Federal regulators said Monday that they've approved a $3.25 million settlement with an Arizona utility over a 2011 blackout that left millions of people without power in California, Arizona and Mexico.
The settlement between the Federal Energy Regulatory Commission and Arizona Public Service Co. is expected to be the first of several stemming from the blackout that involved a half-dozen utilities and grid operators.
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The settlement requires APS to pay $2 million to the federal government and $1.25 million for improvements to the electrical grid.
A failed maintenance procedure at an Arizona Public Service transmission switch yard near Yuma, Ariz., led to the blackout on the afternoon of Sept. 8, 2011, knocking out power to 2.7 million homes and businesses in Arizona, Southern California and Tijuana, Mexico, on a hot summer day. The entire San Diego area lost power — some customers for up to 12 hours — forcing schools and businesses to close and creating horrendous traffic jams as drivers navigated without traffic signals or street lights.
The FERC said the grid quickly became overloaded when power was rerouted from Yuma, a loss that it should have been able to sustain.
APS said in a statement that it neither admits nor denies the violations, but found it important to settle.
"Resolving this issue enables us to move forward and continue working with the other entities to implement measures to help avoid similar future events, while continuing to provide our customers with the highest level of reliability," the statement said.
Federal regulators earlier this year told six utilities and grid operators that they violated reliability standards during the blackout, and several have said they are moving toward resolutions with regulators.
One of them, the Imperial Irrigation District in Southern California, said in February that it was in settlement talks that with the FERC that would result in $9 million for upgrades and $3 million in penalties.
The other operators involved are Southern California Edison, The California Independent System Operator, the Western Electricity Coordinating Council and the Western Area Power Administration.