The reliability of the electric power system needs to be achieved within the framework of the national and international legal systems. This is driven to a great extent by the fact that the electric power systems of many countries are usually interconnected with their neighboring countries' systems.

The development and enforcement of laws and regulations is done differently in different countries, but in general follows similar principles. In North America it is based on a set of reliability standards developed by the industry under the leadership of the North American Electric Reliability Corporation (NERC), a non-profit corporation which was formed in 2006 as the successor to the North American Electric Reliability Council (also known as NERC).

In the context of the bulk power system, NERC defines reliability as the ability to meet the electricity needs of end-use customers, even when unexpected equipment failures or other factors reduce the amount of available electricity. NERC breaks down reliability into adequacy and security.

As a result of the North American blackout in August 2003, the Energy Policy Act of 2005 authorized the Federal Energy Regulatory Commission (FERC) – an independent governmental agency that regulates, among other things, the interstate transmission of electricity, to designate the national Electric Reliability Organization (ERO). Such an organization was considered necessary for the development and enforcement of compliance with mandatory reliability standards in the United States. On July 20, 2006 FERC issued an order certifying NERC as the ERO for the United States.

NERC defines Reliability Standards as "the planning and operating rules that electric utilities follow to ensure the most reliable system possible. These standards are developed by the industry using a balanced, open, fair and inclusive process managed by the NERC Standards Committee. The Committee is facilitated by NERC staff and comprised of representatives from many electric industry sectors.

Proposed standards are reviewed and approved by the NERC Board of Trustees, which then submits the standards to the U.S. Federal Energy Regulatory Commission and Canadian provincial regulators for approval. Once approved by these governmental agencies, the standards become legally binding on all owners, operators and users of the bulk power system.

Along with the Regional Reliability Organizations, NERC has the legal authority to enforce compliance with NERC Reliability Standards, which it achieves through a rigorous program of monitoring, audits and investigations, and the imposition of financial penalties and other enforcement actions for non-compliance." See www.nerc.com.

In the past NERC was producing non-mandatory guidelines for power system operation and accreditation defined as Policies. Compliance with these policies was strongly encouraged, but actually voluntary. After becoming the ERO, during a period of several years, NERC has worked with all stakeholders to convert its Policies into mandatory Standards. The complete set of reliability standards can be downloaded from NERC's website shown above.

NERC is overseen by FERC and Canadian governmental authorities and works with eight regional entities that cover all suppliers of electric power in the United States, Canada and a portion of Baja California Norte, Mexico. Non-compliance penalties include fines of up to 1 million US Dollars per day per violation, which provides a very good incentive to all entities to comply with the standards and ensure a high level of reliability of electric power supply.