Original Press Release
Mandatory Compliance to Electric Reliability Standards Goes Into Effect
Press release date: June 21, 2007
As of June 18, 2007, the United States bulk power industry must comply with the eighty-three electric reliability standards approved earlier this year by the Federal Energy Regulatory Commission (FERC) and developed by the North American Electric Reliability Corporation (NERC), an American National Standards Institute (ANSI) accredited standards developer. [See related article: FERC Approval of NERC Standards Heralds Nation's Transition to Enforceable System of Electric Reliability Standards]. Violators face fines of up to $1 million per day.
"The North American electricity industry has operated one of the world's most reliable electricity networks under voluntary guidelines for decades. Voluntary guidelines worked very well to a point, but they were not enough. The electricity industry is no stronger than its weakest link, and a mistake by one entity can affect customers hundreds of miles away... Everyone must follow all the rules, all the time. Mandatory standards are the next logical step toward achieving that," said NERC president and CEO Rick Sergel in a June 1 statement.
NERC, working with eight regional regulatory organizations throughout the U.S. under delegation agreements approved by FERC, will monitor compliance with the standards and impose enforcement actions when violations are identified. In addition to monetary penalties, enforcement actions include sanctions that impose limitations or restrictions on activities, as well as remedial action directives designed to correct conditions. The aim of the stringent penalties is not to punish providers but rather to ensure that the nation's power grid is reliable.
The mandatory reliability standards relate to the planning and operation of the bulk power system and cover areas such as balancing customer demand with generation supplies, emergency operations, cyber security, vegetation management and disturbance reporting. The bulk power system consists of power plants, transmission lines and substations, as well as related equipment and controls that generate and move electricity to points from which local electric companies distribute power to customers. More than 1,400 such entities are affected and must comply with the NERC reliability standards.