Reliability Compliance

The North American Electric Reliability Corporation (NERC) develops and enforces rules and standards protecting the North American bulk power system, which serves more than 334 million people. In addition to developing reliability standards, NERC also conducts annual reliability assessments, monitors the bulk power system and educates, trains and certifies industry personnel. These rules and standards are constantly evolving, and they affect virtually everything we do in planning, operating, maintaining and protecting the grid on a daily basis.

We engage our employees through continuous communication about their contribution to AEP’s reliability compliance. This includes basic facility security measures, such as displaying an employee identification badge at all times, following facility access control policies like escorting visitors in secure areas, and maintaining strong passwords. Additionally, NERC requires a rigorous program to maintain and operate bulk electric system protection equipment. These security, operations and maintenance practices are necessary and effective in preserving the integrity of the services we provide and contribute to the safe operation of our assets.

We believe reliability compliance – protecting the grid – is a core component in our jobs, similar to our culture of working safely. Every employee has a role in NERC compliance, and we are developing plans to educate employees about their accountability and developing new metrics for NERC compliance to help us continuously improve and stay in compliance.

The reliability standards in place today require processes and procedures to maintain and advance the reliability and resiliency of the bulk electricity system. Noncompliance with NERC reliability standards can lead to serious financial consequences and reputational risk. That’s why maintaining a culture of compliance is a priority for AEP.

AEP successfully achieved compliance with the most recent enforceable version of Critical Infrastructure Protection (CIP) Standards, effective July 1, 2016. AEP’s reliability compliance was audited twice in 2016, and we anticipate being audited again later in 2017. In addition to audits that focus on what is required today, we also need to prepare for tomorrow’s requirements. To that end, AEP participates in NERC’s Standards Development Process, which is a cycle of enhancing existing and defining new requirements.

NERC Reliability Standards continue to expand in complexity and scope, evidenced by the current development of standards addressing geomagnetic disturbance mitigation as well as cybersecurity supply chain risk management, among others. To adapt to these changes and advance the maturity of our reliability compliance program, AEP continues to seek and implement opportunities for improvement.

Risk-Based Compliance Monitoring

Through the Reliability Assurance Initiative (RAI), NERC transitioned to a risk-based compliance monitoring approach. Risk-based compliance monitoring allows NERC to focus its compliance monitoring activities around the highest-risk elements. NERC initiated RAI in 2012 as a means of shifting to a more collaborative process of identifying reliability risks and using that information to better gauge future compliance monitoring and enforcement efforts.

We agree this new reliability philosophy is much more effective and efficient because it allows us to focus on higher-risk issues, thereby boosting system reliability. NERC and the Electric Reliability Organizations (ERO) continue to align their processes to adapt to this risk-based approach.