New Reliability Compliance Opportunities in 2013

The Federal Energy Regulatory Commission (FERC) closed out 2012 with several orders affecting reliability compliance. FERC adopted a revised definition of the “bulk electric system,” authorized FERC access to e-Tags used to schedule power transmission, and affirmed the authority of the North American Electric Reliability Corporation (NERC) to assess monetary penalties against federally owned utilities. Industry participants should use the New Year as an opportunity to review facilities, information-sharing processes and contracts to help ensure compliance with these new reliability requirements.

Revised Definition of the Bulk Electric System (Docket Nos. RM12-6 and RM12-7)-

In Order No. 773, FERC approved NERC’s proposed revisions to the definition of the “bulk electric system” that establishes a bright-line threshold, and eliminates regional discretion, for identifying facilities subject to NERC’s Reliability Standards. Under the new definition, all transmission facilities operated at or above 100 kV and all real and reactive power resources connected to the grid at 100 kV or higher are included; local distribution facilities are excluded. FERC also approved NERC’s proposed exception process and form by which facilities can be added or removed from the definition on a case-by-case basis. The new definition will go into effect April 1, 2013 (the first day of the second calendar quarter after FERC approval), but newly identified facilities will have 24 months to come into compliance.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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