Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 80391 

3. Instruction B(18) only applies to annual 

reports, and not to registration statements on 

Form 40–F. 

* * * * * 

9. Amend Form 8–K (referenced in 

§ 249.308) by adding Item 1.04 under 

the caption ‘‘Information to Be Included 

in the Report’’ after the General 

Instructions to read as follows: 

Note: The text of Form 8–K does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

Form 8–K 

* * * * * 

General Instructions 

* * * * * 

Information to Be Included in the 

Report 

* * * * * 

Item 1.04 Mine Safety—Reporting of 

Shutdowns and Patterns of Violations. 

(a) If the registrant or a subsidiary of 

the registrant has received, with respect 

to a coal or other mine of which the 

registrant or a subsidiary of the 

registrant is an operator— 

• an imminent danger order issued 

under section 107(a) of the Federal Mine 

Safety and Health Act of 1977 (30 U.S.C. 

817(a)); 

• a written notice from the Mine 

Safety and Health Administration that 

the coal or other mine has a pattern of 

violations of mandatory health or safety 

standards that are of such nature as 

could have significantly and 

substantially contributed to the cause 

and effect of coal or other mine health 

or safety hazards under section 104(e) of 

such Act (30 U.S.C. 814(e)); or 

• a written notice from the Mine 

Safety and Health Administration that 

the coal or other mine has the potential 

to have such a pattern, disclose the 

following information: 

(1) The date of receipt by the issuer 

or a subsidiary of such order or notice. 

(2) A brief description of the category 

of order or notice. 

(3) The name and location of the mine 

involved. 

Instructions to Item 1.04. 

1. The term ‘‘coal or other mine’’ 

means a coal or other mine, as defined 

in section 3 of the Federal Mine Safety 

and Health Act of 1977 (30 U.S.C. 802), 

that is subject to the provisions of such 

Act (30 U.S.C. 801 et seq.). 

2. The term ‘‘operator’’ has the 

meaning given the term in section 3 of 

the Federal Mine Safety and Health Act 

of 1977 (30 U.S.C. 802). 

* * * * * 

10. Amend Form 10–Q (referenced in 

§ 249.308a) by adding Item 4 in Part II 

to read as follows: 

Note: The text of Form 10–Q does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

FORM 10–Q 

* * * * * 

PART II 

* * * * * 

Item 4. Specialized Disclosures * * * 

If applicable, provide a statement that 

the information concerning mine safety 

violations or other regulatory matters 

required by Section 1503(a) of the DoddFrank Wall Street Reform and Consumer 

Protection Act and Item 106 of 

Regulation S–K (17 CFR 229.106) is 

included in exhibit 95 to the quarterly 

report. 

* * * * * 

11. Amend Form 10–K (referenced in 

§ 249.310) by adding paragraph (b) to 

Item 4 in Part I to read as follows: 

Note: The text of Form 10–K does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

FORM 10–K 

* * * * * 

PART I 

* * * * * 

Item 4. Specialized Disclosures * * * 

(b) If applicable, provide a statement 

that the information concerning mine 

safety violations or other regulatory 

matters required by Section 1503(a) of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act and Item 106 

of Regulation S–K (17 CFR 229.106) is 

included in exhibit 95 to the annual 

report. 

* * * * * 

By the Commission. 

Dated: December 15, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–31941 Filed 12–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 40 

[Docket No. RM10–8–000] 

Electric Reliability Organization 

Interpretations of Interconnection 

Reliability Operations and 

Coordination and Transmission 

Operations Reliability Standards 

Issued December 16, 2010. 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: Under section 215 of the 

Federal Power Act (FPA), the Federal 

Energy Regulatory Commission 

(Commission) proposes to approve the 

North American Electric Reliability 

Corporation’s (NERC) proposed 

interpretation of certain specific 

requirements of the Commissionapproved Reliability Standards, TOP– 

005–1, Operational Reliability 

Information, and IRO–005–1, Reliability 

Coordination—Current-Day Operations. 

Specifically, the interpretation 

addresses whether a Special Protection 

System (or SPS) that is operating with 

only one communication channel in 

service is ‘‘degraded’’ under these 

standards. The Commission proposes to 

approve the interpretation, discussed 

below, as being consistent with and not 

expanding or changing the existing 

Reliability Standards. However, to 

address Commission concerns that the 

interpretation fails to specify that a 

Special Protection System that has lost 

a communication channel be reported, 

the Commission also proposes to direct 

NERC pursuant to section 215 (d)(5) of 

the FPA to develop modifications to the 

TOP–005–1 and IRO–005–1 Reliability 

Standards, as discussed below, through 

its Reliability Standards development 

process. The Commission seeks 

comments on its proposal. 

DATES: Comments are due February 7, 

2011. 

ADDRESSES: You may submit comments, 

identified by docket number and in 

accordance with the requirements 

posted on the Commission’s Web site, 

http://www.ferc.gov. Comments may be 

submitted by any of the following 

methods: 

• Agency Web Site: Documents 

created electronically using word 

processing software should be filed in 

native applications or print-to-PDF 

format, and not in a scanned format, at 


srobinson on DSKHWCL6B1PROD with PROPOSALS
80392 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 

1The Commission is not proposing any new or 

modified text to its regulations. As provided in 18 

CFR Part 40, proposed Reliability Standards will 

not become effective until approved by the 

Commission, and the ERO must post on its Web site 

each effective Reliability Standard. The proposed 

interpretations would assist entities in complying 

with the Reliability Standards. 

2See 16 U.S.C. 824o(e)(3). 

3Rules 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, order on reh’g, Order No. 

672–A, FERC Stats. & Regs. ¶ 31,212 (2006). 

4North American Electric Reliability Corp., 116 

FERC ¶ 61,062, order on reh’g & compliance, 117 

FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc. 

v. FERC, 564 F.3d 1342 (DC Cir. 2009). 

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

¶ 31,242, order on reh’g, Order No. 693–A, 120 

FERC ¶ 61,053 (2007). 

6 16 U.S.C. 824o(d)(5). Section 215(d)(5) provides, 

‘‘The Commission * * * may order the Electric 

Reliability Organization to submit to the 

Commission a proposed reliability standard or a 

modification to a reliability standard that addresses 

a specific matter if the Commission considers such 

a new or modified reliability standard appropriate 

to carry out this section.’’ 

7Order No. 693, FERC Stats. & Regs. ¶ 31,242 at 

P 945. 

8 Id. P 951. 

9 Id. P 1648 (directing revisions to TOP–005–1, 

Attachment 1). The Commission proposed to accept 

a new version of the Operational Reliability 

Information Reliability Standard, TOP–005–2, in 

Mandatory Reliability Standards for 

Interconnection Reliability Operating Limits, NOPR, 

Docket No. RM10–15–000, 75 FR 71613 (Nov. 24, 

2010), 133 FERC ¶ 61,151, at P 65 (2010) 

(requesting comment whether the list of minimum 

electric system reliability data in TOP–005–1, 

Attachment 1 is beneficial for reliability 

coordinators to meet the requirements of IRO–008– 

1 and IRO–009–1). 

10The Order No. 693 directive to add the 

operational status of Special Protection Systems 

and power system stabilizers to the types of 

information to be provided under TOP–005–1 

remains outstanding. 

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

¶ 31,242, at P 1520, 1528, et seq. (2007) (declining 

to approve or remand certain Special Protection 

Systems-related Reliability Standards, including 

PRC–012–0, Special Protection System Review 

Procedure; PRC–013–0, Special Protection System 

Database; PRC–014–0, Special Protection System 

Assessment). The Commission used the term fill-inthe-blank standards to refer to proposed standards 

that required the regional reliability organizations 

to develop at a later date criteria for use by users, 

owners or operators within each region. 

http://www.ferc.gov/docs-filing/efiling.

asp. 

• Mail/Hand Delivery: Commenters 

unable to file comments electronically 

must mail or hand deliver an original 

copy of their comments to: Federal 

Energy Regulatory Commission, 

Secretary of the Commission, 888 First 

Street, NE., Washington, DC 20426. 

These requirements can be found on the 

Commission’s Web site; see, e.g., the 

‘‘Quick Reference Guide for Paper 

Submissions,’’ available at http://www.

ferc.gov/docs-filing/efiling.asp or via 

phone from FERC Online Support at 

202–502–6652 or toll-free at 1–866– 

208–3676. 

FOR FURTHER INFORMATION CONTACT: 

Danny Johnson (Technical Information), 

Office of Electric Reliability, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426, Telephone: (202) 502–8892, 

danny.johnson@ferc.gov; 

Richard M. Wartchow (Legal 

Information), Office of the General 

Counsel, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, Telephone: 

(202) 502–8744. 

SUPPLEMENTARY INFORMATION: 1. Under 

section 215 of the Federal Power Act 

(FPA), the Federal Energy Regulatory 

Commission (Commission) proposes to 

approve the North American Electric 

Reliability Corporation’s (NERC) 

proposed interpretation of certain 

specific requirements of the 

Commission-approved Reliability 

Standards, TOP–005–1, Operational 

Reliability Information, and IRO–005–1, 

Reliability Coordination—Current-Day 

Operations.1 Specifically, the 

interpretation addresses whether a 

Special Protection System (or SPS) that 

is operating with only one 

communication channel in service is 

‘‘degraded’’ under these standards. The 

Commission proposes to approve the 

interpretation, discussed below, as 

being consistent with and not 

expanding or changing the existing 

Reliability Standards. However, to 

address Commission concerns that the 

interpretation fails to specify that a 

Special Protection System that has lost 

a communication channel be reported, 

the Commission also proposes to direct 

NERC pursuant to section 215(d)(5) of 

the FPA to develop modifications to the 

TOP–005–1 and IRO–005–1 Reliability 

Standards, as discussed below, through 

its Reliability Standards development 

process. The Commission seeks 

comments on its proposal. 

I. Background 

A. FPA Section 215 and Mandatory 

Reliability Standards 

2. Section 215 of the FPA requires a 

Commission-certified Electric 

Reliability Organization (ERO) to 

develop mandatory and enforceable 

Reliability Standards, which are subject 

to Commission review and approval. 

Once approved, the Reliability 

Standards may be enforced by the ERO, 

subject to Commission oversight, or by 

the Commission independently.2

3. Pursuant to section 215 of the FPA, 

the Commission established a process to 

select and certify an ERO 3 and, 

subsequently, certified NERC as the 

ERO.4 On April 4, 2006, as modified on 

August 28, 2006, NERC submitted to the 

Commission a petition seeking approval 

of 107 proposed Reliability Standards. 

On March 16, 2007, the Commission 

issued a Final Rule, Order No. 693, 

approving 83 of these 107 Reliability 

Standards and directing other action 

related to these Reliability Standards.5

In addition, pursuant to section 

215(d)(5) of the FPA, the Commission 

directed NERC to develop modifications 

to 56 of the 83 approved Reliability 

Standards.6

4. In Order No. 693, the Commission 

approved the previous versions of the 

IRO–005–1 7 and TOP–005–1 Reliability 

Standards, directing NERC to develop 

modifications to the standards. For IRO– 

005–1, the Commission directed NERC 

to develop modifications to the standard 

in order to include Measures and Levels 

of Non-Compliance specific to 

interconnection reliability operating 

limit (IROL) violations during normal 

and contingency conditions.8 For TOP– 

005–1, the Commission directed NERC 

to develop a modification to include the 

operational status of Special Protection 

Systems and power system stabilizers in 

the types of information that 

transmission operators are expected to 

share, unless otherwise agreed.9 NERC 

reports that its interpretation was 

originally developed based on a review 

of version IRO–005–1 of the Reliability 

Coordination—Current-Day Operations 

Reliability Standard. According to 

NERC, the intervening changes resulting 

in the current versions are not material 

to the substance of the interpretation.10

Therefore, although our discussion of 

the interpretation will refer for 

convenience to the IRO–005–1 and 

TOP–005–1 versions of the Reliability 

Standards, the discussion in this NOPR 

is intended to apply equally to 

subsequent versions of the standards. 

5. Also in Order No. 693, the 

Commission declined to approve 

standards addressing Special Protection 

System design, operation, and 

coordination, finding them to be ‘‘fill in 

the blank’’ standards.11 Such fill-in-theblank standards would require the 

regional reliability organizations to 

develop criteria for use by users, owners 

or operators within each region. In 

Order No. 693, the Commission required 

NERC to submit supplemental 

information for the fill-in-the-blank 

standards, including standards for 

Special Protection System design, and 

found that absent such information the 

Commission was not in a position to 


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Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 80393 

12 In the Western Interconnection, a Special 

Protection System is called a ‘‘Remedial Action 

Scheme.’’ 

13NERC System Protection and Control 

Subcommittee (SPCS), November 18, 2008 white 

paper on Protection System Reliability, Redundancy 

of Protection System Elements available at http:// 

www.nerc.com/filez/spctf.html (posted Jan. 14, 

2009). 

14NERC Regional Reliability Standards Working 

Group, Notes on October 29, 2009 meeting, 

available at http://www.nerc.com/filez/rrswg.html. 

15NERC Rules of Procedure, Appendix 3A, 

Reliability Standards Development Procedure, 

Version 6.1, at 26–27 (2007). 

16Order No. 693, FERC Stats. & Regs. ¶ 31,242 at 

P 1642. 

17The NERC Petition provides a copy of 

Manitoba Hydro’s November 28, 2008 request for 

interpretation as Exhibit A. 

approve or remand those Reliability 

Standards. 

6. The NERC glossary provides 

definitions of terms used in the 

Reliability Standards and defines a 

‘‘Special Protection System’’ (or SPS) as: 

An automatic protection scheme designed 

to detect abnormal or predetermined system 

conditions and take corrective actions other 

than and/or in addition to the isolation of 

faulted component to maintain system 

reliability. Such action may include changes 

in demand, generation (MW and MVAR), or 

system configuration to maintain system 

stability, acceptable voltage or power flows.12

7. Special Protection Systems 

generally are used to address system 

reliability vulnerabilities in lieu of 

installing more costly additional BulkPower System facilities. For instance, a 

Special Protection System may be used 

to control generator output to limit line 

loading after a contingency, or a Special 

Protection System may rely on predetermined operational protocols to 

reconfigure the system in response to 

identified system conditions to prevent 

system instability or cascading outages, 

and protect other facilities in response 

to transmission outages. 

8. Since Order No. 693 was issued, 

NERC has produced a white paper 

providing background for its Protection 

System Reliability Standards 

development effort.13 After this 

standards development effort was 

initiated, the NERC Regional Reliability 

Standards Working Group identified the 

Special Protection System standard as 

one that required regional standard 

development.14 The Commission 

understands that the regional standard 

development efforts are currently 

ongoing. 

9. NERC’s Rules of Procedure provide 

that a person that is ‘‘directly and 

materially affected’’ by Bulk-Power 

System reliability may request an 

interpretation of a Reliability 

Standard.15 The ERO’s ‘‘standards 

process manager’’ will assemble a team 

with relevant expertise to address the 

requested interpretation and also form a 

ballot pool. NERC’s Rules provide that, 

within 45 days, the team will draft an 

interpretation of the Reliability 

Standard, with subsequent balloting. If 

approved by ballot, the interpretation is 

appended to the Reliability Standard 

and filed with the applicable regulatory 

authority for regulatory approval. 

B. Reliability Standards and 

Interpretation Request 

1. Reliability Standard IRO–005–1 

10. Reliability Standard IRO–005–1 

applies to transmission operators, 

balancing authorities, reliability 

coordinators and purchasing selling 

entities. The IRO–005–1 Purpose 

statement provides: ‘‘The Reliability 

Coordinator must be continuously 

aware of conditions within its 

Reliability Coordinator Area and 

include this information in its reliability 

assessments. The Reliability 

Coordinator must monitor Bulk Electric 

System parameters that may have 

significant impacts upon the Reliability 

Coordinator Area and neighboring 

Reliability Coordinator Areas.’’ 

Requirement R12 of Reliability Standard 

IRO–005–1 requires the transmission 

operator to immediately notify the 

reliability coordinator of the status of 

certain Special Protections Systems, 

whenever those Special Protection 

Systems are armed, including any 

degradation or potential failure to 

operate as expected. Requirement R12 

provides: 

Whenever a Special Protection System that 

may have an inter-Balancing Authority, or 

inter-Transmission Operator impact (e.g., 

could potentially affect transmission flows 

resulting in a SOL or IROL violation) is 

armed, the Reliability Coordinator shall be 

aware of the impact of the operation of that 

Special Protection System on inter-area 

flows. The Transmission Operator shall 

immediately inform the Reliability 

Coordinator of the status of the Special 

Protection System including any degradation 

or potential failure to operate as expected. 

2. Reliability Standard TOP–005–1 

11. Reliability Standard TOP–005–1 

applies to transmission operators, 

balancing authorities, reliability 

coordinators and purchasing selling 

entities, and has the stated purpose of 

ensuring that reliability entities have the 

operating data needed to monitor 

system conditions within their areas.16

12. Requirement R3 of Reliability 

Standard TOP–005–1 requires each 

balancing authority and transmission 

operator to provide its neighboring 

balancing authorities and transmission 

operators with operating data to allow 

them to perform operational reliability 

assessments and to coordinate reliable 

operations. Included in the types of data 

to be reported are ‘‘New or degraded 

special protection systems.’’ TOP–005– 

1, Requirement R3 provides: 

Upon request, each Balancing Authority 

and Transmission Operator shall provide to 

other Balancing Authorities and 

Transmission Operators with immediate 

responsibility for operational reliability, the 

operating data that are necessary to allow 

these Balancing Authorities and 

Transmission Operators to perform 

operational reliability assessments and to 

coordinate reliable operations. Balancing 

Authorities and Transmission Operators shall 

provide the types of data as listed in 

Attachment 1–TOP–005–0 ‘‘Electric System 

Reliability Data,’’ unless otherwise agreed to 

by the Balancing Authorities and 

Transmission Operators with immediate 

responsibility for operational reliability. 

3. Manitoba Hydro Interpretation 

Request 

13. Manitoba Hydro requested 

clarification from NERC of the meaning 

of the term ‘‘degraded/degradation’’ as 

used in NERC Reliability Standards 

TOP–005–1 and IRO–005–1.17

Specifically, Manitoba Hydro asked 

whether a Special Protection System 

that is operating with only one 

communication channel in service 

would be considered ‘‘degraded’’ for the 

purposes of these standards. Manitoba 

Hydro stated: 

Unlike other facilities, Special Protection 

Systems are required by NERC standards to 

be designed with redundant communication 

channels, so that if one communication 

channel fails the SPS is able to remain in 

operation. Requirement R1.3 of NERC 

Standard PRC–012–0 requires a Regional 

Reliability Organization with Transmission 

Owners that use SPSs to have a documented 

review procedure to ensure that SPSs comply 

with reliability standards and criteria, 

including: ‘‘Requirements to demonstrate that 

the SPS shall be designed so that a single SPS 

component failure, when the SPS was 

intended to operate, does not prevent the 

interconnected transmission system from 

meeting the performance requirements in 

TPL–001–0, TPL–002–0 and TPL–003–0.’’ 

Accordingly, SPSs are designed to continue 

to perform their function with only one 

communication channel in service. 

14. According to Manitoba Hydro, a 

Special Protection System should not be 

considered ‘‘degraded’’ if it is operating 

with one communication channel out of 

service. Manitoba Hydro supported its 

position as consistent with the Institute 

of Electrical and Electronics Engineers, 

Inc. (IEEE) definition of degraded as ‘‘the 

inability of an item to perform its 


srobinson on DSKHWCL6B1PROD with PROPOSALS
80394 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 

18Manitoba Hydro’s request for interpretation at 

4–5 (citing full IEEE definitions of degraded: ‘‘A 

failure that is gradual, or partial or both; for 

example, the equipment degrades to a level that, in 

effect, is a termination of the ability to perform its 

required function,’’ and failure (Reliability): ‘‘The 

termination of the ability of an item to perform its 

required function.’’ IEEE 100, The Authoritative 

Dictionary of IEEE Standards Terms (7th ed.) 

(2000)). 

19According to Manitoba Hydro, PRC–012–0, 

Requirement R1.3 requires a Special Protection 

System to be designed so that, when the Special 

Protection System is intended to operate, a single 

component failure does not prevent the 

interconnected transmission system from meeting 

the performance requirements in TPL–001–0, TPL– 

002–0 and TPL–003–0. In Order No. 693, the 

Commission did not approve PRC–012–0, finding 

that was a fill-in-the-blank standard and lacked 

regional review procedures for Special Protection 

Systems. 

20NERC Reliability Standards Development 

Procedure at 26–27. 

21NERC Petition, Exhibit B at 5 (proposing text 

of interpretation as Appendix 1 to IRO–005–1 and 

TOP–005–1). 

22 Id. Exhibit B at 6. 

23NERC Petition at 5. 

required function.’’ 18 Manitoba Hydro 

cites NERC Reliability Standard PRC– 

012–0, Requirement R1.3 and asserts 

that Special Protection Systems are 

designed to continue to perform their 

function with only one communication 

channel in service.19 Manitoba Hydro 

cites the NERC glossary as defining the 

function of a Special Protection System 

‘‘to detect abnormal or predetermined 

system conditions, and take corrective 

actions other than and/or in addition to 

the isolation of faulted components to 

maintain system reliability.’’ Manitoba 

Hydro concludes that a Special 

Protection System with one 

communication channel out of service 

can still fully perform its function and, 

therefore, that a Special Protection 

System with one communication 

channel out of service is not degraded. 

C. NERC Petition 

15. NERC submitted its Petition for 

Approval of Interpretations to 

Reliability Standard TOP–005–1— 

Operational Reliability Information and 

Reliability Standard IRO–005–1— 

Reliability Coordination—Current Day 

Operations (Petition) on November 24, 

2009, seeking Commission approval of 

the interpretations referenced in the title 

of its pleading. 

16. Consistent with the NERC Rules of 

Procedure, NERC assembled a team to 

respond to the requests for 

interpretation and presented the 

proposed interpretations to industry 

ballot, using a process similar to the 

process it uses for the development of 

Reliability Standards.20 According to 

NERC, the interpretations were 

developed and approved by industry 

stakeholders using the NERC Reliability 

Standards Development Procedure and 

approved by the NERC Board of 

Trustees (Board). 

17. In response to Manitoba Hydro’s 

interpretation request, NERC provided 

the following: 

TOP–005–1 does not provide, nor does it 

require, a definition for the term ‘‘degraded.’’ 

The IRO–005–1 ([Requirement] R12) 

standard implies that degraded is a condition 

that will result in a failure of an SPS to 

operate as designed. If the loss of a 

communication channel will result in the 

failure of an SPS to operate as designed, then 

the Transmission Operator would be 

mandated to report that information. On the 

other hand, if the loss of a communication 

channel will not result in the failure of the 

SPS to operate as designed, then such a 

condition can be, but is not mandated to be, 

reported. 

18. Also, in a background description 

of the interpretation, NERC affirms that 

transmission operators are required to 

provide information such as that listed 

in the examples upon request, ‘‘whether 

or not [a facility] is or is not in some 

undefined ‘degraded’ state.’’ 21

19. In addition, the background 

section accompanying the interpretation 

emphasizes that the information to be 

provided under IRO–005–1 relates to 

events that may have a significant 

impact on the system, especially where 

operating limits are or may be exceeded. 

Specifically it states: 

IRO–005–1 mandates that each Reliability 

Coordinator monitor predefined base 

conditions (Requirement R1), collect 

additional data when operating limits are or 

may be exceeded (Requirement R3), and 

identify actual or potential threats 

(Requirement R5). The basis for that request 

is left to each Reliability Coordinator. The 

Purpose statement of IRO–005–1 focuses on 

the Reliability Coordinator’s obligation to be 

aware of conditions that may have a 

‘‘significant’’ impact upon its area and to 

communicate that information to others 

(Requirements R7 and R9). Please note: it is 

from this communication that Transmission 

Operators and Balancing Authorities would 

either obtain or would know to ask for 

[Special Protection System] information from 

another Transmission Operator.22

20. In addition, the NERC Petition 

states: 

The NERC Board of Trustees, in approving 

these interpretations, did so using a standard 

of strict construction that does not expand 

the reach of the standard or correct a 

perceived gap or deficiency in the standard. 

However, the NERC Board of Trustees 

recommended that any gaps or deficiencies 

in a Reliability Standard that are evident 

through the interpretation process be 

addressed promptly by the standard drafting 

team.23

21. NERC reports that it will examine 

any gaps or deficiencies in Reliability 

Standards TOP–005–1 and IRO–005–2 

when it develops the next version of 

these standards through the Reliability 

Standards development process. 

22. According to NERC, the 

interpretations do not modify the 

language contained in the requirements 

under review. NERC states that the 

interpretations do not represent new or 

modified Reliability Standard 

requirements and will provide 

instruction and guidance of the intent 

and application of the requirements. 

NERC requests that the Commission 

approve the interpretations and make 

them effective immediately after 

approval, consistent with the 

Commission’s procedures. 

II. Proposed Determination 

23. We propose to approve NERC’s 

interpretation of Reliability Standards 

IRO–005–1, Requirement R12, and 

TOP–005–1, Requirement R3. We 

believe that the ERO has presented a 

reasonable interpretation that is not 

inconsistent with the language of the 

Reliability Standards. However, we are 

concerned that the interpretation 

highlights a potential gap in reliability. 

While not required by the Reliability 

Standards as interpreted by the ERO, we 

are concerned that a Special Protection 

System that has lost a communication 

channel could compromise system 

reliability, for the reasons explained 

below. Accordingly, pursuant to section 

215 (d)(5) of the FPA, we propose to 

direct that the ERO develop 

modifications to the Reliability 

Standards to address our concern. 

Specifically, we propose to direct the 

ERO to develop modifications to IRO– 

005–1, Requirement R12, and TOP–005– 

1, Requirement R3. 

A. Discussion 

24. The Commission proposes to 

approve the interpretation. We agree 

with the ERO that the failure of a 

Special Protection System to operate as 

designed is, for the purpose of Reliable 

Operation, degraded and reportable 

under Reliability Standards IRO–005–1, 

Requirement R12 and TOP–005–1, 

Requirement R3. The Commission is 

concerned, however, that this 

interpretation may create a reliability 

gap concerning the reporting 

requirements for a Special Protection 

System that is able to operate as 

designed but still poses a reliability risk 

to Bulk-Power System with the loss of 

a single communication channel with 

redundant design. 

25. In its November 18, 2008 white 

paper, ‘‘Protection System Reliability, 


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 80395 

24NERC SPCS white paper at 9, available at 

http://www.nerc.com/filez/spctf.html (dated Jan. 14, 

2009). 

25 Id.; see also Table 4–3 in the white paper 

noting possible responses to communication 

channel failure including adding a redundant 

channel or performing testing to ensure that 

delayed fault clearing does not violate the planning 

standards. 

26We note proposed NERC Reliability Standard 

PRC–012–0, Requirement R1.3 establishes a 

performance requirement for Special Protection 

Systems. Proposed Requirement R1.3 states: 

‘‘Requirements to demonstrate that the SPS shall be 

designed so that single SPS component failure, 

when the SPS was intended to operate, does not 

prevent the interconnected transmission system 

from meeting the performance requirements defined 

in Reliability Standards TPL–001–0, TPL–002–0, 

and TPL–003–0.’’ Proposed reliability standard 

PRC–012–0 has not yet been approved as 

mandatory and enforceable by the Commission. 27 5 CFR 1320.11. 

28 44 U.S.C. 3507(d). 

29See Order No. 693, FERC Stats. & Regs. 

¶ 31,242 at P 1901–1907. 

Redundancy of Protection System 

Elements,’’ the NERC System Protection 

and Control Subcommittee (SPCS) 

explained that ‘‘[r]edundancy means 

that two or more functionally equivalent 

Protection Systems are used to protect 

each electric system element.’’ 24 The 

SPCS also explained in its white paper 

that ‘‘[a] fundamental concept of 

redundancy is that Protection Systems 

need to be designed such that electric 

system faults will be cleared, even if a 

component of the Protection System 

fails.’’ 25 In accordance with the analysis 

provided in the SPCS white paper, 

redundancy of Protection System 

components is neither unnecessary nor 

superfluous. Rather, redundancy is 

necessary to ensure that no single point 

of failure of a Protection System 

component results in the inability of the 

Bulk-Power System to meet the system 

performance requirements established 

in the TPL Reliability Standards.26 In 

other words, redundant communication 

channels are a means to provide for the 

reliable operation of the Special 

Protection System. Should a 

communication channel fail at the time 

the Special Protection System is 

required to operate, the designed 

redundancy of the Special Protection 

System ensures that the Bulk-Power 

System can meet its reliability 

performance requirements. 

26. Our concern is that, given NERC’s 

proposed interpretation, a loss of a 

communication channel, a necessary 

and inherent performance requirement 

of a Special Protection System, may not 

be considered a reportable event under 

the current reporting requirements. 

Because Special Protection Systems are 

by their nature used to address system 

reliability vulnerabilities to prevent 

system instability, cascading outages, 

and protect other facilities in response 

to contingencies, a failure of the 

remaining communication component 

of a Special Protection System creates a 

reliability risk to the Bulk-Power 

System. This means that where one 

communication channel has failed, the 

Special Protection System may not be 

able to meet the performance criteria of 

the Reliability Standards and in 

particular the performance criteria 

specified in the Transmission Planning 

(TPL) standards. In such a situation, the 

Special Protection System, though 

capable of operating as designed 

following the loss of one 

communication channel, may not be 

able to withstand a second component 

failure. It is our view that such a Special 

Protection System would be operating at 

some state less than the normal secure 

state and should need to be reported to 

the appropriate reliability entities in 

order for these reliability entities to 

accurately assess operational reliability. 

B. Commission Proposal 

27. For the reasons stated above, the 

Commission proposes to direct the ERO 

to develop modification to Reliability 

Standards IRO–005–2 and TOP–005–1.1 

through its standards development 

process. The ERO’s revision would 

address the potential reliability gap 

discussed above to ensure that a 

component failure, wherein a Special 

Protection System may not be able to 

perform as designed to ensure required 

Bulk-Power System performance, is 

reported to the appropriate reliability 

entities. Accordingly, pursuant to 

section 215 (d)(5) of the FPA, we 

propose to direct NERC to develop 

modifications to the Reliability 

Standards to address our concern. 

Specifically, we propose to direct NERC 

to develop modifications to Reliability 

Standards IRO–005–2 and TOP–005–1.1 

to address the potential reliability gap 

discussed above to ensure that a 

component failure, wherein a Special 

Protection System may not be able to 

perform as designed to ensure required 

Bulk-Power System performance, is 

reported to the appropriate reliability 

entities. We seek comment on this 

proposal. In particular, we seek 

comment from reliability coordinators 

and transmission operators whether this 

information would be useful in the 

operation and coordination of the 

transmission system. 

III. Information Collection Statement 

28. The Office of Management and 

Budget (OMB) regulations require that 

OMB approve certain reporting and 

recordkeeping (collections of 

information) imposed by an agency.27

The information contained here is also 

subject to review under section 3507(d) 

of the Paperwork Reduction Act of 

1995.28

29. As stated above, the Commission 

previously approved, in Order No. 693, 

materially similar versions of each of 

the Reliability Standards that are the 

subject of the current rulemaking. This 

NOPR proposes to approve the 

interpretation of these previously 

approved Reliability Standards, which 

was developed by NERC as the ERO. In 

doing so, the Commission proposes 

certain issues to be addressed and 

clarifications to be made. The proposed 

interpretations, as clarified, relate to 

existing Reliability Standards and the 

Commission does not expect them to 

add to or otherwise increase entities’ 

current reporting burden.29

30. For the purposes of reviewing this 

interpretation, the Commission seeks 

information concerning whether the 

interim interpretation as approved will 

cause respondents to alter reporting 

frequencies and potentially impose an 

additional burden. 

31. We will submit this proposed rule 

to OMB for informational purposes. 

Title: Electric Reliability Organization 

Interpretations of Interconnection 

Reliability Operations and Coordination 

and Transmission Operations Reliability 

Standards. 

Action: Proposed Collection. 

OMB Control No.: 1902–0244. 

Respondents: Businesses or other forprofit institutions; not-for-profit 

institutions. 

Frequency of Responses: On 

Occasion. 

Necessity of the Information: This 

proposed rule would approve an 

interpretation of the specific 

requirements of two Commissionapproved Reliability Standards. The 

proposed rule would find the 

interpretation just, reasonable, not 

unduly discriminatory or preferential, 

and in the public interest. 

32. Interested persons may obtain 

information on the reporting 

requirements by contacting the 

following: Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426 [Attention: Ellen 

Brown, Office of the Executive Director, 

Phone: (202) 502–8663, fax: (202) 273– 

0873, e-mail: data.clearance@ferc.gov]. 

33. For submitting comments 

concerning the collection(s) of 

information and the associated burden 

estimate(s), please send your comments 

to the contact listed above and to the 

Office of Information and Regulatory 

Affairs, Office of Management and 


srobinson on DSKHWCL6B1PROD with PROPOSALS
80396 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 

30Regulations Implementing the National 

Environmental Policy Act of 1969, Order No. 486, 

FERC Stats. & Regs. ¶ 30,783 (1987). 

31 18 CFR 380.4(a)(2)(ii). 

32 5 U.S.C. 601–612. 

33 13 CFR 121.101. 

34 13 CFR 121.201, Sector 22, Utilities, & n. 1. 

35To be included in the compliance registry, the 

ERO determines whether a specific small entity has 

a material impact on the Bulk-Power System. If 

these small entities should have such an impact 

then their compliance is justifiable as necessary for 

Bulk-Power System reliability. 

Budget, Washington, DC 20503 

[Attention: Desk Officer for the Federal 

Energy Regulatory Commission, phone 

(202) 395–7345, fax: (202) 395–7285, 

e-mail: oira_submission@omb.eop.gov]. 

IV. Environmental Analysis 

34. The Commission is required to 

prepare an Environmental Assessment 

or an Environmental Impact Statement 

for any action that may have a 

significant adverse effect on the human 

environment.30 The Commission has 

categorically excluded certain actions 

from this requirement as not having a 

significant effect on the human 

environment. Included in the exclusion 

are rules that are clarifying, corrective, 

or procedural or that do not 

substantially change the effect of the 

regulations being amended.31 The 

actions proposed herein fall within this 

categorical exclusion in the 

Commission’s regulations. 

V. Regulatory Flexibility Act 

35. The Regulatory Flexibility Act of 

1980 (RFA) 32 generally requires a 

description and analysis of final rules 

that will have significant economic 

impact on a substantial number of small 

entities. The RFA mandates 

consideration of regulatory alternatives 

that accomplish the stated objectives of 

a proposed rule and that minimize any 

significant economic impact on a 

substantial number of small entities. 

The Small Business Administration’s 

(SBA) Office of Size Standards develops 

the numerical definition of a small 

business.33 The SBA has established a 

size standard for electric utilities, 

stating that a firm is small if, including 

its affiliates, it is primarily engaged in 

the transmission, generation and/or 

distribution of electric energy for sale 

and its total electric output for the 

preceding twelve months did not exceed 

four million megawatt hours.34 The RFA 

is not implicated by this proposed rule 

because the interpretations discussed 

herein will not have a significant 

economic impact on a substantial 

number of small entities. 

36. In Order No. 693, the Commission 

adopted policies to minimize the 

burden on small entities, including 

approving the ERO compliance registry 

process to identify those entities 

responsible for complying with 

mandatory and enforceable Reliability 

Standards. The ERO registers only those 

distribution providers or load serving 

entities that have a peak load of 25 MW 

or greater and are directly connected to 

the bulk electric system or are 

designated as a responsible entity as 

part of a required under-frequency load 

shedding program or a required undervoltage load shedding program. 

Similarly, for generators, the ERO 

registers only individual units of 20 

MVA or greater that are directly 

connected to the bulk electric system, 

generating plants with an aggregate 

rating of 75 MVA or greater, any 

blackstart unit material to a restoration 

plan, or any generator that is material to 

the reliability of the Bulk-Power System. 

Further, the ERO will not register an 

entity that meets the above criteria if it 

has transferred responsibility for 

compliance with mandatory Reliability 

Standards to a joint action agency or 

other organization. The Commission 

estimated that the Reliability Standards 

approved in Order No. 693 would apply 

to approximately 682 small entities 

(excluding entities in Alaska and 

Hawaii), but also pointed out that the 

ERO’s Compliance Registry Criteria 

allow for a joint action agency, 

generation and transmission (G&T) 

cooperative or similar organization to 

accept compliance responsibility on 

behalf of its members. Once these 

organizations register with the ERO, the 

number of small entities registered with 

the ERO will diminish and, thus, 

significantly reduce the impact on small 

entities.35

37. Finally, as noted above, this 

proposed rule addresses an 

interpretation of the IRO–005–1 and 

TOP–005–1 Reliability Standards, 

which were already approved in Order 

No. 693, and, therefore, is not expected 

to create an additional regulatory impact 

on small entities. 

VI. Comment Procedures 

38. The Commission invites interested 

persons to submit comments on the 

matters and issues proposed in this 

notice to be adopted, including any 

related matters or alternative proposals 

that commenters may wish to discuss. 

Comments are due February 7, 2011. 

Comments must refer to Docket No. 

RM10–8–000, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. 

39. The Commission encourages 

comments to be filed electronically via 

the eFiling link on the Commission’s 

Web site at http://www.ferc.gov. The 

Commission accepts most standard 

word processing formats. Documents 

created electronically using word 

processing software should be filed in 

native applications or print-to-PDF 

format and not in a scanned format. 

Commenters filing electronically do not 

need to make a paper filing. 

40. Commenters unable to file 

comments electronically must mail or 

hand deliver an original copy of their 

comments to: Federal Energy Regulatory 

Commission, Secretary of the 

Commission, 888 First Street, NE., 

Washington, DC 20426. 

41. All comments will be placed in 

the Commission’s public files and may 

be viewed, printed, or downloaded 

remotely as described in the Document 

Availability section below. Commenters 

on this proposal are not required to 

serve copies of their comments on other 

commenters. 

VII. Document Availability 

42. In addition to publishing the full 

text of this document in the Federal 

Register, the Commission provides all 

interested persons an opportunity to 

view and/or print the contents of this 

document via the Internet through the 

Commission’s Home Page (http:// 

www.ferc.gov) and in the Commission’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. 

43. From the Commission’s Home 

Page on the Internet, this information is 

available on eLibrary. The full text of 

this document is available on eLibrary 

in PDF and Microsoft Word format for 

viewing, printing, and/or downloading. 

To access this document in eLibrary, 

type the docket number excluding the 

last three digits of this document in the 

docket number field. 

44. User assistance is available for 

eLibrary and the Commission’s Web site 

during normal business hours from 

FERC Online Support at (202) 502–6652 

(toll free at 1–866–208–3676) or 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 direction of the Commission. 

Kimberly D. Bose, 

Secretary. 

[FR Doc. 2010–32074 Filed 12–21–10; 8:45 am] 

BILLING CODE 6717–01–P 


srobinson on DSKHWCL6B1PROD with PROPOSALS