ERL Blog

On August 27, 2010, FERC issued a Guidance Order regarding its expectations for future Notices of Penalty (“NOPs”) filed with FERC.  In the Guidance Order, FERC states that it is concerned that NERC is not treating repetitive infractions of the same or closely-related standard requirements as an aggravating factor when making penalty determinations.  In addition, FERC states that future NOPs should explain whether a violation reflects recurring conduct by the same registered entity or by an affiliate.  FERC does note in the Order that it is not concluding that NERC lacks the discretion to determine whether a prior violation should be an aggravating factor in the penalty determination.  To view the Guidance Order, click here.

On August 23, 2010, NERC provided supplemental information for the pending Notice of Penalty regarding the City of Tallahassee in Docket No. NP10-143.  To view the supplemental information, click here.

On August 20, NERC submitted supplemental comments following FERC’s July 6, 2010 technical conference in Docket No. AD10-14.  After scheduling discussions among NERC stakeholders and the Board of Trustees during the NERC Member Representatives Committee and Board of Trustees meetings in Toronto, Ontario on August 4-5, 2010, NERC felt it important to provide supplementary comments involving the prospect of periodic, face-to-face discussions between Commissions, NERC officials, and industry and other stakeholder executives regarding the state of reliability and reliability oversight implementation.  These supplemental comments provide NERC’s views that the July 6 technical conference was “a very valuable undertaking”, and that “continuing executive-level discussions on various reliability issues is valuable and appropriate.”  NERC recommends that similar “technical summits,” should be held annually, beginning early in the first quarter of 2011, with more frequent meetings among NERC management and senior Commission staff to discuss emerging issues and to coordinate the further implementation of Section 215 of the Federal Power Act.  To view the supplemental comments, click here.

On Wednesday and Thursday, August 4-5, 2010, the NERC Member Representative Committee (MRC), Board of Trustees Compliance Committee (BOTCC), and Board of Trustees (BOT) will meet in Toronto, Ontario.

To view the MRC Agenda, click here.

To view the MRC Presentations, click here.

To view the BOTCC Agenda, click here.

To view the BOTCC Presentations, click here.

To view the BOT Agenda, click here.

To view the BOT Presentations, click here.

On July 30, 2010, NERC submitted the following seventeen Notices of Penalty (NOPs) to FERC for review.  In Docket NP10-159 below, due to the confidential nature of the particular CIP-related violations, the offending Registered Entity’s name is not identified.  Therefore, only the docket number is listed below.

 

NP10-159: To view the CIP-related and other NOP standards submitted in this docket, click here.

NP10-158: To view the NOP regarding Public Service Company of New Mexico, click here.

NP10-157: To view the NOP regarding Commonwealth Edison Company, click here.

NP10-156:  To view the NOP regarding EPCOR USA North Carolina (Southport), click here.

NP10-155: To view the NOP regarding EPCOR USA North Carolina  (Roxboro), click here.

NP10-154: To view the NOP regarding Ocala Utility Services, click here.

NP10-153: To view the NOP regarding DTE Energy Trading, click here.

NP10-152: To view the PRC-related NOP regarding Dynegy, click here.

NP10-151: To view the NOP regarding PECO Energy, click here.

NP10-150: To view the NOP regarding Baltimore Gas & Electric, click here.

NP10-149: To view the NOP regarding Kiowa Power Partners, click here.

NP10-148: To view the NOP regarding the City of Vineland, NJ, click here.

NP10-147: To view the NOP regarding Greenwood Commissioners of Public Works, click here.

NP 10-146: To view the NOP regarding San Diego Gas & Electric, click here.

NP10-145:  To view the NOP regarding Pacific Gas & Electric, click here.

NP10-144: To view the VAR-related NOP regarding Dynegy, Inc., click here.

NP10-143: To view the NOP regarding the City of Tallahassee, FL, click here.

On July 30, 2010, NERC issued two draft Compliance Application Notices (CANs) for industry comment.  The first CAN is regarding EOP-005-1 Requirement 7, which addresses evidentiary requirements for verification of restoration procedures by actual testing or simulation.  The second CAN is regarding CIP-004-2 Requirement 4.2 and CIP-004-3 Requirement 4.2, which address revocation of physical and electronic access to Critical Cyber Assets.  After review and consideration of filed comments, NERC intends to issue final CANs.

Comments are due August 16, 2010, and may be submitted via email to cancomments@nerc.net, including the CAN identification name in the subject line of the email. 

To view the CAN regarding EOP-005-1 R7, click here.

To view the CAN regarding CIP-004-2 R4.2 and CIP-004-3 R4.2, click here.

On July 28, 2010, the D.C. Circuit Court of Appeals issued an order granting FERC’s motion and dismissing the NRG Power Marketing and Louisiana Generating LLC’s petition for review of FERC orders 713, 713-A, and 713-B, which approved new versions of NERC Reliability Standard IRO-006 addressing Transmission Loading Relief (“TLR”) procedures.  The D.C. Circuit order dismissed the petition on the grounds, argued in FERC’s May 24, 2010 reply, that the challenged orders are “not ripe for review.”  To view the D.C. Circuit Order, click here.

On July 27, 2010, NERC submitted to FERC (for informational purposes) a report entitled “Reliability Impacts of Climate Change: Technology Assessment and Scenario Development.”  The Report was prepared by NERC’s Reliability Impacts of Climate Change Initiatives Task Force.  This Task Force is charged with assessing the reliability considerations of climate change initiatives, resource responses, fuel mix changes, and smart grid and other technologies.  The Report reviews ongoing climate change initiatives in North America, discusses some of the reliability considerations of the resources and technologies anticipated in three time “horizons” between 2010 and 2050, and outlines a systematic way of evaluating future pathways/scenarios.  To view the Report, click here.  To view NERC's press release on the Report, click here.

On July 26, 2010, NERC submitted comments on the July 6, 2010 FERC technical conference on standards development and NERC and Regional Entity enforcement matters conducted by FERC in Docket No. AD10-14. In general, NERC identifies and comments on the broad themes that emerged during the course of the July 6 Technical Conference as well as specific issues that were raised by participants during the conference.  NERC also offers the Commission several recommendations for addressing these matters. To view NERC’s comments on the July 6 Technical Conference, click here.

On July 16, 2010, NERC submitted an interpretation of Requirement R8 in Reliability Standard TOP-001-1, Reliability Responsibilities and Authorities, to FERC for approval. NERC explains that the interpretation clarifies the responsibilities of Balancing Authorities and Transmission Operators during a system emergency by referencing the NERC Glossary of Terms Used in Reliability Standards as well as other relevant Reliability Standards. Generally, the Transmission Operator is responsible for the reliability of its “local” transmission system and operates or directs the operations of the transmission facilities. NERC’s proposed interpretation was approved by the NERC Board of Trustees on May 12, 2010. NERC requests that the interpretation be made effective immediately upon FERC’s approval. NERC’s proposed interpretation is an outgrowth of Florida Municipal Power Pool’s December 15, 2009, request for formal interpretation, which concerned the responsibilities of Balancing Authorities and Transmission Operators during a system emergency.

To view NERC’s proposed interpretation of Reliability Standard TOP-001-1, Requirement R8, click here.

On July 16, 2010, in Docket No. RM08-13, NERC submitted a compliance filing in response to FERC Order No. 733, in which the Commission approved Reliability Standard PRC-023-1, Transmission Relay Loadability and directed NERC to develop certain modifications to PRC-023-1. Additionally, Order No. 733 directed NERC to file a report no later than 120 days of the Order addressing the issue of protective relay operation due to stable power swings and to include an action plan and timeline that explains how and when NERC intends to address this issue through its Reliability Standards Development Process. To view NERC’s compliance filing responding to these directives and explaining its phased approach to addressing the specific directive to develop a new Reliability Standard to address stable power swings, click here.

On July 15, 2010, in Docket No. RD10-13, FERC approved NERC’s proposed interpretation of Requirement R1.1 in Reliability Standard CIP-006-2, Cyber Security – Physical Security of Critical Cyber Assets, that NERC submitted on April 20, 2010, for approval. To read FERC’s order approving NERC’s proposed interpretation of CIP-006-2, Requirement R1.1, click here.

On July 15, 2010, in Docket Nos. RM08-19-003 and RM05-5-019, FERC issued Order No. 729-B in order to grant rehearing of Order No. 729-A, in which the Commission, among other things, provided clarification regarding the implementation timeline for the six Modeling Data, and Analysis (MOD) Reliability Standards concerning the calculation of available transfer capability or available flowgate capability that the Commission approved in Order No. 729. Specifically, in Order No. 729-B the Commission determines that the implementation schedule for the MOD Reliability Standards should be keyed to the date of approval of such standards (as originally contemplated in Order No. 729) and not to Order No. 729’s Federal Register publication-date (as the Commission determined in Order No. 729-A). Accordingly, the Commission grants rehearing of Order No. 729-A and directs that the MOD Reliability Standards are to become effective as of the first day of the first quarter occurring 365 days after their approval by the Commission (i.e., April 1, 2011). In addition, the Commission revises the implementation deadline for compliance with the related North American Energy Standards Board (NAESB) business practice standards incorporated by reference in Order No. 676-E, so that the deadlines for compliance with the requirements of Order Nos. 729 and 676-E remain consistent.  To view Order No. 729-B, click here.

On July 15, 2010, FERC held an open meeting, at which Commission Staff provided an update on smart grid developments and presented its recommendation for the process of adopting smart grid interoperability standards.  To view Commission Staff’s Smart Grid Standards presentation, click here.

On July 12, 2010, in Docket No. RR10-7, FERC issued an order accepting NERC’s March 10, 2010, filing of Compliance and Monitoring and Enforcement Program Agreements (CMEP Agreements) between SERC and SPP and between SERC and FRCC, which provide that SERC will act as the Compliance Enforcement Authority for compliance matters involving all registered entity functions for FRCC and SPP within their respective regions. In addition, the Commission approved certain amendments to the Regional Entity Delegation Agreements of FRCC, SERC, and SPP that were made in order to reflect the proposed CMEP Agreements. The Commission’s acceptance of the CMEP Agreements, however, is conditioned upon those agreements being modified such that SERC will receive monies from penalties against SPP and FRCC and that there will no offset to SPP’s and FRCC’s assessments from the ERO for such penalty amounts. Similarly, the Commission directs SERC, SPP and FRCC to revise their Regional Entity Delegation Agreements such that SERC will receive any penalties levied against and paid by SPP and FRCC. The Commission also finds it necessary to modify the CMEP Agreements by removing the automatic renewal provisions, subject to the Commission’s re-evaluation and –approval following the initial term, which is scheduled to end on December 31, 2012. To view the Commission’s Order on the SERC, SPP, and FRCC CMEP Agreements and Revised Delegation Agreements, click here.

FERC issued a notice on June 15, 2010, and a further notice on June 30, 2010, regarding a technical conference on July 6, 2010 in Docket No. AD 10-14 that will focus on: NERC’s standards development process; communication and interactions between the Commission; the ERO and Regional Entities; and ERO and Regional Entity monitoring and enforcement.  According to the June 30 notice, the discussion may address matters related to proposed modifications to ERO Rules of Procedure (Docket No. RR09-6), NERC’s Three-Year Performance Assessment Report (Docket No. RR09-7), and NERC’s proposed revisions to the Reliability Standard Processes Manual (Docket No. RR10-12).  Comments on the technical conference must be filed by July 26 in Docket No. AD10-14-000.  The prefiled comments of the speakers as well as the transcript of the July 6 Technical Conference are available at the FERC website and contained in the respective links below.

 

To view the transcript of the July 6 Technical Conference, click here.  

To view the testimony of John Q. Anderson (NERC), click here.

To view the testimony of Mark Crisson (APPA), click here.

To view the testimony of Steve Wright (BPA), click here.

To view the testimony of Greg Abel (MidAmerican / EEI), click here.

To view the testimony of Louise McCarren (WECC), click here.

To view the testimony of John Anderson (ELCON), click here.

To view the testimony of Gerry Cauley (NERC), click here.

To view the testimony of Allen Mosher (APPA), click here.

To view the testimony of Nancy Saracino (CAISO), click here.

To view the testimony of Tim Gallagher (ReliabilityFirst), click here.

To view the testimony of David Mohre (NRECA), click here.

To view the testimony of Billy Ball (Southern / EEI), click here

To view the testimony of Nicholas Ingram (IESO), click here.

 

 

On July 7, 2010, NERC submitted the following twenty-four Notices of Penalty (NOPs) to FERC for review. Several of the NOPs submitted by NERC were for violations of CIP-related Reliability Standards and, due to the confidential nature of such CIP-related violations, the offending Registered Entity’s name is not identified. Accordingly, only the docket number in which such NOPs were submitted is listed below.

NP10-142: To view the NOP regarding NAES Corp., click here.
NP10-141: To view the NOP regarding LA Dept. of Water and Power, click here.
NP10-140: To view the CIP-related NOP submitted in this docket, click here.
NP10-139: To view the CIP-related NOP submitted in this docket, click here.
NP10-138: To view the CIP-related NOP submitted in this docket, click here.
NP10-137: To view the CIP-related NOP submitted in this docket, click here.
NP10-136: To view the CIP-related NOP submitted in this docket, click here.
NP10-135: To view the CIP-related NOP submitted in this docket, click here.
NP10-134: To view the CIP-related NOP submitted in this docket, click here.
NP10-133: To view the NOP regarding Hermiston Generating Co. L.P., click here.
NP10-132: To view the NOP regarding Camp Grove Wind Farm, LLC, click here.
NP10-131: To view the CIP-related NOP submitted in this docket, click here.
NP10-130: To view the CIP-related NOP submitted in this docket, click here.
NP10-129: To view the NOP regarding Benton County Wind Farm, LLC, click here.
NP10-128: To view the NOP regarding National Grid Generation, click here.
NP10-127: To view the NOP regarding SRW Limited Partnership, click here.
NP10-126: To view the NOP regarding Lincoln Gen. Facility, click here.
NP10-125: To view the NOP regarding Covanta York Renew. Energy, click here.
NP10-124: To view the NOP regarding Elk Hills Power LLC, click here.
NP10-123: To view the NOP regarding City of McPherson, KS, click here.
NP10-122: To view the NOP regarding Empire Dist. Electric Co., click here.
NP10-121: To view the NOP regarding Reedy Creek Imp. Dist., click here.
NP10-120: To view the NOP regarding E.ON U.S. Services Inc., click here.
NP10-119: To view the NOP regarding Citizens Elec. Corp., click here.

On June 30, 2010, NERC and FRCC submitted a compliance filing in Docket Nos. RR06-1-016, RR06-1-017, RR07-8-004 and RR07-8-005, to respond to the December 19, 2008 Order directing NERC and FRCC to submit a filing regarding FRCC’s use of the compliance committee review process. 

In its Order, FERC directed NERC and FRCC to amend its process to state that the “review process may be initiated only by compliance staff and that the process may not be used to determine proposals for penalties or sanctions for violations.” FERC also required, in lieu of FRCC’s currently provided quarterly reports on compliance committee reviews, that NERC and FRCC submit non-public reports 30 days after the end of each quarter, listing: the topic of each review, the start/end dates of each review, the reason for review, the participants, and the results of each review.  Finally, FERC directed FRCC to clarify certain ambiguities in its bylaws and proposed modifications concerning the voting requirements applicable to the FRCC hearing body.   To read the compliance filing, click here.

On June 30, 2010, NERC and NPCC submitted a compliance filing in Docket Nos. RR06-1-016, RR06-1-017, RR07-3-004, and RR07-3-005, responding to the December 19, 2008 Order directing NERC and NPCC to submit a filing regarding NPCC’s use of technical committee consultations. 

In its Order, FERC directed NPCC to clarify whether its proposed voting requirement “applies to the actions of the compliance committee as a hearing body or justify why it should not.” It also directed NPCC to amend its bylaws removing an ambiguity as to whether the compliance committee, when acting as the hearing body, will render its decisions by a majority of votes cast by a quorum.  FERC directed NERC and NPCC to amend its technical consultation process to state that the consultation process “is to be initiated only by compliance staff and that the process may not be used to determine appropriate proposals for penalties or sanctions for violations.  FERC also required, in lieu of NPCC’s currently provided quarterly reports on compliance committee reviews, that NERC and NPCC submit non-public reports 30 days after the end of each quarter, listing: the topic of each review, the start/end dates of each review, the reason for review, the participants, and the results of each review.  To read the compliance filing, click here.

On June 28, 2010, the United States Supreme Court issued a decision in Free Enterprise Fund v. Public Company Accounting Oversight Board.  The Public Company Accounting Oversight Board (PCAOB) is a self-regulatory organization that was created by the Sarbanes-Oxley Act of 2002.  Some have wondered whether this decision could apply in some way to NERC. To view the opinion, click here.

On June 25, 2010, NERC submitted supplemental information in Docket No. NP10-115-000 for the June 2, 2010 Notice of Penalty regarding Northern Indiana Public Service Company and Reliability Standard BAL-003-0a.  The supplemental information corrected some numbers in the fifth paragraph of page 4 and made related clarifications   To read the submission, click here.

On June 23, 2010, FERC issued an order in Docket No. PA09-7-000 approving the Audit Report prepared by FERC Staff concerning its findings and recommendations with respect to the Florida Reliability Coordinating Council’s (FRCC's) Regional Entity function. The Audit was intended to help FERC determine whether, consistent with Order No. 672, the FRCC Regional Entity is sufficiently independent from the FRCC Member Services Division.  FERC concluded, that “upon implementation of the applicable recommendations FRCC prospectively will satisfy the requirement that it ‘demonstrate[s] a strong separation between oversight and operational functions.’”  To read the order and attached Audit Report, click here.

On June 17, 2010, FERC issued a NOPR in Docket No. RM09-25-000 that proposes to approve Reliability Standards PER-005-1 (System Personnel Training) and PER-004-2 (Reliability Coordination – Staffing) that NERC submitted to the Commission for approval in July 2006 along with 105 other proposed Reliability Standards concurrent with its 2006 ERO application.  In the NOPR, FERC proposes to direct NERC to develop modifications to PER-005-1 to address certain issues and to approve the retirement of the currently effective PER-002-0 (Operating Personnel Training) and PER-004-1 (Reliability Coordination), which would be superseded by the proposed Reliability Standards PER-005-1 and PER-004-2.  Comments are due on August 23, 2010.  To read the NOPR, click here.

On June 17, 2010, FERC issued a NOPR in Docket No. RM10-23-000 in which the Commission proposes to amend the transmission planning and cost allocation requirements established in Order No. 890 in order to ensure that Commission-jurisdictional services are provided on a basis that is just, reasonable, and not unduly discriminatory or preferential.  To read the NOPR, click here.

On June 15, 2010, FERC issued an order in Docket No. RR09-6-000 granting an extension of time to comply with the March 18, 2010 Order directing NERC to propose revisions to its Reliability Standards Development Process and the NERC Rules of Procedure. To read the order, click here.

On June 14, 2010, NERC submitted comments in Docket No. PL10-4-000 regarding FERC’s March 18, 2010 Policy Statement on Penalty Guidelines.  Generally, NERC recommends that the Commission not apply the Proposed Penalty guidelines to Reliability Standards, or if it does than that it restrict use of the guidelines only to cases where the Commission has initiated its own investigation under Part 1b of its regulations. To read NERC’s comments, click here.

On June 11, 2010, FERC issued an Order in Docket No. RM06-16-012 denying rehearing and granting partial clarification, denying the request for stay, and granting extension of time for the March 18, 2010 Order directing NERC to submit a modification to Table I, footnote b of Transmission Planning (TPL) Reliability Standard TPL-002-0 that is responsive to a Commission directive regarding footnote b set forth in Order No. 693.  To read the order, click here.

On June 10, 2010, FERC issued a letter order in Docket No. RR09-9-003 accepting NERC’s response to the October 15, 2009 Order on 2010 Business Plans and Budgets.  To read the letter order, click here.

On June 10, 2010, NERC requested, in Docket No. RR10-12-000, FERC’s approval to entirely replace Version 7 of the Reliability Standards Development Procedures (“RSDP”), currently included as Appendix 3A of the NERC Rules of Procedure, with its proposed Standards Process Manual.  The Standard Processes Manual was approved by the NERC Board of Trustees on May 12, 2010.  The proposed Standard Processes Manual incorporates process amendments, edits, and a clarifying document name change to the NERC RSDP – Version 7.  To read NERC’s petition for approval and attached proposed Standards Process Manual, click here.

On June 9, 2010, NERC submitted, in Docket No. RR10-11-000, a petition for approval for: (a) its Revised Pro Forma Delegation Agreement, (b) Revised Delegation Agreements with the Eight regional Entities, (3) Amendments to the NERC Rules of Procedure,  and (4) amendments to the Bylaws of several of the Regional Entities. To read the 2558-page petition for approval, click here.

On May 28, 2010, FERC issued a notice in Docket Nos. NP10-94 through NP10-106 stating that it will not conduct further review, on its own motion, of the NOPs submitted on April 28, 2010, and May 3, 2010. To view the Commission notice, click here.

On May 24, 2010, FERC filed a reply in support of its motion for dismissal or abeyance of NRG Power Marketing’s (NRG) petition for review in front of the D.C. Circuit Court of Appeals (Case No. 10-1061).  To view FERC’s reply, click here.

On March 12, 2010, NRG had submitted its petition for review of FERC Orders 713, 713-A, and 713-B, approving new versions of NERC Reliability Standard IRO-006 addressing Transmission Loading Relief (“TLR”) procedures.

The Court granted NERC’s Motion to Intervene on June 23, 2010.  It is believed that this is the first appeal of a FERC Order concerning reliability standards to be appealed to a U.S. Court of Appeals.

In its May 24 reply, FERC argued, among other things, that the challenged orders are “not ripe for review,” and should be dismissed, or alternatively held in abeyance, until FERC has completed the Notice of Inquiry ("NOI") proceeding related to this standard that was instituted by FERC on January 21, 2010 in FERC Docket No. RM10-9. 

On May 17, 2010 FERC issued an order in Docket No. RM08-13-001, granting rehearing for further consideration on the March 18, 2010 Order approving Reliability Standards PRC-023-1 and direction modification. Reliability Standard PRC-023-1 requires transmission owners, generator owners, and distribution providers to set load-response phase protection relays according to specific criteria in order to ensure that the relays reliability detect and protect the electric network from all fault conditions, but do not operate during non-fault load conditions. To read the order, click here.

On May 17, 2010, FERC issued an order in Docket No. RM06-22-012 granting rehearing for further consideration of the March 18, 2010 Order on CIP Reliability Standards.  EEI, APPA, and NRECA had requested rehearing of the March 18 order, which had approved the VSL assignments for CIP standards CIP-002-1 through CIP-009-1. To read the order granting rehearing, click here.

On May 17, 2010, FERC issued an order in Docket No. RM06-16-012, granting rehearing for further consideration of the March 18, 2010 Order Setting Deadline for Compliance for Reliability Standard TPL-002-0.  In the March 18 Order, FERC directed NERC to submit by June 30, 2010 modifications to Table 1, footnote b of the TPL-002-0 Reliability Standard that would comply with FERC’s directive in Order No. 693 regarding the loss of non-consequential load in the event of a single contingency.  To read the order, click here.

On May 14, 2010, at the initiation of the NERC Board of Trustees (“BOT”) Chairman, NERC issued a request to the BOT to approve a resolution without a meeting that would shorten the forty-five (45) day public comment time period normally required to issue a request for data or information to fourteen (14) days.

 

NERC has underway an effort to designate a “bright line” between those systems in nuclear power plants subject to compliance with NRC regulations and those subject to compliance with the NERC Reliability Standards.  FERC requires that NERC complete an analysis of each nuclear power plant’s systems and make the bright line determination by October 2010.  A critical step to completing the bright line determination is having each nuclear power plant owner complete a survey for each plant so that NERC and the NRC can use the results of the survey to determine whether a system is subject to NRC or NERC jurisdiction. As discussed in several workshops held in April and May, the nuclear power plant owners will have 30 days to complete the survey once it has been approved by the board.

 

NERC Rule of Procedure 1600 requires a twenty-one (21) day review period by FERC’s Office of Electric Reliability and a subsequent forty-five (45) day industry comment period before a request for data or information can be sent to the industry.  Under NERC Rule of Procedure 1606, this period may be shortened to issue a request for data or information if the data or information must be obtained in order to comply with a directive in an order issued by FERC or another governmental authority.  To enable NERC to present the proposed data request to the Board for approval at the anticipated June 11 conference call to deal with the FERC order requiring change to the standards development process, NERC management is recommending shortening the time for public comment from forty-five (45) days to fourteen (14) days.  To view the request and draft resolution, click here.

On May 13, 2010, in Docket No. RR09-7-000, NERC filed a motion requesting that FERC Staff issue a preliminary assessment in response to NERC’s Three-Year Electric Reliability Organization Performance Assessment Report submitted on July 20, 2009 in accordance with FERC regulations.  In its motion, NERC stated that a preliminary assessment “will provide the opportunity for interested parties to weigh in on the preliminary conclusions and recommendations . . . and . . . may avoid the prospect of protracted rehearing proceedings and possible litigation over issues that might better be resolved with an opportunity for evaluations and discussion prior to final decisions being made.”  NERC also stated that a preliminary assessment “will afford all interested persons, including ERO governmental authorities, state regulators, interested federal agencies, the industry, customers and other stakeholders, an opportunity to provide valuable input that will aid the Commission in developing a complete record, prior to issuing a determination on the performance of the ERO” in meeting its Section 215 obligations. To view NERC's motion, click here.

On May 13, 2010, FERC issued an order granting rehearing of its March 18, 2010 Order whereby it had established a six-month compliance deadline for NERC to submit modifications to Reliability Standard BAL-003-0 in accordance with the Commission’s directive in Order 693.  FERC states that it is not substantively addressing the requests for rehearing, but rather granting rehearing for the purpose of deferring the six-month deadline established in the March 18 Order, and convening a technical conference to discuss the various issues raised in the requests for rehearing.  The Order also directs NERC to file with the Commission a proposed schedule (with firm deadlines) for completing studies necessary to respond to the Commission’s Order 693 directives regarding BAL-003-0 within 30 days after the technical conference.  To view the order, click here.

On May 11-12, 2010, the NERC Board of Trustees (BOT) and Member Representatives Committee (MRC) meetings were held in Baltimore, MD. 

To view the presentations and agenda items for the BOT meeting, click here.

To view the presentations and agenda items for the MRC meeting, click here.

NERC has made available the complete agenda package for the May 11, 2010 NERC Board of Trustees Compliance Committee (BOTCC) meeting.  To view the NERC BOTCC agenda, click here.

On May 10, 2010, in Docket Nos. RM06-16-000 and RM10-6-000, NERC submitted comments on the interpretation of Transmission Planning and Reliability Standards TPL-002-0.  In its NOPR, FERC proposed to interpret Requirement R1.3.10 of the TPL-002-0 to require “‘that planners study, in their system assessments, the non-operation of primary protection systems in order to ascertain whether an how reliance on the as-designed backup or redundant protection systems affects reliability.’”  In its comments, NERC argues that FERC’s alternative proposal “improperly expands the conditions that must be studied and addressed under TPL-002-1” thereby adding “new requirements” and exceeding the scope of its authority under Section 215 of the Federal Power Act. It also argues that the proposed interpretation is “inconsistent with the purpose and text” of Reliability Standard TPL-002 as previously approved by the Commission.  To read NERC’s comments, click here.

On May 10, 2010 in Docket No. RM09-18-000, NERC provided comments on the March 18, 2010 NOPR on the Revision to the definition of Bulk Electric System.  In its comments, NERC supported the Commission’s objectives of common understanding and a consistent application of the BES across the regions, and that variations should be justified on the basis of reliability.  However, NERC objected to the Commission’s proposal for the Commission to make unilateral decisions with respect to the definition of BES, rather than addressing those issues through the NERC Reliability Standards Development Process. To read NERC’s comments, click here.

On May 7, 2010, NERC released its 2009 Annual Report.  In the report, NERC highlights many accomplishments of its third full year as the entity responsible for ensuring the reliability of the bulk power system.  The report covers each of NERC's program areas: Standards, Compliance, Situation Awareness, Critical Infrastructure Protection, Assessments, and Event Analysis and outlines its transition in leadership and focus with a new vision for 2010. To view the report, click here.

On May 6, 2010, FERC issued a letter order approving: (i) a new regional delegation agreement between NERC and Texas Reliability Entity, Inc. (“New Texas RE”), thereby approving the delegation of authority to New Texas RE as the Regional Entity for the ERCOT region, (ii) termination of the existing delegation agreement between NERC and Texas Regional Entity (“Original Texas RE”), and (iii) the amended 2010 Business Plan and Budget, including the additional 2010 assessment of $2,483,964 in costs arising from the formation of New Texas RE. To see the letter order, click here.

On May 5, 2010, NERC Compliance Operations announced that it is going to begin issuing Compliance Application Notices (CANs) as part of its work "with Regional Entities to improve consistency, transparency, and efficiency of compliance processes and expectations, and to promote a culture of compliance excellence through education, transparency, and information."  

 

CANs "are not intended to establish new requirements under NERC’s Reliability Standards or to modify the requirements in any existing NERC Reliability Standards."  Instead, they are intended "to provide a timely response to queries and issues that arise from the field and industry, and aim to assist Compliance Operations and Regional Entities with the performance of compliance activities and registered entities with compliance regarding NERC Reliability Standards, by:

• Providing transparency;

• Improving consistency;

• Identifying trends;

• Educating and engendering a culture of compliance; and

• Encouraging effective self-policing and correction

 

Compliance will cdontinue to be determined based on language in the NERC Reliability Standards as they may be amended from time to time, and in the event of any inconsistency, the language of the NERC Reliability Standard will control. To view NERC CANs that have been issued, click here.

On May 3, 2010, in Docket No. NP10-106, NERC submitted an NOP concerning self-reported violations by Sacramento Municipal Utility District (SMUD) of Reliability Standards TOP-002-2, Requirement R16; BAL-002-0, Requirement R4; IRO-004-1, Requirement R4; and, IRO-STD-006-0 WR1. To view the SMUD NOP, click here.

On April 28, 2010, NERC submitted comments in Docket No. RM09-13-000 in response to FERC’s NOPR for the Time Error Correction Reliability Standard BAL-004-12.  In its comments, NERC expressed general concerns regarding Time Error Correction, and recommended that FERC “convene a technical conference to engage in a policy discussion among all stakeholders that considers the benefit of Time Error Corrections versus the potential adverse reliability impacts of the practice.”  NERC also specifically requested that the Commission give “due weight to NERC’s technical expertise on this matter.”  To read NERC’s Comments, click here.

On April 28, 2010, NERC submitted the following notices of penalty to FERC for review:

Docket NP10-105: To view the Oregon Trail Cooperative NOP, click here.

Docket NP10-104: To view the NextEra Energy Resources NOP, click here.

Docket NP10-103: To view the Montville Power NOP, click here.

Docket NP10-102:  To view the Huntley Power NOP, click here.

Docket NP10-101: To view the Dunkirk Power NOP, click here.

Docket NP10-100: To view the Tri-State G&T – Marketing NOP, click here.  

Docket NP10-99:  To view the Wolverine Power Supply Coop. NOP, click here.

Docket NP10-98: To view the Dynegy NOP, click here.

Docket NP10-97: To view the Glacier Electric Cooperative NOP, click here.

Docket NP10-96: To view the PG&E NOP, click here.

Docket NP10-95: To view the Tri-State G&T – Marketing NOP, click here.

Docket NP10-94: To view the Florida Keys Electric Corporation NOP, click here.

At the Energy Bar Association’s Reliability Primer for Lawyers and Energy Professionals, Former FERC Chairman Joseph T. Kelliher (who is now Executive Vice-President of Federal Regulatory Affairs at FPL Group, Inc.) delivered the keynote address regarding reliability regulation, providing the unique perspective “of a former reliability regulator and the perspective of someone who now is on the receiving end of reliability regulation.”  Mr. Kelliher discussed FERC’s and NERC’s roles in reliability regulation, the FERC-NERC relationship, and current challenges in reliability regulation.  In concluding, Kelliher briefly addressed FERC’s proposed penalty guidelines, remarking that FERC “went beyond the pale in its March orders by seeking to assert control over the substance of reliability standards.”  To read Mr. Kelliher’s speech, click here.