I tried both solutions below but I had to install "HP Rack and Power Manager Serial Relay Agent (SRA) Update 1 for Windows" to stop this event and make serial communication work.
In my case, it took one more step to solve the problem, in addition to the solution provided by HP in "HP Support Document ID: EX050502_CW01". After disabling CLI, shutdown the server, plug out the power cord, wait 30 sec, in this time plug out the serial cable from the usv and then restart the server. When the server is up and running again, plug the serial cable back in. Now, the power manager should see the usv. In my case, it worked.
From a newsgroup post: "I just attached a brand new serial cable from a brand new UPS to a Windows 2000 Server Proliant, and installed the HP Rack & Power Manager 1.1 System Agent and Serial Relay Agent. I was receiving this error every 30 seconds or so in my Application Event Log. After hours on the phone with HP Tech support and no resolution, I found "HP Support Document ID: EX050502_CW01" that solved my problem".