Facility Ratings Compliance Through a Corporate Community Approach

Facility Ratings play a critical role in the reliable planning and operation of the Bulk Electric System (BES). Yet maintaining compliance with relevant NERC standards remains an industry challenge. NERC consistently records instances of noncompliance between documented equipment/facility ratings and actual field conditions. FAC-008-5 ensures ratings are based on technically sound methodology and are essential for determining System Operating Limits. However, FAC-008-5 Requirement R6 is one of the riskiest standard requirements within the entire portfolio of NERC Operations and Planning (O&P) standards and is one of the most repeated compliance violations amongst all registered entities. FAC-008-5 R6 noncompliance events arise due to detected inaccuracies between the electronic facility ratings database and the actual BES facility ratings on the grid.

FAC-008-5 ensures that BES facility ratings are consistently formulated based on a regimented, technical approach. Facility ratings impact energy markets, transmission congestion pricing, outage scheduling and wide area real-time operations, so it is crucial to ensure that facility ratings are as accurate as possible. 

Both Transmission Owners and Generator Owners have specific requirements under FAC-008-5, highlighting its broad applicability across the power industry but also among departments within each internal organization. Communications gaps and departmental silos often lead to data quality issues that result in costly compliance infractions.

The Need for Corporate Accountability

The responsibility for FAC-008-5 compliance is divided among various organizational owners. Transmission Planning and Transmission Engineering traditionally handle compliance for the Transmission Owners function, while Generation Engineering manages it for Generator Owners function. When these formal assignments are established, FAC-008 can get left behind by other contributors to the standard, including those responsible for field procurement and commissioning new equipment. A recommendation from Facility Rating Methodology documentation, to mitigate risks of missing data, is for the Transmission Owners and Generator Owners to overlap FAC-008 facility ratings in each other’s databases. Given the volume of assets involved in FAC-008 compliance, a corporate community approach is necessary to maintain and sustain adherence with this high-risk, often violated standard.

Common Points of Failure to Watch For

FAC-008-5 Requirement R6, which addresses the final Facility Rating recorded in the electronic database, is one of the most difficult standards for organizations to keep aligned. Maintaining compliance can be difficult because accountability is often placed on office-based resources, while the assets that drive the data accuracy are in the field. Without a multi-tier, comprehensive compliance strategy, adherence to this obligation remains challenging. Key points of failure to monitor are:

Limited Compliance Accountability: There is a need to broaden the network of accountability, both upstream and downstream, to include all relevant stakeholders. This stretches from Engineering, Procurement and Construction (EPC) teams, which oversee design, material acquisition and construction, to Project Lifecycle Management Plans (PLMP), that oversees all project phases prior to generation and transmission facilities going into service.  Downstream compliance partners would involve Field Services and Transmission Operations since they address ongoing impacts to facility ratings in real-time.

Lack of Proactive Data Quality Reviews: Numerous Transmission and Generation personnel are updating multiple facility ratings data records daily. However, routine reviews of the entire data set are often reactively triggered by a potential noncompliance event. The use of an internal control to initiate a periodic data quality check (weekly to monthly) assures data accuracy and confidence in an organization’s facility ratings data sets. This also provides an organization with the opportunity to self-correct or self-report if needed, before issues proliferate.

Lack of Coordination Among Stakeholders: Generation and Transmission organizations frequently maintain independent facility ratings databases without regular cross-checks between data sets. Coincidentally, there are corporate stakeholders that are not directly assigned FAC-008 accountability and are unaware of their influence on the company’s NERC compliance program. It is essential to make sure that all team members are aware of how their operational actions can create negative outcomes for the rest of the company.

Lack of Compliance Awareness: Influential team members are often not looped in or aware of how their work impacts FAC-008 compliance. When a new piece of equipment is procured or installed in lieu of an outage, a re-evaluation of the rating is necessary to prevent misinformation and poor data quality from being used in critical operational and planning processes. It is highly recommended to seek out opportunities to formally embed FAC-008 action items and check points into the teams that indirectly impact FAC-008-5 compliance performance. It has also been observed that most organizations do not have an official FAC-008 Facility Ratings compliance awareness dashboard. An internal controls program can offer an objective feedback loop to both leadership and individual contributors alike on how the company is performing in its compliance activities.

Best Practices for a Community Approach to FAC-008-5

Bridging the Gap Between Impacted Office Personnel and Field Services

NERC’s organization of standards was made to foster collaboration, communication and teamwork amongst different stakeholders to meet compliance obligations.

To this end, it is highly recommended to establish periodic FAC-008-5 coordination meetings amongst key stakeholders to enhance collaboration and cooperation. With many operational workflows and departmental activities that impact a company’s adherence with FAC-008-5, an intentional effort for all compliance stakeholders to meet regularly is essential to prevent gaps from developing and widening over time.

Best Practices Include:

• Establish Periodic FAC-008-5 Touch Point Meetings amongst all impacted stakeholders.
• Incorporate FAC-008-5 Check Points and Actions Items into relevant corporate workflows.
• Develop Official FAC-008-5 Feedback Processes (From the field back to the office). One way to accomplish this is to leverage the use of smartphones and tablets to capture nameplate information.
• Create an official FAC-008-5 Facility Ratings Performance Dashboard to establish corporate compliance awareness, track annual and periodic FAC-008 workflow processes, and highlight the data quality status of the FAC-008 Facility Ratings database.

Encouraging TO and GO Overlap of FAC-008 Functions

FAC-008-5 details compliance obligations for the TO and GO registered functions. However, it does not explicitly encourage the corporate community approach between the two teams. There is an ideal opportunity for the GO and TO functions to come together and collaborate with a dedicated focus of supporting one another.

Collaboration Best Practices Include:

• Incorporate the other team (GO or TO) into your annual QA/QC document review process, not only for the GO or TO focused Facility Ratings Methodology documentation reviews, but also for the Reliability Standard Audit Worksheets (RSAW) reviews.
• Detail your team’s Facility Ratings Methodology document and actual facility ratings to extend one zone past the GO / TO FAC-008 line of demarcation.  This helps to demonstrate a purposeful effort to mitigate any operational or compliance gaps.
• Share your team’s actual facility ratings one zone beyond the GO / TO line of demarcation to help to exhibit your company’s intentions to eliminate any missing series elements that deal with FAC-008 Facility Ratings.
• Schedule Periodic FAC-008 Coordination Meetings between both Registered Functions.
• Establish a quarterly FAC-008 GO / TO leadership meeting as a touch point, as well as monthly FAC-008 Individual Contributor working team meetings to address the following BES items: new generation/transmission projects, renewable energy project development, FAC-008 Facility Rating database management, etc.
• Continuous efforts must be made to keep the overall FAC-008 Facility Ratings databases updated and aligned between the TO and GO functions.

Next Steps

By fostering a corporate community approach, organizations can achieve sustained compliance with FAC-008-5 ensuring safety, reliability, and financial responsibility. It takes an entire corporate network to commit to the principles of collaboration, cooperation and mutual communication. A dedicated commitment to internal housekeeping and making an extra concerted effort to establish more formality around compliance policies, procedures and operational guidelines can significantly impact an organization’s compliance with mandatory NERC standards. It is highly recommended to memorialize institutional knowledge before your key FAC-008 personnel retire or transition into other key corporate roles.

TRC Can Help

At TRC, we focus on enhancing shareholder value and corporate compliance reputation by mitigating the risk of non-recoverable NERC fines, improving audit readiness, eliminating silos, enhancing operational efficiency, streamlining workflows and establishing a centralized document repository for core compliance data.

Our tested practitioners have decades of experience with utility-based regulatory requirements. We conduct NERC gap assessments, execute audit readiness initiatives and power flow studies. We also support physical and cyber security assessments and onsite walk downs of transmission lines and substations to verify FAC-008 facility rating data values. Our team is accustomed to working closely with utilities to analyze, evaluate and prepare for cold and extreme weather events, Protection and Controls (PRC) related studies and Generation Modeling (MOD) related studies.

Resources

FAC-008-5 Facility Ratings Standard
NERC Compliance Services
NERC Compliance Success Through a Corporate Community Approach
FAC-008-5-Facility-Ratings