FERC owns more than one enforcement tool. Besides civil penalties, it can require compliance plans or disgorgement of unjust profits, or condition, suspend, or revoke market-based rate authority,...
NERC Knows Best?
FERC this year must select a reliability czar. But the obvious choice could prove less than ideal.
Kelliher, in a technical conference last year, noted with great disdain that the blackout had been caused by a failure to adhere to NERC’s voluntary standards. So, why not give someone like PJM a chance?
Even ReliabilityFirst, which is consolidating reliability planning between regions, might make a good candidate for ERO.
Institutions like these perhaps would be more ambitious and willing to rise to the opportunity. FERC should do more to encourage other ERO applications, given that utility execs and the commissioners themselves already have discussed alternatives to NERC.
In fact, such discussions have been taking place for years. The idea that ISOs and RTOs would take over the reliability function was being discussed as early as 2001 in conjunction with the development of the Energy Industry Standards Board (See “ Izzbee, Izz It? ,” Bruce W. Radford, Public Utilities Fortnightly, July 15, 2001).
Watching Paint Dry
NERC’s Sergel puts a modern face on this institution, which should be grateful to have him as leader. But for all his efforts, he cannot hide what some have called a sick and dying bureaucracy.
At FERC’s November technical conference on ERO certification last year, the most prevalent criticism centered on NERC’s procedures as too slow.
For example, although not meant as a criticism, Ken Wiley from the Florida Reliability Coordinating Council (FRCC) provided an illuminating look at NERC efficiency. (FRCC’s Linda Campbell read his statement at the FERC technical conference).
“An examination of the NERC reliability standards Web page revealed the following things: There have been 23 standard authorization requests or SARs, to develop reliability standards submitted since January of 2002. The Version 0 SAR, which produced 90 reliability standards, was posted in April 2004 and passed in January 2005. This was a great effort.”
It was willing to acknowledge, however, that some standards in Version 0 were missing measurements and compliance administration elements. Furthermore, Wiley explained that a SAR was introduced in May 2005 to provide these missing pieces, and that SAR contemplated a time period of four years to accomplish that task.
Moreover, on the IT side, Wiley’s review found that a cyber-security standard passed through the Urgent Action process twice. A SAR was submitted for the cyber-security standard in July 2003. That standard is currently in its fourth drafting stage and is expected to go to ballot sometime in 2006.
Wiley counted 21 SARs in various stages of development, with some still awaiting approval. Nine of these have been in the process since 2002; two have been in the process since 2003; two since 2004; and eight were posted into the process in 2005.
“I believe all these things indicate that so far, this process has not met the criteria of being timely and responsive.
“I would respectfully suggest,” Wiley added, “that the reliability standards development process needs to be reviewed and perhaps revised to correct these deficiencies.”
I would hope so. Nevertheless, the NERC CEO insists on keeping procedures that are notoriously time-consuming.
Sergel also defended NERC’s reliance on the American National Standards Institute (ANSI serves as the central body