t’s one of those things that keep utility execs awake at night.
Regulatory requirements and the risks and challenges associated with reporting and compliance are growing oncerns for utility managers the world over. More aggressive eliability standards are becoming the norm and forward-ooking utilities now view responsive and efficient compliance ias a vital competitive tool in the global energy marketplace. In the U.S., the Federal Energy Regulatory Commission has the authority to certify an electric reliability organization to develop and enforce mandatory reliability requirements, with oversight for certain environmental matters. As a result, utility ompanies must comply with standards dictated by the North American Energy Reliability Corporation (NERC) in addition o various state and local public service commission mandates. They also must meet the financial mandates of Sarbanes Ox-ey, increasingly stringent environmental health rules and other governmental requirements. Failure to comply results in substantial fines, not to mention serious image problems with the
Author
investment community and the public at large.
Larry Kuhl is global In this era of growing financial and competitive
utilities business pressures, many U.S. utilities are filing rate cases, often for
development and alliance the first time in years. Rate case efforts are complicated and
manager at Microsoft. highly public and critically important to utilities seeking to
For more than 29 years increase revenue, obtain funding to support higher operating
he has been working costs and asset or technology projects, and deliver value to
with utilities to identify, demanding shareholders.
develop and implement Further complicating the challenge, few utilities have the
the best business solu- processes or the automated systems needed to manage these
tions to solve the critical pressing regulatory compliance demands. Companies that do
issues utilities face. have formal systems typically rely on manual or semi-automat-
ed solutions, often developed piecemeal by in-house staffers.
Home-grown solutions rarely deliver the performance needed
in today’s critical regulatory environment and often lead to
higher overall compliance costs. Utilities have long needed
better tools to manage the regulatory compliance process.
Next-generation compliance Utilities can now leverage a new generation of automated compliance systems designed specifically to enhance collaboration, accelerate reporting and reduce the cost, complexity—and risk—of regulatory compliance. This powerful new class of software and web-based solutions fully automates the entire workflow needed to respond to energy industry compliance requirements. Utilities can use these systems to improve operational efficiencies, make their workforce more productive, and achieve mission-critical reliability, environmental and rate case reporting objectives.
by Larry Kuhl
Fiscal
Accountability
(e.g.: SOX)
Grid
Reliability
Health & Safety
Regulatory Risk
Environment
Market
Monitoring
Customer Service
Rates/ Tariffs
Utilities worldwide deal with these compliance issues.
In the April 2007 IDC report, “2007 Critical Business Initiatives Driving IT: Your Industry Opportunity Guide” (Doc #206552), the authors write, “IT investments take all forms to support compliance: archiving tools, storage, server technologies, reporting, and an SOA architecture to make the captured data more meaningful and usable across the business.”
To meet NERC and regional compliance standards, utilities can adopt software that automates previously manual processes to manage compliance, responsibility, accountability and audit-readiness. Software often comes pre-loaded with all NERC and applicable regional standards, requirements and measures.
The best NERC compliance systems incorporate a range of automated collaboration, tracking and quality assurance features, from role assignments and security protections to logs, monitoring, alerts and monthly tracking. Each step of a required NERC quarterly report can be automated so that no steps are missed and the report is submitted accurately and on time. Administrators can assign roles using the software, which also monitors progress and requires responses based on responsibility areas.
“Utilities have really been searching for a way to track and manage NERC and other compliance programs,” said Andre Chon, principal and director with AUS Consultants. “This approach provides a comprehensive system to manage workflows and every step of the regulatory procedural process—simply a smarter way to reduce regulatory risk.”
Some utilities struggle to meet complex regulatory re-
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