130 FERC ¶ 61,032 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

 Marc Spitzer, Philip D. Moeller, 

 and John R. Norris. 

Modification of Interchange and Transmission 

Loading Relief Reliability Standards; and Electric 

Reliability Organization Interpretation of Specific 

Requirements of Four Reliability Standards 

Docket No. RM08-7-002 

ORDER NO. 713-B 

ORDER DENYING REQUEST FOR REHEARING AND CLARIFICATION 

(Issued January 21, 2010) 

1. The NRG Companies, Electric Power Supply Association, and Constellation 

Energy Commodities Group (collectively, Rehearing Parties) filed a joint request for 

rehearing and clarification of Order No. 713-A, in which the Commission accepted 

revisions to the North American Electric Reliability Corporation’s (NERC) transmission 

load relief (TLR) requirements as set forth in Reliability Standard IRO-006-4.1

 In this 

order, we deny rehearing and clarification, as discussed below. While we conclude that 

the concerns raised by the Rehearing Parties regarding a potential conflict between the 

TLR Procedure and the curtailment priority provisions of the open access transmission 

tariff are beyond the scope of the current proceeding, we believe that this issue merits 

further inquiry and, therefore, are issuing a notice of inquiry proceeding in Docket 

No. RM10-9-000 concurrently with this order. 

I. Background

2. On December 21, 2007, NERC, the Commission-certified electric reliability 

organization (ERO), submitted for Commission approval modifications to Reliability 

 1 Modification of Interchange and Transmission Loading Relief Reliability 

Standards; and Electric Reliability Organization Interpretation of Specific Requirements 

of Four Reliability Standards, Order No. 713-A, 126 FERC ¶ 61,252 (2009). 
Docket No. RM08-7-002 - 2 - 

Standard IRO-006-4 (Reliability Coordination – Transmission Loading Relief), known as 

the TLR procedure. 

3. Reliability Standard IRO-006-4 provides Interconnection-wide transmission 

loading relief procedures that can be used to prevent or manage potential or actual system 

operating limit (SOL) or Interconnection reliability operating limit (IROL) violations.2

 

Reliability Standard IRO-006-4 modifies Reliability Standard IRO-006-3, which the 

Commission approved in Order No. 693.3

 In its December 2007 filing, NERC explained 

that it modified the TLR procedure to “extract” business practices since these elements 

are not related to reliability.4

 Further, the modified Reliability Standard includes changes 

directed by the Commission in Order No. 693 related to the appropriateness of using the 

TLR procedure to mitigate a violation of an IROL. 

4. On July 21, 2008, the Commission issued Order No. 713, which, inter alia, 

directed NERC to submit a filing explaining one aspect of the TLR procedure. On 

September 11, 2008, NERC submitted a responsive filing. On March 19, 2009, the 

Commission issued Order No. 713-A, which approved Reliability Standard IRO-006-4. 

In addition, Order No. 713-A directed the ERO to develop a modification to IRO-006-4, 

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

 In response to comments 

regarding competitive concerns and the application of the Interchange Distribution 

Calculator (IDC),6

 the Commission concluded: 

 2

 A SOL is the value (such as MW, MVar, amperes, frequency, or volts) that 

satisfies the most limiting of the prescribed operating criteria for a specified system 

configuration to ensure operation within acceptable reliability criteria. An IROL is a 

system operating limit that, if violated, could lead to instability, uncontrolled separation, 

or cascading outages that adversely impact the reliability of the Bulk-Power System. 

3 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). 

4 See infra P 12 and accompanying note. 

5

 16 U.S.C. § 824o(d)(5) (2006). 

6

 The IDC is a mechanism used by the reliability coordinators in the Eastern 

Interconnection to calculate the distribution of interchange transactions over specific 

flowgates. It includes a database of all interchange transactions and a matrix of the 

distribution factors for the Eastern Interconnection. 
Docket No. RM08-7-002 - 3 - 

The above comments on suggested improvements to the TLR 

procedure are beyond the scope of this proceeding, which 

pertains to the separation of business practices from the 

ERO’s TLR procedure and implementation of the 

Commission’s directives set forth in Order No. 693. We note, 

however, that the ERO indicated in its December 21, 2007 

filing that it has a three-phase plan to improve the TLR 

procedures, and the third phase will consist of “a complete 

redrafting to incorporate enhancement and changes beyond 

the separation of reliability and business practice issues.” 

Therefore, the phase three proceeding would provide a proper 

forum for commenters to raise their concerns. The 

Commission believes that NRG and other commenters raise 

valid issues and urges the commenters to raise—and expects 

the ERO to consider—these matters in an appropriate 

proceeding. We also note that NERC states it is currently 

updating the IDC to more accurately determine the impacts of 

native load and network service.[7

] 

II. Request for Rehearing and Clarification

5. The Rehearing Parties argue that the Commission erred in approving IRO-006-4. 

The Rehearing Parties state that the FPA requires the Commission to find a proposed 

Reliability Standard just and reasonable and not unduly discriminatory or preferential, to 

“ensure that proposed Reliability Standards are fair and that they do not adversely affect 

competition.”8

 They contend that the Commission failed to apply this statutory standard, 

finding the proposed Reliability Standard just and reasonable notwithstanding 

inconsistent record evidence. Further, they contend that the Commission accepted the 

Reliability Standard without considering its impact on competition. The Rehearing 

Parties also dispute the Commission’s finding that comments relating to competitive 

concerns are beyond the scope, noting that “NERC presented the mandatory TLR 

reliability rules in this docket.”9

 The Rehearing Parties maintain that there is no evidence 

that the Commission considered the effect of the proposed Reliability Standard on 

competition, instead relying on NERC’s analysis. 

 7

 Order No. 713-A, 126 FERC ¶ 61,252 at P 21 (footnotes omitted). 

8

 Request for Rehearing at 4 (citing FPA § 215(d), 16 U.S.C. § 824o(d) (2006)). 

9 Id. at 6. 
Docket No. RM08-7-002 - 4 - 

6. The Rehearing Parties next contend that the TLR Reliability Standard violates the 

curtailment priorities established in Order Nos. 88810 and 89011 and the pro forma open 

access transmission tariff (OATT), because the standard favors native network load 

transactions over interchange transactions with respect to curtailment priority. They cite 

to NRG’s comments in the underlying proceeding that point to problems with the IDC, 

upon which the Reliability Standard relies to determine curtailments.12 The Rehearing 

Parties cite sections 13.6 and 14.7 of the Commission’s pro forma OATT for the 

propositions that non-firm transmission services must be curtailed before firm 

transmission services, and firm point-to-point and network integration transmission 

service customers have an equal priority with the transmission provider’s use of the 

system to deliver Network Resources to its native load.13 They maintain that, because of 

its reliance on the flawed IDC, the TLR standard would direct a Reliability Coordinator 

to curtail a firm interchange transaction crossing over a constrained flowgate prior to 

curtailing a non-firm native network load transaction across the same flowgate. Lastly, 

the Rehearing Parties point out that the Commission has recognized such flaws in the 

IDC and has directed NERC to address them.14 According to the Rehearing Parties, 

earlier reforms to the TLR process and IDC have not remedied flaws that have been 

identified. 

7. The Rehearing Parties further contend that in the TLR Order the Commission 

acknowledges that the TLR Reliability Standard is discriminatory. They contend that the 

 10 Promoting Wholesale Competition Through Open Access Non-Discriminatory 

Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities 

and Transmitting Utilities, Order No. 888, FERC Stats. & Regs. ¶ 31,036 (1996), order 

on reh’g, Order No. 888-A, FERC Stats. & Regs. ¶ 31,048, order on reh’g, Order 

No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC 

¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Policy Study Group 

v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 

(2002). 

11 Preventing Undue Discrimination and Preference in Transmission Service, 

Order No. 890, FERC Stats. & Regs. ¶ 31,241, order on reh’g, Order No. 890-A, FERC 

Stats. & Regs. ¶ 31,261 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 

(2008) order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228 (2009). 

12 Request for Rehearing at 7 (citing NRG Comments at 12-16). 

13 Id.

14 Id. at 8 (citing N. Am. Elec. Reliability Corp., 85 FERC ¶ 61,353 (1998)). 
Docket No. RM08-7-002 - 5 - 

Commission erred in accepting the standard while conceding that the proposed TLR 

process discriminates against certain market participants and that the issues raised by the 

Rehearing Parties are valid.15 They specifically aver that the TLR Reliability Standard 

discriminates against merchant generators and provides an unlawful preference for 

transactions by load-serving entities. For example, they explain that the IDC does not 

include power purchases by a host balancing authority in the native network load 

curtailment calculations, because native network load is calculated by taking into account 

only those generation facilities owned by the host balancing authority. Thus, in this 

example, transactions involving independent power producers are curtailed in favor of 

transactions involving the host balancing authority. 

8. Finally, the Rehearing Parties contend that the Commission erred in not remanding 

the TLR Reliability Standard back to NERC. In response to NERC’s estimation that its 

efforts to improve the IDC will take two to five additional years, the Rehearing Parties 

state that this “is simply too long for the Commission to wait to address the OATT 

violations caused by the existing standard.”16 

9. The Rehearing Parties request that the Commission clarify that Order No. 713-A 

directs NERC to revise the TLR Reliability Standard to address the issues raised by the 

Rehearing Parties pursuant to section 215(d) of the FPA. Alternatively, the Rehearing 

Parties seek rehearing and request the Commission to reject the Reliability Standard as 

discriminatory and direct NERC to immediately develop a TLR process that addresses 

the competitive concerns raised. 

III. Discussion

10. We deny the Rehearing Parties’ request for rehearing and clarification. While the 

Rehearing Parties reiterate the concerns raised in their earlier rulemaking comments, they 

provide a limited response to the Commission’s conclusion that the issues raised are 

beyond the scope of the immediate rulemaking proceeding. Namely, the Rehearing 

Parties claim that “[b]ecause NERC presented the mandatory TLR reliability rules in this 

docket, there is no justification for finding that the Rehearing Parties’ concerns are better 

addressed in some other proceeding or that the Commission is not required to address 

discrimination claims when approving a mandatory Reliability Standard.”17

 15 Id. at 9, 10 (citing Order No. 713-A, 126 FERC ¶ 61,252 at P 21). 

16 Id. at 11. 

17 Id. at 6. 
Docket No. RM08-7-002 - 6 - 

11. We are not persuaded by the Rehearing Parties’ argument. In Order No. 693, the 

Commission approved Reliability Standard IRO-006-3 (Reliability Coordination – 

Transmission Loading Relief).18 This approval made the TLR procedures mandatory 

under section 215 of the FPA. Reliability Standard IRO-006-3 sets forth the entire TLR 

process, including the application of the IDC. 

12. NERC’s submission of the revised TLR procedure, as IRO-006-4, was limited in 

scope. NERC explained that the filing addressed two specific matters, namely, the 

separation of business practices that were “transferred” to a North American Energy 

Standards Board (NAESB) business practice document19 and a prohibition regarding the 

use of the TLR procedure to mitigate an actual IROL violation. All other provisions of 

the modified TLR procedure, previously approved by the Commission in Order No. 693, 

remain the same. The Commission disagrees with the Rehearing Parties that all issues 

regarding any aspect of a previously-approved Reliability Standard must be addressed 

when the Commission is presented with narrowly tailored modifications to the standard. 

Thus, the Commission upholds its earlier conclusion that comments regarding 

improvements to the Reliability Standard to address certain competitive issues are 

beyond the scope of the immediate proceeding. Indeed, if the Commission were to grant 

the Rehearing Parties’ requested relief of remanding Reliability Standard IRO-006-4, the 

previously approved version of the TLR procedure, IRO-006-3, would remain in effect 

and enforceable, which would not resolve the competitive issues raised by the Rehearing 

Parties. 

13. Further, we disagree with the Rehearing Parties’ claim that the Commission erred 

in failing to reject Reliability Standard IRO-006-4 “even after conceding that the 

proposed TLR process discriminates against certain market participants ....”20 Contrary 

to the Rehearing Parties’ characterization, the Commission did not “concede” or, for that 

matter, make any substantive finding or conclusion on the competitive issues raised by 

commenters. Rather, consistent with the conclusion that the matters raised were beyond 

the scope of the immediate proceeding, the Commission stated: 

 18 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 960-964. 

19 The Commission approved the NAESB TLR standard, WEQ-008, to coincide 

with the effective date of Reliability Standard IRO-006-4. See Standards for Business 

Practices and Communication Protocols for Public Utilities, Order No. 676-C, FERC 

Stats. & Regs. ¶ 31,274, at P 7 n.11, P 9, 80 (2008); see also Order No. 713, 124 FERC 

¶ 61,071 at P 8. 

20 Request for Rehearing at 9. 
Docket No. RM08-7-002 - 7 - 

[NERC’s] phase three proceeding would provide a proper 

forum for commenters to raise their concerns. The 

Commission believes that NRG and other commenters raise 

valid issues and urges the commenters to raise—and expects 

the ERO to consider—these matters in an appropriate 

proceeding.[21] 

This statement is consistent with the Commission’s approach set forth in Order No. 693, 

in which the Commission explained that when a commenter suggests improvements to a 

Reliability Standard, a Commission directive that the ERO address the comments “does 

not direct any outcome other than that the comments receive consideration.”22 Merely 

stating that the concerns are “valid” while directing that the ERO consider the comments 

is not properly characterized as a concession or determination by the Commission. 

14. For the same reasons, the above statement does not support the Rehearing Parties’ 

request that the Commission clarify that the ERO must address the Rehearing Parties’ 

concerns within a set time period and fix the IDC or eliminate reliance on the IDC to 

make curtailment decisions.23 The Rehearing Parties suggest that the statement in the 

introduction to Order No. 713-A, “pursuant to section 215(d)(5) of the FPA, the 

Commission directs NERC to develop modifications to Reliability Standards IRO-006-

4,” mandates that NERC address the competitive issues with a certain result and in a set 

time period.24 Again, consistent with our approach in Order No. 693, the Commission 

(urged commenters to raise and) directed NERC to “consider” these issues in an 

appropriate proceeding, but did not mandate a particular result.25

15. Thus, the Commission in Order No. 713-A properly determined that the modified 

Reliability Standard IRO-006-4, at issue in this proceeding, is just and reasonable, not 

 21 Order No. 713-A, 126 FERC ¶ 61,252 at P 21. 

22 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 188. 

23 Request for Rehearing at 12. 

24 Order No. 713-A, 126 FERC ¶ 61,252 at P 1. 

25 In contrast, where the Commission directed the ERO to develop a modification 

to IRO-006-4, the Commission clearly stated, “Accordingly, pursuant to section 

215(d)(5) of the FPA, the Commission directs the ERO to develop a modification of 

Requirement R1.1 with respect to the term “alone,” consistent with this discussion.” Id. 

P 36. 
Docket No. RM08-7-002 - 8 - 

unduly discriminatory or preferential, and in the public interest. Accordingly, we deny 

the Rehearing Parties’ request for rehearing and clarification. 

16. While the issues raised by Rehearing Parties related to the TLR procedure and the 

curtailment priorities are beyond the scope of this immediate rulemaking proceeding, we 

believe that certain issues raised by Rehearing Parties merit further inquiry. Accordingly, 

we are issuing a notice of inquiry (i.e., NOI) proceeding in Docket No. RM10-9-000 

concurrently with this order with respect to the TLR procedure and its interplay with the 

curtailment priority provisions of the OATT.26

The Commission orders: 

The Rehearing Parties’ request for rehearing and clarification is hereby denied, as 

discussed in the body of this order. 

By the Commission. Commissioner Norris voting present. 

( S E A L ) 

Kimberly D. Bose, 

Secretary. 

 

 26 Transmission Loading Relief Reliability Standard and Curtailment Priorities, 

130 FERC ¶ 61,033 (2010).