David Cook, General Counsel for the North American Electric Reliability Council, testified Wednesday before the Energy and Air Quality Subcommittee of the House Energy and Commerce Committee that legislation is necessary to ensure the continued security and reliability of the North American bulk power system.

“NERC strongly urges Congress to enact reliability legislation in this session of Congress,” he stated. “NERC and a broad coalition of state, consumer, and industry representatives support legislation that would transform the current set of voluntary electric system operating guidelines into a set of mandatory transmission system reliability rules, developed and enforced by an industry-led self-regulatory organization (SRO).”

According to Mr. Cook, an industry-led SRO will be in the best position to marshal the technical expertise and market expertise of the whole industry to develop the rules for running the highly complex interconnected transmission system. Such an organization would be able to focus on reliability as its primary mission, while the electric industry and electricity markets continue to evolve, and new forms of business organizations come into existence.

A SRO would also address the international nature of the interconnected grid. The SRO, with participation from U.S., Canadian, and Mexican interests, could develop the common set of rules necessary to operate the interconnected grid that spans national borders.

“The need to change how we deal with reliability is clear,” Cook asserted. “The electric industry is undergoing profound changes, and our system of reliability needs to change to keep pace. The events of September 11 serve to underscore the importance of the effort.”

Mr. Cook pointed out that NERC plays a critical role in the protection of the security of our electric transmission infrastructure and that, in the future, the SRO will serve as a point of contact and co-ordination on these industry-wide security efforts. He urged Congress to adopt legislation authorizing creation of an industry SRO both for reliability and for security reasons.