142 FERC ¶ 61,131

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 38

[Docket No. RM05-5-020; Order No. 676-G]

Standards for Business Practices and Communication Protocols for Public Utilities

(Issued February 21, 2013)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule.

SUMMARY: The Federal Energy Regulatory Commission (Commission) is 

amending its regulations at 18 C.F.R. § 38.2 (which establish standards for 

business practices and electronic communications for public utilities) to 

incorporate by reference updated business practice standards adopted by the 

Wholesale Electric Quadrant of the North American Energy Standards Board to 

categorize various products and services for demand response and energy 

efficiency and to support the measurement and verification of these products and 

services in organized wholesale electric markets. These standards provide 

common definitions and processes regarding demand response and energy 

efficiency products in organized wholesale electric markets where such products 

are offered. The standards also require each regional transmission organization 

(RTO) and independent system operator (ISO) to address in the RTO or ISO’s 

governing documents the performance evaluation methods to be used for demand 
Docket No. RM05-5-020 - 2 -

response and energy efficiency products. The standards thereby facilitate the 

ability of demand response and energy efficiency providers to participate in 

organized wholesale electric markets, reducing transaction costs and providing an 

opportunity for more customers to participate in these programs, especially for 

customers that operate in more than one organized market. 

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

publication in the FEDERAL REGISTER]. Dates for implementation of the 

standards are provided in the Final Rule. This incorporation by reference of 

certain publications in the rule is approved by the Director of the Federal Register

as of [insert date 60 days after publication in the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT:

David Kathan (technical issues)

Office of Energy Policy and Innovation

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-6404

Mindi Sauter (legal issues)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-6830

SUPPLEMENTARY INFORMATION:
UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Standards for Business Practices and Communication 

Protocols for Public Utilities

Docket No. RM05-5-020

ORDER NO. 676-G 

TABLE OF CONTENTS

Paragraph Numbers

I. Background ...............................................................................................................................2.

II. Discussion................................................................................................................................11.

A. Overview.............................................................................................................................11.

B. NAESB Phase II Demand Response M&V Standards......................................................14.

1. Comments .....................................................................................................................15.

a. Adoption of Phase II Demand Response M&V Standards.......................................15.

b. Level of Detail, Standardization, and Best Practices.................................................19.

c. Other Matters..............................................................................................................26.

2. Commission Determination ............................................................................................33.

C. NAESB Energy Efficiency M&V Standards.....................................................................40.

1. Comments........................................................................................................................41.

a. Adoption of Wholesale Energy Efficiency M&V Standards....................................41.

b. Other Matters..............................................................................................................45.

2. Commission Determination ............................................................................................47.

D. Incorporation by Reference/Copyrighted Standards.........................................................52.

III. Implementation Dates and Procedures ................................................................................54.

IV. Notice of Use of Voluntary Consensus Standards................................................................58.

V. Information Collection Statement...........................................................................................59.

VI. Environmental Analysis.........................................................................................................67.

VII. Regulatory Flexibility Act...................................................................................................68.

VIII. Document Availability........................................................................................................71.

IX. Effective Date and Congressional Notification.....................................................................74.
142 FERC ¶ 61,131

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Chairman;

 Philip D. Moeller, John R. Norris,

 Cheryl A. LaFleur, and Tony T. Clark.

Standards for Business Practices and Communication 

Protocols for Public Utilities

Docket No. RM05-5-020

ORDER NO. 676-G 

FINAL RULE

(Issued February 21, 2013)

1. The Federal Energy Regulatory Commission (Commission) is amending its 

regulations at 18 C.F.R. § 38.2(a) (which establish standards for business practices and 

electronic communications for public utilities)1 to incorporate by reference2 updated 

business practice standards adopted by the Wholesale Electric Quadrant (WEQ) of the 

North American Energy Standards Board (NAESB) to categorize various products and 

services for demand response and energy efficiency and to support the measurement and 

verification (M&V) of these products and services in organized wholesale electric 

markets. These standards provide common definitions and processes regarding demand 

 1 18 CFR 38.2(a) (2012).

2 Incorporation by reference makes compliance with these standards mandatory for 

public utilities subject to Part 38 of the Commission’s regulations.
Docket No. RM05-5-020 - 2 -

response and energy efficiency products in organized wholesale electric markets where 

such products are offered. The standards also require each regional transmission 

organization (RTO) and independent system operator (ISO) to address in the RTO’s or 

ISO’s governing documents the performance evaluation methods to be used for demand 

response and energy efficiency products. The standards thereby facilitate the ability of 

demand response and energy efficiency providers to participate in organized wholesale 

electric markets, reducing transaction costs and providing an opportunity for more 

customers to participate in these programs, especially for customers that operate in more 

than one organized market. 

I. Background

2. NAESB is a private consensus standards developer that divides its activities 

among four quadrants, each of which is composed of members from all segments of its 

respective industry.3

 NAESB is an accredited standards organization under the auspices 

of the American National Standards Institute (ANSI). NAESB’s procedures are designed 

to ensure that all industry participants can have input into the development of a standard, 

whether or not they are members of NAESB, and each wholesale electric standard that 

NAESB’s WEQ adopts is supported by a consensus of the seven industry segments: End 

Users, Distribution/Load Serving Entities, Transmission, Generation, Marketers/Brokers, 

Independent Grid Operators/Planners, and Technology/Services. The WEQ process 

 3 The four quadrants are the wholesale and retail electric quadrants and the 

wholesale and retail natural gas quadrants.
Docket No. RM05-5-020 - 3 -

requires a super-majority vote of 67 percent of the members of the WEQ’s Executive 

Committee, with support from at least 40 percent of each of the seven industry segments, 

to approve a business practice standard.4

 For final approval, 67 percent of the WEQ’s 

general membership must ratify the standards,5 at which point compliance with NAESB’s 

standards would be voluntary.

3. In 2006, the Commission adopted Order No. 676, a Final Rule that incorporated

by reference business practice standards adopted by NAESB applicable to public 

utilities.6

 Since 2006, the NAESB consensus industry stakeholder process has reviewed 

the NAESB business practice standards for public utilities with a view to creating a more

efficient marketplace and it has adopted revisions. In a number of instances, the 

Commission has incorporated the standards by reference into the Commission’s 

regulations, making them mandatory for the entities identified in the standards.7

 4 Under NAESB’s procedures, interested persons may attend and participate in 

NAESB committee meetings, and phone conferences, even if they are not NAESB 

members.

5 See Standards for Business Practices and Communication Protocols for Public 

Utilities, Order No. 676, FERC Stats. & Regs. ¶ 31,216, n.5 (2006), reh’g denied, Order 

No. 676-A, 116 FERC ¶ 61,255 (2006).

6 Id.

7 Standards for Business Practices and Communication Protocols for Public 

Utilities, Final Rule, Order No. 676-F, FERC Stats. & Regs. ¶ 31,309 (2010); Final Rule, 

Order No. 676-E, FERC Stats. & Regs. ¶ 31,299 (2009); order granting clarification 

and denying reh’g, Order No. 676-D, 124 FERC ¶ 61,317 (2008), Final Rule, Order 

No. 676-C, FERC Stats. & Regs. ¶ 31,274 (2008), Final Rule, Order No. 676-B, FERC 

Stats. & Regs. ¶ 31,246 (2007). 
Docket No. RM05-5-020 - 4 -

4. NAESB began work on developing business practice standards pertaining to the 

measurement and verification of demand response8 products and services in July 2007, 

when the NAESB WEQ Demand Side Management (DSM) - Energy Efficiency (EE) 

subcommittee began work on this issue. Key to obtaining consensus on the initial set of 

demand response measurement and verification standards was the agreement to proceed 

with further work on more detailed technical standards for the measurement and 

verification of demand response resources. This effort led to the adoption and ratification 

by NAESB of measurement and verification standards early in 2009. 

5. On April 17, 2009, NAESB filed a report informing the Commission that it had 

adopted an initial set of business practice standards to categorize various demand 

response products and services and to support the measurement and verification of these 

products and services in organized wholesale electric markets (Phase I Demand Response 

M&V Standards).9

 As mentioned above, the NAESB report recognized that adoption of 

these standards would need to be followed by the development of more detailed technical 

standards for the measurement and verification of demand response products and services 

in RTO and ISO areas. 

 8 Demand response means a reduction in the consumption of electric energy by 

customers from their expected consumption in response to an increase in the price of 

electric energy or to incentive payments designed to induce lower consumption of electric 

energy. 18 CFR 35.28(b)(4) (2012).

9 Report, North American Energy Standards Board, Measurement and Verification 

of Demand Response Products, Docket No. RM05-5-017, at 2 (filed Apr. 17, 2009) 

(April 2009 Report).
Docket No. RM05-5-020 - 5 -

6. On April 15, 2010, the Commission issued Order No. 676-F, incorporating by 

reference the Phase I Demand Response M&V Standards that categorize various demand 

response products and services and support the measurement and verification of these 

products and services in organized wholesale electric markets.10 The Commission stated 

that “[w]hile NAESB’s Phase I [Demand Response] M&V Standards represent a good 

first step, additional substantive standards would appear beneficial in creating transparent 

and consistent measurement and verification of demand response products and services in 

wholesale electric markets.”11 The Commission also stated that “we expect Phase II will 

address issues related to baseline development . . . .”12 The Commission anticipated that 

the measurement and verification standards needed to accomplish this goal would be a 

focus of NAESB’s Phase II measurement and verification standards development 

efforts.13

 10 Standards for Business Practices and Communication Protocols for Public 

Utilities, Order No. 676-F, FERC Stats. & Regs. ¶ 31,309 (2010).

11 Order No. 676-F, FERC Stats. & Regs. ¶ 31,309 at P 32.

12 Id. P 37. The NAESB Phase I Demand Response M&V Standards defines 

“baseline” as “an estimate of the electricity that would have been consumed by a Demand 

Resource in the absence of a Demand Response Event.” 

13 Id. P 32.
Docket No. RM05-5-020 - 6 -

7. NAESB subsequently initiated specific plans to improve and adopt additional 

technical standards and filed a report14 with the Commission on May 3, 2011 informing 

the Commission that NAESB had adopted a revised set of standards covering 

measurement and verification (Phase II Demand Response M&V Standards) and a new 

set of standards covering energy efficiency15 (Wholesale Energy Efficiency M&V 

Standards), and explaining its efforts to develop these standards.

8. After a review of NAESB’s May 2011 Report, the Commission issued a notice of 

proposed rulemaking (NOPR) on April 19, 2012 proposing to amend the Commission’s 

regulations at 18 C.F.R. § 38.2 to incorporate by reference specific enumerated business 

 14 Report, North American Energy Standards Board, Measurement and 

Verification of Demand Response Products, Docket No. RM05-5-020 (filed May 3, 

2011) (May 2011 Report).

15 Energy efficiency, Electricity:

[r]efers to programs that are aimed at reducing the energy 

used by specific end-use devices and systems, typically 

without affecting the services provided. These programs 

reduce overall electricity consumption (reported in 

megawatthours), often without explicit consideration for the 

timing of program-induced savings. Such savings are 

generally achieved by substituting technologically more 

advanced equipment to produce the same level of end-use 

services (e.g. lighting, heating, motor drive) with less 

electricity. Examples include high-efficiency appliances, 

efficient lighting programs, high-efficiency heating, 

ventilating and air conditioning (HVAC) systems or control 

modifications, efficient building design, advanced electric 

motor drives, and heat recovery systems.

U.S. Energy Information Administration Glossary, 

http://www.eia.gov/tools/glossary/index.cfm?id=E (last visited Feb. 6, 2013).
Docket No. RM05-5-020 - 7 -

practice standards16 and seeking comment on both the proposed Energy Efficiency and 

Phase II Demand Response M&V Standards.17 In light of the Commission’s statements 

in Order No. 676-F regarding the importance of consistency and specificity as discussed 

above, the Commission requested comments in the NOPR as to whether the Phase II 

Demand Response M&V Standards were sufficiently detailed to provide transparent 

 16 NAESB Phase II Demand Response M&V Standards collectively identified by 

NAESB as 2010 Wholesale Electric Quadrant Annual Plan Item 4(a) and 4(b): General –

Section 015-1.0; Telemetry – Section 015-1.1; After-the-Fact Metering – Section 015-

1.2; Performance Evaluation – Section 015-1.3; General – Section 015-1.4; Telemetry –

Section 015-1.5; After-the-Fact Metering – Section 015-1.6; Performance Evaluation –

Section 015-1.7; General – Section 015-1.8; Telemetry – Section 015-1.9; After-the-Fact 

Metering – Section 015-1.10; Performance Evaluation – Section 015-1.11; General –

Section 015-1.12; Telemetry – Section 015-1.13; After-the-Fact Metering – Section 015-

1.14; Performance Evaluation – Section 015-1.15; Baseline Information – Section 015-

1.16; Event Information – Section 015-1.17; Special Processing – Section 015-1.18; 

Baseline Information – Section 015-1.19; Event Information – Section 015-1.20; Special 

Processing – Section 015-1.21; Baseline Information – Section 015-1.22; Event 

Information – Section 015-1.23; Special Processing – Section 015-1.24; Baseline 

Information – Section 015-1.25; Event Information – Section 015-1.26; Special 

Processing – Section 015-1.27; Baseline Information – Section 015-1.28; Event 

Information – Section 015-1.29; and Special Processing – Section 015-1.30. NAESB 

Energy Efficiency M&V Standards collectively identified by NAESB as 2010 Wholesale 

Electric Quadrant Annual Plan Item 4(d): Energy Efficiency Resource Use Criteria in 

Wholesale Markets – Section 021-3.1; General Measurement and Verification Plan 

Requirements – Section 021-3.2; Post Installation M&V Report Components – Section 

021-3.3; Performance Reporting – Section 021-3.4; M&V Supporting Documents –

Section 021-3.5; M&V Methodologies – Section 021-3.6; Energy Efficiency Baseline 

Conditions – Section 021-3.7; Statistical Significance – Section 021-3.8; Nominated 

Energy Efficiency Value Calculations/Demand Reduction Value Calculations – 

Section 021-3.9; Measurement and Monitoring – Section 021-3.10; Measurement 

Equipment Specifications – Section 021-3.11; and Data Validation – Section 021-3.12.

17 Standards for Business Practices and Communication Protocols for Public 

Utilities, Notice of Proposed Rulemaking, 77 FR 24427 (Apr. 24, 2012), FERC Stats. 

& Regs. ¶ 32,688 (2012) (Energy Efficiency and Phase II M&V NOPR).
Docket No. RM05-5-020 - 8 -

measurement and verification among regions, and whether greater detail or 

prescriptiveness would be appropriate. The Commission also requested comments on the 

degree to which encouraging greater consistency among markets and regions would 

reduce costs for customers and market participants or otherwise facilitate participation by 

end users in multiple markets. 

9. To the extent that commenters recommended greater detail in the standards, the 

Commission requested additional comment as to whether market participants have 

attained sufficient experience in demand response to allow them to identify best practices 

in the area of measurement and verification, particularly for performance evaluation-type 

areas such as baseline calculations, to help inform any guidance that the Commission 

may provide. Similarly, the Commission requested comment regarding particular areas 

where enhancing such detail or consistency would be most useful. The Commission also 

requested comment on whether further development of more substantive measurement 

and verification standards broadly applicable to RTOs and ISOs is necessary and, if so, 

whether a NAESB or a Commission-led, or other process should carry out the task. 

Further, the Commission requested that, if commenters prefer the NAESB process, they 

comment on the best relationship between NAESB and the RTO and ISO stakeholder 

process to facilitate the formulation of standards.
Docket No. RM05-5-020 - 9 -

10. In response to the NAESB Energy Efficiency and Phase II M&V NOPR, 21 

entities filed comments.18 On July 17, 2012, NAESB filed a report with the Commission

stating it made a modification to the Energy Efficiency M&V Standards by deleting 

reference to the International Performance Measurement and Verification Protocol 

(IPMVP).19 Using NAESB operating procedures for minor clarifications and corrections 

to standards, the WEQ Executive Committee approved the correction on June 15, 2012. 

II. Discussion

A. Overview

11. In this Final Rule, the Commission is revising its regulations at 18 C.F.R. § 38.2 to 

incorporate by reference the Phase II Demand Response M&V Standards and the 

Wholesale Energy Efficiency M&V Standards. The Commission concludes that the 

Phase II Demand Response M&V Standards represent an incremental improvement to the 

business practices for measuring and verifying demand resource products and services in 

the organized wholesale electric markets. This phase of demand response standard 

development builds upon the work that already has been accomplished to provide 

demand response resources with opportunities to participate in organized wholesale 

electric markets, including accurate measurement and verification of demand response 

 18 The names of entities that filed comments are listed in the Appendix to this 

Final Rule.

19 Errata Report, North American Energy Standards Board, Measurement and 

Verification of Demand Response Products, Docket No. RM05-5-000, RM05-5-020 

(filed July 17, 2012).
Docket No. RM05-5-020 - 10 -

resources’ performance. Similarly, the Commission concludes that the Wholesale Energy 

Efficiency M&V Standards facilitate energy efficiency providers’ ability to participate in 

electricity markets by providing standardized measurement requirements and reducing 

transaction costs, and assure more effective evaluation of the performance of energy 

efficiency products and services. 

12. The Phase II Demand Response M&V Standards and Wholesale Energy 

Efficiency Standards were approved by the WEQ and ratified by the NAESB 

membership under NAESB’s consensus procedures.20 As the Commission found in 

Order No. 587,21 adoption of consensus business practice standards is appropriate 

because the consensus process helps ensure the reasonableness of the standards by 

requiring that the standards draw support from a broad spectrum of industry participants 

representing all segments of the industry. Moreover, since the industry itself has to 

conduct business under these standards, the Commission’s regulations should reflect 

those business practice standards that have the widest possible support. 

13. The specific NAESB standards that the Commission is incorporating by reference 

in this Final Rule are the Phase II Demand Response M&V Standards and associated 

terms, and the Wholesale Energy Efficiency M&V Standards and associated terms.22 

 20 As noted earlier, 67 percent of the WEQ’s general membership voting is 

required for ratification of a business practice standard.

21 Standards for Business Practices of Interstate Natural Gas Pipelines, Order

No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & Regs. ¶ 31,038 (1996).

22 The specific standards are enumerated in n.16 supra.
Docket No. RM05-5-020 - 11 -

B. NAESB Phase II Demand Response M&V Standards

14. In the NOPR, the Commission proposed to incorporate by reference the NAESB 

Phase II Demand Response M&V standards, which include three sections: the first 

section (Introduction and Definition of Terms) contains an overview of the standards and 

definitions, the second section (Standards 015-1.0 through 015-1.15) contains standards 

on Provision of Wholesale Electric Demand Response Energy, Capacity, Reserve and 

Regulation Products, and the third section (Standards 015-1.16 through 015-1.30) 

contains standards on the five performance evaluation methodologies: (1) Maximum 

Base Load; (2) Meter Before / Meter After; (3) Baseline Type-I (Interval Meter); (4) 

Baseline Type-II (Non-Interval Meter); and (5) Metering Generator Output. 

1. Comments 

a. Adoption of Phase II Demand Response M&V Standards

15. The Commission sought comments on whether it should incorporate by reference

NAESB’s proposed Phase II Demand Response M&V Standards. Commenters 

supporting incorporation of the proposed NAESB Phase II Demand Response M&V 

business practice standards into the Commission’s regulations include the IRC, EPSA, 

AEP, Indicated New York Transmission Owners, DR Supporters, IECA, Hess, PSEG, 

and WEM. DR Supporters, IECA, Hess and PSEG also recommend further 

standardization, as discussed in detail below. 

16. Viridity generally supports the incorporation of the Phase II Demand Response 

M&V Standards, but also requests that the Commission include in the final rule a 
Docket No. RM05-5-020 - 12 -

requirement for RTOs and ISOs to adopt performance evaluation methods that provide a 

reasonably accurate, reasonably unbiased, and reasonably consistent baseline for a 

customer’s highly-variable load.

23

17. EEI and Southern also generally support incorporation of the Phase II Demand 

Response M&V Standards, but request that, to avoid inadvertent ambiguity, the 

Commission clarify in the Final Rule and in revisions to 18 C.F.R. § 38.2 that the 

NAESB standards and associated terms for the Phase II Demand Response M&V and the 

Wholesale Energy Efficiency M&V apply only in markets administered by RTOs and 

ISOs. EEI and Southern further request that the Commission incorporate by reference 

those provisions of the NAESB standards that limit their applicability to RTO and ISO 

markets. 

18. NAPP and the PJM IMM recommend against adopting the Phase II Demand 

Response M&V Standards. As discussed below, the PJM IMM states that the proposed 

standards do not reference the Peak Load Contribution recently adopted in PJM, that they 

do not adequately define “Capacity Service,” and that they inappropriately allow the 

same five approaches for capacity as for energy products. It states that adopting the 

standards as applicable to capacity creates the potential to “reopen and confuse the issue 

 23 Viridity notes that NAESB defines “highly-variable load” as a customer that has 

a “fluctuating or unpredictable electricity usage pattern.” Viridity states that these 

customers’ “business-as-usual” loads may have little or no relation to the weather; thus 

predicting their loads is based on factors specific to the customer instead of more 

universal factors such as the weather. 
Docket No. RM05-5-020 - 13 -

of double counting in PJM that was only recently resolved.” 24 The PJM IMM also notes

the difficulty of trying to apply common measurement and verification standards across 

all RTOs and ISOs. 

b. Level of Detail, Standardization, and Best Practices

19. The Commission sought comments on whether the proposed NAESB Phase II 

Demand Response M&V Standards were sufficiently detailed and whether greater detail 

would be appropriate. The IRC believes that the five performance evaluation 

methodologies in the NAESB Phase II Demand Response M&V standards provide RTOs 

and ISOs with the necessary flexibility to enable accurate M&V. EPSA agrees and 

believes it is appropriate to defer to the RTO and ISO for an assessment of whether 

greater detail is needed for a particular region, and to establish the best next steps for 

refining demand response M&V mechanisms. 

20. On the other hand, IECA states there has been minimal forward movement in 

developing greater standardization and “best practices” for demand response M&V, and 

argues that the status quo is unjust, unreasonable or unduly discriminatory and that the 

NAESB process discriminates against manufacturers. DR Supporters indicate that the 

proposed standards do not include specific and detailed characteristics of performance 

evaluation methodologies and that, because the NAESB standards defer to the RTO and 

ISO governing documents, the Phase II standards do little to bring consistency or 

standardization to the manner in which demand response is measured. The DR 

 24 See PJM Interconnection, L.L.C., 138 FERC ¶ 61,138 (2012).
Docket No. RM05-5-020 - 14 -

Supporters argue that greater detail or prescriptiveness is appropriate with respect to the 

measurement and verification of energy. However, DR Supporters state that efforts to 

impose consistent M&V approaches across RTO and ISO capacity markets would be 

misspent given that M&V in those markets is so intertwined with the details of the 

specific capacity markets themselves.

21. PSEG suggests that additional standards be developed that define the testing and 

auditing requirements for demand response resources to ensure that they have the 

capability to reduce demand during their time commitment. PSEG also argues that the 

requirement to provide real-time telemetry data for all four products (i.e., energy, 

capacity, reserve, and regulation) should be mandatory, and requests that the language in 

the standards be revised in the future to require specific language in this regard. PSEG 

also requests that additional standards be developed that require providers to measure 

demand response delivered via behind-the-meter generation, noting that it is important 

for system reliability planners to evaluate the impact of environmental regulations that 

affect those types of facilities. 

22. The Commission also sought comments on whether encouraging greater 

consistency would reduce costs and facilitate participation. The IRC contends that 

further efforts at developing a standardized M&V performance evaluation methodology 

will not be productive at this time, and could reduce the accuracy of demand response 

M&V and exclude participation by resources with load shapes that do not conform to the 

standard. The IRC believes that a flexible, regional approach to demand response M&V 
Docket No. RM05-5-020 - 15 -

is crucial to ensuring the growth of demand response resources in wholesale electric 

markets. Hess recommends that the Commission pursue simplicity and consistency over 

time (i.e., stability), as opposed to simply consistency across all RTOs and ISOs. Hess 

urges the Commission to be mindful that confusion and loss of customer confidence due 

to frequent rule changes might outweigh marginal benefits of rule improvements.

23. However, DR Supporters indicate that encouraging greater consistency among 

RTO and ISO energy markets and regions would reduce costs and facilitate participation. 

DR Supporters argue that differences in baseline designs require demand response 

providers that are active across the country to pay for and/or develop, maintain and adapt 

diverse systems in order to settle energy payments for demand response customers in 

order to accommodate each market’s differences, and that this can result in customer 

dissatisfaction related to increased costs and confusion. 

24. The Commission also sought comments on whether the demand response industry 

has had sufficient experience to enable it to identify best practices. DR Supporters 

believe the industry has had sufficient experience, and that this experience should be used 

to develop a common energy baseline methodology for use across all RTOs and ISOs, 

which would be available as an alternative to the approach a particular RTO and ISO 

already has implemented. Hess agrees that there is sufficient experience to identify best 

practices, and suggests that the standards proposed for incorporation do not draw upon 

available market experience to provide the details necessary to allow for true 

standardization. 
Docket No. RM05-5-020 - 16 -

25. The Commission also asked commenters to identify particular areas in which 

enhancing detail or consistency would be useful. Viridity indicates that the proposed 

M&V standards give RTOs and ISOs complete discretion as to whether a region utilizes 

any baseline methodology that is suitable for highly-variable loads,25 leaving these 

resources without a reasonable baseline against which their performance can be 

measured. EPSA asserts that a lack of specific comparability between demand resources 

and other resources that participate in the wholesale market risks artificially skewing 

incentives towards potentially less reliable resources, discouraging needed investments 

and compromising the reliability of the system. 

c. Other Matters

26. The Commission requested comments on whether, if further development of more 

substantive measurement and verification standards broadly applicable to RTOs and ISOs 

is required, a NAESB, Commission-led, or other process should carry out the task.

26 

Several commenters, including EVO, Hess, IECA, DR Supporters, PSEG, and NYTOs 

prefer a Commission-led process, with some suggesting that the Department of Energy 

and NAESB also should participate. IECA, NYTOs, and DR Supporters variously ask 

the Commission to undertake technical conferences to review the M&V methods used by 

the different RTOs and ISOs in order to fully understand their differences, develop a set 

of consistent, detailed demand response M&V standards to enable demand response 

 25 See supra note 23.

26 NOPR, FERC Stats. & Regs. ¶ 32,688 at P 19.
Docket No. RM05-5-020 - 17 -

resources to participate in multiple jurisdictions without incurring costs of complying 

with different standards, determine the M&V floor required to provide demand response 

compensation, and establish a single Baseline Type I measurement and verification 

approach for energy that any curtailment service provider would be permitted to use in 

any Commission-jurisdictional market.

27. IRC states that in some cases, Commission action has provided critical guidance 

that can be more effective in providing direction than can be achieved in trying to reach 

consensus; therefore, future Commission guidance potentially can avoid significant hours 

of debate among NAESB participants on additional contentious M&V issues. 

28. IRC further states that stakeholders have expressed only limited support for 

launching an additional NAESB process. IRC urges the Commission not to press for 

additional standardization at this time; however, should the Commission decide to do so, 

IRC suggests that the NAESB process is preferable to creating a new institutional process 

and requests that the Commission provide detailed guidance on the nature of further 

efforts. EPSA supports using existing NAESB processes in order to avoid establishing 

competing processes for developing demand response M&V baselines. EPSA believes 

the Phase II standards serve as a benchmark for RTO and ISO governing documents, 

establishing parameters that regional standards must either meet or surpass.

29. NAPP supports an industry-led standard development process, because it believes 

the NAESB process has little participation from demand response providers, energy 

efficiency providers and end use customers. 
Docket No. RM05-5-020 - 18 -

30. The PJM IMM also recommends that if the Commission decides to incorporate 

NAESB standards into its rules, the Commission should clarify that “Capacity Service” 

necessarily means achieving a reduction to a level at or below a resource’s peak load 

contribution in order to prevent confusion in the industry and to avoid inefficient market 

rules. Additionally, the PJM IMM considers the NAESB standards to be flawed because 

they do not differentiate metrics appropriate to energy demand from metrics appropriate 

for capacity demand.

31. EPSA requests that the Commission confirm EPSA’s understanding of the 

NOPR’s explanation regarding conflicts between the RTO’s or ISO’s governing 

documents and the NAESB business standards. Specifically, EPSA requests that the 

Commission clarify that, if a conflict arises between a system operator’s governing 

documents and the NAESB business standards, the system operator’s governing 

documents would have precedence over the NAESB business standards with respect to 

things such as consistency of terms or definitions, but that such conflicts should not refer 

to use of or reliance on less rigorous regional demand response M&V techniques. EPSA 

believes this provision should allow for regional variation while protecting against a 

region adopting measures and protocols that are inferior to those prescribed in the 

Phase II proposal. 

32. Mr. Lynch states that he opposes the proposed standard for power plants 

regulating carbon dioxide emissions from new coal-based power plants, arguing that such 
Docket No. RM05-5-020 - 19 -

a regulation would effectively outlaw coal as a fuel source for the next generation of 

power plants, causing energy costs to rise. 

2. Commission Determination

33. The Commission is revising its regulations at 18 C.F.R. § 38.2 to incorporate by 

reference the revised NAESB Phase II Demand Response M&V Standards, as they 

represent an incremental improvement to the existing standards that we incorporated by 

reference in Order No. 676-F. This phase of the demand response standard development 

builds upon the work that allows demand response to participate in organized wholesale 

electric markets, including accurate measurement and monitoring of demand response 

resources’ performance.

34. The Phase II Demand Response M&V Standards provide common definitions and 

processes regarding demand response products in organized wholesale electric markets 

where such products are offered. The standards address the applicability of performance 

evaluation, metering, and processes to each of the organized wholesale electric markets. 

The changes included in the Phase II Demand Response M&V Standards add greater 

specificity on items such as meter data reporting deadlines. The standards also require 

each RTO and ISO to address in the RTO’s or ISO’s governing documents the 

performance evaluation methods to be used for demand response products. The 

performance evaluation standards define each of the individual methods and their use 

during demand response events. The changes to the performance evaluation standards 
Docket No. RM05-5-020 - 20 -

included in the Phase II Demand Response M&V Standards add greater specificity on the 

use of the individual performance evaluation methods.

35. The Commission concludes that the Phase II Demand Response M&V Standards 

facilitate the ability of demand response providers to participate in organized wholesale 

electric markets, reducing transaction costs and providing an opportunity for more 

customers to participate in these programs, especially for customers that operate in more 

than one organized market. The improvements to the uniform set of definitions and 

applicability requirements in the Phase II Demand Response M&V Standards should 

further reduce differences in performance evaluation methods between regions. 

Incorporating by reference these measurement and verification standards also will 

improve the methods and procedures for accurately measuring the performance of 

demand response resources and assist in monitoring demand response services for 

potential market manipulation. 

36. The Commission appreciates the thoughtful comments and proposals related to 

increasing the detail of the Phase II Demand Response M&V Standards, as well as the 

proposals to establish a common M&V approach that would supplement each RTO’s and 

ISO’s approved methods. As the Commission has explained in prior orders, in choosing 

to take advantage of the efficiency of the NAESB process to establish technical standards 

for business practices and communication protocols for the gas and electric industries, we 

follow the standard regulatory process by which standards are incorporated by 
Docket No. RM05-5-020 - 21 -

reference.

27 These rules appropriately balance the interests of the standards organization 

and the expediency of governmental use of privately developed standards. We find that, 

on balance, the objections raised to adopting the standards do not warrant rejecting them. 

While additional efforts to increase consistency across regions could benefit end users 

and demand response providers, as presented the Phase II Demand Response M&V 

Standards nonetheless represent an incremental improvement to the standards 

incorporated by reference in Order No. 676-F. The Commission therefore will 

incorporate by reference the standards without modification. While the Commission will 

not require any additional process to further refine or develop demand response

measurement and verification standards at this time, we will monitor efforts at RTOs and 

ISOs and NAESB to address the issues raised in this proceeding and otherwise made 

known to us, and take action in the future in a separate docket as necessary.

37. We agree with EEI and Southern that the particular standards we are incorporating 

by reference in this Final Rule apply only in organized wholesale electric markets 

administered by RTOs or ISOs. NAESB made this clear in the applicability section of its 

standards, and we do not see any need to further amend 18 C.F.R. § 38.2. With respect to 

questions regarding whether the relevant RTO or ISO governing documents take 

precedence over the standards that we are incorporating by reference, we find that the 

standards adopted are sufficiently clear. To the extent that the Phase II Demand 

 27 See, e.g., Standards for Business Practices and Communication Protocols for 

Public Utilities, Order No. 676-E, FERC Stats. & Regs. ¶ 31,299, at P 118 (2009). 
Docket No. RM05-5-020 - 22 -

Response M&V Standards refer to “Governing Documents,” in the event of a conflict 

with the otherwise applicable NAESB standard, the governing documents will take 

precedence. If such a conflict arises and is of concern to affected parties, they may bring 

that concern to the Commission for consideration. 

38. We also find merit in the suggestions to develop baselines that are more accurate 

for highly-variable load, to consider whether further work is needed to reflect in the 

standards the distinct functions provided by capacity and energy products, and to 

consider further development of appropriate rules for demand response supported by 

behind-the-meter generation. We encourage stakeholders to pursue these issues as they 

consider potential enhancements to the NAESB standards.

39. Mr. Lynch’s comments are not related to the issues in this proceeding and, 

therefore, we will not address them here.

C. NAESB Energy Efficiency M&V Standards

40. In the NOPR, the Commission proposed to incorporate by reference the NAESB 

Wholesale Energy Efficiency M&V Standards, which include the following new 

standards -- Energy Efficiency Resource Use Criteria in Wholesale Markets – 

Section 021-3.1; General Measurement and Verification Plan Requirements – 

Section 021-3.2; Post Installation M&V Report Components – Section 021-3.3; 

Performance Reporting – Section 021-3.4; M&V Supporting Documents – Section 021-

3.5; M&V Methodologies – Section 021-3.6; Energy Efficiency Baseline Conditions –

Section 021-3.7; Statistical Significance – Section 021-3.8; Nominated Energy Efficiency 
Docket No. RM05-5-020 - 23 -

Value Calculations/Demand Reduction Value Calculations – Section 021-3.9; 

Measurement and Monitoring – Section 021-3.10; Measurement Equipment 

Specifications – Section 021-3.11; and Data Validation – Section 021-3.12. We address 

below the issues raised by the commenters.

1. Comments

a. Adoption of Wholesale Energy Efficiency M&V 

Standards

41. The Commission sought comments on whether it should incorporate by reference 

NAESB’s proposed Energy Efficiency M&V Standards. Several commenters, including 

EEI, AEP, and IRC support incorporating the NAESB Energy Efficiency M&V business 

practice standards into the Commission’s regulations. 

42. Several other parties offer qualified support, including the DR Supporters, IECA, 

and PSEG. While generally supporting the incorporation of the energy efficiency 

business standards into the Commission rules, these commenters recommend several 

changes. The DR Supporters and IECA recommend that “streamlined, cost-effective 

application of coincidence factors for simple conversion of energy use to peak demand 

reduction” be included in the NAESB Energy Efficiency M&V standards, particularly for 

capacity markets. In its comments, PSEG recommends several specific modifications to 

the proposed Energy Efficiency M&V standards including wording changes, changes in 

report timing, and deletion of Standard 021-3.11.1.9, which addresses the precision of 

measurement or monitoring equipment for proxy variables that do not directly measure 

electrical demand. IRC states that the Commission also should adopt and incorporate 
Docket No. RM05-5-020 - 24 -

into its regulations the Introduction and Principles and Applicability sections identified in 

the Annual Plan item 4(d) as WEQ-021-1 and WE1-021-2, respectively. IRC argues that 

the Introduction and Principles frame the context of the standards and that the 

Applicability section: limits the applicability of the standard to RTOs and ISOs; 

establishes that RTO and ISO governing documents take precedence over the standard 

where there is a conflict; clarifies that the standard does not establish requirements 

related to compensation, design, operation, or use of energy efficiency products and 

services, and does not require system operators to offer energy efficiency products and 

services; and states that the standard includes the requirements on energy efficiency 

resource providers for M&V of energy efficiency products and services offered into 

wholesale electric markets. 

43. NEEP, NAPP, WEM, Alliance to Save Energy, and EVO recommend against 

adopting the NAESB Energy Efficiency M&V Standards. NEEP and EVO share PSEG’s 

objections to the required precision of measurement of monitoring equipment in Standard 

021-3.11.1.9. NAPP, NEEP, Alliance to Save Energy, and EVO object to removing 

references to the International Performance Measurement and Verification Protocol 

(IPMVP). These commenters are concerned that deleting references to the IPMVP in the 

body of the Energy Efficiency M&V Standards removes the connection of the NAESB 

energy efficiency standards to the leading industry-accepted energy efficiency M&V 

guidance document. They argue that removing the references to IPMVP could cause 

confusion in the field and impede credible and consistent energy efficiency M&V, and 
Docket No. RM05-5-020 - 25 -

will make it much more difficult for the Commission to be assured of consistency and 

transparency. NAPP argues that the NAESB process resulting in removing references to 

the IPMVP did not involve broad industry participation. 

44. DNV KEMA and NEEP recommend several modifications to the Energy 

Efficiency M&V standards that address statistical significance and accuracy of the 

measurement of proxy variables. NEEP proposes modifications stating that the plus or 

minus two percent accuracy requirement on equipment required in WEQ.021.3.11.9 is 

redundant with the overall accuracy level required in Section WEQ.021.3.8. NEEP 

argues that this requirement could lead to a departure from standard practice in evaluating

energy efficiency resources, and may compromise the overall accuracy of the M&V 

results while imposing higher evaluation costs. NEEP contends the prescribed level of 

accuracy for measurement for monitoring equipment extends beyond the hardwarespecific scope of Section WEQ.021.3.11.

b. Other Matters

45. Several comments request that the Commission initiate a process to examine 

specific energy efficiency standards or to convene a technical conference to discuss the 

proposed energy efficiency standards in general in order to resolve areas of concern. 

IECA requests that the Commission add a process to create streamlined, cost-effective 

application of factors for simple conversion of energy use to peak reduction. EVO, 

NECPUC, and NEEP ask the Commission to convene a technical conference to address 

energy efficiency issues identified by commenters in this rulemaking process and to 
Docket No. RM05-5-020 - 26 -

resolve areas of concern. EVO, supported by NEEP, also asks the Commission to 

convene a technical conference to address the removal of references to IPMVP from the 

energy efficiency standards, arguing that the removal constitutes a material change to the 

substance of the Wholesale Energy Efficiency M&V Standards.

46. NECPUC states its understanding that there is a significant divergence in views 

amongst the NAESB board with respect to the equipment accuracy requirement in 

WEQ.021.3.11.9, and NEEP states that its comments on statistical precision (discussed 

above) were not sufficiently considered or understood within the NAESB process. 

2. Commission Determination

47. The Commission is revising its regulations at 18 C.F.R. § 38.2 to incorporate by 

reference the NAESB Wholesale Energy Efficiency M&V Standards. The new standards 

define terms and definitions that can be used to facilitate communications and provide 

standards for measurement and verification methodologies for energy efficiency in 

organized wholesale electric markets. These standards will reduce transaction costs and 

provide an additional opportunity and increased incentive for energy efficiency resources 

to participate in the wholesale markets established in RTO and ISO regions. 

48. As with the Phase II Demand Response M&V Standards discussed above, the 

Wholesale Energy Efficiency M&V Standards were developed through the consensusbased NAESB process. Most of the modifications commenters suggest in response to the 

NOPR have already been considered through the NAESB process; consequently, the 

Commission declines to require that such modifications be included here. We find the 
Docket No. RM05-5-020 - 27 -

standard requiring a plus or minus two percent accuracy for measuring equipment, to be 

reasonable; thus we incorporate it here, noting that its applicability is limited to 

measuring equipment only. These standards on measuring equipment accuracy reflect 

industry consensus, arrived at through the NAESB standards development process, on the 

specific statistical precision requirements associated with the reliable operation of 

organized wholesale electric markets. Additionally, while some express concern with 

NAESB’s use of the minor clarifications and correction procedures to remove the IPMVP 

requirement, this procedure is permitted by NAESB’s rules, and the NAESB Executive 

Committee reached a consensus on the removal of references to IPMVP from the energy 

efficiency M&V standards. Since the standards before us do not include the IPMVP 

references, we will not address the comments in that regard. As previously stated, 

NAESB followed its processes to remove these references. We find that standards as 

presented are incremental improvements and incorporation by reference does not

foreclose stakeholders from pursuing these enhancements and their concerns through 

RTO and ISO or NAESB processes. The Commission, therefore, incorporates the 

standards.

28

49. Additionally, a few commenters suggested modifications that were not considered 

during the consensus-based NAESB process, and the Commission declines to require that 

those additional modifications here. Specifically, we will not include provisions 

 28 See n.21 supra; see also OMB Circular A-119 Revised, February 10, 1998, 

available at http://www.whitehouse.gov/omb/circulars_a119. 
Docket No. RM05-5-020 - 28 -

requiring RTOs to carefully consider acceptance of industry developed coincidence 

factors when evaluating Energy Efficiency M&V plans, and thus the Commission will 

not undertake a Commission-led process to develop such coincidence factors. We 

encourage stakeholders to pursue these issues as they consider potential enhancements to

the NAESB standards.

50. We will not incorporate into our regulations the Introduction and Principles and 

Applicability sections identified in the Annual Plan item 4(d) as WEQ-021-1 and WE1-

021-2, respectively, as we find that standards that we are incorporating by reference are 

sufficiently clear that the standards apply to organized wholesale electric markets 

administered by RTOs or ISOs. 

51. The Commission also declines to convene a process or conduct technical 

conferences to discuss potential changes to the Wholesale Energy Efficiency M&V 

Standards. We conclude that it is appropriate to allow industry to gain additional 

experience with these new standards prior to considering additional enhancements. If the 

Commission determines that further efforts are warranted at a later time, it will take 

appropriate steps in a separate docket. 

D. Incorporation by Reference/Copyrighted Standards

52. EVO and WEM object to the incorporation by reference of the NAESB standards, 

maintaining they should not have to pay to obtain copies of the copyrighted standards. 

Similarly, WEM expresses concern that NAESB was utilized to develop the standards 

and contends that the fee NAESB charges for access to its standards will be onerous for 
Docket No. RM05-5-020 - 29 -

some entities, noting that it experienced complications in getting free access to the 

standards from NAESB during the NOPR comment period. The PJM IMM also 

recommends that the Commission ensure that any standards incorporated into its rules are 

published in full in the Federal Register. 

53. We addressed this issue at length in Order No. 676-E29 in November of 2009, 

concluding that the NAESB process is an efficient and cost-effective method of 

developing these standards, incorporation by reference is the appropriate method for the 

Commission to adopt the regulations, and the Commission is required to observe 

NAESB’s copyright.30 As we pointed out in that order, obtaining these standards is not 

cost prohibitive. NAESB, in fact, makes the standards available free for a limited period 

of time to those that want to view the standards during comment periods related to 

Commission proposals to incorporate standards by reference.31 For non-members 

seeking to purchase a copy, an email copy of any final action (e.g., the Demand Response 

Phase II standards) is available for $50, which is not prohibitive. 

III. Implementation Dates and Procedures 

54. The Commission is requiring, consistent with our regulations at 18 C.F.R. 

§ 35.28(c)(vi), each RTO and ISO to revise its OATT to include the NAESB Energy 

Efficiency and Phase II Demand Response M&V Standards we are incorporating by 

 29 Order No. 676-E, FERC Stats. & Regs. ¶ 31,299 at PP 115-121.

30 Id.

31 See http://www.naesb.org/misc/NAESB_Nonmember_Evaluation_LockLizard.pdf.
Docket No. RM05-5-020 - 30 -

reference herein. For standards that do not require implementing tariff provisions, the 

Commission will allow the RTO or ISO to incorporate the WEQ standard by reference in 

its OATT. Compliance with the standards incorporated in this Final Rule will be 

required beginning on the same date that the rule becomes effective (i.e., sixty days after

publication in the Federal Register), even if this precedes the filing of a revised OATT 

reflecting these new requirements.

55. However, as we directed in the Phase I Demand Response M&V Final Rule, to

lighten the burden associated with an immediate, stand-alone filing of a revised tariff 

reflecting the standards incorporated by reference in this Final Rule, we are giving RTOs 

and ISOs the option of including these changes as part of an unrelated tariff filing, even 

though compliance with the revised standards is required beginning on the effective date 

of this Final Rule.32 If the RTO or ISO makes no unrelated tariff filing by 

December 31, 2013, it must make a separate tariff filing incorporating these standards by 

that date.

56. If adoption of these standards does not require any changes or revisions to 

existing OATT provisions, RTOs and ISOs may comply with this rule by adding a 

provision to their OATTs that incorporates the standards adopted in this rule by 

reference, including the standard number used to identify the standard. To incorporate 

this standard into their OATTs, RTOs and ISOs must use the following language in their 

OATTs: Measurement and Verification of Wholesale Electricity Efficiency (WEQ-021 

 32 See Order No. 676-F, FERC Stats. & Regs. ¶ 31,309 at P 44.
Docket No. RM05-5-020 - 31 -

2010 Annual Plan Item 4(d), July 16, 2012; and Measurement and Verification of 

Wholesale Electricity Demand Response (WEQ-015, 2010 Annual Plan Items 4(a) and 

4(b), March 21, 2011).

57. If a RTO or ISO requests waiver of a standard, it will not be required to comply 

with the standard until the Commission acts on its waiver request. Therefore, if a RTO or 

ISO has obtained a waiver or has a pending request for a waiver, its proposed revision to 

its OATT should not include the standard number associated with the standard for which 

it has obtained or seeks a waiver. Instead, the RTO’s or ISO’s OATT should specify 

those standards for which the RTO or ISO has obtained a waiver or has pending a request 

for waiver. If and when a waiver request is denied, the RTO or ISO will be required to 

include in its OATT the standard(s) for which waiver was denied. 

IV. Notice of Use of Voluntary Consensus Standards

58. In section 12(d) of NTT&AA,33 Congress affirmatively requires federal agencies 

to use technical standards developed by voluntary consensus standards organizations, like 

NAESB, as the means to carry out policy objectives or activities determined by the 

agencies unless use of such standards would be inconsistent with applicable law or 

otherwise impractical.34 NAESB approved the standards under its consensus procedures. 

Office of Management and Budget Circular A-119 (§ 11) (February 10, 1998) provides 

that federal agencies should publish a request for comment in a NOPR when the agency 

 33 National Technology Transfer and Advancement Act of 1995. 

34 Id.
Docket No. RM05-5-020 - 32 -

is seeking to issue or revise a regulation proposing to adopt a voluntary consensus 

standard or a government-unique standard. The Commission published a request for 

comment in the Energy Efficiency and Phase II Demand Response M&V NOPR.

V. Information Collection Statement

59. The Office of Management and Budget’s (OMB) regulations require approval of 

certain information collection requirements imposed by agency rules.35 Upon approval 

of a collection 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. The OMB Control Numbers will 

not be displayed in the NAESB standards; an explanation will be included in the 

clearance package submitted to OMB.

60. This Final Rule upgrades the Commission’s current business practice and 

communication standards to include NAESB’s Energy Efficiency M&V Standards and 

Phase II Demand Response M&V Standards. The implementation of these standards is 

necessary to increase the efficiency of demand response and energy efficiency in 

organized wholesale electric markets. In addition, requiring such information ensures a 

common means of communication and ensures common business practices that provide 

participants engaged in transactions with demand response programs with timely 

information and consistent business procedures across multiple markets. The 

 35 5 CFR 1320.11.
Docket No. RM05-5-020 - 33 -

implementation of these data requirements will help the Commission carry out its 

responsibilities under the Federal Power Act. 

61. The Commission sought comments on its burden estimates associated with 

adoption of the NOPR proposals. In response to the NOPR, no comments were filed that 

addressed the reporting burden imposed by these requirements. Therefore the 

Commission will use these same estimates in this Final Rule. 

FERC 

Collection 

Number

No. of 

Respondents

(A)

No. of

Responses 

Per 

Respondent

(B)

Hours Per 

Response

(C)

Total No. of 

Hours

(A)x(B)x(C)

Demand 

Response 

Standards

FERC-51636 6 1 4 24

FERC-71737 6 1 9 54

Energy 

Efficiency 

Standards

FERC-516 6 1 6 36

FERC-717 6 1 12 72

Total for 

FERC-516 60

Total for 

FERC-717 126

Total OneTime 

Burden

186

 36 “FERC-516” is the Commission’s identifier that corresponds to OMB control 

no. 1902-0096 which identifies the information collection associated with Electric Rate 

Schedules and Tariff Filings.

37 “FERC-717” is the Commission’s identifier that corresponds to OMB control 

no. 1902-0173, which identifies the information collection associated with Standards for 

Business Practices and Communication Protocols for Public Utilities.
Docket No. RM05-5-020 - 34 -

Total Annual Hours for Collection: (Reporting and Recordkeeping, (if appropriate)) = 

186 hours.

Information Collection Costs: The Commission projects the average annualized cost for 

all respondents to be the following:38

FERC-516: 60 hours*$59/hour = $3,540 ($590 per respondent). 

FERC-717: 126 hours*59/hour= $7,434 ($1,239 per respondent).

The following table breaks out the cost by standard:

FERC-516

(Tariff Filing)

FERC-717

(Standards 

Implementation)

Demand Response Standards Capital/Startup Costs $1,416 $3,186

Demand Response Standards Annualized Costs 

(Operations & Maintenance)

N/A N/A

Energy Efficiency Standards Capital/Startup Costs $2,124 $4,248

Energy Efficiency Standards Annualized Costs 

(Operations & Maintenance)

N/A N/A

Demand Response Standards Total Costs $1,416 $3,18639

 38 The Total Annual Cost for information collection is $10,974. This number is 

reached by multiplying the total hours to prepare responses (186) by an hourly wage 

estimate of $59 (a composite estimate of wages plus benefits that includes legal, technical 

and support staff rates. Based on data from the Bureau of Labor Statistics at 

http://bls.gov/oes/current/naics3_221000.htm and 

http://www.bls.gov/news.release/ecec.nr0.htm). (78 hours for demand response 

standards + 108 hours for energy efficiency standards) x $59/hour= $10,974.
Docket No. RM05-5-020 - 35 -

Energy Efficiency Standards Total Costs $2,124 $4,24840

All Standards Total Costs $3,540 $7,434

62. These new information collection requirements are mandatory.

Title: Standards for Business Practices and Communication Protocols for Public Utilities 

(FERC-717); Electric Rate Schedule Filings (FERC-516).

Action: Information collection.

OMB Control No.: 1902-0096 (FERC-516); 1902-0173 (FERC-717).

Respondents: RTO and ISOs.

Frequency of Responses: One-time implementation.

63. Necessity of Information: The Commission’s regulations adopted in this rule 

upgrade the Commission’s current business practices and communication standards by 

standardizing the definitions used by RTOs and ISOs to identify their various energy 

efficiency and demand response products and to measure and verify the results obtained 

by these products. Moreover, the implementation of these data requirements will help 

ensure consistency among the RTOs/ISOs with respect to the measurement and 

verification of energy efficiency and demand response performance in their organized 

wholesale electric markets. 

64. Internal Review: The Commission has reviewed the information collection 

requirements and has determined, as discussed above, that its action in this proceeding is 

 39 We note that 24 hours at $59/hour= $1,416 and 54 hours at $59/hour= $3,186. 

40 We note that 36 hours at $59/hour= $2,124 and 72 hours at $59/hour= $4,248. 
Docket No. RM05-5-020 - 36 -

necessary because this rule increases access to standardized information for participants 

in wholesale energy markets that administer demand response and energy efficiency 

products and services. This rule also facilitates the ability of demand response and 

energy efficiency providers to participate in electricity markets, reducing transaction 

costs and providing an opportunity for more customers to participate in these programs.

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

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

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

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

66. For submitting comments concerning the collection of information and the 

associated burden estimate, please send your comments to the Office of Management and 

Budget, Office of Information and Regulatory Affairs, Washington, DC 20503 

[Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 

395-4718, fax: (202) 395-7285]. For security reasons, comments to OMB should be 

submitted by e-mail to: oira submission@omb.eop.gov. Comments submitted to OMB 

should reference the appropriate OMB Control Number(s) and collection number(s) 

(OMB Control No. 1902-0096 for FERC-516, and/or OMB Control No. 1902-0173 for 

FERC-717). 

VI. Environmental Analysis

67. 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. RM05-5-020 - 37 -

on the human environment.41 The Commission has categorically excluded certain actions 

from these requirements as not having a significant effect on the human environment. 42 

The actions adopted here fall within categorical exclusions in the Commission’s 

regulations for rules that are clarifying, corrective, or procedural, for information 

gathering analysis, and dissemination, and for sales, exchange, and transportation of 

natural gas and electric power that requires no construction of facilities. Therefore, an 

environmental assessment is unnecessary and has not been prepared in this Final Rule. 

VII. Regulatory Flexibility Act

68. The Regulatory Flexibility Act of 1980 (RFA)43 generally requires a description 

and analysis of final rules that will have 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.44 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 

 41 Regulations Implementing National Environmental Policy Act of 1969, Order 

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

1986-1990 ¶ 30,783 (1987).

42 18 CFR 380.4.

43 5 U.S.C. 601-612.

44 13 CFR 121.101.
Docket No. RM05-5-020 - 38 -

electric energy for sale and its total electric output for the preceding twelve months did 

not exceed four million megawatt hours.45

69. The regulations we are incorporating by reference in this Final Rule impose filing 

requirements only on RTOs and ISOs, none of which is a small business. Moreover, 

these requirements are designed to benefit all customers, including small businesses. As 

noted above, adoption of consensus standards helps ensure the reasonableness of the 

standards by requiring that the standards draw support from a broad spectrum of industry 

participants representing all segments of the industry. Because of that representation and 

the fact that industry conducts business under these standards, the Commission’s 

regulations should reflect those standards that have the widest possible support. 

70. Accordingly, pursuant to section 605(b) of the RFA, the Commission hereby 

certifies that the regulations incorporated by reference herein will not have a significant 

impact on a substantial number of small entities.

VIII. Document Availability

71. 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 FERC’s Home Page 

(http://www.ferc.gov) and in FERC’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.

 45 13 CFR 121.201, Sector 22, Utilities & n.1.
Docket No. RM05-5-020 - 39 -

72. 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.

73. 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 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.

IX. Effective Date and Congressional Notification

74. These regulations are effective [insert date 60 days from publication in 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. RM05-5-020 - 40 -

List of subjects in 18 CFR Part 38 

Conflict of interests, Electric power plants, Electric utilities, Incorporation by reference, 

Reporting and recordkeeping requirements.

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.
Docket No. RM05-5-020 - 41 -

In consideration of the foregoing, the Commission amends part 38, 

Chapter I, Title 18, Code of Federal Regulations, as follows.

PART 38 – BUSINESS PRACTICE STANDARDS AND COMMUNICATION 

PROTOCOLS FOR PUBLIC UTILITIES

1. The authority citation for part 38 continues to read as follows:

AUTHORITY: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-

7352.

2. Section 38.2 is amended by revising paragraph (a)(12) and adding paragraph 

(a)(13) to read as follows:

§ 38.2 Incorporation By Reference Of North American Energy Standards Board 

Wholesale Electric Quadrant Standards 

(a) * * *

(12) Business Practices for Measurement and Verification of Wholesale 

Electricity Demand Response (WEQ-015, 2010 Annual Plan Items 4(a) and 4(b), 

March 21, 2011). 

(13) Business Practice Standards for Measurement and Verification of Energy 

Efficiency Products (WEQ-021, 2010 Annual Plan Item 4(d), May 13, 2011). 

* * * * *
Docket No. RM05-5-020 - 42 -

Note: Appendix will not be published in the Code of Federal Regulations.

Appendix

List of Commenters

46

Alliance to Save Energy (Alliance)

American Electric Power Service Corporation (AEP)

DNV KEMA

DR Supporters47

Edison Electric Institute (EEI)

Efficiency Evaluation Organization (EVO)

Electricity Consumers Resource Council (ELCON)

Electric Power Supply Association (EPSA)

Hess Corporation (HESS)

Independent Market Monitor for PJM (PJM IMM)

Industrial Energy Consumers of America (IECA)

ISO/RTO Council (IRC)

John Lynch (Mr. Lynch)

North America Power Partners (NAPP)

New England Conference of Public Utilities Commissioners (NECPUC)

 46 The abbreviations used to identify these commenters in this Final Rule are 

shown parenthetically.

47 DR Supporters include Comverge, Inc., Energy Connect, Inc., Energy 

Curtailment Specialists, Inc., EnerNOC, Inc., and Wal-Mart Stores, Inc.
Docket No. RM05-5-020 - 43 -

New York Transmission Owners (NYTOs)48

Northeast Energy Efficiency Partnerships, Inc. (NEEP)

PSEG Companies (PSEG)49

Southern Company Services, Inc. (Southern)

Viridity Energy, Inc.; EnergyConnect, Inc.; and PJM Industrial Customer Coalition 

(Viridity)

Women’s Energy Matters (WEM)

 48 New York Transmission Owners includes Central Hudson Gas & Electric 

Corporation, Consolidated Edison Company of New York, Inc., Long Island Power 

Authority, New York Power Authority, New York State Electric & Gas Corporation, 

Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation.

49 The PSEG Companies are: Public Service Electric and Gas Company 

(PSE&G), PSEG Power LLC (PSEG Power) and PSEG Energy Resources & Trade LLC 

(PSEG ER&T).