Risks of NERC Non-Compliance for Renewable Energy Projects – Part Four

The ins and outs of NERC compliance are a challenge even for experienced renewable energy developers and owners. In Parts OneTwo and Three of this four-part series, we covered common NERC mistakes, registration requirements, and the standards that most impact renewable energy projects in the development stage. We will bring this series to a close with a look at the risks associated with non-compliance, plus potential regulatory changes on the horizon.

What are the risks or consequences of not meeting NERC compliance requirements?

There are financial penalties associated with NERC violations. The big number that gets thrown around is a million dollars per infraction per day. That is the absolute worst possible financial penalty and unlikely to happen—though we have seen facilities or organizations that have millions of dollars in fines due to various problems.

Every NERC requirement and procedure has a violation risk factor: low, moderate, high or severe. Each NERC standard has its own set. Within a standard, one of the requirements may be labeled moderate, some may be labeled severe, and others high. There are also different infraction levels, with a chart that determines the fine. If you have a minor infraction of a high severity level risk factor, the fine could be $3,000 a day. If you have a severe infraction of a low severity level risk factor, it could be $125,000 a day.

Are NERC requirements expected to become more or less stringent in terms of solar?

There are currently no solar-specific NERC requirements. However, we do expect NERC requirements to become more stringent by and large. There have been pushes in certain regions to tighten operating requirements as more solar comes onto the grid.

Specifically, we expect to see CIP requirements become broader, with standards that currently only apply to medium and high-impact entities trickling down to low. (For a refresher on NERC CIP low, medium and high-impact entities, refer to Part Three.) There may be additional personnel and training requirements, as well as updates to the CIP-007 system security management standard. 

We also expect to see a rewrite or revision of PRC-024 to make it clearer. As you’ll recall from Part Three, PRC-024 establishes normal deviation in frequency and/or voltage over time, within which you are not allowed to disconnect a generator (inverter). Inverter trip schemes must be set with the PRC-024 requirements in mind.

Developers, engineers and solar companies tend to see PRC-024’s “zone of normalcy” for frequency and voltage as a guideline rather than a requirement, and will set their trip schemes right against that guideline. NERC wants to see trip schemes set as wide as possible, but no narrower than the normalcy zone. Revisions have been on the cards for some time, but the standard writers are taking their time to make PCR-024 as bulletproof as possible in the future.

Trust your NERC compliance to the experts.

We are a trusted partner for full NERC implementation, including NERC engineering and CIP implementation. Our NERC compliance experts also perform long-term compliance management, including compliance asset management, documentation, audit support and periodic submittals.

Let us simplify and streamline the regulatory compliance process so you can focus on the big picture. See our Compliance and Risk Management page for more on how we can help.