History
1968 - NERC Established
The National Electric Reliability Council (later North American Electric Reliability Council, now North American Electric Reliability Corporation, or NERC) was established by the electric utility industry in response to the 1965 blackout in the northeastern US and southeastern Ontario, Canada, that affected 30 million people. Nine regional reliability organizations were formed under NERC, as well as regional planning coordination guides. NERC maintained the reliability of the interstate electric transmission system largely through a voluntary, industry-based process.
1970 – Texas Interconnected System Forms ERCOT to Comply with NERC Requirements
Texas Interconnected System, a group of interconnected Texas utilities, formed the Electric Reliability Council of Texas (ERCOT) in 1970 to comply with NERC requirements. ERCOT eventually assumed the central operating coordinator role for its region.
1996 – ERCOT Becomes First ISO in United States
In 1996, the Public Utility Commission of Texas (PUCT) endorsed an electric utility joint task force recommendation that ERCOT become an independent system operator (ISO) to ensure an impartial, third-party organization was overseeing equitable access to the power grid among the competitive market participants. This change was officially implemented September 11, 1996, when the ERCOT Board of Directors restructured ERCOT's organization and initiated operations as a not-for-profit ISO, making ERCOT the first electric utility industry ISO in the United States.
2000 – Market Protocols Developed through Stakeholder Collaboration
From 1999, when the Texas Legislature voted to deregulate the retail electric market, to 2000, ERCOT sponsored a stakeholder process to address how ERCOT's organization would administer its responsibilities to support the competitive retail and wholesale electricity markets while maintaining the reliability of electric services.
In thousands of hours of meetings and mark-up sessions, the stakeholders or market participants worked together to develop new ERCOT Protocols – the rules and standards for implementing market functions regarding energy scheduling and dispatch, ancillary services, congestion management, outage coordination, settlement and billing, metering, data acquisition and aggregation, market information systems, transmission and distribution losses, renewable energy credit trading, registration and qualification, market data collection, load profiling and alternative dispute resolution.
2004 - NERC Introduces Version 0 Reliability Standards
NERC translated its operating policies, planning standards, and compliance requirements into 90 measurable standards called "Version 0 Reliability Standards," which were adopted by the NERC Board of Trustees in 2005.
2005 - U.S. Energy Policy Act of 2005 Passes
Triggered in part by concerns generated by the August 2003 blackout that affected 40 million people in the midwestern and northeastern United States and 10 million people in eastern Canada, the Energy Policy Act of 2005 amended the Federal Power Act of 1935 to provide for mandatory and enforceable electric reliability standards for the interstate bulk-power system (BPS).
The Federal Energy Regulatory Commission (FERC) was given jurisdiction over all users, owners, and operators of the BPS to enforce compliance; the BPS included the utilities within the ERCOT system, which were not otherwise subject to FERC jurisdiction.
The act also provided for FERC to certify an Electric Reliability Organization (ERO). The ERO was to be independent from the users, owners, and operators of the BPS while ensuring stakeholder representation on its board of directors. The ERO was to promulgate FERC-approved reliability standards. The ERO also had the authority to impose FERC-approved penalties for violations of reliability standards.
2006 - FERC Certifies NERC as Electric Reliability Organization; ERCOT Proposes to Become a Regional Entity
In 2006, the Federal Energy Regulatory Commission (FERC) issued Order No. 672, the final rule outlining the requirements for certification of the Electric Reliability Organization
Later that year, FERC certified NERC as the nation's ERO. As the ERO, NERC became responsible for developing and enforcing mandatory electric reliability standards under FERC's oversight. The standards would apply to all users, owners, and operators of the BPS, including ISOs such as ERCOT, rather than relying on voluntary compliance.
ERCOT applied to NERC to allow ERCOT to become the regional entity for the ERCOT region. To do so, ERCOT established an independent and functionally separate division, Texas Regional Entity (Texas RE), in accordance with the ERO rule.
2007 - FERC Approves First NERC Reliability Standards; Texas Regional Entity Approved as Regional Entity
The first legally enforceable reliability standards, 83 of them, were approved by FERC in 2007.
On April 19, 2007, FERC approved eight regional entity delegation agreements. Among other regional entities, NERC delegated authority to Texas RE, an independent division of ERCOT. The agreement included a Compliance Monitoring and Enforcement Program to be used to monitor, assess, and enforce compliance with NERC Reliability Standards.
2010 - Texas Reliability Entity, Inc., Formed
Texas Reliability Entity, Inc., was formed on January 1, 2010, to become the successor regional entity for the ERCOT region. The new Texas RE is not affiliated with, and is independent from, ERCOT ISO.
On May 6, 2010, FERC approved the Delegation Agreement and Budget for Texas Reliability Entity, Inc. Texas Reliability Entity, Inc. assumed all responsibilities of Texas Regional Entity on July 1, 2010.