2010 Report - Pennsylvania Public Utility Commission

Regional Reliability OrganizationsIn Pennsylvania, all major electric distribution companies are interconnected with neighboringsystems extending beyond state boundaries. These systems are organized into regional entities –regional reliability councils – which are responsible for ensuring the reliability of the bulk electricsystem.North American Electric Reliability CorporationIn 1968, electric utilities formed the North American Electric Reliability Council (NERC) topromote the reliability of the electricity supply for North America. Since its formation, NERC hadoperated as a voluntary organization, dependent on reciprocity and mutual self-interest. Due to therestructuring of the electric utility industry, NERC was subsequently transformed from a voluntarysystem of reliability management to one that is mandatory, with the backing of U.S. and Canadiangovernments. The mission of the new organization is to develop, promote and enforce reliabilitystandards for the bulk electric system.On July 20, 2006, NERC was certified as the Electric Reliability Organization (ERO) in the UnitedStates, pursuant to Section 215 of the Federal Power Act of 2005. Included in this certificationwas a provision for the ERO to delegate authority for the purpose of proposing and enforcingreliability standards by entering into delegation agreements with regional entities.Effective Jan. 1, 2007, NERC and the North American Electric Reliability Corporation merged,with the latter being the surviving entity (also referred to as NERC). As of June 18, 2007, theFederal Energy Regulatory Commission (FERC) granted NERC the legal authority to enforcereliability standards, and made compliance with those standards mandatory.NERC oversees the reliability of a bulk power system that provides electricity to 350 millionpeople, has a total demand of 830,000 megawatts (MW), has 211,000 miles of high-voltagetransmission lines (230,000 volts and greater), and represents more than $1 trillion worth of assets.NERC’s members currently include eight regional reliability councils. Members of these regionalcouncils include investor-owned utilities, federal and provincial entities, rural electric cooperatives,state/municipal and provincial utilities, independent power producers, independent systemoperators, merchant electricity generators, power marketers, and end-use electricity customers, andaccount for virtually all the electricity supplied in the United States, Canada, and a portion of BajaCalifornia Norte, Mexico. The regional council operating in Pennsylvania is ReliabilityFirstCorporation, which is the successor organization to three former NERC Regional ReliabilityCouncils: MAAC, ECAR and MAIN.NERC’s North American Transmission Forum, formed in 2007 to improve the operations andreliability of the electric power systems in North America, has recently organized as anindependent non-profit corporation. The Forum’s membership has grown to 54 transmissionowning utilities in the United States and Canada, representing 70 percent of the countries’ totalelectricity demand. Members include Allegheny Power, Duquesne Light, Exelon, FirstEnergy,PJM Interconnection and PPL.2Pennsylvania Public Utility Commission