FERC Issues Order Directing NERC to Modify Rules of Procedure

On March 18, 2010, in Docket No. RR09-6, FERC issued an order directing NERC to propose specific modifications to its Rules of Procedure to address certain inconsistencies between the Reliability Standards Development Process and NERC’s obligation as the ERO to comply with Commission directives pursuant to FPA Section 215(d)(5). Specifically, the Commission is directing such modifications be made so that the NERC ballot body cannot delay or prevent NERC’s compliance with Commission directives. Under the current Reliability Standards Development Process, if more than just one-third of the ballot body casts a negative vote for a reliability standard drafted to comply with a Commission directive, the standard will be rejected.

The Commission also notes that under the current Process, a team of industry volunteers, who may or may not agree with the Commission’s directive, would draft a modified standard in response to a FERC directive. The team may develop a new standard that is not responsive to the Commission’s directive and that might subsequently be approved by the NERC ballot body. If this were to occur, it would leave the NERC Board of Trustees with a “Hobson’s choice of either rejecting the draft Reliability Standard or approving a Standard not responsive to a Commission directive for submission to the Commission.”

NERC must file proposed modifications to its Rules of Procedure by June 16, 2010. The Commission will then post the proposed modifications for public comment and issue a subsequent order on the modifications. The Commission also asserts that NERC has not yet complied with the Order No. 693 directives to develop modifications to FAC-008, and directs NERC to submit proposed modifications to Reliability Standard FAC-008 by June 16, 2010 to comply with the Commission’s directive in Order No. 693. To read FERC’s order, click here.