents Attached):See attached document "Allegheny PowerCompletion Record of Mitigation for RFC2008000076". On April 30, 2009, the original Mitigation Planwas retracted and resubmitted per RFC Staff.. The revised Mitigation Plan added a milestone whosecompletion date was outside of the original scheduled completion date. This was an oversight, thescheduled completion date in the revised Mitigation Plan should have been changed to 12111/08 to agreewith the last milestone.

1 certify that the Mitigation Plan for the above named violation has been completed on the date shownabove and that all submitted information is complete and correct to the best of my knowledge.

Name:James R. Haney

Title:Vice President, Transmission

Email:[email protected]

Phone:(724) 838-6331

Page I of3

RELIABILIT


Submittal of a Certification of Mitigation Plan Completion shall include data or infonnation sufficient forReliabilityFirst Corporation to erify completion of the Mitigation Plan. ReliabilityFir I Corporationmay request additional data or infonnation and conduct follow-up assessments on-site or other SpotChecking or Compliance Audits as it deems necessary to verify that all required actions in the MitigationPlan have been completed and the Regi tered Entity is in compliance with the subject ReliabilityStandard. (CMEP Section 6.6)



Date of Submittal of Certification:06/16/09

NERC Violation ID No(s):RFC200800076

Reliability Standard and the Requirement(s) of which a violation was mitigated:EOP-004-1

Date Mitigation Plan was scheduled to be completed per accepted Mitigation Plan:07/18/08

Date Mitigation Plan was actually completed: 12/11108*

Additional Comments (or List of Documents Attached):See attached document "Allegheny PowerCompletion Record of Mitigation for RFC2008000076". On April 30, 2009, the original Mitigation Planwas retracted and resubmitted per RFC Staff.. The revised Mitigation Plan added a milestone whosecompletion date was outside of the original scheduled completion date. This was an oversight, thescheduled completion date in the revised Mitigation Plan should have been changed to 12111/08 to agreewith the la t milestone.

I certify that the Mitigation Plan for the abo e named violation has been completed on the date shownabove and that all submitted information i complete and correct to the best of my knowledge.

Name:James R. Haney



Phone:(724) 838-6331

Page 1 of3

Attachment B

RELIABILIT

Please direct completed forms or any questions regarding completion of this fonn to the

ReliabilityFirst Compliance e-mail address mitigationplan(dirfirst.org.

Please indicate the company name and reference the NERC Violation ill # (if known) in the

subject line of the e-mail. Additionally, any ReliabilityFir.l't Compliance Staff member is

available for questions regarding the use of this form. Please see the contact list posted on the

ReliabilityFirsl Compliance web page.

Page 2 of3

RELIABILIT

AuthorizedSign~~~

Please direct completed forms or any questions regarding completion of this form to theReliabilityFirst Compliance e-mail address mitigationplan(dl,rfirst.org.

Please indicate the company name and reference the NERC Violation ill # (ifknown) in thesubject line of the e-mail. Additionally, any ReIiabilityFirst Compliance Staff member isavailable for questions regarding the use of this fonn. Please see the contact list posted on theReIiabilityFirst Compliance web page.

Page 2 of3

Attachment B

RELIABILIT

DOCUMENT CONTROL

Title:

Issue:

Date:

Distribution:

Filename:

Control:

Certification ofMitigation Plan Completion

Version I

5 January 2008

Public

Certification of a Completed Mitigation Plan_Verl.doc


DOCUMENT APPROVAL



Manager of Vice President and

~l~ 1/5/2009Compliance Director

Enforcement Compliance

DOCUMENT CHANGE/REVISION HISTORY


1.0 Robert K. Wargo Original Issue 1/5/2009

Page 3 of3

RELIABILIT

DOCUMENT CONTROL

Title:

Issue:

Date:

Distribution:

Filename:

Control:

Ce11ification of Mitigation Plan Completion

Version 1

5 January 2008

Public

Certification of a Completed Mitigation Plan_VerI.doc


DOCUMENT APPROVAL




~rJ'~ 1/5/2009Compliance Director

Enforcement Compliance




Page 3 of3

Attachment C

Summary and Review of Mitigation Plan

Completion

EOP-004-1, R3 Dated July 6, 2009

July 6, 2009

Summary and Review of Evidence of Mitigation Plan Completion

NERC Violation ID #: RFC200800076 NERC Plan ID: MIT-08-1673 Registered Entity; Allegheny Power NERC Registry ID: NCR02602 Standard: EOP-004-1 Requirement: 3 Status: Complete

During the pre-audit review of material submitted by Allegheny Power (Allegheny) for a compliance audit conducted from September 30 - October 2, 2008, it was identified that Allegheny failed to provide a written report to the Regional Reliability Organization and NERC as required for a reportable incident that occurred on February 10, 2008. Allegheny Power submitted a Proposed Mitigation Plan to ReliabilityFirst on April 30, 2009, whereby stating Allegheny Power would complete all mitigating actions on or about July 18, 2009. This Mitigation Plan, designated MIT-08-1673, was accepted by ReliabilityFirst on May 8, 2009 and approved by NERC on May 11, 2008. Allegheny Power subsequently stated within its Certification Statement that it had added a milestone to the Mitigation Plan “whose completion date was outside of the original scheduled completion date” and that “the scheduled completion date in the revised Mitigation Plan should have been changed to December 11, 2008 to agree with the last milestone.” Review Process: Allegheny Power submitted to ReliabilityFirst a certification of completion of the Mitigation Plan, dated May 16, 2009 and signed on May 23, 2009, which stated that the Mitigation Plan was completed on December 11, 2008. ReliabilityFirst requested and received evidence of completion for actions taken by Allegheny Power as specified in the Mitigation Plan. ReliabilityFirst performed an in-depth review of the information provided to verify that all actions specified in the Mitigation Plan were successfully completed. EOP-004-1, Requirement 3 states: R3. A Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator or Load Serving Entity experiencing a reportable incident shall provide a preliminary written report to its Regional Reliability Organization and NERC.

R3.1. The affected Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator or Load Serving Entity shall submit within 24 hours of the disturbance or unusual occurrence either a copy of the report submitted to DOE, or, if no DOE report is required, a

Attachment C

Summary and Review of Mitigation Plan Completion Allegheny Power July 6, 2009 Page 2 of 3

copy of the NERC Interconnection Reliability Operating Limit and Preliminary Disturbance Report form. Events that are not identified until some time after they occur shall be reported within 24 hours of being recognized. R3.2. Applicable reporting forms are provided in Attachments 1-EOP-004 and 2- EOP-004. R3.3. Under certain adverse conditions, e.g., severe weather, it may not be possible to assess the damage caused by a disturbance and issue a written Interconnection Reliability Operating Limit and Preliminary Disturbance Report within 24 hours. In such cases, the affected Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator, or Load Serving Entity shall promptly notify its Regional Reliability Organization(s) and NERC, and verbally provide as much information as is available at that time. The affected Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator, or Load Serving Entity shall then provide timely, periodic verbal updates until adequate information is available to issue a written Preliminary Disturbance Report.

R3.4. If, in the judgment of the Regional Reliability Organization, after consultation with the Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator, or Load Serving Entity in which a disturbance occurred, a final report is required, the affected Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator, or Load Serving Entity shall prepare this report within 60 days. As a minimum, the final report shall have a discussion of the events and its cause, the conclusions reached, and recommendations to prevent recurrence of this type of event. The report shall be subject to Regional Reliability Organization approval.

Evidence Submitted: R3:

• Allegheny’s revised U.S. Department of Energy form OE-417 for the reportable event that occurred on February 10, 2008. The revised form was submitted to the DOE, NERC and ReliabilityFirst on December 11, 2008. The original form was not submitted to NERC or ReliabilityFirst as required. The submittal of the form provides NERC and ReliabilityFirst with a record of the reportable event.

• Allegheny’s revised email template to be used for the submittal of DOE OE-417 reports. The template includes pre-populated email addresses for NERC and ReliabilityFirst that will be used for any future DOE reportable events. The use

Attachment C


of the revised email template will help ensure that events that are reportable to the DOE will be reported to NERC and ReliabilityFirst at the same time.

• Allegheny’s revised DOE Reporting Procedure. Allegheny’s Emergency Operations Manual Volume 1, Appendix 4-1 was revised on 06/12/2008 to add additional clarification and a note that states: “When reporting to DOE, OE-417 report must be filed with NERC, RFC, and copy PJM.” The revisions to the manual make it clear that when reports are submitted to the DOE, they must also be submitted to NERC and ReliabilityFirst.

• Sign off sheets for personnel who may be required to submit DOE OE-417 reports. The sign off sheets include signatures of relevant personnel acknowledging that they have reviewed procedure changes associated with DOE reporting. Relevant personnel were required to review the material prior to assuming a shift position after 07/18/2008. This provides evidence that appropriate personnel are cognizant of procedure changes made to help ensure that when reports are required to be submitted to the DOE, that they are also sent to NERC and ReliabilityFirst.

Review Results: ReliabilityFirst Corporation reviewed the evidence that Allegheny Power submitted in support of its Certification of Completion. On July 6, 2009, ReliabilityFirst verified that the Mitigation Plan was completed in accordance with its terms and has therefore deemed Allegheny Power compliant to the aforementioned NERC Reliability Standard. Respectfully Submitted,

Robert K. Wargo Manager of Compliance Enforcement ReliabilityFirst Corporation

Attachment C

Attachment D

Mitigation Plan – FAC-003-1, R1 Dated April 30, 2009

Mit Plan ID #: MIT-08-1674

RFC200800083

Attachment D

RELIABILIT



Section A: Compliance Notices & Mitigation Plan Reqnirements

A.I Notices and requirements applicable to Mitigation Plans and this SubmittalForm are set forth in "Attachment A - Compliance Notices & Mitigation PlanRequirements."

A.2 This fonn must be used to submit required Mitigation Plans for review andacceptance by ReliabilityFirst and approval by NERC.

A.3 [2] I have reviewed Attachment A and understand that this Mitigation PlanSubmittal Form will not be accepted unless this box is checked.


8.1 Identify your organization.

Company Name:

Company Address:


Allegheny Power

800 Cabin Hill Drive,Greensburg, PA 1560 I

NCR02602


Name:

Title:

Email:

Phone:


William J. Smith

Consulting Engineer

wsmith [email protected]

(724) 838-6552

Page 1 of 10




Al otices and requirements applicable to Mitigation Plans and this SubmittalForm are set forth in "Attachment A - Compliance Notices & Mitigation PlanRequirements."

A2 This form must be used to submit required Mitigation Plans for review andacceptance by ReliabilityFirst and approval by NERC.

A3 ~ I have reviewed Attachment A and understand that this Mitigation PlanSubmittal Form will not be accepted unless this box is checked.


B.1 Identify your organization.

Company Name:

Company Address:

NERC Compliance Registry ill:

Allegheny Power

800 Cabin Hill Drive,Greensburg, PA 15601

NCR02602

B.2 Identify the individual in your organization who will be the Entity Contactregarding this Mitigation Plan.

Name:

Title:

Email:

Phone:


William J. Smith

Consulting Engineer

wsmith I @alleghenypower.com

(724) 838-6552

Page I of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT

Section C: Identification of Alleged or Confirmed Violation(s)Associated with this Mitigation Plan

C.I This Mitigation Plan is associated with the following Alleged or Confinnedviolation(s} of the reliability standard listed below.

NERC Reliability Requirement Violation Alleged or Method ofViolation lD Standard umber Risk Factor Confirmed Detection (e.g..

# Violation Date(-' Audit, Self-repon,Investigation)

RFC200800083 FAC-003-1 1 Hi.h 09/26/2008'" Compliance Audit

(.) Note: The Alleged or Confirmed Vlo!allon Date shall be expressly specified by the Registered Entity.and subjecllo modification by ReliabilityFirst, as: (i) the date that the Alleged or Confirmed violation hasbeen deemed to have occurred on by ReliabililyFirsl. Questions regarding the date to use should bedirected to the RcliabilityFirst contact identified in Section G oflhis fonn.

C.2 Identify the cause of the Alleged or Confirmed violation(s) identified above.Additional detailed infonnation may be provided as an attachment.

Allegheny Power (AP) emphatically believes the alleged violations do not haveany adverse impact on the reliability of the Bulk Power System. The primarycause of the alleged violations appears to be an unclear explanation, within theTVMP (Transmission Vegetation Management Program), of how to adjust IEEEStandard 516-2003 Minimum Approach Distance values for changing altitudesand how to apply Minimum Approach Distances under all operating conditions.AP is absolutely convinced that a reworded TVMP would not have had anyimpact on how its TVMP was actually implemented prior to the ComplianceAudit.

ote: If a formal root cause analysis evaluation was performed, submit a copyof the summary report.

Ven;ion 2.0 - Released 7/11/08 Page 2 of 10

RESection dentification of Alleged or Confirmed iolation(s)

Associated with this Mitigation Plan

.1 Thi Mitigation Plan is associated with th folio ing 11 ged or Confirmedvi lation( of the reliability standard listed belo .

NERC Reliability Requirement Violation Alleged or Method ofi lation ID tandard ber Ri k Factor onfinned Detection (e.g.,

iolation Datee·, Audi elf-reportInvestigation)

RFC20080008J FAC-003-1 1 lligb 09/26/2008\1' Compliance Audit

(*) Note: The Alleged or Confirmed Violation Date ball be expr Iy specified by me Registered Entityand ubject to modification by ReliabiljtyFi~ t as: (i) me date that the All ged or onfirmed violation habeen d emed to have occurred 00 by ReliabilityFirst. Que lions regarding the date to u 'ehould bedirect d to the ReliabilityFir t contact identified in ection G of thi form.

.2 Identify the cause of the Alleged or Confirmed violation( ) identified above.Additional detailed infonnation may be provid d a an attachment.

Allegheny Power (AP) emphatically believe the alleg d violations do not haveany adverse impact on the reliability of the Bulk P weI' ystem. The primarycaus of the alleged violations appears to be an unci ar explanation, within the

VMP (Transmission Vegetation Manag m nt Program), fhow to adjust rEEEtandard 516-2003 Minimum Approach Dj tane valu for changing altitude

and bow to apply Minimum Approach Distance under all operating conditions.P i ab olut ly convinced that a reworded T P w uld not ha e had any

impa t on bow it T P was actually impl ment d prior to the Complianceudit.

ote: If a formal root cause analy is e aJuation as perfonned ubmit a copyf th ummary report.

TSI n 2.0 - Released 7111/08 Page 2 of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT

C.3 Provide any additional relevant infonnation regarding the Alleged or Confinnedviolations associated with this Mitigation Plan. Additional detailed infonnationmay be provided as an attachment.

As stated above in Part C.2, AP's position is that the alleged violations did notjeopardize, in any way, the reliability of the Bulk Power System. Prior to theCompliance Audit, AP had been actively utilizing the practice of considering alloperating conditions (maximum sag, blow-out, etc.) when planning work anddirecting vegetation management crew activities. Therefore, AP feels stronglythat modified language in the TVMP further clarifying that clearances betweenvegetation and conductors must be maintained under all rated electrical operatingconditions would not have affected how AP's TVMP was implemented.Regarding altitude correction factors, AP has relatively few spans of200 kV andabove line located at altitudes above 3000 feet, with the highest altitude beingabout 3500 feet. Applying the appropriate altitude correction factors to spansbetween 3000 and 4000 feet increases the Minimum Approach Distance by 3.5inches for 500 kV lines and by 1.2 inches for 230 kV lines, and these increaseddistances can arguably be reduced by at least half if the correction factor isinterpolated for the spans in AP's transmission system. These few inches ofincreased distance are negligible and impractical to implement when consideringthe clearances AP currently maintains under all operating conditions and the IEEEStandard 516-203. Further clarifying AP's statement regarding altitude correctionin its TVMP would not have affected how AP's TVMP was implemented.Although AP will vigorously defend its position that these alleged violationsabsolutely do not have any negative affect on the reliability of the Bulk PowerSystem, AP immediately contacted its Transmission Foresters after theCompliance Audit to I) re-emphasize and reinforce its practice to consider alloperating conditions when directing vegetation management crew activities, and2) distribute the needed calculations and the methods to be used for increasingMinimum Approach Distance at altitudes over 3,000 feet for their use inidentifying needed work and establishing clearances the crews must achieve.



D.l Identify and describe the action plan, including specific tasks and actions thatyour organization is proposing to undertake, or which it undertook if thisMitigation Plan has been completed, to correct the Alleged or Confinned


RELIABI I

C,3 Provide any additional relevant infonnation regarding the Alleged or Confirmedviolations associated with this Mitigation Plan. Additional detailed informationmay be provided as an attachment.

As stated above in Part C.2 AP's position is that the alleged violations did notjeopardize, in any way, the reuability of the Bulk Power System, Prior to theCompliance Audit AP had been actively utilizing the practice of considering alloperating conditions (maximwn sag, blow-out etc.) when planning work anddirecting vegetation management crew activities. Therefore AP feels stronglythat modified language in the TVMP further clarifying that clearances betweenvegetation and conductors must be maintained under all rated electrical operatingconditions would not have affected how AP's TVMP was implemented.Regarding altitude correction factors, AP has relatively few spans of200 kV andabove line located at altitudes above 3000 feet with the highest altitude beingabout 3500 feet. Applying the appropriate altitude correction factors to spansbetween 3000 and 4000 feet increases the Minimum Approach Distance by 3.5inches for 500 kV lines and by 1.2 inches for 230 kV lines and these increaseddistance can arguably be reduced by at least half if the correction factor isinterpolated for the spans in AP's transmission system. These few inches ofincreased distanc are negligible and impractical to implement when consideringthe clearances AP currently maintains under all operating conditions and the IEEEStandard 516-203. Further clarifying AP's statement regarding altitude correctionin its TVMP would not have affected ho AP s TVMP was implemented.Although AP will vigorously defend its position that these alleged violationsabsolutely do not have any negative affect on the reliability of the Bulk PowerSystem, AP immediately contacted its Transmission Foresters after theCompliance Audit to 1) re-emphasize and reinforce its practice to consider alloperating conditions when directing vegetation management crew acti vities, and2) distribute the needed calculations and the methods to be used for increasingMinimum Approach Distance at altitudes over 3,000 feet for their use inidentifying needed work and establishing clearances the crews mu t achieve.



D.l Identify and describe the action plan, including specific tasks and actions thatyour organization is proposing to undertake, or which it undertook if thisMitigation Plan has been completed, to correct the Alleged or Confirmed

Version 2,0 - Released 7111/08 Page 3 of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT

violations identified above in Part C.l of this form. Additional detailedinformation may be provided as an attachment.

AP does not believe the alleged violations identified during the ComplianceAudit will negatively affect the reliability of the Bulk Power System.Nonetheless, AP will complete the following tasks to further clarify itsTVMP.

1) AP will revise its TVMP, which is contained in its Construction,Operations and Maintenance (COM) Manual Section 09·09, to include a tablethat reflects the Minimum Approach Distances at altitudes between 3001 and4000 feet above sea level (The highest elevation of AP facilities does notexceed 4000 feet above sea level).

2) AP wiJI revise its TVMP to explicitly state that Minimum ApproachDistances mllst take into account conductor movement caused by operatingconditions.

3) AP will provide training on the TVMP revisions to all affected APemployees and contractors involved in the design and implementation of theTVMP.


0.2 Provide the date by which full implementation of the Mitigation Plan will be, orhas been, completed with respect to the Alleged or Confinned violationsidentified above. State whether the Mitigation Plan has been fully implemented,and/or whether the actions necessary to assure the entity has returned to fullcompliance have been completed.

May 1,2009


Key Milestone Activity Proposed/Actual Completion Date*(~Il not be ore than 3 months aoart)

Revise the TVMP to include a table that March 26, 2009 (Actual)reflects the Minimum Approach Distancesat altitudes between 300 I and 4000 feet


ELIAS

violation id ntified abo e in Part . I of this form. Additional detailedinforrnati n rna be pro ided as an attachment.

P den t b liee the all g d lolation identified during h mplianudit ill n gati el a e t th reLiabili of the Bulk P wer tern.on th 1 • AP \: ill compl t th f; Howing tas to Furth r clarif it

TV P.

l) P will re ise its TYMP, which i ontained in it n tructi nOperations and Maintenance ( OM) Manual Section 09-09. to include a tablethat reflect the Minimum pproach Distances at altitud between 3001 and4000 feet above ea level (The highest el ation of AP facilities doe note c ed 4000 feet above ea level).

2 P will r 's its T P t pli itly tate that Minimum ApproachDi tane mu t take into a count oductor mo ement au ed by peratingconditi n .

) AP '11 provide training on th T reVISIons to IImpl y and contrac or in I\' d in the de ign and im

P.

itigation Plan Timeline and Milestone

ted APm ntation of the

0.2 Provide the date by which full implementation ofthe Mitigati n Plan will be, orha been completed with respect to the Alleged or Confirmed violationsidentifi d above. State whether th Mitigation Plan has been fully implemented,and/or whether the actions neces ary to assure the entity ha r turn d to fullcompljane ha e been completed.

Ma J,2009

D. Enter K y il tone Acti itie (with due dates) that can b used to track andindicat progr toward timel and uc sful compl lion of this MitigationPlan.

P to include a table that

Version 2.0 - R I a ed 7/11108

Proposed! ctnaJ ompletion Date*(shall not be ore than 3 months a art)

March 26 2009 (Actflal)

Page 4 of 10For Public Release - March 31, 2010

Attachment D

RELlABILIT

above sea level and to explicitly state thatminimum approach distances must takeinto account conductor movement causedby operating conditions.

Provide training on revisions to TVMP to April 7,2009 (Actual)all affected emnlovees and contractors.

(.) Note: Additional violations could be determined for not completing work associated with acceptedmilestones.

Section E: Interim and Future Reliability Risk


E.l While your organization is implementing this Mitigation Plan the reliability ofthe Bulk Power System (BPS) may remain at higher risk or be otherwisenegatively impacted until the plan is successfully completed. To the extent theyare, or may be, known or anticipated: (i) identify any such risks or impacts; and(ii) discuss any actions that your organization is planning to take to mitigate thisincreased risk to the reliability of the BPS. Additional detailed informationmay be provided as an attachment.

For the reasons stated in Part C.3, AP emphatically believes the reliability of theBulk Power System was not at risk or negatively impacted, either before or afterthe Compliance Audit, as a result of the alleged violations. Also, as stated inPart C.3, AP immediately contacted its Transmission Foresters after theCompliance Audit to re.emphasize and reinforce its practice to consider alloperating conditions when directing Vegetation Management crew activitiesand distributed the needed calculations and the methods to be used forincreasing Minimum Approach Distance at altitudes over 3,000 feet to identifyneeded work and establish clearances the crews must achieve.

Prevention of Future BPS Reliabilitv Risk

E.2 Describe how successful completion of this Mitigation Plan by yourorganization will prevent or minimize the probability iliat the reliability of theBPS incurs further risk of similar violations in the future. Additional detailed

Version 2.0 - Released 7IJ 1/08 Page 5 of 10

RE IABILI

a a Ie I and to explicit] state thatminimum approach distance must takeinto aunt ndu tor rna ement causedb a rating c nditi ns.

(.) ote: dditional iolations couId be determined for nOI compl ling \ or ociated witb acceptedmil I ne .

ection : Interim and Future Reliabili

batement of Interim DP Reliability Ri k

E.l Whil your organization is implem nting thi Mitigation Plan the reliability ofth Bulk Power System (BPS) rna remain at higher risk or be otherwisenegatively impacted until the plan is succ fully campI ted. To the extent theyare or may be known or anticipated: (i) identify any uch ri k or impacts; and(ii) discuss any actions that your organizati n is planning to take to mitigate thisincreased risk to the reliability of the BP . Additi nal detailed informationmay be provided as an attachment.

For the reasons stated in Part C.3 AP emphati ally b lieves the reliability oftheBulk P weI' ystem wa not at risk or negatively impact d, either before or afterth mpliance Audit as a result of the alleged vi lations. Also as stated inPart .3, AP immediately contacted it ran mi ion F re tel' after the

ompliance Audit to re-emphasiz and rein for it practice to consider allp rating condition when directing g tati n Management cre activities

and di tributed the needed cal ulati nand th m th d to be used forincr a ing inimum Approach Oi tan e at altitude 0 er 3,000 ~ t to identifyneeded w rk and establish clearance th re\i muta hi

Pre

E.2 De rib how succes fu] campi tion ofthi itigati n Plan by yourorganization will pre ent or minirniz the pr bability that the reliability of theBP in u further risk of imilar iolations in the future. Additional detailed

n 2.0 - R lea ed 7/11/08 Page 5 of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT

infonnation may be provided as an attachment.

AP does not believe the reliability of the BPS was at risk due to the allegedviolations. However, AP is committed to and will proceed with completing theMitigation Plan on schedule.


infonnation may be provided as an attachment.

AP does not believe the reliability of the BPS was at risk due to the allegedviolations. However, AP is committed to and will proceed with completing theMitigation Plan on schedule.


Attachment D

RELIABILIT

Section F: Authorization

An authorized individual must sign and date this Mitigation Plan Submittal Fonn. Bydoing so. this individual. on behalf of your organization:

a) Submits this Mitigation Plan for acceptance by ReliabilityFirst and approval byERC, and

b) If applicable. certifies that this Mitigation Plan was completed on or before thedate provided as the 'Date of Completion of the Mitigation Plan' on this fonn,and

c) Acknowledges:

1. I am [Vice President. Transmission] of [Allegheny Power].

2. I am qualified to sign this Mitigation Plan on behalfof[Allegheny Power].

3. I have read and am familiar with the contents of this Mitigation Plan.

4. [Allegheny Power] agrees to comply with, this Mitigation Plan, includingthe timetable completion date, as accepted by ReliabilityFirst andapproved by NERC.

Authorized Individual Signatur~~~Name (print): James R. Haney

Title:

Date:

Vice President. Transmission

March 31, 2009


Please direct completed fonns or any questions regarding completion of this fonnto the ReliabilityFirst Compliance e-mail address [email protected] indicate the company name and reference the ERC Violation ID # (if

known) in the subject line of the e-mail. Additionally, any ReliabilityFirstCompliance Staff member is available for questions regarding the use of thisfonn. Please see the contact list posted on the ReliabilityFirst Compliance webpage.


REL ABILI

Section F: uthorization

An authorized individual must sign and dat thi ·tigation Plan ubmittal Form. Bydoing 0 thi individual on behalf of your organization:

a) Submit thi itigation Plan for ac eptanee by ReliabilityFir: t and approval byR and

b) If applicable certifies that this Mitigation Plan was complet d on or before thedate provided as the Date of ompletion of the Mitigation Plan on this formand

c) Acknowledges:

1. I am [Vice President, Transmis ion] of [Allegheny Pow r].

2. I am qualified to sign thi Mitigation Plan on behalf of [Allegheny Power].

3. I hav r ad and am familiar ith th conten ofthi Mitigation Plan.

4. [All gh oy Power] age to mpl with thi ·t.igation Plan, includingth timetable completion dat as a eepted by ReliabilityFirst and

appro ed by Re. - / Lnthorized Individual ignatuc~~C)-I;y,7

arne (Print): lame R. Haney

Title:

Date:

Vice President, Transmission

March 31, 2009

Section G: Reg'onal Entity Contact

Please dire t compl ted forms or any que ti n regarding completion of this formto the Reliabilit Fir t ompliance e-mail addr mitigationplan@rfi Lorg.Please indicat the company Dam and r fi r nee th C iolati n ill (if

known) in the ubj ct line of the e-mail. dditionalJy an ReliabilityFir LCompliance taff memb r is available OT qu ions regarding the u e of th.iform. Please tb ontact list posted on th ReliabilityFir: 1 ompliance webpage.

Version 2.0 - Relea ed 7111/08 Page 7 of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT


L Section 6.2 of the CMEp 1 sets forth the information that must be included in aMitigation Plan. The Mitigation Plan must include:

(I) The Registered Entity's point of contact for the Mitigation Plan, who shaH be aperson (i) responsible for filing the Mitigation Plan, (ii) technicallyknowledgeable regarding the Mitigation Plan, and (iii) authorized and competentto respond to questions regarding the status of the Mitigation Plan.

(2) The Alleged or Confinned Violation(s) of Reliability Standard(s) the MitigationPlan will correct.

(3) The cause of the Alleged or Confinued Violation(s).

(4) The Registered Entity's action plan to correct the Alleged or ConfinnedViolation(s).

(5) The Registered Entity's action plan to prevent recurrence of the Alleged orContinued violation(s).


(7) A timetable for completion of the Mitigation Plan including the completion dateby which the Mitigation Plan will be fully implemented and the Alleged orContinued Violation(s) corrected.

(8) Key implementation milestones no more than three (3) months apart forMitigation Plans with expected completion dates more than three (3) monthsfrom the date of submission. Additional violations could be detennined for notcompleting work associated with accepted milestones.

(9) Any other infonnation deemed necessary or appropriate.

(10) The Mitigation Plan shall be signed by an officer, employee, attorney or otherauthorized representative of the Registered Entity, which if applicable, shall bethe person that signed the Self-Certification or Self Reporting submittals.

II. This submittal form must be used to provide a required Mitigation Plan for reviewand acceptance by ReliabilityFirst and approval by NERC.



I "Compliance Moniloring and En/orcemenl Program" o/the ReliabilityFirst Corporation;" a copy ofthecurrent version approved by the Federal Energy Regulatory Commission is posted on the ReliabilityFirstwebsite.

Version 2.0 - Released 7111108 Page 8 of I0

RE IABIL


1. Section 6.2 of the CMEP I sets forth the information that must be included in aMitigation Plan. The Mitigation Plan must include:

(1) The Registered Entity's point of contact for the Mitigation Plan, who shall be aperson (i) responsible for filing the Mitigation Plan, (ii) technicallyknowledgeable regarding the Mitigation Plan, and (iii) authorized and competentto respond to questions regarding the status of the Mitigation Plan.

(2) The Alleged or Confumed Violation(s) of Reliability Standard(s) the MitigationPlan will correct.


(4) The Registered Entity's action plan to correct the Alleged or ConfitmedViolation(s).

(5) The Registered Entity's action plan to prevent recurrence of the Alleged orConfirmed violation(s).


(7) A timetable for completion of tbe Mitigation Plan including the completion dateby which the Mitigation Plan will be fully implemented and the Alleged orConfumed Violation(s) corrected.



(10) The Mitigation Plan shall be signed by an officer, employee, attorney or otherauthorized representative of the Registered Entity, which if applicable, shall bethe person that signed the Self-Certification or Self Reporting submittals.


III. This Mitigation Plan is submitted to ReliabilityFirst and NERC as confidentialinformation in accordance with Section 1500 oftbe NERC Rules of Procedure.


I "Compliance Monitoring and Enforcement Program" ofthe ReliabilityFirsl COIporation;" a copy of thecurrent version approved by the Federal Energy Regulatory Commission is posted on the ReliabilityFirstweb ite.

Version 2.0 - Released 7111108 Page 8 of 10For Public Release - March 31, 2010

Attachment D

RELIABILIT

mitigation plan is required to address Alleged or Confinned violations withrespect to each additional Reliability Standard, as applicable.




Version 2.0 - Released 7/11108 Page90flO

RELIABILIT

mitigation plan is required to address Alleged or Confirmed violations withrespect to each additional Reliability Standard, as applicable.


VI. ReliabilityFirst or NERC may reject Mitigation Plans that they determine to beincomplete or inadequate.



Attachment D

RELIABILIT

DOCUMENT CONTROL

Title:

Issue:

Date:

Distribution:

Filename:

Control:


Version 2.0

II July 2008

Public

ReliabilityFirst Mitigation Plan Submittal Form - Ver 2.DOC


DOCUMENT APPROVAL



Senior Consultant Vice President and~r/~ 1/2/08

Compliance Director

Compliance




112108Mitigation Plan" Form

Revised email address fromcompliance@rfirsLorg to

2.0 Tony Purgar miti gat [email protected] 7/11/08

Version 2.0 ~ Released 7111/08 Page 10 of 10

RELIABILIT

DOCUMENT CONTROL

Title: Mitigation Plan Submittal Form

Issue: Version 2.0

Date: 11 July 2008

Distribution: Public

Filename: ReliabilityFirst Mitigation Plan Submittal Form - Vel' 2.DOC

Control: Reissue as complete document only

DOCUMENT APPROVAL



Senior Consultant Vice President and~cl~ 1/2/08

Compliance Director

Compliance

DOCUMENT CHANGEIREVISION mSTORY



1/2/08Mitigation Plan" Form

Revised email address [email protected] to



Attachment E


FAC-003-1, R1 Signed June 23, 2009

Attachment E

RELIABILIT


Submittal of a Certification of Mitigation Plan Completion shall include data or information sufficient forReliabilityFirst Corporation to verify completion of the Mitigation Plan. ReliabilityFirst Corporationmay request additional data or information and conduct follow-up assessments, on-site or other SpotChecking, or Compliance Audits as it deems necessary to verify that all required actions in the MitigationPlan have been completed and the Registered Entity is in compliance with the subject ReliabilityStandard. (CMEP Section 6.6)



Date of Submittal of Certification:06/1 6/09

NERC Violation ill No(s):RFC200800083

Reliability Standard and the Requirement(s) of which a violation was mitigated:FAC-003-1

Date Mitigation Plan was scheduled to be completed per accepted Mitigation Plan:OS/01/09

Date Mitigation Plan was actnally completed:04/08/09

Additional Comments (or List of Documents Attached):See attached document "Allegheny PowerCompletion Record of Mitigation for RFC2008000083".

I certify that the Mitigation Plan for the above named violation has been completed on the date shownabove and that all submitted infonnation is complete and correct to the best ofmy knowledge.

Name:James R. Haney



Phone:(724) 838-6331 ~

Authorized Sign~~ A ~

Page I of3

RELIABILIT


Submittal of a Certification of Mitigation Plan Completion shall include data or infonnation sufficient forReliabilityFirst Corporation to verify completion of the Mitigation Plan. ReliabilityFirst Corporation

may request additional data or infonnation and conduct follow-up assessments, on-site or other SpotChecking, or Compliance Audits as it deems necessary to verify that all required actions in the Mitigation

Plan have been completed and the Registered Entity is in compliance with the subject ReliabilityStandard. (CMEP Section 6.6)



Date of Submittal of Certification:06/16/09

NERC Violation ill No(s):RFC200800083

Reliability Standard and the Requirement(s) of which a violation was mitigated:FAC-003-1

Date Mitigation Plan was scheduled to be completed per accepted Mitigation Plan:OS/Ol109

Date Mitigation Plan was actually completed:04/08/09

Additional Comments (or List of Documents Attached):See attached document "Allegheny PowerCompletion Record of Mitigation for RFC2008000083".

I certify that the Mitigation Plan for the above named violation has been completed on the date shown

above and that all submitted infonnation is complete and correct to the best ofmy knowledge.

Name:James R. Haney



Phone:(724) 838-6331 aAuthodzed Signiiltm:,...kI~

Page I of3

Date2frjl9J

Attachment E

RELIABILIT

Please direct completed forms or any questions regarding completion of this fom1 to the

ReliabilityFirsl Compliance e-mail addressmitil!ationplanC<iJ.rfirst.om.

Please indicate the company name and reference the NERC Violation ill # (if known) in thesubject line of the e-mail. Additionally, any ReliabilityFirSl Compliance Staff member is

available for questions regarding the use of this form. Please see the contact list posted on theReliabilityFirSl Compliance web page.

Page 2 of3

RELIABILIT

Please direct completed fomls or any que tions regarding completion of this foml to theReliabilityFir t Compliance e-mail addre s mitie:ationplanCd),rfu·st.org.

Please indicate the company name and reference the RC Violation ill # (if known) in thesubject line of the e-mail. Additionally, any ReliabilityFirsl Compliance Staff member iavailable for questions regarding the use of this form. Please see the contact list posted 011 theReliabilityFirsl Compliance web page.

Page 2 of3

Attachment E

RELIABILIT

DOCUMENT CONTROL

Title:

Issue:

Date:

Distribution:

Filename:

Control:


Version 1

5 January 2008

Public

Certification of a Completed Mitigation Plan_Verl.doc


DOCUMENT APPROVAL


Robeli K. Wargo Raymond J. Palmieri


~l~ 1/5/2009Compliance DirectorEnforcement

Compliance




Page 3 of3

RELIABILIT

DOCUMENT CO TROL

Title:

I ue:

Date:

Distribution:

Filename:

Control:


Version I

5 January 2008

Public

Certification of a Completed Mitigation Plan_Ver1.doc


DOCUMENT APPROVAL




~/'~ 1/5/2009Compliance Director

EnforcementCompliance


Version Prepared By Summar of Changes Date


Page 3 of3

Attachment F

Summary and Review of Mitigation Plan Completion

FAC-003-1, R1 Dated July 6, 2009

July 6, 2009

Summary and Review of Evidence of Mitigation Plan Completion

NERC Violation ID #: RFC200800083 NERC Plan ID: MIT-08-1674 Registered Entity; Allegheny Power NERC Registry ID: NCR02602 Standard: FAC-003-1 Requirement: 1 Status: Complete

During an on-site compliance audit conducted from September 30 - October 2, 2008, it was identified that Allegheny Power’s (Allegheny) transmission vegetation management program (TVMP) Clearance 2 distances were not explicitly specified for all rated conditions and the distances did not have appropriate altitude correction factors applied as required. Allegheny Power submitted a Proposed Mitigation Plan to ReliabilityFirst on April 30, 2009, whereby stating Allegheny Power would complete all mitigating actions on or about May 1, 2009. This Mitigation Plan, designated MIT-08-1674, was accepted by ReliabilityFirst on May 8, 2009 and approved by NERC on May 11, 2009. Review Process: Allegheny Power submitted a Certification of Mitigation Plan completion, dated May 16, 2009 and signed May 23, 2009, attesting that the Mitigation Plan was completed on April 8, 2009. ReliabilityFirst requested and received evidence of completion for actions taken by Allegheny Power as specified in the Mitigation Plan. ReliabilityFirst performed an in-depth review of the information provided to verify that all actions specified in the Mitigation Plan were successfully completed. FAC-003-1, Requirement 1 states: R1. The Transmission Owner shall prepare, and keep current, a formal

transmission vegetation management program (TVMP). The TVMP shall include the Transmission Owner’s objectives, practices, approved procedures, and work specifications.1

R1.1. The TVMP shall define a schedule for and the type (aerial, ground) of

ROW vegetation inspections. This schedule should be flexible enough to adjust for changing conditions. The inspection schedule shall be based on the anticipated growth of vegetation and any other environmental or operational factors that could impact the relationship of vegetation to the Transmission Owner’s transmission lines.

1 ANSI A300, Tree Care Operations – Tree, Shrub, and Other Woody Plant Maintenance – Standard Practices, while not a requirement of this standard, is considered to be an industry best practice.

Attachment F


R1.2. The Transmission Owner, in the TVMP, shall identify and document clearances between vegetation and any overhead, ungrounded supply conductors, taking into consideration transmission line voltage, the effects of ambient temperature on conductor sag under maximum design loading, and the effects of wind velocities on conductor sway. Specifically, the Transmission Owner shall establish clearances to be achieved at the time of vegetation management work identified herein as Clearance 1, and shall also establish and maintain a set of clearances identified herein as Clearance 2 to prevent flashover between vegetation and overhead ungrounded supply conductors.

R1.2.1. Clearance 1 — The Transmission Owner shall determine

and document appropriate clearance distances to be achieved at the time of transmission vegetation management work based upon local conditions and the expected time frame in which the Transmission Owner plans to return for future vegetation management work. Local conditions may include, but are not limited to: operating voltage, appropriate vegetation management techniques, fire risk, reasonably anticipated tree and conductor movement, species types and growth rates, species failure characteristics, local climate and rainfall patterns, line terrain and elevation, location of the vegetation within the span, and worker approach distance requirements. Clearance 1 distances shall be greater than those defined by Clearance 2 below.

R1.2.2. Clearance 2 — The Transmission Owner shall determine

and document specific radial clearances to be maintained between vegetation and conductors under all rated electrical operating conditions. These minimum clearance distances are necessary to prevent flashover between vegetation and conductors and will vary due to such factors as altitude and operating voltage. These Transmission Owner-specific minimum clearance distances shall be no less than those set forth in the Institute of Electrical and Electronics Engineers (IEEE) Standard 516-2003 (Guide for Maintenance Methods on Energized Power Lines) and as specified in its Section 4.2.2.3, Minimum Air Insulation Distances without Tools in the Air Gap.

R1.2.2.1 Where transmission system transient overvoltage

factors are not known, clearances shall be derived from Table 5, IEEE 516-2003, phase-to-ground distances, with appropriate altitude correction factors applied.

R1.2.2.2 Where transmission system transient overvoltage

factors are known, clearances shall be derived from Table 7, IEEE 516-2003, phase-to-phase voltages, with appropriate altitude correction factors applied.

R1.3. All personnel directly involved in the design and implementation of

the TVMP shall hold appropriate qualifications and training, as defined

Attachment F


by the Transmission Owner, to perform their duties.

R1.4. Each Transmission Owner shall develop mitigation measures to

achieve sufficient clearances for the protection of the transmission facilities when it identifies locations on the ROW where the Transmission Owner is restricted from attaining the clearances specified in Requirement 1.2.1.

R1.5. Each Transmission Owner shall establish and document a process for the immediate communication of vegetation conditions that present an imminent threat of a transmission line outage. This is so that action (temporary reduction in line rating, switching line out of service, etc.) may be taken until the threat is relieved.

Evidence Submitted: R1:

• Allegheny’s revised TVMP within the Construction, Operation and Maintenance Manual. The TVMP was revised on March 26, 2009 to include the application of appropriate altitude correction factors to Clearance 2 distances, and to explicitly state that the minimum approach distances take into account all rated electrical operating conditions for each conductor on each line.

• Sign off sheets of affected Allegheny employees and contractors involved in the design and implementation of the TVMP acknowledging training received on the revisions described above to the TVMP. All training was completed by April 8, 2009.

Review Results: ReliabilityFirst Corporation reviewed the evidence the Allegheny Power submitted in support of its Certification of Completion. On July 6, 2009 ReliabilityFirst verified that the Mitigation Plan was completed in accordance with its terms and has therefore deemed Allegheny Power compliant to the aforementioned NERC Reliability Standard. Respectfully Submitted,

Robert K. Wargo Manager of Compliance Enforcement ReliabilityFirst Corporation

Attachment F

Attachment c

Notice of Filing

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Allegheny Power Docket No. NP10-___-000

NOTICE OF FILING March 31, 2010

Take notice that on March 31, 2010, the North American Electric Reliability

Corporation (NERC) filed a Notice of Penalty regarding Allegheny Power in the ReliabilityFirst Corporation region.

Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission’s Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.

The Commission encourages electronic submission of protests and interventions

in lieu of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 14 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426.

This filing is accessible on-line at http://www.ferc.gov, using the “eLibrary” link and is available for review in the Commission’s Public Reference Room in Washington, D.C. There is an “eSubscription” link on the web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected], or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659. Comment Date: [BLANK]

Kimberly D. Bose, Secretary