http://thehill.com/blogs/congress-blog/energy-environment/211238-senate-should-demand-electric-grid-reliability-and
By Thomas S. Popik and William R. Graham
The Hill
July 07, 2014
With a Senate vote on two nominees for commissioners of the Federal Energy
Regulatory Commission (FERC) pending, there is unprecedented attention on
this obscure regulator of interstate pipelines and electricity
transmission. In 2005, Congress granted FERC additional authority to
regulate electric grid reliability and security, but too often FERC has
accommodated industry rather than enforce strict standards.
Both FERC nominees, Cheryl LaFleur and Norman Bay, have long tenures as
commissioner and director of Enforcement, respectively. Before a
confirmation vote, Senators should examine FERC’s weak regulatory record
and determine whether leadership and legislative fixes are necessary.
Prior to the 2003 Northeast Blackout which affected 50 million people,
electric grid reliability and security were unregulated. An industry trade
association had set voluntary standards but compliance was spotty. After
the Northeast Blackout, a special U.S.-Canada task force identified the
voluntary standards system as a prime cause. In response, Congress
designed a hybrid regulatory system, where a private successor to the
trade association, the North American Electric Reliability Corporation
(NERC), would set mandatory standards. FERC would have authority to
request, review, and approve, but not change, NERC’s standards.
Nominee and Acting FERC Chair LaFleur, formerly a senior utility
executive, is a supporter of the hybrid FERC-NERC regulatory system. At an
April Senate hearing entitled, “Keeping the lights on -- Are we doing
enough to ensure the reliability and security of the U.S. electric grid?”
energy committee Chair Mary Landrieu (D-La.) requested of the witnesses,
“Say how this is working.”
“I think it's working quite well,” responded Chairman LaFleur. NERC CEO
Gerry Cauley chimed in, “I think the model is working really well.”
[...]
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