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On December 11, 2014, the North American Electric Reliability Corporation (“NERC”) submitted proposed revisions to its Rules of Procedure in order to implement the Risk-Based Registration (“RBR”) Initiative.  If approved, the revisions would significantly modify how NERC assigns responsibility to entities for compliance with mandatory Reliability Standards.

On November 28, 2014, FERC approved a Stipulation and Consent Agreement (“Agreement”) between its Office of Enforcement (“Enforcement”), the North American Electric Reliability Corporation (“NERC”) and the California Independent System Operator Corporation (“CAISO”) relating to the 2011 Southwest blackout in Southern California, Arizona and Northern Baja Mexico that affected 2.7 million customers.  Under the terms of the Agreement, CAISO will pay a combined civil penalty of $6,000,000, with $2,000,000 divided equally among NERC and the U.S. Treasury, and $4,000,000 invested in reliability enhancements measures.  CAISO also agreed to commit to mitigation and compliance measures, and to submit semi-annual compliance reports to Enforcement for at least one year.

On November 20, 2014, the Commission issued an order accepting the Five-Year Performance Assessment of the North American Electric Reliability Corporation (“NERC”).  In its order, the Commission concluded that NERC continued to meet the qualifications necessary for certification as the Electric Reliability Organization (“ERO”) of the United States, and issued additional compliance directives for NERC going forward.

On September 30, 2014, the North American Electric Reliability Corporation (“NERC”) published an analysis of the impacts of the 2013-2014 Polar Vortex on generator performance in the Eastern and Texas Interconnections, and made recommendations as to how to improve performance during future extreme cold weather events.

On September 16, 2014, ISO New England Inc.’s (“ISO-NE”) eighth annual Forward Capacity Auction (“FCA 8”) results took effect by operation of law due to a deadlocked FERC that could not agree to approve or reject the results amid allegations that market power within the auction was not properly mitigated.  As a result, FERC on the same day issued a Show Cause Order requiring ISO-NE to either revise its tariff to allow for independent oversight of import offers prior to each FCA or show cause why it is not required to do so.

On July 17, 2014, FERC issued a notice of proposed rulemaking (“NOPR”) proposing to approve the North American Electric Reliability Corporation (“NERC”) Reliability Standard CIP-014-1.  The goal of the Reliability Standard is to enhance physical security measures for the most critical Bulk-Power System facilities and thereby lessen the overall vulnerability of the Bulk-Power System facilities against physical attacks.  FERC also proposed to direct NERC to develop two modifications to the standard.

On June 19, 2014, FERC approved Reliability Standard EOP-010-1, a new reliability standard requiring certain reliability coordinators and transmission operators of the bulk-electric system to develop procedures to help mitigate the effects geomagnetic disturbances (“GMDs”) have on the bulk-electric system.  Reliability Standard EOP-010-1 was submitted by the North American Electric Reliability Corporation (“NERC”) in response to FERC’s directives in Order No. 779 (see May 20, 2013 edition of the WER), and represents the first of a two-stage process designed to address GMD events.