News April–June 2007
News Release: May 17, 2007 | View Printable PDF Version |
Docket Nos: RR07-9-000 and RR07-10-000 |
Commission approves NERC's assignment of violation risk factors associated with approved reliability standards
The Federal Energy Regulatory Commission today approved the assignment of
over 700 Violation Risk Factors for the North American's Electric Reliability
Corporation's (NERC) Reliability Standards.
A Violation Risk Factor links the violation of a Requirement of a Reliability
Standard with its potential reliability impact on the Bulk-Power System. Violation Risk
Factors are an important part of the Electric Reliability Organization's (ERO) compliance
and enforcement program that will be used in the determination of monetary penalties for
violations of Reliability Standards.
Commission Chairman Joseph T. Kelliher said, "Next month, the nation's first set
of mandatory and enforceable reliability standards will be in place. We have taken the
first three steps necessary for this to happen - certified an ERO, approved mandatory
reliability standards and set the regional framework for compliance and enforcement.
Today, the Commission takes an important step to provide firm but fair enforcement of
reliability standards. The Commission largely accepts NERC's proposal to consider the
risk a violation of a particular requirement of the reliability standards poses to reliability
of the bulk power system when setting the penalty range NERC may impose."
In July 2006, the Commission certified NERC as the nation's ERO under section
215 of the Federal Power Act, a new provision added by the Energy Policy Act of 2005
to establish a system of mandatory, enforceable electric system Reliability Standards
under the Commission's oversight. In March 2007, the Commission approved 83
Reliability Standards while directing further improvement to 56 Reliability Standards.
Last month, the Commission accepted NERC's Regional Entity delegation agreements.
In today's action, the Commission also directed NERC to modify 28 Violation
Risk Factor assignments and directed NERC to make a compliance filing within 60 days
with an explanation for the assignment of approximately 75 Violation Risk Factors.
NERC proposes to assign a "Lower," "Medium," or "High" Violation Risk Factor
to each Requirement of each mandatory Reliability Standard. A "High" Violation Risk
Factor violation could conceivably cause or contribute to Bulk-Power System instability
or cascading failures. A "Medium" Violation Risk Factor violation, while unlikely to
cause or contribute to Bulk-Power System instability or cascading failures, could,
however, directly affect the electrical state, capability, monitoring and control of the
Bulk-Power System. A "Lower" Violation Risk Factor violation is considered
administrative in nature where a violation would not be expected to affect the reliability
of the Bulk-Power System.
The Commission employed five guidelines for evaluating the validity of each
Violation Risk Factor assignment. The first guideline assessed the Violation Risk
Factor's consistency with the conclusions of the Final Blackout Report on the August 14,
2003 blackout which affected nearly 50 million people in the United States and Canada.
(The U.S. - Canada Power System Outage Task Force Report, may be found at
http://www.ferc.gov/industries/electric/indus-act/blackout.asp). The Commission also
evaluated the Violation Risk Factors assignment for consistency within and among
Reliability Standards and consistency with NERC's definition of the Violation Risk
Factor level. Finally, the Commission also evaluated a Violation Risk Factor's treatment
of Requirements that co-mingle more than one reliability objective.
R-07-32
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