46940 Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 

(1) Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

(2) Is not a ‘‘significant rule’’ under 

the DOT Regulatory Policies and 

Procedures (44 FR 11034, February 26, 

1979), 

(3) Will not affect intrastate aviation 

in Alaska, and 

(4) Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

■ 1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

■ 2. The FAA amends § 39.13 by 

removing Amendment 39–18885 (82 FR 

24239, May 26, 2017), and adding the 

following new AD: 

Stemme AG: Docket No. FAA–2017–0952; 

Product Identifier 2017–CE–028–AD. 

(a) Comments Due Date 

We must receive comments by November 

24, 2017. 

(b) Affected ADs 

This AD replaces AD 2017–10–11, 

Amendment 39–18885 (82 FR 24239, May 26, 

2017) (‘‘AD 2017–10–11’’). 

(c) Applicability 

This AD applies to Stemme AG Model 

Stemme S10–VT gliders (type certificate 

previously held by Stemme GmbH & Co. KG), 

all serial numbers, and Stemme AG Model 

Stemme S 12 gliders, all serial numbers, that 

are: 

(1) Equipped with a front gearbox, part 

number (P/N) 11AG, with a serial number 

listed in table 1 to paragraph (c) of this AD; 

and 

(2) are certificated in any category. 

Table 1 to paragraph (c) of this AD— 

Affected P/N 11AG (front gearbox) S/Ns 

80058/0814, 80059/0915, 80060/0915, 80061/ 

1115, 80062/1215, 80063/0116, 80064/0416, 

80065/0616, 80066/0716, 80067/0916, 80068/ 

1016, 80069/0117, 80070/0217, 80071/0217. 

Note 1 to paragraph (c) of this AD: Page 2 

of Stemme AG Service Bulletin No. P062– 

980010, dated April 21, 2017, provides a 

pictorial of where the serial number of the 

affected gearboxes are located. 

(d) Subject 

Air Transport Association of America 

(ATA) Code 61: Propellers/Propulsors. 

(e) Reason 

This AD was prompted by mandatory 

continuing airworthiness information (MCAI) 

issued by the aviation authority of another 

country to identify and correct an unsafe 

condition on an aviation product. The MCAI 

describes the unsafe condition as certain 

propeller front transmission gear wheels 

having insufficient material strength because 

of improper heat treatment during 

manufacturing. We are issuing this proposed 

AD to add Stemme AG Model Stemme S 12 

to the applicability, paragraph (c), of this AD, 

and to prevent failure of the propeller front 

transmission gear wheels. This failure could 

cause loss of power between the engine and 

the propeller, which could result in reduced 

control. 

(f) Actions and Compliance 

Unless already done, do the following 

actions: 

(1) For Model Stemme S10–VT gliders: 

Before further flight after June 15, 2017 (the 

effective date of AD 2017–10–11), replace the 

front gearbox following STEMME Procedural 

Specification Dok. Nr.: P320–900060, dated 

June 14, 2017, as specified in STEMME 

Service Bulletin Dok. Nr.: P062–980010, 

Issue: 01, dated June 14, 2017. 

(2) For Model Stemme S 12 gliders: Before 

further flight after the effective date of this 

AD, replace the front gearbox following 

STEMME Procedural Specification Dok. Nr.: 

P320–900060, dated June 14, 2017, as 

specified in STEMME Service Bulletin Dok. 

Nr.: P062–980010, Issue: 01, dated June 14, 

2017. 

(3) As of the effective date of this AD, do 

not install a front gear box listed in table 1 

of paragraph (c) of this AD. 

(4) The service information for this AD 

allows the owner/operator to do certain 

maintenance tasks. Also, the service 

information specifies certain maintenance 

tasks be done by Stemme AG. However, for 

this AD, we do not allow the owner/operator 

to do any maintenance tasks; all maintenance 

tasks must be done by an appropriately 

certifiedmechanic or maintenance shop. In 

addition, we do not require any maintenance 

tasks be done specifically by Stemme AG; 

any appropriately certified mechanic or 

maintenance shop may do the tasks required 

by this AD. 

(g) Other FAA AD Provisions 

The following provisions also apply to this 

AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, Small Airplane 

Standards Branch, 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 

Standards Branch, 901 Locust, Room 301, 

Kansas City, Missouri 64106; telephone: 

(816) 329–4165; fax: (816) 329–4090; email: 

jim.rutherford@faa.gov. 

(i) 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. 

(ii) AMOCs approved for AD 2017–10–11, 

Amendment 39–18885 (82 FR 24239, May 26, 

2017) are approved as AMOCs for the 

corresponding provisions of this AD. 

(2) Contacting the Manufacturer: For any 

requirement in this AD to obtain corrective 

actions from a manufacturer, the action must 

be accomplished using a method approved 

by the Manager, Small Airplane Standards 

Branch, FAA; or the European Aviation 

Safety Agency (EASA). 

(h) Related Information 

(1) Refer to MCAI European Aviation 

Safety Agency (EASA) AD No. 2017–0072–E, 

dated April 26, 2017, and Stemme AG 

Service Bulletin No. P062–980010, dated 

April 21, 2017, for related information. You 

may examine the MCAI on the Internet at 

http://www.regulations.gov by searching for 

and locating Docket No. FAA–2017–0952. 

For service information related to this AD, 

contact STEMME AG, Flugplatzstrasse F2, 

Nr. 6–7, D–15344 Strausberg, Germany; 

telephone: +49 (0) 3341 3612–0, fax: +49 (0) 

3341 3612–30; Internet: https://

www.stemme.com. You may review copies of 

the referenced service information at the 

FAA, Policy and Innovation Division, 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 

September 26, 2017. 

Pat Mullen, 

Acting Deputy Director, Policy & Innovation 

Division, Aircraft Certification Service. 

[FR Doc. 2017–21226 Filed 10–6–17; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 35 

[Docket No. RM18–1–000] 

Grid Resiliency Pricing Rule 

AGENCY: Federal Energy Regulatory 

Commission, Department of Energy. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: Pursuant to the Department of 

Energy Organization Act (DOE Act), the 

Secretary of Energy (Secretary) is 

proposing a rule for final action by the 

Federal Energy Regulatory Commission 

(Commission or FERC). The Secretary is 

proposing the Commission exercise its 

authority under the Federal Power Act 

(FPA) to establish just and reasonable 

rates for wholesale electricity sales. 

Under the proposal, the Commission 

will impose rules on Commissionapproved independent system operators 


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Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 46941 

(ISOs) and regional transmission 

organizations (RTOs) to ensure that 

certain reliability and resilience 

attributes of electric generation 

resources are fully valued. The 

Secretary is directing the Commission to 

take final action on this proposal within 

60 days of publication of this proposed 

rule in the Federal Register or, in the 

alternative, to issue the rule as an 

interim final rule immediately, with 

provision for later modifications after 

consideration of public comments. The 

Secretary further directs that any final 

rule adopting this proposal take effect 

within 30 days of publication of such 

final rule in the Federal Register and 

proposes that each ISO and RTO subject 

to the rule shall submit a compliance 

filing within 15 days of the effective 

date of such final rule. 

DATES: The Commission is directed 

either to take final action by December 

11, 2017 or to issue the proposed rule 

as an interim final rule. Public comment 

is due either November 24, 2017 or 

according to a schedule to be published 

by the Commission. 

ADDRESSES: Comments, identified by 

docket number, may be filed in the 

following ways: 

• Email: 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. 

FOR FURTHER INFORMATION CONTACT: 

Ronald (R.J.) Colwell, U.S. Department 

of Energy, Office of the Assistant 

General Counsel for Electricity and 

Fossil Energy (GC–76), Forrestal 

Building, Room 6D–033, 1000 

Independence Avenue SW., 

Washington, DC 20585; (202) 586–9507; 

email ronald.colwell@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Statutory Background 

II. Discussion of Proposed Rule 

A. Affordable, Reliable and Resilient 

Electricity Is Vital to the Economic and 

National Security of the United States 

and Its People 

B. There Have Been Significant 

Retirements of Fuel-Secure Generation 

C. The 2014 Polar Vortex Exposed 

Problems With the Resiliency of the 

Electric Grid 

D. Regulated Wholesale Power Markets Are 

Not Adequately Pricing Resiliency 

Attributes of Fuel-Secure Power 

E. The Preservation of Generation Diversity 

Will Benefit Consumers 

F. NERC Warns That Premature 

Retirements of Fuel-Secure Generation 

Threaten the Reliability and Resiliency 

of the Bulk Power System 

G. The DOE Staff Report Made Clear the 

Challenges to the Grid and That 

Resiliency Must Be Addressed 

H. Congress Is Concerned About the 

Potential Loss of Valuable Generation 

Resources 

I. The FERC Is Cognizant of the Problem 

and Has the Necessary Information on 

Which To Act Expeditiously 

III. Proposal 

IV. Procedures for Completion of Final 

Action 

A. Deadlines 

B. Comment Procedures 

C. Compliance Filings 

V. Statutory and Regulatory Review 

VI. Information Collection Statement 

VII. Environmental Analysis 

VIII. Regulatory Flexibility Act 

IX. Executive Order 12866 

X. Document Availability 

XI. Approval of the Office of the Secretary 

I. Statutory Background 

Section 403 of the DOE Act authorizes 

the Secretary of Energy to propose rules 

for Commission action regarding certain 

Commission functions, including its 

electricity rate-related functions under 

sections 205 and 206 of the Federal 

Power Act, and to set reasonable time 

limits for Commission completion of the 

proposed action. Section 403(a) 

provides for the initiation of rulemaking 

proceedings by either the Secretary or 

the Commission. In the exercise of this 

authority, the Commission proposes 

rules by publishing Notices of Proposed 

Rulemaking (NOPR) in the Federal 

Register. The Secretary has likewise 

exercised his section 403 authority by 

publishing NOPRs in the Federal 

Register. This authority was first 

exercised by the Secretary in 1979 by 

publication of a NOPR (‘‘Transportation 

Certificates for Natural Gas,’’ 44 FR 

17644, March 22, 1979). The Secretary 

has subsequently acted under section 

403 on several occasions by publication 

of a NOPR in the Federal Register. By 

proposing a rule in this manner, the 

Secretary enables the Commission to 

proceed directly to the consideration of, 

and final action on, the proposal and 

eliminates the need for the Commission 

to order or publish its own separate 

rulemaking proposal. 

Independent of the Secretary’s action 

under section 403(a), FERC has full 

authority to establish the rule set forth 

in this proposed rule. Specifically, 

FERC has authority to establish just and 

reasonable rates, terms, and conditions 

for wholesale electricity sales under 

sections 205 and 206 of the Federal 

Power Act, and FERC has discretion to 

do so by means of a rulemaking 

pursuant to section 403(c), which 

authorizes FERC to use rulemaking 

procedures to conduct its Federal Power 

Act functions relating to rates and 

charges. Transmission Access Policy 

Study Group v. F.E.R.C., 225 F.3d 667, 

688 (D.C. Cir. 2000), aff’d 535 U.S. 1 

(2002). FERC has on numerous 

occasions imposed market rules on ISOs 

and RTOs. See 18 CFR part 35. 

Furthermore, section 403(b) requires 

that FERC ‘‘shall consider and take final 

action on any proposal made by the 

Secretary [under subsection (a)] in an 

expeditious manner in accordance with 

such reasonable time limits as may be 

set by the Secretary for the completion 

of action by the Commission on any 

such proposal.’’ The Secretary is 

therefore authorized to direct the 

Commission to consider and take final 

action within the reasonable time limits 

the Secretary establishes in this 

proposed rule. Given the extensive 

record the Commission has already 

developed on the subject matter of this 

proposed rule, the time limit for final 

action provided herein allows adequate 

time for the Commission to receive and 

consider public comments. 

II. Discussion of the Proposed Rule 

The resiliency of the nation’s electric 

grid is threatened by the premature 

retirements of power plants that can 

withstand major fuel supply disruptions 

caused by natural or man-made 

disasters and, in those critical times, 

continue to provide electric energy, 

capacity, and essential grid reliability 

services. These fuel-secure resources are 

indispensable for the reliability and 

resiliency of our electric grid—and 

therefore indispensable for our 

economic and national security. It is 

time for the Commission to issue rules 

to protect the American people from 

energy outages expected to result from 

the loss of this fuel-secure generation 

capacity. 

A. Affordable, Reliable and Resilient 

Electricity Is Vital to the Economic and 

National Security of the United States 

and Its People 

Ensuring that American families and 

businesses have access to reliable, 

resilient and affordable electricity is 

vital to the economy, national security, 

and quality of life. From heating homes 

in the winter to cooling them in the 

summer, providing lighted streets so 


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46942 Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 

1Transforming the Nation’s Electricity System: 

The Second Installment of the Quadrennial Energy 

Review, January 6, 2017 (January 2017 QER). 

2 January 2017 QER at 3–73. 

3U.S. Department of Energy, Staff Report to the 

Secretary on Electricity Markets and Reliability, 

August 2017 (DOE Staff Report). 

4 DOE Staff Report at 22. 

5 DOE Staff Report at 22, citing U.S. Energy 

Information Administration, Today in Energy, 

March 8, 2016. More recent EIA data shows an 

overall larger amount of 2015 generation capacity 

retirements (25,400 MW), of which coal-fired power 

plants made up 72%. EIA Monthly Update to the 

Annual Electric Generator Report, Form EIA–860m, 

March 2017. 

6U.S. Energy Information Administration (EIA), 

Monthly Update to the Annual Electric Generator 

Report, Form EIA–860m, June 2017, https://

www.eia.gov/electricity/data/eia860m/. 

7 DOE Staff Report at 29. 

8 DOE Staff Report at 30. 

9PJM Interconnection is the regional transmission 

organization (‘‘RTO’’) serving thirteen states and the 

District of Columbia. 

10 DOE Staff Report, at 98 (internal citations 

omitted). 

11 DOE Staff Report, at 95 (internal citations 

omitted). 

12 DOE Staff Report, at 98–99, 118. 

people can walk safely at night, 

powering machines and technology that 

create jobs, and connecting us through 

smart phones and the internet— 

electricity is a key driver of America’s 

economic prosperity and the basic 

necessities of life. The American 

economy, government and national 

defense all depend on electricity. 

Therefore, ensuring a reliable and 

resilient electric supply and 

corresponding supply chain are also 

vital to national security. 

The sheer size and impact of the 

electricity market on our economy 

cannot be overstated. According to the 

Department of Energy’s January 2017 

Quadrennial Energy Review (January 

2017 QER): In the United States, there 

are around 7,700 operating power plants 

that generate electricity from a variety of 

primary energy sources; 707,000 miles 

of high-voltage transmission lines; more 

than 1 million rooftop solar 

installations; 55,800 substations; 6.5 

million miles of local distribution lines; 

and 3,354 distribution utilities 

delivering electricity to 148.6 million 

customers. The total amount of money 

paid by end users for electricity in 2015 

was about $400 billion. This drives an 

$18.6 trillion U.S. gross domestic 

product and significantly influences 

global economic activity totaling 

roughly $80 trillion.1

B. There Have Been Significant 

Retirements of Fuel-Secure Generation 

Market changes are resulting in a 

significant loss of fuel-secure 

generation. According to the January 

2017 QER: Currently, the changing 

electricity sector is causing the closure 

of many coal and nuclear plants in a 

shift from recent trends. From 2000 

through 2009, power plant retirements 

were dominated by natural gas steam 

turbines. Over the past 6 years (2010– 

2015), power plant retirements were 

dominated by coal plants (37 GW), 

which accounted for over 52 percent of 

recently retired power plant capacity. 

Over the next 5 years (between 2016 and 

2020), 34.4 GW of summer capacity is 

planned to be retired, and 79 percent of 

this planned retirement capacity are 

coal and natural gas plants (49 percent 

and 30 percent, respectively). The next 

largest set of planned retirements are 

nuclear plants (15 percent).2

The ‘‘Staff Report to the Secretary on 

Electricity Markets and Reliability’’ 

(‘‘DOE Staff Report’’) 3 also discusses the 

large number of fuel-secure plants that 

have retired or are scheduled to retire: 

• Between 2002 and 2016, 531 coal 

generating units representing 

approximately 59,000 MW of generation 

capacity retired from the U.S. generation 

fleet.4

• EIA reported that coal-fired power 

plants made up more than 80 percent of 

the 18,000 MW of electric generating 

capacity that retired in 2015.5

• It is anticipated that approximately 

12,700 MW of coal generation will retire 

through 2020.6

• Between 2002 and 2016, 4,666 MW 

of nuclear generating capacity was 

announced for retirement, or 

approximately 4.7 percent of the U.S. 

total.7

• Eight reactors representing 7,167 

MW of nuclear capacity (7.2 percent of 

U.S. nuclear capacity and 0.6 percent of 

total U.S. generating capacity) have 

announced retirement plans since 2016. 

This does not include seven reactors 

that averted early retirement through 

state action.8

C. The 2014 Polar Vortex Exposed 

Problems With the Resiliency of the 

Electric Grid 

In early 2014, the Polar Vortex (a band 

of very cold weather spread across 

much of the eastern and central United 

States) created record-high winter peak 

electric demand for heating and equally 

high demand for natural gas for 

residential heating. During the Polar 

Vortex, PJM Interconnection (PJM) 9

struggled to meet demand for electricity 

because a significant amount of 

generation was not available to run. 

According to the DOE Staff Report, the 

loss of generation capacity could have 

been catastrophic, but a number of fuelsecure plants that were scheduled for 

retirement were called upon to meet the 

need for electricity: American Electric 

Power reported that it deployed 89 

percent of its coal units scheduled for 

retirement in 2014 to meet demand 

during the Polar Vortex, and Southern 

Company reported using 75 percent of 

its coal units scheduled for closure. 

Using these retiring units enabled 

utilities to meet customer demand 

during a period when already limited 

natural gas resources were diverted from 

electricity production to meet 

residential heating needs. Once retired, 

however, these units will not be 

available for the next unseasonably cold 

winter.10

Likewise, the DOE Staff Report notes 

that, overall, nuclear generators 

performed extremely well during the 

Polar Vortex, with an average capacity 

factor of 95 percent.11

Sixty-five million people within the 

PJM footprint could have been affected 

if these units were not available. The 

2014 Polar Vortex was a warning that 

the current and scheduled retirements 

of fuel-secure plants could threaten the 

reliability and resiliency of the electric 

grid.12

D. Regulated Wholesale Power Markets 

Are Not Adequately Pricing Resiliency 

Attributes of Fuel-Secure Power 

There is a growing recognition that 

organized markets do not necessarily 

pay generators for all the attributes that 

they provide to the grid, including 

resiliency. Because wholesale pricing in 

those markets does not adequately 

consider or accurately value those 

benefits, fuel-secure generation 

resources are often not compensated for 

those benefits. 

The January 2017 QER summarizes 

the problem of how regulated wholesale 

markets are not adequately pricing 

resiliency attributes of fuel-secure 

generation: Reliability investments are 

typically incorporated into ratemaking 

processes for all electric utilities. 

Supplementary investments for recovery 

from outage events also are handled 

through established ratemaking 

processes. Resilience requirements tend 

to be valued as contributions to 

reliability and incorporated as part of 

ratemaking processes. These processes 

are more easily executed in structures 

that are traditional end-to-end, 

vertically integrated electricity delivery 

services; other market structures 

complicate reliability and resilience 

investment decision-making. Short-run 

markets may not provide adequate price 

signals to ensure long-term investments 


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Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 46943 

13 January 2017 QER, at 4–41 (emphasis added). 

14 IHS Markit, ‘‘Ensuring Resilient and Efficient 

Electricity Generation: The Value of the current 

diverse US power supply portfolio’’ at 8. 

15 Id. at 4–5. 

16NERC Letter to Secretary of Energy Rick Perry, 

May 9, 2017, Attachment ‘‘Synopsis of NERC 

Reliability Assessments’’ (Synopsis) at 1. 

17NERC, Synopsis at 2. 

18NERC, Synopsis at 3. 

19 ‘‘Staff Report to the Secretary on Electricity 

Markets and Reliability,’’ U.S. Department of 

Energy, August 2017 at 14 (emphasis added). 

20 DOE Staff Report, at 91. For example, ‘‘coal 

plants . . . maintain onsite coal stockpiles to 

accommodate both normal variance in deliveries 

and the possibility of a major supply disruption. 

Coal stockpiles have recently been slightly smaller 

than historical averages, while days of burn have 

increased slightly relative to historic averages from 

the 70–80 range to the 85–100-day range.’’ Id., at 

95. 

21 Id., at 10 (emphasis added). 

22 Id., at 126 (internal citations omitted). 

23Letter from Fred Upton, Lisa Murkowski, and 

Ed Whitfield, U.S. Congress, to Norman Bay, 

Chairman, FERC (July 8, 2015). 

24 Id. 

25 Id. 

26 Id. 

in appropriately configured capacity. 

Also, resource valuations tend not to 

incorporate superordinate network and/ 

or social values such as enhancing 

resilience into resource or . . . 

investment decision making. The 

increased importance of system 

resilience to overall grid reliability may 

require adjustments to market 

mechanisms that enable better 

valuation.13

A recent study by IHS Markit 

amplifies the same point: ‘‘the 

increasing cost of ensuring power 

system resilience is exposing the 

problem that some current wholesale 

market price formation rules do not 

fully compensate generating resources 

for providing the desired power system 

supply resiliency.’’ 14

E. The Preservation of Generation 

Diversity Will Benefit Consumers 

The IHS Markit study also concludes 

that preservation of generation diversity 

provided by fuel-secure resources 

benefits consumers: ‘‘The current 

diversified US electric supply portfolio 

lowers the cost of electricity production 

by about $114 billion per year and 

lowers the average retail price of 

electricity by 27%’’ compared with a 

‘‘less efficient diversity case’’ involving 

‘‘no meaningful contributions from coal 

or nuclear resources.’’ 15

F. NERC Warns That Premature 

Retirements of Fuel-Secure Generation 

Threaten the Reliability and Resiliency 

of the Bulk Power System 

The North American Electric 

Reliability Corporation (NERC) (the 

FERC-designated Electric Reliability 

Organization), whose mission is to 

assure the reliability and security of the 

bulk power system in North America, 

states: The North American electric 

power system is undergoing a rapid and 

significant transformation with ongoing 

retirements of fossil-fired and nuclear 

capacity, as well as growth in natural 

gas, wind, and solar resources. This 

shift is caused by several drivers, such 

as federal, state, and provincial policies, 

low natural gas prices, electricity market 

forces, and integration of both 

distributed and utility-scale renewable 

resources. The changing resource mix is 

altering the operating characteristics of 

the bulk power system (BPS). These 

changing characteristics must be well 

understood and properly managed in 

order to assure continued reliability and 

ensure resiliency.16

Specifically, according to NERC, 

‘‘Coal-fired and nuclear generation have 

the added benefits of high availability 

rate, low forced outages, and secured 

on-site fuel. Many months of on-site fuel 

allow these units to be operated in a 

manner independent of supply chain 

disruptions.’’ 17

As a consequence, NERC warns, 

‘‘Premature retirements of fuel secure 

baseload generating stations reduces 

resilience to fuel supply disruptions.’’ 18

G. The DOE Staff Report Made Clear the 

Challenges to the Grid and That 

Resiliency Must Be Addressed 

The DOE Staff Report confirms these 

observations and exposes the potential 

challenges and threats to the reliability 

and resiliency of the electric grid, as 

well as the economic hardship faced by 

some of the most resilient types of 

generation. Among other things, the 

DOE Staff Report warns that premature 

retirements of fuel-secure resources 

impose serious risks: Ultimately, the 

continued closure of traditional 

baseload power plants calls for a 

comprehensive strategy for long-term 

reliability and resilience. States and 

regions are accepting increased risks 

that could affect the future reliability 

and resilience of electricity delivery for 

consumers in their regions. 

Hydropower, nuclear, coal, and natural 

gas power plants provide ERS 

[(‘‘essential reliability services’’)] and 

fuel assurance critical to system 

resilience. A continual comprehensive 

regional and national review is needed 

to determine how a portfolio of 

domestic energy resources can be 

developed to ensure grid reliability and 

resilience.19

The DOE Staff Report also recognizes 

that ‘‘system fuel supply chain 

disruptions can impact many generators 

during a single widespread fuel shortage 

event,’’ and that ‘‘[n]uclear and coal 

plants typically have advantages 

associated with onsite fuel storage[.]’’ 20

In light of these facts, the DOE Staff 

Report calls for prompt action: Markets 

need further study and reform to 

address future services essential to grid 

reliability and resilience. System 

operators are working toward 

recognizing, defining, and compensating 

for resource attributes that enhance 

reliability and resilience (on both the 

supply and demand side). However, 

further efforts should reflect the urgent 

need for clear definitions of reliabilityand resilience-enhancing attributes and 

should quickly establish the market 

means to value or the regulatory means 

to provide them.21

The DOE Staff Report’s first 

recommendation for protecting the 

resiliency of the electric grid is to 

correct distortions in price formation in 

the organized markets: FERC should 

expedite its efforts with states, RTO/ 

ISOs, and other stakeholders to improve 

energy price formation in centrallyorganized wholesale electricity markets. 

After several years of fact finding and 

technical conferences, the record now 

supports energy price formation reform, 

such as the proposals laid out by PJM 

and others.22

H. Congress Is Concerned About the 

Potential Loss of Valuable Generation 

Resources 

In July 2015, the chairmen of the 

Senate Committee on Energy and 

Natural Resources, the House 

Committee on Energy and Commerce, 

and the House Subcommittee on Energy 

and Power, sent correspondence to the 

Commission about challenges in the 

Commission-approved organized 

electricity markets.23 The chairmen 

expressed their concern that ‘‘[v]aluable 

baseload power plants in these markets, 

including reliable nuclear and coal- 

[fired] plants, are facing premature 

retirement.’’ 24

More specifically, the Chairmen’s 

letter stated: ‘‘There are growing 

indications that owners and operators of 

major baseload power plants are facing 

imminent decisions regarding their 

continued economic viability’’ 25 and 

‘‘broad scale premature retirements of 

otherwise performing baseload units 

because of market rules—rather than 

market forces—would represent failure 

of regulation.’’ 26 The letter made clear 

that electricity market prices for energy 

and capacity should reflect the ‘‘true 

marginal cost of supply, promote 


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46944 Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 

27 Id. 

28FERC, Centralized Capacity Markets in 

Regional Transmission Organizations and 

Independent System Operators, Docket No. AD13– 

7–000, p. 1. 

29 151 FERC ¶ 61,208, PJM Interconnection, 

L.L.C., Order on Proposed Tariff Revisions (2015); 

rehearing denied, PJM Interconnection, L.L.C., 

Order on Rehearing and Compliance, 155 FERC 

¶ 61,157 (2016). 

30Price Formation in Energy and Ancillary 

Services Markets in Regional Transmission 

Organizations and Independent System Operators, 

Docket No. AD14–14–000, June 2014. 

31Staff Analysis of Operator-Initiated 

Commitments in RTO and ISO Markets, Price 

Formation in Organized Wholesale Electricity 

Markets, [Docket No. AD14–14–000], December 

2014 at 5. 

32 155 FERC ¶ 61,276; 18 CFR part 35 [Docket No. 

RM15–24–000, Order No. 825] Settlement Intervals 

and Shortage Pricing in Markets Operated by 

Regional Transmission Organizations and 

Independent System Operators (Issued June 16, 

2016). 

33 157 FERC ¶ 61,122, Essential Reliability 

Services and the Evolving Bulk-Power System— 

Primary Frequency Response, Notice of Proposed 

Rulemaking (November 17, 2016). 

34 157 FERC ¶ 61,115, 18 CFR part 35 [Docket No. 

RM16–5–000; Order No. 831] Offer Caps in Markets 

Operated by Regional Transmission Organizations 

and Independent System Operators (November 17, 

2016). 

35 157 FERC ¶ 61,213, 18 CFR part 35 [Docket No. 

RM18–1–000] Fast-Start Pricing in Markets 

Operated by Regional Transmission Organizations 

and Independent System Operators (December 15, 

2016). 

36 157 FERC ¶ 61,213, 18 CFR part 35 [Docket No. 

RM18–1–000] Fast-Start Pricing in Markets 

Operated by Regional Transmission Organizations 

and Independent System Operators (December 15, 

2016), at 1. 

37 158 FERC ¶ 61,047 Federal Energy Regulatory 

Commission, 18 CFR part 35 [Docket No. RM17–2– 

000] Uplift Cost Allocation and Transparency in 

Markets Operated by Regional Transmission 

Organizations and Independent System Operators 

(January 19, 2017). 

38 Id. at 1. 

necessary investment, and produce 

meaningful price signals that clearly 

indicate where new supply and 

investment are needed.27

I. The FERC Is Cognizant of the Problem 

and Has the Necessary Information on 

Which To Act Expeditiously 

Over the past several years, the 

Commission has developed an extensive 

record on price formation in the 

Commission-approved ISOs and RTOs. 

The Commission has recognized that 

there are deficiencies in the way the 

regulated wholesale power markets 

price power (i.e., energy, capacity, and 

ancillary services) and that these 

deficiencies are undermining reliability 

and resiliency. 

Beginning in June 2013, the 

Commission recognized the changing 

mix of generation resources, determined 

that existing capacity markets were not 

providing a sufficiently reliable supply 

of electricity, predicted the loss of fuelsecure generation, and sought input 

from the public through proceedings on 

price formation in the organized 

markets. In a 2013 technical conference, 

FERC explained: The purpose of the 

technical conference is to consider how 

current centralized capacity market 

rules and structures are supporting the 

procurement and retention of resources 

necessary to meet future reliability and 

operational needs. Since their 

establishment, centralized capacity 

markets have continued to evolve. 

Meanwhile, the mix of resources is also 

evolving in response to changing market 

conditions, including low natural gas 

prices, state and federal policies 

encouraging the entry of renewable 

resources and other specific 

technologies, and the retirement of 

aging generation resources. This 

changing resource mix may result in 

future reliability and operational needs 

that are different than those of the 

past.28

In December 2014, PJM requested that 

the Commission issue an order 

approving PJM’s revisions to its capacity 

market rules to require resources 

participating in the capacity market to 

honor contractual commitments to 

deliver electricity at any time of the 

year.29 The Commission determined 

that the existing capacity market was 

not providing a sufficiently reliable 

supply of electricity and, to remedy this 

urgent shortfall, accepted PJM’s 

proposed market rule changes. FERC’s 

order was recently upheld by the D.C. 

Circuit in Advanced Energy 

Management Alliance v. FERC, D.C. Cir. 

(June 30, 2017). 

A year after its initial 2013 

proceeding, the Commission initiated a 

proceeding in June 2014, entitled ‘‘Price 

Formation in Energy and Ancillary 

Services Markets in Regional 

Transmission Organizations and 

Independent System Operators’’ (Price 

Formation Proceeding) to evaluate 

issues regarding price formation in the 

energy and ancillary services markets 

operated by RTOs and ISOs.30 In a 

December 2014 staff analysis for this 

proceeding, the FERC Staff observes that 

‘‘[a]ll RTOs and ISOs have identified a 

class of reliability and operational 

issues that are incorporated into the 

day-ahead and real-time market 

processes but which are not reflected in 

day-ahead and real-time energy and 

ancillary services prices.’’ 31

The Price Formation Proceeding 

resulted in a number of additional 

proceedings and rulemakings, some of 

which are described below: 

• In November 2016, under Order No. 

825, Settlement Intervals and Shortage 

Pricing in Markets Operated by Regional 

Transmission Organizations and 

Independent System Operators, the 

Commission directed reforms to 

settlement intervals and shortage 

pricing to more accurately compensate 

resources based on the value they 

provide the system.32

• In November 2016, pursuant to a 

NOPR entitled Essential Reliability 

Services and the Evolving Bulk-Power 

System—Primary Frequency Response, 

the Commission proposed a rule to 

require all newly interconnecting large 

and small generating facilities, both 

synchronous and non-synchronous, to 

install and enable primary frequency 

response capability as a condition of 

interconnection.33

• In December 2016, under Order 

831, Offer Caps in Markets Operated by 

Regional Transmission Organizations 

and Independent System Operators, the 

Commission raised existing caps on 

energy market offers and allowed those 

higher-price offers to set market clearing 

prices.34

• In December 2016, pursuant to a 

NOPR entitled Fast-Start Pricing in 

Markets Operated by Regional 

Transmission Organizations and 

Independent System Operators, the 

Commission proposed revising its 

regulations to require RTOs and ISOs to 

incorporate market rules that properly 

price fast-start resources.35 As stated in 

the NOPR, the proposed Fast-Start 

Pricing ‘‘should lead to prices that more 

transparently reflect the marginal cost of 

serving load, which will reduce uplift 

costs and thereby improve price signals 

to support efficient investments.’’ 36

• In January 2017, the Commission 

issued a NOPR entitled Uplift Cost 

Allocation and Transparency in Markets 

Operated by Regional Transmission 

Organizations and Independent System 

Operators.37 Among other things, this 

proposed rule would require that ‘‘each 

regional transmission organization 

(RTO) and independent system operator 

(ISO) that currently allocates the costs of 

real-time uplift due to deviations should 

allocate such real-time uplift costs only 

to those market participants whose 

transactions are reasonably expected to 

have caused the real-time uplift 

costs.’’ 38 This NOPR establishes that the 

goals of the price formation in the 

proceeding are to: 

(1) Maximize market surplus for 

consumers and suppliers; 

(2) Provide correct incentives for 

market participants to follow 

commitment and dispatch instructions, 

make efficient investments in facilities 

and equipment, and maintain reliability; 


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Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 46945 

39 158 FERC ¶ 61,047 Federal Energy Regulatory 

Commission, 18 CFR part 35 [Docket No. RM17–2– 

000] Uplift Cost Allocation and Transparency in 

Markets Operated by Regional Transmission 

Organizations and Independent System Operators 

(January 19, 2017) at 5, para 6. 

40FERC’s Price Formation in Energy and 

Ancillary Services Markets Operated by Regional 

Transmission Organizations and Independent 

System Operators; Docket No. AD14–14–000; 

Notice Inviting Post-Technical Workshop 

Comments (January 16, 2015), Post-Technical 

Conference Questions for Comment at 1. 

(3) Provide transparency so that 

market participants understand how 

prices reflect the actual marginal cost of 

serving load and the operational 

constraints of reliably operating the 

system; and 

(4) Ensure that all suppliers have an 

opportunity to recover their costs.39

Through these proceedings, the 

Commission has developed an extensive 

record on price formation in the 

Commission approved ISOs and RTOs. 

Nevertheless, the fundamental challenge 

of maintaining a resilient electric grid 

has not been sufficiently addressed by 

the Commission or the ISOs and RTOs. 

The continued loss of fuel-secure 

generation must be stopped. These 

generation resources are necessary to 

maintain the resiliency of the electric 

grid. FERC must adopt rules requiring 

the Commission-approved ISOs and 

RTOs to reduce the chronic distortion of 

the markets that is threatening the 

resilience of the Nation’s electricity 

system. 

III. Proposal 

In light of these threats to grid 

reliability and resilience, it is the 

Commission’s immediate responsibility 

to take action to ensure that the 

reliability and resiliency attributes of 

generation with on-site fuel supplies are 

fully valued and in particular to 

exercise its authority to develop new 

market rules that will achieve this 

urgent objective. 

The recent Polar Vortex, as well as the 

devastation from Superstorm Sandy and 

Hurricanes Harvey, Irma, and Maria, 

reinforces the urgency that the 

Commission must act now. Moreover, 

the Commission should take action 

before the winter heating season begins 

so as to prevent the potential failure of 

the grid from the loss of fuel-secure 

generation—as almost happened during 

the 2014 Polar Vortex. 

As outlined, the Commission has 

developed a vast record of comments, 

hearings, and technical conferences on 

price formation matters, but has not 

done enough to address the crisis at 

hand. Immediate action is necessary to 

ensure fair compensation in order to 

stop the imminent loss of generators 

with on-site fuel supplies, and thereby 

preserve the benefits of generation 

diversity and avoid the severe 

consequences that additional shutdowns would have on the electric grid. 

Over the past few years, the 

Commission has been considering 

various aspects of accurate price 

formation within Commission-approved 

organized markets in its ongoing price 

formation docket. Throughout these 

proceedings the Commission has 

declared that a key goal of price 

formation is to ‘‘ensure that all suppliers 

have an opportunity to recover their 

costs.’’ 40 The Commission has 

conducted technical conferences, sought 

and received significant stakeholder and 

public input, and issued and approved 

several market rule changes to 

accomplish these goals. 

Pursuant to the Secretary’s authority 

under section 403 of the Department of 

Energy Organization Act (42 U.S.C. 

7173), the Secretary is directing the 

Commission to exercise its authority 

under sections 205 and 206 of the 

Federal Power Act to issue a final rule 

requiring its organized markets to 

develop and implement market rules 

that accurately price generation 

resources necessary to maintain the 

reliability and resiliency of our Nation’s 

bulk power system. 

The proposed rule allows for the 

recovery of costs of fuel-secure 

generation units frequently relied upon 

to make our grid reliable and resilient. 

Such resources provide reliable 

capacity, resilient generation, frequency 

and voltage support, on-site fuel 

inventory—in addition to providing 

power for our basic needs, quality of 

life, and robust economy. The rule 

allows the full recovery of costs of 

certain eligible units physically located 

within the Commission-approved 

organized markets. Eligible units must 

also be able to provide essential energy 

and ancillary reliability services and 

have a 90-day fuel supply on site in the 

event of supply disruptions caused by 

emergencies, extreme weather, or 

natural or man-made disasters. These 

resources must be compliant with all 

applicable environmental regulations 

and are not subject to cost-of-service 

rate regulation by any State or local 

authority. The rule requires the 

organized markets to establish just and 

reasonable rate tariffs for the recovery of 

costs and a fair rate of return. 

IV. Procedures for Completion of Final 

Action 

A. Deadlines 

Pursuant to section 403(b) of the DOE 

Act, the Secretary is requiring the 

Commission to consider and take final 

action on the proposed rule herein 

within 60 days from the date of the 

publication of this NOPR in the Federal 

Register. As an alternative, the Secretary 

urges the Commission to issue the rule 

proposed herein as an interim final rule, 

effective immediately, with provision 

for later modifications after 

consideration of public comments. The 

Secretary further directs that any final 

rule adopting this proposal take effect 

within 30 days of publication of such 

final rule in the Federal Register. 

B. Comment Procedures 

To ensure that the Commission 

completes final action on this proposed 

rule within the deadline provided, it 

will be necessary to provide for the 

solicitation and review of public 

comments prior to the Commission’s 

final action. To facilitate such comment 

process, the Commission is invited to 

issue a notice providing for such 

process within two business days of the 

publication of this proposed rule in the 

Federal Register. If the Commission 

does not do so, the following comment 

process will take effect: 

Interested persons are invited to 

submit comments on the matters and 

issues proposed in this NOPR to be 

adopted. Comments are due November 

24, 2017. Comments must refer to 

Commission Docket No. RM18–1–000, 

and must include the commenter’s 

name, the organization they represent, if 

applicable, and their address in their 

comments. 

It is encouraged that comments 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-toPDF format and not in a scanned format. 

Commenters filing electronically do not 

need to make a paper filing. 

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. 

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 


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41See, e.g., Order No. 825, FERC Stats. & Regs. 

¶ 31,384 at P 72; Demand Response Compensation 

in Organized Wholesale Energy Markets, Order No. 

745, FERC Stats. & Regs. ¶ 31,322, at P 4 & n.7, 

order on reh’g and clarification, Order No. 745–A, 

137 FERC ¶ 61,215 (2011), reh’g denied, Order No. 

745–B, 138 FERC ¶ 61,148 (2012), vacated sub nom. 

Elec. Power Supply Ass’n v. FERC, 753 F.3d 216 

(D.C. Cir. 2014), rev’d & remanded sub nom. FERC 

v. Elec. Power Supply Ass’n, 136 S. Ct. 760 (2016). 

42 44 U.S.C. 3507(d). 

43 5 CFR 1320. 

44 44 U.S.C. 3507(d) (2012). 

45Burden means the total time, effort, or financial 

resources expended by persons to generate, 

maintain, retain, disclose, or provide information to 

or for a federal agency, including: ‘‘. . . (ii) 

Developing, acquiring, installing, and utilizing 

technology and systems for the purpose of 

collecting, validating, and verifying information; 

(iii) Developing, acquiring, installing, and utilizing 

technology and systems for the purpose of 

processing and maintaining information; (iv) 

Developing, acquiring, installing, and utilizing 

technology and systems for the purpose of 

disclosing and providing information . . . .’’ 5 CFR 

1320.3(b)(1) (2016). The time, effort, and financial 

resources necessary to comply with a collection of 

information that would be incurred by persons in 

the normal course of their activities (e.g., in 

compiling and maintaining business records) will 

be excluded from the ‘‘burden’’ if the agency 

demonstrates that the reporting, recordkeeping, or 

disclosure activities needed to comply are usual 

and customary. 

46This estimate is based on the Commission’s 

estimate used by the Commission in 157 FERC 

¶ 61,213, 18 CFR part 35 [Docket No. RM18–1–000] 

Fast-Start Pricing in Markets Operated by Regional 

Transmission Organizations and Independent 

System Operators (December 15, 2016)]. For this 

information collection, the Commission staff 

estimates that industry is similarly situated in terms 

of hourly cost (wages plus benefits). Based on the 

Commission’s average cost (wages plus benefits) for 

2016, the Commission is using $74.50/hour. 

serve copies of their comments on other 

commenters. 

C. Compliance Filings 

The Secretary further proposes that 

any final rule issued by the Commission 

pursuant to this NOPR shall provide 

that each Commission-approved RTO 

and ISO shall submit a compliance 

filing, including a revised tariff 

pursuant to section 205 of the Federal 

Power Act, within 15 days of the 

effective date of the final rule to 

demonstrate that it meets the proposed 

requirements set forth in any Final Rule. 

This compliance deadline is for each 

RTO and ISO to submit proposed tariff 

changes or otherwise demonstrate 

compliance with any Final Rule. 

Implementing the reforms required by 

any Final Rule in this proceeding may 

be a complex endeavor. However, 

implementation of these reforms is 

important to ensure rates remain just 

and reasonable. Therefore, it is 

proposed that tariff changes filed in 

response to a Final Rule in this 

proceeding must become effective no 

more than 15 days after compliance 

filings are due. 

To the extent that any RTO or ISO 

believes that it already complies with 

the reforms proposed in this NOPR, the 

RTO or ISO would be required to 

demonstrate how it complies in the 

compliance filing required 15 days after 

the effective date of any Final Rule in 

this proceeding. To the extent that any 

RTO or ISO seeks to argue on 

compliance that its existing market rules 

are consistent with or superior to the 

reforms adopted in any Final Rule, the 

Commission has the ability entertain 

such arguments at that time.41

V. Statutory and Regulatory Review 

Section 403(a) of the DOE Act 

authorizes the Secretary of Energy to 

propose rules with respect to any 

function within the jurisdiction of the 

Commission. Section 403(b) of that Act 

provides that the Commission shall 

have exclusive jurisdiction over such 

proposals. Accordingly, although the 

proposal is that of the Secretary of 

Energy, the Commission is the agency 

which will take final action on this 

proposed rulemaking. Therefore, the 

Commission is the appropriate agency 

to comply with the statutory, regulatory 

or Executive Order requirements which 

arise in connection with this 

rulemaking. To the extent a statute, 

regulation, or Executive Order requires 

action before the issuance of a final rule, 

the Commission should take such action 

in sufficient time to permit adoption of 

a final rule within the deadline for final 

action set forth above. 

To the extent that a NOPR—in the 

event the Commission were to issue 

one—would include certain 

information, included below are the 

following: 

VI. Information Collection Statement 

The Paperwork Reduction Act 

(PRA) 42 requires each federal agency to 

seek and obtain Office of Management 

and Budget (OMB) approval before 

undertaking a collection of information 

directed to ten or more persons or 

contained in a rule of general 

applicability. OMB regulations 43

require approval of certain information 

collection requirements imposed by 

agency rules. Upon approval of a 

collection of information, OMB will 

assign an OMB control number and an 

expiration date. Respondents subject to 

the filing requirements of an agency rule 

will not be penalized for failing to 

respond to the collection of information 

unless the collection of information 

displays a valid OMB control number. 

Similar to other recently issued rules 

in its price formation docket, the 

reforms proposed in this NOPR would 

amend the Commission’s regulations to 

improve the operation of organized 

wholesale electric power markets 

operated by RTOs and ISOs. The 

reforms proposed in this NOPR would 

require each RTO and ISO to implement 

market rules that meet certain 

requirements for pricing resiliency 

resources. The reforms proposed in this 

NOPR would require one-time filings of 

tariffs with the Commission and 

potential software upgrades to 

implement the reforms proposed in this 

NOPR. DOE anticipates the reforms 

proposed in this NOPR, once 

implemented, would not significantly 

change currently existing burdens on an 

ongoing basis. With regard to those 

RTOs and ISOs that believe that they 

already comply with the reforms 

proposed in this NOPR, they could 

demonstrate their compliance in the 

compliance filing required 15 days after 

the effective date of any Final Rule in 

this proceeding. The Commission will 

submit the proposed reporting 

requirements to OMB for its review and 

approval under section 3507(d) of the 

Paperwork Reduction Act.44

While the DOE expects the adoption 

of the reforms proposed in this NOPR to 

provide significant benefits, the DOE 

understands implementation can be a 

complex endeavor. Comments are 

sought on the accuracy of provided 

burden and cost estimates and any 

suggested methods for minimizing the 

respondents’ burdens, including the use 

of automated information techniques. 

Specifically, detailed comments are 

sought on the potential cost and time 

necessary to implement aspects of the 

reforms proposed in this NOPR, 

including (1) hardware, software, and 

business processes changes; and (2) 

processes for RTOs/ISOs to vet 

proposed changes amongst their 

stakeholders. 

Burden Estimate: 45 The DOE believes 

that the burden estimates below are 

representative of the average burden on 

respondents, including necessary 

communications with stakeholders. The 

estimated burden and cost for the 

requirements contained in this NOPR 

follow.46


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Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 46947 

47 157 FERC ¶ 61,213, 18 CFR part 35 [Docket No. 

RM18–1–000], Fast-Start Pricing in Markets 

Operated by Regional Transmission Organizations 

and Independent System Operators (December 15, 

2016). 

48Regulations Implementing the National 

Environmental Policy Act of 1969, Order No. 486, 

FERC Stats. & Regs. ¶ 30,783 (1987). 

49 157 FERC ¶ 61,213, 18 CFR part 35 [Docket No. 

RM18–1–000] Fast-Start Pricing in Markets 

Operated by Regional Transmission Organizations 

and Independent System Operators (December 15, 

2016)] at para. 73. 

50 18 CFR 380.4(a)(15). 

51 5 U.S.C. 601–12. 

52 13 CFR 121.101. 

53U.S. Small Business Administration, Table of 

Small Business Size Standards Matched to North 

American Industry Classification System Codes 

(effective Feb. 26, 2016), https://www.sba.gov/sites/ 

default/files/files/Size_Standards_Table.pdf. 

54 13 CFR 121.201 (Sector 22, Utilities). 

55The RFA definition of ‘‘small entity’’ refers to 

the definition provided in the Small Business Act, 

which defines a ‘‘small business concern’’ as a 

business that is independently owned and operated 

and that is not dominant in its field of operation. 

The Small Business Administration’s regulations at 

13 CFR 121.201 define the threshold for a small 

Electric Bulk Power Transmission and Control 

entity (NAICS code 221121) to be 500 employees. 

See 5 U.S.C. 601(3) (citing to section 3 of the Small 

Business Act, 15 U.S.C. 632). 

Number of 

respondents 

Annual 

number of 

responses per 

respondent 

Total number 

of responses 

Average burden hours 

and cost per 

response 

Total annual burden 

hours and total 

annual cost 

Cost per 

respondent 

($) 

(1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) ÷ (1) 

Tariff filing costs ........... 6 1 6 80 hours, $5,920 ......... 480 hours, $35,520 ..... ........................

Implementation costs ... 6 1 6 3,853 hours, $285,122 23,118 hours, 

$1,710,732.

........................

Total (one-time in 

Year 1).

........................ ........................ ........................ 3,933 hours, $291,042 23,598 hours, 

$1,746,252.

291,042 

Cost to Comply: The DOE has 

projected the total cost of compliance, 

all within six months of a Final Rule 

plus initial implementation, to be 

$1,746,252. After Year 1, the reforms 

proposed in this NOPR, once 

implemented, would not significantly 

change existing burdens on an ongoing 

basis. 

Title: PRA approval for this collection 

of information will be obtained by 

FERC. 

Action: Proposed revisions to an 

information collection. 

OMB Control No.: [TBD]. 

Respondents for this Rulemaking: 

RTOs and ISOs. 

Frequency of Information: One-time 

during year one. 

Necessity of Information: The DOE 

proposes this rule to improve 

competitive wholesale electric markets 

in the RTO and ISO regions. 

Internal Review: The DOE has 

reviewed the proposed changes and has 

determined that the changes are 

necessary. These requirements conform 

to the Commission’s need for efficient 

information collection, communication, 

and management within the energy 

industry. This estimate is based on the 

Commission’s estimate in the NOPR for 

‘‘Fast-Start Pricing in Markets Operated 

by Regional Transmission Organizations 

and Independent System Operators’’ 47

and DOE believes that the NOPR is 

similar and would impose similar 

burden associated with the information 

collection requirements. 

Interested persons may obtain 

information on the reporting 

requirements by contacting the 

following: Federal Energy Regulatory 

Commission, 888 First Street NE., 

Washington, DC 20426, Attention: 

Office of the Executive Director, email: 

DataClearance@ferc.gov, Phone: (202) 

502–6608, fax: (202) 273–0873. 

Comments on the collection of 

information and the associated burden 

estimate in the proposed rule should be 

sent to the Commission in this docket 

and may also be sent to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 725 

17th Street NW., Washington, DC 20503 

[Attention: Desk Officer for the Federal 

Energy Regulatory Commission], at the 

following email address: oira_

submission@omb.eop.gov. Please refer 

to Docket No.: RM18–1–000 in your 

submission. 

VII. Environmental Analysis 

Though 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,48 the Commission has 

previously concluded 49 that neither an 

Environmental Assessment nor an 

Environmental Impact Statement is 

required for a NOPR under section 

380.4(a)(15) of the Commission’s 

regulations, which provides a 

categorical exemption for approval of 

actions under sections 205 and 206 of 

the FPA relating to the filing of 

schedules containing all rates and 

charges for the transmission or sale of 

electric energy subject to the 

Commission’s jurisdiction, plus the 

classification, practices, contracts and 

regulations that affect rates, charges, 

classifications, and services.50 This 

NOPR would require an exercise of the 

Commission’s authority under sections 

205 and 206 of the FPA. 

VIII. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(RFA) 51 generally requires a description 

and analysis of proposed rules that will 

have significant economic impact on a 

substantial number of small entities. 

The RFA does not mandate any 

particular outcome in a rulemaking. It 

only requires consideration of 

alternatives that are less burdensome to 

small entities and an agency 

explanation of why alternatives were 

rejected. The Small Business 

Administration’s (SBA) Office of Size 

Standards develops the numerical 

definition of a small business.52 These 

standards are provided on the SBA Web 

site.53

The SBA classifies an entity as an 

electric utility if it is primarily engaged 

in the transmission, generation and/or 

distribution of electric energy for sale. 

Under this definition, the six RTOs/ 

ISOs are considered electric utilities, 

specifically focused on electric bulk 

power and control. The size criterion for 

a small electric utility is 500 or fewer 

employees.54 Since every RTO/ISO has 

more than 500 employees, none are 

considered small entities. Furthermore, 

because of their pivotal roles in 

wholesale electric power markets in 

their regions, none of the RTOs/ISOs 

meet the last criterion of the two-part 

RFA definition of a small entity: ‘‘not 

dominant in its field of operation.’’ 55 As 

a result, we certify that the reforms 

required by this NOPR would not have 

a significant economic impact on a 

substantial number of small entities. 

IX. Executive Order 12866 

This proposed rule has been 

determined not to be a significant 

regulatory action for purposes of 


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46948 Federal Register / Vol. 82, No. 194 / Tuesday, October 10, 2017 / Proposed Rules 

Executive Order 12866. As a result this 

rule was not reviewed by the Office of 

Management and Budget. 

X. Document Availability 

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 5:00 p.m. 

Eastern time) at 888 First Street NE., 

Room 2A, Washington, DC 20426. 

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. 

83. 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. 

XI. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

the publication of this proposed rule. 

List of Subjects in 10 CFR Part 35 

Electric power rates, electric utilities, 

reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on September 

29, 2017. 

Rick Perry, 

Secretary of Energy. 

For the reasons stated in the 

preamble, DOE proposes that FERC 

amend part 35, chapter I of title 18, 

subchapter B, Code of Federal 

Regulations as set forth below: 

PART 35—FILING OF RATE 

SCHEDULES AND TARIFFS 

■ 1. The authority citation for part 35 

continues to read as follows: 

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

2645; 31 U.S.C. 9701; 42 U.S.C. 7101–7352. 

■ 2. Section 35.28 is amended by adding 

paragraph (g)(10) to read as follows: 

§ 35.28 Non-discriminatory open access 

transmission tariff. 

* * * * * 

(g) * * * 

(10) Pricing eligible grid reliability 

and resiliency resources. 

(i) Definition of eligible grid reliability 

and resiliency resources. An eligible 

grid reliability and resiliency resource is 

any resource that: 

(A) Is an electric generation resource 

physically located within a 

Commission-approved independent 

system operator or regional transmission 

organization; 

(B) Is able to provide essential energy 

and ancillary reliability services, 

including but not limited to voltage 

support, frequency services, operating 

reserves, and reactive power; 

(C) Has a 90-day fuel supply on site 

enabling it to operate during an 

emergency, extreme weather conditions, 

or a natural or man-made disaster; 

(D) Is compliant with all applicable 

federal, state, and local environmental 

laws, rules, and regulations; and 

(E) Is not subject to cost of service rate 

regulation by any state or local 

regulatory authority. 

(ii) Scope of application. The 

requirements of this rule shall apply to 

Commission-approved independent 

system operators or regional 

transmission organizations with energy 

and capacity markets and a tariff that 

contains a day-ahead and a real-time 

market or the functional equivalent. The 

application of this rule must be 

consistent between the day-ahead and 

real-time markets. 

(iii) Reliability and resiliency rate. (A) 

Each Commission-approved 

independent system operator or regional 

transmission organization shall 

establish a tariff that provides a just and 

reasonable rate for the— 

(1) Purchase of electric energy from an 

eligible reliability and resiliency 

resource; and 

(2) recovery of costs and a return on 

equity for such resource dispatched 

during grid operations. 

(B) The just and reasonable rate shall 

include pricing to ensure that each 

eligible resource is fully compensated 

for the benefits and services it provides 

to grid operations, including reliability, 

resiliency and on-site fuel-assurance, 

and that each eligible resource recovers 

its fully allocated costs and a fair return 

on equity. 

(iv) Reliability and resiliency costs. 

Compensable costs shall include, but 

not be limited to, operating and fuel 

expenses, costs of capital and debt, and 

a fair return on equity and investment. 

[FR Doc. 2017–21396 Filed 10–6–17; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2017–0750] 

RIN 1625–AA09 

Drawbridge Operation Regulation; 

Pequonnock River, Bridgeport, CT 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes to 

modify the operating schedule that 

governs the Metro-North Peck Bridge 

across the Pequonnock River, mile 0.3, 

at Bridgeport, Connecticut. The owner 

of the bridge, Metro-North Railroad, has 

submitted a request that vessels seeking 

an opening of the draw submit a 

minimum of four hours of advance 

notice. It is expected this change to the 

regulations will better serve the needs of 

the public, particularly commuters and 

commercial interests utilizing the 

Northeast Corridor rail spur, while 

continuing to meet the reasonable needs 

of navigation. 

DATES: Comments and related material 

must reach the Coast Guard on or before 

November 9, 2017. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2017–0750 using Federal eRulemaking 

Portal at http://www.regulations.gov. 

See the ‘‘Public Participation and 

Request for Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below for instructions on submitting 

comments. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this proposed 

rule, call or email Mr. James Moore, 

Project Officer, First Coast Guard 

District, telephone 212–514–4334, email 

James.M.Moore2@uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

E.O. Executive order 

FR Federal Register 

NPRM Notice of proposed rulemaking 

Pub. L. Public Law 

§ Section 

U.S.C. United States Code 

II. Background, Purpose and Legal 

Basis 

The Metro-North Peck Bridge, mile 

0.3, across the Pequonnock River at 

Bridgeport, Connecticut, has a vertical 

clearance of 26 feet at Mean High Water 

and 32 feet at Mean Low Water when 


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