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FERC Approval of NERC Standards Heralds Nation’s Transition to Enforceable System of Electric Reliability Standards

New York, Mar 27, 2007

In a landmark step toward improving the nation’s power grid, the Federal Energy Regulatory Commission (FERC) recently approved eighty-three reliability standards that were developed and recommended by the North American Electric Reliability Corporation (NERC). An accredited standards developer of the American National Standards Institute (ANSI), NERC is certified by FERC as the Electric Reliability Organization (ERO) for the United States [See related article: NERC Granted Certification to Improve Reliability of Nation’s Power Grid].

The move heralds the nation’s transition to a mandatory system of electric reliability standards, making adherence to the eighty-three standards compulsory and enforceable in the United States.

“The bulk power industry has had reliability standards for decades, but they were voluntary in nature,” explained NERC President and CEO Rick Sergel. “Having mandatory, enforceable reliability standards is a huge step in improving the reliability of the bulk power system.”

“With our action today, the U.S. is better prepared to meet reliability challenges this summer,” said FERC chairman Joseph T. Kelliher in a March 15 statement.

The approved standards will apply to users, owners and operators of the bulk power system designated by NERC through its compliance registry procedures. Both monetary and non-monetary penalties may be imposed for noncompliance. While the approved standards are immediately enforceable, FERC has directed NERC to focus resources on the most serious violations of the standards during an initial period through December 31, 2007. This focus will allow NERC to ensure that the compliance monitoring and enforcement processes work as intended and that all entities have time to implement the new regulations.

Although the standards have been approved, FERC has identified improvements to be made to 58 of the 83 standards. Primarily, these improvements address recommendations presented in the U.S.-Canada Power System Outage Task Force’s final report on the August 2003 Northeast blackout, which affected an estimated 50 million people in the U.S. and Canada. NERC is including the actions needed for these improvements in its standards work plan and expects to file amended standards in the coming months.

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