On May 28, 2015, the North American Electric Reliability Corporation (“NERC”) issued its annual State of Reliability Report (the “Report”), and made several key findings regarding the reliability of the Bulk-Power System (“BPS”).  According to NERC, the goal of the Report was to “quantify risk and performance, highlight areas for improvement, and reinforce and measure success in controlling risks to reliability.”  NERC based much of its analysis on data collected from January 2014 through December 2014.

In the Report, NERC made the following key findings:

  1. Weather continues to stress BPS reliability.  NERC found, using its Severity Risk Index, that all of the top-10 most severe events in 2014 were initiated or exacerbated by weather.
  2. There was no loss of load due to cyber or physical security events in 2014, based on NERC’s review of newly-developed security performance metric data.
  3. The average severity of transmission outages declined in 2014.
  4. There was a significant decrease in unplanned transmission outages resulting in a loss of load, with three events occurring in 2014, down from six in 2013.
  5. From 2012 to 2014, the Eastern, Western, ERCOT, and Québec Interconnections have shown steady frequency response performance, trending above the recommended levels at all times during the time period studied.
  6. While the rate of protection system misoperations began to decline in 2014, the protection system misoperations that do occur continue to increase the risk to BPS reliability.  NERC illustrated this point by reference to its finding that 68% of transmission-related reliability events have protection system misoperations associated with them that either: (i) initiated the event; or (ii) caused the event to be more severe.
  7. The use of Energy Emergency Alert Level 3 (“EEA3”) continues to decline, with only four EEA3 events declared in 2014, and only one resulting in load shed.  An EEA3, as defined in Reliability Standard EOP-002-3.1, is issued when a Balancing Authority or Load-Serving Entity “foresees or has implemented firm load obligation interruption.”

In addition to its findings, NERC made various recommendations associated with its key findings, and introduced new compliance and security metrics to help assess risk to the BPS in the future.

A copy of the Report may be found here.