NERC Tags were first introduced in 1997, in response to the need to track the increasingly complicated energy transactions which were produced as a result of the beginning of 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.
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.
A database of transmission scheduling points maintained by NERC through the Transmission System Information Networks (TSIN) that was originally developed for the OASIS nodes was greatly expanded to include additional information required in the process of creating NERC Tags.
This eliminated the cumbersome process required to receive a data packet via email and port it back into the original spreadsheet-based tagging application.
Accurate system studies of the Eastern Interconnection in order to determine which schedules should be curtailed would only be possible if every transaction was tagged and therefore included in the IDC calculations.
Reliability Coordinators in the Eastern Interconnection could access the IDC online and run flow studies based on various operating scenarios with all of the current energy schedules derived from the E-Tags.
E-Tag 1.7 also greatly expanded the time frame flexibility of an E-Tag by allowing extensions and modifications with comprehensive approval processes, layering of multiple OASIS requests for transmission rights, and also fully automated the tag curtailment functions from the IDC so that individual manual tag curtailments were no longer necessary.
Shortly after E-Tag 1.7 went online in 2002, the Western Electricity Coordinating Council (WECC) implemented the WECC Unscheduled Flow (USF) Tool, which accomplished a similar automated curtailing capability for the Western Interconnection that the IDC had done for the Eastern Interconnection.
FERC's plan for the eventual introduction of OASIS Phase 2 envisions a combined platform to post transmission offerings, allow transmission purchases, and facilitate scheduling and flow management, effectively merging the essential functions of E-Tag and OASIS.