The History of the North American Electric Reliability ...

The History of the North American Electric Reliability Corporation

Helping Owners, Operators, and Users of the Bulk Power System Assure Reliability and Security for More Than 50 Years

By David Nevius Senior Vice President 1979?2012

The History of the North American Electric Reliability Corporation

Helping Owners, Operators, and Users of the Bulk Power System Assure Reliability and Security for More Than 50 Years

Second Edition

First edition published January 2020 Second edition published March 2020

Table of Contents

Foreword.............................................................................................................. v Preface ................................................................................................................vii 1965 Northeast Blackout and its Immediate Aftermath ...................................... 3

Call for Legislation ........................................................................................... 4 NERC Is Formed ............................................................................................... 5 FPC Initial Appraisal of NERC ........................................................................... 7 The Next 10 Years (1968?1978) ........................................................................... 9 Further Development of the NERC Organization ............................................ 9 Expanding the Organization ............................................................................ 9 Early TAC Activities ........................................................................................ 11 Interregional Review Subcommittee ............................................................. 13 Creating the Study Model ............................................................................. 15 Power Transfer Capability Studies ................................................................. 15 Evaluation of Generation Delays ................................................................... 16 Special Reports and Activities ....................................................................... 17 Future Course of NERC (1979) ........................................................................... 19 Swidler Assessment of the Impact of PURPA on NERC.................................. 19 Board Actions in Response to Swidler Recommendations ............................ 21 NERC's Second Decade: A Period of Expansion (1980?1990) ............................ 23 Strategies for NERC ....................................................................................... 23 National Electric Security Committee ........................................................... 24 Introduction of Competitive Electricity Markets................................................ 29 Significant Activities Related to the Energy Policy Act of 1992 ..................... 29 Future Role of NERC Task Force II.................................................................. 33 NERC Reliability Compliance Team ................................................................ 38 NERC's First Official Planning Standards........................................................ 41 Outages Prompt Creation of WSCC Reliability Management System ........... 41 Changes to NERC Bylaws ............................................................................... 42 NERC Forms the Electric Reliability Panel .......................................................... 43 Panel Members ............................................................................................. 43

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Panel's Report and Recommendations.......................................................... 44 NERC Board Action on Panel Report ............................................................. 46 Critical Steps in the Transition from NERC to NAERO......................................... 49 NERC Efforts Continue in 1999 ...................................................................... 50 NERC Elects Independent Board Members ................................................... 50 Other Significant Actions in 1999 .................................................................. 52 NERC to NAERO: Continuing Transformation ..................................................... 55 Legislation Stalls: Contingency Plan Considered ........................................... 55 Reliability Legislation: Status and Plan B ....................................................... 56 Other Year 2000 Activities............................................................................. 57 NERC Reliability Functional Model ................................................................ 58 2001 Arrives Without Reliability Legislation: Plan B Developed ................... 60 9/11 Attack on World Trade Center............................................................... 62 Reorganization despite No Legislation ............................................................... 65 NERC?NAESB Resolution ............................................................................... 65 Organization and Personnel Certification...................................................... 66 Reliability Coordinator Audits ....................................................................... 66 Synchro-Phasor Measurement System ......................................................... 67 FERC NOPR on Standardization of Generator Interconnections ................... 67 NERC Standards Process................................................................................ 67 NERC Strategic Plan ....................................................................................... 67 NERC Responds to 2003 Blackout ...................................................................... 69 A Constructive Partnership with Government .............................................. 71 Follow-up on Blackout Recommendations .................................................... 73 Compliance Reviews and Reliability Readiness Audits .................................. 74 Revamping Reliability Standards and the Standards Development Process . 75 Event Analysis and System Protection Initiative............................................ 78 Critical Infrastructure Security Initiatives ...................................................... 79 NERC Strategic Plan ....................................................................................... 81 Reorganization of NERC Standing Committees ............................................. 81 Natural Gas/Electricity Interdependency ...................................................... 81

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System Operator Training and Certification .................................................. 81 GADS Services ............................................................................................... 82 Legislation Finally Passes: New NERC Begins! .................................................... 85 Preparing for ERO Certification ..................................................................... 85 NERC Application Filed with FERC ................................................................. 88 NERC Certified by FERC as the ERO ............................................................... 88 NERC's 40th Anniversary Ushers in the Next Decade ........................................ 91 Overview ....................................................................................................... 91 NERC Program Area Developments and Activities: Fifth Decade....................... 97 Standards ...................................................................................................... 97 Compliance.................................................................................................. 102 Infrastructure Protection and Cyber Security Initiatives ............................. 109 Reliability Assessment Activities ................................................................. 121 Event Analysis and Trends ........................................................................... 130 Risk-Based Strategies and Initiatives ........................................................... 136 Collaboration with Canada, Mexico, and International Entities .................. 140 System Operator Training and Certification and Human Performance ....... 142 Final Thoughts.................................................................................................. 145 Appendix .......................................................................................................... 146 Evolution of the Electric Utility Industry (1882?1970) ................................ 147 Regulation of Electricity in North America .................................................. 153 North American Power Systems Interconnection Committee .................... 155 Number of Major Interconnected Systems in North America..................... 160 NERC Special Reliability Assessments: 1972?1978 ..................................... 161 Significant NERC Milestones in the 1980s ................................................... 162

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Foreword

History can easily be lost as time passes; people move on, and memories fade. This project was undertaken to be sure that we preserve the history of the key events of NERC's first 50 years and recognize the individuals responsible for NERC's many accomplishments during this period. The story records how NERC evolved from a voluntary international organization that was formed by electric utilities across North America and dedicated to the maintaining and enhancing the reliability of the interconnected Bulk Electric System to the Electric Reliability Organization today. NERC is now responsible for developing, adopting, and enforcing Reliability Standards under U.S. law and assessing the reliability of the bulk power system and for developing reliability standards and monitoring compliance and performing assessments of the interconnected system in Canada and the northern portion of Baja, Mexico.

This history illustrates how NERC has met the challenges presented by the many changes that have occurred over this 50-year period in technology and industry structure while maintaining a steady, laser-like focus on its fundamental public interest mission. As this history illustrates, it can be said with certainty that the reliability and security of the North American grid has been protected and significantly enhanced through the hard work of NERC, its Regional Entities, and many stakeholders. This highly reliable system is essential to the health, safety, and economic well-being of North America.

Many thanks to former NERC senior vice president David Nevius, the lead writer and researcher for this project. His 35 years of service to NERC, his prodigious memory, and the many relationships he formed while at NERC have been crucial to the success of this project. It is impossible to recognize here everyone else who has contributed. They are many. A special thanks though to Earl Nye, Mike Greene, Don Hodel, and Paul Barber, who provided Dave with many insights and memories. Thanks also to NERC's staff who worked on this project, including Mark Lauby, Andy Rodriquez, Kimberly Mielcarek, Amy Desselle, Terry Campbell, and Alex Carlson.

Roy Thilly NERC Board of Trustees Chair

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