12540 Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Rules and Regulations 

1Preventing Undue Discrimination and 

Preference in Transmission Service, Order No. 890, 

72 FR 12,266 (March 15, 2007), FERC Stats. & Regs. 

¶ 31,241, order on reh’g, Order No. 890–A, 73 FR 

2984 (January 16, 2008), FERC Stats. & Regs. ¶ 

31,261 (2007), order on reh’g, Order No. 890–B, 123 

FERC ¶ 61,299 (2008). 

2Promoting Wholesale Competition Through 

Open Access Non-Discriminatory Transmission 

Services by Public Utilities; Recovery of Stranded 

Costs by Public Utilities and Transmitting Utilities, 

Order No. 888, 61 FR 21,540 (May 10, 1996), FERC 

Stats. & Regs. ¶ 31,026 (1996), order on reh’g, Order 

No. 888–A, 62 FR 12,274 (Mar. 14, 1997), FERC 

Stats. & Regs. ¶ 31,048 (1997), order on reh’g, Order 

No. 888–B, 81 FERC ¶ 61,248 (1997), order on reh’g, 

Order No. 888–C, 82 FERC ¶ 61,046 (1998, aff’d in 

relevant part sub nom. Transmission Access Policy 

Study Group v. FERC, 225 F.3d 667 (DC Cir. 

2000)(TAPS v. FERC), aff’d sub nom. New York v. 

FERC, 535 U.S. 1 (2002). 

3Order No. 890–B at P 15. 

percentage as total program allocations 

for the fiscal year fall below 

$209,724,761. 

* * * * * 

■ 4. Section 440.18 is amended by 

revising paragraphs (a) and (c) 

introductory text to read as follows: 

§ 440.18 Allowable expenditures. 

(a) Except as adjusted, the 

expenditure of financial assistance 

provided under this part for labor, 

weatherization materials, and related 

matters included in paragraphs (c)(1) 

through (9) of this section shall not 

exceed an average of $6,500 per 

dwelling unit weatherized in the State, 

except as adjusted in paragraph (c) of 

this section. 

* * * * * 

(c) The $6,500 average will be 

adjusted annually by DOE beginning in 

calendar year 2010 and the $3,000 

average for renewable energy systems 

will be adjusted annually by DOE 

beginning in calendar year 2007, by 

increasing the limitations by an amount 

equal to: 

* * * * * 

■ 5. Section 440.22 is amended by 

revising paragraph (a) to read as follows: 

§ 440.22 Eligible dwelling units. 

(a) A dwelling unit shall be eligible 

for weatherization assistance under this 

part if it is occupied by a family unit: 

(1) Whose income is at or below 200 

percent of the poverty level determined 

in accordance with criteria established 

by the Director of the Office of 

Management and Budget, 

(2) Which contains a member who has 

received cash assistance payments 

under Title IV or XVI of the Social 

Security Act or applicable State or local 

law at any time during the 12-month 

period preceding the determination of 

eligibility for weatherization assistance; 

or 

(3) If the State elects, is eligible for 

assistance under the Low-Income Home 

Energy Assistance Act of 1981, provided 

that such basis is at least 200 percent of 

the poverty level determined in 

accordance with criteria established by 

the Director of the Office of 

Management and Budget. 

* * * * * 

■ 6. Section 440.23 is amended by 

revising paragraph (e) to read as follows: 

§ 440.23 Oversight, training, and technical 

assistance. 

* * * * * 

(e) The Secretary may reserve from 

the funds appropriated for any fiscal 

year an amount not to exceed 20 percent 

to provide, directly or indirectly, 

training and technical assistance to any 

grantee or subgrantee. Such training and 

technical assistance may include 

providing information concerning 

conservation practices to occupants of 

eligible dwelling units. 

[FR Doc. E9–6628 Filed 3–24–09; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 37 

[Docket Nos. RM05–17–004 and RM05–25– 

004; Order No. 890–C] 

Preventing Undue Discrimination and 

Preference in Transmission Service 

March 19, 2009. 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Order on Rehearing and 

Clarification. 

SUMMARY: The Federal Energy 

Regulatory Commission affirms its basic 

determinations in Order Nos. 890, 890– 

A and 890–B, granting rehearing and 

clarification regarding certain revisions 

to its regulations and the pro forma 

open-access transmission tariff, or 

OATT, adopted in Order Nos. 888 and 

889 to ensure that transmission services 

are provided on a basis that is just, 

reasonable, and not unduly 

discriminatory. The Commission grants 

clarification of the degree of consistency 

required in the calculation of available 

transfer capability by transmission 

providers and denies rehearing 

regarding the requirement to 

undesignate network resources used to 

serve off-system sales 

DATES: Effective Date: This rule will 

become effective March 25, 2009. 

FOR FURTHER INFORMATION CONTACT: W. 

Mason Emnett, Office of the General 

Counsel—Energy Markets, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 20426, 

(202) 502–6540. 

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon 

Wellinghoff, Acting Chairman; Suedeen 

G. Kelly, Marc Spitzer, and Philip D. 

Moeller. 

1. On February 16, 2007, the 

Commission issued Order No. 890,1

addressing and remedying opportunities 

for undue discrimination under the pro 

forma Open Access Transmission Tariff 

(OATT) adopted in Order No. 888.2 The 

pro forma OATT was intended to foster 

greater competition in wholesale power 

markets by reducing barriers to entry in 

the provision of transmission service. In 

the ten years since Order No. 888, 

however, flaws in the pro forma OATT 

undermined its ability to realize the 

core objective of remedying undue 

discrimination. The Commission acted 

in Order No. 890 to correct these flaws 

by reforming the terms and conditions 

of the pro forma OATT in several 

critical areas, including the calculation 

of available transfer capability (ATC), 

the planning of transmission facilities, 

and the conditions of services offered by 

each transmission provider. 

2. In Order Nos. 890–A and 890–B, 

the Commission largely affirmed the 

reforms adopted in Order No. 890. The 

Commission concluded that, taken 

together, these reforms will better 

enable the pro forma OATT to achieve 

the core objective of remedying undue 

discrimination in the provision of 

transmission service. The Commission 

did, however, grant rehearing and 

clarification regarding certain revisions 

to its regulations and the pro forma 

OATT. NorthWestern Corporation 

(NorthWestern) and South Carolina 

Electric and Gas Co. (SCE&G) have 

requested further rehearing and 

clarification of Order No. 890–B on 

certain discrete issues, which we 

address below. 

I. Reforms of the OATT 

A. Consistency and Transparency of 

ATC Calculations 

3. In Order No. 890–B, the 

Commission among other things 

affirmed a clarification provided in 

Order No. 890–A that adjacent 

transmission providers must coordinate 

and exchange data and assumptions to 

achieve consistent available transfer 

capability (ATC) values on either side of 

a single interface.3 The Commission 

stated that it disagreed with petitioners 

arguing that consistent ATC values 


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Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Rules and Regulations 12541 

4Order No. 890–A at P 52. The Commission 

noted that the anticipated consistency is for 

available capability in the same direction across an 

interface. 

5See Order No. 890–B at P 9. 

6See id. P 9–10. 

7 Id. P 15. 

8 Id. 

9 Mandatory Reliability Standards for the 

Calculation of Available Transfer Capability, 

Capacity Benefit Margins, Transmission Reliability 

Margins, Total Transfer Capability, and Existing 

Transmission Commitments and Mandatory 

Reliability Standards for the Bulk-Power System, 

Notice of Proposed Rulemaking, Docket No. RM08– 

19–000, et al. (March 19, 2009). 126 FERC ¶ 61,249 

(2009). 

should not be interpreted to mean 

identical ATC values, but acknowledged 

that factors such as timing of reservation 

requests, acceptances, and 

confirmations, and multiple interfaces 

between and among transmission 

providers, can make it difficult to 

achieve coincidental, identical postings 

of ATC values on both sides of an 

interface. The Commission reiterated 

that, if all of the ATC components and 

certain data inputs and assumptions are 

consistent, the ATC calculation 

methodologies being finalized by the 

North American Electric Reliability 

Corporation (NERC) through the 

reliability standards development 

process should produce predictable and 

sufficiently accurate, consistent, 

equivalent, and replicable results. 

Requests for Clarification and Rehearing 

4. NorthWestern contends that, while 

requiring two adjacent transmission 

providers to post identical ATC at a 

single interface appears on its face to be 

reasonable, that requirement can have 

unintended and negative consequences. 

NorthWestern states the requirement 

may allow transmission customers to be 

able to block other market participants 

from requesting ATC without placing a 

transmission service request or 

following OATT requirements. 

NorthWestern offers an example of two 

transmission providers with a single 

interface and a customer that requests 

service on that interface from only one 

of the transmission providers. 

NorthWestern contends that the 

requirement to make ATC postings on 

either side of an interface identical 

would force the second transmission 

provider to reduce ATC on its side of 

the interface if the first transmission 

provider grants service to the customer, 

even though no request for service was 

submitted on the second transmission 

system, circumventing the first-come, 

first-served nature of transmission 

service under the pro forma OATT. 

5. NorthWestern contends that how 

transmission providers account for 

capacity benefit margin (CBM) and 

transmission reliability margin (TRM) 

on either side of an interface can have 

the same impact as a transmission 

service request. If one transmission 

provider sets aside capacity for CBM or 

TRM, NorthWestern contends that those 

set asides will force the transmission 

provider to decrement ATC on the other 

side of the interface. While 

NorthWestern understands the 

Commission’s desire to remove the 

potential for undue discrimination by 

requiring ATC calculations to be 

consistent and transparent, it contends 

that directing transmission providers to 

have identical ATC postings on either 

side of an interface will allow 

transmission providers and customers to 

block access to transmission service, 

either intentionally or not. 

6. NorthWestern therefore asks the 

Commission to grant rehearing to 

require that ATC on either side of an 

interface be consistent, rather than 

identical. NorthWestern suggests that a 

consistency requirement could be 

structured such that the transmission 

providers posting ATC for a single 

interface be able to transparently 

provide all necessary information that 

allows interested parties to determine 

why differences in ATC exist. 

Commission Determination 

7. The Commission clarifies that it did 

not intend in Order No. 890–B to 

require transmission providers to post 

identical ATC values on either side of 

an interface in every instance and at all 

times. While ATC values on either side 

of an interface may be identical in some 

instances, in others they may not. To the 

extent necessary, the Commission grants 

rehearing of Order No. 890–B to 

eliminate reference to the posting of 

identical ATC values on either side of 

an interface. 

8. In Order No. 890–A, the 

Commission clarified that adjacent 

transmission providers must coordinate 

and exchange data and assumptions to 

achieve consistent ATC values on either 

side of a single interface.4 The 

Commission explained that this 

requirement is applicable to any 

neighboring transmission providers no 

matter whether they use the same or 

different ATC methodologies. Several 

petitioners requested rehearing and 

clarification of this requirement, 

generally raising two arguments. First, 

they suggested that it would be more 

appropriate to require consistency of 

total transfer capability (TTC) on either 

side of an interface instead of 

consistency of ATC values.5 Second, 

they argued that any requirement to 

achieve consistent ATC values on either 

side of an interface should not be 

interpreted to mean identical ATC 

values.6 In response, the Commission 

stated that it disagreed with petitioners 

arguing that consistent ATC values 

should not be interpreted as identical, 

but went on to acknowledge that various 

factors (such as timing of reservation 

requests, acceptances and confirmation, 

or multiple interfaces between 

transmission providers) could make it 

difficult for transmission providers to 

achieve coincidental, identical postings 

of ATC values on either side of an 

interface.7 The Commission therefore 

reiterated that the ATC calculation 

methodologies being finalized by NERC 

‘‘should produce predictable and 

sufficiently accurate, consistent, 

equivalent, and replicable results.’’ 8

9. The requirement, then, is not to 

achieve identical postings of ATC 

values on either side of an interface, as 

NorthWestern contends. The 

requirement is, instead, to achieve 

consistency in such values through the 

development of ATC calculation 

methodologies that produce sufficiently 

accurate, consistent, equivalent, and 

replicable results. In some instances, it 

may be possible for transmission 

providers under these methodologies to 

achieve identical ATC values on either 

side of an interface. In others, such as 

when there are differences in 

reservation status or when there are 

multiple interfaces between the 

transmission providers, it may not be 

possible or even practical to achieve 

identical values. 

10. Since the issuance of Order No. 

890–B, NERC has submitted to the 

Commission six proposed Reliability 

Standards governing the calculation of 

ATC. In a companion order issued 

today, the Commission proposes to 

approve these Reliability Standards as 

just, reasonable, not unduly 

discriminatory or preferential, and in 

the public interest.9 The Commission 

will address in that proceeding whether 

the proposed Reliability Standards 

satisfy the requirements of Order No. 

890, as clarified above. 

B. Designation of Network Resources 

11. In Order No. 890–B, the 

Commission among other things 

clarified that the requirement for a 

network customer and the transmission 

provider’s merchant function to 

undesignate each portion of each 

resource used to support a sale of 

system power does not apply in the 

event the buyer and seller are located on 

the same transmission system and the 

buyer designates the system power as a 

network resource. The Commission 

explained that, when a seller’s network 


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10Reply Comments of South Carolina Electric & 

Gas Co. at 15, Docket No. RM05–25–000, et al. (Sep. 

20, 2006) (emphasis added). 

11Citing Order No. 890 at PP 1567 and 1582. 12See Order No. 890–B at P 206. 

resources are used to support an onsystem sale, the buyer meets the 

informational requirements of section 

29.2(v) of the pro forma OATT simply 

by identifying the seller’s system as the 

resource. In comparison, when a buyer 

does not designate a system purchase as 

a network resource, the point-to-point 

transmission reservation for taking 

delivery of the purchase and the 

corresponding resource-specific 

undesignation by the seller provide the 

transmission provider with the 

information it needs to accurately model 

the effect of the transaction on its 

transmission system and set aside ATC 

accordingly. 

Requests for Clarification and Rehearing 

12. SCE&G argues on rehearing that 

the Commission has unreasonably 

restricted the types of system sales that 

can be made from network resources 

without undesignation. SCE&G argues 

that, for purposes of performing 

transmission modeling and ATC 

calculations in conjunction with a given 

third-party sale, the transmission 

provider has all of the information that 

it needs regardless of whether the buyer 

is located on-system or off-system. 

According to SCE&G, transmission 

modeling relating to off-system sales is 

a routine matter in the industry and the 

practice of supporting such sales via 

slice-of-system undesignations has 

presented no obstacles to the execution 

of such modeling or any associated 

calculations. SCE&G contends that, 

when modeling transmission flows 

associated with an off-system sale, the 

neighboring systems (of the buyer and 

the seller) are evaluated on a systemwide basis and calculations reflecting 

the amount of the sale are properly 

performed in modeling the flow from 

the system of the seller to that of the 

buyer. 

13. SCE&G contends that modeling for 

slice-of-system sales, whether on-system 

or off-system, is designed to ensure not 

only accuracy, but also economic 

efficiency. SCE&G states that the 

modeling for such sales takes into 

account load forecasts for the relevant 

time period and, on the basis of such 

data, includes projections of which 

specific plants are likely to be involved 

in generating the incremental power 

that supports the sale, which in turn is 

reflected in the relevant economic 

dispatch plan. Because load forecasts 

invariably differ to at least some degree 

from the actual load that ultimately 

materializes, SCE&G contends that the 

modeling of any system sale includes 

appropriate alternate dispatch scenarios, 

to ensure that unit dispatch is 

performed in the correct economic order 

no matter what the actual load may 

eventually prove to be. For off-system 

sales, SCE&G states, the transmission 

provider takes the additional steps of 

recalculating ATC for the relevant 

interface and ensuring proper 

adjustment to posted ATC values. 

14. If sellers are denied the ability to 

use a slice-of-system undesignation to 

support an off-system sale, SCE&G states 

that their only alternative is to make 

unit-by-unit undesignations, which 

SCE&G contends is unworkable and 

inaccurate and could result in units 

having to be dispatched out of economic 

order. SCE&G states that purchasers 

often use such off-system firm 

transactions as a tool for ensuring their 

compliance with NERC and regional 

reliability council reserve requirements 

and related reliability requirements and 

that these transactions garner greater 

reliability benefits by virtue of being 

based on a share of an entire portfolio 

of generating units, rather than a single 

unit. SCE&G therefore asks the 

Commission to revisit its determination 

in Order No. 890–B and safeguard the 

ability to access and rely on off-system 

system sales. 

15. SCE&G argues that it is 

particularly ironic that the 

Commission’s initial clarification 

regarding the use of network resources 

to supply system sales is the outgrowth 

of a clarification sought by SCE&G in 

comments on the NOPR in this 

proceeding. In those comments, SCE&G 

requested that the Commission clarify 

‘‘exactly how to undesignate and 

redesignate [network resources] when 

the Transmission Provider/Network 

Customer is selling a block of firm 

power out of the system.’’ 10 SCE&G 

argues that, in responding to the request 

in Order No. 890, the Commission 

expressly acknowledged the off-system 

nature of the sales at issue and, 

therefore, its statement that ‘‘firm thirdparty sales may be made from an 

undesignated portion of [network 

resources]’’ appeared to apply to offsystem sales.11 SCE&G contends that the 

Commission’s determination in Order 

No. 890–B therefore cannot be squared 

with either the history of the 

Commission’s express treatment of the 

issue or standard industry practice. 

16. Should the Commission decline to 

grant rehearing as requested, SCE&G 

argues that the Commission at a 

minimum should grandfather long-term, 

still-continuing off-system sales sourced 

from designated network resources that 

were entered into prior to Order No. 

890–B in reliance of the Commission’s 

prior policy. 

Commission Determination 

17. The Commission affirms the 

requirement that network resources 

used to supply sales of system power to 

off-system buyers must first be 

undesignated.12 As we explained in 

Order No. 890, transactions in which a 

buyer and seller are both network 

customers located on the same 

transmission system are distinct from 

transactions involving sales of energy 

from a network customer to an offsystem buyer. In the latter circumstance, 

the off-system buyer will not be using 

network service to take delivery from 

the host transmission provider and, 

instead, must identify the points of 

receipt and delivery for the transaction 

on the host transmission provider’s 

system, i.e., the points where capacity 

and energy will be received from the 

seller and delivered to the buyer. The 

point-to-point transmission reservation 

and the corresponding resource-specific 

undesignation provide the transmission 

provider with the information it needs 

regarding the location of particular 

resources being used by the seller to 

source the transaction in order to model 

the effect of the transaction on its 

transmission system and set aside ATC 

accordingly. 

18. SCE&G contends that a resourcespecific undesignation of resources is 

unnecessary for a transmission provider 

to model an economic dispatch of 

resources to determine which specific 

plants are likely to be involved in 

generating the incremental power to 

support an off-system sale. Even if that 

is true in some circumstances, whether 

or not the transmission provider is able 

to analytically determine the likely 

units used to support a power sale does 

not affect the need of the buyer to 

identify the points of receipt and 

delivery on the host transmission 

system where capacity and energy will 

be received from the seller and 

delivered to the buyer. Because the 

buyer is not a network customer of the 

host transmission provider, it cannot 

use network service to take delivery. In 

order for the buyer to schedule point-topoint service to take delivery, the 

transmission customer must identify the 

point of receipt and delivery for the 

transaction. Even if the transmission 

provider has accurately modeled the 

seller’s optimal use of resources to 

supply the transaction, it is unclear how 

the buyer and seller would reflect that 

dispatch in the point-to-point 


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Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Rules and Regulations 12543 

13See Mandatory Reliability Standards for the 

Bulk-Power System, Order No. 693, FERC Stats. & 

Regs. ¶ 31,242, at P 1041, order on reh’g, Order No. 

693–A, 120 FERC ¶ 61,053 (2007). 

14See Order No. 890–A at P 948; Order No. 890– 

B at P 215. 

16See Arizona Public Service Co., 121 FERC 

¶ 61,246 at P 42 (2007). 

16See Order No. 890–A at P 951; Order No. 890– 

B at P 210. 

17See Order No. 890 at P 1582. 

18See Order No. 890–A at P 947. 

19See Order No. 890–B at P 205. 20 5 CFR 1320 (2007). 

reservation used to deliver the energy 

other than by identifying the particular 

point(s) of receipt for the transaction, 

which is tantamount to a resourcespecific undesignation of associated 

network resources. 

19. Transactions in which the buyer 

of system energy is a network customer 

located on-system are clearly 

distinguishable from those in which the 

buyer and seller are located on different 

systems. In the former circumstance, the 

host transmission provider knows the 

normal operating levels and variable 

energy costs for both network 

customers’ resources, the load forecasts 

for both network customers’ network 

loads, and any transmission constraints 

requiring redispatch. Section 29.2(v) of 

the pro forma OATT requires such 

information to be submitted for each of 

the two designations (the original 

designation of the capacity by the seller, 

and the subsequent designation of the 

capacity by the buyer) such that the 

local transmission provider is able to 

use such information to simultaneously 

determine the expected dispatches for 

each network customer. From these 

predictions, reasonable operating and 

contingency scenarios can be modeled 

in order to accurately determine what 

transmission capacity should be 

reasonably set aside to accommodate 

both network customers. That is not the 

case when one party to the transaction 

is located in another transmission 

system. 

20. As noted above, NERC recently 

submitted for Commission review 

proposed Reliability Standards to 

govern the calculation of ATC. One of 

the issues the Commission directed 

transmission providers to address in 

those Reliability Standards is the effect 

on ATC of designating and 

undesignating network resources.13

Although the Commission proposes in 

Docket Nos. RM08–19–000, et al., to 

approve the proposed Reliability 

Standards, the Commission notes that 

NERC failed to address the modeling of 

network resources and its impact on 

ATC calculations. The Commission 

proposes to direct NERC to develop a 

modification to the Reliability 

Standards to address this requirement. 

We encourage SCE&G and any other 

interested party to provide comments in 

that proceeding regarding the 

interaction of network resource 

designations and the calculation of 

ATC. Upon review of those comments 

and final action in that proceeding, the 

Commission may revisit its network 

resource policies as necessary to reflect 

the Reliability Standards implemented 

by NERC. 

21. In the meantime, we disagree with 

SCE&G that the Commission’s network 

resource policies unreasonably impair 

the ability of network customers to meet 

reserve requirements or related 

reliability requirements. In Order Nos. 

890–A and 890–B, the Commission 

made clear that network customers 

could use designated resources to fulfill 

obligations under a reserve sharing 

program.14 In other proceedings, the 

Commission has permitted transmission 

providers to amend their OATTs to 

allow network customers to use 

designated resources to supply power to 

other control areas during system 

emergencies.15 Moreover, the 

Commission has stated repeatedly that 

transmission providers are free to 

propose additional variations to the pro 

forma OATT to accommodate more 

flexible network resource policies if the 

particular ATC methodology used by a 

transmission provider allows for such 

flexibility.16

22. We also disagree with SCE&G that 

it would be appropriate to grandfather 

all long-term, still-continuing off-system 

sales sourced from designated network 

resources that were entered into prior to 

Order No. 890–B. In response to 

SCE&G’s NOPR comments, the 

Commission clearly stated that firm 

third-party sales may be made only from 

an undesignated portion of network 

resources and that a network customer 

must submit undesignations for each 

portion of each resource supporting the 

third-party sale.17 A number of 

petitioners sought rehearing and 

clarification of that statement, which led 

the Commission to conclude in Order 

No. 890–A that system sales could be 

supplied by network resources without 

undesignation if the system sale is itself 

designated as a network resource by the 

buyer.18 The Commission, however, did 

not specifically state that the buyer had 

to be a network customer on the same 

transmission system as the seller in 

order to qualify for this exception from 

the undesignation requirement. As a 

result, confusion arose regarding Order 

No. 890–A that was resolved in Order 

No. 890–B.19

23. It would therefore only be 

appropriate to allow an exception to the 

undesignation requirement for offsystem system sales that occurred after 

the issuance of Order No. 890–A, but 

before the clarification in Order No. 

890–B. During that six-month period, it 

may have been reasonable for a network 

customer to interpret the Commission’s 

statement in Order No. 890–A as 

allowing for off-system sales from 

network resource capacity undesignated 

on a general (as opposed to resourcespecific) basis if the buyer designated 

the purchase as an external network 

resource with its own transmission 

provider. Prior to issuance of Order No. 

890–A, however, there was no 

indication that such sales would be 

permitted without undesignation on a 

resource-specific basis. 

24. As such, we agree that a power 

sale initiated on or after the issuance 

date of Order No. 890–A, but before the 

effective date of Order No. 890–B, may 

be accommodated with capacity 

undesignated on a general basis, as 

described in paragraph 947 of Order No. 

890–A. Any network customer making 

such power sales, and which submitted 

a general undesignation for such power 

sales between those dates, is not 

considered to be in violation of section 

30.4 as a result of operation of such 

resources. Network customers may rely 

on such undesignation(s) until the 

redesignation date (for resources 

temporarily terminated) or the 

expiration of the current term of the 

power sales contract (for resources 

indefinitely terminated). 

II. Information Collection Statement 

25. The Office of Management and 

Budget (OMB) regulations require that 

OMB approve certain information 

collection requirements imposed by an 

agency.20 The revisions to the 

information collection requirements for 

transmission providers adopted in 

Order No. 890 were approved under 

OMB Control Nos. 1902–0233. This 

order does not substantively alter those 

requirements. OMB approval of this 

order is therefore unnecessary. 

However, the Commission will send a 

copy of this order to OMB for 

informational purposes only. 

III. Document Availability 

26. In addition to publishing the full 

text of this document in the Federal 

Register, the Commission provides all 

interested persons an opportunity to 

view and/or print the contents of this 

document via the Internet through 

FERC’s Home Page (http://www.ferc.gov) 


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12544 Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Rules and Regulations 

1 Mandatory Reliability Standards for Critical 

Infrastructure Protection, Order No. 706, 122 FERC 

¶ 61,040, order on reh’g, Order No. 706–A, 123 

FERC ¶ 61,174 (2008). 

2CIP Reliability Standards CIP–002–1 through 

CIP–009–1 (CIP Reliability Standards) were 

approved by Order No. 706. Reliability Standard 

CIP–001–1, which pertains to sabotage reporting, 

was not a subject of Order No. 706 and does not 

include the exemption statement that is the subject 

of this order. 

3 16 U.S.C. 824o (2006). 

4 16 U.S.C. 824o(d)(5)(2006). 

5Reliability Standard CIP–002–1, section 4.2 

(Applicability). 

6 In December 2008, the NRC approved a final 

rule that included cyber security-related regulations 

applicable to nuclear power plant licensees. The 

regulations, referred to herein as the ‘‘NRC cyber 

security regulations,’’ have not been published in 

the Federal Register at this time and are not 

currently in effect. They will be codified at 10 CFR 

73.54. See Final Rulemaking—Power Reactor 

Security Requirements, SECY–08–0099 (Jul. 9, 

2008); Press Release: NRC Approves Final Rule 

Expanding Security Requirements for Nuclear 

Power Plants, (Dec. 17, 2008), available at http:// 

www.nrc.gov/reading-rm/doc-collections/news/ 

2008/08–227.html. 

7April 8, 2008, Joint Meeting of the Nuclear 

Regulatory Commission and Federal Energy 

Regulatory Commission, Tr. at 77–78. 

8 Mandatory Reliability Standards for Critical 

Infrastructure Protection, Order on Proposed 

Clarification, 124 FERC ¶ 61,247 (2008) (Proposed 

Clarification). 

and in FERC’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. 

27. From FERC’s Home Page on the 

Internet, this information is available on 

eLibrary. The full text of this document 

is available on eLibrary in PDF and 

Microsoft Word format for viewing, 

printing, and/or downloading. To access 

this document in eLibrary, type the 

docket number excluding the last three 

digits of this document in the docket 

number field. 

28. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from FERC 

Online Support at 202–502–6652 (toll 

free at 1–866–208–3676) or e-mail at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

IV. Effective Date and Congressional 

Notification 

29. This order does not substantively 

alter the requirements of Order Nos. 

890, 890–A or 890–B and, therefore, will 

become effective as of the date of 

publication in the Federal Register. 

By the Commission. 

Kimberly D. Bose, 

Secretary. 

[FR Doc. E9–6502 Filed 3–24–09; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 40 

[Docket No. RM06–22–000; Order No. 706– 

B] 

Mandatory Reliability Standards for 

Critical Infrastructure Protection 

Issued March 19, 2009. 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Order on Clarification. 

SUMMARY: The Commission clarifies that 

the facilities within a nuclear generation 

plant in the United States that are not 

regulated by the U.S. Nuclear 

Regulatory Commission are subject to 

compliance with the eight mandatory 

‘‘CIP’’ Reliability Standards approved in 

Commission Order No. 706. 

DATES: Effective Date: This rule will 

become effective March 25, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Jonathan First (Legal Information), 

Office of General Counsel, 888 First 

Street, NE., Washington, DC 20426, 

(202) 502–8529. 

Regis Binder (Technical Information), 

Office of Electric Reliability, 888 First 

Street, NE., Washington, DC 20426, 

(301) 665–1601. 

SUPPLEMENTARY INFORMATION: Before 

Commissioners: Jon Wellinghoff, Acting 

Chairman; Suedeen G. Kelly, Marc 

Spiter, and Philip D. Moeller. 1. In this 

order, the Commission clarifies the 

scope of the Critical Infrastructure 

Protection (CIP) Reliability Standards 

approved in Order No. 706 1 to assure 

that no ‘‘gap’’ occurs in the applicability 

of these Standards.2 In particular, each 

of the CIP Reliability Standards 

provides that facilities regulated by the 

U.S. Nuclear Regulatory Commission 

(NRC) are exempt from the Standard. It 

has come to the attention of the 

Commission that NRC regulations do 

not extend to all equipment within a 

nuclear power plant. Thus, to assure 

that there is no ‘‘gap’’ in the regulatory 

process, the Commission clarifies that 

the ‘‘balance of plant’’ equipment 

within a nuclear power plant in the 

United States that is not regulated by 

the NRC is subject to compliance with 

the CIP Reliability Standards approved 

in Order No. 706. 

I. Background 

2. The North American Electric 

Reliability Corporation (NERC), the 

Commission-certified Electric 

Reliability Organization (ERO), 

developed the CIP Reliability Standards 

that require certain users, owners and 

operators of the Bulk-Power System, 

including generator owners and 

operators, to comply with specific 

requirements to safeguard critical cyber 

assets. In January 2008, pursuant to 

section 215 of the Federal Power Act 

(FPA),3 the Commission approved the 

CIP Reliability Standards. In addition, 

pursuant to section 215(d)(5) of the 

FPA,4 the Commission directed the ERO 

to develop modifications to the CIP 

Reliability Standards to address specific 

concerns identified by the Commission. 

3. Each CIP Reliability Standard 

includes an exemption for facilities 

regulated by the NRC. For example, 

Reliability Standard CIP–002–1 

provides: 

The following are exempt from Standard 

CIP–002: Facilities regulated by the U.S. 

Nuclear Regulatory Commission * * *.5

4. In an April 8, 2008 public joint 

meeting of the Commission and the 

NRC, staff of both Commissions 

discussed cyber security at nuclear 

power plants. While indicating that the 

NRC has proposed regulations to 

address cyber security at nuclear power 

plants, NRC staff raised a concern 

regarding a potential gap in regulatory 

coverage.6 In particular, NRC staff 

indicated that the NRC’s proposed 

regulations on cyber security would not 

apply to all systems within a nuclear 

power plant. NRC staff explained: 

The NRC’s cyber requirements are not 

going to extend to power continuity systems. 

They do not extend directly to what is not 

directly associated with reactor safety 

security or emergency response. * * * 

As a result, and when you look at the CIP 

standards that were issued, there is a discrete 

statement in each of the seven or eight 

standards where it specifically exempts 

facilities regulated by the United States 

Nuclear Regulatory Commission from 

compliance with those CIP Standards. So 

there is an issue there in the sense that our 

regulations for cyber security go up to a 

certain point, and end.7

5. On September 18, 2008, the 

Commission issued an Order on 

Proposed Clarification,8 explaining its 

concern that a gap may exist in the 

regulatory process due to the provision 

in each of the CIP Reliability Standards 

exempting ‘‘facilities regulated by the 

U.S. Nuclear Regulatory Commission.’’ 

On the understanding that some 

facilities within a nuclear power plant 

would not be subject to compliance 

with cyber security regulations 

developed by the NRC, the Commission 

proposed to clarify that the facilities 


sroberts on PROD1PC70 with RULES