The Federal Energy Regulatory Commission on April 15 gave PacifiCorp 30 days to explain why the commission should not fine the company $42 million for allegedly violating federal reliability standards that led to the setting of a major fire in Utah.

The show-cause order (IN21-6) revealed that FERC staff found that the company failed to comply with a mandatory reliability standard pertaining to a transmission line facility ratings methodology.

Specifically, staff determined that the majority of PacifiCorp's transmission lines failed to have accurate clearance measurements as required under the National Electric Safety Code, leading to incorrect facility ratings. Staff also claimed that the company was generally aware of those issues in 2007 but failed to adequately address them. And even after PacifiCorp implemented a new facility ratings methodology in 2009 it did not correct the inaccurate clearance measurements until 2017, staff alleged.

The Utah Department of Public Safety also concluded that inadequate clearance between transmission facilities caused the 2012 Wood Hollow fire that burned more than 47,000 acres in Utah, killing one person in addition to livestock and destroying more than 50 residences and cabins, according to the order.

At least 45% of the company's transmission lines were "not safe to energize," but the company continued to energize most of them at their incorrect ratings "without making timely efforts to identify and remediate them and without heeding recommendations," according to the order.

Democratic FERC Chairman Richard Glick said during an April 15 meeting that incorrect measurements and ratings "threaten both grid reliability and public safety."

"I want to make it clear that today's order is just one step in the process and does not represent a commission determination that PacifiCorp was in fact in violation or that they should be fined a specific amount," Glick said. "But today's order is an indication that the commission takes our responsibilities over the reliability of the bulk power system very seriously."

The order noted that FERC staff recommended a $42 million penalty based on the company's reliability standard violations but not for any connection to the Wood Hollow fire. The violations justify the recommendation, the order said.

"Thus, there is no basis in law or fact for the argument that the commission should ignore the Wood Hollow fire — one of the outcomes of PacifiCorp's violations — as part of its penalty determination," the order said. "In any event, staff's penalty recommendation would be the same irrespective of the fire in light of the risk posed by the violations."

Commissioner Neil Chatterjee said during FERC's April 15 open monthly meeting that while he supported a "probing inquiry in this case" he is concerned about the proposed penalty given that PacifiCorp has devoted $127 million to remediate clearance conditions on its system.

"This is an extremely, extremely difficult case because it relates to clearance issues that were determined to be the cause of the devastating Wood Hollow fire, and it's my understanding that this is the first time FERC has ever considered wildfire damage when recommending a civil penalty for an alleged reliability violation," Chatterjee said. "I think we need to be very deliberate and clear in how we approach these issues ... I urge the commission to carefully consider whether the $42 million penalty is fair and reasonable here. We must strive to get it right."