The INPOWERD Perspective: Rebuilding the Runway While the Planes Are Still Landing: What NERC's Standards Modernization Effort Means for Registered Entities

The INPOWERD Perspective:

Rebuilding the Runway While the Planes Are Still Landing: What NERC's Standards Modernization Effort Means for Registered Entities

By Earl Shockley, President and CEO, INPOWERD LLC

Trust • Accountability • Service

Why This Matters

Registered entities spend enormous energy interpreting NERC Reliability Standards, building controls around them, and proving compliance with defensible evidence. Very few spend much time thinking about how those standards get written in the first place, and that process is about to change in ways every registered entity should understand.

In February 2025, the NERC Board of Trustees formed the Modernization of Standards Processes and Procedures Task Force, an industry-led group asked to take a hard look at how NERC initiates, drafts, and ballots Reliability Standards. A year later, in February 2026, the Board accepted the task force's final recommendations. What started as a review is now a rebuild. NERC is restructuring how the reliability rules that govern this industry are written, who writes them, and how quickly they can become effective.

I have spent this year reviewing the task force's work, from the October 2025 draft recommendations through the final February 2026 version and comparing both against NERC's own published implementation roadmap for how the transition actually unfolds through 2027. My take is straightforward. This is the right instinct, executed with real discipline, and it still deserves a clear-eyed look at where the risk sits. A faster, more responsive standards process is not automatically a better one unless the industry stays engaged while it is being built, not after it is finished.

The Structural Rewrite, Briefly

The task force organized its work around the three stages every standard moves through: initiation, drafting, and balloting. All three are changing. None of it is live yet, more on that below, but this is the target-state design NERC is building toward.

Initiation moves from a rolling, unstructured intake to a semiannual submission window for Standard Initiation Requests, open to anyone. The Reliability and Security Technical Committee (RSTC) handles the technical vetting. A new subcommittee under the Reliability Issues Steering Committee (RISC) then takes stakeholder input, prioritizes what moves forward, and drafts a Reliability Standard Term Sheet scoping each approved project. Regulatory directives and urgent Board initiatives skip ahead on an expedited track. The Standards Committee, which has performed this checkpoint function for decades, will be retired once the transition is complete, with its responsibilities absorbed by the new RISC subcommittee and NERC staff.

Drafting retires the volunteer drafting-team model most of us grew up with. NERC staff will write a "version zero" draft directly from the term sheet, using AI tools with mandatory human verification, then refine it with a standing pool of pre-vetted subject matter experts rather than a newly recruited team. Comment periods, generally forty-five days and then thirty if needed, become the primary mechanism for building consensus, supported by nonbinding straw polls along the way.

Balloting shifts from driving the process to confirming it. There is no more early ballot-pool signup. Any Registered Ballot Body member that participated in at least one comment period is eligible to vote in a single thirty-day confirmation ballot, still requiring the same two-thirds weighted-segment approval the industry has always used. A failed ballot triggers subcommittee review and, at most, one extraordinary re-ballot, rather than the open-ended iteration entities have learned to plan around.

The stated goal, once the new framework is actually running, is to compress the full path from initiation to adoption to roughly twelve to eighteen months, down from a process that has often run considerably longer.

Three Changes That Should Concern You

Drafting authority moves in-house. For as long as most of us have worked in this industry, standards were written by volunteer drafting teams made up of the people who would eventually have to comply with the result. That model was slow, but it embedded practitioner judgment directly into the text. Under the new framework, NERC staff writes the first full draft, with AI-assisted tools in the mix and a standing subject-matter-expert pool refining it afterward rather than authoring it from the outset. The final recommendations expanded that pool to more than seventy-five members specifically to avoid overburdening a small fixed panel, which is a meaningful improvement over the October draft. It does not fully answer the underlying question: when the first version of a standard is written by staff rather than the people who operate the system, how much of the field's operational judgment survives into the language everyone will eventually be audited against.

There is a sharper version of this concern worth naming directly, and it is a control problem more than a policy one. Whoever configures the AI tool used to produce the version-zero draft, whoever selects its reference material, writes its prompts, and sets its guardrails, is effectively programming a point of view into every standard before a single subject-matter expert reviews it. If that configuration is built primarily around ERO staff guidance, enforcement history, and internal drafting conventions, without structured, direct input from the practitioners who operate the systems being regulated, the output will default to that narrower institutional lens. Not because anyone intends bias, but because that is how these tools behave. They reproduce whatever point of view is embedded in their training material and instructions. Mandatory human verification is a good control for catching factual errors and gaps. It is a weaker control against a systematically narrow starting point, especially once the SME pool's role is refining a draft rather than building one from a blank page. A biased input, uncorrected upstream, tends to survive downstream review, because reviewers are reacting to what is already on the page rather than what is missing from it. If the tool itself is configured without structured industry participation, the industry will spend the comment period reacting to that framing rather than shaping the standard from its first word.

It is worth being precise about what this change does and does not affect downstream. When FERC ultimately reviews an approved Reliability Standard, its own standard of review gives due weight to the technical expertise of the ERO, meaning NERC as an institution, not to the electric industry broadly, though NERC's committees are themselves built from industry stakeholders. FERC has also been explicit that it will not defer to the ERO on a standard's effect on competition. That standard of review does not change because NERC staff, rather than a volunteer team, writes the first draft. What changes is only where in the process practitioner judgment has a chance to shape the language before a standard ever reaches a ballot, and by extension, before it ever reaches FERC's desk at all.

Fewer, larger voting blocs. The final recommendations reversed one of the more controversial proposals in the October draft, dropping the plan to merge Load-Serving Entities and Transmission-Dependent Utilities into a single segment after industry pushback. That reversal is a good sign that stakeholder feedback is actually shaping outcomes. But other consolidations survived: Segment 6 folds into Segment 5, Segments 7 and 8 merge, and Segment 10 is retired. The Registered Ballot Body goes from ten voting segments to seven. Industry commentary has already flagged that some of the newly combined segments could end up with only a couple dozen eligible voters, and the confirmation ballot no longer carries a quorum requirement. Fewer distinct voices and a lower bar for a ballot to count is a combination worth watching, particularly for smaller entities whose segment representation just got consolidated into a larger, more generalized bloc.

The timeline everyone quoted is already behind. When the Board accepted the final recommendations in February 2026, the expectation in circulation was a phased rollout beginning that spring. NERC has since published its own five-phase implementation roadmap, and it is worth walking through because it shows how much runway actually sits between "accepted" and "operating." From February through June 2026: draft the Rules of Procedure (ROP) revisions, post them for an informal comment period, hold an industry workshop, and stand up a Short-Term Advisory Group along with the initial Standard Initiation Request and Term Sheet templates.

From July through September 2026, where the effort sits as of this writing: approve the Standard Processes Manual for posting and open a formal sixty-day comment period on the Rules of Procedure and charter revisions.

From September 2026 through January 2027: work through any additional comment or ballot rounds the formal posting generates, respond to comments, and file the Phase 1 Computational Loads item (the same Computational Load Entity concept I wrote about in an earlier Perspective on grid constraints) before disbanding the advisory group. Worth a terminology note here: the old Standard Authorization Request (SAR), most of us have filed for years, is itself being retired as a term under the new framework, replaced by the Standard Initiation Request described above.

In the first and second quarter of 2027: adopt the revised ROP, file it with FERC, launch the SME Pool, and bring Standing Committee charter revisions to the Board. Only in the third and fourth quarter of 2027 does the RISC subcommittee get created, hold its first standards workshop, and take on the existing pipeline of standards development projects, at which point the Standards Committee is finally retired. Put plainly, the body that will run the new intake and prioritization process does not exist yet, and by NERC's own roadmap will not exist until roughly a year and a half after the Board voted to approve the framework that creates it.

FERC still must act on the ROP filing after that, on its own timeline. None of this is a criticism of the pace. A ROP change requires FERC approval, and scrutiny that gives due weight to technical judgment while still independently testing competition effects is not something that should be rushed. It is, however, a reminder that the twelve-to-eighteen-month target describes the standards process once the new framework is running, not the runway required to build the framework itself. Entities that assumed the new intake and balloting rules would already be governing project selection are planning against a timeline that was always more aspirational than operative.

Leadership Implication

This is the same pattern I have described in other contexts: the regulatory target keeps moving, and organizations that plan against the announced date rather than the observable pace of implementation end up reacting instead of leading. Track the actual milestones on NERC's own roadmap, not the headline that followed the Board vote. And add one question to that tracking list: how is the version-zero drafting tool itself governed? Who configured it, what material trains it, and was industry input structured into that configuration or only into the review that comes after. That is a control question, and it deserves the same scrutiny leadership applies to any other system producing output the organization will ultimately be held accountable for.

Three Changes Worth Recognizing

Risk enters the process earlier. The old model was reactive by design. A risk would emerge, a SAR would work its way through a queue with no fixed cadence, a drafting team would eventually form, and years could pass before a standard caught up to the risk that prompted it. A structured, semiannual intake window with technical vetting up front and an expedited track for regulatory directives and urgent Board priorities means the process can actually keep pace with a risk environment that is converging faster than it used to, whether that is large-load growth, cyber threats to operational technology, or extreme weather stressing systems that were not designed for it. A standards process built for a slower era was becoming a constraint in its own right. This change addresses that directly once it is implemented.

Consensus gets built before the vote, not litigated after. The old ballot-and-comment cycle often meant fighting the same battles repeatedly across multiple ballot rounds. Structured comment periods, mandatory straw polls, and now, per the final recommendations, a requirement that every term sheet be posted for public comment before drafting even begins, move disagreement to the front of the process where it can shape the outcome. A single confirmation ballot at the end is a legitimate mechanism when the industry has had real opportunities to weigh in earlier and often. The final version also dropped two proposals stakeholders specifically objected to: a requirement that corporate voters formally attest to their authority to vote, and elected representation on the RISC subcommittee was restored after the October draft had proposed an all-appointed body. Fifteen members, eleven elected by sector and four at-large, is a meaningfully different governance model than what was first floated, and it happened because the industry pushed back and NERC listened. The final recommendations also widened ballot eligibility in a way that helps offset the segment consolidation above: commenting directly on the Reliability Standard Term Sheet counts toward eligibility to vote in the confirmation ballot, and so does co-signing someone else's comments, a trade associations, for example, rather than requiring every entity to file its own separate comment at every stage.

NERC is now grading its own homework. The final recommendations add a new appendix of proposed metrics: time-to-draft, subject-matter-expert pool participation, and the number of projects that get "off-ramped" because they fail to reach consensus. That was not in the October draft. It matters because it is the same standard I have spent years telling registered entities they will be held to. An internal controls program is not credible because it exists on paper; it is credible because someone is measuring whether it actually works and correcting it when it does not. NERC building that same accountability structure into its own process, and committing to publish it, is a meaningful signal about whether this modernization effort is designed to last past its first year.

Leadership Implication

A regulator that measures its own process performance and adjusts based on stakeholder feedback earns more credibility asking entities to do the same. That is worth acknowledging, even while watching closely to see whether the metrics get published and acted on once the initial enthusiasm settles.

The INPOWERD Perspective

I have said in prior writing that the regulatory target never stops moving. Usually, I mean that in the context of a registered entity trying to keep its own program current. This time, the target that is moving is the process itself, and the lesson for leadership is the same either way. Do not manage against the announced timeline. Manage against the observable pace of implementation and stay close enough to the process to know the difference.

The structural logic behind this modernization effort is sound. A standards process built for a different era of load growth, threat velocity, and system complexity was becoming part of the reliability problem rather than the solution to it. Compressing initiation-to-adoption from years to a targeted twelve to eighteen months, moving risk evaluation earlier, and building in real accountability metrics are all changes worth supporting. The final recommendations also show something registered entities do not always get to see: a regulator that adjusted its own plan in response to direct stakeholder pushback, on ballot body composition, on voter attestation, on RISC subcommittee governance, rather than pushing an initial draft through unchanged.

None of that eliminates the open questions. Concentrating first-draft authority with NERC staff, and the AI tooling that supports it, changes where practitioner judgment enters the text, even though FERC's ultimate standard of review does not change. An unexamined AI configuration is simply a new kind of control gap: an input no one is testing for bias because everyone is focused on verifying the output. Consolidating ballot segments changes how loudly smaller entities are heard, even with eligibility rules that now cast a slightly wider net. And a rollout that, by NERC's own roadmap, will not even have a functioning RISC subcommittee until late 2027 is a signal that registered entities should treat every date in this transition as provisional until NERC's own committee actions confirm it.

The entities that come out ahead of this transition will not be the ones that wait for the Rules of Procedure to finalize before paying attention. They will be the ones participating in the comment periods now, asking directly how the version-zero drafting tool is configured and who has reviewed it for a narrow point of view, watching who gets elected to the RISC subcommittee once it exists, understanding how the SME pool works before they need a seat in it, and building internal governance that can flex as the framework's real cadence becomes clear, rather than the cadence that was originally announced.

How INPOWERD Helps Registered Entities Navigate the Transition

INPOWERD helps registered entities stay engaged with standards development changes rather than discover them after the fact. We track the MSPP implementation milestones against NERC's own roadmap and committee actions, help compliance and engineering leadership understand what participation in the current comment periods, future term sheet reviews, and the eventual SME pool actually requires, and help organizations build internal governance that can absorb a faster standards cadence once it arrives, without having to rebuild it under pressure. We also help entities ask the right control questions about the drafting tools themselves, how they are configured, what they are trained on, and whether industry input shaped them before the fact rather than after. Our approach is grounded in the same principle we bring to internal controls and enforcement readiness: sustainable performance comes from staying ahead of the process, not reacting to it once it lands on a compliance calendar.

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