Don't you just love the smell of audits in the morning? I happened to catch this article on Friday. It seems that FERC (Federal Energy Regulatory Commission), performed an audit of NERC (North American Electric Reliability Corporation) over several months last year. NERC didn't like FERC audit staff's findings and now they're having a big, ol' public tantrum about it and whining to the FERC Commissioners. NERC thinks they are somehow "special" and should have been permitted to "work toward resolution" (read "sweep under the rug if we promise not to do it again") instead of being held accountable for their actions. Because NERC decided to have a tantrum and contest the audit findings, the whole thing got made public on Friday. Not too smart, NERC!
NERC describes its mission as: "to ensure the reliability of the North American bulk power system. NERC is the electric reliability organization (ERO) certified by the Federal Energy Regulatory Commission to establish and enforce reliability standards for the bulk-power system. NERC develops and enforces reliability standards; assesses adequacy annually via a 10-year forecast, and summer and winter forecasts; monitors the bulk power system; and educates, trains and certifies industry personnel."
NERC's statutory authority, once designated the ERO by FERC, comes from Section 215 of the Federal Power Act, and they may "allocate equitably reasonable dues, fees, and other charges among end users for all activities under this section;" I didn't see a definition for "end users" in the FPA, but I will assume "end users" are electric consumers/ratepayers.
So, what did the audit turn up? Lots of interesting stuff, including a couple of "Holiday Galas" NERC held in 2010 & 2011 that cost us ratepayers $74,748 and $109,474, respectively. The totals included expenses such as travel, lodging, car rentals, "gifts," food and beverage, entertainment and "miscellaneous." NERC prefers that FERC audit staff refer to them as "year-end events, or year-end employee dinners and meetings" (pg. 63), although the term "Holiday Gala" came from internal NERC documents. NERC advertised the parties as "Holiday Galas" in-house, but when the auditors showed up they called them "year-end events." You can download a copy of FERC's audit report here. The Holiday Gala stuff starts on page 52 of the report.
So, while senior citizens on a fixed income and single parents are struggling to pay their monthly electric bills, NERC is spending nearly $185,000 on holiday parties. Nice. NERC is statutorily permitted to spend funds on activities necessary for its duties under Sec. 215. Are Holiday Galas necessary to the reliability of the electric grid? I wonder if there was no holiday party for NERC employees if the lights would have gone out? Maybe we'll find out in 2012 :-)
NERC needs to get off its "special" pedestal and learn how to behave during an audit. Don't argue with the auditors, you're not going to win. Auditors are like The Child Catcher from Chitty Chitty Bang Bang, "There are improper expenses around here somewhere... I can smell them!" If there's one transaction that isn't quite right in a computer printout 3 inches thick, an auditor will zero in on that particular transaction and start asking for documents, guaranteed. Quit your whining, NERC, and clean up your act!
And, from an electric ratepayer's perspective... Thank you, FERC audit staff! We appreciate you, even if NERC doesn't.
Update: Check out NERC's latest ridiculous hissy fit here.
NERC describes its mission as: "to ensure the reliability of the North American bulk power system. NERC is the electric reliability organization (ERO) certified by the Federal Energy Regulatory Commission to establish and enforce reliability standards for the bulk-power system. NERC develops and enforces reliability standards; assesses adequacy annually via a 10-year forecast, and summer and winter forecasts; monitors the bulk power system; and educates, trains and certifies industry personnel."
NERC's statutory authority, once designated the ERO by FERC, comes from Section 215 of the Federal Power Act, and they may "allocate equitably reasonable dues, fees, and other charges among end users for all activities under this section;" I didn't see a definition for "end users" in the FPA, but I will assume "end users" are electric consumers/ratepayers.
So, what did the audit turn up? Lots of interesting stuff, including a couple of "Holiday Galas" NERC held in 2010 & 2011 that cost us ratepayers $74,748 and $109,474, respectively. The totals included expenses such as travel, lodging, car rentals, "gifts," food and beverage, entertainment and "miscellaneous." NERC prefers that FERC audit staff refer to them as "year-end events, or year-end employee dinners and meetings" (pg. 63), although the term "Holiday Gala" came from internal NERC documents. NERC advertised the parties as "Holiday Galas" in-house, but when the auditors showed up they called them "year-end events." You can download a copy of FERC's audit report here. The Holiday Gala stuff starts on page 52 of the report.
So, while senior citizens on a fixed income and single parents are struggling to pay their monthly electric bills, NERC is spending nearly $185,000 on holiday parties. Nice. NERC is statutorily permitted to spend funds on activities necessary for its duties under Sec. 215. Are Holiday Galas necessary to the reliability of the electric grid? I wonder if there was no holiday party for NERC employees if the lights would have gone out? Maybe we'll find out in 2012 :-)
NERC needs to get off its "special" pedestal and learn how to behave during an audit. Don't argue with the auditors, you're not going to win. Auditors are like The Child Catcher from Chitty Chitty Bang Bang, "There are improper expenses around here somewhere... I can smell them!" If there's one transaction that isn't quite right in a computer printout 3 inches thick, an auditor will zero in on that particular transaction and start asking for documents, guaranteed. Quit your whining, NERC, and clean up your act!
And, from an electric ratepayer's perspective... Thank you, FERC audit staff! We appreciate you, even if NERC doesn't.
Update: Check out NERC's latest ridiculous hissy fit here.
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