An Interview With NERC CEO Gerry Cauley
by Stephen R. Cieslewicz, CN Utility Consulting
I first met Gerry Cauley standing in front of the Federal Energy Regulatory Commission (FERC) waiting to talk to staff members about trees, power lines and their collective influence on the 2003 blackout. Throughout the subsequent meetings, it became clear to me that Cauley was very familiar with the issues and equally committed to addressing them. He understood utility vegetation management (UVM) much better than almost anyone I had worked with in Washington, D.C.
A lot has changed in the industry since then. Cauley is now CEO of the North American Electric Reliability Corp. (NERC), and its standards have been in existence for a few years, so I thought it would be a good time to catch up with him on UVM issues from his perspective.
Cieslewicz: Can you please provide a bit of background on NERC?
Cauley: NERC is an independent corporation whose mission is to ensure the reliability of the bulk power system of North America, including the United States, Canada and a small portion of Mexico. Although NERC has been in existence since 1968, it was only recently–2006–that NERC was certified by the Federal Energy Regulatory Commission (FERC) to serve as the electric reliability organization in the United States, under the provisions of the Energy Policy Act of 2005. As such, NERC develops mandatory reliability standards through an industry consensus-building process with NERC. Working with eight regional entities, NERC also monitors and enforces compliance with our standards. Beyond its regulatory role, NERC also promotes reliability excellence through various programs such as training and education, situational awareness and publication of lessons learned.
Cieslewicz: Can you talk a bit about NERC’s interest and involvement in utility vegetation management (UVM)?
Cauley: Poor vegetation management was a key contributor in the August 2003 blackout in the Northeast. Three high-voltage lines in Ohio relayed out in the span of approximately an hour, acting as the trigger for a wide-area cascade of the system and the largest blackout in North American history. Improperly maintained right-of-way clearances create a situation where power system failures are not random, but systemic, such as we saw in Ohio in August 2003. It is essential that transmission line owners maintain safe clearances on their energized equipment. Not only do we have the issue of lines relaying out in a nonrandom fashion, we also assume that line ratings are valid based on the amount of sag caused by line heating. If the clearances are not sufficient, then the line ratings can become compromised and the reliability analysis we use to ensure the power system is in a safe state can become invalid.
Cieslewicz: How did NERC respond to the need for a North American standard for transmission UVM?
Cauley: Initially, following the blackout, we issued recommendations to the industry to pay closer attention to vegetation management procedures and execution of those plans, reminding the industry of what typical good practices should be. Later, working with industry experts, we developed a mandatory vegetation management standard that was adopted by the Federal Energy Regulatory Commission. That standard, FAC-003, has now been in effect for several years and has had a notable impact in reducing the number of reported line outages caused by vegetation.
Cieslewicz: What are some of the key requirements of FAC-003?
Cauley: The essential requirements are for transmission owners to have a formal written vegetation management plan that takes into consideration the types of growth and climate seen locally to ensure vegetation does not encroach into the safety clearances of the lines. The standard requires entities to execute and keep records of its vegetation management work and to have trained and qualified workers. The standard is applicable to all lines over 200 kV. While NERC is responsible for setting the standard and enforcing instances of noncompliance, each utility determines the actions it must take to comply with the standard. In addition, vegetation management for distribution facilities is regulated by state commissions and sometimes local municipalities, as well.
Cieslewicz: Do you believe FAC-003 has been proven to be effective since FERC promulgated the requirement?
Cauley: To clarify the question, the vegetation standard is a NERC standard, developed in coordination with industry, and was subsequently approved by FERC when we filed it with the commission. To answer the question, we collect quarterly data on the number of line outages from grow-ins and fall-ins from inside and outside the right-of-way and issue a quarterly public report. The data shows a clear downward trend since 2007, although I believe vegetation management requires constant and ongoing vigilance. I believe this can be directly attributed to the new mandatory standard and our monitoring program, as well as the lessons learned from the 2003 blackout and a greater overall awareness of the issue by industry.
Cieslewicz: While it may seem like a long time since the big regulatory and oversight changes in North America, it will likely be a while before all of the bugs are worked out. How do you think the transition is going? What has been going well and what still needs to be done?
Cauley: NERC and the regional entities, as well as the federal regulator FERC, are still growing in our roles. Essentially the whole regulatory framework is still only a few years old. I expect over time that we will continue to see increased constructive dialogue from all sides with regard to how we can improve reliability performance and how to prioritize actions based on reliability benefit. I believe that vegetation management and maintaining safe clearances in rights-of-way will always remain top priorities going forward. That is because vegetation continues to grow, obviously, but also there continues to be significant construction of underbuild within rights-of-way, such as telecommunications and distribution poles and circuits and landowner encroachment.
Cieslewicz: On the UVM side of the house we have a great deal of evidence that utility companies across North America have applied more resources to the work and have become more diligent in keeping rights-of-way clear of vegetation. A by-product of the higher standard of required care and compliance has been increased public scrutiny over UVM activities in several North American locations. Do you have any advice for utility arborists who are trying to reclaim rights-of-way and bring their systems under control when it comes to explaining the necessity of this work to the public?
Cauley: I agree that the industry has stepped up to address vegetation management much more vigorously and that, as a result, I believe we are having a positive impact on the risk of wide-area cascading failures. I think the August 2003 blackout points to the necessity of vigilant, ongoing management of vegetation in the rights-of-way of high-voltage lines. In most cases, it is clear that the transmission owner has a right to clear or otherwise maintain the vegetation in the right of way. Ultimately, aggressive maintenance is the best approach from a purely reliability perspective; however, each company must weigh a lot of factors, such as the cost of maintenance and the impacts on landowners and others impacted by the clearing of vegetation. It is up to each transmission owner to work with its customers and local jurisdictions to see what measures can be included in the plan to balance the need between aggressive maintenance and aesthetics and balance costs with risks and benefits.
Cieslewicz: A related problem is also occurring on a few federal and state lands where agencies are either hindering or refusing utilities the ability to do required work. Do you have any thoughts or suggestions on how this problem can be or should be addressed?
Cauley: The jurisdiction to enforce vegetation management is clear with regard to the industry, NERC and FERC. Where it becomes less clear is when other federal or state agencies also have jurisdiction over lands and sovereignty comes into question. I think the solution is for these issues to be worked out by mutual agreement among the various federal and state agencies involved. Vegetation and wires do not know jurisdictional boundaries; the problem has to be worked out among jurisdictional entities to ensure transmission owners have the right to implement their vegetation management program in these restricted areas.
Cieslewicz: Another area of interest on the part of utility arborists has surrounded the issue of consistent enforcement and interpretation of FAC-003 requirements during scheduled audits. Is NERC doing anything to ensure consistent auditing across all regional entities?
Cauley: In the past year, we have initiated more extensive training of auditors, with auditors from all the regions in the training at the same time. Also, NERC and FERC send observers to sample regional audits and provide feedback on consistent interpretation of the requirements in the standard. In the future, I would expect NERC to conduct more sampling of vegetation processes and results to verify compliance. To date the compliance effort has focused on reviewing program records and vigorously enforcing line outages caused by vegetation contacts.
Cieslewicz: Based on the overall record of compliance to the new standards–fines, penalties and mitigation–how is the industry doing?
Cauley: Early on, we placed special emphasis on enforcement of vegetation management requirements, and some of the initial larger fines issued by NERC were related to vegetation. I think this sent the correct message that we take vegetation management very seriously. The industry has responded appropriately and performance has improved. I believe we are getting much better investment in right-of-way maintenance today than a few years ago.
Cieslewicz: NERC has changed significantly since the organization was developed. Can you explain the new relationships and roles of NERC, FERC, the regional entities and state commissions?
Cauley: NERC is governed by an independent board of trustees. The stakeholder members of NERC advise the board and elect trustees, but ultimately the decisions of NERC are made and overseen by the independent board. The eight regions previously made up and operated NERC; however, with legislation, NERC was appointed the electric reliability organization (ERO), and now authorities are delegated from FERC to NERC, and some of those authorities, such as to propose standards and monitor and enforce compliance, are delegated to the eight regions. States are represented in one of the 12 stakeholder sectors of NERC, and a number of representatives participate in the NERC Member Representatives Committee, standards development and other NERC activities. From a perspective of authority, however, NERC and regions are delegated their authority solely from the FERC and not the states.
Cieslewicz: What is a NERC alert, and how are they developed and used?
Cauley: NERC is continuously monitoring system conditions, events and threats through its situation awareness program. When NERC becomes aware of an issue that could present a risk to grid reliability, one option is to issue an alert to industry. We can issue three types of alerts: advisories, recommendations and essential actions. Advisories require no response back from industry. Recommendations require acknowledgement of receipt and may include reporting requirements with regard to what actions the entity is taking. Essential actions, which the NERC board must approve, can direct industry to take specific actions. Alerts can come from a variety of sources, including federal intelligence agencies in the case of cybersecurity threats. NERC assembles a team of experts to analyze the threat or vulnerability and to structure mitigating actions. If time allows, NERC will seek inputs from industry experts and stakeholders. Once complete, the alert goes through a management review and is submitted to FERC and Canadian authorities for a final review before issuance. Alerts are effective in providing industry actionable information quickly. Many issues do not require a permanent standard, and the alerts serve that purpose.
Cieslewicz: Have there been any alerts related to UVM? What did they say?
Cauley: NERC issued an alert in September 2010 when it saw a brief uptick in vegetation events to remind the industry to stay focused on vegetation management. The alert was advisory only, as the mandatory standards have remained in effect through this period.
Cieslewicz: Can you explain the intent and details of the NERC alert dealing with FAC-008?
Cauley: As a result of the investigation of a vegetation-related outage, an entity agreed to use lidar to assess its remaining transmission facilities. The result indicated there were potentially many more encroachments into the required safety clearances of the lines, and not just due to vegetation. We discovered that over time construction in rights-of-way from distribution systems, communications and landowners had placed objects too close to energized lines to be safe under all studied operating conditions. As we looked further at this issue, we found that this concern was fairly common across industry and not isolated to just a few companies. So the conclusion we’ve drawn is that the effective right-of-way maintenance must include not only vegetation management, but effective procedures, controls and inspections to address all forms of encroachment: vegetation, as well as poles, wires, equipment, buildings, rail and road crossings, etc.
Cieslewicz: How important is it for utilities to accurately understand sag and sway of conductors as they relate to vegetation, structures and other obstructions?
Cauley: The grid needs to be reliable under a range of reasonably expected conditions associated with wind, ambient temperature, humidity and other conditions. Companies are expected to study these various conditions that are applicable in their areas and include reasonable assumptions in determining appropriate clearances to ensure safety and reliability clearances are not compromised under these conditions.
Cieslewicz: Can lidar be used as one of the ways to satisfy the FAC-008 NERC alert requirements?
Cauley: I’m encouraged by the wider use of lidar to evaluate conditions, including both the vegetation and nonvegetation-type encroachments. Understanding that the process can be expensive, I believe there are significant benefits where it can be used.
Cieslewicz: What other methods or alternatives could also work?
Cauley: Inspections are important, independent of how they are done. Visual inspections by air or ground have historically been used extensively. However, the key challenge there is the introduction of the human element. An observer flying a line can see a gap and think it is OK, but could be deceived by the angle or just simply miss something in the flyover. That’s one of the reasons lidar may be a help by providing a richer set of data from which to perform analysis.
Cieslewicz: Can you explain a bit about the NERC standards development process?
Cauley: A NERC standard may be proposed by anyone impacted by the reliability of the bulk power system. The process is open and balanced to represent the views of all reliability stakeholders. As such, NERC’s standards process has been accredited by the American National Standards Institute. A proposed standard is assigned to a technical drafting team of experts whose job it is to build consensus around a technically sufficient standard to solve the problem posed. The team does this through a series of draft postings and review of comments received. When the team believes it has approached consensus, it can move the standard to a ballot of industry. The balloting process can continue, with the drafting team making adjustments, until a two-thirds majority-weighted approval is received. Once the standard is approved by industry, it is reviewed and approved by the NERC board, and then the proposed standard is filed with FERC and Canadian authorities. In the United States, the standard becomes effective only when it has been approved by FERC.
Cieslewicz: How many standards are there, and how many are being developed or revised?
Cauley: There are more than 100 reliability standards currently in place, with vegetation management being only one of them. In all, there are approximately 1,500 different requirements in these standards. We have several dozen standards currently in development; however, we strive to prioritize these to the most important 12-15 being actively worked on at any time.
Cieslewicz: While all are important, are there standards that are of particular concern to NERC and FERC?
Cauley: I think NERC and FERC agree that relay protection standards are critical. Almost every event that has happened on the grid that is big enough to get our attention involves an issue with relay protection not functioning as designed. We are also concerned with cybersecurity standards, which have come into being just in recent years.
Cieslewicz: FERC’s recent ruling suggested some changes to the standards development processes in cases where a deviation was necessary. What were the changes, and how will they affect the industry?
Cauley: NERC has taken a number of steps to expedite the development times for standards. We also have the ability to produce standards in an emergency situation very quickly and confidentially, although we expect this process to be used rarely. Recently, FERC approved a change to our standards process that would allow the NERC board to approve a standard without full consensus of the industry, if needed, to meet a directive of NERC and if the proposed standard would help reliability in the view of the board.
Cieslewicz: What is the current status of FAC-003 version two, and do you see any significant changes to UVM that will result from it?
Cauley: Version two is still in deliberation and has not yet come to the NERC board for approval. I am hopeful that the team will be able to introduce some enhancements, such as greater clarity on clearance and inspection requirements, while not reducing the level of reliability we have established with the current standards.
Cieslewicz: Given the audience of utility arborists across North America who will be reading this, is there anything you would like to pass along?
Cauley: Utility arborists play an important role in achieving our goal of avoiding bulk power system outages caused by vegetation. The best way for this group to help is to share best practices and lessons learned. I understand it is a competitive field, but there is a lot of work to be done, and sharing of best practices will help us ensure the lights stay on.