Document ID: FERC-2012-1776-0001
Agency: ferc
Document Type: Proposed Rule
Title: Reliability Standard for Transmission Vegetation Management
Posted Date: 2012-10-24T04:00Z

[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Proposed Rules]
[Pages 64920-64935]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26112]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-4-000]

Revisions to Reliability Standard for Transmission Vegetation 
Management

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 
Commission proposes to approve Reliability Standard FAC-003-2 
(Transmission Vegetation Management), submitted by the North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization. The proposed Reliability Standard 
would expand the applicability of the standard to include overhead 
transmission lines that are operated below 200 kV, if they are either 
an element of an Interconnection Reliability Operating Limit or an 
element of a Major WECC Transfer Path. In addition, the proposed 
Reliability Standard incorporates a new minimum annual vegetation 
inspection requirement, and incorporates new minimum vegetation 
clearance distances into the text of the standard.
    The Commission also proposes to approve the three definitions, the 
implementation plan and the Violation Severity Levels associated with 
the proposed Reliability Standard. Finally, the Commission proposes to 
direct that NERC revise the Violation Risk Factor for Requirement R2, 
and approve the remainder of the Violation Risk Factors.

DATES: Comments are due December 24, 2012.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not a scanned format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT: 
Tom Bradish (Technical Information), Office of Electric Reliability, 
Division of Reliability Standards, Federal Energy Regulatory 
Commission, 1800 Dual Highway, Suite 201, Hagerstown, MD 21740, 
Telephone: (301) 665-1391.
David O'Connor (Technical Information), Office of Electric Reliability, 
Division of Logistics & Security, Federal Energy Regulatory Commission, 
888 First Street NE., Washington, DC 20426, Telephone: (202) 502-6695.
Julie Greenisen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-6362.

SUPPLEMENTARY INFORMATION: 

Notice of Proposed Rulemaking

Issued October 18, 2012.

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission proposes to approve Reliability Standard FAC-003-2 
(Transmission Vegetation Management), submitted by the North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization (ERO). Proposed Reliability Standard 
FAC-003-2 modifies the currently effective standard, FAC-003-1 (the 
``Version 1'' standard). The proposed modifications, in part, respond 
to certain Commission directives in Order No. 693, in which the 
Commission approved currently-effective Reliability Standard FAC-003-
1.\2\
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    \1\ 16 U.S.C. 824o (2006).
    \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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    2. Proposed Reliability Standard FAC-003-2 has a number of features 
that make it an improvement over the Version 1 standard. For example, 
like Version 1, the proposed Reliability Standard would apply to all 
overhead transmission lines operated at or above 200 kV, but unlike 
Version 1, it would explicitly apply to any lower voltage overhead 
transmission line that is either an element of an Interconnection 
Reliability Operating Limit (IROL) or an element of a Major WECC 
Transfer Path.\3\ This is a new class of

[[Page 64921]]

transmission lines not previously required to comply with the Standard. 
The proposed Reliability Standard would also make explicit a 
transmission owner's obligation to prevent an encroachment into the 
minimum vegetation clearance distance (MVCD) for a line subject to the 
standard, regardless of whether that encroachment results in a 
sustained outage or fault.\4\ Also, for the first time, the proposed 
Reliability Standard would require transmission owners to annually 
inspect all transmission lines subject to the standard and to complete 
100 percent of their annual vegetation work plan. The proposed 
Reliability Standard also incorporates the MVCDs into the text of the 
standard, and does not rely on clearance distances from an outside 
reference, as is the case with the currently-effective Version 1 
standard. We believe these beneficial provisions, and others discussed 
below, support our proposal to approve FAC-003-2.
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    \3\ NERC defines ``IROL'' as ``[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.'' NERC defines ``System Operating Limit'' as 
``[t]he value (such as MW, MVar, Amperes, Frequency or Volts) that 
satisfies the most limiting of the prescribed operating criteria for 
a specified system configuration to ensure operation within 
acceptable reliability criteria.'' See NERC Glossary of Terms Used 
in Reliability Standards (NERC Glossary) at 26, 48. The Western 
Electric Coordinating Council maintains a listing of Major WECC 
Transfer Paths, available at http://www.wecc.biz/Standards/Development/WECC-0091/Shared Documents/WECC-0091 Table Major Paths 
4-28-08.doc.
    \4\ See Reliability Standard FAC-003-2, Requirements R1 and R2; 
see also Petition of the North American Electric Reliability 
Corporation for Approval of Proposed Reliability Standard FAC-003-
2--Transmission Vegetation Management at 4, 6 (NERC Petition). NERC 
proposes to define MVCD as ``the calculated minimum distance stated 
in feet (meters) to prevent flash-over between conductors and 
vegetation, for various altitudes and operating voltages.'' Id. at 
2.
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    3. A recurring cause in many blackouts has been vegetation-related 
outages. In fact one of the initiating causes of the 2003 Northeast 
blackout was inadequate vegetation management practices that led to 
tree contact.\5\ Further, NERC has identified a focus on preventing 
non-random equipment outages such as those caused by vegetation as a 
top priority that will most likely have a positive impact on Bulk-Power 
System reliability.\6\ We also note that industry has made important 
strides in reducing the instances of vegetation contact.\7\ We believe 
that the revised FAC-003 standard we propose to approve in this 
rulemaking, together with a continued focus by industry on best 
practices for vegetation management, will serve to enhance the 
reliability of the Bulk-Power System. While we propose to approve 
NERC's use of the Gallet equation to determine the minimum vegetation 
clearing distances, we believe it is important that NERC develop 
empirical evidence that either confirms the MVCD values or gives reason 
to revisit the Reliability Standard. Accordingly, consistent with the 
activity that NERC has already initiated, the Commission proposes to 
direct that NERC conduct or commission testing to obtain empirical data 
and submit a report to the Commission providing the results of the 
testing.
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    \5\ See U.S.-Canada Power System Outage Task Force, Final Report 
on the August 14, 2003 Blackout in the United States and Canada: 
Causes and Recommendations at 18, 57-64 (April 2004) (2003 Blackout 
Report).
    \6\ See Gerry Cauley written remarks for November 29, 2011 
Reliability Technical Conference at 1, 4 and 5 (Docket No. AD12-1-
000).
    \7\ See, e.g., NERC's Second Quarter 2012 Vegetation-Related 
Transmission Outage Report at 6-7, available at http://www.nerc.com/fileUploads/File/Compliance/2Q2012_Vegetation%20Report_FINAL%20DRAFT.pdf.
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    4. We also propose to approve the three new or revised definitions 
associated with the proposed Reliability Standard for inclusion in 
NERC's Glossary. Specifically, we propose to approve the changes in the 
definition of ``Right-of-Way (ROW)'' and ``Vegetation Inspection,'' as 
well as the addition of the term ``Minimum Vegetation Clearance 
Distance (MVCD)'' as defined in NERC's petition. We also propose to 
approve NERC's implementation plan for FAC-003-2.
    5. While we believe that the proposed Reliability Standard will 
enhance reliability by requiring sub-200 kV transmission lines that are 
elements of an IROL or Major WECC Transfer Path to comply with its 
requirements, we seek comment on how NERC will ensure that IROLs are 
properly designated, as discussed in detail below. In addition, while 
we agree that a number of the proposed modifications clarify and make 
more explicit the transmission owner's obligations, we seek comment 
with regard to the enforceability of certain provisions.
    6. We do not believe, however, that NERC has adequately supported 
the assignment of a ``medium'' Violation Risk Factor to Requirement R2, 
which pertains to preventing vegetation encroachments into the MVCD of 
transmission lines operated at 200 kV and above, but which are not part 
of an IROL or a Major WECC Transfer Path. As discussed later, system 
events have originated from non-IROL facilities. Accordingly, as 
discussed below, we propose to direct that NERC submit a modification, 
within 60 days of the effective date of the Final Rule, assigning a 
``high'' Violation Risk Factor for violations of Requirement R2.

I. Background

A. Section 215 of the FPA

    7. Section 215 of the FPA requires the Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval. Once approved, the Reliability 
Standards may be enforced by the ERO subject to Commission oversight, 
or by the Commission independently.\8\ Pursuant to the requirements of 
FPA section 215, the Commission established a process to select and 
certify an ERO \9\ and, subsequently, certified NERC as the ERO.\10\
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    \8\ See 16 U.S.C. 824o(e)(3).
    \9\ 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).
    \10\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006) 
(certifying NERC as the ERO responsible for the development and 
enforcement of mandatory Reliability Standards), aff'd sub nom. 
Alcoa Inc. v. FERC, 564 F.3d 1342 (DC Cir. 2009).
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B. Reliability Standard FAC-003-1

    8. Currently-effective Reliability Standard FAC-003-1 is applicable 
to transmission owners. The requirements of the Version 1 standard 
apply to (1) all transmission lines operated at 200 kV or above, and 
(2) lower-voltage lines designated as ``critical to the reliability of 
the electric system'' by a Regional Entity.
    9. Currently-effective FAC-003-1 contains four requirements. 
Requirement R1 requires each transmission owner to prepare, and keep 
current, a transmission vegetation management program (TVMP) that 
includes, inter alia, a Clearance 1 distance to be achieved at the time 
of vegetation management work, and a Clearance 2 distance to be 
maintained at all times. The Clearance 2 distance is set by each 
transmission owner at a level necessary to prevent flashover, but must 
be no less than the clearance distances established in the Institute of 
Electric and Electronics Engineers (IEEE) Standard 516-2003 (Guide for 
Maintenance Methods on Energized Power Lines). The Clearance 1 
distances are established by each transmission owner, and the only 
numerical criterion under the current standard is that the ``Clearance 
1 distances shall be greater than those defined by Clearance 2.'' \11\ 
Further, Requirement R1.3 requires that ``[a]ll personnel directly 
involved in the design and implementation of the TVMP shall hold 
appropriate

[[Page 64922]]

qualifications and training, as defined by the Transmission Owner, to 
perform their duties.''
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    \11\ FAC-003-1, R1.2.1.
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    10. Requirement R2 of the Version 1 standard requires that each 
transmission owner develop and implement an ``annual plan for 
vegetation management work,'' allowing flexibility to adjust to 
``changing conditions.'' Pursuant to Requirement R3, transmission 
owners must report quarterly to the relevant Regional Entity 
``sustained transmission line outages * * * caused by vegetation.'' 
Requirement R4 requires the Regional Entity to report the outage 
information to NERC.

C. Order No. 693 Discussion Regarding Vegetation Management

    11. On March 16, 2007, in Order No. 693, the Commission approved 83 
of 107 proposed Reliability Standards pursuant to FPA section 215(d), 
including currently-effective FAC-003-1.\12\ In addition, pursuant to 
section 215(d)(5) of the FPA, the Commission directed NERC to develop 
modifications to FAC-003-1 to address certain issues identified by the 
Commission, discussed below.
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    \12\ See Order No. 693, FERC Stats. & Regs. ] 31,242 at P 735.
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    12. In the Notice of Proposed Rulemaking (NOPR) that preceded Order 
No. 693, the Commission proposed two directives requiring modification 
of NERC's proposed standard pursuant to section 215(d)(5) of the 
FPA.\13\ The first would have directed NERC to develop a minimum 
vegetation inspection cycle, and the second would have required NERC to 
remove the standard's general limitation on applicability to 
transmission lines operated at 200 kV and above.\14\ In Order No. 693, 
the Commission decided not to require either modification at that time, 
but continued to express its concern about the standard's limited 
applicability and the lack of a minimum vegetation inspection 
requirement.
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    \13\ Mandatory Reliability Standards for the Bulk Power System, 
Notice of Proposed Rulemaking, 71 FR 64,770 (Nov. 3, 2006), FERC 
Stats. & Regs., Proposed Regulations 2004-2007 ] 32,608, at P 387 
(2006).
    \14\ Id.
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    13. The Commission instead required NERC to address a modification 
to the applicability of the standard through its Standards development 
process, directing NERC to ``modify [FAC-003-1] to apply to Bulk-Power 
System transmission lines that have an impact on reliability as 
determined by the ERO.'' \15\ In doing so, the Commission stated that 
it supported the ``suggestions by [certain commenters] to limit 
applicability to lower voltage lines associated with IROL'' and noted 
that ``these suggestions should be part of the input to the Reliability 
Standards development process.'' \16\ Finally, in response to concerns 
raised about the cost of compliance with the standard, the Commission 
explained that the ERO must ``develop an acceptable definition that 
covers facilities that impact reliability but balances extending the 
applicability of this standard against unreasonably increasing the 
burden on transmission owners.'' \17\
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    \15\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 706.
    \16\ Id.
    \17\ Id. P 708.
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    14. Similarly, while the Commission decided not to require NERC to 
submit a modification to FAC-003-1 to incorporate a minimum vegetation 
inspection cycle as part of Order No. 693, the Commission noted that it 
``continues to be concerned with leaving complete discretion to the 
transmission owners in determining inspection cycles.\18\ The 
Commission also rejected the notion that incorporating such a minimum 
requirement would lead to a ``lowest common denominator'' and thereby 
potentially reduce the frequency of inspections for transmission owners 
with aggressive inspection cycles.\19\ Although the Commission did not 
require a minimum inspection requirement as part of the standard, it 
directed NERC ``to develop compliance audit procedures to identify 
appropriate inspection cycles based on local factors.'' \20\
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    \18\ Id. P 721.
    \19\ Id. P 720.
    \20\ Id. P 735.
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    15. With respect to minimum vegetation clearances distances, the 
Commission approved FAC-003-1's general approach and ``reaffirm[ed] its 
interpretation that FAC-003-1 requires sufficient clearances to prevent 
outages due to vegetation management practices under all applicable 
conditions.'' \21\ However, the Commission directed NERC to ``develop a 
Reliability Standard that defines the minimum clearance needed to avoid 
sustained vegetation-related outages that would apply to transmission 
lines crossing both federal and non-federal land'' \22\ and 
``decline[d] to endorse the use of IEEE 516 as the only minimum 
clearance.'' \23\
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    \21\ Id. P 729.
    \22\ Id. P 732.
    \23\ Id. P 731.
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    16. Finally, the Commission directed NERC to address certain 
commenters' suggestion that, for purposes of the FAC-003 Reliability 
Standard, rights-of-way should be defined to encompass the required 
clearance area, and not the entire legal right-of-way, particularly 
where the legal right-of-way may greatly exceed the area needed for 
effective vegetation management.\24\
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    \24\ Id. P 734.
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II. NERC Petition and Proposed Reliability Standard FAC-003-2

A. NERC Petition

    17. In its petition, NERC maintains that proposed Reliability 
Standard FAC-003-2 is just and reasonable, as the proposal meets or 
exceeds each of the criteria the Commission has identified for 
evaluating a proposed Reliability Standard.\25\ NERC asserts that the 
proposed Reliability Standard ``achieves the specific reliability goal 
of maintaining a reliable electric transmission system by using a 
defense-in-depth strategy to manage vegetation located on transmission 
ROW and minimize encroachments from vegetation located adjacent to the 
ROW, thus preventing the risk of those vegetation-related outages that 
could lead to Cascading.'' \26\ Moreover, NERC maintains that the 
proposed Reliability Standard contains a technically sound method to 
achieve that goal, as it requires transmission owners to prevent 
vegetation from encroaching into the flashover distances, requires 
consideration of conductor movement and growth rates (among other 
things), requires annual inspections, and requires completion of annual 
work needed to prevent encroachments. NERC asserts that FAC-003-2 is 
clear and unambiguous as to the requirements and penalties, and 
contains clear and objective measures for compliance.\27\
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    \25\ See NERC Petition at 44.
    \26\ Id. at 45.
    \27\ Id. at 46-48; see also id. at 33-40.
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    18. Further, NERC maintains that proposed Reliability Standard FAC-
003-2 represents an improvement over the currently-effective standard, 
as FAC-003-2 enhances reliability, facilitates enforceability, and 
preserves necessary flexibility for transmission owners to address 
local vegetation conditions.\28\ NERC asserts that the proposed 
Reliability Standard was developed with the shortcomings of the 
currently-effective standard, as identified in Order No. 693, in mind, 
including the directive to develop a standard that defines the minimum 
clearance needed to avoid sustained vegetation-related outages without 
relying on IEEE-516 to set these

[[Page 64923]]

clearances.\29\ NERC states that the Standard Drafting Team (SDT) 
considered four potential methods for deriving flashover distances for 
various voltages and altitudes, and of those, selected the ``Gallet 
equation'' because the ``information to support the development of the 
standard was readily available in an industry recognized reference.'' 
\30\ NERC asserts that the ``distances derived using the Gallet 
Equation result in the probability of flashover in the range of 
10-6'' (one in a million).\31\
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    \28\ Id. at 3, 44-52.
    \29\ See id. at 5 (citing Order No. 693, FERC Stats. & Regs. ] 
31,242 at PP 731-732).
    \30\ Id., see also Ex. I, Appx. 1.
    \31\ NERC Petition at 6. As NERC explained in its response to 
Question 1 of the Commission's Data Requests:
    The probability of a flashover, given a drop in voltage to 85% 
of the `Critical Flashover Voltage (CFO),' is roughly .135% (or 
approximately 10-3). This value represents the 
probability of a flashover, assuming the specified CFO is achieved 
or exceeded.
    However, this is not the only event being considered when 
attempting to model the probability of a vegetation flashover. The 
probability of achieving a maximum switching overvoltage (``Peak 
Voltage'') in excess of the CFO must also be considered. This is 
shown on page 40 in equation 6 of the Technical Reference Document, 
and is specified there as roughly 0.135% (also approximately 
10-3).
    In other words, the conditional probability of flashover given 
that the 85% CFO has been exceeded is approximately 10-3. 
However, the probability of the CFO being exceeded is also 
10-3. As these can be treated as two independent events, 
the probability is statistically ``joint'' (the probability of 
exceeding the CFO and the probability of a flashover given the 
exceeding of the CFO are independent events). Accordingly, the two 
probabilities are to be multiplied, yielding a probability on the 
order of magnitude of approximately 10-6.
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    19. NERC states that proposed FAC-003-2 continues to give 
transmission owners the necessary discretion to determine how to 
achieve the required clearances,\32\ but is more stringent than the 
currently effective standard because it ``explicitly treat[s] any 
encroachment into the MVCD (without contact, with a flashover, with a 
momentary outage, or with a sustained outage) as a violation of the 
standard.'' \33\ According to NERC, the proposed Reliability Standard 
incorporates a new requirement to perform an annual inspection of all 
applicable lines and is ``much more explicit regarding what actions 
must be taken to support vegetation management and reliability.'' \34\
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    \32\ NERC Petition at 6, 19-22.
    \33\ Id. at 6.
    \34\ Id.
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    20. NERC states that proposed FAC-003-2 was designed to address 
directives from Order No. 693, including the directives requiring that 
NERC address proposed modifications to expand the applicability of FAC-
003-1, evaluate and consider specific proposals made by parties 
commenting on FAC-003-1, develop compliance audit procedures to 
identify appropriate inspection cycles, define the minimum clearances 
needed to avoid sustained vegetation-related outages applicable to 
transmission lines crossing both federal and non-federal land, and 
address suggestions that rights-of-way should be defined to encompass 
required clearance areas only. NERC also explains that proposed FAC-
003-2 is one of the first Reliability Standards developed using NERC's 
``results-based'' approach and, therefore, includes some restructuring 
of the standard to focus on completing objectives and achieving goals, 
as well as to ensure that enforcement is undertaken in a consistent and 
non-preferential manner.\35\
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    \35\ Id. at 7.
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    21. NERC proposes an implementation plan for FAC-003-2.\36\ For 
individual transmission lines that become subject to the vegetation 
management standard for the first time following designation as an 
element of an IROL or Major WECC Transfer Path, NERC asks that the 
requirements become effective the latter of (1) twelve months after the 
date of such designation, or (2) January 1 of the planning year when 
the line is forecast to become an element of an IROL or Major WECC 
Transfer Path.\37\
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    \36\ Id. at Ex. B.
    \37\ In considering this aspect of the proposed implementation 
plan, we assume that NERC asks that the proposed standard become 
effective on the ``later'' of alternative (1) or (2), rather than 
the ``latter.''
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    22. Accordingly, NERC requests that the Commission approve proposed 
FAC-003-2 and the associated Violation Risk Factors and Violation 
Severity Levels. NERC requests as an effective date for the Reliability 
Standard, ``the first day of the first calendar quarter that is twelve 
months following the effective date of a Final Rule in this docket.'' 
\38\ NERC further requests: (1) retirement of the Version 1 standard 
concurrent with the effective date of FAC-003-2; (2) approval of three 
definitions for inclusion in the NERC Glossary; and (3) approval of the 
implementation plan for proposed FAC-003-2.
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    \38\ Id. at 68.
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B. Proposed Reliability Standard FAC-003-2 and NERC Explanation of 
Provisions

    23. The proposed Reliability Standard includes seven requirements.
    24. Requirements R1 and R2: Pursuant to Requirements R1 and R2, 
transmission owners must ``manage vegetation to prevent encroachments 
into the MVCD of its applicable line(s),'' and any encroachment is 
considered a violation of these requirements regardless of whether it 
results in a sustained outage.\39\ NERC characterizes this as a ``zero 
tolerance'' approach to vegetation management.\40\ Further, NERC 
maintains that these requirements represent an improvement over the 
currently effective Version 1 Standard because the proposed standard 
makes the requirement to prevent encroachments explicit, and because it 
incorporates specific clearance distances into the standard itself 
based on ``an established method for calculating the flashover distance 
for various voltages, altitudes, and atmospheric conditions.'' \41\
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    \39\ See Reliability Standard FAC-003-2, Requirements R1 and R2, 
subsection 1 (transmission owners must manage vegetation to prevent, 
inter alia, ``an encroachment into the MVCD, as shown in FAC-003-
Table 2, observed in Real-Time, absent a Sustained Outage'').
    \40\ NERC Petition at 6.
    \41\ Id. at 22.
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    25. NERC has bifurcated the basic requirement to prevent 
encroachment into the MVCDs. Requirement R1 applies to IROL elements 
and Major WECC Transfer Path elements and is assigned a high Violation 
Risk Factor. Requirement R2 sets forth the same substantive 
requirements but pertains to non-IROL and non-Major WECC Transfer Path 
elements and is assigned a medium Violation Risk Factor. NERC explains 
that it bifurcated the requirement to ``eliminate commingling of higher 
risk reliability objectives and lesser risk reliability objectives.'' 
\42\
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    \42\ Id. at 22-23.
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    26. In addition, NERC has included a footnote describing certain 
conditions or scenarios, outside the transmission owner's control, 
where an encroachment would be exempt from Requirements R1 and R2, 
including natural disasters and certain human or animal activity.\43\ 
As NERC explains, the footnote ``does not exempt the Transmission Owner 
from responsibility for encroachments caused by activities performed by 
their own employees or contractors, but it does exempt them from 
responsibility when other human activities, animal activities, or other 
environmental conditions outside their control lead to an encroachment 
that otherwise would not have occurred.'' \44\
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    \43\ See proposed Reliability Standard FAC-003-2, n.2.
    \44\ NERC Petition at 23.
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    27. Requirement R3: Requirement R3 requires a transmission owner to 
have ``documented maintenance strategies or procedures or processes or

[[Page 64924]]

specifications it uses to prevent the encroachment of vegetation into 
the MVCD of its applicable lines.'' Requirement R3 requires that these 
strategies take into account movement of conductors (sag and sway), and 
the inter-relationship between vegetation growth rates, vegetation 
control methods, and inspection frequency. While NERC acknowledges that 
this requirement does not include the currently effective standard's 
requirement to establish a Clearance 1 as part of the required TVMP, 
NERC notes that Clearance 1 levels are currently left largely to the 
discretion of the transmission owner and that the only numerical 
criterion for Clearance 1 is that it ``must be some undefined amount 
larger than the minimum flashover distance [Clearance 2].'' \45\ NERC 
maintains that the proposed standard's requirement to avoid 
encroachments after taking into account conductor movement, vegetation 
growth rates, etc., ``still retains the same obligations defined by 
`Clearance 1.''' \46\
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    \45\ Id. at 20.
    \46\ Id.
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    28. Requirement R4: Requirement R4 requires a transmission owner 
that has observed a vegetation condition likely to produce a fault to 
notify, ``without any intentional time delay,'' the appropriate control 
center with switching authority for that transmission line. NERC states 
that the proposed requirement is an improvement over the Version 1 
standard, in that it makes explicit the obligation to communicate 
imminent threats, rather than merely establish and document a process 
for doing so, as is currently required.\47\ In addition, NERC explains 
that the currently-effective Reliability Standard's requirement that 
the process allow for ``immediate'' notification was ``impractical at 
best,'' and was therefore replaced with the phrase ``without any 
intentional time delay,'' which still requires timely notification.
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    \47\ See id. at 25-26 (referencing Requirement R1.5 of FAC-003-
1).
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    29. Requirement R5: Requirement R5 requires a transmission owner 
constrained from performing vegetation management work needed to 
prevent a vegetation encroachment into the MVCD prior to implementation 
of the next annual work plan to take corrective action to prevent such 
encroachments. NERC contends that this proposed requirement represents 
an improvement over the currently-effective provision, Requirement 
R1.4, which merely requires the transmission owner to develop 
mitigation measures to address such circumstances, but does not 
affirmatively require the transmission owner to take corrective action. 
The proposed measures for determining compliance associated with 
proposed Requirement R5 provide examples of the kinds of corrective 
actions expected, including increased monitoring, line de-ratings, and 
revised work orders.\48\
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    \48\ See id. at 24-25.
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    30. Requirement R6: Pursuant to Requirement R6, each transmission 
owner shall inspect 100 percent of its applicable lines at least once 
per year and with no more than 18 months between inspections on the 
same Right-of-Way. NERC maintains that the new requirement is ``an 
improvement to the standard that reduces risks,'' and notes that the 
currently effective standard allows the transmission owner to develop 
its own schedule for inspections (with no standard minimum time) and 
contains no explicit requirement that the transmission owner meet its 
established schedule.\49\
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    \49\ Id. at 17-18.
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    31. Requirement R7: Pursuant to Requirement R7, the transmission 
owner must complete 100 percent of its annual vegetation work plan, 
allowing for documented changes to the work plan as long as those 
modifications do not allow encroachment into the MVCD. NERC argues that 
this requirement represents an improvement over the currently effective 
standard because the current Requirement (R2) ``does not mandate that 
entities plan to prevent encroachments into the MVCD, but simply that 
they implement whatever is included in the plan.'' \50\
---------------------------------------------------------------------------

    \50\ Id. at 28.
---------------------------------------------------------------------------

    32. NERC explains in its petition that certain requirements in the 
currently-effective Reliability Standard have not been translated into 
a requirement in the proposed standard. In particular, NERC notes that 
the Version 1 standard's reporting requirements, R3 and R4, have been 
moved into the compliance section of proposed standard FAC-003-2.\51\ 
NERC maintains that the reporting requirement remains enforceable under 
NERC's Rules of Procedure, which gives NERC authority, inter alia, to 
require entities to provide ``such information as is necessary to 
monitor compliance with the reliability standards.'' \52\ NERC further 
notes that it can take action against any entity that fails to comply 
with such a reporting requirement (which would amount to a failure to 
comply with a NERC Rule of Procedure) pursuant to NERC Rule of 
Procedure Section 100, and that it is obligated to notify the 
applicable governmental authorities of the entity's failure to 
comply.\53\
---------------------------------------------------------------------------

    \51\ Id. at 29-31.
    \52\ Id. at 31 (quoting NERC Rule of Procedure Section 400.3). 
This provision actually is located at Section 401.3.
    \53\ See id. at 31-32.
---------------------------------------------------------------------------

    33. In addition, NERC acknowledges that the proposed standard no 
longer contains a requirement that personnel involved in the design and 
implementation of a vegetation management program have appropriate 
qualifications and training (currently set out in sub-requirement 
R1.3).\54\ According to NERC, this provision of the Version 1 standard 
is ``effectively meaningless,'' since ``appropriate'' qualifications 
and training are undefined and left entirely to the discretion of the 
transmission owner. Thus, NERC maintains that elimination of this sub-
requirement does not impact reliability.
---------------------------------------------------------------------------

    \54\ Id. at 23-24.
---------------------------------------------------------------------------

    34. NERC is also seeking to revise the definitions of Right-of-Way 
(ROW) and Vegetation Inspection, and to add a new definition for 
MVCD.\55\ NERC proposes that Right-of-Way be defined as the ``corridor 
of land under a transmission line(s) needed to operate the line(s),'' 
which may not exceed the Transmission Owner's legal rights but may be 
smaller. NERC proposes to modify ``Vegetation Inspection'' to allow 
both maintenance inspections and vegetation inspections to be performed 
concurrently. Finally, NERC proposes a new definition, ``MVCD,'' to be 
``[t]he calculated minimum distance stated in feet (meters) to prevent 
flash-over between conductors and vegetation, for various altitudes and 
operating voltages.''
---------------------------------------------------------------------------

    \55\ See NERC Petition, Ex. C.
---------------------------------------------------------------------------

    35. NERC explains in its petition how it will approach enforcement 
of each Requirement under FAC-003-2, noting that each Requirement has 
an associated compliance measure that identifies what is required and 
how the Requirement will be enforced. NERC explains, inter alia, that 
the measures for Requirements R1 and R2 require each transmission owner 
to have ``evidence that it managed vegetation to prevent encroachment 
into the MVCD,'' and to be able to produce records ``indicating the 
requirements were not violated.'' \56\ In order to show compliance with 
Requirement R3, NERC explains that a transmission owner will be 
``obligated to show documentation, and that documentation must be 
sufficient to satisfy the auditor that the information contained in 
that documentation is sufficient that the Transmission Owner can use it 
to prevent encroachment into the MVCD.'' \57\ Similarly, NERC explains

[[Page 64925]]

that ``entities will not be able to comply with [Requirement R7] 
without having a documented plan.'' \58\
---------------------------------------------------------------------------

    \56\ NERC Petition at 34.
    \57\ Id. at 35.
    \58\ Id. at 39.
---------------------------------------------------------------------------

    36. NERC asserts that it has addressed seven directives in Order 
No. 693 regarding NERC's vegetation management standard.\59\ First, 
NERC asserts that it has addressed the concerns in applying the 
vegetation management standard only to transmission lines that are 200 
kV or above.\60\ NERC notes that it has addressed that concern (and 
related directives) by extending the applicability of the proposed 
standard to overhead transmission lines that are either 200 kV and 
above, or less than 200 kV if the line is an element of an IROL or a 
Major WECC Transfer Path. In addition, NERC explains that it has 
developed an appropriate implementation plan for any new lines covered 
by the standard, thereby satisfying the Commission's directive to 
consider a delayed implementation date if lower-voltage facilities are 
included.\61\ NERC further maintains that it has addressed the 
Commission's concern about allowing transmission owners full discretion 
to set inspection schedules by requiring inspections at least once per 
year, has satisfied the Commission's directive to define minimum 
clearances for both federal and non-federal lands by adopting MVCDs 
that apply to lines on both federal and non-federal lands, and has 
satisfied the Commission's directive to consider whether modifications 
to the definition of Right-of-Way were necessary through the proposed 
revision to that definition.\62\
---------------------------------------------------------------------------

    \59\ See id. at 40-44.
    \60\ Id. at 40-42.
    \61\ Id. at 42-43.
    \62\ Id. at 43-44.
---------------------------------------------------------------------------

III. PNNL Report and Comments

A. PNNL Report

    37. As NERC explains in its petition, the Standard Drafting Team 
applied the ``Gallet equation'' to derive the MVCDs set forth in FAC-
003-2. NERC describes the Gallet equation as a ``well-known method of 
computing the required strike distance for proper insulation 
coordination.'' \63\
---------------------------------------------------------------------------

    \63\ NERC Petition, Ex. I (Technical Reference Document) at 39.
---------------------------------------------------------------------------

    38. The Commission's Office of Electric Reliability retained the 
Pacific Northwest National Laboratory (PNNL) to undertake an ``analysis 
of the mathematics and documentation of the technical justification 
behind the application of the Gallet equation and the assumptions used 
in the technical reference paper [Exh. A of NERC's petition].'' \64\
---------------------------------------------------------------------------

    \64\ See April 23, 2012 Notice Inviting Comments on Report.
---------------------------------------------------------------------------

    39. PNNL's final Report on the Applicability of the ``Gallet 
Equation'' to the Vegetation Clearances of NERC Reliability Standard 
FAC-003-2 (PNNL Report) was posted as part of the record in this docket 
on April 23, 2012, along with a notice inviting comment on the PNNL 
Report within 30 days.
    40. While the PNNL Report points out benefits of the use of the 
Gallet equation, it raises questions about potential inconsistencies in 
NERC's filing.\65\ The PNNL Report raises concerns about NERC's use of 
an assumed gap factor of 1.3, asserting that that figure has not been 
adequately supported for use with vegetation and that there is no 
evidence that statistics relating to tower design are usable with 
vegetation.\66\ Instead, the PNNL Report suggests that a ``rod-plane 
gap and tree branch might have about the same gap factor (i.e., k=1),'' 
\67\ but does not provide any other indication of an appropriate gap 
factor for use with vegetation.
---------------------------------------------------------------------------

    \65\ PNNL Report at iv-v (``The equation [the Gallet equation] 
is a good and simple-to-use way to solve a problem made difficult by 
the nonlinear interactions of the variables. However, in spite of 
the evident usefulness of the equation, inconsistencies are found in 
the NERC filing * * * .'').
    \66\ See id. at 11-13, 19.
    \67\ PNNL Report at 13.
---------------------------------------------------------------------------

    41. The PNNL Report further asserts that without NERC's assumption 
``that the gap between a power line and growing vegetation is stronger 
(by 30%) than the reference gap used in developing the Gallet 
equation,'' the minimum distances calculated would be about 50% 
larger.\68\
---------------------------------------------------------------------------

    \68\ Id. at v.
---------------------------------------------------------------------------

    42. The PNNL Report also asserts that ``[t]hough there is no 
obvious way to relate tower clearance to vegetation clearance,'' the 
proposed MVCDs in FAC-003-2 are small when compared to transmission 
tower design clearances:

    The values for tower clearance for a line at 500 kV in the 
Transmission Line Reference Book range from 8.3 ft. to over 17 ft. 
The NERC filing requires a gap less than 6 ft for the same voltage, 
even at high altitude. There is no reason to suppose that a tree 
could safely be allowed so much closer to a line (less than 6 ft) 
than a tower.\69\
---------------------------------------------------------------------------

    \69\ Id. at 19.
---------------------------------------------------------------------------

B. Comments in Response to PNNL Report

    43. Nine sets of comments were filed in response to the PNNL 
Report, with timely submissions made by NERC, the Canadian Electricity 
Association, American Electric Power (AEP), Duke Energy Corporation 
(Duke), Oncor Electric Delivery Company LLC (Oncor), Kansas City Power 
& Light and KCP&L Greater Missouri Operations Company (KCP&L), Arizona 
Public Service Company (APS), and Salt River Project Agricultural 
Improvement and Power District (Salt River), as well as a joint 
submission by the Edison Electric Institute, the American Public Power 
Association, the National Rural Electric Cooperative Association and 
the Electric Power Supply Association (collectively, the Trade 
Associations).
    44. In its comments, NERC asserts that the PNNL Report ``(a) 
improperly juxtaposes data included in the FAC-003-2 Reliability 
Standard; (b) disregards NERC's justification regarding the selection 
of transient overvoltage calculations; (c) fails to consider joint 
probability of independent events when analyzing flashover probability; 
and (d) disagrees with the choice of gap factor for vegetation without 
providing any empirical evidence, scientific reasoning or expert 
consensus on what an appropriate gap factor should be.'' \70\
---------------------------------------------------------------------------

    \70\ NERC Comments on PNNL Report at 1-2 (NERC Comments).
---------------------------------------------------------------------------

    45. With regard to the assertion in the PNNL Report that there is 
no evidence that statistics relating to tower design are usable with 
vegetation, NERC explains the rationale for its use of the Gallet 
equation in some detail (discussed further in PP 47-48 below), and 
notes that the PNNL Report ``disagrees with [NERC's] choice of gap 
factor for vegetation without providing any empirical evidence, 
scientific reasoning, or expert consensus on what an appropriate gap 
factor should be.'' \71\ NERC explains that the Standard Drafting Team 
``relied on the scientific body of available knowledge and the opinions 
of experts (applied conservatively) currently working in the industry'' 
to support a gap factor of 1.3.\72\ By contrast, NERC asserts that 
``there is no justification for the suggestion that the gap factors for 
vegetation could be less than unity,'' and considers the PNNL Report's 
suggestion of a gap factor of 1.0 to be based ``purely on 
speculation.'' \73\
---------------------------------------------------------------------------

    \71\ Id. at 2.
    \72\ Id., Att. A at 8.
    \73\ Id.
---------------------------------------------------------------------------

    46. With regard to PNNL's assertion that ``inconsistencies are 
found in NERC's filing'', NERC states that the ``inconsistencies'' 
identified by the PNNL Report in NERC's Technical Reference Document 
result from PNNL erroneously comparing two separate sets

[[Page 64926]]

of data developed for different purposes. According to NERC, one set of 
data was developed to demonstrate the consistency between the clearance 
values set out in the IEEE-516 standard and the values generated using 
the Gallet equation when using similar assumptions as those used in the 
IEEE-516 standard. The second set of data was designed to generate 
appropriate clearance values using the Gallet equation and ``a set of 
assumptions determined by the [SDT] to be consistent with the purposes 
of the standard.'' \74\ NERC responds that PNNL's comparison of the two 
sets of data is therefore ``misleading.'' \75\
---------------------------------------------------------------------------

    \74\ Id., Att. A at 2.
    \75\ Id.
---------------------------------------------------------------------------

    47. With respect to the gap factor, NERC maintains that it relied 
on a widely known and regarded source for determining the appropriate 
gap factor, which indicates that an appropriate gap factor for a 
conductor-to-lateral structure configuration is in the range of 1.25 to 
1.40.\76\ Specifically, NERC explains that the Standard Drafting Team 
(SDT) relied on the ``widely regarded'' Insulation Coordination for 
Power Systems, by Andrew Hileman, to develop the proposed gap factor of 
1.3.\77\ NERC indicated that there is a range of gap factors that could 
be used in the Gallet equation, each factor designed to represent the 
difference in voltage withstand capability \78\ between a given object, 
i.e., the transmission wire or conductor, and a reference case, i.e., 
the object for which the distance from the wire must be established. 
The gap factor varies based on the nature of the ``gap configuration'' 
of the reference case. In its response to the PNNL Report, NERC 
provided the following table showing the range of gap factors (shown as 
kg in the table below) based on the gap configuration:
---------------------------------------------------------------------------

    \76\ Id., Att. A at 6-7.
    \77\ Id. (citing Andrew Hileman, Insulation Coordination for 
Power Systems 167 (Marcel Dekker, New York, NY 1999)).
    \78\ The PNNL Report defines ``withstand'' in this context as 
``[t]he capability of an insulation system to function as an 
insulator when a high voltage is applied.'' PNNL Report at 1.

      Typical Value of Gap Factors kg for Phase-Ground Insulations
------------------------------------------------------------------------
                                                           Typical value
            Gap configuration               Range of kg        of kg
------------------------------------------------------------------------
Rod-plane...............................            1.00            1.00
Rod-rod (vertical)......................       1.25-1.35            1.30
Rod-rod (horizontal)....................       1.25-1.45            1.35
Conductor-lateral structure.............       1.25-1.40            1.30
Conductor-lower rod.....................       1.40-1.60            1.50
------------------------------------------------------------------------

    48. NERC then states that use of a gap factor of 1.3 is 
conservative:

    It is worth noting that the gap factors for many shapes that 
could approximate vegetation are even higher than the 1.3 used in 
FAC-003-2, with ranges that include values as high as 1.6. Hileman 
notes that in regards to the substation environment (which includes 
many objects, conducting and non-conducting, with varying shapes and 
configurations): ``Practically, the lowest gap factor in the 
substations is 1.3, which normally is conservative.''
* * * * *
    [T]he [SDT] did not rely on any specific properties inherent in 
trees, rather, the [SDT] conservatively assumed that vegetation had 
the same properties as metal. The [SDT] elected to use the 
``typical'' value for ``conductor to lateral structure.'' Unlike the 
other examples given, which specify a ``typical'' value that is 
equivalent to the midpoint of the range, this value (1.3) is within 
the conservative third of the range (1.25-1.4).\79\
---------------------------------------------------------------------------

    \79\ Id. at 7.

    49. In response to the assertion in the PNNL Report that ``[t]here 
is no reason to suppose that a tree could safely be allowed so much 
closer to a line * * * than a tower'' (see P 42, supra), NERC explains 
in its comments why NERC's proposed MVCDs may not be directly 
---------------------------------------------------------------------------
comparable to distances based on tower design:

    [C]are must be taken when making an interpretation of the 
tabular data, as the original survey participants may have answered 
the questions in a general context involving multiple structure 
designs. The final structure design parameters provided in the Red 
Book include the CFO gap plus other factors (such as insulator 
geometry, personnel safety and extreme lightning events). 
Accordingly, they should not be considered the final word with 
regard to Vegetation Management, as those distances were established 
to address a number of other issues. FAC-003-2 is not intended to 
mandate the parameters for all future line designs; it is focused 
solely on the distances necessary to mitigate the risk of vegetation 
related outages.

    50. In addition to providing a response to the technical issues 
raised by the PNNL Report, NERC argues that the Commission is obligated 
under FPA section 215(d)(2) to give due weight to NERC's technical 
expertise with respect to the content of proposed standards.
    51. Trade Associations, Duke, Oncor and other commenters support 
NERC's technical analysis. AEP and Oncor agree with NERC that the PNNL 
report contains inappropriate comparisons of data NERC presented in its 
petition and supporting materials, and that if NERC's Gallet-generated 
numbers are compared to the distances calculated under IEEE-516, the 
``clearances determined by the two calculations are in fact closely 
aligned.'' \80\ AEP and Oncor further maintain that the PNNL Report 
does not offer a ``better alternative'' to the use of the Gallet 
equation, and that it does not dispute the Standard Drafting Team's 
rationale for its selection of transmission overvoltages.\81\ AEP and 
Oncor note that the PNNL Report acknowledges ``that the Gallet Equation 
is `a fair representation of the performance of an air gap of a few 
meters, a simple-to-use way to solve a problem made difficult by the 
nonlinear interactions of the variables' and that NERC has used the 
complete method that includes all the factors that go into the estimate 
of peak voltage.'' \82\ AEP and Oncor also assert that proposed FAC-
003-2, taken as a whole, will serve to improve the reliability of the 
system. AEP notes that the MVCDs included in Table 2 of the proposed 
Reliability Standard are merely the first piece of an overall strategy 
the transmission owner must develop to manage vegetation, and that the 
transmission owner must have documented strategies to prevent 
encroachments within all rated operating conditions, after taking into 
account sag, sway, and vegetative growth.
---------------------------------------------------------------------------

    \80\ AEP Comments and Oncor Comments at 2.
    \81\ Id.
    \82\ Id. at 3 (citing PNNL Report at 19).
---------------------------------------------------------------------------

    52. KCP&L comments that the PNNL Report should have ``included 
discussion regarding a correction factor

[[Page 64927]]

in the clearance calculation using the Gallet Equation due to the 
difference in the conductive properties of the metal rod compared to 
vegetation.'' \83\ KCP&L supports use of the Gallet equation as an 
``improvement over the industry's current means of determining 
clearance distances.'' \84\
---------------------------------------------------------------------------

    \83\ KCP&L Comments at 2-3.
    \84\ Id. at 3. KCP&L also points out what it characterizes as a 
technical error in the PNNL Report related to the impact of multiple 
gaps on flashover probabilities, maintaining that in the example 
given by the PNNL Report, the flashover probability with 20 gaps 
should be 4% rather than 33%. Id.
---------------------------------------------------------------------------

    53. APS questions whether either the Gallet equation or the IEEE 
standard incorporated in currently-effective FAC-003-1 ``provides a 
demonstrable indicator of the flash-over distance between conductors 
and ground vegetation * * *, '' \85\ and accordingly suggests that the 
Commission ask the Department of Energy to experimentally verify the 
distances derived from the IEEE and Gallet methodologies. APS takes the 
position that, until such data are developed, the Gallet methodology 
``seems more reasonable'' than the IEEE standard as a basis for 
developing a clearance requirement.\86\
---------------------------------------------------------------------------

    \85\ APS Comments at 2.
    \86\ Id.
---------------------------------------------------------------------------

    54. Salt River supports the PNNL Report's analysis, noting that it 
has questioned the applicability of the Gallet equation for vegetation 
clearances throughout the development of FAC-003-2. Salt River further 
agrees that there is insufficient evidence to suggest that a tree could 
safely be allowed much closer to a line than a tower. Finally, Salt 
River supports the experimental verification of any proposed guidelines 
regarding required vegetation clearances.

C. NERC Response to Data Request

    55. On May 4, 2012, Commission staff issued data requests to NERC. 
NERC submitted a timely response to the data requests on May 25, 2012, 
addressing matters such as the correct understanding and enforceability 
of certain provisions of the proposed Reliability Standard. Relevant 
elements of NERC's response to the data requests are discussed further 
below.

IV. Discussion

    56. Pursuant to section 215(d) of the FPA, we propose to approve 
Reliability Standard FAC-003-2, including the associated new and 
revised definitions and implementation plan, as just, reasonable, not 
unduly discriminatory or preferential, and in the public interest. As 
discussed in Section A below, we believe the proposed Reliability 
Standard will enhance reliability and satisfies a number of the 
outstanding directives from Order No. 693. In addition, we seek further 
comment on certain aspects of the proposed Reliability Standard. 
Accordingly, we discuss the following matters below: (A) proposal to 
approve FAC-003-2; (B) applicability of the standard to sub-200 kV 
transmission lines; (C) clearance distances; (D) appropriate Violation 
Risk Factor for Requirement R2; (E) enforcement issues; (F) inclusion 
of reporting obligations as a compliance measure; and (G) proposed 
definitions.

A. The Commission Proposes to Approve FAC-003-2

    57. We believe that proposed standard FAC-003-2 is an improvement 
over the currently-effective Version 1 standard, will support 
vegetation management practices that can effectively protect against 
vegetation-related transmission outages, and satisfies a number of the 
outstanding directives from Order No. 693. As discussed earlier, NERC 
has explained how many of the Requirements improve upon the currently-
effective Version 1 standard. In support of our proposal to approve 
FAC-003-2, we highlight several of these improvements. For example, in 
accordance with our directives in Order No. 693, as discussed further 
below, NERC has expanded the applicability of the Reliability Standard 
so that it now applies not only to all transmission lines above 200 kV, 
but also to transmission lines operated below 200 kV if they are an 
element of an IROL or an element of a Major WECC Transfer Path.
    58. In addition, NERC has incorporated minimum clearance distances 
into the text of the Reliability Standard, and no longer includes a 
required clearance distance based on distances set by IEEE-516 which, 
as indicated in Order No. 693, served a different purpose than 
vegetation management. Proposed FAC-003-2 requires a transmission owner 
to prevent an encroachment into the MVCD, even if the encroachment does 
not result in a flashover or fault. As NERC explains, ``FAC-003-2 
presents a `zero-tolerance' approach to vegetation management, 
explicitly treating any encroachment into the MVCD * * * as a violation 
* * *.'' \87\ Finally, encroachments must be prevented under all rated 
operating conditions, and must take into account sag and sway of the 
line, as well as vegetative growth rates and frequency of inspection 
and maintenance.
---------------------------------------------------------------------------

    \87\ NERC Petition at 6.
---------------------------------------------------------------------------

    59. While the Commission did not require NERC to adopt a minimum 
inspection cycle as part of Order No. 693, the Commission did express 
concern both prior to and as part of Order No. 693 that inspection 
cycles should not be left entirely to the discretion of the 
transmission owner. Accordingly, in Order No. 693, the Commission 
stated that:

    The Commission continues to be concerned with leaving complete 
discretion to the transmission owners in determining inspection 
cycles, which limits the effectiveness of the Reliability Standard. 
Accordingly, the Commission directs the ERO to develop compliance 
audit procedures * * * which would identify appropriate inspection 
cycles based on local factors. These inspections cycles are to be 
used in compliance auditing of FAC-003-1 by the ERO or Regional 
Entity to ensure such inspection cycles and vegetation management 
requirements are properly met by the responsible entities.\88\
---------------------------------------------------------------------------

    \88\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 721.

NERC has addressed this concern by incorporating a minimum inspection 
cycle requirement in the proposed Reliability Standard (at least once 
per calendar year and no more than 18 months between inspections).\89\
---------------------------------------------------------------------------

    \89\ See NERC Petition at 43.
---------------------------------------------------------------------------

    60. Thus, based on the overall benefits of proposed FAC-003-2, we 
propose to approve Reliability Standard FAC-003-2 and propose to direct 
a change in the VRF level assigned to Requirement R2, as discussed 
further below.
    61. In considering whether to approve Reliability Standard FAC-003-
2, we give due weight to NERC's technical expertise. In light of our 
proposal to approve the proposed Reliability Standard, commenters' 
suggestions that we have failed to give due weight to NERC's technical 
expertise are moot. Below, however, we will discuss our substantive 
consideration of the proposed minimum clearance distances derived based 
on application of the Gallet equation and certain technical points 
raised by the PNNL Report and commenters.

B. Applicability

    62. The currently-effective Reliability Standard, FAC-003-1, is 
applicable to any transmission line operated at 200 kV and above, and 
to any line of lesser voltage designated by a Regional Entity \90\ as 
``critical to the reliability of

[[Page 64928]]

the electric system in the region.'' \91\ As discussed above, the 
Commission accepted this approach in Order No. 693, but directed NERC 
to address a modification to the applicability of the standard through 
its Reliability Standards development process:
---------------------------------------------------------------------------

    \90\ Reliability Standard FAC-003-1 refers to Regional 
Reliability Organizations (RROs), the precursors to Regional 
Entities.
    \91\ To date, no Regional Entity has designated any lower 
voltage lines as critical to regional reliability and therefore 
subject to FAC-003-1.

    We will not direct NERC to submit a modification to the general 
limitation on applicability as proposed in the NOPR. However we will 
require the ERO to address the proposed modification through its 
Reliability Standards development process. As explained in the NOPR, 
the Commission is concerned that the bright-line applicability 
threshold of 200 kV will exclude a significant number of 
transmission lines that could impact Bulk-Power System reliability * 
* *. We support the suggestions by Progress Energy, SERC and MISO to 
limit applicability to lower voltage lines associated with IROL and 
these suggestions should be part of the input to the Reliability 
Standards development process.
* * * * *
    [Other commenters] raise concerns about the cost of implementing 
this Reliability Standard if the applicability is expanded to lower-
voltage facilities. We recognize these concerns * * *and we direct 
the ERO to develop an acceptable definition that covers facilities 
that impact reliability but balances extending the applicability of 
this standard against unreasonably increasing the burden on 
transmission owners.\92\
---------------------------------------------------------------------------

    \92\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 706, 708.

    63. We believe that NERC has satisfied this directive by 
considering the various concerns raised by the commenters as noted in 
Order No. 693, and ultimately by revising the Reliability Standard so 
that it applies to not only to lines that are 200 kV and above, but 
also to any sub-200 kV transmission line that is an element of an IROL 
or a Major WECC Transfer Path. We believe that NERC has supported its 
approach to the expansion in applicability, noting that proposed FAC-
003-2 provides specific criteria to determine applicability for sub-200 
kV transmission lines. In addition, NERC has used an impact-based 
approach for determining applicability rather than a bright-line 
threshold as a means of balancing the potential increased burden on 
transmission owners under a standard with expanded applicability.\93\
---------------------------------------------------------------------------

    \93\ NERC Petition at 41-42.
---------------------------------------------------------------------------

    64. While we view the modified applicability as a significant 
improvement, there are two aspects on which we seek comment. First, 
section 4.2.2 of proposed FAC-003-2 provides that the standard applies 
to overhead transmission lines operated below 200 kV identified as an 
IROL under NERC Standard FAC-014 by the planning coordinator. However, 
FAC-014-2 does not explicitly require the planning coordinator to 
provide information about IROL status to transmission owners. Further, 
IROLs may change with changing system conditions. Given these factors, 
we seek a better understanding of how FAC-003-2 will be applied to 
facilities designated as IROLs. For example, we seek comment on how 
information regarding IROL status will be transmitted to transmission 
owners that must comply with FAC-003-2 and how transmission owners can 
effectively implement vegetation management per FAC-003-2 given that 
such programs are generally implemented annually and a change in IROL 
status can take place at any time given changing system conditions.\94\
---------------------------------------------------------------------------

    \94\ For example, if a line is designated to be an IROL element 
by the planning coordinator, how will the transmission owner know to 
thereafter apply FAC-003-2 to that line? If the designation of an 
IROL changes with changes in system conditions, how will a 
transmission owner document management of vegetation over time?
---------------------------------------------------------------------------

    65. Second, in Order No. 693, the Commission directed that the 
proposed Reliability Standard apply to ``Bulk-Power System transmission 
lines that have an impact on reliability as determined by the ERO.'' 
\95\ The Commission noted evidence that some lines below 200 kV can 
have significant impacts on the Bulk-Power System, including IROLs and 
System Operating Limits (SOLs).\96\ The Commission directed the ERO, 
however, to balance extending the applicability of the standard against 
unreasonably increasing the burden on transmission owners.\97\ Thus, we 
seek comment on how the applicability of the proposed Reliability 
Standard complies with the directive that the standard cover ``lines 
that have an impact on reliability.'' In addition, since the issuance 
of Order No. 693, we note that Commission staff and NERC stated in 
their joint report on the 2011 Southwest outage that failure to 
properly designate IROLs was a major cause of the outage.\98\ 
Therefore, as part of the broader inquiry into whether the standard 
covers ``lines that have an impact on reliability,'' we seek comment on 
how NERC will assure that IROLs are properly designated.
---------------------------------------------------------------------------

    \95\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 706.
    \96\ Id. P 710.
    \97\ Id. P 708.
    \98\ See FERC and NERC Staff Report, Arizona- Southern 
California Outages on Sept. 8, 2011: Causes and Recommendations at 
6, 97-100 (April 2012).
---------------------------------------------------------------------------

C. Requirements R1 and R2

1. Minimum Clearance Values
    66. We find that NERC has relied on a reasonable method for setting 
the MVCD, and has supported the inputs and assumptions it used to 
develop those minimum clearance distances, at least until such time 
that empirical data is developed and is available for use in setting 
MVCDs. We note that the MVCDs are roughly equivalent to, or slightly 
larger than, the minimum Clearance 2 distances in the current standard.
    67. NERC explains that the MVCD is the result of a conservative gap 
factor. Further, the MVCD clearances represent only one aspect of 
proposed FAC-003-2. The MVCD establishes a ``minimum[] required to 
prevent Flash-over.'' \99\ The proposed standard requires transmission 
operators to manage vegetation to ensure that vegetation does not 
encroach into that minimum clearance distance, which requires 
transmission owners to manage vegetation to a distance further than the 
MVCD. For example, transmission owners are required to have documented 
compliance strategies, procedures, processes, or specifications under 
Requirement R3 to prevent encroachments into the MVCDs after taking 
into account sag and sway of the lines, as well as vegetative growth 
rates, planned control methods and frequency of inspections. Similarly, 
under Requirement R7, a transmission owner is required to ``complete 
100% of its annual vegetation work plan of applicable lines to ensure 
no vegetation encroachments occur within the MVCD.'' \100\ Indeed, as 
NERC has explained, the ``Transmission Owner is obligated to show 
detailed documentation that clearly explains their system with regard 
to the geography and how the Transmission Owner will execute the plan 
to prevent encroachment.'' \101\ Further, NERC has indicated that a 
transmission owner's documentation approach will generally contain the 
following elements:

    \99\ NERC Petition, Ex. A (Proposed Reliability Standard FAC-
003-2) at 26 (Table 2--Minimum Vegetation Clearance Distances (MVCD) 
For Alternating Current Voltages), n. 7 (emphasis added).
    \100\ Proposed Reliability Standard FAC-003-2 R7.
    \101\ See NERC Response to Data Request Q2.

    1. The maintenance strategy used (such as minimum vegetation-to-
conductor distance or maximum vegetation height) to ensure that MVCD 
clearances are never violated.
    2. The work methods that the Transmission Owner uses to control 
vegetation;
    3. A stated Vegetation Inspection frequency;

[[Page 64929]]

    4. An annual work plan.\102\
---------------------------------------------------------------------------

    \102\ NERC Response to Data Request Q4 (emphasis added) (citing 
NERC Petition, Ex. A at 19-20).

NERC also has indicated in its filing that ``prudent vegetation 
maintenance practices dictate that substantially greater distances 
[than the applicable MVCD] will be achieved at time of vegetation 
maintenance.''\103\
---------------------------------------------------------------------------

    \103\ NERC Petition, Ex. A (Proposed Reliability Standard FAC-
003-2) at 26 (Table 2--Minimum Vegetation Clearance Distances (MVCD) 
For Alternating Current Voltages), n. 7.
---------------------------------------------------------------------------

    68. NERC also explains that a conductor's position in space at any 
point in time continuously changes in reaction to a variety of factors, 
such as the amount of thermal and physical loading, air temperature, 
wind velocity and direction, and precipitation. The following diagram 
is a cross-section view of a single conductor at a given point along 
the span that illustrates six possible conductor positions due to 
movement resulting from thermal and mechanical loading: \104\
---------------------------------------------------------------------------

    \104\ NERC Petition, Ex. A at 20-21.
    [GRAPHIC] [TIFF OMITTED] TP24OC12.000
    
NERC indicates that conductor movements must be taken into account 
under FAC-003-2, and that the transmission owner is required to show 
that its approach to vegetation management under Requirement R3 will 
prevent encroachments under all expected line positions.\105\ Thus, a 
transmission owner must manage vegetation to ensure it does not 
encroach into the MVCD under multiple conditions.
---------------------------------------------------------------------------

    \105\ See id. and Requirement R3 of FAC-003-2; see also NERC 
Petition, Ex. I (Technical Reference Document) at 20-29.
---------------------------------------------------------------------------

    69. Finally, as NERC explains in its Technical Reference Document, 
transmission owners will have to clear vegetation to levels ``well away 
from'' the minimum spark-over zone:

    As the conductor moves through various positions [due to thermal 
loading and physical loading], a spark-over zone surrounding the 
conductor moves with it. * * * At the time of making a field 
observation, however, it is very difficult to precisely know where 
the conductor is in relation to its wide range of all possible 
positions. Therefore, Transmission Owners must adopt maintenance 
approaches that account for this dynamic situation.
* * * * *
    In order to maintain adequate separation between vegetation and 
transmission line conductors, the Transmission Owner must craft a 
maintenance strategy that keeps vegetation well away from the spark-
over zone mentioned above.\106\
---------------------------------------------------------------------------

    \106\ NERC Petition, Ex. I (Technical Reference Document) at 21-
24.

    70. Thus, while clearances required at the time of maintenance may 
vary from one region or area to another, our proposed approval of FAC-
003-2 is based on our understanding, which is drawn directly from 
NERC's statements in its petition, that transmission operators will 
manage vegetation to distances beyond the MVCD to ensure no 
encroachment into the MVCD.
    71. As discussed above, the PNNL Report identifies specific 
potential concerns regarding NERC's approach to calculating minimum 
clearance values, such as the appropriate ``gap factor'' to apply. In 
its response to the PNNL Report, NERC explains the Standard Drafting 
Team's approach to reach a 1.3 gap factor and how it considered the 
matters raised in the PNNL Report. For example, with regard to the gap 
factor, NERC indicates that the drafting team relied on an 
authoritative source and chose a conservative gap factor value.\107\ 
Based on the record in this proceeding, the application of the Gallet 
equation appears to be one reasonable method to calculate MVCD values. 
Further, while questions have been raised regarding certain inputs into 
the mathematical formula, we believe that NERC has supported use of the 
MVCD values set forth in FAC-003-2.
---------------------------------------------------------------------------

    \107\ NERC Comments on PNNL Report at 6-7.
---------------------------------------------------------------------------

    72. Notwithstanding our approval of the proposed MVCD, we remain 
concerned, as indicated in Order No. 693, over the lack of empirical 
data with regard to actual flashover distances observed through testing 
or analysis of flashover events.\108\ NERC states in its petition that 
the Electric Power Research Institute (EPRI) is planning to undertake 
``the first known field tests of energized high voltage conductor 
flash-over to vegetation'' at its Lenox facility, and that EPRI could 
be ready to commence such testing by the summer of 2013.\109\ We seek 
comment on the status of this project and any other similar testing 
that is planned or ongoing of which NERC or other commenters are aware.
---------------------------------------------------------------------------

    \108\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 735.
    \109\ NERC Petition at 5, n. 10.
---------------------------------------------------------------------------

    73. NERC further states that ``the results of those [EPRI] tests 
may be useful to the industry for future reviews of this NERC 
standard.'' \110\ We agree

[[Page 64930]]

with NERC. While we accept NERC's approach to determine the MVCDs 
between conductors and vegetation needed to prevent flashovers, we 
believe it is important that NERC develop empirical evidence that 
either confirms the MVCD values or gives reason to revisit the 
Reliability Standard. Accordingly, consistent with the activity that 
NERC has already initiated, the Commission proposes to direct that NERC 
conduct or commission testing to obtain empirical data and submit a 
report to the Commission providing the results of the testing. We seek 
comment on this proposal, as well as the appropriate time frame for 
completion of the required testing and the submission of a report.
---------------------------------------------------------------------------

    \110\ Id.
---------------------------------------------------------------------------

2. Designation of Medium VRF for Requirement R2
    74. Requirement R1 of currently-effective Reliability Standard FAC-
003-1 requires a transmission owner to maintain a ``transmission 
vegetation management program'' pursuant to which a transmission owner 
must maintain certain clearance distances between applicable 
transmission lines and vegetation. Requirement R1 of the Version 1 
standard is assigned a ``high'' Violation Risk Factor.
NERC Petition
    75. Under FAC-003-2, NERC proposes to bifurcate the assigned 
Violation Risk Factor levels, depending on the type of transmission 
line involved. NERC proposes to assign a high Violation Risk Factor to 
Requirement R1, which requires transmission owners to ``manage 
vegetation to prevent encroachments into the MVCD of its applicable 
line(s) which are either an element of an IROL, or an element of a 
Major WECC Transfer Path.'' Requirement R2 of the proposed Reliability 
Standard, which is assigned a medium Violation Risk Factor, provides 
that ``[e]ach Transmission Owner shall manage vegetation to prevent 
encroachments into the MVCD of its applicable line(s) which are not 
either an element of an IROL, or an element of a Major WECC Transfer 
Path.'' [Emphasis in original.] Thus, the substantive obligation set 
forth in Requirements R1 and R2 are identical, but the Violation Risk 
Factors differ based on whether a transmission line is an element of an 
IROL or Major WECC Transfer Path.
    76. NERC maintains that the assignment of a medium Violation Risk 
Factor for Requirement R2 is appropriate pursuant to existing Violation 
Risk Factor definitions and guidelines. NERC maintains that ``[l]ines 
that are not IROLs and are not Major WECC Transfer Paths by definition 
have less potential for leading to cascading, separation or 
instability.'' \111\ Thus, NERC asserts that the separation into high 
risk and medium risk categories ``ensure entities properly understand 
the risk to reliability associated with specific actions.'' \112\
---------------------------------------------------------------------------

    \111\ NERC Petition at 53.
    \112\ Id. at 54.
---------------------------------------------------------------------------

Commission Proposal
    77. Based on the information provided in NERC's Petition, it is not 
clear that NERC has adequately supported a medium Violation Risk Factor 
designation for Requirement R2. The Commission-approved definition of a 
``medium'' risk requirement is:

    A requirement that, if violated, could directly affect the 
electrical state or the capability of the bulk electric system, or 
the ability to effectively monitor and control the bulk electric 
system. However, violation of a medium risk requirement is unlikely 
to lead to bulk electric system instability, separation, or 
cascading failures * * *.\113\
---------------------------------------------------------------------------

    \113\ See North American Electric Reliability Corp., 119 FERC ] 
61,145 at P 9, order on compliance, 121 FERC ] 61,179, at n.2, Appx. 
A (2007) (emphasis added).

---------------------------------------------------------------------------
    The definition of a high Violation Risk Factor is:

    A requirement that, if violated, could directly cause or 
contribute to bulk electric system instability, separation, or a 
cascading sequence of failures, or could place the bulk electric 
system at an unacceptable risk of instability, separation, or 
cascading failures * * *.\114\
---------------------------------------------------------------------------

    \114\ Id. (emphasis added).

NERC's support for the medium designation is that transmission lines 
that are not IROLs and are not Major WECC Transfer Paths ``have less 
potential for leading to cascading, separation, or instability'' than 
lines that are IROLs or Major WECC Transfer Paths.\115\ But NERC does 
not explain why outages on these relatively high voltage lines (200 kV 
or higher) would not likely lead to cascading, separation, or 
instability, or provide any indication of the number of transmission 
lines and transmission line-miles that would now be subject to a 
reduced (i.e., medium) Violation Risk Factor designation if FAC-003-2 
were in effect.
---------------------------------------------------------------------------

    \115\ NERC Petition at 53.
---------------------------------------------------------------------------

    78. Moreover, transmission lines not designated as an IROL element 
(or the equivalent) have been instrumental in causing major blackouts, 
including the August 2003 Northeast blackout. In that case, at least 
three of the four 345 kV lines (Star-S Canton, Harding-Chamberlin, and 
Hanna-Juniper) that tripped due to tree contact were not monitored as a 
flowgate, which could be viewed as the technical equivalent of an IROL 
at that time.\116\ These three lines were the second, third and fourth 
lines to trip.\117\
---------------------------------------------------------------------------

    \116\ 2003 Blackout Report at 55, 57, 60. The NERC Glossary 
defines a flowgate as: ``1.) A portion of the Transmission system 
through which the Interchange Distribution Calculator calculates the 
power flow from Interchange Transactions. 2.) A mathematical 
construct, comprised of one or more monitored transmission 
Facilities and optionally one or more contingency Facilities, used 
to analyze the impact of power flows upon the Bulk Electric 
System.'' NERC Glossary at 20.
    \117\ 2003 Blackout Report at 46 (Fig. 5.1).
---------------------------------------------------------------------------

    79. Likewise, an August 10, 1996 blackout in WECC began with the 
trip of a 500 kV line (due to a tree contact) that was not identified 
as part of WECC's relevant path catalog at the time, i.e., the line was 
not identified as one of the critical paths subject to WECC monitoring 
and oversight similar to that required for a Major WECC Transfer Path 
today.\118\
---------------------------------------------------------------------------

    \118\ The blackout originated with the trip of the Keeler-
Allston 500 kV line, see NERC 1996 System Disturbances: Review of 
Selected Electric System Disturbances in North America (August 2002) 
at 40, 47, and affected 7.5 million people and 28,000 MW of load 
across fourteen states. 2003 Blackout Report at 106.
---------------------------------------------------------------------------

    80. Pursuant to proposed Requirements R1 and R2, transmission 
owners must ``manage vegetation to prevent encroachments into the MVCD 
of its applicable lines,'' and any encroachment is considered a 
violation of these requirements regardless of whether it results in a 
sustained outage. NERC explains that it bifurcated the requirement to 
eliminate commingling of higher risk reliability objectives and lesser 
risk reliability objectives. However, analysis of the two 
aforementioned system disturbances suggests that lines that are not 
designated as an IROL or a Major WECC Transfer Path at a given point in 
time (i.e., proposed Requirement R2 lines), may still be associated 
with higher-risk consequences, including outages that can lead to 
Cascading.
    81. Accordingly, pursuant to our Violation Risk Factor guidelines, 
which require, among other things, consistency within a Reliability 
Standard (guideline 2) and consistency between requirements that have 
similar reliability objectives (guideline 3), we propose to modify the 
Violation Risk Factor assigned to Requirement R2 from medium to high. 
However, in its comments on this NOPR, NERC is free to provide 
additional explanation than provided thus far to demonstrate the lines 
identified in Requirement R2 are properly assigned a medium Violation 
Risk Factor.

[[Page 64931]]

D. Enforceability

NERC Petition
    82. In its petition, NERC describes its approach to enforcement 
with respect to each of the Reliability Standard's requirements, noting 
that each requirement is associated with a specific measure for 
evaluating compliance and Violation Severity Level guidance. With 
respect to Requirements R1 and R2, NERC explains that the associated 
measure sets out the types of evidence or documentation that will be 
required to show that vegetation was managed to prevent encroachments.
    83. NERC acknowledges that proposed Requirements R1 and R2 include 
a general footnote (Footnote 1) describing multiple conditions 
exempting a transmission owner from these requirements so as not to be 
held accountable for an encroachment (e.g., a natural disaster or a 
``major storm'' as defined either by the transmission owner or an 
applicable regulatory body). However, NERC explains that this exception 
would only apply to situations that are beyond the control of the 
transmission owner or its duly appointed delegate.\119\ Further, any 
determination by the Commission or any other ``applicable regulatory 
body'' as to whether a given event does or does not qualify as a 
``major storm'' would override any such determination by the 
transmission owner.\120\
---------------------------------------------------------------------------

    \119\ NERC Petition at 34.
    \120\ NERC Petition at 34.
---------------------------------------------------------------------------

    84. With respect to the Requirement R3 obligation that a 
transmission owner document its approach to vegetation management, NERC 
explains that the transmission owner must not only demonstrate that its 
program takes into account ``the movement of the conductor, as well as 
growth rate, control method, and inspection frequency,'' it must also 
provide ``documentation that is sufficient to satisfy the auditor that 
the information contained in that documentation is sufficient that the 
Transmission Owner can use it to prevent encroachment into the MVCD.'' 
\121\ NERC further explains that ``[a]uditors will have to use judgment 
to evaluate the appropriateness of the documentation provided given the 
particular circumstances of the entity being audited.'' \122\
---------------------------------------------------------------------------

    \121\ Id. at 35.
    \122\ Id.
---------------------------------------------------------------------------

    85. With respect to the obligation in Requirement R4 to provide 
notice to the applicable control center of a confirmed vegetation 
condition likely to cause a fault, NERC again explains that auditors 
may have to use judgment based on the specific circumstances, ``but it 
is expected that an entity that does not make this reporting a top 
priority would be in violation of the standard.'' \123\ In addition, 
NERC explains that the obligation to notify without intentional delay 
generally ``can be understood to include an immediate (within 1 hour of 
the observation) communication notwithstanding a safety issue to the 
personnel, other immediate priority maintenance functions to ensure 
reliability or system stability, or communications equipment failure 
that precludes immediate communication.'' \124\
---------------------------------------------------------------------------

    \123\ Id.
    \124\ Id. at 37.
---------------------------------------------------------------------------

    86. With respect to Requirement R5, NERC explains that in the case 
where a transmission owner is prevented from taking actions needed to 
prevent an encroachment into the MVCD, the transmission owner must de-
energize or de-rate the line to reduce the MVCD as needed to avoid a 
violation, and must show proof that it has taken that action if 
needed.\125\
---------------------------------------------------------------------------

    \125\ Id.
---------------------------------------------------------------------------

    87. With respect to Requirement R7 covering vegetation work plans, 
NERC notes that the requirement does not explicitly require the 
creation of such a plan, but states that ``entities will not be able to 
comply with the requirement without having a documented plan.'' \126\ 
While NERC acknowledges that R7 allows transmission owners to have a 
``dynamic work plan,'' it points out that any modifications to the plan 
must be executed to avoid encroachment of vegetation into the MVCD. 
Moreover, NERC notes that ``[a]ny such encroachment would be a 
violation of R1 or R2, and any changes to the plan that resulted in 
such an encroachment would be a violation of R7.'' \127\ Finally, NERC 
notes that auditors will be able to request and review initial work 
plans for comparison with completed work plans in order to assess 
compliance with these requirements.\128\
---------------------------------------------------------------------------

    \126\ Id. at 39.
    \127\ Id.
    \128\ Id. at 40.
---------------------------------------------------------------------------

    88. In addition, NERC has identified what it expects a transmission 
owner's vegetation management program to contain. See P 67, supra.
    89. The proposed Reliability Standard, as filed, includes a 
``Guideline and Technical Basis'' document that further explains NERC's 
expectations on how the requirements will be enforced and how 
compliance can be demonstrated. For example, with respect to 
Requirement R3, NERC explains in greater detail that the documentation 
showing the transmission owner's approach to vegetation management must 
provide ``the basis for evaluating the intent, allocation of 
appropriate resources, and the competency of the Transmission Owner in 
managing vegetation.'' \129\ While NERC notes that there are many 
acceptable approaches to vegetation management, the transmission owner 
must be able to show how it conducts work to maintain the required 
clearances.\130\ In addition, as discussed in paragraphs 67-71 above, 
transmission owners cannot show compliance with the standard without 
adopting a vegetation management program that keeps vegetation away 
from the MVCDs under changing conditions.
---------------------------------------------------------------------------

    \129\ Id., Ex. A at 19.
    \130\ Id. at 20.
---------------------------------------------------------------------------

Commission Proposal
    90. We support NERC's overall efforts to develop explicit, 
verifiable measures for each requirement in order to allow for 
consistent, non-preferential enforcement.
    91. As noted above, NERC has provided information we believe is 
useful to an overall understanding of the intent of the standard and 
how it will be interpreted and enforced, including the information that 
NERC has provided in its petition, in the Guideline and Technical Basis 
document that is attached as part of Exhibit A to the petition, and in 
its May 25, 2012 responses to the Commission staff's data requests. We 
believe these additional resources, while not setting forth 
requirements or themselves determining whether compliance has occurred, 
provide guidance with respect to uniform compliance with the proposed 
Reliability Standard.\131\ We expect that NERC will approach its 
compliance, auditing and enforcement obligations as described in each 
of these submitted materials. We seek comment as to whether this 
material should be consolidated as reference material to complement the 
proposed compliance measures in order that entities that must comply 
can find these materials in one place and assure implementation of the 
proposed standard as NERC has supported in its filings.
---------------------------------------------------------------------------

    \131\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 253.
---------------------------------------------------------------------------

    92. In addition, Requirement R4 requires transmission owners to 
notify ``without intentional time delay'' the control center with 
switching authority for the applicable line when the transmission owner 
has confirmed the

[[Page 64932]]

existence of a vegetation condition that is likely to cause an imminent 
fault. We seek comment on how NERC would or should treat a delay in 
communication caused by the negligence of the transmission owner or one 
of its employees, where the delay may be significant and 
``unintentional.''

E. Reporting Requirements

    93. Reliability Standard FAC-003-1, Requirements R3 and R4, require 
quarterly reporting to the Regional Entities of sustained transmission 
outages caused by vegetation. While the proposed Reliability Standard 
moves these reporting requirements to the ``Additional Compliance 
Information'' section as a Periodic Data Submittal, NERC maintains that 
the reporting requirements remain enforceable under NERC's Rules of 
Procedure. Among other things, NERC states that it and Regional 
Entities can require entities to provide ``such information as is 
necessary to monitor compliance with the reliability standards'' under 
Section 401.3 of NERC's Rules of Procedure.\132\ In addition, NERC 
asserts that it ``has certain courses of action it may undertake as 
necessary to ensure the entity complies with the Rules,'' pursuant to 
NERC Rule of Procedure Section 100, including notifying the Commission 
of the entity's failure to comply.\133\
---------------------------------------------------------------------------

    \132\ NERC Rules of Procedure Section 401.3.
    \133\ See NERC Petition at 31-32. See NERC Rule of Procedure, 
Section 100 (``[e]ach Bulk Power System owner, operator, and user 
shall comply with all Rules of Procedure of NERC that are made 
applicable to such entities * * *. If NERC determines that a Rule of 
Procedure has been violated, or cannot practically be complied with, 
NERC shall notify [the Commission] and take such other actions as 
NERC deems appropriate to address the situation'').
---------------------------------------------------------------------------

    94. We agree that pursuant to section 401.3 of NERC's Rules of 
Procedure, NERC and the Regional Entities can require transmission 
owners to make quarterly reports of sustained transmission outages 
because these reports provide information relating to compliance with 
the requirements of proposed FAC-003-2. This rule states: ``All Bulk 
Power System owners, operators and users shall provide to NERC and the 
applicable Regional Entity such information as is necessary to monitor 
compliance with the Reliability Standards.'' Further, a periodic data 
submittal is a requirement to provide compliance information pursuant 
to section 3.6 of NERC's Compliance Monitoring and Enforcement 
Program.\134\ However, we seek comment on NERC's statement regarding 
the ``courses of action'' that are available to it in order to ensure 
compliance, other than notifying the Commission of the entity's failure 
to comply.
---------------------------------------------------------------------------

    \134\ NERC Rules of Procedure, Appx. 4C Sec.  3.6.
---------------------------------------------------------------------------

F. Definitions

    95. We propose to accept the new definition of Minimum Vegetation 
Clearance Distance and the revised definitions of Vegetation Inspection 
and Right-of-Way for inclusion in the NERC Glossary of Terms. However, 
we seek further comment regarding the proposed revision to the 
definition of Right-of-Way, as discussed below.
Revised Definition of Right-of-Way
    96. As noted above, we directed NERC in Order No. 693 to consider 
FirstEnergy's suggestion that ``rights-of-way be defined to encompass 
the required clearance areas instead of the corresponding legal rights, 
and that the standards should not require clearing the entire right-of-
way when the required clearance for an existing line does not take up 
the entire right-of-way.'' \135\ In response to this directive, NERC 
now proposes the following new definition of Right-of-Way (ROW):
---------------------------------------------------------------------------

    \135\ See Order No. 693, FERC Stats. & Regs. ] 31,242 at P 734.

    The corridor of land under a transmission line(s) needed to 
operate the line(s). The width of the corridor is established by 
engineering or construction standards as documented in either 
construction documents, pre-2007 vegetation maintenance records, or 
by the blowout standard in effect when the line was built. The ROW 
width in no case exceeds the Transmission Owner's legal rights but 
---------------------------------------------------------------------------
may be less based on the aforementioned criteria.

    97. Under Requirements R1.1 and R2.1 of the proposed Reliability 
Standard, encroachments into the MVCD observed in real time would be 
violations of R1 or R2 regardless of whether they cause a sustained 
outage and regardless of whether the vegetation is within the Right-of-
Way as defined under FAC-003-2. However, under proposed Requirements 
R1.2, R1.3 and R1.4 and the corresponding sub-requirements of R2, fall-
ins, blow-ins and grow-ins that cause a sustained outage are violations 
of the proposed standard only if they occur from inside this newly-
defined Right-of-Way, which could give transmission owners the perverse 
incentive to ``define'' a particular Right-of-Way as narrowly as 
possible in order to limit the likelihood of an R1 or R2 violation.
    98. In response to the Commission staff data requests, NERC has 
provided information suggesting that encroachments from within the 
legal right-of-way (i.e., the area within the transmission owner's 
control) would, in most cases, still be violations of FAC-003-2, even 
if the Right-of-Way is more narrowly defined. In response to Commission 
staff's question about a transmission owner's obligation to respond 
when it identifies a vegetation condition that might encroach into the 
MVCD if the vegetation is located outside of the Right-of-Way (as 
proposed under the new definition), but within the transmission owner's 
legal right-of-way, NERC provided the following explanation:

    1. A grow-in from a tree or the tree wall into the ROW. The 
definition of ROW provides for ``The corridor of land under a 
transmission line(s) needed to operate the line(s).'' Therefore, in 
order to operate the line consistent with its rating, the ROW 
includes space for ``blowout'' of the lines within the context of 
the MVCD. With respect to the grow in of a tree from outside the ROW 
as defined but within the legal ROW, the TO will use vegetations 
[sic] inspections to identify ``those vegetation conditions under 
the Transmission Owner's control that are likely to pose a hazard to 
the line(s) prior to the next planned maintenance or inspection.'' 
In the event, an inspection shows that a tree has already grown 
inside the MVCD, the TO would be in violation of R1 item 1 or R2 
item 1. Another way to consider this issue is that tree growing into 
the MVCD from the side is no different from a tree growing into the 
MVCD from below the line.
    2. A fall-in of danger timber (dead, diseased or dying) from 
outside of the ROW but within the TO's control. The definition of 
inspection covers vegetation ``* * * vegetation conditions on a 
Right-of-Way and those vegetation conditions under the Transmission 
Owner's control that are likely to pose a hazard to the line(s) 
prior to the next planned maintenance or inspection.'' Under this 
requirement, if the TO is regularly identifying its danger trees and 
has a program for managing the risk of fall-in there would be no 
violation. Conversely, if an outage occurs and it is confirmed that 
the TO was not attempting to identify its danger timber risk, the TO 
would be in violation of R6* * *. Also, if the TO identifies the 
danger tree but puts no plan into effect to manage the risk of fall-
in, the TO would be in violation of R7 * * *.\136\
---------------------------------------------------------------------------

    \136\ NERC Data Responses, Responses to Q9 (May 25, 2012).

    99. NERC distinguishes these cases from a case where a fall-in 
occurs from a green or healthy tree outside the corridor-based Right-
of-Way, but within the right-of-way controlled by the transmission 
owner. In that case, NERC acknowledges that there would be no violation 
under the proposed standard, and maintains that the ``fact that the 
Transmission Owner owns additional ROW over and above * * * that needed

[[Page 64933]]

by the MVCD is insufficient reason to cut healthy green trees. To 
require the cutting of green, healthy trees that pose no known threat 
would likely not be environmentally, socially, or politically 
acceptable.'' \137\
---------------------------------------------------------------------------

    \137\ Id., Response to Q9 at P 3.
---------------------------------------------------------------------------

    100. We agree with NERC that in the situation in which a fall-in 
occurs from a green or healthy tree outside the corridor based Right-
of-Way, but within the ROW controlled by the transmission owner, there 
would be no violation under the revised Reliability Standard. Moreover, 
we note that the proposed Reliability Standard does not require clear-
cutting along the right-of-way, but instead gives the transmission 
owner the flexibility to adopt an appropriate vegetation management 
strategy to comply with FAC-003-2 based on the particular circumstances 
for a given line. As NERC notes in its Technical Reference Document, 
different vegetation management strategies may be appropriate for 
different areas, and FAC-003-2 gives transmission owners the option to 
adopt strategies to comply with FAC-003-2 that encourage active 
vegetation management and Integrated Vegetation Management rather than 
clear-cutting.\138\ NERC's Technical Reference Document describes ANSI 
A-300--Best Management Practices for Tree Care Operations and 
identifies Integrated Vegetation Management as a best management 
practice, including incorporation of wire-border zone management 
techniques and the establishment and maintenance of compatible 
vegetation.
---------------------------------------------------------------------------

    \138\ See NERC Petition, Ex. I (Technical Reference Document) at 
24-29.
---------------------------------------------------------------------------

    101. However, we seek further comment on NERC's enforcement 
approach with respect to a fall-in by ``danger timber'' (dead, diseased 
or dying trees or limbs) from within the transmission owner's legally-
owned and controlled right-of-way. Specifically, NERC indicates in its 
data responses (restated in P 98, supra) that ``if the TO is regularly 
identifying its danger trees and has a program for managing the risk of 
fall-in there would be no violation.'' The Commission's concern is that 
this statement could be read to mean that, as long as the transmission 
owner identifies danger trees and has a program to manage the risk of 
those trees, an encroachment into the MVCD from a location within the 
transmission owner's control would not be a violation. The Commission 
would not agree with such a reading. The mere existence of a program to 
identify danger trees and a program to manage risk should not shield a 
transmission owner from enforcement if, notwithstanding the existence 
of the program, an encroachment into the MVCD occurred. The Commission 
seeks comment on this reading and, based on the comments, will consider 
whether changes are needed.
    102. We also note that the proposed definition of Right-of-Way 
includes guidance as to how the transmission owner may define its 
Right-of-Way, requiring that it be based on construction documents, 
pre-2007 vegetation maintenance records, or as-built blowout standards. 
We seek comment on how the identified guidance in the new definition 
will be used: (1) by the transmission owner to establish criteria to 
determine an appropriate Right-of-Way; and (2) by auditors to establish 
criteria to determine compliance with the proposed standard.

G. Implementation Plan

    103. We propose to approve the Implementation Plan as submitted in 
Ex. B of NERC's petition.

V. Information Collection Statement

    104. 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).\139\ OMB's regulations require that OMB approve certain 
reporting and recordkeeping requirements (collections of information) 
imposed by an agency.\140\ Upon approval of a collection of 
information, OMB will assign an OMB control number and 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.
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    \139\ 44 U.S.C. 3507(d) (2006).
    \140\ 5 CFR Sec.  1320.11 (2012).
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    105. The Commission is proposing to 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 respondent's burden, 
including the use of automated information techniques.
    106. This Notice of Proposed Rulemaking proposes to approve 
Reliability Standard FAC-003-2, which includes certain requirements to 
create and maintain records related to a transmission owner's 
vegetation management work plan and its performance of inspections. 
Because transmission owners have vegetation management plans they 
follow per the existing transmission vegetation management standard 
(FAC-003-1), and must compile and maintain similar records and provide 
similar reports under the existing standard, the proposed revisions are 
expected to have a minor impact on the burden of record-keeping and 
reporting. In addition, by allowing greater flexibility compared to the 
currently-effective Version 1 standard with regard to the materials 
that must be maintained for a vegetation management plan or strategy, 
the NERC proposal may prove to reduce the reporting burden for some 
entities.
    107. Public Reporting Burden: Our estimate below regarding the 
number of respondents is based on the NERC compliance registry as of 
July 24, 2012. According to the compliance registry, NERC has 
registered 330 transmission owners within the United States. 
Transmission owners must report and retain certain data pursuant to the 
currently effective Version 1 Standard. Thus, the burden estimate below 
is based on the potential change in the reporting burden imposed by 
proposed FAC-003-2. As discussed earlier, Requirement R3 of NERC's 
proposal provides more flexibility for transmission owners in preparing 
and maintaining a vegetation management program, and the incremental 
change in the burden may be negligible or even decrease for some 
portion of transmission owners. The individual burden estimates are 
based on each transmission owner having to perform a one-time review of 
the revised Reliability Standard's information collection requirements 
and to make any required modifications to its existing vegetation 
management plans and documentation procedures. In addition, the burden 
estimate takes into account an on-going, albeit very minor increase in 
the quarterly reporting burden, based on the increased burden to 
confirm whether or not reportable outages have occurred on lines not 
previously subject to FAC-003-1's requirements. Further, the burden 
estimate takes into account the increased recordkeeping burden 
associated with the proposed standard's annual vegetation inspection 
requirements, which is estimated to increase the inspection cycles (and 
the associated documentation to

[[Page 64934]]

demonstrate compliance) for about one third of transmission owners (110 
transmission owners).

----------------------------------------------------------------------------------------------------------------
                                                     Number of
                                                   transmission      Number of        Average      Total annual
 FAC-003-2 (transmission vegetation management)        owner       responses per   burden hours    burden hours
                                                    respondents     respondent     per response
                                                             (1)             (2)             (3)     (1)x(2)x(3)
----------------------------------------------------------------------------------------------------------------
One-time review and modifications to existing                330               1              16         * 5,280
 documentation, plans and procedures............
Quarterly Reporting.............................             115               4             0.5       \141\ 330
Annual Vegetation Inspections Documentation.....             110               1               2             220
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............  ..............           5,830
----------------------------------------------------------------------------------------------------------------
* (One-time).

    Total Annual Hours for Collection: (Compliance/Documentation) = 
5,830 hours.
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    \141\ While approval of FAC-003-2 is not expected to increase 
the number of reports made or the number of reportable outages 
experienced, some utilities may experience a very slight increase in 
the amount of time required to confirm whether or not any reportable 
outages occurred due to the increased applicability of the standard 
to certain sub-200 kV transmission lines.
---------------------------------------------------------------------------

    Quarterly Reporting Cost for Transmission Owners: = 330 hours @ 
$70/hour\142\ = $23,100.
---------------------------------------------------------------------------

    \142\ This figure is the average of the salary plus benefits for 
a manager and an engineer. The figures are taken from the Bureau of 
Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm.
---------------------------------------------------------------------------

    Annual Vegetation Inspections Documentation: = 220 hours @ $28/
hour\143\ = $6,160.
---------------------------------------------------------------------------

    \143\ Wage figure is based on a Commission staff study of record 
retention burden.
---------------------------------------------------------------------------

    Total Annual Cost (Reporting + Record Retention): = $23,100 + 
$6,160 = $29,260.
    One-Time Review and Modification of Plans and Documentation: 5,280 
hours @ $52/hour\144\ = $274,560.
---------------------------------------------------------------------------

    \144\ This figure is the average of the salary plus benefits for 
an engineer and a forester. The figures are taken from Bureau of 
Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm.
---------------------------------------------------------------------------

    Title: Mandatory Reliability Standards for the Bulk-Power System.
    Action: Proposed revisions to collection FERC-725A.
    OMB Control No.: 1902-0244.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: Annual, quarterly, and one-time.
    Necessity of the Information: The proposed revision of NERC 
standard FAC-003-2 Transmission Vegetation Management is part of the 
implementation of 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 proposal would ensure that transmission owners are 
protecting transmission lines from encroachment of vegetation.
    Internal Review: The Commission has reviewed the proposed revision 
to the current Reliability Standard 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.
    108. 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].
    109. For submitting comments concerning the collection of 
information and the associated burden estimate, 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 RM12-04 and OMB Control Number 1902-0244.

VI. Regulatory Flexibility Act Certification

    110. The Regulatory Flexibility Act of 1980 (RFA) \145\ 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.\146\ 
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.\147\
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    \145\ 5 U.S.C. 601-612 (2006).
    \146\ 13 CFR 121.101 (2012).
    \147\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    111. Proposed Reliability Standard FAC-003-2 will be applicable to 
overhead transmission lines operated at 200 kV or higher, and, for the 
first time, to transmission lines operated at less than 200 kV if they 
are elements of an IROL as defined by FAC-014 or elements of a Major 
WECC Transfer Path. In addition, Proposed Reliability Standard FAC-003-
2 will require annual vegetation inspections for all applicable lines, 
which could result in an increase in annual inspections performed for a 
subset of transmission owners.
    112. Comparison of the NERC Compliance Registry with data submitted 
to the Energy Information Administration on Form EIA-861 indicates 
that, of the 330 transmission owners in the United States registered by 
NERC, 127 of these entities qualify as small businesses. The Commission 
estimates that the 127 transmission owners that qualify as small 
businesses will incur increased costs associated solely with a one-time 
review of the proposed standard and modification to existing plans and 
procedures. As described in the information collection section of this 
NOPR, the estimated cost

[[Page 64935]]

for the increased data collection and retention is approximately $1,000 
per entity.
    113. Further, some transmission owners that qualify as small 
entities will incur costs associated with an increase in frequency of 
inspections. As indicated above, currently-effective FAC-003-1 requires 
periodic vegetation management inspections of transmission line rights-
of-way at an interval determined by each transmission owner. 
Requirement R6 of the proposed standard would require each transmission 
owners to inspect 100 percent of the transmission lines at least once 
per year. Based on a review of available information, including data 
provided in response to a 2004 vegetation management study performed by 
Commission staff,\148\ we estimate that approximately one third, i.e., 
42, of the transmission owners that qualify as small entities would 
incur costs associated with more frequent inspection cycles. Assuming 
that (1) such small entities own approximately 50-200 miles of 
transmission lines, (2) approximately 15-20 miles of transmission line 
can be inspected per day and (3) cost of labor is approximately $47 per 
hour,\149\ the estimated increase in inspection cost for these 42 small 
entities is in the range of approximately $5,000 to 10,000 per entity. 
As discussed above, NERC's proposal would modify the applicability of 
the Reliability Standard to include overhead transmission lines that 
are operated below 200 kV if they are either an element of an IROL or 
an element of a Major WECC Transfer Path. Based on a review of the 
Major WECC Transfer Paths and a sample of sub-200 kV IROLs in the 
Eastern Interconnect, the Commission believes that most, if not all, of 
the transmission lines subject to the expanded applicability of 
proposed FAC-003-2 are owned by large entities. Thus, the increased 
cost of the new rule to small entities appears to be negligible with 
respect to the expanded applicability of the Reliability Standard.
---------------------------------------------------------------------------

    \148\ See Utility Vegetation Management and Bulk Electric 
Reliability Report from the Federal Energy Regulatory Commission, p. 
8-10 (Sept. 7, 2004). Available at: http://www.ferc.gov/industries/electric/indus-act/reliability/veg-mgmt-rpt-final.pdf.
    \149\ The wage figure is taken from the Bureau of Labor and 
Statistics at http://bls.gov/oes/current/naics3_221000.htm.
---------------------------------------------------------------------------

    114. Based on the above, the Commission does not consider the cost 
of the NERC proposal to be a significant economic impact for small 
entities because it should not represent a significant percentage of an 
affected small entity's operating budget.
    115. Based on the above, the Commission certifies that the new or 
revised requirements set forth in proposed Reliability Standard FAC-
003-2 will not have a significant economic impact on a substantial 
number of small entities. Accordingly, no regulatory flexibility 
analysis is required.

VII. Environmental Analysis

    116. 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.\150\ 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 or that do not substantially 
change the effect of the regulations being amended.\151\ The actions 
proposed herein fall within this categorical exclusion in the 
Commission's regulations.
---------------------------------------------------------------------------

    \150\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \151\ 18 CFR 380.4(a)(2)(ii) (2012).
---------------------------------------------------------------------------

VIII. Comment Procedures

    117. 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 December 24, 2012. Comments must 
refer to Docket No. RM12-4-000, and must include the commenter's name, 
the organization they represent, if applicable, and their address in 
their comments.
    118. 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.
    119. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    120. 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.

IX. Document Availability

    121. 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.
    122. 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.
    123. 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.

List of Subjects in 18 CFR Part 40

    Electric power; Electric utilities; Reporting and recordkeeping 
requirements.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-26112 Filed 10-23-12; 8:45 am]
BILLING CODE 6717-01-P