160 FERC ¶ 61,070

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 40

[Docket No. RM16-13-000; Order No. 836]

Balancing Authority Control, Inadvertent Interchange, 

and Facility Interconnection Reliability Standards 

(Issued September 20, 2017) 

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule. 

SUMMARY: The Federal Energy Regulatory Commission (Commission) approves

Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-001-3 (Facility 

Interconnection Requirements), submitted by the North American Electric Reliability 

Corporation, as well as the retirement of Reliability Standards BAL-005-0.2b (Automatic 

Generation Control), FAC-001-2 (Facility Interconnection Requirements), and 

BAL-006-2 (Inadvertent Interchange). 

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

publication in the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT:

Syed Ahmad (Technical Information)

Office of Electric Reliability, Division of Reliability Standards 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

Telephone: (202) 502-8718 

Syed.Ahmad@ferc.gov 
Docket No. RM16-13-000 ii

Julie Greenisen (Legal Information)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE 

Washington, DC 20426

Telephone: (202) 502-6362

Julie.Greenisen@ferc.gov

SUPPLEMENTARY INFORMATION: 
160 FERC ¶ 61,070

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Cheryl A. LaFleur, and Robert F. Powelson.

Balancing Authority Control, Inadvertent Interchange, 

and Facility Interconnection Reliability Standards

Docket No. RM16-13-000

ORDER NO. 836

FINAL RULE 

(Issued September 20, 2017)

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

approves Reliability Standards BAL-005-1 (Balancing Authority Control) and 

FAC-001-3 (Facility Interconnection Requirements), submitted by the North American 

Electric Reliability Corporation (NERC), as well as the retirement of Reliability 

Standards BAL-005-0.2b (Automatic Generation Control), FAC-001-2 (Facility 

Interconnection Requirements), and BAL-006-2 (Inadvertent Interchange). The 

Commission also approves the associated implementation plans, violation risk factors, 

and violation severity levels for Reliability Standards BAL-005-1 and FAC-001-3. 

Finally, the Commission approves three revised definitions for the glossary of terms used 

in NERC’s Reliability Standards (NERC Glossary). 

 1

 16 U.S.C. 824(o).
Docket No. RM16-13-000 - 4 -

2. The Commission determines that Reliability Standards BAL-005-1 and 

FAC-001-3 will enhance the reliability of the Bulk-Power System, as compared to 

currently-effective Reliability Standards BAL-005-0.2b and FAC-001-2, by clarifying

and consolidating existing requirements related to frequency control. In addition, the 

Commission determines that the revised Reliability Standards support more accurate and 

comprehensive calculation of Reporting Area Control Error (Reporting ACE), by 

requiring timely reporting of an inability to calculate Reporting ACE and by requiring 

balancing authorities to maintain minimum levels of annual availability of 99.5 percent

for each balancing authority’s system for calculating Reporting ACE. Based on the 

information received in the comments on the Notice of Proposed Rulemaking in this 

proceeding,2 as well as in response to a subsequent data request issued to NERC,3 the 

Commission has determined that it will not, at this time, direct NERC to restore existing 

requirements in Requirement R15 of Reliability Standard BAL-005-0.2b related to 

maintaining and testing backup power supplies at primary control centers and other 

critical locations. We also approve NERC’s request to retire Reliability Standard 

BAL-006-2, BAL-005-0.2b and FAC-001-2 upon the effective date of Reliability 

Standard BAL-005-1. 

 2 Balancing Authority Control, Inadvertent Interchange, and Facility 

Interconnection Reliability Standards, Notice of Proposed Rulemaking, 81 FR 66,555

(Sept. 28, 2016), 156 FERC ¶ 61,210 (2016) (NOPR). 

3 See Response of the North American Electric Corporation to Data Request, 

Docket No. RM16-13-000 (April 7, 2017). 
Docket No. RM16-13-000 - 5 -

I. Background

A. Mandatory Reliability Standards and Order No. 693 

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

Organization (ERO) to develop mandatory and enforceable Reliability Standards that are 

subject to Commission review and approval. Specifically, the Commission may approve, 

by rule or order, a proposed Reliability Standard or modification to a Reliability Standard 

if it determines that the Reliability Standard is just, reasonable, not unduly discriminatory 

or preferential and in the public interest.4

 Once approved, the Reliability Standards may 

be enforced by NERC, subject to Commission oversight, or by the Commission 

independently.5

 

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

and certify an ERO,6 and subsequently certified NERC as the ERO.

7

 On March 16, 

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

Standards filed by NERC, including Reliability Standards BAL-005-0 (Automatic 

Generation Control), FAC-001-0 (Facility Interconnection Requirements), and 

 4

 16 U.S.C. 824o(d)(2).

5

 Id. 824o(e).

6

 Rules Concerning Certification of the Electric Reliability Organization; and 

Procedures for the Establishment, Approval, and Enforcement of Electric Reliability 

Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, order on reh’g, Order 

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

7

 North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on reh’g 

and compliance, 117 FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc. v. FERC, 564 

F.3d 1342 (D.C. Cir. 2009).
Docket No. RM16-13-000 - 6 -

BAL-006-1 (Inadvertent Interchange).8 In addition to approving Reliability Standards 

BAL-005-0 and BAL-006-1, the Commission directed NERC to develop modifications to 

those Reliability Standards through the NERC standards development process. 

5. With respect to Reliability Standard BAL-005-0, the Commission directed NERC 

to develop a modification that: 

(1) develops a process to calculate the minimum regulating 

reserve a balancing authority must have at any given time 

taking into account expected load and generation variation 

and transactions being ramped into or out of the balancing 

authority; (2) changes the title of the Reliability Standard to 

be neutral as to the source of regulating reserves and to allow 

the inclusion of technically qualified DSM and direct control 

load management; (3) clarifies Requirement R5 of this 

Reliability Standard to specify the required type of 

transmission or backup plans when receiving regulation from 

outside the balancing authority when using non-firm service;

and (4) includes Levels of Non-Compliance and a Measure 

that provides for a verification process over the minimum 

required automatic generation control or regulating reserves a 

balancing authority must maintain.9

Subsequently, the Commission approved one interpretation of Reliability Standard 

BAL-005-0 and two errata filings.10 The currently-effective version of the Reliability 

Standard is BAL-005-0.2b. 

 8

 Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, 

FERC Stats. & Regs. ¶ 31,242 at PP 420, 439, and 680, order on reh’g, Order No. 693-A, 

120 FERC ¶ 61,053 (2007). 

9 Id. P 420.

10 See Modification of Interchange and Transmission Loading Relief Reliability 

Standards; and Electric Reliability Organization Interpretation of Specific Requirements 

of Four Reliability Standards, Order No. 713, 124 FERC ¶ 61,071 (2008); North 

American Electric Reliability Corp., Docket No. RD09-2-000 (May 13, 2009) (delegated 
Docket No. RM16-13-000 - 7 -

6. With respect to Reliability Standard BAL-006-1, the Commission directed NERC 

to develop a modification “that adds Measures concerning the accumulation of large 

inadvertent imbalances and Levels of Non-Compliance.”11 The Commission explained 

the need for such a modification as follows:

While we agree that inadvertent imbalances do not normally 

affect the real-time operations of the Bulk-Power System and 

pose no immediate threat to reliability, we are concerned that 

large imbalances represent dependence by some balancing 

authorities on their neighbors and are an indication of less 

than desirable balancing of generation with load. The 

Commission also notes that the stated purpose of this 

Reliability Standard is to define a process for monitoring 

balancing authorities to ensure that, over the long term, 

balancing authorities do not excessively depend on other 

balancing authorities in the Interconnection for meeting their 

demand or interchange obligations.12

Since then, the Commission has approved one revision to Reliability Standard 

BAL-006-1 to remove the regional waiver of certain requirements for the Midcontinent

ISO, following the Midcontinent ISO’s transition to a single balancing authority model.13 

The currently-effective version of the Reliability Standard is BAL-006-2.

 

letter order); North American Electric Reliability Corp., Docket No. RD12-4-000 

(Sept. 13, 2012) (delegated letter order).

11 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 428. 

12 Id. 

13 See North American Electric Reliability Corp., 134 FERC ¶ 61,007 (2011). 
Docket No. RM16-13-000 - 8 -

B. NERC Petition 

7. On April 20, 2016, NERC filed a petition seeking approval of Reliability 

Standards BAL-005-1 (Balancing Authority Control) and FAC-001-3 (Facility 

Interconnection Requirements), nine new or revised definitions associated with the 

Reliability Standards, and retirement of currently-effective Reliability Standards 

BAL-005-0.2b (Automatic Generation Control), FAC-001-2 (Facility Interconnection 

Requirements), and BAL-006-2 (Inadvertent Interchange). 

8. In its petition, NERC requested that the two modified Reliability Standards and 

the revised definitions of Automatic Generation Control, Pseudo-Tie, and Balancing 

Authority become effective on the first day of the first calendar quarter twelve months 

from the effective date of the applicable governmental authority’s approval of NERC’s 

petition. NERC also requested that the retirement of Reliability Standard BAL-006-2 

become effective upon the latter of the effective date of proposed Reliability Standard 

BAL-005-1 and the NERC Operating Committee’s approval of an Inadvertent 

Interchange Guideline document. 

9. For the six remaining definitions (Reporting ACE14 and its component definitions:

Actual Frequency, Actual Net Interchange, Scheduled Net Interchange, Interchange 

 14 NERC states that Reporting ACE “represents a Balancing Authority Area’s 

(BAA’s) Area Control Error (ACE) measured in megawatts (MW) as the difference 

between the BAA’s Actual and Scheduled Net Interchange, plus its Frequency Bias 

Setting obligation and meter error corrections. Reporting ACE helps Responsible 

Entities provide reliable frequency control by indicating the current state of the entity’s 

contribution to Reliability.” NERC Petition at 3.
Docket No. RM16-13-000 - 9 -

Meter Error, and Automatic Time Error Correction), NERC initially requested an

effective date of July 1, 2016, to coincide with the effective date for Reliability Standard 

BAL-001-2. However, NERC subsequently withdrew its request for approval of the 

six Reporting ACE-related definitions from the instant docket, and filed for expedited 

approval of the six definitions in a separate docket. The six definitions were approved by 

delegated letter order on June 23, 2016, and are no longer at issue in the instant 

proceeding.

15 

10. NERC explained in its petition that Reliability Standards BAL-005-1 and 

FAC-001-3, and the proposed retirement of Reliability Standard BAL-006-2, came about 

as part of the second phase of NERC’s project to “clarify, consolidate, streamline, and 

enhance the Reliability Standards addressing frequency control.”16 NERC indicated in its 

petition that the standard drafting team developed the proposed revisions after reviewing 

applicable Commission directives, “Paragraph 81” criteria, and the recommendations of 

the periodic review team that examined Reliability Standards BAL-005-0.2b and 

BAL-006-2.17

 15 North American Electric Reliability Corp., Docket No. RD16-7-000 (June 23, 

2016) (delegated letter order). 

16 NERC Petition at 2 (referencing Project 2010-14.2.1 Phase 2 of Balancing 

Authority Reliability-based Controls).

17 Id. at 3 (citing North American Electric. Reliability Corp., 138 FERC ¶ 61,193 

at P 81, order on reh’g and clarification, 139 FERC ¶ 61,168 (2012); Petition of the 

North American Electric Reliability Corporation for Approval of Retirement of 

Requirements in Reliability Standards, Docket No. RM13-8-000, at Exhibit A 
Docket No. RM16-13-000 - 10 -

11. NERC described the revisions to Reliability Standard BAL-005-0.2b as clarifying 

and refining the current requirements “for accurate, consistent, and complete” reporting 

of Reporting ACE, which is a key frequency control and reliability indicator.18 These 

revisions include relocating some of the current requirements of Reliability Standard 

BAL-005-0.2b, which relate to confirming that facilities are within a balancing 

authority’s metered boundary, into Reliability Standard FAC-001-3. In addition, NERC 

proposed to relocate Requirement R3 of currently-effective Reliability Standard 

BAL-006-2 into Reliability Standard BAL-005-1, explaining that the requirement relates 

to ensuring that balancing authorities use consistent data sources to calculate Reporting 

ACE, and therefore more properly belongs in Reliability Standard BAL-005. 

12. NERC explained that the revised Reliability Standards “represent substantial 

improvements over existing Reliability Standards by helping to support more accurate 

and comprehensive calculation of Reporting ACE and satisfying all remaining 

Commission directives for Reliability Standards BAL-005 and BAL-006.”19 

Further, NERC maintained that Reliability Standard BAL-005-1 is an improvement over 

the currently-effective version, BAL-005-0.2b, because it “consolidates unnecessary or 

repetitive Requirements and moves certain metrics for calculating Reporting ACE to the 

 

(“Paragraph 81 Criteria”) (filed Feb. 28, 2013); North American Electric Reliability 

Corp. Order No. 788, 145 FERC ¶ 61,147 (2013)).

18 Id.

19 Id. at 12. 
Docket No. RM16-13-000 - 11 -

revised, proposed definition of Reporting ACE.”20 Among other things, NERC proposed

to move requirements applicable to generator operators and transmission operators in 

currently-effective Reliability Standard BAL-005-0.2b, into a more appropriate 

Reliability Standard, explaining that “[a]s the purpose of FAC-001-3 is more 

commensurate with interconnection responsibilities, interconnection procedures 

contained in currently effective BAL-005-0.2b should be included in proposed Reliability 

Standard FAC-001-3.”21 

13. In addition, NERC asserted that Reliability Standard BAL-005-1 improves on the 

currently-effective version of the Reliability Standard because proposed Requirement R2 

clarifies the performance expectations for notification to reliability coordinators when a 

balancing authority is unable to calculate Reporting ACE for 30 minutes or more,22 and 

Requirement R5 “introduces a new obligation . . . to assure the availability of a BA’s 

system used to calculate Reporting ACE,” requiring a minimum availability of 

99.5 percent in each calendar year.23

14. NERC stated that the package of revisions reflected in its petition addresses the 

outstanding directives related to Reliability Standards BAL-005 and BAL-006 from 

Order No. 693. Specifically, NERC stated that the title of Reliability Standard 

 20 Id. at 13. 

21 Id. at 23.

22 Id. at 16. 

23 Id. at 19. 
Docket No. RM16-13-000 - 12 -

BAL-005-1 has been modified from Automatic Generation Control to Balancing 

Authority Control “to reflect the connection to Reporting ACE and resource-neutral 

requirements.”24 In addition, NERC indicated that it has revised the definition of 

Automatic Generation Control to ensure a resource-neutral process for controlling 

demand and resources.25 

15. NERC also stated that the requirements of Reliability Standard BAL-005-1 all 

have a “medium” violation risk factor, thereby addressing the Commission’s directive to 

revise the violation risk factor for Reliability Standard BAL-005-0, Requirement R17 to 

“medium.”26 Similarly, NERC asserted that it met the directive to consider Xcel and 

FirstEnergy’s comments about the scope of Requirement R17, which set minimum 

accuracy requirements for time error and frequency devices, by retiring part of the 

currently-effective requirement and moving the minimum accuracy requirements into 

Requirement R3 of Reliability Standard BAL-005-1. NERC maintained that this 

response has “streamlined obligations to use specific frequency metering equipment that 

is necessary for operation of [automatic generation control (AGC)] and accurate 

 24 Id. at 13 (referencing Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 404, 

and noting that the Commission’s directive related to resource-neutrality for regulating 

reserves is now moot, as Requirement R2 of Reliability Standard BAL-005-0.2b, which 

required entities to maintain regulating reserves, has been retired). 

25 Id. at n.39.

26 Id. at 17; see also North American Elec. Reliability Corp., 121 FERC ¶ 61,179,

at P 58 (2007). 
Docket No. RM16-13-000 - 13 -

calculation of Reporting ACE, as this ensures that costs associated with implementation 

are commensurate with reliability benefit.”27

16. NERC proposed to move Requirement R3 from currently-effective Reliability 

BAL-006-2 into Reliability Standard BAL-005-1, but NERC proposed to retire the rest of 

the requirements of Reliability Standard BAL-006-2 (Requirements R1, R2, R4, and R5). 

NERC stated that the standard drafting team determined that, aside from Requirement 

R3, each of the requirements in Reliability Standard BAL-006-2 are “energy accounting 

standards” and/or are “administrative” in nature, and should accordingly be retired.28 

17. NERC acknowledged that the Commission previously directed it to develop 

measures concerning the accumulation of large inadvertent imbalances, based on the 

Commission’s concern that large imbalances may indicate an underlying problem. 

NERC explained, however, that the requirements of Reliability Standard BAL-001-2, 

which require balancing authorities to maintain clock-minute ACE within the Balancing 

Authority ACE Limit, as well as the requirements of Reliability Standard BAL-003-1 and 

proposed Reliability Standard BAL-002-2, which require entities to restore Reporting 

ACE within predefined bounds, prevent any excessive dependency on other entities. As 

NERC explained in its petition: 

Because entities are supporting frequency through this 

coordinated suite of reliability standards, entities will not 

excessively depend on other entities in the Interconnection 

such that the purely economic issue that was addressed by 

 27 NERC Petition at 18. 

28 Id. at 25-26. 
Docket No. RM16-13-000 - 14 -

BAL-006-2 becomes a reliability issue for a NERC 

Reliability Standard.29

18. In order to address “any remaining or potential concerns with retirement of 

BAL-006-2,” NERC proposed that the retirement become effective only upon the 

Operating Committee’s approval of an Inadvertent Interchange Guideline document.30 

NERC stated that the Inadvertent Interchange Guideline document was based on a white 

paper developed by the standard drafting team for Reliability Standards BAL-005 and 

BAL-006, and maintained that it provides an in-depth justification for why a NERC 

Reliability Standard is not necessary for inadvertent interchange. 

19. With respect to the three proposed definitions that remain at issue in this 

proceeding, NERC explained that: (1) “Automatic Generation Control” has been revised 

to set forth a resource-neutral process for controlling demand and resources; (2) “PseudoTie” has been updated to reflect the use of the term “Reporting ACE;” and (3) “Balancing 

Authority” has been revised to more accurately describe a balancing authority’s resource 

demand function. 

C. NERC Supplemental Filing 

20. On June 14, 2016, NERC submitted supplemental information in support of its 

April 20, 2016 petition (Supplemental Filing), to provide additional explanation and 

 29 Id. at 27.

30 The Inadvertent Interchange Guideline document was subsequently approved by 

the NERC Operating Committee, on December 13, 2016. See NERC, Reliability 

Guideline: Inadvertent Interchange (Dec. 13, 2016, 

http://www.nerc.com/comm/OC/Reliability%20Guideline%20DL/Reliability_Guideline_

Inadvertent_Interchange.pdf. 
Docket No. RM16-13-000 - 15 -

support for the retirement of Requirement R15 in currently-effective Reliability Standard 

BAL-005-0.2b.31 In its Supplemental Filing, NERC maintained that Requirement R15 

should be retired because the objectives of that requirement (i.e., to ensure the continued 

operation of AGC and certain data recording equipment during the loss of normal power 

supply) are being addressed through other Reliability Standards and requirements. 

Specifically, NERC maintained that Reliability Standard EOP-008-1 requires a balancing 

authority to have a backup control center facility and an operating plan that allows it to 

meet its functional obligations with regard to the reliable operation of the bulk electric 

system in the event that its primary control center functionality is lost.32 

21. In addition, NERC maintained that the proposed performance requirements of 

Requirement R3 of Reliability BAL-005-1, which would require balancing authorities to 

“use frequency metering equipment for the calculation of Reporting ACE that is available 

a minimum of 99.95% of each calendar year,” will help to ensure that balancing 

authorities can continuously operate the equipment necessary for the calculation of 

Reporting ACE, effectively eliminating the need for Requirement R15.33 

 31 As NERC notes in its Supplemental Filing, NERC stated in its initial petition 

that “Requirements R2, R7 and R15 . . . are redundant, ineffective, and should be retired 

based on Commission-approved Paragraph 81 Criteria.” NERC Supplemental Filing at 1 

(quoting NERC Petition at 15).

32 NERC Supplemental Filing at 2. 

33 Id. at 4. 
Docket No. RM16-13-000 - 16 -

D. Notice of Proposed Rulemaking and Data Request 

22. On September 22, 2016, the Commission issued a notice of Proposed Rulemaking 

proposing to approve Reliability Standards BAL-005-1 and FAC-001-3, as replacements 

for the existing versions of those standards, and to approve the retirement of Reliability 

Standard BAL-006-2 on the latter of the effective date of BAL-005-1 or the NERC 

Operating Committee’s approval of an Inadvertent Interchange Guideline. In the NOPR, 

the Commission raised several questions about the impact of eliminating Requirement 

R15 from currently-effective Reliability Standard BAL-005-0.2b, which requires 

responsible entities to maintain and periodically test backup power supplies at primary 

control centers and other critical locations.34 The Commission indicated that, depending 

on the information received in comments in response to its questions, it may decide to 

issue a directive to restore the substance of Requirement R15 as part of a final rule.35 

23. Five sets of comments were filed in response to the NOPR.

36 Subsequently, the 

Commission staff issued a data request to NERC seeking additional information about the 

current practices of a representative sample of entities concerning the use of backup 

power supplies.

37 Specifically, the Commission sought further information from a 

 34 NOPR, 156 FERC ¶ 61,210 at PP 26-33. 

35 Id. P 25.

36 The Appendix lists the entities that submitted comments and the shortened 

names used throughout this Final Rule to describe those entities. 

37 Data Request in Response to Petition Seeking Approval of Reliability Standards 

BAL-005-1 and FAC-001-3, Docket No. RM16-13-000 (March 7, 2017) (March 7 Data 

Request). 
Docket No. RM16-13-000 - 17 -

sample of existing balancing authorities, reliability coordinators, and transmission 

operators related to the kinds of backup power supply they maintain at control centers 

and other critical locations, including current testing practices for those backup power 

supplies. NERC submitted its response to the data request on April 7, 2017. 

II. Discussion

24. Pursuant to FPA section 215(d)(2), the Commission approves Reliability 

Standards BAL-005-1 and FAC-001-3 as just, reasonable, not unduly discriminatory or 

preferential, and in the public interest. Reliability Standard BAL-005-1 and FAC-001-3 

will enhance reliability as compared to currently-effective Reliability Standards 

BAL-005-0.2b and FAC-001-2, because the Reliability Standards clarify and consolidate

existing requirements related to frequency control. In addition, Reliability Standard 

BAL-005-1 supports more accurate and comprehensive calculation of Reporting ACE by 

requiring timely reporting of an inability to calculate Reporting ACE (Requirement R2) 

and by requiring minimum levels of availability and accuracy for each balancing 

authority’s system for calculating Reporting ACE (Requirement R5). 

25. We also approve the violation risk factors and violation severity levels associated 

with Reliability Standards BAL-005-1 and FAC-001-3; the revisions to the definitions of 

Automatic Generation Control, Pseudo-Tie, and Balancing Authority as proposed by 

NERC; the retirement of Reliability Standards BAL-005-0.2b, FAC-001-2, and 
Docket No. RM16-13-000 - 18 -

BAL-006-2 in accordance with NERC’s implementation plan;38 and NERC’s 

implementation plans for proposed Reliability Standards BAL-005-1 and FAC-001-3. 

26. As discussed below, the Commission determines not to direct NERC to restore the 

requirement, currently found in Requirement R15 of Reliability Standard BAL-005-0.2b, 

to maintain and test backup power supplies at primary control centers and other critical 

locations at this time.

A. Reliability Standards BAL-005-1 and FAC-001-3

NOPR 

27. In the NOPR, the Commission proposed to approve Reliability Standards BAL005-1 and FAC-001-3. The Commission noted that the modified Reliability Standards 

would clarify and consolidate existing requirements related to frequency control, and that 

Reliability Standard BAL-005-1 would support more accurate and comprehensive 

calculation of Reporting ACE. 

Comments

28. NERC, Trade Associations, and BPA submitted comments in support of the 

Commission’s proposal to approve Reliability Standards BAL-005-1 and FAC-001-3. 

NERC maintains, as it did in its petition and supplemental filing, that the modified 

 38 As discussed above, NERC requested that the retirement of Reliability Standard 

BAL-006-2 become effective upon the latter of the effective date of proposed Reliability 

Standard BAL-005-1 and the NERC Operating Committee’s approval of the Inadvertent 

Interchange Guideline document. Because the NERC Operating Committee has now 

approved the guideline document, we approve the retirement of BAL-006-2 as of the date 

BAL-005-1 goes into effect. 
Docket No. RM16-13-000 - 19 -

Reliability Standards not only address all remaining directives related to BAL-005 and 

BAL-006, but also “substantially improve existing frequency control requirements and 

support stronger frequency control performance.”39 Similarly, Trade Associations argue 

that the Reliability Standards will support more accurate and comprehensive calculation 

of Reporting ACE, as the Commission recognized in the NOPR.40 

Commission Determination 

29. We approve Reliability Standards BAL-005-1 and FAC-001-3. As proposed in 

the NOPR, the Commission determines that the modified Reliability Standards will, 

overall, enhance reliability by clarifying and consolidating existing requirements related 

to frequency control. Specifically, the Reliability Standards will support more accurate 

and comprehensive calculation of Reporting ACE by requiring timely reporting of an 

inability to calculate Reporting ACE and by requiring balancing authorities to maintain 

minimum levels of annual availability of 99.5 percent for each balancing authority’s 

system for calculating Reporting ACE.

B. Retirement of Reliability Standard BAL-005-0.2b, Requirement R15

NOPR 

30. The NOPR observed that Reliability Standard BAL-005-1 does not include a 

requirement comparable to currently-effective Requirement R15 of Reliability Standard 

BAL-005-0.2b, which states as follows: 

 39 NERC Comments at 4. 

40 Trade Associations Comments at 4. 
Docket No. RM16-13-000 - 20 -

The Balancing Authority shall provide adequate and reliable 

backup power supplies and shall periodically test these 

supplies at the Balancing Authority’s control center and other 

critical locations to ensure continuous operation of AGC and 

vital data recording equipment during loss of the normal 

power supply.41

31. The NOPR recognized that the approach taken in Reliability Standard BAL-005-1, 

when combined with the requirements of other Reliability Standards requiring entities to 

meet their functional obligations in the event of the loss of a primary control center, was 

intended to be a more performance-based approach to ensuring reliable operation of the 

bulk electric system.42 However, the Commission expressed concern that the objectives 

of Requirement R15 would not be fully met by the other Reliability Standards and 

requirements NERC had identified, and in particular pointed out the following potential 

gap:

Requirement R15 of currently-effective Reliability Standard 

BAL-005-0.2b helps to ensure continued operability of 

balancing authorities’ primary control centers, despite the loss 

of normal power supply, without evacuation to or activation 

of backup control centers. Thus, this provision appears to 

provide additional robustness in the primary control center 

and mitigates the risk of problems occurring in the transition 

to a secondary control center.43 

The NOPR also pointed out that balancing authorities currently appear to be the only type 

of functional entity explicitly required to have and to test adequate and reliable backup 

 41 See NOPR, 156 ¶ 61,210 at P 26.

42 Id. at 30.

43 Id. P 31. 
Docket No. RM16-13-000 - 21 -

supply at critical locations, and that there is no provision parallel to Requirement R15 for 

reliability coordinators or transmission operators.

44

32. The NOPR requested comments from NERC and others on the retirement of 

Requirement R15 of Reliability Standard BAL-005-0.2b, specifically asking for comment 

on the benefits and potential burden of retaining Requirement R15, and an explanation as 

to why there is no parallel to Requirement R15 for reliability coordinators and 

transmission operators, including whether any reason exists to distinguish between 

balancing authorities and other entities that may operate a control center or critical 

facility.

45 In addition, the Commission asked commenters to respond to six specific 

questions regarding the impact of retiring Requirement R15; current practices with 

respect to backup power supply at control centers; and the scope of other requirements 

identified by NERC as fulfilling the same objectives as current Requirement R15.

46

Comments

33. NERC, Trade Associations, and BPA maintain that Requirement R15 should be 

retired without further directive from the Commission, as the results-based requirements 

of Reliability Standard BAL-005-1 represent a more comprehensive and superior 

approach. NERC asserts that Reliability Standard EOP-008-1’s results-based or 

 44 Id. P 30. 

45 Id. P 32.

46 Id. P 33. 
Docket No. RM16-13-000 - 22 -

functionality-based approach is preferable overall,47 while Trade Associations and other 

commenters point out that the performance levels required in Reliability Standard 

BAL-005-1, Requirements R3 and R5, cannot be achieved without having critical backup 

systems, including a backup power supply that is routinely maintained and tested.48 

34. NERC contends that the existing requirements of R15 focus on only one factor 

contributing to reliable control center performance (i.e., backup power supplies), while 

Reliability Standard BAL-005-1 includes two performance obligations “that subsume 

requirement R15.”49 Specifically, NERC points out that Requirement R3 requires 

balancing authorities to use frequency metering equipment for calculation of Reporting 

ACE that is available at least 99.95 percent annually, with minimum accuracy of 

0.001 Hz, and Requirement R5 requires that each system used by a balancing authority to 

calculate Reporting ACE also be available at least 99.5 percent annually. NERC states 

that these performance obligations, which provide no exceptions and include other 

critical elements such as data acquisition and communications, frequency metering, and 

ACE calculation systems, contrast with existing Requirement R15, which focuses on only 

one component (power supply) that contributes to performance.50 In addition, NERC 

 47 NERC Comments at 8-9.

48 Trade Associations Comments at 8; see also BPA Comments at 4.

49 NERC Comments at 5; Trade Associations Comments at 7-9.

50 NERC Comments at 6; see also Trade Associations Comments at 8 (asserting 

that Reliability Standard BAL-005-1’s required minimum performance level for 

calculating ACE “provides real performance measures that far exceed” the current 

requirements of BAL-005-0.2b, and that “entities will not be able to ensure that they can 
Docket No. RM16-13-000 - 23 -

maintains that new Requirement R3 “will ensure virtual ‘continuous operation of AGC 

and vital data recording equipment during loss of the normal power supply,’” thereby 

effectively replacing Requirement R15.51 

35. NERC also maintains, as it did in its petition, that Requirement R15 should be 

retired, as it is redundant with broader obligations imposed on balancing authorities, 

reliability coordinators, and transmission operators in Reliability Standard EOP-008-1. 

NERC contends that applicable entities cannot comply with Reliability Standard 

EOP-008-1 without addressing power sources, although NERC acknowledges that 

backup power supply may not always be necessary to support the required backup 

functionality for control center functions. NERC further points out that the functionality 

obligations under Requirement R1 of Reliability Standard EOP-008-1 include the 

obligation to address operation of vital equipment necessary for the collection of data to 

calculate Reporting ACE, assuming frequency metering equipment does not meet the 

minimum performance requirement under new Requirement R3 of BAL-005-1.52 

Overall, NERC maintains that Requirements R1 and R7 of Reliability Standard EOP008-1 “are broader and clearer than Requirement R15, by requiring [applicable entities] 

 

achieve this level of performance without having critical backups,” including reliable 

backup power). 

51 Id. at 6 (responding to NOPR Question 5). 

52 Id. at 8-9 (responding to NOPR Question 6). 
Docket No. RM16-13-000 - 24 -

to have in place and test Operating Plans that address all elements (including any power 

sources) necessary for backup functionality.”53 

36. Trade Associations maintain, on a more general level, that overly-prescriptive 

requirements can be burdensome and often ineffective. Trade Associations assert that in 

determining whether there is adequate justification for the retirement of Requirement 

R15, the Commission should assess “whether [the new and remaining] requirements have 

sufficient rigor to ensure [bulk electric system] reliability through the continuous efforts 

to design, build and maintain systems to achieve the desired level of performance.”54 

Trade Associations note that NERC’s Independent Expert Review Panel concluded that 

results-based Reliability Standards would improve overall reliability.55 Moreover, Trade 

Associations contend that the absence of a recommendation by the Independent Expert 

Review Panel to retire Requirement R15 as part of its 2013 report has no bearing on the 

question of retirement now, given the improvements and enhancements associated with 

Reliability BAL-005-1. Finally, Trade Associations raise a concern that the Commission 

may be misconstruing Reliability Standard BAL-005-0.2b to address a reliability concern 

beyond that intended for BAL-005. Trade Associations maintain that the BAL-005 

Reliability Standards “were written for the express purpose of ensuring [balancing 

 53 Id. at 10.

54 Trade Associations Comments at 6-7.

55 Id. at 7 (citing Standards Independent Expert Review Project; Chapter 5; 

Conclusions; at 18). 
Docket No. RM16-13-000 - 25 -

authorities] can reliably and effectively calculate Reporting ACE in order to maintain 

resource and demand balance within their area of responsibility.”56 

37. As to what obligations would still exist under Reliability Standard EOP-008-1 if 

the backup power supply obligation in Requirement R15 was retired, NERC, Trade 

Associations, and all other commenters addressing the question acknowledge that 

EOP-008-1 does not require applicable entities to have backup power supply at the 

primary or the secondary control center.57 However, NERC asserts that backup 

functionality obligations under Requirement R1 of Reliability Standard EOP-008-1 

“include the obligation to address operation of vital equipment necessary for the 

collection of data to calculate Reporting ACE if frequency metering equipment does not 

meet the minimum performance requirements under proposed R3 of BAL-005-1.”58 By 

contrast, the Trade Associations acknowledge that Reliability Standard EOP-008-1 does 

not ensure continuous operation of AGC and vital data recording equipment during the 

loss of normal power supply.

59 

 56 Id. at 7.

57 NERC notes, for example, that Reliability Standard EOP-008-1, Requirement

R1 requires entities to address power and backup power as part of their emergency plans, 

but acknowledges that it does not necessarily require backup power at either the primary 

or secondary control center. See also Trade Associations at 12; BPA at 3 (stating that 

without R15, BPA “does not believe there is an enforceable requirement to have a backup 

power supply to support frequency metering equipment”). 

58 NERC Comments at 8-9 (responding to NOPR Question 6).

59 Trade Associations Comments at 16. 
Docket No. RM16-13-000 - 26 -

38. With respect to the NOPR’s questions on current practices regarding backup 

power supply, BPA and Idaho Power indicate that they have backup power supply at all 

of their primary and secondary control centers.

60 Trade Associations state that most 

companies have many layers of backup to ensure continued control center functionality, 

which may include backup power, backup generators and uninterrupted power supply.61 

In response to the NOPR’s questions about the definition of “critical location” as 

currently used in Reliability Standard BAL-005-0.2b, Trade Associations state that the 

“other critical locations” referenced in current requirement R15 could refer to frequency 

metering equipment (including equipment outside the control center), ancillary computer 

rooms with energy management systems (EMS) and EMS backups, and other data 

systems needed for ACE calculation.62

39. With respect to the benefits and burdens of having backup power supply at certain 

locations, Idaho Power acknowledges the benefits of having backup power supply at 

primary control centers and other critical locations (including the benefit of ensuring 

compliance with other reliability requirements), and it states that the potential impact to 

reliability is no different for reliability coordinators or transmission operators.63 Trade 

Associations maintain, however, that there is no need for additional requirements for 

 60 BPA Comments at 3; Idaho Power Comments at 3. 

61 Trade Associations Comments at 14.

62 Id. at 14. 

63 Idaho Power Comments at 2. 
Docket No. RM16-13-000 - 27 -

reliability coordinators and transmission operators related to backup power supply, 

because other Reliability Standards require or encourage certain levels of reliability and 

functionality at these locations, as evidenced by the historical lack of problems with loss 

of EMS or loss of power supply at control centers.64 

40. Appelbaum primarily discusses the importance of backup power supplies in the 

context of communications networks. Appelbaum points to a report issued by the Federal 

Communications Commission in response to the June 2012 “derecho” event on 

communications networks and services in Virginia. The report found that 

communications were disrupted in large part during that event because of avoidable 

planning and system failures, including the lack of functional backup power, notably in 

central offices. Appelbaum contends, based on the derecho event, that the need to 

properly plan and design backup power is a critical component of reliability, and asks 

that the findings of the derecho event be considered when the Commission assesses the 

functional approach of Reliability Standard EOP-008-1.65 Appelbaum points out that 

“there is no specific mention of the performance requirements of the backup power 

supply, the required design, or reference to an Industry Standard” in Reliability Standard 

EOP-008-1, which “creates a degree of ambiguity that can be exploited to avoid installing 

a sufficient level of redundancy in power supplies.”66 Appelbaum further states the 

 64 Trade Associations Comments at 9-11. 

65 See Appelbaum Comments at 4.

66 Id. 
Docket No. RM16-13-000 - 28 -

requirement for backup power design and testing should extend to reliability 

coordinators, transmission operators, and balancing authorities.

67 In sum, Appelbaum’s 

comments stress the overall need to impose specific requirements, not merely functional 

obligations, related to backup power supply for critical systems. 

Response to Data Request 

41. In response to the Commission’s March 7 Data Request requesting information on 

specific backup supply practices from a sampling of registered entities, NERC indicated 

that it collected data from nine entities, all registered as a balancing authority, reliability 

coordinator, transmission operator, or some combination of those functional categories. 

NERC indicated that the sample reflected some diversity as to size and type of entity and, 

therefore, the information “should be reflective of current practices throughout the 

industry.”68

42. NERC’s response indicates that all surveyed entities have backup power supplies 

at their primary and backup control centers. A number of entities responded that these 

backup supplies were installed prior to the effective date of NERC’s mandatory 

Reliability Standards, and that they would not change their practices if the Commission 

approved the retirement of Requirement R15 of Reliability Standard BAL-005-0.2b. 

NERC reported that the surveyed entities have backup power supply at a number of other 

critical locations, which include data centers, corporate facilities, and operations centers 

 67 Id. at 5.

68 NERC Response to Data Request at 3. 
Docket No. RM16-13-000 - 29 -

(e.g., those housing cyber and physical security operations). NERC indicated that the 

surveyed entities have two types of backup power supplies at their control centers: 

backup generators and uninterruptible power supplies. According to NERC, each of the 

surveyed entities reported that it regularly tests its backup power supplies in accordance 

with written procedures, the majority doing monthly run testing. NERC reported that 

some entities also perform switchover or transfer testing on a monthly basis, while others 

perform such testing at longer intervals.

Commission Determination 

43. We approve the retirement of Reliability Standard BAL-005-0.2b, including 

Requirement R15, upon the effective date of Reliability Standard BAL-005-1. Based on 

the NOPR comments, we determine not to direct NERC to develop modifications to the 

Reliability Standards to restore the substance of Requirement R15 at this time. We 

conclude that the performance obligations of Reliability Standards BAL-005-1 and 

EOP-008-1 will ensure the continued operation of AGC and certain data recording 

equipment during the loss of normal power supply. Moreover, based on the responses to 

the March 7 Data Request, we are satisfied that backup power supplies at primary and 

secondary control centers and other critical locations will likely continue to be used even 

after the retirement of Reliability Standard BAL-005-0.2b, Requirement R15. Should 

that practice change to the detriment of Bulk-Power System reliability after the revised 

Reliability Standards go into effect, the Commission may revisit this issue. 
Docket No. RM16-13-000 - 30 -

III. Information Collection Statement 

44. The Paperwork Reduction Act (PRA)69 requires each federal agency to seek and 

obtain Office of Management and Budget (OMB) approval before undertaking a 

collection of information directed to ten or more persons, or contained in a rule of general 

applicability. The OMB regulations require that OMB approve certain reporting and 

recordkeeping (collections of information) imposed by an agency.70 Upon approval of a 

collection(s) of information, OMB will assign an OMB control number and expiration 

date. Respondents subject to the filing requirements of this 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.

45. This Final Rule approves revisions to Reliability Standards BAL-005, associated 

with FERC-725R, and FAC-001, associated with FERC-725D. These revisions 

streamline and clarify the current requirements related to the calculation of Reporting 

ACE, a key frequency control and reliability indicator factor, including consolidating the 

seventeen requirements of currently-effective Reliability Standard BAL-005-0.2b, 

associated with FERC-725R, into seven requirements in Reliability Standard BAL-005-1;

relocation of certain requirements related to interconnection requirements for 

transmission owners and generation owners into Reliability Standard FAC-001-3;

relocation of Requirement R3 in currently-effective Reliability Standard BAL-006-2 into 

 69 44 U.S.C. 3501-3520. 

70 5 CFR 1320.11.
Docket No. RM16-13-000 - 31 -

Reliability Standard BAL-005-1; and relocation of certain metrics and calculations 

required for calculating Reporting ACE into the NERC definition of Reporting ACE and 

its component definitions. 

46. The revisions to Reliability Standards BAL-005 and FAC-001 will not result in an 

increase in the record-keeping and reporting requirements imposed on balancing 

authorities, other than the one-time cost of administering the change to the revised 

Reliability Standards. All other recordkeeping and reporting obligations imposed on 

balancing authorities under the modified requirements essentially track those that already 

exist under currently-effective Reliability Standards BAL-005-0.2b and FAC-001-2. The 

modifications to Reliability Standard FAC-001-3 will result in a limited increase in the 

record-keeping and reporting requirements imposed on those transmission owners and 

generator owners that are not also transmission operators and generator operators (an 

estimated 161 entities in the United States), as shown in the chart below.71 Many of the 

modifications to the Reliability Standards reflected in this Final Rule were developed to 

help clarify and streamline existing requirements related to calculation of Reporting 

ACE, and they are expected to reduce these entities’ overall burden with respect to 

 71 Reliability Standard FAC-001-3 replaces and strengthens currently-effective 

Reliability Standard FAC-001-2 by moving currently-effective Requirement R1 of 

Reliability Standard BAL-005-0.2b to Reliability Standard FAC-001-3, requiring that

transmission owner and generator owner interconnection requirements include 

procedures for confirming that new or materially modified facilities connecting to the 

bulk electric system are within a balancing authority’s metered boundaries. NERC 

explains that these interconnection requirements should be relocated to Reliability 

Standard FAC-001-3, as FAC-001-3 establishes facility interconnection requirements.
Docket No. RM16-13-000 - 32 -

recordkeeping, reporting, and compliance. Moreover, the Final Rule approves the 

retirement of the majority of the requirements in Reliability Standard BAL-006-2, further 

reducing the overall record-keeping and reporting requirements for balancing authorities. 

Accordingly, the Commission estimates that the overall change in the record-keeping and 

reporting requirements as a result of this Final Rule will be de minimis on a per-entity 

basis. 

47. Public Reporting Burden: The changes reflected in Reliability Standard 

BAL-005-1 are not expected to result in an increase in the annual record-keeping and 

reporting requirements on applicable entities (balancing authorities). However, balancing 

authorities will have to perform a one-time review of the modified Reliability Standard to 

ensure that their compliance practices (including record-keeping) are consistent with the 

revised requirements. The relocation of Requirement R1 of Reliability Standard 

BAL-005-0.2b into Reliability Standard FAC-001-3 will result in an increase in the 

number of entities subject to the requirement, as the requirement will be applicable to 

transmission owners and generator owners rather than transmission operators and 

generator operators. However, this limited increase in annual record-keeping and 

reporting burden, along with the one-time burden of administering the change from 

Reliability Standard BAL-005-0.2b to BAL-005-1, is expected to be offset to some extent 

by the decrease in record-keeping and reporting burden associated with the retirement of 

Reliability Standard BAL-006-2. 
Docket No. RM16-13-000 - 33 -

Data Collection

FERC-725A, 725D & 

725R1 (modifications in 

RM16-13-000)

Number of 

Respondents72

(1)

Number of 

Responses per 

Respondent

(2)

Total 

Number of 

Responses

(1)×(2)=(3)

Average 

Burden 

Hours & 

Cost per 

Response73

(4)

Annual 

Burden 

Hours & 

Total 

Annual 

Cost74

(3)×(4)=(5)

BAL-005-1

(FERC-725R1) BA

99 1 (one-time) 99

1

$64.29

99

$6,364.71

FAC-001-3

R3

(FERC-725D) GO/TO

16175 1 (annual) 161

1

$102.04

161

$16,428.44

Retirement of current 

standard BAL-006-02

(FERC-725A) BA

99 -1 (annual) -99

-1

-$37.75

-99

-$3,737.25

TOTAL 260

$19,055.90

 72 The estimated number of respondents is based on the NERC compliance registry 

as of April 07, 2017. According to the NERC compliance registry, there are 64 U.S. 

balancing authorities (BA) in the Eastern Interconnection, 34 balancing authorities in the 

Western Interconnection and one balancing authority in the Electric Reliability Council 

of Texas (ERCOT). 

73 The burden hours and cost are based on the hourly cost for an engineer for 

BAL-005-1, the average of the hourly cost for an engineer and clerical staff for 

FAC-001-3, and the hourly cost for clerical staff for changes associated with the 

retirement of BAL-006-2. The estimates for cost per hour are based on 2015 wage 

figures and derived as follows: 

• $64.29/hour, the average salary plus benefits per engineer (from Bureau of 

Labor Statistics at https://www.bls.gov/oes/current/naics2_22.htm); 

• $37.75/hour, the average salary plus benefits per information and record 

clerks (from Bureau of Labor Statistics at 

https://www.bls.gov/oes/current/naics2_22.htm).

74 Solely for purposes of determining the overall annual cost of the record-keeping 

and reporting changes reflected in this Final Rule, the one-time cost associated with 
Docket No. RM16-13-000 - 34 -

Title: FERC-725A, Mandatory Reliability Standards for the Bulk-Power System; 

FERC-725D, Mandatory Reliability Standards: FAC Reliability Standards; 

FERC-725R1, Mandatory Reliability Standards: BAL Reliability Standards

Action: Revision to existing collections. 

OMB Control No: 1902-0244 (FERC-725A); 1902-0247 (FERC-725D); TBD 

(FERC-725R1).

Respondents: Business or other for-profit and not-for-profit institutions.

Frequency of Responses: On-going. 

Necessity of the Information: The Commission has reviewed the requirements of 

Reliability Standards BAL-005-1 and FAC-001-3 and has made a determination that the 

requirements of these Reliability Standards are necessary to implement section 215 of the 

FPA.

Internal Review: The Commission reviewed the revised Reliability Standards and made 

a determination that its action is necessary to implement section 215 of the FPA. The 

Commission has assured itself, by means of its internal review, that there is specific, 

objective support for the burden estimates associated with the information requirements.

 

administering the change to Reliability Standard BAL-005-1 is being treated as an annual 

cost. 

75 Per the NERC compliance registry, in the United States there are 54 generator 

owners (GO) that are not also generator operators and 107 transmission owners (TO) that 

are not also transmission operators, for a total of 161 new entities in the United States 

subject to Reliability Standard FAC-001-3, Requirement R3. 
Docket No. RM16-13-000 - 35 -

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

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

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

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

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

associated burden estimate(s), please send your comments to the Commission and 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) 395-4638, 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 include FERC-725A, FERC-725D, and 

FERC-725R1 and Docket Number RM16-13-000.

IV. Environmental Analysis

50. 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.76 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 

 76 Regulations Implementing the National Environmental Policy Act of 1969, 

Order No. 486, FERC Stats. & Regs., Regulations Preambles 1986-1990 ¶ 30,783 (1987).
Docket No. RM16-13-000 - 36 -

not substantially change the effect of the regulations being amended.77 The actions taken 

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

V. Regulatory Flexibility Act Certification

51. The Regulatory Flexibility Act of 1980 (RFA)78 generally requires a description 

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

number of small entities. The RFA does not mandate any particular outcome in a 

rulemaking. It only requires consideration of alternatives that are less burdensome to 

small entities and an agency explanation of why alternatives were rejected. The Small 

Business Administration (SBA) revised its size standard effective January 22, 2014 for 

electric utilities from a standard based on megawatt hours to a standard based on the 

number of employees, including affiliates. Under SBA’s size standards, some balancing 

authorities, generation owners, and transmission owners will fall under the following 

category and associated size threshold: electric bulk power transmission and control, at 

500 employees.79 

52. As stated in the NOPR, the Commission estimates a very limited, one-time 

increase in record-keeping and reporting burden on balancing authorities due to the 

changes in the revised Reliability Standards, with no other increase in the cost of 

compliance. Approximately 24 of the 99 balancing authorities are expected to meet the 

 77 18 CFR 380.4(a)(2)(ii).

78 5 U.S.C. 601-612.

79 13 CFR 121.201, Sector 22 (Utilities), NAICS code 221121 (Electric Bulk 

Power Transmission and Control).
Docket No. RM16-13-000 - 37 -

SBA’s definition for a small entity. In addition, approximately 161 entities will be 

subject annually to new record-keeping and reporting requirements under revised 

Reliability Standard FAC-001-3, with no other increase in the cost of compliance.

53. Even assuming that the one-time cost of compliance for administering the change 

from Reliability Standard BAL-005-0.2b to BAL-005-1 is an annual cost, and assuming 

that all of the entities affected by the revisions to both BAL-005 and FAC-001 qualify as 

small entities, the estimated total annual cost to the industry as a whole is minimal 

($19,055.90), and the average cost per affected entity is $118.36. 

54. According to SBA guidance, the determination of significance of impact “should 

be seen as relative to the size of the business, the size of the competitor’s business, and 

the impact the regulation has on larger competitors.”80 The Commission does not 

consider the estimated burden to be a significant economic impact. As a result, the 

Commission certifies that the revised Reliability Standards will not have a significant 

economic impact on a substantial number of small entities.

VI. Document Availability

55. In addition to publishing the full text of this document in the Federal Register, the 

Commission provides all interested persons an opportunity to view and/or print the 

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

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

 80 U. S. Small Business Administration, A Guide for Government Agencies How to 

Comply with the Regulatory Flexibility Act, at 18 (May 2012), https://www.sba.gov/sites/

default/files/advocacy/rfaguide_0512_0.pdf.
Docket No. RM16-13-000 - 38 -

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

Washington, DC 20426.

56. From the Commission's Home Page on the Internet, this information is available 

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

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

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

three digits, in the docket number field.

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

normal business hours from the Commission’s 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 

58. These regulations are effective [INSERT DATE 60 days after publication in the 

FEDERAL REGISTER]. The Commission has determined, with the concurrence of the

Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule
Docket No. RM16-13-000 - 39 -

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

Enforcement Fairness Act of 1996.

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.
Docket No. RM16-13-000 - 40 -

Appendix 

List of Commenters 

Abbreviation Commenter 

NERC North American Electric Reliability 

Corporation

Trade Associations Edison Electric Institute, American Public 

Power Association, and Large Public 

Power Council 

BPA Bonneville Power Administration

Idaho Power Idaho Power Company 

Appelbaum Jonathan Appelbaum