[Federal Register Volume 78, Number 125 (Friday, June 28, 2013)]
[Proposed Rules]
[Pages 38851-38867]
[FR Doc No: 2013-15433]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM13-8-000]

Electric Reliability Organization Proposal To Retire Requirements
in Reliability Standards

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to section 215 of the Federal Power Act, the
Commission proposes to approve the retirement of 34 requirements within
19 Reliability Standards identified by the North American Electric
Reliability Corporation (NERC), the Commission-certified Electric
Reliability Organization. The requirements proposed for retirement
either: Provide little protection for Bulk-Power System reliability or
are redundant with other aspects of the Reliability Standards. In
addition, the Commission proposes to withdraw 41 outstanding Commission
directives that NERC develop modifications to Reliability Standards.
The Commission believes that the identified outstanding directives have
either been addressed in some other manner, are redundant with another
directive or provide general guidance as opposed to a specific
directive and, therefore, that withdrawal of these outstanding
directives will have little impact the reliability of the Bulk-Power
System. This proposal is part of the Commission's ongoing effort to
review its requirements and reduce unnecessary burdens by eliminating
requirements that are not necessary to the performance of the
Commission's regulatory responsibilities.

DATES: Comments are due August 27, 2013.

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

FOR FURTHER INFORMATION CONTACT: Kevin Ryan (Legal Information), Office
of the General Counsel, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426, Telephone:<PHONE_NUMBER>. Michael
Gandolfo (Technical Information), Office of Electric Reliability,
Division of Reliability Standards and Security, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
Telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

(Issued June 20, 2013)

    1. Pursuant to section 215(d) of the Federal Power Act (FPA),\1\
the Commission proposes to approve the retirement of 34 requirements
within 19 Reliability Standards identified by the North American
Electric Reliability Corporation (NERC), the Commission-certified
Electric Reliability Organization (ERO). The proposed retirements meet
the benchmarks set forth in the Commission's March 15, 2012 order that
requirements proposed for retirement either: (1) Provide little
protection for Bulk-Power System reliability or (2) are redundant with
other aspects of the Reliability Standards.\2\ Consistent with the
Commission's proposal in the March 2012 Order, we believe that the
requirements proposed for retirement can ``be removed from the
Reliability Standards with little effect on reliability and an increase
in efficiency of the ERO compliance program.'' \3\ We seek comment on
our proposal to approve the retirement of the 34 requirements
identified by NERC.
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    \1\ 16 U.S.C. 824o(d) (2006).
    \2\ See North American Electric Reliability Corp., 138 FERC ]
61,193, at P 81 (March 2012 Order), order on reh'g and
clarification, 139 FERC ] 61,168 (2012).
    \3\ Id. P 81.
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    2. In addition, we propose to withdraw 41 outstanding Commission
directives that NERC develop modifications to Reliability Standards. In
Order No. 693 and subsequent final rules, the Commission has identified
various issues and directed NERC to develop modifications to the
Reliability Standards or take other action to address those issues.\4\
While NERC has addressed many of these directives, over 150 directives
remain outstanding. Some of the outstanding directives may no longer
warrant action to assure reliability of the Bulk-Power System and
should be withdrawn. We have identified 41 outstanding directives to
withdraw based on the following three guidelines: (1) Whether the
reliability concern underlying the outstanding directive has been
addressed in some manner, rendering the directive stale; (2) whether
the outstanding directive provides general guidance for standards
development rather than a specific directive; and (3) whether the
outstanding directive is redundant with another directive. The 41
outstanding directives we propose to withdraw are listed in Attachment
A to this Notice of Proposed Rulemaking (NOPR). The withdrawal of these
directives will enhance the efficiency of the Reliability Standards
development process, with little or no impact on Bulk-Power System
reliability.
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    \4\ 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). See also Mandatory Reliability
Standards for the Calculation of Available Transfer Capability,
Capacity Benefit Margins, Transmission Reliability Margins, Total
Transfer Capability, and Existing Transmission Commitments and
Mandatory Reliability Standards for the Bulk-Power System, Order No.
729, 129 FERC ] 61,155 (2009), order on clarification, Order No.
729-A, 131 FERC ] 61,109 (2010), order on reh'g and reconsideration,
Order No. 729-B, 132 FERC ] 61,027 (2010).
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    3. Pursuant to Executive Order 13579, the Commission issued a plan
to identify regulations that warrant repeal or modification, or
strengthening, complementing, or modernizing where necessary or
appropriate.\5\ In the Plan, the Commission also stated that it
voluntarily and routinely, albeit informally, reviews its regulations
to ensure that they achieve their intended purpose and do not impose
undue burdens on regulated entities or unnecessary costs on those
entities or their customers. The proposal in this NOPR is a part of the
Commission's ongoing effort to review its requirements and reduce
unnecessary burdens by eliminating requirements that are not necessary
to the performance of the Commission's regulatory responsibilities.
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    \5\ Plan for Retrospective Analysis of Existing Rules, Docket
No. AD12-6-000 (Nov. 8, 2011). Executive Order 13579 requests that
independent agencies issue public plans for periodic retrospective
analysis of their existing ``significant regulations.''
Retrospective analysis should identify ``significant regulations''
that may be outmoded, ineffective, insufficient, or excessively
burdensome, and to modify, streamline, expand, or repeal them in
order to achieve the agency's regulatory objective.
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I. Background

A. Section 215 of the FPA

    4. Section 215 of the FPA requires the Commission-certified ERO to
develop mandatory and enforceable Reliability

Standards, subject to Commission review and approval. Once approved,
the Reliability Standards may be enforced in the United States by the
ERO subject to Commission oversight, or by the Commission
independently.\6\ Pursuant to the requirements of FPA section 215, the
Commission established a process to select and certify an ERO \7\ and,
subsequently, certified NERC as the ERO.\8\
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    \6\ See 16 U.S.C. 824o(e)(3).
    \7\ 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).
    \8\ 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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B. March 2012 Order

    5. In the March 2012 Order, the Commission accepted, with
conditions, NERC's ``Find, Fix, Track and Report'' (FFT) initiative.
The FFT process, inter alia, provides NERC and the Regional Entities
the flexibility to address lower-risk possible violations through an
FFT informational filing as opposed to issuing and filing a Notice of
Penalty. In addition, the Commission raised the prospect of revising or
removing requirements of Reliability Standards that ``provide little
protection for Bulk-Power System reliability or may be redundant.'' \9\
Specifically, the Commission stated:
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    \9\ March 2012 Order, 138 FERC ] 61,193 at P 81.

The Commission notes that NERC's FFT initiative is predicated on the
view that many violations of requirements currently included in
Reliability Standards pose lesser risk to the Bulk-Power System. If
so, some current requirements likely provide little protection for
Bulk-Power System reliability or may be redundant. The Commission is
interested in obtaining views on whether such requirements could be
removed from the Reliability Standards with little effect on
reliability and an increase in efficiency of the ERO compliance
program. If NERC believes that specific Reliability Standards or
specific requirements within certain Standards should be revised or
removed, we invite NERC to make specific proposals to the Commission
identifying the Standards or requirements and setting forth in
detail the technical basis for its belief. In addition, or in the
alternative, we invite NERC, the Regional Entities and other
interested entities to propose appropriate mechanisms to identify
and remove from the Commission-approved Reliability Standards
unnecessary or redundant requirements. We will not impose a deadline
on when these comments should be submitted, but ask that to the
extent such comments are submitted NERC, the Regional Entities, and
interested entities coordinate to submit their respective comments
concurrently.\10\
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    \10\ Id.

In response, NERC initiated a review, referred to as the ``P 81
project,'' to identify requirements that could be removed from
Reliability Standards without impacting the reliability of the Bulk-
Power System.

II. NERC Petition

    6. In its February 28, 2013 petition, NERC seeks Commission
approval of the retirement of 34 requirements within 19 Reliability
Standards. NERC asserts that the 34 requirements proposed for
retirement ``are redundant or otherwise unnecessary'' and that
``violations of these requirements . . . pose a lesser risk to the
reliability of the Bulk-Power System.'' \11\ In addition, NERC states
that it is not proposing to retire any Reliability Standard in its
entirety, and the remaining requirements of each affected Reliability
Standard will remain in continuous effect. NERC maintains that the
requirements proposed for retirement ``can be removed [from the
Reliability Standards] with little to no effect on reliability.'' \12\
NERC also asserts that the proposed retirement of the 34 requirements
``will allow industry stakeholders to focus their resources
appropriately on reliability risks and will increase the efficiency of
the ERO compliance program.'' \13\
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    \11\ Petition at 2.
    \12\ Id.
    \13\ Id.
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    7. In addition, in its petition, NERC provides a description of the
collaborative process adopted by industry stakeholders to respond to
the Commission's proposal in paragraph 81 of the March 2012 Order. NERC
maintains that the ``scope of the P 81 project was limited solely to
the removal of requirements in their entirety that would not otherwise
compromise the integrity of the specific Reliability Standard or impact
the reliability of the BES.'' \14\ Further, NERC states that the
criteria adopted to identify potential requirements for retirement
``were designed so that no rewriting or consolidation of requirements
would be necessary.'' \15\
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    \14\ Id.
    \15\ Id.
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    8. NERC states that the ``P 81 Team'' developed three criteria for
its review:

(1) Criterion A: An overarching criteria designed to determine that
there is no reliability gap created by the proposed retirement; (2)
Criterion B: consists of seven separate identifying criteria
designed to recognize requirements appropriate for retirement
(administrative; data collection/data retention; documentation;
reporting; periodic updates; commercial or business practice; and
redundant); and (3) Criterion C: consists of seven separate
questions designed to assist the P 81 Team in making an informed
decision regarding whether requirements are appropriate to propose
for retirement.\16\
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    \16\ Id.

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    9. Specifically, the seven questions adopted for Criterion C are:

C1: Was the Reliability Standard requirement part of a FFT filing?
C2: Is the Reliability Standard requirement being reviewed in an on-
going Standards Development Project?
C3: What is the VRF of the Reliability Standard requirement?
C4: In which tier of the 2013 [Actively Monitored List] does the
Reliability Standard requirement fall?
C5: Is there a possible negative impact on NERC's published and posted
reliability principles?
C6: Is there any negative impact on the defense in depth protection of
the Bulk Electric System?
C7: Does the retirement promote results or performance based
Reliability Standards?

    10. NERC maintains that the project team focused on the
identification of ``lower-level facilitating requirements that are
either redundant with other requirements or where evidence retention is
burdensome and the requirement is unnecessary'' because the reliability
goal is achieved through other standards or mechanisms.\17\ NERC
asserts that the proposed retirement of documentation requirements will
not create a gap in reliability because ``NERC and the Regional
Entities can enforce reporting obligations pursuant to section 400 of
NERC's Rules of Procedure and Appendix 4C to ensure that necessary data
continues to be submitted for compliance and enforcement purposes.''
\18\ NERC asserts that although the P 81 project proposes to retire
requirements associated with data retention or documentation, ``the
simple fact that a requirement includes a data retention or
documentation element does not signify that it should be considered for
retirement or is otherwise inappropriately designated as a
requirement.'' \19\
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    \17\ Id. at 7.
    \18\ Id. at 8 (citing North American Electric Reliability Corp.,
141 FERC ] 61,241 at P 82 (2012) (approving proposed revisions to
NERC's Rules of Procedure)).
    \19\ Id. at 9 (emphasis in original).
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    11. Based on this approach, NERC identified the following 34
requirements

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within 19 Reliability Standards for potential retirement:

 BAL-005-0.2b, Requirement R2--Automatic Generation Control
 CIP-003-3, -4, Requirement R1.2--Cyber Security--Security
Management Controls \20\
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    \20\ NERC explains that although only eight requirements in the
Critical Infrastructure Protection (CIP) body of Reliability
Standards are proposed for retirement, NERC proposes the retirement
of those eight requirements in both CIP versions 3 and 4. Therefore,
the total number of CIP requirements proposed for retirement is
sixteen.
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 CIP-003-3, -4, Requirements R3, R3.1, R3.2, and R3.3--Cyber
Security--Security Management Controls
 CIP-003-3, -4, Requirement R4.2--Cyber Security--Security
Management Controls
 CIP-005-3a, -4a, Requirement R2.6--Cyber Security--Electronic
Security Perimeter(s)
 CIP-007-3, -4, Requirement R7.3--Cyber Security--Systems
Security Management
 EOP-005-2, Requirement R3.1--System Restoration from
Blackstart Services
 FAC-002-1, Requirement R2--Coordination of Plans for New
Facilities
 FAC-008-3, Requirements R4 and R5--Facility Ratings
 FAC-010-2.1, Requirement R5--System Operating Limits
Methodology for the Planning Horizon
 FAC-011-2.1, Requirement R5--System Operating Limits
Methodology for the Operations Horizon
 FAC-013-2, Requirement R3--Assessment of Transfer Capability
for the Near-term Transmission Planning Horizon
 INT-007-1, Requirement R1.2--Interchange Confirmation
 IRO-016-1, Requirement R2--Coordination of Real-Time
Activities between Reliability Coordinators
 NUC-001-2, Requirements R9.1, R9.1.1, R9.1.2, R9.1.3, and
R1.9.4--Nuclear Plant Interface Coordination
 PRC-010-0, Requirement R2--Assessment of the Design and
Effectiveness of UVLS Programs
 PRC-022-1, Requirement R2--Under-Voltage Load Shedding Program
Performance
 VAR-001-2, Requirement R5--Voltage and Reactive Control

    12. NERC also requests that the Commission approve the
implementation plan, provided as Exhibit C to NERC's petition, which
provides that the identified requirements will be retired immediately
upon Commission approval.

    13. NERC states that it will apply the ``concepts'' from the P 81
project to improve the drafting of Reliability Standards going forward.
Specifically, NERC explains that Reliability Standards development
projects ``will involve stronger examination for duplication of
requirements across the NERC body of Reliability Standards and the
technical basis and necessity for each and every requirement will
continue to be evaluated.'' \21\ According to NERC, requirements that
were proposed and ultimately not included in the immediate filing will
be mapped for consideration as part of addressing existing standards
projects and five-year reviews of standards that have not been recently
revised.
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    \21\ Petition at 9.
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III. Discussion

A. Proposed Retirement of Requirements

    14. Pursuant to section 215 of the FPA, we propose to approve the
retirement of the 34 requirements within 19 Reliability Standards
identified by NERC as just, reasonable, not unduly discriminatory or
preferential, and in the public interest. In the March 2012 Order, the
Commission explained that ``some current requirements likely provide
little protection for Bulk-Power System reliability or may be
redundant. The Commission is interested in obtaining views on whether
such requirements could be removed from the Reliability Standards with
little effect on reliability and an increase in efficiency of the ERO
compliance program.'' \22\ In general, the proposed retirements satisfy
the expectations set forth in the March 2012 Order; namely, the
requirements proposed for retirement either: (1) Provide little
protection for Bulk-Power System reliability or (2) are redundant with
other aspects of the Reliability Standards.
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    \22\ March 2012 Order, 138 FERC ] 61,193 at P 81.
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    15. We agree with NERC that the elimination of certain requirements
that pertain to the information collection or documentation will not
result in a reliability gap. Section 400 and Appendix 4C (Uniform
Compliance Monitoring and Enforcement Program) of the NERC Rules of
Procedure provide NERC and the Regional entities the authority to
enforce reporting obligations necessary to support reliability.\23\
This authority, used in the appropriate manner, justifies retiring
certain documentation-related requirements that provide limited, if
any, support for reliability. We anticipate that the retirement of such
requirements will enhance the efficiency of the ERO compliance program,
as well as the efficiency of individual registered entity compliance
programs.
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    \23\ See North American Electric Reliability Corp., 141 FERC ]
61,241 at P 82.
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    16. The specific requirements, NERC's rationale supporting
retirement, and the Commission's proposed approval of the retirements
are outlined below.
Resource and Demand Balancing Reliability Standards
    17. BAL-005-0.2b, Requirement R2--Automatic Generation Control:

R2. Each Balancing Authority shall maintain Regulating Reserve that
can be controlled by AGC to meet the Control Performance Standard.

    18. NERC states that the reliability purpose of BAL-005-0.2b is
``to establish requirements for Balancing Authority Automatic
Generation Control (``AGC'') necessary to calculate Area Control Error
(``ACE'') and to routinely deploy the Regulating Reserve.'' \24\ NERC
asserts that the reliability purpose and objectives of BAL-005-0.2b
will not be affected by the retirement of Requirement R2.\25\
Specifically, NERC states that BAL-005 is related to BAL-001--Real
Power Balancing Control Performance, and a ``Balancing Authority must
use AGC to control its Regulating Reserves to meet the Control
Performance Standards (``CPS'') as set forth in BAL-001-0.1a
Requirements R1 and R2.'' \26\ According to NERC, the ``primary purpose
of Requirement R2 is to specify how a Balancing Authority must meet
[the Control Performance Standards], i.e., through the use of
[Automatic Generation Control].'' \27\
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    \24\ Petition at 12-13.
    \25\ Id. at 13.
    \26\ Id.
    \27\ Id.
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    19. NERC states that, although the Commission has previously
rejected an argument regarding the potential redundancy of Requirement
R2, ``this Requirement is redundant in an operational sense.'' \28\
NERC asserts that, while a balancing authority may be able to meet its
Control Performance Standard without automatic generation control, ``it
cannot do so for any extended period of time, and, therefore, Balancing
Authorities must use [Automatic Generation Control] to control
Regulating Reserves to satisfy obligations under BAL-001-0.1a

Requirements R1 and R2.'' \29\ NERC concludes that ``Balancing
Authorities must still have Regulating Reserves that can be controlled
by [Automatic Generation Control] to satisfy the [Control Performance
Standards] in BAL-001-0.1a Requirements R1 and R2'' if BAL-005-0.2b,
Requirement R2 is retired.\30\
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    \28\ Id. at 14.
    \29\ Id.
    \30\ Id.
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    20. We propose to approve the retirement of BAL-005-0.2b,
Requirement R2 based on NERC's assertion that the requirement is
redundant with BAL-001-0.1a, Requirements R1 and R2. Specifically, we
propose to accept NERC's explanation that the obligation to maintain
regulating reserves controlled by automatic generation control under
BAL-005-0.2b, Requirement R2 is redundant from an operational
perspective with the obligation to meet the Control Performance
Standards in BAL-001-0.1a, Requirements R1 and R2. As NERC notes,
although a balancing authority can meet the Control Performance
Standards without automatic generation control, it is reasonable to
assume that it cannot operate in that manner for an extended period of
time and that a balancing authority must ultimately rely on regulating
reserves controlled by automatic generation control.
Critical Infrastructure Protection Reliability Standards
    21. CIP-003-3, -4, Requirement R1.2--Cyber Security--Security
Management Controls:

R1.2. The cyber security policy is readily available to all
personnel who have access to, or are responsible for, Critical Cyber
Assets.

    22. NERC states that CIP-003 requires responsible entities to have
minimum security management controls in place to protect critical cyber
assets. According to NERC, the ``reliability purpose and objectives of
CIP-003 are unaffected by the proposed retirement of Requirement
R1.2.'' \31\ NERC states that ``CIP-003 Requirement R1.2 is an
administrative task that requires Responsible Entities to ensure that
their cyber security policy is readily available to personnel'' and
that retirement of Requirement R1.2 will not create a gap in
reliability.\32\
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    \31\ Petition at 15.
    \32\ Id.
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    23. We propose to approve the retirement of CIP-003-3, -4,
Requirement R1.2 based on NERC's explanation that it is an
administrative provision that provides little protection for Bulk-Power
System reliability. As NERC explains, the training, procedures, and
process related requirements of the CIP standards render having the
cyber security policy readily available an unnecessary requirement.\33\
Thus, we agree that CIP-003-3, -4, Requirement R1.2 may be viewed as
redundant with the training obligations imposed under CIP-004-3a that
require specific training for all employees, including contractors and
service vendors, who have access to critical cyber assets. We also
agree with NERC that CIP-003-3, -4, Requirement R1.2 creates a
compliance burden that outweighs the reliability benefit of requiring a
responsible entity to ensure that its general cyber security policy is
readily available.
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    \33\ Id., NERC Petition, Exhibit E (Paragraph 81 Technical
Whitepaper) at 17.
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    24. CIP-003-3, -4, Requirements R3, R3.1, R3.2, and R3.3--Cyber
Security--Security Management Controls:

R3. Exceptions--Instances where the Responsible Entity cannot
conform to its cyber security policy must be documented as
exceptions and authorized by the senior manager or delegate(s).
R3.1. Exceptions to the Responsible Entity's cyber security policy
must be documented within thirty days of being approved by the
senior manager or delegate(s).
R3.2. Documented exceptions to the cyber security policy must
include an explanation as to why the exception is necessary and any
compensating measures.
R3.3. Authorized exceptions to the cyber security policy must be
reviewed and approved annually by the senior manager or delegate(s)
to ensure the exceptions are still required and valid. Such review
and approval shall be documented.

    25. NERC states that CIP-003 requires Responsible Entities to have
minimum security management controls in place to protect critical cyber
assets. NERC asserts that the ``reliability purpose and objectives of
CIP-003 are unaffected by the proposed retirement of Requirements R3,
and R3.1 through R3.3.'' \34\ NERC characterizes CIP-003-3, -4,
Requirements R3, R3.1, R3.2, and R3.3 as administrative tasks and
indicates that the proposed retirement of these requirements presents
no reliability gap. NERC explains that the requirements at issue ``only
apply to exceptions to internal corporate policy, and only in cases
where the policy exceeds a Reliability Standards requirement or
addressees an issue that is not covered in a Reliability Standard.''
\35\ NERC maintains that the retirement of Requirements R3, R3.1, R3.2,
and R3.3 ``would not impact an entity's ability to maintain such an
exception process within its corporate policy governance procedures, if
it is so desired.'' \36\
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    \34\ Petition at 17.
    \35\ Id.
    \36\ Id.
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    26. NERC explains that CIP-003-3, -4, Requirement R3, R3.1, R3.2,
and R3.3 ``have proven not to be useful and have been subject to
misinterpretation.'' \37\ Specifically, NERC states that entities may
be interpreting CIP-003-3, -5, Requirement R3 and its sub-requirements
as allowing for an exemption from compliance with one or more
requirements of a Reliability Standard. NERC explains that this
misinterpretation has created an unnecessary burden because entities
have ``allocate[d] time and resources to tasks that are misaligned with
the [CIP] requirements themselves.'' \38\ In addition, NERC notes that
the misunderstanding of the requirements has affected the efficiency of
the ERO compliance program due to ``the amount of time and resources
needed to clear up the misunderstanding and coach entities on the
meaning of the CIP exception requirements.'' \39\
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    \37\ Id., Exhibit E at 21.
    \38\ Id.
    \39\ Id.
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    27. We propose to approve the retirement of CIP-003-3, -4,
Requirements R3, R3.1, R3.2, and R3.3 based on NERC's explanation that
Requirements R3, R3.1, R3.2, and R3.3 impose administrative tasks that
provide little protection for Bulk-Power System reliability. As NERC
notes, the exception process outlined under CIP-003-3, -4, Requirements
R3, R3.1, R3.2, and R3.3 only applies to a responsible entity's
internal corporate policy, and only in situations where a responsible
entity's internal corporate policy exceeds a CIP Reliability Standard
requirement. The retirement of CIP-003-3, -4, Requirements R3, R3.1,
R3.2, and R3.3 will not affect a responsible entity's compliance with
the body of the CIP Reliability Standards.
    28. CIP-003-3, -4, Requirement R4.2--Cyber Security--Security
Management Controls:

R4.2. The Responsible Entity shall classify information to be
protected under this program based on the sensitivity of the
Critical Cyber Asset information.

    29. NERC states that CIP-003, Requirement R4.2 requires responsible
entities to classify information based on its ``sensitivity.'' NERC
characterizes

this task as an ``administrative task'' that is redundant with CIP-003-
3, -4, Requirement R4. According to NERC, Requirement R4 already
requires a Responsible Entity to classify critical cyber information
and the ``only difference between Requirements R4 and R4.2 is that the
subjective term `based on sensitivity' has been added [to Requirement
R4.2], thus, making it essentially redundant.'' \40\ NERC maintains
that the retirement of R4.2 presents no reliability gap.
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    \40\ Petition at 19.
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    30. We propose to approve the retirement of CIP-003-3, -4,
Requirement R4.2 based on NERC's explanation that Requirement R4.2 is
redundant with CIP-003-3, -4, Requirement R4. Specifically, the only
distinction between CIP-003-3, -4, Requirement R4.2 and Requirement R4
is the subjective term ``based on the sensitivity.'' The obligation in
Requirement R4 that a responsible entity must identify, classify, and
protect Critical Cyber Asset information remains even with the
retirement of Requirement R4.2.
    31. CIP-005-3a, -4a, Requirement R2.6--Cyber Security--Electronic
Security Perimeter(s):

R2.6. Appropriate Use Banner--Where technically feasible, electronic
access control devices shall display an appropriate use banner on
the user screen upon all interactive access attempts. The
Responsible Entity shall maintain a document identifying the content
of the banner.

    32. NERC states that the general purpose of CIP-005-3a, -4a is to
ensure a proper or secure access point configuration. NERC asserts that
the ``implementation of an appropriate use banner . . . on a user's
screen for all interactive access attempts into the Electronic Security
Perimeter . . . is an activity or task that is administrative.'' \41\
NERC states that the implementation of an appropriate use banner does
not support the general purpose of CIP-005-3a, -4a and, thus,
retirement of the provision presents no reliability gap.\42\
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    \41\ Id. at 20.
    \42\ An ``appropriate use banner'' is a notification presented
to the user when accessing a system through an electronic access
control device that is intended to emphasize the corporate policy on
the appropriate use of the system.
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    33. NERC explains that Requirement R2.6 has also been the subject
of numerous technical feasibility exceptions for devices that cannot
support such a banner and, thus, has diverted resources from more
productive efforts. NERC avers that ``the ERO's compliance program
would become more efficient if CIP-005-3a, -4a [Requirement] R2.6 was
retired, because ERO time and resources could be reallocated to monitor
compliance with the remainder of CIP-005-3a, -4a, which provides for
more effective controls of electronic access at all electronic access
points into the ESP.'' \43\
---------------------------------------------------------------------------

    \43\ Id. at 21.
---------------------------------------------------------------------------

    34. We propose to approve the retirement of CIP-005-3a, -4a,
Requirement R2.6 based on NERC's explanation that Requirement R2.6
represents an administrative task that provides little protection for
Bulk-Power System reliability. As NERC notes, the implementation of an
appropriate use banner as required under CIP-005-3a, -4a, Requirement
R2.6 does not further the general goal of controlling electronic access
at all electronic access points to the Electronic Security
Perimeter(s). In addition, Requirement R2.6 has been the subject of
numerous technical feasibility exceptions due to the fact that not all
devices can support an appropriate use banner.
    35. CIP-007-3, -4, Requirement R7.3--Cyber Security--Systems
Security Management:

R7.3. The Responsible Entity shall maintain records that such assets
were disposed of or redeployed in accordance with documented
policies.

    36. NERC states that Requirement R7.3 requires the maintaining of
records for the purpose of demonstrating compliance with disposing of
or redeploying Cyber Assets in accordance with documented procedures.
NERC asserts, however, that it and the Regional Entities can require
the production of records to demonstrate compliance under section 400
of the NERC Rules of Procedure. Therefore, NERC maintains that
``Requirement R7.3 is redundant and unnecessary.'' \44\
---------------------------------------------------------------------------

    \44\ Id. at 22.
---------------------------------------------------------------------------

    We propose to approve the retirement of CIP-007-3, -4, Requirement
R7.3. The retirement of Requirement R7.3 will not relieve a responsible
entity of the obligation to dispose of or redeploy a Cyber Asset in the
manner set forth in CIP-007-3, -4, Requirement R7. Should NERC or the
Regional Entities seek to confirm that a responsible entity is
complying with the substantive obligations in CIP-007-3, -4,
Requirement R7, they can invoke their authority under section 400 of
the NERC Rules of Procedure.
Emergency Preparedness and Operations Reliability Standards
    37. EOP-005-2, Requirement R3.1--System Restoration from Blackstart
Services:

R3.1. If there are no changes to the previously submitted
restoration plan, the Transmission Operator shall confirm annually
on a predetermined schedule to its Reliability Coordinator that it
has reviewed its restoration plan and no changes were necessary.

    38. NERC states that the reliability purpose of EOP-005-2 is to
ensure that plans, Facilities, and personnel are prepared to enable
system restoration from blackstart resources to assure that reliability
is maintained during restoration and priority is placed on restoring
the Interconnection. According to NERC, the reliability purpose of EOP-
005 will be unaffected by the retirement of Requirement R3.1.
    39. NERC explains that ``EOP-005-2 Requirement R3 currently
requires the Transmission Operator to submit its restoration plan to
its Reliability Coordinator, whether or not the plan includes
changes.'' \45\ NERC maintains that, since a transmission operator is
already obligated to review and submit its restoration plan to its
reliability coordinator annually whether or not there has been a
change, ``EOP-005-2 Requirement R3.1 only adds a separate, duplicative
administrative burden for the entity to also confirm that there were no
changes[.]'' \46\
---------------------------------------------------------------------------

    \45\ Id. at 23.
    \46\ Id. at 24.
---------------------------------------------------------------------------

    40. We propose to approve the retirement of EOP-005-2, Requirement
R3.1 based on NERC's explanation that Requirement R3.1 is redundant
with EOP-005-2, Requirement R3. Specifically, Requirement R3 requires a
responsible entity to review its restoration plan and submit the plan
to its reliability coordinator annually. As NERC notes, Requirement
R3.1 adds a separate, duplicative administrative burden requiring a
transmission operator to confirm whether or not the restoration plan
reflects any changes. The retirement of Requirement R3.1 will not
remove the transmission operator's obligation to review and submit its
restoration plan to its reliability coordinator on an annual basis.
Facilities Design, Connections, and Maintenance Reliability Standards
    41. FAC-002-1, Requirement R2--Coordination of Plans for New
Facilities:

R2. The Planning Authority, Transmission Planner, Generator Owner,
Transmission Owner, Load-Serving Entity, and Distribution Provider
shall each retain its documentation (of its evaluation of the
reliability impact of the new facilities and their connections to
the interconnected transmission systems) for three years and shall
provide the documentation to the Regional

Reliability Organization(s) and NERC on request (within 30 calendar
days).

    42. NERC states that the reliability purpose of FAC-002 is to avoid
adverse impacts on reliability by requiring generator owners and
transmission owners and electricity end-users to meet facility
connection and performance requirements. Specifically, NERC maintains
that ``Responsible Entities have an existing obligation to produce the
same information required by Requirement R2 to demonstrate compliance
with Requirement R1 and its sub-requirements, thus making Requirement
R2 redundant.'' \47\ NERC concludes that the retirement of Requirement
R2 presents no reliability gap. NERC asserts that the reliability
purpose of FAC-002 will be unaffected by the retirement of Requirement
R2.
---------------------------------------------------------------------------

    \47\ Id. at 25.
---------------------------------------------------------------------------

    43. We propose to approve the retirement of FAC-002-1, Requirement
R2 based on NERC's explanation that Requirement R2 is redundant with
the compliance obligations imposed by FAC-002-1, Requirement R1 and its
sub-requirements. While FAC-002-1, Requirement R2 requires a
responsible entity to retain documentation of the evaluation of the
reliability impact of new facilities and their connections to the
interconnected transmission systems for three years, Requirement R1 and
its sub-requirements require a responsible entity to have evidence and
documentation of the evaluation in order to show that it is in
compliance. We also note that Part D, Section 1.4 of FAC-002-1
separately specifies a data retention period of three years for this
evaluation. The retirement of Requirement R2 should not result in a
reliability gap on account of the need to maintain evidence and
documentation to show compliance with FAC-002-1, Requirement R1.
    44. FAC-008-3, Requirements R4 and R5--Facility Ratings:

R4. Each Transmission Owner shall make its Facility Ratings
methodology and each Generator Owner shall each make its
documentation for determining its Facility Ratings and its Facility
Ratings methodology available for inspection and technical review by
those Reliability Coordinators, Transmission Operators, Transmission
Planners and Planning Coordinators that have responsibility for the
area in which the associated Facilities are located, within 21
calendar days of receipt of a request.
R5. If a Reliability Coordinator, Transmission Operator,
Transmission Planner or Planning Coordinator provides documented
comments on its technical review of a Transmission Owner's Facility
Ratings methodology or Generator Owner's documentation for
determining its Facility Ratings and its Facility Rating
methodology, the Transmission Owner or Generator Owner shall provide
a response to that commenting entity within 45 calendar days of
receipt of those comments. The response shall indicate whether a
change will be made to the Facility Ratings methodology and, if no
change will be made to that Facility Ratings methodology, the reason
why.

    45. NERC states that ``the reliability objective [of FAC-008 is]
that facility ratings produced by the methodologies of the Transmission
Owner or Generator Owner shall equal the most limiting applicable
equipment rating, and consider, for example, emergency and normal
conditions, historical performance, nameplate ratings, etc.'' \48\ NERC
asserts that this reliability objective ``is not significantly or
substantively advanced by FAC-008-3 R4 (available for inspection) and
R5 (comment and responsive comments).'' \49\ NERC states that the
retirement of FAC-008-03, Requirements R4 and R5 will not create a
reliability gap ``because Transmission Owners and Generator Owners must
comply with the substantive requirements of FAC-008-3 regarding their
facility rating methodologies whether or not the exchange envisioned by
FAC-008-3 R4 and R5 occurs.'' \50\
---------------------------------------------------------------------------

    \48\ Exhibit E at 40.
    \49\ Id.
    \50\ Id.
---------------------------------------------------------------------------

    46. NERC states further that ``neither FAC-008-3 R4 nor R5 require
that the Transmission Owner and Generator Owner change its methodology,
rather FAC-008-3 R4 and R5 are designed as an exchange of comments that
may be an avenue to advance commercial interests.'' \51\ Therefore,
NERC asserts that FAC-008-3, Requirements R4 and R5 represent ``an
administrative task that does little, if anything, to benefit or
protect the reliable operation of the BES, and has the potential to
implicate commercially sensitive issues.'' \52\ NERC concludes that
``the ERO compliance program would gain efficiencies by no longer
having to track whether requests for technical review had occurred,
comments provided and reallocate time and resources to monitoring the
Transmission Owner's or Generator Owner's adherence to substantive
requirements of FAC-008-3.'' \53\
---------------------------------------------------------------------------

    \51\ Id.
    \52\ Id. at 41.
    \53\ Id.
---------------------------------------------------------------------------

    47. We propose to approve the retirement of FAC-008-03,
Requirements R4 and R5 based on NERC's explanation that Requirements R4
and R5 impose an administrative task that provides little protection
for Bulk-Power System reliability. The retirement of Requirements R4
and R5 will not relieve a transmission owner or generator owner of the
obligation to have documentation supporting its facility ratings
methodology.
    Requirements R4 and R5, therefore, impose a compliance burden with
little attendant reliability benefit.
    48. FAC-010-2.1, Requirement R5--System Operating Limits
Methodology for the Planning Horizon:

R5. If a recipient of the SOL Methodology provides documented
technical comments on the methodology, the Planning Authority shall
provide a documented response to that recipient within 45 calendar
days of receipt of those comments. The response shall indicate
whether a change will be made to the SOL Methodology and, if no
change will be made to that SOL Methodology, the reason why.

    49. NERC states that the reliability purpose of FAC-010-2.1 is to
ensure that system operating limits used in the reliable planning of
the bulk electric system are determined based on an established
methodology.\54\ NERC asserts that the reliability purpose of FAC-010-
2.1 will be unaffected by the retirement of Requirement R5. NERC states
that ``[t]he retirement of FAC-010-2.1 R5 does not create a reliability
gap, because the Planning Authority must comply with the substantive
requirements of FAC-010-2.1 whether or not the exchange envisioned by
FAC-010-2.1 R5 occurs.'' \55\
---------------------------------------------------------------------------

    \54\ Id. at 43. The NERC Glossary of Terms Used in Reliability
Standards defines ``system operating limit'' as:
    The value (such as MW, MVar, Amperes, Frequency or Volts) that
satisfies the most limiting of the prescribed operating criteria for
a specified system configuration to ensure operation within
acceptable reliability criteria.
    \55\ Exhibit E at 43.
---------------------------------------------------------------------------

    50. NERC states that ``FAC-010- 2.1 R5 sets forth an administrative
task that does little, if anything, to benefit or protect the reliable
operation of the BES, and has the potential to implicate commercially
sensitive issues.'' \56\ According to NERC, ``a Planning Authority's
time and resources would be better spent complying with the substantive
requirements of FAC-010-2.1.'' \57\ NERC concludes that ``the ERO
compliance program would gain efficiencies by no longer having to track
whether requests for technical review had occurred, comments provided
and reallocate time and resources to monitoring the Planning
Authority's

adherence to substantive requirements of FAC-010-2.1.'' \58\
---------------------------------------------------------------------------

    \56\ Id.
    \57\ Id.
    \58\ Id.
---------------------------------------------------------------------------

    51. We propose to approve the retirement of FAC-010-2.1,
Requirement R5 based on NERC's explanation that Requirement R5 imposes
an administrative task that provides little protection for Bulk-Power
System reliability. The retirement of Requirement R5 will not relieve a
planning authority of the obligation to document its system operating
limits methodology under the remaining provisions of FAC-010-2.1. In
addition, the retirement of Requirement R5 will not relieve a planning
authority from its obligation pursuant to Requirement R4 of the
standard to provide its system operating limits methodology, including
any changes to the methodology, to the appropriate entities prior to
the effective date of any such change. Based on the explanation in
NERC's petition, Requirement R5 imposes a compliance burden with little
attendant reliability benefit.
    52. FAC-011-2.1, Requirement R5--System Operating Limits
Methodology for the Operations Horizon:

R5. If a recipient of the SOL Methodology provides documented
technical comments on the methodology, the Reliability Coordinator
shall provide a documented response to that recipient within 45
calendar days of receipt of those comments. The response shall
indicate whether a change will be made to the SOL Methodology and,
if no change will be made to that SOL Methodology, the reason why.

    53. NERC states that FAC-011-2 Requirement R5 requires that, when a
reliability coordinator receives comments on its system operating limit
methodology, the reliability coordinator must respond and indicate
whether it has changed its methodology. According to NERC, the
``retirement of FAC-011-2 R5 does not create a reliability gap, because
the Reliability Coordinator must comply with the substantive
requirements of FAC-011-2 R5 [sic] whether or not the exchange
envisioned by FAC-011-2 R5 occurs.'' \59\ NERC maintains that ``FAC-
011-2 R5 may support an avenue to advance commercial interests.'' \60\
---------------------------------------------------------------------------

    \59\ Id. at 45.
    \60\ Id.
---------------------------------------------------------------------------

    54. NERC states that FAC-011-2, Requirement R5 sets forth an
administrative task that does little, if anything, to benefit or
protect the reliable operation of the BES. NERC asserts that
``[i]nstead of spending time and resources on FAC-011-2 R5 a
Reliability Coordinator's time and resources would be better spent
complying with the substantive requirements'' of FAC-011-2.\61\ NERC
concludes that ``the ERO compliance program would gain efficiencies by
no longer having to track whether requests for technical review had
occurred, comments provided and reallocate time and resources to
monitoring the Reliability Coordinator's adherence to substantive
requirements'' of FAC-011-2.\62\
---------------------------------------------------------------------------

    \61\ Id. at 46.
    \62\ Id.
---------------------------------------------------------------------------

    55. We propose to approve the retirement of FAC-011-2, Requirement
R5 based on NERC's explanation that Requirement R5 imposes an
administrative task that provides little protection for Bulk-Power
System reliability. The retirement of Requirement R5 will not relieve a
reliability coordinator of the obligation to document its system
operating limits methodology under the remaining provisions of FAC-011-
2. In addition, the retirement of Requirement R5 will not relieve a
reliability coordinator from its obligation pursuant to Requirement R4
of the standard to provide its system operating limits methodology,
including any changes to the methodology, to the appropriate entities
prior to the effective date of any such change. Based on the
explanation in NERC's petition, Requirement R5 imposes a compliance
burden with little attendant reliability benefit.
    56. FAC-013-2, Requirement R3--Assessment of Transfer Capability
for the Near-term Transmission Planning Horizon:

R3. If a recipient of the Transfer Capability methodology provides
documented concerns with the methodology, the Planning Coordinator
shall provide a documented response to that recipient within 45
calendar days of receipt of those comments. The response shall
indicate whether a change will be made to the Transfer Capability
methodology and, if no change will be made to that Transfer
Capability methodology, the reason why.

    57. NERC states that FAC-013-2, Requirement R3 is a needlessly
burdensome administrative task that does little, if anything, to
benefit or protect the reliable operation of the BES. NERC explains
FAC-013-2, Requirement R1 and its associated sub-requirements set forth
the information that each Planning Authority must include when
developing its transfer capability methodology. NERC explains further
``FAC-013-2 R3 sets forth a requirement that if an entity comments on
this methodology, the Planning Authority must respond and indicate
whether or not it will make a change to its Transfer Capability
methodology.'' \63\ NERC concludes, ``while R1 sets forth substantive
requirements, R3 sets forth more of an administrative task of the
Planning Authority responding to comments on its methodology.'' \64\
---------------------------------------------------------------------------

    \63\ Id. at 48.
    \64\ Id.
---------------------------------------------------------------------------

    58. NERC states that ``it would seem unnecessarily burdensome to
engage in the exchange of comments, given there is no nexus between the
exchange and compliance with the substantive requirements of FAC-013-
2.'' \65\ According to NERC, issues regarding an entity's transfer
capability methodology should be raised in the context of the receipt
of transmission services, not the Reliability Standards.\66\ NERC
asserts that time and resources would be better spent complying with
the substantive requirements of FAC-013-2. NERC concludes that ``the
ERO compliance program would gain efficiencies by no longer having to
track whether requests for technical review had occurred, comments
provided and reallocate time and resources to monitoring the
Reliability Coordinator's adherence to substantive requirements of FAC-
013-2.'' \67\
---------------------------------------------------------------------------

    \65\ Id. at 49.
    \66\ Id.
    \67\ Id.
---------------------------------------------------------------------------

    59. We propose to approve the retirement of FAC-013-2, Requirement
R3 based on NERC's explanation that Requirement R3 imposes an
administrative task that provides little protection for Bulk-Power
System reliability. The retirement of Requirement R3 will not relieve a
planning coordinator of the obligation to document its transfer
capability methodology under the remaining provisions of FAC-013-2. In
addition, the retirement of Requirement R3 will not relieve a planning
coordinator from its obligation pursuant to Requirement R2 of the
standard to provide its transfer capability methodology, including any
changes to the methodology, to the appropriate entities prior to the
effective date of any such change. Based on the explanation in NERC's
petition, Requirement R3 imposes a compliance burden with little
attendant reliability benefit.
Interchange Scheduling and Coordination Reliability Standards
    60. INT-007-1, Requirement R1.2--Interchange Confirmation:

R1.2. All reliability entities involved in the Arranged Interchange
are currently in the NERC registry.

    61. NERC states that the reliability purpose of INT-007-1 is to
ensure that each arranged interchange is checked for reliability before
it is implemented. NERC maintains that the reliability purpose of INT-
007-1 ``is unaffected by the proposed retirement of Requirement R1.2''
and avers that ``Requirement R1.2 is an administrative task that is now
outdated.''\68\
---------------------------------------------------------------------------

    \68\ Petition at 26.
---------------------------------------------------------------------------

    62. Specifically, NERC explains ``[a]t one time, the identification
number came from the NERC Transmission System Information Network
(``TSIN'') system, which is now handled via the NAESB Electric Industry
Registry.'' \69\ NERC explains further that ``under the E-Tag
protocols, no entity may engage in an Interchange transaction without
first registering with the E-Tag system and receiving an identification
number'' and the E-tag identification number is used to pre-qualify and
engage in an Arranged Interchange.\70\ NERC concludes that the task set
forth in INT-007-1 Requirement R1.2 is an outdated activity that is no
longer necessary, and therefore the proposed retirement of Requirement
R1.2 presents no reliability gap.
---------------------------------------------------------------------------

    \69\ Id.
    \70\ Id. at 26-27.
---------------------------------------------------------------------------

    63. We propose to approve the retirement of INT-007-1, Requirement
R1.2 based on NERC's explanation that Requirement R1.2 is an outdated
administrative task that provides little protection for Bulk-Power
System reliability. The identification of entities engaging in arranged
interchange transactions is now addressed through the NAESB Electric
Industry Registry, and the registration for such transactions is now
handled through the E-Tag system. The retirement of INT-007-1,
Requirement R1.2 will not result in a gap in reliability.
Interconnection Reliability Operations and Coordination Reliability
Standards
    64. IRO-016-1, Requirement R2--Coordination of Real-Time Activities
Between Reliability Coordinators:

R2. The Reliability Coordinator shall document (via operator logs or
other data sources) its actions taken for either the event or for
the disagreement on the problem(s) or for both.

    65. NERC states that IRO-016 establishes requirements for
coordinated real-time operations, including: (1) Notification of
problems to neighboring reliability coordinators and (2) discussions
and decisions for agreed-upon solutions for implementation. NERC
explains that the reliability purpose of IRO-016-1 is to ensure that
each reliability coordinator's operations are coordinated such that
they will not have an adverse reliability impact on other reliability
coordinator areas and to preserve the reliability benefits of
interconnected operations. NERC asserts that ``Requirement R2 is an
administrative task and the proposed retirement will not adversely
impact reliability'' and, ``[t]herefore, the reliability purpose of
IRO-016-1 is unaffected by the proposed retirement of Requirement R2.''
\71\
---------------------------------------------------------------------------

    \71\ Id. at 28.
---------------------------------------------------------------------------

    66. In addition, NERC notes that NERC and the Regional Entities
have the authority to require an entity to submit data and information
for purposes of monitoring compliance under section 400 of the NERC
Rules of Procedure. NERC asserts, therefore, that ``the retirement of
IRO-016-1 Requirement R2 does not affect the ability for NERC and the
Regional Entities to require Reliability Coordinators to produce
documentation to demonstrate compliance with IRO-016-1 Requirement R1
and its sub-requirements.'' \72\ NERC concludes that ``retiring IRO-
016-1 Requirement R2 presents no gap to reliability or to the
information NERC and the Regional Entities need to monitor
compliance.'' \73\
---------------------------------------------------------------------------

    \72\ Id. at 28-29.
    \73\ Id. at 29.
---------------------------------------------------------------------------

    67. We propose to approve the retirement of IRO-016-1, Requirement
R2 based on NERC's assertion that Requirement R2 establishes an
administrative task that provides little protection for Bulk-Power
System reliability. Specifically, the retirement of IRO-016-1,
Requirement R2 will not interfere with the substantive aspects of the
Reliability Standard found in Requirement R1. We also note that Part D,
Section 1.3 of the standard establishes for reliability coordinators a
data retention obligation with respect to the substantive aspects of
the standard. The retirement of Requirement R2 will not have an adverse
effect on reliability, nor will retirement inhibit the ability of NERC
or the Regional Entities to seek documentation to assess compliance
with the reliability standard.
Nuclear Reliability Standards
    68. NUC-001-2, Requirements R9.1, R9.1.1, R9.1.2, R9.1.3, and
R1.9.4--Nuclear Plant Interface Coordination:

R9.1. Administrative elements:
R9.1.1. Definitions of key terms used in the agreement.
R9.1.2. Names of the responsible entities, organizational
relationships, and responsibilities related to the NPIRs.
R9.1.3. A requirement to review the agreement(s) at least every
three years.
R9.1.4. A dispute resolution mechanism.

    69. NERC states that the reliability purpose of NUC-001-2 is to
ensure the coordination between nuclear plant generator operators and
transmission entities for nuclear plant safe operation and shutdown.
NERC explains that Requirement 9.1 and its sub-requirements specify
certain administrative elements that must be included in the agreement
(required in Requirement R2) between the nuclear plant generator
operator and the applicable transmission entities.\74\ NERC maintains
that the reliability purpose of NUC-001-2 is unaffected by the proposed
retirement of Requirements 9.1, 9.1.1, 9.1.2, 9.1.3 and 9.1.4.
---------------------------------------------------------------------------

    \74\ Id. at 30.
---------------------------------------------------------------------------

    70. NERC asserts that Requirement R9.1 and its sub-requirements are
administrative tasks and the proposed retirement of these Requirements
will not adversely impact reliability. NERC states further that
``requiring via a mandatory Reliability Standard the inclusion of
boilerplate provisions is unnecessarily burdensome relative to the
other significant requirements in NUC-001-2 that pertain to performance
based reliability coordination and protocols between Transmission
Entities and Nuclear Plant Generator Operators.'' \75\ NERC indicates
that the information required by these requirements is likely in modern
agreements anyway. NERC concludes that the retirement of NUC-001-2,
Requirement R9.1 and its sub-requirements ``creates no reliability
gap.'' \76\
---------------------------------------------------------------------------

    \75\ Id.
    \76\ Id.
---------------------------------------------------------------------------

    71. We propose to approve the retirement of NUC-001-2, Requirements
9.1, 9.1.1, 9.1.2, 9.1.3 and 9.1.4 based on NERC's explanation that
Requirement 9.1 and its sub-requirements reflect administrative
elements currently required to be included in the nuclear plant
interface requirements between a nuclear plant generator operator and
applicable transmission entities. The administrative elements required
under Requirement 9.1 and its sub-requirements do not relate to the
substantive, technical requirements of NUC-001-2 (i.e., technical
requirements and analysis, operations and maintenance coordination, and
communications and training), and provide little protection for Bulk-
Power System reliability.

Protection and Control Reliability Standards
    72. PRC-010-0, Requirement R2--Assessment of the Design and
Effectiveness of UVLS Programs:

R2. The Load-Serving Entity, Transmission Owner, Transmission
Operator, and Distribution Provider that owns or operates a UVLS
program shall provide documentation of its current UVLS program
assessment to its Regional Reliability Organization and NERC on
request (30 calendar days).

    73. NERC explains that PRC-010-0 requires certain registered
entities to periodically conduct and document an assessment of the
effectiveness of their under voltage load shedding (UVLS) program at
least every five years or as required by changes in system conditions.
NERC states that the purpose of PRC-010-0 is to provide system
preservation measures to prevent system voltage collapse or voltage
instability by implementing an UVLS program. NERC asserts that it and
the Regional Entities have the authority under section 400 of the NERC
Rules of Procedure ``to require an entity to submit documentation of
its current UVLS program assessment for purposes of monitoring
compliance.'' \77\
---------------------------------------------------------------------------

    \77\ Id. at 32.
---------------------------------------------------------------------------

    74. NERC states further that the retirement of PRC-010-0,
Requirement R2 does not affect the ability of NERC and the Regional
Entities to require reliability coordinators to produce documentation
to monitor compliance with PRC-010-0. Specifically, NERC explains that
PRC-010-0, Requirement R1 requires entities to ``document an assessment
of the effectiveness of its UVLS program[.]'' \78\ NERC concludes that
the retirement of PRC-010-0, Requirement R2 ``presents no reliability
gap.'' \79\
---------------------------------------------------------------------------

    \78\ Id.
    \79\ Id.
---------------------------------------------------------------------------

    75. We propose to approve the retirement of PRC-010-0, Requirement
R2 based on NERC's explanation that the administrative task imposed
under Requirement R2 is redundant with NERC and the Regional Entity
authority under section 400 of the NERC Rules of Procedure. Requirement
R1 of PRC-010-0 sets forth the substantive requirements for applicable
entities to periodically conduct and document an assessment of the
effectiveness of its UVLS program. Requirement R2 dictates that an
entity must provide documentation of its current assessment to NERC
and/or the appropriate Regional Reliability Organization upon request.
The retirement of PRC-010-0, Requirement R2 will not hamper the ability
of NERC or the Regional Entities to compel the production of the
assessments required under Requirement R1 since these entities may
obtain this information pursuant to section 400 of the NERC Rules of
Procedure.
    76. PRC-022-1, Requirement R2--Under-Voltage Load Shedding Program
Performance:

R2. Each Transmission Operator, Load-Serving Entity, and
Distribution Provider that operates a UVLS program shall provide
documentation of its analysis of UVLS program performance to its
Regional Reliability Organization within 90 calendar days of a
request.

    77. NERC states that the purpose of Reliability Standard PRC-022-1
is to ensure that UVLS programs perform as intended to mitigate the
risk of voltage collapse or voltage instability in the bulk electric
system. NERC explains that PRC-022-1, Requirement R2 requires entities
to provide documentation of its analysis of its UVLS program
performance within 90 days of request. NERC maintains that the
retirement of Requirement R2 ``does not affect the ability of NERC to
require Reliability Coordinators to produce documentation to monitor
compliance with PRC-022-1 Requirement R1 and its sub-requirements.''
\80\
---------------------------------------------------------------------------

    \80\ Id. at 33.
---------------------------------------------------------------------------

    78. Specifically, NERC explains that PRC-022-1, Requirement R1
requires that the entity document the performance of its UVLS program.
NERC avers that the retirement of PRC-022-1, Requirement R2 ``is
consistent with reliability principles and will not result in a gap in
reliability as NERC has the ability to request [the information
documented under PRC-022-1, Requirement R2] pursuant to Section 400 of
the NERC Rules of Procedure.'' \81\ NERC concludes that ``[t]he ERO
compliance program efficiency will increase since it will no longer
need to track a static requirement of whether a UVLS program assessment
was submitted within [90] days of a request by NERC or the Regional
Entity, and instead, compliance monitoring may focus on the more
substantive requirements of PRC-022-1.'' \82\
---------------------------------------------------------------------------

    \81\ Id.
    \82\ Id.
---------------------------------------------------------------------------

    79. We propose to approve the retirement of PRC-022-1, Requirement
R2 based on NERC's explanation that the administrative task imposed
under Requirement R2 is redundant with NERC's and the Regional
Entities' authority under section 400 of the NERC Rules of Procedure.
Requirement R1 of PRC-022-1 sets forth the substantive requirements for
each applicable entity to document its analysis of the performance of
its UVLS program. The retirement of PRC-022-1, Requirement R2 will not
hamper the ability of NERC or the Regional Entities to compel the
production of the analysis required under Requirement R1 since they may
obtain this information pursuant to section 400 of the NERC Rules of
Procedure.
Voltage and Reactive Reliability Standards
    80. VAR-001-2, Requirement R5--Voltage and Reactive Control:

R5. Each Purchasing-Selling Entity and Load Serving Entity shall
arrange for (self-provide or purchase) reactive resources--which may
include, but is not limited to, reactive generation scheduling;
transmission line and reactive resource switching; and controllable
load--to satisfy its reactive requirements identified by its
Transmission Service Provider.

    81. NERC states that the retirement of VAR-001-2, Requirement R5 is
consistent with reliability principles since the requirement is
redundant with the Commission's pro forma open access transmission
tariff (OATT) and the reliability objective is achieved via VAR-001-2,
Requirement R2. NERC notes that Requirement R5 provides for
transmission customers to self-provide or purchase reactive resources
as required under Schedule 2 of the OATT. NERC states that a review of
Requirement R5 and Schedule 2 ``indicates that the reliability
objective of ensuring that [purchasing-selling entities] as well as
[load serving entities] either acquire or self provide reactive power
resources associated with transmission service requests is accomplished
via Schedule 2[.]'' \83\ NERC also explains that ``in the Electric
Reliability Council of Texas (ERCOT) region, where there is no FERC
approved OATT, reactive power is handled via Section 3.15 of the ERCOT
Nodal Protocols that describes how ERCOT establishes a Voltage Profile
for the grid, and then in detail explains the responsibilities of the
Generators, Distribution Providers and Texas Transmission Service
Providers (not to be confused with a NERC TSP), to meet the Voltage
Profile and ensure that those entities have sufficient reactive support
to do so.'' \84\ NERC maintains that there is no need to reiterate the
obligation to arrange for reactive resources in VAR-001-2, Requirement
R5.
---------------------------------------------------------------------------

    \83\ Id. at 36.
    \84\ Id. at 37.

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

    82. In addition, NERC states that the reliability objective of VAR-
001-2 is also addressed by VAR-001-2, Requirement R2.\85\ NERC asserts
that ``[t]he Transmission Operator's adherence to Requirement R2 is a
double-check for the obligations under Schedule 2 to ensure there are
sufficient reactive power resources to protect the voltage levels under
normal and Contingency conditions.'' \86\ NERC adds that the ``double
check'' under Requirement R2 ``does not relieve [purchasing-selling
entities] and [load serving entities] from their obligations under
Schedule 2 of the [open access transmission tariff] or Interchange
agreements.'' \87\
---------------------------------------------------------------------------

    \85\ Reliability Standard VAR-001-2, Requirement R2 provides,
inter alia, ``Each Transmission Operator shall acquire sufficient
reactive resources . . . within its area to protect the voltage
levels under normal and Contingency conditions.''
    \86\ Petition at 36-37.
    \87\ Id. at 37.
---------------------------------------------------------------------------

    83. We propose to approve the retirement of VAR-001-2, Requirement
R5 based on NERC's assertion that Requirement R5 is redundant with
provisions of the pro forma OATT. Specifically, Schedule 2 of the open
access transmission tariff requires transmission providers to provide
reactive power resources, either directly or indirectly, and requires
transmission customers to either purchase or self-supply reactive power
resources.\88\ A similar requirement is found in the ERCOT Nodal
Protocols that established the voltage profile for the grid within the
ERCOT region.\89\ In addition, VAR-001-2, Requirement R2 requires
transmission operators to acquire sufficient reactive resources to
protect voltage levels under normal and contingency conditions. Thus,
the retirement of VAR-001-2, Requirement R5 will not result in a
reliability gap.
---------------------------------------------------------------------------

    \88\ See, Preventing Undue Discrimination and Preference in
Transmission Service, Order No. 890-B, 123 FERC ] 61,299 (2008), Pro
Forma OATT Schedule 2 (Reactive Supply and Voltage Control from
Generation or Other Sources Service).
    \89\ See ERCOT Nodal Protocols, Section 3.15 (Voltage Support).
---------------------------------------------------------------------------

    84. We seek comment on our proposal to approve the retirement of
the 34 requirements discussed above.

B. Outstanding Directives

    85. Since the issuance of Order No. 693, the Commission has issued
a number of directives that require NERC to take certain actions. In an
effort to make better use of NERC's and the Commission's resources, the
Commission has identified 41 of the outstanding directives that the
Commission believes are no longer necessary to assure the reliable
operation of the Bulk-Power System. As a result, we propose to withdraw
the 41 outstanding directives. Attachment A to this NOPR identifies
each directive and provides an explanation why we are proposing to
withdraw the directive.\90\
---------------------------------------------------------------------------

    \90\ Each directive identified in Attachment A includes a ``NERC
Reference Number.'' Commission staff and NERC staff have developed a
common approach to identifying and tracking outstanding Commission
directives. The NERC Reference Numbers reflect this joint tracking
process.
---------------------------------------------------------------------------

    86. We used the following three criteria in identifying the 41
outstanding directives for withdrawal: (1) The reliability concern
underlying the outstanding directive has been addressed in some manner,
rendering the directive stale; (2) the outstanding directive provides
general guidance for standards development rather than a specific
directive; and (3) the outstanding directive is redundant with another
directive. Each of the 41 outstanding directives identified in
Attachment A satisfies one or more of these criteria.
    87. Therefore, we propose to withdraw the 41 directives listed in
Attachment A in the interest of enhancing the efficiency of the ERO
standards development process and reducing unnecessary burdens. We seek
comment on our proposal to withdraw the listed directives. In
particular, we seek comment on whether withdrawing the 41 directives
could have a detrimental effect on the reliability of the bulk electric
system.

IV. Information Collection Statement

    88. The information collection requirements contained in this
Proposed Rule are subject to review by the Office of Management and
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of
1995.\91\ OMB's regulations require approval of certain information
collection requirements imposed by agency rules.\92\ Upon approval of a
collection of information, OMB will assign an OMB control number and
expiration date. Respondents subject to the filing requirements of this
rule will not be penalized for failing to respond to these collections
of information unless the collections of information display a valid
OMB control number. 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.
---------------------------------------------------------------------------

    \91\ 44 U.S.C. 3507(d) (2006).
    \92\ 5 CFR 1320.11 (2012).
---------------------------------------------------------------------------

    89. The Commission based its paperwork burden estimates on the NERC
compliance registry as of April 30, 2013.\93\ According to the
registry, there are 132 balancing authorities, 544 distribution
providers, 898 generator owners, 859 generator operators, 56
interchange authorities, 515 load serving entities, 80 planning
authorities/planning coordinators, 677 purchasing selling entities, 21
reliability coordinators, 346 transmission owners, 185 transmission
operators, 185 transmission planners, and 93 transmission service
providers.
---------------------------------------------------------------------------

    \93\ The estimates for the retired CIP requirements are based on
February 28, 2013 registry data in order to provide consistency with
burden estimates provided in the Commission's recent CIP version 5
Notice of Proposed Rulemaking in Docket No. RM13-5-000.
---------------------------------------------------------------------------

    90. The Commission estimates that the burden will be reduced for
each requirement as dictated in the chart below, for a total estimated
reduction in burden of $535,500. The Commission based the burden
reduction estimates on staff experience, knowledge, and expertise.

----------------------------------------------------------------------------------------------------------------
                                                                      Average
                                                                   reduction in      Estimated       Estimated
 Standard, requirement number,       Type of         Number of     burden hours    total annual    total annual
  and FERC collection number       respondents      respondents    estimate per    reduction in    reduction in
                                                     \94\ [A]     respondent per    burden  (in    cost [A x B x
                                                                     year [B]     hours) [A x B]  $60/hour \95\]
----------------------------------------------------------------------------------------------------------------
EOP-005-2, R3.1 (FERC-725A)...  TOP.............             185               1             185          11,100
FAC-008-3, R4 (FERC-725A).....  TO, GO..........           1,151               1           1,151          69,060
FAC-008-3, R5 (FERC-725A).....  TO, GO..........           1,151               1           1,151          69,060
FAC-010-2.1, R5 (FERC-725D)...  PA..............              80              20           1,600          96,000
FAC-011-2, R5 (FERC-725D).....  RC..............              21              20             420          25,200
FAC-013-2, R3 (FERC-725A).....  PC..............              80               8           1,600          96,000
INT-007-1, R1.2 (FERC-725A)...  IA..............              56              20             448          26,880
IRO-016-1, R2 (FERC-725A).....  RC..............              21              20             420          25,200
CIP-003-3, -4, R1.2 (FERC-      RC, BA, IA, TSP,             325               1             325          19,500
 725B).                          TO, TOP, GO,
                                 GOP, LSE,.
CIP-003-3, -4, R3, R3.1, R3.2,  RC, BA, IA, TSP,             325               1             325          19,500
 R3.3 (FERC-725B).               TO, TOP, GO,
                                 GOP, LSE,.
CIP-005-3, -4, R2.6 (FERC-      RC, BA, IA, TSP,             325               4            1300          78,000
 725B).                          TO, TOP, GO,
                                 GOP, LSE,.
    Total.....................  ................  ..............  ..............           8,925         535,500
----------------------------------------------------------------------------------------------------------------

    91. The above chart does not include BAL-005-0.2b, Requirement R2;
CIP-003-3, -4, Requirement R4.2, CIP-007-3, -4, Requirement R7.3, FAC-
002-1, Requirement R2; PRC-010-0, Requirement R2; PRC-022-1,
Requirement R2; and VAR-001-2, Requirement R5 because those
requirements were found redundant with other requirements.\96\ Since
the action required within them is required elsewhere there is no
change in the overall burden in retiring these requirements. Likewise,
NUC-001-2, Requirement R9.1; NUC-001-2, Requirement R9.1.1; NUC-001-2,
Requirement R9.1.2; NUC-001-2, Requirement R9.1.3; and NUC-001-2,
Requirement R9.1.4 are not included because these requirements require
that the applicable entities put boiler plate language into their
agreements that is normally included in all legal contracts.\97\ Since
this action will be taken regardless if it is required by a NERC
Reliability, there is no reduction in burden.
---------------------------------------------------------------------------

    \94\ This number was calculated by adding all the applicable
entities while removing double counting caused by entities
registered under multiple functions.
    \95\ The estimated hourly loaded cost (salary plus benefits) for
an engineer is assumed to be $60/hour, based on salaries as reported
by the Bureau of Labor Statistics (BLS) (http://bls.gov/oes/current/naics2_22.htm). Loaded costs are BLS rates divided by 0.703 and
rounded to the nearest dollar (http://www.bls.gov/news.release/ecec.nr0.htm).
    \96\ The reporting requirements in these standards are part of
the FERC-725A information collection.
    \97\ The reporting requirements in this standard are part of the
FERC-725F information collection.
---------------------------------------------------------------------------

    Titles: FERC-725A, Mandatory Reliability Standards for the Bulk
Power System; FERC-725B, Mandatory Reliability Standards for Critical
Infrastructure Protection; FERC-725D, Facilities, Design, Connections,
and Maintenance Reliability Standards; and FERC-725F, Mandatory
Reliability Standards for Nuclear Plant Interface Coordination.
    Action: Proposed Collection of Information.
    OMB Control Nos: 1902-0244, 1902-0248, 1902-0247, and 1902-0249.
    Respondents: Business or other for profit, and not for profit
institutions.
    Frequency of Responses: On occasion.
    92. Necessity of the Information: This proceeding proposes to
approve the retirement of the 34 requirements within 19 Reliability
Standards identified by NERC. The proposed retirements either: (1)
Provide little protection for Bulk-Power System reliability or (2) are
redundant with other aspects of the Reliability Standards. In addition,
we propose to withdraw the 47 currently outstanding directives listed
in Attachment A in the interest of enhancing the efficiency of the ERO
standard development and compliance programs, as well as the efficiency
of individual registered entity compliance programs.
    93. Internal review: The Commission has reviewed NERC's proposal
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 reduction estimates associated with the retired information
requirements.
    94. 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<EMAIL_ADDRESS>phone:
(202) 502-8663, fax:<PHONE_NUMBER>].
    95. Comments concerning the information collections proposed in
this NOPR 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<EMAIL_ADDRESS>Please reference
one of the OMB Control Numbers and the docket number of this Notice of
Proposed Rulemaking (Docket No. RM13-8-000) in your submission.

V. Regulatory Flexibility Act Certification

    96. The Regulatory Flexibility Act of 1980 (RFA) \98\ 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 Office of Size Standards
develops the numerical definition of a small business.\99\ The Small
Business Administration has established a size standard for electric
utilities, stating that a firm is small if, including its affiliates,
it is primarily engaged in the transmission, generation and/or
distribution of electric energy for

sale and its total electric output for the preceding twelve months did
not exceed four million megawatt hours (MWh).\100\
---------------------------------------------------------------------------

    \98\ 5 U.S.C. 601-612 (2006).
    \99\ 13 CFR 121.101 (2012).
    \100\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    97. The Commission seeks comment on the estimated impact of the
proposed reduction of requirements on small business entities. The
Commission estimates the total reduction in burden for all small
entities to be $36,060. The Commission estimates that small planning
authorities/planning coordinators will see a reduction of $2,400 per
entity per year, greater than for other affected small entities
types.\101\ The Commission does not consider $2,400 per year to be a
significant economic impact. The Commission believes that, in addition
to the estimated economic impact, the proposed retirement of the 34
requirements of mandatory Reliability Standards will provide small
entities with relief from having to track compliance with these
provisions and preparing to show compliance in response to a potential
compliance audit by a Regional Entity or other regulator.
---------------------------------------------------------------------------

    \101\ The burden reduction for planning authorities/planning
coordinators is based on the retirement of FAC-010-2.2, Requirement
R5 and FAC-013-2, Requirement R3. Based on the NERC Compliance
Registry and Energy Information Administration Form EIA-861 data,
the Commission estimates that 5 out of the 80 planning authorities/
planning coordinators meet the definition of a small entity.
---------------------------------------------------------------------------

    98. Based on the above, the Commission certifies that the proposed
Reliability Standards will not have a significant impact on a
substantial number of small entities. Accordingly, no initial
regulatory flexibility analysis is required.

VI. Environmental Analysis

    99. 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.\102\ 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.\103\ The actions proposed here
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \102\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \103\ 18 CFR 380.4(a)(2)(ii) (2012).
---------------------------------------------------------------------------

VII. Comment Procedures

    100. The Commission invites interested persons to submit comments
on the matters and issues proposed in this notice to be adopted,
including any related matters or alternative proposals that commenters
may wish to discuss. Comments are due August 27, 2013. Comments must
refer to Docket No. RM13-8-000, and must include the commenter's name,
the organization they represent, if applicable, and their address in
their comments.
    101. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    102. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    103. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    104. 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.
    105. 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.
    106. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
    By direction of the Commission.
Kimberly D. Bose,
Secretary.

    Note:  Attachment A will not appear in the Code of Federal
Regulations.

Attachment A

----------------------------------------------------------------------------------------------------------------
          Standard        Order No.          Para               Directive             Justification
----------------------------------------------------------------------------------------------------------------
    Group A--The reliability concern underlying the outstanding directive has been addressed in some manner,
                                          rendering the directive stale
----------------------------------------------------------------------------------------------------------------
1...........  BAL-006...........          693  P 428............  ``Add measures          NERC replaced levels
                                                                   concerning the          of non-compliance
                                                                   accumulation of large   with violation
                                                                   inadvertent             severity levels
                                                                   interchange balances    (VSLs). NERC has
                                                                   and levels of non-      designated VSLs for
                                                                   compliance.'' (NERC     BAL-006.
                                                                   Reference No. 10036).
2...........  EOP-001...........          693  P 565............  ``The Commission        The VSLs listed in EOP-
                                                                   agrees with ISO-NE      001-2.1b and the
                                                                   that the Reliability    Reliability Standard
                                                                   Standard should be      Audit Worksheet for
                                                                   clarified to indicate   EOP-001 require
                                                                   that the actual         evidence of this
                                                                   emergency plan          consideration.
                                                                   elements, and not the
                                                                   ``for consideration''
                                                                   elements of
                                                                   Attachment 1, should
                                                                   be the basis for
                                                                   compliance. However,
                                                                   all of the elements
                                                                   should be considered
                                                                   when the emergency
                                                                   plan is put
                                                                   together.'' (NERC
                                                                   Reference No. 10065).

3...........  INT-004...........          693  P 843............  ``Consider adding       NERC replaced levels
                                                                   levels of non-          of non-compliance
                                                                   compliance to the       with VSLs. VSLs for
                                                                   standard.'' (NERC       INT-004 have been
                                                                   Reference No. 10134).   developed and
                                                                                approved by the
                                                                                Commission.
4...........  INT-005...........          693  P 848............  ``Consider adding       NERC replaced levels
                                                                   levels of non-          of non-compliance
                                                                   compliance to the       with VSLs. VSLs for
                                                                   standard.'' (NERC       INT-005 have been
                                                                   Reference No. 10135).   developed and
                                                                                approved by the
                                                                                Commission.
5...........  MOD-010 through             693  P 1147...........  ``Direct the ERO to     The concern underlying
               MOD-025.                                            use its authority       the directive has
                                                                   pursuant to Sec.        been addressed
                                                                   39.2(d) of our          through section 1600
                                                                   regulations to          (Requests for Data or
                                                                   require users, owners   Information) of
                                                                   and operators to        NERC's Rules of
                                                                   provide to the          Procedure. The
                                                                   Regional Entity the     Commission approved
                                                                   information related     Section 1600 of
                                                                   to data gathering,      NERC's Rules on
                                                                   data maintenance,       February 21, 2008.
                                                                   reliability
                                                                   assessments and other
                                                                   process-type
                                                                   functions.'' (NERC
                                                                   Reference No. 10266).
6...........  MOD-010...........          693  P 1152...........  ``Address critical      This directive is no
                                                                   energy infrastructure   longer necessary in
                                                                   confidentiality         light of section 1500
                                                                   issues as part of the   (Confidential
                                                                   standard development    Information) of
                                                                   process.'' (NERC        NERC's Rules of
                                                                   Reference No. 10268).   Procedure addressing
                                                                                treatment of
                                                                                confidential
                                                                                information.
7...........  MOD-010...........          693  P 1163...........  ``Direct the ERO to     The concern underlying
                                                                   develop a Work Plan     the directive has
                                                                   that will facilitate    been addressed
                                                                   ongoing collection of   through NERC's
                                                                   the steady-state        Reliability Standards
                                                                   modeling and            Development Plan:
                                                                   simulation data         2013-2015. This plan
                                                                   specified in MOD-011-   was provided to the
                                                                   0.'' (NERC Reference    Commission in an
                                                                   No. 10270).             informational filing
                                                                                on December 31, 2012.
                                                                                It contains an action
                                                                                plan to merge,
                                                                                upgrade, and expand
                                                                                existing requirements
                                                                                in the modeling data
                                                                                (MOD-010 through MOD-
                                                                                015) and demand data
                                                                                (MOD-016 through MOD-
                                                                                021) Reliability
                                                                                Standards.
8...........  PRC-017...........          693  P 1546...........  ``Require               Requirement R2 of PRC-
                                                                   documentation           017 already requires
                                                                   identified in           affected entities to
                                                                   Requirement R2 be       provide documentation
                                                                   routinely provided to   of the special
                                                                   NERC or the regional    protection system
                                                                   entity that includes    program and its
                                                                   a requirement that      implementation to the
                                                                   documentation           appropriate Regional
                                                                   identified in           Reliability
                                                                   Requirement R2 shall    Organization and NERC
                                                                   be routinely provided   within 30 calendar
                                                                   to the ERO.'' (NERC     days of a request. If
                                                                   Reference No. 10363).   either the Regional
                                                                                Entity or NERC
                                                                                determine that they
                                                                                need and will use the
                                                                                information on a
                                                                                regular schedule,
                                                                                they have the
                                                                                authority to
                                                                                establish a schedule
                                                                                under the current
                                                                                requirement.
9...........  Glossary..........          693  P 1895...........  ``Modification to the   The concern underlying
                                                                   glossary that           the directive has
                                                                   enhances the            been addressed
                                                                   definition of           through the NERC
                                                                   ``generator             registration process.
                                                                   operator'' to reflect   See Order No. 693 at
                                                                   concerns of the         P 145.
                                                                   commenters [``to
                                                                   include aspects
                                                                   unique to ISOs, RTOs
                                                                   and pooled resource
                                                                   organizations''].''
                                                                   (NERC Reference No.
                                                                   10005).
10..........  Glossary..........          693  P 1895...........  ``Modification to the   The concern underlying
                                                                   glossary that           the directive has
                                                                   enhances the            been addressed
                                                                   definition of           through the NERC
                                                                   ``transmission          registration process.
                                                                   operator'' to reflect   See Order No. 693 at
                                                                   concerns of the         P 145.
                                                                   commenters [``to
                                                                   include aspects
                                                                   unique to ISOs, RTOs
                                                                   and pooled resource
                                                                   organizations''].''
                                                                   (NERC Reference No.
                                                                   10006).
----------------------------------------------------------------------------------------------------------------
  Group B--The outstanding directive provides general guidance for standards development rather than a specific
                                                    directive
----------------------------------------------------------------------------------------------------------------
11..........  BAL-005...........          693  P 406............  ``The Commission        This paragraph is not
                                                                   understands that it     a directive to change
                                                                   may be technically      or modify a standard.
                                                                   possible for DSM to
                                                                   meet equivalent
                                                                   requirements as
                                                                   conventional
                                                                   generators and
                                                                   expects the
                                                                   Reliability Standards
                                                                   development process
                                                                   to provide the
                                                                   qualifications they
                                                                   must meet to
                                                                   participate.'' (NERC
                                                                   Reference No. 10033).

12..........  BAL-006...........          693  P 438............  ``Examine the WECC      This paragraph is not
                                                                   time error correction   a directive to change
                                                                   procedure as a          or modify a standard.
                                                                   possible guide the
                                                                   Commission asks the
                                                                   ERO, when filing the
                                                                   new Reliability
                                                                   Standard, to explain
                                                                   how the new
                                                                   Reliability Standard
                                                                   satisfies the
                                                                   Commission's
                                                                   concerns.'' (NERC
                                                                   Reference No. 10037).
13..........  COM-001...........          693  P 507............  ``Although we direct    This paragraph is not
                                                                   that the regional       a directive to change
                                                                   reliability             or modify a standard.
                                                                   organization should
                                                                   not be the compliance
                                                                   monitor for NERCNet,
                                                                   we leave it to the
                                                                   ERO to determine
                                                                   whether it is the
                                                                   appropriate
                                                                   compliance monitor or
                                                                   if compliance should
                                                                   be monitored by the
                                                                   Regional Entities for
                                                                   NERCNet User
                                                                   Organizations.''
                                                                   (NERC Reference No.
                                                                   10051).
14..........  MOD-001...........          729  P 20.............  ``We encourage the ERO  This paragraph is not
                                                                   to consider Midwest     a directive to change
                                                                   ISO's and Entegra's     or modify a standard.
                                                                   comments when
                                                                   developing other
                                                                   modifications to the
                                                                   MOD Reliability
                                                                   Standards pursuant to
                                                                   the EROs Reliability
                                                                   Standards development
                                                                   procedure.'' [See
                                                                   also P 198-199] (NERC
                                                                   Reference No. 10216).
15..........  MOD -001, -004, -           729  P 160............  ``In developing the     This paragraph is not
               008, -028, -029, -                                  modifications to the    a directive to change
               030.                                                MOD Reliability         or modify a standard.
                                                                   Standards directed in
                                                                   this Final Rule, the
                                                                   ERO should consider
                                                                   generator nameplate
                                                                   ratings and
                                                                   transmission line
                                                                   ratings including the
                                                                   comments raised by
                                                                   Entegra and ISO/RTO
                                                                   Council.'' [Also see
                                                                   P 154] (NERC
                                                                   Reference No. 10207).
16..........  MOD-001...........          729  P 179............  ``The Commission        This paragraph is not
                                                                   directs the ERO to      a directive to change
                                                                   consider Entegra's      or modify a standard.
                                                                   request regarding
                                                                   more frequent updates
                                                                   for constrained
                                                                   facilities through
                                                                   its Reliability
                                                                   Standards development
                                                                   process.'' (see Order
                                                                   No. 729 at P 177 for
                                                                   Entegra's comments).
                                                                   (NERC Reference No.
                                                                   10211).
17..........  MOD-028...........          729  P 231............  ``The Commission        This paragraph
                                                                   directs the ERO to      clarifies the
                                                                   develop a               Commission's
                                                                   modification sub-       understanding of the
                                                                   requirement R2.2        phrase ``adjacent and
                                                                   pursuant to its         beyond Reliability
                                                                   Reliability Standards   Coordination area.''
                                                                   development process     Since the
                                                                   to clarify the phrase   Commission's
                                                                   `adjacent and beyond    understanding of the
                                                                   Reliability             language is clearly
                                                                   Coordination areas.'    expressed, and the
                                                                   '' (NERC Reference      matter has little
                                                                   No. 10219).             impact on
                                                                                reliability, there is
                                                                                no reason to go
                                                                                forward with the
                                                                                directive.
18..........  MOD-028...........          729  P 234............  ``The Commission        This paragraph is not
                                                                   agrees that a           a directive to change
                                                                   graduated time frame    or modify a standard.
                                                                   for reposting could
                                                                   be reasonable in some
                                                                   situations.
                                                                   Accordingly, the ERO
                                                                   should consider this
                                                                   suggestion when
                                                                   making future
                                                                   modifications to the
                                                                   Reliability
                                                                   Standards.'' (NERC
                                                                   Reference No. 10220).
19..........  MOD-029...........          729  P 246............  ``The ERO should        This paragraph is not
                                                                   consider Puget          a directive to change
                                                                   Sound's concerns on     or modify a standard.
                                                                   this issue when
                                                                   making future
                                                                   modifications to the
                                                                   Reliability
                                                                   Standards.'' [See
                                                                   also P 245] (NERC
                                                                   Reference No. 10222).
20..........  MOD-030...........          729  P 269............  ``The Commission also   This paragraph is not
                                                                   directs the ERO to      a directive to change
                                                                   make explicit such      or modify a standard.
                                                                   [effective date]
                                                                   detail in any future
                                                                   version of this or
                                                                   any other Reliability
                                                                   Standard.'' (NERC
                                                                   Reference No. 10223).

21..........  MOD-024...........          693  P 1310...........  ``Similarly, we         This paragraph is not
                                                                   respond to              a directive to change
                                                                   Constellation that      or modify a standard.
                                                                   any modification of
                                                                   the Levels of Non-
                                                                   Compliance in this
                                                                   Reliability Standard
                                                                   should be reviewed in
                                                                   the ERO Reliability
                                                                   Standards development
                                                                   process.'' (NERC
                                                                   Reference No. 10318).
22..........  PER-002...........          693  P 1375...........  ``Training programs     This paragraph is not
                                                                   for operations          a directive to change
                                                                   planning and            or modify a standard.
                                                                   operations support
                                                                   staff must be
                                                                   tailored to the needs
                                                                   of the function, the
                                                                   tasks performed and
                                                                   personnel involved.''
                                                                   (NERC Reference No.
                                                                   10329).
23..........  VAR-001...........          693  P 1863...........  ``The Commission        This paragraph is not
                                                                   expects that the        a directive to change
                                                                   appropriate power       or modify a standard.
                                                                   factor range
                                                                   developed for the
                                                                   interface between the
                                                                   bulk electric system
                                                                   and the load-serving
                                                                   entity from VAR-001-1
                                                                   would be used as an
                                                                   input to the
                                                                   transmission and
                                                                   operations planning
                                                                   Reliability
                                                                   Standards.'' (NERC
                                                                   Reference No. 10441).
24..........  VAR-001...........          693  P 1869...........  ``We recognize that     This paragraph is not
                                                                   our proposed            a directive to change
                                                                   modification does not   or modify a standard.
                                                                   identify what
                                                                   definitive
                                                                   requirements the
                                                                   Reliability Standard
                                                                   should use for
                                                                   established limits
                                                                   and sufficient
                                                                   reactive resources.''
                                                                   (NERC Reference No.
                                                                   10434).
25..........  TPL and FAC series          705  P 49.............  ``Direct that any       This paragraph
                                                                   revised TPL             provides guidance on
                                                                   Reliability Standards   an ongoing
                                                                   must reflect            implementation issue
                                                                   consistency in the      and is not a
                                                                   lists of                directive to change
                                                                   contingencies.''        or modify a standard.
                                                                   (NERC Reference No.
                                                                   10601).
----------------------------------------------------------------------------------------------------------------
                     Group C--The outstanding directive is redundant with another directive
----------------------------------------------------------------------------------------------------------------
26..........  MOD-012...........          693  P 1177...........  ``Direct the ERO to     This directive is
                                                                   use its authority       redundant with the