ScottMadden's Approach to Ensuring Compliance with New NERC Reliability Standards
A brief presentation by three ScottMadden partners who are actively engaged in supporting clients with this most important issue Cristin Lyons, Jere Jacobi, and Richard Starkweather.
Since the approval of the NERC reliability standards in June, utilities
have been evaluating their levels of compliance, both in terms of
formality of operating procedures and completeness of documentation
necessary to show compliance. Several of our clients found that the
level of effort required to conduct an initial self-assessment, address
mitigation issues, and assemble the relevant documentation was greater
than they anticipated.
The level of detail required of
supporting documentation is significant. As reported in the October 2,
2007 edition of SNLi, David Hilt, Vice President and Director of
Compliance at NERC, said recently "we've been at this for two years,
and we're now beginning to understand what kind of resources this is
going to take. The bulk of what we're seeing is documentation
violations-people who are probably doing the right things, but not
documenting it correctly." NERC and the FERC continue to encourage
self-reporting of violations, and to date they have been light-handed
with assessing financial penalties. It is likely, however, that this
stance will change in early 2008.
With the potential for
significant penalties on the horizon, ScottMadden has been working with
clients to address compliance and documentation issues. We are finding
that appropriate procedural knowledge exists within the utilities, but
the level of formal documentationand the auditability of documentation
required by NERCis often in need of improvement.