[Federal Register Volume 78, Number 100 (Thursday, May 23, 2013)]
[Rules and Regulations]
[Pages 30747-30762]
[FR Doc No: 2013-12141]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-22-000; Order No. 779]

Reliability Standards for Geomagnetic Disturbances

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy
Regulatory Commission (Commission) directs the North American Electric
Reliability Corporation (NERC), the Commission-certified Electric
Reliability Organization, to submit to the Commission for approval
proposed Reliability Standards that address the impact of geomagnetic
disturbances (GMD) on the reliable operation of the Bulk-Power System.
The Commission directs NERC to implement the directive in two stages.
In the first stage, NERC must submit, within six months of the
effective date of this Final Rule, one or more Reliability Standards
that require owners and operators of the Bulk-Power System to develop
and implement operational procedures to mitigate the effects of GMDs
consistent with the reliable operation of the Bulk-Power System. In the
second stage, NERC must submit, within 18 months of the effective date
of this Final Rule, one or more Reliability Standards that require
owners and operators of the Bulk-Power System to conduct initial and
on-going assessments of the potential impact of benchmark GMD events on
Bulk-Power System equipment and the Bulk-Power System as a whole. The
Second Stage GMD Reliability Standards must identify benchmark GMD
events that specify what severity GMD events a responsible entity must
assess for potential impacts on the Bulk-Power System. If the
assessments identify potential impacts from benchmark GMD events, the
Reliability Standards should require owners and operators to develop
and implement a plan to protect against instability, uncontrolled
separation, or cascading failures of the Bulk-Power System, caused by
damage to critical or vulnerable Bulk-Power System equipment, or
otherwise, as a result of a benchmark GMD event. The development of
this plan cannot be limited to considering operational procedures or
enhanced training alone, but will, subject to the potential impacts of
the benchmark GMD events identified in the assessments, contain
strategies for protecting against the potential impact of GMDs based on
factors such as the age, condition, technical specifications, system
configuration, or location of specific equipment. These strategies
could, for example, include automatically blocking geomagnetically
induced currents from entering the Bulk-Power System, instituting
specification requirements for new equipment, inventory management,
isolating certain equipment that is not cost effective to retrofit, or
a combination thereof.

DATES: This rule will become effective July 22, 2013.

FOR FURTHER INFORMATION CONTACT:
Regis Binder (Technical Information), Office of Electric Reliability,
Division of Reliability Standards and Security, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
(301) 665-1601<EMAIL_ADDRESS>Matthew Vlissides (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

143 FERC ] 61,147

United States of America

Federal Energy Regulatory Commission

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

Final Rule

Issued May 16, 2013.
    1. Pursuant to section 215(d)(5) of the Federal Power Act (FPA),\1\
the Commission directs the North American Electric Reliability
Corporation (NERC), the Commission-certified Electric Reliability
Organization (ERO), to submit for approval Reliability Standards (GMD
Reliability Standards) that address the risks posed by geomagnetic
disturbances (GMD) to the reliable operation of the Bulk-Power System.
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    \1\ 16 U.S.C. 824o(d)(5) (2006).
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    2. The Commission directs NERC to implement the directive in two
stages. In the first stage, NERC must submit, within six months of the
effective date of this Final Rule, one or more Reliability Standards
that require owners and operators of the Bulk-Power System to develop
and implement operational procedures to mitigate the effects of GMDs
consistent with the reliable operation of the Bulk-Power System. In the
second stage, NERC must submit, within 18 months of the effective date
of this Final Rule, one or more Reliability Standards that require
owners and operators of the Bulk-Power System to conduct initial and
on-going assessments of the potential impact of benchmark GMD events on
Bulk-Power System equipment and the Bulk-Power System as a whole. The
Second Stage GMD Reliability Standards must identify ``benchmark GMD
events'' that specify what severity GMD events a responsible entity
must assess for potential impacts on the Bulk-Power System. The
benchmark GMD events must be technically justified because the
benchmark GMD events will define the scope of the Second Stage GMD
Reliability Standards (i.e., responsible entities should not be
required to assess GMD events more severe than the benchmark GMD
events). If the assessments identify potential impacts from benchmark
GMD events, the Reliability Standards should require owners and
operators to develop and implement a plan to protect against
instability, uncontrolled separation, or cascading failures of the
Bulk-Power System, caused by damage to critical or vulnerable Bulk-
Power System equipment, or otherwise, as a result of a benchmark GMD
event. The plan cannot be limited to considering operational procedures
or enhanced training alone. Rather, the plan must, subject to the
potential impacts of the benchmark GMD events identified in the
assessments, contain strategies for protecting against the potential
impact

of GMDs based on factors such as the age, condition, technical
specifications, system configuration, or location of specific
equipment. These strategies could, for example, include automatically
blocking geomagnetically induced currents (GICs) from entering the
Bulk-Power System, instituting specification requirements for new
equipment, inventory management, isolating certain equipment that is
not cost effective to retrofit, or a combination thereof. The
Reliability Standards should include Requirements whose goal is to
prevent instability, uncontrolled separation, or cascading failures of
the Bulk-Power System when confronted with a benchmark GMD event. Given
that the scientific understanding of GMDs is still evolving, we
recognize that Reliability Standards cannot be expected to protect
against all GMD-induced outages.
    3. We take this action based on the potentially severe, wide-spread
impact on the reliable operation of the Bulk-Power System that can be
caused by GMD events and the absence of existing Reliability Standards
to address GMD events. We are not directing the ERO to include any
specific Requirements in the GMD Reliability Standards nor are we pre-
judging what the ERO eventually submits for approval. Instead, in this
Final Rule, we identify issues that should be considered in the NERC
standards development process. We expect NERC to explain how the
proposed GMD Reliability Standards address these issues when the
Reliability Standards are submitted for Commission approval.

I. Background

A. Section 215 and Mandatory Reliability Standards

    4. Section 215 of the FPA requires the Commission to certify an ERO
to develop mandatory and enforceable Reliability Standards, subject to
Commission review and approval.\2\ Once approved, the Reliability
Standards may be enforced in the United States by the ERO, subject to
Commission oversight, or by the Commission independently.
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    \2\ 16 U.S.C. 824o (2006).
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    5. Pursuant to FPA section 215(d)(5), the Commission has the
authority, upon its own motion or upon complaint, to order the ERO to
submit to the Commission a proposed Reliability Standard or a
modification to a Reliability Standard that addresses a specific matter
if the Commission considers such a new or modified Reliability Standard
appropriate to carry out section 215 of the FPA.\3\
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    \3\ 16 U.S.C. 824o(d)(5); 18 CFR 39.5(f) (2012).
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B. Geomagnetic Disturbances

    6. A GMD, caused by solar events, results in distortions to the
earth's magnetic field, can be of varying intensity, and has in the
past impacted the operation of pipelines, communications systems, and
electric power systems.\4\ The interaction of the earth's magnetic
field and solar events can cause low frequency GICs to flow along the
surface of the earth and in the oceans. Reliability issues arise when
GICs enter the Bulk-Power System from the earth. Because many Bulk-
Power System transformers are grounded, the GIC appears as electrical
current to the Bulk-Power System and flows through the ground
connection and conductors, such as transformers and transmission
lines.\5\ GICs can cause ``half-cycle saturation'' of high-voltage
Bulk-Power System transformers, which can lead to increased consumption
of reactive power and creation of disruptive harmonics that can cause
the sudden collapse of the Bulk-Power System.\6\ Further, half-cycle
saturation from GICs can potentially damage Bulk-Power System
transformers because of overheating.\7\
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    \4\ Oak Ridge National Laboratory, Electric Utility Industry
Experience with Geomagnetic Disturbances at xiii (1991), available
at http://www.ornl.gov/~webworks/cpr/v823/rpt/51089.pdf.
    \5\ North American Electric Reliability Corp., 2012 Special
Reliability Assessment Interim Report: Effects of Geomagnetic
Disturbances on the Bulk Power System at ii (February 2012) (NERC
Interim GMD Report), available at http://www.nerc.com/files/2012GMD.pdf.
    \6\ Id. at iii-iv.
    \7\ Id.
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C. Studies of GMD Events on the Bulk-Power System

    7. The impact of GMDs on the Bulk-Power System has been evaluated
in several government-sponsored studies and NERC reports. The EMP
Commission issued reports assessing the threat to the United States
from Electromagnetic Pulse (EMP) attack in 2004 and 2008, which also
addressed the effects of geomagnetic storms on the electric power
infrastructure.\8\ The National Research Council of the National
Academies issued a report addressing the impact of severe space weather
events in 2008.\9\ The Oak Ridge National Laboratory issued a series of
reports on the effects of electromagnetic pulses on the Bulk-Power
System in January 2010.\10\ NERC issued the HILF Report on high-impact,
low-frequency risks to the Bulk-Power System in June 2010.\11\
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    \8\ These reports are accessible at the Commission to Assess the
Threat to the United States from Electromagnetic Pulse (EMP) Attack
Web site at http://www.empcommission.org/.
    \9\ National Research Council of the National Academies, Severe
Space Weather Events--Understanding Societal and Economic Impacts: A
Workshop Report at 4 (2008) (NAS Workshop Report), available at
http://www.nap.edu/catalog/12507.html.
    \10\ Oak Ridge National Laboratory, FERC EMP-GIC Metatech
Reports 319-324 (January 2010) (collectively, Oak Ridge Study),
available at http://www.ornl.gov/sci/ees/etsd/pes/ferc_emp_gic.shtml.
    \11\ The HILF Report was prepared by NERC, Department of Energy,
and a steering committee comprised of industry and risk experts and
was approved by the NERC Board of Trustees on May 17, 2010. North
American Electric Reliability Corp., High-Impact, Low-Frequency
Event Risk to the North American Bulk Power System, at 2 (June 2010)
(HILF Report), available at http://www.nerc.com/files/HILF.pdf.
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    8. In November 2010, NERC endorsed the creation of a GMD Task Force
to ``develop a technical white paper describing the evaluation of
scenarios of potential GMD impacts, identifying key bulk power system
parameters under those scenario conditions, and evaluating potential
reliability implications of these incidents.'' \12\ The NERC GMD Task
Force was formed in early 2011.\13\ In February 2012, the NERC GMD Task
Force issued the NERC Interim GMD Report evaluating the effects of GMDs
on the Bulk-Power System.
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    \12\ NERC, Board of Trustees Minutes, Exhibit J, at 1 (Nov. 4,
2010), available at http://www.nerc.com/docs/docs/bot/BOT-1110m-open-complete.pdf.
    \13\ NERC Comments at 2 n.4.
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    9. The Commission held a Technical Conference on April 30, 2012 to
discuss the risks posed by GMDs to the reliable operation of the Bulk-
Power System.\14\ Several panelists indicated at the Technical
Conference that severe GMD events could potentially compromise the
reliable operation of the Bulk-Power System, with some noting as an
example the GMD-induced disruption of the Hydro-Qu[eacute]bec grid in
1989.\15\ Some

commenters, however, expressed concern with developing Reliability
Standards to address GMD events at this time.\16\
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    \14\ Written statements presented at the Technical Conference,
post-Technical Conference comments, and Technical Conference
transcript are accessible through the Commission's eLibrary document
retrieval system in Docket No. AD12-13-000.
    \15\ NOPR, 141 FERC ] 61,045 at P 3 (citing Statement of Scott
Pugh, U.S. Department of Homeland Security at 2 (citing 1989 Hydro-
Qu[eacute]bec blackout); Statement of Frank Koza, PJM
Interconnection, L.L.C. at 1 (``The combination of half-cycle
transformer saturation and increased reactive power consumption can
lead to voltage collapse and blackouts if not properly managed.'');
Statement of John Kappenman at 8 (``The bulk power system is the
nation's most important critical infrastructure and unlike other
threats, a severe geomagnetic storms [sic] can impose a near
simultaneous nationwide crippling threat to this vital
infrastructure.''); Statement of Gerry Cauley, NERC at 1 (``Previous
examples, such as the 1989 event in Hydro Qu[eacute]bec demonstrate
that severe solar storms represent a serious risk that can challenge
the reliability of the bulk power system.'')).
    \16\ See, e.g., Statement of Steven Naumann, EEI at 5 (``Until
[system-wide] studies are completed, it is premature to determine
whether NERC should advance development of mandatory requirements to
address GMD related-issues.'').
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D. Notice of Proposed Rulemaking

    10. On October 18, 2012, the Commission issued a Notice of Proposed
Rulemaking (NOPR) pursuant to FPA section 215(d) proposing to direct
that NERC submit to the Commission for approval proposed Reliability
Standards that address the risks posed by GMDs to the reliable
operation of the Bulk-Power System.\17\ The NOPR stated that the
proposal was based on government-sponsored studies and NERC studies
indicating that GMD events can have an adverse, wide-area impact on the
reliable operation of the Bulk-Power System.\18\ The NOPR stated that
GMD vulnerabilities are not adequately addressed in the Reliability
Standards and that this constitutes a reliability gap because GMD
events can cause the Bulk-Power System to collapse suddenly and can
potentially damage equipment on the Bulk-Power System.
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    \17\ Reliability Standards for Geomagnetic Disturbances, Notice
of Proposed Rulemaking, 77 FR 64,935 (Oct. 24, 2012), 141 FERC ]
61,045 (2012) (NOPR).
    \18\ NOPR, 141 FERC ] 61,045 at P 2 (citing NERC Interim GMD
Report at 85; HILF Report at 68; Oak Ridge Study).
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    11. The NOPR proposed to direct NERC to develop GMD Reliability
Standards in two stages. Regarding the first stage, NERC would submit
one or more proposed Reliability Standards that require owners and
operators of the Bulk-Power System to develop and implement operational
procedures to mitigate the effects of GMDs consistent with the reliable
operation of the Bulk-Power System. The NOPR proposed that NERC would
submit these First Stage GMD Reliability Standards within 90 days of
the effective date of a final rule in this proceeding. The NOPR, while
not proposing to direct a specific implementation plan, encouraged a
90-day implementation period following Commission approval of the First
Stage GMD Reliability Standards.
    12. The NOPR proposed to accept aspects of the ``Initial Actions''
plan set forth in NERC's May 21, 2012 post-Technical Conference
comments, in which NERC stated that it would ``identify facilities most
at-risk from severe geomagnetic disturbance'' and ``conduct wide-area
geomagnetic disturbance vulnerability assessment.'' \19\ In the NOPR,
the Commission stated that it agreed with NERC that critical Bulk-Power
System facilities should be evaluated for GMD vulnerability and, as
part of the ``Initial Actions,'' special attention should be given to
Bulk-Power System facilities that provide service to critical and
priority loads. The NOPR proposed that NERC would conduct these
``Initial Actions'' simultaneously with the development of the First
Stage GMD Reliability Standards.
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    \19\ NERC May 21, 2012 Comments at 8-9.
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    13. Regarding the second stage, the NOPR proposed that, within six
months of the effective date of a final rule in this proceeding, NERC
would file one or more proposed Reliability Standards that require
owners and operators of the Bulk-Power System to conduct initial and
on-going assessments of the potential impact of GMDs on Bulk-Power
System equipment and the Bulk-Power System as a whole. The NOPR stated
that, based on those assessments, the Reliability Standards would
require owners and operators to develop and implement a plan so that
instability, uncontrolled separation, or cascading failures of the
Bulk-Power System, caused by damage to critical or vulnerable Bulk-
Power System equipment, or otherwise, will not occur as a result of a
GMD. The NOPR stated that the plan could not be limited to operational
procedures or enhanced training alone, but should, subject to the needs
identified in the assessments, contain strategies for protecting
against the potential impact of GMDs based on factors such as the age,
condition, technical specifications, or location of specific equipment.
The NOPR further stated that these strategies could include
automatically blocking GICs from entering the Bulk-Power System,
instituting specification requirements for new equipment, inventory
management, and isolating certain equipment that is not cost effective
to retrofit. Without proposing a specific implementation period, the
NOPR stated that the Second Stage GMD Reliability Standards would
likely need to be implemented in phases, focusing first on the most
critical Bulk-Power System assets.
    14. In response to the NOPR, interested entities filed 62 comments.
We address below the issues raised in the comments.\20\ The Appendix to
this Final Rule lists the entities that filed comments to the NOPR.\21\
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    \20\ Some comments raised issues not addressed in the NOPR,
including cost recovery for compliance with the GMD Reliability
Standards; the risks posed to the Bulk-Power System by
electromagnetic pulses; the organization and conduct of the NERC GMD
Task Force; terrorism; and cybersecurity. Issues outside the scope
of the NOPR are not addressed in this Final Rule. However, nothing
precludes entities from seeking cost recovery if needed.
    \21\ A document submitted by the Nuclear Regulatory Commission
(NRC) was erroneously included in the Commission's eLibrary system
in this rulemaking docket and was subsequently removed. The NRC
document did not influence the determinations in this Final Rule.
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II. Discussion

    15. As discussed below, the Commission finds that the existing
Reliability Standards do not adequately address the risks posed by GMDs
to the reliable operation of the Bulk-Power System. In its NOPR
comments, NERC states that ``[a]s a high-impact, low-frequency event,
GMDs pose a unique threat to Bulk-Power System reliability, and NERC is
committed to working with stakeholders and the Commission to address
these challenges consistent with its responsibilities as the ERO.''
\22\ Accordingly, pursuant to section 215(d)(5) of the FPA, the
Commission directs the ERO to develop and submit for approval
Reliability Standards that address the potentially severe, wide-spread
impact of GMD events on the reliable operation of the Bulk-Power
System.\23\
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    \22\ NERC Comments at 3.
    \23\ We do not necessarily require NERC to develop and submit
entirely new Reliability Standards. NERC could develop and submit
revisions to existing Reliability Standards. In addition, as stated
in the NOPR, facilities and equipment falling outside of our
jurisdiction would not be subject to the proposed GMD Reliability
Standards. NOPR, 141 FERC ] 61,045 at P 27 n.49.
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    16. We issue this directive recognizing, as we did in the NOPR,
that there is an ongoing debate as to the likely effect of GMDs on the
reliable operation of the Bulk-Power System. As discussed below, the
NOPR comments reflect these differing views, with some comments
supporting the NERC Interim GMD Report's conclusion that the worst-case
GMD scenario is ``voltage instability and subsequent voltage
collapse,'' \24\ while other comments endorse the Oak Ridge Study's
conclusion that a severe GMD event could put Bulk-Power System
transformers at risk for failure or permanent damage.\25\ As we stated
in the NOPR, and affirm here, ``[w]hile the conclusions of these
reports differ significantly, our proposed action is warranted by even
the lesser

consequence of a projected widespread blackout without long-term,
significant damage to the Bulk-Power System. Taking steps to prevent
such blackouts is consistent with maintaining the reliable operation of
the Bulk-Power System.'' \26\
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    \24\ NERC Interim GMD Report at 69.
    \25\ Oak Ridge National Laboratory, Electromagnetic Pulse:
Effects on the U.S. Power Grid: Meta-R-319 at page 1-14, Tables 4-1,
4-2, 4-3 (discussing at-risk transformers) (January 2010) (Oak Ridge
Study 319 Report), available at http://www.ornl.gov/sci/ees/etsd/pes/pubs/ferc_Meta-R-319.pdf.
    \26\ NOPR, 141 FERC ] 61,045 at P 5 (citing 16 U.S.C.
824o(a)(4)).
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    17. In directing the ERO to submit Reliability Standards that
address the potential impact of GMD events on the reliable operation of
the Bulk-Power System, we are not directing NERC to include specific
Requirements or otherwise pre-judging what the ERO eventually proposes.
In addition, we are not directing the ERO to develop GMD Reliability
Standards that are ``one-size-fits-all,'' a concern expressed in the
comments.\27\ Instead, in this final rule we identify issues that
should be considered in the NERC standards development process. We
expect NERC to develop GMD Reliability Standards that address these
issues and, when these Reliability Standards are submitted to the
Commission for approval, to explain in the accompanying petition how
the issues are addressed in the proposed GMD Reliability Standards.\28\
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    \27\ See, e.g., NERC Comments at 4; EIS Comments at 3;
Bonneville Comments at 3; NV Energy Comments at 4. Rather than adopt
a ``one-size-fits-all'' approach, the NOPR stated that the Oak Ridge
Study identified several variables that determine the severity of
GMD events, including: (1) Location and strength of the underlying
solar event; (2) ground conductivity in the affected locations
(i.e., the geology of the location); (3) orientation of the
transmission lines; (4) length of transmission lines; and (5) grid
construction. NOPR at P 14 (citing Oak Ridge Study 319 Report at
page 2-5).
    \28\ In its comments, NERC encourages the Commission to permit
Commission staff to actively participate in the NERC standards
development process. NERC Comments at 8. Consistent with the
Commission's current practice, Commission staff will participate as
an observer in the development of the GMD Reliability Standards.
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    18. Because of concerns raised in the comments regarding the
proposed schedule for developing and submitting the GMD Reliability
Standards, we adjust the schedule in the NOPR to allow more time.
Accordingly, we set a six-month deadline from the effective date of
this Final Rule for NERC to submit the First Stage GMD Reliability
Standards and suggest a six-month implementation period for the First
Stage GMD Reliability Standards following Commission approval. We set
an 18-month deadline from the effective date of this Final Rule for
NERC to submit the Second Stage GMD Reliability Standards, and direct
NERC to propose an implementation period.
    19. Below we address the comments regarding: (1) The Commission's
authority to direct the ERO to develop and submit GMD Reliability
Standards under FPA section 215(d)(5); (2) the content of the First
Stage GMD Reliability Standards and the schedule for submitting and
implementing the Reliability Standards; (3) the ``Initial Actions'' GMD
vulnerability assessments; and (4) the content of the Second Stage GMD
Reliability Standards and the schedule for submitting and implementing
those Reliability Standards.

A. Commission Authority To Direct the ERO To Develop GMD Reliability
Standards Under FPA Section 215(d)(5) NOPR

    20. The NOPR stated that GMD vulnerabilities are not adequately
addressed in the existing Reliability Standards.\29\ The NOPR stated
that this constitutes a reliability gap because GMD events can cause
the Bulk-Power System to collapse suddenly and can potentially damage
the Bulk-Power System.\30\ In order to carry out section 215 of the
FPA, the NOPR proposed to direct NERC to develop and submit for
approval Reliability Standards that address the potentially severe,
wide-spread impact of GMD events on the reliable operation of the Bulk-
Power System.
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    \29\ NOPR, 141 FERC ] 61,045 at P 4 (citing NERC Reliability
Standard IRO-005-3a (Reliability Coordination--Current Day
Operations), Requirement R3, as the only existing Requirement that
discusses GMDs).
    \30\ NOPR, 141 FERC ] 61,045 at PP 4-5.
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Comments
    21. NERC states that it ``supports the Commission's exercise of its
authority pursuant to Section 215(d)(5) in the NOPR and the due weight
given to NERC's technical expertise with respect to the content of the
proposed Reliability Standards. The NOPR explicitly does not propose to
require NERC or owners or operators of the Bulk-Power System to adopt
any particular operational procedures or a particular solution in the
second stage Reliability Standards to address GMDs. NERC submits that
this approach is consistent with Section 215(d)(2) of the Federal Power
Act.'' \31\
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    \31\ NERC Comments at 7.
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    22. ELCON states that the NOPR does not establish why the GMD
Reliability Standards are ``appropriate to carry out [section 215],''
as required under FPA section 215(d)(5).\32\ ELCON states that the
``NOPR does not give sufficient recognition to the key unresolved
technical issues, including the lack of consensus about the nature and
potential impacts of GMD events and the absence of tools for modeling
or addressing the effects of geomagnetic induced currents.'' \33\
Accordingly, ELCON states that ``a final rule would not be supportable
as an exercise of the Commission's authority under Section 215(d)(5).''
\34\ The Trade Associations state that ``[w]hile FERC has authority
under Section 215(d)(5) to direct the ERO to develop a mandatory
standard on a specific matter, the specific matter that is the subject
of this NOPR, GIC levels caused by strong GMD events, does not have a
strong scientific or technical consensus upon which to develop
standards.'' \35\ NARUC states that the NOPR ``does not provide
sufficient cost benefit or technical evidence to justify a directive to
NERC to set GMD Reliability Standards at this time.'' \36\ Other
commenters, without explicitly addressing the Commission's authority to
direct the ERO to develop GMD Reliability Standards, state that there
is an insufficient technical basis for the NERC standards development
process.\37\
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    \32\ 16 U.S.C. 824o(d)(5) (``The Commission, upon its own motion
or complaint may order the Electric Reliability Organization to
submit to the Commission a proposed reliability standard or a
modification to a reliability standard that addresses a specific
matter if the Commission considers such a new or modified
reliability standard appropriate to carry out this section.'').
    \33\ ELCON Comments at 4-5.
    \34\ Id. at 5.
    \35\ Trade Associations Comments at 25.
    \36\ NARUC Comments at 3.
    \37\ See, e.g., Duke Comments at 2-4; CenterPoint Comments at 3.
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Commission Determination
    23. The Commission finds that the directives in this Final Rule are
a valid exercise of the Commission's authority under FPA section
215(d)(5). The plain language of the statute authorizes the Commission
to order the development of a Reliability Standard that ``addresses a
specific matter if the Commission considers such a new or modified
reliability standard appropriate to carry out this section.'' \38\
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    \38\ 16 U.S.C. 824o(d)(5).
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    24. We determine that addressing the specific matter of GMDs and
their impact on the reliable operation of the Bulk-Power System is
appropriate to carry out FPA section 215. As the NOPR stated, while
there is an ongoing debate as to how a severe GMD event will most
likely impact the Bulk-Power System, there is a general consensus that
GMD events can cause wide-spread blackouts due to voltage instability
and subsequent voltage collapse, thus disrupting the reliable operation
of the Bulk-Power System.\39\
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    \39\ See, e.g., Trade Associations Comments at 51 (``The 1989
Hydro Quebec Blackout, is often used in the ORNL/Metatech Report to
assert that wide spread collapse and permanent equipment damage is a
likely outcome of a severe GMD event. Although the Trade
Associations agree that both are potential risks of a severe GMD
event, the Trade Association find the conclusions of the GMD Task
Force, which states that `the most likely worst-case system impacts
from a severe GMD event and corresponding GIC flow is voltage
instability caused by a significant loss of reactive power support,'
to be more credible and based on the scientific facts.''); PJM
Comments at 3 (``[T]here is no question that severe space weather
has the potential to create serious problems for the Bulk-Power
System.''); ITC Comments at 2 (``ITC believes that the risk to the
bulk power system from GMD is a significant concern that should be
addressed.'').

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    25. FPA section 215 defines ``reliability standard'' as a
``requirement . . . to provide for reliable operation of the bulk-power
system.'' \40\ FPA section 215 defines ``reliable operation'' to mean
``operating the elements of the bulk-power system within equipment and
electric system thermal, voltage, and stability limits so that
instability, uncontrolled separation, or cascading failures of such
system will not occur as a result of a sudden disturbance, including a
cybersecurity incident, or unanticipated failure of system elements.''
\41\ Because there is a general consensus that GMD events can cause
``voltage instability and subsequent voltage collapse,'' thus affecting
the reliable operation of the Bulk-Power System, the Commission finds
that GMDs are valid subject matter for Reliability Standards
development. In addition, as the Trade Associations' comments
acknowledge, the Reliability Standards currently do not expressly
require responsible entities to mitigate the risks posed by GMDs to the
Bulk-Power System.\42\ Therefore, we believe that it is appropriate to
direct NERC to submit new or modified Reliability Standards that
address GMDs pursuant to FPA section 215(d)(5).
---------------------------------------------------------------------------

    \40\ 16 U.S.C. 824o(a)(3).
    \41\ Id. at 824o(a)(4).
    \42\ Trade Associations Comments at 25 (``[T]he Trade
Associations acknowledge that NERC Reliability Standards do not
expressly require steps for mitigating the effects of GMD
events.'').
---------------------------------------------------------------------------

    26. We reject the assertion that a lack of technical or scientific
consensus regarding some issues associated with GMDs deprives the
Commission of the statutory authority to order the development of
revised or new Reliability Standards. While the Commission must have a
reasonable basis for its actions, section 215(d)(5) does not require
the Commission to certify the existence of a consensus before it can
require the ERO to develop a Reliability Standard. Instead, the statute
specifically vests the Commission with the discretion to determine when
a new Reliability Standard is necessary.\43\ In any event, the lack of
consensus in this case pertains to the most likely impact of a severe
GMD event and the appropriate measures to take in mitigation. There is
general agreement that GMD events can cause wide-spread blackouts due
to voltage instability and subsequent voltage collapse, thus disrupting
the reliable operation of the Bulk-Power System.\44\ In fact, such
blackouts have occurred.\45\ Requiring Reliability Standards to protect
against these risks is well within the Commission's authority.
Moreover, the NERC standards development process will be the vehicle
for working through the technical complexities associated with
addressing the risks of GMD events on the Bulk-Power System.\46\ This
is consistent with the NERC Standards Process Manual, which states that
the NERC standards development process is designed to ``build and
document consensus for each Reliability Standard, both with regard to
the need and justification for the Reliability Standard and the content
of the Reliability Standard.'' \47\
---------------------------------------------------------------------------

    \43\ 16 U.S.C. 824o(d)(5); see also Transmission Relay
Loadability Reliability Standard, 134 FERC ] 61,127, at P 25 (2011)
(explaining that under section 215(d)(5) ``the Commission, and not
just the ERO, has the responsibility and authority to identify
`specific matters' that it considers appropriate to carry out
section 215. Section 215 establishes a paradigm by which both the
Commission and the ERO are responsible for identifying reliability
gaps--the ERO through its Reliability Standards development process,
where it can independently identify areas of concern and develop
Standards to address them; and the Commission through its review of
proposed Reliability Standards and authority to direct modifications
or new Standards that address specific issues necessary to
effectuate the purposes of section 215.'').
    \44\ See supra n.39.
    \45\ See NERC Interim GMD Report at i (citing 1989 Hydro-
Qu[eacute]bec blackout).
    \46\ The NERC GMD Task Force has already developed operational
procedure templates for certain functional entities. See NERC GMD
Task Force Geomagnetic Disturbance Operating Procedure Template:
Transmission Operator, available at http://www.nerc.com/docs/pc/gmdtf/Template_TOP.pdf; NERC GMD Task Force Geomagnetic Disturbance
Operating Procedure Template: Generator Operator, available at
http://www.nerc.com/docs/pc/gmdtf/Template_GOP.pdf. We expect that
the NERC standards development process will consider the NERC GMD
Task Force's work as a resource.
    \47\ NERC Rules of Procedure, Appendix 3A (Standards Process
Manual) (Effective January 31, 2012) at 4.
---------------------------------------------------------------------------

    27. Some comments contend that the NOPR proposed to direct NERC to
develop GMD Reliability Standards containing overly prescriptive
Requirements in too short an amount of time.\48\ Moreover, those
comments state that the NOPR relied on underlying studies that, the
comments assert, are flawed or unreliable.\49\ However, as NERC
recognizes in its NOPR comments, the NOPR explicitly stated that it was
not directing the ERO to include any specific Requirements or otherwise
pre-judging what the ERO eventually submits for approval.\50\ In this
Final Rule, we direct the ERO to consider issues in the NERC standards
development process, but we do not direct the content of the
Reliability Standards or pre-judge what NERC ultimately proposes. As
for the timing of the submission and implementation of the GMD
Reliability Standards, we address that concern by modifying the
schedule in the NOPR to give NERC more time to develop and submit the
Reliability Standards. With respect to the commenters' criticism of the
studies cited in the NOPR, we recognize the divergent views.\51\
However, as stated above, our directive to develop GMD Reliability
Standards is justified even under the conclusion in the NERC GMD
Interim Report, with which the Trade Associations ``strongly agree,''
that a GMD event could result in ``voltage instability and subsequent
voltage collapse.'' \52\
---------------------------------------------------------------------------

    \48\ See, e.g., ELCON Comments at 7-14; CenterPoint Comments at
2.
    \49\ See, e.g., Trade Associations Comments at 19.
    \50\ NOPR, 141 FERC ] 61,045 at P 17.
    \51\ While some commenters criticize the Oak Ridge Study's
conclusions regarding the possible damaging effects of GMDs to Bulk-
Power System components, the NOPR stated that the NERC-approved HILF
Report also found that ``[t]ransformers experience excessive levels
of internal heating brought on by stray flux when GICs cause the
transformer's magnetic core to saturate, forcing magnetic flux to
flow outside the normal core steel magnetic circuit. Previous well
documented cases have noted heating failures that caused melting and
burn-through of large-amperage copper windings and leads in these
transformers (Figure 9).'' NOPR, 141 FERC ] 61,045 at 13 n.33
(citing HILF Report at 70).
    \52\ NERC Interim GMD Report at 69; Trade Associations Comments
at 17-18.
---------------------------------------------------------------------------

    28. Finally, while we disagree that FPA section 215(d)(5) (the
specific subsection we rely on in this proceeding) requires a
particular cost-benefit showing in order to direct the development of
revised or new Reliability Standards, the Commission is cognizant of
the potential costs of GMD Reliability Standards. As we explain and
clarify in this final rule, the Commission is not directing the content
of the GMD Reliability Standards that must be submitted, and with
respect to the Second Stage GMD Reliability Standards, is not mandating
the use of any particular technologies (such as automatic blocking) to
address the potential impact of benchmark GMD events. We expect that
NERC and industry will consider the costs and benefits of particular
mitigation measures as NERC develops the

technically-justified Second Stage GMD Reliability Standards.

B. First Stage GMD Reliability Standards

    29. As discussed below, the Commission directs that, within six
months of the effective date of this Final Rule, NERC submit for
approval one or more Reliability Standards that require owners and
operators of the Bulk-Power System to develop and implement operational
procedures to mitigate the effects of GMDs consistent with the reliable
operation of the Bulk-Power System. We address below the comments
regarding the content of the First Stage GMD Reliability Standards and
the schedule for submitting and implementing the First Stage GMD
Reliability Standards.
1. Content of First Stage GMD Reliability Standards NOPR
    30. The NOPR proposed to direct NERC to submit one or more
Reliability Standards requiring owners and operators of the Bulk-Power
System to develop and implement operational procedures to mitigate the
effects of GMDs consistent with the reliable operation of the Bulk-
Power System. The NOPR stated that the proposed Reliability Standards
should not necessarily specify what operational procedures must be
adopted, but the ERO should give owners and operators of the Bulk-Power
System guidance as to what procedures have been or are expected to be
effective in mitigating the effects of GMDs consistent with the
reliable operation of the Bulk-Power System. The NOPR also stated that
the proposed Reliability Standards should address the coordination of
operational procedures among responsible entities across regions. The
NOPR further stated that, because there is potential for equipment
damage resulting from a GMD event, the proposed Reliability Standards
should also address operational procedures for restoring GMD-impacted
portions of the Bulk-Power System that take into account the potential
for equipment that is damaged or out-of-service for an extended period
of time. The NOPR also proposed that, following implementation, NERC
would provide periodic reports assessing the effectiveness of
operational procedures in mitigating the effects of GMD events and
periodically review the required operational procedures and recommend
to owners and operators that they incorporate lessons-learned and new
research findings.
Comments
    31. NERC and several commenters generally support the development
of Reliability Standards requiring owners and operators to develop and
implement operational procedures to address GMDs.\53\ Some commenters
state that certain entities have already implemented operational
procedures to address GMDs, and some commenters stress the importance
of combining operational procedures with monitoring and situational
awareness.\54\ Other commenters express concern with relying on
operational procedures alone to address GMDs.\55\
---------------------------------------------------------------------------

    \53\ See, e.g., NERC Comments at 9; Joint ISOs/RTOs Comments at
4; PJM Comments at 3; APS Comments at 3; Exelon Comments at 4;
Bonneville Comments at 3; ITC Comments at 6; PPL Companies Comments
at 2; Pa PUC Comments at 3; SCE Comments at 3-4; and IESO Comments
at 6.
    \54\ See, e.g., IESO Comments at 6; Exelon Comments 4-5.
    \55\ See, e.g., Comments of Congressman Franks at 1-2; IESO
Comments at 8-9; and EIS Comments at 5.
---------------------------------------------------------------------------

    32. NERC states that it supports the development of operational
procedures because ``[t]raining and education programs on the nature of
the threat [of GMDs] will allow Bulk-Power System Operators to more
rapidly identify areas for improvement and take actions when
necessary.'' \56\ NERC states, however, that its ability to assess and
report on the effectiveness of operational procedures is constrained
because of the limitations with monitoring and forecasting GMD events.
NERC states that, if the Commission requires NERC to submit periodic
reports, as proposed in the NOPR, the reports should be submitted no
more frequently than annually and, in part to conserve ERO resources,
that the reporting obligation should expire upon implementation of the
Second Stage GMD Reliability Standards. NERC also states that the
emergence of new forecasting capabilities is vital to improving early
warning and understanding of potential GMD effects and will directly
impact the development of operational procedures. NERC states that
relying on the ``K-Index,'' \57\ which NERC describes as the most
familiar means of characterizing the severity of geomagnetic storms, is
problematic because of the associated ``uncertainties and
inaccuracies.'' NERC states that the K-Index ``cannot be used as an
automatic triggering event for specific required actions because
operational procedures need flexibility to account for actual operating
conditions and the ability to adjust accordingly.'' \58\
---------------------------------------------------------------------------

    \56\ NERC Comments at 9.
    \57\ ``K index'' is defined as ``a 3-hourly quasi-logarithmic
local index of geomagnetic activity relative to an assumed quiet-day
curve for the recording site. Range is from 0 (quiet) to 9 (severely
disturbed).'' Space Weather Prediction Center, Glossary of Solar-
Terrestrial Terms, available at http://www.swpc.noaa.gov/info/glossary.html#k.
    \58\ NERC Comments at 11.
---------------------------------------------------------------------------

    33. Commenters that oppose Reliability Standards requiring the
development and implementation of operational procedures state that
Reliability Standards are premature because the science of GMDs is not
fully understood and more study is needed before Reliability Standards
can be developed.\59\ Accordingly, commenters state that the NERC GMD
Task Force should be allowed to finish its work, which includes
evaluating the need for GMD Reliability Standards, before the
Commission directs NERC to develop Reliability Standards. Commenters
also state that requiring operational procedures prematurely (e.g.,
before responsible entities have conducted GMD vulnerability
assessments) may harm reliability because operational procedures can
have unintended consequences that adversely affect the Bulk-Power
System.\60\
---------------------------------------------------------------------------

    \59\ See, e.g., Trade Associations Comments at 4-5; NARUC
Comments at 5-6; ELCON Comments at 2; SPP Parties Comments at 3;
CenterPoint Comments at 5; Dominion Comments at 4; Duke Comments at
2-3; and KCP&L Comments at 2.
    \60\ CenterPoint Comments at 7.
---------------------------------------------------------------------------

    34. Some commenters opposed to requiring operational procedures
state that they could support the use of operational procedures under
certain conditions. The Trade Associations state that they could
support requiring operational procedures if the Commission determines
that they are necessary.\61\ Dominion states that it could support, as
an interim step, having NERC gather current industry practices
regarding GMD operational procedures and issue a best practices
operating guideline within 90 days.\62\ SPP Parties state that the
Commission should encourage NERC to issue, before the next solar peak
in June 2013, a ``reliability guideline'' to assist owners and
operators of Bulk-Power System facilities to address GMD threats to the
Bulk-Power System.\63\
---------------------------------------------------------------------------

    \61\ Trade Associations Comments at 5-6 (``If the Commission
finds it must direct NERC to develop a standard or standards to
address the impact of GMDs on the [Bulk-Power System], the Trade
Associations support the Commission's stage one proposal to require
NERC to file one or more standards which would require grid owners
and operators to develop and implement operations procedures that
would mitigate GMD effects.'').
    \62\ Dominion Comments at 4.
    \63\ SPP Parties Comments at 4. As discussed below, the NERC GMD
Task Force provided guidance to registered entities in the NERC
Interim GMD Report by identifying possible operational procedures in
response to GMD events. NERC Interim GMD Report at 80-81. In
addition, NERC issued an Industry Advisory Alert on May 10, 2011
entitled ``Preparing for Geo-Magnetic Disturbances.'' NERC, Industry
Advisory: Preparing for Geo-Magnetic Disturbance (May 10, 2011),
available at http://www.nerc.com/fileUploads/File/Events%20Analysis/A-2011-05-10-01_GMD_FINAL.pdf.

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

    35. Commenters generally agree that operational procedures, if
required, should be developed by responsible entities and not by NERC,
although some commenters state that NERC could develop best practices
to assist responsible entities.\64\ Commenters state that the
Reliability Standards should not have Requirements that treat
responsible entities the same (``one-size-fits-all'') because
responsible entities, due to geography, geology or other variables, may
be more or less likely to experience the effects of GMDs. Commenters
state that the operational procedures should be developed by
responsible entities based on factors such as the entity's geographic
location and the structural make-up of the entity's Bulk-Power System
components. Commenters also state that operational procedures should
not have the unintended effect of adversely impacting the Bulk-Power
System. Commenters further state that the Reliability Standards should
be clear as to which functional entities are responsible for compliance
and that the assignment of responsibilities should be consistent with
NERC's functional model.
---------------------------------------------------------------------------

    \64\ NERC Comments at 6; AEP Comments at 4-5; ELCON Comments at
13; SPP Parties Comments at 5; IESO Comments at 11; Consumers
Comments at 4; and Duke Comments at 5.
---------------------------------------------------------------------------

Commission Determination
    36. The Commission directs NERC to submit, within six months of the
effective date of this Final Rule, one or more Reliability Standards
requiring owners and operators of the Bulk-Power System to develop and
implement operational procedures to mitigate the effects of GMDs
consistent with the reliable operation of the Bulk-Power System. As we
stated in the NOPR, ``operational procedures, while not a complete
solution, constitute[] an important first step to addressing the GMD
reliability gap because they can be implemented relatively quickly.''
\65\ Operational procedures may help alleviate abnormal system
conditions due to transformer absorption of reactive power during GMD
events, helping to stabilize system voltage swings, and may potentially
isolate some equipment from being damaged or misoperated.
---------------------------------------------------------------------------

    \65\ NOPR, 141 FERC ] 61,045 at P 18 n.38 (citing NERC Interim
GMD Report at 79 (``Operating procedures are the quickest way to put
in place actions that can mitigate the adverse effects of GIC on
system reliability . . . Both system operating and transmission
owner organizations need to have appropriate procedures and training
in place.'')).
---------------------------------------------------------------------------

    37. It is not premature for NERC to begin developing Reliability
Standards requiring owners and operators of the Bulk-Power System to
develop and implement operational procedures. The comments reflect that
some entities have implemented operational procedures to mitigate the
impacts of GMDs.\66\ In addition, the NERC Interim GMD Report
identifies examples of operational procedures to mitigate GMD events
including: reduction of equipment loading (e.g., by starting off-line
generation), unloading the reactive load of operating generation,
reductions of system voltage, and system and/or equipment isolation
through reconfiguration of the transmission system.\67\ In addition,
the NERC GMD Task Force has developed operational procedure templates
for certain functional entities. Given the work of the NERC GMD Task
Force and recognizing that some operational procedures are already in
place, we conclude that it is not premature for NERC to develop
Reliability Standards that require operational procedures.
---------------------------------------------------------------------------

    \66\ See, e.g., IESO Comments at 5; Exelon Comments at 5; CEA
Comments at 6-7; Dominion Comments at 5; Trade Associations Comments
at 26.
    \67\ NERC Interim GMD Report at 80-81.
---------------------------------------------------------------------------

    38. The Commission is not directing NERC to develop Reliability
Standards that include specific operational procedures. Instead, as
proposed in the NOPR, the Reliability Standards should include a
mechanism that requires responsible entities to develop and implement
operational procedures because owners and operators of the Bulk-Power
System are most familiar with their own equipment and system
configurations. In addition, we do not expect that owners and operators
of the Bulk-Power System will necessarily develop and implement the
same operational procedures. Instead, the Reliability Standards, rather
than include ``one-size-fits-all'' Requirements, should allow
responsible entities to tailor their operational procedures based on
the responsible entity's assessment of entity-specific factors, such as
geography, geology, and system topology, identified in the Reliability
Standards. In addition, as we stated in the NOPR, the coordination of
operational procedures across regions is an important issue that should
be considered in the NERC standards development process.\68\ The
coordination of operational procedures across regions and data sharing
might be overseen by planning coordinators or another functional entity
with a wide-area perspective.\69\ The NERC standards development
process, as stated in the NOPR, should also consider operational
procedures for restoring GMD-impacted portions of the Bulk-Power System
that take into account the potential for damaged equipment that could
be de-rated or out-of-service for an extended period of time.
---------------------------------------------------------------------------

    \68\ NOPR, 141 FERC ] 61,045 at 20 (citing NERC Interim GMD
Report at 79 (``The [operating] procedures of these organizations
need to be coordinated with each other and with their neighboring
organizations.'')).
    \69\ In NERC's May 21, 2012 post-Technical Conference comments,
NERC stated that planning coordinators will conduct the wide-area
analyses as part of the ``Initial Actions'' assessments, discussed
below. NERC May 21, 2012 Comments at 9. LADWP proposes that
reliability coordinators coordinate these efforts. LADWP Comments at
5.
---------------------------------------------------------------------------

    39. While responsible entities will develop and implement
operational procedures, NERC can support their efforts, for example, by
identifying and sharing operational procedures found to be the most
effective. NERC should also periodically survey the responsible
entities' operational procedures, offer recommendations based on
lessons-learned and new research findings, and re-evaluate whether
modification to the Reliability Standards is warranted. Based on these
surveys, NERC should produce periodic reports assessing the
effectiveness of operational procedures. We take no position in this
Final Rule on the content, frequency, or duration of such surveys,
recommendations, or reports because we believe that those issues, in
the first instance, should be addressed as part of the NERC standards
development process.
    40. We take no position in this Final Rule with respect to NERC's
concerns regarding overreliance on the K-Index to trigger operational
procedures. Technical issues regarding the development and
implementation of operational procedures should be, in the first
instance, considered in the NERC standards development process.
Likewise, we take no position in this Final Rule on which functional
entities should be responsible under the Reliability Standards because
we believe that those issues, in the first instance, should be
addressed as part of the NERC standards development process.
2. Schedule for Submitting and Implementing First Stage GMD Reliability
Standards
NOPR
    41. The NOPR proposed that NERC submit the First Stage GMD
Reliability Standards to the Commission for

approval within 90 days of the effective date of a final rule in this
proceeding. The NOPR also proposed a suggested 90-day implementation
period following Commission approval of the First Stage GMD Reliability
Standards.
Comments
    42. NERC states that ``[w]hile the implementation plan proposed for
the completion of the first stage Reliability Standards is aggressive,
NERC is committed to meeting whatever implementation targets are
established by the Commission.'' \70\ Other commenters support adoption
of the proposed 90-day filing deadline for the First Stage GMD
Reliability Standards.\71\
---------------------------------------------------------------------------

    \70\ NERC Comments at 9.
    \71\ See, e.g., SENS Comments at 4; Foundation Comments at 19.
---------------------------------------------------------------------------

    43. Other commenters state that the proposed 90-day deadline for
filing the First Stage GMD Reliability Standards does not allow enough
time to develop a Reliability Standard using the NERC standards
development process.\72\ ITC proposes a six-month deadline for
developing and submitting the First Stage GMD Reliability Standards and
a six-month implementation period following Commission approval. LADWP
suggests an eight-month deadline for submitting the First Stage GMD
Reliability Standards and a six-month implementation period. Joint
ISOs/RTOs propose a one-year deadline for developing and submitting the
First Stage GMD Reliability Standards, with the Commission directing
NERC to develop an implementation schedule once NERC has a better idea
of the degree of coordination that will be needed between the different
functional entities. CenterPoint states that ``two years of study and
review are needed to develop GMD Reliability Standards'' and proposes
``a region-based phased implementation schedule.'' \73\ Exelon
recommends having the ERO propose a filing deadline.\74\ The Trade
Associations recommend that the Commission not suggest an
implementation period, but the Trade Associations state that it is
their preliminary view that operational procedures could be implemented
in six months.\75\
---------------------------------------------------------------------------

    \72\ See, e.g., ITC Comments at 3; LADWP Comments at 8-9; Joint
ISOs/RTOs Comments at 14; Consumers Energy Comments at 2-3; AEP
Comments at 4.
    \73\ CenterPoint Comments at 16-17.
    \74\ Exelon Comments at 14.
    \75\ Trade Associations Comments at 22.
---------------------------------------------------------------------------

Commission Determination
    44. We support the prompt development of mandatory and enforceable
Reliability Standards that require owners and operators to implement
operational procedures to afford some level of protection to the Bulk-
Power System against GMD events. In its comments, NERC commits to
meeting the 90-day deadline proposed in the NOPR. However, based on the
concerns raised in other comments, we modify the schedule in the NOPR
and direct NERC to submit proposed First Stage GMD Reliability
Standards within six months of the effective date of this Final Rule.
    45. While a six-month deadline may not be as long as some
commenters propose, it strikes a balance by affording NERC a reasonable
amount of time to develop the Reliability Standards and having
Reliability Standards in place in the near term. As we stated in the
NOPR, the Commission expects that NERC and owners and operators of the
Bulk-Power System will draw on industry's experience with existing
operational procedures to expedite the NERC standards development
process. This should help establish the First Stage GMD Reliability
Standards quickly to afford some level of protection to the Bulk-Power
System against GMD events.
    46. With respect to the suggested 90-day implementation period
proposed in the NOPR, we modify the proposal and suggest a six-month
implementation period. Given our expectation that the Reliability
Standards proposed by NERC will require responsible entities to develop
and implement operational procedures and to coordinate such efforts, it
is appropriate to afford more time for implementation. We take no
position in this Final R ule on the details of the implementation plan.
The details of the implementation plan should be addressed, in the
first instance, in the NERC standards development process.

C. ``Initial Actions'' GMD Vulnerability Assessments NOPR

    47. The NOPR proposed to accept aspects of the ``Initial Actions''
detailed in NERC's May 21, 2012 post-Technical Conference comments. The
NOPR stated that NERC proposed to ``identify facilities most at-risk
from severe geomagnetic disturbance'' and ``conduct wide-area
geomagnetic disturbance vulnerability assessment.'' \76\ The NOPR
agreed with NERC that critical Bulk-Power System facilities should be
evaluated for GMD vulnerability and, as part of the ``Initial
Actions,'' that special attention should be given to Bulk-Power System
facilities that provide service to critical and priority loads.\77\ The
NOPR proposed that NERC would conduct these ``Initial Actions'' in
parallel with the development and implementation of the First Stage GMD
Reliability Standards.
---------------------------------------------------------------------------

    \76\ NERC May 21, 2012 Comments at 8-9.
    \77\ NOPR, 141 FERC ] 61,045 at P 22 (citing NERC, Severe Impact
Resilience: Considerations and Recommendations at 26 (Accepted by
NERC Board of Trustees on May 9, 2012), available at http://www.nerc.com/docs/oc/sirtf/SIRTF_Final_May_9_2012-Board_Accepted.pdf.).
---------------------------------------------------------------------------

Comments
    48. NERC states that it agrees that an assessment is necessary to
identify and classify the at-risk population of transformers, and NERC
clarifies that asset owners will conduct the ``Initial Actions''
assessments. The Trade Associations agree that owners and operators of
the Bulk-Power System should perform individual assessments, while
planning authorities should perform system-wide assessments.
    49. The Trade Associations support identification of at-risk
facilities but caution that the assessment will require new tools,
including improved modeling of GICs; improvements in area and regional
power flow modeling; and benchmarking of models against actual GICs.
Bonneville also states that, while an assessment needs to be done, the
tools and models required to perform such an assessment currently do
not exist. Bonneville anticipates the availability of ``adequate tools
for use in developing limited assessments of risk indexed against the
magnitude of GIC flow through individual transformers and possibly even
reactive demand under GIC condition by the end of 2013.'' \78\
---------------------------------------------------------------------------

    \78\ Bonneville Comments at 5.
---------------------------------------------------------------------------

    50. Duke states that the ``Initial Actions'' assessments should
identify critical Bulk-Power System facilities but that ``[e]xpanding
the effort to include identification and protection for all critical
and priority loads is too extensive an activity to be completed
simultaneously with the first stage GMD Reliability Standards.'' \79\
Exelon states that the NOPR defines critical facilities in a confusing
manner because the NOPR references ``critical and priority'' loads,
which Exelon states generally relate to the distribution system and not
to specific Bulk-Power System facilities. Exelon states that NERC has
set out a methodology for determining what equipment it considers
critical and a methodology to identify ``at-risk'' equipment based on
peer-reviewed research. Exelon recommends that NERC and responsible
entities rely on their technical expertise to define what

is critical equipment. Exelon also states that the time frames in the
NOPR for completing the ``Initial Actions'' assessments is unrealistic
because Exelon believes that the NOPR proposed to require completion of
the assessments 90 days after the Commission approves the First Stage
GMD Reliability Standards.\80\ CenterPoint states that vulnerability
assessments should be made on a ``regional basis'' with the regions
most vulnerable to GMDs assessed first.
---------------------------------------------------------------------------

    \79\ Duke Comments at 5-6.
    \80\ Exelon Comments at 7 n.20.
---------------------------------------------------------------------------

Commission Determination
    51. The Commission accepts the proposal in NERC's May 21, 2012
post-Technical Conference comments and directs NERC to ``identify
facilities most at-risk from severe geomagnetic disturbance'' and
``conduct wide-area geomagnetic disturbance vulnerability assessment''
as well as give special attention to those Bulk-Power System facilities
that provide service to critical and priority loads.\81\ As noted in
NERC's comments, owners and operators of the Bulk-Power System, as
opposed to NERC, will perform the assessments and special attention
will be given to evaluating critical transformers (e.g., step-up
transformers at large generating facilities).\82\ We agree with the
Trade Associations that system-wide assessments could be conducted by
planning authorities, or another functional entity with a wide-area
perspective, in coordination with owners and operators of the Bulk-
Power System.\83\ NERC should oversee these efforts and provide
responsible entities with a methodology for identifying ``at-risk''
Bulk-Power System components and ``critical and priority loads'' that
need to be analyzed in the ``Initial Actions.''
---------------------------------------------------------------------------

    \81\ NERC Comments at 8-9 (``As the first step in identifying
the risk of geomagnetic disturbance to the bulk power system, NERC
intends to complete a system-wide vulnerability assessment . . .
special attention will be given to the evaluation of critical
transformers, such as generator step-up units at large generating
facilities . . . a high level review will be conducted to identify
and classify the at-risk population based on existing peer-reviewed
research. This assessment will be based on a high level screening
approach that will include transformer design, condition, geology
and geomagnetic location.'').
    \82\ The NERC Rules of Procedure permit NERC to seek such
information from registered entities. NERC Rules of Procedures,
Section 1601 (effective January 31, 2012) (``Within the United
States, NERC and Regional Entities may request data or information
that is necessary to meet their obligations under Section 215 of the
Federal Power Act, as authorized by Section 39.2(d) of the
Commission's regulations, 18 C.F.R. Sec.  39.2(d).'').
    \83\ The accuracy of wide-area assessments will depend on the
data provided by owners and operators of the Bulk-Power System.
---------------------------------------------------------------------------

    52. Some commenters state that tools do not exist for conducting
the ``Initial Actions'' assessments. As a result, the commenters assert
that the schedule for completing the ``Initial Actions'' assessments is
unrealistic because the commenters believe that the NOPR proposed to
require the completion of such assessments by the filing date or
implementation date of the First Stage GMD Reliability Standards. We
clarify that the ``Initial Actions'' assessments do no need to be
completed by the filing date or implementation date of the First Stage
GMD Reliability Standards. The NOPR only proposed that the ``Initial
Actions'' assessments should begin immediately (i.e., simultaneous with
the development of the First Stage GMD Reliability Standards). Thus,
the ``Initial Actions'' assessments provide a head start for analyzing
the most at-risk and critical facilities before the Second Stage GMD
Reliability Standards become effective and could be used to assist in
performing the GMD vulnerability assessments required in the Second
Stage GMD Reliability Standards. Further, to the extent that owners and
operators of the Bulk-Power System have already begun to identify
facilities most at-risk from severe GMD events, those assessments
should help to inform the ``Initial Actions'' assessments required by
this final rule.
    53. In NERC's May 21, 2012 post Technical Conference comments, NERC
stated that all of its proposed ``Initial Actions'' would take 18-24
months to complete.\84\ The June 2012 GMD Task Force Phase 2 Scope and
Project Plan estimated that ``improve[d] tools for industry planners to
develop GMD mitigation strategies'' would be completed within 12-36
months, depending on the task, and ``improve[d] tools for system
operators to manage GMD impacts'' would be completed within 12-24
months.\85\ Adjusting the deadline for submission of the Second Stage
GMD Reliability Standards to 18 months allows time to identify
facilities most at-risk from severe geomagnetic disturbance and to
conduct wide-area geomagnetic disturbance vulnerability assessment,
with special attention being given to those Bulk-Power System
facilities that provide service to critical and priority loads, before
the effective date of the Second Stage GMD Reliability Standards.\86\
---------------------------------------------------------------------------

    \84\ NERC May 21, 2012 Comments at 8.
    \85\ NERC, GMD Task Force Phase 2 Scope and Project Plan (June
2012), available at http://www.nerc.com/docs/pc/gmdtf/GMD_Phase_2_Project_Plan_APPROVED.pdf.
    \86\ The rulemaking following submission of the Second Stage GMD
Reliability Standards 18 months from the effective date of this
Final Rule is likely to take several months, and a multi-phased
implementation period is likely to follow the effective date of a
final rule approving the Second Stage GMD Reliability Standards.
---------------------------------------------------------------------------

D. Second Stage GMD Reliability Standards

    54. As discussed below, the Commission adopts the NOPR proposal,
with modifications, to direct NERC to submit Second Stage GMD
Reliability Standards. We direct NERC to submit for approval, one or
more Reliability Standards that require owners and operators of the
Bulk-Power System to conduct initial and on-going assessments of the
potential impact of benchmark GMD events on Bulk-Power System equipment
and the Bulk-Power System as a whole. The Second Stage GMD Reliability
Standard must identify what severity GMD events (i.e., benchmark GMD
events) that responsible entities will have to assess for potential
impacts on the Bulk-Power System. If the assessments identify potential
impacts from benchmark GMD events, owners and operators must develop
and implement a plan to protect against instability, uncontrolled
separation, or cascading failures of the Bulk-Power System, caused by
damage to critical or vulnerable Bulk-Power System equipment, or
otherwise, as a result of a benchmark GMD event. Owners and operators
of the Bulk-Power System cannot limit their plans to considering
operational procedures or enhanced training alone, but must, subject to
the vulnerabilities identified in the assessments, contain strategies
for protecting against the potential impact of the benchmark GMD events
based on factors such as the age, condition, technical specifications,
system configuration, or location of specific equipment. These
strategies could, for example, include automatically blocking GICs from
entering the Bulk-Power System, instituting specification requirements
for new equipment, inventory management, and isolating certain
equipment that is not cost effective to retrofit, or a combination
thereof. These Reliability Standards should be submitted within 18
months of the effective date of this Final Rule.
    55. In the discussion below, we address the comments on the GMD
vulnerability assessments, the plans for addressing identified
vulnerabilities, and the schedule for submitting and implementing the
Second Stage GMD Reliability Standards.
1. GMD Vulnerability Assessments
NOPR
    56. The NOPR proposed to direct NERC to file one or more
Reliability

Standards that require owners and operators of the Bulk-Power System to
conduct initial and on-going assessments of the potential impact of
GMDs on Bulk-Power System equipment and the Bulk-Power System as a
whole. The NOPR stated that the Reliability Standards would require
owners and operators to develop and implement plans based on the needs
identified in the assessments.
    57. The NOPR proposed to direct the ERO to consider the following
parameters as it develops the Second Stage GMD Reliability Standards.
    58. First, the Commission proposed that the Reliability Standards
should contain uniform evaluation criteria for owners and operators to
follow when conducting their assessments.
    59. Second, the NOPR stated that the assessments should, through
studies and simulations, evaluate the primary and secondary effects of
GICs on Bulk-Power System transformers, including the effects of GICs
originating from and passing to other regions.\87\
---------------------------------------------------------------------------

    \87\ The NOPR described damage to Bulk-Power System components
as a primary effect of GICs and production of harmonics that are not
present during normal Bulk-Power System operation and increased
transformer absorption of reactive power as secondary effects of
GICs. NOPR, 141 FERC ] 61,045 at P 13.
---------------------------------------------------------------------------

    60. Third, the NOPR asserted that the assessments should evaluate
the effects of GICs on other Bulk-Power System equipment, system
operations, and system stability, including the anticipated loss of
critical or vulnerable devices or elements resulting from GIC-related
issues.\88\
---------------------------------------------------------------------------

    \88\ The Oak Ridge Study assessment included GMD modeling,
simulation and review of storm impacts, power grid GIC flows and
reactive power demands, transformer heating and risk of potential
damage to transformers. See generally Oak Ridge Study 319 Report.
---------------------------------------------------------------------------

    61. Fourth, in conjunction with assessments by owners and operators
of their own Bulk-Power System components, the Commission stated that
wide-area or Regional assessments of GIC impacts should be performed.
The NOPR noted that a severe GMD event can cause simultaneous stresses
at multiple locations on the Bulk-Power System, potentially resulting
in a multiple-outage event.\89\ In predicting GIC flows, it is
necessary to take into consideration the network topology as an
integrated whole (i.e., on a wide-area basis).\90\
---------------------------------------------------------------------------

    \89\ Oak Ridge Study 319 Report at pages A1-1, A1-2.
    \90\ Id. at page 1-17.
---------------------------------------------------------------------------

    62. Fifth, the NOPR proposed that the assessments should be
periodically updated, taking into account new facilities, modifications
to existing facilities, and new information, including new research on
GMDs, to determine whether there are resulting changes in GMD impacts
that require modifications to Bulk-Power System mitigation schemes.
Comments
    63. NERC and several commenters generally support requiring GMD
vulnerability assessments.\91\ NERC states that it supports the NOPR's
approach of requiring owners and operators of the Bulk-Power System to
conduct vulnerability assessments to determine how critical or
vulnerable Bulk-Power System components react to simulated GICs of
varying intensities. NERC also states that it appreciates the NOPR's
recognition of the need to incorporate new information and research
given that the science of GMDs is still evolving.
---------------------------------------------------------------------------

    \91\ See, e.g., NERC Comments at 14 Joint ISOs/RTOs Comments at
19; PJM Comments at 3; Pa PUC Comments at 3-4; AEP Comments at 2.
---------------------------------------------------------------------------

    64. Many commenters that oppose the Second Stage GMD Reliability
Standards at this time state that available methods of performing
vulnerability assessments are crude and unrefined.\92\ For example, the
Trade Associations state that using existing tools ``would be asking
industry to make assessments . . . and apply solutions at a point when
these tools are incapable of doing so without creating risks to
reliability that could be greater than any known risk resulting from a
severe GMD event.'' \93\ Commenters state that assessments should only
be required after the necessary tools and methodologies have been
developed and validated and the NERC GMD Task Force has completed its
work.
---------------------------------------------------------------------------

    \92\ See, e.g., Trade Associations Comments at 30; Exelon
Comments at 8.
    \93\ Trade Associations Comments at 4.
---------------------------------------------------------------------------

    65. Some commenters state that requiring all owners and operators
to base their vulnerability assessments on uniform evaluation criteria
would not be realistic due to the widely varying geology and
geomagnetic latitudes within which the Bulk-Power System is planned and
operated.
    66. Some commenters state that the Commission should specify the
severity of the GMD to assess and plan, although the commenters do not
agree on a specific severity.\94\ ITC states that it ``believes that
there should be a clear engineering benchmark for transmission owner
and operators to plan for GMD in a prudent fashion (e.g., a 1 in 100
year GMD event).'' \95\ EIS states that, because the science of GMDs is
inexact, an event twice as large as the largest expected GMD should be
used as a safety margin.\96\ Other commenters state that establishing a
benchmark GMD event is problematic because there is no consensus storm
scenario.
---------------------------------------------------------------------------

    \94\ See, e.g., CEA Comments at 4-5; ITC Comments at 4.
    \95\ ITC Comments at 4.
    \96\ EIS Comments at 4.
---------------------------------------------------------------------------

Commission Determination
    67. We direct NERC, within 18 months of the effective date of this
final rule, to submit for approval one or more Reliability Standards
that require owners and operators of the Bulk-Power System to conduct
initial and on-going vulnerability assessments of the potential impact
of benchmark GMD events on Bulk-Power System equipment and the Bulk-
Power System as a whole. We agree with commenters that the Second Stage
GMD Reliability Standards should specify what severity GMD events
(i.e., benchmark GMD events) responsible entities must assess for
potential impacts on the Bulk-Power System. However, the Commission
declines to specify the severity of the storm or otherwise define the
characteristics of these benchmark GMD events in this Final Rule.
Rather, NERC, through its standards development process, should
identify the benchmark GMD events that responsible entities would have
to assess.\97\ Each responsible entity under the Second Stage GMD
Reliability Standards would then be required to assess its
vulnerability to the benchmark GMD events consistent with the five
assessment parameters identified in the NOPR and adopted in this Final
Rule.\98\ The NERC standards development process should consider
tasking planning coordinators, or another functional entity with a
wide-area perspective, to coordinate assessments across Regions under
the Second Stage GMD Reliability Standards to ensure consistency and
regional effectiveness.
---------------------------------------------------------------------------

    \97\ Similar work is already being done in Phase 2 of the NERC
GMD Task Force Plan. The GMD Task Force Phase 2 Scope and Project
Plan states that the NERC GMD Task Force will ``refine and improve a
set of defined reference storms (most severe occurrence in a 100-
year time horizon) and support ongoing research to identify the
maximum theoretical GMD.'' GMD Task Force Phase 2 Scope and Project
Plan at 5.
    \98\ NOPR, 141 FERC ] 61,045 at PP 28-32.
---------------------------------------------------------------------------

    68. The comments that oppose requiring assessments stress that
there is a substantial amount of work being done by the NERC GMD Task
Force and industry to develop and validate tools, models, and data to
perform the vulnerability assessments. We recognize that the tools for
assessing GMD vulnerabilities are not fully mature. To address this
concern, NERC should

consider developing Reliability Standards that can incorporate
improvements in the scientific understanding of GMDs. When developing
the Second Stage GMD Reliability Standards implementation schedule,
NERC should consider the availability of validated tools, models, and
data necessary to comply with the Requirements.
    69. Some tools currently exist and others are expected to be
available when the Second Stage GMD Reliability Standards become
effective. For example, NERC states in its comments that, while only
one component of developing a comprehensive understanding of the
effects of GMDs on the Bulk-Power System, NERC and the Electric Power
Research Institute have developed a vulnerability assessment tool that
calculates expected GIC levels and has released the tool in an open-
source code.\99\ In addition, NERC stated in its May 12, 2012 post-
Technical Conference comments that NERC expects to complete several
``Mid-Term Actions'' within 12 to 36 months relating to the development
of GMD assessment tools. These ``Mid-Term Actions'' include: (1)
Refining probabilistic geomagnetic disturbance storm scenarios; (2)
performing comprehensive tests of transformers to GIC; (3) increasing
GIC monitoring locations across North America; and (4) developing
analytical tools for system planners and operators to reliably manage
geomagnetic disturbance impacts.\100\ The 18-month deadline to submit
the Second Stage GMD Reliability Standards (i.e., early-2015) falls
within NERC's 12 to 36 month window for completion of the ``Mid-Term
Actions.'' Moreover, it is likely that the implementation date of the
Second Stage GMD Reliability Standards will be after the completion of
the ``Mid-Term Actions.'' As a result, responsible entities will likely
have additional tools available to conduct GMD vulnerability
assessments once the Second Stage GMD Reliability Standards become
effective. In any event, as we explain above, NERC should consider the
availability of validated tools, models, and data as it develops an
implementation schedule for the Second Stage GMD Reliability Standards.
---------------------------------------------------------------------------

    \99\ NERC Comments at 13. As noted at the April 30, 2012
Technical Conference, John Kappenman stated that his investigations
are based on mathematical models regarding the impacts of GMDs on
the Bulk-Power System. See, e.g., April 30, 2012 Prepared Testimony
of John G. Kappenman at 1.
    \100\ NERC May 12, 2012 Comments at 10-12.
---------------------------------------------------------------------------

    70. In response to commenters who note that entities may have
different vulnerabilities to GMD events based on their geographic
location and geology, we emphasize that the vulnerability assessments
in the Second Stage GMD Reliability Standards should not assume that
all owners and operators of the Bulk-Power System are the same.
However, we disagree with commenters that it is not realistic to base
vulnerability assessments on uniform evaluation criteria.\101\ We
clarify that the NOPR did not intend to require responsible entities to
use uniform values when assessing their GMD vulnerabilities. Instead,
the vulnerability assessments would be based on uniform criteria (e.g.,
geographic location and geology) but the values for such criteria would
be entity-specific.
---------------------------------------------------------------------------

    \101\ NOPR, 141 FERC ] 61,045 at P 27.
---------------------------------------------------------------------------

    71. In drafting the Second Stage GMD Reliability Standards, NERC
should identify what severity GMD events (i.e., benchmark GMD events)
responsible entities will have to assess, and NERC should technically
support its choice. The benchmark GMD events should be based on factors
that may include, but are not limited to, varying severity of the GMD
(i.e., the rate of change in the GMDs magnetic fields), duration,
geographic footprint of the GMD, how the GMD's intensity varies with
latitude, system configuration, and the orientation of the magnetic
fields produced by the GMD.\102\ We recognize that there is currently
no consensus on benchmark GMD events, and the Commission does not
identify specific benchmark GMD events for NERC to adopt. Instead, this
issue should be considered in the NERC standards development process so
that any benchmark GMD events proposed by NERC have a strong technical
basis.
---------------------------------------------------------------------------

    \102\ NERC Interim GMD Report at 82 (``The first step is to
develop a handful of scenarios and the associated probability of
each (e.g., severe storm--once in 100 years; serious storm once in
10 years).''). The Commission recognizes that this is not an
exhaustive list and additional factors may be added as new
information becomes available.
---------------------------------------------------------------------------

2. Plans To Address Identified GMD Vulnerabilities NOPR
    72. The NOPR proposed to direct the ERO to develop Reliability
Standards that require owners and operators of the Bulk-Power System to
develop and implement a plan, based on the results of the GMD
vulnerability assessments, so that instability, uncontrolled
separation, or cascading failures of the Bulk-Power System, caused by
damage to critical or vulnerable Bulk-Power System equipment, or
otherwise, will not occur as a result of a GMD. The NOPR did not
propose to require a particular solution in the Second Stage GMD
Reliability Standards to address identified vulnerabilities. However,
the NOPR stated that it expected that some assessments will demonstrate
that automatic blocking is necessary in some instances.
    73. The NOPR stated that automatic blocking measures address the
two major concerns with relying exclusively on operational procedures
to mitigate GMDs (i.e., the short period of time to react to a GMD
event and operational procedures may not prevent damage to Bulk-Power
System equipment). The NOPR stated that automatic blocking can prevent
the flow of GICs through power transformers and the Bulk-Power
System.\103\ The NOPR further stated that eliminating GICs in
transformers prevents transformer core saturation and, thus, mitigates
or prevents the effects of GMDs on the Bulk-Power System (i.e.,
transformer overheating, reactive power absorption, and harmonic
generation). The NOPR did not propose to direct the ERO to require a
particular automatic blocking technology, where blocking is deemed
necessary. Instead, the Commission proposed to direct the ERO to
identify in the Reliability Standards what would constitute appropriate
automatic blocking measures. In defining what is an appropriate
blocking measure, the NOPR stated that the ERO should address: (1) Its
feasibility and effectiveness; and (2) its ability to operate without
adversely impacting the reliable operation of the Bulk-Power System.
The NOPR also proposed that the Reliability Standards should include a
means by which the ERO can verify that selected blocking measures are
appropriate.
---------------------------------------------------------------------------

    \103\ NOPR, 141 FERC ] 61,045 at P 34 (citing NERC Interim GMD
Report at 73).
---------------------------------------------------------------------------

    74. The NOPR stated that, while not a means for blocking GICs,
another possible option is to improve the ``withstand'' capability of
Bulk-Power System components, which refers to a component's ability to
withstand stresses imposed by GICs before suffering damage.\104\ The
NOPR stated that the ERO should consider whether the reliability goals
of the proposed Reliability Standards can be achieved by a combination
of automatic protection measures, including, for example, some
combination of automatic blocking and improved ``withstand''
capability.
---------------------------------------------------------------------------

    \104\ NOPR, 141 FERC ] 61,045 at P 36 (citing NERC Interim GMD
Report at 67).

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

Comments
    75. NERC states that the Second Stage GMD Reliability Standards
should be technology-neutral and should not require dedicated blocking
devices or other specific equipment. NERC further states that it is
currently unable to verify whether a specific blocking device is
appropriate.
    76. A majority of commenters state that blocking devices need
further study and that the Commission should clarify that the Second
Stage GMD Reliability Standards will not require responsible entities
to install blocking devices or require installation of any particular
type of mitigation.\105\ Bonneville, for example, states that the
``capability to perform studies that include transformer thermal models
needed for developing appropriate mitigation plans and blocking
strategies will likely not be available for use until the end of the
2014 at the earliest.'' \106\ Commenters also express concern with the
statement in the NOPR that plans for addressing GMD vulnerabilities
cannot be limited to operational procedures or enhanced training alone
because the commenters understand this language to require the
installation of automatic blocking devices. PJM requests that the
Reliability Standards explicitly state that equipment owners, not
system operators, are the responsible entities.\107\
---------------------------------------------------------------------------

    \105\ See, e.g., Trade Associations Comments at 32; Joint ISOs/
RTOs Comments at 18; Bonneville Comments at 7; Exelon Comments at
11-12.
    \106\ Bonneville Comments at 6.
    \107\ PJM Comments at 4-5.
---------------------------------------------------------------------------

    77. Some commenters state that the Second Stage GMD Reliability
Standard should not require responsible entities to implement a plan
that prevents cascading failures but instead support a Reliability
Standard that allows NERC to determine the appropriate mix between
prevention and timely restoration of the Bulk-Power System. Commenters
also express concern with the language in the NOPR that, under the
Second Stage GMD Reliability Standards, responsible entities would be
required to ``develop and implement a plan so that instability,
uncontrolled separation, or cascading failures of the Bulk-Power
System, caused by damage to critical or vulnerable Bulk-Power System
equipment, or otherwise, will not occur as a result of a GMD.''
Commenters state that such a standard imposes strict liability on
responsible entities and is inconsistent with the unpredictable and
uncontrolled nature of GMD events.
    78. Other commenters express support for hardening elements of the
Bulk-Power System as an option to protect against GMD events.\108\ Some
of these commenters state that operational procedures alone do not
prevent the flow of GICs through Bulk-Power System elements; instead,
operational procedures are intended to prevent the Bulk-Power System
from collapsing, which exposes equipment to GICs for longer periods.
EIS states that a combination of operational procedures and hardware is
needed to protect the Bulk-Power System. Foundation states that relying
on operational procedures alone, based on warnings from space weather
observations, renders the Advanced Composition Explorer satellite,
which gives details about an approaching GMD, a single point of failure
in protecting the Bulk-Power System. Commenters also state that the
benefits afforded by operational procedures are unpredictable because
the state of the Bulk-Power System (e.g., load, available generation,
unplanned equipment outages) at the time of a GMD event cannot be known
in advance.
---------------------------------------------------------------------------

    \108\ See, e.g., Pa PUC Comments at 4; Bonneville Comments at 7.
---------------------------------------------------------------------------

Commission Determination
    79. We direct NERC, within 18 months of the effective date of this
Final Rule, to submit for approval one or more Reliability Standards
that, assuming the assessments identify potential impacts from a
benchmark GMD event, require owners and operators of the Bulk-Power
System to develop and implement a plan to protect against instability,
uncontrolled separation, or cascading failures of the Bulk-Power
System, caused by damage to critical or vulnerable Bulk-Power System
equipment, or otherwise, as a result of a benchmark GMD event. Owners
and operators of the Bulk-Power System cannot limit their plans to
considering operational procedures or enhanced training, but must,
subject to the vulnerabilities identified in the assessments, contain
strategies for protecting against the potential impact of any benchmark
GMD event based on factors such as the age, condition, technical
specifications, system configuration, or location of specific
equipment. These strategies could, for example, include automatically
blocking GICs from entering the Bulk-Power System, instituting
specification requirements for new equipment, inventory management, and
isolating certain equipment that is not cost effective to retrofit, or
a combination thereof.
    80. A major concern raised in the comments is that the NOPR
proposed to require responsible entities to utilize automatic blocking
devices. However, the NOPR explicitly stated that it did not propose to
require a particular solution in the Second Stage GMD Reliability
Standards to address GMD vulnerabilities. The NOPR only stated that it
expected that some assessments will demonstrate that automatic blocking
is necessary in some instances. While the NOPR proposed to provide
guidance with respect to the use and evaluation of automatic blocking
devices, the NOPR did not propose to require the use of automatic
blocking devices.
    81. In this Final Rule, we do not direct the ERO to develop
Reliability Standards that require the use of automatic blocking
devices or any specific technology. We agree with NERC that the
Reliability Standards should be technology-neutral.\109\ Instead, the
Second Stage GMD Reliability Standards should require owners and
operators of the Bulk-Power System to develop and implement a plan to
protect against instability, uncontrolled separation, or cascading
failures of the Bulk-Power System, caused by damage to critical or
vulnerable Bulk-Power System equipment, or otherwise, as a result of a
benchmark GMD event. In the NOPR, we identified a non-exhaustive list
of possible automatic measures for doing so, including automatically
blocking GICs from entering the Bulk-Power System, instituting
specification requirements for new equipment, inventory management, and
isolating certain equipment that is not cost effective to retrofit.
---------------------------------------------------------------------------

    \109\ NERC Comments at 4.
---------------------------------------------------------------------------

    82. As with the First Stage GMD Reliability Standards, the
responsible entities should perform vulnerability assessments of their
own systems and develop the plans for mitigating any identified
vulnerabilities. We take no position in this Final Rule on which
functional entities should be responsible for compliance under the
Second Stage GMD Reliability Standards. However, the NERC standards
development process should consider tasking planning coordinators, or
another functional entity with a wide-area perspective, to coordinate
mitigation plans across Regions under the Second Stage GMD Reliability
Standards to ensure consistency and regional effectiveness. We clarify
that if a responsible entity performs the required GMD vulnerability
assessments and finds no potential GMD impacts, no

plan is required under the Second Stage GMD Reliability Standards.\110\
---------------------------------------------------------------------------

    \110\ NOPR, 141 FERC ] 61,045 at P 16 n.37.
---------------------------------------------------------------------------

    83. The NOPR stated that if a responsible entity identifies GMD
vulnerabilities, then the plan cannot be limited to operational
procedures or enhanced training alone. Some commenters interpreted this
to mean that a responsible entity could never rely on operational
procedures alone. We clarify that if the GMD vulnerability assessments
in the Second Stage GMD Reliability Standards identify potential GMD
impacts, while the development of the required mitigation plan cannot
be limited to considering operational procedures or enhanced training
alone, operational procedures and enhanced training may be sufficient
if that is verified by the vulnerability assessments.
    84. The Second Stage GMD Reliability Standards should not impose
``strict liability'' on responsible entities for failure to ensure the
reliable operation of the Bulk-Power System in the face of a GMD event
of unforeseen severity, as some commenters fear. The NOPR proposed to
require owners and operators to develop and implement a plan so that
instability, uncontrolled separation, or cascading failures of the
Bulk-Power System, caused by damage to critical or vulnerable Bulk-
Power System equipment, or otherwise, will not occur as a result of a
GMD.\111\ While this language is taken directly from the definition of
``reliable operation'' in FPA section 215(a)(4), and similar language
is found in the Requirements of other Reliability Standards, we clarify
that owners and operators should be required to develop and implement a
plan to protect against instability, uncontrolled separation, or
cascading failures of the Bulk-Power System, caused by damage to
critical or vulnerable Bulk-Power System equipment, or otherwise, as a
result of a benchmark GMD event. The goal of the NERC standards
development process should be to propose Reliability Standards that
ensure the reliable operation of the Bulk-Power System in response to
identified benchmark GMD events.\112\ Identifying robust and
technically justified benchmark GMD events in the Reliability
Standards, that the Bulk-Power System is required to withstand (i.e.,
continue ``reliable operation''), addresses the concern that
responsible entities might otherwise be required to prevent
instability, uncontrolled separation, or cascading failures of the
Bulk-Power System when confronted with GMD events of unforeseen
severity. In addition, the Reliability Standards should include
Requirements whose goal is to prevent instability, uncontrolled
separation, or cascading failures of the Bulk-Power System when
confronted with a benchmark GMD event. Given that the scientific
understanding of GMDs is still evolving, we recognize that Reliability
Standards cannot be expected to protect against all GMD-induced
outages.
---------------------------------------------------------------------------

    \111\ 16 U.S.C. 824o(a)(4) (``The term `reliable operation'
means operating the elements of the bulk-power system within
equipment and electric system thermal, voltage, and stability limits
so that instability, uncontrolled separation, or cascading failures
of such system will not occur as a result of a sudden disturbance,
including a cybersecurity incident, or unanticipated failure of
system elements.'').
    \112\ See, e.g., Reliability Standard TOP-004-2, Requirement R2
(``Each Transmission Operator shall operate so that instability,
uncontrolled separation, or cascading outages will not occur as a
result of the most severe single contingency.'').
---------------------------------------------------------------------------

    85. In the NOPR, we proposed to direct the ERO to identify what
would constitute appropriate automatic blocking measures. The NOPR
stated that, in defining what is an appropriate blocking measure, the
ERO should address: (1) Feasibility and effectiveness; and (2) ability
to operate without adversely impacting the reliable operation of the
Bulk-Power System. The comments reflect that certain entities have
implemented automatic blocking measures, but the comments also reflect
concerns with the unintended effects of automatic blocking measures and
the uncertainties surrounding automatic blocking measures.\113\ We do
not require the use of automatic blocking measures in the Second Stage
GMD Reliability Standards. However, given that some responsible
entities have or may choose automatic blocking measures, the NERC
standards development process should consider how to verify that
selected blocking measures are effective and consistent with the
reliable operation of the Bulk-Power System.
---------------------------------------------------------------------------

    \113\ CEA Comments at 10; Bonneville Comments at 7; Dominion
Comments at 7; CenterPoint Comments at 12-13; Exelon Comments at 11-
12.
---------------------------------------------------------------------------

    86. The NOPR stated that another possible mitigation option is to
improve the ``withstand'' capability of Bulk-Power System components.
The NOPR stated that the ``withstand'' capability refers to a
component's ability to withstand stresses imposed by GICs before
suffering damage. While responsible entities will decide how to
mitigate GMD vulnerabilities on their systems, the NERC standards
development process should consider how the reliability goals of the
proposed Reliability Standards can be achieved by a combination of
automatic measures including, for example, some combination of
blocking, improved ``withstand'' capability, instituting specification
requirements for new equipment, inventory management, and isolating
certain equipment that is not cost effective to retrofit. As with the
First Stage GMD Reliability Standards, NERC can identify and
disseminate to responsible entities the measures or the combination of
measures adequate to maintain the reliable operation of the Bulk-Power
System against the potential GMD impacts identified in the assessments.
3. Schedule for Submitting and Implementing Second Stage GMD
Reliability Standards
NOPR
    87. The NOPR proposed a six-month deadline to submit the Second
Stage GMD Reliability Standards to the Commission. However, the NOPR
did not propose to direct or suggest an implementation schedule for the
Second Stage GMD Reliability Standards. Instead, the NOPR stated that
the Reliability Standards would likely require an extended, multi-phase
implementation period given the time needed to conduct the required
assessments and the time and cost of installing any required automatic
protection measures. The NOPR stated that it would be appropriate for
the Second Stage GMD Reliability Standards to include an implementation
schedule that requires owners and operators of the Bulk-Power System to
prioritize implementation so that components considered vital to the
reliable operation of the Bulk-Power System are protected in the
earliest phase of the implementation plan.
Comments
    88. NERC states that ``[w]hile the implementation proposed for the
completion of the second stage Reliability Standards is aggressive,
NERC is committed to meeting whatever implementation targets are
established by the Commission in the final rule.'' \114\ Other
commenters support adoption of the proposed six-month filing deadline
for the Second Stage GMD Reliability Standards.\115\
---------------------------------------------------------------------------

    \114\ NERC Comments at 13.
    \115\ See, e.g., Foundation Comments at 19.
---------------------------------------------------------------------------

    89. Some commenters, including those supporting the Second Stage
GMD Reliability Standards, express concern with the six-month deadline
proposed in the NOPR because six months does not allow enough time to
address the complex issues raised by the proposed

Reliability Standards.\116\ Joint ISOs/RTOs propose a one-year
development and filing deadline.\117\ Idaho Power proposes an 18-month
deadline for submitting the Reliability Standards and a three-year,
multi-phased implementation period.\118\ Exelon recommends that NERC
should propose a filing deadline.\119\
---------------------------------------------------------------------------

    \116\ See, e.g., LADWP Comments at 5; Joint ISOs/RTOs Comments
24-25.
    \117\ Joint ISOs/RTOs Comments at 24.
    \118\ Idaho Power Comments at 2.
    \119\ Exelon Comments at 14.
---------------------------------------------------------------------------

    90. Commenters opposing the Second Stage GMD Reliability Standards
state that the development of Second Stage GMD Reliability Standards
should be delayed given the need for further research into GMDs and the
continuing work of the NERC GMD Task Force.
Commission Determination
    91. In its comments, NERC commits to meeting the six-month
submission deadline proposed in the NOPR. However, based on the
concerns raised in the comments, we modify the schedule in the NOPR and
direct NERC to submit the proposed Second Stage GMD Reliability
Standards within 18 months of the effective date of this Final Rule.
While NERC should propose an implementation plan, we do not direct or
suggest a specific implementation plan. As stated in the NOPR, in a
proposed implementation plan, we expect that NERC will consider a
multi-phased approach that requires owners and operators of the Bulk-
Power System to prioritize implementation so that components considered
vital to the reliable operation of the Bulk-Power System are protected
first. We also expect, as discussed above, that the implementation plan
will take into account the availability of validated tools, models, and
data that are necessary for responsible entities to perform the
required GMD vulnerability assessments.

III. Information Collection Statement

    92. The Office of Management and Budget (OMB) regulations require
approval of certain information collection requirements imposed by
agency rules. 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 an agency 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) requires each federal agency
to seek and obtain OMB approval before undertaking a collection of
information directed to ten or more persons, or contained in a rule of
general applicability.
    93. The Commission is submitting these reporting requirements to
OMB for its review and approval under section 3507(d) of the PRA. The
Commission solicited comments on the Commission's need for this
information, whether the information will have practical utility, 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. The
Commission received no comments on the burden and cost information
contained in the NOPR.
    94. The Public Reporting Burden and cost related to the proposed
rule in Docket RM12-22-000 are covered by, and already included in, the
existing FERC-725, Certification of Electric Reliability Organization;
Procedures for Electric Reliability (OMB Control No. 1902-0225). FERC-
725 includes the ERO's overall responsibility for developing
Reliability Standards, such as the Reliability Standards for
Geomagnetic Disturbances.
    95. Internal review: The Commission has reviewed the proposed
changes and has determined that the changes are necessary to ensure the
reliability and integrity of the Nation's Bulk-Power System.
    96. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office
of the Executive Director, email<EMAIL_ADDRESS>Phone: (202)
502-8663, fax:<PHONE_NUMBER>]. Comments on the requirements of this
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].
For security reasons, comments should be sent by email to OMB at<EMAIL_ADDRESS>Please reference OMB Control No. 1902-0225,
FERC-725 and the docket number of this proposed rulemaking in your
submission.

IV. Environmental Analysis

    97. 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.\120\ 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.\121\ The actions proposed here
fall within this categorical exclusion in the Commission's
regulations.\122\
---------------------------------------------------------------------------

    \120\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs. Preambles 1986-1990 ] 30,783 (1987).
    \121\ 18 CFR 380.4(a)(2)(ii).
    \122\ Only one commenter, SENS, addressed the NOPR's
Environmental Analysis proposal. SENS requested that the Commission
``include an environmental impact assessment of GMD-induced power
outage on the approximately 104 nuclear power plants in the United
States if the proposed rules are not enacted.'' SENS Comments at 5
(emphasis in original). The request in this comment is moot in light
of the Commission's directive in this Final Rule that the ERO
develop and submit for approval proposed GMD Reliability Standards.
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    98. The Regulatory Flexibility Act of 1980 (RFA) \123\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and that minimize
any significant economic impact on a substantial number of small
entities. The Small Business Administration's (SBA) Office of Size
Standards develops the numerical definition of a small business.\124\
The SBA 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.\125\
---------------------------------------------------------------------------

    \123\ 5 U.S.C. 601-612.
    \124\ 13 CFR 121.101.
    \125\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    99. The NOPR stated that, by proposing only to direct NERC, the
Commission-certified ERO, to develop GMD Reliability Standards, the
proposal would not have a significant or substantial impact on entities
other than NERC. The NOPR stated that the ERO develops and files with
the Commission for approval Reliability Standards affecting the Bulk-
Power System, which represents: (a) a total electricity demand of 830
gigawatts (830,000 megawatts) and (b) more than $1 trillion worth of
assets. Therefore, the NOPR certified

that the proposal will not have a significant economic impact on a
substantial number of small entities. The NOPR further stated that any
Reliability Standards proposed by NERC in compliance with this
rulemaking will be considered by the Commission in future proceedings
and that, as part of any future proceedings, the Commission will make
determinations pertaining to the Regulatory Flexibility Act based on
the content of the Reliability Standards proposed by NERC.
    100. The Commission received one comment addressing the Regulatory
Flexibility Act certification in the NOPR.
Comments
    101. APPA, NRECA, and TAPS state that the GMD Reliability Standards
could result in significant adverse regulatory impacts on many small
utilities. APPA, NRECA and TAPS state that, while it might be premature
for the Commission to engage in a full RFA analysis at this stage,
putting off an RFA analysis will make it more difficult to perform an
analysis in the future. APPA, NRECA and TAPS state that the Commission
should at least gather the necessary facts in the comment phase of this
rulemaking so that it can develop a record on the universe of small
entities that could be affected by NERC Reliability Standards
addressing GMDs and possible ways to mitigate any adverse impacts of
such Reliability Standards. APPA, NRECA and TAPS encourage the
Commission to host a ``technical conference, convene[] a panel of small
utility representatives, or undertake some other comparable outreach
effort to solicit information from the small entities that may be
affected by the contemplated GMD reliability standards.'' \126\
---------------------------------------------------------------------------

    \126\ APPA, NRECA, and TAPS Comments at 6.
---------------------------------------------------------------------------

Commission Determination
    102. The Commission certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
We affirm the reasoning in the NOPR that, in only directing the ERO to
develop and submit for approval GMD Reliability Standards, this Final
Rule only applies to NERC, which, as discussed above, is not a small
entity. APPA, NRECA and TAPS concede that it would be premature to
conduct a full Regulatory Flexibility Analysis at this time, but they
state that it could be more difficult to conduct such an analysis in
the future. We disagree because the Commission cannot assess the
economic impact on small entities of the GMD Reliability Standards at
this time since they have not been developed or submitted for approval
by NERC. Such an analysis, at this time, would be purely speculative.
As we stated in the NOPR, the GMD Reliability Standards proposed by
NERC in compliance with this Final Rule will be considered by the
Commission in future rulemakings. As part of those rulemakings, the
Commission will make determinations pertaining to the Regulatory
Flexibility Act based on the content of the Reliability Standards
proposed by NERC. While the Commission declines to conduct the types of
outreach suggested by APPA, NRECA, and TAPS at this time, APPA, NRECA
and TAPS should participate in the standards development process as
NERC develops the Reliability Standards required by this Final Rule to
ensure that their views are taken into account. In addition, the
Commission welcomes any informal discussions on these issues as NERC
develops the Reliability Standards required by this final rule.

VI. Document Availability

    103. 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.
    104. 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.
    105. 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>
VII. Effective Date and Congressional Notification

    106. These regulations are effective July 22, 2013. The Commission
has determined, with the concurrence of the Administrator of the Office
of Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

Appendix--Commenters

------------------------------------------------------------------------
         Abbreviation                          Commenter
------------------------------------------------------------------------
Alcoa........................  Alcoa Inc. and Alcoa Power Generating
                                Inc.
AFS..........................  Advanced Fusion Systems.
AEP..........................  American Electric Power Service
                                Corporation.
APS..........................  Arizona Public Service Company.
Ayers........................  Cynthia E. Ayers.
George Baker.................  George H. Baker III, Ph.D.
Joel Baker...................  Joel E. Baker.
Bequette.....................  William Bequette.
Bowen........................  Dwane M. Bowen.
Boyd.........................  David A. Boyd.
Bonneville...................  Bonneville Power Administration.
CEA..........................  Canadian Electricity Association.
CenterPoint..................  CenterPoint Energy Houston Electric, LLC.
Clinic.......................  Samuelson-Glushko Technology Law and
                                Policy Clinic, University of Colorado
                                Law School.
Congressman Franks...........  Congressman Trent Franks.

Consumers Energy.............  Consumers Energy Company.
Dominion.....................  Dominion Resources Services, Inc.
Duke.........................  Duke Energy Corporation.
EEI..........................  Edison Electric Institute.
EIS..........................  Electric Infrastructure Security Council.
ELCON........................  Electricity Consumers Resource Council.
Emprimus.....................  Emprimus LLC.
EPSA.........................  Electric Power Supply Association.
Exelon.......................  Exelon Corporation.
Foundation...................  Foundation for Resilient Societies.
FPL..........................  Florida Power & Light Company.
Frauman......................  Roger Frauman.
Greenhill....................  John Greenhill.
Idaho Power..................  Idaho Power Company.
IESO.........................  Independent Electricity Operator and
                                Hydro One Networks, Inc.
ITC..........................  International Transmission Company.
Joint ISOs/RTOs..............  Alberta Electric System Operator,
                                California Independent System Operator,
                                Electric Reliability Council of Texas,
                                Independent Electricity System Operator
                                of Ontario, Inc., ISO New England Inc.,
                                Midwest Independent Transmission System
                                Operator, Inc., New York Independent
                                System Operator, Inc., and Southwest
                                Power Pool (SPP).
Johnson......................  Amanda Johnson.
Kappenman....................  John Kappenman, Storm Analysis
                                Consultants.
KCP&L........................  Kansas City Power & Light Company and
                                KCP&L Greater Missouri Operations
                                Company.
Koenig.......................  Roger L. Koenig, Michigan State
                                University.
Kristen......................  Steven F. Kristen.
LADWP........................  City of Los Angeles Department of Water
                                and Power.
Leggett......................  Nickolaus Leggett.
Lloyd's......................  Lloyd's.
Lund.........................  John Curtis Lund.
Manto........................  Charles L. Manto.
Mitsubishi Electric..........  Mitsubishi Electric Power Products, Inc.
NARUC........................  National Association of Regulatory
                                Utility Commissioners.
NERC.........................  North American Electric Reliability
                                Corporation.
NV Energy....................  Nevada Power Company and Sierra Pacific
                                Power Company.
Pa PUC.......................  Pennsylvania Public Utility Commission.
Phoenix......................  Phoenix Electric Corp.
PJM..........................  PJM Interconnection, L.L.C.
PPL Companies................  Louisville Gas and Electric Company and
                                Kentucky Utilities Company, Lower Mount
                                Bethel Energy, LLC, PPL Brunner Island,
                                LLC, PPL Electric Utilities Corporation,
                                PPL EnergyPlus, LLC, PPL Ironwood, LLC,
                                PPL Martins Creek, LLC, PPL Montana,
                                LLC, PPL Montour, LLC, and PPL
                                Susquehanna LLC.
Orquin.......................  Alberto Ramirez Orquin, Ph.D.
Ruckriegle...................  Heidi Ruckriegle.
SCE..........................  Southern California Edison.
SDG&E........................  San Diego Gas & Electric.
SENS.........................  Stored Energy Systems LLC.
SmartSenseCom................  SmartSenseCom, Inc.
SPP Parties..................  AEP, City of Coffeyville, Kansas, City of
                                Independence, Missouri, Oklahoma
                                Municipal Power Authority, SPP,
                                Southwester Power Administration, Westar
                                Energy, Inc., and Western Farmers
                                Electric Cooperative.
Stolov.......................  Jerome J. Stolov.
TAPS.........................  Transmission Access Policy Study Group.
Trade Associations...........  American Public Power Association (APPA),
                                Edison Electric Institute, Large Public
                                Power Council, National Rural Electric
                                Cooperative Association (NRECA).
Wallenmeyer..................  William Wallenmeyer.
------------------------------------------------------------------------

[FR Doc. 2013-12141 Filed 5-22-13; 8:45 am]
BILLING CODE 6717-01-P