Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Rules and Regulations 16263 

normal business hours from FERC 

Online Support at 202–502–6652 (toll 

free at 1–866–208–3676) or e-mail at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

VII. Effective Date and Congressional 

Notification 

86. These regulations, including 

regional Reliability Standard BAL–502– 

RFC–02, are effective May 23, 2011. The 

Commission has determined, with the 

concurrence of the Administrator of the 

Office of Information and Regulatory 

Affairs of OMB, that this Rule is not a 

‘‘major rule’’ as defined in section 351 of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996. 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

Appendix A: Entities That Filed 

Comments, Motions To Intervene or 

Notices of Intervention 

Abbreviation Commenter 

Commenters 

Dominion .......................................................................................................... Dominion Resources Services, Inc. 

Carden ............................................................................................................. Kevin Carden, Johannes Pfeifenberger, and Nick Wintermantel. 

ICC ................................................................................................................... Illinois Commerce Commission. 

Midwest ISO .................................................................................................... Midwest Independent Transmission System Operator, Inc. 

MRO ................................................................................................................. Midwest Reliability Organization. 

NARUC ............................................................................................................ National Association of Regulatory Utility Commissioners. 

NERC ............................................................................................................... North American Electric Reliability Corporation+. 

OCC ................................................................................................................. Office of the Ohio Consumers’ Counsel. 

OMS ................................................................................................................. Organization of MISO States. 

Ohio PUC ......................................................................................................... Public Utilities Commission of Ohio. 

PJM Power Providers ...................................................................................... PJM Power Providers Group. 

RFC .................................................................................................................. ReliabilityFirst Corporation+. 

Borlick .............................................................................................................. Robert L. Borlick. 

Wilson .............................................................................................................. James F. Wilson. 

Intervenors 

Constellation Energy Commodities Group, Inc.

Dayton Power and Light Company.

Designated FirstEnergy Affiliates*.

Exelon Corp.

New York State Public Service Commission.

Pennsylvania Public Utility Commission.

PSEG Companies.

Public Utilities Commission of the State of California.

+ NERC and RFC filed both comments and reply comments. 

* The Designated FirstEnergy Affiliates include: Ohio Edison Co., Cleveland Electric Illuminating Co., Pennsylvania Power Co., Toledo Edison 

Co., American Transmission Systems, Inc., Jersey Central Power & Light Co., Metropolitan Edison Co., Pennsylvania Electric Co., and 

FirstEnergy Solutions Corp. 

[FR Doc. 2011–6763 Filed 3–22–11; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 40 

[Docket No. RM09–18–001; Order No. 743– 

A] 

Revision to Electric Reliability 

Organization Definition of Bulk Electric 

System 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Order on rehearing. 

SUMMARY: The Commission denies 

rehearing and otherwise reaffirms its 

determinations in Order No. 743. In 

addition, the Commission clarifies 

certain provisions of the Final Rule. 

Order No. 743 directed the Electric 

Reliability Organization (ERO) to revise 

the definition of the term ‘‘bulk electric 

system’’ through the ERO’s Reliability 

Standards Development Process to 

address the Commission’s policy and 

technical concerns and ensure that the 

definition encompasses all facilities 

necessary for operating an 

interconnected electric transmission 

network pursuant to section 215 of the 

Federal Power Act. 

DATES: Effective Date: This order on 

rehearing and clarification will become 

effective March 23, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Robert V. Snow (Technical Information), 

Office of Electric Reliability, Division 

of Reliability Standards, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426. Telephone: (202) 502–6716. 

Patrick A. Boughan (Technical 

Information), Office of Electric 

Reliability, Division of Engineering, 

Planning and Operations, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426. Telephone: (202) 502–8071. 

Jonathan E. First (Legal Information), 

Office of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426. Telephone: (202) 502–8529. 

Mindi Sauter (Legal Information), Office 

of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426. Telephone: (202) 502–6830. 

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon Wellinghoff, 

Chairman; Marc Spitzer, Philip D. Moeller, 

John R. Norris, and Cheryl A. LaFleur. 

I. Order on Rehearing 

Issued March 17, 2011. 

I. Introduction 

1. On November 18, 2010, the 

Commission issued a Final Rule (Order 


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16264 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Rules and Regulations 

1Revision to Electric Reliability Organization 

Definition of Bulk Electric System, Order No. 743, 

75 FR 72910 (Nov. 26, 2010), 133 FERC ¶ 61,150 

(2010). 

2 16 U.S.C. 824o (2006). 

3 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats. & Regs. 

¶ 31,242, at P 31 (2007), order on reh’g, Order No. 

693–A, 120 FERC ¶ 61,053 (2007). 

4Order No. 693, FERC Stats. & Regs. ¶ 31,242 at 

P 75. 

5 Id. n.47 (quoting NERC’s definition of ‘‘bulk 

electric system’’). 

6 Id. P 77. 

7Order No. 743, 133 FERC ¶ 61,150 at P 2. 

8 Id. P 16. 

9 Id. P 112–115. 

10 Id. 

11Blachly-Lane Electric Cooperative, Central 

Electric Cooperative, Inc., Central Lincoln People’s 

Utility District, Clearwater Power Company, 

Consumers Power Inc., Coos-Curry Electric 

Cooperative, Inc., Douglas Electric Cooperative, Fall 

River Rural Electric Cooperative, Inc., Lane Electric 

Cooperative, Inc., Lincoln Electric Cooperative, Inc., 

Lost River Electric Cooperative, Northern Lights, 

Inc., Mason Public Utility District No. 3, Northwest 

Public Power Association, Northwest Requirements 

Utilities, Okanogan County Electric Cooperative, 

Inc., Pacific Northwest Generating Cooperative, 

Public Utility District No. 1 of Clallam County, 

Public Utility District No. 1 of Snohomish County, 

Raft River Rural Electric Cooperative, Inc., Salem 

Electric Cooperative, Salmon River Electric 

Cooperative, Inc., Umatilla Electric Cooperative, 

Utah Associated Municipal Power Systems, 

Washington Rural Electric Cooperative Association, 

and West Oregon Electric Cooperative, Inc. 

12The California Public Utilities Commission 

(CPUC) filed comments on January 25, 2011. The 

Commission rejects the CPUC’s comments as an 

untimely request for rehearing under Rule 713(b) of 

the Commission’s Rules of Practice and Procedure. 

13Order No. 743, 133 FERC ¶ 61,150 at P 29. 

14 Id. P 30. 

No. 743) 1 directing the Electric 

Reliability Organization (ERO), through 

the ERO’s Reliability Standards 

Development Process, to revise its 

definition of the term ‘‘bulk electric 

system’’ to address the Commission’s 

technical and policy concerns, 

including inconsistency in application, 

lack of oversight and exclusion of 

facilities that are required for the 

Reliable Operation of the interconnected 

transmission network, and ensure that 

the definition encompasses all facilities 

necessary for operating an 

interconnected electric transmission 

network, pursuant to section 215 of the 

Federal Power Act (FPA).2 The 

Commission stated that it believes the 

best way to accomplish these goals is to 

eliminate the regional discretion in the 

current definition, maintain a brightline threshold that includes all facilities 

operated at or above 100 kV except 

defined radial facilities, and establish an 

exemption process and criteria for 

excluding facilities that are not 

necessary for operating the 

interconnected transmission network. 

However, the Final Rule allowed the 

ERO to develop an alternative proposal 

for addressing the Commission’s 

concerns with the present definition 

with the understanding that any such 

alternative must be equally efficient and 

effective 3 as the Commission’s 

suggested approach in addressing the 

identified technical and other concerns, 

and may not result in a reduction in 

reliability. 

2. In this order, we deny requests for 

rehearing of the Final Rule. Further, we 

grant in part, and deny in part, requests 

for clarification of the Final Rule, as 

discussed below. 

A. Summary of Order No. 743 

3. In Order No. 693, the Commission 

approved, with reservations, the current 

North American Electric Reliability 

Corporation (NERC) definition of the 

term ‘‘bulk electric system.’’ 4 That 

definition provides: 

As defined by the Regional Reliability 

Organization, the electrical generation 

resources, transmission lines, 

interconnections with neighboring systems, 

and associated equipment, generally operated 

at voltages of 100 kV or higher. Radial 

transmission facilities serving only load with 

one transmission source are generally not 

included in this definition.5

4. However, the Commission noted its 

concern that the current ‘‘bulk electric 

system’’ definition has the potential for 

gaps in coverage of facilities, and 

indicated that it would revisit the 

issue.6 In Order No. 743, the 

Commission returned to the issue. The 

Commission identified several concerns 

with the current definition that may 

compromise reliability. The 

Commission indicated that Order No. 

743’s aim is to eliminate inconsistencies 

across regions, eliminate the ambiguity 

created by the current discretion in 

NERC’s definition of bulk electric 

system, provide a backstop review to 

ensure that any variations do not 

compromise reliability, and ensure that 

facilities that could significantly affect 

reliability are subject to mandatory 

rules.7 Thus, Order No. 743 directed the 

ERO to revise the definition of ‘‘bulk 

electric system’’ through the NERC 

Standards Development Process to 

address the Commission’s concerns.8

Order No. 743 also directed the ERO to 

develop an exemption process that 

includes clear, objective, transparent 

and uniformly applicable criteria for 

exempting facilities that are not 

necessary for operating the 

interconnected transmission grid.9

5. The Commission stated that it 

believes the best way to address the 

identified concerns is to eliminate the 

Regional Entities’ discretion to define 

‘‘bulk electric system’’ without ERO or 

Commission review, maintain a brightline threshold that includes all facilities 

operated at or above 100 kV except 

defined radial facilities, and adopt an 

exemption process and criteria for 

excluding facilities that are not 

necessary to operate an interconnected 

electric transmission network. However, 

the Commission specified that NERC 

may propose a different solution that is 

equally efficient and effective as the 

Commission’s suggested approach in 

addressing the Commission’s technical 

and other concerns so as to ensure that 

all necessary facilities are included 

within the scope of the definition.10

B. Requests for Rehearing 

6. The following entities have filed 

timely requests for rehearing or for 

clarification of Order No. 743: American 

Public Power Association (APPA); 

Consumers Energy Company 

(Consumers); Edison Electric Institute 

(EEI); Exelon Corporation (Exelon); 

National Rural Electric Cooperative 

Association (NRECA); New York State 

Public Service Commission (NYPSC); 

Portland General Electric Company 

(Portland General); Public Power 

Council; City of Redding, California 

(Redding); Public Utility District No. 1 

of Snohomish County, Washington 

(Snohomish); Transmission Access 

Policy study Group (TAPS); Western 

Petitioners;11 Wisconsin Electric Power 

Company (Wisconsin Electric); and 

Transmission Agency of Northern 

California (TANC).12

II. Discussion 

A. Scope of Order No. 743 and 

Commission Directive 

7. Section 215(d)(5) of the FPA 

authorizes the Commission to direct the 

ERO to submit to the Commission a new 

or revised Reliability Standard that 

addresses a specific matter identified by 

the Commission.13 In Order No. 743, the 

Commission explained that this 

authority also includes the authority to 

direct the ERO to revise the definition 

of a term used in a Reliability Standard. 

8. Pursuant to this authority, the 

Commission directed the ERO to modify 

the definition of ‘‘bulk electric system’’ 

in order to address certain technical and 

policy concerns identified by the 

Commission.14 Specifically, the 

Commission observed that Regional 

Entities currently have broad discretion 

to define the parameters of the bulk 

electric system in their regions, and that 

the exercise of this discretion has led to 

inconsistencies in how facilities are 

classified within and among regions, to 


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15 Id. 

16 Id. P 31, 74. 

17NRECA at 11; citing Order No. 743, 133 FERC 

¶ 61,150 at P 16, 31 and 96. 

18Order No. 743, 133 FERC ¶ 61,150, at P 72. 

19 Id. P 77–78. 

20NRECA at 38, quoting Order No. 743, 133 FERC 

¶ 61,158 at P 141. 

21 16 U.S.C. 824o(d)(2). 

the effect that some facilities necessary 

to reliably operate the interconnected 

transmission network have been 

excluded from the obligation to comply 

with mandatory Reliability Standards. 

The Commission stated that one means 

to address its concerns is to eliminate 

the regional discretion in the ERO’s 

current definition, maintain the brightline threshold that includes all facilities 

operated at or above 100 kV except 

defined radial facilities, and establish an 

exemption process and criteria for 

excluding facilities the ERO determines 

are not necessary for operating the 

interconnected transmission network.15

However, the Final Rule made clear, the 

ERO may develop an alternative 

proposal for addressing the 

Commission’s concerns with the current 

definition and any such alternate 

proposal must be equally efficient and 

effective as the Commission’s suggested 

approach for addressing the identified 

concerns, may not result in a reduction 

in reliability, and must be supported 

with a technical analysis that 

demonstrates and explains, with a 

technical record sufficient for the 

Commission to make an informed 

decision, how it provides the same level 

of reliability as the Commission’s 

suggested solution.16

1. Identifying the Specific Matter To Be 

Addressed 

9. NRECA requests clarification, or in 

the alternative rehearing, that the 

Commission seeks to resolve a narrow 

concern that ambiguity in the bulk 

electric system definition and lack of 

backstop review at NERC has permitted 

inconsistencies across regions, and that 

the Northeast Power Coordinating 

Council (NPCC) in particular has not 

made all facilities that could 

significantly affect reliability subject to 

the Reliability Standards. NRECA 

expresses concern that the Final Rule 

states in several places that NERC must 

address the Commission’s ‘‘technical 

and other concerns’’ without specifying 

those concerns.17 NRECA asks that the 

Commission clarify the specific matter 

and present a clear list of technical and 

other concerns to assist NERC in 

developing appropriate and responsive 

solutions. 

10. NRECA further seeks clarification 

whether NERC, in exercising its 

technical expertise, may choose to 

address the specific concerns identified 

by the Commission through an 

alternative other than an amendment to 

the definition of bulk electric system. 

NRECA points out that, while Order No. 

743 sets out a ‘‘preferred solution,’’ it 

also allows the ERO to develop an 

alternative proposal for addressing the 

Commission’s concerns. NRECA states 

that it is not clear from the Final Rule 

if the ERO has discretion whether and 

how it amends the definition of bulk 

electric system, or only how to amend 

the definition. NRECA seeks 

clarification, or in the alternative 

rehearing, that the ERO can comply 

with the Final Rule by filing an 

alternative approach that does not 

amend the definition, provided that the 

alternative addresses the Commission’s 

concerns with inconsistency, lack of 

oversight and exclusion of facilities that 

are required for the reliable operation of 

the interconnected transmission 

network. According to NRECA, denying 

the ERO the ability to develop an 

alternative to amending the bulk electric 

system definition is tantamount to the 

Commission prescribing the text of a 

Reliability Standard and denies the ERO 

a full range of options in addressing the 

specific matter identified by the 

Commission. 

Commission Determination 

11. We clarify that the specific issue 

the Commission directed the ERO to 

rectify is the discretion the Regional 

Entities have under the current bulk 

electric system definition to define the 

parameters of the bulk electric system in 

their regions without any oversight from 

the Commission or NERC.18 As we 

explained in the Final Rule, NPCC’s use 

of this discretion has resulted in an 

impact-based approach to defining the 

bulk electric system that allows 

significant subjectivity in application 

and thus creates anomalous results.19

While NPCC’s use of its discretion 

brought the problems with the current 

definition to our immediate attention, 

the Commission’s concern is potentially 

broader because any region could use its 

discretion to define the bulk electric 

system in a way that leads to similar 

inconsistent and anomalous results. 

12. We decline to provide the 

clarification NRECA requests regarding 

NERC’s ability to address the specific 

matter through means other than 

revising the definition, and also deny 

rehearing on the issue. As noted above, 

our concern with the current bulk 

electric system definition is rooted in 

the unfettered discretion granted therein 

to Regional Entities to define the term. 

Contrary to NRECA’s claim, it is well 

within our section 215(d)(5) authority to 

direct NERC to address the specific 

issue we have identified—the overly 

broad definition. We have not directed 

the ERO to revise the definition to 

incorporate a specified result; rather, we 

require that the change address our 

concerns. 

2. Standard of Review 

13. NRECA requests clarification that 

the Commission is not imposing a 

higher standard of review in the Final 

Rule than permitted by section 215 of 

the FPA. NRECA explains that the Final 

Rule allows the ERO to develop an 

alternative to the Commission’s 

suggested approach provided that it is 

‘‘as effective as, or more effective than, 

the Commission’s proposed approach’’ 

and must not ‘‘result in a reduction in 

reliability.’’ 20 NRECA contends that this 

standard of review is not in the statute 

and, rather, that the Commission should 

clarify that it will judge by the statutory 

provision that the proposal provides for 

an ‘‘adequate level of reliability.’’ 

NRECA contends that this phrase 

connotes a range of possible solutions. 

NRECA claims that the Commission’s 

approach, which allows the 

Commission’s suggested solution to 

serve as a benchmark for all subsequent 

proposals, suggests a different, higher 

standard than ‘‘adequate level of 

reliability.’’ 

Commission Determination 

14. FPA section 215(d)(2) establishes 

the standard of review the Commission 

must apply to ERO submissions with 

respect to the content of Reliability 

Standards: 

The Commission may approve, by rule or 

order, a proposed reliability standard or 

modification to a reliability standard if it 

determines that the standard is just, 

reasonable, not unduly discriminatory or 

preferential, and in the public interest. The 

Commission shall give due weight to the 

technical expertise of the Electric Reliability 

Organization with respect to the content of a 

proposed standard or modification to a 

reliability standard and to the technical 

expertise of a regional entity organized on an 

Interconnection-wide basis with respect to a 

reliability standard to be applicable within 

that Interconnection, but shall not defer with 

respect to the effect of a standard on 

competition. A proposed standard or 

modification shall take effect upon approval 

by the Commission.21

As the statute specifies, the standard 

of review the Commission must utilize 

is whether the proposed Reliability 

Standard or modification to a Reliability 

Standard is ‘‘just, reasonable, not unduly 


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22 16 U.S.C. 824o(c). 

23Rules Concerning Certification of the Electric 

Reliability Organization; and Procedures for the 

Establishment, Approval, and Enforcement of 

Electric Reliability Standards, Order No. 672, FERC 

Stats. & Regs. ¶ 31,204, at P 320–338, order on 

reh’g, Order No. 672–A, FERC Stats. & Regs. ¶ 

31,212 (2006). 

24See Transmission Relay Loadability Reliability 

Standard, Order No. 733–A, 134 FERC ¶ 61,127, at 

P 24–27 (2011) (stating that the Commission’s 

detailed guidance on a possible approach to address 

its underlying concern, including a statement that 

any alternative approach must be ‘‘equally efficient 

and effective’’ does not establish a ‘‘rebuttable 

presumption’’ in favor of the Commission’s 

suggested approach). 

25NYPSC at 12; see also Public Power Council at 

8–9. 

26NYPSC at 13. 

27NYPSC at 15. 

28NYPSC at 17, quoting Order No. 743, 133 FERC 

¶ 61,150 at P 37. 

29Order No. 743, 133 FERC ¶ 61,150 at P 16. 

30 Id. 

discriminatory or preferential, and in 

the public interest.’’ 

15. We disagree with NRECA’s 

assertion that section 215(c)(1) 

establishes a standard of review the 

Commission must apply to ERO 

submissions. Section 215(c) sets forth 

the criteria the Commission must 

consider in certifying an ERO, and 

section 215(c)(1) specifies that one of 

the considerations for certification is 

whether the ERO applicant ‘‘has the 

ability to develop and enforce * * * 

reliability standards that provide for an 

adequate level of reliability of the bulkpower system.’’ 22

16. Certainly, whether a proposed 

Reliability Standard provides for an 

adequate level of reliability is included 

in the factors used in determining 

whether the proposal is just and 

reasonable, but it is not the standard of 

review.23 The Commission’s statement 

that any alternative proposal must be ‘‘as 

effective as, or more effective than, the 

Commission’s proposed approach’’ and 

must not ‘‘result in a reduction in 

reliability’’ provides guidance regarding 

the Commission’s view of what is 

necessary to produce not only an 

adequate level of reliability but also a 

result that accords with the section 

215(d)(2) review criterion.24

B. Jurisdictional Issues 

17. Entities claim that the 

Commission over-stepped its 

jurisdiction in three ways. First, they 

contend that the Commission exceeded 

its authority by requiring a bright-line 

100 kV threshold for determining which 

facilities are included in the bulk 

electric system. Second, entities argue 

that Order No. 743 fails to recognize the 

statutory exclusion of facilities used in 

local distribution of electric energy. 

Third, entities claim that the 

Commission fails to give due weight to 

the ERO’s technical expertise. Several 

requests for rehearing, such as the 

NYPSC, Public Power Council and 

Snohomish, merge these arguments 

together in more global claims that the 

Final Rule is in error and should be 

withdrawn. 

1. 100 kV Bright-Line Threshold 

18. The NYPSC and Public Power 

Council argue that the Commission’s 

decision to ‘‘direct the ERO to define the 

bulk electric system as all facilities 

operated at 100 kV and above’’ is 

arbitrary and capricious.25 They state 

that section 215(a) of the FPA explicitly 

excludes facilities used in local 

distribution of electric energy. Thus, the 

NYPSC reasons, ‘‘by defining the bulkpower system as all facilities operating 

at above 100 kV, the Commission 

exceeded its jurisdiction by 

encompassing facilities that are clearly 

part of the non-bulk power system 

***’’ 26 The NYPSC contends that the 

Commission incorrectly assumes that a 

facility is considered part of the bulk 

electric system simply because it is 

operated at or above 100 kV. The 

NYPSC recites evidence, presented in 

its Notice of Proposed Rulemaking 

(NOPR) comments, that facilities in New 

York City do not serve a bulk system 

function due to the high concentration 

of load served by those lines. While 

noting that the Final Rule dismissed this 

evidence, the NYPSC contends that ‘‘it 

is invalid to conclude that all facilities 

rated at 100 kV and above support the 

bulk-power system based on a belief 

that ‘most’ of those facilities are not 

involved in local distribution.’’ 27

Similarly, Public Power Council and 

Snohomish contend that the Final Rule, 

by mandating a 100 kV bright-line test, 

will improperly classify many 115 kV 

distribution facilities in the Western 

Interconnection as bulk electric system 

facilities. 

19. The NYPSC notes that the Final 

Rule explained that entities would have 

an opportunity to seek an exemption if 

they believe certain facilities should not 

be included in the bulk electric system. 

Based on this, the NYPSC claims that 

the Final Rule implicitly acknowledged 

that various non-jurisdictional facilities 

are included within the Commission’s 

‘‘redefinition’’ of bulk electric system. It 

also claims that this approach is 

inappropriate, i.e., the Commission 

cannot assume it has jurisdiction over 

facilities operated above 100 kV unless 

and until an entity demonstrates 

otherwise. The NYPSC claims that the 

Commission also conceded that the 100 

kV threshold is overly broad because 

‘‘several 115 and 138 kV facilities that 

some entities term as ‘distribution’ may 

be needed to reliably operate the 

interconnected transmission system.’’ 28

According to the NYPSC, by stating that 

these facilities ‘‘may’’ be needed for 

reliability of the interconnected system, 

the Commission acknowledges that they 

may not be needed. Similarly, Portland 

General argues that the Commission 

cannot claim jurisdiction over any local 

distribution facilities and expresses 

concern that the above language from 

the Final Rule wrongly suggests that 

some local distribution facilities are 

jurisdictional under section 215. 

Commission Determination 

20. At the outset, the Commission 

emphasizes that Order No. 743 did not 

mandate or direct NERC to adopt a 100 

kV bright-line threshold. Order No. 743 

directed NERC to undertake the process 

of revising the bulk electric system 

definition to address the Commission’s 

concerns about the broad discretion the 

current definition grants to Regional 

Entities to modify the definition without 

Commission or ERO oversight, and 

provided a suggested solution. 

Specifically, the Order directed the ERO 

to revise the definition of bulk electric 

system ‘‘through the NERC Standards 

Development Process to address the 

Commission’s concerns.’’ 29 The 

Commission stated its belief that one 

effective way to address those concerns 

would be to eliminate the regional 

discretion contained in the current 

definition, which allows Regional 

Entities to define the term without 

Commission or ERO oversight; maintain 

the threshold contained in the current 

definition, which includes all facilities 

operated at or above 100 kV except 

defined radial facilities; and adopt an 

exemption process and criteria for 

excluding facilities that the ERO 

determines are not necessary to operate 

an interconnected electric transmission 

network. The Final Rule, however, did 

not mandate this approach as it further 

provided that NERC ‘‘may propose a 

different solution that is as effective as, 

or superior to, the Commission’s 

proposed approach.’’ 30

21. Order No. 743’s approach is 

entirely within the Commission’s 

statutory authority and properly allows 

the ERO to develop the revised bulk 

electric system definition using its 

technical expertise. We, therefore, reject 

the requests for rehearing arising from 

the inaccurate premise that the 

Commission mandated a 100 kV brightline threshold. Beyond the concerns 


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31Western Petitioners at 10; see also Public 

Power Council at 16. 

32Order No. 743, 133 FERC ¶ 61,150 at P 37. 

33Snohomish at 18–19, citing, e.g., City of Oconto 

Falls v. FERC, 204 F.3d 1154 (DC Cir. 2000); Public 

Power Council at 19–20. 

related to the Commission’s authority, 

the substance of the arguments raised by 

the NYPSC, Public Power Council, 

Snohomish and Western Petitioners 

relate to the term ‘‘used in local 

distribution’’ and differentiating 

between local distribution and 

transmission, which we address below. 

22. Further, we disagree with the 

NYPSC’s claim that the Final Rule 

implicitly acknowledges that various 

non-jurisdictional facilities are included 

within the Commission’s ‘‘redefinition’’ 

of bulk electric system. As we clarify 

herein, regardless of the 100 kV 

threshold, facilities that are determined 

to be local distribution will be excluded 

from the bulk electric system. Further, 

NERC has yet to develop a modified 

definition, so the NYPSC’s claim is 

unfounded at this time. 

2. Facilities Used in Local Distribution 

23. Western Petitioners, Portland 

General, Snohomish, and Redding point 

out that section 215(a) of the FPA 

expressly exempts facilities ‘‘used in the 

local distribution of electric energy’’ 

and, in section 215(i), provides that the 

ERO ‘‘shall have authority to develop 

and enforce compliance with reliability 

standards for only the bulk-power 

system.’’ On this basis, Western 

Petitioners and Redding argue that the 

Final Rule errs by not clearly stating 

that the revised definition of bulk 

electric system must exclude all 

facilities that are used in local 

distribution. Western Petitioners suggest 

that the Final Rule, by emphasizing that 

the revised definition must include ‘‘all 

facilities necessary for operating an 

interconnected electric transmission 

network,’’ including lower voltage 

facilities operated in parallel and in 

support of higher voltage facilities, 

‘‘could sweep in numerous local 

distribution facilities.’’ 31

24. Similarly, Portland General claims 

that the Commission erred by failing to 

clearly and consistently acknowledge 

the statutory exclusion of facilities used 

in local distribution of energy. Portland 

General argues that the failure to clearly 

delineate this exclusion is inconsistent 

with Detroit Edison Co. v. FERC, 334 

F.3d 48 (DC Cir. 2003), where the court 

rejected the Commission’s interpretation 

of the phrase ‘‘used in local distribution’’ 

in section 201 of the FPA as rewriting 

the statute to exclude from the 

Commission’s jurisdiction only facilities 

used exclusively in local distribution. 

Commission Determination 

25. We disagree that the Final Rule is 

at odds with commenters’ view. In 

Order No. 743, the Commission 

acknowledged that ‘‘Congress has 

specifically exempted ‘facilities used in 

the local distribution of electric energy’ ’’ 

from the Bulk-Power System 

definition.32 Since such facilities are 

exempted from the Bulk-Power System, 

they also are excluded from the bulk 

electric system. Therefore, the 

Commission agrees with Western 

Petitioners and others that facilities 

used in the local distribution of energy 

should be excluded from the revised 

bulk electric system definition. 

3. Due Weight to Expertise of the ERO 

26. As mentioned above, the NYPSC, 

Snohomish and Public Power Council 

characterize the Final Rule as 

mandating the ERO to develop a revised 

definition of bulk electric system that 

incorporates a nationally uniform, 100 

kV bright-line test. Based on this 

understanding, they argue that the Final 

Rule’s directive exceeds the 

Commission’s authority under section 

215(d)(5) of the FPA because it limits 

NERC’s and the Western Electric 

Coordinating Council’s (WECC) 

‘‘substantial discretion’’ to develop 

Reliability Standards based upon their 

technical expertise. Public Power 

Council and Snohomish claim that the 

directive also denies the due weight to 

which the ERO or an Interconnectionwide Regional Entity is entitled 

pursuant to FPA sections 215(d)(2) and 

(3). 

27. Public Power Council and 

Snohomish argue that the elimination of 

regional discretion directed in the Final 

Rule based on a desire for uniformity is 

unsupported. They also claim that this 

is inconsistent with the intent of 

Congress to allow for regional variation 

as evidenced by the provisions of 

section 215 that require the ERO to 

rebuttably presume that a WECCdeveloped Reliability Standard satisfies 

the statutory criteria for approval and 

that the Commission give due weight to 

WECC’s expertise. Public Power Council 

and Snohomish also cite to the 

legislative history to support their claim 

that Congress recognized the need for 

regional differences and rejected a 

uniform, centralized approach. Further, 

they argue that ‘‘due weight’’ equates to 

‘‘substantial deference’’ based on court 

precedent and statutory analysis.33

28. The NYPSC, Snohomish and 

Public Power Council claim that, while 

the Commission has authority under 

section 215(d)(5) of the FPA to require 

the ERO to address a specific matter, the 

Commission went beyond its authority 

pursuant to that provision by 

prescribing the particular content of a 

Reliability Standard. They contend that 

the ERO, in the first instance, should 

decide how the Commission’s specific 

concerns are best addressed. The 

NYPSC acknowledges that the 

Commission indicated that the ERO has 

discretion to develop an alternative that 

is as effective as, or superior to, the 

Commission’s bright-line approach, but 

claims that the ‘‘narrowly tailored 

guidance’’ limits the ERO’s discretion 

and, thus, the Commission acted beyond 

its statutory authority. For all these 

reasons, according to the NYPSC and 

Public Power Council, the Commission 

abused its discretion in imposing a 100 

kV bright-line rule, thereby denying 

NERC and WECC the opportunity to 

develop a different threshold or 

methodology based on their expertise. 

Commission Determination 

29. As indicated previously, Order 

No. 743 did not mandate a specific 

result. Rather, the Commission 

determined that NERC should use its 

technical expertise to develop a 

definition that addresses the 

Commission’s concerns with regional 

discretion in the current definition. The 

present definition contains the 100 kV 

reference, and the Commission did not 

change it in Order No. 743, other than 

to suggest a solution that would remove 

‘‘generally’’ from the current definition’s 

reference to a 100 kV threshold and 

eliminate unchecked regional 

discretion. The Commission’s 

suggestion of one way to address the 

enumerated concerns does not preclude 

NERC from proposing an alternate 

solution. 

30. Public Power Council and 

Snohomish argue that there is no 

evidence supporting the Commission’s 

decision to require NERC to develop a 

uniform national bulk electric system 

definition. However, uniformity, absent 

a showing that the alternative is more 

stringent or necessitated by a physical 

difference, has been a hallmark of the 

mandatory Reliability Standards 

construct since its inception. In 

establishing the framework for 

developing Reliability Standards, we 

adopted the principle that proposed 

Reliability Standards should ‘‘be 

designed to apply throughout the 

interconnected North American BulkPower System, to the maximum extent 

this is achievable with a single 


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34Order No. 672, FERC Stats. & Regs. ¶ 31,204 at 

P 331. 

35Order No. 743, 133 FERC ¶ 61,150 at P 141. 

36 Id. 

37NYPSC at 19. 

38 Id. at 14. 

39 Id. at 15, quoting Order No. 743, 133 FERC 

¶ 61,150 at P 39 (emphasis added). 

40See, e.g., Order No. 743, 133 FERC ¶ 61,150 at 

P 72–73, 85. 

41Order No. 743, 133 FERC ¶ 61,150, P 80. 

42 Id. P 84. 

Reliability Standard.’’ 34 The same 

principle holds true for definitions 

contained within the Reliability 

Standards. 

31. Moreover, we are not prohibiting 

the Interconnection-wide regional 

entities from arriving at their own 

regional differences. However, as we 

stated in Order No. 743, ‘‘[c]ommenters 

have not provided compelling evidence 

that the proposed definition should not 

apply to the United States portion of the 

Western Interconnection as a threshold 

matter.’’ 35 Conversely, the Commission 

does have a compelling concern that the 

subjectivity and lack of ERO and 

Commission oversight embodied in the 

current definition could result in the 

problems we identified in the NPCC 

region occurring in other regions, 

further supporting adoption of a 

uniform national definition. As Order 

No. 743 indicated, establishing such a 

uniform national definition does not 

preclude a region from proposing a 

regional difference that is more stringent 

than the continent-wide definition, 

including a regional difference that 

addresses matters that the continentwide definition does not, or a regional 

definition that is necessitated by a 

physical difference in the Bulk-Power 

System.36

32. The Commission finds that the 

arguments by Public Power Council and 

Snohomish that the Commission has 

failed to give due weight to NERC or an 

Interconnection-wide Regional Entity as 

required under sections 215(d)(2) and 

(3) are premature. Once NERC has 

developed a proposed bulk electric 

system definition, the Commission will 

evaluate the proposal and all supporting 

evidence and documentation under 

section 215(d)(2). Similarly, should one 

of the two Regional Entities organized 

on an Interconnection-wide basis 

develop a proposal for a regional bulk 

electric system definition, the ERO must 

evaluate the proposal according to 

requirements of section 215(d)(3). 

C. Challenges to Order No. 743’s 

Technical Rationale 

1. 100 kV Bright-Line Threshold 

33. The NYPSC, Public Power 

Council, and Snohomish request 

rehearing, claiming that the Commission 

erred in directing NERC to revise the 

bulk electric system definition to 

include facilities operated at 100 kV and 

above where the record lacks a technical 

justification for a bright-line test. The 

NYPSC contends that, because the 

bright-line 100 kV threshold adopted by 

the Commission was not based on 

whether those facilities are necessary for 

operating the interconnected network, 

the Commission’s decision lacked a 

technical justification. The NYPSC 

claims that the Commission’s approach 

results in a ‘‘superficial consistency’’ 

and that Order No. 743 contains no 

factual analysis as to why 100 kV is the 

appropriate threshold. It contends that 

the examples identified by the 

Commission ‘‘that are purported to 

support the 100 kV bright-line were all 

115 kV or higher.’’ 37

34. Further, the NYPSC argues that 

the Commission incorrectly assumes 

that because a facility operates at 100 kV 

or above in one part of the country that 

all facilities operated at similar voltages 

across the country should be treated as 

part of the Bulk-Power System. It objects 

to the Commission’s reliance on events 

on facilities in other regions as rationale 

for determining that similar facilities in 

the NPCC region are part of the bulk 

electric system. According to the 

NYPSC, ‘‘that logic does not hold true, 

since there are various facilities 

operated at the same voltages across the 

country that perform different functions 

and interact to different degrees with 

the bulk system, depending on the 

regional differences.’’ 38 The NYPSC 

reiterates that it presented evidence in 

its earlier comments that certain 138 kV 

facilities in New York City do not serve 

a bulk electric system function due to 

the high concentration of load served by 

those lines. The NYPSC contends that 

the Final Rule wrongfully dismissed 

this evidence by indicating that it does 

‘‘not believe that most of these facilities 

are local distribution.’’ 39 The NYPSC 

argues that it is invalid to conclude that 

all facilities rated 100 kV or above 

support the bulk electric system based 

on a belief that ‘‘most’’ of these facilities 

are not involved in local distribution. 

Commission Determination 

35. As noted previously, contrary to 

the commenters’ assertions, the 

Commission did not direct or mandate 

that the bulk electric system definition 

include a bright-line 100 kV threshold. 

Instead, the Commission directed NERC 

to address the inconsistency, lack of 

oversight and exclusion of facilities that 

are required for the reliable operation of 

the interconnected transmission 

network, outlined by the Commission in 

Order No. 743 using the technical 

expertise available to NERC. The 

Commission suggested that one means 

to address its concerns would be to, 

among other things, maintain the 100 

kV threshold and radial exclusion 

contained in the current definition, but 

left it to NERC’s discretion and 

technical expertise to develop a revised 

definition. The Commission also 

supported its suggested solution.40

36. Nonetheless, we will reiterate and 

expand on that discussion here. The 

Commission’s suggested solution of a 

100 kV threshold paired with an 

exemption process, in essence, merely 

clarifies the current NERC definition, 

which classifies facilities operating at 

100 kV or above as part of the bulk 

electric system. 

37. As discussed in Order No. 743, the 

NPCC material impact assessment has 

resulted in inconsistent classification of 

some facilities along and within 

Regional Entity borders.41 Further, 

Order No. 743 pointed out the failure of 

the NPCC test to classify facilities 

associated with nuclear generation as 

part of the bulk electric system and thus 

subject to NERC Reliability Standards.42

The suggested 100 kV threshold would 

maintain the current assumption, under 

NERC’s current definition, that nonradial 100 kV transmission facilities (not 

local distribution) are part of the bulk 

electric system unless exempted 

through the process NERC develops. 

38. The Commission disagrees with 

the characterization that its suggested 

approach will only achieve superficial 

consistency—our suggested approach 

will require that facilities needed for the 

reliable operation of interconnected 

electrical network comply with the 

NERC Reliability Standards. Regardless 

of whether NERC adopts our suggested 

solution in whole or in part, or develops 

another approach, the bulk electric 

system definition and related processes 

that NERC ultimately produces, and the 

Commission approves, will significantly 

reduce or eliminate reliability problems 

arising from incomplete Reliability 

Standard coverage resulting from 

ineffective material impact assessments 

and inconsistent classification of 

facilities. The Final Rule eliminates 

these problems by directing the ERO to 

revise the definition of bulk electric 

system in a way that addresses the 

concerns outlined in the Final Rule. 

39. The NYPSC argues that the 

Commission did not provide any 

evidence supporting a 100 kV threshold 

since all three examples in Order No. 

743 involved facilities 115 kV or higher. 


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43See, e.g., American National Standards 

Institute, Incorporated (ANSI) Standard C84.1, 

Electrical Power Systems and Equipment-Voltage 

Ratings (60Hz). 

44See, e.g., Order No. 743, 133 FERC ¶ 61,150 at 

P 73, 139–140. 

45The Commission reviewed transmission maps 

available in annual Form 715 submissions (Form 

715 submissions). (Form 715 is the ‘‘Annual 

Transmission Planning and Evaluation Report,’’ in 

which operators of integrated transmission at or 

above 100 kV submit to the Commission base case 

power flow and transmission system maps and 

diagrams. Submissions are considered Critical 

Energy Infrastructure Information (CEII) and are 

subject to the Commission’s CEII rules.) 

46 Id. 

47Order No. 743, 133 FERC ¶ 61,150, at P 87. 

48NYPSC at 28. 

49NYPSC at 28, quoting 16 U.S.C. 824o(a)(1)(A). 

50See NRECA at 14–15, quoting NERC Rules of 

Procedure, section 501; Registry Criteria at 1. 

51Order No. 743, 133 FERC ¶ 61,150 at P 76–78. 

52NYPSC at 28. 

However, as indicated in Order No. 743, 

the current NERC bulk electric system 

definition contains a general 100 kV 

threshold. The Commission’s suggested 

solution simply would eliminate 

regional discretion that is not subject to 

review by the ERO or the Commission 

in the application of the current 

threshold. Additionally, the NYPSC’s 

argument presents a distinction without 

a difference, since nominal voltage 

levels are established in industry for use 

in power systems but no voltage 

classification exists at 100 kV.43

Therefore, a 100 kV threshold will 

effectively capture the same facilities as 

a 115 kV threshold. 

40. The Commission also disagrees 

with the NYPSC’s characterization of 

the suggested 100 kV threshold as 

treating all facilities operated at similar 

voltages across the country as part of the 

bulk electric system. As we have 

explained, the Commission views the 

suggested threshold as a first step or 

proxy in determining which facilities 

are included and which are excluded or 

exempted from the bulk electric system. 

The Commission provided considerable 

support in the Final Rule for its belief 

that facilities operated at or above 100 

kV are sufficiently similar throughout 

the continental United States to be able 

to use a 100 kV threshold as an initial 

line of demarcation, which the ERO 

would further refine using exclusions 

(such as for radial facilities serving only 

load with one transmission source) and 

exemptions.44 Similarly, we are not 

persuaded by the NYPSC’s contention 

that Order No. 743’s reliance on events 

in several regions as support for taking 

action on a nationwide basis was 

misplaced. The facilities in the several 

regions are sufficiently similar to allow 

the Commission to draw technical 

justification for its actions from these 

events. The same configurations cited in 

the examples and the areas described in 

Order No. 743 can be found throughout 

the country.45 Facilities operated at 

100–200 kV, in parallel with extra high 

voltage facilities, connect areas with 

generation to distant hubs and load 

centers.46 As discussed in Order No. 

743, failure of 100–200 kV facilities has 

caused cascading outages that would 

have been minimized or prevented if 

entities were in compliance with the 

NERC Reliability Standards.47 For the 

reasons discussed above, the 

Commission denies the requests for 

rehearing. 

2. Impact-Based Methodology 

41. The NYPSC requests rehearing on 

the Commission’s rejection of an 

impact-based test for identifying bulk 

electric system elements and asks that 

the Commission reconsider an impactbased test as a viable approach. The 

NYPSC asserts that ‘‘NERC and the 

NPCC have both determined that the 

NPCC’s impact-based definition, 

coupled with its regionally tailored 

reliability criteria, effectively and 

efficiently ensures reliability.’’ 48 It 

contends that, because an impact-based 

test identifies ‘‘facilities and control 

system necessary for operating an 

interconnected electric energy 

transmission network,’’ that test is 

consistent with section 215 of the FPA 

and obviates the Commission’s concern 

that a discrepancy in definitions could 

result in reliability gaps.49 The NYPSC 

argues that the Commission dismissed 

the impact approach based on a single 

event and the stated need for a 

consistent and comprehensive test. In 

response, the NYPSC argues that Order 

No. 743 does not identify how 

inconsistencies have impacted or may 

impact the reliable operation of the bulk 

electric system. Finally, the NYPSC 

asserts that the Commission’s concerns 

may be capable of being addressed 

through modifications to the existing 

impact tests and the Commission should 

consider the validity of such an 

approach. 

42. Public Power Council also 

expresses concern that the 

Commission’s discussion about material 

impact analysis leaves no room for a 

meaningful test to distinguish between 

facilities that are necessary for the 

operation of the bulk electric system 

and those that are not. Public Power 

Council criticizes the Commission’s 

rationale, contending that if a material 

impact assessment indicates that the 

Bulk-Power System can function 

properly even if a fault or operational 

failure occurs on a particular facility, it 

is not clear why the Commission can 

claim that that facility is nonetheless 

‘‘necessary’’ for bulk electric system 

operation. 

43. In a related vein, NRECA seeks 

clarification, or in the alternative 

rehearing, that the Commission’s 

determination regarding ‘‘material 

impact’’ does not intend for NERC to 

change the NERC Rules of Procedure 

(other than to establish a process for 

granting exemptions) or the NERC 

Statement of Compliance Registry 

Criteria. While NRECA acknowledges 

that the Final Rule does not discuss 

such changes to the NERC rules or 

Registry Criteria, NRECA explains that it 

raises the concern because it is unclear 

whether Order No. 743 only rejects the 

NPCC impact-based methodology or 

every functional impact methodology. 

NRECA points to various provisions of 

the NERC rules and Registry Criteria 

indicating that NERC’s registry 

approach is based on identifying owner, 

operators and users of the Bulk-Power 

System that have a ‘‘material impact’’ on 

the Bulk-Power System.50 Accordingly, 

NRECA seeks assurance that the Final 

Rule is not intended to ‘‘undermine the 

core concepts’’ of the NERC Rules and 

Registry Criteria. 

Commission Determination 

44. Order No. 743 did not reject all 

material impact assessments but, 

instead, took issue with particular tests 

and outlined general problems with the 

material impact tests used to determine 

the extent of the bulk electric system 

that we have seen to date. The NYPSC 

incorrectly states that the Commission 

rejected NPCC’s material impact 

assessment based on one event. Rather, 

as discussed extensively in the Final 

Rule and elsewhere herein, the 

Commission rejected NPCC’s material 

impact assessment due to its subjective 

language and failure to identify facilities 

necessary to reliably operate the 

interconnected transmission system.51

These flaws include use of the 

amorphous term ‘‘local area,’’ which was 

not consistently applied throughout the 

NPCC region. The NYPSC does not 

clarify application of this term in its 

request for rehearing, and instead 

merely states that the local area is 

defined by ‘‘the Council members.’’ 52 As 

Order No. 743 notes, the subjectivity of 

the ‘‘local area’’ definition, which 

ultimately determines whether or not a 

facility is classified as part of the bulk 


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53Order No. 743, 133 FERC ¶ 61,150 at P 80. 

54See, e.g., Id. P 80, 83, 86, 90. 

55 Id. P 38. 

56 16 U.S.C. 824o(a)(i). 

57Order No. 743, 133 FERC ¶ 61,150 at P 76. 

58 Id. P 74, 85. 

59 Id. P 139–140. 

60See Public Power Council at 6, Snohomish at 

9 quoting WECC Bulk Electric System Definition 

Task Force, Initial Proposal, attached as Exh. A to 

Snohomish’s NOPR comments. 

61Snohomish at 31–32, citing Associated Gas 

Distributors v. FERC, 824 F.2d 981, 1019 (DC Cir. 

1985). 

62Snohomish at 11–12, quoting Order No. 743, 

133 FERC ¶ 61,150 at P 139. 

63See Snohomish at 35. 

64Snohomish at 40–41, quoting Order No. 743, 

133 FERC ¶ 61,150 at P 30. 

electric system, has led to varying 

results throughout the NPCC region.53

45. The Commission does not agree 

that Order No. 743 did not address how 

inconsistencies in defining the facilities 

that are included in the bulk electric 

system may impact the operation of the 

interconnected transmission network. 

The Final Rule detailed several 

instances where the NERC Reliability 

Standards are less effective when they 

are not applied to all necessary 

facilities.54

46. Public Power Council contends 

that it is not clear why the Commission 

can claim that a particular facility is 

nonetheless ‘‘necessary’’ for bulk electric 

system operation if a material impact 

assessment proves that the Bulk-Power 

System can function properly even if a 

fault or operational failure occurs on 

that facility. As we noted in Order No. 

743, by this metric the facilities that 

caused the 2003 Blackout would not be 

viewed as critical since none of the 

individual facilities caused the outage.55

In defining jurisdictional facilities, 

section 215(a)(1) focuses on whether 

facilities are necessary to operate the 

interconnected transmission system, not 

solely on the consequences of unreliable 

operation of those facilities.56

47. The Commission clarifies that it 

was not our intent to disrupt the NERC 

Rules of Procedure or the Statement of 

Compliance Registry Criteria. Nor did 

the Commission intend to rule out using 

any form of a material impact test in the 

reliability context that can be shown to 

identify facilities needed for reliable 

operation. However, as Order No. 743 

explained, the Commission has serious 

concerns about NPCC’s Document A–10 

methodology. The Commission stated 

that, as a threshold matter, the material 

impact tests proffered by commenters 

did not measure whether specific 

system elements were necessary for 

operating the system, but, rather, 

measure the impact of losing the 

element.57 The Commission’s extensive 

discussion of the NPCC test further 

noted that the NPCC methodology is 

unduly subjective, and results in an 

inconsistent process that excludes 

facilities necessary for operating the 

bulk electric system from the definition. 

Therefore, the Commission indicated, 

should NERC choose to define the bulk 

electric system using a method other 

than one employing the 100 kV bright 

line threshold the Commission 

suggested, such an alternative method 

must be consistent, repeatable and 

verifiable with supporting technical 

analysis.58

3. Western Interconnection/Regional 

Variation 

48. In Order No. 743, the Commission 

rejected arguments that 100–199 kV 

facilities in the Western Interconnection 

should be treated differently than 

facilities in the Eastern 

Interconnection.59 The Commission 

stated that commenters had not 

provided an adequate explanation, 

supported by data and analysis, why 

there is a physical difference that 

justifies different treatment of these 

facilities in the West. 

49. Snohomish and Public Power 

Council contend that, because 115 kV 

facilities commonly are used in the 

West for distribution, the Commission’s 

‘‘inflexible’’ 100 kV threshold is 

‘‘unworkable’’ in the West. Snohomish 

and Public Power Council claim that the 

Western Interconnection is materially 

different from the Eastern 

Interconnection because the long 

distances between load centers, and the 

vast areas commonly covered by 

distribution systems, result in a 

transmission system that is largely 

operated at voltages of 230 kV or above, 

and distribution systems that are 

commonly operated at voltages of 115 

kV. They contend that this physical 

difference is documented in a study 

performed by WECC’s Bulk Electric 

System Definition Task Force.60

Snohomish contends that power flow 

base cases examined by the Bulk 

Electric System Definition Task Force 

support their assertion that facilities 

rated between 100 kV and 200 kV have 

a small impact on transmission in the 

West. 

50. Further, Snohomish contends that 

Order No. 743, at most, demonstrates a 

problem in the NPCC region and does 

not provide justification for action in 

the West. Snohomish asserts that the 

Final Rule fails to identify a single 

reliability event in the Western 

Interconnection arising from the bulk 

electric system definition as currently 

applied. Snohomish argues that the 

Commission cannot use isolated and 

localized problems to justify nationwide 

action.61 According to Snohomish, the 

three disturbances discussed in the 

Final Rule cannot justify nationwide 

action or demonstrate that all facilities 

operated in the 100–200 kV range are 

part of the interconnected transmission 

grid. 

51. Snohomish also contends that the 

Commission implicitly accepted the 

evidence that most 115 kV facilities in 

the West operate as distribution by 

failing to assert that the evidence is 

flawed, but, instead, responding in the 

Final Rule that some facilities operating 

in the 100–200 kV range in the West are 

‘‘operationally significant and needed 

for reliable operation as identified by 

certain WECC documents.’’ 62 According 

to Snohomish, this demonstrates the 

irrationality of Order No. 743’s 

approach because it focuses on the 

operating voltage of electric facilities to 

the exclusion of more germane factors 

such as how those facilities are 

connected and interact with the grid. 

Snohomish claims that the threshold 

approach is inconsistent with previous 

statements from the Commission that 

acknowledge that the function of 

facilities and how they are 

interconnected determines their 

significance. Public Power Council 

explains that, currently, most Public 

Power Council members that operate 

115 kV distribution facilities are not 

classified as transmission owners or 

operators. Thus, according to 

Snohomish and Public Power Council, 

by taking a superficial view of the 

matter, Order No. 743’s 100 kV 

threshold would sweep in a large 

number of facilities, including hundreds 

or perhaps thousands of miles of local 

distribution facilities, in the West. 

52. Snohomish additionally raises a 

concern that the Final Rule could be 

read in a manner that would require an 

end to the work of the WECC Bulk 

Electric System Definition Task Force. 

Snohomish states that the Bulk Electric 

System Definition Task Force, which 

was created in 2008 partly in response 

to Order No. 693, has been working on 

developing a bulk electric system 

definition that is appropriate to the 

unique facts of the Western 

Interconnection.63 Snohomish argues 

that a Commission directive ‘‘to 

‘eliminate the regional discretion in the 

ERO’s current definition’ of BES’’ would 

mean ‘‘that the work of the [Bulk 

Electric System Definition Task Force] 

must be terminated because it would 

result in a regional variation to the BES 

definition that FERC has forbidden.’’ 64


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65 Id. at 41, citing 16 U.S.C. 824o(d)(2)–(3). 

66 Id. at 42. 

67 Id. at 43 (emphasis in original). 

68As described in Order No. 743, NERC has 

undertaken an initiative (the GOTO task force) to 

address the special circumstances associated with 

generators and to determine which Reliability 

Standards might be inappropriate for such limited 

facilities. See Order No. 743, 133 FERC ¶ 61,150, 

at n.158. 

69 16 U.S.C. 824o(a)(1). 

70Form 715 submissions. 

71See Order No. 672, FERC Stats. & Regs. ¶ 

31,204 at P 291. 

72APPA at 5, quoting Order No. 743133 FERC ¶ 

61,150 at P 36, 41, and 100. 

This result, according to Snohomish, 

would violate the FPA because ‘‘Section 

215(d)(2) requires FERC to accord ‘due 

weight’ to the ‘technical expertise’ of 

both NERC and WECC, and Section 

215(d)(3) requires NERC to ‘rebuttably 

presume’ that reliability standards 

developed and approved by WECC are 

consistent with the FPA.’’ 65 Therefore, 

Snohomish requests clarification, or in 

the alternative rehearing, that the 

Commission’s ‘‘findings concerning the 

material impact assessment 

methodology used in NPCC apply only 

to the NPCC’’ and do not apply to the 

Bulk Electric System Definition Task 

Force efforts currently under way.66

Snohomish further seeks clarification, 

or in the alternative rehearing, that the 

bulk electric system definition currently 

being developed for application in 

WECC ‘‘may incorporate any voltage 

threshold or other method of assessing 

the impact of lower-voltage facilities,’’ 

that the WECC bulk electric system 

definition ‘‘must exclude facilities used 

in the local distribution of electric 

energy,’’ and that the definition should 

distinguish between facilities that are or 

are not necessary for operating an 

interconnected energy transmission 

network.67 Finally, Snohomish argues 

that the Commission should clarify that 

the Final Rule is not intended to stop 

NERC’s review of the findings of the Ad 

Hoc Committee for Generator 

Requirements and the Transmission 

Interface (GOTO Task Force) because 

such an action would be arbitrary and 

capricious.68

Commission Determination 

53. The Commission denies rehearing 

on these issues. As stated elsewhere, 

Order No. 743 did not mandate a 100 kV 

threshold. Rather, the Commission 

directed NERC to develop a revised 

definition that addresses our concerns 

with the current definition, including 

inconsistency, lack of oversight and 

exclusion of facilities that are required 

for the reliable operation of the 

interconnected transmission network. 

We suggested that one means to address 

our concerns would be to maintain the 

100 kV threshold contained in the 

current definition, while eliminating the 

discretion that allows Regional Entities 

to interpret and apply the definition 

without ERO or Commission oversight. 

54. Commenters contend that the 

majority of 115 kV facilities in the West 

are distribution facilities and therefore 

not significant to the transmission of 

power. First, as we have stated herein, 

to the extent any facility is a local 

distribution facility, it is exempted from 

the requirements of section 215.69

However, the Commission observes that 

numerous 115 kV and 138 kV 

transmission lines in the Western 

Interconnection often are the only 

pathway available between various load 

centers and networked points.70 Other 

network points are electrically and 

physically remote from each other and 

have the potential for parallel flows 

between two transmission paths, some 

at different voltage levels and others at 

the same voltage. Analyzing how the 

flows split during normal, outage and 

emergency conditions, as well as 

implications to system constraint, could 

lead to a conclusion that such facilities 

are improperly labeled as local 

distribution. 

55. Snohomish argues that the 

Commission errs in focusing on voltage 

rather than the characteristics of the 

facilities. However, in the first instance, 

the Commission’s suggested approach 

uses NERC’s current definition, which 

includes a 100 kV threshold, as a 

baseline for determining which facilities 

are included in the bulk electric system. 

As discussed below, we view a voltage 

threshold as an initial proxy for 

determining where the line between 

local distribution and transmission lies. 

We agree with Snohomish that it is 

important to consider additional facility 

characteristics in order to make a final 

determination regarding which facilities 

are included in the bulk electric system. 

56. The Commission notes that while 

the events cited in Order No. 743 

occurred in the Eastern Interconnection, 

the underlying concerns are applicable 

to the nation as a whole. Currently, 

NERC and the Commission do not have 

oversight of regional bulk electric 

system classification decisions. If all 

facilities necessary for reliable operation 

are not subject to the Reliability 

Standards, the effectiveness of the 

Reliability Standards is undermined. 

57. Snohomish’s concern that Order 

No. 743 would put an end to the WECC 

Bulk Electric System Definition Task 

Force is unfounded. The Commission 

clarifies that our intent in requiring the 

ERO to ‘‘eliminate the regional 

discretion’’ from the current definition 

was to prevent the regions from 

modifying the regional bulk electric 

system definition without Commission 

or ERO oversight. As noted elsewhere, 

WECC may petition for a regional 

variation, if justified, through the 

process outlined in Order No. 672.71

58. In response to Snohomish’s 

question concerning local distribution, 

we reiterate that facilities used for local 

distribution are excluded from the BulkPower System definition under section 

215, and thus are excluded from the 

bulk electric system. With respect to 

changing the 100 kV threshold in the 

approved definition, the Commission 

did not direct such a change. 

59. Similarly, we reiterate that Order 

No. 743 does not affect the GOTO Task 

Force’s activities; however, the task 

force members may submit their 

comments and report to NERC for its 

consideration as NERC develops an 

exemption process. 

60. We understand from the Public 

Power Council’s comments that most 

Public Power Council members owning 

or operating 115 kV facilities are not 

classified as transmission owners or 

operators due to the fact that their 

facilities are radial from one 

transmission supply and serving only 

load. Such facilities currently are 

excluded from registration and we 

believe would appropriately be 

excluded in an acceptable revised bulk 

electric system definition. 

D. Bulk-Power System v. Bulk Electric 

System 

61. APPA and TANC request 

clarification that the Commission is not 

now making a determination as to 

whether the Bulk-Power System is 

broader than the bulk electric system 

and is preserving for future proceedings 

the rights of parties to challenge such a 

determination. According to APPA, the 

Final Rule appears to track the statutory 

definition of Bulk-Power System, i.e., 

‘‘all facilities necessary to operate the 

interconnected transmission network,’’ 

in framing its directive to NERC to 

revise the definition of bulk electric 

system. APPA also points to language in 

Order No. 743 that it believes suggests 

that the Commission considers that the 

statutory definition of Bulk-Power 

System may be broader than the bulk 

electric system.72 APPA states that, to 

preserve its legal rights on the matter, it 

seeks ‘‘limited clarification’’ that the 

Commission is not determining that the 

statutory Bulk-Power System definition 

extends beyond the bulk electric system 


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16272 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Rules and Regulations 

73APPA at 7–8. 

74 Id. P 37. 

75See Promoting Wholesale Competition Through 

Open Access Non-Discriminatory Transmission 

Services by Public Utilities; Recovery of Stranded 

Costs by Public Utilities and Transmitting Utilities, 

Order No. 888, FERC Stats. & Regs. ¶ 31,036 (1996), 

order on reh’g, Order No. 888–A, FERC Stats. & 

Regs. ¶ 31,048 (1997), order on reh’g, Order No. 

888–B, 81 FERC ¶ 61,248, order on reh’g, Order No. 

888–C, 82 FERC ¶ 61,046 (1998), aff’d in relevant 

part sub nom. Transmission Access Policy Study 

Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d 

sub nom. New York v. FERC, 535 U.S. 1 (2002). 

76 16 U.S.C. 824. 

77Portland General at 10. 

78See, e.g., California Pacific Electric Company, 

LLC, 133 FERC ¶ 61,018 at n.59 (2010) (‘‘The 

Supreme Court has determined that whether 

facilities are used in local distribution is a question 

of fact to be decided by the Commission.’’), citing 

FPC v. Southern California Edison Co., 376 U.S. 

205, 210 n.6 (1964). 

79See, e.g., Order No. 743, 133 FERC ¶ 61,150 at 

P 73, 85. 

80Order No. 743, 133 FERC ¶ 61,150 at P 37. 

definition as NERC is directed to revise 

it in this proceeding. In the alternative, 

if the Commission denies clarification, 

APPA seeks rehearing that ‘‘given the 

Final Rule’s directions to NERC to 

define [bulk electric system] in a 

manner that tracks, virtually word-forword, the statutory [Bulk-Power System] 

definition, the Commission’s continued 

suggestion that the [Bulk-Power System] 

definition may reach further than the 

[bulk electric system] would be arbitrary 

and contrary to the express terms of the 

statute.’’73

62. Based on similar concerns, 

NRECA requests clarification, or in the 

alternative rehearing, that the statutory 

definition of Bulk-Power System and 

the definition of bulk electric system are 

synonymous. NRECA points to 

provisions of the NERC Rules of 

Procedure that reference the Bulk-Power 

System to demonstrate such 

convergence. NRECA also contends that 

the language of section 215 and the 

statute’s legislative history, and prior 

usage of the two terms, supports its 

position. 

Commission Determination 

63. The Commission grants APPA and 

TANC’s requests for clarification. We do 

not see any useful purpose that would 

be served by defining the term BulkPower System in this proceeding, and 

decline to do so. Accordingly, we 

dismiss as premature NRECA’s request 

for clarification, or in the alternative, 

rehearing. 

E. Identification of Facilities Used in 

Local Distribution 

64. In Order No. 743, the Commission 

recognized that the ERO would need to 

establish whether a particular facility is 

local distribution or transmission, and 

directed the ERO to develop a means to 

make such a determination.74

Comments 

65. Consumers Energy, Exelon and 

Portland General request clarification 

that NERC’s evaluation of how to 

classify facilities should consider prior 

distribution classifications. Consumers 

Energy and Portland General seek 

clarification on the role of the Order No. 

888 Seven Factor Test in determining 

whether facilities are classified as ‘‘local 

distribution facilities’’ and the impact of 

a prior Seven Factor Test 

determination.75 Consumers seeks 

clarification whether facilities in excess 

of 100 kV that have explicitly been 

found by the Commission to be local 

distribution under the Seven Factor Test 

will automatically be excluded from the 

bulk electric system or will they need to 

go through the exemption process. 

Consumers Energy further asks whether, 

if the owner of such facilities must 

apply for an exemption, the earlier 

Seven Factor finding provides a 

presumption that the facility should be 

excluded. Exelon insists that a facility 

can be classified as either local 

distribution or bulk transmission—but 

not both. 

66. EEI and Portland General request 

clarification that the term ‘‘used in local 

distribution’’ does not have different 

meanings under sections 201(b)76 and 

215 of the FPA and that the Final Rule 

does not affect other determinations of 

what facilities are considered ‘‘used in 

local distribution’’ and thus outside of 

the Commission’s jurisdiction. EEI 

argues that since Congress used the 

same terminology in defining the 

Commission’s jurisdiction in both 

sections 201 and 215, it must have 

intended the words to have the same 

meaning. EEI seeks clarification that 

previous or future regulatory decisions 

regarding local distribution facilities can 

serve as an exemption criterion, and 

states that such clarification will better 

align jurisdictional determinations 

under the FPA. Portland General argues 

that the Commission does not have the 

flexibility to interpret ‘‘facilities used in 

local distribution’’ to mean two different 

things in two different parts of the FPA. 

Specifically, Portland General argues 

that the Commission ‘‘must 

acknowledge and give effect to 

established FPA Section 201(b) 

precedent regarding the identification of 

‘local distribution’ facilities, and must 

recognize that Congress intended the 

same ‘local distribution’ facilities to be 

exempt from Commission jurisdiction 

under Sections 201(b) and 215(a) of the 

FPA.’’77

Commission Determination 

67. Although local distribution 

facilities are excluded from the 

definition, it still is necessary to 

determine which facilities are local 

distribution, and which are 

transmission. Whether facilities are 

used in local distribution will in certain 

instances raise a question of fact, which 

the Commission has jurisdiction to 

determine.78 The Commission 

envisioned that the process of 

identifying which facilities are local 

distribution and which are transmission 

likely would require more than one 

step. Under the methodology the 

Commission proffered, the 100 kV 

bright-line threshold would serve as the 

initial proxy for determining which 

facilities are local distribution, and 

which are transmission. The Final Rule 

provides ample support for the 

reasonableness of a 100 kV threshold, 

not the least of which is that the ERO’s 

definition of bulk electric system 

currently utilizes a general 100 kV 

threshold.79 The Commission 

recognized, however, that it would be 

necessary to identify any local 

distribution that is improperly included, 

and conversely to identify any 

transmission that is improperly 

excluded, by the proxy. 

68. The Commission clarifies that the 

statement in Order No. 743, 

‘‘determining where the line between 

‘transmission’ and ‘local distribution’ 

lies * * * should be part of the 

exemption process the ERO develops’’80

was intended to grant discretion to the 

ERO, as the entity with technical 

expertise, to develop criteria to 

determine how to differentiate between 

local distribution and transmission 

facilities in an objective, consistent, and 

transparent manner. This mechanism 

will allow the ERO to maintain an 

inventory of the transmission facilities 

subject to the mandatory Reliability 

Standards, and to exclude local 

distribution facilities from the bulk 

electric system definition by applying 

the criteria. Once NERC develops and 

submits its proposal to the Commission, 

the Commission will, as part of its 

evaluation of the proposal, determine 

whether the process developed 

adequately differentiates between local 

distribution and transmission. 

69. We agree with Consumers Energy, 

Portland General and others that the 

Seven Factor Test could be relevant and 

possibly is a logical starting point for 

determining which facilities are local 

distribution for reliability purposes, 

while also allowing NERC flexibility in 


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81Order No. 743, 133 FERC ¶ 61,150 at P 112. 

82As discussed further below, the Commission 

uses the term ‘‘exclusion’’ herein when discussing 

facilities expressly excluded by the statute (i.e., 

local distribution) and the term ‘‘exemption’’ when 

referring to the exemption process NERC will 

develop for use with facilities other than local 

distribution that may be exempted from compliance 

with the mandatory Reliability Standards for other 

reasons. 

83Western Petitioners at 12, quoting Detroit 

Edison Co. v. FERC, 334 F.3d at 54. 

84Portland General at 14. 

85See, e.g., Nine Mile Point Nuclear Station LLC 

v. Niagara Mohawk Power Corp., 110 FERC ¶ 

61,033, at P 30 & n.31 (2005), aff’d, 452 F.3d 822 

(D.C. Cir. 2006); accord New York v. FERC, 535 U.S. 

1, 22–23 (2002) (holding that the Commission was 

within its authority to establish a seven-factor test 

to determine which facilities are local distribution 

facilities that fall outside of the Commission’s 

jurisdiction pursuant to FPA section 201). Cf. 

Western Massachusetts Electric Co., 61 FERC ¶ 

61,182, at 61,661 (1992), aff’d, 165 F.3d 922, 926 

(D.C. Cir. 1999) (concluding the Commission may 

examine contracts relating to transactions which 

may be subject to its jurisdiction prior to making 

its determination as to jurisdiction). 

applying the test or developing an 

alternative approach as it deems 

necessary. 

70. With respect to Consumers 

Energy’s request for clarification 

regarding prior Seven Factor Test 

determinations qualifying for automatic 

exclusion, the Commission reiterates 

that we have granted NERC discretion to 

develop a means to differentiate 

between local distribution and 

transmission facilities, which NERC will 

submit to the Commission for review 

and approval. Consequently, we leave to 

NERC in the first instance questions 

about if and how the Seven Factor Test 

should be considered in differentiating 

between local distribution and 

transmission facilities. 

71. Our purpose in moving away from 

the proposal in the NOPR was to 

provide NERC with the greatest amount 

of flexibility to utilize its technical 

expertise and processes in developing 

an appropriate exemption process to 

complement a revised definition of 

‘‘bulk electric system.’’ Considerations 

regarding the Seven Factor Test and its 

usefulness in a NERC-designed 

exemption process are initially for 

NERC to decide in response to our 

directive in Order No. 743. As we said 

in Order No. 743, ‘‘allowing the ERO to 

develop an appropriate exemption 

process should provide interested 

stakeholders an opportunity to 

participate in the development of the 

process.’’81 Consumers Energy, Portland 

General and others can raise any 

concerns with respect to use of the 

Seven Factor Test or any other concern 

during the development of the 

exemption process. Under the 

exemption process the Commission 

ultimately approves, once a facility is 

classified as local distribution, the 

facility will be excluded from the bulk 

electric system unless changes to the 

system warrant a review of the 

determination. 

72. We decline to provide the 

clarification EEI and Portland General 

request regarding the use of the term 

‘‘used in local distribution’’ in FPA 

sections 201(b) and 215, as we find the 

request premature. Order No. 743 tasked 

NERC, as the entity with technical 

expertise, with developing a process for 

differentiating between local 

distribution and transmission facilities 

to apply in the reliability context. Once 

NERC develops and submits a proposed 

methodology, we will evaluate whether 

the proposal results in any conflicts 

with the statutory language. 

F. Exemption Process 

73. Order No. 743 directed NERC to 

develop a process for exempting 

facilities operated at or above 100 kV 

that are not necessary for operating the 

transmission grid. The Final Rule 

declined to dictate the substance of the 

exemption process, leaving this task to 

the ERO. This would provide interested 

stakeholders an opportunity to 

participate in developing the process. 

The Final Rule did identify several 

matters or concerns to be addressed in 

an acceptable exemption process. The 

Commission asked the ERO to develop 

an exemption process that includes 

clear, objective, transparent, and 

uniformly applicable criteria for 

exemption of facilities that are not 

necessary for operating the grid and any 

related changes to its Rules of 

Procedures that may be required to 

implement the exemption process. 

Numerous petitioners seek rehearing 

and clarification regarding the 

exemption process discussed in the 

Final Rule.82

1. Exclusion of Facilities Used in Local 

Distribution 

74. Western Petitioners and Portland 

General seek rehearing that the 

exemption process developed by the 

ERO should not apply to facilities used 

in local distribution. Western 

Petitioners and Portland General state 

that facilities used in local distribution 

are not subject to section 215. Thus, 

they argue that the ERO lacks authority 

to subject local distribution facilities to 

an exemption process. According to 

Western Petitioners, subjecting such 

facilities to an exemption process 

developed by the ERO, and allowing the 

ERO to determine ‘‘jurisdictional 

exemptions’’ for facilities not subject to 

section 215 would ‘‘eviscerate state 

jurisdiction over numerous local 

facilities, in direct contravention of 

Congress’ intent.’’83 For its part, 

Portland General argues that, by 

directing NERC to review facilities over 

100 kV currently designated as local 

distribution under the Seven Factor Test 

and ‘‘by pushing the ERO to recognize 

a bright-line presumption threshold that 

was expressly rejected in Order No. 888, 

the Commission is clearly departing 

from its existing precedent, under 

which these same facilities have been 

determined to be ‘local distribution’ 

facilities exempt from regulation under 

Section 215.’’84

Commission Determination 

75. As the Commission explained 

above, we agree that local distribution 

facilities are not subject to FPA section 

215. However, we disagree with 

Western Petitioners and Portland 

General that it is outside our 

jurisdiction to determine which 

facilities are local distribution and 

therefore excluded from the bulk 

electric system. We have in the first 

instance the authority to determine the 

scope of our jurisdiction.85

76. The Commission notes some 

confusion regarding ‘‘exclusions’’ versus 

‘‘exemptions.’’ We understand that a 

facility that is excluded would not have 

to go through any process at NERC to 

determine applicability. On the other 

hand, where an entity applies to NERC 

to seek to exempt its facility from the 

bulk electric system, NERC would 

follow an exemption process. With that 

understanding, we clarify that, as 

discussed herein, we envision that the 

process for determining which facilities 

will be included under the bulk electric 

system will involve several steps. NERC 

will develop criteria for determining 

whether a facility that falls under the 

definition of bulk electric system may 

qualify for exclusion. If, for example, 

the application of the criteria clearly 

indicates that a facility is local 

distribution, the facility is excluded, 

and no process before the ERO is 

required. If application of the NERC 

criteria does not lead to a definitive 

result, the entity could apply for an 

exemption, invoking a factual inquiry 

before the ERO to determine the proper 

categorization of facilities. 

2. Maintaining a List of Excluded 

Facilities 

77. Similarly, Western Petitioners 

challenge the suggestion in the Final 

Rule that the ERO maintain a list of 

excluded facilities, including local 


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16274 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Rules and Regulations 

86Order No. 743, 133 FERC ¶ 61,150 at P 117. 

87Order No. 743, 133 FERC ¶ 61,150, at P 55. 

88 Id. P 119. 89 Id. P 114. 

distribution facilities, arguing that the 

establishment of a rule to maintain such 

a list is beyond NERC’s statutory 

authority. They argue that nothing in 

FPA section 215 vests the ERO with 

oversight of facilities used in 

distribution, even for the purpose of 

maintaining a list of exempt facilities. 

Commission Determination 

78. The Commission agrees with 

Western Petitioners that section 215 

does not grant the ERO oversight of 

facilities used in local distribution. 

However, as the Commission has 

explained, we have jurisdiction to 

determine which facilities are local 

distribution, and which are 

transmission. In order to exercise such 

oversight, including the appropriate 

application of the ERO’s exemption 

determinations, it is important to have 

an inventory of facilities.86

79. Once the ERO develops the 

inventory of facilities by applying the 

process the Commission ultimately 

approves, the Commission has 

authority, in its ERO oversight role, to 

review the determinations to ensure 

consistent application of the process 

and the accuracy of the resulting 

inventory. Such a review necessarily 

includes reviewing not only the 

inventory of facilities ultimately 

classified as transmission, but also those 

excluded as local distribution, 

particularly in instances where the 

decision was a close call. In performing 

such a review, the Commission is not 

inappropriately overseeing local 

distribution facilities but, rather, is 

reviewing the ERO’s application of the 

process for drawing the line between 

local distribution and transmission, 

which is within our authority under 

section 215 of the FPA. 

3. Exemption v. Exclusion of ‘‘Radials 

To Load’’ Facilities 

80. In Order No. 743, the Commission 

reiterated that we do not seek to modify 

the second part of the current NERC 

bulk electric system definition, which 

states that ‘‘[r]adial transmission 

facilities serving only load with one 

transmission source are generally not 

included in this definition.’’ 87 The 

Commission also suggested that the ERO 

could also track exemptions for radial 

facilities.88

Comments 

81. APPA, TANC, NRECA and TAPS 

request clarification that radial 

transmission facilities serving only load, 

i.e., radials to load, with one 

transmission source may be excluded 

from the bulk electric system definition 

and entities with such facilities need 

not go through an exemption process. 

TAPS and APPA state that exclusion of 

radials to load, rather than inclusion 

subject to exemption, is consistent with 

section 215 of the FPA. TAPS argues 

that the Final Rule makes no attempt to 

demonstrate that radials to load are 

among the ‘‘facilities necessary to 

operate an interconnected network’’ that 

the Commission directed NERC to 

include in the bulk electric system 

definition. APPA explains that a 20 MW 

distribution utility that owns a 115 kV 

radial to load is likely not to have any 

contact with NERC since the utility’s 

load is radial and below the threshold 

for NERC registration. APPA expresses 

concern that, pursuant to the Final Rule, 

such a utility could now have to incur 

the time and resources necessary to 

demonstrate that it falls within an 

exemption. TAPS and APPA contend 

that subjecting currently-excluded 

‘‘radial to load’’ to an exemption process 

would create an unnecessary burden on 

industry, particularly small entities, as 

well as NERC and the Regional Entities. 

Likewise, NRECA seeks clarification 

that the Commission did not intend that 

the owner of every currently-excluded 

facility operated at above 100 kV reapply for an exclusion or exemption and 

that the ERO conduct a de novo review 

of such facilities. NRECA contends that 

such an approach would unreasonably 

burden the resources of utilities, create 

a huge backlog that slows the exemption 

process, and denies the ERO the ability 

to exercise its judgment in the matter. 

82. For the same reasons, TAPS also 

seeks clarification that the Commission, 

in suggesting that the ERO establish a 

mechanism for reporting and tracking 

exempted radial facilities, did not 

intend to include excluded radial to 

load. TAPS contends that the Final Rule 

does not support the need for such 

reporting and tracking, and that the 

burden to industry and the ERO is not 

justified. TAPS states that it agrees that 

radial facilities outside the current bulk 

electric system definition, i.e., those that 

are not ‘‘radial transmission facilities 

serving only load with one transmission 

source,’’ that still warrant exclusion, 

would be appropriate for an exemption 

process and the suggested tracking. 

83. Consumers Energy, noting that the 

current definition of bulk electric 

system excludes ‘‘radial transmission 

facilities serving only load with one 

transmission source,’’ requests 

clarification whether the exclusion 

applies to a radial line with only one 

transmission source that is designed to 

serve load, but also serves ‘‘incidental 

small generation.’’ According to 

Consumers, such situations are 

becoming more common with the 

interconnection of small distributed 

renewable generation. Consumers 

Energy asks how much incidental 

generation a line could serve and 

continue to meet the bulk electric 

system radial line exclusion. 

Commission Determination 

84. In Order No. 743, the Commission 

directed the ERO to develop an 

exemption process and made clear that 

‘‘we will not dictate the substance or 

content of the exemption process 

* * *.’’ 89 Thus, while the Commission 

stated that the ERO should develop an 

exemption process that includes ‘‘clear, 

objective, transparent, and uniformly 

applicable criteria’’ for determining 

exemptions, the Commission otherwise 

left it to the ERO’s discretion to develop 

an appropriate exemption process, 

which the Commission will review. Any 

exemption of radial facilities is not 

based on a statutory requirement, unlike 

exclusion of local distribution. 

However, the Commission believes that 

certain categories of radial facilities may 

lend themselves to an ‘‘exclusion’’ 

process as described above (i.e., once 

identified as belonging in a certain 

radial category, the facilities could be 

excluded without further review). For 

example, should the revised bulk 

electric system definition maintain the 

exclusion of radial facilities serving 

only load from one transmission source, 

these types of facilities easily could be 

excluded without further analysis. 

85. We believe that, in general, the 

decision whether, and in what 

circumstances, to apply an exemption 

versus exclusion process for radial to 

load facilities is largely a matter of 

balancing between, on the one hand, 

administrative ease, e.g., NERC having 

to review thousands of exemptions for 

facilities outside the NPCC region that 

previously were excluded as radial and, 

on the other hand, assuring that 

facilities necessary for operation of an 

interconnected grid are not 

inadvertently excluded. That being said, 

we believe that the ERO should balance 

these matters when developing an 

appropriate process. Likewise, with 

regard to NRECA’s request to clarify that 

the Commission does not seek to require 

NERC or the regions to conduct a de 

novo review of all exemptions granted 

to date, we did not require a de novo 

review and leave an appropriate review 

process to the ERO. 


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90Order No. 743, 133 FERC ¶ 61,150 at P 55. 

91 Id. 

92 Id. P 29–30. 

93NRECA at 20–21, citing Order No. 743, 133 

FERC ¶ 61,150 at P 131, 169. 

94Order No. 743, 133 FERC ¶ 61,150 at P 131. 

95 Id. P 132. 

96 Id. P 131. 

97 Id. 

98 Id. P 148–149. 

86. The Commission clarifies that 

Order No. 743 granted NERC discretion 

to make a determination regarding 

whether to exclude or exempt radial 

facilities. One consideration in this 

regard is whether an exclusion process 

will avoid NERC having to review 

thousands of exemptions for facilities 

outside the NPCC region that previously 

were excluded as radial. 

87. Additionally, as the Commission 

noted, commenters have many ideas 

about what types of facilities should be 

considered ‘‘radial.’’ 90 NERC can 

consider whether these facilities should 

be candidates for exemption.91 Any 

expansion of the definition of radial 

facilities beyond the approved 

definition must be supported with a 

technical analysis. 

88. With respect to Consumers’ 

request for clarification regarding how 

much incidental generation a line could 

serve and continue to meet the bulk 

electric system radial line exclusion, 

this is an issue that should be raised 

with NERC as it develops criteria for 

determining what is considered radial. 

4. Development of Exemption Process 

Through NERC Reliability Standards 

Development Process 

89. While agreeing with the 

Commission’s directive that NERC 

develop revisions to the bulk electric 

system definition through NERC’s 

Reliability Standards Development 

Process, NRECA requests clarification, 

or in the alternative rehearing, that 

NERC also must develop criteria for 

exemptions through the Standards 

Development Process. NRECA 

maintains that exemptions from the 

bulk electric system are as much a part 

of the Reliability Standards as the 

definition itself, as both determine the 

Standards’ scope and applicability. 

According to NRECA, the purely 

procedural aspects of an exemption 

process can be developed by NERC and 

included in the Rules of Procedure. 

However, NRECA contends that the 

development of exemption criteria is a 

‘‘core’’ technical task that requires use of 

the Reliability Standards Development 

Process. 

Commission Determination 

90. Given that the decision as to how 

to proceed in response to Order No. 743 

rests first with NERC, we decline to 

provide the clarification requested by 

NRECA at this time. We explained in 

Order No. 743 that the NERC Glossary 

(which includes the definition of bulk 

electric system) is part of the Reliability 

Standards, and thus changes to the 

Glossary should be developed through 

the Reliability Standards Development 

Process.92 However, although the 

exemption process certainly will play a 

role in determining which facilities are 

included in the bulk electric system, the 

process is not part of the definition, nor 

part of any Reliability Standard. 

Accordingly, the Commission leaves the 

decision as to how to proceed in 

response to its directive to NERC in the 

first instance. The Commission expects, 

as indicated in Order No. 743, that 

NERC will provide ample opportunity 

for stakeholder input into the exemption 

process regardless of whether NERC 

determines to proceed using the 

Reliability Standard Development 

Process or by amending the Rules of 

Procedure. Accordingly, the 

Commission denies NRECA’s rehearing 

request on this matter. 

5. Compliance While an Exemption 

Application Is Pending 

91. NRECA seeks clarification that 

currently unregistered entities that may 

be required to seek an exemption for 

facilities under the revised bulk electric 

system definition will not be required to 

register and thereafter comply with 

Reliability Standards until a final 

decision is made to deny the application 

for exemption. NRECA, noting that the 

Commission indicated that it did not 

expect the Final Rule to result in many 

additional facilities outside of the NPCC 

region becoming subject to Reliability 

Standards,93 states that this observation 

is particularly true for currently-exempt 

facilities in the other seven regions. 

NRECA contends that it is unreasonable 

to require an entity to expend the 

financial and staff resources needed to 

develop a compliance program when 

the ERO may ultimately determine that 

the facilities are exempt. 

92. In a related vein, NRECA requests 

clarification that the ERO should have 

the flexibility to propose a transition 

process that it deems feasible and 

appropriate, not necessarily a hard 

deadline of 18 months after Commission 

approval. 

Commission Determination 

93. As the Commission indicated in 

the Final Rule, the transition period is 

intended to allow a reasonable period of 

time for the affected entities to achieve 

compliance with respect to facilities 

that are subject to the mandatory 

Reliability Standards for the first time.94

We agree with NRECA that affected 

entities should not be required to take 

costly steps to comply with the 

Reliability Standards prior to the ERO’s 

initial determination on an exemption 

request. However, as indicated in Order 

No. 743, ‘‘we expect that the transition 

periods will be long enough for 

exemption requests to be processed and 

to allow entities to bring newlyincluded facilities into compliance prior 

to the mandatory enforcement date.’’ 95

We reiterate that we do not anticipate a 

large number of exemption requests 

arising outside NPCC.96 Thus, our 

expectation remains that NERC should 

be able to process any exemption 

requests in a timely manner, allowing 

any entity denied an exemption to come 

into compliance with the relevant 

Reliability Standards within the 

transition period. 

94. With respect to the length of the 

transition period, as discussed in the 

Final Rule, we based our determination 

to establish an 18-month transition 

period on ReliabilityFirst’s prior 

experience in adopting a revised bulk 

electric system definition in that region, 

and continue to believe it is a 

reasonable transition period.97

Additionally, we noted that the ERO 

may request a longer transition period 

based on a specific justification. This 

provides sufficient flexibility should the 

ERO determine that the 18-month 

transition period is insufficient. 

6. Step-Down Transformers 

95. The Final Rule, in response to a 

ReliabilityFirst request for clarification 

that facilities that operate at 100 kV or 

above should be considered bulk 

electric system facilities, even if, for 

example, one transformer winding 

operates below 100 kV, stated that ‘‘we 

agree with [ReliabilityFirst’s] developed 

delineation point with regard to ‘stepdown’ transformers, but note that these 

kinds of refinements can and should be 

addressed as part of the NERC 

exemption process.’’ 98

96. EEI, Consumers and Wisconsin 

Electric request clarification that this 

statement concerning the treatment of 

step-down transformers was offered to 

provide guidance and not intended to 

prejudge the exemption criteria to be 

developed by the ERO. EEI claims that 

many state commissions treat step-down 

transformers with a low-side winding 

below 100 kV as under state rate 

jurisdiction. Wisconsin Electric 

contends that, while the suggested 


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99 Id. P 114. 

100 Id. P 121. 

101APPA at 11, citing Registry Criteria, section 

II.D.2 (providing for registration of ‘‘[a]n entity that 

owns/operates a transmission element below 100 

kV associated with a facility that is included on a 

critical facilities list that is defined by the Regional 

Entity’’). 

102Statement of Registry Criteria at 10 (Note 1 to 

Registry Criteria). 

approach would simplify auditing, it 

would impose burdens on registered 

entities without a commensurate 

enhancement to reliability. 

97. Consumers Energy suggests that 

the characteristics of the ‘‘low side’’ of a 

facility be considered when determining 

whether an entire facility is considered 

part of the bulk electric system. 

Consumers states that it has facilities 

with a 138 kV high side voltage and a 

low side ranging from 46 kV to 2.5 kV, 

and contends that the low side provides 

service only for local distribution. 

Commission Determination 

98. Order No. 743 directed the ERO to 

develop an exemption process, and 

specifically declined to ‘‘dictate the 

substance or content of the exemption 

process.’’ 99 However, we provided 

guidance, stating that the process 

should include clear, objective, 

transparent and uniformly applicable 

criteria for exemption of facilities that 

are not necessary for operating the 

interconnected transmission system. 

Accordingly, the Commission grants 

EEI’s, Consumers Energy’s and 

Wisconsin Electric’s requests for 

clarification that the discussion 

regarding which facilities should or 

should not be included in the bulk 

electric system definition was intended 

to provide guidance, not to prejudge 

what should be included in the 

exemption criteria. Therefore, the 

Commission declines to provide the 

specific clarifications requested 

regarding treatment of various types of 

step down transformers. 

7. Process for Including Sub-100 kV 

Facilities 

99. In the rulemaking, ERCOT 

commented that facilities operated 

below 100 kV generally are not 

considered part of the bulk electric 

system, but can be included if identified 

as a critical facility by a Regional Entity. 

ERCOT suggested that, similar to the 

development of an exemption process to 

consider applications for exemption of 

facilities above 100 kV, the Commission 

should consider imposing a process for 

inclusion of critical facilities below 100 

kV. In Order No. 743, the Commission 

responded that it agrees with ERCOT’s 

suggestion and ‘‘it would be worthwhile 

for NERC to consider formalizing the 

criteria for inclusion of critical facilities 

operated below 100 kV in developing 

the exemption process.’’ 100

100. Western Petitioners state that the 

Commission should clarify that all local 

distribution facilities, including those 

operated at below 100 kV which may be 

deemed ‘‘critical’’ by a Regional Entity, 

are expressly excluded under section 

215 of the FPA. 

101. APPA and TANC request 

clarification that, in suggesting that 

NERC formalize the criteria for 

including critical facilities operated 

below 100 kV in developing the 

exemption process, the Commission was 

not seeking to alter NERC’s Statement of 

Registry Criteria (Registry Criteria) or 

shift the evidentiary burdens. APPA 

notes that the current Registry Criteria 

include a provision that allows the 

registry of entities that own critical 

facilities below the 100 kV threshold.101

APPA expresses concern that a parallel 

process developed in conjunction with 

the exemption process might be 

construed as a departure from the 

Registry Criteria, which places the 

burden on NERC and the Regional 

Entities to demonstrate the need to 

include facilities operated at below 100 

kV as part of the bulk electric system. 

APPA supports a process that enhances 

consistency among Regional Entity 

determinations and ensures better due 

process to would-be registered entities 

with potentially critical facilities 

operated at below 100 kV facilities, and 

seeks clarification that this 

understanding of the Commission’s 

statement is correct. 

Commission Determination 

102. The Commission clarifies that 

Order No. 743 did not intend to alter the 

Registry Criteria, shift the evidentiary 

burden for registration, or otherwise 

address matters involving the Registry 

Criteria. Indeed, the Statement of 

Compliance Registry Criteria currently 

provides that the Regional Entities may 

propose registration of entities that do 

not meet the registry criteria if the 

Regional Entity believes and can 

reasonably demonstrate that the 

organization is a bulk power system 

owner, or operates, or uses bulk power 

system assets, and is material to the 

reliability of the bulk power system.102

However, we note that while the 

Registry Criteria will not change, it is 

possible that additional facilities may 

come under the revised definition and 

some entities may be required to register 

for the first time. 

103. The Commission agrees with 

APPA that underlying our suggestion 

that NERC consider an inclusion 

process for critical facilities operated 

below 100 kV was a concern that 

Regional Entities make such 

determinations in an appropriate and 

consistent manner, according to 

developed criteria, which should better 

ensure due process. 

104. We agree with Western 

Petitioners that, as stated elsewhere 

herein, the Commission does not have 

jurisdiction over facilities that are 

determined to be local distribution 

through the process NERC develops and 

we approve. 

G. Requests for Revised Regulatory 

Flexibility Act Analysis 

105. In Order No. 743, the 

Commission stated that the Final Rule 

will not have a significant economic 

impact on a substantial number of small 

entities since most transmission owners, 

transmission operators and transmission 

service providers do not fall within the 

definition of small entities. Further, the 

Commission suggested that the ERO 

create an appropriate exemption process 

and that this process will further ensure 

that the Final Rule minimally affects 

small entities. As we noted in the 

NOPR, the Commission estimated that 

approximately four of the 33 

transmission owners, transmission 

operators and transmission services 

providers identified in the U.S. portion 

of the NPCC region may fall within the 

definition of small entities. 

Comments 

106. APPA and NRECA request that 

the Commission clarify that it will 

perform a revised Regulatory Flexibility 

Act analysis once the exemption process 

has been developed by NERC and 

approved by the Commission in order to 

determine whether the Commission’s 

finding that the Final Rule will not have 

a significant economic impact on a 

substantial number of small entities is 

arbitrary. In particular, APPA and 

NRECA assert that the Commission 

erred by certifying that the Final Rule 

will not have a significant economic 

impact on a substantial number of small 

entities, particularly in light of the 

uncertainties of an as-yet-to-bedeveloped exemption process to 

mitigate the impact of the Final Rule on 

small entities. APPA and NRECA argue 

that the Commission’s reliance on the 

exemption process to be established by 

NERC to support its Regulatory 

Flexibility Act certification is not 

justified. They assert that the ability of 

the exemption process to minimize the 

impact on small entities cannot be 

assessed until the exemption process is 


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Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Rules and Regulations 16277 

103Order No. 743, 133 FERC ¶ 61,150 at P 169. 

104This analysis will determine if an Initial 

Regulatory Flexibility Analysis is required or if the 

Commission can certify that the revised definition 

will not have a significant economic impact on a 

substantial number of small companies. 

developed by NERC and approved by 

the Commission. 

107. TANC requests clarification that 

the Commission has not yet finalized its 

Regulatory Flexibility Act analysis and 

will not do so until NERC has submitted 

a proposed exemption process. 

108. Public Power Council, NYPSC 

and Snohomish argue that 

implementing the 100-kV threshold will 

be enormously costly. Public Power 

Council, for its part, argues that the 

Commission’s rejection of evidence of 

such increased compliance costs was 

arbitrary and capricious since, inter alia, 

Public Power Council did provide 

specific assertions as to how the Final 

Rule will have a significant economic 

impact on small entities. The NYPSC 

requests rehearing on whether the 

Commission’s decision to direct NERC 

to revise the bulk electric system 

definition to include facilities operated 

at 100 kV and above where the 

Commission failed to determine 

sufficient benefits in relation to the 

costs, resulting in the imposition of 

unnecessary costs without reliability 

benefits, was arbitrary, capricious, and 

an abuse of discretion. Snohomish states 

that it and many other entities operating 

in the Western Interconnection 

provided evidence demonstrating that 

imposition of the 100-kV threshold in 

the Western Interconnection will result 

of enormous compliance costs with no 

benefit to reliability since the 115-kV 

systems operated by these entities 

generally are used only for local 

distribution and their operation 

therefore has little or no effect on the 

interconnected bulk system. 

Commission Determination 

109. The Commission does not agree 

with commenters that its Regulatory 

Flexibility Act analysis was deficient, 

and we continue to believe that our 

suggested approach in Order No. 743 

will not have a significant economic 

impact on a substantial number of small 

entities.103 With respect to comments 

that we did not adequately consider the 

costs of implementing a 100 kV 

threshold, we note that the current bulk 

electric system definition contains a 

general 100 kV threshold. Thus, the 

burden of our suggested proposal to 

eliminate the regional discretion in the 

current definition and maintain a brightline 100 kV threshold should be 

minimal in all regions except NPCC. 

Even within the U.S. portion of the 

NPCC region, the Commission estimated 

in the Final Rule that only four of the 

33 transmission owners, transmission 

operators and transmission service 

providers may fall within the definition 

of small entities. We also believe that 

the exemption process will further 

ensure that the Final Rule minimally 

affects small entities. Finally, we have 

clarified on rehearing that NERC may 

develop criteria to identify local 

distribution facilities and certain 

categories of radial facilities that qualify 

for exclusion from the definition of the 

bulk electric system and therefore do 

not need to apply for exemption. For 

these reasons the Commission rejects 

the comments objecting to the 

Commission’s determinations regarding 

the cost of implementing a 100 kV 

threshold. 

110. However, the Commission will 

grant APPA’s and NRECA’s request for 

clarification in part. The Commission 

clarifies that it will perform a new 

Regulatory Flexibility Act analysis to 

determine whether the revised bulk 

electric system definition will have a 

significant economic impact on small 

entities when NERC submits its 

proposed definition, criteria for 

exclusion and the exemption process.104

We believe that the revisions NERC will 

propose will be sufficiently different 

from the initial NOPR proposal to 

warrant additional review to ensure that 

small entities are not unduly burdened. 

III. Document Availability 

111. In addition to publishing the full 

text of this document in the Federal 

Register, the Commission provides all 

interested persons an opportunity to 

view and/or print the contents of this 

document via the Internet through 

FERC’s Home Page (http://www.ferc.gov) 

and in FERC’s Public Reference Room 

during normal business hours (8:30 a.m. 

to 5 p.m. Eastern time) at 888 First 

Street, NE., Room 2A, Washington, DC 

20426. 

112. 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. 

113. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from FERC 

Online Support at 202–502–6652 (toll 

free at 1–866–208–3676) or e-mail at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

[FR Doc. 2011–6779 Filed 3–22–11; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 40 

[Docket No. RM10–16–000; Order No. 749] 

System Restoration Reliability 

Standards 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Final rule. 

SUMMARY: Under section 215 of the 

Federal Power Act, the Commission 

approves three Emergency Operations 

and Preparedness (EOP) Reliability 

Standards, EOP–001–1 (Emergency 

Operations Planning), EOP–005–2 

(System Restoration from Blackstart 

Resources), and EOP–006–2 (System 

Restoration Coordination) as well as the 

definition of the term ‘‘Blackstart 

Resource’’ submitted to the Commission 

for approval by the North American 

Electric Reliability Corporation (NERC), 

the Electric Reliability Organization 

certified by the Commission. The 

approved Reliability Standards require 

transmission operators, generation 

operators, and certain transmission 

owners and distribution providers to 

ensure that plans, facilities and 

personnel are prepared to enable system 

restoration from Blackstart Resources 

and require reliability coordinators to 

establish plans and prepare personnel to 

enable effective coordination of the 

system restoration process. The 

Commission also approves the NERC’s 

proposal to retire four existing EOP 

Reliability Standards and a definition 

that are replaced by the Standards and 

definition approved in this Final Rule. 

DATES: Effective Date: This rule will 

become effective May 23, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Terence Burke (Legal Information), 

Office of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426, (202) 502–6498. 

David O’Connor (Technical 

Information), Office of Electric 

Reliability, Division of Reliability 

Standards, Federal Energy Regulatory 


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