isting procedure. Otherwise, a proposed procedural change
shall take effect only upon a finding by the Commission,
after notice and opportunity for comments, that the
change is just, reasonable, not unduly discriminatory or
preferential, is in the public interest, and satisfies the re-
quirements of subsection (d)(4).
‘‘(3) A change in governance or funding shall not
take effect unless the Commission finds that the change
is just, reasonable, not unduly discriminatory or pref-
erential, in the public interest, and satisfies the require-
ments of subsection (d)(4).
‘‘(4) The Commission, upon complaint or upon its
own motion, may require the Electric Reliability Organiza-
tion to amend the procedures, governance, or funding if
the Commission determines that the amendment is nec-
essary to meet the requirements of this section. The Elec-
tric Reliability Organization shall file the amendment in
accordance with paragraph (1) of this subsection.
‘‘(h) DELEGATIONS OF AUTHORITY.—(1) The Elec-
tric Reliability Organization shall, upon request by an en-
tity, enter into an agreement with such entity for the dele-
gation of authority to implement and enforce compliance
with organization standards in a specified geographic area
if the organization finds that the entity requesting the del-
egation satisfies the requirements of subparagraphs (A),
(B), (C), (D), (F), (J), and (K) of subsection (d)(4), and
if the delegation promotes the effective and efficient imple-
mentation and administration of bulk-power system reli-
ability. The Electric Reliability Organization may enter
into an agreement to delegate to the entity any other au-
thority, except that the Electric Reliability Organization
shall reserve the right to set and approve standards for
bulk-power system reliability.
‘‘(2) The Electric Reliability Organization shall file
with the Commission any agreement entered into under
this subsection and any information the Commission re-
quires with respect to the affiliated regional reliability en-
tity to which authority is to be delegated. The Commission
shall approve the agreement, following public notice and
an opportunity for comment, if it finds that the agreement
meets the requirements of paragraph (1), and is just, rea-
sonable, not unduly discriminatory or preferential, and is
in the public interest. A proposed delegation agreement
with an affiliated regional reliability entity organized on
an interconnection-wide basis shall be rebuttably pre-
sumed by the Commission to promote the effective and
efficient implementation and administration of bulk-power
system reliability. No delegation by the Electric Reliability
Organization shall be valid unless approved by the Com-
mission.
‘‘(3)(A) A delegation agreement entered into under
this subsection shall specify the procedures for an affili-
ated regional reliability entity to propose entity rules or
variances for review by the Electric Reliability Organiza-
tion. With respect to any such proposal that would apply
on an interconnection-wide basis, the Electric Reliability
Organization shall presume such proposal valid if made
by an interconnection-wide affiliated regional reliability
entity unless the Electric Reliability Organization makes
a written finding that the proposal—
‘‘(i) was not developed in a fair and open proc-
ess that provided an opportunity for all interested
parties to participate;
‘‘(ii) has a significant adverse impact on reli-
ability or commerce in other interconnections;
‘‘(iii) fails to provide a level of reliability of the
bulk-power system within the interconnection such
that it would constitute a serious and substantial
threat to public health, safety, welfare, or national
security; or
‘‘(iv) creates a serious and substantial burden
on competitive markets within the interconnection
that is not necessary for reliability.
‘‘(B) With respect to any such proposal that would
apply only to part of an interconnection, the Electric Reli-
ability Organization shall find such proposal valid if the
affiliated regional reliability entity or entities making the
proposal demonstrate that it—
‘‘(i) was developed in a fair and open process
that provided an opportunity for all interested par-
ties to participate;
‘‘(ii) would not have an adverse impact on com-
merce that is not necessary for reliability;
‘‘(iii) provides a level of bulk-power system reli-
ability adequate to protect public health, safety, wel-
fare, and national security, and would not have a
significant adverse impact on reliability; and
‘‘(iv) in the case of a variance, is based on le-
gitimate differences between regions or between sub-
regions within the affiliated regional reliability enti-
ty’s geographic area.
The Electric Reliability Organization shall approve or dis-
approve such proposal within 120 days, or the proposal
shall be deemed approved. Following approval of any such
proposal under this paragraph, the Electric Reliability Or-
ganization shall seek Commission approval pursuant to
the procedures prescribed under subsection (e)(3). Affili-
ated regional reliability entities may not make requests for
approval directly to the Commission except pursuant to
subsection (e)(3)(D).
‘‘(4) If an affiliated regional reliability entity re-
quests, consistent with paragraph (1) of this subsection,
that the Electric Reliability Organization delegate author-
ity to it, but is unable within 180 days to reach agreement
with the Electric Reliability Organization with respect to
such requested delegation, such entity may seek relief
from the Commission. If, following notice and opportunity
for comment, the Commission determines that a delega-
tion to the entity would meet the requirements of para-
graph (1) above, and that the delegation would be just,
reasonable, not unduly discriminatory or preferential, and
in the public interest, and that the Electric Reliability Or-
ganization has unreasonably withheld such delegation, the
Commission may, by order, direct the Electric Reliability
Organization to make such delegation.
‘‘(5)(A) The Commission may, upon its own motion
or upon complaint, and with notice to the appropriate af-
filiated regional reliability entity or entities, direct the
Electric Reliability Organization to propose a modification
to an agreement entered into under this subsection if the
Commission determines that—
‘‘(i) the affiliated regional reliability entity no
longer has the capacity to carry out effectively or ef-
ficiently its implementation or enforcement respon-
sibilities under that agreement, has failed to meet its
obligations under that agreement, or has violated
any provision of this section;
‘‘(ii) the rules, practices, or procedures of the
affiliated regional reliability entity no longer provide
for fair and impartial discharge of its implementa-
tion or enforcement responsibilities under the agree-
ment;
‘‘(iii) the geographic boundary of a transmission
entity approved by the Commission is not wholly
within the boundary of an affiliated regional reli-
ability entity and such difference is inconsistent with
the effective and efficient implementation and ad-
ministration of bulk-power system reliability; or
‘‘(iv) the agreement is inconsistent with another
delegation agreement as a result of actions taken
under paragraph (4) of this subsection.
‘‘(B) Following an order of the Commission issued
under subparagraph (A), the Commission may suspend
the affected agreement if the Electric Reliability Organiza-
tion or the affiliated regional reliability entity does not
propose an appropriate and timely modification. If the
agreement is suspended, the Electric Reliability Organiza-
tion shall assume the previously delegated responsibilities.
The Commission shall allow the Electric Reliability Orga-
nization and the affiliated regional reliability entity an op-
portunity to appeal the suspension.
‘‘(i) ORGANIZATION MEMBERSHIP.—Every system
operator shall be required to be a member of the Electric
Reliability Organization and shall be required also to be
a member of any affiliated regional reliability entity oper-
ating under an agreement effective pursuant to subsection
(h) applicable to the region in which the system operator
operates or is responsible for the operation of bulk-power
system facilities.
‘‘(j) INJUNCTIONS AND DISCIPLINARY ACTION.—(1)
Consistent with the range of actions approved by the Com-
mission under subsection (d)(4)(H), the Electric Reli-
ability Organization may impose a penalty, limitation of
activities, functions, operations, or other disciplinary ac-
tion the Electric Reliability Organization finds appropriate
against a user of the bulk-power system if the Electric
Reliability Organization, after notice and an opportunity
for interested parties to be heard, issues a finding in writ-
ing that the user of the bulk-power system has violated
an organization standard. The Electric Reliability Organi-
zation shall immediately notify the Commission of any dis-
ciplinary action imposed with respect to an act or failure
to act of a user of the bulk-power system that affected
or threatened to affect bulk-power system facilities located