News 
2005
| Statement: November 18, 2005 |  View Printable PDF Version |
Technical conference on North American and regional reliability
standards
"Today, the Commission holds the first of two technical conferences
focusing on current and future procedures for establishment and
approval of electric reliability standards. Discussions at these
conferences will focus on (1) the process that the Electric Reliability
Organization (ERO) will use in proposing new mandatory reliability
standards, (2) the role of regional entities in that process,
and (3) how existing reliability standards can be improved over
time. The second conference will be held on December 9, and will
continue exploring related issues and stakeholders' views to assure
successful implementation of the Energy Policy Act of 2005.
"These conferences come at a particularly important time.
On August 8, 2005, President Bush signed the Energy Policy Act
into law. Perhaps the most important responsibility given the
Commission by the Energy Policy Act is the responsibility of safeguarding
the reliability of the bulk power system, by certifying an ERO,
carefully reviewing and approving mandatory reliability standards,
and ensuring these standards are properly enforced. The Commission
is committed to faithfully execute these new responsibilities.
"I just want to be clear that the Energy Policy Act does
not provide for a "one size fits all" approach towards reliability
standards. That much is clear from the plain words and structure
of the law. Under the Energy Policy Act, regional entities will
propose standards to the national reliability organization charged
with standards development, the Electric Reliability Organization,
which can then, in turn, propose to the Commission those regional
standards it has approved. Congress would not have provided for
consideration of regional standards if it had intended a "one
size fits all" approach.
"We had both North American and regional reliability standards
before enactment of the Energy Policy Act. And, I expect that
we will continue to have both North American and regional reliability
standards after issuance of the Commission's final rule.
"Under the law, the Commission must approve any reliability
standard before it becomes enforceable. We are operating under
the expectation that it is the Version 0 standards that will be
proposed to the Commission for its consideration and review. In
the proposed rule, the Commission interpreted the Energy Policy
Act to permit the ERO applicant or applicants to propose reliability
standards in their certification application. We did that in order
to accelerate establishment of enforceable reliability standards.
"In anticipation of the filing of Version 0 standards, the
Commission has been conducting a constructive review of existing
reliability standards. We have been examining the existing Version
0 standards as well as the relationship of Version 0 standards
to regional standards.
"That process has been very instructive. We have learned
that a significant portion of NERC's existing standards - about
25 percent - are in the form of obligations for the regional reliability
organization to define regional criteria and procedures necessary
to implement the NERC reliability standard. This is particularly
true in certain subject areas, such as system planning. In addition,
some regional standards have been incorporated into NERC reliability
standards when necessary to address physical differences of the
interconnections or market protocols used in organized markets.
"The Commission has a legal duty under the Energy Policy
Act to assure that proposed reliability standards "provide for
reliable operation of the bulk power system." To me, that means
carefully reviewing proposed reliability standards and assuring
that they have technical support and are written so that they
are enforceable against "all users, owners, and operators of the
bulk power system," as the law provides. We will, of course, give
"due weight" to the technical expertise of the ERO and regional
entities organized on an interconnection-wide basis.
"The Commission is holding these technical conferences to
ensure we fully understand the existing reliability standards
and processes in advance of a filing of reliability standards
by an ERO applicant or applicants. Our purpose is a thorough and
expedited review of proposed reliability standards and accelerated
establishment of enforceable reliability standards.
"The Commission's goal, of course, is to faithfully execute
the law in the manner Congress intended. We are faithfully implementing
the reliability provisions of the Energy Policy Act, and moving
swiftly to meet the aggressive deadlines in the law.
"As I conclude, I want to recognize and welcome Kim Warren
from Ontario. The Commission recognizes the importance of continued
cooperation with our neighbors in Canada, as we share not only
a border but potentially an ERO as well. Good governance of the
ERO, including the approval and enforcement of clear and effective
reliability standards, will benefit both our nations.
"I look forward to hearing the views of the participants
today."
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