Role of NERC and Engineering Standards in Grid's Reliability

Electricity defines everyday life in the United States. Our power grid is a huge achievement of engineering, technology, and infrastructure. In this country, we just assume electricity will be available anytime and practically everywhere — and overwhelmingly, it is.

This reliability of the electric grid does not arise spontaneously. It must be engineered. Over 3,000 diverse institutions compose the U.S. grid, including those that generate, transmit, and distribute power, and those with overarching regulatory and coordination responsibilities. These include for-profit public corporations, municipal utilities, cooperatives, federal power agencies, federal regulatory agencies, state regulatory agencies, non-profits responsible for reliability, and professional societies. Grid reliability emerges from all this institutional and technological complexity, and is a commons.

Pursuant to the Energy Policy Act of 2005, the Federal Energy Regulatory Commission has considerable authority over electric grid reliability, which it has delegated in considerable part to the non-profit North American Electric Reliability Corporation, or NERC. It in turn relies on, among others, Regional Reliability Organizations, and the Institute of Electrical and Electronics Engineers, a professional society.

NERC is a deeply technological institution. As an example of a tiny sliver of its purview and approach, consider its recently released report “Joint Review of Protection System Commissioning Programs.” NERC estimates that 18 to 36 percent of “misoperations” (within the rather narrow scope of that report) were due to issues that could have been caught in testing, before components were placed in service. In turn, it relies on IEEE WG I-25, a reference document containing a number of best practices, esoterically titled “Commissioning Testing of Protection Systems.”

From its very pores, this IEEE document seethes integrity. In its overview, we find a prominent list of six major attributes of the engineering system the institute seeks. They are, in rank order: safety, training and experience of professional personnel, and three other human factors, with the sole engineering issue, bulk electric system integrity, listed dead last. These folks know how troubles arise in complex engineering systems. They focus on people.

At the broadest level, I crudely divide “the law” into means to resolve conflicts (e.g., litigation and mediation), versus means to promote cooperation (e.g., creating and managing institutions, norms of behavior, and formal standards). Electric grid reliability must necessarily be grounded in cooperation, trust, and human and engineering integrity, for a couple reasons.

First, technical aspects of grid reliability are a galaxy beyond the ken of essentially all attorneys and policymakers, and indeed of any scientist or engineer without deep subject matter expertise. This IEEE reference document, for example, refers to a bewildering array of technical concepts, including electricity schematics, relay diagrams, phasing, and loading of circuits. Even when the law allows it, litigation is a wholly unsuitable way to challenge, amend, or alter an engineering standard, or indeed any highly technical subject matter.

Second, in a complex system such as the electric grid, any conflict or litigation will have unwanted reverberations, just as a storm in one state can cause power outages hundreds of miles away. The grid exists because it is interconnected — hence it must be grounded in cooperative behavior. More generally, IEEE and other professional engineering society standards promote cooperation and integration, not just for the grid, but throughout our interconnected economy. Continuing disputes and fighting would not allow us to reap the benefits of integration.

Alas, there are bad actors. Consider Pacific Gas and Electric Company, convicted in 2016 of violations of the Natural Gas Pipeline Safety Act of 1968, and for obstructing a National Transportation Safety Board investigation. Later, it pleaded guilty to 84 counts of involuntary manslaughter in the 2018 fire that quite literally burned Paradise to the ground. It is now once again under criminal indictment, for a 2020 fire in Shasta County, California.

It is fortunate that the great institutional cultures of NERC and the IEEE are not easily changed. Yet it is equally unfortunate that PG&E’s institutional culture seems impervious to change. When I see an effort to reform a bad institutional culture, I am reminded of Mark Twain’s words in Huck Finn, “He reckoned a body could reform the ole man with a shot-gun maybe, but he didn’t know no other way.”

Humans being humans, mistakes are inevitable. As the technical subject matter becomes ever more daunting, and the engineering systems ever more complex, we must trust that institutions and individuals will operate with the highest levels of integrity. Unfortunately there are serious limits to independent verification and oversight.