[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]
[Rules and Regulations]
[Pages 67120-67140]
[FR Doc No: 2016-23441]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM15-11-000; Order No. 830]

Reliability Standard for Transmission System Planned Performance
for Geomagnetic Disturbance Events

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) approves
Reliability Standard TPL-007-1 (Transmission System Planned Performance
for Geomagnetic Disturbance Events). The North American Electric
Reliability Corporation (NERC), the Commission-certified Electric
Reliability Organization, submitted Reliability Standard TPL-007-1 for
Commission approval in response to a Commission directive in Order No.
779. Reliability Standard TPL-007-1 establishes requirements for
certain registered entities to assess the vulnerability of their
transmission systems to geomagnetic disturbance events (GMDs), which
occur when the sun ejects charged particles that interact with and
cause changes in the earth's magnetic fields. Applicable entities that
do not meet certain performance requirements, based on the results of
their vulnerability assessments, must develop a plan to achieve the
performance requirements. In addition, the Commission directs NERC to
develop modifications to Reliability Standard TPL-007-1: To modify the
benchmark GMD event definition set forth in Attachment 1 of Reliability
Standard TPL-007-1, as it pertains to the required GMD Vulnerability
Assessments and transformer thermal impact assessments, so that the
definition is not based solely on spatially-averaged data; to require
the collection of necessary geomagnetically induced current monitoring
and magnetometer data and to make such data publicly available; and to
include a one-year deadline for the development of corrective action
plans and two and four-year deadlines to complete mitigation actions
involving non-hardware and hardware mitigation, respectively. The
Commission also directs NERC to submit a work plan and, subsequently,
one or more informational filings that address specific GMD-related
research areas.

DATES: This rule will become effective November 29, 2016.

FOR FURTHER INFORMATION CONTACT:
    Regis Binder (Technical Information), Office of Electric
Reliability, Federal Energy Regulatory Commission, 888 First Street
NE., Washington, DC 20426, Telephone:<PHONE_NUMBER>,
<EMAIL_ADDRESS>    Matthew Vlissides (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:

Order No. 830

Final Rule

    1. Pursuant to section 215 of the Federal Power Act (FPA), the
Commission approves Reliability Standard TPL-007-1 (Transmission System
Planned Performance for Geomagnetic Disturbance Events).\1\ The North
American Electric Reliability Corporation (NERC), the Commission-
certified Electric Reliability Organization (ERO), submitted
Reliability Standard TPL-007-1 for Commission approval in response to a
Commission directive in Order No. 779.\2\ Reliability Standard TPL-007-
1 establishes requirements for certain registered entities to assess
the vulnerability of their transmission systems to geomagnetic
disturbance events (GMDs), which occur when the sun ejects charged
particles that interact with and cause changes in the earth's magnetic
fields. Reliability Standard TPL-007-1 requires applicable entities
that do not meet certain performance requirements, based on the results
of their vulnerability assessments, to develop a plan to achieve the
requirements. Reliability Standard TPL-007-1 addresses the directives
in Order No. 779 by requiring applicable Bulk-Power System owners and
operators to conduct initial and on-going vulnerability assessments
regarding the potential impact of a benchmark GMD event on the Bulk-
Power System as a whole and on Bulk-Power System components.\3\ In
addition, Reliability Standard TPL-007-1 requires applicable entities
to develop and implement corrective action plans to mitigate identified
vulnerabilities.\4\ Potential mitigation strategies identified in the
proposed Reliability Standard include, but are not limited to, the
installation, modification or removal of transmission and generation
facilities and associated equipment.\5\ Accordingly, Reliability
Standard TPL-007-1 constitutes an important step in addressing the
risks posed by GMD events to the Bulk-Power System.
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    \1\ 16 U.S.C. 824o.
    \2\ Reliability Standards for Geomagnetic Disturbances, Order
No. 779, 78 FR 30,747 (May 23, 2013), 143 FERC ] 61,147, reh'g
denied, 144 FERC ] 61,113 (2013).
    \3\ See Reliability Standard TPL-007-1, Requirement R4; see also
Order No. 779, 143 FERC ] 61,147 at PP 67, 71.
    \4\ See Reliability Standard TPL-007-1, Requirement R7; see also
Order No. 779, 143 FERC ] 61,147 at P 79.
    \5\ See Reliability Standard TPL-007-1, Requirement R7.
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    2. In addition, pursuant to section 215(d)(5) of the FPA, the
Commission directs NERC to develop modifications to Reliability
Standard TPL-007-1: (1) To revise the benchmark GMD event definition
set forth in Attachment 1 of Reliability Standard TPL-007-1, as it
pertains to the required GMD Vulnerability Assessments and transformer
thermal impact assessments, so that the definition is not based solely
on spatially-averaged data; (2) to require the collection of necessary
geomagnetically induced current (GIC) monitoring and magnetometer data
and to make such data publicly available; and (3) to include a one-year
deadline for the completion of corrective action plans and two- and
four-year deadlines to complete mitigation actions involving non-
hardware and hardware mitigation, respectively.\6\ The Commission
directs NERC to submit these revisions within 18 months of the
effective date of this Final Rule. The Commission also directs NERC to
submit a work plan (GMD research work plan) within six months of the
effective date of this Final Rule and, subsequently, one or more

informational filings that address specific GMD-related research areas.
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    \6\ 16 U.S.C. 824o(d)(5).
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I. Background

A. Section 215 and Mandatory Reliability Standards

    3. Section 215 of the FPA requires the Commission to certify an ERO
to develop mandatory and enforceable Reliability Standards, subject to
Commission review and approval. Once approved, the Reliability
Standards may be enforced in the United States by the ERO, subject to
Commission oversight, or by the Commission independently.\7\
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    \7\ Id. 824o(e).
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B. GMD Primer

    4. GMD events occur when the sun ejects charged particles that
interact with and cause changes in the earth's magnetic fields.\8\ Once
a solar particle is ejected, it can take between 17 to 96 hours
(depending on its energy level) to reach earth.\9\ A geoelectric field
is the electric potential (measured in volts per kilometer (V/km)) on
the earth's surface and is directly related to the rate of change of
the magnetic fields.\10\ A geoelectric field has an amplitude and
direction and acts as a voltage source that can cause GICs to flow on
long conductors, such as transmission lines.\11\ The magnitude of the
geoelectric field amplitude is impacted by local factors such as
geomagnetic latitude and local earth conductivity.\12\ Geomagnetic
latitude is the proximity to earth's magnetic north and south poles, as
opposed to earth's geographic poles. Local earth conductivity is the
ability of the earth's crust to conduct electricity at a certain
location to depths of hundreds of kilometers down to the earth's
mantle. Local earth conductivity impacts the magnitude (i.e., severity)
of the geoelectric fields that are formed during a GMD event by, all
else being equal, a lower earth conductivity resulting in higher
geoelectric fields.\13\
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    \8\ North American Electric Reliability Corp., 2012 Special
Reliability Assessment Interim Report: Effects of Geomagnetic
Disturbances on the Bulk Power System at i-ii (February 2012),
http://www.nerc.com/files/2012GMD.pdf (GMD Interim Report).
    \9\ Id. ii.
    \10\ Id.
    \11\ Id.
    \12\ NERC Petition, Ex. D (White Paper on GMD Benchmark Event
Description) at 4.
    \13\ Id.
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C. Order No. 779

    5. In Order No. 779, the Commission directed NERC, pursuant to
section 215(d)(5) of the FPA, to develop and submit for approval
proposed Reliability Standards that address the impact of geomagnetic
disturbances on the reliable operation of the Bulk-Power System. The
Commission based its directive on the potentially severe, wide-spread
impact on the reliable operation of the Bulk-Power System that can be
caused by GMD events and the absence of existing Reliability Standards
to address GMD events.\14\
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    \14\ Order No. 779, 143 FERC ] 61,147 at P 3.
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    6. Order No. 779 directed NERC to implement the directive in two
stages. In the first stage, the Commission directed NERC to submit,
within six months of the effective date of Order No. 779, one or more
Reliability Standards (First Stage GMD Reliability Standards) that
require owners and operators of the Bulk-Power System to develop and
implement operational procedures to mitigate the effects of GMDs
consistent with the reliable operation of the Bulk-Power System.\15\
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    \15\ Id. P 2.
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    7. In the second stage, the Commission directed NERC to submit,
within 18 months of the effective date of Order No. 779, one or more
Reliability Standards (Second Stage GMD Reliability Standards) that
require owners and operators of the Bulk-Power System to conduct
initial and on-going assessments of the potential impact of benchmark
GMD events on Bulk-Power System equipment and the Bulk-Power System as
a whole. The Commission directed that the Second Stage GMD Reliability
Standards must identify benchmark GMD events that specify what severity
of GMD events a responsible entity must assess for potential impacts on
the Bulk-Power System.\16\ Order No. 779 explained that if the
assessments identified potential impacts from benchmark GMD events, the
Reliability Standards should require owners and operators to develop
and implement a plan to protect against instability, uncontrolled
separation, or cascading failures of the Bulk-Power System, caused by
damage to critical or vulnerable Bulk-Power System equipment, or
otherwise, as a result of a benchmark GMD event. The Commission
directed that the development of this plan could not be limited to
considering operational procedures or enhanced training alone but
should, subject to the potential impacts of the benchmark GMD events
identified in the assessments, contain strategies for protecting
against the potential impact of GMDs based on factors such as the age,
condition, technical specifications, system configuration or location
of specific equipment.\17\ Order No. 779 observed that these strategies
could, for example, include automatically blocking GICs from entering
the Bulk-Power System, instituting specification requirements for new
equipment, inventory management, isolating certain equipment that is
not cost effective to retrofit or a combination thereof.
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    \16\ Id.
    \17\ Id.
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D. Order No. 797

    8. In Order No. 797, the Commission approved Reliability Standard
EOP-010-1 (Geomagnetic Disturbance Operations).\18\ NERC submitted
Reliability Standard EOP-010-1 for Commission approval in compliance
with the Commission's directive in Order No. 779 corresponding to the
First Stage GMD Reliability Standards. In Order No. 797-A, the
Commission denied the Foundation for Resilient Societies' (Resilient
Societies) request for rehearing of Order No. 797. The Commission
stated that the rehearing request ``addressed a later stage of efforts
on geomagnetic disturbances (i.e., NERC's future filing of Second Stage
GMD Reliability Standards) and [that Resilient Societies] may seek to
present those arguments at an appropriate time in response to that
filing.'' \19\ In particular, the Commission stated that GIC monitoring
requirements should be addressed in the Second Stage GMD Reliability
Standards.\20\
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    \18\ Reliability Standard for Geomagnetic Disturbance
Operations, Order No. 797, 79 FR 35,911 (June 25, 2014), 147 FERC ]
61,209, reh'g denied, Order No. 797-A, 149 FERC ] 61,027 (2014).
    \19\ Order No. 797-A, 149 FERC ] 61,027 at P 2.
    \20\ Id. P 27 (stating that the Commission continues ``to
encourage NERC to address the collection, dissemination, and use of
geomagnetic induced current data, by NERC, industry or others, in
the Second Stage GMD Reliability Standards because such efforts
could be useful in the development of GMD mitigation methods or to
validate GMD models'').
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E. NERC Petition and Reliability Standard TPL-007-1

    9. On January 21, 2015, NERC petitioned the Commission to approve
Reliability Standard TPL-007-1 and its associated violation risk
factors and violation severity levels, implementation plan, and
effective dates.\21\ NERC also submitted a proposed definition for the
term ``Geomagnetic Disturbance Vulnerability Assessment or GMD
Vulnerability

Assessment'' for inclusion in the NERC Glossary of Terms (NERC
Glossary). NERC maintains that Reliability Standard TPL-007-1 is just,
reasonable, not unduly discriminatory or preferential and in the public
interest. NERC further contends that Reliability Standard TPL-007-1
satisfies the directive in Order No. 779 corresponding to the Second
Stage GMD Reliability Standards.
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    \21\ Reliability Standard TPL-007-1 is not attached to this
final rule. Reliability Standard TPL-007-1 is available on the
Commission's eLibrary document retrieval system in Docket No. RM15-
11-000 and on the NERC website, www.nerc.com. NERC submitted an
errata on February 2, 2015 containing a corrected version of Exhibit
A (Proposed Reliability Standard TPL-007-1).
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    10. NERC states that Reliability Standard TPL-007-1 applies to
planning coordinators, transmission planners, transmission owners and
generation owners who own or whose planning coordinator area or
transmission planning area includes a power transformer with a high
side, wye-grounded winding connected at 200 kV or higher.\22\ NERC
explains that the applicability criteria for qualifying transformers in
Reliability Standard TPL-007-1 are the same as that for the First Stage
GMD Reliability Standard in Reliability Standard EOP-010-1, which the
Commission approved in Order No. 797.
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    \22\ A power transformer with a ``high side wye-grounded
winding'' refers to a power transformer with windings on the high
voltage side that are connected in a wye configuration and have a
grounded neutral connection. NERC Petition at 13 n.32.
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    11. Reliability Standard TPL-007-1 contains seven requirements.
Requirement R1 requires planning coordinators and transmission planners
to determine the individual and joint responsibilities in the planning
coordinator's planning area for maintaining models and performing
studies needed to complete the GMD Vulnerability Assessment required in
Requirement R4.
    12. Requirement R2 requires planning coordinators and transmission
planners to maintain system models and GIC system models needed to
complete the GMD Vulnerability Assessment required in Requirement R4.
    13. Requirement R3 requires planning coordinators and transmission
planners to have criteria for acceptable system steady state voltage
limits for their systems during the benchmark GMD event described in
Attachment 1 (Calculating Geoelectric Fields for the Benchmark GMD
Event).
    14. Requirement R4 requires planning coordinators and transmission
planners to conduct a GMD Vulnerability Assessment every 60 months
using the benchmark GMD event described in Attachment 1 to Reliability
Standard TPL-007-1. The benchmark GMD event is based on a 1-in-100 year
frequency of occurrence and is composed of four elements: (1) A
reference peak geoelectric field amplitude of 8 V/km derived from
statistical analysis of historical magnetometer data; (2) a scaling
factor to account for local geomagnetic latitude; (3) a scaling factor
to account for local earth conductivity; and (4) a reference
geomagnetic field time series or wave shape to facilitate time-domain
analysis of GMD impact on equipment.\23\ The product of the first three
elements is referred to as the regional geoelectric field peak
amplitude.\24\
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    \23\ See Reliability Standard TPL-007-1, Att. 1; see also NERC
Petition, Ex. D (White Paper on GMD Benchmark Event Description) at
5.
    \24\ NERC Petition, Ex. D (White Paper on GMD Benchmark Event
Description) at 5.
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    15. Requirement R5 requires planning coordinators and transmission
planners to provide GIC flow information, to be used in the transformer
thermal impact assessment required in Requirement R6, to each
transmission owner and generator owner that owns an applicable
transformer within the applicable planning area.
    16. Requirement R6 requires transmission owners and generator
owners to conduct thermal impact assessments on solely and jointly
owned applicable transformers where the maximum effective GIC value
provided in Requirement R5 is 75 amperes per phase (A/phase) or
greater.
    17. Requirement R7 requires planning coordinators and transmission
planners to develop corrective action plans if the GMD Vulnerability
Assessment concludes that the system does not meet the performance
requirements in Table 1 (Steady State Planning Events).

F. Notice of Proposed Rulemaking

    18. On May 14, 2015, the Commission issued a notice of proposed
rulemaking (NOPR) proposing to approve Reliability Standard TPL-007-
1.\25\ In addition, the Commission proposed to direct that NERC develop
three modifications to Reliability Standard TPL-007-1. First, the
Commission proposed to direct NERC to revise the benchmark GMD event
definition in Reliability Standard TPL-007-1 so that the definition is
not based solely on spatially-averaged data. Second, the Commission
proposed to direct NERC to revise Reliability Standard TPL-007-1 to
require the installation of GIC monitors and magnetometers where
necessary. Third, the Commission proposed to direct NERC to revise
Reliability Standard TPL-007-1 to require corrective action plans
(Requirement R7) to be developed within one year and, with respect to
the mitigation actions called for in the corrective action plans, non-
hardware mitigation actions to be completed within two years of
finishing development of the corrective action plan and hardware
mitigation to be completed within four years. The NOPR also proposed to
direct NERC to submit a work plan and, subsequently, one or more
informational filings that address specific GMD-related research areas
and sought comment on certain issues relating to the transformer
thermal impact assessments (Requirement R6) and the meaning of language
in Table 1 of Reliability Standard TPL-007-1.
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    \25\ Reliability Standard for Transmission System Planned
Performance for Geomagnetic Disturbance Events, Notice of Proposed
Rulemaking, 80 FR 29,990 (May 26, 2015), 151 FERC ] 61,134 (2015)
(NOPR).
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    19. On August 20, 2015 and October 2, 2015, the Commission issued
notices setting supplemental comment periods regarding specific
documents. On March 1, 2016, Commission staff led a technical
conference on Reliability Standard TPL-007-1 and issues raised in the
NOPR.\26\
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    \26\ Written presentations at the March 1, 2016 Technical
Conference and the Technical Conference transcript referenced in
this Final Rule are accessible through the Commission's eLibrary
document retrieval system in Docket No. RM15-11-000.
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    20. On April 28, 2016, NERC made a filing notifying the Commission
that ``NERC identified new information that may necessitate a minor
revision to a figure in one of the supporting technical white papers.
This revision would not require a change to any of the Requirements of
the proposed Reliability Standard.'' \27\ On June 28, 2016, NERC
submitted the revised technical white papers referenced in the April
28, 2016 filing. On June 29, 2016, the Commission issued a notice
setting a supplemental comment period regarding the revised technical
white papers submitted by NERC on June 28, 2016.
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    \27\ NERC April 28, 2016 Filing at 1.
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    21. In response to the NOPR and subsequent notices, 28 entities
filed initial and supplemental comments. We address below the issues
raised in the NOPR and comments. The Appendix to this Final Rule lists
the entities that filed comments in response to the NOPR and in
response to the supplemental comment period notices.

II. Discussion

    22. Pursuant to section 215(d) of the FPA, the Commission approves
Reliability Standard TPL-007-1 as just, reasonable, not unduly
discriminatory or preferential and in the public interest. While we
recognize that scientific and operational research regarding GMD is
ongoing, we believe

that the potential threat to the bulk electric system warrants
Commission action at this time, including efforts to conduct critical
GMD research and update Reliability Standard TPL-007-1 as appropriate.
    23. First, we find that Reliability Standard TPL-007-1 addresses
the directives in Order No. 779 corresponding to the development of the
Second Stage GMD Reliability Standards. Reliability Standard TPL-007-1
does this by requiring applicable Bulk-Power System owners and
operators to conduct, on a recurring five-year cycle,\28\ initial and
on-going vulnerability assessments regarding the potential impact of a
benchmark GMD event on the Bulk-Power System as a whole and on Bulk-
Power System components.\29\ In addition, Reliability Standard TPL-007-
1 requires applicable entities to develop and implement corrective
action plans to mitigate vulnerabilities identified through those
recurring vulnerability assessments.\30\ Potential mitigation
strategies identified in the proposed Reliability Standard include, but
are not limited to, the installation, modification or removal of
transmission and generation facilities and associated equipment.\31\
Accordingly, Reliability Standard TPL-007-1 constitutes an important
step in addressing the risks posed by GMD events to the Bulk-Power
System.
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    \28\ A detailed explanation of the five-year GMD Vulnerability
Assessment and mitigation cycle is provided in paragraph 103, infra.
    \29\ See Reliability Standard TPL-007-1, Requirement R4; see
also Order No. 779, 143 FERC ] 61,147 at PP 67, 71.
    \30\ See Reliability Standard TPL-007-1, Requirement R7; see
also Order No. 779, 143 FERC ] 61,147 at P 79.
    \31\ See Reliability Standard TPL-007-1, Requirement R7.
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    24. The Commission also approves the inclusion of the term
``Geomagnetic Disturbance Vulnerability Assessment or GMD Vulnerability
Assessment'' in the NERC Glossary; Reliability Standard TPL-007-1's
associated violation risk factors and violation severity levels; and
NERC's proposed implementation plan and effective dates. The Commission
also affirms, as raised for comment in the NOPR, that cost recovery for
prudent costs associated with or incurred to comply with Reliability
Standard TPL-007-1 and future revisions to the Reliability Standard
will be available to registered entities.\32\
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    \32\ NOPR, 151 FERC ] 61,134 at P 49 n.60.
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    25. While we conclude that Reliability Standard TPL-007-1 satisfies
the directives in Order No. 779, based on the record developed in this
proceeding, the Commission determines that Reliability Standard TPL-
007-1 should be modified to reflect the new information and analyses
discussed below, as proposed in the NOPR. Accordingly, pursuant to
section 215(d)(5) of the FPA, the Commission directs NERC to develop
and submit modifications to Reliability Standard TPL-007-1 concerning:
(1) The calculation of the reference peak geoelectric field amplitude
component of the benchmark GMD event definition; (2) the collection and
public availability of necessary GIC monitoring and magnetometer data;
and (3) deadlines for completing corrective action plans and the
mitigation measures called for in corrective action plans. The
Commission directs NERC to develop and submit these revisions for
Commission approval within 18 months of the effective date of this
Final Rule.
    26. Furthermore, to improve the understanding of GMD events
generally, the Commission directs NERC to submit within six months from
the effective date of this Final Rule a GMD research work plan.\33\
Specifically, we direct NERC to: (1) Further analyze the area over
which spatial averaging should be calculated for stability studies,
including performing sensitivity analyses on squares less than 500 km
per side (e.g., 100 km, 200 km); (2) further analyze earth conductivity
models by, for example, using metered GIC and magnetometer readings to
calculate earth conductivity and using 3-D readings; (3) determine
whether new analyses and observations support modifying the use of
single station readings around the earth to adjust the spatially
averaged benchmark for latitude; (4) research, as discussed below,
aspects of the required thermal impact assessments; and (5) in NERC's
discretion, conduct any GMD-related research areas generally that may
impact the development of new or modified GMD Reliability Standards. We
expect that work completed through the GMD research work plan, as well
as other analyses facilitated by the increased collection and
availability of GIC monitoring and magnetometer data directed herein,
will lead to further modifications to Reliability Standard TPL-007-1 as
our collective understanding of the threats posed by GMD events
improves.
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    \33\ Following submission of the GMD research work plan, the
Commission will notice the filing for public comment and issue an
order addressing its proposed content and schedule.
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    27. Below we discuss the following issues raised in the NOPR and
NOPR comments: (1) The benchmark GMD event definition described in
Reliability Standard TPL-007-1, Attachment 1 (Calculating Geoelectric
Fields for the Benchmark GMD Event); (2) transformer thermal impact
assessments in Requirement R6; (3) GMD research work plan; (4)
collection and public availability of GIC monitoring and magnetometer
data; (5) completion of corrective action plans in Requirement R7; (6)
meaning of ``minimized'' in Table 1 (Steady State Planning Events) of
Reliability Standard TPL-007-1; (7) NERC's proposed implementation plan
and effective dates; and (8) other issues.

A. Benchmark GMD Event Definition

NERC Petition
    28. NERC states that the purpose of the benchmark GMD event is to
``provide a defined event for assessing system performance during a low
probability, high magnitude GMD event.'' \34\ NERC explains that the
benchmark GMD event represents ``the most severe GMD event expected in
a 100-year period as determined by a statistical analysis of recorded
geomagnetic data.'' \35\ The benchmark GMD event definition is used in
the GMD Vulnerability Assessments and thermal impact assessment
requirements of Reliability Standard TPL-007-1 (Requirements R4 and
R6).
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    \34\ NERC Petition at 15.
    \35\ Id.
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    29. As noted above, NERC states that the benchmark GMD event
definition has four elements: (1) A reference peak geoelectric field
amplitude of 8 V/km derived from statistical analysis of historical
magnetometer data; (2) a scaling factor to account for local
geomagnetic latitude; (3) a scaling factor to account for local earth
conductivity; and (4) a reference geomagnetic field time series or wave
shape to facilitate time-domain analysis of GMD impact on
equipment.\36\
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    \36\ NERC Petition, Ex. D (White Paper on GMD Benchmark Event
Description) at 5.
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    30. The standard drafting team determined that a 1-in-100 year GMD
event would cause an 8 V/km reference peak geoelectric field amplitude
at 60 degree geomagnetic latitude using Qu[eacute]bec's earth
conductivity.\37\ The standard drafting team stated that:
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    \37\ Id.

the reference geoelectric field amplitude was determined through
statistical analysis using . . . field measurements from geomagnetic
observatories in northern Europe and the reference (Quebec) earth
model . . . . The Quebec earth model is generally resistive and the
geological structure is relatively well understood. The statistical
analysis resulted in a conservative peak geoelectric field amplitude
of approximately 8 V/km . . . .

The frequency of occurrence of this benchmark GMD event is estimated
to be approximately 1 in 100 years.\38\
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    \38\ Id. (footnotes omitted).

    31. The standard drafting team explained that it used field
measurements taken from the IMAGE magnetometer chain, which covers
Northern Europe, for the period 1993-2013 to calculate the reference
peak geoelectric field amplitude used in the benchmark GMD event
definition.\39\ As described in NERC's petition, the standard drafting
team ``spatially averaged'' four different station groups of IMAGE
data, each spanning a square area of approximately 500 km (roughly 310
miles) in width.\40\ The standard drafting team justified the use of
spatial averaging by stating that Reliability Standard TPL-007-1 is
designed to ``address wide-area effects caused by a severe GMD event,
such as increased var absorption and voltage depressions. Without
characterizing GMD on regional scales, statistical estimates could be
weighted by local effects and suggest unduly pessimistic conditions
when considering cascading failure and voltage collapse.'' \41\
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    \39\ Id. at 8. The International Monitor for Auroral Geomagnetic
Effects (IMAGE) consists of 31 magnetometer stations in northern
Europe maintained by 10 institutes from Estonia, Finland, Germany,
Norway, Poland, Russia, and Sweden. See IMAGE website, http://space.fmi.fi/image/beta/?page=home#.
    \40\ As applied by the standard drafting team, spatial averaging
refers to the averaging of geoelectric field amplitude readings
within a given area. NERC Petition, Ex. D (White Paper on GMD
Benchmark Event Description) at 9.
    \41\ NERC Petition, Ex. D (White Paper on GMD Benchmark Event
Description) at 9.
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    32. NERC states that the benchmark GMD event includes scaling
factors to enable applicable entities to tailor the reference peak
geoelectric field to their specific location for conducting GMD
Vulnerability Assessments. NERC explains that the scaling factors in
the benchmark GMD event definition are applied to the reference peak
geoelectric field amplitude to adjust the 8 V/km value for different
geomagnetic latitudes and earth conductivities.\42\
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    \42\ NERC Petition at 18-19.
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    33. The standard drafting team also identified a reference
geomagnetic field time series from an Ottawa magnetic observatory
during a 1989 GMD event that affected Qu[eacute]bec.\43\ The standard
drafting team used this time series to estimate a geoelectric field,
represented as a time series (i.e., 10-second values over a period of
days), that is expected to occur at 60 degree geomagnetic latitude
during a 1-in-100 year GMD event. NERC explains that this time series
is used to facilitate time-domain analysis of GMD impacts on
equipment.\44\
---------------------------------------------------------------------------

    \43\ NERC Petition, Ex. D (White Paper on GMD Benchmark Event
Description) at 5-6, 15-16 (``the reference geomagnetic field
waveshape was selected after analyzing a number of recorded GMD
events . . . the March 13-14, 1989 GMD event, measured at NRCan's
Ottawa geomagnetic observatory, was selected as the reference
geomagnetic field waveform because it provides generally
conservative results when performing thermal analysis of power
transformers'').
    \44\ Id. at 5-6.
---------------------------------------------------------------------------

    34. In the sub-sections below, we discuss two issues concerning the
benchmark GMD event definition addressed in the NOPR: (1) Reference
peak geoelectric field amplitude; and (2) geomagnetic latitude scaling
factor.
1. Reference Peak Geoelectric Field Amplitude
NOPR
    35. The NOPR proposed to approve the benchmark GMD event
definition. The NOPR stated that the ``benchmark GMD event definition
proposed by NERC complies with the directive in Order No. 779 . . .
[c]onsistent with the guidance provided in Order No. 779, the benchmark
GMD event definition proposed by NERC addresses the potential
widespread impact of a severe GMD event, while taking into
consideration the variables of geomagnetic latitude and local earth
conductivity.'' \45\
---------------------------------------------------------------------------

    \45\ NOPR, 151 FERC ] 61,134 at P 32.
---------------------------------------------------------------------------

    36. In addition, the NOPR proposed to direct NERC to develop
modifications to Reliability Standard TPL-007-1. Specifically, the NOPR
proposed to direct NERC to modify the reference peak geoelectric field
amplitude component of the benchmark GMD event definition so that it is
not calculated based solely on spatially-averaged data. The NOPR
explained that this could be achieved, for example, by requiring
applicable entities to conduct GMD Vulnerability Assessments (and, as
discussed below, thermal impact assessments) using two different
benchmark GMD events: The first benchmark GMD event using the
spatially-averaged reference peak geoelectric field value (8 V/km) and
the second using the non-spatially averaged peak geoelectric field
value cited in the GMD Interim Report (20 V/km). The NOPR stated that
the revised Reliability Standard could then require applicable entities
to take corrective actions, using engineering judgment, based on the
results of both assessments. The NOPR explained that applicable
entities would not always be required to mitigate to the level of risk
identified by the non-spatially averaged analysis; instead, the
selection of mitigation would reflect the range of risks bounded by the
two analyses, and be based on engineering judgment within this range,
considering all relevant information. The NOPR stated that,
alternatively, NERC could propose an equally efficient and effective
modification that does not rely exclusively on the spatially-averaged
reference peak geoelectric field value.
Comments
    37. NERC does not support revising the benchmark GMD event
definition. NERC maintains that the spatially-averaged reference peak
geoelectric field amplitude value in Reliability Standard TPL-007-1 is
``technically-justified, scientifically sound, and has been published
in a peer-reviewed research journal covering geomagnetism and other
topics.'' \46\ NERC contends that the standard drafting team determined
that using the non-spatially averaged 20 V/km figure in the GMD Interim
Report would ``consistently overestimate the geoelectric field of a 1-
in-100 year GMD event.'' \47\ NERC states that, by contrast, spatial
averaging ``properly associates the relevant spatial scales for the
analyzed and applied geoelectric fields and would not distort the
complexity of the potential impacts of a GMD event.'' \48\ NERC claims
that the 500 km-wide square areas used to determine the areas of
spatial averaging are ``based on consideration of transmission systems
and geomagnetic observation patterns . . . [and are] an appropriate
scale for a system-wide impact in a transmission system.'' \49\ To
support this position, NERC cites a June 2015 peer-reviewed publication
authored in part by some members of the standard drafting team.\50\
---------------------------------------------------------------------------

    \46\ NERC Comments at 6.
    \47\ Id. at 7.
    \48\ Id. at 8.
    \49\ Id.
    \50\ See Pulkkinen, A., Bernabeu, E., Eichner, J., Viljanen, A.,
Ngwira, C., ``Regional-Scale High-Latitude Extreme Geoelectric
Fields Pertaining to Geomagnetically Induced Currents,'' Earth,
Planets and Space (June 19, 2015) (2015 Pulkkinen Paper).
---------------------------------------------------------------------------

    38. Industry commenters, largely represented by the Trade
Associations' comments, do not support revising the benchmark GMD event
definition.\51\ The Trade Associations' reasons largely mirror NERC's.
While recognizing that the spatially-averaged reference peak
geoelectric field amplitude is lower than

the non-spatially averaged figure, the Trade Associations contend that
the non-spatially averaged value is inappropriate because: (1) The peak
geoelectric field only affects relatively small areas and quickly
declines with distance from the peak; (2) Reliability Standard TPL-007-
1 is intended to address the wide-scale effects of a GMD event; and (3)
the benchmark GMD event definition is designed to provide a realistic
estimate of wide-area effects caused by a severe GMD event. The Trade
Associations contend that a non-spatially averaged reference peak
geoelectric field amplitude ``would be weighted by local effects and
suggest unrealistic conditions for system analysis . . . [which] could
lead to unnecessary costs for customers, while yielding very little
tangible benefit to reliability.'' \52\ Like NERC, the Trade
Associations cite to the 2015 Pulkkinen Paper to support the use of 500
km-wide squares in performing the spatial averaging analysis. The Trade
Associations note, however, that the selection of 500 km is ``only the
beginning . . . [of the] exploration of spatial geoelectric field
structures pertaining to extreme GIC.'' \53\
---------------------------------------------------------------------------

    \51\ Trade Associations Comments at 13-18. AEP, APS, ATC, BPA,
CEA, Hydro One, ITC, Joint ISOs/RTOs and Exelon indicated that they
do not support the NOPR proposal in separate comments and/or by
joining the Trade Associations' comments. See AEP Comments at 3; APS
Comments at 2; ATC Comments at 3; BPA Comments at 3-4; CEA Comments
at 8-13; Hydro One Comments 1-2; ITC Comments at 3-5; Joint ISOs/
RTOs Comments at 4-5; Exelon Comments at 2.
    \52\ Trade Associations Comments at 15.
    \53\ Id. at 17 (quoting 2015 Pulkkinen Paper at 6).
---------------------------------------------------------------------------

    39. The Trade Associations, while not supportive of the NOPR
proposal, recommend that if the Commission remains concerned about
relying on NERC's proposed spatially-averaged reference peak
geoelectric field amplitude, the Commission should:

allow NERC to further determine the appropriate localized studies to
be performed by moving the ``local hot spot'' around a planning
area. This approach may better ensure that the peak values only
impact a local area instead of unrealistically projecting uniform
peak values over a broad area. This approach also should better
align with the Commission's concerns because this type of study
would more accurately reflect the real-world impact of a GMD event
on the [Bulk-Power System]. The Trade Associations understand that
existing planning tools may not yet have such capabilities, but the
tools can be modified to allow such study.\54\
---------------------------------------------------------------------------

    \54\ Id. at 16.

    40. Industry commenters raise other concerns with the NOPR
proposal. CEA states that it would be inappropriate to rely on the non-
spatially averaged 20 V/km reference peak geoelectric field figure
because that figure is found in a single publication. CEA also contends
that it is impractical to use ``engineering judgment'' to weigh the GMD
Vulnerability Assessments using the spatially-averaged and non-
spatially averaged reference peak geoelectric field amplitudes, as
described in the NOPR.\55\ ITC states that NERC's proposal is
reasonable and that the reference peak geoelectric field amplitude
value can be revised periodically based on new information. Joint ISOs/
RTOs state that the Commission should afford due weight to NERC's
technical expertise.
---------------------------------------------------------------------------

    \55\ See also Hydro One Comments at 1-2; Resilient Societies
Comments at 24-25.
---------------------------------------------------------------------------

    41. A September 2015 paper prepared by the Los Alamos National
Laboratory states that it analyzed the IMAGE data using a different
methodology to calculate reference peak geoelectric field amplitude
values based on each of eight different magnetometer installations in
Northern Europe. However, unlike the standard drafting team, the Los
Alamos Paper did not spatially average the IMAGE data. The authors
calculated peak geoelectric field amplitudes ranging from 8.4 V/km to
16.6 V/km, with a mean of the eight values equal to 13.2 V/km.\56\ The
authors used a statistical formula and probability distribution to
determine their 1-in-100 year GMD event parameters, as opposed to the
20 V/km non-spatially averaged event from the 2012 paper cited in the
GMD Interim Report that visually extrapolated the data.
---------------------------------------------------------------------------

    \56\ Rivera, M., Backhaus, S., ``Review of the GMD Benchmark
Event in TPL-007-1,'' Los Alamos National Laboratory (September
2015) (Los Alamos Paper).
---------------------------------------------------------------------------

    42. Roodman contends that ``NERC's 100-year benchmark GMD event is
appropriately conservative in magnitude (except perhaps in the
southern-most US) if unrealistic in some other respects.'' \57\ Roodman
states that ``overall NERC's analytical frame does not strongly clash
with the data.'' \58\ However, Roodman contends that actual data
support local hot-spots in a larger region of lower magnitude
geoelectric fields that are not typically uniform in magnitude or
direction.\59\ Roodman addresses comments by Kappenman against the
benchmark GMD event by stating that the Oak Ridge Report's Meta-R-319
study, authored by Kappenman, modeled a 1-in-100 year GMD event based
largely on misunderstandings of historic GMDs, both in magnitude and
geographic footprint.\60\ Roodman recommends that the Commission
``require a much larger array of events for simulation'' in light of
the ``deep uncertainty and complexity of the GMD.'' \61\
---------------------------------------------------------------------------

    \57\ Roodman Comments at 4. Roodman criticizes the proposed
benchmark GMD event definition because it assumes that the induced
electrical field resulting from a GMD event is spatially uniform.
Roodman also contends that a GMD event that is less than a 1-in-100
year storm could potentially damage transformers. Id. at 12-14.
    \58\ Roodman Comments at 9.
    \59\ Id. at 10, 12-13.
    \60\ Id. at 5-6 (citing Oak Ridge National Laboratory,
Geomagnetic Storms and Their Impacts on the U.S. Power Grid: Meta-R-
319 at pages I-1 to I-3 (January 2010), http://www.ornl.gov/sci/ees/etsd/pes/pubs/ferc_Meta-R-319.pdf (Meta-R-319 Study).
    \61\ Id. at 15.
---------------------------------------------------------------------------

    43. Commenters opposed to the benchmark GMD event definition
proposed by NERC maintain that the standard drafting team significantly
underestimated the reference peak geoelectric field amplitude value for
a 1-in-100 year GMD event by relying on data from the IMAGE system and
by applying spatial averaging to that data set.\62\ For example,
Resilient Societies states that the standard drafting team should have
analyzed ``real-world data from within the United States and Canada,
including magnetometer readings from the [USGS] and Natural Resources
Canada observatories . . . [h]ad NERC and the Standard Drafting Team
collected and analyzed available real-world data, they would have
likely found that the severity of GMD in 1-in-100 Year reference storm
had been set far below a technically justified level and without a
`strong technical basis.' '' \63\ Likewise, Kappenman contends that
there are multiple examples where the benchmark GMD event and the
standard drafting team's model for calculating geoelectric fields
under-predict actual, historical GIC readings.\64\ Commenters opposed
to NERC's proposal variously argue that the reference peak geoelectric
field amplitude should be set at a level commensurate with the 1921
Railroad Storm or 1859 Carrington Event or at the 20 V/km level cited
in the GMD Interim Report.\65\
---------------------------------------------------------------------------

    \62\ See, e.g., JINSA Comments at 2; Emprimus Comments at 1. See
also Gaunt Comments at 9 (indicating that the proposed benchmark GMD
event definition may underestimate the effects of a 1-in-100 GMD
event).
    \63\ Resilient Societies Comments at 20-21.
    \64\ Kappenman Comments at 15-29.
    \65\ See, e.g., EIS Comments at 2 (advocating use of 20 V/km);
Gaunt Comments at 6-9 (contending that NERC's proposed figure
results in a ``possible underestimation of the effects of GICs''
without suggesting an alternative figure); JINSA Comments at 2
(advocating use of 20 V/km); Emprimus Comments at 1 (advocating use
of 20 V/km); Briggs Comments at 1 (advocating that the benchmark GMD
event should be a ``Carrington Class solar superstorm'').
---------------------------------------------------------------------------

Commission Determination
    44. The Commission approves the reference peak geoelectric field
amplitude figure proposed by NERC. In addition, the Commission, as
proposed in the NOPR, directs NERC to develop revisions to the
benchmark GMD event definition so that the reference peak geoelectric
field amplitude component

is not based solely on spatially-averaged data. The Commission directs
NERC to submit this revision within 18 months of the effective date of
this Final Rule.
    45. NERC and industry comments do not contain new information to
support relying solely on spatially-averaged data to calculate the
reference peak geoelectric field amplitude in the benchmark GMD event
definition. The 2015 Pulkkinen Paper contains the same justifications
for spatial averaging as those presented in NERC's petition. In
addition, the 2015 Pulkkinen Paper validates the NOPR's concerns with
relying solely on spatial averaging generally and with the method used
by the standard drafting team to spatially average the IMAGE data
specifically. The 2015 Pulkkinen Paper, for example, states that
``regional scale geoelectric fields have not been considered earlier
from the statistical and extreme analyses standpoint'' and ``selection
of an area of 500 km [for spatial averaging] . . . [is] subjective.''
\66\ Further, the 2015 Pulkkinen Paper notes that ``we emphasize that
the work described in this paper is only the beginning in our
exploration of spatial geoelectric field structures pertaining to
extreme GIC . . . [and] [w]e will . . . expand the statistical analyses
to include characterization of multiple different spatial scales.''
\67\ On the latter point, NERC ``agrees that such research would
provide additional modeling insights and supports further collaborative
efforts between space weather researchers and electric utilities
through the NERC GMD Task Force.'' \68\ These statements support the
NOPR's observation that the use of spatial averaging in this context is
new, and thus there is a dearth of information or research regarding
its application or appropriate scale.
---------------------------------------------------------------------------

    \66\ 2015 Pulkkinen Paper at 2.
    \67\ Id. at 6.
    \68\ NERC Comments at 8.
---------------------------------------------------------------------------

    46. While we believe our directive addresses concerns with relying
solely on spatially-averaged data, we reiterate the position expressed
in the NOPR that a GMD event will have a peak value in one or more
location(s) and the amplitude will decline over distance from the peak;
and, as a result, imputing the highest peak geoelectric field value in
a planning area to the entire planning area may incorrectly
overestimate GMD impacts.\69\ Accordingly, our directive should not be
construed to prohibit the use of spatial averaging in some capacity,
particularly if more research results in a better understanding of how
spatial averaging can be used to reflect actual GMD events.
---------------------------------------------------------------------------

    \69\ NOPR, 151 FERC ] 61,134 at P 35.
---------------------------------------------------------------------------

    47. The NOPR proposed to direct NERC to revise Reliability Standard
TPL-007-1 so that the reference peak geoelectric field value is not
based solely on spatially-averaged data. NERC and industry comments
largely focused on the NOPR's discussion of one possible example to
address the directive (i.e., by running GMD Vulnerability Assessments
using spatially-averaged and non-spatially averaged reference peak
geoelectric field amplitudes). However, while the method discussed in
the NOPR is one possible option, the NOPR did not propose to direct
NERC to develop revisions based on that option or any specific option.
The Trade Associations' comments, discussed above, demonstrate that
there is another way to address the NOPR directive (i.e., by performing
planning models that also assess planning areas for localized ``hot
spots''). This approach may have merit if, for example, the geographic
size of the hot spot is supported by actual data and the hot spot is
centered over one or more locations that include an entity's facilities
that become critical during a GMD event. Without pre-judging how NERC
proposes to address the Commission's directive, NERC's response to this
directive should satisfy the NOPR's concern that reliance on spatially-
averaged data alone does not address localized peaks that could
potentially affect the reliable operation of the Bulk-Power System.
    48. We believe our directive should also largely address the
comments submitted by entities opposed to NERC's proposed reference
peak geoelectric field amplitude. Those commenters endorsed using a
higher reference peak geoelectric field amplitude value, such as the 20
V/km cited in the GMD Interim Report. At the outset, we observe that
the comments critical of the standard drafting team's use of the IMAGE
data only speculate that had the standard drafting team used other
sources, the calculated reference peak geoelectric field amplitude
value would have been higher.\70\ Moreover, among the commenters
critical of NERC's proposal, there is disagreement over the magnitude
of historical storms which some of these commenters would use as a
model.\71\ While NERC has discretion on how to propose to address our
directive, NERC could revise Reliability Standard TPL-007-1 to apply a
higher reference peak geoelectric field amplitude value to assess the
impact of localized hot spots on the Bulk-Power System, as suggested by
the Trade Associations. The effects of such hot spots could include
increases in GIC levels, volt-ampere reactive power consumption,
harmonics on the Bulk-Power System (and associated misoperations) and
transformer heating. Moreover, the directive to revise Reliability
Standard TPL-007-1 and, as discussed below, the directives to research
geomagnetic latitude scaling factors and earth conductivity models as
part of the GMD research work plan and to revise Reliability Standard
TPL-007-1 to require the collection of necessary GIC monitoring and
magnetometer data to validate GMD models should largely address or at
least help to focus-in on factors that may be causing any inaccuracies
in the standard drafting team's model.
---------------------------------------------------------------------------

    \70\ See, e.g., Resilient Societies Comments at 21 (``Had NERC
and the Standard Drafting Team collected and analyzed available
real-world data, they would have likely found that the severity of
GMD in 1-in-100 Year reference storm had been set far below a
technically justified level . . .'' (emphasis added)).
    \71\ See, e.g., Gaunt Comments at 13 (stating that the 1859
Carrington Event is ``probably outside the re-occurrence frequency
of 1:100 years adopted by NERC for the benchmark event''); Briggs
Comments at 1 (advocating using a `` `Carrington Class' super
storm'' as the benchmark GMD event).
---------------------------------------------------------------------------

    49. Consistent with Order No. 779, the Commission does not specify
a particular reference peak geoelectric field amplitude value that
should be applied to hot spots given present uncertainties. While 20 V/
km would seem to be a possible value, the Los Alamos Paper suggests
that the 20 V/km figure may be too high. The Los Alamos Paper analyzed
the non-spatially averaged IMAGE data to calculate a reference peak
geoelectric field amplitude range (i.e., 8.4 V/km to 16.6 V/km) that is
between NERC's proposed spatially-averaged value of 8 V/km and the non-
spatially averaged 20 V/km figure cited in the GMD Interim Report.
    50. Although the NOPR did not propose to direct NERC to submit
revisions to Reliability Standard TPL-007-1 by a certain date with
respect to the benchmark GMD event definition, the Commission
determines that it is appropriate to impose an 18-month deadline from
the effective date of this Final Rule. As discussed below, the
Commission approves the five-year implementation period for Reliability
Standard TPL-007-1 proposed by NERC. Having NERC submit revisions to
the benchmark GMD event definition within 18 months of the effective
date of this Final Rule, with the Commission acting promptly on the
revised Reliability Standard, should afford

enough time to apply the revised benchmark GMD event definition in the
first GMD Vulnerability Assessment under the timeline set forth in
Reliability Standard TPL-007-1's implementation plan. If circumstances,
such as the complexity of the revised benchmark GMD event, require it,
NERC may propose and justify a revised implementation plan.
2. Geomagnetic Latitude Scaling Factor
NOPR
    51. The NOPR proposed to approve the geomagnetic latitude scaling
factor in NERC's proposed benchmark GMD event definition. However, the
NOPR sought comment on whether, in light of studies indicating that GMD
events could have pronounced effects on lower geomagnetic latitudes, a
modification is warranted to reduce the impact of the scaling
factors.\72\
---------------------------------------------------------------------------

    \72\ NOPR, 151 FERC ] 61,134 at P 37 (citing Ngwira, C.M.,
Pulkkinen, A., Kuznetsova, M.M., Glocer, A., ``Modeling extreme
`Carrington-type' space weather events using three-dimensional
global MHD simulations,'' 119 Journal of Geophysical Research: Space
Physics 4472 (2014) (finding that in Carrington-type events ``the
region of large induced ground electric fields is displaced further
equatorward . . . [and] thereby may affect power grids . . . such as
[those in] southern states of [the] continental U.S.''); Gaunt,
C.T., Coetzee, G., ``Transformer Failures in Regions Incorrectly
Considered to have Low GIC-Risk,'' 2007 IEEE Lausanne 807 (July
2007) (stating that twelve transformers were damaged and taken out
of service in South Africa (at -40 degrees latitude) during the
October 2003 Halloween Storm GMD event)). See also Liu, C., Li, Y.,
Pirjola, R., ``Observations and modeling of GIC in the Chinese
large-scale high-voltage power networks,'' Journal Space Weather
Space Climate 4 at A03-p6 (2014) (Liu Paper), http://www.swsc-journal.org/articles/swsc/pdf/2014/01/swsc130009.pdf (finding that
GICs of about 25A/phase had been measured in a transformer at a
nuclear power plant at 22.6 degrees north latitude (significantly
further away from the magnetic pole than Florida)).
---------------------------------------------------------------------------

Comments
    52. NERC contends that the geomagnetic latitude scaling factor in
Reliability Standard TPL-007-1 ``accurately models the reduction of
induced geoelectric fields that occurs over the mid-latitude region
during a 100-year GMD event scenario . . . [and] describes the observed
drop in geoelectric field that has been exhibited in analysis of major
recorded geomagnetic storms.'' \73\ NERC maintains that modifying the
scaling factor is not technically justified based on the publications
cited in the NOPR. NERC states that the first paper cited in the NOPR
is based on models that are not mature and reflect a 1-in-150 year
storm. NERC contends that the second paper does not clearly show that
the purported transformer damage in South Africa was the result of
abnormally high GICs during the October 2003 Halloween Storm. NERC
further states that the standard drafting team analyzed the October
2003 Halloween Storm when developing the proposed geomagnetic latitude
scaling factor.
---------------------------------------------------------------------------

    \73\ NERC Comments at 9 (citing Ngwira, C., Pulkkinen, A.,
Wilder, F., Crowley, G., ``Extended Study of Extreme Geoelectric
Field Event Scenarios for Geomagnetically Induced Current
Applications,'' 11 Space Weather 121 (2013) (Ngwira 2013 Paper)).
---------------------------------------------------------------------------

    53. The Trade Associations support the geomagnetic latitude scaling
factor proposed by NERC. Like NERC, the Trade Associations contend that
the papers cited in the NOPR do not support modifications because the
models in the first paper ``remain highly theoretical and not
sufficiently validated'' and because the second paper likely involved
other causal factors leading to the transformer failure.\74\ Joint
ISOs/RTOs also support the geomagnetic latitude scaling factor proposed
by NERC. ITC states that NERC's proposal is a ``reasonable approach
given the current state of the science pertaining to GMD . . . [but]
that as the science pertaining to GMD matures and more data becomes
available, the scaling factors should be revisited and revised.'' \75\
ITC suggests revisiting the geomagnetic latitude scaling factor every
five years to incorporate any new developments in GMD science.
---------------------------------------------------------------------------

    \74\ Trade Associations Comments at 18-19.
    \75\ Joint ISOs/RTOs Comments at 5.
---------------------------------------------------------------------------

    54. Several commenters question or disagree with the geomagnetic
latitude scaling factors in Reliability Standard TPL-007-1 based on
simulations and reports of damage to transformers in areas expected to
be at low risk due to their geomagnetic latitude.\76\ EIS contends that
the proposed geomagnetic latitude scaling factor's assumption of a
storm centered at 60 degrees geomagnetic latitude is inconsistent with
a study relied upon by NERC.\77\ The Los Alamos Paper's analysis
suggests that NERC's proposed geomagnetic latitude scaling factors,
while they fit well with weaker historical GMD events from which they
were derived, may not accurately represent the effects of a 1-in-100
year GMD event at lower geomagnetic latitudes. The Los Alamos Paper
states that a model of the electrojet is needed to ``effectively
extrapolate the small to moderate disturbance data currently in the
historical record to disturbances as large as the TPL-007-1 Benchmark
Event.'' \78\ The Los Alamos Paper uses a larger number of geomagnetic
disturbances (122 instead of 12) and a wider range of observatories by
using the world-wide SuperMAG magnetometer array data, which includes
the INTERMAGNET data used to support NERC's geomagnetic latitude
scaling factors. The Los Alamos Paper shows that for more severe storms
(Dst <-300, for which there are nine storms in the data set) the NERC
scaling factors tend to be low, off by a factor of up to two or three
at some latitudes. The Los Alamos Paper also recommends ``an additional
degree of conservatism in the mid-geomagnetic latitudes'' until such
time as a model is developed.\79\ The Los Alamos Paper authors
recommend a factor of 2 as a conservative correction.
---------------------------------------------------------------------------

    \76\ See, e.g., Gaunt Comments at 6; JINSA Comments at 2;
Emprimus Comments at 2-3; Roodman Comments at 9; Resilient Societies
Comments at 31-31; Kappenman Comments at 41-42.
    \77\ EIS Comments at 5 (citing Ngwira 2013 Paper).
    \78\ Los Alamos Paper at 12.
    \79\ Id.
---------------------------------------------------------------------------

Commission Determination
    55. The Commission approves the geomagnetic latitude scaling factor
in the benchmark GMD event definition. In addition, the Commission
directs NERC to conduct further research on geomagnetic latitude
scaling factors as part of the GMD research work plan discussed below.
    56. Based on the record, the Commission finds sufficient evidence
to conclude that lower geomagnetic latitudes are, to some degree, less
susceptible to the effects of GMD events. The issue identified in the
NOPR and by some commenters focused on the specific scaling factors in
Reliability Standard TPL-007-1 in light of some analyses and anecdotal
evidence suggesting that lower geomagnetic latitudes may be impacted by
GMDs to a larger degree than reflected in Reliability Standard TPL-007-
1.
    57. The geomagnetic latitude scaling factor in Reliability Standard
TPL-007-1 is supported by some of the available research.\80\ In
addition, with the

exception of the Los Alamos Paper, commenters did not provide new
information on the proposed scaling factor nor did commenters suggest
alternative scaling factors. However, the Commission finds that there
are enough questions regarding the effects of GMDs at lower geomagnetic
latitudes to warrant directing NERC to study this issue further as part
of the GMD research work plan. The Los Alamos Paper and the sources
cited in the NOPR are suggestive that a 1-in-100 year GMD event could
have a greater impact on lower geomagnetic latitudes than NERC's
proposed scaling factor assumes. But, as the Los Alamos Paper
recognizes, the current absence of historical data on large GMD events
precludes a definitive conclusion based on an empirical analysis of
historical observations. Moreover, in prepared comments for the March
1, 2016 Technical Conference, Dr. Backhaus, one of the authors of the
Los Alamos Paper, recommended that ``the current NERC analysis should
be adopted and further analysis performed with additional observational
data and severe disturbance modeling efforts with the intent of
refining the geomagnetic latitude scaling law in future revisions.''
\81\ The Commission directs NERC to reexamine the geomagnetic latitude
scaling factors in Reliability Standard TPL-007-1 as part of the GMD
research work plan, including using existing models and developing new
models to extrapolate from historical data on small to moderate GMD
events the impacts of a large, 1-in-100 year GMD event on lower
geomagnetic latitudes.
---------------------------------------------------------------------------

    \80\ See NERC Comments at 9 (citing Ngwira 2013 Paper). We
disagree with the contention made by EIS that NERC's proposed
geomagnetic latitude scaling factors are inconsistent with the
Ngwira 2013 Paper. EIS maintains that the Ngwira 2013 Paper supports
the conclusion that the benchmark GMD event should be centered at 50
degrees geomagnetic latitude instead of the 60 degree geomagnetic
latitude figure in Reliability Standard TPL-007-1. The Ngwira 2013
Paper contains no such conclusion. Instead, the Ngwira 2013 Paper
found that the latitude threshold boundary is a transition region
having a definite lower bound of 50 degrees geomagnetic latitude but
with an upper range as high as 55 degrees geomagnetic latitude.
Ngwira 2013 Paper at 127, 130. The Ngwira 2013 Paper also stated
that its findings were ``in agreement with earlier observations by
[Thomson et al., 2011] and more recently by [Pulkkinen et al.,
2012], which estimated the location to be within 50 [degrees]-62
[degrees].'' Id. at 124.
    \81\ Statement of Scott Backhaus, March 1, 2016 Technical
Conference at 2.
---------------------------------------------------------------------------

B. Thermal Impact Assessments

NERC Petition
    58. Reliability Standard TPL-007-1, Requirement R6 requires owners
of transformers that are subject to the Reliability Standard to conduct
thermal analyses to determine if the transformers would be able to
withstand the thermal effects associated with a benchmark GMD event.
NERC states that transformers are exempt from the thermal impact
assessment requirement if the maximum effective GIC in the transformer
is less than 75 A/phase during the benchmark GMD event as determined by
an analysis of the system. NERC explains that ``based on available
power transformer measurement data, transformers with an effective GIC
of less than 75 A/phase during the Benchmark GMD Event are unlikely to
exceed known temperature limits established by technical
organizations.'' \82\
---------------------------------------------------------------------------

    \82\ NERC Petition at 30.
---------------------------------------------------------------------------

    59. As provided in Requirements R5 and R6, ``the maximum GIC value
for the worst case geoelectric field orientation for the benchmark GMD
event described in Attachment 1'' determines whether a transformer
satisfies the 75 A/phase threshold. If the 75 A/phase threshold is
satisfied, Requirement R6 states, in relevant part, that a thermal
impact assessment should be conducted on the qualifying transformer
based on the effective GIC flow information provided in Requirement R5.
    60. In its June 28, 2016 filing, NERC states that it identified an
error in Figure 1 (Upper Bound of Peak Metallic Hot Spot Temperatures
Calculated Using the Benchmark GMD Event) of the White Paper on
Screening Criterion for Transformer Thermal Impact Assessment that
resulted in incorrect plotting of simulated power transformer peak hot-
spot heating from the benchmark GMD event. NERC revised Figure 1 in the
White Paper on Screening Criterion for Transformer Thermal Impact
Assessment and made corresponding revisions to related text, figures
and tables throughout the technical white papers supporting the
proposed standard. NERC maintains that even with the revision to Figure
1, ``the standard drafting team determined that the 75 A per phase
threshold for transformer thermal impact assessment remains a valid
criterion . . . [and] it is not necessary to revise any Requirements of
the proposed Reliability Standard.'' \83\
---------------------------------------------------------------------------

    \83\ NERC June 28, 2016 Filing at 1.
---------------------------------------------------------------------------

NOPR
    61. The NOPR proposed to approve the transformer thermal impact
assessments in Requirement R6. In addition, as with the benchmark GMD
event definition, the NOPR proposed to direct NERC to revise
Requirement R6 to require registered entities to apply spatially
averaged and non-spatially averaged peak geoelectric field values, or
some equally efficient and effective alternative, when conducting
thermal impact assessments. The NOPR also noted that Requirement R6
does not use the maximum GIC-producing orientation to conduct the
thermal assessment for qualifying transformers; instead, the
requirement uses the effective GIC time series described in Requirement
R5.2 to conduct the thermal assessment on qualifying transformers. The
NOPR sought comment from NERC as to why qualifying transformers are not
assessed for thermal impacts using the maximum GIC-producing
orientation and directed NERC to address whether, by not using the
maximum GIC-producing orientation, the required thermal impact
assessments could underestimate the impact of a benchmark GMD event on
a qualifying transformer.
Comments
    62. NERC opposes modifying the thermal impact assessments in
Requirement R6 so that the assessments do not rely only on spatially-
averaged data. NERC claims that the benchmark GMD event definition will
``result in GIC calculations that are appropriately scaled for system-
wide assessments.'' \84\ NERC also contends that the ``analysis
performed by the standard drafting team of the impact of localized
enhanced geoelectric fields on the GIC levels in transformers indicates
that relatively few transformers in the system are affected.'' \85\ In
response to the question in the NOPR of why qualifying transformers are
not assessed for thermal impacts using the maximum GIC producing
orientation, NERC states that ``the orientation of the geomagnetic
field varies widely and continuously during a GMD event . . . [and]
would be aligned with the maximum GIC-producing orientation for only a
few minutes.'' \86\ NERC concludes that ``[i]n the context of
transformer hot spot heating with time constants in the order of tens
of minutes, alignment with any particular orientation for a few minutes
at a particular point in time is not a driving concern.'' \87\ NERC
further states that the wave shape used in Reliability Standard TPL-
007-1 provides ``generally conservative results when performing thermal
analysis of power transformers.'' \88\
---------------------------------------------------------------------------

    \84\ NERC Comments at 17.
    \85\ Id.
    \86\ Id. at 19.
    \87\ Id.
    \88\ Id.
---------------------------------------------------------------------------

    63. The Trade Associations and CEA do not support the proposed NOPR
directive because, they state, it focuses too heavily on individual
transformers. The Trade Associations maintain that Reliability Standard
TPL-007-1 ``was never intended to address specific localized areas that
might experience peak conditions and affect what we understand to be a
very small number of assets that are unlikely to initiate a cascading
outage.'' \89\
---------------------------------------------------------------------------

    \89\ Trade Associations Comments at 21.

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

    64. Certain non-industry commenters contend that the 75 A/phase
qualifying threshold for thermal impact assessments is not technically
justified. Emprimus contends that ``many transformers have GIC ratings
less than 75 amps per phase,'' but Emprimus claims that an Idaho
National Lab study showed that ``GIC introduced at 10 amps per phase on
high voltage transformers exceed harmonic levels allowed under IEEE
519.'' \90\ Emprimus also maintains that a 2013 IEEE paper ``suggest[s]
that there can be generator rotor damage at GIC levels which exceed 50
amps per phase.'' \91\ Gaunt contends, based on his analysis of
historical events, that ``degradation is initiated in transformers by
currents that are significantly below the 75 amps per phase.'' \92\
Gaunt states that ``[u]ntil better records are kept of transformer
[dissolved gas in oil analysis] and transformer failure, the proposed
level of 75 [A/phase] of GIC needed to initiate assessment of
transformer response must be considered excessively high.'' \93\ Gaunt
recommends a qualifying threshold of 15 amps per phase. Resilient
Societies states that the 75 A/phase threshold is based on a
mathematical model for one type of transformer and that several tests
referenced in the standard drafting team's White Paper on Transformer
Thermal Impact Assessment were carried out under no load or minimal
load conditions. In addition, Resilient Societies contends that
applying the 75 A/phase threshold and NERC's proposed benchmark GMD
event (i.e., using the spatially-averaged reference peak geoelectric
field amplitude) results in only ``two out of approximately 560 extra
high voltage transformers'' requiring thermal impact assessments in the
PJM region; only one 345 kV transformer requiring thermal impact
assessment in Maine; and zero transformers requiring thermal impact
assessments in ATC's network.\94\ Kappenman contends that the 75 A/
phase threshold does not consider transformers with tertiary windings
or autotransformers which may be impacted at lower GIC levels than 75
A/phase.\95\
---------------------------------------------------------------------------

    \90\ Emprimus Comments at 4.
    \91\ Id.
    \92\ Gaunt Comments at 13.
    \93\ Id. at 14.
    \94\ Resilient Societies Comments at 5-14. Resilient Societies
states that modeling performed by Central Maine Power Co. and
Emprimus for the Maine Public Utilities Commission indicates that
eight 345 kV transformers (53 percent according to Resilient
Societies) would require thermal impact assessments in Maine if the
reference peak geoelectric field amplitude were set at 20 V/km. Id.
at 10. Resilient Societies also contends that this result is
consistent with the Oak Ridge Meta-R-319 Study's finding that eight
transformers would be ``at risk'' in Maine under a `` `30 Amp At-
Risk Threshold scenario.' '' Id. Central Maine Power Co. calculated
that the scaled NERC benchmark GMD event for the northernmost point
in Maine would be 4.53 V/km. Resilient Societies' calculations
regarding ATC estimate that the scaled benchmark GMD event for
Wisconsin would be 2 V/km. Id. at 14.
    \95\ The Commission received two comments following NERC's June
28, 2016 Filing. However, the supplemental comments did not
specifically address the revisions submitted in NERC's June 28, 2016
filing.
---------------------------------------------------------------------------

Commission Determination
    65. Consistent with our determination above regarding the reference
peak geoelectric field amplitude value, the Commission directs NERC to
revise Requirement R6 to require registered entities to apply spatially
averaged and non-spatially averaged peak geoelectric field values, or
some equally efficient and effective alternative, when conducting
thermal impact assessments.
    66. In the NOPR, the Commission requested comment from NERC
regarding why Requirement R6 does not use the maximum GIC-producing
orientation to conduct the thermal assessment for qualifying
transformers. After considering NERC's response, we continue to have
concerns with not using the maximum GIC-producing orientation for the
thermal assessment of transformers. However, at this time we do not
direct NERC to modify Reliability Standard TPL-007-1. Instead, as part
of the GMD research work plan discussed below, NERC is directed to
study this issue to determine how the geoelectric field time series can
be applied to a particular transformer so that the orientation of the
time series, over time, will maximize GIC flow in the transformer, and
to include the results in a filing with the Commission.
    67. We are not persuaded by the comments opposed to Requirement
R6's application of a 75 A/phase qualifying threshold. The standard
drafting team's White Paper on Thermal Screening Criterion, as revised
by NERC in the June 28, 2016 Filing, provides an adequate technical
basis to approve NERC's proposal. As noted in the revised White Paper
on Thermal Screening Criterion, the calculated metallic hot spot
temperature corresponding to an effective GIC of 75 A/phase is 172
degrees Celsius; that figure is higher than the original figure of 150
degrees Celsius calculated by the standard drafting team but is still
below the 200 degree Celsius limit specified in IEEE Std C57.91-
2011.\96\ The comments, particularly those of Gaunt, attempt to
correlate historical transformer failures to past GMD events (e.g.,
2003 Halloween Storm), while arguing that the transformers damaged in
those events did not experience GICs of 75 A/phase. The evidence
adduced by Gaunt and others is inconclusive.\97\ We therefore direct
NERC to include further analysis of the thermal impact assessment
qualifying threshold in the GMD research work plan.
---------------------------------------------------------------------------

    \96\ NERC June 28, 2016 Filing, Revised White Paper on Screening
Criterion for Transformer Thermal Impact Assessment at 3.
    \97\ See, e.g., Gaunt Comments at 13 (``Although it has not been
possible to assemble an exact model of the power system during the
period 29-31 October 2003, and data on the ground conductivity in
Southern Africa is not known with great certainty, we are confident
that the several calculations of GIC that been carried out are not
grossly inaccurate.'').
---------------------------------------------------------------------------

    68. In NOPR comments and in comments to the standard drafting team,
Kappenman stated that delta winding heating due to harmonics has not
been adequately considered by the standard drafting team and that,
thermally, this is a bigger concern than metallic hot spot heating.\98\
The standard drafting team responded that the vulnerability described
for tertiary winding harmonic heating is based on the assumption that
delta winding currents can be calculated using the turns ratio between
primary and tertiary winding, which is incorrect when a transformer is
under saturation.\99\ The standard drafting team concluded that
Kappenman's concerns regarding delta windings being a problem from a
thermal standpoint are unwarranted and that the criteria developed by
the standard drafting team use state-of-the-art analysis methods and
measurement-supported transformer models. The Commission believes that
the heating effects of harmonics on transformers, as discussed at the
March 1, 2016 Technical Conference, are of concern and require further
research.\100\ Accordingly, we direct NERC to address the effects of
harmonics, including tertiary winding harmonic heating and any other
effects on transformers, as part of the GMD research work plan.\101\
---------------------------------------------------------------------------

    \98\ Kappenman Comments at 45.
    \99\ Consideration of Comments Project 2013-03 Geomagnetic
Disturbance Mitigation at 39 (December 5, 2014), http://www.nerc.com/pa/Stand/Project201303GeomagneticDisturbanceMitigation/Comment%20Report%20_2013-03_GMD_12052014.pdf.
    \100\ At the March 1, 2016 Technical Conference, Dr. Horton, a
member of the standard drafting team, discussed the potential
negative impacts of harmonics generated by GMDs on protection
systems, reactive power resources and generators. Slide Presentation
of Randy Horton, March 1, 2016 Technical Conference at 2-6.
    \101\ NERC indicated in its comments that it is already studying
the issue of harmonics. NERC Comments at 14 (``NERC is collaborating
with researchers to examine more complex GMD vulnerability issues,
such as harmonics and mitigation assessment techniques, to enhance
the modeling capabilities of the industry'').

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

C. GMD Research Work Plan

NOPR

    69. The NOPR proposed to address the need for more data and
certainty regarding GMD events and their potential effect on the Bulk-
Power System by directing NERC to submit informational filings that
address GMD-related research areas. The NOPR proposed to direct NERC to
submit in the first filing a GMD research work plan indicating how NERC
plans to: (1) Further analyze the area over which spatial averaging
should be calculated for stability studies, including performing
sensitivity analyses on squares less than 500 km per side (e.g., 100
km, 200 km); (2) further analyze earth conductivity models by, for
example, using metered GIC and magnetometer readings to calculate earth
conductivity and using 3-D readings; (3) determine whether new analyses
and observations support modifying the use of single station readings
around the earth to adjust the spatially averaged benchmark for
latitude; and (4) assess how to make GMD data (e.g., GIC monitoring and
magnetometer data) available to researchers for study.
    70. With respect to GIC monitoring and magnetometer readings, the
NOPR sought comment on the barriers, if any, to public dissemination of
such readings, including if their dissemination poses a security risk
and if any such data should be treated as Critical Energy
Infrastructure Information or otherwise restricted to authorized users.
The NOPR proposed that NERC submit the GMD research work plan within
six months of the effective date of a final rule in this proceeding.
The NOPR also proposed that the GMD research work plan submitted by
NERC should include a schedule for submitting one or more informational
filings that apprise the Commission of the results of the four
additional study areas, as well as any other relevant developments in
GMD research, and should assess whether Reliability Standard TPL-007-1
remains valid in light of new information or whether revisions are
appropriate.
Comments
    71. NERC states that continued GMD research is necessary and that
the potential impacts of GMDs on reliability are evolving. NERC,
however, prefers that the NERC GMD Task Force continue its research
without the GMD research work plan proposed in the NOPR. NERC contends
that allowing the NERC GMD Task Force to continue its work would
``accomplish NERC's and the Commission's shared goals in advancing GMD
understanding and knowledge, while providing the flexibility necessary
for NERC to work effectively with its international research partners
to address risks to the reliability of the North American Bulk-Power
System.'' \102\ NERC also claims that, in addition to being unnecessary
given the work of the NERC GMD Task Force, the NOPR proposal ``poses
practical challenges . . . [because it would] bind[] NERC to a specific
and inflexible research plan and report schedule to be determined six
months (or even a year) following the effective date of a final rule in
this proceeding.'' \103\
---------------------------------------------------------------------------

    \102\ NERC Comments at 13.
    \103\ Id. at 16.
---------------------------------------------------------------------------

    72. The Trade Associations and CEA do not support the GMD research
work plan. Instead, they contend that NERC should be allowed to pursue
GMD research independently.
    73. Several commenters, while not addressing the NOPR proposal
specifically, state that additional research is necessary to validate
or improve elements of the benchmark GMD event definition.\104\
---------------------------------------------------------------------------

    \104\ See, e.g., USGS Comments at 1 (addressing earth
conductivity models), Bardin Comments at 2 (addressing earth
conductivity models); Roodman Comments at 3 (addressing reference
peak geoelectric field amplitude); Gaunt Comments at 7 (addressing
spatial averaging).
---------------------------------------------------------------------------

    74. The Trade Associations state that monitoring data should be
available for academic research purposes. Resilient Societies contends
that monitoring data should be publicly disseminated on a regular basis
and that there is no security risk in releasing such data because they
relate to naturally occurring phenomena. Emprimus states that it
supports making GIC and magnetometer monitoring data available to the
public. Bardin supports making GIC and GMD-related information to the
public or at least to ``legitimate researchers.''
    75. Hydro One and CEA do not support mandatory data sharing without
the use of non-disclosure agreements.
Commission Determination
    76. The Commission recognizes, as do commenters both supporting and
opposing proposed Reliability Standard TPL-007-1, that our collective
understanding of the threats posed by GMD is evolving as additional
research and analysis are conducted. These ongoing efforts are critical
to the nation's long-term efforts to protect the grid against a major
GMD event. While we approve NERC's proposed Reliability Standard TPL-
007-1 and direct certain modifications, as described above, the
Commission also concludes that facilitating additional research and
analysis is necessary to adequately address these threats. As discussed
in the next two sections of this final rule, the Commission directs a
three-prong approach to further those efforts by directing NERC to: (1)
Develop, submit, and implement a GMD research work plan; (2) develop
revisions to Reliability Standard TPL-007-1 to require responsible
entities to collect GIC monitoring and magnetometer data; and (3)
collect GIC monitoring and magnetometer data from registered entities
for the period beginning May 2013, including both data existing as of
the date of this order and new data going forward, and to make that
information available.
    77. First, the Commission adopts the NOPR proposal and directs NERC
to submit a GMD research work plan and, subsequently, informational
filings that address the GMD-related research areas identified in the
NOPR, additional research tasks identified in this Final Rule (i.e.,
the research tasks identified in the thermal impact assessment
discussion above) and, in NERC's discretion, any GMD-related research
areas generally that may impact the development of new or modified GMD
Reliability Standards.\105\ The GMD research work plan should be
submitted within six months of the effective date of this final rule.
The research required by this directive should be informed by ongoing
GMD-related research efforts of entities such as USGS, National
Atmospheric and Oceanic Administration (NOAA), National Aeronautics and
Space Administration, Department of Energy, academia and other publicly
available contributors, including work performed for the National Space
Weather Action Plan.\106\
---------------------------------------------------------------------------

    \105\ The GMD research work plan need not address the fourth
research area identified in the NOPR (i.e., assess how to make GIC
monitoring and magnetometer data available to researchers for study)
given the Commission's directive and discussion below regarding the
collection and dissemination of necessary GIC monitoring and
magnetometer data.
    \106\ National Science and Technology Council, National Space
Weather Action Plan (October 2015), https://www.whitehouse.gov/sites/default/files/microsites/ostp/final_nationalspaceweatheractionplan_20151028.pdf.
---------------------------------------------------------------------------

    78. As part of the second research area identified in the NOPR
(i.e., further analyze earth conductivity models by, for example, using
metered GIC and

magnetometer readings to calculate earth conductivity and using 3-D
readings), the GMD research work plan should specifically investigate
``coastal effects'' on ground conductivity models.
    79. In addition, the large variances described by USGS in actual 3-
D ground conductivity data raise the question of whether one time
series geomagnetic field is sufficient for vulnerability assessments.
The characteristics, including frequencies, of the time series interact
with the ground conductivity to produce the geoelectric field that
drives the GIC. Therefore, the research should address whether
additional realistic time series should be selected to perform
assessments in order to capture the time series that produces the most
vulnerability for an area.
    80. The comments largely agree that additional GMD research should
be pursued, particularly with respect to the elements of the benchmark
GMD event definition (i.e., the reference peak geoelectric field
amplitude value, geomagnetic latitude scaling factor, and earth
conductivity scaling factor). There is ample evidence in the record to
support the need for additional GMD-related research.\107\ For example,
USGS submitted comments indicating that USGS's one dimensional ground
electrical conductivity models used by the standard drafting team have
a ``significant limitation'' in that they assume that a ``[one
dimensional] conductivity-with-depth profile can adequately represent a
large geographic region,'' which USGS describes as a ``gross
simplification.'' \108\ USGS observes that while the ``proposed
standard attempted to incorporate the best scientific research
available . . . it must be noted that the supporting science is quickly
evolving.'' \109\ USGS recommends that ``the proposed standard should
establish a process for updates and improvements that acknowledges and
addresses the quickly evolving nature of relevant science and
associated data.'' \110\
---------------------------------------------------------------------------

    \107\ See, e.g., NERC October 22, 2015 Supplemental Comments at
7-8 (expressing support for additional research regarding
geomagnetic latitude scaling factors and earth conductivity models).
    \108\ USGS Comments at 1.
    \109\ Id.
    \110\ Id. We note that Reliability Standard TPL-007-1, Att. 1
(Calculating Geoelectric Fields for the Benchmark GMD Event) already
provides that a ``planner can also use specific earth model(s) with
documented justification . . .'' Accordingly, Reliability Standard
TPL-007-1 includes a mechanism for incorporating improvements in
earth conductivity models when calculating the benchmark GMD event.
---------------------------------------------------------------------------

    81. Opposition to the proposal centers on the contention that the
proposed directive is unnecessary and potentially counterproductive
given the continuing work of the NERC GMD Task Force. We do not find
these comments persuasive. Our directive requires NERC to submit a work
plan for the study of GMD-related issues that are already being
examined or that NERC agrees should be studied.\111\ Nothing in our
directive precludes NERC from continuing to use the NERC GMD Task Force
as a vehicle for conducting the directed research or other research.
Indeed, we encourage NERC to continue to use the GMD Task Force as a
forum for engagement with interested stakeholders. In addition, we do
not set specific deadlines for completion of the research; we only
require NERC to submit the GMD research work plan within six months of
the effective date of a final rule. The GMD research work plan, in
turn, should include target dates for the completion of research topics
and the reporting of findings to the Commission. The Commission intends
to notice and invite comment on the GMD research work plan. An
extension of time to submit the GMD research work plan may be available
if six months proves to be insufficient. In addition, given the
uncertainties commonly associated with complex research projects, the
Commission will be flexible regarding changes to the tasks and target
dates established in the GMD research work plan.
---------------------------------------------------------------------------

    \111\ See, e.g., NERC Comments at 8 (``NERC agrees that [spatial
averaging] research would provide additional modeling insights and
supports further collaborative efforts between space weather
researchers and electric utilities through the NERC GMD Task
Force''), at 10 (``NERC agrees that additional [geomagnetic latitude
scaling] research is necessary, and supports the significant
research that is occurring throughout the space weather community to
develop and validate models and simulation techniques''), at 13
(``Working with EPRI, researchers at USGS, and industry, NERC will
work to improve the earth conductivity models that are a vital
component to understanding the risks of GMD events in each
geographic region''), and at 23 (``efforts are already underway to
expand GMD monitoring capabilities . . . [and] [t]hrough these
efforts, NERC and industry should effectively address the concerns
noted by the Commission in the NOPR, including ensuring a more
complete set of data for operational and planning needs and
supporting analytical validation and situational awareness'').
---------------------------------------------------------------------------

D. Monitoring Data

NERC Petition
    82. Reliability Standard TPL-007-1, Requirement R2 requires
responsible entities to ``maintain System models and GIC System models
of the responsible entity's planning area for performing the study or
studies needed to complete GMD Vulnerability Assessment(s).'' NERC
states that Reliability Standard TPL-007-1 contains ``requirements to
develop the models, studies, and assessments necessary to build a
picture of overall GMD vulnerability and identify where mitigation
measures may be necessary.'' \112\ NERC explains that mitigating
strategies ``may include installation of hardware (e.g., GIC blocking
or monitoring devices), equipment upgrades, training, or enhanced
Operating Procedures.'' \113\
---------------------------------------------------------------------------

    \112\ NERC Petition at 13.
    \113\ Id. at 32.
---------------------------------------------------------------------------

NOPR
    83. The NOPR proposed to direct NERC to revise Reliability Standard
TPL-007-1 to require the installation of monitoring equipment (i.e.,
GIC monitors and magnetometers) to the extent there are any gaps in
existing GIC monitoring and magnetometer networks. Alternatively, the
NOPR sought comment on whether NERC should be responsible for
installation of any additional, necessary magnetometers while affected
entities would be responsible for installation of additional, necessary
GIC monitors. The NOPR also proposed that, as part of NERC's work plan,
NERC identify the number and location of current GIC monitors and
magnetometers in the United States to assess whether there are any
gaps. The NOPR sought comment on whether the Commission should adopt a
policy specifically allowing recovery of costs associated with or
incurred to comply with Reliability Standard TPL-007-1, including for
the purchase and installation of monitoring devices.
Comments
    84. NERC does not support the NOPR proposal regarding the
installation of GIC monitoring devices and magnetometers. NERC contends
that the proposed requirement is not necessary because Reliability
Standard TPL-007-1 ``supports effective GMD monitoring programs, and
additional efforts are planned or underway to ensure adequate data for
reliability purposes.'' \114\ NERC also maintains that the proposed
directive ``poses implementation challenges . . . [because] GMD
monitoring capabilities and technical information have not yet reached
a level of maturity to support application in a Reliability Standard,
and not all applicable entities have developed the comprehensive

understanding of system vulnerabilities that would be needed to deploy
GMD monitoring devices for the greatest reliability benefit.'' \115\
NERC also notes that a requirement mandating the installation of
monitoring devices for situational awareness purposes would be outside
the scope of a planning Reliability Standard.
---------------------------------------------------------------------------

    \114\ NERC Comments at 21. NERC cites as examples the 40 GIC
monitoring nodes operated by EPRI's SUNBURST network; the use of GIC
monitoring devices by some registered entities (e.g., PJM); and the
magnetometer networks operated by USGS and EPRI. Id. at 23-25.
    \115\ Id.
---------------------------------------------------------------------------

    85. The Trade Associations, CEA, ITC, Hydro One and Tri-State,
while agreeing that more data are useful to analytical validation and
situational awareness, do not support the NOPR proposal. CEA does not
support the proposal because Reliability Standard TPL-007-1 is a
planning standard; a one-size-fits-all monitoring approach will not
work; the responsibility for monitoring, which in Canada is done by the
Canadian government, should not fall to industry or NERC; and the
proposal is too costly. Likewise, ITC contends that it would not be
prudent or cost effective for entities to have to install monitoring
equipment. Hydro One does not support a Reliability Standard that
prescribes the number and location of monitoring devices that must be
installed. The Trade Associations and ITC, instead, support directing
NERC to develop a plan to address this issue. The Trade Associations
state that such a plan should involve a partnership between government
and industry. Tri-State maintains that NERC, working with USGS and
NOAA, should be responsible for determining the need for and
installation of any needed magnetometers. If the Commission requires
applicable entities to install monitoring devices, the Trade
Associations, Tri-State and Exelon agree that there should be cost
recovery.
    86. BPA supports the NOPR proposal for increased monitoring because
BPA believes it will improve situational awareness. As a model, BPA
states that the ``Canadian government in collaboration with Canadian
transmission owners'' have developed a ``technique that shows real
promise of increasing visibility of GIC flows and localized impacts for
a regional transmission grid.'' \116\ AEP encourages the Commission to
expand the ``number and scope of the permanent geomagnetic
observatories and install permanent geoelectric observatories in the
United States.'' \117\
---------------------------------------------------------------------------

    \116\ BPA Comments at 4.
    \117\ AEP March 29, 2016 Supplemental Comments at 1.
---------------------------------------------------------------------------

    87. Resilient Societies supports requiring the installation of GIC
monitoring devices and magnetometers, noting that GIC monitors are
commercially available and cost as little as $10,000 to $15,000 each.
Emprimus supports developing criteria that inform the need for and
location of monitoring devices.
Commission Determination
    88. We conclude that additional collection and disclosure of GIC
monitoring and magnetometer data is necessary to improve our collective
understanding of the threats posed by GMD events. The Commission
therefore adopts the NOPR proposal in relevant part and directs NERC to
develop revisions to Reliability Standard TPL-007-1 to require
responsible entities to collect GIC monitoring and magnetometer data as
necessary to enable model validation and situational awareness,
including from any devices that must be added to meet this need. The
NERC standard drafting team should address the criteria for collecting
GIC monitoring and magnetometer data discussed below and provide
registered entities with sufficient guidance in terms of defining the
data that must be collected, and NERC should propose in the GMD
research work plan how it will determine and report on the degree to
which industry is following that guidance.
    89. In addition, the Commission directs NERC, pursuant to Section
1600 of the NERC Rules of Procedure, to collect GIC monitoring and
magnetometer data from registered entities for the period beginning May
2013, including both data existing as of the date of this order and new
data going forward, and to make that information available.\118\ We
also provide guidance that, as a general matter, the Commission does
not believe that GIC monitoring and magnetometer data should be treated
as Confidential Information pursuant to the NERC Rules of Procedure.
---------------------------------------------------------------------------

    \118\ The Commission's directives to collect and make available
GIC monitoring and magnetometer data do not apply to non-U.S.
responsible entities or Alaska and Hawaii.
---------------------------------------------------------------------------

Collection of GIC and Magnetometer Data
    90. In developing a requirement regarding the collection of
magnetometer data, NERC should consider the following criteria
discussed at the March 1, 2016 Technical Conference: (1) The data is
sampled at a cadence of at least 10-seconds or faster; (2) the data
comes from magnetometers that are physically close to GIC monitors; (3)
the data comes from magnetometers that are not near sources of magnetic
interference (e.g., roads and local distribution networks); and (4)
data is collected from magnetometers spread across wide latitudes and
longitudes and from diverse physiographic regions.\119\
---------------------------------------------------------------------------

    \119\ Slide Presentation of Luis Marti (Third Panel), March 1,
2016 Technical Conference at 3, 9.
---------------------------------------------------------------------------

    91. Each responsible entity that is a transmission owner should be
required to collect necessary GIC monitoring data. However, a
transmission owner should be able to apply for an exemption from the
GIC monitoring data collection requirement if it demonstrates that no
or little value would be added to planning and operations. In
developing a requirement regarding the collection of GIC monitoring
data, NERC should consider the following criteria discussed at the
March 1, 2016 Technical Conference: (1) The GIC data is from areas
found to have high GIC based on system studies; (2) the GIC data comes
from sensitive installations and key parts of the transmission grid;
and (3) the data comes from GIC monitors that are not situated near
transportation systems using direct current (e.g., subways or light
rail).\120\ GIC monitoring and magnetometer locations should also be
revisited after GIC system models are run with improved ground
conductivity models. NERC may also propose to incorporate the GIC
monitoring and magnetometer data collection requirements in a different
Reliability Standard (e.g., real-time reliability monitoring and
analysis capabilities as part of the TOP Reliability Standards).
---------------------------------------------------------------------------

    \120\ Id. at 8.
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    92. Our determination differs from the NOPR proposal in that the
NOPR proposed to require the installation of GIC monitors and
magnetometers. The comments raised legitimate concerns about
incorporating such a requirement in Reliability Standard TPL-007-1
because of the complexities of siting and operating monitoring devices
to achieve the maximum benefits for model validation and situational
awareness. In particular, responsible entities may not have the
technical capacity to properly install and operate magnetometers, given
complicating issues such as man-made interference, calibration, and
data interpretation. Accordingly, the Commission determines that
requiring responsible entities to collect necessary GIC monitoring and
magnetometer data, rather than install GIC monitors and magnetometers,
affords greater flexibility while obtaining significant benefits. For
example, responsible entities could collaborate with universities and
government entities that operate magnetometers to collect necessary
magnetometer data, or

responsible entities could choose to install GIC monitors or
magnetometers to comply with the data collection requirement. While the
Commission's primary concern is the quality of the data collected, we
do not establish a requirement for either approach or promote a
particular device for collecting the required data. We also find that
cost recovery for prudent costs associated with or incurred to comply
with Reliability Standard TPL-007-1 and future revisions to the
Reliability Standard, including for the purchase and installation of
monitoring devices, will be available to registered entities.\121\
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    \121\ NOPR, 151 FERC ] 61,134 at P 49 n.60.
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Data Availability
    93. We also direct NERC, pursuant to Sections 1500 and 1600 of the
NERC Rules of Procedure, to collect and make GIC monitoring and
magnetometer data available.\122\ We determine that the dissemination
of GIC monitoring and magnetometer data will facilitate a greater
understanding of GMD events that, over time, will improve Reliability
Standard TPL-007-1. The record in this proceeding supports the
conclusion that access to GIC monitoring and magnetometer data will
help facilitate GMD research, for example, by helping to validate GMD
models.\123\ To facilitate the prompt dissemination of GIC monitoring
and magnetometer data, we address whether GIC monitoring or
magnetometer data should qualify as Confidential Information under the
NERC Rules of Procedure.\124\
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    \122\ If GIC monitoring and magnetometer data is already
publicly available (e.g., from a government entity or university),
NERC need not duplicate those efforts.
    \123\ See, e.g., March 1, 2016 Technical Conference Tr. 58:22-
59:13 (Love); 128:5-129:2 (Overbye); ATC Comments at 6-7 (``as more
measuring devices (including magnetometers and GIC monitors)
continue to propagate, the body of field data on magnetic fields and
the resultant GICs will continue to increase the understanding of
this phenomena and result in better models that more closely match
real world conditions . . . [a]bsent this field data, it is
difficult to build accurate models that can be used to plan and
operate the transmission system'').
    \124\ Providers of GIC and magnetometer data may request that
NERC treat their GIC monitoring and magnetometer data as
``Confidential Information,'' as that term is defined in Section
1500 of the NERC Rules of Procedure. Under the NERC Rules of
Procedure, disclosure of Confidential Information by NERC to a
requester requires a formal request, notice and opportunity for
comment, and an executed non-disclosure agreement for requesters not
seeking public disclosure of the information. NERC Rules of
Procedure, Section 1503 (Requests for Information) (effective Nov.
4, 2015).
---------------------------------------------------------------------------

    94. Based on the record in this proceeding, we believe that GIC and
magnetometer data typically should not be designated as Confidential
Information under the NERC Rules of Procedure. We are not persuaded
that the dissemination of GIC monitoring or magnetometer data poses a
security risk or that the data otherwise qualify as Confidential
Information. CEA and Hydro One have objected, without elaboration, to
making data available without the use of non-disclosure
agreements.\125\ At the March 1, 2016 Technical Conference, panelists
were questioned on the topic yet could not identify a security-based or
other credible reason for not making such information available to
requesters. In comments submitted after the March 1, 2016 Technical
Conference, the Trade Associations explained that ``GIC measurements,
while not as sensitive as transmission planning studies, should also be
protected . . . [because a] potentially malicious actor could
conceivably combine GIC information with information from other sources
to deduce the configuration and operating conditions of the grid or
some portion of it.'' \126\ The Trade Associations' comments, however,
do not substantiate the assertion that the release of GIC monitoring
(or magnetometer data) alone poses any risk to the Bulk-Power System.
The Trade Associations' comment is also vague by not identifying what
``information from other sources'' could be combined with GIC
monitoring ``to deduce the configuration and operating conditions of
the grid or some portion of it.''
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    \125\ CEA Comments at 15; Hydro One Comments at 2.
    \126\ Trade Associations March 7, 2016 Supplemental Comments at
5.
---------------------------------------------------------------------------

    95. In conclusion, given both the lack of substantiated concerns
regarding the disclosure of GIC and magnetometer data, and the
compelling demonstration that access to these data will support ongoing
research and analysis of GMD threats, the Commission expects NERC to
make GIC and magnetometer data available. Notwithstanding our findings
here, to the extent any entity seeks confidential treatment of the data
it provides to NERC, the burden rests on that entity to justify the
confidential treatment.\127\ Exceptions are possible if the providing
entity obtains from NERC, at the time it submits data to NERC, a
determination that GIC or magnetometer data qualify as Confidential
Information.\128\ Entities denied access to GIC and magnetometer data
by NERC or providers denied Confidential Information treatment of GIC
and magnetometer data may appeal NERC's decision to the Commission.
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    \127\ See NERC Rules of Procedure, Section 1502.1. To address
any substantiated concerns regarding the need for confidentiality of
an entity's GIC or magnetometer data, NERC could develop a policy
for disseminating such data only after an appropriate time interval
(e.g., six months).
    \128\ We understand that NERC typically does not determine
whether information submitted to it under a claim of confidentiality
is Confidential Information when receiving such information. See
North American Electric Reliability Corp., 119 FERC ] 61,060, at PP
195-196 (2007). We expect that, when a submitter seeks a
determination by NERC of a claim that GIC or magnetometer data
qualify as Confidential Information, NERC will decide promptly.
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E. Corrective Action Plan Deadlines

NERC Petition
    96. Reliability Standard TPL-007-1, Requirement R7 provides that:

    Each responsible entity, as determined in Requirement R1, that
concludes, through the GMD Vulnerability Assessment conducted in
Requirement R4, that their System does not meet the performance
requirements of Table 1 shall develop a Corrective Action Plan
addressing how the performance requirements will be met . . . .

NERC explains that the NERC Glossary defines corrective action plan to
mean, ``A list of actions and an associated timetable for
implementation to remedy a specific problem.'' \129\ Requirement R7.3
states that the corrective action plan shall be provided within ``90
calendar days of completion to the responsible entity's Reliability
Coordinator, adjacent Planning Coordinator(s), adjacent Transmission
Planner(s), functional entities referenced in the Corrective Action
Plan, and any functional entity that submits a written request and has
a reliability-related need.''
---------------------------------------------------------------------------

    \129\ NERC Petition at 31.
---------------------------------------------------------------------------

NOPR
    97. The NOPR proposed to direct NERC to modify Reliability Standard
TPL-007-1 to require corrective action plans to be developed within one
year of the completion of the GMD Vulnerability Assessment. The NOPR
also proposed to direct NERC to modify Reliability Standard TPL-007-1
to require a deadline for non-equipment mitigation measures that is two
years following development of the corrective action plan and a
deadline for mitigation measures involving equipment installation that
is four years following development of the corrective action plan.
Recognizing that there is little experience with installing equipment
for GMD mitigation, the NOPR stated that the Commission is open to
proposals that may differ from its proposal, particularly from any
entities with experience in this area. The NOPR also sought comment on
appropriate alternative deadlines and whether there should be a
mechanism that would allow NERC to consider, on

a case-by-case basis, requests for extensions of required deadlines.
Comments
    98. NERC states that it does not oppose a one-year deadline for
completing the development of corrective action plans.\130\ However,
NERC contends that imposing deadlines on the completion of mitigation
actions would be problematic because of the uncertainties regarding the
amount of time needed to install necessary equipment. NERC maintains
that deadlines that are too short may cause entities to take mitigation
steps that, while quicker, would not be as effective as mitigations
that take more time to complete. NERC supports allowing extensions if
the Commission adopts the NOPR proposal.
---------------------------------------------------------------------------

    \130\ NERC contends that a deadline is unnecessary because
``NERC expects that applicable entities would determine necessary
corrective actions as part of their GMD Vulnerability Assessments
for the initial assessment [due 60 months after a final rule in this
proceeding goes into effect] as well as subsequent assessments [due
every 60 months thereafter].'' NERC Comments at 28.
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    99. AEP states that, even if possible, a one-year deadline for
developing corrective action plans is too aggressive and would
encourage narrow thinking (i.e., registered entities would address GMD
mitigation rather than pursue system improvements generally that would
also address GMD mitigation). AEP, instead, proposes a two-year
deadline. AEP does not support a Commission-imposed deadline for
completing mitigation actions, although it supports requiring a time-
table in the corrective action plan. AEP notes that the Commission did
not impose a specific deadline for completion of corrective actions in
Reliability Standard TPL-001-4 (Transmission System Planning
Performance). CEA does not support a deadline for the development of
corrective action plans because it is already part of the GMD
Vulnerability Assessment process. Like AEP, CEA does not support
specific deadlines for the completion of mitigation actions and instead
supports including time-tables in the corrective action plan. CEA also
contends that an extension process would be impracticable.
    100. Trade Associations, BPA and Tri-State support the imposition
of corrective action plan deadlines as long as entities can request
extensions. Gaunt supports the corrective action plan deadlines
proposed in the NOPR. Emprimus supports the imposition of deadlines but
contends that non-equipment mitigation actions should be completed in 6
months and that there should be a rolling four-year period for
equipment mitigation (i.e., after each year, 25 percent of the total
mitigation actions should be completed).
Commission Determination
    101. The Commission directs NERC to modify Reliability Standard
TPL-007-1 to include a deadline of one year from the completion of the
GMD Vulnerability Assessments to complete the development of corrective
action plans. NERC's statement that it ``expects'' corrective action
plans to be completed at the same time as GMD Vulnerability Assessments
concedes the point made in the NOPR that Reliability Standard TPL-007-1
currently lacks a clear deadline for the development of corrective
action plans.
    102. The Commission also directs NERC to modify Reliability
Standard TPL-007-1 to include a two-year deadline after the development
of the corrective action plan to complete the implementation of non-
hardware mitigation and four-year deadline to complete hardware
mitigation. The comments provide contrasting views on the practicality
of imposing mitigation deadlines, with NERC and some industry
commenters arguing that such deadlines are not warranted while the
Trade Associations and other industry commenters support their
imposition. Most of these comments, however, support an extension
process if the Commission determines that deadlines are necessary. The
Commission agrees that NERC should consider extensions of time on a
case-by-case basis. The Commission directs NERC to submit these
revisions within 18 months of the effective date of this Final Rule.
    103. Following adoption of the mitigation deadlines required in
this final rule, Reliability Standard TPL-007-1 will establish a
recurring five-year schedule for the identification and mitigation of
potential GMD risks on the grid, as follows: (1) The development of
corrective action plans must be completed within one year of a GMD
Vulnerability Assessment; (2) non-hardware mitigation must be completed
within two years following development of corrective action plans; and
(3) hardware mitigation must be completed within four years following
development of corrective action plans.
    104. As discussed elsewhere in this final rule, the Commission
recognizes and expects that our collective understanding of the science
regarding GMD threats will improve over time as additional research and
analysis is conducted. We believe that the recurring five-year cycle
will provide, on a going-forward basis, the opportunity to update
Reliability Standard TPL-007-1 to reflect new or improved scientific
understanding of GMD events.

F. Minimization of Load Loss and Curtailment

NERC Petition
    105. Reliability Standard TPL-007-1, Requirement R4 states that
each responsible entity ``shall complete a GMD Vulnerability Assessment
of the Near-Term Transmission Planning Horizon once every 60 calendar
months.'' Requirement R4.2 further states that the ``study or studies
shall be conducted based on the benchmark GMD event described in
Attachment 1 to determine whether the System meets the performance
requirements in Table 1.''
    106. NERC maintains that Table 1 sets forth requirements for system
steady state performance. NERC explains that Requirement R4 and Table 1
``address assessments of the effects of GICs on other Bulk[hyphen]Power
System equipment, system operations, and system stability, including
the loss of devices due to GIC impacts.'' \131\ Table 1 provides, in
relevant part, that load loss and/or curtailment are permissible
elements of the steady state:
---------------------------------------------------------------------------

    \131\ NERC Petition at 39.

    Load loss as a result of manual or automatic Load shedding (e.g.
UVLS) and/or curtailment of Firm Transmission Service may be used to
meet BES performance requirements during studied GMD conditions. The
likelihood and magnitude of Load loss or curtailment of Firm
Transmission Service should be minimized.
NOPR
    107. The NOPR sought comment on the provision in Table 1 that
``Load loss or curtailment of Firm Transmission Service should be
minimized.'' The NOPR stated that because the term ``minimized'' does
not represent an objective value, the provision is potentially subject
to interpretation and assertions that the term is vague and may not be
enforceable. The NOPR also explained that the modifier ``should'' might
indicate that minimization of load loss or curtailment is only an
expectation or a guideline rather than a requirement. The NOPR sought
comment on how the provision in Table 1 regarding load loss and
curtailment will be enforced, including: (1) Whether, by using the term
``should,'' Table 1 requires minimization of load loss or curtailment;
or both and (2) what constitutes ``minimization'' and how it will be
assessed.

Comments
    108. NERC states the language in Table 1 is modeled on Reliability
Standard TPL-001-4, which provides in part that ``an objective of the
planning process should be to minimize the likelihood and magnitude of
interruption of Firm transmission Service following Contingency
events.'' NERC explains that Reliability Standard TPL-007-1 ``does not
include additional load loss performance criteria used in normal
contingency planning because such criteria may not be applicable to GMD
Vulnerability Assessment of the impact from a 1-in-100 year GMD
event.'' \132\ However, NERC points out that the enforcement of
Requirement R4 ``would include an evaluation of whether the system
meets the Steady State performance requirements of Table 1 which are
aimed at protecting against instability, controlled separation, and
Cascading.'' \133\ NERC further states that ``minimized'' in the
context of Reliability Standard TPL-007-1 means that ``planned Load
loss or curtailments are not to exceed amounts necessary to prevent
voltage collapse.'' \134\
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    \132\ NERC Comments at 29.
    \133\ Id.
    \134\ Id.
---------------------------------------------------------------------------

    109. The Trade Associations agree with the NOPR that the lack of
objective criteria could create compliance and enforcement challenges
and could limit an operator's actions in real-time. The Trade
Associations state that the Commission ``should consider whether such
language in mandatory requirements invites the unintended consequences
of raising reliability risks, especially during real-time emergency
conditions . . . [but] [i]n the interim, the Trade Associations
envision that NERC will consider further discussions with stakeholders
on the issue prior to TPL-007 implementation.'' \135\
---------------------------------------------------------------------------

    \135\ Trade Associations Comments at 28.
---------------------------------------------------------------------------

Commission Determination
    110. The Commission accepts the explanation in NERC's comments of
what is meant by the term ``minimized'' in Table 1.

G. Violation Risk Factors and Violation Severity Levels

    111. Each requirement of Reliability Standard TPL-007-1 includes
one violation risk factor and has an associated set of at least one
violation severity level. NERC states that the ranges of penalties for
violations will be based on the sanctions table and supporting penalty
determination process described in the Commission approved NERC
Sanction Guidelines. The NOPR proposed to approve the violation risk
factors and violation severity levels submitted by NERC, for the
requirements in Reliability Standard TPL-007-1, consistent with the
Commission's established guidelines.\136\ The Commission did not
receive any comments regarding this aspect of the NOPR. Accordingly,
the Commission approves the violation risk factors and violation
severity levels for the requirements in Reliability Standard TPL-007-1.
---------------------------------------------------------------------------

    \136\ North American Electric Reliability Corp., 135 FERC ]
61,166 (2011).
---------------------------------------------------------------------------

H. Implementation Plan and Effective Dates

NERC Petition
    112. NERC proposes a phased, five-year implementation period.\137\