NERC Webinar Series

Session I: NERC 101

January 31, 2008

Agenda
Background & History
About Reliability Standards
About Enforcement & Compliance
Beyond Standards & Compliance:
NERC Programs

About NERC
The electric industrys self-regulatory
organization for reliability
Balances the interests of all stakeholders
Represents industry consensus
Independently acts in the best interest of reliability

The regulators electric reliability organization

International charter lending government support and
oversight to NERC activities, ensuring that the best
interests of society-at-large are represented

About NERC: Mission

To ensure the reliability of the North American

bulk power system
Develop & enforce reliability standards
Assess current and future reliability
Analyze system events & recommend improved
practices
Encourage active participation by all stakeholders
Pursue mandatory standards in all areas of the
interconnection

About NERC: Reliability History

1965

Northeast Blackout I

1968

NERC formed

1978

National Energy Act NERC Expands

1980

NERC Merges with NAPSIC

1987

National Electric Security Committee

1992

Energy Policy Act - NERC action plan for the future

1996

FERC orders on open access put NERC on a course to become a selfregulatory reliability organization

1997

NERC/DOE Blue Ribbon Panel suggests mandatory standards

2002

First reliability standards become mandatory and enforceable in Ontario

2003

Northeast Blackout II

2005

Energy Policy Act creates Electric Reliability Organization

2006

NERC applies & becomes Electric Reliability Organization

2007

First reliability standards become mandatory & enforceable in US

About NERC: Program Areas

NERC Management

Standards

Manage & facilitate

standards drafting
process
Develop standards
work plan

Compliance

Lead compliance
audits
Document violations,
prepare for
regulatory review
Manage NERCs
compliance registry

Situation
Awareness &
Infrastructure
Security

Reliability
Assessments &
Performance
Analysis

Manage the ESISAC real-time

operations database

Compile and write

seasonal and longterm reliability
assessments

Technical expertise
on cyber and critical
infrastructure issues

Analyze system
events, provide
recommendations
Measure leading
indicators and
effects on reliability
Keep abreast of
trends influencing
reliability

Reliability
Readiness

Training,
Education &
Operator
Certification

Recruit and manage

volunteer readiness
evaluation teams

Certification
programs for system
operators

Publish examples of
excellence in
reliability

Continuing education
programs
Improve industry
training for grid
professionals

About NERC: Committees

Board of Trustees

Members Representatives Committee

NERC Management

Standards

Standards
Committee

Compliance

Compliance &
Certification
Committee

Situation
Awareness &
Infrastructure
Security

Reliability
Assessments &
Performance
Analysis

Reliability
Readiness

Planning & Operating Committees

NERC Staff Representative

Critical Infrastructure Protection Committee

NERC Staff Representative

Training,
Education &
Operator
Certification
Personnel
Certification
Governance
Committee

NERC Staff Rep.

NERC Staff Rep.

NERC Staff Rep.

Sub-committees &
Working Groups

Sub-committees &
Working Groups

Sub-committees &
Working Groups

Sub-committees &
Working Groups

Sub-committees &
Working Groups

Sub-committees &
Working Groups

NERC Staff Rep.

NERC Staff Rep.

NERC Staff Rep.

NERC Staff Rep.

NERC Staff Rep.

NERC Staff Rep.

About NERC: Regional Entities (RE)

Florida Reliability Coordinating Council

Midwest Reliability Organization
Northeast Power Coordinating Council
ReliabilityFirst Corporation
SERC Reliability Corporation
Southwest Power Pool, Inc. (Regional Entity)
Texas Regional Entity
Western Electricity Coordinating Council

About NERC: Regional Entities

Delegated functions
Compliance
Regional standards
Organization registration
Reliability assessment
Reliability readiness and improvement

Regional consistency is key

Transparency
Predictability
Uniform outcomes

About NERC: Vitals

Independent non-profit corporation
headquartered in Princeton, NJ
Second office in Washington, DC
NERC has 86 employees as of January 1, 2008
Employees include engineers, auditors, system
operators, analysts, trainers, accountants, policy
specialists, lawyers, and administrative
assistants

NERC Reliability Standards

About reliability standards
Development process
Active standards
Upcoming work

About Reliability Standards

Focus on bulk power system reliability
No market practices
Minimum distribution system requirements

Results-oriented
Avoid prescribing practices allow entities to
determine their own best way to meet a standard
given their individual circumstances
Encourage innovation in compliance
Specific & measurable requirements

Starting point for industry implementation

Final standard
goes through
balloting &
approvals
process.

Board of Trustees Approval

SAR brought
to the
Standards
Committee
for approval
and standard
drafting team
appointed.
Standard
drafted by
team.

Industry Comment

Request to
develop a
standard is
received and
brought to the
Standards
Committee
for approval.
SAR drafting
team
appointed.
SAR written
by drafting
team.

Industry Comment

Standards Development Process

Regulatory
Approved
Standard

Standards Development Process

Open & Transparent
Process

NERC guides and

facilitates the
process

SAR brought
to the
Standards
Committee
for approval
and standard
drafting team
appointed.
Standard
drafted by
team.

Final standard
goes through
balloting &
approvals
process.

Board of Trustees Approval

Industry Comment

Request to
Standards
developCommittee
a
is nominated
standard isand
elected
by the
received
and
industry.
brought to the
Standards
Committee
Every
comment
for approval.
received
during the
SAR drafting
commenting
phase
team
is considered
and
appointed.
responded
to.
SAR drafted.

Industry Comment

ANSI Accredited
Standards Process

Regulatory
Approved
Standard

Development Process: Approval

Initial ballot and recirculation ballot
Recirculation required if one or more negative votes
with comments is submitted on first ballot

Quorum is 75% of ballot pool

Stakeholder approval requires > 2/3 affirmative vote
using weighted segment voting
Board adoption
Regulatory approval

Active Standards
Prefix

Name

BAL

Resource & Demand Balancing

COM

Communications

CIP

Critical Infrastructure Protection

EOP

Emergency Preparedness & Operations

FAC

Facilities Design, Connections, & Maintenance

INT

Interchange Scheduling & Coordination

IRO

Interconnection Reliability Operations & Coordination

MOD

Modeling, Data, & Analysis

NUC

Nuclear

PER

Personnel, Performance, Training, & Qualifications

PRC

Protection & Control

TOP

Transmission Operations

TPL

Transmission Planning

VAR

Voltage & Reactive

All standards publicly available on www.nerc.com

Standards Work Plan

Continually improve standards
Identifies how standards will be addressed in the
next three years
Timeline and details for consideration
All standards are reviewed every five years

Compliance
About Compliance
Compliance Process
About Enforcement

About Compliance
Focus on improving bulk power system reliability
Fair, consistent approach
Prompt reporting

Protects confidentiality of involved parties

Single, defined appeals process whereby
resolution can be reached
Reports to governmental authorities

Compliance Process

NERC or
Region
becomes
aware of
potential
violation

Investigation

CONFIDENTIAL

Formal
notification,
negotiation, &
appeals
processes

Confirmed
Violation

About Enforcement
Violating entities can be subject to:
Monetary up to $1 million per day per violation
Order a change in practice to mitigate the violation

Comparable to levels of threat to reliability

Promotes compliance with standards
Rewards self-reporting & voluntary corrective actions
Flexible to adapt to all relevant facts surrounding the
violation
Consistent application of guidelines
Meets FERC policy statement

Beyond Standards & Compliance

Grid monitoring & analysis
Assessments
Benchmarking
Availability databases
Reliability readiness
Training & certification

Monitoring the Grid: ESISAC

Near real-time reporting
No real-time operations or oversight

Overall health and situational status of grid

Daily projections
Outages
Near misses
Critical infrastructure

Report to Reliability Coordinators, FERC, and

government groups

Event Analysis
Analyze & investigate large system disturbances
Determine what happened
Identify what (if anything) went wrong
Notices may be sent to industry if problems may be
systemic
Share lessons-learned with industry and regulators
Changes may be proposed for the standards
Standards violations are processed through the
compliance program

Event Analysis: Alerts

Advisories, recommendations, and
requests for essential actions
Issued to relevant industry sectors
when an issue arises that causes or
contributes to an event under analysis
Advises the industry to evaluate system
status and take action to correct issues
affecting reliability

Reliability Assessments
Long-Term Reliability Assessments
10 year projections assessing electricity supply and
demand
Evaluates transmission system adequacy
Discusses key issues and trends

Summer and Winter Assessments

Assess the adequacy of electricity supplies in the
United States and Canada for the upcoming
summer and winter peak demand periods.

Special Assessments
Conducted on a regional, interregional, or
interconnection-wide basis as needed

Assessments: 2007 Long-Term

Key Findings
Capacity margins still inadequate
Integration of wind, solar, & nuclear
resources
High dependence on natural gas in U.S.
requires active mitigation
Transmission situation improves, but more
still required
Aging workforce still a growing challenge

About Benchmarking
Identify and track key reliability
indicators as a means of benchmarking
reliability performance and measuring
reliability improvements.
Assess available metrics, develop
guidelines for acceptable metrics
Maintain a performance metrics
dashboard on the NERC Web site
Develop appropriate reliability
performance benchmarks

Generating Availability Data System

Database for generating plant equipment
performance worldwide
In operation since 1982
Analyzes reliability and availability
Supports
Manufacturers
Utilities
Industry associations

Transmission Availability Data System

Database for transmission system equipment
performance in North America
Began operation in 2007
Analyzes reliability and availability of lines,
transformers, and AC/DC converters

About Reliability Readiness

Promote operational excellence in reliability
readiness, capabilities, and performance
Evaluate operations and processes
Highlight and share examples of excellence and
positive observations
Identify areas for improvement
Lend assistance to entities when requested

Readiness Areas of Evaluation

Public

Culture

Operations

Operational Planning

Computer and Communications Maintenance

Training

Confidential

Physical & Cyber Security

Control Facilities & Emergency Plans

Readiness & Compliance Differences

Compliance Audits

Readiness Evaluations

Views past performance

Forward-looking at capabilities

Top-down enforcement

Peer-based evaluations

Measures compliance with standards

Judges effectiveness of practices

Quantitative
(Compliant or non-compliant)

Qualitative
(How good or bad)

Narrow scope, limited to standards

Broad scope beyond standards

Sanctions for violations

Recommendations to improve
business practices

System Operator Certification

Exam verifies knowledge of electric system operating
principles and NERC Standards
Four exams based on system operator function
Reliability Coordinator
Balancing Authority/Interchange Authority
Transmission Operator
Balancing /Interchange/Transmission

Pass exam once, then maintain through continuing

education every three years

Continuing Education Program

Approves courses and activities for System Operators to
meet NERCs continuing education requirements for
operator certification
Courses can be used to fill continuing education requirements for
maintenance of other professional certifications such as
professional engineers & accountants.

Program developed to meet International Association for

Continuing Education Training criteria

Training & Education

Develops industry-wide education and learning
opportunities
Trains NERC & regional audit team volunteers
Webinar series

Adds value from independent reliability

perspective
Not designed to compete with other training firms or
duplicate courses

Conclusion
To ensure the reliability of the North American
bulk power system
NERC is the electric industrys self-regulatory organization
tasked with developing & enforcing reliability standards
NERCs reliability standards are developed through an
open, ANSI-accredited process, taking all stakeholder
interests into account
NERCs compliance process is focused on improving
reliability
NERCs many other programs create value and provide
essential support to improving reliability

Thank you

Question & Answer Session

Contact:
Kelly Ziegler
kelly.ziegler@nerc.net
609.452.8060