Western Electricity Coordinating Council Regional Reliability Standard Regarding Automatic Time Error Correction, 25422-25429 [E9-12351]
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Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations
environment.81 The Commission has
categorically excluded certain actions
from this requirement as not having a
significant effect on the human
environment. Included in the exclusion
are rules that are clarifying, corrective,
or procedural or that do not
substantially change the effect of the
regulations being amended.82 The
actions proposed herein fall within this
categorical exclusion in the
Commission’s regulations.
V. Regulatory Flexibility Act Analysis
67. The Regulatory Flexibility Act of
1980 (RFA) 83 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The RFA mandates
consideration of regulatory alternatives
that accomplish the stated objectives of
a proposed rule and that minimize any
significant economic impact on a
substantial number of small entities.
The Small Business Administration’s
Office of Size Standards develops the
numerical definition of a small
business.84 For electric utilities, a firm
is small if, including its affiliates, it is
primarily engaged in the transmission,
generation and/or distribution of
electric energy for sale and its total
electric output for the preceding twelve
months did not exceed four million
megawatt hours. The RFA is not
implicated by this Final Rule because
the interpretations discussed herein will
not have a significant economic impact
on a substantial number of small
entities.
68. In Order No. 693, the Commission
adopted policies to minimize the
burden on small entities, including
approving the ERO compliance registry
process to identify those entities
responsible for complying with
mandatory and enforceable Reliability
Standards. The ERO registers only those
distribution providers or load serving
entities 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 under-frequency load
shedding program or a required undervoltage load shedding program.
Similarly, for generators, the ERO
registers only 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
81 Regulations
Implementing the National
Environmental Policy Act, Order No. 486, FERC
Stats. & Regs. ¶ 30,783 (1987).
82 18 CFR 380.4(a)(2)(ii).
83 5 U.S.C. 601–12.
84 See 13 CFR 121.201.
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blackstart unit material to a restoration
plan, or any generator 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. The Commission
estimated that the Reliability Standards
approved in Order No. 693 would apply
to approximately 682 small entities
(excluding entities in Alaska and
Hawaii), but also pointed out that the
ERO’s Compliance Registry Criteria
allow for a joint action agency,
generation and transmission (G&T)
cooperative or similar organization to
accept compliance responsibility on
behalf of its members. Once these
organizations register with the ERO, the
number of small entities registered with
the ERO will diminish and, thus,
significantly reduce the impact on small
entities.85
69. Finally, as noted above, this Final
Rule addresses an interpretation of the
BAL–003–0 Reliability Standard, which
was already approved in Order No. 693,
and, therefore, does not create an
additional regulatory impact on small
entities.86
VI. Document Availability
70. 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 the
Commission’s Home Page (https://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE.,
Room 2A, Washington, DC 20426.
71. 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.
72. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours from
FERC Online Support at (202) 502–6652
(toll free at 1–866–208–3676) or e-mail
85 To be included in the compliance registry, the
ERO determines whether a specific small entity has
a material impact on the Bulk-Power System. If
these small entities should have such an impact
then their compliance is justifiable as necessary for
Bulk-Power System reliability.
86 The Commission remands the interpretation of
the VAR–001–1 Reliability Standard.
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at ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. E-mail the
Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional
Notification
73. These regulations are effective
June 29, 2009. The Commission has
determined, with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not 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, Electric utilities,
Reporting and recordkeeping
requirements.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E9–12348 Filed 5–27–09; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM08–12–000; Order No.723]
Western Electricity Coordinating
Council Regional Reliability Standard
Regarding Automatic Time Error
Correction
Issued May 21, 2009.
AGENCY: Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
SUMMARY: Pursuant to section 215 of the
Federal Power Act (FPA), the Federal
Energy Regulatory Commission
(Commission) approves regional
Reliability Standard BAL–004–WECC–
01 (Automatic Time Error Correction),
as submitted by the North American
Electric Reliability Corporation. As a
separate action, pursuant to section
215(d)(5) of the FPA, the Commission
directs the Western Electricity
Coordinating Council to develop several
modifications to the regional Reliability
Standard. The regional Reliability
Standard requires balancing authorities
within the Western Interconnection to
maintain interconnection frequency
within a predefined frequency profile
and ensure that time error corrections
are effectively conducted in a manner
that does not adversely affect the
reliability of the Interconnection.
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Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations
DATES: Effective Date: This rule will
become effective June 29, 2009.
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.
Katherine Waldbauer (Legal
Information), Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426. (202) 502–
8232. katherine.waldbauer@ferc.gov.
Nick Henery (Technical Information),
Office of Electric Reliability, Federal
25423
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–8636.
nick.henery@ferc.gov.
SUPPLEMENTARY INFORMATION:
Order No. 723
Table of Contents
Paragraph
Nos.
I. Background ............................................................................................................................................................................................
A. Mandatory Reliability Standards .................................................................................................................................................
B. Procedural Background ................................................................................................................................................................
C. Reliability Standard BAL–004–WECC–01 ...................................................................................................................................
II. Discussion ............................................................................................................................................................................................
A. Requirement R1.2 .........................................................................................................................................................................
B. Explanation of 24-Hour Exemption Period of Requirement R2 .................................................................................................
C. New Glossary Definitions .............................................................................................................................................................
D. Consistency With NERC Reliability Standards ...........................................................................................................................
E. Violation Risk Factors ..................................................................................................................................................................
F. Violation Severity Levels .............................................................................................................................................................
III. Information Collection Statement ......................................................................................................................................................
IV. Environmental Analysis .....................................................................................................................................................................
V. Regulatory Flexibility Act ...................................................................................................................................................................
VI. Document Availability .......................................................................................................................................................................
VII. Effective Date and Congressional Notification ................................................................................................................................
Before Commissioners: Jon
Wellinghoff, Chairman; Suedeen G.
Kelly, Marc Spitzer, and Philip D.
Moeller.
Order No. 723
Final Rule
Issued May 21, 2009
1. Pursuant to section 215 of the
Federal Power Act (FPA),1 the
Commission approves regional
Reliability Standard BAL–004–WECC–
01 (Automatic Time Error Correction),
submitted to the Commission for
approval by the North American Electric
Reliability Corporation (NERC). As a
separate action, pursuant to section
215(d)(5) of the FPA, the Commission
directs the Western Electricity
Coordinating Council (WECC) to
develop several modifications to the
regional Reliability Standard. The
regional Reliability Standard requires
balancing authorities within the WECC
region to implement an automatic time
error correction procedure for the
purpose of maintaining Interconnection
frequency within a predefined
frequency profile and ensuring that time
error corrections are effectively
conducted in a manner that does not
adversely affect reliability.2
1 16
U.S.C. 824o (2006).
proposed regional Reliability Standard will
be in effect within the Western Interconnectionwide WECC Regional Entity. In this proceeding, the
Commission proposes to take action to make
mandatory the regional Reliability Standard as it
applies within the U.S. portion of the Western
Interconnection.
2 The
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2. The Reliability Standard benefits
the reliable operation of the Bulk-Power
System by creating an operating
environment that encourages system
operators to balance their generation
and interchange with their load and
losses, thereby minimizing the
difference between the net actual and
net scheduled interchanges. This
process will result in reducing the
number of manual time error corrections
required by the Western Interconnection
Time Monitor, and minimize
accumulated inadvertent interchange
energy between Western
Interconnection balancing authorities.3
The Commission also accepts three
related definitions that are included in
the regional Reliability Standard. The
Commission further approves the
violation risk factors for the regional
Reliability Standard, and directs the
Electric Reliability Organization (ERO)
and WECC to submit revised violation
risk factors in a filing within 60 days of
the effective date of this Final Rule. The
Commission also directs the ERO and
WECC to submit violation severity
levels for each Requirement and subRequirement that has been assigned a
violation risk factor within 120 days of
the effective date of this Final Rule.
3. As discussed below, the
Commission finds that the regional
Reliability Standard proposed by WECC
satisfies the statutory criteria, and is
3 Mismatches between generation and interchange
and load and losses result in the Balancing Area
operating at frequencies other than 60 Hertz, which
causes both time error and inadvertent interchange.
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4.
4.
11.
14.
22.
27.
31.
35.
41.
49.
52.
55.
60.
61.
64.
67.
more stringent than the applicable
continent-wide NERC Reliability
Standard.
I. Background
A. Mandatory Reliability Standards
4. Section 215 of the FPA 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 by the
Commission independently.4
5. In February 2006, the Commission
issued Order No. 672,5 implementing
section 215 of the FPA. Pursuant to
Order No. 672, the Commission certified
one organization, NERC, as the ERO.6
Reliability Standards that the ERO
proposes to the Commission may
include Reliability Standards that are
proposed to the ERO by a Regional
Entity.7 When the ERO reviews a
regional Reliability Standard that would
be applicable on an Interconnectionwide basis and that has been proposed
by a Regional Entity organized on an
Interconnection-wide basis, the ERO
4 See
FPA 215(e)(3), 16 U.S.C. 824o(e)(3).
Concerning Certification of the Electric
Reliability Organization; and Procedures for the
Establishment, Approval, and Enforcement of
Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ¶ 31,204 (2006), order on reh’g, Order
No. 672–A, FERC Stats. & Regs. ¶ 31,212 (2006).
6 See North American Electric Reliability Corp.,
116 FERC ¶ 61,062, order on reh’g and compliance,
117 FERC ¶ 61,126 (2006).
7 16 U.S.C. 824o(e)(4).
5 Rules
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Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations
must rebuttably presume that the
regional Reliability Standard is just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest.8
6. In reviewing the ERO’s submission,
the Commission will give due weight to
the ERO’s technical expertise, except
concerning the effect of a proposed
Reliability Standard on competition.9
The Commission will also give due
weight to the technical expertise of a
Regional Entity organized on an
Interconnection-wide basis with respect
to a proposed Reliability Standard to be
applicable within that
Interconnection.10
7. The Commission may approve a
proposed Reliability Standard if the
Commission finds it is just, reasonable,
not unduly discriminatory or
preferential, and in the public interest.11
In addition, the Commission explained
in Order No. 672 that ‘‘uniformity of
Reliability Standards should be the goal
and the practice, the rule rather than the
exception.’’ 12 Yet, the Commission
recognized that ‘‘the goal of greater
uniformity does not, however, mean
that regional differences cannot
exist.’’ 13 The Commission then
provided the following guidance:
As a general matter, we will accept the
following two types of regional differences,
provided they are otherwise just, reasonable,
not unduly discriminatory or preferential,
and in the public interest, as required by the
statute: (1) A regional difference that is more
stringent than the continent-wide Reliability
Standard, including a regional difference that
addresses matters that the continent-wide
Reliability Standard does not; and (2) a
regional Reliability Standard that is
necessitated by a physical difference in the
Bulk-Power System.14
8. On March 16, 2007, the
Commission issued Order No. 693,
approving 83 of the 107 Reliability
Standards originally proposed by
NERC.15 In addition, pursuant to section
215(d)(5) of the FPA, the Commission
directed NERC to develop modifications
to 56 of the 83 approved Reliability
Standards.16 Relevant to the immediate
8 16
U.S.C. 824o(d)(3); 18 CFR 39.5(b).
U.S.C. 824o(d)(2).
10 Id.
11 Id.
12 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 290.
13 Id. P 291.
14 Id.
15 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs.
¶ 31,242, order on reh’g, Order No. 693–A, 120
FERC ¶ 61,053 (2007).
16 16 U.S.C. 824o(d)(5). Section 215(d)(5)
provides, ‘‘The Commission * * * may order the
Electric Reliability Organization to submit to the
Commission a proposed reliability standard or a
9 16
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proceeding, the Commission approved
continent-wide Reliability Standard
BAL–004–0 (Time Error Correction), but
noted that WECC’s regional approach
appears to serve as a more effective
means of accomplishing time error
corrections.17
9. On April 19, 2007, the Commission
approved delegation agreements
between NERC and each of the eight
Regional Entities, including WECC.18
Pursuant to such agreements, the ERO
delegated responsibility to the Regional
Entities to enforce the mandatory,
Commission-approved Reliability
Standards. In addition, the Commission
approved, as part of each delegation
agreement, a Regional Entity process for
developing regional Reliability
Standards. In the Delegation Agreement
Order, the Commission accepted WECC
as a Regional Entity organized on an
Interconnection-wide basis and
accepted WECC’s Standards
Development Manual, which sets forth
the process for development of WECC’s
Reliability Standards.19
10. In a June 2007 order, the
Commission approved eight regional
Reliability Standards that apply in the
WECC region.20
B. Procedural Background
11. On July 29, 2008, NERC submitted
for Commission approval, in accordance
with section 215(d)(1) of the FPA,21
regional Reliability Standard BAL–004–
WECC–01, which would apply to
balancing authorities within the
Western Interconnection. NERC stated
that the primary purpose of the regional
Reliability Standard is to reduce the
number of time error corrections
imposed on the Western
Interconnection by requiring balancing
authorities that operate synchronously
in the Western Interconnection to
automatically correct for their
contribution to time error. According to
NERC, BAL–004–WECC–01 provides
the added benefit of a superior approach
over the current NERC manual time
error correction (BAL–004–0) for
assigning costs and providing for the
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 this section.’’
17 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at
P 377, 382. The Commission also directed NERC to
develop a modification to BAL–004–0 to include
Levels of Non-Compliance and additional Measures
for Requirement R3.
18 See North American Electric Reliability Corp.,
119 FERC ¶ 61,060, order on reh’g, 120 FERC
¶ 61,260 (2007) (Delegation Agreement Order).
19 Id. P 469–470.
20 North American Electric Reliability Corp., 119
FERC ¶ 61,260 (2007).
21 16 U.S.C. 824o(d)(1) (2006).
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equitable payback of inadvertent
interchange.22
12. On November 20, 2008, the
Commission issued a Notice of
Proposed Rulemaking (NOPR) that
proposed to approve BAL–004–WECC–
01.23 In response, four interested
persons filed comments: NERC, WECC,
Consumers Energy Company
(Consumers) and Xcel Energy Services
Inc (Xcel).
13. In its July 2008 filing, NERC stated
that Automatic Time Error Correction or
ATEC has been a regional reliability
practice in WECC, effectively reducing
manual time error corrections, reducing
the number of hours of manual time
error correction for the Western
Interconnection, and reducing the
accumulated inadvertent interchange in
the Western Interconnection since 2003.
NERC asserted that the proposed WECC
regional Reliability Standard is more
stringent or covers matters not
addressed by NERC’s continent-wide
Reliability Standards, BAL–004–0 and
BAL–006–1 (Inadvertent Interchange).
C. Reliability Standard BAL–004–
WECC–01
14. Regional Reliability Standard
BAL–004–WECC–01 contains four
requirements, summarized as follows:
15. Requirement R1. Requires that all
balancing authorities must continuously
participate in Automatic Time Error
Correction through their automatic
generation control systems. The subrequirement (R1.1) limits the payback
amount to minimize any operating
metric violations, while R1.2 addresses
actions for cases when invalidated
implementation of the ATEC
22 The NERC glossary defines ‘‘interchange’’ as
the energy transfers that cross balancing authority
boundaries, and defines ‘‘inadvertent interchange’’
as the difference between the balancing authority’s
net actual interchange and its net scheduled
interchange. Within a synchronous Interconnection,
during real-time operations, a balancing authority
may engage in ‘‘inadvertent interchange’’ if it
experiences an operational problem that prevents
its net actual interchange of energy from matching
its net scheduled interchange with other balancing
authorities within the Interconnection. This
discrepancy will indicate what is referred to as a
‘‘time error’’—i.e., because the Interconnection will
operate at a frequency (number of cycles per
second) that is different from the Interconnection’s
scheduled frequency of 60 Hz (60 cycles per
second). Time error also serves as a means to
measure of how much and which balancing
authority within the Interconnection is out of
balance. To correct the time error using the
Automatic Time Error Correction (ATEC) method,
it is necessary for the balancing authority that was
out of balance to adjust the Interconnection’s
frequency so that it equalizes its prior inadvertent
energy exchange with the Interconnection.
23 Western Electricity Coordinating Council
Regional Reliability Standard Regarding Automatic
Time Error Correction, Notice of Proposed
Rulemaking, 73 FR 71977 (Nov. 26, 2008), FERC
Stats. & Regs. ¶ 32,638 (2008).
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methodology occurs and requires
adjustments.
16. Requirement R2. Requires a
balancing authority that operates in any
automatic generation control operating
mode other than ATEC to notify all
other balancing authorities of its
operating mode. This requirement is
necessary to ensure the reliable
operations of the Western
Interconnection by creating an operating
environment that encourages the
Balancing Authorities to minimize the
difference between the net actual and
net scheduled interchanges. To avoid
large accumulation of inadvertent
interchanges, Requirement R2 limits a
balancing authority’s use of operating
modes other than ATEC to a maximum
of 24 hours per calendar quarter.
17. Requirement R3. Requires
balancing authorities to have the
capability to switch between different
automatic generation control operating
modes as necessary to operate reliably
during various system conditions.
18. Requirement R4. Requires each
balancing authority to calculate and
record its hourly ‘‘Primary Inadvertent
Interchange’’ when hourly checkout is
complete.
19. The WECC regional Reliability
Standard also introduces the following
three new definitions:
Automatic Time Error Correction: A
frequency control automatic action that
a Balancing Authority uses to offset its
frequency contribution to support the
Interconnection’s scheduled frequency.
Primary Inadvertent Interchange: The
component of area (n) inadvertent
interchange caused by the regulating
deficiencies of area (n) itself.
Secondary Inadvertent Interchange:
The component of area (n) inadvertent
interchange caused by the regulating
deficiencies of area (i).
20. In its July 2008 filing, NERC
asserted that the ATEC procedure
provided in the proposed regional
Reliability Standard has been effective
in mitigating three problems relating to
correction of time errors in the Western
Interconnection. First, the ATEC
procedure has reduced the need for the
WECC Time Monitor to conduct manual
time error corrections from 216 manual
time error corrections in 2003 to 106
manual time error corrections in 2007.
Second, since time error is directly
related to inadvertent interchange, the
ATEC procedure reduces both time error
and accumulated inadvertent
interchange. Third, according to NERC,
the ATEC procedure better identifies the
balancing authorities responsible for
inadvertent interchange and provides a
more equitable and immediate payback
of the inadvertent interchange to the
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balancing authorities that should
receive it (i.e., the balancing authorities
that did not cause the inadvertent
interchange but supported the
interconnection’s scheduled frequency)
than the current NERC time error
correction process in BAL–004–0.
21. NERC also stated that the
proposed regional Reliability Standard
satisfies the factors provided in Order
No. 672 that the Commission considers
when determining whether a proposed
Reliability Standard is just, reasonable,
not unduly discriminatory or
preferential and in the public interest.24
According to NERC, BAL–004–WECC–
01 is clear and unambiguous regarding
what is required and who is required to
comply (balancing authorities). NERC
also stated that the proposed regional
Reliability Standard has clear and
objective measures for compliance and
achieves a reliability goal (namely,
creating an operating environment that
encourages system operators to
minimize the difference between the net
actual and net scheduled interchanges,
and to better control frequency)
effectively and efficiently.
II. Discussion
22. Pursuant to section 215(d) of the
FPA, the Commission approves regional
Reliability Standard BAL–004–WECC–
01 as mandatory and enforceable.
23. Pursuant to the continent-wide
NERC Reliability Standard BAL–004–1,
when accumulated time error increases
to a predetermined level, the
Interconnection’s Time Monitor
instructs all balancing authorities in the
Interconnection to manually change the
scheduled Interconnection’s frequency
until the Interconnection’s accumulated
time error has been reduced to a set
level. However, the requirements of
BAL–004–1 do not require each
balancing authority to determine what
portion of the Interconnection’s time
error that it alone caused.
24. Under the WECC ATEC
methodology, each balancing authority
in the Western Interconnection is
required to calculate its ‘‘primary
inadvertent interchange’’ 25 and enter its
‘‘primary inadvertent interchange’’ into
its Area Control Error (ACE) 26 equation.
24 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 323–337.
25 The balancing authority causing the frequency
error is said to have created ‘‘primary time error’’
and caused ‘‘primary inadvertent interchange.’’ The
other balancing authorities in the Interconnection
responding to correct system frequency are said to
have created ‘‘secondary time error’’ and caused
‘‘secondary inadvertent interchange.’’
26 ACE is the instantaneous difference between a
Balancing Authority’s net actual and scheduled
interchange, taking into account the effects of
Frequency Bias and correction for meter error
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25425
When all balancing authorities input
their portion of ‘‘primary inadvertent
interchange’’ into their ACE equation,
they continuously correct for their own
‘‘primary time error’’ and, in turn,
reduce the Western Interconnection’s
total time error.
25. This process differs from the
methodology used in NERC’s BAL–004–
1, in that ATEC is designed to place the
responsibility to correct primary time
error on the balancing authority that
causes it. Further, the regional
Reliability Standard is more stringent
and covers matters not addressed by the
related continent-wide NERC Reliability
Standards BAL–004–0 and BAL–006–1.
The regional Reliability Standard
provides for automatic correction of
time error, using a more refined primary
inadvertent interchange term than that
included in the continent-wide NERC
Reliability Standards for manual
correction of time error.27 Accordingly,
the Commission finds that the regional
Reliability Standard proposed by WECC
is more stringent than the continentwide NERC Reliability Standard,
because it provides for continuous
capture of inadvertent interchange, and
thereby (1) contributes to better
operation of balancing authorities by
operators, and (2) ensures that
discrepancies between a balancing
area’s net scheduled interchange and its
net actual interchange are adjusted more
quickly and accurately. Pursuant to
section 215(d) of the FPA, the
Commission approves BAL–004–
WECC–01 as just, reasonable, not
unduly discriminatory or preferential
and in the public interest.
26. As a separate matter, pursuant to
section 215(d)(5) of the FPA, the
Commission directs WECC to develop,
pursuant to its regional Reliability
Standards Development Procedure,
modifications to BAL–004–WECC–01 to
address the Commission’s specific
concerns, as discussed below. Further,
the Commission approves some of the
proposed violation risk factors and
violation severity levels, and directs the
ERO to submit a filing within 60 days
of the effective date of this Final Rule
revising other specified violation risk
factors and another filing within 120
days of the effective date of this Final
Rule providing violation severity levels
(NERC glossary of terms used in reliability
standards, https://www.nerc.com/docs/standards/rs/
Glossary_2009April20.pdf, at 1). More specifically:
ACE = (NIA ¥ NIS)¥10bi(FA ¥ FS)¥T0b + IME
(Requirement R1 of Commission Approved
Standard BAL–001–0.1a, see https://www.nerc.com/
docs/standards/sar/
Interpretation_WECC_ATEC_BAL-001and003_BOTApproved_23Oct07.pdf).
27 NERC filing at 10.
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for each Requirement and subRequirement that has been assigned a
violation risk factor.
will know with specificity the
circumstances that trigger the actions
required by Requirement R1.2.
A. Requirement R1.2
27. Requirement R1.2 of BAL–004–
WECC–01 provides in part, ‘‘[l]arge
accumulations of primary inadvertent
[energy] point to an invalid
implementation of ATEC, loose control,
metering or accounting errors. A
[balancing authority] in such a situation
should identify the source of the error(s)
and make the corrections.’’ In the
NOPR, the Commission noted that the
phrases ‘‘large accumulation’’ and ‘‘in
such a situation’’ are not defined and,
while likely obvious in many
circumstances, leaves to individual
interpretation when a ‘‘large’’ amount of
primary inadvertent has accumulated.28
The Commission proposed to direct
WECC to develop revisions to the
provision so that a balancing authority
will know with specificity the
circumstances that trigger the actions
required by Requirement R1.2.
B. Explanation of 24-Hour Exemption
Period of Requirement R2
1. Comments
28. WECC acknowledges the
Commission’s concern that the
undefined phrases ‘‘large accumulation’’
and ‘‘in such a situation’’ in
Requirement R1.2 could lead to
uncertainty among Balancing
Authorities as to when they are required
to take action. WECC comments that,
while these terms have a general
industry understanding within the
Western Interconnection, clarifying
these terms would remove the potential
for controversy over compliance
requirements. WECC suggests either
defining the terms within the regional
Reliability Standard or modifying the
standard language to better identify
specific parameters that would trigger
actions required under this standard.
29. NERC agrees that further clarity of
the identified phrases in Requirement
R1.2 is appropriate and believes WECC’s
proposal in its comments is responsive.
2. Commission Determination
30. As we explained in the NOPR, the
Commission is concerned that the
phrases ‘‘large accumulation’’ and ‘‘in
such a situation’’ as used in
Requirement R1.2 leave to individual
interpretation when a ‘‘large’’ amount of
primary inadvertent has accumulated.
The ERO and WECC agree that the
provision could benefit from further
clarity. Accordingly, the Commission
adopts its NOPR proposal and directs
WECC to develop revisions to the
provision so that a balancing authority
31. Requirement R2 of BAL–004–
WECC–01 provides that ‘‘[e]ach
[balancing authority] while
synchronously connected to the
Western Interconnection will be
allowed to have ATEC out of service for
a maximum of 24 hours per calendar
quarter, for reasons including
maintenance and testing.’’ In the NOPR,
the Commission proposed to direct
WECC to develop a modification that
clarifies whether the ‘‘maximum of 24
hours per calendar quarter’’ refers to a
single occurrence of up to 24 hours in
the calendar quarter, or whether several
occurrences are permitted as long as
they add up to 24 hours or less within
a calendar quarter.29
1. Comments
32. WECC comments that it intended
the 24-hour per calendar quarter limit to
permit an accumulated total of up to 24
hours, whether resulting from one
extended occurrence or multiple
occurrences. Likewise, NERC
understands that WECC intended the
provision to permit an accumulated
total of up to 24 hours from one or more
occurrences.
33. WECC and NERC agree the
proposed NOPR modifications will
leave the regional Reliability Standard
more definite and can be addressed
through WECC’s stakeholder process.
2. Commission Determination
34. Consistent with the NOPR,
pursuant to section 215(d)(5) of the
FPA, the Commission directs WECC to
develop a modification to the regional
Reliability Standard consistent with
WECC’s and NERC’s explanation that
the limit set forth in Requirement 2 of
‘‘24 hours per calendar quarter’’ is an
accumulated total for the period,
resulting from either a singular event or
a cumulative time limit from a number
of events.
C. New Glossary Definitions
35. As mentioned above, the WECC
regional Reliability Standard includes
three new definitions: Automatic Time
Error Correction, Primary Inadvertent
Interchange and Secondary Inadvertent
Interchange. In the NOPR, the
Commission proposed to approve the
three new terms.30
29 NOPR
at P 37.
at P 26. While the Commission
discussed the proposed definitions in several places
30 NOPR
28 NOPR
at P 36.
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1. Comments
36. Consumers expresses concern
regarding the incorporation of three
newly defined terms (Automatic Time
Error Correction, Primary Inadvertent
Interchange and Secondary Inadvertent
Interchange) into the NERC glossary.
Consumers states that it is appropriate
for the three new definitions to apply to
WECC regional Reliability Standards.
However, according to Consumers, the
definitions have not been vetted through
NERC’s full development process for
their inclusion in the NERC glossary,
applicable to NERC Reliability
Standards that apply on a continentwide basis. Specifically, Consumers
points out that NERC’s Rules of
Procedure provide that all definitions
must be approved in accordance with
the standards process.31 Consumers
recommends that the Commission either
clearly designate the proposed
definitions as being applicable only to
WECC regional Reliability Standards or
direct NERC to submit the proposed
definitions for stakeholder review as
part of the NERC Reliability Standards
development process.
2. Commission Determination
37. The Commission agrees with
Consumers that the three new
definitions have not been vetted through
the ERO’s full development process for
their inclusion in the NERC glossary;
and that the three new definitions
approved in this Final Rule apply only
to WECC regional Reliability Standards.
NERC should designate them
accordingly. Therefore, to ensure that all
approved definitions, NERC and
regional, are maintained in a single
location, NERC should add or append
the three new regional definitions to the
NERC Glossary of Terms in such a way
as to designate that they apply only in
the Western Interconnection.
38. The Commission, however, has a
general concern regarding the
development of definitions that apply
only to regional Reliability Standards.
The Commission understands that, prior
to NERC’s development of the ‘‘Version
0’’ Reliability Standards, there were
multiple regional standards and
protocols, with each region having its
own definitions of terms. In some
instances, the same or similar terms
were defined differently within different
in the NOPR, in one instance the Commission
stated that it proposed to ‘‘accept three related
definitions for inclusion in the NERC Reliability
Standards Glossary (NERC glossary).’’ Id. P 2. In
other instances, the Commission simply stated that
it proposed to approve the definitions. Id. P 26, 34.
31 Consumers Comments at 4, citing NERC Rules
of Procedure, section 300 and Appendix 3A (NERC
Reliability Standards Development Procedure) at 8.
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regions. The Version 0 process included
developing the NERC glossary, which
eliminated many inconsistencies in
terminology across regions and created
a single source for defining terms used
in Reliability Standards.
39. We are concerned about a
potential re-proliferation of regional
terminology, and consequently, the
need to prevent possible inconsistent
use of terminology among regions.
While NERC has only submitted WECC
regional Reliability Standards to the
Commission at this time, other regions
are in the process of developing regional
standards. Similar to our policy set forth
in Order No. 672 that favors the
development of uniform Reliability
Standards,32 the Commission believes
NERC, as a rule, should develop
definitions that apply uniformly across
the different interconnections. As a
general goal, NERC should work to
minimize the use of regional definitions
and terminology and, assure that
proposed regional definitions and
terminology are as well defined as, do
not conflict and are not redundant with
nor redefine, NERC glossary definitions.
We therefore direct NERC to develop in
its Rules of Procedure, a methodology
for organizing and managing regional
definitions and terminology consistent
with the principles discussed above.
40. Further, NERC should be vigilant
to assure that a regional definition is
consistent with both NERC definitions
and the approved terms used in other
regions. The Commission considers an
inconsistency or conflict in terms to be
reasonable grounds to remand a regional
definition and, if appropriate, the
regional Reliability Standard that
employs that definition.
D. Consistency With NERC Reliability
Standards
1. Comments
41. Xcel comments that, while it
generally supports the adoption of BAL–
004–WECC–01, it is concerned that the
regional Reliability Standard creates a
potential conflict with two NERC
Reliability Standards, BAL–001–0a
(Real Power Balancing Control
Performance) and BAL–002–0
(Disturbance Control Performance). Xcel
requests that the Commission establish
priority for compliance in the event that
WECC regional Reliability Standards
conflict with those of NERC. Xcel’s
concern involves the difference in the
32 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 290 (‘‘The Commission believes that uniformity
of Reliability Standards should be the goal and the
practice, the rule rather than the exception. Greater
uniformity will encourage best practices, thereby
enhancing reliability and benefiting consumers and
the economy’’).
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16:39 May 27, 2009
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ACE equation between the regional and
the NERC Reliability Standards and the
compliance elements regarding this
equation.
42. Xcel states that BAL–001–0a
requires that ACE be kept within
specific parameters, while BAL–004–
WECC–01 requires a measurement of
ACE that is outside those parameters to
be maintained at all times. According to
Xcel, BAL–004–WECC–01 requires
ATEC operation at all times except up
to 24 hours per calendar quarter, but is
not clear if this period covers times
when complying with BAL–001–0a
requires non-compliance with BAL–
004–WECC–01. Xcel notes that
Requirement R3 of BAL–004-WECC–01
requires the ACE used for NERC reports
to be the same as the ACE used in the
current AGC operating mode. According
to Xcel, this requires the use of the
ACEATEC set forth in BAL–004–WECC–
01 rather than the BAL–001–0a ACE
equation in most situations.
43. Xcel claims that BAL–004–WECC–
01 may also conflict with BAL–002–0
Requirement R4.2, which requires that
the balancing authority restore ACE to
specified parameters within a defined
timeframe. Xcel posits that in most
situations it will be impossible for an
entity attempting to recover from a
disturbance to operate at an ACE
calculated in accordance with the NERC
standard and ACEATEC simultaneously.
According to Xcel, the use of the BAL–
004–WECC–01, Requirement R2
exception, allowing ATEC to be out of
service for 24 hours per calendar
quarter, should be acceptable for
alleviating this circumstance. Xcel
contends that, where the 24-hour
maximum is exceeded for the purpose
of ACE complying with BAL–002–0, the
balancing authority should be given
express authority to deviate from the
requirements of BAL–004–WECC–01.
2. Commission Determination
44. We are not persuaded by Xcel’s
comments on this matter. We believe
that our approval, in Order No. 713,33 of
an ERO interpretation addresses Xcel’s
concern. Specifically, WECC requested
that the ERO provide a formal
interpretation whether the use of
WECC’s automatic time error correction
factor that is applied to the net
interchange portion of the ACE equation
violates Requirement R1 of NERC
Reliability Standard BAL–001–0a. In
33 Modification of Interchange and Transmission
Loading Relief Reliability Standards; and electric
Reliability Organization Interpretation of specific
Requirements of Four Reliability Standards, Order
No. 713, 73 FR 43613, 124 FERC ¶ 61,071 (July 21,
2008).
PO 00000
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Fmt 4700
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25427
response, the ERO interpreted BAL–
001–0 Requirement R1 as follows:
• The [WECC automatic time error
correction or WATEC] procedural
documents ask Balancing Authorities to
maintain raw ACE for [control
performance standard or CPS1 34]
reporting and to control via WATECadjusted ACE.
• As long as Balancing Authorities
use raw (unadjusted for WATEC) ACE
for CPS reporting purposes, the use of
WATEC for control is not in violation of
BAL–001 Requirement 1.35
45. The Commission-approved
interpretation makes clear that a
balancing authority is in compliance
with BAL–001–1a provided that it uses
the equation identified in R1 for
reporting CPS1 and achieves the
performance required by CPS1. The
balancing authority’s ability to use the
ACE calculation also to assist in time
error correction and inadvertent
interchange payback is not precluded.
46. Further, the Commission is not
persuaded by Xcel’s claims that BAL–
004–WECC–01 may also conflict with
BAL–002–0, Requirement R4.2, which
requires that the balancing authority
restore ACE to specified parameters
within a defined timeframe.
Requirements R2 and R3 of Standard
BAL–004–WECC–0 direct that ATEC
will be the primary operating mode
used by all balancing authorities in the
WECC region. However, balancing
authorities may modify their ACE
operating mode to account for various
operating situations, including the need
to respond to meeting the Disturbance
Recovery Criterion within the
Disturbance Recovery Period in
Requirement R4.2 of BAL–002–0.36
47. Nor does the Commission agree
with Xcel’s concern about the 24-hour
per quarter ATEC operating mode
exception period. Giving due
consideration to the Western
Interconnection’s participants, the
Commission finds that a 24-hour per
quarter ATEC operating mode exception
period encourages the Western
Interconnection’s balancing authorities
to maintain a high standard of
operations to support the reliability of
the Western Interconnection.
34 The Control Performance Standard (CPS) is
defined in the NERC Glossary as ‘‘[t]he reliability
standard that sets the limits of a Balancing
Authority’s Area Control Error over a specified time
period.’’
35 Order No. 713, 124 FERC ¶ 61,071 at P 17.
36 R4.2 provides that ‘‘[t]he default Disturbance
Recovery Period is 15 minutes after the start of a
Reportable Disturbance,’’ but further states that
‘‘[t]his period may be adjusted to better suit the
needs of an Interconnection based on analysis
approved by the NERC Operating Committee.’’
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48. Consequently, the Commission is
not persuaded by Xcel’s comments. As
discussed above, the ERO and the
Commission have previously addressed
the issue raised by Xcel, and the
Commission does not believe that
remand or further clarification is
warranted.
E. Violation Risk Factors
49. In the NOPR, the Commission
proposed to direct that the violation risk
factors assigned to BAL–004–WECC–01,
Requirements R1, R2, R3, and R4 be
modified from ‘‘lower’’ to ‘‘medium.’’ 37
The Commission explained that the
participation in an interconnection’s
time error correction is critical and can
directly affect the state of the BulkPower System.38 Further, the
Commission explained that the
assignment of a ‘‘medium’’ violation
risk factor to the Requirements of the
WECC regional Reliability Standard
would make it consistent with the
assignment of ‘‘medium’’ violation risk
factors to NERC Reliability Standard
BAL–004–0.
1. Comments
50. WECC comments that, while it is
unlikely that a violation of the regional
Reliability Standard would lead to BulkPower System instability, it
acknowledges that ATEC is not
administrative in nature and could
affect the electrical status of the BulkPower System making a ‘Medium’ VRF
more appropriate. Thus, WECC
comments that ‘‘it does not disagree’’
with the Commission’s proposal to
change the violation risk factors from
low to medium. NERC also agrees that
the Commission’s proposal would
promote consistency.
2. Commission Determination
51. We adopt our NOPR proposal and
direct that the violation risk factors
assigned to BAL–004–WECC–01,
Requirements R1, R2, R3, and R4 be
modified from ‘‘lower’’ to ‘‘medium.’’
The ERO and WECC must submit a
filing within 60 days of the effective
date of this Final Rule that includes the
directed modifications.
F. Violation Severity Levels
52. The ERO’s July 2008 filing of the
WECC regional Reliability Standard
included proposed violation severity
levels that apply generally to all
violations of the Requirements of BAL–
004–WECC–01 and not to any one
specific Requirement. In the NOPR, the
Commission proposed to direct the
37 NOPR
38 Id.
at P 44–47.
P 46.
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16:39 May 27, 2009
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submission of new violation severity
levels for each Requirement and subRequirement that has been assigned a
violation risk factor.39
1. Comments
53. WECC comments that the
Commission’s and NERC’s guidance on
the development of violation severity
levels has evolved since the drafting of
the violation severity levels for BAL–
004–WECC–1. WECC indicates that it
will develop violation severity levels for
each Requirement and sub-Requirement
of the regional Reliability Standard, and
requests that the Commission allow
sufficient time to address the issue
through the WECC stakeholder process.
2. Commission Determination
54. The Commission adopts its NOPR
proposal and directs the ERO and WECC
to submit violation severity levels for
each Requirement and sub-Requirement
that has been assigned a violation risk
factor. To allow adequate time for the
development of the violation severity
levels, the ERO and WECC must submit
a filing within 120 days of the effective
date of this Final Rule that includes the
directed violation severity levels.
III. Information Collection Statement
55. The Office of Management and
Budget (OMB) regulations require that
OMB approve certain reporting and
recordkeeping (collections of
information) imposed by agency rules.40
The information contained here is also
subject to review under section 3507(d)
of the Paperwork Reduction Act of
1995.41 Upon approval of a collection(s)
of information, OMB will assign an
OMB control number and an expiration
date. Respondents subject to the filing
requirements of an agency rule will not
be penalized for failing to respond to
these collections of information unless
the collections of information display a
valid OMB control number.
56. This Final Rule approves and
requires modifications of one regional
Reliability Standard that was submitted
by NERC as the ERO. Section 215 of the
FPA authorizes the ERO to submit
Reliability Standards to provide for the
reliable operation of the Bulk-Power
39 NOPR at P 49. We note that, in Version Two
Facilities Design, Connections and Maintenance
Reliability Standards, Order No. 722, 126 FERC
¶ 61,255 at P 45 (2009), the ERO proposed to
develop violation severity levels for Requirements
but not sub-Requirements. The Commission denied
the proposal as ‘‘premature’’ and, instead,
encouraged the ERO to ‘‘develop a new and
comprehensive approach that would better facilitate
the assignment of violation severity levels and
violation risk factors.’’
40 5 CFR 1320.11.
41 44 U.S.C. 3507(d).
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System. Pursuant to the statute, the ERO
must submit each Reliability Standard
that it proposes to be made effective to
the Commission for approval.42
57. The regional Reliability Standard,
which applies to approximately 35
balancing authorities in the U.S. portion
of the Western Interconnection, does not
require balancing authorities to file
information with the Commission. It
does require balancing authorities to
develop and maintain certain
information for a specified period of
time, subject to inspection by WECC.
However, the Commission does not
believe that approval of the WECC
regional Reliability Standard will result
in an increase in reporting burdens as
compared to current practices in WECC.
As NERC indicates, since 2003, WECC
has used the automatic time error
correction practice set forth in BAL–
004–WECC–01. Thus, the Commission
finds that the requirement to develop
and maintain information in the
regional Reliability Standard mirrors
customary and usual business practice
in the area in which the Standard will
apply and, therefore, imposes a minimal
burden on applicable balancing
authorities and eliminates any possible
confusion between current industry
practice and the standard. The
Commission also finds that the
modifications to the current Reliability
Standard effected by this Final Rule will
not increase the reporting burden nor
impose any additional information
collection requirements.
58. In response to the NOPR, the
Commission received no comments
concerning its determination with
respect to the burden and costs and
therefore uses the same affirmation here.
Title: Western Electricity
Coordinating Council Regional
Reliability Standard Regarding
Automatic Time Error Correction.
Action: Final Rule.
OMB Control No.: 1902–0244.
Respondents: Businesses or other forprofit institutions; not-for-profit
institutions.
Frequency of Responses: On occasion.
Necessity of the Information: This
Final Rule approves and requires
modification to one regional Reliability
Standard that pertains to automatic time
error correction in the Western
Interconnection. The Final Rule finds
the Reliability Standard to be just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest.
59. Interested persons may obtain
information on the reporting
requirements by contacting: Federal
42 See
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Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations
Energy Regulatory Commission, Attn:
Michael Miller, Office of the Executive
Director, 888 First Street, NE.,
Washington, DC 20426, Tel: (202) 502–
8415, Fax: (202) 273–0873, E-mail:
michael.miller@ferc.gov, or by
contacting: Office of Information and
Regulatory Affairs, Attn: Desk Officer
for the Federal Energy Regulatory
Commission (Re: OMB Control No.
1902–0244), Washington, DC 20503,
Tel: (202) 395–4650, Fax: (202) 395–
7285, E-mail:
oira_submission@omb.eop.gov.
IV. Environmental Analysis
60. 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.43 The Commission has
categorically excluded certain actions
from this requirement as not having a
significant effect on the human
environment. Included in the exclusion
are rules that are clarifying, corrective,
or procedural or that do not
substantially change the effect of the
regulations being amended.44 The
actions proposed herein fall within this
categorical exclusion in the
Commission’s regulations.
V. Regulatory Flexibility Act
61. The Regulatory Flexibility Act of
1980 (RFA) 45 generally requires a
description and analysis of Final Rules
that will have significant economic
impact on a substantial number of small
entities. The RFA mandates
consideration of regulatory alternatives
that accomplish the stated objectives of
a proposed rule and that minimize any
significant economic impact on a
substantial number of small entities.
The Small Business Administration’s
Office of Size Standards develops the
numerical definition of a small
business. (See 13 CFR 121.201.) For
electric utilities, a firm is small if,
including its affiliates, it is primarily
engaged in the transmission, generation
and/or distribution of electric energy for
sale and its total electric output for the
preceding twelve months did not exceed
four million megawatt hours.
62. As noted above, the regional
reliability standard would apply to
about 35 balancing areas in the Western
Interconnection. The Commission
estimates that of these balancing areas,
approximately two to four qualify as
small entities, because the total electric
output of each of these entities for the
preceding twelve months did not exceed
four million megawatt hours. Thus, few
small entities are impacted by the
proposed rule.
63. Based on this understanding, the
Commission certifies that this Final
Rule will not have a significant
economic impact on a substantial
number of small entities. Accordingly,
no regulatory flexibility analysis is
required.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E9–12351 Filed 5–27–09; 8:45 am]
VI. Document Availability
[TD 9450]
64. 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 (https://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, NE., Room 2A, Washington, DC
20426.
65. 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.
66. User assistance is available for
eLibrary and the FERC’s Web site during
normal business hours from FERC
Online Support at (202) 502–6652 (toll
free at 1–866–208–3676) or e-mail at
ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. E-mail the
Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional
Notification
67. The Reliability Standard approved
in this Final Rule is effective June 29,
2009. The Commission has determined,
with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not 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
Implementing the National
Environmental Policy Act, Order No. 486, FERC
Stats. & Regs. ¶ 30,783 (1987).
44 18 CFR 380.4(a)(2)(ii).
45 5 U.S.C. 601–12.
43 Regulations
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25429
Electric power, Electric utilities,
Reporting and recordkeeping
requirements.
PO 00000
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BILLING CODE 6717–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
RIN 1545–BE73
Information Reporting for Lump-Sum
Timber Sales
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final
regulations that provide guidance
regarding the information reporting
requirements contained in section
6045(e) of the Internal Revenue Code
(Code) on sales or exchanges of standing
timber for lump-sum (outright)
payments. The final regulations amend
§ 1.6045–4 of the Income Tax
Regulations to require real estate
reporting persons, as defined in section
6045(e)(2) of the Code, to report lumpsum payments received by sellers
(landowners) for sales or exchanges of
standing timber. The final regulations
do not change the information reporting
requirements that currently apply to
sales or exchanges of standing timber for
pay-as-cut (contingent) payments under
section 6050N of the Code.
DATES:
Effective date: These regulations are
effective on May 28, 2009.
Applicability date: The amendments
to paragraphs (b)(2)(i)(E), (b)(2)(ii) and
(c)(2)(i) of § 1.6045–4 shall apply to
sales or exchanges of standing timber for
lump-sum payments completed after
May 28, 2009.
FOR FURTHER INFORMATION CONTACT:
Timothy S. Sheppard of the Office of
Chief Counsel (Procedure and
Administration), at (202) 622–4910.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information
contained in these final regulations has
been reviewed and approved by the
Office of Management and Budget
(OMB) in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) under control number
1545–1085. The collection of
information in these final regulations is
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]]>Agencies
[Federal Register Volume 74, Number 101 (Thursday, May 28, 2009)]
[Rules and Regulations]
[Pages 25422-25429]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12351]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM08-12-000; Order No.723]
Western Electricity Coordinating Council Regional Reliability
Standard Regarding Automatic Time Error Correction
Issued May 21, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
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SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the
Federal Energy Regulatory Commission (Commission) approves regional
Reliability Standard BAL-004-WECC-01 (Automatic Time Error Correction),
as submitted by the North American Electric Reliability Corporation. As
a separate action, pursuant to section 215(d)(5) of the FPA, the
Commission directs the Western Electricity Coordinating Council to
develop several modifications to the regional Reliability Standard. The
regional Reliability Standard requires balancing authorities within the
Western Interconnection to maintain interconnection frequency within a
predefined frequency profile and ensure that time error corrections are
effectively conducted in a manner that does not adversely affect the
reliability of the Interconnection.
[[Page 25423]]
DATES: Effective Date: This rule will become effective June 29, 2009.
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.
Katherine Waldbauer (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426. (202) 502-8232. katherine.waldbauer@ferc.gov.
Nick Henery (Technical Information), Office of Electric Reliability,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8636. nick.henery@ferc.gov.
SUPPLEMENTARY INFORMATION:
Order No. 723
Table of Contents
Paragraph
Nos.
I. Background............................................... 4.
A. Mandatory Reliability Standards...................... 4.
B. Procedural Background................................ 11.
C. Reliability Standard BAL-004-WECC-01................. 14.
II. Discussion.............................................. 22.
A. Requirement R1.2..................................... 27.
B. Explanation of 24-Hour Exemption Period of 31.
Requirement R2.........................................
C. New Glossary Definitions............................. 35.
D. Consistency With NERC Reliability Standards.......... 41.
E. Violation Risk Factors............................... 49.
F. Violation Severity Levels............................ 52.
III. Information Collection Statement....................... 55.
IV. Environmental Analysis.................................. 60.
V. Regulatory Flexibility Act............................... 61.
VI. Document Availability................................... 64.
VII. Effective Date and Congressional Notification.......... 67.
Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly,
Marc Spitzer, and Philip D. Moeller.
Order No. 723
Final Rule
Issued May 21, 2009
1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the
Commission approves regional Reliability Standard BAL-004-WECC-01
(Automatic Time Error Correction), submitted to the Commission for
approval by the North American Electric Reliability Corporation (NERC).
As a separate action, pursuant to section 215(d)(5) of the FPA, the
Commission directs the Western Electricity Coordinating Council (WECC)
to develop several modifications to the regional Reliability Standard.
The regional Reliability Standard requires balancing authorities within
the WECC region to implement an automatic time error correction
procedure for the purpose of maintaining Interconnection frequency
within a predefined frequency profile and ensuring that time error
corrections are effectively conducted in a manner that does not
adversely affect reliability.\2\
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\1\ 16 U.S.C. 824o (2006).
\2\ The proposed regional Reliability Standard will be in effect
within the Western Interconnection-wide WECC Regional Entity. In
this proceeding, the Commission proposes to take action to make
mandatory the regional Reliability Standard as it applies within the
U.S. portion of the Western Interconnection.
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2. The Reliability Standard benefits the reliable operation of the
Bulk-Power System by creating an operating environment that encourages
system operators to balance their generation and interchange with their
load and losses, thereby minimizing the difference between the net
actual and net scheduled interchanges. This process will result in
reducing the number of manual time error corrections required by the
Western Interconnection Time Monitor, and minimize accumulated
inadvertent interchange energy between Western Interconnection
balancing authorities.\3\ The Commission also accepts three related
definitions that are included in the regional Reliability Standard. The
Commission further approves the violation risk factors for the regional
Reliability Standard, and directs the Electric Reliability Organization
(ERO) and WECC to submit revised violation risk factors in a filing
within 60 days of the effective date of this Final Rule. The Commission
also directs the ERO and WECC to submit violation severity levels for
each Requirement and sub-Requirement that has been assigned a violation
risk factor within 120 days of the effective date of this Final Rule.
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\3\ Mismatches between generation and interchange and load and
losses result in the Balancing Area operating at frequencies other
than 60 Hertz, which causes both time error and inadvertent
interchange.
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3. As discussed below, the Commission finds that the regional
Reliability Standard proposed by WECC satisfies the statutory criteria,
and is more stringent than the applicable continent-wide NERC
Reliability Standard.
I. Background
A. Mandatory Reliability Standards
4. Section 215 of the FPA 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 by the Commission independently.\4\
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\4\ See FPA 215(e)(3), 16 U.S.C. 824o(e)(3).
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5. In February 2006, the Commission issued Order No. 672,\5\
implementing section 215 of the FPA. Pursuant to Order No. 672, the
Commission certified one organization, NERC, as the ERO.\6\ Reliability
Standards that the ERO proposes to the Commission may include
Reliability Standards that are proposed to the ERO by a Regional
Entity.\7\ When the ERO reviews a regional Reliability Standard that
would be applicable on an Interconnection-wide basis and that has been
proposed by a Regional Entity organized on an Interconnection-wide
basis, the ERO
[[Page 25424]]
must rebuttably presume that the regional Reliability Standard is just,
reasonable, not unduly discriminatory or preferential, and in the
public interest.\8\
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\5\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204 (2006), order on reh'g, Order No. 672-A,
FERC Stats. & Regs. ] 31,212 (2006).
\6\ See North American Electric Reliability Corp., 116 FERC ]
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006).
\7\ 16 U.S.C. 824o(e)(4).
\8\ 16 U.S.C. 824o(d)(3); 18 CFR 39.5(b).
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6. In reviewing the ERO's submission, the Commission will give due
weight to the ERO's technical expertise, except concerning the effect
of a proposed Reliability Standard on competition.\9\ The Commission
will also give due weight to the technical expertise of a Regional
Entity organized on an Interconnection-wide basis with respect to a
proposed Reliability Standard to be applicable within that
Interconnection.\10\
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\9\ 16 U.S.C. 824o(d)(2).
\10\ Id.
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7. The Commission may approve a proposed Reliability Standard if
the Commission finds it is just, reasonable, not unduly discriminatory
or preferential, and in the public interest.\11\ In addition, the
Commission explained in Order No. 672 that ``uniformity of Reliability
Standards should be the goal and the practice, the rule rather than the
exception.'' \12\ Yet, the Commission recognized that ``the goal of
greater uniformity does not, however, mean that regional differences
cannot exist.'' \13\ The Commission then provided the following
guidance:
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\11\ Id.
\12\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 290.
\13\ Id. P 291.
As a general matter, we will accept the following two types of
regional differences, provided they are otherwise just, reasonable,
not unduly discriminatory or preferential, and in the public
interest, as required by the statute: (1) A regional difference that
is more stringent than the continent-wide Reliability Standard,
including a regional difference that addresses matters that the
continent-wide Reliability Standard does not; and (2) a regional
Reliability Standard that is necessitated by a physical difference
in the Bulk-Power System.\14\
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\14\ Id.
8. On March 16, 2007, the Commission issued Order No. 693,
approving 83 of the 107 Reliability Standards originally proposed by
NERC.\15\ In addition, pursuant to section 215(d)(5) of the FPA, the
Commission directed NERC to develop modifications to 56 of the 83
approved Reliability Standards.\16\ Relevant to the immediate
proceeding, the Commission approved continent-wide Reliability Standard
BAL-004-0 (Time Error Correction), but noted that WECC's regional
approach appears to serve as a more effective means of accomplishing
time error corrections.\17\
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\15\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order
No. 693-A, 120 FERC ] 61,053 (2007).
\16\ 16 U.S.C. 824o(d)(5). Section 215(d)(5) provides, ``The
Commission * * * may order the Electric Reliability Organization to
submit to the 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 this section.''
\17\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 377, 382.
The Commission also directed NERC to develop a modification to BAL-
004-0 to include Levels of Non-Compliance and additional Measures
for Requirement R3.
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9. On April 19, 2007, the Commission approved delegation agreements
between NERC and each of the eight Regional Entities, including
WECC.\18\ Pursuant to such agreements, the ERO delegated responsibility
to the Regional Entities to enforce the mandatory, Commission-approved
Reliability Standards. In addition, the Commission approved, as part of
each delegation agreement, a Regional Entity process for developing
regional Reliability Standards. In the Delegation Agreement Order, the
Commission accepted WECC as a Regional Entity organized on an
Interconnection-wide basis and accepted WECC's Standards Development
Manual, which sets forth the process for development of WECC's
Reliability Standards.\19\
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\18\ See North American Electric Reliability Corp., 119 FERC ]
61,060, order on reh'g, 120 FERC ] 61,260 (2007) (Delegation
Agreement Order).
\19\ Id. P 469-470.
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10. In a June 2007 order, the Commission approved eight regional
Reliability Standards that apply in the WECC region.\20\
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\20\ North American Electric Reliability Corp., 119 FERC ]
61,260 (2007).
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B. Procedural Background
11. On July 29, 2008, NERC submitted for Commission approval, in
accordance with section 215(d)(1) of the FPA,\21\ regional Reliability
Standard BAL-004-WECC-01, which would apply to balancing authorities
within the Western Interconnection. NERC stated that the primary
purpose of the regional Reliability Standard is to reduce the number of
time error corrections imposed on the Western Interconnection by
requiring balancing authorities that operate synchronously in the
Western Interconnection to automatically correct for their contribution
to time error. According to NERC, BAL-004-WECC-01 provides the added
benefit of a superior approach over the current NERC manual time error
correction (BAL-004-0) for assigning costs and providing for the
equitable payback of inadvertent interchange.\22\
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\21\ 16 U.S.C. 824o(d)(1) (2006).
\22\ The NERC glossary defines ``interchange'' as the energy
transfers that cross balancing authority boundaries, and defines
``inadvertent interchange'' as the difference between the balancing
authority's net actual interchange and its net scheduled
interchange. Within a synchronous Interconnection, during real-time
operations, a balancing authority may engage in ``inadvertent
interchange'' if it experiences an operational problem that prevents
its net actual interchange of energy from matching its net scheduled
interchange with other balancing authorities within the
Interconnection. This discrepancy will indicate what is referred to
as a ``time error''--i.e., because the Interconnection will operate
at a frequency (number of cycles per second) that is different from
the Interconnection's scheduled frequency of 60 Hz (60 cycles per
second). Time error also serves as a means to measure of how much
and which balancing authority within the Interconnection is out of
balance. To correct the time error using the Automatic Time Error
Correction (ATEC) method, it is necessary for the balancing
authority that was out of balance to adjust the Interconnection's
frequency so that it equalizes its prior inadvertent energy exchange
with the Interconnection.
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12. On November 20, 2008, the Commission issued a Notice of
Proposed Rulemaking (NOPR) that proposed to approve BAL-004-WECC-
01.\23\ In response, four interested persons filed comments: NERC,
WECC, Consumers Energy Company (Consumers) and Xcel Energy Services Inc
(Xcel).
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\23\ Western Electricity Coordinating Council Regional
Reliability Standard Regarding Automatic Time Error Correction,
Notice of Proposed Rulemaking, 73 FR 71977 (Nov. 26, 2008), FERC
Stats. & Regs. ] 32,638 (2008).
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13. In its July 2008 filing, NERC stated that Automatic Time Error
Correction or ATEC has been a regional reliability practice in WECC,
effectively reducing manual time error corrections, reducing the number
of hours of manual time error correction for the Western
Interconnection, and reducing the accumulated inadvertent interchange
in the Western Interconnection since 2003. NERC asserted that the
proposed WECC regional Reliability Standard is more stringent or covers
matters not addressed by NERC's continent-wide Reliability Standards,
BAL-004-0 and BAL-006-1 (Inadvertent Interchange).
C. Reliability Standard BAL-004-WECC-01
14. Regional Reliability Standard BAL-004-WECC-01 contains four
requirements, summarized as follows:
15. Requirement R1. Requires that all balancing authorities must
continuously participate in Automatic Time Error Correction through
their automatic generation control systems. The sub-requirement (R1.1)
limits the payback amount to minimize any operating metric violations,
while R1.2 addresses actions for cases when invalidated implementation
of the ATEC
[[Page 25425]]
methodology occurs and requires adjustments.
16. Requirement R2. Requires a balancing authority that operates in
any automatic generation control operating mode other than ATEC to
notify all other balancing authorities of its operating mode. This
requirement is necessary to ensure the reliable operations of the
Western Interconnection by creating an operating environment that
encourages the Balancing Authorities to minimize the difference between
the net actual and net scheduled interchanges. To avoid large
accumulation of inadvertent interchanges, Requirement R2 limits a
balancing authority's use of operating modes other than ATEC to a
maximum of 24 hours per calendar quarter.
17. Requirement R3. Requires balancing authorities to have the
capability to switch between different automatic generation control
operating modes as necessary to operate reliably during various system
conditions.
18. Requirement R4. Requires each balancing authority to calculate
and record its hourly ``Primary Inadvertent Interchange'' when hourly
checkout is complete.
19. The WECC regional Reliability Standard also introduces the
following three new definitions:
Automatic Time Error Correction: A frequency control automatic
action that a Balancing Authority uses to offset its frequency
contribution to support the Interconnection's scheduled frequency.
Primary Inadvertent Interchange: The component of area (n)
inadvertent interchange caused by the regulating deficiencies of area
(n) itself.
Secondary Inadvertent Interchange: The component of area (n)
inadvertent interchange caused by the regulating deficiencies of area
(i).
20. In its July 2008 filing, NERC asserted that the ATEC procedure
provided in the proposed regional Reliability Standard has been
effective in mitigating three problems relating to correction of time
errors in the Western Interconnection. First, the ATEC procedure has
reduced the need for the WECC Time Monitor to conduct manual time error
corrections from 216 manual time error corrections in 2003 to 106
manual time error corrections in 2007. Second, since time error is
directly related to inadvertent interchange, the ATEC procedure reduces
both time error and accumulated inadvertent interchange. Third,
according to NERC, the ATEC procedure better identifies the balancing
authorities responsible for inadvertent interchange and provides a more
equitable and immediate payback of the inadvertent interchange to the
balancing authorities that should receive it (i.e., the balancing
authorities that did not cause the inadvertent interchange but
supported the interconnection's scheduled frequency) than the current
NERC time error correction process in BAL-004-0.
21. NERC also stated that the proposed regional Reliability
Standard satisfies the factors provided in Order No. 672 that the
Commission considers when determining whether a proposed Reliability
Standard is just, reasonable, not unduly discriminatory or preferential
and in the public interest.\24\ According to NERC, BAL-004-WECC-01 is
clear and unambiguous regarding what is required and who is required to
comply (balancing authorities). NERC also stated that the proposed
regional Reliability Standard has clear and objective measures for
compliance and achieves a reliability goal (namely, creating an
operating environment that encourages system operators to minimize the
difference between the net actual and net scheduled interchanges, and
to better control frequency) effectively and efficiently.
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\24\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 323-337.
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II. Discussion
22. Pursuant to section 215(d) of the FPA, the Commission approves
regional Reliability Standard BAL-004-WECC-01 as mandatory and
enforceable.
23. Pursuant to the continent-wide NERC Reliability Standard BAL-
004-1, when accumulated time error increases to a predetermined level,
the Interconnection's Time Monitor instructs all balancing authorities
in the Interconnection to manually change the scheduled
Interconnection's frequency until the Interconnection's accumulated
time error has been reduced to a set level. However, the requirements
of BAL-004-1 do not require each balancing authority to determine what
portion of the Interconnection's time error that it alone caused.
24. Under the WECC ATEC methodology, each balancing authority in
the Western Interconnection is required to calculate its ``primary
inadvertent interchange'' \25\ and enter its ``primary inadvertent
interchange'' into its Area Control Error (ACE) \26\ equation. When all
balancing authorities input their portion of ``primary inadvertent
interchange'' into their ACE equation, they continuously correct for
their own ``primary time error'' and, in turn, reduce the Western
Interconnection's total time error.
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\25\ The balancing authority causing the frequency error is said
to have created ``primary time error'' and caused ``primary
inadvertent interchange.'' The other balancing authorities in the
Interconnection responding to correct system frequency are said to
have created ``secondary time error'' and caused ``secondary
inadvertent interchange.''
\26\ ACE is the instantaneous difference between a Balancing
Authority's net actual and scheduled interchange, taking into
account the effects of Frequency Bias and correction for meter error
(NERC glossary of terms used in reliability standards, https://www.nerc.com/docs/standards/rs/Glossary_2009April20.pdf, at 1).
More specifically: ACE = (NIA - NIS)-
10[beta]i(FA - FS)-T0b +
IME (Requirement R1 of Commission Approved Standard BAL-
001-0.1a, see https://www.nerc.com/docs/standards/sar/Interpretation_WECC_ATEC_BAL-001and003_BOT-Approved_23Oct07.pdf).
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25. This process differs from the methodology used in NERC's BAL-
004-1, in that ATEC is designed to place the responsibility to correct
primary time error on the balancing authority that causes it. Further,
the regional Reliability Standard is more stringent and covers matters
not addressed by the related continent-wide NERC Reliability Standards
BAL-004-0 and BAL-006-1. The regional Reliability Standard provides for
automatic correction of time error, using a more refined primary
inadvertent interchange term than that included in the continent-wide
NERC Reliability Standards for manual correction of time error.\27\
Accordingly, the Commission finds that the regional Reliability
Standard proposed by WECC is more stringent than the continent-wide
NERC Reliability Standard, because it provides for continuous capture
of inadvertent interchange, and thereby (1) contributes to better
operation of balancing authorities by operators, and (2) ensures that
discrepancies between a balancing area's net scheduled interchange and
its net actual interchange are adjusted more quickly and accurately.
Pursuant to section 215(d) of the FPA, the Commission approves BAL-004-
WECC-01 as just, reasonable, not unduly discriminatory or preferential
and in the public interest.
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\27\ NERC filing at 10.
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26. As a separate matter, pursuant to section 215(d)(5) of the FPA,
the Commission directs WECC to develop, pursuant to its regional
Reliability Standards Development Procedure, modifications to BAL-004-
WECC-01 to address the Commission's specific concerns, as discussed
below. Further, the Commission approves some of the proposed violation
risk factors and violation severity levels, and directs the ERO to
submit a filing within 60 days of the effective date of this Final Rule
revising other specified violation risk factors and another filing
within 120 days of the effective date of this Final Rule providing
violation severity levels
[[Page 25426]]
for each Requirement and sub-Requirement that has been assigned a
violation risk factor.
A. Requirement R1.2
27. Requirement R1.2 of BAL-004-WECC-01 provides in part, ``[l]arge
accumulations of primary inadvertent [energy] point to an invalid
implementation of ATEC, loose control, metering or accounting errors. A
[balancing authority] in such a situation should identify the source of
the error(s) and make the corrections.'' In the NOPR, the Commission
noted that the phrases ``large accumulation'' and ``in such a
situation'' are not defined and, while likely obvious in many
circumstances, leaves to individual interpretation when a ``large''
amount of primary inadvertent has accumulated.\28\ The Commission
proposed to direct WECC to develop revisions to the provision so that a
balancing authority will know with specificity the circumstances that
trigger the actions required by Requirement R1.2.
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\28\ NOPR at P 36.
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1. Comments
28. WECC acknowledges the Commission's concern that the undefined
phrases ``large accumulation'' and ``in such a situation'' in
Requirement R1.2 could lead to uncertainty among Balancing Authorities
as to when they are required to take action. WECC comments that, while
these terms have a general industry understanding within the Western
Interconnection, clarifying these terms would remove the potential for
controversy over compliance requirements. WECC suggests either defining
the terms within the regional Reliability Standard or modifying the
standard language to better identify specific parameters that would
trigger actions required under this standard.
29. NERC agrees that further clarity of the identified phrases in
Requirement R1.2 is appropriate and believes WECC's proposal in its
comments is responsive.
2. Commission Determination
30. As we explained in the NOPR, the Commission is concerned that
the phrases ``large accumulation'' and ``in such a situation'' as used
in Requirement R1.2 leave to individual interpretation when a ``large''
amount of primary inadvertent has accumulated. The ERO and WECC agree
that the provision could benefit from further clarity. Accordingly, the
Commission adopts its NOPR proposal and directs WECC to develop
revisions to the provision so that a balancing authority will know with
specificity the circumstances that trigger the actions required by
Requirement R1.2.
B. Explanation of 24-Hour Exemption Period of Requirement R2
31. Requirement R2 of BAL-004-WECC-01 provides that ``[e]ach
[balancing authority] while synchronously connected to the Western
Interconnection will be allowed to have ATEC out of service for a
maximum of 24 hours per calendar quarter, for reasons including
maintenance and testing.'' In the NOPR, the Commission proposed to
direct WECC to develop a modification that clarifies whether the
``maximum of 24 hours per calendar quarter'' refers to a single
occurrence of up to 24 hours in the calendar quarter, or whether
several occurrences are permitted as long as they add up to 24 hours or
less within a calendar quarter.\29\
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\29\ NOPR at P 37.
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1. Comments
32. WECC comments that it intended the 24-hour per calendar quarter
limit to permit an accumulated total of up to 24 hours, whether
resulting from one extended occurrence or multiple occurrences.
Likewise, NERC understands that WECC intended the provision to permit
an accumulated total of up to 24 hours from one or more occurrences.
33. WECC and NERC agree the proposed NOPR modifications will leave
the regional Reliability Standard more definite and can be addressed
through WECC's stakeholder process.
2. Commission Determination
34. Consistent with the NOPR, pursuant to section 215(d)(5) of the
FPA, the Commission directs WECC to develop a modification to the
regional Reliability Standard consistent with WECC's and NERC's
explanation that the limit set forth in Requirement 2 of ``24 hours per
calendar quarter'' is an accumulated total for the period, resulting
from either a singular event or a cumulative time limit from a number
of events.
C. New Glossary Definitions
35. As mentioned above, the WECC regional Reliability Standard
includes three new definitions: Automatic Time Error Correction,
Primary Inadvertent Interchange and Secondary Inadvertent Interchange.
In the NOPR, the Commission proposed to approve the three new
terms.\30\
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\30\ NOPR at P 26. While the Commission discussed the proposed
definitions in several places in the NOPR, in one instance the
Commission stated that it proposed to ``accept three related
definitions for inclusion in the NERC Reliability Standards Glossary
(NERC glossary).'' Id. P 2. In other instances, the Commission
simply stated that it proposed to approve the definitions. Id. P 26,
34.
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1. Comments
36. Consumers expresses concern regarding the incorporation of
three newly defined terms (Automatic Time Error Correction, Primary
Inadvertent Interchange and Secondary Inadvertent Interchange) into the
NERC glossary. Consumers states that it is appropriate for the three
new definitions to apply to WECC regional Reliability Standards.
However, according to Consumers, the definitions have not been vetted
through NERC's full development process for their inclusion in the NERC
glossary, applicable to NERC Reliability Standards that apply on a
continent-wide basis. Specifically, Consumers points out that NERC's
Rules of Procedure provide that all definitions must be approved in
accordance with the standards process.\31\ Consumers recommends that
the Commission either clearly designate the proposed definitions as
being applicable only to WECC regional Reliability Standards or direct
NERC to submit the proposed definitions for stakeholder review as part
of the NERC Reliability Standards development process.
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\31\ Consumers Comments at 4, citing NERC Rules of Procedure,
section 300 and Appendix 3A (NERC Reliability Standards Development
Procedure) at 8.
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2. Commission Determination
37. The Commission agrees with Consumers that the three new
definitions have not been vetted through the ERO's full development
process for their inclusion in the NERC glossary; and that the three
new definitions approved in this Final Rule apply only to WECC regional
Reliability Standards. NERC should designate them accordingly.
Therefore, to ensure that all approved definitions, NERC and regional,
are maintained in a single location, NERC should add or append the
three new regional definitions to the NERC Glossary of Terms in such a
way as to designate that they apply only in the Western
Interconnection.
38. The Commission, however, has a general concern regarding the
development of definitions that apply only to regional Reliability
Standards. The Commission understands that, prior to NERC's development
of the ``Version 0'' Reliability Standards, there were multiple
regional standards and protocols, with each region having its own
definitions of terms. In some instances, the same or similar terms were
defined differently within different
[[Page 25427]]
regions. The Version 0 process included developing the NERC glossary,
which eliminated many inconsistencies in terminology across regions and
created a single source for defining terms used in Reliability
Standards.
39. We are concerned about a potential re-proliferation of regional
terminology, and consequently, the need to prevent possible
inconsistent use of terminology among regions. While NERC has only
submitted WECC regional Reliability Standards to the Commission at this
time, other regions are in the process of developing regional
standards. Similar to our policy set forth in Order No. 672 that favors
the development of uniform Reliability Standards,\32\ the Commission
believes NERC, as a rule, should develop definitions that apply
uniformly across the different interconnections. As a general goal,
NERC should work to minimize the use of regional definitions and
terminology and, assure that proposed regional definitions and
terminology are as well defined as, do not conflict and are not
redundant with nor redefine, NERC glossary definitions. We therefore
direct NERC to develop in its Rules of Procedure, a methodology for
organizing and managing regional definitions and terminology consistent
with the principles discussed above.
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\32\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 290 (``The
Commission believes that uniformity of Reliability Standards should
be the goal and the practice, the rule rather than the exception.
Greater uniformity will encourage best practices, thereby enhancing
reliability and benefiting consumers and the economy'').
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40. Further, NERC should be vigilant to assure that a regional
definition is consistent with both NERC definitions and the approved
terms used in other regions. The Commission considers an inconsistency
or conflict in terms to be reasonable grounds to remand a regional
definition and, if appropriate, the regional Reliability Standard that
employs that definition.
D. Consistency With NERC Reliability Standards
1. Comments
41. Xcel comments that, while it generally supports the adoption of
BAL-004-WECC-01, it is concerned that the regional Reliability Standard
creates a potential conflict with two NERC Reliability Standards, BAL-
001-0a (Real Power Balancing Control Performance) and BAL-002-0
(Disturbance Control Performance). Xcel requests that the Commission
establish priority for compliance in the event that WECC regional
Reliability Standards conflict with those of NERC. Xcel's concern
involves the difference in the ACE equation between the regional and
the NERC Reliability Standards and the compliance elements regarding
this equation.
42. Xcel states that BAL-001-0a requires that ACE be kept within
specific parameters, while BAL-004-WECC-01 requires a measurement of
ACE that is outside those parameters to be maintained at all times.
According to Xcel, BAL-004-WECC-01 requires ATEC operation at all times
except up to 24 hours per calendar quarter, but is not clear if this
period covers times when complying with BAL-001-0a requires non-
compliance with BAL-004-WECC-01. Xcel notes that Requirement R3 of BAL-
004-WECC-01 requires the ACE used for NERC reports to be the same as
the ACE used in the current AGC operating mode. According to Xcel, this
requires the use of the ACEATEC set forth in BAL-004-WECC-01
rather than the BAL-001-0a ACE equation in most situations.
43. Xcel claims that BAL-004-WECC-01 may also conflict with BAL-
002-0 Requirement R4.2, which requires that the balancing authority
restore ACE to specified parameters within a defined timeframe. Xcel
posits that in most situations it will be impossible for an entity
attempting to recover from a disturbance to operate at an ACE
calculated in accordance with the NERC standard and ACEATEC
simultaneously. According to Xcel, the use of the BAL-004-WECC-01,
Requirement R2 exception, allowing ATEC to be out of service for 24
hours per calendar quarter, should be acceptable for alleviating this
circumstance. Xcel contends that, where the 24-hour maximum is exceeded
for the purpose of ACE complying with BAL-002-0, the balancing
authority should be given express authority to deviate from the
requirements of BAL-004-WECC-01.
2. Commission Determination
44. We are not persuaded by Xcel's comments on this matter. We
believe that our approval, in Order No. 713,\33\ of an ERO
interpretation addresses Xcel's concern. Specifically, WECC requested
that the ERO provide a formal interpretation whether the use of WECC's
automatic time error correction factor that is applied to the net
interchange portion of the ACE equation violates Requirement R1 of NERC
Reliability Standard BAL-001-0a. In response, the ERO interpreted BAL-
001-0 Requirement R1 as follows:
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\33\ Modification of Interchange and Transmission Loading Relief
Reliability Standards; and electric Reliability Organization
Interpretation of specific Requirements of Four Reliability
Standards, Order No. 713, 73 FR 43613, 124 FERC ] 61,071 (July 21,
2008).
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The [WECC automatic time error correction or WATEC]
procedural documents ask Balancing Authorities to maintain raw ACE for
[control performance standard or CPS1 \34\] reporting and to control
via WATEC-adjusted ACE.
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\34\ The Control Performance Standard (CPS) is defined in the
NERC Glossary as ``[t]he reliability standard that sets the limits
of a Balancing Authority's Area Control Error over a specified time
period.''
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As long as Balancing Authorities use raw (unadjusted for
WATEC) ACE for CPS reporting purposes, the use of WATEC for control is
not in violation of BAL-001 Requirement 1.\35\
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\35\ Order No. 713, 124 FERC ] 61,071 at P 17.
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45. The Commission-approved interpretation makes clear that a
balancing authority is in compliance with BAL-001-1a provided that it
uses the equation identified in R1 for reporting CPS1 and achieves the
performance required by CPS1. The balancing authority's ability to use
the ACE calculation also to assist in time error correction and
inadvertent interchange payback is not precluded.
46. Further, the Commission is not persuaded by Xcel's claims that
BAL-004-WECC-01 may also conflict with BAL-002-0, Requirement R4.2,
which requires that the balancing authority restore ACE to specified
parameters within a defined timeframe. Requirements R2 and R3 of
Standard BAL-004-WECC-0 direct that ATEC will be the primary operating
mode used by all balancing authorities in the WECC region. However,
balancing authorities may modify their ACE operating mode to account
for various operating situations, including the need to respond to
meeting the Disturbance Recovery Criterion within the Disturbance
Recovery Period in Requirement R4.2 of BAL-002-0.\36\
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\36\ R4.2 provides that ``[t]he default Disturbance Recovery
Period is 15 minutes after the start of a Reportable Disturbance,''
but further states that ``[t]his period may be adjusted to better
suit the needs of an Interconnection based on analysis approved by
the NERC Operating Committee.''
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47. Nor does the Commission agree with Xcel's concern about the 24-
hour per quarter ATEC operating mode exception period. Giving due
consideration to the Western Interconnection's participants, the
Commission finds that a 24-hour per quarter ATEC operating mode
exception period encourages the Western Interconnection's balancing
authorities to maintain a high standard of operations to support the
reliability of the Western Interconnection.
[[Page 25428]]
48. Consequently, the Commission is not persuaded by Xcel's
comments. As discussed above, the ERO and the Commission have
previously addressed the issue raised by Xcel, and the Commission does
not believe that remand or further clarification is warranted.
E. Violation Risk Factors
49. In the NOPR, the Commission proposed to direct that the
violation risk factors assigned to BAL-004-WECC-01, Requirements R1,
R2, R3, and R4 be modified from ``lower'' to ``medium.'' \37\ The
Commission explained that the participation in an interconnection's
time error correction is critical and can directly affect the state of
the Bulk-Power System.\38\ Further, the Commission explained that the
assignment of a ``medium'' violation risk factor to the Requirements of
the WECC regional Reliability Standard would make it consistent with
the assignment of ``medium'' violation risk factors to NERC Reliability
Standard BAL-004-0.
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\37\ NOPR at P 44-47.
\38\ Id. P 46.
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1. Comments
50. WECC comments that, while it is unlikely that a violation of
the regional Reliability Standard would lead to Bulk-Power System
instability, it acknowledges that ATEC is not administrative in nature
and could affect the electrical status of the Bulk-Power System making
a `Medium' VRF more appropriate. Thus, WECC comments that ``it does not
disagree'' with the Commission's proposal to change the violation risk
factors from low to medium. NERC also agrees that the Commission's
proposal would promote consistency.
2. Commission Determination
51. We adopt our NOPR proposal and direct that the violation risk
factors assigned to BAL-004-WECC-01, Requirements R1, R2, R3, and R4 be
modified from ``lower'' to ``medium.'' The ERO and WECC must submit a
filing within 60 days of the effective date of this Final Rule that
includes the directed modifications.
F. Violation Severity Levels
52. The ERO's July 2008 filing of the WECC regional Reliability
Standard included proposed violation severity levels that apply
generally to all violations of the Requirements of BAL-004-WECC-01 and
not to any one specific Requirement. In the NOPR, the Commission
proposed to direct the submission of new violation severity levels for
each Requirement and sub-Requirement that has been assigned a violation
risk factor.\39\
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\39\ NOPR at P 49. We note that, in Version Two Facilities
Design, Connections and Maintenance Reliability Standards, Order No.
722, 126 FERC ] 61,255 at P 45 (2009), the ERO proposed to develop
violation severity levels for Requirements but not sub-Requirements.
The Commission denied the proposal as ``premature'' and, instead,
encouraged the ERO to ``develop a new and comprehensive approach
that would better facilitate the assignment of violation severity
levels and violation risk factors.''
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1. Comments
53. WECC comments that the Commission's and NERC's guidance on the
development of violation severity levels has evolved since the drafting
of the violation severity levels for BAL-004-WECC-1. WECC indicates
that it will develop violation severity levels for each Requirement and
sub-Requirement of the regional Reliability Standard, and requests that
the Commission allow sufficient time to address the issue through the
WECC stakeholder process.
2. Commission Determination
54. The Commission adopts its NOPR proposal and directs the ERO and
WECC to submit violation severity levels for each Requirement and sub-
Requirement that has been assigned a violation risk factor. To allow
adequate time for the development of the violation severity levels, the
ERO and WECC must submit a filing within 120 days of the effective date
of this Final Rule that includes the directed violation severity
levels.
III. Information Collection Statement
55. The Office of Management and Budget (OMB) regulations require
that OMB approve certain reporting and recordkeeping (collections of
information) imposed by agency rules.\40\ The information contained
here is also subject to review under section 3507(d) of the Paperwork
Reduction Act of 1995.\41\ Upon approval of a collection(s) of
information, OMB will assign an OMB control number and an expiration
date. Respondents subject to the filing requirements of an agency rule
will not be penalized for failing to respond to these collections of
information unless the collections of information display a valid OMB
control number.
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\40\ 5 CFR 1320.11.
\41\ 44 U.S.C. 3507(d).
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56. This Final Rule approves and requires modifications of one
regional Reliability Standard that was submitted by NERC as the ERO.
Section 215 of the FPA authorizes the ERO to submit Reliability
Standards to provide for the reliable operation of the Bulk-Power
System. Pursuant to the statute, the ERO must submit each Reliability
Standard that it proposes to be made effective to the Commission for
approval.\42\
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\42\ See 16 U.S.C. 824(d).
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57. The regional Reliability Standard, which applies to
approximately 35 balancing authorities in the U.S. portion of the
Western Interconnection, does not require balancing authorities to file
information with the Commission. It does require balancing authorities
to develop and maintain certain information for a specified period of
time, subject to inspection by WECC. However, the Commission does not
believe that approval of the WECC regional Reliability Standard will
result in an increase in reporting burdens as compared to current
practices in WECC. As NERC indicates, since 2003, WECC has used the
automatic time error correction practice set forth in BAL-004-WECC-01.
Thus, the Commission finds that the requirement to develop and maintain
information in the regional Reliability Standard mirrors customary and
usual business practice in the area in which the Standard will apply
and, therefore, imposes a minimal burden on applicable balancing
authorities and eliminates any possible confusion between current
industry practice and the standard. The Commission also finds that the
modifications to the current Reliability Standard effected by this
Final Rule will not increase the reporting burden nor impose any
additional information collection requirements.
58. In response to the NOPR, the Commission received no comments
concerning its determination with respect to the burden and costs and
therefore uses the same affirmation here.
Title: Western Electricity Coordinating Council Regional
Reliability Standard Regarding Automatic Time Error Correction.
Action: Final Rule.
OMB Control No.: 1902-0244.
Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
Frequency of Responses: On occasion.
Necessity of the Information: This Final Rule approves and requires
modification to one regional Reliability Standard that pertains to
automatic time error correction in the Western Interconnection. The
Final Rule finds the Reliability Standard to be just, reasonable, not
unduly discriminatory or preferential, and in the public interest.
59. Interested persons may obtain information on the reporting
requirements by contacting: Federal
[[Page 25429]]
Energy Regulatory Commission, Attn: Michael Miller, Office of the
Executive Director, 888 First Street, NE., Washington, DC 20426, Tel:
(202) 502-8415, Fax: (202) 273-0873, E-mail: michael.miller@ferc.gov,
or by contacting: Office of Information and Regulatory Affairs, Attn:
Desk Officer for the Federal Energy Regulatory Commission (Re: OMB
Control No. 1902-0244), Washington, DC 20503, Tel: (202) 395-4650, Fax:
(202) 395-7285, E-mail: oira_submission@omb.eop.gov.
IV. Environmental Analysis
60. 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.\43\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. Included in the exclusion are rules that are clarifying,
corrective, or procedural or that do not substantially change the
effect of the regulations being amended.\44\ The actions proposed
herein fall within this categorical exclusion in the Commission's
regulations.
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\43\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
\44\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act
61. The Regulatory Flexibility Act of 1980 (RFA) \45\ generally
requires a description and analysis of Final Rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and that minimize
any significant economic impact on a substantial number of small
entities. The Small Business Administration's Office of Size Standards
develops the numerical definition of a small business. (See 13 CFR
121.201.) For electric utilities, a firm is small if, including its
affiliates, it is primarily engaged in the transmission, generation
and/or distribution of electric energy for sale and its total electric
output for the preceding twelve months did not exceed four million
megawatt hours.
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\45\ 5 U.S.C. 601-12.
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62. As noted above, the regional reliability standard would apply
to about 35 balancing areas in the Western Interconnection. The
Commission estimates that of these balancing areas, approximately two
to four qualify as small entities, because the total electric output of
each of these entities for the preceding twelve months did not exceed
four million megawatt hours. Thus, few small entities are impacted by
the proposed rule.
63. Based on this understanding, the Commission certifies that this
Final Rule will not have a significant economic impact on a substantial
number of small entities. Accordingly, no regulatory flexibility
analysis is required.
VI. Document Availability
64. 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 (https://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, NE., Room 2A, Washington, DC 20426.
65. 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.
66. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or e-mail at
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional Notification
67. The Reliability Standard approved in this Final Rule is
effective June 29, 2009. The Commission has determined, with the
concurrence of the Administrator of the Office of Information and
Regulatory Affairs of OMB, that this rule is not 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, Electric utilities, Reporting and recordkeeping
requirements.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E9-12351 Filed 5-27-09; 8:45 am]
BILLING CODE 6717-01-P
