Summary
This regulation establishes mandatory reliability standards for the U.S. bulk power system, including cybersecurity requirements. It creates a framework for certification of an Electric Reliability Organization (ERO) to develop and enforce these standards, establishes regional entities for enforcement, and includes detailed processes for standard development, compliance auditing, and penalties. The regulation covers definitions, ERO certification criteria, funding mechanisms, standard approval processes, conflict resolution with existing FERC orders, compliance monitoring, penalty structures, delegation of enforcement authority to regional entities, and Commission oversight powers.
Reason
Deleting this regulation would eliminate essential coordination mechanisms for North American electrical grid reliability, risking cascading blackouts that could devastate the economy and public safety. The interstate nature of electricity transmission makes voluntary coordination practically impossible - the classic collective action problem. While compliance costs are significant, the regulation directly prevents catastrophic systemic risks that would impose far greater economic losses. The alternative isn't free markets but rather grid instability and rolling blackouts.