posted on Tuesday, March 27, 2007 9:33 AM by Tracy Davis

FERC Signs Off on 83 Mandatory Reliability Rules

Putting into place for the first time mandatory standards to ensure reliability in the nation's electric transmission system, on March 16, FERC issued an order adopting 83 out of 107 reliability standards that were proposed by the North American Electric Reliability Corporation (NERC) last year.  Certified as the Electric Reliability Organization (ERO) contemplated in the Energy Policy Act of 2005, NERC will play a primary role in developing, monitoring, and enforcing the reliability standards.  Most of the standards take effect this summer; FERC rejected calls by some industry participants for a phase-in or transition period

FERC directed substantial changes to many of the standards, but approved them as mandatory and enforceable nonetheless.  NERC can iron out details through its stakeholder process, FERC advised.  Those standards that were not adopted were remanded back to NERC for further development or for NERC to provide additional information.  FERC declined to adopt a blanket waiver from the standards for small entities; rather, FERC approved the continued use of the existing NERC compliance registration process and Functional Model to register entities who must comply with the standards.  Under this process, NERC will register:  distribution providers or load-serving entities with a peak load of 25 MW or greater and are directly connected to the bulk electric system or that are responsible entities as part of a required demand management (load-shedding) program; individual generating units that are 20 megavolt-amperes (MVA) or greater; generating plants with an aggregate MVA above 75; and transmission owners and operators with 100 kV or higher facilities.

In a separate notice of proposed rulemaking issued the same day, FERC proposed to extend the reliability standards to Qualifying Facilities (QF) above 20 MW, despite the fact that QFs are exempt from most FERC regulation.  Comments in this proceeding are due April 17, 2007.