Download - NERC Compliance Program Overview
NERC Compliance Program Overview
FRCC 2007 Compliance Workshop
April 4 and 11, 2007
U.S. Energy Policy Act of 2005
Reliability Legislation● One industry self-regulatory ERO● FERC oversight
Delegates authority to set and enforce mandatory standards to ERO
ERO delegates authority to regional entities
● Standards apply to all owners, operators, and users of bulk power system
● Independent governance and Compliance Program
Electric Reliability Organization Overview
United StatesFederal Energy
Regulatory Commission
MexicoComision Reguladora
de Energia
Canada NEB, Alberta, British
Columbia, Manitoba, Ontario, New Brunswick, Nova Scotia, Quebec, and Saskatchewan
Electric ReliabilityOrganization
RegionalEntities
Other ERO Members
Other ERO Members Bulk Power System
Owners, Operators, Users
Bulk Power System Owners, Operators, Users
ReliabilityStandards
ComplianceEnforcement
Reliability Assessment
Government Oversight
ERO Implementation● Aug. 2005: Energy Policy Act● Feb. 2006: FERC Implementing Rule● April 2006: NERC ERO Application Filing
NERC Standards Filing● July 2006: ERO Certification Order● Oct. 2006: NERC Compliance Filing
FERC Standards NOPRBudget Approval Order
● Nov. 2006 Uniform Compliance Program FilingRegional Delegation Agreements Filed
● Jan. 2007 Standards NOPR Comments FilingsNERC Non-Governance Order
● Mar. 2007 Order on StandardsResponse to January 18 FERC Order
● Apr. 2007 Expected Order on Compliance Programand Delegation Agreements
● Summer 2007 – Mandatory Compliance
Standards Establish the Basis
Elected StandardsCommittee
StandardsRequestors
StandardsProcessManager
SAR & StandardDrafting Teams
BallotPools
Established by the IndustryANSI-accredited process
FERC Standards Final Rule
● Recent rule adopted 83 standards for enforcement in the U.S. by June 2007
● Of those, direct improvements to 58 through the standards process
● Hold 24 as pending further information Regional ‘fill-in-the-blank’ standards Expect compliance as good utility practice
● Focus ERO and RE resources on most serious violations through December 31, 2007
Regional Entities
Regional Delegation Agreements
● Delegated functions Compliance Standards Organization registration Reliability assessment Reliability readiness and improvement
● Regional consistency is key Transparency Predictability Uniform outcomes
ERO Program Areas
● Standards● Compliance● Reliability Performance● Reliability Readiness
and Improvement● Training and Education● Situation Awareness &
Infrastructure Security
● Members Forums
Funding
● Funding for ERO and regional delegated functions allocated to load-serving entities Bulk power system users Based on Net Energy for
Load (NEL)● ERO will fund regions for
delegated functions● Penalties offset costs
Funded regardless of penalty collections
Organization Registration and Compliance
Organization Registration
Who Must Comply?● Any entity responsible for any part
of bulk power system reliability Historically defined as control areas
and reliability coordinators
● Functional entities Aligns reliability
requirements with functional unbundling
Owners, Operators, and Users
● Energy Policy Act: All users, owners, and
operators of the bulk-power system shall comply with reliability standards
● FERC Rule All entities subject to the
Commission’s reliability jurisdiction… (users, owners, and operators of the bulk-power system) shall comply with applicable Reliability Standards …
● Who are they?
Organization Registration
● Creates a Compliance Registry Identifies owners, operators, and
users of the bulk power system Separate from funding or
membership
● Establishes scope of Compliance Monitoring Program Notice of compliance responsibility Opportunity to appeal
ERO Organization Registration
● Registration process Entities may register directly Regions or NERC may add to the
registration list Others may nominate those with
material impact for registration Entity may challenge placement in
the compliance registry
● Challenge process Entities must demonstrate they are
not a bulk power system owner, operator, or user
Initial Regional Results
RegionNumber of
Entities Total Functions
ERCOT 198 229
FRCC 100 330
MRO 74 360
NPCC 310 732
RFC 225 562
SERC 141 503
SPP 106 386
WECC 214 825
1368 3927
Initial Results by Entity Type
17
130 163
100 120 30
RCs
BAs TOPs
PAs TSPs RSGs
176 204 318
RPs TPs TOs
414
DPs
635 476 638
GOs GOPs PSEs
506
LSEs
Compliance Registration Timeline
● March 2 – Regions submit revised registration
● March 13 – NERC and regions complete review
● Late March – NERC provides notices
● April – NERC reviews and rules on objections
● May – NERC hears appeals● Standards Approval – Provide
registration information to regulators
Compliance Program Essential Features
● Strong ERO oversight of regional implementation
● Compliance program independence Including independence of staff making
compliance determinations● Monitor designated standards for all entities● Timely reporting of information and all
violations● Impose fair penalties and sanctions● Uniform compliance programs● Single process to contest finding and appeal
decision
NERC Sanction Guidelines - Influences
● FERC Policy Statement on Enforcement Issued October 20, 2005
(Docket No. PL06-1-000)● Post Legislation Steering Committee
Penalties and Sanctions Task Group● Standards Committee
Relative risk of standards - “Risk Factors”● Other self-regulatory organizations
NASD CBOE NYSE
NERC Sanction Guidelines
• Meets FERC policy statement on enforcement• Comparable to the seriousness of the violation on
BPS reliability• Promotes compliance with standards• Filed with and approved by FERC ● Used by all regions to determine penalty or
sanction● Reward
unsolicited self-reporting, quality compliance programs, voluntary corrective actions, etc.
● Punish repeat violation, evasion, inaction, unwarranted
intentional violations (e.g., economic choice), etc.● Provide flexibility to consider all relevant facts
regarding the violation by the violator
How Will Sanctioning Be Carried Out?
● Regional Entities (RE) Staff RE Staff determine and propose appropriate sanctioning
for violation Entity can contest in a regional hearing Penalties may be appealed to NERC
(and beyond to FERC and the courts…)
● Ongoing NERC review of REs’ sanctioning activities Uniformity of application & outcomes
● NERC as ERO files “Notice of Penalty” FERC accepts or adjusts penalty Effective 31 days after filing
● Remedial actions may be applied immediately to preserve reliability
2006 NERC Compliance Monitoring & Enforcement Program-
Preliminary Results
2006 Preliminary Program Results
● Compliance continues to improve2003 2004 2005 200695.3%95.9%96.3% 96.7%
2006 Compliance Enforcement Program Performance for NERC StandardsPercent Compliance by Region
99%
91%
98% 98%99%
100%
98%
95%
86%
88%
90%
92%
94%
96%
98%
100%
102%
ERCOT FRCC MRO NPCC RFC SERC SPP WECC
Region
Per
cen
t C
om
pli
ance
Most Violated NERC Standards in 2006 (confirmed and unconfirmed)
Over 2/3 of all violations involve 6 standards
● Operating Personnel Credentials (PER-003) 66 violations; mostly small entities
● Transmission Protection System Maintenance and Testing (PRC-005) 30 violations- 27 not documentation
● Consistency with Regional UFLS Programs (PRC-007) 27 violations- 20 correct amount, trip points different
● Plans for Loss of Control Center Functionality (EOP-008) 24 violations
● Operating Personnel Training (PER-002) 16 violations
● UFLS Equipment Maintenance (PRC-008) 15 violations- 11 not documentation
Compliance Trends
Operator Certification Violations (PER-003-0)
0
50
100
150
200
250
2001 2002 2003 2004 2005 2006
Nu
mb
er o
f V
iola
tio
ns
Compliance Trends
Violations of Transmission Protection System Maintenanceand Testing Standard (PRC-005)
0
5
10
15
20
25
30
35
2003 2004 2005 2006
Nu
mb
er o
f V
iola
tio
ns
Request of Regions
● Assess reliability impact to bulk power system for the aggregate of violations in close electrical and geographic areas
● Assess reliability impact to bulk power system for entities with multiple violations during the year.
Questions