FERC has issued its final rule paving the way for incentive-based rate treatment for electric utilities that make certain voluntary cybersecurity investments. As we first noted in 2020 when describing the proposed rule, the final rule provides a new mechanism for promoting cybersecurity of the bulk-power system by rewarding utilities for proactively enhancing their cybersecurity programs beyond the mandatory requirements of the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) reliability standards.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
There are no unimportant North American Electric Reliability Corporation (NERC) reliability standards, but from time to time, NERC and the Regional Entities (Regions) place greater emphasis on certain reliability standards in response to events affecting the grid. With headline-grabbing physical attacks on power substations across the country in recent months, one of NERC’s greatest current priorities is evaluating the effectiveness of its physical security standards, most notably CIP-014.
FERC issued three orders focused on increasing regulations for inverter-based resources (IBRs) in fulfillment of one of its primary goals to protect the reliability of the bulk-power system. FERC ensures this reliability through the North American Electric Reliability Corporation (NERC), an independent Electric Reliability Organization that develops and enforces mandatory reliability standards. The reliability standards are only mandatory for certain entities registered with NERC, but most IBRs are not required to register and therefore are not obligated to follow the reliability standards.
As part of a long-standing series of joint meetings, FERC and the Nuclear Regulatory Commission (NRC) will be hosting a joint meeting on March 31, 2022. The meeting will address electric system reliability and nuclear plants, and will include presentations.
The North American Electric Reliability Corporation (NERC) filed its 2022 NERC Standards Report, Status and Timetable for Addressing Regulatory Directives summarizing the progress made and plans for addressing the reliability standard-related directives issued by applicable governmental authorities. NERC reported that since March 29, 2021, the date of NERC’s last annual report, it filed petitions with the Federal Energy Regulatory Commission (FERC) addressing four reliability standards-related directives.