Memorandum of Understanding between the National Energy Board and the North American Electric Reliability Corporation - Questions and Answers

1. What is an ERO?

An Electric Reliability Organization or ERO, is an independent, international organization that develops, implements and enforces reliability standards for bulk power systems. An ERO monitors the transmission lines, cables and facilities that make up these networks through inspections and audits to ensure the owners and operators are compliant with the reliability standards. If a power grid is found to be non-compliant, an ERO has the authority to impose penalties.

2. What is a reliability standard?

Reliability standards define the requirements for the safe and reliable operation of our bulk electric system. For example, one of the most common causes of a power line short circuit are tree branches touching a transmission line. NERC has developed a standard specifying the distance that must be maintained between the treetop and a power line under normal operating conditions.

3. What is a bulk power system?

The bulk power system is a network of generating plants, power lines, circuits and substations that form the backbone of our electricity grid. The bulk power system transfers electric power over long distances. It does not include the electricity distribution lines which deliver power from the substations into our homes.

4. What power lines does the NEB regulate? I thought electricity fell under the province's jurisdiction.

The NEB has jurisdiction over international power lines between Canada and the United States. This represents less than 1% of the high voltage transmission lines in Canada. Many of these interconnections are vital for the transfer of electricity between Canada and the U.S. The remainder of Canada's bulk power systems falls under provincial jurisdiction.

5. Is this MOU a response to the August 2003 blackout in central Canada?

In the aftermath of the August 2003 blackout that left 10 million people in Ontario without electricity, the Power System Outage Task Force assigned to investigate the event released 46 recommendations. Topping the list was a recommendation encouraging the development of reliability standards by an independent, international electric reliability organization (ERO). Acknowledging NERC as the ERO is one step towards ensuring that our bulk power grid is safe, reliable and adequate.

6. What are the implications of this Memorandum of Understanding (MOU)?

This MOU will promote the cooperative exchange of experience, information and data. As part of this commitment to share information, NERC will monitor international power lines under the NEB's jurisdiction to ensure compliance with reliability standards and provide the NEB with consistent and transparent reporting on their findings.

7. Why would the NEB give authority for Canadian Power Lines to an American organization?

Canada and the U.S. share a common bulk power system. If there is a disturbance on the American side of the grid, the impact could be felt in both countries. For example, the 2003 blackout originated in Ohio, but ultimately affected 40 million people on both sides of the border. Therefore, Canada and the U.S. routinely coordinate their actions.

NERC is sponsored by utilities from across North America. Although NERC's head office is in Princeton, NJ, their Board of Trustees is made up of representatives from both countries. Furthermore, NERC actively works with Canadian authorities to determine the needs of Canadian stakeholders.

8. What is in this for NERC?

Since its formation in 1968, NERC's mission has been to promote the reliability of bulk electricity supply in North America. NERC has been developing reliability standards for quite some time, however, as the ERO, NERC will now support the NEB's goal of implementing mandatory reliability standards for international power lines.

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