AGENCY:
Federal Energy Regulatory Commission, Department of Energy.
ACTION:
Final action.
SUMMARY:
The Federal Energy Regulatory Commission (Commission) approves the retirement of six Reliability Standards and their requirements proposed by the North American Electric Reliability Corporation, the Commission-certified Electric Reliability Organization.
DATES:
This action is effective February 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Michael Gandolfo (Technical Information), Office of Electric Reliability, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, Telephone: (202) 502–6817
Mark Bennett (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, Telephone: (202) 502–8524
SUPPLEMENTARY INFORMATION:
1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA), the Commission approves the North American Electric Reliability Corporation's (NERC) request to retire six Reliability Standards with a combined total of 56 requirements. For the reasons discussed below, we determine that the retirement of six Reliability Standards (the MOD A Reliability Standards) in their entirety is just, reasonable, not unduly discriminatory or preferential, and in the public interest.
Reliability Standards MOD–001–1a (Available Transmission System Capability), MOD–004–1 (Capacity Benefit Margin), MOD–008–1 (Transmission Reliability Margin Calculation Methodology), MOD–028–2 (Area Interchange Methodology), MOD–029–2a (Rated System Path Methodology), and MOD–030–3 (Flowgate Methodology).
I. Background
A. Section 215 of the FPA and the Mandatory Reliability Standards
2. Section 215 of the FPA provides that the Commission may certify an ERO, the purpose of which is to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. Reliability Standards may be enforced by the ERO, subject to Commission oversight, or by the Commission independently. Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO, and subsequently certified NERC.
Id. 824o(e).
Rules Concerning Certification of the Elec. Reliability Org. & Procedures for the Establishment, Approval, & Enf't. of Elec. Reliability Standards, Order No. 672, 114 FERC ¶ 61,104, order on reh'g, Order No. 672–A, 114 FERC ¶ 61,328 (2006).
N. Am. Elec. 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).
B. NERC Petition
3. On June 7, 2019, NERC submitted a petition proposing, among other things, the retirement of the MOD A Reliability Standards, in their entirety without replacement (NERC Petition). NERC explained that these requirements are administrative in nature or relate expressly to commercial or business practices and provide little or no reliability benefit. NERC explained that the MOD A Reliability Standards were submitted in response to Commission's directives in Order No. 890 and Order No. 693 to develop Reliability Standards “to provide for consistency and transparency in the methodologies used by transmission providers to calculate [Available Transfer Capability].” NERC clarified that “[Available Transfer Capability] and [Available Flowgate Methodology], as well as e-Tags, are commercially-focused elements facilitating interchange and balancing of interchange,” and that system operators maintain reliability by monitoring Real-time flows based on System Operating Limits and Interconnection Reliability Operating Limits.
Id. at 21–22.
NERC Petition at 18 ( citing Preventing Undue Discrimination & Preference in Transmission Serv., Order No. 890, 72 FR 12266 (Mar. 15, 2007),118 FERC ¶ 61,119, order on reh'g, Order No. 890–A,73 FR 2984 (Jan. 16, 2008) 121 FERC ¶ 61,297 (2007), order on reh'g, Order No. 890–B, 123 FERC ¶ 61,299 (2008), order on reh'g, Order No. 890–C, 74 FR 12540 (Mar. 25, 2009), 126 FERC ¶ 61,228 (2009); Mandatory Reliability Standards for the Bulk-Power Sys., Order No. 693, 72 FR 16416 (Apr. 4, 2007), 118 FERC ¶ 61,218, at PP 1020–1126 order on reh'g, Order No. 693–A, 120 FERC ¶ 61,053 (2007)). In 2009, the Commission approved the six MOD Reliability Standards containing methodologies for calculating Available Transfer Capability (ATC) or Available Flowgate Capacity (AFC). See, Mandatory Reliability Standards for the Calculation of Available Transfer Capability, Capacity Benefit Margins, Transmission Reliability Margins, Total Transfer Capability, & Existing Transmission Commitments & Mandatory Reliability Standards for the Bulk-Power Sys., Order No. 729, 74 FR 64884 (Dec 8, 2009), 129 FERC ¶ 61,155 (2009), order on reh'g, Order No. 729–A,75 FR 26057 (May 11, 131 FERC ¶ 61,109 (2010).
NERC Petition at 21.
C. Notice of Proposed Rulemaking
4. On January 23, 2020, the Commission issued a NOPR proposing to approve the retirement of 74 of the 77 Reliability Standard requirements requested by NERC. In the NOPR, the Commission proposed, inter alia, to approve the retirement of the MOD A Reliability Standards, but noted that, if approved, the Commission intended to coordinate the effective dates for the retirement of the MOD A Reliability Standards with successor North American Energy Standards Board (NAESB) business practice standards. The Commission explained that equivalent NAESB business practice standards are expected to replace the MOD A Reliability Standards proposed for retirement.
Elec. Reliability Org. Proposal to Retire Requirements in Reliability Standards Under the NERC Standards Efficiency Rev., Notice of Proposed Rulemaking, 170 FERC ¶ 61,032 (Jan. 23, 2020) (NOPR).
Id. P 21 n.35.
Id.
5. The Commission noted that NERC's proposed retirements “are largely consistent with the Commission-approved bases for retiring Reliability Standard requirements articulated in prior proceedings.” In proposing to approve NERC's request, the Commission stated that NERC “provided an adequate basis to conclude that the requirements proposed for retirement: (1) provide little or no reliability benefit; (2) are administrative in nature or relate expressly to commercial or business practices; or (3) are redundant with other Reliability Standards.” Further, the Commission acknowledged NERC's assertion that retiring the MOD A Reliability Standards is justified because, being primarily administrative or related to commercial or business practices, they “no longer serve a reliability purpose.” Specifically, the Commission noted NERC's assertion that the MOD A Reliability Standards contain “commercially-focused elements facilitating interchange and balancing of interchange,” and system operators maintain reliability by monitoring Real-time flows based on System Operating Limits and Interconnection Reliability Operating Limits.
Id. P 1 ( citing N. Am. Elec. Reliability Corp., 138 FERC ¶ 61,193, at P 81 (March 2012 Order), order on reh'g and clarification, 139 FERC ¶ 61,168 (2012); Elec. Reliability Org. Proposal to Retire Requirements in Reliability Standards, Order No. 788, 78 FR 73424 (Dec. 6, 2013), 145 FERC ¶ 61,147, at P 1 (2013)).
Id. P 25.
Id. P 21.
See id. P 22 (citing NERC Petition at 21).
D. NOPR Comments
6. The Commission received five sets of comments—two of which were specific to the proposed retirement of the MOD A Reliability Standards. Neither of the two comments the Commission received in response to NERC's proposed retirement of the MOD A Reliability Standards opposed NERC's proposal. In its comments, Bonneville states that it appreciates the Commission's recognition of the relationship between the MOD A retirements and the publication of Business Practice Standards by NAESB to replace the commercial aspects of the MOD requirements. Further, Bonneville believes “it will be important to continue the efforts to avoid commercial requirements in the NERC Reliability Standards and, likewise, avoid reliability requirements in NAESB Business Practice Standards.” Similarly, WAPA expressed its support for the direction of the industry and the work performed by the Standards Efficiency Review project. More specifically, WAPA agreed with NERC's assertion that Available Transfer Capability/Available Flowgate Capability, along with e-Tags, “are commercially-focused elements facilitating interchange and balancing of interchange.” WAPA also asked the Commission to ensure that “appropriate measures are in place to ensure stakeholder[s] can provide input into the development of the new business practices.”
These two comments were received from the Bonneville Power Administration (Bonneville) and the Western Area Power Administration (WAPA).
Bonneville Comments at 3.
Id.
WAPA Comments at 3.
Id. at 5.
E. Order No. 873 and the Prior Retirements of Other Reliability Standard Requirements
7. On September 17, 2020, the Commission issued Order No. 873, approving the retirement of 18 Reliability Standard requirements, remanding two requirements for further consideration by NERC, and taking no action on the proposed retirement of the MOD A Reliability Standards. In Order No. 873, the Commission confirmed the approach proposed in the NOPR and provided developments since then, noting that on March 30, 2020, NAESB submitted Version 003.3 of the Standards for Business Practices and Communication Protocols for Public Utilities, including the Modeling business practices intended to replace the MOD A Reliability Standards upon their retirement, for which the Commission had issued a NOPR. The Commission concluded that “[i]n light of these developments, this final action does not address the retirement of MOD A Reliability Standards. The Commission will determine the appropriate action regarding the proposed retirement of the MOD A Reliability Standards at a later time.”
Elec. Reliability Org. Proposal to Retire Requirements in Reliability Standards Under the NERC Standards Efficiency Rev., Order No. 873, 172 FERC ¶ 61,225 (2020).
NERC withdrew the originally requested retirement of Reliability Standard VAR–001–6, Requirement R2 on May 14, 2020.
Id. P 4.
Id. ( citing Standards for Bus. Pracs. & Commc'n Protocols for Pub. Utils., Notice of Proposed Rulemaking, 172 FERC ¶ 61,047 (2020)).
Id.
F. NAESB Standards for Business Practices and Communications Protocols for Public Utilities
8. In Order No. 676–J, the Commission revised its regulations to incorporate by reference, as mandatory enforceable requirements, the current version of NAESB's Standards for Business Practices and Communication Protocols for Public Utilities adopted by the Wholesale Electric Quadrant (WEQ) of NAESB, Version 003.3 of the NAESB WEQ Business Practice Standards (WEQ Version 003.3 Standards). Among other things, the WEQ Version 003.3 Standards address the technical issues affecting Available Transfer Capability and Available Flowgate Capability calculation for wholesale transmission services, with the addition of certain revisions and corrections. The Commission also revised its regulations to provide that transmission providers must avoid unduly discriminatory and preferential treatment in the calculation of Available Transfer Capability.
Standards for Bus. Pracs. & Commc'n Protocols for Pub. Utils., Order No. 676–J, 86 FR 29491 (June 2, 2021), 175 FERC ¶ 61,139 (2021).
Id. P 33.
9. The first compliance filing concerned the cybersecurity and Parallel Flow Visualization standards included in Version 003.3. The Commission directed utilities to make the second compliance filing reflecting the remainder of the revisions in Version 003.3 12 months after implementation of the WEQ Version 003.2 Standards, or no earlier than October 27, 2022, with an implementation date no earlier than three months following compliance filings submission (no earlier than January 27, 2023), resulting in a 15-month implementation period.
Id. PP 48, 50. The Commission noted that the implementation of the NAESB Available Transfer Capability -related standards contained in WEQ–023 will be coordinated with the retirement of the NERC MOD A Reliability Standards. Id. P 43 n.53.
II. Commission Determination
10. Pursuant to section 215(d)(2) of the FPA, the Commission approves the proposed retirement of the MOD A Reliability Standards, to be coordinated with the effective date of the tariff records accepted in the orders on the second set of Order No. 676–J compliance filings, February 1, 2024. As explained herein, we are satisfied with NERC's justification for these retirements. In particular, we note NERC's explanation that the MOD A Reliability Standards are no longer necessary because Available Transfer Capability, Available Flowgate Capability, and e-Tags fundamentally pertain to commercial and business operations, and that system operators maintain reliability by monitoring Real-time flows based on System Operating Limits and Interconnection Reliability Operating Limits. We are further persuaded that retiring the MOD A Reliability Standards will not result in a reliability gap.
See ISO-New England, 185 FERC ¶ 61,070 (2023); N.Y. Indep. Sys. Operator, Inc., 185 FERC ¶ 61,067 (2023); PJM Interconnection, L.L.C., 185 FERC ¶ 61,068 (2023); Ala. Power Co., 185 FERC ¶ 61,073; Versant Power, 185 FERC ¶ 61,065 (2023); Cal. Indep. Sys. Operator Corp., 185 FERC ¶ 61,072 (2023); MATL LLP, 185 FERC ¶ 61,074 (2023); Golden Spread Elec. Coop., Inc., 185 FERC ¶ 61,071 (2023).
11. Regarding WAPA's comments focused on the importance of ensuring stakeholders' ability to provide input. Order No. 676–J explained that NAESB has procedures to ensure that interested persons have input into NAESB's standard development regardless of the interested persons' NAESB membership and that “each standard NAESB adopts must be supported by a consensus of the relevant industry segments. Standards that fail to gain consensus support are not adopted.” Therefore, we believe WAPA's concerns were fully addressed.
WAPA Comments at 5.
See Order No. 676–J, 175 FERC ¶ 61,139 at P 5.
III. Information Collection Statement
12. The information collection requirements contained in this final action are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995. OMB's regulations require approval of certain information collection requirements imposed by agency rules. Upon approval of a collection of information, OMB will assign an OMB control number and expiration date. Comments on the collection of information are due within 60 days of the date this order is published in the Federal Register . Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. The Commission solicits comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques.
13. These MOD Standards are currently located in the FERC–725A (OMB Control No. 1902–0244) collection. The collection is currently approved by OMB and contains Reliability Standards MOD–0001–1a, MOD–004–1, MOD–008–1, MOD–028–2, MOD–029–2a and MOD–030–3 (the MOD A Reliability Standards), along with other Reliability Standards. In Docket No. RM19–17–001, the Commission approves the retirement of these six current OMB-approved MOD Reliability Standards and their associated requirements. The retirements will be coordinated with the effective dates for the successor NAESB business practice standards, which mirror the retired responsibilities from the MOD–A Reliability Standards.
14. Reliability Standards MOD–001–1a, MOD–004–1, MOD–008–1, MOD–028–2, MOD–029–2a, and MOD–030–3 are all currently approved within the FERC–725A information collection. The number of respondents below is based on an estimate of the NERC compliance registry for transmission service providers (TSP), transmission operators (TOP), transmission planners (TP), resource planners (RP), and balancing authorities (BA). As these entities still have obligation to other NERC Reliability Standards when updating the FERC–725A for this collection the number respondents shall remain the same and only the man-hours will be reduced.
The number of TSP (71), TOP (165), TP (98), RP (159), and BA (98) are taken based on the NERC Compliance Registry information as of August 17, 2023, and represent U.S. registered entities.
MOD–001–1 a —Available Transmission System Capability—Retirement
[Burden reduction]
The estimated hourly cost (salary plus benefits) is a combination based on the Bureau of Labor Statistics (BLS), as of 2022, for 75% of the average of an Electrical Engineer (17–2071) $77.29/hr, 77.29 × .75 = 57.9675 ($57.97-rounded) ($57.97/hour) and 25% of an Information and Record Clerk (43–4199) $39.58/hr × .25% = 9.895 ($9.90 rounded) ($9.90/hour), for a total ($57.97 + $9.90 = $67.87/hour).
In 2015 the Commission approved the retirement of the load-serving entity function. See N. Am. Elec. Reliability Corp., 150 FERC ¶ 61,213 (2015); N. Am. Elec. Reliability Corp., 153 FERC ¶ 61,024 (2015). NERC has an ongoing standard drafting team project to replace this function as an applicable entity in the Reliability Standards with the distribution provider function. See Project-2022–02 Modifications to TPL–001 and MOD–032.
The estimated hourly cost (salary plus benefits) is a combination based on the Bureau of Labor Statistics (BLS), as of 2022, for 75% of the average of an Electrical Engineer (17–2071) $77.29/hr, 72.29 × .75 = 57.9576 ($57.96-rounded) ($57.96/hour) and 25% of an Information and Record Clerk (43–4199) $39.58/hr, $39.58 × .25% = 9.895 ($9.90 rounded) ($9.90/hour), for a total ($57.96+$9.90 = $67.86/hour).
MOD–004–1—Capacity Benefit Margin—Retirement
MOD–008–1—Transmission Reliability Margin Calculation Methodology—Retirement
[Burden reduction]
Id.
MOD–028–2—Area Interchange Methodology Proposed for Retirement
[Burden reduction]
Id.
MOD–029–2 a —Flowgate Methodology—Retirement
[Burden reduction]
Id.
MOD–030–2—Flowgate Methodology—Retirement
[Burden reduction]
Id.
Title: FERC–725A, Mandatory Reliability Standards for the Bulk-Power System.
Action: Modifications to Existing Collections of Information in FERC–725A.
OMB Control No: 1902–0244 (FERC–725A).
Respondents: Business or other for profit, and not for profit institutions.
Frequency of Responses: On occasion (and proposed for deletion).
Necessity of the Information: Reliability Standards MOD–001–1a (Available Transmission System Capability), MOD–004–1 (Capacity Benefit Margin), MOD–008–1 (Transmission Reliability Margin Calculation Methodology), MOD–028–2 (Area Interchange Methodology), MOD–029–2a (Rated System Path Methodology), and MOD030–3 (Flowgate Methodology) (the MOD A Reliability Standards) were part of the implementation of the Congressional mandate of the Energy Policy Act of 2005 to develop mandatory and enforceable Reliability Standards to better ensure the reliability of the nation's Bulk-Power system. As these Reliability Standards are retired, their purpose and requirements have been moved into the NAESB business practice standards.
Internal review: The Commission has reviewed NERC's proposal and determined that this action is necessary to implement section 215 of the FPA.
15. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown, email: DataClearance@ferc.gov, phone: (202) 502–8663, fax: (202) 273–0873].
16. Comments concerning the information collections and requirements approved for retirement in this final action and the associated burden estimates, should be sent to the Commission in this docket and may also be sent to the Office of Management and Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at the following email address: oira_submission@omb.eop.gov.
IV. Environmental Analysis
17. 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. 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. The actions approved here fall within this categorical exclusion in the Commission's regulations.
Reguls. Implementing the Nat'l Env't Policy Act, Order No. 486, FERC Stats. & Regs. Preambles 1986–1990 ¶ 30,783 (1987) (cross-referenced at 41 FERC ¶ 61,284).
V. Regulatory Flexibility Act
18. The Regulatory Flexibility Act of 1980 (RFA) generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities.
19. The RFA mandates consideration of regulatory alternatives that accomplish the stated objectives of a rule and that minimize any significant economic impact on a substantial number of small entities. The Small Business Administration's Office of Size Standards develops the numerical definition of a small business. The Small Business Administration has established size standards, for the types of affected entities that range from a maximum of 250–1,000 employees for an entity and its affiliates to be considered small.
20. This final action accepts the request of NERC, the Commission-certified ERO, to retire the MOD A Reliability Standards and recognizes that NAESB business practice standards will cover the obligations. This final action reduces paperwork burdens for both large and small business entities. The Commission estimates the total industry reduction in burden for all entities (large and small) to be 112,560 hours or 68.5 hours per response.
21. Based on the information above, the Commission certifies that the proposed reductions will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required. The Commission certifies that this final action will not have a significant economic impact on a substantial number of small entities.
VI. Document Availability
22. 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 ).
23. From FERC's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
24. User assistance is available for eLibrary and the FERC's website during normal business hours from FERC 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.
VII. Effective Date and Congressional Notification
25. These regulations are effective February 1, 2024. 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.
Issued October 26, 2023.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2023–24095 Filed 10–31–23; 8:45 am]
BILLING CODE 6717–01–P