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Miles to Go

Progress has been made, but much work remains along the path to ERO completion.

Fortnightly Magazine - November 2006

exercising delegated statutory authority to levy penalties that can reach $1 million per day per violation.

As a final note, we strongly believe that the ERO and the regional entities should have the primary role in conducting compliance, investigation, and enforcement activities. We anticipate that the commission would serve as the oversight agency to ensure that these processes are working well, appropriate due process has been followed, penalties have been appropriately applied, and sufficient levels of uniformity have been achieved. As such, we anticipate that appeals from an ERO determination to the commission will be rare.

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Much work also remains to be done to ensure that the registration of entities responsible for complying with reliability standards is completed before next summer. To achieve this, the industry must reach out to every user, owner, and operator of the nation’s bulk-power system. The old saying about something being as strong as its weakest link certainly applies here—every entity that affects the reliability of the power system must play its part. A small entity that violates a standard can cause just as serious an impact on the reliability of the electric grid as a large utility.

As a first step, each entity must register with the region or regions in which it operates. Once registered, the entity must then understand which of the particular standards it must comply with. And, it must make certain that it has the mechanisms and structures in place so that it can comply with those standards. Finally, these steps must be done consistently across all the regions.

To date, the industry has made impressive progress in implementation of the ERO statute that EEI has long sought. FERC is performing a strong oversight role, but in the final analysis, it is up to all industry participants to complete the transition to the ERO. Time is running short to complete all the steps we must take before the summer peak-demand season is upon us. With continued cooperation and participation among all the stakeholders involved, we are confident that this mutual goal will be achieved.