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On July 16, 2015, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed, among other things, to direct the North American Electric Reliability Corporation (“NERC”) to develop a new or modified Reliability Standard to provide security controls for supply chain management of industrial control system hardware, software, and computing and networking services associated with bulk electric system operations.  Comments are due 60 days after publication of the NOPR in the Federal Register.

On June 18, 2015, the Commission issued two separate Notice of Proposed Rulemakings (“NOPRs”) in which it proposed to approve several mandatory Reliability Standards submitted by the North American Electric Reliability Corporation (“NERC”).  The proposed Reliability Standards broadly address the areas of Transmission Operations (“TOP”), Interconnection Reliability Operations and Coordination (“IRO”), Emergency Preparedness (“EOP”), and Undervoltage Load Shedding (“UVLS”).  If approved, the proposed Reliability Standards would replace several currently-effective NERC Reliability Standards.

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.

On May 26, 2015, FERC approved a stipulation and consent agreement (“Settlement”) between FERC’s Office of Enforcement (“Enforcement”) and the North American Electric Reliability Corporation (“NERC”), and the Western Electricity Coordinating Council (“WECC”) and Peak Reliability—WECC’s NERC-certified Reliability Coordinator.  Among other items, the Settlement provides for a $16 million civil penalty against WECC, and resolves FERC and NERC’s investigation of WECC for Reliability Standard violations that contributed to the September 8, 2011 Southwest Blackout.

On May 20, 2015, the North American Electric Reliability Corporation (“NERC”) submitted to the Commission a compliance filing relating to the Reliability Assurance Initiative (“RAI”)—a multi-year effort among NERC and the Regional Entities designed to transition NERC’s Compliance Monitoring and Enforcement Program (“CMEP”) to a “risk-based” approach that focuses CMEP resources on certain activities based on the proportional risk that those activities pose to the reliability of the Bulk Electric System.

On May 14, 2015, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve Reliability Standard TPL-007-1 regarding Geomagnetic Disturbance (“GMD”) Events.  According to the Commission, the Reliability Standard requires applicable Bulk-Power System (“BPS”) owners and operators to conduct initial and on-going vulnerability assessments regarding the potential impact of a benchmark (i.e.,1-in-100 year) GMD event on the BPS as a whole, and on BPS components individually.  In addition, the Commission stated that the proposed Reliability Standard requires applicable entities to develop and implement corrective action plans to mitigate any vulnerabilities identified by such assessments.

On March 3, 2015, the Commission approved revisions to two regional Reliability Standards for the Western Electricity Coordinating Council (“WECC”) region, VAR-002-WECC-2 (Automatic Voltage Regulators) and VAR-501-WECC-2 (Power System Stabilizer), along with their associated violation severity levels, violation risk factors, and implementation plans.

On February 19, 2015, the Commission approved the North American Electric Reliability Corporation’s (“NERC”) proposed implementation of the Reliability Assurance Initiative (“RAI”)—an initiative aimed at creating a “Risk-Based” approach for compliance monitoring and enforcement of mandatory Reliability Standards.  Going forward, NERC believes that RAI will have Electric Reliability Organization (“ERO”) and industry resources more focused on higher-risk issues that significantly impact the reliability of the Bulk Electric System (“BES”).