Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 54033 

1 16 U.S.C. 824o(e)(2) (2006). 

2 16 U.S.C. 824o(c) (2006). 

3 Id. § 824o(e). 

4North American Electric Reliability Corp., 116 

FERC ¶ 61,062, order on reh’g and compliance, 117 

FERC ¶ 61,126 (2006), order on compliance, 118 

FERC ¶ 61,030, order on compliance, 118 FERC 

¶ 61,190, order on reh’g, 119 FERC ¶ 61,046 (2007), 

aff’d sub nom. Alcoa Inc. v. FERC, 554 F.3d 1342 

(D.C. Cir., 2009). 

5 Mandatory Reliability Standards for the BulkPower System, Order No. 693, FERC Stats & Regs. 

¶ 31,242, order on reh’g, Order No. 693–A, 120 

FERC ¶ 61,053 (2007). 

6North American Electric Reliability Corp., 119 

FERC ¶ 61,060, order on reh’g, ¶ 61,260 (2007). 

7 18 CFR 39.2(c) (2009). 

8The Commission accepted the NERC Registry 

Criteria in Order No. 693, FERC Stats. & Regs. 

¶ 31,242 at P 93–95. 

9Rules Concerning Certification of the Electric 

Reliability Organization; and Procedures for the 

Establishment, Approval, and Enforcement of 

Electric Reliability Standards, Order No. 672, FERC 

Stats. & Regs. ¶ 31,204 at P 506, order on reh’g, 

Order No. 672–A, FERC Stats. & Regs. ¶ 31,212 

(2006). 

FERCOnlineSupport@ferc.gov, or call 

(866) 208–3676 (toll free). For TTY, call 

(202) 502–8659. 

Comment Date: 5 p.m. Eastern Time 

on November 9, 2009. 

Kimberly D. Bose, 

Secretary. 

[FR Doc. E9–25257 Filed 10–20–09; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. EL10–3–000] 

Citizens Energy Corporation; Notice of 

Filing 

October 14, 2009. 

Take notice that on October 9, 2009, 

pursuant to Rule 207 of the Federal 

Energy Regulatory Commission’s Rules 

of Practice and Procedure, 18 CFR 

385.207 (2006), Section 219 of the 

Federal Power Act, 16 U.S.C. 791a– 

828c, 824s, and Order No. 679, 

Promoting Transmission Investment 

Through Pricing Reform, Order No. 679, 

116 FERC 61,057, order on reh’g, 117 

FERC 61,345 (2006) (Order No. 679A) 

(Incentive Pricing Rule), Citizens Energy 

Corporation filed a Petition for 

Declaratory Order requesting 

Commission approval of two rate 

treatments for the Sunrise Powerlink 

Transmission Project, located in 

Imperial Valley, California. 

Any person desiring to intervene or to 

protest this filing must file in 

accordance with Rules 211 and 214 of 

the Commission’s Rules of Practice and 

Procedure (18 CFR 385.211, 385.214). 

Protests will be considered by the 

Commission in determining the 

appropriate action to be taken, but will 

not serve to make protestants parties to 

the proceeding. Any person wishing to 

become a party must file a notice of 

intervention or motion to intervene, as 

appropriate. Such notices, motions, or 

protests must be filed on or before the 

comment date. On or before the 

comment date, it is not necessary to 

serve motions to intervene or protests 

on persons other than the Applicant. 

The Commission encourages 

electronic submission of protests and 

interventions in lieu of paper using the 

‘‘eFiling’’ link at http://www.ferc.gov. 

Persons unable to file electronically 

should submit an original and 14 copies 

of the protest or intervention to the 

Federal Energy Regulatory Commission, 

888 First Street, NE., Washington, DC 

20426. 

This filing is accessible on-line at 

http://www.ferc.gov, using the 

‘‘eLibrary’’ link and is available for 

review in the Commission’s Public 

Reference Room in Washington, DC. 

There is an ‘‘eSubscription’’ link on the 

Web site that enables subscribers to 

receive e-mail notification when a 

document is added to a subscribed 

docket(s). For assistance with any FERC 

Online service, please e-mail 

FERCOnlineSupport@ferc.gov, or call 

(866) 208–3676 (toll free). For TTY, call 

(202) 502–8659. 

Comment Date: 5 p.m. Eastern Time 

on November 9, 2009. 

Kimberly D. Bose, 

Secretary. 

[FR Doc. E9–25255 Filed 10–20–09; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. NP09–26–000] 

North American Electric Reliability 

Corporation; Order Addressing 

Applicability of Section 215 of the 

Federal Power Act to Federal Entities 

October 15, 2009. 

1. On June 24, 2009, the North 

American Electric Reliability 

Corporation (NERC) filed a Notice of 

Penalty for a self-certified violation of a 

Commission-approved Reliability 

Standard by the U.S. Army Corps of 

Engineers (Corps)-Tulsa District. In that 

filing, NERC requested that the 

Commission issue a decision addressing 

the jurisdictional issue of whether, 

pursuant to section 215 of the Federal 

Power Act (FPA), federal entities that 

use, own, or operate the Bulk-Power 

System, such as the Corps-Tulsa 

District, must comply with mandatory 

Reliability Standards. 

2. The Corps-Tulsa District did not 

seek Commission review of the Notice 

of Penalty, which took effect on the 31st 

day after filing pursuant to section 

215(e)(2) of the FPA.1 In this order, we 

affirm that, pursuant to section 215 of 

the FPA, the Corps-Tulsa District and 

other federal entities that use, own, or 

operate the Bulk-Power System must 

comply with mandatory Reliability 

Standards. 

Background 

A. Statutory Framework 

3. Section 215 of the FPA authorizes 

the Commission to certify and oversee 

an electric reliability organization 

(ERO), which is responsible for 

developing and enforcing mandatory 

Reliability Standards that are applicable 

to owners, users, and operators of the 

Bulk-Power System.2 Section 215(e) 

authorizes the ERO, as well as the 

Commission on its own motion or on 

complaint, to assess penalties for 

violation of Reliability Standards.3

Exercising this statutory authority, the 

Commission certified NERC as the 

ERO 4 and initially approved 83 

Reliability Standards.5 Further, 

consistent with the statute, NERC as the 

ERO delegated to eight Regional 

Entities, including Texas Regional 

Entity, authority to, inter alia, enforce 

mandatory Reliability Standards.6

4. Users, owners, and operators of the 

Bulk-Power System are required to 

register with NERC.7 NERC’s 

Compliance Registry identifies all 

entities subject to compliance with the 

approved Reliability Standards. Further, 

NERC has developed a statement of 

Registry Criteria that is employed by 

NERC and the Regional Entities to 

determine which organizations should 

be registered because they are material 

to the reliability of the Bulk-Power 

System.8 In cases where an entity is 

registered involuntarily by NERC, that 

entity has an opportunity to timely 

appeal its registration status in 

accordance with Rule 504 and 

Appendix 5 to NERC’s Rules of 

Procedure. 

5. NERC must file a Notice of Penalty 

with the Commission before a Regional 

Entity or NERC penalty assessment for 

the violation of a Reliability Standard 

takes effect.9 Each penalty 

determination is subject to Commission 

review, on its own motion or by an 

application for review by the recipient 


jlentini on DSKJ8SOYB1PROD with NOTICES
54034 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

10 16 U.S.C. 824o(e)(2) (2006). 11Texas Regional Entity is an independent 

division of the Electric Reliability Council of Texas, 

Inc. (ERCOT). 12PRC–005–1 requires that all generation 

protection systems affecting the reliability of the 

bulk electric system be maintained and tested. 

Requirement R1 requires each generator owner that 

owns a generation protection system to have a 

protection system maintenance and testing program 

for protection systems that affect the reliability of 

the Bulk-Power System. Requirement R1.1 requires 

that this program include maintenance and testing 

intervals and their basis. Texas Regional Entity 

subsequently determined that the Corp-Tulsa 

District did not violate PRC–005–1, Requirement R2 

and it dismissed that violation. 

13NERC June 24, 2009 Filing, attachment b (COE– 

Tulsa District response to the Notice of Alleged 

Violation and Proposed Penalty and Sanction, 

November 20, 2007). 

14North American Electric Reliability Corp., 128 

FERC ¶ 61,088 (2009). 

15 Id. at n.1. 

16Notice of Penalty at 7. 

of a penalty, within thirty days from the 

date NERC files the applicable Notice of 

Penalty.10 In the absence of the filing of 

an application for review of a penalty or 

motion or other action by the 

Commission, each penalty filed by 

NERC is affirmed by operation of law 

upon the expiration of the applicable 

thirty-day period. 

B. Notice of Penalty 

1. Corps-Tulsa District Violation 

6. The Corps-Tulsa District owns a 

hydropower project called the Denison 

Project Generator, located on the Red 

River in Bryan County, Oklahoma and 

Grayson County, Texas. The Denison 

project has two main generators with a 

maximum plant capacity of 80 

megawatts. Texas Regional Entity 

registered the Corps-Tulsa District in 

June 2007 as a generator owner. 

According to NERC, the Corps-Tulsa 

District was provided notice of the 

registration and did not appeal its 

registration status. 

7. On June 24, 2009, NERC submitted 

a Notice of Penalty incorporating the 

findings and justifications set forth in a 

Notice of Confirmed Violation and 

Proposed Penalty or Sanction issued on 

February 20, 2008, by the Texas 

Regional Entity.11 According to NERC, 

the Corps-Tulsa District self-certified on 

October 3, 2007, non-compliance with 

Reliability Standard PRC–005–1 

Requirements R1.1 and R2 for its 

Denison Project Generator.12 NERC 

states that, in the self-certification, the 

Corps-Tulsa District argued that, as a 

governmental entity, it was not required 

to comply with section 215 of the FPA. 

According to NERC, the Corps stated 

that, because of this uncertainty, it was 

not in a position to register with the 

Regional Entity, but that it would strive 

to meet the electric Reliability 

Standards established pursuant to 

section 215 of the FPA, subject to the 

availability of funds appropriated by 

Congress and project operation 

requirements. 

8. On October 31, 2007, Texas 

Regional Entity issued an Initial Notice 

of Alleged Violation and, subsequently, 

a Notice of Alleged Violation and 

Proposed Penalty or Sanction 

(NAVAPS). NERC states that the CorpsTulsa District responded to the 

NAVAPS on November 20, 2007, but 

did not make the required election of 

agreeing with/not contesting or 

contesting the alleged violations and/or 

penalty. Instead, according to NERC, the 

Corps-Tulsa District asserted that the 

self-reporting data it provided on 

October 3, 2007 to Texas Regional Entity 

was provided on a voluntary basis, that 

the submission did not constitute entity 

registration or a recognition of 

jurisdiction by the Corps, and that the 

Corps is not in a position to register 

with the Corps-Tulsa District’s 

respective reliability organization. 

NERC states that the Corps-Tulsa 

District further stated that, in order ‘‘[t]o 

avoid substantial changes to preliminary 

mitigation plans as a result of the 

[Corps’] forthcoming national policy, a 

mitigation plan for this non-compliance 

will not be submitted until this national 

policy has been completed,’’ and that it 

will ‘‘voluntarily conform to the 

reliability standards * * * [t]o the 

extent [its] current appropriations allow 

[it] to comply with the Act.’’ 13

9. NERC states that on January 17, 

2008, Texas Regional Entity issued a 

letter to the Corps-Tulsa District 

directing it to submit an acceptable 

mitigation plan within ten days. The 

Corps-Tulsa District responded asserting 

that it was unclear whether it is subject 

to the requirements of section 215 of the 

FPA, but that it intended to make all 

reasonable efforts to voluntarily comply 

with the Reliability Standards while 

remaining within the funding level 

provided by Congress. The Corps-Tulsa 

District stated that it was awaiting 

receipt of national policy guidance 

regarding submission of mitigation 

plans, and projected that it would be 

able to provide a final regional 

mitigation plan by October 2008. 

10. NERC states that on January 30, 

2008, the Corps-Tulsa District submitted 

a mitigation plan to Texas Regional 

Entity but again reiterated its belief that 

section 215 of the FPA does not apply 

to the Corps-Tulsa District because it 

does not contain a clear, unequivocally 

expressed waiver of sovereign 

immunity, which, the Corps-Tulsa 

District argues, is necessary for any 

entity to exercise jurisdiction over a 

federal agency. The Corps-Tulsa District 

also reiterated that it intended to make 

all reasonable efforts to voluntarily 

comply with NERC Reliability 

Standards so long as it can do so within 

the funding levels authorized to it by 

Congress. 

11. Texas Regional Entity proposed a 

zero dollar penalty. After NERC review, 

NERC submitted the Notice of Penalty to 

the Commission on June 24, 2009. The 

penalty became effective by operation of 

law on July 27, 2009, and the 

Commission issued notice to that 

effect.14 The Commission noted that the 

Corps-Tulsa District has challenged the 

applicability of mandatory Reliability 

Standards under section 215 of the FPA, 

that the Commission has sought 

comments on the applicability of 

mandatory Reliability Standards to the 

U.S. Army Corps of Engineers and other 

federal agencies, and that it would 

address this issue separately.15

2. NERC Request for Decision on 

Jurisdictional Matter 

12. In the Notice of Penalty, NERC 

states that the Corps-Tulsa District ‘‘has 

challenged NERC’s jurisdiction (and 

therefore that of the Commission) under 

section 215 of the FPA.’’ 16 NERC, 

however, believes that the Corps-Tulsa 

District is subject to mandatory 

Reliability Standards under section 215 

and requests that the Commission, 

regardless of whether the Corps-Tulsa 

District seeks Commission review of the 

Notice of Penalty, issue a decision on 

the scope of NERC’s and the 

Commission’s jurisdiction under section 

215 of the FPA. 

13. In support of its position, NERC 

states that section 215 (b)(1) of the FPA 

provides that ‘‘[t]he Commission shall 

have jurisdiction * * * over * * * all 

users, owners, and operators of the bulkpower system, including but not limited 

to the entities described in section 

201(f), for purposes of approving 

reliability standards established under 

this section and enforcing compliance 

with this section.’’ NERC argues that 

section 201(f) of the FPA describes 

agencies or instrumentalities of the 

United States and thus these entities are 

expressly included within the term 

‘‘users, owners, and operators of the 

bulk-power system’’ in section 215 and 

made subject to the Commission’s 

jurisdiction to both approve and enforce 

Reliability Standards. 

14. In further support, NERC states 

that Congress, in the Energy Policy Act 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 54035 

17Energy Policy Act of 2005 (EPAct 2005), Pub. 

L. No 109–58, Title XII, Subtitle A, 119 Stat. 594, 

941 (2005). 

18Citing Cong. Rec. 1874 (March 14, 2002). 

19Citing General Accounting Office, Draft 

Legislation Concerning an Electric Reliability 

Organization, at 3, n.5 (March 18, 2003). 

20The Commission recognizes that the DOE has 

a concern that the possibility of civil penalties for 

federal entities may cause litigation in a number of 

proceedings; however, given that the issue of civil 

fines is beyond the scope of this proceeding, we do 

not discuss DOE’s motion here. See infra P 32. 

21According to the Corps’ January 31, 2007 Civil 

Works Information Paper, all 75 of its hydropower 

plants are Civil Works projects. U.S. Army Corps of 

Engineers, Civil Works Program Statistics (January 

31, 2007) available at http://140.194.76.129/cw/ 

cecwb/GWiz07.pdf. 

of 2005,17 made technical and 

conforming amendments to the FPA that 

were necessitated by the substantive 

changes to the FPA, including the 

addition of section 215. As part of these 

changes, FPA section 201(b), which 

establishes the applicability of Part II of 

the FPA, was amended to expressly add 

‘‘section 215’’ to the list of sections of 

the FPA enumerated in section 201(b)(2) 

and to add ‘‘[n]otwithstanding section 

201(f)’’ to the beginning of section 

201(b)(2). NERC argues that the specific 

provisions of section 201(b)(2) override 

the general language of section 201(f), 

which excludes the United States from 

the application of Part II of the FPA. 

Thus, NERC argues that section 

201(b)(2) provides further confirmation 

that the United States is subject to 

section 215 and to Commission 

jurisdiction both for carrying out the 

provisions of sections 215 and for 

enforcing those provisions. 

15. Finally, NERC looks to the 

legislative history of the Energy Policy 

Act of 2005 and in particular, to the 

debate surrounding the Thomas 

amendment, which was adopted by the 

United States Senate in 2002 and which 

was a precursor to FPA section 215. 

NERC points to an explanation offered 

by Senator Thomas, the author of that 

amendment, stating ‘‘[t]he new 

reliability organization will have 

enforcement powers with real teeth to 

ensure reliability. The amendment 

provides that mandatory reliability rules 

will apply to all users of the 

transmission grid. There are no 

loopholes. No one will be exempt.’’ 18

NERC notes that Senator Bingaman also 

stated that ‘‘[t]he reliability system 

needs to apply to all users.’’ In addition, 

NERC quotes a later analysis of 

substantively similar reliability 

legislation by the General Accounting 

Office acknowledging the applicability 

of reliability rules to federal entities: 

‘‘All users, owners and operators of the 

bulk-power system would have to 

comply with the reliability standards. 

* * * We understand this would 

include both private entities and 

Federal entities (such as the Tennessee 

Valley Authority, the Bonneville Power 

Administration, and other federal 

marketing agencies), among others.’’ 19

Notice of Filing and Comments 

16. Notice of NERC’s June 24, 2009 

filing was published in the Federal 

Register, 74 FR 32,153 (2009), with 

comments due on or before July 24, 

2009. By notice published July 24, 2009, 

the comment period was extended to 

August 24, 2009. 

17. The Corps filed a motion to 

intervene and comments regarding the 

applicability of Reliability Standards 

under section 215 of the FPA. 

18. In addition, Western Electricity 

Coordinating Council (WECC), Tex-La 

Electric Cooperative of Texas, Inc., 

SERC Reliability Corporation, and the 

Midwest Reliability Organization filed 

motions to intervene. Mid-West Electric 

Consumers Association and the 

Southwestern Power Resources 

Association (collectively, Federal Power 

Customers), Texas Regional Entity, the 

National Rural Electric Cooperative 

Association (NRECA), the United States 

Department of Energy (DOE), 

ReliabilityFirst Corporation 

(ReliabilityFirst), the Southeastern 

Federal Power Customers, Inc. 

(Southeastern Customers) and the 

United States Department of the Interior 

(Interior) filed motions to intervene and 

comments. The Department of the 

Army, Office of the Assistant Secretary 

for Civil Works (Department of the 

Army), filed comments. The Southwest 

Transmission Dependent Utility Group 

(Southwest Utility Districts), Tri-State 

Generation and Transmission 

Association, Inc. (Tri-State) filed 

motions to intervene and protests. 

19. On September 8, 2009, NERC filed 

reply comments. On September 23, 

2009, the Corps filed an objection to 

NERC’s motion for leave to file reply 

comments. On October 7, 2009, DOE 

filed a response to NERC’s reply 

comments. On October 7, 2009, DOE 

also filed a motion for a stay to suspend 

enforcement activity only in those cases 

where a civil fine against a DOE entity 

is at issue.20

A. The Corps’ Comments 

20. The Corps states that it currently 

operates 75 hydropower plants 

nationwide and they account for three 

percent of the nation’s total electrical 

capacity. The Corps states that the 

Denison powerhouse, the subject of 

NERC’s Notice of Penalty, is operated as 

a peaking plant with approximately 37 

percent plant annual capacity factor. 

The Corps also states that although there 

are two transmission lines going into the 

Denison switchyard, only the 

transmission line going into Texas is 

being utilized for transmission of power 

from the Denison powerhouse. The 

other line is energized up to an open 

breaker and associated disconnecting 

switch in the switchyard. According to 

the Corps, while it is possible to 

transmit power both into Oklahoma and 

Texas simultaneously using individual 

units, the two systems can never be 

connected together without resulting in 

equipment damage. A ‘‘bus tie’’ breaker 

is used to separate the two units for this 

type of operation. Therefore, the Corps 

asserts that this switchyard is treated as 

a radial transmission line with no 

critical connection to the ERCOT 

system. The Corps further asserts that 

since no power is ‘‘wheeled’’ through 

the switchyard to serve another load, 

NERC has not alleged that if the 

switchyard equipment fails, there will 

be an adverse effect on the reliability of 

the Bulk Power System. 

21. The Corps contends that section 

215 does not grant the Commission or 

NERC jurisdiction over Corps-owned 

hydroelectric generating facilities at its 

Civil Works projects.21 The Corps adds 

that NERC’s analysis is flawed in that 

the Corps has numerous hydropower 

projects and in order to respond to 

NERC’s filing, which is essentially a 

request for declaratory judgment, the 

Corps must address the unique 

configurations of each of its facilities, 

although only one was involved in the 

Notice of Penalty. The Corps asserts that 

this violates its due process rights 

because only the Denison Generator 

Project has been cited. The Corps also 

asserts that Congress has not waived the 

Corps’ sovereign immunity, and thus, 

NERC cannot issue monetary penalties 

against the Corps. Further, the Corps 

asserts that the legal dispute should be 

submitted to the Attorney General, not 

through the Commission’s notice and 

comment process. 

B. Other Comments and Protests 

22. The Department of the Army, 

NRECA, Southwest Utility Districts, and 

Interior raise procedural issues. The 

Department of the Army states that the 

Department of Justice’s Office of Legal 

Counsel, and not the Commission’s 

adjudicatory process, is the proper 

forum for resolving the disagreement on 

implementation of section 215 of the 

FPA. NRECA states that it supports 

NERC’s need for clarity regarding the 

scope of its jurisdiction under section 

215 but does not believe a specific 


jlentini on DSKJ8SOYB1PROD with NOTICES
54036 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

22ReliabilityFirst Comments at 5. 23 16 U.S.C. 824o(b)(1) (2006). 

24Citing Southeastern Power Administration, 125 

FERC ¶ 61,294, at P 24 (2008). 

25Citing Office of Pers. Management v. 

Richmond, 496 U.S. 414, 424–25 (1990); Cincinnati 

Soap Co. v. United States, 301 U.S. 308, 321 (1937). 

penalty proceeding is appropriate for 

resolving this broad issue involving 

multiple federal agencies and one or 

more cabinet-level departments. NRECA 

states that it would be more appropriate 

for the Commission to temporarily 

suspend the procedural schedule in this 

docket and confer with the Corps and 

other federal agencies. Interior states 

that the proceeding should be stayed to 

allow for prompt interagency resolution 

of the relevant jurisdictional issues. 

Southwest Utility Districts state that the 

Commission should create a list of 

specific issues and seek supplemental 

briefing of the parties who do intervene 

in this proceeding and of federal 

agencies that do not intervene but could 

file subsequent comments. 

23. Texas Regional Entity, WECC, and 

ReliabilityFirst agree with NERC’s 

conclusion that federal entities such as 

the Corps-Tulsa District are subject to 

mandatory Reliability Standards under 

section 215 of the FPA, including its 

penalty and sanction provisions. Texas 

Regional Entity reiterates the 

information described in NERC’s Notice 

of Penalty and requests that the 

Commission affirm jurisdiction by the 

Commission and NERC over the CorpsTulsa District under section 215 of the 

FPA. ReliabilityFirst asserts that a 

determination that exempts federal 

entities from the Commission’s section 

215 jurisdiction would have farreaching implications for the reliability 

of the Bulk-Power System. According to 

ReliabilityFirst, federal entities are an 

important part of the users, owners, and 

operators of the Bulk-Power System in 

ReliabilityFirst’s region and they have 

an even more substantial presence in 

other regions. Thus, according to 

ReliabilityFirst, exempting federal 

entities from compliance with 

mandatory Reliability Standards would 

impair the reliability and the resilience 

of the electric grid. 

24. ReliabilityFirst identifies a 

number of potential consequences if 

federal entities are not required to 

comply with mandatory Reliability 

Standards. It states that such an 

exclusion ‘‘would provide a 

disincentive to the interaction between 

users, owners, and operators that is 

necessary to preserve reliability.’’ 22 It 

adds that not only do some Reliability 

Standards depend on the timely 

exchange of information and directives 

between registered entities, but the 

effectiveness of some Reliability 

Standards, in particular the Critical 

Infrastructure Protection standards, 

depends in large part on system-wide 

compliance. ReliabilityFirst further 

states that several Reliability Standards 

require reliability coordinators to issue 

directives to other registered entities so 

that necessary steps are taken to 

preserve reliability. It adds that if a 

federal entity fulfilling a transmission 

operator or generator operator function 

is exempt from the Commission’s 

jurisdiction and refuses to acknowledge 

this reliability coordinator authority in 

an emergency situation, cascading 

outages or other manifestations of severe 

grid instability could result. Similarly, 

according to ReliabilityFirst, failure to 

heed a reliability coordinator’s directive 

to return the system to within an 

Interconnection Reliability Operating 

Limit could have disastrous results for 

system reliability. Likewise, the failure 

of generators to notify their 

corresponding transmission operators 

and balancing authorities if they 

experience a protective relay or 

equipment failure may prevent the 

transmission operator from learning of 

this failure in time to take appropriate 

corrective action, thereby endangering 

system reliability. 

25. Finally, ReliabilityFirst asserts 

that the application of Reliability 

Standards to federal entities is 

meaningless without the power to 

enforce those Reliability Standards. 

ReliabilityFirst states that without 

enforcement power, compliance would 

be voluntary, the situation that existed 

before the passage of section 215 of the 

FPA. ReliabilityFirst urges the 

Commission to conclude that federal 

entities are subject to section 215, 

including the penalty and sanction 

provisions and states that this is the 

plain meaning of the statute and to 

decide otherwise would contravene the 

intent of Congress and undermine all of 

the Commission’s efforts to ensure the 

reliability of the Bulk-Power System and 

prevent a cascading blackout. 

26. DOE, Interior, Tri-State and 

Southeastern Customers argue that 

federal agencies must comply with 

NERC’s Reliability Standards but should 

not be subject to monetary penalties. 

DOE argues that the plain language of 

section 215(b)(1) makes it clear that the 

Commission has jurisdiction over ‘‘all 

users, owners, and operators of the bulkpower system, including but not limited 

to the entities described in section 

201(f) for purposes of approving 

Reliability Standards established under 

this section and enforcing compliance 

with this section.’’ 23 DOE adds that the 

clear inclusion of federal entities 

described in section 201(f) is consistent 

with Congress’s intent to ensure 

reliability nationwide. DOE further 

contends that section 201(b)(2) limits 

the Commission’s section 215 

jurisdiction over federal entities to the 

purposes described in section 215, 

providing: 

Notwithstanding section 201(f), the 

provisions of section * * * 215 * * * shall 

apply to the entities described in such 

provisions and such entities shall be subject 

to the jurisdiction of the Commission for 

purposes of carrying out the enforcement 

authorities of this Act with respect to such 

provisions. Compliance with any order or 

rule of the Commission under the provisions 

of section * * * 215 * * * shall not make 

an electric utility or other entity subject to 

the jurisdiction of the Commission for any 

purposes other than the purposes specified in 

the preceding sentence. 

DOE argues that section 201(b)(2) 

supports Commission jurisdiction over 

DOE entities under section 215 and 

section 215 alone; it does not authorize 

the Commission to punish violations of 

section 215 by assessing criminal 

penalties or levying monetary civil fines 

under any other section of the FPA. 

DOE also asserts that the term ‘‘penalty’’ 

is not defined with sufficient clarity in 

section 215(e) to support the imposition 

of punitive monetary penalties on DOE 

entities under that section. 

27. Tri-State argues that it is vital that 

all users, owners and operators, 

including federal agencies, obey the 

same mandatory Reliability Standards to 

ensure the reliability of the Bulk-Power 

System. Southeastern Customers state 

that the Commission has already 

determined that in the Southeast the 

Corps was appropriately registered as 

the transmission operator and the Corps 

did not challenge this application of the 

Reliability Standards.24 Both Tri-State 

and Southeastern Customers, argue, 

however, that federal agencies should 

not be subject to monetary penalties for 

violation of Reliability Standards. TriState argues that federal agencies rely on 

appropriated funds from the U.S. 

Treasury to finance their statutory 

obligations and generally do not have 

the authority to pay civil penalties 

because they have limited discretion in 

allocating these funds. Tri-State adds 

that even where a court has found a 

claim to be valid under the law, the 

claim may not be paid unless Congress 

has enacted an appropriation available 

for that purpose.25 In addition, both TriState and Southeastern Customers argue 

that the Anti-Deficiency Act prohibits a 

federal agency from paying monetary 

penalties because it may not spend or 


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Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 54037 

26Citing the Anti-Deficiency Act, 31 U.S.C. 

1341(a)(1)(A) (2006). 

27See, e.g., Order No. 693, FERC Stats. & Regs. 

¶ 31,242 at P 93–96. Pursuant to NERC’s Rules of 

Procedure, an entity that disagrees with the ERO’s 

registration determination can seek Commission 

review of that decision. 

28See, e.g., Nine Mile Point Nuclear Station LLC 

v. Niagara Mohawk Power Corp., 110 FERC 

¶ 61,033, at P 30 & n.31 (2005), aff’d, 452 F.3d 822 

(D.C. Cir. 2006); accord New York v. FERC, 535 U.S. 

1, 22–23 (2002) (holding the Commission was 

within its authority to establish a seven-factor test 

to determine which facilities are local distribution 

facilities that fall outside of the Commission’s 

jurisdiction pursuant to FPA section 201). Cf. 

Western Massachusetts Electric Co., 61 FERC 

¶ 61,182, at 61,661 (1992), aff’d, 165 F.3d 922, 926 

(D.C. Cir. 1999) (concluding the Commission may 

examine contracts relating to transactions which 

may be subject to its jurisdiction prior to making 

its determination as to jurisdiction). 

29 16 U.S.C. 824o(b)(1) (2006). Section 215 defines 

the Bulk-Power System as ‘‘(A) facilities and control 

systems necessary for operating an interconnected 

electric energy transmission network (or any 

portion thereof); and (B) the electric energy from 

generation facilities needed to maintain 

transmission system reliability.’’ 16 U.S.C. 

824o(a)(1) (2006). 

obligate more capital than was 

appropriated through the congressional 

funding process for that particular 

purpose.26 Likewise, Southwest Utility 

Districts argue that assessing a fine 

against a federal agency is much more 

complicated than assessing it against a 

private utility, in particular because the 

funds received by a federal agency are 

received with specific statutory 

instructions and limitations. 

28. Federal Power Customers state 

that their members are purchasers of 

energy generated and/or marketed by 

federal agencies, specifically, the Corps, 

the U.S. Bureau of Reclamation, the 

Western Area Power Administration, 

and the Southwestern Power 

Administration. Federal Power 

Customers comment that it is unclear 

whether potential penalties assessed by 

NERC and the Commission against the 

aforementioned federal agencies may 

become subsumed in the costs passed 

on to Federal Power Customers or their 

members. Federal Power Customers 

request that, in reaching a jurisdictional 

determination, such determination not 

contain any inference regarding the 

federal agencies’ ability to pass through 

penalties to customers. 

Discussion 

A. Procedural Matters 

29. Pursuant to Rule 214 of the 

Commissions Rules of Practice and 

Procedure, 18 CFR 385.214 (2009), the 

timely unopposed motions to intervene 

serve to make the entities that filed 

them parties to this proceeding. Rule 

213(a)(2) of the Commission’s Rules of 

Practice and Procedure, 18 CFR 

385.213(a)(2) (2009), prohibits an 

answer to an answer unless otherwise 

ordered by the decisional authority. We 

are not persuaded to accept NERC’s or 

DOE’s answers and will, therefore, reject 

them. 

B. Commission Determination 

30. As discussed below, we conclude 

that, pursuant to section 215 of the FPA, 

federal entities such as the Corps-Tulsa 

District that are users, owners, or 

operators of the Bulk-Power System 

must comply with mandatory Reliability 

Standards. The issue of whether a 

specific entity is a user, owner, or 

operator of the Bulk-Power System is a 

factual matter that is, in the first 

instance, determined by the ERO and 

the relevant Regional Entity in NERC’s 

compliance registration process.27 Thus, 

to the extent that the Corps raises 

concerns whether specific Corps 

facilities are Bulk-Power System 

facilities or a specific Corp District is a 

user, owner, or operator of the BulkPower System, these matters are 

appropriately raised in the first instance 

with the relevant Regional Entity 

pursuant to NERC’s compliance registry 

procedures. In this order, we are not 

making factual determinations regarding 

specific entities or facilities. Rather, we 

address the legal applicability of section 

215 of the FPA to federal entities such 

as the Corps-Tulsa District. 

1. Procedural Arguments 

31. At the outset, we disagree with 

comments suggesting that the 

Commission’s process is the incorrect 

forum for determining the 

implementation of section 215, or that 

the proceedings should be stayed to 

allow for interagency resolution. 

Pursuant to section 215(b) of the FPA, 

all users, owners, and operators of the 

Bulk-Power System must comply with 

mandatory Reliability Standards that are 

developed by the ERO and approved by 

the Commission. We have in the first 

instance the authority to determine the 

scope of our jurisdiction.28 Our 

authority to make this determination is 

not dependent on the ultimate outcome 

of the determination. Accordingly, we 

address here the issue of the 

Commission’s authority pursuant to 

section 215 of the FPA to require that 

federal entities such as the Corps-Tulsa 

District comply with mandatory, 

Commission-approved Reliability 

Standards. 

32. The Corps and several 

commenters address the additional 

question of whether federal entities are 

subject to monetary penalties for noncompliance with mandatory Reliability 

Standards. We view this as a separate 

and distinct issue. We need not and do 

not address it here. 

2. Section 215 Jurisdiction Over Users, 

Owners, and Operators 

33. With regard to the Commission’s 

section 215 jurisdiction, FPA section 

215(b)(1) states, in relevant part, 

Jurisdiction and applicability: (1) The 

Commission shall have jurisdiction * * * 

over * * * all users, owners and operators of 

the bulk-power system, including but not 

limited to the entities described in section 

201(f), for purposes of approving reliability 

standards established under this section and 

enforcing compliance with [section 215]. All 

users, owners and operators of the bulkpower system shall comply with reliability 

standards that take effect under this 

section.29

FPA section 201(f) states, in relevant 

part, 

No provision in [Part II of the FPA] shall 

apply to, or be deemed to include, the United 

States, a State or any political subdivision of 

a state, * * * or any agency, authority, or 

instrumentality of any one or more of the 

foregoing * * * unless such provision makes 

specific reference thereto. 

34. The language of section 215(b) 

refers to entities within the 

Commission’s section 215 jurisdiction 

as ‘‘including but not limited to the 

entities described in section 201(f).’’ In 

turn, section 201(f) specifically refers to 

‘‘the United States, a State or any 

political subdivision of a state, * * * or 

any agency, authority, or 

instrumentality of any one or more of 

the foregoing.’’ FPA section 215(b) is 

clear that the Commission shall have 

jurisdiction over those described 

entities ‘‘for purposes of approving 

reliability standards established under 

this section and enforcing compliance 

with this section.’’ Had Congress 

intended, by its reference to section 

201(f), to extend the section 201(f) 

exemption to section 215, there would 

have been no need to include the 

reference at all. Section 201(f) is in 

place, absent a specific reference to the 

contrary. Congress instead specifically 

included within the Commission’s 

section 215 jurisdiction each entity 

described in section 201(f) that is a user, 

owner, or operator of the Bulk-Power 

System. Based on the expanded 

jurisdictional reach of the statute, the 

Commission concludes that Congress 

intended section 215 to be 

comprehensive; excluding federal 

agencies would create a significant gap 


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54038 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

30See supra P 15. 

31 In addition, the General Accounting Office 

stated that ‘‘[a]ll users, owners and operators of the 

bulk-power system would have to comply with the 

reliability standards.’’ and ‘‘We understand this 

would include both private entities and federal 

entities (such as the Tennessee Valley Authority, 

the Bonneville Power Administration, and other 

federal power marketing agencies), among others.’’ 

General Accounting Office, Draft Legislation 

Concerning an Electric Reliability Organization, at 

3, n.5 (March 18, 2003), available at http:// 

www.gao.gov/decisions/other/360241.pdf. 

32See, e.g., 151 Cong. Rec. House 6943–44 (July 

28, 2005) (statement of Rep. Hastings); 151 Cong. 

Rec. Senate 9344 (July 29, 2005) (statement of Sen. 

Maria Cantwell). 

33NERC June 24, 2009 Notice of Penalty at 2–3 

(citing October 3, 2007 Letter from Department of 

the Army, Southwestern Division, Corps of 

Engineers, to ERCOT). 

in the ERO’s and the Commission’s 

reliability oversight. 

35. Further, section 201(b)(2) adds 

additional weight to the argument, 

which we find persuasive, that Congress 

intended to include federal entities 

under the Commission’s jurisdiction. 

Such section, as amended by the Energy 

Policy Act of 2005, states under the 

heading ‘‘Declaration of Policy; 

Application of Part’’: 

Notwithstanding section 201(f), the 

provisions of sections * * * 215 * * * shall 

apply to the entities described in such 

provisions, and such entities shall be subject 

to the jurisdiction of the Commission for 

purposes of carrying out such provisions and 

for purposes of applying the enforcement 

authorities of this Act with respect to such 

provisions. 

Prior to the Energy Policy Act of 2005, 

few provisions of Part II of the FPA 

applied to governmental and other nonpublic utility entities. Previously, 

section 201(b)(2) referred only to 

entities subject to FPA sections 210, 

211, and 212. The Energy Policy Act of 

2005 added new provisions that use 

broad terms such as ‘‘all users, owners 

and operators,’’ and these provisions 

apply to governmental as well as private 

entities. In turn, EPAct 2005 amended 

section 201(b)(2) to make clear that the 

Commission’s jurisdiction over 

otherwise exempt public utilities under 

certain substantive provisions of the 

FPA, including the reliability provision, 

is only for the narrow purposes of 

implementing and enforcing those 

provisions. When Congress amended 

201(b)(2), it also specifically added the 

phrase ‘‘[n]otwithstanding section 

201(f),’’ at the beginning of the 

provision to make clear that entities 

(including governmental entities) 

otherwise exempted from Commission 

regulation by virtue of section 201(f) are 

indeed subject to limited Commission 

regulation for purposes of certain FPA 

provisions. Had Congress not intended 

section 215 to apply to governmental 

and other exempt public utility entities, 

there would have been no reason to add 

the reference to section 215 in section 

201(b)(2). 

36. Finally, as NERC points out,30 the 

legislative history of FPA section 215 

supports the conclusion that Congress 

intended FPA section 215 to require that 

all users, owners, and operators of the 

Bulk-Power System, including federal 

entities, comply with Commissionapproved Reliability Standards. FPA 

section 215 can be traced to the Thomas 

amendment and Senator Thomas, the 

author of that amendment stated that 

mandatory reliability rules will apply to 

all users of the transmission grid. There 

are no loopholes. No one is exempt.’’31

37. Further, the legislative history 

makes clear that, among other things, 

the reliability provision was added to 

the FPA to prevent cascading blackouts. 

The debate during consideration of the 

Conference Report on the proposed bill 

states that mandatory, enforceable 

reliability rules began in response to the 

1996 blackouts in the Pacific Northwest 

and gained more urgency with the 

Northeast blackout of 2003.32 Exclusion 

of federal entities from the reliability 

provision would run counter to this 

legislative purpose as it would create 

significant gaps in an otherwise 

comprehensive program to apply 

mandatory Reliability Standards to 

better assure the reliability of the BulkPower System. As ReliabilityFirst 

attests, excluding federal entities from 

the requirements of the Reliability 

Standards raises serious potential 

consequences for the reliability of the 

Bulk-Power System. Thus, it stands to 

reason that Congress intended that all 

users, owners, and operators of the 

Bulk-Power System, including federal 

entities, be required to comply with the 

Reliability Standards. It would be 

contrary to Congressional intent and 

likely ineffective to return to a voluntary 

system based on individual discretion 

as the Corps proposes with respect to 

federal entities.33

38. Accordingly, we find that, 

pursuant to section 215 of the FPA, 

federal entities such as the Corps-Tulsa 

District that are registered by the ERO as 

users, owners, and operators of the 

Bulk-Power System must comply with 

mandatory Reliability Standards as to 

facilities that fall within the Bulk-Power 

System. 

The Commission Orders 

(A) The Commission grants NERC’s 

request for a decision that, pursuant to 

section 215 of the FPA, federal entities 

that use, own, or operate the BulkPower System, must comply with 

mandatory Reliability Standards, as 

discussed in the body of this order. 

(B) The Secretary is directed to 

publish a copy of this order in the 

Federal Register. 

By the Commission. Commissioner Kelly is 

not participating. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

[FR Doc. E9–25224 Filed 10–20–09; 8:45 am] 

BILLING CODE 6717–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

[FRL–8971–2] 

Agency Information Collection 

Activities; OMB Responses 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice. 

SUMMARY: This document announces the 

Office of Management and Budget 

(OMB) responses to Agency Clearance 

requests, in compliance with the 

Paperwork Reduction Act (44 U.S.C. 

3501 et seq.). An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid OMB control number. 

The OMB control numbers for EPA 

regulations are listed in 40 CFR part 9 

and 48 CFR chapter 15. 

FOR FURTHER INFORMATION CONTACT: Rick 

Westlund (202) 566–1682, or e-mail at 

westlund.rick@epa.gov and please refer 

to the appropriate EPA Information 

Collection Request (ICR) Number. 

SUPPLEMENTARY INFORMATION: 

OMB Responses to Agency Clearance 

Requests 

OMB Approvals 

EPA ICR Number 1884.04; Partial 

Update of the TSCA Section 8(b) 

Inventory Data Base, Production and 

Site Reports; 40 CFR part 710; was 

approved on 09/17/2009; OMB Number 

2070–0162; expires on 09/30/2012; 

Approved without change. 

EPA ICR Number 2034.04; NESHAP 

for the Wood Products Surface Coating 

Industry; 40 CFR part 63, subpart A and 

40 CFR part 63, subpart QQQQ; was 

approved on 09/22/2009; OMB Number 

2060–0510; expires on 09/30/2012; 

Approved without change. 

EPA ICR Number 1712.06; NESHAP 

for Shipbuilding and Ship Repair 

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63, subpart A and 40 CFR part 63, 

subpart II; was approved on 09/22/2009; 


jlentini on DSKJ8SOYB1PROD with NOTICES