139 FERC ¶ 61,247

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 40

Docket Nos. RM12-6-000 and RM12-7-000

Revisions to Electric Reliability Organization Definition of Bulk Electric System and 

Rules of Procedure

(Issued June 22, 2012)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of Proposed Rulemaking.

SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy 

Regulatory Commission (Commission) proposes to approve a modification to the 

currently-effective definition of “bulk electric system” developed by the North American 

Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability 

Organization. The revised definition of “bulk electric system” removes language 

allowing for regional discretion in the currently-effective bulk electric system definition. 

The revised definition establishes a bright-line threshold that includes all facilities 

operated at or above 100 kV. The modified definition also identifies specific categories 

of facilities and configurations as inclusions and exclusions to provide clarity in the 

definition of “bulk electric system.” 

The Commission also proposes to approve: (1) NERC’s contemporaneously filed 

revisions to its Rules of Procedure, which creates an exception procedure to add elements 

to, or remove elements from, the definition of “bulk electric system” on a case-by-case 
Docket Nos. RM12-6-000 and RM12-7-000 - 2 -

basis; (2) NERC’s proposed form entitled “Detailed Information to Support an Exception 

Request” that entities will use to support requests for exception from the “bulk electric 

system” definition; and (3) NERC’s proposed implementation plan for the revised “bulk 

electric system” definition. 

DATES: Comments are due [INSERT DATE 60 days after publication in the

FEDERAL REGISTER]

ADDRESSES: Comments, identified by docket number, may be filed in the following 

ways:

• Electronic Filing through http://www.ferc.gov. Documents created electronically 

using word processing software should be filed in native applications or print-toPDF format and not in a scanned format.

• Mail/Hand Delivery: Those unable to file electronically may mail or hand-deliver 

comments to: Federal Energy Regulatory Commission, Secretary of the 

Commission, 888 First Street, NE, Washington, DC 20426.

Instructions: For detailed instructions on submitting comments and additional 

information on the rulemaking process, see the Comment Procedures Section of this 

document.

FOR FURTHER INFORMATION CONTACT:

Susan Morris (Technical Information)

Office of Electric Reliability, Division of Reliability Standards 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-6803

Nicholas Snyder (Technical Information)

Office of Electric Reliability, Division of Logistics & Security
Docket Nos. RM12

-6-000 and RM12-7-000 - 3 -

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-6408

Robert Stroh (Legal Information)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE 

Washington, DC 20426

Telephone: (202) 502-8473

William Edwards (Legal Information)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE 

Washington, DC 20426

Telephone: (202) 502-6669

SUPPLEMENTARY INFORMATION:
139 FERC ¶ 61,247

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Revisions to Electric Reliability Organization Definition 

of Bulk Electric System and Rules of Procedure

Docket Nos. RM12-6-000

RM12-7-000

NOTICE OF PROPOSED RULEMAKING

(Issued June 22, 2012)

1. Under section 215 of the Federal Power Act (FPA),

1 the Federal Energy 

Regulatory Commission (Commission) proposes to approve a modification to the 

currently-effective definition of “bulk electric system” contained in NERC’s Glossary of 

Terms Used in Reliability Standards (NERC Glossary) developed by the North American 

Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability 

Organization. NERC submitted its petition in response to the Commission’s directive in 

Order No. 743 that NERC develop a revised definition of “bulk electric system” using 

NERC’s Reliability Standards development process.2

 The revised definition of bulk 

electric system: 

 1 16 U.S.C. § 824o (2006).

2 Revision to Electric Reliability Organization Definition of Bulk Electric System, 

Order No. 743, 133 FERC ¶ 61,150, order on reh’g, Order No. 743-A, 134 FERC 

¶ 61,210 (2011).
Docket Nos. RM12-6-000 and RM12-7-000 - 2 -

(a) removes the basis for regional discretion in the current bulk electric system

definition;

(b) establishes a bright-line threshold so that the “bulk electric system” will be 

facilities operated at 100 kV or higher, if they are Transmission Elements, or 

connected at 100 kV or higher, if they are Real Power or Reactive Power 

resources; and

(c) contains specific inclusions (I1-I5) and exclusions (E1-E4) to provide 

clarity in the definition that the facilities described in these configurations are 

included in or excluded from the “bulk electric system.” 

2. The Commission also proposes to approve:

(a) NERC’s contemporaneously filed revisions to its Rules of Procedure, 

which creates an exception procedure to add elements to, and remove elements 

from the definition of “bulk electric system” on a case-by-case basis; 

(b) NERC’s proposed form entitled “Detailed Information to Support an 

Exception Request” that entities will use to support requests for exceptions from 

the “bulk electric system” definition; and

(c) NERC’s proposed implementation plan for the revised “bulk electric 

system” definition.

3. NERC’s proposed revision to the definition of “bulk electric system” removes 

regional discretion and establishes a 100 kV bright-line threshold. Further, we believe 

that NERC’s proposal offers additional clarity to the definition of bulk electric system by 

creating specific inclusions and exclusions within the definition, which provide 
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granularity with regard to common types of facilities and facility configurations and 

whether they are part of the bulk electric system.

4. We believe that the proposed “core” definition, including the inclusions and the 

exclusions, as well as the exception process should produce consistency in identifying 

bulk electric system elements across the reliability regions. In addition, it appears that 

NERC’s proposed exception process to add elements to, and remove elements from, the 

definition of the bulk electric system adds transparency and uniformity to the process.

5. Although it is rare that the Commission would address Rules of Procedure changes 

in a rulemaking docket, we will do so in this instance because of the interplay between 

NERC’s modified bulk electric system definition and the newly developed case-specific 

exception process set forth in NERC’s proposed Rules of Procedure change. While we

propose to approve NERC’s petitions, we also seek comment from NERC and interested 

parties on certain aspects of NERC’s petitions to understand the application of the 

proposed “core” definition, including the application of the inclusions and exclusions, 

and the proposed exception process to ensure consistent implementation. 

I. Background

A. Section 215 of the FPA

6. Section 215 of the FPA requires a Commission-certified ERO to develop 

mandatory and enforceable Reliability Standards, subject to Commission review and 

approval. Once approved, the Reliability Standards may be enforced by the ERO, subject 
Docket Nos. RM12-6-000 and RM12-7-000 - 4 -

to Commission oversight, or by the Commission independently.3

 The Commission 

established a process to select and certify an ERO4 and, subsequently, certified NERC as 

the ERO.

5

 

B. Order No. 693

7. On March 16, 2007, in Order No. 693, pursuant to section 215(d) of the FPA, the 

Commission approved 83 of 107 proposed Reliability Standards, six of the eight 

proposed regional differences, and the NERC Glossary, which includes NERC’s 

definition of bulk electric system.

6 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.7

 3 See 16 U.S.C. § 824o(e)(3) (2006). 

4 Rules Concerning Certification of the Electric Reliability Organization; and 

Procedures for the Establishment, Approval and Enforcement of Electric Reliability 

Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, order on reh’g, Order 

No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006). 

5 North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on reh’g

and compliance, 117 FERC ¶ 61,126 (2006) (certifying NERC as the ERO responsible 

for the development and enforcement of mandatory Reliability Standards), aff’d sub nom. 

Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).

6 See Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, 

FERC Stats. & Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053 

(2007).

7 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 75 n.47 (quoting NERC’s 

definition of “bulk electric system”).
Docket Nos. RM12-6-000 and RM12-7-000 - 5 -

8. In approving NERC’s definition of bulk electric system, the Commission stated 

that “at least for an initial period, the Commission will rely on the NERC definition of 

bulk electric system and NERC’s registration process to provide as much certainty as 

possible regarding the applicability to and the responsibility of specific entities to comply 

with the Reliability Standards.”8

 The Commission also stated that “[it] remains 

concerned about the need to address the potential for gaps in coverage of facilities.”9

 

C. Order Nos. 743 and 743-A

9. On November 18, 2010, the Commission revisited the definition of “bulk electric 

system” in Order No. 743, which directed NERC, through NERC’s Reliability Standards 

Development Process, to revise its definition of the term “bulk electric system” to ensure 

that the definition encompasses all facilities necessary for operating an interconnected 

transmission network. The Commission also directed NERC to address the 

Commission’s technical and policy concerns. Among the concerns were inconsistency in 

application of the definition and a lack of oversight and exclusion of facilities from the 

bulk electric system that are required for the operation of the interconnected transmission 

network. In Order No. 743, the Commission stated that the best way to address these 

concerns is to eliminate the Regional Entity discretion to define bulk electric system 

 8 Id. P 75; see also Order No. 693-A, 120 FERC ¶ 61,053 at P 19 (“the 

Commission will continue to rely on NERC’s definition of bulk electric system, with the 

appropriate regional differences, and the registration process until the Commission 

determines in future proceedings the extent of the Bulk-Power System”).

9 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 77 (footnotes omitted).
Docket Nos. RM12-6-000 and RM12-7-000 - 6 -

without NERC or Commission review, maintain a bright-line threshold that includes all 

facilities operated at or above 100 kV except defined radial facilities, and adopt an 

exemption process and criteria for removing from the bulk electric system facilities that 

are not necessary for operating the interconnected transmission network.10 However, 

Order No. 743 did not require NERC to adopt these recommendations as the sole means 

to address the Commission’s concerns. Instead, the Commission allowed NERC to 

“propose a different solution that is as effective as, or superior to, the Commission’s 

proposed 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.”11 The 

Commission directed NERC to file the revised definition of bulk electric system and its 

process to exempt facilities from inclusion in the bulk electric system within one year 

following the effective date of the final rule.

12 

10. In Order No. 743-A the Commission reaffirmed its determinations in Order 

No. 743. In addition, the Commission clarified that the issue the Commission directed 

NERC to rectify was the discretion the Regional Entities have under the current 

definition to define the bulk electric system in their regions without any oversight from 

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

11 Id.

12 Id. P 113.
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the Commission or NERC.

13 The Commission also clarified that it was not the 

Commission’s intent through its determination regarding “impact-based methodologies”

to disrupt the NERC Rules of Procedure or the Statement of Compliance Registry 

Criteria (Registry Criteria).

14 Nor did the Commission intend to rule out using any form 

of a material impact test that can be shown to identify facilities needed for reliable 

operation.15 The Commission also clarified that the 100 kV threshold was a “first step or 

proxy” for determining which facilities should be included in the bulk electric system.16 

11. The Commission further clarified 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” was intended to grant discretion to 

NERC, 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.17 The Commission stated that the “seven factor test”

adopted in Order No. 888 could be relevant and possibly is a logical starting point for 

determining which facilities are local distribution for reliability purposes.

18 However, the 

 13 Order No. 743-A, 134 FERC ¶ 61,210 at P 11.

14 Id. P 47.

15 Id.

16 See Order No. 743-A, 134 FERC ¶ 61,210 at PP 40, 67, 102-103.

17 Id. P 68.

18 Id. P 69.
Docket Nos. RM12-6-000 and RM12-7-000 - 8 -

Commission left it to NERC in the first instance to determine if and how the seven factor 

test should be considered in differentiating between local distribution and transmission 

facilities for purposes of determining whether a facility should be classified as part of the 

bulk electric system.

19 Order No. 743-A re-emphasized that local distribution facilities 

are excluded from the definition of Bulk-Power System and, therefore, must be excluded 

from the definition of bulk electric system.20 

D. NERC’s Petitions

12. On January 25, 2012, NERC submitted two petitions pursuant to the directives in

Order No. 743: (1) NERC’s proposed revision to the definition of “bulk electric system”

which includes provisions to include and exclude facilities from the “core” definition and 

(2) revisions to NERC’s Rules of Procedure to add a procedure creating an exception 

process to classify or de-classify a facility as part of the “bulk electric system.” In this 

NOPR, we address both petitions.

21 

 19 Id. P 70.

20 Id. PP 25, 58.

21 “Exclusion” refers to configurations of elements NERC has identified within the 

revised definition of bulk electric system that should not be included in the bulk electric 

system. In contrast, an “exception” refers to an element that falls within the bulk electric 

system definition but is found not to be necessary for the operation of the grid through the 

proposed exception process, or an element that an element that falls outside of the bulk 

electric system definition but is found through the exception process should be part of the

bulk electric system. Thus, an “exception” may result in adding elements to, or removing 

elements from, the definition of bulk electric system. Also, NERC uses the term 

“exception” rather than the term “exemption” used in Order No. 743. See Order No. 743, 

133 FERC ¶ 61,150 at P 115.
Docket Nos. RM12-6-000 and RM12-7-000 - 9 -

1. Revised Definition of Bulk Electric System 

13. In Docket No. RM12-06-000, NERC filed a petition requesting Commission 

approval of a revised definition of “bulk electric system” in the NERC Glossary (NERC 

BES Petition). As explained below, the definition consists of a “core” definition and a 

list of facilities configurations that will be included or excluded from the “core” 

definition. NERC also requests approval of the proposed “Detailed Information to 

Support an Exception Request” form as satisfying the requirement in Order No. 743 that 

NERC develop “technical criteria” to address exception requests.

22 Finally, NERC 

requests Commission approval of its plan for implementation of the revised definition of 

“bulk electric system.”

a. “Core” Definition of Bulk Electric System

14. NERC proposes the following “core” definition of bulk electric system:

Unless modified by the [inclusion and exclusion] lists shown below, all 

Transmission Elements operated at 100 kV or higher and Real Power and 

Reactive Power resources connected at 100 kV or higher. This does not 

include facilities used in the local distribution of electric energy.23

15. NERC states that the core definition eliminates regional discretion and establishes 

a clear, bright-line based on a 100 kV threshold. NERC states that the core definition 

 22 The Detailed Information to Support an Exception Request is part of the 

exception process even though NERC filed it as part of the BES Petition. See NERC 

BES Petition at 25-26. Thus, the Commission will address the Detailed Information in 

the context of the NERC BES Petition rather than in the section of this NOPR addressing 

the exception procedure petition. 

23 Id. at 13.
Docket Nos. RM12-6-000 and RM12-7-000 - 10 -

places within the bulk electric system “all Transmission Elements operated at 100 kV or 

above, and all Real Power and Reactive Power resources connected at 100 kV or above,”

while establishing an express exclusion for facilities used in the local distribution of 

electrical energy.24 NERC states that the revised definition deletes the phrase “[a]s 

defined by the Regional Reliability Organization” that is included in the current 

definition, eliminating the express basis for regional discretion.

25 NERC explains that the 

core definition includes the 100 kV criterion as a bright-line threshold, rather than as a 

general guideline, by eliminating the phrase “generally operated at” found in the current 

definition.26 

16. NERC also explains that, while the current definition includes the phrase

“associated equipment,” and the revised definition does not, “associated equipment” is 

included in the revised definition by the use of the term “Transmission Elements”

included in the revised core definition. NERC states that the NERC Glossary defines

“Transmission” as “[a]n interconnected group of lines and associated equipment for the

movement or transfer of electric energy between points of supply and points at which it is

transformed for delivery to customers or is delivered to other electric systems;”27 and 

 24 Id. at 16. The current definition and Order No. 743 use the term “facility.” 

NERC proposes to use the term “Element” as used in the NERC Glossary. 

25 Id. at 15.

26 Id. at 16.

27 Id. at 15 n.13.
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defines “Elements” as, “[a]ny electrical device with terminals that may be connected to 

other electrical devices such as a generator, transformer, circuit breaker, bus section, or 

transmission line. An element may be comprised of one or more components.”28 

17. NERC states that the revised definition satisfies the Commission’s directives and 

addresses the technical and policy concerns expressed in Order Nos. 743 and 743-A. 

According to NERC, the explicit basis of authority for Regional Entity discretion in the 

current definition is eliminated. In addition, NERC states that the core definition 

establishes specific threshold criteria rather than general guidelines of facilities operated 

or connected at or above 100 kV. Further, NERC states that the core definition in 

combination with the specific inclusions and exclusions provides a detailed set of criteria 

that can be applied on a uniform, consistent basis across all regions, eliminates 

ambiguity, and eliminates the potential for discretion and subjectivity in determining 

what facilities are part of or not part of the bulk electric system. 

b. Inclusions and Exclusions to the Definition of Bulk 

 Electric System

18. NERC states that, as part of the revised definition, NERC developed inclusions 

and exclusions to eliminate discretion in application of the revised “bulk electric system” 

definition. NERC states that the inclusions address five specific facilities configurations 

to provide clarity that the facilities described in these configurations are included in the 

 28 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 12 -

bulk electric system (unless the facilities are excluded based on one of the specific 

exclusions).

29 The five inclusions are: 

Inclusions:

I1 - Transformers with the primary terminal and at least one 

secondary terminal operated at 100 kV or higher unless excluded under 

Exclusion E1 or E3. 

I2 - Generating resource(s) with gross individual nameplate rating 

greater than 20 MVA or gross plant/facility aggregate nameplate rating 

greater than 75 MVA including the generator terminals through the highside of the step-up transformer(s) connected at a voltage of 100 kV or 

above.

I3 - Blackstart Resources identified in the Transmission Operator’s 

restoration plan.

I4 - Dispersed power producing resources with aggregate capacity 

greater than 75 MVA (gross aggregate nameplate rating) utilizing a system 

designed primarily for aggregating capacity, connected at a common point 

at a voltage of 100 kV or above.

I5 - Static or dynamic devices (excluding generators) dedicated to 

supplying or absorbing Reactive Power that are connected at 100 kV or 

higher, or through a dedicated transformer with a high-side voltage of 

100 kV or higher, or through a transformer that is designated in 

Inclusion I1.

19. NERC explains that the facilities described in inclusions I1, I2, I4, and I5 are each 

operated or connected at or above 100 kV. NERC states that inclusion I3 encompasses

blackstart resources identified in a transmission operator’s restoration plan, which are 

necessary for the operation of the interconnection transmission system and should be 

 29 Id. at 16.
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included in the bulk electric system regardless of their size (MVA) or the voltage at 

which they are connected. NERC states that the inclusions will further reduce the 

potential for the exercise of discretion and subjectivity to exclude such configurations 

from the bulk electric system. 

20. According to NERC, inclusion I1 includes transformers with the primary terminal 

and at least one secondary terminal operated at 100 kV or higher unless excluded under 

exclusion E1 or E3 (discussed later). NERC states that transformers operating at 100 kV 

or higher are part of the existing definition, but since transformers have windings 

operating at different voltages, and multiple windings in some circumstances, 

clarification was required to explicitly identify which transformers are included in the 

bulk electric system. 

21. Inclusion I2 addresses generating resources with a gross individual nameplate 

rating greater than 20 MVA or a gross plant/facility aggregate nameplate rating greater 

than 75 MVA. According to NERC, inclusion I2 includes in the bulk electric system the 

generator terminals through the high-side of the step-up transformers connected at a 

voltage of 100 kV or above. NERC states that this inclusion mirrors the text of the 

NERC Registry Criteria (Appendix 5B of the NERC Rules of Procedure) for generating 

units.30 NERC states that a “basic tenet that was followed in developing the [revised 

 30 Id. at 17 (citing section III.c.1 and III.c.2 of Appendix 5B of the Rules of 

Procedure).
Docket Nos. RM12-6-000 and RM12-7-000 - 14 -

definition] was to avoid changes to Registrations...if such changes are not technically

required for the [revised definition] to be complete.”31

22. As noted above, inclusion I3 includes blackstart resources identified in the 

transmission operator’s restoration plan in the bulk electric system. 

23. Inclusion I4 includes dispersed power producing resources with gross aggregate 

capacity nameplate rating greater than 75 MVA which utilize a system designed

primarily for aggregating capacity, connected at a common point at a voltage of 100 kV 

or above. NERC states that this inclusion was added to accommodate the effects of 

variable generation on the bulk electric system.

24. Inclusion I5 addresses static or dynamic devices (excluding generators) dedicated 

to supplying or absorbing reactive power that are connected at 100 kV or higher, or

through a dedicated transformer with a high-side voltage of 100 kV or higher, or through 

a transformer that is designated in inclusion I1. NERC states that this inclusion is the 

technical equivalent of inclusion I2 for reactive power devices.

25. NERC states that the four exclusions identify facilities configurations that should 

not be included in the bulk electric system.

32 Generally, the exclusions address radial 

systems, behind-the-meter generation and local networks that distribute power to load. 

The four exclusions are:

 31 Id. at 17.

32 Id. at 18.
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Exclusions:

E1 - Radial systems: A group of contiguous transmission Elements that 

emanates from a single point of connection of 100 kV or higher and:

a) Only serves Load. Or,

b) Only includes generation resources, not identified in Inclusion 

I3, with an aggregate capacity less than or equal to 75 MVA (gross 

nameplate rating). Or,

c) Where the radial system serves Load and includes generation 

resources, not identified in Inclusion I3, with an aggregate capacity 

of non-retail generation less than or equal to 75 MVA (gross 

nameplate rating).

Note – A normally open switching device between radial systems, as 

depicted on prints or one-line diagrams for example, does not affect this 

exclusion.

E2 - A generating unit or multiple generating units on the customer’s side 

of the retail meter that serve all or part of the retail Load with electric 

energy if: (i) the net capacity provided to the BES does not exceed 

75 MVA, and (ii) standby, back-up, and maintenance power services are 

provided to the generating unit or multiple generating units or to the retail 

Load by a Balancing Authority, or provided pursuant to a binding 

obligation with a Generator Owner or Generator Operator, or under terms 

approved by the applicable regulatory authority.

E3 - Local networks (LN): A group of contiguous transmission Elements 

operated at or above 100 kV but less than 300 kV that distribute power to 

Load rather than transfer bulk-power across the interconnected system. 

LN’s emanate from multiple points of connection at 100 kV or higher to 

improve the level of service to retail customer Load and not to 

accommodate bulk-power transfer across the interconnected system. The 

LN is characterized by all of the following:

a) Limits on connected generation: The LN and its underlying

Elements do not include generation resources identified in Inclusion 

I3 and do not have an aggregate capacity of non-retail generation 

greater than 75 MVA (gross nameplate rating);
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b) Power flows only into the LN and the LN does not transfer 

energy originating outside the LN for delivery through the LN; and

c) Not part of a Flowgate or transfer path: The LN does not 

contain a monitored Facility of a permanent Flowgate in the Eastern 

Interconnection, a major transfer path within the Western 

Interconnection, or a comparable monitored Facility in the ERCOT or 

Quebec Interconnections, and is not a monitored Facility included in 

an Interconnection Reliability Operating Limit (IROL).

E4 – Reactive Power devices owned and operated by the retail customer 

solely for its own use.

Note - Elements may be included or excluded on a case-by-case basis 

through the Rules of Procedure exception process.

26. Exclusion E1 provides detailed criteria for determining which facilities are 

properly excluded from the bulk electric system as radial facilities, which NERC states is 

intended to enhance the clarity of the radial facilities exclusion. NERC explains that 

criteria “b” and “c” of exclusion E1 identify the maximum amount of generation allowed 

on the radial facility while still qualifying for the radial facilities exclusion (aggregate 

capacity less than or equal to 75 MVA). NERC indicates that this exclusion addresses

the circumstances of small utilities (including municipal utilities and cooperatives). 

According to NERC, “the maximum amount of generation allowed on the radial facility 

is sufficient to allow small utilities to continue to provide service options that support 

reliability of the interconnected transmission network, while not operating to exclude 

larger generators from the [bulk electric system].”33 Further, NERC states, that the 

maximum amount of generation allowed on the radial facility per criteria “b” and “c” is 

 33 Id. at 19. 
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consistent with the aggregate capacity threshold presently provided in the Registry 

Criteria for registration as a generator owner or generator operator (75 MVA gross 

nameplate rating).

27. With respect to the “normally open switch” note at the end of exclusion E1, NERC 

explains that this note is intended to address a common network configuration “in which 

two separate sets of facilities that, each standing alone, would be recognized as radial 

systems and not included in the bulk electric system are connected by a ‘normally open 

switch’ – i.e., a switch that is set to the open position – for reliability purposes.”34 NERC 

states that a switch in this configuration is installed by entities to provide greater 

reliability to their end-use customers. According to NERC, scheduled maintenance 

activities on a radial line, or an unscheduled outage impacting the single point of supply 

to the radial line, could cause the disruption of power supply to the end-use customers 

served by the line, unless the entity has the ability to temporarily switch to another feed.35 

NERC states that the entity’s operating procedures dictate how and when to operate such 

a normally open switch. NERC explains that an entity does not arbitrarily close the 

normally open switch placed in this configuration. Rather, the entity closes the 

“normally open” switch to maintain reliability of service to its end-use customers served 

 34 Id. 

35 As explained below, the switch, though normally open, could be closed in such 

circumstances to allow the affected radial line to serve load by relying on another line 

through the closed switch. 
Docket Nos. RM12-6-000 and RM12-7-000 - 18 -

from the affected radial line. NERC believes that facilities that otherwise meet the 

criteria for the radial system exclusion in exclusion E1 should not be included in the bulk 

electric system solely because the entity maintains a switch of this type, which is 

normally open, between sets of radial facilities. NERC states that for a set of radial 

facilities that are connected by a switch to qualify for the radial exclusion under exclusion 

E1, the switch must be identified as “normally open” on “source documents such as, 

prints or one-line diagrams and must in fact be normally set in the open position.”36

28. NERC states that subjecting two sets of radial facilities that are normally 

unconnected to each other because the switch between them is open to the Reliability 

Standards during the limited time periods when the switch is closed for maintenancerelated or outage-related circumstances would be fundamentally impractical and 

unworkable (from both the entity’s perspective and the ERO’s perspective).37 NERC 

explains that this note will prevent numerous exception requests because this 

configuration is common.

29. According to NERC, exclusion E2 excludes a generating unit or units on the 

customer’s side of the retail meter that serves all or part of the retail load subject to 

two conditions. First, the net capacity provided by the generating unit does not exceed 

75 MVA. Second, standby, back-up, and maintenance power services are provided to the 

 36 Id. at 20 n. 26. NERC provides other examples of source documents such as 

diagrams displayed within an energy management system or a SCADA system. 

37 Id. at 20-21.
Docket Nos. RM12-6-000 and RM12-7-000 - 19 -

generating unit or the retail load by a balancing authority, or pursuant to a binding 

obligation with a generator owner or generator operator, or under terms approved by the 

applicable regulatory authority. NERC states that these generating units are not 

necessary for the operation of the interconnected transmission network and, therefore, do 

not need to be included in the definition because they serve a single retail load, provide a 

limited amount of capacity to the bulk electric system, and are fully backed up by other 

resources.38

30. NERC explains that exclusion E3, the “local network” exclusion, encompasses 

local networks of transmission elements operated at between 100 kV and 300 kV “that 

distribute power to load rather than transfer bulk power across the interconnected 

system.”39 NERC explains that “[t]he purpose of local networks is to provide local 

distribution service, not to provide transfer capacity for the interconnected transmission 

network.”40 According to NERC, a network that supports distribution and does not 

accommodate bulk-power transfers across the interconnected system should not be 

included in the bulk electric system. NERC also states that the “detailed conditions 

established in exclusion E3 are sufficient to ensure that such qualifying local networks 

 38 Id. at 21. 

39 Id. at 22.

40 Id. 
Docket Nos. RM12-6-000 and RM12-7-000 - 20 -

are being used exclusively for local distribution purposes.”41 NERC adds that facilities 

used for the local distribution of electric energy are expressly excluded from the bulk 

electric system by the core definition as well as by the local network exclusion. 

31. Exclusion E4 encompasses reactive power devices owned and operated by a retail 

customer solely for its own use. NERC explains that exclusion E4 is the technical 

equivalent of exclusion E2 for reactive power devices. 

c. Detailed Information to Support an Exception Request

32. In Order No. 743, the Commission directed NERC to develop a set of technical 

criteria to use in addressing requests for exceptions to the definition of the bulk electric 

system.42 NERC states that it would be “more feasible to develop a common set of data 

and information that could be used by the Regional Entities and NERC to evaluate 

exception requests” than to develop the detailed criteria.43 The Detailed Information

Form contains the common set of data that entities seeking an exception must submit 

with every exception request. NERC indicates that the Detailed Information Form 

represents an equal and effective alternative approach to developing a substantive set of 

technical criteria for granting and rejecting exception requests required in Order 

 41 Id. at 23. See also id. at Exh. G (Technical Justification Paper for “Local 

Network Exclusion”) at 2 (LN Technical Paper).

42 Order No. 743, 133 FERC ¶ 61,150 at P 115 (stating “NERC should develop an 

exemption process that includes clear, objective, transparent and uniformly applicable 

criteria for the exemption of facilities that are not necessary for operating the grid.”).

43 NERC BES Petition at 26.
Docket Nos. RM12-6-000 and RM12-7-000 - 21 -

No. 743.

44 Thus, NERC asks the Commission to approve the Detailed Information Form 

as satisfying the Commission’s technical concerns expressed in Order No. 743 with 

respect to the need for criteria to approve or disapprove exception requests.

33. The Detailed Information Form specifies that all exception requests include a oneline breaker diagram identifying the element for which the exception is requested and 

data and studies to support the submittal. NERC states that the studies should be based 

on an Interconnection-wide base case to reflect the electrical characteristics and system 

topology. The studies should clearly document all assumptions used, address key 

performance measures of bulk electric system reliability through steady state power flow, 

and contain a transient stability analysis as necessary to support the entity’s request. 

NERC notes that the applicant remains responsible for providing sufficient information 

and argument to justify the exception request.45

34. According to NERC, the information that an applicant may submit in support of an 

exception request is not limited to the Detailed Information Form. Rather, an applicant is

expected to submit all relevant data, studies and other information that supports the

exception request. Further, the Regional Entity and NERC may ask an applicant to 

provide other data and studies in addition to the Detailed Information Form.

46 

 44 Id. at 26, 32 (citing Order No. 743, 133 FERC ¶ 61,150 at P 115).

45 Id. at 30.

46 Id. at 27 n.32.
Docket Nos. RM12-6-000 and RM12-7-000 - 22 -

d. Proposed Implementation Plan for Revised Definition of 

“Bulk Electric System”

35. NERC requests that the revised definition “should be effective on the first day of 

the second calendar quarter after receiving applicable regulatory approval, or, in those 

jurisdictions where no regulatory approval is required, the revised [bulk electric system 

definition] should go into effect on the first day of the second calendar quarter after its 

adoption by the NERC Board.47 The existing definition would be retired at midnight of 

the day immediately prior to the effective date of the revised definition in the jurisdiction 

in which the revised definition is becoming effective. NERC states that the proposed 

effective date is appropriate to provide a reasonable time between the date of regulatory 

approval, which is not under the control of NERC or the industry, and the effective date 

of the revised BES definition.48

36. NERC also requests that compliance obligations for all elements newly-identified 

to be included in the bulk electric system based on the revised definition should begin 

twenty-four months after the applicable effective date of the revised definition. NERC 

notes that the Commission stated in Order Nos. 743 and 743-A that the transition period 

should not exceed 18 months from the date of Commission approval of the revised 

definition, unless the Commission approved a longer transition period based on specific 

justification. NERC believes that a “somewhat longer transition period” is necessary in

 47 Id. at 34.

48 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 23 -

light of the actions that will need to be completed in connection with the revised 

definition. NERC notes that in the United States, the proposed transition period will 

be between a minimum of approximately twenty-seven months and a maximum of 

thirty months from the date of Commission approval, depending on the date of 

Commission approval.”49 NERC states that sufficient time is needed: (1) to implement 

transition plans to accommodate any changes resulting from the revised definition; (2) for 

entities to file for exceptions, and for the Regional Entities and NERC to process those 

exceptions to a final determination, pursuant to the proposed exception process; and 

(3) for owners of facilities and elements that are newly-included in the bulk electric 

system based on the definition to train their personnel on compliance with the Reliability 

Standards applicable to the newly-included facilities and elements, so that these entities 

can achieve compliance with applicable Reliability Standards by the end of the transition 

period.

2. NERC Petition for Approval of Revisions to Rules of Procedure 

to Adopt a Bulk Electric System Exception Process

a. Changes to NERC’s Rules of Procedure 

37. In Docket No. RM12-7-000, NERC filed proposed revisions to its Rules of 

Procedure for the purpose of adopting a procedure for entities to obtain an exception from

the definition of bulk electric system (NERC ROP Petition). NERC states that the 

proposed exception process, which is a mechanism to add elements to, and remove 

 49 Id. at 35. 
Docket Nos. RM12-6-000 and RM12-7-000 - 24 -

elements from, the bulk electric system, addresses the concerns raised in Order No. 743

with respect to the current processes for determining what facilities are part of the bulk 

electric system and what facilities are not.50 NERC also states that the exception process 

“provides for decisions to approve or disapprove exception requests to be made by 

NERC, rather than by the Regional Entities, thereby eliminating the potential for 

inconsistency and subjectivity that the Commission was concerned [about, which] was 

created by having decisions as to what facilities are included in or excluded from the BES 

made at the Regional Entity level.”51 NERC proposes to add section 509 (Exceptions to 

the Definition of the Bulk Electric System), section 1703 (Challenges to NERC 

Determinations of BES Exception Requests) and Appendix 5C (Procedure for Requesting 

and Receiving an Exception to the NERC Definition of Bulk Electric System) to NERC’s

Rules of Procedure. The NERC ROP Petition also includes proposed conforming 

revisions to other Rules of Procedure, including revisions to sections 302.2, 501.1.4.4, 

804, 1102.2, and 1701 and appendices 2, 3D, 4B, 5B, 6, and 8, which NERC states are

necessary in light of the revised definition and the exception process.

Section 509 of the Rules of Procedure

38. NERC states that proposed section 509 establishes a procedure, which is contained 

in a new Appendix 5C to the Rules of Procedure, for an entity to request that an element 

 50 NERC ROP Petition at 4.

51 Id. (footnote omitted).
Docket Nos. RM12-6-000 and RM12-7-000 - 25 -

that falls outside of the definition of the bulk electric system be treated as part of the bulk 

electric system and for an entity to request that an element that falls within the definition 

of the bulk electric system not be treated as part of the bulk electric system:

An Element is considered to be (or not be) part of the Bulk Electric System 

by applying the BES Definition to the Element (including the inclusions 

and exclusions set forth therein). Appendix 5C sets forth the procedures 

by which (i) an entity may request a determination that an Element that 

falls within the definition of Bulk Electric System should be exempted 

from being considered a part of the Bulk Electric System, or (ii) an entity 

may request that an Element that falls outside the definition of the Bulk 

Electric System should be considered a part of the Bulk Electric System.52

NERC explains that the exception process is “not intended to be used to resolve 

ambiguous situations,” i.e. the exception process is only available after an initial 

determination has been made regarding whether an element is part of or not part of the 

bulk electric system through the application of the definition to the element.53 

Appendix 5C to the Rules of Procedure

39. NERC explains that proposed Appendix 5C sets forth the detailed procedures for 

obtaining an exception to include an element in, or remove an element from, the bulk 

electric system.54 The exception process involves three steps.55 First, an entity applies 

the bulk electric system definition to a transmission element to determine its status. If the 

 52 Id. at 10.

53 Id. at 10-11. 

54 Id. at 11. See also section D.1.c above. 

55 Id. at 13-14.
Docket Nos. RM12-6-000 and RM12-7-000 - 26 -

entity believes that the element, contrary to its characterization based on the definition, 

should either be treated, or not be treated, as part of the bulk electric system, the entity 

may submit an exception request to the Regional Entity in which the element is located. 

Second, the Regional Entity screens the request to determine whether the application 

meets the filing criteria and, if so, reviews the application and makes a recommendation 

to NERC whether to approve or deny the request. Third, the NERC President decides 

whether to approve or deny the exception request after considering the opinion provided 

by a NERC review panel.56 If the entity does not agree with the NERC President’s 

decision, it may appeal the decision to the NERC Board of Trustees Compliance 

Committee (Compliance Committee) who is the final arbiter of the request.

40. According to NERC, if the Regional Entity denies the exception request based on 

the initial screening but the applicant believes the exception request is proper and 

complete, the applicant may appeal the rejection directly to NERC. 

41. NERC explains that the proposed exception process will allow NERC to provide 

consistent determinations on exception requests submitted from different regions 

involving the same or similar facts and circumstances, and will allow NERC to take into 

account the aggregate impact on the bulk electric system of approving or disapproving all 

of the exception requests. Finally, the exception process includes provisions for reporting 

information that may alter the status of an approved exception, verifying whether an 

 56 The panel will have at least three members. NERC ROP Petition at 14.
Docket Nos. RM12-6-000 and RM12-7-000 - 27 -

exception continues to be warranted, and revoking an exception that is no longer 

warranted.

42. The proposed exception process includes provisions for obtaining exceptions both 

for inclusion in and exclusion from the bulk electric system. NERC identifies the entities 

that are eligible to submit exception requests. Specifically, the owner of an element may 

submit a request to include the element in, or remove it from, the bulk electric system.

57 

A Regional Entity, planning authority, reliability coordinator, transmission operator, 

transmission planner, or balancing authority that has (or will have upon inclusion in the 

bulk electric system) the elements covered by an exception request within its scope of 

responsibility may submit an exception request for the inclusion in the bulk electric 

system of an element or elements owned by a registered entity. NERC states that only a 

Regional Entity may submit an exception request for the inclusion in the bulk electric 

system of an element owned by an owner that is not a registered entity. 

43. Finally, NERC states that an exception request will be subject to review to verify 

continuing justification for the exception.58 According to NERC, the proposed exception 

process requires an entity to notify the Regional Entity and NERC within 90 days after 

 57 Section 5C of NERC’s Rules of Procedure defines “owner” as “the owner(s) of 

an [e]lement or [e]lements that is or may be determined to be part of the [bulk electric 

system] as a result of either the application of the [bulk electric system] [d]efinition or an 

[e]xception, or another entity, such as an operator, authorized to act on behalf of the 

owner of the [e]lement or [e]lements in the context of an [e]xception [r]equest.”

58 Id. at 34 and Att. 1 at 17.
Docket Nos. RM12-6-000 and RM12-7-000 - 28 -

learning of any change of condition which would affect the basis for approving the 

exception request. NERC will then review the information and determine whether to 

direct the Regional Entity to perform a substantive review to verify continuing 

justification and issue a recommendation to NERC.59 NERC also states that an entity 

must certify every 36 months to the appropriate Regional Entity that the basis for the 

exception request remains valid. In addition, the proposed exception process states that if 

the Regional Entity obtains information through means other than the submitting entity

that indicates an exception may no longer be warranted, the Regional Entity must provide 

NERC with the information. NERC will review the information and determine whether 

to direct the Regional Entity to perform a substantive review to verify continuing 

justification and issue a recommendation to NERC.60

44. NERC states that the exception process establishes a process that (1) balances the

need for effective and efficient administration with due process and clarity of 

expectations; (2) promotes consistency in determinations and eliminates Regional 

discretion by having all decisions on Exception Requests made at NERC; (3) provides for 

involvement of persons with applicable technical expertise in making decisions on 

ception Requests; and (4) should alleviate concerns about a “one-size-fits-all” approach.61

 59 Id. at 34-35 and Att. 1 at 17.

60 Id. at 35 and Att. 1 at 17.

61 Id. at 17.
Docket Nos. RM12-6-000 and RM12-7-000 - 29 -

Section 1703 of the Rules of Procedure

45. NERC has also proposed to modify its Rules of Procedure to add a procedure for 

an entity to challenge the NERC decision on an exception request. The entity must file 

the challenge with the Compliance Committee within 30 days of the date of the NERC 

decision. The Compliance Committee must issue its decision within 90 days after the 

submission of the challenge, which the Compliance Committee may extend. NERC 

states that the Compliance Committee decision will be the final NERC decision on the 

exception request. In addition, the entity may appeal the final NERC decision to the 

Commission within 30 days following the date of the Compliance Committee‘s decision, 

or within such time period as the Commission’s legal authority permits.

b. NERC’s List of Facilities Granted Exceptions

46. In Order No. 743, the Commission stated that NERC should maintain a list of 

exempted facilities that can be made available to the Commission upon request.62 NERC 

states that the proposed exception process does not include provisions for NERC to 

maintain a list of facilities that have received exceptions, as requested in Order No. 743, 

as this is an internal administrative matter for NERC to implement that does not need to 

be embedded in the Rules of Procedure.

63 NERC states it will develop a specific internal 

plan and procedures for maintaining a list of facilities for which exceptions have been 

granted. 

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

63 NERC ROP Petition at 49.
Docket Nos. RM12-6-000 and RM12-7-000 - 30 -

47. NERC also notes that Regional Entities will maintain lists of elements within their 

regions for which exceptions have been granted, in order to monitor compliance with the 

requirement to submit periodic certifications pursuant to section 11.3 of Appendix 5C.64

II. Discussion

48. Pursuant to section 215(d) of the FPA we propose to approve NERC’s revised 

definition of bulk electric system, including the specific inclusions and exclusions set 

forth in the definition, as just, reasonable, not unduly discriminatory or preferential, and 

in the public interest. As discussed below, we believe that NERC’s proposal satisfies the 

directives of Order No. 743 to develop modifications to the currently-effective definition 

of bulk electric system to ensure that the definition encompasses all facilities necessary 

for operating an interconnected transmission network and remove the Regional Entity 

discretion that currently allows for regional variations without review or oversight. We 

also believe NERC’s proposed definition satisfies the Commission’s technical concerns 

in Order No. 743 through the use of a bright-line 100 kV threshold, with specific 

inclusions and exclusions within the definition, for identifying bulk electric system 

elements and the establishment of an exception process for facilities that are not 

necessary for operating the interconnected transmission network. Further, we believe 

NERC’s proposed definition improves clarity and transparency. Below, we discuss the 

 64 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 31 -

proposed “core” bulk electric system definition as well as each bright-line inclusion and 

exclusion of the proposed definition. 

49. While proposing to approve NERC’s modified definition, we also seek additional 

explanation and comments regarding potential applications of the “core” definition, as 

well as the inclusions and exclusions. We believe that a common understanding of the 

proposed bulk electric system definition (1) promotes consistent application of the 

definition in identifying bulk electric system elements and facilities and (2) provides upfront clarity so as to minimize the need for future clarifications either formally through 

NERC’s standards clarification process or case-specific in a compliance setting. Thus, 

we seek comment from NERC and other interested persons regarding the scenarios and 

applications of the NERC proposal, discussed below. Although we propose to approve 

the definition in this rulemaking, the responses to our questions are also intended to guide 

the Commission as to whether other action may be necessary, for example, directing 

NERC to develop a further modification to the core definition, inclusions or exclusions

pursuant to section 215(d)(5) of the FPA.

50. Further, pursuant to section 215(f) of the FPA, we propose to approve the 

revisions to the NERC Rules of Procedure that establish an exception process to 

determine case-specific exceptions to the bulk electric system definition. NERC’s 

proposal meets the section 215(f) standard of review for changes to the Rules of 

Procedure. The Detailed Information Form in the proposed rules identifies “base-line” 

information and data that any applicant must submit. Further, after Regional Entity input, 
Docket Nos. RM12-6-000 and RM12-7-000 - 32 -

NERC makes the final decision on whether to grant an exception request, which better 

assures consistency of decisions across all regions. 

51. In Order No. 743, the Commission stated that NERC should maintain a list of 

facilities included or excluded from the bulk electric system pursuant to the exception 

process.65 NERC indicates that, while it plans to maintain such a list, maintaining the list 

is an internal NERC function and, thus, not included in NERC’s proposed Rules of 

Procedure. To understand how NERC intends to comply with the directive from Order 

No. 743, we propose to require that NERC submit a compliance filing detailing its 

internal process for tracking exception requests.

52. Below, the Commission discusses (A) the “core” bulk electric system definition; 

(B) proposed inclusions and exclusions in the definition; (C) the case-specific exception 

process; (D) the Detailed Information Form; and (E) NERC’s implementation plan.

A. The Commission Proposes to Approve the Core Definition of Bulk 

Electric System

53. The bulk electric system “core” definition developed by NERC states as follows:

Unless modified by the lists shown below, all Transmission Elements 

operated at 100 kV or higher and Real Power and Reactive Power 

resources connected at 100 kV or higher. This does not include facilities 

used in the local distribution of electric energy.

54. In Order No. 743, the Commission found that “the current definition of bulk 

electric system is insufficient to ensure that all facilities necessary for operating an 

 65 Order No. 743, 133 FERC ¶ 61,150 at P 117.
Docket Nos. RM12-6-000 and RM12-7-000 - 33 -

interconnected electric energy transmission network are included under the ‘bulk electric 

system’ rubric.”66 The Commission also stated that the “aim” of the final rule was 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.”67 The Commission 

stated that the one way to accomplish these goals is to eliminate the regional discretion in 

the current definition, and maintain the bright-line threshold that includes all facilities 

operated at or above 100 kV and establish an exception process and criteria for excluding 

facilities that are not necessary for the operation of the interconnected transmission 

network.68

55. It appears that NERC’s proposal satisfies the objectives set forth in Order No. 743. 

The “core” definition, quoted above, establishes the fundamental threshold for inclusion 

of facilities in the bulk electric system as those that are operated at 100 kV or higher, if 

they are transmission elements, or are connected at 100 kV or higher, if they are real 

power or reactive power resources. The core definition also establishes a 100 kV 

criterion as a bright-line threshold, rather than as a general guideline as in the current 

 66 Order No. 743, 133 FERC ¶ 61,150 at P 30. 

67 Id. P 2.

68 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 34 -

definition, i.e., the phrase “generally operated at” in the current definition is eliminated. 

As NERC explains, the core definition also continues to capture equipment associated 

with the facilities included in the bulk electric system.69

56. Further, consistent with Order No. 743, NERC’s proposed “bulk electric system”

definition eliminates the phrase “as defined by the Regional Reliability Organization....” 

As a result, NERC’s proposed definition will apply nation-wide. Thus, we believe 

NERC’s proposal adequately addresses the concerns articulated in Order No. 743 

regarding unfettered regional discretion and the need for a consistent approach satisfies 

the concerns regarding the elimination of inconsistencies across regions. The 

Commission seeks comment on whether the revised definition adequately eliminates 

subjectivity and regional variation as required in Order No. 743.

70 

 69 The core definition includes all “Transmission Elements operated at or above 

100 kV.” As NERC explains in its petition, the NERC-defined term “Transmission” 

includes the phrase “associated equipment.” The NERC Glossary defines 

“Transmission” as “[a]n interconnected group of lines and associated equipment for the 

movement or transfer of electric energy between points of supply and points at which it is 

transformed for delivery to customers or is delivered to other electric systems.” 

Additionally, the Glossary defines “Elements” as “[a]ny electrical device with terminals 

that may be connected to other electrical devices such as a generator, transformer, circuit 

breaker, bus section, or transmission line. An element may be comprised of one or more 

components.” We agree with NERC that while the new definition does not use the term

“associated equipment,” the phrase is included in the definition through the defined term 

“Transmission Elements.” 

70 Id. PP 11-12, 57. The Commission notes that nothing in the immediate rulemaking 

proceeding should impact the application of available transmission capability (ATC) 

calculations as set for in Order No. 890. See Preventing Undue Discrimination and 

Preference in Transmission Service, Order No. 890, FERC Stats. & Regs. ¶ 31,241, at 

P 196, order on reh’g, Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007), order on 

(continued...)
Docket Nos. RM12-6-000 and RM12-7-000 - 35 -

57. Below, we seek comment regarding the exclusion of facilities used in local 

distribution. 

Local Distribution

58. In Order No. 743, the Commission acknowledged that “Congress has specifically 

exempted ‘facilities used in the local distribution of electric energy’” from the BulkPower System definition and that, because such facilities are exempted from the BulkPower System, they also are excluded from the bulk electric system.71 The Commission 

also stated that, although local distribution facilities are excluded from the definition, it 

still is necessary to determine which facilities are local distribution, and which are 

transmission.72 As the Commission stated in order No. 743-A, “[w]hether facilities are 

used in local distribution will in certain instances raise a question of fact, which the 

Commission has jurisdiction to determine.” In Order No. 743, the Commission also 

recognized that NERC would need to establish whether a particular facility is local 

distribution or transmission, and directed NERC to develop a means, subject to 

 

reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C,

126 FERC ¶ 61,228 (2009), order on clarification, Order No. 890-D, 129 FERC ¶ 61,126 

(2009). Public utility transmission service providers (or their designate) have the 

obligation to comply in all respects with their Commission approved tariff. This requires 

that they must continue to use the applicable Reliability Standards to plan and operate 

both their bulk electric system and non-bulk electric system facilities included in their 

tariffs. 

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

72 Order No. 743-A, 134 FERC ¶ 61,210 at P 67. 
Docket Nos. RM12-6-000 and RM12-7-000 - 36 -

Commission approval, to make such a determination. 73 In Order No. 743-A the 

Commission clarified 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” 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. ... 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.

We agree ... 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 applying the test or developing 

an alternative approach as it deems necessary.74

59. In addressing what constitutes local distribution, NERC explains that the second 

sentence in the core definition, which excludes “facilities used in the local distribution of 

electric energy,” is consistent with section 215(a)(1)(B) of the FPA and the 

Commission’s regulations at 18 C.F.R. § 39.1 and as recognized in Order No. 743-A.”75 

NERC states that “the core definition... establish[es] an express carve out for facilities 

used in the local distribution of electrical energy.”76 NERC also states that facilities for 

the local distribution of electric energy are expressly excluded from the bulk electric 

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

74 Order No. 743-A, 134 FERC ¶ 61,210 at PP 68-69 (footnotes omitted).

75 NERC BES Petition at 16.

76 Id. at 22-23. 
Docket Nos. RM12-6-000 and RM12-7-000 - 37 -

system by the core definition as well as by the local network exclusion, exclusion E3.

77 

NERC adds that, while some stakeholders suggested that the Commission’s seven-factor 

test should be employed to determine distribution facilities, the NERC drafting team 

“rejected this approach as the sole determination of distribution facilities, ... [but] 

pointed out that such a test could be utilized by a Submitting Entity making an Exception 

Request but that other information should be supplied to support the request.”78

60. The Commission seeks comment from NERC and the public regarding how the 

proposed definition is responsive to the Commission’s directives in Order Nos. 743 and 

743-A. Specifically, the Commission seeks comment on how NERC’s proposal 

 77 NERC’s LN Technical Paper, Exhibit G of NERC’s Petition, provides: 

In Order 743a, the Commission made it clear that facilities that are used in 

the local distribution of electric energy will be excluded from the Bulk 

Electric System. ... In response to this facet of the Order, in developing the 

BES definition, the SDT has followed this guidance. Exclusion E3 was 

specifically designed to capture for exclusion those high voltage non-radial 

facilities being used for the local distribution of energy. 

The exclusion characteristics in items a, b, and c ... serve to ensure that 

facilities excluded under the local network exclusion (E3) are not necessary 

for the reliable operation of the interconnected electric transmission 

network and are instead used in the local distribution of energy. 

Id., Ex. G, at 2.

78 NERC BES Petition at 49.
Docket Nos. RM12-6-000 and RM12-7-000 - 38 -

adequately differentiates between local distribution and transmission facilities in an 

objective, consistent, and transparent manner.79 

B. The Commission Proposes to Approve the List of Inclusions and 

Exclusions in the Definition of Bulk Electric System

61. Along with the core definition, NERC’s proposal provides specific inclusions and 

exclusions. The inclusions and exclusions provide added clarity regarding which 

elements are part of the bulk electric system as compared to the existing definition. For 

example, the inclusion of generating resources, blackstart resources and dispersed power 

producing resources provide additional information and granularity that assist in the 

identification of bulk electric system facilities or elements. However, we also have 

questions about how some of the inclusions and exclusions will be applied by NERC, 

Regional Entities and users, owners and operators of the Bulk-Power System. Through 

the responses to these questions we seek to better understand potential applications of the 

inclusions and exclusions, their effect on identifying the facilities or elements for bulk 

electric system reliability, and whether possible gaps exist.

 79 We note that an element that falls outside of the definition of bulk electric 

system is not necessarily local distribution. 
Docket Nos. RM12-6-000 and RM12-7-000 - 39 -

1. Inclusions

a. Inclusion I1 (Transformers)

62. Inclusion I1 provides “[t]ransformers with the primary terminal and at least one 

secondary terminal operated at 100 kV or higher unless excluded under [the radial system 

or local network exclusion].” NERC explains that:

Transformers operating at 100 kV or higher are part of the existing

definition, but since transformers have windings operating at

different voltages, and multiple windings in some circumstances, 

clarification was required to explicitly identify which transformers 

are included in the BES. Inclusion I1 includes in the BES those 

transformers operating at 100 kV or higher on the primary winding 

and at least one secondary winding, so as to be in concert with the 

core definition.80

 

63. We believe that inclusion I1, with NERC’s explanation, is a reasonable approach 

to identifying transformers that are appropriately included as part of the bulk electric 

system. However, circumstances may warrant inclusion of a particular transformer –

through the proposed case-specific exception process - where a transformer is operated at 

100 kV or higher on the primary winding but all secondary terminals are operated below

100 kV. The joint NERC and Commission staff report on the September 8, 2011,

Arizona-Southern California blackout discusses how a 92 kV networked system 

experienced parallel flows from bulk electric system elements through two 230/92 kV 

 80 NERC BES Petition at 17.
Docket Nos. RM12-6-000 and RM12-7-000 - 40 -

transformers.81 The report explains that the reliability coordinator, transmission 

operators and balancing authorities did not consider certain sub-100 kV facilities, 

including two 230/92 kV transformers as bulk electric system elements. 

Consequently, when contingencies occurred on the bulk electric system on September 8, 

2011, the reliability coordinator, transmission operators and balancing authorities were 

unaware that the contingencies adversely impacted the 230/92 kV transformers or how 

the loss of the transformers impacted system reliability.82 The Commission seeks 

comment on whether these types of transformers, i.e., those that have a terminal operated 

at 100 kV or above on the high side and below 100 kV on the low side should be 

designated as part of the bulk electric system. If answered in the affirmative, the 

Commission seeks further comment whether the case-by-case exception process suffices, 

or a generic inclusion is appropriate to address the concerns identified in Order No. 743.

b. Inclusion I2 (Generating Resources) 

64. Inclusion I2 provides: 

Generating resource(s) with gross individual nameplate rating greater than 

20 MVA or gross plant/facility aggregate nameplate rating greater than 75 MVA 

including the generator terminals through the high-side of the step-up 

transformer(s) connected at a voltage of 100 kV or above. 

 81 Arizona-Southern California Outages on September 8, 2011 – Causes and 

Recommendations at 96 (September 2011 Blackout Report), available at

http://www.ferc.gov/legal/staff-reports/04-27-2012-ferc-nerc-report.pdf.

82 Id. at 96-97.
Docket Nos. RM12-6-000 and RM12-7-000 - 41 -

According to NERC, this inclusion “mirrors” the text of the NERC Registry Criteria for 

generating units. NERC explains that the drafting team “found no technical rationale for 

changing at this time from the thresholds for generating resources presently specified in 

the ... Registry Criteria.”83 Further, NERC states that, to provide clarity, the revised 

definition specifies that the bulk electric system “includes the generator terminals through 

the high-side of the step-up transformer connected at a voltage of 100 kV or above.”84

65. We believe that Inclusion I2 provides useful granularity regarding the inclusion of 

generation resources as part of the bulk electric system. However, we seek comment 

regarding several aspects of inclusion I2. NERC’s Registry Criteria thresholds for 

generators provides for the registration of “[i]ndividual generating unit > 20 MVA (gross 

nameplate rating) and is directly connected to the Bulk Power System” or “[g]enerating 

plant/facility > 75 MVA (gross aggregate nameplate rating) or when the entity has 

responsibility for any facility consisting of one or more units that are connected to the 

Bulk Power System at a common bus with total generation above 75 MVA gross 

nameplate rating.”85 We agree that proposed inclusion I2 is consistent with the 

individual and aggregate nameplate rating thresholds set forth in the Registry Criteria. 

 83 NERC BES Petition at 17. NERC states “A basic tenet that was followed in 

developing the revised BES Definition was to avoid changes to Registrations due to the 

revised BES Definition if such changes are not technically required for the BES 

Definition to be complete.” Id. (citing Order No. 743-A, 134 FERC ¶ 61,210 at P 102).

84 NERC BES Petition at 17. 

85 Registry Criteria, III.c.1 and c.2 (Generator Owner/Operator).
Docket Nos. RM12-6-000 and RM12-7-000 - 42 -

We note, however, that the Registry Criteria and the proposed definition differ regarding 

the description of the connection point of the generating units and plants. While

inclusion I2 specifies “generator terminals through the high-side of the step-up 

transformer(s) connected at a voltage of 100 kV or above,” the Registry Criteria specifies 

a “direct connection” to the Bulk-Power System. We seek comment whether inclusion I2 

will result in a material change to registration of existing generating units due to the 

difference in the language regarding the connection point. In addition, we seek comment 

if, pursuant to inclusion I2, the following circumstances are included in the bulk electric 

system: a generating unit, with a gross individual nameplate rating greater 20 MVA 

connected through the high-side of the step-up transformer connected at a voltage of 

100 kV or above when the low side of the transformer is less than 100 kV. How does this 

result differ for a generation resource with two or more step-up transformers where the 

last transformer in the series operates at 100 kV or above, for example, a 50 MVA 

generator first steps up through a 23 kV transformer on the low side and 69 kV on the 

high side and then immediately steps up through a second transformer at the same site 

with less than 100 kV on the low side and above 100 kV on the high side?

c. Inclusion I3 (Blackstart Resources Identified in the 

Transmission Operator’s Restoration Plan)

66. Inclusion I3 identifies as part of the bulk electric system “Blackstart Resources 

identified in a Transmission Operator’s restoration plan.” NERC explains that blackstart 

resources are “vital” for the reliable operation of the bulk electric system and are included 
Docket Nos. RM12-6-000 and RM12-7-000 - 43 -

“regardless of their size (MVA) or the voltage at which they are connected.”86 NERC

further states that including blackstart resources is consistent with the Registry Criteria,

which provide that “any generator, regardless of size, that is a blackstart unit material to 

and designated as part of a transmission operator entity’s restoration plan” is eligible for 

registration.87 

67. We agree with NERC that inclusion of blackstart resources in the definition is 

vital to reliability and is an improvement to the definition. We seek clarification whether

the term “restoration plan” refers to the system restoration plans required in the 

Emergency Preparedness and Operations (EOP) Reliability Standards or included in a 

Commission approved tariff.

88 

68. NERC states that first posting of the revised definition included “cranking paths”

for blackstart resources due to a concern about “the possibility of having Blackstart 

Resources without a ‘guaranteed’ path” to the [bulk electric system].”89 NERC explains 

 86 NERC BES Petition at 18. 

87 Id. (emphasis added).

88 Reliability Standard EOP-005-1, System Restoration Plans, requires a 

transmission operator to create “a restoration plan to reestablish its electric system in a 

stable and orderly manner in the event of a partial or total shutdown of its system.” 

89 NERC BES Petition at 47. The NERC Glossary defines “Cranking Path” as “[a]

portion of the electric system that can be isolated and then energized to deliver electric 

power from a generation source to enable the startup of one or more other generating 

units.” See also the Regional Bulk Electric System Definition Coordination Group 

concept paper that recommends including the designated cranking paths for the blackstart 

(continued...)
Docket Nos. RM12-6-000 and RM12-7-000 - 44 -

that “a number of commenters complained that this was improperly bringing distribution 

level Elements into the [bulk electric system], as many Cranking Paths are at the 

distribution level” and “also pointed out that this was an illusory proposition as intended 

Cranking Paths are not always the ones used in actual restoration.”90 As a result of the 

industry feedback, NERC deleted cranking paths from the revised definition with the 

understanding that the issue would be revisited in Phase 2 of the BES project. According 

to NERC, “this approach would maintain status quo on this topic, consistent with Order 

Nos. 743 and 743-A, while providing for a full discussion and consideration of the issue 

in a less time constrained environment.”91 .”92 Subsequently, however, the topic of 

cranking paths was deleted from the scope of the Phase 2 BES project.93 In light of the 

 

resources available at http://www.nerc.com/docs/standards/sar/Project_2010-

17_Concept_Paper.pdf.

90 Id. 

91 Id. NERC’s Project 2010-17, the “Phase 2 BES Project.”

92 Id. NERC’s Project 2010-17, the “Phase 2 BES Project.”

93 The February 21-23, 2012 meeting notes from the Project 2010-17 Definition of 

Bulk Electric System Phase 2 Standard Drafting Team states that “the SDT decided to 

delete the Cranking Path reference in the [Phase 2] SAR.” The reasons for the deletion 

included “that Cranking Paths reach down into distribution and thus shouldn’t be 

included in the definition,” and “that this issue was debated in Phase 1 and resolution was 

obtained,” and “that Cranking Paths were only needed when an entity was in restoration 

mode so it wasn’t needed in the definition.” However, the same document states some 

commenters believe “that Cranking Paths were only needed when an entity was in 

restoration ...and...that this was a reason to have it in the definition.” See Meeting Notes 

from the Project 2010-17 Definition of Bulk Electric System Phase 2 Standard Drafting 

Team, February 21-23, 2012, at Page 5, available at

(continued...)
Docket Nos. RM12-6-000 and RM12-7-000 - 45 -

decision not to further pursue a possible revision to the bulk electric system definition 

pertaining to cranking paths, the Commission is concerned whether a reliability gap 

exists with regard to cranking paths. Cranking paths constitute a basic element of system 

restoration, and it is unclear whether reliability can be adequately maintained when 

blackstart generators are defined as part of the bulk electric system but not the 

transmission paths that are used to deliver the energy from blackstart generators to the 

integrated transmission system. We also recognize that cranking paths may implicate 

facilities used in local distribution. Accordingly, we seek comment on whether a 

reliability gap may exist with regard to cranking paths and, if so, what potential 

approaches are appropriate to remove the gap. We also seek comment on the appropriate 

role, if any, of state regulators in ensuring that energy from blackstart generation is 

reliably delivered through cranking paths to restart the system after an event. 

d. Inclusion I4 (Dispersed Power Producing Resources) 

69. Inclusion I4 identifies as part of the bulk electric system: 

Dispersed power producing resources with aggregate capacity 

greater than 75 MVA (gross aggregate nameplate rating) utilizing a 

system designed primarily for aggregating capacity, connected at a 

common point at a voltage of 100 kV or above.

 

http://www.nerc.com/docs/standards/dt/Meeting_Notes-Project_2010-17_DBESFebruary_21-23,_2012.pdf.
Docket Nos. RM12-6-000 and RM12-7-000 - 46 -

70. NERC explains that this inclusion is intended “to accommodate the effects of 

variable generation” on the bulk electric system.94 NERC further states that even though 

inclusion I4 could be considered subsumed in Inclusion I2 (generating resources), NERC 

believes it is appropriate “to expressly cover dispersed power producing resources 

utilizing a system designed primarily for aggregating capacity.”95

71. We believe that inclusion I4 provides useful granularity in the bulk electric system 

definition. To better understand the application of inclusion I4, we seek comment 

whether this provision includes as part of the bulk electric system the individual elements 

(from each energy-producing resource at the site through the collector system to the 

common point at a voltage of 100 kV or above) used to aggregate the capacity and any 

step-up transformers used to connect the system to a common point at a voltage of 

100 kV or above. 

e. Inclusion I5 (Static or Dynamic Reactive Power Devices)

72. Inclusion I5 identifies as part of the bulk electric system: 

Static or dynamic devices (excluding generators) dedicated to 

supplying or absorbing Reactive Power that are connected at 100 kV 

or higher, or through a dedicated transformer with a high-side 

voltage of 100 kV or higher, or through a transformer that is 

designated in Inclusion I1. 

 94 NERC BES Petition at 18.

95 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 47 -

NERC explains that this inclusion is the technical equivalent of inclusion I2 (generating 

resources), for reactive power devices and points out that the existing definition is unclear 

as to how these devices are treated. 96 NERC states inclusion I5 provides clarity by 

“providing specific criteria for Reactive Power devices, thereby further limiting 

subjectivity and the potential for discretion” in the application of the revised definition.

97

73. The Commission agrees with NERC that this inclusion adds clarity to the 

application of the bulk electric system definition by providing specific criteria for 

reactive power devices. For cases where the reactive power device is connected through 

a transformer designated in inclusion I1, we seek comment on whether both the reactive 

power device and the transmission elements connecting the reactive power device to the 

transformer are included as part of the bulk electric system pursuant to inclusion I5.

2. Exclusions

74. NERC states that the proposed definition identifies four facilities configurations 

that should not be included in the bulk electric system: (1) radial systems, (2) behind-themeter generating units, (3) local networks, and (4) retail customer reactive power devices. 

75. We agree that the proposed definition’s exclusions provide clarity and granularity. 

For example, the exclusion of generating units on the customer’s side of the retail meter 

that serves all or part of the retail load (exclusion E2) and the exclusion for reactive 

power devices owned and operated by a retail customer for its own use (exclusion E4)

 96 Id.

 

97 Id. 
Docket Nos. RM12-6-000 and RM12-7-000 - 48 -

provide reasonable limitations on bulk electric system elements. While we believe that 

the exclusions provide added clarity, we also seek comment on certain aspects of 

exclusions E1 and E3 to ensure a more complete understanding of their application. 

a. Exclusion E1 (Radial Systems)

76. Exclusion E1 provides as follows:

Radial systems: A group of contiguous transmission Elements that

emanates from a single point of connection of 100 kV or higher and:

a) Only serves Load. Or,

b) Only includes generation resources, not identified in 

Inclusion I3,

with an aggregate capacity less than or equal to 75 MVA 

(gross nameplate rating). Or,

c) Where the radial system serves Load and includes 

generation resources, not identified in Inclusion I3, with an 

aggregate capacity of non-retail generation less than or equal 

to 75 MVA (gross nameplate rating).

Note – A normally open switching device between radial systems, 

as depicted on prints or one-line diagrams for example, does not 

affect this exclusion.

NERC states that radial facilities are excluded under the currently effective bulk electric 

system definition, and the detailed criteria in the revised definition provide enhanced 

clarity.

98 We seek comment on our understanding and NERC’s explanation of exclusion 

E1 in order for the Commission to ensure application of exclusion E1 is consistent. Also, 

we seek comment to determine if the configurations covered by Conditions (a), (b), or 

(c) of exclusion E1 remove from the bulk electric system generation connected to a radial 

 98 Id.
Docket Nos. RM12-6-000 and RM12-7-000 - 49 -

system that otherwise satisfies inclusion I2. The Commission would like to ensure that

the conditions in exclusion E1 will not lead to conflicting results when applying inclusion 

I2 and exclusion E1.

77. As stated above, the radial exclusion applies to “a group of contiguous 

transmission Elements that emanates from a single point of connection of 100 kV or 

higher....” While the term “Elements” includes the term generator,99 the use of the term 

“transmission” before “Elements” indicates that exclusion E1 applies only to 

transmission elements. The phrase “transmission Elements” in this provision does not

apply to generating resources that are bulk electric system resources pursuant to inclusion 

I2 (generating resources), connected to a radial line operated at 100 kV above.100 

 99 “Element” is defined in the NERC Glossary as “[a]ny electrical device with 

terminals that may be connected to other electrical devices such as a generator, 

transformer, circuit breaker, bus section, or transmission line. An element may be 

comprised of one or more components.” (emphasis added). 

100 Our understanding comports with the NERC standard drafting team’s 

explanation in response to industry comments that generation resources connected within 

the radial system are not excluded pursuant to exclusion E1. See NERC BES Petition, 

Exh. D, Consideration of Comments Report, at 223 (stating that “Exclusion E1 is an 

exclusion for the contiguous transmission Elements connected at or above 100 kV. 

Generation resources connected within the radial system are qualifiers for this 

exclusion.”).
Docket Nos. RM12-6-000 and RM12-7-000 - 50 -

i. Definition of ‘Radial Systems’ and Condition (a) - Radials only 

Serving Load

78. NERC stated that it developed exclusion E1 to provide enhanced clarity as 

compared to the existing definition.101 Exclusion E1 defines the term ‘radial systems’ as 

“a group of contiguous transmission Elements that emanates from a single point of 

connection of 100 kV or higher.” The Commission seeks comment on how NERC’s 

proposal would be applied in the three scenarios described below. 

79. Figure 1 below depicts facilities configurations in which all of the 230 kV and 

69 kV transmission elements emanate from a single point of connection of 100 kV or 

higher. The Commission seeks comment on whether each of the radial systems shown in 

figure 1, the 230 kV elements above each transformer to the point of connection to each 

230 kV line, respectively, are excluded from the bulk electric system pursuant to 

exclusion E1. 

 101 NERC BES Petition at 18.
Docket Nos. RM12-6-000 and RM12-7-000 - 51 -

Figure 1

Two Radial Systems Eligible for Exclusion E1

80. Another scenario shown in figure 2 below depicts a configuration containing a 

115 kV loop, with the configuration emanating from two points of connection of 100 kV 

or higher. We seek comment whether, in this configuration, the 115 kV and 230 kV 

elements above Transformers 1 and 2 to the points of connection to the two 230 kV lines 

would be excluded from the bulk electric system pursuant to exclusion E1. Is the 

configuration shown in figure 2 more appropriately analyzed pursuant to the “local 

network” exclusion E3 and, if so, what if any elements operated at or above 100 kV

would be excluded pursuant to exclusion E3? 
Docket Nos. RM12-6-000 and RM12-7-000 - 52 -

Figure 2

Networked Configuration w/115 kV Loop 

81. The Commission agrees with NERC that ‘radial systems’ only serving load and 

emanating from a single point of connection of 100 kV or higher should be excluded 

from the bulk electric system. The Commission is concerned that the exclusion could 

allow elements operating at 100 kV or higher in a configuration that emanates from two 

or more points of connection to be deemed “radial” even though the configuration 

remains contiguous through elements that are operated below 100 kV. For example, 

figure 3 below depicts a configuration with two points of connection of 100 kV or higher

that are contiguous through a 69 kV loop. We seek comment on how to evaluate the 

configuration in figure 3 vis-à-vis the radial system definition and whether it is 

appropriate to examine the elements below 100 kV to determine if the configuration 
Docket Nos. RM12-6-000 and RM12-7-000 - 53 -

meets the exclusion E1 definition for radial systems. In other words, does figure 3 depict

a system emanating from two points of connection at 230 kV and, therefore, the 230 kV 

elements above the transformers to the points of connection to the two 230 kV lines 

would not be eligible for the exclusion E1 notwithstanding the connection below 100 kV?

Figure 3

Networked Configuration w/69 kV Loop 

ii. Condition (b) – Radials With Limited Generation and Condition 

(c) – Radials With Limited Generation and Load

Condition (b) of exclusion E1 provides that a radial system is excluded if it “[o]nly 

includes generation resources, not identified in Inclusion I3, with an aggregate capacity 

less than or equal to 75 MVA (gross nameplate rating).” Proposed Condition (c) of 

exclusion E1, excludes radial systems “[w]here the radial system serves Load and 
Docket Nos. RM12-6-000 and RM12-7-000 - 54 -

includes generation resources, not identified in Inclusion I3, with an aggregate capacity

of non-retail generation less than or equal to 75 MVA (gross nameplate rating).” 

82. NERC states that Conditions (b) and (c) are “intended to address the 

circumstances of small utilities (including municipal utilities and cooperatives).”102 The 

NERC BES Petition, including the Exhibit E record of development, does not further 

explain the need for, or the impact of, these proposed provisions. Accordingly, we seek 

comment regarding the specific circumstances that Conditions (b) and (c) are intended to 

address. 

83. Because Condition (b) describes generation connected to a radial system with no 

load and Condition (c) describes generation connected to a radial system with generation 

and load, it appears that the power generated on these radial systems would, by design, be 

delivered or injected to the bulk electric system and transported to other markets. In this 

circumstance, it appears that a line 100 kV or above connected to a generator with a 

capacity 75 MVA or below would not be included in the bulk electric system. The 

Commission seeks comment on the appropriateness of excluding such radials. 

iii. Normally Open Switches

84. Proposed exclusion E1 includes a “note” stating that a “normally open switching 

device between radial systems, as depicted on prints or one-line diagrams for example, 

does not affect this exclusion.” NERC states that this note is intended to address a 

 102 NERC BES Petition at 19.
Docket Nos. RM12-6-000 and RM12-7-000 - 55 -

common network configuration in which two separate sets of facilities that, each standing 

alone, would be recognized as radial systems but are connected by a switch that is set to 

the open position for reliability purposes.103

85. NERC explains that these switches are installed by entities to provide greater 

reliability to their end-use customers. For example, when the entity schedules 

maintenance activities on a radial line or an unscheduled outage occurs that impacts a 

single point of supply to the radial line which could cause the disruption of power supply 

to the end-use customers served by the line, the switch allows the entity to use another 

feed on the connected radial line. 

86. Figure 4 below illustrates a configuration with a normally open switch. 

 103 NERC BES Petition at 19-20.
Docket Nos. RM12-6-000 and RM12-7-000 - 56 -

Figure 4

69 kV Networked Configuration with Normally Open Switch

NERC states that “[t]he concept that two sets of radial facilities that are normally 

unconnected to each other should be subject to...applicable Reliability Standards during 

the limited time periods when they are connected by the closing of the normally open

switch in the maintenance-related or outage-related circumstances described above would 

be fundamentally impractical and unworkable (from both the entity’s perspective and the 

ERO’s perspective), and would misapprehend this very common, reliability-driven 

facilities configuration.”104

87. NERC states that “a normally open switch” will be identified in documents such

as prints or one-line diagrams and that “[t]he concept and usage of the ‘normally open 

 104 Id. at 20-21.
Docket Nos. RM12-6-000 and RM12-7-000 - 57 -

switch’ in such configuration is well understood in the electric utility industry.”105 We 

seek comment on NERC’s characterization and whether the phrase “normally open” is 

subject to interpretation or misunderstanding, or whether a “normally open” 

configuration is potentially difficult to oversee. Further, we seek comment on the need of 

transmission operators or other functional entities to study the system impacts of the 

closing of a “normally open” switch, or to take other steps to ensure awareness of the 

impacts of the loop that is created by the closing of the switch if the closed loop is not 

included as part of the bulk electric system. 

b. Exclusion E2 (Behind the Meter Generation)

88. Exclusion E2 excludes “[a] generating unit or multiple generating units on the 

customer’s side of the retail meter....” The Commission believes that this is an 

appropriate exclusion that provides additional clarity and granularity to the definition of 

bulk electric system.

c. Exclusion E3 (Local Networks)

89. As noted above, we believe that a common understanding of the exclusions 

promotes consistent application of the definition in identifying bulk electric system 

elements. In particular, as discussed in greater detail below, we seek comment on the 

following issues with respect to the application of exclusion E3: (1) whether generation 

resources are excluded by this exclusion; (2) how the exclusion applies to a looped lower 

 105 Id. at 19.
Docket Nos. RM12-6-000 and RM12-7-000 - 58 -

voltage system; (3) whether the 300 kV ceiling is appropriate for the application of the 

exclusion; (4) whether the prohibition for generation produced inside a local network is 

not transporting power to other markets outside the local network applies in both normal 

and emergency operating conditions.

90. Exclusion E3 defines the term local networks as:

A group of contiguous transmission Elements operated at or above 100 kV 

but less than 300 kV that distribute power to Load rather than transfer 

bulk-power across the interconnected system. LN’s emanate from multiple 

points of connection at 100 kV or higher to improve the level of service to 

retail customer Load and not to accommodate bulk-power transfer across 

the interconnected system.

Exclusion E3 also identifies three conditions that must be satisfied for the exclusion to 

apply: (a) limit on connected generation to 75 MVA aggregate capacity of non-retail 

generation (gross nameplate rating); (b) power flows only into the local network and does 

not transfer through the ‘local network’; and (c) the local network is not part of a 

flowgate or transfer path.

91. NERC states the design and operation of local networks is such that at the point of 

connection with the interconnected transmission network is similar to that of a radial 

facility, in particular that power always flows in a direction from the interconnected 

transmission network into the local network.106 Further, according to NERC, “[l]ocal 

 106 NERC BES Petition at 22.
Docket Nos. RM12-6-000 and RM12-7-000 - 59 -

networks provide local electrical distribution service and are not planned, designed or 

operated to benefit or support the balance of the interconnected transmission network.”107

92. Similar to our discussion of the definition of ‘radial systems’ in exclusion E1, the 

exclusion E3 local network exclusion applies to transmission Elements, but does not 

apply to generation resources connected to a local network that otherwise satisfy 

inclusion I2. 

93. NERC states in the LN Technical Paper, that “Exclusion E3 was specifically 

designed to capture for exclusion those high voltage non-radial facilities being used for 

the local distribution of energy.”108 The paper further provides:

Their [local network] design and operation is such that at the point 

of connection with the interconnected electric transmission network, 

their effect on that network is similar to that of a radial facility, 

particularly in that flow always moves in a direction that is from the 

BES into the facility. Any distribution of parallel flows into the 

local network from the BES, as governed by the fundamentals of 

parallel electric circuits, is negligible, and, more importantly, is 

overcome by the Load served by the local network, thereby 

ensuring that the net actual power flow direction will always be into 

the local network at all interface points. The presence of a local 

network is not for the operability of the interconnected electric 

transmission network; neither will the local network’s separation or 

retirement diminish the reliability of the interconnected electric 

transmission network.”109

 

 107 Id. 

108 NERC BES Petition, Exhibit G at 2.

109 Id. 
Docket Nos. RM12-6-000 and RM12-7-000 - 60 -

94. We seek further explanation and comment on the statement above that “neither 

will the local network’s separation or retirement diminish the reliability of the 

interconnected electric transmission network.” While a radial facility emanates from one 

point of connection to the interconnected transmission network, a local network by 

definition has multiple points of connection to the interconnected transmission network. 

Thus, regarding a local network, a contingency situation may arise where one of the 

multiple connections to the interconnected transmission network separates, while other 

local network connections maintain connectivity with the bulk electric system. We seek 

comments to better understand how an entity with a candidate local network would 

analyze such contingencies to determine potential impacts to the reliable operation of the 

interconnected transmission network.

i. Contiguous Transmission Elements and the 100 kV Lower 

Limit/300 kV Cap

95. As stated above, exclusion E3 defines local networks as “[a] group of contiguous

transmission Elements operated at or above 100 kV but less than 300 kV that distribute 

power to Load rather than transfer bulk-power across the interconnected system.” While 

the local network exclusion applies to contiguous transmission elements operating at a 

minimum of 100 kV, it is unclear how the exclusion applies to a looped lower voltage 

system. For example, figure 5 depicts a 69 kV looped system emanating from two points 

of connection at 100 kV or higher. 
Docket Nos. RM12-6-000 and RM12-7-000 - 61 -

Figure 5

Networked Configuration w/69 kV Loop

The configuration in figure 5 depicts a group of elements that are contiguous through a 

69 kV loop. We seek comment whether the configuration in figure 5 qualifies as a local 

network and, in particular, whether the configuration satisfies the condition that a local 

network consists of “a group of contiguous transmission Elements operated at or above 

100 kV....”

96. NERC states the selection of a 300 kV cap for the applicability of an exclusion for 

a local network was based upon recent NERC standards development work in Project 

2006-02 “Assess Transmission Future Needs and Develop Transmission Plans” which 

sets a voltage level of 300 kV to differentiate extra high voltage (EHV) facilities from 

high voltage facilities acting as a threshold to distinguish between expected system 
Docket Nos. RM12-6-000 and RM12-7-000 - 62 -

performance criteria.110 NERC states that it seeks to establish consistency in the 

limitations placed on the exclusion applicability for local network facilities, and has 

therefore adopted this 300 kV level to ensure that EHV facilities are not subject to this 

exclusion.111 NERC provides a “realistic example of the electrical interaction between a 

typical local network and the [bulk electric system]” in the LN Technical Paper.112 The 

example depicted in Appendix 1 of the Technical Paper shows a local network operating 

at 115 kV. The NERC Technical Paper does not provide examples of a local network 

operating within the 200 to 300 kV range, for example showing 230 kV facilities 

operating in a local network. We are concerned whether the 300 kV ceiling is 

appropriate and reflects actual system configurations that serve local distribution, the 

stated purpose of the local network exclusion.113 Accordingly, we seek comment 

whether (and why or why not) the 300 kV ceiling is appropriate for the application of 

exclusion E3 and requests examples of systems between 200 and 300 kV that would 

qualify for this exclusion.

114

 110 NERC BES Petition at 23.

111 Id. at 23 and Exh. G at 4.

112 Id., Exh. G at 5.

113 The Commission notes additional differentiations may directly address this 

concern, such as applying a load limit, which was raised by the NERC System Analysis 

and Modeling Subcommittee (SAMS) in its effort to support Phase 2 of the bulk electric 

system definition project as a criterion to limit the exclusion of large cities and regions.

114 To the extent the information requested is confidential, commenters may 

provide the information pursuant to 18 C.F.R § 388.112 of the Commission’s regulations. 
Docket Nos. RM12-6-000 and RM12-7-000 - 63 -

ii. Criterion (a) – Limits on Connected Generation

97. Exclusion E3 criterion (a) provides that the local network and its underlying 

elements do not include the blackstart resources identified in inclusion I3 and do not have

an aggregate capacity of non-retail generation greater than 75 MVA gross nameplate 

rating. In addition, criterion (a) does not limit the amount of generation besides “nonretail generation” connected to the local network. The Commission agrees with NERC

that “local networks” do not include blackstart resources and agrees with the limits on the 

connected generation imposed by this exclusion. 

iii. Criterion (b) – Power Flows only into the Local Network

98. Exclusion E3 criterion (b) specifies that to be eligible for the exclusion, power can 

only flow into the local network and the local network does not transfer energy 

originating outside the local network for delivery through the local network. Thus, it 

appears that, pursuant to criterion (b), generation produced inside a local network is not 

transporting power to other markets outside the local network. The Commission 

understands that criterion (b) applies in both normal and emergency operating 

conditions.115

 115 See NERC BES Petition, Exh. E at 59 (“The Commission directed NERC to 

revise its BES definition to ensure that the definition encompasses all Facilities necessary 

for operating an interconnected electric Transmission network. The SDT interprets this 

to include operation under both normal and Emergency conditions....”).
Docket Nos. RM12-6-000 and RM12-7-000 - 64 -

iv. Criterion (c) – Not Part of a Flowgate or Transfer Path

99. Exclusion E3 criterion (c) specifies a “local network” does not contain a 

monitored facility of a permanent flowgate in the Eastern Interconnection, a major 

transfer path within the Western Interconnection, or a comparable monitored facility in 

the ERCOT or Quebec Interconnections, and is not a monitored facility included in an 

interconnection reliability operating limit. The Commission believes that this is an 

appropriate criterion.

d. Exclusion E4 (Reactive Power Devices)

100. Exclusion E4 excludes from the bulk electric system “Reactive Power devices 

owned and operated by the retail customer solely for its own use.” NERC explains that 

exclusion E4 is the technical equivalent of Exclusion E2 for reactive power devices and 

that the currently effective bulk electric system definition is unclear as to how these 

devices are to be treated. We believe that this is an appropriate exclusion that provides 

additional clarity and granularity to the definition of bulk electric system.

Summary

101. In sum, we propose to approve NERC’s revised definition of the term bulk electric 

system, including the specific inclusions and exclusions. We believe that NERC’s 

proposal provides a reasonable basis for the identification of bulk electric system 

elements and appears to improve upon the currently effective definition by: (1) removing 

the language that provides for regional discretion, (2) removing the language “generally 

operated at...” so as to create a clear 100 kV threshold; and (3) providing additional 

clarity and granularity. Above, we have asked for comment on a series of questions 
Docket Nos. RM12-6-000 and RM12-7-000 - 65 -

regarding the applicability of the “core” definition and specific inclusions and exclusions. 

We believe that comments on these questions will assist in providing further clarity and 

understanding of the NERC proposal. We further note that although we propose to 

approve the definition in this rulemaking, the responses to our questions are intended to 

guide the Commission as to whether other action is necessary, for example, by directing 

NERC to develop a further modification to the definition or inclusions/exclusions 

pursuant to section 215(d)(5) of the FPA. 

C. The Commission Proposes to Approve the NERC Rules of Procedure 

that Provide a Case-Specific Exception Process 

102. As described above, in Docket No. RM12-7-000, NERC submitted proposed 

revisions to its Rules of Procedure that provide procedures for requesting and receiving 

case-specific exception from the definition of bulk electric system.116

103. Pursuant to FPA section 215(f), we propose to find that the exception process is 

just, reasonable, not unduly discriminatory or preferential, and in the public interest and 

satisfies the requirements of section 215(c). Further, we believe that the proposal 

satisfies the statement in Order No. 743 that NERC establish an exception process for 

excluding facilities that are not necessary for the reliable operation of the interconnected 

transmission network from the definition of the bulk electric system.

117 

 116 See Section I.D.2 above for further description of NERC’s proposed revisions 

to the NERC Rules of Procedure.

117 See Order No. 743, 133 FERC ¶ 61,150 at P 16. 
Docket Nos. RM12-6-000 and RM12-7-000 - 66 -

104. NERC explains that it was not feasible to develop a single set of technical criteria 

that would be applicable to all exception requests so it developed the Detailed 

Information Form to ensure that a consistent baseline of technical information is provided 

for NERC to make a decision on all exception requests. This information and the 

proposed exception process allows NERC to provide consistent determinations on 

exception requests submitted from different regions involving the same or similar facts 

and circumstances, and allows NERC to take into account the aggregate impact on the 

bulk electric system of approving or denying all the exception requests. Finally, the 

exception process includes provisions for reporting information that may alter the status 

of an approved exception, verifying whether an exception continues to be warranted, and 

revoking an exception that is no longer warranted.118 Thus, we believe that this process 

is equally efficient and effective as the Order No. 743 directive to establish an exception 

process for excluding facilities that are not necessary for the reliable operation of the 

interconnected transmission network. In addition, we believe that NERC’s proposal 

appears to be clear, transparent, and uniformly applicable.. 

105. NERC and the industry should be commended for the development of the 100 kV 

threshold, the identified inclusions and exclusions, and the exception process. Together, 

this package of important reforms will bring valuable improvements to the process of 

identifying those facilities that are necessary for the operation of the interconnected 

 118 NERC ROP Petition at 16. 
Docket Nos. RM12-6-000 and RM12-7-000 - 67 -

transmission network, and thus should be included in the definition of bulk electric 

system. For these reasons, we propose to approve NERC’s proposals, as discussed 

above. 

106. The Commission seeks input from NERC and the industry, however, as to 

additional reforms that may be needed to the definition or to the Rules of Procedure to 

ensure that, over the long term, the facilities necessary to the reliability of the 

interconnected transmission network are captured in its definition. In particular, we note 

that while establishing a “bright-line” threshold of 100 kV has significant advantages, it 

may not capture all facilities that are necessary for the operation of the interconnected 

transmission network that fall below that threshold. As the Commission indicated in 

Order No. 743 and Order No. 743-A, its goal is that the definition of bulk electric system 

should include all facilities necessary for the operation of the interconnected transmission 

network, except for local distribution. Although the Commission indicated that one way 

to meet this goal was to establish a 100 kV “bright-line” threshold, the Commission also 

made clear that the “bright-line” threshold would be a “first step or proxy” in determining 

which facilities should be included in the bulk electric system.119 Indeed, the 

Commission, agreeing with commenters, held that NERC should not necessarily stop at 

100 kV and should, through the development of the exception process, ensure that 

“critical” facilities operated at less than 100 kV, and that the Regional Entities determine 

 119 Order No. 743-A, 134 FERC ¶ 61,210 at P 40. 
Docket Nos. RM12-6-000 and RM12-7-000 - 68 -

are necessary for operating the interconnection network.

120 The Commission clarified 

that including sub-100 kV facilities should be done in an “appropriate and consistent” 

manner.

121 

107. Recent events reinforce the Commission’s statements in Order Nos. 743 and 743-

A with respect to ensuring that sub-100 kV facilities, as appropriate, are included in the 

bulk electric system. The September 2011 Blackout Report concluded that certain sub100 kV facilities, which were not designated as bulk electric system facilities, contributed 

to the cascading blackout affecting San Diego, California.122 The September 2011 

Blackout Report makes clear that, while certain sub-100 kV facilities can affect bulk 

electric system reliability, entities may not study or communicate their impacts and take 

appropriate action unless they are properly designated as part of the bulk electric 

system.123 Thus, the September 2011 Blackout Report recommended that “WECC, as the 

[Regional Entity], should lead other entities, including [transmission operators] and 

[balancing authorities], to ensure that all facilities that can adversely impact [Bulk-Power 

System] reliability are either designated as part of the [bulk electric system] or otherwise 

incorporated into planning and operations studies and actively monitored and alarmed in 

 120 Order No. 743, 133 FERC ¶ 61,150 at P 121. 

121 Order No. 743-A, 134 FERC ¶ 61,210 at P 103.

122 See September 2011 Blackout Report at 96-97.

123 Id. at 7-8.
Docket Nos. RM12-6-000 and RM12-7-000 - 69 -

[real-time contingency analysis] systems.”124 Although the Blackout Report addressed an 

event in WECC, the recommendations in the Blackout Report should not be limited only 

to the Western interconnection. Indeed, as explained above, the recommendation in the 

September 2011 Blackout Report that sub-100 kV facilities be reviewed for inclusion in 

the bulk electric system is consistent with the Commission’s findings in Order Nos. 743 

and 743-A. 

108. The NERC proposals at issue in this NOPR take steps to address the treatment of 

sub-100 kV facilities, as well as other facilities, necessary for the operation of the 

interconnected transmission network, through the exception process, which provides an 

avenue for Regional Entities, planning authorities, reliability coordinators, transmission 

operators, transmission planners, balancing authorities, and owners of system elements to 

submit a request to include a facility in the bulk electric system. We believe that regional 

entities, reliability coordinators, transmission owners, transmission operators, balancing 

authorities and other registered entities need to evaluate their sub-100 kV facilities, as 

well as other facilities, that are necessary to operate the interconnected transmission 

network in an “appropriate and consistent” manner to determine their potential impacts 

on bulk electric system reliability and, based on that review, seek to include those 

facilities in the bulk electric system through this proposed exception process.

125 These 

 124 Id. at 96, Recommendation 17.

125 NERC’s performance of a final review of exception requests under the Rules of 

Procedure should ensure national consistency under that procedure.
Docket Nos. RM12-6-000 and RM12-7-000 - 70 -

entities have the in-depth, “on the ground” knowledge and expertise of what facilities are 

critical to reliable operations in their local or regional area. As a result, we believe they 

bear primary responsibility to analyze the elements within their purview to ensure that the 

right facilities are included in the bulk electric system. We seek comment on how the 

relevant entities will conduct the review and seek inclusion of facilities.

109. The Commission expects that these entities will use the exception process as 

contemplated to include sub-100 kV facilities, and other facilities, necessary for the 

operation of the interconnected transmission network in the bulk electric system. 

Nonetheless, we note that relying on these entities alone may, in certain limited 

circumstances, have the potential to leave out sub-100 kV facilities necessary for the 

operation of the interconnected transmission network. For example, NERC or the 

Commission may, in the performance of their statutory functions and general oversight of 

reliability matters, discover additional sub-100 kV facilities that should be included. The 

joint NERC-FERC September 2011 Blackout Report, as noted above, is a prime example 

of this possibility. In addition, while we recognize that the owners and operators of the 

power grid take their reliability obligations seriously, there may be instances when not all 

of the facilities necessary for the operation of the interconnected transmission network 

are included in the bulk electric system. 

110. Thus, while we propose to approve the package of reforms submitted by NERC, 

we seek comment on how the relevant entities will seek inclusion of sub-100 kV 

elements to ensure that all facilities that are necessary for the operation of the bulk power 

system are designated as bulk electric system elements consistent with the discussion 
Docket Nos. RM12-6-000 and RM12-7-000 - 71 -

above. These comments also should aid NERC, industry, and the Commission in further 

efforts, already underway in Phase 2 , to refine the bulk electric system definition, the 

inclusions and exclusions, and the exception process. 

111. In addition to general comments on the discussion above, we seek comments on 

the role NERC should have in initiating the designation of (or directing others to initiate 

the designation of) sub-100 kV facilities, or any other facilities, necessary for the 

operation of the interconnected transmission network for inclusion in the bulk electric 

system. The exception process as proposed does not provide that NERC may initiate an 

exception request. Given its statutory functions to develop and enforce Reliability 

Standards and its continent-wide perspective, NERC has technical understanding that 

may provide valuable assistance in the identification of bulk electric system facilities and 

elements. For example, NERC conducts disturbance assessments, oversees compliance 

monitoring and conducts seasonal assessments, all of which provide information and 

understanding regarding the operations of the bulk electric system. The Commission 

seeks comment on the role NERC should have in designating sub-100 kV facilities, and 

other facilities, for inclusion in the bulk electric system, directing Regional Entities or 

others to conduct such reviews, or itself nominating an element to be included in the bulk 

electric system.

126

 126 Since NERC makes the final determination pursuant to the proposed process, a 

modified process may need to be created if NERC has a role in submitting requests. For 

example, a different entity would likely need to make the final determination.
Docket Nos. RM12-6-000 and RM12-7-000 - 72 -

112. We also seek comment on the role the Commission should have with respect to the 

designation of sub-100 kV facilities, or other facilities, necessary for the operation of the 

interconnected transmission network for inclusion in the bulk electric system. As noted 

above, there may be circumstances (like the September 2011 Blackout Report) where the 

Commission, through the performance of its statutory functions, may conclude that 

certain sub-100 kV facilities not already included in the bulk electric system are 

necessary for the operation of the interconnected transmission network and thus should 

be included in the bulk electric system. While, as noted above, we expect that regional 

entities and others will take affirmative steps to review and include sub-100 kV elements 

and facilities, and other facilities, necessary for the operation of the interconnected 

transmission system in the bulk electric system, we seek comment as to how the 

Commission, if necessary, could ensure that such facilities are considered for inclusion in 

the bulk electric system. We also seek comment on instances when the Commission 

itself should designate (or direct others to designate) sub-100 kV facilities, or other 

facilities, necessary for the operation of the interconnected transmission grid for inclusion 

in the bulk electric system.127

1. Technical Review Panel

113. NERC’s proposed exception process provides that “[t]he Regional Entity shall not 

recommend Disapproval of the Exception Request in whole or in part without first 

 127 The Commission contemplates that, if it were to take such a step, it would 

provide an opportunity for notice and comment.
Docket Nos. RM12-6-000 and RM12-7-000 - 73 -

submitting the Exception Request for review to a Technical Review Panel and receiving 

its opinion...”128 The technical review panel member must have the required technical 

background, must not have participated in the review of the exception request, and not 

have a conflict of interest in the matter.129 The Regional Entity is not bound by the 

opinion of the panel, but the panel’s evaluation becomes part of the record associated 

with the exception request and provided to NERC. 

114. We see value in the Regional Entity receiving the independent opinion of a 

qualified technical review panel. NERC, however, does not explain why the proposed 

Rules only require a technical review panel to provide an opinion where the Regional 

Entity recommends disapproval of an exception request. We seek comment from NERC 

explaining whether it considered obtaining the opinion of a technical panel for all 

Regional Entity recommendations and, if so, why the review is only required when a 

Regional Entity disapproves a request. Further, we seek comment on whether NERC 

should modify the exception process to require Regional Entities to submit all proposed 

determinations to a technical review panel regardless of the recommendation and receive 

the panel’s opinion on each request.

 128 NERC ROP Petition, Att. 1, Proposed App. 5C to the Rules of Procedure, 

section 5.2.4.

129 Id. at App. 5C, section 5.3.
Docket Nos. RM12-6-000 and RM12-7-000 - 74 -

2. Use of Industry Subject Matter Experts

115. Section 8 of the proposed exception process sets forth the procedures for NERC’s

review of a Regional Entity’s recommendation. The NERC President will appoint a team 

of at least three persons with the technical background to evaluate an exception request. 

The members of the review team must have no financial, contractual, employment or 

other interest in the submitting entity or owner that would present a conflict of interest 

and must be free of any conflicts of interest in accordance with NERC policies.130 NERC 

states that “at the present time NERC anticipates that its review teams would be drawn 

from NERC staff resources, supplemented by contractors as necessary particularly where 

needed to provide specific relevant subject matter expertise. However, situations may 

arise in which NERC may need to call on industry subject matter experts to participate as 

members of review teams.”131

116. We support NERC’s proposal to use staff resources, supplemented by contractors 

as necessary, to make up the exception request review teams. We believe that consistent 

appointment of the same NERC staff and contractor resources, based on subject matter 

expertise, will promote a more uniform and consistent review of the Regional Entities’ 

exception request recommendations. 

 130 NERC ROP Petition at 31.

131 Id. at n. 29.
Docket Nos. RM12-6-000 and RM12-7-000 - 75 -

D. The Commission Proposes to Approve NERC’s Detailed Information 

Form 

117. As described above, NERC developed the Detailed Information Form that the 

Regional Entity and NERC can use in evaluating whether or not the elements that are the 

subject of an exception request are necessary for operating the interconnected 

transmission network. The Detailed Information Form encompasses a wide range of 

potential configurations and appears to ensure that a consistent baseline of technical 

information is provided with all exception requests, in addition to the specific 

information and arguments provided by the submitting entity in support of its exception 

request. The information that the applicant may submit in support of an exception 

request will not be limited to the Detailed Information Form. The applicant will be 

expected to submit all relevant data, studies and other information that supports its 

exception request. Further, NERC may ask the submitting entity to provide other data, 

studies and information in addition to the Detailed Information Form and the other 

information included by the applicant in the exception request. 

118. We believe that this information will provide consistency with respect to the 

technical information provided with all exception requests and is an equally efficient and 

effective approach to developing a substantive set of technical criteria for granting and 

rejecting exception requests. Accordingly, we propose to approve the Detailed 

Information Form included in NERC’s filing.
Docket Nos. RM12-6-000 and RM12-7-000 - 76 -

E. The Commission Proposes to Approve NERC’s Implementation Plan 

for the Revised Definition of Bulk Electric System

119. As noted above, NERC requests that the revised definition “should be effective on 

the first day of the second calendar quarter after receiving applicable regulatory approval, 

or, in those jurisdictions where no regulatory approval is required, the revised [bulk 

electric system definition] should go into effect on the first day of the second calendar 

quarter after its adoption by the NERC Board.132

120. NERC also requests that compliance obligations for all elements newly-identified 

to be included in the bulk electric system based on the revised definition should begin 

twenty-four months after the applicable effective date of the revised definition. While the

Commission stated in Order Nos. 743 and 743-A that the transition period should not 

exceed 18 months from the date of Commission approval of the revised definition, the 

Commission also stated that it could approve a longer transition period based on specific 

justification.133 NERC states that sufficient time is needed: (1) to implement transition 

plans in order to accommodate any changes resulting from the revised definition; (2) for 

entities to file for exceptions, and for the Regional Entities and NERC to process those 

exceptions to a final determination, pursuant to the proposed exception process; and 

(3) for owners of facilities and elements that are newly-included in the bulk electric 

system based on the definition to train their personnel on compliance with the Reliability 

 132 NERC BES Petition at 34.

133 Order No. 743, 133 FERC ¶ 61,150 at P 131. 
Docket Nos. RM12-6-000 and RM12-7-000 - 77 -

Standards applicable to the newly-included facilities and elements, so that these entities 

can achieve compliance with applicable Reliability Standards by the end of the transition 

period. We believe that NERC has provided adequate justification for its implementation 

plan, as discussed above. Thus, although NERC’s plan exceeds the 18 month 

implementation period set forth in Order No. 743, we propose to approve NERC’s 

implementation plan. 

F. NERC List of Facilities Granted Exceptions

121. In Order No. 743, the Commission stated that “a Commission staff audit would 

review the application of the exemption criteria developed by NERC in NERC’s or a 

Regional Entity’s determination to approve an exemption for a particular facility.” The 

Commission also stated that “to facilitate such audits, the ERO should maintain a list of 

exempted facilities that can be made available to the Commission on request. NERC can 

decide how best to maintain the list, including determining whether or not to post it on 

the NERC website.”134

122. NERC states that the proposed exception process does not include provisions for 

NERC to maintain a list of facilities that have received exceptions, as this is an internal 

administrative matter for NERC to implement that does not need to be embedded in 

NERC Rules of Procedure.

135 NERC states it will develop a specific internal plan and 

 134 Id. PP 117, 119.

135 NERC ROP Petition at 49. 
Docket Nos. RM12-6-000 and RM12-7-000 - 78 -

procedures for maintaining a list of facilities for which exceptions have been granted. 

Further, NERC explains that it has not yet determined how the list will be organized and 

structured and under what conditions the list will be made available on the NERC web 

site or otherwise made available to any entities other than the Commission, citing 

concerns about confidential information and critical energy infrastructure information.136

123. We understand that NERC is continuing to develop the details on how it will 

maintain the list of facilities that have received exceptions. However, we also consider 

the maintenance of this list of facilities an important feature for tracking exceptions.137 

Thus, we propose that NERC file an informational filing within 90 days of the effective 

date of a final rule, detailing its plans to maintain a list and how it will make this 

information available to the Commission, Regional Entities, and potentially to other 

interested persons. We seek comment from NERC whether this deadline provides 

adequate time for NERC to finalize its plans and submit an informational filing. 

124. While NERC states that it will maintain a list of facilities that have received an 

exception pursuant to the case-specific exception process, the petition does not indicate 

whether NERC will track an entity’s “declassification” of current bulk electric system 

facilities based on the entity’s self-application of the bulk electric system definition. It 

appears that, in some circumstances, the appropriate Regional Entity would receive a 

 136 Id. 

137 Order No. 743, 133 FERC ¶ 61,150 at PP 117, 119.
Docket Nos. RM12-6-000 and RM12-7-000 - 79 -

request that an entity be removed from the NERC Compliance Registry. For example, if 

an entity determines that its entire system satisfies the exclusion E1 for radial systems, 

the entity could apply to the appropriate Regional Entity to be removed from the NERC 

Compliance Registry. However, in other circumstances, it is not clear what, if any, 

notification an entity would provide to NERC or a Regional Entity when the entity selfdetermines that an element is no longer part of the bulk electric system. For example, a 

large utility with hundreds or thousands of transmission lines may initially determine that 

a configuration on its system does not qualify for the exclusion E3 local network 

exclusion, but subsequently determines that the configuration can be excluded. NERC’s 

petition does not indicate whether an entity in such circumstance is obligated to inform 

NERC or the appropriate Regional Entity of that self-determination. It appears that 

NERC and the Regional Entities would need this information for their compliance 

programs, for audit purposes, and to understand the contours of the bulk electric system 

within a particular region. Accordingly, we seek comment on whether NERC’s proposal 

should be modified to include an obligation for the registered entity to inform NERC or 

the Regional Entity of the entity’s self-determination through application of the definition 

and specific exclusions E1 through E4 that an element is no longer part of the bulk 

electric system. 
Docket Nos. RM12-6-000 and RM12-7-000 - 80 -

III. Information Collection Statement

125. The following collection of information contained in this Proposed Rule is subject 

to review by the Office of Management and Budget (OMB) under section 3507(d) of the 

Paperwork Reduction Act of 1995.138 OMB’s regulations require approval of certain 

information collection requirements imposed by agency rules.139 The Commission 

solicits comment on the Commission’s need for this information, whether the information 

will have practical utility, the accuracy of the burden estimates, ways to enhance the 

quality, utility, and clarity of the information to be collected or retained, and any 

suggested methods for minimizing respondents’ burden, including the use of automated 

information techniques. Specifically the Commission asks that any revised burden 

estimates submitted by commenters be supported by sufficient detail to understand how 

the estimates are generated. 

126. In Order No. 693, the Commission approved NERC’s definition of the term bulk 

electric system and the associated information requirements. 

127. In Order No. 743, the Commission directed NERC to develop a revised “bulk 

electric system” definition. The Commission explained that, by directing NERC to 

develop a revised definition, “the Commission is maintaining the status quo (i.e., the 

current bulk electric system definition) until the Commission approves a revised 

 138 44 U.S.C. § 3507(d) (2006).

139 5 C.F.R. § 1320.11 (2011).
Docket Nos. RM12-6-000 and RM12-7-000 - 81 -

definition. Thus, the Commission’s action does not add to or increase entities’ reporting 

burden.”140 

128. The immediate NOPR proposes to approve the revision to the definition of “bulk 

electric system” developed by NERC and an exception process to include or exclude 

specific elements in the definition of “bulk electric system” on a case-by-case basis. The 

Commission is basing its burden estimate below on the revised definition of “bulk 

electric system” developed by NERC. 

129. The proposal in this NOPR would result in entities reviewing systems and creating 

qualified asset lists, submitting exception requests where appropriate, and certain 

responsible entities having to comply with requirements to collect and maintain 

information in mandatory Reliability Standards with respect to certain facilities for the 

first time. 

130. Public Reporting Burden: While the Commission requests comment concerning 

the information collections proposed in this NOPR and the associated burden estimates, 

in particular, the Commission requests comment on the following issues. 

131. First, we request comment on the estimated number of entities that will have an 

increased reporting burden associated with the identification of new bulk electric system 

elements as a result of the modified definition. NERC states in its filing that “[i]t was not 

the intent nor the expectation of either the [standard drafting team] or NERC to either 

 140 Order No. 743, 133 FERC ¶ 61,150 at P 157.
Docket Nos. RM12-6-000 and RM12-7-000 - 82 -

expand or reduce the scope of the [bulk electric system], or (with the likely exception of 

the NPCC Region) to increase or decrease the number of Elements included in the [bulk 

electric system], through the revised [bulk electric system] definition as compared to the 

current [bulk electric system] definition.”141 NERC adds that it has no specific basis to 

determine to “the extent Elements currently included in the [bulk electric system] will 

become not included, nor to what extent Elements currently not included will become 

included.”142 In developing an estimate of the reporting burden associated with the 

inclusion of additional elements, like NERC, we assume that entities in the NPCC Region 

will be most affected, with a lesser affect in other regions.143 

132. We reviewed Compliance registry information for the NPCC Region to determine 

the number and types of registered entities in the U.S. portion of the NPCC Region.144 

We expect that transmission owners and distribution providers, and some generator 

owners, are most likely to identify new elements. Based on this, we estimate a range 

from 66 to 155 affected entities in the NPCC region, and for OMB reporting purposes 

identify below a median number of 111 affected entities in the NPCC region. Further, 

 141 NERC BES Petition at 37.

142 Id.

143 While Reliability Standards do not require the reporting of information directly 

to the Commission, the application of Reliability Standards to additional facilities will 

have associated information collection and retention obligations. 

144 NPCC Compliance Registry information is available on the NPCC website at: 

https://www.npcc.org/Compliance/Default.aspx. 
Docket Nos. RM12-6-000 and RM12-7-000 - 83 -

consistent with NERC’s explanation, we do not expect a significant number of registered 

entities outside of the NPCC region to identify new elements under the revised bulk 

electric system definition. Accordingly, we estimate a total of 75 entities outside of the 

NPCC Region having new “implementation plan and compliance” related reporting 

burdens. We seek comment on these estimates to assist the Commission in arriving at 

final estimates. 

133. Second, we seek comment on the reporting burden associated with exception 

requests. NERC indicates that “there is currently not a basis for estimating the numbers 

of Exceptions Requests that will be submitted....”145 We agree with NERC that there is 

difficulty in estimating a specific number of exception requests as this is a new process 

with no “track record.” Thus, rather than estimating a specific number of exception 

requests, we estimate a range of exception requests that may be submitted. As indicated 

in the table below, from the 1,730 total transmission owners, generator owners and 

distribution providers in the Compliance Registry, we estimate a range of 87 to 433 

exception requests per year for each of the first two years after the effective date of a 

final rule. We request comment on this estimated range to assist the Commission in 

arriving at a final estimate of the number of possible exception requests. 

134. Third, as indicated above, our estimates are based in part on an expectation that 

transmission owners, generator owners and distribution providers will experience more 

 145 NERC BES Petition at 38.
Docket Nos. RM12-6-000 and RM12-7-000 - 84 -

significant reporting burdens than other categories of registered entities. We seek 

comment on this expectation, and whether and to what extent other categories of 

registered entities (in addition to transmission owners, generator owners and distribution 

providers) may have a public reporting burden. 

135. We estimate that the increased Public Reporting Burden for this Proposed Rule is 

as follows:

Requirement

Number and 

Type of 

Entity146

(1)

Number of 

Responses 

Per Entity

(2)

Average

Number of 

Hours per 

Response

(3)

Total 

Burden 

Hours

(1)*(2)*(3)

System Review 

and List 

Creation147

333 

Transmission 

Owners

1 response 80 (engineer 

hours)

26,640 Yr 1

843 Generator 

Owners

16 (engineer 

hours)

13,488 Yr 1

554 

Distribution 

Providers

24 (engineer 

hours)

13,296 Yr 1

 146 The “entities” listed in this table are describing a role a company is registered 

for in the NERC registry. For example, a single company may be registered as a 

transmission owner and generator owner. The total number of companies applicable to 

this rule is 1,522, based on the NERC registry. The total number of estimated roles is 

1,730.

147 This requirement corresponds to Step 1 of NERC’s proposed transition plan,

which requires each U.S. asset owner to apply the revised bulk electric system definition 

to all elements to determine if those elements are included in the bulk electric system 

pursuant to the revised definition. See NERC BES Petition at 38.
Docket Nos. RM12-6-000 and RM12-7-000 - 85 -

Exception 

Requests148

1,730 total 

Transmission 

Owners, 

Generator 

Owners and 

Distribution 

Providers

.15 responses 

in Yrs 1 and 2

94 (60

engineer hrs, 

32 record 

keeping hrs, 

2 legal hrs) 

24,393 hrs in 

Yrs 1 and 2

0.01156

responses in

Yr 3 and 

ongoing

1,880 hrs in 

Yr 3 and 

ongoing

Regional and 

ERO Handling 

of Exception 

Requests149

NERC and 8 

Regional 

Entities

1 response 1,386.67 hrs 12,480 hrs in 

Yrs 1 and 2

Implementation 

Plans and 

Compliance150

111 NPCC 

Region 

Registered 

Entities151

1 response 700 hrs in 

Yrs 1 and 2

77,700 hrs in 

Yrs 1 and 2 

350 hrs in Yr 

3 and 

ongoing

38,850 hrs in 

Yr 3 and 

ongoing

75 Registered 

Entities from 

1 response 700 hrs in 

Yrs 1 and 2

52,500 hrs in 

Yrs 1 and 2

 148 We recognize that not all 1,730 transmission owners, generator owners 

and distribution providers will submit an exception request. Rather, from the total 

1,730 entities, we estimate an average of 260 requests per year in the first two years, 

based on a low to high range of 87 to 433 requests per year. Therefore, the estimated 

total number of hours per year for years 1 and 2, using an average of 260 requests 

per year, is 24,393 hours. We estimate 20 requests per year in year 3 and ongoing.

149 Based on the assumption of two full-time equivalent employees added to 

NERC staff and 0.5 full-time equivalent employees added to each region’s staff, each 

full-time equivalent at $120,000/year (salary + benefits). 

150 The Commission does not expect a significant number of registered entities 

outside of the NPCC region to identify new elements under the revised bulk electric 

system definition. NERC also states that the other Regional Entities do not expect an 

extensive amount of newly-included facilities. See NERC BES Petition at 38. 

“Compliance” refers to entities with new elements under the new bulk electric system 

definition required to comply with the data collection and retention requirements in 

certain Reliability Standards that they did not previously have to comply with.

151 The estimated range of affected NPCC Region Registered Entities is from 66 to 

155 entities.
Docket Nos. RM12-6-000 and RM12-7-000 - 86 -

7 other 

Regions

350 hrs in Yr 

3 and 

ongoing

26,250 hrs in 

Yr 3 and 

ongoing

TOTALS

220,497 hrs 

in Yr 1

167,073 hrs 

in Yr 2

66,980 hrs in 

Yr 3 and 

ongoing 

Information Collection Costs: The Commission seeks comment on the costs to comply 

with these requirements. These cost estimates are calculated using the average of the 

ranges suggested in the burden hour estimates. It has projected the annual cost to be:

• Year 1: $13,641,200

• Year 2: $10,435,760

• Year 3 and ongoing: $4,343,520. 

For the first two burden categories above, the loaded (salary plus benefits) costs are: 

$60/hour for an engineer; $27/hour for recordkeeping; and $106/hour for legal. The 

breakdown of cost by item and year follows:

• System Review and List Creation (year 1 only): (26,640 hrs + 13,488 

hrs + 13,296 hrs) =53,424 hrs * 60/hr = $3,205,440. 

• Exception Requests (years 1 and 2): (sum of hourly expense per request 

* number of exception requests) = ((60 hrs * $60/hr) + (32 hrs * $27/hr) + 

(2hrs * $106/hr)) * 260 requests) = $1,215,760.
Docket Nos. RM12-6-000 and RM12-7-000 - 87 -

• Exception Requests (year 3): (sum of hourly expense per request * 

number of exception requests) = ((60 hrs * $60/hr) + (32 hrs * $27/hr) + (2 

hrs * $106/hr)) * 20 requests) = $93,520.

• Regional and ERO handling of Exception Requests: Between NERC and 

regional entities we estimate 6 full time equivalent (FTE) engineers will be 

added at an annual cost of $120,000/FTE ($120,000/FTE * 6 FTE = 

$720,000). This cost is only expected in years 1 and 2. 

• Implementation Plans and Compliance152 (years 1 and 2): (hourly 

expense per entity * hours per response * sum of NPCC and non-NPCC 

entities) = ($64/hour * 700 hours per response * 186 responses) = 

$8,332,800.

• Implementation Plans and Compliance (year 3 and beyond): We 

estimate the ongoing cost for year 3 and beyond, at 50% of the year 1 and 2 

costs, to be $4,166,400.

Title: FERC-725-J “Definition of the Bulk Electric System”153

 152 The cost and hourly burden calculations for this category are based on a past 

assessment (NPCC Assessment of Bulk Electric System Definition, September 14, 

2009.). In that assessment NPCC indicated $8.9 million annually for operations, 

maintenance and additional costs. We estimated that roughly half of that cost actually 

relates to information collection burden. Using the resulting figure, we used a composite 

wage and benefit figure of $64/hour to estimate the hourly burden figures presented in the 

burden table. 

153 All of the information collection requirements for years 1-3 in the proposed 

rule are being accounted for under the new collection FERC-725J.
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Action: Proposed Collection of Information

OMB Control No: To be determined 

Respondents: Business or other for profit, and not for profit institutions.

Frequency of Responses: On Occasion 

Necessity of the Information: The proposed revision to NERC’s definition of the term 

bulk electric system, if adopted, would implement the Congressional mandate of the 

Energy Policy Act of 2005 to develop mandatory and enforceable Reliability Standards to 

better ensure the reliability of the nation’s Bulk-Power System. Specifically, the proposal

would ensure that certain facilities needed for the operation of the nation’s bulk electric 

system are subject to mandatory and enforceable Reliability Standards.

Internal review: The Commission has reviewed the proposed definition and made a 

determination that its action is necessary to implement section 215 of the FPA. The 

Commission has assured itself, by means of its internal review, that there is specific, 

objective support for the burden estimate associated with the information requirements.

136. Interested persons may obtain information on the reporting requirements by 

contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 

888 First Street, NE, Washington, DC 20426 [Attention: Ellen Brown, e-mail: 

DataClearance@ferc.gov, phone: (202) 502-8663, fax: (202) 273-0873]. 

137. Comments concerning the information collections proposed in this NOPR and the 

associated burden estimates, should be sent to the Commission in this docket and may 

also be sent to the Office of Management and Budget, Office of Information and 

Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory 
Docket Nos. RM12-6-000 and RM12-7-000 - 89 -

Commission]. For security reasons, comments should be sent by e-mail to OMB at the 

following e-mail address: oira_submission@omb.eop.gov. Please reference FERC-725J 

and the docket numbers of this Proposed Rulemaking (Docket Nos. RM12-6-000 and 

RM12-7-000) in your submission.

IV. Regulatory Flexibility Act Analysis

138. The Regulatory Flexibility Act of 1980 (RFA)154 generally requires a description 

and analysis of Proposed Rules that will have a significant economic impact on a 

substantial number of small entities. As discussed above, the Commission believes that 

the immediate effect of the proposal to approve the modification to the definition of bulk 

electric system and the exception process would likely be limited to certain transmission 

owners, generator owners and distribution service providers, as well as NERC and 

Regional Entities. Many transmission owners, generator owners and distribution service 

providers do not fall within the definition of small entities.155 The Commission estimates 

 154 5 U.S.C. §§ 601-612 (2006).

155 The RFA definition of “small entity” refers to the definition provided in the 

Small Business Act (SBA), which defines a “small business concern” as a business that is 

independently owned and operated and that is not dominant in its field of operation. See

15 U.S.C. § 632 (2006). According to the SBA, an electric utility is defined as “small” if, 

including its affiliates, it is primarily engaged in the generation, transmission, and/or 

distribution of electric energy for sale and its total electric output for the preceding fiscal 

year did not exceed 4 million megawatt hours. 
Docket Nos. RM12-6-000 and RM12-7-000 - 90 -

that approximately 418156 of the 1,730 registered transmission owners, generator owners 

and distribution service providers may fall within the definition of small entities.157 

139. The Commission estimates that of the 418 small entities affected there are 50 

within the NPCC region that would have to comply with the Proposed Rule. The 

Commission assumes that the Proposed Rule would affect more small entities in the 

NPCC Region than those outside NPCC as it is assumed that there are more elements in 

NPCC that would be added to the bulk electric system based on the new definition than 

elsewhere. The Commission estimates the first year affect on small entities within the 

NPCC region to be $39,414.

158 This figure is based on information collection costs plus 

 156 We note that in Order No. 693, the Commission estimated that the Reliability 

Standards in that the Final Rule would apply to approximately 682 small entities. See 

Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1940. Because the current Proposed 

Rule would affect a smaller subset of the categories of registered entities, our estimate is 

lower than that cited in Order No. 693.

157 The number of small entities is generated by comparing the NERC compliance 

registry with data submitted to the Energy Information Administration on Form EIA–861. 

Note, these numbers do not account for companies that may be registered in more than 

one role. For companies registered in more than one role, the burden will likely be higher 

than for those companies registered in only one role. We estimate that there are 381 

companies and 418 registered roles, meaning that several companies are registered in

more than one role. We do not believe this affects the certification below.

158 For companies registered as more than one entity in the NERC compliance 

registry this figure will increase accordingly. That is, if a company is registered as a 

transmission owner and generator owner then the cost burden would be $78,828 

($39,414*2 = $78,828). 
Docket Nos. RM12-6-000 and RM12-7-000 - 91 -

additional costs for compliance.159 The Commission estimates the average annual affect 

per small entity outside of NPCC will be less than for the entities within NPCC. The 

Commission does not consider this to be a significant economic impact for either class of 

entities because it should not represent a significant percentage of the operating budget. 

Accordingly, the Commission certifies that this Proposed Rule will not have a significant 

economic impact on a substantial number of small entities. The Commission seeks 

comment on this certification.

V. Environmental Analysis

140. 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.160 The Commission has categorically excluded certain 

actions from this requirement as not having a significant effect on the human 

environment. The actions proposed here fall within the categorical exclusion in the 

Commission’s regulations for rules that are clarifying, corrective or procedural, for 

 159 We use fifty percent of the first year “number of hours per response” figure in 

the information collection statement for calculation under the assumption that smaller 

entities do not have complicated systems or will not have as many new elements on 

average as larger entities do.

160 Order No. 486, Regulations Implementing the National Environmental Policy 

Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Regulations Preambles 1986-

1990 ¶ 30,783 (1987).
Docket Nos. RM12-6-000 and RM12-7-000 - 92 -

information gathering, analysis, and dissemination.161 Accordingly, neither an 

environmental impact statement nor environmental assessment is required.

VI. Comment Procedures

141. 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 [INSERT DATE 

60 days after publication in the FEDERAL REGISTER]. Comments must refer to 

Docket Nos. RM12-6-000 and RM12-7-000, and must include the commenter's name, the 

organization they represent, if applicable, and their address in their comments.

142. 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.

143. Commenters that are not able to file comments electronically must send an 

original of their comments to: Federal Energy Regulatory Commission, Secretary of the 

Commission, 888 First Street NE, Washington, DC, 20426.

 161 18 C.F.R. § 380.4(a)(5). 
Docket Nos. RM12-6-000 and RM12-7-000 - 93 -

144. 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

145. 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 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A, 

Washington DC 20426.

146. 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.

147. User assistance is available for eLibrary and the Commission’s website during 

normal business hours from the Commission’s Online Support at 202-502-6652 (toll free 

at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference 

Room at (202) 502-8371, TTY (202)502-8659. E-mail the Public Reference Room at 

public.referenceroom@ferc.gov.
Docket Nos. RM12-6-000 and RM12-7-000 - 94 -

List of subjects in 18 CFR Part 40 

By direction of the Commission. Commissioner Clark voting present.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.