[Federal Register Volume 85, Number 25 (Thursday, February 6, 2020)]
[Proposed Rules]
[Pages 6831-6838]
[FR Doc No: 2020-02171]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 85, No. 25 / Thursday, February 6, 2020 /
Proposed Rules

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket Nos. RM19-16-000 and RM19-17-000]

Electric Reliability Organization Proposal To Retire Requirements
in Reliability Standards Under the NERC Standards Efficiency Review

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes
to approve the retirement of 74 Reliability Standard requirements. The
North American Electric Reliability Corporation (NERC), the Commission-
certified Electric Reliability Organization, submitted the proposed
retirements for Commission approval. The Commission also proposes to
remand one requirement submitted for retirement by NERC and seeks
additional information from NERC on two requirements submitted for
retirement.

DATES: Comments are due April 6, 2020.

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

FOR FURTHER INFORMATION CONTACT: Andres Lopez (Technical Information),
Office of Electric Reliability, Division of Reliability Standards and
Security, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, Telephone:<PHONE_NUMBER>. Mark Bennett (Legal
Information), Office of the General Counsel, Federal Energy Regulatory
Commission, 888 First Street NE, Washington, DC 20426, Telephone: (202)
502-8524.

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA),\1\
the Commission proposes to approve to retire 74 of the 77 Reliability
Standard requirements requested for retirement by the North American
Electric Reliability Corporation's (NERC).\2\ As explained in NERC's
two petitions, the 74 requirements we propose to approve: (1) Provide
little or no reliability benefit; (2) are administrative in nature or
relate expressly to commercial or business practices; or (3) are
redundant with other Reliability Standards. NERC's justifications for
retiring the 74 requirements are largely consistent with the
Commission-approved bases for retiring Reliability Standard
requirements articulated in prior proceedings.\3\ The Commission also
proposes to approve the associated violation risk factors, violation
severity levels, implementation plan, and effective dates proposed by
NERC.
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    \1\ 16 U.S.C. 824o(d)(2).
    \2\ The proposed retirements will result in the elimination of
10 Reliability Standards and the creation of modified versions of
another seven Reliability Standards.
    \3\ North American Electric Reliability Corp., 138 FERC ]
61,193, at P 81 (March 2012 Order), order on reh'g and
clarification, 139 FERC ] 61,168 (2012); Electric Reliability
Organization Proposal to Retire Requirements in Reliability
Standards, Order No. 788, 145 FERC ] 61,147, at P 1 (2013).
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    2. The Commission believes that the proposed retirements will
further the efficiency of the Reliability Standards program by reducing
duplicative or otherwise unnecessary regulatory burden. Further, we
agree with NERC that the retirement of the Reliability Standard
provisions will benefit overall reliability by allowing registered
entities to focus their resources on complying with those Reliability
Standard requirements that more effectively promote the reliable
operation and planning of the nation's bulk-power system.\4\
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    \4\ See NERC, Docket No. RM19-17-000, Petition at 7.
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    3. With respect to other requirements that NERC seeks to retire,
the Commission seeks more information regarding NERC's justification
for retiring Reliability Standard FAC-008-3, Requirements R7 and R8. As
discussed below, NERC's petition avers that the two requirements are
redundant of other Reliability Standards, but NERC does not explain how
certain elements of these requirements are redundant. The Commission's
final determination on the retirement of these two requirements will be
based on the comments received from NERC and others.
    4. In addition, pursuant to section 215(d)(4) of the FPA, the
Commission proposes to remand Reliability Standard VAR-001-6.\5\ The
new version of the Reliability Standard would eliminate Requirement R2
from currently-effective Reliability Standard VAR-001-5, which requires
transmission operators to schedule sufficient reactive resources to
regulate voltage levels under normal and contingency conditions. As
discussed below, we disagree with NERC's justification for retirement
that Requirement R2 is redundant or not necessary for reliability.
Accordingly, we propose to remand Reliability Standard VAR-001-6 in
order to retain this requirement.
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    \5\ 16 U.S.C. 824o(d)(4).
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I. Background

A. Section 215 of the FPA

    5. Section 215 of the FPA requires the Commission-certified
Electric Reliability Organization (ERO) to develop mandatory and
enforceable Reliability Standards, subject to Commission review and
approval. Once approved, the Reliability Standards may be enforced in
the United States by the ERO subject to Commission oversight, or by the
Commission independently.\6\ Pursuant to the requirements of FPA
section 215, the Commission established a process to select and certify
an ERO \7\

and, subsequently, certified NERC as the ERO.\8\
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    \6\ Id. 824o(e)(3).
    \7\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, 114
FERC ] 61,104, order on reh'g, Order No. 672-A, 114 FERC ] 61,328
(2006).
    \8\ North American Electric Reliability Corp., 116 FERC ]
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006),
aff'd sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
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B. Prior Retirements of Reliability Standard Requirements

    6. In the March 2012 Order, the Commission observed that NERC's
compliance program could be made more efficient by removing existing
requirements deemed unnecessary for reliability.\9\ The Commission
explained that if NERC believes certain Reliability Standards or
requirements should be revised or removed, ``we invite NERC to make
specific proposals to the Commission identifying the Standards or
requirements and setting forth in detail the technical basis for its
belief.'' \10\ Further, the Commission encouraged NERC ``to propose
appropriate mechanisms to identify and remove from the Commission-
approved Reliability Standards unnecessary or redundant requirements.''
\11\
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    \9\ March 2012 Order, 138 FERC ] 61,193 at P 81.
    \10\ Id.
    \11\ Id.
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    7. In response, in February 2013, NERC proposed to retire 34
requirements within 19 Reliability Standards based on the justification
that the requirements ``are redundant or otherwise unnecessary'' and
that ``violations of these requirements . . . pose a lesser risk to the
reliability of the Bulk-Power System.'' \12\ NERC explained that the
proposed retirements were based upon three major criteria: (1) Whether
a proposed retirement would create a reliability gap; (2) whether the
requirement in question is administrative; involves data collection,
retention, documentation, periodic updates or reporting; is a
commercial or business practice; or is redundant; and (3) consideration
of responses to seven questions regarding the proposed retirement,
including whether the requirement was part of a ``find, fix and track''
filing, the requirement's violation risk factor level, and whether the
requirement is part of on-going standards development project.\13\
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    \12\ NERC, Petition, Docket No. RM13-8-000, at 2 (filed Feb. 28,
2013).
    \13\ Id. at 4.
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    8. On November 21, 2013, the Commission approved the retirements
that NERC proposed, and determined that the retirements ``meet the
benchmarks'' set forth in the March 2012 Order that ``requirements
proposed for retirement either: (1) Provide little protection for Bulk-
Power System reliability; or (2) are redundant with other aspects of
the Reliability Standards.'' \14\
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    \14\ Electric Reliability Organization Proposal to Retire
Requirements in Reliability Standards, Order No. 788, 145 FERC ]
61,147 (2013).
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C. NERC Petitions

1. NERC Standards Efficiency Review Project
    9. NERC states that the proposed retirements are the product of its
Standards Efficiency Review (SER) Project. NERC explains that the SER
Project began in 2017 ``to achieve [NERC's] long-term strategic goal of
establishing risk-based controls to minimize [Bulk-Power System]
reliability risk while also driving operational efficiencies and
effectiveness.'' \15\ NERC states that in Phase 1 of the SER Project,
teams of industry experts conducted a risk-based analysis of non-CIP
Reliability Standards.\16\ The purpose of this review, according to
NERC, was ``to identify Reliability Standard requirements that provide
little or no benefit to reliability and should be retired.'' \17\ NERC
maintains that, unlike the periodic reviews \18\ of Reliability
Standards performed by NERC pursuant to the NERC Rules of Procedure,
the SER Project involved ``exploring the relationships between the
different Reliability Standards in a deeper way than would be feasible
during a targeted periodic review . . . [and] allowed NERC to identify
requirements that are not necessary for reliability or that are
redundant to other requirements.'' \19\
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    \15\ Docket No. RM19-16-000 Petition at 3; Docket No. RM19-17-
000 Petition at 4.
    \16\ NERC states that Phase 2 of the SER Project will ``consider
recommendations for Reliability Standard revisions that would
further improve the efficiency of the body of NERC Reliability
Standards, such as through consolidation of Reliability Standard
requirements . . . [and will] consider recommendations for
standards-based improvements that would further reduce
inefficiencies and promote effectiveness.'' Docket No. RM19-16-000
Petition at 6-7; Docket No. RM19-17-000 Petition at 7.
    \17\ Docket No. RM19-16-000 Petition at 5; Docket No. RM19-17-
000 Petition at 6.
    \18\ The NERC Rules of Procedure require a periodic review of
each Reliability Standard; and they provide for a five-year cyclical
review of Reliability Standards approved by the American National
Standards Institute (ANSI) and ten-year cyclical review for
Reliability Standards not approved by ANSI. See NERC Rules of
Procedure, Section 317 and Appendix 3A (Standards Process Manual),
section 13.0.
    \19\ Docket No. RM19-16-000 Petition at 5; Docket No. RM19-17-
000 Petition at 6.
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    10. NERC contends that the SER Project ``was conducted in an open
and transparent manner, with broad industry participation.'' \20\ NERC
states that it initiated the standards development process to consider
the retirement recommendations generated by the SER Project.
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    \20\ Docket No. RM19-16-000 Petition at 5-6; Docket No. RM19-17-
000 Petition at 7.
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2. IRO, TOP and VAR Petition (Docket No. RM19-16-000)
    11. On June 7, 2019, in Docket No. RM19-16-000, NERC submitted for
Commission approval new versions of three Reliability Standards: IRO-
002-7 (Reliability Coordination--Monitoring and Analysis), TOP-001-5
(Transmission Operations), and VAR-001-6 (Voltage and Reactive
Control). NERC explains that approval of the new versions would result
in the retirement of four requirements from the currently-effective
versions of the Reliability Standards.\21\ Three of the existing
requirements in Reliability Standards IRO-002 and TOP-001 require the
reliability coordinator, transmission operator, and balancing authority
to have data exchange capabilities with entities having data needed to
perform operational planning analyses and to develop operating plans
for next-day operations. The fourth requirement, in Reliability
Standard VAR-001, requires the transmission operator to schedule the
reactive resources needed to regulate voltage levels under normal and
contingency conditions. NERC contends that these four requirements are
redundant and not necessary ``because the performance required by these
requirements is inherent to the performance of other Reliability
Standard requirements.'' \22\
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    \21\ The proposed revised versions of the IRO, TOP and VAR
Reliability Standards are not attached to the NOPR. The complete
text of the Reliability Standards is available on the Commission's
eLibrary document retrieval system in Docket No. RM19-16-000 and is
posted on the ERO's website, http://www.nerc.com.
    \22\ NERC IRO, TOP and VAR Petition at 7.
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    12. In particular, NERC maintains that the data exchange capability
requirement in Reliability Standard IRO-002-5, Requirement R1 is
covered by Reliability Standard IRO-008-2, Requirement R1, which
obligates the reliability coordinator to perform operational planning
analyses to assess whether the planned operations for the next-day will
exceed System Operating Limits and Interconnection Reliability
Operating Limits within its Wide Area. NERC asserts that ``to perform
the required operational planning analyses, the Reliability Coordinator
must have the data it deems necessary from those entities that possess
it.'' \23\
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    \23\ Id. at 14-15.
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    13. Additionally, regarding data exchange, NERC cites Reliability
Standard IRO-010-2 (Reliability Coordinator Data Specification and

Collection) and its stated purpose of preventing instability,
uncontrolled separation, or cascading outages ``by ensuring the
Reliability Coordinator has the data it needs to monitor and assess the
operation of its Reliability Coordinator Area.'' \24\ NERC states that
under Reliability Standard IRO-010-2, Requirements R1, R2 and R3, the
reliability coordinator must specify the data necessary for it to
perform its operational planning analyses and provide the
specifications to the entities from which it needs data who then must
comply with the data request using a mutually agreeable format and
security protocols.
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    \24\ Id. at 15.
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    14. NERC observes that the performance of the requirements it cites
is premised on the existence of data exchange capabilities,
``regardless of whether a separate requirement expressly requires the
Reliability Coordinator to have data exchange capabilities in place.''
\25\ NERC asserts that Reliability Standard IRO-002-5, Requirement R1
provides no additional reliability benefit and ``is therefore
unnecessary and redundant and should be retired.'' \26\
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    \25\ Id.
    \26\ Id.
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    15. NERC likewise states that Requirements R19 and R22 of
Reliability Standard TOP-001-4 merely require transmission operators
and balancing authorities respectively to have data exchange
capabilities with entities from which they need data to perform
operational planning analyses (transmission operators) and next-day
Operating Plans (balancing authorities). NERC maintains, however, that
Reliability Standard TOP-002-4 Requirement R1, requires a transmission
operator to perform an operational planning analyses to determine
whether next-day operations within its area will exceed System
Operating Limits. Also, NERC states that Requirement R4 requires each
balancing authority to have a next-day Operating Plan addressing
expected generation resource commitment and dispatch, Interchange
scheduling and related matters. NERC asserts that to satisfy these
requirements, ``each Transmission Operator and Balancing Authority must
have the data it deems necessary from those entities that possess it.''
\27\
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    \27\ Id. at 16.
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    16. NERC also cites to Reliability Standard TOP-003-3 (Operational
Reliability Data) whose purpose is ``to ensure that the Transmission
Operator and Balancing Authority have data needed to fulfill their
operational and planning responsibilities.'' NERC contends that the
requirements in Reliability Standard TOP-003-3 largely mirror the
requirements in Reliability Standard IRO-010-2 discussed above, and
thus, as with Reliability Standard IRO-010-2, transmission operators
and balancing authorities must have data exchange capabilities with its
reporting entities to satisfy the requirements of Reliability TOP-003-
3. Therefore, NERC contends that Reliability Standards TOP-001-4,
Requirements R19 and R22 are unnecessary and redundant and should be
retired.
    17. With respect to proposed Reliability Standard VAR-001-6, NERC
maintains that the revised version retires existing requirement R2,
which requires each transmission operator to schedule ``sufficient
reactive resources to regulate voltage levels under normal and
Contingency conditions.'' NERC contends that the reliability need for
sufficient reactive resources is adequately addressed by existing
requirements in several other Reliability Standards and, therefore, is
unnecessary. In particular, NERC states that Reliability Standards TOP-
001-4, Requirement R10 and TOP-002-4, Requirement R1, require
transmission operators to determine System Operating Limits and perform
an operational planning analyses to assess whether planned next-day
operations will exceed those limits and plan for addressing them. NERC
explains that Reliability Standard TOP-001-4 requires each transmission
operator to perform Real-time Assessments every 30 minutes to identify
possible System Operating Limit exceedances and initiate its Operating
Plan to mitigate them. NERC states that ``Operating Plans address the
use of reactive resources if needed to operate within System Operating
Limits, as well as any other adjustments that may be needed.'' \28\
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    \28\ Id. at 20.
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    18. NERC observes that each transmission operator uses multiple
tools to regulate voltage levels, including reactive control and Real-
time Contingency Analysis, that ``allow the Transmission Operator to
quantify the use of reactive resources. As such, a separate requirement
specifying that the Transmission Operator must schedule `sufficient'
reactive resources for normal and Contingency conditions is redundant
and unnecessary for reliability.'' \29\ Additionally, NERC states that
each planning authority and transmission planner must assess a broad
range of conditions and probable contingencies, including available
reactive resources, under system studies required under Reliability
Standard TPL-001-4, and develop a Corrective Action Plan \30\ to
address reactive resource shortfalls, if needed. NERC concludes that
given this ``comprehensive and interdependent framework addressing
System voltage needs in the operations and planning horizons . . .
there is no need to have a distinct requirement expressly requiring the
Transmission Operator to `schedule' sufficient resources.'' \31\
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    \29\ Id. at 20-21.
    \30\ NERC defines Corrective Action Plan as ``A list of actions
and an associated time table for implementation to remedy a specific
problem.'' Glossary of Terms Used in NERC Reliability Standards
(August 12, 2019).
    \31\ Id. at 21.
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    19. NERC requests that the Commission approve the implementation
plan, attached to NERC's petition as Exhibit B, and the associated
violation risk factors and violation severity levels described in
Exhibit D. The implementation plan provides that proposed Reliability
Standards IRO-002-7, TOP-001-5, and VAR-001-6 would become effective on
the first day of the first calendar quarter that is three months after
regulatory approval. The currently-effective versions of the
Reliability Standards would be retired immediately prior to the
effective date of the revised Reliability Standards. NERC explains that
the requested timeline accounts for the time entities will need to
update their systems and related documentation.
3. FAC, INT, MOD and PRC Petition (Docket No. RM19-17-000)
    20. On June 7, 2019, in Docket No. RM19-17-000, NERC submitted for
Commission approval the proposed retirement of ten currently-effective
Reliability Standards in their entirety without replacement.\32\
Additionally, NERC's petition includes four proposed revised
Reliability Standards reflecting the retirement of certain requirements
from the currently-effective versions that NERC asserts are not needed
for reliability: FAC-008-4 (Facility Ratings), INT-006-5 (Evaluation of
Interchange Transactions), INT-009-3

(Implementation of Interchange) and PRC-004-6 (Protection System
Misoperation Identification and Correction).\33\ NERC asserts that its
proposals would not adversely impact reliability, but rather they
``would benefit reliability by allowing entities to focus their
resources on those Reliability Standard requirements that promote the
reliable operation and planning of the BPS [Bulk-Power System] and
avoid unnecessary regulatory burden.'' \34\
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    \32\ Reliability Standards FAC-013-2 (Assessment of Transfer
Capability for the Near-term Transmission Planning Horizon), INT-
004-3.1 (Dynamic Transfers), INT-010-2.1 (Interchange Initiation and
Modification for Reliability), MOD-001-1a (Available Transmission
System Capability), MOD-004-1 (Capacity Benefit Margin), MOD-008-1
(Transmission Reliability Margin Calculation Methodology), MOD-020-0
(Providing Interruptible Demands and Direct Control Load Management
Data to System Operations and Reliability Coordinators), MOD-028-2
(Area Interchange Methodology), MOD-029-2a (Rated System Path
Methodology), and MOD-030-3 (Flowgate Methodology).
    \33\ The proposed revised versions of the FAC, INT and PRC
Reliability Standards are not attached to the NOPR. The complete
text of the Reliability Standards is available on the Commission's
eLibrary document retrieval system in Docket No. RM19-17-000 and is
posted on the ERO's website, http://www.nerc.com.
    \34\ Docket No. RM19-17-000 Petition at 7.
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    21. NERC contends that the full FAC, INT, MOD and PRC Reliability
Standards proposed for retirement are not necessary and that removing
them would not adversely affect reliability.\35\ NERC states that
retirement of the ten full Reliability Standards is justified because
they are primarily administrative in nature or largely related to
commercial or business practices, and therefore no longer serve a
reliability purpose.\36\ For example, NERC states that the transfer
capability assessment required under Reliability Standard FAC-013-2
``serves only a market function'' and ``is not an indicator of [bulk
electric system] reliability.'' \37\ In supporting its conclusion that
Reliability Standard INT-010-2.1 primarily relates to commercial and
business practices, NERC notes that in 2013 the NERC Independent
Experts Review Panel recommended retiring the previous version of the
Reliability Standard ``due to overlap with the NAESB Electronic Tagging
Functional Specification.'' \38\
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    \35\ The MOD A Reliability Standards proposed for retirement
(MOD-001-1a, MOD-004-1, MOD-008-1, MOD-028-2, MOD-029-2a and MOD-
030-3) are expected to be replaced by equivalent North American
Energy Standards Board (NAESB) business practice standards. The
Commission intends to coordinate the effective dates of the
retirement of the MOD A Reliability Standards with the successor
NAESB business practice standards.
    \36\ Id. at 13-24.
    \37\ Id. at 13.
    \38\ Id. at 16-19.
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    22. Similarly, regarding the MOD Reliability Standards, NERC states
that ``[Available Transfer Capability] and [Available Flowgate
Methodology], as well as e-Tags, are commercially-focused elements
facilitating interchange and balancing of interchange,'' and that
system operators maintain reliability by monitoring Real-time flows
based on System Operating Limits and Interconnection Reliability
Operating Limits.\39\ In particular, NERC explains that information on
Interruptible Demands and Direct Control Load Management required under
Reliability Standard MOD-020-0 is not useful for transmission operators
and reliability coordinators, ``who must plan and operate the [Bulk-
Power System] within System Operating Limits and Interconnection
Reliability Operating Limits under the TOP and IRO Reliability
Standards.'' \40\
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    \39\ Id. at 21.
    \40\ Id. at 23.
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    23. Regarding NERC's proposed revised Reliability Standards, NERC
states that the data provision obligations of currently-effective
Reliability Standard FAC-008-3, Requirements R7 and R8 are redundant
with Reliability Standards MOD-032-1, IRO-010-2 and TOP-003-3. NERC
asserts that Requirements R3.1, R4 and R5 of currently-effective
Reliability Standard INT-006-4 ``provide little, if any, benefit or
protection to the reliability operation of the [Bulk-Power System]''
\41\ and that the substance of Requirements R4 and R5 in particular
relate to commercial or business practices and are better addressed
through the balancing authority's e-Tag Authority Service.\42\ Also,
NERC states that Requirement R1 of currently-effective Reliability
Standard INT-009-2.1 is being revised to remove the reference to
Reliability Standard INT-010, which is also proposed for retirement,
and Requirement R2 is redundant with Reliability Standard BAL-005-1,
Requirement R7.\43\ Finally, NERC states that it has determined that
rather than the ``specific, recurring and inflexible timeframe'' set
forth in Requirement R4 of currently-effective Reliability Standard
PRC-004-5 for identifying the cause of a protection system
misoperation, ``it would be more effective to have entities investigate
the causes of misoperations according to their own internal control
policies and procedures.'' \44\
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    \41\ Id. at 29.
    \42\ Id. at 29-31.
    \43\ Id. at 31-32.
    \44\ Id. at 34.
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    24. NERC requests that the Commission approve the implementation
plan, attached to NERC's petition as Exhibit B, and the associated
violation risk factors and violation severity levels, attached to
NERC's petition as Exhibit D, which are generally unchanged from the
currently-effective versions. For the Reliability Standards retired in
their entirety, NERC proposes an effective date that is immediately
upon regulatory approval of the retirement. NERC also seeks to retire
the currently-effective Reliability Standards FAC-008-3, INT-006-4,
INT-009-2.1, and PRC-004-5(i) immediately prior to the effective date
of their new versions.

II. Discussion

    25. Pursuant to section 215(d)(2) of the FPA, the Commission
proposes to approve NERC's request to retire 74 Reliability Standard
requirements as just, reasonable, not unduly discriminatory or
preferential, and in the public interest. NERC's petitions provide an
adequate basis to conclude that the requirements proposed for
retirement: (1) Provide little or no reliability benefit; (2) are
administrative in nature or relate expressly to commercial or business
practices; or (3) are redundant with other Reliability Standards.
NERC's justifications for retiring the 74 requirements are largely
consistent with the retirement standard set forth by the Commission in
Order No. 788 and with the determination that ``requirements proposed
for retirement can be removed from the Reliability Standards with
little effect on reliability and an increase in efficiency of the ERO
compliance program.'' \45\
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    \45\ Order No. 788, 145 FERC ] 61,147 at P 1.
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    26. The proposal above does not include NERC's request to retire
Reliability Standard FAC-008-3, Requirements R7 and R8 and Reliability
Standard VAR-001-5, Requirement R2. While NERC asserts that Reliability
Standards MOD-032-1, IRO-010-2 and TOP-003-3 provide a basis for
retiring Reliability Standard FAC-008-3, Requirements R7 and R8, we
seek additional information on these proposed retirements because this
rationale does not address elements of Requirements R7 and R8 that do
not appear to be redundant.
    27. In addition, we disagree with NERC's assertion that Reliability
Standard VAR-001-5, Requirement R2 is redundant or not necessary for
reliability because we construe the requirement as essential to
accomplish the purpose of the Reliability Standard. Accordingly,
pursuant to section 215(d)(4) of the FPA, we propose to remand
Reliability Standard VAR-001-6 in order to retain Requirement R2 in
currently-effective Reliability Standard VAR-001-5.
    28. Below, we discuss the following issues: (A) Proposed retirement
of Reliability Standard FAC-008-3, Requirements R7 and R8; and (B)
proposed retirement of Reliability Standard VAR-001-5, Requirement R2.

A. Proposed Retirement of Reliability Standard FAC-008-3, Requirements
R7 and R8

NERC Petition
    29. Reliability Standard FAC-008-3, Requirements R7 and R8 require
generator owners and transmission owners, respectively, to provide
facility ratings and related information to requesting reliability
coordinators, planning coordinators, transmission planners,
transmission owners and transmission operators. NERC asserts that
requirements in Reliability Standards MOD-032-1, IRO-010-2, and TOP-
003-3 render the data provision obligations of Requirements R7 and R8
in Reliability Standard FAC-008-3 redundant and therefore unnecessary
for reliability.
    30. To support its redundancy claim, NERC explains that under
Reliability Standard MOD-032-1, generator owners and transmission
owners must provide information on power capabilities and facility
ratings (Requirement R2) to enable planning coordinators and
transmission planners to ``jointly develop steady-state, dynamics, and
short circuit modeling data requirements and reporting procedures for
the Planning Coordinator's planning area'' (Requirement R1). NERC
further explains that under Reliability Standard IRO-010-2, reliability
coordinators must maintain ``a documented specification for the data
necessary to perform its Operational Planning Analyses, Real-time
monitoring, and Real-time Assessments. This data necessarily includes
Facility Ratings as inputs to System Operating Limit monitoring.'' \46\
NERC notes that under Requirement R3, the transmission owner and
generator owner must provide such data. Finally, NERC points out that
under Reliability Standard TOP-003-3, the transmission operator must
maintain data specifications (Requirement R1) and the transmission
owner and generation owner must provide the requested data (Requirement
R5). Relying on this framework of data specification and provision,
NERC concludes that Reliability Standard FAC-008-3, Requirements R7 and
R8 ``are now redundant to other more robust Reliability Standards and
are no longer needed for reliability.'' \47\
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    \46\ Id. at 28.
    \47\ Id.
---------------------------------------------------------------------------

Discussion
    31. We agree with NERC that the cited requirements in Reliability
Standards MOD-032-1, IRO-010-2, and TOP-003-3 provide a basis for
retiring certain elements of Reliability Standard FAC-008-3,
Requirements R7 and R8. However, NERC's petition does not address other
elements of Requirements R7 and R8 that do not appear to be redundant.
In particular, Requirements R7 and R8 of the currently-effective
Reliability Standard require generator owners and transmission owners,
respectively, to provide facility ratings to several functional entity
types, including transmission owners. While NERC is correct that the
three Reliability Standards it cites collectively require generator
owners and transmission owners to provide facility ratings to
reliability coordinators, planning coordinators, transmission planners,
and transmission operators, these three Reliability Standards do not
require the provision of facility ratings to transmission owners.
Therefore, it appears that, if approved, the retirement of Requirements
R7 and R8 would eliminate the mandatory exchange of facility rating-
related information with transmission owners. This could, in turn,
impact reliability since these requirements ensure that all
transmission owners have accurate facility-related information in the
models that they use to plan and operate the bulk electric system.
    32. Separately, Reliability Standards MOD-032-1, IRO-010-2, and
TOP-003-3 do not address sub-requirement R8.1.2 of Reliability Standard
FAC-008-3, relating to the identity of the next most limiting equipment
of a requested facility. Further, these Reliability Standards also do
not account for sub-requirement R8.2, which requires the identification
and thermal rating of the existing next most limiting equipment of
facilities with a thermal rating that limits the use of that facility
by causing either an Interconnection Reliability Operating Limit, a
limitation of Total Transfer Capability, an impediment to generator
deliverability, or an impediment to service to a major load center as
specified in FAC-008-3 (Requirement R8.2).\48\
---------------------------------------------------------------------------

    \48\ This requirement was developed in response to Order No.
693. Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, 118 FERC ] 61,218, at P 756, order on reh'g, Order
No. 693-A, 120 FERC ] 61,053 (2007); see also NERC, Petition, Docket
No. RD11-10-000, at 11-13, 20-21 (filed Jun. 15, 2011).
---------------------------------------------------------------------------

    33. Considering the foregoing, while there is some overlap,
Reliability Standard FAC-008-3, Requirements R7 and R8 do not appear to
be entirely redundant of the other Reliability Standards cited by NERC.
The retirement of these requirements would, therefore, result in the
gaps described above. These non-redundant elements of Requirements R7
and R8 are not addressed in the petition. Accordingly, the Commission
seeks more information from NERC and others regarding how the elements
of Reliability Standards MOD-032-1, IRO-010-2 and TOP-003-3 discussed
above render Reliability Standard FAC-008-3, Requirements R7 and R8
redundant. The Commission's final determination on the retirement of
these two requirements will be based on the comments received from NERC
and others.

B. Proposed Retirement of Reliability Standard VAR-001-5, Requirement
R2

NERC Petition
    34. Reliability Standard VAR-001-5, Requirement R2 requires each
transmission operator to schedule ``sufficient reactive resources to
regulate voltage levels under normal and Contingency conditions.'' NERC
maintains that the reliability need for sufficient reactive resources
is adequately addressed by existing requirements in several other
Reliability Standards and, therefore, is unnecessary and should be
retired.
    35. In particular, NERC relies on Reliability Standard TOP-001-4,
Requirement R10 and Reliability Standard TOP-002-4, Requirement R1,
that require transmission operators to determine System Operating
Limits and perform an OPA to assess whether planned next-day operations
will exceed those limits and plan for addressing them. Reliability
Standard TOP-001-4 requires each transmission operator to perform Real-
time Assessments every 30 minutes to identify possible System Operating
Limit exceedances and initiate its Operating Plan to mitigate them.
NERC states that ``Operating Plans address the use of reactive
resources if needed to operate within System Operating Limits, as well
as any other adjustments that may be needed.'' \49\
---------------------------------------------------------------------------

    \49\ Docket No. RM19-16-000 Petition at 20.
---------------------------------------------------------------------------

    36. NERC explains that each transmission operator uses multiple
tools to regulate voltage levels, including reactive control and Real-
time Contingency Analysis. NERC maintains that ``[t]hese actions allow
the Transmission Operator to quantify the use of reactive resources. As
such, a separate requirement specifying that the Transmission Operator
must schedule `sufficient' reactive resources for normal and
Contingency conditions is

redundant and unnecessary for reliability.'' \50\ Additionally, NERC
states that each planning authority and transmission planner must
assess a broad range of conditions and probable contingencies,
including available reactive resources, under System studies required
under Reliability Standard TPL-001-4, and it must develop a corrective
action plan to address reactive resource shortfalls, if needed.\51\
---------------------------------------------------------------------------

    \50\ Id. at 20-21.
    \51\ Id. at 21.
---------------------------------------------------------------------------

    37. NERC concludes that given this ``comprehensive and
interdependent framework addressing System voltage needs in the
operations and planning horizons . . . there is no need to have a
distinct requirement expressly requiring the Transmission Operator to
`schedule' sufficient resources.'' \52\ NERC also states ``that the
second sentence of Requirement R2 constitutes guidance or a measure
which does not warrant a mandatory requirement provision.'' \53\
---------------------------------------------------------------------------

    \52\ Id.
    \53\ The second sentence of Requirements R2 states,
``Transmission Operators can provide sufficient reactive resources
through various means including, but not limited to, reactive
generation scheduling, transmission line and reactive resource
switching, and using controllable load.''
---------------------------------------------------------------------------

Discussion
    38. NERC contends that Reliability Standards TOP-001-4 and TOP-002-
4 require, among other things, transmission operators to perform an
operational planning analyses and determine System Operating Limits to
assess whether planned next-day operations will exceed those limits and
develop a plan to address those potential exceedances. However, the
proposed retirement of Reliability Standard VAR-001-5, Requirement R2
assumes that, even in the absence of a specific requirement, if the
transmission operator identifies potential System Operating Limit
exceedances based on this analysis, the transmission operator will
develop and implement an Operating Plan to mitigate the potential
exceedances. We determine that relying on such an assumption may
negatively impact reliability given the significant role that
scheduling adequate reactive resources plays in the overall operation
of Reliability Standard VAR-001-5. We also determine that retiring
Requirement R2 is contrary to the stated purpose of Reliability
Standard VAR-001-5, which is to ``ensure that voltage levels, reactive
flows and reactive resources are monitored, controlled and maintained
within limits in Real-time to protect equipment and the reliable
operation of the Interconnection.'' Accordingly, we propose to remand
proposed Reliability Standard VAR-001-6 in order to retain Requirement
R2 because it is the only requirement that explicitly requires
transmission operators to schedule reactive resources.\54\
---------------------------------------------------------------------------

    \54\ When seeking approval of Reliability Standard VAR-001-4,
NERC addressed the significance of Requirement R2, stating that
``the primary factor in maintaining voltage stability is having the
appropriate amount of Reactive Power on the system. Proposed
Requirement R2 helps ensure that sufficient reactive resources are
online and scheduled in Real-time.'' NERC, Petition, Docket No.
RD14-11-000, at 20 (filed June 9, 2014). When NERC conducted a
periodic review of Reliability Standard VAR-001-4.1 in 2017,
periodic review team found that the Reliability Standard met its
objective and therefore no revisions were necessary. NERC, Periodic
Review Recommendations: VAR-001-4.1--Voltage and Reactive Control
(May 19, 2017). Further, the periodic review team determined that no
requirements satisfied the criteria for retirement. Id. at 4.
---------------------------------------------------------------------------

    39. While Reliability Standards TOP-001-4 and TOP-002-4 address
situations involving the possible need to schedule reactive resources,
they are not adequate substitutes for the explicit obligation in
Requirement R2 of Reliability Standard VAR-001-5 requiring transmission
operators to schedule enough reactive resources to regulate voltage
levels under all system conditions. Reliability Standard TOP-001-4,
Requirement R10 only requires the transmission operator to monitor
facilities within its area (Requirement R10.1); to monitor the status
of Remedial Action Schemes within its area (Requirement R10.2), to
monitor non-bulk electric system facilities within its area
(Requirement R10.3); to obtain and use status, voltages, and flow data
for facilities outside its area (Requirement R10.4); to obtain and use
the status of Remedial Action Schemes outside its area (Requirement
R10.5); and to obtain and use status, voltages, and flow data for non-
bulk electric system facilities outside its area (Requirement R10.6).
Therefore, we determine that a plain reading of the relevant
requirements cited by NERC in its petition indicates that the action of
scheduling any type of resources is not required outside of Reliability
Standard VAR-001-5, Requirement R2.
    40. Additionally, Reliability Standards TOP-001-4 and TOP-002-4 do
not require the transmission operator to implement mitigation plans:
Instead, the transmission operator need only analyze and develop a plan
to address a potential System Operating Limit.
    41. Accordingly, we disagree with NERC's assertion that Reliability
Standard VAR-001-5, Requirement R2 is duplicative of other existing
Reliability Standard requirements, and we believe that eliminating
Requirement R2 will create an unacceptable risk that voltage, reactive
flows, and reactive resources will not be controlled and maintained
within System Operating Limits. Therefore, pursuant to section
215(d)(4) of the FPA, we propose to remand proposed Reliability
Standard VAR-001-6 in order to retain Requirement R2 of currently-
effective Reliability Standard VAR-001-5.

III. Information Collection Statement

    42. The information collection requirements contained in this
Proposed Rule are subject to review by the Office of Management and
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of
1995.\55\ OMB's regulations require approval of certain information
collection requirements imposed by agency rules.\56\ Upon approval of a
collection of information, OMB will assign an OMB control number and
expiration date. Respondents subject to the filing requirements of this
rule will not be penalized for failing to respond to these collections
of information unless the collections of information display a valid
OMB control number. The Commission solicits comments on the
Commission's need for this information, whether the information will
have practical utility, the accuracy of the burden estimates, ways to
enhance the quality, utility, and clarity of the information to be
collected or retained, and any suggested methods for minimizing
respondents' burden, including the use of automated information
techniques.
---------------------------------------------------------------------------

    \55\ 44 U.S.C. 3507(d).
    \56\ 5 CFR 1320.
---------------------------------------------------------------------------

    43. The Commission estimates that the proposed rule, which would
retire 74 requirements of Reliability Standards without adding any new
obligations on registered entities, would result in a total reduction
in burden for industry of 151,340.2 hours. The Commission based the
burden reduction estimates on staff experience, knowledge, and
expertise.

                                            Proposed Reductions Due to NOPR in Docket Nos. RM19-16 & RM19-17
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of                       Average number
                                                                                annual       Total number of      of burden       Total burden
       Reliability standard & requirement          Type \57\ and number of entity    responses per      responses         hours per          hours
                                                                                entity                            response
                                                 (1)..............................             (2)    (1) * (2) = (3)             (4)    (3) * (4) = (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        FERC-725A
--------------------------------------------------------------------------------------------------------------------------------------------------------
FAC-013-2......................................  RC (12)..........................            8.33                100           26.67              2,667
--------------------------------------------------------------------------------------------------------------------------------------------------------
INT-006-4, R3.1, R4, R5, R5.1, R5.2, R5.3,       BA/TSP (171).....................               1                171            56.3              9,627
 R5.4, R5.5.
INT-004-3.1....................................  BA (99)..........................               1                 99            56.3              5,574
INT-010-2.1....................................  BA (99)..........................               1                 99            56.3              5,574
INT-009-2.1, R2................................  BA (99)..........................               1                 99            56.3              5,574
MOD-001-1a.....................................  TOP/TSP (240)....................               2                480            55.3             26,544
MOD-004-1......................................  TOP (168)........................               1                168            48.9            8,215.2
MOD-008-1......................................  TOP (168)........................               1                168            48.9            8,215.2
MOD-028-2......................................  TOP/TSP (240)....................               1                240            48.9             11,736
MOD-020-0......................................  TP/RP/DP/BA (780)................               1                780            14.4             11,232
MOD-029-2a.....................................  TOP/TSP/TP/BA (533)..............               1                533            49.8             26,543
MOD-030-3......................................  TOP/TSP/TP/BA (533)..............               1                533            49.8             26,543
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Sub-Total for FERC-725A....................  3,142............................  ..............              3,470  ..............          148,044.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      FERC-725A(1C)
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOP-001-4, R19 & R22...........................  BA/TO/GO/DP (1,696)..............             .25                422             0.8              337.6
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Sub-Total for FERC-725A(1C)................  1,696............................  ..............                422  ..............              337.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       FERC-725G1
--------------------------------------------------------------------------------------------------------------------------------------------------------
PRC-004-5(i), R4...............................  TO/GO/DP (1,597).................             .41                659            4.36            2,874.6
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Sub-Total for FERC-725G1...................  1,597............................  ..............                659  ..............            2,874.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        FERC-725Z
--------------------------------------------------------------------------------------------------------------------------------------------------------
IRO-002-6, R1..................................  RC (12)..........................            1.17                 14            5.97               83.6
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Sub-Total for FERC-725Z....................  12...............................  ..............                 14  ..............               83.6
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
        Total Reductions Due to NOPR in RM19-16  .................................  ..............              4,565  ..............          151,340.2
         & RM19-17.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Titles: FERC-725A, Mandatory Reliability Standards for the Bulk
Power System; FERC-725A(1C), Mandatory Reliability Standards for Bulk-
Power System: Reliability Standard TOP-001-4; FERC-725G1, Mandatory
Reliability Standards for the Bulk-Power System: Reliability Standard
PRC-004-5(i); FERC-725Z, Mandatory Reliability Standards: IRO
Reliability Standards.
---------------------------------------------------------------------------

    \57\ RC = Reliability Coordinator; BA = Balancing Authority; TSP
= Transmission Service Provider; TOP = Transmission Operator; TO =
Transmission Owner; GO = Generator Owner; DP = Distribution
Provider; TP = Transmission Provider; and RP = Resource Planner.
---------------------------------------------------------------------------

    Action: Proposed Reductions to Existing Collections of Information
FERC-725A, FERC-725A(1C), and FERC-725Z; and Proposed Elimination of
Collections of Information, and FERC-725G1.
    OMB Control Nos: 1902-0244 (FERC-725A); 1902-0298 (FERC-
725A(1C));1902-0284 (FERC-725G1); and 1902-0276 (FERC-725Z).
    Respondents: Business or other for profit, and not for profit
institutions.
    Frequency of Responses: On occasion (and proposed for deletion).
    44. Necessity of the Information: This proceeding proposes to
approve the retirement of ten Reliability Standards in their entirety
and five revised Reliability Standards, reflecting a total of 74
retired requirements identified by NERC. The proposed retirements
either: (1) Provide little or no reliability benefit; (2) are
administrative in nature or relate expressly to commercial or business
practices; or (3) are redundant with other Reliability Standards.
    45. Internal review: The Commission has reviewed NERC's proposal
and determined that its action is necessary to implement section 215 of
the FPA. The Commission has assured itself, by means of its internal
review, that there is specific, objective support for the burden
reduction estimates associated with the information requirements
proposed for retirement.
    46. Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
Office of the Executive Director, 888 First Street NE, Washington, DC
20426 [Attention: Ellen Brown, email<EMAIL_ADDRESS>phone:
(202) 502-8663, fax:<PHONE_NUMBER>].
    47. Comments concerning the information collections and
requirements proposed for retirement in this NOPR and the associated
burden estimates, should be sent to the

Commission in this docket and may also be sent to the Office of
Management and Budget, Office of Information and Regulatory Affairs
[Attention: Desk Officer for the Federal Energy Regulatory Commission].
For security reasons, comments should be sent by email to OMB at the
following email address<EMAIL_ADDRESS>Please refer to
the appropriate OMB Control Number(s) and Docket Nos. RM19-16-000 and
RM19-17-000 in your submission.

IV. Regulatory Flexibility Act Certification

    48. The Regulatory Flexibility Act of 1980 (RFA) \58\ generally
requires a description and analysis of rulemakings 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 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.\59\ The Small Business
Administration has established size standards, for the types of
affected entities (noted in the table above), that range from a maximum
of 250-1,000 employees for an entity and its affiliates to be
considered small.
---------------------------------------------------------------------------

    \58\ 5 U.S.C. 601-612.
    \59\ 13 CFR 121.101.
---------------------------------------------------------------------------

    49. The Commission seeks comment on the proposed reduction of
burden and cost on small business entities. The Commission estimates
the total industry reduction in burden for all entities (large and
small) to be 151,340.2 hours (or approximately 33 hours (rounded) per
response). The Commission believes that this proposal will reduce
burden and cost for all affected entities.
    50. Based on the information above, the Commission certifies that
the proposed reductions will not have a significant impact on a
substantial number of small entities. Accordingly, no initial
regulatory flexibility analysis is required.

V. Environmental Analysis

    51. 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.\60\ 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.\61\ The actions proposed here
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \60\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \61\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

VI. Comment Procedures

    52. The Commission invites interested persons to submit comments on
the matters and issues proposed in this document to be adopted,
including any related matters or alternative proposals that commenters
may wish to discuss. Comments are due April 6, 2020. Comments must
refer to Docket Nos. RM19-16-000 and RM19-17-000, and must include the
commenter's name, the organization they represent, if applicable, and
their address in their comments.
    53. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    54. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    55. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VII. Document Availability

    56. 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.
    57. 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.
    58. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
    By direction of the Commission.
    Issued: January 23, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-02171 Filed 2-5-20; 8:45 am]
 BILLING CODE 6717-01-P