Federal Energy Regulatory Commission, Department of Energy.
Notice of proposed rulemaking.
The Federal Energy Regulatory Commission (Commission) proposes to approve the retirement of 74 Reliability Standard requirements. The North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization, submitted the proposed retirements for Commission approval. The Commission also proposes to remand one requirement submitted for retirement by NERC and seeks additional information from NERC on two requirements submitted for retirement.
Comments are due April 6, 2020.
Comments, identified by docket number, may be filed in the following ways:
• Electronic Filing through
•
Andres Lopez (Technical Information), Office of Electric Reliability, Division of Reliability Standards and Security, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, Telephone: (202) 502-6128. Mark Bennett (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, Telephone: (202) 502-8524.
1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA),
2. The Commission believes that the proposed retirements will further the efficiency of the Reliability Standards program by reducing duplicative or otherwise unnecessary regulatory burden. Further, we agree with NERC that the retirement of the Reliability Standard provisions will benefit overall reliability by allowing registered entities to focus their resources on complying with those Reliability Standard requirements that more effectively promote the reliable operation and planning of the nation's bulk-power system.
3. With respect to other requirements that NERC seeks to retire, the Commission seeks more information regarding NERC's justification for retiring Reliability Standard FAC-008-3, Requirements R7 and R8. As discussed below, NERC's petition avers that the two requirements are redundant of other Reliability Standards, but NERC does not explain how certain elements of these requirements are redundant. The Commission's final determination on the retirement of these two requirements will be based on the comments received from NERC and others.
4. In addition, pursuant to section 215(d)(4) of the FPA, the Commission proposes to remand Reliability Standard VAR-001-6.
5. Section 215 of the FPA requires the Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. Once approved, the Reliability Standards may be enforced in the United States by the ERO subject to Commission oversight, or by the Commission independently.
6. In the March 2012 Order, the Commission observed that NERC's compliance program could be made more efficient by removing existing requirements deemed unnecessary for reliability.
7. In response, in February 2013, NERC proposed to retire 34 requirements within 19 Reliability Standards based on the justification that the requirements “are redundant or otherwise unnecessary” and that “violations of these requirements . . . pose a lesser risk to the reliability of the Bulk-Power System.”
8. On November 21, 2013, the Commission approved the retirements that NERC proposed, and determined that the retirements “meet the benchmarks” set forth in the March 2012 Order that “requirements proposed for retirement either: (1) Provide little protection for Bulk-Power System reliability; or (2) are redundant with other aspects of the Reliability Standards.”
9. NERC states that the proposed retirements are the product of its Standards Efficiency Review (SER) Project. NERC explains that the SER Project began in 2017 “to achieve [NERC's] long-term strategic goal of establishing risk-based controls to minimize [Bulk-Power System] reliability risk while also driving operational efficiencies and effectiveness.”
10. NERC contends that the SER Project “was conducted in an open and transparent manner, with broad industry participation.”
11. On June 7, 2019, in Docket No. RM19-16-000, NERC submitted for Commission approval new versions of three Reliability Standards: IRO-002-7 (Reliability Coordination—Monitoring and Analysis), TOP-001-5 (Transmission Operations), and VAR-001-6 (Voltage and Reactive Control). NERC explains that approval of the new versions would result in the retirement of four requirements from the currently-effective versions of the Reliability Standards.
12. In particular, NERC maintains that the data exchange capability requirement in Reliability Standard IRO-002-5, Requirement R1 is covered by Reliability Standard IRO-008-2, Requirement R1, which obligates the reliability coordinator to perform operational planning analyses to assess whether the planned operations for the next-day will exceed System Operating Limits and Interconnection Reliability Operating Limits within its Wide Area. NERC asserts that “to perform the required operational planning analyses, the Reliability Coordinator must have the data it deems necessary from those entities that possess it.”
13. Additionally, regarding data exchange, NERC cites Reliability Standard IRO-010-2 (Reliability Coordinator Data Specification and
14. NERC observes that the performance of the requirements it cites is premised on the existence of data exchange capabilities, “regardless of whether a separate requirement expressly requires the Reliability Coordinator to have data exchange capabilities in place.”
15. NERC likewise states that Requirements R19 and R22 of Reliability Standard TOP-001-4 merely require transmission operators and balancing authorities respectively to have data exchange capabilities with entities from which they need data to perform operational planning analyses (transmission operators) and next-day Operating Plans (balancing authorities). NERC maintains, however, that Reliability Standard TOP-002-4 Requirement R1, requires a transmission operator to perform an operational planning analyses to determine whether next-day operations within its area will exceed System Operating Limits. Also, NERC states that Requirement R4 requires each balancing authority to have a next-day Operating Plan addressing expected generation resource commitment and dispatch, Interchange scheduling and related matters. NERC asserts that to satisfy these requirements, “each Transmission Operator and Balancing Authority must have the data it deems necessary from those entities that possess it.”
16. NERC also cites to Reliability Standard TOP-003-3 (Operational Reliability Data) whose purpose is “to ensure that the Transmission Operator and Balancing Authority have data needed to fulfill their operational and planning responsibilities.” NERC contends that the requirements in Reliability Standard TOP-003-3 largely mirror the requirements in Reliability Standard IRO-010-2 discussed above, and thus, as with Reliability Standard IRO-010-2, transmission operators and balancing authorities must have data exchange capabilities with its reporting entities to satisfy the requirements of Reliability TOP-003-3. Therefore, NERC contends that Reliability Standards TOP-001-4, Requirements R19 and R22 are unnecessary and redundant and should be retired.
17. With respect to proposed Reliability Standard VAR-001-6, NERC maintains that the revised version retires existing requirement R2, which requires each transmission operator to schedule “sufficient reactive resources to regulate voltage levels under normal and Contingency conditions.” NERC contends that the reliability need for sufficient reactive resources is adequately addressed by existing requirements in several other Reliability Standards and, therefore, is unnecessary. In particular, NERC states that Reliability Standards TOP-001-4, Requirement R10 and TOP-002-4, Requirement R1, require transmission operators to determine System Operating Limits and perform an operational planning analyses to assess whether planned next-day operations will exceed those limits and plan for addressing them. NERC explains that Reliability Standard TOP-001-4 requires each transmission operator to perform Real-time Assessments every 30 minutes to identify possible System Operating Limit exceedances and initiate its Operating Plan to mitigate them. NERC states that “Operating Plans address the use of reactive resources if needed to operate within System Operating Limits, as well as any other adjustments that may be needed.”
18. NERC observes that each transmission operator uses multiple tools to regulate voltage levels, including reactive control and Real-time Contingency Analysis, that “allow the Transmission Operator to quantify the use of reactive resources. As such, a separate requirement specifying that the Transmission Operator must schedule `sufficient' reactive resources for normal and Contingency conditions is redundant and unnecessary for reliability.”
19. NERC requests that the Commission approve the implementation plan, attached to NERC's petition as Exhibit B, and the associated violation risk factors and violation severity levels described in Exhibit D. The implementation plan provides that proposed Reliability Standards IRO-002-7, TOP-001-5, and VAR-001-6 would become effective on the first day of the first calendar quarter that is three months after regulatory approval. The currently-effective versions of the Reliability Standards would be retired immediately prior to the effective date of the revised Reliability Standards. NERC explains that the requested timeline accounts for the time entities will need to update their systems and related documentation.
20. On June 7, 2019, in Docket No. RM19-17-000, NERC submitted for Commission approval the proposed retirement of ten currently-effective Reliability Standards in their entirety without replacement.
21. NERC contends that the full FAC, INT, MOD and PRC Reliability Standards proposed for retirement are not necessary and that removing them would not adversely affect reliability.
22. Similarly, regarding the MOD Reliability Standards, NERC states that “[Available Transfer Capability] and [Available Flowgate Methodology], as well as e-Tags, are commercially-focused elements facilitating interchange and balancing of interchange,” and that system operators maintain reliability by monitoring Real-time flows based on System Operating Limits and Interconnection Reliability Operating Limits.
23. Regarding NERC's proposed revised Reliability Standards, NERC states that the data provision obligations of currently-effective Reliability Standard FAC-008-3, Requirements R7 and R8 are redundant with Reliability Standards MOD-032-1, IRO-010-2 and TOP-003-3. NERC asserts that Requirements R3.1, R4 and R5 of currently-effective Reliability Standard INT-006-4 “provide little, if any, benefit or protection to the reliability operation of the [Bulk-Power System]”
24. NERC requests that the Commission approve the implementation plan, attached to NERC's petition as Exhibit B, and the associated violation risk factors and violation severity levels, attached to NERC's petition as Exhibit D, which are generally unchanged from the currently-effective versions. For the Reliability Standards retired in their entirety, NERC proposes an effective date that is immediately upon regulatory approval of the retirement. NERC also seeks to retire the currently-effective Reliability Standards FAC-008-3, INT-006-4, INT-009-2.1, and PRC-004-5(i) immediately prior to the effective date of their new versions.
25. Pursuant to section 215(d)(2) of the FPA, the Commission proposes to approve NERC's request to retire 74 Reliability Standard requirements as just, reasonable, not unduly discriminatory or preferential, and in the public interest. NERC's petitions provide an adequate basis to conclude that the requirements proposed for retirement: (1) Provide little or no reliability benefit; (2) are administrative in nature or relate expressly to commercial or business practices; or (3) are redundant with other Reliability Standards. NERC's justifications for retiring the 74 requirements are largely consistent with the retirement standard set forth by the Commission in Order No. 788 and with the determination that “requirements proposed for retirement can be removed from the Reliability Standards with little effect on reliability and an increase in efficiency of the ERO compliance program.”
26. The proposal above does not include NERC's request to retire Reliability Standard FAC-008-3, Requirements R7 and R8 and Reliability Standard VAR-001-5, Requirement R2. While NERC asserts that Reliability Standards MOD-032-1, IRO-010-2 and TOP-003-3 provide a basis for retiring Reliability Standard FAC-008-3, Requirements R7 and R8, we seek additional information on these proposed retirements because this rationale does not address elements of Requirements R7 and R8 that do not appear to be redundant.
27. In addition, we disagree with NERC's assertion that Reliability Standard VAR-001-5, Requirement R2 is redundant or not necessary for reliability because we construe the requirement as essential to accomplish the purpose of the Reliability Standard. Accordingly, pursuant to section 215(d)(4) of the FPA, we propose to remand Reliability Standard VAR-001-6 in order to retain Requirement R2 in currently-effective Reliability Standard VAR-001-5.
28. Below, we discuss the following issues: (A) Proposed retirement of Reliability Standard FAC-008-3, Requirements R7 and R8; and (B) proposed retirement of Reliability Standard VAR-001-5, Requirement R2.
29. Reliability Standard FAC-008-3, Requirements R7 and R8 require generator owners and transmission owners, respectively, to provide facility ratings and related information to requesting reliability coordinators, planning coordinators, transmission planners, transmission owners and transmission operators. NERC asserts that requirements in Reliability Standards MOD-032-1, IRO-010-2, and TOP-003-3 render the data provision obligations of Requirements R7 and R8 in Reliability Standard FAC-008-3 redundant and therefore unnecessary for reliability.
30. To support its redundancy claim, NERC explains that under Reliability Standard MOD-032-1, generator owners and transmission owners must provide information on power capabilities and facility ratings (Requirement R2) to enable planning coordinators and transmission planners to “jointly develop steady-state, dynamics, and short circuit modeling data requirements and reporting procedures for the Planning Coordinator's planning area” (Requirement R1). NERC further explains that under Reliability Standard IRO-010-2, reliability coordinators must maintain “a documented specification for the data necessary to perform its Operational Planning Analyses, Real-time monitoring, and Real-time Assessments. This data necessarily includes Facility Ratings as inputs to System Operating Limit monitoring.”
31. We agree with NERC that the cited requirements in Reliability Standards MOD-032-1, IRO-010-2, and TOP-003-3 provide a basis for retiring certain elements of Reliability Standard FAC-008-3, Requirements R7 and R8. However, NERC's petition does not address other elements of Requirements R7 and R8 that do not appear to be redundant. In particular, Requirements R7 and R8 of the currently-effective Reliability Standard require generator owners and transmission owners, respectively, to provide facility ratings to several functional entity types, including transmission owners. While NERC is correct that the three Reliability Standards it cites collectively require generator owners and transmission owners to provide facility ratings to reliability coordinators, planning coordinators, transmission planners, and transmission operators, these three Reliability Standards do not require the provision of facility ratings to transmission owners. Therefore, it appears that, if approved, the retirement of Requirements R7 and R8 would eliminate the mandatory exchange of facility rating-related information with transmission owners. This could, in turn, impact reliability since these requirements ensure that all transmission owners have accurate facility-related information in the models that they use to plan and operate the bulk electric system.
32. Separately, Reliability Standards MOD-032-1, IRO-010-2, and TOP-003-3 do not address sub-requirement R8.1.2 of Reliability Standard FAC-008-3, relating to the identity of the next most limiting equipment of a requested facility. Further, these Reliability Standards also do not account for sub-requirement R8.2, which requires the identification and thermal rating of the existing next most limiting equipment of facilities with a thermal rating that limits the use of that facility by causing either an Interconnection Reliability Operating Limit, a limitation of Total Transfer Capability, an impediment to generator deliverability, or an impediment to service to a major load center as specified in FAC-008-3 (Requirement R8.2).
33. Considering the foregoing, while there is some overlap, Reliability Standard FAC-008-3, Requirements R7 and R8 do not appear to be entirely redundant of the other Reliability Standards cited by NERC. The retirement of these requirements would, therefore, result in the gaps described above. These non-redundant elements of Requirements R7 and R8 are not addressed in the petition. Accordingly, the Commission seeks more information from NERC and others regarding how the elements of Reliability Standards MOD-032-1, IRO-010-2 and TOP-003-3 discussed above render Reliability Standard FAC-008-3, Requirements R7 and R8 redundant. The Commission's final determination on the retirement of these two requirements will be based on the comments received from NERC and others.
34. Reliability Standard VAR-001-5, Requirement R2 requires each transmission operator to schedule “sufficient reactive resources to regulate voltage levels under normal and Contingency conditions.” NERC maintains that the reliability need for sufficient reactive resources is adequately addressed by existing requirements in several other Reliability Standards and, therefore, is unnecessary and should be retired.
35. In particular, NERC relies on Reliability Standard TOP-001-4, Requirement R10 and Reliability Standard TOP-002-4, Requirement R1, that require transmission operators to determine System Operating Limits and perform an OPA to assess whether planned next-day operations will exceed those limits and plan for addressing them. Reliability Standard TOP-001-4 requires each transmission operator to perform Real-time Assessments every 30 minutes to identify possible System Operating Limit exceedances and initiate its Operating Plan to mitigate them. NERC states that “Operating Plans address the use of reactive resources if needed to operate within System Operating Limits, as well as any other adjustments that may be needed.”
36. NERC explains that each transmission operator uses multiple tools to regulate voltage levels, including reactive control and Real-time Contingency Analysis. NERC maintains that “[t]hese actions allow the Transmission Operator to quantify the use of reactive resources. As such, a separate requirement specifying that the Transmission Operator must schedule `sufficient' reactive resources for normal and Contingency conditions is
37. NERC concludes that given this “comprehensive and interdependent framework addressing System voltage needs in the operations and planning horizons . . . there is no need to have a distinct requirement expressly requiring the Transmission Operator to `schedule' sufficient resources.”
38. NERC contends that Reliability Standards TOP-001-4 and TOP-002-4 require, among other things, transmission operators to perform an operational planning analyses and determine System Operating Limits to assess whether planned next-day operations will exceed those limits and develop a plan to address those potential exceedances. However, the proposed retirement of Reliability Standard VAR-001-5, Requirement R2 assumes that, even in the absence of a specific requirement, if the transmission operator identifies potential System Operating Limit exceedances based on this analysis, the transmission operator will develop and implement an Operating Plan to mitigate the potential exceedances. We determine that relying on such an assumption may negatively impact reliability given the significant role that scheduling adequate reactive resources plays in the overall operation of Reliability Standard VAR-001-5. We also determine that retiring Requirement R2 is contrary to the stated purpose of Reliability Standard VAR-001-5, which is to “ensure that voltage levels, reactive flows and reactive resources are monitored, controlled and maintained within limits in Real-time to protect equipment and the reliable operation of the Interconnection.” Accordingly, we propose to remand proposed Reliability Standard VAR-001-6 in order to retain Requirement R2 because it is the only requirement that explicitly requires transmission operators to schedule reactive resources.
39. While Reliability Standards TOP-001-4 and TOP-002-4 address situations involving the possible need to schedule reactive resources, they are not adequate substitutes for the explicit obligation in Requirement R2 of Reliability Standard VAR-001-5 requiring transmission operators to schedule enough reactive resources to regulate voltage levels under all system conditions. Reliability Standard TOP-001-4, Requirement R10 only requires the transmission operator to monitor facilities within its area (Requirement R10.1); to monitor the status of Remedial Action Schemes within its area (Requirement R10.2), to monitor non-bulk electric system facilities within its area (Requirement R10.3); to obtain and use status, voltages, and flow data for facilities outside its area (Requirement R10.4); to obtain and use the status of Remedial Action Schemes outside its area (Requirement R10.5); and to obtain and use status, voltages, and flow data for non-bulk electric system facilities outside its area (Requirement R10.6). Therefore, we determine that a plain reading of the relevant requirements cited by NERC in its petition indicates that the action of scheduling any type of resources is not required outside of Reliability Standard VAR-001-5, Requirement R2.
40. Additionally, Reliability Standards TOP-001-4 and TOP-002-4 do not require the transmission operator to implement mitigation plans: Instead, the transmission operator need only analyze and develop a plan to address a potential System Operating Limit.
41. Accordingly, we disagree with NERC's assertion that Reliability Standard VAR-001-5, Requirement R2 is duplicative of other existing Reliability Standard requirements, and we believe that eliminating Requirement R2 will create an unacceptable risk that voltage, reactive flows, and reactive resources will not be controlled and maintained within System Operating Limits. Therefore, pursuant to section 215(d)(4) of the FPA, we propose to remand proposed Reliability Standard VAR-001-6 in order to retain Requirement R2 of currently-effective Reliability Standard VAR-001-5.
42. The information collection requirements contained in this Proposed Rule are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995.
43. The Commission estimates that the proposed rule, which would retire 74 requirements of Reliability Standards without adding any new obligations on registered entities, would result in a total reduction in burden for industry of 151,340.2 hours. The Commission based the burden reduction estimates on staff experience, knowledge, and expertise.
44.
45.
46. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown, email:
47. Comments concerning the information collections and requirements proposed for retirement in this NOPR and the associated burden estimates, should be sent to the
48. The Regulatory Flexibility Act of 1980 (RFA)
49. The Commission seeks comment on the proposed reduction of burden and cost on small business entities. The Commission estimates the total industry reduction in burden for all entities (large and small) to be 151,340.2 hours (or approximately 33 hours (rounded) per response). The Commission believes that this proposal will reduce burden and cost for all affected entities.
50. Based on the information above, the Commission certifies that the proposed reductions will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required.
51. 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.
52. The Commission invites interested persons to submit comments on the matters and issues proposed in this document to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due April 6, 2020. Comments must refer to Docket Nos. RM19-16-000 and RM19-17-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments.
53. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's website at
54. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.
55. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.
56. In addition to publishing the full text of this document in the
57. From the Commission'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.
58. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
By direction of the Commission.