1

2

Protecting Grid Reliability

3

NERC Regions

4

NERC’s History

● Formed in 1968 as a VOLUNTARY organization to promote reliability of bulk power systems throughout North America

● Members are 10 Regional Councils

–Canadian utilities are members of three Regional Councils

● NERC sets reliability standards for the high voltage electric grids

● Standards MANDATORY but not ENFORCEABLE

5

Beginnings of Change

● Apr ‘96 – FERC Orders Open Access ● More players, more transactions: a 100-fold

increase over last 5 years● Transmission everywhere highly loaded● Economic pressure to bend reliability rules● Violations of rules going unpunished● Reliability of grids at risk

6

Self-Regulated Reliability Org.

● Sufficient authority to enforce compliance.● Recognition needed as a self-regulatory

organization (SRO) by government bodies in Canada, the U.S. and Mexico.

● Authority to collect funds to support its SRO function.

● Use NASD as a model.

7

Mission and Functions

● Develop and enforce reliability standards for high voltage grids in North America

● Assess and report on supply adequacy● International scope and perspective● Only organization with this responsibility

for North America

8

Regional Relationships

● Regional organizations essential part of implementation and enforcement function.

● Strong positive working relations and shared responsibilities with regional organizations, including evolving ISOs and RTOs.

● Delegation agreements between NAERO and each regional organization.

9

Industry Participation & Excellence

● Voluntary participation by technical personnel is indispensable.

● Encourage voluntary efforts of the industry’s best technical experts.

● Ensure “balanced” representation on all NERC committees.

● Government regulators and other agencies encouraged to participate.

10

Public Participation

● Transparency, openness and accessibility essential to success.

● Maximize participation among members and the public.

● Board and Committee meetings open to the public.

● Minutes of all meetings made public.● Independent review every 5 years.

11

Operating Committee

● Develop Operating Standards Ensure security or short-term

reliability of interconnected transmission grids

7:00 7:20 7:40 8:00

100 MW

12

NERC

orth Am ericanlectr ice liab ilityouncil

NERCOperating

Manual

www.nerc.com/~/oc/opermanl.html

AB C

D

E

F

1

2

Non FirmWeekly

Non FirmMonthly

Non FirmHourly

Non FirmNetwork

Contract path

13

Planning Committee

● Develop Planning Standards Ensure future reliability of

interconnected transmission grids● Assess and report on long-term

adequacy

14

Compliance Enforcement Program

● Separate and independent from Standing Committees

● Three key functions: Compliance review process Enforcement process

(including a penalty structure) System Operator Certification Process

15

NERC Organization

● Board of Trustees Nine independent

members NERC President

● Standing Committees Broad Sector

representation Subcommittees Working Groups Task Forces

OperatingCommitteeOperatingCommittee

PlanningCommittee

CIPCommittee

Board of Trustees

Stakeholders Staff

16

Communications Network

3 RC14 RC

1 RC

17

August 13 – 8:29 PM~ 20 hours BEFORE

August 14 – 8:14 PM~ 4 hours AFTER

Defense Meteorological Satellite Program Images,

courtesy of the United States Air Force Weather Agency

Ottawa

Detroit

Toronto

Montreal

Boston

New York City& Long Island

Cleveland

Buffalo

Columbus

Montreal

Boston

New York City& Long Island

BLACKOUT 2003 – August 14 ~ 4:15 PM EDT

18

Questions ???

19

20

21

Legislation Needed in U.S.

● FERC jurisdiction over reliability in U.S.● Designate new ERO to set and enforce

reliability standards in the U.S.● Approve delegation to regional entities● Define role for States● Coordination with RTOs● Coordination with Canada and Mexico● Antitrust protection

22

International Arrangements

● Industry SRO develops standards to apply throughout North America

● Government role to approve standards, hear appeals

● International framework to assure coordination between U.S., Canada, and Mexico

● Avoid dominance by FERC

23

The Right Path = NAERO● Legislation (U.S.) to provide grant of

authority● Similar grants from Canadian

governments● Industry SRO with an independent board

can do the best job● Emphasis on openness and due process● Everyone plays by the same rules● Send best people to do their best job

24

Issues Ahead…

● Adequacy and Performance● Coordination & Control Activities● Infrastructure Security● Monitoring, Assessing, & Enforcement● Congestion Management● Data Interchange● Send best people to do their best job