NERC Provides Guidance on Delegating Reliability Tasks

Article by Daniel E. Frank, Caileen N. Gamache and Catherine M. Krupka

Originally published April 21, 2010

In a Compliance Process Bulletin issued yesterday, the North American Electric Reliability Corporation (NERC) provided guidance to entities registered for compliance with the mandatory and enforceable Reliability Standards on delegating reliability tasks to third parties. In sum, NERC will hold a registered entity responsible for compliance with, and accountable for any violations of, the Reliability Standards, even if the registered entity has contractually assigned its performance obligations to a third party. The third-party assignee may have contractual liability to the registered entity for any penalties resulting from violations of the Reliability Standards, but the registered entity would bear the liability in the first instance. To ensure greater clarity in the allocation of responsibility and accountability, NERC offered guidance to registered