Remedial Action Schemes Reliability Standard, 44918-44925 [2017-20669]
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
employees’’). In the Pay Ratio Release,
we acknowledged that the inclusion of
non-U.S. employees would raise
compliance costs for multinational
companies.15 To address concerns about
compliance costs, the rule permits
registrants to exempt non-U.S.
employees where these employees
account for 5% or less of the registrant’s
total U.S. and non-U.S. employees, with
certain limitations.16 We are clarifying
that a registrant may use appropriate
existing internal records, such as tax or
payroll records, in determining whether
the 5% de minimis exemption is
available.17
2. Median Employee
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We also believe that the use of
existing internal records may, in many
circumstances, be appropriate in
identifying a registrant’s median
employee. Instruction 4 to Item 402(u)
permits a registrant to identify its
median employee using a consistently
applied compensation measure, such as
information derived from the
registrant’s tax or payroll records. We
are clarifying that a registrant may use
internal records that reasonably reflect
annual compensation to identify the
median employee, even if those records
do not include every element of
compensation, such as equity awards
widely distributed to employees.
We recognize that, when calculating
total compensation in accordance with
Item 402(c)(2)(x) for the identified
median employee that the registrant
identified using a consistently applied
compensation measure based on
internal records, the registrant may
determine that there are anomalous
characteristics of the identified median
employee’s compensation that have a
significant higher or lower impact on
the pay ratio. The Commission
discussed this issue in the adopting
release specifically and noted that, in
such a circumstance, instead of
concluding that the consistently applied
compensation measure the registrant
used was unsuitable to identify its
median employee, the registrant may
substitute another employee with
substantially similar compensation to
the original identified median employee
15 See Pay Ratio Release, supra note 1, at 50122—
50133.
16 17 CFR 229.402(u)(4)(ii). See also Pay Ratio
Release, supra note 1, at 50124–50125 (noting that
registrants using the de minimis exemption are
required to provide certain disclosures).
17 See, e.g., Instruction 1 to Item 402(u) of
Regulation S–K (17 CFR 229.402(u)) and Pay Ratio
Release, supra note 1, at 50119—50120 (indicating
that determination of the median employee may be
made on any date within the last three months of
the registrant’s last completed fiscal year).
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based on the compensation measure it
used to select the median employee.18
C. Independent Contractors
For purposes of Item 402(u), the term
‘‘employee’’ or ‘‘employee of the
registrant’’ is defined as ‘‘an individual
employed by the registrant or any of its
consolidated subsidiaries.’’ 19 Item
402(u)(3) excludes from the definition
those workers who are employed, and
whose compensation is determined, by
an unaffiliated third party but who
provide services to the registrant or its
consolidated subsidiaries as
independent contractors or ‘‘leased’’
workers.20 In the Pay Ratio Release, the
Commission indicated that excluding
these workers is appropriate, because
registrants generally do not control the
level of compensation that these
workers are paid.21
Some commenters have expressed
concerns about the application of the
rule’s definition of ‘‘employee.’’ 22
Because registrants already make
determinations as to whether a worker
is an employee or independent
contractor in other legal and regulatory
contexts, such as for employment law or
tax purposes, some commenters
suggested that the Commission should
allow registrants to use widely
recognized tests to determine who is an
‘‘employee’’ for purposes of the rule.23
Such a test might, for example, be
drawn from guidance published by the
Internal Revenue Service with respect to
independent contractors.24
Item 402(u)(3) makes clear that an
‘‘employee’’ is an individual employed
by the registrant.25 The provision in
Item 402(u)(3) indicating that the
definition of ‘‘employee’’ does not
include workers who are employed, and
whose compensation is determined, by
an unaffiliated third party describes one
category of workers that is expressly
excluded from the definition of
‘‘employee’’ under the rule. The
provision was not intended to serve as
an exclusive basis for determining
whether a worker is an employee of the
registrant. Accordingly, we believe it
18 See Pay Ratio Release, supra note 1, at 50137–
50138 (providing that the registrant must disclose
the substitution as part of its brief description of the
methodology it used to identify the median
employee).
19 17 CFR 229.402(u)(3).
20 Id.
21 See Pay Ratio Release, supra note 1, at Section
50165–50166.
22 See, e.g., letters from Davis Polk, FSR, SCG, and
Insurance Coalition.
23 See, e.g., letters from Davis Polk and Insurance
Coalition.
24 See, e.g., Publication 15–A Employer’s
Supplemental Tax Guide (2017).
25 17 CFR 229.402(u)(3).
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would be consistent with Item 402(u)
for a registrant to apply a widely
recognized test under another area of
law that the registrant otherwise uses to
determine whether its workers are
employees.26
By the Commission.
Dated: September 21, 2017.
Brent J. Fields,
Secretary.
[FR Doc. 2017–20632 Filed 9–26–17; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM16–20–000; Order No. 837]
Remedial Action Schemes Reliability
Standard
Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:
The Federal Energy
Regulatory Commission approves
Reliability Standard PRC–012–2
(Remedial Action Schemes) submitted
by the North American Electric
Reliability Corporation. The purpose of
Reliability Standard PRC–012–2 is to
ensure that remedial action schemes do
not introduce unintentional or
unacceptable reliability risks to the bulk
electric system.
DATES: This rule will become effective
November 27, 2017.
FOR FURTHER INFORMATION CONTACT:
Syed Ahmad (Technical Information),
Office of Electric Reliability, Division
of Reliability Standards and Security,
888 First Street NE., Washington, DC
20426, Telephone: (202) 502–8718,
Syed.Ahmad@ferc.gov.
Alan Rukin (Legal Information), Office
of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE., Washington, DC
20426, Telephone: (202) 502–8502,
Alan.Rukin@ferc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
26 Because we believe most widely recognized
tests likely will consider how compensation is
determined as a factor in identifying a registrant’s
employees, we believe these tests generally would
provide a reasonable means of complying with Item
402(u). See, e.g., note 24. The description of the
methodology required by Instruction 4 of Item
402(u) requires a registrant to include an
explanation of any material assumptions and
adjustments used.
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
Order No. 837
Final Rule
(Issued September 20, 2017)
1. Pursuant to section 215 of the
Federal Power Act (FPA), the Federal
Energy Regulatory Commission
(Commission) approves Reliability
Standard PRC–012–2 (Remedial Action
Schemes).1 The North American Electric
Reliability Corporation (NERC), the
Commission-certified Electric
Reliability Organization (ERO),
submitted Reliability Standard PRC–
012–2 for approval. The purpose of
Reliability Standard PRC–012–2 is to
ensure that remedial action schemes do
not introduce unintentional or
unacceptable reliability risks to the bulk
electric system. In addition, the
Commission approves the associated
violation risk factors and violation
severity levels, implementation plan,
and effective date proposed by NERC.
The Commission also approves the
retirement of currently-effective
Reliability Standards PRC–015–1 and
PRC–016–1 as well as NERC’s request to
withdraw proposed Reliability
Standards PRC–012–1, PRC–013–1, and
PRC–014–1, which are now pending
before the Commission.
I. Background
A. Section 215 and Mandatory
Reliability Standards
2. Section 215 of the FPA requires a
Commission-certified ERO to develop
mandatory and enforceable Reliability
Standards, subject to Commission
review and approval.2 Once approved,
the Reliability Standards may be
enforced by the ERO subject to
Commission oversight or by the
Commission independently.3 In 2006,
the Commission certified NERC as the
ERO pursuant to section 215 of the
FPA.4
B. Order No. 693
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3. On March 16, 2007, the
Commission issued Order No. 693,
approving 83 of the 107 Reliability
Standards filed by NERC, including
Reliability Standards PRC–015–1
(Remedial Action Scheme Data and
Documentation) and PRC–016–1
(Remedial Action Scheme
1 16
U.S.C. 824o.
824o(c), (d).
3 Id. 824o(e).
4 North American Electric Reliability Corp., 116
FERC ¶ 61,062 (ERO Certification Order), order on
reh’g and compliance, 117 FERC ¶ 61,126 (2006),
order on compliance, 118 FERC ¶ 61,190, order on
reh’g, 119 FERC ¶ 61,046 (2007), aff’d sub nom.
Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
2 Id.
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Misoperation).5 Reliability Standard
PRC–015–1 requires transmission
owners, generator owners, and
distribution providers to maintain a
listing; retain evidence of review; and
provide documentation of existing, new
or functionally modified special
protection systems.6 Reliability
Standard PRC–016–1 requires
transmission owners, generator owners,
and distribution providers to provide
the regional reliability organization with
documentation, analyses and corrective
action plans for misoperation of special
protection systems.7
4. In Order No. 693, the Commission
determined that then-proposed
Reliability Standard PRC–012–0 was a
‘‘fill-in-the-blank’’ Reliability Standard
because, while it would require regional
reliability organizations to ensure that
all special protection systems are
properly designed, meet performance
requirements, and are coordinated with
other protection systems, NERC had not
submitted any regional review
procedures with the proposed
Reliability Standard.8 Similarly, the
Commission determined that proposed
Reliability Standard PRC–013–0 was a
‘‘fill-in-the-blank’’ Reliability Standard
because, although it was intended to
ensure that all special protection
systems are properly designed, meet
performance requirements, and are
coordinated with other protection
systems by requiring the regional
reliability organization to maintain a
database of information on special
protection systems, NERC had not filed
any regional procedures for maintaining
the databases.9 Further, the Commission
determined that proposed Reliability
Standard PRC–014–0 was a ‘‘fill-in-theblank’’ Reliability Standard because,
while it was proposed to ensure that
special protection systems are properly
designed, meet performance
requirements, and are coordinated with
other protection systems by requiring
the regional reliability organization to
assess and document the operation,
coordination, and compliance with
NERC Reliability Standards and
effectiveness of special protection
systems at least once every five years,
NERC had not submitted any regional
5 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs.
¶ 31,242, order on reh’g, Order No. 693–A, 120
FERC ¶ 61,053 (2007).
6 Id. PP 1529–1533.
7 Id. PP 1534–1540.
8 Id. PP 1517–18, 1520. The Commission used the
term ‘‘fill-in-the-blank’’ standards to refer to
proposed Reliability Standards that required the
regional reliability organizations to develop at a
later date criteria for use by users, owners or
operators within each region. Id. P 297.
9 Id. PP 1521, 1522, 1524.
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44919
procedures for this assessment and
documentation.10 The Commission
stated that it would not approve or
remand proposed Reliability Standards
PRC–012–0, PRC–013–0 or PRC–014–0
until NERC submitted the additional
necessary information to the
Commission.11
C. Remedial Action Schemes
5. On June 23, 2016, the Commission
approved NERC’s revision to the NERC
Glossary of Terms Used in NERC
Reliability Standards (NERC Glossary)
that redefines special protection system
to have the same definition as remedial
action scheme, effective April 1, 2017.12
The NERC Glossary defines remedial
action scheme to mean:
A scheme designed to detect
predetermined System conditions and
automatically take corrective actions that
may include, but are not limited to, adjusting
or tripping generation (MW and Mvar),
tripping load, or reconfiguring a System(s).
[Remedial Action Schemes (RAS)]
accomplish objectives such as:
• Meet requirements identified in the
NERC Reliability Standards;
• Maintain Bulk Electric System (BES)
stability;
• Maintain acceptable BES voltages;
• Maintain acceptable BES power flows;
• Limit the impact of Cascading or extreme
events.13
The revised remedial action scheme
definition also identifies fourteen items
that do not individually constitute a
remedial action scheme.
D. NERC Petition and Reliability
Standard PRC–012–2
6. On August 5, 2016, NERC
submitted a petition seeking
Commission approval of proposed
Reliability Standard PRC–012–2.14
NERC contended that Reliability
Standard PRC–012–2 is just, reasonable,
not unduly discriminatory or
preferential, and in the public interest.15
NERC explained that the intent of
10 Id.
PP 1525, 1526, 1528.
PP 1520, 1524, 1528.
12 N. Am. Elec. Reliability Corp., Docket No.
RD16–5–000 (June 23, 2016) (delegated letter order);
NERC Glossary, https://www.nerc.com/files/
glossary_of_terms.pdf.
13 NERC Glossary, https://www.nerc.com/files/
glossary_of_terms.pdf; see also Revisions to
Emergency Operations Reliability Standards;
Revisions to Undervoltage Load Shedding
Reliability Standards; Revisions to the Definition of
‘‘Remedial Action Scheme’’ and Related Reliability
Standards, Order No. 818, 153 FERC ¶ 61,228, at
PP 24, 31 (2015).
14 Reliability Standard PRC–012–2 is not attached
to this Final Rule. The Reliability Standard is
available on the Commission’s eLibrary document
retrieval system in Docket No. RM16–20–000 and
is posted on NERC’s Web site, https://
www.nerc.com.
15 NERC Petition at 2.
11 Id.
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
Reliability Standard PRC–012–2 is to
supersede ‘‘pending’’ Reliability
Standards PRC–012–1, PRC–013–1, and
PRC–014–1 and to retire and replace
currently-effective Reliability Standards
PRC–015–1 and PRC–016–1.16 NERC
stated that Reliability Standard PRC–
012–2 represents substantial
improvements over these Reliability
Standards because it streamlines and
consolidates existing requirements;
corrects the applicability of previously
unapproved Reliability Standards; and
implements a continent-wide remedial
action scheme review program.17
7. NERC stated that, in the United
States, Reliability Standard PRC–012–2
will apply to reliability coordinators,
planning coordinators, and remedial
action scheme-entities. Reliability
Standard PRC–012–2 defines remedial
action scheme-entities to include each
transmission owner, generation owner,
or distribution provider that owns all or
part of a remedial action scheme.
8. NERC stated that Reliability
Standard PRC–012–2 includes nine
requirements that combine all existing
(both effective and ‘‘pending’’)
Reliability Standards mentioned above
into a single, consolidated, continentwide Reliability Standard to address all
aspects of remedial action schemes.18
NERC explained that all of the
requirements in Reliability Standard
PRC–012–1 except R2 are now covered
in Requirements R1, R2, R3, R4, R5, R6,
and R8 of Reliability Standard PRC–
012–2.19 NERC maintained that
Reliability Standard PRC–012–1,
Requirement R2 is ‘‘administrative in
nature and does not contribute to
reliability.’’ 20 NERC also stated that it
established Reliability Standard PRC–
012–2, Requirement R9 to replace the
mandate in Reliability Standard PRC–
013–1 that responsible entities maintain
a remedial action scheme database with
pertinent technical information for each
remedial action scheme.21 NERC
explained that Reliability Standard
PRC–012–2, Requirements R4 and R6
cover the review and the mandate to
take corrective action required by
Reliability Standard PRC–014–1.22
NERC stated that it integrated the
performance requirements in Reliability
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16 NERC
noted that it submitted ‘‘for
completeness’’ revised versions of Reliability
Standards PRC–012–1, PRC–013–1, and PRC–014–
1 in its petition to revise the definition of remedial
action scheme, but NERC did not request
Commission approval of the revised Reliability
Standards in that proceeding. Id. at 1 n.5.
17 Id. at 12–13.
18 Id. at 3.
19 Id. at 40.
20 Id. at 41.
21 Id. at 42.
22 Id.at 43.
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Standard PRC–015–1 into Reliability
Standard PRC–012–2, Requirements R1,
R2, and R3.23 NERC also asserted that it
integrated the performance
requirements in Reliability Standard
PRC–016–1 into Reliability Standard
PRC–012–2, Requirements R5, R6, and
R7.24
9. NERC explained how the nine
Requirements in Reliability Standard
PRC- 012–2 work together and with
other Reliability Standards. According
to NERC, Requirements R1, R2, and R3,
together, establish a process for the
reliability coordinator to review new or
modified remedial action schemes.25
The reliability coordinator must
complete the review before an entity
places a new or functionally modified
remedial action scheme into service.
10. Requirement R4 requires the
planning coordinator to perform a
periodic evaluation of each remedial
action scheme within its planning area,
at least once every five years.26 The
evaluation must determine, inter alia,
whether each remedial action scheme:
(1) Mitigates the system conditions or
contingencies for which it was
designed; and (2) avoids adverse
interactions with other remedial action
scheme and protection systems.
Requirement R4, Part 4.1.3 footnote 1
defines a certain subset of remedial
action schemes as ‘‘limited impact.’’
Requirement R4, Part 4.1.3 footnote 1
states: ‘‘A RAS designated as limited
impact cannot, by inadvertent operation
or failure to operate, cause or contribute
to BES Cascading, uncontrolled
separation, angular instability, voltage
instability, voltage collapse, or
unacceptably damped oscillations.’’ 27
Further, Requirement R4, Parts 4.1.3,
4.1.4, and 4.1.5 provide certain
exceptions to ‘‘limited impact’’ remedial
action schemes. For example, Part 4.1.5
states that:
Except for limited impact RAS, a single
component failure in the RAS, when the RAS
is intended to operate does not prevent the
BES from meeting the same performance
requirements (defined in Reliability Standard
TPL–001–4 or its successor) as those required
for the events and conditions for which the
RAS is designed.28
NERC explained that Requirement R4
‘‘does not supersede or modify
[planning coordinator] responsibilities
under Reliability Standard TPL–001–
4.’’ 29 NERC continued that even though
at 43–44.
at 44–45.
25 Id. at 15–18.
26 Id. at 18–22.
27 Id. at 19 & n.44.
28 Id. at 19.
29 Id. at 28.
Part 4.1.5 exempts ‘‘limited impact’’
remedial action schemes from certain
aspects of Reliability Standard PRC–
012–2, Requirement R4 does not exempt
‘‘limited impact’’ remedial actions
schemes from meeting each of the
performance requirements in Reliability
Standard TPL–001–4.30
11. NERC stated that prior to
development of Reliability Standard
PRC–012–2, two NERC Regions, the
Northeast Power Coordinating Council
(NPCC) and the Western Electric
Coordinating Council (WECC), used
their own remedial action scheme
classification regimes to identify
remedial action schemes that would
meet criteria similar to those for
remedial action schemes described as
‘‘limited impact’’ in Reliability Standard
PRC–012–2.31 NERC continued that the
standard drafting team identified the
Local Area Protection Scheme (LAPS)
classification in WECC and the Type III
classification in NPCC as consistent
with the ‘‘limited impact’’
designation.32 According to NERC,
remedial action schemes implemented
prior to the effective date of Reliability
Standard PRC–012–2 that have gone
through the regional review processes of
WECC or NPCC and that are classified
as either a LAPS by WECC or a Type III
by NPCC would be considered a
‘‘limited impact’’ remedial action
scheme for purposes of Reliability
Standard PRC–012–2.33
12. Requirements R5, R6, and R7
pertain to the analysis of each remedial
action scheme operation or
misoperation.34 A remedial action
scheme-entity must perform an analysis
of each remedial action scheme
operation or misoperation and provide
the results to the reviewing reliability
coordinator. Further, the remedial
action scheme-entity must develop and
submit a corrective action plan to the
reviewing reliability coordinator after
learning of a deficiency with its
remedial action scheme, implement the
corrective action plan, and update it as
necessary. Requirement R8 requires
periodic testing of remedial action
scheme performance: Every six years for
normal remedial action schemes and
every 12 years for ‘‘limited impact’’
remedial action schemes.35 Requirement
R9 requires the reliability coordinator to
annually update its remedial action
scheme database.36
23 Id.
30 Id.
24 Id.
31 Id.
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at 28–29.
at 25.
32 Id.at 25–26.
33 Id. at 26.
34 Id. at 29–34.
35 Id. at 34–36.
36 Id. at 36–38.
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
13. NERC proposed an
implementation plan that includes an
effective date for Reliability Standard
PRC–012–2 that is the first day of the
first calendar quarter that is thirty-six
months after the date that the
Commission approves the Reliability
Standard. Concurrent with the effective
date, the implementation plan calls for
the retirement of currently-effective
Reliability Standards PRC–015–1 and
PRC–016–1 and withdrawal of
‘‘pending’’ Reliability Standards PRC–
012–1, PRC–013–1, and PRC–014–1.
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E. Notice of Proposed Rulemaking
14. On January 19, 2017, the
Commission issued a Notice of
Proposed Rulemaking proposing to
approve Reliability Standard PRC–012–
2.37 The NOPR also proposed to clarify
that, consistent with NERC’s
representation in its petition, Reliability
Standard PRC–012–2 will not modify or
supersede any system performance
obligations under Reliability Standard
TPL–001–4.38 In addition, the NOPR
proposed to approve the associated
violation risk factors and violation
severity levels, implementation plan,
and effective date proposed by NERC.39
The NOPR further proposed to approve
the withdrawal of ‘‘pending’’ Reliability
Standards PRC–012–1, PRC–013–1, and
PRC–014–1 and retirement of currentlyeffective Reliability Standards PRC–
015–1 and PRC–016–1, as proposed by
NERC.40
15. In response to the NOPR, entities
filed seven sets of comments. We
address below the issues raised in the
NOPR and comments. The Appendix to
this Final Rule lists the entities that
filed comments in response to the
NOPR.
II. Discussion
16. Pursuant to section 215(d)(2) of
the FPA, we hereby approve Reliability
Standard PRC–012–2.41 Reliability
Standard PRC–012–2 promotes
efficiency and clarity by addressing all
aspects of remedial action schemes in a
single, continent-wide Reliability
Standard. Reliability Standard PRC–
012–2 enhances reliability by assigning
specific remedial action scheme
responsibilities to appropriate
functional entities. Further, Reliability
Standard PRC–012–2 improves
reliability by establishing a centralized
process to review new or modified
37 Remedial
Action Schemes Reliability Standard,
Notice of Proposed Rulemaking, 82 FR 9702 (Jan.
19, 2017), 158 FERC ¶ 61,042 (2017) (NOPR).
38 NOPR, 158 FERC ¶ 61,042 at P 16.
39 Id. P 14.
40 Id.
41 16 U.S.C. 824o(d)(2).
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remedial action schemes prior to
implementation, by requiring periodic
evaluations, tests, and operational
analyses of each remedial action
scheme, and by requiring an annual
update of an area-wide remedial action
scheme database. We determine that
Reliability Standard PRC–012–2
satisfies the relevant directives in Order
No. 693 for the ERO to provide
additional information regarding review
procedures for remedial action schemes
(then called special protection systems)
and to establish continent-wide
uniformity.42
17. We also approve the associated
violation risk factors and violation
severity levels, implementation plan,
and effective date proposed by NERC. In
addition, we approve, upon the effective
date of Reliability Standard PRC–012–2,
the withdrawal of pending Reliability
Standards PRC–012–1, PRC–013–1, and
PRC–014–1 and the retirement of
currently-effective Reliability Standards
PRC–015–1 and PRC–016–1 due to their
consolidation with proposed Reliability
Standard PRC–012–2.
A. Impact of Reliability Standard PRC–
012–2 on Compliance With Reliability
Standard TPL–001–4
NOPR
18. The NOPR sought comments on
its proposal to clarify that Reliability
Standard PRC–012–2 will not modify or
supersede any system performance
obligation under Reliability Standard
TPL–001–4. The NOPR also sought
comments on the processes used to
ensure LAPS or Type III remedial action
schemes’ compliance with Reliability
Standard TPL–001–4 prior to the
effective date of Reliability Standard
PRC–012–2.
Comments
19. NERC, Joint ISOs, and the EEI
support the Commission’s proposal to
approve Reliability Standard PRC–012–
2 with a clarification that it does not
modify or supersede any system
performance obligations under
Reliability Standard TPL–001–4.43
NERC states that Reliability Standard
PRC–012–2 merely adds design,
implementation, and review
requirements ensuring that remedial
action schemes enhance reliability and
do not introduce unintentional or
unacceptable reliability risks.44 NERC
and Joint ISOs state that Reliability
Standard PRC–012–2 does not
42 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at
PP 297–298, 1517–1520.
43 NERC Comments at 4; Joint ISO Comments at
2; EEI Comments at 4.
44 NERC Comments at 5.
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44921
supersede or modify the system
performance requirements of Reliability
Standard TPL–001–4 because
responsible entities must still assume
that all remedial action schemes operate
correctly, guaranteeing a nonconsequential load loss by less than 75
MW.45 Joint ISOs believe that no
clarification to Reliability Standard
PRC–012–2 is necessary; but if the
Commission determines that some
clarification is necessary, the
Commission may confirm that under
Reliability Standard TPL–001–4,
responsible entities can assume that all
remedial action schemes operate as
designed.46 EEI states that while it is
unlikely that the exceptions in
Reliability Standard PRC–012–2 would
be interpreted by industry as exempting
any of the performance requirements in
Reliability Standard TPL–001–4, EEI is
supportive of the proposed clarification
since such clarification would remove
any ambiguity.47
20. NESCOE contends that, absent
confirmation that Reliability Standard
TPL–001–4 allows responsible entities
to assume that all remedial action
schemes operate properly, a clarification
that Reliability Standard PRC–012–2
does not modify or supersede any
system performance obligations under
Reliability Standard TPL–001–4 may be
misinterpreted by entities, requiring
actions that would increase material
costs without benefit.48 NESCO states
that reliability gains must be measured
against the risk and cost associated with
any standard.49
21. NERC states that LAPS in WECC
and Type III remedial actions schemes
in NPCC must be compliant with
Reliability Standard TPL–001–4 before
and after the effective date of proposed
Reliability Standard PRC–012–2.50
According to NERC, Reliability
Standard TPL–001–4 does not
distinguish between different types of
remedial action schemes or exempt
LAPS or Type III remedial action
schemes from any of the performance
requirements.51 NERC and Joint ISOs
state that additional regional controls
that maintain remedial action scheme
compliance with the performance
requirements of Reliability Standard
TPL–001–4 are in place.52
45 Id.
at 5; Joint ISO Comments at 2.
ISO Comments at 2.
47 EEI Comments at 4.
48 NESCO Comments at 2.
49 Id.
50 NERC Comments at 5.
51 Id. at 6.
52 Id.; Joint ISO Comments at 3.
46 Joint
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22. EEI questions the relevancy of
asking the industry to comment on
WECC LAPS or NPCC Type III remedial
action schemes reclassification as
‘‘limited impact’’ remedial action
schemes.53 EEI contends that once the
Commission approves Reliability
Standard PRC–012–2, WECC and NPCC
must be compliant regardless. EEI
believes that insights into processes
ensuring compliance with Reliability
Standard PRC–012–2 are irrelevant.54
Commission Determination
23. We adopt our NOPR proposal and
clarify that Reliability Standard PRC–
012–2 does not modify or supersede any
system performance obligations under
Reliability Standard TPL–001–4. We
agree with and, thus, adopt NERC’s
explanation:
Nothing in proposed Reliability Standard
PRC–012–2 or the designation of a RAS as
‘‘limited impact’’ exempts an entity from
meeting its performance requirements under
[Reliability Standard] TPL–001–4, including
the requirement that Non-Consequential
Load Loss may not exceed 75 MW for certain
Category P1, P2, or P3 contingencies, as
provided in Table 1 and footnote 12 of TPL–
001–4.
In performing the assessments required
pursuant to Reliability Standard TPL–001–4,
an entity must consider all RAS, whether
designated as ‘‘limited impact’’ or not. While
Reliability Standard TPL–001–4,
Requirement R2, Part 2.7.1 recognizes that
entities may use a RAS as a method for
meeting the performance obligations of Table
1, TPL–001–4 does not distinguish between
different types of RAS. As such, entities must
satisfy the performance requirements of TPL–
001–4 considering the actions of ‘‘limited
impact’’ RAS and non-limited impact RAS
alike.55
This clarification should help entities
avoid confusion regarding compliance
obligations when implementing PRC–
012–2.
24. In addition, we accept NERC’s
assurance that LAPS in WECC and Type
III remedial actions schemes in NPCC
must be compliant with Reliability
Standard TPL–001–4 before and after
the effective date of proposed Reliability
Standard PRC–012–2.56
53 EEI
Comments at 5.
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54 Id.
55 NERC Comments at 5. In response to the
requests by Joint ISOs and NESCOE for
confirmation that Reliability Standard TPL–001–4
allows responsible entities to assume that all
remedial action schemes operate properly, the
Commission declines to interpret Reliability
Standard TPL–001–4 in this proceeding. However,
this Final Rule approving Reliability Standard PRC–
012–2 in no way modifies the requirements of
Reliability Standard TPL–001–4 or the compliance
obligations associated with Reliability Standard
TPL–001–4.
56 We note that WECC’s and NPCC’s remedial
action scheme criteria and associated regional terms
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B. Definition of ‘‘Limited Impact’’
Remedial Action Schemes
NOPR
25. The NOPR sought comment on
whether NERC should define the term
‘‘limited impact’’ remedial action
schemes in the NERC Glossary.
Comments
26. NERC, Joint ISOs, and EEI contend
that NERC should not define the term
‘‘limited impact’’ remedial action
scheme in the NERC Glossary.57 NERC
states that it typically develops terms in
the NERC Glossary for one of two
reasons: ‘‘(1) To establish a single
meaning for a term or concept used
across several different Reliability
Standards or multiple times within a
single Reliability Standard, or (2) to
provide for a more readable standard by
creating a shorthand reference to avoid
unnecessary repetition.’’ 58 NERC
contends that neither reason exists for
‘‘limited impact’’ remedial action
schemes.59
27. NERC and EEI maintain that
remedial action schemes vary widely in
complexity and impact on the bulk
electric system.60 NERC and EEI explain
that NERC should not define ‘‘limited
impact’’ remedial action schemes
because not all remedial action schemes
impact the bulk electric system
similarly and the diversity of remedial
action schemes makes it difficult to
establish a common definition for North
America.61
28. NERC, Joint ISOs, and EEI assert
that other comprehensive lists may
establish a baseline definition for
‘‘limited impact’’ remedial action
schemes.62 Joint ISOs note that the
performance criteria described in
Reliability Standard PRC–012–2,
Requirement 4.1.3, footnote 1 provide
an adequate level of guidance.63 MISO
contends that NERC need not define
‘‘limited impact’’ remedial action
scheme in the NERC Glossary.64
29. Bonneville and ITC contend that
NERC should define the term ‘‘limited
impact’’ remedial action schemes in the
NERC Glossary.65Bonneville states that
found in the ‘‘Technical Justification’’ section of
Reliability Standard PRC–012–2 were not submitted
for approval by NERC and as such are not part of
this proceeding.
57 NERC Comments at 8; Joint ISO Comments at
3; EEI at 5.
58 NERC Comments at 8.
59 Id.
60 NERC Comments at 9; EEI Comments at 5.
61 Id.
62 NERC Comments at 9; Joint ISO Comments at
3; EEI Comments at 6.
63 Joint ISO Comments at 3–4.
64 MISO Comments at 6.
65 Bonneville Comments at 2; ITC Comments at 1.
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the footnote in Reliability Standard
PRC–012–2 only reiterates the
substantive requirements of ‘‘limited
impact’’ remedial action schemes under
Requirement R4.3.1 and does not clarify
how ‘‘limited impact’’ remedial action
schemes differ from normal remedial
action schemes.66 Bonneville proposes
the following definition for ‘‘limited
impact’’ remedial action schemes:
A remedial action scheme whose operation
or misoperation only affects the local area
defined by the RAS-entity that owns all of
part of the remedial action scheme and does
not affect the BES of any adjacent
Transmission Owners, Transmission
Operators, Generation Owners, or Generation
Operators.67
ITC also states that the Commission
should issue a directive to NERC to
define ‘‘limited impact’’ remedial action
schemes in the NERC Glossary.68 ITC
states that doing so avoids confusion
while ensuring consistency, facilitates
the use of the term in other Reliability
Standards, and enhances the overall
usefulness of the NERC Glossary.69
Commission Determination
30. We determine not to require NERC
to define ‘‘limited impact’’ remedial
action schemes in the NERC Glossary.
We agree with NERC, Joint ISOs, and
EEI that a definition of ‘‘limited impact’’
remedial action schemes is unnecessary
at this time given the diversity among
the different types, functions, and
placements of remedial action schemes
across North America. In addition, only
Reliability Standard PRC–012–2 uses
the term ‘‘limited impact’’ remedial
action schemes, thus eliminating one of
the principal reasons for normally
including terms in the NERC Glossary
(i.e., to establish a single meaning for a
term or concept used across several
different Reliability Standards). Should
this situation change, the Commission
may reconsider this determination.
C. Other Issues
Comments
31. MISO contends that the
Commission should not approve
Reliability Standard PRC–012–2 as
proposed.70 MISO contends that
oversight of remedial action schemes
would be difficult for reliability
coordinators and planning coordinators
when remedial action schemes span
multiple footprints.71 MISO also
contends that Reliability Standard PRC–
66 Bonneville
Comments at 2.
67 Id.
68 ITC
Comments at 1.
at 2.
70 MISO Comments at 2.
71 Id.
69 Id.
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012–2 creates a geographical variation
in transmission system characteristics
which result in uneven distribution of
coordination burden and duplicative
work on remedial action schemes.72
MISO contends that the planning
assessment performance requirements
in Reliability Standard PRC–012–2 are
better placed in Reliability Standard
TPL–001–4 to avoid redundancies.73
Finally, MISO proposes a five-year
evaluation of remedial action schemes,
which includes a renewal requirement
to benefit efficient operations.74
32. Bonneville contends that
Reliability Standard PRC–012–2,
Requirement R2 gives reliability
coordinators too much time to complete
reviews of remedial action schemes.75
Bonneville states that Reliability
Standard PRC–012–2, Requirement R2
provides reliability coordinators four
calendar months to review a remedial
action scheme.76 Bonneville states that
in the Western Interconnection, these
reviews are currently completed in two
weeks. Bonneville continues that
Reliability Standard PRC–012–2 allows
an additional fourteen weeks for review,
which would prevent Bonneville from
completing remedial action scheme
projects in a timely manner.77
Bonneville proposes that Reliability
Standard PRC–012–2, Requirement R2
should require reliability coordinators
to complete their reviews within four
weeks.78
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Commission Determination
33. MISO’s opposition to Reliability
Standard PRC–012–2 is largely based on
perceived ‘‘inefficiencies’’ created by
the Reliability Standard because it
allegedly lacks regional coordination
between reliability coordinators and
planning coordinators and because of
‘‘redundancies’’ between PRC–012–2
and Reliability Standard TPL–001–4.
We are not persuaded that MISO’s
concerns justify remanding Reliability
Standard PRC–012–2. As discussed
above, we determine that the Reliability
Standard PRC–012–2 satisfies section
215(d)(2) of the FPA in that it is just,
reasonable, not unduly discriminatory
or preferential, and in the public
interest. MISO accepts that Reliability
Standard PRC–012–2 ‘‘shifts
responsibility from the eight Regional
Reliability Organizations (RROs) to
Reliability Coordinators and Planning
72 Id.
at 3.
at 4–5.
74 Id. 6–7.
75 Bonneville Comments at 2.
76 Id.
77 Id. at 3.
78 Id.
73 Id.
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17:24 Sep 26, 2017
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Coordinators’’ and MISO ‘‘agrees that
the Reliability Coordinators and
Planning Coordinators are best
positioned to perform review and
evaluation tasks associated with
RAS.’’ 79 We also note that other
commenters, including Joint ISOs, do
not share MISO’s concerns and support
approval of Reliability Standard PRC–
012–2 as drafted.80 To the extent that
MISO continues to believe that
improvements should be made to
Reliability Standard PRC–012–2, MISO
may pursue any modifications through
the NERC standards development
process.81
34. We are not persuaded by
Bonneville’s comments regarding the
period that reliability coordinators have
to review remedial action schemes.
NERC stated that Reliability Standard
PRC–012–2, Requirement R2 establishes
a comprehensive, consistent review
process that includes a detailed
checklist that reliability coordinators
must use to identify design and
implementation aspects of the remedial
action schemes that are critical to an
effective framework.82 NERC also stated
that allowing four months to complete
this detailed review is consistent with
industry practice, provides adequate
time for a complete review, and
includes additional flexibility for
unique or unforeseen circumstances.83
While four calendar months may be
longer than what is typical in the
Western Interconnection, we determine
that NERC’s proposal is reasonable
because it provides a single, consistent,
continent-wide timeframe for reviews.
Moreover, as Bonneville recognizes,
Reliability Standard PRC–012–2,
Requirement R2 permits entities to use
a mutually agreed upon schedule
instead of the four-month default
timeline provided for in Requirement
R2. Accordingly, Bonneville’s request is
denied on this issue.
79 MISO
Comments at 2.
ISOs Comments at 1.
81 With respect to MISO’s proposal that each
remedial action scheme be renewed every five
years, NERC explained that Reliability Standard
PRC–012–2, Requirement R4 provides for periodic
remedial action scheme evaluations (i.e., at least
every five years) by planning coordinators that will
result in one of three determinations: (1)
Affirmation that the existing remedial action
scheme is effective; (2) identification of changes
needed to the existing remedial action scheme; or
(3) justification for remedial action scheme
retirement. NERC Petition at 21. Provided that the
remedial action scheme is determined to be
effective, is made effective, or retired, we see no
reliability reason to direct inclusion of an
additional renewal sub-requirement.
82 NERC Petition at 17.
83 Id.
80 Joint
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44923
III. Information Collection Statement
35. The collection of information
addressed 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 1995.84
OMB’s regulations require approval of
certain information collection
requirements imposed by agency
rules.85 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.
36. Public Reporting Burden: The
number of respondents below is based
on an examination of the NERC
compliance registry for reliability
coordinators, planning coordinators,
transmission owners, generation
owners, and distribution providers and
an estimation of how many entities from
that registry will be affected by the
proposed Reliability Standard. At the
time of Commission review of
Reliability Standard PRC–012–2, 15
reliability coordinators, 71 planning
coordinators, 328 transmission owners,
930 generation owners, and 367
distribution providers in the United
States were registered in the NERC
compliance registry. However, under
NERC’s compliance registration
program, entities may be registered for
multiple functions, so these numbers
incorporate some double counting. The
Commission notes that many generation
sites share a common generation owner.
37. Reliability Standards PRC–015–1
and PRC–016–1 are in the Reliability
Standards approved in FERC–725A,
(OMB Control No. 1902–0244).
Reliability Standards PRC–015–1 and
PRC–016–1 will be retired when
Reliability Standard PRC–012–2
becomes effective, which will reduce
the burden in FERC–725A.86
38. Reliability Standard PRC–012–2
sets forth Requirements for remedial
action schemes to ensure that remedial
action schemes do not introduce
unintentional or unacceptable reliability
risks to the bulk electric system and are
coordinated to provide the service to the
system as intended. Reliability Standard
PRC–012–2 improves upon the existing
Reliability Standards because it removes
ambiguity in NERC’s original ‘‘fill-inthe-blank’’ Reliability Standards by
assigning responsibility to appropriate
84 44
U.S.C. 3507(d).
CFR 1320.11.
86 The Commission is being conservative and not
subtracting hours at this time from FERC–725A.
85 5
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functional entities. Reliability Standard
PRC–012–2 also streamlines and
consolidates the remedial action scheme
Reliability Standards into one clear,
effective Reliability Standard under
Information Collection FERC–725G.
39. The following table illustrates the
estimated burden to be applied to
FERC–725G information collection.87
FERC–725G IN RM16–20–000
[Mandatory Reliability Standards: Reliability Standard PRC–012–2]
Requirement and
respondent category for PRC–
012–2
Number of
respondents
Number of
responses per
respondent
Total number
of responses
Average burden hours & cost
per response 88
Annual burden hours & total annual cost
(1)
(2)
(1) * (2) = (3)
(4)
(3) * (4) = (5)
57,420 hrs. (38,280 Eng., 19,140 R.K.);
$3,183,556 ($2,461,021 Eng., $722,535
R.K.)
300 hrs. (240 Eng., 60 R.K.); $17,695
($15,430 Eng., $2,265 R.K.)
1,420 hrs. (1,136 Eng., 284 R.K.); $85,754
($73,033 Eng., $10,721 R.K.)
57,420 hrs. (38,280 Eng., 19,140 R.K.);
$3,183,556 ($2,461,021 Eng., $722,535
R.K.)
210 hrs. (150 Eng., 60 R.K.); $11,909 ($9,644
Eng., $2,265 R.K.)
R1. Each RAS-entity (TO, GO,
DP).
1,595
1
1,595
(Eng.) 24 hrs. ($1,543); (R.K.)
12 hrs. ($453).
R2. Each Reliability Coordinator.
R4. Each Planning Coordinator
15
1
15
71
1
71
R5, R6, R7, and R8. Each
RAS-entity (TO, GO, DP).
1,595
1
1,595
(Eng.) 16 hrs. ($1,029); (R.K.)
4 hrs. ($151).
(Eng.) 16 hrs. ($1,029); (R.K.)
4 hrs. ($151).
(Eng.) 24 hrs. ($1,543); (R.K.)
12 hrs. ($453).
R9. Each Reliability Coordinator.
15
1
15
........................
........................
3,291
Total ...................................
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Title: FERC–725A (Mandatory
Reliability Standards); FERC–725G
(Mandatory Reliability Standards: PRC–
012–2).
Action: Revision to existing
collections.
OMB Control No: 1902–0244 (FERC–
725A); 1902–0252 (FERC–725G).
Respondents: Business or other for
profit, and not for profit institutions.
Frequency of Responses: Annually.
Necessity of the Information:
Reliability Standard PRC–012–2 sets
forth Requirements for remedial action
schemes to ensure that remedial action
schemes do not introduce unintentional
or unacceptable reliability risks to the
bulk electric system and are coordinated
to provide the service to the system as
intended.
Internal Review: The Commission has
assured itself, by means of its internal
review, that there is specific, objective
support for the burden estimates
associated with the information
requirements.
40. 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:
87 In the burden table, engineering is abbreviated
as ‘‘Eng.’’ and record keeping is abbreviated as
‘‘R.K.’’
88 The estimates for cost per response are derived
using the following formula: Burden Hours per
Response * $/hour = Cost per Response. The
$64.29/hour figure for an engineer and the $37.75/
hour figure for a record clerk are based on the
average salary plus benefits data from the Bureau
of Labor Statistics.
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17:24 Sep 26, 2017
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(Eng.) 10 hrs. ($653); (R.K.) 4
hrs. ($151).
..................................................
DataClearance@ferc.gov, phone: (202)
502–8663, fax: (202) 273–0873].
41. Comments concerning the
information collection in this Final Rule
and the associated burden estimates
should be sent to the Office of
Management and Budget, Office of
Information and Regulatory Affairs
[Attention: Desk Officer for the Federal
Energy Regulatory Commission]. For
security reasons, comments should be
sent by email to OMB at the following
email address: oira_submission@
omb.eop.gov. Please reference FERC–
725A and FERC–725G and the docket
number of this Final Rule, Docket No.
RM16–20–000, in your submission.
IV. Environmental Analysis
42. 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.89 The action proposed
here falls within the categorical
exclusion in the Commission’s
regulations for rules that are clarifying,
corrective or procedural, for information
gathering, analysis, and
dissemination.90
89 Regulations Implementing the National
Environmental Policy Act of 1969, Order No. 486,
52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs.
Preambles 1986–1990 ¶ 30,783 (1987).
90 18 CFR 380.4(a)(2)(ii).
91 5 U.S.C. 601–612.
92 NOPR, 158 FERC ¶ 61,042 at P 26.
93 The Small Business Administration sets the
threshold for what constitutes a small business.
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116,770 hrs. (78,086 Eng., 38,684 R.K.);
$6,480,470 ($5,020,149 Eng.; $1,460,321
R.K.)
V. Regulatory Flexibility Act
43. The Regulatory Flexibility Act of
1980 (RFA) generally requires a
description and analysis of proposed
rules that will have significant
economic impact on a substantial
number of small entities.91
44. In the NOPR, the Commission
proposed that Reliability Standard PRC–
012–2 will apply to approximately 1681
entities in the United States.92 The
Commission did not receive any
comments on the impact on small
entities. Comparison of the applicable
entities with the Commission’s small
business data indicates that
approximately 1,025 are small entities
or 61 percent of the respondents
affected by proposed Reliability
Standard PRC–012–2.93 The
Commission estimates for these small
entities, Reliability Standard PRC–012–
2 may need to be evaluated and
documented every five years with a cost
of $6,322 for each evaluation. The
Commission views this as a minimal
economic impact for each entity.
Accordingly, the Commission certifies
that Reliability Standard PRC–012–2
will not have a significant economic
impact on a substantial number of small
entities.
Public utilities may fall under one of several
different categories, each with a size threshold
based on the company’s number of employees,
including affiliates, the parent company, and
subsidiaries. For the analysis in this rulemaking, we
apply a 500 employee threshold for each affected
entity. Each entity is classified as Electric Bulk
Power Transmission and Control (NAICS code
221121).
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VI. Document Availability
45. 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.
46. 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.
47. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours from
FERC Online Support at 202–502–6652
(toll free at 1–866–208–3676) or 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
48. The final rule is effective
November 27, 2017. 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. This final rule is
being submitted to the Senate, House,
and Government Accountability Office.
By the Commission.
Issued: September 20, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
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Appendix
Bonneville Power Administration
(Bonneville)
Edison Electric Institute (EEI)
International Transmission Company d/b/a
ITC Transmission, Michigan Electric
Transmission Company, LLC, ITC Midwest
LLC and ITC Great Plains, LLC (together,
ITC)
Midcontinent Independent System Operator,
Inc. (MISO)
New England States Committee on Electricity
(NESCOE)
New York Independent System Operator,
Independent Electricity System Operator,
ISO New England, Inc. and Electric
Reliability Council of Texas, Inc. (together,
Joint ISOs)
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17:24 Sep 26, 2017
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North American Electric Reliability
Corporation (NERC)
[FR Doc. 2017–20669 Filed 9–26–17; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF TREASURY
Internal Revenue Service
26 CFR Part 31
[TD 9824]
RIN 1545–BN58
Withholding on Payments of Certain
Gambling Winnings
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:
This document contains final
regulations with respect to the
withholding from, and the information
reporting on, certain payments of
gambling winnings from horse races,
dog races, and jai alai and on certain
other payments of gambling winnings.
The final regulations affect both payers
and payees of the gambling winnings.
DATES: Effective date: These regulations
are effective on September 27, 2017.
Applicability Dates: For dates of
applicability, see §§ 31.3402(q)–1(g) and
31.3406(g)–2(h).
FOR FURTHER INFORMATION CONTACT:
David Bergman, (202) 317–6845 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
This document contains final
regulations in Title 26 of the Code of
Federal Regulations under section 3402
of the Internal Revenue Code (Code).
The final regulations amend, update,
and clarify the existing withholding and
information reporting requirements for
certain gambling winnings under
§ 31.3402(q)–1 of the Employment Tax
Regulations, and make conforming
changes to § 31.3406(g)–2.
On December 30, 2016, the Treasury
Department and the IRS published a
notice of proposed rulemaking (REG–
123841–16) in the Federal Register, 81
FR 96406, containing proposed
regulations that would provide a new
rule regarding how payers determine the
amount of the wager in parimutuel
wagering transactions with respect to
horse races, dog races, and jai alai, and
that would update the existing rules to
reflect current law regarding the
withholding thresholds and certain
information reporting requirements.
Over 2,700 written public comments
were received in response to the notice
PO 00000
Frm 00047
Fmt 4700
Sfmt 4700
44925
of proposed rulemaking. No public
hearing was requested. After careful
consideration of the written comments,
the proposed regulations are adopted as
modified by this Treasury Decision.
Explanation and Summary of
Comments
All of the written comments on the
notice of proposed rulemaking were
considered and are available at
www.regulations.gov or upon request.
Many of these comments addressed
similar issues and expressed similar
points of view. These comments are
summarized in this preamble.
Rule for Determining the Amount of the
Wager in the Case of Horse Races, Dog
Races, and Jai Alai
The proposed regulations contained a
new rule for determining the amount of
the wager in the case of horse races, dog
races, and jai alai to allow all wagers
placed in a single parimutuel pool and
represented on a single ticket to be
aggregated and treated as a single wager.
Commenters largely supported the
proposed rules because they believe that
the rules accurately and fairly reflect
parimutuel wagering realities.
Some commenters raised concerns
that the single ticket requirement in the
proposed regulations did not address
electronic wagering. Commenters stated
that in horse racing a paper ticket can
only accommodate six separate lines of
bets. In contrast, electronic wagering
utilizes an ‘‘account wagering’’ system
that can accommodate dozens (or even
hundreds) of lines of bets in a single
parimutuel pool, allowing bettors to
place more, customized wagers. As a
result, some commenters requested a
special rule for electronic wagering.
The proposed rule at § 31.3402(q)–
1(c)(1)(ii) is specifically not limited to a
paper ticket, but also includes an
electronic record that is presented to
collect proceeds from a wager or wagers
placed in a single parimutuel pool.
Therefore, the rule in proposed
§ 31.3402(q)–1(c)(1)(ii) is not dependent
on the applicable industry’s ticketing
format. Further, despite the commenters
concern regarding the limits on the
number of lines a paper ticket can
accommodate, the proposed regulations
do not limit the number of bets on a
single ticket nor do the proposed
regulations contain a rule governing the
number of bets that can be contained on
a single, electronic record of a wagering
transaction.
Another commenter stated that the
single ticket requirement puts a person
making an electronic bet at a
disadvantage because it removes the
opportunity to place bets in a single
E:\FR\FM\27SER1.SGM
27SER1
]]>Agencies
[Federal Register Volume 82, Number 186 (Wednesday, September 27, 2017)]
[Rules and Regulations]
[Pages 44918-44925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20669]
=======================================================================
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 40
[Docket No. RM16-20-000; Order No. 837]
Remedial Action Schemes Reliability Standard
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission approves Reliability
Standard PRC-012-2 (Remedial Action Schemes) submitted by the North
American Electric Reliability Corporation. The purpose of Reliability
Standard PRC-012-2 is to ensure that remedial action schemes do not
introduce unintentional or unacceptable reliability risks to the bulk
electric system.
DATES: This rule will become effective November 27, 2017.
FOR FURTHER INFORMATION CONTACT:
Syed Ahmad (Technical Information), Office of Electric Reliability,
Division of Reliability Standards and Security, 888 First Street NE.,
Washington, DC 20426, Telephone: (202) 502-8718, Syed.Ahmad@ferc.gov.
Alan Rukin (Legal Information), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426, Telephone: (202) 502-8502, Alan.Rukin@ferc.gov.
SUPPLEMENTARY INFORMATION:
[[Page 44919]]
Order No. 837
Final Rule
(Issued September 20, 2017)
1. Pursuant to section 215 of the Federal Power Act (FPA), the
Federal Energy Regulatory Commission (Commission) approves Reliability
Standard PRC-012-2 (Remedial Action Schemes).\1\ The North American
Electric Reliability Corporation (NERC), the Commission-certified
Electric Reliability Organization (ERO), submitted Reliability Standard
PRC-012-2 for approval. The purpose of Reliability Standard PRC-012-2
is to ensure that remedial action schemes do not introduce
unintentional or unacceptable reliability risks to the bulk electric
system. In addition, the Commission approves the associated violation
risk factors and violation severity levels, implementation plan, and
effective date proposed by NERC. The Commission also approves the
retirement of currently-effective Reliability Standards PRC-015-1 and
PRC-016-1 as well as NERC's request to withdraw proposed Reliability
Standards PRC-012-1, PRC-013-1, and PRC-014-1, which are now pending
before the Commission.
---------------------------------------------------------------------------
\1\ 16 U.S.C. 824o.
---------------------------------------------------------------------------
I. Background
A. Section 215 and Mandatory Reliability Standards
2. Section 215 of the FPA requires a Commission-certified ERO to
develop mandatory and enforceable Reliability Standards, subject to
Commission review and approval.\2\ Once approved, the Reliability
Standards may be enforced by the ERO subject to Commission oversight or
by the Commission independently.\3\ In 2006, the Commission certified
NERC as the ERO pursuant to section 215 of the FPA.\4\
---------------------------------------------------------------------------
\2\ Id. 824o(c), (d).
\3\ Id. 824o(e).
\4\ North American Electric Reliability Corp., 116 FERC ] 61,062
(ERO Certification Order), order on reh'g and compliance, 117 FERC ]
61,126 (2006), order on compliance, 118 FERC ] 61,190, order on
reh'g, 119 FERC ] 61,046 (2007), aff'd sub nom. Alcoa Inc. v. FERC,
564 F.3d 1342 (D.C. Cir. 2009).
---------------------------------------------------------------------------
B. Order No. 693
3. On March 16, 2007, the Commission issued Order No. 693,
approving 83 of the 107 Reliability Standards filed by NERC, including
Reliability Standards PRC-015-1 (Remedial Action Scheme Data and
Documentation) and PRC-016-1 (Remedial Action Scheme Misoperation).\5\
Reliability Standard PRC-015-1 requires transmission owners, generator
owners, and distribution providers to maintain a listing; retain
evidence of review; and provide documentation of existing, new or
functionally modified special protection systems.\6\ Reliability
Standard PRC-016-1 requires transmission owners, generator owners, and
distribution providers to provide the regional reliability organization
with documentation, analyses and corrective action plans for
misoperation of special protection systems.\7\
---------------------------------------------------------------------------
\5\ 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).
\6\ Id. PP 1529-1533.
\7\ Id. PP 1534-1540.
---------------------------------------------------------------------------
4. In Order No. 693, the Commission determined that then-proposed
Reliability Standard PRC-012-0 was a ``fill-in-the-blank'' Reliability
Standard because, while it would require regional reliability
organizations to ensure that all special protection systems are
properly designed, meet performance requirements, and are coordinated
with other protection systems, NERC had not submitted any regional
review procedures with the proposed Reliability Standard.\8\ Similarly,
the Commission determined that proposed Reliability Standard PRC-013-0
was a ``fill-in-the-blank'' Reliability Standard because, although it
was intended to ensure that all special protection systems are properly
designed, meet performance requirements, and are coordinated with other
protection systems by requiring the regional reliability organization
to maintain a database of information on special protection systems,
NERC had not filed any regional procedures for maintaining the
databases.\9\ Further, the Commission determined that proposed
Reliability Standard PRC-014-0 was a ``fill-in-the-blank'' Reliability
Standard because, while it was proposed to ensure that special
protection systems are properly designed, meet performance
requirements, and are coordinated with other protection systems by
requiring the regional reliability organization to assess and document
the operation, coordination, and compliance with NERC Reliability
Standards and effectiveness of special protection systems at least once
every five years, NERC had not submitted any regional procedures for
this assessment and documentation.\10\ The Commission stated that it
would not approve or remand proposed Reliability Standards PRC-012-0,
PRC-013-0 or PRC-014-0 until NERC submitted the additional necessary
information to the Commission.\11\
---------------------------------------------------------------------------
\8\ Id. PP 1517-18, 1520. The Commission used the term ``fill-
in-the-blank'' standards to refer to proposed Reliability Standards
that required the regional reliability organizations to develop at a
later date criteria for use by users, owners or operators within
each region. Id. P 297.
\9\ Id. PP 1521, 1522, 1524.
\10\ Id. PP 1525, 1526, 1528.
\11\ Id. PP 1520, 1524, 1528.
---------------------------------------------------------------------------
C. Remedial Action Schemes
5. On June 23, 2016, the Commission approved NERC's revision to the
NERC Glossary of Terms Used in NERC Reliability Standards (NERC
Glossary) that redefines special protection system to have the same
definition as remedial action scheme, effective April 1, 2017.\12\ The
NERC Glossary defines remedial action scheme to mean:
---------------------------------------------------------------------------
\12\ N. Am. Elec. Reliability Corp., Docket No. RD16-5-000 (June
23, 2016) (delegated letter order); NERC Glossary, https://www.nerc.com/files/glossary_of_terms.pdf.
A scheme designed to detect predetermined System conditions and
automatically take corrective actions that may include, but are not
limited to, adjusting or tripping generation (MW and Mvar), tripping
load, or reconfiguring a System(s). [Remedial Action Schemes (RAS)]
accomplish objectives such as:
Meet requirements identified in the NERC Reliability
Standards;
Maintain Bulk Electric System (BES) stability;
Maintain acceptable BES voltages;
Maintain acceptable BES power flows;
Limit the impact of Cascading or extreme events.\13\
---------------------------------------------------------------------------
\13\ NERC Glossary, https://www.nerc.com/files/glossary_of_terms.pdf; see also Revisions to Emergency Operations
Reliability Standards; Revisions to Undervoltage Load Shedding
Reliability Standards; Revisions to the Definition of ``Remedial
Action Scheme'' and Related Reliability Standards, Order No. 818,
153 FERC ] 61,228, at PP 24, 31 (2015).
The revised remedial action scheme definition also identifies
fourteen items that do not individually constitute a remedial action
scheme.
D. NERC Petition and Reliability Standard PRC-012-2
6. On August 5, 2016, NERC submitted a petition seeking Commission
approval of proposed Reliability Standard PRC-012-2.\14\ NERC contended
that Reliability Standard PRC-012-2 is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.\15\ NERC
explained that the intent of
[[Page 44920]]
Reliability Standard PRC-012-2 is to supersede ``pending'' Reliability
Standards PRC-012-1, PRC-013-1, and PRC-014-1 and to retire and replace
currently-effective Reliability Standards PRC-015-1 and PRC-016-1.\16\
NERC stated that Reliability Standard PRC-012-2 represents substantial
improvements over these Reliability Standards because it streamlines
and consolidates existing requirements; corrects the applicability of
previously unapproved Reliability Standards; and implements a
continent-wide remedial action scheme review program.\17\
---------------------------------------------------------------------------
\14\ Reliability Standard PRC-012-2 is not attached to this
Final Rule. The Reliability Standard is available on the
Commission's eLibrary document retrieval system in Docket No. RM16-
20-000 and is posted on NERC's Web site, https://www.nerc.com.
\15\ NERC Petition at 2.
\16\ NERC noted that it submitted ``for completeness'' revised
versions of Reliability Standards PRC-012-1, PRC-013-1, and PRC-014-
1 in its petition to revise the definition of remedial action
scheme, but NERC did not request Commission approval of the revised
Reliability Standards in that proceeding. Id. at 1 n.5.
\17\ Id. at 12-13.
---------------------------------------------------------------------------
7. NERC stated that, in the United States, Reliability Standard
PRC-012-2 will apply to reliability coordinators, planning
coordinators, and remedial action scheme-entities. Reliability Standard
PRC-012-2 defines remedial action scheme-entities to include each
transmission owner, generation owner, or distribution provider that
owns all or part of a remedial action scheme.
8. NERC stated that Reliability Standard PRC-012-2 includes nine
requirements that combine all existing (both effective and ``pending'')
Reliability Standards mentioned above into a single, consolidated,
continent-wide Reliability Standard to address all aspects of remedial
action schemes.\18\ NERC explained that all of the requirements in
Reliability Standard PRC-012-1 except R2 are now covered in
Requirements R1, R2, R3, R4, R5, R6, and R8 of Reliability Standard
PRC-012-2.\19\ NERC maintained that Reliability Standard PRC-012-1,
Requirement R2 is ``administrative in nature and does not contribute to
reliability.'' \20\ NERC also stated that it established Reliability
Standard PRC-012-2, Requirement R9 to replace the mandate in
Reliability Standard PRC-013-1 that responsible entities maintain a
remedial action scheme database with pertinent technical information
for each remedial action scheme.\21\ NERC explained that Reliability
Standard PRC-012-2, Requirements R4 and R6 cover the review and the
mandate to take corrective action required by Reliability Standard PRC-
014-1.\22\ NERC stated that it integrated the performance requirements
in Reliability Standard PRC-015-1 into Reliability Standard PRC-012-2,
Requirements R1, R2, and R3.\23\ NERC also asserted that it integrated
the performance requirements in Reliability Standard PRC-016-1 into
Reliability Standard PRC-012-2, Requirements R5, R6, and R7.\24\
---------------------------------------------------------------------------
\18\ Id. at 3.
\19\ Id. at 40.
\20\ Id. at 41.
\21\ Id. at 42.
\22\ Id.at 43.
\23\ Id. at 43-44.
\24\ Id. at 44-45.
---------------------------------------------------------------------------
9. NERC explained how the nine Requirements in Reliability Standard
PRC- 012-2 work together and with other Reliability Standards.
According to NERC, Requirements R1, R2, and R3, together, establish a
process for the reliability coordinator to review new or modified
remedial action schemes.\25\ The reliability coordinator must complete
the review before an entity places a new or functionally modified
remedial action scheme into service.
---------------------------------------------------------------------------
\25\ Id. at 15-18.
---------------------------------------------------------------------------
10. Requirement R4 requires the planning coordinator to perform a
periodic evaluation of each remedial action scheme within its planning
area, at least once every five years.\26\ The evaluation must
determine, inter alia, whether each remedial action scheme: (1)
Mitigates the system conditions or contingencies for which it was
designed; and (2) avoids adverse interactions with other remedial
action scheme and protection systems. Requirement R4, Part 4.1.3
footnote 1 defines a certain subset of remedial action schemes as
``limited impact.'' Requirement R4, Part 4.1.3 footnote 1 states: ``A
RAS designated as limited impact cannot, by inadvertent operation or
failure to operate, cause or contribute to BES Cascading, uncontrolled
separation, angular instability, voltage instability, voltage collapse,
or unacceptably damped oscillations.'' \27\ Further, Requirement R4,
Parts 4.1.3, 4.1.4, and 4.1.5 provide certain exceptions to ``limited
impact'' remedial action schemes. For example, Part 4.1.5 states that:
---------------------------------------------------------------------------
\26\ Id. at 18-22.
\27\ Id. at 19 & n.44.
Except for limited impact RAS, a single component failure in the
RAS, when the RAS is intended to operate does not prevent the BES
from meeting the same performance requirements (defined in
Reliability Standard TPL-001-4 or its successor) as those required
for the events and conditions for which the RAS is designed.\28\
---------------------------------------------------------------------------
\28\ Id. at 19.
NERC explained that Requirement R4 ``does not supersede or modify
[planning coordinator] responsibilities under Reliability Standard TPL-
001-4.'' \29\ NERC continued that even though Part 4.1.5 exempts
``limited impact'' remedial action schemes from certain aspects of
Reliability Standard PRC-012-2, Requirement R4 does not exempt
``limited impact'' remedial actions schemes from meeting each of the
performance requirements in Reliability Standard TPL-001-4.\30\
---------------------------------------------------------------------------
\29\ Id. at 28.
\30\ Id. at 28-29.
---------------------------------------------------------------------------
11. NERC stated that prior to development of Reliability Standard
PRC-012-2, two NERC Regions, the Northeast Power Coordinating Council
(NPCC) and the Western Electric Coordinating Council (WECC), used their
own remedial action scheme classification regimes to identify remedial
action schemes that would meet criteria similar to those for remedial
action schemes described as ``limited impact'' in Reliability Standard
PRC-012-2.\31\ NERC continued that the standard drafting team
identified the Local Area Protection Scheme (LAPS) classification in
WECC and the Type III classification in NPCC as consistent with the
``limited impact'' designation.\32\ According to NERC, remedial action
schemes implemented prior to the effective date of Reliability Standard
PRC-012-2 that have gone through the regional review processes of WECC
or NPCC and that are classified as either a LAPS by WECC or a Type III
by NPCC would be considered a ``limited impact'' remedial action scheme
for purposes of Reliability Standard PRC-012-2.\33\
---------------------------------------------------------------------------
\31\ Id. at 25.
\32\ Id.at 25-26.
\33\ Id. at 26.
---------------------------------------------------------------------------
12. Requirements R5, R6, and R7 pertain to the analysis of each
remedial action scheme operation or misoperation.\34\ A remedial action
scheme-entity must perform an analysis of each remedial action scheme
operation or misoperation and provide the results to the reviewing
reliability coordinator. Further, the remedial action scheme-entity
must develop and submit a corrective action plan to the reviewing
reliability coordinator after learning of a deficiency with its
remedial action scheme, implement the corrective action plan, and
update it as necessary. Requirement R8 requires periodic testing of
remedial action scheme performance: Every six years for normal remedial
action schemes and every 12 years for ``limited impact'' remedial
action schemes.\35\ Requirement R9 requires the reliability coordinator
to annually update its remedial action scheme database.\36\
---------------------------------------------------------------------------
\34\ Id. at 29-34.
\35\ Id. at 34-36.
\36\ Id. at 36-38.
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[[Page 44921]]
13. NERC proposed an implementation plan that includes an effective
date for Reliability Standard PRC-012-2 that is the first day of the
first calendar quarter that is thirty-six months after the date that
the Commission approves the Reliability Standard. Concurrent with the
effective date, the implementation plan calls for the retirement of
currently-effective Reliability Standards PRC-015-1 and PRC-016-1 and
withdrawal of ``pending'' Reliability Standards PRC-012-1, PRC-013-1,
and PRC-014-1.
E. Notice of Proposed Rulemaking
14. On January 19, 2017, the Commission issued a Notice of Proposed
Rulemaking proposing to approve Reliability Standard PRC-012-2.\37\ The
NOPR also proposed to clarify that, consistent with NERC's
representation in its petition, Reliability Standard PRC-012-2 will not
modify or supersede any system performance obligations under
Reliability Standard TPL-001-4.\38\ In addition, the NOPR proposed to
approve the associated violation risk factors and violation severity
levels, implementation plan, and effective date proposed by NERC.\39\
The NOPR further proposed to approve the withdrawal of ``pending''
Reliability Standards PRC-012-1, PRC-013-1, and PRC-014-1 and
retirement of currently-effective Reliability Standards PRC-015-1 and
PRC-016-1, as proposed by NERC.\40\
---------------------------------------------------------------------------
\37\ Remedial Action Schemes Reliability Standard, Notice of
Proposed Rulemaking, 82 FR 9702 (Jan. 19, 2017), 158 FERC ] 61,042
(2017) (NOPR).
\38\ NOPR, 158 FERC ] 61,042 at P 16.
\39\ Id. P 14.
\40\ Id.
---------------------------------------------------------------------------
15. In response to the NOPR, entities filed seven sets of comments.
We address below the issues raised in the NOPR and comments. The
Appendix to this Final Rule lists the entities that filed comments in
response to the NOPR.
II. Discussion
16. Pursuant to section 215(d)(2) of the FPA, we hereby approve
Reliability Standard PRC-012-2.\41\ Reliability Standard PRC-012-2
promotes efficiency and clarity by addressing all aspects of remedial
action schemes in a single, continent-wide Reliability Standard.
Reliability Standard PRC-012-2 enhances reliability by assigning
specific remedial action scheme responsibilities to appropriate
functional entities. Further, Reliability Standard PRC-012-2 improves
reliability by establishing a centralized process to review new or
modified remedial action schemes prior to implementation, by requiring
periodic evaluations, tests, and operational analyses of each remedial
action scheme, and by requiring an annual update of an area-wide
remedial action scheme database. We determine that Reliability Standard
PRC-012-2 satisfies the relevant directives in Order No. 693 for the
ERO to provide additional information regarding review procedures for
remedial action schemes (then called special protection systems) and to
establish continent-wide uniformity.\42\
---------------------------------------------------------------------------
\41\ 16 U.S.C. 824o(d)(2).
\42\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 297-298,
1517-1520.
---------------------------------------------------------------------------
17. We also approve the associated violation risk factors and
violation severity levels, implementation plan, and effective date
proposed by NERC. In addition, we approve, upon the effective date of
Reliability Standard PRC-012-2, the withdrawal of pending Reliability
Standards PRC-012-1, PRC-013-1, and PRC-014-1 and the retirement of
currently-effective Reliability Standards PRC-015-1 and PRC-016-1 due
to their consolidation with proposed Reliability Standard PRC-012-2.
A. Impact of Reliability Standard PRC-012-2 on Compliance With
Reliability Standard TPL-001-4
NOPR
18. The NOPR sought comments on its proposal to clarify that
Reliability Standard PRC-012-2 will not modify or supersede any system
performance obligation under Reliability Standard TPL-001-4. The NOPR
also sought comments on the processes used to ensure LAPS or Type III
remedial action schemes' compliance with Reliability Standard TPL-001-4
prior to the effective date of Reliability Standard PRC-012-2.
Comments
19. NERC, Joint ISOs, and the EEI support the Commission's proposal
to approve Reliability Standard PRC-012-2 with a clarification that it
does not modify or supersede any system performance obligations under
Reliability Standard TPL-001-4.\43\ NERC states that Reliability
Standard PRC-012-2 merely adds design, implementation, and review
requirements ensuring that remedial action schemes enhance reliability
and do not introduce unintentional or unacceptable reliability
risks.\44\ NERC and Joint ISOs state that Reliability Standard PRC-012-
2 does not supersede or modify the system performance requirements of
Reliability Standard TPL-001-4 because responsible entities must still
assume that all remedial action schemes operate correctly, guaranteeing
a non-consequential load loss by less than 75 MW.\45\ Joint ISOs
believe that no clarification to Reliability Standard PRC-012-2 is
necessary; but if the Commission determines that some clarification is
necessary, the Commission may confirm that under Reliability Standard
TPL-001-4, responsible entities can assume that all remedial action
schemes operate as designed.\46\ EEI states that while it is unlikely
that the exceptions in Reliability Standard PRC-012-2 would be
interpreted by industry as exempting any of the performance
requirements in Reliability Standard TPL-001-4, EEI is supportive of
the proposed clarification since such clarification would remove any
ambiguity.\47\
---------------------------------------------------------------------------
\43\ NERC Comments at 4; Joint ISO Comments at 2; EEI Comments
at 4.
\44\ NERC Comments at 5.
\45\ Id. at 5; Joint ISO Comments at 2.
\46\ Joint ISO Comments at 2.
\47\ EEI Comments at 4.
---------------------------------------------------------------------------
20. NESCOE contends that, absent confirmation that Reliability
Standard TPL-001-4 allows responsible entities to assume that all
remedial action schemes operate properly, a clarification that
Reliability Standard PRC-012-2 does not modify or supersede any system
performance obligations under Reliability Standard TPL-001-4 may be
misinterpreted by entities, requiring actions that would increase
material costs without benefit.\48\ NESCO states that reliability gains
must be measured against the risk and cost associated with any
standard.\49\
---------------------------------------------------------------------------
\48\ NESCO Comments at 2.
\49\ Id.
---------------------------------------------------------------------------
21. NERC states that LAPS in WECC and Type III remedial actions
schemes in NPCC must be compliant with Reliability Standard TPL-001-4
before and after the effective date of proposed Reliability Standard
PRC-012-2.\50\ According to NERC, Reliability Standard TPL-001-4 does
not distinguish between different types of remedial action schemes or
exempt LAPS or Type III remedial action schemes from any of the
performance requirements.\51\ NERC and Joint ISOs state that additional
regional controls that maintain remedial action scheme compliance with
the performance requirements of Reliability Standard TPL-001-4 are in
place.\52\
---------------------------------------------------------------------------
\50\ NERC Comments at 5.
\51\ Id. at 6.
\52\ Id.; Joint ISO Comments at 3.
---------------------------------------------------------------------------
[[Page 44922]]
22. EEI questions the relevancy of asking the industry to comment
on WECC LAPS or NPCC Type III remedial action schemes reclassification
as ``limited impact'' remedial action schemes.\53\ EEI contends that
once the Commission approves Reliability Standard PRC-012-2, WECC and
NPCC must be compliant regardless. EEI believes that insights into
processes ensuring compliance with Reliability Standard PRC-012-2 are
irrelevant.\54\
---------------------------------------------------------------------------
\53\ EEI Comments at 5.
\54\ Id.
---------------------------------------------------------------------------
Commission Determination
23. We adopt our NOPR proposal and clarify that Reliability
Standard PRC-012-2 does not modify or supersede any system performance
obligations under Reliability Standard TPL-001-4. We agree with and,
thus, adopt NERC's explanation:
Nothing in proposed Reliability Standard PRC-012-2 or the
designation of a RAS as ``limited impact'' exempts an entity from
meeting its performance requirements under [Reliability Standard]
TPL-001-4, including the requirement that Non-Consequential Load
Loss may not exceed 75 MW for certain Category P1, P2, or P3
contingencies, as provided in Table 1 and footnote 12 of TPL-001-4.
In performing the assessments required pursuant to Reliability
Standard TPL-001-4, an entity must consider all RAS, whether
designated as ``limited impact'' or not. While Reliability Standard
TPL-001-4, Requirement R2, Part 2.7.1 recognizes that entities may
use a RAS as a method for meeting the performance obligations of
Table 1, TPL-001-4 does not distinguish between different types of
RAS. As such, entities must satisfy the performance requirements of
TPL-001-4 considering the actions of ``limited impact'' RAS and non-
limited impact RAS alike.\55\
---------------------------------------------------------------------------
\55\ NERC Comments at 5. In response to the requests by Joint
ISOs and NESCOE for confirmation that Reliability Standard TPL-001-4
allows responsible entities to assume that all remedial action
schemes operate properly, the Commission declines to interpret
Reliability Standard TPL-001-4 in this proceeding. However, this
Final Rule approving Reliability Standard PRC-012-2 in no way
modifies the requirements of Reliability Standard TPL-001-4 or the
compliance obligations associated with Reliability Standard TPL-001-
4.
This clarification should help entities avoid confusion regarding
compliance obligations when implementing PRC-012-2.
24. In addition, we accept NERC's assurance that LAPS in WECC and
Type III remedial actions schemes in NPCC must be compliant with
Reliability Standard TPL-001-4 before and after the effective date of
proposed Reliability Standard PRC-012-2.\56\
---------------------------------------------------------------------------
\56\ We note that WECC's and NPCC's remedial action scheme
criteria and associated regional terms found in the ``Technical
Justification'' section of Reliability Standard PRC-012-2 were not
submitted for approval by NERC and as such are not part of this
proceeding.
---------------------------------------------------------------------------
B. Definition of ``Limited Impact'' Remedial Action Schemes
NOPR
25. The NOPR sought comment on whether NERC should define the term
``limited impact'' remedial action schemes in the NERC Glossary.
Comments
26. NERC, Joint ISOs, and EEI contend that NERC should not define
the term ``limited impact'' remedial action scheme in the NERC
Glossary.\57\ NERC states that it typically develops terms in the NERC
Glossary for one of two reasons: ``(1) To establish a single meaning
for a term or concept used across several different Reliability
Standards or multiple times within a single Reliability Standard, or
(2) to provide for a more readable standard by creating a shorthand
reference to avoid unnecessary repetition.'' \58\ NERC contends that
neither reason exists for ``limited impact'' remedial action
schemes.\59\
---------------------------------------------------------------------------
\57\ NERC Comments at 8; Joint ISO Comments at 3; EEI at 5.
\58\ NERC Comments at 8.
\59\ Id.
---------------------------------------------------------------------------
27. NERC and EEI maintain that remedial action schemes vary widely
in complexity and impact on the bulk electric system.\60\ NERC and EEI
explain that NERC should not define ``limited impact'' remedial action
schemes because not all remedial action schemes impact the bulk
electric system similarly and the diversity of remedial action schemes
makes it difficult to establish a common definition for North
America.\61\
---------------------------------------------------------------------------
\60\ NERC Comments at 9; EEI Comments at 5.
\61\ Id.
---------------------------------------------------------------------------
28. NERC, Joint ISOs, and EEI assert that other comprehensive lists
may establish a baseline definition for ``limited impact'' remedial
action schemes.\62\ Joint ISOs note that the performance criteria
described in Reliability Standard PRC-012-2, Requirement 4.1.3,
footnote 1 provide an adequate level of guidance.\63\ MISO contends
that NERC need not define ``limited impact'' remedial action scheme in
the NERC Glossary.\64\
---------------------------------------------------------------------------
\62\ NERC Comments at 9; Joint ISO Comments at 3; EEI Comments
at 6.
\63\ Joint ISO Comments at 3-4.
\64\ MISO Comments at 6.
---------------------------------------------------------------------------
29. Bonneville and ITC contend that NERC should define the term
``limited impact'' remedial action schemes in the NERC
Glossary.\65\Bonneville states that the footnote in Reliability
Standard PRC-012-2 only reiterates the substantive requirements of
``limited impact'' remedial action schemes under Requirement R4.3.1 and
does not clarify how ``limited impact'' remedial action schemes differ
from normal remedial action schemes.\66\ Bonneville proposes the
following definition for ``limited impact'' remedial action schemes:
---------------------------------------------------------------------------
\65\ Bonneville Comments at 2; ITC Comments at 1.
\66\ Bonneville Comments at 2.
A remedial action scheme whose operation or misoperation only
affects the local area defined by the RAS-entity that owns all of
part of the remedial action scheme and does not affect the BES of
any adjacent Transmission Owners, Transmission Operators, Generation
Owners, or Generation Operators.\67\
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\67\ Id.
ITC also states that the Commission should issue a directive to
NERC to define ``limited impact'' remedial action schemes in the NERC
Glossary.\68\ ITC states that doing so avoids confusion while ensuring
consistency, facilitates the use of the term in other Reliability
Standards, and enhances the overall usefulness of the NERC
Glossary.\69\
---------------------------------------------------------------------------
\68\ ITC Comments at 1.
\69\ Id. at 2.
---------------------------------------------------------------------------
Commission Determination
30. We determine not to require NERC to define ``limited impact''
remedial action schemes in the NERC Glossary. We agree with NERC, Joint
ISOs, and EEI that a definition of ``limited impact'' remedial action
schemes is unnecessary at this time given the diversity among the
different types, functions, and placements of remedial action schemes
across North America. In addition, only Reliability Standard PRC-012-2
uses the term ``limited impact'' remedial action schemes, thus
eliminating one of the principal reasons for normally including terms
in the NERC Glossary (i.e., to establish a single meaning for a term or
concept used across several different Reliability Standards). Should
this situation change, the Commission may reconsider this
determination.
C. Other Issues
Comments
31. MISO contends that the Commission should not approve
Reliability Standard PRC-012-2 as proposed.\70\ MISO contends that
oversight of remedial action schemes would be difficult for reliability
coordinators and planning coordinators when remedial action schemes
span multiple footprints.\71\ MISO also contends that Reliability
Standard PRC-
[[Page 44923]]
012-2 creates a geographical variation in transmission system
characteristics which result in uneven distribution of coordination
burden and duplicative work on remedial action schemes.\72\ MISO
contends that the planning assessment performance requirements in
Reliability Standard PRC-012-2 are better placed in Reliability
Standard TPL-001-4 to avoid redundancies.\73\ Finally, MISO proposes a
five-year evaluation of remedial action schemes, which includes a
renewal requirement to benefit efficient operations.\74\
---------------------------------------------------------------------------
\70\ MISO Comments at 2.
\71\ Id.
\72\ Id. at 3.
\73\ Id. at 4-5.
\74\ Id. 6-7.
---------------------------------------------------------------------------
32. Bonneville contends that Reliability Standard PRC-012-2,
Requirement R2 gives reliability coordinators too much time to complete
reviews of remedial action schemes.\75\ Bonneville states that
Reliability Standard PRC-012-2, Requirement R2 provides reliability
coordinators four calendar months to review a remedial action
scheme.\76\ Bonneville states that in the Western Interconnection,
these reviews are currently completed in two weeks. Bonneville
continues that Reliability Standard PRC-012-2 allows an additional
fourteen weeks for review, which would prevent Bonneville from
completing remedial action scheme projects in a timely manner.\77\
Bonneville proposes that Reliability Standard PRC-012-2, Requirement R2
should require reliability coordinators to complete their reviews
within four weeks.\78\
---------------------------------------------------------------------------
\75\ Bonneville Comments at 2.
\76\ Id.
\77\ Id. at 3.
\78\ Id.
---------------------------------------------------------------------------
Commission Determination
33. MISO's opposition to Reliability Standard PRC-012-2 is largely
based on perceived ``inefficiencies'' created by the Reliability
Standard because it allegedly lacks regional coordination between
reliability coordinators and planning coordinators and because of
``redundancies'' between PRC-012-2 and Reliability Standard TPL-001-4.
We are not persuaded that MISO's concerns justify remanding Reliability
Standard PRC-012-2. As discussed above, we determine that the
Reliability Standard PRC-012-2 satisfies section 215(d)(2) of the FPA
in that it is just, reasonable, not unduly discriminatory or
preferential, and in the public interest. MISO accepts that Reliability
Standard PRC-012-2 ``shifts responsibility from the eight Regional
Reliability Organizations (RROs) to Reliability Coordinators and
Planning Coordinators'' and MISO ``agrees that the Reliability
Coordinators and Planning Coordinators are best positioned to perform
review and evaluation tasks associated with RAS.'' \79\ We also note
that other commenters, including Joint ISOs, do not share MISO's
concerns and support approval of Reliability Standard PRC-012-2 as
drafted.\80\ To the extent that MISO continues to believe that
improvements should be made to Reliability Standard PRC-012-2, MISO may
pursue any modifications through the NERC standards development
process.\81\
---------------------------------------------------------------------------
\79\ MISO Comments at 2.
\80\ Joint ISOs Comments at 1.
\81\ With respect to MISO's proposal that each remedial action
scheme be renewed every five years, NERC explained that Reliability
Standard PRC-012-2, Requirement R4 provides for periodic remedial
action scheme evaluations (i.e., at least every five years) by
planning coordinators that will result in one of three
determinations: (1) Affirmation that the existing remedial action
scheme is effective; (2) identification of changes needed to the
existing remedial action scheme; or (3) justification for remedial
action scheme retirement. NERC Petition at 21. Provided that the
remedial action scheme is determined to be effective, is made
effective, or retired, we see no reliability reason to direct
inclusion of an additional renewal sub-requirement.
---------------------------------------------------------------------------
34. We are not persuaded by Bonneville's comments regarding the
period that reliability coordinators have to review remedial action
schemes. NERC stated that Reliability Standard PRC-012-2, Requirement
R2 establishes a comprehensive, consistent review process that includes
a detailed checklist that reliability coordinators must use to identify
design and implementation aspects of the remedial action schemes that
are critical to an effective framework.\82\ NERC also stated that
allowing four months to complete this detailed review is consistent
with industry practice, provides adequate time for a complete review,
and includes additional flexibility for unique or unforeseen
circumstances.\83\ While four calendar months may be longer than what
is typical in the Western Interconnection, we determine that NERC's
proposal is reasonable because it provides a single, consistent,
continent-wide timeframe for reviews. Moreover, as Bonneville
recognizes, Reliability Standard PRC-012-2, Requirement R2 permits
entities to use a mutually agreed upon schedule instead of the four-
month default timeline provided for in Requirement R2. Accordingly,
Bonneville's request is denied on this issue.
---------------------------------------------------------------------------
\82\ NERC Petition at 17.
\83\ Id.
---------------------------------------------------------------------------
III. Information Collection Statement
35. The collection of information addressed 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.\84\ OMB's
regulations require approval of certain information collection
requirements imposed by agency rules.\85\ 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.
---------------------------------------------------------------------------
\84\ 44 U.S.C. 3507(d).
\85\ 5 CFR 1320.11.
---------------------------------------------------------------------------
36. Public Reporting Burden: The number of respondents below is
based on an examination of the NERC compliance registry for reliability
coordinators, planning coordinators, transmission owners, generation
owners, and distribution providers and an estimation of how many
entities from that registry will be affected by the proposed
Reliability Standard. At the time of Commission review of Reliability
Standard PRC-012-2, 15 reliability coordinators, 71 planning
coordinators, 328 transmission owners, 930 generation owners, and 367
distribution providers in the United States were registered in the NERC
compliance registry. However, under NERC's compliance registration
program, entities may be registered for multiple functions, so these
numbers incorporate some double counting. The Commission notes that
many generation sites share a common generation owner.
37. Reliability Standards PRC-015-1 and PRC-016-1 are in the
Reliability Standards approved in FERC-725A, (OMB Control No. 1902-
0244). Reliability Standards PRC-015-1 and PRC-016-1 will be retired
when Reliability Standard PRC-012-2 becomes effective, which will
reduce the burden in FERC-725A.\86\
---------------------------------------------------------------------------
\86\ The Commission is being conservative and not subtracting
hours at this time from FERC-725A.
---------------------------------------------------------------------------
38. Reliability Standard PRC-012-2 sets forth Requirements for
remedial action schemes to ensure that remedial action schemes do not
introduce unintentional or unacceptable reliability risks to the bulk
electric system and are coordinated to provide the service to the
system as intended. Reliability Standard PRC-012-2 improves upon the
existing Reliability Standards because it removes ambiguity in NERC's
original ``fill-in-the-blank'' Reliability Standards by assigning
responsibility to appropriate
[[Page 44924]]
functional entities. Reliability Standard PRC-012-2 also streamlines
and consolidates the remedial action scheme Reliability Standards into
one clear, effective Reliability Standard under Information Collection
FERC-725G.
39. The following table illustrates the estimated burden to be
applied to FERC-725G information collection.\87\
---------------------------------------------------------------------------
\87\ In the burden table, engineering is abbreviated as ``Eng.''
and record keeping is abbreviated as ``R.K.''
FERC-725G in RM16-20-000
[Mandatory Reliability Standards: Reliability Standard PRC-012-2]
----------------------------------------------------------------------------------------------------------------
Number of Average burden Annual burden
Requirement and respondent Number of responses per Total number hours & cost per hours & total
category for PRC-012-2 respondents respondent of responses response \88\ annual cost
(1) (2) (1) * (2) = (4)............. (3) * (4) = (5)
(3)
----------------------------------------------------------------------------------------------------------------
R1. Each RAS-entity (TO, GO, 1,595 1 1,595 (Eng.) 24 hrs. 57,420 hrs.
DP). ($1,543); (38,280 Eng.,
(R.K.) 12 hrs. 19,140 R.K.);
($453). $3,183,556
($2,461,021
Eng., $722,535
R.K.)
R2. Each Reliability 15 1 15 (Eng.) 16 hrs. 300 hrs. (240
Coordinator. ($1,029); Eng., 60
(R.K.) 4 hrs. R.K.); $17,695
($151). ($15,430 Eng.,
$2,265 R.K.)
R4. Each Planning Coordinator 71 1 71 (Eng.) 16 hrs. 1,420 hrs.
($1,029); (1,136 Eng.,
(R.K.) 4 hrs. 284 R.K.);
($151). $85,754
($73,033 Eng.,
$10,721 R.K.)
R5, R6, R7, and R8. Each RAS- 1,595 1 1,595 (Eng.) 24 hrs. 57,420 hrs.
entity (TO, GO, DP). ($1,543); (38,280 Eng.,
(R.K.) 12 hrs. 19,140 R.K.);
($453). $3,183,556
($2,461,021
Eng., $722,535
R.K.)
R9. Each Reliability 15 1 15 (Eng.) 10 hrs. 210 hrs. (150
Coordinator. ($653); (R.K.) Eng., 60
4 hrs. ($151). R.K.); $11,909
($9,644 Eng.,
$2,265 R.K.)
----------------------------------------------------------------------------------
Total.................... .............. .............. 3,291 ................ 116,770 hrs.
(78,086 Eng.,
38,684 R.K.);
$6,480,470
($5,020,149
Eng.;
$1,460,321
R.K.)
----------------------------------------------------------------------------------------------------------------
Title: FERC-725A (Mandatory Reliability Standards); FERC-725G
(Mandatory Reliability Standards: PRC-012-2).
---------------------------------------------------------------------------
\88\ The estimates for cost per response are derived using the
following formula: Burden Hours per Response * $/hour = Cost per
Response. The $64.29/hour figure for an engineer and the $37.75/hour
figure for a record clerk are based on the average salary plus
benefits data from the Bureau of Labor Statistics.
---------------------------------------------------------------------------
Action: Revision to existing collections.
OMB Control No: 1902-0244 (FERC-725A); 1902-0252 (FERC-725G).
Respondents: Business or other for profit, and not for profit
institutions.
Frequency of Responses: Annually.
Necessity of the Information: Reliability Standard PRC-012-2 sets
forth Requirements for remedial action schemes to ensure that remedial
action schemes do not introduce unintentional or unacceptable
reliability risks to the bulk electric system and are coordinated to
provide the service to the system as intended.
Internal Review: The Commission has assured itself, by means of its
internal review, that there is specific, objective support for the
burden estimates associated with the information requirements.
40. 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: DataClearance@ferc.gov, phone:
(202) 502-8663, fax: (202) 273-0873].
41. Comments concerning the information collection in this Final
Rule and the associated burden estimates should be sent to the Office
of Management and Budget, Office of Information and Regulatory Affairs
[Attention: Desk Officer for the Federal Energy Regulatory Commission].
For security reasons, comments should be sent by email to OMB at the
following email address: oira_submission@omb.eop.gov. Please reference
FERC-725A and FERC-725G and the docket number of this Final Rule,
Docket No. RM16-20-000, in your submission.
IV. Environmental Analysis
42. 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.\89\ The
action proposed here falls within the categorical exclusion in the
Commission's regulations for rules that are clarifying, corrective or
procedural, for information gathering, analysis, and dissemination.\90\
---------------------------------------------------------------------------
\89\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs. Preambles 1986-1990 ] 30,783 (1987).
\90\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------
V. Regulatory Flexibility Act
43. The Regulatory Flexibility Act of 1980 (RFA) generally requires
a description and analysis of proposed rules that will have significant
economic impact on a substantial number of small entities.\91\
---------------------------------------------------------------------------
\91\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------
44. In the NOPR, the Commission proposed that Reliability Standard
PRC-012-2 will apply to approximately 1681 entities in the United
States.\92\ The Commission did not receive any comments on the impact
on small entities. Comparison of the applicable entities with the
Commission's small business data indicates that approximately 1,025 are
small entities or 61 percent of the respondents affected by proposed
Reliability Standard PRC-012-2.\93\ The Commission estimates for these
small entities, Reliability Standard PRC-012-2 may need to be evaluated
and documented every five years with a cost of $6,322 for each
evaluation. The Commission views this as a minimal economic impact for
each entity. Accordingly, the Commission certifies that Reliability
Standard PRC-012-2 will not have a significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------
\92\ NOPR, 158 FERC ] 61,042 at P 26.
\93\ The Small Business Administration sets the threshold for
what constitutes a small business. Public utilities may fall under
one of several different categories, each with a size threshold
based on the company's number of employees, including affiliates,
the parent company, and subsidiaries. For the analysis in this
rulemaking, we apply a 500 employee threshold for each affected
entity. Each entity is classified as Electric Bulk Power
Transmission and Control (NAICS code 221121).
---------------------------------------------------------------------------
[[Page 44925]]
VI. Document Availability
45. 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.
46. 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.
47. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or 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
48. The final rule is effective November 27, 2017. 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. This final rule is being
submitted to the Senate, House, and Government Accountability Office.
By the Commission.
Issued: September 20, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
Appendix
Bonneville Power Administration (Bonneville)
Edison Electric Institute (EEI)
International Transmission Company d/b/a ITC Transmission, Michigan
Electric Transmission Company, LLC, ITC Midwest LLC and ITC Great
Plains, LLC (together, ITC)
Midcontinent Independent System Operator, Inc. (MISO)
New England States Committee on Electricity (NESCOE)
New York Independent System Operator, Independent Electricity System
Operator, ISO New England, Inc. and Electric Reliability Council of
Texas, Inc. (together, Joint ISOs)
North American Electric Reliability Corporation (NERC)
[FR Doc. 2017-20669 Filed 9-26-17; 8:45 am]
BILLING CODE 6717-01-P
