Representing Members Facing New Regulatory Compliance Obligations

The 2005 Federal Power Act placed new regulatory obligations on utilities of all sizes in the Northwest and across the country by creating mandatory reliability standards. Any Northwest electric utility with a peak-load greater than 25 MW and that is connected to the Bulk Electric System (BES) at 100 kV or higher are required to register with the Western Electricity Coordinating Council (WECC) and the North American Electric Reliability Corporation (NERC) as a “Distribution Provider and a Load-Serving Entity.” This includes many of Bonneville Power Administration’s preference customers and PNGC Power members.

Once registered, utilities are required to comply with applicable Mandatory Reliability Standards and are subject to large financial penalties if found out of compliance. For most electric utilities the financial risk associated with these standards is greater than the financial risk associated with power supply.

Mandatory Reliability Standards touch almost every aspect of electric utility operations. The sheer range and all-encompassing nature of these new obligations is daunting. An electric utility can be registered for up to ten different functions and each function has a whole set of associated reliability standards. Many of the new regulations are ambiguous. However standards and compliance enforcement efforts continue to evolve.

Starting in 2008, to assist member cooperatives with the increasing number of compliance obligations, PNGC assigned a staff member to focus on interaction with a variety of regulatory commissions and agencies. In addition, staff continues to participate in developing and implementing policy in the area of legislative and regulatory affairs for PNGC.

PNGC Power member cooperatives and other Northwest electric utilities are working with WECC to clearly define the BES and acquire a clear understanding of which facilities are subject to the mandatory reliability standards.