As stated on the NERC website: “The North American Electric Reliability Corporation (NERC) is a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid. NERC develops and enforces reliability standards; annually assesses seasonal and long-term reliability; monitors the bulk power system through system awareness; and educates, trains, and certifies industry personnel. NERC’s area of responsibility spans the continental United States, Canada, and the northern portion of Baja California, Mexico. NERC is the Electric Reliability Organization (ERO) for North America, subject to oversight by the Federal Energy Regulatory Commission (FERC) and governmental authorities in Canada. NERC's jurisdiction includes users, owners, and operators of the bulk power system, which serves nearly 400 million people.”
NERC was formed as a voluntary organiztaion on June 1, 1968, as the National Electric Reliability Council due to industry recognition that coordination between utilities was needed as the electric grid became widely interconnected. The formation was partly in response to a major blackout in the northeast United States in 1965. In the U.S., the Energy Policy Act of 2005 gas the Federal Energy Regulatory Commission (FERC) jurisdiction over reliability standards. In 2006, FERC certified NERC as the ERO responsible for developing and enforcing mandatory electric reliability standards under the Commission's oversight.
The NERC organization includes six regional reliability councils:
- Midwest Reliability Organization (MRO)
- Northeast Power Coordinating Council (NPCC)
- ReliabilityFirst (RF)
- SERC Reliability Corporation (SERC)
- Texas Reliability Entity (TRE)
- Western Electricity Coordinating Council (WECC)
The entities that belong to the regional councils account for virtually all of the electricity supplied in the U.S., Canada, and the northern portion of Baja California, Mexico. NERC sets forth standards for operation to ensure reliability, and each reliability council implements the standards in their region. Historically dominated by utilities, the regional councils opened their memberships to independent power producers and power marketers in 1994. Members now include transmission owners, Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs), load serving entities (LSEs), utilities, merchant generators, marketers, large end users, and government agencies.
Program areas and departments of NERC include:
- Compliance and enforcement
- Organization registration and certification
- Standards
- Electricity Information Sharing and Analysis Center (E-ISAC)
- Reliability assessment and performance analysis
- Reliability risk management
- System operator certification and credential maintenance program
Reliability standards set forth by the regional councils require control areas to maintain a balance between generation and load under normal conditions, re-establish the generation-load balance within 15 minutes of unexpected failure of a generator or transmission line, maintain frequencies and voltages within specific bounds, maintain generation reserves to respond to any disturbances, and avoid overloading transmission lines.
These reliability standards require system operators to plan not only for forecast demand needs plus a reserve factor to cover mis-forecasting, but also for contingencies for outages of system components (power plants or transmission lines). Thus, the standards require control areas to maintain a certain amount of available reserves equal to the greater of:
- A percentage of forecasted loads, or
- The most severe single contingency of generation or transmission loss.
These reserves must be available to quickly bring supply and demand back into balance should there be an unexpected outage of either generation or transmission.