Document ID: FERC-2007-1448-0001
Agency: ferc
Document Type: Proposed Rule
Title: Facilities Design, Connections and Maintenance Reliability Standards
Posted Date: 2007-08-20T04:00Z

[Federal Register: August 20, 2007 (Volume 72, Number 160)]
[Proposed Rules]               
[Page 46413-46421]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20au07-13]                         

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM07-3-000]

 
Facilities Design, Connections and Maintenance Reliability 
Standards

August 13, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the 
Commission is proposing to approve three Reliability Standards 
developed by the North American Electric Reliability Corporation 
(NERC), which the Commission has certified as the Electric Reliability 
Organization responsible for developing and enforcing mandatory 
Reliability Standards. The three new Reliability Standards, designated 
by NERC as FAC-010-1, FAC-011-1 and FAC-014-1, set requirements for the 
development of system operating limits of the Bulk-Power System for use 
in the planning and operation horizons.

DATES: Comments are due September 19, 2007.

ADDRESSES: Comments and reply comments may be filed electronically via 
the eFiling link on the Commission's Web site at http://www.ferc.gov. 

Documents created electronically using word processing software should 
be filed in the native application or print-to-PDF format and not in a 
scanned format. This will enhance document retrieval for both the 
Commission and the public. The Commission accepts most standard word 
processing formats and commenters may attach additional files with 
supporting information in certain other file formats. Attachments that 
exist only in paper form may be scanned. Commenters filing 
electronically should not make a paper filing. Service of rulemaking 
comments is not required. Commenters that are not able to file 
electronically must send an original and 14 copies of their comments 
to: Federal Energy Regulatory Commission, Office of the Secretary, 888 
First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: 
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.
Kumar Agarwal (Technical Information), Office of Energy Markets and 
Reliability, Division of Reliability, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8923.

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215 of the Federal Power Act (FPA), the 
Commission is proposing to approve three Reliability Standards 
developed by the North American Electric Reliability Corporation 
(NERC), which the Commission has certified as the Electric Reliability 
Organization responsible for developing and enforcing mandatory 
Reliability Standards. The three new Reliability Standards, designated 
by NERC as FAC-010-1, FAC-011-1 and FAC-014-1, set requirements for the 
development of system operating limits of the Bulk-Power System for use 
in the planning and operation horizons.\1\
---------------------------------------------------------------------------

    \1\ The Commission is not proposing any new or modified text to 
its regulations. Rather, as set forth in 18 CFR part 40, a proposed 
Reliability Standard will not become effective until approved by the 
Commission, and the ERO must post on its Web site each effective 
Reliability Standard.
---------------------------------------------------------------------------

I. Background

A. EPAct 2005 and Mandatory Reliability Standards

    2. On August 8, 2005, the Electricity Modernization Act of 2005, 
which is Title XII, Subtitle A, of the Energy Policy Act of 2005 (EPAct 
2005), was enacted into law.\2\ EPAct 2005 adds a new section 215 to 
the FPA, which requires a Commission-certified ERO to develop mandatory 
and enforceable Reliability Standards, which are subject to Commission 
review and approval. Once approved, the Reliability Standards may be 
enforced by the ERO, subject to Commission oversight or the Commission 
can independently enforce Reliability Standards.\3\
---------------------------------------------------------------------------

    \2\ Energy Policy Act of 2005, Pub. L. 109-58, Title XII, 
Subtitle A, 119 Stat. 594, 941 (2005), to be codified at 16 U.S.C. 
824o.
    \3\ 16 U.S.C. 824o(e)(3).
---------------------------------------------------------------------------

    3. On February 3, 2006, the Commission issued Order No. 672, 
implementing section 215 of the FPA.\4\ Pursuant to Order No. 672, the 
Commission certified one organization, NERC, as the ERO.\5\ The ERO is 
required to develop Reliability Standards, which are subject to 
Commission review and approval. The Reliability Standards will apply to 
users, owners and operators of the Bulk-Power System, as set forth in 
each Reliability Standard.
---------------------------------------------------------------------------

    \4\ Rules Concerning Certification of the Electric Reliability 
Organization; Procedures for the Establishment, Approval and 
Enforcement of Electric Reliability Standards, Order No. 672, 71 FR 
8662 (February 17, 2006), FERC Stats. & Regs. ] 31,204 (2006), order 
on reh'g, Order No. 672-A, 71 FR 19814 (April 18, 2006), FERC Stats. 
& Regs. ] 31,212 (2006).
    \5\ North American Electric Reliability Corp., 116 FERC ] 61,062 
(ERO Certification Order), order on reh'g & compliance, 117 FERC ] 
61,126 (ERO Rehearing Order) (2006), order on compliance, 118 FERC ] 
61,030 (2007) (January 2007 Compliance Order).
---------------------------------------------------------------------------

B. NERC's Proposed New Reliability Standards

    4. On November 15, 2006, NERC filed 20 revised Reliability 
Standards and three new Reliability Standards for Commission approval. 
The Commission addressed the 20 revised Reliability Standards in Order 
No. 693.\6\ The three new Reliability Standards were designated by NERC 
as follows:
---------------------------------------------------------------------------

    \6\ On March 16, 2007, the Commission approved 83 of the 107 
standards initially filed by NERC. See Mandatory Reliability 
Standards for the Bulk-Power System, Order No. 693, 72 FR, 16,416 
(April 4, 2007), FERC Statutes and Regulations ] 31,242 (2007), 
order on reh'g Order No. 693-A, 120 FERC ] 61,053 (2007).
---------------------------------------------------------------------------

    FAC-010-1 (System Operating Limits Methodology for the Planning 
Horizon);
    FAC-011-1 (System Operating Limits Methodology for the Operations 
Horizon); and
    FAC-014-1 (Establish and Communicate System Operating Limits).
    These three Reliability Standards were assigned to a new rulemaking 
proceeding, Docket No. RM07-3-000, and are the subject of the current 
Notice of Proposed Rulemaking (NOPR).\7\
---------------------------------------------------------------------------

    \7\ The three Reliability Standards are not attached to this 
NOPR but are available on the Commission's eLibrary document 
retrieval system in Docket No. RM07-3-000 and on NERC's Web site, 
http://www.nerc.com/~filez/nerc_filings_ferc.html.

---------------------------------------------------------------------------

    5. In addition, NERC proposes the addition or revision of the 
following terms in the NERC Glossary of Terms Used in Reliability 
Standards (NERC glossary): ``cascading outages,'' ``delayed fault 
clearing,'' ``Interconnection

[[Page 46414]]

Reliability Operating Limit (IROL),'' and ``Interconnection Reliability 
Operating Limit Tv (IROL Tv).'' \8\
---------------------------------------------------------------------------

    \8\ In Order No. 693, at P 1893-98, the Commission approved the 
NERC glossary and directed specific modifications to the document.
---------------------------------------------------------------------------

    6. NERC states that the three new Reliability Standards ensure that 
system operating limits and interconnection reliability operating 
limits are developed using consistent methods and that those methods 
contain certain essential elements.\9\ NERC requests an effective date 
of July 1, 2007 for Reliability Standards FAC-010-1, October 1, 2007 
for FAC-011-1, and January 1, 2008 for FAC-014-1. NERC explains that it 
has proposed a phased schedule for implementing these Reliability 
Standards so that each responsible entity has sufficient time to 
develop the methodology for determining stability limits associated 
with a list of multiple contingencies, to update the system operating 
limits as needed to comply with the new requirements, to communicate 
the limits to others, and to prepare the documentation necessary to 
demonstrate compliance.
---------------------------------------------------------------------------

    \9\ NERC filing at 20. Section 39.5(a) of the Commission's 
regulations, 18 CFR 39.5 (2007), provides that the ERO's submission 
of a new or modified Reliability Standard must include, inter alia, 
a concise statement of the basis and purpose of the proposed 
Reliability Standard and a demonstration that the proposal is just, 
reasonable not unduly discriminatory or preferential, and in the 
public interest. We note that NERC's filing, at 20, includes a 
single paragraph describing the purpose of the proposed Reliability 
Standards. Future Reliability Standard filings may be subject to a 
deficiency letter if they fail to satisfy the filing requirements 
set forth in our regulations.
---------------------------------------------------------------------------

    7. NERC states that the original balloting for FAC-010-1 and FAC-
011-1 took place in March 2006, but failed to reach a quorum.\10\ These 
Reliability Standards were revised and posted for comment during June 
and July 2006.
---------------------------------------------------------------------------

    \10\ Id. at 21.
---------------------------------------------------------------------------

    8. NERC states that the revised Reliability Standards were balloted 
in September 2006 and were approved by a weighted average of 74.5 
percent with 81.6 percent of the ballot pool voting. However, because 
negative comments were received, a need for recirculation of the ballot 
was triggered. The recirculation ballot was conducted in October 2006 
and was approved by a weighted average of 71.66 percent with 84.93 
percent of the ballot pool voting.

II. Discussion

A. FAC-010-1 (System Operating Limits Methodology for the Planning 
Horizon)

1. Description of the Reliability Standard
    9. The stated Purpose of the Reliability Standard is to ``ensure 
that System Operating Limits (SOLs) used in the reliable planning of 
the Bulk Electric System (BES) are determined based on an established 
methodology or methodologies.'' \11\ FAC-010-1 applies to ``planning 
authorities'' and requires each planning authority to document its 
methods for determining system operating limits and to share the 
calculated limits with reliability entities.\12\
---------------------------------------------------------------------------

    \11\ The NERC glossary defines system operating limit or SOL as 
``the value * * * that satisfies the most limiting of the prescribed 
operating criteria for a specified system configuration to ensure 
operation within acceptable reliability criteria.* * *''
    \12\ The NERC glossary defines ``planning authority'' as ``the 
responsible entity that coordinates and integrates transmission 
facility and service plans, resource plans, and protection 
systems.'' We note that Version 2 of NERC's Reliability Functional 
Model, adopted by the NERC Board of Trustees on February 10, 2004, 
at 14-16, discusses the role of the planning authority. However, 
Version 3 of NERC's Reliability Functional Model, adopted by the 
NERC Board of Trustees on February 13, 2007, at 13-15, appears to 
have replaced ``planning authority'' with the new term ``planning 
coordinator.''
---------------------------------------------------------------------------

    10. Requirement R1 of the Reliability Standard provides that the 
Planning Authority shall have a documented SOL methodology within its 
planning area that is applicable to the planning time horizon, does not 
exceed facility ratings, and includes a description of how to identify 
the subset of SOLs that qualify as interconnection reliability 
operating limits (IROLs).\13\
---------------------------------------------------------------------------

    \13\ As discussed later, NERC has proposed the following 
definition of IROL, ``a System Operating Limit that, if violated, 
could lead to instability, uncontrolled separation, or Cascading 
Outages that adversely impact the reliability of the Bulk Electric 
System.''
---------------------------------------------------------------------------

    11. Requirement R2 of the Reliability Standard identifies specific 
considerations that must be included in the methodology. For example, 
Requirement R2.1 provides that the methodology must include a 
requirement that SOLs provide bulk electric system performance so that, 
in the pre-contingency state and with all facilities in service, the 
bulk electric system shall demonstrate transient, dynamic and voltage 
stability and all facilities shall be within their facility ratings. 
Requirement R2.2 provides that, following specified single 
contingencies, the system shall demonstrate transient, dynamic and 
voltage stability, all facilities shall be within their facility 
ratings, and cascading outages or uncontrolled separation shall not 
occur. Requirement R2.3 states that, starting with all facilities in 
service, the system's response to a single contingency may include any 
of the following:
    R2.3.1--Planned or uncontrolled interruption of electric supply to 
radial customers or some local network customers connected to or 
supplied by the Faulted Facility or by the affected area.
    R2.3.2--System reconfiguration through manual or automatic control 
or protection actions.
    R2.3.3--To prepare for the next Contingency, system adjustments may 
be made, including changes to generation, uses of the transmission 
system and the transmission system topology.
    12. Requirement R2.4 provides that, starting with all facilities in 
service and following any of the multiple contingencies identified in 
Reliability Standard TPL-003,\14\ the system shall demonstrate 
transient, dynamic and voltage stability, all facilities shall be 
within their facility ratings, and cascading outages or uncontrolled 
separation shall not occur. Requirement R2.5 states that, in 
determining the response to any of the multiple contingencies 
identified in TPL-003, in addition to the actions identified in R2.3.1 
and R2.3.2, ``the following shall be acceptable: planned or controlled 
interruption of electric supply to customers (load shedding), the 
planned removal from service of certain generators, and/or the 
curtailment of contracted Firm (non-recallable reserved) electric power 
Transfers.''
---------------------------------------------------------------------------

    \14\ In Order No. 693, the Commission approved TPL-003-0. In 
addition, the Commission directed the ERO to develop specific 
modifications to TPL-003-0. See Order No. 693 at P 1816-25.
---------------------------------------------------------------------------

    13. Further, FAC-010-1 includes an Interconnection-wide regional 
difference applicable to the Western Interconnection. The regional 
difference provides a different, more detailed methodology for the 
evaluation of multiple contingencies when establishing SOLs. It also 
provides that ``the Western Interconnection may make changes 
(performance category adjustments) to the Contingencies required to be 
studied and/or the required responses to Contingencies for specific 
facilities based on actual system performance and robust design.''
    14. Reliability Standard FAC-010-1 identifies data retention 
requirements and two sets of Levels of Non-Compliance, one of general 
applicability and one for the Western Interconnection. FAC-010-1 
includes

[[Page 46415]]

Measures corresponding to each Requirement. It identifies the regional 
reliability organization as the entity responsible for compliance 
monitoring.
2. Commission Proposal
    15. The Commission proposes to approve Reliability Standard FAC-
010-1 as a mandatory and enforceable Reliability Standard.\15\ In 
addition, the Commission seeks ERO clarification and public comment on 
several matters discussed below.
---------------------------------------------------------------------------

    \15\ The Commission expects that the reference to the regional 
reliability organization as the compliance monitor should be 
replaced with the term Regional Entity. Order No. 693 at P 157.
---------------------------------------------------------------------------

a. Consistency With Order No. 890
    16. In Order No. 890, the Commission amended the pro forma open 
access transmission tariff (OATT) to ensure that it achieves its 
original purpose of remedying undue discrimination, provide greater 
specificity to reduce opportunities for undue discrimination, and 
increase transparency in the rules applicable to planning and use of 
the transmission system.\16\ Order No. 890 requires the consistent use 
of assumptions underlying operational planning for short-term available 
transmission capability (ATC) calculations and expansion planning for 
long-term ATC calculations.\17\
---------------------------------------------------------------------------

    \16\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12266 (March 15, 2007), 
FERC Stats. & Regs. ] 31,241 (2007), reh'g pending.
    \17\ Id. P 290-95.
---------------------------------------------------------------------------

    17. As explained above, FAC-010-1 requires each planning authority 
to document its methods for determining system operating limits or SOLs 
for the planning horizon. SOLs often control or define ATC by 
determining the outer limit of the operational capability between any 
two areas or across a transmission path or interface. The Commission 
seeks comment on whether the development of a methodology for 
calculation of SOLs for the planning horizon pursuant to proposed 
Reliability Standard FAC-010-1 and the calculation of ATC for the long-
term pursuant to NERC's Modeling, Data, and Analysis (MOD) Reliability 
Standards results in the consistent use of assumptions as required by 
Order No. 890. In particular, the Commission has the following 
concerns:

    (1) For a given set of conditions, the IROL and SOL values will 
change with the additional contingencies that are studied. 
Application of additional first contingencies and multiple 
contingencies will, in general, result in lower SOL limits as 
compared to those calculated with either the existing operational or 
planning contingencies. Is there a potential for the exercise of 
undue discrimination against transmission customers where, for 
example, a planning authority's SOL methodology calls for the 
application of a single contingency in determining SOLs pursuant to 
FAC-010-1 and the reliability coordinator and planning authority 
calculate ATC for the long-term using the assumption of multiple 
contingencies? Do the Order No. 890 transparency requirements 
mitigate any potential for the exercise of undue discrimination in 
this respect?
    (2) In Order No. 693, the Commission required that total 
transfer capability (TTC) be addressed under the Reliability 
Standard that deals with transfer capability such as FAC-012-1, 
rather than MOD-001-0.\18\ The Commission disagreed with commenters 
suggesting that transfer capabilities addressed by FAC-012-1 are 
necessarily different from TTC used for ATC calculation. In a 
similar vein, the Commission seeks comment on whether the SOLs 
developed pursuant to FAC-010-1 are essentially the same as TTC used 
for ATC calculation. If so, should NERC address SOLs, transfer 
capability and TTC in a coordinated and consistent manner?
---------------------------------------------------------------------------

    \18\ See Order No. 693 at P 1050-52.
---------------------------------------------------------------------------

b. Western Interconnection Regional Difference
    18. Order No. 672 explains that ``uniformity of Reliability 
Standards should be the goal and the practice, the rule rather than the 
exception.'' \19\ Moreover, the Commission has stated that, as a 
general matter, regional differences are permissible if they are either 
more stringent than the continent-wide Reliability Standard, or if they 
are necessitated by a physical difference in the Bulk-Power System.\20\ 
Regional differences must still be just, reasonable, not unduly 
discriminatory or preferential and in the public interest.\21\
---------------------------------------------------------------------------

    \19\ Order No. 672 at P 290.
    \20\ Id. P 291.
    \21\ Id.
---------------------------------------------------------------------------

    19. The WECC regional difference in FAC-010-1 identifies a 
different list of multiple contingencies from those in Category C of 
Table 1 in the TPL Reliability Standard series. The detailed list of 
considerations in the regional difference that would apply to the 
Western Interconnection adds additional contingencies and appears to be 
more stringent. Thus, we also propose to approve the regional 
difference that would apply to the Western Interconnection regarding 
the methodology for establishing SOLs.
    20. However, the Commission also has the following concern 
regarding the proposed regional difference. As noted above, the 
regional difference provides that the Western Interconnection may make 
changes to the contingencies required to be studied or required 
responses to contingencies based on actual system performance. 
Presumably, such changes would be developed by WECC. However, the 
Reliability Standard does not identify any process for making such 
changes or indicate whether the requirements for reasonable notice and 
opportunity for public comment, due process, openness and balance of 
interests will be met in making such changes.\22\ Accordingly, we 
propose that WECC should identify the process that it will use to make 
changes to the currently listed contingencies required to be studied or 
required responses to contingencies. Further, the Commission seeks 
comment on whether the regional difference should be modified to 
explicitly include the process that WECC will use to make changes to 
the currently listed contingencies.
---------------------------------------------------------------------------

    \22\ See 16 U.S.C. 824o(c)(2)(D).
---------------------------------------------------------------------------

c. Other Matters
    21. The Commission seeks the following clarification from the ERO 
regarding the language of FAC-010-1. As mentioned above, Requirement 
R2.3 provides that the system's response to a single contingency may 
include, inter alia, ``planned or controlled interruption of electric 
supply to radial customers or some local network customers connected to 
or supplied by the Faulted Facility or by the affected area.'' The 
Commission seeks clarification whether this provision is limited to the 
loss of load that is a direct result of the contingency, i.e., 
consequential load, or whether this provision allows firm load shedding 
and firm transmission curtailment following a single contingency. In 
Order No. 693, the Commission determined that the single contingency 
provision should allow only the interruption of consequential load \23\ 
and seeks confirmation from the ERO that this proposed Reliability 
Standard conforms to this determination.
---------------------------------------------------------------------------

    \23\ Order No. 693 at P 1791-94 (discussing TPL-002-0).
---------------------------------------------------------------------------

    22. Further, as noted above, while the Reliability Standard 
identifies the ``planning authority'' as the applicable entities, the 
most recent iteration of the Functional Model has eliminated the term 
and now refers to ``planning coordinator.'' The ERO should explain its 
plans to make FAC-010-1 consistent with the most recent iteration of 
the Functional Model, and how this may affect the applicability of the 
Reliability Standard to individual entities.\24\

[[Page 46416]]

Finally, NERC must remove references to the regional reliability 
organization as the entity responsible for compliance monitoring and 
replace it with either the Regional Entity or ERO.\25\
---------------------------------------------------------------------------

    \24\ NERC's Statement of Compliance Registry Criteria (Version 
3), approved by the Commission in Order No. 693, sets out criteria 
that will be used by NERC and the Regional Entities for identifying 
users, owners and operators of the Bulk-Power System that are 
candidates for registration for compliance with mandatory 
Reliability Standards. Order No. 693 at P 92-96. NERC's registry 
criteria provide that NERC will register entities that perform a 
``planning authority'' function. Thus, it appears that the criteria 
used by NERC and the Regional Entities to register entities are 
consistent with the terms of FAC-010-1.
    \25\ See Order No. 693 at P 157.
---------------------------------------------------------------------------

    23. Finally, Requirement R2.2 of FAC-010-1 requires a planning 
authority to consider various single contingencies including the loss 
of a shunt device. While the transmission planning (TPL) Reliability 
Standards implicitly require the consideration of the loss of a shunt 
device, they do not require this explicitly. Should the Commission 
clarify the TPL Reliability Standards by requiring the ERO to modify 
them to explicitly require the consideration of a shunt device, 
consistent with FAC-010-1?

B. FAC-011-1 (System Operating Limits Methodology for the Operations 
Horizon)

1. Description of the Reliability Standard
    24. Proposed Reliability Standard FAC-011-1 requires each 
reliability coordinator to develop a SOL methodology for determining 
which of the stability limits associated with the list of multiple 
contingencies are applicable for use in the operating horizon based on 
actual or expected system conditions.
    25. Requirement R2 of FAC-011-1 identifies specific considerations 
that must be included in the methodology in a pre-contingency state and 
following one or multiple contingencies. The provisions of Requirement 
R2 of FAC-011-1 are the same as those in Requirement R2 of FAC-010-1, 
except for Requirement R2.3.2 of FAC-011-1, which provides as follows:

    In determining the system's response to a single Contingency, 
the following shall be acceptable. * * * [i]nterruption of other 
network customers, only if the system has already been adjusted, or 
is being adjusted, following at least one prior outage, or, if the 
real-time operating conditions are more adverse than anticipated in 
the corresponding studies, e.g., load greater than studied.

    26. FAC-011-1 includes an Interconnection-wide regional difference 
applicable to the Western Interconnection, which repeats the language 
of the regional difference in FAC-010-1. Again, the regional difference 
provides a different, more detailed methodology for the evaluation of 
multiple contingencies when establishing SOLs. It also provides that 
the ``Western Interconnection may make changes'' to the contingencies 
required to be studied and/or the required responses to contingencies 
for specific facilities.
    27. Reliability Standard FAC-011-1 identifies data retention 
requirements and two sets of Levels of Non-Compliance, one of general 
applicability and one for the Western Interconnection. It includes 
Measures corresponding to each Requirement and identifies the regional 
reliability organization as the entity responsible for compliance 
monitoring.
2. Commission Proposal
    28. The Commission proposes to approve Reliability Standard FAC-
011-1 as a mandatory and enforceable Reliability Standard. In addition, 
the Commission seeks ERO clarification and public comment on several 
matters discussed below.
a. Consistency With Order No. 890
    29. Similar to our concerns discussed above regarding FAC-010-1, 
the Commission has the following concerns:

    (1) Is there a potential for the exercise of undue 
discrimination against transmission customers where, for example, a 
reliability coordinator's SOL methodology calls for the application 
of a single contingency in determining SOLs pursuant to FAC-011-1 
and the reliability coordinator and planning authority calculate ATC 
for the short-term using the assumption of multiple contingencies? 
Do the Order No. 890 transparency requirements mitigate any 
potential for the exercise of undue discrimination in this respect?
    (2) In Order No. 693, the Commission required that TTC be 
addressed under the Reliability Standard that deals with transfer 
capability such as FAC-012-1, rather than MOD-001-0.\26\ The 
Commission disagreed with commenters suggesting that transfer 
capabilities addressed by FAC-012-1 are necessarily different from 
TTC used for ATC calculation. In a similar vein, the Commission 
seeks comment on whether the SOLs developed pursuant to FAC-011-1 
are essentially the same as TTC used for ATC calculation. If so, 
should NERC address SOLs, transfer capability and TTC in a 
coordinated and consistent manner?
---------------------------------------------------------------------------

    \26\ See Order No. 693 at P 1050-52.
---------------------------------------------------------------------------

b. Western Interconnection Regional Difference
    30. The detailed list of considerations in the regional difference 
that would apply to the Western Interconnection appears to be more 
stringent and detailed than the set of contingencies provided in 
Requirement R2 of FAC-011-1. Thus, we also propose to approve the 
regional difference that would apply to the Western Interconnection 
regarding the methodology for the evaluation of multiple facility 
contingencies when establishing SOLs.
    31. Similar to our discussion regarding FAC-010-1, the Commission 
is concerned that the regional difference provides that the Western 
Interconnection may make changes to the contingencies required to be 
studied or required responses to contingencies based on actual system 
performance. Presumably, such change would be developed by WECC. 
However, the Reliability Standard does not identify any process for 
making such changes or indicate whether the requirements for reasonable 
notice and opportunity for public comment, due process, openness and 
balance of interests will be met in making such changes.\27\ 
Accordingly, we propose that WECC should identify the process that it 
will use to make changes to the currently listed contingencies required 
to be studied or required responses to contingencies. Further, the 
Commission seeks comment on whether the regional difference should be 
modified to explicitly include the process that WECC will use to make 
changes to the currently listed contingencies.
---------------------------------------------------------------------------

    \27\ See 16 U.S.C. 824o(c)(2)(D).
---------------------------------------------------------------------------

c. Other Matters
    32. As mentioned above, Requirement R2.3.2 provides that the 
system's response to a single contingency may include, inter alia, 
``[i]nterruption of other network customers, only if the system has 
already been adjusted, or is being adjusted, following at least one 
prior outage, or, if the real-time operating conditions are more 
adverse than anticipated in the corresponding studies, e.g., load 
greater than studied.'' The Commission seeks clarification from the ERO 
regarding the meaning of the phrase ``if the real-time operating 
conditions are more adverse than anticipated in the corresponding 
studies, e.g., load greater than studied.'' In particular, the 
Commission is concerned whether this provision treats load forecast 
error as a contingency and as such would allow an interruption due to 
an inaccurate weather forecast. Finally, NERC must remove references to 
the regional reliability organization as the entity responsible for 
compliance monitoring and replace it with either the Regional Entity or 
ERO.\28\
---------------------------------------------------------------------------

    \28\ See Order No. 693 at P 157.

---------------------------------------------------------------------------

[[Page 46417]]

    33. Requirement R2.2 of FAC-011-1 requires a reliability 
coordinator to consider various single contingencies including the loss 
of a shunt device. While the TPL Reliability Standards implicitly 
require the consideration of the loss of a shunt device, they do not 
require this explicitly. Should the TPL Reliability Standards be 
modified to explicitly require the consideration of a shunt device, 
consistent with FAC-011-1?

C. FAC-014-1 (Establish and Communicate System Operating Limits)

1. Description of the Reliability Standard
    34. Proposed Reliability Standard FAC-014-1 requires each 
reliability coordinator, planning authority, transmission planner and 
transmission operator to develop and communicate SOL limits in 
accordance with the methodologies developed pursuant to FAC-010-1 and 
FAC-011-1.
    35. Requirement R1 requires the reliability coordinator to ensure 
that SOLs are established for its ``reliability coordinator area'' and 
that the SOLs are consistent with its SOL methodology. Requirement R2 
requires the transmission operator to establish SOLs as directed by its 
reliability coordinator that are consistent with the reliability 
coordinator's methodology. Likewise, Requirements R3 and R4 require the 
planning authority and transmission planner, respectively, to establish 
SOLs consistent with the planning authority's SOL methodology. 
Requirement R5 requires the reliability coordinator, planning authority 
and transmission planner to provide its SOLs to those entities that 
have a reliability-related need. Finally, Requirement R6 requires the 
planning authority to identify the subset of multiple contingencies, if 
any, from Reliability Standard TPL-003 which result in stability limits 
and to provide this list and associated stability limits to the 
relevant reliability coordinator.
    36. Reliability Standard FAC-014-1 includes data retention 
requirements, Levels of Non-Compliance, and Measures corresponding to 
each Requirement. It identifies the regional reliability organization 
as the entity responsible for compliance monitoring.
2. Commission Proposal
    37. The Commission proposes to approve Reliability Standard FAC-
014-1 as a mandatory and enforceable Reliability Standard. The 
Reliability Standard fulfills an important reliability goal in the 
development and communication of SOL limits in accordance with 
consistent methodologies. However, NERC must remove references to the 
regional reliability organization as the entity responsible for 
compliance monitoring and replace it with either the Regional Entity or 
ERO.\29\
---------------------------------------------------------------------------

    \29\ See Order No. 693 at P 157.
---------------------------------------------------------------------------

D. Proposed Definitions

    38. NERC proposes the addition or revision of the following four 
terms in the NERC glossary:

    Cascading Outages: The uncontrolled successive loss of bulk 
electric system facilities triggered by an incident (or condition) 
at any location resulting in the interruption of electric service 
that cannot be restrained from spreading beyond a pre-determined 
area.
    Delayed Fault Clearing: Fault clearing consistent with correct 
operation of a breaker failure protection system and its associated 
breakers, or of a backup protection system with an intentional time 
delay.
    Interconnection Reliability Operating Limit (IROL): A system 
operating limit that, if violated, could lead to instability, 
uncontrolled separation, or cascading outages that adversely impact 
the reliability of the bulk electric system.
    Interconnection Reliability Operating Limit Tv (IROL 
Tv): The maximum time that an Interconnection Reliability 
Operating Limit can be violated before the risk to the 
interconnection or other Reliability Coordinator Area(s) becomes 
greater than acceptable. Each Interconnection Reliability Operating 
Limit's Tv shall be less than or equal to 30 minutes.

    39. The Commission believes that there could be multiple 
interpretations of some of these terms. As such, the Commission 
proposes to provide its clarification of Cascading Outages, 
Interconnection Reliability Operating Limit, and Interconnection 
Reliability Operating Limit TV to be consistent with 
directives in Order No. 693.
    40. The current definition of Cascading Outages in the approved 
NERC glossary is ``The uncontrolled successive loss of system elements 
triggered by an incident at any location. Cascading results in 
widespread electric service interruption that cannot be restrained from 
sequentially spreading beyond an area predetermined by studies.'' \30\ 
The ambiguity in the term relates to the last phrase in the definition 
which identifies the extent of an outage that would be considered a 
cascade. The revised definition uses the similar phrase ``a 
predetermined area'' which may lead to different interpretations. The 
Commission understands that this phrase has been interpreted as being 
as small as the elements that would be removed from service by local 
protective relays to as large as the entire balancing authority. Simply 
put, some applications of Cascading Outage could allow the loss of an 
entire balancing authority and not consider that loss to be a Cascading 
Outage. The Commission disagrees with such a liberal application. For 
purposes of compliance, the Commission proposes to direct NERC to 
consider the loss of facilities in the bulk electric systems that are 
beyond those that would be removed from service by primary or backup 
protective relaying associated with the initiating event to be a 
Cascading Outage. With this understanding of the phrase, the Commission 
proposes to accept the definition in FAC-014.
---------------------------------------------------------------------------

    \30\ NERC April 4, 2006 Request for Approval of Reliability 
Standards, Glossary of Terms Used in Reliability Standards at 2.
---------------------------------------------------------------------------

    41. With respect to NERC's proposed definition of IROL, the 
Commission identified in Order No. 693 that the statutory definition of 
Reliable Operation is to assure that the system is operated within 
thermal, voltage and stability limits such that instability, 
uncontrolled separation, or cascading failures will not occur. IROLs 
are a specific subset of the operating limits at which instability, 
uncontrolled separation, or cascading failures may occur. All IROL 
violations will have an adverse impact on the reliability of the bulk 
electric system.
    42. The definition of IROL in the approved NERC glossary is ``The 
value (such as MW, MVar, Amperes, Frequency or Volts) derived from, or 
a subset of the System Operating Limits, which if exceeded, could 
expose a widespread area of the Bulk Electric System to instability, 
uncontrolled separation(s) or cascading outages.'' \31\ The revised 
definition is consistent with the intent of the statute with the 
exception of the phrase ``that adversely impacts the reliability of the 
bulk electric system.'' This may give the impression that violation of 
some IROLs that do not adversely impact the reliability of the bulk 
electric system are acceptable. The Commission proposes to accept the 
definition in FAC-014 with the understanding that all IROLs impact bulk 
electric system reliability.
---------------------------------------------------------------------------

    \31\ Id. at 7.
---------------------------------------------------------------------------

    43. In Order No. 693, the Commission identified two interpretations 
of when an entity exceeds an IROL.\32\ The definition of IROL 
Tv does not distinguish between those two interpretations. 
The Commission proposes to accept the definition in FAC-014 with the 
understanding that the only time it is acceptable to violate

[[Page 46418]]

an IROL is in the limited time after a contingency has occurred and the 
operators are taking action to eliminate the violation.
---------------------------------------------------------------------------

    \32\ See Order No. 693 at P 946 & n.303.
---------------------------------------------------------------------------

E. Violation Risk Factors

    44. As part of its compliance and enforcement program, NERC plans 
to assign a low, medium or high Violation Risk Factor to each 
requirement of each mandatory Reliability Standard to associate a 
violation of the requirement with its potential impact on the 
reliability of the Bulk-Power System. The categories are based on the 
following definitions:

    High Risk Requirement: (a) Is a requirement that, if violated, 
could directly cause or contribute to Bulk-Power System instability, 
separation, or a cascading sequence of failures, or could place the 
Bulk-Power System at an unacceptable risk of instability, 
separation, or cascading failures; or (b) is a requirement in a 
planning time-frame that, if violated, could, under emergency, 
abnormal, or restorative conditions anticipated by the preparations, 
directly cause or contribute to Bulk-Power System instability, 
separation, or a cascading sequence of failures, or could place the 
Bulk-Power System at an unacceptable risk of instability, 
separation, or cascading failures, or could hinder restoration to a 
normal condition.
    Medium Risk Requirement: (a) Is a requirement that, if violated, 
could directly affect the electrical state or the capability of the 
Bulk-Power System, or the ability to effectively monitor and control 
the Bulk-Power System, but is unlikely to lead to Bulk-Power System 
instability, separation, or cascading failures; or (b) is a 
requirement in a planning time frame that, if violated, could, under 
emergency, abnormal, or restorative conditions anticipated by the 
preparations, directly affect the electrical state or capability of 
the Bulk-Power System, or the ability to effectively monitor, 
control, or restore the Bulk-Power System, but is unlikely, under 
emergency, abnormal, or restoration conditions anticipated by the 
preparations, to lead to Bulk-Power System instability, separation, 
or cascading failures, nor to hinder restoration to a normal 
condition.
    Lower Risk Requirement: Is administrative in nature and (a) is a 
requirement that, if violated, would not be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor and control the Bulk-Power System; or 
(b) is a requirement in a planning time frame that, if violated, 
would not, under the emergency, abnormal, or restorative conditions 
anticipated by the preparations, be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor, control, or restore the Bulk-Power 
System.\33\
---------------------------------------------------------------------------

    \33\ North American Electric Reliability Corp., 119 FERC ] 
61,145 at P 9 (2007) (Violation Risk Factor Order).

    45. In a separate filing, NERC identified Violation Risk Factors 
for each Requirement of proposed Reliability Standards FAC-010-1, FAC-
011-1 and FAC-014-1.\34\ NERC requested that the Commission approve the 
Violation Risk Factors when it takes action on the associated 
Reliability Standards.
---------------------------------------------------------------------------

    \34\ See NERC March 23, 2007 Request for Approval of Violation 
Risk Factors for Version 1 Reliability Standards, Docket No. RR07-
10-000, Exh. A, Violation Risk Factors for Facility Ratings 
Standards FAC-008-1 through FAC-014-1. The Commission addressed only 
those Violation Risk Factors pertaining to the 83 Reliability 
Standards approved in Order No. 693. Violation Risk Factor Order, 
119 FERC ] 61,145 (2007).
---------------------------------------------------------------------------

    46. In the Violation Risk Factor Order, the Commission addressed 
Violation Risk Factors filed by NERC for Version 0 and Version 1 
Reliability Standards. In that order, the Commission used five 
guidelines for evaluating the validity of each Violation Risk Factor 
assignment: (1) Consistency with the conclusions of the Final Report on 
the August 14, 2003 blackout in the United States and Canada,\35\ (2) 
consistency within a Reliability Standard, (3) consistency among 
Reliability Standards with similar Requirements, (4) consistency with 
NERC's proposed definition of the Violation Risk Factor level, and (5) 
assignment of Violation Risk Factor levels to those Requirements in 
certain Reliability Standards that co-mingle a higher risk reliability 
objective and a lower risk reliability objective.\36\
---------------------------------------------------------------------------

    \35\ 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). The Final Blackout Report is available on the Internet at 
http://www.ferc.gov/industries/electric/indus-act/blackout.asp.

    \36\ For a complete discussion of each factor, see the Violation 
Risk Factor Order at P 19-36.
---------------------------------------------------------------------------

    47. The Commission proposes to approve most of the Violation Risk 
Factors for Reliability Standards FAC-010-1, FAC-011-1 and FAC-014-1 
that NERC identified in its March 23, 2007 filing. However, several of 
the Violation Risk Factors submitted for Reliability Standards FAC-010-
1, FAC-011-1 and FAC-014-1 raise concerns. First, the Commission notes 
that there are no Violation Risk Factors applicable to the WECC 
regional differences and that certain portions of the WECC regional 
differences lack levels of non-compliance. The Commission requests 
comment on whether it should require WECC to develop Violation Risk 
Factors and the levels of non-compliance for the regional differences. 
If so, we request comment on how WECC should assess penalties in the 
interim.
    48. In FAC-010-1, the Commission proposes to direct NERC to modify 
the lower Violation Risk Factor assigned to Requirement R2 and the 
medium Violation Risk Factor assigned to sub-Requirements R2.1-R2.2.3 
based on guideline (4), which was developed to evaluate whether the 
assignment of a particular Violation Risk Factor level conforms to 
NERC's definition of that risk level.
    49. FAC-010-1 Requirement R2 requires the Planning Authority's SOL 
methodology to include a requirement that SOLs provide bulk electric 
system performance consistent with a stable pre-contingency (sub-
Requirement R2.1) and post-contingency (sub-Requirements R2.2-R2.2.3) 
bulk electric system using an accurate system topology with all 
facilities operating within their ratings and without post-contingency 
cascading outages or uncontrolled separation.
    50. NERC has assigned a lower Violation Risk Factor to Requirement 
R2.1, which requires the bulk electric system in a pre-contingency 
state and with all facilities in service to demonstrate transient, 
dynamic and voltage stability. The Commission believes that the lower 
assignment is inappropriate. A violation of a lower Violation Risk 
Factor, by definition, is generally considered administrative in nature 
and would not be expected to affect the electrical state or capability 
of the Bulk-Power System, or the ability to effectively monitor, 
control or restore the Bulk-Power System.\37\ The Commission believes 
that the lower Violation Risk Factor NERC proposes for this Requirement 
is not consistent with the ``lower'' definition, but consistent with 
the definition of ``high.'' The Commission believes that a violation of 
Requirement R2.1 could directly cause or contribute to Bulk-Power 
System instability, separation or cascading failures since a violation 
of R2.1 means that the system is in an unreliable state even before the 
system is subject to respond to a contingency. Therefore, we propose to 
require NERC to change the Violation Risk Factor of R.2.1 to high.
---------------------------------------------------------------------------

    \37\ See id.
---------------------------------------------------------------------------

    51. Similarly, NERC assigns a medium violation Risk Factor to FAC-
010-1 R2.2, which would be appropriate if a violation is unlikely to 
lead to Bulk-Power System instability, separation or cascading 
failures.\38\ However, Requirement R2.2 specifically states that with 
regard to post-contingency bulk electric system performance, 
``[c]ascading outages or uncontrolled separation shall not occur.'' 
Therefore, if Requirement R2.2 is violated for any one of the specific 
contingencies as described in Requirements R2.2.1-

[[Page 46419]]

R2.2.3, cascading outages or uncontrolled separation of the Bulk-Power 
System may occur. The potential risk a violation of R2.2 poses to the 
Bulk-Power System is not consistent with the definition of a medium 
Violation Risk Factor. Instead, the risk a violation of R2.2 presents 
to the Bulk-Power System is consistent with the definition of a high 
Violation Risk Factor.\39\ Therefore, we propose to require NERC to 
change the Violation Risk Factor of R.2.2 to high.
---------------------------------------------------------------------------

    \38\ See Violation Risk Factor Order, 119 FERC ] 61,145 at P 9.
    \39\ See id.
---------------------------------------------------------------------------

    52. As stated in the Violation Risk Factor Order, the Commission 
expects a rational connection between the sub-Requirement Violation 
Risk Factor assignments and the main Requirement Violation Risk Factor 
assignment.\40\ Because the Commission proposes to require NERC to 
modify the Violation Risk Factors for the sub-requirements of R2, to 
have a rational connection between the Violation Risk Factors assigned 
to sub-Requirements and Violation Risk Factors assigned to the main 
Requirement, we are also proposing to require NERC to change the 
Violation Risk Factor for R2 to high.
---------------------------------------------------------------------------

    \40\ Id. P 22.
---------------------------------------------------------------------------

    53. Similarly, the Commission has the same concern and proposal to 
reassign NERC's Violation Risk Factors for FAC-011-1 Requirement R2 and 
sub-Requirements R2.1-R2.2.3, which contain similar language as the 
corresponding Requirements in FAC-010-1.
    54. With regard to FAC-014-1, our concerns are with NERC's proposed 
Violation Risk Factor assignment of medium to Requirement R5 and sub-
Requirements R5.1-R5.1.4. Requirement R5 requires that the reliability 
coordinator, planning authority and transmission planner each provide 
its SOLs and IROLs to those entities that have a reliability-related 
need for those limits and provide a written request that includes a 
schedule for delivery of those limits. Sub-Requirements R5.1-R5.1.4 
comprise the list of supporting information to be provided. The 
Commission has concerns with NERC's proposed assignment based on its 
lack of consistency with the Final Blackout Report.
    55. The Commission believes that it is important to ensure that 
critical areas identified as causes of the August 2003 and other 
previous major blackouts are appropriately assigned as potential risks 
to the reliability of the Bulk-Power System.\41\ For example, the Final 
Blackout Report identified ineffective communications as one common 
factor of the August 2003 blackout and other previous major 
blackouts.\42\ The Final Blackout Report explained that, ``[u]nder 
normal conditions, parties with reliability responsibility need to 
communicate important and prioritized information to each other in a 
timely way, to help preserve the integrity of the grid.'' \43\
---------------------------------------------------------------------------

    \41\ Id. P 19-21.
    \42\ Final Blackout Report at 107.
    \43\ Id. at 109.
---------------------------------------------------------------------------

    56. The Commission believes that NERC's proposed Violation Risk 
Factor assignment of medium for the subject Requirements is not 
consistent with the findings of the Final Blackout Report. By 
definition, a ``medium'' Violation Risk Factor designation means that a 
violation of the requirement is unlikely to lead to Bulk-Power System 
instability, separation or cascading failures.\44\ Findings of the 
Final Blackout Report, as well as reports on other previous major 
blackouts, have determined otherwise in that the timely communication 
of important and prioritized information, in this case, SOLs and IROLs, 
to entities that have a reliability-related need for those limits are 
crucial in maintaining the reliability of the Bulk-Power System.
---------------------------------------------------------------------------

    \44\ Violation Risk Factor Order, P 9.
---------------------------------------------------------------------------

    57. As a result, we propose to require NERC to assign FAC-014-1 
Requirement R5, as well as sub-Requirements R5.1-R5.1.4, a high 
Violation Risk Factor to accurately reflect the potential risk a 
violation of the subject requirements presents to the Bulk-Power 
System.

III. Information Collection Statement

    58. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules.\45\ Upon approval of a collection(s) of information, OMB 
will assign an OMB control number and an expiration date. Respondents 
subject to the filing 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. The 
Paperwork Reduction Act (PRA) \46\ requires each federal agency to seek 
and obtain OMB approval before undertaking a collection of information 
directed to ten or more persons, or continuing a collection for which 
OMB approval and validity of the control number are about to 
expire.\47\ The PRA defines the phrase ``collection of information'' to 
be the ``obtaining, causing to be obtained, soliciting, or requiring 
the disclosure to third parties or the public, of facts or opinions by 
or for an agency, regardless of form or format, calling for either--
---------------------------------------------------------------------------

    \45\ 5 CFR 1320.13 (2007).
    \46\ 44 U.S.C. 3501-3520.
    \47\ 44 U.S.C. 3502(3)(A)(i), 44 U.S.C. 3507(a)(3).

    (i) Answers to identical questions posed to, or identical 
reporting or recordkeeping requirements imposed on ten or more 
persons, other than agencies, instrumentalities, or employees of the 
United States; or (ii) answers to questions posed to agencies, 
instrumentalities, or employees of the United States which are to be 
used for general statistical purposes.'' \48\
---------------------------------------------------------------------------

    \48\ 44 U.S.C. 3502(3)(A).

    59. This NOPR proposes to approve three new Reliability Standards 
developed by NERC as the ERO. Section 215 of the FPA authorizes the ERO 
to develop Reliability Standards to provide for the operation of the 
Bulk-Power System. Pursuant to the statute, the ERO must submit each 
Reliability Standard that it proposes to be made effective to the 
Commission for approval.\49\
---------------------------------------------------------------------------

    \49\ See 16 U.S.C. 824o(d).
---------------------------------------------------------------------------

    60. The three proposed Reliability Standards do not require 
responsible entities to file information with the Commission. Nor, with 
the exception of a three year self-certification of compliance, do the 
Reliability Standards require responsible entities to file information 
with the ERO or Regional Entities. However, the Reliability Standards 
do require responsible entities to develop and maintain certain 
information for a specified period of time, subject to inspection by 
the ERO or Regional Entities. Reliability Standard FAC-010-1 requires 
the planning authority to have a documented methodology for use in 
developing system operating limits or SOLs and must retain evidence 
that it issued its SOL methodology to relevant reliability 
coordinators, transmission operators and adjacent planning authorities. 
Likewise, the planning authority must respond to technical comments on 
the methodology within 45 days of receipt. Further, each planning 
authority must self-certify its compliance to the compliance monitor 
once every three years. Reliability Standard FAC-011-1 requires similar 
documentation by the reliability coordinator.
    61. Reliability Standard FAC-014-1 requires the reliability 
coordinator, planning authority, transmission operator, and 
transmission planner to verify compliance through self-certification 
submitted to the compliance monitor annually. These entities must also 
document that they have developed SOLs consistent with the applicable 
SOL methodology and

[[Page 46420]]

that they have provided SOLs to entities identified in Requirement 5 of 
the Reliability Standard. Further, the planning authority must maintain 
a list of multiple contingencies and their associated stability limits.
    62. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the Paperwork Reduction Act. Comments are solicited on the 
Commission's need for this information, whether the information will 
have practical utility, the accuracy of provided burden estimates, ways 
to enhance the quality, utility, and clarity of the information to be 
collected, and any suggested methods for minimizing the respondent's 
burden, including the use of automated information techniques.
    63. Our Estimates below regarding the number of respondents is 
based on the NERC compliance registry as of April 2007. NERC and the 
Regional Entities have identified approximately 170 Investor Owned 
Utilities, and 80 Large Municipals and Cooperatives. NERC's compliance 
registry indicates that there is a significant amount of overlap among 
the entities that perform these functions. In some instances, a single 
entity may be registered under all four of these functions. Thus, the 
Commission estimates that the total number of entities required to 
comply with the information ``reporting'' or development requirements 
of the proposed Reliability Standards is approximately 250 entities. 
About two-thirds of these entities are investor-owned utilities and 
one-third is a combination of municipal and cooperative organizations.
    64. Burden Estimate: The Public Reporting burden for the 
requirements contained in the NOPR is as follows:

----------------------------------------------------------------------------------------------------------------
                                       Number of       Number of
          Data collection             respondents      responses     Hours per respondent    Total annual hours
----------------------------------------------------------------------------------------------------------------
                                                    FERC-725D
----------------------------------------------------------------------------------------------------------------
Investor-Owned Utilities..........             170               1  Reporting: 90........  Reporting: 15,300.
                                    ..............  ..............  Recordkeeping: 210...  Recordkeeping:
                                                                                            35,700.
Large Municipals and Cooperatives.              80               1  Reporting: 90........  Reporting: 7,200.
                                    ..............  ..............  Recordkeeping: 210...  Recordkeeping:
                                                                                            16,800.
                                   -----------------------------------------------------------------------------
    Total.........................             250  ..............  .....................  75,000.
----------------------------------------------------------------------------------------------------------------

    Total Hours: (Reporting 22,500 hours + Recordkeeping 52,500 hours) 
= 75,000 hours.
    (FTE=Full Time Equivalent or 2,080 hours)
    Total Annual hours for Collection: (Reporting + recordkeeping) = 
75,000 hours.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost to be the total annual hours (reporting) 22,500 times 
$120 = $2,700,000.
    Storage 1,800 sq. ft. x $925 (off site storage) = $1,665,000.
    Total costs = $6,465,000.
    The Commission believes that this estimate may be conservative 
because most if not all of the applicable entities currently perform 
SOL calculations and the proposed Reliability Standards will provide a 
common methodology for those calculations.
    Title: FERC-725D Facilities Design, Connections and Maintenance 
Reliability Standards.
    Action: Proposed Collection of Information.
    OMB Control No.: To be determined.
    Respondents: Business or other for profit, and/or not for profit 
institutions.
    Frequency of Responses: One time to initially comply with the rule, 
and then on occasion as needed to revise or modify. In addition, annual 
and three-year self-certification requirements will apply.
    Necessity of the Information: The three Reliability Standards, if 
adopted, would implement 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. 
Specifically, the three proposed Reliability Standards would ensure 
that system operating limits or SOLs used in the reliability planning 
and operation of the Bulk-Power System are determined based on an 
established methodology.
    Internal review: The Commission has reviewed the requirements 
pertaining to mandatory Reliability Standards for the Bulk-Power System 
and determined the proposed requirements are necessary to meet the 
statutory provisions of the Energy Policy Act of 2005. These 
requirements conform to the Commission's plan for efficient information 
collection, communication and management within the energy industry. 
The Commission has assured itself, by means of internal review, that 
there is specific, objective support for the burden estimates 
associated with the information requirements.
    65. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Michael Miller, 
Office of the Executive Director, Phone: (202) 502-8415, fax: (202) 
273-0873, e-mail: michael.miller@ferc.gov]. Comments on the 
requirements of the proposed rule may also be sent to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission], e-mail: oira_submission@omb.eop.gov.

IV. Environmental Analysis

    66. 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.\50\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. The actions proposed here fall within the categorical 
exclusion in the Commission's regulations for rules that are 
clarifying, corrective or procedural, for information gathering, 
analysis, and dissemination.\51\ Accordingly, neither an environmental 
impact statement nor environmental assessment is required.
---------------------------------------------------------------------------

    \50\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
    \51\ 18 CFR 380.4(a)(5) (2007).

---------------------------------------------------------------------------

[[Page 46421]]

V. Regulatory Flexibility Act Certification

    67. The Regulatory Flexibility Act of 1980 (RFA) \52\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
Most of the entities, i.e., planning authorities, reliability 
coordinators, transmission planners and transmission operators, to 
which the requirements of this rule would apply do not fall within the 
definition of small entities.\53\
---------------------------------------------------------------------------

    \52\ 5 U.S.C. 601-612.
    \53\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act, which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. See 
15 U.S.C. 632 (2000). According to the SBA, a small electric utility 
is defined as one that has a total electric output of less than four 
million MWh in the preceding year.
---------------------------------------------------------------------------

    68. As indicated above, based on available information regarding 
NERC's compliance registry, approximately 250 entities will be 
responsible for compliance with the three new Reliability Standards. It 
is estimated that one-third of the responsible entities, about 80 
entities, would be municipal and cooperative organizations. The 
proposed Reliability Standards would apply to planning authorities, 
transmission planners, transmission operators and reliability 
coordinators, which tend to be larger entities. Thus, the Commission 
believes that only a portion, approximately 30 to 40 of the municipal 
and cooperative organizations to which the proposed Reliability 
Standards would apply, qualify as small entities.\54\ The Commission 
does not consider this a substantial number. Moreover, as discussed 
above, the proposed Reliability Standards will not be a burden on the 
industry since most if not all of the applicable entities currently 
perform SOL calculations and the proposed Reliability Standards will 
simply provide a common methodology for those calculations. 
Accordingly, the Commission certifies that the proposed Reliability 
Standards will not have a significant adverse impact on a substantial 
number of small entities.
---------------------------------------------------------------------------

    \54\ According to the DOE's Energy Information Administration 
(EIA), there were 3,284 electric utility companies in the United 
States in 2005, and 3,029 of these electric utilities qualify as 
small entities under the SBA definition. Among these 3,284 electric 
utility companies are: (1) 883 cooperatives of which 852 are small 
entity cooperatives; (2) 1,862 municipal utilities, of which 1842 
are small entity municipal utilities; (3) 127 political 
subdivisions, of which 114 are small entity political subdivisions; 
and (4) 219 privately owned utilities, of which 104 could be 
considered small entity private utilities. See Energy Information 
Administration Database, Form EIA-861, Dept. of Energy (2005), 
available at http://www.eia.doe.gov/cneaf/electricity/page/eia861.html
.

---------------------------------------------------------------------------

    69. Based on this understanding, the Commission certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities. Accordingly, no regulatory flexibility 
analysis is required.

VI. Comment Procedures

    70. 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 September 19, 2007. Comments must refer to 
Docket No. RM07-3-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments. Comments may be filed either in electronic or paper format.
    71. Comments may 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 and commenters may attach 
additional files with supporting information in certain other file 
formats. Commenters filing electronically do not need to make a paper 
filing. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Office of the Secretary, 888 First 
Street, NE., Washington, DC 20426.
    72. 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.

VII. Document Availability

    73. 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.
    74. 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.
    75. 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 direction of the Commission.
Kimberly D. Bose,
Secretary.
 [FR Doc. E7-16253 Filed 8-17-07; 8:45 am]

BILLING CODE 6717-01-P