Document ID: FERC-2014-0344-0001
Agency: ferc
Document Type: Rule
Title: Generator Verification Reliability Standards
Posted Date: 2014-03-27T04:00Z

[Federal Register Volume 79, Number 59 (Thursday, March 27, 2014)]
[Rules and Regulations]
[Pages 17011-17023]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06725]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM13-16-000; Order No. 796]

Generator Verification Reliability Standards

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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

DATES: Effective Date: This rule will become effective May 27, 2014.

FOR FURTHER INFORMATION CONTACT:

Syed Ahmad (Technical Information), Office of Electric Reliability, 
Federal

[[Page 17012]]

Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-8718, syed.ahmad@ferc.gov.
Mark Bennett (Legal Information), Office of General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-8524, mark.bennett@ferc.gov.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Cheryl A. LaFleur, Acting Chairman; Philip D. 
Moeller, John R. Norris, and Tony Clark.

(Issued March 20, 2014)
    1. Under section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves five Reliability Standards that were submitted to 
the Commission for approval by the North American Electric Reliability 
Corporation (NERC), the Commission-certified Electric Reliability 
Organization (ERO): MOD-025-2 (Verification and Data Reporting of 
Generator Real and Reactive Power Capability and Synchronous Condenser 
Reactive Power Capability), MOD-026-1 (Verification of Models and Data 
for Generator Excitation Control System or Plant Volt/Var Control 
Functions), MOD-027-1 (Verification of Models and Data for Turbine/
Governor and Load Control or Active Power/Frequency Control Functions), 
PRC-019-1 (Coordination of Generating Unit or Plant Capabilities, 
Voltage Regulating Controls, and Protection), and PRC-024-1 (Generator 
Frequency and Voltage Protective Relay Settings).
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    \1\ 16 U.S.C. 824o.
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    2. The Commission approves the associated implementation plan, 
violation risk factors and, with one modification, the violation 
severity levels. The Commission also approves the retirement of 
Reliability Standards MOD-024-1 and MOD-025-1 immediately prior to the 
effective date of MOD-025-2.
    3. The generator verification Reliability Standards will help 
ensure that generators remain in operation during specified voltage and 
frequency excursions; properly coordinate protective relays and 
generator voltage regulator controls; and enhance the ability of 
generator models to accurately reflect the generator's capabilities and 
equipment performance. Reliability Standards MOD-026-1, MOD-027-1, PRC-
019-1 and PRC-024-1 are new, whereas Reliability Standard MOD-025-2 
consolidates two existing Reliability Standards, MOD-024-1 
(Verification of Generator Gross and Net Real Power Capability) and 
MOD-025-1 (Verification of Generator Gross and Net Reactive Power 
Capability), into one new Reliability Standard. Portions of Reliability 
Standards MOD-025-2 and PRC-024-1 respond to directives contained in 
Order No. 693.\2\
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    \2\ See Mandatory Reliability Standards for the Bulk-Power 
System, Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, 
Order No. 693-A, 120 FERC ] 61,053 (2007).
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    4. The generator verification Reliability Standards improve the 
accuracy of model verifications needed to support reliability and 
enhance the coordination of generator protection systems and voltage 
regulating system controls. Such improvements should help reduce the 
risk of generator trips and provide more accurate models for 
transmission planners and planning coordinators to develop system 
models and simulations. We also determine that the generator 
verification Reliability Standards adequately address the Commission's 
directives regarding Reliability Standard MOD-025-2 and PRC-024-1. 
Therefore, pursuant to section 215(d) of the FPA, we approve 
Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, PRC-019-1 and 
PRC-024-1.

I. Background

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

A. NERC Petition

    9. On May 30, 2013, NERC filed its petition seeking approval of 
Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, PRC-019-1 and 
PRC-024-1. NERC states that four of the five

[[Page 17013]]

Reliability Standards are new, while existing Reliability Standards 
MOD-024-1 and MOD-025-1 were merged into proposed Reliability Standard 
MOD-025-2. NERC also seeks approval of the associated implementation 
plans, violation risk factors and violation severity levels, and 
retirement of current Reliability Standards MOD-024-1 and MOD-025-1 at 
midnight of the day immediately prior to the effective date of MOD-025-
2. NERC proposes to phase in effective dates in stages over periods 
ranging from five years (for MOD-025-2, PRC-019-1 and PRC-024-1) to ten 
years (for MOD-026-1 and MOD-027-1).\11\ NERC states that ``these five 
proposed Reliability Standards address generator verifications needed 
to support Bulk-Power System reliability and will ensure that accurate 
data is verified and made available for planning simulations.'' \12\
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    \11\ NERC Petition, Exhibit B (Implementation Plan for 
Reliability Standards Submitted for Approval).
    \12\ NERC Petition at 2.
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    10. NERC explains that Bulk-Power System reliability benefits from 
``good quality simulation models of power system equipment'' and that 
``model validation ensures the proper performance of the control 
systems and validates the computer models used for stability 
analysis.'' \13\ NERC further states that the proposed Reliability 
Standards will enhance reliability because the tests performed to 
obtain model data may reveal latent defects that could cause 
``inappropriate unit response during system disturbances.'' \14\ NERC 
also states that simulating the response of synchronous machines and 
related control systems in sufficient detail is essential for effective 
power system planning and operational studies.\15\ For accurate 
simulations reflecting actual equipment performance covering a range of 
disturbances, NERC states that models must not only contain adequate 
information, they must also correspond to actual field values.\16\ 
Finally, NERC asserts that Reliability Standards MOD-025-2 and PRC-024-
1 address the directives in Order No. 693 mentioned above.
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    \13\ Id.
    \14\ Id. 2-3.
    \15\ Id. 3.
    \16\ Id.
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B. Reliability Standards and NERC Explanation of Provisions

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

[[Page 17014]]

Requirement R2.'' \22\ Under Requirement R4, generator owners are 
required to determine whether changes to applicable units affect models 
provided pursuant to Requirement R2 and, when consistent with this 
determination, to provide the transmission planner with revised model 
data or plans to perform model verification.
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    \21\ Id. 16.
    \22\ Id. 17.
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    15. Requirement R5 requires a generator owner to respond within 90 
days to a ``technically justified unit request'' from its transmission 
planner to perform a model review of a unit or plant, including details 
for model verification or corrected model data. A footnote to 
Requirement R5 states that ``Technical justification is achieved by the 
Transmission Planner demonstrating that the simulated unit or plant 
response does not match the measured unit or plant response.'' Also, 
Applicability section 4.2.4 in MOD-026-1 states that facilities to 
which the standard applies include ``For all Interconnections: A 
technically justified unit that meets NERC registry criteria but is not 
otherwise included in the above Applicability sections 4.2.1, 4.2.2, or 
4.2.3 and is requested by the Transmission Planner.''
    16. NERC explains that Requirement R5 allows transmission planners 
to request that generator owners who otherwise are not covered by the 
Applicability section (i.e., whose MVA ratings are lower than the 
applicability thresholds specified in Section 4 of Reliability Standard 
MOD-026-1 but meet or exceed the Registry Criteria) provide model 
verifications or correct model data.\23\ Requirement R6 requires 
transmission planners to provide written responses to generator owners 
within 90 days of receiving a verified excitation control system or 
plant volt/var control function model information whether the model is 
usable or not in accordance with Requirement R2. If it determines the 
model to be unusable, the transmission planner must explain the 
technical basis for that decision.
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    \23\ Id. 18.
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3. Reliability Standard MOD-027-1
    17. Reliability Standard MOD-027-1 is a new Reliability Standard 
and contains five requirements and an Attachment (Turbine/Governor and 
Load Control or Active Power Frequency Control Model Periodicity). Its 
purpose is to verify that the turbine/governor and load control or 
active power/frequency control model and the model parameters, used in 
dynamic simulations that assess bulk electric system reliability, 
accurately represent generator unit real power response to system 
frequency variations.\24\ Requirement R1 requires transmission planners 
to provide generator owners with guidance that will enable generator 
owners to provide the information required in Requirements R2 and R4 
within 90 days of a written request. Requirement R2 requires generator 
owners to provide transmission planners with a verified turbine/
governor and load control or active power/frequency control model for 
each applicable unit, including documentation and data in accordance 
with the periodicity specified in MOD-027-1, Attachment 1. Attachment 1 
also contains a table listing verification conditions and related 
actions required of generator owners.\25\
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    \24\ Reliability Standard MOD-027-1, Section A.3 (Purpose).
    \25\ NERC Petition at 20.
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    18. Requirement R3 establishes communication requirements to ensure 
that generator owners respond to transmission planner determinations 
that a generator owner's model is not ``usable,'' or where there is a 
difference between the model and three or more actual transmission 
system events.\26\ Requirement R3 requires generator owners to provide 
a written response within 90 days.\27\ Requirement R4 requires 
generator owners to provide transmission planners with updates when 
changes occur to the turbine/governor and load control or active power/
frequency control system that alter equipment response 
characteristics.\28\ Requirement R5 requires transmission planners to 
inform generator owners within 90 days of receiving model information 
(in accordance with Requirement R2) whether the model is usable or not. 
If a model is unusable, the transmission planner shall provide the 
generator owner with an explanation of the technical basis for that 
decision. Also, Requirement R3 requires generator owners to provide a 
written response to this explanation within 90 days.
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    \26\ Id. 21.
    \27\ Id.
    \28\ Id. 22.
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4. Reliability Standard PRC-019-1
    19. Reliability Standard PRC-019-1 is a new Reliability Standard 
and contains two requirements intended to ensure that both generator 
owners and transmission owners verify coordination of generating unit 
facility or synchronous condenser voltage regulating controls, limit 
functions, equipment capabilities and protection system settings.\29\ 
Requirement R1 requires generator owners and transmission owners to 
coordinate the voltage regulating system controls with the equipment 
capabilities and settings of the applicable protection system devices 
and functions.\30\ Requirement R2 requires generator owners and 
transmission owners to perform the coordination described in 
Requirement R1 to address equipment or setting changes.\31\ The 
coordination required in Reliability Standard PRC-019-1 must be 
performed at least every five years.
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    \29\ Reliability Standard PRC-019-1, Section A.3 (Purpose).
    \30\ NERC Petition at 23.
    \31\ Id. 24.
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5. Reliability Standard PRC-024-1
    20. Reliability Standard PRC-024-1 is a new Reliability Standard 
and consists of four requirements and two Attachments. The stated 
purpose of PRC-024-1 is to ensure that generator owners set their 
generator protective relays such that generating units remain connected 
during defined frequency and voltage excursions.\32\ Requirement R1 
requires generator owners having generator frequency protective 
relaying activated to trip their generating units to set their 
protective relaying to prevent their generating units from tripping 
within the ``no trip zone'' of PRC-024-1 Attachment 1 (unless one of 
three specified exceptions applies). NERC explains that Attachment 1 
contains tables with curve data points for each Interconnection 
indicating the amount of time a generator needs to remain connected at 
specific defined frequency excursions.\33\ Requirement R2 addresses 
voltage excursions and requires, subject to four exceptions, generator 
owners to ensure that their voltage protective relaying settings 
prevent their generating units from tripping within the ``no trip 
zone'' described in PRC-024-1, Attachment 2.
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    \32\ Reliability Standard PRC-024-1, Section A.3 (Purpose).
    \33\ NERC Petition at 25.
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    21. NERC states that the standard drafting team believes the 
voltage profile contained in Attachment 2 includes excursions that 
would be expected under Category B and C contingencies.\34\ Therefore, 
NERC asserts that by ensuring that generator units remain connected to 
the grid during voltage excursions, Requirement R2 and Attachment 2 
satisfy the directive in Order No. 693 to ``explicitly

[[Page 17015]]

require either that all generators are capable of riding through the 
same set of Category B and C contingencies, as required by wind 
generators in Order No. 661, or that those generators that cannot ride 
through be simulated as tripping.'' \35\
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    \34\ See Reliability Standard TPL-002-0b, System Performance 
Following Loss of a Single Bulk Electric System Element (Category B) 
and Reliability Standard TPL-003-0b, System Performance Following 
Loss of Two or More Bulk Electric System Elements (Category C).
    \35\ Id. 29 (citing Order No. 693, FERC Stats. & Regs. ] 31,242 
at P 1787).
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    22. Requirement R3 of Reliability Standard PRC-024-1 requires 
generator owners to document regulatory or equipment limitations that 
would prevent them from satisfying the relay setting criteria in 
Requirements R1 and R2. Generator owners must inform their planning 
coordinator and transmission planner of any such limitation within 30 
calendar days after identifying it. NERC explains that the standard 
drafting team believes that ``regulatory limitations'' include NRC 
requirements and, therefore, Requirement R3 satisfies the Commission's 
guidance that ``NRC requirements should be used when implementing the 
Reliability Standards.'' \36\
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    \36\ Id. 27-28 (citing Order No. 693, FERC Stats. & Regs. ] 
31,242 at P 1787).
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    23. Requirement R4 requires generator owners to provide their 
planning coordinator or transmission planner with generator protection 
trip settings associated with Requirements R1 and R2 within 60 days of 
either a written request or a change to previously requested trip 
settings.\37\
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    \37\ Id. 31.
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III. Notice of Proposed Rulemaking

    24. On September 19, 2013, the Commission issued a Notice of 
Proposed Rulemaking (NOPR) proposing to approve Reliability Standards 
MOD-025-2, MOD-026-1, MOD-027-1, PRC-019-1 and PRC-024-1.\38\ The 
Commission also proposed to approve the associated implementation 
plans, violation risk factors and violation severity levels, with one 
modification, and the retirement of existing Reliability Standards MOD-
024-1 and MOD-025-1 prior to the effective date of MOD-025-2.
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    \38\ Generator Verification Reliability Standards, Notice of 
Proposed Rulemaking, 78 FR 58,492 (September 24, 2013), 144 FERC ] 
61,205 (2013) (NOPR).
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    25. While the Commission proposed to approve all five generator 
verification Reliability Standards, the Commission raised issues 
regarding certain provisions of Reliability Standards MOD-026-1 and 
MOD-027-1. In the NOPR, the Commission sought comments on the following 
issues: (1) Whether the higher applicability thresholds for MOD-026-1 
and MOD-027-1 could limit their effectiveness, especially in areas with 
a high concentration of generators falling below the thresholds, or 
impede transmission planners' ability to address reliability risk; and 
(2) whether the provision in Reliability Standard MOD-026-1 allowing 
transmission planners to compel a generator owner below the 
applicability threshold with a ``technically justified'' unit to comply 
with the Reliability Standard's requirements is ``sufficiently clear 
and workable.'' The Commission also sought comment on whether this 
provision should be included in Reliability Standard MOD-027-1.
    26. In response to the NOPR, the Commission received comments from: 
NERC, Idaho Power Company (Idaho Power), Electricity Consumers Resource 
Council (ELCON), ISO New England (ISO-NE), Arizona Public Service 
Company (APS), International Transmission Company (ITC), Edison 
Electric Institute (EEI), and G&T Cooperatives.\39\
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    \39\ G&T Cooperatives consists of Associated Electric 
Cooperative, Inc., Basin Electric Power Cooperative, and Tri-State 
Generation and Transmission Association, Inc.
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IV. Discussion

    27. Pursuant to section 215(d) of the FPA, the Commission approves 
Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, PRC-019-1 and 
PRC-024-1 as just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. The Commission determines 
that these Reliability Standards will help ensure that verified data is 
available for power system planning and operational studies by 
requiring the verification of generator equipment needed to support 
Bulk-Power System reliability and enhancing the coordination of 
important protection system settings. Also, Reliability Standards MOD-
025-2 and PRC-024-1 satisfy relevant outstanding directives set forth 
in Order No. 693.\40\ Further, we approve the retirement of Reliability 
Standards MOD-024-1 and MOD-025-1 prior to the effective date of MOD-
025-2. We also approve the associated implementation plan and, with one 
exception, the proposed violation risk factors and violations severity 
levels.
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    \40\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1787.
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    28. We discuss below the following issues: (A) The Megavolt Amperes 
(MVA) applicability thresholds for Reliability Standards MOD-026-1 and 
MOD-027-1; (B) the process for determining when it is ``technically 
justified'' for a transmission planner to require a generator owner to 
provide model reviews under MOD-026-1; (C) why the ``technically 
justified'' provision is not also included in MOD-027-1; (D) whether 
MOD-025-2 should include more flexibility to verify unit reactive power 
capability; and (E) assignment of violation severity levels.

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

    29. The applicability thresholds in Reliability Standards MOD-026-1 
and MOD-027-1 are higher than for Reliability Standards MOD-025-2, PRC-
019-1 and PRC-024-1, and could exclude approximately 20 percent of bulk 
electric system installed MVA from compliance.\41\ In contrast to the 
greater than 20 MVA applicability thresholds set forth in the other 
three Reliability Standards in NERC's petition,\42\ MOD-026-1 and MOD-
027-1 would exclude units rated below 100 MVA (Eastern and Quebec 
Interconnections), 75 MVA (Western Interconnection) and 50 MVA (ERCOT 
Interconnection).\43\
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    \41\ See NERC Petition, Exhibit E (Summary of the Reliability 
Standard Development Proceeding and Complete Record of Development 
of Proposed Reliability Standard) section entitled ``Consideration 
of Comments on Draft Standard'' at 91 (indicating that the threshold 
in the proposed standard would limit applicability of the standard 
to 80 percent of installed MVA on an Interconnection basis).
    \42\ Reliability Standard MOD-025-2, Section 4.2 (Facilities); 
Reliability Standard PRC-019-1, Section 4.2 (Facilities); and 
Reliability Standard PRC-024-1, Section 4 (Applicability).
    \43\ Reliability Standard MOD-026-1, Section 4.2 (Facilities); 
Reliability Standard MOD-027-1, Section 4.2 (Facilities).
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    30. During the standard development process, several industry 
stakeholders commented that the standard drafting team should ensure 
that the applicability thresholds of MOD-026-1 and MOD-027-1 be aligned 
with the other three proposed Reliability Standards. In response, the 
standard drafting team stated that ``verification of excitation system 
is expensive both from a monetary and human resource viewpoint. 
Therefore, the [standard drafting team] believes that these 
applicability thresholds will result in substantial accuracy 
improvements to the excitation models and associated Reliability 
Standards, while not unduly mandating costly and time-consuming 
verification efforts.'' \44\
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    \44\ NERC Petition, Exhibit E (Summary of the Reliability 
Standard Development Proceeding and Complete Record of Development 
of Proposed Reliability Standard) section entitled ``Consideration 
of Comments on Draft Standard'' at 91.
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NOPR
    31. In the NOPR, the Commission sought comment on whether the 
higher applicability thresholds of MOD-026-1

[[Page 17016]]

and MOD-027-1, especially in areas with a high concentration of 
generators falling below the thresholds, would: (a) limit the 
effectiveness of proposed Reliability Standards MOD-026-1 and MOD-027-
1; or (b) adversely impact transmission planners' ability to reduce 
risk to Bulk-Power System reliability.\45\
---------------------------------------------------------------------------

    \45\ NOPR, 144 FERC ] 61,205 at P 27-28.
---------------------------------------------------------------------------

Comments
    32. NERC maintains that the standard drafting team determined that 
the applicability thresholds for Reliability Standards MOD-026-1 and 
MOD-027-1 are appropriate. NERC states that the standard drafting team 
determined, based on its expertise, that there is little, if any, 
reliability benefit to requiring every generator to comply with MOD-
026-1 and MOD-027-1. NERC explains that ``the standard drafting team 
believes that these applicability thresholds will result in substantial 
accuracy improvements to the excitation models and associated 
reliability-based limits determined by dynamic simulations, while 
balancing concerns regarding the resources it [sic] requires to 
implement verification efforts.'' \46\ NERC notes that the resources 
required to implement verification efforts can be extensive: ``many 
entities will require the use of consultants to perform the needed 
tests and model validations due to the expertise required. For example, 
it was observed in the SERC field trial that using consultants for MOD-
026-1 cost roughly $20,000 to $30,000 for one unit.'' \47\ NERC further 
states that Section 4.2.4 of MOD-026-1, allowing transmission planners 
to request information from all generators when ``technically 
justified,'' confirms that the higher applicability threshold ``will 
not limit the effectiveness of'' Reliability Standards MOD-026-1 and 
MOD-027-1.\48\
---------------------------------------------------------------------------

    \46\ NERC Comments at 4-5.
    \47\ Id. 5, n.7 (citing SERC Engineering Committee Generation 
Standards Field Test Report at 3 (June 15, 2007) (included in 
Exhibit E to the NERC Petition)).
    \48\ Id. 5.
---------------------------------------------------------------------------

    33. ELCON, EEI, and APS state that excluding approximately 20 
percent of MVA from the applicability of MOD-026-1 and MOD-027-1 will 
not limit the effectiveness of these Reliability Standards. ELCON 
states that the higher thresholds would not undermine the effectiveness 
of MOD-026-1 and MOD-027-1 or hamper ``transmission planners' ability 
to reduce risk to the Bulk-Power System.'' \49\ EEI states that it 
``does not view the higher thresholds utilized in the two proposed 
standards as inappropriate nor do we believe it will diminish 
reliability or adversely impact transmission planners' ability to 
reduce risk to the [Bulk- Power System].'' \50\ Rather, EEI asserts 
that the thresholds ``would be expected to enhance reliability by 
focusing the limited expertise available for model verification at the 
units which make the most impact to the dynamic performance of the 
power system.'' \51\ APS supports the higher thresholds for Reliability 
Standards MOD-026-1 and MOD-027-1 because there is limited benefit to 
reliability to require every generator, regardless of size, to comply, 
and ``the owners of the smaller units are still expected to provide 
correct estimated model data for use in simulation.'' \52\ APS asserts 
that the cost of performing the required model verification for a 
generation unit is significant and does not vary considerably based on 
the size of the unit. ``Currently, there are a limited number of 
individuals with the expertise necessary to perform this model 
verification, and the costs to hire an expert range between $10,000 and 
$20,000 for each generator unit tested.'' \53\
---------------------------------------------------------------------------

    \49\ ELCON Comments at 2.
    \50\ EEI Comments at 5.
    \51\ Id.
    \52\ APS Comments at 4.
    \53\ Id. 3-4.
---------------------------------------------------------------------------

    34. Idaho Power and ISO-NE state that excluding approximately 20 
percent of MVA from the applicability of MOD-026-1 and MOD-027-1 would 
limit the effectiveness of the Reliability Standards. Idaho Power 
maintains that many registered generator owners will not be required to 
comply with the data verification standards, which will ultimately 
reduce the overall effectiveness of Reliability Standards MOD-026-1 and 
MOD-027-1.\54\ Idaho Power bases its comments largely upon its 
experience with the WECC Modeling and Validation Workgroup (WECC 
Workgroup), which concluded that the higher thresholds would undermine 
modeling and simulation accuracy for the WECC region because 
``[e]xcluding approximately 20 percent of generators based upon 
different thresholds can lead to very different interpretations of 
system reliability.'' \55\ Idaho Power notes that the current WECC 
policy requiring validation at an aggregate unit threshold of 20 MVA 
has ``greatly improved the accuracy of system models for dynamic 
simulation [and] a safer and more reliable operation of the WECC 
Interconnection.'' \56\ Further, Idaho Power states that generation 
resources subject to Reliability Standards MOD-026-1 and MOD-027-1 are 
not spread evenly throughout the interconnection-wide model of the 
Western Interconnection, which will result in some areas being 
represented with a lower percentage of validated generation models.\57\ 
Idaho Power asserts that the higher thresholds limit the overall 
effectiveness of the Reliability Standards and believes the Commission 
should adopt a 10 MVA single unit and 20 MVA aggregate thresholds for 
the Western Interconnection.\58\
---------------------------------------------------------------------------

    \54\ Idaho Power Comments at 2.
    \55\ Id. 3.
    \56\ Id.
    \57\ Id.
    \58\ Id. 4.
---------------------------------------------------------------------------

    35. ISO-NE states that ``[t]he 100 MVA threshold is too high [and] 
would limit the effectiveness of these standards and would adversely 
impact ISO-NE's ability to reduce risk to Bulk Power System reliability 
by excluding too many generating units in New England.'' \59\ ISO-NE 
believes the use of the 20 MVA threshold is supported by NERC's 
registration requirements and the Commission's determination that 
``generating units with a capacity as low as 20 MVA can have a 
significant enough impact that they must comply with the Reliability 
Standards.'' \60\ ISO-NE asserts that inaccurate information for a 
single generating unit below 100 MVA could impact area studies, and 
units below 100 MVA may collectively impact system operating limits. 
Finally, ISO-NE raises a concern that exempting generating units under 
100 MVA is inconsistent with the high importance placed by NERC and the 
Commission on Reliability Standard TPL-001-4 Requirement R1.\61\ ISO-NE 
also maintains that the application of the ``capacity factor 
exemption'' in MOD-026-1, Attachment 1 is unclear. ISO-NE states that, 
``If large units with low capacity factors are also exempted from 
verification, then overall system reliability will be further 
reduced.'' \62\
---------------------------------------------------------------------------

    \59\ ISO-NE Comments at 2-3.
    \60\ Id. 3.
    \61\ Id. 3-4 (citing Transmission Planning Reliability 
Standards, Order No. 786, 145 FERC ] 61,051, at P 3 (2013) 
(directing NERC to change the VRF for Requirement R1 from medium to 
high)). TPL-001-4, Requirement R1 requires transmission planners and 
planning coordinators to maintain system models that represent 
projected system conditions.
    \62\ Id. 5.
---------------------------------------------------------------------------

    36. Like Idaho Power and ISO-NE., ITC states that it is concerned 
about the aggregate effect that excluding generators will have on the 
accuracy of transmission system stability studies, particularly for 
areas of the transmission system where excluded generating units are 
more highly concentrated.\63\ However, ITC maintains that its concern

[[Page 17017]]

is ameliorated by the provision in MOD-026-1 allowing transmission 
planners to compel generators deemed to have ``technically justified'' 
units below the specified threshold to provide such information in 
order to more accurately assess system stability.
---------------------------------------------------------------------------

    \63\ ITC Comments at 5-6.
---------------------------------------------------------------------------

Commission Determination
    37. The Commission is persuaded by the comments submitted by NERC 
and others that the higher applicability thresholds of Reliability 
Standards MOD-026-1 and MOD-027-1 are appropriate for a continent-wide 
standard. Moreover, as NERC and ITC point out, Section 4.2.4 of 
Reliability Standard MOD-026-1 allows transmission planners to request 
a model review and related verification information in accordance with 
Requirement R5 from generators below the applicability threshold when 
``technically justified'' (where the simulated unit or plant response 
does not match the measured unit or plant response). In addition, as 
APS observed, the higher applicability threshold does not excuse 
generator owners with small units from the expectation that estimated 
model data they provide to transmission planners for use in simulations 
will be accurate. In response to commenters that expressed concerns, in 
areas where there is a large concentration of small generators, the 
Commission notes that Regional Entities could develop more stringent 
requirements, such as a regional standard or regional criteria or 
process, to assure greater modeling accuracy.\64\
---------------------------------------------------------------------------

    \64\ For example, the WECC Modeling and Validation Workgroup 
concluded that WECC should develop a regional Reliability Standard 
based upon WECC's existing policy that establishes thresholds of 10 
MVA and 20 MVA for single unit and aggregate unit validation 
respectively.
---------------------------------------------------------------------------

    38. We reject ISO-NE's argument that the applicability threshold is 
somehow inconsistent with the directive to NERC in Order No. 786 to 
raise the violation severity level from ``medium'' to ``high'' for 
Reliability Standard TPL-001-4, Requirement R1, which requires 
transmission planners and planning coordinators to maintain system 
models.\65\ We are not persuaded that the violation severity level for 
Reliability Standard TPL-001-4, Requirement R1 is relevant to the 
applicability threshold for Reliability Standards MOD-026-1 and MOD-
027-1 or how it substantiates ISO-NE's claim that the applicability 
threshold reduces overall reliability.\66\
---------------------------------------------------------------------------

    \65\ Transmission Planning Reliability Standards, Order No. 786, 
145 FERC ] 61,051, at P 3 (2013).
    \66\ We likewise reject ISO-NE's comments regarding application 
of the capacity factor exemption in Attachment 1 because ISO-NE 
fails to substantiate the alleged risk of applying the capacity 
factor exemption to large units.
---------------------------------------------------------------------------

B. Process for Identifying ``Technically Justified'' Generating Units 
in MOD-026-1

NERC Petition
    39. Reliability Standard MOD-026-1 applies to generating units that 
are connected to the bulk electric system when ``technically 
justified.'' Specifically, Applicability Section 4.2.4 allows a 
transmission planner to compel a generator owner to provide model 
reviews and related information in accordance with Requirement R5 if 
the transmission planner demonstrates ``that the simulated unit or 
plant response does not match the measured unit or plant response.'' 
\67\ Under such circumstances, generator owners with one or more 
``technically justified'' units must comply with Reliability Standard 
MOD-026-1, even though each such unit's MVA rating is below the stated 
MVA threshold for applicability.
---------------------------------------------------------------------------

    \67\ Reliability Standard MOD-026-1, Applicability section 
4.2.4, n.2 defining ``technical justification.''
---------------------------------------------------------------------------

NOPR
    40. In the NOPR, the Commission stated that while it agrees with 
the intent of this section, the way transmission planners would become 
aware of discrepancies between simulated units and measured units 
(i.e., the basis for ``technically justified'' determinations) is 
unclear. The NOPR stated that the technical justification, or 
discrepancies between simulated units and measured units, suggests that 
there should be some benchmark available in the process by which 
transmission planners identify generator owners for compliance with 
MOD-026-1. The NOPR observed that the Final Blackout Report on the 
August 2003 blackout stated that ``the regional councils are to 
establish and begin implementing criteria and procedures for validating 
data used in power flow models and dynamic simulations by benchmarking 
model data with actual system performance.'' \68\ The Commission sought 
comment as to whether the means or process for transmission planners to 
determine whether a generator owner's unit is ``technically justified'' 
is sufficiently clear and workable. The Commission also requested 
comment as to whether additional details regarding how the process will 
be implemented should be included in an attachment to Reliability 
Standard MOD-026-1.\69\
---------------------------------------------------------------------------

    \68\ U.S.-Canada Power System Outage Task Force (Task Force), 
Final Report on the August 14, 2003 Blackout in the United States 
and Canada: Causes and Recommendations (April 2004) (Final Blackout 
Report), Recommendation 24, available at http://www.ferc.gov/industries/electric/indus-act/blackout.asp.
    \69\ NOPR, 144 FERC ] 61,205 at PP 29-30.
---------------------------------------------------------------------------

Comments
    41. NERC maintains that the process for transmission planners to 
determine whether a generator owner's unit is ``technically justified'' 
is clear and workable. NERC states that the ``technically justified'' 
provision in Reliability Standard MOD-026-1 expands the applicability 
of the standard, when necessary, i.e., where the simulated unit or 
plant response does not match the measured unit or plant response. NERC 
further states that the ``standard drafting team determined that it is 
readily apparent when measured data does not match simulations and that 
such situations will be sufficiently clear and workable.'' \70\
---------------------------------------------------------------------------

    \70\ NERC Comments at 5.
---------------------------------------------------------------------------

    42. ELCON, APS, and EEI believe that the process for transmission 
planners to determine whether a generator owner's unit is ``technically 
justified'' is clear and workable. ELCON maintains that MOD-026-1 is 
``written with sufficient clarity regarding whether a generator owner's 
unit is `technically justified.' '' \71\ APS supports the ``technical 
justification'' provision as written, and believes that the provision 
``allows transmission planners and planning coordinators the 
opportunity to address discrepancies between unit simulations and 
measured unit data,'' which APS asserts will be ``evident and clear.'' 
\72\ EEI believes that the standard as written is ``sufficiently clear 
and enforceable,'' because ``[a]lthough specific unit performance 
levels can deviate from a model's predicted response, we do not find 
this to be problematic; rather, planners need latitude to make 
judgments based on their knowledge of their regions and what's 
necessary to assess bulk electric system reliability in their area.'' 
\73\ EEI states that the standard drafting team ``struck a reasonable 
balance between providing necessary tools for planners without making 
[an] unnecessary prescriptive determination as to how to ensure those 
tools would be applied.'' \74\ EEI cautions against adding details that 
``might unintentionally limit or otherwise undermine the regional 
knowledge and judgment of transmission planners.'' \75\ Rather, EEI 
requests that any changes to MOD-026-

[[Page 17018]]

1 be postponed until industry experience confirms they are needed.
---------------------------------------------------------------------------

    \71\ ELCON Comments at 2.
    \72\ APS Comments at 5.
    \73\ EEI Comments at 5.
    \74\ Id. 6.
    \75\ Id.
---------------------------------------------------------------------------

    43. Idaho Power and ISO-NE state that the process for transmission 
planners to determine whether a generator owner's unit is ``technically 
justified'' is unclear, and both assert that the best fix involves 
lowering the applicability threshold. Idaho Power states that MOD-026-1 
does not clearly define what a ``match'' is or how to evaluate whether 
a match exists to satisfy the technically justified definition. Idaho 
Power believes that the Commission should add a provision in MOD-026-1 
to include ``technically justified'' units that meet the NERC registry 
requirements. Idaho Power seeks additional guidance on when a match 
between simulated and measured unit or plant responses occurs and the 
process a transmission planner should undertake to demonstrate such a 
match.\76\ ISO-NE states that it is concerned that the test described 
in MOD-026-1, Applicability Section 4.2.4 would require a disturbance 
to occur before a transmission planner could determine that a 
generating unit under 100 MVA is ``technically justified.'' ISO-NE 
asserts that ``[i]n order for the Transmission Planner to be able to 
demonstrate that a plant response does not match measured unit or plant 
response, an event must first occur.'' \77\ ISO-NE believes that 
reducing the threshold from 100 MVA to 20 MVA would ``eliminate the 
need for this test, or at least reduce its significance.'' \78\
---------------------------------------------------------------------------

    \76\ Idaho Power Comments at 4.
    \77\ ISO-NE Comments at 5.
    \78\ Id. 5.
---------------------------------------------------------------------------

Commission Determination
    44. The Commission is persuaded that the basis and associated 
process for a transmission planner to demonstrate that it is 
``technically justified'' for a generator owner below the applicability 
threshold to comply with Requirement R5 of Reliability Standard MOD-
026-1 under Section 4.2.4 is sufficiently clear and workable. We agree 
with EEI that a more prescriptive, ``one size fits all'' approach could 
``unintentionally limit or otherwise undermine the regional knowledge 
and judgment of transmission planners.'' \79\ Further, in the standard 
drafting team's technical judgment, discrepancies between simulations 
and measured data will be ``readily apparent.'' \80\ APS concurs, 
stating that such discrepancies will be ``evident and clear.'' \81\
---------------------------------------------------------------------------

    \79\ EEI Comments at 6.
    \80\ NERC Comments at 5.
    \81\ APS Comments at 5.
---------------------------------------------------------------------------

    45. Further, the Commission is not persuaded that a change to the 
applicability thresholds for the Eastern Interconnection, or to the 
technical justification provision for sub-100 MVA generators, is 
justified based on ISO-NE's concern that a disturbance would have to 
occur before a transmission planner could determine that a generating 
unit is technically justified under Section 4.2.4 of MOD-026-1. ISO-NE 
is correct that the ``demonstration'' required by the technical 
justification provision for sub-100 MVA generators anticipates a system 
event that would indicate a discrepancy between actual and measured 
unit response. However, local events that occur in the normal course of 
operations could provide adequate information for a transmission 
planner to demonstrate the need to invoke the technically justified 
provision of Reliability Standard MOD-026-1. While the Commission is 
satisfied that NERC has proposed a Reliability Standard that improves 
the reliability of the Bulk-Power System on a continent-wide basis, 
ISO-NE may seek to develop a more stringent regional approach to 
address its particular concerns, either through the Northeast Power 
Coordinating Council's regional Reliability Standards process, an ISO-
NE policy, or other means. Considering the strong technical support for 
Section 4.2.4 as written, we believe the soundest approach is to give 
the industry time to evaluate the effectiveness of the technically 
justified provision.

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

NERC Petition
    46. Reliability Standard MOD-027-1 does not contain a provision 
analogous to Applicability Section 4.2.4 of MOD-026-1, which allows a 
transmission planner to determine whether technical justification 
exists to subject a generator owner with units falling below the stated 
applicability threshold to that Reliability Standard. MOD-027-1 and 
MOD-026-1 have the same applicability thresholds (100 MVA for the 
Eastern and Quebec Interconnections, 75 MVA for the Western 
Interconnection, and 50 and 75 MVA for individual and aggregate 
nameplate ratings, respectively, in ERCOT). However, these Reliability 
Standards verify models and data of different functions: MOD-026-1 
applies to generator excitation control systems and plant volt/var 
control functions; MOD-027-1 applies to turbine/governor and load 
control or active power/frequency control functions.
NOPR
    47. In the NOPR, the Commission sought comment as to whether the 
technical justification provision should also be included in 
Reliability Standard MOD-027-1 to provide an opportunity for 
transmission planners to address discrepancies between unit simulations 
and generator owners' measured unit data.
Comments
    48. NERC states that this issue was considered and rejected by the 
standard drafting team. NERC states that the standard drafting team 
determined that, in contrast to MOD-026-1, the data required by 
Reliability Standard MOD-027-1 are more subjective and difficult to 
verify because the verification of governor response models is not 
consistent from one event to another. NERC further states that 
Reliability Standard MOD-026-1 ``addresses the verification of 
excitation control system dynamic models--whose modeled behavior in the 
simulation of system events is a large factor in the determination of 
local stability limits. In contrast, proposed Reliability Standard MOD-
027-1 addresses the verification of turbine/governor and load control 
models--and this equipment rarely, if ever, contributes to a local 
stability limit.'' \82\
---------------------------------------------------------------------------

    \82\ NERC Comments at 6.
---------------------------------------------------------------------------

    49. EEI, APS and ELCON believe that it is not necessary to include 
the technical justification provision in MOD-027-1. EEI states that it 
is unlikely that turbine/governor controls ``will materially contribute 
to a stability limit, while unit governor response has been shown to be 
inconsistent from one frequency event to the next thereby making such a 
provision unworkable and of little value.'' \83\ APS agrees, stating 
that turbine/governor data verified under MOD-027-1 is not consistent 
across events, and is more difficult to verify than excitation control 
system data verified under MOD-026-1. Further, APS states that a 
discrepancy between a modeled response and a measured response ``does 
not necessarily mean that the model is incorrect. The subjective nature 
of this determination makes it unsuitable as a standard requirement.'' 
\84\
---------------------------------------------------------------------------

    \83\ EEI Comments at 6-7.
    \84\ APS Comments at 5.
---------------------------------------------------------------------------

    50. Idaho Power and ITC believe that the technical justification 
provision in MOD-026-1 should be included in Reliability Standard MOD-
027-1. Idaho

[[Page 17019]]

Power asserts that the ``[e]xclusion of the technical justification 
provision in this standard could lead to unverified modeling data. For 
Idaho Power, this would include entire regions of generation connected 
to the Bulk Electric System that would have unverified modeling data.'' 
\85\ Idaho Power notes that transmission planners perform dynamic 
simulation studies that require accurate turbine/governor models, 
including blackstart and under-frequency load shedding simulations. 
Idaho Power states that blackstart generators may fall below the 
threshold for compliance with Reliability Standard MOD-027-1 but meet 
NERC registry requirements.\86\ ITC states that the turbine/governor, 
load control, and active power/frequency control data required by MOD-
027-1 is just as necessary for accurate system modeling as the 
excitation control system and plant volt/var function data required by 
MOD-026-1. ITC asserts that to deprive a transmission planner of MOD-
027-1 models and data from technically justified units ``is just as 
deleterious to the transmission planner's ability to accurately assess 
system stability as it would be if the (sic) such problems occurred 
with respect to MOD-026-1 data.'' \87\ ITC further asserts that failing 
to equip transmission planners with the technically justified 
provision, particularly for transmission systems that have high 
concentrations of generator owners below the applicability threshold, 
``will significantly degrade the accuracy of system models, and by 
extension, the overall reliability of the Bulk Electric System.'' \88\
---------------------------------------------------------------------------

    \85\ Idaho Power Comments at 5.
    \86\ Id. (noting that Reliability Standard EOP-005-2 Requirement 
R6 requires transmission operators to verify the dynamic performance 
of blackstart generators).
    \87\ ITC Comments at 6.
    \88\ Id.
---------------------------------------------------------------------------

Commission Determination
    51. The Commission is persuaded that the technical justification 
provision is not workable in MOD-027-1 because there is more 
subjectivity involved in verifying the data pertaining to turbine/
governors, the equipment subject to the modeling verification 
requirements of MOD-027-1. As NERC explains, the modeling data for 
excitation control systems under MOD-026-1 is objective and consistent, 
while turbine/governor response model verification under MOD-027-1 is 
not consistent from one event to another. The Commission agrees with 
APS that determining whether the difference between a model response 
and a measured response reflects a model defect is subjective and, 
therefore, the technical justification provision is inappropriate for 
MOD-027-1. While commenters supporting the inclusion of the technical 
justification provision in MOD-027-1 assert that verified data for both 
excitation control systems and turbine/governor response are necessary 
for accurate system modeling, they do not adequately address the 
implementation issues resulting from the subjective and inconsistent 
nature of turbine/governor response data. Therefore, we agree with 
commenters that the difference in the equipment being verified makes 
including the technical justification provision in Reliability Standard 
MOD-027-1 inappropriate.

D. Whether Generators Need More Flexibility in Verifying Unit Reactive 
Capability Under MOD-025-2

NERC Petition
    52. Reliability Standard MOD-025-2 consists of three requirements 
and two Attachments that are incorporated into each of the 
requirements. Attachment 1 contains time tables for conducting 
verifications and specifications for applicable facilities. Attachment 
2 contains forms intended to be used to report the information 
identified in Attachment 1. Requirements R1 and R2 require generator 
owners to verify Real Power capability and Reactive Power capability, 
respectively, and Requirement R3 requires transmission owners to verify 
Reactive Power capability in accordance with Attachment 1. For each 
Requirement, Attachment 2 establishes a 90 calendar day period within 
which generator owners and transmission owners must submit information 
of ``either: (i) The date the data is recorded for a staged test; or 
(ii) the date the data is selected for verification using historical 
operational data.''
Comments
    53. While not addressed in the NOPR, G&T Cooperatives, EEI and 
ELCON express concern about what they believe is a lack of flexibility 
in the reactive power verification requirements in Reliability Standard 
MOD-025-2. G&T cooperatives assert that ``MOD-025-2 would establish a 
needlessly prescriptive approach to verifying unit reactive 
capability.'' Therefore, while they support the Commission's approval 
of MOD-025-2, G&T Cooperatives request that the Commission ``direct 
NERC to develop a revised version of MOD-025-2 that permits Generator 
Owners the flexibility to verify unit reactive capability using the 
method that best meets the individual needs of that Generator Owner 
provided it can demonstrate that the method is effective.'' \89\
---------------------------------------------------------------------------

    \89\ G&T Cooperatives Comments at 2.
---------------------------------------------------------------------------

    54. ELCON views MOD-025-2 as ``needlessly prescriptive'' and 
asserts that ``at many of the industrial facilities of ELCON members 
with `behind the meter' generation, its implementation would raise 
significant economic and safety concerns and be technically and 
economically infeasible.'' \90\ While believing that Reliability 
Standard MOD-025-2 ``may inhibit companies from making use of modeling 
tools,'' EEI states that ``rather than remand the MOD-025-2 standard 
proposed for approval, EEI envisions that the standard can serve as an 
initial basis for now.'' \91\
---------------------------------------------------------------------------

    \90\ ELCON Comments at 2.
    \91\ EEI Comments at 2.
---------------------------------------------------------------------------

Commission Determination
    55. The Commission is not persuaded that Reliability Standard MOD-
025-2 provides insufficient flexibility for generator owners and 
transmission owners to verify reactive power capability, or that it is 
overly prescriptive. Therefore, the Commission will not direct 
modification of the Reliability Standard. The process for verifying 
reactive capability under MOD-025-2, Requirement 2.2, requires an 
entity to submit information to its transmission planner (either 
through Attachment 2 to MOD-025-2 or a form containing the same 
information) within 90 calendar days of either: (i) The date the data 
are recorded for a staged test; or (ii) the date the data are selected 
for verification using historical operational data. This requirement 
affords a generator owner or transmission owner with the flexibility to 
perform verification using either staged test or historical operating 
data. Further, the standard drafting team rejected the G&T 
Cooperatives' view that new analytical software tools and engineering 
studies alone can adequately model unit reactive capability.\92\
---------------------------------------------------------------------------

    \92\ See, e.g., NERC Petition, Exhibit E (Summary of the 
Reliability Standard Development Proceeding and Complete Record of 
Development of Proposed Reliability Standard) section entitled 
``Consideration of Comments on Draft Standard'' at 75.
---------------------------------------------------------------------------

    56. Rather, the Commission agrees with EEI's suggestion that during 
the implementation of Reliability Standard MOD-025-2, NERC, in 
consultation with EEI and other industry representatives, should 
consider potential modifications to MOD-025-2 ``that would better 
reflect rapidly evolving modeling technology, as well

[[Page 17020]]

as successful methods and processes already in use by some companies.'' 
\93\
---------------------------------------------------------------------------

    \93\ EEI Comments at 3.
---------------------------------------------------------------------------

E. Assignment of Violation Severity Levels

1. Violation Severity Level for MOD-026-1, Requirement R6 and MOD-027-
1, Requirement R5
NOPR
    57. In the NOPR, the Commission expressed concern regarding the 
proposed violation severity level for Requirement R6 of MOD-026-1 and 
Requirement R5 of MOD-027-1. For those requirements, NERC proposed a 
``severe'' violation severity level when a transmission planner's 
written response that a generation owner's verified model is useable 
``omitted confirmation for all specified model criteria'' in the 
requirement. NERC did not propose any violation severity level for a 
violation of the last sentence of these requirements: ``If the model is 
not useable, the [transmission planner] shall provide a technical 
description of why the model is not useable.'' The Commission noted 
that compliance with this obligation is no less important than 
compliance with the other obligations of these requirements. The 
Commission further stated that the lack of a violation severity level 
for this type of violation is inconsistent with the Commission's 
Violation Severity Level Guideline 3, because the proposed violation 
severity level does not address all of the obligations in these 
requirements. Therefore, the Commission proposed to direct NERC to 
submit a violation severity level that addresses a violation of the 
last sentence of Requirement R6 of MOD-026-1 and Requirement R5 of MOD-
027-1.
Commission Determination
    58. No entity submitted comments on this matter. Accordingly, as 
proposed in the NOPR, we direct NERC to submit a violation severity 
level that addresses a transmission planner's obligation to provide a 
technical description of why a model submitted by a generation owner is 
not usable for Requirement R6 of MOD-026-1 and Requirement R5 of MOD-
027-1.
2. Violation Severity Level for PRC-024-1, Requirements R1 and R2
NOPR
    59. In the NOPR, the Commission addressed NERC's proposal to assign 
a ``severe'' violation severity level for a violation of Requirements 
R1 and R2 of PRC-024-1 when a generator owner fails to set its 
generator frequency or voltage protective relays so that they do not 
trip within the criteria listed within Requirements R1 and R2 unless 
there is a documented and communicated regulatory or equipment 
limitation under Requirement R3. We observed that Requirements R1 and 
R2 of PRC-024-1 include three and four bulleted exceptions, 
respectively, to the requirement that the generator frequency or 
voltage protective relays not trip applicable generating unit(s) within 
the ``no-trip zone'' of Attachment 1or 2 to that standard. For 
Requirements R1 and R2, only the third and fourth exception, 
respectively, relate to a regulatory or equipment limitation in 
accordance with Requirement R3. Therefore, the Commission noted that 
the wording of the violation severity level for Requirements R1 and R2 
could be read to mean that a generator owner that set generator 
frequency or voltage protective relaying to trip within the ``no-trip 
zone'' based on either the first or second exception in Requirement R1 
and either the first, second or third exception in R2, violated that 
Requirement with a severe violation severity level. To avoid such an 
interpretation, the Commission asked NERC to confirm in its comments 
that a generator owner will not violate Requirement R1 or R2 if it sets 
generator frequency or voltage protective relaying to trip within the 
``no-trip zone'' based upon the exceptions for Requirements R1 and R2.
Commission Determination
    60. In its comments, NERC responded to the Commission's request by 
stating that ``[c]onsistent with the NOPR, NERC confirms this 
statement.'' \94\ Accordingly, with that clarification, the Commission 
approves the violation severity level for Requirements R1 and R2 of 
PRC-024-1.
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    \94\ NERC Comments at 7.
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V. Information Collection Statement

    61. The following collections of information contained in the Final 
Rule are subject to review by the Office of Management and Budget (OMB) 
under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).\95\ 
OMB's regulations require that OMB approve certain reporting and 
recordkeeping requirements (collections of information) imposed by an 
agency.\96\ Upon approval of a collection of information, OMB will 
assign an OMB control number and expiration date. Respondents subject 
to the filing or recordkeeping requirements of this rule will not be 
penalized for failing to respond to these collections of information 
unless the collections of information display a valid OMB control 
number.
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    \95\ 44 U.S.C. 3507(d) (2006).
    \96\ 5 CFR 1320.11 (2013).
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    62. The Commission will submit these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the PRA. The Commission received comments on specific requirements 
in the Reliability Standards approved in this Final Rule. However, the 
Commission received no comments on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimate, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing the respondents' burden, including the 
use of automated information techniques.
    63. This Final Rule approves five Reliability Standards: MOD-025-2, 
MOD-026-1, MOD-027-1, PRC-019-1 and PRC-024-1. Reliability Standard 
MOD-025-2 would replace Reliability Standards MOD-024-1 and MOD-025-1. 
In Order No. 693, the Commission did not approve or remand MOD-024-1 
and MOD-025-1, as they were identified as ``fill-in-the-blank'' 
Reliability Standards for which NERC had not submitted regional 
procedures.
    64. Public Reporting Burden: The burden and cost estimates below 
are based on the increase in the reporting and recordkeeping burden 
imposed by the approved Reliability Standards. Our estimate of the 
number of respondents affected is based on the NERC Compliance Registry 
as of July 30, 2013.\97\ According to the Compliance Registry, NERC has 
registered 901 generator owners and 187 transmission planners within 
the United States. Currently, synchronous condensers are not included 
in the NERC Compliance Registry, and the standard drafting team stated 
that the number of transmission owners who own synchronous condensers 
is extremely low.
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    \97\ NERC Compliance Registry (July 30, 2013), available at 
http://www.nerc.com/pa/comp/Registration%20and%20Certification%20DL/NERC_Compliance_Registry_Matrix_Summary20130730.pdf.
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    65. The burden estimates reflect the standards and the number of 
affected entities (e.g., the generator owner's one-time burden to 
develop testing procedures, verification process, and process for 
collection of data).

[[Page 17021]]

----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of        Average
            FERC-725G               respondents    responses per   burden hours    Total annual    Total annual
                                       \98\         respondent     per response    burden hours      cost \99\
                                             (1)             (2)             (3)     (1) x (2) x  ..............
                                                                                             (3)
----------------------------------------------------------------------------------------------------------------
 PRC-019-1 (Coordination of Generating Unit or Plant Capabilities, Voltage Regulating Controls, and Protection)
----------------------------------------------------------------------------------------------------------------
Develop coordination and relay               738               1               8           5,904        $307,008
 settings procedures............              GO                                        one-time        one-time
                                                                                                        ($52/hr)
Relay Settings..................             738               1               8           5,904        $413,280
                                              GO                                                        ($70/hr)
Evidence Retention..............             738               1               1             738         $20,664
                                              GO                                                        ($28/hr)
                                                 ---------------------------------------------------------------
    Total.......................  ..............  ..............  ..............          12,546        $740,952
----------------------------------------------------------------------------------------------------------------
                      PRC-024-1 (Generator Frequency and Voltage Protective Relay Settings)
----------------------------------------------------------------------------------------------------------------
Develop coordination and relay               738               1               8           5,904        $307,008
 settings procedures............              GO                                        one-time        one-time
                                                                                                        ($52/hr)
Relay Settings..................             738               1               8           5,904        $413,280
                                              GO                                                        ($70/hr)
Evidence Retention..............             738               1               1             738         $20,664
                                              GO                                                        ($28/hr)
                                                 ---------------------------------------------------------------
    Total.......................  ..............  ..............  ..............          12,546        $740,952
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of        Average
            FERC-725L               respondents    responses per   burden hours    Total annual    Total annual
                                       \98\         respondent     per response    burden hours      cost \99\
                                             (1)             (2)             (3)     (1) x (2) x  ..............
                                                                                             (3)
----------------------------------------------------------------------------------------------------------------
   MOD-025-2 (Verification and Data Reporting of Generator Real and Reactive Power Capability and Synchronous
                                      Condenser Reactive Power Capability)
----------------------------------------------------------------------------------------------------------------
Develop testing procedures,                  738               1               8           5,904        $307,008
 verification process, and                    GO                                        one-time        one-time
 process for collection of data.                                                                        ($52/hr)
Attachment 2....................             738               1               6           4,428        $309,960
                                              GO                                                        ($70/hr)
Evidence Retention..............             738               1               1             738         $20,664
                                              GO                                                        ($28/hr)
                                                 ---------------------------------------------------------------
    Total.......................  ..............  ..............  ..............          11,070        $637,632
----------------------------------------------------------------------------------------------------------------
  MOD-026-1 (Verification of Models and Data for Generator Excitation Control System or Plant Volt/Var Control
                                                   Functions)
----------------------------------------------------------------------------------------------------------------
Develop testing procedures,                  356               1               8  2,848 one-time        $148,096
 verification process, and                    GO                                                        one-time
 process for collection of data.                                                                        ($52/hr)
Instructions for obtaining                   187               1               8           1,496        $104,720
 excitation control system or                 TP                                        one-time        one-time
 plant voltage/variance control                                                                         ($70/hr)
 function model.................
Documentation on generator                   356               1               8           2,848        $199,360
 verification...................              GO                                                        ($70/hr)
Evidence Retention..............             543               1               1             543         $15,204
                                       GO and TP                                                        ($28/hr)
                                                 ---------------------------------------------------------------
    Total.......................  ..............  ..............  ..............           7,735        $467,380
----------------------------------------------------------------------------------------------------------------
   MOD-027-1 (Verification of Models and Data for Turbine/Governor and Load Control or Active Power/Frequency
                                               Control Functions)
----------------------------------------------------------------------------------------------------------------
Develop testing procedures,                  356               1               8           2,848        $148,096
 verification process, and                    GO                                        one-time        one-time
 process for collection of data.                                                                        ($52/hr)
Instructions for obtaining                   187               1               8           1,496        $104,720
 turbine/governor and load                    TP                                        one-time        one-time
 control or active power/                                                                               ($70/hr)
 frequency control model........

[[Page 17022]]

 
Documentation on generator                   356               1               8           2,848        $199,360
 verification...................              GO                                                        ($70/hr)
Evidence Retention..............             543               1               1             543         $15,204
                                       GO and TP                                                        ($28/hr)
                                                 ---------------------------------------------------------------
    Total.......................  ..............  ..............  ..............           7,735        $467,380
                                                 ===============================================================
        Total for RM13-16.......  ..............  ..............  ..............  ..............      $3,054,296
                                                                                                     ($1,627,640
                                                                                                         without
                                                                                                        one-time
                                                                                                          costs)
----------------------------------------------------------------------------------------------------------------

     
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    \98\ GO = Generator Owner, TP = Transmission Planner.
    Assuming 10 generators per generator owner, using EIA-860 2012 
generator data (http://www.eia.gov/electricity/data/eia860/) total 
number of units > 20 MW are 7,379, which results in 738 generator 
owners. Note that the number of generator owner respondents used to 
calculate the public reporting burden for MOD-026-1 and MOD-027-1 is 
356, due to the higher applicability threshold for those Reliability 
Standards.
    \99\ The estimates for cost per hour are derived as follows:
    $52/hour, the average of the salary plus benefits for an 
engineer, from Bureau of Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm andhttp://www.bls.gov/news.release/ecec.nr0.htm
    $70/hour, the average of the salary plus benefits for a manager 
and an engineer, from Bureau of Labor and Statistics at http://bls.gov/oes/current/naics3_221000.htm and http://www.bls.gov/news.release/ecec.nr0.htm.
    $28/hour, based on a Commission staff study of record retention 
burden cost.
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    Title: Mandatory Reliability Standards for the Bulk-Power System.
    Action: Revisions to FERC-725G and FERC-725L.
    OMB Control Nos: 1902-0252 and 1902-0261.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time, every five years, and every ten 
years.
    Necessity of the Information: The proposed approval of the five 
Reliability Standards noted above implements the Congressional mandate 
of the Energy Policy Act of 2005 to develop mandatory and enforceable 
Reliability Standards to better ensure the reliability of the nation's 
Bulk-Power System.
    Internal Review: The Commission has reviewed the proposed approval 
to the Reliability Standards and made a determination that its action 
is necessary to implement section 215 of the FPA. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimate associated with the 
information requirements.
    66. 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].
    67. For submitting comments concerning the collection of 
information and the associated burden estimates, please send your 
comments to the Commission, and to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission, 
phone: (202) 395-4638, fax: (202) 395-7285]. For security reasons, 
comments to OMB should be submitted by email to: oira_submission@omb.eop.gov. Comments submitted to OMB should include Docket 
Number RM13-16-000 and OMB Control Number 1902-0252 and 1902-0261.

VI. Regulatory Flexibility Act Certification

    68. The Regulatory Flexibility Act of 1980 (RFA) \100\ 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.\101\ 
Since the issuance of the Proposed Rule, the SBA has revised its size 
standard for electric utilities from an output based standard (megawatt 
hours) to number of employees (including affiliates). Under SBA's new 
size standards, Generator Owners and Transmission Planners likely come 
under one of four categories and associated size thresholds: \102\
---------------------------------------------------------------------------

    \100\ 5 U.S.C. 601-612 (2006).
    \101\ 13 CFR 121.101 (2013).
    \102\ 13 CFR 121.201, Sector 22, Utilities.
---------------------------------------------------------------------------

     Hydroelectric power generation at 500 employees.
     Fossil fuel electric power generation at 750 employees.
     Other electric power generation (e.g. solar, wind, 
geothermal, and others) at 250 employees.
     Electric bulk power transmission and control at 500 
employees
    69. According to US economic census data,\103\ over half of the 
firms in the categories above are small. However, currently FERC does 
not have information on how the economic census data compares with 
entities registered with NERC and is unable to estimate the number of 
small generator owners and transmission planners based on the new SBA 
definition. Regardless, FERC recognizes that the rule will impact small 
GOs and TPs and estimates the economic impact on each type of entity 
below.
---------------------------------------------------------------------------

    \103\ Data and further information is available from SBA at 
http://www.sba.gov/advocacy/849/12162.
---------------------------------------------------------------------------

    70. Proposed Reliability Standards MOD-025-2, MOD-026-1, MOD-027-1, 
PRC-019-1 and PRC-024-1, MOD-025-2 help ensure that generators remain 
in operation during specified voltage and frequency excursions, 
properly coordinate protective relays and generator voltage regulator 
controls, and ensure that generator models accurately reflect the 
generator's capabilities and equipment performance. The Commission 
estimates that the small entities to which Reliability Standards PRC-
019-1, PRC-024-1 and MOD-025-1 applies will

[[Page 17023]]

incur compliance \104\ and paperwork/record keeping costs \105\ 
totaling $655,228 ($13,372 per generator owner). For Reliability 
Standards MOD-026-1 and MOD-027-1, the Commission estimates that a 
subset of the small generator owner entities will incur compliance and 
paperwork/record keeping costs of $198,176 ($9,008 per generator 
owner).\106\ This will result in a per entity compliance and paperwork/
record-keeping cost for the subset of generator owners complying with 
MOD-026-1 and MOD-027-1 of $22,380 \107\ and the remaining small 
generator owners who only have to comply with PRC-019-1, PRC-024-1 and 
MOD-025-1 incurring a $13,372 cost per entity, as previously described. 
Additionally, small transmission planner entities will incur compliance 
and paperwork/record keeping costs \108\ totaling $49,392 ($1,176 per 
transmission planner) \109\ to comply with MOD-026-1 and MOD-027-1.
---------------------------------------------------------------------------

    \104\ Assuming 50 hours per generator owner per reliability 
standard for relay settings/testing and other non-paperwork based on 
$70/hour. These are non-paperwork related costs, not associated with 
the burden described in the information collection section above.
    \105\ This cost came from the above PRC-019-1, PRC-024-1, and 
MOD-025-2 tables in the information collection section.
    \106\ These two figures were not calculated correctly in the 
NOPR and have been corrected here.
    \107\ This figure was not calculated correctly in the NOPR and 
has been corrected here.
    \108\ This cost came from the above MOD-026-1 and MOD-027-1 
tables in the information collection section.
    \109\ These two figures were not calculated correctly in the 
NOPR and have been corrected here.
---------------------------------------------------------------------------

    71. The Commission does not consider the estimated costs per small 
entity to have a significant economic impact on a substantial number of 
small entities. Accordingly, the Commission certifies that this Final 
Rule will not have a significant economic impact on a substantial 
number of small entities.

VII. Environmental Analysis

    72. 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.\110\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\111\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \110\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \111\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

VIII. Document Availability

    73. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through 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.
    74. 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.
    75. 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.

IX. Effective Date and Congressional Notification

    76. These regulations are effective May 27, 2014. The Commission 
has determined, with the concurrence of the Administrator of the Office 
of Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-06725 Filed 3-26-14; 8:45 am]
BILLING CODE 6717-01-P