FERC Confirms that NERC Must Comply with Its Directives Regarding Reliability Standards

On September 16, 2010, the Federal Energy Regulatory Commission ("FERC" or the "Commission") re-affirmed its March 18, 2010 order directing the North American Electric Reliability Corporation ("NERC") to revise its reliability standards development process in order to ensure that the process cannot be used to negate a Commission directive.¹ The Commission clarified that it was not requiring NERC to change its rules of procedure so that the Commission could dictate the specific content of the reliability standards, but rejected the suggestion that NERC could respond to Commission directives by simply "considering" them during the standards development process and deciding not to comply. Rather, in order to satisfy NERC's statutory obligations under Section 215(d)(5) of the Federal Power Act, NERC must develop a proposal that affirmatively responds to the concern or goal underlying the directive, and it must provide a technical analysis if it takes a different approach.