Electric reliability of the nation’s interconnected electricity system is an important issue at both a local and national level. Because of its far-reaching impacts (as evidenced during the 2003 Eastern black-out), certain nation-wide standards are required to ensure continued reliability. With the passage of the Energy Policy Act of 2005 (EPAct), the United States Congress entrusted the Federal Energy Regulatory Commission (FERC) with the authority to approve and enforce rules to assure the reliability of the nation’s bulk-power system. The bulk-power system generally consists of the high-voltage electricity network connecting generators to areas of power consumption.
The FERC issued two sets of standards on reliability: Mandatory Reliability Standards, which specify general planning and operating requirements for the entire bulk-power system, and Critical Infrastructure Protection (CIP) Standards, which specify requirements for cyber and physical security in maintaining the integrity of the nation’s electric system.
All major participants (including, but not limited to, privately and publicly owned electric utilities, independent generators and independent transmission system operators) in the bulk-power system in the United States are subject to various elements of the more than 100 standards that FERC has approved to date. FERC delegated to the North American Reliability Corporation (NERC) the responsibility of filing, managing and enforcing these standards.
While the CPUC’s engagement in this rulemaking reflects the interests of California consumers and the entities and markets that serve them, the CPUC also recognizes that west-wide and national perspectives strongly influence electric reliability issues.
With this broad perspective in mind, the CPUC has actively participated in the process of developing Reliability Standards and filed extensive comments with the NERC and the FERC in 2006 and 2007. New standards are discussed and proposed on a monthly basis, and the CPUC continues to actively monitor and participate in this process.
On April 4, 2006, NERC filed with the FERC 107 proposed Reliability Standards for FERC approval. Following an open process to gather stakeholder input, FERC issued a Final Rule approving 83 of the 107 standards in March of 2007. Most of the remaining 24 standards have been refined and will eventually be submitted for FERC approval.
However, beyond these 24 remaining standards, additional reliability standards are continuously being proposed and developed. Some areas in which new standards have been developed and continue to be developing are: transmission planning, personnel training in power plants and in electricity control rooms, and vegetation clearance around transmission lines.
The CIP standards consist of eight proposed Critical Infrastructure Protection Reliability Standards (CIP-002 through CIP-009) specifically addressing cyber and physical security of the nation's electricity grid. In May of 2006, the NERC Board of Trustees approved these standards after they received electric industry acceptance through an industry-wide ballot. Early in 2008, after issuing a Notice of Proposed Rulemaking and gathering stakeholder comments, the FERC approved these CIP standards.
In its order approving these standards, the FERC adopted many of the positions that the CPUC had advocated in its comments, including those that recommended to tighten security at critical points on the system and close loopholes that would allow the ‘business judgment rule’ to override standards.
The CPUC’s Position
The CPUC has actively participated in the entire Mandatory Reliability Standards process since it began. The agency filed extensive comments to NERC and the FERC in June 2006, Jan. 2007, Feb. 2007, and Oct. 2007. New standards are discussed and proposed on a monthly basis. The CPUC’s comments emphasize flexibility over excessive national uniformity (e.g., 30-minute response “deadline”), recognizing and approving existing WECC standards, avoiding unnecessary requirements for some small entities, instituting a trial period before levying penalties, retracting penalties associated with standards not fully finalized, and minimizing duplication of state and WECC requirements. Protecting the nation’s bulk-power-system is an ongoing process.