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NERC Violations & Security Levels

The new Energy Bill mandates NERC Reliability Standards Compliance and Enforcement. Fines can reach $1 million per day per violation.

NERC compliance Violation Severity Levels (VSLs) define the degree to which compliance with a requirement was not achieved. Each requirement must have at least one VSL. While it is preferable to have four VSLs for each requirement, some requirements do not have multiple degrees of noncompliant performance and may have only one, two, or three VSLs.

Lower VSL - The performance or product measured almost meets the full intent of the requirement.

Moderate VSL - The performance or product meets the majority of the intent of the requirement.

High VSL - The performance or product does not meet the majority of the intent of the requirement, but does meet some of the intent.

Severe VSL - The performance or product does not meet the intent of the requirement.




FERC indicated it would use the following four guidelines for determining whether to approve VSLs:

Guideline 1: Violation Severity Level Assignments Should Not Have the Unintended Consequence of Lowering the Current Level of Compliance Compare the VSLs to any prior Levels of Non-compliance and avoid significant changes that may encourage a lower level of compliance than was required when Levels of Non- compliance were used.

Guideline 2: Violation Severity Level Assignments Should Ensure Uniformity and Consistency in the Determination of Penalties A violation of a "binary" type requirement must be a Severe VSL. Do not use ambiguous terms such as minor and significant to describe noncompliant performance.

Guideline 3: Violation Severity Level Assignment Should Be Consistent with the Corresponding Requirement VSLs should not expand on what is required in the requirement.

Guideline 4: Violation Severity Level Assignment Should Be Based on A Single Violation, Not on A Cumulative Number of Violations, unless otherwise stated in the requirement, each instance of non-compliance with a requirement is a separate violation. Section 4 of the Sanction Guidelines states that assessing penalties on a per violation per day basis is the “default” for penalty calculations.