[Federal Register: August 20, 2007 (Volume 72, Number 160)]
[Proposed Rules]
[Page 46413-46421]
[DOCID:fr20au07-13]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM07-3-000]

Facilities Design, Connections and Maintenance Reliability
Standards

August 13, 2007.
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 (FPA), the
Commission is proposing to approve three Reliability Standards
developed by the North American Electric Reliability Corporation
(NERC), which the Commission has certified as the Electric Reliability
Organization responsible for developing and enforcing mandatory
Reliability Standards. The three new Reliability Standards, designated
by NERC as FAC-010-1, FAC-011-1 and FAC-014-1, set requirements for the
development of system operating limits of the Bulk-Power System for use
in the planning and operation horizons.

DATES: Comments are due September 19, 2007.

ADDRESSES: Comments and reply comments may be filed electronically via
the eFiling link on the Commission's Web site at http://www.ferc.gov.

Documents created electronically using word processing software should
be filed in the native application or print-to-PDF format and not in a
scanned format. This will enhance document retrieval for both the
Commission and the public. The Commission accepts most standard word
processing formats and commenters may attach additional files with
supporting information in certain other file formats. Attachments that
exist only in paper form may be scanned. Commenters filing
electronically should not make a paper filing. Service of rulemaking
comments is not required. Commenters that are not able to file
electronically must send an original and 14 copies of their comments
to: Federal Energy Regulatory Commission, Office of the Secretary, 888
First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:
Christy Walsh (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER>.
Robert Snow (Technical Information), Office of Energy Markets and
Reliability, Division of Reliability, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6716.
Kumar Agarwal (Technical Information), Office of Energy Markets and
Reliability, Division of Reliability, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8923.

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215 of the Federal Power Act (FPA), the
Commission is proposing to approve three Reliability Standards
developed by the North American Electric Reliability Corporation
(NERC), which the Commission has certified as the Electric Reliability
Organization responsible for developing and enforcing mandatory
Reliability Standards. The three new Reliability Standards, designated
by NERC as FAC-010-1, FAC-011-1 and FAC-014-1, set requirements for the
development of system operating limits of the Bulk-Power System for use
in the planning and operation horizons.\1\
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    \1\ The Commission is not proposing any new or modified text to
its regulations. Rather, as set forth in 18 CFR part 40, a proposed
Reliability Standard will not become effective until approved by the
Commission, and the ERO must post on its Web site each effective
Reliability Standard.
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I. Background

A. EPAct 2005 and Mandatory Reliability Standards

    2. On August 8, 2005, the Electricity Modernization Act of 2005,
which is Title XII, Subtitle A, of the Energy Policy Act of 2005 (EPAct
2005), was enacted into law.\2\ EPAct 2005 adds a new section 215 to
the FPA, which requires a Commission-certified ERO to develop mandatory
and enforceable Reliability Standards, which are subject to Commission
review and approval. Once approved, the Reliability Standards may be
enforced by the ERO, subject to Commission oversight or the Commission
can independently enforce Reliability Standards.\3\
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    \2\ Energy Policy Act of 2005, Pub. L. 109-58, Title XII,
Subtitle A, 119 Stat. 594, 941 (2005), to be codified at 16 U.S.C.
824o.
    \3\ 16 U.S.C. 824o(e)(3).
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    3. On February 3, 2006, the Commission issued Order No. 672,
implementing section 215 of the FPA.\4\ Pursuant to Order No. 672, the
Commission certified one organization, NERC, as the ERO.\5\ The ERO is
required to develop Reliability Standards, which are subject to
Commission review and approval. The Reliability Standards will apply to
users, owners and operators of the Bulk-Power System, as set forth in
each Reliability Standard.
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    \4\ Rules Concerning Certification of the Electric Reliability
Organization; Procedures for the Establishment, Approval and
Enforcement of Electric Reliability Standards, Order No. 672, 71 FR
8662 (February 17, 2006), FERC Stats. & Regs. ] 31,204 (2006), order
on reh'g, Order No. 672-A, 71 FR 19814 (April 18, 2006), FERC Stats.
& Regs. ] 31,212 (2006).
    \5\ North American Electric Reliability Corp., 116 FERC ] 61,062
(ERO Certification Order), order on reh'g & compliance, 117 FERC ]
61,126 (ERO Rehearing Order) (2006), order on compliance, 118 FERC ]
61,030 (2007) (January 2007 Compliance Order).
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B. NERC's Proposed New Reliability Standards

    4. On November 15, 2006, NERC filed 20 revised Reliability
Standards and three new Reliability Standards for Commission approval.
The Commission addressed the 20 revised Reliability Standards in Order
No. 693.\6\ The three new Reliability Standards were designated by NERC
as follows:
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    \6\ On March 16, 2007, the Commission approved 83 of the 107
standards initially filed by NERC. See Mandatory Reliability
Standards for the Bulk-Power System, Order No. 693, 72 FR, 16,416
(April 4, 2007), FERC Statutes and Regulations ] 31,242 (2007),
order on reh'g Order No. 693-A, 120 FERC ] 61,053 (2007).
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    FAC-010-1 (System Operating Limits Methodology for the Planning
Horizon);
    FAC-011-1 (System Operating Limits Methodology for the Operations
Horizon); and
    FAC-014-1 (Establish and Communicate System Operating Limits).
    These three Reliability Standards were assigned to a new rulemaking
proceeding, Docket No. RM07-3-000, and are the subject of the current
Notice of Proposed Rulemaking (NOPR).\7\
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    \7\ The three Reliability Standards are not attached to this
NOPR but are available on the Commission's eLibrary document
retrieval system in Docket No. RM07-3-000 and on NERC's Web site,
http://www.nerc.com/~filez/nerc_filings_ferc.html.

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    5. In addition, NERC proposes the addition or revision of the
following terms in the NERC Glossary of Terms Used in Reliability
Standards (NERC glossary): ``cascading outages,'' ``delayed fault
clearing,'' ``Interconnection

Reliability Operating Limit (IROL),'' and ``Interconnection Reliability
Operating Limit Tv (IROL Tv).'' \8\
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    \8\ In Order No. 693, at P 1893-98, the Commission approved the
NERC glossary and directed specific modifications to the document.
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    6. NERC states that the three new Reliability Standards ensure that
system operating limits and interconnection reliability operating
limits are developed using consistent methods and that those methods
contain certain essential elements.\9\ NERC requests an effective date
of July 1, 2007 for Reliability Standards FAC-010-1, October 1, 2007
for FAC-011-1, and January 1, 2008 for FAC-014-1. NERC explains that it
has proposed a phased schedule for implementing these Reliability
Standards so that each responsible entity has sufficient time to
develop the methodology for determining stability limits associated
with a list of multiple contingencies, to update the system operating
limits as needed to comply with the new requirements, to communicate
the limits to others, and to prepare the documentation necessary to
demonstrate compliance.
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    \9\ NERC filing at 20. Section 39.5(a) of the Commission's
regulations, 18 CFR 39.5 (2007), provides that the ERO's submission
of a new or modified Reliability Standard must include, inter alia,
a concise statement of the basis and purpose of the proposed
Reliability Standard and a demonstration that the proposal is just,
reasonable not unduly discriminatory or preferential, and in the
public interest. We note that NERC's filing, at 20, includes a
single paragraph describing the purpose of the proposed Reliability
Standards. Future Reliability Standard filings may be subject to a
deficiency letter if they fail to satisfy the filing requirements
set forth in our regulations.
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    7. NERC states that the original balloting for FAC-010-1 and FAC-
011-1 took place in March 2006, but failed to reach a quorum.\10\ These
Reliability Standards were revised and posted for comment during June
and July 2006.
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    \10\ Id. at 21.
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    8. NERC states that the revised Reliability Standards were balloted
in September 2006 and were approved by a weighted average of 74.5
percent with 81.6 percent of the ballot pool voting. However, because
negative comments were received, a need for recirculation of the ballot
was triggered. The recirculation ballot was conducted in October 2006
and was approved by a weighted average of 71.66 percent with 84.93
percent of the ballot pool voting.

II. Discussion

A. FAC-010-1 (System Operating Limits Methodology for the Planning
Horizon)

1. Description of the Reliability Standard
    9. The stated Purpose of the Reliability Standard is to ``ensure
that System Operating Limits (SOLs) used in the reliable planning of
the Bulk Electric System (BES) are determined based on an established
methodology or methodologies.'' \11\ FAC-010-1 applies to ``planning
authorities'' and requires each planning authority to document its
methods for determining system operating limits and to share the
calculated limits with reliability entities.\12\
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    \11\ The NERC glossary defines system operating limit or SOL as
``the value * * * that satisfies the most limiting of the prescribed
operating criteria for a specified system configuration to ensure
operation within acceptable reliability criteria.* * *''
    \12\ The NERC glossary defines ``planning authority'' as ``the
responsible entity that coordinates and integrates transmission
facility and service plans, resource plans, and protection
systems.'' We note that Version 2 of NERC's Reliability Functional
Model, adopted by the NERC Board of Trustees on February 10, 2004,
at 14-16, discusses the role of the planning authority. However,
Version 3 of NERC's Reliability Functional Model, adopted by the
NERC Board of Trustees on February 13, 2007, at 13-15, appears to
have replaced ``planning authority'' with the new term ``planning
coordinator.''
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    10. Requirement R1 of the Reliability Standard provides that the
Planning Authority shall have a documented SOL methodology within its
planning area that is applicable to the planning time horizon, does not
exceed facility ratings, and includes a description of how to identify
the subset of SOLs that qualify as interconnection reliability
operating limits (IROLs).\13\
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    \13\ As discussed later, NERC has proposed the following
definition of IROL, ``a System Operating Limit that, if violated,
could lead to instability, uncontrolled separation, or Cascading
Outages that adversely impact the reliability of the Bulk Electric
System.''
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    11. Requirement R2 of the Reliability Standard identifies specific
considerations that must be included in the methodology. For example,
Requirement R2.1 provides that the methodology must include a
requirement that SOLs provide bulk electric system performance so that,
in the pre-contingency state and with all facilities in service, the
bulk electric system shall demonstrate transient, dynamic and voltage
stability and all facilities shall be within their facility ratings.
Requirement R2.2 provides that, following specified single
contingencies, the system shall demonstrate transient, dynamic and
voltage stability, all facilities shall be within their facility
ratings, and cascading outages or uncontrolled separation shall not
occur. Requirement R2.3 states that, starting with all facilities in
service, the system's response to a single contingency may include any
of the following:
    R2.3.1--Planned or uncontrolled interruption of electric supply to
radial customers or some local network customers connected to or
supplied by the Faulted Facility or by the affected area.
    R2.3.2--System reconfiguration through manual or automatic control
or protection actions.
    R2.3.3--To prepare for the next Contingency, system adjustments may
be made, including changes to generation, uses of the transmission
system and the transmission system topology.
    12. Requirement R2.4 provides that, starting with all facilities in
service and following any of the multiple contingencies identified in
Reliability Standard TPL-003,\14\ the system shall demonstrate
transient, dynamic and voltage stability, all facilities shall be
within their facility ratings, and cascading outages or uncontrolled
separation shall not occur. Requirement R2.5 states that, in
determining the response to any of the multiple contingencies
identified in TPL-003, in addition to the actions identified in R2.3.1
and R2.3.2, ``the following shall be acceptable: planned or controlled
interruption of electric supply to customers (load shedding), the
planned removal from service of certain generators, and/or the
curtailment of contracted Firm (non-recallable reserved) electric power
Transfers.''
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    \14\ In Order No. 693, the Commission approved TPL-003-0. In
addition, the Commission directed the ERO to develop specific
modifications to TPL-003-0. See Order No. 693 at P 1816-25.
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    13. Further, FAC-010-1 includes an Interconnection-wide regional
difference applicable to the Western Interconnection. The regional
difference provides a different, more detailed methodology for the
evaluation of multiple contingencies when establishing SOLs. It also
provides that ``the Western Interconnection may make changes
(performance category adjustments) to the Contingencies required to be
studied and/or the required responses to Contingencies for specific
facilities based on actual system performance and robust design.''
    14. Reliability Standard FAC-010-1 identifies data retention
requirements and two sets of Levels of Non-Compliance, one of general
applicability and one for the Western Interconnection. FAC-010-1
includes

Measures corresponding to each Requirement. It identifies the regional
reliability organization as the entity responsible for compliance
monitoring.
2. Commission Proposal
    15. The Commission proposes to approve Reliability Standard FAC-
010-1 as a mandatory and enforceable Reliability Standard.\15\ In
addition, the Commission seeks ERO clarification and public comment on
several matters discussed below.
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    \15\ The Commission expects that the reference to the regional
reliability organization as the compliance monitor should be
replaced with the term Regional Entity. Order No. 693 at P 157.
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a. Consistency With Order No. 890
    16. In Order No. 890, the Commission amended the pro forma open
access transmission tariff (OATT) to ensure that it achieves its
original purpose of remedying undue discrimination, provide greater
specificity to reduce opportunities for undue discrimination, and
increase transparency in the rules applicable to planning and use of
the transmission system.\16\ Order No. 890 requires the consistent use
of assumptions underlying operational planning for short-term available
transmission capability (ATC) calculations and expansion planning for
long-term ATC calculations.\17\
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    \16\ Preventing Undue Discrimination and Preference in
Transmission Service, Order No. 890, 72 FR 12266 (March 15, 2007),
FERC Stats. & Regs. ] 31,241 (2007), reh'g pending.
    \17\ Id. P 290-95.
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    17. As explained above, FAC-010-1 requires each planning authority
to document its methods for determining system operating limits or SOLs
for the planning horizon. SOLs often control or define ATC by
determining the outer limit of the operational capability between any
two areas or across a transmission path or interface. The Commission
seeks comment on whether the development of a methodology for
calculation of SOLs for the planning horizon pursuant to proposed
Reliability Standard FAC-010-1 and the calculation of ATC for the long-
term pursuant to NERC's Modeling, Data, and Analysis (MOD) Reliability
Standards results in the consistent use of assumptions as required by
Order No. 890. In particular, the Commission has the following
concerns:

    (1) For a given set of conditions, the IROL and SOL values will
change with the additional contingencies that are studied.
Application of additional first contingencies and multiple
contingencies will, in general, result in lower SOL limits as
compared to those calculated with either the existing operational or
planning contingencies. Is there a potential for the exercise of
undue discrimination against transmission customers where, for
example, a planning authority's SOL methodology calls for the
application of a single contingency in determining SOLs pursuant to
FAC-010-1 and the reliability coordinator and planning authority
calculate ATC for the long-term using the assumption of multiple
contingencies? Do the Order No. 890 transparency requirements
mitigate any potential for the exercise of undue discrimination in
this respect?
    (2) In Order No. 693, the Commission required that total
transfer capability (TTC) be addressed under the Reliability
Standard that deals with transfer capability such as FAC-012-1,
rather than MOD-001-0.\18\ The Commission disagreed with commenters
suggesting that transfer capabilities addressed by FAC-012-1 are
necessarily different from TTC used for ATC calculation. In a
similar vein, the Commission seeks comment on whether the SOLs
developed pursuant to FAC-010-1 are essentially the same as TTC used
for ATC calculation. If so, should NERC address SOLs, transfer
capability and TTC in a coordinated and consistent manner?
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    \18\ See Order No. 693 at P 1050-52.
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b. Western Interconnection Regional Difference
    18. Order No. 672 explains that ``uniformity of Reliability
Standards should be the goal and the practice, the rule rather than the
exception.'' \19\ Moreover, the Commission has stated that, as a
general matter, regional differences are permissible if they are either
more stringent than the continent-wide Reliability Standard, or if they
are necessitated by a physical difference in the Bulk-Power System.\20\
Regional differences must still be just, reasonable, not unduly
discriminatory or preferential and in the public interest.\21\
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    \19\ Order No. 672 at P 290.
    \20\ Id. P 291.
    \21\ Id.
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    19. The WECC regional difference in FAC-010-1 identifies a
different list of multiple contingencies from those in Category C of
Table 1 in the TPL Reliability Standard series. The detailed list of
considerations in the regional difference that would apply to the
Western Interconnection adds additional contingencies and appears to be
more stringent. Thus, we also propose to approve the regional
difference that would apply to the Western Interconnection regarding
the methodology for establishing SOLs.
    20. However, the Commission also has the following concern
regarding the proposed regional difference. As noted above, the
regional difference provides that the Western Interconnection may make
changes to the contingencies required to be studied or required
responses to contingencies based on actual system performance.
Presumably, such changes would be developed by WECC. However, the
Reliability Standard does not identify any process for making such
changes or indicate whether the requirements for reasonable notice and
opportunity for public comment, due process, openness and balance of
interests will be met in making such changes.\22\ Accordingly, we
propose that WECC should identify the process that it will use to make
changes to the currently listed contingencies required to be studied or
required responses to contingencies. Further, the Commission seeks
comment on whether the regional difference should be modified to
explicitly include the process that WECC will use to make changes to
the currently listed contingencies.
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    \22\ See 16 U.S.C. 824o(c)(2)(D).
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c. Other Matters
    21. The Commission seeks the following clarification from the ERO
regarding the language of FAC-010-1. As mentioned above, Requirement
R2.3 provides that the system's response to a single contingency may
include, inter alia, ``planned or controlled interruption of electric
supply to radial customers or some local network customers connected to
or supplied by the Faulted Facility or by the affected area.'' The
Commission seeks clarification whether this provision is limited to the
loss of load that is a direct result of the contingency, i.e.,
consequential load, or whether this provision allows firm load shedding
and firm transmission curtailment following a single contingency. In
Order No. 693, the Commission determined that the single contingency
provision should allow only the interruption of consequential load \23\
and seeks confirmation from the ERO that this proposed Reliability
Standard conforms to this determination.
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    \23\ Order No. 693 at P 1791-94 (discussing TPL-002-0).
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    22. Further, as noted above, while the Reliability Standard
identifies the ``planning authority'' as the applicable entities, the
most recent iteration of the Functional Model has eliminated the term
and now refers to ``planning coordinator.'' The ERO should explain its
plans to make FAC-010-1 consistent with the most recent iteration of
the Functional Model, and how this may affect the applicability of the
Reliability Standard to individual entities.\24\

Finally, NERC must remove references to the regional reliability
organization as the entity responsible for compliance monitoring and
replace it with either the Regional Entity or ERO.\25\
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    \24\ NERC's Statement of Compliance Registry Criteria (Version
3), approved by the Commission in Order No. 693, sets out criteria
that will be used by NERC and the Regional Entities for identifying
users, owners and operators of the Bulk-Power System that are
candidates for registration for compliance with mandatory
Reliability Standards. Order No. 693 at P 92-96. NERC's registry
criteria provide that NERC will register entities that perform a
``planning authority'' function. Thus, it appears that the criteria
used by NERC and the Regional Entities to register entities are
consistent with the terms of FAC-010-1.
    \25\ See Order No. 693 at P 157.
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    23. Finally, Requirement R2.2 of FAC-010-1 requires a planning
authority to consider various single contingencies including the loss
of a shunt device. While the transmission planning (TPL) Reliability
Standards implicitly require the consideration of the loss of a shunt
device, they do not require this explicitly. Should the Commission
clarify the TPL Reliability Standards by requiring the ERO to modify
them to explicitly require the consideration of a shunt device,
consistent with FAC-010-1?

B. FAC-011-1 (System Operating Limits Methodology for the Operations
Horizon)

1. Description of the Reliability Standard
    24. Proposed Reliability Standard FAC-011-1 requires each
reliability coordinator to develop a SOL methodology for determining
which of the stability limits associated with the list of multiple
contingencies are applicable for use in the operating horizon based on
actual or expected system conditions.
    25. Requirement R2 of FAC-011-1 identifies specific considerations
that must be included in the methodology in a pre-contingency state and
following one or multiple contingencies. The provisions of Requirement
R2 of FAC-011-1 are the same as those in Requirement R2 of FAC-010-1,
except for Requirement R2.3.2 of FAC-011-1, which provides as follows:

    In determining the system's response to a single Contingency,
the following shall be acceptable. * * * [i]nterruption of other
network customers, only if the system has already been adjusted, or
is being adjusted, following at least one prior outage, or, if the
real-time operating conditions are more adverse than anticipated in
the corresponding studies, e.g., load greater than studied.

    26. FAC-011-1 includes an Interconnection-wide regional difference
applicable to the Western Interconnection, which repeats the language
of the regional difference in FAC-010-1. Again, the regional difference
provides a different, more detailed methodology for the evaluation of
multiple contingencies when establishing SOLs. It also provides that
the ``Western Interconnection may make changes'' to the contingencies
required to be studied and/or the required responses to contingencies
for specific facilities.
    27. Reliability Standard FAC-011-1 identifies data retention
requirements and two sets of Levels of Non-Compliance, one of general
applicability and one for the Western Interconnection. It includes
Measures corresponding to each Requirement and identifies the regional
reliability organization as the entity responsible for compliance
monitoring.
2. Commission Proposal
    28. The Commission proposes to approve Reliability Standard FAC-
011-1 as a mandatory and enforceable Reliability Standard. In addition,
the Commission seeks ERO clarification and public comment on several
matters discussed below.
a. Consistency With Order No. 890
    29. Similar to our concerns discussed above regarding FAC-010-1,
the Commission has the following concerns:

    (1) Is there a potential for the exercise of undue
discrimination against transmission customers where, for example, a
reliability coordinator's SOL methodology calls for the application
of a single contingency in determining SOLs pursuant to FAC-011-1
and the reliability coordinator and planning authority calculate ATC
for the short-term using the assumption of multiple contingencies?
Do the Order No. 890 transparency requirements mitigate any
potential for the exercise of undue discrimination in this respect?
    (2) In Order No. 693, the Commission required that TTC be
addressed under the Reliability Standard that deals with transfer
capability such as FAC-012-1, rather than MOD-001-0.\26\ The
Commission disagreed with commenters suggesting that transfer
capabilities addressed by FAC-012-1 are necessarily different from
TTC used for ATC calculation. In a similar vein, the Commission
seeks comment on whether the SOLs developed pursuant to FAC-011-1
are essentially the same as TTC used for ATC calculation. If so,
should NERC address SOLs, transfer capability and TTC in a
coordinated and consistent manner?
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    \26\ See Order No. 693 at P 1050-52.
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b. Western Interconnection Regional Difference
    30. The detailed list of considerations in the regional difference
that would apply to the Western Interconnection appears to be more
stringent and detailed than the set of contingencies provided in
Requirement R2 of FAC-011-1. Thus, we also propose to approve the
regional difference that would apply to the Western Interconnection
regarding the methodology for the evaluation of multiple facility
contingencies when establishing SOLs.
    31. Similar to our discussion regarding FAC-010-1, the Commission
is concerned that the regional difference provides that the Western
Interconnection may make changes to the contingencies required to be
studied or required responses to contingencies based on actual system
performance. Presumably, such change would be developed by WECC.
However, the Reliability Standard does not identify any process for
making such changes or indicate whether the requirements for reasonable
notice and opportunity for public comment, due process, openness and
balance of interests will be met in making such changes.\27\
Accordingly, we propose that WECC should identify the process that it
will use to make changes to the currently listed contingencies required
to be studied or required responses to contingencies. Further, the
Commission seeks comment on whether the regional difference should be
modified to explicitly include the process that WECC will use to make
changes to the currently listed contingencies.
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    \27\ See 16 U.S.C. 824o(c)(2)(D).
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c. Other Matters
    32. As mentioned above, Requirement R2.3.2 provides that the
system's response to a single contingency may include, inter alia,
``[i]nterruption of other network customers, only if the system has
already been adjusted, or is being adjusted, following at least one
prior outage, or, if the real-time operating conditions are more
adverse than anticipated in the corresponding studies, e.g., load
greater than studied.'' The Commission seeks clarification from the ERO
regarding the meaning of the phrase ``if the real-time operating
conditions are more adverse than anticipated in the corresponding
studies, e.g., load greater than studied.'' In particular, the
Commission is concerned whether this provision treats load forecast
error as a contingency and as such would allow an interruption due to
an inaccurate weather forecast. Finally, NERC must remove references to
the regional reliability organization as the entity responsible for
compliance monitoring and replace it with either the Regional Entity or
ERO.\28\
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    \28\ See Order No. 693 at P 157.

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    33. Requirement R2.2 of FAC-011-1 requires a reliability
coordinator to consider various single contingencies including the loss
of a shunt device. While the TPL Reliability Standards implicitly
require the consideration of the loss of a shunt device, they do not
require this explicitly. Should the TPL Reliability Standards be
modified to explicitly require the consideration of a shunt device,
consistent with FAC-011-1?

C. FAC-014-1 (Establish and Communicate System Operating Limits)

1. Description of the Reliability Standard
    34. Proposed Reliability Standard FAC-014-1 requires each
reliability coordinator, planning authority, transmission planner and
transmission operator to develop and communicate SOL limits in
accordance with the methodologies developed pursuant to FAC-010-1 and
FAC-011-1.
    35. Requirement R1 requires the reliability coordinator to ensure
that SOLs are established for its ``reliability coordinator area'' and
that the SOLs are consistent with its SOL methodology. Requirement R2
requires the transmission operator to establish SOLs as directed by its
reliability coordinator that are consistent with the reliability
coordinator's methodology. Likewise, Requirements R3 and R4 require the
planning authority and transmission planner, respectively, to establish
SOLs consistent with the planning authority's SOL methodology.
Requirement R5 requires the reliability coordinator, planning authority
and transmission planner to provide its SOLs to those entities that
have a reliability-related need. Finally, Requirement R6 requires the
planning authority to identify the subset of multiple contingencies, if
any, from Reliability Standard TPL-003 which result in stability limits
and to provide this list and associated stability limits to the
relevant reliability coordinator.
    36. Reliability Standard FAC-014-1 includes data retention
requirements, Levels of Non-Compliance, and Measures corresponding to
each Requirement. It identifies the regional reliability organization
as the entity responsible for compliance monitoring.
2. Commission Proposal
    37. The Commission proposes to approve Reliability Standard FAC-
014-1 as a mandatory and enforceable Reliability Standard. The
Reliability Standard fulfills an important reliability goal in the
development and communication of SOL limits in accordance with
consistent methodologies. However, NERC must remove references to the
regional reliability organization as the entity responsible for
compliance monitoring and replace it with either the Regional Entity or
ERO.\29\
---------------------------------------------------------------------------

    \29\ See Order No. 693 at P 157.
---------------------------------------------------------------------------

D. Proposed Definitions

    38. NERC proposes the addition or revision of the following four
terms in the NERC glossary:

    Cascading Outages: The uncontrolled successive loss of bulk
electric system facilities triggered by an incident (or condition)
at any location resulting in the interruption of electric service
that cannot be restrained from spreading beyond a pre-determined
area.
    Delayed Fault Clearing: Fault clearing consistent with correct
operation of a breaker failure protection system and its associated
breakers, or of a backup protection system with an intentional time
delay.
    Interconnection Reliability Operating Limit (IROL): A system
operating limit that, if violated, could lead to instability,
uncontrolled separation, or cascading outages that adversely impact
the reliability of the bulk electric system.
    Interconnection Reliability Operating Limit Tv (IROL
Tv): The maximum time that an Interconnection Reliability
Operating Limit can be violated before the risk to the
interconnection or other Reliability Coordinator Area(s) becomes
greater than acceptable. Each Interconnection Reliability Operating
Limit's Tv shall be less than or equal to 30 minutes.

    39. The Commission believes that there could be multiple
interpretations of some of these terms. As such, the Commission
proposes to provide its clarification of Cascading Outages,
Interconnection Reliability Operating Limit, and Interconnection
Reliability Operating Limit TV to be consistent with
directives in Order No. 693.
    40. The current definition of Cascading Outages in the approved
NERC glossary is ``The uncontrolled successive loss of system elements
triggered by an incident at any location. Cascading results in
widespread electric service interruption that cannot be restrained from
sequentially spreading beyond an area predetermined by studies.'' \30\
The ambiguity in the term relates to the last phrase in the definition
which identifies the extent of an outage that would be considered a
cascade. The revised definition uses the similar phrase ``a
predetermined area'' which may lead to different interpretations. The
Commission understands that this phrase has been interpreted as being
as small as the elements that would be removed from service by local
protective relays to as large as the entire balancing authority. Simply
put, some applications of Cascading Outage could allow the loss of an
entire balancing authority and not consider that loss to be a Cascading
Outage. The Commission disagrees with such a liberal application. For
purposes of compliance, the Commission proposes to direct NERC to
consider the loss of facilities in the bulk electric systems that are
beyond those that would be removed from service by primary or backup
protective relaying associated with the initiating event to be a
Cascading Outage. With this understanding of the phrase, the Commission
proposes to accept the definition in FAC-014.
---------------------------------------------------------------------------

    \30\ NERC April 4, 2006 Request for Approval of Reliability
Standards, Glossary of Terms Used in Reliability Standards at 2.
---------------------------------------------------------------------------

    41. With respect to NERC's proposed definition of IROL, the
Commission identified in Order No. 693 that the statutory definition of
Reliable Operation is to assure that the system is operated within
thermal, voltage and stability limits such that instability,
uncontrolled separation, or cascading failures will not occur. IROLs
are a specific subset of the operating limits at which instability,
uncontrolled separation, or cascading failures may occur. All IROL
violations will have an adverse impact on the reliability of the bulk
electric system.
    42. The definition of IROL in the approved NERC glossary is ``The
value (such as MW, MVar, Amperes, Frequency or Volts) derived from, or
a subset of the System Operating Limits, which if exceeded, could
expose a widespread area of the Bulk Electric System to instability,
uncontrolled separation(s) or cascading outages.'' \31\ The revised
definition is consistent with the intent of the statute with the
exception of the phrase ``that adversely impacts the reliability of the
bulk electric system.'' This may give the impression that violation of
some IROLs that do not adversely impact the reliability of the bulk
electric system are acceptable. The Commission proposes to accept the
definition in FAC-014 with the understanding that all IROLs impact bulk
electric system reliability.
---------------------------------------------------------------------------

    \31\ Id. at 7.
---------------------------------------------------------------------------

    43. In Order No. 693, the Commission identified two interpretations
of when an entity exceeds an IROL.\32\ The definition of IROL
Tv does not distinguish between those two interpretations.
The Commission proposes to accept the definition in FAC-014 with the
understanding that the only time it is acceptable to violate

an IROL is in the limited time after a contingency has occurred and the
operators are taking action to eliminate the violation.
---------------------------------------------------------------------------

    \32\ See Order No. 693 at P 946 & n.303.
---------------------------------------------------------------------------

E. Violation Risk Factors

    44. As part of its compliance and enforcement program, NERC plans
to assign a low, medium or high Violation Risk Factor to each
requirement of each mandatory Reliability Standard to associate a
violation of the requirement with its potential impact on the
reliability of the Bulk-Power System. The categories are based on the
following definitions:

    High Risk Requirement: (a) Is a requirement that, if violated,
could directly cause or contribute to Bulk-Power System instability,
separation, or a cascading sequence of failures, or could place the
Bulk-Power System at an unacceptable risk of instability,
separation, or cascading failures; or (b) is a requirement in a
planning time-frame that, if violated, could, under emergency,
abnormal, or restorative conditions anticipated by the preparations,
directly cause or contribute to Bulk-Power System instability,
separation, or a cascading sequence of failures, or could place the
Bulk-Power System at an unacceptable risk of instability,
separation, or cascading failures, or could hinder restoration to a
normal condition.
    Medium Risk Requirement: (a) Is a requirement that, if violated,
could directly affect the electrical state or the capability of the
Bulk-Power System, or the ability to effectively monitor and control
the Bulk-Power System, but is unlikely to lead to Bulk-Power System
instability, separation, or cascading failures; or (b) is a
requirement in a planning time frame that, if violated, could, under
emergency, abnormal, or restorative conditions anticipated by the
preparations, directly affect the electrical state or capability of
the Bulk-Power System, or the ability to effectively monitor,
control, or restore the Bulk-Power System, but is unlikely, under
emergency, abnormal, or restoration conditions anticipated by the
preparations, to lead to Bulk-Power System instability, separation,
or cascading failures, nor to hinder restoration to a normal
condition.
    Lower Risk Requirement: Is administrative in nature and (a) is a
requirement that, if violated, would not be expected to affect the
electrical state or capability of the Bulk-Power System, or the
ability to effectively monitor and control the Bulk-Power System; or
(b) is a requirement in a planning time frame that, if violated,
would not, under the emergency, abnormal, or restorative conditions
anticipated by the preparations, be expected to affect the
electrical state or capability of the Bulk-Power System, or the
ability to effectively monitor, control, or restore the Bulk-Power
System.\33\
---------------------------------------------------------------------------

    \33\ North American Electric Reliability Corp., 119 FERC ]
61,145 at P 9 (2007) (Violation Risk Factor Order).

    45. In a separate filing, NERC identified Violation Risk Factors
for each Requirement of proposed Reliability Standards FAC-010-1, FAC-
011-1 and FAC-014-1.\34\ NERC requested that the Commission approve the
Violation Risk Factors when it takes action on the associated
Reliability Standards.
---------------------------------------------------------------------------

    \34\ See NERC March 23, 2007 Request for Approval of Violation
Risk Factors for Version 1 Reliability Standards, Docket No. RR07-
10-000, Exh. A, Violation Risk Factors for Facility Ratings
Standards FAC-008-1 through FAC-014-1. The Commission addressed only
those Violation Risk Factors pertaining to the 83 Reliability
Standards approved in Order No. 693. Violation Risk Factor Order,
119 FERC ] 61,145 (2007).
---------------------------------------------------------------------------

    46. In the Violation Risk Factor Order, the Commission addressed
Violation Risk Factors filed by NERC for Version 0 and Version 1
Reliability Standards. In that order, the Commission used five
guidelines for evaluating the validity of each Violation Risk Factor
assignment: (1) Consistency with the conclusions of the Final Report on
the August 14, 2003 blackout in the United States and Canada,\35\ (2)
consistency within a Reliability Standard, (3) consistency among
Reliability Standards with similar Requirements, (4) consistency with
NERC's proposed definition of the Violation Risk Factor level, and (5)
assignment of Violation Risk Factor levels to those Requirements in
certain Reliability Standards that co-mingle a higher risk reliability
objective and a lower risk reliability objective.\36\
---------------------------------------------------------------------------

    \35\ U.S.-Canada Power System Outage Task Force (Task Force),
Final Report on the August 14, 2003 Blackout in the United States
and Canada: Causes and Recommendations (April 2004) (Final Blackout
Report). The Final Blackout Report is available on the Internet at
http://www.ferc.gov/industries/electric/indus-act/blackout.asp.

    \36\ For a complete discussion of each factor, see the Violation
Risk Factor Order at P 19-36.
---------------------------------------------------------------------------

    47. The Commission proposes to approve most of the Violation Risk
Factors for Reliability Standards FAC-010-1, FAC-011-1 and FAC-014-1
that NERC identified in its March 23, 2007 filing. However, several of
the Violation Risk Factors submitted for Reliability Standards FAC-010-
1, FAC-011-1 and FAC-014-1 raise concerns. First, the Commission notes
that there are no Violation Risk Factors applicable to the WECC
regional differences and that certain portions of the WECC regional
differences lack levels of non-compliance. The Commission requests
comment on whether it should require WECC to develop Violation Risk
Factors and the levels of non-compliance for the regional differences.
If so, we request comment on how WECC should assess penalties in the
interim.
    48. In FAC-010-1, the Commission proposes to direct NERC to modify
the lower Violation Risk Factor assigned to Requirement R2 and the
medium Violation Risk Factor assigned to sub-Requirements R2.1-R2.2.3
based on guideline (4), which was developed to evaluate whether the
assignment of a particular Violation Risk Factor level conforms to
NERC's definition of that risk level.
    49. FAC-010-1 Requirement R2 requires the Planning Authority's SOL
methodology to include a requirement that SOLs provide bulk electric
system performance consistent with a stable pre-contingency (sub-
Requirement R2.1) and post-contingency (sub-Requirements R2.2-R2.2.3)
bulk electric system using an accurate system topology with all
facilities operating within their ratings and without post-contingency
cascading outages or uncontrolled separation.
    50. NERC has assigned a lower Violation Risk Factor to Requirement
R2.1, which requires the bulk electric system in a pre-contingency
state and with all facilities in service to demonstrate transient,
dynamic and voltage stability. The Commission believes that the lower
assignment is inappropriate. A violation of a lower Violation Risk
Factor, by definition, is generally considered administrative in nature
and would not be expected to affect the electrical state or capability
of the Bulk-Power System, or the ability to effectively monitor,
control or restore the Bulk-Power System.\37\ The Commission believes
that the lower Violation Risk Factor NERC proposes for this Requirement
is not consistent with the ``lower'' definition, but consistent with
the definition of ``high.'' The Commission believes that a violation of
Requirement R2.1 could directly cause or contribute to Bulk-Power
System instability, separation or cascading failures since a violation
of R2.1 means that the system is in an unreliable state even before the
system is subject to respond to a contingency. Therefore, we propose to
require NERC to change the Violation Risk Factor of R.2.1 to high.
---------------------------------------------------------------------------

    \37\ See id.
---------------------------------------------------------------------------

    51. Similarly, NERC assigns a medium violation Risk Factor to FAC-
010-1 R2.2, which would be appropriate if a violation is unlikely to
lead to Bulk-Power System instability, separation or cascading
failures.\38\ However, Requirement R2.2 specifically states that with
regard to post-contingency bulk electric system performance,
``[c]ascading outages or uncontrolled separation shall not occur.''
Therefore, if Requirement R2.2 is violated for any one of the specific
contingencies as described in Requirements R2.2.1-

R2.2.3, cascading outages or uncontrolled separation of the Bulk-Power
System may occur. The potential risk a violation of R2.2 poses to the
Bulk-Power System is not consistent with the definition of a medium
Violation Risk Factor. Instead, the risk a violation of R2.2 presents
to the Bulk-Power System is consistent with the definition of a high
Violation Risk Factor.\39\ Therefore, we propose to require NERC to
change the Violation Risk Factor of R.2.2 to high.
---------------------------------------------------------------------------

    \38\ See Violation Risk Factor Order, 119 FERC ] 61,145 at P 9.
    \39\ See id.
---------------------------------------------------------------------------

    52. As stated in the Violation Risk Factor Order, the Commission
expects a rational connection between the sub-Requirement Violation
Risk Factor assignments and the main Requirement Violation Risk Factor
assignment.\40\ Because the Commission proposes to require NERC to
modify the Violation Risk Factors for the sub-requirements of R2, to
have a rational connection between the Violation Risk Factors assigned
to sub-Requirements and Violation Risk Factors assigned to the main
Requirement, we are also proposing to require NERC to change the
Violation Risk Factor for R2 to high.
---------------------------------------------------------------------------

    \40\ Id. P 22.
---------------------------------------------------------------------------

    53. Similarly, the Commission has the same concern and proposal to
reassign NERC's Violation Risk Factors for FAC-011-1 Requirement R2 and
sub-Requirements R2.1-R2.2.3, which contain similar language as the
corresponding Requirements in FAC-010-1.
    54. With regard to FAC-014-1, our concerns are with NERC's proposed
Violation Risk Factor assignment of medium to Requirement R5 and sub-
Requirements R5.1-R5.1.4. Requirement R5 requires that the reliability
coordinator, planning authority and transmission planner each provide
its SOLs and IROLs to those entities that have a reliability-related
need for those limits and provide a written request that includes a
schedule for delivery of those limits. Sub-Requirements R5.1-R5.1.4
comprise the list of supporting information to be provided. The
Commission has concerns with NERC's proposed assignment based on its
lack of consistency with the Final Blackout Report.
    55. The Commission believes that it is important to ensure that
critical areas identified as causes of the August 2003 and other
previous major blackouts are appropriately assigned as potential risks
to the reliability of the Bulk-Power System.\41\ For example, the Final
Blackout Report identified ineffective communications as one common
factor of the August 2003 blackout and other previous major
blackouts.\42\ The Final Blackout Report explained that, ``[u]nder
normal conditions, parties with reliability responsibility need to
communicate important and prioritized information to each other in a
timely way, to help preserve the integrity of the grid.'' \43\
---------------------------------------------------------------------------

    \41\ Id. P 19-21.
    \42\ Final Blackout Report at 107.
    \43\ Id. at 109.
---------------------------------------------------------------------------

    56. The Commission believes that NERC's proposed Violation Risk
Factor assignment of medium for the subject Requirements is not
consistent with the findings of the Final Blackout Report. By
definition, a ``medium'' Violation Risk Factor designation means that a
violation of the requirement is unlikely to lead to Bulk-Power System
instability, separation or cascading failures.\44\ Findings of the
Final Blackout Report, as well as reports on other previous major
blackouts, have determined otherwise in that the timely communication
of important and prioritized information, in this case, SOLs and IROLs,
to entities that have a reliability-related need for those limits are
crucial in maintaining the reliability of the Bulk-Power System.
---------------------------------------------------------------------------

    \44\ Violation Risk Factor Order, P 9.
---------------------------------------------------------------------------

    57. As a result, we propose to require NERC to assign FAC-014-1
Requirement R5, as well as sub-Requirements R5.1-R5.1.4, a high
Violation Risk Factor to accurately reflect the potential risk a
violation of the subject requirements presents to the Bulk-Power
System.

III. Information Collection Statement

    58. The Office of Management and Budget (OMB) regulations require
approval of certain information collection requirements imposed by
agency rules.\45\ Upon approval of a collection(s) of information, OMB
will assign an OMB control number and an 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
Paperwork Reduction Act (PRA) \46\ requires each federal agency to seek
and obtain OMB approval before undertaking a collection of information
directed to ten or more persons, or continuing a collection for which
OMB approval and validity of the control number are about to
expire.\47\ The PRA defines the phrase ``collection of information'' to
be the ``obtaining, causing to be obtained, soliciting, or requiring
the disclosure to third parties or the public, of facts or opinions by
or for an agency, regardless of form or format, calling for either--
---------------------------------------------------------------------------

    \45\ 5 CFR 1320.13 (2007).
    \46\ 44 U.S.C. 3501-3520.
    \47\ 44 U.S.C. 3502(3)(A)(i), 44 U.S.C. 3507(a)(3).

    (i) Answers to identical questions posed to, or identical
reporting or recordkeeping requirements imposed on ten or more
persons, other than agencies, instrumentalities, or employees of the
United States; or (ii) answers to questions posed to agencies,
instrumentalities, or employees of the United States which are to be
used for general statistical purposes.'' \48\
---------------------------------------------------------------------------

    \48\ 44 U.S.C. 3502(3)(A).

    59. This NOPR proposes to approve three new Reliability Standards
developed by NERC as the ERO. Section 215 of the FPA authorizes the ERO
to develop Reliability Standards to provide for the operation of the
Bulk-Power System. Pursuant to the statute, the ERO must submit each
Reliability Standard that it proposes to be made effective to the
Commission for approval.\49\
---------------------------------------------------------------------------

    \49\ See 16 U.S.C. 824o(d).
---------------------------------------------------------------------------

    60. The three proposed Reliability Standards do not require
responsible entities to file information with the Commission. Nor, with
the exception of a three year self-certification of compliance, do the
Reliability Standards require responsible entities to file information
with the ERO or Regional Entities. However, the Reliability Standards
do require responsible entities to develop and maintain certain
information for a specified period of time, subject to inspection by
the ERO or Regional Entities. Reliability Standard FAC-010-1 requires
the planning authority to have a documented methodology for use in
developing system operating limits or SOLs and must retain evidence
that it issued its SOL methodology to relevant reliability
coordinators, transmission operators and adjacent planning authorities.
Likewise, the planning authority must respond to technical comments on
the methodology within 45 days of receipt. Further, each planning
authority must self-certify its compliance to the compliance monitor
once every three years. Reliability Standard FAC-011-1 requires similar
documentation by the reliability coordinator.
    61. Reliability Standard FAC-014-1 requires the reliability
coordinator, planning authority, transmission operator, and
transmission planner to verify compliance through self-certification
submitted to the compliance monitor annually. These entities must also
document that they have developed SOLs consistent with the applicable
SOL methodology and

that they have provided SOLs to entities identified in Requirement 5 of
the Reliability Standard. Further, the planning authority must maintain
a list of multiple contingencies and their associated stability limits.
    62. The Commission is submitting these reporting and recordkeeping
requirements to OMB for its review and approval under section 3507(d)
of the Paperwork Reduction Act. Comments are solicited on the
Commission's need for this information, whether the information will
have practical utility, the accuracy of provided burden estimates, ways
to enhance the quality, utility, and clarity of the information to be
collected, and any suggested methods for minimizing the respondent's
burden, including the use of automated information techniques.
    63. Our Estimates below regarding the number of respondents is
based on the NERC compliance registry as of April 2007. NERC and the
Regional Entities have identified approximately 170 Investor Owned
Utilities, and 80 Large Municipals and Cooperatives. NERC's compliance
registry indicates that there is a significant amount of overlap among
the entities that perform these functions. In some instances, a single
entity may be registered under all four of these functions. Thus, the
Commission estimates that the total number of entities required to
comply with the information ``reporting'' or development requirements
of the proposed Reliability Standards is approximately 250 entities.
About two-thirds of these entities are investor-owned utilities and
one-third is a combination of municipal and cooperative organizations.
    64. Burden Estimate: The Public Reporting burden for the
requirements contained in the NOPR is as follows:

----------------------------------------------------------------------------------------------------------------
                                       Number of       Number of
          Data collection             respondents      responses     Hours per respondent    Total annual hours
----------------------------------------------------------------------------------------------------------------
                                                    FERC-725D
----------------------------------------------------------------------------------------------------------------
Investor-Owned Utilities..........             170               1  Reporting: 90........  Reporting: 15,300.
                                    ..............  ..............  Recordkeeping: 210...  Recordkeeping:
                                                                                35,700.
Large Municipals and Cooperatives.              80               1  Reporting: 90........  Reporting: 7,200.
                                    ..............  ..............  Recordkeeping: 210...  Recordkeeping:
                                                                                16,800.
                                   -----------------------------------------------------------------------------
    Total.........................             250  ..............  .....................  75,000.
----------------------------------------------------------------------------------------------------------------

    Total Hours: (Reporting 22,500 hours + Recordkeeping 52,500 hours)
= 75,000 hours.
    (FTE=Full Time Equivalent or 2,080 hours)
    Total Annual hours for Collection: (Reporting + recordkeeping) =
75,000 hours.
    Information Collection Costs: The Commission seeks comments on the
costs to comply with these requirements. It has projected the average
annualized cost to be the total annual hours (reporting) 22,500 times
$120 = $2,700,000.
    Storage 1,800 sq. ft. x $925 (off site storage) = $1,665,000.
    Total costs = $6,465,000.
    The Commission believes that this estimate may be conservative
because most if not all of the applicable entities currently perform
SOL calculations and the proposed Reliability Standards will provide a
common methodology for those calculations.
    Title: FERC-725D Facilities Design, Connections and Maintenance
Reliability Standards.
    Action: Proposed Collection of Information.
    OMB Control No.: To be determined.
    Respondents: Business or other for profit, and/or not for profit
institutions.
    Frequency of Responses: One time to initially comply with the rule,
and then on occasion as needed to revise or modify. In addition, annual
and three-year self-certification requirements will apply.
    Necessity of the Information: The three Reliability Standards, if
adopted, would implement the Congressional mandate of the Energy Policy
Act of 2005 to develop mandatory and enforceable Reliability Standards
to better ensure the reliability of the nation's Bulk-Power System.
Specifically, the three proposed Reliability Standards would ensure
that system operating limits or SOLs used in the reliability planning
and operation of the Bulk-Power System are determined based on an
established methodology.
    Internal review: The Commission has reviewed the requirements
pertaining to mandatory Reliability Standards for the Bulk-Power System
and determined the proposed requirements are necessary to meet the
statutory provisions of the Energy Policy Act of 2005. These
requirements conform to the Commission's plan for efficient information
collection, communication and management within the energy industry.
The Commission has assured itself, by means of internal review, that
there is specific, objective support for the burden estimates
associated with the information requirements.
    65. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426 [Attention: Michael Miller,
Office of the Executive Director, Phone:<PHONE_NUMBER>, fax: (202)
273-0873, e-mail<EMAIL_ADDRESS>Comments on the
requirements of the proposed rule may also be sent to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy
Regulatory Commission], e-mail<EMAIL_ADDRESS>
IV. Environmental Analysis

    66. 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.\50\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. The actions proposed here fall within the categorical
exclusion in the Commission's regulations for rules that are
clarifying, corrective or procedural, for information gathering,
analysis, and dissemination.\51\ Accordingly, neither an environmental
impact statement nor environmental assessment is required.
---------------------------------------------------------------------------

    \50\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
    \51\ 18 CFR 380.4(a)(5) (2007).

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

V. Regulatory Flexibility Act Certification

    67. The Regulatory Flexibility Act of 1980 (RFA) \52\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
Most of the entities, i.e., planning authorities, reliability
coordinators, transmission planners and transmission operators, to
which the requirements of this rule would apply do not fall within the
definition of small entities.\53\
---------------------------------------------------------------------------

    \52\ 5 U.S.C. 601-612.
    \53\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. See
15 U.S.C. 632 (2000). According to the SBA, a small electric utility
is defined as one that has a total electric output of less than four
million MWh in the preceding year.
---------------------------------------------------------------------------

    68. As indicated above, based on available information regarding
NERC's compliance registry, approximately 250 entities will be
responsible for compliance with the three new Reliability Standards. It
is estimated that one-third of the responsible entities, about 80
entities, would be municipal and cooperative organizations. The
proposed Reliability Standards would apply to planning authorities,
transmission planners, transmission operators and reliability
coordinators, which tend to be larger entities. Thus, the Commission
believes that only a portion, approximately 30 to 40 of the municipal
and cooperative organizations to which the proposed Reliability
Standards would apply, qualify as small entities.\54\ The Commission
does not consider this a substantial number. Moreover, as discussed
above, the proposed Reliability Standards will not be a burden on the
industry since most if not all of the applicable entities currently
perform SOL calculations and the proposed Reliability Standards will
simply provide a common methodology for those calculations.
Accordingly, the Commission certifies that the proposed Reliability
Standards will not have a significant adverse impact on a substantial
number of small entities.
---------------------------------------------------------------------------

    \54\ According to the DOE's Energy Information Administration
(EIA), there were 3,284 electric utility companies in the United
States in 2005, and 3,029 of these electric utilities qualify as
small entities under the SBA definition. Among these 3,284 electric
utility companies are: (1) 883 cooperatives of which 852 are small
entity cooperatives; (2) 1,862 municipal utilities, of which 1842
are small entity municipal utilities; (3) 127 political
subdivisions, of which 114 are small entity political subdivisions;
and (4) 219 privately owned utilities, of which 104 could be
considered small entity private utilities. See Energy Information
Administration Database, Form EIA-861, Dept. of Energy (2005),
available at http://www.eia.doe.gov/cneaf/electricity/page/eia861.html
.

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

    69. Based on this understanding, the Commission certifies that this
rule will not have a significant economic impact on a substantial
number of small entities. Accordingly, no regulatory flexibility
analysis is required.

VI. Comment Procedures

    70. 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 September 19, 2007. Comments must refer to
Docket No. RM07-3-000, and must include the commenter's name, the
organization they represent, if applicable, and their address in their
comments. Comments may be filed either in electronic or paper format.
    71. Comments may 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 and commenters may attach
additional files with supporting information in certain other file
formats. Commenters filing electronically do not need to make a paper
filing. Commenters that are not able to file comments electronically
must send an original and 14 copies of their comments to: Federal
Energy Regulatory Commission, Office of the Secretary, 888 First
Street, NE., Washington, DC 20426.
    72. 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.

VII. Document Availability

    73. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's

Public Reference Room during normal business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    74. From FERC's Home Page on the Internet, this information is
available on eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
    75. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from our Help line at<PHONE_NUMBER>
or the Public Reference Room at<PHONE_NUMBER> Press 0, TTY (202) 502-
8659. E-Mail the Public Reference Room at
<EMAIL_ADDRESS>

    By direction of the Commission.
Kimberly D. Bose,
Secretary.
 [FR Doc. E7-16253 Filed 8-17-07; 8:45 am]

BILLING CODE 6717-01-P


UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on October 13, 2005

NOTICE OF ACTION TAKEN -- DOCKET OST-2000-7565

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________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  LINEAS AEREAS SURAMERICANAS, LTDA. 		            Date Filed:
August 15, 2005

Relief requested:  Renewal of exemption from 49 USC § 41301 to permit
the applicant to conduct scheduled foreign air transportation of
property and mail between a point or points in Colombia and the terminal
points San Juan, Puerto Rico, and Miami, Florida.  The applicant also
requests renewal of its authority to conduct all-cargo charters in
accordance with 14 CFR Part 212.

If renewal, date and citation of last action:  September 24, 2004, in
this Docket.

Applicant representative:  Claudia Cote,<PHONE_NUMBER>    DOT analyst:
Robert J. Finamore,<PHONE_NUMBER>

Responsive pleadings:  None.

	DISPOSITION

Action:  Approved.
         Action date:  October 13, 2005

Effective dates of authority granted:  October 13, 2005, through October
13, 2006.

Basis for approval (bilateral agreement/reciprocity):  United
States-Colombia Air Transport Services Agreement.

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations of our standard exemption conditions
(attached).

Special conditions/Remarks:  In the conduct of the all-cargo charter
services authorized above, Lineas Aereas Suramericanas shall not perform
any charters unless specific authority in the form of a statement of
authorization for such charters has been granted by the Department. (See
Order 91-8-6)

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

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Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) the applicant was qualified to perform its proposed
operations; (3) grant of the authority was consistent with the public
interest; and (4) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp

FOREIGN CARRIER EXEMPTION CONDITIONS
                              ATTACHMENT

In the conduct of the operations authorized, the foreign carrier
applicant(s) shall:

1) Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

2) Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security, including, but not limited to, 49 CFR Part 1546 or 1550, as
applicable.  To assure compliance with all applicable U.S. Government
requirements concerning security, the holder shall, before commencing
any new service (including charter flights) from a foreign airport that
would be the holder’s last point of departure for the United States,
contact its International Principal Security Inspector (IPSI) to advise
the IPSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served;

3) Comply with the requirements for minimum insurance coverage contained
in 14 CFR Part 205, and, prior to the commencement of any operations
under this authority, file evidence of such coverage, in the form of a
completed OST Form 6411, with the Federal Aviation Administration’s
Program Management Branch (AFS-260), Flight Standards Service (any
changes to, or termination of, insurance also shall be filed with that
office);

4) Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

5) Conform to the airworthiness and airman competency requirements of
its Government for international air services;

6) Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR Part 203,
concerning waiver of Warsaw Convention liability limits and defenses;

7) Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are: a) based on its
operations in international air transportation that, according to the
contract of carriage, include a point in the United States as a point of
origin, point of destination, or agreed stopping place, or for which the
contract of carriage was purchased in the United States; or b) based on
a claim under any international agreement or treaty cognizable in any
court or other tribunal of the United States.  In this condition, the
term “international air transportation” means “international
transportation” as defined by the Warsaw Convention, except that all
States shall be considered to be High Contracting Parties for the
purpose of this definition;

8) Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

9) Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department’s
rules governing charters (including 14 CFR Parts 212 and 380); and

11) Comply with such other reasonable terms, conditions, and limitations
required by the public interest as may be prescribed by the Department,
with all applicable orders or regulations of other U.S. agencies and
courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code.

 05/2004