Regulatory Clarity for Prudency, Compliance,
Ratemaking and Affiliate Pricing

The Federal Energy Regulatory Commission (FERC) issued two positive orders (FERC Docket Nos. EL15-76 and EL16-20) in August 2015 and March 2016 to Grid Assurance that provides regulatory clarity on issues related to prudency, compliance, ratemaking and affiliate pricing for transmission-owning entities participating in and subscribing to Grid Assurance as a way to strengthen transmission grid resiliency.

This regulatory clarity enables Grid Assurance to contract with the critical mass necessary to create economies of scale needed to build the inventory of spare equipment required to maximize the reliability and resiliency benefits of the Grid Assurance sparing business model.

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Grid resiliency is a top priority for the nation. Federal agencies and policymakers have identified enhancing grid resiliency and security as critical to protecting customers from the devastating effects of prolonged transmission outages.

Ensuring both physical and cyber grid security requires teamwork. The electric industry, government and private companies are working together to protect the grid against high-impact, low-frequency (HILF) events.

Grid Assurance is working closely with the Federal Energy Regulatory Commission, Department of Energy, Department of Homeland Security, Edison Energy Institute, North America Electric Reliability Corporation and other entities to improve grid resiliency following high-impact events.

In addition, to the positive orders that FERC issued in August 2015 and March 2016 to Grid Assurance, the Department of Energy released their Strategic Transformer Reserve Study to Congress in March of 2017. Their recommendation stated that the "most efficient and effective approach is one which builds on industry-based approaches and their on-going efforts to achieve greater transformer resilience in the face of the evolving threats."

Based on DOE's technical analysis and examination of current industry efforts, DOE evaluated options for establishing a strategic transformer reserve and "recommends encouraging and supporting an industry-based option driven by voluntary industry actions and North American Electric Reliability Corporation's Reliability Standard (NERC) CIP-014-2 requirements, approved by the FERC."

Grid Assurance is the most robust industry-led solution for transformer resiliency. The services align with DOE's recommendation and Grid Assurance is poised to have replacement transformers ready for delivery by early 2019.

DOE's report also "recommends that one year from the date of this report, it work with FERC and electricity industry partners to re-assess whether sufficient progress has been made through this approach to warrant continuation or alternative action by Government." Grid Assurance is uniquely positioned to secure the critical mass of subscribers within DOE's deadline and impending government regulation.

Grid Assurance will continue to work with regulatory bodies, policy makers, industry groups and transmission owning companies to achieve industry leadership in the emergency sparing service.