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NERC Reliability Standards define the reliability requirements for planning and operating the North American bulk power system and are developed using a results-based approach that focuses on performance, risk management, and entity capabilities. The Reliability Functional Model defines the functions that need to be performed to ensure the bulk power system operates reliably and is the foundation upon which the mandatory Reliability Standards are based.

The Standards Committee oversees and prioritizes NERC’s standards development activities. The Standards Committee also coordinates NERC’s development of Reliability Standards with the North American Energy Standards Board’s (NAESB) wholesale electric business practices. Standards drafting teams, which are made up of industry volunteers and supported by NERC staff, work collaboratively to develop requirements using results-based principles that focus on three areas: measurable performance, risk mitigation strategies and entity capabilities. NERC’s standards are mandatory and enforceable throughout the United States and several provinces in Canada. Entities in the United States found to be in violation of a standard can be subject to fines of up to $1 million per day per violation.