Electric utilities (Federal Power Act): Bulk-power system; mandatory reliability standards,
[Federal Register: April 4, 2007 (Volume 72, Number 64)]
[Rules and Regulations]
[Page 16415-16602]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ap07-15]
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Part II
Department of Energy
Federal Energy Regulatory Commission
18 CFR Part 40
Mandatory Reliability Standards for the Bulk-Power System; Final Rule
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM06-16-000; Order No. 693]
Mandatory Reliability Standards for the Bulk-Power System
Issued March 16, 2007. AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the Commission approves 83 of 107 proposed Reliability Standards, six of the eight proposed regional differences, and the Glossary of Terms Used in Reliability Standards developed by the North American Electric Reliability Corporation (NERC), which the Commission has certified as the Electric Reliability Organization (ERO) responsible for developing and enforcing mandatory Reliability Standards. Those Reliability Standards meet the requirements of section 215 of the FPA and Part 39 of the Commission's regulations. However, although we believe it is in the public interest to make these Reliability Standards mandatory and enforceable, we also find that much work remains to be done. Specifically, we believe that many of these Reliability Standards require significant improvement to address, among other things, the recommendations of the Blackout Report. Therefore, pursuant to section 215(d)(5), we require the ERO to submit significant improvements to 56 of the 83 Reliability Standards that are being approved as mandatory and enforceable. The remaining 24 Reliability Standards will remain pending at the Commission until further information is provided.
The Final Rule adds a new part to the Commission's regulations, which states that this part applies to all users, owners and operators of the Bulk-Power System within the United States (other than Alaska or Hawaii) and requires that each Reliability Standard identify the subset of users, owners and operators to which that particular Reliability Standard applies. The new regulations also require that each Reliability Standard that is approved by the Commission will be maintained on the ERO's Internet Web site for public inspection.
EFFECTIVE DATE: This rule will become effective June 4, 2007.
FOR FURTHER INFORMATION CONTACT: Jonathan First (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-8529.
Paul Silverman (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-8683.
Robert Snow (Technical Information), Office of Energy Markets and Reliability, Division of Reliability, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502- 6716.
Kumar Agarwal (Technical Information), Office of Energy Markets and Reliability, Division of Policy Analysis and Rulemaking, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-8923.
SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly; Marc Spitzer; Philip D. Moeller; and Jon Wellinghoff.
Table of Contents
Paragraph
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Introduction.............................................
1
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Background...........................................
3 1. EPAct 2005 and Order No. 672.....................
3 2. NERC Petition for Approval of Reliability
12 Standards.......................................... 3. Staff Preliminary Assessment and Commission NOPR.
15 4. Notice of Proposed Rulemaking....................
17 II. Discussion..............................................
21
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Overview.............................................
21 1. The Commission's Underlying Approach to Review
21 and Disposition of the Proposed Standards.......... 2. Mandates of Section 215 of the FPA...............
23 3. Balancing the Need for Practicality with the
29 Mandates of Section 215 and Order No. 672..........
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Discussion of the Commission's New Regulations.......
34 1. Applicability....................................
34 2. Mandatory Reliability Standards..................
40 3. Availability of Reliability Standards............
44
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Applicability Issues.................................
50 1. Bulk-Power System v. Bulk Electric System........
50 2. Applicability to Small Entities..................
80 3. Definition of User of the Bulk-Power System......
110 4. Use of the NERC Functional Model.................
117 5. Regional Reliability Organizations...............
146
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Mandatory Reliability Standards......................
161 1. Legal Standard for Approval of Reliability
161 Standards.......................................... 2. Commission Options When Acting on a Reliability
169 Standard........................................... 3. Prioritizing Modifications to Reliability
193 Standards.......................................... 4. Trial Period.....................................
208 5. International Coordination.......................
226
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Common Issues Pertaining to Reliability Standards....
234 1. Blackout Report Recommendation on Liability
234 Limitations........................................ 2. Measures and Levels of Non-Compliance............
238 3. Ambiguities and Potential Multiple
264 Interpretations.................................... 4. Technical Adequacy...............................
282 5. Fill-in-the-Blank Standards......................
287
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Discussion of Each Individual Reliability Standard...
304 1. BAL: Resource and Demand Balancing...............
305 2. CIP: Critical Infrastructure Protection..........
446
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COM: Communications..............................
473 4. EOP: Emergency Preparedness and Operations.......
542 5. FAC: Facilities Design, Connections, Maintenance,
678 and Transfer Capabilities.......................... 6. INT: Interchange Scheduling and Coordination.....
796 7. IRO: Interconnection Reliability Operations and
889 Coordination....................................... 8. MOD: Modeling, Data, and Analysis................
1007 9. PER: Personnel Performance, Training and
1325 Qualifications..................................... 10. PRC: Protection and Control.....................
1419 11. TOP: Transmission Operations....................
1568 12. TPL: Transmission Planning......................
1684 13. VAR: Voltage and Reactive Control...............
1847 14. Glossary of Terms Used in Reliability Standards.
1887 III. Information Collection Statement.......................
1900 IV. Environmental Analysis..................................
1909 V. Regulatory Flexibility Act...............................
1910 VI. Document Availability...................................
1947 VII. Effective Date and Congressional Notification..........
1950 Appendix A: Disposition of Reliability Standards, Glossary and Regional Differences Appendix B: Commenters on the Notice of Proposed Rulemaking Appendix C: Abbreviations in this Document
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Introduction
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Pursuant to section 215 of the Federal Power Act (FPA), the Commission approves 83 of 107 proposed Reliability Standards, six of the eight proposed regional differences, and the Glossary of Terms Used in Reliability Standards (glossary) developed by the North American Electric Reliability Corporation (NERC), which the Commission has certified as the Electric Reliability Organization (ERO) responsible for developing and enforcing mandatory Reliability Standards. Those Reliability Standards meet the requirements of section 215 of the FPA and Part 39 of the Commission's regulations. However, although we believe it is in the public interest to make these Reliability Standards mandatory and enforceable, we also find that much work remains to be done. Specifically, we believe that many of these Reliability Standards require significant improvement to address, among other things, the recommendations of the Blackout Report.\1\ Therefore, pursuant to section 215(d)(5), we require the ERO to submit significant improvements to 56 of the 83 Reliability Standards that are being approved as mandatory and enforceable. The remaining 24 Reliability Standards will remain pending at the Commission until further information is provided.
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The Final Rule adds a new part to the Commission's regulations, which states that this part applies to all users, owners and operators of the Bulk-Power System within the United States (other than Alaska or Hawaii) and requires that each Reliability Standard identify the subset of users, owners and operators to which that particular Reliability Standard applies. The new regulations also require that each Reliability Standard that is approved by the Commission will be maintained on the ERO's Internet Web site for public inspection.
\1\ U.S.-Canada Power System Outage Task Force, Final Report on the August 14 Blackout in the United States and Canada: Causes and Recommendations (April 2004) (Blackout Report). The Blackout Report is available on the Internet at http://www.ferc.gov/cust-protect/moi/blackout.asp .
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Background
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EPAct 2005 and Order No. 672
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On August 8, 2005, the Electricity Modernization Act of 2005, which is Title XII, Subtitle A, of the Energy Policy Act of 2005 (EPAct 2005), was enacted into law.\2\ EPAct 2005 adds a new section 215 to the FPA, which requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards, which are subject to Commission review and approval. Once approved, the Reliability Standards may be enforced by the ERO, subject to Commission oversight or the Commission can independently enforce Reliability Standards.\3\
\2\ Energy Policy Act of 2005, Pub. L. No 109-58, Title XII, Subtitle A, 119 Stat. 594, 941 (2005), to be codified at 16 U.S.C. 824o.
\3\ 16 U.S.C. 824o(e)(3).
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On February 3, 2006, the Commission issued Order No. 672, implementing section 215 of the FPA.\4\ Pursuant to Order No. 672, the Commission certified one organization, NERC, as the ERO.\5\ The ERO is required to develop Reliability Standards, which are subject to Commission review and approval.\6\ The Reliability Standards will apply to users, owners and operators of the Bulk-Power System, as set forth in each Reliability Standard.
\4\ Rules Concerning Certification of the Electric Reliability Organization; Procedures for the Establishment, Approval and Enforcement of Electric Reliability Standards, Order No. 672, 71 FR 8662 (February 17, 2006), FERC Stats. & Regs. ] 31,204 (2006), order on reh'g, Order No. 672-A, 71 FR 19814 (April 18, 2006), FERC Stats. & Regs. ] 31,212 (2006).
\5\ North American Electric Reliability Corp., 116 FERC ] 61,062 (ERO Certification Order), order on reh'g & compliance, 117 FERC ] 61,126 (ERO Rehearing Order) (2006), order on compliance, 118 FERC ] 61,030 (2007) (January 2007 Compliance Order).
\6\ Section 215(a)(3) of the FPA defines the term Reliability Standard to mean ``a requirement, approved by the Commission under this section, to provide for reliable operation of the Bulk-Power System. This term includes requirements for the operation of existing Bulk-Power System facilities, including cybersecurity protection, and the design of planned additions or modifications to such facilities to the extent necessary to provide for the reliable operation of the Bulk-Power System, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity.'' 16 U.S.C. 824o(a)(3).
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Section 215(d)(2) of the FPA and the Commission's regulations provide that the Commission may approve a proposed Reliability Standard if it determines that the proposal is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission specified in Order No. 672 certain general factors it would consider when assessing whether a particular Reliability Standard is just and reasonable.\7\ According to this guidance, a Reliability Standard must provide for the Reliable Operation of Bulk-Power System facilities and may impose a requirement on any user, owner or operator of such facilities. It must be designed to achieve a specified
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reliability goal and must contain a technically sound means to achieve this goal. The Reliability Standard should be clear and unambiguous regarding what is required and who is required to comply. The possible consequences for violating a Reliability Standard should be clear and understandable to those who must comply. There should be clear criteria for whether an entity is in compliance with a Reliability Standard. While a Reliability Standard does not necessarily need to reflect the optimal method for achieving its reliability goal, a Reliability Standard should achieve its reliability goal effectively and efficiently. A Reliability Standard must do more than simply reflect stakeholder agreement or consensus around the ``lowest common denominator.'' It is important that the Reliability Standards developed through any consensus process be sufficient to adequately protect Bulk- Power System reliability.\8\
\7\ Order No. 672 at P 262, 321-37.
\8\ Id. at P 329.
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A Reliability Standard may take into account the size of the entity that must comply and the costs of implementation. A Reliability Standard should be a single standard that applies across the North American Bulk-Power System to the maximum extent this is achievable taking into account physical differences in grid characteristics and regional Reliability Standards that result in more stringent practices. It can also account for regional variations in the organizational and corporate structures of transmission owners and operators, variations in generation fuel type and ownership patterns, and regional variations in market design if these affect the proposed Reliability Standard. Finally, a Reliability Standard should have no undue negative effect on competition.\9\
\9\ Id. at P 332.
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Order No. 672 directs the ERO to explain how the factors the Commission identified are satisfied and how the ERO balances any conflicting factors when seeking approval of a proposed Reliability Standard.\10\
\10\ Id. at P 337.
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Pursuant to section 215(d)(2) of the FPA and Sec. 39.5(c) of the Commission's regulations, the Commission will give due weight to the technical expertise of the ERO with respect to the content of a Reliability Standard or to a Regional Entity organized on an Interconnection-wide basis with respect to a proposed Reliability Standard or a proposed modification to a Reliability Standard to be applicable within that Interconnection. However, the Commission will not defer to the ERO or to such a Regional Entity with respect to the effect of a proposed Reliability Standard or proposed modification to a Reliability Standard on competition.\11\
\11\ 18 CFR 39.5(c)(1), (3).
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The Commission's regulations require the ERO to file with the Commission each new or modified Reliability Standard that it proposes to be made effective under section 215 of the FPA. The filing must include a concise statement of the basis and purpose of the proposed Reliability Standard, a summary of the Reliability Standard development proceedings conducted by either the ERO or Regional Entity, together with a summary of the ERO's Reliability Standard review proceedings, and a demonstration that the proposed Reliability Standard is just, reasonable, not unduly discriminatory or preferential and in the public interest.\12\
\12\ 18 CFR 39.5(a).
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Where a Reliability Standard requires significant improvement, but is otherwise enforceable, the Commission approves the Reliability Standard. In addition, as a distinct action under the statute, the Commission directs the ERO to modify such a Reliability Standard, pursuant to section 215(d)(5) of the FPA, to address the identified issues or concerns. This approach will allow the proposed Reliability Standard to be enforceable while the ERO develops any required modifications.
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The Commission will remand to the ERO for further consideration a proposed new or modified Reliability Standard that the Commission disapproves in whole or in part.\13\ When remanding a Reliability Standard to the ERO, the Commission may order a deadline by which the ERO must submit a proposed or modified Reliability Standard.
\13\ 18 CFR 39.5(e).
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NERC Petition for Approval of Reliability Standards
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On April 4, 2006, as modified on August 28, 2006, NERC submitted to the Commission a petition seeking approval of the 107 proposed Reliability Standards that are the subject of this Final Rule.\14\ According to NERC, the 107 proposed Reliability Standards collectively define overall acceptable performance with regard to operation, planning and design of the North American Bulk-Power System. Seven of these Reliability Standards specifically incorporate one or more ``regional differences'' (which can include an exemption from a Reliability Standard) for a particular region or subregion, resulting in eight regional differences. NERC stated that it simultaneously filed the proposed Reliability Standards with governmental authorities in Canada. The Commission addresses these proposed Reliability Standards in this rulemaking proceeding.\15\
\14\ The filed proposed Reliability Standards are not attached to the Final Rule but are available on the Commission's eLibrary document retrieval system in Docket No. RM06-16-000 and are available on the ERO's Web site, http://www.nerc.com/filez/nerc_filings_ferc.html .
\15\ Eight proposed Reliability Standards submitted in the August 29, 2006 filing that relate to cyber security, Reliability Standards CIP-002 through CIP-009, will be addressed in a separate rulemaking proceeding in Docket No. RM06-22-000.
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On November 15, 2006, NERC filed 20 revised proposed Reliability Standards and three new proposed Reliability Standards for Commission approval. The 20 revised Reliability Standards primarily provided additional Measures and Levels of Non-Compliance, but did not add or revise any existing Requirements to these Reliability Standards. NERC requested that the 20 revised proposed Reliability Standards be included as part of the Final Rule issued by the Commission in this docket. The proposed new Reliability Standards, FAC-010-1, FAC-011-1, and FAC-014-1, will be addressed in a separate rulemaking proceeding in Docket No. RM07-3-000.
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On December 1, 2006, NERC submitted in Docket No. RM06-16-000 an informational filing entitled ``NERC's Reliability Standards Development Plan: 2007--2009'' (Work Plan). NERC stated it was submitting the Work Plan to inform the Commission of NERC's program to improve the Reliability Standards that currently are the subject of the Commission's rulemaking proceeding. 3. Staff Preliminary Assessment and Commission NOPR
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On May 11, 2006, Commission staff issued a ``Staff Preliminary Assessment of the North American Electric Reliability Council's Proposed Mandatory Reliability Standards'' (Staff Preliminary Assessment). The Staff Preliminary Assessment identifies staff's observations and concerns regarding NERC's then-current voluntary Reliability Standards. The Staff Preliminary Assessment describes issues common to a number of proposed Reliability Standards. It reviews and identifies issues regarding each individual Reliability Standard but did not make specific recommendations regarding the appropriate Commission action on a particular proposal.
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Comments on the Staff Preliminary Assessment were due by June 26, 2006. Approximately 50 entities filed comments in response to
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the Staff Preliminary Assessment. In addition, on July 6, 2006, the Commission held a technical conference to discuss NERC's proposed Reliability Standards, the Staff Preliminary Assessment, the comments and other related issues. 4. Notice of Proposed Rulemaking
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The Commission issued the NOPR on October 20, 2006, and required that comments be filed within 60 days after publication in the Federal Register, or January 2, 2007.\16\ The Commission granted the request of several commenters to extend the comment date to January 3, 2007. Several late-filed comments were filed. The Commission will accept these late-filed comments. A list of commenters appears in Appendix A.
\16\ Mandatory Reliability Standards for the Bulk Power System, Notice of Proposed Rulemaking, 71 FR 64,770 (Nov. 3, 2006), FERC Stats. & Regs., Vol IV, Proposed Regulations, ] 32,608 (2006).
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On November 27, 2006, the Commission issued a notice on the 20 revised Reliability Standards filed by NERC on November 15, 2006. In the notice, the Commission explained that, because of their close relationship with Reliability Standards dealt with in the October 20, 2006 NOPR, the Commission would address these 20 revised Reliability Standards in this proceeding.\17\ The notice provided an opportunity to comment on the revised Reliability Standards, with a comment due date of January 3, 2007.
\17\ The modified 20 Reliability Standards are: CIP-001-1; COM- 001-1; COM-002-2; EOP-002-2; EOP-003-1; EOP-004-1; EOP-006-1; INT- 001-2; INT-003-2; IRO-001-1; IRO-002-1; IRO-003-2; IRO-005-2; PER- 004-1; PRC-001-1; TOP-001-1; TOP-002-2; TOP-004-1; TOP-006-1; and TOP-008-1.
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The Commission issued a notice on NERC's Work Plan on December 8, 2006. While the Commission sought public comment on NERC's filing because it was informative on the prioritization of modifying Reliability Standards raised in the NOPR, the notice emphasized that the Work Plan was filed for informational purposes and NERC stated that it is not requesting Commission action on the Work Plan.
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On February 6, 2007, NERC submitted a request for leave to file supplemental information, and included a revised version of the NERC Statement of Compliance Registry Criteria (Revision 3). NERC noted that it had submitted with its NOPR comments an earlier version of the same document.\18\
\18\ See NERC comments, Attachment B.
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Discussion
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Overview
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The Commission's Underlying Approach To Review and Disposition of the Proposed Standards
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In this Final Rule, the Commission takes the important step of approving the first set of mandatory and enforceable Reliability Standards within the United States in accordance with the provisions of new section 215 of the FPA. The Commission's action herein marks the official departure from reliance on the electric utility industry's voluntary compliance with Reliability Standards adopted by NERC and the regional reliability councils and the transition to the mandatory, enforceable Reliability Standards under the Commission's ultimate oversight through the ERO and, eventually, the Regional Entities, as directed by Congress. As we discuss more fully below, in deciding whether to approve, approve and direct modifications, or remand each of the proposed Reliability Standards in this Final Rule, our overall approach has been one of carefully balancing the need for practicality during the time of transition with the imperatives of section 215 of the FPA and Order No. 672, and other considerations.
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In addition, our action today is informed by the August 14, 2003 blackout which affected significant portions of the Midwest and Northeast United States and Ontario, Canada and impacted an estimated 50 million people and 61,800 megawatts of electric load. As noted in the NOPR, a joint United States-Canada task force found that the blackout was caused by several entities violating NERC's then-effective policies and Reliability Standards.\19\ Those violations directly contributed to the loss of a significant amount of electric load. The joint task force identified both the need for legislation to make Reliability Standards mandatory and enforceable with penalties for noncompliance, as well as particular Reliability Standards that needed corrections to make them more effective in preventing blackouts. Indeed, the August 2003 blackout and the recommendations of the joint task force helped foster enactment of EPAct 2005 and new section 215 of the FPA.
\19\ NOPR at P 14.
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Mandates of Section 215 of the FPA
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The imperatives of section 215 of the FPA address not only the protection of the reliability of the Bulk-Power System but also the reliability roles of the Commission, the ERO, the Regional Entities, and the owners, users and operators of the Bulk-Power System.\20\ First, section 215 specifies that the ERO is to develop and enforce a comprehensive set of Reliability Standards subject to Commission review. Section 215 explains that a Reliability Standard is a requirement approved by the Commission that is intended to provide for the Reliable Operation of the Bulk-Power System. Such requirement may pertain to the operation of existing Bulk-Power System facilities, including cybersecurity protection, or it may pertain to the design of planned additions or modifications to such facilities to the extent necessary to provide for reliable operation of the Bulk-Power System.\21\
\20\ Generally speaking, the nation's Bulk-Power System has been described as consisting of ``generating units, transmission lines and substations, and system controls.'' Maintaining Reliability in a Competitive U.S. Electricity Industry, Final Report of the Task Force on Electric System Reliability, Secretary of Energy Advisory Board, U.S. Department of Energy (September 1998) at 2, 6-7. The transmission component of the Bulk-Power System is understood to provide for the movement of power in bulk to points of distribution for allocation to retail electricity customers. Essentially, transmission lines and other parts of the transmission system, including control facilities, serve to transmit electricity in bulk from generation sources to concentrated areas of retail customers, while the distribution system moves the electricity to where these retail customers consume it at a home or business.
\21\ 16 U.S.C. 824o(a)(3).
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Second, the reliability mandate of section 215 of the FPA addresses not only the comprehensive maintenance of the reliable operation of each of the elements of the Bulk-Power System, it also contemplates the prevention of incidents, acts and events that would interfere with the reliable operation of the Bulk-Power System. Further, section 215 seeks to prevent an instability, an uncontrolled separation or a cascading failure, whether resulting from either a sudden disturbance, including a cybersecurity incident, or an unanticipated failure of the system elements. In order to avoid these outcomes, the various elements and components of the Bulk-Power System are to be operated within equipment and electric system thermal, voltage and stability limits.\22\
\22\ ``The term `reliable operation' means operating the elements of the Bulk-Power System within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a result of a sudden disturbance, including a cybersecurity incident, or unanticipated failure of system elements.'' 16 U.S.C. 824o(a)(4).
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Third, section 215 of the FPA explains that the Bulk-Power System broadly encompasses both the facilities
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and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof) as well as the electric energy from generation facilities needed to maintain transmission system reliability.\23\ Further, section 215 explains that the interconnected transmission network within an Interconnection is a geographic area in which the operation of Bulk-Power System components is synchronized such that the failure of one such component, or more than one such component, may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the facilities within their control.\24\ A Cybersecurity Incident is explained to be a malicious act that disrupts or attempts to disrupt the operation of programmable electronic devices and communication networks including hardware, software or data that are essential to the reliable operation of the Bulk-Power System.\25\
\23\ 16 U.S.C. 824o(a)(1).
\24\ 16 U.S.C. 824o(a)(5).
\25\ 16 U.S.C. 824o(a)(8).
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Next, as to the reliability roles of the Commission and others, section 215 of the FPA explains that the ERO must file each of its Reliability Standards and any modification thereto with the Commission.\26\ The Commission will consider a number of factors before taking any action with respect thereto. We may approve the Reliability Standard or its modification only if we determine that it is just, reasonable, and not unduly discriminatory or preferential and in the public interest to do so. Also, in doing so, we are instructed to give due weight to the technical expertise of the ERO concerning the content of a proposed standard or a modification thereto. We must also give due weight to an Interconnection-wide Regional Entity with respect to a proposed Reliability Standard to be applicable within that Interconnection, except for matters concerning the effect on competition.\27\
\26\ ``The Electric Reliability Organization shall file each Reliability Standard or modification to a Reliability Standard that it proposes to be made effective under this section with the Commission.'' 16 U.S.C. 824o(d)(1).
\27\ ``The Commission may approve, by rule or order, a proposed Reliability Standard or modification to a Reliability Standard if it determines that the standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission shall give due weight to the technical expertise of the Electric Reliability Organization with respect to the content of a proposed standard or modification to a Reliability Standard and to the technical expertise of a regional entity organized on an Interconnection-wide basis with respect to a Reliability Standard to be applicable within that Interconnection, but shall not defer with respect to the effect of a standard on competition. A proposed standard or modification shall take effect upon approval by the Commission.'' 16 U.S.C. 824o(d)(2).
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Similarly, in considering whether to forward a proposed Reliability Standard to the Commission for approval, the ERO must rebuttably presume that a proposal from a Regional Entity organized on an Interconnection-wide basis for a Reliability Standard or modification to a Reliability Standard to be applicable on an Interconnection-wide basis is just, reasonable, and not unduly discriminatory or preferential, and in the public interest.\28\ The Commission may also give deference to the advice of a Regional Advisory Body organized on an Interconnection-wide basis in regard to whether a proposed Reliability Standard is just, reasonable and not unduly discriminatory or preferential and in the public interest, as it may apply within the region.\29\
\28\ 16 U.S.C. 824o(d)(3).
\29\ 16 U.S.C. 824o(j).
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Finally, the Commission is further instructed to remand to the ERO for further consideration any standard or modification that it does not approve in whole or part.\30\ We may also direct the ERO to submit a proposed Reliability Standard or modification that addresses a specific problem if we consider this course of action to be appropriate.\31\ Further, if we find that a conflict exists between a Reliability Standard and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, or ordered by the Commission applicable to a transmission organization,\32\ and if we determine that the Reliability Standard needs to be changed as a result of such a conflict, we must order the ERO to develop and file with the Commission a modified Reliability Standard for this purpose.\33\
\30\ 16 U.S.C. 824o(d)(4).
\31\ 16 U.S.C. 824o(d)(5).
\32\ Under section 215, a transmission organization is a RTO, ISO, independent transmission provider or other Transmission Organization finally approved by the Commission for the operation of transmission facilities. 16 U.S.C. 824o(a)(6).
\33\ 16 U.S.C. 824o(d)(6).
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Balancing the Need for Practicality With the Mandates of Section 215 and Order No. 672
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In enacting section 215, Congress chose to expand the Commission's jurisdiction beyond our historical role as primarily an economic regulator of the public utility industry under Part II of the FPA. Many entities not previously touched by our economic regulatory oversight are within our reliability purview and these entities will have to familiarize themselves not only with the new reliability obligations under section 215 of the FPA and the Reliability Standards that we are approving in this Final Rule, but also any proposed Reliability Standards or improvements that may implicate them that are under development by the ERO and the Regional Entities.\34\ We have taken these and other considerations into account and have tried to reach an appropriate balance among them.
\34\ Section 215(b) of the FPA provides that, for purposes of approving Reliability Standards and enforcing compliance with such standards, the Commission shall have jurisdiction over those entitles that had previously been excluded under section 201(f) of the FPA. Section 201(f) excludes the United States, a state or any political subdivision of a state, an electric cooperative that receives financing under the Rural Electrification Act of 1936, 7 U.S.C. 901 et seq., or that sells less than 4,000,000 megawatt hours of electricity per year, or any agency, authority, or instrumentality of any one or more of the foregoing, or any corporation which is wholly owned, directly or indirectly, by any one or more of the foregoing, or any officer, agent, or employee of any of the foregoing acting as such in the course of his official duty, unless such provision makes specific reference thereto. 16 U.S.C. 824(f).
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First, we have decided, as proposed in our NOPR, to approve most of the Reliability Standards that the ERO submitted in this proceeding, even though concerns with respect to many of the Reliability Standards have been voiced. As most of these Reliability Standards are already being adhered to on a voluntary basis, we are concerned that to remand them and leave no standard in place in the interim would not help to ensure reliability when such standards could be improved over time. In these cases, however, the concerns highlighted below merit the serious attention of the ERO and we are directing the ERO to consider what needs to be done and how to do so, often by way of descriptive directives.\35\
\35\ In Order No. 672, we decided, in response to some commenters' suggestions that a Reliability Standard should address the ``what'' and not the ``how'' of reliability and that the actual implementation should be left to entities such as control area operators and system planners, that in some limited situations, there may be good reason to do so but, for the most part, in other situations the ``how'' may be inextricably linked to the Reliability Standard and may need to be specified by the ERO to ensure the enforcement of the standard. Since leaving out implementation features could sacrifice necessary uniformity, create uncertainty for the entity that has to follow the standard, make enforcement difficult, or increase the complexity of the Commission's oversight and review process, we left it to the ERO to reach the appropriate balance between reliability principles and implementation features. Order No. 672 at P 260. We also decided that the Commission's authority to order the ERO to address a particular reliability topic is not in conflict with other provisions of Order No. 672 that assigned the responsibility for developing a proposed Reliability Standard to the ERO. Order No. 672 at P 416.
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We emphasize that we are not, at this time, mandating a particular
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outcome by way of these directives, but we do expect the ERO to respond with an equivalent alternative and adequate support that fully explains how the alternative produces a result that is as effective as or more effective that the Commission's example or directive.
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We have sought to provide enough specificity to focus the efforts of the ERO and others adequately. We are also sensitive to the concern of the Canadian Federal Provincial Territorial Working Group (FPT) about the status of an existing standard that is already being followed on a voluntary basis. The FPT suggests, for example, that instead of remanding an existing Reliability Standard, the Commission should conditionally approve the standard pending its modification.\36\ We believe the action we take today is similar in many respects to this approach.
\36\ FPT letter to Chairman Kelliher (submitted on July 10, 2006) (placed in the record of this proceeding).
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We have also adopted a number of other measures to mitigate many of the difficulties associated with the electric utility industry's preparation for and transition to mandatory Reliability Standards. For instance, we are directing the ERO and Regional Entities to focus their enforcement resources during an initial period on the most serious Reliability Standard violations. Moreover, because commenters have raised valid concerns as discussed below, our Final Rule relies on the existing NERC definition of bulk electric system and its compliance registration process to provide as much certainty as possible regarding the applicability and responsibility of specific entities under the approved standards. This approach should also assuage the concerns of many smaller entities.
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Discussion of the Commission's New Regulations
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Applicability
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In the NOPR, the Commission proposed to add Sec. 40.1(a) to the regulations. The Commission proposed that Sec. 40.1(a) would provide that this Part applies to all users, owners and operators of the Bulk-Power System within the United States (other than Alaska and Hawaii) including, but not limited to, the entities described in section 201(f) of the FPA. This statement is consistent with section 215(b) of the FPA and Sec. 39.2 of the Commission's regulations.
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The Commission further proposed to add Sec. 40.1(b), which would require each Reliability Standard made effective under this Part to identify the subset of users, owners and operators to whom that particular Reliability Standard applies. a. Comments
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NERC agrees with the Commission's proposal to add the text of Sec. 40.1(b) to its regulations to require that each Reliability Standard identify the subset of users, owners and operators to which that particular Reliability Standard applies and believes this requirement is currently established in NERC's Rules of Procedure.
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TANC supports proposed Sec. 40.1. It states that requiring each Reliability Standard to identify the subset of users, owners and operators to whom it applies, thereby limiting the scope of the broad phrase ``users, owners and operators,'' is a critical step to removing ambiguities from the Reliability Standards. According to TANC, the proposed text of Sec. 40.1 would eliminate ambiguities with regard to the entity responsible for complying with each Reliability Standard. In this way, Regional Entities and other interested parties will be allowed to weigh in during the Reliability Standards development process on the breadth of each standard and may urge NERC to accept any necessary regional variations that are necessary to maintain adequate reliability within the region.
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APPA believes that the Commission's proposal to add Sec. 40.1 and 40.2 to its regulations is generally appropriate and acceptable, but the regulatory language should be amended to make clear the exact universe of users, owners and operators of the Bulk-Power System to which the mandatory Reliability Standards apply. It recommends that the regulations provide that determinations as to applicability of standards to particular entities shall be resolved by reference to the NERC compliance registry. b. Commission Determination
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The Commission adopts the NOPR's proposal to add Sec. 40.1 to the Commission's regulations. The Commission disagrees with APPA's suggestion to define here the exact universe of users, owners and operators of the Bulk-Power System to which the mandatory Reliability Standards apply. Rather, consistent with NERC's existing approach, we believe that it is appropriate that each Reliability Standard clearly identify the subset of users, owners and operators to which it applies and the Commission determines applicability on that basis. As we discuss later, we approve NERC's current compliance registry to provide certainty and stability in identifying which entities must comply with particular Reliability Standards. 2. Mandatory Reliability Standards
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The Commission proposed to add Sec. 40.2(a) to the Commission's regulations. The proposed regulation text would require that each applicable user, owner and operator of the Bulk-Power System comply with Commission-approved Reliability Standards developed by the ERO, and would provide that the Commission-approved Reliability Standards can be obtained from the Commission's Public Reference Room at 888 First Street, NE., Room 2A, Washington, DC 20426.
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The Commission further proposed to add Sec. 40.2(b) to its regulations, providing that a modification to a Reliability Standard proposed to become effective pursuant to Sec. 39.5 shall not be effective until approved by the Commission. a. Comments
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NERC concurs with the Commission's proposal to require NERC to provide to the Commission a copy of all approved Reliability Standards for posting in its Public Reference Room. NERC agrees with the Commission that neither the text nor the title of an approved Reliability Standard should be codified in the Commission's regulations. b. Commission Determination
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For the reasons discussed in the NOPR, the Commission generally adopts the NOPR's proposal to add Sec. 40.2 to the Commission's regulations.\37\ However, after consideration, the Commission has determined that it is not necessary to have the approved Reliability Standards on file in the Commission's public reference room and on the NERC Web site. Therefore, we will require that all Commission-approved Reliability Standards be available on the ERO's Web site, with an effective date, and revise Sec. 40.2(b) to remove the following language: ``Which can be obtained from the Commission's Public Reference Room at 888 First Street, NE., Room 2A, Washington, DC, 20426.'' Further, to be consistent with Part 39 of our regulations, we remove the reference to NERC and replace it with ``Electric Reliability Organization.''
\37\ NOPR at P 37.
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Availability of Reliability Standards
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The Commission proposed to add Sec. 40.3 to the regulation text, which requires that the ERO maintain in electronic format that is accessible from the Internet the complete set of effective
[[Page 16422]]
Reliability Standards that have been developed by the ERO and approved by the Commission. The Commission stated that it believes that ready access to an electronic version of the effective Reliability Standards will enhance transparency and help avoid confusion as to which Reliability Standards are mandatory and enforceable. We noted that NERC currently maintains the existing, voluntary Reliability Standards on the NERC Web site.
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While the NOPR discusses each Reliability Standard and identifies the Commission's proposed disposition for each Reliability Standard, we did not propose to codify either the text or the title of an approved Reliability Standard in the Commission's regulations. Rather, we proposed that each user, owner or operator of the Bulk-Power System must comply with applicable Commission-approved Reliability Standards that are available in the Commission's Public Reference Room and on the Internet at the ERO's Web site. We stated that this approach is consistent with the statutory options of approving a proposed Reliability Standard or modification to a Reliability Standard ``by rule or order.'' \38\
\38\ See 16 U.S.C. 824o(d)(2).
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Comments
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NERC states that it can successfully implement the Commission's proposal to require NERC to maintain in electronic format that is accessible from the Internet the complete set of Reliability Standards that have been developed by the ERO and approved by the Commission. NERC currently maintains a public Web site displaying the existing, voluntary Reliability Standards for access by users, owners and operators of the Bulk-Power System. Once the proposed Reliability Standards are approved by the Commission, NERC will modify its Web site to distinguish which Reliability Standards have been approved by the Commission for enforcement in the United States.
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EEI states that the approval of Reliability Standards should be through a rulemaking rather than an order, except in very rare circumstances, because of the open nature of the rulemaking process. Where the Commission decides to proceed by order, EEI states that the Commission should give notice and an opportunity to comment on any proposed Reliability Standards. b. Commission Determination
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For the reasons discussed in the NOPR, the Commission adopts the NOPR's proposal to add Sec. 40.3 to the Commission's regulations; however the Commission has further clarified the proposed regulatory text.\39\ We clarify that the ERO must post on its Web site the currently effective Reliability Standards as approved and enforceable by the Commission. Further, we require the effective date of the Reliability Standards must be included in the posting.
\39\ NOPR at P 39-41.
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In response to EEI, the Commission anticipates that it will address most, if not all, new Reliability Standards proposed by NERC through a rulemaking process. However, we retain the flexibility to address matters by order where appropriate, consistent with the statute and our regulations.\40\ In Order No. 672, the Commission stated that it would provide notice and opportunity for public comment except in extraordinary circumstances and, on rehearing, clarified that any decision by the Commission not to provide notice and comment when reviewing a proposed Reliability Standard will be made in accordance with the criteria established in section 553 of the Administrative Procedure Act.\41\
\40\ See 16 U.S.C. 824o(d)(2) (``the Commission may approve, by rule or order, a proposed Reliability Standard or modification * * *''); 18 CFR 39.5(c).
\41\ See Order No. 672 at P 308; Order No 672-A at P 26.
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Applicability Issues
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Bulk-Power System v. Bulk Electric System
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The NOPR observed that, for purposes of section 215, ``Bulk- Power System'' means:
(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof) and (B) electric energy from generating facilities needed to maintain transmission system reliability. The term does not include facilities used in the local distribution of electric energy.
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The NERC glossary, in contrast, states that Reliability Standards apply to the ``bulk electric system,'' which is defined by its regions in terms of a voltage threshold and configuration, as follows:
As defined by the Regional Reliability Organization, the electrical generation resources, transmission lines, interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kV or higher. Radial transmission facilities serving only load with one transmission source are generally not included in this definition.\42\
\42\ NERC Glossary at 2. All citations to the Glossary in this Final Rule refer to the November 1, 2006 version filed on November 15, 2006.
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In the NOPR, the Commission proposed that, for the initial approval of proposed Reliability Standards, the continued use of NERC's definition of bulk electric system as set forth in the NERC glossary is appropriate.\43\ However, the Commission interpreted the term ``bulk electric system'' to apply to: (1) All of the >= 100 kV transmission systems and any underlying transmission system (2 under the OATT or self-supply, the Commission disagrees that adding LSEs to this Reliability Standard serves no reliability purpose. As discussed in the NOPR and the Staff Preliminary Assessment, LSEs are responsible for significantly more load than purchasing-selling entities.\471\ The reactive power requirements can have significant impact on the reliability of the system and LSEs should be accountable for that impact in the same ways that purchasing-selling entities are accountable, by providing reactive resources, and also by providing information to transmission operators to allow transmission operators to accurately study the reactive power needs for both the LSEs' and purchasing-selling entities' load characteristics.\472\ The Commission recognizes that all transmission customers of public utilities are required to purchase Ancillary Service No. 2 under the OATT or self- supply, but the OATT does not require them to provide information to transmission operators needed to accurately study reactive power needs. The Commission directs the ERO to address the reactive power requirements for LSEs on a comparable basis with purchasing-selling entities. ii. Acceptable Ranges of Net Power Factor Range
\471\ NOPR at P 1134.
\472\ Purchasing selling entities provide information concerning their load through the INT series of Reliability Standards. Load serving entities would need to provide similar information through this Reliability Standard.
(a) Comments
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SoCal Edison states that its Bulk-Power System facilities are designed and operated to provide a unity power factor during normal load conditions, and that during extreme load conditions, this power factor could be in the range of 0.95 to 1.0.
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APPA contends that it may be difficult to reach an agreement on acceptable ranges of net power factors at the interfaces where LSEs receive service from the Bulk-Power System because the acceptable range of power factors at any particular point on the electrical system varies based on many location-specific factors. APPA further states that system power factors will be affected by the transmission infrastructure used to supply the load. As an example, APPA states that an overhead circuit may operate at a higher power factor than an underground cable due to a substantial amount of reactive line charging, and that a transmission circuit carrying low levels of real power will tend to provide more reactive power, which will affect the need to switch off capacitor banks at the delivery point to manage delivery power factors. (b) Commission Determination
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In the NOPR, the Commission asked for comments on acceptable ranges of net power factor at the interface at which the LSEs receive service from the Bulk-Power System during normal and extreme load conditions. The Commission asked for these comments in response to concerns that during high loads, if the power factor at the interface between many LSEs and the Bulk-Power System is so low as to result in low voltages at key busses on the Bulk-Power System, then there is risk for voltage collapse. The Commission believes that Reliability Standard VAR-001-1 is an appropriate place for the ERO to take steps to address these concerns by setting out requirements for transmission owners and LSEs to maintain an appropriate power factor range at their interface. We direct the ERO to develop appropriate modifications to this Reliability Standard to address the power factor range at the interface between LSEs and the Bulk-Power System.
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We direct the ERO to include APPA's concern in the Reliability Standards development process. We note that transmission operators currently have access to data through their energy management systems to determine a range of power factors at which load operates during various conditions, and we suggest that the ERO use this type of data as a starting point for developing this modification.
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The Commission expects that the appropriate power factor range developed for the interface between the bulk electric system and the LSE from VAR-001-1 would be used as an input to the transmission and operations planning Reliability Standards. The range of power factors developed in this Reliability Standard provides the input to the range of power factors identified in the modifications to the TPL Reliability Standards. In the NOPR, the Commission suggested that sensitivity studies for the TPL Reliability Standards should consider the range of load power factors.\473\
\473\ NOPR at P 1047.
iii. Requirements on ``established limits'' and ``sufficient reactive resources'' (a) Comments
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Dynegy supports the Commission's proposal to include more definitive requirements on ``established
[[Page 16590]]
limits'' and ``sufficient reactive resources.'' It recommends that VAR- 001-1 be further modified to require the transmission operator to have more detailed and definitive requirements when setting the voltage schedule and associated tolerance band that is to be maintained by the generator operator. Dynegy states that the transmission operator should not be allowed to arbitrarily set these values, but rather should be required to have a technical basis for setting the required voltage schedule and tolerance band that takes into account system needs and any limitations of the specific generator. Dynegy believes that such a requirement would eliminate the potential for undue discrimination, as well as the possibility of imposing overly conservative and burdensome voltage schedules and tolerance bands on generator operators that could be detrimental to grid reliability, or conversely, the imposition of too low a voltage schedule and too wide a tolerance band that could also be detrimental to grid reliability.
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While MISO supports the concept of including more detailed requirements, it believes that there needs to be a definitive reason for establishing voltage schedules and tolerances, and that any situations monitored in this Reliability Standard need to be limited to core reliability requirements.
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EEI seeks clarification about whether the Commission is suggesting that reactive requirements should aim for significantly greater precision, especially in terms of planning for various emergency conditions. If so, EEI cautions the Commission against `` `putting too many eggs' '' in the reactive power `basket.' '' \474\ To the extent compliance takes place pursuant to all other modeling and planning assessments under the other Reliability Standards, EEI strongly believes that the Commission should have some high level of confidence that the system's reactive power needs can be met satisfactorily across a broad range of contingencies that planners might reasonably anticipate. Moreover, EEI believes that requirements to successfully predict reactive power requirements in conditions of near-system collapse would require significantly more creative guesswork than solid analysis and contingency planning. For example, EEI notes that the combinations and permutations of how a voltage collapse could occur on a system as large as the eastern Interconnection are numerous.
\474\ EEI at 99.
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EEI suggests that, alternatively, the Commission should consider that reactive power evaluations should be conducted within a process that is documented in detail and includes a range of contingencies that might be reasonably anticipated, because this would avoid the `one size fits all' problem, where a prescriptive analytical methodology does not fit with a particular system configuration. EEI believes that this flexible approach would provide a more effective planning tool for the industry, while satisfying the Commission's concerns over potentially inadequate reactive reserves. MRO notes that the need for, and method of providing for, reactive resources varies greatly, and if this Reliability Standard is expanded it must be done carefully. MRO believes that all entities should not be required to follow the same methodology to accomplish the goal of a reliable system. (b) Commission Determination
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In the NOPR, the Commission expressed concern that the technical requirements containing terms such as ``established limits'' or ``sufficient reactive resources'' are not definitive enough to address voltage instability and ensure reliable operations.\475\ To address this concern, the NOPR proposed directing the ERO to modify VAR-001-1 to include more detailed and definitive requirements on ``established limits'' and ``sufficient reactive resources'' and identify acceptable margins (i.e. voltage and/or reactive power margins) above voltage instability points to prevent voltage instability and to ensure reliable operations. We will keep this direction, and direct the ERO to include this modification in this Reliability Standard.
\475\ See NOPR at P 1140.
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We recognize that our proposed modification does not identify what definitive requirements the Reliability Standard should use for ``established limits'' and ``sufficient reactive resources.'' Rather, the ERO should develop appropriate requirements that address the Commission's concerns through the ERO Reliability Standards development process. The Commission believes that the concerns of Dynegy, EEI and MISO are best addressed by the ERO in the Reliability Standards development process.
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In response to EEI's concerns about a prescriptive analytical methodology, we clarify that the Commission is not asking that the Reliability Standard dictate what methodology must be used to determine reactive power needs. Rather, the Commission believes that the Reliability Standard would benefit from having more defined requirements that clearly define what voltage limits are used and how much reactive resources are needed to ensure voltage instability will not occur under normal and emergency conditions. For example, in the NOPR, the Commission suggested that NERC consider WECC's Reliability Criteria, which contain specific and definitive technical requirements on voltage and margin application. While we are not directing that the WECC reliability criteria be adopted, we believe they represent a good example of clearly-defined requirements for voltage and reactive margins.
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In sum, the Commission believes that minimum requirements for voltage levels and reactive resources should be clearly defined by placing more detailed requirements on the terms ``established limits'' and ``sufficient reactive resources'' in the Reliability Standard as discussed in the NOPR and the Staff Preliminary Assessment. As mentioned above, EEI's concerns should be considered in the ERO's Reliability Standards development process. iv. Periodic Voltage Stability Analysis in Real-Time Operations (a) Comments
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SDG&E supports the NOPR recommendation that a more effective requirement could be based on WECC's reliability criteria, which contain specific and definitive technical requirements on voltage and margin application. MidAmerican and PacifiCorp recommend that the ``WECC Methods to address voltage stability and settling margins'' should be consulted when designing corresponding NERC requirements.
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Xcel Energy recommends that this proposed modification instead address requirements to measure reactive power margin for a variety of topology conditions. MidAmerican recommends that the Commission's proposal be modified to require real-time checks for voltage stability assessments only in areas susceptible to voltage instability. Alternatively, MidAmerican suggests that the Commission ``should exempt from these requirements areas that can demonstrate they are not susceptible to voltage instability.''
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APPA, SDG&E and EEI all state that they are not aware of commercially-available tools to provide real-time transient stability assessments as part of an integrated energy management system for operators. APPA notes that
[[Page 16591]]
premature reliance on various tools that are now under development but not yet operational may jeopardize reliability by providing operators with a false sense of security and recommends leaving the decision to use such tools to NERC. EEI points out that any tools to conduct the analyses recommended by the Commission will require adjustments and modifications to improve their capabilities. Therefore, EEI recommends that the Commission consider its proposals regarding these standards as long-term industry objectives and of a lower priority than other Reliability Standards. In addition, it is unclear to EEI whether the proposed voltage stability assessments apply to steady-state or dynamic analyses, or whether these assessments are of a general nature. Since these analyses are technically complex and involve a broad range of assumptions regarding system configurations, EEI suggests that the Commission provide further guidance. (b) Commission Determination
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In response to the concerns of APPA, SDG&E and EEI on the availability of tools, the Commission recognizes that transient voltage stability analysis is often conducted as an offline study, and that steady-state voltage stability analysis can be done online. The Commission clarifies that it does not wish to require anyone to use tools that are not validated for real-time operations. Taking these comments into consideration, the Commission clarifies its proposed modification from the NOPR. For the Final Rule, we direct the ERO, through its Reliability Standards development process, to modify Reliability Standard VAR-001-1 to include Requirements to perform voltage stability analysis periodically, using online techniques where commercially-available, and offline simulation tools where online tools are not available, to assist real-time operations. The ERO should consider the available technologies and software as it develops this modification to VAR-001-1 and identify a process to assure that the Reliability Standard is not limiting the application of validated software or other tools.
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With respect to MidAmerican's suggestion of exempting areas that are not susceptible to voltage instability from the requirement to perform voltage stability analysis, the Commission notes that such exemption is not appropriate. We draw an analogy between transient stability limits and voltage stability limits. The requirement to perform voltage stability analysis is similar to existing operating practices for IROLs that are dictated by transient stability. Transient stability IROLs are determined using the results of off-line simulation studies, and no areas are exempt. In real-time operations, these IROLs are monitored to ensure that they are not violated. Similarly, voltage stability is conducted in the same manner, determining limits with off- line tools and monitoring limits in real-time operations. Areas that are susceptible to voltage instability are expected to run studies frequently, and areas that have not been susceptible to voltage instability are expected to periodically update their study results to ensure that these limits are not encountered during real-time operations. v. Controllable Load (a) Comments
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SMA supports adoption of the proposal to include controllable load as a reactive resource. SMA notes that its members' facilities often include significant capacitor banks, and further, reducing load can reduce local reactive requirements.
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SoCal Edison suggests caution regarding the Commission's proposal to include controllable load as a reactive resource. It agrees that, when load is reduced, voltage will increase and for that reason controllable load can lessen the need for reactive power. However, SoCal Edison believes that controllable load is typically an energy product and there are other impacts not considered by the Commission's proposal to include controllable load as a reactive resource. For example, activating controllable load for system voltage control lessens system demand, requiring generation to be backed down. It is not clear to SoCal Edison whether any consideration has been given to the potential reliability or commercial impacts of the Commission's proposal. (b) Commission Determination
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The Commission noted in the NOPR that in many cases, load response and demand-side investment can reduce the need for reactive power capability in the system.\476\ Based on this assertion, the Commission proposed to direct the ERO to include controllable load among the reactive resources to satisfy reactive requirements for incorporation into Reliability Standard VAR-001-1. While we affirm this requirement, we expect the ERO to consider the comments of SoCal Edison with regard to reliability and SMA in its process for developing the technical capability requirements for using controllable load as a reactive resource in the applicable Reliability Standards.
\476\ See FERC Staff Report, Principles of Efficient and Reliable Reactive Power Supply and Consumption (2005), available at http://www.ferc.gov/legal/staff-reports.asp.
vi. Summary of Commission Determination
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Accordingly, the Commission approves Reliability Standard VAR-001-1 as mandatory and enforceable. In addition, pursuant to section 215(d)(5) of the FPA and Sec. 39.5(f) of our regulations, the Commission directs the ERO to develop a modification to VAR-001-1 through the Reliability Standards development process that: (1) Expands the applicability to include reliability coordinators and LSEs; (2) includes detailed and definitive requirements on ``established limits'' and ``sufficient reactive resources'' as discussed above, and identifies acceptable margins above the voltage instability points; (3) includes Requirements to perform voltage stability analysis periodically, using online techniques where commercially available and offline techniques where online techniques are not available, to assist real-time operations, for areas susceptible to voltage instability; (4) includes controllable load among the reactive resources to satisfy reactive requirements and (5) addresses the power factor range at the interface between LSEs and the transmission grid. b. VAR-002-1
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Reliability Standard VAR-002-1 requires generator operators to operate in automatic voltage control mode, to maintain generator voltage or reactive power output as directed by the transmission operator, and to notify the transmission operator of a change in status or capability of any generator reactive power resource. The Reliability Standard requires generator owners to provide transmission operators with settings and data for generator step-up transformers. In the NOPR, the Commission stated its belief that Reliability Standard VAR-002-1 is just, reasonable, not unduly discriminatory or preferential and in the public interest; and proposed to approve it as mandatory and enforceable. i. Comments
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APPA and SDG&E agree that VAR-002-1 is sufficient for approval as a mandatory and enforceable Reliability Standard.
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Dynegy believes that VAR-002-1 should be modified to require more detailed and definitive requirements when defining the time frame associated with an ``incident'' of non compliance (i.e., each 4-second scan, 10-minute
[[Page 16592]]
integrated value, hourly integrated value). Dynegy states that, as written, this Reliability Standard does not define the time frame associated with an ``incident'' of non-compliance, but apparently leaves this decision to the transmission operator. Dynegy believes that either more detail should be added to the Reliability Standard to cure this omission, or the Reliability Standard should require the transmission operator to have a technical basis for setting the time frame that takes into account system needs and any limitations of the generator. Dynegy believes that this approach will eliminate the potential for undue discrimination and the imposition of overly conservative or excessively wide time frame requirements, both of which could be detrimental to grid reliability. ii. Commission Determination
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In the NOPR, the Commission commended NERC and industry for its efforts in expanding on the Requirements of VAR-002-1 from the predecessor standard, and noted that the submitted Reliability Standard includes Measures and Levels of Non-Compliance to ensure appropriate generation operation to maintain network voltage schedules. Accordingly, the Commission approves Reliability Standard VAR-002-1 as mandatory and enforceable.
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Dynegy has suggested an improvement to Reliability Standard VAR-002-1, and NERC should consider this in its Reliability Standards development process. 14. Glossary of Terms Used in Reliability Standards
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NERC's glossary is updated whenever a new or revised Reliability Standard is approved that includes a new defined term. The glossary may also be approved by a separate action using NERC's Reliability Standards development process. NERC updated the glossary in its August 28, 2006 Supplemental Filing.
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In the NOPR, the Commission proposed to approve the glossary. In addition, the Commission proposed to direct NERC to submit a modification to the glossary that: (1) Includes the statutory definitions of Bulk-Power System, Reliable Operation, and Reliability Standard, as set forth in section 215(a) of the FPA; (2) modifies the definitions of ``transmission operator'' and ``generator operator'' to include aspects unique to ISOs, RTOs and pooled resource organizations; (3) modifies the definition of ``bulk electric system'' consistent with discussion in the NOPR Common Issues section \477\ and (4) modifies the definition of terms concerning reserves (such as operating reserves) to include DSM, including controllable load.
\477\ NOPR at P 42-43.
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Comments
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NERC supports the Commission's proposal to approve the glossary. APPA supports the Commission's proposal to have NERC incorporate the statutory definitions of the terms Bulk-Power System, Reliable Operation and Reliability Standard into the NERC glossary, as an aide to the development of future NERC Reliability Standards.
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APPA suggests that the Commission permit NERC and industry to consider whether any modifications to the terms ``transmission operator'' and ``generation operator'' are needed, rather than directing NERC to modify these terms. APPA's initial reaction is that the existing terms are adequate and accommodate most elements of ISO, RTO and pooled resource organization operations. APPA believes that a broader and continuing inquiry is required to address such situations. APPA anticipates that many such concerns will arise as NERC and the Regional Entities implement the initial compliance program in June 2007, and states that any additional changes to the glossary should be driven by that experience.
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APPA's concerns regarding the Commission proposal to modify the definition of terms concerning reserves to include DSM (including controllable load) are discussed above in reference to the BAL Reliability Standards.
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NERC supports the Commission's proposal to direct NERC to complete the necessary improvements to the proposed Reliability Standards through the established NERC Reliability Standards development process.
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Santa Clara submits that, to eliminate any ambiguity about when these definitions of these commonly-used terms apply, a footnote should be added to the glossary that states that the definitions contained in the glossary are not intended to supersede any definitions in a tariff or contract approved or accepted by the Commission. b. Commission Conclusion
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The Commission approves the glossary. The terms defined in the glossary have an important role in establishing consistent understanding of the Reliability Standards Requirements and implementation. The approval of the glossary will provide continuity in application of the glossary definitions industry-wide, and will eliminate multiple interpretations of the same term or function, which may otherwise create miscommunication and jeopardize Bulk-Power System reliability. The glossary should be updated through the Reliability Standards development process whenever a new or revised Reliability Standard that includes a new defined term is approved, or as needed to clarify compliance activities. For example, the ERO will need to update the glossary to reflect modifications required by the Commission in this Final Rule.\478\
\478\ See, e.g., MOD-001-0, TOP-002-1 and the INT Reliability Standards.
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The Commission directs the ERO to modify the glossary through the Reliability Standards development process to include the statutory definitions of the terms Bulk-Power System, Reliable Operation and Reliability Standard. However, this determination does not negate our discussion in the Applicability section of the Final Rule. While the glossary should be revised to include the stautory definition of Bulk- Power System, the Reliability Standards refer to the bulk electric system, which is also defined in the glossary.
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The Commission directs the ERO to submit a modification to the glossary that enhances the definitions of ``transmission operator'' and ``generator operator'' to reflect concerns of the commenters and the direction provided by the Commission in other sections of this Final Rule. The Commission is concerned that there not be any gaps or unecessary overlaps of responsibilities concerning any of the Requirements in the Reliability Standards that are applicable to transmission operators and generator operators.
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Further, we adopt the NOPR proposal to require the ERO to submit a modification to the glossary that updates the definition of ``operating reserves,'' as required in our discussion of BAL-002-0 and BAL-005-0.
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Regarding Santa Clara's concern about terms in the glossary differing from definitions in tariffs, we clarify that the glossary governs Reliability Standards, while tariff definitions govern tariff issues. We recognize that many items have different tariff definitions from those in the NERC glossary. However, we expect most of these terms to be consistent. If the glossary definition creates a conflict between the Reliability Standards and a Transmission Organization's function,
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rule, order, tariff, rate schedule, or agreement accepted, approved, or ordered by the Commission, then the Transmission Organization shall expeditiously notify the Commission, the Electric Reliability Organization and the relevant Regional Entity of the possible conflict pursuant to Sec. 39.6 of the Commission's regulations.\479\
\479\ 18 CFR 39.6 (2006).
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In conclusion, the Commission approves the glossary. Further, pursuant to section 215(d)(5) of the FPA and Sec. 39.5(f) of our regulations, the Commission directs ERO to modify the glossary through the Reliability Standards development process to: (1) Include the statutory definitions of the terms Bulk-Power System, Reliable Operation and Reliability Standard; (2) modify the definition of ``transmission operator'' and ``generator operator'' to include aspects unique to ISO, RTO and pooled resource organizations and (3) modify the definition of ``operating reserves'' as discussed in BAL-002-0 and BAL- 005-0.
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Information Collection Statement
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The Office of Management and Budget (OMB) regulations require that OMB approve certain reporting and recordkeeping (collections of information) imposed by an agency.\480\ The information collection requirements in this Final Rule are identified under the Commission data collection, FERC-725A ``Bulk Power System Mandatory Reliability Standards.'' Under section 3507(d) of the Paperwork Reduction Act of 1995,\481\ the proposed reporting requirements in the subject rulemaking will be submitted to OMB for review. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426 (Attention: Michael Miller, Office of the Executive Director, 202-502-8415) or from the Office of Management and Budget (Attention: Desk Officer for the Federal Energy Regulatory Commission, fax: 202- 395-7285, e-mail: oira_submission@omb.eop.gov).
\480\ 5 CFR 1320.11.
\481\ 44 U.S.C. 3507(d) (2000).
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The ``public protection'' provisions of the Paperwork Reduction Act of 1995 requires each agency to display a currently valid control number and inform respondents that a response is not required unless the information collection displays a valid OMB control number on each information collection or provides a justification as to why the information collection number cannot be displayed. In the case of information collections published in regulations, the control number is to be published in the Federal Register.
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Public Reporting Burden: In the NOPR, the Commission based its initial estimates on the premise that the proposed Reliability Standards have already been in effect for a substantial period of time on a voluntary basis and consequently entities would have already put them into practice. Seventy of the 125 commenters express concern with the burden to be imposed by the NOPR's requirements. The majority of these comments address the potential impact the requirements would have on small entities but did not provide specific estimates on this impact. Because these comments are also the subject of the analysis performed under the Regulatory Flexibility Act, the Commission has provided a response under that section of this rulemaking. Commenters also raise concerns about the impact of specific Reliability Standards, and the Commission has addressed those concerns in the discussion of each Reliability Standard. Five commenters, Reliant, TAPS, Wisconsin Electric, Portland General and WECC questioned the Commission's initial burden estimates as contained in the NOPR.
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By Reliant's estimate, it would take at least four employees to prepare and submit compliance filings and to monitor compliance on an on-going basis. TAPS, while not providing a specific estimate on the burden, believes that the NOPR's proposed application of mandatory Reliability Standards is overly-broad and would encompass several thousand municipal systems. Wisconsin Electric states that the NOPR significantly understated the impact that would be imposed by mandatory Reliability Standards. Wisconsin Electric believes that a ``typical control area utility with its multiple functional entity responsibilities'' will need far more than the 100 hours estimated by the Commission to manage a quality compliance program as discussed in the ERO's Sanction Guidelines.\482\
\482\ Wisconsin Electric at 9.
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Portland General believes that meeting the Requirements of mandatory Reliability Standards will place an additional burden for documentation, over and above compliance with the substance of the Requirements. It claims that the NOPR failed to take this additional burden into account in its cost estimate for compliance. WECC disagrees with the Commission's estimate that compliance cost would be $40 million annually on an aggregate basis. It also disagrees with the Commission's assumption that there would be no increased reporting burden or additional information requirements because the Reliability Standards impose new documentation requirements that will create additional costs.
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In response to the comments and upon further review we have revised our initial estimates as reflected in the table below. While the ERO has submitted several new Reliability Standards and included additional Measures for documenting compliance with 20 existing Reliability Standards, we continue to believe that the reporting requirements embedded in the Reliability Standards that are approved in the Final Rule have been implemented on a voluntary basis for many years in most instances.\483\ This would not apply, however, to entities that are new to reliability oversight. We encourage entities that are responsible for compliance with mandatory Reliability Standards to develop a quality compliance program as discussed in the ERO's Sanction Guidelines. However, we believe that the costs of such a program are distinct from the reporting burdens that are estimated below.
\483\ NOPR at P 1157.
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Further, our estimates below reflect a revision in the number of respondents, based on our determinations regarding ``applicability,'' as discussed in section II.C above.
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Total Annual Hours for Collection:
Number of Number of Hours per Total annual Data collection
respondents responses response
hours
FERC-725A
Investor Owned Utilities....................
170
1
2,080
353,600
Municipals and Cooperatives--Large..........
80
1
1,420
113,600
Municipals and Cooperatives--Small..........
670
1
710
475,700
Generator Operators.........................
360
1
500
180,000
[[Page 16594]]
Power Marketers.............................
159
1
100
15,900
Recordkeeping............................... Investor Owned Utilities ..............
35,360 Munis/Coops (Large) ..............
11,360 Munis/Coops (Small) ..............
47,570 Generator Owner/Ops. ..............
18,000 Power Marketers
..............
1,590 Totals.................................. .............. .............. .............. 1,252,680
(FTE=Full Time Equivalent or 2,080 hours)
Total Hours = 1,138,800 (reporting) + 113,880 (recordkeeping) = 1,252,680 hours. This estimated reporting burden will be significantly reduced once joint action agencies are established, which will reduce the number of small entities that will be responsible for compliance with Reliability Standards.
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Information Collection Costs: The Commission sought comments about the costs needed to comply with these requirements. As noted above, a number of commenters state that the NOPR underestimated the burden of the rulemaking in terms of hours required to comply. However, no comments were received regarding the Commission's estimate of the projected cost of $200/hour to comply with these requirements. In further consideration, the Commission believes that the $200/hour projection is too high, and the calculations below reflect an adjusted hourly figure.
Cost to Comply: hour), consultant ($150), technical ($80) and administrative support ($25)).
Total Costs: Reporting ($129,823,200) + Recordkeeping ($1,935,960) = $131,759,160.
Sources: ``NERC Compliance Update: What it might cost to comply'', Herb Schrayshuen, NARUC-Electric Reliability Staff Subcommittee, November 12, 2006.
Janco Associates, Inc., 2005 Information Technology Compensation Study, January 2005.
Bureau of Labor Statistics, Department of Labor, Occupational Outlook Handbook, http://www.bls.gov/oco/ocos268.htm.
Titles: FERC-725A ``Mandatory Reliability Standards for the Bulk- Power System''.
Action: Proposed Collection of Information.
OMB Control Nos: To be determined.
Respondents: Business or other for profit, not for profit institutions, state, local or tribal government and Federal Government.
Frequency of Responses: On occasion.
Necessity of Information: The Final Rule approves 83 Reliability Standards. Compliance with such Reliability Standards will be mandatory and enforceable for the applicable categories of entities identified in each Reliability Standard. These Reliability Standards are approved by the Commission pursuant to its authority under section 215 of the FPA, which authorizes the Commission to approve a Reliability Standard proposed by the ERO if the Commission determines that it is just and reasonable, not unduly discriminatory or preferential and in the public interest. The Reliability Standards approved in this Final Rule are necessary for the reliable operation of the nation's interconnected Bulk-Power System.
For information on the requirements, submitting comments on the collection of information and the associated burden estimates including suggestions for reducing this burden, please send your comments to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 (Attention: Michael Miller, Office of the Executive Director, 202-502-8415) or send comments to the Office of Management and Budget (Attention: Desk Officer for the Federal Energy Regulatory Commission, fax: 202-395-7285, e-mail oira_submission@omb.eop.gov).
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Environmental Analysis
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The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.\484\ The actions taken here fall within the categorical exclusion in the Commission's regulations for rules that are clarifying, corrective or procedural, for information gathering, analysis, and dissemination.\485\
\484\ Regulations Implementing the National Environmental Policy Act, Order No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC Stats. & Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
\485\ 18 CFR 380.4(a)(5).
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Regulatory Flexibility Act
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The Regulatory Flexibility Act of 1980 (RFA)\486\ generally requires a description and analysis of Final Rules that will have significant economic impact on a substantial number of small entities. The RFA does not mandate any particular outcome in a rulemaking. It only requires consideration of alternatives that are less burdensome to small entities and an agency explanation of why alternatives were rejected.
\486\ 5 U.S.C. 601-612 (2006).
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In drafting a rule an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact and (3) make the analyses available for public comment.\487\ In its NOPR, the agency must either include an initial regulatory flexibility analysis (initial RFA) \488\ or certify that the proposed rule will not have a ``significant impact on a substantial number of small entities.'' \489\
\487\ 5 U.S.C. 601-604.
\488\ 5 U.S.C. 603(a).
\489\ 5 U.S.C. 605(b).
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If in preparing the NOPR an agency determines that the proposal could have a significant impact on a substantial number of small entities, the agency shall ensure that small entities will have an opportunity to participate in the rulemaking procedure.\490\
\490\ 5 U.S.C. 609(a).
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In its Final Rule, the agency must also either prepare a Final Regulatory Flexibility Analysis (Final RFA) or make the requisite certification. Based on the comments the agency receives on the NOPR, it can alter its original position as expressed in the NOPR but it is not required to make any substantive changes to the proposed regulation.
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The statute provides for judicial review of an agency's final certification or Final RFA.\491\ An agency must file a
[[Page 16595]]
Final RFA demonstrating a ``reasonable, good-faith effort'' to carry out the RFA mandate.\492\ However, the RFA is a procedural, not a substantive, mandate. An agency is only required to demonstrate a reasonable, good faith effort to review the impact the proposed rule would place on small entities, any alternatives that would address the agency's and small entities' concerns and their impact, provide small entities the opportunity to comment on the proposals, and review and address comments. An agency is not required to adopt the least burdensome rule. Further, the RFA does not require an agency to assess the impact of a rule on all small entities that may be affected by the rule, only on those entities that the agency directly regulates and that will be directly impacted by the rule.\493\
\491\ 5 U.S.C. 611.
\492\ United Cellular Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001); Alenco Commuications, Inc. v. FCC, 201 F.3d 608, 625 (5th Cir. 2000).
\493\ Mid-Tex Electric Coop., Inc. v. FERC, 773 F.2d 327 (D.C. Cir 1985).
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Notice of Proposed Rulemaking
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In the NOPR, the Commission stated that the proposed Reliability Standards ``may cause some small entities to experience significant economic impact.'' \494\ In response to the ERO's proposal to develop limits on the applicability of specific Reliability Standards, the Commission stated that, while it could not rule on the merits until a specific proposal is submitted, the Commission stated that it believed that reasonable limits based on size may be an acceptable alternative to ``lessen the economic impact on the proposed rule on small entities.'' \495\ The Commission emphasized that any such limits must not weaken Bulk-Power System reliability.
\494\ NOPR at P 1175.
\495\ Id. at 1176.
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Further, under the Applicability Issues section of the NOPR, we devoted an entire subsection to the issues facing small entities.\496\ The Commission stated that there may be instances in which small entity compliance with a particular Reliability Standard may be critical to reliability. It explained that, in such circumstances, it may be appropriate to differentiate among subsets of users, owners and operators. As an example, the NOPR provided that ``the requirement to have adequate communications capabilities to address real-time emergency conditions * * * may be necessary for all applicable entities regardless of size or role, although we understand that the implementation of these requirements for applicable entities may vary based on size or role.'' \497\ Additionally, in the NOPR, the Commission supported the ERO's proposal to permit the registration of ``joint action agencies,'' a concept designed to ease the burden of small entities by allowing one organization to perform reliability- related activities for multiple entities. The Commission proposed to direct the ERO to develop procedures that would permit a joint action agency or similar organization to accept compliance responsibility on behalf of its members.
\496\ Id. at 49-53 (Section B.3 ``Applicability to Small Entities'').
\497\ Id. at 51.
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Thus, in the NOPR, the Commission discussed the potential disparate impact on small entities, considered the implications and potential alternatives and solicited comments on the limiting the application of the Reliability Standards to small entities. Further, the Information Collection Statement discussed the difficulty estimating the number of small entities that would be affected by the Reliability Standards. As such, the Commission was aware of the potential impacts on small entities and was actively considering alternatives that would lessen the impact on them while still ensuring reliability of the Bulk-Power System. 1. Comments
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APPA and NRECA, in their joint comments, provide data about their membership. APPA states that, based on 2005 data, 1,971 public utilities or 98 percent of the public utilities in the United States had less than 4 million MW hours in sales which would qualify them as small entities. Of these, 90 percent--or 1,775--are distribution-only utilities, 48 are wholesale-only, and 148 make both wholesale and retail sales.\498\ NRECA states that its membership includes 930 rural cooperatives most of which are distribution utilities and almost all of which would qualify as small entities. Additionally, according to NRECA, 40 of its 65 generation and transmission cooperatives also qualify as small entities.\499\
\498\ APPA/NRECA comments at 2.
\499\ Id.
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APPA/NRECA contends that the Commission did not include a complete initial RFA analysis as required and, without a full initial RFA, the Commission cannot lay a proper foundation for eliciting public comments on the impacts of the rule on small entities. Specifically, APPA/NRECA contends that the NOPR failed to include proposals that would minimize the impact on small entities. They assert that, instead, the Commission's proposed definition of bulk electric system in the NOPR exceeds NERC's definition and thereby sweeps in many small facilities that are unnecessary to the Reliable Operation of the Bulk- Power System. APPA/NRECA argue that, if the Commission adopts this definition, many small transmission owners and operators of lower voltage transmission systems will be unnecessarily required to bear the increased training costs to comply with Reliability Standards, yet the NOPR never considered these additional burdens. APPA/NRECA also asserts that, under this definition, many small distribution providers would also be required to comply with the communication-related (COM) Reliability Standards at additional costs that were never discussed. They request that the Commission address these shortcomings.
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APPA/NRECA also claims that the Commission substantially underestimated the number of small entities that would be impacted by the application of the Reliability Standards as proposed in the NOPR. APPA/NRECA asserts that 98 percent of public utilities and 99 percent of public cooperatives, along with numerous small industrial facilities, small qualifying facilities and small generators would qualify under the small entity definition and would be impacted by the rule. According to APPA/NRECA, most of these small entities would not have a material impact on the reliability of the Bulk-Power System but, under the NOPR's definition of Bulk-Power System, would be required to comply with the Reliability Standards.
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APPA/NRECA suggests that the Commission can significantly reduce the impact on small entities by ``focusing on materiality.'' They contend that an overly-expansive reliability regime would violate the FPA by imposing unnecessary regulatory burdens on small entities and divert the ERO's and the Commission's resources away from those entities that are crucial to Bulk-Power System reliability. APPA/NRECA asserts that the Commission can ensure reliability without unnecessarily burdening small entities by considering two alternatives. First, they urge the Commission to adopt NERC's current definition of bulk electric system. Second, they ask the Commission to reconsider the standard-by-standard approach to defining owners, users and operators of the Bulk-Power System and, instead, accept the NERC compliance registry to identify the entities that will be responsible for compliance with Reliability Standards. APPA/NRECA, TAPS, and numerous
[[Page 16596]]
other commenters discuss these proposals in their comments, which the Commission addresses in the Applicability Issues section of the Final Rule.\500\
\500\ See Applicability Issues: Bulk-Power System v. Bulk Electric System and Applicability to Small Entities, supra sections II.C.1-2.
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TAPS asserts that the Commission should apply the ERO's registration thresholds and, ``absent such limits, the Commission cannot satisfy its obligations under the [RFA].'' \501\ Georgia Cities asserts that the Commission should adopt reasonable limits on the application of the Reliability Standards to small entities, as it promised in its RFA statement.
\501\ TAPS at 13.
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Commission Response
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The Commission believes that the NOPR provided a meaningful discussion of the impact that the Reliability Standards could have on small entities and discussed several potential alternatives. In fact, the NOPR contained an entire section on the applicability of the proposed standards on small entities.\502\ In that section, the Commission discussed various alternatives to lessen the acknowledged potential impact on small entities. The Commission indicated its receptiveness to the ERO's proposal to develop threshold limits regarding the applicability of specific Reliability Standards. The Commission also suggested that, where it is necessary for reliability that a Reliability Standard apply to small entities, implementation of the requirements of such Reliability Standards may vary based on size or role. In the NOPR, the Commission set forth another alternative to address the potential burden on small entities when it proposed to direct the ERO to develop procedures permitting a joint action agency or similar organization to accept compliance responsibility on behalf of its members.
\502\ NOPR at P 49-53.
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As previously stated, the purpose of the RFA is to ensure that agencies consider the impact a proposed rule would have on small entities and any potential alternatives that would minimize that impact. The initial RFA analysis is designed to elicit informed comments on the impacts to small entities and alternatives. The Commission believes the NOPR achieved this goal. After the NOPR was issued, the Commission received over 125 comments and a majority of those addressed small entity issues. Further, almost all of the commenters addressed the NOPR's proposed interpretation of the definition of the bulk electric system, which as APPA/NRECA states would have had the greatest impact on small entities.
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In addition to the comments received addressing these issues, Commission staff has met with representatives of small entities, including APPA and NRECA, and listened to their concerns on the potential impacts of the Final Rule and discussed possible alternatives.
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Since receiving APPA/NRECA's comments on the RFA, the Commission has compiled and reviewed available data on small entities and the impact of the Final Rule on such entities. Therefore, the Commission believes that any inadequacy that may have existed in the NOPR's initial RFA analysis has now been corrected. This Final RFA and the alternative proposals adopted herein demonstrate the Commission's consideration of the potential burdens that the rulemaking could place on small entities.
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As discussed in the Applicability section above, the Commission adopts in the Final Rule the current definition of bulk electric system. Any possible change to the definition would occur in a future Commission proceeding. Further, the Commission has endorsed the ERO's compliance registry process to identify the entities that must comply with mandatory Reliability Standards.\503\ By adopting these alternative proposals, the Commission has been responsive to small entity concerns and greatly reduced the number of small entities that will be affected by the Final Rule.
\503\ As noted previously, APPA, NRECA and TAPs submitted supplemental comments supporting the ERO's compliance registry process.
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Final RFA
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Description of the Reasons Why Action by the Agency Is Being Considered
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On April 4, 2006, as later modified and supplemented, NERC-- the ERO--submitted 107 Reliability Standards for Commission approval pursuant to section 215(d) of the FPA. The ERO's submission includes the ``Version 0'' standards with which the electric industry has complied on a voluntary basis as well as several new Reliability Standards approved by NERC since its certification as the ERO.
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As set forth in section 215(a) of the FPA, the term ``Reliability Standard'' means a requirement, approved by the Commission to provide for the Reliable Operation of the Bulk-Power System. The term ``Reliable Operation'' means ``operating the elements of the bulk-power system within equipment and electric system, thermal, voltage, and stability limits so that instability, uncontrolled, or cascaded failures of such system will not occur as a result of a sudden disturbance * * * or unanticipated failure of system elements.'' \504\ Thus, the purpose of each Reliability Standard approved by the Commission in this Final Rule is to provide for the Reliable Operation of the Bulk-Power System and thereby minimize the risk of instability, uncontrolled or cascading failure on the Bulk-Power System.
\504\ 16 U.S.C. 824o(a)(4) (2006).
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The Commission is approving 83 of the proposed Reliability Standards. Upon the effective date of the Final Rule, compliance with these Reliability Standards will be mandatory and enforceable for applicable users, owners and operators of the Bulk-Power System. The Commission believes that these Reliability Standards form a solid foundation on which to develop and maintain the reliability of the North American Bulk-Power System. 2. Objectives of and the Legal Basis for the Final Rule
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This Final Rule requires applicable users, owners and operators of the Bulk-Power System to comply with mandatory and enforceable Reliability Standards. As discussed above, these Reliability Standards are necessary to ensure the reliable operation of the North American Bulk-Power System.
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EPAct 2005 added a new section 215 to the FPA, which provides for a system of mandatory and enforceable Reliability Standards. Section 215(d)(1) of the FPA provides that the ERO must file each Reliability Standard or modification to a Reliability Standard that it proposes to be made effective, i.e., mandatory and enforceable, with the Commission. As mentioned above, on April 4, 2006, and as later modified and supplemented, the ERO submitted 107 Reliability Standards for Commission approval pursuant to section 215(d) of the FPA.
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Section 215(d)(2) of the FPA provides that the Commission may approve, by rule or order, a proposed Reliability Standard or modification to a proposed Reliability Standard if it meets the statutory standard for approval, giving due weight to the technical expertise of the ERO. Alternatively, the Commission may remand a Reliability Standard pursuant to section 215(d)(4) of the FPA. Further, the Commission may order the ERO to submit to the
[[Page 16597]]
Commission a proposed Reliability Standard or a modification to a Reliability Standard that addresses a specific matter if the Commission considers such a new or modified Reliability Standard appropriate to ``carry out'' section 215 of the FPA.\505\ The Commission's action in this Final Rule is based on its authority pursuant to section 215 of the FPA.
\505\ See 16 U.S.C. 824o(d)(5) (2006).
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Significant Issues Raised by Comments, Agency Assessment of the Comments and a Statement of Any Changes Made in the Proposed Rule as a Result of the Comments
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Numerous small entity commenters oppose the NOPR interpretation of bulk electric system and urge the Commission to adopt the ERO's current definition of that term. Further, small entity commenters oppose the NOPR's proposal to address applicability on a standard-by-standard basis and, instead, ask that the Commission rely on the ERO's compliance registry process as the means to identify entities responsible for complying with mandatory and enforceable Reliability Standards. Commenters assert that the Commission's proposed changes would greatly increase the number of small entities that would be significantly impacted by the Final Rule.
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As discussed above, the Commission is not adopting its proposed interpretation of bulk electric system contained in the NOPR. Rather, the Commission adopts the NERC definition of bulk electric system. Further, the Commission is relying on NERC's registration process to provide as much certainty as possible regarding the applicability and responsibility of specific entities in the start-up phase of the mandatory Reliability Standards regime. Any change in these approaches would be addressed in a separate Commission proceeding.
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A complete summary of these comments and the Commission's response has been previously addressed in the Applicability section. 4. Description and Estimate of the Number of Small Entities To Which the Final Rule Will Apply
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According to the SBA, a small electric utility is defined as one that has a total electric output of less than four million MWh in the preceeding year.
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According to the DOE's Energy Information Administration (EIA), there were 3,284 electric utility companies in the United States in 2005,\506\ and 3,029 of these electric utilities qualify as small entities under the SBA definition. Of these 3,284 electric utility companies, the EIA subdivides them as follows: (1) 883 cooperatives of which 852 are small entity cooperatives; (2) 1,862 municipal utilities, of which 1842 are small entity municipal utilities; (3) 127 political subdivisions, of which 114 are small entity political subdivisions; (4) 159 power marketers, of which 97 individually could be considered small entity power marketers; \507\ (5) 219 privately owned utilities, of which 104 could be considered small entity private utilities; (6) 25 state organizations, of which 16 are small entity state organizations and (7) nine federal organizations of which four are small entity federal organizations.
\506\ See Energy Information Administration Database, Form EIA- 861, Dept. of Energy (2005), available at http://www.eia.doe.gov/cneaf/electricity/page/eia861.html .
\507\ Most of these small entity power marketers and private utilities are affiliated with others and, therefore, do not qualify as small entities under the SBA definition.
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As discussed above, the Commission is relying on the ERO's compliance registry process to identify which entities must comply with mandatory and enforceable Reliability Standards. The ERO's Compliance Registry Criteria describe how NERC will identify organizations that may be candidates for registration and assign them to the compliance registry.\508\ According to this document, the ERO will register transmission owners and operators with an integrated element associated with the Bulk-Power System of 100 kV and above, or lower voltage as defined by a Regional Entity. The ERO plans to register only those distribution providers or LSEs that have a peak load of 25 MW or greater and are directly connected to the bulk electric system or are designated as a responsible entity as part of a required underfrequency load shedding program or a required undervoltage load shedding program. For generators, the ERO plans to register individual units of 20 MVA or greater that are directly connected to the bulk electric system, generating plants with an aggregate rating of 75 MVA or greater, any blackstart unit material to a restoration plan, or any generator ``regardless of size, that is material to the reliability of the Bulk- Power System.'' Further, the ERO will not register an entity that meets the above criteria if it has transferred responsibility for compliance with mandatory Reliability Standards to a joint action agency or other organization.
\508\ See NERC Statement of Compliance Registry Criteria (Revision 3) at 6-8.
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As mentioned above, the SBA defines a small electric utility as one that has a total electric output of less than four million MWh in the proceeding year. Thus, the set of small entities that must comply with mandatory Reliability Standards would be those that exceed the ERO registry criteria but still meet the SBA definition. The Commission has reviewed data compiled by EIA in Form EIA-861, NERC's pre-registry data, and information submitted by commenters, and determined an estimate of the number of small entities to which the Final Rule will apply.
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The Commission estimates that the Reliability Standards approved in the Final Rule will apply to approximately 682 small entities (excluding entities in Alaska and Hawaii) as follows: 670 small municipal utilities and cooperatives and 12 small investor-owned utilities.
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As discussed above, the ERO's Compliance Registry Criteria allows for a joint action agency, G&T cooperative or similar organization to accept compliance responsibility on behalf of its members. Once such organizations register with the ERO, the number of small entities registered with the ERO will diminish and, thus, significantly reduce the impact of the Final Rule on small entities.
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To be included in the compliance registry, the ERO will have made a determination that a specific small entity has a material impact on the Bulk-Power System. Consequently, the compliance of such small entities is justifiable as necessary for Bulk-Power System reliability. 5. Description of the Projected Reporting, Recordkeeping and Other Compliance Requirements for Small Entities
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A complete summary of comments and the Commission's response has been previously addressed in the Information Collection Statement section. 6. Duplication of Other Federal Rules
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There are no relevant Federal rules which may duplicate, overlap or conflict with the Final Rule. 7. Description of Any Significant Alternatives to the Final Rule
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In the Final Rule, the Commission adopts several significant alternatives that will minimize the burden on small entities. The Commission approves the current ERO definition of bulk electric system, which
[[Page 16598]]
will reduce significantly the number of small entities responsible for complying with the Final Rule. The Commission also approves the ERO compliance registry process to identify the entities responsible for compliance with mandatory and enforceable Reliability Standards. Further, the Commission directs the ERO to submit a procedure to permit a joint action agency or similar organization to accept compliance responsibility on behalf of its members. A complete summary of comments and the Commission's response has been previously addressed in the Applicability Section.
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Document Availability
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In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, N.E., Room 2A, Washington DC 20426.
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From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
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User assistance is available for eLibrary and FERC's Web site during normal business hours from our Help line at (202) 502-8222 or the Public Reference Room at (202) 502-8371 Press 0, TTY (202) 502- 8659. E-mail the Public Reference Room at public.referenceroom@ferc.gov.
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Effective Date and Congressional Notification
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These regulations are effective June 4, 2007. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is a ``major rule'' as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.
List of Subjects in 18 CFR Part 40
Electric power; reporting and recordkeeping requirements.
By the Commission. Philis J. Posey, Acting Secretary.
0 In consideration of the foregoing, the Commission amends Chapter I, Title 18, Code of Federal Regulations, by adding Part 40 to read as follows:
PART 40--MANDATORY RELIABILITY STANDARDS FOR THE BULK-POWER SYSTEM
Sec. 40.1 Applicability. 40.2 Mandatory Reliability Standards. 40.3 Availability of Reliability Standards.
Authority: 16 U.S.C. 824o.
Sec. 40.1 Applicability.
(a) This part applies to all users, owners and operators of the Bulk-Power System within the United States (other than Alaska or Hawaii), including, but not limited to, entities described in section 201(f) of the Federal Power Act.
(b) Each Reliability Standard made effective by Sec. 40.2 must identify the subset of users, owners and operators of the Bulk-Power System to which a particular Reliability Standard applies.
Sec. 40.2 Mandatory Reliability Standards.
(a) Each applicable user, owner or operator of the Bulk-Power System must comply with Commission-approved Reliability Standards developed by the Electric Reliability Organization.
(b) A proposed modification to a Reliability Standard proposed to become effective pursuant to Sec. 39.5 of this Chapter will not be effective until approved by the Commission.
Sec. 40.3 Availability of Reliability Standards.
The Electric Reliability Organization must post on its Web site the currently effective Reliability Standards as approved and enforceable by the Commission. The effective date of the Reliability Standards must be included in the posting.
Note: The following appendices will not be published in the Code of Federal Regulations.
Appendix A.--Disposition of Reliability Standards, Glossary and Regional Differences
Reliability standard
Title
Proposed disposition
BAL-001-0............................. Real Power Balancing Control Performance Approve. BAL-002-0............................. Disturbance Control Performance......... Approve; direct modification. BAL-003-0............................. Frequency Response and Bias............. Approve; direct modification. BAL-004-0............................. Time Error Correction................... Approve; direct modification. BAL-005-0............................. Automatic Generation Control............ Approve; direct modification. BAL-006-1............................. Inadvertent Interchange................. Approve; direct modification. CIP-001-1............................. Sabotage Reporting...................... Approve; direct modification. COM-001-1............................. Telecommunications...................... Approve; direct modification. COM-002-2............................. Communications and Coordination......... Approve; direct modification. EOP-001-0............................. Emergency Operations Planning........... Approve; direct modification. EOP-002-2............................. Capacity and Energy Emergencies......... Approve; direct modification. EOP-003-1............................. Load Shedding Plans..................... Approve; direct modification. EOP-004-1............................. Disturbance Reporting................... Approve; direct modification. EOP-005-1............................. System Restoration Plans................ Approve; direct modification. EOP-006-1............................. Reliability Coordination--System
Approve; direct modification. Restoration. EOP-007-0............................. Establish, Maintain, and Document a Pending. Regional Blackstart Capability Plan. EOP-008-0............................. Plans for Loss of Control Center
Approve; direct modification. Functionality. EOP-009-0............................. Documentation of Blackstart Generating Approve. Unit Test Results. FAC-001-0............................. Facility Connection Requirements........ Approve. FAC-002-0............................. Coordination of Plans for New Facilities Approve; direct modification. FAC-003-1............................. Transmission Vegetation Management
Approve; direct modification. Program. FAC-004-0............................. Methodologies for Determining Electrical Withdrawn. Facility Ratings. FAC-005-0............................. Electrical Facility Ratings for System Withdrawn. Modeling. FAC-008-1............................. Facility Ratings Methodology............ Approve; direct modification. FAC-009-1............................. Establish and Communicate Facility
Approve. Ratings. FAC-012-1............................. Transfer Capabilities Methodology....... Pending.
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FAC-013-1............................. Establish and Communicate Transfer
Approve; direct modification. Capabilities. INT-001-2............................. Interchange Transaction Tagging......... Approve; direct modification. INT-002-0............................. Interchange Transaction Tag
Withdrawn. Communication and Assessment. INT-003-2............................. Interchange Transaction Implementation.. Approve. INT-004-1............................. Interchange Transaction Modifications... Approve. INT-005-1............................. Interchange Authority Distributes
Approve. Arranged Interchange. INT-006-1............................. Response to Interchange Authority....... Approve; direct modification. INT-007-1............................. Interchange Confirmation................ Approve. INT-008-1............................. Interchange Authority Distributes Status Approve. INT-009-1............................. Implementation of Interchange........... Approve. INT-010-1............................. Interchange Coordination Exceptions..... Approve. IRO-001-1............................. Reliability Coordination--
Approve; direct modification. Responsibilities and Authorities. IRO-002-1............................. Reliability Coordination--Facilities.... Approve; direct modification. IRO-003-2............................. Reliability Coordination--Wide Area View Approve; direct modification. IRO-004-1............................. Reliability Coordination--Operations Approve; direct modification. Planning. IRO-005-1............................. Reliability Coordination--Current Day Approve; direct modification. Operations. IRO-006-3............................. Reliability Coordination--Transmission Approve; direct modification. Loading Relief. IRO-014-1............................. Procedures, Processes, or Plans to
Approve. Support Coordination Between Reliability Coordinators. IRO-015-1............................. Notifications and Information Exchange Approve. Between Reliability Coordinators. IRO-016-1............................. Coordination of Real-time Activities Approve. Between Reliability Coordinators. MOD-001-0............................. Documentation of TTC and ATC Calculation Pending; direct modification. Methodologies. MOD-002-0............................. Review of TTC and ATC Calculations and Pending. Results. MOD-003-0............................. Procedure for Input on TTC and ATC
Pending. Methodologies and Values. MOD-004-0............................. Documentation of Regional CBM
Pending; direct modification. Methodologies. MOD-005-0............................. Procedure for Verifying CBM Values...... Pending. MOD-006-0............................. Procedures for Use of CBM Values........ Approve; direct modification. MOD-007-0............................. Documentation of the Use of CBM......... Approve; direct modification. MOD-008-0............................. Documentation and Content of Each
Pending; direct modification. Regional TRM Methodology. MOD-009-0............................. Procedure for Verifying TRM Values...... Pending. MOD-010-0............................. Steady-State Data for Transmission
Approve; direct modification. System Modeling and Simulation. MOD-011-0............................. Regional Steady-State Data Requirements Pending; direct modification. and Reporting Procedures. MOD-012-0............................. Dynamics Data for Transmission System Approve; direct modification. Modeling and Simulation. MOD-013-1............................. RRO Dynamics Data Requirements and
Pending; direct modification. Reporting Procedures. MOD-014-0............................. Development of Interconnection-Specific Pending; direct modification. Steady State System Models. MOD-015-0............................. Development of Interconnection-Specific Pending; direct modification. Dynamics System Models. MOD-016-1............................. Actual and Forecast Demands, Net Energy Approve; direct modification. for Load, Controllable DSM. MOD-017-0............................. Aggregated Actual and Forecast Demands Approve; direct modification. and Net Energy for Load. MOD-018-0............................. Reports of Actual and Forecast Demand Approve. Data. MOD-019-0............................. Forecasts of Interruptible Demands and Approve; direct modification. DCLM Data. MOD-020-0............................. Providing Interruptible Demands and DCLM Approve; direct modification. Data. MOD-021-0............................. Accounting Methodology for Effects of Approve; direct modification. Controllable DSM in Forecasts. MOD-024-1............................. Verification of Generator Gross and Net Pending. Real Power Capability. MOD-025-1............................. Verification of Generator Gross and Net Pending; direct modification. Reactive Power Capability. PER-001-0............................. Operating Personnel Responsibility and Approve. Authority. PER-002-0............................. Operating Personnel Training............ Approve; direct modification. PER-003-0............................. Operating Personnel Credentials......... Approve; direct modification. PER-004-1............................. Reliability Coordination--Staffing...... Approve; direct modification. PRC-001-1............................. System Protection Coordination.......... Approve; direct modification. PRC-002-1............................. Define and Document Disturbance
Pending. Monitoring Equipment Requirements. PRC-003-1............................. Regional Requirements for Analysis of Pending. Misoperations of Transmission and Generation Protection Systems. PRC-004-1............................. Analysis and Mitigation of Transmission Approve. and Generation Protection System Misoperations. PRC-005-1............................. Transmission and Generation Protection Approve; direct modification. System Maintenance and Testing. PRC-006-0............................. Development and Documentation of
Pending. Regional UFLS Programs. PRC-007-0............................. Assuring Consistency with Regional UFLS Approve. Program. PRC-008-0............................. Underfrequency Load Shedding Equipment Approve; direct modification. Maintenance Programs. PRC-009-0............................. UFLS Performance Following an
Approve. Underfrequency Event. PRC-010-0............................. Assessment of the Design and
Approve; direct modification. Effectiveness of UVLS Program. PRC-011-0............................. UVLS System Maintenance and Testing..... Approve; direct modification. PRC-012-0............................. Special Protection System Review
Pending. Procedure. PRC-013-0............................. Special Protection System Database...... Pending. PRC-014-0............................. Special Protection System Assessment.... Pending. PRC-015-0............................. Special Protection System Data and
Approve. Documentation. PRC-016-0............................. Special Protection System Misoperations. Approve. PRC-017-0............................. Special Protection System Maintenance Approve; direct modification. and Testing.
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PRC-018-1............................. Disturbance Monitoring Equipment
Approve. Installation and Data Reporting. PRC-020-1............................. Undervoltage Load Shedding Program
Pending. Database. PRC-021-1............................. Undervoltage Load Shedding Program Data. Approve. PRC-022-1............................. Undervoltage Load Shedding Program
Approve. Performance. TOP-001-1............................. Reliability Responsibilities and
Approve; direct modification. Authorities. TOP-002-2............................. Normal Operations Planning.............. Approve; direct modification. TOP-003-0............................. Planned Outage Coordination............. Approve; direct modification. TOP-004-1............................. Transmission Operations................. Approve; direct modification. TOP-005-1............................. Operational Reliability Information..... Approve; direct modification. TOP-006-1............................. Monitoring System Conditions............ Approve; direct modification. TOP-007-0............................. Reporting SOL and IROL Violations....... Approve. TOP-008-1............................. Response to Transmission Limit
Approve. Violations. TPL-001-0............................. System Performance Under Normal
Approve; direct modification. Conditions. TPL-002-0............................. System Performance Following Loss of a Approve; direct modification. Single BES Element. TPL-003-0............................. System Performance Following Loss of Two Approve; direct modification. or More BES Elements. TPL-004-0............................. System Performance Following Extreme BES Approve; direct modification. Events. TPL-005-0............................. Regional and Interregional Self-
Pending. Assessment Reliability Reports. TPL-006-0............................. Assessment Data from Regional
Pending. Reliability Organizations. VAR-001-1............................. Voltage and Reactive Control............ Approve; direct modification. VAR-002-1............................. Generator Operations for Maintaining Approve. Network Voltage Schedules. Glossary.............................. Glossary of Terms Used in Reliability Approve; direct modification. Standards. Regional Difference................... BAL-001:ERCOT:CPS2...................... Approve; direct modification. Regional Difference................... BAL-006: MISO RTO inadvertent
Approve. Interchange Accounting. Regional Difference................... BAL-006: MISO/SPP Financial Inadvertent Approve. Settlement. Regional Difference................... INT-001/4: WECC Tagging Dynamic
Pending. Schedules and Inadvertent Payback. Regional Difference................... INT-001/3:MISO Energy Flow Information.. Approve. Regional Difference................... INT-003: MISO/SPP Scheduling Agent...... Approve. Regional Difference................... INT-003: MISO Enhanced Scheduling Agent. Approve. Regional Difference................... IRO-006: PJM/MISO/SPP Enhanced
Pending. Congestion Management.
Appendix B.--Commenters on Notice of Proposed Rulemaking
Abbreviation
Entity
Alberta ESO....................... Alberta Electric System Operator. ALCOA............................. Alcoa, Inc. and Alcoa Power Generating Company. Allegheny......................... Allegheny Power and Allegheny Energy Supply Company, LLC. AMP Ohio.......................... American Municipal Power--Ohio, Inc. APPA.............................. American Public Power Association. APPA/NRECA........................ APPA/NRECA. ATC............................... American Transmission Company, LLC. Avista/Puget...................... Avista Corporation and Puget Sound Energy, Inc. BPA............................... Bonneville Power Administration. CAISO............................. California Independent System Operator Corporation. California Cogernation............ Cogeneration Association of California and the Energy Producers and Users Coalition. California PUC.................... Public Utilities Commission of the State of California. CEA............................... Canadian Electricity Association. Cleveland Public Power............ City of Cleveland, Division of Cleveland Public Power. Comverge.......................... Comverge, Inc. Connecticut Attorney General*..... Richard Blumenthal, Attorney General for the State of Connecticut. Connecticut DPUC*................. Connecticut Department of Public Utility Control. Constellation..................... Constellation Energy Group. Dominion.......................... Dominion Resources Services, Inc. Duke.............................. Duke Energy Corporation. Dynegy............................ Dynegy, Inc. EEI............................... Edison Electric Institute. ELCON............................. Electricity Consumers Resource Council. Entergy........................... Entergy Services, Inc. EPSA.............................. Electric Power Supply Association. ERCOT............................. Electric Reliability Council of Texas, Inc. Fertilizer Institute.............. Fertilizer Institute. FirstEnergy....................... FirstEnergy Service Company. Georgia Cities.................... City of Acworth. City of Adel. City of Blakely. City of Cairo. City of Calhoun. City of Camilla. City of College Park.
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City of Commerce. City of Doerun. City of Douglas. City of East Point. City of Ellaville. City of Fairburn. City of Forsyth. City of Fort Valley. City of Grantville. City of Hogansville. City of Lafayette. City of Lagrange. City of Lawrenceville. City of Mansfield. City of Monticello. City of Moultrie. City of Norcross. City of Oxford. City of Palmetto. City of Quitman. City of Sanderville. City of Sylvester. City of Thomaston. City of Thomasville. City of Washington. City of West Point. Crisp County Power Commission. City of Whigham. Fitzgerald Water, Light and Bond Commission. Marietta Power and Water. Georgia Operators................. Georgia System Operators Corp. International Transmission........ International Transmission Company. ISO/RTO Council................... ISO/RTO Council. ISO-NE............................ ISO New England, Inc. KCP&L............................. Kansas City Power and Light Company. LPPC.............................. Large Public Power Council. Manitoba.......................... Manitoba Hydro. Marshall Municipal Utility Group Massachusetts Department of Massachusetts DTE.
Telecommunications and Energy. MEAG Power........................ MEAG Power. MidAmerican....................... MidAmerican Electric Operating Companies. Mid-Continent..................... Mid-Continent Systems Group. MISO-PJM.......................... Midwest Independent Transmission System Operator, Inc. and PJM Interconnection, L.L.C. MRO............................... Midwest Reliability Organization. NARUC............................. National Association of Regulatory Utility Commissioners. National Grid..................... National Grid USA. NCPA.............................. Northern California Power Agency. NERC.............................. North American Electric Reliability Corp. New England Conference of Public New England Conference of Public Utilities Commissioners*.
Utilities Commissioners, Inc. New York Commission............... New York State Public Service Commission. New York Public Power............. New York Association of Public Power. New York TOs...................... New York Transmission Owners. Nevada Companies.................. Nevada Power Company and Sierra Pacific Power Company. Northeast Utilities............... Northeast Utilities Service Company. Northern Indiana.................. Northern Indiana Public Service Company. Northwest Requirements Utilities.. Northwest Requirements Utilities. NPCC.............................. Northeast Power Coordinating Council: Cross-Border Regional Entity, Inc. NRC............................... United States Nuclear Regulatory Commission. NRECA............................. National Rural Electric Cooperative Association. NYSRC............................. New York State Reliability Council, LLC. NY Major Consumers................ Multiple Intervenors, an unincorporated association of approximately 55 large industrial, commercial and institutional end- use energy consumers with facilities in New York. Ontario IESO...................... Ontario Independent Electricity System Operator. Otter Tail........................ Otter Tail Power Company. PG&E.............................. Pacific Gas and Electric Company. Portland General.................. Portland General Electric Company. Process Electricity Committee..... Process Gas Consumers Group Electricity Committee. Progress Energy................... Progress Energy, Inc. ReliabilityFirst.................. ReliabilityFirst Corporation. Reliant........................... Reliant Energy, Inc.
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Santa Clara....................... City of Santa Clara, California. SDG&E............................. San Diego Gas and Electric Company. SERC.............................. SERC Reliability Corporation. Six Cities........................ Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California. SMA............................... Steel Manufacturers Association. Small Entities Forum.............. ReliabilityFirst Corporation Small Entities Forum. SoCal Edison...................... Southern California Edison Company. South Carolina E&G................ South Carolina Electric and Gas Company. Southern.......................... Southern Company Services, Inc. Southwest TDUs.................... Southwest Transmission Dependent Utility Group. STI Capital....................... STI Capital Company. Tacoma............................ Tacoma Power. TANC.............................. Transmission Agency of Northern California. TAPS.............................. Transmission Access Policy Study Group. TVA............................... Tennessee Valley Authority. Utah Municipal Power.............. Utah Associated Municipal Power Systems. Valley Group...................... The Valley Group, Inc. WECC.............................. Western Electricity Coordinating Council. WIRAB advice...................... Western Interconnection Regional Advisory Body. Wisconsin Electric................ Wisconsin Electric Power Company. Xcel.............................. Xcel Energy Services.
*Comments filed out-of-time.
Appendix C: Abbreviations in This Document
ACE..................................... Area Control Error. AGC..................................... Automatic Generation Control. ANSI.................................... American National Standards Institute. ATC..................................... Available Transfer Capability. BCP..................................... Blackstart Capability Plan. CBM..................................... Capacity Benefit Margin. CPS..................................... Control Performance Standard. DC...................................... Direct Current. DCS..................................... Disturbance Control Standard. DSM..................................... Demand-Side Management. ERO..................................... Electric Reliability Organization. GWh..................................... Gigawatt hour. IEEE.................................... Institute of Electrical and Electronics Engineers. IROL.................................... Interconnection Reliability Operating Limits. LSE..................................... Load-serving Entity. MVAR.................................... Mega Volt Ampere Reactive. MW...................................... Mega Watt. ROW..................................... Right of Way. SOL..................................... System Operating Limit. SPS..................................... Special Protection System. TIS..................................... Transmission Issues Subcommittee. TLR..................................... Transmission Loading Relief. TRM..................................... Transmission Reliability Margin. TTC..................................... Total Transfer Capability. UFLS.................................... Underfrequency Load Shedding. UVLS.................................... Undervoltage Load Shedding.
[FR Doc. E7-5284 Filed 4-3-07; 8:45 am]
BILLING CODE 6717-01-P
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