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Consumer-Owned Utilities Not Immune to Federal Reliability Standards

March 22, 2010

Some changes to the nation’s energy policy enacted by Congress as part of the 2005 Energy Policy Act (2005 EPAct) are only just now starting to have a real impact on consumer-owned utilities. In part as a response to a regional-scale blackout in 2003, Congress used the 2005 EPAct to allow the Federal Energy Regulatory Commission (FERC) to impose mandatory reliability standards on all owners, operators and users of the bulk power system. As “users” of the system, consumer-owned utilities are subject to these standards, even though they usually fall outside of FERC’s regulatory jurisdictional authority pursuant to Section 201(f) of the Federal Power Act. With regulation comes enforcement, and with enforcement comes the risk of penalties. In the case of reliability standards, these penalties can be quite severe... Read More

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