The main purpose of a Grid Assurance is it serves as a solution that helps in dividing the cost across several utilities. The shared inventory approach in achieving cost-efficiency can give people savings in terms of protection, warehousing, purchasing, and it also includes the maintenance cost that comes with possible parts replacements of the equipment. It makes the cost more affordable compared before to enable companies to acquire immediate access for much larger scale equipment that is on hand and on shore.

Once a major disastrous event happens, a company’s tendency is to mainly focus on stabilizing the operations quicker to avoid loss of profit. This should be done as fast as possible. With this in mind, the Grid Assurance effectively works if each of the subscriber do logistics plans for their equipment before a disaster occurs. The planning should make sure that the equipment that are being used and delivered should be delivered before the predicted event. In determining when the critical replacement will happen for the equipment should come up gives the companies an extra confidence in making sure that the grid assurance is present to deliver the customers energy supply even after a disaster happens.

In addition to this, another pressing challenge comes with the regulatory approval. It is widely recognized that grid utility companies are now being a bit hesitant in coming up with decisions about major investments because these decisions should be backed up by a regulatory assurance that the costs that are incurred should be recouped in form of rates.

With this in mind, Gird Assurance is not taking initiative and being proactive because it has recently received two affirmative orders coming from the Federal Energy Regulatory Commission (FERC) that gives the regulatory clarification on the issues that can be related to prudency, compliance, ratemaking and other affiliated pricing transmissions. This is related to the owing entities that participates in the Grid Assurance project.

While the Grid Assurance is not currently FERC regulated, the different charges that comes with this such as: cost-based subscription fees akin to the FERC regulated transmission formula rates. The different costs that comes with subscription fees together with the FERC orders should be able to facilitate the members’ different abilities in recovering the expenses that comes with Grid Assurance subscription.

While not FERC regulated, Grid Assurance charges cost-based subscription fees, like FERC-regulated transmission formula rates. These cost-based subscription fees along with the FERC orders will facilitate members’ ability to recover their Grid Assurance subscription expenses.

With this in mind, Grid Assurance was originally formed to give answers because of the needs that arises in the electrical industry: this need comes in the restoration of the electrical grid that should quickly follow other HILF events. This will happen by increasing the critical transmission equipment that comes with on-shore and on-hand inventory. Different companies contribute to the utilities’ ability to restore the energy delivery back properly, giving help to protect the nations’ consumers and the communities from the possible devastating effects potential calamities might bring. This will help in maintaining the way of life of the people and the economical balance in the country.