Enforcement Enforcement Reliability
Pursuant to the Energy Policy Act of 2005 (EPAct 2005), Congress expanded FERC’s role and jurisdiction under the Federal Power Act (FPA) by adding a new section 215 pertaining to electric grid reliability. Section 215(e) of the FPA authorizes the Commission or an Electric Reliability Organization (subject to review by FERC) to impose a penalty on a user, owner or operator of the bulk power system for a violation of a Reliability Standard. A penalty must “bear a reasonable relation to the seriousness of the violation” and must take into account the efforts by the owner, operator, or user to remedy the violation in a timely manner (FPA section 215(e)(6)). EPAct 2005 provides that persons and organizations that violate a Reliability Standard are subject to civil penalties of up to $1 million per day per violation, helping to ensure reliability of the nation’s bulk power system.
Among the priorities of the Office of Enforcement (OE) are serious violations of the mandatory Reliability Standards. OE staff works closely with other Commission offices, the North American Electric Reliability Corporation (NERC) (the Commission certified Electric Reliability Organization), and the six Regional Entities to which NERC delegates some of its enforcement responsibilities.
The Commission can investigate alleged violations of Reliability Standards independently or in coordination with NERC and the Regional Entities. Investigations involving OE staff will primarily focus on violations resulting in actual harm, either through the loss of load or through some other means, as well as cases involving repeat violations of the Reliability Standards or a violation of a Reliability Standard that carries a substantial risk to the system. Reliability investigations are conducted under 18 C.F.R. Part 1b . Settlements for Reliability Standards violations have included detailed mitigation and compliance plans, reliability enhancements, and civil penalties.
OE staff often works with the Offices of Electric Reliability and General Counsel to conduct reliability inquiries. In a reliability inquiry, Commission staff (sometimes in conjunction with NERC) examine a bulk electric system event, identify its causes and make recommendations to prevent a similar outcome. At the conclusion of an inquiry, the Commission and NERC typically issue a joint public report.
OE’s Division of Audits and Accounting may conduct reliability observation, independence, and standards audits to ensure: (1) Regional Entities are conducting their own robust audits; (2) Regional Entities are properly carrying out their responsibilities in an independent manner, and (3) responsible entities comply with the Reliability Standards. Typically, the Commission performs these audits in conjunction with the Office of Electric Reliability and in some cases NERC.
OE Staff and the OE Reliability Coordinator work in tandem with other Commission Offices on a variety of reliability-related matters, including NERC and Regional Reliability Entity filings (e.g., Notices of Penalty, changes to NERC Rules, amending or retiring Reliability Standards, NERC Five-Year Assessments, and similar periodic filings). OE staff and the OE Reliability Coordinator actively coordinate with NERC, attend various Regional Entity meetings, help educate the regulated community on the Commission’s reliability efforts, and promote practices designed to enhance reliability.