Version One Regional Reliability Standard for Resource and Demand Balancing, 65964-65975 [2010-27134]
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Rules and Regulations
Under section 215 of the
Federal Power Act, the Commission
hereby remands a revised regional
Reliability Standard developed by the
Western Electricity Coordinating
Council and approved by the North
American Electric Reliability
Corporation, which the Commission has
certified as the Electric Reliability
Organization responsible for developing
and enforcing mandatory Reliability
Standards. The revised regional
Reliability Standard, designated by
WECC as BAL–002–WECC–1, would set
revised Contingency Reserve
requirements meant to maintain
scheduled frequency and avoid loss of
firm load following transmission or
generation contingencies.
DATES: Effective Date: This rule will
become effective November 26, 2010.
SUMMARY:
[FR Doc. 2010–27129 Filed 10–26–10; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM09–15–000; Order No. 740]
Version One Regional Reliability
Standard for Resource and Demand
Balancing
Issued October 21, 2010.
Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:
FOR FURTHER INFORMATION CONTACT:
Nick Henery (Technical Information),
Office of Electric Reliability, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–8636.
Scott Sells (Technical Information),
Office of Electric Reliability, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–6664.
A. Cory Lankford (Legal Information),
Office of General Counsel, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–6711.
SUPPLEMENTARY INFORMATION:
Table of Contents
Paragraph
Nos.
I. Background ..........................................................................................................................................................................................
A. Mandatory Reliability Standards ...............................................................................................................................................
B. Western Electricity Coordinating Council .................................................................................................................................
C. WECC Regional Reliability Standard BAL–002–WECC–1 .......................................................................................................
II. Discussion ..........................................................................................................................................................................................
A. Due Weight and Effect of Remand ............................................................................................................................................
B. Contingency Reserve Restoration Period ...................................................................................................................................
C. Calculation of Minimum Contingency Reserve ........................................................................................................................
D. Use of Firm Load To Meet Contingency Reserve Requirement ...............................................................................................
E. Demand-Side Management as a Resource .................................................................................................................................
F. Miscellaneous ..............................................................................................................................................................................
III. Information Collection Statement ....................................................................................................................................................
IV. Environmental Analysis ...................................................................................................................................................................
V. Regulatory Flexibility Act .................................................................................................................................................................
VI. Document Availability .....................................................................................................................................................................
VII. Effective Date and Congressional Notification ..............................................................................................................................
Before Commissioners: Jon Wellinghoff,
Chairman; Marc Spitzer, Philip D.
Moeller, John R. Norris, and Cheryl A.
LaFleur
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1. Pursuant to section 215 of the
Federal Power Act (FPA),1 the
Commission hereby remands a revised
regional Reliability Standard developed
by the Western Electricity Coordinating
Council (WECC) and approved by the
North American Electric Reliability
Corporation (NERC), which the
Commission has certified as the Electric
Reliability Organization (ERO)
responsible for developing and
enforcing mandatory Reliability
Standards.2 The revised regional
Reliability Standard, designated by
WECC as BAL–002–WECC–1,3 is meant
1 16
U.S.C. 824o (2006).
American Electric Reliability Corp., 116
FERC ¶ 61,062, order on reh’g & compliance, 117
FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc.
v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
3 NERC designates the version number of a
Reliability Standard as the last digit of the
Reliability Standard number. Therefore, original
2 North
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to ensure that adequate resources are
available at all times to maintain
scheduled frequency, and avoid loss of
firm load following transmission or
generation contingencies. As discussed
below, the Commission finds that the
proposed regional Reliability Standard
does not meet the statutory criteria for
approval that it be just, reasonable, not
unduly discriminatory or preferential,
and in the public interest.4
2. The Commission remands the
proposed regional Reliability Standard
based on concerns that WECC has not
provided adequate technical support to
demonstrate that the requirements of the
proposed regional Reliability Standard
are sufficient to ensure the reliable
operation of the Bulk-Power System
within WECC. Specifically, WECC’s
data indicates that extending the reserve
restoration period from 60 to 90 minutes
presents an unreasonable risk that a
second major contingency could occur
Reliability Standards end with ‘‘-0’’ and modified
version one Reliability Standards end with ‘‘-1.’’
4 16 U.S.C. 824o(d)(2).
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before reserves are restored after an
initial contingency. Without further
technical justification demonstrating
that this less stringent requirement will
adequately support reliability in the
Western Interconnection, the
Commission is unable to determine that
the proposed regional Reliability
Standard is just, reasonable, not unduly
discriminatory or preferential, and in
the public interest. Accordingly, we
remand WECC regional Reliability
Standard BAL–002–WECC–1 to the ERO
so that the Regional Entity may develop
further modifications consistent with
this final rule.5
5 In Order No. 672, the Commission found that it
should order only the ERO to modify a Reliability
Standard because the ERO is the only entity that
may directly submit a proposed Reliability
Standard to the Commission for approval. Rules
Concerning Certification of the Electric Reliability
Organization; Procedures for the Establishment,
Approval, and Enforcement of Electric Reliability
Standards, Order No. 672, 71 FR 8662 (Feb. 17,
2006), FERC Stats. & Regs. ¶ 31,204, at P 423, order
on reh’g, Order No. 672–A, 71 FR 19814 (Apr. 18,
2006), FERC Stats. & Regs. ¶ 31,212 (2006).
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I. Background
A. Mandatory Reliability Standards
3. Section 215 of the FPA requires a
Commission-certified ERO to develop
mandatory and enforceable Reliability
Standards, which are subject to
Commission review and approval. Once
approved, the Reliability Standards may
be enforced by the ERO, subject to
Commission oversight, or by the
Commission independently.6
4. Reliability Standards that the ERO
proposes to the Commission may
include Reliability Standards that are
proposed to the ERO by a Regional
Entity.7 A Regional Entity is an entity
that has been approved by the
Commission to enforce Reliability
Standards under delegated authority
from the ERO.8 When the ERO reviews
a regional Reliability Standard that
would be applicable on an
interconnection-wide basis and that has
been proposed by a Regional Entity
organized on an interconnection-wide
basis, the ERO must rebuttably presume
that the regional Reliability Standard is
just, reasonable, not unduly
discriminatory or preferential, and in
the public interest.9 In turn, the
Commission must give ‘‘due weight’’ to
the technical expertise of the ERO and
of a Regional Entity organized on an
interconnection-wide basis.10
5. In Order No. 672, the Commission
urged uniformity of Reliability
Standards, but recognized a potential
need for regional differences.11
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.12
B. Western Electricity Coordinating
Council
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6. On April 19, 2007, the Commission
accepted delegation agreements between
NERC and each of eight Regional
6 16
U.S.C. 824o(e)(3).
U.S.C. 824o(e)(4).
8 16 U.S.C. 824o(a)(7) and (e)(4).
9 18 CFR 39.5 (2010).
10 16 U.S.C. 824o(d)(2).
11 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 290.
12 Id. P 291.
7 16
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Entities.13 In its order, the Commission
accepted WECC as a Regional Entity
organized on an Interconnection-wide
basis. As a Regional Entity, WECC
oversees transmission system reliability
in the Western Interconnection. The
WECC region encompasses nearly 1.8
million square miles, including 14
western U.S. states, the Canadian
provinces of Alberta and British
Columbia, and the northern portion of
Baja California in Mexico.
7. In June 2007, the Commission
approved eight regional Reliability
Standards for WECC including the
currently effective regional Reliability
Standard for operating reserves, WECC–
BAL–STD–002–0.14 The Commission
found that the current regional
Reliability Standard was more stringent
than the corresponding NERC
Reliability Standard, BAL–002–0, since
WECC required a more stringent
minimum reserve requirement than the
continent-wide requirement.15
Moreover, the Commission found that
WECC’s requirement to restore
contingency reserves within 60 minutes
was more stringent than the 90 minute
restoration period as set forth in NERC’s
BAL–002–0.16
8. The Commission directed WECC to
develop certain minor modifications to
WECC–BAL–STD–002–0, as identified
by NERC in its filing letter for the
current standard.17 For example, the
Commission determined that: (1)
Regional definitions should conform to
definitions set forth in the NERC
Glossary of Terms Used in Reliability
Standards (NERC Glossary) unless a
specific deviation has been justified;
and (2) documents that are referenced in
the Reliability Standard should be
attached to the Reliability Standard. The
Commission also found that it is
important that regional Reliability
Standards and NERC Reliability
Standards achieve a reasonable level of
consistency in their structure so that
there is a common understanding of the
elements. Finally, the Commission
directed WECC to address stakeholder
concerns regarding ambiguities in the
terms ‘‘load responsibility’’ and ‘‘firm
transaction.’’ 18
C. WECC Regional Reliability Standard
BAL–002–WECC–1
9. On March 25, 2009, NERC
submitted a petition (NERC Petition) to
13 North American Electric Reliability Corp., 119
FERC ¶ 61,060, at P 432 (2007).
14 North American Electric Reliability Corp., 119
FERC ¶ 61,260, at P 53 (2007).
15 Id.
16 Id.
17 Id. P 55.
18 Id. P 56.
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the Commission seeking approval of
BAL–002–WECC–119 and requesting the
concurrent retirement of BAL–STD–
002–0.20 In that March petition, NERC
states that the proposed regional
Reliability Standard was approved by
the NERC Board of Trustees at its
October 29, 2008 meeting. NERC also
requests an effective date for the
regional Reliability Standard of 90
calendar days after receipt of applicable
regulatory approval.
10. The proposed regional Reliability
Standard contains three main
provisions. Requirement R1 provides
that each reserve sharing group 21 or
balancing authority must maintain a
minimum contingency reserve that is
the greater of (1) an amount of reserve
equal to the loss of the most severe
single contingency; or (2) an amount of
reserve equal to the sum of three percent
of the load and three percent of net
generation. Requirement R2 states that
each reserve sharing group or balancing
authority must maintain at least half of
the contingency reserve as spinning
reserve. Requirement R3 identifies
acceptable types of reserve to satisfy
Requirement R1:
R3.1. Spinning Reserve;
R3.2. Interruptible Load;
R3.3. Interchange Transactions
designated by the source Balancing
Authority as non-spinning
contingency reserve;
R3.4. Reserve held by the other entities
by agreement that is deliverable on
Firm Transmission Service;
R3.5. An amount of off-line generation
which can be synchronized and
generating; or
R.3.6. Load, other than Interruptible
Load, once the Reliability Coordinator
has declared a capacity or energy
emergency.
In addition, compliance measure M1
provides that a reserve sharing group or
balancing authority must have
documentation that it maintained 100
percent of required contingency reserve
levels ‘‘except within the first 105
minutes (15 minute Disturbance
Recovery Period, plus 90 minute
19 See 18 CFR 39.5(a) (requiring the ERO to
submit regional Reliability Standards on behalf of
a Regional Entity).
20 The proposed regional Reliability Standard is
not attached to the NOPR. It is, however, available
on the Commission’s eLibrary document retrieval
system in Docket No. RM09–15–000 and is on the
ERO’s Web site, available at https://www.nerc.com.
21 A ‘‘reserve sharing group’’ is a group whose
members consist of two or more balancing
authorities that collectively maintain, allocate, and
supply operating reserves required for each
balancing authority’s use in recovering from
contingencies within the group. See NERC Glossary,
available at https://www.nerc.com/docs/standards/
rs/Glossary_2009April20.pdf.
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Contingency Reserve Restoration
Period) following an event requiring the
activation of Contingency Reserves.’’ 22
11. The NERC Petition explains that,
because WECC developed the
modifications to the regional Reliability
Standard submitted in the instant
proceeding, and the standard applies on
an Interconnection-wide basis, NERC
must rebuttably presume that the WECC
Reliability Standard is just, reasonable,
not unduly discriminatory or
preferential, and in the public interest.23
NERC states that it agrees with WECC
that the proposed WECC regional
Reliability Standard establishes
requirements that are more stringent
than those provided in the
corresponding NERC Reliability
Standard.
12. On March 18, 2010, the
Commission issued a Notice of
Proposed Rulemaking (NOPR)
proposing to remand the proposed
regional Reliability Standard to the ERO
so that the Regional Entity may develop
further modifications.24 The
Commission’s proposal to remand the
proposed Regional Reliability Standard
was based on a lack of technical support
for the adoption of less stringent
requirements than those in the currently
effective WECC regional Reliability
Standard and out of concern that the
proposed regional Reliability Standard
is less stringent than the NERC
continent-wide Reliability Standard
pertaining to contingency reserves. The
Commission expressed particular
concern with respect to a provision in
the proposed regional Reliability
Standard that would permit a balancing
authority, when an emergency is
declared, to count ‘‘Load, other than
Interruptible Load’’ as contingency
reserve. The Commission understood
this provision to allow a balancing
authority to shed firm load when a
single contingency occurs instead of
procuring and utilizing generation or
demand response resource held in
reserve for contingencies to balance the
Bulk-Power System. The Commission
also proposed to direct WECC to
develop certain modifications to the
regional Reliability Standard that would
explicitly allow demand-side
management to be used as a resource for
contingency reserves.
13. In response to the NOPR,
comments were filed by 16 interested
22 Proposed WECC Reliability Standard BAL–
002–WECC–1, Compliance Measure M1.
23 See NERC Petition at 8; and 16 U.S.C.
824o(d)(3).
24 North American Electric Reliability Corp.,
NOPR, 75 FR 14,103 (March 24, 2010), FERC Stats.
& Regs. ¶ 32,653 (2010).
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parties.25 Several commenters,
including WECC, opposed the proposed
remand, while others supported it. In its
comments, WECC included
supplemental data to support the
Commission’s approval of the proposed
regional Reliability Standard. In the
discussion below, we address the issues
raised by these comments and, pursuant
to section 215(d)(4) of the FPA, we
adopt the NOPR proposal to remand the
proposed regional Reliability Standard.
II. Discussion
14. Applying the principal of due
weight to the technical expertise of
NERC and WECC, the Commission finds
that the proposed regional Reliability
Standard BAL–002–WECC–1 does not
meet the statutory criteria for approval,
that it be just, reasonable, not unduly
discriminatory or preferential, and in
the public interest. In particular, the
Commission is concerned that reliability
would be reduced upon approval of the
proposed regional Reliability Standard
because WECC’s data indicates that
extending the reserve restoration period
from 60 to 90 minutes would create an
unreasonable risk that a second major
contingency could occur before reserves
are restored after an initial contingency.
There must be sufficient technical
justification showing that the Western
Interconnection can be operated reliably
with the reduced stringency. The
Commission finds that the NERC and
the Regional Entity have failed to
demonstrate that the proposal is
adequate to ensure the reliability of the
Bulk-Power System within WECC.
Accordingly, under section 215(d)(4) of
the FPA, the Commission remands
regional Reliability Standard BAL–002–
WECC–1 to the ERO with instruction for
the Regional Entity to develop
modifications, as discussed below.
A. Due Weight and Effect of Remand
15. Several commenters point out
that, under section 215(d)(2) of the FPA,
the Commission must give due weight
to the technical expertise of the ERO
and WECC as the Regional Entity
organized on an Interconnection-wide
basis.26 These parties argue that,
applying the principal of due weight,
the Commission should approve the
proposed regional Reliability Standard.
In addition, NERC states that it must
rebuttably presume that a standard
developed by WECC is just, reasonable,
not unduly preferential, and in the
public interest. NERC states that, as a
Regional Entity organized on an
interconnection-wide basis, WECC has
25 See
Appendix A, List of Commenters.
NERC, WECC, MISO, WIRAB, and Xcel.
26 E.g.,
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exercised its technical expertise in
regard to this interconnection-wide
Reliability Standard, supplemented by
the additional technical analyses
provided in its response. Xcel agrees
and states that the Commission has not
allowed any deference to WECC and
stakeholder experts that worked
diligently to develop this Reliability
Standard.
16. Several commenters contend that
the proposed regional Reliability
Standard offers significant benefits over
the current version.27 Sempra states that
the proposed standard would advance
three goals: It simplifies reserve
accounting at balancing authorities by
clarifying which party carries reserves
for power imports and exports; it
includes renewable resources; and it
clarifies reserves responsibility. If the
Commission decides to remand the
proposed Reliability Standard, Sempra
urges the Commission to require
expedited procedures because of the
importance of replacing the current
regional Reliability Standard, which,
Sempra contends, contains its own
flaws and ambiguities. WECC argues
that remand of the proposed standard
would cause a greater probability of
frequency-related instability,
uncontrolled separation, or cascading
outages because the current WECC
standard does not take renewable
resources, such as wind and solar, into
account when calculating minimum
contingency reserve requirements.
17. By contrast, Puget Sound states
that, while FERC is required to give due
weight to the technical expertise of the
ERO no deference is due when the
action of the ERO and Regional Entity
are patently unreasonable and arbitrary.
Puget Sound contends that a regulatory
decision based on a review of only eight
hours of data, as provided by WECC,
cannot be reasonably explained or
considered to be supported by
substantial evidence. Powerex and NV
Energy agree that WECC provided
insufficient data in its request for
approval with respect to whether the
proposed regional Reliability Standard
is just and reasonable.
Commission Determination
18. Section 215(d)(2) of the FPA
provides that the Commission ‘‘shall
give due weight to the technical
expertise’’ of the ERO or a Regional
Entity organized on an Interconnectionwide basis ‘‘with respect to the content
of a proposed standard or modification.’’
As the Commission explained in Order
No. 672, the ERO or Interconnection27 E.g., NERC, WECC, Bonneville, Idaho Power,
NV Energy, SCE, WIRAB, and Xcel.
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wide Regional Entity ‘‘must justify to the
Commission its contention that the
proposed Reliability Standard is just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest.’’28 Thus, consistent with our
explanation in Order No. 672, it is
necessary for the ERO or Regional Entity
to explain adequately a Reliability
Standard or modifications to a
Reliability Standard.
19. The Commission has given due
weight to the technical expertise of the
Regional Entity as it is presented both
in the NERC Petition and in WECC’s
comments and supporting data and we
have determined that WECC provided
inadequate support for approval of the
proposed regional Reliability Standard.
In its petition, NERC provides a detailed
explanation of why it believes the
proposal satisfies the statutory criteria
for approval based on the guidance
provided by the Commission in Order
No. 672 regarding the factors it would
consider in making that
determination.29 However, this
explanation fails to adequately address
the substantive modifications to the
regional Reliability Standard. Moreover,
WECC’s comments and supplemental
data did not adequately address the
Commission’s concerns expressed in the
NOPR that the extension of the reserve
restoration period will maintain reliable
operation of the Western
Interconnection. Without adequate
explanation and technical justification,
we are unable to determine whether the
proposal satisfies the statutory criteria
for approval and, therefore, remand the
revised Reliability Standard to the ERO
with instruction for the Regional Entity
to develop modifications, as discussed
below.
20. The Commission does not take
lightly its authority to remand a
Reliability Standard. We understand
that before a Reliability Standard
reaches the Commission it must be
vetted through an intensive standard
development process. Nevertheless,
despite the efforts of the different
drafting team members who contributed
to the development of this regional
Reliability Standard, for the reasons
discussed below, we believe that the
statutory standard for approval has not
been met on the record before us.
21. We do not believe, as WECC
suggests, that this remand will cause a
greater probability of frequency-related
instability, uncontrolled separation or
cascading outages. WECC does not
28 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 345.
29 Order No. 672, FERC Stats. & Regs. ¶ 31,204 at
P 320–337.
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provide any supporting data or
technical analysis to support this claim.
By remanding the proposed regional
Reliability Standard, the Commission is
upholding the currently effective
regional Reliability Standard. The
Commission recognizes that the Western
Interconnection is experiencing
substantial growth in variable renewable
generation. We believe that the current
regional Reliability Standard has proved
effective for many years and will
continue to do so until WECC can
modify as necessary, through the
standards development process, this
regional Reliability Standard to ensure
adequate reserves to reliably
accommodate this expansion.
Furthermore, we decline to set
expedited procedures for the
development of a replacement regional
Reliability Standard, but WECC is free
to expedite its process to the extent
WECC finds appropriate.
B. Contingency Reserve Restoration
Period
22. The current regional Reliability
Standard sets a maximum contingency
reserve restoration period that is more
stringent than the continent-wide
requirement. NERC Reliability Standard
BAL–002–0 provides that a balancing
authority or reserve sharing group
responding to a disturbance must fully
restore its contingency reserves within
90 minutes following the disturbance
recovery period, which is set at 15
minutes.30 The current WECC regional
BAL Reliability Standard requires
reserve sharing groups and balancing
authorities to maintain 100 percent of
required operating reserve levels except
within the first 60 minutes following an
event requiring the activation of
operating reserves.31 In approving
WECC–BAL–STD–002–0, the
Commission found that WECC’s
requirement to restore contingency
reserves within 60 minutes was more
stringent than the 90 minute restoration
period set forth in NERC’s BAL–002–
0.32 WECC now proposes to replace the
current 60 minute restoration period
requirement with a new provision that
would require the restoration of
contingency reserves within 90 minutes
from the end of the disturbance recovery
period (15 minutes), thus matching the
continent-wide requirement.
30 Reliability Standard BAL–002–0, Requirements
R4 and R6.
31 WECC regional Reliability Standard WECC–
BAL–STD–002–0, Measure of Compliance WM1.
32 North American Electric Reliability Corp., 119
FERC ¶ 61,260 at P 53.
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NOPR Proposal
23. In the NOPR, the Commission
proposed to remand the regional
Reliability Standard BAL–002–WECC–1
based on, among other things, a lack of
any technical justification or analysis of
the potential increased risk to the
Western Interconnection resulting from
the increase in the contingency reserve
restoration period. The Commission
noted that, without sufficient data and
analysis, it is unable to determine
whether the increase in contingency
reserve restoration period is sufficient to
maintain the reliable operation of the
Bulk-Power System in the Western
Interconnection. The Commission also
noted that in the Western
Interconnection a significant number of
transmission paths are voltage or
frequency stability-limited, in contrast
to other regions of the Bulk-Power
System where transmission paths more
often are thermally-limited.
Disturbances that result in a stabilitylimited transmission path overload,
generally, must be responded to in a
shorter time frame than a disturbance
that results in a thermally-limited
transmission path overload. The
Commission stated its understanding
that this physical difference is one of
the reasons for the need for certain
provisions of regional Reliability
Standards in the Western
Interconnection.
Comments
24. WECC, supported by Bonneville,
Idaho Power, SCE, and Xcel, argues that
additional studies are unnecessary
because the proposed restoration period
is identical to the continent-wide
restoration period. WECC comments
that the Commission should defer to
WECC’s technical expertise in
concluding that more stringent
contingency reserve restoration period
is no longer necessary. WECC also offers
historical data that demonstrates that a
second contingency involving the loss
of a resource greater than 1000 MW
between 60 and 90 minutes after a first
contingency occurred six times in the
last 15 years or 0.4 events on an annual
basis, which, WECC argues, is
insufficient to require rejection of a
proposed standard on the basis of
reliability impact. Bonneville and Xcel
argue that increasing the contingency
reserve restoration period will result in
more efficient system operation without
sacrificing reliability. Xcel adds that it
will allow for more efficient
communication among balancing
authorities because the restoration
period will be closer to the e-tagging
system approval cycle.
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25. MISO comments that it is
imperative that the Commission give
due consideration to approving
modifications to Reliability Standards
so that Regional Entities can implement
changes as understanding grows and
experience is gained. MISO contends
that disallowance of reasonable
modifications, such as those presented
here, will have the unintended
consequence of fostering a reluctance to
develop other regional standards, or
encouraging a minimalist approach
when standards must necessarily be
developed. WECC echoes these
concerns and argues that there is no
requirement that a regional Reliability
Standard can only be modified in a
manner that makes it even more
stringent. Such a requirement, WECC
contends, would create a ‘‘one-way
ratchet’’ that would severely inhibit the
ability to adjust Reliability Standards to
meet changing conditions, would
encourage proposed standards reflecting
the ‘‘lowest common denominator’’ and
would fail to provide deference to the
technical expertise of an
interconnection-wide Regional Entity.
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Commission Determination
26. The Commission finds that the
extension of the reserve restoration
period has not been justified as an
acceptable level of risk within the
Western Interconnection. WECC’s own
analysis shows that, based on historical
experience, replacing the 60 minute
requirement with the continent-wide 90
minute requirement could result in a
second major contingency before
restoration of reserves would be
required, and that a second major
contingency occurred within WECC
during this extended time frame six
times in the last 15 years.33 WECC
argues that in the Western
Interconnection ‘‘instability and/or
underfrequency load shedding normally
would not occur in the absence of a
third contingency of significant
magnitude within the restoration
period.’’ 34 WECC’s generalization,
33 WECC’s analysis shows that, over the past 15
years, the proposed increased contingency reserve
restoration period would have resulted in 139 more
events within the proposed 90 minute contingency
reserve restoration period. Limiting the analysis to
losses of generation greater than 500 MW, there
were only 58 events occurring within the proposed
extended contingency reserve restoration period.
Limiting the analysis to losses of generation greater
than 1000 MW, there were only six events during
the extended contingency restoration period. WECC
contends that losses of less than 1,000 MW of
generation have a minimal impact on the system
frequency response of the Western Interconnection
and have minimal impacts on the reliability of the
interconnected system. WECC May 24, 2010
Comments at 13.
34 WECC May 24, 2010 Comments at 13 n.10.
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however, is unsupported by historical
quantification or documentation in this
record and, thus, does not persuade
us.35
27. While it is not inevitable that the
proposed extension of the contingency
reserve restoration period would result
in adverse reliability impacts in the
Western Interconnection, the data
provided shows that the Western
Interconnection could be exposed to the
potential for a major disturbance every
two to three years that could result in
frequency-related instability,
uncontrolled separation or cascading
outages. The Commission is particularly
concerned about these potential events
occurring in the Western
Interconnection because, as the
Commission discussed in the NOPR, it
is our understanding that a significant
number of transmission paths in the
Western Interconnection are voltage or
frequency stability-limited, in contrast
to other regions of the Bulk-Power
System where transmission paths more
often are thermally-limited.
Disturbances that occur in a stabilitylimited transmission path overload,
generally, must be responded to in a
shorter time frame than a disturbance
that occurs in a thermally-limited
transmission path overload.36 A thermal
limit is determined by how much a line
can overheat without damaging
equipment; lines that are thermallylimited can have short-term emergency
limits that are higher than the normal
line rating, since heating occurs over a
period of time. This is different from a
stability limit, which is determined by
a system-wide voltage or frequency
stability constraint, and loading the line
above this limit for any amount of time
could result in instability and cascading
outages.
28. The reliance on stability-limited
transmission paths becomes a concern
during the contingency reserve
restoration period because balancing
authorities rely on imported power from
external sources until the entity that had
the disturbance replaces the resource
lost during the disturbance.37 Since
35 WECC’s statement is consistent with a
statement made in a 2007 compliance filing that
‘‘WECC operates its system in such a manner that
the system is at least two contingencies away from
a cascading failure.’’ WECC Compliance Filing,
Docket No. RR07–11–000, at 5 (filed July 9, 2007).
Nevertheless, WECC is proposing to change its
operating conditions by extending the reserve
restoration period. Thus, it must provide adequate
technical justification that the revised requirements
will maintain reliable operation of the Bulk-Power
System in the Western Interconnection.
36 NOPR, FERC Stats. & Regs. ¶ 32,653 at P 37.
37 See NERC, Balancing and Frequency Control, at
6–10 (Nov. 2009), available at https://
www.nerc.com/docs/oc/rs/NERC_Balancing_
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stability-limited lines do not have
higher emergency ratings, as thermallylimited lines can, any disturbance that
would result in increasing flows over a
stability-limited line must be addressed
in a shorter time-frame than a
disturbance that only affects thermallylimited lines. There will be some
situations in which imports stress
stability-limited transmission lines. In
those circumstances, extending the
contingency reserve restoration period
would extend the amount of time the
imported power could stress the
stability limited transmission lines,
potentially leaving the Western
Interconnection in a stressed condition
that could result in adverse reliability
impacts if another disturbance were to
occur. On remand, we direct WECC to
develop a modification to the reserve
restoration period or provide evidence
demonstrating that extending the
reserve restoration period to 90 minutes
and adding a disturbance recovery
period of 15 minutes would not increase
the risk of a major disturbance in the
Western Interconnection.
29. The fact that the proposed
extension of the reserve restoration
period would match the continent-wide
requirement and, thus, would foster
certain operational efficiencies through
the use of the e-tagging system does not
allay our concerns that the extension
could be harmful to the reliable
operation of the Western
Interconnection. The e-tagging system is
an efficient tool used for day-ahead and
hour-ahead market accounting and as
input for day-ahead and hour-ahead
transfer capability analysis of scheduled
interchange transactions and
development of day-ahead and hourahead capacity and energy resource
schedules. As such, it may allow for
more efficient communication among
balancing authorities during operational
planning periods. However, in 2008, a
WECC task force expressed concern that
the ‘‘e-Tag and communications
processes are time consuming and
cumbersome when scheduling and
tagging the large amounts of energy
required to recover from system
emergencies, particularly in midhour.’’38 Although adoption of the etagging system may result in more
efficient communication among
transmission operators and balancing
and_Frequency_Control_Part_1_
9Nov2009_(Revision2).pdf.
38 WECC Disturbance Task Force, PacifiCorp East
February 14, 2008 Detailed Disturbance Report
stated in Conclusion 17 (Aug. 2008) available at
https://www.wecc.biz/committees/BOD/081308/
Lists/Agendas/1/
PacifiCorp%20East%20Disturbance%20Board%20
presentation%20Aug%2008%20Final.pdf.
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authorities for day-ahead and hourahead scheduling, this fact alone is not
sufficient to justify the potential
reliability impacts involved with
extending the reserve restoration period.
30. The Commission’s action in this
proceeding does not create a ‘‘one-way
ratchet’’ for the development of regional
Reliability Standards. In specific
circumstances, the Commission could
approve retirement of a more stringent
regional requirement if the Regional
Entity demonstrates that the continentwide Reliability Standard is sufficient to
ensure the reliability of that region. In
this case, however, WECC argued only
three years earlier that the added
stringency of the current regional
Reliability Standard was critical to the
reliable operation of the Western
Interconnection.39 We find that WECC
provided insufficient technical detail
and analysis for us to make a reasoned
determination that the proposed
requirement will adequately protect the
reliability of the region. Regional
Entities have the discretion to develop
regional Reliability Standards and
implement changes as understanding
grows and experience is gained without
concern that the Commission will
always hold them to their more
stringent requirements in all
circumstances regardless of the
provided justification. The Commission
will evaluate such proposed changes,
including those to a less stringent state,
on their merit so long as adequate
reliability is maintained. In this
instance, given WECC’s prior statements
and its own analysis that such an
extended restoration period could lead
to major system disturbances, WECC has
failed to demonstrate that its proposal
will maintain adequate reliability, and
therefore has failed to demonstrate that
its proposal is just, reasonable, and in
the public interest. Consequently, we
remand this proposal.
C. Calculation of Minimum Contingency
Reserve
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31. NERC’s Disturbance Control
Standard, continent-wide Reliability
Standard BAL–002–0, requires each
39 In its letter requesting approval of the current
regional Reliability Standards WECC states:
The WECC Operating Committee thereafter
undertook a comprehensive review of all WECC
criteria, policies, and guidelines in an effort to
identify all unique (i.e., those not in NERC
standards) and essential (i.e., necessary to protect
WECC reliability) criteria that it believed critical to
the reliability of the Western Interconnection. The
Operating Committee concluded that eight regional
standards, proposed for adoption here, are of the
highest priority.’’
NERC, Request for Approval of Regional
Reliability Standards, Docket No. RR07–11–000, at
4 (filed March 26, 2007) (NERC 2007 Petition).
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balancing authority or reserve sharing
group, at a minimum, to maintain at
least enough contingency reserve to
cover the most severe single
contingency. Similarly, requirement
WR1(a)(ii) of WECC’s current WECC–
BAL–STD–002–0 requires balancing
authorities to maintain a contingency
reserve of spinning and non-spinning
reserves (at least half of which must be
spinning), sufficient to meet the NERC
Disturbance Control Standard, BAL–
002–0, equal to the greater of: (1) the
loss of generating capacity due to forced
outages of generation or transmission
equipment that would result from the
most severe single contingency; or (2)
the sum of five percent of load
responsibility served by hydro
generation and seven percent of the load
responsibility served by thermal
generation. In approving the regional
BAL–STD–002–0 Reliability Standard,
the Commission noted that the regional
Reliability Standard is more stringent
than the NERC Reliability Standard,
BAL–002–0, because WECC requires a
more stringent minimum reserve
requirement than the continent-wide
requirement.
32. As proposed, Requirement R1 of
BAL–002–WECC–1 would require each
reserve sharing group or balancing
authority that is not a member of a
reserve sharing group to maintain a
minimum contingency reserve. NERC
contends that the proposed minimum
contingency reserve amount is more
stringent than that required by the
continent-wide Reliability Standard.40
NERC explains that, whereas
Requirement R3.1 of BAL–002–0
requires that each balancing authority or
reserve sharing group carry, at a
minimum, at least enough contingency
reserve to cover the most severe single
contingency, proposed Requirement
R1.1 of BAL–002–WECC–1 requires that
each balancing authority or reserve
sharing group maintain, as a minimum,
contingency reserves equal to the loss of
the most severe single contingency or an
amount of reserve equal to the sum of
three percent of the load (generation
minus station service minus net actual
interchange) and three percent of net
generation (generation minus station
service).41
NOPR Proposal
33. The Commission proposed to find
that the eight hours of data provided by
WECC in its initial filing is insufficient
to demonstrate that the proposed
minimum contingency reserve
requirements are sufficiently stringent
to ensure that entities within the
Western Interconnection will meet the
requirements of NERC’s continent-wide
Disturbance Control Standard, BAL–
002–0. The Commission noted that, in
its March 2007 petition proposing the
currently effective regional Reliability
Standard, NERC stated that the eight
proposed regional Reliability Standards
‘‘were critical to maintaining reliability
within the Western Interconnection.’’ 42
The Commission expressed concern that
the proposed regional Reliability
Standard was less stringent than the
current regional Reliability Standard
and that NERC had not demonstrated
that the proposed regional requirements
were sufficient to meet the requirements
of NERC’s continent-wide Disturbance
Control Standard, BAL–002–0.
34. Although the proposed Reliability
Standard offers some added clarity by
eliminating reference to the term ‘‘load
responsibility’’ and including renewable
energy resources in the calculation of
contingency reserves, the Commission
proposed to find that NERC and WECC
did not provide sufficient technical
justification to support the proposed
revised method for calculating
contingency reserves. Thus, the
Commission proposed to remand BAL–
002–WECC–1 so that WECC could
develop additional support and make
modifications as appropriate for a future
proposal.
Comments
35. Several commenters argue that the
proposed calculation of minimum
contingency reserve levels is more
stringent than the continent-wide NERC
requirements under BAL–002–0.43
WECC comments that the Commission
has failed to explain how the proposed
regional Reliability Standard, which sets
minimum contingency reserve level as
the greater of the most severe single
contingency or a calculation of net
generation and load, could be less
stringent than the continent-wide
requirement, which sets a minimum
contingency reserve level as equal to the
most severe single contingency. NERC,
Bonneville, Idaho Power, NV Energy,
SCE, WIRAB, and Xcel all agree that the
proposed regional requirement for
calculating minimum contingency
reserve levels is more stringent than the
current continent-wide requirement.
NERC adds that, in addition to
including a more stringent calculation
of minimum reserve levels, the
proposed regional Reliability Standard
is more stringent than the current
42 NERC
2007 Petition at 4.
WECC, NERC, Bonneville, Idaho Power,
NV Energy, SCE, WIRAB, and Xcel.
40 NERC
Petition at 9.
41 Id. at 14.
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continent-wide Reliability Standard
because it includes a requirement that
half of the contingency reserves must
immediately and automatically respond
proportionally to frequency deviations,
e.g., through the action of a governor or
other control system. Moreover, WECC
points out that nothing in the proposed
Reliability Standard excuses any
balancing authority or reserve sharing
group from satisfying the requirements
of the continent-wide Reliability
Standard BAL–002–0.
36. Several commenters argue that
approval of the proposed Reliability
Standard does not require any more
technical justification to support the
proposed calculation of minimum
contingency reserve levels. WECC notes
that the currently approved regional
Reliability Standard was established
through negotiations in the 1960s, and
was based on engineering judgment,
rather than on technical studies or
simulations. Bonneville adds that the
Commission did not require extensive
data support when it approved the
current regional Reliability Standard.
NV Energy admits that NERC has
provided insufficient data with respect
to whether the requested revision is just
and reasonable and that data may
suggest that the proposed calculation
may allow responsible entities to carry
less contingency reserves than currently
required under the existing regional
Reliability Standard. Nevertheless, NV
Energy argues that the Commission
should approve the proposed Reliability
Standard without requiring any further
data because reserve levels required
under the proposed Reliability Standard
will be equal to or greater and, thus,
more stringent than reserve levels
required under the continent-wide
Reliability Standard.
37. Although WECC argues that it
should not be required to provide any
further technical justification, along
with its NOPR comments WECC
provided additional data from a
frequency responsive reserve study as
support for the proposed regional
Reliability Standard. WECC states that
the summary of data demonstrates that,
based on stability simulations applied to
varying load scenarios, a minimum of
2,400 MW of response reserve is
necessary to prevent underfrequency
load shedding. Based on a review of all
hours during 2007–2008, WECC
contends that the proposed regional
Reliability Standard would result in at
least 2,927 MW of automatically
responsive reserves; more than 500 MW
above the amount required for stability
purposes.
38. Powerex and Puget Sound argue
that the data provided by WECC in the
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NERC Petition are insufficient to
support the proposed Reliability
Standard and support the Commission’s
proposed remand. Puget Sound
contends that WECC’s reliance on only
eight hours of data to support the
proposed standard was unreasonable
and arbitrary and, therefore, the
Commission could not reasonably
approve the proposed Reliability
Standard. Powerex argues that the eight
hours of data provided by WECC in the
NERC Petition is insufficient to
demonstrate that the proposed
minimum contingency reserve
requirements are sufficiently stringent
to ensure that entities within the
Western Interconnection will meet the
requirements of the continent-wide
Reliability Standard. Powerex reiterates
a concern that it expressed during the
standard development process that the
proposed regional Reliability Standard
assumes the existence of a liquid
ancillary service market when no such
market exists in WECC. Powerex
comments that the proposed standard
shifts the operating reserve
responsibility away from the source to
the load and will, thereby, result in
significant increases in operating
reserve requirements of a number of
jurisdictions that are primarily loadbased and will, therefore, require them
to procure operating reserves.
Commission Determination
39. We will accept WECC’s proposal
on this issue. We believe that WECC’s
proposed calculation of minimum
contingency reserves is more stringent
than the national requirement and could
be part of a future proposal that the
Commission could find to be just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest. In the NERC Petition for
approval of the proposed regional
Reliability Standard, WECC provided
technical studies covering eight hours
from each of the four operating seasons
(summer, fall, winter, and spring, both
on and off-peak). WECC acknowledges
that this data illustrates that the
methodology in the proposed regional
Reliability Standard reduces the total
reserves required in the Western
Interconnection for each of the eight
hours assessed when compared with the
methodology in the current regional
Reliability Standard.44 However, WECC
also states that the proposed regional
Reliability Standard does not excuse
‘‘any non-performance with the
44 See NERC Petition, Exhibit C at 1 (‘‘The
estimated impact of these changes to the required
level of reserves in the WECC is a reduction of 650
MWs or less, a decrease of approximately 9
[percent] at most.’’).
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continent-wide Disturbance Control
Standard,’’ which requires each
balancing authority or reserve sharing
group to activate sufficient contingency
reserve to comply with the Disturbance
Control Standard.45 WECC’s proposal
would require reserves equal to the
greater of: (i) The most severe single
contingency; or (ii) the sum of three
percent of the load and three percent of
net generation. Moreover, the
deliverability of these contingency
reserves would continue to be assured
under Requirement R7 of Reliability
Standard TOP–002. Any lack of
deliverability would violate TOP–002
regardless of whether the amount of
contingency reserves is based on
WECC’s current requirement or its
proposed requirement.
40. Should WECC resubmit its
proposed calculation of minimum
contingency reserves as part of its
response to our remand on the issue of
the restoration period, NERC and/or
WECC could buttress its proposal with
audits specifically focused on
contingency reserves and whether
balancing authorities are meeting the
adequacy and deliverability
requirements. This auditing could
provide additional assurance to the
Commission that the proposed
requirement is just, reasonable, and in
the public interest. This auditing also
could address the concerns raised by
some entities in WECC that the original
eight hours of data provided in NERC’s
petition is insufficient to demonstrate
that the proposed minimum
contingency reserve requirements are
sufficiently stringent to ensure that
entities within the Western
Interconnection will meet the
requirements of NERC’s continent-wide
Disturbance Control Standard,
BAL–002–0.46 Thus, the auditing could
provide adequate technical justification
to support the proposed modification.
41. In response to Powerex’s
concerns, we believe that a calculation
of minimum contingency reserves that
is based on three percent of net
generation and three percent of net load
would fairly balance the responsibilities
of contingency reserve providers with
the financial obligations of those who
would benefit most from those services.
Under the current regional Reliability
Standard, the total contingency reserve
that a balancing authority must
maintain is based only on generating
resources. By contrast, under the
proposed requirement, the total
contingency reserve that a balancing
45 WECC
May 24, 2010 Comments at 6 n.7.
Powerex Comments at 4; Puget Sound
Comments at 2.
46 See
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authority must maintain is based on a
combination of the generating resources
and the demand served within a
balancing authority footprint. We agree
with NERC that the equal split between
load and generation represents a
reasonable balance to moderate shifts in
contingency reserve responsibility and
costs among the applicable entities.47
D. Use of Firm Load To Meet
Contingency Reserve Requirement
42. Requirement R3 of proposed BAL–
002–WECC–1 would require that each
reserve sharing group or balancing
authority use certain types of reserves
that must be fully deployable within ten
minutes of notification to meet their
contingency reserve requirement.
Requirement R3.6 of Reliability
Standard BAL–002–WECC–1 would
allow entities to use ‘‘Load, other than
Interruptible Load, once the Reliability
Coordinator has declared a capacity or
energy emergency.’’ 48
NOPR Proposal
43. In its NOPR, the Commission
proposed to find that Requirement R3.6
is not technically sound because it
would allow balancing authorities and
reserve sharing groups within WECC to
use firm load to meet their minimum
contingency reserve requirements ‘‘once
the Reliability Coordinator has declared
a capacity or energy emergency,’’ thus
creating the possibility that firm load
could be shed due to the loss of a single
element on the system.49 The
Commission stated that the currently
effective regional Reliability Standard
does not allow the use of firm load to
meet minimum contingency reserve
levels.
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Comments
44. WECC, supported by Bonneville,
Idaho Power, and SCE, contends that
the proposed regional Reliability
Standard treats firm load no differently
than the continent-wide Reliability
Standard. WECC states that the
proposed regional Reliability Standard
permits the use of load, other than
interruptible load, to meet a
contingency only if ‘‘the Reliability
Coordinator has declared a capacity or
energy emergency.’’ 50 By contrast,
WECC comments, the continent-wide
Reliability Standard provides that
contingency reserve may be met by
Operating Reserve-Spinning and
47 NERC
Petition at 18.
48 BAL–002–WECC–1,
Requirement R3.6.
Order No. 672, FERC Stats. & Regs.
¶ 31,204 at P 324 (identifying guidelines for what
constitutes a just and reasonable Reliability
Standard).
50 BAL–002–WECC–1, Requirement R3.6.
49 Citing
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Operating Reserve-Supplemental, which
include ‘‘load fully removable from the
system within the Disturbance Recovery
Period following the contingency event’’
to be used to meet contingencies.51
WECC points out that the continentwide Reliability Standard does not refer
to the declaration of an emergency. For
the same reason, Idaho Power and Xcel
state that the proposed provisions
related to the use of firm load to meet
contingency reserve requirements are
more stringent than the continent-wide
standards. They contend that, unlike the
continent-wide Reliability Standard, the
proposed regional Reliability Standard
requires the declaration of an emergency
prior to utilizing firm load to meet
contingency reserve requirements.
45. Idaho Power comments that if
balancing authorities are unable to
count firm load towards contingency
reserve requirements, balancing
authorities may have no choice but to
shed firm load to remain in compliance
with the continent-wide Reliability
Standard BAL–002–0. Idaho Power
explains that Requirement R6.2 of
Reliability Standard EOP–002–2.1
requires a balancing authority to deploy
all available operating reserves if it
cannot meet the Disturbance Control
Standard. If the balancing authority
deploys all available operating reserves,
including interruptible loads pursuant
to Reliability Standard EOP–002–2.1,
but cannot declare firm load
interruptible to satisfy contingency
reserve requirements, Idaho Power
contends that the balancing authority
may have no choice but to shed firm
load to maintain compliance with the
continent-wide Reliability Standard
BAL–002. Thus, Idaho Power argues
that not all emergencies are created
equal and the flexibility to count firm
load toward contingency requirements,
in limited circumstances, would
promote reliability but avoid
unnecessary outages.
46. WECC also states that nothing in
the proposed standard directs any entity
to take action that would violate the
requirements relating to alert levels
prescribed in EOP–002–2.1. Bonneville
agrees and states that the Commission’s
concern is misplaced because the
proposed Reliability Standard does not
authorize an entity to interrupt firm
load for contingency reserves during
EOP–002–2.1 energy emergency alerts 1
and 2. If the Commission believes that
the proposed Reliability Standard
should further qualify the circumstances
under which loads may be used for
51 See NERC Glossary, available at https://
www.nerc.com/docs/standards/rs/
Glossary_of_Terms_2010April20.pdf.
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65971
contingency reserves, WECC contends
that the issue should be addressed in a
manner and at a time that does not
preclude approval of the proposed
regional Reliability Standard. WECC
adds that it is prepared to participate in
any efforts intended to address the
Commission’s concerns in this regard.
47. NERC agrees with WECC that a
reliability coordinator must declare a
capacity or energy emergency before
firm load could be considered to
maintain contingency reserves but also
agrees with the Commission that greater
specificity of the appropriate Energy
Emergency Alert (EEA) level that must
be declared would be helpful. Puget
Sound argues that the proposed
language could be interpreted to allow
the use of firm load in a manner that is
inconsistent with EOP–002–2.1. CDWR
comments that reliability planning
should not consider shedding firm loads
as a contingency reserve. CDWR
contends that balancing authority
should plan for load interruption only if
a customer voluntarily agrees to that
specific use of its loads, and only upon
clear terms and conditions.
Commission Determination
48. We will accept WECC’s proposal
on this issue. The Commission finds
that, similar to the current continentwide Reliability Standard, the proposed
regional Reliability Standard does not
allow balancing authorities or reserve
sharing groups to curtail firm load
except in compliance with NERC’s
Reliability Standard EOP–002–2.1.
49. The continent-wide Reliability
Standard, BAL–002 does not
contemplate the use of firm load as
contingency reserve. In fact, it would be
a violation of EOP–002–2.1 if balancing
authorities or reserve sharing groups
outside of WECC planned to shed firm
load before the reliability coordinator
issued a level 3 energy emergency
alert.52 Similarly, although Requirement
R3.6 of Reliability Standard BAL–002–
WECC–1 would allow balancing
authorities and reserve sharing groups
to use ‘‘Load, other than Interruptible
Load, once the Reliability Coordinator
has declared a capacity or energy
emergency,’’ 53 these entities would not
be authorized to shed firm load unless
the applicable reliability coordinator
had issued a level 3 energy emergency
alert pursuant to EOP–002–2.1. Thus,
balancing authorities and reserve
sharing groups within WECC are subject
to the same restrictions regarding the
use of firm load as contingency reserve
as balancing authorities elsewhere
52 EOP–002–2.1,
Requirement R7.
Requirement R3.6.
53 BAL–002–WECC–1,
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Spinning Reserve because it is not
permitted by the NERC Spinning
Reserve definition.’’ 59
operating under the continent-wide
Reliability Standard. On remand, we
direct WECC to develop revised
language to clarify this point.
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E. Demand-Side Management as a
Resource
50. In Order No. 693, the Commission
directed the ERO to submit a
modification to continent-wide
Reliability Standard BAL–002–0 that
includes a Requirement that explicitly
allows that demand-side management
be used as a resource for contingency
reserves, and clarifies that demand-side
management should be treated on a
comparable basis so long as it meets
similar technical requirements as other
resources providing this service.54 The
Commission directed the ERO to list the
types of resources that can be used to
meet contingency reserves to provide
users, owners and operators of the BulkPower System a set of options to meet
contingency reserves.55 The
Commission clarified that the purpose
of this directive was to ensure
comparable treatment of demand-side
management with conventional
generation or any other technology and
to allow demand-side management to be
considered as a resource for contingency
reserves on this basis without requiring
the use of any particular contingency
reserve option.56 The Commission
further clarified that in order for
demand-side management to
participate, it must be technically
capable of providing contingency
reserve service, with the ERO
determining the technical
requirements.57
51. In its petition, NERC states that it
raised this concern with WECC, and
WECC responded that the drafting team
wrote the regional Reliability Standard
‘‘to permit load, Demand-Side
Management, generation, or another
resource technology that qualifies as
Spinning Reserve or Contingency
Reserve to be used as such.’’ WECC
further explained that demand-side
management that is deployable within
ten minutes is a subset of interruptible
load, which is an acceptable type of
reserve set forth in proposed
Requirement R3.2.58 WECC previously
commented that, in the proposed
standard, ‘‘Loads and [demand-side
management] were not allowed as
54 Mandatory Reliability Standards for the BulkPower System, Order No. 693, 72 FR 16416 (Apr.
4, 2007), FERC Stats. & Regs. ¶ 31,242, at P 330,
order on reh’g, Order No. 693–A, 120 FERC
¶ 61,053 (2007).
55 Id. P 331, 335.
56 Id. P 333.
57 Id. P 334.
58 NERC Petition at 40.
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NOPR Proposal
52. In its NOPR, the Commission
stated that the proposed regional
Reliability Standard does not explicitly
address the use of demand-side
management as a resource for
contingency reserves. Accordingly, the
Commission proposed to direct WECC
to develop a modification to BAL–002–
WECC–1 that explicitly provides that
demand-side management that is
technically capable of providing this
service may be used as a resource for
contingency reserves. Consistent with
the Commission’s directive in Order No.
693, the Commission explained that the
modification should list the types of
resources, including demand-side
management, which can be used to meet
contingency reserves. The Commission
also stated that the modification should
ensure comparable treatment of
demand-side management with
conventional generation or any other
technology and allow demand-side
management to be considered as a
resource for contingency reserves on
this basis without requiring the use of
any particular contingency reserve
option.
53. In addition, the Commission noted
a conflict related to the definition of
Spinning Reserve as it is used in the
proposed regional Reliability Standard.
The Commission stated that
Requirement R3.1 refers to the NERC
Glossary definition of Spinning Reserve,
which omits the use of demand-side
management or other technologies that
could be used as a resource because it
limits acceptable Spinning Reserve
resources to generation resources. The
Commission proposed to direct WECC
to develop a modification to the
proposed regional Reliability Standard
replacing the term Spinning Reserve
with Operating Reserve-Spinning,
which includes as part of the definition
of Operating Reserve, ‘‘load fully
removable from the system within the
Disturbance Recovery Period following
the contingency event.’’ Since the term
Spinning Reserve was not used in other
Reliability Standards, the Commission
proposed to direct the ERO to remove
the term from the NERC Glossary upon
approval of a modified Reliability
Standard using Operating ReserveSpinning.
59 NERC Petition at Exhibit C (Record of
Development of Proposed Reliability Standard)
WECC’s Written Response to NERC’s Written
Comments, August 13, 2008 at page 4.
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Comments
54. WECC, supported by NERC,
Bonneville, CAISO, Idaho Power, and
SCE, contends that the proposed
regional Reliability Standard is
inclusive of demand-side management
as a resource to be used in the
calculation of contingency reserve
because it provides for the use of
Interruptible Load for contingency
reserve. WECC points out that the NERC
Glossary defines Interruptible Load as
‘‘demand that the end-use customer
makes available to its load-serving
entity via contract or agreement for
curtailment.’’ 60 Nevertheless, if the
Commission issues a remand, CAISO
urges the Commission to provide NERC
an opportunity to resubmit BAL–002–
WECC–1 to address any definitional
concerns within 90 days.
55. Xcel comments that the Reliability
Standard should not be more explicit
about the inclusion of demand-side
management as a resource because the
term demand-side management
encompasses many types of
technologies and services, including
reduction of energy consumption by use
of high-efficiency light bulbs. If
demand-side management is more
explicitly included in the proposed
regional Reliability Standard, Xcel
contends that such a revision might
cause entities that are working to
provide value to the end-use customers
to claim that a customer could get
revenue by providing reserves.
56. By contrast, Puget Sound and
CDWR comment that they agree with
the Commission that technically
qualified demand-based resources—as
well as other qualified non-generation
resources such as energy storage
devices—should be allowed to provide
ancillary services. CDWR suggests that,
if Spinning Reserve is meant to connote
two products—a contingency reserve
and a frequency regulation reserve—
then consideration should be given to
better defining the services and the
associated technical criteria.
Nevertheless, CDWR comments that
demand-based resources that agree to
interruption for reliability purposes
should receive reduced charges for
lesser quality services, an exemption
from charges associated with the same
service that the demand-based resources
are providing, and compensation for
service they provide.
57. Concerning the Commission’s
proposal to direct the ERO to remove
the term Spinning Reserve upon
approval of a modified regional
60 See NERC Glossary available at https://
www.nerc.com/docs/standards/rs/
Glossary_of_Terms_2010April20.pdf.
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Rules and Regulations
Reliability Standard, NERC points out
that there are two definitions for
Spinning Reserve; one from NERC, the
other from WECC. NERC suggests that
the Commission retain the NERCdefined term and retire the WECC term.
NERC states that the proposed standard
uses the NERC-defined term in
Requirements R1, R2, and R3.
58. Several commenters oppose the
removal of the term Spinning Reserve
from the NERC Glossary.61 Puget Sound
states that retaining the term in the
NERC Glossary is helpful to the
development of a capacity/reserves
market by facilitating the purchase and
sale of spinning capacity that is not
contingency-based. Similarly, NV
Energy states that the term Spinning
Reserve is useful because it describes a
type of reserve that must be
synchronized, unloaded generating
capacity, as this is the only product that
can provide the essential service of
frequency and governor response under
dynamic system conditions and
disturbances. WSPP argues that the
Commission’s proposal is based upon a
faulty understanding of the relationship
between the terms Operating ReserveSpinning and Spinning Reserve. WSPP
and MISO agree that Spinning Reserve
is used in the definition of Operating
Reserve, which appears more than fifty
times in the NERC Reliability Standards.
WSPP further explains that Spinning
Reserve can be used for the spinning
component of Operating Reserve but
also for other critical system
requirements. In addition, MISO argues,
generally, that it is not appropriate for
the Commission to effect changes to the
continent-wide NERC standards by
proposing a modification to the NERC
Glossary within the context of a
proceeding addressing a regional
Reliability Standard.
59. With respect to the Commission’s
proposed revisions of the definitions of
the terms Operating Reserve—Spinning
and Operating Reserve—Supplemental,
NERC agrees that greater clarity is
necessary regarding the meaning of
‘‘load fully removable from the system.’’
NERC states, however, that these
modifications must be made through
NERC’s Reliability Standard
Development Process and are, in fact,
currently being addressed in Project
2007–05 Balancing Authority Controls,
which is currently revising Reliability
Standard BAL–002–0, as well as other
standards.62
61 E.g.,
MISO, Puget Sound, WSPP, and Xcel.
of July 28, 2010, this project has been
merged with Project 2007–18—Reliability-based
Controls and is now listed as new Project 2010–
14—Balancing Authority Reliability-based Control.
62 As
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Commission Determination
60. We find that the proposed regional
Reliability Standard does not provide
that demand-side management that is
technically capable of providing this
service may be used as a resource for
contingency reserves. The WECC
definition of Spinning Reserve, like the
NERC definition of the same term, is
limited to ‘‘unloaded generation which
is synchronized and ready to serve
additional demand.’’ Thus, neither the
WECC nor the NERC definitions of
Spinning Reserve are inclusive of
demand-side management as a
resource.63 Nevertheless, WECC argues
that the proposed regional Reliability
Standard is inclusive of demand-side
management as a resource for
contingency reserves because it lists
interruptible load as an available
resource for contingency reserve. The
definition of interruptible load,
however, is not inclusive of all forms of
demand-side management.64 NERC
defines demand-side management as
‘‘all activities or programs undertaken by
Load-Serving Entity or its customers to
influence the amount or timing of
electricity they use.’’ 65 This could
include interruptible load but, as Xcel
points out, demand-side management
may encompass the use of many types
of technologies and services. For
example, according to the NERC
Glossary, demand-side management
includes controllable load, termed
Direct Control Load Management, which
is defined as demand-side management
that is under the direct control of the
system operator but does not include
interruptible load.66 Thus, by simply
listing interruptible load, the proposed
regional Reliability Standard is not
sufficiently inclusive of demand-side
management as a resource.67
The new project page is available at https://
www.nerc.com/filez/standards/Project201014_Balancing_Authority_RBC.html.
63 In the transmittal letter of its compliance filing
to Order No. 719, CAISO explained that demandside management resources cannot currently
provide regulation or spinning reserve services in
its markets because of WECC’s definitions of
regulation and spinning reserve, which are limited
to generation resources. CAISO, Compliance Filing,
Docket No. ER09–1048–000, at 28–30 (April 28,
2009).
64 NERC defines Interruptible Load as ‘‘Demand
that the end-use customer makes available to its
Load-Serving Entity via contract or agreement for
curtailment.’’ NERC Glossary available at https://
www.nerc.com/docs/standards/rs/
Glossary_of_Terms_2010April20.pdf.
65 NERC Glossary available at https://
www.nerc.com/docs/standards/rs/
Glossary_of_Terms_2010April20.pdf.
66 Id.
67 We also note that WECC’s explanation that
demand-side management that is deployable within
ten minutes is a subset of interruptible load is not
reflected in the definition of Interruptible Load.
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65973
61. On remand, the Commission
hereby adopts its NOPR proposal and
directs the WECC to develop
modifications to the proposed regional
Reliability Standard that explicitly
provide that demand-side management
technically capable of providing this
service may be used as a resource for
both spinning and non-spinning
contingency reserves.68 Consistent with
the Commission’s directive in Order No.
693, the modification should list the
types of resources, including demandside management, which can be used to
meet contingency reserves.69 The
modification also should ensure
comparable treatment of demand-side
management with conventional
generation or any other technology and
allow demand-side management to be
considered as a resource for contingency
reserves on this basis without requiring
the use of any particular contingency
reserve option. For example, consistent
with our determinations in Order No.
693, the modification could replace the
term Spinning Reserve with Operating
Reserve—Spinning and Non-Spinning
Reserve with Operating Reserve—
Supplemental, since these glossary
definitions are inclusive of demand-side
management, including controllable
load, in contrast to the current terms
used in the proposed regional
Reliability Standard.70
62. As commenters have pointed out,
the term Spinning Reserve is used in the
definition of Operating Reserve and in
service agreements by and among
certain WECC entities. Therefore, the
Commission will not adopt its proposal
to direct the ERO to remove the term
from the NERC Glossary. However, as
NERC points out WECC has maintained
its own definition of the term Spinning
Reserve. We find no substantial
difference between the two terms. Both
terms refer to ‘‘unloaded generation that
is synchronized and ready to serve
additional demand.’’ 71 In its order
approving WECC’s current regional
Reliability Standard, the Commission
determined that regional definitions
68 In Order No. 693, the Commission clarified
that, in order for demand-side management to
participate as a resource for contingency reserves,
it must be technically capable of providing
contingency reserve service. For example, not every
end-user who curbs electricity usage is technically
capable of providing contingency reserve service.
The Commission expects that the ERO would
determine what technical requirements demandside management would need to meet to provide
contingency reserves. Order No. 693, FERC Stats. &
Regs. ¶ 31,242 at P 334.
69 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at
P 333.
70 Id. P 1896.
71 NERC Glossary, available at https://
www.nerc.com/docs/standards/rs/Glossary_
of_Terms_2010April20.pdf.
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Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Rules and Regulations
should conform to the definitions set
forth in the NERC Glossary, unless a
specific deviation has been justified.72
WECC has not justified the need for a
separate, regional definition of Spinning
Reserve. Accordingly, we direct WECC
to remove this regional definition from
the NERC Glossary.
F. Miscellaneous
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Comments
63. In its petition, NERC contends that
the industry will benefit from the
improved clarity of the proposed
regional Reliability Standard. Among its
revisions, NERC presents a proposal
from WECC for an interpretation of the
term ‘‘Load Responsibility.’’ 73 In the
NOPR, the Commission stated its belief
that any confusion regarding the term
‘‘Load Responsibility’’ has been
addressed by WECC and therefore does
not have a reliability impact. Xcel states
that it agrees that WECC’s interpretation
is an improvement and that the standard
is clearer without the term.
Nevertheless, Xcel comments that more
guidance on application is needed from
both WECC and FERC before the
western markets may operate efficiently.
64. If the Commission decides to
remand the proposed regional
Reliability Standard, the QF Parties ask
the Commission to direct WECC to
define the term ‘‘net generation.’’ The QF
Parties explain that the calculation of
the amount of contingency reserves in
the proposed standard is based, in part,
on the amount of net generation, which
is not defined. The QF Parties contend
that, consistent with Commission
precedent, the definition of net
generation should not include
generation used to serve load behind the
meter.74
65. Regarding the applicability of the
proposed regional Reliability Standard,
NV Energy expresses concern that it
does not assign any responsibility or
obligations for generator owners and
generator operators. NV Energy states
that a balancing authority does not have
ownership or operational control over
72 North American Electric Reliability Corp., 119
FERC ¶ 61,260 at P 54.
73 WECC’s interpretation of ‘‘Load Responsibility,’’
which was approved by the WECC Board of
Directors September 7, 2007, places the
responsibility on the balancing authorities to
determine the amount of and assure that adequate
contingency reserves are provided. See WECC
Interpretation of Load Responsibility (Sept. 7,
2007), available at https://www.wecc.biz/Standards/
Interpretations/Interpretation%20of%20Load%20
Responsibility.pdf. Likewise, the current regional
Reliability Standard places the responsibility on the
balancing authorities to determine the amount of
contingency reserves and assure that adequate
contingency reserves are provided.
74 Citing, Opinion No. 464, Docket No. ER98–
997–000, at P 11 et seq., 38–40 (August 12, 2003).
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significant shares of generating
resources within its footprint. Thus, NV
Energy contends, a balancing authority
may be required to carry a
disproportionate share of the
contingency reserve obligation within
the Western Interconnection. For this
reason, NV Energy asks the Commission
to direct WECC to address this issue on
remand.
Commission Determination
66. The proposed regional Reliability
Standard offers certain improvements
over the current regional Reliability
Standard as commenters point out.
Nevertheless, for the reasons discussed
above, we must remand the proposed
regional Reliability Standard to the
ERO. On remand, we direct WECC to
consider the concerns raised by the QF
Parties and NV Energy.
III. Information Collection Statement
67. The Office of Management and
Budget (OMB) regulations require that
OMB approve certain reporting and
recordkeeping (collections of
information) imposed by an agency.75
The information contained here is also
subject to review under section 3507(d)
of the Paperwork Reduction Act of
1995.76 By remanding the proposed
Reliability Standard the Commission is
maintaining the status quo until future
revisions to the Reliability Standard are
approved by the Commission. Thus, the
Commission’s action does not add to or
increase entities’ reporting burden.
IV. Environmental Analysis
68. 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.77 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.78 The
actions directed herein fall within this
categorical exclusion in the
Commission’s regulations.
V. Regulatory Flexibility Act
69. The Regulatory Flexibility Act of
1980 (RFA) 79 generally requires a
75 5
CFR 1320.11.
U.S.C. 3507(d).
77 Regulations Implementing the National
Environmental Policy Act of 1969, Order No. 486,
FERC Stats. & Regs. ¶ 30,783 (1987).
78 18 CFR 380.4(a)(2)(ii).
79 5 U.S.C. 601–612.
76 44
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description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The RFA mandates
consideration of regulatory alternatives
that accomplish the stated objectives of
a final rule and that minimize any
significant economic impact on a
substantial number of small entities.
The Small Business Administration’s
Office of Size Standards develops the
numerical definition of a small
business.80 For electric utilities, a firm
is small if, including affiliates, it is
primarily engaged in the transmission,
generation and/or distribution of
electric energy for sale and its total
electric output for the preceding twelve
months did not exceed four million
megawatt hours. The RFA is not
implicated by this final rule because by
remanding the proposed Reliability
Standard the Commission is
maintaining the status quo until future
revisions to the Reliability Standard are
approved by the Commission.
VI. Document Availability
70. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the internet through
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.
71. 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.
72. User assistance is available for
eLibrary and the FERC’s Web site during
normal business hours from FERC
Online Support at (202) 502–6652 (toll
free at 1–866–208–3676) or e-mail at
ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. E-mail the
Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional
Notification
73. This final rule shall become
effective November 26, 2010. The
Commission has determined, with the
concurrence of the Administrator of the
80 See
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Office of Information and Regulatory
Affairs of OMB, that this rule is not a
‘‘major rule’’ as defined in section 351 of
the Small Business Regulatory
Enforcement Fairness Act of 1996.
List of Subjects in 18 CFR Part 40
Electric power, Electric utilities,
Reporting and recordkeeping
requirements.
65975
By the Commission.
Kimberly D. Bose,
Secretary.
APPENDIX A
List of Commenters
Commenter name
Abbreviation
Western Electricity Coordinating Council .........................................................................................................................................
North American Electric Reliability Corp ..........................................................................................................................................
Bonneville Power Administration ......................................................................................................................................................
California Independent System Operator Corp ................................................................................................................................
California Dept of Water Resources, State Water Project ...............................................................................................................
Idaho Power Co. ...............................................................................................................................................................................
Midwest Independent System Operator, Inc ....................................................................................................................................
Powerex Corp ...................................................................................................................................................................................
Puget Sound Energy, Inc .................................................................................................................................................................
Cogeneration Association of California and the Energy Producers and Users Coalition ................................................................
Sempra Generation ..........................................................................................................................................................................
Sierra Pacific Power Co. and Nevada Power Co ............................................................................................................................
Southern California Edison Co .........................................................................................................................................................
Western Interconnection Regional Advisory Body ...........................................................................................................................
WSPP Inc .........................................................................................................................................................................................
Xcel Energy Services Inc .................................................................................................................................................................
secondary school students (ages 15–
181⁄2) are afforded the opportunity to
study in the United States at accredited
public or private secondary schools for
an academic semester or year while
living with American host families or
residing at accredited U.S. boarding
schools.
[FR Doc. 2010–27134 Filed 10–26–10; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF STATE
22 CFR Part 62
[Public Notice: 7216]
Exchange Visitor Program—Secondary
School Students
AGENCY:
United States Department of
State.
ACTION:
Final rule.
The Department is revising
existing Secondary School Student
regulations regarding the screening,
selection, school enrollment,
orientation, and quality assurance
monitoring of exchange students as well
as the screening, selection, orientation,
and quality assurance monitoring of
host families and field staff. Further, the
Department is adopting a new
requirement regarding training for all
organizational representatives who
place and/or monitor students with host
families. The proposed requirement to
conduct FBI fingerprint-based criminal
background checks will not be
implemented at this time. Rather, it will
continue to be examined and a
subsequent Final Rule regarding this
provision will be forthcoming. These
regulations, as revised, govern the
Department designated exchange visitor
programs under which foreign
jdjones on DSK8KYBLC1PROD with RULES
SUMMARY:
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15:25 Oct 26, 2010
Effective November 26, 2010.
Compliance with the new requirement
for the State Department designed and
mandated training module for local
coordinator training, as set forth at
§ 62.25(d)(1), will not become effective
until the development of an online
training platform implementing this
requirement is completed. The
Department anticipates a January 2011
launch of this training platform. A
subsequent Federal Register Notice will
be published when development is
completed.
DATES:
RIN 1400–AC56
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FOR FURTHER INFORMATION CONTACT:
Stanley S. Colvin, Deputy Assistant
Secretary for Private Sector Exchange,
U.S. Department of State, SA–5, 2200 C
Street, NW., 5th Floor, Washington, DC
20522–0505; or e-mail at
JExchanges@state.gov.
The U.S.
Department of State has authorized
Secondary School Student programs
since 1949, following passage of the
United States Information and
Educational Exchange Act of 1948 and
adoption of 22 CFR Part 62—Exchange
Visitor Program, establishing a student
exchange program (14 FR 4592, July 22,
1949). Over the last 60 years, more than
SUPPLEMENTARY INFORMATION:
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WECC
NERC
Bonneville
CAISO
CDWR
Idaho Power
MISO
Powerex
Puget Sound
QF Parties
Sempra
NV Energy
SCE
WIRAB
WSPP
Xcel
850,000 foreign exchange students have
lived in and learned about the United
States through these Secondary School
Student programs.
While the vast majority of the
Department’s nearly 28,000 annual
exchanges of Secondary School students
conclude with positive experiences for
both the exchange student and the
American host families, a number of
incidents have occurred recently with
respect to student placement and
oversight which demand the
Department’s immediate attention. The
success of the Secondary School
Student program is dependent on the
generosity of the American families who
support this program by welcoming
foreign students into their homes. The
number of qualified foreign students
desiring to come to the United States for
a year of high school continues to rise
and student demand is now placing
pressure on the ability of sponsors to
identify available and appropriate host
family homes. The Department desires
to provide the means to permit as many
exchange students into the United
States as possible so long as we can
ensure their safety and welfare, which is
our highest priority.
A great majority of exchange students
who come to the United States to attend
high school enjoy positive life-changing
experiences, grow in independence and
maturity, improve their English
language skills, and build relationships
with U.S. citizens. As with other
Exchange Visitor Program categories,
the underlying purpose of the
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]]>Agencies
[Federal Register Volume 75, Number 207 (Wednesday, October 27, 2010)]
[Rules and Regulations]
[Pages 65964-65975]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27134]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM09-15-000; Order No. 740]
Version One Regional Reliability Standard for Resource and Demand
Balancing
Issued October 21, 2010.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Under section 215 of the Federal Power Act, the Commission
hereby remands a revised regional Reliability Standard developed by the
Western Electricity Coordinating Council and approved by the North
American Electric Reliability Corporation, which the Commission has
certified as the Electric Reliability Organization responsible for
developing and enforcing mandatory Reliability Standards. The revised
regional Reliability Standard, designated by WECC as BAL-002-WECC-1,
would set revised Contingency Reserve requirements meant to maintain
scheduled frequency and avoid loss of firm load following transmission
or generation contingencies.
DATES: Effective Date: This rule will become effective November 26,
2010.
FOR FURTHER INFORMATION CONTACT:
Nick Henery (Technical Information), Office of Electric Reliability,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8636.
Scott Sells (Technical Information), Office of Electric Reliability,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-6664.
A. Cory Lankford (Legal Information), Office of General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-6711.
SUPPLEMENTARY INFORMATION:
Table of Contents
Paragraph
Nos.
I. Background.............................................. 3
A. Mandatory Reliability Standards..................... 3
B. Western Electricity Coordinating Council............ 6
C. WECC Regional Reliability Standard BAL-002-WECC-1... 9
II. Discussion............................................. 14
A. Due Weight and Effect of Remand..................... 15
B. Contingency Reserve Restoration Period.............. 22
C. Calculation of Minimum Contingency Reserve.......... 31
D. Use of Firm Load To Meet Contingency Reserve 42
Requirement...........................................
E. Demand-Side Management as a Resource................ 50
F. Miscellaneous....................................... 63
III. Information Collection Statement...................... 67
IV. Environmental Analysis................................. 68
V. Regulatory Flexibility Act.............................. 69
VI. Document Availability.................................. 70
VII. Effective Date and Congressional Notification......... 73
Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip
D. Moeller, John R. Norris, and Cheryl A. LaFleur
1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the
Commission hereby remands a revised regional Reliability Standard
developed by the Western Electricity Coordinating Council (WECC) and
approved by the North American Electric Reliability Corporation (NERC),
which the Commission has certified as the Electric Reliability
Organization (ERO) responsible for developing and enforcing mandatory
Reliability Standards.\2\ The revised regional Reliability Standard,
designated by WECC as BAL-002-WECC-1,\3\ is meant to ensure that
adequate resources are available at all times to maintain scheduled
frequency, and avoid loss of firm load following transmission or
generation contingencies. As discussed below, the Commission finds that
the proposed regional Reliability Standard does not meet the statutory
criteria for approval that it be just, reasonable, not unduly
discriminatory or preferential, and in the public interest.\4\
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\1\ 16 U.S.C. 824o (2006).
\2\ North American Electric Reliability Corp., 116 FERC ]
61,062, order on reh'g & compliance, 117 FERC ] 61,126 (2006), aff'd
sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
\3\ NERC designates the version number of a Reliability Standard
as the last digit of the Reliability Standard number. Therefore,
original Reliability Standards end with ``-0'' and modified version
one Reliability Standards end with ``-1.''
\4\ 16 U.S.C. 824o(d)(2).
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2. The Commission remands the proposed regional Reliability
Standard based on concerns that WECC has not provided adequate
technical support to demonstrate that the requirements of the proposed
regional Reliability Standard are sufficient to ensure the reliable
operation of the Bulk-Power System within WECC. Specifically, WECC's
data indicates that extending the reserve restoration period from 60 to
90 minutes presents an unreasonable risk that a second major
contingency could occur before reserves are restored after an initial
contingency. Without further technical justification demonstrating that
this less stringent requirement will adequately support reliability in
the Western Interconnection, the Commission is unable to determine that
the proposed regional Reliability Standard is just, reasonable, not
unduly discriminatory or preferential, and in the public interest.
Accordingly, we remand WECC regional Reliability Standard BAL-002-WECC-
1 to the ERO so that the Regional Entity may develop further
modifications consistent with this final rule.\5\
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\5\ In Order No. 672, the Commission found that it should order
only the ERO to modify a Reliability Standard because the ERO is the
only entity that may directly submit a proposed Reliability Standard
to the Commission for approval. Rules Concerning Certification of
the Electric Reliability Organization; Procedures for the
Establishment, Approval, and Enforcement of Electric Reliability
Standards, Order No. 672, 71 FR 8662 (Feb. 17, 2006), FERC Stats. &
Regs. ] 31,204, at P 423, order on reh'g, Order No. 672-A, 71 FR
19814 (Apr. 18, 2006), FERC Stats. & Regs. ] 31,212 (2006).
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[[Page 65965]]
I. Background
A. Mandatory Reliability Standards
3. Section 215 of the FPA requires a Commission-certified ERO to
develop mandatory and enforceable Reliability Standards, which are
subject to Commission review and approval. Once approved, the
Reliability Standards may be enforced by the ERO, subject to Commission
oversight, or by the Commission independently.\6\
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\6\ 16 U.S.C. 824o(e)(3).
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4. Reliability Standards that the ERO proposes to the Commission
may include Reliability Standards that are proposed to the ERO by a
Regional Entity.\7\ A Regional Entity is an entity that has been
approved by the Commission to enforce Reliability Standards under
delegated authority from the ERO.\8\ When the ERO reviews a regional
Reliability Standard that would be applicable on an interconnection-
wide basis and that has been proposed by a Regional Entity organized on
an interconnection-wide basis, the ERO must rebuttably presume that the
regional Reliability Standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.\9\ In turn,
the Commission must give ``due weight'' to the technical expertise of
the ERO and of a Regional Entity organized on an interconnection-wide
basis.\10\
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\7\ 16 U.S.C. 824o(e)(4).
\8\ 16 U.S.C. 824o(a)(7) and (e)(4).
\9\ 18 CFR 39.5 (2010).
\10\ 16 U.S.C. 824o(d)(2).
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5. In Order No. 672, the Commission urged uniformity of Reliability
Standards, but recognized a potential need for regional
differences.\11\ Accordingly, the Commission stated that:
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\11\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 290.
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.\12\
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\12\ Id. P 291.
B. Western Electricity Coordinating Council
6. On April 19, 2007, the Commission accepted delegation agreements
between NERC and each of eight Regional Entities.\13\ In its order, the
Commission accepted WECC as a Regional Entity organized on an
Interconnection-wide basis. As a Regional Entity, WECC oversees
transmission system reliability in the Western Interconnection. The
WECC region encompasses nearly 1.8 million square miles, including 14
western U.S. states, the Canadian provinces of Alberta and British
Columbia, and the northern portion of Baja California in Mexico.
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\13\ North American Electric Reliability Corp., 119 FERC ]
61,060, at P 432 (2007).
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7. In June 2007, the Commission approved eight regional Reliability
Standards for WECC including the currently effective regional
Reliability Standard for operating reserves, WECC-BAL-STD-002-0.\14\
The Commission found that the current regional Reliability Standard was
more stringent than the corresponding NERC Reliability Standard, BAL-
002-0, since WECC required a more stringent minimum reserve requirement
than the continent-wide requirement.\15\ Moreover, the Commission found
that WECC's requirement to restore contingency reserves within 60
minutes was more stringent than the 90 minute restoration period as set
forth in NERC's BAL-002-0.\16\
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\14\ North American Electric Reliability Corp., 119 FERC ]
61,260, at P 53 (2007).
\15\ Id.
\16\ Id.
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8. The Commission directed WECC to develop certain minor
modifications to WECC-BAL-STD-002-0, as identified by NERC in its
filing letter for the current standard.\17\ For example, the Commission
determined that: (1) Regional definitions should conform to definitions
set forth in the NERC Glossary of Terms Used in Reliability Standards
(NERC Glossary) unless a specific deviation has been justified; and (2)
documents that are referenced in the Reliability Standard should be
attached to the Reliability Standard. The Commission also found that it
is important that regional Reliability Standards and NERC Reliability
Standards achieve a reasonable level of consistency in their structure
so that there is a common understanding of the elements. Finally, the
Commission directed WECC to address stakeholder concerns regarding
ambiguities in the terms ``load responsibility'' and ``firm
transaction.'' \18\
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\17\ Id. P 55.
\18\ Id. P 56.
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C. WECC Regional Reliability Standard BAL-002-WECC-1
9. On March 25, 2009, NERC submitted a petition (NERC Petition) to
the Commission seeking approval of BAL-002-WECC-1\19\ and requesting
the concurrent retirement of BAL-STD-002-0.\20\ In that March petition,
NERC states that the proposed regional Reliability Standard was
approved by the NERC Board of Trustees at its October 29, 2008 meeting.
NERC also requests an effective date for the regional Reliability
Standard of 90 calendar days after receipt of applicable regulatory
approval.
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\19\ See 18 CFR 39.5(a) (requiring the ERO to submit regional
Reliability Standards on behalf of a Regional Entity).
\20\ The proposed regional Reliability Standard is not attached
to the NOPR. It is, however, available on the Commission's eLibrary
document retrieval system in Docket No. RM09-15-000 and is on the
ERO's Web site, available at https://www.nerc.com.
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10. The proposed regional Reliability Standard contains three main
provisions. Requirement R1 provides that each reserve sharing group
\21\ or balancing authority must maintain a minimum contingency reserve
that is the greater of (1) an amount of reserve equal to the loss of
the most severe single contingency; or (2) an amount of reserve equal
to the sum of three percent of the load and three percent of net
generation. Requirement R2 states that each reserve sharing group or
balancing authority must maintain at least half of the contingency
reserve as spinning reserve. Requirement R3 identifies acceptable types
of reserve to satisfy Requirement R1:
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\21\ A ``reserve sharing group'' is a group whose members
consist of two or more balancing authorities that collectively
maintain, allocate, and supply operating reserves required for each
balancing authority's use in recovering from contingencies within
the group. See NERC Glossary, available at https://www.nerc.com/docs/standards/rs/Glossary_2009April20.pdf.
R3.1. Spinning Reserve;
R3.2. Interruptible Load;
R3.3. Interchange Transactions designated by the source Balancing
Authority as non-spinning contingency reserve;
R3.4. Reserve held by the other entities by agreement that is
deliverable on Firm Transmission Service;
R3.5. An amount of off-line generation which can be synchronized and
generating; or
R.3.6. Load, other than Interruptible Load, once the Reliability
Coordinator has declared a capacity or energy emergency.
In addition, compliance measure M1 provides that a reserve sharing
group or balancing authority must have documentation that it maintained
100 percent of required contingency reserve levels ``except within the
first 105 minutes (15 minute Disturbance Recovery Period, plus 90
minute
[[Page 65966]]
Contingency Reserve Restoration Period) following an event requiring
the activation of Contingency Reserves.'' \22\
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\22\ Proposed WECC Reliability Standard BAL-002-WECC-1,
Compliance Measure M1.
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11. The NERC Petition explains that, because WECC developed the
modifications to the regional Reliability Standard submitted in the
instant proceeding, and the standard applies on an Interconnection-wide
basis, NERC must rebuttably presume that the WECC Reliability Standard
is just, reasonable, not unduly discriminatory or preferential, and in
the public interest.\23\ NERC states that it agrees with WECC that the
proposed WECC regional Reliability Standard establishes requirements
that are more stringent than those provided in the corresponding NERC
Reliability Standard.
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\23\ See NERC Petition at 8; and 16 U.S.C. 824o(d)(3).
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12. On March 18, 2010, the Commission issued a Notice of Proposed
Rulemaking (NOPR) proposing to remand the proposed regional Reliability
Standard to the ERO so that the Regional Entity may develop further
modifications.\24\ The Commission's proposal to remand the proposed
Regional Reliability Standard was based on a lack of technical support
for the adoption of less stringent requirements than those in the
currently effective WECC regional Reliability Standard and out of
concern that the proposed regional Reliability Standard is less
stringent than the NERC continent-wide Reliability Standard pertaining
to contingency reserves. The Commission expressed particular concern
with respect to a provision in the proposed regional Reliability
Standard that would permit a balancing authority, when an emergency is
declared, to count ``Load, other than Interruptible Load'' as
contingency reserve. The Commission understood this provision to allow
a balancing authority to shed firm load when a single contingency
occurs instead of procuring and utilizing generation or demand response
resource held in reserve for contingencies to balance the Bulk-Power
System. The Commission also proposed to direct WECC to develop certain
modifications to the regional Reliability Standard that would
explicitly allow demand-side management to be used as a resource for
contingency reserves.
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\24\ North American Electric Reliability Corp., NOPR, 75 FR
14,103 (March 24, 2010), FERC Stats. & Regs. ] 32,653 (2010).
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13. In response to the NOPR, comments were filed by 16 interested
parties.\25\ Several commenters, including WECC, opposed the proposed
remand, while others supported it. In its comments, WECC included
supplemental data to support the Commission's approval of the proposed
regional Reliability Standard. In the discussion below, we address the
issues raised by these comments and, pursuant to section 215(d)(4) of
the FPA, we adopt the NOPR proposal to remand the proposed regional
Reliability Standard.
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\25\ See Appendix A, List of Commenters.
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II. Discussion
14. Applying the principal of due weight to the technical expertise
of NERC and WECC, the Commission finds that the proposed regional
Reliability Standard BAL-002-WECC-1 does not meet the statutory
criteria for approval, that it be just, reasonable, not unduly
discriminatory or preferential, and in the public interest. In
particular, the Commission is concerned that reliability would be
reduced upon approval of the proposed regional Reliability Standard
because WECC's data indicates that extending the reserve restoration
period from 60 to 90 minutes would create an unreasonable risk that a
second major contingency could occur before reserves are restored after
an initial contingency. There must be sufficient technical
justification showing that the Western Interconnection can be operated
reliably with the reduced stringency. The Commission finds that the
NERC and the Regional Entity have failed to demonstrate that the
proposal is adequate to ensure the reliability of the Bulk-Power System
within WECC. Accordingly, under section 215(d)(4) of the FPA, the
Commission remands regional Reliability Standard BAL-002-WECC-1 to the
ERO with instruction for the Regional Entity to develop modifications,
as discussed below.
A. Due Weight and Effect of Remand
15. Several commenters point out that, under section 215(d)(2) of
the FPA, the Commission must give due weight to the technical expertise
of the ERO and WECC as the Regional Entity organized on an
Interconnection-wide basis.\26\ These parties argue that, applying the
principal of due weight, the Commission should approve the proposed
regional Reliability Standard. In addition, NERC states that it must
rebuttably presume that a standard developed by WECC is just,
reasonable, not unduly preferential, and in the public interest. NERC
states that, as a Regional Entity organized on an interconnection-wide
basis, WECC has exercised its technical expertise in regard to this
interconnection-wide Reliability Standard, supplemented by the
additional technical analyses provided in its response. Xcel agrees and
states that the Commission has not allowed any deference to WECC and
stakeholder experts that worked diligently to develop this Reliability
Standard.
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\26\ E.g., NERC, WECC, MISO, WIRAB, and Xcel.
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16. Several commenters contend that the proposed regional
Reliability Standard offers significant benefits over the current
version.\27\ Sempra states that the proposed standard would advance
three goals: It simplifies reserve accounting at balancing authorities
by clarifying which party carries reserves for power imports and
exports; it includes renewable resources; and it clarifies reserves
responsibility. If the Commission decides to remand the proposed
Reliability Standard, Sempra urges the Commission to require expedited
procedures because of the importance of replacing the current regional
Reliability Standard, which, Sempra contends, contains its own flaws
and ambiguities. WECC argues that remand of the proposed standard would
cause a greater probability of frequency-related instability,
uncontrolled separation, or cascading outages because the current WECC
standard does not take renewable resources, such as wind and solar,
into account when calculating minimum contingency reserve requirements.
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\27\ E.g., NERC, WECC, Bonneville, Idaho Power, NV Energy, SCE,
WIRAB, and Xcel.
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17. By contrast, Puget Sound states that, while FERC is required to
give due weight to the technical expertise of the ERO no deference is
due when the action of the ERO and Regional Entity are patently
unreasonable and arbitrary. Puget Sound contends that a regulatory
decision based on a review of only eight hours of data, as provided by
WECC, cannot be reasonably explained or considered to be supported by
substantial evidence. Powerex and NV Energy agree that WECC provided
insufficient data in its request for approval with respect to whether
the proposed regional Reliability Standard is just and reasonable.
Commission Determination
18. Section 215(d)(2) of the FPA provides that the Commission
``shall give due weight to the technical expertise'' of the ERO or a
Regional Entity organized on an Interconnection-wide basis ``with
respect to the content of a proposed standard or modification.'' As the
Commission explained in Order No. 672, the ERO or Interconnection-
[[Page 65967]]
wide Regional Entity ``must justify to the Commission its contention
that the proposed Reliability Standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.''\28\ Thus,
consistent with our explanation in Order No. 672, it is necessary for
the ERO or Regional Entity to explain adequately a Reliability Standard
or modifications to a Reliability Standard.
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\28\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 345.
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19. The Commission has given due weight to the technical expertise
of the Regional Entity as it is presented both in the NERC Petition and
in WECC's comments and supporting data and we have determined that WECC
provided inadequate support for approval of the proposed regional
Reliability Standard. In its petition, NERC provides a detailed
explanation of why it believes the proposal satisfies the statutory
criteria for approval based on the guidance provided by the Commission
in Order No. 672 regarding the factors it would consider in making that
determination.\29\ However, this explanation fails to adequately
address the substantive modifications to the regional Reliability
Standard. Moreover, WECC's comments and supplemental data did not
adequately address the Commission's concerns expressed in the NOPR that
the extension of the reserve restoration period will maintain reliable
operation of the Western Interconnection. Without adequate explanation
and technical justification, we are unable to determine whether the
proposal satisfies the statutory criteria for approval and, therefore,
remand the revised Reliability Standard to the ERO with instruction for
the Regional Entity to develop modifications, as discussed below.
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\29\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 320-337.
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20. The Commission does not take lightly its authority to remand a
Reliability Standard. We understand that before a Reliability Standard
reaches the Commission it must be vetted through an intensive standard
development process. Nevertheless, despite the efforts of the different
drafting team members who contributed to the development of this
regional Reliability Standard, for the reasons discussed below, we
believe that the statutory standard for approval has not been met on
the record before us.
21. We do not believe, as WECC suggests, that this remand will
cause a greater probability of frequency-related instability,
uncontrolled separation or cascading outages. WECC does not provide any
supporting data or technical analysis to support this claim. By
remanding the proposed regional Reliability Standard, the Commission is
upholding the currently effective regional Reliability Standard. The
Commission recognizes that the Western Interconnection is experiencing
substantial growth in variable renewable generation. We believe that
the current regional Reliability Standard has proved effective for many
years and will continue to do so until WECC can modify as necessary,
through the standards development process, this regional Reliability
Standard to ensure adequate reserves to reliably accommodate this
expansion. Furthermore, we decline to set expedited procedures for the
development of a replacement regional Reliability Standard, but WECC is
free to expedite its process to the extent WECC finds appropriate.
B. Contingency Reserve Restoration Period
22. The current regional Reliability Standard sets a maximum
contingency reserve restoration period that is more stringent than the
continent-wide requirement. NERC Reliability Standard BAL-002-0
provides that a balancing authority or reserve sharing group responding
to a disturbance must fully restore its contingency reserves within 90
minutes following the disturbance recovery period, which is set at 15
minutes.\30\ The current WECC regional BAL Reliability Standard
requires reserve sharing groups and balancing authorities to maintain
100 percent of required operating reserve levels except within the
first 60 minutes following an event requiring the activation of
operating reserves.\31\ In approving WECC-BAL-STD-002-0, the Commission
found that WECC's requirement to restore contingency reserves within 60
minutes was more stringent than the 90 minute restoration period set
forth in NERC's BAL-002-0.\32\ WECC now proposes to replace the current
60 minute restoration period requirement with a new provision that
would require the restoration of contingency reserves within 90 minutes
from the end of the disturbance recovery period (15 minutes), thus
matching the continent-wide requirement.
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\30\ Reliability Standard BAL-002-0, Requirements R4 and R6.
\31\ WECC regional Reliability Standard WECC-BAL-STD-002-0,
Measure of Compliance WM1.
\32\ North American Electric Reliability Corp., 119 FERC ]
61,260 at P 53.
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NOPR Proposal
23. In the NOPR, the Commission proposed to remand the regional
Reliability Standard BAL-002-WECC-1 based on, among other things, a
lack of any technical justification or analysis of the potential
increased risk to the Western Interconnection resulting from the
increase in the contingency reserve restoration period. The Commission
noted that, without sufficient data and analysis, it is unable to
determine whether the increase in contingency reserve restoration
period is sufficient to maintain the reliable operation of the Bulk-
Power System in the Western Interconnection. The Commission also noted
that in the Western Interconnection a significant number of
transmission paths are voltage or frequency stability-limited, in
contrast to other regions of the Bulk-Power System where transmission
paths more often are thermally-limited. Disturbances that result in a
stability-limited transmission path overload, generally, must be
responded to in a shorter time frame than a disturbance that results in
a thermally-limited transmission path overload. The Commission stated
its understanding that this physical difference is one of the reasons
for the need for certain provisions of regional Reliability Standards
in the Western Interconnection.
Comments
24. WECC, supported by Bonneville, Idaho Power, SCE, and Xcel,
argues that additional studies are unnecessary because the proposed
restoration period is identical to the continent-wide restoration
period. WECC comments that the Commission should defer to WECC's
technical expertise in concluding that more stringent contingency
reserve restoration period is no longer necessary. WECC also offers
historical data that demonstrates that a second contingency involving
the loss of a resource greater than 1000 MW between 60 and 90 minutes
after a first contingency occurred six times in the last 15 years or
0.4 events on an annual basis, which, WECC argues, is insufficient to
require rejection of a proposed standard on the basis of reliability
impact. Bonneville and Xcel argue that increasing the contingency
reserve restoration period will result in more efficient system
operation without sacrificing reliability. Xcel adds that it will allow
for more efficient communication among balancing authorities because
the restoration period will be closer to the e-tagging system approval
cycle.
[[Page 65968]]
25. MISO comments that it is imperative that the Commission give
due consideration to approving modifications to Reliability Standards
so that Regional Entities can implement changes as understanding grows
and experience is gained. MISO contends that disallowance of reasonable
modifications, such as those presented here, will have the unintended
consequence of fostering a reluctance to develop other regional
standards, or encouraging a minimalist approach when standards must
necessarily be developed. WECC echoes these concerns and argues that
there is no requirement that a regional Reliability Standard can only
be modified in a manner that makes it even more stringent. Such a
requirement, WECC contends, would create a ``one-way ratchet'' that
would severely inhibit the ability to adjust Reliability Standards to
meet changing conditions, would encourage proposed standards reflecting
the ``lowest common denominator'' and would fail to provide deference
to the technical expertise of an interconnection-wide Regional Entity.
Commission Determination
26. The Commission finds that the extension of the reserve
restoration period has not been justified as an acceptable level of
risk within the Western Interconnection. WECC's own analysis shows
that, based on historical experience, replacing the 60 minute
requirement with the continent-wide 90 minute requirement could result
in a second major contingency before restoration of reserves would be
required, and that a second major contingency occurred within WECC
during this extended time frame six times in the last 15 years.\33\
WECC argues that in the Western Interconnection ``instability and/or
underfrequency load shedding normally would not occur in the absence of
a third contingency of significant magnitude within the restoration
period.'' \34\ WECC's generalization, however, is unsupported by
historical quantification or documentation in this record and, thus,
does not persuade us.\35\
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\33\ WECC's analysis shows that, over the past 15 years, the
proposed increased contingency reserve restoration period would have
resulted in 139 more events within the proposed 90 minute
contingency reserve restoration period. Limiting the analysis to
losses of generation greater than 500 MW, there were only 58 events
occurring within the proposed extended contingency reserve
restoration period. Limiting the analysis to losses of generation
greater than 1000 MW, there were only six events during the extended
contingency restoration period. WECC contends that losses of less
than 1,000 MW of generation have a minimal impact on the system
frequency response of the Western Interconnection and have minimal
impacts on the reliability of the interconnected system. WECC May
24, 2010 Comments at 13.
\34\ WECC May 24, 2010 Comments at 13 n.10.
\35\ WECC's statement is consistent with a statement made in a
2007 compliance filing that ``WECC operates its system in such a
manner that the system is at least two contingencies away from a
cascading failure.'' WECC Compliance Filing, Docket No. RR07-11-000,
at 5 (filed July 9, 2007). Nevertheless, WECC is proposing to change
its operating conditions by extending the reserve restoration
period. Thus, it must provide adequate technical justification that
the revised requirements will maintain reliable operation of the
Bulk-Power System in the Western Interconnection.
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27. While it is not inevitable that the proposed extension of the
contingency reserve restoration period would result in adverse
reliability impacts in the Western Interconnection, the data provided
shows that the Western Interconnection could be exposed to the
potential for a major disturbance every two to three years that could
result in frequency-related instability, uncontrolled separation or
cascading outages. The Commission is particularly concerned about these
potential events occurring in the Western Interconnection because, as
the Commission discussed in the NOPR, it is our understanding that a
significant number of transmission paths in the Western Interconnection
are voltage or frequency stability-limited, in contrast to other
regions of the Bulk-Power System where transmission paths more often
are thermally-limited. Disturbances that occur in a stability-limited
transmission path overload, generally, must be responded to in a
shorter time frame than a disturbance that occurs in a thermally-
limited transmission path overload.\36\ A thermal limit is determined
by how much a line can overheat without damaging equipment; lines that
are thermally-limited can have short-term emergency limits that are
higher than the normal line rating, since heating occurs over a period
of time. This is different from a stability limit, which is determined
by a system-wide voltage or frequency stability constraint, and loading
the line above this limit for any amount of time could result in
instability and cascading outages.
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\36\ NOPR, FERC Stats. & Regs. ] 32,653 at P 37.
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28. The reliance on stability-limited transmission paths becomes a
concern during the contingency reserve restoration period because
balancing authorities rely on imported power from external sources
until the entity that had the disturbance replaces the resource lost
during the disturbance.\37\ Since stability-limited lines do not have
higher emergency ratings, as thermally-limited lines can, any
disturbance that would result in increasing flows over a stability-
limited line must be addressed in a shorter time-frame than a
disturbance that only affects thermally-limited lines. There will be
some situations in which imports stress stability-limited transmission
lines. In those circumstances, extending the contingency reserve
restoration period would extend the amount of time the imported power
could stress the stability limited transmission lines, potentially
leaving the Western Interconnection in a stressed condition that could
result in adverse reliability impacts if another disturbance were to
occur. On remand, we direct WECC to develop a modification to the
reserve restoration period or provide evidence demonstrating that
extending the reserve restoration period to 90 minutes and adding a
disturbance recovery period of 15 minutes would not increase the risk
of a major disturbance in the Western Interconnection.
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\37\ See NERC, Balancing and Frequency Control, at 6-10 (Nov.
2009), available at https://www.nerc.com/docs/oc/rs/NERC_Balancing_and_Frequency_Control_Part_1_9Nov2009_(Revision2).pdf.
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29. The fact that the proposed extension of the reserve restoration
period would match the continent-wide requirement and, thus, would
foster certain operational efficiencies through the use of the e-
tagging system does not allay our concerns that the extension could be
harmful to the reliable operation of the Western Interconnection. The
e-tagging system is an efficient tool used for day-ahead and hour-ahead
market accounting and as input for day-ahead and hour-ahead transfer
capability analysis of scheduled interchange transactions and
development of day-ahead and hour-ahead capacity and energy resource
schedules. As such, it may allow for more efficient communication among
balancing authorities during operational planning periods. However, in
2008, a WECC task force expressed concern that the ``e-Tag and
communications processes are time consuming and cumbersome when
scheduling and tagging the large amounts of energy required to recover
from system emergencies, particularly in mid-hour.''\38\ Although
adoption of the e-tagging system may result in more efficient
communication among transmission operators and balancing
[[Page 65969]]
authorities for day-ahead and hour-ahead scheduling, this fact alone is
not sufficient to justify the potential reliability impacts involved
with extending the reserve restoration period.
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\38\ WECC Disturbance Task Force, PacifiCorp East February 14,
2008 Detailed Disturbance Report stated in Conclusion 17 (Aug. 2008)
available at https://www.wecc.biz/committees/BOD/081308/Lists/Agendas/1/PacifiCorp%20East%20Disturbance%20Board%20presentation%20Aug%2008%20Final.pdf.
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30. The Commission's action in this proceeding does not create a
``one-way ratchet'' for the development of regional Reliability
Standards. In specific circumstances, the Commission could approve
retirement of a more stringent regional requirement if the Regional
Entity demonstrates that the continent-wide Reliability Standard is
sufficient to ensure the reliability of that region. In this case,
however, WECC argued only three years earlier that the added stringency
of the current regional Reliability Standard was critical to the
reliable operation of the Western Interconnection.\39\ We find that
WECC provided insufficient technical detail and analysis for us to make
a reasoned determination that the proposed requirement will adequately
protect the reliability of the region. Regional Entities have the
discretion to develop regional Reliability Standards and implement
changes as understanding grows and experience is gained without concern
that the Commission will always hold them to their more stringent
requirements in all circumstances regardless of the provided
justification. The Commission will evaluate such proposed changes,
including those to a less stringent state, on their merit so long as
adequate reliability is maintained. In this instance, given WECC's
prior statements and its own analysis that such an extended restoration
period could lead to major system disturbances, WECC has failed to
demonstrate that its proposal will maintain adequate reliability, and
therefore has failed to demonstrate that its proposal is just,
reasonable, and in the public interest. Consequently, we remand this
proposal.
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\39\ In its letter requesting approval of the current regional
Reliability Standards WECC states:
The WECC Operating Committee thereafter undertook a
comprehensive review of all WECC criteria, policies, and guidelines
in an effort to identify all unique (i.e., those not in NERC
standards) and essential (i.e., necessary to protect WECC
reliability) criteria that it believed critical to the reliability
of the Western Interconnection. The Operating Committee concluded
that eight regional standards, proposed for adoption here, are of
the highest priority.''
NERC, Request for Approval of Regional Reliability Standards,
Docket No. RR07-11-000, at 4 (filed March 26, 2007) (NERC 2007
Petition).
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C. Calculation of Minimum Contingency Reserve
31. NERC's Disturbance Control Standard, continent-wide Reliability
Standard BAL-002-0, requires each balancing authority or reserve
sharing group, at a minimum, to maintain at least enough contingency
reserve to cover the most severe single contingency. Similarly,
requirement WR1(a)(ii) of WECC's current WECC-BAL-STD-002-0 requires
balancing authorities to maintain a contingency reserve of spinning and
non-spinning reserves (at least half of which must be spinning),
sufficient to meet the NERC Disturbance Control Standard, BAL-002-0,
equal to the greater of: (1) the loss of generating capacity due to
forced outages of generation or transmission equipment that would
result from the most severe single contingency; or (2) the sum of five
percent of load responsibility served by hydro generation and seven
percent of the load responsibility served by thermal generation. In
approving the regional BAL-STD-002-0 Reliability Standard, the
Commission noted that the regional Reliability Standard is more
stringent than the NERC Reliability Standard, BAL-002-0, because WECC
requires a more stringent minimum reserve requirement than the
continent-wide requirement.
32. As proposed, Requirement R1 of BAL-002-WECC-1 would require
each reserve sharing group or balancing authority that is not a member
of a reserve sharing group to maintain a minimum contingency reserve.
NERC contends that the proposed minimum contingency reserve amount is
more stringent than that required by the continent-wide Reliability
Standard.\40\ NERC explains that, whereas Requirement R3.1 of BAL-002-0
requires that each balancing authority or reserve sharing group carry,
at a minimum, at least enough contingency reserve to cover the most
severe single contingency, proposed Requirement R1.1 of BAL-002-WECC-1
requires that each balancing authority or reserve sharing group
maintain, as a minimum, contingency reserves equal to the loss of the
most severe single contingency or an amount of reserve equal to the sum
of three percent of the load (generation minus station service minus
net actual interchange) and three percent of net generation (generation
minus station service).\41\
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\40\ NERC Petition at 9.
\41\ Id. at 14.
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NOPR Proposal
33. The Commission proposed to find that the eight hours of data
provided by WECC in its initial filing is insufficient to demonstrate
that the proposed minimum contingency reserve requirements are
sufficiently stringent to ensure that entities within the Western
Interconnection will meet the requirements of NERC's continent-wide
Disturbance Control Standard, BAL-002-0. The Commission noted that, in
its March 2007 petition proposing the currently effective regional
Reliability Standard, NERC stated that the eight proposed regional
Reliability Standards ``were critical to maintaining reliability within
the Western Interconnection.'' \42\ The Commission expressed concern
that the proposed regional Reliability Standard was less stringent than
the current regional Reliability Standard and that NERC had not
demonstrated that the proposed regional requirements were sufficient to
meet the requirements of NERC's continent-wide Disturbance Control
Standard, BAL-002-0.
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\42\ NERC 2007 Petition at 4.
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34. Although the proposed Reliability Standard offers some added
clarity by eliminating reference to the term ``load responsibility''
and including renewable energy resources in the calculation of
contingency reserves, the Commission proposed to find that NERC and
WECC did not provide sufficient technical justification to support the
proposed revised method for calculating contingency reserves. Thus, the
Commission proposed to remand BAL-002-WECC-1 so that WECC could develop
additional support and make modifications as appropriate for a future
proposal.
Comments
35. Several commenters argue that the proposed calculation of
minimum contingency reserve levels is more stringent than the
continent-wide NERC requirements under BAL-002-0.\43\ WECC comments
that the Commission has failed to explain how the proposed regional
Reliability Standard, which sets minimum contingency reserve level as
the greater of the most severe single contingency or a calculation of
net generation and load, could be less stringent than the continent-
wide requirement, which sets a minimum contingency reserve level as
equal to the most severe single contingency. NERC, Bonneville, Idaho
Power, NV Energy, SCE, WIRAB, and Xcel all agree that the proposed
regional requirement for calculating minimum contingency reserve levels
is more stringent than the current continent-wide requirement. NERC
adds that, in addition to including a more stringent calculation of
minimum reserve levels, the proposed regional Reliability Standard is
more stringent than the current
[[Page 65970]]
continent-wide Reliability Standard because it includes a requirement
that half of the contingency reserves must immediately and
automatically respond proportionally to frequency deviations, e.g.,
through the action of a governor or other control system. Moreover,
WECC points out that nothing in the proposed Reliability Standard
excuses any balancing authority or reserve sharing group from
satisfying the requirements of the continent-wide Reliability Standard
BAL-002-0.
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\43\ E.g., WECC, NERC, Bonneville, Idaho Power, NV Energy, SCE,
WIRAB, and Xcel.
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36. Several commenters argue that approval of the proposed
Reliability Standard does not require any more technical justification
to support the proposed calculation of minimum contingency reserve
levels. WECC notes that the currently approved regional Reliability
Standard was established through negotiations in the 1960s, and was
based on engineering judgment, rather than on technical studies or
simulations. Bonneville adds that the Commission did not require
extensive data support when it approved the current regional
Reliability Standard. NV Energy admits that NERC has provided
insufficient data with respect to whether the requested revision is
just and reasonable and that data may suggest that the proposed
calculation may allow responsible entities to carry less contingency
reserves than currently required under the existing regional
Reliability Standard. Nevertheless, NV Energy argues that the
Commission should approve the proposed Reliability Standard without
requiring any further data because reserve levels required under the
proposed Reliability Standard will be equal to or greater and, thus,
more stringent than reserve levels required under the continent-wide
Reliability Standard.
37. Although WECC argues that it should not be required to provide
any further technical justification, along with its NOPR comments WECC
provided additional data from a frequency responsive reserve study as
support for the proposed regional Reliability Standard. WECC states
that the summary of data demonstrates that, based on stability
simulations applied to varying load scenarios, a minimum of 2,400 MW of
response reserve is necessary to prevent underfrequency load shedding.
Based on a review of all hours during 2007-2008, WECC contends that the
proposed regional Reliability Standard would result in at least 2,927
MW of automatically responsive reserves; more than 500 MW above the
amount required for stability purposes.
38. Powerex and Puget Sound argue that the data provided by WECC in
the NERC Petition are insufficient to support the proposed Reliability
Standard and support the Commission's proposed remand. Puget Sound
contends that WECC's reliance on only eight hours of data to support
the proposed standard was unreasonable and arbitrary and, therefore,
the Commission could not reasonably approve the proposed Reliability
Standard. Powerex argues that the eight hours of data provided by WECC
in the NERC Petition is insufficient to demonstrate that the proposed
minimum contingency reserve requirements are sufficiently stringent to
ensure that entities within the Western Interconnection will meet the
requirements of the continent-wide Reliability Standard. Powerex
reiterates a concern that it expressed during the standard development
process that the proposed regional Reliability Standard assumes the
existence of a liquid ancillary service market when no such market
exists in WECC. Powerex comments that the proposed standard shifts the
operating reserve responsibility away from the source to the load and
will, thereby, result in significant increases in operating reserve
requirements of a number of jurisdictions that are primarily load-based
and will, therefore, require them to procure operating reserves.
Commission Determination
39. We will accept WECC's proposal on this issue. We believe that
WECC's proposed calculation of minimum contingency reserves is more
stringent than the national requirement and could be part of a future
proposal that the Commission could find to be just, reasonable, not
unduly discriminatory or preferential, and in the public interest. In
the NERC Petition for approval of the proposed regional Reliability
Standard, WECC provided technical studies covering eight hours from
each of the four operating seasons (summer, fall, winter, and spring,
both on and off-peak). WECC acknowledges that this data illustrates
that the methodology in the proposed regional Reliability Standard
reduces the total reserves required in the Western Interconnection for
each of the eight hours assessed when compared with the methodology in
the current regional Reliability Standard.\44\ However, WECC also
states that the proposed regional Reliability Standard does not excuse
``any non-performance with the continent-wide Disturbance Control
Standard,'' which requires each balancing authority or reserve sharing
group to activate sufficient contingency reserve to comply with the
Disturbance Control Standard.\45\ WECC's proposal would require
reserves equal to the greater of: (i) The most severe single
contingency; or (ii) the sum of three percent of the load and three
percent of net generation. Moreover, the deliverability of these
contingency reserves would continue to be assured under Requirement R7
of Reliability Standard TOP-002. Any lack of deliverability would
violate TOP-002 regardless of whether the amount of contingency
reserves is based on WECC's current requirement or its proposed
requirement.
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\44\ See NERC Petition, Exhibit C at 1 (``The estimated impact
of these changes to the required level of reserves in the WECC is a
reduction of 650 MWs or less, a decrease of approximately 9
[percent] at most.'').
\45\ WECC May 24, 2010 Comments at 6 n.7.
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40. Should WECC resubmit its proposed calculation of minimum
contingency reserves as part of its response to our remand on the issue
of the restoration period, NERC and/or WECC could buttress its proposal
with audits specifically focused on contingency reserves and whether
balancing authorities are meeting the adequacy and deliverability
requirements. This auditing could provide additional assurance to the
Commission that the proposed requirement is just, reasonable, and in
the public interest. This auditing also could address the concerns
raised by some entities in WECC that the original eight hours of data
provided in NERC's petition is insufficient to demonstrate that the
proposed minimum contingency reserve requirements are sufficiently
stringent to ensure that entities within the Western Interconnection
will meet the requirements of NERC's continent-wide Disturbance Control
Standard, BAL-002-0.\46\ Thus, the auditing could provide adequate
technical justification to support the proposed modification.
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\46\ See Powerex Comments at 4; Puget Sound Comments at 2.
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41. In response to Powerex's concerns, we believe that a
calculation of minimum contingency reserves that is based on three
percent of net generation and three percent of net load would fairly
balance the responsibilities of contingency reserve providers with the
financial obligations of those who would benefit most from those
services. Under the current regional Reliability Standard, the total
contingency reserve that a balancing authority must maintain is based
only on generating resources. By contrast, under the proposed
requirement, the total contingency reserve that a balancing
[[Page 65971]]
authority must maintain is based on a combination of the generating
resources and the demand served within a balancing authority footprint.
We agree with NERC that the equal split between load and generation
represents a reasonable balance to moderate shifts in contingency
reserve responsibility and costs among the applicable entities.\47\
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\47\ NERC Petition at 18.
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D. Use of Firm Load To Meet Contingency Reserve Requirement
42. Requirement R3 of proposed BAL-002-WECC-1 would require that
each reserve sharing group or balancing authority use certain types of
reserves that must be fully deployable within ten minutes of
notification to meet their contingency reserve requirement. Requirement
R3.6 of Reliability Standard BAL-002-WECC-1 would allow entities to use
``Load, other than Interruptible Load, once the Reliability Coordinator
has declared a capacity or energy emergency.'' \48\
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\48\ BAL-002-WECC-1, Requirement R3.6.
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NOPR Proposal
43. In its NOPR, the Commission proposed to find that Requirement
R3.6 is not technically sound because it would allow balancing
authorities and reserve sharing groups within WECC to use firm load to
meet their minimum contingency reserve requirements ``once the
Reliability Coordinator has declared a capacity or energy emergency,''
thus creating the possibility that firm load could be shed due to the
loss of a single element on the system.\49\ The Commission stated that
the currently effective regional Reliability Standard does not allow
the use of firm load to meet minimum contingency reserve levels.
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\49\ Citing Order No. 672, FERC Stats. & Regs. ] 31,204 at P 324
(identifying guidelines for what constitutes a just and reasonable
Reliability Standard).
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Comments
44. WECC, supported by Bonneville, Idaho Power, and SCE, contends
that the proposed regional Reliability Standard treats firm load no
differently than the continent-wide Reliability Standard. WECC states
that the proposed regional Reliability Standard permits the use of
load, other than interruptible load, to meet a contingency only if
``the Reliability Coordinator has declared a capacity or energy
emergency.'' \50\ By contrast, WECC comments, the continent-wide
Reliability Standard provides that contingency reserve may be met by
Operating Reserve-Spinning and Operating Reserve-Supplemental, which
include ``load fully removable from the system within the Disturbance
Recovery Period following the contingency event'' to be used to meet
contingencies.\51\ WECC points out that the continent-wide Reliability
Standard does not refer to the declaration of an emergency. For the
same reason, Idaho Power and Xcel state that the proposed provisions
related to the use of firm load to meet contingency reserve
requirements are more stringent than the continent-wide standards. They
contend that, unlike the continent-wide Reliability Standard, the
proposed regional Reliability Standard requires the declaration of an
emergency prior to utilizing firm load to meet contingency reserve
requirements.
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\50\ BAL-002-WECC-1, Requirement R3.6.
\51\ See NERC Glossary, available at https://www.nerc.com/docs/standards/rs/Glossary_of_Terms_2010April20.pdf.
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45. Idaho Power comments that if balancing authorities are unable
to count firm load towards contingency reserve requirements, balancing
authorities may have no choice but to shed firm load to remain in
compliance with the continent-wide Reliability Standard BAL-002-0.
Idaho Power explains that Requirement R6.2 of Reliability Standard EOP-
002-2.1 requires a balancing authority to deploy all available
operating reserves if it cannot meet the Disturbance Control Standard.
If the balancing authority deploys all available operating reserves,
including interruptible loads pursuant to Reliability Standard EOP-002-
2.1, but cannot declare firm load interruptible to satisfy contingency
reserve requirements, Idaho Power contends that the balancing authority
may have no choice but to shed firm load to maintain compliance with
the continent-wide Reliability Standard BAL-002. Thus, Idaho Power
argues that not all emergencies are created equal and the flexibility
to count firm load toward contingency requirements, in limited
circumstances, would promote reliability but avoid unnecessary outages.
46. WECC also states that nothing in the proposed standard directs
any entity to take action that would violate the requirements relating
to alert levels prescribed in EOP-002-2.1. Bonneville agrees and states
that the Commission's concern is misplaced because the proposed
Reliability Standard does not authorize an entity to interrupt firm
load for contingency reserves during EOP-002-2.1 energy emergency
alerts 1 and 2. If the Commission believes that the proposed
Reliability Standard should further qualify the circumstances under
which loads may be used for contingency reserves, WECC contends that
the issue should be addressed in a manner and at a time that does not
preclude approval of the proposed regional Reliability Standard. WECC
adds that it is prepared to participate in any efforts intended to
address the Commission's concerns in this regard.
47. NERC agrees with WECC that a reliability coordinator must
declare a capacity or energy emergency before firm load could be
considered to maintain contingency reserves but also agrees with the
Commission that greater specificity of the appropriate Energy Emergency
Alert (EEA) level that must be declared would be helpful. Puget Sound
argues that the proposed language could be interpreted to allow the use
of firm load in a manner that is inconsistent with EOP-002-2.1. CDWR
comments that reliability planning should not consider shedding firm
loads as a contingency reserve. CDWR contends that balancing authority
should plan for load interruption only if a customer voluntarily agrees
to that specific use of its loads, and only upon clear terms and
conditions.
Commission Determination
48. We will accept WECC's proposal on this issue. The Commission
finds that, similar to the current continent-wide Reliability Standard,
the proposed regional Reliability Standard does not allow balancing
authorities or reserve sharing groups to curtail firm load except in
compliance with NERC's Reliability Standard EOP-002-2.1.
49. The continent-wide Reliability Standard, BAL-002 does not
contemplate the use of firm load as contingency reserve. In fact, it
would be a violation of EOP-002-2.1 if balancing authorities or reserve
sharing groups outside of WECC planned to shed firm load before the
reliability coordinator issued a level 3 energy emergency alert.\52\
Similarly, although Requirement R3.6 of Reliability Standard BAL-002-
WECC-1 would allow balancing authorities and reserve sharing groups to
use ``Load, other than Interruptible Load, once the Reliability
Coordinator has declared a capacity or energy emergency,'' \53\ these
entities would not be authorized to shed firm load unless the
applicable reliability coordinator had issued a level 3 energy
emergency alert pursuant to EOP-002-2.1. Thus, balancing authorities
and reserve sharing groups within WECC are subject to the same
restrictions regarding the use of firm load as contingency reserve as
balancing authorities elsewhere
[[Page 65972]]
operating under the continent-wide Reliability Standard. On remand, we
direct WECC to develop revised language to clarify this point.
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\52\ EOP-002-2.1, Requirement R7.
\53\ BAL-002-WECC-1, Requirement R3.6.
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E. Demand-Side Management as a Resource
50. In Order No. 693, the Commission directed the ERO to submit a
modification to continent-wide Reliability Standard BAL-002-0 that
includes a Requirement that
