126 FERC ¶ 61,252 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 40 

[Docket Nos. RM08-7-000 and RM08-7-001; Order No. 713-A] 

Modification of Interchange and Transmission Loading Relief Reliability Standards; and 

Electric Reliability Organization Interpretation of Specific Requirements of Four 

Reliability Standards 

(Issued March 19, 2009) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule 

SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the Federal 

Energy Regulatory Commission (Commission) approves Reliability Standard IRO-006-4, 

submitted to the Commission for approval by the North American Electric Reliability 

Corporation (NERC). The Reliability Standard addresses transmission loading relief 

requirements, which provide a mechanism to manage and, if necessary, curtail 

interchange transactions. In addition, pursuant to section 215(d)(5) of the FPA, the 

Commission directs NERC to develop modifications to Reliability Standard IRO-006-4 

to address specific Commission concerns. 

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

publication in the FEDERAL REGISTER]
Docket No. RM08-7-000 ii 

FOR FURTHER INFORMATION CONTACT: 

Patrick Harwood (Technical Information) 

Office of Electric Reliability 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-6125 

patrick.harwood@ferc.gov 

Christopher Daignault (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-8286 

christopher.daignault@ferc.gov 

SUPPLEMENTARY INFORMATION:
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Modification of Interchange and Transmission Loading 

Relief Reliability Standards; and Electric Reliability 

Organization Interpretation of Specific Requirements of 

Four Reliability Standards 

Docket Nos. RM08-7-000 and 

RM08-7-001 

ORDER NO. 713-A 

TABLE OF CONTENTS

 Paragraph Numbers

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

A. Procedural Background............................................................................................ 2.

B. Reliability Standard IRO-006-4 ............................................................................... 6.

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

A. Approval of Reliability Standard IRO-006-4......................................................... 11.

1. Transfer of Business-Related Requirements to NAESB.................................... 15.

2. Improvements to the TLR Procedure ................................................................. 18.

B. Requirement R1...................................................................................................... 22.

1. Use of TLR Procedure in Conjunction with Other Procedures to Mitigate an 

IROL Violation........................................................................................................ 23.

2. Use of TLR Procedure Alone to Mitigate an IROL Violation ........................... 37.

3. Use of Demand-Side Management to Mitigate IROL Violations...................... 41.

C. Violation Risk Factors............................................................................................ 47.

1. Comments........................................................................................................... 48.

2. Commission Determination on Violation Risk Factors...................................... 60.

3. Commission Determination on Violation Severity Levels................................. 71.

III. Information Collection Statement ............................................................................. 74.

IV. Environmental Analysis ............................................................................................ 77.

V. Regulatory Flexibility Act .......................................................................................... 78.

VI. Document Availability .............................................................................................. 79.

VII. Effective Date and Congressional Notification ....................................................... 82.
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Acting Chairman; 

 Suedeen G. Kelly, Marc Spitzer, 

 and Philip D. Moeller. 

Modification of Interchange and Transmission Loading 

Relief Reliability Standards; and Electric Reliability 

Organization Interpretation of Specific Requirements of 

Four Reliability Standards 

Docket Nos. RM08-7-000 

and 

RM08-7-001 

ORDER NO. 713-A 

FINAL RULE 

(Issued March 19, 2009) 

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

 the Commission 

approves Reliability Standard IRO-006-4, submitted to the Commission for approval by 

the North American Electric Reliability Corporation (NERC). The Reliability Standard 

addresses transmission loading relief requirements, which provide a mechanism to 

manage and, if necessary, curtail interchange transactions. In addition, pursuant to 

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

Reliability Standard IRO-006-4 to address specific concerns identified by the 

Commission. 

 1

 16 U.S.C. 824o (2006). 
Docket Nos. RM08-7-000 and RM08-7-001 - 2 - 

I. Background

A. Procedural Background

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

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

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

the transmission loading relief or “TLR” procedure.2

 

3. On April 21, 2008, as supplemented on May 16, 2008, the Commission issued a 

Notice of Proposed Rulemaking (NOPR) that proposed to approve three NERC filings, 

including Reliability Standard IRO-006-4.3

 In response, nine interested persons filed 

comments, six of which address the TLR procedure at issue here.4

 (The Commission 

consolidated three ERO submissions in the RM08-7-000 rulemaking proceeding. This 

Supplemental Final Rule only addresses the ERO’s December 21, 2007 filing pertaining 

 2

 Reliability Standard IRO-006-4 is not codified in the Commission’s regulations 

and is not attached to this Supplemental Final Rule. It is, however, available on the 

Commission’s eLibrary document retrieval system in Docket No. RM08-7-000 and also 

is available on the ERO’s website, http://www.nerc.com. 

3

 Modification of Interchange and Transmission Loading Relief Reliability 

Standards; and Electric Reliability Organization Interpretation of Specific Requirements 

of Four Reliability Standards, Notice of Proposed Rulemaking, 73 FR 22856 (Apr. 28, 

2008), FERC Stats. & Regs. ¶ 32,632, at P 48 (2008) (NOPR), Supplemental Notice of 

Proposed Rulemaking, 73 FR 30326 (May 27, 2008), FERC Stats. & Regs. ¶ 32,635 

(2008) (Supplemental NOPR). 

4

 Appendix A identifies the NOPR commenters. 
Docket Nos. RM08-7-000 and RM08-7-001 - 3 - 

to the TLR Reliability Standard. The Commission addressed the other two ERO filings 

in Order No. 713, i.e., the Final Rule in this proceeding.) 

4. On July 21, 2008, the Commission issued a Final Rule in this proceeding, which 

approved five Reliability Standards and approved NERC’s interpretation of other 

Reliability Standards. 5 The Commission, however, did not make a determination in the 

Final Rule regarding Reliability Standard IRO-006-4 and, instead, directed NERC to 

submit a filing explaining one aspect of the TLR procedure. 

5. On September 11, 2008, NERC submitted a filing as directed in the Final Rule. 

Notice of NERC’s September 11, 2008 filing was published in the Federal Register, 

73 FR 75,429. Three interested persons submitted comments.6

B. Reliability Standard IRO-006-4

6. Reliability Standard IRO-006-4 applies to balancing authorities, reliability 

coordinators, and transmission operators. Reliability Standard IRO-006-4 modifies 

Reliability Standard IRO-006-3, which the Commission approved in Order No. 693.7

 In 

 5

 Modification of Interchange and Transmission Loading Relief Reliability 

Standards; and Electric Reliability Organization Interpretation of Specific Requirements 

of Four Reliability Standards, Order No. 713, 73 FR 43613 (July 28, 2008), 124 FERC 

¶ 61,071 (2008) (Order No. 713 or Final Rule). 

6

 Appendix B identifies the commenters on NERC’s September 11, 2008 filing. In 

addition, NERC filed reply comments. 

7

 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). 
Docket Nos. RM08-7-000 and RM08-7-001 - 4 - 

its December 2007 filing, NERC explained that it modified the TLR procedure to 

“extract” commercial requirements and business practices.8

 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 

interconnection reliability operating limit (IROL).9

7. Reliability Standard IRO-006-4 contains five requirements. Requirement R1 

obligates a reliability coordinator experiencing a potential or actual system operating 

limit (SOL) or IROL violation within its reliability coordinator area to select one or more 

procedures to mitigate potential or actual transmission overloads. The requirement also 

identifies the regional TLR procedures in WECC and ERCOT. Requirement R1 includes 

a warning that the TLR procedure alone is an inappropriate and ineffective tool to 

mitigate an actual IROL violation and provides alternatives. 

 8

 The commercial requirements were transferred to a North American Energy 

Standards Board (NAESB) business practices document. 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, 73 FR 43848 (July 29, 2008), FERC 

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

¶ 61,071 at P 8. 

9

 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. 
Docket Nos. RM08-7-000 and RM08-7-001 - 5 - 

8. Requirement R2 mandates that the reliability coordinator only use local TLR or 

congestion management procedures to which the transmission operator experiencing the 

potential or actual SOL or IROL is a party. 

9. Requirement R3 establishes that a reliability coordinator with a TLR obligation 

from an interconnection-wide procedure follow the curtailments as directed by the 

interconnection-wide procedure. It also requires that a reliability coordinator desiring to 

use a local procedure as a substitute for curtailments as directed by the interconnectionwide procedure must obtain prior approval from the ERO. 

10. Requirement R4 mandates that each reliability coordinator comply with 

interconnection-wide procedures, once they are implemented, to curtail transactions that 

cross interconnection boundaries. Requirement R5 directs balancing authorities and 

reliability coordinators to comply with applicable interchange-related Reliability 

Standards during the implementation of TLR procedures. 

II. Discussion

A. Approval of Reliability Standard IRO-006-4

11. In the NOPR, the Commission proposed to approve IRO-006-4 as just, reasonable, 

not unduly discriminatory or preferential, and in the public interest.10

 10 NOPR, FERC Stats. & Regs. ¶ 32,632 at P 47. 
Docket Nos. RM08-7-000 and RM08-7-001 - 6 - 

12. NERC and IESO support approval of the Reliability Standard. Lafayette and 

LEPA state that they support the Commission’s effort to reduce the use of TLRs; they 

support adoption of the Reliability Standards as proposed by the Commission. 

13. Pursuant to section 215(d) of the FPA, the Commission approves Reliability 

Standard IRO-006-4 as mandatory and enforceable. The ERO’s proposal implements the 

Commission’s directives in Order No. 693 to include a warning that the TLR procedure is 

an inappropriate and ineffective tool to mitigate actual IROL violations and identify 

available alternatives to mitigate an IROL violation.11 Further, as discussed below, the 

Commission believes that the separation of business practices from the Reliability 

Standards will not compromise Bulk-Power System reliability. Accordingly, the 

Commission approves IRO-006-4 as just, reasonable, not unduly discriminatory or 

preferential, and in the public interest, as discussed below. 

14. As a separate matter, pursuant to section 215(d)(5) of the FPA, the Commission 

directs the ERO to develop, pursuant to its Reliability Standards development procedure, 

modifications to IRO-006-4 to address the Commission’s specific concerns, as discussed 

below. Further, the Commission approves the proposed violation risk factors and 

violation severity levels and directs the ERO to submit a filing within 60 days of the 

 11 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 577. 
Docket Nos. RM08-7-000 and RM08-7-001 - 7 - 

effective date of this Supplemental Final Rule revising specified violation risk factors and 

violation severity levels. 

1. Transfer of Business-Related Requirements to NAESB

15. The Commission, in the NOPR, sought comments on whether the removal and 

transfer to NAESB of the business-related issues formerly contained in Reliability 

Standard IRO-006-3 could compromise Bulk-Power System reliability.12

a. Comments

16. NERC states that it has coordinated with NAESB and believes there is no 

compromise in reliability as a result of the removal and transfer to NAESB of the 

business-related issues formerly contained in the earlier standard, IRO-006-3. NERC 

notes that there are minor differences in terminology and language between the NERC 

and NAESB documents. It states that, although these differences may be confusing to 

industry, they do not affect the ability to successfully implement the standards as written. 

Further, NERC indicates that it is working with NAESB to develop more in-depth 

coordination procedures to ensure that language is consistent. 

b. Commission Determination

17. Based on the ERO’s explanation, we are persuaded that the separation of business 

practices from the Reliability Standards will not compromise Bulk-Power System 

reliability. However, we are concerned with respect to the ERO’s acknowledgement that 

 12 NOPR, FERC Stats. & Regs. ¶ 32,632 at P 49. 
Docket Nos. RM08-7-000 and RM08-7-001 - 8 - 

there are differences in terminology and language used between the ERO Reliability 

Standard and the NAESB standard that pertain to TLR procedures. The ERO indicates 

that it is currently working with NAESB to develop more in-depth coordination 

procedures to ensure that language is consistent. Thus, we expect that the ERO, working 

with NAESB, will resolve the inconsistencies in terminology between the Reliability 

Standard and NAESB standard regarding TLR procedures as their agendas permit; we do 

not find a need to direct changes at this time. 

2. Improvements to the TLR Procedure

a. Comments

18. Several commenters raise concerns regarding needed improvements to the TLR 

procedure. Lafayette and LEPA comment that they have often “suffered” from the 

curtailment of firm transmission service pursuant to the TLR procedure and support 

efforts to reduce its use. NRG comments that the excessive use of TLRs is reducing 

system reliability in some non-organized markets and that the Commission should require 

NERC to modify its TLR rules to limit the excessive use of TLRs. NRG states that the 

Interchange Distribution Calculator (IDC) is critical to the TLR process,13 since 

reliability coordinators rely on the curtailments specified by the IDC. NRG identifies two 

 13 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 Nos. RM08-7-000 and RM08-7-001 - 9 - 

significant problems with the IDC that IRO-006-4 does not address: (1) the generation 

and load data relied on by the IDC is static, with no requirement that it be regularly 

updated or accurately reflect real-time conditions; and (2) the IDC methodology does not 

curtail certain schedules or determine native network load obligations accurately in some 

cases, leading to a discriminatory assignment of reliability obligations. NRG urges the 

Commission to direct NERC to modify the IDC to base its curtailment decisions on 

accurate native load information and to base them consistently on local load and 

generation amounts. 

19. Further, NRG states that there is a gap in the proposed TLR procedures that allows 

certain non-firm transactions to escape curtailment prior to the issuance of a Level 5 TLR 

(i.e., curtailment of firm transactions and firm native load). NRG reiterates its concerns 

in its comments on NERC’s September 11, 2008 filing in this proceeding. 

20. ISO/RTO Council suggests that the Commission clarify that, although TLR should 

not be ruled out as a congestion management tool, NERC should address the use of more 

sophisticated tools to respond to the impacts that loop flow and the lack of transparency 

in non-RTO regions can have on congestion management at the “seams.” 

b. Commission Determination

21. 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 
Docket Nos. RM08-7-000 and RM08-7-001 - 10 - 

directives set forth in Order No. 693.14 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.”15 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.16 

B. Requirement R1

22. Requirement R1 of IRO-006-4 provides, in part: 

R1. A Reliability Coordinator experiencing a potential or actual SOL or 

IROL violation within its Reliability Coordinator Area shall, with its 

authority and at its discretion, select one or more procedures to provide 

transmission loading relief. These procedures can be a “local” (regional, 

interregional, or sub-regional) transmission loading relief procedure or one 

of the following Interconnection-wide procedures: 

 14 NERC’s comments in reply to NRG, as well as Constellation’s and, in their joint 

supplemental pleading, Lafayette and LEPA’s comments relating to the TLR procedure 

are likewise beyond the scope of this proceeding. 

15 NERC December 21, 2007 Filing at 7. Moreover, pursuant to the ERO’s Rules 

of Procedure, a commenter can submit a Standard Authorization Request to the ERO to 

propose revisions to a Reliability Standard. 

16 See NERC September 11, 2008 Response at 10. 
Docket Nos. RM08-7-000 and RM08-7-001 - 11 - 

 R1.1 The Interconnection-wide Transmission Loading Relief (TLR) 

procedure for use in the Eastern Interconnection is provided in Attachment 

1-IRO-006-4. The TLR procedure alone is an inappropriate and ineffective 

tool to mitigate an IROL violation due to the time required to implement 

the procedure. Other acceptable and more effective procedures to mitigate 

actual IROL violations include: reconfiguration, redispatch, or load 

shedding. 

Below, we address three concerns regarding Requirement R1: (1) use of the TLR 

procedure in conjunction with other procedures to mitigate an IROL violation; (2) use of 

the TLR procedure to mitigate an actual IROL violation is a violation of the Reliability 

Standard; and (3) use of demand-side management as an effective procedure to mitigate 

IROL violations. 

1. Use of TLR Procedure in Conjunction with Other Procedures to 

Mitigate an IROL Violation

a. Final Rule Discussion

23. In the Final Rule, the Commission did not approve or remand IRO-006-4 but 

rather directed the ERO to submit a filing addressing the Commission’s concerns 

regarding Requirements R1 and R1.1 of the Reliability Standard.17 Specifically, the Final 

Rule explained that, consistent with the Final Blackout Report,

18 Order No. 693 directed 

 17 Order No. 713, 124 FERC ¶ 61,071 at P 46-50. 

18 See U.S.-Canada Power System Outage Task Force, Final Report on the August 

14, 2003 Blackout in the United States and Canada: Causes and Recommendations, at 

163 (April 2004) (Final Blackout Report), available at

http://www.ferc.gov/industries/electric/indus-act/blackout.asp. Recommendation 31 of 

the report provides that NERC should “[c]larify that the [TLR] process should not be 

used in situations involving an actual violation of an Operation Security Limit.”
Docket Nos. RM08-7-000 and RM08-7-001 - 12 - 

NERC to develop a modification to the TLR procedure that the Commission accepted in 

IRO-006-3 that “(1) includes a clear warning that the TLR procedure is an inappropriate 

and ineffective tool to mitigate actual IROL violations and (2) identifies in a Requirement 

the available alternatives to mitigate an IROL violation other than use of the TLR 

procedure.”19 

24. In its December 2007 filing, NERC stated that it modified the Reliability Standard 

in response to the Order No. 693 directive. In particular, the ERO modified Requirement 

R1.1 of IRO-006-4 to provide that “[t]he TLR procedure [for the Eastern 

Interconnection] alone is an inappropriate and ineffective tool to mitigate an IROL 

violation due to the time required to implement the procedure.” (Emphasis added.) 

25. In Order No. 713, the Commission queried whether the language of Requirements 

R1 and R1.1 are adequate to satisfy the concern of the Final Blackout Report and Order 

No. 693 that the TLR procedure not be used in response to an actual IROL violation. The 

Commission explained: 

An entity is not prevented from using the TLR procedure to avoid a 

potential IROL violation before a violation occurs. If, while a TLR 

procedure is in progress, an IROL violation occurs, it is not necessary for 

the entity to terminate the TLR procedure. However, the Commission 

believes that it is inappropriate and ineffective to rely on the TLR 

procedure, even in conjunction with another tool, to address an actual IROL 

violation.[20] 

 19 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 577, 964. 

20 Order No. 713, 124 FERC ¶ 61,071 at P 49. 
Docket Nos. RM08-7-000 and RM08-7-001 - 13 - 

Accordingly, the Commission directed the ERO to explain Requirements R1 and R1.1 of 

IRO-006-4 in light of this concern.

b. NERC Responsive Filing

26. NERC responds that the most immediate reliability goal is the mitigation of the 

IROL violation. NERC states that there are four acceptable options to respond to an 

IROL violation: inter-area redispatch, intra-area redispatch, reconfiguration of the 

transmission system, and voluntary or involuntary reductions in load. According to 

NERC, Requirement R1.1 of IRO-006-4 identifies these options as “reconfiguration, 

redispatch, or load shedding.” 

27. Further, NERC believes that taking concurrent action, i.e., using TLR in 

conjunction with one of the above operation actions, “can result in positive outcomes.” 21 

NERC agrees with the Commission that the use of TLR prior to an actual IROL violation 

is an acceptable practice. NERC also agrees that a TLR should not be terminated 

following the occurrence of an IROL violation if the TLR procedure was already in 

progress. However, NERC points out that it is impossible to decouple the TLR actions of 

the previous hour from those of the current hour. According to NERC, the progressive 

nature of TLR requires constant management to ensure that reliability and open access 

are maintained. NERC maintains that the Commission should endorse a situation where, 

 21 NERC September 11, 2008 Response at 4. 
Docket Nos. RM08-7-000 and RM08-7-001 - 14 - 

on a continuing basis, a TLR can be reissued for a constrained facility in order to assist in 

providing relief, in addition to the more immediate operator actions taken to alleviate the 

actual overload. NERC disagrees that all interchange transactions should be frozen at 

current levels while any new transactions are held, because this could result in 

aggravation of the IROL violation from an increase in native load and/or parallel flows. 

For similar reasons, NERC also believes it is inappropriate to let the curtailments issued 

for the current hour expire and not reissue the TLR, because this practice also could 

aggravate the IROL violation, as the single-hour established curtailments would expire 

and transactions would be reloaded. 

28. NERC avers that the intent of the Commission’s directive is that, should an entity 

experience an actual IROL violation, that entity should not invoke the TLR process with 

the belief that the IROL violation will be mitigated by the TLR within an acceptable 

timeframe. NERC contends, however, that any standard that would require a reliability 

coordinator to explicitly not use TLR as one of the tools it has in responding to an actual 

IROL violation could compromise reliability, open access, or both. NERC states that it is 

appropriate for an entity to use the TLR process in response to an actual IROL, provided 

such use is a complementary action to other operator actions employed to mitigate the 

IROL violation more expeditiously and, as such, invoking TLR is not the only action 

taken. 
Docket Nos. RM08-7-000 and RM08-7-001 - 15 - 

29. NERC provides examples of use of TLR in conjunction with other acceptable 

options to provide a more rapid and effective return from emergency conditions. For 

example, NERC states that if an entity redispatches generation and invokes a TLR at the 

same time in response to an actual IROL violation, that entity may utilize the generation 

to respond immediately to mitigate the violation and bring the flow below the IROL, then 

reduce the generation once the TLR is able to effectively and more equitably address the 

issue. 

c. Comments on NERC Responsive Filing

30. Southern agrees with NERC’s explanation regarding the ways in which a 

reliability coordinator may use the TLR procedure. Southern believes that the TLR 

procedure, when used in conjunction with reconfiguration, redispatch, or load shedding, 

is an indispensable means for providing relief for constrained facilities. Southern 

comments that any revision to Reliability Standard IRO-006-4 should be developed 

through the Reliability Standards development process. 

31. ISO/RTO Council comments that it generally agrees with the sequencing of TLR 

procedures as explained by NERC. While ISO/RTO Council supports limiting the widescale use of TLR as a congestion management tool, it believes that the Commission’s 

interpretation may draw too fine a line in “hard wiring” a particular sequence of the use 

of TLRs. It agrees with NERC that “it is impossible to decouple the actions of the 
Docket Nos. RM08-7-000 and RM08-7-001 - 16 - 

previous hour from those of the current hour,” and urges the Commission to avoid 

placing artificial barriers in the sequencing of the use of the TLR procedure. 

d. Commission Determination

32. The Commission is satisfied with the ERO’s response. We agree with the ERO 

that acceptable immediate actions to mitigate an IROL violation may include one or more 

of the following: inter-area redispatch, intra-area redispatch of generation, 

reconfiguration of the transmission system, and voluntary or involuntary load reductions. 

When an IROL violation occurs, the reliability coordinator should use the above tools 

appropriate to the circumstance and duration of the actual IROL violation for mitigation. 

33. We understand from its explanation that the ERO agrees that use of the TLR 

procedure is not one of the acceptable immediate actions to mitigate an IROL violation. 

Rather, use of the TLR procedure is complementary to, and may be used in conjunction 

with, the identified tools to mitigate an IROL violation, provided that the action to 

implement the TLR procedure does not interfere with or delay an entity taking the 

immediate action required to mitigate the IROL violation.22 The Commission 

understands this is the intent of the language in Requirement R1.1 that “[t]he TLR 

 22 The ERO states that “it is appropriate for an entity to use the TLR process in 

response to an actual IROL, provided that it is a complementary action to other operator 

actions employed to mitigate the IROL violation more expeditiously and, as such, 

invoking TLR is not the only action taken.” NERC September 11, 2008 Response at 5 

(emphasis added). 
Docket Nos. RM08-7-000 and RM08-7-001 - 17 - 

procedure alone is an inappropriate and ineffective tool to mitigate an IROL violation due 

to the time required to implement the procedure.” 

34. The Commission reiterates that the use of a TLR is not required to be terminated 

following the occurrence of an IROL violation if the TLR procedure was already in 

progress prior to exceeding the IROL. Thus, if an IROL is exceeded after a TLR 

procedure is in progress, the reliability coordinator does not need to revoke the TLR. 

Moreover, in the event that a potential IROL violation progresses to an actual IROL 

violation near the top of the hour and a TLR is already in progress, it is acceptable for the 

reliability coordinator to reissue the TLR to prevent reloading or exacerbating 

interchange schedules, while more immediate actions are taken to relieve the IROL 

violation. 

35. During an actual IROL violation, the primary concern of the reliability coordinator 

should be to mitigate the violation immediately. Because the TLR procedure may take an 

extended time to fully implement, it is not acceptable for a reliability coordinator to 

invoke the TLR process with the belief that the IROL violation will be mitigated by the 

TLR. Therefore, during an actual IROL violation, a reliability coordinator should initiate 

more immediate actions to relieve the IROL violation before initiating a TLR and at no 

point should implementing a TLR divert operator resources or delay implementation of 

more immediate IROL mitigation actions. In accord with this understanding, we find 

Requirement R1.1 consistent with the Final Blackout Report and Order No. 693. 
Docket Nos. RM08-7-000 and RM08-7-001 - 18 - 

36. As discussed above, based on the ERO’s response we believe that our 

understanding of Requirement R1.1 comports with that of the ERO. While IRO-006-4, 

Requirement R1.1, should be implemented and enforced with the above understanding, 

we believe that the term “alone” in the provision could be improved to more precisely 

convey that it is a violation of Requirement R1.1 to rely on the TLR procedure when an 

entity is in the process of mitigating an IROL violation and the entity has not taken more 

immediate and effective means to achieve relief. 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. 

2. Use of TLR Procedure Alone to Mitigate an IROL Violation

37. In the NOPR, the Commission proposed to approve the Reliability Standard based 

on the interpretation that using a TLR procedure alone to mitigate an actual IROL 

violation is a violation of the Reliability Standard.23

a. Comments

38. ISO/RTO Council objects to the Commission’s proposal to approve the proposed 

Reliability Standard IRO-006-4 based on the interpretation that using a TLR alone to 

mitigate an IROL violation is a violation of the Reliability Standard. ISO/RTO Council 

expresses concern that the ERO has procedures for interpreting Reliability Standards and 

those procedures may be eroded through after-the-fact Commission interpretation without 

 23 NOPR, FERC Stats. & Regs. ¶ 32,632 at P 48. 
Docket Nos. RM08-7-000 and RM08-7-001 - 19 - 

the opportunity for NERC stakeholder review. ISO/RTO Council urges greater deference 

to following the Commission-approved NERC process for the interpretation of Reliability 

Standards. Should that process prove too time-consuming, ISO/RTO Council suggests 

that the Commission revisit the process itself rather than undertaking de facto

amendments to it by interpreting the Reliability Standard in ways not addressed through 

the NERC stakeholder process. 

b. Commission Determination

39. This issue raised in the NOPR is somewhat overtaken by the further Commission 

inquiry in the Final Rule regarding the appropriate tools for mitigating an IROL violation 

and our discussion immediately above on this issue. As we state above, IRO-006-4, 

Requirement R1.1, should be “implemented and enforced” based on our understanding in 

this order of the issue. 

40. In any case, we adopt our NOPR proposal and approve Reliability Standard IRO006-4 with the understanding that using a TLR procedure to mitigate an actual IROL 

violation is a violation of the Requirement R1.1 of the Reliability Standard, as discussed 

above. While ISO/RTO Council raises procedural concerns regarding the Commission’s 

interpretation, neither ISO/RTO Council nor any other commenter expresses concern 

regarding the substance of the Commission’s interpretation. Further, the Commission 
Docket Nos. RM08-7-000 and RM08-7-001 - 20 - 

previously has determined—or interpreted—when a violation of a Reliability Standard 

would occur.24 

3. Use of Demand-Side Management to Mitigate IROL Violations

41. In a joint concurrence to the NOPR, then-Commissioner Wellinghoff and 

Commissioner Kelly noted that demand-side management is not explicitly included in 

Requirement R1.1 of IRO-006-4 among the acceptable tools to mitigate an IROL 

violation. The concurrence noted that nothing in the Reliability Standard precludes the 

use of demand-side management that can quickly respond to emergencies and discussed 

available demand-side management technologies currently used that may be deployed as 

readily, if not faster, than involuntary load shedding. The joint concurrence expressed a 

preference to expressly include demand-side management among the list of tools to 

mitigate IROL violations, set forth in Requirement R1.1. 

a. Comments 

42. NERC comments that it did not intend the list of tools in Requirement R1.1 for 

addressing IROL violations to be an exhaustive list; effective demand-side response 

could also be considered. 

43. Alcoa comments that demand-side management should be included in the list of 

alternatives to the TLR procedure in IRO-006-4. Alcoa claims that its smelters have 

 24 N. Am. Elec. Reliability Corp., 119 FERC ¶ 61,321, at P 10 (2007) (“A 

vegetation-related transmission outage would result in a violation of Requirement R1, R2 

or both.”). 
Docket Nos. RM08-7-000 and RM08-7-001 - 21 - 

demonstrated an ability to curb demand to assist in TLR efforts and alleviate IROL 

violations. In addition, Alcoa claims that in some instances load may be able to respond 

to IROL violations more quickly and effectively than generation reserves. According to 

Alcoa, flexible loads served at transmission voltages are most effective for immediate 

demand response to IROL violations. 

44. ISO/RTO Council comments that IRO-006-4 does not preclude reliance on 

demand-side management that can respond quickly to emergencies. It believes that the 

Reliability Standards should be resource-neutral in their application. ISO/RTO Council 

states that, consistent with Order No. 693, so long as a resource can address system 

conditions, it should be recognized in the Reliability Standards as a tool upon which the 

system operator can rely. ISO/RTO Council also notes initiatives by NERC and NAESB 

to develop rules for classifying demand-side management and identifying methods for 

measurement and verification. 

b. Commission Determination

45. It is clear from the comments of the ERO, Alcoa, and ISO/RTO Council that the 

Reliability Standard includes effective demand-side management as a tool to mitigate an 

IROL violation pursuant to Requirement R1.1 of IRO-006-4. In its September 11, 2008 

filing, the ERO states that there are four acceptable options to respond to an IROL 

violation: inter-area redispatch, intra-area redispatch, reconfiguration of the transmission 

system, and voluntary or involuntary reductions in load. The ERO further explains that 
Docket Nos. RM08-7-000 and RM08-7-001 - 22 - 

the reference in Requirement R1.1 to “load shedding” refers to voluntary or involuntary 

reductions in load.25 Thus, as clarified by NERC, Requirement R1.1 allows the use of 

effective demand-side management as one tool to mitigate an IROL violation. The 

Commission will implement and enforce this Reliability Standard as clarified by NERC. 

C. Violation Risk Factors

46. In the NOPR, the Commission proposed to direct the ERO to modify the violation 

risk factors assigned to Requirements R1 through R4 by raising them to “high.” This 

proposal was based on the Commission’s guidelines for evaluating validity of violation 

risk factor assignments.26 In particular, the Commission reasoned that a “high” violation 

risk factor assignment for Requirements R1 through R4 is consistent with findings of the 

Final Blackout Report.

27

 25 NERC September 11, 2008 Response at 4. 

26 The guidelines are: (1) consistency with the conclusions of the Blackout 

Report; (2) consistency within a Reliability Standard; (3) consistency among Reliability 

Standards; (4) consistency with NERC’s definition of the violation risk factor level; and 

(5) treatment of requirements that co-mingle more than one obligation. The Commission 

also explained that this list was not necessarily all-inclusive and that it retains the 

flexibility to consider additional guidelines in the future. A detailed explanation is 

provided in North American Electric Reliability Corp., 120 FERC ¶ 61,145, at P 8-13 

(2007). 

27 Recommendation 31 states, “Clarify that the transmission loading relief (TLR) 

process should not be used in situations involving an actual violation or an Operation 

Security Limit.” Final Blackout Report at 163. 
Docket Nos. RM08-7-000 and RM08-7-001 - 23 - 

1. Comments

47. NERC, IESO, and ISO/RTO Council urge the Commission to adopt the violation 

risk factors proposed by NERC. NERC contends that the Commission’s reliance on the 

violation risk factors for IRO-006-3, Requirements R1 through R4, submitted in 2007 is 

not appropriate.28 NERC explains that the violation risk factors submitted in the current 

proceeding for IRO-006-4 received significant industry review and scrutiny, which was 

not the case with the 2007 submission. 

a. Violation Risk Factors for Requirement R1

48. NERC agrees with the Commission that Requirements R1.1 through R1.3 are 

explanatory text and that a violation risk factor need not be assigned to each subsection. 

However, NERC, ISO/RTO Council, and IESO disagree with the Commission’s proposal 

to direct the ERO to raise the violation risk factor from “medium” to “high.” 

49. Specifically, NERC and ISO/RTO Council disagree with the Commission’s 

statement that a “high” violation risk factor assignment is consistent with the findings of 

the Final Blackout Report. According to NERC, the main thrust of Recommendation 31 

in the Final Blackout Report (regarding the use of TLR in response to actual violations) 

has been addressed in Requirement R1.1 of the Reliability Standard and does not warrant 

a “high” violation risk factor designation. ISO/RTO Council contends that the Final 

 28 See NOPR, FERC Stats. & Regs. ¶ 32,632 at P 51 (noting that the 

corresponding requirements in the earlier Commission-approved version of the 

Reliability Standard were assigned a “high” violation risk factor). 
Docket Nos. RM08-7-000 and RM08-7-001 - 24 - 

Blackout Report does not identify and rank the associated risk of not implementing each 

recommendation. ISO/RTO Council claims that the Final Blackout Report

Recommendation 31 simply focuses on reliability coordinators using tools other than 

TLRs for a real-time emergency. 

50. Further, NERC contends that IRO-006-4, Requirement R1 and its subrequirements are procedural in nature, because they focus on how relief is achieved rather 

than on whether relief is achieved. NERC recognizes that “the result of an ineffective 

application of this requirement could impact the electrical state of the grid.”29 However, 

NERC posits that IRO-005-1, Requirement R5 is the principal source of the reliability 

coordinator’s obligation to relieve actual or potential IROL violations. For these reasons, 

NERC believes Requirement R1 merits a “medium” violation risk factor. 

51. IESO agrees with NERC’s assessment that Requirement R1 is administrative in 

nature. IESO states that Requirement R1 provides the initiating reliability coordinator 

options from which to choose to relieve transmission constraints, and it becomes a 

reliability requirement only when a reliability coordinator chooses an interconnectionwide procedure as one of the means to relieve transmission constraints. IESO explains 

that if a reliability coordinator chooses other control actions but not an interconnectionwide TLR procedure to prevent or mitigate an IROL violation, this Reliability Standard 

 29 NERC Comments at 19. Unless otherwise indicated, citations to parties’ 

comments refer to comments filed after the NOPR, prior to the Final Rule. 
Docket Nos. RM08-7-000 and RM08-7-001 - 25 - 

will not apply, and the reliability coordinator will not be subject to the requirements in 

the standard. Further, IESO contends that if a reliability coordinator chooses to apply an 

interconnection-wide procedure and the requirements stipulated therein are not complied 

with, there is a potential risk on the control and operation of the system, because noncompliance with the TLR procedure may affect other actions that are also being applied 

to prevent or mitigate an IROL violation. 

52. IESO and ISO/RTO Council disagree with the Commission’s statement that, if the 

reliability coordinator chooses an unapproved and ineffective procedure for relief or fails 

to choose a procedure entirely, potential or actual IROL violations will not be mitigated 

as intended by the reliability coordinator.30 According to IESO and ISO/RTO Council, 

with or without the interconnection-wide relief procedure, reliability coordinators and 

transmission operators are required by other Reliability Standards such as TOP-002, 

TOP-004, and IRO-005 to apply local control actions and procedures to prevent and 

mitigate SOL and IROL violations. 

53. ISO/RTO Council also favors a “medium” violation risk factor assignment for 

Requirement R1, stating that interconnection-wide procedures are only one tool in the 

toolbox to restore system integrity. 

 30 See NOPR, FERC Stats. & Regs. ¶ 32,632 at P 52. 
Docket Nos. RM08-7-000 and RM08-7-001 - 26 - 

b. Violation Risk Factors for Requirement R2

54. NERC does not believe that a reliability coordinator could successfully implement 

a local procedure to which the particular transmission operator is not a party. In any 

event, NERC does not believe that the implementation of such a procedure would in itself 

create a “high” reliability risk. NERC states that if the reliability coordinator were able to 

achieve the relief, then it would be considered as having the lesser infraction of using the 

wrong tools to achieve the correct results. Further, it states that if such a procedure did 

not provide the required relief, the reliability coordinator would be in violation of IRO005-1, Requirement R5. NERC claims this requirement is focused on “how” the relief is 

provided, not “whether” the relief is provided. In addition, NERC states that the use of a 

local procedure is implemented at the discretion of the reliability coordinator and is not 

obligatory. Accordingly, NERC believes that a violation risk factor of “lower” is 

appropriate. 

55. IESO argues the intent of Requirement R2 is to ensure that a reliability 

coordinator who initiates actions to relieve transmission constraints in a transmission 

operator’s area applies the actions that are either totally local to the transmission 

operator’s area or which have been developed by the transmission operator jointly with 

other transmission operators. IESO states that choosing which procedures to relieve 

transmission constraints is an administrative requirement since the reliability coordinator, 

having the authority to ensure wide area reliability, may apply any procedures that it 
Docket Nos. RM08-7-000 and RM08-7-001 - 27 - 

deems necessary to relieve transmission constraints. IESO contends that in the event the 

reliability coordinator applies a relief procedure to which the constrained transmission 

operator is not a party, it should not be a presumption that prevention or mitigation of an 

IROL violation will not be achieved since the reliability coordinator is obligated to 

ensure operating reliability through compliance with IRO-005-1. For these reasons, 

IESO believes that Requirement R2 is administrative and deserves a “lower” violation 

risk factor. 

56. IESO disagrees with the Commission assessment that “[v]iolation risk factors 

should not be assigned differently for requirements in separate Reliability Standards 

based on compliance with another Reliability Standard,” on the basis that “[t]wo 

requirements either achieve separate reliability goals and, therefore, violation of them 

represents independent risks, or two requirements share the same reliability goal.”31 

IESO states that, while the IRO-005-1 requirements and the TLR requirements share the 

same reliability goal, the latter is in fact subordinate to the former. Thus, IESO maintains 

that there should not be two simultaneous “high” risk penalties assessed for a reliability 

coordinator for failing to comply with the TLR procedure of Requirements R1 or R2 and

for failing to prevent or mitigate an IROL violation as required in IRO-005-1. 

 31 IESO Comments at 8 (quoting NOPR, FERC Stats. & Regs. ¶ 32,632 at P 53). 
Docket Nos. RM08-7-000 and RM08-7-001 - 28 - 

c. Violation Risk Factors for Requirement R3

57. NERC maintains that Requirement R3 is focused on the procedural aspects of the 

Reliability Standard, i.e., how the relief is provided rather than whether the relief was 

provided. NERC argues that if the entity is able to achieve the relief through other means 

that were not pre-approved, then it would have committed an administration violation of 

using the wrong tools to achieve the correct results. According to NERC, if such a 

procedure did not provide the required relief, the reliability coordinator would be in 

violation of IRO-005-1, Requirement R5. For reasons similar to those provided for 

Requirement R2, IESO agrees with NERC that Requirement R3 is administrative and 

deserves a “lower” violation risk factor. 

d. Violation Risk Factors for Requirement R4

58. NERC claims that a violation of Requirement R4 is “a specific kind of violation of 

the INT family of Reliability Standards that is being caused by a reliability coordinator’s 

inaction, resulting in an imbalance in one or both of the interconnections involved.”32 

NERC comments that Requirement R4 complements the INT group of Reliability 

Standards in the same fashion as Requirement R5, which the Commission supported with 

a violation risk factor of “medium.” IESO concurs with NERC’s assignment of a 

“medium” violation risk factor to Requirement R4. IESO reasons that complying with 

the provisions of the interconnection-wide procedure of the initiating reliability 

 32 NERC Comments at 21-22. 
Docket Nos. RM08-7-000 and RM08-7-001 - 29 - 

coordinator is no more stringent than complying with the request for relief based on the 

TLR procedure within the same interconnection, the latter being the requirement in R1. 

2. Commission Determination on Violation Risk Factors

59. For the reasons stated in the NOPR and as discussed below, the Commission 

directs the ERO to modify the violation risk factors of Requirements R1 through R4 of 

IRO-006-4 to “high.” 

60. The Commission disagrees with NERC and others and finds that it is appropriate 

to use the Final Blackout Report as a basis for setting violation risk factors of the 

proposed Reliability Standard at “high” for several reasons. The Final Blackout Report is 

the result of the U.S-Canada Task Force’s investigation of the August 14, 2003 blackout 

where the Task Force identified contributing factors and causes that put the Bulk-Power 

System at risk for that event. Specifically, the Final Blackout Report identified an 

attempt to use the TLR process to address transmission power flows without recognizing 

that the imposition of a TLR procedure would not solve the problem as one contributing 

cause for the initiation of the blackout of August 2003. Based on its findings, the Task 

Force developed recommendations to reduce the possibility of future outages and to 

reduce the scope of future blackouts that may nonetheless occur.33 Thus, the Task Force 

developed Recommendation No. 31 to prevent the initiation of a TLR procedure during 

 33 Final Blackout Report at 20. 
Docket Nos. RM08-7-000 and RM08-7-001 - 30 - 

an actual violation of an SOL.34 Since the Final Blackout Report was developed to 

document the August 14, 2003 blackout’s contributing factors and causes, which include 

specific violations of then voluntary reliability policies, guidelines, and standards, the 

Commission believes it is appropriate to use the findings of the Final Blackout Report as 

one of the guidelines for the determination of a requirement’s violation risk factor. 

Specifically, the Commission believes the findings of the Final Blackout Report are 

particularly relevant in the determination of violation risk factors of then-voluntary 

reliability policies, guidelines, and standards identified as causes and factors of the 

August 14, 2003 blackout that the ERO proposes as mandatory Reliability Standards, 

such as IRO-006-4. The Commission also disagrees for the same reasons with 

commenters that argue the Final Blackout Report does not identify and rank the 

associated risk of not implementing each recommendation. 

61. While we agree that Requirement R.1.1 discourages the use of a TLR to mitigate a 

real-time IROL violation, Requirement R1.1, is merely explanatory text. It is 

Requirement R1 that establishes that the reliability coordinator shall choose one or more 

of the procedures, listed as sub-requirements, to provide the appropriate transmission 

relief. The selection of a procedure to provide relief to address a potential or actual SOL 

or IROL violation is directly relevant to Final Blackout Report Recommendation No. 31. 

 34 Id. at 163. 
Docket Nos. RM08-7-000 and RM08-7-001 - 31 - 

If an inappropriate procedure is selected in an attempt to mitigate an IROL, the BulkPower System is vulnerable to cascading outages, as was the case on August 14, 2003. 

62. The Commission is not persuaded by NERC’s argument relative to “using the 

wrong tools to achieve the correct results” in the assignment of a requirement’s violation 

risk factor. Contrary to this argument, the Commission has recognized that there may be 

some Reliability Standards where the means, or the “how,” is inextricably linked to the 

effectiveness of the Reliability Standard.35 We find that this is the case here. The 

Commission has explained that the inclusion of implementation practices within 

requirements of such a standard is to reduce uncertainty and further objectives that foster 

reliability which, if violated, would pose increased reliability risk to the Bulk-Power 

System.36

63. Similarly, NERC’s argument that, if the reliability coordinator were able to 

achieve the relief desired without complying with Requirement R1, it would be 

considered as having the lesser infraction of using the wrong tools to achieve the correct 

results is also flawed. The purpose of the violation risk factor is to accurately portray the 

 35 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, at P 260; see also id., Order 

No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006). 

36 N. Am. Elec. Reliability Corp., 121 FERC ¶ 61,179, at P 15 (2007). 
Docket Nos. RM08-7-000 and RM08-7-001 - 32 - 

risk a violation poses to the Bulk-Power System,37 notwithstanding a violator’s avoidance 

of reliability problems in a particular case by using an unreliable operation. This 

Commission determination is relevant to arguments that a “high” violation risk factor is 

not appropriate because the subject requirement overlaps other requirements, duplicates 

other requirements, or could be implemented by alternative means. The Commission has 

previously determined that NERC should address those issues through the Reliability 

Standard development process.38

64. The Commission also disagrees with the characterization of Requirements R1, R2, 

and R3 as procedural choices without reliability-related consequences. For example, 

failure to implement Requirement R1, i.e., failure to select one or more procedures to 

provide transmission relief, is not just a procedural or administrative choice; it is a 

decision that has the potential to place the Bulk-Power System at risk of cascading 

outages. Although commenters argue that a violation of Requirement R2 is essentially 

administrative in nature and that the prevention or mitigation of the potential or actual 

SOL or IROL may be achieved through compliance with another Reliability Standard, 

which would justify a “lower” violation risk factor, the Commission disagrees. 

Requirements R1 through R4 require that a reliability coordinator choose and follow the 

 37 Id. P 16. 

38 Id. P 39. 
Docket Nos. RM08-7-000 and RM08-7-001 - 33 - 

appropriate procedure to provide relief. If the reliability coordinator chooses an 

unapproved and/or ineffective procedure for relief or fails to choose a procedure entirely, 

potential or actual IROL violations will not be mitigated as intended by the reliability 

coordinator. Therefore, the Commission finds that violation of Requirements R1 through 

R4 present a high reliability risk to Bulk-Power System. Assigning a “high” violation 

risk factor to Requirements R1 through R4 is consistent with the Final Blackout Report. 

65. A violation risk factor represents the reliability risk a violation of that requirement 

presents to the Bulk-Power System. Violation risk factors should not be assigned 

differently for requirements in separate Reliability Standards based on compliance with 

another standard. This assessed reliability risk is independent and not contingent upon 

compliance with other requirements of Reliability Standards. While the Commission 

recognizes the complementary nature of proposed Reliability Standard IRO-006-4, 

Requirement R1 and Reliability Standard IRO-005-1, Requirement R5, the fact that 

requirements may share the same reliability objective as another requirement does not 

justify lowering one or more of the requirements’ violation risk factors. In fact, the 

Commission expects the assignment of violation risk factors corresponding to 

requirements that address similar reliability goals in different Reliability Standards to be 
Docket Nos. RM08-7-000 and RM08-7-001 - 34 - 

treated comparably.39 The Commission notes that Reliability Standard IRO-005-1, 

Requirement R5, is assigned a “high” violation risk factor. 

66. Further, the argument that a “lower” violation risk factor assigned to Requirement 

R1 is appropriate since Requirement R1 is administrative in nature (because it provides 

the initiating reliability coordinator with options to choose among available procedures 

and only becomes a reliability requirement when a reliability coordinator chooses an 

interconnection-wide procedure) is flawed. First, the fact that a requirement provides 

“options” does not automatically make that requirement administrative. It is the potential 

reliability risks the failure to take options mandated by the requirement presents to the 

Bulk-Power System that determines that requirement’s violation risk factor. Second, 

requirements become mandatory and enforceable reliability requirements only after 

Commission approval and not after any action, or inaction, by an applicable entity. 

67. For the same reasons explained above, the Commission disagrees with comments 

that Requirement R3 focuses on procedural aspects of the Reliability Standard founded 

on the arguments that the requirement related to “how” the relief is provided rather than 

“whether” the relief was provided, where the “wrong tools” were used to achieve the 

“correct results.” Even if an entity, having violated a Reliability Standard, achieves 

 39 N. Am. Elec. Reliability Corp., 119 FERC ¶ 61,145, at P 25 (2007). 
Docket Nos. RM08-7-000 and RM08-7-001 - 35 - 

correct results, the entity’s success should be attributed to a matter of chance and may be 

more risky than the operation set forth in the Reliability Standard. 

68. IESO’s comment that there should not be two simultaneous “high” risk penalties 

assessed to a reliability coordinator who fails to comply with the TLR procedure of 

Requirements R1 and R2 is outside the scope of this proceeding. The determination of 

monetary penalties for a violation of a requirement is a compliance issue, which is best 

addressed in the context of a compliance proceeding.40 

69. We do not agree that a violation of Requirement R4 is a specific type of violation 

of the INT Reliability Standards as NERC and IESO suggest. Requirement R4 requires a 

reliability coordinator to comply with interconnection-wide curtailment procedures 

whereas Requirement R5 requires reliability coordinators and balancing authorities to 

adhere to INT standards that largely specify interchange scheduling procedures. Failure 

to implement curtailment procedures poses a higher reliability risk, since it may place the 

Bulk-Power System at risk of cascading outages, than failure to implement scheduling 

procedures; therefore, it should receive a “high” violation risk factor. 

3. Commission Determination on Violation Severity Levels

70. The ERO’s December 21, 2007 filing included proposed violation severity levels 

corresponding to the requirements of IRO-006-4. Violation severity levels, which the 

 40 We note that section 3.10 of NERC’s Sanction Guidelines addresses multiple 

violations related to a single act or common incidence of noncompliance. 
Docket Nos. RM08-7-000 and RM08-7-001 - 36 - 

ERO or the Regional Entity will apply to establish an initial base penalty range when 

assessing a penalty for the violation of a Reliability Standard, constitutes a post-violation 

measurement of the degree to which a requirement was violated.41 The Commission 

accepts the violation severity levels proposed by the ERO that correspond to the 

Requirements of Reliability Standard IRO-006-4. 

71. Further, in the Violation Severity Levels Order, the Commission directed the ERO 

to submit a compliance filing certifying that it has reviewed each of the violation severity 

level assignments for consistency with certain guidelines set forth in that order.42 The 

Commission also directed that the ERO either validate the existing violation severity 

level designations or propose revisions to specific approved violation severity level 

assignments where the ERO determines that such assignments do not meet the specified 

guidelines. Consistent with the Violation Severity Levels Order, the Commission now 

directs the ERO to review the violation severity levels for IRO-006-4. The ERO must 

include in the compliance filing required by Ordering Paragraph (E) of the Violation 

Severity Levels Order a certification that it has reviewed each violation severity level 

assignment corresponding to the requirements of IRO-006-4 for consistency with certain 

 41 See N. Am. Elec. Reliability Corp., 123 FERC ¶ 61,284, at P 3 (Violation 

Severity Levels Order), order on reh’g, 125 FERC ¶ 61,212 (2008) (extending 

compliance date). 

42 See Violation Severity Level Order, 123 FERC ¶ 61,284 at P 41 and Ordering 

Paragraph (E). 
Docket Nos. RM08-7-000 and RM08-7-001 - 37 - 

guidelines (specifically, guidelines 2b, 3, and 4), validating the assignments that meet the 

guidelines and proposing revisions to those that fail to meet the guidelines. 

72. Accordingly, with respect to the violation risk factors and severity levels, we 

approve IRO-006-4 as mandatory and enforceable. In addition, we direct the ERO 

submit a compliance filing within 60 days that revises violation risk factors to “high” for 

Requirements R1 through R4. The Commission approves the proposed violation severity 

levels and requires the ERO to submit a compliance filing, as discussed above. 

III. Information Collection Statement

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

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

agency.43 The information contained here is also subject to review under section 3507(d) 

of the Paperwork Reduction Act of 1995.44 As stated above, the Commission previously 

approved, in Order No. 693, Reliability Standard IRO-006, which is the subject of this 

supplemental final rule. In the NOPR, the Commission explained that the modifications 

to the Reliability Standard are minor; therefore, they do not add to or increase entities’ 

reporting burden. Thus, in the NOPR, the Commission stated that the modified 

 43 5 CFR 1320.11. 

44 44 U.S.C. 3507(d). 
Docket Nos. RM08-7-000 and RM08-7-001 - 38 - 

Reliability Standard does not materially affect the burden estimates relating to the earlier 

version of Reliability Standard IRO-006 presented in Order No. 693.45

74. In response to the NOPR, the Commission received no comments concerning its 

estimate for the burden and costs and therefore uses the same estimate here. 

Title: Modification of Interchange and Transmission Loading Relief Reliability 

Standards; and Electric Reliability Organization Interpretation of Specific Requirements 

of Four Reliability Standards. 

Action: Proposed Collection 

OMB Control No.: 1902-0244 

Respondents: Businesses or other for-profit institutions; not-for-profit institutions 

Frequency of Responses: On Occasion 

Necessity of the Information: This Supplemental Final Rule approves one modified 

Reliability Standard that pertains to transmission loading relief procedures. The 

Supplemental Final Rule finds the Reliability Standard just, reasonable, not unduly 

discriminatory or preferential, and in the public interest. 

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

contacting: Federal Energy Regulatory Commission, Attn: Michael Miller, Office of the 

 45 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1905-07. The NOPR, 

FERC Stats. & Regs. ¶ 32,632 at P 76-78, provided a detailed explanation why each 

modification has a negligible, if any, effect on the reporting burden. 
Docket Nos. RM08-7-000 and RM08-7-001 - 39 - 

Executive Director, 888 First Street, NE, Washington, DC 20426, Tel: (202) 502-8415, 

Fax: (202) 273-0873, E-mail: <michael.miller@ferc.gov>, or by contacting: Office of 

Information and Regulatory Affairs, Office of Information and Regulatory Affairs, Attn: 

Desk Officer for the Federal Energy Regulatory Commission (Re: OMB Control No. 

1902-0244), Washington, DC 20503, Tel: (202) 395-4650, Fax: (202) 395-7285, Email: <oira_submission@omb.eop.gov>. 

IV. Environmental Analysis

76. 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.46 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.47 The actions 

proposed herein fall within this categorical exclusion in the Commission’s regulations. 

 46 Regulations Implementing the National Environmental Policy Act, Order 

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

47 18 CFR 380.4(a)(2)(ii). 
Docket Nos. RM08-7-000 and RM08-7-001 - 40 - 

V. Regulatory Flexibility Act

77. The Regulatory Flexibility Act of 1980 (RFA)48 generally requires a description 

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

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

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

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

Administration’s Office of Size Standards develops the numerical definition of a small 

business. (See 13 CFR 121.201.) For electric utilities, 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 is not implicated by this Final Rule 

because the minor modifications and interpretations discussed herein will not have a 

significant economic impact on a substantial number of small entities. 

VI. Document Availability

78. 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 

 48 5 U.S.C. 601-12. 
Docket Nos. RM08-7-000 and RM08-7-001 - 41 - 

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

Washington, DC 20426. 

79. 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. 

80. 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>. 

VII. Effective Date and Congressional Notification

81. The Supplemental Final Rule is effective [insert date that is 30 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 Nos. RM08-7-000 and RM08-7-001 - 42 - 

List of subjects in 18 CFR Part 40 

Electric power, Electric utilities, Reporting and recordkeeping requirements 

By the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 
Docket Nos. RM08-7-000 and RM08-7-001 - 43 - 

Appendix A 

NOPR Commenters49

Alcoa Inc. (Alcoa)* 

Constellation Energy Commodities Group, Inc. (Constellation)* 

Independent Electricity System Operator of Ontario (IESO)* 

ISO/RTO Council* 

ITCTransmission; Michigan Electric Transmission Company, LLC; and ITC Midwest 

LLC 

Lafayette Utilities and the Louisiana Energy and Power Authority (Lafayette 

and LEPA)* 

North American Electric Reliability Corp. (NERC)* 

NRG Companies (NRG)* 

Southern Company Services, Inc. (Southern) 

Appendix B 

Comments in Response to NERC’s September 11, 2008 Filing50

ISO/RTO Council 

NRG 

Southern 

 49 An asterisk (*) indicates that the commenter addressed Reliability Standard 

IRO-006-4. 

50 M-S-R Public Power Agency filed a motion to intervene without comments.