Planning Resource Adequacy Assessment Reliability Standard, 66038-66046 [2010-27132]
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
FOR FURTHER INFORMATION CONTACT:
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM10–10–000]
Planning Resource Adequacy
Assessment Reliability Standard
Issued October 21, 2010.
Federal Energy Regulatory
Commission, DOE.
ACTION: Notice of proposed rulemaking.
AGENCY:
Under section 215(d)(2) of the
Federal Power Act (FPA), the Federal
Energy Regulatory Commission
proposes to approve a regional
Reliability Standard, BAL–502–RFC–02,
Planning Resource Adequacy Analysis,
Assessment and Documentation,
developed by ReliabilityFirst
Corporation (RFC) and submitted to the
Commission by the North American
Electric Reliability Corporation (NERC).
The proposed regional Reliability
Standard requires planning coordinators
within the RFC geographical footprint to
analyze, assess and document resource
adequacy for load in the RFC footprint
annually, to utilize a ‘‘one day in ten
year’’ loss of load criterion, and to
document and post load and resource
capability in each area or transmissionconstrained sub-area identified.
DATES: Comments are due December 27,
2010.
ADDRESSES: You may submit comments,
identified by docket number and in
accordance with the requirements
posted on the Commission’s Web site,
https://www.ferc.gov. Comments may be
submitted by any of the following
methods:
• Electronic Submission: Documents
created electronically using word
processing software should be filed in
native applications or print-to-PDF
format, and not in a scanned format, at
https://www.ferc.gov/docs-filing/
efiling.asp.
• Mail/Hand Delivery: Commenters
unable to file comments electronically
must mail or hand deliver an original
copy of their comments to: Federal
Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street, NE., Washington, DC 20426.
These requirements can be found on the
Commission’s Web site, see, e.g., the
‘‘Quick Reference Guide for Paper
Submissions,’’ available at https://
www.ferc.gov/docs-filing/efiling.asp, or
via phone from FERC Online Support at
202–502–6652 or toll-free at 1–866–
208–3676.
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SUMMARY:
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Karin L. Larson (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–8236.
Scott Sells (Technical Information),
Office of Electric Reliability, Division
of Policy Analysis and Rulemaking,
Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502–
6664.
SUPPLEMENTARY INFORMATION:
Notice of Proposed Rulemaking
1. Under section 215(d)(2) of the
Federal Power Act (FPA), the Federal
Energy Regulatory Commission
proposes to approve a regional
Reliability Standard BAL–502–RFC–02
(Planning Resource Adequacy Analysis,
Assessment and Documentation),
developed by ReliabilityFirst
Corporation (RFC) and submitted to the
Commission by the North American
Electric Reliability Corporation (NERC).
The proposed regional Reliability
Standard requires planning coordinators
within the RFC geographical footprint to
analyze, assess and document resource
adequacy for load in the RFC footprint
annually, to utilize a ‘‘one day in ten
year’’ loss of load criterion, and to
document and post load and resource
capability in each area or transmissionconstrained sub-area identified.
I. Background
A. Mandatory Reliability Standards
2. Section 215 of the FPA requires a
Commission-certified Electric
Reliability Organization (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.1 In July
2006, the Commission certified NERC as
the ERO.2
3. Reliability Standards that the ERO
proposes to the Commission may
include Reliability Standards that are
developed by a Regional Entity.3 A
Regional Entity is an entity that has
been approved by the Commission to
enforce Reliability Standards under
delegated authority from the ERO.4 In
1 See
16 U.S.C. 824o(e)(3).
American Electric Reliability Corp., 116
FERC ¶ 61,062 (ERO Certification Order), order on
reh’g and compliance, 117 FERC ¶ 61,126 (2006),
aff’d sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342
(D.C. Cir. 2009).
3 16 U.S.C. 824o(e)(4).
4 Id. at 824o(a)(7) and (e)(4).
2 North
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Order No. 672, the Commission urged
uniformity of Reliability Standards, but
recognized a potential need for regional
differences.5 Accordingly, the
Commission stated that:
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 under 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.6
4. Consistent with section 215 of the
FPA, the Commission will approve
proposed regional Reliability Standard
BAL–502–RFC–02 if the Commission
finds it is just, reasonable, not unduly
discriminatory or preferential, and in
the public interest.
B. ReliabilityFirst
5. On April 19, 2007, the Commission
approved delegation agreements
between NERC and eight Regional
Entities.7 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 RFC as a Regional Entity and
accepted RFC’s Standards Development
Manual which sets forth the process for
RFC’s development of regional
Reliability Standards.8 The RFC region
is a less than interconnection-wide
region that covers all or portions of 14
states and the District of Columbia.
II. RFC Regional Reliability Standard
BAL–502–RFC–02
6. On December 14, 2009, NERC
submitted for Commission approval, in
accordance with section 215(d)(1) of the
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, at P 290; order on reh’g,
Order No. 672–A, FERC Stats. & Regs. ¶ 31,212
(2006).
6 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 291.
7 See North American Electric Reliability Corp.,
119 FERC ¶ 61,060, at P 316–350 (Delegation
Agreement Order), order on reh’g, 120 FERC
¶ 61,260 (2007).
8 Id. P 339 (clarifying that the RFC Standards
Development Manual embodies ‘‘rules’’ which are
subject to NERC approval and, if approved by
NERC, Commission approval).
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
FPA,9 regional Reliability Standard
BAL–502–RFC–02 and four associated
new definitions.10 The stated purpose of
regional Reliability Standard BAL–502–
RFC–02 is to establish common criteria,
based on ‘‘one day in ten year’’ loss of
load expectation principles, for the
analysis, assessment and documentation
of resource adequacy in the RFC
region.11 NERC states that the proposed
regional Reliability Standard establishes
requirements for planning coordinators
in the RFC region regarding resource
adequacy assessment, which subject
matter is not currently addressed in
NERC’s continent-wide Reliability
Standards.12
7. Proposed regional Reliability
Standard BAL–502–RFC–02 contains
two Requirements, which are applicable
to each planning coordinator within the
RFC footprint.13 Requirement R1
requires each planning coordinator to
perform and document an annual
resource adequacy analysis.14 The seven
Sub-requirements define the criteria to
be used for the resource adequacy
analysis. Sub-requirement R1.1 sets
forth the ‘‘one day in ten year’’ criteria
to be used to calculate the planning
reserve margin. Sub-requirement R1.2
specifies the planning years to be
studied. Sub-requirement R1.3 defines
system characteristics to be included in
the analysis. Sub-requirements R1.4 and
R1.5 require the consideration of
resource availability and transmission
outage plans. Sub-requirements R1.6
and R1.7 require documentation that
capacity resources and load were
properly accounted for in the analysis.
Requirement R2 requires each planning
coordinator to annually document the
projected load and resource capability
for each area and transmission
9 16
U.S.C. 824o.
Petition for Approval of Proposed RFC
Regional Reliability Standard BAL–502–RFC–02,
Docket No. RM10–10–000 (Dec. 14, 2009) (Petition).
11 NERC Petition at 7.
12 Id. at 7. NERC notes that it has a pending
continent-wide project, Project 2009–05, Resource
Adequacy Assessments, that is intended to address
resource adequacy assessments. This NERC project
has a targeted completion date of third quarter
2011.
13 According to the RFC April 16, 2010
organization registration (available at https://
rfirst.org/Compliance/Registration.aspx), there are
four registered planning coordinators in the RFC
region, each of which is a RFC member. See RFC’s
January 11, 2010 list of member companies by
sector, available at https://rfirst.org/MiscForms/
AboutUs/Membership.aspx. The four registered
planning coordinators are American Transmission
Co., LLC; International Transmission Company (ITC
Transmission); Midwest Independent Transmission
System Operator, Inc. (Midwest ISO); and PJM
Interconnection, LLC (PJM).
14 NERC notes that the proposed Reliability
Standard does not require the building or
acquisition of new generating capacity. See NERC
Petition at 9.
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10 NERC
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constrained sub-area identified in the
analysis. Sub-requirements R2.1 through
R2.3 set forth the specific
documentation requirements. Each of
the main Requirements (R1 and R2) are
assigned a violation risk factor (VRF)
and violation severity level (VSL).
However, RFC did not assign VRFs or
VSLs to the Sub-requirements.
8. NERC also proposes to add the
following four new definitions, which
would be applicable in the RFC region
only:
Resource Adequacy: The ability of supplyside and demand-side resources to meet the
aggregate electrical demand (including
losses).
Net Internal Demand: Total of all end-use
customer demand and electric system losses
within specified metered boundaries, less
Direct Control Load Management and
Interruptible Demand.
Peak Period: A period consisting of two (2)
or more calendar months but less than seven
(7) calendar months, which includes the
period during which the responsible entity’s
annual peak demand is expected to occur.
Year One: The planning year that begins
with the upcoming annual Peak Period.
NERC states that these four terms do
not presently appear in the NERC
Glossary of Terms Used in Reliability
Standards (Glossary) and they do not
conflict with existing terms.15
9. NERC states that on February 24,
2009, RFC submitted the proposed
Reliability Standard to NERC for
evaluation and approval. On April 17,
2009, NERC provided RFC its evaluation
of BAL–502–RFC–02 which highlighted
several concerns regarding the proposed
standard. NERC’s concerns included: (1)
Missing time horizons, (2) effective date
not meeting NERC’s template language,
(3) complex sub-requirements, (4) the
addition of new defined terms, (5) the
assignment of VRFs and VSLs only to
the Reliability Standard’s two main
Requirements and not the subrequirements, and (6) technical clarity.
On June 8, 2009, RFC submitted a
response to NERC addressing NERC’s
concerns.
10. NERC concludes that the proposed
RFC regional Reliability Standard
addresses matters not currently covered
in a continent-wide NERC Reliability
Standard and thus meets the
Commission’s criteria for consideration
of a regional Reliability Standard. NERC
asserts that the proposed regional
Reliability Standard satisfies all of the
criteria set forth in Order No. 672 that
the Commission applies to determine
whether a proposed Reliability Standard
is just, reasonable, not unduly
15 The NERC Glossary (updated Apr. 20, 2010) is
available at https://www.nerc.com/docs/standards/
rs/Glossary_of_Terms_2010April20.pdf.
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66039
discriminatory or preferential and in the
public interest.16 As such, NERC
requests approval of proposed regional
Reliability Standard BAL–502–RFC–02
and the related definitions.
III. Discussion
11. As discussed below, the
Commission proposes to approve BAL–
502–RFC–02. The proposed regional
Reliability Standard will improve the
reliable operation of the Bulk-Power
System by ensuring use in the RFC
region of a common criterion, the ‘‘one
day in ten year’’ principle, to assess
resource adequacy during the planning
horizon. The Commission also proposes
to accept the four related definitions for
inclusion in NERC’s Glossary for use
with RFC’s regional Reliability
Standards.17 The Commission further
proposes to defer discussion on the
proposed VRFs and VSLs for the
regional Reliability Standard.
12. Proposed regional Reliability
Standard BAL–502–RFC–02 is ‘‘more
stringent’’ in that NERC’s continentwide standards currently do not address
assessment of Resource Adequacy in the
planning horizon. The Commission
notes the current continent-wide
Reliability Standard TOP–002–2a,
Requirement R7 requires Balancing
Authorities to plan to meet capacity and
energy reserve requirements, including
the deliverability/capability for any
single contingency.18 Reliability
Standard TOP–002–2 ensures that
resources and operational plans are in
place to enable system operators to
maintain the Bulk-Power System in a
reliable state.19 Thus Reliability
Standard TOP–002–2 is a continentwide Reliability Standard that addresses
requirements for reserves during the
operations timeframe whereas proposed
regional Reliability Standard BAL–502–
RFC–02 addresses the assessment of
resource adequacy (or planning
reserves) during the planning
timeframe. If NERC develops a
continent-wide Reliability Standard that
addresses assessment of resource
adequacy in the planning horizon and
such Reliability Standard is approved
by the Commission, RFC should
16 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 323–337.
17 NERC’s Glossary lists each term that has been
defined for use in one or more of NERC’s continentwide or regional Reliability Standards.
18 Reliability Standard TOP–002–2a, Requirement
R7.
19 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs.
¶ 31,242, at P 1590, order on reh’g, Order No. 693–
A, 120 FERC ¶ 61,053 (2007). See also the Notice
of Proposed Rulemaking, Docket No. RM06–16–000,
FERC Stats. & Regs., Proposed Regulations 2004–
2007, ¶ 32,608 (2006) (Order No. 693 NOPR).
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
reevaluate the continuing need for
regional Reliability Standard BAL–502–
RFC–02.
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A. Order No. 672 Criteria
13. Order No. 672 provides that a
Reliability Standard must be designed to
achieve a specified reliability goal and
must contain a technically sound means
to achieve this goal.20 Likewise, the
Reliability Standard should be based on
actual data and lessons learned from
actual operations.21 According to NERC
and RFC, proposed regional Reliability
Standard BAL–502–RFC–02 is clear and
unambiguous regarding what is required
and who is required to comply
(planning coordinator). NERC and RFC
also state that BAL–502–RFC–02 has
clear and objective measures for
compliance and achieves a reliability
goal (namely, providing a common
framework for resource adequacy
analysis, assessment, and
documentation) effectively and
efficiently. Based on the Commission’s
understanding of the proposed regional
Reliability Standard, explained below,
the Commission believes that BAL–502–
RFC–02 satisfies the Order No. 672
criteria.
B. RFC’s Proposed Resource Adequacy
Reliability Standard Requirements
14. Proposed regional Reliability
Standard BAL–502–RFC–02 requires
planning coordinators to perform an
annual Resource Adequacy analysis and
calculate a planning reserve margin that
meets the ‘‘one day in ten year’’
criterion. The analysis must be
‘‘performed or verified separately’’ for (i)
Year One, (ii) for one year falling in the
second through fifth years, and
(iii) at least one year in the sixth
through tenth years.22 The regional
Reliability Standard further requires the
planning coordinators to calculate the
planning reserve margin by assessing
each of the integrated peak hours for
each day within the year being analyzed
to determine the probability that
generation and demand-side resources
cannot meet the demand during that
hour for that day (which would result in
a loss of load).23 The calculated
planning reserve margin is to be
expressed as a percentage of the median
forecast peak demand (not including
direct control load management and
interruptible demand). Regional
Reliability Standard BAL–502–RFC–02
states that this median forecast is
expected to have a 50 percent
probability that the projected load is too
high and 50 percent probability that the
projected load is too low.24 In order to
determine the appropriate load forecast,
the planning coordinators must consider
multiple factors including:
(i) Variability in the load forecast such
as weather and regional economic
forecasts, (ii) load diversity,
(iii) seasonal load variations, (iv) firm
load and (v) interruptible load including
contractual arrangements concerning
curtailable and/or interruptible
demand.25 In addition, the planning
coordinator must document that all load
in its area is accounted for in the
analysis.26
15. Further, the planning coordinator
must determine the probability of
resources that will be online and
available, determine the distribution of
the peak load for each day, and include
impacts of known transmission
limitations.27 To determine the
probability of available resources the
planning coordinator must consider
multiple factors. Such factors include:
(i) The historic resource performance,
(ii) seasonal resource ratings, (iii) firm
capacity purchases from and sales to
entities outside of the planning
coordinator area, (iv) resource planned
outage schedules, (v) deratings and
retirements, (vi) assumptions of
intermittent and energy limited
resources (such as wind and
cogeneration), (vii) criteria for including
planned resource additions,
(viii) availability and delivery of fuel,
(ix) common mode outages that affect
resource availability, (x) environmental
and regulatory restrictions of resources,
(xi) available demand response
programs, (xii) sensitivity to resource
outage rates, (xiii) extreme weather/
drought condition impacts on resource
availability, (xiv) assumptions for
emergency operation procedures in
order to make reserves available, and
(xv) uncommitted resources within the
planning coordinator area.28 Also, the
planning coordinator must document
that all capacity resources in the
planning coordinator area are
appropriately accounted for in the
analysis.29
16. The planning coordinator is also
required to consider the impacts of
transmission limitations that could
prevent the delivery of generation to the
24 See
20 Order
No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 324.
21 Id.
22 See proposed Reliability Standard BAL–502–
RFC–02, Requirement R1.2.
23 See id. at Requirement R1.1.
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id. at Requirement R1.1.2 n.2.
id. at Requirement R1.3.1.
26 See id. at Requirements R1.7.
27 See id. at Requirements R1.3.1, R1.3.2, and
R1.3.3.
28 See id. at Requirements R1.3.2 and R1.4.
29 See id. at Requirement R1.6.
25 See
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load including criteria for including
planned transmission facilities in the
study as well as transmission
maintenance outage schedules.30
Proposed regional Reliability Standard
BAL–502–RFC–02, Requirement R1.3.4
requires planning coordinators to
include in their assessment of
transmission limits assistance from
other interconnected systems including
multi-area assessment considering
transmission limitations into the study
area.
17. Overall, the Commission believes
that factors to be considered in the
resource adequacy analysis as set forth
in Requirement R1 and, as discussed
above, are a technically sound means to
set up the analysis for the probability of
not having enough resources in order to
meet demand and avoid loss of load.
However, the Commission questions or
seeks clarity on three details of the
resource adequacy analysis: (i) The loss
of load calculation, (ii) use of capacity
benefit margin; and (iii) meaning of
common mode outages.
18. Requirement R1.1 states that the
assessment shall calculate a planning
reserve margin that will result in the
sum of probabilities for loss of load for
each planning year equal to 0.1, or
comparable to ‘‘one day in ten years’’
when available capacity will not meet
the load. With respect to the loss of load
calculation, proposed regional
Reliability Standard BAL–502–RFC–02
specifically identifies two
circumstances that will not count in the
loss of load calculation: (1) Utilization
of direct control load management 31
and (2) curtailment of interruptible
load.32 Notwithstanding these two
exceptions to the loss of load
calculation, the Commission seeks
comment on how other actions that
could be taken by a system operator,
such as voltage reduction or other, nonvoluntary, types of load reduction plans,
would be modeled and documented in
this analysis.
19. With respect to the capacity
benefit margin, the Commission notes
that the requirements do not explicitly
state whether planning coordinators
may rely upon capacity benefit
30 See id. at Requirements R1.3.3, R1.3.3.1,
R1.3.3.2 and R1.5.
31 NERC defines direct control load management
(DCLM) as ‘‘Demand-Side Management that is under
the direct control of the system operator. DCLM
may control the electric supply to individual
appliances or equipment on customer premises.
DCLM as defined here does not include
Interruptible Demand.’’
32 NERC defines Interruptible Load as ‘‘Demand
that the end-use customer makes available to its
Load-Serving Entity via contract or agreements for
curtailment.’’
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
margin 33 to satisfy BAL–502–RFC–02’s
Requirements. During the standard
development posting period, RFC
received comments regarding potential
conflicts or lack of coordination
between BAL–502–RFC–02 and MOD–
004–1—Capacity Benefit Margin.34 The
Commission does not believe the
proposed regional Reliability Standard
is in conflict with the continent-wide
Reliability Standard, but does note there
could be some confusion regarding
whether capacity benefit margin could
or could not be used in order to meet
the Requirements of BAL–502–RFC–
02.35 Accordingly, we seek comment on
whether capacity benefit margin may be
used to satisfy BAL–502–RFC–02’s
Requirements.
20. With respect to Requirement R1.4,
which requires the resource adequacy
analysis to consider resource
availability characteristics including
‘‘common mode outages that affect
resource availability,’’ the Commission
seeks comment on whether planning
coordinators, when evaluating ‘‘common
mode outages that affect resource
availability’’ will consider only outages
within the generation facility, or if the
analysis will also include outages of
transmission facilities that would have
an impact on resource or generator
availability.
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C. Missing Time Horizons
21. NERC’s Petition notes its concern
that the proposed regional Reliability
Standard BAL–502–RFC–02 does not
identify time horizons for each
Requirement. Time horizons are used as
a factor in determining the size of a
sanction. If an entity violates a
Requirement and there is no time to
mitigate the violation because the
Requirement takes place in real-time,
then the sanction associated with the
33 The NERC Glossary defines capacity benefit
margin (CBM) as ‘‘the amount of firm transmission
transfer capability preserved by the transmission
provider for Load-Serving Entities (LSE), whose
loads are located on that Transmission Service
Provider’s system, to enable access by the LSEs to
generation from interconnected systems to meet
generation reliability requirements. Preservation of
CBM for an LSE allows that entity to reduce its
installed generating capacity below that which may
otherwise have been necessary without
interconnections to meet its generation reliability
requirements. The transmission transfer capability
preserved as CBM is intended to be used by the LSE
only in times of emergency generation deficiencies.’’
34 See NERC Petition, Exhibit C, comments from
ITC Transmission.
35 Reliability Standard MOD–004–1 addresses
capacity benefit margin, or a capacity preserved for
firm transmission transfer capability. Conversely,
the Requirements in proposed Reliability Standard
BAL–502–RFC–02 address an analysis regarding the
capability of generation to serve the projected load.
While capacity benefit margin could be a method
of meeting the requirements of BAL–502–RFC–02,
the two standards do not contradict each other.
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violation is higher than it would be for
violation of a Requirement that could be
mitigated over a longer period of time.36
According to NERC’s template for
Reliability Standards, each main
Requirement in a Reliability Standard
should be assigned one of the following
time horizons: (1) Long-Term Planning
(a planning horizon of one year or
longer), (2) Operations Planning
(operating and resource plans from dayahead up to and including seasonal),
(3) Same-day Operations (routine
actions required within the timeframe of
a day, but not real-time), (4) Real-time
Operations (actions required within one
hour or less to preserve the reliability of
the bulk electric system), and
(5) Operations Assessment (follow-up
evaluations and reporting of real time
operations).
22. According to NERC, time horizons
are used for compliance assessments as
described in NERC’s Sanctions
Guidelines.37 Time horizons are used
when determining the severity of a
violation risk factor and for determining
the penalty for a violation. RFC states
that it did not include time horizons
because its Reliability Standards
Development Procedure (RSDP) does
not include time horizons in its
template for Reliability Standards. The
RFC RSDP sets forth the required
elements of a Standard and includes a
Reliability Standard template. RFC’s
RSDP does not include ‘‘time horizons’’
as a required element.38 Thus, RFC
states that including time horizons in
BAL–502–RFC–02 would have been a
deviation from its Commissionapproved Standards template. RFC also
notes that ‘‘the standard focuses on
‘planning oriented’ subject matter for
one year and beyond,’’ and, as such, the
‘‘appropriate time horizons are relatively
straight forward.’’ 39
23. The Commission agrees with
NERC that it is important to identify the
time horizons for each Reliability
Standard. However, time horizons are
not critical to our determination of
whether to approve this proposed
Reliability Standard. As the
Commission has previously stated, the
‘‘most critical element of a Reliability
Standard is the Requirements.’’ 40
36 See NERC’s ‘‘Time Horizons’’ document,
available on NERC’s Web site at https://
www.nerc.com/files/Time_Horizons.pdf.
37 NERC Petition at 22.
38 RFC Reliability Standards Development
Procedure, at 3 (May 22, 2008) available at
https://www.rfirst.org/Documents/Standards/
Reliability%20Standards%20Developmental
%20Procedure.pdf.
39 NERC Petition at 24.
40 Order No. 693 NOPR, FERC Stats. & Regs.,
Proposed Regulations 2004–2007, ¶ 32,608 at p.
105.
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Moreover, the Commission notes that
with respect to proposed regional
Reliability Standard BAL–502–RFC–02,
the time horizon ‘‘Long-Term Planning’’
can be gleaned from the context of the
standard for the purpose of determining
the severity of a violation risk factor, or
for determining the penalty for a
violation. However, the Commission
notes that RFC currently is in the
process of modifying its RSDP such that
it will be required to use the most
current version of the approved NERC
Reliability Standard template when
developing a RFC regional Reliability
Standard.41 NERC’s ‘‘Template Guide for
New Standards,’’ ‘‘Template Quality
Review of Standards,’’ and ‘‘Time
Horizons’’ documents all call for the
inclusion of time horizons in new
Reliability Standards.42 Thus RFC’s
proposed change to its RSDP would
require RFC to tag each new Reliability
Standard Requirement with a time
horizon. We believe that the
identification of the appropriate time
horizon for each Requirement is useful
and improves clarity and consistency in
compliance assessments. Because RFC
appears to be moving toward requiring
the assignment of time horizons as part
of its standard drafting process, as well
as the benefits of assigning time
horizons, the Commission proposes to
direct RFC to add time horizons to the
two main Requirements when RFC
reviews regional Reliability Standard
BAL–502–RFC–02 in its scheduled fiveyear review.
D. Proposed Effective Date
24. Proposed regional Reliability
Standard BAL–502–RFC–02’s stated
effective date is ‘‘upon RFC Board
approval,’’ which occurred on December
4, 2008. NERC raises the concern that
‘‘[t]he effective date should follow the
latest language found in the [NERC]
standards template to meet the needs of
the compliance program.’’ 43 NERC’s
‘‘standards template’’ provides that the
effective date should be ‘‘the first day of
the first quarter after regulatory
approval.’’ 44 RFC responded that the
proposed RFC Board approval effective
date set forth in BAL–502–RFC–02 is
appropriate because of the regional
nature of the Standard and because the
41 RFC project SDP–501–RFC–03 was posted for
15-day category ballot the ‘‘Draft 2 Standards
Development Procedure’’ on Sept. 1, 2010 and can
be found on RFC’s Web site at https://rsvp.rfirst.org/
SDP501RFC03/default.aspx.
42 The ‘‘Template Guide for New Standards,’’
‘‘Template Quality Review of Standards,’’ and ‘‘Time
Horizons’’ documents can all be found on the NERC
Web site at https://www.nerc.com/
commondocs.php?cd=2.
43 NERC Petition at 22.
44 Id.
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
Requirements under BAL–502–RFC–02
are already being implemented.
Specifically, RFC noted that upon RFC
Board approval, BAL–502–RFC–02
became effective and enforceable with
respect to RFC members under their
‘‘Terms of Membership’’ contained in
RFC’s bylaws.45 Because BAL–502–
RFC–02 only applies to planning
coordinators within RFC’s region, all of
which are RFC members, BAL–502–
RFC–02’s Requirements are currently
effective. As such, no additional
implementation time is required.46 RFC
acknowledges that upon Commission
approval, the Reliability Standard will
be mandatory and enforceable, and that
non-compliance will be subject to
financial penalties.
25. We propose to find that with
respect to proposed Reliability Standard
BAL–502–RFC–02, no additional
implementation time is required as the
four registered planning coordinators in
the RFC region, as RFC members, are
already operating under the Standard.47
There are no other planning
coordinators to whom the requirements
will apply after Commission approval.
While we note that reliability standards
are generally implemented
prospectively, in this case the real
impact of Commission approval is to
make BAL–502–RFC–02 prospectively
enforceable through civil penalties.
Accordingly, the Commission proposes
that Reliability Standard BAL–502–
RFC–02 will become mandatory and
enforceable on the effective date of the
Commission’s final rule approving the
Reliability Standard.
jlentini on DSKJ8SOYB1PROD with PROPOSALS
E. Provision of Data
26. Proposed Reliability Standard
BAL–502–RFC–02 requires planning
coordinators to perform a resource
adequacy analysis and assessment.
Gathering data is a necessary
component of doing so. The
Commission is concerned that proposed
Reliability Standard BAL–502–RFC–02
does not require other entities (load45 Pursuant to RFC’s bylaws, RFC members are
subject to a regional Reliability Standard once the
Standard is approved by the RFC Board. Although
a Board-approved Standard is enforceable under the
RFC bylaws as a term of membership, a member
would not be subject to potential financial
penalties. See NERC Petition at 25.
46 Id.
47 The Commission notes that under the current
NERC compliance registry entities register as
‘‘planning authorities,’’ not ‘‘planning coordinators.’’
NERC defines ‘‘planning coordinator’’ in its Glossary
by simply referencing ‘‘See Planning Authority.’’
The Commission understands that for reliability
purposes planning authorities and planning
coordinators are interchangeable. Thus any entity
registered with NERC as a planning authority is
subject to any Reliability Standard that applies to
planning coordinators.
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serving entities, balancing authorities,
transmission operators, resource
planners, or transmission planners) to
provide the planning coordinators
subject to BAL–502–RFC–02 the
necessary data for the resource
adequacy analysis. In short, the
Commission is concerned that planning
coordinators will be subject to a
mandatory and enforceable Reliability
Standard without the necessary tools to
fulfill the Standard’s Requirements. The
Commission recognizes that this
concern is somewhat alleviated by the
fact that, within the RFC, many of the
planning coordinators are also the
entities that would have the needed
data,48 or may obtain some of the
needed data as a result of some
continent-wide Reliability Standards’
Requirements.49 The Commission
invites comment on whether the
planning coordinators have encountered
problems with collecting necessary data
in order to complete the resource
adequacy assessment that is the subject
of BAL–502–RFC–02.
F. Regional Definitions
27. Proposed regional Reliability
Standard BAL–502–RFC–02 includes
four new definitions that apply only to
the RFC region: Resource Adequacy, Net
Internal Demand, Peak Period, and Year
One. NERC plans to publish the
definitions in a distinct section of the
NERC Glossary noting their limited
applicability to entities within RFC.
48 The four planning coordinators currently
registered in RFC are also registered as other
functional entities. American Transmission Co.,
LLC and ITC Transmission are both registered as
transmission owners, transmission operators and
transmission planners. Midwest ISO is registered as
a balancing authority, interchange authority,
reliability coordinator and transmission service
provider. PJM is registered as balancing authority,
interchange authority, reliability coordinator,
resource planner, transmission operator,
transmission planner, and transmission service
provider.
49 For example, it appears that the following
continent-wide Reliability Standards allow
planning coordinators to obtain data needed to
conduct the resource adequacy analysis and
assessment: (i) MOD–001, Requirement R9 (requires
transmission service providers to provide data
regarding available transfer capability or available
flowgate capability calculations to the planning
coordinator upon request); (ii) MOD–004,
Requirement R9 (requires transmission service
providers and transmission planners to provide
data used for determining or allocating CBM to the
planning coordinator upon request); (iii) MOD–008,
Requirement R3 (requires transmission operators to
provide the TRM implementation document to the
planning coordinator upon request); (iv) PRC–023,
Requirements R2 and R3 (gives planning
coordinators access to facility ratings and the
identification of facilities critical to reliability); and
(v) TPL–001, TPL–002, TPL–003 and TPL–004
(gives planning coordinators access to data related
to the determination of whether the transmission
system is planned to meet firm demand under
certain conditions).
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28. The Commission proposes to
accept the four new defined terms to be
applicable only in the RFC region.
However, the Commission cautions
NERC and the Regional Entities to be
aware of ‘‘a potential re-proliferation of
regional terminology, and consequently,
the need to prevent possible
inconsistent use of terminology among
regions.’’ 50
29. For example, the Commission
notes that RFC’s proposed term
‘‘Resource Adequacy’’ is used in NERC’s
continent-wide Reliability Standard
MOD–004–1 51 as well as in NERC’s
definitions of ‘‘Generation Capability
Import Requirement’’ 52 and ‘‘Resource
Planner’’ 53 as set forth in NERC’s
Glossary. While RFC’s definition of
‘‘Resource Adequacy’’ does not appear to
conflict with the use of this term within
the continent-wide Reliability Standard
MOD–004–1 or in NERC’s Glossary, the
addition of ‘‘Resource Adequacy’’ as a
defined regional term highlights the
need for NERC to remain vigilant
regarding re-proliferation of regional
terminology. This is particularly
relevant with respect to terms like
‘‘Resource Adequacy’’ where other
Regional Entities may have differing
definitions of resource adequacy and
differing understandings of how those
definitions apply to the continent-wide
Reliability Standard MOD–004–1 and
NERC’s defined terms ‘‘generation
capability import requirement’’ and
‘‘resource planner.’’ Accordingly, the
Commission urges NERC and the
Regional Entities to be vigilant to assure
that any proposed regional definition is
consistent with both NERC definitions
and the approved terms used in other
regions.
50 Western Electricity Coordinating Council
Regional Reliability Standard Regarding Automatic
Time Error Correction, Order No. 723, 127 FERC
¶ 61,176, at P 39 (2009) (Final Rule).
51 Reliability Standard MOD–004–1—Capacity
Benefit Margin, Requirements R4.1, R5.1 and R6.1
each include a bullet stating: ‘‘Reserve margin or
resource adequacy requirements established by
other entities, such as municipalities, state
commissions, regional transmission organizations,
independent system operators, Regional Reliability
Organizations, or regional entities.’’ (Emphasis
added).
52 ‘‘Generation Capability Import Requirement’’ is
defined in the Glossary as: ‘‘The amount of
generation capability from external sources
identified by a Load-Serving Entity (LSE) or
Resource Planner (RP) to meet its generation
reliability or resource adequacy requirements as an
alternative to internal resources.’’
53 ‘‘Resource Planner’’ is defined as: ‘‘The entity
that develops a long-term (generally one year and
beyond) plan for the resource adequacy of specific
loads (customer demand and energy requirements)
within a Planning Authority Area.’’
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G. Technical Recommendation
(Resources Beyond RFC Footprint)
30. With respect to proposed BAL–
502–RFC–02, NERC raises the concern
of ‘‘how entities within RFC that have
load and resources outside the RFC
footprint account for these resources in
their [resource adequacy] analysis.’’ 54
Specifically, NERC asked RFC to clarify
if planning coordinators within the RFC
footprint are expected to only include
RFC load and resources in the analysis.
RFC responded to NERC’s technical
recommendation stating:
The intent is to cover all load within the
RFC footprint. Planning Coordinators may
include load outside the RFC footprint as
deemed appropriate. Even if a Planning
Coordinator has load outside of the
ReliabilityFirst footprint, as long as it
operates as a single area, the adequacy of that
Planning Coordinator area will indicate
adequacy of the part of the area within the
ReliabilityFirst footprint. From a converse
perspective, if the Planning Coordinator
operates as a single area, that area must be
assessed as a whole or the assessment will be
inadequate for the area within the RFC
footprint. (If transmission constraints exist,
the Planning Coordinator’s constrained areas
would have to be addressed separately in any
event.) 55
The Commission generally agrees
with the response provided by RFC.
However, as discussed in detail below,
the Commission expects that a planning
coordinator may benefit from a common
process for including resources and
loads outside of the RFC footprint in its
resource adequacy analysis.
31. As RFC noted in its response to
NERC on this issue that in order to
perform a valid assessment, it may be
necessary to represent a portion of areas
outside of the RFC footprint in order to
determine the impact those areas may
have on the footprint being analyzed.
RFC has incorporated into the proposed
regional Reliability Standard a high
level of detail necessary to perform a
valid assessment. Similarly, the
Commission notes how NERC’s
continent-wide transmission planning
Reliability Standards 56 require a valid
assessment, and explicitly state in the
Standard what is expected to be
completed in order to have a valid
jlentini on DSKJ8SOYB1PROD with PROPOSALS
54 NERC
Petition at 24.
55 NERC Petition at Exhibit C, NERC’s April 17,
2009 Quality Assurance Review Summary at 4.
56 Transmission Planning Reliability Standards
TPL–001 Requirement R1, TPL–002 Requirement
R1, TPL–003 Requirement R1, and TPL–004
Requirement R1 all require a valid assessment
stating: ‘‘The Planning Authority and Transmission
Planner shall each demonstrate through a valid
assessment. * * *’’ Further, the sub-requirements
under Requirement R1 of each of the aboveidentified transmission planning Reliability
Standards detail what is expected in order to have
a valid assessment.
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assessment. One important aspect of a
valid assessment is that it should
include an appropriate model of areas
outside of the area being analyzed in
order for the analysis to accurately
represent what could be expected
during actual operation.57
Otherwise, the resource adequacy
analysis could be skewed by showing
adequacy within the RFC footprint
while leaving out an inadequate area
outside of the RFC footprint. To avoid
this potential issue, the Commission
expects that a RFC planning coordinator
would have a common process or
procedure that addresses the planning
reserves assessments, which could
include either (i) a methodology to
determine whether or how the planning
coordinator would include resources
and loads outside of the RFC footprint
in its resource adequacy analysis or (ii)
models which the resource adequacy
assessment should utilize that would
already include the appropriate
modeling of external areas. The
Commission seeks comments on any
concerns or suggestions to address load
and resources outside of the RFC
footprint during a planning assessment
and also seeks comments on how
entities currently perform this task or
other similar planning tasks where load
and resources occur outside of
boundaries required by the assessment.
H. Planning Gap Identification
32. Proposed regional Reliability
Standard BAL–502–RFC–02 includes
two main Requirements: (1) To annually
perform and document resource
adequacy analysis (R1); and (2) to
annually document the projected load
and resource capability for each area
identified in the resource adequacy
analysis (R2). BAL–502–RFC–02 does
not include a Requirement to document
any gap between the planning reserve
margin calculated in R1.1 (the amount
of planning reserve needed to ensure a
‘‘one day in ten year’’ criterion) and the
actual planning reserve determined in
the resource adequacy analysis.
33. The Commission believes that it
would be useful for planning
coordinators to identify and document a
deficiency in planning reserves.
Identification of a planning gap could
help ensure that entities are aware of
potential risks regarding the capability
to balance resources and demand in a
57 Requirement R1.3.5 of Reliability Standards
TPL–001 through TPL–003 and Requirement 1.3.4
of Reliability Standard TPL–004 state that in order
to have a valid assessment, the simulation shall
‘‘have all projected firm transfers modeled.’’ This is
one example of how areas outside of the area being
analyzed must be appropriately modeled in order
to simulate the impact on the area being analyzed.
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66043
planning timeframe. Acknowledging
potential risk to the Bulk-Power System
during the planning timeframe would
allow affected entities time to develop a
solution before the identified deficiency
in planning reserves leads to adverse
reliability impacts. For example, NERC’s
continent-wide transmission planning
Reliability Standards 58 include
Requirements for entities to develop a
corrective action plan when system
simulations indicate an inability of the
systems to respond as prescribed in the
Standards. Accordingly, the
Commission proposes to direct RFC,
when reviewing BAL–502–RFC–02
during its scheduled five-year review, to
consider modifying BAL–502–RFC–02
to include a Requirement to identify any
gap between the needed amount of
planning reserves defined in
Requirement R1.1 and the planning
reserves determined from the resource
adequacy analysis. This would be a
documentation Requirement only and
would not require entities to install
additional generation or transmission
capacity.
I. Violation Risk Factors/Violation
Security Levels
34. To determine a base penalty
amount for a violation of a Requirement
within a Reliability Standard, NERC, or
in this case RFC as the developer of
proposed Reliability Standard BAL–
502–RFC–02, must first determine an
initial range for the base penalty
amount. To do so, RFC is to assign a
VRF to each Requirement and subRequirement of a Reliability Standard
that relates to the expected or potential
impact of a violation of the Requirement
on the reliability of the Bulk-Power
System. The Commission has
established guidelines for evaluating the
validity of each VRF assignment.59
35. The Reliability Standard
developer also is to assign each
Requirement and sub-Requirement one
of four VSLs—low, moderate, high, and
severe—as measurements for the degree
to which the Requirement was violated
in a specific circumstance. On June 19,
2008, the Commission issued an order
58 See Reliability Standards TPL–001–0,
Requirements R2 and R3; TPL–002–0, Requirements
R2 and R3; TPL–003–0, Requirements R2 and R3;
and TPL–004–0, Requirements R2 and R3.
59 See North American Electric Reliability Corp.,
119 FERC ¶ 61,145, order on reh’g, 120 FERC
¶ 61,145, at P 8–13 (2007) (Violation Risk Factor
Rehearing Order). The guidelines are: (1)
Consistency with the conclusions of the Blackout
Report; (2) consistency within a Reliability
Standard; (3) consistency among Reliability
Standards; (4) consistency with NERC’s definition
of the violation risk factor level; and (5) treatment
of requirements that co-mingle more than one
obligation.
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
IV. Information Collection Statement
39. The Office of Management and
Budget (OMB) regulations require
approval of certain information
collection requirements imposed by
agency rules.64 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. The Paperwork
Reduction Act (PRA) 65 requires each
federal agency to seek and obtain OMB
approval before undertaking a collection
of information directed to ten or more
persons or contained in a rule of general
applicability.66
40. The Commission is submitting
these reporting and recordkeeping
requirements to OMB for its review and
approval under section 3507(d) of the
PRA. Comments are solicited on the
Commission’s need for this information,
whether the information will have
practical utility, the accuracy of
provided burden estimates, ways to
enhance the quality, utility, and clarity
of the information to be collected, and
any suggested methods for minimizing
the respondent’s burden, including the
use of automated information
techniques.
41. This Notice of Proposed
Rulemaking (NOPR) proposes to
approve one new regional Reliability
Standard, BAL–502–RFC–02, that was
developed by RFC, a Regional Entity,
and submitted by NERC as the ERO. The
proposed regional Reliability Standard
requires planning coordinators within
the RFC geographical footprint to
analyze, assess and document resource
adequacy, annually, and to document
and post projected load and resource
capability in each area and
transmission-constrained sub-area
identified in the resource adequacy
assessment. The proposed regional
Reliability Standard, which applies to
approximately four planning
coordinators located in the eastern
portion of the U.S., does not require
planning coordinators to file
information with the Commission. It
does require planning coordinators to
develop, document, publicly post, and
retain certain information, subject to
compliance monitoring by RFC.
However, the Commission does not
believe that approval of the RFC
regional Reliability Standard will result
in a substantive increase in reporting
burdens because it implements the
current practices in RFC. As RFC has
represented, the affected RFC-member
planning coordinators have been subject
to these requirements since August 2009
and would continue to be subject to
them even if the Commission did not
approve BAL–502–RFC–02 as a regional
Reliability Standard. Thus, the
Commission finds that the requirement
to develop, document, and maintain
information in the regional Reliability
Standard is a current and ongoing
requirement for RFC members and,
therefore, the Commission’s proposed
action in this Notice of Proposed
Rulemaking would not impose any
additional burden on RFC-member
planning coordinators. The Commission
therefore concludes that this proposed
rule will not substantively increase the
reporting burden nor impose any
additional information collection
requirements. The proposed regional
Reliability Standard is a new standard
and was not included in the original
standards submitted for review and
approval by OMB. In addition,
Commission approval of proposed
regional Reliability Standard BAL–502–
RFC–02 makes the standard mandatory
and enforceable. Therefore, the
Commission will submit this proposed
rule to OMB for review and approval of
the reporting requirements and propose
a de minimis burden to reflect the prior
implementation by RFC as part of its
region’s standard practices.
42. The Commission does not foresee
any impact on the reporting burden for
small businesses.
43. Based on currently available
information and the fact that the burden
is an existing part of the business
process for registered planning
coordinators in the RFC region, the
Commission estimates that the
increased Public Reporting Burden is de
minimis as follows:
60 North American Electric Reliability Corp., 123
FERC ¶ 61,284, at P 20–35 (Violation Severity Level
Order), order on reh’g and compliance, 125 FERC
¶ 61,212 (2008). The guidelines provide that VSL
assignments should: (1) Not lower the current level
of compliance; (2) ensure uniformity and
consistency in the determination of penalties; (3) be
consistent with the corresponding requirement; and
(4) be based on a single violation.
61 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 VRFs and
VSLs 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.’’ As
directed, on March 5, 2010, NERC submitted a
comprehensive approach that is currently pending
with the Commission in Docket No. RR08–4–005.
62 NERC Petition at 24.
63 Docket No. RR08–4–005 comprises NERC’s
March 5, 2010 Violation Severity Level Compliance
Filing submitted in response to Order No. 722. See
Order No. 722, 126 FERC ¶ 61,255 at P 45.
64 5 CFR 1320.8.
65 44 U.S.C. 3501–3520.
66 OMB’s regulations at 5 CFR 1320.3(c)(4)(i)
require that ‘‘Any recordkeeping, reporting, or
disclosure requirement contained in a rule of
general applicability is deemed to involve ten or
more persons.’’
establishing four guidelines for the
development of VSLs.60
36. With respect to proposed
Reliability Standard BAL–502–RFC–02,
RFC assigned VRFs only to the two
main Requirements and did not propose
VRFs for any of the sub-Requirements.61
Requirement R1 of BAL–502–RFC–02 is
assigned a ‘‘medium’’ VRF and
Requirement R2 is assigned a ‘‘lower’’
VRF. Similarly, RFC assigned VSLs only
to the main Requirements, R1 and R2,
of proposed BAL–502–RFC–02, and not
to any of the sub-Requirements. NERC
notes that RFC’s assignment of both
VRFs and VSLs only to the main
Requirements is consistent with NERC’s
August 10, 2009 Informational Filing
Regarding the Assignment of VRFs and
VSLs.62
37. On May 5, 2010, NERC
incorporated by reference into Docket
No. RR08–4–005,63 its August 10, 2009
information filing in which NERC
proposes assigning VRFs and VSLs only
to the main Requirements in each
Reliability Standard, and not to the subRequirements. Because the VRFs and
VSLs for both Requirements R1 and R2
of proposed Reliability Standard BAL–
502–RFC–02 are affected by the NERC’s
pending petition, we propose to defer
discussion on the proposed VRFs and
VSLs assigned to BAL–502–RFC–02
until after we act on NERC’s petition in
Docket No. RR08–4–005.
jlentini on DSKJ8SOYB1PROD with PROPOSALS
J. Summary
38. In summary, proposed regional
Reliability Standard BAL–502–RFC–02
appears to be just, reasonable, not
unduly discriminatory or preferential,
and in the public interest. Accordingly,
the Commission proposes to approve
regional Reliability Standard BAL–502–
RFC–02 as mandatory and enforceable
and to accept the four related defined
terms as terms applicable to the RFC
region only. In addition, the
Commission proposes to defer
discussion on the proposed VRFs and
VSLs, as described above. The
Commission invites comments on these
proposals.
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
Number of
respondents
Proposed data collection FERC–725–H
Number of
responses
Hours per
respondent
Total annual
hours
4
1
10
40
Total ..........................................................................................
jlentini on DSKJ8SOYB1PROD with PROPOSALS
Registered planning coordinators 67 in the RFC region ...............
............................
............................
............................
40
InformationCollection Costs: The
Commission seeks comments on the
costs to comply with these
requirements.
• Total annual costs = $2,651.41 ((40
hours/2080 hours/year) × $137,874/
year).
• Title: (proposed) FERC–725–H,
Regional Reliability Standard BAL–502–
RFC–02 (Planning Resource Adequacy
Analysis, Assessment and
Documentation).
• Action: Proposed Collection of
Information.
• OMB Control No: To Be
Determined.
• Respondents: Registered planning
coordinators in the RFC region.
• Frequency of Responses: On
Occasion.
• Necessity of the Information: The
proposed Regional Reliability Standard
requires planning coordinators to
document and maintain, for two years,
their resource adequacy analyses and
the projected load and resource
capability subject to review by the
Commission, NERC, and RFC to ensure
compliance with the Reliability
Standard.
• Internal Review: The Commission
has reviewed the proposed regional
Reliability Standard BAL–502–RFC–02
and believes it to be just, reasonable, not
unduly discriminatory or preferential,
and in the public interest. The
Commission has assured itself, by
means of internal review, that there is
specific, objective support for the
burden estimates associated with the
information requirements.
44. Interested persons may obtain
information on the reporting
requirements by contacting: Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426
[Attention: Ellen Brown, Office of the
Executive Director, Phone: (202) 502–
8663, fax: (202) 273–0873, e-mail:
DataClearance@ferc.gov]. Comments on
the requirements of this order may also
be sent to the Office of Information and
Regulatory Affairs, Office of
Management and Budget, Washington,
DC 20503 [Attention: Desk Officer for
the Federal Energy Regulatory
Commission]. For security reasons,
comments should be sent by e-mail to
67 At this time, there are only four registered
planning coordinators in the RFC region.
VerDate Mar<15>2010
16:25 Oct 26, 2010
Jkt 223001
OMB at oira_submission@omb.eop.gov.
Please reference FERC–725H and the
docket number of this proposed
rulemaking in your submission.
V. Environmental Analysis
45. 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.68 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.69 The
actions proposed herein fall within this
categorical exclusion.
VI. Regulatory Flexibility Act
Certification
46. The Regulatory Flexibility Act of
1980 (RFA) 70 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The entities to which the
requirements of this Rule would apply;
i.e., planning coordinators within the
RFC region, do not fall within the
definition of small entities.71 Moreover,
the proposed regional Reliability
Standards reflect a continuation of
existing resource planning assessment
requirements for these planning
coordinators and are ‘‘new’’ only with
respect to the fact that once approved by
the Commission, they would be subject
to enforcement by either NERC or the
Commission. Based on the foregoing,
the Commission certifies that this Rule
will not have a significant impact on a
substantial number of small entities.
68 Regulations Implementing the National
Environmental Policy Act of 1969, 52 FR 47897
(Dec. 17, 1987), FERC Stats. & Regs., Regulations
Preambles 1986–1990 ¶ 30,783 (1987).
69 18 CFR 380.4(a)(2)(ii).
70 5 U.S.C. 601–612.
71 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act
(SBA), which defines a ‘‘small business concern’’ as
a business that is independently owned and
operated and that is not dominant in its field of
operation. See 15 U.S.C. 632. According to the SBA,
a small electric utility is defined as one that has a
total electric output of less than four million MWh
in the preceding year.
PO 00000
Frm 00051
Fmt 4702
Sfmt 4702
Accordingly, no regulatory flexibility
analysis is required.
VII. Comment Procedures
47. The Commission invites interested
persons to submit comments on the
matters and issues proposed in this
NOPR to be adopted, including any
related matters or alternative proposals
that commenters may wish to discuss.
Comments are due December 27, 2010.
Comments must refer to Docket No.
RM10–10–000, and must include the
commenter’s name, the organization
they represent, if applicable, and their
address in their comments.
48. The Commission encourages
comments to be filed electronically via
the eFiling link on the Commission’s
Web site at https://www.ferc.gov. The
Commission accepts most standard
word processing formats. Documents
created electronically using word
processing software should be filed in
native applications or print-to-PDF
format and not in a scanned format.
Commenters filing electronically do not
need to make a paper filing.
49. Commenters that are not able to
file comments electronically must send
an original copy of their comments to: 72
Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street, NE., Washington, DC 20426.
50. All comments will be placed in
the Commission’s public files and may
be viewed, printed, or downloaded
remotely as described in the Document
Availability section below. Commenters
on this proposal are not required to
serve copies of their comments on other
commenters.
VIII. Document Availability
51. 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.
72 The number of copies to be filed is set forth in
the Commission’s ‘‘Quick Reference Guide for Paper
Submissions’’ (as updated), available at
https://www.ferc.gov/docs-filing/efiling.asp.
E:\FR\FM\27OCP1.SGM
27OCP1
66046
Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Proposed Rules
52. 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.
53. 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.
By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010–27132 Filed 10–26–10; 8:45 am]
BILLING CODE 6717–01–P
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426,
(202) 502–6682,
Anna.Fernandez@ferc.gov.
SUPPLEMENTARY INFORMATION:
Notice of Inquiry
1. Recently, the Commission issued
an order finding that the Commission’s
policy prohibiting buy/sell transactions
applies to interstate open-access
transportation services provided by (1)
intrastate natural gas pipelines pursuant
to section 311 of the Natural Gas Policy
Act of 1978 (NGPA) 1 and (2) Hinshaw
pipelines 2 pursuant to blanket
certificates issued under section 284.224
of the Commission’s regulations.3 In this
Notice of Inquiry (NOI), the Commission
is seeking comments on whether and
how holders of firm interstate capacity
on section 311 and Hinshaw pipelines
should be permitted to allow others to
make use of their firm interstate
capacity, including to what extent buy/
sell transactions should be permitted.4
DEPARTMENT OF ENERGY
I. Current Commission Policy
Federal Energy Regulatory
Commission
2. NGPA section 311 authorizes the
Commission to allow intrastate natural
gas pipelines to transport natural gas
‘‘on behalf of’’ interstate pipelines or
local distribution companies served by
interstate pipelines ‘‘under such terms
and conditions as the Commission may
prescribe.’’ 5 NGPA section 601(a)(2)
exempts transportation service
authorized under NGPA section 311
from the Commission’s NGA
jurisdiction. Congress adopted these
provisions in order to eliminate the
regulatory barriers between the
intrastate and interstate markets and to
promote the entry of intrastate pipelines
into the interstate market. Such entry
eliminates the need for duplication of
facilities between interstate and
18 CFR Part 284
[Docket No. RM11–1–000]
Capacity Transfers on Intrastate
Natural Gas Pipelines
October 21, 2010.
Federal Energy Regulatory
Commission, DOE.
ACTION: Notice of inquiry.
AGENCY:
The Federal Energy
Regulatory Commission is seeking
comments on whether and how holders
of firm capacity on intrastate natural gas
pipelines providing interstate
transportation and storage services
under section 311 of the Natural Gas
Policy Act of 1978 and Hinshaw
pipelines providing such services
pursuant to blanket certificates issued
under § 284.224 of the Commission’s
regulations should be permitted to allow
others to make use of their firm
interstate capacity.
DATES: Comments are due December 27,
2010.
FOR FURTHER INFORMATION CONTACT:
James Sarikas (Technical Information),
Office of Energy Market Regulation,
Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC
20426, (202) 502–6831,
James.Sarikas@ferc.gov; Anna
Fernandez (Legal Information), Office of
the General Counsel, Federal Energy
jlentini on DSKJ8SOYB1PROD with PROPOSALS
SUMMARY:
VerDate Mar<15>2010
16:25 Oct 26, 2010
Jkt 223001
1 15
U.S.C. 3371(a)(2).
1(c) of the Natural Gas Act (NGA)
exempts from the Commission’s NGA jurisdiction
those pipelines which transport gas in interstate
commerce if (1) They receive natural gas at or
within the boundary of a state, (2) all the gas is
consumed within that state and (3) the pipeline is
regulated by a state Commission. This exemption is
referred to as the Hinshaw exemption after the
Congressman who introduced the bill amending the
NGA to include section 1(c). See ANR Pipeline Co.
v. Federal Energy Regulatory Comm’n, 71 F.3d 897,
898 (1995) (ANR) (briefly summarizing the history
of the Hinshaw exemption).
3 Arizona Public Service Co. and Sequent Energy
Management, L.P., 132 FERC ¶ 61,064 (2010) (APS/
Sequent).
4 This NOI relates to firm capacity on section 311
and Hinshaw pipelines used for interstate service
subject to our jurisdiction under the NGPA or NGA
and does not extend to non-jurisdictional capacity
used for purely intrastate service.
5 15 U.S.C. 3371(c).
2 Section
PO 00000
Frm 00052
Fmt 4702
Sfmt 4702
intrastate pipelines.6 Subpart C of the
Commission’s Part 284 open access
regulations (18 CFR § 2841.121–126)
implements the provisions of NGPA
section 311 concerning transportation
by intrastate pipelines.7
3. Shortly after the adoption of the
NGPA, the Commission authorized
Hinshaw pipelines to apply for NGA
section 7 certificates, authorizing them
to transport natural gas in interstate
commerce in the same manner as
intrastate pipelines may do under NGPA
section 311.8 Specifically, section
284.224 of the Commission’s regulations
provides for the issuance of blanket
certificates to Hinshaw pipelines to
provide open access transportation
service ‘‘to the same extent that, and in
the same manner’’ as intrastate pipelines
are authorized to perform such service
by subpart C.
4. The Part 284, subpart C, regulations
require that intrastate pipelines
performing interstate service under
NGPA section 311 must do so on an
open-access basis.9 However, consistent
with the NGPA’s goal of encouraging
intrastate pipelines to provide interstate
service, the Commission has not
imposed on intrastate pipelines all of
the Part 284 requirements imposed on
interstate pipelines. For example, when
the Commission first adopted the Part
284 open access regulations in Order
No. 436, the Commission exempted
intrastate pipelines from the
requirement that they offer open access
service on a firm basis.10 The
Commission found that requiring
intrastate pipelines to offer firm service
to out-of-state shippers could discourage
them from providing any interstate
service, because such a requirement
could progressively turn the intrastate
pipeline into an interstate pipeline
against its will and against the will of
the responsible state authorities. For the
same reasons, when the Commission
adopted Order No. 636 11 restructuring
6 EPGT Texas Pipeline, 99 FERC ¶ 61,295, at
62,252 (2002) (EPGT).
7 18 CFR 284.121–126 (2010).
8 Certain Transportation, Sales, and Assignments
by Pipeline Companies not Subject to Commission
Jurisdiction Under Section 1(c) of the Natural Gas
Act, Order No. 63, FERC Stats. & Regs. ¶ 30,118,
at 30,824–25 (1980).
9 18 CFR 284.7(b), 284.9(b) and 284.122 (2010).
10 Regulation of Natural Gas Pipelines After
Partial Wellhead Decontrol, Order No. 436, FERC
Stats. & Regs. ¶ 30,665, at 31,502 (1985).
11 See Pipeline Service Obligations and Revisions
to Regulations Governing Self-Implementing
Transportation and Regulation of Natural Gas
Pipeline After Partial Wellhead Decontrol, Order
No. 636, FERC Stats. & Regs. ¶ 30,939, order on
reh’g, Order No. 636–A, FERC Stats. & Regs.
¶ 30,950, order on reh’g, Order No. 636–B, 61 FERC
¶ 61,272 (1992), order on reh’g, 62 FERC ¶ 61,007
(1993), aff’d in part and remanded in part sub nom.
E:\FR\FM\27OCP1.SGM
27OCP1
]]>Agencies
[Federal Register Volume 75, Number 207 (Wednesday, October 27, 2010)]
[Proposed Rules]
[Pages 66038-66046]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27132]
[[Page 66038]]
=======================================================================
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM10-10-000]
Planning Resource Adequacy Assessment Reliability Standard
Issued October 21, 2010.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: Under section 215(d)(2) of the Federal Power Act (FPA), the
Federal Energy Regulatory Commission proposes to approve a regional
Reliability Standard, BAL-502-RFC-02, Planning Resource Adequacy
Analysis, Assessment and Documentation, developed by ReliabilityFirst
Corporation (RFC) and submitted to the Commission by the North American
Electric Reliability Corporation (NERC). The proposed regional
Reliability Standard requires planning coordinators within the RFC
geographical footprint to analyze, assess and document resource
adequacy for load in the RFC footprint annually, to utilize a ``one day
in ten year'' loss of load criterion, and to document and post load and
resource capability in each area or transmission-constrained sub-area
identified.
DATES: Comments are due December 27, 2010.
ADDRESSES: You may submit comments, identified by docket number and in
accordance with the requirements posted on the Commission's Web site,
https://www.ferc.gov. Comments may be submitted by any of the following
methods:
Electronic Submission: Documents created electronically
using word processing software should be filed in native applications
or print-to-PDF format, and not in a scanned format, at https://www.ferc.gov/docs-filing/efiling.asp.
Mail/Hand Delivery: Commenters unable to file comments
electronically must mail or hand deliver an original copy of their
comments to: Federal Energy Regulatory Commission, Secretary of the
Commission, 888 First Street, NE., Washington, DC 20426. These
requirements can be found on the Commission's Web site, see, e.g., the
``Quick Reference Guide for Paper Submissions,'' available at https://www.ferc.gov/docs-filing/efiling.asp, or via phone from FERC Online
Support at 202-502-6652 or toll-free at 1-866-208-3676.
FOR FURTHER INFORMATION CONTACT:
Karin L. Larson (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8236.
Scott Sells (Technical Information), Office of Electric Reliability,
Division of Policy Analysis and Rulemaking, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6664.
SUPPLEMENTARY INFORMATION:
Notice of Proposed Rulemaking
1. Under section 215(d)(2) of the Federal Power Act (FPA), the
Federal Energy Regulatory Commission proposes to approve a regional
Reliability Standard BAL-502-RFC-02 (Planning Resource Adequacy
Analysis, Assessment and Documentation), developed by ReliabilityFirst
Corporation (RFC) and submitted to the Commission by the North American
Electric Reliability Corporation (NERC). The proposed regional
Reliability Standard requires planning coordinators within the RFC
geographical footprint to analyze, assess and document resource
adequacy for load in the RFC footprint annually, to utilize a ``one day
in ten year'' loss of load criterion, and to document and post load and
resource capability in each area or transmission-constrained sub-area
identified.
I. Background
A. Mandatory Reliability Standards
2. Section 215 of the FPA requires a Commission-certified Electric
Reliability Organization (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.\1\ In July 2006, the Commission certified NERC as the
ERO.\2\
---------------------------------------------------------------------------
\1\ See 16 U.S.C. 824o(e)(3).
\2\ North American Electric Reliability Corp., 116 FERC ] 61,062
(ERO Certification Order), order on reh'g and compliance, 117 FERC ]
61,126 (2006), aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342
(D.C. Cir. 2009).
---------------------------------------------------------------------------
3. Reliability Standards that the ERO proposes to the Commission
may include Reliability Standards that are developed by a Regional
Entity.\3\ A Regional Entity is an entity that has been approved by the
Commission to enforce Reliability Standards under delegated authority
from the ERO.\4\ In Order No. 672, the Commission urged uniformity of
Reliability Standards, but recognized a potential need for regional
differences.\5\ Accordingly, the Commission stated that:
---------------------------------------------------------------------------
\3\ 16 U.S.C. 824o(e)(4).
\4\ Id. at 824o(a)(7) and (e)(4).
\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, at P 290; order on reh'g, Order No. 672-A,
FERC Stats. & Regs. ] 31,212 (2006).
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 under 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.\6\
---------------------------------------------------------------------------
\6\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 291.
4. Consistent with section 215 of the FPA, the Commission will
approve proposed regional Reliability Standard BAL-502-RFC-02 if the
Commission finds it is just, reasonable, not unduly discriminatory or
preferential, and in the public interest.
B. ReliabilityFirst
5. On April 19, 2007, the Commission approved delegation agreements
between NERC and eight Regional Entities.\7\ 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 RFC as a Regional Entity and accepted RFC's
Standards Development Manual which sets forth the process for RFC's
development of regional Reliability Standards.\8\ The RFC region is a
less than interconnection-wide region that covers all or portions of 14
states and the District of Columbia.
---------------------------------------------------------------------------
\7\ See North American Electric Reliability Corp., 119 FERC ]
61,060, at P 316-350 (Delegation Agreement Order), order on reh'g,
120 FERC ] 61,260 (2007).
\8\ Id. P 339 (clarifying that the RFC Standards Development
Manual embodies ``rules'' which are subject to NERC approval and, if
approved by NERC, Commission approval).
---------------------------------------------------------------------------
II. RFC Regional Reliability Standard BAL-502-RFC-02
6. On December 14, 2009, NERC submitted for Commission approval, in
accordance with section 215(d)(1) of the
[[Page 66039]]
FPA,\9\ regional Reliability Standard BAL-502-RFC-02 and four
associated new definitions.\10\ The stated purpose of regional
Reliability Standard BAL-502-RFC-02 is to establish common criteria,
based on ``one day in ten year'' loss of load expectation principles,
for the analysis, assessment and documentation of resource adequacy in
the RFC region.\11\ NERC states that the proposed regional Reliability
Standard establishes requirements for planning coordinators in the RFC
region regarding resource adequacy assessment, which subject matter is
not currently addressed in NERC's continent-wide Reliability
Standards.\12\
---------------------------------------------------------------------------
\9\ 16 U.S.C. 824o.
\10\ NERC Petition for Approval of Proposed RFC Regional
Reliability Standard BAL-502-RFC-02, Docket No. RM10-10-000 (Dec.
14, 2009) (Petition).
\11\ NERC Petition at 7.
\12\ Id. at 7. NERC notes that it has a pending continent-wide
project, Project 2009-05, Resource Adequacy Assessments, that is
intended to address resource adequacy assessments. This NERC project
has a targeted completion date of third quarter 2011.
---------------------------------------------------------------------------
7. Proposed regional Reliability Standard BAL-502-RFC-02 contains
two Requirements, which are applicable to each planning coordinator
within the RFC footprint.\13\ Requirement R1 requires each planning
coordinator to perform and document an annual resource adequacy
analysis.\14\ The seven Sub-requirements define the criteria to be used
for the resource adequacy analysis. Sub-requirement R1.1 sets forth the
``one day in ten year'' criteria to be used to calculate the planning
reserve margin. Sub-requirement R1.2 specifies the planning years to be
studied. Sub-requirement R1.3 defines system characteristics to be
included in the analysis. Sub-requirements R1.4 and R1.5 require the
consideration of resource availability and transmission outage plans.
Sub-requirements R1.6 and R1.7 require documentation that capacity
resources and load were properly accounted for in the analysis.
Requirement R2 requires each planning coordinator to annually document
the projected load and resource capability for each area and
transmission constrained sub-area identified in the analysis. Sub-
requirements R2.1 through R2.3 set forth the specific documentation
requirements. Each of the main Requirements (R1 and R2) are assigned a
violation risk factor (VRF) and violation severity level (VSL).
However, RFC did not assign VRFs or VSLs to the Sub-requirements.
---------------------------------------------------------------------------
\13\ According to the RFC April 16, 2010 organization
registration (available at https://rfirst.org/Compliance/Registration.aspx), there are four registered planning coordinators
in the RFC region, each of which is a RFC member. See RFC's January
11, 2010 list of member companies by sector, available at https://rfirst.org/MiscForms/AboutUs/Membership.aspx. The four registered
planning coordinators are American Transmission Co., LLC;
International Transmission Company (ITC Transmission); Midwest
Independent Transmission System Operator, Inc. (Midwest ISO); and
PJM Interconnection, LLC (PJM).
\14\ NERC notes that the proposed Reliability Standard does not
require the building or acquisition of new generating capacity. See
NERC Petition at 9.
---------------------------------------------------------------------------
8. NERC also proposes to add the following four new definitions,
which would be applicable in the RFC region only:
Resource Adequacy: The ability of supply-side and demand-side
resources to meet the aggregate electrical demand (including
losses).
Net Internal Demand: Total of all end-use customer demand and
electric system losses within specified metered boundaries, less
Direct Control Load Management and Interruptible Demand.
Peak Period: A period consisting of two (2) or more calendar
months but less than seven (7) calendar months, which includes the
period during which the responsible entity's annual peak demand is
expected to occur.
Year One: The planning year that begins with the upcoming annual
Peak Period.
NERC states that these four terms do not presently appear in the
NERC Glossary of Terms Used in Reliability Standards (Glossary) and
they do not conflict with existing terms.\15\
---------------------------------------------------------------------------
\15\ The NERC Glossary (updated Apr. 20, 2010) is available at
https://www.nerc.com/docs/standards/rs/Glossary_of_Terms_2010April20.pdf.
---------------------------------------------------------------------------
9. NERC states that on February 24, 2009, RFC submitted the
proposed Reliability Standard to NERC for evaluation and approval. On
April 17, 2009, NERC provided RFC its evaluation of BAL-502-RFC-02
which highlighted several concerns regarding the proposed standard.
NERC's concerns included: (1) Missing time horizons, (2) effective date
not meeting NERC's template language, (3) complex sub-requirements, (4)
the addition of new defined terms, (5) the assignment of VRFs and VSLs
only to the Reliability Standard's two main Requirements and not the
sub-requirements, and (6) technical clarity. On June 8, 2009, RFC
submitted a response to NERC addressing NERC's concerns.
10. NERC concludes that the proposed RFC regional Reliability
Standard addresses matters not currently covered in a continent-wide
NERC Reliability Standard and thus meets the Commission's criteria for
consideration of a regional Reliability Standard. NERC asserts that the
proposed regional Reliability Standard satisfies all of the criteria
set forth in Order No. 672 that the Commission applies to determine
whether a proposed Reliability Standard is just, reasonable, not unduly
discriminatory or preferential and in the public interest.\16\ As such,
NERC requests approval of proposed regional Reliability Standard BAL-
502-RFC-02 and the related definitions.
---------------------------------------------------------------------------
\16\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 323-337.
---------------------------------------------------------------------------
III. Discussion
11. As discussed below, the Commission proposes to approve BAL-502-
RFC-02. The proposed regional Reliability Standard will improve the
reliable operation of the Bulk-Power System by ensuring use in the RFC
region of a common criterion, the ``one day in ten year'' principle, to
assess resource adequacy during the planning horizon. The Commission
also proposes to accept the four related definitions for inclusion in
NERC's Glossary for use with RFC's regional Reliability Standards.\17\
The Commission further proposes to defer discussion on the proposed
VRFs and VSLs for the regional Reliability Standard.
---------------------------------------------------------------------------
\17\ NERC's Glossary lists each term that has been defined for
use in one or more of NERC's continent-wide or regional Reliability
Standards.
---------------------------------------------------------------------------
12. Proposed regional Reliability Standard BAL-502-RFC-02 is ``more
stringent'' in that NERC's continent-wide standards currently do not
address assessment of Resource Adequacy in the planning horizon. The
Commission notes the current continent-wide Reliability Standard TOP-
002-2a, Requirement R7 requires Balancing Authorities to plan to meet
capacity and energy reserve requirements, including the deliverability/
capability for any single contingency.\18\ Reliability Standard TOP-
002-2 ensures that resources and operational plans are in place to
enable system operators to maintain the Bulk-Power System in a reliable
state.\19\ Thus Reliability Standard TOP-002-2 is a continent-wide
Reliability Standard that addresses requirements for reserves during
the operations timeframe whereas proposed regional Reliability Standard
BAL-502-RFC-02 addresses the assessment of resource adequacy (or
planning reserves) during the planning timeframe. If NERC develops a
continent-wide Reliability Standard that addresses assessment of
resource adequacy in the planning horizon and such Reliability Standard
is approved by the Commission, RFC should
[[Page 66040]]
reevaluate the continuing need for regional Reliability Standard BAL-
502-RFC-02.
---------------------------------------------------------------------------
\18\ Reliability Standard TOP-002-2a, Requirement R7.
\19\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, FERC Stats. & Regs. ] 31,242, at P 1590, order on
reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007). See also the
Notice of Proposed Rulemaking, Docket No. RM06-16-000, FERC Stats. &
Regs., Proposed Regulations 2004-2007, ] 32,608 (2006) (Order No.
693 NOPR).
---------------------------------------------------------------------------
A. Order No. 672 Criteria
13. Order No. 672 provides that a Reliability Standard must be
designed to achieve a specified reliability goal and must contain a
technically sound means to achieve this goal.\20\ Likewise, the
Reliability Standard should be based on actual data and lessons learned
from actual operations.\21\ According to NERC and RFC, proposed
regional Reliability Standard BAL-502-RFC-02 is clear and unambiguous
regarding what is required and who is required to comply (planning
coordinator). NERC and RFC also state that BAL-502-RFC-02 has clear and
objective measures for compliance and achieves a reliability goal
(namely, providing a common framework for resource adequacy analysis,
assessment, and documentation) effectively and efficiently. Based on
the Commission's understanding of the proposed regional Reliability
Standard, explained below, the Commission believes that BAL-502-RFC-02
satisfies the Order No. 672 criteria.
---------------------------------------------------------------------------
\20\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 324.
\21\ Id.
---------------------------------------------------------------------------
B. RFC's Proposed Resource Adequacy Reliability Standard Requirements
14. Proposed regional Reliability Standard BAL-502-RFC-02 requires
planning coordinators to perform an annual Resource Adequacy analysis
and calculate a planning reserve margin that meets the ``one day in ten
year'' criterion. The analysis must be ``performed or verified
separately'' for (i) Year One, (ii) for one year falling in the second
through fifth years, and (iii) at least one year in the sixth through
tenth years.\22\ The regional Reliability Standard further requires the
planning coordinators to calculate the planning reserve margin by
assessing each of the integrated peak hours for each day within the
year being analyzed to determine the probability that generation and
demand-side resources cannot meet the demand during that hour for that
day (which would result in a loss of load).\23\ The calculated planning
reserve margin is to be expressed as a percentage of the median
forecast peak demand (not including direct control load management and
interruptible demand). Regional Reliability Standard BAL-502-RFC-02
states that this median forecast is expected to have a 50 percent
probability that the projected load is too high and 50 percent
probability that the projected load is too low.\24\ In order to
determine the appropriate load forecast, the planning coordinators must
consider multiple factors including: (i) Variability in the load
forecast such as weather and regional economic forecasts, (ii) load
diversity, (iii) seasonal load variations, (iv) firm load and (v)
interruptible load including contractual arrangements concerning
curtailable and/or interruptible demand.\25\ In addition, the planning
coordinator must document that all load in its area is accounted for in
the analysis.\26\
---------------------------------------------------------------------------
\22\ See proposed Reliability Standard BAL-502-RFC-02,
Requirement R1.2.
\23\ See id. at Requirement R1.1.
\24\ See id. at Requirement R1.1.2 n.2.
\25\ See id. at Requirement R1.3.1.
\26\ See id. at Requirements R1.7.
---------------------------------------------------------------------------
15. Further, the planning coordinator must determine the
probability of resources that will be online and available, determine
the distribution of the peak load for each day, and include impacts of
known transmission limitations.\27\ To determine the probability of
available resources the planning coordinator must consider multiple
factors. Such factors include: (i) The historic resource performance,
(ii) seasonal resource ratings, (iii) firm capacity purchases from and
sales to entities outside of the planning coordinator area, (iv)
resource planned outage schedules, (v) deratings and retirements, (vi)
assumptions of intermittent and energy limited resources (such as wind
and cogeneration), (vii) criteria for including planned resource
additions, (viii) availability and delivery of fuel, (ix) common mode
outages that affect resource availability, (x) environmental and
regulatory restrictions of resources, (xi) available demand response
programs, (xii) sensitivity to resource outage rates, (xiii) extreme
weather/drought condition impacts on resource availability, (xiv)
assumptions for emergency operation procedures in order to make
reserves available, and (xv) uncommitted resources within the planning
coordinator area.\28\ Also, the planning coordinator must document that
all capacity resources in the planning coordinator area are
appropriately accounted for in the analysis.\29\
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\27\ See id. at Requirements R1.3.1, R1.3.2, and R1.3.3.
\28\ See id. at Requirements R1.3.2 and R1.4.
\29\ See id. at Requirement R1.6.
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16. The planning coordinator is also required to consider the
impacts of transmission limitations that could prevent the delivery of
generation to the load including criteria for including planned
transmission facilities in the study as well as transmission
maintenance outage schedules.\30\ Proposed regional Reliability
Standard BAL-502-RFC-02, Requirement R1.3.4 requires planning
coordinators to include in their assessment of transmission limits
assistance from other interconnected systems including multi-area
assessment considering transmission limitations into the study area.
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\30\ See id. at Requirements R1.3.3, R1.3.3.1, R1.3.3.2 and
R1.5.
---------------------------------------------------------------------------
17. Overall, the Commission believes that factors to be considered
in the resource adequacy analysis as set forth in Requirement R1 and,
as discussed above, are a technically sound means to set up the
analysis for the probability of not having enough resources in order to
meet demand and avoid loss of load. However, the Commission questions
or seeks clarity on three details of the resource adequacy analysis:
(i) The loss of load calculation, (ii) use of capacity benefit margin;
and (iii) meaning of common mode outages.
18. Requirement R1.1 states that the assessment shall calculate a
planning reserve margin that will result in the sum of probabilities
for loss of load for each planning year equal to 0.1, or comparable to
``one day in ten years'' when available capacity will not meet the
load. With respect to the loss of load calculation, proposed regional
Reliability Standard BAL-502-RFC-02 specifically identifies two
circumstances that will not count in the loss of load calculation: (1)
Utilization of direct control load management \31\ and (2) curtailment
of interruptible load.\32\ Notwithstanding these two exceptions to the
loss of load calculation, the Commission seeks comment on how other
actions that could be taken by a system operator, such as voltage
reduction or other, non-voluntary, types of load reduction plans, would
be modeled and documented in this analysis.
---------------------------------------------------------------------------
\31\ NERC defines direct control load management (DCLM) as
``Demand-Side Management that is under the direct control of the
system operator. DCLM may control the electric supply to individual
appliances or equipment on customer premises. DCLM as defined here
does not include Interruptible Demand.''
\32\ NERC defines Interruptible Load as ``Demand that the end-
use customer makes available to its Load-Serving Entity via contract
or agreements for curtailment.''
---------------------------------------------------------------------------
19. With respect to the capacity benefit margin, the Commission
notes that the requirements do not explicitly state whether planning
coordinators may rely upon capacity benefit
[[Page 66041]]
margin \33\ to satisfy BAL-502-RFC-02's Requirements. During the
standard development posting period, RFC received comments regarding
potential conflicts or lack of coordination between BAL-502-RFC-02 and
MOD-004-1--Capacity Benefit Margin.\34\ The Commission does not believe
the proposed regional Reliability Standard is in conflict with the
continent-wide Reliability Standard, but does note there could be some
confusion regarding whether capacity benefit margin could or could not
be used in order to meet the Requirements of BAL-502-RFC-02.\35\
Accordingly, we seek comment on whether capacity benefit margin may be
used to satisfy BAL-502-RFC-02's Requirements.
---------------------------------------------------------------------------
\33\ The NERC Glossary defines capacity benefit margin (CBM) as
``the amount of firm transmission transfer capability preserved by
the transmission provider for Load-Serving Entities (LSE), whose
loads are located on that Transmission Service Provider's system, to
enable access by the LSEs to generation from interconnected systems
to meet generation reliability requirements. Preservation of CBM for
an LSE allows that entity to reduce its installed generating
capacity below that which may otherwise have been necessary without
interconnections to meet its generation reliability requirements.
The transmission transfer capability preserved as CBM is intended to
be used by the LSE only in times of emergency generation
deficiencies.''
\34\ See NERC Petition, Exhibit C, comments from ITC
Transmission.
\35\ Reliability Standard MOD-004-1 addresses capacity benefit
margin, or a capacity preserved for firm transmission transfer
capability. Conversely, the Requirements in proposed Reliability
Standard BAL-502-RFC-02 address an analysis regarding the capability
of generation to serve the projected load. While capacity benefit
margin could be a method of meeting the requirements of BAL-502-RFC-
02, the two standards do not contradict each other.
---------------------------------------------------------------------------
20. With respect to Requirement R1.4, which requires the resource
adequacy analysis to consider resource availability characteristics
including ``common mode outages that affect resource availability,''
the Commission seeks comment on whether planning coordinators, when
evaluating ``common mode outages that affect resource availability''
will consider only outages within the generation facility, or if the
analysis will also include outages of transmission facilities that
would have an impact on resource or generator availability.
C. Missing Time Horizons
21. NERC's Petition notes its concern that the proposed regional
Reliability Standard BAL-502-RFC-02 does not identify time horizons for
each Requirement. Time horizons are used as a factor in determining the
size of a sanction. If an entity violates a Requirement and there is no
time to mitigate the violation because the Requirement takes place in
real-time, then the sanction associated with the violation is higher
than it would be for violation of a Requirement that could be mitigated
over a longer period of time.\36\ According to NERC's template for
Reliability Standards, each main Requirement in a Reliability Standard
should be assigned one of the following time horizons: (1) Long-Term
Planning (a planning horizon of one year or longer), (2) Operations
Planning (operating and resource plans from day-ahead up to and
including seasonal), (3) Same-day Operations (routine actions required
within the timeframe of a day, but not real-time), (4) Real-time
Operations (actions required within one hour or less to preserve the
reliability of the bulk electric system), and (5) Operations Assessment
(follow-up evaluations and reporting of real time operations).
---------------------------------------------------------------------------
\36\ See NERC's ``Time Horizons'' document, available on NERC's
Web site at https://www.nerc.com/files/Time_Horizons.pdf.
---------------------------------------------------------------------------
22. According to NERC, time horizons are used for compliance
assessments as described in NERC's Sanctions Guidelines.\37\ Time
horizons are used when determining the severity of a violation risk
factor and for determining the penalty for a violation. RFC states that
it did not include time horizons because its Reliability Standards
Development Procedure (RSDP) does not include time horizons in its
template for Reliability Standards. The RFC RSDP sets forth the
required elements of a Standard and includes a Reliability Standard
template. RFC's RSDP does not include ``time horizons'' as a required
element.\38\ Thus, RFC states that including time horizons in BAL-502-
RFC-02 would have been a deviation from its Commission-approved
Standards template. RFC also notes that ``the standard focuses on
`planning oriented' subject matter for one year and beyond,'' and, as
such, the ``appropriate time horizons are relatively straight
forward.'' \39\
---------------------------------------------------------------------------
\37\ NERC Petition at 22.
\38\ RFC Reliability Standards Development Procedure, at 3 (May
22, 2008) available at https://www.rfirst.org/Documents/Standards/Reliability%20Standards%20Developmental%20Procedure.pdf.
\39\ NERC Petition at 24.
---------------------------------------------------------------------------
23. The Commission agrees with NERC that it is important to
identify the time horizons for each Reliability Standard. However, time
horizons are not critical to our determination of whether to approve
this proposed Reliability Standard. As the Commission has previously
stated, the ``most critical element of a Reliability Standard is the
Requirements.'' \40\ Moreover, the Commission notes that with respect
to proposed regional Reliability Standard BAL-502-RFC-02, the time
horizon ``Long-Term Planning'' can be gleaned from the context of the
standard for the purpose of determining the severity of a violation
risk factor, or for determining the penalty for a violation. However,
the Commission notes that RFC currently is in the process of modifying
its RSDP such that it will be required to use the most current version
of the approved NERC Reliability Standard template when developing a
RFC regional Reliability Standard.\41\ NERC's ``Template Guide for New
Standards,'' ``Template Quality Review of Standards,'' and ``Time
Horizons'' documents all call for the inclusion of time horizons in new
Reliability Standards.\42\ Thus RFC's proposed change to its RSDP would
require RFC to tag each new Reliability Standard Requirement with a
time horizon. We believe that the identification of the appropriate
time horizon for each Requirement is useful and improves clarity and
consistency in compliance assessments. Because RFC appears to be moving
toward requiring the assignment of time horizons as part of its
standard drafting process, as well as the benefits of assigning time
horizons, the Commission proposes to direct RFC to add time horizons to
the two main Requirements when RFC reviews regional Reliability
Standard BAL-502-RFC-02 in its scheduled five-year review.
---------------------------------------------------------------------------
\40\ Order No. 693 NOPR, FERC Stats. & Regs., Proposed
Regulations 2004-2007, ] 32,608 at p. 105.
\41\ RFC project SDP-501-RFC-03 was posted for 15-day category
ballot the ``Draft 2 Standards Development Procedure'' on Sept. 1,
2010 and can be found on RFC's Web site at https://rsvp.rfirst.org/SDP501RFC03/default.aspx.
\42\ The ``Template Guide for New Standards,'' ``Template
Quality Review of Standards,'' and ``Time Horizons'' documents can
all be found on the NERC Web site at https://www.nerc.com/commondocs.php?cd=2.
---------------------------------------------------------------------------
D. Proposed Effective Date
24. Proposed regional Reliability Standard BAL-502-RFC-02's stated
effective date is ``upon RFC Board approval,'' which occurred on
December 4, 2008. NERC raises the concern that ``[t]he effective date
should follow the latest language found in the [NERC] standards
template to meet the needs of the compliance program.'' \43\ NERC's
``standards template'' provides that the effective date should be ``the
first day of the first quarter after regulatory approval.'' \44\ RFC
responded that the proposed RFC Board approval effective date set forth
in BAL-502-RFC-02 is appropriate because of the regional nature of the
Standard and because the
[[Page 66042]]
Requirements under BAL-502-RFC-02 are already being implemented.
Specifically, RFC noted that upon RFC Board approval, BAL-502-RFC-02
became effective and enforceable with respect to RFC members under
their ``Terms of Membership'' contained in RFC's bylaws.\45\ Because
BAL-502-RFC-02 only applies to planning coordinators within RFC's
region, all of which are RFC members, BAL-502-RFC-02's Requirements are
currently effective. As such, no additional implementation time is
required.\46\ RFC acknowledges that upon Commission approval, the
Reliability Standard will be mandatory and enforceable, and that non-
compliance will be subject to financial penalties.
---------------------------------------------------------------------------
\43\ NERC Petition at 22.
\44\ Id.
\45\ Pursuant to RFC's bylaws, RFC members are subject to a
regional Reliability Standard once the Standard is approved by the
RFC Board. Although a Board-approved Standard is enforceable under
the RFC bylaws as a term of membership, a member would not be
subject to potential financial penalties. See NERC Petition at 25.
\46\ Id.
---------------------------------------------------------------------------
25. We propose to find that with respect to proposed Reliability
Standard BAL-502-RFC-02, no additional implementation time is required
as the four registered planning coordinators in the RFC region, as RFC
members, are already operating under the Standard.\47\ There are no
other planning coordinators to whom the requirements will apply after
Commission approval. While we note that reliability standards are
generally implemented prospectively, in this case the real impact of
Commission approval is to make BAL-502-RFC-02 prospectively enforceable
through civil penalties. Accordingly, the Commission proposes that
Reliability Standard BAL-502-RFC-02 will become mandatory and
enforceable on the effective date of the Commission's final rule
approving the Reliability Standard.
---------------------------------------------------------------------------
\47\ The Commission notes that under the current NERC compliance
registry entities register as ``planning authorities,'' not
``planning coordinators.'' NERC defines ``planning coordinator'' in
its Glossary by simply referencing ``See Planning Authority.'' The
Commission understands that for reliability purposes planning
authorities and planning coordinators are interchangeable. Thus any
entity registered with NERC as a planning authority is subject to
any Reliability Standard that applies to planning coordinators.
---------------------------------------------------------------------------
E. Provision of Data
26. Proposed Reliability Standard BAL-502-RFC-02 requires planning
coordinators to perform a resource adequacy analysis and assessment.
Gathering data is a necessary component of doing so. The Commission is
concerned that proposed Reliability Standard BAL-502-RFC-02 does not
require other entities (load-serving entities, balancing authorities,
transmission operators, resource planners, or transmission planners) to
provide the planning coordinators subject to BAL-502-RFC-02 the
necessary data for the resource adequacy analysis. In short, the
Commission is concerned that planning coordinators will be subject to a
mandatory and enforceable Reliability Standard without the necessary
tools to fulfill the Standard's Requirements. The Commission recognizes
that this concern is somewhat alleviated by the fact that, within the
RFC, many of the planning coordinators are also the entities that would
have the needed data,\48\ or may obtain some of the needed data as a
result of some continent-wide Reliability Standards' Requirements.\49\
The Commission invites comment on whether the planning coordinators
have encountered problems with collecting necessary data in order to
complete the resource adequacy assessment that is the subject of BAL-
502-RFC-02.
---------------------------------------------------------------------------
\48\ The four planning coordinators currently registered in RFC
are also registered as other functional entities. American
Transmission Co., LLC and ITC Transmission are both registered as
transmission owners, transmission operators and transmission
planners. Midwest ISO is registered as a balancing authority,
interchange authority, reliability coordinator and transmission
service provider. PJM is registered as balancing authority,
interchange authority, reliability coordinator, resource planner,
transmission operator, transmission planner, and transmission
service provider.
\49\ For example, it appears that the following continent-wide
Reliability Standards allow planning coordinators to obtain data
needed to conduct the resource adequacy analysis and assessment: (i)
MOD-001, Requirement R9 (requires transmission service providers to
provide data regarding available transfer capability or available
flowgate capability calculations to the planning coordinator upon
request); (ii) MOD-004, Requirement R9 (requires transmission
service providers and transmission planners to provide data used for
determining or allocating CBM to the planning coordinator upon
request); (iii) MOD-008, Requirement R3 (requires transmission
operators to provide the TRM implementation document to the planning
coordinator upon request); (iv) PRC-023, Requirements R2 and R3
(gives planning coordinators access to facility ratings and the
identification of facilities critical to reliability); and (v) TPL-
001, TPL-002, TPL-003 and TPL-004 (gives planning coordinators
access to data related to the determination of whether the
transmission system is planned to meet firm demand under certain
conditions).
---------------------------------------------------------------------------
F. Regional Definitions
27. Proposed regional Reliability Standard BAL-502-RFC-02 includes
four new definitions that apply only to the RFC region: Resource
Adequacy, Net Internal Demand, Peak Period, and Year One. NERC plans to
publish the definitions in a distinct section of the NERC Glossary
noting their limited applicability to entities within RFC.
28. The Commission proposes to accept the four new defined terms to
be applicable only in the RFC region. However, the Commission cautions
NERC and the Regional Entities to be aware of ``a potential re-
proliferation of regional terminology, and consequently, the need to
prevent possible inconsistent use of terminology among regions.'' \50\
---------------------------------------------------------------------------
\50\ Western Electricity Coordinating Council Regional
Reliability Standard Regarding Automatic Time Error Correction,
Order No. 723, 127 FERC ] 61,176, at P 39 (2009) (Final Rule).
---------------------------------------------------------------------------
29. For example, the Commission notes that RFC's proposed term
``Resource Adequacy'' is used in NERC's continent-wide Reliability
Standard MOD-004-1 \51\ as well as in NERC's definitions of
``Generation Capability Import Requirement'' \52\ and ``Resource
Planner'' \53\ as set forth in NERC's Glossary. While RFC's definition
of ``Resource Adequacy'' does not appear to conflict with the use of
this term within the continent-wide Reliability Standard MOD-004-1 or
in NERC's Glossary, the addition of ``Resource Adequacy'' as a defined
regional term highlights the need for NERC to remain vigilant regarding
re-proliferation of regional terminology. This is particularly relevant
with respect to terms like ``Resource Adequacy'' where other Regional
Entities may have differing definitions of resource adequacy and
differing understandings of how those definitions apply to the
continent-wide Reliability Standard MOD-004-1 and NERC's defined terms
``generation capability import requirement'' and ``resource planner.''
Accordingly, the Commission urges NERC and the Regional Entities to be
vigilant to assure that any proposed regional definition is consistent
with both NERC definitions and the approved terms used in other
regions.
---------------------------------------------------------------------------
\51\ Reliability Standard MOD-004-1--Capacity Benefit Margin,
Requirements R4.1, R5.1 and R6.1 each include a bullet stating:
``Reserve margin or resource adequacy requirements established by
other entities, such as municipalities, state commissions, regional
transmission organizations, independent system operators, Regional
Reliability Organizations, or regional entities.'' (Emphasis added).
\52\ ``Generation Capability Import Requirement'' is defined in
the Glossary as: ``The amount of generation capability from external
sources identified by a Load-Serving Entity (LSE) or Resource
Planner (RP) to meet its generation reliability or resource adequacy
requirements as an alternative to internal resources.''
\53\ ``Resource Planner'' is defined as: ``The entity that
develops a long-term (generally one year and beyond) plan for the
resource adequacy of specific loads (customer demand and energy
requirements) within a Planning Authority Area.''
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[[Page 66043]]
G. Technical Recommendation (Resources Beyond RFC Footprint)
30. With respect to proposed BAL-502-RFC-02, NERC raises the
concern of ``how entities within RFC that have load and resources
outside the RFC footprint account for these resources in their
[resource adequacy] analysis.'' \54\ Specifically, NERC asked RFC to
clarify if planning coordinators within the RFC footprint are expected
to only include RFC load and resources in the analysis. RFC responded
to NERC's technical recommendation stating:
---------------------------------------------------------------------------
\54\ NERC Petition at 24.
The intent is to cover all load within the RFC footprint.
Planning Coordinators may include load outside the RFC footprint as
deemed appropriate. Even if a Planning Coordinator has load outside
of the ReliabilityFirst footprint, as long as it operates as a
single area, the adequacy of that Planning Coordinator area will
indicate adequacy of the part of the area within the
ReliabilityFirst footprint. From a converse perspective, if the
Planning Coordinator operates as a single area, that area must be
assessed as a whole or the assessment will be inadequate for the
area within the RFC footprint. (If transmission constraints exist,
the Planning Coordinator's constrained areas would have to be
addressed separately in any event.) \55\
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\55\ NERC Petition at Exhibit C, NERC's April 17, 2009 Quality
Assurance Review Summary at 4.
The Commission generally agrees with the response provided by RFC.
However, as discussed in detail below, the Commission expects that a
planning coordinator may benefit from a common process for including
resources and loads outside of the RFC footprint in its resource
adequacy analysis.
31. As RFC noted in its response to NERC on this issue that in
order to perform a valid assessment, it may be necessary to represent a
portion of areas outside of the RFC footprint in order to determine the
impact those areas may have on the footprint being analyzed. RFC has
incorporated into the proposed regional Reliability Standard a high
level of detail necessary to perform a valid assessment. Similarly, the
Commission notes how NERC's continent-wide transmission planning
Reliability Standards \56\ require a valid assessment, and explicitly
state in the Standard what is expected to be completed in order to have
a valid assessment. One important aspect of a valid assessment is that
it should include an appropriate model of areas outside of the area
being analyzed in order for the analysis to accurately represent what
could be expected during actual operation.\57\
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\56\ Transmission Planning Reliability Standards TPL-001
Requirement R1, TPL-002 Requirement R1, TPL-003 Requirement R1, and
TPL-004 Requirement R1 all require a valid assessment stating: ``The
Planning Authority and Transmission Planner shall each demonstrate
through a valid assessment. * * *'' Further, the sub-requirements
under Requirement R1 of each of the above-identified transmission
planning Reliability Standards detail what is expected in order to
have a valid assessment.
\57\ Requirement R1.3.5 of Reliability Standards TPL-001 through
TPL-003 and Requirement 1.3.4 of Reliability Standard TPL-004 state
that in order to have a valid assessment, the simulation shall
``have all projected firm transfers modeled.'' This is one example
of how areas outside of the area being analyzed must be
appropriately modeled in order to simulate the impact on the area
being analyzed.
---------------------------------------------------------------------------
Otherwise, the resource adequacy analysis could be skewed by
showing adequacy within the RFC footprint while leaving out an
inadequate area outside of the RFC footprint. To avoid this potential
issue, the Commission expects that a RFC planning coordinator would
have a common process or procedure that addresses the planning reserves
assessments, which could include either (i) a methodology to determine
whether or how the planning coordinator would include resources and
loads outside of the RFC footprint in its resource adequacy analysis or
(ii) models which the resource adequacy assessment should utilize that
would already include the appropriate modeling of external areas. The
Commission seeks comments on any concerns or suggestions to address
load and resources outside of the RFC footprint during a planning
assessment and also seeks comments on how entities currently perform
this task or other similar planning tasks where load and resources
occur outside of boundaries required by the assessment.
H. Planning Gap Identification
32. Proposed regional Reliability Standard BAL-502-RFC-02 includes
two main Requirements: (1) To annually perform and document resource
adequacy analysis (R1); and (2) to annually document the projected load
and resource capability for each area identified in the resource
adequacy analysis (R2). BAL-502-RFC-02 does not include a Requirement
to document any gap between the planning reserve margin calculated in
R1.1 (the amount of planning reserve needed to ensure a ``one day in
ten year'' criterion) and the actual planning reserve determined in the
resource adequacy analysis.
33. The Commission believes that it would be useful for planning
coordinators to identify and document a deficiency in planning
reserves. Identification of a planning gap could help ensure that
entities are aware of potential risks regarding the capability to
balance resources and demand in a planning timeframe. Acknowledging
potential risk to the Bulk-Power System during the planning timeframe
would allow affected entities time to develop a solution before the
identified deficiency in planning reserves leads to adverse reliability
impacts. For example, NERC's continent-wide transmission planning
Reliability Standards \58\ include Requirements for entities to develop
a corrective action plan when system simulations indicate an inability
of the systems to respond as prescribed in the Standards. Accordingly,
the Commission proposes to direct RFC, when reviewing BAL-502-RFC-02
during its scheduled five-year review, to consider modifying BAL-502-
RFC-02 to include a Requirement to identify any gap between the needed
amount of planning reserves defined in Requirement R1.1 and the
planning reserves determined from the resource adequacy analysis. This
would be a documentation Requirement only and would not require
entities to install additional generation or transmission capacity.
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\58\ See Reliability Standards TPL-001-0, Requirements R2 and
R3; TPL-002-0, Requirements R2 and R3; TPL-003-0, Requirements R2
and R3; and TPL-004-0, Requirements R2 and R3.
---------------------------------------------------------------------------
I. Violation Risk Factors/Violation Security Levels
34. To determine a base penalty amount for a violation of a
Requirement within a Reliability Standard, NERC, or in this case RFC as
the developer of proposed Reliability Standard BAL-502-RFC-02, must
first determine an initial range for the base penalty amount. To do so,
RFC is to assign a VRF to each Requirement and sub-Requirement of a
Reliability Standard that relates to the expected or potential impact
of a violation of the Requirement on the reliability of the Bulk-Power
System. The Commission has established guidelines for evaluating the
validity of each VRF assignment.\59\
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\59\ See North American Electric Reliability Corp., 119 FERC ]
61,145, order on reh'g, 120 FERC ] 61,145, at P 8-13 (2007)
(Violation Risk Factor Rehearing Order). The guidelines are: (1)
Consistency with the conclusions of the Blackout Report; (2)
consistency within a Reliability Standard; (3) consistency among
Reliability Standards; (4) consistency with NERC's definition of the
violation risk factor level; and (5) treatment of requirements that
co-mingle more than one obligation.
---------------------------------------------------------------------------
35. The Reliability Standard developer also is to assign each
Requirement and sub-Requirement one of four VSLs--low, moderate, high,
and severe--as measurements for the degree to which the Requirement was
violated in a specific circumstance. On June 19, 2008, the Commission
issued an order
[[Page 66044]]
establishing four guidelines for the development of VSLs.\60\
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\60\ North American Electric Reliability Corp., 123 FERC ]
61,284, at P 20-35 (Violation Severity Level Order), order on reh'g
and compliance, 125 FERC ] 61,212 (2008). The guidelines provide
that VSL assignments should: (1) Not lower the current level of
compliance; (2) ensure uniformity and consistency in the
determination of penalties; (3) be consistent with the corresponding
requirement; and (4) be based on a single violation.
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36. With respect to proposed Reliability Standard BAL-502-RFC-02,
RFC assigned VRFs only to the two main Requirements and did not propose
VRFs for any of the sub-Requirements.\61\ Requirement R1 of BAL-502-
RFC-02 is assigned a ``medium'' VRF and Requirement R2 is assigned a
``lower'' VRF. Similarly, RFC assigned VSLs only to the main
Requirements, R1 and R2, of proposed BAL-502-RFC-02, and not to any of
the sub-Requirements. NERC notes that RFC's assignment of both VRFs and
VSLs only to the main Requirements is consistent with NERC's August 10,
2009 Informational Filing Regarding the Assignment of VRFs and
VSLs.\62\
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\61\ 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 VRFs and VSLs
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.'' As directed, on March 5, 2010, NERC submitted a
comprehensive approach that is currently pending with the Commission
in Docket No. RR08-4-005.
\62\ NERC Petition at 24.
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37. On May 5, 2010, NERC incorporated by reference into Docket No.
RR08-4-005,\63\ its August 10, 2009 information filing in which NERC
proposes assigning VRFs and VSLs only to the main Requirements in each
Reliability Standard, and not to the sub-Requirements. Because the VRFs
and VSLs for both Requirements R1 and R2 of proposed Reliability
Standard BAL-502-RFC-02 are affected by the NERC's pending petition, we
propose to defer discussion on the proposed VRFs and VSLs assigned to
BAL-502-RFC-02 until after we act on NERC's petition in Docket No.
RR08-4-005.
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\63\ Docket No. RR08-4-005 comprises NERC's March 5, 2010
Violation Severity Level Compliance Filing submitted in response to
Order No. 722. See Order No. 722, 126 FERC ] 61,255 at P 45.
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J. Summary
38. In summary, proposed regional Reliability Standard BAL-502-RFC-
02 appears to be just, reasonable, not unduly discriminatory or
preferential, and in the public interest. Accordingly, the Commission
proposes to approve regional Reliability Standard BAL-502-RFC-02 as
mandatory and enforceable and to accept the four related defined terms
as terms applicable to the RFC region only. In addition, the Commission
proposes to defer discussion on the proposed VRFs and VSLs, as
described above. The Commission invites comments on these proposals.
IV. Information Collection Statement
39. The Office of Management and Budget (OMB) regulations require
approval of certain information collection requirements imposed by
agency rules.\64\ 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. The Paperwork Reduction Act (PRA) \65\ requires each federal
agency to seek and obtain OMB approval before undertaking a collection
of information directed to ten or more persons or contained in a rule
of general applicability.\66\
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\64\ 5 CFR 1320.8.
\65\ 44 U.S.C. 3501-3520.
\66\ OMB's regulations at 5 CFR 1320.3(c)(4)(i) require that
``Any recordkeeping, reporting, or disclosure requirement contained
in a rule of general applicability is deemed to involve ten or more
persons.''
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40. The Commission is submitting these reporting and recordkeeping
requirements to OMB for its review and approval under section 3507(d)
of the PRA. Comments are solicited on the Commission's need for this
information, whether the information will have practical utility, the
accuracy of provided burden estimates, ways to enhance the quality,
utility, and clarity of the information to be collected, and any
suggested methods for minimizing the respondent's burden, including the
use of automated information techniques.
41. This Notice of Proposed Rulemaking (NOPR) proposes to approve
one new regional Reliability Standard, BAL-502-RFC-02, that was
developed by RFC, a Regional Entity, and submitted by NERC as the ERO.
The proposed regional Reliability Standard requires planning
coordinators within the RFC geographical footprint to analyze, assess
and document resource adequacy, annually, and to document and post
projected load and resource capability in each area and transmission-
constrained sub-area identified in the resource adequacy assessment.
The proposed regional Reliability Standard, which applies to
approximately four planning coordinators located in the eastern portion
of the U.S., does not require planning coordinators to file information
with the Commission. It does require planning coordinators to develop,
document, publicly post, and retain certain information, subject to
compliance monitoring by RFC. However, the Commission does not believe
that approval of the RFC regional Reliability Standard will result in a
substantive increase in reporting burdens because it implements the
current practices in RFC. As RFC has represented, the affected RFC-
member planning coordinators have been subject to these requirements
since August 2009 and would continue to be subject to them even if the
Commission did not approve BAL-502-RFC-02 as a regional Reliability
Standard. Thus, the Commission finds that the requirement to develop,
document, and maintain information in the regional Reliability Standard
is a current and ongoing requirement for RFC members and, therefore,
the Commission's proposed action in this Notice of Proposed Rulemaking
would not impose any additional burden on RFC-member planning
coordinators. The Commission therefore concludes that this proposed
rule will not substantively increase the reporting burden nor impose
any additional information collection requirements. The proposed
regional Reliability Standard is a new standard and was not included in
the original standards submitted for review and approval by OMB. In
addition, Commission approval of proposed regional Reliability Standard
BAL-502-RFC-02 makes the standard mandatory and enforceable. Therefore,
the Commission will submit this proposed rule to OMB for review and
approval of the reporting requirements and propose a de minimis burden
to reflect the prior implementation by RFC as part of its region's
standard practices.
42. The Commission does not foresee any impact on the reporting
burden for small businesses.
43. Based on currently available information and the fact that the
burden is an existing part of the business process for registered
planning coordinators in the RFC region, the Commission estimates that
the increased Public Reporting Burden is de minimis as follows:
[[Page 66045]]
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Number of Number of Hours per Total annual
Proposed data collection FERC-725-H respondents responses respondent hours
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Registered planning coordinators \67\ 4 1 10 40
in the RFC region....................
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Total............................... ................ ................ ................ 40
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Information Collection Costs: The Commission seeks comments on the
costs to comply with these requirements.
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\67\ At this time, there are only four registered planning
coordinators in the RFC region.
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Total annual costs = $2,651.41 ((40 hours/2080 hours/year)
x $137,874/year).
Title: (proposed) FERC-725-H, Regional Reliability
Standard BAL-502-RFC-02 (Planning Resource Adequacy Analysis,
Assessment and Documentation).
Action: Proposed Collection of Information.
OMB Control No: To Be Determined.
Respondents: Registered planning coordinators in the RFC
region.
Frequency of Responses: On Occasion.
Necessity of the Information: The proposed Regional
Reliability Standard requires planning coordinators to document and
maintain, for two years, their resource adequacy analyses and the
projected load and resource capability subject to review by the
Commission, NERC, and RFC to ensure compliance with the Reliability
Standard.
Internal Review: The Commission has reviewed the proposed
regional Reliability Standard BAL-502-RFC-02 and believes it to be
just, reasonable, not unduly discriminatory or preferential, and in the
public interest. The Commission has assured itself, by means of
internal review, that there is specific, objective support for the
burden estimates associated with the information requirements.
44. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426 [Attention: Ellen Brown, Office
of the Executive Director, Phone: (202) 502-8663, fax: (202) 273-0873,
e-mail: DataClearance@ferc.gov]. Comments on the requirements of this
order may also be sent to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, DC 20503
[Attention: Desk Officer for the Federal Energy Regulatory Commission].
For security reasons, comments should be sent by e-mail to OMB at
oira_submission@omb.eop.gov. Please reference FERC-725H and the docket
number of this proposed rulemaking in your submission.
V. Environmental Analysis
45. 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.\68\ 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.\69\ The actions proposed
herein fall within this categorical exclusion.
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\68\ Regulations Implementing the National Environmental Policy
Act of 1969, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs.,
Regulations Preambles 1986-1990 ] 30,783 (1987).
\69\ 18 CFR 380.4(a)(2)(ii).
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