FERC Bolsters Electric Reliability with ERO Petition Support

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Vice President, Energy & Utilities Compliance, AssurX Inc.

FERC’s Order accepting with conditions (issued on March 15, 2012) regarding the ERO’s petition for approval of the “Find, Fix, Track and Report” (FFT) initiative was another positive step forward for electric reliability, NERC, Regional Entities (REs), and the registered entities.

The FFT process changes and improves the way REs and NERC address “Possible Violations.”  As a reminder, the petition proposes three tracks to address possible violations that are submitted to the REs and NERC:

  1. A Notice of Penalty (in “Full” or “Spreadsheet” format)
  2. An FFT informational filing; or
  3. A dismissal

If the possible violation is determined to pose a “Lesser Risk” to the Bulk-Power System and meets certain qualifications, the possible violation may be addressed through an FFT informational filing.  These FFT informational filings would not be subject to a penalty, but would count as part of the registered entity’s compliance history.

NERC explains in their petition that the FFT process will promote reliability excellence by ensuring issues are mitigated and corrected. Also it will allow greater resources and attention be devoted to matters that pose a more serious threat to reliability of the Bulk-Power System.

This blog highlights why this is such a positive step forward for the industry.  There has been much discussion over the last few years about the importance of registered entities self-identifying reliability issues, developing an internal culture of compliance/reliability, and to mitigate self-identified issues.  NERC and REs track the issues the registered entities have self-reported.  NERC states that 70% of all identified compliance issues are self-identified by the registered entities.  The other 30% are discovered through the ERO’s CMEP.

With approximately 200 new possible violations being reported to the ERO each month, resources from all entities must focus on what will most impact reliability to the Bulk-Power System.  The REs and NERC have discussed the FFT initiative in workshops, webinars, and Trade Association meetings over the last 18 months.

How does a registered entity ensure that they will continually improve their internal compliance program?

The industry must embrace building a Corrective Action Program that is accepted by all employees and vendors.  The registered entities spend time training and familiarizing employees with the NERC 693 and CIP standards.  There must be a mechanism to identify possible violations and/or near misses.  The nuclear and life science industries have been doing this for decades.  It will take time for transmission and generation owners and operators, load-serving and distribution entities to develop their internal compliance processes.

AssurX has been working with clients for close to 20 years building “Corrective and Preventive Action (CAPA)” processes.  These companies know that by quickly identifying an issue and with proper disposition it will not only improve their compliance program, but also improve their overall business.

Corrective and Preventive Action (CAPA) Process Flows

Corrective and Preventive Action (CAPA) Process Flows

For the FFT to be successful, the registered entities must demonstrate that they have addressed the underlying possible violation, describe any corrected actions and maintain evidence of such corrective actions.  This will all need to be available for verification by the ERO through audits, spot checks, random sampling or other inquires that might be identified later.

A corrective action tracking software program has been used by regulated industries for many years.  Audit history and archived records with employee names and date stamps are what the regulators will be looking for in the future.

The FFT initiative will be maturing over the next year, but this is an excellent step forward.  I will be writing future blogs discussing developments of the FFT process and what it takes to develop a strong CAPA program.  Some of the topics that will be discussed in building a CAPA program:

  • CAPA Initiation
  • Internal Investigation/Root Cause Analysis
  • Action Planning
  • Mitigation and Tracking
  • Auto-Escalation, Notification and Reminders
  • Effectiveness Verification
  • Oversight

If you are interested in learning more about the AssurX compliance program and implementation of CAPA, please do not hesitate to contact us.

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One Platform. Every Solution.
AssurX Quality + Compliance ManagementA single versatile system can improve quality, compliance and streamline workflow