The following is an excerpt from Ice Miller's Pathways to Success for Utilities Guide which provides insights on a variety of topics potentially impacting utility service providers.
The Federal Energy Regulatory Commission's (FERC) action approves the implementation and continued development of the RAI proposed by the North American Electric Reliability Corporation (NERC), subject to certain conditions. FERC found that NERC’s overall goal to focus on higher-risk issues that matter more to reliability is reasonable, however it wants to ensure that NERC implements RAI in a reasonable, transparent manner. In order to do so, FERC directed NERC to revise its rules of procedure to include the RAI concepts and programs into its compliance monitoring and enforcement program. In its 90-day compliance filing, NERC was directed to provide details on the RAI program’s oversight processes and how it intends to measure the success of this riskbased approach, including the types of data-driven metrics it will track as the program develops. FERC also directed NERC to release an annual report providing an update on NERC’s oversight of the RAI program and the program’s performance metrics.
Compliance Exemption Disclosures – Requirements for Utilities
There was disagreement among the commenters on the need to publicly disclose the compliance exceptions. FERC directed NERC to publicly post compliance exceptions in order to educate the industry and provide additional oversight. In addition, FERC ordered changes on the qualifications for the self-logging program, the treatment of compliance exceptions in an entity’s compliance history and finality of the compliance exceptions. For instance, FERC must formally review an entity’s controls before granting the flexibility to self-log noncompliance. While FERC concurred with NERC that compliance exceptions not be included in a registered entity’s compliance history for penalty purposes, it detailed specific scenarios where a history of compliance exceptions would be relevant in determining a penalty for a later violation.
As NERC moves to a risk-based approach, monitoring and enforcement compliance will be impacted. During this transition, it is important to remain up to date on how these changes will impact you and your utility operations.