Electric Deregulation in North America
The Federal Energy Regulatory Commission (FERC)'s Energy Policy Act of 1992 was the first major step towards electric deregulation in North America, and was followed by a much more definitive action when FERC issued Orders 888 and 889 in 1996, which laid the groundwork for formalized deregulation of the industry and led to the creation of the network of Open Access Same-Time Information System (OASIS) nodes.
FERC is an independent agency of the U.S. Government and thus its authority extends only over electric utilities operating in the United States. However, NERC members include all of the FERC footprint as well as all of the electric utilities in lower Canada and a Mexican utility company. In the interest of reciprocity and commonality, all NERC members generally cooperate with FERC rules.
The creation of OASIS nodes allowed for energy to be scheduled across multiple power systems, creating complex strings of single "point-to-point" transactions which could be connected end-to-end to literally travel across the continent. This frequently created situations where it was difficult or impossible for transmission system operators to ascertain all of the transactions impacting their local system or take any corrective actions to alleviate situations which could put the power grid at risk of damage or collapse. The NERC Tag was implemented as a result of this new problem introduced by deregulation.
Read more about this topic: NERC Tag
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