Gent and Nevius will discuss

1. NERC's transition to the North American Electric Reliability Organization (NAERO) and what NAERO's functions will be and
2. The reliability legislation that NERC is seeking to get passed in Congress.

NERC believes an urgent need exists for federal legislation to establish an independent, industry, self-regulatory, electric reliability organization to ensure the continued reliability of the interstate and international high-voltage transmission grids. There has been a marked increase in the number and seriousness of violations of voluntary reliability rules. The new reliability organization, NAERO, would develop, promote, and enforce reliability standards that concern the operational security of the bulk electric system only.

The U.S. Senate passed S. 2071, The Electric Reliability Act 2000, on June 30, 2000. The passage of this bill, which closely follows the industry consensus reliability language, moved NERC one step closer to enactment of the needed legislation that would enable them to form a self-regulatory reliability organization. While the industry awaits the passage of the final piece of necessary federal legislation, NERC continues to restructure itself so it will be prepared to promptly transition into NAERO and assume its new role in the electricity supply industry in North America.

NERC is a not-for-profit company formed as a result of the Northeast blackout in 1965, whose mission is to promote the reliability of the bulk electric systems that serve North America. It works with all segments of the electric industry as well as with customers to "keep the lights on" by developing and encouraging compliance with rules for the reliable operation of these systems.

Since its formation, NERC has operated as a voluntary organization that is dependent upon the reciprocity and mutual self-interest of all those involved. With the continued growth of competition and the structural changes taking place in the industry, incentives and responsibilities are changing, making it necessary for NERC to transform from a voluntary system of reliability management to one that is mandatory and has enforcement power with the backing and support of U.S. and Canadian governments.