Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 24427 

(i) Within the next 24 months after the 

effective date of this AD, rework the rudder, 

rudder trim-tab, elevators and elevators autotab surfaces by drilling additional drain 

holes. 

(ii) Within the next 24 months after the 

effective date of this AD, inspect the ailerons 

for the existence of required drain holes. 

(iii) Before further flight after the 

inspections required in paragraph (f)(3)(ii) of 

this AD, if the required drain holes do not 

exist, drill the drain holes. 

(iv) Do the actions required in paragraph 

(f)(3)(i) of this AD following Part II of the 

Accomplishment Instructions in EMBRAER 

Phenom Service Bulletin No. 505–57–0002, 

dated February 13, 2012. 

(v) Do the actions required in paragraphs 

(f)(3)(ii) and (f)(3)(iii) of this AD following 

Part II of the Accomplishment Instructions in 

EMBRAER Phenom Service Bulletin No. 

505–57–0004, dated February 16, 2012. 

(4) Group 4 airplanes specified in 

paragraph (c)(4) of this AD: 

(i) Within the next 24 months after the 

effective date of this AD, inspect the ailerons, 

elevators, and rudder for the existence of 

required drain holes. 

(ii) Before further flight after the inspection 

required in paragraph (f)(4)(i) of this AD, if 

the required drain holes do not exist, drill the 

drain holes. 

(iii) Do the actions required in paragraphs 

(f)(4)(i) and (f)(4)(ii) of this AD following Part 

I of the Accomplishment Instructions in 

EMBRAER Phenom Service Bulletin No. 

505–57–0004, dated February 16, 2012. 

(g) Other FAA AD Provisions 

The following provisions also apply to this 

AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, Standards Office, 

FAA, has the authority to approve AMOCs 

for this AD, if requested using the procedures 

found in 14 CFR 39.19. Send information to 

ATTN: Jim Rutherford, Aerospace Engineer, 

FAA, Small Airplane Directorate, 901 Locust, 

Room 301, Kansas City, Missouri 64106; 

telephone: (816) 329–4165; fax: (816) 329– 

4090; email: jim.rutherford@faa.gov. Before 

using any approved AMOC on any airplane 

to which the AMOC applies, notify your 

appropriate principal inspector (PI) in the 

FAA Flight Standards District Office (FSDO), 

or lacking a PI, your local FSDO. 

(2) Airworthy Product: For any requirement 

in this AD to obtain corrective actions from 

a manufacturer or other source, use these 

actions if they are FAA-approved. Corrective 

actions are considered FAA-approved if they 

are approved by the State of Design Authority 

(or their delegated agent). You are required 

to assure the product is airworthy before it 

is returned to service. 

(3) Reporting Requirements: For any 

reporting requirement in this AD, a federal 

agency may not conduct or sponsor, and a 

person is not required to respond to, nor 

shall a person be subject to a penalty for 

failure to comply with a collection of 

information subject to the requirements of 

the Paperwork Reduction Act unless that 

collection of information displays a current 

valid OMB Control Number. The OMB 

Control Number for this information 

collection is 2120–0056. Public reporting for 

this collection of information is estimated to 

be approximately 5 minutes per response, 

including the time for reviewing instructions, 

completing and reviewing the collection of 

information. All responses to this collection 

of information are mandatory. Comments 

concerning the accuracy of this burden and 

suggestions for reducing the burden should 

be directed to the FAA at: 800 Independence 

Ave. SW., Washington, DC 20591, Attn: 

Information Collection Clearance Officer, 

AES–200. 

(h) Related Information 

Refer to MCAI Ageˆncia Nacional de 

Aviac ̧a ̃o Civil (ANAC) Brazilian 

Airworthiness Directive 2012–03–01, dated 

March 20, 2012; EMBRAER Phenom Service 

Bulletin No. 505–57–0002, dated February 

13, 2012; EMBRAER Phenom Service 

Bulletin No. 505–57–0003, dated November 

16, 2011; and EMBRAER Phenom Service 

Bulletin No. 505–57–0004, dated February 

16, 2012, for related information. For service 

information related to this AD, contact 

Empresa Brasileira de Aeronautica S.A. 

(EMBRAER), Phenom Maintenance Support, 

Av. Brigadeiro Faria Lima, 2170, Sa ̃o Jose ́ dos 

Campos—SP, CEP: 12227–901—P.O. Box 

36/2, BRASIL; fax ++55 12 3927–2619; email 

phenom.reliability@embraer.com.br; Internet: 

http://www.embraer.com. You may review 

copies of the referenced service information 

at the FAA, Small Airplane Directorate, 901 

Locust, Kansas City, Missouri 64106. For 

information on the availability of this 

material at the FAA, call (816) 329–4148. 

Issued in Kansas City, Missouri, on April 

18, 2012. 

John Colomy, 

Acting Manager, Small Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2012–9794 Filed 4–23–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 38 

[Docket No. RM05–5–020] 

Standards for Business Practices and 

Communication Protocols for Public 

Utilities 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Federal Energy 

Regulatory Commission (Commission) is 

proposing to amend its regulations to 

incorporate by reference the business 

practice standards adopted by the 

Wholesale Electric Quadrant of the 

North American Energy Standards 

Board (NAESB) that pertain to the 

measurement and verification of 

demand response and energy efficiency 

resources participating in organized 

wholesale electricity markets. NAESB 

adopted the measurement and 

verification of demand response 

standards in response to the 

Commission’s findings in Order No. 

676–F. 

DATES: Comments are due June 25, 2012. 

ADDRESSES: Comments, identified by 

docket number RM05–5–020, may be 

filed in the following ways: 

• Electronic Filing through http:// 

www.ferc.gov. Documents created 

electronically using word processing 

software should be filed in native 

applications or print-to-PDF format and 

not in a scanned format. 

• Mail/Hand Delivery: Those unable 

to file electronically may mail or handdeliver comments to: Federal Energy 

Regulatory Commission, Secretary of the 

Commission, 888 First Street NE., 

Washington, DC 20426. 

Instructions: For detailed instructions 

on submitting comments and additional 

information on the rulemaking process, 

see the Comment Procedures Section of 

this document. 

These standards can be obtained from 

NAESB at 801 Travis Street, Suite 1675, 

Houston, TX 77002, telephone: (713) 

356–0060, http://www.naesb.org, and 

are available for viewing in the 

Commission’s Public Reference Room. 

FOR FURTHER INFORMATION CONTACT: 

David Kathan (Technical Issues), Office 

of Energy Policy and Innovation, 

Federal Energy Regulatory 

Commission, 888 First Street NE., 

Washington, DC 20426, (202) 502– 

6404, david.kathan@ferc.gov; 

Dennis Hough (Legal Issues), Office of 

the General Counsel, Federal Energy 

Regulatory Commission, 888 First 

Street NE., Washington, DC 20426, 

(202) 502–8631, 

dennis.hough@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

Paragraph 

Nos. 

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

II. Discussion ............................................................................................................................................................................................ 10 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

24428 Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 

1 16 U.S.C. 791a et seq. (2006). 

2See Report, North American Energy Standards 

Board, Measurement and Verification of Demand 

Response Products, Docket No. RM05–5–020 (filed 

May 3, 2011) (May 3 Report) (providing a status 

update and description of the proposed standards). 

In accordance with applicable copyright laws, 

complete versions of the standards are available 

from NAESB at 801 Travis Street, Suite 1675, 

Houston, TX 77002, telephone: (713) 356–0060, 

http://www.naesb.org, and are available for viewing 

in the Commission’s Public Reference Room. 

3The Commission has also sought RTO and ISO 

proposals regarding their measurement and 

verification methodologies, including in Order No. 

745, Demand Response Compensation in Organized 

Wholesale Energy Markets, Order No. 745, 76 Fed. 

Reg. 16,658 (Mar. 24, 2011), FERC Stats. & Regs. 

¶ 31,322, at P 93–95 (2011), order on reh’g, Order 

No. 745–A, 137 FERC ¶ 61,215, at P 123 (2011). 

4The four quadrants are the wholesale and retail 

electric quadrants and the wholesale and retail 

natural gas quadrants. 

5Under NAESB’s procedures, interested persons 

may attend and participate in NAESB committee 

meetings and phone conferences, even if they are 

not NAESB members. 

6See May 3 Report at 2. 

7See Standards for Business Practices and 

Communication Protocols for Public Utilities, Order 

No. 676, FERC Stats. & Regs. ¶ 31,216, (2006), reh’g 

denied, Order No. 676–A, 116 FERC ¶ 61,255 

(2006). 

8Standards for Business Practices and 

Communication Protocols for Public Utilities, Order 

No. 676–F, FERC Stats. & Regs. ¶ 31,309 (2010); 

Order No. 676–E, FERC Stats. & Regs. ¶ 31,299 

(2009); Order No. 676–D, 124 FERC ¶ 61,317 (2008), 

Order No. 676–C, FERC Stats. & Regs. ¶ 31,274 

(2008), Order No. 676–B, FERC Stats. & Regs. 

¶ 31,246 (2007). 

9 Demand response means a reduction in the 

consumption of electric energy by customers from 

their expected consumption in response to an 

increase in the price of electric energy or to 

incentive payments designed to induce lower 

consumption of electric energy. 18 CFR 35.28(b)(4) 

(2011). 

10Report, North American Energy Standards 

Board, Measurement and Verification of Demand 

Response Products, Docket No. RM05–5–017, at 2 

(filed Apr. 17, 2009) (April 2009 Report). 

Paragraph 

Nos. 

A. NAESB Phase II Demand Response M&V Standards ................................................................................................................. 11 

1. Description ............................................................................................................................................................................. 12 

2. Discussion .............................................................................................................................................................................. 15 

B. NAESB Wholesale Energy Efficiency M&V Standards ............................................................................................................... 20 

1. Description ............................................................................................................................................................................. 21 

2. Discussion .............................................................................................................................................................................. 23 

III. Notice of Use of Voluntary Consensus Standards ............................................................................................................................ 25 

IV. Information Collection Statement ...................................................................................................................................................... 26 

V. Environmental Analysis ...................................................................................................................................................................... 32 

VI. Regulatory Flexibility Act Certification ............................................................................................................................................ 33 

VII. Comment Procedures ........................................................................................................................................................................ 35 

VIII. Document Availability ..................................................................................................................................................................... 39 

Notice of Proposed Rulemaking 

(April 19, 2012) 

1. In this Notice of Proposed 

Rulemaking (NOPR), the Federal Energy 

Regulatory Commission (Commission) 

proposes to amend its regulations at 18 

CFR 38.2 under the Federal Power Act 1

to incorporate by reference the business 

practice standards adopted by the 

Wholesale Electric Quadrant (WEQ) of 

the North American Energy Standards 

Board (NAESB) that pertain to the 

measurement and verification of 

demand response and energy efficiency 

resources participating in organized 

wholesale electricity markets.2

Adoption of these standards is intended 

to improve the methods and procedures 

used to accurately measure demand 

response and energy efficiency resource 

performance. Additionally, these 

standards should help Regional 

Transmission Organizations (RTO) and 

Independent System Operators (ISO) to 

properly credit demand response and 

energy efficiency resources for their 

services.3

I. Background 

2. NAESB is a private consensus 

standards developer that divides its 

activities among four quadrants, each of 

which is composed of members from all 

segments of its respective industry.4

NAESB is an accredited standards 

organization under the auspices of the 

American National Standards Institute 

(ANSI). NAESB’s procedures are 

designed to ensure that all industry 

members can have input into the 

development of a standard, whether or 

not they are members of NAESB, and 

each wholesale electricity standard that 

NAESB’s WEQ adopts is supported by a 

consensus of the seven industry 

segments: end users, distribution/load 

serving entities, transmission, 

generation, marketers/brokers, 

independent grid operators/planners 

and technology/services. Under the 

WEQ process, for a standard to be 

approved, it must receive a supermajority vote of 67 percent of the 

members of the WEQ’s Executive 

Committee, with support from at least 

40 percent of each of the seven industry 

segments.5 For final approval, 67 

percent of the WEQ’s general 

membership must ratify the standard.6

3. In 2006, the Commission issued 

Order No. 676, a Final Rule that 

incorporated by reference business 

practice standards for the WEQ adopted 

by NAESB applicable to public 

utilities.7 Since 2006, the NAESB 

consensus industry stakeholder process 

has reviewed the NAESB business 

practice standards for public utilities 

with a view to creating a more efficient 

marketplace and it has adopted 

revisions that, in a number of instances, 

the Commission has made mandatory by 

incorporating by reference into the 

Commission’s regulations.8

4. NAESB began work on the 

development of business practice 

standards pertaining to the 

measurement and verification of 

demand response 9 products and 

services in July 2007, when the NAESB 

WEQ Demand Side Management— 

Energy Efficiency (DSM–EE) 

subcommittee began work on this issue. 

This effort led to the adoption and 

ratification by NAESB of initial 

measurement and verification standards 

early in 2009. 

5. On April 17, 2009, NAESB filed a 

report (April 2009 Report) informing the 

Commission that it had adopted an 

initial set of business practice standards 

to categorize various demand response 

products and services and to support 

the measurement and verification of 

these products and services in organized 

wholesale electricity markets (Phase I 

Demand Response M&V Standards).10

Key to obtaining consensus on the 

initial set of standards was the 

agreement to proceed with further work 

on more detailed technical standards for 

the measurement and verification of 

demand response resources. The 

NAESB report recognized that these 

standards would need to be followed by 

the development of more detailed 

technical standards for the measurement 

and verification of demand response 

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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 24429 

11 Incorporation by reference makes compliance 

with these standards mandatory for public utilities 

subject to Part 38 of the Commission’s regulations. 

12See Standards for Business Practices and 

Communication Protocols for Public Utilities, 

Notice of Proposed Rulemaking, FERC Stats. & Regs. 

¶ 32,646 (2009) (2009 NOPR). 

13Standards for Business Practices and 

Communication Protocols for Public Utilities, Order 

No. 676–F, FERC Stats. & Regs. ¶ 31,309 (2010). 

14Order No. 676–F, FERC Stats. & Regs. ¶ 31,309 

at P 32. 

15 Id. P 37. 

16 Id. P 32. 

17See supra n.2. 

18Energy efficiency: 

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

energy used by specific end-use devices and 

systems, typically without affecting the services 

provided. These programs reduce overall electricity 

consumption (reported in megawatthours), often 

without explicit consideration for the timing of 

program-induced savings. Such savings are 

generally achieved by substituting technologically 

more advanced equipment to produce the same 

level of end-use services (e.g. lighting, heating, 

motor drive) with less electricity. Examples include 

high-efficiency appliances, efficient lighting 

programs, high-efficiency heating, ventilating and 

air conditioning (HVAC) systems or control 

modifications, efficient building design, advanced 

electric motor drives, and heat recovery systems. 

U.S. Energy Information Administration Glossary, 

http://www.eia.gov/tools/glossary/index.cfm?id=E 

(last visited Feb. 24, 2012). 

19NAESB states that ‘‘advance notification’’ 

involves a communication to the demand response 

resource made prior to when its services are 

required. The ‘‘telemetry interval,’’ as described by 

NAESB, is the period of time between submissions 

of data. NAESB defines ‘‘adjustment window’’ as a 

period of time used to calculate a baseline 

adjustment. 

20May 3 Report at 1–2. 

21 Id. at 1. 

22U.S. Department of Energy, FEMP, M&V 

Guidelines: Measurement and Verification for 

Federal Energy Projects, Version 3.0, April 2008, 

http://www1.eere.energy.gov/femp/pdfs/ 

mv_guidelines.pdf. 

23Efficiency Valuation Organization, IPMVP 

Public Library of Documents, http://www.evoworld.org/. 

24May 3 Report at 3. 

25We propose to incorporate by reference the 

following standards collectively identified by 

NAESB as 2010 Wholesale Electric Quadrant 

Annual Plan Item 4(a) and 4(b): General—Section 

015–1.0; Telemetry—Section 015–1.1; After-theFact Metering—Section 015–1.2; Performance 

Evaluation—Section 015–1.3; General—Section 

015–1.4; Telemetry—Section 015–1.5; After-theFact Metering—Section 015–1.6; Performance 

Evaluation—Section 015–1.7; General—Section 

015–1.8; Telemetry—Section 015–1.9; After-theFact Metering—Section 015–1.10; Performance 

Evaluation—Section 015–1.11; General—Section 

015–1.12; Telemetry—Section 015–1.13; After-theFact Metering—Section 015–1.14; Performance 

Evaluation—Section 015–1.15; Baseline 

Information—Section 015–1.16; Event 

Information—Section 015–1.17; Special 

Processing—Section 015–1.18; Baseline 

Information—Section 015–1.19; Event 

Information—Section 015–1.20; Special 

Processing—Section 015–1.21; Baseline 

Information—Section 015–1.22; Event 

Information—Section 015–1.23; Special 

Processing—Section 015–1.24; Baseline 

Information—Section 015–1.25; Event 

Information—Section 015–1.26; Special 

Processing—Section 015–1.27; Baseline 

Information—Section 015–1.28; Event 

Information—Section 015–1.29; and Special 

Processing—Section 015–1.30. 

products and services in RTO and ISO 

areas. 

6. On April 15, 2010, the Commission 

issued Order No. 676–F, incorporating 

by reference 11 the Phase I Demand 

Response M&V Standards 12 that 

categorize various demand response 

products and services and support the 

measurement and verification of these 

products and services in organized 

wholesale electricity markets.13 The 

Commission stated that ‘‘[w]hile 

NAESB’s Phase I [Demand Response] 

M&V Standards represent a good first 

step, additional substantive standards 

would appear beneficial in creating 

transparent and consistent measurement 

and verification of demand response 

products and services in wholesale 

electric markets.’’ 14 The Commission 

also stated that ‘‘we expect Phase II will 

address issues related to baseline 

development * * *’’ 15 The 

Commission anticipated that the 

measurement and verification standards 

needed to accomplish this goal would 

be a focus of NAESB’s Phase II 

measurement and verification standards 

development efforts.16

7. NAESB subsequently initiated 

specific plans to improve and adopt 

additional technical standards and filed 

a report 17 with the Commission on May 

3, 2011 (May 3 Report) that informed 

the Commission that NAESB had 

adopted a revised set of standards 

covering measurement and verification 

(Phase II Demand Response M&V 

Standards) and a new set of standards 

covering energy efficiency,18 and 

explained its efforts to develop these 

standards. 

8. As discussed in more detail below, 

the Phase II Demand Response M&V 

Standards add more specifications to 

the existing Phase I Demand Response 

M&V Standards’ definitions and 

business practice standards in the 

following areas: meter data reporting 

deadline, advanced notification, 

telemetry interval, meter accuracy for 

after-the-fact metering, meter data 

reporting interval, and adjustment 

window.19 During NAESB’s work on 

Phase II, the WEQ DSM–EE Wholesale 

Demand Response Work Group (WEQ 

DR work group) discussed the level of 

detail to be included in the standards, 

with most participants agreeing that the 

standards developed should not 

‘‘duplicate efforts undertaken in the 

ISO–RTO stakeholder process,’’ which 

vetted the adopted programs 

extensively.20 NAESB states that a 

majority of the WEQ DR work group 

agreed that ‘‘impacting the stakeholder 

process would require guidance from 

the FERC.’’ 21

9. In addition to demand response 

standards, NAESB drafted, discussed, 

and adopted business practice standards 

for the measurement and verification of 

energy efficiency in organized 

wholesale electricity markets 

(Wholesale Energy Efficiency M&V 

Standards). NAESB reports that the 

work took place between July 2009 and 

December 2010, and was considered in 

NAESB’s DSM–EE subcommittee 

meetings and WEQ’s Executive 

Committee meetings. The standards are 

designed to create a standard method for 

quantifying the energy reductions from 

energy efficiency measures. The 

Wholesale Energy Efficiency M&V 

Standards include six new definitions 

and 63 business practice standards. 

Included are definitions for energy 

efficiency baseline and demand 

reduction value. The standards contain 

criteria for the use of energy efficiency 

products in organized wholesale 

electricity markets, general 

measurement and verification plan 

requirements, and detailed criteria of 

acceptable measurement and 

verification methodologies. NAESB 

states that the standards are built upon 

PJM Interconnection, L.L.C. and ISO 

New England Inc. manuals, the Federal 

Energy Management Program (FEMP) 

measurement and verification 

standards,22 the International 

Performance Measurement and 

Verification Protocol (IPMVP),23 and 

several state protocols.24

II. Discussion 

10. The Commission proposes to 

incorporate by reference into our 

regulations both the Phase II Demand 

Response M&V Standards and 

associated terms, and the Wholesale 

Energy Efficiency M&V Standards and 

associated terms. 

A. NAESB Phase II Demand Response 

M&V Standards 

11. The Commission proposes to 

incorporate by reference into its 

regulations the Phase II Demand 

Response M&V Standards as a further 

step toward transparency and 

consistency in the methods RTOs and 

ISOs use to measure and verify demand 

response in their organized wholesale 

electricity markets.25 Additionally, the 

Commission seeks comment on the 

Phase II Demand Response M&V 

Standards and on certain aspects of 

measurement and verification of 

demand response more generally, 

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24430 Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 

26NAESB defines ‘‘demand reduction value’’ as 

the amount of a demand resource’s reduced 

electricity usage. 

27The four product categories are energy service, 

capacity service, reserve service, and regulation 

service. 

28The five performance evaluation types are 

maximum base load, meter before/meter after, 

baseline type-I, baseline type-II, and metering 

generator output. 

29 ‘‘Governing Documents’’ are documents that 

control or affect the interaction and relationship 

between a system operator and other parties, for 

example, applicable statutes and regulations, tariffs, 

contracts, manuals, and other relevant procedures. 

The DSM–EE subcommittee made this change to 

remove system operator discretion and to more 

accurately reflect that rules are developed by 

markets not the system operator. See 2008 WEQ AP 

Item 5(a) Recommendation to the NAESB WEQ 

Executive Committee at 37 (Sept. 30, 2010) 

(available at May 3 Report, Appendix B, Page 5, 

http://www.naesb.org/pdf4/ 

dsmee_group3_093010reqcom_a1.doc). 

30 2010 WEQ AP Item 4(a) and 4(b) Final Action 

at 12 (ratified Mar. 21, 2011). 

31 Id. at 10. 

32Order No. 676–F, FERC Stats. & Regs. ¶ 31,309 

at P 32. 

33 Id. P 33. 

34 Id. P 34. 

35NOPR, FERC Stats. & Regs. ¶ 32,646 at P 6. 

36April 2009 Report at 2. 

37See 2010 WEQ AP Item 4(a) and 4(b) Final 

Action at 12 (ratified Mar. 21, 2011). 

including the degree to which 

standardization is important, the 

appropriate degree of detail and 

specificity that any such standards 

should contain, and the appropriate 

mechanism for achieving any necessary 

improvements in this area. 

1. Description 

12. The Phase II Demand Response 

M&V Standards build on the Phase I 

Demand Response M&V Standards. 

These new standards also include 

updates to certain associated definitions 

as well as some formatting and 

organizational changes. The collective 

set of Phase I and Phase II Demand 

Response M&V Standards comprise two 

parts: the first part establishes criteria 

for the use of equipment, technology, 

and procedures to quantify the demand 

reduction value 26 of four product 

categories,27 and the second part 

includes business practice requirements 

for five performance evaluation types.28

13. In the Phase II Demand Response 

M&V Standards, NAESB consistently 

replaced references to the ‘‘System 

Operator’’ with the term ‘‘Governing 

Documents’’ 29 throughout most of the 

standards. Other changes include 

adding a meter data reporting deadline 

(103 days for the energy and capacity 

product categories and 55 days for 

reserve and regulation product 

categories); specifying an advanced 

notification of one day maximum to the 

demand response resource that its 

capacity product category will be 

required; establishing a telemetry 

interval of six seconds for the provider 

of the regulation product category to 

submit data to the system operator; 

tightening the requirement for meter 

accuracy for after-the-fact metering for 

all four product categories; and defining 

an adjustment window of four hours for 

calculating baseline adjustments for the 

baseline type-I and baseline type-II 

performance evaluation types. 

14. As characterized by NAESB, the 

set of business practice standards 

represented by the combination of Phase 

I and Phase II efforts ‘‘provide a 

framework that may be used to develop 

performance evaluation methodologies 

for specific Demand Response services; 

they do not specify detailed 

characteristics of performance 

evaluation methodologies.’’ 30 The 

standards state that, should a conflict 

arise between the business practice 

standards and a System Operator’s 

Governing Documents, the Governing 

Documents would have precedence.31

2. Discussion 

15. As noted above, when the 

Commission approved the Phase I 

Demand Response M&V Standards in 

Order No. 676–F, it recognized that 

‘‘additional substantive standards 

would appear beneficial in creating 

transparent and consistent measurement 

and verification * * * in wholesale 

electric markets.’’ 32 The Commission 

agreed with commenters ‘‘that more 

detailed measurement and verification 

standards will reduce costs for 

customers and market participants, 

particularly those participating in 

multiple markets’’ and that ‘‘demand 

response providers that participate in 

more than one RTO or ISO should not 

have to incur the costs of developing 

different business processes to adapt to 

the differing RTO/ISO requirements, 

increasing the cost and complexity of 

their business.’’ 33 While the 

Commission acknowledged that 

NAESB’s efforts may not result in a 

single performance evaluation method, 

the Commission emphasized that 

‘‘greater standardization of the 

performance evaluation methods will 

improve the accuracy of measuring and 

verifying demand response performance 

and may reduce costs.’’ 34

16. The 2009 NOPR noted that the key 

to several NAESB participants’ 

willingness to accept the Phase I 

Demand Response M&V Standards was 

an agreement among participants to 

include more specific technical 

measurement and verification standards 

in NAESB’s annual work plan and to 

proceed with further work on more 

detailed technical standards.35

Similarly, in its April 2009 Report, 

NAESB stressed that ‘‘more technical 

standards would be needed to support 

the standards provided in the 

recommendation,’’ that ‘‘[a]ll WEQ 

[Executive Committee] members agreed 

to have a follow-up development effort 

to provide additional technical context 

to the standards,’’ and that ‘‘the DSM– 

EE subcommittee [had already] begun 

efforts to scope the development of 

more detailed technical standards for 

the measurement and verification of 

demand response products and services 

in ISO–RTO footprint areas.’’ 36

17. As noted above, NAESB 

acknowledges that the resulting set of 

business practice standards represented 

by the combination of Phase I and Phase 

II efforts set forth a generalized 

performance evaluation methodology 

that lacks specific provisions or detailed 

requirements.37 The Commission invites 

comments on the proposed Phase II 

standards. Further, in light of the 

Commission’s statements in Order No. 

676–F regarding the importance of 

consistency and specificity, we invite 

comment as to whether the Phase II 

Demand Response M&V Standards that 

we propose to adopt herein are 

sufficiently detailed to provide 

transparent measurement and 

verification among regions, and whether 

greater detail or prescriptiveness would 

be appropriate. We also seek comment 

on the degree to which encouraging 

greater consistency among markets and 

regions would reduce costs for 

customers and market participants or 

otherwise facilitate participation by end 

users in multiple markets. 

18. To the extent that greater detail is 

recommended, the Commission seeks 

comment as to whether sufficient 

experience in demand response is 

available to identify best practices in the 

area of measurement and verification, 

particularly for performance evaluation 

types such as baseline calculations. 

Similarly, we seek comment about the 

particular areas where enhancing such 

detail or consistency would be most 

useful. For example, are consistent 

telemetry and metering requirements 

more or less important than consistent 

approaches to the determination of 

baselines; would it be worthwhile to 

address procedures for weather 

adjustments; or are any other particular 

aspects of measurement and verification 

appropriate for further effort regarding 

the addition of increased specificity and 

more consistency across RTOs and 

ISOs? 

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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 24431 

38See May 3 Report at 1. 

39We propose to incorporate by reference the 

following standards collectively identified by 

NAESB as 2010 Wholesale Electric Quadrant 

Annual Plan Item 4(d): Energy Efficiency Resource 

Use Criteria in Wholesale Markets—Section 021– 

3.1; General Measurement and Verification Plan 

Requirements—Section 021–3.2; Post Installation 

M&V Report Components—Section 021–3.3; 

Performance Reporting—Section 021–3.4; M&V 

Supporting Documents—Section 021–3.5; M&V 

Methodologies—Section 021–3.6; Energy Efficiency 

Baseline Conditions—Section 021–3.7; Statistical 

Significance—Section 021–3.8; Nominated Energy 

Efficiency Value Calculations/Demand Reduction 

Value Calculations—Section 021–3.9; Measurement 

and Monitoring—Section 021–3.10; Measurement 

Equipment Specifications—Section 021–3.11; and 

Data Validation—Section 021–3.12. 

19. The Commission appreciates the 

efforts of the WEQ thus far in 

developing these standards. The 

Commission also understands that 

various participants in the NAESB 

process expressed concern that the 

NAESB process should not duplicate 

efforts undertaken in the stakeholder 

processes of the RTOs and ISOs, which 

vetted their individual programs 

extensively.38 As a result, many of the 

standards defer to the existing 

Governing Documents of the RTOs and 

ISOs. The Commission seeks comment 

on whether further development of 

more substantive measurement and 

verification standards broadly 

applicable to RTOs and ISOs are 

required and, if so, whether a NAESB or 

a Commission-led, or other process 

should carry out the task. If commenters 

prefer the NAESB process, we request 

comment on the best relationship 

framework between NAESB and the 

RTO and ISO stakeholder processes to 

facilitate the formulation of standards. 

B. NAESB Wholesale Energy Efficiency 

M&V Standards 

20. The Commission proposes to 

incorporate by reference into our 

regulations the Wholesale Energy 

Efficiency M&V Standards.39 These 

business practice standards provide 

criteria for energy efficiency resources 

participating in organized wholesale 

electricity markets, general 

requirements for the structure of a 

measurement and verification plan, and 

detailed criteria for acceptable 

measurement and verification 

methodologies. The standards 

incorporate documentation and 

reporting requirements applicable to 

installed energy efficiency measures. 

The standards also consider technical 

requirements such as identification of 

energy efficiency baseline conditions, 

statistical significance requirements for 

measurement methodologies requiring 

statistical estimation techniques, and 

technical requirements for measurement 

equipment. 

1. Description 

21. The purpose of these business 

practice standards is to establish a 

standard method for quantifying the 

energy reductions associated with 

energy efficiency measures such as 

lighting, appliances, industrial process 

improvements, and building 

management. NAESB describes the 

Wholesale Energy Efficiency M&V 

Standards as an initial set of standards 

for the participation of energy efficiency 

products in organized wholesale 

electricity markets. 

22. NAESB adopted its Wholesale 

Energy Efficiency M&V Standards under 

its consensus procedures. The 

consensus process developed by NAESB 

requires the organization to be fully 

aware of the positions of each of 

NAESB’s six wholesale electric 

segments (i.e., end users, distribution/ 

load serving entities, transmission, 

generation, marketers/brokers, and 

independent grid operators/planners). 

2. Discussion 

23. The Commission preliminarily 

finds that the Wholesale Energy 

Efficiency M&V Standards provide 

substantive detail to assure more 

effective evaluation of the performance 

of energy efficiency products and 

services. The standards provide the 

means for demonstrating consistent and 

reliable evidence of reductions in 

electricity usage attributable to energy 

efficiency resources that qualify to 

participate in organized wholesale 

electricity markets. The NAESB 

standards are intended to provide for 

proper measurement and verification of 

energy efficiency resources so that the 

resources may be compensated in 

accordance with how well they perform, 

and how performance continues as 

equipment or systems age. The 

standards should also help to ensure 

that energy efficiency resources and 

other electricity resources are treated 

comparably. 

24. The Commission appreciates the 

detail provided within the Wholesale 

Energy Efficiency M&V Standards. The 

standards provide four measurement 

and verification methodologies 

(Sections 021–3.6.1.1–021–3.6.1.4), as 

well as a mechanism by which energy 

efficiency resource providers may 

propose, and RTOs and ISOs may 

consider, alternative measurement and 

verification methodologies (Section 

021–3.6.2). The Commission recognizes 

that the establishment of baseline 

performance data and monitoring of 

post-installation performance of energy 

efficiency measures is conducted by 

directly measuring and monitoring 

system loads, or extrapolating from a 

selection of available measurement 

variables. The standards contain 15 

technical requirements for all 

measurement equipment devices used 

by energy efficiency resource providers 

(Sections 021–3.11.1–021–3.11.15). 

Specifically, the 15 technical 

requirements provide standards for 

interval meters that record electricity 

usage data as well as for the 

measurement or monitoring of ‘‘proxy 

variables’’ that do not directly measure 

electricity consumption. The technical 

requirements for proxy variable 

measurement include detailed accuracy 

and precision requirements. The 

standards also contain five statistical 

requirements intended to ensure 

accuracy for the measurement 

methodologies requiring statistical 

estimation techniques (Sections 021– 

3.8.2–021–3.8.6). The Commission 

invites comment on the proposed 

standards. 

III. Notice of Use of Voluntary 

Consensus Standards 

25. Office of Management and Budget 

Circular A–119 (section 11) (Feb. 10, 

1998) provides that federal agencies 

should publish a request for comment in 

a NOPR when the agency is seeking to 

issue or revise a regulation proposing to 

adopt a voluntary consensus standard or 

a government-unique standard. In this 

NOPR, the Commission is proposing to 

incorporate by reference voluntary 

consensus standards developed by the 

NAESB WEQ. 

IV. Information Collection Statement 

26. The collections of information 

contained in this proposed rule have 

been submitted to the Office of 

Management and Budget (OMB) for 

review under section 3507(d) of the 

Paperwork Reduction Act of 1995, 44 

U.S.C. 3507(d). The Commission solicits 

comments on the Commission’s need for 

this information, whether the 

information will have practical utility, 

the accuracy of the provided burden 

estimates, ways to enhance the quality, 

utility, and clarity of the information to 

be collected, and any suggested methods 

for minimizing respondents’ burden, 

including the use of automated 

information techniques. 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. 

27. The following burden estimate is 

based on the projected costs for the 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

24432 Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 

40 ‘‘FERC–516’’ is the Commission’s identifier 

that corresponds to OMB control no. 1902–0096 

which identifies the information collection 

associated with Electric Rate Schedules and Tariff 

Filings. 

41 ‘‘FERC–717’’ is the Commission’s identifier 

that corresponds to OMB control no. 1902–0173 

which identifies the information collection 

associated with Standards for Business Practices 

and Communication Protocols for Public Utilities. 

42The Total Annual Cost for information 

collection is $10,974. This number is reached by 

multiplying the total hours to prepare responses 

(186) by an hourly wage estimate of $59 (a 

composite estimate of wages plus benefits that 

includes legal, technical and support staff rates. 

Based on data from the Bureau of Labor Statistics 

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

and http://www.bls.gov/news.release/ecec.nr0.htm). 

(78 hours for demand response standards + 108 

hours for energy efficiency standards) × $59/hour = 

$10,974. 

43We note that 24 hours at $59/hour = $1,416 and 

54 hours at $59/hour = $3,186. 

44We note that 36 hours at $59/hour = $2,124 and 

72 hours at $59/hour = $4,248. 

industry to implement revisions to the 

WEQ Standards currently incorporated 

by reference into the Commission’s 

regulations at 18 CFR 38.2 and to 

implement the new standards adopted 

by NAESB that we propose here to 

incorporate by reference. 

FERC Collection No. Number of 

respondents 

Number of 

responses per 

respondent 

Hours per 

response 

Total number 

of hours 

(A) (B) (C) (A) × (B) × (C) 

Demand Response Standards .......... FERC–516 40 .................................... 6 1 4 24 

FERC–717 41 .................................... 6 1 9 54 

Energy Efficiency Standards ............. FERC–516 ........................................ 6 1 6 36 

FERC–717 ........................................ 6 1 12 72 

Total for FERC–516 ................... ........................................................... ........................ ........................ ........................ 78 

Total for FERC–717 ................... ........................................................... ........................ ........................ ........................ 108 

Total One-Time Burden ............. ........................................................... ........................ ........................ ........................ 186 

Total Annual Hours for Collection: 

(Reporting and Recordkeeping, (if 

appropriate)) = 186 hours. 

Information Collection Costs: The 

Commission seeks comments on the 

costs to comply with these 

requirements. It has projected the 

average annualized cost for all 

respondents to be the following: 42

FERC–516 FERC–717 

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

Demand Response Standards Annualized Costs (Operations & Maintenance) .................................................... N/A N/A 

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

Energy Efficiency Standards Annualized Costs (Operations & Maintenance) ....................................................... N/A N/A 

Demand Response Standards Total Annualized Costs .......................................................................................... 1,416 43 3,186 

Energy Efficiency Standards Total Annualized Costs ............................................................................................. 2,124 44 4,248 

All Standards Total Annualized Costs .............................................................................................................. 3,540 7,434 

28. OMB regulations require OMB to 

approve certain information collection 

requirements imposed by agency rule. 

The Commission is submitting 

notification of this proposed rule to 

OMB. These information collections are 

mandatory requirements. 

Title: Standards for Business Practices 

and Communication Protocols for 

Public Utilities (formerly Open Access 

Same Time Information System) (FERC– 

717); Electric Rate Schedule Filings 

(FERC–516). 

Action: Proposed collection. 

OMB Control No.: 1902–0096 (FERC– 

516); 1902–0173 (FERC–717). 

Respondents for This Rulemaking: 

RTOs and ISOs. 

Frequency of Responses: One-time 

implementation (business procedures, 

capital/start-up). 

Necessity of the Information: This 

proposed rule, if implemented, will 

help to standardize the methods and 

procedures used by RTOs and ISOs to 

accurately measure demand response 

and energy efficiency resource 

performance, thereby improving an 

RTO’s or ISO’s capability to detect anticompetitive or manipulative behavior. 

Additionally, this proposed rule will 

help RTOs and ISOs to properly credit 

demand response and energy efficiency 

resources for their efforts. 

29. Internal Review: The Commission 

has reviewed the business practice 

standards proposed in this NOPR and 

has made a preliminary determination 

that these standards are necessary to 

maintain consistency and help increase 

the effectiveness of RTO and ISO rules 

pertaining to measurement and 

verification of demand response and 

energy efficiency resource practices. 

The Commission has assured itself, by 

means of its internal review, that there 

is specific, objective support for the 

burden estimate associated with the 

information requirements. 

30. Interested persons may obtain 

information on the reporting 

requirements by contacting the Federal 

Energy Regulatory Commission, Office 

of the Executive Director, 888 First 

Street NE., Washington, DC 20426 

[Attention: Ellen Brown, email: 

DataClearance@ferc.gov, phone: (202) 

502–8663, fax: (202) 273–0873]. 

31. Comments concerning the 

information collections proposed in this 

NOPR and the associated burden 

estimates, should be sent to the 

Commission in this docket and may also 

be sent to the Office of Management and 

Budge, Office of Information and 

Regulatory Affairs, Washington, DC 

20503 [Attention: Desk Officer for the 

Federal Energy Regulatory 

Commission]. For security reasons, 

comments should be sent by email to 

OMB at the following email address: 

oira_submission@omb.eop.gov. Please 

reference FERC–xxx and the docket 

number of this proposed rulemaking 

(Docket No. RM05–5–020) in your 

submission. 

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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Proposed Rules 24433 

45Regulations Implementing the National 

Environmental Policy Act, Order No. 486, 52 FR 

47897 (Dec. 17, 1987), FERC Stats. & Regs. 

Regulations Preambles 1986–1990 ¶ 30,783 (1987). 

46 18 CFR 380.4. 

47See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 

380.4(a)(27). 

48 5 U.S.C. 601–612. 

49 13 CFR 121.101. 

50 13 CFR 121.201, Sector 22 Utilities n.1. 

51 5 U.S.C. 605(b). 

V. Environmental Analysis 

32. 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.45 The Commission has 

categorically excluded certain actions 

from these requirements as not having a 

significant effect on the human 

environment.46 The actions proposed to 

be taken here fall within categorical 

exclusions in the Commission’s 

regulations for rules that are corrective, 

clarifying, or procedural, for 

information gathering, analysis, and 

dissemination, and for sales, exchange, 

and transportation of electric power that 

requires no construction of facilities.47

Therefore an environmental review is 

unnecessary and has not been prepared 

in this rulemaking. 

VI. Regulatory Flexibility Act 

Certification 

33. The Regulatory Flexibility Act of 

1980 (RFA) 48 generally requires an 

administrative agency to perform an 

analysis of rulemakings that will have a 

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 

rulemaking while minimizing any 

significant economic impact on a 

substantial number of small entities. 

The Small Business Administration 

(SBA) develops the numerical definition 

of a small business.49 The SBA has 

established a size standard for electric 

utilities, stating that a firm is small if, 

including its affiliates, it is primarily 

engaged in the transmission, generation, 

and/or distribution of electric energy for 

sale and its total electric output for the 

preceding fiscal year did not exceed 

four million megawatt hours.50

34. The regulations proposed here 

impose requirements only on RTOs and 

ISOs, which are not small businesses. 

Moreover, these requirements are 

designed to benefit all customers, 

including small businesses. 

Accordingly, the Commission hereby 

certifies, pursuant to section 605(b) of 

the RFA,51 that the regulations proposed 

herein will not have a significant 

economic impact on a substantial 

number of small entities. 

VII. Comment Procedures 

35. The Commission invites interested 

persons to submit comments on the 

matters and issues proposed in this 

notice to be adopted, including any 

related matters or alternative proposals 

that commenters may wish to discuss. 

Comments are due June 25, 2012. 

Comments must refer to Docket No. 

RM05–5–020, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. 

36. The Commission encourages 

comments to be filed electronically via 

the eFiling link on the Commission’s 

Web site at http://www.ferc.gov. The 

Commission accepts most standard 

word processing formats. Documents 

created electronically using word 

processing software should be filed in 

native applications or print-to-PDF 

format and not in a scanned format. 

Commenters filing electronically do not 

need to make a paper filing. 

37. Commenters that are not able to 

file comments electronically must send 

an original of their comments to: 

Federal Energy Regulatory Commission, 

Secretary of the Commission, 888 First 

Street NE., Washington, DC 20426. 

38. All comments will be placed in 

the Commission’s public files and may 

be viewed, printed, or downloaded 

remotely as described in the Document 

Availability section below. Commenters 

on this proposal are not required to 

serve copies of their comments on other 

commenters. 

VIII. Document Availability 

39. 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 

business hours (8:30 a.m. to 5 p.m. 

Eastern time) at 888 First Street NE., 

Room 2A, Washington DC 20426. 

40. 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 excluding the 

last three digits of this document in the 

docket number field. 

41. User assistance is available for 

eLibrary and the Commission’s Web site 

during normal business hours from the 

Commission’s Online Support at 202– 

502–6652 (toll free at 1–866–208–3676) 

or email at ferconlinesupport@ferc.gov, 

or the Public Reference Room at (202) 

502–8371, TTY (202) 502–8659. Email 

the Public Reference Room at 

public.referenceroom@ferc.gov. 

List of Subjects in 18 CFR Part 38 

Conflicts of interests, Electric power 

plants, Electric utilities, Incorporation 

by reference, Reporting and 

recordkeeping requirements. 

By direction of the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

In consideration of the foregoing, the 

Commission proposes to amend Part 38, 

Chapter I, Title 18, Code of Federal 

Regulations, as follows. 

PART 38—BUSINESS PRACTICE 

STANDARDS AND COMMUNICATION 

PROTOCOLS FOR PUBLIC UTILITIES 

1. The authority citation for part 38 

continues to read as follows: 

Authority: 16 U.S.C. 791–825r, 2601–2645; 

31 U.S.C. 9701; 42 U.S.C. 7101–7352. 

2. Section 38.2 is amended by revising 

paragraph (a)(12) and adding paragraph 

(a)(13) to read as follows: 

§ 38.2 Incorporation by reference of 

North American Energy Standards 

Board Wholesale Electric Quadrant 

standards. 

(a) * * * 

(12) Business Practices for 

Measurement and Verification of 

Wholesale Electricity Demand Response 

(WEQ–015, 2010 Annual Plan Items 4(a) 

and 4(b), March 21, 2011). 

(13) Business Practice Standards for 

Measurement and Verification of Energy 

Efficiency Products (WEQ–021, 2010 

Annual Plan Item 4(d), May 13, 2011). 

* * * * * 

[FR Doc. 2012–9809 Filed 4–23–12; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 100 

[Docket No. USCG–2012–0201] 

RIN 1625–AA08 

Special Local Regulations; ODBA 

Draggin on the Waccamaw, Atlantic 

Intracoastal Waterway, Bucksport, SC 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

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