Electric reliability organization bill reintroduced

US Sen. Gordon Smith (R-Oregon) and Congressman Albert Wynn (D-Maryland) have introduced legislation to establish a national transmission standards-setting organization with enforcement power. HR 31 and S 172 are similar to bills introduced last year and have been referred to the House Energy and Commerce and the Senate Energy and National Resources committees.


By Kate Thomas
OGJ Online

HOUSTON, Feb.19�US Sen. Gordon Smith (R-Oregon) and Congressman Albert Wynn (D-Maryland) have introduced legislation to establish a national transmission standards-setting organization with enforcement power.

HR 31 and S 172 are similar to bills introduced last year and have been referred to the House Energy and Commerce and the Senate Energy and National Resources committees.

The Senate passed measure last year which would have created an independent, self-regulating industry organization to establish and enforce compliance with mandatory rules for operating the nation's high-voltage electric transmission system. But the bill died in the House.

The North American Electric Reliability Council (NAERO) has lobbied heavily for the legislation's passage. At the organization's board meeting Feb. 12-13, members determined a final vote on incorporating the organization and establishing an independent board will be taken March 30.

The change in organizational governance is considered necessary in anticipation of federal reliability legislation being passed. In addition, the board agreed to move forward with plans to establish contract-based compliance enforcement for violation of reliability standards, including imposition of monetary penalties and other sanctions.

The board also voted to seek authority from federal, state, and provincial regulators to charge user fees to pay for operating the organization, which is presently structured as a voluntary not-for-profit group. Formed in 1965 to promote reliability of the bulk electric systems in North America, it is comprised of 10 regional reliability councils accounting for nearly all the power supplied in the US, Canada, and portion of Baja California Norte, Mexico.

The organization has asserted federal legislation is required to insure reliability of the wholesale electric systems. As electricity markets become more competitive, the voluntary arrangement under which the system now operates is no longer sufficient, NAERO officials say.

Representatives of the organization testified last year before both the Senate and House they are is seeing an increase in the number and seriousness of infractions of its voluntary reliability rules. The organization cited actions of certain control areas in the Eastern Interconnection as demonstrating the industry is facing an urgent crisis.

Under the proposed legislation, the organization would be overseen by the Federal Energy Regulatory Commission in the US and would follow a model similar to ones developed by the securities industry self regulatory organizations such as the National Association of Securities Dealers (NASD).

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