On March 19th, FERC moved to improve reliability of the Bulk Electric System (BES) by approving proposed revisions to the NERC Rules of Procedure to implement a new risk-based assessment and registration initiative.
The information below briefly outlines FERC’s Order. For detailed information, please see the Order, Docket Number RR15-4-000.
According to NERC, the effect of the initiative will be to reduce the regulatory burden on 700 of the 1,603 NERC-registered organizations and allow them to focus more closely on issues with a greater potential to impact reliability. The initiative would effectively remove about 200 entities from the Compliance Registry.
Things to Consider
The Order became effective immediately, and the Regions have begun contacting affected registered entities to provide additional information and guidance on implementation of RBR. Additional guidance will soon be posted on the NERC website under RBR Initiative – Headlines.
All registered entities are potentially affected by this Order, but those more significantly impacted are:
• Distribution Providers
• Purchasing-Selling Entities
• Interchange Authorities
The new Risk-Based Registration initiative is intended to ensure that entities are subject to the correct sets of applicable Reliability Standards by using a consistent approach to risk assessment and registration. The initiative is also aligned with the 2012 revisions to the definition of the BES.
Under the Risk-Based Registration initiative, NERC will:
Implications of Risk-Based CMEP
• Modify the Compliance Registry criteria to
> Remove Purchasing-Selling Entities (PSE) and Interchange Authorities (IA) as
functional registration categories
> Modify the threshold for registering entities as Distribution Providers (DP),
including raising the load baseline from 25 MW to 75 MW
> Align five functional registration categories to the definition of the BES
• Implement a risk-based application of sub-set lists of Reliability Standards to
underfrequency load shedding-only Distribution Providers (DP)
• Implement procedural revisions to the registration process to establish a
materiality test for registration and a process to review registration,
deactivation, and deregistration decisions
While the Commission found NERC’s overall goal reasonable, it gave NERC 60 days to provide more information on the proposal to remove Load-Serving Entities (LSE) from the registry criteria to ensure that there are no reliability gaps and directed NERC to include Reliability Standard PRC-005, Transmission and Generation Protection System Maintenance and Testing, as applicable to underfrequency load shedding-only DPs. After receiving an extension, NERC provided its response to FERC on July 17th, addressing the following six items from the Commission:
• The increase in LSEs that could be deregistered due to the increased threshold for
registration of DPs to 75 MW
• The impact on individual Balancing Authorities’ (BA) peak load from LSE organizations
that could be deregistered
• How obligations under NERC’s Reliability Standards applicable to LSEs would be
• How obligations under alternative sources of authority applicable to LSEs would be
• Whether DP-LSE organizations will affect reliability due to load growth
• How NERC has coordinated with NAESB to address the transition of commercial-related
In addition, NERC supplied modified NERC Rules of Procedure (ROP) that include Reliability Standard PRC-005 as applicable to underfrequency load shedding-only DPs and states that the NERC-led review panel shall also include a review of individual and aggregate system-wide risks.
Jim Stanton and John Spivak, walk you through the implications of Risk-Based CMEP and help you understand how to maintain an effective compliance program.
Comparison of 2015 and 2016
NERC has released the 2016 CMEP Implementation Plan which offers some significant reductions from 2015 in the number of Standards and Requirements identified as areas of focus for compliance oversight. Overall, the Standards were reduced from 41 to 19 and Requirements were reduced from 75 to 46.
Director of Advisory Services