145 FERC ¶ 61,253

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 40

[Docket No. RM13-7-000; Order No. 793] 

Protection System Maintenance Reliability Standard 

 

(Issued December 19, 2013)

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final rule. 

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

Regulatory Commission (Commission) approves a revised Reliability Standard, PRC005-2 – Protection System Maintenance, to supersede four existing Reliability Standards, 

PRC-005-1.1b (Transmission and Generation Protection System Maintenance and 

Testing), PRC-008-0 (Underfrequency Load Shedding Equipment Maintenance), PRC011-0 (Undervoltage Load Shedding Equipment Maintenance) and PRC-017-0 (Special 

Protection System Maintenance and Testing). 

EFFECTIVE DATE: This rule will become effective [insert date 60 days after 

publication in the FEDERAL REGISTER].
Docket No. RM13

-7-000 ii

FOR FURTHER INFORMATION CONTACT

:

Tom Bradish (Technical Information)

Office of Electric Reliability

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(301) 665-1391 

tom.bradish@ferc.gov

Julie Greenisen (Legal Information)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-6362

julie.greenisen@ferc.gov

SUPPLEMENTARY INFORMATION

:
UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Cheryl A. LaFleur, Acting Chairman;

 Philip D. Moeller, John R. Norris,

and Tony Clark.

Protection System Maintenance Reliability Standard Docket No. RM13-7-000

ORDER NO. 793

FINAL RULE

(Issued December 19, 2013)

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission 

approves a revised Reliability Standard, PRC-005-2 – Protection System Maintenance, to 

supersede four existing Reliability Standards, PRC-005-1.1b (Transmission and 

Generation Protection System Maintenance and Testing), PRC-008-0 (Underfrequency 

Load Shedding Equipment Maintenance), PRC-011-0 (Undervoltage Load Shedding 

Equipment Maintenance) and PRC-017-0 (Special Protection System Maintenance and 

Testing), and six associated definitions. The modifications, in part, respond to certain 

Commission directives issued in Order No. 693,2 in which the Commission approved 

 1 16 U.S.C. 824o (2012). 

2 Mandatory Reliability Standards for the Bulk Power System, Order No. 693, 

72 FR 16,416 (April 4, 2007), FERC Stats. & Regs. ¶ 31,242 (2007), order on reh’g, 

Order No. 693-A, 120 FERC ¶ 61,053 (2007). 
Docket No. RM13-7-000 - 2 -

initial versions of these four Reliability Standards governing maintenance and testing of 

protection systems, and maintenance of underfrequency and undervoltage load shedding 

equipment. 

2. Reliability Standard PRC-005-2 represents an improvement over the four existing 

standards covering protection system maintenance and testing, by incorporating specific, 

required minimum maintenance activities and maximum time intervals for maintenance 

of individual components of protection systems and load shedding equipment affecting 

the bulk electric system. While the proposed Reliability Standard also gives responsible 

entities the option of developing their own, performance-based maintenance intervals for 

most components, the intervals must be designed to achieve a minimum performance 

level, and must be adjusted if that target performance level is not actually achieved. In 

addition, the proposed Reliability Standard combines the maintenance and testing 

requirements for protection systems into one comprehensive Reliability Standard, as was 

suggested by the Commission in Order No. 693.3

3. While the revised Reliability Standard contains overall improvements over the 

four existing Reliability Standards, as discussed below, we are directing NERC to submit 

an informational filing on the development of a guidance report concerning the 

commissioning of power system protection systems.

 3 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1475. 
Docket No. RM13-7-000 - 3 -

4. The Commission approves the violation risk factors and all but one violation 

severity level for the revised Reliability Standard. The Commission directs NERC to 

modify the violation severity level assigned to certain failures to comply with 

Requirement R1. We also approve the six new definitions associated with proposed 

Reliability Standard PRC-005-2, i.e., Component, Component Type, Countable Event, 

Protection System Maintenance Program, Segment, and Unresolved Maintenance Issue. 

Of these newly defined terms, only the term Protection System Maintenance Program 

will be incorporated into NERC’s Glossary of Terms, with the remainder applying only 

to Reliability Standard PRC-005-2. 

5. Finally, we approve NERC’s proposed implementation plan for Reliability 

Standard PRC-005-2 (as corrected in NERC’s October 30, 2013 Errata filing), which 

requires entities to develop a compliant protection system maintenance program within 

twelve months, but allows for the transition over time of maintenance activities and 

documentation to conform to the new minimum maintenance activities and maximum 

maintenance intervals. 

I. Background

A. Regulatory Background 

6. Section 215 of the FPA requires a Commission-certified Electric Reliability 

Organization (ERO) to develop mandatory and enforceable Reliability Standards, subject 
Docket No. RM13-7-000 - 4 -

to Commission review and approval.4

 Once approved, the Reliability Standards may be 

enforced by the ERO subject to Commission oversight, or by the Commission 

independently.5

7. In 2006, the Commission certified NERC as the ERO pursuant to FPA section 

215.

6

 In 2007, in Order No. 693, the Commission approved an initial set of Reliability 

Standards submitted by NERC, including initial versions of four protection system and 

load-shedding-related maintenance standards, i.e., PRC-005-1, PRC-008-0, PRC-011-0, 

and PRC-017-0.7

 

8. In approving these protection system-related Reliability Standards, the 

Commission directed NERC to develop or to consider a number of modifications. 

Specifically, the Commission directed NERC (1) to develop a revision to PRC-005-1 

incorporating a maximum time interval during which to conduct maintenance and testing 

of protection systems, and (2) to consider combining into one standard the various 

maintenance and testing requirements for all of the maintenance and testing-related 

Reliability Standards for protection systems, Special Protection Systems (SPS), 

 4 16 U.S.C. 824o(c) and (d). 

5 See id. at 824o(e).

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

& compliance, 117 FERC ¶ 61,126 (2006), aff’d sub nom., Alcoa, Inc. v. FERC, 564 F.3d 

1342 (D.C. Cir. 2009). 

7 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at PP 1474, 1492, 1497, and 1514. 
Docket No. RM13-7-000 - 5 -

underfrequency load shedding (UFLS) equipment, and undervoltage load shedding 

(UVLS) equipment.8

 

9. Subsequently, in Order No. 758, issued in response to NERC’s request for 

approval of its interpretation of PRC-005-1, the Commission issued three additional 

directives addressing deficiencies in the existing version of Reliability Standard PRC005.9

 The Commission directed NERC to modify Reliability Standard PRC-005-1 

through its standards development process to (1) identify and include the auxiliary relays 

and non-electrical sensing devices designed to sense or take action against any abnormal 

system condition that will affect reliable operation (such as sudden pressure relays); 

(2) include specific requirements for maintenance and testing of reclosing relays that 

affect the reliable operation of the bulk-power system; and (3) include specific 

requirements for maintenance and testing of DC control circuitry.

B. Existing Protection System-Related Maintenance Standards 

10. Under currently-effective Reliability Standard PRC-005-1b, transmission owners, 

generator owners, and applicable distribution providers are required to have “a Protection 

System maintenance and testing program for Protection Systems that affect the reliability 

 8 In Order No 763, the Commission approved Reliability Standard PRC-006-1 

pertaining to “underfrequency load shedding,” which also encompasses “undervoltage 

load shedding.” Automatic Underfrequency Load Shedding and Load Shedding Plans 

Reliability Standards, Order No. 763, 139 FERC ¶ 61,098 (2012). 

9 Interpretation of Protection System Reliability Standard, Order No. 758, 

138 FERC ¶ 61,094, order denying clarification, 139 FERC ¶ 61,227 (2012).
Docket No. RM13-7-000 - 6 -

of the BES,” and must document their compliance with that program.10 The program 

must include maintenance and testing intervals and their basis, and a summary of 

maintenance and testing procedures. However, Reliability Standard PRC-005-1b does 

not impose any specific requirements regarding maintenance activities, standards or 

intervals. Similarly, Reliability Standards PRC-008-0, PRC-011-0, and PRC-017-0 

require applicable transmission owners, distribution providers, and generator owners to 

have a maintenance and testing program in place for UFLS equipment, UVLS equipment, 

and special protection systems, respectively, and to document their compliance with their 

program. These Reliability Standards, like PRC-005-1b, do not impose any specific 

requirements regarding maintenance activities, standards or intervals. 

C. NERC Petition and Reliability Standard PRC-005-2

11. On February 26, 2013, NERC submitted a petition seeking approval of Reliability 

Standard PRC-005-2, six new definitions associated with that standard, and an

implementation plan that includes retirement of the four currently-effective Reliability 

Standards that address maintenance and testing of transmission and generation protection 

systems, UFLS and UVLS equipment, and special protection systems.11 NERC 

 10 NERC Reliability Standard PRC-005-1b, Requirements R1 and R2. 

11 PRC-005-2 is not attached to this Final Rule. The complete text of the 

Reliability Standard is available on the Commission's eLibrary document retrieval system 

in Docket No. RM13-7 and is posted on NERC’s web site, available at: http:// 

www.nerc.com. 
Docket No. RM13-7-000 - 7 -

maintained that the Reliability Standard not only consolidates the four currently-effective

standards into a single standard, but also addresses the directives in Order No. 693 related 

to those standards.12

12. The Reliability Standard includes five requirements. Under Requirement R1, each 

responsible entity must establish a protection system maintenance program that: 

(1) identifies which method (time-based or performance-based) will be used for each 

protection system component type, except that the maintenance program for all batteries 

associated with the station DC supply of a protection system must be time-based, and 

(2) identifies monitored component attributes for each component type where monitoring 

is used as a basis for extending maintenance intervals.

13. Under Requirement R2, any responsible entity that uses performance-based 

maintenance intervals must follow the procedures set out in Attachment A of the 

Reliability Standard to set and to adjust, as necessary, appropriate maintenance intervals. 

The Attachment A procedures allow a responsible entity to establish maintenance 

intervals for a given population of similar components based on historical performance, 

as long as there is a statistically significant population of components for which 

 12 NERC Petition at 2. NERC states that while the Commission issued additional 

directives related to the PRC-005 Reliability Standard in Order No. 758, NERC will 

address these remaining directives in future versions of PRC-005, and is currently 

addressing the maintenance and testing of reclosing relays in a new phase of Project 

2007-17. See NERC Petition at 7-8.
Docket No. RM13-7-000 - 8 -

performance can be examined and monitored. For example, under the Attachment A 

procedures, a responsible entity can only use a performance-based interval for 

“segments” with a component population of at least 60 components.13 The maximum 

allowable maintenance interval for a given segment is required to be set such that the 

segment will experience “countable events” of no more than four percent of the 

components within that segment, for the greater of either the last 30 components 

maintained or all components maintained in the previous year.14 

14. In addition, to continue to utilize a performance-based interval, the responsible 

entity must update its list of components and segments annually (or whenever a change 

occurs within a segment), must maintain a minimum number or percentage of 

components a year, and must analyze a given segment’s maintenance record to determine 

the percentage of countable events. If the percentage of countable events for the last 30 

components maintained or the number of components maintained over the last year 

(whichever is larger) exceeds four percent, the responsible entity must implement an 

 13 NERC defines “segment” for purposes of PRC-005-2 as “Protection Systems or 

components of a consistent design standard, or a particular model or type from a single 

manufacturer that typically share other common elements. Consistent performance is 

expected across the entire population of a Segment.” NERC Petition, Ex. B (PRC-005-2) 

at 26. 

14 NERC defines “countable event” as “a failure of a component requiring repair 

or replacement, any condition discovered during the maintenance activities in Tables 1-1 

through 1-5 and Table 3 which requires corrective action, or a Misoperation attributed to 

hardware failure or calibration failure.” NERC Petition, Ex. B (PRC-005-2) at 26. 
Docket No. RM13-7-000 - 9 -

action plan to reduce the expected countable events to less than four percent for that 

segment within the next three years. 

15. Requirements R3 and R4 require a responsible entity to adhere to the requirements 

of its protection system maintenance program, including performance of minimum 

maintenance activities. Under Requirement R3, which governs time-based maintenance, 

the activities must be performed in accordance with the intervals prescribed in the tables 

attached to PRC-005-2. Under Requirement R4, the activities must be carried out in 

accordance with the performance-based intervals established under Requirement R2 and 

Attachment A. 

16. Under Requirement R5, responsible entities must “demonstrate efforts to correct 

identified Unresolved Maintenance Issues,” which are defined as “deficienc[ies] 

identified during a maintenance activity that cause[] the component to not meet the 

intended performance, cannot be corrected during the maintenance interval, and require[]

follow-up corrective action.” NERC explained that the intent of Requirement R5 is “to 

assure that Protection System components are returned to working order following the 

discovery of failures or malfunctions during scheduled maintenance.”15 

17. With respect to implementation, NERC proposed to require entities to fully 

comply with Requirements R1, R2, and R5 within 12 months of regulatory approval (or 

 15 NERC Petition at 18.
Docket No. RM13-7-000 - 10 -

24 months from the date of NERC Board approval where no regulatory approval is 

required).16 Accordingly, applicable entities in the United States must develop their 

revised protection system maintenance program within one year after regulatory 

approval.

17 NERC’s proposed implementation plan would allow a longer implementation 

period with respect to achieving full compliance with the newly-prescribed maintenance 

activities and documentation, permitting a transition of maintenance activities and 

documentation over time, with the compliance period scaled to the length of the 

applicable maximum maintenance interval.18 Thus, for component types with the 

shortest allowable maintenance interval (i.e., less than one year, or between one and two 

years), entities would be required to fully comply with the new requirements within 

18 months of regulatory approval, and 36 months of regulatory approval, respectively.

19 

For components types with longer maintenance intervals (3, 6, and 12 years), NERC

proposed to require compliance over the applicable maintenance interval in equally 

distributed steps. For component types with the longest maximum allowable 

maintenance interval (i.e., 12 years), entities must be 30 percent compliant within 5 years, 

 16 NERC Petition, Ex. C (Implementation Plan) at 2, 4. 

17 See id. 

18 Id. at 1-2.

19 Id. at 4.
Docket No. RM13-7-000 - 11 -

60 percent compliant within 9 years, and fully compliant within 13 years after regulatory 

approval.

20 

18. NERC explained that this implementation program takes into consideration that 

certain entities may not currently be performing all required maintenance activities

specified in proposed PRC-005-2, and may not have all the documentation necessary to 

demonstrate compliance.

21 NERC further stated that “it is unrealistic for those entities to 

be immediately compliant with the new activities or intervals,” and that “entities should 

be allowed to become compliant in such a way as to facilitate a continuing maintenance 

program.”22 Finally, NERC explained that it developed this step-wise implementation 

plan “in order that entities may implement this standard in a systematic method that 

facilitates an effective ongoing Protection System Maintenance Program.”23 

D. Notice of Proposed Rulemaking and Subsequent Filings 

19. On July 18, 2013, the Commission issued a Notice of Proposed Rulemaking 

(NOPR) proposing to approve Reliability Standard PRC-005-2.24 The Commission 

 20 Id. at 5. NERC notes, however, that “[o]nce an entity has designated PRC-005-

2 as its maintenance program for specific Protection System components, they cannot 

revert to the original program for those components.” Id. at 2.

21 Id. at 1.

22 Id. 

23 Id. at 2. 

24 Notice of Proposed Rulemaking, Protection System Maintenance Reliability 

Standard, 144 FERC ¶ 61,055 (2013) (NOPR). 
Docket No. RM13-7-000 - 12 -

explained that the revised standard represents an improvement over the four existing

standards covering protection system maintenance and testing, because it incorporates

specific, required minimum maintenance activities and maximum time intervals for 

maintenance of individual components of protection systems and load shedding 

equipment affecting the bulk electric system.25 The Commission further noted that 

although the proposed Reliability Standard would give entities the option of developing 

performance-based maintenance intervals for eligible components, those intervals have to 

be designed to achieve a minimum performance level and must be adjusted if the target 

performance level is not achieved.26

20. The Commission requested additional information and comment on three topics 

pertaining to PRC-005-2: (1) verification of operability and settings upon placement inservice of new or modified protection systems; (2) use of a four percent target for 

countable events in performance-based programs; and (3) violation severity levels for 

certain Requirement R1 violations. 

21. Comments were due on the NOPR on September 23, 2013. Seven sets of 

comments were received, as identified in Appendix A to this Final Rule. 

22. On October 30, 2013, NERC submitted an errata to its February 26, 2013 petition, 

stating that certain procedural language regarding the process for approval of the standard 

 25 Id. P 2.

26 Id. 
Docket No. RM13-7-000 - 13 -

was inadvertently omitted. NERC submitted a revised Implementation Plan as part of 

that errata, asking the Commission to consider the revised plan for purposes of proposed 

PRC-005-2 and this proceeding.

II. Discussion

23. Pursuant to section 215(d)(2) of the FPA, we approve Reliability Standard PRC005-2, the six associated definitions referenced in the proposed standard, and NERC’s 

proposed implementation plan, as just, reasonable, not unduly discriminatory or 

preferential, and in the public interest. As discussed in section A below, we believe 

Reliability Standard PRC-005-2 will enhance reliability through reducing the risk of 

protection system misoperations by establishing minimum maintenance activities and 

maximum maintenance time intervals. The Reliability Standard will also reduce the risk 

of protection system misoperations by establishing requirements for condition-based and 

performance-based maintenance programs where hands-on maintenance intervals are 

adjusted to reflect the known and reported condition or the historical performance of the 

relevant devices.

24. Below, we discuss the matters raised by the Commission in the NOPR or raised by

commenters in response to the NOPR, as follows: (A) approval of PRC-005-2 ; 

(B) application of PRC-005-2 to newly-commissioned or modified components; (C) four 

percent target for countable events; (D) correcting unresolved maintenance issues; (E) the 

Violation Severity Level assignment for Requirement R1; and (F) definitions.
Docket No. RM13-7-000 - 14 -

A. Approval of PRC-005-2

NERC Petition

25. In its petition seeking approval of PRC-005-2, NERC maintained that the 

proposed standard will improve reliability by: 

(i) defining and establishing criteria for a Protection System 

Maintenance Program; (ii) reducing the risk of Protection 

System Misoperations; (iii) clearly stating the applicability of 

the Requirements in proposed PRC-005-2 to certain 

Functional Entities and Facilities; (iv) establishing 

Requirements for time-based maintenance programs that 

include maximum allowable maintenance intervals for all 

relevant devices; and (v) establishing Requirements for 

condition-based and performance-based maintenance 

programs where hands-on maintenance intervals are adjusted 

to reflect the known and reported condition or the historical 

performance, respectively, of the relevant devices.27 

26. NERC asserted that the Reliability Standard not only represents a comprehensive 

approach to documenting and implementing programs for maintenance of all protection 

systems affecting the reliability of the bulk electric system, but also reduces the risk of 

misoperations “by applying consistent, best practice maintenance and inspection 

activities of Protection System Components in accordance with the maximum intervals 

established in the proposed Reliability Standard.”28 NERC maintained that the proposed 

Reliability Standard represents an improvement over the four standards that would be 

 27 NERC Petition at 3.

28 Id. at 11. 
Docket No. RM13-7-000 - 15 -

superseded, because none of the existing standards contain technical requirements for any 

of the maintenance programs, but merely specify that a program be in place and that each 

responsible entity comply with the requirements of its own program.29

27. NERC also maintained that PRC-005-2 satisfies three outstanding directives from 

Order No. 693 related to the PRC maintenance standards. First, NERC explained that the 

Reliability Standard includes maximum allowable intervals for maintenance of protection 

system components (as set out in Tables 1-1 through 1-5, Table 2, and Table 3 of 

Reliability Standard PRC-005-2).30 Second, Reliability Standard PRC-005-2 combines 

the requirements for PRC-005, PRC-008, PRC-011 and PRC-017 into one new, revised 

standard, addressing maintenance for transmission and generation protection systems, for 

special protection systems, and for UFLS and UVLS equipment.31 Finally, in Order 

No. 693, the Commission directed NERC to consider whether load serving entities and 

transmission operators should be included in the applicability of PRC-004.32 NERC 

maintained that it considered whether load-serving entities and transmission operators 

should be subject to any of the PRC maintenance and testing requirements, but 

determined that the applicable maintenance requirements need only apply to equipment 

 29 Id. 

30 Id. at 12.

31 Id. at 12-13.

32 Order No. 693, FERC Stats & Regs. ¶ 31,242 at P 1469. 
Docket No. RM13-7-000 - 16 -

owners such as generation owners, transmission owners, and certain distribution 

providers.33 NERC explained that “[w]hile an equipment owner may need to coordinate 

with the operating entities in order to schedule the actual maintenance, the responsibility 

resides with the equipment owners to complete the required maintenance.”34

NOPR Proposal

28. In the NOPR, the Commission proposed to approve Reliability Standard PRC005-2, finding that it would enhance reliability by incorporating specific, required 

minimum activities and maximum time intervals for maintenance of individual 

components of protection systems and load shedding equipment affecting the bulk 

electric system.35 The Commission further noted that the proposed Reliability Standard 

would give entities the option of developing performance-based maintenance intervals for 

eligible components, but that those intervals had to be designed to achieve a minimum 

performance level and must be adjusted if the target performance level is not achieved.36 

Finally, in the NOPR the Commission stated that Reliability Standard PRC-005-2 

“appears to adequately address the Commission directives from Order No. 693 with 

respect to: (1) including maximum allowable intervals in PRC-005; (2) combining PRC-

 33 NERC Petition at 13. 

34 Id.

35 NOPR, 144 FERC ¶ 61,055 at P 2. 

36 Id. 
Docket No. RM13-7-000 - 17 -

005, PRC-008, PRC-011, and PRC-017; and (3) considering whether load serving entities 

and transmission operators should be included in the applicability of the PRC-005 

Reliability Standard.”

37

Comments

29. Most commenters generally support the Commission’s proposed approval of PRC005-2. ITC “supports NERC’s proposal as improving Bulk Electric System reliability 

and promoting efficiency through consolidation [of protection system-related standards] 

into a single Standard.”38 The Bureau of Reclamation states that the revised standard “is 

a significant improvement over the current PRC-005-1 standard because the current 

standard is more likely to penalize an entity that develops an ambitious maintenance 

program than an entity that has a less robust maintenance program . . . .”39

30. Duke Energy, however, asks that the Commission reject the revised standard. 

Duke Energy argues that PRC-005-2 improperly expands the applicability of the 

protection system maintenance standard because, “as written, it could also apply to 

Protection Systems which detect faults on the Bulk Electric System (BES), but which 

 37 Id. P 22. 

38 ITC Comments at 4. 

39 Bureau of Reclamation Comments at 1. 
Docket No. RM13-7-000 - 18 -

don’t affect the reliable operation of the BES.”

40 Duke Energy argues that the Reliability 

Standard, as written, would apply to one of Duke Energy’s typical protection schemes for 

dispersed, non-BES generation at distribution stations, because the relays involved are 

designed to detect faults on the BES although these particular protection schemes do not 

operate BES elements or interrupt network current flow from the BES.41 Duke Energy 

maintains that these protection schemes initiate shutdown of non-BES generation only, 

and should not properly be covered under a protection system maintenance Reliability 

Standard. Duke Energy accordingly requests that the Commission remand the standard 

to NERC with a directive to limit applicability of the standard to protection systems and 

elements thereof “which affect the reliable operation of those BES Elements” on which 

they detect faults.42 

Commission Determination

31. We find that Reliability Standard PRC-005-2 will enhance reliability as compared 

to the currently existing standards, and agree with ITC that PRC-005-2 promotes

efficiency by consolidating protection system maintenance requirements into a single 

standard. Consistent with the NOPR, we believe that Reliability Standard PRC-005-2 

 40 Duke Energy Comments at 2. In particular, Duke Energy cites to applicability 

section 4.2.1, which pertains to “protection systems that are installed for the purpose of 

detecting Faults on BES Elements (lines, buses, transformers, etc.).”

41 Id. at 3-4.

42 Id. at 5. 
Docket No. RM13-7-000 - 19 -

should reduce the risk of protection system misoperations by setting out minimum 

maintenance activities and maximum maintenance time intervals for individual 

components of protection systems.43 In addition, we believe that PRC-005-2 will 

improve reliability by establishing requirements for condition-based and performancebased maintenance programs where maintenance intervals are adjusted to reflect the 

known and reported condition or the historical performance of the relevant devices. 

Finally, we agree with the Bureau of Reclamation that the revised standard removes the 

potential disincentive, inherent in the existing protection system maintenance standards, 

to adopt more aggressive maintenance programs because compliance is currently 

measured against each individual company’s adopted program rather than against 

industry standards or minimums. 

32. We are not persuaded by Duke Energy that remand of the Reliability Standard is 

required. Duke Energy argues that PRC-005-2 will bring a new set of protection system 

schemes under NERC’s protection system maintenance standard requirements. We 

decline to make any specific determination about the applicability of this standard to 

specific elements or types of elements. Rather, Duke Energy may seek to raise concerns 

regarding applicability of the Reliability Standard to specific system elements with 

NERC or the relevant Regional Entity. 

 43 See NOPR, 144 FERC ¶ 61,055 at P 2.
Docket No. RM13-7-000 - 20 -

B. Verification of Operability and Settings Upon Placement In-Service 

NERC Petition

33. Reliability Standard PRC-005-2 does not include separate requirements for 

protection system commissioning testing for new or modified equipment (i.e., testing 

activities necessary to ensure that new or modified equipment has been built and will 

function in accordance with its design). NERC maintained in its petition that such testing 

is often performed by a different organization (such as a start-up or commissioning group 

of the organization, or a contractor hired to construct and start-up or commission the 

facility) than the organization responsible for the on-going maintenance of the protection 

system, and that the activities required for such testing will not necessarily correlate to 

the maintenance activities required by the proposed standard.44 At the same time, NERC 

acknowledged that “a thorough commission testing program would include, either 

directly or indirectly, the verification of all those Protection System attributes addressed 

by the maintenance activities specified in the Tables of PRC-005-2,” and that “an entity 

would be wise to retain commissioning records to show a maintenance start date.”45 

 44 NERC Petition, Ex. E (Supplementary Reference and FAQ) at 35. 

45 Id. NERC also noted that an entity “that requires that their commissioning tests 

have, at a minimum, the requirements of PRC-005-2 would help that entity prove time 

interval maximums by setting the initial time clock.” Id. 
Docket No. RM13-7-000 - 21 -

NOPR Proposal 

34. In the NOPR, the Commission noted its concern that PRC-005-2 does not include 

a requirement to verify that protection system equipment and components operate at least 

as accurately as required under the PRC-005-2 maintenance standards when those 

components are first placed in service or are modified, even though NERC has stated that 

such placement into service can be used as the starting point for the maintenance interval 

and even though a failure to verify the accurate functioning of protection system 

components when placed in service or when subsequently modified has contributed to 

misoperations in the past.46 The Commission accordingly asked for an explanation of 

“whether and if so, how [NERC] intends to interpret and enforce Reliability Standard 

PRC-005-2 to require that newly installed or modified protection system equipment or 

components perform at the same level as is required for subsequent compliance, 

including verification of applicable settings as specified whenever a relay is repaired, 

replaced, or upgraded with a new firmware version.”

47 

35. In addition, if NERC did not believe it could interpret PRC-005-2 to require 

verification of operability and settings of protection system components at 

commissioning to the same performance level as is required for subsequent compliance 

 46 See NOPR, 144 FERC ¶ 61,055 at PP 25-27. 

47 Id. P 27. 
Docket No. RM13-7-000 - 22 -

with PRC-005-2, the Commission requested comment on whether such a modification to 

the standard should be made.48

Comments 

36. NERC, the Cooperatives, ITC and Oncor all object to the application of PRC-005-

2 to newly-commissioned or newly-modified protection systems or components. NERC 

maintains that the proposed standard was not “designed to establish requirements for 

commission testing and such testing would go beyond the maintenance activities 

identified in proposed PRC-005-2.”49 NERC accordingly asserts that it “cannot interpret 

and enforce proposed PRC-005-2 to require that newly installed or modified protection 

system equipment or components perform at the same level as is required for subsequent 

compliance.”50 

37. NERC also provides information about its efforts to reduce protection system 

misoperations through improved commissioning testing practices, and asks that the 

Commission refrain from issuing a directive to modify PRC-005-2 to address 

commissioning testing until NERC completes that work and can determine whether it is 

 48 Id. P 28. 

49 NERC Comments at 3. 

50 Id. However, NERC states in its comments, as it did in its petition, that “the 

date of completion of the commission testing of the Protection System component and its 

placement into service can be used by an entity as the starting point in determining first 

maintenance due dates.” Id. at 3-4 (citing to NERC Petition at 35-36).
Docket No. RM13-7-000 - 23 -

sufficient to address commissioning testing.51 NERC states that these efforts include 

development of a report by the System Protection and Control Subcommittee (SPCS), 

recently approved by the NERC Planning Committee, in which the SPCS “suggested 

improving commissioning practices through (1) analysis of protection system 

Misoperations; (2) sharing of lessons learned; and (3) development of an industry 

reference document on protection system commissioning practices.”52 With respect to 

the first recommendation, NERC suggests it is being addressed as part of entities’ 

ongoing obligations under PRC-004-2a (Analysis and Mitigation of Transmission and 

Generation Protection System Misoperations).

53 As for the second recommendation, 

NERC notes that the SPCS is working on a lessons learned document.54 As for the third 

recommendation, NERC indicates that it is participating in ongoing efforts of an IEEE 

task force, working on the development of a report to provide guidance on the 

commissioning of power system protection systems.55 NERC commits in its Comments 

 51 NERC Comments at 4.

52 Id. at 6.

53 Id.

54 Id.

55 Id. at 7-8. Oncor agrees that the Commission should consider allowing NERC 

to continue its participation in efforts to create a document providing commissioning 

guidelines and best practices, instead of adding requirements to PRC-005-2. Oncor 

Comments at 1. 
Docket No. RM13-7-000 - 24 -

to keep the Commission informed on the progress of these ongoing efforts to reduce 

protection system misoperations related to commissioning testing practices.56

38. The Cooperatives agree with NERC that PRC-005-2 cannot be read to include a 

requirement to verify operability and settings of new or modified protection system 

equipment, because there is no explicit language in the requirement that would allow 

such an interpretation and because it would disregard the standards development 

process.

57 The Cooperatives argue that imposing a commissioning testing requirement as 

part of PRC-005-2 would constitute a material change to the standard, which must be 

addressed through the standards development process if needed.

58 Similarly, ITC 

“strongly opposes” application of PRC-005-2 to commissioning of new components, and 

stresses that the proposed standard was developed solely for the purpose of covering 

“ongoing maintenance during the life of the component, and not an initial testing when 

the component is first commissioned.”59 Oncor supports NERC’s efforts to develop 

guidelines on commissioning testing practices instead of imposing additional 

requirements as part of PRC-005-2, and notes that there are many differences between 

commissioning testing and periodic maintenance testing. In addition, Oncor notes that 

 56 NERC Comments at 4. 

57 Cooperatives Comments at 3-4.

58 Id. at 4. 

59 ITC Comments at 6-7. 
Docket No. RM13-7-000 - 25 -

PRC-004-2a is designed to identify deficiencies in performance and provide for 

correction, while PRC-005-2 is not a deficiency in performance standard.60

39. The Cooperatives also argue that the Commission should not require the 

development of a commissioning testing requirement that would require verification of 

protection system operability and settings, because such a requirement “would be 

redundant, difficult to formulate and enforce, and might affect some (but not all) 

Registered Entities’ willingness to deploy new or upgraded protection systems.”61 

40. Idaho Power, on the other hand, believes that the Commission has identified a gap 

in the Reliability Standards that should be addressed by expanding PRC-005-2 to include 

newly-commissioned or modified equipment.

Commission Determination 

41. While we remain concerned about the continued possibility of misoperations

resulting from a failure to properly verify the operability or settings of protection system 

equipment upon being placed in service or modified, we will not direct NERC to modify 

PRC-005-2 to include such a requirement or to otherwise develop a separate 

commissioning testing standard at this time. Instead, we rely on NERC’s discussion of 

its on-going efforts to reactively and proactively reduce protection system misoperations 

through improved commissioning testing practices, which includes the analysis of 

 60 Oncor Comments at 1. 

61 Cooperatives Comments at 5-8.
Docket No. RM13-7-000 - 26 -

misoperations, sharing of lessons learned, and the development of a report intended to 

provide guidance concerning the commissioning of power system protection systems.

62 

As explained in the NOPR, our concern is with a protection system that has not been 

verified as capable of functioning according to its design when placed in service or 

modified. In its Comments, NERC describes an event studied by NERC’s Event 

Analysis and Investigation Group, in which an entity did not perform in-service testing as 

part of commissioning a new protection system, “resulting in line relays being placed in 

service with the incorrect transformer ratio.”

63 According to NERC, this situation 

remained undetected until the protection system was required to operate for a system 

disturbance. That protection system failed to operate correctly due to the defect, 

consequently increasing the magnitude and scope of the system disturbance.64 We 

believe that this example, provided by NERC, highlights our concern and the importance 

of commissioning testing.

42. We agree with a proactive approach to reducing misoperations, i.e., ensuring that a 

new or modified protection system, when placed in service, is capable of functioning 

according to its design so that an undetected defect resulting in a misoperation of that 

 62 See NERC Comments at 5-8

. 

63 Id. at 4.

64 Id.
Docket No. RM13-7-000 - 27 -

protection system does not negatively affect bulk electric system reliability. We 

encourage and accept NERC’s commitment to keep the Commission informed of its 

efforts concerning this issue.

65 Accordingly, we direct NERC to submit, within one year 

of issuance of this Final Rule, an informational filing on the status of these efforts, 

including the development of the guidance report as described in the NERC Comments. 

C. Four Percent Target for Countable Events in Performance-Based 

Program

NERC Petition 

43. Pursuant to Requirement R2 of Reliability Standard PRC-005-2, responsible 

entities may choose to establish performance-based maintenance intervals for individual 

component types, according to the procedures set out in Attachment A of the standard. 

Under these procedures, the responsible entity must first develop a list of components to 

be included in the designated segment (with a minimum population of 60 components).

66 

Using that analysis and looking at the greater of either the last 30 components maintained 

or all components maintained within the segment over the last year, the responsible entity 

must set a maximum allowable interval for each segment so that countable events will 

 65 See id.

66 Until such time as the entity has performed and analyzed the required 

maintenance activities applicable to the segment for at least 30 individual components, it 

must maintain the segment using PRC-005-2’s time-based intervals, as specified in 

Tables 1-1 to 1-5, 2 and 3, i.e., it cannot adopt a performance-based interval until it has 

performed and analyzed the maintenance history for a minimum pool of components. 
Docket No. RM13-7-000 - 28 -

occur on no more than four percent of the components within that segment. In addition, 

the maintenance history of the segment is to be reviewed at least annually to determine 

the overall performance of the segment, and, if the four percent target is not met, the 

entity is required to develop and implement an action plan to reduce countable events to 

less than four percent within three years.

67 

44. Under PRC-005-2, an entity would not violate Requirement R2 upon failing to 

achieve a four percent or less failure rate for a given segment in the first year the failure 

occurs, but would violate Requirement R2 if: (1) the entity could not show that the 

interval selected was initially set to expect a failure rate of no more than four percent; 

(2) the entity fails to make immediate changes to its performance-based maintenance 

program to achieve a four percent target within 3 years; or (3) the entity does not actually 

achieve a four percent failure rate for that segment within 3 years after adjusting its 

program.

68 

45. In the Technical Justification NERC submitted as part of its petition, NERC 

explained the basis for selecting a four percent target for countable events as follows: 

The 4% number was developed using the following:

 67 As NERC explains in the Supplementary Reference and FAQ (Ex. E) attached 

to its petition, entities using a performance-based program must not only “demonstrate 

how they analyze findings of performance failures and aberrations” but must also 

“implement continuous improvement actions” to meet the failure rate targets. See NERC 

Petition, Ex. E at 40. 

68 See generally id. at 40-53. 
Docket No. RM13-7-000 - 29 -

General experience of the drafting team based on open 

discussions of past performance.

Test results provided by Consumers Energy for the years 

1998-2008 showing a yearly average of 7.5% out-of-tolerance 

relay test results and a yearly average of 1.5% defective rate.

Two failure analysis reports from Tennessee Valley Authority 

(TVA) where TVA identified problematic equipment based 

on a noticeably higher failure of a certain relay type (failure 

rate of 2.5%) and voltage transformer type (failure rate of 

3.6%).69

NOPR 

46. In the NOPR, the Commission questioned whether NERC had provided sufficient 

support for the choice of a four percent target figure for countable events, particularly 

with respect to individual components known to have historically higher levels of 

reliability.70 The Commission requested support for NERC’s proposed approach in PRC005-2, which adopts a single failure rate target for all component types, as opposed to 

establishing a target failure rate for each individual component.71 In addition, the 

Commission sought comment on the selection of four percent as the appropriate target 

failure rate, assuming a blanket failure rate is used. Finally, the Commission proposed to 

direct NERC to study and submit a report and recommendations based on the study 

 69 NERC Petition, Ex. D (Technical Justification) at 5. 

70 See NOPR, 144 FERC ¶ 61,055 at PP 32-33. 

71 Id. P 34. 
Docket No. RM13-7-000 - 30 -

results concerning the expected failure rates for individual component types if the 

technical information to respond to the Commission’s questions is not currently available.

Comments 

47. NERC comments that it continues to support the four percent failure rate target, 

arguing that an “acceptable failure rate needs to balance between a goal of ultimate 

reliability and what could be reasonably expected of a well-performing component 

population.”72 NERC maintains that the four percent performance target was selected 

“based on the drafting team’s experience and past studies performed by several utilities,” 

and references back to Section 9 of the Supplementary Reference and FAQ appended to 

its Petition.73 In those supplementary materials, the choice of a four percent failure rate is 

explained as follows:

It is notable that 4% is specifically chosen because an entity 

with a small population (30 units) would have to adjust its 

time intervals between maintenance if more than one 

Countable Event was found to have occurred during the last 

analysis period. A smaller percentage would require that 

entity to adjust the time interval between maintenance 

activities if even one unit is found out of tolerance or causes a 

Misoperation.74

48. NERC further maintains that “it is appropriate to use a specified target percentage 

in a performance based maintenance program when applied to the results of time based 

 72 NERC Comments at 10.

73 Id. at 11. 

74 NERC Petition, Ex. E (Supplementary Reference and FAQ) at 42. 
Docket No. RM13-7-000 - 31 -

maintenance of various component types” because the “variable performance 

expectations for different types of components are already reflected in the Table 1 time 

intervals.”75 Thus, NERC explains, components with high failure rates would not 

generate significant extensions in allowed maintenance intervals “unless dramatic 

advances in component reliability validate the use of significantly lower intervals.”

76 

NERC further explains that extension of the maintenance interval will reduce the number 

of Countable Events for a given year, such that highly reliable components will have a 

low number of permitted ‘failures’ per year. 

49. NERC accordingly asks that the Commission approve the four percent target 

failure rate as proposed. In the alternative, if the Commission determines it needs 

additional information to support the four percent figure, NERC asks that it be given the 

opportunity to provide that additional support rather than have the Commission direct 

modification of the proposed standard. NERC also indicates that it will have the “ability 

to track trends in Misoperations as industry gains practical experience with the 

performance based maintenance approach reflected in proposed PRC-005-2.”77 

50. Idaho Power, the only commenter other than NERC to address the four percent 

target failure rate, agrees with NERC that the four percent figure should be retained for 

 75 NERC Comments at 11-12. 

76 Id. at 12. 

77 Id. at 13.
Docket No. RM13-7-000 - 32 -

all component types.78 Idaho Power believes that the cost of developing specific failure 

rates for component types would outweigh the benefit of doing so. Idaho Power points 

out the practical limitations of developing specific failure rates, which “would need to 

account for different manufacturers, models, operating environments, production plants, 

and handling,” and would need to be updated periodically.79

Commission Determination

51. We are persuaded by the comments of NERC and Idaho Power to adopt the four 

percent target failure rate in performance-based maintenance programs, as described in 

Attachment A of PRC-005-2. In addition to the rationale provided by NERC, we 

recognize the practical need to adopt a target failure rate that is available to smaller 

organizations, and the cost and resources required to develop variable rates for different 

component types, and thus approve the approach set forth in Attachment A of PRC-005-

2. While we do not direct the submission of further data or support for the target failure 

rate at this time, we note NERC’s commitment to continue collecting data on 

misoperations,

80 and expect that NERC will maintain sufficient data bases to allow future 

evaluation of performance-based maintenance programs as compared to time-based 

 78 Idaho Power Comments at 2. 

79 Id. 

80 NERC Comments at 13. 
Docket No. RM13-7-000 - 33 -

maintenance programs, including the frequency of misoperations (including clearly 

tracking the underlying cause of the misoperations). 

D. Correcting Unresolved Maintenance Issues (Requirement R5)

NERC Petition

52. Requirement R5 of PRC-005-2 obligates responsible entities to “demonstrate 

efforts to correct identified Unresolved Maintenance Issues.” NERC defines an 

“unresolved maintenance issue” as a “deficiency identified during a maintenance activity 

that causes the component to not meet the intended performance, cannot be corrected 

during the maintenance interval, and requires follow-up corrective action.”81 In its 

Petition, NERC explained the rationale behind providing some latitude to complete 

correction or restoration of a discovered problem outside of the normal maintenance 

interval as follows:

The drafting team does not believe entities should be found in 

violation of a maintenance program requirement because of 

the inability to complete a remediation program within the 

original maintenance interval. The drafting team does believe 

corrective actions should be timely but concludes it would be 

impossible to postulate all possible remediation projects and 

therefore, impossible to specify bounding time frames for 

resolution of all possible Unresolved Maintenance Issues or 

what documentation might be sufficient to provide proof that 

effective corrective action has been initiated. Therefore 

 81 NERC Petition at 14.
Docket No. RM13-7-000 - 34 -

Requirement R5 requires only the entity demonstrate efforts 

to correct the Unresolved Maintenance Issues.82

NOPR

53. In the NOPR, the Commission agreed that it may be appropriate in certain 

circumstances to allow entities additional time beyond the maximum maintenance 

interval period to complete restorative action, including when the corrective action 

involves redesign, ordering additional equipment, or timing corrective work to 

correspond to planned outages.83 However, the Commission noted its expectation that 

such instances would be limited, and that in most circumstances entities should have the 

capability to replace components and make minor repairs within the maximum 

maintenance interval.84 

Comments

54. ITC states that it “does not oppose the overall structure” in Requirement R5 for 

correcting an Unresolved Maintenance Issue, but has concerns about the Commission’s 

“expectation that ‘entities should have the capability to replace components . . . within 

the maximum maintenance interval.’”85 ITC maintains that this expectation “ignores the 

challenges of maintaining older, well-functioning protection systems” that are “obsolete 

 82 Id. at 17. 

83 NOPR, 144 FERC ¶ 61,055 at P 37.

84 Id. 

85 ITC Comments at 5. 
Docket No. RM13-7-000 - 35 -

by current technology standards and/or for which replacement parts are no longer 

available.”86 ITC notes that its own practice is to institute a new capital project to replace 

obsolete protection systems with new technologies when obsolete protection systems 

unexpectedly fail or are found to be unacceptable when tested, which could take up to a 

year or more to complete. 

55. By contrast, the Bureau of Reclamation argues that the Requirement R5 obligation 

to “demonstrate efforts to correct identified Unresolved Maintenance Issues” is unclear, 

and asks the Commission to direct that NERC clarify the requirement “by including a 

requirement for entities to develop plans with timeframes for corrective actions.”87 

Commission Determination

56. We are not persuaded that any modification to Requirement R5 is needed at this 

time, or that it is unreasonable to expect, as stated in the NOPR, that in most 

circumstances responsible entities should not need longer than the maximum 

maintenance interval to complete corrective actions. While we agree with the Bureau of 

Reclamation that the adoption of a formal plan for correcting an Unresolved Maintenance 

Issue may help to demonstrate that an entity has demonstrated sufficient efforts to meet 

Requirement R5, we note that the adoption of such a plan may not be necessary in all 

cases, e.g., if the issue will be quickly resolved. Moreover, we can conceive of situations 

 86 Id. 

87 Bureau of Reclamation Comments at 2. 
Docket No. RM13-7-000 - 36 -

where the adoption of a formal plan for resolution of the issue should not be treated as a 

sufficient demonstration of effort to correct the issue. 

57. With regard to ITC’s comment regarding the time involved in certain 

replacements, particularly when they involve a new capital project, we recognize that in 

this circumstance (and others), it may appropriately require a significant period of time to 

address an Unresolved Maintenance Issue. Nonetheless, we do not believe that such a 

project is inconsistent with our expectation, as stated in the NOPR, that the instances in 

which restoration or repair is delayed beyond the normal maximum maintenance interval 

“will be limited and, in most circumstances, entities should have the capability to replace 

components and make minor repairs within the maximum maintenance interval.”88

58. In addition, we note that an Unresolved Maintenance Issue could degrade 

protection system performance to a level that requires notification and corrective action 

under Reliability Standard PRC-001-1. Under PRC-001-1, if a protective relay or 

equipment failure reduces system reliability, the transmission operator or generator 

operator must notify relevant reliability entities (e.g. the host balancing authority, 

 88 NOPR, 144 FERC ¶ 61,055 at P 37. 
Docket No. RM13-7-000 - 37 -

reliability coordinator, and affected transmission operators and balancing authorities) of 

the relay or equipment failure and must take corrective action as soon as possible. 89 

E. Violation Severity Level for Requirement R1 Violation – Station 

Batteries 

NERC Petition

59. Under the second sentence of Part 1.1 of Requirement R1, all batteries associated 

with station DC supply must be included in a time-based maintenance program, i.e., they 

are not eligible for a performance-based program.90 In assigning violation severity levels 

 89 Currently approved PRC-001-1 contains the following:

R2. Each Generator Operator and Transmission Operator shall notify 

reliability entities of relay or equipment failures as follows:

R2.1. If a protective relay or equipment failure reduces system 

reliability, the Generator Operator shall notify its Transmission 

Operator and Host Balancing Authority. The Generator Operator 

shall take corrective action as soon as possible.

R2.2. If a protective relay or equipment failure reduces system 

reliability, the Transmission Operator shall notify its Reliability 

Coordinator and affected Transmission Operators and Balancing 

Authorities. The Transmission Operator shall take corrective action 

as soon as possible.

90 NERC explained this unique treatment of station batteries as follows: 

Batteries are the only element of a Protection System that is a 

perishable item with a shelf life. As a perishable item 

batteries require not only a constant float charge to maintain 

their freshness (charge), but periodic inspection to determine 

if there are problems associated with their aging process and 

 (continued...)
Docket No. RM13-7-000 - 38 -

for Requirement R1, NERC assigned a “lower” violation severity level for the failure to 

include applicable station batteries in a time-based maintenance program. NERC also 

assigned a “lower” violation severity level for the failure to specify whether one 

Component Type is being addressed by time-based or performance-based maintenance, 

or a combination of both. NERC explained that “[t]here is an incremental aspect to the 

violation [of Requirement R1] and the VSLs follow the guidelines for incremental 

violations.”

91 

NOPR 

60. In the NOPR, the Commission proposed to direct NERC to change the violation 

severity level for the failure to include station batteries in a time-based program from a 

“lower” designation to a “severe” designation, based on the binary nature of the 

requirement.92 The Commission noted that entities either satisfy the obligation to include 

station batteries in a time-based program or fail to meet the requirement in its entirety, 

which is indicative of a binary requirement.

93 The Commission also noted that a low 

 

testing to see if they are maintaining a charge or can still 

deliver their rated output as required. 

NERC Petition, Ex. D (Technical Justification) at 8. 

91 NERC Petition, Ex. I (Discussion of Assignments of VRFs and VSLs) at 10.

92 NOPR, 144 FERC ¶ 61,055 at P 39. 

93 Id.; see also id. at n.53 (citing North American Electric Reliability Corporation, 

135 FERC ¶ 61,166, at P 13 (2011). 
Docket No. RM13-7-000 - 39 -

violation severity level designation does not properly reflect the number of historical 

violations associated with station battery maintenance.

94 

Comments 

61. NERC, Idaho Power, and the Cooperatives support NERC’s initial “lower” 

violation severity level designation for the failure to include station batteries in a timebased maintenance program. NERC notes that the purpose of Requirement R1 (as a 

whole) is “to obligate the entity to establish a Protection System Maintenance Program 

for its Protection Systems,” and that the subparts of the requirement are “not intended as 

separate subrequirements for compliance purposes.”95 NERC further notes that “it was 

not the intent of the standard drafting team to assign more importance to station batteries 

than any other Protection system component type as far as the initial establishment of the 

Protection System Maintenance Program.”96 NERC explains that the violation severity 

levels for Requirement R1 were assigned based on the main Requirement, and argues that 

it is appropriate to measure compliance with that Requirement using “a gradated level of 

non-compliance based on the number of component types missed . . . .”

97 NERC states 

that deletion of the failure to include station batteries in a time-based maintenance

 94 Id. P 39. 

95 NERC Comments at 14.

96 Id. at 14-15 (emphasis in original).

97 Id. at 15.
Docket No. RM13-7-000 - 40 -

program as a separately listed violation would be preferable to a directive requiring that 

failure to be treated as a “severe” level violation.

98

62. NERC also disagrees with the Commission’s statement that an assignment of a 

“lower” violation severity level in this context is inconsistent with the Commission’s 

approach to binary requirements. NERC asserts that neither it nor the standard drafting 

team considered Requirement R1 to be binary, and NERC points out that the Commission 

has adopted the general rule that “gradated Violation Severity Levels, where possible, 

would be preferable to binary Violations Severity Levels since the application of any 

penalty for a violation could be more consistently and fairly applied commensurate with 

the degree of the violation.”99

63. The Cooperatives and Idaho Power agree that a “lower” violation severity level is 

appropriate in this context.

100 The Cooperatives assert that a “severe” designation does 

not reflect the level of risk associated with the failure to test a given battery, and that the 

number of historical violations associated with station battery maintenance merely 

reflects NERC’s zero-tolerance policy for missing a defined testing interval by even one 

day.101 The Cooperatives agree with NERC that Requirement R1.1 is not binary,102 and 

 98 Id.

99 Id. at 16 (citing North American Electric Reliability Corporation, 123 FERC 

¶ 61,284, at P 27 (2008)). 

100 Cooperatives Comments at 9-10; Idaho Power Comments at 2.

101 Cooperatives Comments at 9.
Docket No. RM13-7-000 - 41 -

Idaho Power maintains that NERC’s proposed assignment properly takes into account 

“the incremental aspect to potential violations.”103

64. ITC supports the NOPR proposal to direct NERC to modify the violation severity 

level for Part 1.1 of Requirement R1, and agrees that the requirement is essentially binary 

with respect to compliance.104

Commission Determination

65. We are not persuaded that the failure to include station batteries in a time-based 

maintenance program should be assigned a “lower” violation severity level, when these 

components were singled out for special treatment in Requirement R1 as proposed. 

Furthermore, NERC does not propose gradated violation severity levels relating to 

whether a responsible entity includes station batteries in a time-based maintenance 

program. Nor does NERC explain how it would develop such gradated violation severity 

levels. NERC instead proposes a single, “lower” violation severity level assignment as to 

this requirement. NERC treats the requirement as binary, while proposing gradated 

violation severity levels for all other portions of Requirement R1. 105 In this situation, 

 

102 Id.

103 Idaho Power Comments at 2. 

104 ITC Comments at 4-5. 

105 NERC refers to a Commission statement that BAL-005-0, Requirement R12, 

which requires an applicable entity to include all tie line flows in a calculation, is not a 

binary requirement and can be gradated. NERC Comments at 15-16 (citing North 

 (continued...)
Docket No. RM13-7-000 - 42 -

the violation severity level must be “severe,” as NERC has previously stated.106 

However, NERC is free to develop and propose gradated violation severity level 

assignments for its time-based maintenance program requirement as to station batteries.

66. We also note that the level of risk associated with the failure to test a given battery 

is not an appropriate consideration in the context of assigning violation severity levels, 

but rather, should be considered when assigning a violation risk factor. In this case, 

Requirement R1 has been assigned a medium violation risk factor, which we accept as 

properly reflecting NERC’s determination that a violation of Requirement R1 could 

directly affect the electrical state or the capability of the bulk-power system, but is 

 

American Electric Reliability Corporation, 123 FERC ¶ 61,284, at P 26 (2008)). An 

applicable entity’s failure to include any tie line flows in the calculation would represent 

the most serious excursion from compliance with this requirement and be appropriate for 

a “severe” violation severity level assignment. As to the requirement that a responsible 

entity include all batteries associated with DC station supply in a time-based maintenance 

program, the single instance of violation NERC identifies in its violation severity levels 

for PRC-005-2 Requirement R1 is a failure to include any such batteries in a time-based 

maintenance program. Even if this requirement can be gradated for the purpose of 

assigning violation severity levels, the violation NERC identifies likewise would be the 

most serious excursion from compliance, so that a severe violation severity level 

assignment would be appropriate. 

106 “NERC further states that it will determine whether a requirement has a single 

violation severity requirement or a set of violation severity levels by analyzing the 

performance required to satisfy a particular requirement . . . . Requirements that are 

binary, i.e., pass/fail, will have only one violation severity level – severe.” North 

American Electric Reliability Corporation, 135 FERC ¶ 61,166, at P 13 (2011).
Docket No. RM13-7-000 - 43 -

unlikely to lead to bulk power system instability, separation, or cascading failures.107 We 

accordingly direct NERC to submit a compliance filing changing the violation severity 

level for the failure to include station batteries in a time-based maintenance program to 

“severe.”108

F. Definitions 

NERC Petition

67. NERC sought approval of six new definitions as part of proposed Reliability 

Standard PRC-005-2, i.e., Component, Component Type, Countable Event, Protection 

System Maintenance Program, Segment, and Unresolved Maintenance Issue. Of these 

newly defined terms, NERC proposed to include only the term Protection System 

Maintenance Program in its Glossary of Terms, with the remainder applying only to 

Reliability Standard PRC-005-2.

NOPR 

68. In the NOPR, the Commission proposed to approve all six definitions without 

modification.

 107 NERC Petition, Ex. I (Discussion of Assignments of VRFs and VSLs) at 5-6. 

108 We disagree with NERC’s suggestion to delete this VSL assignment rather than 

direct a change in it because “the compliance element is covered adequately by the 

remaining language in the ‘lower’ VSL” for Requirement R1. NERC Comments at 15. 

Under NERC’s suggestion, a responsible entity that specifies that it is using a 

performance-based maintenance program for station batteries would be in compliance 

with the first sentence of Requirement R1.1, but in violation of the second sentence, 

without an applicable violation severity level. 
Docket No. RM13-7-000 - 44 -

Comments

69. The Bureau of Reclamation asks the Commission to direct NERC to clarify 

section 4.2 (Applicability) to eliminate use of the vague or confusing terms “such as,” 

“including,” and “etc.,” including eliminating their use in the definition of the term 

“Element” (as referenced in PRC-005-2) and in the standard-specific definition of 

“Component.”109 In addition, the Bureau of Reclamation suggests that the Commission 

require all definitions included in standards to be included in the NERC Glossary as a 

general matter, “to promote consistency among standards.”110

Commission Determination

70. We are not persuaded that the use of the terms and phrases highlighted by the 

Bureau of Reclamation, which allow for the use of an illustrative list of elements or 

facilities that are included within a definition, renders that definition or the standard’s 

applicability impermissibly vague. Nor are we persuaded that the definitions at issue in 

this docket that are used in the context of this standard must be adopted in NERC’s 

Glossary of Terms for potential application to all standards.

111 However, we note that 

 109 Bureau of Reclamation Comments at 2.

110 Id. at 1-2.

111 This appears to be a unique situation in that the five defined terms at issue have 

been developed specifically for use with PRC-005-2 and do not have broader 

applicability. However, we note that our approval of the defined terms as part of PRC005-2 makes them binding on the ERO, regional entities, and registered entities for 

purposes of PRC-005-2, regardless of whether the terms appear in NERC’s Glossary of 

 (continued...)
Docket No. RM13-7-000 - 45 -

NERC should not adopt inconsistent definitions for the same term. We therefore accept 

the six definitions associated with PRC-005-2 as proposed by NERC without

modification. 

III. Information Collection Statement

71. The following collection of information contained in this Final Rule is subject to 

review by the Office of Management and Budget (OMB) under section 3507(d) of the 

Paperwork Reduction Act of 1995.112 OMB’s regulations require approval of certain 

information collection requirements imposed by agency rules.113 Upon approval of a 

collection(s) of information, OMB will assign an OMB control number and an expiration 

date. Respondents subject to the filing requirements of a rule will not be penalized for 

failing to respond to these collections of information unless the collections of information 

display a valid OMB control number. 

72. The Commission approves Reliability Standard PRC-005-2, which replaces PRC005-1.1b (Transmission and Generation Protection System Maintenance and Testing), 

PRC-008-0 (Underfrequency Load Shedding Equipment Maintenance), PRC-011-0 

 

Terms or as part of the individual standard. See, e.g., Notice of Proposed Rulemaking, 

Monitoring System Conditions - Transmission Operations Reliability Standard, 

Transmission Operations Reliability Standards, Interconnection Reliability Operations 

and Coordination Reliability, 145 FERC ¶ 61,158, at P 66, n.81 (2013) (“The 

Commission has held that definitions are standards.”). 

112 44 U.S.C. 3507(d) (2012).

113 5 CFR 1320.11 (2012).
Docket No. RM13-7-000 - 46 -

(Undervoltage Load Shedding Equipment Maintenance) and PRC-017-0 (Special 

Protection System Maintenance and Testing). The Reliability Standard combines the 

requirements for maintenance and testing of protection systems, special protection 

systems, underfrequency load shedding equipment, and undervoltage load shedding 

equipment into one, comprehensive standard. In addition, the Reliability Standard sets 

out minimum maintenance activities and maximum maintenance intervals for the various 

components of these systems, but also allows applicable entities to adopt performancebased maintenance intervals in certain circumstances. 

73. Reliability Standard PRC-005-2 includes specific requirements about the 

minimum maintenance activities required for each type of applicable component, as well 

as a maximum time interval during which the maintenance must be completed. Because 

the specific requirements were designed to reflect common industry practice, entities are 

generally not expected to experience a meaningful change in actual maintenance and 

documentation practices. However, applicable entities will have to perform a one-time 

review of their current protection system maintenance programs to ensure that they meet 

the requirements of the revised standard PRC-005-2. Accordingly, all expected 

information collection costs are expected to be limited to the first year of implementation 

of the revised standard. 

74. Public Reporting Burden: Our estimate below regarding the number of 

respondents is based on the NERC compliance registry as of June 10, 2013. According 

to the compliance registry, 544 entities are registered as distribution providers, 

898 entities are registered as generation owners, and 346 entities are registered as 
Docket No. RM13-7-000 - 47 -

transmission owners within the United States. However, due to significant overlap, the 

total number of these affected entities (i.e., entities registered as a distribution provider, a 

generation owner, a transmission owner, or some combination of these three functional 

entities) is 867 entities. 

75. Affected entities must perform a one-time review of their existing protection 

system maintenance program to ensure that it contains at a minimum the activities listed 

in Tables 1 through 3 in Reliability Standard PRC-005-2 and that the activities are 

performed within the applicable maximum interval listed in Tables 1 through 3. If the 

existing protection system maintenance program does not meet the criteria in Reliability 

Standard PRC-005-2, the entity will have to make certain adjustments to the program. 

Requirement

Number 

of 

Affected 

Entities

(1)

Number 

of PSMP 

Reviewed 

Per Entity 

(2)

Average

Number 

of Hours 

per 

Review

(3)

Total Burden 

Hours

(1)*(2)*(3)=(4)

Total 

Cost 

(4)*$70114

One time review 

and adjustment of 

existing protection 

system 

maintenance 

program 867 1 8 6,936 $485,520

 114 This figure is the average of the salary plus benefits for a manager and an 

engineer. The figures are taken from the Bureau of Labor and Statistics at 

(http://bls.gov/oes/current/naics3_221000.htm). 
Docket No. RM13-7-000 - 48 -

Title: FERC-725P, Mandatory Reliability Standards: Reliability Standard PRC-005-2

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: One time. 

Necessity of the Information: The Reliability Standard PRC-005-2 implements 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 BulkPower System. Specifically, the new Reliability Standard ensures that transmission and 

generation protection systems affecting the reliability of the bulk electric system are 

maintained and tested.

76. Internal review: The Commission has reviewed revised Reliability Standard PRC005-2 and made a determination that approval of this standard 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 estimates associated with 

the information requirements.

77. 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]. 

78. Comments concerning the information collections in this rule and the associated 

burden estimates should be sent to the Commission and to the Office of Management and 
Docket No. RM13-7-000 - 49 -

Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the 

Federal Energy Regulatory Commission]. For security reasons, comments to OMB 

should be sent by e-mail to: oira_submission@omb.eop.gov. Please reference Docket 

No. RM13-7-000 (FERC-725P) in your submission.

IV. Regulatory Flexibility Act Analysis

79. The Regulatory Flexibility Act of 1980 (RFA)115 generally requires a description 

and analysis of rules that will have significant economic impact on a substantial number 

of small entities. As discussed above, Reliability Standard PRC-005-2 will apply to an 

estimated 867 individual entities (the number of entities registered as a distribution 

provider, a generator owner, a transmission owner, or any combination of those three 

functional entities). Comparison of the NERC Compliance Registry with data submitted 

to the Energy Information Administration on Form EIA-861 indicates that, of these 

entities, 230 may qualify as small entities.

116 Of the 230 small entities, 90 are registered 

as a combination of distribution providers, generator owners and transmission owners, 

but it is assumed that each entity would have only one comprehensive program to review. 

 115 5 U.S.C. 601-12.

116 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 Small Business Administration, 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 No. RM13-7-000 - 50 -

80. The Commission estimates that, on average, each of the 230 small entities affected 

will have a one-time cost of $560, representing a one-time review of the program for each 

entity, consisting of 8 man-hours at $70/hour as explained above in the information 

collection statement. We do not consider this cost to be a significant economic impact 

for small entities. Accordingly, the Commission certifies that Reliability Standard PRC005-2 will not have a significant economic impact on a substantial number of small 

entities. 

V. Environmental Analysis

81. 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.117 The Commission has categorically excluded certain 

actions from this requirement as not having a significant effect on the human 

environment. Included in the exclusion are rules that are clarifying, corrective, or 

procedural or that do not substantially change the effect of the regulations being 

amended.118 The actions taken herein fall within this categorical exclusion in the 

Commission’s regulations.

 117 Regulations Implementing the National Environmental Policy Act of 1969, 

Order No. 486, FERC Stats. & Regs. ¶ 30,783 (1987).

118 18 CFR 380.4(a)(2)(ii).
Docket No. RM13-7-000 - 51 -

VI. Document Availability

82. 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.

83. 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.

84. 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.

VII. Effective Date and Congressional Notification

85. This Final Rule is effective [insert date 60 days from publication in Federal

Register]. 

86. The Commission has determined, with the concurrence of the Administrator of the 

Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” 
Docket No. RM13-7-000 - 52 -

as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 

1996.119 The Commission will submit the Final Rule to both houses of Congress and to 

the General Accountability Office.

By the Commission. 

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.

 119 See 5 U.S.C. 804(2) (2007).
Docket No. RM13-7-000 - 53 -

Note: The Appendix will not appear in the Code of Federal Regulations.

Appendix A

Commenters

Associated Electric Cooperative, Inc., Basin Electric Power Cooperative, Inc. 

and Tri-State Generation and Transmission Association (Cooperatives)

Duke Energy Corporation (Duke Energy) 

Idaho Power Company (Idaho Power) 

International Transmission Company d/b/a ITCTransmission, Michigan 

Electric Transmission Company, LLC, ITC Midwest LLC and ITC Great 

Plains, LLC (ITC)

North American Electric Reliability Corporation (NERC) 

Oncor Electric Delivery Company LLC (Oncor) 

United States Department of the Interior, Bureau of Reclamation (Bureau of 

Reclamation)