[Federal Register Volume 78, Number 234 (Thursday, December 5, 2013)]
[Proposed Rules]
[Pages 73112-73128]
[FR Doc No: 2013-28629]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket Nos. RM13-12-000, RM13-14-000 and RM13-15-000]

Monitoring System Conditions--Transmission Operations Reliability
Standards; Interconnection Reliability Operations and Coordination
Reliability Standards

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the
Commission proposes to remand revisions to the Transmission Operations
and Interconnection Reliability Operations and Coordination Reliability
Standards, developed by the North American Electric Reliability
Corporation (NERC), which the Commission has certified as the Electric
Reliability Organization responsible for developing and enforcing
mandatory Reliability Standards. In addition, the Commission proposes
to approve NERC's proposed revisions to Reliability Standard TOP-006-3.

DATES: Comments are due February 3, 2014.

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 in 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:
Michael Gandolfo (Technical Information), Office of Electric
Reliability, Federal Energy Regulatory Commission, 888 First Street
NE., Washington, DC 20426, Telephone:<PHONE_NUMBER>,
<EMAIL_ADDRESS>Robert T. Stroh (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, Telephone:<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

145 FERC ] 61,158

Notice of Proposed Rulemaking

(Issued November 21, 2013)

    1. Pursuant to section 215(d) of the Federal Power Act (FPA),\1\
the Commission proposes to remand revisions to the Transmission
Operations (TOP) and Interconnection Reliability Operations and
Coordination (IRO) Reliability Standards, developed by the North
American Electric Reliability Corporation (NERC), which the Commission
has certified as the Electric Reliability Organization (ERO)
responsible for developing and enforcing mandatory Reliability
Standards. In addition, the Commission proposes to approve NERC's
proposed revision to Reliability Standard TOP-006-3 concerning the
monitoring role and notification obligation of reliability
coordinators, balancing authorities and transmission operators. The
Commission seeks comments on its proposals.
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    \1\ 16 U.S.C. 824o(d) (2012).
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    2. NERC filed changes to the TOP Reliability Standards (Docket No.
RM13-14-000) concurrently with its proposal to modify the IRO
Reliability Standards (Docket No. RM13-15-000). NERC requests that the
Commission process the two proposals together. In addition, NERC
separately filed revisions to Reliability Standard TOP-006-3 (Docket
No. RM13-12-000) that NERC proposes to become effective prior to the
effective date of the revisions to the TOP Reliability Standards in
Docket No. RM13-14-000. Because the proposed TOP and IRO Reliability
Standards are interrelated, and because the proposed revisions to
Reliability Standard TOP-006-3 involve similar issues raised in the TOP
and IRO proposals concerning monitoring of the interconnected
transmission network and notification of and by registered entities,
the Commission addresses the three proposals together in this Notice of
Proposed Rulemaking (NOPR).
    3. NERC explains that the set of TOP Reliability Standards
``address the important reliability goal of ensuring that the
transmission system is operating within operating limits.'' \2\ The TOP
Standards generally address real-time operations and planning for next-
day operations, and apply primarily to the responsibilities of
transmission operators. The set of IRO Standards apply to the
responsibility and authority of reliability coordinators, the entities
with the highest level of authority that are responsible for reliable
operation of the bulk electric system, and have the wide-area view of
the bulk electric system. The IRO Standards, which complement the TOP
Standards, have the goal of ensuring that the bulk electric system is
planned and operated in a coordinated manner to perform reliably under
normal and abnormal conditions.\3\ Thus, together, the TOP and IRO
Reliability Standards address matters that are fundamental to grid
reliability as they pertain to the coordinated efforts to operate the
bulk electric system in a reliable manner during real-time operations.
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    \2\ NERC TOP Petition at 3.
    \3\ See NERC IRO Petition at 6.
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    4. Based on our review of the NERC petitions, it appears that the
proposed TOP and IRO Reliability Standards contain some improvements
over the current standards. Specifically, the revised standards include
organizational and administrative improvements that reduce redundancy
and clarify the delineation between applicable entities with regard to
certain tasks. The Commission appreciates efforts to clarify standards
and reduce redundancies.\4\ However, we are concerned that the changes
in the proposed standards create reliability gaps in the standards that
are critical to reliable operation of the Bulk-Power System. While NERC
indicates that the revised TOP Reliability Standards eliminate gaps and
ambiguities in the currently-effective TOP requirements, we are
concerned that NERC has removed critical reliability aspects that are
included in the currently-effective standards without adequately
addressing these aspects in the proposed standards. One area of concern
is that, unlike the currently-effective TOP Reliability Standards,
there is no requirement in the proposed standards for transmission
operators to plan and operate within all System Operating Limits
(SOLs).\5\ The provisions in the proposed TOP Reliability Standards
that require transmission operators to operate only within a subset of
SOLs offset the potential improvements. The Commission believes that
NERC's proposal for the treatment of SOLs adversely impacts multiple
requirements in the proposed TOP Reliability Standards. Moreover, as
discussed herein, the Commission identifies other concerns that may
need to be addressed in order not to create further reliability gaps.
Section 215(d)(4) requires that the Commission remand to the ERO for
further consideration a Reliability Standard ``that the Commission
disapproves in whole or in part.'' \6\ Thus, notwithstanding the
improvements mentioned above, the concern regarding the treatment of
SOLs, and potentially other concerns discussed below, leads us to
propose to remand the proposed TOP standards. In addition, given the
interrelationship between the TOP and IRO Reliability Standards and
that NERC requests that both sets of standards be addressed
together,\7\ we believe a remand of the proposed IRO standards in
addition to those of the TOP will enable NERC to more comprehensively
consider modifications to the standards that would address the
reliability concerns identified in this NOPR. This approach, in turn,
should allow NERC more

flexibility in developing appropriate modifications that address our
concerns since changes to the TOP standards might require, in some
instances, commensurate changes to the IRO standards.
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    \4\ Electric Reliability Organization Proposal to Retire
Requirements in Reliability Standards, Order No. 788, 145 FERC ]
61,147 (2013).
    \5\ NERC defines a SOL as ``[t]he value (such as MW, MVar,
Amperes, Frequency or Volts) that satisfies the most limiting of the
prescribed operating criteria for a specified system configuration
to ensure operation within acceptable reliability criteria. System
Operating Limits [pre- and post-Contingency] are based upon certain
operating criteria. . . .''
    \6\ 16 U.S.C. 824o(d)(4) (2012) (emphasis added).
    \7\ NERC TOP Petition at 2 (stating that ``simultaneous approval
of both petitions by the Commission will help ensure a smooth
transition and implementation of the proposed Reliability Standards
for both the industry and the ERO.'').
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    5. In addition to the concerns regarding the treatment of SOLs, the
Commission has identified a reliability gap in the IRO Reliability
Standards and accordingly proposes to direct that NERC develop
modifications in these standards to ensure that reliability
coordinators continue to develop and implement comprehensive generation
and transmission outage coordination processes.
    6. Further, we discuss below additional issues regarding the
proposed TOP and IRO Reliability Standards that require clarification
or further explanation and technical justification. Depending on the
explanations provided by NERC and other interested entities in their
comments to this NOPR, additional Commission action may be appropriate,
including directives that NERC must address in response to a final rule
in this proceeding.

I. Background

    7. Section 215 of the FPA requires a Commission-certified ERO to
develop mandatory and enforceable Reliability Standards, which are
subject to Commission review and approval. Once approved, the
Reliability Standards are enforced by the ERO, subject to Commission
oversight, or by the Commission independently. On March 16, 2007, the
Commission issued Order No. 693, approving 83 of the 107 initial
Reliability Standards filed by NERC, including the existing TOP and IRO
Reliability Standards.\8\ In addition, in Order No. 748, the Commission
approved revisions to the IRO Reliability Standards; however, none of
the standards approved in Order No. 748 are at issue in this NOPR.\9\

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    \8\ Mandatory Reliability Standards for the Bulk-Power System,
Order No. 693, 72 FR 16416 (Apr. 4, 2007), FERC Stats. & Regs. ]
31,242, order on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
    \9\ Mandatory Reliability Standards for Interconnection
Reliability Operating Limits, Order No. 748, 134 FERC ] 61,213
(2011).
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A. NERC's TOP Petition (Docket No. RM13-14-000)

    On April 16, 2013, in Docket No. RM13-14-000, NERC submitted for
Commission approval three revised TOP Reliability Standards: TOP-001-2
(Transmission Operations), TOP-002-3 (Operations Planning), TOP-003-2
(Operational Reliability Data), and one Protection Systems (PRC)
Reliability Standard, PRC-001-2 (System Protection Coordination) to
replace the eight currently-effective TOP standards.
    NERC also seeks approval of the implementation plan for the
proposed TOP Reliability Standards and approval of the retirement of
eight TOP and one PER Reliability Standards,\10\ and to retire
Requirements R2, R5, and R6 of Reliability Standard PRC-001-1.
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    \10\ TOP-001-1a--(Reliability Responsibilities and Authorities);
TOP-002-2.1b (Normal Operations Planning); TOP-003-1 (Planned Outage
Coordination); TOP-004-2 (Transmission Operations); TOP-005-2a
(Operational Reliability Information); TOP-006-2 (Monitoring System
Conditions); TOP-007-0 (Reporting System Operating Limit and
Interconnection Reliability Operating Limit Violations); TOP-008-1
(Response to Transmission Limit Violations); and on Personnel
Performance, Training, and Qualifications (PER) Reliability
Standard, PER-001-0.2 (Operating Personnel Responsibility and
Authority).
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    9. NERC states that the proposed TOP Reliability Standards
represent significant revision and improvement to the current set of
enforceable Reliability Standards by upgrading the overall quality of
the standards, eliminating gaps in the requirements, ambiguity,
redundancies, and addressing Order No. 693 directives. NERC adds that
the proposed TOP Reliability Standards are also more efficient than the
currently-effective standards because they incorporate the necessary
requirements from today's standards into three cohesive, comprehensive
Reliability Standards ``that are focused on achieving a specific
result.'' \11\ NERC states that the proposed TOP Reliability Standards,
along with the proposed IRO Reliability Standards, will help to ensure
better coordination for transmission operators and reliability
coordinators to ``plan and operate the interconnected Bulk Electric
System in a synchronized manner to perform reliably under normal and
abnormal conditions.'' \12\
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    \11\ NERC TOP Petition at 4, 11, 42. NERC explains that the
corresponding changes in proposed Reliability Standard PRC-001-2 are
administrative in nature and are limited to removal of three
requirements in currently-effective Reliability Standard PRC-001-1
that are now addressed in proposed Reliability Standard TOP-003-2.
    \12\ NERC TOP Petition at 9.
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    10. NERC states that the proposed TOP Reliability Standards are a
significant improvement from the currently-effective TOP Reliability
Standards in three ways. First, NERC explains that the proposed TOP
Reliability Standards ``rais[e] the bar on system performance by
mandating that all IROLs be resolved within the IROL Tv,
which is a significant increase in performance over the existing
Reliability Standards.'' \13\ NERC indicates that the proposed TOP
Reliability Standards adopt an approach ``for operating within a subset
of SOLs that more closely aligns with the original NERC Operating
Guidelines.'' \14\ Second, NERC states that it improved the proposed
Reliability Standards by designating requirements to apply solely to
transmission operators and removing several of the requirements
applicable to reliability coordinators. NERC explains that it added
requirements applicable to reliability coordinators to the proposed IRO
Reliability Standards. Third, NERC states it consolidated ``the
necessary requirements from the eight existing TOP Reliability
Standards into three cohesive, comprehensive Reliability Standards.''
\15\ The specific revisions to the TOP Reliability Standards are as
follows:
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    \13\ NERC TOP Petition at 11. The Interconnection Reliability
Operating Limit (IROL) Tv is defined in the NERC Glossary
of Terms as: ``The maximum time that an Interconnection Reliability
Operating Limit can be violated before the risk to the
interconnection or other Reliability Coordinator Area(s) becomes
greater than acceptable. Each Interconnection Reliability Operating
Limit's Tv shall be less than or equal to 30 minutes.''
    \14\ NERC TOP Petition at 11. NERC states that ``[p]rior to
becoming the ERO, NERC guidelines for power system operation and
accreditation were referred to as the NERC Operating Guidelines, for
which compliance was strongly encouraged yet ultimately voluntary.''
Id. at n.23.
    \15\ NERC TOP Petition at 11.
    \16\ The proposed TOP and IRO 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 Nos. RM13-14 and RM13-15 and is posted on the ERO's Web
site, available at: http://www.nerc.com.
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TOP-001-2 (Transmission Operations) \16\
    11. In the TOP petition, NERC explains that the requirements of
proposed Reliability Standard TOP-001-2 address the following matters:
(1) Transmission operator ``Reliability Directives'' (proposed
Requirements R1 and R2); (2) emergencies and emergency assistance
(proposed Requirements R3-R6); and (3) IROLs and SOLs (proposed
Requirements R7-R11). Proposed Requirements R1 and R2 state:

    R1. Each Balancing Authority, Generator Operator, Distribution
Provider, and Load-Serving Entity shall comply with each Reliability
Directive issued and identified as such by its Transmission
Operator(s), unless such action would violate safety, equipment,
regulatory, or statutory requirements.
    R2. Each Balancing Authority, Generator Operator, Distribution
Provider, and Load-Serving Entity shall inform its Transmission
Operator of its inability to perform an identified Reliability
Directive issued by that Transmission Operator.

NERC states that proposed Requirement R1 recognizes the reliability
need to give transmission operators the ability to issue Reliability
Directives to various entities, subject to limited exceptions in cases
where such actions would violate safety, equipment, regulatory, or
statutory requirements. NERC explains that Requirement R2 requires
entities receiving the directive from the transmission operator to
inform the transmission operator in situations where an identified
Reliability Directive cannot be performed. NERC explains that these
requirements give transmission operators the authority to issue
Reliability Directives when needed, but also provide them the
flexibility to take different action in those situations where an
entity notifies its transmission operator of its inability to comply
with a Reliability Directive.\17\
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    \17\ NERC TOP Petition at 12-13.
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    12. With regard to emergencies and emergency assistance, NERC
proposes Requirements R3 through R6:

    R3. Each Transmission Operator shall inform its Reliability
Coordinator and Transmission Operator(s) that are known or expected
to be affected by each actual and anticipated Emergency based on its
assessment of its Operational Planning Analysis.
    R4. Each Transmission Operator shall render emergency assistance
to other Transmission Operators, as requested and available,
provided that the requesting entity has implemented its comparable
emergency procedures, unless such actions would violate safety,
equipment, regulatory, or statutory requirements.
    R5. Each Transmission Operator shall inform its Reliability
Coordinator and other Transmission Operators of its operations known
or expected to result in an Adverse Reliability Impact on those
respective Transmission Operator Areas unless conditions do not
permit such communications. Examples of such operations are relay or
equipment failures, and changes in generation, Transmission, or
Load.
    R6. Each Balancing Authority and Transmission Operator shall
notify its Reliability Coordinator and negatively impacted
interconnected NERC registered entities of planned outages of
telemetering equipment, control equipment and associated
communication channels between the affected entities.

NERC states that proposed Requirements R3, R5, and R6 apply to the
coordination aspects of interconnected operation. NERC explains that
proposed Requirement R3 requires a transmission operator to inform its
reliability coordinators and other transmission operators of actual and
anticipated emergencies based on its assessment of its ``Operational
Planning Analysis.'' \18\ NERC states that, in situations ``where
emergency assistance is needed, proposed Requirement R4 requires that
Transmission Operators render emergency assistance to other
Transmission Operators when it is requested and available'' and that
proposed Requirement R5 ``requires Transmission Operators to inform
entities (Reliability Coordinators and other Transmission Operators) of
operations that may adversely impact them.'' \19\ According to NERC,
this proposed requirement addresses the Order No. 693 directive to
consider the need for the transmission operator to notify the
reliability coordinator or the balancing authority when facilities are
removed from service.\20\ NERC states that proposed Requirement R6
requires balancing authorities and transmission operators to notify the
reliability coordinator and negatively impacted interconnected NERC
registered entities of planned outages of telemetering equipment.
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    \18\ NERC defines an Operational Planning Analysis as ``[a]n
analysis of the expected system conditions for the next day's
operation. (That analysis may be performed either a day ahead or as
much as 12 months ahead.) Expected system conditions include things
such as load forecast(s), generation output levels, and known system
constraints (transmission facility outages, generator outages,
equipment limitations, etc.).'' NERC Glossary of Terms at 47.
    \19\ NERC TOP Petition at 14.
    \20\ NERC TOP Petition at 14 (citing Order No. 693, FERC Stats.
& Regs. ] 31,242 at P 1588).
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    13. With respect to treatment of SOLs and IROLs, NERC explains that
the standard drafting team examined the requirements for SOLs and IROLs
in the currently-effective TOP Reliability Standards to ensure whether
they adequately addressed the handling of these limits. In particular,
the standard drafting team was concerned that the transition from the
NERC Operating Guidelines to the Version 0 standards had resulted in an
incorrect emphasis on non-IROL SOLs as opposed to IROLs. The standard
drafting team noted a discrepancy among the three currently-effective
SOL/IROL-related requirements.\21\ According to NERC, in Reliability
Standards TOP-002-2a, Requirement R10 and TOP-004-2, Requirement R1,
applicable entities are expected to plan and operate to meet all SOLs
and IROLs, while in TOP-007-0, R1, entities are only instructed to take
action for IROLs. According to NERC, the standard drafting team
concluded that the Version 0 standards did not accurately reflect what
the operating policies stated. Nevertheless, the standard drafting team
determined that non-IROL SOLs are still important. NERC explains that
reliability risk to the system exists when the system is operating in
conditions such that an IROL limit is exceeded for a time exceeding
Tv. Consequently, NERC revised the requirements related to
operating within limits by tying IROL actions to Tv. NERC
proposes Requirements R7 through R11 to address the transmission
operator's responsibilities over IROLs \22\ or SOLs \23\ that the
transmission operator identifies as necessary to support reliability
internal to its transmission operator area:
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    \21\ TOP-002-2a, Requirement R10: Each Balancing Authority and
Transmission Operator shall plan to meet all System Operating Limits
(SOLs) and Interconnection Reliability Operating Limits (IROLs).
TOP-004-2, Requirement R1: Each Transmission Operator shall operate
within the Interconnection Reliability Operating Limits (IROLs) and
System Operating Limits (SOLs). TOP-007-0, Requirement R2: Following
a Contingency or other event that results in an IROL violation, the
Transmission Operator shall return its transmission system to within
IROL as soon as possible, but not longer than 30 minutes.
    \22\ NERC defines an IROL as ``[t]he value (such as MW, MVar,
Amperes, Frequency or Volts) derived from, or a subset of the System
Operating Limits, which if exceeded, could expose a widespread area
of the Bulk Electric System to instability, uncontrolled
separation(s) or cascading outages.''
    \23\ NERC defines a SOL as ``[t]he value (such as MW, MVar,
Amperes, Frequency or Volts) that satisfies the most limiting of the
prescribed operating criteria for a specified system configuration
to ensure operation within acceptable reliability criteria. System
Operating Limits [pre- and post-Contingency] are based upon certain
operating criteria. . . .''

    R7. Each Transmission Operator shall not operate outside any
identified Interconnection Reliability Operating Limit (IROL) for a
continuous duration exceeding its associated IROL Tv.
    R8. Each Transmission Operator shall inform its Reliability
Coordinator of each SOL which, while not an IROL, has been
identified by the Transmission Operator as supporting reliability
internal to its Transmission Operator Area based on its assessment
of its Operational Planning Analysis.
    R9. Each Transmission Operator shall not operate outside any
System Operating Limit (SOL) identified in Requirement R8 for a
continuous duration that would cause a violation of the Facility
Rating or Stability criteria upon which it is based.
    R10. Each Transmission Operator shall inform its Reliability
Coordinator of its actions to return the system to within limits
when an IROL, or an SOL identified in Requirement R8, has been
exceeded.
    R11. Each Transmission Operator shall act or direct others to
act, to mitigate both the magnitude and duration of exceeding an
IROL within the IROL's Tv, or of an SOL identified in
Requirement R8.

NERC explains that the responsibility for monitoring and handling IROLs
is primarily given to the reliability

coordinator, but the transmission operator has the primary
responsibility to designate any SOLs that require special attention.
NERC indicates that the delineation in the proposed TOP Reliability
Standards with respect to operating within an identified IROL and in
designating important SOLs is an important distinction in the proposed
TOP Reliability Standards that is necessary for reliability.
    14. NERC adds that the proposed TOP Reliability Standards include a
requirement that provides for ``the identification of a sub-set of non-
IROL SOLs that are identified as important for local areas.'' \24\ NERC
indicates that the proposed requirements mandate exceedances of these
non-IROL SOLs to be monitored and reported to the reliability
coordinator, giving transmission operators ``the ability to ensure that
any non-IROL SOLs that are of concern to the transmission operator will
be monitored to ensure local consequences are managed.'' \25\
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    \24\ NERC TOP Petition at 19.
    \25\ Id. at 19-20.
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    15. NERC states that the ``difference between non-IROL SOLs and
IROLs is expressed in the difference between the consequences to the
System (or impact to reliability) should unplanned perturbations of the
System occur when the limit is being exceeded. For an IROL, the
consequences are described as Cascading, uncontrolled separation, or
instability.'' \26\ NERC explains that the consequences of non-IROL
SOLs are typically thought of in terms of equipment damage or total
loss of an element and are restricted to a limited or local area. NERC
states that the revised TOP requirements move the standards to where
the NERC Operating Guidelines intended them to be and ensure that the
reliability of the interconnected system will be maintained and even
enhanced because system operators ``will not be distracted from true
reliability issues by local system issues.'' \27\ NERC states that the
impact of exceeding a non-IROL SOL will not result in an Adverse
Reliability Impact.\28\
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    \26\ Id. at 19.
    \27\ NERC TOP Petition at 18.
    \28\ NERC TOP Petition at 18-19.
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    16. According to NERC, transmission operators may also identify and
communicate to their reliability coordinator any of the non-IROL SOLs
that are believed or anticipated to have potential to develop into
IROLs and, thus, to ensure that they too are monitored and managed.
NERC also explains that, while non-IROL SOLs are similar to IROLs in
that non-IROL SOLs must respect the ratings of equipment associated
with the facilities to which the non-IROL SOL applies, there is no
specific requirement established for a time exceedance similar to the
Tv of an IROL. According to NERC, because Tv may
be less than 30 minutes, Tv ``mandates a tighter time frame
for action than the 30-minute time that is mandated in the currently-
effective standards, thereby improving reliability of the bulk power
system.'' \29\
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    \29\ NERC TOP Petition at 18.
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Proposed TOP-002-3 (Operations Planning)
    17. NERC states that proposed Reliability Standard TOP-002-3
Requirements R1 through R3 require transmission operators to perform
Operational Planning Analyses to ensure operations within IROLs and
SOLs. The requirements for proposed Reliability Standard TOP-002-3 are
as follows:

    R1. Each Transmission Operator shall have an Operational
Planning Analysis that represents projected System conditions that
will allow it to assess whether the planned operations for the next
day within its Transmission Operator Area will exceed any of its
Facility Ratings or Stability Limits during anticipated normal and
Contingency event conditions.
    R2. Each Transmission Operator shall develop a plan to operate
within each Interconnection Reliability Operating Limit (IROL) and
each System Operating Limit (SOL) which, while not an IROL, has been
identified by the Transmission Operator as supporting reliability
internal to its Transmission Operator Area, identified as a result
of the Operational Planning Analysis performed in Requirement R1.
    R3. Each Transmission Operator shall notify all NERC registered
entities identified in the plan(s) cited in Requirement R2 as to
their role in those plan(s).

NERC explains that Requirement R1 requires transmission operators to
have an Operational Planning Analysis that will allow it to assess
whether the planned operations for the next-day will exceed any of its
facility ratings or stability limits during anticipated normal and
contingency event conditions. NERC also explains that Requirement R2
requires transmission operators to develop a plan that will help ensure
they do not operate in excess of limits identified in the Operational
Planning Analysis. NERC indicates that Requirement R3 requires that
entities be notified if they are identified in the transmission
operator's plans and that the notification should inform entities of
their role in the plans.
    18. According to NERC, requiring transmission operators to perform
Operational Planning Analyses that incorporate normal and contingency
situations for next-day operations while assuring appropriate limits
are not violated assures that the transmission operators ``will have a
plan to follow during Real-time operations that accurately reflects the
anticipated conditions of the day's operations, including the ability
to deliver generation to Load.'' \30\ NERC adds that Requirement R3 is
similar to the coordination requirements established in proposed
Reliability Standard TOP-001-2 by ensuring that all entities know their
role in next-day operations.
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    \30\ NERC TOP Petition at 22.
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Proposed TOP-003-2 (Operational Reliability Data)
    19. NERC states that proposed Reliability Standard TOP-003-2,
Requirements R1 through R5 were adapted for transmission operators and
balancing authorities based on similar, Commission-approved
requirements for reliability coordinators.\31\ The proposed
requirements include:
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    \31\ NERC TOP Petition at 23 (citing Reliability Standard IRO-
010-1a.)

    R1. Each Transmission Operator shall create a documented
specification for the data necessary for it to perform its
Operational Planning Analyses and Real-time monitoring. The
specification shall include:
    1.1. A list of data and information needed by the Transmission
Operator to support its Operational Planning Analyses and Real-time
monitoring.
    1.2. A mutually-agreeable format.
    1.3. A periodicity for providing data.
    1.4. The deadline by which the respondent is to provide the
indicated data.
    R2. Each Balancing Authority shall create a documented
specification for the data necessary for it to perform its analysis
functions and Real-time monitoring . . .
    R5. Each Transmission Operator, Balancing Authority, Generator
Owner, Generator Operator, Interchange Authority, Load-Serving
Entity, Transmission Owner, and Distribution Provider receiving a
data specification . . . shall satisfy the obligations of the
documented specifications for data.

NERC states that the proposed requirements emphasize the need for
transmission operators and balancing authorities to obtain all of the
data they need for reliability purposes and mandate that entities that
have this data timely provide it to the transmission operator and
balancing authority. According to NERC, lack of adequate data for real-
time operations and modeling have contributed to system incidents in
the past, and the data specification concept will eliminate this
problem by allowing transmission operators and balancing authorities to

require entities to send them any required data.
NERC's Response to Order No. 693 Directives and Analysis of Southwest
Outage Report
    20. NERC indicates that its staff analyzed the recommendations from
the report on the Arizona-Southern California Outages on September 8,
2011, Causes and Recommendations (``2011 Southwest Outage Blackout
Report'') that apply to transmission operators and compared the
recommendations to both the currently-effective TOP Reliability
Standards and the proposed Reliability Standards.\32\ The TOP Petition
provides that, ``[b]ased on this analysis, NERC staff believes that if
entities complied with the proposed TOP Reliability Standards, the
likelihood of such an event occurring would be significantly
diminished.'' \33\ NERC includes as Exhibit H a detailed report on this
analysis, including the relevant 2011 Southwest Outage Blackout Report
recommendations with an explanation of how the relevant recommendations
would be addressed in the proposed TOP Reliability Standards.
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    \32\ NERC TOP Petition at 6 and Exh. H.
    \33\ NERC TOP Petition at 6.
---------------------------------------------------------------------------

    21. The NERC TOP Petition includes a summary of nine Order No. 693
directives related to the proposed TOP Reliability Standards and NERC's
responses to those directives in Exhibit I. NERC also explains that,
rather than addressing two directives from Order No. 693 relating to
minimum analysis and monitoring capabilities in the proposed TOP
Reliability Standards and proposed IRO Reliability Standards, the
standard drafting team chose to have them addressed by the Project
2009-02 Standard Drafting Team.\34\ According to NERC, it ``is
developing a set of Reliability Standards in Project 2009-02, which is
expected to be completed in 2014,'' that will establish requirements
for the functionality, performance, and maintenance of real-time
monitoring and analysis capabilities for reliability coordinators,
transmission operators, generator operators, and balancing authorities
for use by their system operators in support of reliable system
operations.\35\
---------------------------------------------------------------------------

    \34\ One directive is applicable to Reliability Standard IRO-002
and is described in PP 905 and 906 of Order No. 693, and the second
directive is applicable to Reliability Standard TOP-006 and is
described in P 1660.
    \35\ NERC IRO Petition at 27.
---------------------------------------------------------------------------

TOP Implementation Plan
    22. NERC states that some of the proposed revisions to the TOP
Reliability Standards are dependent on corresponding changes to
proposed IRO Reliability Standards (IRO-001-3 and IRO-005-4) and to one
Verification and Data Reporting of Generator Real and Reactive Power
Capability Reliability Standard--MOD-025-2. NERC states that the
proposed TOP Reliability Standards cannot be implemented until all
three of the above standards have been implemented.
    23. In its implementation plan, NERC also states that there ``are
no new definitions in the proposed set of standards'' but the standard
drafting teams for the TOP and IRO projects have coordinated on a
common definition of ``Reliability Directive'' and agreed that the IRO
standard drafting team ``would write the definition and post it for
vetting by the industry.'' The definition is as follows:

    Reliability Directive--A communication initiated by a
Reliability Coordinator, Transmission Operator, or Balancing
Authority where action by the recipient is necessary to address an
Emergency or Adverse Reliability Impacts.

Further, the IRO-014-2 implementation plan indicates that a revised
definition for ``Adverse Reliability Impact'' was approved by the NERC
Board of Trustees on August 4, 2011; however, the petition does not
discuss the merits of this change.\36\ In addition, NERC does not
discuss the impact of this revised definition on the overall body of
Reliability Standards.
---------------------------------------------------------------------------

    \36\ Adverse Reliability Impact (ARI)--Previous Definition--The
impact of an event that results in frequency-related instability;
unplanned tripping of load or generation; or uncontrolled separation
or cascading outages that affects a widespread area of the
Interconnection. ARI--Revised Definition--The impact of an event
that results in the Bulk Electric System instability or Cascading.
---------------------------------------------------------------------------

    24. NERC requests that all requirements except proposed Reliability
Standard TOP-003-2, Requirements R1 and R2 become effective the first
day of the first calendar quarter twelve months following applicable
regulatory approval.\37\ NERC also requests that Requirements R1 and R2
of proposed Reliability Standard TOP-003-2 become effective the first
day of the first calendar quarter ten months following applicable
regulatory approval. NERC explains that the twelve month period is to
allow for entities to update processes and train operators on the
revised requirements, and the two month differential for proposed
Reliability Standard TOP-003-2, Requirements R1 and R2 is to provide
time for recipients of a data specification to respond to the request
for data.\38\
---------------------------------------------------------------------------

    \37\ NERC also requests that the existing TOP Reliability
Standards be retired at midnight of the day immediately prior to the
first day of the first calendar quarter twelve months following
applicable regulatory approval.
    \38\ NERC TOP Petition, Exh. C at 2.
---------------------------------------------------------------------------

B. NERC's IRO Petition (Docket No. RM13-15-000)

    25. Also on April 16, 2013, NERC submitted for Commission approval
four revised IRO Reliability Standards: IRO-001-3 (Responsibilities and
Authorities), IRO-002-3 (Analysis Tools), IRO-005-4 (Current Day
Operations), and IRO-014-2 (Coordination Among Reliability
Coordinators).\39\ NERC also requests approval of the implementation
plan for the proposed IRO Reliability Standards, and approval of the
retirement of six currently-effective Reliability Standards, effective
at midnight immediately prior to the first day of the first calendar
quarter that is twelve months following the effective date of a final
rule in this proceeding.\40\ NERC indicates that its petition also
addresses two Order No. 693 directives associated with Reliability
Standard IRO-005-1, but that it does not address a directive associated
with Reliability Standard IRO-002-1 because this directive falls under
the scope of Real-Time Tools Best Practices Task Force.
---------------------------------------------------------------------------

    \39\ NERC states that the NERC Board of Trustees approved a
proposed Reliability Standard IRO-001-2 Reliability Standard on
August 4, 2011, that was subsequently revised before it was filed at
the Commission. The revision is designated as Reliability Standard
IRO-001-3, was approved by the Board on August 16, 2012, and is
included in this petition for approval. NERC IRO Petition at 4 n.5.
    \40\ NERC proposes to retire Reliability Standards IRO-001-1.1
(Responsibilities and Authorities); IRO-002-2 (Facilities); IRO-005-
3a (Current Day Operations); IRO-014-1 (Procedures, Processes, or
Plans to Support Coordination Between Reliability Coordinators);
IRO-015-1 (Notifications and Information Exchange Between
Reliability Coordinators); IRO-016-1 (Coordination of Real-time
Activities Between Reliability Coordinators).
---------------------------------------------------------------------------

    26. NERC identifies two ``overall reliability benefits'' of the
proposed IRO Reliability Standards: (1) Delineating a ``clean division
of responsibilities'' between the reliability coordinator and
transmission operator, giving the reliability coordinator authority to
direct transmission operators to take actions to prevent or mitigate
Interconnection Reliability Operating Limits (IROLs); and (2) ``raising
the bar'' on IROL/SOL monitoring to focus on only those important to
reliability. NERC also identifies four ``improvements'' reflected in
the proposed IRO Reliability Standards, as follows:
     Interconnected bulk electric systems will be planned and
operated in a coordinated manner to perform

reliably under normal and abnormal conditions.
     Personnel responsible for planning and operating
interconnected bulk electric systems will be trained, qualified, and
have the responsibility and authority to implement actions.
     The security of the interconnected bulk electric systems
will be assessed, monitored and maintained on a wide-area basis.
     Plans for emergency operation and system restoration * * *
will be developed, coordinated, maintained and implemented.\41\
---------------------------------------------------------------------------

    \41\ NERC IRO Petition at 11.
---------------------------------------------------------------------------

IRO-001-3 (Responsibilities and Authorities)
    27. NERC proposes to replace the nine currently-effective
requirements of Reliability Standard IRO-001-1 with the following three
requirements in proposed IRO-001-3:

    R1. Each Reliability Coordinator shall have the authority to act
or direct others to act (which could include issuing Reliability
Directives) to prevent identified events or mitigate the magnitude
or duration of actual events that result in an Emergency or Adverse
Reliability Impact.
    R2. Each Transmission Operator, Balancing Authority, Generator
Operator, and Distribution Provider shall comply with its
Reliability Coordinator's direction unless compliance with the
direction cannot be physically implemented or unless such actions
would violate safety, equipment, regulatory, or statutory
requirements.
    R3. Each Transmission Operator, Balancing Authority, Generator
Operator, and Distribution Provider shall inform its Reliability
Coordinator upon recognition of its inability to perform as directed
in accordance with Requirement R2.

    NERC states that these requirements ensure that reliability
coordinators ``have the responsibility and authority to act or direct
others to act (which could include issuing Reliability Directives) to
prevent identified events or mitigate the magnitude or duration of
actual events that result in an Emergency or Adverse Reliability
Impact.'' \42\ According to NERC, these proposed requirements ``ensure
that the responsibility and authority to act or direct others to act
(which could include issuing Reliability Directives) to prevent
identified events or mitigate the magnitude or duration of actual
events that result in an Emergency or Adverse Reliability Impact is
assigned to the Reliability Coordinator.'' \43\
---------------------------------------------------------------------------

    \42\ NERC IRO Petition at 12.
    \43\ NERC IRO Petition at 12-13.
---------------------------------------------------------------------------

    28. NERC states that the changes to the proposed Reliability
Standard IRO-001-3 are a result of the proposed retirement of the
currently-effective Reliability Standard IRO-001-1.1, Requirement R7,
which is now covered in proposed Reliability Standard IRO-014-2.\44\
According to NERC, Reliability Standard IRO-014-2 will continue to
ensure that both coordination agreements are in place to require that
IROLs and SOLs are managed, and that system conditions that could cause
Adverse Reliability Impacts are mitigated.
---------------------------------------------------------------------------

    \44\ Currently-effective Requirement R7 states: The Reliability
Coordinator shall have clear, comprehensive coordination agreements
with adjacent Reliability Coordinators to ensure that System
Operating Limit or Interconnection Reliability Operating Limit
violation mitigation requiring actions in adjacent Reliability
Coordinator Areas are coordinated.
---------------------------------------------------------------------------

IRO-002-3 (Analysis Tools)
    29. NERC proposes two new requirements pertaining to analytical
tools and to retire Requirements R1 through R7 of currently-effective
Reliability Standard IRO-002-2. The two proposed requirements provide:

    R1. Each Reliability Coordinator shall provide its System
Operators with the authority to approve, deny or cancel planned
outages of its own analysis tools.
    R2. Each Reliability Coordinator shall have procedures in place
to mitigate the effects of analysis tool outages.

    30. NERC states that the currently-effective requirements contain
redundancies, which the proposed revision are intended to eliminate.
NERC states that it revised Requirement R8 and incorporated it into
proposed Requirements R1 and R2 of Reliability Standard IRO-002-3. NERC
also indicates that it is developing a set of Reliability Standards in
Project 2009-02, that will establish requirements for the
functionality, performance, and maintenance of real-time monitoring and
analysis capabilities which affects Reliability Standard IRO-002.
IRO-005-4 (Current Day Operations)
    31. NERC proposes the following two new requirements for proposed
Reliability Standard IRO-005-4:

    R1. When the results of an Operational Planning Analysis or
Real-time Assessment indicate an anticipated or actual condition
with Adverse Reliability Impacts within its Reliability Coordinator
Area, each Reliability Coordinator shall notify all impacted
Transmission Operators and Balancing Authorities in its Reliability
Coordinator Area.
    R2. Each Reliability Coordinator that identifies an anticipated
or actual condition with Adverse Reliability Impacts within its
Reliability Coordinator Area shall notify all impacted Transmission
Operators and Balancing Authorities in its Reliability Coordinator
Area when the problem has been mitigated.

    32. NERC states that proposed Reliability Standard IRO-005-4 is a
result of eliminating redundancies between existing and proposed
standards. NERC also states that the requirements are to ``ensure that
entities are notified when an expected or actual event with Adverse
Reliability Impacts is identified.'' \45\
---------------------------------------------------------------------------

    \45\ NERC IRO Petition at 28.
---------------------------------------------------------------------------

IRO-014-2 (Coordination Among Reliability Coordinators)
    33. NERC proposes the eight requirements of Reliability Standard
IRO-014-2 to replace the currently-effective Reliability Standards IRO-
014-1, IRO-015-1 and IRO-016-1. NERC states that proposed Reliability
Standard IRO-014-2 ensures that each reliability coordinator's
operations are coordinated to avoid an Adverse Reliability Impact on
other reliability coordinator areas and to preserve the reliability
benefits of interconnected operations. Proposed Reliability Standard
IRO-014-2 provides in part:

    IRO-014-2 R1. Each Reliability Coordinator shall have Operating
Procedures, Operating Processes, or Operating Plans for activities
that require notification, exchange of information or coordination
of actions that may impact other Reliability Coordinator Areas to
support Interconnection reliability. These Operating Procedures,
Processes, or Plans shall collectively address the following:
    1.1. Communications and notifications, including the mutually
agreed to conditions under which one Reliability Coordinator
notifies other Reliability Coordinators; the process to follow in
making those notifications; and the data and information to be
exchanged with other Reliability Coordinators.
    1.2. Energy and capacity shortages.
    1.3. Planned or unplanned outage information.
    1.4. Control of voltage, including the coordination of reactive
resources.
    1.5. Coordination of information exchange to support reliability
assessments.
    1.6. Authority to act to prevent and mitigate system conditions
which could cause Adverse Reliability Impacts to other Reliability
Coordinator Areas.
    1.7. Weekly conference calls.
    R5. Each Reliability Coordinator, upon identification of an
Adverse Reliability Impact, shall notify all other Reliability
Coordinators.
    R6. During each instance where Reliability Coordinators disagree
on the existence of an Adverse Reliability Impact each impacted
Reliability Coordinator shall operate as though the problem exists.
    R7. During those instances where Reliability Coordinators
disagree on the existence of an Adverse Reliability Impact,

the Reliability Coordinator that identified the Adverse Reliability
Impact shall develop an action plan to resolve the Adverse
Reliability Impact.

    34. NERC states that Requirement R1 is the same as the currently-
effective requirement except for the addition of Part 1.7, which
requires reliability coordinators to have weekly conference calls.
Additionally, while Requirement R1 of Reliability Standard IRO-014-1
addresses ``Operating Procedures, Operating Processes, or Operating
Plans for activities that require notification, exchange of information
or coordination of actions that may impact other Reliability
Coordinator Areas to support Interconnection reliability,'' NERC states
that proposed Requirement R1 defines specific information that is to be
included in the procedures, processes, and plans.
IRO Implementation Plan
    35. NERC proposes as the effective date for Reliability Standard
IRO-001-3, the first day of the second calendar quarter beyond the date
that the standard is approved by the Commission. NERC states that this
time will allow applicable entities adequate time to develop the
documentation and other evidence necessary to exhibit compliance with
the requirements. NERC proposes as the effective date for Reliability
Standards IRO-002-3 and IRO-005-4 the first day of the first calendar
quarter following the effective date of a final rule because the
revisions are ``to an existing mandatory and enforceable standard,
applicable entities are already complying with the existing standard.''
\46\
---------------------------------------------------------------------------

    \46\ NERC IRO Petition, Exh. A at 8.
---------------------------------------------------------------------------

    36. For proposed Reliability Standard IRO-014-2, NERC proposes the
first day of the first calendar quarter that is twelve months following
the effective date of a final rule as the effective date. NERC states
that, while the revisions to this Reliability Standard are to an
existing mandatory and enforceable standard, ``applicable entities
should only have to make minor revisions to their Operating Plans,
Operating Processes or Operating Procedures to show compliance.'' \47\
---------------------------------------------------------------------------

    \47\ NERC IRO Petition, Exh. A at 8-9.
---------------------------------------------------------------------------

    NERC also proposes retirement of the six IRO Reliability Standards,
effective at midnight immediately prior to the first day of the first
calendar quarter that is twelve months following the effective date of
a final rule.

C. Proposed Revisions to Reliability Standard TOP-006-3 (Docket No.
RM13-12)

    38. On April 4, 2013, NERC proposed revisions to Reliability
Standard TOP-006-3 to divide the reporting responsibilities of
balancing authorities and transmission operators into separate
requirements. According to NERC, the proposed revisions clarify that
transmission operators are responsible for monitoring and reporting
available transmission resources, while balancing authorities are
responsible for monitoring and reporting available generation
resources. NERC states that this division is consistent with the roles
and responsibilities of registered entities as set forth in NERC
Reliability Functional Model.
    39. NERC states that, as currently written, Requirement R1.2 could
be interpreted as duplicating efforts to monitor and report the
availability of generation and transmission resources. NERC explains
that it specifically requires both transmission operators and balancing
authorities to inform reliability coordinators and other affected
transmission operators and balancing authorities of all transmission
and generation resources available for use. To address these concerns,
NERC revised Requirement R1.2 to limit a transmission operator's
monitoring and notification obligations to transmission resources
available for use. NERC created Requirement R1.3 to limit a balancing
authority's monitoring and notification obligations to generation
resources available for use. NERC explains that proposed Requirement
R1.3 only requires balancing authorities to inform reliability
coordinators of all generation resources available for use, and they
are not required to report the availability of generation resources to
transmission operators because transmission operators already receive
this information from generator operators pursuant to currently
effective Requirement R1.1. According to NERC, by defining the
reporting channels from transmission operators and balancing
authorities to reliability coordinators, reliability coordinators will
receive necessary information in advance, as part of their operating
tools, processes and procedures, to prevent and mitigate emergency
operating situations in real and next day operations.
    40. In addition, NERC proposes to modify currently-effective
Requirement R3. According to NERC, while the currently-effective
Requirement R3 requires reliability coordinators, transmission
operators and balancing authorities to provide appropriate technical
information concerning protective relays to their operating personnel,
NERC states that it does not impose explicit geographical boundaries on
the scope of this obligation. NERC indicates that revised Requirement
R3 specifies that the relevant protective relays are those within these
entities' respective reliability coordinator area, transmission
operator area or balancing authority area.
    41. NERC has proposed medium Violation Risk Factors (VRFs) for
proposed TOP-006-3, Requirements R1.2, R1.3 and R3 because these three
Requirements all ensure that critical reliability parameters are
monitored in real-time. NERC also states that the proposed Violation
Security Levels (VSLs) for Requirement R1.3 meet NERC's VSL guidelines.
NERC requests that the revisions become effective on the first day of
the first calendar quarter after applicable regulatory approval.

II. Discussion

    42. Pursuant to section 215(d) of the FPA, we propose to remand
NERC's proposed revisions to the TOP and IRO Reliability Standards
(Docket Nos. RM13-14-000 and RM13-15-000). While we believe that NERC's
approach of condensing the requirements and removing redundancies
generally has merit, we are concerned that, unlike the currently-
effective TOP Reliability Standards, there is no requirement in the
proposed standards for transmission operators to plan and operate
within all SOLs. Without a requirement to analyze and operate within
all SOLs in the proposed standards and by limiting non-IROL SOLs to
only those identified by the transmission operator internal to its
area, system reliability is reduced and negative consequences can occur
outside of the transmission operator's internal area. As described
below, this was a problem during the Southwest Outage when the loss of
a 500 kV line in Arizona Public Service's area overloaded equipment,
which ultimately resulted in a cascade outage leaving approximately 2.7
million customers without power.\48\ The provisions in the proposed TOP
Reliability Standards that require transmission operators to operate
only within a subset of SOLs offsets the potential benefits the
proposed Reliability Standards may otherwise provide.
---------------------------------------------------------------------------

    \48\ 2011 Southwest Outage Blackout Report at 1.
---------------------------------------------------------------------------

    43. The Commission believes that NERC's proposal for the treatment
of SOLs affects at least proposed Reliability Standard TOP-002-3,
Requirements R1 and R2 as well as

proposed Reliability Standard TOP-001-2, Requirements R8 through R11.
Section 215(d)(4) requires that the Commission remand to the ERO for
further consideration a Reliability Standard ``that the Commission
disapproves in whole or in part.'' \49\ Thus, notwithstanding the
organizational and administrative improvements contained in other
provisions of proposed TOP Reliability Standards, our concern regarding
the treatment of SOLs provides us no option other than to propose to
remand the entire Reliability Standards TOP-001-2 and TOP-002-3.
---------------------------------------------------------------------------

    \49\ 16 U.S.C. 824o(d)(4) (2012) (emphasis added).
---------------------------------------------------------------------------

    44. In addition to addressing the SOL issue in the TOP Reliability
Standards, we also propose to direct that NERC, on remand, develop
modifications to the IRO Reliability Standards to ensure that
reliability coordinators continue to develop and implement
comprehensive generation and transmission outage coordination
processes.
    45. Given that the SOL and outage coordination process issues
pertain to numerous requirements across the proposed standards, the
interrelationship among the TOP standards and between the TOP and IRO
Reliability Standards, and that NERC requests that both sets of
standards be addressed together, we propose to remand the entire set of
TOP and IRO Reliability Standards.\50\ This approach will give industry
and NERC flexibility to develop modifications to the standards that
address the concerns identified in this NOPR.
---------------------------------------------------------------------------

    \50\ NERC TOP Petition at 1-2.
---------------------------------------------------------------------------

    46. Further, the Commission discusses below certain provisions of
NERC's proposal that require clarification or further technical
explanation. Depending on the explanations provided by NERC and other
interested entities in comments to this NOPR, additional Commission
action may be appropriate, including the identification of additional
issues that NERC must address on remand.
    47. Finally, pursuant to section 215(d) of the FPA, we also propose
to approve NERC's proposed revisions to Reliability Standard TOP-006-3.
We find that proposed TOP-006-3 is sufficiently separate from the
standards we propose to remand above. Below, we discuss: (A) The
proposed TOP Standards; (B) the proposed IRO Standards; and (C) the
proposed revisions to Reliability Standard TOP-006-3.

TOP Reliability Standards

Issue To Be Addressed
a. Plan and Operate Within All SOLs
NERC Petition
    48. Currently-effective Reliability Standard TOP-002-2a,
Requirement R10 requires the transmission operator to plan to meet all
SOLs and IROLs. Similarly, currently-effective Reliability Standard
TOP-004-2, Requirement R1 requires transmission operators to operate
within all IROLs and SOLs.
    49. Proposed Reliability Standard TOP-002-3, Requirement R2
provides that each transmission operator still plan to operate within
all IROLs but within only a sub-set of SOLs. It states that each
transmission operator ``shall develop a plan to operate within each
[IROL] and each [SOL] which, while not an IROL, has been identified by
the Transmission Operator as supporting reliability internal to its
Transmission Operator area'' as a result of its Operational Planning
Analysis performed in Reliability Standard TOP-002-3, Requirement R1.
    50. NERC states that it is appropriate to limit Requirement R2 to a
sub-set of ``non-IROL SOLs'' that are important to local areas and that
the identified subset of non-IROL SOLs will be subject to the
requirements of the proposed Reliability Standards. NERC states that
non-IROL SOLs are typically thought of in terms of ``equipment damage
or [element] loss of life'' and are restricted to a limited or local
area.\51\ According to NERC, the standard drafting team concluded that
it is not necessary to monitor all non-IROL SOLs because the ``true
reliability requirement is to operate within IROLs and that non-IROL
SOLs are a local operating issue.'' \52\ NERC explains that the
``difference between non-IROL SOLs and IROLs is expressed in the
difference between the consequences to the System (or impact to
reliability) should unplanned perturbations of the system occur when
the limit is being exceeded.'' \53\ According to NERC, the consequences
of exceeding an IROL are described as cascading, uncontrolled
separation, or instability.\54\ NERC states that the impact of
exceeding a non-IROL SOL will not result in an Adverse Reliability
Impact.\55\
---------------------------------------------------------------------------

    \51\ NERC states that the revised TOP requirements move the
standards to where the NERC Operating Guidelines intended them to be
and ensure that the reliability of the interconnected system will be
maintained and even enhanced because system operators will not be
distracted from true reliability issues by local system issues. NERC
TOP Petition at 18.
    \52\ NERC TOP Petition, Exh. D, Consideration of Comments
(Consideration of Comments on Second Draft of Standards for Real-
Time Operations) at 23.
    \53\ NERC TOP Petition at 19.
    \54\ Id.
    \55\ NERC TOP Petition at 19.
---------------------------------------------------------------------------

Commission Proposal
    51. The Commission is concerned with NERC's proposal because,
unlike the currently-effective TOP Reliability Standards, the proposed
standards do not require the transmission operator to plan and operate
within SOLs, only non-IROL SOLs that are identified by the transmission
operator as supporting reliability internal to its area and identified
as a result of an Operational Planning Analysis.\56\ For example, non-
IROL SOLs that appear to be excluded from the proposed standard are
non-IROL SOLs that are in a transmission operator's area that impact
another transmission operator's area or more than one transmission
operator's area.
---------------------------------------------------------------------------

    \56\ NERC's Functional Model states one of the tasks of
transmission operations is to ``[d]evelop system limitations such as
System Operating Limits. . .and operate within those limits.''
NERC's ``Reliability Functional Model Function Definitions and
Functional Entities Version 5'' at 37 available at www.nerc.com.
---------------------------------------------------------------------------

    52. During deteriorating system conditions, an SOL can rapidly
degrade into an IROL. Limiting the requirement for transmission
operators to analyze and operate within SOLs only to non-IROL SOLs
identified by the transmission operator for its internal area can
reduce system reliability because operators have less situational
awareness of the system and conditions. Even if we accept the argument
that our rules for operating bulk electric facilities should not be
concerned with ``equipment damage or [element] loss of life,'' NERC has
not explained adequately why the only ``true reliability requirement is
to operate within IROLs and that non-IROL SOLs are a local operating
issue.'' Major cascading events including the Northeast Blackout of
2003 and the 2011 Southwest Outage were initiated by a non-IROL SOL
exceedance, followed by a series of non-IROL SOLs exceedances until the
system cascaded.\57\ Thus, while non-IROL SOLs are essentially defined
as not posing a risk of cascading outages, instability or uncontrolled
separation if they are exceeded, experience indicates that operators do
not always foresee the consequences of exceeding such SOLs and thus
cannot be sure of preventing harm to reliability. The Commission
believes that when any facility ratings or stability limits are
exceeded or expected to be exceeded (i.e. causing a SOL or an expected
SOL on jurisdictional facilities), these

conditions should be mitigated to avoid the possibility of further
deteriorating system conditions and a cascade event.
---------------------------------------------------------------------------

    \57\ See 2003 Northeast Blackout Report at 74 and the 2011
Southwest Outage Blackout Report at 1.
---------------------------------------------------------------------------

    53. We recognize that, if IROLs and non-IROL SOLs are determined
accurately, the reliability consequences of an exceedance should
usually be greater for the former than the latter. If NERC or
commenters believe this probability warrants general exclusion of the
latter from the TOP Reliability Standards (subject to an entity's
specific inclusions), they should explain this view in more detail and
present any information that may help us weigh its merit.
    54. Moreover, we believe that proposed Reliability Standard TOP-
002-3, Requirement R1 is flawed because the transmission operator
should have an operational plan to operate within all Bulk-Power System
IROLs and SOLs for all cases when facility ratings or stability limits
are exceeded during anticipated normal and contingency event
conditions. The operational plan is needed to ensure the transmission
operator operates in, or can return its system to, a reliable operating
state. For example, the 2011 Southwest Outage Blackout Report raised a
similar concern, stating that transmission operators should ``ensure
that post-contingency mitigation plans reflect the time necessary to
take mitigating actions, including control actions, to return the
system to secure N-1 state as soon as possible but no longer than 30
minutes following a single contingency.'' \58\ We believe that the
transmission operator should have operational or mitigation plans for
all Bulk-Power System IROLs and SOLs that can be implemented within 30
minutes or less to return the system to a secure state. Absent such
plans, system conditions can linger in an unsecure or emergency state
exposing the system to cascading outages upon the next contingency.
Thus, we are concerned that Requirement R1 is insufficient for the
fundamental operation of the interconnected transmission network as
proposed by NERC.
---------------------------------------------------------------------------

    \58\ Southwest Outage Blackout Report (Recommendation 13 at 90).
In addition, in Order No. 693 the Commission stated that operational
plans for all IROLs should include the ``[i]dentification and
communication of control actions [to system operators] that can be
implemented within 30 minutes'' following a contingency to return
the system to a reliable operating state. . . .'' Order No. 693,
FERC Stats. & Regs. ] 31,242 at P 1601.
---------------------------------------------------------------------------

    55. Similarly, proposed Reliability Standard TOP-001-2,
Requirements R8 through R11 address transmission operator notification,
operation and action with respect to IROLs and some SOLs based on the
transmission operator's next-day Operational Planning Analysis. Because
proposed Reliability Standard TOP-001-2, Requirement R8 requires a
transmission operator's notification of only those SOLs identified in a
next-day Operational Planning Analysis, the Commission believes it is
possible for additional SOLs to develop or occur in the same-day or
real-time operational time horizon. This could impose an operational
risk to the interconnected transmission network. For example, if real-
time system load levels are unexpectedly higher than forecasted load
conditions used in the Operational Planning Analysis, this condition
could result in real-time SOLs not identified in the Operational
Planning Analysis because facility ratings and stability limits are now
exceeded under high load levels whereas under the forecasted load
levels (lower load levels), facility ratings and stability limits were
not expected to be exceeded. Another example is if an unplanned outage
of a transmission element or generator unit occurred after the
completion of the next-day Operational Planning Analysis, this
condition may result in real-time SOLs not identified in the
Operational Planning Analysis because facility ratings and stability
limits are now possibly exceeded due to the change in the system
topology (i.e. transmission element outage) or generation dispatch
(i.e. generator unit outage) that redirected the power flow on some
portions of the interconnected transmission network.\59\ Thus, there
are various reasons why a SOL could occur in real-time operations due
to the dynamic nature of the real-time interconnected transmission
network and not be identified in the next-day Operational Planning
Analysis. To assure that transmission operators are equipped to react
to such situations, we believe that the Requirement R8 operational
responsibilities and actions should pertain to all IROLs and all SOLs
for all operating time horizons.
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    \59\ This condition was identified in the 2011 Southwest Outage
Blackout Report, which found that Imperial Irrigation District did
not perform a separate, updated next-day study and contingency
analysis for September 8, 2011 and instead, referenced a previous
study which was not valid because it did not match the load and
generation dispatch for the day. 2011 Southwest Outage Blackout
Report, Recommendation No. 1 at 66.
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    56. Accordingly, pursuant to section 215(d)(4) of the FPA, we
propose to remand proposed Reliability Standards TOP-001-2 and TOP-002-
3. Specifically, we propose to direct that NERC develop modifications
to Reliability Standard TOP-002-3, Requirements R1 and R2 that address
our concerns discussed above to ensure that transmission operators
develop mitigation plans for all IROLs and SOLs expected to be
exceeded. Similarly, for proposed Reliability Standard TOP-001-2,
Requirement R8, we propose to direct that NERC develop modifications to
require that transmission operator actions apply to all SOLs identified
in all operational time horizons (operations planning, same-day
operations and real-time operations). Further, for proposed Reliability
Standard TOP-001-2, Requirements R9 through R11, we propose to direct
that NERC develop modifications to require that transmission operator
specified actions apply to all SOLs related responsibilities in the
real-time operations time horizon. Our concerns discussed above apply
to specific provisions of proposed TOP-001-2 and TOP-002-3. However, as
explained above, we propose to remand proposed Reliability Standards
TOP-001-2 and TOP-002-3. Moreover, as explained above, because the TOP
standards are so interrelated, we also propose to remand Reliability
Standard TOP-003-2 to give NERC and industry flexibility to address our
concerns.
TOP Reliability Standards--Issues Requiring Clarification
a. System Models, Monitoring and Tools
NERC Petition
    57. NERC proposes to retire TOP and IRO Reliability Standards that
require reliability coordinators and transmission operators to maintain
and use certain models and analysis capabilities and monitoring. NERC
proposes to delete requirements for transmission operators to (1)
``maintain accurate computer models utilized for analyzing and planning
system operations''; (2) ``use monitoring equipment to bring to the
attention of operating personnel important deviations''; (3) ``use
sufficient metering . . . to ensure accurate and timely monitoring'';
and (4) ``have sufficient information and analysis tools to determine
the cause(s) of SOL violations. . . .'' \60\ NERC explains that these
transmission operator requirements are unnecessary because transmission
operators meet these requirements as part of NERC's certification
process or are in other

currently-effective or proposed standards.\61\
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    \60\ See Reliability Standards TOP-002-2.1b, Requirement R19,
TOP-006-2, Requirement R5, TOP-006-2, Requirement R6, and TOP-008-1,
R4, respectively.
    \61\ NERC TOP Petition, Exhibit J at 22, 34, 35, and 38.
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    Similarly, NERC proposes to retire Reliability Standard IRO-002-2
Requirements R4, R5, R6, and R7, which address real-time monitoring and
analysis capabilities and functions required to enable the reliability
coordinator to perform its responsibilities. According to NERC, these
requirements are unnecessary because they are inherent in the
reliability coordinator's duty to maintain area control error or
operate within IROLs/SOLs and can be verified in the certification
process.\62\ NERC also states that the Commission directives in Order
No. 693 applicable to a minimum set of analytical tools and applicable
to reliability coordinators and transmission operators will be
addressed in Project 2009-02--Real-time Monitoring and Analysis
Capabilities--that has a projected completion date of 2014. Further,
NERC proposes to retire other requirements of currently-effective
Reliability Standard TOP-006-2 which address real-time monitoring
responsibilities of the transmission operator.
---------------------------------------------------------------------------

    \62\ Section 500 of NERC's Rules of Procedure provide for an
organization certification program that is intended to ensure that
the an applicant to be a reliability coordinator, balancing
authority or transmission operator ``has the tools, processes,
training, and procedures to demonstrate their ability to meet the
Requirements/sub-Requirements of all of the Reliability Standards
applicable to the function(s) for which it is applying thereby
demonstrating the ability to become certified and then
operational.'' NERC Rules of Procedure at 44.
---------------------------------------------------------------------------

Commission Proposal
    59. In Order No. 693, the Commission directed NERC to develop
requirements for a minimum set of analytical tools (analysis and
monitoring capabilities) to ensure that a reliability coordinator has
the tools it needs to perform its functions.\63\ In its TOP Petition,
NERC discusses the importance of analytical tools and real-time
monitoring noting that, ``[a]ccording to the August 2003 Blackout
Report, a principal cause of the August 14, 2003 blackout was a lack of
situational awareness, which was in turn the result of inadequate
reliability tools.'' \64\ We agree with NERC's statement and believe
this is an area of reliability that requires vigilance. Moreover, our
view is reinforced by the 2011 Southwest Outage Blackout Report, which
found that ``[a]ffected TOP's real-time tools are not adequate or, in
one case, operational to provide the situational awareness necessary to
identify contingencies and reliably operate their systems'' and
consequently recommended that ``TOPs should take measures to ensure
that their real-time tools are adequate, operational, and run
frequently enough to provide their operators the situational awareness
necessary to identify and plan for contingencies and reliably operate
their systems.'' \65\
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    \63\ Order No. 693, FERC Stats. & Regs. ] 31,242, at PP 905,
906, 1660.
    \64\ NERC TOP Petition at 10. NERC also states that ``the
failure of control computers and alarm systems, incomplete tool
sets, and the failure to supply network analysis tools with correct
System data on August 14, contributed directly to this lack of
situational awareness. Also, the need for improved visualization
capabilities over a wide geographic area has been a recurrent theme
in blackout investigations.''
    \65\ 2011 Southwest Outage Blackout Report at 88 and Finding 12.
In addition, the 2011 Southwest Outage Blackout Report, Finding 27
(at 111) states that ``[a] TOP did not have tools in place to
determine the phase angle difference between two terminals of its
500 kV line after it tripped.''
---------------------------------------------------------------------------

    Monitoring and analysis capabilities are essential in establishing
and maintaining situational awareness. While NERC indicates that these
functions are assured through the certification process,\66\ we are not
convinced that NERC's certification process is a suitable substitute
for a mandatory Reliability Standard. Monitoring and assessment
capabilities must adapt to assess changing topography and system
conditions so that operators can continually maintain an adequate level
of situational awareness. In contrast, certification is a one-time
process that may not adequately assure continual operational
responsibility would occur if these requirements were in a Reliability
Standard.
---------------------------------------------------------------------------

    \66\ NERC TOP Petition, Exh. J at 33.
---------------------------------------------------------------------------

    In addition, as discussed above, NERC indicates that Standards
Project 2009-02, Real-time Monitoring and Analysis Capabilities, will
address the Commission directives in Order No. 693 that address a
minimum set of analytical tools. According to NERC, this project has a
projected completion date of 2014. NERC's retiring of current IRO and
TOP requirements that address monitoring and analysis capabilities
warrants expedition in the completion of Project 2009-02. The
retirement of the current IRO and TOP requirements that address
monitoring and analysis capabilities should not occur until the
completion and implementation of Project 2009-02.\67\ Thus, in its NOPR
comments NERC should propose a schedule that it will follow to ensure
it completes and implements Project 2009-02 prior to any retirement of
the standard such that there would be no gap.
---------------------------------------------------------------------------

    \67\ NERC's ``Standards Independent Experts Review Project''
(Industry Experts Report) identifies one aspect of Project 2009-02
as a ``high priority'' gap. Industry Experts Report at Appendix F.
The Industry Experts Report (App. F) identifies a high priority gap
for Project 2009-02 to define the requirements for EMS RTCA models
or performance expectations of the models; the Report also says
proposed TOP-002 should incorporate current requirement for tools to
determine cause of SOL violations.
---------------------------------------------------------------------------

b. Compliance With Reliability Directives
NERC Petition
    62. Currently-effective Reliability Standard TOP-001-1,
Requirements R3 and R4 require applicable entities to comply with
transmission operators' and reliability coordinators' ``reliability
directives,'' which currently is an undefined term. NERC proposes
Reliability Standard TOP-001-2, Requirement R1 which requires
applicable entities to comply with transmission operators'
``Reliability Directives,'' which NERC proposes to define as ``[a]
communication initiated by a Reliability Coordinator, Transmission
Operator, or Balancing Authority where action by the recipient is
necessary to address an Emergency or Adverse Reliability Impacts.''
\68\
---------------------------------------------------------------------------

    \68\ NERC's proposed definition of Reliability Directive does
not appear in the TOP Petition. Rather, NERC proposes the definition
in the IRO Petition, Exhibit C at 1 (IRO Implementation Plan).
---------------------------------------------------------------------------

    In its implementation plan, NERC states that it is not proposing
any new definitions but that the TOP standard drafting team coordinated
with the IRO drafting team to develop a definition of ``Reliability
Directive.'' This definition is included in the IRO implementation
plan.
Commission Proposal
    64. The currently-effective TOP Reliability Standards use
``reliability directive,'' which, as an undefined term, does not appear
to be limited to a specific set of circumstances. Also IRO Reliability
Standards use the term ``reliability directive'' in the same manner as
an undefined term.\69\ In contrast, application of the proposed
definition of ``Reliability Directive'' appears to require compliance
with transmission operator directives only in emergencies, not normal
or pre-emergency times. We believe that directives from a reliability
coordinator or transmission operator should be mandatory at all times,
and not just during emergencies (unless contrary to safety, equipment,
regulatory or statutory requirements). For example, mandatory
compliance with directives in non-emergency situations is important
when a decision is made to

alter or maintain the state of an element on the interconnected
transmission network. NERC staff has noted in the context of how to
communicate such directives that operating practices for such
directives should be consistent, no matter what type of operating
condition (normal, alert, emergency) exists.\70\ Moreover, the
transition from normal to emergency operation can be sudden and
indistinguishable until recognized, often after the damage is done.\71\
---------------------------------------------------------------------------

    \69\ See Reliability Standard IRO-002-2, Requirement R8.
    \70\ See COM-003-1, Operations Communications Protocols White
Paper, May 2012 at 12, available at nerc.com.
    \71\ See NERC staff's letter to ``Project 2009-22 Interpretation
of COM-002-2 R2 for IRC Drafting Team'' dated November 18, 2011, at
1, available at nerc.com.
---------------------------------------------------------------------------

    65. NERC's TOP and IRO petitions do not explain the proposed,
defined term ``Reliability Directive,'' or why compliance with a
transmission operator's directives should be required only during
emergencies (if this is the intent). Accordingly, we seek from NERC and
other interested entities clarification and technical explanation
regarding the scope and intent of the defined term, as well as the
anticipated reliability benefits and/or drawbacks of the proposed term.
    66. In addition, while NERC has included the proposed definition in
its implementation plan, NERC has not explained or justified its
request for approval of the revised definition. The Commission has held
that definitions are standards.\72\ Therefore, we cannot approve the
definition without a technical justification.
---------------------------------------------------------------------------

    \72\ As with Reliability Standards, the Commission reviews and
approves revisions to the NERC glossary pursuant to FPA section
215(d)(2). Further, the Commission may direct a modification to
address a specific matter identified by the Commission pursuant to
section 215(d)(5). See also Order No. 693, FERC Stats. & Regs. ]
31,242 at PP 1893-98.
---------------------------------------------------------------------------

c. Consideration of External Networks and sub-100 kV Facilities and
Contingencies in Operational Planning Analysis
NERC Petition
    67. In proposed Reliability Standard TOP-002-3, Requirement R1,
NERC proposes to require transmission operators to prepare an
Operational Planning Analysis, i.e., next day study, which represents
``projected System conditions'' to determine if their planned
operations will exceed facility ratings and stability limits for normal
and contingency conditions. NERC does not indicate whether this
includes external networks or sub-100 kV facilities.
Commission Proposal
    68. It is unclear whether NERC's proposal would require
transmission operators to include updated external networks to reflect
operating conditions external to their systems and (internal and
external) sub-100 kV facilities in their operational planning analyses.
In Order No. 693, the Commission directed a modification to planned
outage coordination to require consideration of facilities below 100 kV
that, in the opinion of the registered entity (such as a transmission
operator) ``will have a direct impact on the reliability of the Bulk-
Power System. . . .'' \73\ The 2011 Southwest Outage Blackout Report
includes similar recommendations that transmission operators should
ensure their next-day studies include updated external networks and
internal and external facilities (including those below 100 kV) that
can impact Bulk-Power System reliability.\74\ Although proposed
Reliability Standard TOP-002-3, Requirement R1 requires the
transmission operator to consider ``projected System conditions,'' it
is unclear whether ``projected System conditions'' include the relevant
updated external networks and (internal and external) sub-100 kV
facilities.
---------------------------------------------------------------------------

    \73\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1624.
    \74\ 2011 Southwest Outage Blackout Report, Recommendations Nos.
2 and 3.
---------------------------------------------------------------------------

    69. The Commission seeks clarification and technical explanation
from NERC whether the term ``projected System conditions'' in proposed
Reliability Standard TOP-002-3 Requirement R1 includes updated external
networks to reflect operating conditions external to their systems and
sub-100 kV facilities (internal and external) in their operational
planning analyses. If not, the Commission seeks comment on the
associated reliability risks and, whether it is appropriate to include
updated external networks to reflect operating conditions and external
and sub-100 kV facilities (internal and external) in the operational
planning analyses.
d. Operating To Respect the Most Severe Single Contingency in Real-Time
Operations and Unknown Operating States
NERC Petition
    70. NERC proposes to delete Reliability Standard TOP-004-2,
Requirement R2, which provides that each transmission operator ``shall
operate so that instability, uncontrolled separation, or cascading
outages will not occur as a result of the most severe single
contingency.'' NERC's Petition does not provide an explanation for the
deletion. However, the NERC ``mapping document,'' which is included as
an exhibit to the TOP Petition indicates that NERC intends that
Requirement R2 be replaced by proposed Reliability Standards TOP-001-2,
Requirements R7 and R9.\75\ Proposed Requirement R7 requires each
transmission operator to not operate outside any identified IROL ``for
a continuous duration exceeding its associated IROL Tv.''
Proposed Requirement R9 states each transmission operator shall not
operate outside any SOL identified in Requirement R8 ``for a continuous
duration that could cause a violation of the Facility Rating or
Stability criteria upon which it is based.'' Further, NERC proposes to
replace Reliability Standard TOP-008-1, Requirement R4 with multiple
proposed requirements from proposed Reliability Standards TOP-001-2,
TOP-002-3, and TOP-003-2. Reliability Standard TOP-008-1, Requirement
R4 requires that the transmission operator have information and
analysis tools to determine the causes of SOL violations, such as a
most severe single contingency event, and conduct this analysis in all
operating timeframes.
---------------------------------------------------------------------------

    \75\ NERC TOP Petition, Exhibit J at 25.
---------------------------------------------------------------------------

    71. With regard to unknown operating states, currently-effective
Reliability Standard TOP-004-2, Requirement R4 states that, if a
transmission operator ``enters an unknown operating state (i.e. any
state for which valid operating limits have not been determined), it
will be considered to be in an emergency and shall restore operations
to respect proven reliable power system limits within 30 minutes.''
\76\ Order No. 693 directed NERC to modify Requirement R4 to restore
the system ``to respect proven reliable power system limits as soon as
possible and in no longer than 30 minutes.'' \77\
---------------------------------------------------------------------------

    \76\ Reliability Standard TOP-004-2, Requirement R4.
    \77\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1636.
---------------------------------------------------------------------------

    72. In the TOP Petition, NERC proposes to replace Requirement R4
with proposed Reliability Standard TOP-001-2, Requirements R7 through
R11. Requirements R7 through 11 address the transmission operator's
responsibilities over IROLs or SOLs that have been identified by the
transmission operator as necessary to support reliability internal to
its transmission operator area. NERC explains that the proposed
requirements ``do not include an explicit reference to `unknown state'
since system limits can and should be determined and conditions can be

monitored to know when they have been exceeded.'' \78\ NERC also states
that unknown operating states ``cannot exist because valid operating
limits have been determined for all facilities in a TOP's footprint.''
\79\ In addition, NERC states that the proposed requirements ``prohibit
operations outside of IROLs, or SOLs identified in TOP-001-2. . . .''
\80\ Further, NERC explains that proposed Reliability Standard EOP-001-
2, which applies to emergency operations planning, covers the general
intent of being prepared to react to ``Emergencies.'' \81\
---------------------------------------------------------------------------

    \78\ NERC TOP Petition, Exhibit H at 5.
    \79\ NERC TOP Petition, Exhibit I at 4.
    \80\ NERC TOP Petition, Exhibit H at 5.
    \81\ NERC TOP Petition, Exhibit I (Resolution of Order No. 693
directives) at 4.
---------------------------------------------------------------------------

Commission Proposal
    73. NERC has proposed to retire three key rules here, i.e., the
requirements to be ready for the single largest contingency, to move
quickly from an ``unknown operating state'' to within proven limits,
and to determine the cause of SOL violations in all time-frames,
including real-time. We believe these three rules represent the bedrock
core of real-time operating rules and practices, and it is therefore
incumbent upon NERC to provide a more thorough and comprehensive
explanation of how the proposed replacement standards compare in
meeting the same objectives as the current standards. We request
comment on these concerns, as elaborated below.\82\
---------------------------------------------------------------------------

    \82\ The 2011 Southwest Outage Blackout Report indicated that
the September 8, 2011 cascade event ``showed that the system was not
being operated in a secure N-1 state'' and that ``[NERC's] mandatory
Reliability Standards . . . require that the BES be operated so that
it generally remains in a reliable condition, without instability,
uncontrolled separation or cascading, even with the occurrence of
any single contingency.'' 2011 Southwest Outage Blackout Report at
5.
---------------------------------------------------------------------------

    74. In particular, NERC should address whether its proposal would
allow a different approach to real-time operational assessments and
operation to the most severe single contingencies and, if so, NERC
should explain and technically support the nature and associated
reliability effects of any different approaches.\83\ How are the
proposed requirements to not exceed IROLs or certain SOLs for more than
the specified times are the functional or implicit equivalent of the
current rules? For example, do the proposed rules allow reliance on
post-contingency mitigation at times when the current rules would
require pre-contingency mitigation? If so, is the difference
significant for reliability purposes? Do both the current and proposed
rules prohibit an entity from operating for more than 30 minutes in a
state where loss of a particular line would cause the loss of enough
resources or load to risk cascading outages or instability? Or, if the
entity is not yet operating beyond the pre-determined ratings of the
particular line, would the proposed rules allow doing so while the
current rules do not? Should all transmission operators be required to
run a real-time contingency analysis (RTCA) frequently, since the lack
of such analysis can impair situational awareness substantially? Or is
the value of such information outweighed for smaller entities with such
limited facilities and operations that they generally can maintain
similar reliability based on operator experience and judgment without
any extra staffing and procedures needed to ensure that the RTCA's
informational inputs and modeling are valid and useful?
---------------------------------------------------------------------------

    \83\ Currently-effective Reliability Standard IRO-008-1,
Requirement R2 requires that ``[e]ach Reliability Coordinator shall
perform a Real-Time Assessment at least once every 30 minutes to
determine if its Wide Area is exceeding any IROLs or is expected to
exceed any IROLs.''
---------------------------------------------------------------------------

    75. With regard to mitigation of unknown operating states, while
NERC asserts that ``unknown states'' cannot exist, a transmission
provider could have valid operating limits for all facilities but lack
situational awareness when valid limits are exceeded. In addition, a
transmission operator could operate in an unanalyzed or unstudied state
(as a result of loss of EMS facilities that meter and report voltage,
MW flow and other key system indicators). For example, the 2011
Southwest Outage Blackout Report found that Western Area Power
Administration-Lower Colorado was operating in an ``unknown state''
when it lost its real-time contingency analysis capabilities and, at
the same time, did not notify its reliability coordinator to assist
with situational awareness.\84\ In light of this concern, the
Commission seeks comment and technical explanation from NERC and other
interested entities on the proposed retirement. As above, our main
question is whether the proposed rules are comparable to the current
rules for reliability purposes and, if not, whether the difference is
reasonable.
---------------------------------------------------------------------------

    \84\ 2011 Southwest Outage Blackout Report, Recommendation 15,
at 95 states that ``[a]n entity should never be operating in an
unknown state, as WALC [Western Area Power Administration-Lower
Colorado] was when it lacked functional RTCA [real-time contingency
analysis] and State Estimator, and did not ask any other entity to
assist it with situational awareness.'' Cf. NERC Compliance Filing,
Docket No. RM06-16-000 (Oct. 31, 2008) at 7 (``the Reliability
Coordinators in the West operate only to study conditions and note
that they do not operate in IROL conditions, only SOLs, unless there
are one or more unanticipated outages. In these cases, when an IROL
condition is experienced, the Reliability Coordinators must restore
the system to a known operating state within 20 minutes for
stability concerns and 30 minutes for thermal concerns.'').
---------------------------------------------------------------------------

e. System Protection Coordination
NERC Petition
    76. NERC proposes to replace currently-effective Requirements R2,
R5 and R6 in Reliability Standard PRC-001-1, with proposed Reliability
Standard TOP-003-2, Requirement R5.\85\ Currently-effective Reliability
Standard PRC-001-1, Requirement R2 requires generator operators and
transmission operators to notify affected entities of relay or
equipment failures and if the failure reduces system reliability, take
corrective action as soon as possible. Requirement R5 requires
generator operators and transmission operators to coordinate changes in
generation, transmission, load or operating conditions with appropriate
advance notice that could require changes in the protection systems of
others. Requirement R6 obligates transmission operators and balancing
authorities to monitor the status of each special protection system in
their area and to notify affected transmission operators and balancing
authorities of a change in status.
---------------------------------------------------------------------------

    \85\ NERC TOP Petition, Exhibit J at 40 and 41. According to
NERC (petition at 4), the ``corresponding changes in proposed PRC-
001-2 are administrative in nature and are limited to removal of
three requirements in currently-effective PRC-001-1 that are now
addressed in proposed TOP-003-2, included herein for approval.''
---------------------------------------------------------------------------

    77. Proposed Reliability Standard TOP-003-2, Requirement R5 states
that entities ``receiving a data specification in Requirement R3 or R4
shall satisfy the obligations of the documented specifications for
data.'' In the standard development process, the standard drafting team
explained that a ``data specification'' is required to contain all of
the information that a transmission operator and balancing authority
needs to fulfill its obligations.\86\ In addition, the standard
drafting team stated that the transmission operator and balancing
authority ``are the best ones to determine the contents of the data
specification and that any attempt to provide a minimal list or other
guidance

would be short-sighted and possibly misleading.'' \87\ The standard
drafting team indicated that ``an auditor can only question what is
contained in the requirements and in this case that would include only
the existence of the data specification and not its contents. Any
omissions of data will be caught up in failures to adhere to other
standards.'' \88\
---------------------------------------------------------------------------

    \86\ E.g., NERC TOP Petition, Exh. D, Consideration of Comments
(Consideration of Comments on the 7th Draft) at 72. Southwest Power
Pool Regional Entity stated that it ``does not believe TOP-003-2
addresses the requirements in PRC-001.'' Exh. D at 73. Texas
Reliability Entity states that ``Requirements R2, R5 and R6 of PRC-
001-1, which are proposed to be deleted, are not actually replaced
by any new or revised requirements in other standards, resulting in
reliability gaps.'' Exh. D at 89.
    \87\ NERC TOP Petition, Consideration of Comments (Consideration
of Comments on the 7th Draft) at 79. Southwest Power Pool Standards
Review Group states that ``[t]o be sure that all the bases are
covered, we would suggest that the SDT provide a guideline which
incorporates the types of data and information they envisioned when
drafting these requirements.'' Id.
    \88\ NERC TOP Petition, Consideration of Comments (Consideration
of Comments on the 7th Draft) at 88. Southwest Power Pool Standards
Review Group states that ``incorporating protective relay
information in the data specifications of R1 and R2 raises the
potential for auditors to question the contents of an entity's
specification.'' Id. at 79.
---------------------------------------------------------------------------

Commission Proposal
    78. The Commission seeks comment and technical explanation from
NERC and other interested entities on how current Reliability Standard
PRC-001-1 Requirement R2's requirement for corrective action (i.e.,
return a system to a stable state) is addressed in its proposal.\89\
Further, the Commission proposes that NERC issue guidance on data
needed for protection system coordination that addresses the applicable
Order No. 693 directives and the proposed retirement of the Reliability
Standard PRC-001-1 requirements.\90\
---------------------------------------------------------------------------

    \89\ In Order No. 693, the Commission required changes to
Requirement R2 of Reliability Standard PRC-001-1 to clarify
``corrective action'' (i.e., return a system to a stable state),
specify time limit for notification, and require corrective action
as soon as possible but no longer than 30 minutes. Order No. 693,
FERC Stats. & Regs. ] 31,242 at PP 1441, 1445 and 1449.
    \90\ In Order No. 693, the Commission directed NERC to develop a
modification to Reliability Standard TOP-006-1 to clarify ``the
meaning of `appropriate technical information' concerning protective
relays'' so that ``operators can make better informed decisions. An
example of such information would be the allowable reclosing angle
set in the existing relays and the maximum angle at specific points
in the Bulk-Power System that would be acceptable to allow closing
of lines during system restoration.'' Order No. 693, FERC Stats. &
Regs. ] 31,242, at P 1663 and P 1665.
---------------------------------------------------------------------------

f. Notification of Emergencies
NERC Petition
    79. Currently-effective TOP Reliability Standard TOP-001-1a
requires each transmission operator to inform its reliability
coordinator and other potentially affected transmission operators ``of
real time or anticipated emergency conditions, and take actions to
avoid, when possible, or mitigate the emergency.'' \91\ In its
petition, NERC proposes to retire Reliability Standard TOP-001-1a and
proposes as replacements Requirements R3-R6 of Reliability Standard
TOP-001-2. In particular, Requirement R3 provides ``[e]ach Transmission
Operator shall inform its Reliability Coordinator and Transmission
Operator(s) that are known or expected to be affected by each actual
and anticipated Emergency based on its assessment of its Operational
Planning Analysis.'' \92\ In addition, Requirement R3 has a time
horizon of ``Operations Planning,'' which NERC describes as the
``operating and resource plans from day-ahead up to and including
seasonal'' and does not include same-day operations or real-time
operations.\93\
---------------------------------------------------------------------------

    \91\ Reliability Standard TOP-001-1a, Requirement R5.
    \92\ The NERC Glossary defines Operational Planning Analysis as
``[a]n analysis of the expected system conditions for the next day's
operation . . . (That analysis may be performed either a day ahead
or as much as 12 months ahead.). Expected system conditions include
things such as load forecast(s), generation output levels, and known
system constraints.''
    \93\ See NERC Time Horizons at 1, available at http://www.nerc.com/pa/Stand/Resources/Documents/TimeHorizons.pdf at 1.
---------------------------------------------------------------------------

Commission Proposal
    80. NERC's proposed revisions warrant clarification. Read one way,
proposed Requirement R3 is less comprehensive than the currently-
effective requirements pertaining to notification of emergencies. Yet,
it also contains provisions that, read another way, could require TOPs
to notify others of all emergencies, not just day-ahead.\94\ Indeed,
during the standard development process, similar concerns were
expressed.\95\
---------------------------------------------------------------------------

    \94\ An ``anticipated'' emergency should apply to all
operational time horizons: Operations planning, same-day, and real-
time. Further, an ``actual'' emergency could only occur during the
real-time operational time horizon.
    \95\ NERC TOP Petition, Exh. D, Consideration of Comments
(Consideration of Comments on the 7th Draft) at 21: ``R3 seems to be
missing some words . . . it is not clear if this requirement is
supposed to be about planning (``expected to be affected by
anticipated Emergencies'') or real-time operations (``known to be
affected by actual Emergencies'') or both. If the latter is
intended, the Time Horizon should include Real-Time Operations and
Same Day Operations. . . .'' The standard drafting team responded
that ``it is clear as to what needs to be communicated.'' Id. at 23.
---------------------------------------------------------------------------

    81. Similarly, it is not clear whether proposed Reliability
Standard TOP-001-2, Requirement R5 would address same-day and real-time
operating emergencies not covered by TOP-001-2, Requirement R3.
Proposed TOP-001-2, Requirement R5, states that ``[e]ach [TOP] shall
inform its [RC] and other [TOPs] of its operations known or expected to
result in an Adverse Reliability Impact on those respective
Transmission Operator Areas. . . .'' The definition of Adverse
Reliability Impact in NERC's TOP filing is ``[t]he impact of an event
that results in frequency related instability; unplanned tripping of
load or generation; or uncontrolled separation or cascading outages
that affects a widespread area of the Interconnection.'' \96\ In
contrast, NERC defines Emergency as ``[a]ny abnormal system condition
that requires automatic or immediate manual action to prevent or limit
the failure of transmission facilities or generation supply that could
adversely affect the reliability of the Bulk Electric System.'' An
Adverse Reliability Impact is an event that results in instability, or
cascade conditions, while an Emergency includes conditions that could
be a precursor to an Adverse Reliability Impact. Thus, the notification
provisions of Requirement R5 do not cure the possible ambiguity in
proposed Requirement R3.
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    \96\ NERC TOP Petition at 19. In the IRO Petition, NERC cites a
different definition of Adverse Reliability Impact: ``[t]he impact
of an event that results in Bulk Electric System instability or
cascading.'' NERC IRO Petition at 3, n20.
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    82. While NERC states that the obligation to notify for real-time
emergency conditions was replaced by proposed Requirement R3, NERC does
not indicate in its petition that the real-time or same-day obligation
was purposely deleted or offer an explanation for the deletion.\97\ We
believe that, consistent with the currently-effective TOP Reliability
Standards, the notification requirement of proposed Reliability
Standard TOP-001-2 should apply to all emergencies, including real-time
and same day emergencies. The Commission seeks comment from NERC and
other interested entities regarding (1) the proper understanding of the
scope of the notification provisions in the proposed requirements and
(2) if the notification does not include all operational time horizons,
technical justification for why transmission operators should not be
required to notify reliability coordinators and other affected
transmission operators of all emergencies in all operating time
horizons.
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    \97\ NERC TOP Petition, Exhibit C at 3.
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    83. In addition, as noted above, NERC uses two different
definitions of Adverse Reliability Impact in the TOP and IRO Petitions.
NERC has not explained the intent or effect of the two definitions, and
the term is used in several provisions of the proposed TOP and IRO
Reliability Standards. The

Commission seeks clarification and a technical explanation from NERC
and other interested entities regarding the two definitions, including
if it is proposing a revised definition, which definition it is
proposing. In addition, if the definition NERC is proposing no longer
includes the phrase ``uncontrolled separation'' NERC should explain the
removal of the statutory phrase ``uncontrolled separation.''
g. Primary Decision-Making Authority for Mitigation of IROLs/SOLs
    84. NERC's proposal contains a potential overlap in authority
between the transmission operator and reliability coordinator with
regard to the provisions pertaining to mitigation of IROLs and SOLs as
set forth in the proposed TOP and IRO Standards.
    85. NERC states in its TOP Petition that ``[t]he responsibility for
monitoring and handling IROLs is primarily given to the Reliability
Coordinator, but the Transmission Operator has the primary
responsibility to designate any SOLs that require special attention.''
\98\ Likewise, NERC also states that an improvement resulting from the
changes to the IRO Reliability Standards is that they delineate a clean
division of responsibilities between the reliability coordinator and
transmission operators to ``help to ensure that the Reliability
Coordinator is responsible for identifying and controlling operations
associated with IROLs and the Transmission Operator is responsible for
identifying and controlling operations associated with SOLs.'' \99\
Proposed Reliability Standard IRO-001-3, Requirement R1, provides that
each reliability coordinator ``shall have the authority to act or
direct others to act (which could include issuing Reliability
Directives) to prevent identified events or mitigate the magnitude or
duration of actual events that result in an Emergency or Adverse
Reliability Impact.'' Further, currently-effective Reliability Standard
IRO-009-1, Requirement R4 states that ``[w]hen actual system conditions
show that there is an instance of exceeding an IROL in its Reliability
Coordinator Area, the Reliability Coordinator shall, without delay, act
or direct others to act to mitigate the magnitude and duration of the
instance of exceeding that IROL within the IROL's Tv.''
\100\
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    \98\ NERC TOP Petition at 15.
    \99\ NERC IRO Petition at 5-7.
    \100\ Reliability Standard IRO-009-1, Requirement R4.
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    86. However, proposed Reliability Standard TOP-001-2, Requirement
R11 provides similar authority for the transmission operator with
respect to IROLs. NERC proposes that each transmission operator ``shall
act or direct others to act, to mitigate both the magnitude and
duration of exceeding an IROL within the IROL's Tv, or of an
SOL identified in Requirement R8.'' \101\
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    \101\ NERC's TOP Petition (at 15) states that ``the delineation
in the proposed TOP Reliability Standards with respect to operating
within an identified IROL . . . is an important distinction in the
proposed TOP Reliability Standards that is necessary for
reliability.''
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    87. NERC's proposal with respect to mitigating IROLs appears to
give both the transmission operator and reliability coordinator
authority to act.\102\ Therefore, we seek clarification and technical
explanation whether the reliability coordinator or the transmission
operator has primary responsibility for IROLs.
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    \102\ NERC in its 2009 filing to revise and add new IRO
standards (RM10-15-000 petition at 8) states that under its
``Functional Model, the reliability coordinator is the functional
entity with the highest level of responsibility and authority for
the real-time reliability of the bulk power system.''
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B. IRO Reliability Standards

    88. As discussed above, because of the interrelationship of the TOP
and IRO Reliability Standards, the Commission proposes to remand
proposed IRO Reliability Standards: IRO-001-3, IRO-002-3; IRO-005-4;
and IRO-014-2. In addition, as discussed below, as part of the remand,
the Commission proposes to direct that NERC develop modifications with
regard to planned outage coordination. We also seek comment from NERC
and other interested entities regarding several proposed provisions of
the IRO Reliability Standards. Depending on the responses in the NOPR
comments, the Commissions may issue further directives in the final
rule in this proceeding.
1. Issues To Be Addressed
a. Planned Outage Coordination
NERC Petition
    89. In its IRO petition, NERC proposes to retire Reliability
Standard IRO-005-3.1a, Requirement R6, which requires reliability
coordinators to ``coordinate pending generation and transmission
maintenance outages with Transmission Operators, Balancing Authorities
and Generator Operators as needed in both the real-time and next-day
reliability analysis timeframes.'' \103\ NERC states that the
``coordination aspects of this part of Requirement R6 are addressed in
the requirements of currently-effective IRO-008-1,\104\ Requirement R3,
and IRO-010-1a, Requirement R3,'' which provide:
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    \103\ NERC IRO Petition at 33-34.
    \104\ NERC IRO Petition at 34.

    IRO-008-1, R3. When a Reliability Coordinator determines that
the results of an Operational Planning Analysis or Real-Time
Assessment indicates the need for specific operational actions to
prevent or mitigate an instance of exceeding an IROL, the
Reliability Coordinator shall share its results with those entities
that are expected to take those actions.
    IRO-010-1a, R3. Each Balancing Authority, Generator Owner,
Generator Operator, Interchange Authority, Load-serving Entity,
Reliability Coordinator, Transmission Operator, and Transmission
Owner shall provide data and information, as specified, to the
Reliability Coordinator(s) with which it has a reliability
relationship.
Commission Proposal
    90. The Commission is concerned with NERC's proposal because
Reliability Standards IRO-008-1, Requirement R3 and IRO-010-1a do not
require coordination of outages. Outage coordination is a critical
reliability function that should be performed by the reliability
coordinator. Outage coordination is an integral part of the operational
planning process with generation outages being scheduled from three to
five years in advance and transmission maintenance and construction
outages being scheduled one to three years in advance. Outages that
have been planned well in advance still must go through a month-ahead,
week-ahead, and sometimes even a day-ahead approval process depending
on system topography and system conditions that may change as the
scheduled maintenance outage approaches. For instance, forced outages
often disrupt planned outage schedules. Therefore, the Commission
believes it is essential that, as the functional entity with the wide-
area view, the reliability coordinator coordinates this critical area
of operational planning.\105\
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    \105\ The Independent Experts Report identifies outage
coordination as one of the key areas where risk to the Bulk-Power
System is not adequately mitigated. Industry Experts Report at 15.
The Independent Experts Report proposes (Appendix H) to fill this
gap ``by giving the Reliability Coordinator the authority and
responsibility to develop and implement a generation and
transmission outage coordination process across Transmission
Operators and Balancing Authorities in their footprint'' and
``between its adjacent Reliability Coordinators.'' Industry Experts
Report at 31. This outage coordination process ``shall cover the
time period from the current operating hour out through at least 36
months.'' In addition, The 2011 Southwest Outage Blackout Report (at
67) found a problem with Imperial Irrigation District's lack of
awareness of another entity's planned generation outage.
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    91. Because outage coordination is critical to operations planning
and the reliability coordinator has the needed wide-area view for
operations planning, on remand, the Commission proposes to

direct NERC to develop modifications to the IRO Reliability Standards
that would require the reliability coordinator to have the authority
and responsibility to develop and implement a generation and
transmission outage coordination and planning process across
transmission operators and balancing authorities in its footprint and
between its adjacent reliability coordinators for the operations
planning timeframe.\106\
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    \106\ This proposed directive is consistent with the Order No.
693 directive for NERC to modify Reliability Standard TOP-003-1,
Planned Outage Coordination, to require communication of scheduled
outages to affected entities well in advance. Order No. 693, FERC
Stats. & Regs. ] 31,242 at P 1620 through P 1624. In addition, the
Commission has a similar concern with proposed Reliability Standard
TOP-003-2 because it is not clear whether it addresses planned
outage coordination.
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2. IRO Reliability Standards--Issues Requiring Clarification
a. Use of a Secure Data Network
NERC Petition
    92. Currently-effective Reliability Standard IRO-002-2, Requirement
R2, requires that the data exchange between the reliability
coordinator, transmission operator, and balancing authority be
accomplished ``via a secure network.'' According to NERC, the
requirement to provide information via a ``secure network'' is now
addressed in NERC Rules of Procedure, Section 1002 (Reliability Support
Services).\107\ NERC also indicates that Requirement R2 is now
addressed in proposed Reliability Standard IRO-014-2, Requirements R1,
R2, and R3.
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    \107\ NERC IRO Petition at 16, quoting section 1002 of the NERC
Rules of Procedure which states in part that ``NERC may assist in
the development of tools and other support services for the benefit
of Reliability Coordinators and other system operators to enhance
reliability, operations and planning. NERC states that it will work
with the industry to identify new tools, collaboratively develop
requirements, support development, provide an incubation period, and
at the end of that period, transition the tool or service to another
group or owner for long term operation of the tool or provision of
the service.''
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Commission Proposal
    93. Although NERC cites Section 1002 of the Rules of Procedure and
proposed Reliability Standard IRO-014-2 as providing for the use of a
secured data network, NERC does not explain how secured networks are
covered in those sections. While Section 1002 of the NERC Rules and
Reliability Standard IRO-014-2, Requirements R1, R2, and R3 address
notification and exchange of information and data and coordination of
actions, no language in these provisions appears to require the data
exchange or notifications to be conducted in a secure mode.
    94. A secure network is essential to prevent unauthorized access to
or modification of information that is critical for interconnected
transmission network reliability functions performed by reliability
coordinators. Therefore, we seek comment and technical explanation from
NERC and other interested parties regarding how the identified section
in the Rules of Procedure and Reliability Standard IRO-014-2,
Requirements R1, R2, and R3 ensure that the data exchange and
notifications will be conducted using a secure mode in a secure
environment.
b. Reliability Coordinator Monitoring of SOLs and IROLs
NERC Petition
    95. NERC proposes to retire Reliability Standard IRO-002-2,
Requirements R4 through R7, which require reliability coordinators to
monitor IROLs and SOLs. Requirement R5 requires reliability
coordinators to monitor bulk electric system elements that could result
in SOL or IROL violations. NERC argues that it is appropriate to retire
these requirements because: (1) An SOL is unlikely to have an impact on
the wide-area reliability of the Bulk-Power System as it will generally
not have an impact outside the affected transmission operator's area
and (2) Requirement R4 is redundant with the requirements contained in
existing Reliability Standards IRO-010-1a, and EOP-008-1.\108\ NERC
also asserts that these requirements are redundant with proposed
Reliability Standard TOP-001-2, Requirements R8 through R11.
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    \108\ NERC IRO Petition at 19-24.
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Commission Proposal
    96. Although NERC's petition focuses on the appropriate entity to
identify SOLs, it does not adequately explain the proposed retirement
of the currently-effective Reliability Standard IRO-002-2 that
establishes the obligation for reliability coordinators to monitor
SOLs. With regard to NERC's explanation that Reliability Standard IRO-
002-2 Requirement R4 is redundant with the requirements contained in
IRO-010-1a and EOP-008-1, neither of these Reliability Standards
requires the reliability coordinator to monitor SOLs.
    97. The reliability coordinator's monitoring function is important
to ensure that the reliability coordinator can identify, assess and
take appropriate action so that elements of the system do not operate
outside established limits causing cascading outages or blackouts.
Thus, monitoring is not simply a support function but a major
reliability activity necessary to maintain situational awareness and
ensure reliable operation of the interconnected transmission network.
As we explain above, the reliability coordinator's obligation to
monitor SOLs is important to reliability because an SOL can evolve into
an IROL during deteriorating system conditions, and for potential
system conditions such as this, the reliability coordinator's
monitoring of SOLs provides a necessary backup function to the
transmission operator.
    98. Notwithstanding these concerns, currently-effective Reliability
Standard IRO-003-2, Requirements R1 and R2 address the concern over
monitoring of SOLs and IROLs, which provide:

    R1. Each Reliability Coordinator shall monitor all Bulk Electric
System facilities, which may include sub-transmission information,
within its Reliability Coordinator Area and adjacent Reliability
Coordinator Areas, as necessary to ensure that, at any time,
regardless of prior planned or unplanned events, the Reliability
Coordinator is able to determine any potential System Operating
Limit and Interconnection Reliability Operating Limit violations
within its Reliability Coordinator Area.
    R2. Each Reliability Coordinator shall know the current status
of all critical facilities whose failure, degradation or
disconnection could result in an SOL or IROL violation. Reliability
Coordinators shall also know the status of any facilities that may
be required to assist area restoration objectives.

Thus, the Commission seeks comment on whether the currently-effective
Reliability Standard IRO-003-2 Requirements R1 and R2 require
reliability coordinators to monitor all SOLs and IROLs.

C. Proposed Revisions to Reliability Standard TOP-006-3

    99. Pursuant to section 215(d)(5) of the FPA, we propose to approve
NERC's proposed revisions to Reliability Standard TOP-006-3 as just,
reasonable, not unduly discriminatory or preferential, and in the