The North American Electric Reliability Council (NERC) welcomes the Federal Energy Regulatory Commission’s (FERC) release May 11 of a staff preliminary assessment of NERC’s proposed reliability standards. NERC filed 102 standards on April 4, with its application to become the electric reliability organization (ERO) under the Energy Policy Act of 2005, and asked the Commission to approve those standards to become effective Jan. 1, 2007, or thereafter.

NERC’s petition for FERC approval of its reliability standards identified a number of standards where further action on NERC’s part was necessary before the Commission could approve them, and a number of additional areas where the proposed standards could be improved over time. NERC also provided the Commission with a work plan for completing those improvements.

The preliminary staff assessment echoes many of the points that NERC included in its own evaluation of the standards and identifies additional areas for improvement in some of the standards. FERC directed NERC to file a response to the staff assessment by June 26, 2006, and invited comments from others.

“The release of the staff preliminary assessment marks the next step in the transition from voluntary to mandatory reliability standards,” said Rick Sergel, NERC president and CEO. “We look forward to working with the Commission and its staff, governmental authorities in Canada and all industry stakeholders to identify the priorities, establish a timetable for putting a solid foundation of mandatory reliability standards in place promptly and improve those standards over time.”

This increased scrutiny of NERC’s reliability standards is a natural progression as the standards, originally developed for a voluntary and cooperative set of industry relationships, are being used for a new purpose. Once approved, the standards will be legally binding and provide the basis for enforcement actions when those standards are not complied with, including the levying of financial penalties on entities who violate the standards.