FERC OKs New Enforcement Approach for Minor Reliability Standard Violations

The Federal Energy Regulatory Commission (FERC) last week conditionally approved an enforcement approach proposed by the North American Electric Reliability Corp. (NERC) that allows industry to self-report “low risk” reliability standard violations. The initiative will “free up resources and attention to address more serious risks to reliability,” FERC said in its decision.

NERC’s “Find, Fix, Track, and Report” (FFT) petition filed with FERC last September said the new initiative was designed to handle compliance issues more efficiently; focus on issues posing a more serious risk to reliability; streamline administrative paperwork; and continue to encourage self-reporting and mitigation.

Under the proposal, NERC will continue issuing notices of penalty for more serious violations, while documenting remediated possible violations of minimal to moderate risk to the bulk power system in a monthly FFT spreadsheet to FERC. NERC would also dismiss certain issues, which are not deemed a violation of reliability standards. NERC would not make a finding whether a violation had occurred, nor impose a penalty for FFT-reported violations.

It reflects “a risk-informed approach that recognizes not all possible violations are equal and should not be treated in the same manner,” NERC said last week.

FERC’s decision issued on Thursday found the proposal would reduce the time and resources needed to resolve minor possible violations, but it also imposed limited additional conditions to ensure that these possible violations are “properly addressed.” The order sets several conditions related to identifying whether a possible violation qualifies for FFT treatment, documentation, and accountability and deterrence.

Going forward, for example, only possible violations that pose a “minimal risk” to reliability are eligible for FFT treatment. In addition, an officer of an entity receiving FFT treatment must certify that its statement of remediation is true and correct, and the monthly FFT informational filings must publicly identify certain entities receiving FFT treatment. FERC also indicated that it will survey a random sample of FFTs each year to allow FERC to gauge how the program is working and whether there may be room for improvements. It also said the FFT filings NERC has made to date are closed, but the commission reserved the right to review future FFT filings in what it expects will be only limited and rare circumstances.

NERC must now make a compliance filing within 60 days of the date of the order and submit reports on implementation of the new enforcement mechanism. FERC said it will review the report filed 12 months after the date of the order to ascertain whether changes to the program are warranted.

“While additional guidance is provided in the order, NERC is pleased that the past six months of FFT filings give FERC confidence on how NERC and the Regions are implementing the initiative,” NERC said.

Within the six filings, more than 425 violations were remediated, the organization that monitors reliability of the bulk power system in North America added.

Sources: POWERnews, FERC, NERC