Regional Reliability Standard BAL-002-WECC-2-Contingency Reserve, 71448-71457 [2013-28626]
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Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Rules and Regulations
f. Finally, the design of the adverse
scenario for annual stress tests could be
informed by the companies’ own trading
scenarios used for their BHC-designed
scenarios in CCAR and in their mid-cycle
company-run stress tests.40
6. Consistency Between the Macroeconomic
Scenarios and the Market Shock
a. As discussed earlier, the market shock
comprises a set of movements in a very large
number of risk factors that are realized
instantaneously. Among the risk factors
specified in the market shock are several
variables also specified in the
macroeconomic scenarios, such as short- and
long-maturity interest rates on Treasury and
corporate debt, the level and volatility of U.S.
stock prices, and exchange rates.
b. The market shock component is an addon to the macroeconomic scenarios that is
applied to a subset of companies, with no
assumed effect on other aspects of the stress
tests such as balances, revenues, or other
losses. As a result, the market shock
component may not be always directionally
consistent with the macroeconomic scenario.
Because the market shock is designed, in
part, to mimic the effects of a sudden market
dislocation, while the macroeconomic
scenarios are designed to provide a
description of the evolution of the real
economy over two or more years, assumed
economic conditions can move in
significantly different ways. In effect, the
market shock can simulate a market panic,
during which financial asset prices move
rapidly in unexpected directions, and the
macroeconomic assumptions can simulate
the severe recession that follows. Indeed, the
pattern of a financial crisis, characterized by
a short period of wild swings in asset prices
followed by a prolonged period of moribund
activity, and a subsequent severe recession is
familiar and plausible.
c. As discussed in section 4.2.4, the Board
may feature a particularly salient risk in the
macroeconomic assumptions for the severely
adverse scenario, such as a fall in an elevated
asset price. In such instances, the Board may
also seek to reflect the same risk in one of
the market shocks. For example, if the
macroeconomic scenario were to feature a
substantial decline in house prices, it may
seem plausible for the market shock to also
feature a significant decline in market values
of any securities that are closely tied to the
housing sector or residential mortgages.
d. In addition, as discussed in section 4.3,
the Board may specify the macroeconomic
assumptions in the adverse scenario in such
a way as to explore risks qualitatively
different from those in the severely adverse
scenario. Depending on the nature and type
of such risks, the Board may also seek to
reflect these risks in one of the market shocks
as appropriate.
7. Timeline for Scenario Publication
a. The Board will provide a description of
the macroeconomic scenarios by no later
than November 15 of each year. During the
period immediately preceding the
publication of the scenarios, the Board will
collect and consider information from
academics, professional forecasters,
international organizations, domestic and
foreign supervisors, and other private-sector
analysts that regularly conduct stress tests
based on U.S. and global economic and
financial scenarios, including analysts at the
covered companies. In addition, the Board
will consult with the FDIC and the OCC on
the salient risks to be considered in the
scenarios. The Board expects to conduct this
process in July and August of each year and
to update the scenarios based on incoming
macroeconomic data releases and other
information through the end of October.
b. The Board expects to provide a broad
overview of the market shock component
along with the macroeconomic scenarios.
The Board will publish the market shock
templates by no later than December 1 of
each year, and intends to publish the market
shock earlier in the stress test and capital
plan cycles to allow companies more time to
conduct their stress tests.
TABLE 1—CLASSIFICATION OF U.S. RECESSIONS
Duration
(quarters)
Peak
Trough
Severity
1957Q3 .............
1960Q2 .............
1969Q4 .............
1973Q4 .............
1980Q1 .............
1981Q3 .............
1990Q3 .............
2001Q1 .............
2007Q4 .............
Average ............
Average ............
Average ............
1958Q2 .............
1961Q1 .............
1970Q4 .............
1975Q1 .............
1980Q3 .............
1982Q4 .............
1991Q1 .............
2001Q4 .............
2009Q2 .............
...........................
...........................
...........................
Severe .............................
Moderate ..........................
Moderate ..........................
Severe .............................
Moderate ..........................
Severe .............................
Mild ..................................
Mild ..................................
Severe .............................
Severe .............................
Moderate ..........................
Mild ..................................
4
4
5
6
3
6
3
4
7
6
4
3
Decline in
Real GDP
Change in the
Unemployment
Rate during
the Recession
Total change
in the Unemployment rate
(incl. after the
Recession)
3.2
1.6
2.2
3.4
1.4
3.3
0.9
1.3
4.5
3.7
1.8
1.1
3.2
1.8
2.4
4.1
1.4
3.3
1.9
2.0
5.1
3.9
1.8
1.9
¥3.6
¥1.0
¥0.2
¥3.1
¥2.2
¥2.8
¥1.3
0.2
¥4.3
¥3.5
¥1.1
¥0.6
(Medium) ......................
(Medium) ......................
(Medium) ......................
(Long) ...........................
(Short) ...........................
(Long) ...........................
(Short) ...........................
(Medium) ......................
(Long) ...........................
.......................................
.......................................
.......................................
Source: Bureau of Economic Analysis, National Income and Product Accounts, Comprehensive Revision on July 31, 2013.
By order of the Board of Governors of the
Federal Reserve System, November 6, 2013.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2013–27009 Filed 11–27–13; 8:45 am]
Federal Energy Regulatory
Commission
18 CFR Part 40
BILLING CODE 6210–01–P
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[Docket No. RM13–13–000; Order No. 789]
Regional Reliability Standard BAL–
002–WECC–2—Contingency Reserve
Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:
40 12
Under section 215 of the
Federal Power Act, the Federal Energy
Regulatory Commission (Commission)
approves regional Reliability Standard
BAL–002–WECC–2 (Contingency
Reserve). The North American Electric
Reliability Corporation (NERC) and
Western Electricity Coordinating
Council (WECC) submitted the regional
Reliability Standard to the Commission
for approval. The regional Reliability
Standard applies to balancing
authorities and reserve sharing groups
in the WECC Region and is meant to
specify the quantity and types of
SUMMARY:
DEPARTMENT OF ENERGY
CFR 252.145.
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Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Rules and Regulations
contingency reserve required to ensure
reliability under normal and abnormal
conditions.
Effective Date: This rule will
become effective January 28, 2014.
FOR FURTHER INFORMATION CONTACT:
´
´
Andres Lopez Esquerra (Technical
Information), Office of Electric
Reliability, Division of Reliability
Standards, Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426, Telephone:
(202) 502–6128, Andres.Lopez@ferc.gov.
Matthew Vlissides (Legal
Information), Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426, Telephone:
(202) 502–8408, Matthew.Vlissides@
ferc.gov.
DATES:
145 FERC
¶ 61,141, United States of America,
Federal Energy Regulatory Commission
SUPPLEMENTARY INFORMATION:
Before Commissioners: Jon Wellinghoff,
Chairman; Philip D. Moeller, John R.
Norris, Cheryl A. LaFleur, and Tony Clark.
Regional Reliability Standard BAL–
002–WECC–2—Contingency Reserve
Docket No. RM13–13–000
Order No. 789
Final Rule
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(Issued November 21, 2013)
1. Under section 215 of the Federal
Power Act (FPA),1 the Commission
approves regional Reliability Standard
BAL–002–WECC–2 (Contingency
Reserve). The North American Electric
Reliability Corporation (NERC) and
Western Electricity Coordinating
Council (WECC) submitted the regional
Reliability Standard to the Commission
for approval. The WECC regional
Reliability Standard applies to
balancing authorities and reserve
sharing groups in the WECC Region and
is meant to specify the quantity and
types of contingency reserve required to
ensure reliability under normal and
abnormal conditions.
2. The Commission approves the
associated violation risk factors (VRFs)
and violation severity levels (VSLs),
implementation plan, and effective date
proposed by NERC and WECC. The
Commission also approves the
retirement of WECC regional Reliability
Standard BAL–STD–002–0 (Operating
Reserves) and the removal of two WECC
Regional Definitions, ‘‘Non-Spinning
Reserve’’ and ‘‘Spinning Reserve,’’ from
the Glossary of Terms Used in NERC
1 16
U.S.C. 824o.
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Reliability Standards (NERC Glossary).2
In addition, the Commission directs
NERC to submit an informational filing
after the first two years of
implementation of regional Reliability
Standard BAL–002–WECC–2 that
addresses the adequacy of contingency
reserve in the Western Interconnection.
I. Background
A. Mandatory Reliability Standards
3. Section 215(c) of the FPA requires
a Commission-certified Electric
Reliability Organization (ERO) to
develop mandatory and enforceable
Reliability Standards that are subject to
Commission review and approval. Once
approved, the Reliability Standards may
be enforced by NERC, subject to
Commission oversight, or by the
Commission independently.3
4. A Regional Entity may develop a
Reliability Standard for Commission
approval to be effective in that region
only.4 In Order No. 672, 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.5
5. On April 19, 2007, the Commission
accepted delegation agreements between
NERC and each of the eight Regional
Entities.6 In the order, the Commission
accepted WECC as a Regional Entity.
B. NERC Reliability Standard BAL–002–
1 (Disturbance Control Performance)
6. In Order No. 693, the Commission
approved NERC Reliability Standard
BAL–002–0.7 On January 10, 2011, the
2 North American Electric Reliability Corporation
Definitions Used in the Rules of Procedure,
Appendix 2 to the NERC Rules of Procedure
(effective September 3, 2013).
3 16 U.S.C. 824o(e).
4 16 U.S.C. 824o(e)(4). A Regional Entity is an
entity that has been approved by the Commission
to enforce Reliability Standards under delegated
authority from the ERO. See 16 U.S.C. 824o(a)(7)
and (e)(4).
5 Rules Concerning Certification of the Electric
Reliability Organization; and Procedures for the
Establishment, Approval, and Enforcement of
Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ¶ 31,204, at P 291, order on reh’g,
Order No. 672–A, FERC Stats. & Regs. ¶ 31,212
(2006).
6 North American Electric Reliability Corp., 119
FERC ¶ 61,060, order on reh’g, 120 FERC ¶ 61,260
(2007).
7 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs.
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Commission approved a revised version
of the NERC Reliability Standard, BAL–
002–1 (Disturbance Control
Performance), which NERC developed
and submitted to address directives
contained in Order No. 693.8 The
purpose of NERC Reliability Standard
BAL–002–1 is to ensure that a balancing
authority is able to use its contingency
reserve to balance resources and
demand and return Interconnection
frequency within defined limits
following a Reportable Disturbance.9
C. WECC Regional Reliability Standard
BAL–STD–002–0
7. On June 8, 2007, the Commission
approved WECC regional Reliability
Standard BAL–STD–002–0, which is
currently in effect.10 The Commission
stated that regional Reliability Standard
BAL–STD–002–0 was more stringent
than the NERC Reliability Standard
BAL–002–0 because the WECC regional
Reliability Standard required: (1) a more
stringent minimum reserve requirement;
and (2) restoration of contingency
reserves within 60 minutes, as opposed
to the 90-minute restoration period
required by the NERC Reliability
Standard BAL–002–0.11 The
Commission directed WECC to make
minor modifications to regional
Reliability Standard BAL–STD–002–0.
For example, the Commission
determined that: (1) regional definitions
should conform to definitions set forth
in the 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 Standards. 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
¶ 31,242, order on reh’g, Order No. 693–A, 120
FERC ¶ 61,053 (2007).
8 North American Electric Reliability Corp., 134
FERC ¶ 61,015 (2011).
9 The NERC Glossary defines Contingency
Reserve as ‘‘[t]he provision of capacity deployed by
the Balancing Authority to meet the Disturbance
Control Standard (DCS) and other NERC and
Regional Reliability Organization contingency
requirements.’’ The NERC Glossary defines
Reportable Disturbance as ‘‘[a]ny event that causes
an [Area Control Error (ACE)] change greater than
or equal to 80% of a Balancing Authority’s or
reserve sharing group’s most severe contingency.
The definition of a reportable disturbance is
specified by each Regional Reliability Organization.
This definition may not be retroactively adjusted in
response to observed performance.’’
10 North American Electric Reliability Corp., 119
FERC ¶ 61,260 (2007).
11 Id. P 53.
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concerns regarding ambiguities in the
terms ‘‘load responsibility’’ and ‘‘firm
transaction.’’ 12
D. Remanded WECC Regional Reliability
Standard BAL–002–WECC–1
8. On March 25, 2009, NERC
submitted to the Commission for
approval WECC regional Reliability
Standard BAL–002–WECC–1
(Contingency Reserves). In Order No.
740, the Commission remanded regional
Reliability Standard BAL–002–WECC–
1.13 In Order No. 740, the Commission
identified five issues with remanded
regional Reliability Standard BAL–002–
WECC–1: (1) the restoration period for
contingency reserve; (2) the calculation
of minimum contingency reserve; (3) the
use of firm load to meet the contingency
reserve requirement; (4) the use of
demand-side management as a resource;
and (5) miscellaneous directives.14
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1. Restoration Period for Contingency
Reserve
9. The Commission stated that, while
the currently-effective WECC regional
Reliability Standard BAL–STD–002–0
requires restoration of contingency
reserve within 60 minutes, the
remanded WECC regional Reliability
Standard BAL–002–WECC–1 would
have extended the restoration period to
90 minutes. The Commission
determined that NERC and WECC did
not justify the extension of the reserve
restoration period from 60 minutes to 90
minutes or that such an extension
created an acceptable level of risk
within the Western Interconnection.
2. Calculation of Minimum Contingency
Reserve
10. The Commission stated that
WECC regional Reliability Standard
BAL–STD–002–0 currently requires that
minimum contingency reserve must
equal 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. The remanded WECC
regional Reliability Standard BAL–002–
WECC–1 included a similar
requirement, except that instead of
basing the calculation of minimum
contingency reserve on the sum of five
12 Id.
P 56.
13 Version
One Regional Reliability Standard for
Resource and Demand Balancing, Order No. 740, 75
FR 65,964, 133 FERC ¶ 61,063 (2010).
14 Order No. 740, 133 FERC ¶ 61,063 at PP 26,
39, 49, 60, 66.
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percent of load responsibility served by
hydro generation and seven percent of
the load responsibility served by
thermal generation, the minimum
contingency reserve calculation would
be based on the sum of three percent of
load (generation minus station service
minus net actual interchange) plus three
percent of net generation (generation
minus station service).
11. WECC submitted eight hours of
data from each of the four operating
seasons (summer, fall, winter, and
spring, both on and off-peak), which
demonstrated that the proposed
methodology for calculating minimum
contingency reserve would reduce total
contingency reserve required in the
Western Interconnection for each of the
eight hours assessed when compared
with the methodology in the currentlyeffective WECC regional Reliability
Standard BAL–STD–002–0.
12. The Commission accepted
WECC’s proposal, finding 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.’’ 15 The Commission observed,
however, that ‘‘WECC also states that
the proposed regional Reliability
Standard does not excuse any nonperformance 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.’’ 16
13. The Commission also stated that,
if WECC resubmitted its proposed
methodology for calculating minimum
contingency reserve, WECC and NERC
could support its proposal with ‘‘audits
specifically focused on contingency
reserves and whether the balancing
authorities are meeting the adequacy
and deliverability requirements . . .
[t]his 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.’’ 17
3. Use of Firm Load To Meet
Contingency Reserve Requirement
14. In the Notice of Proposed
Rulemaking preceding Order No. 740,
the Commission stated that, unlike the
currently-effective regional Reliability
Standard BAL–STD–002–0, the
remanded regional Reliability Standard
BAL–002–WECC–1 was not technically
sound because it allowed balancing
authorities and reserve sharing groups
within WECC to use firm load to meet
their minimum contingency reserve
requirements once the reliability
coordinator declared a capacity or
energy emergency.18 However, in Order
No. 740, the Commission accepted
WECC’s proposal finding that, although
remanded regional Reliability Standard
BAL–002–WECC–1 allowed balancing
authorities and reserve sharing groups
to use ‘‘Load, other than Interruptible
Load, once the Reliability Coordinator
has declared a capacity or energy
emergency,’’ 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 Reliability Standard EOP–
002–2.1. The Commission directed
WECC to develop revised language to
clarify this point.19
4. Demand-Side Management as a
Resource
15. The Commission determined that
remanded regional Reliability Standard
BAL–002–WECC–1 did not allow
demand-side management that is
technically capable of providing this
service to be used as a resource for
contingency reserve. The Commission
directed WECC to develop
modifications that would 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 reserve.20
5. Miscellaneous Directives
16. The Commission directed WECC
to consider comments regarding the
meaning of the term ‘‘net generation.’’
The Commission also directed WECC to
consider comments stating that the
WECC regional Reliability Standard did
not assign any responsibility or
obligations on generator owners and
generator operators, and that balancing
authorities may be required to carry a
disproportionate share of the
contingency reserve obligation within
the Western Interconnection.21
18 Id.
15 Id.
P 43.
PP 48–49.
20 Id. P 61.
21 Id. P 66.
P 39.
19 Id.
16 Id.
17 Id.
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Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Rules and Regulations
E. Proposed Regional Reliability
Standard BAL–002–WECC–2
17. On April 12, 2013, NERC and
WECC petitioned the Commission to
approve regional Reliability Standard
BAL–002–WECC–2 and the associated
violation risk factors and violation
severity levels, effective date, and
implementation plan. The petition also
requests retirement of the currentlyeffective WECC regional Reliability
Standard BAL–STD–002–0 and removal
of two WECC Regional Definitions,
‘‘Non-Spinning Reserve’’ and ‘‘Spinning
Reserve,’’ from the NERC Glossary. The
petition states that the proposed WECC
regional Reliability Standard is just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest because it satisfies the factors
set forth in Order No. 672, which the
Commission applies when reviewing a
proposed Reliability Standard.22
18. NERC states in the petition that
the Resource and Demand Balancing
(BAL) group of Reliability Standards
ensure that resources and demand are
balanced to maintain Interconnection
frequency within limits. The petition
states that the purpose of NERC
Reliability Standard BAL–002–1
(Disturbance Control Performance) is to
ensure the balancing authority is able to
use contingency reserve to balance
resources and demand and return
Interconnection frequency within
defined limits following a Reportable
Disturbance. NERC maintains that the
purpose of the proposed WECC regional
Reliability Standard BAL–002–WECC–2
is to provide a regional Reliability
Standard that specifies the quantity and
types of contingency reserve required to
ensure reliability under normal and
abnormal conditions.23
19. NERC asserts that the proposed
regional Reliability Standard addresses
the five issues identified in Order No.
740, which remanded the previously
proposed WECC regional Reliability
Standard BAL–002–WECC–1. First, the
petition explains that proposed regional
Reliability Standard BAL–002–WECC–2,
Requirement R1, includes a 60-minute
restoration period for contingency
reserve, which is the same as the
currently-effective regional WECC
Reliability Standard BAL–STD–002–0.24
20. Second, the petition includes twoyears of additional data to support the
method for calculating minimum
contingency reserve proposed in WECC
regional Reliability Standard BAL–002–
WECC–2, Requirement R1, which is the
same as the calculation proposed and
22 Petition,
Exhibit A.
at 2.
24 Id. at 12.
23 Petition
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accepted by the Commission in the
remanded WECC regional Reliability
Standard BAL–002–WECC–1.25
21. Third, the petition states that the
proposed WECC regional Reliability
Standard BAL–002–WECC–2,
Requirement R1, was modified to clarify
that balancing authorities and reserve
sharing groups within WECC are subject
to the same restrictions regarding the
use of firm load for contingency reserve
as balancing authorities elsewhere
operating under the NERC Reliability
Standards. NERC indicates that it has
clarified the connection to the Energy
Emergency Level 3 by incorporating
language from Reliability Standard
EOP–002–2.1, Attachment 1, Section B,
into WECC regional Reliability Standard
BAL–002–WECC–2, Requirement R1.26
22. Fourth, according to the petition,
WECC regional Reliability Standard
BAL–002–WECC–2, Requirement R1
was modified to explicitly provide that
demand-side management technically
capable of providing the service may be
used as a resource for contingency
reserve.27
23. Fifth, the petition states that
WECC regional Reliability Standard
BAL–002–WECC–2 replaces the term
‘‘net generation’’ with the phrase
‘‘generating energy values average over
each Clock Hour.’’ The petition notes
that the regional Reliability Standard
also includes a reference to Opinion No.
464, which addresses the issue of
behind-the-meter generation, in
response to comments raised in the
Order No. 740 rulemaking.28 The
petition also states that WECC regional
Reliability Standard BAL–002–WECC–2
allows for impacted balancing
authorities and reserve sharing groups
to enter into transactions to provide
contingency reserve for another
balancing authority or procure
contingency reserve from another
balancing authority to more equitably
allocate generation for purposes of the
reserve calculation. The petition further
states that the NERC Functional Model,
Version 5, more closely aligns the tasks
in the WECC regional Reliability
Standard BAL–002–WECC–2 with
balancing authorities than to generator
operators.29
25 Id.
at 13–16.
at 18.
27 Id. at 16–18.
28 California Indep. Sys. Operation Corp.,
Opinion No. 464, 104 FERC ¶ 61,196 (2003).
29 NERC, Reliability Functional Model, Version 5
(approved May 2010), available at https://
www.nerc.com/files/Functional_Model_V5_Final_
2009Dec1.pdf.
26 Id.
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F. Notice of Proposed Rulemaking
24. On July 18, 2013, the Commission
issued a Notice of Proposed Rulemaking
(NOPR) proposing to approve regional
Reliability Standard BAL–002–WECC–2
as just, reasonable, not unduly
discriminatory or preferential, and in
the public interest. The Commission
also proposed to approve the associated
violation risk factors, violation severity
levels, implementation plan, effective
date, and the retirement of WECC
regional Reliability Standard BAL–STD–
002–0 (Operating Reserves) and the
removal of two WECC Regional
Definitions, ‘‘Non-Spinning Reserve’’
and ‘‘Spinning Reserve,’’ from the NERC
Glossary. The NOPR stated that the
WECC regional Reliability Standard is
more stringent than the NERC
Reliability Standard BAL–002–1
because the regional Reliability
Standard requires applicable entities to
restore contingency reserve within 60
minutes following the Disturbance
Recovery Period while the NERC
Reliability Standard only requires
restoration of contingency reserve
within 90 minutes. The NOPR also
stated that the method for calculating
minimum contingency reserve in the
regional Reliability Standard is more
stringent than Requirement R3.1 in
NERC Reliability Standard BAL–002–1
because it requires minimum
contingency reserve levels that will be
at least equal to the NERC Reliability
Standard minimum (i.e., equal to the
most severe single contingency) and
more often will be greater. The NOPR
further stated that NERC and WECC
addressed the directives in Order No.
740. In addition, the NOPR proposed to
direct NERC to submit an informational
filing after the first two years of
implementation of regional Reliability
Standard BAL–002–WECC–2 that
addresses the adequacy of contingency
reserve in the Western Interconnection.
25. In response to the NOPR, NERC
and WECC, jointly, and Powerex Corp.
(Powerex), Portland General Electric
Company (Portland), California
Independent System Operator
Corporation (CAISO), and Tacoma
Power (Tacoma) filed comments. We
address below the issues raised in the
NOPR and comments.
II. Discussion
26. Pursuant to FPA section 215(d)(2),
we approve WECC regional Reliability
Standard BAL–002–WECC–2 as just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest. For applicable entities in the
WECC Region, regional Reliability
Standard BAL–002–WECC–2 specifies
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the quantity and types of contingency
reserve required to ensure reliability
under normal and abnormal conditions.
WECC regional Reliability Standard is
more stringent than the NERC
Reliability Standard BAL–002–1
because the regional Reliability
Standard requires applicable entities to
restore contingency reserve within 60
minutes following the Disturbance
Recovery Period while the NERC
Reliability Standard only requires
restoration of contingency reserve
within 90 minutes. In addition, the
method for calculating minimum
contingency reserve in the regional
Reliability Standard is more stringent
than Requirement R3.1 in NERC
Reliability Standard BAL–002–1
because it requires minimum
contingency reserve levels that will be
at least equal to the NERC Reliability
Standard minimum (i.e., equal to the
most severe single contingency) and
more often will be greater.30 We also
conclude that NERC and WECC
addressed the Commission’s directives
in Order No. 740. In addition to
approving regional Reliability Standard
BAL–002–WECC–2, the Commission
directs NERC to submit an informational
filing after the first two years of
implementation of the regional
Reliability Standard that addresses the
adequacy of contingency reserve in the
Western Interconnection.
27. We discuss below the following
issues raised in the NOPR and
comments: (A) new methodology for
calculating minimum contingency
reserve; (B) elimination of interruptible
imports requirement; (C) qualifying
resources for contingency reserve; (D)
use of the term ‘‘Load’’; (E) use of net
generation data to calculate contingency
reserve; (F) violation risk factors and
violation severity levels; (G) removal of
terms from the NERC Glossary; and (H)
implementation plan and effective date.
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A. New Methodology for Calculating
Minimum Contingency Reserve
NERC Petition
28. WECC regional Reliability
Standard BAL–002–WECC–2 includes a
new methodology for calculating
minimum contingency reserve, based on
the greater of the most severe single
contingency or the sum of three percent
of load plus three percent of net
generation. The new methodology is
different from the methodology in
WECC regional Reliability Standard
BAL–STD–002–0, which is based on the
greater of the most severe single
contingency or the sum of five percent
of load responsibility served by hydro
generation and seven percent of the load
responsibility served by thermal
generation.
29. WECC provides ‘‘two years’ worth
of additional data showing the amount
of contingency reserves that would be
calculated for each Balancing Authority
and Reserve Sharing Group under the
proposed methodology.’’ 31 WECC states
that ‘‘during the two-year period of
2010–2012, the average increase/
decrease in Contingency Reserve
required under the existing
methodology juxtaposed to the
proposed methodology was an average
decrease of 137 MW across the Western
Interconnection’’ and that a 137 MW
decrease represents ‘‘.000932 of WECC’s
peak load and .001934 of WECC’s
minimum load’’ within that two-year
period.32 WECC concludes that
‘‘implementation of the proposed
methodology will, on average, reduce
the amount of Contingency Reserve held
within the Interconnection; however,
the average change is so small in
comparison to the load served within
the Interconnection that it should have
no adverse impact on reliability.’’ 33
NOPR
30. In the NOPR, the Commission
proposed to approve the new
methodology and to direct NERC to
submit an informational filing following
implementation of the regional
Reliability Standard that addresses the
adequacy of contingency reserve levels
in the Western Interconnection.
31. The NOPR stated that, while the
data submitted by NERC shows an
average decrease of 137 MW, the data
also shows that the largest single
decrease in contingency reserve equaled
826 MW during the two-year study
period when comparing the current and
proposed methodologies.34 The NOPR
observed that, at the time of the 826 MW
decrease (i.e., 9/15/10 at 14:00), the
contingency reserve value using the
current methodology for calculating
minimum contingency reserve was 8259
MW versus 7434 MW using the new
methodology. The NOPR stated that the
826 MW decrease represented a 10
percent decrease in contingency reserve
at that time interval.35 The NOPR noted
that the data also show a widening gap
31 Petition
at 13.
32 Id.
30 As stated in Order No. 740, the proposed WECC
regional Reliability Standard does not excuse nonperformance with NERC Reliability Standard BAL–
002–1. Order No. 740, 133 FERC ¶ 61,063 at P 39.
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33 Id.
at 16.
34 Petition,
Exhibit G (data point at date/time
interval 9/15/10 at 14:00).
35 Petition at 16.
PO 00000
Frm 00018
Fmt 4700
Sfmt 4700
over time (e.g., a difference of 114 MW
at the beginning date but 192 MW at the
end date).36
32. The NOPR proposed to direct
NERC to submit an informational filing
to the Commission assessing
contingency reserve levels in the
Western Interconnection after the first
two years of implementation of the
regional Reliability Standard. In the
information filing, NERC, in
consultation with WECC, would provide
an assessment of minimum contingency
reserve levels in the Western
Interconnection following
implementation of the new
methodology. The NOPR stated that the
informational filing should assess
whether the new methodology for
calculating minimum contingency
reserve levels has had an adverse impact
on reliability in the Western
Interconnection and should include the
data that NERC and WECC use to assess
the sufficiency of the minimum
contingency reserve levels under the
new methodology. The NOPR stated
that such data could include, but need
not be limited to an increase or decrease
in the ‘‘Average Percent Non-Recovery
Disturbance Control Standards (DCS)
Events,’’ 37 an increase or decrease in
the average Contingency Reserve
Restoration Period, an increase or
decrease in the number of events larger
than the minimum contingency reserve
levels, and any other information that
NERC or WECC deem relevant. The
NOPR proposed to direct NERC to
submit the informational filing to the
Commission 90 days after the end of the
two-year period following
implementation. The NOPR stated that
NERC may choose to submit the
informational filing sooner if NERC
identifies issues with contingency
reserve levels in the Western
Interconnection that may require
immediate action, and that the
Commission would review the
informational filing to determine
whether any action is necessary.
Comments
33. NERC and WECC support the
NOPR proposal. NERC commits to
submit an informational filing that
assesses whether the methodology for
36 The 114 MW and 192 MW values are calculated
by plotting a trend line on the contingency reserve
data submitted by WECC using the existing
methodology and plotting a trend line on the
contingency reserve data submitted by WECC using
the proposed methodology. The initial difference
between the two trend lines is 114 MW while the
difference at the end of the trend lines is 192 MW.
37 See NERC, Metric AL2–4 (Average Percent
Non-Recovery of Disturbance Control Standard
(DCS) Events), available at https://www.nerc.com/
pa/RAPA/ri/Pages/DCSEvents.aspx.
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calculating minimum contingency
reserve levels has had an adverse impact
on reliability in the Western
Interconnection. NERC states that the
informational filing will include the
data used to make the assessment and
will clarify the effect of WECC regional
Reliability Standard BAL–002–WECC–2
on reliability in the Western
Interconnection.
34. Tacoma and Portland maintain
that the new methodology for
calculating contingency reserve is
ambiguous because the methodology
uses values based on hourly integrated
load and hourly integrated generation
(i.e., averages over the course of a given
hour). Tacoma and Portland assert that
this is a change over the use of
instantaneous megawatt values under
WECC regional Reliability Standard
BAL–STD–002–0. Tacoma and Portland
state that it is unclear how the new
methodology should be applied because
it is unclear whether the hour referred
to is the previous hour, a forecast for the
next hour, or a value for the hour
determined after-the-fact. Tacoma states
that if the hour referred to is the
previous hour, the value will no longer
be pertinent to real-time operational
data and real-time application.
35. Portland states that the new
methodology could result in significant
reductions in contingency reserve at
specific times, which could have an
impact on frequency response
capabilities. Portland also questions the
data WECC submitted to support the
new methodology. Portland states that
three of the six entities surveyed by
WECC did not use the previous
methodology (i.e., the sum of five
percent of load responsibility served by
hydro generation and seven percent of
the load responsibility served by
thermal generation) and instead based
contingency reserve values on the most
severe single contingency. In addition,
Portland states that ‘‘two years of data
is not enough to show the variability in
water years for a region structured
around hydropower.’’38 Portland
recommends requiring 10 years’ worth
of data. Portland also states that the new
methodology unfairly shifts the burden
on providing reserves to the sink
balancing authorities and load-serving
entities, which may not be able to
acquire the reserves. Portland further
states that, if the Commission approves
the regional Reliability Standard, NERC
should be required to file annual reports
for five years instead of a single report
after two years. Portland maintains that
balancing authorities may be
conservative and carry additional
38 Portland
Comments at 4.
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reserves in the first year and less so in
later years, and thus requiring reporting
for five years will provide a more
accurate picture of the regional
Reliability Standard’s impact. Portland
also states that NERC should provide a
comparative analysis of the new
methodology and the old methodology.
Commission Determination
36. The Commission adopts the NOPR
proposal directing NERC, in
consultation with WECC, to submit an
informational filing two years after
implementation of WECC regional
Reliability Standard BAL–002–WECC–2
that assesses whether the new
methodology for calculating minimum
contingency reserve levels has had an
adverse impact on reliability in the
Western Interconnection. Consistent
with NERC’s comments, the
informational filing should include the
data that NERC and WECC use to assess
the sufficiency of the minimum
contingency reserve levels under the
new methodology. NERC is directed to
submit the informational filing 90 days
after the end of the two-year period
following implementation. The
Commission will review the
informational filing to determine
whether any action is warranted. NERC
may submit the informational filing
sooner if NERC or WECC identifies
issues with contingency reserve levels
in the Western Interconnection that
require more immediate action.
37. We reject the comments submitted
by Tacoma and Portland concerning the
new methodology and informational
filing. We determine that the use of
‘‘hourly integrated Load’’ and ‘‘hourly
integrated generation’’ is not ambiguous
or substantively different from the
current practice of calculating
contingency reserve. Regional
Reliability Standard BAL–002–WECC–2,
Requirement R1.3, explains that these
terms are based on ‘‘real-time hourly
load and generating energy values
averaged over each Clock Hour.’’
Moreover, the term ‘‘Clock Hour’’ is
defined in the NERC Glossary and refers
to the current hour.39 In addition, using
average values over the course of an
hour is not different from what is
required by regional Reliability
Standard BAL–STD–002–0, which states
in the Measures section that ‘‘a
Responsible Entity identified in Section
A.4 must maintain 100% of required
Operating Reserve levels based upon
data averaged over each clock hour.’’
39 ‘‘Clock Hour: The 60-minute period ending
at:00. All surveys, measurements, and reports are
based on Clock Hour periods unless specifically
noted.’’ NERC Glossary at 19.
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Ultimately, regional Reliability Standard
BAL–002–WECC–2, Requirement R1,
now requires minimum contingency
reserve to be calculated from load and
generation amounts, but it does not
change the time frame for calculating
minimum contingency reserve.
38. We also reject Portland’s comment
that the new methodology shifts the
burden of providing reserves to sink
balancing authorities and load serving
entities, which may be unable to acquire
the necessary reserves. As we stated in
Order No. 740, we agree with NERC and
WECC that the ‘‘equal split between
load and generation [in the new
methodology] represents a reasonable
balance to moderate shifts in
Contingency Reserve responsibility and
costs among the applicable entities.’’ 40
Moreover, Portland does not provide
any evidence that sink balancing
authorities or load-serving entities will
be unable to acquire the necessary
reserves.41
39. With respect to Portland’s
concerns regarding WECC’s data and the
informational filing, the informational
filing is intended to identify any issues
regarding the adequacy of contingency
reserve levels in the Western
Interconnection and the impact on other
reliability areas such as frequency
response. We are satisfied that WECC
provided enough representative data to
conclude that the new methodology will
likely not result in significantly less
average contingency reserve in the
Western Interconnection. However, for
the reasons discussed above, the
Commission believes that it is necessary
to monitor and assess contingency
reserve levels in the Western
Interconnection following
implementation of the regional
Reliability Standard. We are not
inclined at this time to require more
than two years of data as Portland
suggests. The Commission intends to
analyze the two-year informational
filing and determine whether it
adequately addresses the sufficiency of
the proposed required reserve levels in
the Western Interconnection. Portland
or other entities may also examine the
filing and, if there is sufficient technical
analysis that suggests contingency
reserve levels may be inadequate, the
Commission may direct NERC and/or
WECC to submit additional
informational filings in the future. The
40 Petition at 16; see also Order No. 740, 133
FERC ¶ 61,063 at P 41.
41 In developing the implementation plan, NERC
recognized that the new methodology would
require responsible entities to enter into contractual
agreements and negotiations and allowed sufficient
time for responsible entities to enter into such
arrangements. Petition, Exhibit A at 5.
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Commission adopts the NOPR proposal
to direct NERC to file an informational
filing two years after implementation of
the regional Reliability Standard.
B. Removal of Interruptible Imports
Requirement NERC Petition
40. Regional Reliability Standard
BAL–002–WECC–2, Requirement R3,
states that:
Commission Determination
Each Sink Balancing Authority and each
sink Reserve Sharing Group shall maintain
an amount of Operating Reserve, in addition
to the minimum Contingency Reserve in
Requirement R1, equal to the amount of
Operating Reserve–Supplemental for any
Interchange Transaction designated as part of
the Source Balancing Authority’s Operating
Reserve–Supplemental or source Reserve
Sharing Group’s Operating Reserve–
Supplemental, except within the first sixty
minutes following an event requiring the
activation of Contingency Reserve.
41. NERC maintains that Requirement
R3 is a clarification of an existing
requirement in WECC regional
Reliability Standard BAL–STD–002–0,
which requires additional reserves for
interruptible imports. NERC explains
that the standard drafting team removed
the term ‘‘interruptible imports’’
because it is not a defined term in the
NERC Glossary and is subject to
misinterpretation. NERC states that the
standard drafting team replaced the
term with clarifying language describing
which types of transactions must be
covered by additional reserves. NERC
observes that the continent-wide
Reliability Standard BAL–002–1 does
not require reserves for Interchange
Transactions designated as part of the
source balancing authority or source
reserve sharing group Operating
Reserve-Supplemental and thus the
requirement in the regional Reliability
Standard is more stringent than the
continent-wide Reliability Standard.
sroberts on DSK5SPTVN1PROD with RULES
Comments
42. Powerex maintains that, while the
term ‘‘interruptible imports’’ has not
been clearly defined by WECC or NERC,
the solution is not to remove the term
from the regional Reliability Standard.
Powerex states that removal of
interruptible imports results in an
inferior regional Reliability Standard
because it effectively eliminates any
Reliability Standard specifying a reserve
requirement for interruptible imports.
Powerex maintains that balancing
authorities will no longer be required to
set aside any capacity to cover
interruptible imports into their
balancing authority areas. Powerex
states that the interruptible imports
requirement has served to ‘‘differentiate
an import of interruptible energy—a
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product that may be curtailed for ANY
reason . . . from a ‘firm’ energy import
that is supported by sufficient
generating resources within the source
[balancing authority] to assure the
energy will not be curtailed during the
delivery period.’’ 42
43. The Commission rejects Powerex’s
comments concerning removal of the
term ‘‘interruptible imports.’’ The
Commission agrees with NERC and
WECC that Requirement R3 identifies
the types of transactions, including
Interchange Transactions, that must be
covered by additional reserves.
Accordingly, we disagree with Powerex
that the concept of interruptible imports
has been removed from the regional
Reliability Standard. Replacing the term
‘‘interruptible imports’’ with the NERCdefined term ‘‘Interchange Transaction’’
eliminates ambiguity from the regional
Reliability Standard by including all
types of Interchange Transactions (e.g.,
firm or interruptible) as it pertains to
calculating Operating Reserve.
Moreover, in response to comments
during the standards development
process, the standard drafting team
reinforced this view in stating that
‘‘[Requirement] R3 of the proposed
standard directly addresses the concept
of interruptible schedules and
[Requirement] R4 addresses the concept
of on-demand energy.’’ 43
44. Powerex states that ‘‘in WECC
there exists an unacceptable lack of
clarity with respect to reserve
requirements associated with energy
interchange scheduling.’’ Powerex also
‘‘acknowledges that the proposed BAL–
002–WECC–2 standard alone cannot
address all of these concerns, but
believes it is premature, unwarranted,
and problematic to eliminate the
requirement that interruptible imports
carry 100% reserves until these broader
concerns are addressed by some other
regulatory requirement.’’ We disagree
with Powerex that it is appropriate to
condition approval of regional
Reliability Standard BAL–002–WECC–2,
and the removal of the term
‘‘interruptible imports,’’ on first
addressing existing problems
concerning reserve requirements
associated with energy interchange
scheduling. Instead, we agree with
NERC and WECC that the regional
Reliability Standard, in requiring
additional reserves for Interchange
Transactions, is more stringent than the
continent-wide Reliability Standard
42 Powerex
43 Petition,
PO 00000
Comments at 8.
Exhibit C at 11.
Frm 00020
Fmt 4700
Sfmt 4700
BAL–002, and we approve the
requirement on that basis.
C. Qualifying Resources for Contingency
Reserve
NERC Petition
45. WECC regional Reliability
Standard BAL–002–WECC–2,
Requirement R.1.1.2 states that
contingency reserve may be comprised
of any combination of the reserve types
specified below:
D Operating Reserve—Spinning
D Operating Reserve—Supplemental
D Interchange Transactions
designated by the Source Balancing.
D Authority as Operating Reserve—
Supplemental
D Reserve held by other entities by
agreement that is deliverable on Firm
Transmission Service.
D A resource, other than generation or
load, that can provide energy or reduce
energy consumption.
D Load, including demand response
resources, Demand-Side Management
resources, Direct Control Load
Management, Interruptible Load or
Interruptible Demand, or any other Load
made available for curtailment by the
Balancing Authority or the Reserve
Sharing Group via contract or
agreement.
D All other load, not identified above,
once the Reliability Coordinator has
declared an energy emergency alert
signifying that firm load interruption is
imminent or in progress.
46. ‘‘Operating Reserve—Spinning’’ is
defined in the NERC Glossary to mean
‘‘generation (synchronized or capable of
being synchronized to the system) that
is fully available to serve load within
the Disturbance Recovery Period
following the contingency event; or load
fully removable from the system within
the Disturbance Recovery Period
following the contingency event.’’
Comments
47. CAISO seeks clarification that
non-traditional resources, including
electric storage facilities, may qualify as
‘‘Operating Reserve—Spinning’’ so long
as they meet the technical and
performance requirements in
Requirement R2 (i.e., that the resources
must be immediately and automatically
responsive to frequency deviations
through the action of a control system
and capable of fully responding within
ten minutes).
Commission Determination
48. The Commission determines that
non-traditional resources, including
electric storage facilities, may qualify as
‘‘Operating Reserve—Spinning’’
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provided those resources satisfy the
technical and performance requirements
in Requirement R2. Our determination
is supported by the standard drafting
team’s response to a comment during
the standard drafting process where the
standard drafting team stated that
‘‘technologies, such as batteries, both
contemplated and not yet contemplated
are included in the standard as potential
resources—so long as the undefined
resource can meet the response
characteristics described in the standard
* * * The language does not preclude
any specific technology; rather, the
language delineates how that technology
must [] respond.’’ 44 We also note that
non-traditional resources could
contribute to contingency reserve under
the regional Reliability Standard if they
are resources, ‘‘other than generation or
load, that can provide energy or reduce
energy consumption.’’
D. Use of the Term Load in Requirement
R.1.1
NERC Petition
49. WECC regional Reliability
Standard BAL–002–WECC–2,
Requirement R.1.1, states that minimum
contingency reserve must equal the
‘‘amount of Contingency Reserve equal
to the loss of the most severe single
contingency’’ or the ‘‘amount of
Contingency Reserve equal to the sum of
three percent of hourly integrated Load
plus three percent of hourly integrated
generation.’’
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Comments
50. Tacoma states that the term
‘‘Load’’ is defined in the NERC Glossary
as ‘‘[a]n end-use device or customer that
receives power from the electric
system.’’ Tacoma maintains that the
term ‘‘Load’’ in Requirement R.1.1
cannot be interpreted to be a device or
customer that receives power from the
electric system because ‘‘the
requirement directs the taking of a
percentage of the ‘Load’ and treating it
as a measurement of power, like
megawatts.’’ Tacoma recommends that
the defined term ‘‘Load’’ should be
replaced with the undefined term
‘‘load.’’
Commission Determination
51. Based on the context of
Requirement R.1.1, the Commission
understands that the use of the term
‘‘Load’’ does not refer to an end-use
device or customer. Instead, it refers to
the power consumption associated with
the end-use device or customer (i.e.,
Load), which is then applied in
calculating minimum contingency
reserve levels. With that understanding,
the Commission will not direct NERC to
change ‘‘Load’’ to ‘‘load’’ in
Requirement R.1.1 as requested by
Tacoma. NERC and WECC may modify
this language in the next version of the
regional Reliability Standard.
E. Use of Net Generation Data To
Calculate Contingency Reserve
NERC Petition
52. NERC states that the ‘‘calculation
of minimum Contingency Reserves is
based on three percent of net generation
and three percent of net load and this
fairly balances the responsibilities of
Contingency Reserve providers with the
financial obligations of those who
would benefit most from those
services.’’ 45 Requirement R1.1.3 states
that the minimum contingency reserve
calculation should be based on ‘‘realtime hourly load and generating energy
values averaged over each Clock Hour
(excluding Qualifying Facilities covered
in 18 CFR 292.101, as addressed in
FERC Opinion 464).’’ In Requirement
R1.1.3, NERC states that the standard
drafting team replaced the term ‘‘net
generation’’ with ‘‘generating energy
values averaged over each Clock Hour.’’
NERC maintains that the substitution
was in response to comments in the
Order No. 740 rulemaking regarding the
definition of the term ‘‘net generation.’’
Comments
53. Tacoma states that changing
metered data to net generation for realtime operations would result in undue
burden and cause a delay in
implementation because many
balancing authorities do not use net
generation in their minimum
contingency reserve calculation.
Tacoma states that it uses gross
generation for real-time operations and
includes station service within its entity
load. Tacoma explains that it prepares
annual reports that include net
generation, but Tacoma asserts that
using net generation in real-time
operations will require ‘‘significant
changes in the data and telemetry that
must be available in real-time
operations.’’ 46
Commission Determination
54. The Commission notes that
NERC’s petition states that the
‘‘calculation of minimum Contingency
Reserves is based on three percent of net
generation.’’ 47 Based on NERC’s
description, the NOPR also used the
term ‘‘net generation’’ at various points.
at 16.
Comments at 3.
47 Petition at 16.
Exhibit C at 20.
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However, Requirement R1 of WECC
regional Reliability Standard BAL–002–
WECC–2, by design, does not use the
term ‘‘net generation.’’ Instead,
Requirement R1.1.3 states that the
minimum contingency reserve
calculation should be based on ‘‘realtime hourly load and generating energy
values averaged over each Clock Hour
(excluding Qualifying Facilities covered
in 18 CFR 292.101, as addressed in
FERC Opinion 464).’’ Accordingly,
Tacoma’s concern about the use of ‘‘net
generation’’ to calculate minimum
contingency reserve is moot.
F. Violation Risk Factors and Violation
Severity Levels
55. The petition states that each
Requirement of the proposed WECC
regional Reliability Standard BAL–002–
WECC–2 includes one violation risk
factor and one violation severity level
and that the ranges of penalties for
violations will be based on the sanctions
table and supporting penalty
determination process described in the
Commission-approved NERC Sanctions
Guideline. The NOPR proposed to
approve the violation risk factors and
violation severity levels for the
Requirements of WECC regional
Reliability Standard BAL–002–WECC–2
as consistent with the Commission’s
established guidelines.48 The
Commission did not receive comments
regarding the proposed violation risk
factors and violation severity levels.
Accordingly, the Commission approves
the violation risk factors and violation
severity levels for the requirements of
WECC regional Reliability Standard
BAL–002–WECC–2.
G. Removal of Terms From NERC
Glossary
56. The petition states that proposed
WECC regional Reliability Standard
BAL–002–WECC–2 replaces the terms
‘‘Spinning Reserve’’ with ‘‘Operating
Reserve-Spinning’’ and ‘‘Non-Spinning
Reserve’’ with ‘‘Operating ReserveSupplemental’’ to ensure comparable
treatment of demand-side management
with conventional generation, or any
other technology, and to allow demandside management to be considered as a
resource for contingency reserve. The
petition states that Operating ReserveSpinning and Operating ReserveSupplemental have glossary definitions
that are inclusive of demand-side
management, including controllable
load. Accordingly, the petition seeks
revision of the NERC Glossary to remove
the two WECC Regional Definitions,
45 Petition
46 Tacoma
44 Petition,
71455
PO 00000
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48 See North American Electric Reliability Corp.,
135 FERC ¶ 61,166 (2011).
E:\FR\FM\29NOR1.SGM
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71456
Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Rules and Regulations
Non-Spinning Reserve and Spinning
Reserve. With the removal of NonSpinning Reserve and Spinning Reserve
from the proposed WECC regional
Reliability Standard BAL–002–WECC–2,
the NOPR proposed to approve removal
of those WECC Regional Definitions
from the NERC Glossary. The
Commission did not receive comments
regarding the proposed revisions to the
NERC Glossary. Accordingly, the
Commission approves the proposed
revisions to the NERC Glossary.
regional Reliability Standard BAL–STD–
002–0 on the proposed effective date.
58. The NOPR proposed to approve
the petition’s implementation plan and
effective date for the WECC regional
Reliability Standard BAL–002–WECC–2.
The Commission did not receive
comments regarding the proposed
implementation plan and effective date.
Accordingly, the Commission approves
the implementation plan and effective
date for WECC regional Reliability
Standard BAL–002–WECC–2.
H. Implementation Plan and Effective
Date
III. Information Collection Statement
57. The petition proposes that WECC
regional Reliability Standard BAL–002–
WECC–2 become effective on the first
day of the third quarter following
applicable regulatory approval. The
petition states that the proposed WECC
regional Reliability Standard may
require execution of contracts by some
applicable entities before
implementation can occur, and the
proposed effective date allows time for
applicable entities to finalize needed
contracts. The petition also proposes to
retire the currently-effective WECC
59. The following collection of
information contained in this Final Rule
is subject to review by the Office of
Management and Budget (OMB) under
section 3507(d) of the Paperwork
Reduction Act of 1995 (PRA).49 OMB’s
regulations require approval of certain
information collection requirements
imposed by agency rules.50 Upon
approval of a collection(s) of
information, OMB will assign an OMB
control number and an expiration date.
Respondents subject to the filing
requirements of a rule will not be
penalized for failing to respond to these
Improved requirement
Number of
respondents
Year
51
(1)
(2)
(3)
collections of information unless the
collections of information display a
valid OMB control number. The
Commission solicited comments on the
need for and the purpose of the
information contained in regional
Reliability Standard BAL–002–WECC–2
and the corresponding burden to
implement the regional Reliability
Standard. The Commission received
comments on specific requirements in
the regional Reliability Standard, which
we address in this Final Rule. However,
the Commission did not receive any
comments on our reporting burden
estimates.
60. Public Reporting Burden: The
burden and cost estimates below are
based on the need for applicable entities
to revise documentation, already
required by the current WECC regional
Reliability Standard BAL–STD–002–0,
to reflect certain changes made in WECC
regional Reliability Standard BAL–002–
WECC–2. Our estimates are based on the
NERC Compliance Registry as of May
30, 2013, which indicates that 36
balancing authorities and reserve
sharing groups are registered within
WECC.
Number of
annual
responses per
respondent
Average
burden
hours
per response
Estimated
total annual
burden hours
(1)*(2)*(3)
Update Existing Documentation to Conform with Proposed
Regional Reliability Standard ...........................................
1
36
1
52 1
36
Total ..............................................................................
........................
........................
........................
........................
36
51 NERC
sroberts on DSK5SPTVN1PROD with RULES
balancing authorities and reserve sharing groups are responsible for the improved requirement. Further, if a single entity is registered
as both a balancing authority and reserve sharing group, that entity is counted as one unique entity.
52 The Commission bases the hourly reporting burden on the time for an engineer to implement the requirements of the final rule.
49 44
50 5
U.S.C. 3507(d).
CFR 1320.11.
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20:31 Nov 27, 2013
Jkt 232001
• Update Existing Documentation to
Conform with Proposed Regional
Reliability Standard: 36 entities * (1
hours/response * $60/hour) = $2,160.
Title: FERC–725E, Mandatory
Reliability Standards-WECC (Western
Electric Coordinating Council)
Action: Proposed Collection of
Information
OMB Control No: 1902–0246
Respondents: Business or other forprofit, and not-for-profit institutions.
Frequency of Responses: One-time.
Necessity of the Information: Regional
Reliability Standard BAL–002–WECC–2
implements the Congressional mandate
of the Energy Policy Act of 2005 to
develop mandatory and enforceable
Reliability Standards to better ensure
the reliability of the nation’s BulkPower System. Specifically, the regional
Reliability Standard ensures that
balancing authorities and reserve
sharing groups in the WECC Region
have the quantity and types of
contingency reserve required to ensure
reliability under normal and abnormal
conditions.
Internal review: The Commission has
reviewed regional Reliability Standard
BAL–002–WECC–2 and made a
determination that its action is
necessary to implement section 215 of
the FPA. The Commission has assured
itself, by means of its internal review,
53 Labor rates from Bureau of Labor Statistics
(BLS) (https://bls.gov/oes/current/naics2_22.htm).
Loaded costs are BLS rates divided by 0.703 and
Estimated Total Annual Burden
Hours for Collection: (Compliance/
Documentation) = 36 hours
Costs to Comply with PRA:
• Year 1: $2,160.
• Year 2 and ongoing: $0.
61. Year 1 costs include updating
existing documentation, already
required by the current WECC regional
Reliability Standard BAL–STD–002–0,
to reflect changes in WECC regional
Reliability Standard BAL–002–WECC–2.
For the burden category above, the cost
is $60/hour (salary plus benefits) for an
engineer.53 The estimated breakdown of
annual cost is as follows:
• Year 1
rounded to the nearest dollar (https://www.bls.gov/
news.release/ecec.nr0.htm).
PO 00000
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Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Rules and Regulations
that there is specific, objective support
for the burden estimates associated with
the information requirements.
62. Interested persons may obtain
information on the reporting
requirements by contacting the Federal
Energy Regulatory Commission, Office
of the Executive Director, 888 First
Street NE., Washington, DC 20426
[Attention: Ellen Brown, email: Data
Clearance@ferc.gov, phone: (202) 502–
8663, fax: (202) 273–0873].
IV. Environmental Analysis
63. 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.54 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.55 The
actions directed herein fall within this
categorical exclusion in the
Commission’s regulations.
V. Regulatory Flexibility Act
64. The Regulatory Flexibility Act of
1980 (RFA) 56 generally requires a
description and analysis of proposed
rules that will have significant
economic impact on a substantial
number of small entities. As discussed
above, regional Reliability Standard
BAL–002–WECC–2 applies to 36
registered balancing authorities and
reserve sharing groups in the NERC
Compliance Registry. Comparison of the
NERC Compliance Registry with data
submitted to the Energy Information
Administration on Form EIA–861
indicates that, of the 36 registered
balancing authorities and reserve
sharing groups, two may qualify as
small entities.57
65. The Commission estimates that,
on average, each of the two affected
sroberts on DSK5SPTVN1PROD with RULES
54 Regulations
Implementing the National
Environmental Policy Act of 1969, Order No. 486,
52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs.,
Regulations Preambles 1986–1990 ¶ 30,783 (1987).
55 18 CFR 380.4(a)(2)(ii).
56 5 U.S.C. 601–612.
57 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act
(SBA), which defines a ‘‘small business concern’’ as
a business that is independently owned and
operated and that is not dominant in its field of
operation. See 15 U.S.C. 632. According to the
Small Business Administration, an electric utility is
defined as ‘‘small’’ if, including its affiliates, it is
primarily engaged in the generation, transmission,
and/or distribution of electric energy for sale and
its total electric output for the preceding fiscal year
did not exceed 4 million megawatt hours.
VerDate Mar<15>2010
20:31 Nov 27, 2013
Jkt 232001
small entities will have an estimated
cost of $60 in Year 1 and no further
ongoing costs. These figures are based
on information collection costs plus
additional costs for compliance. The
Commission does not consider this to be
a significant economic impact for small
entities because it should not represent
a significant percentage of the small
entities’ operating budgets. The
Commission solicited comments
concerning is proposed Regulatory
Flexibility Act certification and did not
receive any comments. Accordingly, the
Commission certifies that this Final
Rule will not have a significant
economic impact on a substantial
number of small entities.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
VI. Document Availability
AGENCY:
66. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the Internet through the
Commission’s Home Page (https://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5:00 p.m.
Eastern time) at 888 First Street NE.,
Room 2A, Washington, DC 20426.
67. From the Commission’s Home
Page on the Internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
68. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours from the
Commission’s Online Support at (202)
502–6652 (toll free at 1–866–208–3676)
or email at ferconlinesupport@ferc.gov,
or the Public Reference Room at (202)
502–8371, TTY (202) 502–8659. Email
the Public Reference Room at
public.referenceroom@ferc.gov.
ACTION:
71457
69. These regulations are effective
January 28, 2014. The Commission has
determined, with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not a ‘‘major rule’’
as defined in section 351 of the Small
Business Regulatory Enforcement
Fairness Act of 1996.
Frm 00023
Fmt 4700
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BILLING CODE 6717–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 172, 173, 178, and 180
[Docket No. FDA–2010–F–0320]
Food Additive Regulations;
Incorporation by Reference of the
Food Chemicals Codex, 7th Edition
Food and Drug Administration,
HHS.
VII. Effective Date and Congressional
Notification
PO 00000
[FR Doc. 2013–28626 Filed 11–27–13; 8:45 am]
Final rule.
The Food and Drug
Administration (FDA or we) is
amending select food additive
regulations that incorporate by reference
food-grade specifications from prior
editions of the Food Chemicals Codex
(FCC) to incorporate by reference foodgrade specifications from the FCC 7th
Edition (FCC 7). We are taking this
action in response to a petition filed by
the United States Pharmacopeial
Convention (U.S.P. or petitioner).
DATES: This rule is effective November
29, 2013. See the ‘‘Objections’’ heading
of the SUPPLEMENTARY INFORMATION
section for information on the filing of
objections. Submit either electronic or
written objections and requests for a
hearing by December 30, 2013. The
Director of the Office of the Federal
Register approves the incorporation by
reference of certain publications listed
in the rule as of November 29, 2013.
ADDRESSES: You may submit either
electronic or written objections and
requests for a hearing, identified by
Docket No. FDA–2010–F–0320, by any
of the following methods:
SUMMARY:
Electronic Submissions
Submit electronic objections in the
following way:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Written Submissions
Submit written objections in the
following ways:
• Mail/Hand delivery/Courier (for
paper or CD–ROM submissions):
Division of Dockets Management (HFA–
305), Food and Drug Administration,
5630 Fishers Lane, Rm. 1061, Rockville,
MD 20852.
E:\FR\FM\29NOR1.SGM
29NOR1
]]>Agencies
[Federal Register Volume 78, Number 230 (Friday, November 29, 2013)]
[Rules and Regulations]
[Pages 71448-71457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28626]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM13-13-000; Order No. 789]
Regional Reliability Standard BAL-002-WECC-2--Contingency Reserve
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy
Regulatory Commission (Commission) approves regional Reliability
Standard BAL-002-WECC-2 (Contingency Reserve). The North American
Electric Reliability Corporation (NERC) and Western Electricity
Coordinating Council (WECC) submitted the regional Reliability Standard
to the Commission for approval. The regional Reliability Standard
applies to balancing authorities and reserve sharing groups in the WECC
Region and is meant to specify the quantity and types of
[[Page 71449]]
contingency reserve required to ensure reliability under normal and
abnormal conditions.
DATES: Effective Date: This rule will become effective January 28,
2014.
FOR FURTHER INFORMATION CONTACT:
Andr[eacute]s L[oacute]pez Esquerra (Technical Information), Office
of Electric Reliability, Division of Reliability Standards, Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426, Telephone: (202) 502-6128, Andres.Lopez@ferc.gov.
Matthew Vlissides (Legal Information), Office of the General
Counsel, Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426, Telephone: (202) 502-8408,
Matthew.Vlissides@ferc.gov.
SUPPLEMENTARY INFORMATION: 145 FERC ] 61,141, United States of America,
Federal Energy Regulatory Commission
Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller,
John R. Norris, Cheryl A. LaFleur, and Tony Clark.
Regional Reliability Standard BAL-002-WECC-2--Contingency Reserve
Docket No. RM13-13-000
Order No. 789
Final Rule
(Issued November 21, 2013)
1. Under section 215 of the Federal Power Act (FPA),\1\ the
Commission approves regional Reliability Standard BAL-002-WECC-2
(Contingency Reserve). The North American Electric Reliability
Corporation (NERC) and Western Electricity Coordinating Council (WECC)
submitted the regional Reliability Standard to the Commission for
approval. The WECC regional Reliability Standard applies to balancing
authorities and reserve sharing groups in the WECC Region and is meant
to specify the quantity and types of contingency reserve required to
ensure reliability under normal and abnormal conditions.
---------------------------------------------------------------------------
\1\ 16 U.S.C. 824o.
---------------------------------------------------------------------------
2. The Commission approves the associated violation risk factors
(VRFs) and violation severity levels (VSLs), implementation plan, and
effective date proposed by NERC and WECC. The Commission also approves
the retirement of WECC regional Reliability Standard BAL-STD-002-0
(Operating Reserves) and the removal of two WECC Regional Definitions,
``Non-Spinning Reserve'' and ``Spinning Reserve,'' from the Glossary of
Terms Used in NERC Reliability Standards (NERC Glossary).\2\ In
addition, the Commission directs NERC to submit an informational filing
after the first two years of implementation of regional Reliability
Standard BAL-002-WECC-2 that addresses the adequacy of contingency
reserve in the Western Interconnection.
---------------------------------------------------------------------------
\2\ North American Electric Reliability Corporation Definitions
Used in the Rules of Procedure, Appendix 2 to the NERC Rules of
Procedure (effective September 3, 2013).
---------------------------------------------------------------------------
I. Background
A. Mandatory Reliability Standards
3. Section 215(c) of the FPA requires a Commission-certified
Electric Reliability Organization (ERO) to develop mandatory and
enforceable Reliability Standards that are subject to Commission review
and approval. Once approved, the Reliability Standards may be enforced
by NERC, subject to Commission oversight, or by the Commission
independently.\3\
---------------------------------------------------------------------------
\3\ 16 U.S.C. 824o(e).
---------------------------------------------------------------------------
4. A Regional Entity may develop a Reliability Standard for
Commission approval to be effective in that region only.\4\ In Order
No. 672, the Commission stated that:
---------------------------------------------------------------------------
\4\ 16 U.S.C. 824o(e)(4). A Regional Entity is an entity that
has been approved by the Commission to enforce Reliability Standards
under delegated authority from the ERO. See 16 U.S.C. 824o(a)(7) and
(e)(4).
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.\5\
\5\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, at P 291, order on reh'g, Order No. 672-A,
FERC Stats. & Regs. ] 31,212 (2006).
---------------------------------------------------------------------------
5. On April 19, 2007, the Commission accepted delegation agreements
between NERC and each of the eight Regional Entities.\6\ In the order,
the Commission accepted WECC as a Regional Entity.
---------------------------------------------------------------------------
\6\ North American Electric Reliability Corp., 119 FERC ]
61,060, order on reh'g, 120 FERC ] 61,260 (2007).
---------------------------------------------------------------------------
B. NERC Reliability Standard BAL-002-1 (Disturbance Control
Performance)
6. In Order No. 693, the Commission approved NERC Reliability
Standard BAL-002-0.\7\ On January 10, 2011, the Commission approved a
revised version of the NERC Reliability Standard, BAL-002-1
(Disturbance Control Performance), which NERC developed and submitted
to address directives contained in Order No. 693.\8\ The purpose of
NERC Reliability Standard BAL-002-1 is to ensure that a balancing
authority is able to use its contingency reserve to balance resources
and demand and return Interconnection frequency within defined limits
following a Reportable Disturbance.\9\
---------------------------------------------------------------------------
\7\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order
No. 693-A, 120 FERC ] 61,053 (2007).
\8\ North American Electric Reliability Corp., 134 FERC ] 61,015
(2011).
\9\ The NERC Glossary defines Contingency Reserve as ``[t]he
provision of capacity deployed by the Balancing Authority to meet
the Disturbance Control Standard (DCS) and other NERC and Regional
Reliability Organization contingency requirements.'' The NERC
Glossary defines Reportable Disturbance as ``[a]ny event that causes
an [Area Control Error (ACE)] change greater than or equal to 80% of
a Balancing Authority's or reserve sharing group's most severe
contingency. The definition of a reportable disturbance is specified
by each Regional Reliability Organization. This definition may not
be retroactively adjusted in response to observed performance.''
---------------------------------------------------------------------------
C. WECC Regional Reliability Standard BAL-STD-002-0
7. On June 8, 2007, the Commission approved WECC regional
Reliability Standard BAL-STD-002-0, which is currently in effect.\10\
The Commission stated that regional Reliability Standard BAL-STD-002-0
was more stringent than the NERC Reliability Standard BAL-002-0 because
the WECC regional Reliability Standard required: (1) a more stringent
minimum reserve requirement; and (2) restoration of contingency
reserves within 60 minutes, as opposed to the 90-minute restoration
period required by the NERC Reliability Standard BAL-002-0.\11\ The
Commission directed WECC to make minor modifications to regional
Reliability Standard BAL-STD-002-0. For example, the Commission
determined that: (1) regional definitions should conform to definitions
set forth in the 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 Standards. 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
[[Page 71450]]
concerns regarding ambiguities in the terms ``load responsibility'' and
``firm transaction.'' \12\
---------------------------------------------------------------------------
\10\ North American Electric Reliability Corp., 119 FERC ]
61,260 (2007).
\11\ Id. P 53.
\12\ Id. P 56.
---------------------------------------------------------------------------
D. Remanded WECC Regional Reliability Standard BAL-002-WECC-1
8. On March 25, 2009, NERC submitted to the Commission for approval
WECC regional Reliability Standard BAL-002-WECC-1 (Contingency
Reserves). In Order No. 740, the Commission remanded regional
Reliability Standard BAL-002-WECC-1.\13\ In Order No. 740, the
Commission identified five issues with remanded regional Reliability
Standard BAL-002-WECC-1: (1) the restoration period for contingency
reserve; (2) the calculation of minimum contingency reserve; (3) the
use of firm load to meet the contingency reserve requirement; (4) the
use of demand-side management as a resource; and (5) miscellaneous
directives.\14\
---------------------------------------------------------------------------
\13\ Version One Regional Reliability Standard for Resource and
Demand Balancing, Order No. 740, 75 FR 65,964, 133 FERC ] 61,063
(2010).
\14\ Order No. 740, 133 FERC ] 61,063 at PP 26, 39, 49, 60, 66.
---------------------------------------------------------------------------
1. Restoration Period for Contingency Reserve
9. The Commission stated that, while the currently-effective WECC
regional Reliability Standard BAL-STD-002-0 requires restoration of
contingency reserve within 60 minutes, the remanded WECC regional
Reliability Standard BAL-002-WECC-1 would have extended the restoration
period to 90 minutes. The Commission determined that NERC and WECC did
not justify the extension of the reserve restoration period from 60
minutes to 90 minutes or that such an extension created an acceptable
level of risk within the Western Interconnection.
2. Calculation of Minimum Contingency Reserve
10. The Commission stated that WECC regional Reliability Standard
BAL-STD-002-0 currently requires that minimum contingency reserve must
equal 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. The remanded WECC
regional Reliability Standard BAL-002-WECC-1 included a similar
requirement, except that instead of basing the calculation of minimum
contingency reserve on the sum of five percent of load responsibility
served by hydro generation and seven percent of the load responsibility
served by thermal generation, the minimum contingency reserve
calculation would be based on the sum of three percent of load
(generation minus station service minus net actual interchange) plus
three percent of net generation (generation minus station service).
11. WECC submitted eight hours of data from each of the four
operating seasons (summer, fall, winter, and spring, both on and off-
peak), which demonstrated that the proposed methodology for calculating
minimum contingency reserve would reduce total contingency reserve
required in the Western Interconnection for each of the eight hours
assessed when compared with the methodology in the currently-effective
WECC regional Reliability Standard BAL-STD-002-0.
12. The Commission accepted WECC's proposal, finding 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.'' \15\ The
Commission observed, however, that ``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.''
\16\
---------------------------------------------------------------------------
\15\ Id. P 39.
\16\ Id.
---------------------------------------------------------------------------
13. The Commission also stated that, if WECC resubmitted its
proposed methodology for calculating minimum contingency reserve, WECC
and NERC could support its proposal with ``audits specifically focused
on contingency reserves and whether the balancing authorities are
meeting the adequacy and deliverability requirements . . . [t]his
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.'' \17\
---------------------------------------------------------------------------
\17\ Id. P 40.
---------------------------------------------------------------------------
3. Use of Firm Load To Meet Contingency Reserve Requirement
14. In the Notice of Proposed Rulemaking preceding Order No. 740,
the Commission stated that, unlike the currently-effective regional
Reliability Standard BAL-STD-002-0, the remanded regional Reliability
Standard BAL-002-WECC-1 was not technically sound because it allowed
balancing authorities and reserve sharing groups within WECC to use
firm load to meet their minimum contingency reserve requirements once
the reliability coordinator declared a capacity or energy
emergency.\18\ However, in Order No. 740, the Commission accepted
WECC's proposal finding that, although remanded regional Reliability
Standard BAL-002-WECC-1 allowed balancing authorities and reserve
sharing groups to use ``Load, other than Interruptible Load, once the
Reliability Coordinator has declared a capacity or energy emergency,''
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 Reliability Standard EOP-002-2.1. The
Commission directed WECC to develop revised language to clarify this
point.\19\
---------------------------------------------------------------------------
\18\ Id. P 43.
\19\ Id. PP 48-49.
---------------------------------------------------------------------------
4. Demand-Side Management as a Resource
15. The Commission determined that remanded regional Reliability
Standard BAL-002-WECC-1 did not allow demand-side management that is
technically capable of providing this service to be used as a resource
for contingency reserve. The Commission directed WECC to develop
modifications that would 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 reserve.\20\
---------------------------------------------------------------------------
\20\ Id. P 61.
---------------------------------------------------------------------------
5. Miscellaneous Directives
16. The Commission directed WECC to consider comments regarding the
meaning of the term ``net generation.'' The Commission also directed
WECC to consider comments stating that the WECC regional Reliability
Standard did not assign any responsibility or obligations on generator
owners and generator operators, and that balancing authorities may be
required to carry a disproportionate share of the contingency reserve
obligation within the Western Interconnection.\21\
---------------------------------------------------------------------------
\21\ Id. P 66.
---------------------------------------------------------------------------
[[Page 71451]]
E. Proposed Regional Reliability Standard BAL-002-WECC-2
17. On April 12, 2013, NERC and WECC petitioned the Commission to
approve regional Reliability Standard BAL-002-WECC-2 and the associated
violation risk factors and violation severity levels, effective date,
and implementation plan. The petition also requests retirement of the
currently-effective WECC regional Reliability Standard BAL-STD-002-0
and removal of two WECC Regional Definitions, ``Non-Spinning Reserve''
and ``Spinning Reserve,'' from the NERC Glossary. The petition states
that the proposed WECC regional Reliability Standard is just,
reasonable, not unduly discriminatory or preferential, and in the
public interest because it satisfies the factors set forth in Order No.
672, which the Commission applies when reviewing a proposed Reliability
Standard.\22\
---------------------------------------------------------------------------
\22\ Petition, Exhibit A.
---------------------------------------------------------------------------
18. NERC states in the petition that the Resource and Demand
Balancing (BAL) group of Reliability Standards ensure that resources
and demand are balanced to maintain Interconnection frequency within
limits. The petition states that the purpose of NERC Reliability
Standard BAL-002-1 (Disturbance Control Performance) is to ensure the
balancing authority is able to use contingency reserve to balance
resources and demand and return Interconnection frequency within
defined limits following a Reportable Disturbance. NERC maintains that
the purpose of the proposed WECC regional Reliability Standard BAL-002-
WECC-2 is to provide a regional Reliability Standard that specifies the
quantity and types of contingency reserve required to ensure
reliability under normal and abnormal conditions.\23\
---------------------------------------------------------------------------
\23\ Petition at 2.
---------------------------------------------------------------------------
19. NERC asserts that the proposed regional Reliability Standard
addresses the five issues identified in Order No. 740, which remanded
the previously proposed WECC regional Reliability Standard BAL-002-
WECC-1. First, the petition explains that proposed regional Reliability
Standard BAL-002-WECC-2, Requirement R1, includes a 60-minute
restoration period for contingency reserve, which is the same as the
currently-effective regional WECC Reliability Standard BAL-STD-002-
0.\24\
---------------------------------------------------------------------------
\24\ Id. at 12.
---------------------------------------------------------------------------
20. Second, the petition includes two-years of additional data to
support the method for calculating minimum contingency reserve proposed
in WECC regional Reliability Standard BAL-002-WECC-2, Requirement R1,
which is the same as the calculation proposed and accepted by the
Commission in the remanded WECC regional Reliability Standard BAL-002-
WECC-1.\25\
---------------------------------------------------------------------------
\25\ Id. at 13-16.
---------------------------------------------------------------------------
21. Third, the petition states that the proposed WECC regional
Reliability Standard BAL-002-WECC-2, Requirement R1, was modified to
clarify that balancing authorities and reserve sharing groups within
WECC are subject to the same restrictions regarding the use of firm
load for contingency reserve as balancing authorities elsewhere
operating under the NERC Reliability Standards. NERC indicates that it
has clarified the connection to the Energy Emergency Level 3 by
incorporating language from Reliability Standard EOP-002-2.1,
Attachment 1, Section B, into WECC regional Reliability Standard BAL-
002-WECC-2, Requirement R1.\26\
---------------------------------------------------------------------------
\26\ Id. at 18.
---------------------------------------------------------------------------
22. Fourth, according to the petition, WECC regional Reliability
Standard BAL-002-WECC-2, Requirement R1 was modified to explicitly
provide that demand-side management technically capable of providing
the service may be used as a resource for contingency reserve.\27\
---------------------------------------------------------------------------
\27\ Id. at 16-18.
---------------------------------------------------------------------------
23. Fifth, the petition states that WECC regional Reliability
Standard BAL-002-WECC-2 replaces the term ``net generation'' with the
phrase ``generating energy values average over each Clock Hour.'' The
petition notes that the regional Reliability Standard also includes a
reference to Opinion No. 464, which addresses the issue of behind-the-
meter generation, in response to comments raised in the Order No. 740
rulemaking.\28\ The petition also states that WECC regional Reliability
Standard BAL-002-WECC-2 allows for impacted balancing authorities and
reserve sharing groups to enter into transactions to provide
contingency reserve for another balancing authority or procure
contingency reserve from another balancing authority to more equitably
allocate generation for purposes of the reserve calculation. The
petition further states that the NERC Functional Model, Version 5, more
closely aligns the tasks in the WECC regional Reliability Standard BAL-
002-WECC-2 with balancing authorities than to generator operators.\29\
---------------------------------------------------------------------------
\28\ California Indep. Sys. Operation Corp., Opinion No. 464,
104 FERC ] 61,196 (2003).
\29\ NERC, Reliability Functional Model, Version 5 (approved May
2010), available at https://www.nerc.com/files/Functional_Model_V5_Final_2009Dec1.pdf.
---------------------------------------------------------------------------
F. Notice of Proposed Rulemaking
24. On July 18, 2013, the Commission issued a Notice of Proposed
Rulemaking (NOPR) proposing to approve regional Reliability Standard
BAL-002-WECC-2 as just, reasonable, not unduly discriminatory or
preferential, and in the public interest. The Commission also proposed
to approve the associated violation risk factors, violation severity
levels, implementation plan, effective date, and the retirement of WECC
regional Reliability Standard BAL-STD-002-0 (Operating Reserves) and
the removal of two WECC Regional Definitions, ``Non-Spinning Reserve''
and ``Spinning Reserve,'' from the NERC Glossary. The NOPR stated that
the WECC regional Reliability Standard is more stringent than the NERC
Reliability Standard BAL-002-1 because the regional Reliability
Standard requires applicable entities to restore contingency reserve
within 60 minutes following the Disturbance Recovery Period while the
NERC Reliability Standard only requires restoration of contingency
reserve within 90 minutes. The NOPR also stated that the method for
calculating minimum contingency reserve in the regional Reliability
Standard is more stringent than Requirement R3.1 in NERC Reliability
Standard BAL-002-1 because it requires minimum contingency reserve
levels that will be at least equal to the NERC Reliability Standard
minimum (i.e., equal to the most severe single contingency) and more
often will be greater. The NOPR further stated that NERC and WECC
addressed the directives in Order No. 740. In addition, the NOPR
proposed to direct NERC to submit an informational filing after the
first two years of implementation of regional Reliability Standard BAL-
002-WECC-2 that addresses the adequacy of contingency reserve in the
Western Interconnection.
25. In response to the NOPR, NERC and WECC, jointly, and Powerex
Corp. (Powerex), Portland General Electric Company (Portland),
California Independent System Operator Corporation (CAISO), and Tacoma
Power (Tacoma) filed comments. We address below the issues raised in
the NOPR and comments.
II. Discussion
26. Pursuant to FPA section 215(d)(2), we approve WECC regional
Reliability Standard BAL-002-WECC-2 as just, reasonable, not unduly
discriminatory or preferential, and in the public interest. For
applicable entities in the WECC Region, regional Reliability Standard
BAL-002-WECC-2 specifies
[[Page 71452]]
the quantity and types of contingency reserve required to ensure
reliability under normal and abnormal conditions. WECC regional
Reliability Standard is more stringent than the NERC Reliability
Standard BAL-002-1 because the regional Reliability Standard requires
applicable entities to restore contingency reserve within 60 minutes
following the Disturbance Recovery Period while the NERC Reliability
Standard only requires restoration of contingency reserve within 90
minutes. In addition, the method for calculating minimum contingency
reserve in the regional Reliability Standard is more stringent than
Requirement R3.1 in NERC Reliability Standard BAL-002-1 because it
requires minimum contingency reserve levels that will be at least equal
to the NERC Reliability Standard minimum (i.e., equal to the most
severe single contingency) and more often will be greater.\30\ We also
conclude that NERC and WECC addressed the Commission's directives in
Order No. 740. In addition to approving regional Reliability Standard
BAL-002-WECC-2, the Commission directs NERC to submit an informational
filing after the first two years of implementation of the regional
Reliability Standard that addresses the adequacy of contingency reserve
in the Western Interconnection.
---------------------------------------------------------------------------
\30\ As stated in Order No. 740, the proposed WECC regional
Reliability Standard does not excuse non-performance with NERC
Reliability Standard BAL-002-1. Order No. 740, 133 FERC ] 61,063 at
P 39.
---------------------------------------------------------------------------
27. We discuss below the following issues raised in the NOPR and
comments: (A) new methodology for calculating minimum contingency
reserve; (B) elimination of interruptible imports requirement; (C)
qualifying resources for contingency reserve; (D) use of the term
``Load''; (E) use of net generation data to calculate contingency
reserve; (F) violation risk factors and violation severity levels; (G)
removal of terms from the NERC Glossary; and (H) implementation plan
and effective date.
A. New Methodology for Calculating Minimum Contingency Reserve
NERC Petition
28. WECC regional Reliability Standard BAL-002-WECC-2 includes a
new methodology for calculating minimum contingency reserve, based on
the greater of the most severe single contingency or the sum of three
percent of load plus three percent of net generation. The new
methodology is different from the methodology in WECC regional
Reliability Standard BAL-STD-002-0, which is based on the greater of
the most severe single contingency or the sum of five percent of load
responsibility served by hydro generation and seven percent of the load
responsibility served by thermal generation.
29. WECC provides ``two years' worth of additional data showing the
amount of contingency reserves that would be calculated for each
Balancing Authority and Reserve Sharing Group under the proposed
methodology.'' \31\ WECC states that ``during the two-year period of
2010-2012, the average increase/decrease in Contingency Reserve
required under the existing methodology juxtaposed to the proposed
methodology was an average decrease of 137 MW across the Western
Interconnection'' and that a 137 MW decrease represents ``.000932 of
WECC's peak load and .001934 of WECC's minimum load'' within that two-
year period.\32\ WECC concludes that ``implementation of the proposed
methodology will, on average, reduce the amount of Contingency Reserve
held within the Interconnection; however, the average change is so
small in comparison to the load served within the Interconnection that
it should have no adverse impact on reliability.'' \33\
---------------------------------------------------------------------------
\31\ Petition at 13.
\32\ Id.
\33\ Id. at 16.
---------------------------------------------------------------------------
NOPR
30. In the NOPR, the Commission proposed to approve the new
methodology and to direct NERC to submit an informational filing
following implementation of the regional Reliability Standard that
addresses the adequacy of contingency reserve levels in the Western
Interconnection.
31. The NOPR stated that, while the data submitted by NERC shows an
average decrease of 137 MW, the data also shows that the largest single
decrease in contingency reserve equaled 826 MW during the two-year
study period when comparing the current and proposed methodologies.\34\
The NOPR observed that, at the time of the 826 MW decrease (i.e., 9/15/
10 at 14:00), the contingency reserve value using the current
methodology for calculating minimum contingency reserve was 8259 MW
versus 7434 MW using the new methodology. The NOPR stated that the 826
MW decrease represented a 10 percent decrease in contingency reserve at
that time interval.\35\ The NOPR noted that the data also show a
widening gap over time (e.g., a difference of 114 MW at the beginning
date but 192 MW at the end date).\36\
---------------------------------------------------------------------------
\34\ Petition, Exhibit G (data point at date/time interval 9/15/
10 at 14:00).
\35\ Petition at 16.
\36\ The 114 MW and 192 MW values are calculated by plotting a
trend line on the contingency reserve data submitted by WECC using
the existing methodology and plotting a trend line on the
contingency reserve data submitted by WECC using the proposed
methodology. The initial difference between the two trend lines is
114 MW while the difference at the end of the trend lines is 192 MW.
---------------------------------------------------------------------------
32. The NOPR proposed to direct NERC to submit an informational
filing to the Commission assessing contingency reserve levels in the
Western Interconnection after the first two years of implementation of
the regional Reliability Standard. In the information filing, NERC, in
consultation with WECC, would provide an assessment of minimum
contingency reserve levels in the Western Interconnection following
implementation of the new methodology. The NOPR stated that the
informational filing should assess whether the new methodology for
calculating minimum contingency reserve levels has had an adverse
impact on reliability in the Western Interconnection and should include
the data that NERC and WECC use to assess the sufficiency of the
minimum contingency reserve levels under the new methodology. The NOPR
stated that such data could include, but need not be limited to an
increase or decrease in the ``Average Percent Non-Recovery Disturbance
Control Standards (DCS) Events,'' \37\ an increase or decrease in the
average Contingency Reserve Restoration Period, an increase or decrease
in the number of events larger than the minimum contingency reserve
levels, and any other information that NERC or WECC deem relevant. The
NOPR proposed to direct NERC to submit the informational filing to the
Commission 90 days after the end of the two-year period following
implementation. The NOPR stated that NERC may choose to submit the
informational filing sooner if NERC identifies issues with contingency
reserve levels in the Western Interconnection that may require
immediate action, and that the Commission would review the
informational filing to determine whether any action is necessary.
---------------------------------------------------------------------------
\37\ See NERC, Metric AL2-4 (Average Percent Non-Recovery of
Disturbance Control Standard (DCS) Events), available at https://www.nerc.com/pa/RAPA/ri/Pages/DCSEvents.aspx.
---------------------------------------------------------------------------
Comments
33. NERC and WECC support the NOPR proposal. NERC commits to submit
an informational filing that assesses whether the methodology for
[[Page 71453]]
calculating minimum contingency reserve levels has had an adverse
impact on reliability in the Western Interconnection. NERC states that
the informational filing will include the data used to make the
assessment and will clarify the effect of WECC regional Reliability
Standard BAL-002-WECC-2 on reliability in the Western Interconnection.
34. Tacoma and Portland maintain that the new methodology for
calculating contingency reserve is ambiguous because the methodology
uses values based on hourly integrated load and hourly integrated
generation (i.e., averages over the course of a given hour). Tacoma and
Portland assert that this is a change over the use of instantaneous
megawatt values under WECC regional Reliability Standard BAL-STD-002-0.
Tacoma and Portland state that it is unclear how the new methodology
should be applied because it is unclear whether the hour referred to is
the previous hour, a forecast for the next hour, or a value for the
hour determined after-the-fact. Tacoma states that if the hour referred
to is the previous hour, the value will no longer be pertinent to real-
time operational data and real-time application.
35. Portland states that the new methodology could result in
significant reductions in contingency reserve at specific times, which
could have an impact on frequency response capabilities. Portland also
questions the data WECC submitted to support the new methodology.
Portland states that three of the six entities surveyed by WECC did not
use the previous methodology (i.e., the sum of five percent of load
responsibility served by hydro generation and seven percent of the load
responsibility served by thermal generation) and instead based
contingency reserve values on the most severe single contingency. In
addition, Portland states that ``two years of data is not enough to
show the variability in water years for a region structured around
hydropower.''\38\ Portland recommends requiring 10 years' worth of
data. Portland also states that the new methodology unfairly shifts the
burden on providing reserves to the sink balancing authorities and
load-serving entities, which may not be able to acquire the reserves.
Portland further states that, if the Commission approves the regional
Reliability Standard, NERC should be required to file annual reports
for five years instead of a single report after two years. Portland
maintains that balancing authorities may be conservative and carry
additional reserves in the first year and less so in later years, and
thus requiring reporting for five years will provide a more accurate
picture of the regional Reliability Standard's impact. Portland also
states that NERC should provide a comparative analysis of the new
methodology and the old methodology.
---------------------------------------------------------------------------
\38\ Portland Comments at 4.
---------------------------------------------------------------------------
Commission Determination
36. The Commission adopts the NOPR proposal directing NERC, in
consultation with WECC, to submit an informational filing two years
after implementation of WECC regional Reliability Standard BAL-002-
WECC-2 that assesses whether the new methodology for calculating
minimum contingency reserve levels has had an adverse impact on
reliability in the Western Interconnection. Consistent with NERC's
comments, the informational filing should include the data that NERC
and WECC use to assess the sufficiency of the minimum contingency
reserve levels under the new methodology. NERC is directed to submit
the informational filing 90 days after the end of the two-year period
following implementation. The Commission will review the informational
filing to determine whether any action is warranted. NERC may submit
the informational filing sooner if NERC or WECC identifies issues with
contingency reserve levels in the Western Interconnection that require
more immediate action.
37. We reject the comments submitted by Tacoma and Portland
concerning the new methodology and informational filing. We determine
that the use of ``hourly integrated Load'' and ``hourly integrated
generation'' is not ambiguous or substantively different from the
current practice of calculating contingency reserve. Regional
Reliability Standard BAL-002-WECC-2, Requirement R1.3, explains that
these terms are based on ``real-time hourly load and generating energy
values averaged over each Clock Hour.'' Moreover, the term ``Clock
Hour'' is defined in the NERC Glossary and refers to the current
hour.\39\ In addition, using average values over the course of an hour
is not different from what is required by regional Reliability Standard
BAL-STD-002-0, which states in the Measures section that ``a
Responsible Entity identified in Section A.4 must maintain 100% of
required Operating Reserve levels based upon data averaged over each
clock hour.'' Ultimately, regional Reliability Standard BAL-002-WECC-2,
Requirement R1, now requires minimum contingency reserve to be
calculated from load and generation amounts, but it does not change the
time frame for calculating minimum contingency reserve.
---------------------------------------------------------------------------
\39\ ``Clock Hour: The 60-minute period ending at:00. All
surveys, measurements, and reports are based on Clock Hour periods
unless specifically noted.'' NERC Glossary at 19.
---------------------------------------------------------------------------
38. We also reject Portland's comment that the new methodology
shifts the burden of providing reserves to sink balancing authorities
and load serving entities, which may be unable to acquire the necessary
reserves. As we stated in Order No. 740, we agree with NERC and WECC
that the ``equal split between load and generation [in the new
methodology] represents a reasonable balance to moderate shifts in
Contingency Reserve responsibility and costs among the applicable
entities.'' \40\ Moreover, Portland does not provide any evidence that
sink balancing authorities or load-serving entities will be unable to
acquire the necessary reserves.\41\
---------------------------------------------------------------------------
\40\ Petition at 16; see also Order No. 740, 133 FERC ] 61,063
at P 41.
\41\ In developing the implementation plan, NERC recognized that
the new methodology would require responsible entities to enter into
contractual agreements and negotiations and allowed sufficient time
for responsible entities to enter into such arrangements. Petition,
Exhibit A at 5.
---------------------------------------------------------------------------
39. With respect to Portland's concerns regarding WECC's data and
the informational filing, the informational filing is intended to
identify any issues regarding the adequacy of contingency reserve
levels in the Western Interconnection and the impact on other
reliability areas such as frequency response. We are satisfied that
WECC provided enough representative data to conclude that the new
methodology will likely not result in significantly less average
contingency reserve in the Western Interconnection. However, for the
reasons discussed above, the Commission believes that it is necessary
to monitor and assess contingency reserve levels in the Western
Interconnection following implementation of the regional Reliability
Standard. We are not inclined at this time to require more than two
years of data as Portland suggests. The Commission intends to analyze
the two-year informational filing and determine whether it adequately
addresses the sufficiency of the proposed required reserve levels in
the Western Interconnection. Portland or other entities may also
examine the filing and, if there is sufficient technical analysis that
suggests contingency reserve levels may be inadequate, the Commission
may direct NERC and/or WECC to submit additional informational filings
in the future. The
[[Page 71454]]
Commission adopts the NOPR proposal to direct NERC to file an
informational filing two years after implementation of the regional
Reliability Standard.
B. Removal of Interruptible Imports Requirement NERC Petition
40. Regional Reliability Standard BAL-002-WECC-2, Requirement R3,
states that:
Each Sink Balancing Authority and each sink Reserve Sharing
Group shall maintain an amount of Operating Reserve, in addition to
the minimum Contingency Reserve in Requirement R1, equal to the
amount of Operating Reserve-Supplemental for any Interchange
Transaction designated as part of the Source Balancing Authority's
Operating Reserve-Supplemental or source Reserve Sharing Group's
Operating Reserve-Supplemental, except within the first sixty
minutes following an event requiring the activation of Contingency
Reserve.
41. NERC maintains that Requirement R3 is a clarification of an
existing requirement in WECC regional Reliability Standard BAL-STD-002-
0, which requires additional reserves for interruptible imports. NERC
explains that the standard drafting team removed the term
``interruptible imports'' because it is not a defined term in the NERC
Glossary and is subject to misinterpretation. NERC states that the
standard drafting team replaced the term with clarifying language
describing which types of transactions must be covered by additional
reserves. NERC observes that the continent-wide Reliability Standard
BAL-002-1 does not require reserves for Interchange Transactions
designated as part of the source balancing authority or source reserve
sharing group Operating Reserve-Supplemental and thus the requirement
in the regional Reliability Standard is more stringent than the
continent-wide Reliability Standard.
Comments
42. Powerex maintains that, while the term ``interruptible
imports'' has not been clearly defined by WECC or NERC, the solution is
not to remove the term from the regional Reliability Standard. Powerex
states that removal of interruptible imports results in an inferior
regional Reliability Standard because it effectively eliminates any
Reliability Standard specifying a reserve requirement for interruptible
imports. Powerex maintains that balancing authorities will no longer be
required to set aside any capacity to cover interruptible imports into
their balancing authority areas. Powerex states that the interruptible
imports requirement has served to ``differentiate an import of
interruptible energy--a product that may be curtailed for ANY reason .
. . from a `firm' energy import that is supported by sufficient
generating resources within the source [balancing authority] to assure
the energy will not be curtailed during the delivery period.'' \42\
---------------------------------------------------------------------------
\42\ Powerex Comments at 8.
---------------------------------------------------------------------------
Commission Determination
43. The Commission rejects Powerex's comments concerning removal of
the term ``interruptible imports.'' The Commission agrees with NERC and
WECC that Requirement R3 identifies the types of transactions,
including Interchange Transactions, that must be covered by additional
reserves. Accordingly, we disagree with Powerex that the concept of
interruptible imports has been removed from the regional Reliability
Standard. Replacing the term ``interruptible imports'' with the NERC-
defined term ``Interchange Transaction'' eliminates ambiguity from the
regional Reliability Standard by including all types of Interchange
Transactions (e.g., firm or interruptible) as it pertains to
calculating Operating Reserve. Moreover, in response to comments during
the standards development process, the standard drafting team
reinforced this view in stating that ``[Requirement] R3 of the proposed
standard directly addresses the concept of interruptible schedules and
[Requirement] R4 addresses the concept of on-demand energy.'' \43\
---------------------------------------------------------------------------
\43\ Petition, Exhibit C at 11.
---------------------------------------------------------------------------
44. Powerex states that ``in WECC there exists an unacceptable lack
of clarity with respect to reserve requirements associated with energy
interchange scheduling.'' Powerex also ``acknowledges that the proposed
BAL-002-WECC-2 standard alone cannot address all of these concerns, but
believes it is premature, unwarranted, and problematic to eliminate the
requirement that interruptible imports carry 100% reserves until these
broader concerns are addressed by some other regulatory requirement.''
We disagree with Powerex that it is appropriate to condition approval
of regional Reliability Standard BAL-002-WECC-2, and the removal of the
term ``interruptible imports,'' on first addressing existing problems
concerning reserve requirements associated with energy interchange
scheduling. Instead, we agree with NERC and WECC that the regional
Reliability Standard, in requiring additional reserves for Interchange
Transactions, is more stringent than the continent-wide Reliability
Standard BAL-002, and we approve the requirement on that basis.
C. Qualifying Resources for Contingency Reserve
NERC Petition
45. WECC regional Reliability Standard BAL-002-WECC-2, Requirement
R.1.1.2 states that contingency reserve may be comprised of any
combination of the reserve types specified below:
[ssquf] Operating Reserve--Spinning
[ssquf] Operating Reserve--Supplemental
[ssquf] Interchange Transactions designated by the Source
Balancing.
[ssquf] Authority as Operating Reserve--Supplemental
[ssquf] Reserve held by other entities by agreement that is
deliverable on Firm Transmission Service.
[ssquf] A resource, other than generation or load, that can provide
energy or reduce energy consumption.
[ssquf] Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management, Interruptible
Load or Interruptible Demand, or any other Load made available for
curtailment by the Balancing Authority or the Reserve Sharing Group via
contract or agreement.
[ssquf] All other load, not identified above, once the Reliability
Coordinator has declared an energy emergency alert signifying that firm
load interruption is imminent or in progress.
46. ``Operating Reserve--Spinning'' is defined in the NERC Glossary
to mean ``generation (synchronized or capable of being synchronized to
the system) that is fully available to serve load within the
Disturbance Recovery Period following the contingency event; or load
fully removable from the system within the Disturbance Recovery Period
following the contingency event.''
Comments
47. CAISO seeks clarification that non-traditional resources,
including electric storage facilities, may qualify as ``Operating
Reserve--Spinning'' so long as they meet the technical and performance
requirements in Requirement R2 (i.e., that the resources must be
immediately and automatically responsive to frequency deviations
through the action of a control system and capable of fully responding
within ten minutes).
Commission Determination
48. The Commission determines that non-traditional resources,
including electric storage facilities, may qualify as ``Operating
Reserve--Spinning''
[[Page 71455]]
provided those resources satisfy the technical and performance
requirements in Requirement R2. Our determination is supported by the
standard drafting team's response to a comment during the standard
drafting process where the standard drafting team stated that
``technologies, such as batteries, both contemplated and not yet
contemplated are included in the standard as potential resources--so
long as the undefined resource can meet the response characteristics
described in the standard * * * The language does not preclude any
specific technology; rather, the language delineates how that
technology must [] respond.'' \44\ We also note that non-traditional
resources could contribute to contingency reserve under the regional
Reliability Standard if they are resources, ``other than generation or
load, that can provide energy or reduce energy consumption.''
---------------------------------------------------------------------------
\44\ Petition, Exhibit C at 20.
---------------------------------------------------------------------------
D. Use of the Term Load in Requirement R.1.1
NERC Petition
49. WECC regional Reliability Standard BAL-002-WECC-2, Requirement
R.1.1, states that minimum contingency reserve must equal the ``amount
of Contingency Reserve equal to the loss of the most severe single
contingency'' or the ``amount of Contingency Reserve equal to the sum
of three percent of hourly integrated Load plus three percent of hourly
integrated generation.''
Comments
50. Tacoma states that the term ``Load'' is defined in the NERC
Glossary as ``[a]n end-use device or customer that receives power from
the electric system.'' Tacoma maintains that the term ``Load'' in
Requirement R.1.1 cannot be interpreted to be a device or customer that
receives power from the electric system because ``the requirement
directs the taking of a percentage of the `Load' and treating it as a
measurement of power, like megawatts.'' Tacoma recommends that the
defined term ``Load'' should be replaced with the undefined term
``load.''
Commission Determination
51. Based on the context of Requirement R.1.1, the Commission
understands that the use of the term ``Load'' does not refer to an end-
use device or customer. Instead, it refers to the power consumption
associated with the end-use device or customer (i.e., Load), which is
then applied in calculating minimum contingency reserve levels. With
that understanding, the Commission will not direct NERC to change
``Load'' to ``load'' in Requirement R.1.1 as requested by Tacoma. NERC
and WECC may modify this language in the next version of the regional
Reliability Standard.
E. Use of Net Generation Data To Calculate Contingency Reserve
NERC Petition
52. NERC states that the ``calculation of minimum Contingency
Reserves is based on three percent of net generation and three percent
of net load and this fairly balances the responsibilities of
Contingency Reserve providers with the financial obligations of those
who would benefit most from those services.'' \45\ Requirement R1.1.3
states that the minimum contingency reserve calculation should be based
on ``real-time hourly load and generating energy values averaged over
each Clock Hour (excluding Qualifying Facilities covered in 18 CFR
292.101, as addressed in FERC Opinion 464).'' In Requirement R1.1.3,
NERC states that the standard drafting team replaced the term ``net
generation'' with ``generating energy values averaged over each Clock
Hour.'' NERC maintains that the substitution was in response to
comments in the Order No. 740 rulemaking regarding the definition of
the term ``net generation.''
---------------------------------------------------------------------------
\45\ Petition at 16.
---------------------------------------------------------------------------
Comments
53. Tacoma states that changing metered data to net generation for
real-time operations would result in undue burden and cause a delay in
implementation because many balancing authorities do not use net
generation in their minimum contingency reserve calculation. Tacoma
states that it uses gross generation for real-time operations and
includes station service within its entity load. Tacoma explains that
it prepares annual reports that include net generation, but Tacoma
asserts that using net generation in real-time operations will require
``significant changes in the data and telemetry that must be available
in real-time operations.'' \46\
---------------------------------------------------------------------------
\46\ Tacoma Comments at 3.
---------------------------------------------------------------------------
Commission Determination
54. The Commission notes that NERC's petition states that the
``calculation of minimum Contingency Reserves is based on three percent
of net generation.'' \47\ Based on NERC's description, the NOPR also
used the term ``net generation'' at various points. However,
Requirement R1 of WECC regional Reliability Standard BAL-002-WECC-2, by
design, does not use the term ``net generation.'' Instead, Requirement
R1.1.3 states that the minimum contingency reserve calculation should
be based on ``real-time hourly load and generating energy values
averaged over each Clock Hour (excluding Qualifying Facilities covered
in 18 CFR 292.101, as addressed in FERC Opinion 464).'' Accordingly,
Tacoma's concern about the use of ``net generation'' to calculate
minimum contingency reserve is moot.
---------------------------------------------------------------------------
\47\ Petition at 16.
---------------------------------------------------------------------------
F. Violation Risk Factors and Violation Severity Levels
55. The petition states that each Requirement of the proposed WECC
regional Reliability Standard BAL-002-WECC-2 includes one violation
risk factor and one violation severity level and that the ranges of
penalties for violations will be based on the sanctions table and
supporting penalty determination process described in the Commission-
approved NERC Sanctions Guideline. The NOPR proposed to approve the
violation risk factors and violation severity levels for the
Requirements of WECC regional Reliability Standard BAL-002-WECC-2 as
consistent with the Commission's established guidelines.\48\ The
Commission did not receive comments regarding the proposed violation
risk factors and violation severity levels. Accordingly, the Commission
approves the violation risk factors and violation severity levels for
the requirements of WECC regional Reliability Standard BAL-002-WECC-2.
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\48\ See North American Electric Reliability Corp., 135 FERC ]
61,166 (2011).
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G. Removal of Terms From NERC Glossary
56. The petition states that proposed WECC regional Reliability
Standard BAL-002-WECC-2 replaces the terms ``Spinning Reserve'' with
``Operating Reserve-Spinning'' and ``Non-Spinning Reserve'' with
``Operating Reserve-Supplemental'' 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 reserve. The petition states that Operating
Reserve-Spinning and Operating Reserve-Supplemental have glossary
definitions that are inclusive of demand-side management, including
controllable load. Accordingly, the petition seeks revision of the NERC
Glossary to remove the two WECC Regional Definitions,
[[Page 71456]]
Non-Spinning Reserve and Spinning Reserve. With the removal of Non-
Spinning Reserve and Spinning Reserve from the proposed WECC regional
Reliability Standard BAL-002-WECC-2, the NOPR proposed to approve
removal of those WECC Regional Definitions from the NERC Glossary. The
Commission did not receive comments regarding the proposed revisions to
the NERC Glossary. Accordingly, the Commission approves the proposed
revisions to the NERC Glossary.
H. Implementation Plan and Effective Date
57. The petition proposes that WECC regional Reliability Standard
BAL-002-WECC-2 become effective on the first day of the third quarter
following applicable regulatory approval. The petition states that the
proposed WECC regional Reliability Standard may require execution of
contracts by some applicable entities before implementation can occur,
and the proposed effective date allows time for applicable entities to
finalize needed contracts. The petition also proposes to retire the
currently-effective WECC regional Reliability Standard BAL-STD-002-0 on
the proposed effective date.
58. The NOPR proposed to approve the petition's implementation plan
and effective date for the WECC regional Reliability Standard BAL-002-
WECC-2. The Commission did not receive comments regarding the proposed
implementation plan and effective date. Accordingly, the Commission
approves the implementation plan and effective date for WECC regional
Reliability Standard BAL-002-WECC-2.
III. Information Collection Statement
59. The following collection of information contained in this Final
Rule is subject to review by the Office of Management and Budget (OMB)
under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).\49\
OMB's regulations require approval of certain information collection
requirements imposed by agency rules.\50\ Upon approval of a
collection(s) of information, OMB will assign an OMB control number and
an expiration date. Respondents subject to the filing requirements of a
rule will not be penalized for failing to respond to these collections
of information unless the collections of information display a valid
OMB control number. The Commission solicited comments on the need for
and the purpose of the information contained in regional Reliability
Standard BAL-002-WECC-2 and the corresponding burden to implement the
regional Reliability Standard. The Commission received comments on
specific requirements in the regional Reliability Standard, which we
address in this Final Rule. However, the Commission did not receive any
comments on our reporting burden estimates.
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\49\ 44 U.S.C. 3507(d).
\50\ 5 CFR 1320.11.
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60. Public Reporting Burden: The burden and cost estimates below
are based on the need for applicable entities to revise documentation,
already required by the current WECC regional Reliability Standard BAL-
STD-002-0, to reflect certain changes made in WECC regional Reliability
Standard BAL-002-WECC-2. Our estimates are based on the NERC Compliance
Registry as of May 30, 2013, which indicates that 36 balancing
authorities and reserve sharing groups are registered within WECC.
----------------------------------------------------------------------------------------------------------------
Number of
Number of annual Average burden Estimated
Improved requirement Year respondents responses per hours per total annual
\51\ respondent response burden hours
----------------------------------------------------------------------------------------------------------------
(1) (2) (3) (1)*(2)*(3)
----------------------------------------------------------------------------------------------------------------
Update Existing Documentation to 1 36 1 \52\ 1 36
Conform with Proposed Regional
Reliability Standard...........
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Total....................... .............. .............. .............. .............. 36
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\51\ NERC balancing authorities and reserve sharing groups are responsible for the improved requirement.
Further, if a single entity is registered as both a balancing authority and reserve sharing group, that entity
is counted as one unique entity.
\52\ The Commission bases the hourly reporting burden on the time for an engineer to implement the requirements
of the final rule.
Estimated Total Annual Burden Hours for Collection: (Compliance/
Documentation) = 36 hours
Costs to Comply with PRA:
Year 1: $2,160.
Year 2 and ongoing: $0.
61. Year 1 costs include updating existing documentation, already
required by the current WECC regional Reliability Standard BAL-STD-002-
0, to reflect changes in WECC regional Reliability Standard BAL-002-
WECC-2. For the burden category above, the cost is $60/hour (salary
plus benefits) for an engineer.\53\ The estimated breakdown of annual
cost is as follows:
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\53\ Labor rates from Bureau of Labor Statistics (BLS) (https://bls.gov/oes/current/naics2_22.htm). Loaded costs are BLS rates
divided by 0.703 and rounded to the nearest dollar (https://www.bls.gov/news.release/ecec.nr0.htm).
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Year 1
Update Existing Documentation to Conform with Proposed
Regional Reliability Standard: 36 entities * (1 hours/response * $60/
hour) = $2,160.
Title: FERC-725E, Mandatory Reliability Standards-WECC (Western
Electric Coordinating Council)
Action: Proposed Collection of Information
OMB Control No: 1902-0246
Respondents: Business or other for-profit, and not-for-profit
institutions.
Frequency of Responses: One-time.
Necessity of the Information: Regional Reliability Standard BAL-
002-WECC-2 implements the Congressional mandate of the Energy Policy
Act of 2005 to develop mandatory and enforceable Reliability Standards
to better ensure the reliability of the nation's Bulk-Power System.
Specifically, the regional Reliability Standard ensures that balancing
authorities and reserve sharing groups in the WECC Region have the
quantity and types of contingency reserve required to ensure
reliability under normal and abnormal conditions.
Internal review: The Commission has reviewed regional Reliability
Standard BAL-002-WECC-2 and made a determination that its action is
necessary to implement section 215 of the FPA. The Commission has
assured itself, by means of its internal review,
[[Page 71457]]
that there is specific, objective support for the burden estimates
associated with the information requirements.
62. Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
Office of the Executive Director, 888 First Street NE., Washington, DC
20426 [Attention: Ellen Brown, email: Data Clearance@ferc.gov, phone:
(202) 502-8663, fax: (202) 273-0873].
IV. Environmental Analysis
63. 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.\54\ 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.\55\ The actions directed
herein fall within this categorical exclusion in the Commission's
regulations.
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\54\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
\55\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act
64. The Regulatory Flexibility Act of 1980 (RFA) \56\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
As discussed above, regional Reliability Standard BAL-002-WECC-2
applies to 36 registered balancing authorities and reserve sharing
groups in the NERC Compliance Registry. Comparison of the NERC
Compliance Registry with data submitted to the Energy Information
Administration on Form EIA-861 indicates that, of the 36 registered
balancing authorities and reserve sharing groups, two may qualify as
small entities.\57\
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\56\ 5 U.S.C. 601-612.
\57\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act (SBA), which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. See
15 U.S.C. 632. According to the Small Business Administration, an
electric utility is defined as ``small'' if, including its
affiliates, it is primarily engaged in the generation, transmission,
and/or distribution of electric energy for sale and its total
electric output for the preceding fiscal year did not exceed 4
million megawatt hours.
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65. The Commission estimates that, on average, each of the two
affected small entities will have an estimated cost of $60 in Year 1
and no further ongoing costs. These figures are based on information
collection costs plus additional costs for compliance. The Commission
does not consider this to be a significant economic impact for small
entities because it should not represent a significant percentage of
the small entities' operating budgets. The Commission solicited
comments concerning is proposed Regulatory Flexibility Act
certification and did not receive any comments. Accordingly, the
Commission certifies that this Final Rule will not have a significant
economic impact on a substantial number of small entities.
VI. Document Availability
66. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (https://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
67. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
68. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional Notification
69. These regulations are effective January 28, 2014. The
Commission has determined, with the concurrence of the Administrator of
the Office of Information and Regulatory Affairs of OMB, that this rule
is not a ``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-28626 Filed 11-27-13; 8:45 am]
BILLING CODE 6717-01-P
