You Uncovered a NERC Potential Non-Compliance. Now What?

Collaborative compliance conversations tend to fade once the overall compliance program is up and running. But what happens the day that you find something that doesn’t line up with your company’s culture of compliance? Every utility talks about maintaining compliance thresholds. Fewer talk about what to do the moment you realize you’re not.

That compliance gap is worth closing. A Potential Non-Compliance (PNC) finding, on the Critical Infrastructure Protection (CIP) side or the Operations and Planning (O&P) side, isn’t the end of the story. If properly addressed with the corrective actions, it’s the start of a more reliable and accountable organization.

Give Credit Where Credit is Due

First things first, start by recognizing your team. Finding and investigating a PNC on your own is a good outcome. Self-identification means someone was paying attention, spoke up and took appropriate steps to fix the problem. The issue didn’t have to surface through a safety incident or a major grid event to get noticed. A PNC that is discovered internally (through internal controls) is a very different story than one revealed by external means, like through a formal audit.

Finding the Root Cause

Once a PNC surfaces, your Compliance Monitoring and Enforcement Program (CMEP) investigation should start within 48 hours. From there, the responsible parties need to assume accountability. Your compliance team should perform an objective root cause analysis and promptly act on what is uncovered. Rushing this step to close the case fast often produces a surface-level fix that leaves the real problem in place, setting up the next team for the same failure.

Widen the Lens

PNCs are rarely isolated to just one part of the organization. Once the affected team finds a comprehensive solution to an incident, run an “extent of condition” review to see if other teams share the same exposure. This surfaces contributing factors and helps prevent repeat issues. Operational silos and communication gaps between teams often occur when stakeholders don’t share lessons learned or mitigation plans across departments. CIP-004 R5.1, which governs the timely termination of NERC CIP access for departed employees, is a good example: several teams touch this requirement, but a violation in one doesn’t guarantee the rest of the organization hears about it.

This is also a good moment to look at manual process especially around audit evidence collection. Developing workflows that automatically compile, certify and archives work as it happens makes it easier to maintain audit readiness. This process improvement, from uncovering a single compliance finding, could turn into an important compliance program improvement. It is essential to shift the mindset from settling on patching one hole to reinforcing the whole structure.

NERC Is the Floor, Not the Ceiling

NERC standards are the minimum bar for compliance, not necessarily the target. Utilities that get the most out of their compliance programs treat these standards as a starting point, not a finish line. Shifting the question from “did we meet the standard” to “does this meet our own standard for operational excellence” moves a program from reactive to genuinely preventive.

What It Takes to Stand Up a Compliance Program

Many organizations treat NERC compliance as administrative overhead: paperwork, evidence binders and one more regulatory box to check. It’s easy to perceive it that way when the compliance function is bolted on to workflows and processes rather than built into them.

Standing up a strong compliance program comes down to a few key factors: a dedicated leadership team, established cross-functional communications, workflows that generate evidence as a byproduct of doing the work instead of a separate task afterward and lastly a culture where proactive self-identification is treated as a strength, not a liability. The same principles that help a team recover from a PNC are the ones that build a strong program in the first place.

The Bottom Line

A PNC does not mean failure. Instead, it’s an opportunity for organizations to learn from their mistakes, find the real cause, investigate what else can be done to improve compliance effectiveness and raise the performance bar past the minimum effort.