[Federal Register: March 24, 2009 (Volume 74, Number 55)]
[Rules and Regulations]
[Page 12256-12265]
[DOCID:fr24mr09-12]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket Nos. RM08-7-000 and RM08-7-001; Order No. 713-A]

Modification of Interchange and Transmission Loading Relief
Reliability Standards; and Electric Reliability Organization
Interpretation of Specific Requirements of Four Reliability Standards

Issued March 19, 2009.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the
Federal Energy Regulatory Commission (Commission) approves Reliability
Standard IRO-006-4, submitted to the Commission for approval by the
North American Electric Reliability Corporation (NERC). The Reliability
Standard addresses transmission loading relief requirements, which
provide a mechanism to manage and, if necessary, curtail interchange
transactions. In addition, pursuant to section 215(d)(5) of the FPA,
the Commission directs NERC to develop modifications to Reliability
Standard IRO-006-4 to address specific Commission concerns.

DATES: Effective Date: This rule will become effective April 23, 2009.

FOR FURTHER INFORMATION CONTACT:
Patrick Harwood (Technical Information), Office of Electric
Reliability, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>Christopher Daignault (Legal Information), Office of the General
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

                            Table of Contents

                                                               Paragraph
                                                                Numbers

I. Background...............................................           2
    A. Procedural Background................................           2
    B. Reliability Standard IRO-006-4.......................           6
II. Discussion..............................................          11
    A. Approval of Reliability Standard IRO-006-4...........          11
        1. Transfer of Business-Related Requirements to               15
         NAESB..............................................
        2. Improvements to the TLR Procedure................          18
    B. Requirement R1.......................................          22
        1. Use of TLR Procedure in Conjunction With Other             23
         Procedures To Mitigate an IROL Violation...........
        2. Use of TLR Procedure Alone To Mitigate an IROL             37
         Violation..........................................
        3. Use of Demand-Side Management To Mitigate IROL             41
         Violations.........................................
    C. Violation Risk Factors...............................          46
        1. Comments.........................................          47
        2. Commission Determination on Violation Risk                 59
         Factors............................................
        3. Commission Determination on Violation Severity             70
         Levels.............................................
III. Information Collection Statement.......................          73
IV. Environmental Analysis..................................          76
V. Regulatory Flexibility Act...............................          77
VI. Document Availability...................................          78
VII. Effective Date and Congressional Notification..........          81

    1. Pursuant to section 215 of the Federal Power Act (FPA) \1\ the
Commission approves Reliability Standard IRO-006-4, submitted to the
Commission for approval by the North American Electric Reliability
Corporation (NERC). The Reliability Standard addresses transmission
loading relief requirements, which provide a mechanism to manage and,
if necessary, curtail interchange transactions. In addition, pursuant
to section 215(d)(5) of the FPA, the Commission directs NERC to develop
modifications to Reliability Standard IRO-006-4 to address specific
concerns identified by the Commission.
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    \1\ 16 U.S.C. 824o (2006).
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I. Background

A. Procedural Background

    2. On December 21, 2007, NERC, the Commission-certified electric
reliability

organization (ERO), submitted for Commission approval modifications to
Reliability Standard IRO-006-4 (Reliability Coordination--Transmission
Loading Relief), known as the transmission loading relief or ``TLR''
procedure.\2\
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    \2\ Reliability Standard IRO-006-4 is not codified in the
Commission's regulations and is not attached to this Supplemental
Final Rule. It is, however, available on the Commission's eLibrary
document retrieval system in Docket No. RM08-7-000 and also is
available on the ERO's Web site, http://www.nerc.com.
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    3. On April 21, 2008, as supplemented on May 16, 2008, the
Commission issued a Notice of Proposed Rulemaking (NOPR) that proposed
to approve three NERC filings, including Reliability Standard IRO-006-
4.\3\ In response, nine interested persons filed comments, six of which
address the TLR procedure at issue here.\4\ (The Commission
consolidated three ERO submissions in the RM08-7-000 rulemaking
proceeding. This Supplemental Final Rule only addresses the ERO's
December 21, 2007 filing pertaining to the TLR Reliability Standard.
The Commission addressed the other two ERO filings in Order No. 713,
i.e., the Final Rule in this proceeding.)
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    \3\ Modification of Interchange and Transmission Loading Relief
Reliability Standards; and Electric Reliability Organization
Interpretation of Specific Requirements of Four Reliability
Standards, Notice of Proposed Rulemaking, 73 FR 22856 (Apr. 28,
2008), FERC Stats. & Regs. ] 32,632, at P 48 (2008) (NOPR),
Supplemental Notice of Proposed Rulemaking, 73 FR 30326 (May 27,
2008), FERC Stats. & Regs. ] 32,635 (2008) (Supplemental NOPR).
    \4\ Appendix A identifies the NOPR commenters.
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    4. On July 21, 2008, the Commission issued a Final Rule in this
proceeding, which approved five Reliability Standards and approved
NERC's interpretation of other Reliability Standards.\5\ The
Commission, however, did not make a determination in the Final Rule
regarding Reliability Standard IRO-006-4 and, instead, directed NERC to
submit a filing explaining one aspect of the TLR procedure.
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    \5\ Modification of Interchange and Transmission Loading Relief
Reliability Standards; and Electric Reliability Organization
Interpretation of Specific Requirements of Four Reliability
Standards, Order No. 713, 73 FR 43613 (July 28, 2008), 124 FERC ]
61,071 (2008) (Order No. 713 or Final Rule).
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    5. On September 11, 2008, NERC submitted a filing as directed in
the Final Rule. Notice of NERC's September 11, 2008 filing was
published in the Federal Register, 73 FR 75,429. Three interested
persons submitted comments.\6\
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    \6\ Appendix B identifies the commenters on NERC's September 11,
2008 filing. In addition, NERC filed reply comments.
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B. Reliability Standard IRO-006-4

    6. Reliability Standard IRO-006-4 applies to balancing authorities,
reliability coordinators, and transmission operators. Reliability
Standard IRO-006-4 modifies Reliability Standard IRO-006-3, which the
Commission approved in Order No. 693.\7\ In its December 2007 filing,
NERC explained that it modified the TLR procedure to ``extract''
commercial requirements and business practices.\8\ Further, the
modified Reliability Standard includes changes directed by the
Commission in Order No. 693 related to the appropriateness of using the
TLR procedure to mitigate a violation of an interconnection reliability
operating limit (IROL).\9\
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    \7\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order
No. 693-A, 120 FERC ] 61,053 (2007).
    \8\ The commercial requirements were transferred to a North
American Energy Standards Board (NAESB) business practices document.
The Commission approved the NAESB TLR standard, WEQ-008, to coincide
with the effective date of Reliability Standard IRO-006-4. See
Standards for Business Practices and Communication Protocols for
Public Utilities, Order No. 676-C, 73 FR 43848 (July 29, 2008), FERC
Stats. & Regs. ] 31,274, at P 7 n.11, P 9, P 80 (2008); see also
Order No. 713, 124 FERC ] 61,071 at P 8.
    \9\ An IROL is a system operating limit that, if violated, could
lead to instability, uncontrolled separation, or cascading outages
that adversely impact the reliability of the Bulk-Power System.
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    7. Reliability Standard IRO-006-4 contains five requirements.
Requirement R1 obligates a reliability coordinator experiencing a
potential or actual system operating limit (SOL) or IROL violation
within its reliability coordinator area to select one or more
procedures to mitigate potential or actual transmission overloads. The
requirement also identifies the regional TLR procedures in WECC and
ERCOT. Requirement R1 includes a warning that the TLR procedure alone
is an inappropriate and ineffective tool to mitigate an actual IROL
violation and provides alternatives.
    8. Requirement R2 mandates that the reliability coordinator only
use local TLR or congestion management procedures to which the
transmission operator experiencing the potential or actual SOL or IROL
is a party.
    9. Requirement R3 establishes that a reliability coordinator with a
TLR obligation from an interconnection-wide procedure follow the
curtailments as directed by the interconnection-wide procedure. It also
requires that a reliability coordinator desiring to use a local
procedure as a substitute for curtailments as directed by the
interconnection-wide procedure must obtain prior approval from the ERO.
    10. Requirement R4 mandates that each reliability coordinator
comply with interconnection-wide procedures, once they are implemented,
to curtail transactions that cross interconnection boundaries.
Requirement R5 directs balancing authorities and reliability
coordinators to comply with applicable interchange-related Reliability
Standards during the implementation of TLR procedures.

II. Discussion

A. Approval of Reliability Standard IRO-006-4

    11. In the NOPR, the Commission proposed to approve IRO-006-4 as
just, reasonable, not unduly discriminatory or preferential, and in the
public interest.\10\
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    \10\ NOPR, FERC Stats. & Regs. ] 32,632 at P 47.
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    12. NERC and IESO support approval of the Reliability Standard.
Lafayette and LEPA state that they support the Commission's effort to
reduce the use of TLRs; they support adoption of the Reliability
Standards as proposed by the Commission.
    13. Pursuant to section 215(d) of the FPA, the Commission approves
Reliability Standard IRO-006-4 as mandatory and enforceable. The ERO's
proposal implements the Commission's directives in Order No. 693 to
include a warning that the TLR procedure is an inappropriate and
ineffective tool to mitigate actual IROL violations and identify
available alternatives to mitigate an IROL violation.\11\ Further, as
discussed below, the Commission believes that the separation of
business practices from the Reliability Standards will not compromise
Bulk-Power System reliability. Accordingly, the Commission approves
IRO-006-4 as just, reasonable, not unduly discriminatory or
preferential, and in the public interest, as discussed below.
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    \11\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 577.
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    14. As a separate matter, pursuant to section 215(d)(5) of the FPA,
the Commission directs the ERO to develop, pursuant to its Reliability
Standards development procedure, modifications to IRO-006-4 to address
the Commission's specific concerns, as discussed below. Further, the
Commission approves the proposed violation risk factors and violation
severity levels and directs the ERO to submit a filing within 60 days
of the effective date of this Supplemental Final Rule revising
specified violation risk factors and violation severity levels.

1. Transfer of Business-Related Requirements to NAESB
    15. The Commission, in the NOPR, sought comments on whether the
removal and transfer to NAESB of the business-related issues formerly
contained in Reliability Standard IRO-006-3 could compromise Bulk-Power
System reliability.\12\
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    \12\ NOPR, FERC Stats. & Regs. ] 32,632 at P 49.
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a. Comments
    16. NERC states that it has coordinated with NAESB and believes
there is no compromise in reliability as a result of the removal and
transfer to NAESB of the business-related issues formerly contained in
the earlier standard, IRO-006-3. NERC notes that there are minor
differences in terminology and language between the NERC and NAESB
documents. It states that, although these differences may be confusing
to industry, they do not affect the ability to successfully implement
the standards as written. Further, NERC indicates that it is working
with NAESB to develop more in-depth coordination procedures to ensure
that language is consistent.
b. Commission Determination
    17. Based on the ERO's explanation, we are persuaded that the
separation of business practices from the Reliability Standards will
not compromise Bulk-Power System reliability. However, we are concerned
with respect to the ERO's acknowledgement that there are differences in
terminology and language used between the ERO Reliability Standard and
the NAESB standard that pertain to TLR procedures. The ERO indicates
that it is currently working with NAESB to develop more in-depth
coordination procedures to ensure that language is consistent. Thus, we
expect that the ERO, working with NAESB, will resolve the
inconsistencies in terminology between the Reliability Standard and
NAESB standard regarding TLR procedures as their agendas permit; we do
not find a need to direct changes at this time.
2. Improvements to the TLR Procedure
a. Comments
    18. Several commenters raise concerns regarding needed improvements
to the TLR procedure. Lafayette and LEPA comment that they have often
``suffered'' from the curtailment of firm transmission service pursuant
to the TLR procedure and support efforts to reduce its use. NRG
comments that the excessive use of TLRs is reducing system reliability
in some non-organized markets and that the Commission should require
NERC to modify its TLR rules to limit the excessive use of TLRs. NRG
states that the Interchange Distribution Calculator (IDC) is critical
to the TLR process,\13\ since reliability coordinators rely on the
curtailments specified by the IDC. NRG identifies two significant
problems with the IDC that IRO-006-4 does not address: (1) The
generation and load data relied on by the IDC is static, with no
requirement that it be regularly updated or accurately reflect real-
time conditions; and (2) the IDC methodology does not curtail certain
schedules or determine native network load obligations accurately in
some cases, leading to a discriminatory assignment of reliability
obligations. NRG urges the Commission to direct NERC to modify the IDC
to base its curtailment decisions on accurate native load information
and to base them consistently on local load and generation amounts.
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    \13\ The IDC is a mechanism used by the reliability coordinators
in the Eastern Interconnection to calculate the distribution of
interchange transactions over specific flowgates. It includes a
database of all interchange transactions and a matrix of the
distribution factors for the Eastern Interconnection.
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    19. Further, NRG states that there is a gap in the proposed TLR
procedures that allows certain non-firm transactions to escape
curtailment prior to the issuance of a Level 5 TLR (i.e., curtailment
of firm transactions and firm native load). NRG reiterates its concerns
in its comments on NERC's September 11, 2008 filing in this proceeding.
    20. ISO/RTO Council suggests that the Commission clarify that,
although TLR should not be ruled out as a congestion management tool,
NERC should address the use of more sophisticated tools to respond to
the impacts that loop flow and the lack of transparency in non-RTO
regions can have on congestion management at the ``seams.''
b. Commission Determination
    21. The above comments on suggested improvements to the TLR
procedure are beyond the scope of this proceeding, which pertains to
the separation of business practices from the ERO's TLR procedure and
implementation of the Commission's directives set forth in Order No.
693.\14\ We note, however, that the ERO indicated in its December 21,
2007 filing that it has a three-phase plan to improve the TLR
procedures, and the third phase will consist of ``a complete redrafting
to incorporate enhancement and changes beyond the separation of
reliability and business practice issues.'' \15\ Therefore, the phase
three proceeding would provide a proper forum for commenters to raise
their concerns. The Commission believes that NRG and other commenters
raise valid issues and urges the commenters to raise--and expects the
ERO to consider--these matters in an appropriate proceeding. We also
note that NERC states it is currently updating the IDC to more
accurately determine the impacts of native load and network
service.\16\
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    \14\ NERC's comments in reply to NRG, as well as Constellation's
and, in their joint supplemental pleading, Lafayette and LEPA's
comments relating to the TLR procedure are likewise beyond the scope
of this proceeding.
    \15\ NERC December 21, 2007 Filing at 7. Moreover, pursuant to
the ERO's Rules of Procedure, a commenter can submit a Standard
Authorization Request to the ERO to propose revisions to a
Reliability Standard.
    \16\ See NERC September 11, 2008 Response at 10.
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B. Requirement R1

    22. Requirement R1 of IRO-006-4 provides, in part:

    R1. A Reliability Coordinator experiencing a potential or actual
SOL or IROL violation within its Reliability Coordinator Area shall,
with its authority and at its discretion, select one or more
procedures to provide transmission loading relief. These procedures
can be a ``local'' (regional, interregional, or sub-regional)
transmission loading relief procedure or one of the following
Interconnection-wide procedures:
    R1.1 The Interconnection-wide Transmission Loading Relief (TLR)
procedure for use in the Eastern Interconnection is provided in
Attachment 1-IRO-006-4. The TLR procedure alone is an inappropriate
and ineffective tool to mitigate an IROL violation due to the time
required to implement the procedure. Other acceptable and more
effective procedures to mitigate actual IROL violations include:
Reconfiguration, redispatch, or load shedding.

    Below, we address three concerns regarding Requirement R1: (1) Use
of the TLR procedure in conjunction with other procedures to mitigate
an IROL violation; (2) use of the TLR procedure to mitigate an actual
IROL violation is a violation of the Reliability Standard; and (3) use
of demand-side management as an effective procedure to mitigate IROL
violations.
1. Use of TLR Procedure in Conjunction With Other Procedures To
Mitigate an IROL Violation
a. Final Rule Discussion
    23. In the Final Rule, the Commission did not approve or remand
IRO-006-4 but rather directed the ERO to submit a filing addressing the
Commission's concerns regarding Requirements R1 and R1.1 of the
Reliability Standard.\17\ Specifically, the Final Rule explained

that, consistent with the Final Blackout Report,\18\ Order No. 693
directed NERC to develop a modification to the TLR procedure that the
Commission accepted in IRO-006-3 that ``(1) includes a clear warning
that the TLR procedure is an inappropriate and ineffective tool to
mitigate actual IROL violations and (2) identifies in a Requirement the
available alternatives to mitigate an IROL violation other than use of
the TLR procedure.''\19\
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    \17\ Order No. 713, 124 FERC ] 61,071 at P 46-50.
    \18\ See U.S.-Canada Power System Outage Task Force, Final
Report on the August 14, 2003 Blackout in the United States and
Canada: Causes and Recommendations, at 163 (April 2004) (Final
Blackout Report), available at http://www.ferc.gov/industries/
electric/indus-act/blackout.asp. Recommendation 31 of the report
provides that NERC should ``[c]larify that the [TLR] process should
not be used in situations involving an actual violation of an
Operation Security Limit.''
    \19\ See Order No. 693, FERC Stats. & Regs. ] 31,242 at P 577,
964.
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    24. In its December 2007 filing, NERC stated that it modified the
Reliability Standard in response to the Order No. 693 directive. In
particular, the ERO modified Requirement R1.1 of IRO-006-4 to provide
that ``[t]he TLR procedure [for the Eastern Interconnection] alone is
an inappropriate and ineffective tool to mitigate an IROL violation due
to the time required to implement the procedure.'' (Emphasis added.)
    25. In Order No. 713, the Commission queried whether the language
of Requirements R1 and R1.1 are adequate to satisfy the concern of the
Final Blackout Report and Order No. 693 that the TLR procedure not be
used in response to an actual IROL violation. The Commission explained:

    An entity is not prevented from using the TLR procedure to avoid
a potential IROL violation before a violation occurs. If, while a
TLR procedure is in progress, an IROL violation occurs, it is not
necessary for the entity to terminate the TLR procedure. However,
the Commission believes that it is inappropriate and ineffective to
rely on the TLR procedure, even in conjunction with another tool, to
address an actual IROL violation.[\20\]
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    \20\ Order No. 713, 124 FERC ] 61,071 at P 49.

Accordingly, the Commission directed the ERO to explain Requirements R1
and R1.1 of IRO-006-4 in light of this concern.
b. NERC Responsive Filing
    26. NERC responds that the most immediate reliability goal is the
mitigation of the IROL violation. NERC states that there are four
acceptable options to respond to an IROL violation: inter-area
redispatch, intra-area redispatch, reconfiguration of the transmission
system, and voluntary or involuntary reductions in load. According to
NERC, Requirement R1.1 of IRO-006-4 identifies these options as
``reconfiguration, redispatch, or load shedding.''
    27. Further, NERC believes that taking concurrent action, i.e.,
using TLR in conjunction with one of the above operation actions, ``can
result in positive outcomes.'' \21\ NERC agrees with the Commission
that the use of TLR prior to an actual IROL violation is an acceptable
practice. NERC also agrees that a TLR should not be terminated
following the occurrence of an IROL violation if the TLR procedure was
already in progress. However, NERC points out that it is impossible to
decouple the TLR actions of the previous hour from those of the current
hour. According to NERC, the progressive nature of TLR requires
constant management to ensure that reliability and open access are
maintained. NERC maintains that the Commission should endorse a
situation where, on a continuing basis, a TLR can be reissued for a
constrained facility in order to assist in providing relief, in
addition to the more immediate operator actions taken to alleviate the
actual overload. NERC disagrees that all interchange transactions
should be frozen at current levels while any new transactions are held,
because this could result in aggravation of the IROL violation from an
increase in native load and/or parallel flows. For similar reasons,
NERC also believes it is inappropriate to let the curtailments issued
for the current hour expire and not reissue the TLR, because this
practice also could aggravate the IROL violation, as the single-hour
established curtailments would expire and transactions would be
reloaded.
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    \21\ NERC September 11, 2008 Response at 4.
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    28. NERC avers that the intent of the Commission's directive is
that, should an entity experience an actual IROL violation, that entity
should not invoke the TLR process with the belief that the IROL
violation will be mitigated by the TLR within an acceptable timeframe.
NERC contends, however, that any standard that would require a
reliability coordinator to explicitly not use TLR as one of the tools
it has in responding to an actual IROL violation could compromise
reliability, open access, or both. NERC states that it is appropriate
for an entity to use the TLR process in response to an actual IROL,
provided such use is a complementary action to other operator actions
employed to mitigate the IROL violation more expeditiously and, as
such, invoking TLR is not the only action taken.
    29. NERC provides examples of use of TLR in conjunction with other
acceptable options to provide a more rapid and effective return from
emergency conditions. For example, NERC states that if an entity
redispatches generation and invokes a TLR at the same time in response
to an actual IROL violation, that entity may utilize the generation to
respond immediately to mitigate the violation and bring the flow below
the IROL, then reduce the generation once the TLR is able to
effectively and more equitably address the issue.
c. Comments on NERC Responsive Filing
    30. Southern agrees with NERC's explanation regarding the ways in
which a reliability coordinator may use the TLR procedure. Southern
believes that the TLR procedure, when used in conjunction with
reconfiguration, redispatch, or load shedding, is an indispensable
means for providing relief for constrained facilities. Southern
comments that any revision to Reliability Standard IRO-006-4 should be
developed through the Reliability Standards development process.
    31. ISO/RTO Council comments that it generally agrees with the
sequencing of TLR procedures as explained by NERC. While ISO/RTO
Council supports limiting the wide-scale use of TLR as a congestion
management tool, it believes that the Commission's interpretation may
draw too fine a line in ``hard wiring'' a particular sequence of the
use of TLRs. It agrees with NERC that ``it is impossible to decouple
the actions of the previous hour from those of the current hour,'' and
urges the Commission to avoid placing artificial barriers in the
sequencing of the use of the TLR procedure.
d. Commission Determination
    32. The Commission is satisfied with the ERO's response. We agree
with the ERO that acceptable immediate actions to mitigate an IROL
violation may include one or more of the following: inter-area
redispatch, intra-area redispatch of generation, reconfiguration of the
transmission system, and voluntary or involuntary load reductions. When
an IROL violation occurs, the reliability coordinator should use the
above tools appropriate to the circumstance and duration of the actual
IROL violation for mitigation.
    33. We understand from its explanation that the ERO agrees that use
of the TLR procedure is not one of the acceptable immediate actions to
mitigate an IROL violation. Rather, use

of the TLR procedure is complementary to, and may be used in
conjunction with, the identified tools to mitigate an IROL violation,
provided that the action to implement the TLR procedure does not
interfere with or delay an entity taking the immediate action required
to mitigate the IROL violation.\22\ The Commission understands this is
the intent of the language in Requirement R1.1 that ``[t]he TLR
procedure alone is an inappropriate and ineffective tool to mitigate an
IROL violation due to the time required to implement the procedure.''
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    \22\ The ERO states that ``it is appropriate for an entity to
use the TLR process in response to an actual IROL, provided that it
is a complementary action to other operator actions employed to
mitigate the IROL violation more expeditiously and, as such,
invoking TLR is not the only action taken.'' NERC September 11, 2008
Response at 5 (emphasis added).
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    34. The Commission reiterates that the use of a TLR is not required
to be terminated following the occurrence of an IROL violation if the
TLR procedure was already in progress prior to exceeding the IROL.
Thus, if an IROL is exceeded after a TLR procedure is in progress, the
reliability coordinator does not need to revoke the TLR. Moreover, in
the event that a potential IROL violation progresses to an actual IROL
violation near the top of the hour and a TLR is already in progress, it
is acceptable for the reliability coordinator to reissue the TLR to
prevent reloading or exacerbating interchange schedules, while more
immediate actions are taken to relieve the IROL violation.
    35. During an actual IROL violation, the primary concern of the
reliability coordinator should be to mitigate the violation
immediately. Because the TLR procedure may take an extended time to
fully implement, it is not acceptable for a reliability coordinator to
invoke the TLR process with the belief that the IROL violation will be
mitigated by the TLR. Therefore, during an actual IROL violation, a
reliability coordinator should initiate more immediate actions to
relieve the IROL violation before initiating a TLR and at no point
should implementing a TLR divert operator resources or delay
implementation of more immediate IROL mitigation actions. In accord
with this understanding, we find Requirement R1.1 consistent with the
Final Blackout Report and Order No. 693.
    36. As discussed above, based on the ERO's response we believe that
our understanding of Requirement R1.1 comports with that of the ERO.
While IRO-006-4, Requirement R1.1, should be implemented and enforced
with the above understanding, we believe that the term ``alone'' in the
provision could be improved to more precisely convey that it is a
violation of Requirement R1.1 to rely on the TLR procedure when an
entity is in the process of mitigating an IROL violation and the entity
has not taken more immediate and effective means to achieve relief.
Accordingly, pursuant to section 215(d)(5) of the FPA, the Commission
directs the ERO to develop a modification of Requirement R1.1 with
respect to the term ``alone,'' consistent with this discussion.
2. Use of TLR Procedure Alone To Mitigate an IROL Violation
    37. In the NOPR, the Commission proposed to approve the Reliability
Standard based on the interpretation that using a TLR procedure alone
to mitigate an actual IROL violation is a violation of the Reliability
Standard.\23\
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    \23\ NOPR, FERC Stats. & Regs. ] 32,632 at P 48.
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a. Comments
    38. ISO/RTO Council objects to the Commission's proposal to approve
the proposed Reliability Standard IRO-006-4 based on the interpretation
that using a TLR alone to mitigate an IROL violation is a violation of
the Reliability Standard. ISO/RTO Council expresses concern that the
ERO has procedures for interpreting Reliability Standards and those
procedures may be eroded through after-the-fact Commission
interpretation without the opportunity for NERC stakeholder review.
ISO/RTO Council urges greater deference to following the Commission-
approved NERC process for the interpretation of Reliability Standards.
Should that process prove too time-consuming, ISO/RTO Council suggests
that the Commission revisit the process itself rather than undertaking
de facto amendments to it by interpreting the Reliability Standard in
ways not addressed through the NERC stakeholder process.
b. Commission Determination
    39. This issue raised in the NOPR is somewhat overtaken by the
further Commission inquiry in the Final Rule regarding the appropriate
tools for mitigating an IROL violation and our discussion immediately
above on this issue. As we state above, IRO-006-4, Requirement R1.1,
should be ``implemented and enforced'' based on our understanding in
this order of the issue.
    40. In any case, we adopt our NOPR proposal and approve Reliability
Standard IRO-006-4 with the understanding that using a TLR procedure to
mitigate an actual IROL violation is a violation of the Requirement
R1.1 of the Reliability Standard, as discussed above. While ISO/RTO
Council raises procedural concerns regarding the Commission's
interpretation, neither ISO/RTO Council nor any other commenter
expresses concern regarding the substance of the Commission's
interpretation. Further, the Commission previously has determined--or
interpreted--when a violation of a Reliability Standard would
occur.\24\
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    \24\ N. Am. Elec. Reliability Corp., 119 FERC ] 61,321, at P 10
(2007) (``A vegetation-related transmission outage would result in a
violation of Requirement R1, R2 or both.'').
---------------------------------------------------------------------------

3. Use of Demand-Side Management To Mitigate IROL Violations
    41. In a joint concurrence to the NOPR, then-Commissioner
Wellinghoff and Commissioner Kelly noted that demand-side management is
not explicitly included in Requirement R1.1 of IRO-006-4 among the
acceptable tools to mitigate an IROL violation. The concurrence noted
that nothing in the Reliability Standard precludes the use of demand-
side management that can quickly respond to emergencies and discussed
available demand-side management technologies currently used that may
be deployed as readily, if not faster, than involuntary load shedding.
The joint concurrence expressed a preference to expressly include
demand-side management among the list of tools to mitigate IROL
violations, set forth in Requirement R1.1.
a. Comments
    42. NERC comments that it did not intend the list of tools in
Requirement R1.1 for addressing IROL violations to be an exhaustive
list; effective demand-side response could also be considered.
    43. Alcoa comments that demand-side management should be included
in the list of alternatives to the TLR procedure in IRO-006-4. Alcoa
claims that its smelters have demonstrated an ability to curb demand to
assist in TLR efforts and alleviate IROL violations. In addition, Alcoa
claims that in some instances load may be able to respond to IROL
violations more quickly and effectively than generation reserves.
According to Alcoa, flexible loads served at transmission voltages are
most effective for immediate demand response to IROL violations.
    44. ISO/RTO Council comments that IRO-006-4 does not preclude
reliance on demand-side management that can respond quickly to
emergencies. It believes that the Reliability Standards should be
resource-neutral in their

application. ISO/RTO Council states that, consistent with Order No.
693, so long as a resource can address system conditions, it should be
recognized in the Reliability Standards as a tool upon which the system
operator can rely. ISO/RTO Council also notes initiatives by NERC and
NAESB to develop rules for classifying demand-side management and
identifying methods for measurement and verification.
b. Commission Determination
    45. It is clear from the comments of the ERO, Alcoa, and ISO/RTO
Council that the Reliability Standard includes effective demand-side
management as a tool to mitigate an IROL violation pursuant to
Requirement R1.1 of IRO-006-4. In its September 11, 2008 filing, the
ERO states that there are four acceptable options to respond to an IROL
violation: inter-area redispatch, intra-area redispatch,
reconfiguration of the transmission system, and voluntary or
involuntary reductions in load. The ERO further explains that the
reference in Requirement R1.1 to ``load shedding'' refers to voluntary
or involuntary reductions in load.\25\ Thus, as clarified by NERC,
Requirement R1.1 allows the use of effective demand-side management as
one tool to mitigate an IROL violation. The Commission will implement
and enforce this Reliability Standard as clarified by NERC.
---------------------------------------------------------------------------

    \25\ NERC September 11, 2008 Response at 4.
---------------------------------------------------------------------------

C. Violation Risk Factors

    46. In the NOPR, the Commission proposed to direct the ERO to
modify the violation risk factors assigned to Requirements R1 through
R4 by raising them to ``high.'' This proposal was based on the
Commission's guidelines for evaluating validity of violation risk
factor assignments.\26\ In particular, the Commission reasoned that a
``high'' violation risk factor assignment for Requirements R1 through
R4 is consistent with findings of the Final Blackout Report.\27\
---------------------------------------------------------------------------

    \26\ The guidelines are: (1) Consistency with the conclusions of
the Blackout Report; (2) consistency within a Reliability Standard;
(3) consistency among Reliability Standards; (4) consistency with
NERC's definition of the violation risk factor level; and (5)
treatment of requirements that co-mingle more than one obligation.
The Commission also explained that this list was not necessarily
all-inclusive and that it retains the flexibility to consider
additional guidelines in the future. A detailed explanation is
provided in North American Electric Reliability Corp., 120 FERC ]
61,145, at P 8-13 (2007).
    \27\ Recommendation 31 states, ``Clarify that the transmission
loading relief (TLR) process should not be used in situations
involving an actual violation or an Operation Security Limit.''
Final Blackout Report at 163.
---------------------------------------------------------------------------

1. Comments
    47. NERC, IESO, and ISO/RTO Council urge the Commission to adopt
the violation risk factors proposed by NERC. NERC contends that the
Commission's reliance on the violation risk factors for IRO-006-3,
Requirements R1 through R4, submitted in 2007 is not appropriate.\28\
NERC explains that the violation risk factors submitted in the current
proceeding for IRO-006-4 received significant industry review and
scrutiny, which was not the case with the 2007 submission.
---------------------------------------------------------------------------

    \28\ See NOPR, FERC Stats. & Regs. ] 32,632 at P 51 (noting that
the corresponding requirements in the earlier Commission-approved
version of the Reliability Standard were assigned a ``high''
violation risk factor).
---------------------------------------------------------------------------

a. Violation Risk Factors for Requirement R1
    48. NERC agrees with the Commission that Requirements R1.1 through
R1.3 are explanatory text and that a violation risk factor need not be
assigned to each subsection. However, NERC, ISO/RTO Council, and IESO
disagree with the Commission's proposal to direct the ERO to raise the
violation risk factor from ``medium'' to ``high.''
    49. Specifically, NERC and ISO/RTO Council disagree with the
Commission's statement that a ``high'' violation risk factor assignment
is consistent with the findings of the Final Blackout Report. According
to NERC, the main thrust of Recommendation 31 in the Final Blackout
Report (regarding the use of TLR in response to actual violations) has
been addressed in Requirement R1.1 of the Reliability Standard and does
not warrant a ``high'' violation risk factor designation. ISO/RTO
Council contends that the Final Blackout Report does not identify and
rank the associated risk of not implementing each recommendation. ISO/
RTO Council claims that the Final Blackout Report Recommendation 31
simply focuses on reliability coordinators using tools other than TLRs
for a real-time emergency.
    50. Further, NERC contends that IRO-006-4, Requirement R1 and its
sub-requirements are procedural in nature, because they focus on how
relief is achieved rather than on whether relief is achieved. NERC
recognizes that ``the result of an ineffective application of this
requirement could impact the electrical state of the grid.'' \29\
However, NERC posits that IRO-005-1, Requirement R5 is the principal
source of the reliability coordinator's obligation to relieve actual or
potential IROL violations. For these reasons, NERC believes Requirement
R1 merits a ``medium'' violation risk factor.
---------------------------------------------------------------------------

    \29\ NERC Comments at 19. Unless otherwise indicated, citations
to parties' comments refer to comments filed after the NOPR, prior
to the Final Rule.
---------------------------------------------------------------------------

    51. IESO agrees with NERC's assessment that Requirement R1 is
administrative in nature. IESO states that Requirement R1 provides the
initiating reliability coordinator options from which to choose to
relieve transmission constraints, and it becomes a reliability
requirement only when a reliability coordinator chooses an
interconnection-wide procedure as one of the means to relieve
transmission constraints. IESO explains that if a reliability
coordinator chooses other control actions but not an interconnection-
wide TLR procedure to prevent or mitigate an IROL violation, this
Reliability Standard will not apply, and the reliability coordinator
will not be subject to the requirements in the standard. Further, IESO
contends that if a reliability coordinator chooses to apply an
interconnection-wide procedure and the requirements stipulated therein
are not complied with, there is a potential risk on the control and
operation of the system, because non-compliance with the TLR procedure
may affect other actions that are also being applied to prevent or
mitigate an IROL violation.
    52. IESO and ISO/RTO Council disagree with the Commission's
statement that, if the reliability coordinator chooses an unapproved
and ineffective procedure for relief or fails to choose a procedure
entirely, potential or actual IROL violations will not be mitigated as
intended by the reliability coordinator.\30\ According to IESO and ISO/
RTO Council, with or without the interconnection-wide relief procedure,
reliability coordinators and transmission operators are required by
other Reliability Standards such as TOP-002, TOP-004, and IRO-005 to
apply local control actions and procedures to prevent and mitigate SOL
and IROL violations.
---------------------------------------------------------------------------

    \30\ See NOPR, FERC Stats. & Regs. ] 32,632 at P 52.
---------------------------------------------------------------------------

    53. ISO/RTO Council also favors a ``medium'' violation risk factor
assignment for Requirement R1, stating that interconnection-wide
procedures are only one tool in the toolbox to restore system
integrity.
b. Violation Risk Factors for Requirement R2
    54. NERC does not believe that a reliability coordinator could
successfully implement a local procedure to which the particular
transmission operator is not a party. In any event, NERC does not
believe that

the implementation of such a procedure would in itself create a
``high'' reliability risk. NERC states that if the reliability
coordinator were able to achieve the relief, then it would be
considered as having the lesser infraction of using the wrong tools to
achieve the correct results. Further, it states that if such a
procedure did not provide the required relief, the reliability
coordinator would be in violation of IRO-005-1, Requirement R5. NERC
claims this requirement is focused on ``how'' the relief is provided,
not ``whether'' the relief is provided. In addition, NERC states that
the use of a local procedure is implemented at the discretion of the
reliability coordinator and is not obligatory. Accordingly, NERC
believes that a violation risk factor of ``lower'' is appropriate.
    55. IESO argues the intent of Requirement R2 is to ensure that a
reliability coordinator who initiates actions to relieve transmission
constraints in a transmission operator's area applies the actions that
are either totally local to the transmission operator's area or which
have been developed by the transmission operator jointly with other
transmission operators. IESO states that choosing which procedures to
relieve transmission constraints is an administrative requirement since
the reliability coordinator, having the authority to ensure wide area
reliability, may apply any procedures that it deems necessary to
relieve transmission constraints. IESO contends that in the event the
reliability coordinator applies a relief procedure to which the
constrained transmission operator is not a party, it should not be a
presumption that prevention or mitigation of an IROL violation will not
be achieved since the reliability coordinator is obligated to ensure
operating reliability through compliance with IRO-005-1. For these
reasons, IESO believes that Requirement R2 is administrative and
deserves a ``lower'' violation risk factor.
    56. IESO disagrees with the Commission assessment that
``[v]iolation risk factors should not be assigned differently for
requirements in separate Reliability Standards based on compliance with
another Reliability Standard,'' on the basis that ``[t]wo requirements
either achieve separate reliability goals and, therefore, violation of
them represents independent risks, or two requirements share the same
reliability goal.'' \31\ IESO states that, while the IRO-005-1
requirements and the TLR requirements share the same reliability goal,
the latter is in fact subordinate to the former. Thus, IESO maintains
that there should not be two simultaneous ``high'' risk penalties
assessed for a reliability coordinator for failing to comply with the
TLR procedure of Requirements R1 or R2 and for failing to prevent or
mitigate an IROL violation as required in IRO-005-1.
---------------------------------------------------------------------------

    \31\ IESO Comments at 8 (quoting NOPR, FERC Stats. & Regs. ]
32,632 at P 53).
---------------------------------------------------------------------------

c. Violation Risk Factors for Requirement R3
    57. NERC maintains that Requirement R3 is focused on the procedural
aspects of the Reliability Standard, i.e., how the relief is provided
rather than whether the relief was provided. NERC argues that if the
entity is able to achieve the relief through other means that were not
pre-approved, then it would have committed an administration violation
of using the wrong tools to achieve the correct results. According to
NERC, if such a procedure did not provide the required relief, the
reliability coordinator would be in violation of IRO-005-1, Requirement
R5. For reasons similar to those provided for Requirement R2, IESO
agrees with NERC that Requirement R3 is administrative and deserves a
``lower'' violation risk factor.
d. Violation Risk Factors for Requirement R4
    58. NERC claims that a violation of Requirement R4 is ``a specific
kind of violation of the INT family of Reliability Standards that is
being caused by a reliability coordinator's inaction, resulting in an
imbalance in one or both of the interconnections involved.'' \32\ NERC
comments that Requirement R4 complements the INT group of Reliability
Standards in the same fashion as Requirement R5, which the Commission
supported with a violation risk factor of ``medium.'' IESO concurs with
NERC's assignment of a ``medium'' violation risk factor to Requirement
R4. IESO reasons that complying with the provisions of the
interconnection-wide procedure of the initiating reliability
coordinator is no more stringent than complying with the request for
relief based on the TLR procedure within the same interconnection, the
latter being the requirement in R1.
---------------------------------------------------------------------------

    \32\ NERC Comments at 21-22.
---------------------------------------------------------------------------

2. Commission Determination on Violation Risk Factors
    59. For the reasons stated in the NOPR and as discussed below, the
Commission directs the ERO to modify the violation risk factors of
Requirements R1 through R4 of IRO-006-4 to ``high.''
    60. The Commission disagrees with NERC and others and finds that it
is appropriate to use the Final Blackout Report as a basis for setting
violation risk factors of the proposed Reliability Standard at ``high''
for several reasons. The Final Blackout Report is the result of the
U.S-Canada Task Force's investigation of the August 14, 2003 blackout
where the Task Force identified contributing factors and causes that
put the Bulk-Power System at risk for that event. Specifically, the
Final Blackout Report identified an attempt to use the TLR process to
address transmission power flows without recognizing that the
imposition of a TLR procedure would not solve the problem as one
contributing cause for the initiation of the blackout of August 2003.
Based on its findings, the Task Force developed recommendations to
reduce the possibility of future outages and to reduce the scope of
future blackouts that may nonetheless occur.\33\ Thus, the Task Force
developed Recommendation No. 31 to prevent the initiation of a TLR
procedure during an actual violation of an SOL.\34\ Since the Final
Blackout Report was developed to document the August 14, 2003
blackout's contributing factors and causes, which include specific
violations of then voluntary reliability policies, guidelines, and
standards, the Commission believes it is appropriate to use the
findings of the Final Blackout Report as one of the guidelines for the
determination of a requirement's violation risk factor. Specifically,
the Commission believes the findings of the Final Blackout Report are
particularly relevant in the determination of violation risk factors of
then-voluntary reliability policies, guidelines, and standards
identified as causes and factors of the August 14, 2003 blackout that
the ERO proposes as mandatory Reliability Standards, such as IRO-006-4.
The Commission also disagrees for the same reasons with commenters that
argue the Final Blackout Report does not identify and rank the
associated risk of not implementing each recommendation.
---------------------------------------------------------------------------

    \33\ Final Blackout Report at 20.
    \34\ Id. at 163.
---------------------------------------------------------------------------

    61. While we agree that Requirement R.1.1 discourages the use of a
TLR to mitigate a real-time IROL violation, Requirement R1.1, is merely
explanatory text. It is Requirement R1 that establishes that the
reliability coordinator shall choose one or more of the procedures,
listed as sub-requirements, to provide the appropriate

transmission relief. The selection of a procedure to provide relief to
address a potential or actual SOL or IROL violation is directly
relevant to Final Blackout Report Recommendation No. 31. If an
inappropriate procedure is selected in an attempt to mitigate an IROL,
the Bulk-Power System is vulnerable to cascading outages, as was the
case on August 14, 2003.
    62. The Commission is not persuaded by NERC's argument relative to
``using the wrong tools to achieve the correct results'' in the
assignment of a requirement's violation risk factor. Contrary to this
argument, the Commission has recognized that there may be some
Reliability Standards where the means, or the ``how,'' is inextricably
linked to the effectiveness of the Reliability Standard.\35\ We find
that this is the case here. The Commission has explained that the
inclusion of implementation practices within requirements of such a
standard is to reduce uncertainty and further objectives that foster
reliability which, if violated, would pose increased reliability risk
to the Bulk-Power System.\36\
---------------------------------------------------------------------------

    \35\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, at P 260; see also id., Order No. 672-A,
FERC Stats. & Regs. ] 31,212 (2006).
    \36\ N. Am. Elec. Reliability Corp., 121 FERC ] 61,179, at P 15
(2007).
---------------------------------------------------------------------------

    63. Similarly, NERC's argument that, if the reliability coordinator
were able to achieve the relief desired without complying with
Requirement R1, it would be considered as having the lesser infraction
of using the wrong tools to achieve the correct results is also flawed.
The purpose of the violation risk factor is to accurately portray the
risk a violation poses to the Bulk-Power System,\37\ notwithstanding a
violator's avoidance of reliability problems in a particular case by
using an unreliable operation. This Commission determination is
relevant to arguments that a ``high'' violation risk factor is not
appropriate because the subject requirement overlaps other
requirements, duplicates other requirements, or could be implemented by
alternative means. The Commission has previously determined that NERC
should address those issues through the Reliability Standard
development process.\38\
---------------------------------------------------------------------------

    \37\ Id. P 16.
    \38\ Id. P 39.
---------------------------------------------------------------------------

    64. The Commission also disagrees with the characterization of
Requirements R1, R2, and R3 as procedural choices without reliability-
related consequences. For example, failure to implement Requirement R1,
i.e., failure to select one or more procedures to provide transmission
relief, is not just a procedural or administrative choice; it is a
decision that has the potential to place the Bulk-Power System at risk
of cascading outages. Although commenters argue that a violation of
Requirement R2 is essentially administrative in nature and that the
prevention or mitigation of the potential or actual SOL or IROL may be
achieved through compliance with another Reliability Standard, which
would justify a ``lower'' violation risk factor, the Commission
disagrees. Requirements R1 through R4 require that a reliability
coordinator choose and follow the appropriate procedure to provide
relief. If the reliability coordinator chooses an unapproved and/or
ineffective procedure for relief or fails to choose a procedure
entirely, potential or actual IROL violations will not be mitigated as
intended by the reliability coordinator. Therefore, the Commission
finds that violation of Requirements R1 through R4 present a high
reliability risk to Bulk-Power System. Assigning a ``high'' violation
risk factor to Requirements R1 through R4 is consistent with the Final
Blackout Report.
    65. A violation risk factor represents the reliability risk a
violation of that requirement presents to the Bulk-Power System.
Violation risk factors should not be assigned differently for
requirements in separate Reliability Standards based on compliance with
another standard. This assessed reliability risk is independent and not
contingent upon compliance with other requirements of Reliability
Standards. While the Commission recognizes the complementary nature of
proposed Reliability Standard IRO-006-4, Requirement R1 and Reliability
Standard IRO-005-1, Requirement R5, the fact that requirements may
share the same reliability objective as another requirement does not
justify lowering one or more of the requirements' violation risk
factors. In fact, the Commission expects the assignment of violation
risk factors corresponding to requirements that address similar
reliability goals in different Reliability Standards to be treated
comparably.\39\ The Commission notes that Reliability Standard IRO-005-
1, Requirement R5, is assigned a ``high'' violation risk factor.
---------------------------------------------------------------------------

    \39\ N. Am. Elec. Reliability Corp., 119 FERC ] 61,145, at P 25
(2007).
---------------------------------------------------------------------------

    66. Further, the argument that a ``lower'' violation risk factor
assigned to Requirement R1 is appropriate since Requirement R1 is
administrative in nature (because it provides the initiating
reliability coordinator with options to choose among available
procedures and only becomes a reliability requirement when a
reliability coordinator chooses an interconnection-wide procedure) is
flawed. First, the fact that a requirement provides ``options'' does
not automatically make that requirement administrative. It is the
potential reliability risks the failure to take options mandated by the
requirement presents to the Bulk-Power System that determines that
requirement's violation risk factor. Second, requirements become
mandatory and enforceable reliability requirements only after
Commission approval and not after any action, or inaction, by an
applicable entity.
    67. For the same reasons explained above, the Commission disagrees
with comments that Requirement R3 focuses on procedural aspects of the
Reliability Standard founded on the arguments that the requirement
related to ``how'' the relief is provided rather than ``whether'' the
relief was provided, where the ``wrong tools'' were used to achieve the
``correct results.'' Even if an entity, having violated a Reliability
Standard, achieves correct results, the entity's success should be
attributed to a matter of chance and may be more risky than the
operation set forth in the Reliability Standard.
    68. IESO's comment that there should not be two simultaneous
``high'' risk penalties assessed to a reliability coordinator who fails
to comply with the TLR procedure of Requirements R1 and R2 is outside
the scope of this proceeding. The determination of monetary penalties
for a violation of a requirement is a compliance issue, which is best
addressed in the context of a compliance proceeding.\40\
---------------------------------------------------------------------------

    \40\ We note that section 3.10 of NERC's Sanction Guidelines
addresses multiple violations related to a single act or common
incidence of noncompliance.
---------------------------------------------------------------------------

    69. We do not agree that a violation of Requirement R4 is a
specific type of violation of the INT Reliability Standards as NERC and
IESO suggest. Requirement R4 requires a reliability coordinator to
comply with interconnection-wide curtailment procedures whereas
Requirement R5 requires reliability coordinators and balancing
authorities to adhere to INT standards that largely specify interchange
scheduling procedures. Failure to implement curtailment procedures
poses a higher reliability risk, since it may place the Bulk-Power

System at risk of cascading outages, than failure to implement
scheduling procedures; therefore, it should receive a ``high''
violation risk factor.
3. Commission Determination on Violation Severity Levels
    70. The ERO's December 21, 2007 filing included proposed violation
severity levels corresponding to the requirements of IRO-006-4.
Violation severity levels, which the ERO or the Regional Entity will
apply to establish an initial base penalty range when assessing a
penalty for the violation of a Reliability Standard, constitutes a
post-violation measurement of the degree to which a requirement was
violated.\41\ The Commission accepts the violation severity levels
proposed by the ERO that correspond to the Requirements of Reliability
Standard IRO-006-4.
---------------------------------------------------------------------------

    \41\ See N. Am. Elec. Reliability Corp., 123 FERC ] 61,284, at P
3 (Violation Severity Levels Order), order on reh'g, 125 FERC ]
61,212 (2008) (extending compliance date).
---------------------------------------------------------------------------

    71. Further, in the Violation Severity Levels Order, the Commission
directed the ERO to submit a compliance filing certifying that it has
reviewed each of the violation severity level assignments for
consistency with certain guidelines set forth in that order.\42\ The
Commission also directed that the ERO either validate the existing
violation severity level designations or propose revisions to specific
approved violation severity level assignments where the ERO determines
that such assignments do not meet the specified guidelines. Consistent
with the Violation Severity Levels Order, the Commission now directs
the ERO to review the violation severity levels for IRO-006-4. The ERO
must include in the compliance filing required by Ordering Paragraph
(E) of the Violation Severity Levels Order a certification that it has
reviewed each violation severity level assignment corresponding to the
requirements of IRO-006-4 for consistency with certain guidelines
(specifically, guidelines 2b, 3, and 4), validating the assignments
that meet the guidelines and proposing revisions to those that fail to
meet the guidelines.
---------------------------------------------------------------------------

    \42\ See Violation Severity Level Order, 123 FERC ] 61,284 at P
41 and Ordering Paragraph (E).
---------------------------------------------------------------------------

    72. Accordingly, with respect to the violation risk factors and
severity levels, we approve IRO-006-4 as mandatory and enforceable. In
addition, we direct the ERO submit a compliance filing within 60 days
that revises violation risk factors to ``high'' for Requirements R1
through R4. The Commission approves the proposed violation severity
levels and requires the ERO to submit a compliance filing, as discussed
above.

III. Information Collection Statement

    73. The Office of Management and Budget (OMB) regulations require
that OMB approve certain reporting and recordkeeping (collections of
information) imposed by an agency.\43\ The information contained here
is also subject to review under section 3507(d) of the Paperwork
Reduction Act of 1995.\44\ As stated above, the Commission previously
approved, in Order No. 693, Reliability Standard IRO-006, which is the
subject of this supplemental final rule. In the NOPR, the Commission
explained that the modifications to the Reliability Standard are minor;
therefore, they do not add to or increase entities' reporting burden.
Thus, in the NOPR, the Commission stated that the modified Reliability
Standard does not materially affect the burden estimates relating to
the earlier version of Reliability Standard IRO-006 presented in Order
No. 693.\45\
---------------------------------------------------------------------------

    \43\ 5 CFR 1320.11.
    \44\ 44 U.S.C. 3507(d).
    \45\ See Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1905-
07. The NOPR, FERC Stats. & Regs. ] 32,632 at P 76-78, provided a
detailed explanation why each modification has a negligible, if any,
effect on the reporting burden.
---------------------------------------------------------------------------

    74. In response to the NOPR, the Commission received no comments
concerning its estimate for the burden and costs and therefore uses the
same estimate here.
    Title: Modification of Interchange and Transmission Loading Relief
Reliability Standards; and Electric Reliability Organization
Interpretation of Specific Requirements of Four Reliability Standards.
    Action: Proposed Collection.
    OMB Control No.: 1902-0244.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This Supplemental Final Rule approves
one modified Reliability Standard that pertains to transmission loading
relief procedures. The Supplemental Final Rule finds the Reliability
Standard just, reasonable, not unduly discriminatory or preferential,
and in the public interest.
    75. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, Attn:
Michael Miller, Office of the Executive Director, 888 First Street,
NE., Washington, DC 20426, Tel:<PHONE_NUMBER>, Fax:<PHONE_NUMBER>, e-
mail<EMAIL_ADDRESS>or by contacting: Office of Information
and Regulatory Affairs, Attn: Desk Officer for the Federal Energy
Regulatory Commission (Re: OMB Control No. 1902-0244), Washington, DC
20503, Tel:<PHONE_NUMBER>, Fax:<PHONE_NUMBER>, e-mail: oira_
<EMAIL_ADDRESS>
IV. Environmental Analysis

    76. 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.\46\ 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.\47\ The actions proposed
herein fall within this categorical exclusion in the Commission's
regulations.
---------------------------------------------------------------------------

    \46\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \47\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    77. The Regulatory Flexibility Act of 1980 (RFA) \48\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and that minimize
any significant economic impact on a substantial number of small
entities. The Small Business Administration's Office of Size Standards
develops the numerical definition of a small business. (See 13 CFR
121.201.) For electric utilities, 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. The RFA is not implicated by this Final Rule because
the minor modifications and interpretations discussed herein will not
have a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------

    \48\ 5 U.S.C. 601-12.
---------------------------------------------------------------------------

VI. Document Availability

    78. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to

view and/or print the contents of this document via the Internet
through FERC's Home Page (http://www.ferc.gov) and in FERC's Public
Reference Room during normal business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    79. From FERC's Home Page on the Internet, this information is
available on eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
    80. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or e-mail at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. E-mail the Public Reference Room at
<EMAIL_ADDRESS>
VII. Effective Date and Congressional Notification

    81. The Supplemental Final Rule is effective April 23, 2009. 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.

List of Subjects in 18 CFR Part 40

    Electric power, Electric utilities, Reporting and recordkeeping
requirements.

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

Appendix A--NOPR Commenters \49\
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    \49\ An asterisk (*) indicates that the commenter addressed
Reliability Standard IRO-006-4.
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Alcoa Inc. (Alcoa)*
Constellation Energy Commodities Group, Inc. (Constellation)*
Independent Electricity System Operator of Ontario (IESO)*
ISO/RTO Council*
ITCTransmission; Michigan Electric Transmission Company, LLC; and
ITC Midwest LLC
Lafayette Utilities and the Louisiana Energy and Power Authority
(Lafayette and LEPA)*
North American Electric Reliability Corp. (NERC)*
NRG Companies (NRG)*
Southern Company Services, Inc. (Southern)

Appendix B--Comments in Response to NERC's September 11, 2008 Filing
\50\
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    \50\ M-S-R Public Power Agency filed a motion to intervene
without comments.
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ISO/RTO Council
NRG
Southern

[FR Doc. E9-6416 Filed 3-23-09; 8:45 am]

BILLING CODE 6717-01-P