Energy Regulators Dial Back Grid Reliability Standards Amid COVID-19 Concerns

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Last week the North American Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission (FERC) jointly announced the suspension of certain rules through July 31, 2020, in an effort to allow utility operators to “focus their resources on keeping people safe and the lights on during this unprecedented public health emergency.”[1]  NERC, a nonprofit corporation devoted to reducing risks to the reliability and security of the electrical grid across North America, develops and enforces the Reliability Standards, which are designed to ensure that the industry is able to meet the electricity needs of end-use customers despite unexpected equipment failures and other variable factors such as the COVID-19 pandemic.  FERC oversees NERC in the United States and regulates the interstate transmission of electricity. 

On March 18, 2020, registered entities were advised that NERC and FERC will consider the impact of the coronavirus in complying with Reliability Standards as follows:

  • The effects of the coronavirus will be considered an acceptable basis for non-compliance with obtaining and maintaining personnel certification, as required in Reliability Standard PER-003-2, for the period of March 1, 2020 to December 31, 2020. Registered entities should notify their Regional Entities and Reliability Coordinators when using system operator personnel that are not NERC-certified.
  • The effects of the coronavirus will be considered an acceptable reason for case-by-case non-compliance with Reliability Standard requirements involving periodic actions that would have been taken between March 1, 2020 and July 31, 2020. Registered entities should notify their Regional Entities of any periodic actions that will be missed during this period.
  • Regional Entities will postpone on-site audits, certifications and other on-site activities at least until July 31, 2020. Registered entities should communicate any resource impacts associated with remote activities to their Regional Entities.

Last week’s announcement recognizes the remote working environment that many in the country are transitioning into because of COVID-19, and therefore the relaxation of the Reliability Standards allows utility companies to focus resources on providing power.

The recent guidance is just the latest action taken to address the impact of the world-wide health crisis on the electrical utility industry.  Back in February 2020, the Electricity Information Sharing and Analysis Center (E-ISAC) issued an all-points bulletin related to COVID-19, highlighting the risks of a pandemic, addressing potential supply chain issues stemming from a manufacturing slowdown in Asia, and alerting entities of the possibilities of workforce constraints.  The bulletin also suggested that stakeholders should review their supply chain risk and business continuity plans. 

On March 10, 2020, NERC issued a public level 2 alert on contingency planning related to the virus and requested that registered entities report the status of their emergency pandemic plans by March 20, 2020.  NERC will be aggregating responses and providing a status report on the emergency plans to FERC.  The alert included recommendations to utility providers for the following topics to be include in the responses: consideration of travel advisories in event planning, reinforcement of personal hygiene practice across the workforce, updating business continuity planning to adequately mitigate impacts of a pandemic in an organization’s footprint, assessing an organization’s resilience against disruption to availability of critical materials and support resources within the supply chain, assessing the need to adjust planned construction and maintenance activities, and anticipating and preparing for coronavirus-themed social engineering attacks.   

Also on March 10, 2020, the Electricity Subsector Coordinating Council (ESCC), which is comprised of private and public sector electric power industry leaders, issued “A Resource Guide” for “Assessing and Mitigating the Novel Coronavirus (COVID-19)”[2]. The Resource Guide is meant to serve as a resource to the electric power industry so that leaders can make informed localized decisions in response to the health crisis, highlighting data points, stakeholders, and options to consider in making decisions about operational status, while protecting the health and safety of employees, customers and communities.

As with nearly every industry impacted by the COVID-19 health crisis, regulators and electrical utility providers will have to continue to adapt to address the competing concerns of balancing the need for grid reliability with the health and safety of the electrical utility industry workforce.