FERC said March 15 it accepted a NERC proposal to use informational filings to report possible violations of reliability standards that pose a lesser risk to the bulk power system.
According to NERC’s Sept. 30, 2011, petition, the “find, fix, track and report,” or FFT, initiative promotes reliability by allowing NERC and the industry to report minor possible violations that have been remediated in a streamlined manner and thereby free up resources to address more serious risks to reliability, FERC said.
While the proposal will reduce the time and resources needed to resolve minor possible violations, limited additional conditions are appropriate to ensure that these possible violations are properly addressed, FERC said. The order sets several conditions relating to identifying whether a possible violation qualifies for FFT treatment, documentation and accountability and deterrence, FERC said.
Going forward, FERC added, only possible violations that pose a “minimal risk” to reliability are eligible for FFT treatment. Additionally, an officer of an entity receiving FFT treatment must certify that its statement of remediation is true and correct, and the monthly FFT informational filings must publicly identify certain entities receiving FFT treatment.
FERC also said it will survey a random sample of FFTs each year to allow it to gauge how the program is working and whether there may be room for improvements. Furthermore, while the FFT filings NERC has made to date are closed, FERC reserves the right to review future FFT filings in what it expects only will be in limited and rare circumstances.
NERC must make a compliance filing within 60 days of the order’s date and submit reports on implementation of the new enforcement mechanism, FERC added, noting that it will review the report filed 12 months after the order’s date to ascertain whether changes to the program are warranted.
In a separate March 15 statement, NERC President and CEO Gerry Cauley said NERC is encouraged by FERC’s approval of its filings using the new compliance initiative format.
“By identifying and resolving issues that do not pose a serious risk to the reliability of the bulk power system, more resources can be focused on violations that do pose a serious risk to the grid,” Cauley said.
During the FERC meeting March 15, FERC Chairman Jon Wellinghoff noted that NERC has been submitting monthly FFT filings since the FFT proposal was filed in September 2011. “I agree that a vast number of these monthly FFT filings are satisfactory,” he said. “In fact, our review of those monthly filings, in concert with our consideration of the FFT proposal, has enhanced our understanding and confidence in how NERC intends to implement its proposal.”
Wellinghoff also said it is not clear how the six factors that will be considered in assessing the risk of a possible violation will be applied, and how NERC will ensure they will be applied consistently across NERC’s eight regions.
For instance, he said, he is concerned that a violation may be treated as posing minimal risk because no harm to the bulk power system has actually occurred. “Simply because there’s no adverse impact to the bulk power system during the period a possible violation occurred does not mean that there was minimal risk to the bulk power system,” Wellinghoff said, adding, “[U]ntil we and NERC have gained additional experience with the assessment of risk under specific factual scenarios, we are limiting the eligibility of FFT treatment only to possible violations that pose a minimal risk to bulk power system reliability.”
Among other things, he said FERC will require the public disclosure of the identity of an entity that is the subject of an FFT matter unless the disclosure relates to a cybersecurity incident or would jeopardize the security of the bulk power system.
Commissioner Cheryl LaFleur said at the meeting that one of the reasons she supports the proposal is it requires that all potential violations, including minimal ones, be mitigated, tracked and reflected in future compliance assessments. “This will give NERC, the regional entities, the commission and the registered entities the opportunity to identify clusters or trends of emerging issues and take effective action to address them,” she said.
Commissioner Philip Moeller said at the meeting, “What we’re trying to get at is the backlog of minor violations that have created a very extensive backlog at NERC.”
He said it will also help toward getting more consistency amongst the eight regional entities in terms of how they approach minor violations.
Moeller also said there will be a survey or a sampling process that goes on as the program is developed, “but it is not meant to second-guess decisions. Those matters that are closed will remain closed, but the purpose behind it is to make sure the program is working as intended and that it is not swallowing up larger issues that should not have gone into the FTT process.”