Industry supports proposed NERC initiative, but has concerns
Originally published February 6, 2013
Electric industry trade associations expressed strong support for the North American Electric Reliability Corp.’s "Reliability Assurance Initiative" (RAI) in Jan. 30 joint comments to NERC's board. The initiative calls for incorporating risk management into compliance, monitoring and enforcement activities and linking it to the standards development process through a feedback loop. APPA joined in the comments along with the Edison Electric Institute, Electric Power Supply Association, ELCON, the Large Public Power Council, National Rural Electric Cooperative Association and Transmission Access Policy Study Group.
However, the industry has several pivotal concerns that need to be addressed for the initiative to be successful, APPA and the others said. One concern is that NERC’s focus on the RAI program could interfere with maturation of the "find, fix and track" (FFT) program for streamlining the handling of minor violations of reliability standards, they said.
The associations strongly encouraged NERC to move ahead with the second phase of the find, fix and track program where compliance field staff, auditors and investigators could determine that a violation is eligible for the FFT program. "With the regulatory hurdles for the second phase of the FFT program having been cleared, it would be a misjudgment to forego the immediate opportunity for further progress," APPA and the others said. Success with the FFT program could smooth the way for the Reliability Assurance Initiative, which "is undeniably complicated and may require some additional regulatory approval or acquiescence."
The industry associations also voiced concern about the lack of clear direction governing the responsibilities under the RAI program of the regional reliability entities and those of owners or operators of bulk power system facilities (registered entities). Under the RAI program, compliance oversight will be scaled to a registered entity’s risk profile, which "will be ascertained as a function of the strength of each entity's compliance program (including internal controls) and physical circumstances," the associations said. Central questions regarding how registered entities will address these new criteria have yet to be answered, they said.
NERC needs a realistic plan for developing and implementing the program, including for filing an RAI proposal with the Federal Energy Regulatory Commission, the associations said. They stressed the importance of not rushing a filing with FERC and encouraged NERC to consider moving ahead in phases, "perhaps through the consideration and analysis of pilot programs undertaken voluntarily, while permanent protocols are ironed out."
Above all, NERC should place a priority on letting the compliance and enforcement program settle into a durable and repeatable set of processes and activities, they said. There is a limit to the ability of the industry and FERC "to process endless changes in these programs," APPA and the others said. "NERC is nearing the point where it must get these programs right, and give the industry time to settle into managing a mature program."
Each of the regional reliability entities needs to demonstrate a commitment to implement both the FFT and RAI programs in a timely and consistent manner, the industry associations said. "As the FFT program has developed, there has been concern that not all the regional entities are equally committed to its full implementation," they told NERC.
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