FERC Interference With Reliability Standards Development

Last week, FERC held a technical conference on reliability policy. The main topic of conversation was the Environmental Protection Agency’s pending regulations on power plant emissions, which most panelists asserted could have a significant negative effect on electric power supply reliability. Some argued that the EPA should institute a blanket delay in implementing the regulations, some that the President should exercise his authority to grant an extension to all generators nationwide. Personally, I’d side with some of the other panelists, who suggested that if shutting down (either permanently or temporarily) any particular power plant would lead to a reliability problem, then the EPA, President, DOE, or FERC could certainly explore the possibility of granting that plant (and only that plant) an extension of time to comply.

But that’s not what I wanted to address with you today. That topic was covered thoroughly throughout the media. And further, FERC’s jurisdiction does not extend to generation resource adequacy, thus in my mind calling in to question why this issue would be addressed in a FERC conference on reliability policy.

Rather, I wanted to discuss an issue raised on the first day of the conference—an issue related to bulk-power-system reliability standards.

During the second panel, as part on a discussion of FERC intrusion in to the standards development process, Gerry Cauley, President of NERC, complained about FERC staff participation. He explained that FERC staff only partially participate in standards development, making occasional comments and complicating the discussion, but refusing to contribute specific proposals or commit support to a particular point-of-view on behalf of the commission. He said that FERC staff should either be “into or out of the tent.”

I spoke to FERC staff after the panel and know they took this comment seriously. However, resolving it is not a simple matter.

See, one possibility is for staff to “step into the tent.” This they’d be happy to do. But staff aren’t the decision-makers. That authority rests with the commission. And FERC attorneys regularly advise engineering staff not to speak on behalf of the commission, or commit to a specific result.

FERC staff could “step out” and allow the stakeholder-led process to go where it may. But that too seems unlikely. FERC’s Division of Reliability Standards has a staff of around 20 people dedicated to standards development and approval (not including CIP standards, for which there are additional staff in a separate division). The director of the Office of Electric Reliability also relies heavily on one particular senior staff member and one consultant, neither of whom hesitate to put their opinions ahead of those of NERC or other stakeholders.

An alternative is for the commission to make the Division of Reliability Standards non-decisional and reassign it to the Office of Administrative Litigation. No longer part of the team advising the commission on the approval of standards, these staff would then be free to participate fully in standards development without undermining the authority of the commission. I don’t know whether this would resolve the situation to Mr. Cauley’s satisfaction, but it would allow the commission to feel that it is still involved in the process—contributing rather than interfering.