Document ID: FERC-2013-1271-0001
Agency: ferc
Document Type: Proposed Rule
Title: Generator Verification Reliability Standards
Posted Date: 2013-09-24T04:00Z

[Federal Register Volume 78, Number 185 (Tuesday, September 24, 2013)]
[Proposed Rules]
[Pages 58492-58500]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23169]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM13-16-000]

Generator Verification Reliability Standards

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to section 215 of the Federal Power Act, the Federal 
Energy Regulatory Commission (Commission) proposes to approve the 
following Reliability Standards that were submitted to the Commission 
for approval by the North American Electric Reliability Corporation, 
the Commission-certified Electric Reliability Organization: MOD-025-2 
(Verification and Data Reporting of Generator Real and Reactive Power 
Capability and Synchronous Condenser Reactive Power Capability), MOD-
026-1 (Verification of Models and Data for Generator Excitation Control 
System or Plant Volt/Var Control Functions), MOD-027-1 (Verification of 
Models and Data for Turbine/Governor and Load Control or Active Power/
Frequency Control Functions), PRC-019-1 (Coordination of Generating 
Unit or Plant Capabilities, Voltage Regulating Controls, and 
Protection), and PRC-024-1 (Generator Frequency and Voltage Protective 
Relay Settings). The proposed generator verification Reliability 
Standards help ensure that verified data is available for power system 
planning and operational studies by requiring the verification of 
generator equipment needed to support Bulk-Power System reliability and 
enhance coordination of important protection system settings.
    The Commission proposes to approve, with modifications, the 
associated implementation plans, violation risk factors and violation 
severity levels. The Commission also proposes to approve the retirement 
of existing Reliability Standards MOD-024-1 (Verification of Generator 
Gross and Net Real Power Capability) and MOD-025-1 (Verification of 
Generator Gross and Net Reactive Power Capability) prior to the 
effective date of MOD-025-2.

DATES: Comments are due November 25, 2013.

ADDRESSES: You may submit comments, identified by docket number by any 
of the following methods:
     Agency Web site: http://ferc.gov. Documents created 
electronically using word processing software should be filed in native 
applications or print-to-PDF format and not in a scanned format.
     Mail/Hand Delivery: Commenters unable to file comments 
electronically must mail or hand deliver their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Mark Bennett (Legal Information), 
Office of General Counsel, Federal Energy Regulatory Commission, 888 
First Street NE., Washington, DC 20426, (202) 502-8524, 
mark.bennett@ferc.gov.

    Syed Ahmad (Technical Information), Office of Electric Reliability, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-8718, syed.ahmad@ferc.gov.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

(Issued September 19, 2013)

    1. Under section 215 of the Federal Power Act (FPA) \1\ the 
Commission proposes to approve five Reliability Standards that were 
submitted to the Commission for approval by the North American Electric 
Reliability Corporation (NERC), the Commission-certified Electric 
Reliability Organization (ERO): MOD-025-2 (Verification and Data 
Reporting of Generator Real and Reactive Power Capability and 
Synchronous Condenser Reactive Power Capability), MOD-026-1 
(Verification of Models and Data for Generator Excitation Control 
System or Plant Volt/Var Control Functions), MOD-027-1 (Verification of 
Models and Data for Turbine/Governor and Load Control or Active Power/
Frequency Control Functions), PRC-019-1 (Coordination of Generating 
Unit or Plant Capabilities, Voltage Regulating Controls, and 
Protection), and PRC-024-1 (Generator Frequency and Voltage Protective 
Relay Settings). The Commission proposes to approve, with 
modifications, the associated implementation plans, violation risk 
factors and violation severity levels. The Commission also proposes to 
approve the retirement of existing Reliability Standards MOD-024-1 and 
MOD-025-1 immediately prior to the effective date of MOD-025-2.
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    \1\ 16 U.S.C. 824o (2006).
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    2. The purpose of the proposed Reliability Standards is to ensure 
that generators remain in operation during specified voltage and 
frequency excursions; properly coordinate protective relays and 
generator voltage regulator controls; and ensure that

[[Page 58493]]

generator models accurately reflect the generator's capabilities and 
equipment performance. Proposed Reliability Standards MOD-026-1, MOD-
027-1, PRC-019-1 and PRC-024-1 are new whereas proposed Reliability 
Standard MOD-025-2 consolidates two existing standards, MOD-024-1 
(Verification of Generator Gross and Net Real Power Capability) and 
MOD-025-1 (Verification of Generator Gross and Net Reactive Power 
Capability) into one new Reliability Standard. Portions of proposed 
Reliability Standards MOD-025-2 and PRC-024-1 respond to Commission 
directives issued in Order No. 693.\2\
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    \2\ See Mandatory Reliability Standards for the Bulk-Power 
System, Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, 
Order No. 693-A, 120 FERC ] 61,053 (2007).
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    3. Collectively, the proposed Reliability Standards improve the 
accuracy of model verifications needed to support reliability and 
enhance the coordination of generator protection systems and voltage 
regulating system controls. Such improvements should help reduce the 
risk of generator trips and provide more accurate models for 
transmission planners and planning coordinators to develop system 
models and simulations.
    4. In contrast to the greater than 20 MVA applicability threshold 
for the three other proposed Reliability Standards in NERC's petition, 
proposed standards MOD-026-1 and MOD-027-1 would exclude units rated 
below 100 MVA (Eastern and Quebec Interconnections), 75 MVA (Western 
Interconnection) and 50 MVA (ERCOT Interconnection). This difference in 
applicability thresholds could exclude approximately 20 percent of 
registered generator owners/operators from compliance. The Commission 
seeks comment on whether the higher applicability thresholds limit the 
overall effectiveness of the proposed Reliability Standards, especially 
in areas with a high concentration of generators falling below the 
thresholds.
    5. Further, proposed Reliability Standard MOD-026-1 contains a 
provision allowing transmission planners to compel certain generator 
owners to comply with the proposed standard's Requirements if the 
generator owners are deemed to have ``technically justified'' units, 
even if the generators fall below the stated applicability threshold. 
The Commission seeks comment on this proposed process, and also seeks 
comment regarding whether this provision should be included in proposed 
Reliability Standard MOD-027-1.

I. Background

Section 215 of the FPA and Order No. 693 Directives

    6. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval. Specifically, the Commission may 
approve, by rule or order, a proposed Reliability Standard or 
modification to a Reliability Standard if it determines that the 
Reliability Standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest.\3\ Once approved, the 
Reliability Standards may be enforced by the ERO, subject to Commission 
oversight, or by the Commission independently.\4\
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    \3\ 16 U.S.C. 824o(d)(2).
    \4\ Id. 824o(e)(3).
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    7. Pursuant to section 215 of the FPA, the Commission established a 
process to select and certify an ERO,\5\ and subsequently certified 
NERC.\6\ On March 16, 2007, the Commission issued Order No. 693, 
approving 83 of the 107 Reliability Standards filed by NERC. Because 
MOD-024-1 and MOD-025-1, which NERC had included in its filing, 
involved regional procedures that had not been submitted, the 
Commission postponed either approving or remanding these standards 
until NERC submitted additional information. However, the Commission 
issued directives in Order No. 693 with respect to MOD-024-1 and MOD-
025-1 that NERC states are addressed in proposed Reliability Standard 
MOD-025-2.
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    \5\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval, and 
Enforcement of Electric Reliability Standards, Order No. 672, FERC 
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC 
Stats. & Regs. ] 31,212 (2006).
    \6\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
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    8. Reliability Standards MOD-024-1 and MOD-025-1 were ``fill-in-
the-blank'' Reliability Standards that required regional reliability 
organizations to develop procedures to verify generator real and 
reactive power capability, respectively. Regarding MOD-024-1, the 
Commission directed NERC to clearly define the test conditions and 
methodologies contained in the Reliability Standard, and also to 
clarify the time period within which regional reliability organizations 
must provide generator real power capability verification.\7\ For MOD-
025-1, the Commission directed NERC to clarify that MVAR capability 
verifications should be made at multiple points over a generator unit's 
operating range, and also directed NERC to clarify the time period 
within which reactive power capability verifications are to be 
provided.\8\
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    \7\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 1310-1311.
    \8\ Id. PP 1321-1323.
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    9. Two directives contained in Order No. 693 pertain to proposed 
Reliability Standard PRC-024-1. When discussing NERC's proposed TPL 
Reliability Standards, the Commission stated that NERC should use the 
Nuclear Regulatory Commission's (NRC) voltage ride through requirements 
when implementing Reliability Standards to ``assure that there is 
consistency between the Reliability Standards and the NRC requirement 
that the system is accurately modeled.'' \9\ The Commission further 
directed NERC to explicitly require generators to be ``capable of 
riding through the same set of Category B and C contingencies, as 
required by wind generators in Order No. 661, or that those generators 
that cannot ride through be simulated as tripping.'' \10\
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    \9\ Id. P 1787.
    \10\ Id.
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II. NERC Petition and Proposed Reliability Standards

A. NERC Petition

    10. On May 30, 2013, NERC filed a petition seeking approval of 
proposed Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, PRC-
019-1 and PRC-024-1. Four of the five Reliability Standards are new, 
while existing Reliability Standards MOD-024-1 and MOD-025-1 were 
merged into proposed Reliability Standard MOD-025-2. NERC also seeks 
approval of the associated implementation plans, violation risk factors 
and violation severity levels, and retirement of current Reliability 
Standards MOD-024-1 and MOD-025-1 at midnight of the day immediately 
prior to the effective date of MOD-025-2. NERC proposes to phase in 
effective dates in stages over periods ranging from five years (for 
MOD-025-2, PRC-019-1 and PRC-024-1) to ten years (for MOD-026-1 and 
MOD-027-1).\11\ NERC states that ``these five proposed Reliability 
Standards address generator verifications needed to support Bulk-Power 
System reliability and will ensure that accurate data is verified and 
made available for planning simulations.'' \12\
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    \11\ NERC Petition, Exhibit B.
    \12\ NERC Petition at 2.
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    11. NERC explains that Bulk-Power System reliability benefits from 
``good quality simulation models of power system equipment,'' and that 
``model validation ensures the proper

[[Page 58494]]

performance of the control systems and validates the computer models 
used for stability analysis.'' \13\ NERC further states that the 
proposed Reliability Standards will enhance reliability because the 
tests performed to obtain model data may reveal latent defects that 
could cause ``inappropriate unit response during system disturbances.'' 
\14\ NERC also states that simulating the response of synchronous 
machines and related control systems in sufficient detail is essential 
for effective power system planning and operational studies.\15\ For 
accurate simulations reflecting actual equipment performance covering a 
range of disturbances, NERC states that models must not only contain 
adequate information, they must also correspond to actual field 
values.\16\
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    \13\ Id.
    \14\ Id. at 2-3.
    \15\ Id. at 3.
    \16\ Id.
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B. Proposed Reliability Standards

1. Reliability Standard MOD-025-2
    12. Proposed Reliability Standard MOD-025-2 merges two existing 
Reliability Standards, MOD-024-1 and MOD-25-1, and has the stated 
purpose of ensuring the accuracy of generator information related to 
gross and net real and reactive power capability and synchronous 
condenser reactive power capability that is available for planning 
models and bulk electric system reliability assessments.\17\ The 
proposed Reliability Standard applies to generator owners and 
transmission owners that own synchronous condensers, and has three 
requirements and two Attachments. Attachment 1, incorporated into 
Requirements R1.1, R2.1 and R3.1, specifies the periodicity for 
performing real and reactive power capability verification and the 
verification specifications for applicable facilities. Attachment 2, 
which generator owners and transmission owners will use to report to 
their transmission planners the information described in Attachment 1, 
is incorporated into Requirements R1.2, R2.2 and R3.2.
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    \17\ Reliability Standard MOD-025-2, Section A.3 (Purpose).
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    13. NERC states that proposed Reliability Standard MOD-025-2 
addresses the directives the Commission issued in Order No. 693. 
Specifically, NERC states:
    (1) Requirement R1, Part 1.2 specifies that a generator owner must 
submit Attachment 2 or another form containing the same information to 
its transmission planner within 90 calendar days of either the date the 
data is recorded for a staged test or the date the data is selected for 
verification using historical operational data; (2) Requirement R1, 
Part 1.1 requires a generator owner to verify the real power capability 
of its generating units as set forth in Attachment 1, including the 
consideration of ambient conditions during the verification period; and 
(3) Attachment 1, Sections 2.1 through 2.4, requires reactive power 
capability verification at multiple points across a unit's operating 
range.\18\
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    \18\ NERC Petition at 10-12.
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2. Reliability Standard MOD-026-1
    14. Proposed Reliability Standard MOD-026-1, which is applicable to 
generator owners and transmission planners, is a new Reliability 
Standard that has six requirements and an Attachment describing the 
periodicity for excitation control system or plan volt/var function 
model verification. NERC explains that the purpose of proposed 
Reliability Standard MOD-026-1 is to ensure that detailed modeling of 
generator excitation systems, essential for valid simulations in power 
system stability studies, will be conducted, and that those models 
accurately represent generator excitation control system or plant volt/
var control function behavior for bulk electric system reliability 
assessments.\19\ Requirement R1 requires transmission planners to 
provide generator owners with specified information within 90 days of a 
written request, including instructions on how to obtain models, block 
diagrams and/or data sheets and model data for any of the generator 
owner's existing applicable unit specific excitation control system or 
plant volt/var control function contained in the transmission planner's 
dynamic database from the current (in-use) models. NERC explains that 
Requirement R1 ensures that the transmission planner provides necessary 
information to the generator owners so that they can provide a useable 
model in an acceptable format. This further ensures that generator 
owners can comply with Requirement R2 by providing relevant information 
to transmission planners.\20\
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    \19\ Id. at 14-16.
    \20\ Id. at 15.
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    15. Requirement R2 requires each generator owner to provide its 
transmission planner with a verified generator excitation control 
system or plant volt/var control function model that includes the data 
and documentation specified in Requirement R2, Part 2.1. The 
periodicity for this requirement is set forth in Attachment 1. The 
purpose of Requirement R2 is to verify that the generator excitation 
control system or plant volt/var control function model and the model 
parameters used in dynamic simulations performed by the transmission 
planner accurately represent the generator excitation control system or 
plant volt/var control function behavior when assessing bulk electric 
system reliability.\21\ Requirement R3 requires generator owners to 
provide written responses to transmission planner requests within 90 
days regarding unusable models, technical concerns and transmission 
planner determinations that simulated excitation control system or 
plant volt/var control function model responses do not match a recorded 
response to a transmission system event. NERC explains that Requirement 
R3 of proposed Reliability Standard MOD-026-1 ``provides response 
requirements for a Generator Owner when it receives certain requests 
from the Transmission Planner. This communication ensures that 
Generator Owners have an obligation to respond in a timely fashion when 
there are demonstrated problems with a model that was provided by the 
Generator Owner in accordance with Requirement R2.'' \22\ Under 
Requirement R4, generator owners are required to determine whether 
changes to applicable units affect models provided pursuant to 
Requirement R2, and to provide the transmission planner with revised 
model data or plans to perform model verification.
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    \21\ Id. at 16.
    \22\ Id. at 17.
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    16. Requirement R5 requires a generator owner to respond within 90 
days to a ``technically justified unit request'' from its transmission 
planner to perform a model review of a unit or plant, including details 
for model verification or corrected model data. A footnote to 
Requirement R5 states that ``Technical justification is achieved by the 
Transmission Planner demonstrating that the simulated unit or plant 
response does not match the measured unit or plant response.'' Also, 
Applicability section 4.2.4 in MOD-026-1 states that facilities to 
which the standard applies include ``For all Interconnections: A 
technically justified unit that meets NERC registry criteria but is not 
otherwise included in the above Applicability sections 4.2.1, 4.2.2, or 
4.2.3 and is requested by the Transmission Planner.''
    17. NERC explains that Requirement R5 allows transmission planners 
to request that generator owners who otherwise are not covered by the

[[Page 58495]]

Applicability section (i.e., whose MVA ratings are lower than the 
applicability thresholds specified in Section 4 of proposed Reliability 
Standard MOD-026-1 but meet or exceed the Registry Criteria) to provide 
model verifications or to correct model data.\23\ Requirement R6 
requires transmission planners to provide written responses to 
generator owners within 90 days of receiving a verified excitation 
control system or plant volt/var control function model information 
whether the model is usable or not in accordance with Requirement R2. 
If it determines the model to be unusable, the transmission planner 
must explain the technical basis for that decision.
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    \23\ Id. at 18.
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3. Reliability Standard MOD-027-1
    18. The stated purpose of proposed Reliability Standard MOD-027-1, 
which is new and contains five Requirements and an Attachment, is to 
verify that the turbine/governor and load control or active power/
frequency control model and the model parameters, used in dynamic 
simulations that assess bulk electric system reliability, accurately 
represent generator unit real power response to system frequency 
variations.\24\ Requirement R1 requires transmission planners to 
provide generator owners with guidance that will enable generator 
owners to provide the information required in Requirements R2 and R4 
within 90 days of a written request. Requirement R2 requires generator 
owners to provide transmission planners with a verified turbine/
governor and load control or active power/frequency control model for 
each applicable unit, including documentation and data in accordance 
with the periodicity specified in MOD-027-1 Attachment 1. Attachment 1 
(Turbine/Governor and Load Control or Active Power/Frequency Control 
Model Periodicity) also contains a table listing verification 
conditions and related actions required of generator owners.\25\
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    \24\ Reliability Standard MOD-27-1, Section A.3 (Purpose).
    \25\ NERC Petition at 20.
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    19. Requirement R3 establishes communication requirements to ensure 
that generator owners respond to transmission planner determinations 
that a generator owner's model is not ``usable,'' or where there is a 
difference between the model and three or more actual transmission 
system events.\26\ Requirement R4 requires generator owners to provide 
transmission planners with updates when changes occur to the turbine/
governor and load control or active power/frequency control system that 
alter equipment response characteristics.\27\ Requirement R5 requires 
transmission planners to inform generator owners within 90 days of 
receiving model information (in accordance with Requirement R2) whether 
the model is usable or not. If a model is unusable, the transmission 
planner shall provide the generator owner with an explanation of the 
technical basis for that decision. Also, Requirement R3 requires 
generator owners to provide a written response within 90 days.\28\
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    \26\ Id. at 21.
    \27\ Id. at 22.
    \28\ Id.
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4. Proposed Reliability Standard PRC-019-1
    20. Proposed Reliability Standard PRC-019-1 is new and contains two 
requirements intended to ensure that both generator owners and 
transmission owners verify coordination of generating unit facility or 
synchronous condenser voltage regulating controls, limit functions, 
equipment capabilities and protection system settings.\29\ Requirement 
R1 requires generator owners and transmission owners to coordinate the 
voltage regulating system controls with the equipment capabilities and 
settings of the applicable protection system devices and functions.\30\ 
Requirement R2 requires generator owners and transmission owners to 
perform the coordination described in Requirement R1 to address 
equipment or setting changes.\31\ The coordination required in proposed 
Reliability Standard PRC-019-1 must be performed at least every five 
years.
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    \29\ Reliability Standard PRC-019-1, Section A.3 (Purpose).
    \30\ NERC Petition at 23.
    \31\ Id. at 24.
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5. Proposed Reliability Standard PRC-024-1
    21. Proposed Reliability Standard PRC-024-1 is new and consists of 
four Requirements and two Attachments. The stated purpose of PRC-024-1 
is to ensure that generator owners set their generator protective 
relays such that generating units remain connected during defined 
frequency and voltage excursions.\32\ Requirement R1 requires generator 
owners having generator frequency protective relaying activated to trip 
their generating units to set their protective relaying to prevent 
their generating units from tripping within the ``no trip zone'' of 
PRC-024-1 Attachment 1 (unless one of three specified exceptions 
applies). NERC explains that Attachment 1 contains tables with curve 
data points for each Interconnection indicating the amount of time a 
generator needs to remain connected at specific defined frequency 
excursions.\33\ Requirement R2 addresses voltage excursions, requiring, 
subject to four exceptions, generator owners to ensure that their 
voltage protective relaying settings prevent their generating units 
from tripping within the ``no trip zone'' described in PRC-024-1, 
Attachment 2.
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    \32\ Reliability Standard PRC-024-1, Section A.3 (Purpose).
    \33\ NERC Petition at 25.
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    22. NERC states that the standard drafting team believes the 
voltage profile contained in Attachment 2 includes excursions that 
would be expected under Category B and C contingencies. Therefore, NERC 
asserts that by ensuring that generator units remain connected to the 
grid during voltage excursions, Requirement R2 and Attachment 2 satisfy 
the Commission directive issued in Order No. 693 to ``explicitly 
require either that all generators are capable of riding through the 
same set of Category B and C contingencies, as required by wind 
generators in Order No. 661, or that those generators that cannot ride 
through be simulated as tripping.'' \34\
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    \34\ Id. at 29 (citing Order No. 693, FERC Stats. & Regs. ] 
31,242 at P 1787).
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    23. Requirement R3 of proposed Reliability Standard PRC-024-1 
requires generator owners to document regulatory or equipment 
limitations that would prevent them from satisfying the relay setting 
criteria in Requirements R1 and R2. Generator owners must inform their 
planning coordinator and transmission planner of such limitations 
within 30 calendar days. According to NERC, the standard drafting team 
believes that ``regulatory limitations'' include NRC requirements and, 
therefore, Requirement R3 satisfies the Commission's guidance that 
``NRC requirements should be used when implementing the Reliability 
Standards.'' \35\
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    \35\ Id. at 27-28 (citing Order No. 693, FERC Stats. & Regs. ] 
31,242 at P 1787).
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    24. Requirement R4 requires generator owners to provide their 
planning coordinator or transmission planner with generator protection 
trip settings associated with Requirements R1 and R2 within 60 days of 
either a written request or a change to previously requested trip 
settings.\36\
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    \36\ Id. at 31.
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III. Discussion

    25. Pursuant to section 215(d) of the FPA, the Commission proposes 
to approve proposed Reliability Standards

[[Page 58496]]

MOD-025-2, MOD-026-1, MOD-027-1, PRC-019-1 and PRC-024-1, including the 
associated implementation plan and proposed violation risk factors and 
violations severity levels, as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
proposed Reliability Standards help ensure that verified data is 
available for power system planning and operational studies by 
requiring the verification of generator equipment needed to support 
Bulk-Power System reliability and enhance coordination of important 
protection system settings. Also, proposed Reliability Standards MOD-
025-2 and PRC-024-1 satisfy relevant outstanding directives set forth 
in Order No. 693. We also propose to approve the retirement of the 
currently-effective standards MOD-024-1 and MOD-025-1 prior to the 
effective date of MOD-025-2.
    26. While we propose to approve the proposed Reliability Standards, 
we seek comment on certain aspects of proposed Reliability Standards 
MOD-026-1 and MOD-027-1. Specifically, we discuss the following issues 
below: (A) The higher Megavolt Amperes (MVA) applicability threshold 
for proposed Reliability Standards MOD-026-1 and MOD-027-1; (B) the 
process for determining when it is ``technically justified'' for a 
transmission planner to require a generator owner to provide model 
reviews under MOD-026-1; (C) why the ``technically justified'' 
provision is not also included in MOD-027-1; and (D) assignment of 
violation of severity levels.

A. Higher MVA Applicability Threshold in MOD-026-1 and MOD-027-1

    27. The applicability thresholds in proposed Reliability Standards 
MOD-026-1 and MOD-027-1 are higher than for the other three proposed 
Reliability Standards, and could exclude approximately 20 percent of 
generators from compliance.\37\ In contrast to the greater than 20 MVA 
applicability thresholds set forth in the other three proposed 
Reliability Standards in NERC's petition,\38\ MOD-026-1 and MOD-027-1 
would exclude units rated below 100 MVA (Eastern and Quebec 
Interconnection), 75 MVA (Western Interconnection) and 50 MVA (ERCOT 
Interconnection).\39\
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    \37\ See NERC Petition, Exhibit E (Summary of the Reliability 
Standard Development Proceeding and Complete Record of Development 
of Proposed Reliability Standard) section entitled ``Consideration 
of Comments on Draft Standard'' at 91 indicating that the threshold 
in the proposed standard would limit applicability of the standard 
to 80 percent of installed MVA on an Interconnection basis.
    \38\ Reliability Standard MOD-025-2, Section 4.2 (Facilities); 
Reliability Standard PRC-019-1, Section 4.2 (Facilities); and 
Reliability Standard PRC-024-1, Section 4 (Applicability).
    \39\ Reliability Standard MOD-026-1, Section 4.2 (Facilities); 
Reliability Standard MOD-027-1, Section 4.2 (Facilities).
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    28. During the standard development process, several industry 
stakeholders commented that the standard drafting team should ensure 
that the applicability thresholds of MOD-026-1 and MOD-027-1 be aligned 
with the other three proposed Reliability Standards. In response, the 
standard drafting team stated that ``verification of excitation system 
is expensive both from a monetary and human resource viewpoint. 
Therefore, the [standard drafting team] believes that these 
applicability thresholds will result in substantial accuracy 
improvements to the excitation models and associated Reliability 
Standards, while not unduly mandating costly and time-consuming 
verification efforts.'' \40\ We seek comment as to whether excluding 
approximately 20 percent of generators from the applicability of MOD-
026-1 and MOD-027-1, especially in areas with a high concentration of 
generators falling below the thresholds, would (a) limit the 
effectiveness of proposed Reliability Standards MOD-026-1 and MOD-027-1 
or (b) adversely impact transmission planners' ability to reduce risk 
to Bulk Power System reliability.
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    \40\ NERC Petition, Exhibit E (Summary of the Reliability 
Standard Development Proceeding and Complete Record of Development 
of Proposed Reliability Standard) section entitled ``Consideration 
of Comments on Draft Standard'' at 91.
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B. Process for Identifying ``Technically Justified'' Generating Units 
in MOD-026-1

    29. Proposed Reliability Standard MOD-026-1 applies to generating 
units that are connected to the bulk electric system when ``technically 
justified.'' Specifically, Applicability Section 4.2.4 allows a 
transmission planner to compel a generator owner to provide model 
reviews and related information in accordance with Requirement R5 if 
the transmission planner's unit simulations do not match the generator 
owner's measured unit data. Under such circumstances, generator owners 
with ``technically justified'' units must comply with proposed 
Reliability Standard MOD-026-1, even though the unit MVA rating is 
below the stated MVA threshold for applicability.
    30. While we agree with the intent of this section, the means by 
which transmission planners would become aware of discrepancies between 
simulated units and measured units, which forms the basis for 
``technically justified'' determinations, is unclear. The technical 
justification, or discrepancies between simulated units and measured 
units, suggests that there should be some benchmark available in the 
process by which transmission planners identify generator owners for 
compliance with MOD-026-1. The Final Report on the August 2003 blackout 
stated that ``the regional councils are to establish and begin 
implementing criteria and procedures for validating data used in power 
flow models and dynamic simulations by benchmarking model data with 
actual system performance.'' \41\ The Commission seeks comment from 
NERC and other interested parties as to whether the means or process 
for transmission planners to determine whether a generator owner's unit 
is ``technically justified'' is sufficiently clear and workable. We 
further seek comment as to whether additional details regarding how the 
process will be implemented should be included in an attachment to the 
proposed Reliability Standard.
---------------------------------------------------------------------------

    \41\ U.S.-Canada Power System Outage Task Force (Task Force), 
Final Report on the August 14, 2003 Blackout in the United States 
and Canada: Causes and Recommendations (April 2004) (Final Blackout 
Report), Recommendation 24. The Final Blackout Report is available 
on the Internet at http://www.ferc.gov/industries/electric/indus-act/blackout.asp.
---------------------------------------------------------------------------

C. Should Proposed Reliability Standard MOD-027-1 Include the 
``Technically Justified'' Provision

    31. Proposed Reliability Standard MOD-027-1 does not contain a 
provision analogous to section 4.2.4 of MOD-026-1, whereby a 
transmission planner may determine whether to subject a generator owner 
with units falling below the stated applicability threshold to the 
Requirements in proposed Reliability Standard MOD-026-1. We seek 
comment as to whether the technical justification provision should also 
be included in proposed Reliability Standard MOD-027-1 to provide an 
opportunity for transmission planners to address discrepancies between 
unit simulations and generator owners' measured unit data.

D. Violation Severity Levels

1. VSL for MOD-026-1, Requirement R6 and MOD-027-1, Requirement R5
    32. For Requirement R6 of MOD-026-1 and Requirement R5 of MOD-027-
1, NERC proposes a ``severe'' violation severity level when a 
transmission planner's written response that a Generation Owner's 
verified model is useable ``omitted confirmation for all

[[Page 58497]]

specified model criteria'' in the requirement. NERC does not propose 
any violation severity level for a violation of the last sentence of 
these requirements: ``If the model is not useable, the [transmission 
planner] shall provide a technical description of why the model is not 
useable.'' Compliance with this sentence is equally important as 
compliance with the other obligations of these Requirements. Lack of a 
violation severity level for this type of violation is inconsistent 
with our VSL Guideline 3 because the proposed violation severity levels 
do not address all obligations in these Requirements. We propose to 
direct that NERC submit a violation severity level that addresses a 
violation of the last sentence of Requirement R6 of MOD-026-1 and 
Requirement R5 of MOD-027-1.
2. VSL for PRC-024-1, Requirements R1 and R2
    33. NERC proposes to assign a ``severe'' violation severity level 
for a violation of Requirements R1 and R2 of PRC-024-1 when a generator 
owner fails to set its generator frequency or voltage protective relays 
so that they do not trip within the criteria listed within Requirements 
R1 and R2 unless there is a documented and communicated regulatory or 
equipment limitation per Requirement R3. We observe that Requirements 
R1 and R2 of PRC-024-1 include three and four bulleted exceptions, 
respectively, to the requirement that the generator frequency or 
voltage protective relays not trip applicable generating unit(s) within 
the ``no-trip zone'' of Attachment 1 or 2 to that standard. For 
Requirements R1 and R2, only the third and fourth exception, 
respectively, relate to a regulatory or equipment limitation in 
accordance with Requirement R3. As a result, the wording of the 
violation severity level for Requirements R1 and R2 could be read to 
mean that a generator owner that set generator frequency or voltage 
protective relaying to trip within the ``no-trip zone'' based on either 
the first or second exception in Requirement R1 and either the first, 
second or third exception in R2, violated that Requirement with a 
severe violation severity level. To avoid that interpretation, NERC 
should confirm in its comments that a generator owner will not violate 
Requirement R1 or R2 if it sets generator frequency or voltage 
protective relaying to trip within the ``no-trip zone'' based upon the 
exceptions for Requirements R1 and R2.

IV. Information Collection Statement

    34. The following collection of information contained in the 
Proposed Rule is subject to review by the Office of Management and 
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995 (PRA).\42\ OMB's regulations require that OMB approve certain 
reporting and recordkeeping requirements (collections of information) 
imposed by an agency.\43\ Upon approval of a collection of information, 
OMB will assign an OMB control number and expiration date. Respondents 
subject to the filing or recordkeeping requirements of this rule will 
not be penalized for failing to respond to these collections of 
information unless the collections of information display a valid OMB 
control number.
---------------------------------------------------------------------------

    \42\ 44 U.S.C. 3507(d) (2006).
    \43\ 5 CFR 1320.11 (2013).
---------------------------------------------------------------------------

    35. The Commission will submit these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the PRA. Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimate, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing the respondents' burden, including the 
use of automated information techniques.
    36. This Notice of Proposed Rulemaking proposes to approve five 
proposed Reliability Standards: MOD-025-2, MOD-026-1, MOD-027-1, PRC-
019-1 and PRC-024-1. Proposed Reliability Standard MOD-025-2 would 
replace currently effective Reliability Standards MOD-024-1 and MOD-
025-1. In Order No. 693, the Commission did not approve or remand MOD-
024-1 and MOD-025-1, as they were identified as ``fill-in-the-blank'' 
Reliability Standards for which NERC had not submitted regional 
procedures.
    37. Public Reporting Burden: The burden and cost estimates below 
are based on the increase in the reporting and recordkeeping burden 
imposed by the proposed Reliability Standards. Our estimate of the 
number of respondents affected is based on the NERC Compliance Registry 
as of July 30, 2013.\44\ According to the Compliance Registry, NERC has 
registered 901 generator owners within the United States. Currently, 
synchronous condensers are not included in the NERC Compliance 
Registry, and the standard drafting team stated that the number of 
transmission owners who own synchronous condensers is extremely low. We 
seek NERC and industry comment regarding the number of synchronous 
condensers currently in use (including confidential data, if 
necessary).
---------------------------------------------------------------------------

    \44\ NERC Compliance Registry (July 30, 2013), available at 
http://www.nerc.com/pa/comp/Registration%20and%20Certification%20DL/NERC_Compliance_Registry_Matrix_Summary20130730.pdf.
    \45\ GO = Generator Owner, TP = Transmission Planner.
    Assuming 10 generators per generator owner, using EIA-860 2012 
generator data (http://www.eia.gov/electricity/data/eia860/) total 
number of units > 20 MW are 7,379, which results in 738 generator 
owners.
    \46\ The estimates for cost per hour are derived as follows:
    $52/hour, the average of the salary plus benefits for an 
engineer, from Bureau of Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm.
    $70/hour, the average of the salary plus benefits for a manager 
and an engineer, from Bureau of Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm.
    $28/hour, based on a Commission staff study of record retention 
burden cost.
---------------------------------------------------------------------------

    38. The burden estimates reflect the standards and the number of 
affected entities (e.g., the generator owner's one-time burden to 
develop testing procedures, verification process, and process for 
collection of data). Estimates for the additional burden imposed by the 
NOPR, if approved as a final rule in RM13-16, follow.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Number of       Number of        Average
                         FERC-725G                            respondents    responses per   burden hours    Total annual      Total annual cost \46\
                                                                 \45\         respondent     per response    burden hours
                                                                       (1)             (2)             (3)     (1)x(2)x(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     PRC-019-1 (Coordination of Generating Unit or Plant Capabilities, Voltage Regulating Controls, and Protection)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop coordination and relay settings procedures........             738               1               8           5,904  $307,008 one-time ($52/hr).
                                                                        GO

[[Page 58498]]

 
Relay Settings............................................             738               1               8           5,904           413,280 (70/hr).
                                                                        GO
Evidence Retention \46\...................................             738               1               1             738            20,664 (28/hr).
                                                                        GO
                                                                                           -------------------------------------------------------------
    TOTAL.................................................  ..............  ..............  ..............          12,546            740,952
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          PRC-024-1 (Generator Frequency and Voltage Protective Relay Settings)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop coordination and relay settings procedures........             738               1               8           5,904  307,008 one-time (52/hr).
                                                                        GO
Relay Settings............................................             738               1               8           5,904           413,280 (70/hr).
                                                                        GO
Evidence Retention \46\...................................             738               1               1             738            20,664 (28/hr).
                                                                        GO
                                                                                           -------------------------------------------------------------
    TOTAL.................................................  ..............  ..............  ..............          12,546            740,952
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Number of       Number of        Average
                       FERC-725L                          respondents    responses per   burden hours    Total annual        Total annual cost \46\
                                                             \45\         respondent     per response    burden hours
                                                                   (1)             (2)             (3)     (1)x(2)x(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
     MOD-025-2 (Verification and Data Reporting of Generator Real and Reactive Power Capability and Synchronous Condenser Reactive Power Capability)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop testing procedures, verification process, and              738               1               8     5,904 (one-  $307,008 one-time ($52/hr).
 process for collection of data.......................              GO                                           time)
Attachment 2..........................................             738               1               6           4,428     309,960 (70/hr).
                                                                    GO
Evidence Retention \46\...............................             738               1               1             738      20,664 (28/hr).
                                                                    GO
                                                                                       -----------------------------------------------------------------
    TOTAL.............................................  ..............  ..............  ..............          11,070      637,632
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop testing procedures, verification process, and              356               1               8     2,848 (one-  148,096 one-time (52/hr).
 process for collection of data.......................              GO                                           time)
Instructions for obtaining excitation control system               187               1               8           1,496     104,720 (70/hr).
 or plant voltage/variance control function model.....              TP
Documentation on generator verification...............             356               1               8           2,848     199,360 (70/hr).
                                                                    GO
Evidence Retention \46\...............................             543               1               1             543      15,204 (28/hr).
                                                             GO and TP
                                                                                       -----------------------------------------------------------------
TOTAL.................................................  ..............  ..............  ..............           7,735      467,380
--------------------------------------------------------------------------------------------------------------------------------------------------------
              MOD-027-1 (Verification of Models and Data for Turbine/Governor and Load Control or Active Power/Frequency Control Functions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop testing procedures, verification process, and              356               1               8     2,848 (one-  $148,096 one-time (52/hr).
 process for collection of data.......................              GO                                           time)
Instructions for obtaining turbine/governor and load               187               1               8           1,496     104,720 (70/hr).
 control or active power/frequency control model......              TP
Documentation on generator verification...............             356               1               8           2,848     199,360 (70/hr).
                                                                    GO
Evidence Retention \46\...............................             543               1               1             543      15,204 (28/hr).
                                                             GO and TP
                                                                                       -----------------------------------------------------------------

[[Page 58499]]

 
    TOTAL.............................................  ..............  ..............  ..............           7,735      467,380
--------------------------------------------------------------------------------------------------------------------------------------------------------
        TOTAL for RM13-16.............................  ..............  ..............  ..............  ..............  $3,054,296 (1,837,080 without
                                                                                                                        one-time costs).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Title: Mandatory Reliability Standards for the Bulk-Power System
    Action: Proposed revisions to FERC-725A.
    OMB Control No: 1902-0244
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time, every five years, and every ten 
years.
    Necessity of the Information: The proposed approval of the five 
Reliability Standards noted above implements the Congressional mandate 
of the Energy Policy Act of 2005 to develop mandatory and enforceable 
Reliability Standards to better ensure the reliability of the nation's 
Bulk-Power System.
    Internal Review: The Commission has reviewed the proposed approval 
to the Reliability Standards and made a determination that its action 
is necessary to implement section 215 of the FPA. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimate associated with the 
information requirements.
    39. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director, email: 
DataClearance@ferc.gov, phone: (202) 502-8663, fax: (202) 273-0873].
    40. For submitting comments concerning the collection of 
information and the associated burden estimates, please send your 
comments to the Commission, and to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission, 
phone: (202) 395-4638, fax: (202) 395-7285]. For security reasons, 
comments to OMB should be submitted by email to: oira_submission@omb.eop.gov. Comments submitted to OMB should include Docket 
Number RM13-16-000 and OMB Control Number 1902-0252 and 1902-0261.

V. Regulatory Flexibility Act Certification

    41. The Regulatory Flexibility Act of 1980 (RFA) \47\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's (SBA's) Office of Size 
Standards develops the numerical definition of a small business.\48\ 
The SBA has established a size standard for electric utilities, stating 
that a firm is small if, including its affiliates, it is primarily 
engaged in the transmission, generation and/or distribution of electric 
energy for sale and its total electric output for the preceding twelve 
months did not exceed four million megawatt hours.\49\
---------------------------------------------------------------------------

    \47\ 5 U.S.C. 601-612 (2006).
    \48\ 13 CFR 121.101 (2013).
    \49\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    42. Proposed Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, 
PRC-019-1 and PRC-024-1, MOD-025-2 help ensure that generators remain 
in operation during specified voltage and frequency excursions, 
properly coordinate protective relays and generator voltage regulator 
controls, and ensure that generator models accurately reflect the 
generator's capabilities and equipment performance. Comparison of the 
NERC Compliance Registry with data submitted to the Energy Information 
Administration on Form EIA-861 indicates that, of the 901 generator 
owners in the United States registered by NERC, 49 qualify as small 
entities (5.4 percent) and of the 184 of the transmission planners in 
the United States registered by NERC, 42 qualify as small entities (22 
percent). The Commission estimates that the small entities to whom the 
proposed Reliability Standards PRC-019-1, PRC-024-1 and MOD-025-1 
applies will incur compliance \50\ and record keeping costs \51\ of 
$655,228 ($13,372 per generator owner). For the proposed Reliability 
Standards MOD-026-1 and MOD-027-1, the Commission estimates that the 
small generator owner entities (22) will incur compliance and record 
keeping costs of $83,072 ($3,776 per generator owner). This will result 
in a total compliance and record-keeping cost for generator owners of 
$686,870 ($14,018 per entity). Additionally, small transmission planner 
entities (42) will incur compliance and record keeping costs \52\ of 
$47,040 ($1,120 per transmission planner).
---------------------------------------------------------------------------

    \50\ Assuming 50 hours per generator owner for relay settings/
testing based on $70/hour.
    \51\ This cost came from the above PRC-019-1, PRC-024-1, and 
MOD-025-2 tables.
    \52\ This cost came from the above MOD-026-1 and MOD-027-1 
tables.
---------------------------------------------------------------------------

    43. The Commission does not consider the estimated costs per small 
entity to have a significant economic impact for a substantial number 
of small entities. Accordingly, the Commission certifies that this 
proposed rulemaking will not have a significant economic impact on a 
substantial number of small entities. The Commission seeks comment on 
this certification.

VI. Environmental Analysis

    44. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\53\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\54\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \53\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \54\ 18 CFR 380.4(a)(2)(ii).

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[[Page 58500]]

VII. Comment Procedures

    45. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due November 25, 2013. Comments must refer to 
Docket No. RM13-16-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    46. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    47. Commenters that are not able to file comments electronically 
must send original and 14 copies of their comments to: Federal Energy 
Regulatory Commission, Secretary of the Commission, 888 First Street 
NE., Washington, DC 20426.
    48. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    49. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington DC 20426.
    50. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    51. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

    By the direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-23169 Filed 9-23-13; 8:45 am]
BILLING CODE 6717-01-P