NERC’s members are ten Regional Reliability Councils that encompass virtually all of the electric systems in the continental United States, Canada, and the northern portion of Baja California Norte, Mexico. The members of these Regional Councils come from all segments of the electric industry - investor-owned, federal, rural electric cooperatives, state/municipal and provincial utilities, independent power producers, and power marketers.
Since 1968, NERC has relied on voluntary efforts and “peer pressure” to ensure compliance with its standards. This voluntary arrangement is no longer adequate. The users and operators of the electric systems who used to cooperate voluntarily on reliability matters are now competitors without the same incentives to cooperate with each other or comply with voluntary reliability standards. Little or no effective recourse exists today under the current voluntary model to correct such behavior – not a single bulk electric system reliability standard can be enforced effectively today by NERC or the Federal Energy Regulatory Commission (FERC).
To ensure the continued reliability of the interconnected bulk electric systems throughout North America in the face of these changes, reliability standards must be made mandatory and enforceable, and fairly applied to all participants in the electricity market. To meet this need, NERC and a broad coalition of industry organizations have proposed legislation that would authorize the creation of a single, industry-based self-regulatory reliability organization to develop and enforce reliability standards with FERC oversight in the United States to ensure that it operates effectively and fairly. The proposal follows the mode l of the Securities and Exchange Commission in its oversight of the securities industry self-regulatory organizations (the stock exchanges and the National Association of Securities Dealers). As the electric industry evolves toward full competition, the organization will examine traditional reliability planning practices and policies to ensure that they are still applicable and that they continue to result in reliable electric systems. Legislation that would authorize an SRO is currently pending in the U.S. Congress.
About 10,100 new circuit miles of transmission facilities (230 kV and higher) are planned for construction throughout North America over the next ten years; the majority of these additions are planned for the first five years, reflecting uncertainty in long-term planning. This amount represents a 5% increase in total installed circuit miles (230 kV and higher) over the ten-year period; most of these additions are intended to address local transmission concerns or to connect proposed new generators to the transmission grid and will not have a significant impact on its capability to transfer electricity over long distances. This table (see above) does not include circuit upgrades or reconductoring of existing lines.
Recently, merchant transmission developers have entered the business of constructing new transmission facilities. Several new transmission lines are being planned by merchant developers. The entry of these new players may result in construction of new transmission beyond that currently planned; however, these new players will face the same hurdles to new construction: public opposition to siting the facility, uncertainty as to how to allocate the costs and benefits of the new facilities, and other regulatory uncertainties. A number of the proposed merchant transmission lines are submarine DC cables, which may enable them to circumvent many siting issues. Additionally, the flow of electricity on DC lines is controllable and predictable, and the benefits of such facilities are easily identified and assignable. Other novel approaches to financing and constructing new transmission are being pursued, such as the planned upgrade to the 500 kV transmission Path 15 in California.
