136 FERC ¶ 61,176 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 40 

[Docket No. RM10-29-000; Order No. 753] 

Electric Reliability Organization Interpretation of Transmission Operations Reliability 

Standard 

(Issued September 15, 2011) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule. 

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

Regulatory Commission approves the North American Electric Reliability Corporation’s 

proposed interpretation of Reliability Standard, TOP-001-1, Requirement R8, which 

pertains to the restoration of real and reactive power during a system emergency. 

EFFECTIVE DATE: This rule will become effective [sixty (60) days after publication in 

the FEDERAL REGISTER]. 

FOR FURTHER INFORMATION CONTACT: 

Robert T. Stroh (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8473 
Docket No. RM10-29-000 - 2 - 

Eugene Blick (Technical Information) 

Office of Electric Reliability 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8066 

David O’Connor (Technical Information) 

Office of Electric Reliability 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-6695 

SUPPLEMENTARY INFORMATION

:
136 FERC ¶ 61,176 

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 Interpretation of Docket No. RM10-29-000 

 Transmission Operations Reliability Standard 

ORDER NO. 753 

FINAL RULE 

(Issued September 15, 2011) 

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

 the Federal Energy 

Regulatory Commission approves the North American Electric Reliability Corporation’s 

(NERC) proposed interpretation of Requirement R8 in Commission-approved NERC 

Reliability Standard TOP-001-1 — Reliability Responsibilities and Authorities. 

I. Background

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

Organization (ERO) to develop mandatory and enforceable Reliability Standards, which 

are subject to Commission review and approval. Approved Reliability Standards are 

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

independently. 

 1

 16 U.S.C. § 824o (2006). 
Docket No. RM10-29-000 - 2 - 

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

and certify an ERO2

 and, subsequently, certified NERC as the ERO.3 On March 16, 

2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability 

Standards filed by NERC, including Reliability Standard TOP-001-1.4

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.5

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

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

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

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

to the Reliability Standard and filed with the applicable regulatory authority for 

regulatory approval. 

 2 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). 

3 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). 

4 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). 

5

 NERC Rules of Procedure, Appendix 3A, Reliability Standards Development 

Procedure, Version 6.1, at 27-29 (2010). 
Docket No. RM10-29-000 - 3 - 

A. Reliability Standard TOP-001-1

5. Reliability Standard TOP-001-1 (Reliability Responsibilities and Authorities) 

centers on the responsibilities of balancing authorities and transmission operators during 

a system emergency. Specifically, the stated purpose of Reliability Standard TOP-001-1 

is to ensure reliability entities have clear decision-making authority and capabilities to 

take appropriate actions or direct the actions of others to return the transmission system to 

normal conditions during an emergency. Requirement R8 of the standard provides: 

During a system emergency, the Balancing Authority and 

Transmission Operator shall immediately take action to restore the 

Real and Reactive Power Balance. If the Balancing Authority or 

Transmission Operator is unable to restore Real and Reactive Power 

Balance it shall request emergency assistance from the Reliability 

Coordinator. If corrective action or emergency assistance is not 

adequate to mitigate the Real and Reactive Power Balance, then the 

Reliability Coordinator, Balancing Authority, and Transmission 

Operator shall implement firm load shedding.6

B. NERC Proposed Interpretation

6. On July 16, 2010, NERC submitted its petition for approval for an interpretation 

of Requirement R8 in Commission-approved Reliability Standard TOP-001-1. The 

Petition explains that NERC received a request from Florida Municipal Power Pool 

(FMPP) seeking an interpretation of Reliability Standard TOP-001-1, Requirement R8. 

Specifically, FMPP requested clarification on several aspects of Requirement R8. FMPP 

asked the following: 

 6

 Reliability Standard TOP-001-1, Requirement R8. 
Docket No. RM10-29-000 - 4 - 

Balancing real power is not a function of a [Transmission Operator] 

and balancing reactive power is not a function of a [Balancing 

Authority]. For Requirement R8 is the Balancing Authority 

responsibility to immediately take corrective action to restore Real 

Power Balance and is the [Transmission Operator] responsibility to 

immediately take corrective action to restore Reactive Power 

Balance?7

7. Consistent with the NERC Rules of Procedure, NERC stated that it assembled a 

team to respond to the request for interpretation and presented the proposed interpretation 

to industry ballot, using a process similar to the process it uses for the development of 

Reliability Standards.8

 

8. In response to FMPP’s interpretation request, NERC provided the following: 

The answer to both questions is yes. According to the NERC 

Glossary of Terms Used in Reliability Standards, the Transmission 

Operator is responsible for the reliability of its “local” transmission 

system, and operates or directs the operations of the transmission 

facilities. Similarly, the Balancing Authority is responsible for 

maintaining load-interchange-generation balance, i.e., real power 

balance. In the context of this requirement, the Transmission 

Operator is the functional entity that balances reactive power. 

Reactive power balancing can be accomplished by issuing 

instructions to the Balancing Authority or Generator Operators to 

alter reactive power injection. Based on NERC Reliability Standard 

BAL-005-1b Requirement R6, the Transmission Operator has no 

requirement to compute an Area Control Error (ACE) signal or to 

balance real power. Based on NERC Reliability Standard VAR001-1 Requirement R8, the Balancing Authority is not required to 

resolve reactive power balance issues. According to TOP-001-1 \ 

Requirement R3, the Balancing Authority is only required to comply 

 7

 NERC Petition at 5. 

8

 NERC Reliability Standards Development Procedure at 27-29. 
Docket No. RM10-29-000 - 5 - 

with Transmission Operator or Reliability Coordinator instructions 

to change injections of reactive power.9

NERC stated that the interpretation was developed and approved by industry stakeholders 

and approved by the NERC Board of Trustees (Board). 

9. The NERC petition explained that the interpretation is consistent with the stated 

purpose of the Reliability Standard, which is to ensure reliability entities have clear 

decision-making authority and capabilities to take appropriate actions or direct the 

actions of others to return the transmission system to normal conditions during an 

emergency. NERC added that the interpretation clarifies the responsibilities of balancing 

authorities and transmission operators during a system emergency by referencing the 

NERC Glossary of Terms Used in Reliability Standards as well as other relevant 

Reliability Standards.10 

10. On February 14, 2011, NERC made a supplemental filing in response to a 

Commission staff data request.11 With regard to whether Requirement R8 obligates a 

joint response in a system emergency, NERC explained that Requirement R8 does not 

use the word “joint” or otherwise infer joint responsibility during system emergencies. 

Rather, NERC responded that the balancing authority and transmission operator have 

 9 Id. at 5-6. 

10 Id. at 6. 

11 Response of the North American Electric Reliability Corporation to Request for 

Additional Information Regarding Interpretation to Reliability Standard TOP-001-1, 

Requirement R8 (NERC Response). 
Docket No. RM10-29-000 - 6 - 

separate responsibilities to restore real and reactive power balance during system 

emergencies. NERC also stated that the use of “and” between the two entities should not 

construe communication or coordination. NERC added that the Blackout Report12

correctly identifies communication and coordination issues as reliability issues and that 

communication and coordination are addressed in the Communications (COM) 

Reliability Standards.13

II. Notice of Proposed Rulemaking 

11. On April 21, 2011, the Commission issued a Notice of Proposed Rulemaking 

(NOPR) proposing to approve NERC’s interpretation of Reliability Standard TOP-001-1, 

Requirement R8.14 In the NOPR, the Commission stated that it believed that the ERO 

has presented a reasonable interpretation consistent with the language of the Reliability 

Standard. In addition, the NOPR noted that a balancing authority and transmission 

operator each have coordination and communication functions that are necessary for 

maintaining real and reactive power balance. 

12. In response to the NOPR, NERC filed comments supporting the Commission’s 

proposed approval of the interpretation. No comments were filed opposing the 

Commission’s proposal to approve NERC’s interpretation. 

 12 Final Report on the August 14, 2003 Blackout in the United States and Canada

(Blackout Report). 

13 NERC Response at 4-7. 

14 Electric Reliability Organization Interpretation of Transmission Operations 

Reliability Standard, Notice of Proposed Rulemaking, 76 FR 23222 (Apr. 26, 2011), 

FERC Stats. & Regs. ¶ 32,674 (2011) (NOPR). 
Docket No. RM10-29-000 - 7 - 

III. Commission Determination

13. The Commission adopts the NOPR proposal and approves the interpretation of 

TOP-001-1, Requirement R8. The Commission finds that NERC’s interpretation is just, 

reasonable, not unduly discriminatory or preferential, and in the public interest. 

14. The interpretation supports the stated purpose of the Reliability Standard, i.e., 

ensuring that reliability entities have clear decision-making authority and capabilities to 

take appropriate actions or direct the actions of others to return the transmission system to 

normal conditions during an emergency.15 The interpretation also clarifies the 

responsibilities of a balancing authority and transmission operator during a system 

emergency. Further, the language is consistent with the language of the requirement. 

Accordingly, the Commission approves the ERO’s interpretation of TOP-001-1, 

Requirement R8. 

15. We agree, as discussed in the interpretation, that the balancing authority is 

responsible for restoring real power balance during a system emergency and the 

transmission operator is responsible for restoring reactive power balance during a system 

emergency. However, during a system emergency, communication and coordination 

between the transmission operator and balancing authority can be essential to restore real 

and reactive power balance. For example, during an emergency, the balancing authority 

may rely on the real power output of a generator to fulfill its responsibility, while the 

 15 Id. at 6. 
Docket No. RM10-29-000 - 8 - 

transmission operator may expect the same generator unit to reduce real power to 

generate greater reactive power output.16 

16. NERC acknowledges the need for such communication and coordination.17 

NERC maintains that this coordination and communication is required through two 

currently-effective Communication Reliability Standards: (1) COM-001-1.1 – 

 

Telecommunications and (2) COM-002-2 – Communication and Coordination.18 

17. We agree with NERC that the currently effective COM Reliability Standards 

provide for such communication and coordination. For example, Reliability Standard 

COM-002-2, Requirement R1 provides that transmission operators, balancing authorities 

and generator operators must have communication links with one another and must be 

staffed to address a real-time emergency. Reliability Standard EOP-001-0, Requirements 

R3, R4.3, and R7 also contain provisions relevant to the need for communication and 

coordination in emergencies.19 These provisions require balancing authorities and 

(continued...) 

16 The Blackout Report described such a scenario, explaining that a generator unit 

tripped because the unit’s protection system detected the VAR output, i.e., reactive 

power, exceeded the unit’s capability. Blackout Report at 27. The Blackout Report also 

explained that no generator units were asked to reduce their real power output to produce 

more reactive power. Id. at 47. 

17 NERC Response at 6-7. 

18 NERC Response at 6-7. NERC also identifies several ongoing Reliability 

Standards projects that are intended to strengthen the requirements pertaining to 

communication and coordination between entities. 

19 See NOPR, FERC Stats. & Regs. ¶ 32,674 at P 14. On July 13, 2011, the 

Commission approved EOP-001-2 Reliability Standard, replacing EOP-001-0 effective 

July 1, 2013. Mandatory Reliability Standards for Interconnection Reliability Operating 
Docket No. RM10-29-000 - 9 - 

transmission operators to develop plans to mitigate operating emergencies including 

coordination among adjacent transmission operators and balancing authorities. 

18. Accordingly, for the reasons discussed above, we approve NERC’s proposed 

interpretation of TOP-001-1, Requirement R8. 

IV. Information Collection Statement

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

approve certain reporting and recordkeeping requirements (collections of information) 

imposed by an agency.20 The information contained here is also subject to review under 

section 3507(d) of the Paperwork Reduction Act of 1995.21 

20. As stated above, the Commission approved, in Order No. 693, Reliability Standard 

TOP-001-1 that is the subject of the current rulemaking. This Final Rule approves the 

interpretation of the previously approved Reliability Standard, which was developed by 

NERC as the ERO. The interpretation, as clarified, relates to an existing Reliability 

Standard, and the Commission does not expect it to affect entities’ current reporting 

burden.22 Accordingly, we will submit this Final Rule to OMB for informational 

purposes only. 

 

Limits; System Restoration Reliability Standards, 136 FERC ¶ 61,030 (2011). The 

applicable Requirements in EOP-001-2 relevant to the need for communication and 

coordination in emergencies are Requirements R2, R3.3, and R6. 

20 5 C.F.R § 1320.11. 

21 44 U.S.C. § 3507(d). 

22 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1901-1907. 
Docket No. RM10-29-000 - 10 - 

21. 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]. 

V. Environmental Analysis

22. 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.23 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.24 The actions proposed herein fall within this categorical exclusion in the 

Commission’s regulations. 

VI. Regulatory Flexibility Act

23. The Regulatory Flexibility Act of 1980 (RFA) 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 alternati

25 n 

ves that 

 23 Regulations Implementing the National Environmental Policy Act of 1969, 

Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Preambles 1986-

1990 ¶ 30,783 (1987). 

24 18 C.F.R. § 380.4(a)(2)(ii). 

25 5 U.S.C. § 601-612. 
Docket No. RM10-29-000 - 11 - 

accomplish the stated objectives of a final rule and that minimize any significant 

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

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

small business. The SBA has established a size standard for electric utilities, stating 

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

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

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

not implicated by this Final Rule because the interpretations discussed herein w

is 

ill not 

der 

erators and therefore, 

ulatory impact on small entities. 

26

27

have a significant economic impact on a substantial number of small entities. 

24. The Commission approved Reliability Standard TOP-001-1 in 2007 in Or

No. 693. The Final Rule in the immediate docket addresses an interpretation of 

Requirement R8 of previously-approved TOP-001-1. The interpretation clarifies current 

compliance obligations of balancing authorities and transmission op

does not create an additional reg

VII. Document Availability

25. In addition to publishing the full text of this document in the Federal Registe

Commission provides all interested persons an opportunity to view and/

contents of this document via the Internet through FERC's Home Page 

r, the 

or print the 

(http://www.ferc.gov) and in FERC's Public Reference Room during normal business 

 26 13 C.F.R. § 121.101. 

27 13 C.F.R. § 121.201, Section 22, Utilities, & n.1. 
Docket No. RM10-29-000 - 12 - 

hours (8:30 a.m. to 5:00 p.m. eastern time) at 888 First Street, NE, Room 2A, 

Washington, DC 20426. 

26. From FERC's Home Page on the Internet, this information is available on 

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

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

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

docket number field. 

27. User assistance is available for eLibrary and the FERC’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. 

VIII. Effective Date and Congressional Notification

28. These regulations are effective [insert date 60 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. 
Docket No. RM10-29-000 - 13 - 

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.