The Era of the ERO Begins

Steven Brown, editor in chief

In mid-July, the Federal Energy Regulatory Commission did something that many in the power industry (this writer included) have spent years clamoring for: It certified NERC as the official “Electric Reliability Organization” for the United States and, in so doing, gave it the authority to make its reliability rules mandatory and enforceable. Some of the details are still being worked out, but, basically, as the ERO, NERC will be responsible for developing and enforcing mandatory electric reliability standards under FERC’s oversight. The standards will apply to all users, owners and operators of the bulk-power system.

All of this is in accordance with requirements set out in the Energy Policy Act of 2005, and it was a long time coming. Three years ago, in the September/October 2003 issue of Utility Automation (the issue produced just after the 2003 blackout), I wrote the following in an editorial:

“NERC, or if not NERC some other entity working in close connection with NERC and the federal energy regulatory commission, needs legal authority to enforce reliability standards on the North American power grid. Currently, reliability standards are in place, but adhering to them is voluntary. There is not an entity set up to enforce, or with authority to enforce, compliance. We essentially have a legislative body with no judicial body to back it up.”

So now we have it: NERC with teeth. But be careful what you wish for.

In that same editorial column from 2003, I reported that 444 violations by U.S. grid operators that year would have been subject to $9 million in fines had mandatory reliability rules been in effect. From here on out, those rules will be mandatory and fines will be doled out for non-compliance-although the exact amount and nature of those fines has yet to be determined.

It remains to be seen how big of an impact NERC’s new authority will have on the way individual utilities manage reliability, but one would assume that with financial penalties for non-compliance looming, we should see a significant increase in the amount of investment utility companies make in not only physical T&D infrastructure improvements, but also the automated systems and IT that support the physical infrastructure. The cost-benefit equation for a new SCADA system, higher-capacity transmission lines, or more frequent tree trimming just got a whole lot easier to balance out.

Certainly, utilities have a plethora of tools at their disposal to meet whatever requirements the new ERO deems appropriate to impose. Innovative work in wide area measurement and monitoring systems (WAMS) and grid simulation tools, both detailed in separate article in this issue, have the potential to greatly improve reliability on the bulk transmission scale. Carefully regimented plans to improve individual utilities’ distribution systems, such as the work being done at Hydro Quebec (see page 38), will shore up the medium- and low-voltage portions of our power grid. The know-how and technology are there; it’s up to individual utility companies, or consortiums of companies, to put it all to use.

Stay tuned for a great deal of action as utility companies work that much harder to ensure reliability of their systems. Stay tuned also for a great deal of debate about NERC’s ERO authority. The new sheriff in town may face some opposition.

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