26 February 2020


Solar PV Operations & Maintenance Utility-scale Monitoring North America

NERC Compliance on Solar Projects: Whose Responsibility is it?

Author: John Franzino

Watching a professional kitchen operate is an impressive sight. At first glance, it appears chaotic and disorganized. But upon closer inspection, it is clear that everyone, from the line cook to the head chef, has a distinct responsibility, all while working in concert with the rest of the cooks. This is why you can have 30 professionals working to serve one meal and not have the “too many cooks in the kitchen” problem. But, the second you get more than one cook in your kitchen at home, it turns into a cluster.

So why does North American Electric Reliability Corporation (NERC) compliance at utility-scale solar projects typically look more like a kitchen at home than a professional kitchen?

When discussing Generator Owner (GO) and Generator Operator (GOP) NERC compliance, one may think compliance responsibility is straight-forward. After all, the responsible party is in the name, no?

This logic holds true from a liability perspective—only the NERC-registered Generator Owner can be penalized by NERC for non-compliance. Penalties can come in the form of fines, sanctions or other mandates enforced on the registered owner by the regulator.

However, this clear-cut division of roles and responsibilities only survives on legal paper in Washington, D.C. In the real world, comprised of complicated project ownership structures and multi-party operations and maintenance contracts, the waters of responsibility are muddy, to say the least.

Before we make clear which party is responsible for compliance, it is important to understand the various aspects of NERC GO compliance and how it varies throughout a project’s lifecycle.

NERC Compliance: Financing Phase

NERC compliance impacts a project early during financing. While the overall cost of NERC compliance is relatively small compared to the all-in capital required to build and maintain a utility-scale generator, compliance costs can be impactful if not planned for. It is especially meaningful when project owners do not plan for network operations and cybersecurity controls—both those required by the Critical Infrastructure Protection (CIP) standards and those required by other agreements, such as the project’s interconnection agreement or insurance requirements.

NERC Compliance: Design Phase

During the project design phase, it is imperative to engineer-out potential attributes that may cause compliance issues or complexities during operations—this ranges from protection systems to network architecture and SCADA design.

NERC Compliance: Commissioning Phase

During the project commissioning phase, program documentation and technical evidence must be generated. While there is a fair amount of policy and procedural documentation required, the majority of NERC GO compliance requirements are technical in nature. The requirements span a variety of engineering disciplines: from electrical modeling to protection system engineering to cybersecurity.

At the time the project syncs to the grid, which is typically what triggers NERC registration, the GO must be 100% compliant with the applicable NERC Reliability Standards—this includes both the programmatic documentation as well as the technical evidence to prove implementation.

NERC Compliance: Post-Registration

After registration, the registered GO is required to maintain compliance, as well as respond to periodic regulatory requests, such as alerts, self-certifications, and other events which may trigger regulatory inquiry.

So Who is Responsible for NERC GO Compliance at a Solar Plant?

Only the registered NERC GO can be ultimately responsible for compliance—NERC will only audit and fine the registered GO and does not look at or consider third-party contracts. However, compliance-related tasks can be delegated to one or more parties.

Okay, then who is responsible for carrying out compliance-related activities?

Currently, that answer is decided on a project-by-project basis, as well as where the project is in its lifecycle. Some owners ensure that all requirements are taken care of internally or by owner-procured consultants. Other times, the EPC is responsible for NERC during construction and the O&M provider is responsible during the operational life of the plant. In most cases, it is a combination of all those parties.

If the answer is “it depends,” how do you avoid the “too many cooks in the kitchen” conundrum?
For starters, don’t assume.

Don’t assume that because EPC and O&M contracts contain the word “NERC” that all aspects of compliance are the responsibility of the EPC or O&M provider. I bet if you ask the project owner and the EPC/O&M who is responsible for what based on how the contract is written, you will get two completely different answers.

Don’t assume that your EPC or SCADA integrator is designing a NERC-compliant facility. While it is not rocket science, NERC compliance is a specific skillset—we have a specialized economy for a reason, right?

Don’t assume that the O&M provider is covering all aspects of NERC compliance for the GO. While most O&M contracts dictate the service provider complies with all applicable regulations, this does not mean that they are responsible for implementing and maintaining the GO program, or for leading the NERC audit when the time comes.

Don’t assume that because a registered GOP is performing remote operations that their control center’s CIP compliance program magically trickles down to the site. It does not.

In a maturing industry, it is more important than ever to verify—do not merely trust or assume that everything is taken care of. There are too many moving parts, new entrants to the market, complicated structures, and misunderstandings for the registered owner not to verify closely.

The only reason a professional kitchen doesn’t have too many cooks is through careful planning, clearly defined roles and responsibilities, and clear hand-offs of those responsibilities as the meal moves from menu creation, to prep, to cook, to plating and presentation. The same goes for a solar project as its NERC GO program moves from design, to commissioning, to operations, to audit preparation.

John Franzino is CEO of GridSME. Check out John’s presentation “Increasing NERC complexity: Strategic decision making and coordination” on Day 2 of the Solar Asset Management North America, April 7-8 in Oakland.

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