Transmission System Planning Performance Requirements for Extreme Weather, 41262-41287 [2023-13286]

Download as PDF 41262 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 40 [Docket No. RM22–10–000; Order No. 896] Transmission System Planning Performance Requirements for Extreme Weather Federal Energy Regulatory Commission, Department of Energy. ACTION: Final rule. AGENCY: The Federal Energy Regulatory Commission directs the North American Electric Reliability Corporation, the Commission-certified Electric Reliability Organization, to develop a new or modified Reliability Standard no later than 18 months of the SUMMARY: date of publication of this final rule in the Federal Register to address reliability concerns pertaining to transmission system planning for extreme heat and cold weather events that impact the Reliable Operation of the Bulk-Power System. Specifically, we direct the North American Electric Reliability Corporation to develop a new or modified Reliability Standard that requires the following: development of benchmark planning cases based on prior extreme heat and cold weather events and/or future meteorological projections; planning for extreme heat and cold events using steady state and transient stability analyses that cover a range of extreme weather scenarios, including the expected resource mix’s availability during extreme weather conditions and the broad area impacts of extreme weather; and corrective action plans that include mitigation activities for specified instances where performance requirements during extreme heat and cold events are not met. This rule is effective September 21, 2023. FOR FURTHER INFORMATION CONTACT: Mahmood Mirheydar (Technical Information), Office of Electric Reliability, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502– 8034, mahmood.mirheydar@ferc.gov Gonzalo E. Rodriguez (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502– 8568, gonzalo.rodriguez@ferc.gov SUPPLEMENTARY INFORMATION: DATES: Table of Contents lotter on DSK11XQN23PROD with RULES3 Paragraph Nos. Introduction .............................................................................................................................................................................................. II. Background ........................................................................................................................................................................................... A. Legal Authority ............................................................................................................................................................................. B. Reliability Standard TPL–001–5.1 (Transmission System Planning Performance Requirements) .......................................... C. Prior Commission Actions To Address the Reliability Impacts of Extreme Weather .............................................................. D. Notice of Proposed Rulemaking .................................................................................................................................................. III. The Need for Reform .......................................................................................................................................................................... IV. Discussion ........................................................................................................................................................................................... A. Directive to NERC To Develop New or Modified Reliability Standard .................................................................................... B. Develop Benchmark Events and Planning Cases Based on Major Prior Extreme Heat and Cold Weather Events and/or Meteorological Projections ............................................................................................................................................................ 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... C. Definition of ‘‘Wide-Area’’ ........................................................................................................................................................... 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... D. Entities Responsible for Developing Benchmark Events and Planning Cases, and for Conducting Transmission Planning Studies of Wide-Area Events ........................................................................................................................................................ 1. Comments ............................................................................................................................................................................... a. Entity Responsible for Development of Benchmark Events ......................................................................................... b. Entity Responsible for Development of Planning Cases and Conducting Transmission Planning Studies of Wide-Area Events ............................................................................................................................................................ 2. Commission Determination ................................................................................................................................................... a. Entity Responsible for Establishing Benchmark Events ............................................................................................... b. Entities Responsible for Development of Planning Cases and Conducting Transmission Planning Studies of Wide-Area Events ............................................................................................................................................................ E. Coordination Among Registered Entities and Sharing of Data and Study Results .................................................................. 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... F. Concurrent/Correlated Generator and Transmission Outages .................................................................................................... 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... G. Conduct Transmission System Planning Studies for Extreme Heat and Cold Weather Events .............................................. 1. Steady State and Transient Stability Analyses .................................................................................................................... a. Comments ........................................................................................................................................................................ b. Commission Determination ............................................................................................................................................ 2. Sensitivity Analysis ............................................................................................................................................................... a. Comments ........................................................................................................................................................................ b. Commission Determination ............................................................................................................................................ 3. Modifications to the Traditional Planning Approach ......................................................................................................... a. Comments ........................................................................................................................................................................ b. Commission Determination ............................................................................................................................................ H. Implement a Corrective Action Plan if Performance Standards Are Not Met ......................................................................... 1. Comments ............................................................................................................................................................................... a. Jurisdictional Issues ........................................................................................................................................................ b. Corrective Action Plans .................................................................................................................................................. c. Generation and Transmission Capacity Increase and Resource Adequacy Issues ..................................................... VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\23JNR3.SGM 23JNR3 1 8 8 10 14 17 20 25 25 30 32 35 41 44 50 51 53 53 54 58 58 60 63 66 72 78 82 88 95 95 98 111 118 121 124 127 131 134 139 143 143 144 148 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations 41263 Paragraph Nos. d. Notification to Applicable Regulatory Authorities or Governing Bodies Responsible for Retail Electric Service Issues ................................................................................................................................................................................ 2. Commission Determination ................................................................................................................................................... a. Jurisdictional Issues ........................................................................................................................................................ b. Circumstances That Require Corrective Action Plans .................................................................................................. c. Generation and Transmission Capacity Increase and Resource Adequacy Issues ..................................................... d. Notification to Applicable Regulatory Authorities or Governing Bodies Responsible for Retail Electric Service Issues ................................................................................................................................................................................ I. Other Extreme Weather-Related Events and Issues ..................................................................................................................... 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... J. Reliability Standard Development and Implementation Timeline ............................................................................................. 1. Comments ............................................................................................................................................................................... 2. Commission Determination ................................................................................................................................................... V. Information Collection Statement ....................................................................................................................................................... VI. Environmental Analysis ..................................................................................................................................................................... VII. Regulatory Flexibility Act ................................................................................................................................................................. VIII. Document Availability ..................................................................................................................................................................... IX. Effective Date and Congressional Notification ................................................................................................................................. Appendix A: Commenter Names. I. Introduction 1. Pursuant to section 215(d)(5) of the Federal Power Act (FPA),1 the Commission directs the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), to submit a new Reliability Standard or modifications to Reliability Standard TPL–001–5.1 that addresses concerns pertaining to transmission system planning for extreme heat and cold weather events that impact the Reliable Operation 2 of the Bulk-Power System.3 2. We take this action to address challenges associated with planning for extreme heat and cold weather events, particularly those that occur during periods when the Bulk-Power System must meet unexpectedly high demand.4 Extreme heat and cold weather events have occurred with greater frequency in recent years, and are projected to occur with even greater frequency in the 1 16 U.S.C. 824o(d)(5). FPA defines ‘‘Reliable Operation’’ as ‘‘operating the elements of the Bulk-Power System within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a result of a sudden disturbance, including a cybersecurity incident, or unanticipated failure of system elements.’’ 16 U.S.C. 824o(a)(4). 3 The Bulk-Power System is defined in the FPA as ‘‘facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof), and electric energy from generating facilities needed to maintain transmission system reliability. The term does not include facilities used in the local distribution of electric energy.’’ Id. 824o(a)(1). 4 Technical Conference June 1–2, 2021, Climate Change, Extreme Weather, and Electric System Reliability, Docket No. AD21–13–000 (June 1–2, 2021), June 1, 2021 Tr. 26: 3–7 (Derek Stenclik, Founding Partner, Telos Energy, Inc.), 31:7–8 (Judy Chang, Undersecretary of Energy, Massachusetts). lotter on DSK11XQN23PROD with RULES3 2 The VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 future.5 These events have shown that load shed during extreme temperature result in unacceptable risk to life and have extreme economic impact.6 As such, the impact of concurrent failures of Bulk-Power System generation and transmission equipment and the potential for cascading outages 7 that may be caused by extreme heat and cold weather events should be studied and corrective actions should be identified and implemented. 3. At the Commission’s June 1–2, 2021 technical conference on Climate Change, Extreme Weather, and Electric System Reliability, there was consensus among panelists that planners cannot simply project historical weather patterns forward to effectively forecast the future, since climate change has made the use of historical weather observations no longer representative of 5 See e.g., Environmental Protection Agency, Climate Change Indicators: Weather and Climate (May 12, 2021) (EPA Climate Change Indicators), https://www.epa.gov/climate-indicators/weatherclimate (showing an upward trend in extreme heat and cold weather events). NOAA, Adam Smith, 2022 U.S. Billion-dollar Weather and Climate Disasters in Historical Context (Jan. 10, 2023), https://www.climate.gov/news-features/blogs/2022us-billion-dollar-weather-and-climate-disastershistorical-context. 6 FERC, NERC, and Regional Entity Staff, The February 2021 Cold Weather Outages in Texas and the South Central United States, at 9, 192 (Nov. 16, 2021), https://www.ferc.gov/media/february-2021cold-weather-outages-texas-and-south-centralunited-states-ferc-nerc-and (2021 Cold Weather Event Report). 7 NERC Glossary of Terms Used in Reliability Standards (Updated Mar. 8, 2023) (NERC Glossary). NERC defines ‘‘cascading’’ as, the ‘‘uncontrolled successive loss of System Elements triggered by an incident at any location. Cascading results in widespread electric service interruption that cannot be restrained from sequentially spreading beyond an area predetermined by studies.’’ PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 151 152 154 157 161 165 169 170 177 181 182 188 194 196 197 200 203 future conditions.8 For example, extreme summer heat in regions like the Pacific Northwest and extreme winter cold in regions like Texas have increased demand for electricity at times when historically demand has been low.9 As events such as these will likely continue to present challenges in the future, transmission planners and planning coordinators must account for this new reality in their planning processes.10 4. Since 2011, the country has experienced at least seven major extreme heat and cold weather events,11 each of which put stress on the BulkPower System and resulted in some degree of load shed. In some cases, these events nearly caused system collapse 8 June 1, 2021 Tr. 30:2–3 (Chang), 31:12–18 (Lisa Barton, Executive Vice President/Chief Operating Officer, American Electric Power). 9 June 1, 2021 Tr. 31:1–6 (Chang); June 2, 2021 Tr. 72:8–10 (Amanda Frazier, Senior Vice President of Regulatory Policy, Vista Corp.); 9:1–5 (Wesley Yeomans, Vice President of Operations, New York Independent System Operator, Inc. (NYISO)) (noting that in New York the majority of the extreme conditions were cold weather related but that there can be heat waves in New York City, and more heat waves are expected). 10 June 1, 2021 Tr. 35:1–6 (Chang). See also US News, Blackouts in US Northwest Due to Heat Wave, Deaths Reported (June 29, 2021), https:// www.usnews.com/news/business/articles/2021-0629/rolling-blackouts-for-parts-of-us-northwestamid-heat-wave; Judah Cohen et al., Linking Arctic Variability and Change With Extreme Winter Weather in the United States, 373 Sci. 1116, 1120 (2021), (a study connecting the 2021 extreme cold weather event in Texas and the South-central United States to global warming-induced weather anomalies that are likely to continue to produce severe winter storm events). 11 See Transmission System Planning Performance Requirements for Extreme Weather, Notice of Proposed Rulemaking, 87 FR 38,020 (June 27, 2023), 179 FERC ¶ 61,195 at PP 24–36 (2022) (NOPR) (discussing these prior events in detail). E:\FR\FM\23JNR3.SGM 23JNR3 41264 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 and uncontrolled blackouts, which were avoided due to system operator actions. 5. Given the reliability risks associated with extreme heat and cold weather events, including the potential for widespread blackouts, maintaining the reliability of the Bulk-Power System requires transmission system planning to account for the potential impact of extreme heat and cold weather over wide geographical areas, and to consider the changing resource mix. Reliability Standard TPL–001–4 12 was developed to establish transmission system planning performance requirements that ensure that the Bulk-Power System operates reliably over a broad spectrum of system conditions and following a wide range of probable contingencies.13 Both it and its successor, TPL–001–5.1, include provisions for transmission planners and planning coordinators to study system performance under extreme events based on their experience; 14 however, neither standard specifically requires entities to conduct performance analysis for extreme heat and cold weather, despite the fact that such conditions have clearly demonstrated a risk to the Reliable Operation of the Bulk-Power System, thus leaving a reliability gap in system planning. 6. To address this reliability gap, we direct NERC to develop a new or modified Reliability Standard that requires the following: (1) the development of benchmark planning cases based on information such as major prior extreme heat and cold weather events and/or future meteorological projections; (2) planning for extreme heat and cold weather events using steady state and transient stability analyses expanded to cover a range of extreme weather scenarios, including expected availability of the resource mix during extreme heat and cold weather conditions, and including the broad area impacts of extreme heat and cold weather; and (3) the development of corrective action plans that mitigate specified instances where performance requirements during extreme heat and cold weather events are not met. In directing NERC to develop a new or modified Reliability Standard, we are not proposing specific requirements. Instead, we identify concerns that should be addressed by the proposed Reliability Standard. 12 Effective July 1, 2023, Reliability Standard TPL–001–4 will be replaced by Reliability Standard TPL–001–5.1. Unless otherwise specified, the use of Reliability Standard TPL–001–5.1 in this final rule also refers to its predecessor, Reliability Standard TPL–001–4. 13 Reliability Standard TPL–001–5, at 1. 14 Id. at tbl. 1. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 NERC may propose to develop a new or modified Reliability Standard that address our concerns in an equally efficient and effective manner; however, NERC’s proposal should explain how it addresses the Commission’s concerns.15 7. We direct NERC to submit the proposed new or modified Reliability Standard no later than 18 months from the publication of this final rule in the Federal Register. We believe that an 18month deadline provides sufficient time for NERC to develop a responsive Standard in consideration of the issues involved and the steps in NERC’s standards development process. Further, we direct NERC to ensure that the proposed new or modified Reliability Standard becomes mandatory and enforceable beginning no later than 12 months from the effective date of Commission approval of the new or modified Reliability Standard. II. Background A. Legal Authority 8. Section 215 of the FPA provides that the Commission may certify an ERO, the purpose of which is to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval.16 Reliability Standards may be enforced by the ERO, subject to Commission oversight, or by the Commission independently.17 Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO,18 and subsequently certified NERC.19 9. Pursuant to section 215(d)(5) of the FPA, the Commission has the authority, upon its own motion or upon complaint, to order the ERO to submit to the Commission a proposed Reliability Standard or a modification to a Reliability Standard that addresses a specific matter if the Commission 15 See e.g., Mandatory Reliability Standards for the Bulk-Power Sys., Order No. 693, 72 FR 16416 (Apr. 4, 2007), 118 FERC ¶ 61,218, at PP 186, 297, order on reh’g, Order No. 693–A, 72 FR 40717 (July 25, 2007), 120 FERC ¶ 61,053 (2007) (‘‘where the Final Rule identifies a concern and offers a specific approach to address the concern, we will consider an equivalent alternative approach provided that the ERO demonstrates that the alternative will address the Commission’s underlying concern or goal as efficiently and effectively as the Commission’s proposal’’). 16 16 U.S.C. 824o(c). 17 Id. 824o(e). 18 Rules Concerning Certification of the Elec. Reliability Org. & Procedures for the Establishment, Approval, & Enf’t. of Elec. Reliability Standards, Order No. 672, 71 FR 8662 (Feb. 17, 2006), 114 FERC ¶ 61,104, order on reh’g, Order No. 672–A, 71 FR 19814 (Apr. 18, 2006), 114 FERC ¶ 61,328 (2006). 19 N. Am. Elec. Reliability Corp., 116 FERC ¶ 61,062, order on reh’g and compliance, 117 FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009). PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 considers such a new or modified Reliability Standard appropriate to carry out section 215 of the FPA.20 Further, pursuant to § 39.5(g) of the Commission’s regulations, the Commission may order a deadline by which the ERO must submit a proposed or modified Reliability Standard, or when ordering the ERO to submit to the Commission a proposed Reliability Standard that addresses a specific matter.21 B. Reliability Standard TPL–001–5.1 (Transmission System Planning Performance Requirements) 10. Transmission system planning refers to the evaluation of future transmission system performance and creation of corrective action plans that include mitigation to remedy identified deficiencies.22 The planning horizon associated with transmission system planning covers near term (one to five years), long-term (six to ten years), and beyond.23 11. Reliability Standard TPL–001–5.1 establishes minimum transmission system planning performance requirements to plan a Bulk-Power System that will operate reliably over a broad spectrum of system conditions and following a wide range of probable contingencies.24 Under Requirement R2 of Reliability Standard TPL–001–5.1, each transmission planner and planning coordinator must prepare an annual planning assessment for its portion of the Bulk-Power System.25 This planning assessment is required for both nearterm and long-term transmission planning horizons.26 12. Requirements R3 and R4 of Reliability Standard TPL–001–5.1 20 16 U.S.C. 824o(d)(5). CFR 39.5(g) (2022). 22 NERC Glossary (defining ‘‘Planning Assessment’’ as ‘‘documented evaluation of future Transmission System performance and Corrective Action Plans to remedy identified deficiencies’’). 23 Id. (defining ‘‘Near-Term Transmission Planning Horizon’’ and ‘‘Long-Term Transmission Planning Horizon’’). 24 Reliability Standard TPL–001–5.1, Purpose. 25 Id., at Requirement 2. Further, steady-state analyses are a snapshot in time where load and system conditions (e.g., generators, lines, facilities) are modeled as constant (not as changing over time). The analysis will either solve (converge numerically) or not solve (diverge numerically). See IEEE, Transactions on Power Systems, Vol. 19, No. 2, (May 2004) (power system stability is the ability of an electric power system, for a given initial operating condition, to regain a state of operating equilibrium after being subjected to a physical disturbance, with most system variables bounded so that practically the entire system remains intact); see also, Kundur, Prabha, Power System Stability and Control, McGraw Hill, at 26 (1994). 26 See Reliability Standard TPL–001–5.1, at Requirement 2.1 (Near-Term Transmission Planning Horizon) and Requirement R.2.2 (Long-Term Transmission Planning Horizon). 21 18 E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations require in part that planning coordinators and transmission planners conduct steady state and stability studies of pre-specified extreme events and evaluate possible actions designed to reduce the likelihood or mitigate the consequences and adverse impacts of the event(s), if the analysis concludes that the pre-selected extreme events cause cascading outages. 13. Table 1 of Reliability Standard TPL–001–5.1 includes a list of examples of planning events (i.e., Category P1 through P7) 27 for which specific studies may be required based on the entity’s own evaluation that such an event could occur within its operating area. Section 3.a of Table-1 (Steady State & Stability Performance Extreme Events) states that steady state analysis should be conducted for wide-area events affecting the transmission system based on system configuration and how it can be affected by events such as wildfires and severe weather (e.g., hurricanes and tornadoes). In addition, section 3.b serves as a catch-all provision, stating that steady state analysis should be performed for ‘‘other events based upon operating experience that may result in wide-area disturbances.’’ lotter on DSK11XQN23PROD with RULES3 C. Prior Commission Actions To Address the Reliability Impacts of Extreme Weather 14. On June 1 and 2, 2021, the Commission convened a staff-led technical conference on Climate Change, Extreme Weather, and Electric System Reliability.28 The Commission sought to understand, among other things, whether further action from the Commission is needed to help achieve an electric system that can withstand, respond to, and recover from extreme weather events.29 15. In the pre- and post-conference comments, industry experts agreed that extreme weather events are likely to become more severe and frequent in the future.30 They also acknowledged the challenges associated with planning for extreme events, including shifting scheduled maintenance and canceling or recalling transmission and generation assets from scheduled maintenance to meet demand under unexpected 27 Categories P1 through P7 are defined in TPL– 001–5.1 in Table 1—Steady State & Stability Performance Planning Events. 28 Climate Change, Extreme Weather, and Electric System Reliability, Notice of Technical Conference, Docket No. AD21–13–000, at 1 (Mar. 5, 2021). 29 Id. at 2. 30 CAISO Pre-Conference Comments at 1–3; California Public Utilities Commission PreConference Comments at 4; Oregon Public Utilities Commission Pre-Conference Comments at 2–3; NYISO Pre-Conference Comments at 4; AEP PreConference Comments at 5. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 circumstances.31 Further, commenters discussed potential changes to the Reliability Standards to address planning and operational preparedness for energy adequacy risks,32 contingencies related to extreme weather events, and wide-area transmission planning and development challenges, among others.33 Comments also addressed more directly the potential reliability gaps in the existing set of Reliability Standards, including Reliability Standard TPL–001–4, and identified potential solutions.34 16. On August 24, 2021, and February 16, 2023, the Commission approved revised Reliability Standards to address some of the reliability risks posed by extreme cold weather.35 These Reliability Standards, among other things, require generators to implement plans for cold weather preparedness and implement freeze protection measures to mitigate the reliability impacts of extreme cold weather on their generating units. The new and revised standards also require the balancing authority, transmission operator, and reliability coordinator to plan and operate the grid reliably during cold weather conditions by requiring the exchange of certain information related to the generator’s capability to operate under such conditions.36 D. Notice of Proposed Rulemaking 17. On June 26, 2022, the Commission issued the Notice of Proposed Rulemaking (NOPR) proposing to direct NERC to develop a new or modified Reliability Standard to address a lack of a long term planning requirement for extreme heat and cold weather events.37 Specifically, the Commission proposed to direct NERC to develop either modifications to Reliability Standard TPL–001–5.1 or a new Reliability 31 June 2, 2021, Tr. at 21–23 (Wesley Yeomans, Vice President of Operations, NYISO). 32 ISO-New England Inc. Pre-Conference Comments at 10. 33 Midcontinent Independent System Operator (MISO) Pre-Conference Comments at 4–5, 14–17. 34 See e.g., NERC Pre-Conference Comments at 6; MISO Post-Conference Comments at 20; Pacific Gas & Electric Company Pre-Conference Comments at 19–20; PJM Post-Conference Comments at 21; CAISO Post-Conference Comments at 10. 35 N. Am. Elec. Reliability Corp., 176 FERC ¶ 61,119 (2021). The Commission approved proposed Reliability Standards EOP–011–2 (Emergency Preparedness and Operations); IRO– 010–4 (Reliability Coordinator Data Specification and Collection); and TOP–003–5 (Operational Reliability Data) (collectively, the Cold Weather Reliability Standards) and Order Approving Extreme Cold Weather Reliability Standards EOP– 011–3 and EOP–012–1 and Directing Modification of Reliability Standard EOP–012–1, 182 FERC ¶ 61,094 (2023). 36 Id. P 3. 37 NOPR, 179 FERC ¶ 61,195 at P 47. PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 41265 Standard, to require the following: (1) development of benchmark planning cases based on major prior extreme heat and cold weather events and/or meteorological projections; (2) planning for extreme heat and cold weather events using steady state and transient stability analyses expanded to cover a range of extreme weather scenarios including the expected resource mix’s availability during extreme heat and cold weather conditions, and including the wide-area impacts of extreme heat and cold weather; and (3) development of corrective action plans that mitigate any instances where performance requirements for extreme heat and cold weather events are not met.38 18. The NOPR preliminarily found that, based on the wide geographic impacts on the Bulk-Power System of previous extreme heat and cold weather events, the study criteria for extreme heat and cold events should include a consideration of wide-area conditions affecting neighboring regions and their impact on one planning area’s ability to rely on the resources of another region during the weather event.39 19. The NOPR sought comments on all aspects of the proposed directives, including among others: (1) the development of benchmark planning cases; (2) requiring transmission planning studies of wide-area extreme heat and cold events; (3) the study of concurrent generator and transmission outages; (4) the analysis of sensitivities; (5) modifications to current deterministic planning approaches; (6) coordination among registered entities and sharing of study results; (7) requiring entities to implement corrective action plans if performance standards are not met; and (8) whether the final rule should address other extreme weather events beyond heat and cold events. The comment period for the NOPR ended on August 26, 2022, and the Commission received 33 sets of comments.40 III. The Need for Reform 20. Extreme weather-related events that spread across large portions of the country over the past decade demonstrate the challenges to transmission planning from extreme heat and cold weather patterns. The NOPR discussed seven major extreme heat and cold weather events that had 38 Id. P 51. P 67. 40 A list of commenters to the NOPR and the abbreviated names used in this final rule appear in Appendix A. 39 Id. E:\FR\FM\23JNR3.SGM 23JNR3 41266 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 occurred since 2011.41 Of these, four (2011, 2013, 2018, and 2021) were extreme cold weather events that nearly caused system collapse if the operators had not acted to shed load.42 The remaining three events (2014, 2020, and 2021) were extreme heat weather events that resulted in generation losses and varying degrees of load shedding.43 Since the issuance of the NOPR, another extreme cold weather event indicated reliability challenges faced by the BulkPower System. In December 2022, Winter Storm Elliott caused extreme cold conditions that significantly stressed the Bulk-Power System, forcing some utilities to deploy rolling blackouts to preserve Bulk-Power System reliability.44 These extreme heat and cold events demonstrate a risk to Reliable Operation of the Bulk-Power System. 21. While wide-area extreme heat and cold weather events may not occur every year, their frequency and magnitude are expected to increase. The National Oceanic and Atmospheric Administration’s (NOAA) data and analyses show an increasing trend in extreme heat and cold weather events,45 and the U.S. Environmental Protection Agency climate change indicators also show upward trends in heatwave frequency, duration, and intensity.46 NOAA states that climate change is also driving more compound events, i.e., multiple extreme events occurring simultaneously or successively, such as concurrent heat waves and droughts, and more extreme heat conditions in cities.47 22. These conditions have created an urgency to address the negative impact of extreme weather on the reliability of the Bulk-Power System. To that end, the 41 For a full discussion of these extreme weather events, see NOPR, 179 FERC ¶ 61,195 at PP 24–33. 42 See e.g., FERC and NERC Staff Report, Outages and Curtailments During the Southwest Cold Weather Event of February 1–5, 2011, at 7 (Aug. 2011), https://www.ferc.gov/sites/default/files/202005/ReportontheSouthwestColdWeatherEventfrom February2011Report.pdf (impacting nearly 4.4 million electric customers in ERCOT); 2013 PJM Heat Wave Analysis at 5 (impacting approximately 45,000 customers in PJM). 43 See, e.g., 2021 Cold Weather Event Report at 133. 44 FERC, FERC, NERC to Open Joint Inquiry into Winter Storm Elliott (Dec. 2022), https:// www.ferc.gov/news-events/news/ferc-nerc-openjoint-inquiry-winter-storm-elliott. 45 See NOAA., Nat’l Centers for Envtl. Info., U.S. Billion-Dollar Weather and Climate Disasters (2023), https://www.ncei.noaa.gov/access/billions/. 46 U.S. EPA, Climate Change Indicators in the United States (last updated May 2, 2023), https:// www.epa.gov/climate-indicators. 47 NOAA, 2022 U.S. Billion Dollar Weather and Climate Disasters in Historical Context (2023), https://www.climate.gov/news-features/blogs/2022us-billion-dollar-weather-and-climate-disastershistorical-context. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 directives to NERC in this final rule aim to improve system planning specifically for extreme heat and cold weather events. The potential impact of widespread extreme heat and cold events on the reliability of the BulkPower System can be modeled and studied in advance as part of near-term and long-term transmission system planning. Responsible entities could then use the studies to develop transmission system operational strategies or corrective action plans with mitigations that could be deployed in preparation for extreme heat and cold events. 23. The current transmission planning Reliability Standards, however, do not obligate transmission planners and planning coordinators to consider extreme hot and cold weather in their transmission assessments. In particular, Reliability Standard TPL–001–5.1 requires steady state and stability analyses to be performed for certain extreme events but does not require steady state and stability analyses for extreme heat and cold conditions.48 Likewise, while Reliability Standard TPL–001–5.1 Table 1, provisions 2.f (stability) and 3.b (steady state), requires responsible entities to study events based on operating experience that may result in a wide-area disturbance,49 the Standard does not specify the study of extreme heat or cold conditions. 24. System planning measures alone will not eliminate the reliability risk associated with extreme heat and cold events. The directives to improve transmission planning discussed in this final rule will prepare the Bulk-Power System for extreme weather events in the long term and will work together with the requirements in the Cold Weather Reliability Standards to mitigate the near-term reliability impact of extreme weather events. Improved system planning will limit the impact of such events and reduce the risk to the reliability of the Bulk-Power System, which prior events demonstrate is significant. IV. Discussion A. Directive to NERC To Develop New or Modified Reliability Standard 25. Pursuant to FPA section 215(d)(5), we adopt the NOPR proposal and direct NERC to submit a new Reliability Standard or modifications to Reliability Standard TPL–001–5.1 requiring transmission system planning for extreme heat and cold weather events that impact the Reliable Operation of 48 See Reliability Standard TPL–001–5.1, at Requirements R3 and R4 and Table 1. 49 Id. at Table 1, provisions 2.f and 3.b. PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 the Bulk-Power System. For the reasons discussed in section III above, we conclude that it is necessary to update the transmission planning Reliability Standard to reflect the impact of extreme heat and cold weather events on the reliability of the Bulk-Power System. Most commenters support the NOPR proposal to develop mandatory transmission system planning requirements for extreme heat and cold weather events.50 Commenters also agree that Commission action is necessary to address the reliability gaps pertaining to the consideration of extreme heat and cold weather events that exist in current transmission planning processes.51 26. Although supportive of the need to consider extreme weather in the transmission planning process, PJM Interconnection, L.L.C. (PJM) is critical of the Commission’s proposed ‘‘piecemeal’’ approach and suggests that the Commission harmonize this rulemaking with other Commission actions on transmission planning.52 While we agree that it is important for NERC and applicable planning entities to consider how requirements implemented pursuant to this rulemaking may interact with processes carried out pursuant to other Commission actions on transmission planning, we disagree with PJM’s suggestion that this proceeding is not an appropriate forum for directing changes to the NERC Reliability Standards. While there is undoubtedly a nexus between the long-term planning for expected changes in resources and demand as contemplated in Docket No. RM21–17–000 and Reliability Standards for extreme weather, each set of reforms is subject to differing statutory schemes and other considerations, and each aims at related but distinct challenges. The Commission’s transmission planning reform efforts require individual consideration, as they each concern different transmission planning objectives, time horizons, and areas of Commission jurisdiction. This proceeding is conducted pursuant to the Commission’s jurisdiction under section 215 of the FPA and contemplates transmission planning entity actions that may be needed in the planning timeframe of six to ten years and beyond to mitigate the impacts of extreme weather, whereas the proceeding in Docket No. RM21–17–000 was initiated 50 See, e.g., MISO Transmission Owners Comments at 1–2; Indicated Trade Associations Comments at 1–2; NYISO Comments at 1–2; AEP Comments at 1; ACP Comments at 1; PIOs Comments at 1. 51 See, e.g., EPRI Comments at P 4. 52 PJM Comments at 3–4, 7. E:\FR\FM\23JNR3.SGM 23JNR3 lotter on DSK11XQN23PROD with RULES3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations pursuant to the Commission’s jurisdiction under section 206 of the FPA, considers a more fulsome range of practices that may be required to render rates just and reasonable, and contemplates a planning horizon of 20 years.53 While addressing these related efforts in a single proceeding may have benefits, it also would risk complicating the development of solutions and making the process more unwieldy. The Commission has thus determined to take this step to facilitate solutions to one aspect of the extreme weather challenge, as part of a series of actions that build on each other by seeking to address the many areas that affect extreme weather reliability. 27. Accordingly, we adopt the NOPR proposal and direct NERC to develop a new or modified Reliability Standard to require the following: (1) development of benchmark planning cases based on major prior extreme heat and cold weather events and/or meteorological projections; (2) planning for extreme heat and cold weather events using steady state and transient stability analyses expanded to cover a range of extreme weather scenarios including the expected resource mix’s availability during extreme heat and cold weather conditions, and including the wide-area impacts of extreme heat and cold weather; and (3) development of corrective action plans that mitigate specified instances where performance requirements for extreme heat and cold weather events are not met.54 We also direct NERC to identify the responsible entities for developing benchmark planning cases and conducting widearea studies under the new or modified Reliability Standard. 28. Given the importance of timely addressing the identified reliability gap, we direct NERC to submit the responsive new or modified Reliability Standard within 18 months of the date of publication of this final rule in the Federal Register. We further direct NERC to develop a phased-in implementation timeline for the different requirements of the new or modified Reliability Standard (i.e., developing benchmark planning cases, conducting studies, developing corrective action plans) that shall begin within 12 months of the effective date of a Commission order approving the proposed Reliability Standard. 29. We address below in further detail issues raised in the NOPR and in 53 See Building for the Future Through Elec. Reg’l Transmission Planning & Cost Allocation & Generator Interconnection, Notice of Proposed Rulemaking, 87 FR 26504, (May 4, 2022), 179 FERC ¶ 61,028 (2022). 54 NOPR, 179 FERC ¶ 61,195 at P 51. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 41267 comments regarding: (1) development of benchmark events and planning cases; (2) definition of ‘‘wide-area;’’ (3) entities responsible for developing benchmark events and conducting transmission planning studies of wide-area events; (4) coordination among registered entities and sharing of data and study results; (5) concurrent/correlated generator and transmission outages; (6) conducting transmission system planning studies for extreme heat and cold weather events; (7) corrective action plans; (8) other extreme weather events; and (9) Reliability Standard development and implementation timeline. information to be applied to preparing for possible comparable future events, these events would also serve as a basis for effectively using assets and resources. Specifically, once developed, responsible entities would use the benchmark events to develop benchmark planning cases to conduct studies to assess the limitations of the transmission system locally and over a wide-area, and to understand resource availability and potential firm load shedding requirements under stressed conditions.58 The NOPR sought comments on all aspects of the proposed directive. B. Develop Benchmark Events and Planning Cases Based on Major Prior Extreme Heat and Cold Weather Events and/or Meteorological Projections 30. In the NOPR, the Commission proposed to direct NERC to include in the new or modified Reliability Standard benchmark events that responsible entities must study.55 The NOPR proposed basing such benchmark events on prior events (e.g., the February 2011 Southwest Cold Weather Event and the January 2014 Polar Vortex Cold Weather Event) and/or meteorological projections. Recognizing that extreme weather risks may vary from region to region and change over time, the NOPR proposed to direct NERC to consider approaches that would provide a uniform framework for developing benchmark events while still recognizing regional differences; for example, NERC could define benchmark events around a projected frequency (e.g., 1-in-50-year event) or probability distribution (95th percentile event).56 Although the NOPR did not specify how these benchmark events should be developed, the NOPR provided two examples: (1) NERC could develop the benchmark event or events during the standard development process; or (2) NERC could include in the new or modified Reliability Standard a framework establishing a common design basis for the development of benchmark events. The NOPR also suggested including in the modified standard the primary features of the benchmark event(s) while designating NERC or another entity to periodically update benchmark events.57 31. The NOPR also proposed that establishing one or more benchmark planning cases, based on benchmark events, should form the basis for sensitivity analysis. In addition to providing valuable case study 1. Comments 32. Commenters generally agree with the NOPR proposal to direct NERC to develop requirements that address the types of extreme heat and cold weather scenarios that responsible entities are required to study.59 Indicated Trade Associations caution, however, that universal benchmark events would be hard to implement given regional differences.60 As such, and consistent with the NOPR proposal, Indicated Trade Associations, APS, Bonneville Power Administration (BPA), and Idaho Power, among others, agree that regional differences (e.g., climate, topology, electrical characteristics) should be considered in developing benchmark events.61 33. Regarding how benchmark events should be developed, NERC notes that significant work will be necessary to develop a uniform planning approach that properly accounts for regional differences in climate and weather patterns, among other considerations. Accordingly, NERC asks for flexibility in developing benchmark events, including considering options beyond those identified in the NOPR.62 Indicated Trade Associations recommend that NERC consider all the examples of benchmark events identified in the NOPR.63 PJM indicates that developing benchmark events will require scientific and meteorological expertise to ensure that NERC guidelines and criteria reflect statistically valid scenarios for the meteorological projections and their possible impacts on transmission planning. As such, PJM recommends that the Commission engage the national 55 Id. 56 Id. 57 Id. PO 00000 P 52. P 53. Frm 00007 Fmt 4701 Sfmt 4700 58 Id. 59 See, e.g., NERC Comments at 7–8; AEP Comments at 7; Indicated Trade Associations Comments at 8; NARUC Comments at 5. 60 Indicated Trade Associations Comments at 8. 61 See id.; APS Comments at 3; BPA Comments at 3; Idaho Comments at 2. 62 NERC Comments at 8–9. 63 Indicated Trade Associations Comments at 8. E:\FR\FM\23JNR3.SGM 23JNR3 41268 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations labs, Regional Transmission Organizations (RTO), NOAA, and other agencies to develop extreme weather ‘‘design threshold’’ metrics, as well as investigate targeted planning thresholds (e.g., 1-in-50-year events).64 Other commenters highlight the necessity of ensuring that benchmark events are not only developed using historical extreme heat and cold event data, but more importantly use future meteorological projections in order to prepare for plausible extremes in future years.65 34. All those who submitted comments regarding the NOPR proposal to require periodic updates to benchmark events agree with the need to do so. For example, Union for Concerned Scientists (UCS) points to the scientific consensus that climate change is altering the intensity and frequency of extreme weather conditions as a reason to require the periodic update of benchmark events.66 American Electric Power Service Corporation (AEP) recommends updating the benchmark events every three years, consistent with the Commission’s proposed planning cycle for regional transmission planning, based on the most up-to-date data.67 In contrast, Midcontinent Independent System Operator, Inc. (MISO) suggests that, consistent with similar requirements in Reliability Standard TPL–007–4 (Transmission System Planned Performance for Geomagnetic Disturbance Events) and Reliability Standard PRC–006–5 (Automatic Underfrequency Load Shedding) extreme heat and cold weather benchmark events should be updated every five years.68 Other commenters recommend that the key aspects of the benchmark be updated periodically, without opining on the periodicity of updates.69 2. Commission Determination 35. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to: (1) develop extreme heat and cold weather benchmark events, and (2) require the development of benchmark planning cases based on identified benchmark events. Without specific requirements describing the types of heat and cold scenarios that responsible entities must study, the new 64 PJM Comments at 9. e.g., EPRI Comments at P 5; Entergy Comments at 3. 66 UCS Comments at 7. 67 AEP Comments at 3–4 (citing Docket No. RM21–17–000). 68 MISO Comments at 3. 69 See, e.g., APS Comments at 3; Entergy Comments at 4; Indicated Trade Associations Comments at 8. or modified Reliability Standard may not provide a significant improvement upon the status quo. Benchmark events will provide a defined event that will form the basis for assessing system performance during extreme heat and cold weather events. Benchmark events will also form the basis for a planner’s benchmark planning case—i.e., the base case representing system conditions under the relevant benchmark event— that will be used to study the potential wide-area impacts of anticipated extreme heat and cold weather events. 36. Although the NOPR outlined some of the Commission’s expectations for the development of benchmark events, including that benchmark events be based on prior extreme heat and cold events and/or meteorological projections,70 there is currently no established guidance or set of tools in place to facilitate the development of extreme heat and cold benchmark events for the purpose of informing transmission system planning. As recommended by commenters, NERC should consider the examples of approaches for defining benchmark events identified in the NOPR (e.g., the use of projected frequency or probability distribution).71 NERC may also consider other approaches that achieve the objectives outlined in this final rule. Further, as recommended by PJM, we believe there is value in engaging with national labs, RTOs, NOAA, and other agencies and organizations in developing benchmark events. Considering NERC’s key role, technical expertise, and experience assessing the reliability impacts of various events and conditions, we encourage NERC to engage with national labs, RTOs, NOAA, and other agencies and organizations as needed. To that end, as discussed in section IV.J below, we have modified the NOPR proposal to allow more time for NERC to consider these complex issues and engage additional expertise where necessary. 37. Because the impact of most extreme heat and cold events spans beyond the footprints of individual planning entities, it is important that all responsible entities likely to be impacted by the same extreme weather events use consistent benchmark events. Doing so is important to ensuring that neighboring planning regions are assuming similar weather conditions lotter on DSK11XQN23PROD with RULES3 65 See, VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 70 For instance, a benchmark event could be constructed based on data from a major prior extreme heat or cold event, with adjustments if necessary to account for the fact that future meteorological projections may estimate that similar events in the future are likely to be more extreme. 71 See supra P 33. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 and are able to coordinate their assumptions accordingly. As a result, defining the benchmark event in a manner that provides responsible entities significant discretion to determine the applicable meteorological conditions would not meet the objectives of this final rule. 38. At the same time, because different regions experience weather conditions and their impacts differently, a single benchmark event for the entire Nation is unlikely to meet the objectives of this final rule. Accordingly, in developing extreme heat and cold benchmark events, NERC shall ensure that benchmark events reflect regional differences in climate and weather patterns. 39. We also direct NERC to include in the Reliability Standard the framework and criteria that responsible entities shall use to develop from the relevant benchmark event planning cases to represent potential weather-related contingencies (e.g., concurrent/ correlated generation and transmission outages, derates) and expected future conditions of the system such as changes in load, transfers, and generation resource mix, and impacts on generators sensitive to extreme heat or cold, due to the weather conditions indicated in the benchmark events. Developing such a framework would provide a common design basis for responsible entities to follow when creating benchmark planning cases. This would not only help establish a clear set of expectations for responsible entities to follow when developing benchmark planning events, but also facilitate auditing and enforcement of the Standard. 40. We also direct NERC to ensure the reliability standard contains appropriate mechanisms for ensuring the benchmark event reflects up-to-date meteorological data. The increasing intensity, frequency, and unpredictability of extreme weather conditions requires that key aspects of the benchmark events be reviewed, and if necessary, updated periodically to ensure the corresponding benchmark planning cases reflect updated meteorological data. For example, a requirement that defines a fixed benchmark event with no provision for future updates (e.g., defining the benchmark event for a responsible entity as the most severe heat wave in the last twenty years measured from the effective date of the standard) may not provide an accurate indicator of future risks. To the extent NERC determines that the benchmark event should be fixed or only updated E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations periodically,72 we agree with MISO that including a mechanism to update the benchmark event at least every five years would strike a reasonable balance between the benefits of using the most up-to-date meteorological data and administrative the burdens of collecting and analyzing such data. C. Definition of ‘‘Wide-Area’’ 41. In the NOPR, the Commission proposed to direct NERC to require in a new or modified Reliability Standard that transmission planning studies consider the wide-area impacts of extreme heat and cold weather.73 The NOPR explained that the impacts of extreme weather events on the Reliable Operation of the Bulk-Power System can be widespread, potentially causing simultaneous loss of generation and increased transmission constraints within and across regions.74 The NOPR also pointed out that failure to study the wide-area impact of extreme heat or cold weather conditions in transmission planning could result in reliability issues affecting multiple regions or multiple planning coordinator areas remaining undetected in the long-term planning horizon. This, in turn, could lead to otherwise avoidable system conditions that would be only one contingency away from voltage collapse and uncontrolled blackouts.75 42. The NOPR proposed that, based on prior events, the study criteria for extreme heat and cold weather events should consider wide-area conditions affecting neighboring regions and their impact on one planning area’s ability to rely on the resources of another region during the weather event. 43. To identify opportunities for improved wide-area planning studies and coordination, the NOPR sought comments on whether wide-area planning studies should be defined geographically or electrically.76 1. Comments lotter on DSK11XQN23PROD with RULES3 44. AEP, MISO Transmission Owners, and Tri-State Generation and Transmission Association, Inc. (TriState) favor defining wide-area 72 See, e.g., Reliability Standard EOP–012–1 (Extreme Cold Weather Preparedness and Operations), at Requirement 4 (requiring generator owners to calculate the generator extreme cold weather temperature every five years). 73 NOPR, 179 FERC ¶ 61,195 at P 64. 74 Id. 75 Id. P 66. 76 Id. P 67. The NOPR also solicited comment on which entities should oversee and coordinate the wide-area planning models and studies, as well as addressing the results of the studies, and how they should communicate those results among transmission planners. Id. These comments are addressed below in the sections D and E. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 geographically.77 MISO Transmission Owners assert that wide-area must be defined by geography to address issues in each region as best suited for that region, given that extreme heat and cold weather risks, and the appropriate responses thereto, vary by geography.78 Tri-State explains that ‘‘wide-area’’ should be defined geographically, because for a transmission planner to evaluate a large area weather event, it would need to be modeled within the transmission planner’s area, as well as neighboring entities.79 45. Although MISO Transmission Owners support a geographic definition, they also caution that RTO regions, Order No. 1000 planning regions, and NERC Regional Entities do not have identical footprints. Therefore, MISO Transmission Owners recommend that the final rule direct NERC to propose modifications to Reliability Standards to provide appropriately flexible provisions to address scenarios where those inconsistent footprints may introduce conflicts.80 46. Idaho Power, on the other hand, comments that ‘‘wide-area’’ should be defined electrically to better capture the interdependency of systems.81 47. LCRA Transmission Services Corporation (LCRA), Electric Power Research Institute (EPRI), and PJM prefer that ‘‘wide-area’’ be defined both geographically and electrically. LCRA explains that this is necessary to represent the geographic correlation of extreme weather events and the electrical connectivity of the transmission system.82 EPRI cautions that ‘‘geographic definitions of wide area events will need to be developed for inclusion in resource adequacy or production cost models’’ for purposes of identifying the snapshot conditions that should serve as the primary inputs to the transmission planning assessments.83 Further, EPRI explains that ‘‘wide area events defined electrically can be used to represent acute switching events that occur over much shorter timescales and can be used to capture discrete impacts defined as contingency events, which occur concurrent with the extreme temperature condition.’’ 84 48. Other commenters, while not indicating a preference between 77 AEP Comments at 16; MISO Transmission Owners Comments at 4. 78 Id. at 4. 79 Tri-State Comments at 5–6. 80 MISO Transmission Owners Comments at 4. 81 Idaho Power Comments at 4. 82 LCRA Comments at 3; EPRI Comments at P 18; PJM Comments at 10. 83 EPRI Comments at P 18. 84 Id. at 12. PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 41269 electrical or geographical definition, highlight that extreme heat and cold weather events are not bound by the footprint of utilities or authorities that separate planning and balancing areas.85 Indicated Trade Associations recommend that the Commission invest the NERC standard drafting team with substantial discretion in addressing whether and how wide-area planning studies should be defined geographically or electrically.86 49. Although also not stating a preference as to whether to define ‘‘wide-area’’ electrically or geographically, Entergy Services, LLC (Entergy) cautions against expecting transmission planners and coordinators ‘‘to overlap benchmark events between regions’’ because ‘‘[s]uch overlapping could result in modeling of extreme heat and cold events over regions that are much larger than the areas in which such events are likely to occur.’’ 87 2. Commission Determination 50. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to require that transmission planning studies under the new or revised Reliability Standard consider the wide-area impacts of extreme heat and cold weather. We direct NERC to clearly describe the process that an entity must use to define the wide-area boundaries. While commenters provide various views in favor of both a geographical approach and electrical approach to defining wide-area boundaries, we do not adopt any one approach in this final rule. Rather, we believe that this technical matter deserves a more fulsome vetting in the Reliability Standards development process. NERC should consider the comments in this proceeding when developing a new or modified reliability standard that considers the broad area impacts of extreme heat and cold weather.88 D. Entities Responsible for Developing Benchmark Events and Planning Cases, and for Conducting Transmission Planning Studies of Wide-Area Events 51. The NOPR proposed to direct NERC to develop requirements that address the types of extreme heat and 85 UCS Comments at 8; Entergy Comments at 5; EDF at Comments 23; MISO Transmission Owners Comments at 4. 86 Indicated Trade Associations at 10. 87 Entergy Comments at 5–6. 88 Cf., Order No. 693, 118 FERC ¶ 61,218 at P 188 (directing NERC to address NOPR comments suggesting specific new improvements to the Reliability Standards in the standards development process, noting that it ‘‘does not direct any outcome other than that the comments receive consideration.’’). E:\FR\FM\23JNR3.SGM 23JNR3 41270 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations cold scenarios responsible entities are required to study, including the development of benchmark events and benchmark planning cases.89 The NOPR solicited feedback on which entities should be responsible for updating benchmark events and whether, and to what extent, it may be appropriate to allow designated entities to periodically update key aspects of the benchmark events.90 52. As a separate matter, the NOPR proposed to require that transmission planning studies that consider the widearea impacts of extreme heat and cold weather.91 To inform this directive, the NOPR solicited comment on which entities should oversee and coordinate the wide-area planning models and studies, as well as which entities should have responsibility to address the results of the studies.92 1. Comments a. Entity Responsible for Development of Benchmark Events 53. There is no consensus among the commenters regarding which entities should be tasked with developing the benchmark events. Indicated Trade Associations suggest that the subject matter experts on the NERC standard drafting team should develop the benchmark events.93 Entergy also suggests that the NERC develop the benchmark events, as NERC will be able to tailor the benchmark events to reflect regional variations in extreme weather risk.94 All other commenters on this issue proposed that other entities be responsible for benchmark event development.95 For example, New York Independent System Operator, Inc. (NYISO) and MISO Transmission Owners posit that entities registered with NERC as planning coordinators or transmission planners should be given the latitude to develop the benchmark events.96 AEP recommends that each planning coordinator should develop individualized benchmark events for its planning area, except in regions that lack the necessary resources or expertise, in which case the Regional Entities should coordinate and review the benchmark event process in collaboration with these smaller planning coordinators in that region.97 179 FERC ¶ 61,195 at PP 50–51. P 53. 91 Id. P 64. 92 Id. P 67. 93 Indicated Trade Associations Comments at 8. 94 Entergy Comments at 4. 95 See. e.g., EDF Comments at 8. 96 NYISO Comments at 13; MISO Transmission Owners Comments at 5. 97 AEP Comments at 9. American Clean Power Association (ACP) suggests that the Regional Entities should develop the benchmark events that will be evaluated by all transmission planners and planning coordinators in a given region.98 b. Entity Responsible for Development of Planning Cases and Conducting Transmission Planning Studies of WideArea Events 54. Regarding development of benchmark planning cases, beyond existing registered entities, Arizona Public Service Company (APS) recommends ‘‘that a regional planning entity would be the appropriate entity to determine the benchmark planning cases and develop the scenarios that constitute an extreme event in their region.’’ 99 55. Further, commenters suggest a variety of entities to perform the wide area studies. NERC suggests that a registered entity subject to the Reliability Standard, such as a planning coordinator or transmission planner, should be responsible for performing the wide-area studies.100 AEP asserts that the planning coordinators should oversee and coordinate the wide-area planning models and studies, communicate the results, and work to mitigate issues that require corrective action.101 56. APS and MISO Transmission Owners express concern that an individual transmission planner or planning coordinator would not be positioned to perform a wide-area assessment of extreme weather conditions because of its limited geographical visibility.102 Similarly, Entergy also questions whether a single transmission planner would be able to model a wide-area event on its own. Entergy believes that the responsibility for performing the analysis should lie with the RTOs or Regional Entities, with input provided by member transmission owners and transmission planners.103 Alternatively, APS suggested a regional planning entity, such as those created under Order No. 1000, would be appropriate to oversee and coordinate wide-area planning models and studies.104 Idaho Power Company (Idaho Power) asserts that regional planning groups such as Western Power Pool are the ones best positioned to 89 NOPR, lotter on DSK11XQN23PROD with RULES3 90 Id. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 98 ACP Comments at 3. 99 APS Comments at 3. 100 AEP Comments at 20; NERC Comments at 9– 10. 101 AEP Comments at 16. 102 APS Comments at 4; MISO Transmission Owners Comments at 4. 103 Entergy Comments at 6. 104 APS Comments at 4. PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 coordinate and perform the wide-area planning studies.105 57. Environmental Defense Fund (EDF), Tri-State, and Eversource Energy Service Company (Eversource) propose that reliability coordinators should have the responsibility to perform wide-area planning and coordination in collaboration with other impacted reliability coordinators.106 2. Commission Determination a. Entity Responsible for Establishing Benchmark Events 58. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to develop benchmark events for extreme heat and cold weather events through the Reliability Standards development process. We agree with Indicated Trade Associations that the development of adequate benchmark events is critical and should be committed to the subject matter experts on the standards drafting team. We also agree with Entergy that NERC will be able to tailor benchmark events to capture regional differences and the different risks that each region faces during extreme heat and cold weather events. While Regional Entities and reliability coordinators are encouraged to participate in the NERC Reliability Standards development process to develop the benchmark events, we disagree with AEP and other commenters who recommend that entities other than NERC take the lead in the development of benchmark events. 59. Further, requiring NERC to develop the new or modified Reliability Standard’s benchmark events is consistent with the approach the Commission took in Order No. 779, when the Commission directed NERC to develop benchmark events for geomagnetic disturbance analyses.107 For the same reasons, we also conclude that NERC is best positioned to define mechanisms to periodically update extreme heat and cold weather benchmark events, as discussed above.108 b. Entities Responsible for Development of Planning Cases and Conducting Transmission Planning Studies of WideArea Events 60. We also direct NERC to designate the type(s) of entities responsible for 105 Idaho Power Comments at 4. Comments at 23; Tri-State Comments at 6; Eversource Comments at 5. 107 Reliability Standards for Geomagnetic Disturbances, Order No. 779, 143 FERC ¶ 61,147, at P 2 (2013). 108 See supra P 40. 106 EDF E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 developing benchmark planning cases and conducting wide-area studies under the new or modified Reliability Standard. The scope of extreme weather event studies will likely cover large geographical areas far exceeding the smaller individual transmission planner or planning coordinator planning areas. Accordingly, we agree with APS that the benchmark planning cases should be developed by registered entities such as large planning coordinators, or groups of planning coordinators, with the capability of planning on a regional scope.109 61. We also disagree with assertions that reliability coordinators should be responsible for developing benchmark planning cases or conducting wide-area studies. We believe the designated responsible entities should have certain characteristics, including having a widearea view of the Bulk-Power System and the ability to conduct long-term planning studies across a wide geographic area. The responsible entities should also have the planning tools, expertise, processes, and procedures to develop benchmark planning cases and analyze extreme weather events in the long-term planning horizon. Under the NERC functional model, however, reliability coordinators have responsibility for the real-time operation of the bulk-power system. Accordingly, we conclude that reliability coordinators are not well suited for developing benchmark planning cases or conducting wide-area studies. 62. To comply with this directive, NERC may designate the tasks of developing benchmark planning cases and conducting wide-area studies to an existing functional entity or a group of functional entities (e.g., a group of planning coordinators). NERC may also establish a new functional entity registration to undertake these tasks. In the petition accompanying the proposed Reliability Standard NERC should explain how the applicable registered entity or entities meet the objectives outlined above. 109 According to the NERC Registration Matrix, there are currently 211 transmission planners and 66 planning coordinators in the United States. While some of these entities operate over large geographic areas—for example, PJM and MISO are the only planning coordinators in the Reliability First footprint—the majority operate on a much smaller scale—WECC and SERC have 59 planning coordinators, some of which are small cities and counties. NERC, NCR Active Entities List, (last visited Apr. 7, 2023) https://www.nerc.com/pa/ comp/Registration%20and%20Certification%20DL/ NERC_Compliance_Registry_Matrix_Excel.xlsx. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 E. Coordination Among Registered Entities and Sharing of Data and Study Results 63. The NOPR explained that Reliability Standard TPL–001–5.1 crossreferences Reliability Standard MOD– 032–1 (Data for Power System Modeling Analysis), which establishes consistent modeling data requirements and reporting procedures for the development of planning horizon cases necessary to support analysis of the reliability of the interconnected system.110 Reliability Standard MOD– 032–1 ensures an adequate means of data collection for transmission planning. It requires applicable registered entities to provide steadystate, dynamic, and short circuit modeling data to their transmission planner(s) and planning coordinator(s). The modeling data is then shared pursuant to the data requirements and reporting procedures developed by the transmission planner and planning coordinator as set forth in Reliability Standard TPL–001–5.1, Requirement R1. 64. The NOPR stated that, while balancing authorities and other entities must share system information and study results with their transmission planner and planning coordinator pursuant to Reliability Standards MOD– 032–1 and TPL–001–5.1, there is no required sharing of such information related to extreme heat or cold weather events—or required coordination— among planning coordinators and transmission planners with transmission operators, transmission owners, and generator owners.111 Sharing system information and study results and enhancing coordination among these entities for extreme heat and cold weather events could result in more representative planning models by better integrating and including operations concerns (e.g., lessons learned from past issues including corrective actions and projected outcomes from these actions, evolving issues concerning extreme heat/cold) in planning models; and conveying reliability concerns from planning studies (e.g., potential widespread cascading, islanding, significant loss of load, blackout, etc.) as they pertain to extreme heat or cold.112 65. The NOPR proposed to direct NERC to require system information and study results sharing and coordination among planning coordinators and transmission planners with transmission operators, transmission 110 NOPR, 111 Id. 179 FERC ¶ 61,195 at P 80. P 81. 112 Id. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 41271 owners, and generator owners for extreme heat and cold weather events.113 The NOPR solicited comments on whether existing Reliability Standards are sufficient to ensure that responsible entities performing studies of extreme heat and cold weather events have the necessary data, and/or whether the Commission should direct additional changes pursuant to FPA section 215(d)(5) to address the issue.114 The NOPR also sought comments on the following: (1) the parameters and timing of coordination and sharing; (2) specific protocols that may need to be established for efficient coordination practices; and (3) potential impediments to the proposed coordination efforts. 1. Comments 66. There is no consensus among commenters on whether Reliability Standards TPL–001.5.1 and MOD–032– 1 are adequate means of data collection for transmission planning, with some commenters raising concerns about the types of data that will be needed to conduct extreme heat and cold weather studies under the new or modified Reliability Standard and whether such data can be obtained through existing processes. 67. For example, NERC and Idaho Power believes that the existing standards are sufficient.115 According to NERC, the Commission does not need to direct revisions to Reliability Standard MOD–032–1 to account for new data required for extreme heat and cold weather studies because the standard requires functional entities to provide ‘‘other information requested by the Planning Coordinator or Transmission Planner necessary for modeling purposes’’ for each of the three types of data required (steady-state, dynamics, and short circuit).116 Thus, NERC asserts that planning coordinators and transmission planners are empowered to request any specific data needed for studies of extreme heat and cold conditions. According to Idaho Power, because (1) utilities currently share contingencies to be studied with neighboring entities to get feedback and make updates as needed and (2) utilities share TPL–001 reports with other utilities subject to the execution of a non-disclosure agreement, the Commission proposal would be redundant of current practice.117 113 Id. P 82. P 63. 115 NERC Comments at 13; Idaho Power Comments at 5. 116 NERC Comments at 13. 117 Idaho Power Comments at 5. 114 Id. E:\FR\FM\23JNR3.SGM 23JNR3 41272 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 68. In contrast, Tri-State indicates that there is no requirement for transmission customers to provide data for extreme heat and cold weather conditions such as load forecast data.118 AEP asserts that planning coordinators and transmission planners have limited insight into a generator’s likelihood of availability during extreme weather events, particularly limited for inverter-based resources.119 EPRI states that there is limited modeling of protection systems in dynamic assessments currently, and any dynamic simulation of extreme events would require significant modeling of protection systems to provide for convergence of the numerical simulation.120 NYISO notes that Reliability Standard TPL–001 currently limits transmission planners or planning coordinators to requesting data pertaining to their own planning area.121 69. Other commenters suggest that it will be necessary to define the data needed by responsible entities to perform studies under the new or modified Reliability Standard. AEP proposes that the Commission hold a technical conference to help define the data needed to perform the extreme weather assessments and the avenue through which information will be shared.122 Indicated Trade Associations recommend that, although Reliability Standard MOD–032–1 might be adequate as a data source, the Commission should recognize in any final rule that the standard drafting team should be tasked with identifying what data is already collected and specifying what new data is needed to perform the assessments for extreme heat and cold.123 70. Regarding the sharing of study results and coordination among entities, Tri-State suggests that the balancing authority should address the results of the studies and how they should communicate those results among the transmission planners. Tri-State also asserts that the balancing authority is responsible for resource adequacy and should communicate resource needs for the area with the responsible transmission planners who can evaluate system needs and ‘‘provide access to remove’’ resource needs.124 EPRI does not opine on who should do the widearea coordination, but states that some level of coordination will be required to 118 Tri-State Comments at 4–5. Comments at 15. 120 EPRI Comments at P 11. 121 NYISO Comments at 14. 122 AEP Comments at 4. 123 Indicated Trade Associations Comments at 9– 10. 124 Tri-State Comments at 6. 119 AEP VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 ensure accurate assessments of wide area events that impact geographic footprints across multiple planning entities.125 UCS suggests that the final rule should direct the sharing of modeling information between planning areas regarding extreme weather benchmark events, because ensuring reliability will depend on the extent to which neighboring regions cooperate.126 71. NERC asserts that while wide-area studies should be coordinated as appropriate for the area, the specific procedural details for coordination on wide-area studies do not need to be mandated in a Reliability Standard. NERC adds that other coordination requirements, such as those related to sharing of study results and coordination for corrective actions across multiple transmission planner areas, can be addressed through the standard development process with consideration of any factors identified by the commenters in this proceeding.127 Similarly, Indicated Trade Associations recommend that the Commission empower the standards drafting team to consider whether coordination between a variety of functional entities, and across regions, would be the most effective means of addressing certain identified extreme heat and cold weather events.128 2. Commission Determination 72. Pursuant to section 215(d)(5) of the FPA, we adopt and modify the NOPR proposal and direct NERC to require functional entities to share with the entities responsible for developing benchmark planning cases and conducting wide-area studies the system information necessary to develop benchmark planning cases and conduct wide-area studies. Further, responsible entities must share the study results with affected transmission operators, transmission owners, generator owners, and other functional entities with a reliability need for the studies.129 73. We agree with commenters that Reliability Standard MOD–032–1 allows for data collection for extreme heat and 125 EPRI Comments at P 19. Comments at 8. 127 NERC Comments at 10. 128 Indicated Trade Associations Comments at 5. 129 The NOPR proposed to direct NERC to ensure that functional entities share necessary system information with planning coordinators and transmission planners, as these entities conduct current transmission planning studies under TPL– 001–5.1. Because this final rule directs NERC to determine the entities that will be responsible for conducting studies under the new or modified Reliability Standard, we modify the NOPR accordingly to ensure the selected responsible entity has the means to request and receive necessary system information. 126 UCS PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 cold weather events. However, only planning coordinators and transmission planners can request data from other entities through Reliability Standard MOD–032–1 processes. Because in this final rule we direct NERC to determine the responsible entities that will be developing benchmark planning cases and conducting wide-area studies, it is possible that the selected responsible entities under the new or modified Reliability Standard will not be able to request and receive needed data pursuant to MOD–032–1, absent modification to that Standard. 74. Regarding EPRI’s statement of insufficiency of dynamic modeling of protection systems, we consider the insufficiency of protection system modeling to be an ongoing deficiency in the modeling process. The dynamics databases used for transient stability simulations by various interconnections typically do not include comprehensive dynamic models of relays installed in the interconnection. Thus, in addressing our directive above, NERC should evaluate this deficiency during the standard development process. 75. We disagree with UCS’s recommendation that the final rule should direct the sharing of modeling information between planning areas regarding extreme weather benchmark events. We expect that the existing practice (e.g., MOD–032–1) of responsible entities sharing modeling information between planning areas will continue, without the need for us to specifically direct that in this final rule. 76. Rather than predetermine each aspect of the coordination process, we believe the decision of which entities are best positioned for wide-area coordination should be left to NERC. We therefore direct NERC to address the requirement for wide-area coordination through the standard development process, giving due consideration to relevant factors identified by commenters in this proceeding. 77. We agree with NERC and Indicated Trade Associations that coordination requirements, such as those related to the sharing of study results and corrective actions across multiple transmission planner areas, are best addressed through the standard development process, which we expect will consider relevant factors identified by the commenters in this proceeding. Although this final rule does not specify how study results must be shared, we believe that the new or modified Reliability Standard must require responsible entities to share these studies with affected functional entities. The sharing of study results will alert entities of reliability concerns identified E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations in wide-area studies.130 Further, requiring responsible entities to share study results with functional entities with a reliability related need for the study is consistent with existing planning assessment sharing requirements under Reliability Standard TPL–001–5.1.131 Therefore, we direct NERC to require in the new or modified Reliability Standard that responsible entities share the results of their widearea studies with other registered entities such as transmission operators, transmission owners, and generator owners that have a reliability related need for the studies. lotter on DSK11XQN23PROD with RULES3 F. Concurrent/Correlated Generator and Transmission Outages 78. The NOPR stated that generation resources that are sensitive to severe weather conditions may cease operation during extreme heat and cold events, thus contributing to wide-area concurrent outages. In addition, the NOPR indicated that extreme heat could lead to significant derating, reduced lifetime, or failure of power transformers, while extreme cold could lead to at least temporary transmission facility outages.132 79. As such, the NOPR posited that modeling the loss of these generators and transmission equipment during extreme heat and cold weather events would allow planners to assess the effects of potential concurrent transmission and generator outages and study the feasibility (i.e., availability and deliverability) of external generation resources that could possibly be imported to serve load during such events, thereby minimizing the potential impact of extreme heat and cold events on customers.133 In addition, the NOPR indicated that modeling concurrent generator and transmission outages would also allow planners to better identify appropriate solutions to be incorporated into corrective action plans.134 80. The NOPR also proposed that accounting for concurrent outages including modeling the derating and possible loss of wind and solar generators, as well as natural gas generators sensitive to extreme heat and cold conditions in planning studies would provide a more realistic assessment of system conditions (i.e., updated conditions based on historic benchmarked performance) during potential extreme heat and cold events and will help better assess the probability of potential occurrences of cascading outages, uncontrolled separation, or instability. Thus, the NOPR suggested that requiring transmission planners and planning coordinators to study concurrent generator and transmission failures under extreme heat and cold events to account for the expected resource mix’s availability during these extreme conditions is one way to address the reliability gap in Reliability Standard TPL–001–5.1.135 81. To identify the scope of these planning studies, the NOPR sought comments on the following: (1) the assumptions (e.g., weather forecast, load forecast, transmission voltage levels, generator types, multi-day low wind, and solar events) used in modeling of concurrent outages due to extreme heat and cold weather events; (2) what assumptions should be included when performing modeling and planning for generators sensitive to extreme heat and cold; (3) how the impact of loss of generators sensitive to extreme heat and cold should be factored into long-term planning; (4) the extent of neighboring systems’ or planning areas’ outages that should be modeled in transmission planning studies; and (5) whether a certain threshold penetration of wind, solar, and natural gas generation should trigger additional analyses.136 pipeline into a region or multiple regions that have significant gas-fired generation, the standard could be modified to include the impact of renewable energy resource response due to extreme weather as well.139 While agreeing with the NOPR proposal, Public Interest Organizations (PIOs) and ACP argue that any requirement to study concurrent or correlated generation outages should be extended to conventional generators to account for the reliability risk and to eliminate undue discrimination caused by overstating the reliability contributions of conventional generators relative to renewable and storage resources.140 83. Some commenters assert that the NOPR proposal on modeling the effects of potential concurrent transmission and generator outages might be unnecessary. ISO New England Inc. (ISO–NE) takes issue with including the expected resource mix’s availability during extreme weather conditions as part of extreme weather scenarios. ISO– NE asserts that resource mix availability should not be addressed in a transmission planning standard because it is addressed as part of resource adequacy assessment and other Reliability Standards, such as the Cold Weather Reliability Standards. Further, ISO–NE argues that transmission planning Reliability Standards need to consider resource availability in planning cases, because generators will be required to be ready to perform in 1. Comments extreme weather events under those 82. Commenters mostly agree with the other standards.141 EPRI asks if the NOPR that responsible entities should Commission intends for the concurrent evaluate the risk of correlated or outages of generation and transmission concurrent outages and derates of all assets to be modeled as an acute event, types of generation resources (i.e., conventional and renewables) as well as and if so, requests clarification as to transmission facilities related to extreme how it differs from the P3 category of contingency events from TPL–001– weather events.137 For example, the 5.1.142 Federal Energy Advocate for the Public 84. NYISO recommends that, as the Utilities Commission of Ohio (Ohio extreme events in Reliability Standard FEA) recommends that the Standard TPL–001–5.1 are analogous to extreme incorporate asset correlations and contingencies rather than extreme interdependencies, and consider the system conditions such as heatwaves, extent to which they can be obviated or cold snaps, droughts, etc., NERC mitigated because asset performance or planning events should be expanded to failure is highly correlated with their include the weather-related loss of dependency on weather conditions and generation across areas of the system in on the performance of nearby or related 138 infrastructure. Idaho Power notes that the design-basis contingencies rather 143 while Reliability Standard TPL–001–5.1 than as an extreme contingency. already addresses the loss of multiple 139 Idaho Power Comments at 4. generating stations resulting from 140 PIOs Comments at 23–24. conditions such as the loss of a large gas 141 ISO–NE Comments at 2–4. 135 Id. 130 NOPR, 179 FERC ¶ 61,195 at P 81. 131 See Reliability Standard TPL–001–5.1, Requirement R8. 132 NOPR, 179 FERC ¶ 61,195 at P 68. 133 Id. P 69. 134 Id. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 41273 P 72. 136 Id. 137 EDF Comments at 22; ACP Comments at 5; PIOs Comments at 9; AEP Comments at 4; UCS Comments at 12; and Americans for Clean Energy Grid Comments at 6 (ACEG Comments). 138 Ohio FEA Comments at 5. PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 142 EPRI Comments at PP 20–21. Category P3 requires the study of the loss of a generator unit followed by system adjustments, followed by a loss of one of the following: generator or transmission circuit or transformer or shunt device or single pole of a DC line as stated in Reliability Standard TPL– 001.5.1, Table 1. 143 NYISO Comments at 13. E:\FR\FM\23JNR3.SGM 23JNR3 41274 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations 85. Regarding modeling assumptions, LCRA asserts that the Standard should not be prescriptive regarding the modeling assumptions, particularly concerning generation availability, beyond developing the study base case when available generation is insufficient to meet the load with respect to extreme weather events.144 LCRA also cautions that modeling too many outages will result in an unsolvable case that cannot be analyzed.145 86. While no comments recommended any specific threshold of penetration of renewable resources that would trigger additional analysis, PJM notes that special studies may be needed as greater numbers of renewable, inverter-based resources (IBR), connect to the Bulk-Power System. With a much higher IBR penetration level, a more material change to dynamic and steady state assessment will likely be needed to capture the impacts of higher penetration levels of IBRs and much reduced conventional generation support.146 APS, however, suggests that the Commission should not set a penetration threshold, arguing that the entity performing the study should determine the threshold, which likely would differ depending on the characteristics of the particular system.147 87. Electric Power Supply Association (EPSA) suggests that the Commission direct NERC to examine how it defines and measures its resource adequacy benchmarks, including the impacts of non-dispatchable resources with increasing penetration in the system and the availability of dispatchable, flexible resources which are increasingly being replaced by new, less flexible resources or technologies.148 lotter on DSK11XQN23PROD with RULES3 2. Commission Determination 88. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to require under the new or revised Reliability Standard the study of concurrent/correlated generator and transmission outages due to extreme heat and cold events in benchmark events as described in more detail below. 89. We disagree with comments suggesting that the modeling of concurrent/correlated generator and transmission outages is unnecessary.149 As discussed in the NOPR, and reinforced by commenters, the failures 144 LCRA Comments at 3. 146 PJM Comments at 11. Comments at 5. 148 EPSA Comments at 3. 149 See, e.g., ISO–NE Comments at 2–4. 147 APS 19:38 Jun 22, 2023 150 NOPR, 179 FERC ¶ 61,195 at P 70. PP 70–71. 152 See supra P 82. 153 This understanding is consistent with section 215(a)(1) of the FPA, 16 U.S.C. 824o(a)(1), which defines Bulk-Power System to include ‘‘electric energy from generation facilities needed to maintain transmission system reliability.’’ 151 Id. 145 Id. VerDate Sep<11>2014 of individual generators during extreme weather events are not independent.150 Previous extreme weather events have demonstrated that there is a high correlation between generator outages and cold temperatures, indicating that as temperatures decrease, unplanned generator outages and derates increase.151 Because of this correlation, it is necessary that responsible entities evaluate the risk of correlated or concurrent outages and derates of all types of generation resources and transmission facilities as a result of extreme heat and cold events, as commenters suggest.152 90. Further, we disagree with ISO–NE that resource mix availability should not be considered here because it is considered in resource adequacy planning and in other Reliability Standards. Although resource outages are an important input into the resource adequacy studies, they are also an important determinant in assessing the adequacy of the transmission system.153 Therefore, it will be necessary to consider the impact of extreme weather events on generators anticipated to be connected to the subject transmission system during the study period. Similarly, although the Cold Weather Reliability Standards require generators to be prepared to be available and perform at or above their extreme cold weather temperature during extreme weather events, generator availability is not guaranteed by any Reliability Standard, and outages occur for many reasons. Accordingly, some generators may still be unavailable under extreme heat or cold conditions and thus their potential outages must be considered in extreme heat and cold weather planning scenarios. 91. Although several commenters ask for flexibility as to modeling assumptions, we believe that it is necessary for the Reliability Standard to strike a balance between allowing responsible entities discretion to ensure the study incorporates their operating experience and the need to create a robust framework that ensures extreme heat and cold events are adequately studied. Thus, while generation and transmission availability and concurrent outages must be included in the benchmark planning case, we defer to NERC to develop the framework and criteria that responsible entities shall Jkt 259001 PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 use to represent potential weatherrelated contingencies (e.g., concurrent/ correlated generation and transmission outages, derates) in the relevant benchmark event planning cases.154 92. Regarding the comments of NYISO and EPRI on the difference between extreme events and contingencies covered under Reliability Standard TPL–001–5.1, we clarify that all contingencies included in benchmark planning cases under the new or modified Reliability Standard will represent initial conditions for extreme weather event planning and analysis. These contingencies (i.e., correlated/ concurrent, temperature sensitive outages, and derates) shall be identified based on similar contingencies that occurred in recent extreme weather events or expected to occur in future forecasted events. 93. Regarding PJM’s comment regarding the likely need for additional studies to capture the impacts of higher penetration levels of renewables and much reduced conventional generation support, we note that the benchmark planning case will include this information pursuant to our directive above regarding benchmarking planning cases. Accordingly, we do not foresee the need for the additional studies suggested by PJM. 94. Lastly, regarding EPSA’s comment requesting that we direct NERC to examine how it defines and measures its resource adequacy benchmarks, we note that resource adequacy benchmarks are outside the scope of this proceeding. G. Conduct Transmission System Planning Studies for Extreme Heat and Cold Weather Events 1. Steady State and Transient Stability Analyses 95. The Commission proposed in the NOPR to require both steady state and transient stability analyses be conducted for extreme heat and cold weather events as part of transmission planning studies.155 Consistent with Reliability Standard TPL–001–5.1, the NOPR stated that steady state and stability analyses of study cases modeled to reflect past and forecasted extreme heat and cold conditions would better prepare transmission operators for such 154 See supra P 39. Reliability Standard TPL–001– 5.1 Requirement 1.1.5 requires responsible entities to maintain system models that represent projected system conditions, including resources required for load. Because drought conditions may impact the availability of certain supply resources, we expect that the new or revised Reliability Standard will include a similar requirement that accounts for the impact of drought conditions on generation where appropriate. 155 NOPR, 179 FERC ¶ 61,195 at P 69. E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations conditions.156 The NOPR explained that a steady-state analysis is based on a snapshot in time where the bulk electric system facilities such as generators, transmission lines, transformers etc. are modeled as fixed and load is modeled as a constant.157 On the other hand, transient stability or dynamic analyses simulate the time-varying characteristics of the system during a disturbance that occurs during an extreme heat or cold event.158 The NOPR further stated that performing these studies in the longterm planning horizon period (i.e., six to ten years and beyond) will provide an adequate lead time for entities to develop and implement corrective action plans to reduce the likelihood or mitigate the consequences and adverse impacts of such events.159 96. The NOPR noted that the use of dynamic studies is particularly important given the changing resource mix and the need to understand the dynamic behavior of both traditional generators and variable energy resources (VERs) (i.e., wind and solar photovoltaic).160 97. The NOPR sought comments on all aspects of the proposal, and specifically, on whether responsible entities should include contingencies based on their planning area and perform both steady state and transient stability (dynamic) analyses using extreme heat and cold cases. In addition, the NOPR invited comments on the following topics: (1) the set of contingencies responsible entities must consider; (2) required analyses to assess voltage stability, frequency excursions and angular deviations caused as a result of near simultaneous outages or common mode failures of VERs; and (3) the role of demand response under such scenarios.161 a. Comments 98. All those who commented on the NOPR proposal to require both steady state and transient stability analyses agree with the NOPR that both steady state and transient stability analyses should be performed in order to understand the potential impacts of extreme heat and cold weather 156 Id. P 70. P 59. 158 Id. P 60. 159 Id. P 58. 160 Id. P 61. 161 Id. P 62. The NOPR also sought comment on whether existing Reliability Standards are sufficient to ensure that responsible entities performing studies of extreme heat and cold weather conditions have the necessary data, and/or whether the Commission should direct additional modifications pursuant to FPA section 215(d)(5) to address this issue. Id. P 63. This question is discussed in section IV.E of this final rule. lotter on DSK11XQN23PROD with RULES3 157 Id. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 events.162 Below, we discuss comments received on the following topics: (i) required contingencies; (ii) analyses of common mode failures; and (iii) demand response. i. Required Set of Contingencies 99. Idaho Power supports the inclusion of contingencies listed in Table 1 of Reliability Standard TPL– 001–4 such as the loss of two generating stations resulting from, among other events, severe weather, as it currently applies these contingencies in its severe weather studies.163 100. AEP recommends that the Commission direct NERC to revise and reclassify the contingency lists in Reliability Standard TPL–001–5.1 to ‘‘reflect the unique challenges posed by extreme weather events’’ and to ensure that the bulk electric system is operated to withstand N–1–1 contingencies ‘‘without interruption of firm transmission service or nonconsequential load loss.’’ 164 NYISO recommends expanding NERC planning events to include the weather-related loss of generation across areas of the system in the design-basis contingencies rather than as an extreme contingency.165 Southern California Edison Company (SCE) suggests that NERC determine whether additional contingencies should be developed to evaluate potential reliability risks from events occurring at the same or sequential times in the same region that have the potential to pose an aggregate impact on electricity assets, operations, and services, e.g., an extreme heat event that reduces grid capacity while increasing demand for cooling.166 LCRA suggests that performing contingency analyses similar to what is required under Reliability Standard CIP–014–3 (Physical Security) may be useful.167 LCRA states, for example, that the analysis could study the outage of medium impact facilities (e.g., single circuit, common tower). If the result of the analysis identifies instability, cascading, uncontrolled islanding, or excessive load shed, these facilities 162 See, e.g., NERC Comments at 9; PJM Comments at 10; Tri-State Comments at 4; Eversource Comments at 5; WE ACT for Environmental Justice Comments at 4; LCRA Comments at 3; UCS Comments at 7. 163 Idaho Power Comments at 3. 164 AEP Comments at 4. 165 NYISO Comments at 14. 166 SCE Comments at 4. 167 Reliability Standard CIP–014–3 requires entities to assess their transmission facilities to determine whether, if rendered inoperable or damaged, they could result in widespread instability, uncontrolled separation, or cascading. Reliability Standard CIP–014–3 (Physical Security), at 1. PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 41275 could be identified as ‘‘weather critical’’ and targeted for hardening as part of a corrective action plan.168 101. Other commenters state that responsible entities should be able to consider contingencies beyond those in Table 1 of Reliability Standard TPL– 001.5.1 that will affect their study area.169 For example, PJM emphasizes the need for regional variance for unique contingencies to be studied.170 Eversource recommends that the Commission avoid prescription and allow details such as the types of required contingencies to be determined during the standard development process.171 102. EPRI asserts that clarification is needed to differentiate between events that impact the initial conditions of the benchmark scenario for which the contingency events will be analyzed, and the actual contingencies meant to be captured as acute impacts to the system that occur over a wide area and can be studied through the steady state and transient stability processes.172 ii. Analyses for Common Mode Failures 103. NERC and ACP agree that Reliability Standard TPL–001–5.1 should better address the risk posed by extreme heat and cold weather events and the associated common mode failure impacting resource availability and the transmission system.173 104. EPRI states that the benchmark planning cases, which serve as the basis for steady state and transient stability assessments, historically have not been developed to include the correlated impacts of common mode events based on the impact of extreme temperature on load and the availability of derated generation and transmission capacity. EPRI asserts that capturing extreme temperature conditions for both heat and cold would require a new approach that directly accounts for the correlated temperature-related impacts to supply and demand.174 EPRI agrees with the Commission’s proposal that dynamic models of VERs need to be included in the studies but states they would need to be sufficiently robust to accurately capture system performance under extreme weather conditions.175 168 LCRA Comments at 2. Comments at 4; Idaho Power Comments at 3; Tri-State Comments at 4, PJM Comments at 11. 170 AEP Comments at 4; Idaho Power Comments at 3; Tri-State Comments at 4, PJM comments at 11. 171 Eversource Comments at 4. 172 EPRI Comments at P 21. 173 NERC Comments at 6; ACP Comments at 9 n.23. 174 EPRI Comments at PP 3–4. 175 Id. P 11. 169 AEP E:\FR\FM\23JNR3.SGM 23JNR3 41276 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations 105. Indicated Trade Associations state that in any case modeling these scenarios will likely require additional resources in time, expertise, and enhanced software capabilities.176 Indicated Trade Associations ask that the standard drafting team recognize the range and quantity of complexities layered into the modeling process, e.g., whether concurrent generators must be in a single or multiple balancing authority area, how many generators are needed for a given study, and if there is a particular combination of generators needed for modeling.177 lotter on DSK11XQN23PROD with RULES3 iii. Demand Response 106. EDF and UCS suggest that when evaluating relevant distribution system impacts, responsible entities should focus on the impacts of the extreme weather event on both electric demand and on the capability of the distribution system assets, including demand response, distributed storage and generation, and utility-scale storage, to mitigate reliability risks.178 107. APS comments that demand response should be used as a tool to resolve issues and only studied when it is relied on as a mitigation action.179 108. Eversource states that the Commission should encourage regional flexibility in any consideration of demand response. Eversource further comments that the Commission should not impose a ‘‘one size fits all’’ approach for resources that may significantly differ based on location. It is also concerned that during extreme weather events, demand response with heating or cooling-based load reduction may not be achievable due to safety concerns.180 109. EPRI asserts that steady state simulation cannot sufficiently capture demand response, and that there is limited capability to capture the aggregated dynamic response of demand in the load models used in positive sequence platforms. EPRI adds that ‘‘the impacts of demand response are better represented through appropriate temporal and diurnal patterns that would inform the load and demand profile under a given extreme temperature condition. This information is best represented in operational assessments such as resource adequacy or production cost modeling.’’ 181 110. LCRA notes that while the role of demand response in its portion of the 176 Indicated Trade Associations at 9. 177 Id. 178 EDF Comments at 22–23; UCS Comments at 7– 8. 179 APS Comments at 4. Comments at 6. 181 EPRI Comments at P 12. 180 Eversource VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 Bulk-Power System is negligible today, this could change in the future as additional large loads (e.g., cryptocurrency mining and data centers) are energized. LCRA states that this trend should be observed for further consideration in the future.182 b. Commission Determination 111. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to require in the proposed new or modified Reliability Standard that responsible entities perform both steady state and transient stability (dynamic) analyses in the extreme heat and cold weather planning studies. In a steady state analysis, the system components are modeled as either in-service or out-of-service and the result is a single point-in-time snapshot of the system in a state of operating equilibrium. A transient stability (dynamic) analysis examines the system from the start to the end of a disturbance to determine if the system regains a state of operating equilibrium.183 Performing both analyses ensures that the system has been thoroughly assessed for instability, uncontrolled separation, and cascading failures in both the steady state and the transient stability realms. 112. We also adopt the NOPR proposal and direct NERC to define a set of contingencies that responsible entities will be required to consider when conducting wide-area studies of extreme heat and cold weather events under the new or modified Reliability Standard. We believe that it is necessary to establish a set of common contingencies for all responsible entities to analyze. Required contingencies, such as those listed in Table 1 of Reliability Standard TPL–001–5.1 (i.e., category P1 through P7), establish common planning events that set the starting point for transmission system planning assessments. Requiring the study of predefined contingencies will ensure a level of uniformity across planning regions—a feature that will be necessary in the new or revised Reliability Standard considering that extreme heat and cold weather events often exceed the geographic boundaries of most existing planning footprints. 113. Additionally, establishing a set of required contingencies will aide in the auditing and enforcement of the new or revised Reliability Standard. While we do not require in this final rule the 182 LCRA Comments at 2–3. are created during the dynamic simulation from pre to post disturbance and are then examined for voltage, frequency, and rotor angle stability, which cannot be assessed using only a steady state analysis. 183 Plots PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 inclusion of any particular contingency, we agree with commenters that the contingencies required in the new or revised Reliability Standard should reflect the complexities of transmission system planning studies for extreme heat and cold weather events. As such, NERC may determine whether contingencies P1 through P7 should also apply to the new or modified Reliability Standard, or whether a new set of contingencies should be developed. 114. Regarding the request for clarification from EPRI as to what outages should be included in the benchmark planning case versus modeled as contingencies, we believe the standard drafting team is best positioned to consider that specific question. By definition, the benchmark planning case will already include certain weather-related contingencies that therefore will not be studied as additional contingencies when conducting extreme weather studies.184 For example, baseline drought conditions will be present in the benchmark planning case as part of the system models representing projected system conditions,185 whereas the impacts of more severe droughts could be studied during sensitivity analysis as a variation to the benchmark planning case’s generation assumptions.186 As discussed in section IV.F above, we direct NERC to develop specific criteria for determining which outages should be considered in the benchmark planning case. 115. Regarding the study of common mode failures, we reiterate our above directives concerning the study of concurrent/correlated generator and transmission outages. We believe that, as suggested by Indicated Trade Associations, the standard development process will provide an adequate platform to address the concerns raised by commenters regarding common mode failures. 116. We also direct NERC to require in the new or modified Reliability Standard that responsible entities model demand load response in their extreme weather event planning area. As indicated by several commenters, because demand load response is generally a mitigating action that involves reducing distribution load during periods of stress to stabilize the Bulk-Power System, its effect during an extreme weather event should be modeled. 117. Regarding EPRI’s comment that steady state simulation cannot 184 See supra P 39. supra note 155. 186 See infra P 124. 185 See E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations sufficiently capture demand load response, we believe EPRI’s comments are accurate for modeling in the operational timeframe for temporal and diurnal studies. However, we recognize that it is possible that the loads used to represent extreme heat and cold events will include the effects of demand load response because entities’ load data obtained from historical data during these past extreme events will reflect the effects of demand load response. If that is the case, demand load response will be automatically factored into the benchmark planning case. Thus, in addressing this directive, we expect NERC to determine whether responsible entities will need to take additional steps to ensure that the impacts of demand load response are accurately modeled in extreme weather studies, such as by analyzing demand load response as a sensitivity, as is currently the case under Reliability Standard TPL–001–5.1.187 lotter on DSK11XQN23PROD with RULES3 2. Sensitivity Analysis 118. In the NOPR, the Commission proposed directing NERC to establish a requirement for responsible entities to consider system models and sensitivity cases when assessing extreme heat and extreme cold weather.188 The NOPR explained that, while Reliability Standard TPL–001–5.1 requires the use of sensitivity power flow cases, the Standard does not require responsible entities to model the simultaneous variation of load, generation, and transfers necessary to account for the impacts of extreme heat and cold weather events. This, in turn, could result in failure to detect in the planning horizon potential reliability issues such as widespread outages and cascading failures.189 119. The NOPR further stated that to accurately model the impacts of extreme heat and cold weather events it would be necessary to define and model in sensitivity analyses demand probability scenario cases, generators that are affected by these events (i.e., wind tripping off, solar dropping off, gas plants not being operational due to gas restrictions/freeze-offs, etc.) and transfer levels.190 120. The NOPR requested comment on: (1) whether to require transmission planners and planning coordinators to assess reliability in the planning horizon for sensitivity cases in which 187 Reliability Standard TPL–001–5.1, at Requirement 2.1.3. 188 NOPR, 179 FERC ¶ 61,195 at P 73. Sensitivity analyses consider the impact on a base case by altering discrete variables. 189 Id. 190 Id. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 multiple inputs (e.g., load and generator failures) change simultaneously during extreme heat and cold events; and (2) the range of factors and the number of sensitivity cases that should be considered to ensure reliable planning.191 a. Comments 121. Some commenters support requiring the consideration of certain sensitivities. For example, AEP recommends that a baseline set of sensitivities should be defined by the NERC standard drafting team and there should be flexibility for planning coordinators to introduce further sensitivities if deemed necessary.192 EPRI suggests that multiple hours may need to be studied over the course of the extreme temperature window to capture sensitivities related to generation and demand that can lead to differing steady state and dynamic stability impacts. EPRI also recommends that in addition to the sensitivities driven by the operational performance of the system, the standard should include other external drivers that may compound system conditions during the extreme temperature events, such as a concurrent lull in wind speeds that would limit wind generation outputs.193 122. Other commenters suggest reasons why it may not be necessary for the Commission to direct the study of additional sensitivities. NYISO and LCRA explain that extreme heat and cold weather impacts and unavailability of natural gas fuel are already studied as sensitivities under Reliability Standard TPL–001–5.1.194 Similarly, Indicated Trade Associations assert that the extreme weather base case should already represent system conditions at or near possible seasonal extreme weather limits and that, as such, many additional sensitivities may not be necessary.195 LCRA adds that the effect of changing inputs (e.g., load and generation, including generation retirements and forced generation outages) should be captured in the contingency definitions, performance requirements, and analysis for the given region and extreme weather case.196 123. Idaho Power, APS, and Indicated Trade Associations indicate that given the diversity among utilities with respect to load profiles, geographic footprint, resource mix, particular utility, its resource mix, and geographic 191 Id. P 74. Comments at 12. 193 EPRI Comments at P 22. 194 NYISO Comments at 13; LCRA Comments at 41277 footprint, and available resources and needs, the Commission should allow entities to select the sensitivities they will study.197 b. Commission Determination 124. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to require the use of sensitivity cases to demonstrate the impact of changes to the assumptions used in the benchmark planning case. Sensitivity analyses help a transmission planner to determine if the results of the base case are sensitive to changes in the inputs. The use of sensitivity analyses is particularly necessary when studying extreme heat and cold events because some of the assumptions made when developing a base case may change if temperatures change—for example, during extreme cold events, load may increase as temperatures decrease, while a decrease in temperature may result in a decrease in generation. We agree with AEP, and we direct NERC to define during the Reliability Standard development process a baseline set of sensitivities for the new or modified Reliability Standard. While we do not require the inclusion of any specific sensitivity in this final rule, NERC should consider including conditions that vary with temperature such as load, generation, and system transfers.198 125. We do not agree with Idaho Power, APS, and Indicated Trade Associations that responsible entities alone should determine the sensitivity cases that must be considered in the responsible entity’s study. Failure to consider variations in conditions necessary to reflect extreme heat or cold weather events could result in major reliability risks being overlooked and undetected in the planning horizon.199 We do, however, believe that responsible entities should be free to study additional sensitivities relevant to their planning areas. Because wide-area studies conducted under the new or modified Reliability Standard will be likely based on footprints significantly larger than those typically concerned under Reliability Standard TPL–001.5.1, cooperation will be necessary between responsible entities conducting extreme heat and cold weather studies and other registered entities within their extreme weather study footprints to ensure the selection of appropriate sensitivities. EPRI’s comment further highlights the need for coordination between 192 AEP 3. 195 Indicated 196 LCRA PO 00000 Trade Associations Comments at 10. Comments at 3. Frm 00017 Fmt 4701 Sfmt 4700 197 Indicated Trade Associations Comments at 11; Idaho Power Comments at 4–5; APS Comments at 7. 198 NOPR, 179 FERC ¶ 61,195 at P 73. 199 See id. E:\FR\FM\23JNR3.SGM 23JNR3 41278 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 registered entities to capture sensitivities related to variable energy resources and demand. 126. We disagree with NYISO and LCRA that extreme heat and cold weather impacts are already studied as sensitivities under Reliability Standard TPL–001–5.1. Although TPL–001–5.1 mandates sensitivity analysis by varying one or more conditions specified in the standard such as load, generation, and transfers, this analysis alone cannot capture the complexities of extreme heat and cold weather conditions. Sensitivity analyses consider the impact on a base case of the variability of discrete variables. Extreme heat and cold weather impacts, on the other hand, may include numerous concurrent outages and derates which cannot be studied as part of a single-variable sensitivity analysis. Under the new or modified Reliability Standard, however, these outages will be captured in the benchmark planning case upon which sensitivity analyses will be performed. 3. Modifications to the Traditional Planning Approach 127. In the NOPR, the Commission proposed to direct NERC to consider alternative planning methods and techniques that diverge from past Reliability Standard requirements to better capture the challenges posed by extreme heat and cold events.200 128. The NOPR stated that Reliability Standard TPL–001–5.1 is based on a deterministic approach, which uses planned contingencies and specific performance criteria to study system response to various conditions. This approach yields accurate planning when the power supply is highly dispatchable, weather is predictable, and near-record peak demand is reached only a few days a year.201 However, as noted in the NOPR, the current planning approach applied in Reliability Standard TPL–001–5.1 likely is not sufficient to accurately characterize the reliability risk from extreme heat and cold weather given the high degree of uncertainty inherent in predicting severe weather and its impact on generation resources, transmission, and load.202 129. The NOPR explained the value of establishing a new or modified planning approach to better capture the impacts of, and ensure reliable planning and operation in response to, extreme heat and cold events.203 Specifically, the NOPR mentioned as an option 200 Id. P 75. 201 Id. 202 Id. 203 Id. P 78. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 expanding current deterministic studies to include probabilistically developed scenarios as an option to better account for uncertainties during extreme heat and cold weather conditions, since probabilistic tools can capture ‘‘random uncertainties in power system planning, including those in load forecasting, generator performance, and failures of system equipment.’’ 204 130. Finally, the NOPR sought comments on combining or layering probabilistic and deterministic approaches when planning for extreme heat and cold weather conditions in the context of Reliability Standard TPL– 001–5.1. Specifically, the NOPR sought comments on the use of a hybrid deterministic/probabilistic planning approach and the following: (1) the assumptions from the deterministic and probabilistic approaches that should be applied to study extreme heat and cold weather events; (2) the potential planning challenges from combining the two planning approaches; (3) the costs associated with adjustments to the currently applied deterministic approach; (4) the implementation period necessary for proposed changes; and (5) the reliability benefits that could result.205 a. Comments 131. Many commenters support the use of probabilistic methods in transmission planning to account for uncertainty in availability of transmission and generation in extreme weather conditions.206 For example, PJM states that the use of probabilistic modeling ‘‘would help establish the baseline and sensitivity system conditions upon which deterministic approaches for go/no-go corrective action transmission build decisions would be made.’’ 207 EPRI discusses potential deficiencies in traditional deterministic approaches in planning studies in cases where uncertainty and variability will increase on both the generation and demand side across a variety of temperature extremes. EPRI raises concerns that scenarios or system conditions that result in consequential stability implications may not be adequately captured in the planning models using the traditional deterministic approach.208 ACP states that there is precedent for using probabilistic tools in assessing electric reliability, as these methods are widely used by utilities and RTOs to assess resource adequacy and loss of load risk.209 132. Other commenters do not support a requirement to use probabilistic methods. For example, while AEP recognizes the value of probabilistic methods, it warns that the industry is not yet ready because the necessary methods, frameworks, and tools are not yet available to transmission planners.210 Several other commenters warn that it would be premature to require the use of probabilistic methods.211 Trade Associations express concern that probabilistic planning based on extremely low probability events is highly speculative and dependent on the judgment of planners, which increases the complexity and risk associated with the development of transmission projects, hampering the construction of needed transmission.212 Idaho Power also does not think converting to a probabilistic approach is necessary as sensitivities with appropriate inputs will capture the impacts of extreme weather using deterministic techniques.213 LCRA comments that probabilistic analysis requires large samples (i.e., number of events), but given the infrequent occurrence of extreme weather events, it would be challenging to layer probabilistic assumptions into transmission planning analyses.214 133. Supporters of the use of probabilistic methods acknowledge that implementation poses challenges. For example, EPRI comments that implementation of probabilistic methods would require new processes to link and communicate data across models, such as linking generation and transmission expansion assessments, resource adequacy, production cost models, and transmission planning assessments.215 Further, new statistical methods and processes will be needed to inform the selection of powerflow cases for planning assessments.216 PJM states that the benefits of applying probabilistic methods would require knowing in advance pre-established bounded parameter ranges, so 209 ACP Comments at 16. Comments at 22. 211 APS Comments at 7 (requesting that the Commission hold ‘‘robust industry-wide discussions to discuss probabilistic approaches’’); Tri-State Comments at 8. 212 Trade Associations Comments at 11. 213 Idaho Power Comments at 5. 214 LCRA Comments at 3–4. 215 EPRI Comments at P 25. 216 Id. 210 AEP 204 Id. P 79. 205 Id. 206 See, e.g., NESCOE Comments at 9; EPRI Comments at P 24; PJM Comments at 11; EDF Comments at 20; PIOs Comments at 7; ACEG Comments at 7; NARUC Comments at 5–6; ACP Comments at 15; Entergy Comments at 6. 207 PJM Comments at 11. 208 EPRI Comments at P 24. PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 reasonable selection of probabilistic method assumptions lead to benchmark planning cases that reflect statistically credible scenarios.217 PJM further states that this should be the result of coordinated analysis among RTOs, NOAA, DOE Labs, and NERC.218 Entergy asserts that the probabilistic approach is significantly more complicated than deterministic planning and cautions that any requirement for probabilistic planning must have requirements that reasonably can be performed, are assessable, and are auditable for compliance.219 Because of the potential challenges associated with implementing probabilistic planning requirements, Tri-State recommends the further study of and development of best practices for probabilistic planning.220 b. Commission Determination 134. Pursuant to section 215(d)(5) of the FPA, the Commission adopts and modifies the NOPR proposal and directs NERC to require in the new or modified Reliability Standard the use of planning methods that ensure adequate consideration of the broad characteristics of extreme heat and cold weather conditions. We further direct NERC to determine during the standard development process whether probabilistic elements can be incorporated into the new or modified Reliability Standard and implemented presently by responsible entities. If NERC identifies probabilistic elements which responsible entities can feasibly implement and that would improve upon existing planning practices, we expect the inclusion of those methods in the proposed Reliability Standard. 135. Including probabilistic scenarios in the planning process could result in a planning approach that better captures the uncertainties of extreme weather events, thus better preparing responsible entities to ensure Reliable Operation under stressed conditions.221 Further, we agree with commenters that the use of probabilistic methods by responsible entities would help ensure Reliable Operation of the Bulk-Power System as probabilistic methods better characterize multi-day wide-area events such as extreme heat and cold events.222 136. However, we recognize, as certain commenters point out, that a prescriptive requirement to add probabilistic planning methods to better 217 PJM Comments at 11. 218 Id. 219 Entergy Comments at 9. Comments at 8. 221 NOPR, 179 FERC ¶ 61,195 at P 76. 222 EPRI Comments at 4. understand reliability implications could be met by significant challenges. Some of the challenges identified by commenters include lack of commercially available tools required for probabilistic modeling and lack of planning staff trained in the use of these tools and in carrying out probabilistic studies. Further, there may be a need to develop and maintain probabilistic databases that include, for example, outage data from extreme weatherdependent grid components and generation resources. 137. Because of these implementation concerns, we believe that the best course of action is to allow NERC to use its expertise and the standard development process to address the concerns identified by commenters and develop proposed modifications to existing planning methods that address the Commission’s directive to use transmission planning methods that adequately characterize the effects of extreme heat and cold weather conditions on the transmission system, including incorporating probabilistic elements where possible. The standard development process will also provide an adequate forum in which to evaluate the many recommendations that commenters have presented in response to the NOPR. 138. We also direct NERC to identify during the standard development process any probabilistic planning methods that would improve upon existing planning practices, but that NERC deems infeasible to include in the proposed Reliability Standard at this time. If any such methods are identified, NERC shall describe in its petition for approval of the proposed Reliability Standard the barriers preventing the implementation of those probabilistic elements. We intend to use this information to determine whether and what next steps may be warranted to facilitate the use of probabilistic methods in transmission system planning practices. H. Implement a Corrective Action Plan if Performance Standards Are Not Met 139. The NOPR noted that under the currently effective Reliability Standard TPL–001–5.1, planning coordinators and transmission planners are required to evaluate possible actions to reduce the likelihood or mitigate the consequences of extreme weather events, but are not obligated to develop corrective action plans, even if such events are found to cause cascading outages.223 Because of the potential 220 Tri-State VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 223 NOPR, 179 FERC ¶ 61,195 at P 83. Reliability Standard TPL–001–5.1, Requirements R3.3.5 and PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 41279 severity of extreme heat and cold weather events and their likelihood to cause system instability, uncontrolled separation, or cascading failures as a result of a sudden disturbance or unanticipated failure of system elements, the NOPR proposed to direct NERC to require corrective action plans that include mitigation for any instances where performance requirements for extreme heat and cold events are not met.224 140. Consistent with the existing requirements of Reliability Standard TPL–001–5.1, the NOPR proposed to provide responsible entities with the flexibility to determine the actions to include in their corrective action plans to remedy identified deficiencies in performance. The NOPR included several examples of actions that could be included in a corrective action plan: planning for additional contingency reserves or implementing new energy efficiency programs to decrease load, increasing intra- and inter-regional transfer capabilities, transmission switching, or adjusting transmission and generation maintenance outages based on longer-lead forecasts. The NOPR observed that well-planned mitigation and corrective actions that account for some of these contingencies will minimize loss of load and improve resilience during extreme heat and cold weather events.225 141. The NOPR explained that increases in interregional transfer capability could be considered as one option to address potential reliability issues during extreme weather events.226 The NOPR noted that such transfer capability would allow an entity in one region with available energy to assist one or more entities in another region that is experiencing an energy shortfall due to the extreme weather event.227 Increasing interregional transfer capability may be a particularly robust option for planning entities attempting to mitigate the risks associated with concurrent generator outages over a wide area.228 R4.4.5 require computer simulation analyses of extreme events listed in Table 1 of the standard (some listed are examples and are not definitive), and if the analysis concludes there is cascading caused by the occurrence of extreme events, an evaluation of possible actions designed to reduce the likelihood or mitigate the consequences and adverse impacts of the event(s) shall be conducted. 224 Id. 225 Id. P 84. 226 Id. P 85. 227 Id. 228 Id. In this proceeding, we refer to interregional transfer capability strictly in the context of improving the reliability of the Bulk-Power System through improved transmission system planning E:\FR\FM\23JNR3.SGM Continued 23JNR3 41280 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations 142. To ensure the timely development and implementation of corrective action plans, the NOPR sought comments on the timeframe for developing such corrective action plans and sharing of the corrective actions with other interconnected planning entities.229 In addition, to identify opportunities for improved wide-area planning studies and coordination, the NOPR requested comment on how to develop corrective action plans that mitigate issues that require corrective action by, and coordination among, multiple transmission owners.230 1. Comments a. Jurisdictional Issues 143. Several commenters raise jurisdictional concerns regarding corrective action plans.231 While Indicated Trade Associations support the NOPR proposal to require corrective action plans addressing vulnerabilities identified in the study process, they also urge that the Commission ‘‘remain mindful’’ of the statutory limitation set forth in FPA section 215(i) that NERC and the Commission do not have authority ‘‘to order the construction of additional generation or transmission capacity or to set or enforce compliance with standards for adequacy or safety of electric facilities or services.’’ 232 In particular, Indicated Trade Associations express concern that certain examples of potential corrective action plans mentioned in the NOPR, including ‘‘planning for additional contingency reserves . . . or increasing intra- and inter-regional transfer capabilities,’’ exceed the Commission’s authority under section 215 of the FPA.233 Similarly, Electric Reliability Council of Texas, Inc. (ERCOT) opines that ‘‘[r]equiring transmission planners to address what is fundamentally a resource adequacy concern through the transmission planning process would usurp the authority of the states, which are responsible for ensuring the adequacy of the generation supply.’’ 234 lotter on DSK11XQN23PROD with RULES3 b. Corrective Action Plans 144. Most commenters agree that corrective action plans should be required to address system performance issues identified in studies under extreme heat and cold weather and associated modifications to NERC’s Reliability Standards. 229 Id. 230 Id. P 67. 231 Indicated Trade Associations Comments at 11–12; ERCOT Comments at 5. 232 Indicated Trade Association Comments at 12 (citing 16 U.S.C. 824o(i)). 233 Id. at 11–12; ERCOT Comments at 5. 234 ERCOT Comments at 5. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 conditions.235 NERC agrees that any revised Reliability Standard directed under a final rule issued in this proceeding should require that entities develop corrective action plans for instances where performance requirements for selected extreme weather and environmental conditions are not met for at least some of the planning scenarios. 145. BPA asserts that several of the corrective action plan examples listed in the NOPR, such as transmission switching/reconfiguration, or adjusting transmission and generation maintenance outages, would likely be covered by Reliability Standard EOP– 011–2, requiring transmission operators and balancing authorities to have operating plans to mitigate operating emergencies including determining the reliability impacts of extreme weather conditions. Therefore, BPA cautioned, any modifications to Reliability Standard TPL–001–5.1 should be careful not to encroach upon the authority and discretion of transmission operators and balancing authorities.236 146. Some commenters do not support the NOPR proposal to require the development and implementation of corrective action plans for all instances where performance requirements for extreme heat and cold events are not met. APS asserts that ‘‘corrective action plans should be focused on the most likely and impactful events, which may not include extreme weather scenarios,’’ and that as such, it disagrees that corrective action plans ‘‘should be required for results that come out of sensitivity analysis, which includes extreme weather scenarios.’’ 147. With regard to costs, National Association of Regulatory Utility Commissioners (NARUC) asserts that mitigation and corrective actions to minimize loss of load and improve resilience should be subjected to a cost/ benefit analysis.237 Entergy suggests that the Commission ‘‘provide additional guidance regarding the level of performance it expects during extreme heat and cold events,’’ including consideration of ‘‘the cost effects on customers relative to the potential risks and the time-frame in which those risks are likely to arise.’’ 238 235 See, e.g., NERC Comments at 10; NARUC Comments at 6; NESCOE Comments at 3; MISO Comments at 4.; PJM Comments at 12. 236 BPA Comments at 4. 237 NARUC Comments at 6. 238 Entergy Comments at 2. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 c. Generation and Transmission Capacity Increase and Resource Adequacy Issues 148. Most commenters agree that the responsible entities developing corrective action plans should evaluate a range of solutions, including transmission upgrades to increase interregional transfer capability and/or building generation to address generation deficiency under extreme weather events.239 Some commenters, however, question the efficacy of corrective action plans and suggest that alternative approaches are preferable. 149. With regards to transmission capacity, and specifically interregional transfer capabilities, many commenters agree that adequate interregional transfer capability would help address reliability challenges posed by extreme heat and cold weather conditions.240 Some commenters urge the Commission to set a minimum interregional transfer capability requirement.241 However, most commenters addressing this topic opine that interregional transfer requirements, including setting necessary or minimum transfer levels and direction, should be addressed outside of the Reliability Standard TPL– 001–5.1 planning process.242 For example, MISO Transmission Owners suggest that interregional transfers could be better dealt with under Order No. 1000 Regional Transmission Planning processes.243 MISO recommends that corrective action plans require meaningful mitigation, such as investment in transmission solutions, to address issues identified in an extreme weather event study.244 Conversely, Idaho Power states that if regional transmission facilities are to be considered as corrective actions, Idaho Power would have concerns with the efficacy of those corrective actions given the amount of time necessary to build new transmission.245 150. Most commenters who disagree with the NOPR proposal to allow entities to consider additional generation capacity as a corrective action plan measure disagree on the 239 See, e.g., NARUC Comments at 6; UCS Comments at 9; PIOs Comments at 15; AEP Comments at 5; ACEG Comments at 8; ACP Comments at 11; Entergy Comments at 8. 240 AEP Comments at 2; ACP Comments at 19; ACEG Comments at 9; PJM Comments at 12; see MISO Transmission Owners Comments at 5–6. 241 EDF Comments at 27; AEP Comments at 2; ACP Comments at 19; ACEG Comments at 9; PJM Comments at 12. 242 MISO Transmission Owners Comments at 5– 6; ACP Comments at 19; ACEG Comments at 9; AEP Comments at 2. 243 MISO Transmission Owners Comments at 5. 244 MISO Comments at 4. 245 Idaho Power Comments at 4, 6. E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations basis that resource adequacy is not a matter that should be dealt with within the transmission planning process.246 For example, ISO–NE asserts that the purpose of Reliability Standard TPL– 001–5.1 is not to ensure resource adequacy, but to ensure that load can be served.247 ACP and PIOs question the efficacy of building new generation as part of a corrective action plan because such new generation may be subject to the same issues as existing generation— for example, if an extreme cold event leads to the outage of weather-sensitive generators, adding more weathersensitive generators will not resolve the resource deficiency.248 d. Notification to Applicable Regulatory Authorities or Governing Bodies Responsible for Retail Electric Service Issues 151. ACP, New England States Committee on Electricity (NESCOE), and Entergy comment that entities must coordinate with state and local authorities in the development of corrective action plans involving generation and transmission capacity.249 For example, NESCOE suggests that corrective action plans be informed by state officials’ perspectives, consider a variety of mitigation options, and include a detailed explanation of how the entity weighed the various options.250 Additionally, NESCOE points out that given the likelihood that corrective action plans will include load shed, state officials should be involved in the corrective action plan process.251 NESCOE proposes that responsible entities seek input from state regulators during their planning process. Alternatively, NESCOE recommends the adoption of the Joint Federal-State Task Force on Electric Transmission model to create a similar task force focusing on extreme weather and grid reliability.252 lotter on DSK11XQN23PROD with RULES3 2. Commission Determination 152. Pursuant to section 215(d)(5) of the FPA, the Commission adopts and modifies the NOPR proposal and directs NERC to require in the new or modified Reliability Standard the development of extreme weather corrective action plans 246 See, e.g., PJM Comments at 12; ERCOT Comments at 5; ISO–NE Comments at 4. 247 ISO–NE Comments at 4. 248 ACP Comments at 6; PIOs Comments at 16. 249 See ACP Comments at 18; NESCOE Comments at 3; see also Entergy Comments at 9 (stating in the context of the development of corrective action plans that ‘‘[t]he Commission also should ensure that the relevant retail regulators have input into the level of risks versus costs a transmission owner should accept.’’). 250 NESCOE Comments at 3. 251 Id. at 5. 252 Id. at 6. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 for specified instances when performance standards are not met. In addition, as explained below, we direct NERC to develop certain processes to facilitate interaction and coordination with applicable regulatory authorities or governing bodies responsible for retail electric service as appropriate in implementing a corrective action plan. 153. We adopt our rationale set forth in the NOPR and conclude that the directive to require the development of corrective action plans is needed for Reliable Operation of the Bulk-Power System. Under the currently effective Reliability Standard TPL–001–5.1, planning coordinators and transmission planners are required to evaluate possible actions to reduce the likelihood or mitigate the consequences of extreme weather events, but are not obligated to develop corrective action plans, even if such events are found to cause cascading outages. Experience over the past decade has demonstrated that the potential severity of extreme heat and cold weather events exacerbates the likelihood to cause system instability, uncontrolled separation, or cascading failures as a result of a sudden disturbance or unanticipated failure of system elements. Thus, we conclude that entities should proactively address known system vulnerabilities by developing corrective action plans that include mitigation for specified instances where performance requirements for extreme heat and cold events are not met. a. Jurisdictional Issues 154. We reject the arguments that our directive to require responsible entities to develop corrective action plans may exceed the Commission’s jurisdiction. Section 215(i)(2) of the FPA states that the Commission and ERO are not authorized to order the construction of additional generation or transmission capacity as part of a Reliability Standard.253 Consistent with this limitation, the final rule does not require any responsible entity to engage in the construction of additional generation or transmission capacity. Moreover, while the final rule directs NERC to include in a new or modified Reliability Standard a requirement for entities to develop a corrective action plan to address extreme heat and cold weather events during the transmission planning process, the final rule does not mandate the use of any specific mitigation measure.254 253 16 U.S.C. 824o(i)(2). 179 FERC ¶ 61,195 at P 84 (‘‘we believe it is appropriate to provide responsible entities with the flexibility to determine the best actions to 254 NOPR, PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 41281 155. As noted by commenters, the NOPR provided examples of various activities that may be appropriate under a corrective action plan, some of which may require state or local authorizations (e.g., generation or transmission development).255 Other examples mentioned in the NOPR include ‘‘implementing new energy efficiency programs to decrease load, . . . transmission switching, or adjusting transmission and generation maintenance outages based on longerlead forecasts,’’ 256 none of which involve the construction of generation or transmission capacity. In addition, responsible entities have the option to use controlled load shed as a mitigation measure. In sum, while responsible entities would have the obligation to develop and implement a corrective action plan, the Commission is not directing any specific result or content of the corrective action plan. In such circumstances, the Commission’s directive does not exceed the jurisdictional limits set forth in section 215(i) of the FPA.257 156. In response to ERCOT and other commenters, the Commission’s action does not usurp state authority with regard to resource adequacy. As explained above, the directive that responsible entities develop corrective action plans in certain circumstances does not require the construction of additional generation or transmission capacity. Further, as discussed below, responsible entities that elect mitigation activities that involve increased transmission or generation capacity will of course be subject to the authority of such state agencies or others with legal jurisdiction over the construction of transmission or generation facilities. b. Circumstances That Require Corrective Action Plans 157. As stated above, we adopt and modify the NOPR proposal and direct NERC to require in the new or modified Reliability Standard the development of corrective action plans that include mitigation for specified instances where performance requirements for extreme heat and cold events are not met—i.e., when certain studies conducted under the Standard show that an extreme heat or cold event would result in cascading outages, uncontrolled separation, or instability.258 We agree with APS that include in their corrective action plan to remedy any identified deficiencies in performance’’). 255 Id. 256 Id. 257 S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 80 (D.C. Cir. 2014). 258 NOPR, 179 FERC ¶ 61,195 at P 83. E:\FR\FM\23JNR3.SGM 23JNR3 41282 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 neither version 4 nor 5.1 of Reliability Standard TPL–001–5.1 require corrective action plans for extreme heat and cold weather events. Extreme heat and cold weather events, which pose a serious risk to the Reliable Operation of the Bulk-Power System, are increasing in frequency and intensity. We believe that in taking steps to avoid occurrences of cascading outages, uncontrolled separation, or instability under extreme heat and cold, corrective action plans would also minimize the extent and duration of loss of load and improve Bulk-Power System resilience during extreme heat and cold weather events.259 158. Although the NOPR proposed requiring the development of corrective action plans for any instance where performance requirements for extreme heat and cold events are not met, we give NERC in this final rule the flexibility to specify the circumstances that require the development of a corrective action plan. For example, NERC should determine whether corrective action plans should be required for single or multiple sensitivity cases, and whether corrective action plans should be developed if a contingency event that is not already included in benchmark planning case would result in cascading outages, uncontrolled separation, or instability.260 Because we also direct NERC to establish required study contingencies and baseline sensitivities,261 we believe it is necessary for NERC to develop those aspects of the Standard prior to determining the instances under which corrective action plans must be developed. 159. With regard to BPA’s suggestion that Reliability Standard EOP–011–2 already addresses certain mitigation measures listed in the NOPR as examples, we clarify that nothing in the final rule affects the responsibilities or obligations of registered entities under that Reliability Standard and note that there are important differences in the scope and intent of EOP–011–2 and the Reliability Standard we are directing be developed here. Specifically, while Reliability Standard EOP–011–2 includes provisions to determine reliability impacts of extreme cold conditions and extreme weather conditions,262 it does not require the transmission operator to mitigate the 259 Id. P 84. Reliability Standard TPL–001–5.1, corrective action plans are not required for single sensitivity cases. 261 See supra PP 111, 124. 262 Reliability Standard EOP–011–2, Requirement 1.2.6. 260 Under VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 condition. In addition, Reliability Standard EOP–011–2 addresses the issues within the operating time frame. Corrective action plans, as proposed in the NOPR, would be developed in the planning horizon to address the issues in the long-term planning time frame. Simultaneously, such issues would be addressed by Reliability Standard EOP– 011–2 in the operating time frame should the studied extreme weather condition occur. As such, there would not be any encroachment or conflict between the two standards. 160. With respect to arguments from NARUC and Entergy that the Commission should require cost-benefit analysis for corrective action plans or otherwise provide additional guidance as to the cost impacts on customers, we decline to do so. FPA section 215 does not require the use of cost-benefit analysis and, given the flexibility allowed to responsible entities in crafting a corrective action plan, we are not persuaded such a requirement would be warranted in this instance. Regarding the cost impact on customers more generally, we believe that NERC should have an opportunity in the first instance to balance such impacts and present a new or modified Reliability Standard for Commission approval. As articulated in Order No. 672, the cost of compliance is but one factor in determining whether to approve a proposed Reliability Standard and we will consider the potential cost impacts in the context of the larger record.263 c. Generation and Transmission Capacity Increase and Resource Adequacy Issues 161. As discussed above, corrective action plans are not required to use any specific mitigation measure and responsible entities are not required to build transmission or generation. Nevertheless, some entities may choose to include additional transmission or generation capacity as a mitigation measure in their corrective action plan, subject to the approval of relevant regulatory authorities. 162. With respect to the use of transmission as a mitigation measure, as stated in the NOPR and echoed by commenters, interregional transfer capability can be a solution to some extreme weather-related reliability concerns. We recognize that a proposal by a planning entity to increase its interregional transfer capability to address the impact of extreme heat and cold conditions on its portion of the Bulk-Power System may be acceptable 263 See d. Notification to Applicable Regulatory Authorities or Governing Bodies Responsible for Retail Electric Service Issues 165. We direct NERC to require in the new or modified Reliability Standard that responsible entities share their corrective action plans with, and solicit feedback from, applicable regulatory authorities or governing bodies responsible for retail electric service issues. We agree with commenters that relevant state entities should have the opportunity to provide input during the Order No. 672, 114 FERC ¶ 61,104 at P 264 Idaho 330. PO 00000 in a corrective action plan, and we expect that the benchmark planning cases developed, and wide-area studies conducted under this Standard could be beneficial for purposes of determining interregional transfer needs. However, we decline to set a minimum interregional transfer capability requirement in this proceeding and note the Commission’s ongoing pending proceeding addressing such a requirement in Docket No. AD23–3. 163. Regarding Idaho Power’s concern given the amount of time necessary to build new transmission,264 we note that corrective action plans address deficiencies identified in a long-term transmission planning timeframe (i.e., six to ten years and beyond). The period associated with a transmission project will inform whether and when that project may be included in an extreme weather corrective action plan. For example, a transmission project that is not expected to be operational in the six-to-ten-year long-term horizon may not be relied upon in an extreme weather corrective action plan to mitigate identified system deficiencies within that time horizon. In that circumstance, the responsible entity will have to develop an extreme weather corrective action plan that includes other measures that can be implemented to ensure Reliable Operation of its portion of the Bulk-Power System. 164. With respect to concerns that generation capacity is not appropriately included in corrective because it should be addressed through resource adequacy processes, we reiterate our findings above in section IV.F that the purpose of the new or modified Standard is to address transmission system deliverability and not to supplant or duplicate resource adequacy processes. With respect to concerns from PIOs and ACP that generation may be ineffective as a mitigation measure, we note that responsible entities have the flexibility to determine the appropriate mitigation measure for their circumstances. Frm 00022 Fmt 4701 Sfmt 4700 E:\FR\FM\23JNR3.SGM Power Comments at 4, 6. 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES3 development of corrective action plans. Just as this final rule seeks to ensure Reliable Operation of the Bulk-Power System during extreme heat and cold weather events, regulatory authorities and governing bodies responsible for retail electric service are taking actions to ensure reliability for local stakeholders. As such, we believe that requiring responsible entities to seek input from applicable regulatory authorities or governing bodies responsible for retail electric service issues when developing corrective action plans could help ensure that shared opportunities to increase system reliability are not missed. Further, as NESCOE points out, such consultation may allow these entities to better understand ‘‘the cost implications of various approaches’’ and, therefore, provide ‘‘better insight into the considerations and tradeoffs inherent in the options available.’’ 265 166. We also agree with NESCOE that sharing corrective action plans with applicable regulatory authorities or governing bodies responsible for retail electric service is necessary given the possibility that corrective action plans could include load shedding.266 As the Commission has stated in the past, we believe that the public should have notice and understanding of a responsible entity’s plans to shed nonconsequential load.267 Therefore, just as Reliability Standard TPL–001–5.1 requires planning coordinators and transmission planners to notify stakeholders, including applicable regulatory authorities or governing bodies responsible for retail electric service, of their intent to include nonconsequential load loss in corrective action plans for certain singlecontingency events,268 the new or modified Reliability Standard must also require responsible entities to similarly communicate their intent to use nonconsequential load shed in their extreme weather corrective action plans. 167. Further, because an important goal of transmission planning is to avoid load shed,269 any responsible entity that includes non-consequential load loss in its corrective action plan should also identify and share with applicable regulatory authorities or governing bodies responsible for retail electric service alternative corrective actions that would, if approved and implemented, avoid the use of load 265 NESCOE 266 Id. Comments at 4. at 5. 267 Transmission Planning Reliability Standards, Order No. 762, 77 FR 26686 (May 7, 2012), 139 FERC ¶ 61,060, at P 65 (2012). 268 Reliability Standard TPL–001–5.1, at attach. 1. 269 Order No. 693, 118 FERC ¶ 61,218 at P 1,795. VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 shedding. Examples could include building additional generation and/or transmission capacity, energy efficiency programs, and demand load response programs.270 168. While we direct NERC to require registered entities to communicate the results of their studies and share their extreme weather corrective action plans with applicable regulatory authorities or governing bodies responsible for retail electric service, NERC should not attempt to mandate that entities which are not under the Commission’s jurisdiction participate in the development of corrective action plans. I. Other Extreme Weather-Related Events and Issues 169. While the NOPR focused on extreme heat and cold weather events, the NOPR recognized that long-term drought, particularly when occurring in conjunction with high temperatures, could also pose a serious risk to BulkPower System reliability over a wide geographical area. In the NOPR, the Commission raised a concern that drought may cause or contribute to conditions that affect reliable operation of the Bulk-Power System such as transmission outages, reduced plant efficiency, and reduced generation capacity. The Commission sought comment on whether drought should be included along with extreme heat and cold weather events within the scope of the Reliability Standard.271 Additionally, the Commission invited comment on whether other extreme events with significant impact on the reliability of the Bulk-Power System could also be considered and modeled in the future.272 1. Comments 170. Indicated Trade Associations, EDF, and ACP support including the consideration of drought with extreme heat and cold weather events within the scope of the new or modified Reliability Standard.273 NERC agrees, suggesting that drought conditions be studied in drought-prone areas of the country.274 EDF notes that drought events can significantly impact the capacity and operation of water-cooled fossil and nuclear generators and other watercooled assets, as well as hydroelectric generators. EDF also asserts that drought 270 To be clear, responsible entities may also pursue such mitigating actions in the first instance, subject to the approval of relevant regulatory authorities. See supra P 161. 271 NOPR, 179 FERC ¶ 61,195 at P 92. 272 Id. P 93. 273 Indicated Trade Associations Comments at 13; EDF Comments at 19; ACP Comments at 18–19. 274 NERC Comments at 12. PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 41283 events are also highly correlated with high temperature and wildfires. Therefore, according to EDF, a failure to consider drought impacts could result in an overestimation of generation availability during an extreme heat weather event and understate the risks of that event.275 171. Similarly, Indicated Trade Associations note that they support the study of long-term drought impacts on relevant generation (e.g., hydro-electric, geothermal, and nuclear generation) in regions where drought has been, or may plausibly become, an issue. They add that droughts are sustained long-term conditions that may be fundamentally studied and addressed differently—for example, as a fuel supply sensitivity— than a short-term extreme heat or cold weather event.276 However, Indicated Trade Associations believe that the Commission should not attempt to address all types of extreme weather events at once in the Reliability Standard, but rather take a phased approach.277 172. ACP states ‘‘[b]ecause drought events are already widespread across all regions, and climate change will make them even more frequent and widespread, it would be prudent for the Commission and NERC to require all regions to include drought in their analysis of severe weather benchmark events under TPL–001.’’ 278 173. Tri-State notes that drought is already sufficiently included in the resource forecasts developed by Resource Planners.279 174. Certain commenters support the inclusion of extreme weather events beyond heat, cold and drought. For example, NERC identifies extreme weather conditions for inclusion in required studies, such as high winds, diminished winds, dust, smoke, fog, and increased cloud cover.280 According to NERC, such long-term, widespread weather and environmental conditions can impact resource availability and the transmission system. Other commenters suggest the inclusion of other extreme weather events such as wildfires, hurricanes, and tornadoes; 281 rain and wind (including derechos), and ice storms; 282 debris flow (landslide risk following wildfire scars and heavy 275 EDF Comments at 24. Trade Associations Comments at 13. 276 Indicated 277 Id. 278 ACP Comments at 10. Comments at 8. 280 NERC Comments at 12. 281 EDF Comments at 25. 282 AEP Comments at 5. 279 Tri-State E:\FR\FM\23JNR3.SGM 23JNR3 41284 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations precipitation) and rain-on-snow events that may lead to dam overtopping.283 175. EPRI points out that certain extreme weather events such as hurricanes or flooding can and do often occur independent of extreme heat and cold events. As such, EPRI states that the standard should identify climate and weather-related threats that occur concurrently or independently based on the planning area’s local footprint and develop scenarios accordingly.284 176. In contrast, MISO and LCRA comment that the Reliability Standard should be limited to extreme heat and cold events. MISO also comments that there is a fundamental difference between extreme heat and cold events and other extreme weather events: extreme temperature events would likely result in the load increasing and continuing to stay online, while other extreme weather events such as hurricanes or tornados create the possibility of load loss. MISO also points out that the operation horizon will continue to prepare for situations like hurricanes, tornados, or ice storms.285 Likewise, LCRA adds that drought and other extreme weather events beyond extreme temperature are already modeled by existing extreme event contingencies.286 lotter on DSK11XQN23PROD with RULES3 2. Commission Determination 177. We decline to direct NERC to create or modify a Reliability Standard to specifically require the assessment of the impacts of drought conditions as part of extreme heat and cold transmission system planning. As explained above, the type of long-term meteorological study involved in extreme heat and cold event transmission planning necessarily includes examining the extreme weather impact on base climate conditions over the study period, conditions that would have to include anticipated drought conditions in relevant planning areas.287 178. We agree with various commenters that drought conditions may impact reliability,288 and drought impacts on generation are already studied in the resource forecasts developed by resource planners and mitigated by operating procedures. Additionally, droughts that may occur concurrently with extreme heat and cold events will be included in the benchmark planning case, as drought conditions would be present in the 283 SCE Comments at 6–7. Comments at P 29. 285 MISO Comments at 2. 286 LCRA Comments at 4. 287 See supra P 114 288 See e.g., EDF Comments at 24. meteorological data that feeds the benchmark planning case,289 and the possibility of more severe drought could be reflected as part of a sensitivity analysis.290 179. Regarding other extreme weather events such as NERC’s concern with high winds, diminished winds, dust, smoke, smog fog, extreme snowstorms, flooding and increased cloud cover, and extreme snowstorms, or other commenters recommendations to include hurricanes, tornados, heavy rain and wind, and ice storms; and adjacent events such as wildfires, debris flow, and flooding, we agree that these conditions may affect the Bulk-Power System. However, we are not persuaded that a directive to address these events in the new or modified Reliability Standard is warranted at this time. 180. As MISO indicates, there are fundamental differences between extreme heat and cold events and other extreme weather events that cast doubt as to whether this Reliability Standard is the correct vehicle for addressing their impacts.291 For instance, extreme heat and cold events generally affect large geographic areas, while other extreme weather and adjacent events such as tornadoes, hurricanes, storms, floods, and wildfires tend to have more localized impacts. Moreover, as MISO points out, extreme heat and cold weather events are typically characterized by potential sustained load increases, while other extreme weather events typically result in load losses. J. Reliability Standard Development and Implementation Timeline 181. The Commission proposed to direct NERC to develop a new or modified Reliability Standard within one year of the effective date of a final rule in this proceeding, with compliance obligations beginning no later than 12 months from Commission approval of the proposed Reliability Standard.292 1. Comments 182. NERC raises no concerns with the proposed 12-month proposal to create a new or modified Reliability Standard; however, NERC requests that the Commission consider coordinating the timing of this final rule to allow NERC to benefit from the informational filings in Docket Nos. RM22–16–000 and AD21–13–000, as information obtained from these reports ‘‘may prove 284 EPRI VerDate Sep<11>2014 19:38 Jun 22, 2023 289 See supra note 155. supra P 114 and note 155. 291 MISO Comments at 2. 292 NOPR, 179 FERC ¶ 61,195 at P 48. 290 See Jkt 259001 PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 useful to the NERC standard development process.’’ 293 183. PJM and MISO Transmission Owners state that one year will not be enough time to develop the proposed Reliability Standard.294 PJM states that such a short timeframe will hamper stakeholder input.295 PJM further comments that the NOPR’s proposed timeline for standard development is not ‘‘sequenced with any of the other activities associated with ensuring enhanced reliability planning’’ and will thus ‘‘divert resources from the more comprehensive work that is needed in this area.’’ 296 MISO Transmission Owners agree that ‘‘one year’s time is not long enough’’ to modify or create a new Reliability Standard, and the Commission should give NERC ‘‘more time.’’ 297 184. Regarding the effective date of any resulting Reliability Standard, NERC requests that the Commission clarify the proposed implementation schedule, i.e., ‘‘whether entities must begin to comply with all new study requirements within one year of Commission approval (i.e., completed studies with Corrective Action Plans developed), or whether a phased-in approach beginning no later than one year is permitted for entities to coordinate on the development of new models, collect new data, and perform the necessary coordination to study wide area impacts before completing studies and developing any associated Corrective Action Plans.’’ 298 185. PJM also states that one year is not enough time for responsible entities to implement the new or revised Reliability Standard, because after Commission approval ‘‘Transmission Providers like PJM will have responsibility to translate it into workable planning process methodologies and related stakeholderapproved manual language.’’ 299 186. PJM further calls for flexibility on setting start dates for the implementation period for different 293 NERC Comments at 14. In Docket Nos. RM22– 16–000 and AD21–13–000, the Commission proposes directing transmission providers to submit one-time informational reports describing their current or planned policies and processes for conducting extreme weather vulnerability assessments. One-Time Informational Reports on Extreme Weather Vulnerability Assessments; Climate Change, Extreme Weather, & Elec. Sys. Reliability, Notice of Proposed Rulemaking, 87 FR 39414 (July 1, 2022), 179 FERC ¶ 61,196 (2022) (Informational Reports NOPR). 294 PJM Comments at 14; MISO Transmission Owners Comments at 7. 295 PJM Comments at 14. 296 Id. 297 MISO Transmission Owners Comments at 7. 298 NERC Comments at 14–15. 299 PJM Comments at 14–15. E:\FR\FM\23JNR3.SGM 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations entities given variances in regional planning cycles.300 APS echoes the call for flexibility as to the timeframe for developing a corrective action plan as the potential mitigation strategies may vary or include neighboring entities.301 187. AEP proposes that the Commission provide responsible entities ‘‘at least two years to implement stability analysis’’ after the proposed Reliability Standard takes effect, and that corrective action plans be developed ‘‘within one year of the assessment of reliability deficiency.’’ 302 2. Commission Determination lotter on DSK11XQN23PROD with RULES3 188. We direct NERC to submit a new or modified Reliability Standard within 18 months of the date of publication of this final rule in the Federal Register. Further, we direct NERC to propose an implementation timeline for the new or modified Reliability Standard, with implementation beginning no later than 12 months after the effective date of a Commission order approving the proposed Reliability Standard. 189. We agree with NERC that it is important to coordinate the timeline for the development of a Reliability Standard under this proceeding with that of the extreme weather one-time informational reports required under Docket Nos. RM22–16–000 and AD21– 13–000.303 The Informational Reports Final Rule, which is being issued concurrently with this final rule, directs responsible entities to develop and file with the Commission within 120 days of that order’s publication in the Federal Register a one-time informational report ‘‘describing their current or planned policies and processes for conducting extreme weather vulnerability assessments.’’ 304 The Informational Reports Final Rule further states that public comments will be due 60 days after the reports are filed.305 These informational reports may assist the standard drafting team’s efforts in developing the proposed Reliability Standard, as they will be helpful for determining whether and to what extent transmission providers are already considering the impacts of extreme weather events. We believe that extending the NOPR’s proposed standard development timeline is appropriate to ensure that NERC can benefit from the information obtained 300 Id. 301 APS Comments at 8. Comments at 13, 24. 303 Final Rule, Order No. 897, 183 FERC ¶ 61,192 (2023) (‘‘Informational Reports Final Rule’’). 304 Id. PP 1, 3. 305 Id. P 104. 302 AEP VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 from these reports, as well as from public comments on the reports. 190. With regards to PJM and MISO Transmission Owners’ comments, we recognize that the NOPR proposed an ambitious development timeline for the proposed Reliability Standard. As we indicated in the NOPR, the negative impact of extreme weather on the reliability of the Bulk-Power System demands an urgent response. Further, we note that NERC, the entity responsible for the development of the Reliability Standard, did not raise concerns about the NOPR’s proposed development timeline. As such, we are not persuaded that there is a present need to extend the deadline to submit a proposed Reliability Standard further than what is necessary to ensure that NERC can benefit from the data obtained as a result of the one-time informational reports. 191. Accordingly, we direct NERC to submit a proposed Reliability Standard within 18 months of the date of publication of this final rule in the Federal Register. We believe that extending the development timeline by six months should be sufficient to ensure that the standard drafting team will be able to take advantage of the one-time reports required by the Commission under Docket Nos. RM22– 16–000 and AD21–13–000. 192. We decline to direct NERC to ensure that entities fully comply with all new requirements within one year of Commission approval (i.e., completed studies with corrective action plans developed). As AEP and PJM note in their comments, the new or modified Reliability Standard will require significant implementation efforts. Given the complexities and multiple stages of activity that would be involved in compliance with the directives in this final rule, we believe that a more flexible implementation approach is appropriate. 193. We therefore direct NERC to establish an implementation timeline for the proposed Reliability Standard. In complying with this directive, NERC will have discretion to develop a phased-in implementation timeline for the different requirements of the proposed Reliability Standard (i.e., developing benchmark cases, conducting studies, developing corrective action plans). However, this phased-in implementation must begin within 12 months of the effective date of a Commission order approving the proposed Reliability Standard and must include a clear deadline for implementation of all requirements. PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 41285 V. Information Collection Statement 194. The information collection requirements contained in this final rule are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995.306 OMB’s regulations require approval of certain information collection requirements imposed by agency rules.307 Upon approval of a collection of information, OMB will assign an OMB control number and expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to this collection of information unless the collection of information displays a valid OMB control number. 195. The directives to NERC to develop a new Reliability Standard or modify existing Reliability Standard TPL–001 (Transmission System Planning Performance Requirements), are covered by, and already included in, the existing OMB-approved information collection FERC–725 (Certification of Electric Reliability Organization; Procedures for Electric Reliability Standards; OMB Control No. 1902– 0225), under Reliability Standards Development.308 The reporting requirements in FERC–725 include the ERO’s overall responsibility for developing Reliability Standards, such as the TPL–001 Reliability Standard, which is designed to ensure the BulkPower System will operate reliably over a broad spectrum of system conditions and following a wide range of probable contingencies.309 The Commission will submit to OMB a request for a nonsubstantive revision of FERC–725 in connection with this final rule. VI. Environmental Analysis 196. 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 306 44 U.S.C. 3507(d). CFR 1320.11. 308 Reliability Standards Development as described in FERC–725 covers standards development initiated by NERC, the Regional Entities, and industry, as well as standards the Commission may direct NERC to develop or modify. The information collection associated with this final rule ordinarily would be a non-material addition to FERC–725. However, an information collection request unrelated to this final rule is pending review under FERC–725 at the Office of Management and Budget. To submit this final rule timely to OMB, we will submit this to OMB as a temporary placeholder under FERC–725(1A), OMB Control No. 1902–0289. 309 Reliability Standard TPL–001–4, Purpose. 307 5 E:\FR\FM\23JNR3.SGM 23JNR3 41286 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations environment.310 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.311 The actions directed here fall within this categorical exclusion in the Commission’s regulations. VII. Regulatory Flexibility Act 197. The Regulatory Flexibility Act of 1980 (RFA) 312 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. 198. This final rule directs NERC, the Commission-certified ERO, to develop a new or modified Reliability Standard that requires long-term transmission system planning designed to prepare for extreme heat and cold weather events. Therefore, this final rule will not have a significant or substantial impact on entities other than NERC. Consequently, the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. 199. Any Reliability Standards proposed by NERC in compliance with VIII. Document Availability 200. 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). At this time, the Commission has suspended access to the Commission’s Public Reference Room due to the President’s March 13, 2020 proclamation declaring a National Emergency concerning the Novel Coronavirus Disease (COVID–19). 201. From FERC’s Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field. 202. User assistance is available for eLibrary and the FERC’s website 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. IX. Effective Date and Congressional Notification 203. This rule will become effective September 21, 2023. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a ‘‘major rule’’ as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. By the Commission. Commissioner Danly is concurring in part. Issued: June 15, 2023. Debbie-Anne A. Reese, Deputy Secretary. The following appendix will not appear in the Code of Federal Regulations. Appendix A: Commenter Names Acronyms Commenter name ACP .............................................. ACEG ........................................... AEP .............................................. Ampjack ........................................ APS .............................................. BPA .............................................. EDF .............................................. Indicated Trade Associations ....... American Clean Power Association. Americans for a Clean Energy Grid. American Electric Power Service Corporation. Ampjack Industries Ltd. Arizona Public Service Company. Bonneville Power Administration. Environmental Defense Fund. The Edison Electric Institute (EEI), the American Public Power Association (APPA), the Large Public Power Council (LPPC), the National Rural Electric Cooperative Association (NRECA), and the Transmission Access Policy Study Group (TAPS). Entergy Services, LLC. Electric Power Research Institute. Electric Power Supply Association. Electric Reliability Council of Texas, Inc. Eversource Energy Service Company. Idaho Power Company. ISO New England Inc. LCRA Transmission Services Corporation. Louisiana Public Service Commission. Midcontinent Independent System Operator, Inc. Entergy ......................................... EPRI ............................................. EPSA ............................................ ERCOT ......................................... Eversource ................................... Idaho Power ................................. ISO–NE ........................................ LCRA ............................................ Louisiana PSC .............................. MISO ............................................ lotter on DSK11XQN23PROD with RULES3 this rulemaking will be considered by the Commission in future proceedings. As part of any future proceedings, the Commission will make determinations pertaining to the Regulatory Flexibility Act based on the content of the Reliability Standards proposed by NERC. 310 Regul. Implementing the Nat’l Env’t Pol’y Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 Stats. & Regs. ¶ 30,783 (1987) (cross-referenced at 41 FERC ¶ 61,284). PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 311 18 312 5 E:\FR\FM\23JNR3.SGM CFR 380.4(a)(2)(ii) (2022). U.S.C. 601–612. 23JNR3 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules and Regulations Acronyms Commenter name MISO Transmission Owners ........ Ameren Services Company, as agent for Union Electric Company d/b/a Ameren Missouri, Ameren Illinois Company d/b/a Ameren Illinois and Ameren Transmission Company of Illinois; American Transmission Company LLC; Big Rivers Electric Corporation; Central Minnesota Municipal Power Agency; City Water, Light & Power (Springfield, IL); Cleco Power LLC; Cooperative Energy; Dairyland Power Cooperative; Duke Energy Business Services, LLC for Duke Energy Indiana, LLC; East Texas Electric Cooperative; Entergy Arkansas, LLC; Entergy Louisiana, LLC; Entergy Mississippi, LLC; Entergy New Orleans, LLC; Entergy Texas, Inc.; Great River Energy; GridLiance Heartland LLC; Hoosier Energy Rural Electric Cooperative, Inc.; Indiana Municipal Power Agency; Indianapolis Power & Light Company; International Transmission Company d/b/a ITCTransmission; ITC Midwest LLC; Lafayette Utilities System; Michigan Electric Transmission Company, LLC; MidAmerican Energy Company; Minnesota Power (and its subsidiary Superior Water, L&P); Missouri River Energy Services; Montana-Dakota Utilities Co.; Northern Indiana Public Service Company LLC; Northern States Power Company, a Minnesota corporation, and Northern States Power Company, a Wisconsin corporation, subsidiaries of Xcel Energy Inc.; Northwestern Wisconsin Electric Company; Otter Tail Power Company; Prairie Power, Inc.; Republic Transmission, LLC; Southern Illinois Power Cooperative; Southern Indiana Gas & Electric Company (d/b/a CenterPoint Energy Indiana South); Southern Minnesota Municipal Power Agency; Wabash Valley Power Association, Inc.; and Wolverine Power Supply Cooperative, Inc. National Association of Regulatory Utility Commissioners. North American Electric Reliability Corporation. New England States Committee on Electricity. National Mining Association. New York Independent System Operator, Inc. New York State Reliability Council. Federal Energy Advocate for the Public Utilities Commission of Ohio. Pacific Gas and Electric Company. Public Interest Organizations (Sustainable FERC Project, Natural Resources Defense Council, American Council on Renewable Energy, Sierra Club, Southern Environmental Law Center, Western Resource Advocates). PJM Interconnection, L.L.C. Southern California Edison Company. Sunflower Electric Power Corporation. Tri-State Generation and Transmission Association, Inc. Union of Concerned Scientists. Working for Advanced Transmission Technologies. WE ACT for Environmental Justice. NARUC ......................................... NERC ........................................... NESCOE ...................................... NMA .............................................. NYISO .......................................... NYSRC ......................................... Ohio FEA ...................................... PG&E ............................................ PIOs .............................................. PJM .............................................. SCE .............................................. Sunflower ...................................... Tri-State ........................................ UCS .............................................. WATT ........................................... WE ACT ....................................... [FR Doc. 2023–13286 Filed 6–22–23; 8:45 am] BILLING CODE 6717–01–P lotter on DSK11XQN23PROD with RULES3 41287 VerDate Sep<11>2014 19:38 Jun 22, 2023 Jkt 259001 PO 00000 Frm 00027 Fmt 4701 Sfmt 9990 E:\FR\FM\23JNR3.SGM 23JNR3

Agencies

[Federal Register Volume 88, Number 120 (Friday, June 23, 2023)]
[Rules and Regulations]
[Pages 41262-41287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13286]



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No. 120

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Part IV





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Federal Energy Regulatory Commission





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18 CFR Part 40





Transmission System Planning Performance Requirements for Extreme 
Weather; Final Rule

Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Rules 
and Regulations

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM22-10-000; Order No. 896]


Transmission System Planning Performance Requirements for Extreme 
Weather

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission directs the North 
American Electric Reliability Corporation, the Commission-certified 
Electric Reliability Organization, to develop a new or modified 
Reliability Standard no later than 18 months of the date of publication 
of this final rule in the Federal Register to address reliability 
concerns pertaining to transmission system planning for extreme heat 
and cold weather events that impact the Reliable Operation of the Bulk-
Power System. Specifically, we direct the North American Electric 
Reliability Corporation to develop a new or modified Reliability 
Standard that requires the following: development of benchmark planning 
cases based on prior extreme heat and cold weather events and/or future 
meteorological projections; planning for extreme heat and cold events 
using steady state and transient stability analyses that cover a range 
of extreme weather scenarios, including the expected resource mix's 
availability during extreme weather conditions and the broad area 
impacts of extreme weather; and corrective action plans that include 
mitigation activities for specified instances where performance 
requirements during extreme heat and cold events are not met.

DATES: This rule is effective September 21, 2023.

FOR FURTHER INFORMATION CONTACT: 

Mahmood Mirheydar (Technical Information), Office of Electric 
Reliability, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8034, [email protected]
Gonzalo E. Rodriguez (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8568, [email protected]

SUPPLEMENTARY INFORMATION: 

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
Introduction................................................           1
II. Background..............................................           8
    A. Legal Authority......................................           8
    B. Reliability Standard TPL-001-5.1 (Transmission System          10
     Planning Performance Requirements).....................
    C. Prior Commission Actions To Address the Reliability            14
     Impacts of Extreme Weather.............................
    D. Notice of Proposed Rulemaking........................          17
III. The Need for Reform....................................          20
IV. Discussion..............................................          25
    A. Directive to NERC To Develop New or Modified                   25
     Reliability Standard...................................
    B. Develop Benchmark Events and Planning Cases Based on           30
     Major Prior Extreme Heat and Cold Weather Events and/or
     Meteorological Projections.............................
        1. Comments.........................................          32
        2. Commission Determination.........................          35
    C. Definition of ``Wide-Area''..........................          41
        1. Comments.........................................          44
        2. Commission Determination.........................          50
    D. Entities Responsible for Developing Benchmark Events           51
     and Planning Cases, and for Conducting Transmission
     Planning Studies of Wide-Area Events...................
        1. Comments.........................................          53
            a. Entity Responsible for Development of                  53
             Benchmark Events...............................
            b. Entity Responsible for Development of                  54
             Planning Cases and Conducting Transmission
             Planning Studies of Wide-Area Events...........
        2. Commission Determination.........................          58
            a. Entity Responsible for Establishing Benchmark          58
             Events.........................................
            b. Entities Responsible for Development of                60
             Planning Cases and Conducting Transmission
             Planning Studies of Wide-Area Events...........
    E. Coordination Among Registered Entities and Sharing of          63
     Data and Study Results.................................
        1. Comments.........................................          66
        2. Commission Determination.........................          72
    F. Concurrent/Correlated Generator and Transmission               78
     Outages................................................
        1. Comments.........................................          82
        2. Commission Determination.........................          88
    G. Conduct Transmission System Planning Studies for               95
     Extreme Heat and Cold Weather Events...................
        1. Steady State and Transient Stability Analyses....          95
            a. Comments.....................................          98
            b. Commission Determination.....................         111
        2. Sensitivity Analysis.............................         118
            a. Comments.....................................         121
            b. Commission Determination.....................         124
        3. Modifications to the Traditional Planning                 127
         Approach...........................................
            a. Comments.....................................         131
            b. Commission Determination.....................         134
    H. Implement a Corrective Action Plan if Performance             139
     Standards Are Not Met..................................
        1. Comments.........................................         143
            a. Jurisdictional Issues........................         143
            b. Corrective Action Plans......................         144
            c. Generation and Transmission Capacity Increase         148
             and Resource Adequacy Issues...................

[[Page 41263]]

 
            d. Notification to Applicable Regulatory                 151
             Authorities or Governing Bodies Responsible for
             Retail Electric Service Issues.................
        2. Commission Determination.........................         152
            a. Jurisdictional Issues........................         154
            b. Circumstances That Require Corrective Action          157
             Plans..........................................
            c. Generation and Transmission Capacity Increase         161
             and Resource Adequacy Issues...................
            d. Notification to Applicable Regulatory                 165
             Authorities or Governing Bodies Responsible for
             Retail Electric Service Issues.................
    I. Other Extreme Weather-Related Events and Issues......         169
        1. Comments.........................................         170
        2. Commission Determination.........................         177
    J. Reliability Standard Development and Implementation           181
     Timeline...............................................
        1. Comments.........................................         182
        2. Commission Determination.........................         188
V. Information Collection Statement.........................         194
VI. Environmental Analysis..................................         196
VII. Regulatory Flexibility Act.............................         197
VIII. Document Availability.................................         200
IX. Effective Date and Congressional Notification...........         203
Appendix A: Commenter Names.................................
 

I. Introduction

    1. Pursuant to section 215(d)(5) of the Federal Power Act (FPA),\1\ 
the Commission directs the North American Electric Reliability 
Corporation (NERC), the Commission-certified Electric Reliability 
Organization (ERO), to submit a new Reliability Standard or 
modifications to Reliability Standard TPL-001-5.1 that addresses 
concerns pertaining to transmission system planning for extreme heat 
and cold weather events that impact the Reliable Operation \2\ of the 
Bulk-Power System.\3\
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    \1\ 16 U.S.C. 824o(d)(5).
    \2\ The FPA defines ``Reliable Operation'' as ``operating the 
elements of the Bulk-Power System within equipment and electric 
system thermal, voltage, and stability limits so that instability, 
uncontrolled separation, or cascading failures of such system will 
not occur as a result of a sudden disturbance, including a 
cybersecurity incident, or unanticipated failure of system 
elements.'' 16 U.S.C. 824o(a)(4).
    \3\ The Bulk-Power System is defined in the FPA as ``facilities 
and control systems necessary for operating an interconnected 
electric energy transmission network (or any portion thereof), and 
electric energy from generating facilities needed to maintain 
transmission system reliability. The term does not include 
facilities used in the local distribution of electric energy.'' Id. 
824o(a)(1).
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    2. We take this action to address challenges associated with 
planning for extreme heat and cold weather events, particularly those 
that occur during periods when the Bulk-Power System must meet 
unexpectedly high demand.\4\ Extreme heat and cold weather events have 
occurred with greater frequency in recent years, and are projected to 
occur with even greater frequency in the future.\5\ These events have 
shown that load shed during extreme temperature result in unacceptable 
risk to life and have extreme economic impact.\6\ As such, the impact 
of concurrent failures of Bulk-Power System generation and transmission 
equipment and the potential for cascading outages \7\ that may be 
caused by extreme heat and cold weather events should be studied and 
corrective actions should be identified and implemented.
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    \4\ Technical Conference June 1-2, 2021, Climate Change, Extreme 
Weather, and Electric System Reliability, Docket No. AD21-13-000 
(June 1-2, 2021), June 1, 2021 Tr. 26: 3-7 (Derek Stenclik, Founding 
Partner, Telos Energy, Inc.), 31:7-8 (Judy Chang, Undersecretary of 
Energy, Massachusetts).
    \5\ See e.g., Environmental Protection Agency, Climate Change 
Indicators: Weather and Climate (May 12, 2021) (EPA Climate Change 
Indicators), https://www.epa.gov/climate-indicators/weather-climate 
(showing an upward trend in extreme heat and cold weather events). 
NOAA, Adam Smith, 2022 U.S. Billion-dollar Weather and Climate 
Disasters in Historical Context (Jan. 10, 2023), https://www.climate.gov/news-features/blogs/2022-us-billion-dollar-weather-and-climate-disasters-historical-context.
    \6\ FERC, NERC, and Regional Entity Staff, The February 2021 
Cold Weather Outages in Texas and the South Central United States, 
at 9, 192 (Nov. 16, 2021), https://www.ferc.gov/media/february-2021-cold-weather-outages-texas-and-south-central-united-states-ferc-nerc-and (2021 Cold Weather Event Report).
    \7\ NERC Glossary of Terms Used in Reliability Standards 
(Updated Mar. 8, 2023) (NERC Glossary). NERC defines ``cascading'' 
as, the ``uncontrolled successive loss of System Elements triggered 
by an incident at any location. Cascading results in widespread 
electric service interruption that cannot be restrained from 
sequentially spreading beyond an area predetermined by studies.''
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    3. At the Commission's June 1-2, 2021 technical conference on 
Climate Change, Extreme Weather, and Electric System Reliability, there 
was consensus among panelists that planners cannot simply project 
historical weather patterns forward to effectively forecast the future, 
since climate change has made the use of historical weather 
observations no longer representative of future conditions.\8\ For 
example, extreme summer heat in regions like the Pacific Northwest and 
extreme winter cold in regions like Texas have increased demand for 
electricity at times when historically demand has been low.\9\ As 
events such as these will likely continue to present challenges in the 
future, transmission planners and planning coordinators must account 
for this new reality in their planning processes.\10\
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    \8\ June 1, 2021 Tr. 30:2-3 (Chang), 31:12-18 (Lisa Barton, 
Executive Vice President/Chief Operating Officer, American Electric 
Power).
    \9\ June 1, 2021 Tr. 31:1-6 (Chang); June 2, 2021 Tr. 72:8-10 
(Amanda Frazier, Senior Vice President of Regulatory Policy, Vista 
Corp.); 9:1-5 (Wesley Yeomans, Vice President of Operations, New 
York Independent System Operator, Inc. (NYISO)) (noting that in New 
York the majority of the extreme conditions were cold weather 
related but that there can be heat waves in New York City, and more 
heat waves are expected).
    \10\ June 1, 2021 Tr. 35:1-6 (Chang). See also US News, 
Blackouts in US Northwest Due to Heat Wave, Deaths Reported (June 
29, 2021), https://www.usnews.com/news/business/articles/2021-06-29/rolling-blackouts-for-parts-of-us-northwest-amid-heat-wave; Judah 
Cohen et al., Linking Arctic Variability and Change With Extreme 
Winter Weather in the United States, 373 Sci. 1116, 1120 (2021), (a 
study connecting the 2021 extreme cold weather event in Texas and 
the South-central United States to global warming-induced weather 
anomalies that are likely to continue to produce severe winter storm 
events).
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    4. Since 2011, the country has experienced at least seven major 
extreme heat and cold weather events,\11\ each of which put stress on 
the Bulk-Power System and resulted in some degree of load shed. In some 
cases, these events nearly caused system collapse

[[Page 41264]]

and uncontrolled blackouts, which were avoided due to system operator 
actions.
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    \11\ See Transmission System Planning Performance Requirements 
for Extreme Weather, Notice of Proposed Rulemaking, 87 FR 38,020 
(June 27, 2023), 179 FERC ] 61,195 at PP 24-36 (2022) (NOPR) 
(discussing these prior events in detail).
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    5. Given the reliability risks associated with extreme heat and 
cold weather events, including the potential for widespread blackouts, 
maintaining the reliability of the Bulk-Power System requires 
transmission system planning to account for the potential impact of 
extreme heat and cold weather over wide geographical areas, and to 
consider the changing resource mix. Reliability Standard TPL-001-4 \12\ 
was developed to establish transmission system planning performance 
requirements that ensure that the Bulk-Power System operates reliably 
over a broad spectrum of system conditions and following a wide range 
of probable contingencies.\13\ Both it and its successor, TPL-001-5.1, 
include provisions for transmission planners and planning coordinators 
to study system performance under extreme events based on their 
experience; \14\ however, neither standard specifically requires 
entities to conduct performance analysis for extreme heat and cold 
weather, despite the fact that such conditions have clearly 
demonstrated a risk to the Reliable Operation of the Bulk-Power System, 
thus leaving a reliability gap in system planning.
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    \12\ Effective July 1, 2023, Reliability Standard TPL-001-4 will 
be replaced by Reliability Standard TPL-001-5.1. Unless otherwise 
specified, the use of Reliability Standard TPL-001-5.1 in this final 
rule also refers to its predecessor, Reliability Standard TPL-001-4.
    \13\ Reliability Standard TPL-001-5, at 1.
    \14\ Id. at tbl. 1.
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    6. To address this reliability gap, we direct NERC to develop a new 
or modified Reliability Standard that requires the following: (1) the 
development of benchmark planning cases based on information such as 
major prior extreme heat and cold weather events and/or future 
meteorological projections; (2) planning for extreme heat and cold 
weather events using steady state and transient stability analyses 
expanded to cover a range of extreme weather scenarios, including 
expected availability of the resource mix during extreme heat and cold 
weather conditions, and including the broad area impacts of extreme 
heat and cold weather; and (3) the development of corrective action 
plans that mitigate specified instances where performance requirements 
during extreme heat and cold weather events are not met. In directing 
NERC to develop a new or modified Reliability Standard, we are not 
proposing specific requirements. Instead, we identify concerns that 
should be addressed by the proposed Reliability Standard. NERC may 
propose to develop a new or modified Reliability Standard that address 
our concerns in an equally efficient and effective manner; however, 
NERC's proposal should explain how it addresses the Commission's 
concerns.\15\
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    \15\ See e.g., Mandatory Reliability Standards for the Bulk-
Power Sys., Order No. 693, 72 FR 16416 (Apr. 4, 2007), 118 FERC ] 
61,218, at PP 186, 297, order on reh'g, Order No. 693-A, 72 FR 40717 
(July 25, 2007), 120 FERC ] 61,053 (2007) (``where the Final Rule 
identifies a concern and offers a specific approach to address the 
concern, we will consider an equivalent alternative approach 
provided that the ERO demonstrates that the alternative will address 
the Commission's underlying concern or goal as efficiently and 
effectively as the Commission's proposal'').
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    7. We direct NERC to submit the proposed new or modified 
Reliability Standard no later than 18 months from the publication of 
this final rule in the Federal Register. We believe that an 18-month 
deadline provides sufficient time for NERC to develop a responsive 
Standard in consideration of the issues involved and the steps in 
NERC's standards development process. Further, we direct NERC to ensure 
that the proposed new or modified Reliability Standard becomes 
mandatory and enforceable beginning no later than 12 months from the 
effective date of Commission approval of the new or modified 
Reliability Standard.

II. Background

A. Legal Authority

    8. Section 215 of the FPA provides that the Commission may certify 
an ERO, the purpose of which is to develop mandatory and enforceable 
Reliability Standards, subject to Commission review and approval.\16\ 
Reliability Standards may be enforced by the ERO, subject to Commission 
oversight, or by the Commission independently.\17\ Pursuant to section 
215 of the FPA, the Commission established a process to select and 
certify an ERO,\18\ and subsequently certified NERC.\19\
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    \16\ 16 U.S.C. 824o(c).
    \17\ Id. 824o(e).
    \18\ Rules Concerning Certification of the Elec. Reliability 
Org. & Procedures for the Establishment, Approval, & Enf't. of Elec. 
Reliability Standards, Order No. 672, 71 FR 8662 (Feb. 17, 2006), 
114 FERC ] 61,104, order on reh'g, Order No. 672-A, 71 FR 19814 
(Apr. 18, 2006), 114 FERC ] 61,328 (2006).
    \19\ N. Am. Elec. Reliability Corp., 116 FERC ] 61,062, order on 
reh'g and compliance, 117 FERC ] 61,126 (2006), aff'd sub nom. 
Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
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    9. Pursuant to section 215(d)(5) of the FPA, the Commission has the 
authority, upon its own motion or upon complaint, to order the ERO to 
submit to the Commission a proposed Reliability Standard or a 
modification to a Reliability Standard that addresses a specific matter 
if the Commission considers such a new or modified Reliability Standard 
appropriate to carry out section 215 of the FPA.\20\ Further, pursuant 
to Sec.  39.5(g) of the Commission's regulations, the Commission may 
order a deadline by which the ERO must submit a proposed or modified 
Reliability Standard, or when ordering the ERO to submit to the 
Commission a proposed Reliability Standard that addresses a specific 
matter.\21\
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    \20\ 16 U.S.C. 824o(d)(5).
    \21\ 18 CFR 39.5(g) (2022).
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B. Reliability Standard TPL-001-5.1 (Transmission System Planning 
Performance Requirements)

    10. Transmission system planning refers to the evaluation of future 
transmission system performance and creation of corrective action plans 
that include mitigation to remedy identified deficiencies.\22\ The 
planning horizon associated with transmission system planning covers 
near term (one to five years), long-term (six to ten years), and 
beyond.\23\
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    \22\ NERC Glossary (defining ``Planning Assessment'' as 
``documented evaluation of future Transmission System performance 
and Corrective Action Plans to remedy identified deficiencies'').
    \23\ Id. (defining ``Near-Term Transmission Planning Horizon'' 
and ``Long-Term Transmission Planning Horizon'').
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    11. Reliability Standard TPL-001-5.1 establishes minimum 
transmission system planning performance requirements to plan a Bulk-
Power System that will operate reliably over a broad spectrum of system 
conditions and following a wide range of probable contingencies.\24\ 
Under Requirement R2 of Reliability Standard TPL-001-5.1, each 
transmission planner and planning coordinator must prepare an annual 
planning assessment for its portion of the Bulk-Power System.\25\ This 
planning assessment is required for both near-term and long-term 
transmission planning horizons.\26\
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    \24\ Reliability Standard TPL-001-5.1, Purpose.
    \25\ Id., at Requirement 2. Further, steady-state analyses are a 
snapshot in time where load and system conditions (e.g., generators, 
lines, facilities) are modeled as constant (not as changing over 
time). The analysis will either solve (converge numerically) or not 
solve (diverge numerically). See IEEE, Transactions on Power 
Systems, Vol. 19, No. 2, (May 2004) (power system stability is the 
ability of an electric power system, for a given initial operating 
condition, to regain a state of operating equilibrium after being 
subjected to a physical disturbance, with most system variables 
bounded so that practically the entire system remains intact); see 
also, Kundur, Prabha, Power System Stability and Control, McGraw 
Hill, at 26 (1994).
    \26\ See Reliability Standard TPL-001-5.1, at Requirement 2.1 
(Near-Term Transmission Planning Horizon) and Requirement R.2.2 
(Long-Term Transmission Planning Horizon).
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    12. Requirements R3 and R4 of Reliability Standard TPL-001-5.1

[[Page 41265]]

require in part that planning coordinators and transmission planners 
conduct steady state and stability studies of pre-specified extreme 
events and evaluate possible actions designed to reduce the likelihood 
or mitigate the consequences and adverse impacts of the event(s), if 
the analysis concludes that the pre-selected extreme events cause 
cascading outages.
    13. Table 1 of Reliability Standard TPL-001-5.1 includes a list of 
examples of planning events (i.e., Category P1 through P7) \27\ for 
which specific studies may be required based on the entity's own 
evaluation that such an event could occur within its operating area. 
Section 3.a of Table-1 (Steady State & Stability Performance Extreme 
Events) states that steady state analysis should be conducted for wide-
area events affecting the transmission system based on system 
configuration and how it can be affected by events such as wildfires 
and severe weather (e.g., hurricanes and tornadoes). In addition, 
section 3.b serves as a catch-all provision, stating that steady state 
analysis should be performed for ``other events based upon operating 
experience that may result in wide-area disturbances.''
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    \27\ Categories P1 through P7 are defined in TPL-001-5.1 in 
Table 1--Steady State & Stability Performance Planning Events.
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C. Prior Commission Actions To Address the Reliability Impacts of 
Extreme Weather

    14. On June 1 and 2, 2021, the Commission convened a staff-led 
technical conference on Climate Change, Extreme Weather, and Electric 
System Reliability.\28\ The Commission sought to understand, among 
other things, whether further action from the Commission is needed to 
help achieve an electric system that can withstand, respond to, and 
recover from extreme weather events.\29\
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    \28\ Climate Change, Extreme Weather, and Electric System 
Reliability, Notice of Technical Conference, Docket No. AD21-13-000, 
at 1 (Mar. 5, 2021).
    \29\ Id. at 2.
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    15. In the pre- and post-conference comments, industry experts 
agreed that extreme weather events are likely to become more severe and 
frequent in the future.\30\ They also acknowledged the challenges 
associated with planning for extreme events, including shifting 
scheduled maintenance and canceling or recalling transmission and 
generation assets from scheduled maintenance to meet demand under 
unexpected circumstances.\31\ Further, commenters discussed potential 
changes to the Reliability Standards to address planning and 
operational preparedness for energy adequacy risks,\32\ contingencies 
related to extreme weather events, and wide-area transmission planning 
and development challenges, among others.\33\ Comments also addressed 
more directly the potential reliability gaps in the existing set of 
Reliability Standards, including Reliability Standard TPL-001-4, and 
identified potential solutions.\34\
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    \30\ CAISO Pre-Conference Comments at 1-3; California Public 
Utilities Commission Pre-Conference Comments at 4; Oregon Public 
Utilities Commission Pre-Conference Comments at 2-3; NYISO Pre-
Conference Comments at 4; AEP Pre-Conference Comments at 5.
    \31\ June 2, 2021, Tr. at 21-23 (Wesley Yeomans, Vice President 
of Operations, NYISO).
    \32\ ISO-New England Inc. Pre-Conference Comments at 10.
    \33\ Midcontinent Independent System Operator (MISO) Pre-
Conference Comments at 4-5, 14-17.
    \34\ See e.g., NERC Pre-Conference Comments at 6; MISO Post-
Conference Comments at 20; Pacific Gas & Electric Company Pre-
Conference Comments at 19-20; PJM Post-Conference Comments at 21; 
CAISO Post-Conference Comments at 10.
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    16. On August 24, 2021, and February 16, 2023, the Commission 
approved revised Reliability Standards to address some of the 
reliability risks posed by extreme cold weather.\35\ These Reliability 
Standards, among other things, require generators to implement plans 
for cold weather preparedness and implement freeze protection measures 
to mitigate the reliability impacts of extreme cold weather on their 
generating units. The new and revised standards also require the 
balancing authority, transmission operator, and reliability coordinator 
to plan and operate the grid reliably during cold weather conditions by 
requiring the exchange of certain information related to the 
generator's capability to operate under such conditions.\36\
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    \35\ N. Am. Elec. Reliability Corp., 176 FERC ] 61,119 (2021). 
The Commission approved proposed Reliability Standards EOP-011-2 
(Emergency Preparedness and Operations); IRO-010-4 (Reliability 
Coordinator Data Specification and Collection); and TOP-003-5 
(Operational Reliability Data) (collectively, the Cold Weather 
Reliability Standards) and Order Approving Extreme Cold Weather 
Reliability Standards EOP-011-3 and EOP-012-1 and Directing 
Modification of Reliability Standard EOP-012-1, 182 FERC ] 61,094 
(2023).
    \36\ Id. P 3.
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D. Notice of Proposed Rulemaking

    17. On June 26, 2022, the Commission issued the Notice of Proposed 
Rulemaking (NOPR) proposing to direct NERC to develop a new or modified 
Reliability Standard to address a lack of a long term planning 
requirement for extreme heat and cold weather events.\37\ Specifically, 
the Commission proposed to direct NERC to develop either modifications 
to Reliability Standard TPL-001-5.1 or a new Reliability Standard, to 
require the following: (1) development of benchmark planning cases 
based on major prior extreme heat and cold weather events and/or 
meteorological projections; (2) planning for extreme heat and cold 
weather events using steady state and transient stability analyses 
expanded to cover a range of extreme weather scenarios including the 
expected resource mix's availability during extreme heat and cold 
weather conditions, and including the wide-area impacts of extreme heat 
and cold weather; and (3) development of corrective action plans that 
mitigate any instances where performance requirements for extreme heat 
and cold weather events are not met.\38\
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    \37\ NOPR, 179 FERC ] 61,195 at P 47.
    \38\ Id. P 51.
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    18. The NOPR preliminarily found that, based on the wide geographic 
impacts on the Bulk-Power System of previous extreme heat and cold 
weather events, the study criteria for extreme heat and cold events 
should include a consideration of wide-area conditions affecting 
neighboring regions and their impact on one planning area's ability to 
rely on the resources of another region during the weather event.\39\
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    \39\ Id. P 67.
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    19. The NOPR sought comments on all aspects of the proposed 
directives, including among others: (1) the development of benchmark 
planning cases; (2) requiring transmission planning studies of wide-
area extreme heat and cold events; (3) the study of concurrent 
generator and transmission outages; (4) the analysis of sensitivities; 
(5) modifications to current deterministic planning approaches; (6) 
coordination among registered entities and sharing of study results; 
(7) requiring entities to implement corrective action plans if 
performance standards are not met; and (8) whether the final rule 
should address other extreme weather events beyond heat and cold 
events. The comment period for the NOPR ended on August 26, 2022, and 
the Commission received 33 sets of comments.\40\
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    \40\ A list of commenters to the NOPR and the abbreviated names 
used in this final rule appear in Appendix A.
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III. The Need for Reform

    20. Extreme weather-related events that spread across large 
portions of the country over the past decade demonstrate the challenges 
to transmission planning from extreme heat and cold weather patterns. 
The NOPR discussed seven major extreme heat and cold weather events 
that had

[[Page 41266]]

occurred since 2011.\41\ Of these, four (2011, 2013, 2018, and 2021) 
were extreme cold weather events that nearly caused system collapse if 
the operators had not acted to shed load.\42\ The remaining three 
events (2014, 2020, and 2021) were extreme heat weather events that 
resulted in generation losses and varying degrees of load shedding.\43\ 
Since the issuance of the NOPR, another extreme cold weather event 
indicated reliability challenges faced by the Bulk-Power System. In 
December 2022, Winter Storm Elliott caused extreme cold conditions that 
significantly stressed the Bulk-Power System, forcing some utilities to 
deploy rolling blackouts to preserve Bulk-Power System reliability.\44\ 
These extreme heat and cold events demonstrate a risk to Reliable 
Operation of the Bulk-Power System.
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    \41\ For a full discussion of these extreme weather events, see 
NOPR, 179 FERC ] 61,195 at PP 24-33.
    \42\ See e.g., FERC and NERC Staff Report, Outages and 
Curtailments During the Southwest Cold Weather Event of February 1-
5, 2011, at 7 (Aug. 2011), https://www.ferc.gov/sites/default/files/2020-05/ReportontheSouthwestColdWeatherEventfromFebruary2011Report.pdf 
(impacting nearly 4.4 million electric customers in ERCOT); 2013 PJM 
Heat Wave Analysis at 5 (impacting approximately 45,000 customers in 
PJM).
    \43\ See, e.g., 2021 Cold Weather Event Report at 133.
    \44\ FERC, FERC, NERC to Open Joint Inquiry into Winter Storm 
Elliott (Dec. 2022), https://www.ferc.gov/news-events/news/ferc-nerc-open-joint-inquiry-winter-storm-elliott.
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    21. While wide-area extreme heat and cold weather events may not 
occur every year, their frequency and magnitude are expected to 
increase. The National Oceanic and Atmospheric Administration's (NOAA) 
data and analyses show an increasing trend in extreme heat and cold 
weather events,\45\ and the U.S. Environmental Protection Agency 
climate change indicators also show upward trends in heatwave 
frequency, duration, and intensity.\46\ NOAA states that climate change 
is also driving more compound events, i.e., multiple extreme events 
occurring simultaneously or successively, such as concurrent heat waves 
and droughts, and more extreme heat conditions in cities.\47\
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    \45\ See NOAA., Nat'l Centers for Envtl. Info., U.S. Billion-
Dollar Weather and Climate Disasters (2023), https://www.ncei.noaa.gov/access/billions/.
    \46\ U.S. EPA, Climate Change Indicators in the United States 
(last updated May 2, 2023), https://www.epa.gov/climate-indicators.
    \47\ NOAA, 2022 U.S. Billion Dollar Weather and Climate 
Disasters in Historical Context (2023), https://www.climate.gov/news-features/blogs/2022-us-billion-dollar-weather-and-climate-disasters-historical-context.
---------------------------------------------------------------------------

    22. These conditions have created an urgency to address the 
negative impact of extreme weather on the reliability of the Bulk-Power 
System. To that end, the directives to NERC in this final rule aim to 
improve system planning specifically for extreme heat and cold weather 
events. The potential impact of widespread extreme heat and cold events 
on the reliability of the Bulk-Power System can be modeled and studied 
in advance as part of near-term and long-term transmission system 
planning. Responsible entities could then use the studies to develop 
transmission system operational strategies or corrective action plans 
with mitigations that could be deployed in preparation for extreme heat 
and cold events.
    23. The current transmission planning Reliability Standards, 
however, do not obligate transmission planners and planning 
coordinators to consider extreme hot and cold weather in their 
transmission assessments. In particular, Reliability Standard TPL-001-
5.1 requires steady state and stability analyses to be performed for 
certain extreme events but does not require steady state and stability 
analyses for extreme heat and cold conditions.\48\ Likewise, while 
Reliability Standard TPL-001-5.1 Table 1, provisions 2.f (stability) 
and 3.b (steady state), requires responsible entities to study events 
based on operating experience that may result in a wide-area 
disturbance,\49\ the Standard does not specify the study of extreme 
heat or cold conditions.
---------------------------------------------------------------------------

    \48\ See Reliability Standard TPL-001-5.1, at Requirements R3 
and R4 and Table 1.
    \49\ Id. at Table 1, provisions 2.f and 3.b.
---------------------------------------------------------------------------

    24. System planning measures alone will not eliminate the 
reliability risk associated with extreme heat and cold events. The 
directives to improve transmission planning discussed in this final 
rule will prepare the Bulk-Power System for extreme weather events in 
the long term and will work together with the requirements in the Cold 
Weather Reliability Standards to mitigate the near-term reliability 
impact of extreme weather events. Improved system planning will limit 
the impact of such events and reduce the risk to the reliability of the 
Bulk-Power System, which prior events demonstrate is significant.

IV. Discussion

A. Directive to NERC To Develop New or Modified Reliability Standard

    25. Pursuant to FPA section 215(d)(5), we adopt the NOPR proposal 
and direct NERC to submit a new Reliability Standard or modifications 
to Reliability Standard TPL-001-5.1 requiring transmission system 
planning for extreme heat and cold weather events that impact the 
Reliable Operation of the Bulk-Power System. For the reasons discussed 
in section III above, we conclude that it is necessary to update the 
transmission planning Reliability Standard to reflect the impact of 
extreme heat and cold weather events on the reliability of the Bulk-
Power System. Most commenters support the NOPR proposal to develop 
mandatory transmission system planning requirements for extreme heat 
and cold weather events.\50\ Commenters also agree that Commission 
action is necessary to address the reliability gaps pertaining to the 
consideration of extreme heat and cold weather events that exist in 
current transmission planning processes.\51\
---------------------------------------------------------------------------

    \50\ See, e.g., MISO Transmission Owners Comments at 1-2; 
Indicated Trade Associations Comments at 1-2; NYISO Comments at 1-2; 
AEP Comments at 1; ACP Comments at 1; PIOs Comments at 1.
    \51\ See, e.g., EPRI Comments at P 4.
---------------------------------------------------------------------------

    26. Although supportive of the need to consider extreme weather in 
the transmission planning process, PJM Interconnection, L.L.C. (PJM) is 
critical of the Commission's proposed ``piecemeal'' approach and 
suggests that the Commission harmonize this rulemaking with other 
Commission actions on transmission planning.\52\ While we agree that it 
is important for NERC and applicable planning entities to consider how 
requirements implemented pursuant to this rulemaking may interact with 
processes carried out pursuant to other Commission actions on 
transmission planning, we disagree with PJM's suggestion that this 
proceeding is not an appropriate forum for directing changes to the 
NERC Reliability Standards. While there is undoubtedly a nexus between 
the long-term planning for expected changes in resources and demand as 
contemplated in Docket No. RM21-17-000 and Reliability Standards for 
extreme weather, each set of reforms is subject to differing statutory 
schemes and other considerations, and each aims at related but distinct 
challenges. The Commission's transmission planning reform efforts 
require individual consideration, as they each concern different 
transmission planning objectives, time horizons, and areas of 
Commission jurisdiction. This proceeding is conducted pursuant to the 
Commission's jurisdiction under section 215 of the FPA and contemplates 
transmission planning entity actions that may be needed in the planning 
timeframe of six to ten years and beyond to mitigate the impacts of 
extreme weather, whereas the proceeding in Docket No. RM21-17-000 was 
initiated

[[Page 41267]]

pursuant to the Commission's jurisdiction under section 206 of the FPA, 
considers a more fulsome range of practices that may be required to 
render rates just and reasonable, and contemplates a planning horizon 
of 20 years.\53\ While addressing these related efforts in a single 
proceeding may have benefits, it also would risk complicating the 
development of solutions and making the process more unwieldy. The 
Commission has thus determined to take this step to facilitate 
solutions to one aspect of the extreme weather challenge, as part of a 
series of actions that build on each other by seeking to address the 
many areas that affect extreme weather reliability.
---------------------------------------------------------------------------

    \52\ PJM Comments at 3-4, 7.
    \53\ See Building for the Future Through Elec. Reg'l 
Transmission Planning & Cost Allocation & Generator Interconnection, 
Notice of Proposed Rulemaking, 87 FR 26504, (May 4, 2022), 179 FERC 
] 61,028 (2022).
---------------------------------------------------------------------------

    27. Accordingly, we adopt the NOPR proposal and direct NERC to 
develop a new or modified Reliability Standard to require the 
following: (1) development of benchmark planning cases based on major 
prior extreme heat and cold weather events and/or meteorological 
projections; (2) planning for extreme heat and cold weather events 
using steady state and transient stability analyses expanded to cover a 
range of extreme weather scenarios including the expected resource 
mix's availability during extreme heat and cold weather conditions, and 
including the wide-area impacts of extreme heat and cold weather; and 
(3) development of corrective action plans that mitigate specified 
instances where performance requirements for extreme heat and cold 
weather events are not met.\54\ We also direct NERC to identify the 
responsible entities for developing benchmark planning cases and 
conducting wide-area studies under the new or modified Reliability 
Standard.
---------------------------------------------------------------------------

    \54\ NOPR, 179 FERC ] 61,195 at P 51.
---------------------------------------------------------------------------

    28. Given the importance of timely addressing the identified 
reliability gap, we direct NERC to submit the responsive new or 
modified Reliability Standard within 18 months of the date of 
publication of this final rule in the Federal Register. We further 
direct NERC to develop a phased-in implementation timeline for the 
different requirements of the new or modified Reliability Standard 
(i.e., developing benchmark planning cases, conducting studies, 
developing corrective action plans) that shall begin within 12 months 
of the effective date of a Commission order approving the proposed 
Reliability Standard.
    29. We address below in further detail issues raised in the NOPR 
and in comments regarding: (1) development of benchmark events and 
planning cases; (2) definition of ``wide-area;'' (3) entities 
responsible for developing benchmark events and conducting transmission 
planning studies of wide-area events; (4) coordination among registered 
entities and sharing of data and study results; (5) concurrent/
correlated generator and transmission outages; (6) conducting 
transmission system planning studies for extreme heat and cold weather 
events; (7) corrective action plans; (8) other extreme weather events; 
and (9) Reliability Standard development and implementation timeline.

B. Develop Benchmark Events and Planning Cases Based on Major Prior 
Extreme Heat and Cold Weather Events and/or Meteorological Projections

    30. In the NOPR, the Commission proposed to direct NERC to include 
in the new or modified Reliability Standard benchmark events that 
responsible entities must study.\55\ The NOPR proposed basing such 
benchmark events on prior events (e.g., the February 2011 Southwest 
Cold Weather Event and the January 2014 Polar Vortex Cold Weather 
Event) and/or meteorological projections. Recognizing that extreme 
weather risks may vary from region to region and change over time, the 
NOPR proposed to direct NERC to consider approaches that would provide 
a uniform framework for developing benchmark events while still 
recognizing regional differences; for example, NERC could define 
benchmark events around a projected frequency (e.g., 1-in-50-year 
event) or probability distribution (95th percentile event).\56\ 
Although the NOPR did not specify how these benchmark events should be 
developed, the NOPR provided two examples: (1) NERC could develop the 
benchmark event or events during the standard development process; or 
(2) NERC could include in the new or modified Reliability Standard a 
framework establishing a common design basis for the development of 
benchmark events. The NOPR also suggested including in the modified 
standard the primary features of the benchmark event(s) while 
designating NERC or another entity to periodically update benchmark 
events.\57\
---------------------------------------------------------------------------

    \55\ Id.
    \56\ Id. P 52.
    \57\ Id. P 53.
---------------------------------------------------------------------------

    31. The NOPR also proposed that establishing one or more benchmark 
planning cases, based on benchmark events, should form the basis for 
sensitivity analysis. In addition to providing valuable case study 
information to be applied to preparing for possible comparable future 
events, these events would also serve as a basis for effectively using 
assets and resources. Specifically, once developed, responsible 
entities would use the benchmark events to develop benchmark planning 
cases to conduct studies to assess the limitations of the transmission 
system locally and over a wide-area, and to understand resource 
availability and potential firm load shedding requirements under 
stressed conditions.\58\ The NOPR sought comments on all aspects of the 
proposed directive.
---------------------------------------------------------------------------

    \58\ Id.
---------------------------------------------------------------------------

1. Comments
    32. Commenters generally agree with the NOPR proposal to direct 
NERC to develop requirements that address the types of extreme heat and 
cold weather scenarios that responsible entities are required to 
study.\59\ Indicated Trade Associations caution, however, that 
universal benchmark events would be hard to implement given regional 
differences.\60\ As such, and consistent with the NOPR proposal, 
Indicated Trade Associations, APS, Bonneville Power Administration 
(BPA), and Idaho Power, among others, agree that regional differences 
(e.g., climate, topology, electrical characteristics) should be 
considered in developing benchmark events.\61\
---------------------------------------------------------------------------

    \59\ See, e.g., NERC Comments at 7-8; AEP Comments at 7; 
Indicated Trade Associations Comments at 8; NARUC Comments at 5.
    \60\ Indicated Trade Associations Comments at 8.
    \61\ See id.; APS Comments at 3; BPA Comments at 3; Idaho 
Comments at 2.
---------------------------------------------------------------------------

    33. Regarding how benchmark events should be developed, NERC notes 
that significant work will be necessary to develop a uniform planning 
approach that properly accounts for regional differences in climate and 
weather patterns, among other considerations. Accordingly, NERC asks 
for flexibility in developing benchmark events, including considering 
options beyond those identified in the NOPR.\62\ Indicated Trade 
Associations recommend that NERC consider all the examples of benchmark 
events identified in the NOPR.\63\ PJM indicates that developing 
benchmark events will require scientific and meteorological expertise 
to ensure that NERC guidelines and criteria reflect statistically valid 
scenarios for the meteorological projections and their possible impacts 
on transmission planning. As such, PJM recommends that the Commission 
engage the national

[[Page 41268]]

labs, Regional Transmission Organizations (RTO), NOAA, and other 
agencies to develop extreme weather ``design threshold'' metrics, as 
well as investigate targeted planning thresholds (e.g., 1-in-50-year 
events).\64\ Other commenters highlight the necessity of ensuring that 
benchmark events are not only developed using historical extreme heat 
and cold event data, but more importantly use future meteorological 
projections in order to prepare for plausible extremes in future 
years.\65\
---------------------------------------------------------------------------

    \62\ NERC Comments at 8-9.
    \63\ Indicated Trade Associations Comments at 8.
    \64\ PJM Comments at 9.
    \65\ See, e.g., EPRI Comments at P 5; Entergy Comments at 3.
---------------------------------------------------------------------------

    34. All those who submitted comments regarding the NOPR proposal to 
require periodic updates to benchmark events agree with the need to do 
so. For example, Union for Concerned Scientists (UCS) points to the 
scientific consensus that climate change is altering the intensity and 
frequency of extreme weather conditions as a reason to require the 
periodic update of benchmark events.\66\ American Electric Power 
Service Corporation (AEP) recommends updating the benchmark events 
every three years, consistent with the Commission's proposed planning 
cycle for regional transmission planning, based on the most up-to-date 
data.\67\ In contrast, Midcontinent Independent System Operator, Inc. 
(MISO) suggests that, consistent with similar requirements in 
Reliability Standard TPL-007-4 (Transmission System Planned Performance 
for Geomagnetic Disturbance Events) and Reliability Standard PRC-006-5 
(Automatic Underfrequency Load Shedding) extreme heat and cold weather 
benchmark events should be updated every five years.\68\ Other 
commenters recommend that the key aspects of the benchmark be updated 
periodically, without opining on the periodicity of updates.\69\
---------------------------------------------------------------------------

    \66\ UCS Comments at 7.
    \67\ AEP Comments at 3-4 (citing Docket No. RM21-17-000).
    \68\ MISO Comments at 3.
    \69\ See, e.g., APS Comments at 3; Entergy Comments at 4; 
Indicated Trade Associations Comments at 8.
---------------------------------------------------------------------------

2. Commission Determination
    35. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to: (1) develop extreme heat and cold weather 
benchmark events, and (2) require the development of benchmark planning 
cases based on identified benchmark events. Without specific 
requirements describing the types of heat and cold scenarios that 
responsible entities must study, the new or modified Reliability 
Standard may not provide a significant improvement upon the status quo. 
Benchmark events will provide a defined event that will form the basis 
for assessing system performance during extreme heat and cold weather 
events. Benchmark events will also form the basis for a planner's 
benchmark planning case--i.e., the base case representing system 
conditions under the relevant benchmark event--that will be used to 
study the potential wide-area impacts of anticipated extreme heat and 
cold weather events.
    36. Although the NOPR outlined some of the Commission's 
expectations for the development of benchmark events, including that 
benchmark events be based on prior extreme heat and cold events and/or 
meteorological projections,\70\ there is currently no established 
guidance or set of tools in place to facilitate the development of 
extreme heat and cold benchmark events for the purpose of informing 
transmission system planning. As recommended by commenters, NERC should 
consider the examples of approaches for defining benchmark events 
identified in the NOPR (e.g., the use of projected frequency or 
probability distribution).\71\ NERC may also consider other approaches 
that achieve the objectives outlined in this final rule. Further, as 
recommended by PJM, we believe there is value in engaging with national 
labs, RTOs, NOAA, and other agencies and organizations in developing 
benchmark events. Considering NERC's key role, technical expertise, and 
experience assessing the reliability impacts of various events and 
conditions, we encourage NERC to engage with national labs, RTOs, NOAA, 
and other agencies and organizations as needed. To that end, as 
discussed in section IV.J below, we have modified the NOPR proposal to 
allow more time for NERC to consider these complex issues and engage 
additional expertise where necessary.
---------------------------------------------------------------------------

    \70\ For instance, a benchmark event could be constructed based 
on data from a major prior extreme heat or cold event, with 
adjustments if necessary to account for the fact that future 
meteorological projections may estimate that similar events in the 
future are likely to be more extreme.
    \71\ See supra P 33.
---------------------------------------------------------------------------

    37. Because the impact of most extreme heat and cold events spans 
beyond the footprints of individual planning entities, it is important 
that all responsible entities likely to be impacted by the same extreme 
weather events use consistent benchmark events. Doing so is important 
to ensuring that neighboring planning regions are assuming similar 
weather conditions and are able to coordinate their assumptions 
accordingly. As a result, defining the benchmark event in a manner that 
provides responsible entities significant discretion to determine the 
applicable meteorological conditions would not meet the objectives of 
this final rule.
    38. At the same time, because different regions experience weather 
conditions and their impacts differently, a single benchmark event for 
the entire Nation is unlikely to meet the objectives of this final 
rule. Accordingly, in developing extreme heat and cold benchmark 
events, NERC shall ensure that benchmark events reflect regional 
differences in climate and weather patterns.
    39. We also direct NERC to include in the Reliability Standard the 
framework and criteria that responsible entities shall use to develop 
from the relevant benchmark event planning cases to represent potential 
weather-related contingencies (e.g., concurrent/correlated generation 
and transmission outages, derates) and expected future conditions of 
the system such as changes in load, transfers, and generation resource 
mix, and impacts on generators sensitive to extreme heat or cold, due 
to the weather conditions indicated in the benchmark events. Developing 
such a framework would provide a common design basis for responsible 
entities to follow when creating benchmark planning cases. This would 
not only help establish a clear set of expectations for responsible 
entities to follow when developing benchmark planning events, but also 
facilitate auditing and enforcement of the Standard.
    40. We also direct NERC to ensure the reliability standard contains 
appropriate mechanisms for ensuring the benchmark event reflects up-to-
date meteorological data. The increasing intensity, frequency, and 
unpredictability of extreme weather conditions requires that key 
aspects of the benchmark events be reviewed, and if necessary, updated 
periodically to ensure the corresponding benchmark planning cases 
reflect updated meteorological data. For example, a requirement that 
defines a fixed benchmark event with no provision for future updates 
(e.g., defining the benchmark event for a responsible entity as the 
most severe heat wave in the last twenty years measured from the 
effective date of the standard) may not provide an accurate indicator 
of future risks. To the extent NERC determines that the benchmark event 
should be fixed or only updated

[[Page 41269]]

periodically,\72\ we agree with MISO that including a mechanism to 
update the benchmark event at least every five years would strike a 
reasonable balance between the benefits of using the most up-to-date 
meteorological data and administrative the burdens of collecting and 
analyzing such data.
---------------------------------------------------------------------------

    \72\ See, e.g., Reliability Standard EOP-012-1 (Extreme Cold 
Weather Preparedness and Operations), at Requirement 4 (requiring 
generator owners to calculate the generator extreme cold weather 
temperature every five years).
---------------------------------------------------------------------------

C. Definition of ``Wide-Area''

    41. In the NOPR, the Commission proposed to direct NERC to require 
in a new or modified Reliability Standard that transmission planning 
studies consider the wide-area impacts of extreme heat and cold 
weather.\73\ The NOPR explained that the impacts of extreme weather 
events on the Reliable Operation of the Bulk-Power System can be 
widespread, potentially causing simultaneous loss of generation and 
increased transmission constraints within and across regions.\74\ The 
NOPR also pointed out that failure to study the wide-area impact of 
extreme heat or cold weather conditions in transmission planning could 
result in reliability issues affecting multiple regions or multiple 
planning coordinator areas remaining undetected in the long-term 
planning horizon. This, in turn, could lead to otherwise avoidable 
system conditions that would be only one contingency away from voltage 
collapse and uncontrolled blackouts.\75\
---------------------------------------------------------------------------

    \73\ NOPR, 179 FERC ] 61,195 at P 64.
    \74\ Id.
    \75\ Id. P 66.
---------------------------------------------------------------------------

    42. The NOPR proposed that, based on prior events, the study 
criteria for extreme heat and cold weather events should consider wide-
area conditions affecting neighboring regions and their impact on one 
planning area's ability to rely on the resources of another region 
during the weather event.
    43. To identify opportunities for improved wide-area planning 
studies and coordination, the NOPR sought comments on whether wide-area 
planning studies should be defined geographically or electrically.\76\
---------------------------------------------------------------------------

    \76\ Id. P 67. The NOPR also solicited comment on which entities 
should oversee and coordinate the wide-area planning models and 
studies, as well as addressing the results of the studies, and how 
they should communicate those results among transmission planners. 
Id. These comments are addressed below in the sections D and E.
---------------------------------------------------------------------------

1. Comments
    44. AEP, MISO Transmission Owners, and Tri-State Generation and 
Transmission Association, Inc. (Tri-State) favor defining wide-area 
geographically.\77\ MISO Transmission Owners assert that wide-area must 
be defined by geography to address issues in each region as best suited 
for that region, given that extreme heat and cold weather risks, and 
the appropriate responses thereto, vary by geography.\78\ Tri-State 
explains that ``wide-area'' should be defined geographically, because 
for a transmission planner to evaluate a large area weather event, it 
would need to be modeled within the transmission planner's area, as 
well as neighboring entities.\79\
---------------------------------------------------------------------------

    \77\ AEP Comments at 16; MISO Transmission Owners Comments at 4.
    \78\ Id. at 4.
    \79\ Tri-State Comments at 5-6.
---------------------------------------------------------------------------

    45. Although MISO Transmission Owners support a geographic 
definition, they also caution that RTO regions, Order No. 1000 planning 
regions, and NERC Regional Entities do not have identical footprints. 
Therefore, MISO Transmission Owners recommend that the final rule 
direct NERC to propose modifications to Reliability Standards to 
provide appropriately flexible provisions to address scenarios where 
those inconsistent footprints may introduce conflicts.\80\
---------------------------------------------------------------------------

    \80\ MISO Transmission Owners Comments at 4.
---------------------------------------------------------------------------

    46. Idaho Power, on the other hand, comments that ``wide-area'' 
should be defined electrically to better capture the interdependency of 
systems.\81\
---------------------------------------------------------------------------

    \81\ Idaho Power Comments at 4.
---------------------------------------------------------------------------

    47. LCRA Transmission Services Corporation (LCRA), Electric Power 
Research Institute (EPRI), and PJM prefer that ``wide-area'' be defined 
both geographically and electrically. LCRA explains that this is 
necessary to represent the geographic correlation of extreme weather 
events and the electrical connectivity of the transmission system.\82\ 
EPRI cautions that ``geographic definitions of wide area events will 
need to be developed for inclusion in resource adequacy or production 
cost models'' for purposes of identifying the snapshot conditions that 
should serve as the primary inputs to the transmission planning 
assessments.\83\ Further, EPRI explains that ``wide area events defined 
electrically can be used to represent acute switching events that occur 
over much shorter timescales and can be used to capture discrete 
impacts defined as contingency events, which occur concurrent with the 
extreme temperature condition.'' \84\
---------------------------------------------------------------------------

    \82\ LCRA Comments at 3; EPRI Comments at P 18; PJM Comments at 
10.
    \83\ EPRI Comments at P 18.
    \84\ Id. at 12.
---------------------------------------------------------------------------

    48. Other commenters, while not indicating a preference between 
electrical or geographical definition, highlight that extreme heat and 
cold weather events are not bound by the footprint of utilities or 
authorities that separate planning and balancing areas.\85\ Indicated 
Trade Associations recommend that the Commission invest the NERC 
standard drafting team with substantial discretion in addressing 
whether and how wide-area planning studies should be defined 
geographically or electrically.\86\
---------------------------------------------------------------------------

    \85\ UCS Comments at 8; Entergy Comments at 5; EDF at Comments 
23; MISO Transmission Owners Comments at 4.
    \86\ Indicated Trade Associations at 10.
---------------------------------------------------------------------------

    49. Although also not stating a preference as to whether to define 
``wide-area'' electrically or geographically, Entergy Services, LLC 
(Entergy) cautions against expecting transmission planners and 
coordinators ``to overlap benchmark events between regions'' because 
``[s]uch overlapping could result in modeling of extreme heat and cold 
events over regions that are much larger than the areas in which such 
events are likely to occur.'' \87\
---------------------------------------------------------------------------

    \87\ Entergy Comments at 5-6.
---------------------------------------------------------------------------

2. Commission Determination
    50. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to require that transmission planning studies 
under the new or revised Reliability Standard consider the wide-area 
impacts of extreme heat and cold weather. We direct NERC to clearly 
describe the process that an entity must use to define the wide-area 
boundaries. While commenters provide various views in favor of both a 
geographical approach and electrical approach to defining wide-area 
boundaries, we do not adopt any one approach in this final rule. 
Rather, we believe that this technical matter deserves a more fulsome 
vetting in the Reliability Standards development process. NERC should 
consider the comments in this proceeding when developing a new or 
modified reliability standard that considers the broad area impacts of 
extreme heat and cold weather.\88\
---------------------------------------------------------------------------

    \88\ Cf., Order No. 693, 118 FERC ] 61,218 at P 188 (directing 
NERC to address NOPR comments suggesting specific new improvements 
to the Reliability Standards in the standards development process, 
noting that it ``does not direct any outcome other than that the 
comments receive consideration.'').
---------------------------------------------------------------------------

D. Entities Responsible for Developing Benchmark Events and Planning 
Cases, and for Conducting Transmission Planning Studies of Wide-Area 
Events

    51. The NOPR proposed to direct NERC to develop requirements that 
address the types of extreme heat and

[[Page 41270]]

cold scenarios responsible entities are required to study, including 
the development of benchmark events and benchmark planning cases.\89\ 
The NOPR solicited feedback on which entities should be responsible for 
updating benchmark events and whether, and to what extent, it may be 
appropriate to allow designated entities to periodically update key 
aspects of the benchmark events.\90\
---------------------------------------------------------------------------

    \89\ NOPR, 179 FERC ] 61,195 at PP 50-51.
    \90\ Id. P 53.
---------------------------------------------------------------------------

    52. As a separate matter, the NOPR proposed to require that 
transmission planning studies that consider the wide-area impacts of 
extreme heat and cold weather.\91\ To inform this directive, the NOPR 
solicited comment on which entities should oversee and coordinate the 
wide-area planning models and studies, as well as which entities should 
have responsibility to address the results of the studies.\92\
---------------------------------------------------------------------------

    \91\ Id. P 64.
    \92\ Id. P 67.
---------------------------------------------------------------------------

1. Comments
a. Entity Responsible for Development of Benchmark Events
    53. There is no consensus among the commenters regarding which 
entities should be tasked with developing the benchmark events. 
Indicated Trade Associations suggest that the subject matter experts on 
the NERC standard drafting team should develop the benchmark 
events.\93\ Entergy also suggests that the NERC develop the benchmark 
events, as NERC will be able to tailor the benchmark events to reflect 
regional variations in extreme weather risk.\94\ All other commenters 
on this issue proposed that other entities be responsible for benchmark 
event development.\95\ For example, New York Independent System 
Operator, Inc. (NYISO) and MISO Transmission Owners posit that entities 
registered with NERC as planning coordinators or transmission planners 
should be given the latitude to develop the benchmark events.\96\ AEP 
recommends that each planning coordinator should develop individualized 
benchmark events for its planning area, except in regions that lack the 
necessary resources or expertise, in which case the Regional Entities 
should coordinate and review the benchmark event process in 
collaboration with these smaller planning coordinators in that 
region.\97\ American Clean Power Association (ACP) suggests that the 
Regional Entities should develop the benchmark events that will be 
evaluated by all transmission planners and planning coordinators in a 
given region.\98\
---------------------------------------------------------------------------

    \93\ Indicated Trade Associations Comments at 8.
    \94\ Entergy Comments at 4.
    \95\ See. e.g., EDF Comments at 8.
    \96\ NYISO Comments at 13; MISO Transmission Owners Comments at 
5.
    \97\ AEP Comments at 9.
    \98\ ACP Comments at 3.
---------------------------------------------------------------------------

b. Entity Responsible for Development of Planning Cases and Conducting 
Transmission Planning Studies of Wide-Area Events
    54. Regarding development of benchmark planning cases, beyond 
existing registered entities, Arizona Public Service Company (APS) 
recommends ``that a regional planning entity would be the appropriate 
entity to determine the benchmark planning cases and develop the 
scenarios that constitute an extreme event in their region.'' \99\
---------------------------------------------------------------------------

    \99\ APS Comments at 3.
---------------------------------------------------------------------------

    55. Further, commenters suggest a variety of entities to perform 
the wide area studies. NERC suggests that a registered entity subject 
to the Reliability Standard, such as a planning coordinator or 
transmission planner, should be responsible for performing the wide-
area studies.\100\ AEP asserts that the planning coordinators should 
oversee and coordinate the wide-area planning models and studies, 
communicate the results, and work to mitigate issues that require 
corrective action.\101\
---------------------------------------------------------------------------

    \100\ AEP Comments at 20; NERC Comments at 9-10.
    \101\ AEP Comments at 16.
---------------------------------------------------------------------------

    56. APS and MISO Transmission Owners express concern that an 
individual transmission planner or planning coordinator would not be 
positioned to perform a wide-area assessment of extreme weather 
conditions because of its limited geographical visibility.\102\ 
Similarly, Entergy also questions whether a single transmission planner 
would be able to model a wide-area event on its own. Entergy believes 
that the responsibility for performing the analysis should lie with the 
RTOs or Regional Entities, with input provided by member transmission 
owners and transmission planners.\103\ Alternatively, APS suggested a 
regional planning entity, such as those created under Order No. 1000, 
would be appropriate to oversee and coordinate wide-area planning 
models and studies.\104\ Idaho Power Company (Idaho Power) asserts that 
regional planning groups such as Western Power Pool are the ones best 
positioned to coordinate and perform the wide-area planning 
studies.\105\
---------------------------------------------------------------------------

    \102\ APS Comments at 4; MISO Transmission Owners Comments at 4.
    \103\ Entergy Comments at 6.
    \104\ APS Comments at 4.
    \105\ Idaho Power Comments at 4.
---------------------------------------------------------------------------

    57. Environmental Defense Fund (EDF), Tri-State, and Eversource 
Energy Service Company (Eversource) propose that reliability 
coordinators should have the responsibility to perform wide-area 
planning and coordination in collaboration with other impacted 
reliability coordinators.\106\
---------------------------------------------------------------------------

    \106\ EDF Comments at 23; Tri-State Comments at 6; Eversource 
Comments at 5.
---------------------------------------------------------------------------

2. Commission Determination
a. Entity Responsible for Establishing Benchmark Events
    58. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to develop benchmark events for extreme heat 
and cold weather events through the Reliability Standards development 
process. We agree with Indicated Trade Associations that the 
development of adequate benchmark events is critical and should be 
committed to the subject matter experts on the standards drafting team. 
We also agree with Entergy that NERC will be able to tailor benchmark 
events to capture regional differences and the different risks that 
each region faces during extreme heat and cold weather events. While 
Regional Entities and reliability coordinators are encouraged to 
participate in the NERC Reliability Standards development process to 
develop the benchmark events, we disagree with AEP and other commenters 
who recommend that entities other than NERC take the lead in the 
development of benchmark events.
    59. Further, requiring NERC to develop the new or modified 
Reliability Standard's benchmark events is consistent with the approach 
the Commission took in Order No. 779, when the Commission directed NERC 
to develop benchmark events for geomagnetic disturbance analyses.\107\ 
For the same reasons, we also conclude that NERC is best positioned to 
define mechanisms to periodically update extreme heat and cold weather 
benchmark events, as discussed above.\108\
---------------------------------------------------------------------------

    \107\ Reliability Standards for Geomagnetic Disturbances, Order 
No. 779, 143 FERC ] 61,147, at P 2 (2013).
    \108\ See supra P 40.
---------------------------------------------------------------------------

b. Entities Responsible for Development of Planning Cases and 
Conducting Transmission Planning Studies of Wide-Area Events
    60. We also direct NERC to designate the type(s) of entities 
responsible for

[[Page 41271]]

developing benchmark planning cases and conducting wide-area studies 
under the new or modified Reliability Standard. The scope of extreme 
weather event studies will likely cover large geographical areas far 
exceeding the smaller individual transmission planner or planning 
coordinator planning areas. Accordingly, we agree with APS that the 
benchmark planning cases should be developed by registered entities 
such as large planning coordinators, or groups of planning 
coordinators, with the capability of planning on a regional scope.\109\
---------------------------------------------------------------------------

    \109\ According to the NERC Registration Matrix, there are 
currently 211 transmission planners and 66 planning coordinators in 
the United States. While some of these entities operate over large 
geographic areas--for example, PJM and MISO are the only planning 
coordinators in the Reliability First footprint--the majority 
operate on a much smaller scale--WECC and SERC have 59 planning 
coordinators, some of which are small cities and counties. NERC, NCR 
Active Entities List, (last visited Apr. 7, 2023) https://www.nerc.com/pa/comp/Registration%20and%20Certification%20DL/NERC_Compliance_Registry_Matrix_Excel.xlsx.
---------------------------------------------------------------------------

    61. We also disagree with assertions that reliability coordinators 
should be responsible for developing benchmark planning cases or 
conducting wide-area studies. We believe the designated responsible 
entities should have certain characteristics, including having a wide-
area view of the Bulk-Power System and the ability to conduct long-term 
planning studies across a wide geographic area. The responsible 
entities should also have the planning tools, expertise, processes, and 
procedures to develop benchmark planning cases and analyze extreme 
weather events in the long-term planning horizon. Under the NERC 
functional model, however, reliability coordinators have responsibility 
for the real-time operation of the bulk-power system. Accordingly, we 
conclude that reliability coordinators are not well suited for 
developing benchmark planning cases or conducting wide-area studies.
    62. To comply with this directive, NERC may designate the tasks of 
developing benchmark planning cases and conducting wide-area studies to 
an existing functional entity or a group of functional entities (e.g., 
a group of planning coordinators). NERC may also establish a new 
functional entity registration to undertake these tasks. In the 
petition accompanying the proposed Reliability Standard NERC should 
explain how the applicable registered entity or entities meet the 
objectives outlined above.

E. Coordination Among Registered Entities and Sharing of Data and Study 
Results

    63. The NOPR explained that Reliability Standard TPL-001-5.1 cross-
references Reliability Standard MOD-032-1 (Data for Power System 
Modeling Analysis), which establishes consistent modeling data 
requirements and reporting procedures for the development of planning 
horizon cases necessary to support analysis of the reliability of the 
interconnected system.\110\ Reliability Standard MOD-032-1 ensures an 
adequate means of data collection for transmission planning. It 
requires applicable registered entities to provide steady-state, 
dynamic, and short circuit modeling data to their transmission 
planner(s) and planning coordinator(s). The modeling data is then 
shared pursuant to the data requirements and reporting procedures 
developed by the transmission planner and planning coordinator as set 
forth in Reliability Standard TPL-001-5.1, Requirement R1.
---------------------------------------------------------------------------

    \110\ NOPR, 179 FERC ] 61,195 at P 80.
---------------------------------------------------------------------------

    64. The NOPR stated that, while balancing authorities and other 
entities must share system information and study results with their 
transmission planner and planning coordinator pursuant to Reliability 
Standards MOD-032-1 and TPL-001-5.1, there is no required sharing of 
such information related to extreme heat or cold weather events--or 
required coordination--among planning coordinators and transmission 
planners with transmission operators, transmission owners, and 
generator owners.\111\ Sharing system information and study results and 
enhancing coordination among these entities for extreme heat and cold 
weather events could result in more representative planning models by 
better integrating and including operations concerns (e.g., lessons 
learned from past issues including corrective actions and projected 
outcomes from these actions, evolving issues concerning extreme heat/
cold) in planning models; and conveying reliability concerns from 
planning studies (e.g., potential widespread cascading, islanding, 
significant loss of load, blackout, etc.) as they pertain to extreme 
heat or cold.\112\
---------------------------------------------------------------------------

    \111\ Id. P 81.
    \112\ Id.
---------------------------------------------------------------------------

    65. The NOPR proposed to direct NERC to require system information 
and study results sharing and coordination among planning coordinators 
and transmission planners with transmission operators, transmission 
owners, and generator owners for extreme heat and cold weather 
events.\113\ The NOPR solicited comments on whether existing 
Reliability Standards are sufficient to ensure that responsible 
entities performing studies of extreme heat and cold weather events 
have the necessary data, and/or whether the Commission should direct 
additional changes pursuant to FPA section 215(d)(5) to address the 
issue.\114\ The NOPR also sought comments on the following: (1) the 
parameters and timing of coordination and sharing; (2) specific 
protocols that may need to be established for efficient coordination 
practices; and (3) potential impediments to the proposed coordination 
efforts.
---------------------------------------------------------------------------

    \113\ Id. P 82.
    \114\ Id. P 63.
---------------------------------------------------------------------------

1. Comments
    66. There is no consensus among commenters on whether Reliability 
Standards TPL-001.5.1 and MOD-032-1 are adequate means of data 
collection for transmission planning, with some commenters raising 
concerns about the types of data that will be needed to conduct extreme 
heat and cold weather studies under the new or modified Reliability 
Standard and whether such data can be obtained through existing 
processes.
    67. For example, NERC and Idaho Power believes that the existing 
standards are sufficient.\115\ According to NERC, the Commission does 
not need to direct revisions to Reliability Standard MOD-032-1 to 
account for new data required for extreme heat and cold weather studies 
because the standard requires functional entities to provide ``other 
information requested by the Planning Coordinator or Transmission 
Planner necessary for modeling purposes'' for each of the three types 
of data required (steady-state, dynamics, and short circuit).\116\ 
Thus, NERC asserts that planning coordinators and transmission planners 
are empowered to request any specific data needed for studies of 
extreme heat and cold conditions. According to Idaho Power, because (1) 
utilities currently share contingencies to be studied with neighboring 
entities to get feedback and make updates as needed and (2) utilities 
share TPL-001 reports with other utilities subject to the execution of 
a non-disclosure agreement, the Commission proposal would be redundant 
of current practice.\117\
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    \115\ NERC Comments at 13; Idaho Power Comments at 5.
    \116\ NERC Comments at 13.
    \117\ Idaho Power Comments at 5.

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[[Page 41272]]

    68. In contrast, Tri-State indicates that there is no requirement 
for transmission customers to provide data for extreme heat and cold 
weather conditions such as load forecast data.\118\ AEP asserts that 
planning coordinators and transmission planners have limited insight 
into a generator's likelihood of availability during extreme weather 
events, particularly limited for inverter-based resources.\119\ EPRI 
states that there is limited modeling of protection systems in dynamic 
assessments currently, and any dynamic simulation of extreme events 
would require significant modeling of protection systems to provide for 
convergence of the numerical simulation.\120\ NYISO notes that 
Reliability Standard TPL-001 currently limits transmission planners or 
planning coordinators to requesting data pertaining to their own 
planning area.\121\
---------------------------------------------------------------------------

    \118\ Tri-State Comments at 4-5.
    \119\ AEP Comments at 15.
    \120\ EPRI Comments at P 11.
    \121\ NYISO Comments at 14.
---------------------------------------------------------------------------

    69. Other commenters suggest that it will be necessary to define 
the data needed by responsible entities to perform studies under the 
new or modified Reliability Standard. AEP proposes that the Commission 
hold a technical conference to help define the data needed to perform 
the extreme weather assessments and the avenue through which 
information will be shared.\122\ Indicated Trade Associations recommend 
that, although Reliability Standard MOD-032-1 might be adequate as a 
data source, the Commission should recognize in any final rule that the 
standard drafting team should be tasked with identifying what data is 
already collected and specifying what new data is needed to perform the 
assessments for extreme heat and cold.\123\
---------------------------------------------------------------------------

    \122\ AEP Comments at 4.
    \123\ Indicated Trade Associations Comments at 9-10.
---------------------------------------------------------------------------

    70. Regarding the sharing of study results and coordination among 
entities, Tri-State suggests that the balancing authority should 
address the results of the studies and how they should communicate 
those results among the transmission planners. Tri-State also asserts 
that the balancing authority is responsible for resource adequacy and 
should communicate resource needs for the area with the responsible 
transmission planners who can evaluate system needs and ``provide 
access to remove'' resource needs.\124\ EPRI does not opine on who 
should do the wide-area coordination, but states that some level of 
coordination will be required to ensure accurate assessments of wide 
area events that impact geographic footprints across multiple planning 
entities.\125\ UCS suggests that the final rule should direct the 
sharing of modeling information between planning areas regarding 
extreme weather benchmark events, because ensuring reliability will 
depend on the extent to which neighboring regions cooperate.\126\
---------------------------------------------------------------------------

    \124\ Tri-State Comments at 6.
    \125\ EPRI Comments at P 19.
    \126\ UCS Comments at 8.
---------------------------------------------------------------------------

    71. NERC asserts that while wide-area studies should be coordinated 
as appropriate for the area, the specific procedural details for 
coordination on wide-area studies do not need to be mandated in a 
Reliability Standard. NERC adds that other coordination requirements, 
such as those related to sharing of study results and coordination for 
corrective actions across multiple transmission planner areas, can be 
addressed through the standard development process with consideration 
of any factors identified by the commenters in this proceeding.\127\ 
Similarly, Indicated Trade Associations recommend that the Commission 
empower the standards drafting team to consider whether coordination 
between a variety of functional entities, and across regions, would be 
the most effective means of addressing certain identified extreme heat 
and cold weather events.\128\
---------------------------------------------------------------------------

    \127\ NERC Comments at 10.
    \128\ Indicated Trade Associations Comments at 5.
---------------------------------------------------------------------------

2. Commission Determination
    72. Pursuant to section 215(d)(5) of the FPA, we adopt and modify 
the NOPR proposal and direct NERC to require functional entities to 
share with the entities responsible for developing benchmark planning 
cases and conducting wide-area studies the system information necessary 
to develop benchmark planning cases and conduct wide-area studies. 
Further, responsible entities must share the study results with 
affected transmission operators, transmission owners, generator owners, 
and other functional entities with a reliability need for the 
studies.\129\
---------------------------------------------------------------------------

    \129\ The NOPR proposed to direct NERC to ensure that functional 
entities share necessary system information with planning 
coordinators and transmission planners, as these entities conduct 
current transmission planning studies under TPL-001-5.1. Because 
this final rule directs NERC to determine the entities that will be 
responsible for conducting studies under the new or modified 
Reliability Standard, we modify the NOPR accordingly to ensure the 
selected responsible entity has the means to request and receive 
necessary system information.
---------------------------------------------------------------------------

    73. We agree with commenters that Reliability Standard MOD-032-1 
allows for data collection for extreme heat and cold weather events. 
However, only planning coordinators and transmission planners can 
request data from other entities through Reliability Standard MOD-032-1 
processes. Because in this final rule we direct NERC to determine the 
responsible entities that will be developing benchmark planning cases 
and conducting wide-area studies, it is possible that the selected 
responsible entities under the new or modified Reliability Standard 
will not be able to request and receive needed data pursuant to MOD-
032-1, absent modification to that Standard.
    74. Regarding EPRI's statement of insufficiency of dynamic modeling 
of protection systems, we consider the insufficiency of protection 
system modeling to be an ongoing deficiency in the modeling process. 
The dynamics databases used for transient stability simulations by 
various interconnections typically do not include comprehensive dynamic 
models of relays installed in the interconnection. Thus, in addressing 
our directive above, NERC should evaluate this deficiency during the 
standard development process.
    75. We disagree with UCS's recommendation that the final rule 
should direct the sharing of modeling information between planning 
areas regarding extreme weather benchmark events. We expect that the 
existing practice (e.g., MOD-032-1) of responsible entities sharing 
modeling information between planning areas will continue, without the 
need for us to specifically direct that in this final rule.
    76. Rather than predetermine each aspect of the coordination 
process, we believe the decision of which entities are best positioned 
for wide-area coordination should be left to NERC. We therefore direct 
NERC to address the requirement for wide-area coordination through the 
standard development process, giving due consideration to relevant 
factors identified by commenters in this proceeding.
    77. We agree with NERC and Indicated Trade Associations that 
coordination requirements, such as those related to the sharing of 
study results and corrective actions across multiple transmission 
planner areas, are best addressed through the standard development 
process, which we expect will consider relevant factors identified by 
the commenters in this proceeding. Although this final rule does not 
specify how study results must be shared, we believe that the new or 
modified Reliability Standard must require responsible entities to 
share these studies with affected functional entities. The sharing of 
study results will alert entities of reliability concerns identified

[[Page 41273]]

in wide-area studies.\130\ Further, requiring responsible entities to 
share study results with functional entities with a reliability related 
need for the study is consistent with existing planning assessment 
sharing requirements under Reliability Standard TPL-001-5.1.\131\ 
Therefore, we direct NERC to require in the new or modified Reliability 
Standard that responsible entities share the results of their wide-area 
studies with other registered entities such as transmission operators, 
transmission owners, and generator owners that have a reliability 
related need for the studies.
---------------------------------------------------------------------------

    \130\ NOPR, 179 FERC ] 61,195 at P 81.
    \131\ See Reliability Standard TPL-001-5.1, Requirement R8.
---------------------------------------------------------------------------

F. Concurrent/Correlated Generator and Transmission Outages

    78. The NOPR stated that generation resources that are sensitive to 
severe weather conditions may cease operation during extreme heat and 
cold events, thus contributing to wide-area concurrent outages. In 
addition, the NOPR indicated that extreme heat could lead to 
significant derating, reduced lifetime, or failure of power 
transformers, while extreme cold could lead to at least temporary 
transmission facility outages.\132\
---------------------------------------------------------------------------

    \132\ NOPR, 179 FERC ] 61,195 at P 68.
---------------------------------------------------------------------------

    79. As such, the NOPR posited that modeling the loss of these 
generators and transmission equipment during extreme heat and cold 
weather events would allow planners to assess the effects of potential 
concurrent transmission and generator outages and study the feasibility 
(i.e., availability and deliverability) of external generation 
resources that could possibly be imported to serve load during such 
events, thereby minimizing the potential impact of extreme heat and 
cold events on customers.\133\ In addition, the NOPR indicated that 
modeling concurrent generator and transmission outages would also allow 
planners to better identify appropriate solutions to be incorporated 
into corrective action plans.\134\
---------------------------------------------------------------------------

    \133\ Id. P 69.
    \134\ Id.
---------------------------------------------------------------------------

    80. The NOPR also proposed that accounting for concurrent outages 
including modeling the derating and possible loss of wind and solar 
generators, as well as natural gas generators sensitive to extreme heat 
and cold conditions in planning studies would provide a more realistic 
assessment of system conditions (i.e., updated conditions based on 
historic benchmarked performance) during potential extreme heat and 
cold events and will help better assess the probability of potential 
occurrences of cascading outages, uncontrolled separation, or 
instability. Thus, the NOPR suggested that requiring transmission 
planners and planning coordinators to study concurrent generator and 
transmission failures under extreme heat and cold events to account for 
the expected resource mix's availability during these extreme 
conditions is one way to address the reliability gap in Reliability 
Standard TPL-001-5.1.\135\
---------------------------------------------------------------------------

    \135\ Id. P 72.
---------------------------------------------------------------------------

    81. To identify the scope of these planning studies, the NOPR 
sought comments on the following: (1) the assumptions (e.g., weather 
forecast, load forecast, transmission voltage levels, generator types, 
multi-day low wind, and solar events) used in modeling of concurrent 
outages due to extreme heat and cold weather events; (2) what 
assumptions should be included when performing modeling and planning 
for generators sensitive to extreme heat and cold; (3) how the impact 
of loss of generators sensitive to extreme heat and cold should be 
factored into long-term planning; (4) the extent of neighboring 
systems' or planning areas' outages that should be modeled in 
transmission planning studies; and (5) whether a certain threshold 
penetration of wind, solar, and natural gas generation should trigger 
additional analyses.\136\
---------------------------------------------------------------------------

    \136\ Id.
---------------------------------------------------------------------------

1. Comments
    82. Commenters mostly agree with the NOPR that responsible entities 
should evaluate the risk of correlated or concurrent outages and 
derates of all types of generation resources (i.e., conventional and 
renewables) as well as transmission facilities related to extreme 
weather events.\137\ For example, the Federal Energy Advocate for the 
Public Utilities Commission of Ohio (Ohio FEA) recommends that the 
Standard incorporate asset correlations and interdependencies, and 
consider the extent to which they can be obviated or mitigated because 
asset performance or failure is highly correlated with their dependency 
on weather conditions and on the performance of nearby or related 
infrastructure.\138\ Idaho Power notes that while Reliability Standard 
TPL-001-5.1 already addresses the loss of multiple generating stations 
resulting from conditions such as the loss of a large gas pipeline into 
a region or multiple regions that have significant gas-fired 
generation, the standard could be modified to include the impact of 
renewable energy resource response due to extreme weather as well.\139\ 
While agreeing with the NOPR proposal, Public Interest Organizations 
(PIOs) and ACP argue that any requirement to study concurrent or 
correlated generation outages should be extended to conventional 
generators to account for the reliability risk and to eliminate undue 
discrimination caused by overstating the reliability contributions of 
conventional generators relative to renewable and storage 
resources.\140\
---------------------------------------------------------------------------

    \137\ EDF Comments at 22; ACP Comments at 5; PIOs Comments at 9; 
AEP Comments at 4; UCS Comments at 12; and Americans for Clean 
Energy Grid Comments at 6 (ACEG Comments).
    \138\ Ohio FEA Comments at 5.
    \139\ Idaho Power Comments at 4.
    \140\ PIOs Comments at 23-24.
---------------------------------------------------------------------------

    83. Some commenters assert that the NOPR proposal on modeling the 
effects of potential concurrent transmission and generator outages 
might be unnecessary. ISO New England Inc. (ISO-NE) takes issue with 
including the expected resource mix's availability during extreme 
weather conditions as part of extreme weather scenarios. ISO-NE asserts 
that resource mix availability should not be addressed in a 
transmission planning standard because it is addressed as part of 
resource adequacy assessment and other Reliability Standards, such as 
the Cold Weather Reliability Standards. Further, ISO-NE argues that 
transmission planning Reliability Standards need to consider resource 
availability in planning cases, because generators will be required to 
be ready to perform in extreme weather events under those other 
standards.\141\ EPRI asks if the Commission intends for the concurrent 
outages of generation and transmission assets to be modeled as an acute 
event, and if so, requests clarification as to how it differs from the 
P3 category of contingency events from TPL-001-5.1.\142\
---------------------------------------------------------------------------

    \141\ ISO-NE Comments at 2-4.
    \142\ EPRI Comments at PP 20-21. Category P3 requires the study 
of the loss of a generator unit followed by system adjustments, 
followed by a loss of one of the following: generator or 
transmission circuit or transformer or shunt device or single pole 
of a DC line as stated in Reliability Standard TPL-001.5.1, Table 1.
---------------------------------------------------------------------------

    84. NYISO recommends that, as the extreme events in Reliability 
Standard TPL-001-5.1 are analogous to extreme contingencies rather than 
extreme system conditions such as heatwaves, cold snaps, droughts, 
etc., NERC planning events should be expanded to include the weather-
related loss of generation across areas of the system in the design-
basis contingencies rather than as an extreme contingency.\143\
---------------------------------------------------------------------------

    \143\ NYISO Comments at 13.

---------------------------------------------------------------------------

[[Page 41274]]

    85. Regarding modeling assumptions, LCRA asserts that the Standard 
should not be prescriptive regarding the modeling assumptions, 
particularly concerning generation availability, beyond developing the 
study base case when available generation is insufficient to meet the 
load with respect to extreme weather events.\144\ LCRA also cautions 
that modeling too many outages will result in an unsolvable case that 
cannot be analyzed.\145\
---------------------------------------------------------------------------

    \144\ LCRA Comments at 3.
    \145\ Id.
---------------------------------------------------------------------------

    86. While no comments recommended any specific threshold of 
penetration of renewable resources that would trigger additional 
analysis, PJM notes that special studies may be needed as greater 
numbers of renewable, inverter-based resources (IBR), connect to the 
Bulk-Power System. With a much higher IBR penetration level, a more 
material change to dynamic and steady state assessment will likely be 
needed to capture the impacts of higher penetration levels of IBRs and 
much reduced conventional generation support.\146\ APS, however, 
suggests that the Commission should not set a penetration threshold, 
arguing that the entity performing the study should determine the 
threshold, which likely would differ depending on the characteristics 
of the particular system.\147\
---------------------------------------------------------------------------

    \146\ PJM Comments at 11.
    \147\ APS Comments at 5.
---------------------------------------------------------------------------

    87. Electric Power Supply Association (EPSA) suggests that the 
Commission direct NERC to examine how it defines and measures its 
resource adequacy benchmarks, including the impacts of non-dispatchable 
resources with increasing penetration in the system and the 
availability of dispatchable, flexible resources which are increasingly 
being replaced by new, less flexible resources or technologies.\148\
---------------------------------------------------------------------------

    \148\ EPSA Comments at 3.
---------------------------------------------------------------------------

2. Commission Determination
    88. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to require under the new or revised 
Reliability Standard the study of concurrent/correlated generator and 
transmission outages due to extreme heat and cold events in benchmark 
events as described in more detail below.
    89. We disagree with comments suggesting that the modeling of 
concurrent/correlated generator and transmission outages is 
unnecessary.\149\ As discussed in the NOPR, and reinforced by 
commenters, the failures of individual generators during extreme 
weather events are not independent.\150\ Previous extreme weather 
events have demonstrated that there is a high correlation between 
generator outages and cold temperatures, indicating that as 
temperatures decrease, unplanned generator outages and derates 
increase.\151\ Because of this correlation, it is necessary that 
responsible entities evaluate the risk of correlated or concurrent 
outages and derates of all types of generation resources and 
transmission facilities as a result of extreme heat and cold events, as 
commenters suggest.\152\
---------------------------------------------------------------------------

    \149\ See, e.g., ISO-NE Comments at 2-4.
    \150\ NOPR, 179 FERC ] 61,195 at P 70.
    \151\ Id. PP 70-71.
    \152\ See supra P 82.
---------------------------------------------------------------------------

    90. Further, we disagree with ISO-NE that resource mix availability 
should not be considered here because it is considered in resource 
adequacy planning and in other Reliability Standards. Although resource 
outages are an important input into the resource adequacy studies, they 
are also an important determinant in assessing the adequacy of the 
transmission system.\153\ Therefore, it will be necessary to consider 
the impact of extreme weather events on generators anticipated to be 
connected to the subject transmission system during the study period. 
Similarly, although the Cold Weather Reliability Standards require 
generators to be prepared to be available and perform at or above their 
extreme cold weather temperature during extreme weather events, 
generator availability is not guaranteed by any Reliability Standard, 
and outages occur for many reasons. Accordingly, some generators may 
still be unavailable under extreme heat or cold conditions and thus 
their potential outages must be considered in extreme heat and cold 
weather planning scenarios.
---------------------------------------------------------------------------

    \153\ This understanding is consistent with section 215(a)(1) of 
the FPA, 16 U.S.C. 824o(a)(1), which defines Bulk-Power System to 
include ``electric energy from generation facilities needed to 
maintain transmission system reliability.''
---------------------------------------------------------------------------

    91. Although several commenters ask for flexibility as to modeling 
assumptions, we believe that it is necessary for the Reliability 
Standard to strike a balance between allowing responsible entities 
discretion to ensure the study incorporates their operating experience 
and the need to create a robust framework that ensures extreme heat and 
cold events are adequately studied. Thus, while generation and 
transmission availability and concurrent outages must be included in 
the benchmark planning case, we defer to NERC to develop the framework 
and criteria that responsible entities shall use to represent potential 
weather-related contingencies (e.g., concurrent/correlated generation 
and transmission outages, derates) in the relevant benchmark event 
planning cases.\154\
---------------------------------------------------------------------------

    \154\ See supra P 39. Reliability Standard TPL-001-5.1 
Requirement 1.1.5 requires responsible entities to maintain system 
models that represent projected system conditions, including 
resources required for load. Because drought conditions may impact 
the availability of certain supply resources, we expect that the new 
or revised Reliability Standard will include a similar requirement 
that accounts for the impact of drought conditions on generation 
where appropriate.
---------------------------------------------------------------------------

    92. Regarding the comments of NYISO and EPRI on the difference 
between extreme events and contingencies covered under Reliability 
Standard TPL-001-5.1, we clarify that all contingencies included in 
benchmark planning cases under the new or modified Reliability Standard 
will represent initial conditions for extreme weather event planning 
and analysis. These contingencies (i.e., correlated/concurrent, 
temperature sensitive outages, and derates) shall be identified based 
on similar contingencies that occurred in recent extreme weather events 
or expected to occur in future forecasted events.
    93. Regarding PJM's comment regarding the likely need for 
additional studies to capture the impacts of higher penetration levels 
of renewables and much reduced conventional generation support, we note 
that the benchmark planning case will include this information pursuant 
to our directive above regarding benchmarking planning cases. 
Accordingly, we do not foresee the need for the additional studies 
suggested by PJM.
    94. Lastly, regarding EPSA's comment requesting that we direct NERC 
to examine how it defines and measures its resource adequacy 
benchmarks, we note that resource adequacy benchmarks are outside the 
scope of this proceeding.

G. Conduct Transmission System Planning Studies for Extreme Heat and 
Cold Weather Events

1. Steady State and Transient Stability Analyses
    95. The Commission proposed in the NOPR to require both steady 
state and transient stability analyses be conducted for extreme heat 
and cold weather events as part of transmission planning studies.\155\ 
Consistent with Reliability Standard TPL-001-5.1, the NOPR stated that 
steady state and stability analyses of study cases modeled to reflect 
past and forecasted extreme heat and cold conditions would better 
prepare transmission operators for such

[[Page 41275]]

conditions.\156\ The NOPR explained that a steady-state analysis is 
based on a snapshot in time where the bulk electric system facilities 
such as generators, transmission lines, transformers etc. are modeled 
as fixed and load is modeled as a constant.\157\ On the other hand, 
transient stability or dynamic analyses simulate the time-varying 
characteristics of the system during a disturbance that occurs during 
an extreme heat or cold event.\158\ The NOPR further stated that 
performing these studies in the long-term planning horizon period 
(i.e., six to ten years and beyond) will provide an adequate lead time 
for entities to develop and implement corrective action plans to reduce 
the likelihood or mitigate the consequences and adverse impacts of such 
events.\159\
---------------------------------------------------------------------------

    \155\ NOPR, 179 FERC ] 61,195 at P 69.
    \156\ Id. P 70.
    \157\ Id. P 59.
    \158\ Id. P 60.
    \159\ Id. P 58.
---------------------------------------------------------------------------

    96. The NOPR noted that the use of dynamic studies is particularly 
important given the changing resource mix and the need to understand 
the dynamic behavior of both traditional generators and variable energy 
resources (VERs) (i.e., wind and solar photovoltaic).\160\
---------------------------------------------------------------------------

    \160\ Id. P 61.
---------------------------------------------------------------------------

    97. The NOPR sought comments on all aspects of the proposal, and 
specifically, on whether responsible entities should include 
contingencies based on their planning area and perform both steady 
state and transient stability (dynamic) analyses using extreme heat and 
cold cases. In addition, the NOPR invited comments on the following 
topics: (1) the set of contingencies responsible entities must 
consider; (2) required analyses to assess voltage stability, frequency 
excursions and angular deviations caused as a result of near 
simultaneous outages or common mode failures of VERs; and (3) the role 
of demand response under such scenarios.\161\
---------------------------------------------------------------------------

    \161\ Id. P 62. The NOPR also sought comment on whether existing 
Reliability Standards are sufficient to ensure that responsible 
entities performing studies of extreme heat and cold weather 
conditions have the necessary data, and/or whether the Commission 
should direct additional modifications pursuant to FPA section 
215(d)(5) to address this issue. Id. P 63. This question is 
discussed in section IV.E of this final rule.
---------------------------------------------------------------------------

a. Comments
    98. All those who commented on the NOPR proposal to require both 
steady state and transient stability analyses agree with the NOPR that 
both steady state and transient stability analyses should be performed 
in order to understand the potential impacts of extreme heat and cold 
weather events.\162\ Below, we discuss comments received on the 
following topics: (i) required contingencies; (ii) analyses of common 
mode failures; and (iii) demand response.
---------------------------------------------------------------------------

    \162\ See, e.g., NERC Comments at 9; PJM Comments at 10; Tri-
State Comments at 4; Eversource Comments at 5; WE ACT for 
Environmental Justice Comments at 4; LCRA Comments at 3; UCS 
Comments at 7.
---------------------------------------------------------------------------

i. Required Set of Contingencies
    99. Idaho Power supports the inclusion of contingencies listed in 
Table 1 of Reliability Standard TPL-001-4 such as the loss of two 
generating stations resulting from, among other events, severe weather, 
as it currently applies these contingencies in its severe weather 
studies.\163\
---------------------------------------------------------------------------

    \163\ Idaho Power Comments at 3.
---------------------------------------------------------------------------

    100. AEP recommends that the Commission direct NERC to revise and 
reclassify the contingency lists in Reliability Standard TPL-001-5.1 to 
``reflect the unique challenges posed by extreme weather events'' and 
to ensure that the bulk electric system is operated to withstand N-1-1 
contingencies ``without interruption of firm transmission service or 
non-consequential load loss.'' \164\ NYISO recommends expanding NERC 
planning events to include the weather-related loss of generation 
across areas of the system in the design-basis contingencies rather 
than as an extreme contingency.\165\ Southern California Edison Company 
(SCE) suggests that NERC determine whether additional contingencies 
should be developed to evaluate potential reliability risks from events 
occurring at the same or sequential times in the same region that have 
the potential to pose an aggregate impact on electricity assets, 
operations, and services, e.g., an extreme heat event that reduces grid 
capacity while increasing demand for cooling.\166\ LCRA suggests that 
performing contingency analyses similar to what is required under 
Reliability Standard CIP-014-3 (Physical Security) may be useful.\167\ 
LCRA states, for example, that the analysis could study the outage of 
medium impact facilities (e.g., single circuit, common tower). If the 
result of the analysis identifies instability, cascading, uncontrolled 
islanding, or excessive load shed, these facilities could be identified 
as ``weather critical'' and targeted for hardening as part of a 
corrective action plan.\168\
---------------------------------------------------------------------------

    \164\ AEP Comments at 4.
    \165\ NYISO Comments at 14.
    \166\ SCE Comments at 4.
    \167\ Reliability Standard CIP-014-3 requires entities to assess 
their transmission facilities to determine whether, if rendered 
inoperable or damaged, they could result in widespread instability, 
uncontrolled separation, or cascading. Reliability Standard CIP-014-
3 (Physical Security), at 1.
    \168\ LCRA Comments at 2.
---------------------------------------------------------------------------

    101. Other commenters state that responsible entities should be 
able to consider contingencies beyond those in Table 1 of Reliability 
Standard TPL-001.5.1 that will affect their study area.\169\ For 
example, PJM emphasizes the need for regional variance for unique 
contingencies to be studied.\170\ Eversource recommends that the 
Commission avoid prescription and allow details such as the types of 
required contingencies to be determined during the standard development 
process.\171\
---------------------------------------------------------------------------

    \169\ AEP Comments at 4; Idaho Power Comments at 3; Tri-State 
Comments at 4, PJM Comments at 11.
    \170\ AEP Comments at 4; Idaho Power Comments at 3; Tri-State 
Comments at 4, PJM comments at 11.
    \171\ Eversource Comments at 4.
---------------------------------------------------------------------------

    102. EPRI asserts that clarification is needed to differentiate 
between events that impact the initial conditions of the benchmark 
scenario for which the contingency events will be analyzed, and the 
actual contingencies meant to be captured as acute impacts to the 
system that occur over a wide area and can be studied through the 
steady state and transient stability processes.\172\
---------------------------------------------------------------------------

    \172\ EPRI Comments at P 21.
---------------------------------------------------------------------------

ii. Analyses for Common Mode Failures
    103. NERC and ACP agree that Reliability Standard TPL-001-5.1 
should better address the risk posed by extreme heat and cold weather 
events and the associated common mode failure impacting resource 
availability and the transmission system.\173\
---------------------------------------------------------------------------

    \173\ NERC Comments at 6; ACP Comments at 9 n.23.
---------------------------------------------------------------------------

    104. EPRI states that the benchmark planning cases, which serve as 
the basis for steady state and transient stability assessments, 
historically have not been developed to include the correlated impacts 
of common mode events based on the impact of extreme temperature on 
load and the availability of derated generation and transmission 
capacity. EPRI asserts that capturing extreme temperature conditions 
for both heat and cold would require a new approach that directly 
accounts for the correlated temperature-related impacts to supply and 
demand.\174\ EPRI agrees with the Commission's proposal that dynamic 
models of VERs need to be included in the studies but states they would 
need to be sufficiently robust to accurately capture system performance 
under extreme weather conditions.\175\
---------------------------------------------------------------------------

    \174\ EPRI Comments at PP 3-4.
    \175\ Id. P 11.

---------------------------------------------------------------------------

[[Page 41276]]

    105. Indicated Trade Associations state that in any case modeling 
these scenarios will likely require additional resources in time, 
expertise, and enhanced software capabilities.\176\ Indicated Trade 
Associations ask that the standard drafting team recognize the range 
and quantity of complexities layered into the modeling process, e.g., 
whether concurrent generators must be in a single or multiple balancing 
authority area, how many generators are needed for a given study, and 
if there is a particular combination of generators needed for 
modeling.\177\
---------------------------------------------------------------------------

    \176\ Indicated Trade Associations at 9.
    \177\ Id.
---------------------------------------------------------------------------

iii. Demand Response
    106. EDF and UCS suggest that when evaluating relevant distribution 
system impacts, responsible entities should focus on the impacts of the 
extreme weather event on both electric demand and on the capability of 
the distribution system assets, including demand response, distributed 
storage and generation, and utility-scale storage, to mitigate 
reliability risks.\178\
---------------------------------------------------------------------------

    \178\ EDF Comments at 22-23; UCS Comments at 7-8.
---------------------------------------------------------------------------

    107. APS comments that demand response should be used as a tool to 
resolve issues and only studied when it is relied on as a mitigation 
action.\179\
---------------------------------------------------------------------------

    \179\ APS Comments at 4.
---------------------------------------------------------------------------

    108. Eversource states that the Commission should encourage 
regional flexibility in any consideration of demand response. 
Eversource further comments that the Commission should not impose a 
``one size fits all'' approach for resources that may significantly 
differ based on location. It is also concerned that during extreme 
weather events, demand response with heating or cooling-based load 
reduction may not be achievable due to safety concerns.\180\
---------------------------------------------------------------------------

    \180\ Eversource Comments at 6.
---------------------------------------------------------------------------

    109. EPRI asserts that steady state simulation cannot sufficiently 
capture demand response, and that there is limited capability to 
capture the aggregated dynamic response of demand in the load models 
used in positive sequence platforms. EPRI adds that ``the impacts of 
demand response are better represented through appropriate temporal and 
diurnal patterns that would inform the load and demand profile under a 
given extreme temperature condition. This information is best 
represented in operational assessments such as resource adequacy or 
production cost modeling.'' \181\
---------------------------------------------------------------------------

    \181\ EPRI Comments at P 12.
---------------------------------------------------------------------------

    110. LCRA notes that while the role of demand response in its 
portion of the Bulk-Power System is negligible today, this could change 
in the future as additional large loads (e.g., cryptocurrency mining 
and data centers) are energized. LCRA states that this trend should be 
observed for further consideration in the future.\182\
---------------------------------------------------------------------------

    \182\ LCRA Comments at 2-3.
---------------------------------------------------------------------------

b. Commission Determination
    111. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to require in the proposed new or modified 
Reliability Standard that responsible entities perform both steady 
state and transient stability (dynamic) analyses in the extreme heat 
and cold weather planning studies. In a steady state analysis, the 
system components are modeled as either in-service or out-of-service 
and the result is a single point-in-time snapshot of the system in a 
state of operating equilibrium. A transient stability (dynamic) 
analysis examines the system from the start to the end of a disturbance 
to determine if the system regains a state of operating 
equilibrium.\183\ Performing both analyses ensures that the system has 
been thoroughly assessed for instability, uncontrolled separation, and 
cascading failures in both the steady state and the transient stability 
realms.
---------------------------------------------------------------------------

    \183\ Plots are created during the dynamic simulation from pre 
to post disturbance and are then examined for voltage, frequency, 
and rotor angle stability, which cannot be assessed using only a 
steady state analysis.
---------------------------------------------------------------------------

    112. We also adopt the NOPR proposal and direct NERC to define a 
set of contingencies that responsible entities will be required to 
consider when conducting wide-area studies of extreme heat and cold 
weather events under the new or modified Reliability Standard. We 
believe that it is necessary to establish a set of common contingencies 
for all responsible entities to analyze. Required contingencies, such 
as those listed in Table 1 of Reliability Standard TPL-001-5.1 (i.e., 
category P1 through P7), establish common planning events that set the 
starting point for transmission system planning assessments. Requiring 
the study of predefined contingencies will ensure a level of uniformity 
across planning regions--a feature that will be necessary in the new or 
revised Reliability Standard considering that extreme heat and cold 
weather events often exceed the geographic boundaries of most existing 
planning footprints.
    113. Additionally, establishing a set of required contingencies 
will aide in the auditing and enforcement of the new or revised 
Reliability Standard. While we do not require in this final rule the 
inclusion of any particular contingency, we agree with commenters that 
the contingencies required in the new or revised Reliability Standard 
should reflect the complexities of transmission system planning studies 
for extreme heat and cold weather events. As such, NERC may determine 
whether contingencies P1 through P7 should also apply to the new or 
modified Reliability Standard, or whether a new set of contingencies 
should be developed.
    114. Regarding the request for clarification from EPRI as to what 
outages should be included in the benchmark planning case versus 
modeled as contingencies, we believe the standard drafting team is best 
positioned to consider that specific question. By definition, the 
benchmark planning case will already include certain weather-related 
contingencies that therefore will not be studied as additional 
contingencies when conducting extreme weather studies.\184\ For 
example, baseline drought conditions will be present in the benchmark 
planning case as part of the system models representing projected 
system conditions,\185\ whereas the impacts of more severe droughts 
could be studied during sensitivity analysis as a variation to the 
benchmark planning case's generation assumptions.\186\ As discussed in 
section IV.F above, we direct NERC to develop specific criteria for 
determining which outages should be considered in the benchmark 
planning case.
---------------------------------------------------------------------------

    \184\ See supra P 39.
    \185\ See supra note 155.
    \186\ See infra P 124.
---------------------------------------------------------------------------

    115. Regarding the study of common mode failures, we reiterate our 
above directives concerning the study of concurrent/correlated 
generator and transmission outages. We believe that, as suggested by 
Indicated Trade Associations, the standard development process will 
provide an adequate platform to address the concerns raised by 
commenters regarding common mode failures.
    116. We also direct NERC to require in the new or modified 
Reliability Standard that responsible entities model demand load 
response in their extreme weather event planning area. As indicated by 
several commenters, because demand load response is generally a 
mitigating action that involves reducing distribution load during 
periods of stress to stabilize the Bulk-Power System, its effect during 
an extreme weather event should be modeled.
    117. Regarding EPRI's comment that steady state simulation cannot

[[Page 41277]]

sufficiently capture demand load response, we believe EPRI's comments 
are accurate for modeling in the operational timeframe for temporal and 
diurnal studies. However, we recognize that it is possible that the 
loads used to represent extreme heat and cold events will include the 
effects of demand load response because entities' load data obtained 
from historical data during these past extreme events will reflect the 
effects of demand load response. If that is the case, demand load 
response will be automatically factored into the benchmark planning 
case. Thus, in addressing this directive, we expect NERC to determine 
whether responsible entities will need to take additional steps to 
ensure that the impacts of demand load response are accurately modeled 
in extreme weather studies, such as by analyzing demand load response 
as a sensitivity, as is currently the case under Reliability Standard 
TPL-001-5.1.\187\
---------------------------------------------------------------------------

    \187\ Reliability Standard TPL-001-5.1, at Requirement 2.1.3.
---------------------------------------------------------------------------

2. Sensitivity Analysis
    118. In the NOPR, the Commission proposed directing NERC to 
establish a requirement for responsible entities to consider system 
models and sensitivity cases when assessing extreme heat and extreme 
cold weather.\188\ The NOPR explained that, while Reliability Standard 
TPL-001-5.1 requires the use of sensitivity power flow cases, the 
Standard does not require responsible entities to model the 
simultaneous variation of load, generation, and transfers necessary to 
account for the impacts of extreme heat and cold weather events. This, 
in turn, could result in failure to detect in the planning horizon 
potential reliability issues such as widespread outages and cascading 
failures.\189\
---------------------------------------------------------------------------

    \188\ NOPR, 179 FERC ] 61,195 at P 73. Sensitivity analyses 
consider the impact on a base case by altering discrete variables.
    \189\ Id.
---------------------------------------------------------------------------

    119. The NOPR further stated that to accurately model the impacts 
of extreme heat and cold weather events it would be necessary to define 
and model in sensitivity analyses demand probability scenario cases, 
generators that are affected by these events (i.e., wind tripping off, 
solar dropping off, gas plants not being operational due to gas 
restrictions/freeze-offs, etc.) and transfer levels.\190\
---------------------------------------------------------------------------

    \190\ Id.
---------------------------------------------------------------------------

    120. The NOPR requested comment on: (1) whether to require 
transmission planners and planning coordinators to assess reliability 
in the planning horizon for sensitivity cases in which multiple inputs 
(e.g., load and generator failures) change simultaneously during 
extreme heat and cold events; and (2) the range of factors and the 
number of sensitivity cases that should be considered to ensure 
reliable planning.\191\
---------------------------------------------------------------------------

    \191\ Id. P 74.
---------------------------------------------------------------------------

a. Comments
    121. Some commenters support requiring the consideration of certain 
sensitivities. For example, AEP recommends that a baseline set of 
sensitivities should be defined by the NERC standard drafting team and 
there should be flexibility for planning coordinators to introduce 
further sensitivities if deemed necessary.\192\ EPRI suggests that 
multiple hours may need to be studied over the course of the extreme 
temperature window to capture sensitivities related to generation and 
demand that can lead to differing steady state and dynamic stability 
impacts. EPRI also recommends that in addition to the sensitivities 
driven by the operational performance of the system, the standard 
should include other external drivers that may compound system 
conditions during the extreme temperature events, such as a concurrent 
lull in wind speeds that would limit wind generation outputs.\193\
---------------------------------------------------------------------------

    \192\ AEP Comments at 12.
    \193\ EPRI Comments at P 22.
---------------------------------------------------------------------------

    122. Other commenters suggest reasons why it may not be necessary 
for the Commission to direct the study of additional sensitivities. 
NYISO and LCRA explain that extreme heat and cold weather impacts and 
unavailability of natural gas fuel are already studied as sensitivities 
under Reliability Standard TPL-001-5.1.\194\ Similarly, Indicated Trade 
Associations assert that the extreme weather base case should already 
represent system conditions at or near possible seasonal extreme 
weather limits and that, as such, many additional sensitivities may not 
be necessary.\195\ LCRA adds that the effect of changing inputs (e.g., 
load and generation, including generation retirements and forced 
generation outages) should be captured in the contingency definitions, 
performance requirements, and analysis for the given region and extreme 
weather case.\196\
---------------------------------------------------------------------------

    \194\ NYISO Comments at 13; LCRA Comments at 3.
    \195\ Indicated Trade Associations Comments at 10.
    \196\ LCRA Comments at 3.
---------------------------------------------------------------------------

    123. Idaho Power, APS, and Indicated Trade Associations indicate 
that given the diversity among utilities with respect to load profiles, 
geographic footprint, resource mix, particular utility, its resource 
mix, and geographic footprint, and available resources and needs, the 
Commission should allow entities to select the sensitivities they will 
study.\197\
---------------------------------------------------------------------------

    \197\ Indicated Trade Associations Comments at 11; Idaho Power 
Comments at 4-5; APS Comments at 7.
---------------------------------------------------------------------------

b. Commission Determination
    124. Pursuant to section 215(d)(5) of the FPA, we adopt the NOPR 
proposal and direct NERC to require the use of sensitivity cases to 
demonstrate the impact of changes to the assumptions used in the 
benchmark planning case. Sensitivity analyses help a transmission 
planner to determine if the results of the base case are sensitive to 
changes in the inputs. The use of sensitivity analyses is particularly 
necessary when studying extreme heat and cold events because some of 
the assumptions made when developing a base case may change if 
temperatures change--for example, during extreme cold events, load may 
increase as temperatures decrease, while a decrease in temperature may 
result in a decrease in generation. We agree with AEP, and we direct 
NERC to define during the Reliability Standard development process a 
baseline set of sensitivities for the new or modified Reliability 
Standard. While we do not require the inclusion of any specific 
sensitivity in this final rule, NERC should consider including 
conditions that vary with temperature such as load, generation, and 
system transfers.\198\
---------------------------------------------------------------------------

    \198\ NOPR, 179 FERC ] 61,195 at P 73.
---------------------------------------------------------------------------

    125. We do not agree with Idaho Power, APS, and Indicated Trade 
Associations that responsible entities alone should determine the 
sensitivity cases that must be considered in the responsible entity's 
study. Failure to consider variations in conditions necessary to 
reflect extreme heat or cold weather events could result in major 
reliability risks being overlooked and undetected in the planning 
horizon.\199\ We do, however, believe that responsible entities should 
be free to study additional sensitivities relevant to their planning 
areas. Because wide-area studies conducted under the new or modified 
Reliability Standard will be likely based on footprints significantly 
larger than those typically concerned under Reliability Standard TPL-
001.5.1, cooperation will be necessary between responsible entities 
conducting extreme heat and cold weather studies and other registered 
entities within their extreme weather study footprints to ensure the 
selection of appropriate sensitivities. EPRI's comment further 
highlights the need for coordination between

[[Page 41278]]

registered entities to capture sensitivities related to variable energy 
resources and demand.
---------------------------------------------------------------------------

    \199\ See id.
---------------------------------------------------------------------------

    126. We disagree with NYISO and LCRA that extreme heat and cold 
weather impacts are already studied as sensitivities under Reliability 
Standard TPL-001-5.1. Although TPL-001-5.1 mandates sensitivity 
analysis by varying one or more conditions specified in the standard 
such as load, generation, and transfers, this analysis alone cannot 
capture the complexities of extreme heat and cold weather conditions. 
Sensitivity analyses consider the impact on a base case of the 
variability of discrete variables. Extreme heat and cold weather 
impacts, on the other hand, may include numerous concurrent outages and 
derates which cannot be studied as part of a single-variable 
sensitivity analysis. Under the new or modified Reliability Standard, 
however, these outages will be captured in the benchmark planning case 
upon which sensitivity analyses will be performed.
3. Modifications to the Traditional Planning Approach
    127. In the NOPR, the Commission proposed to direct NERC to 
consider alternative planning methods and techniques that diverge from 
past Reliability Standard requirements to better capture the challenges 
posed by extreme heat and cold events.\200\
---------------------------------------------------------------------------

    \200\ Id. P 75.
---------------------------------------------------------------------------

    128. The NOPR stated that Reliability Standard TPL-001-5.1 is based 
on a deterministic approach, which uses planned contingencies and 
specific performance criteria to study system response to various 
conditions. This approach yields accurate planning when the power 
supply is highly dispatchable, weather is predictable, and near-record 
peak demand is reached only a few days a year.\201\ However, as noted 
in the NOPR, the current planning approach applied in Reliability 
Standard TPL-001-5.1 likely is not sufficient to accurately 
characterize the reliability risk from extreme heat and cold weather 
given the high degree of uncertainty inherent in predicting severe 
weather and its impact on generation resources, transmission, and 
load.\202\
---------------------------------------------------------------------------

    \201\ Id.
    \202\ Id.
---------------------------------------------------------------------------

    129. The NOPR explained the value of establishing a new or modified 
planning approach to better capture the impacts of, and ensure reliable 
planning and operation in response to, extreme heat and cold 
events.\203\ Specifically, the NOPR mentioned as an option expanding 
current deterministic studies to include probabilistically developed 
scenarios as an option to better account for uncertainties during 
extreme heat and cold weather conditions, since probabilistic tools can 
capture ``random uncertainties in power system planning, including 
those in load forecasting, generator performance, and failures of 
system equipment.'' \204\
---------------------------------------------------------------------------

    \203\ Id. P 78.
    \204\ Id. P 79.
---------------------------------------------------------------------------

    130. Finally, the NOPR sought comments on combining or layering 
probabilistic and deterministic approaches when planning for extreme 
heat and cold weather conditions in the context of Reliability Standard 
TPL-001-5.1. Specifically, the NOPR sought comments on the use of a 
hybrid deterministic/probabilistic planning approach and the following: 
(1) the assumptions from the deterministic and probabilistic approaches 
that should be applied to study extreme heat and cold weather events; 
(2) the potential planning challenges from combining the two planning 
approaches; (3) the costs associated with adjustments to the currently 
applied deterministic approach; (4) the implementation period necessary 
for proposed changes; and (5) the reliability benefits that could 
result.\205\
---------------------------------------------------------------------------

    \205\ Id.
---------------------------------------------------------------------------

a. Comments
    131. Many commenters support the use of probabilistic methods in 
transmission planning to account for uncertainty in availability of 
transmission and generation in extreme weather conditions.\206\ For 
example, PJM states that the use of probabilistic modeling ``would help 
establish the baseline and sensitivity system conditions upon which 
deterministic approaches for go/no-go corrective action transmission 
build decisions would be made.'' \207\ EPRI discusses potential 
deficiencies in traditional deterministic approaches in planning 
studies in cases where uncertainty and variability will increase on 
both the generation and demand side across a variety of temperature 
extremes. EPRI raises concerns that scenarios or system conditions that 
result in consequential stability implications may not be adequately 
captured in the planning models using the traditional deterministic 
approach.\208\ ACP states that there is precedent for using 
probabilistic tools in assessing electric reliability, as these methods 
are widely used by utilities and RTOs to assess resource adequacy and 
loss of load risk.\209\
---------------------------------------------------------------------------

    \206\ See, e.g., NESCOE Comments at 9; EPRI Comments at P 24; 
PJM Comments at 11; EDF Comments at 20; PIOs Comments at 7; ACEG 
Comments at 7; NARUC Comments at 5-6; ACP Comments at 15; Entergy 
Comments at 6.
    \207\ PJM Comments at 11.
    \208\ EPRI Comments at P 24.
    \209\ ACP Comments at 16.
---------------------------------------------------------------------------

    132. Other commenters do not support a requirement to use 
probabilistic methods. For example, while AEP recognizes the value of 
probabilistic methods, it warns that the industry is not yet ready 
because the necessary methods, frameworks, and tools are not yet 
available to transmission planners.\210\ Several other commenters warn 
that it would be premature to require the use of probabilistic 
methods.\211\ Trade Associations express concern that probabilistic 
planning based on extremely low probability events is highly 
speculative and dependent on the judgment of planners, which increases 
the complexity and risk associated with the development of transmission 
projects, hampering the construction of needed transmission.\212\ Idaho 
Power also does not think converting to a probabilistic approach is 
necessary as sensitivities with appropriate inputs will capture the 
impacts of extreme weather using deterministic techniques.\213\ LCRA 
comments that probabilistic analysis requires large samples (i.e., 
number of events), but given the infrequent occurrence of extreme 
weather events, it would be challenging to layer probabilistic 
assumptions into transmission planning analyses.\214\
---------------------------------------------------------------------------

    \210\ AEP Comments at 22.
    \211\ APS Comments at 7 (requesting that the Commission hold 
``robust industry-wide discussions to discuss probabilistic 
approaches''); Tri-State Comments at 8.
    \212\ Trade Associations Comments at 11.
    \213\ Idaho Power Comments at 5.
    \214\ LCRA Comments at 3-4.
---------------------------------------------------------------------------

    133. Supporters of the use of probabilistic methods acknowledge 
that implementation poses challenges. For example, EPRI comments that 
implementation of probabilistic methods would require new processes to 
link and communicate data across models, such as linking generation and 
transmission expansion assessments, resource adequacy, production cost 
models, and transmission planning assessments.\215\ Further, new 
statistical methods and processes will be needed to inform the 
selection of powerflow cases for planning assessments.\216\ PJM states 
that the benefits of applying probabilistic methods would require 
knowing in advance pre-established bounded parameter ranges, so

[[Page 41279]]

reasonable selection of probabilistic method assumptions lead to 
benchmark planning cases that reflect statistically credible 
scenarios.\217\ PJM further states that this should be the result of 
coordinated analysis among RTOs, NOAA, DOE Labs, and NERC.\218\ Entergy 
asserts that the probabilistic approach is significantly more 
complicated than deterministic planning and cautions that any 
requirement for probabilistic planning must have requirements that 
reasonably can be performed, are assessable, and are auditable for 
compliance.\219\ Because of the potential challenges associated with 
implementing probabilistic planning requirements, Tri-State recommends 
the further study of and development of best practices for 
probabilistic planning.\220\
---------------------------------------------------------------------------

    \215\ EPRI Comments at P 25.
    \216\ Id.
    \217\ PJM Comments at 11.
    \218\ Id.
    \219\ Entergy Comments at 9.
    \220\ Tri-State Comments at 8.
---------------------------------------------------------------------------

b. Commission Determination
    134. Pursuant to section 215(d)(5) of the FPA, the Commission 
adopts and modifies the NOPR proposal and directs NERC to require in 
the new or modified Reliability Standard the use of planning methods 
that ensure adequate consideration of the broad characteristics of 
extreme heat and cold weather conditions. We further direct NERC to 
determine during the standard development process whether probabilistic 
elements can be incorporated into the new or modified Reliability 
Standard and implemented presently by responsible entities. If NERC 
identifies probabilistic elements which responsible entities can 
feasibly implement and that would improve upon existing planning 
practices, we expect the inclusion of those methods in the proposed 
Reliability Standard.
    135. Including probabilistic scenarios in the planning process 
could result in a planning approach that better captures the 
uncertainties of extreme weather events, thus better preparing 
responsible entities to ensure Reliable Operation under stressed 
conditions.\221\ Further, we agree with commenters that the use of 
probabilistic methods by responsible entities would help ensure 
Reliable Operation of the Bulk-Power System as probabilistic methods 
better characterize multi-day wide-area events such as extreme heat and 
cold events.\222\
---------------------------------------------------------------------------

    \221\ NOPR, 179 FERC ] 61,195 at P 76.
    \222\ EPRI Comments at 4.
---------------------------------------------------------------------------

    136. However, we recognize, as certain commenters point out, that a 
prescriptive requirement to add probabilistic planning methods to 
better understand reliability implications could be met by significant 
challenges. Some of the challenges identified by commenters include 
lack of commercially available tools required for probabilistic 
modeling and lack of planning staff trained in the use of these tools 
and in carrying out probabilistic studies. Further, there may be a need 
to develop and maintain probabilistic databases that include, for 
example, outage data from extreme weather-dependent grid components and 
generation resources.
    137. Because of these implementation concerns, we believe that the 
best course of action is to allow NERC to use its expertise and the 
standard development process to address the concerns identified by 
commenters and develop proposed modifications to existing planning 
methods that address the Commission's directive to use transmission 
planning methods that adequately characterize the effects of extreme 
heat and cold weather conditions on the transmission system, including 
incorporating probabilistic elements where possible. The standard 
development process will also provide an adequate forum in which to 
evaluate the many recommendations that commenters have presented in 
response to the NOPR.
    138. We also direct NERC to identify during the standard 
development process any probabilistic planning methods that would 
improve upon existing planning practices, but that NERC deems 
infeasible to include in the proposed Reliability Standard at this 
time. If any such methods are identified, NERC shall describe in its 
petition for approval of the proposed Reliability Standard the barriers 
preventing the implementation of those probabilistic elements. We 
intend to use this information to determine whether and what next steps 
may be warranted to facilitate the use of probabilistic methods in 
transmission system planning practices.

H. Implement a Corrective Action Plan if Performance Standards Are Not 
Met

    139. The NOPR noted that under the currently effective Reliability 
Standard TPL-001-5.1, planning coordinators and transmission planners 
are required to evaluate possible actions to reduce the likelihood or 
mitigate the consequences of extreme weather events, but are not 
obligated to develop corrective action plans, even if such events are 
found to cause cascading outages.\223\ Because of the potential 
severity of extreme heat and cold weather events and their likelihood 
to cause system instability, uncontrolled separation, or cascading 
failures as a result of a sudden disturbance or unanticipated failure 
of system elements, the NOPR proposed to direct NERC to require 
corrective action plans that include mitigation for any instances where 
performance requirements for extreme heat and cold events are not 
met.\224\
---------------------------------------------------------------------------

    \223\ NOPR, 179 FERC ] 61,195 at P 83. Reliability Standard TPL-
001-5.1, Requirements R3.3.5 and R4.4.5 require computer simulation 
analyses of extreme events listed in Table 1 of the standard (some 
listed are examples and are not definitive), and if the analysis 
concludes there is cascading caused by the occurrence of extreme 
events, an evaluation of possible actions designed to reduce the 
likelihood or mitigate the consequences and adverse impacts of the 
event(s) shall be conducted.
    \224\ Id.
---------------------------------------------------------------------------

    140. Consistent with the existing requirements of Reliability 
Standard TPL-001-5.1, the NOPR proposed to provide responsible entities 
with the flexibility to determine the actions to include in their 
corrective action plans to remedy identified deficiencies in 
performance. The NOPR included several examples of actions that could 
be included in a corrective action plan: planning for additional 
contingency reserves or implementing new energy efficiency programs to 
decrease load, increasing intra- and inter-regional transfer 
capabilities, transmission switching, or adjusting transmission and 
generation maintenance outages based on longer-lead forecasts. The NOPR 
observed that well-planned mitigation and corrective actions that 
account for some of these contingencies will minimize loss of load and 
improve resilience during extreme heat and cold weather events.\225\
---------------------------------------------------------------------------

    \225\ Id. P 84.
---------------------------------------------------------------------------

    141. The NOPR explained that increases in interregional transfer 
capability could be considered as one option to address potential 
reliability issues during extreme weather events.\226\ The NOPR noted 
that such transfer capability would allow an entity in one region with 
available energy to assist one or more entities in another region that 
is experiencing an energy shortfall due to the extreme weather 
event.\227\ Increasing interregional transfer capability may be a 
particularly robust option for planning entities attempting to mitigate 
the risks associated with concurrent generator outages over a wide 
area.\228\
---------------------------------------------------------------------------

    \226\ Id. P 85.
    \227\ Id.
    \228\ Id. In this proceeding, we refer to interregional transfer 
capability strictly in the context of improving the reliability of 
the Bulk-Power System through improved transmission system planning 
and associated modifications to NERC's Reliability Standards.

---------------------------------------------------------------------------

[[Page 41280]]

    142. To ensure the timely development and implementation of 
corrective action plans, the NOPR sought comments on the timeframe for 
developing such corrective action plans and sharing of the corrective 
actions with other interconnected planning entities.\229\ In addition, 
to identify opportunities for improved wide-area planning studies and 
coordination, the NOPR requested comment on how to develop corrective 
action plans that mitigate issues that require corrective action by, 
and coordination among, multiple transmission owners.\230\
---------------------------------------------------------------------------

    \229\ Id.
    \230\ Id. P 67.
---------------------------------------------------------------------------

1. Comments
a. Jurisdictional Issues
    143. Several commenters raise jurisdictional concerns regarding 
corrective action plans.\231\ While Indicated Trade Associations 
support the NOPR proposal to require corrective action plans addressing 
vulnerabilities identified in the study process, they also urge that 
the Commission ``remain mindful'' of the statutory limitation set forth 
in FPA section 215(i) that NERC and the Commission do not have 
authority ``to order the construction of additional generation or 
transmission capacity or to set or enforce compliance with standards 
for adequacy or safety of electric facilities or services.'' \232\ In 
particular, Indicated Trade Associations express concern that certain 
examples of potential corrective action plans mentioned in the NOPR, 
including ``planning for additional contingency reserves . . . or 
increasing intra- and inter-regional transfer capabilities,'' exceed 
the Commission's authority under section 215 of the FPA.\233\ 
Similarly, Electric Reliability Council of Texas, Inc. (ERCOT) opines 
that ``[r]equiring transmission planners to address what is 
fundamentally a resource adequacy concern through the transmission 
planning process would usurp the authority of the states, which are 
responsible for ensuring the adequacy of the generation supply.'' \234\
---------------------------------------------------------------------------

    \231\ Indicated Trade Associations Comments at 11-12; ERCOT 
Comments at 5.
    \232\ Indicated Trade Association Comments at 12 (citing 16 
U.S.C. 824o(i)).
    \233\ Id. at 11-12; ERCOT Comments at 5.
    \234\ ERCOT Comments at 5.
---------------------------------------------------------------------------

b. Corrective Action Plans
    144. Most commenters agree that corrective action plans should be 
required to address system performance issues identified in studies 
under extreme heat and cold weather conditions.\235\ NERC agrees that 
any revised Reliability Standard directed under a final rule issued in 
this proceeding should require that entities develop corrective action 
plans for instances where performance requirements for selected extreme 
weather and environmental conditions are not met for at least some of 
the planning scenarios.
---------------------------------------------------------------------------

    \235\ See, e.g., NERC Comments at 10; NARUC Comments at 6; 
NESCOE Comments at 3; MISO Comments at 4.; PJM Comments at 12.
---------------------------------------------------------------------------

    145. BPA asserts that several of the corrective action plan 
examples listed in the NOPR, such as transmission switching/
reconfiguration, or adjusting transmission and generation maintenance 
outages, would likely be covered by Reliability Standard EOP-011-2, 
requiring transmission operators and balancing authorities to have 
operating plans to mitigate operating emergencies including determining 
the reliability impacts of extreme weather conditions. Therefore, BPA 
cautioned, any modifications to Reliability Standard TPL-001-5.1 should 
be careful not to encroach upon the authority and discretion of 
transmission operators and balancing authorities.\236\
---------------------------------------------------------------------------

    \236\ BPA Comments at 4.
---------------------------------------------------------------------------

    146. Some commenters do not support the NOPR proposal to require 
the development and implementation of corrective action plans for all 
instances where performance requirements for extreme heat and cold 
events are not met. APS asserts that ``corrective action plans should 
be focused on the most likely and impactful events, which may not 
include extreme weather scenarios,'' and that as such, it disagrees 
that corrective action plans ``should be required for results that come 
out of sensitivity analysis, which includes extreme weather 
scenarios.''
    147. With regard to costs, National Association of Regulatory 
Utility Commissioners (NARUC) asserts that mitigation and corrective 
actions to minimize loss of load and improve resilience should be 
subjected to a cost/benefit analysis.\237\ Entergy suggests that the 
Commission ``provide additional guidance regarding the level of 
performance it expects during extreme heat and cold events,'' including 
consideration of ``the cost effects on customers relative to the 
potential risks and the time-frame in which those risks are likely to 
arise.'' \238\
---------------------------------------------------------------------------

    \237\ NARUC Comments at 6.
    \238\ Entergy Comments at 2.
---------------------------------------------------------------------------

c. Generation and Transmission Capacity Increase and Resource Adequacy 
Issues
    148. Most commenters agree that the responsible entities developing 
corrective action plans should evaluate a range of solutions, including 
transmission upgrades to increase interregional transfer capability 
and/or building generation to address generation deficiency under 
extreme weather events.\239\ Some commenters, however, question the 
efficacy of corrective action plans and suggest that alternative 
approaches are preferable.
---------------------------------------------------------------------------

    \239\ See, e.g., NARUC Comments at 6; UCS Comments at 9; PIOs 
Comments at 15; AEP Comments at 5; ACEG Comments at 8; ACP Comments 
at 11; Entergy Comments at 8.
---------------------------------------------------------------------------

    149. With regards to transmission capacity, and specifically 
interregional transfer capabilities, many commenters agree that 
adequate interregional transfer capability would help address 
reliability challenges posed by extreme heat and cold weather 
conditions.\240\ Some commenters urge the Commission to set a minimum 
interregional transfer capability requirement.\241\ However, most 
commenters addressing this topic opine that interregional transfer 
requirements, including setting necessary or minimum transfer levels 
and direction, should be addressed outside of the Reliability Standard 
TPL-001-5.1 planning process.\242\ For example, MISO Transmission 
Owners suggest that interregional transfers could be better dealt with 
under Order No. 1000 Regional Transmission Planning processes.\243\ 
MISO recommends that corrective action plans require meaningful 
mitigation, such as investment in transmission solutions, to address 
issues identified in an extreme weather event study.\244\ Conversely, 
Idaho Power states that if regional transmission facilities are to be 
considered as corrective actions, Idaho Power would have concerns with 
the efficacy of those corrective actions given the amount of time 
necessary to build new transmission.\245\
---------------------------------------------------------------------------

    \240\ AEP Comments at 2; ACP Comments at 19; ACEG Comments at 9; 
PJM Comments at 12; see MISO Transmission Owners Comments at 5-6.
    \241\ EDF Comments at 27; AEP Comments at 2; ACP Comments at 19; 
ACEG Comments at 9; PJM Comments at 12.
    \242\ MISO Transmission Owners Comments at 5-6; ACP Comments at 
19; ACEG Comments at 9; AEP Comments at 2.
    \243\ MISO Transmission Owners Comments at 5.
    \244\ MISO Comments at 4.
    \245\ Idaho Power Comments at 4, 6.
---------------------------------------------------------------------------

    150. Most commenters who disagree with the NOPR proposal to allow 
entities to consider additional generation capacity as a corrective 
action plan measure disagree on the

[[Page 41281]]

basis that resource adequacy is not a matter that should be dealt with 
within the transmission planning process.\246\ For example, ISO-NE 
asserts that the purpose of Reliability Standard TPL-001-5.1 is not to 
ensure resource adequacy, but to ensure that load can be served.\247\ 
ACP and PIOs question the efficacy of building new generation as part 
of a corrective action plan because such new generation may be subject 
to the same issues as existing generation--for example, if an extreme 
cold event leads to the outage of weather-sensitive generators, adding 
more weather-sensitive generators will not resolve the resource 
deficiency.\248\
---------------------------------------------------------------------------

    \246\ See, e.g., PJM Comments at 12; ERCOT Comments at 5; ISO-NE 
Comments at 4.
    \247\ ISO-NE Comments at 4.
    \248\ ACP Comments at 6; PIOs Comments at 16.
---------------------------------------------------------------------------

d. Notification to Applicable Regulatory Authorities or Governing 
Bodies Responsible for Retail Electric Service Issues
    151. ACP, New England States Committee on Electricity (NESCOE), and 
Entergy comment that entities must coordinate with state and local 
authorities in the development of corrective action plans involving 
generation and transmission capacity.\249\ For example, NESCOE suggests 
that corrective action plans be informed by state officials' 
perspectives, consider a variety of mitigation options, and include a 
detailed explanation of how the entity weighed the various 
options.\250\ Additionally, NESCOE points out that given the likelihood 
that corrective action plans will include load shed, state officials 
should be involved in the corrective action plan process.\251\ NESCOE 
proposes that responsible entities seek input from state regulators 
during their planning process. Alternatively, NESCOE recommends the 
adoption of the Joint Federal-State Task Force on Electric Transmission 
model to create a similar task force focusing on extreme weather and 
grid reliability.\252\
---------------------------------------------------------------------------

    \249\ See ACP Comments at 18; NESCOE Comments at 3; see also 
Entergy Comments at 9 (stating in the context of the development of 
corrective action plans that ``[t]he Commission also should ensure 
that the relevant retail regulators have input into the level of 
risks versus costs a transmission owner should accept.'').
    \250\ NESCOE Comments at 3.
    \251\ Id. at 5.
    \252\ Id. at 6.
---------------------------------------------------------------------------

2. Commission Determination
    152. Pursuant to section 215(d)(5) of the FPA, the Commission 
adopts and modifies the NOPR proposal and directs NERC to require in 
the new or modified Reliability Standard the development of extreme 
weather corrective action plans for specified instances when 
performance standards are not met. In addition, as explained below, we 
direct NERC to develop certain processes to facilitate interaction and 
coordination with applicable regulatory authorities or governing bodies 
responsible for retail electric service as appropriate in implementing 
a corrective action plan.
    153. We adopt our rationale set forth in the NOPR and conclude that 
the directive to require the development of corrective action plans is 
needed for Reliable Operation of the Bulk-Power System. Under the 
currently effective Reliability Standard TPL-001-5.1, planning 
coordinators and transmission planners are required to evaluate 
possible actions to reduce the likelihood or mitigate the consequences 
of extreme weather events, but are not obligated to develop corrective 
action plans, even if such events are found to cause cascading outages. 
Experience over the past decade has demonstrated that the potential 
severity of extreme heat and cold weather events exacerbates the 
likelihood to cause system instability, uncontrolled separation, or 
cascading failures as a result of a sudden disturbance or unanticipated 
failure of system elements. Thus, we conclude that entities should 
proactively address known system vulnerabilities by developing 
corrective action plans that include mitigation for specified instances 
where performance requirements for extreme heat and cold events are not 
met.
a. Jurisdictional Issues
    154. We reject the arguments that our directive to require 
responsible entities to develop corrective action plans may exceed the 
Commission's jurisdiction. Section 215(i)(2) of the FPA states that the 
Commission and ERO are not authorized to order the construction of 
additional generation or transmission capacity as part of a Reliability 
Standard.\253\ Consistent with this limitation, the final rule does not 
require any responsible entity to engage in the construction of 
additional generation or transmission capacity. Moreover, while the 
final rule directs NERC to include in a new or modified Reliability 
Standard a requirement for entities to develop a corrective action plan 
to address extreme heat and cold weather events during the transmission 
planning process, the final rule does not mandate the use of any 
specific mitigation measure.\254\
---------------------------------------------------------------------------

    \253\ 16 U.S.C. 824o(i)(2).
    \254\ NOPR, 179 FERC ] 61,195 at P 84 (``we believe it is 
appropriate to provide responsible entities with the flexibility to 
determine the best actions to include in their corrective action 
plan to remedy any identified deficiencies in performance'').
---------------------------------------------------------------------------

    155. As noted by commenters, the NOPR provided examples of various 
activities that may be appropriate under a corrective action plan, some 
of which may require state or local authorizations (e.g., generation or 
transmission development).\255\ Other examples mentioned in the NOPR 
include ``implementing new energy efficiency programs to decrease load, 
. . . transmission switching, or adjusting transmission and generation 
maintenance outages based on longer-lead forecasts,'' \256\ none of 
which involve the construction of generation or transmission capacity. 
In addition, responsible entities have the option to use controlled 
load shed as a mitigation measure. In sum, while responsible entities 
would have the obligation to develop and implement a corrective action 
plan, the Commission is not directing any specific result or content of 
the corrective action plan. In such circumstances, the Commission's 
directive does not exceed the jurisdictional limits set forth in 
section 215(i) of the FPA.\257\
---------------------------------------------------------------------------

    \255\ Id.
    \256\ Id.
    \257\ S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 80 (D.C. Cir. 
2014).
---------------------------------------------------------------------------

    156. In response to ERCOT and other commenters, the Commission's 
action does not usurp state authority with regard to resource adequacy. 
As explained above, the directive that responsible entities develop 
corrective action plans in certain circumstances does not require the 
construction of additional generation or transmission capacity. 
Further, as discussed below, responsible entities that elect mitigation 
activities that involve increased transmission or generation capacity 
will of course be subject to the authority of such state agencies or 
others with legal jurisdiction over the construction of transmission or 
generation facilities.
b. Circumstances That Require Corrective Action Plans
    157. As stated above, we adopt and modify the NOPR proposal and 
direct NERC to require in the new or modified Reliability Standard the 
development of corrective action plans that include mitigation for 
specified instances where performance requirements for extreme heat and 
cold events are not met--i.e., when certain studies conducted under the 
Standard show that an extreme heat or cold event would result in 
cascading outages, uncontrolled separation, or instability.\258\ We 
agree with APS that

[[Page 41282]]

neither version 4 nor 5.1 of Reliability Standard TPL-001-5.1 require 
corrective action plans for extreme heat and cold weather events. 
Extreme heat and cold weather events, which pose a serious risk to the 
Reliable Operation of the Bulk-Power System, are increasing in 
frequency and intensity. We believe that in taking steps to avoid 
occurrences of cascading outages, uncontrolled separation, or 
instability under extreme heat and cold, corrective action plans would 
also minimize the extent and duration of loss of load and improve Bulk-
Power System resilience during extreme heat and cold weather 
events.\259\
---------------------------------------------------------------------------

    \258\ NOPR, 179 FERC ] 61,195 at P 83.
    \259\ Id. P 84.
---------------------------------------------------------------------------

    158. Although the NOPR proposed requiring the development of 
corrective action plans for any instance where performance requirements 
for extreme heat and cold events are not met, we give NERC in this 
final rule the flexibility to specify the circumstances that require 
the development of a corrective action plan. For example, NERC should 
determine whether corrective action plans should be required for single 
or multiple sensitivity cases, and whether corrective action plans 
should be developed if a contingency event that is not already included 
in benchmark planning case would result in cascading outages, 
uncontrolled separation, or instability.\260\ Because we also direct 
NERC to establish required study contingencies and baseline 
sensitivities,\261\ we believe it is necessary for NERC to develop 
those aspects of the Standard prior to determining the instances under 
which corrective action plans must be developed.
---------------------------------------------------------------------------

    \260\ Under Reliability Standard TPL-001-5.1, corrective action 
plans are not required for single sensitivity cases.
    \261\ See supra PP 111, 124.
---------------------------------------------------------------------------

    159. With regard to BPA's suggestion that Reliability Standard EOP-
011-2 already addresses certain mitigation measures listed in the NOPR 
as examples, we clarify that nothing in the final rule affects the 
responsibilities or obligations of registered entities under that 
Reliability Standard and note that there are important differences in 
the scope and intent of EOP-011-2 and the Reliability Standard we are 
directing be developed here. Specifically, while Reliability Standard 
EOP-011-2 includes provisions to determine reliability impacts of 
extreme cold conditions and extreme weather conditions,\262\ it does 
not require the transmission operator to mitigate the condition. In 
addition, Reliability Standard EOP-011-2 addresses the issues within 
the operating time frame. Corrective action plans, as proposed in the 
NOPR, would be developed in the planning horizon to address the issues 
in the long-term planning time frame. Simultaneously, such issues would 
be addressed by Reliability Standard EOP-011-2 in the operating time 
frame should the studied extreme weather condition occur. As such, 
there would not be any encroachment or conflict between the two 
standards.
---------------------------------------------------------------------------

    \262\ Reliability Standard EOP-011-2, Requirement 1.2.6.
---------------------------------------------------------------------------

    160. With respect to arguments from NARUC and Entergy that the 
Commission should require cost-benefit analysis for corrective action 
plans or otherwise provide additional guidance as to the cost impacts 
on customers, we decline to do so. FPA section 215 does not require the 
use of cost-benefit analysis and, given the flexibility allowed to 
responsible entities in crafting a corrective action plan, we are not 
persuaded such a requirement would be warranted in this instance. 
Regarding the cost impact on customers more generally, we believe that 
NERC should have an opportunity in the first instance to balance such 
impacts and present a new or modified Reliability Standard for 
Commission approval. As articulated in Order No. 672, the cost of 
compliance is but one factor in determining whether to approve a 
proposed Reliability Standard and we will consider the potential cost 
impacts in the context of the larger record.\263\
---------------------------------------------------------------------------

    \263\ See Order No. 672, 114 FERC ] 61,104 at P 330.
---------------------------------------------------------------------------

c. Generation and Transmission Capacity Increase and Resource Adequacy 
Issues
    161. As discussed above, corrective action plans are not required 
to use any specific mitigation measure and responsible entities are not 
required to build transmission or generation. Nevertheless, some 
entities may choose to include additional transmission or generation 
capacity as a mitigation measure in their corrective action plan, 
subject to the approval of relevant regulatory authorities.
    162. With respect to the use of transmission as a mitigation 
measure, as stated in the NOPR and echoed by commenters, interregional 
transfer capability can be a solution to some extreme weather-related 
reliability concerns. We recognize that a proposal by a planning entity 
to increase its interregional transfer capability to address the impact 
of extreme heat and cold conditions on its portion of the Bulk-Power 
System may be acceptable in a corrective action plan, and we expect 
that the benchmark planning cases developed, and wide-area studies 
conducted under this Standard could be beneficial for purposes of 
determining interregional transfer needs. However, we decline to set a 
minimum interregional transfer capability requirement in this 
proceeding and note the Commission's ongoing pending proceeding 
addressing such a requirement in Docket No. AD23-3.
    163. Regarding Idaho Power's concern given the amount of time 
necessary to build new transmission,\264\ we note that corrective 
action plans address deficiencies identified in a long-term 
transmission planning timeframe (i.e., six to ten years and beyond). 
The period associated with a transmission project will inform whether 
and when that project may be included in an extreme weather corrective 
action plan. For example, a transmission project that is not expected 
to be operational in the six-to-ten-year long-term horizon may not be 
relied upon in an extreme weather corrective action plan to mitigate 
identified system deficiencies within that time horizon. In that 
circumstance, the responsible entity will have to develop an extreme 
weather corrective action plan that includes other measures that can be 
implemented to ensure Reliable Operation of its portion of the Bulk-
Power System.
---------------------------------------------------------------------------

    \264\ Idaho Power Comments at 4, 6.
---------------------------------------------------------------------------

    164. With respect to concerns that generation capacity is not 
appropriately included in corrective because it should be addressed 
through resource adequacy processes, we reiterate our findings above in 
section IV.F that the purpose of the new or modified Standard is to 
address transmission system deliverability and not to supplant or 
duplicate resource adequacy processes. With respect to concerns from 
PIOs and ACP that generation may be ineffective as a mitigation 
measure, we note that responsible entities have the flexibility to 
determine the appropriate mitigation measure for their circumstances.
d. Notification to Applicable Regulatory Authorities or Governing 
Bodies Responsible for Retail Electric Service Issues
    165. We direct NERC to require in the new or modified Reliability 
Standard that responsible entities share their corrective action plans 
with, and solicit feedback from, applicable regulatory authorities or 
governing bodies responsible for retail electric service issues. We 
agree with commenters that relevant state entities should have the 
opportunity to provide input during the

[[Page 41283]]

development of corrective action plans. Just as this final rule seeks 
to ensure Reliable Operation of the Bulk-Power System during extreme 
heat and cold weather events, regulatory authorities and governing 
bodies responsible for retail electric service are taking actions to 
ensure reliability for local stakeholders. As such, we believe that 
requiring responsible entities to seek input from applicable regulatory 
authorities or governing bodies responsible for retail electric service 
issues when developing corrective action plans could help ensure that 
shared opportunities to increase system reliability are not missed. 
Further, as NESCOE points out, such consultation may allow these 
entities to better understand ``the cost implications of various 
approaches'' and, therefore, provide ``better insight into the 
considerations and tradeoffs inherent in the options available.'' \265\
---------------------------------------------------------------------------

    \265\ NESCOE Comments at 4.
---------------------------------------------------------------------------

    166. We also agree with NESCOE that sharing corrective action plans 
with applicable regulatory authorities or governing bodies responsible 
for retail electric service is necessary given the possibility that 
corrective action plans could include load shedding.\266\ As the 
Commission has stated in the past, we believe that the public should 
have notice and understanding of a responsible entity's plans to shed 
non-consequential load.\267\ Therefore, just as Reliability Standard 
TPL-001-5.1 requires planning coordinators and transmission planners to 
notify stakeholders, including applicable regulatory authorities or 
governing bodies responsible for retail electric service, of their 
intent to include non-consequential load loss in corrective action 
plans for certain single-contingency events,\268\ the new or modified 
Reliability Standard must also require responsible entities to 
similarly communicate their intent to use non-consequential load shed 
in their extreme weather corrective action plans.
---------------------------------------------------------------------------

    \266\ Id. at 5.
    \267\ Transmission Planning Reliability Standards, Order No. 
762, 77 FR 26686 (May 7, 2012), 139 FERC ] 61,060, at P 65 (2012).
    \268\ Reliability Standard TPL-001-5.1, at attach. 1.
---------------------------------------------------------------------------

    167. Further, because an important goal of transmission planning is 
to avoid load shed,\269\ any responsible entity that includes non-
consequential load loss in its corrective action plan should also 
identify and share with applicable regulatory authorities or governing 
bodies responsible for retail electric service alternative corrective 
actions that would, if approved and implemented, avoid the use of load 
shedding. Examples could include building additional generation and/or 
transmission capacity, energy efficiency programs, and demand load 
response programs.\270\
---------------------------------------------------------------------------

    \269\ Order No. 693, 118 FERC ] 61,218 at P 1,795.
    \270\ To be clear, responsible entities may also pursue such 
mitigating actions in the first instance, subject to the approval of 
relevant regulatory authorities. See supra P 161.
---------------------------------------------------------------------------

    168. While we direct NERC to require registered entities to 
communicate the results of their studies and share their extreme 
weather corrective action plans with applicable regulatory authorities 
or governing bodies responsible for retail electric service, NERC 
should not attempt to mandate that entities which are not under the 
Commission's jurisdiction participate in the development of corrective 
action plans.

I. Other Extreme Weather-Related Events and Issues

    169. While the NOPR focused on extreme heat and cold weather 
events, the NOPR recognized that long-term drought, particularly when 
occurring in conjunction with high temperatures, could also pose a 
serious risk to Bulk-Power System reliability over a wide geographical 
area. In the NOPR, the Commission raised a concern that drought may 
cause or contribute to conditions that affect reliable operation of the 
Bulk-Power System such as transmission outages, reduced plant 
efficiency, and reduced generation capacity. The Commission sought 
comment on whether drought should be included along with extreme heat 
and cold weather events within the scope of the Reliability 
Standard.\271\ Additionally, the Commission invited comment on whether 
other extreme events with significant impact on the reliability of the 
Bulk-Power System could also be considered and modeled in the 
future.\272\
---------------------------------------------------------------------------

    \271\ NOPR, 179 FERC ] 61,195 at P 92.
    \272\ Id. P 93.
---------------------------------------------------------------------------

1. Comments
    170. Indicated Trade Associations, EDF, and ACP support including 
the consideration of drought with extreme heat and cold weather events 
within the scope of the new or modified Reliability Standard.\273\ NERC 
agrees, suggesting that drought conditions be studied in drought-prone 
areas of the country.\274\ EDF notes that drought events can 
significantly impact the capacity and operation of water-cooled fossil 
and nuclear generators and other water-cooled assets, as well as 
hydroelectric generators. EDF also asserts that drought events are also 
highly correlated with high temperature and wildfires. Therefore, 
according to EDF, a failure to consider drought impacts could result in 
an overestimation of generation availability during an extreme heat 
weather event and understate the risks of that event.\275\
---------------------------------------------------------------------------

    \273\ Indicated Trade Associations Comments at 13; EDF Comments 
at 19; ACP Comments at 18-19.
    \274\ NERC Comments at 12.
    \275\ EDF Comments at 24.
---------------------------------------------------------------------------

    171. Similarly, Indicated Trade Associations note that they support 
the study of long-term drought impacts on relevant generation (e.g., 
hydro-electric, geothermal, and nuclear generation) in regions where 
drought has been, or may plausibly become, an issue. They add that 
droughts are sustained long-term conditions that may be fundamentally 
studied and addressed differently--for example, as a fuel supply 
sensitivity--than a short-term extreme heat or cold weather event.\276\ 
However, Indicated Trade Associations believe that the Commission 
should not attempt to address all types of extreme weather events at 
once in the Reliability Standard, but rather take a phased 
approach.\277\
---------------------------------------------------------------------------

    \276\ Indicated Trade Associations Comments at 13.
    \277\ Id.
---------------------------------------------------------------------------

    172. ACP states ``[b]ecause drought events are already widespread 
across all regions, and climate change will make them even more 
frequent and widespread, it would be prudent for the Commission and 
NERC to require all regions to include drought in their analysis of 
severe weather benchmark events under TPL-001.'' \278\
---------------------------------------------------------------------------

    \278\ ACP Comments at 10.
---------------------------------------------------------------------------

    173. Tri-State notes that drought is already sufficiently included 
in the resource forecasts developed by Resource Planners.\279\
---------------------------------------------------------------------------

    \279\ Tri-State Comments at 8.
---------------------------------------------------------------------------

    174. Certain commenters support the inclusion of extreme weather 
events beyond heat, cold and drought. For example, NERC identifies 
extreme weather conditions for inclusion in required studies, such as 
high winds, diminished winds, dust, smoke, fog, and increased cloud 
cover.\280\ According to NERC, such long-term, widespread weather and 
environmental conditions can impact resource availability and the 
transmission system. Other commenters suggest the inclusion of other 
extreme weather events such as wildfires, hurricanes, and tornadoes; 
\281\ rain and wind (including derechos), and ice storms; \282\ debris 
flow (landslide risk following wildfire scars and heavy

[[Page 41284]]

precipitation) and rain-on-snow events that may lead to dam 
overtopping.\283\
---------------------------------------------------------------------------

    \280\ NERC Comments at 12.
    \281\ EDF Comments at 25.
    \282\ AEP Comments at 5.
    \283\ SCE Comments at 6-7.
---------------------------------------------------------------------------

    175. EPRI points out that certain extreme weather events such as 
hurricanes or flooding can and do often occur independent of extreme 
heat and cold events. As such, EPRI states that the standard should 
identify climate and weather-related threats that occur concurrently or 
independently based on the planning area's local footprint and develop 
scenarios accordingly.\284\
---------------------------------------------------------------------------

    \284\ EPRI Comments at P 29.
---------------------------------------------------------------------------

    176. In contrast, MISO and LCRA comment that the Reliability 
Standard should be limited to extreme heat and cold events. MISO also 
comments that there is a fundamental difference between extreme heat 
and cold events and other extreme weather events: extreme temperature 
events would likely result in the load increasing and continuing to 
stay online, while other extreme weather events such as hurricanes or 
tornados create the possibility of load loss. MISO also points out that 
the operation horizon will continue to prepare for situations like 
hurricanes, tornados, or ice storms.\285\ Likewise, LCRA adds that 
drought and other extreme weather events beyond extreme temperature are 
already modeled by existing extreme event contingencies.\286\
---------------------------------------------------------------------------

    \285\ MISO Comments at 2.
    \286\ LCRA Comments at 4.
---------------------------------------------------------------------------

2. Commission Determination
    177. We decline to direct NERC to create or modify a Reliability 
Standard to specifically require the assessment of the impacts of 
drought conditions as part of extreme heat and cold transmission system 
planning. As explained above, the type of long-term meteorological 
study involved in extreme heat and cold event transmission planning 
necessarily includes examining the extreme weather impact on base 
climate conditions over the study period, conditions that would have to 
include anticipated drought conditions in relevant planning areas.\287\
---------------------------------------------------------------------------

    \287\ See supra P 114
---------------------------------------------------------------------------

    178. We agree with various commenters that drought conditions may 
impact reliability,\288\ and drought impacts on generation are already 
studied in the resource forecasts developed by resource planners and 
mitigated by operating procedures. Additionally, droughts that may 
occur concurrently with extreme heat and cold events will be included 
in the benchmark planning case, as drought conditions would be present 
in the meteorological data that feeds the benchmark planning case,\289\ 
and the possibility of more severe drought could be reflected as part 
of a sensitivity analysis.\290\
---------------------------------------------------------------------------

    \288\ See e.g., EDF Comments at 24.
    \289\ See supra note 155.
    \290\ See supra P 114 and note 155.
---------------------------------------------------------------------------

    179. Regarding other extreme weather events such as NERC's concern 
with high winds, diminished winds, dust, smoke, smog fog, extreme 
snowstorms, flooding and increased cloud cover, and extreme snowstorms, 
or other commenters recommendations to include hurricanes, tornados, 
heavy rain and wind, and ice storms; and adjacent events such as 
wildfires, debris flow, and flooding, we agree that these conditions 
may affect the Bulk-Power System. However, we are not persuaded that a 
directive to address these events in the new or modified Reliability 
Standard is warranted at this time.
    180. As MISO indicates, there are fundamental differences between 
extreme heat and cold events and other extreme weather events that cast 
doubt as to whether this Reliability Standard is the correct vehicle 
for addressing their impacts.\291\ For instance, extreme heat and cold 
events generally affect large geographic areas, while other extreme 
weather and adjacent events such as tornadoes, hurricanes, storms, 
floods, and wildfires tend to have more localized impacts. Moreover, as 
MISO points out, extreme heat and cold weather events are typically 
characterized by potential sustained load increases, while other 
extreme weather events typically result in load losses.
---------------------------------------------------------------------------

    \291\ MISO Comments at 2.
---------------------------------------------------------------------------

J. Reliability Standard Development and Implementation Timeline

    181. The Commission proposed to direct NERC to develop a new or 
modified Reliability Standard within one year of the effective date of 
a final rule in this proceeding, with compliance obligations beginning 
no later than 12 months from Commission approval of the proposed 
Reliability Standard.\292\
---------------------------------------------------------------------------

    \292\ NOPR, 179 FERC ] 61,195 at P 48.
---------------------------------------------------------------------------

1. Comments
    182. NERC raises no concerns with the proposed 12-month proposal to 
create a new or modified Reliability Standard; however, NERC requests 
that the Commission consider coordinating the timing of this final rule 
to allow NERC to benefit from the informational filings in Docket Nos. 
RM22-16-000 and AD21-13-000, as information obtained from these reports 
``may prove useful to the NERC standard development process.'' \293\
---------------------------------------------------------------------------

    \293\ NERC Comments at 14. In Docket Nos. RM22-16-000 and AD21-
13-000, the Commission proposes directing transmission providers to 
submit one-time informational reports describing their current or 
planned policies and processes for conducting extreme weather 
vulnerability assessments. One-Time Informational Reports on Extreme 
Weather Vulnerability Assessments; Climate Change, Extreme Weather, 
& Elec. Sys. Reliability, Notice of Proposed Rulemaking, 87 FR 39414 
(July 1, 2022), 179 FERC ] 61,196 (2022) (Informational Reports 
NOPR).
---------------------------------------------------------------------------

    183. PJM and MISO Transmission Owners state that one year will not 
be enough time to develop the proposed Reliability Standard.\294\ PJM 
states that such a short timeframe will hamper stakeholder input.\295\ 
PJM further comments that the NOPR's proposed timeline for standard 
development is not ``sequenced with any of the other activities 
associated with ensuring enhanced reliability planning'' and will thus 
``divert resources from the more comprehensive work that is needed in 
this area.'' \296\ MISO Transmission Owners agree that ``one year's 
time is not long enough'' to modify or create a new Reliability 
Standard, and the Commission should give NERC ``more time.'' \297\
---------------------------------------------------------------------------

    \294\ PJM Comments at 14; MISO Transmission Owners Comments at 
7.
    \295\ PJM Comments at 14.
    \296\ Id.
    \297\ MISO Transmission Owners Comments at 7.
---------------------------------------------------------------------------

    184. Regarding the effective date of any resulting Reliability 
Standard, NERC requests that the Commission clarify the proposed 
implementation schedule, i.e., ``whether entities must begin to comply 
with all new study requirements within one year of Commission approval 
(i.e., completed studies with Corrective Action Plans developed), or 
whether a phased-in approach beginning no later than one year is 
permitted for entities to coordinate on the development of new models, 
collect new data, and perform the necessary coordination to study wide 
area impacts before completing studies and developing any associated 
Corrective Action Plans.'' \298\
---------------------------------------------------------------------------

    \298\ NERC Comments at 14-15.
---------------------------------------------------------------------------

    185. PJM also states that one year is not enough time for 
responsible entities to implement the new or revised Reliability 
Standard, because after Commission approval ``Transmission Providers 
like PJM will have responsibility to translate it into workable 
planning process methodologies and related stakeholder-approved manual 
language.'' \299\
---------------------------------------------------------------------------

    \299\ PJM Comments at 14-15.
---------------------------------------------------------------------------

    186. PJM further calls for flexibility on setting start dates for 
the implementation period for different

[[Page 41285]]

entities given variances in regional planning cycles.\300\ APS echoes 
the call for flexibility as to the timeframe for developing a 
corrective action plan as the potential mitigation strategies may vary 
or include neighboring entities.\301\
---------------------------------------------------------------------------

    \300\ Id.
    \301\ APS Comments at 8.
---------------------------------------------------------------------------

    187. AEP proposes that the Commission provide responsible entities 
``at least two years to implement stability analysis'' after the 
proposed Reliability Standard takes effect, and that corrective action 
plans be developed ``within one year of the assessment of reliability 
deficiency.'' \302\
---------------------------------------------------------------------------

    \302\ AEP Comments at 13, 24.
---------------------------------------------------------------------------

2. Commission Determination
    188. We direct NERC to submit a new or modified Reliability 
Standard within 18 months of the date of publication of this final rule 
in the Federal Register. Further, we direct NERC to propose an 
implementation timeline for the new or modified Reliability Standard, 
with implementation beginning no later than 12 months after the 
effective date of a Commission order approving the proposed Reliability 
Standard.
    189. We agree with NERC that it is important to coordinate the 
timeline for the development of a Reliability Standard under this 
proceeding with that of the extreme weather one-time informational 
reports required under Docket Nos. RM22-16-000 and AD21-13-000.\303\ 
The Informational Reports Final Rule, which is being issued 
concurrently with this final rule, directs responsible entities to 
develop and file with the Commission within 120 days of that order's 
publication in the Federal Register a one-time informational report 
``describing their current or planned policies and processes for 
conducting extreme weather vulnerability assessments.'' \304\ The 
Informational Reports Final Rule further states that public comments 
will be due 60 days after the reports are filed.\305\ These 
informational reports may assist the standard drafting team's efforts 
in developing the proposed Reliability Standard, as they will be 
helpful for determining whether and to what extent transmission 
providers are already considering the impacts of extreme weather 
events. We believe that extending the NOPR's proposed standard 
development timeline is appropriate to ensure that NERC can benefit 
from the information obtained from these reports, as well as from 
public comments on the reports.
---------------------------------------------------------------------------

    \303\ Final Rule, Order No. 897, 183 FERC ] 61,192 (2023) 
(``Informational Reports Final Rule'').
    \304\ Id. PP 1, 3.
    \305\ Id. P 104.
---------------------------------------------------------------------------

    190. With regards to PJM and MISO Transmission Owners' comments, we 
recognize that the NOPR proposed an ambitious development timeline for 
the proposed Reliability Standard. As we indicated in the NOPR, the 
negative impact of extreme weather on the reliability of the Bulk-Power 
System demands an urgent response. Further, we note that NERC, the 
entity responsible for the development of the Reliability Standard, did 
not raise concerns about the NOPR's proposed development timeline. As 
such, we are not persuaded that there is a present need to extend the 
deadline to submit a proposed Reliability Standard further than what is 
necessary to ensure that NERC can benefit from the data obtained as a 
result of the one-time informational reports.
    191. Accordingly, we direct NERC to submit a proposed Reliability 
Standard within 18 months of the date of publication of this final rule 
in the Federal Register. We believe that extending the development 
timeline by six months should be sufficient to ensure that the standard 
drafting team will be able to take advantage of the one-time reports 
required by the Commission under Docket Nos. RM22-16-000 and AD21-13-
000.
    192. We decline to direct NERC to ensure that entities fully comply 
with all new requirements within one year of Commission approval (i.e., 
completed studies with corrective action plans developed). As AEP and 
PJM note in their comments, the new or modified Reliability Standard 
will require significant implementation efforts. Given the complexities 
and multiple stages of activity that would be involved in compliance 
with the directives in this final rule, we believe that a more flexible 
implementation approach is appropriate.
    193. We therefore direct NERC to establish an implementation 
timeline for the proposed Reliability Standard. In complying with this 
directive, NERC will have discretion to develop a phased-in 
implementation timeline for the different requirements of the proposed 
Reliability Standard (i.e., developing benchmark cases, conducting 
studies, developing corrective action plans). However, this phased-in 
implementation must begin within 12 months of the effective date of a 
Commission order approving the proposed Reliability Standard and must 
include a clear deadline for implementation of all requirements.

V. Information Collection Statement

    194. The information collection requirements contained in this 
final rule are subject to review by the Office of Management and Budget 
(OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\306\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\307\ Upon approval of 
a collection of information, OMB will assign an OMB control number and 
expiration date. Respondents subject to the filing requirements of this 
rule will not be penalized for failing to respond to this collection of 
information unless the collection of information displays a valid OMB 
control number.
---------------------------------------------------------------------------

    \306\ 44 U.S.C. 3507(d).
    \307\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    195. The directives to NERC to develop a new Reliability Standard 
or modify existing Reliability Standard TPL-001 (Transmission System 
Planning Performance Requirements), are covered by, and already 
included in, the existing OMB-approved information collection FERC-725 
(Certification of Electric Reliability Organization; Procedures for 
Electric Reliability Standards; OMB Control No. 1902-0225), under 
Reliability Standards Development.\308\ The reporting requirements in 
FERC-725 include the ERO's overall responsibility for developing 
Reliability Standards, such as the TPL-001 Reliability Standard, which 
is designed to ensure the Bulk-Power System will operate reliably over 
a broad spectrum of system conditions and following a wide range of 
probable contingencies.\309\ The Commission will submit to OMB a 
request for a non-substantive revision of FERC-725 in connection with 
this final rule.
---------------------------------------------------------------------------

    \308\ Reliability Standards Development as described in FERC-725 
covers standards development initiated by NERC, the Regional 
Entities, and industry, as well as standards the Commission may 
direct NERC to develop or modify. The information collection 
associated with this final rule ordinarily would be a non-material 
addition to FERC-725. However, an information collection request 
unrelated to this final rule is pending review under FERC-725 at the 
Office of Management and Budget. To submit this final rule timely to 
OMB, we will submit this to OMB as a temporary placeholder under 
FERC-725(1A), OMB Control No. 1902-0289.
    \309\ Reliability Standard TPL-001-4, Purpose.
---------------------------------------------------------------------------

VI. Environmental Analysis

    196. 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

[[Page 41286]]

environment.\310\ The Commission has categorically excluded certain 
actions from this requirement as not having a significant effect on the 
human environment. Included in the exclusion are rules that are 
clarifying, corrective, or procedural or that do not substantially 
change the effect of the regulations being amended.\311\ The actions 
directed here fall within this categorical exclusion in the 
Commission's regulations.
---------------------------------------------------------------------------

    \310\ Regul. Implementing the Nat'l Env't Pol'y Act, Order No. 
486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. ] 30,783 
(1987) (cross-referenced at 41 FERC ] 61,284).
    \311\ 18 CFR 380.4(a)(2)(ii) (2022).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    197. The Regulatory Flexibility Act of 1980 (RFA) \312\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \312\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    198. This final rule directs NERC, the Commission-certified ERO, to 
develop a new or modified Reliability Standard that requires long-term 
transmission system planning designed to prepare for extreme heat and 
cold weather events. Therefore, this final rule will not have a 
significant or substantial impact on entities other than NERC. 
Consequently, the Commission certifies that this final rule will not 
have a significant economic impact on a substantial number of small 
entities.
    199. Any Reliability Standards proposed by NERC in compliance with 
this rulemaking will be considered by the Commission in future 
proceedings. As part of any future proceedings, the Commission will 
make determinations pertaining to the Regulatory Flexibility Act based 
on the content of the Reliability Standards proposed by NERC.

VIII. Document Availability

    200. 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). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room due to the President's March 13, 2020 
proclamation declaring a National Emergency concerning the Novel 
Coronavirus Disease (COVID-19).
    201. From FERC's Home Page on the internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    202. User assistance is available for eLibrary and the FERC's 
website during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

IX. Effective Date and Congressional Notification

    203. This rule will become effective September 21, 2023. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB, that this rule 
is not a ``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.


By the Commission. Commissioner Danly is concurring in part.
    Issued: June 15, 2023.
Debbie-Anne A. Reese,
Deputy Secretary.

    The following appendix will not appear in the Code of Federal 
Regulations.

Appendix A: Commenter Names

----------------------------------------------------------------------------------------------------------------
                  Acronyms                                              Commenter name
----------------------------------------------------------------------------------------------------------------
ACP.........................................  American Clean Power Association.
ACEG........................................  Americans for a Clean Energy Grid.
AEP.........................................  American Electric Power Service Corporation.
Ampjack.....................................  Ampjack Industries Ltd.
APS.........................................  Arizona Public Service Company.
BPA.........................................  Bonneville Power Administration.
EDF.........................................  Environmental Defense Fund.
Indicated Trade Associations................  The Edison Electric Institute (EEI), the American Public Power
                                               Association (APPA), the Large Public Power Council (LPPC), the
                                               National Rural Electric Cooperative Association (NRECA), and the
                                               Transmission Access Policy Study Group (TAPS).
Entergy.....................................  Entergy Services, LLC.
EPRI........................................  Electric Power Research Institute.
EPSA........................................  Electric Power Supply Association.
ERCOT.......................................  Electric Reliability Council of Texas, Inc.
Eversource..................................  Eversource Energy Service Company.
Idaho Power.................................  Idaho Power Company.
ISO-NE......................................  ISO New England Inc.
LCRA........................................  LCRA Transmission Services Corporation.
Louisiana PSC...............................  Louisiana Public Service Commission.
MISO........................................  Midcontinent Independent System Operator, Inc.

[[Page 41287]]

 
MISO Transmission Owners....................  Ameren Services Company, as agent for Union Electric Company d/b/a
                                               Ameren Missouri, Ameren Illinois Company d/b/a Ameren Illinois
                                               and Ameren Transmission Company of Illinois; American
                                               Transmission Company LLC; Big Rivers Electric Corporation;
                                               Central Minnesota Municipal Power Agency; City Water, Light &
                                               Power (Springfield, IL); Cleco Power LLC; Cooperative Energy;
                                               Dairyland Power Cooperative; Duke Energy Business Services, LLC
                                               for Duke Energy Indiana, LLC; East Texas Electric Cooperative;
                                               Entergy Arkansas, LLC; Entergy Louisiana, LLC; Entergy
                                               Mississippi, LLC; Entergy New Orleans, LLC; Entergy Texas, Inc.;
                                               Great River Energy; GridLiance Heartland LLC; Hoosier Energy
                                               Rural Electric Cooperative, Inc.; Indiana Municipal Power Agency;
                                               Indianapolis Power & Light Company; International Transmission
                                               Company d/b/a ITCTransmission; ITC Midwest LLC; Lafayette
                                               Utilities System; Michigan Electric Transmission Company, LLC;
                                               MidAmerican Energy Company; Minnesota Power (and its subsidiary
                                               Superior Water, L&P); Missouri River Energy Services; Montana-
                                               Dakota Utilities Co.; Northern Indiana Public Service Company
                                               LLC; Northern States Power Company, a Minnesota corporation, and
                                               Northern States Power Company, a Wisconsin corporation,
                                               subsidiaries of Xcel Energy Inc.; Northwestern Wisconsin Electric
                                               Company; Otter Tail Power Company; Prairie Power, Inc.; Republic
                                               Transmission, LLC; Southern Illinois Power Cooperative; Southern
                                               Indiana Gas & Electric Company (d/b/a CenterPoint Energy Indiana
                                               South); Southern Minnesota Municipal Power Agency; Wabash Valley
                                               Power Association, Inc.; and Wolverine Power Supply Cooperative,
                                               Inc.
NARUC.......................................  National Association of Regulatory Utility Commissioners.
NERC........................................  North American Electric Reliability Corporation.
NESCOE......................................  New England States Committee on Electricity.
NMA.........................................  National Mining Association.
NYISO.......................................  New York Independent System Operator, Inc.
NYSRC.......................................  New York State Reliability Council.
Ohio FEA....................................  Federal Energy Advocate for the Public Utilities Commission of
                                               Ohio.
PG&E........................................  Pacific Gas and Electric Company.
PIOs........................................  Public Interest Organizations (Sustainable FERC Project, Natural
                                               Resources Defense Council, American Council on Renewable Energy,
                                               Sierra Club, Southern Environmental Law Center, Western Resource
                                               Advocates).
PJM.........................................  PJM Interconnection, L.L.C.
SCE.........................................  Southern California Edison Company.
Sunflower...................................  Sunflower Electric Power Corporation.
Tri-State...................................  Tri-State Generation and Transmission Association, Inc.
UCS.........................................  Union of Concerned Scientists.
WATT........................................  Working for Advanced Transmission Technologies.
WE ACT......................................  WE ACT for Environmental Justice.
----------------------------------------------------------------------------------------------------------------


[FR Doc. 2023-13286 Filed 6-22-23; 8:45 am]
BILLING CODE 6717-01-P

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