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 in June of the NERC reliability standards, 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 for supporting documentation is significant. 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 have been light-handed with the assessment of financial penalties. However, it is likely that this stance will change in 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 documentation, and the auditability of documentation required by NERC, is often in need of improvement.