The North American Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission (FERC) are two important organizations in the electric power industry in the United States. Although they are often mentioned together, they have distinct roles and responsibilities. Below we’ll explain the difference between NERC and FERC.
NERC is a non-profit international regulatory authority responsible for ensuring the reliability and security of the bulk power system in North America. NERC was established in 1968 as the Electric Reliability Council of Texas (ERCOT) and later expanded to cover the entire North American continent. It is governed by a board of directors and funded through assessments of its member utilities. NERC develops and enforces mandatory reliability standards for the bulk power system, which includes transmission facilities and generators with a capacity of more than 100 MW. It also conducts assessments and audits to ensure that these standards are being followed and coordinates with other organizations to respond to emergencies or threats to the power system.
FERC, on the other hand, is an independent agency of the United States government that regulates the interstate transmission of electricity, natural gas, and oil. It is also responsible for licensing and regulating hydroelectric projects, including those located on federal lands. FERC was created by the Department of Energy Organization Act in 1977 and is led by five commissioners appointed by the President and confirmed by the Senate. FERC has jurisdiction over the wholesale electricity market and is responsible for ensuring that rates for transmission and sale of electricity are just and reasonable. It also has authority to investigate and resolve disputes between utilities and other parties.
In summary, NERC is a non-profit regulatory body that focuses on ensuring the reliability and security of the bulk power system, while FERC is a government agency that regulates the interstate transmission of electricity and other energy commodities, as well as hydroelectric projects. Both organizations play a vital role in the electric power industry and work together to ensure the safe and reliable operation of the electric grid.