Power Failure - Who's to Blame?

Litigation, North America

A dispute cropped up when a refiner suffered production losses after its backup power from the grid did not function as expected during a power failure. Baker & O'Brien's role was to sort out the responsibilities at the operational interface between refiner, power cogenerator, and the utility provider to understand why the incident happened. Our testimony addressed the chronology of the failure, operational relationships, and the steps that each operator would have been expected to take.

It is essential that petroleum refineries, which operate continuous processes, have a continuous power supply. Historically, refineries sourced their electrical power from the electrical supply grid operated by the local utility. In the event that there was a refinery power loss, even for an instant, the grid would seamlessly and instantly supply back-up electricity thereby keeping the process units in operation. The coordination, maintenance and operation of the system of protection devices are, of course, essential. In recent years, cogeneration ("cogen") plants have been constructed adjacent to many refineries in the world. These cogen plants utilize waste heat from the refinery to efficiently capture otherwise lost or low value energy and reduce reliance on outside power supplies. However, one of the disadvantages of cogen plants is that they are located directly in between the grid and the refinery. This brings a layer of complexity to the coordination, maintenance and operation of the system of protection devices between the grid, the cogen plant, and the refinery.

The system described above was the subject of a claim following a power interruption to a refinery in which the back-up power supply from the grid did not seamlessly work. The refinery ("Refiner") filed suit against the utility company ("Utility") claiming loss of production due to the failure of the Utility's systems. The Utility claimed that it was the Refiner's systems that were at fault. In the middle was the cogen plant ("Cogenerator").

Baker & O'Brien was engaged to review the circumstances surrounding the power failure and provide an expert opinion on the potential causes. As part of our investigation we examined operational records of the Refiner, the Cogenerator and the Utility. We were asked to provide a technical report addressing issues such as: (1) a detailed chronology of the failure and what was actually happening as opposed to what each of the parties appeared to be experiencing; (2) whether each of the system operators clearly understood the operational relationship between their system and the other parties' systems; and (3) whether the proper actions were taken by each operator and system.

Our technical expert report was submitted as evidence to the court. Observations and opinions regarding opposing experts' reports were also prepared and submitted as evidence at trial. Oral testimony was provided at trial.

E. Shawn McDonald

Vice President, Houston Office Manager

Petroleum Refining / Power Generation
Standard of Care / Accident / Incident Investigation / Litigation / Expert Witness Testimony
North America