Document ID: FERC-2007-1276-0001
Agency: ferc
Document Type: Rule
Title: Mandatory Reliability Standards for the Bulk-Power System
Posted Date: 2007-07-25T04:00Z

[Federal Register: July 25, 2007 (Volume 72, Number 142)]
[Rules and Regulations]               
[Page 40717-40737]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy07-3]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM06-16-001; Order No. 693-A]

 
Mandatory Reliability Standards for the Bulk-Power System

Issued July 19, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; order on rehearing.

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SUMMARY: The Commission denies rehearing and otherwise reaffirms its 
determinations in Order No. 693. 72 FR 16,416 (April 4, 2007). We 
further clarify certain portions of the Preamble to that order. Order 
No. 693 approved 83 of 107 proposed Reliability Standards, six of the 
eight proposed regional differences, and the Glossary of Terms Used in 
Reliability Standards developed by the North American Electric 
Reliability Corporation, which the Commission has certified as the 
Electric Reliability Organization (ERO) responsible for developing and 
enforcing mandatory Reliability Standards. Order No. 693 also required 
the ERO to submit significant improvements to 56 of the 83 Reliability 
Standards that are being approved as mandatory and enforceable. 
Finally, Order No. 693 provided that the remaining 24 Reliability 
Standards will remain pending at the Commission until further 
information is provided. Order No. 693 adds a new part to the 
Commission's regulations, which states that this part applies to all 
users, owners and operators of the Bulk-Power System within the United 
States (other than Alaska or Hawaii) and requires that each Reliability 
Standard identify the subset of users, owners and operators to which 
that particular Reliability Standard applies. The new regulations also 
require that each Reliability Standard that is approved by the 
Commission will be maintained on the ERO's Internet website for public 
inspection.

DATES: Effective Date: The final rule became effective on June 18, 
2007.

FOR FURTHER INFORMATION CONTACT:
Jonathan First (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8529.
Christy Walsh (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6523.
Robert Snow (Technical Information), Office of Energy Markets and 
Reliability, Division of Reliability, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6716.

SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. 
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

Order on Rehearing

[[Page 40718]]

                                                               Paragraph

I. Introduction.............................................           1
    A. Summary of Order No. 693.............................           3
    B. Procedural Matters...................................           4
II. Discussion..............................................           7
    A. Applicability Issues.................................           7
        1. Bulk-Power System v. Bulk Electric System........           7
        2. NERC Registry....................................          20
        3. Use of the NERC Functional Model.................          48
    B. Mandatory Reliability Standards......................          57
        1. Prioritizing Modifications to Reliability                  57
         Standards..........................................
        2. Trial Period.....................................          61
    C. Common Issues Pertaining to Reliability Standards....          65
        1. Blackout Report Recommendation on Liability                65
         Limitations........................................
        2. Fill-in-the-Blank Standards......................          70
    D. Discussion of Individual Reliability Standards.......          82
        1. EOP-001-0........................................          82
        2. EOP-002-2........................................          86
        3. EOP-008-0........................................          90
        4. FAC-003-1........................................          95
        5. IRO-001-1........................................         100
        6. IRO-005-1 and IRO-005-2..........................         120
        7. MOD-013-1........................................         123
        8. PRC-007-0, PRC-008-0, and PRC-009-0..............         132
        9. TOP-008-1........................................         153
III. Information Collection Statement.......................         156
IV. Document Availability...................................         157

I. Introduction

    1. On March 16, 2007, the Commission issued a Final Rule (Order No. 
693) \1\ approving, pursuant to section 215 of the Federal Power Act 
(FPA),\2\ 83 of 107 proposed Reliability Standards, six of the eight 
proposed regional differences, and the Glossary of Terms Used in 
Reliability Standards (glossary) developed by the North American 
Electric Reliability Corporation (NERC), which the Commission has 
certified as the Electric Reliability Organization (ERO) responsible 
for developing and enforcing mandatory Reliability Standards. However, 
the Commission stated that, although it believed it is in the public 
interest to make these Reliability Standards mandatory and enforceable, 
it also found that much work remains to be done. Specifically, it 
stated that many of these Reliability Standards require significant 
improvement to address, among other things, the recommendations of the 
Blackout Report.\3\ Therefore, pursuant to section 215(d)(5), we 
required the ERO to submit significant improvements to 56 of the 83 
Reliability Standards that are being approved as mandatory and 
enforceable. The Commission stated that the remaining 24 Reliability 
Standards will remain pending at the Commission until further 
information is provided.
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    \1\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, 72 FR 16,416 (Apr. 4, 2007), FERC Stats. & Regs. ] 
31,242 (2007).
    \2\ 16 U.S.C. 824o (2000).
    \3\ U.S.-Canada Power System Outage Task Force, Final Report on 
the August 14 Blackout in the United States and Canada: Causes and 
Recommendations (April 2004) (Blackout Report). The Blackout Report 
is available on the Internet at http://www.ferc.gov/cust-protect/moi/blackout.asp
.

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    2. Order No. 693 added a new part to the Commission's regulations, 
which states that this part applies to all users, owners and operators 
of the Bulk-Power System within the United States (other than Alaska or 
Hawaii) and requires that each Reliability Standard identify the subset 
of users, owners and operators to which that particular Reliability 
Standard applies. The new regulations also require that each 
Reliability Standard that is approved by the Commission will be 
maintained on the ERO's Internet Web site for public inspection.

A. Summary of Order No. 693

    3. In Order No. 693, the Commission stated that there were four 
possible courses of action that it would take with regard to each 
proposed Reliability Standard: (1) Approve; (2) approve as mandatory 
and enforceable; and direct modification pursuant to section 215(d)(5); 
(3) request additional information; or (4) remand. As mentioned above, 
the Commission approved 83 Reliability Standards and directed NERC to 
develop modifications to 56 of the approved Reliability Standards. In 
approving the Reliability Standards, Order No. 693 stated that, for an 
initial period, the Commission would rely on the NERC definition of 
bulk electric system, rather than the statutory Bulk-Power System, and 
NERC's registration process to provide as much certainty as possible 
regarding the applicability to and the responsibility of specific 
entities to comply with the Reliability Standards in the start-up phase 
of a mandatory Reliability Standard regime.\4\ Further, while the 
Commission did not institute a formal ``trial period,'' it directed the 
ERO and Regional Entities to ``focus their resources'' on the ``most 
serious violations'' during an initial period through December 31, 
2007.\5\
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    \4\ Order No. 693 at P 75.
    \5\ Id. at P 221-22.
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B. Procedural Matters

    4. The following entities have filed timely requests for rehearing 
or for clarification of Order No. 693: American Public Power 
Association (APPA); Avista Corporation, Portland General Electric 
Company, and Puget Sound Energy, Inc. (collectively, Avista); City of 
Santa Clara, California (Santa Clara); Cogeneration Association of 
California and the Energy Producers and Users Coalition (California 
Cogeneration); ISO-New England, Inc. (ISO-New England); Midwest 
Independent Transmission System Operator, Inc. (Midwest ISO); National 
Association of Regulatory Utility Commissioners (NARUC); National Rural 
Electric Cooperative Association (NRECA); Pacific Northwest Security 
Coordinator (PNSC); Transmission Agency of Northern California (TANC); 
and Xcel Energy Services, Inc. (Xcel).
    5. PNSC's rehearing request is deficient because it fails to 
include a Statement of Issues section separate from its arguments, as 
required by Rule

[[Page 40719]]

713 of the Commission's Rules of Practice and Procedure.\6\ Rule 
713(c)(2) requires that a rehearing request must include a separate 
section entitled ``Statement of Issues'' listing each issue presented 
to the Commission in a separately enumerated paragraph that includes 
representative Commission and court precedent on which the participant 
is relying.\7\ Under Rule 713, any issue not so listed will be deemed 
waived. Accordingly, we will dismiss PNSC's rehearing request.\8\
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    \6\ 18 CFR 385.713(c)(2) (2006). See Revision of Rules of 
Practice and Procedure Regarding Issue Identification, Order No. 
663, 70 FR 55,723 (September 23, 2005), FERC Stats. and Regs. ] 
31,193 (2005). See also, Order 663-A, effective March 23, 2006, 
which amends Order No. 663 to limit its applicability to rehearing 
requests. Revision of Rules of Practice and Procedure Regarding 
Issue Identification, Order No. 663-A, 71 FR 14,640 (March 23, 
2006), FERC Stats. and Regs. ] 31,211 (2006) (codified at 18 CFR 
385.713(c)(2) (2006)).
    \7\ As explained in Order No. 663, supra, the purpose of this 
requirement is to benefit all participants in a proceeding by 
ensuring that the filer, the Commission, and all other participants 
understand the issues raised by the filer, and to enable the 
Commission to respond to these issues. Having a clearly articulated 
Statement of Issues ensures that issues are properly raised before 
the Commission and avoids the waste of time and resources involved 
in litigating appeals regarding whether the courts of appeals lack 
jurisdiction because the issues on appeal were not clearly 
identified before the Commission. See Order No. 663 at P 3-4.
    \8\ See, e.g., Duke Power Co., LLC, 116 FERC ] 61,171 (2006); 
and South Carolina Electric & Gas Co., 116 FERC ] 61,218 (2006).
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    6. In any event, PNSC's arguments on rehearing are beyond the scope 
of this proceeding. PNSC asks the Commission to clarify that PNSC is in 
compliance with IRO-001 because it has written agreements delineating 
the responsibilities and authority of the operating personnel who staff 
its reliability center. Whether any one entity is in compliance with a 
Reliability Standard is not an issue in the rulemaking.

II. Discussion

A. Applicability Issues

1. Bulk-Power System v. Bulk Electric System
    7. Section 215 of the FPA defines the term ``Bulk-Power System'' as 
follows:

    (A) facilities and control systems necessary for operating an 
interconnected electric energy transmission network (or any portion 
thereof) and (B) electric energy from generating facilities needed 
to maintain transmission system reliability. The term does not 
include facilities used in the local distribution of electric 
energy.

    8. The NERC glossary, in contrast, states that Reliability 
Standards apply to the ``bulk electric system,'' which is defined by 
its regions in terms of a voltage threshold and configuration, as 
follows:

    As defined by the Regional Reliability Organization, the 
electrical generation resources, transmission lines, 
interconnections with neighboring systems, and associated equipment, 
generally operated at voltages of 100 kV or higher. Radial 
transmission facilities serving only load with one transmission 
source are generally not included in this definition.

    9. In Order No. 693, the Commission stated that, for an initial 
period, it would rely on the NERC definition of bulk electric system 
and NERC's registration process to provide as much certainty as 
possible regarding the applicability to and the responsibility of 
specific entities to comply with the Reliability Standards in the 
start-up phase of a mandatory Reliability Standard regime.\9\ However, 
the Commission stated that it was concerned about the need to address 
the potential for gaps in coverage of facilities. The Commission 
intends to address this matter in future proceedings. As a first step 
in enabling the Commission to understand the reach of the Reliability 
Standards, we directed the ERO to provide the Commission with an 
informational filing that includes a complete set of regional 
definitions of bulk electric system and any regional documents that 
identify critical facilities to which the Reliability Standards apply 
(i.e., facilities below a 100 kV threshold that have been identified by 
the regions as critical to system reliability).
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    \9\ Order No. 693 at P 75.
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    10. However, the Commission disagreed with commenters who suggested 
that there is no intentional distinction between Bulk-Power System and 
bulk electric system. This distinction was evidenced by the fact that 
``Congress did not borrow the term of art--bulk electric system--but 
instead chose to create a new term, Bulk-Power System, with a 
definition that is distinct from the term of art used by industry.'' 
\10\ Thus, the Commission ``confirmed'' that the Bulk-Power System 
reaches farther than those facilities that are included in NERC's 
definition of the bulk electric system, although choosing to rely on 
the NERC definition for determining the immediate applicability of the 
approved Reliability Standards. The Commission indicated that it 
remained concerned about potential gaps in coverage of facilities and 
that any change in applicability would be addressed in future 
Commission proceedings.
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    \10\ Id. at P 76.
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a. Requests for Rehearing
    11. NRECA asks that the Commission clarify that it has not 
definitively decided that the term Bulk-Power System as defined in 
section 215 of the FPA encompasses more than NERC's definition of bulk 
electric system. Rather, NRECA understands that the Commission deferred 
on determining whether its jurisdiction expands beyond the bounds of 
the bulk electric system. NRECA is concerned that Order No. 693 may 
suggest that the Bulk-Power System is broader than the bulk electric 
system out of a misapprehension that NERC's definition imposes a 
rigorous 100 kV ``cutoff'' when, according to NRECA, it actually 
provides for more flexibility. Alternatively, if the Commission has 
definitively interpreted the term Bulk-Power System to encompass more 
than the bulk electric system, NRECA seeks rehearing.
    12. In support of its request for rehearing, NRECA raises three 
arguments that the Commission erred in determining that the statutory 
definition of Bulk-Power System is broader than NERC's definition of 
bulk electric system. First, it contends that such a determination 
violates a rule of law that the parts of a statute should be construed 
in accordance with the statute's overall legislative purpose.\11\ NRECA 
explains that section 215 was intended to replace the prior voluntary 
reliability standards with a mandatory scheme but, to the best of 
NRECA's knowledge, no participant in the drafting of the legislation 
expressed the view that Congress intended to expand NERC's scope.\12\ 
NRECA states that, if the issue had been presented, it would have 
prompted a legislative record. The absence of such record confirms that 
an intent to expand NERC's scope was never expressed.
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    \11\ NRECA at 7-11, citing United States v. Public Utilities 
Commission of California, 345 U.S. 295, 315 (1953).
    \12\ NRECA at 7-8.
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    13. Second, NRECA contends that an expansive definition of Bulk-
Power System is contrary to the text of section 215, which narrows the 
Commission's reach. Specifically, NRECA contends that the statutory 
definition of Bulk-Power System makes clear that the term does not 
encompass all transmission facilities but, rather, only those 
facilities and control systems ``necessary for operating an 
interconnected electric energy transmission network.'' It also points 
to the statutory definitions of Reliability Standard and Reliable

[[Page 40720]]

Operation that refer to protecting the system from instability, 
uncontrolled separation or cascading failures. NRECA infers from this 
that there is no reason to conclude that Congress included in the 
definition of Bulk-Power System any facilities other than those that 
could materially contribute to instability, uncontrolled separation or 
cascading outages.
    14. Third, NRECA posits that, if Congress borrows a term of art 
that has an established meaning, the established meaning is to 
apply.\13\ NRECA claims that the terms Bulk-Power System and bulk 
electric system have been used interchangeably for decades and cites 
examples from both industry documents and Commission orders. According 
to NRECA, Congress did not adopt NERC's exact definition of bulk 
electric system because it was insufficiently specific for legislation. 
NRECA asserts that ``Congress used more and different words than NERC 
in order to provide clarity, but the definition of Bulk-Power System 
incorporated the exact same facilities as NERC and the regions had 
always included in their working definition of bulk electric system * * 
*'' \14\
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    \13\ Id. at 11-16, citing Morissette v. United States, 342 U.S. 
246, 263 (1952).
    \14\ NRECA at 16.
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    15. NARUC seeks clarification that the Commission will ``continue 
relying on NERC's definition of Bulk-Power System'' and NERC's 
registration process beyond the initial period during which mandatory 
Reliability Standards are in effect.\15\ It states that section 215 of 
the FPA was enacted based on an industry consensus that it would apply 
to facilities and entities covered by the historical definition of 
Bulk-Power System. According to NARUC, the term applies to higher-
voltage, network facilities that integrate regional transmission 
networks to ensure the reliability of interconnected system operations. 
NARUC states that NERC's definition of Bulk-Power System is consistent 
with section 215 and that a broader interpretation is inconsistent with 
Congressional intent because such a definition could sweep in 
facilities such as load centers and local transmission facilities that 
do not have a material impact on system reliability.
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    \15\ NARUC at 3. NARUC refers repeatedly to ``NERC's definition 
of Bulk-Power System.'' It is not clear from NARUC's pleading 
whether this is simply a typographical error or it seeks to make a 
point that NERC's definition of bulk electric system is equivalent 
to the statutory term Bulk-Power System.
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    16. NARUC also seeks clarification that, if the Commission 
determines that NERC's current definition requires revision, NERC 
should revise the definition using its American National Standards 
Institute (ANSI)-accredited process. Further, NARUC expresses concern 
that the Commission has directed the ERO to submit a complete set of 
regional definitions of bulk electric system and, thus, asks the 
Commission to clarify that it will continue to defer to the ERO's and 
Regional Entities' determinations concerning which facilities and 
entities materially affect the reliability of the interconnected 
transmission network and should be included in the compliance registry.
b. Commission Determination
    17. The Commission will grant NRECA's request for clarification, 
and thus dismisses its request for rehearing. We agree with NRECA that 
NERC's definition of bulk electric system does not impose a 100 kV 
cutoff and provides some flexibility in its application.\16\ Although 
Order No. 693 stated that the Commission believes that the Bulk-Power 
System reaches farther than those facilities that are included in 
NERC's definition of the bulk electric system, the Commission has not 
definitively defined the extent of the facilities covered by the Bulk-
Power System. As we stated in Order No. 693, the Commission intends to 
address concerns regarding the scope of the term Bulk-Power System in 
future proceedings. NRECA and others will not be legally precluded from 
presenting arguments in such a proceeding that the terms Bulk-Power 
System and bulk electric system encompass the same facilities.
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    \16\ See Mandatory Reliability Standards for the Bulk Power 
System, Notice of Proposed Rulemaking, 71 FR 64,770 (Nov. 3, 2006), 
FERC Stats. & Regs., ] 32,608 at P 63 (2006).
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    18. The Commission notes NRECA's assertion that the Commission's 
determination that the Bulk-Power System reaches farther than the bulk 
electric system is contrary to the text of section 215 of the FPA. 
Because the Commission has not definitively defined the extent of the 
facilities covered by the Bulk-Power System, the Commission believes 
that this determination is best made in the context of a Commission 
proceeding determining the extent of the Bulk-Power System. We make no 
finding on the matter at this time. The Commission defers judgment on 
this matter to a later proceeding so that the Commission can develop a 
record on which to base its final determination.
    19. In response to NARUC, the Commission will continue to rely on 
NERC's definition of bulk electric system, with the appropriate 
regional differences, and NERC's registration process until the 
Commission determines in future proceedings the extent of the Bulk-
Power System. The requirement that the ERO file a complete set of 
regional differences was to enable the Commission to understand the 
current reach of the Reliability Standards. However, we do not agree 
with NARUC that NERC should be allowed to define Bulk-Power System 
using its American National Standards Institute (ANSI)-accredited 
process. The statutory term Bulk-Power System defines the jurisdiction 
of the Commission. Although the Commission has chosen to defer, for the 
time being, to the ERO as to which entities must comply with 
Reliability Standards, the fundamental matter of determining the extent 
of Commission's jurisdiction cannot and will not be delegated to the 
ERO.
2. NERC Registry
    20. Order No. 693 accepted the ERO's compliance registry process as 
an appropriate approach to identify the set of entities that are 
responsible for compliance with a particular Reliability Standard.\17\ 
Further, Order No. 693 explained that NERC has developed a Statement of 
Compliance Registry Criteria that describes how NERC will identify 
organizations that may be candidates for registration and assign them 
to the compliance registry. NERC's compliance registry process 
identifies and registers entities based on categories of functions 
within the Bulk-Power System and related Commission-approved 
Reliability Standards. For example, NERC plans to register individual 
generator units of 20 MVA or greater that are directly connected to the 
bulk electric system, generating plants with an aggregate rating of 75 
MVA or greater, any blackstart unit material to a restoration plan, or 
any generator ``regardless of size, that is material to the reliability 
of the Bulk-Power System.'' The Commission accepted the Statement of 
Compliance Registry Criteria, stating that ``[w]e believe that NERC has 
set reasonable criteria for registration* * *''.\18\
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    \17\ Order No. 693 at P 92-101.
    \18\ Id. at P 95.
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    21. Further, Order No. 693 noted that the Commission's regulations 
then exempted most qualifying facilities (QFs) from specific provisions 
of the FPA including section 215.\19\ The Commission, however, 
expressed concerned whether it is appropriate to

[[Page 40721]]

grant QFs a complete exemption from compliance with Reliability 
Standards that apply to other generator owners and operators, and noted 
that the Commission was concurrently issuing a notice of proposed 
rulemaking proposing to amend the Commission's regulation that exempts 
most QFs from section 215 of the FPA. The Commission has since issued a 
final rule eliminating the exemption of QFs from the requirements of 
section 215 of the FPA.\20\
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    \19\ 18 CFR 292.601(c) (2006).
    \20\ Applicability of Federal Power Act Section 215 to 
Qualifying Small Power Production and Cogeneration Facilities, Order 
No. 696, FERC Statutes and Regulations ] 31,248 (2007).
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c. Requests for Rehearing
    22. California Cogeneration argues that the Commission improperly 
relied on the ERO's compliance registry process. It contends that the 
Commission, rather than determining who the ``users'' of the Bulk-Power 
System are, has improperly delegated this task to the ERO and Regional 
Entities. California Cogeneration notes that the NERC registry criteria 
were submitted for information purposes only. Further, it contends that 
these criteria are being applied inconsistently among the Regional 
Entities, noting in particular that Western Electricity Coordinating 
Council (WECC) has developed supplemental criteria that may result in 
the registration of entities not captured by the ERO criteria.\21\ It 
also points to discrepancies in ERCOT's registration process.
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    \21\ California Cogeneration at 5, Referencing WECC Supplemental 
Registration Criteria and Dispute Resolution Process, available at 
http://www.wecc.biz.

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    23. California Cogeneration also argues that Reliability Standards 
that are not clear in how they are applied or are applied 
inconsistently are not just and reasonable. It contends that the 
examples of regional variation in the registration process demonstrate 
a lack of required clarity and consistency.
    24. NRECA asks the Commission to clarify that, in expanding the 
applicability of certain Reliability Standards,\22\ it has not departed 
from the compliance registry concept or sought to dictate actions by 
the ERO. Alternatively, the Commission should grant rehearing. 
According to NRECA, it appears possible, even likely, that the 
Commission was not specifying that additional entities register, but 
was merely specifying that the ERO should consider whether entities 
otherwise required to register (because they meet or exceed specified 
thresholds, or because they had been to shown to have a material impact 
on grid reliability) should also be subject to these particular 
Reliability Standards.\23\ If that is the Commission's intended 
meaning, NRECA requests that the Commission specify the requested 
clarification and resolve the matter (subject to subsequent 
consideration by the ERO). However, if the Commission intends to impose 
a broader obligation, i.e., to encompass additional entities in the 
Reliability Standards, then NRECA seeks rehearing.
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    \22\ NRECA at 20-23. Specifically, NRECA cites the Commission's 
requirement that (1) COM-001-1, or some replacement Reliability 
Standard addressing black start capability, and COM-002-2 apply to 
all distribution providers, (2) TOP-003-0 apply to all load-serving 
entities, even those below specified thresholds, based on the 
opinion of the transmission operator, balancing authority, or 
reliability coordinator, and (3) VAR-001-1 apply to all load-serving 
entities. See Order No. 693 at P 487, 492, 512, 540, 1624, 1626, 
1848, 1858 and 1990.
    \23\ NRECA at 20, citing see, e.g., Order No. 693 at P 512 
(``APPA's concern that 2,000 public power systems would have to be 
added to the compliance registry is misplaced, since, as we explain 
in our Applicability discussed above, we are approving NERC's 
registry process, including the registry criteria'').
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    25. Further, NRECA argues that the Commission should not, as it 
recognized in Order No. 672-A, prescribe either the text or the 
substance of a Reliability Standard, including which entities are 
subject to the Reliability Standards, because that responsibility is 
reserved to the ERO, subject to the Commission's review. NRECA 
maintains that the Commission lacks the authority to dictate what a 
Reliability Standard requires or who it encompasses, as the Commission 
has recognized previously in Order No. 672-A. NRECA notes that Order 
No. 693 states that the Commission ``agrees that a direction for 
modification should not be so overly prescriptive as to preclude the 
consideration of viable alternatives in the ERO's Reliability Standards 
development process * * *. Thus, in some instances, while we provide 
specific details regarding the Commission's expectations, we intend by 
doing so to provide useful guidance to assist in the Reliability 
Standards development process, not to impede it.'' \24\
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    \24\ Order No. 693 at P 185-86.
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    26. Beyond that, NRECA asserts that the Reliability Standards 
should not apply at all to entities whose scope of activities is too 
limited to have a material impact on grid reliability. In other words, 
the specific Reliability Standards should not apply to a distribution 
provider or a load-serving entity just because it is a distribution 
provider or a load-serving entity; instead, the Reliability Standards 
at issue, as well as the Reliability Standards generally, should not 
apply unless an entity has a material impact on grid reliability. 
According to NRECA, this concept is central to NERC's compliance 
registry, and the Commission has not articulated a sound basis for 
departing from it, notwithstanding the Commission's lack of authority 
to do so.
    27. With respect to COM-001-1 or some replacement standard 
addressing black start capability, and COM-002-2, for example, NRECA 
asserts that some entities are functionally irrelevant for black start 
activities. It argues that having to coordinate black start operations 
with a large number of small entities, most, if not all, of which are 
served through interconnections with larger and bigger entities in the 
hierarchy of the Functional Model, would hinder, rather than 
facilitate, black start operations. NRECA maintains that the Commission 
should defer to the ERO's technical expertise.
    28. NRECA raises similar concerns with respect to TOP-003-1. 
According to NRECA, read literally, the Commission appears to recommend 
delegating the determination of whether entities that fall below the 
threshold of NERC's definition of bulk electric system should be 
subject to the standard to ``the opinion of the transmission operator, 
balancing authority, or reliability coordinator.'' If so, NRECA asserts 
that this approach would appear to override both the compliance 
registry and the ERO, and the Commission would effectively delegate 
authority that it does not have to entities that could well face 
incentives to favor their own interests over those of load-serving 
entities that could be made subject to the Reliability Standards. The 
Commission cannot delegate authority it does not have in the first 
place, and the determination should be that of the ERO and the Regional 
Entity. While NRECA agrees that the ERO and the Regional Entities may 
and should take the views of the transmission operators, balancing 
authorities, and reliability coordinators into account, it argues that 
this is considerably different than simply abdicating the matter to 
them.
    29. NRECA has similar concerns with the treatment of VAR-001-1 with 
respect to the Commission's ``direct[ing] the ERO to address the 
reactive power requirements of load-serving entities on a comparable 
basis with purchasing-selling entities.'' While NRECA agrees that this 
may be an appropriate matter for the ERO to consider, it argues that 
the Commission should not be dictating a particular action, nor should 
the Commission be overriding the compliance registry approach that it 
elsewhere endorses in its Final Rule.

[[Page 40722]]

    30. Accordingly, NRECA requests the Commission to clarify that it 
has not overridden the compliance registry with respect to COM-001-1, 
COM-002-2, and TOP-003-0, nor dictated specific changes to those 
Reliability Standards. Alternatively, NRECA seeks rehearing. Absent the 
requested clarification, NRECA asserts that the Commission has sought 
to prescribe the substance of a Reliability Standard in excess of its 
statutory authority under section 215, contrary to its own recognition 
of the limitations on its authority in Order No. 672-A, and contrary to 
Order No. 693 itself. NRECA maintains that the proposed changes could 
undermine rather than enhance reliability for the reasons stated, and 
thus involve matters where the Commission should and is required to 
defer to the ERO's technical expertise.
    31. Xcel notes that, pursuant to NERC's registry criteria, NERC 
will generally register individual generator units of 20 MVA or greater 
that are directly connected to the bulk electric system. According to 
Xcel, under NERC's criteria, generators that are connected to 
distribution facilities are generally exempt from registration as they 
are not connected to the Bulk-Power System. Xcel seeks rehearing of the 
Commission's decision to accept this aspect of the ERO's registration 
process, contending that generating facilities that are connected at a 
distribution voltage but deliver energy to the transmission system can 
affect transmission system reliability and, thus, should be subject to 
mandatory Reliability Standards. Further, Xcel contends that the 
exclusion of facilities connected at a distribution level creates 
inappropriate incentives for entities to interconnect generating 
facilities at the distribution level rather than the transmission 
level.
    32. TANC requests clarification of the Commission's statement that:

we believe our concerns can be addressed by having the ERO, through 
its compliance registry process, ensure that each user, owner and 
operator of the Bulk-Power System is registered for each Requirement 
in the Reliability Standards that relate to transmission owners to 
assure there are no gaps in coverage of the type discussed 
here.[\25\]
---------------------------------------------------------------------------

    \25\ Id. at P 145.

    33. According to TANC, this statement seems to require all entities 
subject to the Reliability Standards to register for each requirement 
applicable to transmission owners, which it states is inconsistent with 
the Commission's goal of preventing overlap and negates the 
transmission owner classification in the NERC Functional Model. 
Therefore, TANC asks the Commission to clarify that only those entities 
that meet the description of transmission owner provided in NERC's 
compliance registry and the NERC Functional Model descriptions are 
required to register as responsible entities for the Requirements 
applicable to transmission owners.
    34. TANC asks that the Commission specify that, where an existing 
contract between two parties provides that one is the transmission 
owner, but the other has agreed to perform the TOP functions, the 
latter entity be listed in the compliance registry as the responsible 
entity for the TOP Reliability Standards. Further, TANC maintains that 
the transmission owner should not be the default entity ultimately 
responsible for compliance with the TOP Reliability Standards. 
According to TANC, only the entity accepting responsibility to perform 
the tasks delegated to it in the agreement should be accountable for 
the responsibilities assigned to it in the agreement. TANC asserts 
that, where entities have assigned responsibilities by contract, there 
is no reason to register those responsibilities to another entity.
    35. California Cogeneration claims that Order No. 693 failed to 
adequately address the unique characteristics of QFs. It states that 
reliance on the registry process, which is based on the 14 functions 
identified in the NERC functional model, does not adequately 
distinguish among different types of generators, including size and 
location, and their impact on reliability. California Cogeneration 
states that the Commission, as a remedy to these infirmities, should 
direct NERC to immediately initiate a stakeholder process to revise the 
Reliability Standards to identify in greater detail the entities that 
are responsible for compliance and revise requirements to recognize the 
operational constraints of different generators. It states that this 
process should be completed before Reliability Standards become 
enforceable. Further, California Cogeneration states that the 
stakeholder process should also develop criteria for determining 
whether an entity has a ``material impact'' on reliability.
    36. Finally, California Cogeneration states that the Commission was 
not responsive to issues raised by California Cogeneration in its 
rulemaking comments regarding individual Reliability Standards that 
apply to generator owners and operators and needed revisions if they 
are to be applied to cogenerators. It states that some of these 
Reliability Standards seem to require information regarding gross 
generation or load behind the customer's point of interconnection, 
contrary to an earlier Commission order.\26\ While the Commission 
directed the ERO to consider these concerns during its three-year Work 
Plan to review each Reliability Standard, California Cogeneration 
contends this approach does not suffice because cogenerators must 
comply with the Reliability Standards in the interim.
---------------------------------------------------------------------------

    \26\ California Cogeneration at 12, citing California 
Independent System Operator, Corp., 96 FERC ] 63,015 (2001) (Initial 
Decision); Opinion No. 464, 104 FERC ] 61,196 (2003) (affirming 
Initial Decision).
---------------------------------------------------------------------------

d. Commission Determination
    37. The Commission denies California Cogeneration's request for 
rehearing concerning the definition of users of the Bulk-Power System. 
The Commission has not improperly delegated this definition to the ERO 
and Regional Entities. While NERC proposed the registry criteria, the 
Commission reviewed the criteria and approved them as appropriate under 
section 215 of the FPA. Further, the Commission has provided a method 
by which any entity that disagrees with NERC's determination to place 
it in the compliance registry may submit a challenge in writing to NERC 
and, if still not satisfied, may lodge an appeal with the 
Commission.\27\ Therefore, the Commission has the ultimate ability to 
determine whether an entity should be on the NERC registry.
---------------------------------------------------------------------------

    \27\ See Order No. 693 at P 101; ERO Certification Order at P 
679.
---------------------------------------------------------------------------

    38. With regard to the fact that certain Regional Entities have 
created supplemental criteria to determine which entities should be on 
the registry, we agree with California Cogeneration that this is not 
appropriate.\28\ Order No. 693 accepted NERC's compliance

[[Page 40723]]

registration process ``to provide as much certainty as possible 
regarding the applicability and responsibility of specific entities 
under the approved standards.'' \29\ NERC's Statement of Compliance 
Registry does not reference supplemental compliance registries created 
by Regional Entities. While both the Commission and the ERO have made 
it clear that an entity that falls below the minimum registry criteria 
may be included on the compliance registry on a facility-by-facility 
basis, nonetheless NERC's compliance registry places the burden on the 
Regional Entity to reasonably demonstrate that the organization is a 
user, owner or operator of the Bulk-Power System.\30\ This language 
contemplates a case-by-case registration of entities outside the NERC 
criteria, provided that a reasonable demonstration of the need to 
register the entity \31\ is made by the Regional Entity.\32\
---------------------------------------------------------------------------

    \28\ We note that the example cited by California Cogeneration 
appears to assert that the NERC registry criteria incorporates a 
bright line test as to which entities should be registered:
    The application of the different sets of criteria to a 30 MW 
generator interconnected at 69 kv illustrates the inconsistency in 
treatment. Under NERC's criteria, the generator is interconnected at 
less than 100 kv, and it is not therefore a user of the bulk 
electric system. The generator would be eliminated from registration 
by the first step of NERC's process. WECC's Supplemental Criteria, 
however, state that a generator greater than 20 MW must be 
registered regardless of the voltage at which it is interconnected.
    California Cogeneration at 5. We disagree with this 
interpretation. NERC's compliance registry would also allow the ERO 
and Regional Entities to register ``[a]ny generator, regardless of 
size, that is a blackstart unit material to and designated as part 
of a transmission operator entity's restoration plan, or; * * * 
[a]ny generator, regardless of size, that is material to the 
reliability of the bulk power system.'' NERC Statement of Compliance 
Registry at 7.
    \29\ Order No. 693 at P 33.
    \30\ NERC Statement of Compliance Registry at 10, n.1.
    \31\ The entity registered would also have to be a user, owner 
or operator of NERC's definition of bulk electric system.
    \32\ The Commission notes that no Regional Entity has filed a 
supplemental registry with the Commission. The Commission makes its 
determination to reject regional registry criteria without prejudice 
to a Regional Entity creating supplemental registry criteria, 
provided that the Regional Entity affords due process to those 
entities that would be subject to them, and requests ERO and 
Commission approval of such criteria.
---------------------------------------------------------------------------

    39. In response to NRECA, in directing the ERO to expand the 
applicability of certain Reliability Standards, the Commission did not 
intend to expand the applicability beyond those entities that are on 
the compliance registry. Rather, we indicated where the Commission 
believed there was a reliability concern in not applying certain 
Reliability Standards to a category of registered entities. For 
example, in COM-001-0, where the Commission directed the ERO to add 
distribution providers that are essential to the implementation of a 
black start plan to the Applicability section, this would include only 
those distribution providers that are on the compliance registry.
    40. The Commission agrees with NRECA to the extent that we do not 
wish that a direction for modification be so overly prescriptive as to 
preclude the consideration of viable alternatives in the ERO's 
Reliability Standards development process. However, as stated in Order 
No. 693, in identifying a specific matter to be addressed in a 
modification to a Reliability Standard, it is important that the 
Commission provide sufficient guidance so that the ERO has an 
understanding of the Commission's concerns and an appropriate, but not 
necessarily exclusive, outcome to address those concerns. Without such 
direction and guidance, the ERO might not know how to respond 
adequately to a Commission proposal to modify a Reliability 
Standard.\33\ Thus, in some instances, while we provided specific 
details regarding the Commission's expectations, we intended by doing 
so to provide useful guidance to assist in the Reliability Standards 
development process, not to impede it.
---------------------------------------------------------------------------

    \33\ Order No. 693 at P 185.
---------------------------------------------------------------------------

    41. With respect to the specific Reliability Standards cited by 
NRECA, the Commission first notes that NRECA does not appear to request 
rehearing on the substance of the directed modifications, but argues 
that the Commission was too prescriptive procedurally. In many 
instances, the Commission provided guidance to the ERO and stated that 
it could develop an alternative to our direction, so long as the 
alternative is as effective and efficient as the Commission's proposal. 
However, with respect to the Reliability Standards cited by NRECA, the 
Commission has identified specific concerns about the gap in 
applicability in the Reliability Standard. For example, as to COM-001-1 
and COM-002-2, the Commission was concerned about having a reliability 
gap during normal and emergency operations. Section 215(d)(5) of the 
FPA states:

    The Commission, upon its own motion or upon complaint, may order 
the Electric Reliability Organization to submit to the Commission a 
proposed reliability standard or a modification to a reliability 
standard that addresses a specific matter if the Commission 
considers such a new or modified reliability standard appropriate to 
carry out this section.

In the instances cited by NRECA, the Commission has identified a 
deficiency in the applicability of the Reliability Standard. To correct 
this deficiency, the ERO must add the specific entity to the 
Applicability section of the Reliability Standard.
    42. TOP-003-0 contains Requirements that can have a significant 
impact on both the reliability of the Bulk-Power System and on 
competition with regard to available transfer capability (ATC). The 
Commission's approval of TOP-003-0 does not override either the 
compliance registry or the ERO. The planning authority or transmission 
planner should inform its Regional Entity if it is not receiving 
cooperation in getting the information it requires. We note that 
section 39.2(d) of our regulations requires each user, owner or 
operator of the Bulk-Power System to provide the Commission, the ERO 
and the applicable Regional Entity such information as is necessary to 
implement section 215 of the FPA. If a problem arises in obtaining 
information necessary to calculate ATC, the Commission may revisit this 
matter in the future. For example, if entities are unable to obtain the 
required information under TOP-003-0, the Commission might require the 
ERO, through the Reliability Standards development process, to develop 
a provision to ensure that all jurisdictional entities that must 
provide information pursuant to TOP-003-0 because of a particular 
reliability need are added to the registry, even if only to meet the 
requirements of TOP-003-0.
    43. The Commission denies Xcel's request for rehearing. As noted by 
Xcel, NERC's registry criteria state that the ERO and Regional Entities 
will ``generally'' register generators greater than 20 MVA and will 
``generally'' exempt generators that are connected to distribution 
facilities. The use of the term ``generally'' allows the ERO and 
Regional Entities flexibility to register a generator meeting those 
descriptions if the ERO or a Regional Entity determines that the 
facility is needed for Bulk-Power System reliability. Further, Order 
No. 693 specifically provided for such an outcome.\34\ Therefore, those 
generating facilities that Xcel is concerned about, which are connected 
at a distribution voltage but deliver energy to the transmission 
system, may be required to comply with Reliability Standards depending 
on a possible case-by-case determination by the ERO or a Regional 
Entity. Xcel does not provide any support for its claim that this 
general exclusion of facilities connected at a distribution level 
creates inappropriate incentives for entities to interconnect 
generating facilities at the distribution level rather than the 
transmission level.
---------------------------------------------------------------------------

    \34\ Id. at P 101. ``Finally, the Commission agrees that, 
despite the existence of a voltage or demand threshold for a 
particular Reliability Standard, the ERO or Regional Entity should 
be permitted to include an otherwise exempt facility on a facility-
by-facility basis if it determines that the facility is needed for 
Bulk-Power System reliability.''
---------------------------------------------------------------------------

    44. In response to TANC's concern that Order No. 693 appears to 
require all entities subject to the Reliability Standards to register 
for each requirement applicable to transmission owners, we disagree. 
This statement was made only to ensure that there are no gaps or 
unnecessary redundancies with regard to the entity or entities 
responsible for compliance. The

[[Page 40724]]

Commission did not intend to imply that each user, owner and operator 
of the Bulk-Power System must comply with those Reliability Standards 
which apply to transmission owners. Rather, the Commission intended for 
the ERO to ensure that there is clarity in the registering of entities 
and that the registration process results in no gaps or unnecessary 
redundancies.
    45. Further, the Commission clarifies that it did not intend to 
change existing contracts, agreements or other understandings as to who 
is responsible for a particular function under a Reliability 
Standard.\35\ The Commission believes that allowing an organization to 
accept compliance responsibility on behalf of its members should cover 
TAPS' concerns regarding a situation in which two entities have a 
contract regarding which will perform functions under the Reliability 
Standards.\36\ NERC has filed procedures for allowing such agreements 
in Docket No. RM06-16-003. The Commission will rule on the particulars 
of those procedures in that proceeding.
---------------------------------------------------------------------------

    \35\ See id. at P 107.
    \36\ See id. at P 107-09.
---------------------------------------------------------------------------

    46. The Commission denies California Cogeneration's request for 
rehearing with respect to exemption of QFs from compliance with 
mandatory Reliability Standards. As stated in Order No. 696, for 
reliability purposes, there is no meaningful distinction between QF and 
non-QF generators that would warrant generic exemption of QFs from 
mandatory Reliability Standards.\37\ Therefore, we disagree with 
California Cogeneration that Order No. 693 failed to adequately address 
the unique characteristics of QFs.
---------------------------------------------------------------------------

    \37\ Order No. 696 at P 28.
---------------------------------------------------------------------------

    47. Whether a generation facility should be subject to Reliability 
Standards should depend on whether electric energy from the generation 
facility is needed to maintain the reliability of the Bulk-Power 
System. The registration criteria adopted by NERC and approved by the 
Commission, as well as the compliance registry process adopted by NERC 
and approved by the Commission, are designed to ensure that only those 
facilities needed to maintain the reliability of the Bulk-Power System 
are subject to the Reliability Standards. The ultimate decision with 
respect to individual generation units or plants is, and must be, made 
on a case-by-case basis. Thus, whether a particular QF or type of QF 
should be exempt from Reliability Standards is an issue that is more 
appropriately raised in the context of NERC's establishment of registry 
criteria for owners and operators of generators, and in the context of 
NERC's compliance registry process. The reliability of the Bulk-Power 
System will be better protected by addressing this issue in the NERC 
compliance registry process, which will ensure that no generator that 
is needed to maintain the reliability of the Bulk-Power System will be 
exempt from Reliability Standards, while excusing those generators that 
are not needed to maintain reliability. Therefore, the Commission 
rejects California Cogeneration's request that it direct NERC to 
immediately initiate a stakeholder process to revise the Reliability 
Standards to identify in greater detail the entities that are 
responsible for compliance and revise requirements to recognize the 
operational constraints of QF generators.
3. Use of the NERC Functional Model
    48. Order No. 693 explained that NERC has developed a ``Functional 
Model'' that defines the set of functions that must be performed to 
ensure the reliability of the Bulk-Power System. The Functional Model 
identifies 14 functions and the name of a corresponding entity 
responsible for fulfilling each function. While the Commission had 
proposed to require that NERC file future revisions to the Functional 
Model, Order No. 693 determined that such filing was not necessary.\38\ 
The Commission made this determination based on the characterization 
offered by numerous commenters that the Functional Model is an evolving 
guidance document that is not intended to convey firm rights and 
responsibilities. Further, the Commission agreed with commenters that 
the applicability section of a particular Reliability Standard should 
be the ultimate determinant of applicability of each Reliability 
Standard. While some commenters asked that all revisions to the 
Functional Model be developed through NERC's ANSI-accredited process, 
the Commission left to the discretion of the ERO the appropriate means 
of allowing stakeholder input when revising the Functional Model.
---------------------------------------------------------------------------

    \38\ Order No. 693 at P 127-29.
---------------------------------------------------------------------------

e. Requests for Rehearing
    49. TANC requests rehearing of the Commission's determination that 
future modifications of the Functional Model do not need to be 
submitted to the Commission for approval. TANC contends that the 
Functional Model is more than just a guidance document and, rather, is 
fundamental to determining the applicability of each Reliability 
Standard. It asserts that the ERO's compliance registry process that is 
used to identify users, owners and operators of the Bulk-Power System 
that must comply with Reliability Standards relies on the Functional 
Model. Thus, according to TANC, a change in the Functional Model 
affects the applicability and enforcement of each Reliability Standard.
    50. Further, TANC contends that the Reliability Standards are not 
``complete,'' a quality objective identified by NERC in the development 
of Reliability Standards, because the Reliability Standards are 
dependent on an external document. TANC is concerned that revising the 
Functional Model could result in additional entities having to comply 
with Reliability Standards without affording these entities adequate 
notice of what is expected of them. It notes that terms used in the 
Functional Model are also defined in the NERC glossary, which was 
approved by the Commission. Thus, TANC requests that the Commission 
require the ERO to submit revisions to the Functional Model for 
Commission approval, either as revisions to the Functional Model or 
revised terms in the NERC glossary, after development through the ERO's 
full Reliability Standards development process.
    51. Midwest ISO contends that the Commission erred in failing to 
require NERC to define the distinct roles of the ``planning 
coordinator'' and ``planning authority.'' According to Midwest ISO, 
while NERC used the term planning authority when it developed the 
``Version 0'' Reliability Standards, it was recognized that there was 
``[no] common understanding of who or what the Planning Authority 
was.'' \39\ Further, Midwest ISO explains that many Reliability 
Standards describe roles for both the planning authority and 
transmission planner. Midwest ISO states that, while the latest 
revision to the Functional Model substitutes the term ``planning 
coordinator'' for ``planning authority,'' this has not resolved the 
problem because the responsibilities of the planning coordinator ``are 
both more limited and wide-area in nature'' and may not be simply 
substituted for those of planning authority. Midwest ISO notes that 
certain Regional Entities are registering entities based on the 
planning authority function as previously defined, and Midwest ISO asks 
rhetorically whether the ERO can hold a company accountable to a set of 
Reliability

[[Page 40725]]

Standards applicable to an entity that it no longer recognizes as 
valid.
---------------------------------------------------------------------------

    \39\ Midwest ISO at 4.
---------------------------------------------------------------------------

    52. Midwest ISO maintains that the Commission did not adequately 
address Midwest ISO's concerns when it stated in Order No. 693 that the 
ERO can address such concerns as it updates and revises the Functional 
Model. According to Midwest ISO, the Reliability Standards state that 
regions should work closely with the planning coordinators on a common 
understanding of roles and responsibilities, but such a process will be 
lengthy and perhaps futile without Commission guidance. Further, 
Midwest ISO states that, while NERC will address this issue in the long 
term, the Commission's failure to provide interim clarification or 
direct NERC to specify the role of the planning coordinator is an 
error.
f. Commission Determination
    53. The Commission denies TANC's request for rehearing. The 
Commission disagrees with TANC that the Commission-approved Reliability 
Standards are incomplete. As stated in Order No. 693, the applicability 
section of a particular Reliability Standard should be the ultimate 
determinant of applicability of each Reliability Standard.\40\ Further, 
the Commission notes that we required the ERO to update the Glossary of 
Terms Used in Reliability Standards through the Reliability Standards 
development process whenever a new or revised Reliability Standard 
includes a new defined term.\41\
---------------------------------------------------------------------------

    \40\ Order No. 693 at P 127.
    \41\ Id. at P 1893.
---------------------------------------------------------------------------

    54. The Commission disagrees with TANC that the Functional Model is 
used to identify users, owners and operators of the Bulk-Power System 
that must comply with Reliability Standards. The compliance registry 
criteria are used to determine which entities must be listed on the 
compliance registry, and therefore must comply with Reliability 
Standards. Changes in the Functional Model cannot require additional 
entities to comply with Reliability Standards. Consistent with our 
explanation in Order No. 693, if an entity is registered as a result of 
a change that emanated from a revision of the Functional Model, the 
entity would have an opportunity to seek review by the ERO and the 
Commission. Accordingly, we deny the request for rehearing and will not 
require NERC to file revisions to the Functional Model.
    55. Further, we reject Midwest ISO's contention that the Commission 
erred in failing to provide guidance in directing NERC to define the 
distinct roles of the planning authority and planning coordinator. 
First, as recognized by Midwest ISO, NERC will address this issue as 
part of its long range plan. This is consistent with the Commission's 
statement in Order No. 693 that ``given that the Functional Model is an 
evolving guidance document, the ERO can address such concerns as it 
updates and revises the Functional Model.'' \42\ Midwest ISO has 
provided insufficient support for its contention that addressing this 
matter may be lengthy and futile without Commission intervention. 
Moreover, consistent with Order No. 693, any ambiguity regarding roles 
and the responsibility of a particular entity for compliance with a 
particular Reliability Standard is a matter that should be addressed in 
the registration of a particular entity.
---------------------------------------------------------------------------

    \42\ Id. at P 129.
---------------------------------------------------------------------------

    56. Finally, we disagree with Midwest ISO's suggestion that it is 
inappropriate to register entities as planning authorities given that 
the applicability provisions of the Commission-approved Reliability 
Standards refer to the planning authority and not the planning 
coordinator. Consistent with our discussion above, revisions to the 
Functional Model do not convey rights and responsibilities but, rather, 
the modification to the applicability provision of a Reliability 
Standard or NERC glossary ultimately determines an entity's 
obligations.

B. Mandatory Reliability Standards

1. Prioritizing Modifications to Reliability Standards
    57. In Order No. 693, the Commission directed the ERO to submit a 
revised Work Plan to: (1) Reflect modification directives contained in 
Order No. 693; (2) include the timeline for completion of ATC-related 
Reliability Standards as ordered in Order No. 890; and (3) account for 
the views of its stakeholders, including those raised in this 
proceeding. The Commission required that the ERO set specific delivery 
dates, explaining that ``[a] Work Plan with specific target dates will 
provide a valuable tool and incentive to timely address the 
modifications directed in this Final Rule.'' \43\ Further, Order No. 
693 stated that:
---------------------------------------------------------------------------

    \43\ Id. at P 207.

the ERO should make every effort to meet such delivery dates. 
However, we understand that there may be certain cases in which the 
ERO is not able to meet [the] Commission's deadline. In those 
instances, the ERO must inform the Commission of its inability to 
meet the specified delivery date and explain why it will not meet 
---------------------------------------------------------------------------
the deadline and when it expects to complete its work.[\44\]

    \44\ Id.
---------------------------------------------------------------------------

g. Requests for Rehearing
    58. NRECA asks for clarification, or alternatively rehearing, that 
Order No. 693 does not allow the imposition and enforcement of 
deadlines that preclude the ERO from satisfying the due process 
requirements set forth in section 215 of the FPA or applying its own 
expertise. NRECA states that a deadline ``may be reasonable or 
unreasonable, and its reasonableness needs to be determined within 
context'' taking into account the complexity of the matter and other 
considerations.\45\ NRECA contends that the imposition and enforcement 
of an unreasonable deadline conflicts with section 215 as well as Order 
No. 672. Thus, NRECA seeks clarification that the Commission's 
assertion of authority to establish deadlines for ERO action represents 
no more than the authority to ``exhort'' the ERO to move expeditiously, 
consistent with its statutory due process obligations. ``However, if 
the Commission is purporting in the Final Rule to reserve the power to 
specify an unreasonable deadline, that undermines due process and 
ignores the ERO's technical expertise in contravention of the 
requirements of section 215, then NRECA seeks rehearing of the 
Commission's determination.'' \46\
---------------------------------------------------------------------------

    \45\ NRECA at 17.
    \46\ Id. at 18.
---------------------------------------------------------------------------

h. Commission Determination
    59. The Commission agrees that it should not impose deadlines that 
preclude the ERO from satisfying the due process requirements set forth 
in section 215 of the FPA, and has provided in several previous orders 
that, in complying with a deadline, NERC must also meet the 
requirements of the FPA and the Commission's regulations. In our 
January 2007 Compliance Order, we made it clear that a revision to 
NERC's expedited Reliability Standards development process must ``make 
it clear that the Commission can order expedited standard development 
in a specific time frame and that NERC must adhere to that time frame 
and still allow for due process.'' \47\ On rehearing, we further 
clarified that ``any ERO process that provides `reasonable notice and 
opportunity for comment, due process, openness, and balance of 
interests' as required by section 215(c)(2)(D) of the FPA, and that 
also can meet a Commission-imposed deadline pursuant

[[Page 40726]]

to section 39.5(g) of the Commission's regulations, will comply with 
this directive.'' \48\
---------------------------------------------------------------------------

    \47\ North American Electric Reliability Corp., 118 FERC ] 
61,030 at P 27 (2007) (January 2007 Compliance Order) (emphasis 
added).
    \48\ North American Electric Reliability Corp., 119 FERC ] 
61,046 at P 13 (2007).
---------------------------------------------------------------------------

    60. Finally, in Order No. 693, the Commission stated that the ERO 
should make every effort to meet Commission-ordered delivery dates. 
However, we acknowledged that ``there may be certain cases in which the 
ERO is not able to meet [the] Commission's deadline. In those 
instances, the ERO must inform the Commission of its inability to meet 
the specified delivery date and explain why it will not meet the 
deadline and when it expects to complete its work.'' \49\
---------------------------------------------------------------------------

    \49\ Order No. 693 at P 207.
---------------------------------------------------------------------------

2. Trial Period
    61. In Order No. 693, while the Commission did not institute a 
formal ``trial period,'' it directed the ERO and Regional Entities to 
``focus their resources'' on the ``most serious violations'' during an 
initial period through December 31, 2007.\50\ Order No. 693 stated that 
this use of enforcement discretion should apply to all users, owners 
and operators of the Bulk-Power System. The Commission explained that 
the goal should be to ensure that, at the outset, the ERO and Regional 
Entities can assess a monetary penalty in a situation where, for 
example, an entity's non-compliance places Bulk-Power System 
reliability at risk. This approach would allow the ERO, Regional 
Entities and other entities time to ensure that the compliance 
monitoring and enforcement processes work as intended and that all 
entities have time to implement new processes.
---------------------------------------------------------------------------

    \50\ Id. at P 221-22.
---------------------------------------------------------------------------

i. Requests for Rehearing
    62. Xcel states that, while it supports the Commission's decision 
that the ERO and Regional Entities should have the enforcement 
discretion to calculate but not collect penalties during an initial 
period, it asks that the Commission provide greater clarity and 
guidance regarding the circumstances when penalties should be collected 
and when they should not. It asks that the Commission be as specific as 
possible in defining the circumstances under which the ERO and Regional 
Entities should exercise their enforcement discretion. It suggests that 
the Commission clarify that to assess a penalty a violation must be, at 
a minimum, (i) an intentional violation of a well-understood 
Reliability Standard and (ii) a violation that causes substantial harm.
j. Commission Determination
    63. The Commission denies Xcel's request for clarification. First, 
the Commission believes that Xcel's requested clarification would not 
always capture the most serious violations. Moreover, the Commission in 
Order No. 693 intentionally declined to develop a threshold that would 
place limits on the ERO's and Regional Entities' exercise of 
enforcement discretion; and we decline to do so here as well. Although 
we clearly allowed for ``the ERO or a Regional Entity to take an 
enforcement action against an entity whose violation causes a 
significant disturbance,'' we also provided that the ERO and Regional 
Entities can assess a monetary penalty in a situation where, for 
example, an entity's non-compliance places Bulk-Power System 
reliability at risk.\51\ We did not require that there be actual harm 
to the Bulk-Power System for the ERO to assess a penalty during the 
transition period.
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

    64. The Commission believes that it is better to allow the ERO and 
Regional Entities to use their expertise in determining which 
violations constitute the most serious. Likewise, the ERO and Regional 
Entities are in the best position to know how to best use their finite 
enforcement resources. This will require case-by-case analysis of the 
circumstances surrounding a situation. Therefore, we will not stipulate 
a single set of circumstances under which the ERO and Regional Entities 
should use their enforcement discretion for the initial transition 
period.

C. Common Issues Pertaining to Reliability Standards

1. Blackout Report Recommendation on Liability Limitations
    65. In Order No. 693, consistent with Order No. 890, the Commission 
did not adopt new liability protections.\52\ The Commission stated that 
it did not believe any further action is needed to implement Blackout 
Report Recommendation No. 8 because the Task Force found that no 
further action is needed.\53\ Further, the Blackout Report indicated 
that some states already have appropriate protection against liability 
suits.\54\ Finally, the Commission stated that, in Order No. 888, as 
affirmed by Order No. 890, the Commission declined to adopt a uniform 
federal liability standard and decided that, while it was appropriate 
to protect the transmission provider through force majeure and 
indemnification provisions from damages or liability when service is 
provided by the transmission provider without negligence, it would 
leave the determination of liability in other instances to other 
proceedings.\55\
---------------------------------------------------------------------------

    \52\ Id. at P 237; Preventing Undue Discrimination and 
Preference in Transmission Service, Order No. 890, 72 FR 12,266 
(March 15, 2007), FERC Stats. & Regs. ] 31,241 (2007) at P 1671-77.
    \53\ U.S.-Canada Power System Outage Task Force, Final Report on 
Implementation of Task Force Recommendations at 22 (Oct. 3, 2006), 
available at http://www.oe.energy.gov/news/blackout.htm (``Action 

Required to Fully Implement Recommendation 8: No further action 
under this recommendation is needed.'').
    \54\ Id. (``In the United States, some state regulators have 
informally expressed the view that there is appropriate protection 
against liability suits for parties who shed load according to 
approved guidelines'').
    \55\ Order No. 888-B, 81 FERC ] 61,248 at 62,081 (1997), order 
on reh'g, Order No. 888-C, 82 FERC ] 61,046 (1998), aff'd in 
relevant part sub nom. Transmission Access Policy Study Group v. 
FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd sub nom. New York v. 
FERC, 535 U.S. 1 (2002).
---------------------------------------------------------------------------

k. Requests for Rehearing
    66. Avista seeks rehearing on the Commission's determination not to 
provide further liability limitations and questions whether it is fair, 
just and reasonable to deny transmission operators that are not 
regional transmission organizations (RTOs) or independent system 
operators (ISOs) the protections afforded to RTOs and ISOs and at the 
same time impose mandatory Reliability Standards with significant fines 
and penalties as an enforcement mechanism.\56\ Avista argues that the 
Commission has limited the scope of liability in the pro forma open 
access transmission tariff (OATT) to instances of gross negligence or 
intentional misconduct and also limited damages by excluding 
consequential, indirect or punitive damages for RTOs and ISOs. 
According to Avista, not providing these same limitations to other 
transmission operators is, on its face, arbitrary, and may have 
unintended adverse consequences to the ratepayers of any transmission 
operator whose operating employee's decisions initiate a large 
cascading outage, if available insurance is not adequate to cover the 
risk. Avista argues that enforcement of mandatory Reliability Standards 
should not depend both on risk of massive liability exposure and upon 
multi-million dollar civil fines and penalties.
---------------------------------------------------------------------------

    \56\ Avista and PSE also requested rehearing of this issue in 
Docket Nos. RM05-25-001 and RM05-17-001.
---------------------------------------------------------------------------

l. Commission Determination
    67. The Commission denies rehearing. The Commission has already 
ruled that the liability standard the Commission has approved for RTOs 
and ISOs is not

[[Page 40727]]

appropriate for other transmission providers.\57\ Further, we also 
found without merit assertions that increased liability protections in 
the pro forma OATT should be viewed as a necessary element of the 
implementation of the Commission's reliability authority.\58\ In the 
Reliability Policy Statement,\59\ the Commission stated that it would 
consider, on a case-by-case basis, proposals by public utilities to 
amend their OATTs to include limitations on liability. The Commission 
further noted that, while this issue has not been resolved on a 
standardized basis, the Commission has entertained RTO transmission 
providers' specific proposals to amend their OATTs to include 
provisions addressing limitations on liability.\60\
---------------------------------------------------------------------------

    \57\ Order No. 890 at P 1675. We note that this discussion 
concerns civil liability only, not liability for penalties imposed 
by the ERO, Regional Entities or the Commission.
    \58\ Id. at P 1677.
    \59\ Policy Statement on Matters Related to Bulk Power System 
Reliability, 107 FERC ] 61,052 (2004) (Reliability Policy 
Statement).
    \60\ Reliability Policy Statement at P 40 (citations omitted).
---------------------------------------------------------------------------

    68. In subsequent orders, the Commission found that the gross 
negligence and intentional wrongdoing indemnification and liability 
standard is appropriate for RTOs and ISOs. However, the Commission has 
declined to extend this protection to all transmission providers. In 
Southwest Power Pool, Inc., the Commission explicitly stated ``that our 
acceptance here of the gross negligence and intentional wrongdoing 
indemnity standard is limited to SPP, in its role as an RTO, and its 
TOs; we do not intend to extend such protection to all transmission 
providers.'' \61\ In Southern Company Services, Inc., the Commission 
stated that:
---------------------------------------------------------------------------

    \61\ 112 FERC ] 61,100 at P 39 (2005).

    Having considered Southern Companies' proposed limitation on 
liability and indemnification provisions pursuant to our Reliability 
Policy Statement cited above, we find that Southern Companies have 
not shown that they are similarly situated to the RTOs/ISOs they 
cite in support. While Southern Companies claim that they `may not 
be protected by any State-regulated limitations on liability,' 
Southern Companies offer no evidence to support this concern. The 
Commission has provided such liability protection to RTOs/ISOs 
because they were created by and solely regulated by the Commission, 
and otherwise would be without limitations on liability. Southern 
Companies have proffered no evidence of any change in circumstances 
vis-[agrave]-vis their liability exposure post-Order No. 888.\62\
---------------------------------------------------------------------------

    \62\ 113 FERC ] 61,239 at P 7 (2005).

    69. Further, we disagree with Avista that there is a risk of 
massive liability exposure. It offers no new arguments that demonstrate 
that non-RTO and non-ISO transmission providers are unable to rely on 
state laws, i.e., the state laws provide inadequate protection. Avista 
has not persuaded us to change our policy regarding liability 
protections applicable to non-RTO and non-ISO transmission providers. 
Therefore, we deny rehearing.
2. Fill-in-the-Blank Standards
    70. In Order No. 693, the Commission required supplemental 
information for any Reliability Standard that currently requires a 
regional reliability organization to fill in missing criteria or 
procedures.\63\ The Commission explained that, where important 
information has not yet been provided, it would not approve or remand 
such Reliability Standards until the ERO submits further information. 
Until such information is provided, compliance with the so-called fill-
in-the-blank standards should continue on a voluntary basis, and the 
Commission considers compliance with such Reliability Standards to be a 
matter of good utility practice. Further, the Commission stated:
---------------------------------------------------------------------------

    \63\ Order No. 693 at P 297-302.

    In our Reliability Policy Statement, we explained that 
compliance with NERC Reliability Standards (or more stringent 
regional standards) is expected as a matter of good utility practice 
as that term is used in the pro forma OATT. The Commission continues 
to expect compliance with such Reliability Standards as a matter of 
good utility practice. That being said, the Commission agrees that 
retaining a dual mechanism to enforce Reliability Standards both as 
good utility practice and under section 215 of the FPA is 
inappropriate; the OATT only applies to entities subject to our 
jurisdiction as public utilities under the FPA, while section 215 
defines more broadly our jurisdiction with respect to mandatory 
Reliability Standards. We therefore do not intend to enforce, as an 
OATT violation, compliance with any Reliability Standard that has 
not been approved by the Commission under section 215.\64\
---------------------------------------------------------------------------

    \64\ Id. at P 302 (footnote omitted).
---------------------------------------------------------------------------

m. Requests for Rehearing
    71. While APPA believes that Order No. 693 correctly deferred 
consideration of the ``fill-in-the-blank'' standards, it requests 
rehearing of the Commission's approval of other Reliability Standards 
that incorporate the ``fill-in-the-blank'' standards. APPA argues that 
the Commission cannot, lawfully, approve Reliability Standards for 
immediate enforcement that incorporate those same unreviewed and 
unapproved regional Reliability Standards.
    72. According to APPA, approving a Reliability Standard that 
references an unapproved fill-in-the-blank standard requires compliance 
with regional Reliability Standards that the Commission has not 
reviewed or approved. APPA asserts that the Commission cannot determine 
if a Reliability Standard that references a pending Reliability 
Standard is ``just, reasonable, not unduly discriminatory or 
preferential, and in the public interest'' for the same reasons that 
the Commission articulated in determining that it lacked important 
information needed to evaluate ``fill-in-the-blank'' standards.
    73. APPA also argues that the approved Reliability Standards that 
reference a fill-in-the-blank standard do not promote uniformity and 
consistency as required by Order No. 672. APPA asserts that the 
Commission cannot determine if such Reliability Standards are 
justified, because the regional standard is more stringent than 
continent-wide Reliability Standards or is necessitated by a physical 
difference in the Bulk-Power System, without reviewing the regional 
standard in question to determine whether one of those two findings is 
appropriate. APPA also maintains that the Commission cannot conclude 
that the processes by which the regional practices involved in the 
referenced fill-in-the-blank standards were developed meet statutory 
requirements. APPA raises concerns about due process and fundamental 
fairness, asserting that small entities have often not been included in 
past regional processes, and may not have received prior notice of the 
standards with which they must now comply.
    74. APPA also argues the Commission is incorrect that ``many of 
these Reliability Standards either refer to the process of collecting 
data or reference Requirements that entities are generally aware of 
because they have already been following these Reliability Standards on 
a voluntary basis.'' According to APPA, Reliability Standards may sweep 
in many small entities that have not been members of regional 
reliability organizations and have not necessarily complied with 
standards on a voluntary basis.
    75. APPA argues that the Commission's approval of Reliability 
Standards that make enforceable unreviewed ``fill-in-the-blank'' 
standards could trigger registration of a large number of small 
entities. According to APPA, unless it can be assumed that no change in 
the scope or content of the fill-in-the-blank standards will result 
from the ongoing process

[[Page 40728]]

NERC and the Regional Entities are undertaking to fill in the blanks, 
mandatory enforcement of the ``before'' version is likely to sweep in 
different entities and subject them to different standards than will 
the ``after'' version. Further, APPA asserts that, by posing the 
potential to sweep a large number of small entities onto the compliance 
registry before the applicable regional standard is approved, the 
Commission's decision calls into question its adherence in Order No. 
693 to the Regulatory Flexibility Act requirements because, absent 
review of the undisclosed incorporated ``fill-in-the-blank'' standards, 
the Commission cannot estimate the number of small systems these 
Reliability Standards will affect. Further, APPA maintains that the 
Commission cannot make the requisite determination that a small 
entity's compliance with an unapproved ``fill-in-the-blank'' standard 
has a material impact on reliability, and the Commission cannot find 
such compliance necessary for Bulk-Power System reliability.
    76. Finally, APPA maintains that, even though the Commission stated 
that the fact that a Reliability Standard references a fill-in-the-
blank standard ``may be considered in an enforcement action,'' \65\ the 
Commission should not have approved such Reliability Standards. 
According to APPA, the ability of an entity to raise this issue in an 
enforcement action occurs too late to avoid the harm to many small 
entities in being required to register and comply with what it calls 
unapproved regional underfrequency load shedding (UFLS) programs that 
have not been developed through Commission-approved processes meeting 
the statutory standard, and which may well differ from the final 
standard that the Commission approves to fill in the blanks. Nor, 
according to APPA, does the ability to raise issues relating to fill-
in-the-blank standards in an enforcement action avoid the potential for 
significant distraction of NERC and Regional Entities from more crucial 
reliability-related duties to instead deal with compliance by numerous 
small entities that have no material impact on the grid with regional 
standards that are in a state of flux. APPA also asserts that this 
statement cannot overcome the fundamental legal deficiency with 
approving a Reliability Standard that references a fill-in-the-blank 
standard--that the Commission lacks authority to approve regional 
reliability standards that require compliance with regional UFLS 
standards it has neither reviewed nor approved.
---------------------------------------------------------------------------

    \65\ Id. at P 300.
---------------------------------------------------------------------------

    77. Xcel contends that the statement that the Commission does not 
intend to enforce, as an OATT violation, compliance with any 
Reliability Standard that has not been approved by the Commission under 
section 215 is confusing. By stating that the Commission does not 
intend to enforce as an OATT violation compliance with a Reliability 
Standard that has not been approved by the Commission under section 
215, Xcel is concerned that the Commission may intend to enforce as an 
OATT violation non-compliance with a Reliability Standard that has been 
approved by the Commission under section 215. Xcel seeks clarification 
or rehearing on this issue.
n. Commission Determination
    78. The Commission denies APPA's request for rehearing and provides 
further clarification. The Commission continues to believe that the 
fact that a Reliability Standard simply references a Reliability 
Standard that was not approved or remanded in Order No. 693 does not 
alone justify not approving the former Reliability Standard. Rather, 
such a reference may be considered in an enforcement action, if 
relevant, but is not a reason to delay approval of the Reliability 
Standard. Further, we clarify that, in an enforcement proceeding, such 
a reference can be considered regarding whether a particular 
Requirement or part of a Requirement in an otherwise approved 
Reliability Standard is enforceable.\66\ The Commission did not err in 
approving Reliability Standards that reference a pending Reliability 
Standard because they contain the appropriate level of specificity 
necessary to provide notice to users, owners and operators of the Bulk-
Power System as to what is required. We will discuss the issue raised 
by APPA in regard to the Protection and Control Systems (PRC) group of 
Reliability Standards in our discussion of individual Reliability 
Standards below.
---------------------------------------------------------------------------

    \66\ See discussion of PRC-007, PRC-008, and PRC-009, infra.
---------------------------------------------------------------------------

    79. In approving a Reliability Standard that references a fill-in-
the-blank standard, the Commission is not requiring compliance with the 
unapproved Reliability Standard. Therefore, it is immaterial how the 
regional differences discussed in the unapproved Reliability Standard 
were created. Rather, as addressed more fully in our discussion on the 
PRC group of Reliability Standards below, the Commission, ERO and 
Regional Entities will only enforce the data requirements and any 
requirement that can be independently enforced in those Reliability 
Standards, and will not enforce compliance with regional criteria 
created by a regional reliability organization pursuant to an 
unapproved fill-in-the-blank standard.\67\
---------------------------------------------------------------------------

    \67\ This is similar to our action in Order No. 693, where we 
approved certain Reliability Standards, but acknowledged that a 
particular requirement may be unenforceable. See Order No. 693 at P 
147, 157-58.
---------------------------------------------------------------------------

    80. APPA's contention that approving a Reliability Standard that 
references a fill-in-the-blank standard could trigger additional small 
entity registration is speculative. At this time, registration is 
governed by NERC's definition of bulk electric system and its 
compliance registry criteria. Nothing in a Reliability Standard can 
cause an entity to be registered if it would otherwise not be required 
to do so.
    81. In response to Xcel, the Commission clarifies that it does not 
intend to enforce as a violation of good utility practice non-
compliance with a Reliability Standard that has been approved by the 
Commission under section 215. However, where the OATT contains a 
specific requirement that may be related to a Reliability Standard, for 
example, an independent obligation under the OATT to calculate 
transmission capacity, the Commission does not limit its ability to 
take enforcement action separately against a violation of a Reliability 
Standard and a violation of a specific OATT provision. Such 
determinations will be based on the facts of a specific circumstance.

D. Discussion of Individual Reliability Standards

1. EOP-001-0
    82. Reliability Standard EOP-001-0 requires each transmission 
operator and balancing authority to develop, maintain and implement a 
set of plans to mitigate operating emergencies. These plans must be 
coordinated with other transmission operators and balancing authorities 
and the reliability coordinator.
    83. Order No. 693 approved Reliability Standard EOP-001-0. In 
addition, the Commission directed the ERO to develop a modification to 
EOP-001-0 that, among other things, includes the reliability 
coordinator as an applicable entity. In pertinent part, the Commission 
found the reliability coordinator to be a necessary entity under EOP-
001-0 and directed the ERO to modify the Reliability Standard to 
include the reliability coordinator as an

[[Page 40729]]

applicable entity.\68\ Recognizing the importance NERC attributes to 
the reliability coordinator in connection with matters covered by EOP-
001-0, the Commission was persuaded that specific responsibilities for 
the reliability coordinator in the development and coordination of 
emergency plans must be included as part of this Reliability Standard. 
The Commission reasoned that, while balancing authorities and 
transmission operators are capable of developing, maintaining and 
implementing plans to mitigate operating emergencies for their specific 
areas of responsibility, unlike reliability coordinators, they do not 
have a wide-area view.
---------------------------------------------------------------------------

    \68\ Id. at P 566.
---------------------------------------------------------------------------

o. Requests for Rehearing
    84. Midwest ISO disagrees with the Commission's mandate to the ERO 
to make EOP-001-0 applicable to the reliability coordinator. It notes 
that the Commission correctly did not provide guidance on the 
reliability coordinators' role in the emergency planning process and 
appears to have left this issue up to the industry experts. Midwest ISO 
argues that the industry had already addressed any potential role of 
the reliability coordinator in emergency planning by declining to make 
the reliability coordinator an applicable entity in EOP-001-0.
p. Commission Determination
    85. The Commission affirms its determination to mandate that the 
ERO make EOP-001-0 applicable to the reliability coordinator function 
because it is the highest level of authority responsible for reliable 
operation of the Bulk-Power System and has a wide-area view. Midwest 
ISO has not substantively disputed that Requirements for mitigation of 
emergencies will benefit from including a role for the entity with a 
wide-area view. The ERO may consider other equivalent alternatives and 
consider industry concerns in its modification of EOP-001-0.
2. EOP-002-2
    86. EOP-002-2 applies to balancing authorities and reliability 
coordinators and is intended to ensure that they are prepared for 
capacity and energy emergencies. This Reliability Standard requires 
that balancing authorities have the authority to bring all necessary 
generation on line, communicate about energy and capacity emergencies 
with the reliability coordinator and coordinate with other balancing 
authorities. EOP-002-2 includes an attachment that describes an 
emergency procedure to be initiated by a reliability coordinator that 
declares one of four energy emergency alert levels to provide 
assistance to the load-serving entity.
    87. Order No. 693 approved Reliability Standard EOP-002-2. In 
addition, the Commission directed the ERO to develop a modification to 
EOP-002-2 that, among other things, would modify the Reliability 
Standard to ensure that the Transmission Loading Relief (TLR) procedure 
is not used to mitigate actual Interconnection Reliability Operating 
Limit (IROL) violations. The Commission found that the TLR procedure 
may be appropriate and effective for use in managing potential IROL 
violations, but that the TLR procedure is an inappropriate and 
ineffective tool for mitigating actual IROL violations or for use in 
emergency situations as called for in EOP-002-2. Accordingly, the 
Commission directed the ERO to modify the Reliability Standard to 
ensure that the TLR procedure is not used to mitigate actual IROL 
violations.\69\
---------------------------------------------------------------------------

    \69\ Order No. 693 at P 583.
---------------------------------------------------------------------------

q. Requests for Rehearing
    88. Midwest ISO requests that the Commission clarify which of the 
following conditions constitutes a ``potential IROL'' violation for 
purposes of EOP-002-2: (1) The operating limit has been exceeded, but 
30 minutes has not elapsed and the operator may yet return the system 
to normal; or (2) the operating limit has not been exceeded, but 
appears that it may be if action is not taken quickly. Midwest ISO 
believes that the second circumstance is the one the Commission 
identified as being appropriate for TLR mitigation, but reasons that 
the terminology can be interpreted differently by different operators 
applying historically different operating practices.
r. Commission Determination
    89. The Commission clarifies that a potential IROL violation refers 
to the second circumstance provided by Midwest ISO, in which ``the 
operating limit has not been exceeded, but appears that it may be if 
action is not taken quickly.'' In such a situation, use of TLR 
procedures may be appropriate depending on the circumstances. Moreover, 
actions undertaken under the TLR procedure are not fast and predictable 
enough for use in situations in which an operating security limit is 
being violated.
3. EOP-008-0
    90. EOP-008-0 addresses plans for loss of control center 
functionality. It requires each reliability coordinator, transmission 
operator and balancing authority to have a plan to continue reliable 
operations and to maintain situational awareness in the event its 
control center is no longer operable.
    91. Order No. 693 approved Reliability Standard EOP-008-0. In 
addition, the Commission directed the ERO to develop a modification to 
EOP-008-0 that, among other things, includes a Requirement that 
provides for backup capabilities that, at a minimum, requires 
transmission operators and balancing authorities that have operational 
control over significant portions of generation and load to have 
minimum backup capabilities, but may do so through contracting for 
these services instead of through dedicated backup control centers.\70\
---------------------------------------------------------------------------

    \70\ Id. at P 672.
---------------------------------------------------------------------------

s. Requests for Rehearing
    92. Midwest ISO supports the outcome of Order No. 693 with regard 
to Commission mandates in EOP-008-0. However, it notes that ambiguities 
and potential misunderstandings could result from imprecise adjectives 
in the Reliability Standards. Specifically, for purposes of EOP-008-0, 
Midwest ISO advocates that the Commission should define an amount of 
load or generation that constitutes a ``significant'' portion of 
generation and load that would require entities to have minimum backup 
capabilities through backup control centers. Alternatively, Midwest ISO 
proposes that NERC could be directed to create a ``safe-harbor'' limit 
below which a system would not be considered significant unless found 
to be so by the Regional Entity or the ERO.
t. Commission Determination
    93. The Commission reiterates its direction in Order No. 693 that 
the goal of this Reliability Standard is to provide the continuation of 
Reliable Operation and the maintenance of situational awareness in the 
event that the primary control center is no longer operational.\71\ To 
that end, every registered reliability coordinator, balancing 
authority, transmission operator, and centrally dispatched generator 
operator should have a plan and means of achieving the outcome of the 
plan upon the loss of their respective control centers. The Commission 
has identified three requirements as a minimum for the plans--
independence from the primary

[[Page 40730]]

control center, capability to operate for a prolonged period 
corresponding to the time it would take to replace the primary control 
center, and the provision of a minimum set of tools and facilities to 
replicate the critical reliability functions of the primary control 
center. The Reliability Standard should provide specific Requirements, 
based on the size or impact to Reliable Operation, to achieve the 
Commission's requirements.
---------------------------------------------------------------------------

    \71\ See Order No. 693 at P 659.
---------------------------------------------------------------------------

    94. The Commission declines to define a ``safe harbor'' limit 
requested by Midwest ISO. We directed the ERO, through the Reliability 
Standards development process, to identify what Requirements are 
necessary on which size entities to achieve the Commission's directives 
and the goal of this Reliability Standard. Since there are many equally 
efficient ways of achieving the Commission's direction, we will not 
identify any specific method or safe harbor.
4. FAC-003-1
    95. FAC-003-1 addresses vegetation management on transmission 
rights-of-way. As proposed, FAC-003-1 would apply to transmission lines 
operated at 200 kV or higher voltage (and lower-voltage transmission 
lines which have been deemed critical to reliability by a regional 
reliability organization). It would require each transmission owner to 
have a documented vegetation management program in place, including 
records of its implementation. Each program must be developed for the 
geographical area and specific design configurations of the 
transmission owner's system.
    96. Order No. 693 approved Reliability Standard FAC-003-1. In 
addition, while we did not direct the ERO to submit a modification to 
the general limitation on applicability to facilities above 200 kV, we 
required the ERO to address Commission concerns regarding the 
applicability threshold through the ERO's Reliability Standards 
development process.\72\ The Commission was concerned that the bright-
line applicability threshold of 200 kV in this Reliability Standard 
would exclude a significant number of transmission lines that could 
impact Bulk-Power System reliability. We stated that, in proposing to 
require the ERO to modify the Reliability Standard to apply to Bulk-
Power System transmission lines that have an impact on reliability as 
determined by the ERO, we did not intend to make this Reliability 
Standard applicable to fewer facilities than it is currently, but to 
extend the applicability to lower-voltage facilities that have an 
impact on reliability.
---------------------------------------------------------------------------

    \72\ Id. at P 735.
---------------------------------------------------------------------------

u. Requests for Rehearing
    97. NRECA asks that the Commission clarify that Order No. 693 did 
not mandate that FAC-003-1 apply to lines below 200 kV. NRECA believes 
that a fair reading of Order No. 693 is that the Commission only 
directed the ERO to give additional consideration to having FAC-003-1 
apply to lines below 200 kV and did not purport to require such a 
modification.\73\ However, NRECA claims that other portions of Order 
No. 693 appear to go further, such as where the Commission states that 
it is requiring the Reliability Standard ``to include a greater number 
of entities* * *''. \74\ In view of the potential ambiguity, NRECA 
requests that the Commission clarify that it is not dictating a 
particular outcome to the ERO's deliberations, as such a directive 
would be contrary to section 215 of the FPA, Order Nos. 672 and 672-A, 
and other portions of Order No. 693. Alternatively, NRECA requests 
rehearing.
---------------------------------------------------------------------------

    \73\ NRECA at 23, citing Order No. 693 at P 706 (``We will not 
direct NERC to submit a modification to the general limitation on 
applicability as proposed in the NOPR. However, we will require the 
ERO to address the proposed modification through its Reliability 
Standards development process'').
    \74\ NRECA at 23, citing Order No. 693 at P 711.
---------------------------------------------------------------------------

v. Commission Determination
    98. We will grant NRECA's request for clarification. First, in 
Order No. 693, we specifically stated that ``[w]e will not direct NERC 
to submit a modification to the general limitation on applicability [in 
FAC-003-1] as proposed in the NOPR.'' \75\ Further, as a general 
matter, we stated that a direction for modification should not preclude 
the consideration of viable alternatives in the ERO's Reliability 
Standards development process.\76\
---------------------------------------------------------------------------

    \75\ Order No. 693 at P 706.
    \76\ Id. at P 185-86.
---------------------------------------------------------------------------

    99. In Order No. 693, the Commission stated that it was concerned 
that the bright-line applicability threshold of 200 kV would exclude a 
significant number of transmission lines that could impact Bulk-Power 
System reliability. We noted that, at that time no regional reliability 
organization had used its discretion to designate lower voltage lines 
under the proposed Reliability Standard, even though there are lower 
voltage lines involving IROL.\77\ The Commission was concerned that 
this approach would not require all transmission lines that could 
impact Bulk-Power System reliability to be included under this 
Reliability Standard. While the Commission did not mandate that FAC-
003-1 apply to lines below 200 kV, the Commission did require the ERO 
to address the Commission's concerns through its Reliability Standards 
development process.
---------------------------------------------------------------------------

    \77\ The Commission notes that the Regional Entities have since 
filed their definitions of bulk electric system and that at least 
one Regional Entity, WECC, has designated lower voltage facilities 
that must comply with the Reliability Standards.
---------------------------------------------------------------------------

5. IRO-001-1
    100. IRO-001-1 requires that a reliability coordinator have 
reliability plans, coordination agreements and the authority to act and 
direct reliability entities to maintain reliable system operations 
under normal, contingency and emergency conditions. Requirement R3 
provides that a reliability coordinator ``shall have clear decision-
making authority to act and direct actions to be taken'' by applicable 
entities to ``preserve the integrity and reliability of the bulk 
electric system and these actions shall be taken without delay but no 
longer than 30 minutes.''
    101. Order No. 693 approved Reliability Standard IRO-001-1. In 
Order No. 693, the Commission declined to adopt a change suggested by 
Santa Clara that would only require the commencement of corrective 
control action within a 30-minute limit. We found that the requirement 
to take action without delay and within the 30-minute limit is 
important to minimize the amount of time the system operates in an 
insecure mode and is vulnerable to cascading outages.\78\
---------------------------------------------------------------------------

    \78\ Id. at P 898.
---------------------------------------------------------------------------

w. Requests for Rehearing
    102. Santa Clara seeks rehearing of the Commission's determination 
not to order the ERO to modify Reliability Standard IRO-001-1. Santa 
Clara is concerned that the 30-minute time period during which entities 
must take remedial action under this Reliability Standard could be too 
short with respect to physical actions that must be taken where the 
facilities which are subject to these actions cannot be readily 
accessed within the 30-minute time period.\79\
---------------------------------------------------------------------------

    \79\ In its comments to the NOPR, Santa Clara requested that 
this requirement of IRO-001-1 be revised to read: ``Actions shall be 
commenced without delay, but in any event, shall commence within 30 
minutes.'' Santa Clara Comments, December 28, 2006 at 30.
---------------------------------------------------------------------------

    103. First, Santa Clara maintains that the reliability coordinator 
could direct that load be dropped within Silicon Valley Power's (SVP) 
service territory.\80\ According to Santa Clara, those

[[Page 40731]]

directives could only be implemented through a physical activity, such 
as opening breakers within certain substations, and cannot be 
accomplished at all times using an electronic signal from SVP's control 
center. Therefore, Santa Clara claims that, while SVP personnel would 
respond to the reliability coordinator's directive immediately, the 
required action might not be able to be accomplished within 30 minutes.
---------------------------------------------------------------------------

    \80\ SVP is the utility division of Santa Clara.
---------------------------------------------------------------------------

    104. As another example, Santa Clara states that SVP has a program 
through which certain SVP retail customers can commit to reduce base 
load by 10 percent where an emergency exists in its control area. 
However, Santa Clara maintains that reducing load by shutting down 
power to specific buildings can take longer than 30 minutes. Santa 
Clara states that it is not seeking to have the language in IRO-001-1 
modified as it requested in comments to the NOPR. Rather, it seeks to 
have the Commission grant rehearing to direct NERC to modify IRO-001-1 
and allow Santa Clara to work with NERC to develop clarifications and 
refinements to IRO-001-1 to remedy its concerns.
    105. Avista seeks clarification of the intent of Order No. 693 as 
to whether the authority of a reliability coordinator to issue 
directives to reliability entities arises out of (i) reliability 
coordinator contracts or (ii) Commission-approved Reliability Standards 
without reliance on reliability coordinator contracts. According to 
Avista, if the authority of a reliability coordinator is non-
contractual and arises out of Commission-approved Reliability 
Standards, the Commission must make sure that such authority is 
accompanied by equitable treatment of reliability entities. For 
example, Avista states that the Commission should require equitable 
compensation for re-dispatch of generation required by the reliability 
coordinator and emphasizes the need for fair and impartial procedures 
and methodologies are adopted to ensure that such equitable treatment 
is provided.
    106. Avista states the Commission's statement in Order No. 693 that 
it ``clarifies that it did not intend to change existing contracts, 
impose new organizational structures or otherwise affect existing 
agreements that set forth the responsibilities of various entities'' 
\81\ applies to existing agreements that affect reliability coordinator 
functions. According to Avista, provisions of IRO-001-1 seem to imply 
that, as to the source and scope of authority for a reliability 
coordinator to issue directives, existing contracts may have been 
superseded, or rendered moot or unnecessary, by Order No. 693. In 
particular, Avista contends that Requirement R8 of IRO-001-1 seems to 
suggest that contracts are unnecessary to authorize reliability 
coordinators to issue directives.\82\
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    \81\ Order No. 693 at P 141.
    \82\ Requirement R8 states: ``R8. Transmission Operators, 
Balancing Authorities, Generator Operators, Transmission Service 
Providers, Load-Serving Entities, and Purchasing-Selling Entities 
shall comply with Reliability Coordinator directives unless such 
actions would violate safety, equipment, or regulatory or statutory 
requirements. Under these circumstances, the Transmission Operator, 
Balancing Authority, Generator Operator, Transmission Service 
Provider, Load-Serving Entity, or Purchasing-Selling Entity shall 
immediately inform the Reliability Coordinator of the inability to 
perform the directive so that the Reliability Coordinator may 
implement alternate remedial actions.''
---------------------------------------------------------------------------

    107. Avista asserts that, if transmission operators or balancing 
authorities or other reliability entities are subject to a non-
contractual duty imposed by the Commission under Order No. 693 to 
comply with the directives of a reliability coordinator, the Commission 
should clearly indicate such a requirement. It notes that, in another 
proceeding, Western Electricity Coordinating Council (WECC) seems to 
suggest that it believes that when the reliability coordination 
Reliability Standards become mandatory, the existing contracts 
regarding reliability or security coordination no longer will be 
relevant and will not be necessary to authorize reliability 
coordinators to issue mandatory directives to reliability entities.\83\
---------------------------------------------------------------------------

    \83\ Supplemental Comments of the Western Electricity 
Coordinating Council (WECC) filed March 12, 2007, in Docket No. 
RR06-3-001 at 13 (``Currently the BAs [balancing authorities] and 
TOPs [transmission operators] have a contractual obligation to 
comply with such directives, except in narrow, enumerated 
circumstances. Once the reliability standards are mandatory, BAs and 
TOPs must obey such directives or be subject to major penalties or 
other sanctions.'') (footnote omitted).
---------------------------------------------------------------------------

    108. On the other hand, Avista maintains that additional provisions 
of IRO-001-1 suggest that reliability coordinators must have contracts 
or other written evidence in place that delineate and evidence their 
authority over reliability entities. For example, Avista cites measure 
M2 of IRO-001-1, which states that each reliability coordinator shall 
have and provide upon request evidence that could include, but is not 
limited to, job descriptions, signed agreements, an authority letter 
signed by an officer of the company, or other equivalent evidence that 
will be used to confirm that the reliability coordinator has the 
authority to act as described in Requirement 3. According to Avista, 
this provision suggests that the source of authority to issue 
directives lies in a contractual relationship between the reliability 
coordinator and each reliability entity covered by the requirements of 
Requirement R3.\84\ In Avista's view, the language in the Purpose 
section indicates that the purpose of IRO-001-1 is to establish 
authority of reliability coordinators over reliability entities through 
contracts, in addition to establishing internal authority through 
delegations of authority and plans presumably through Requirement R2.
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    \84\ Requirement R3 states, ``The Reliability Coordinator shall 
have clear decision-making authority to act and to direct actions to 
be taken by Transmission Operators, Balancing Authorities, 
Generation Operators, Transmission Service Providers, Load Serving 
Entities and Purchasing-Selling Entities within its Reliability 
Coordinator Area to preserve the integrity and reliability of the 
Bulk Electric System.''
---------------------------------------------------------------------------

    109. Avista asserts that the security coordinator in the Pacific 
Northwest, PNSC, does not have contractual relationships with 
reliability entities other than control area operators. Avista contends 
that, if the authority of a reliability coordinator to issue directives 
to reliability entities arises out of reliability coordinator 
contracts, the reliability coordinator will need to enter into 
contractual relationships with each of the reliability entities within 
its area--which would expand the scope of and parties to the current 
PNSC contracts. Further, Avista states that existing contracts may not 
contain provisions regarding the authority of reliability coordinators 
to issue directives to reliability entities that fully track the 
Reliability Standards.\85\
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    \85\ For example, Avista contends that Requirements R8 and R3 of 
IRO-001-1, when read together, contain very broad language.
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    110. Therefore, Avista requests rehearing and asks that the 
Commission require that (1) reliability coordinators develop and file 
contracts or tariffs that govern their reliability coordination 
authority and activities, and (2) such contracts or tariffs ensure 
equitable treatment of reliability entities by reliability coordinators 
and provide adequate procedures and methodologies to help ensure such 
equitable treatment. Avista also seeks rehearing for the purpose of 
expanding the time to transition from the current, voluntary 
contractual arrangements to the arrangements contemplated by Order No. 
693.
    111. Specifically, Avista asserts that the Commission should 
require reliability coordinators to file such contracts or tariffs 
under section 205 of the FPA. In this regard, Avista states that the 
Commission should, as a first

[[Page 40732]]

step, require reliability coordinators to submit for filing their 
existing contracts, such as the contracts between PNSC and the control 
area operators. According to Avista, filing of these contracts or 
tariffs under section 205 should ensure the equitable treatment of 
reliability entities, provide a mechanism for redress in the event of 
inequitable treatment, and provide a basis for the Commission's 
determination that the Reliability Standards approved by Order No. 693 
are just and reasonable.
x. Commission Determination
    112. In response to Avista, the Commission clarifies that a 
reliability coordinator's authority to issue directives arises out of 
the Commission's approval of Reliability Standards that mandate 
compliance with such directives. Avista is correct that contracts are 
unnecessary to authorize reliability coordinators to issue directives. 
Under the voluntary reliability scheme in place prior to section 215 of 
the FPA, a contractual basis was needed to assure that entities would 
comply with a reliability coordinator's directive. Pursuant to the 
current, mandatory reliability scheme established by statute, contracts 
are no longer needed. We view the concerns raised by Avista as part of 
the transition from a voluntary to mandatory scheme. Although, as noted 
by Avisa, IRO-001-1 retains references to contracts, we view these as 
vestiges of an earlier program that no longer control given the 
current, mandatory mechanism.
    113. Avista's assertion that, if transmission operators, balancing 
authorities or other reliability entities are subject to a non-
contractual duty imposed by the Commission under Order No. 693 to 
comply with the directives of a reliability coordinator, the Commission 
should have clearly indicated such a requirement, is not justified. 
First, the Commission believes that this duty was clearly laid out in 
the Reliability Standards themselves. However, the duty to comply with 
Reliability Standards is imposed by section 215 of the FPA, not by 
contract. The Reliability Standards approved by the Commission include 
requirements that certain users, owners and operators of the Bulk-Power 
System follow directions given by the reliability coordinators.\86\ The 
duty to follow such directions lies in the duty to comply with 
Reliability Standards as laid out in section 215 of the FPA and the 
Commission's regulations.
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    \86\ For example, Requirement R9 of IRO-001-1 states that 
transmission operators, balancing authorities, generator operators, 
transmission service providers, load-serving entities, and 
purchasing-selling entities shall comply with Reliability 
Coordinator directives unless such actions would violate safety, 
equipment, or regulatory or statutory requirements.
---------------------------------------------------------------------------

    114. The Commission notes that Avista uses the Commission's 
statement that it ``clarifies that it did not intend to change existing 
contracts, impose new organizational structures or otherwise affect 
existing agreements that set forth the responsibilities of various 
entities'' \87\ for the proposition that the Commission did not intend 
to change or otherwise affect existing agreements about reliability 
coordinator functions. We disagree with Avista on this point. The 
Commission made this statement regarding the responsibility for 
functions in the Functional Model, especially regarding ISOs, RTOs or 
any organizations that pool resources. In that statement, we clarified 
that we were not changing any contract to which an ISO, RTO or pooled 
resource organization is a party as to who must comply with specific 
requirements of the Reliability Standards.
---------------------------------------------------------------------------

    \87\ Order No. 693 at P 141.
---------------------------------------------------------------------------

    115. In response to Avista's arguments regarding Measure M2 of IRO-
001-1, the Commission does not believe that this measure imposes a 
requirement that reliability coordinators must have contracts in place. 
Measure M-2 of IRO-001-1 requires each reliability coordinator to have 
and provide upon request evidence that it has the authority to have 
clear decision-making authority to act and to direct actions to be 
taken by certain users, owners and operators within its area to 
preserve the integrity and reliability of the bulk electric system. 
Neither the Reliability Standard nor the Commission prescribed the form 
of such evidence.
    116. Avista's concerns regarding whether existing contracts, 
including those regarding the contracts with PNSC, and whether 
contracts, generally, have been superseded or rendered moot or 
unnecessary by Order No. 693 are beyond the scope of this proceeding. 
This proceeding established mandatory Reliability Standards, including 
those pertaining to directions by reliability coordinators. Reliability 
coordinator contracts are not before the Commission in this proceeding. 
Therefore, the Commission cannot rule here on any issue regarding such 
contracts.
    117. The Commission denies Avista's request that the Commission 
require reliability coordinators to develop and file contracts or 
tariffs that govern their reliability coordination authority and 
activities. The Commission understands that reliability must be a 
primary goal. Each user, owner and operator of the Bulk-Power System 
must be in compliance with the Reliability Standards so that everyone 
can have the benefits of using the system. As stated above, the 
Reliability Standards do not prescribe the form through which each 
reliability coordinator must provide evidence of its clear decision-
making authority to act and to direct actions to be taken by certain 
entities. To that end, it is unnecessary to require each reliability 
coordinator to file a contract or tariff.
    118. We deny Santa Clara's request for rehearing. In Order No. 693, 
the Commission noted that various commenters provided specific 
suggestions to improve or otherwise modify a Reliability Standard that 
address issues not raised in the NOPR. In such circumstances, the 
Commission directed the ERO to consider such comments as it modifies 
the Reliability Standards during the three-year review cycle 
contemplated by NERC's Work Plan through the ERO Reliability Standards 
development process. The Commission, however, did not direct any 
outcome other than that the comments receive consideration.\88\
---------------------------------------------------------------------------

    \88\ See id. at P 188.
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    119. However, the Commission denied Santa Clara's specific request 
to modify Requirement R3 of IRO-001-1, explaining that, when system 
integrity or reliability is jeopardized, e.g., when IROLs or SOLs are 
exceeded, the relevant reliability entities must take corrective 
control actions to return the system to a secure and reliable state as 
soon as possible but not longer than 30 minutes.\89\ The Commission 
believes that this reaction time has been vetted through the industry 
and that the 30-minute time limit for action is important to minimize 
the amount of time the system operates in an insecure mode and is 
vulnerable to cascading outages.
---------------------------------------------------------------------------

    \89\ Id. at P 898.
---------------------------------------------------------------------------

6. IRO-005-1 and IRO-005-2
    120. IRO-005-1 ensures energy balance and transmission reliability 
for the current day by identifying tasks that reliability coordinators 
must perform throughout the day. Order No. 693 approved Reliability 
Standard IRO-005-1.
y. Requests for Rehearing
    121. TANC requests clarification as to whether the Commission 
intended to approve IRO-005-1 or IRO-005-2 in Order No. 693. Although 
the Commission states that it approves IRO-005-1,\90\ TANC notes that 
NERC submitted a later version, IRO-005-2, in

[[Page 40733]]

its November filing. Therefore, TANC seeks clarification that the 
Commission intended to approve IRO-005-1, rather than the more recently 
filed IRO-005-2.
---------------------------------------------------------------------------

    \90\ See Id. at P 945, 951.
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z. Commission Determination
    122. The Commission grants TANC's request for clarification. As 
stated in Order No. 693, the Commission approved version one of IRO-
005.\91\
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    \91\ The Commission notes that many provisions of IRO-005-2 only 
become effective when BAL-002 is retired. If and when NERC proposes 
to retire BAL-002, we will make a determination on IRO-005-2.
---------------------------------------------------------------------------

7. MOD-013-1
    123. MOD-013-1 requires the regional reliability organizations 
within an Interconnection to develop comprehensive dynamics data 
requirements and reporting procedures needed to model and analyze the 
dynamic behavior and response of each Interconnection. More 
specifically, the regional reliability organization, in coordination 
with its transmission owners, transmission planners, generator owners 
and resource planners within an Interconnection, is required to: (1) 
Participate in development of documentation for their Interconnection 
data requirements and reporting procedures; (2) participate in the 
review of those data requirements and reporting procedures at least 
every five years; and (3) make the data requirements and reporting 
procedures available to NERC and other specified entities upon request.
    124. Because MOD-013-1 is a fill-in-the-blank standard, the 
Commission stated that it will not approve or remand MOD-013-1 until 
the ERO submits additional information. However, the Commission 
directed the ERO to develop a modification to MOD-013-1 to (1) permit 
entities to estimate dynamics data if they are unable to obtain unit 
specific data for any reason; (2) require verification of the dynamic 
models with actual disturbance data and (3) expand the applicability 
section to include the planning authority, transmission operator and 
transmission planner.
aa. Requests for Rehearing
    125. TANC requests that the Commission clarify that it erred in 
directing the ERO to apply MOD-013-1 to transmission operators and 
transmission planners. Although the Commission left Reliability 
Standard MOD-013-1 pending, TANC asserts that the Commission stated 
that it would adopt the NOPR proposal to expand the applicability 
section to include planning authorities, but in a later summary 
paragraph directed the ERO to apply the standard to transmission 
operators and transmission planners, in addition to planning 
authorities.\92\ TANC states that the inclusion of transmission 
operators and transmission planners was neither mentioned in the NOPR 
nor discussed in Order No. 693. In the alternative, TANC requests 
rehearing.
---------------------------------------------------------------------------

    \92\ Compare Order No. 693 at P 1199; 1200.
---------------------------------------------------------------------------

    126. ISO-New England requests rehearing of the Commission's 
determination to (1) permit entities to estimate dynamics data if they 
are unable to obtain unit specific data for any reason; (2) require 
verification of the dynamic models with actual disturbance data; and 
(3) expand the applicability section to include the planning authority, 
transmission operator and transmission planner. ISO-New England states 
that the Commission's direction to the ERO to modify MOD-013-1 appears 
internally inconsistent with other positions the Commission took in 
Order No. 693. First, ISO-New England notes that the Commission 
required the ERO to modify MOD-013-1 because it would allow the use of 
estimated data but, at the same time, required ``verification of the 
dynamic models with actual disturbance data.''
    127. Second, ISO-New England observes that the Commission stated in 
Order No. 693 that ``[f]ailure to provide the data needed for dynamics 
system modeling and simulation would halt regional reliability 
assessment processes and impede planners from accurately predicting 
future system conditions, which would be detrimental to system 
reliability.'' \93\ Further, ISO-New England points to the Commission's 
statement in Order No. 693 that it believes ``to achieve the goal of 
this Reliability Standard of having the ability to accurately model and 
analyze the dynamic behavior and response of each Interconnection, it 
is necessary to have accurate data.'' \94\ In sum, ISO-New England 
argues that just as the Commission has recognized the importance of 
accurate data with respect to the administration of other NERC 
Reliability Standards, the Commission should equally recognize the 
importance with regard to MOD-013-1.
---------------------------------------------------------------------------

    \93\ Id. at P 1177.
    \94\ Id. at P 1188.
---------------------------------------------------------------------------

    128. Further, ISO-New England argues that the Blackout Report 
suggests that actual data should be required.\95\ Specifically, ISO-New 
England points to the Blackout Report's recommendation to improve the 
quality of system modeling data and data exchange practices. ISO-New 
England notes that the Blackout Report indicates that ``after-the-fact 
models developed to simulate August 14 conditions and events found that 
the dynamic modeling assumptions for generator and load power factors 
in regional planning and operating models were frequently inaccurate.'' 
\96\ Further, ISO-New England states that the Task Force commented 
that, during the investigation process, it too found that data was 
frequently not available.\97\ Consequently, ISO-New England maintains 
that the Task Force recommended the collection of validated data.\98\
---------------------------------------------------------------------------

    \95\ ISO-New England at 4, citing Blackout Report at 160-61.
    \96\ Blackout Report at 160.
    \97\ Id. at 161.
    \98\ ISO-New England at 4, citing Blackout Report at 160-61.
---------------------------------------------------------------------------

    129. Finally, ISO-New England states that Order No. 693 leaves too 
much unclear in terms of its direction that entities should be 
permitted to estimate dynamics data if unit specific data is 
unavailable ``for any reason.'' According to ISO-New England, this 
exemption appears ``overbroad'' and could serve as the basis for an 
asset owner's rejection of any reasonable request for the unit specific 
data. ISO-New England requests that, if the Commission retains its 
direction to permit entities to estimate dynamics data, that it narrow 
the scope of the exemption that asset owners may employ in providing 
unit specific data.
bb. Commission Determination
    130. The Commission denies TANC's request for rehearing. TANC 
correctly identifies that the Commission did not approve or remand MOD-
013-1, but provided direction to the ERO concerning the addition of 
entities not already identified in the Reliability Standard. Although 
we acknowledge that Order No. 693 did not include a discussion of the 
addition of transmission operators and transmission planners in the 
applicability section of this Reliability Standard, in directing the 
ERO to apply MOD-013-1 to transmission operators and transmission 
planners, we recognized that transmission operators and transmission 
planners would be required to perform coordination functions under 
Requirement R1 of MOD-013-1. Therefore, the Commission directed the ERO 
to specifically include transmission operators and transmission 
planners in the applicability section of MOD-013-1 so as to be clear 
what the Commission considers to be the minimum applicability of this

[[Page 40734]]

Reliability Standard and to make the Reliability Standard internally 
consistent.
    131. In response to ISO-New England's concerns, the Commission 
notes that the data referenced in Requirement R1.1 include ``items such 
as inertia constant, damping coefficient, saturation parameters, and 
direct and quadrature axis reactances and time constants, excitation 
systems, voltage regulators, turbine-governor systems, power system 
stabilizers, and other associated generation equipment.'' Much of these 
data will be estimated from similar classes of facilities prior to the 
facilities going into service. The Commission clarifies that its 
determination to permit entities to estimate dynamics data if they are 
unable to obtain unit specific data for any reason is limited to the 
initial analysis of dynamics data. While we continue to believe that 
``[a]chieving the most accurate possible picture of the dynamic 
behavior of the Interconnection requires the use of actual data,'' \99\ 
we acknowledge that, in certain circumstances, actual data may not be 
initially available and only obtained through ``verification of the 
dynamic models with actual disturbance data.'' In addition, in Order 
No. 693, we determined that ``the Reliability Standard should include 
Requirements that such estimates be based on sound engineering 
principles and be subject to technical review and approval of any 
estimates at the regional level.'' \100 \This procedure would allow 
peer review and approval at a regional level such that an entity could 
not avoid using sound engineering principles in obtaining the initial 
data for the model.
---------------------------------------------------------------------------

    \99\ Order No. 693 at P 1197.
    \100\ Id.
---------------------------------------------------------------------------

8. PRC-007-0, PRC-008-0, and PRC-009-0
    132. PRC-007-0 requires transmission owners, transmission 
operators, load-serving entities and distribution providers to provide, 
and annually update, their underfrequency data to facilitate the 
regional reliability organization's maintenance of the UFLS program 
database.\101\ PRC-008-0 requires transmission owners and distribution 
providers to implement UFLS equipment maintenance and testing programs 
and provide program results to the regional reliability organization. 
PRC-009-0 ensures that the performance of a UFLS system is analyzed and 
documented following an underfrequency event by requiring the 
transmission owner, transmission operator, load-serving entity and 
distribution provider to document the deployment of their UFLS systems 
in accordance with the regional reliability organization's program. 
Order No. 693 approved Reliability Standards PRC-007-0, PRC-008-0,\102\ 
and PRC-009-0.\103\
---------------------------------------------------------------------------

    \101\ A UFLS program is a ``safety net'' that will automatically 
drop load at specific locations in the power system in an effort to 
re-establish the balance between generation and load to avoid 
cascading.
    \102\ The Commission also directed the ERO to develop a 
modification to PRC-008-0 that includes a requirement that 
maintenance and testing of a protection system must be carried out 
within a maximum allowable interval that is appropriate to the type 
of the protection system and its impact on the reliability of the 
Bulk-Power System. The Commission's direction to modify PRC-008-0 is 
not at issue in this proceeding.
    \103\ Order No. 693 at P 1484, 1491, and 1498.
---------------------------------------------------------------------------

    133. These Reliability Standards reference PRC-006-0, which the 
Commission did not approve or remand because the regional procedures 
required by the Reliability Standard had not been submitted and because 
it applies to regional reliability organizations.\104\ The Commission 
reasoned that since PRC-007-0, PRC-008-0, and PRC-009-0 are existing 
Reliability Standards that have been followed on a voluntary basis, 
transmission owners, transmission operators, distribution providers and 
load-serving entities are generally aware of their requirements. In 
addition, the Commission stated that a reference in an approved 
Reliability Standard to an unapproved Reliability Standard may be 
considered in an enforcement action, but is not a reason to delay 
approving and enforcing this Reliability Standard.
---------------------------------------------------------------------------

    \104\ Id. at P 1479.
---------------------------------------------------------------------------

cc. Request for Rehearing
    134. APPA requests rehearing of Commission approval of PRC-007-0, 
PRC-008-0, and PRC-009-0. As discussed more fully in the section 
concerning ``Fill-in-the-Blank Standards above,\105\ APPA believes that 
each of these three Reliability Standards cannot be approved because it 
references a fill-in-the-blank standard that was not approved or 
remanded by the Commission.
---------------------------------------------------------------------------

    \105\ See section II.C.2., 2. Fill-in-the-Blank Standards, 
supra.
---------------------------------------------------------------------------

    135. According to APPA, PRC-006-0 is the Reliability Standard that 
requires the development of regional UFLS programs and contains 
detailed and exacting requirements that the regions develop and apply 
to applicable entities. According to APPA, PRC-006-0 is the source of 
the design and documentation of regional UFLS programs and is not 
merely administrative or a simple codification of established industry 
practice. Rather, APPA asserts that PRC-006-0 sets forth very specific 
requirements that each regional UFLS program must meet.
    136. APPA asserts that PRC-007-0, PRC-008-0 and PRC-009-0 go much 
further than imposing data requirements. APPA states that PRC-007-0 
requires, among other things, that any transmission owner and 
distribution provider with a UFLS program must ensure that its UFLS 
program is consistent with its regional reliability organization's UFLS 
program requirements. PRC-008-0 requires transmission owners and 
distribution providers to implement UFLS equipment maintenance and 
testing programs and provide program results to the regional 
reliability organization. Finally, APPA maintains that PRC- 009-0 
requires a transmission owner, transmission operator, load-serving 
entity, and distribution provider that owns or operates a UFLS program 
to analyze performance under that unapproved program. According to 
APPA, because the required UFLS program has not been approved or 
reviewed by the Commission under PRC-006-0, users, owners and operators 
of the Bulk-Power System cannot be required to have a program 
consistent with it.
    137. APPA maintains that the fact that these three Reliability 
Standards apply to specific users, owners and operators of the Bulk-
Power System, rather than a regional reliability organization, does not 
justify approval of a reliability standard that requires users, owners 
and operators of the Bulk-Power System to comply with regional UFLS 
programs that have not been approved by NERC, and have not been shown 
to meet the procedural and substantive requirements of section 215 of 
the FPA and Order No. 672 for Reliability Standards that qualify for 
approval and enforcement by the ERO and this Commission. Further, APPA 
contends that, although the Commission appears to have approved these 
Reliability Standards in part because they have ``been followed on a 
voluntary basis,'' many small entities have often not been part of 
regional reliability organizations and have not necessarily been aware 
of, much less followed, regional programs on a voluntary basis.
dd. Commission Determination
    138. We deny APPA's request for rehearing and affirm our approval 
of Reliability Standards PRC-007-0, PRC-008-0 and PRC-009-0. However, 
as explained below, we clarify that the limited provisions that relate 
to the regional UFLS program developed under PRC-006-0 are not 
enforceable

[[Page 40735]]

until the Commission approves PRC-006-0.\106\ Specifically, any entity 
that is responsible for compliance with PRC-007-0, PRC-008-0 or PRC-
009-0 that currently does not have a UFLS program is not required to 
develop such a program until PRC-006-0 is approved. Likewise, a 
responsible entity with an existing UFLS program is not required to 
comply with a regional UFLS program until the Commission approves PRC-
006-0. An explanation for this determination follows.
---------------------------------------------------------------------------

    \106\ Such provisions would similarly be enforceable if NERC 
develops and the Commission approves a substitute for PRC-006-0.
---------------------------------------------------------------------------

    139. Each of the requirements in PRC-007-0, PRC-008-0 and PRC-009-
0, with the exception of Requirement R1 in PRC-007-0, apply only to 
those entities that have a UFLS program. Therefore, contrary to APPA's 
assertion, PRC-007-0, PRC-008-0 and PRC-009-0 do not require any entity 
that does not have a UFLS program to develop one. That requirement 
would fall under PRC-006-0. To be clear, the Commission will not impose 
a penalty for the failure to have a UFLS program until such time as 
PRC-006-0 or a suitable substitute, and the attendant regional UFLS 
programs, are approved.
    140. However, we disagree with APPA that the fact that Requirement 
R1 references the regional UFLS program precludes us from approving 
PRC-007-0, PRC-008-0 and PRC-009-0, which provide for updating an 
entity's UFLS program (PRC-007-0), maintaining the entity's UFLS 
facilities (PRC-008-0), and reporting on events that involve the 
entity's UFLS (PRC-009-0). Rather, we uphold our earlier decision to 
approve these three Reliability Standards with the clarification that 
Requirement R1 of PRC-007-0 is not enforceable until the Commission 
approves PRC-006-0. We further clarify, consistent with our discussion 
above, that, until PRC-006-0 is approved, an entity that does not 
currently have a UFLS program is not required to develop one or to 
comply with PRC-007-0, PRC-008-0 and PRC-009-0. However, an applicable 
entity that currently has a UFLS program must continue to maintain that 
program as required by these three Reliability Standards. As discussed 
below, the Requirements of PRC-007-0, PRC-008-0 and PRC-009-0 are 
necessary for Bulk-Power System reliability and are not dependent on 
PRC-006-0.
    141. PRC-007-0, Requirement R2 states that the applicable entities 
``shall provide, and annually update, its underfrequency data as 
necessary for its Regional Reliability Organization to maintain and 
update a UFLS program database.'' \107\ It is vital to maintain this 
safety net that each registered transmission owner, transmission 
operator, distribution provider and load-serving entity with a UFLS 
system has a program to annually review the location of their UFLS 
devices and the magnitude of load that can be collectively activated as 
necessary.\108\ The reason for the annual review is that it is not 
unusual for loads to be switched among distribution feeders and, with 
load growth, additional distribution feeders may need to be included to 
meet the requirements of the entities' UFLS program. In addition, it is 
necessary to verify that sensitive and critical loads such as hospitals 
and high impact facilities continue to be excluded from the load 
shedding program. While it may be necessary to shed load to preserve 
the Bulk-Power System, it is also good public policy to limit the 
nature of the facilities that could be interrupted.
---------------------------------------------------------------------------

    \107\ While Requirement R2 identifies the regional reliability 
organization, we note that this information should go to the 
Regional Entity or the ERO as the entities with statutory authority 
under section 215 of the FPA.
    \108\ Blackout Report at 62.
---------------------------------------------------------------------------

    142. PRC-008-0, Requirement R1 states that the applicable entities 
``shall have a UFLS equipment maintenance and testing program in 
place.'' These programs are in place to assure that this last resort 
system, which has been proven to be necessary to limit the geographic 
scope of blackouts, operates as expected when required to in accordance 
with the reliability assessments.
    143. PRC-009-0, Requirement R1 identifies what analysis must be 
completed by the applicable entities after an underfrequency event. It 
states that ``[t]he analysis shall address the performance of UFLS 
equipment and program effectiveness following system events resulting 
in system frequency excursions below the initializing set points of the 
UFLS program.'' This requirement assures that actual data on the 
operation of the UFLS system can be correlated with simulations to 
provide a check on how well the UFLS system is performing its last 
resort function.
    144. Requirement R1 of PRC-007-0 requires the transmission owner 
and distribution provider to ``ensure that its UFLS program is 
consistent with its Regional Reliability Organization's UFLS program 
requirements.'' Because the regional UFLS program would be developed 
pursuant to PRC-006-0, and the Commission has not approved or remanded 
that Reliability Standard, we agree with APPA that Requirement R1 
cannot be enforced as written until the Commission approves PRC-006-0, 
because Requirement R1 would essentially require compliance with an 
unapproved Reliability Standard. Because Requirement R1 of PRC-007-0 is 
not enforceable until the Commission approves PRC-006-0, a transmission 
owner's or distribution provider's UFLS program cannot be judged for 
compliance with the unapproved regional UFLS program.
    145. While the Commission will not enforce compliance with PRC-006-
0, the possible reduction in the amount of load available for 
underfrequency load shedding can negatively impact the Reliable 
Operation of the Bulk-Power System. Because of the importance of the 
UFLS programs and the fact that there currently are no Commission-
approved Reliability Standards by which to judge individual UFLS 
programs, the Commission believes it is important to monitor the 
current UFLS programs so that we can consider if they provide an 
adequate safety net for the Bulk-Power System. Therefore, the 
Commission directs the ERO to collect the frequency and magnitude of 
load in UFLS systems from applicable entities for this summer, from 
date of order through September 30, 2007, and perform an analysis as to 
the ability of the existing system to provide the required last resort 
function within 90 days of this order. This analysis should consider if 
the existing UFLS plans together provide an adequate safety net for the 
Bulk-Power System.
    146. In discussing potential ambiguities in the proposed 
Reliability Standards in Order No. 693, the Commission stated that, 
even if some clarification of a particular Reliability Standard would 
be desirable at the outset, making it mandatory allows the ERO and the 
Regional Entities to provide that clarification on a going-forward 
basis while still requiring compliance with Reliability Standards that 
have an important reliability goal.\109\ We believe that this principle 
applies equally to a Reliability Standard where one Requirement may not 
be enforceable, but the Reliability Standard must be approved to enable 
enforcement of other Requirements.
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    \109\ Order No. 693 at P 277. See also Order No. 693 at P 147, 
157-58, explaining that the Commission was approving and requiring 
modification to five Reliability Standards that apply partially to a 
regional reliability organization.
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    147. The reliability goal of PRC-007-0, PRC-008-0 and PRC-009-0 is 
to provide last resort system preservation measures by implementing an 
UFLS program. The Commission believes that this is an important 
reliability goal. The Commission understands that, until

[[Page 40736]]

PRC-006-0 is approved, the UFLS program implemented will not be the one 
envisioned in PRC-006-0. We believe that, where a user, owner or 
operator does have a UFLS program, the data retention and reporting 
requirements incorporated in these Reliability Standards serve an 
extremely important goal of providing last resort system preservation 
measures. NERC can analyze the information to monitor whether the last 
resort system preservation measures are sufficient in the aggregate for 
the entire Bulk-Power System. Although the ERO and Regional Entities 
cannot penalize a user, owner or operator for an insufficient UFLS 
program until the Commission approves PRC-006-0, collection, analysis 
and submission of the UFLS information described above will provide 
NERC and the Commission with invaluable information regarding the 
reliability of the Bulk-Power System.
    148. We further believe that, other than R1 in Reliability Standard 
PRC-007-0, the Requirements in the PRC Reliability Standards are 
independently enforceable. For example, R2 of Reliability Standard PRC-
007-0 requires a transmission owner or distribution provider with a 
UFLS program to provide, and annually update, its underfrequency data. 
Although R2 contains the phrase ``(as required by its Regional 
Reliability Organization),'' the Commission believes that it is of 
vital importance for the transmission owner and distribution provider 
to update its UFLS data annually and provide it to the ERO. Because we 
have not approved any regional programs, this parenthetical currently 
has no meaning in the context of the approved Reliability Standard. 
Therefore, the Commission believes that these three Reliability 
Standards only apply to those entities that have a UFLS program, 
irrespective of whether a region requires it.
    149. The Commission also denies rehearing of our approval of PRC-
008-0. This Reliability Standard requires each transmission owner and 
distribution provider with a UFLS program to have a UFLS program in 
place that includes UFLS equipment identification and the schedule for 
UFLS equipment testing and maintenance. PRC-008-0 further requires each 
transmission owner and distribution provider with a UFLS program to 
implement its UFLS equipment maintenance and testing program and 
provide UFLS maintenance and testing program results to its regional 
reliability organization and NERC on request. In this Reliability 
Standard, any transmission owner or distribution provider that already 
has a UFLS program must develop its own equipment maintenance and 
testing program that complies with PRC-008-0. The Commission believes 
it is of great importance to Bulk-Power System reliability for such 
entities to perform such maintenance and testing. Because the 
maintenance and testing programs do not rely on regional reliability 
organization requirements, but are, rather, developed by the applicable 
entity itself, the Commission continues to believe that this 
Reliability Standard is enforceable regardless of whether the 
Commission has approved PRC-006-0.
    150. Finally, the Commission does not believe that the fact that 
PRC-006-0 has not been approved or remanded necessitates granting 
rehearing of our approval of PRC-009-0. This Reliability Standard 
requires a transmission owner, transmission operator, load-serving 
entity and distribution provider that owns or operates a UFLS program 
to analyze and document its UFLS program performance in accordance with 
its regional reliability organization's UFLS program. The Commission 
acknowledges, as stated above, that currently there is no Commission-
approved UFLS program. However, R1 of PRC-009-0 also includes 
independent criteria by which a user, owner or operator of the Bulk-
Power System must analyze its UFLS program. R1 states that:

    The analysis shall address the performance of UFLS equipment and 
program effectiveness following system events resulting in system 
frequency excursions below the initializing set points of the UFLS 
program. The analysis shall include, but not be limited to:
    R1.1. A description of the event including initiating 
conditions.
    R1.2. A review of the UFLS set points and tripping times.
    R1.3. A simulation of the event.
    R1.4. A summary of the findings.

    151. R2 of PRC-009-0 further requires the transmission owner, 
transmission operator, load-serving entity and distribution provider to 
provide documentation of the analysis of the UFLS program to its 
regional reliability organization and NERC on request after a system 
event. This analysis will better enable NERC to analyze system events 
and determine what actions need to be taken to ensure the Reliability 
of the Bulk-Power System.
    152. Therefore, the Commission denies rehearing of our approval of 
PRC-007-0, PRC-008-0 and PRC-009-0. To be clear, we recognize that R1 
of PRC-007-0 is not enforceable until the Commission approves PRC-006-
0. Because, prior to that approval of PRC-006-0, PRC-007-0, PRC-008-0 
and PRC-009-0 only apply to those entities that already have a UFLS 
program, these Reliability Standards do not require any entity that 
does not have a UFLS program to develop one, and the Commission will 
not impose a penalty for an entity's failure to have a UFLS program 
until the Commission approves PRC-006-0. Further, until PRC-006-0 has 
been approved, a UFLS program cannot be judged for compliance with an 
unapproved regional UFLS program. Therefore, the Commission clarifies 
that, until PRC-006-has been approved, only the data retention and 
reporting requirements, as well as the requirements for maintenance, 
testing requirements and analysis of UFLS performance following a 
triggering event in PRC-007-0, PRC-008-0 and PRC-009-0, are mandatory 
and enforceable.
9. TOP-008-1
    153. TOP-008-1 requires a transmission operator to take immediate 
steps to mitigate System Operating Limit (SOL) and Interconnection 
Reliability Operating Limit (IROL) violations. Order No. 693 approved 
Reliability Standard TOP-008-1.\110\ Order No. 693 summarized TOP-008-1 
as requiring a transmission owner to take immediate steps to mitigate 
SOL and IROL violations.\111\
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    \110\ Id. at P 1679.
    \111\ See id. at P 1675.
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ee. Requests for Rehearing
    154. TANC requests clarification that the Commission intended to 
use the term transmission operator, rather than transmission owner, as 
the correct applicable entity in Reliability Standard TOP-008-1.\112\ 
TANC states that the text of the ERO-proposed Reliability Standard 
lists the transmission operator as the only entity to which TOP-008-1 
applies. Alternatively, TANC requests rehearing.
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    \112\ See id.
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ff. Commission Determination
    155. The Commission will grant TANC's request for clarification. 
TANC is correct that the Commission's use of the term transmission 
owner, rather than transmission operator, was in error. The 
transmission operator is the correct applicable entity in Reliability 
Standard TOP-008-1.

III. Information Collection Statement

    156. Order No. 693 contains information collection requirements for 
which the Commission obtained approval from the Office of Management 
and Budget (OMB). Given that this

[[Page 40737]]

Order on Rehearing does not revise the regulation text of Order No. 693 
and makes only minor clarifications to Order No. 693, OMB approval for 
this order is not necessary. However, the Commission will send a copy 
of this order to OMB for informational purposes.

IV. Document Availability

    157. In addition to publishing the full text of this document in 
the Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 

Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    158. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number, excluding the last three digits of this document, in the docket 
number field.
    159. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from our Help line at (202) 502-8222 
or the Public Reference Room at (202) 502-8371 Press 0, TTY (202) 502-
8659. E-Mail the Public Reference Room at 
public.referenceroom@ferc.gov.

    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E7-14340 Filed 7-24-07; 8:45 am]

BILLING CODE 6717-01-P