135 FERC ¶ 61,041 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 40 

[Docket No. RM10-8-000; Order No. 750] 

Electric Reliability Organization Interpretations of Interconnection Reliability Operations 

and Coordination and Transmission Operations Reliability Standards 

(Issued April 21, 2011) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule 

SUMMARY: Pursuant to section 215 of the Federal Power Act, the Federal Energy 

Regulatory Commission hereby approves the North American Electric Reliability 

Corporation’s (NERC) interpretation of the Commission-approved Reliability Standards, 

IRO-005-1, Reliability Coordination – Current-Day Operations, Requirement R12, and 

TOP-005-1, Operational Reliability Information, Requirement R3. Specifically, the 

interpretation finds that a transmission owner must report a Special Protection System 

that is operating with only one communication channel in service to the reliability 

coordinator and neighboring systems upon request, or when the loss of the 

communication channel will result in the failure of the Special Protection System to 

operate as designed. 

EFFECTIVE DATE: This rule will become effective [insert date that is 30 days from the 

date that the Final Rule is published in the FEDERAL REGISTER]. 
Docket No. RM10-8-000 ii 

FOR FURTHER INFORMATION CONTACT: 

Danny Johnson (Technical Information) 

Office of Electric Reliability 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8892 

danny.johnson@ferc.gov 

Richard M. Wartchow (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8744 

SUPPLEMENTARY INFORMATION:
135 FERC ¶ 61,041 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

 Marc Spitzer, Philip D. Moeller, 

 John R. Norris, and Cheryl A. LaFleur. 

Electric Reliability Organization Interpretations of 

Interconnection Reliability Operations and 

Coordination and Transmission Operations Reliability 

Standards 

Docket No. RM10-8-000 

ORDER NO. 750 

FINAL RULE 

(Issued April 21, 2011) 

 

1. Pursuant to section 215 of the Federal Power Act, the Federal Energy Regulatory 

Commission hereby approves the North American Electric Reliability Corporation’s 

(NERC) interpretation of the Commission-approved Reliability Standards, IRO-005-1, 

Reliability Coordination – Current-Day Operations, and TOP-005-1, Operational 

Reliability Information. Specifically, the interpretation finds that a transmission owner 

must report a Special Protection System that is operating with only one communication 

channel in service to the reliability coordinator and neighboring systems upon request, or 

when the loss of the communication channel will result in the failure of the Special 

Protection System to operate as designed. In the Final Rule, the Commission declines to 

adopt the proposal from the Notice of Proposed Rulemaking (NOPR) to direct the 

Electric Reliability Organization (ERO) to develop modifications to the Reliability 
Docket No. RM10-8-000 - 2 - 

Standards to require additional reporting and instead approves the interpretation as 

submitted.1

 

I. Background

A. FPA Section 215 and Mandatory Reliability Standards

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

mandatory and enforceable Reliability Standards, which are subject to Commission 

review and approval. Once approved, the Reliability Standards may be enforced by the 

ERO, subject to Commission oversight, or by the Commission independently.2

3. Pursuant to section 215 of the FPA, the Commission established a process to select 

and certify an ERO3

 and subsequently certified NERC as the ERO.4 On April 4, 2006, as 

modified on August 28, 2006, NERC submitted to the Commission a petition seeking 

 1 Electric Reliability Organization Interpretations of Interconnection Reliability 

Operations and Coordination and Transmission Operations Reliability Standards, Notice 

of Proposed Rulemaking, 75 FR 80391 (Dec. 22, 2010), 133 FERC ¶ 61,234, at P 27 

(2010) (NOPR). 

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

3 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). 

4 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). 
Docket No. RM10-8-000 - 3 - 

 

approval of 107 proposed Reliability Standards. On March 16, 2007, the Commission 

issued a Final Rule, Order No. 693, approving 83 of these 107 Reliability Standards and 

directing other action related to these Reliability Standards.5

 In addition, pursuant to 

section 215(d)(5) of the FPA, the Commission directed NERC to develop modifications 

to 56 of the 83 approved Reliability Standards.6

 

4. NERC’s Rules of Procedure provide that a person that is “directly and materially 

affected” by Bulk-Power System reliability may request an interpretation of a Reliability 

Standard.7

 The ERO’s standards process manager will assemble a team with relevant 

expertise to address the requested interpretation and also form a ballot pool. NERC’s 

Rules provide that, within 45 days, the team will draft an interpretation of the Reliability 

Standard, with subsequent balloting. If approved by ballot, the interpretation is appended 

to the Reliability Standard, forwarded to the NERC Board of Trustees (Board) for 

adoption and filed with the applicable regulatory authority for regulatory approval. 

5 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). 

6

 16 U.S.C. 824o(d)(5). Section 215(d)(5) provides, “The Commission . . . may 

order the Electric Reliability Organization to submit to the Commission a proposed 

reliability standard or a modification to a reliability standard that addresses a specific 

matter if the Commission considers such a new or modified reliability standard 

appropriate to carry out this section.” 

7

 NERC’s interpretation process is detailed in its Rules of Procedure, Appendix 

3A, Standards Process Manual, at 27-29 (effective Sept. 3, 2010). 
Docket No. RM10-8-000 - 4 - 

B. IRO-005-1 and TOP-005-1 Reliability Standards

5. In this proceeding, the Commission addresses NERC’s interpretation of the 

IRO-005-1 and TOP-005-1 Reliability Standards, as previously discussed in the NOPR. 

In Order No. 693, the Commission approved prior versions of the IRO-005-1 and 

TOP-005-1, with modifications.8

 The Commission directed NERC to modify TOP-005-1 

to specify the operational status of Special Protection Systems and power system 

stabilizers as information that transmission operators are expected to share, unless 

otherwise agreed.9

 Because these and other intervening changes are not material to the 

substance of the interpretation, the discussion in this Final Rule is intended to apply 

equally to the subsequent versions of these standards as appropriate. 

1. Reliability Standard IRO-005-1

6. Reliability Standard IRO-005-1 applies to transmission operators, balancing 

authorities, reliability coordinators and purchasing selling entities. The IRO-005-1 

Purpose statement provides: “The Reliability Coordinator must be continuously aware of 

conditions within its Reliability Coordinator Area and include this information in its 

 8

 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 945, 1648. 

9 Id. P 1648 (directing revisions to TOP-005-1, Attachment 1). The Commission 

addressed the most recent versions of the IRO-005-1 and TOP-005-1 Reliability 

Standards in Mandatory Reliability Standards for Interconnection Reliability Operating 

Limits, Order No. 748, 76 FR, 16240 (Mar. 23, 2011), 134 FERC ¶ 61,213 (2011) 

(revising responsibilities for interconnection reliability operating limit and system 

operating limit monitoring), Notice of Proposed Rulemaking, 75 Fed. Reg. 71613 

(Nov. 24, 2010), FERC Stats. & Regs. ¶ 32,665, at P 65 (2010). 
Docket No. RM10-8-000 - 5 - 

reliability assessments. The Reliability Coordinator must monitor Bulk Electric System 

parameters that may have significant impacts upon the Reliability Coordinator Area and 

neighboring Reliability Coordinator Areas.” Requirement R12 of IRO-005-1 states in 

relevant part: 

Whenever a Special Protection System that may have an 

inter-Balancing Authority, or inter-Transmission Operator 

impact (e.g., could potentially affect transmission flows 

resulting in a SOL or IROL violation) is armed, the 

Reliability Coordinator shall be aware of the impact of the 

operation of that Special Protection System on inter-area 

flows. The Transmission Operator shall immediately inform 

the Reliability Coordinator of the status of the Special 

Protection System including any degradation or potential 

failure to operate as expected. 

2. Reliability Standard TOP-005-1 

7. Reliability Standard TOP-005-1 applies to transmission operators, balancing 

authorities, reliability coordinators and purchasing selling entities, and has the stated 

purpose of ensuring that reliability entities have the operating data needed to monitor 

system conditions within their areas.10

8. Requirement R3 of TOP-005-1 states in relevant part: 

Upon request, each Balancing Authority and Transmission 

Operator shall provide to other Balancing Authorities and 

Transmission Operators with immediate responsibility for 

operational reliability, the operating data that are necessary to 

allow these Balancing Authorities and Transmission 

Operators to perform operational reliability assessments and 

 10 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1642. 
Docket No. RM10-8-000 - 6 - 

to coordinate reliable operations. Balancing Authorities and 

Transmission Operators shall provide the types of data as 

listed in Attachment 1-TOP-005-0 “Electric System 

Reliability Data,” unless otherwise agreed to by the Balancing 

Authorities and Transmission Operators with immediate 

responsibility for operational reliability. 

TOP-005-1, Attachment 1 includes “New or degraded special protection systems” in the 

types of data to be reported. 

C. Special Protection Systems

9. Also in Order No. 693, the Commission reviewed standards addressing Special 

Protection System design, operation, and coordination.11 The Commission declined to 

approve them because they were “fill in the blank” standards that required regional 

reliability organizations to develop criteria for each region. Subsequently, NERC has 

produced a white paper providing background for its Protection System Reliability 

Standards development effort.12 After this standards development effort was initiated, 

the NERC Regional Reliability Standards Working Group identified the Special 

 11 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1520, 1528, et seq.

(declining to approve or remand certain Special Protection Systems-related Reliability 

Standards, including PRC-012-0, Special Protection System Review Procedure; 

PRC-013-0, Special Protection System Database; PRC-014-0, Special Protection System 

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

proposed standards that required the regional reliability organizations to develop at a later 

date criteria for use by users, owners or operators within each region. 

12 NERC System Protection and Control Subcommittee (SPCS), November 18, 

2008 white paper on Protection System Reliability, Redundancy of Protection System 

Elements available at http://www.nerc.com/filez/spctf.html (posted Jan. 14, 2009). 
Docket No. RM10-8-000 - 7 - 

 

Protection System standard as one that required regional standard development.13 The 

Commission understands that the regional standard development efforts are currently 

ongoing. 

10. The NERC glossary provides definitions of terms used in the Reliability Standards 

and defines a “Special Protection System” as: 

An automatic protection scheme designed to detect abnormal 

or predetermined system conditions and take corrective 

actions other than and/or in addition to the isolation of faulted 

component to maintain system reliability. Such action may 

include changes in demand, generation (MW and MVAR), or 

system configuration to maintain system stability, acceptable 

voltage or power flows.14 

11. Special Protection Systems generally are used to address system reliability 

vulnerabilities in lieu of installing additional Bulk-Power System facilities. For instance, 

a Special Protection System may be used to control generator output to limit line loading 

after a contingency, or a Special Protection System may rely on pre-determined 

operational protocols to reconfigure the system in response to identified system 

conditions to prevent system instability or cascading outages, and protect other facilities 

in response to transmission outages. 

13 NERC Regional Reliability Standards Working Group, notes on October 29, 

2009 meeting, available at http://www.nerc.com/filez/rrswg.html . 

14 In the Western Interconnection, a Special Protection System is called a 

“Remedial Action Scheme.” 
Docket No. RM10-8-000 - 8 - 

D. NERC’s Interpretation Filing

12. NERC filed its interpretation on November 24, 2009. The interpretation responds 

to a request from Manitoba Hydro asking NERC to interpret whether a Special Protection 

System that is operating with only one communication channel in service would be 

considered “degraded,” and thus subject to the reporting requirements found in these 

standards.15 NERC’s interpretation finds that a transmission owner must report a Special 

Protection System that is operating with only one communication channel in service to 

the reliability coordinator and neighboring systems upon request, or when the loss of the 

communication channel will result in the failure of the Special Protection System to 

operate as designed. 

1. NERC Interpretation Process

13. Manitoba Hydro asked whether a Special Protection System that is operating with 

only one communication channel in service would be considered “degraded” for the 

purposes of these standards. Manitoba Hydro stated: 

Unlike other facilities, Special Protection Systems are 

required by NERC standards to be designed with redundant 

communication channels, so that if one communication 

channel fails the [Special Protection System] is able to remain 

in operation. Requirement R1.3 of NERC Standard 

PRC-012-0 requires a Regional Reliability Organization with 

Transmission Owners that use [Special Protection Systems] to 

have a documented review procedure to ensure that [Special 

 15 The NERC Petition provides a copy of Manitoba Hydro’s November 28, 2008 

request for interpretation as Exhibit A. 
Docket No. RM10-8-000 - 9 - 

 

Protection Systems] comply with reliability standards and 

criteria, including: “requirements to demonstrate that the 

[Special Protection System] shall be designed so that a single 

[Special Protection System] component failure, when the 

[Special Protection System] was intended to operate, does not 

prevent the interconnected transmission system from meeting 

the performance requirements in TPL-001-0, TPL-002-0 and 

TPL-003-0.” Accordingly, [Special Protection Systems] are 

designed to continue to perform their function with only one 

communication channel in service. 

14. Accordingly, Manitoba Hydro asserted that a Special Protection System should 

not be considered “degraded” if it is operating with one communication channel out of 

service. 

15. Consistent with the NERC Rules of Procedure, NERC assembled a team to 

respond to the request for interpretations of these two Reliability Standard requirements 

and presented the proposed interpretations to industry ballot, using a process similar to 

the process it uses for the development of Reliability Standards.16 According to NERC, 

the interpretations were developed and approved by industry stakeholders using the 

NERC Reliability Standards Development Procedure and approved by the NERC Board. 

16. In response to Manitoba Hydro’s interpretation request, NERC provided the 

following: 

TOP-005-1 does not provide, nor does it require, a definition 

for the term “degraded.” 

16 NERC Standards Process Manual at 27-29. 
Docket No. RM10-8-000 - 10 - 

 

The IRO-005-1 ([Requirement] R12) standard implies that 

degraded is a condition that will result in a failure of an 

[Special Protection System] to operate as designed. If the 

loss of a communication channel will result in the failure of 

an [Special Protection System] to operate as designed, then 

the Transmission Operator would be mandated to report that 

information. On the other hand, if the loss of a 

communication channel will not result in the failure of the 

[Special Protection System] to operate as designed, then such 

a condition can be, but is not mandated to be, reported. 

17. In the background section of the interpretation, NERC affirms that transmission 

operators are required to provide information such as that listed in the TOP-005-1, 

Attachment 1 examples upon request, “whether or not [a facility] is or is not in some 

undefined ‘degraded’ state.”17 

18. In addition, the background section of the NERC interpretation emphasizes that 

the information to be provided under IRO-005-1 relates to events that may have a 

significant impact on the system, especially where operating limits are or may be 

exceeded. Specifically, this background section states: 

IRO-005-1 mandates that each Reliability Coordinator 

monitor predefined base conditions (Requirement R1), collect 

additional data when operating limits are or may be exceeded 

(Requirement R3), and identify actual or potential threats 

(Requirement R5). The basis for that request is left to each 

Reliability Coordinator. The Purpose statement of IRO-005-1 

focuses on the Reliability Coordinator’s obligation to be 

aware of conditions that may have a “significant” impact 

17 NERC Petition, Exhibit B at 5 (proposing text of interpretation as Appendix 1 to 

IRO-005-1 and TOP-005-1, and including “Background Information for Interpretation” 

section). 
Docket No. RM10-8-000 - 11 - 

 

upon its area and to communicate that information to others 

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

communication that Transmission Operators and Balancing 

Authorities would either obtain or would know to ask for 

[Special Protection System] information from another 

Transmission Operator.18 

19. In addition, the NERC Petition states: 

The NERC Board of Trustees, in approving these 

interpretations, did so using a standard of strict construction 

that does not expand the reach of the standard or correct a 

perceived gap or deficiency in the standard. However, the 

NERC Board of Trustees recommended that any gaps or 

deficiencies in a Reliability Standard that are evident through 

the interpretation process be addressed promptly by the 

standard drafting team.19 

20. NERC reports that it will examine any gaps or deficiencies in Reliability 

Standards TOP-005-1 and IRO-005-2 when it develops the next version of these 

standards through the Reliability Standards development process. According to NERC, 

the interpretations do not modify the language contained in the requirements under 

review. NERC states that the interpretations do not represent new or modified Reliability 

Standard requirements and will provide instruction and guidance of the intent and 

application of the requirements. NERC requests that the Commission approve the 

interpretations and make them effective immediately after approval, consistent with the 

Commission’s procedures. 

18 Id., Exhibit B at 6. 

19 NERC Petition at 5. 
Docket No. RM10-8-000 - 12 - 

21. NERC submitted its Petition for Approval of Interpretations to Reliability 

Standard TOP-005-1 – Operational Reliability Information and Reliability Standard 

IRO-005-1 – Reliability Coordination – Current Day Operations (Petition) on 

November 24, 2009, seeking Commission approval of the interpretations referenced in 

the title of its pleading. 

E. Notice of Proposed Rulemaking

1. Proposed Determination

22. In the NOPR, the Commission proposed to approve the interpretation as just and 

reasonable and not inconsistent with the language of the Reliability Standards. However, 

to address a concern that a Special Protection System that has lost a communication 

channel could compromise system reliability, the Commission proposed to direct that the 

ERO develop modifications to the Reliability Standards to address a potential reliability 

gap and ensure that a component failure, wherein a Special Protection System may not be 

able to perform as designed to ensure required Bulk-Power System performance, is 

reported to the appropriate reliability entities. To assist its consideration of the issues in 

this proceeding, the Commission requested comment on its proposal, and requested that 

reliability coordinators and transmission operators report whether it would be useful to 

the operation and coordination of the transmission system to receive information 

concerning the loss of a redundant communication channel. 

23. In the NOPR, the Commission acknowledged the NERC System Protection and 

Control Subcommittee’s (SPCS) November 18, 2008 white paper, “Protection System 
Docket No. RM10-8-000 - 13 - 

 

Reliability, Redundancy of Protection System Elements,” which explained that 

“[r]edundancy means that two or more functionally equivalent Protection Systems are 

used to protect each electric system element.”20 The SPCS also explained that “[a] 

fundamental concept of redundancy is that Protection Systems need to be designed such 

that electric system faults will be cleared, even if a component of the Protection System 

fails.”21 In other words, redundant communication channels are a means to provide for 

the reliable operation of the Special Protection System. Thus, the Commission found 

that, should a communication channel fail at the time the Special Protection System is 

required to operate, the designed redundancy of the Special Protection System ensures 

that the Bulk-Power System can meet its reliability performance requirements. 

24. However, the NOPR expressed the Commission’s concern that, given NERC’s 

proposed interpretation, a loss of a communication channel, a necessary and inherent 

performance requirement of a Special Protection System, may not be considered a 

reportable event under the current reporting requirements. The NOPR highlighted the 

critical status of Special Protection Systems, noting that they are by their nature used to 

address system reliability vulnerabilities to prevent system instability, cascading outages, 

20 NERC SPCS White Paper at 9, available at http://www.nerc.com/filez/spctf.html

(dated Jan. 14, 2009). 

21 Id.; see also Table 4-3 in the white paper noting possible responses to 

communication channel failure including adding a redundant channel or performing 

testing to ensure that delayed fault clearing does not violate the planning standards. 
Docket No. RM10-8-000 - 14 - 

and protect other facilities in response to contingencies. Therefore, a failure of the 

remaining communication component of a Special Protection System creates a reliability 

risk to the Bulk-Power System. We continued that where one communication channel 

has failed, the Special Protection System may not be able to meet the performance 

criteria of the Reliability Standards and in particular the performance criteria specified in 

the Transmission Planning (TPL) standards, because the Special Protection System may 

not withstand a second component failure. In conclusion, the Commission expressed its 

view that such a Special Protection System would be operating at some state less than the 

normal secure state and should need to be reported to the appropriate reliability entities in 

order for these reliability entities to accurately assess operational reliability. 

2. Comments

25. NERC, Manitoba Hydro, Bonneville Power Administration (Bonneville), Edison 

Electric Institute (EEI), Entergy Services, Inc. (Entergy) and the ISO/RTO Council 

submitted comments in response to the NOPR. Electric Reliability Council of Texas, Inc. 

(ERCOT) submitted comments prior to the NOPR. 

26. Commenters support the Commission’s proposal to approve NERC’s 

interpretation. However, with respect to the Commission’s proposal to direct NERC to 

develop additional reporting requirements,22 NERC and others responded to the 

 22 NOPR, 133 FERC ¶ 61,234 at P 23, 27 (expressing concern that a Special 

Protection System that has lost a communication channel could compromise system 

reliability, but would not be reported to the appropriate reliability entities). 
Docket No. RM10-8-000 - 15 - 

 

Commission’s proposal and emphasize that the information to be reported under the 

NOPR proposal is already available pursuant to other requirements. For instance, 

ISO/RTO Council states that the information is available to a reliability coordinator under 

IRO-002-1, Requirement R2.23 NERC asserts that knowledge of the loss of a 

communication channel could be of general interest to a reliability coordinator or 

transmission operator and reports that its drafting teams are currently reviewing whether 

such entities should have the authority to request any and all information deemed 

necessary to protect the reliability of the bulk electric system, including the status of 

Special Protection System communication channels.24 

27. Entergy cites IRO-005-2, Requirement R1.1 which states that a reliability 

coordinator must monitor the status of bulk electric system elements, including critical 

auxiliaries such as Special Protection Systems. According to Entergy, IRO-005-2, 

Requirement R1.1, demonstrates that information on the loss of Special Protection 

System communication channels is already available to reliability coordinators. Entergy 

likewise cites IRO-005-2, Requirement R1.1, which provides that each reliability 

coordinator shall monitor its reliability coordinator area parameters, including “Current 

23 ISO/RTO Council at 3 (citing similar requirement in new, proposed Reliability 

Standard, IRO-010-1a, Requirement R3). See also NERC at 4-5; NOPR, 133 FERC 

¶ 61,234 at P 18 (noting interpretation assertion that reporting under TOP-005-1 is not 

dependent on whether a Special Protection System is in a degraded state); Order No. 748, 

134 FERC ¶ 61,213. 

24 NERC at 4. 
Docket No. RM10-8-000 - 16 - 

 

Status of Bulk Electric Systems elements (transmission or generation including critical 

auxiliaries such as Automatic Voltage Regulators and Special Protection Systems) and 

system loading.”25 Entergy states, “In order to monitor the status of a Special Protection 

System, a reliability coordinator must know whether any of the redundant components of 

a Special Protection System are non-operational.”26 

28. Entergy also identifies IRO-002-1, Requirement R5, which provides that each 

Reliability coordinator shall have of the capability to monitor its reliability coordinator 

area and surrounding reliability coordinator areas “to ensure that potential or actual 

System Operating Limits or Interconnection Reliability Operating Limit violations are 

identified.” Entergy concludes that reliability coordinators must know whether redundant 

components of a Special Protection System are operational, in order to monitor the status 

of the Special Protection System. Entergy also asserts that a reliability coordinator must 

monitor the status of communication channels in order to meet its obligations to ensure 

that unplanned events do not interfere with its ability to determine system operating limit 

violations under IRO-003-2 and IRO-002-1. Entergy concludes that, to the extent the 

information would be useful to the reliability coordinators, “they already have it.” 

29. Commenters disagree with the premise that the loss of a Special Protection System 

communication channel could have an impact on reliability because the remaining 

25 Entergy at 7. 

26 Id. 
Docket No. RM10-8-000 - 17 - 

s 

benefit. 

 

channel ensures that the system is able to function.27 According to ISO/RTO Council 

and NERC, the loss of a communication channel on a redundant Special Protection 

System does not require changes to operational protocols, such as by moving toward

more conservative operations, because the Special Protection System is expected to 

operate properly with the other communication channel in service.28 NERC reports that 

industry experts determined that a reliability coordinator or transmission operator will 

operate as usual, and not more conservatively, upon learning that a Special Protection 

System is operating normally, even though a communication channel is out of service, 

and objected to the proposal as imposing a reporting burden without a corresponding 

reliability 

30. According to ISO/RTO Council, the loss of a communication channel does not 

require specific planning and operating actions based on the particular system conditions 

being experienced.29

31. Some commenters predict that requiring reports on out-of-service communication 

channels could result in a flood of reports that are not useful to system planning and 

operation. Bonneville reports that it has over 600 communication channels dedicated to 

27 See NERC at 3; Bonneville at 3; EEI at 5 and Affidavit of W. Miller; Entergy at 

5; ISO/RTO Council at 3, 4; Manitoba Hydro at 4-5. 

28 E.g., NERC at 3; ISO/RTO Council at 3-4. 

29 ISO/RTO Council at 5. 
Docket No. RM10-8-000 - 18 - 

its Special Protection Systems, and notes that some channels are bound to experience 

technical difficulties or be taken out of service during an outage. Bonneville concludes 

that requiring its dispatchers to report to the reliability coordinator every time a 

communication channel fails or is removed from service would result in additional 

reporting and documentation with no corresponding benefit. Bonneville also commented 

that “loss of communication channels happens frequently.”30 

32. Several commenters object to the Commission’s taking action in an interpretation 

proceeding to propose changes to the Reliability Standard requirements and propose 

alternate venues to press any concerns that are identified.31 ERCOT, on the other hand, 

objects to the interpretation claiming that NERC should have provided clarity or guidance 

as to what constitutes a degraded Special Protection System. 

II. Discussion

33. The Commission declines to adopt the NOPR proposal and approves NERC’s 

interpretation of IRO-005-1, Requirement R12 and TOP-005-1, Requirement R3 as 

submitted. The Commission approves the interpretation as consistent with the language 

of the Reliability Standards, and finds the interpretation just and reasonable. Based on 

the comments of NERC and the industry that no reliability gap exists, the Commission 

will rely on their expert opinion and decline to adopt the NOPR proposal to direct the 

 30 Bonneville at 3. 

31 EEI at 6; NERC at 4. 
Docket No. RM10-8-000 - 19 - 

 

ERO develop modifications to the Reliability Standards. These actions are discussed 

more fully below. 

34. The Commission agrees with the ERO that, with regard to IRO-005-2 

Requirement R12, if a redundant Special Protection System with one communication 

channel out of service can still perform reliably with the remaining channel and its 

function would therefore not be considered degraded under IRO-005-2.32 We also agree 

with the ERO and Entergy that if a reliability coordinator has identified a Special 

Protection System that is necessary for Reliable Operation, the reliability coordinator can 

request detailed data as needed, including the status of the components of a Special 

Protection System.33 The Reliability Coordinator is obligated to receive and consider 

data to support its assessment of the performance of the system in order to protect against 

SOL and IROL events – this could include data about the status of communication 

facilities.34 We agree with commenters that, while the specific wording in the 

Requirement does not compel the affected entities to report the outage of a single 

32 See NERC Petition, Exhibit B at 6 (providing text to interpretation as appendix 

to IRO-005-1 and TOP-005-1). 

33 See NERC Petition, Exhibit B at 5 (“Background Information for 

Interpretation”); Entergy at 7; see also IRO-002-1, Requirement R2 (“Each reliability 

coordinator shall determine the data requirements to support its reliability coordination 

tasks and shall request such data.”). 

34 IRO-002-1, Requirement R2; see also NERC Petition, Exhibit B at 5, 

“Background Information for Interpretation” (discussing TOP-005-1). 
Docket No. RM10-8-000 - 20 - 

communication channel as degraded if the system remains functional, the information can 

be compelled by the Reliability Coordinator. 

35. In the NOPR, the Commission expressed concern that the interpretation may 

create a reliability gap with regard to the reporting requirements for a Special Protection 

System that is able to operate as designed, but still poses a reliability risk to the BulkPower System with loss of a single communication channel with redundant design. The 

ERO asserts that the fact “that one communication channel of a Special Protection 

System may be out of service in no way prevents that Special Protection System from 

performing its designed function.” As such, a system operator would not be required to 

make changes to its operational protocols. The ERO nevertheless states that “...the 

knowledge of the loss of a communication channel could be of general interest to a 

reliability coordinator or transmission operator.” Finally, the ERO and ISO/RTO Council 

indicate that this information is available to reliability coordinators pursuant to 

requirements in other reliability standards, and is therefore not necessary as a reporting 

requirement in TOP-005-1. 

36. We are persuaded that a requirement to report the outage of a single 

communication channel where redundant channels exist is unnecessary because both the 

ERO and ISO/RTO point to existing requirements in other Reliability Standards that 
Docket No. RM10-8-000 - 21 - 

would make this information available to the reliability coordinator upon its request.35 

Such requirements provide the reliability coordinator authority to compel such 

information as it may deem necessary to ensure reliable operation of the Bulk-Power 

System including information on the outage of communication channels. Our review of 

the record in this proceeding satisfies the concerns we expressed in the NOPR and 

therefore we do not find it necessary to establish the NOPR reporting requirement 

proposal. 

37. In light of the Commission’s decision not to implement the NOPR proposal 

concerning the reporting of the loss of a redundant communication channel, we need not 

address commenters’ objections to our proposal. Ultimately, the decision whether the 

redundancy of a particular system is needed to perform as designed is a judgment call 

that must be made by the appropriate reliability entities (i.e., the transmission operator 

and the reliability coordinator). 

III. Information Collection Statement

38. The Office of Management and Budget (OMB) regulations require that OMB 

approve certain reporting and recordkeeping (collections of information) imposed by an 

 35 IRO-005-1, Requirement R2; see also the interpretation, Background 

Information for Interpretation, discussing TOP-005-1. 
Docket No. RM10-8-000 - 22 - 

 

agency.36 The information contained here is also subject to review under section 3507(d) 

of the Paperwork Reduction Act of 1995.37 

39. As stated above, the IRO-005-1 and TOP-005-1 Reliability Standards that are the 

subject of the approved interpretation was approved in Order No. 693, and the related 

information collection requirements were reviewed and approved, accordingly.38 The 

approved interpretations of IRO-005-1 and TOP-005-1 do not modify or otherwise affect 

the collection of information already in place. 

40. With respect to TOP-005-1, the interpretation clarifies that NERC affirms that 

transmission operators are required to provide information upon request, without regard 

to whether the equipment is operating in a degraded state, as posited in the request for an 

interpretation.39 Consequently, the interpretation does not change the information that a 

transmission owner must report, because the requesting entity is free to request the same 

types of information as before, and the same logs, data, or measurements would be 

maintained. 

41. With respect to IRO-005-1, the interpretation states that a transmission operator is 

mandated to report the loss of a communication channel, if the loss will result in the 

36 5 CFR 1320.11. 

37 44 U.S.C. 3507(d). 

38 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 945, 1648. 

39 NERC Petition, Exhibit B at 5 (proposing text of interpretation as Appendix 1 to 

IRO-005-1 and TOP-005-1). 
Docket No. RM10-8-000 - 23 - 

failure of a Special Protection System to operate as designed. Thus, the interpretation 

and the comments received in this rulemaking clarify that the reporting requirements 

focus on whether a Special Protection System can continue to perform its reliability 

function. 

42. Thus, the interpretations of the current Reliability Standards at issue in this 

rulemaking will not modify the reporting burden. However, we will submit this Final 

Rule to OMB for informational purposes. 

43. Interested persons may obtain information on the reporting requirements by 

contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE 

Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, 

e-mail: DataClearance@ferc.gov, Phone: (202) 502-8663, fax: (202) 273-0873]. 

44. For submitting comments concerning the collection(s) of information and the 

associated burden estimate(s), please send your comments to the contact listed above and 

to the Office of Information and Regulatory Affairs, Office of Information and 

Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal 

Energy Regulatory Commission, phone (202) 395-4638, fax: (202) 395-7285, e-mail: 

oira submission@omb.eop.gov]. Please reference OMB Control Number 1902-0244 and 

the docket number of this rulemaking in your submission.]. 

IV. Environmental Analysis

45. The Commission is required to prepare an Environmental Assessment or an 

Environmental Impact Statement for any action that may have a significant adverse effect 
Docket No. RM10-8-000 - 24 - 

on the human environment.40 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.41 The actions proposed herein fall within this categorical exclusion in the 

Commission’s regulations. 

V. Regulatory Flexibility Act

46. The Regulatory Flexibility Act of 1980 (RFA)42 generally requires a descriptio

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

number of small entities. The RFA mandates consideration of regulatory alternatives 

accomplish the stated objectives of a proposed rule and that minimize any signifi

economic impact on a substantial number of small entities. The Small Business 

Administration’s (SBA) Office of Size Standards develops the numerical definition of a

small business.

n 

that 

cant 

that a firm is small if, including its affiliates, it is primarily engaged in the transmission, 

 

43 The SBA has established a size standard for electric utilities, stating 

40 Regulations Implementing the National Environmental Policy Act, Order 

No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Regulations Preambles 

1986-1990 ¶ 30,783 (1987). 

41 18 CFR 380.4(a)(2)(ii). 

42 5 U.S.C. 601-612. 

43 13 CFR 121.101. 
Docket No. RM10-8-000 - 25 - 

generation and/or distribution of electric energy for sale and its total electric output for 

the preceding twelve months did not exceed four million megawatt hours.44 

47. Initially, as noted above, this Final Rule addresses an interpretation of the 

IRO-005-1 and TOP-005-1 Reliability Standards, which were already approved in Order 

No. 693, and, therefore, does not create an additional regulatory impact on small entities. 

Therefore, the Commission certifies that this Final Rule will not have a significant impact 

on a substantial number of small entities. 

VI. Document Availability

48. 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. 

49. From the Commission’s Home Page on the Internet, this information is available 

on eLibrary. The full text of this document is available on eLibrary in PDF and 

Microsoft Word format for viewing, printing, and/or downloading. To access this 

document in eLibrary, type the docket number excluding the last three digits of this 

document in the docket number field. 

 44 13 CFR 121.201, Sector 22, Utilities & n. 1. 
Docket No. RM10-8-000 - 26 - 

50. User assistance is available for eLibrary and the Commission’s website during 

normal business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-

208-3676) or e-mail at ferconlinesupport@ferc.gov, or the Public Reference Room at 

(202) 502-8371, TTY (202) 502-8659. E-mail the Public Reference Room at 

public.referenceroom@ferc.gov. 

VII. Effective Date and Congressional Notification

51. These regulations are effective [insert date 30 days from publication in the 

Federal Register]. The Commission has determined, with the concurrence of the 

Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule 

is not a “major rule” as defined in section 351 of the Small Business Regulatory 

Enforcement Fairness Act of 1996. 

List of subjects in 18 CFR Part 40 

Electric power, Electric utilities, Reporting and recordkeeping requirements. 

By the Commission. 

( S E A L ) 

Kimberly D. Bose, 

Secretary.