[Federal Register Volume 77, Number 141 (Monday, July 23, 2012)]
[Notices]
[Page 43070]
[FR Doc No: 2012-17822]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 2

    Take notice that the Commission received the following electric
corporate filings:

    Docket Numbers: EC12-118-000.
    Applicants: Hardee Power Partners Limited.
    Description: Application for Authorization under Section 203 of the
Federal Power Act and Request for Waivers and Expedited Action of
Hardee Power Partners Limited.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5044.
    Comments Due: 5 p.m. ET 8/6/12.

    Docket Numbers: EC12-119-000.
    Applicants: FirstEnergy Generation Corp., American Transmission
Systems, Incorporation.
    Description: Application for Authorization Under Section 203 of the
Federal Power Act, Request for Expedited Action and Request for Waivers
of FirstEnergy Generation Corp. and American Transmission Systems,
Incorporated.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5102.
    Comments Due: 5 p.m. ET 8/6/12.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-2763-003; ER10-2732-003; ER10-2733-003; ER10-
2734-003; ER10-2736-003; ER10-2737-003; ER10-2741-003; ER10-2749-003;
ER10-2752-003.
    Applicants: Bangor Hydro Electric Company.
    Description: Notice of Changes in Status of Bangor Hydro Electric
Company, et al.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5085.
    Comments Due: 5 p.m. ET 8/6/12.

    Docket Numbers: ER10-2881-004; ER10-2882-004; ER10-2883-004; ER10-
2884-004; ER10-2885-004; ER10-2641-004; ER10-2663-004; ER10-2886-004.
    Applicants: Alabama Power Company, Georgia Power Company,
Mississippi Power Company, Southern Power Company, Gulf Power Company,
Oleander Power Project, L.P., Southern Company--Florida LLC, Southern
Turner Cimarron I, LLC.
    Description: Notice of Non-Material Change in Status of Alabama
Power Company, et al.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5092.
    Comments Due: 5 p.m. ET 8/6/12.

    Docket Numbers: ER12-1630-000.
    Applicants: California Independent System Operator Corporation.
    Description: Order 755 Compliance Filing of the California
Independent System Operator Corporation--response to Commission June 8
2012 letter.
    Filed Date: 7/6/12.
    Accession Number: 20120706-5126.
    Comments Due: 5 p.m. ET 7/30/12.

    Docket Numbers: ER12-1877-001.
    Applicants: ISO New England Inc., Massachusetts Electric Company.
    Description: OATT Attachment F Technical Corrections to be
effective 6/1/2012.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5038.
    Comments Due: 5 p.m. ET 7/23/12.

    Docket Numbers: ER12-1999-001.
    Applicants: MidAmerican Energy Company.
    Description: Succession Agreement--Revised Certificate of
Concurrence to be effective 2/21/2012.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5031.
    Comments Due: 5 p.m. ET 8/6/12.

    Docket Numbers: ER12-2244-000.
    Applicants: Intelligen Resources, L.P.
    Description: Petition for Market-Based Rate Authority to be
effective 7/17/2012.
    Filed Date: 7/16/12.
    Accession Number: 20120716-5048.
    Comments Due: 5 p.m. ET 8/6/12.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and Sec.  385.214) on or
before 5:00 p.m. Eastern time on the specified comment date. Protests
may be considered, but intervention is necessary to become a party to
the proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: July 16, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-17822 Filed 7-20-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: September 12, 2007 (Volume 72, Number 176)]
[Notices]
[Page 52185-52186]
[DOCID:fr12se07-128]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56355; File No. SR-ISE-2007-75]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Non-ISE Market Maker Fees

September 5, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 23, 2007, the International Securities Exchange, LLC
(``ISE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by the ISE. The ISE has designated this proposal as one
establishing or changing a due, fee, or other charge applicable only to
a member under Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders the proposal effective upon filing
with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE proposes to amend its Schedule of Fees regarding its non-
ISE market maker fees. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
at http://www.iseoptions.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the ISE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The ISE has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to lower the Exchange's
non-ISE market maker (``FARMM'') fees for certain orders. The Exchange
currently charges $0.37 per contract, plus a $0.03 per contract
comparison fee, for FARMM orders.\5\ FARMM orders are orders that are
sent to the Exchange by an Electronic Access Member on behalf of a non-
ISE market maker. In order to encourage FARMMs to provide liquidity in
the Exchange's Facilitation and Solicitation Mechanisms, we propose to
charge a discounted transaction fee of $0.16 per contract for FARMM
orders entered in the Facilitation and Solicitation Mechanisms, plus a
$0.03 per contract comparison fee, for such orders. All other FARMM
orders will continue to be charged the standard fee of $0.37 per
contract, plus a comparison fee of $0.03 per contract.
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    \5\ See Securities Exchange Act Release No. 55897 (June 12,
2007), 72 FR 33546 (June 18, 2007).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) \6\ of the Act that an exchange have
an equitable allocation of reasonable dues, fees and other charges
among its members and other persons using its facilities.
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    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(2) \8\ thereunder because
it establishes or changes a due, fee, or other charge applicable only
to a member. At any time within 60 days of the filing of such proposed
rule change, the Commission may summarily abrogate such rule change if
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File No. SR-ISE-2007-75 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2007-75. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements

with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room, 100 F Street, NE., Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of the ISE. All comments received will
be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ISE-2007-75 and should be submitted on
or before October 3, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-17936 Filed 9-11-07; 8:45 am]

BILLING CODE 8010-01-P


Department of Transportation Comments on draft PM 2.5 NAAQS RIA:

Generally, DOT is concerned that the costs of mobile source emissions
may be under stated.  The RIA seems to make a number of assumptions
about the cost of national rules that have yet to be developed, and
about local measures that air agencies may not have control over, such
as modal split of travel.

Table 1-8: The previous RIA version had total annualized costs for the
15/35 standard for Mobile Sources at $1.5 billion. The new RIA version
has this total as $60.39 million. While we have received an explanation
from EPA as to the changes made in this table, we feel that a further
explanation of how costs are calculated should be included in the RIA,
especially explaining in more detail why mobile sources National Rules
are zero and how incremental costs of residual nonattainment were
calculated.

Pages 3-9 and 6-25.  "No fugitive dust controls or other PM10 controls
to be applied except in a case where there is a critical need or where
such sources are major contributors to PM2.5 concentrations.  We applied
such controls only in California where the extent of nonattainment was
so high that we applied every known control available."  There appears
to be no discussion on the costs of fugitive dust controls.  Were
fugitive dust controls on paved and unpaved roads, as well as on
transportation construction projects, used in the attainment strategy
for California?  If so, how were the costs/ton calculated?  Also if so,
what was the basis for any such calculations?

3-25 and 6-18: Under the discussions of pre-proposal mobile source
emission standard and fuel rules that are expected to affect the
regulatory impact of this rule, we are concerned that EPA is assuming
that the cost of these future rules are not attributed to the cost of
the PM NAAQS but rather to the cost of the individual future rules.  DOT
would like to see a discussion of how compliance with these rules might
alter the regulatory impact of these PM standards, recognizing the
preliminary nature of the pre-proposal regulations.

Pages 3-28, 3-29.  The diesel retrofit measure includes targeting 50%,
then 100%, of all heavy-duty engines, except 5% of the nonroad fleet.
What is the basis for using such high percentages?  What sort of control
measure(s) could actually achieve this as the majority of these engines
are privately owned?

Pages 3-29, 6-22.  The RIA relies on "intermodal transfer," which is
basically an assumption that a percentage of freight movement in the
future could be shifted from trucks to rail.  What is the basis for
assuming that this is an achievable target?  What sort of control
measures(s) could actually achieve this as goods movement is
predominately controlled privately?  Will the capacity of the future
rail system be able to accommodate this? Even if the 1% shift is
achievable, how does EPA make the jump that this would equate in 1%
decrease in truck emissions and a .4%/.3% increase in rail emissions?
What methodology is used?

Page 4-35.  "The source apportionment studies highlight the importance
of mobile sources and suggest that we may not have fully captured the
air quality benefits associated with controlling these sources."   The
does not seem to be a conclusive statement.  Is EPA actually making a
conclusion here?  If not, this should not be part of the conclusions
section.

Page 6-4.  "Cost information for mobile source controls was taken from
studies conducted by EPA for previous rulemakings and studies conducted
for development of voluntary and local measures that could be used by
state and local programs to assist in improving air quality."  The RIA
should specifically cite and reference each study used.

Page 6-20.  The C-E study is linked to on this page.  However, the RIA
should more specifically cite and reference the study (ies) being used
here.

Page 6-20.  The C-E study is discussed here as showing 2.3 times higher
emissions factors than are currently in MOBILE6.2, and EPA plans to
integrate this information into MOVES.  However, "...states and local
governments will continue to use MOBILE6.2 to estimate highway vehicle
emissions for SIP and conformity purposes."  This appears to be setting
up a huge mismatch between PM2.5 SIPs and future conformity analyses
after the release of MOVES.  Changes of this magnitude in MOVES need to
be discussed thoroughly with DOT, while under development, and well in
advance of the release of MOVES.

Page 6-20.  "...we believe that technology and installation costs are
likely to decrease by 2015 and 2020."  What is EPA's basis for this
statement?  This seems counterintuitive.  Is this based on existing data
that shows a downward trend in the costs of this type of technology?

Page 6-21.  The RIA identifies anti-idling measures as a "no cost"
strategy.  This seems overly simplistic.  Although fuel savings could
offset capital costs, it does not reflect how control measures could be
adopted to actually achieve these reductions.  This may be truer for
APUs, but what reasonable control measures could force the installation
of APUs?  Capital costs, especially in the case of TSEs, would most
likely be placed upon public entities that would not recoup the fuel
savings.

Page 6-22.  The RIA identifies "intermodal transport" measures as a "no
cost" strategy.  This seems overly simplistic.  Although fuel savings
could offset capital costs, it does not reflect how control measures
could be adopted to actually achieve these reductions.  Capital costs
would most likely be placed upon public entities or rail owners that
would not necessarily recoup the fuel savings.

DOT has no comments on the revised Executive Summary, offers an
additional comment on the "Document Compare":

Page 7.  "The application of area source control technologies in these
analyses assume that a constant estimate for emission reduction is
reasonable despite variation in the extent or scale of application (e.g.
amount of hot asphalt applied to an unpaved road).  To the extent that
there are economies of scale in area source control applications, we may
overstate the emission reductions estimated by these analyses."  Paving
of unpaved roads is not an area source control, but actually should be
considered a mobile source control as road dust should be included in
the on-road inventory.


[Federal Register Volume 78, Number 145 (Monday, July 29, 2013)]
[Proposed Rules]
[Pages 45479-45490]
[FR Doc No: 2013-18000]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM13-11-000]

Frequency Response and Frequency Bias Setting Reliability
Standard

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission proposes to approve Reliability Standard BAL-
003-1 (Frequency Response and Frequency Bias Setting), submitted by the
North American Electric Reliability Corporation, the Commission-
certified Electric Reliability Organization. The proposed Reliability
Standard defines the necessary amount of frequency response needed for
reliable operations for each Balancing Authority within an
Interconnection.

DATES: Comments are due September 27, 2013.

ADDRESSES: Comments, identified by docket number, may be filed in the
following ways:
     Electronic Filing through http://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
     Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the

Commission, 888 First Street NE., Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:

Daniel Woldemariam (Technical Information), Office of Electric
Reliability, Division of Reliability Standards, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
Telephone:<PHONE_NUMBER>
Ron LeComte (Legal Information), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426, Telephone:<PHONE_NUMBER>

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

Table of Contents

                                                               Paragraph
                                                                  No.

I. Background...............................................           6
    A. Section 215 of the FPA...............................           6
    B. Procedural History...................................           7
    C. Frequency Response and Frequency Bias Setting........          10
II. NERC Petition...........................................          13
    A. Proposed Reliability Standard BAL-003-1..............          15
    B. Implementation Plan..................................          20
III. Discussion.............................................          22
    A. Use of the ``Median'' in Determining the Frequency             24
     Response Measure.......................................
    B. Determination of Interconnection Frequency Response            28
     Obligation.............................................
        1. Eastern Interconnection--Prevailing UFLS First
         Step 29............................................
        2. Western Interconnection--Largest N-2 Event 31....
    C. Methods for Obtaining Frequency Response.............          33
    D. Premature Withdrawal of Primary Frequency Response...          35
    E. Light-Load Case Study................................          39
    F. Assignment of Violation Risk Factors and Violation             42
     Severity Levels........................................
    G. Supporting/Associated Documents......................          45
IV. Information Collection Statement........................          47
V. Environmental Analysis...................................          55
VI. Regulatory Flexibility Act..............................          56
VII. Comment Procedures.....................................          58
VIII. Document Availability.................................          62

144 FERC ] 61,057

    1. Pursuant to section 215(d) of the Federal Power Act (FPA),\1\
the Commission proposes to approve Reliability Standard BAL-003-1
(Frequency Response and Frequency Bias Setting), submitted by the North
American Electric Reliability Corporation (NERC), the Commission-
certified Electric Reliability Organization (ERO). The proposed
Reliability Standard includes requirements pertaining to the
measurement and provision of frequency response.\2\ NERC's proposal
addresses a gap in reliability as well as directives on the matter from
Order No. 693.\3\ While the Commission proposes to approve proposed
Reliability Standard BAL-003-1, the Commission also has concerns about
certain provisions of the proposed Reliability Standard and, therefore,
proposes that NERC submit a report and develop modifications to address
the identified concerns. The Commission also proposes to approve four
proposed new or revised definitions to the NERC Glossary, NERC's
implementation plan, most proposed violation risk factors and violation
severity levels, and NERC's proposed retirement of currently effective
Reliability Standard BAL-003-0.1b.\4\
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    \1\ 16 U.S.C. 824o (2006).
    \2\ NERC defines ``frequency response'' in the NERC Glossary of
Terms Used in Reliability Standards (Glossary) as follows:
    Equipment: The ability of a system or elements of the system to
react or respond to a change in system frequency. System: The sum of
the change in demand, plus the change in generation, divided by the
change in frequency, expressed in megawatts per 0.1 Hertz (MW/0.1
Hz).
    \3\ See Mandatory Reliability Standards for the Bulk-Power
System, Order No. 693, FERC Stats. & Regs. ] 31,242, at P 375, order
on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
    \4\ The Commission proposes to approve BAL-003-1 as it applies
to the ERCOT Interconnection and the United States portions of the
Eastern and Western Interconnections. The Commission proposes to
take no action as BAL-003-1 applies to the Quebec Interconnection.
---------------------------------------------------------------------------

    2. Frequency response is a measure of an Interconnection's ability
to stabilize frequency immediately following the sudden loss of
generation or load, and is a critical component of the reliable
operation of the Bulk-Power System, particularly during disturbances
and recoveries. Frequency response is predominately provided by the
automatic and autonomous actions of turbine-governors with some
response being provided by changes in demand due to changes in
frequency. Failure to maintain frequency can disrupt the operation of
equipment and initiate disconnection of power plant equipment to
prevent it from being damaged, which could lead to wide-spread
blackouts.
    3. The proposed Reliability Standard establishes a minimum
Frequency Response Obligation \5\ for each Balancing Authority,
provides a uniform calculation of frequency response, establishes
Frequency Bias Settings that establish values closer to actual
Balancing Authority frequency response, and encourages coordinated
automatic generation control (AGC) operation.\6\ These matters are not
addressed in any currently-effective Reliability Standard. Because the
proposed Reliability Standard addresses a gap in reliability, as well
as certain directives from Order No. 693, we

propose to approve the proposed Reliability Standard BAL-003-1.
---------------------------------------------------------------------------

    \5\ NERC proposes to define Frequency Response Obligation as
``[t]he Balancing Authority's share of the required Frequency
Response needed for the reliable operation of an Interconnection.
This will be calculated as MW/0.1Hz.''
    \6\ NERC proposes to revise the definition of Frequency Bias
Setting as ``[a] number, either fixed or variable, usually expressed
in MW/0.1 Hz, included in a Balancing Authority's Area Control Error
equation to account for the Balancing Authority's inverse Frequency
Response contribution to the Interconnection, and discourage
response withdrawal through secondary control systems.''
---------------------------------------------------------------------------

    4. While we propose to approve BAL-003-1, we also have concerns
regarding certain provisions of the proposed standard, some of which
NERC itself identifies in the reports included in its petition. We
discuss below our specific concerns regarding: (1) Requirement R1, the
calculation of Frequency Response Measure by using the median
statistical method, i.e., selecting the middle value in a set of data
that is arranged in an ascending or descending order; \7\ (2) the
potential for early withdrawal of primary frequency response before
secondary frequency response, i.e., automatic generation control, is
activated; (3) the need to study frequency response during low-load
conditions; (4) appropriate identification of resource contingency
criteria in the Western Interconnection; and (5) the need to adequately
ensure that each Balancing Authority has available the resources it
needs to meet its frequency response obligation. With regard to these
concerns, the Commission seeks comments, and in some cases proposes
that NERC develop modifications, conduct additional studies and/or
submit a report to the Commission, as discussed below.
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    \7\ NERC proposes to define Frequency Response Measure as
``[t]he median of all the frequency response observations reported
annually by Balancing Authorities or Frequency Response Sharing
Groups for frequency events specified by the ERO. This will be
calculated as MW/0.1Hz.''
---------------------------------------------------------------------------

    5. Frequency response, while a highly technical matter, is one
fundamental measure of the reliability and robustness of the Bulk-Power
System. It is incumbent on the Commission, the ERO, Balancing
Authorities and, ultimately frequency response resources, to ensure
that frequency response is timely and adequately provided, as well as
accurately measured. Thus, we propose to approve proposed Reliability
Standard BAL-003-1, but also propose to direct future development to
address certain provisions that will better enable accurate measurement
of delivered frequency response and ensure availability of adequate
frequency response on the Bulk-Power System.

I. Background

A. Section 215 of the FPA

    6. Section 215 of the FPA requires the Commission-certified ERO to
develop mandatory and enforceable Reliability Standards, subject to
Commission review and approval. Once approved, the Reliability
Standards may be enforced by the ERO subject to the Commission's
oversight, or by the Commission independently.\8\ Pursuant to the
requirements of FPA section 215, the Commission established a process
to select and certify an ERO,\9\ and subsequently certified NERC as the
ERO.\10\
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    \8\ See 16 U.S.C. 824o(e)(3).
    \9\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC
Stats. & Regs. ] 31,212 (2006).
    \10\ North American Electric Reliability Corp., 116 FERC ]
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006)
(certifying NERC as the ERO responsible for the development and
enforcement of mandatory Reliability Standards), aff'd sub nom.
Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
---------------------------------------------------------------------------

B. Procedural History

    7. On March 16, 2007, in Order No. 693, the Commission approved 83
of 107 proposed Reliability Standards pursuant to FPA section 215(d),
including currently-effective BAL-003-0. In addition, pursuant to
section 215(d)(5) of the FPA, the Commission directed NERC, among other
things, to develop modifications to BAL-003-0 to address certain issues
identified by the Commission. Specifically, the Commission directed
NERC to:

Develop a modification to BAL-003-0 through the Reliability
Standards development process that: (1) Includes Levels of Non-
Compliance; (2) determines the appropriate periodicity of frequency
response surveys necessary to ensure that Requirement R2 and other
requirements of the Reliability Standard are being met, and to
modify Measure M1 based on that determination; and (3) defines the
necessary amount of Frequency Response needed for Reliable Operation
for each balancing authority with methods of obtaining and measuring
that the frequency response is achieved.\11\
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    \11\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 375.

    8. On March 18, 2010, the Commission established a six month
compliance deadline for NERC to submit modifications to Reliability
Standard BAL-003-0 responsive to the Commission's directives in Order
No. 693.\12\ NERC requested rehearing and clarification. On rehearing
for further consideration, the Commission directed Commission staff to
convene a technical conference to provide an opportunity for a public
discussion regarding technical issues pertaining to the development of
a frequency response requirement.\13\ The Commission also directed NERC
to submit a proposed schedule that includes firm deadlines for
completing studies and analyses needed to develop a frequency response
requirement, and for submission of a modified BAL-003-0 Reliability
Standard responsive to the Commission directives in Order No. 693.
---------------------------------------------------------------------------

    \12\ Mandatory Reliability Standards for the Bulk-Power System,
130 FERC ] 61,218 (2010).
    \13\ Mandatory Reliability Standards for the Bulk-Power System,
131 FERC ] 61,136, at P 15 (2010).
---------------------------------------------------------------------------

    9. On October 25, 2010, NERC submitted an action plan and estimated
timelines for completing studies and analyses needed to develop a
frequency response requirement. NERC indicated that it would complete
the revised Reliability Standard by May 2012.\14\ On March 30, 2012,
NERC submitted a motion for an extension of time to submit
modifications, and on May 4, 2012, the Commission granted the request
through May 2013.\15\ NERC submitted its petition requesting approval
of proposed Reliability Standard BAL-003-1 on March 29, 2013.
---------------------------------------------------------------------------

    \14\ The Commission accepted NERC's proposed action plan on
December 16, 2010. Mandatory Reliability Standards for the Bulk-
Power System, 133 FERC ] 61,212 (2010).
    \15\ Mandatory Reliability Standards for the Bulk-Power System,
139 FERC ] 61,097 (2012).
---------------------------------------------------------------------------

C. Frequency Response and Frequency Bias Setting

    10. As mentioned above, frequency response is a measure of an
Interconnection's ability to stabilize frequency immediately following
the sudden loss of generation or load. NERC explains that ``[s]ystem
frequency reflects the instantaneous balance between generation and
load. Reliable operation of a power system depends on maintaining
frequency within predetermined boundaries above and below a scheduled
value, which is 60 Hertz (Hz) in North America.'' \16\ As discussed in
this Notice of Proposed Rulemaking (NOPR), frequency response is
provided in two stages, referred to as primary frequency response and
secondary frequency response.
---------------------------------------------------------------------------

    \16\ NERC Petition at 3.
---------------------------------------------------------------------------

    11. Primary frequency control involves the autonomous, automatic,
and rapid action of a generator, or other resource, to change its
output (within seconds) to rapidly dampen large changes in frequency.
The ability of a power system to withstand a sudden loss of generation
or load depends on the presence and adequacy of resources capable of
providing rapid incremental power changes to counterbalance the
disturbance and arrest a frequency deviation.\17\
---------------------------------------------------------------------------

    \17\ Conventional turbine-generators, as well as other
resources, are capable of providing primary frequency response. See
NERC Petition, Exh. D at 3.
---------------------------------------------------------------------------

    12. Secondary frequency response, also known as automatic
generation control (AGC), is produced from either

manual or automated dispatch from a centralized control system.\18\ It
is intended to balance generation, interchange and demand by managing
the response of available resources within minutes as opposed to
primary frequency response, which manages response within seconds.
Frequency bias is an input used in the calculation of a Balancing
Authority's area control error (ACE) to account for the power changes
associated with primary frequency response. However, frequency bias is
not the same as frequency response. Frequency Bias Setting is a
secondary control setting of the AGC system, not a primary control
parameter, and changes in the Frequency Bias Setting of a Balancing
Authority do not change the primary frequency response. The Frequency
Bias Setting is used in AGC to prevent withdrawal of generator primary
control action following a disturbance as long as frequency is off its
nominal value.\19\
---------------------------------------------------------------------------

    \18\ NERC Petition at 11. Additional background information
about the engineering concepts that pertain to frequency response is
discussed in the Frequency Response Background Document, NERC
Petition, Exh. D.
    \19\ NERC Petition at 11.
---------------------------------------------------------------------------

II. NERC Petition

    13. NERC submitted its petition on March 29, 2013, seeking approval
of Reliability Standard BAL-003-1, four new or modified definitions for
inclusion in the NERC Glossary, violation risk factors and violation
severity levels, an implementation plan for the proposed standard, and
retirement of currently-effective BAL-003-0.1b. NERC explains that,
beginning in 2010, NERC conducted a frequency response initiative to
perform an in-depth analysis of Interconnection-wide frequency response
``to achieve a better understanding of the factors influencing
frequency response across North America.'' \20\ According to NERC, one
of the basic objectives of the frequency response initiative included
increasing coordinated communication and outreach on the issue,
including webinars, and NERC alerts.\21\
---------------------------------------------------------------------------

    \20\ Id. at 11-12.
    \21\ Id. at 12.
---------------------------------------------------------------------------

    14. NERC developed several reports that provide the conclusions and
recommendations resulting from the frequency response initiative, which
NERC includes as exhibits to its petition.\22\ Further, NERC states
that a detailed explanation of the development, testing, and
implementation of proposed BAL-003-1 is provided in the Frequency
Response Standard Background Document, included as Exhibit D to the
petition.
---------------------------------------------------------------------------

    \22\ See NERC Petition, Exh. F (Frequency Response Initiative
Report), Exh. G (Status of Recommendations), and Exh. H
(Supplemental Report).
---------------------------------------------------------------------------

A. Proposed Reliability Standard BAL-003-1 \23\
---------------------------------------------------------------------------

    \23\ Proposed Reliability Standard BAL-003-1 is not attached to
the notice of proposed rulemaking. The complete text of BAL-003-1 is
available on the Commission's eLibrary document retrieval system in
Docket No. RM13-11-000 and is posted on the ERO's Web site,
available at http://www.nerc.com.
---------------------------------------------------------------------------

    15. NERC states that the purpose of the proposed Reliability
Standard is to ensure that ``a Balancing Authority's Frequency Bias
Setting is accurately calculated to match its actual Frequency
Response'' and also ``to provide consistent methods for measuring
Frequency Response and determining the Frequency Bias Setting.'' \24\
The proposed Reliability Standard consists of four requirements, and is
applicable to Balancing Authorities and Frequency Response Sharing
Groups.\25\
---------------------------------------------------------------------------

    \24\ NERC Petition at 15. See also proposed BAL-003-1, Purpose
Statement:
    To require sufficient Frequency Response from the Balancing
Authority (BA) to maintain Interconnection Frequency within
predefined bounds by arresting frequency deviations and supporting
frequency until the frequency is restored to its scheduled value. To
provide consistent methods for measuring Frequency Response and
determining the Frequency Bias Setting.
    \25\ NERC proposes to define Frequency Response Sharing Group as
``[a] group whose members consist of two or more Balancing
Authorities that collectively maintain, allocate, and supply
operating resources required to jointly meet the sum of the
Frequency Response Obligations of its members.'' NERC Petition at
13. The proposed Reliability Standard allows Balancing Authorities
to cooperatively form Frequency Response Sharing Groups as a means
to jointly meet the obligations of the standard. Id.
---------------------------------------------------------------------------

    16. Requirement R1 requires that each Balancing Authority or
Frequency Response Sharing Group must achieve an annual Frequency
Response Measure that is ``equal to or more negative than its Frequency
Response Obligation'' needed to ensure sufficient Frequency Response.
Specifically, Requirement R1 provides:

    Each Frequency Response Sharing Group (FRSG) or Balancing
Authority that is not a member of a FRSG shall achieve an annual
Frequency Response Measure (FRM) (as calculated and reported in
accordance with Attachment A) that is equal to or more negative than
its Frequency Response Obligation (FRO) to ensure that sufficient
Frequency Response is provided by each FRSG or BA that is not a
member of a FRSG to maintain Interconnection Frequency Response
equal to or more negative than the Interconnection Frequency
Response Obligation.

    NERC explains the Requirement R1 has the primary objective of
``determin[ing] whether a Balancing Authority has sufficient Frequency
Response for reliable operations.'' \26\ According to NERC, Requirement
R1 achieves this objective ``via FRS Form 1 and the process in
Attachment A that provides the method for determining the
Interconnections' necessary amount of Frequency Response and allocating
it to the Balancing Authorities.'' \27\ According to NERC, another main
objective of Requirement R1 is to provide the information needed to
calculate Control Performance Standard limits and Frequency Bias
Settings. NERC asserts that Requirement R1 and Attachment A satisfy the
Commission's directive in Order No. 693 to ``determine the appropriate
periodicity of frequency response surveys necessary to ensure that
Requirement R2 and other requirements of the Reliability Standard are
met . . .'' \28\

    \26\ Id. at 15.
    \27\ Id. NERC explains that ``Attachment A (appended to the
proposed standard) is a supporting document for proposed Reliability
Standard BAL-003-1 that discusses the process the ERO will follow to
validate the Balancing Authority's FRS Form 1 data and publish the
official Frequency Bias Settings. FRS Form 1 provides the guidance
as to how to account for and measure Frequency Response. FRS Form 1,
and the underlying data retained by the Balancing Authority, will be
used for measuring whether sufficient Frequency Response was
provided.'' NERC Petition at 4.
    \28\ Id. at 16 (citing Order No. 693, FERC Stats. & Regs. ]
31,242 at P 375).
---------------------------------------------------------------------------

    17. Requirement R2 requires that:

    Each Balancing Authority that is a member of a multiple
Balancing Authority Interconnection and is not receiving Overlap
Regulation Service and uses a fixed Frequency Bias Setting shall
implement the Frequency Bias Setting determined in accordance with
Attachment A, as validated by the ERO, into its Area Control Error
(ACE) calculation during the implementation period specified by the
ERO and shall use this Frequency Bias Setting until directed to
change by the ERO.

NERC explains that setting the frequency bias to better approximate the
Balancing Authority natural response characteristic will improve the
quality of ACE control and general AGC system control response. NERC
states that the ERO, in coordination with the regions of each
Interconnection, will annually review Frequency Bias Setting data
submitted by the Balancing Authorities.

    18. Requirement R3 provides that:

    Each Balancing Authority that is a member of a multiple
Balancing Authority Interconnection and is not receiving Overlap
Regulation Service and is utilizing a variable Frequency Bias
Setting shall maintain a Frequency Bias Setting that is: (1.1) Less
than zero at all times, and (1.2) Equal to or more negative than its
Frequency Response Obligation when Frequency varies from 60 [Hertz]
Hz by more than +/- 0.036 Hz.

NERC explains that, in an Interconnection with multiple Balancing
Authorities, the Frequency Bias Setting should be coordinated among all
Balancing Authorities in the Interconnection. According to NERC, when
there is a minimum Frequency Bias Setting requirement, it should apply
for all Balancing Authorities. However, Balancing Authorities using a
variable Frequency Bias Setting may have non-linearity in their actual
response for a number of reasons including the deadband settings of
their generator governors. The measurement to ensure that these
Balancing Authorities are conforming to the Interconnection minimum is
adjusted to remove the deadband range from the calculated average
Frequency Bias Setting actually used.\29\
---------------------------------------------------------------------------

    \29\ NERC Petition at 20. NERC further states that ``For BAs
using variable bias, FRS Form 1 has a data entry location for the
previous year's average monthly Bias. The BA and the ERO can compare
this value to the previous year's Frequency Bias Setting minimum to
ensure Requirement R3 has been met.''
---------------------------------------------------------------------------

    19. Requirement R4 requires that:

    Each Balancing Authority that is performing Overlap Regulation
Service shall modify its Frequency Bias Setting in its ACE
calculation, in order to represent the Frequency Bias Setting for
the combined Balancing Authority Area, to be equivalent to either:
     The sum of the Frequency Bias Settings as shown on FRS
Form 1 and FRS Form 2 for the participating Balancing Authorities as
validated by the ERO, or
     the Frequency Bias Setting shown on FRS Form 1 and FRS
Form 2 for the entirety of the participating Balancing Authorities'
Areas.

NERC states that proposed Requirement R4 is similar to Requirement R6
in the currently-effective BAL-003-0.1b. NERC explains that overlap
regulation service is a method of providing regulation service in which
a Balancing Authority incorporates another Balancing Authority's actual
interchange, frequency responses, and schedule into the providing
Balancing Authority's AGC/ACE equation.\30\
---------------------------------------------------------------------------

    \30\ Id. at 21.
---------------------------------------------------------------------------

B. Implementation Plan

    20. NERC requests approval of an implementation plan for proposed
BAL-003-1, pursuant to which (1) Requirement R2, Requirement R3 and
Requirement R4 would become effective the first day of the first
calendar quarter that is twelve months following the effective date of
a Final Rule in this docket, and (2) Requirement R1 would become
effective the first day of the first calendar quarter that is twenty-
four months following the effective date of a Final Rule in this
docket. NERC proposes retirement of the existing Reliability Standard
BAL-003-0.1b at midnight of the day immediately prior to the effective
date of Requirements R2, Requirement R3 and Requirement R4 of the
proposed Reliability Standard.
    21. NERC requests approval of three new definitions and the revised
definition of Frequency Bias Setting effective the first day of the
first calendar quarter that is twelve months following the effective
date of a Final Rule in this docket.\31\
---------------------------------------------------------------------------

    \31\ NERC proposes to incorporate the proposed revised
definition for Frequency Bias Setting in Reliability Standards (1)
BAL-001-0.1a Real Power Balancing Control Performance, (2) BAL-004-0
Time Error Correction, (3) BAL-004-1 Time Error Correction, and (5)
BAL-005-0.1b Automatic Generation Control. NERC also proposes
retirement of the existing definition of Frequency Bias Setting at
midnight of the day immediately prior to the effective date of
Requirement R2, Requirement R3, and Requirement R4 of the proposed
Reliability Standard.
---------------------------------------------------------------------------

III. Discussion

    22. Pursuant to section 215(d) of the FPA, we propose to approve
the proposed Reliability Standard BAL-003-1 as just, reasonable, not
unduly discriminatory or preferential, and in the public interest. The
proposed Reliability Standard establishes a minimum Frequency Response
Obligation for each Balancing Authority, provides a uniform calculation
of frequency response, establishes Frequency Bias Settings that are
closer to actual Balancing Authority frequency response, and encourages
coordinated automatic generation control operation. The proposed
Reliability Standard addresses a gap in reliability as these matters
are either not--or not adequately-addressed in any currently-effective
Reliability Standard. Further, proposed BAL-003-1 addresses certain
directives from Order No. 693. We also propose to approve the proposed
new and modified definitions, most violation severity levels and
violation risk factors, and retirement of the currently-effective
standard and NERC's implementation plan.
    23. While we propose to approve BAL-003-1, we have concerns
regarding certain provisions of the proposed standard, some of which
NERC itself identifies in the reports included in its petition.
Specifically, below, we discuss the following issues: (A) The use of
median in determining the Frequency Response Measure; (B) determination
of Interconnection Frequency Response Obligation; (C) methods of
obtaining frequency response; (D) withdrawal of primary frequency
response before secondary frequency response is activated; (E) light-
load case study; (F) assignment of Violation Risk Factors and Violation
Severity Levels; and (G) the associated and supporting documents,
including Attachment A and the Procedure for ERO Support of Frequency
Response and Frequency Bias Setting Standard. While we will not set
deadlines for proposed directed modifications based on NERC's finding
in its 2013 State of Reliability Report that actual frequency response
is no longer declining in recent years,\32\ we will expect NERC to
continue to monitor such trends, and any change toward further
frequency response decline will justify revisiting the issue of
deadlines.
---------------------------------------------------------------------------

    \32\ See NERC, State of Reliability 2013 (May 2013), available
at http://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/2013_SOR_May%2015.pdf.
---------------------------------------------------------------------------

A. Use of the ``Median'' in Determining the Frequency Response Measure

    24. As discussed above, Requirement R1 of BAL-003-1 provides that
each Balancing Authority or Frequency Response Sharing Group achieve an
annual Frequency Response Measure that is equal to or more negative
than its Frequency Response Obligation needed to ensure sufficient
Frequency Response. NERC proposes to define the Frequency Response
Measure as ``the median of all the Frequency Response observations
reported annually by Balancing Authorities or Frequency Response
Sharing Groups for the frequency events specified by the ERO.'' \33\
NERC defines the ``median'' as ``the numerical value separating the
higher half of a one-dimensional sample, a one-dimensional population,
or a one-dimensional probability distribution from the lower half. The
median of a finite list of numbers is found by arranging all the
observations from lowest value to highest value and picking the middle
one.'' \34\
---------------------------------------------------------------------------

    \33\ NERC Petition at 13.
    \34\ Id., Exh. F (Frequency Response Initiative Report) at 72.
NERC developed a procedure for selecting frequency response
observations. See NERC Petition, Exh. C (Procedure for ERO Support
of Frequency Response and Frequency Bias Setting Standard). The
Procedure is referenced, but not included, in Attachment A of BAL-
003-1.
---------------------------------------------------------------------------

    25. NERC states that the standard drafting team evaluated different
approaches for averaging individual event observations to compute a
technically sound estimate of Frequency Response Measure, including
median and linear regression analysis.\35\

Explaining why the drafting team chose to use the median, NERC states:
---------------------------------------------------------------------------

    \35\ NERC Petition at 17-18. The Frequency Response Initiative
Report defines the linear regression method as the linear average of
a multi-dimensional sample, or a multi-dimensional population. See
id., Exh F at 73.

    In general, statisticians use the median as the best measure of
a central tendency when a population has outliers. Based on the
analyses performed thus far, the standard drafting team believes
that the median's superior resiliency to this type of data quality
problem makes it the best aggregation technique at the time.
However, the standard drafting team sees merit and promise in future
research with sample filtering combined with a technique such as
linear regression. When compared with the mean, linear regression
shows superior performance with respect to the elimination of noise
because the measured data is weighted by the size of the frequency
changes associated with the event. . . . The standard drafting team
acknowledges that linear regression should be re-evaluated for use
in the BAL-003 Reliability Standard once more experience is gained
with data collected.\36\
---------------------------------------------------------------------------

    \36\ Id. at 17-18 (footnote omitted). See also id, Exh. F at 72-
78. NERC explains that the ``noise'' refers to factors that can
influence data and produce outliers. Id. at 18, n.34.

However, the Frequency Response Initiative Report compared the median,
mean, and linear regression methods for measuring the frequency
response, and found that the linear regression method is preferred. The
Frequency Response Initiative Report recommended using a linear
regression method for calculating the Balancing Authority Frequency
Response Measure for compliance with the proposed standard.\37\ This
recommendation was not incorporated into the draft standard.\38\
---------------------------------------------------------------------------

    \37\ See NERC Petition, Exh. F at 78.
    \38\ NERC and the Frequency Response Working Group will include
an update of the linear regression analysis from the Frequency
Response Initiative Report during the annual review of the process
for selection of frequency events for the Balancing Authorities. See
NERC Petition, Exh. G (Status of Recommendations of the Frequency
Response Initiative Report) at Recommendation 13.
---------------------------------------------------------------------------

    26. NERC has provided adequate rationale for using the median to
determine the required Frequency Response Measure. NERC explains that
application of the median is supported by the analyses performed to
date. The Commission proposes to approve BAL-003-1 on that basis.\39\
---------------------------------------------------------------------------

    \39\ NERC Petition at 17.
---------------------------------------------------------------------------

    27. However, as NERC acknowledges in both its petition and
Frequency Response Initiative Report, the use of linear regression is a
superior method to determine the required Frequency Response Measure.
According to NERC, the standard drafting team recognizes that the use
of linear regression should be re-evaluated once more experience is
gained with data collected.\40\ We are also concerned whether use of
the median adequately represents actual data that could, on occasions,
be significantly higher or lower than the median. Thus, the Commission
proposes to direct that NERC develop a modification to apply a more
appropriate methodology for determining the required Frequency Response
Measure. For example, based on the record in this docket, it appears
that the linear regression method is superior to the median when
determining the Frequency Response Measure. We seek comment on whether
a more appropriate methodology should be used in the determination of
the Frequency Response Measure.
---------------------------------------------------------------------------

    \40\ Id. at 18.
---------------------------------------------------------------------------

B. Determination of Interconnection Frequency Response Obligation

    28. Proposed BAL-003-1 establishes a target contingency protection
criterion for each Interconnection, known as the Interconnection
Frequency Response Obligation. The proposed methodology for determining
each Interconnection's obligation for obtaining the necessary amount of
frequency response is set forth in Attachment A of the proposed
Reliability Standard. The Interconnection Frequency Response Obligation
is based on the ``resource contingency criteria,'' which is the largest
``Category C'' event for the Interconnection,\41\ except for the
Eastern Interconnection, which uses the largest event in the last ten
years.\42\ The Interconnection Frequency Response Obligation for each
Interconnection is a function of the resource contingency criteria and
the maximum change in frequency. The maximum change in frequency is
calculated by adjusting the starting frequency for each Interconnection
by the ``prevailing UFLS first step,'' i.e., under-frequency load
shedding for the Interconnection as adjusted by specific information on
the frequency deviations for the observed events which make up the data
set used to calculate the Frequency Response Measure.\43\ For multiple
Balancing Authority Interconnections, the Frequency Response Obligation
is allocated to Balancing Authorities based on the formula set forth in
Attachment A. FRS Form 1 and the underlying data retained by the
Balancing Authorities are used for measuring whether frequency response
was provided.
---------------------------------------------------------------------------

    \41\ See Proposed Reliability Standard BAL-003-1, Attachment A
at 1. Category C events are defined in Reliability Standard TPL-003-
0 (System Performance Following Loss of Two or More BES Elements),
Table 1.
    \42\ For the Eastern Interconnection, the largest event in the
last ten years is 4,500 MW, which occurred on August 4, 2007. See
Proposed Reliability Standard BAL-003-1, Attachment A at 1; NERC
Petition, Exh. F at 34-37, 54.
    \43\ Id. Under frequency load shedding is intended to be a
safety net to prevent against system collapse from severe
contingencies. The resource contingency criteria is selected to
avoid violating the under frequency load shedding settings. See NERC
Petition, Exh. D at 36 (``in general, the goal is to avoid
triggering the first step of under[hyphen]frequency load shedding
(UFLS) in the given Interconnection for reasonable contingencies
expected'').
---------------------------------------------------------------------------

1. Eastern Interconnection--Prevailing UFLS First Step
    29. For the Eastern Interconnection, Attachment A identifies 59.5
Hz as the ``first step'' of under-frequency load shedding in the
calculation of the default Interconnection Frequency Response
Obligation. Attachment A notes that this set point is ``a compromise
value set midway between the stable frequency minimum established in
PRC-006-1 (59.3 Hz) and the local protection under frequency load
shedding setting of 59.7 Hz used in Florida and Manitoba.'' \44\ The
Frequency Response Initiative Report notes that the Florida Reliability
Coordinating Council (FRCC) concluded that the Interconnection
Frequency Response Obligation starting frequency of the prevalent 59.5
Hz for the Eastern Interconnection is acceptable in that it imposes no
greater risk of under frequency load shedding operation in FRCC for an
external resource loss than for an internal FRCC event.\45\
---------------------------------------------------------------------------

    \44\ Proposed Reliability Standard BAL-003-1, Attachment A at 2.
    \45\ See NERC Petition, Exh. F (Frequency Response Initiative
Report) at 4, n. 3.
---------------------------------------------------------------------------

    30. NERC does not provide support for the statement that the first-
step value of 59.5 Hz in the calculation of the Interconnection
Frequency Response Obligation imposes no greater risk of under
frequency load shedding operation in FRCC for an external resource loss
than for an internal FRCC event. Noting that the actual first-step of
under-frequency load shedding for the Eastern Interconnection is 59.7
Hz, we seek comment from NERC and others on the technical source or
support for this statement. That is, we seek clarification and support
if the intent of the proposal is that FRCC will start shedding load
automatically before an event meets the value of 59.5 Hz used in the
proposed Reliability Standard to determine the Interconnection
Frequency Response Obligation.
2. Western Interconnection--Largest N-2 Event
    31. As previously noted, the Interconnection Frequency Response
Obligation is based on the largest Category C event, or N-2 (loss of
two or more BES elements) for the Interconnection. The default

Interconnection Frequency Response Obligation for the Western
Interconnection uses the loss of two Palo Verde generating station
units, which nets 2,400 MW as the resource contingency criteria.\46\
However, NERC indicates that the default Interconnection Frequency
Response Obligation calculation scenarios and the calculation of the
Frequency Response Measure for the Western Interconnection do not take
into account the intentional tripping of generation that will occur
during the operation of remedial action schemes. For example, the
Frequency Response Initiative Report indicates that operation of the
Pacific Northwest Remedial Action Scheme trips up to 3,200 MW of
generation in the Pacific Northwest on loss of the Pacific DC
Intertie.\47\ The Frequency Response Initiative Report recommends that
NERC and the Western Interconnection analyze the implications of
operation of the Pacific Northwest Remedial Action Scheme.\48\
---------------------------------------------------------------------------

    \46\ See Id., Exh. F at 53.
    \47\ The Pacific Northwest Remedial Action Scheme, among other
things, blocks frequency response from a number of generators and
Balancing Authorities to avoid overloading the Pacific AC ties. See
NERC Petition, Exh. F at 62.
    \48\ See Id. NERC notes that the maximum value of the Pacific
Northwest Remedial Action Scheme has been updated to be 2,850 MW.
See NERC Petition, Exh. G (Status of Recommendations of the
Frequency Response Initiative Report).
---------------------------------------------------------------------------

    32. We are concerned whether the N-2 contingency identified as an
input to the Attachment A methodology for calculating the
Interconnection Frequency Response Obligation identifies the largest N-
2 event in the Western Interconnection. NERC's study suggests that, for
example, the Pacific Northwest Remedial Action Scheme could result in a
larger contingency that, if included as an input to the Attachment A
calculation, would produce more accurate results. Accordingly, we
propose to direct that NERC submit a compliance filing that analyzes,
with supporting documentation, the implications of the Pacific
Northwest Remedial Action Scheme or any other Remedial Action Scheme
which involves intentional tripping of greater than 2,400 MW of
generation, and whether such a contingency would provide a more
accurate basis for the determination of the Western Interconnection
default Interconnection Frequency Response Obligation.

C. Methods for Obtaining Frequency Response

    33. In Order No. 693, the Commission directed NERC to develop a
modification to BAL-003-0 that includes methods for ``obtaining''
frequency response.\49\ While the proposed Reliability Standard
establishes an Interconnection Frequency Response Obligation and
allocates this obligation to the Balancing Authorities within the
Interconnection, the proposed Reliability Standard imposes no
obligation on resources that are capable of providing frequency
response. NERC states that ``the creation of Frequency Response Sharing
Groups is one of the ways the standard drafting team addressed the
Commission's directive to provide methods for obtaining Frequency
Response.'' \50\ In addition, NERC states that there are various
methods of obtaining frequency response, including regulation services,
contractual services, tariff provisions, generator interconnection
agreements, and contracts with an internal resource or loads.\51\
---------------------------------------------------------------------------

    \49\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 375. The
Commission directed NERC to develop a modification to BAL-003-0 that
``defines the necessary amount of Frequency Response needed for
Reliable Operation for each balancing authority with methods of
obtaining and measuring that the frequency response is achieved.''
Id. (emphasis added).
    \50\ NERC Petition at 13, 15-17.
    \51\ Id. at 14, n. 30; Exh. D at 37.
---------------------------------------------------------------------------

    34. The proposed Reliability Standard imposes an obligation on each
Balancing Authority to obtain frequency response, and a Balancing
Authority not meeting its obligation would be in noncompliance of
proposed BAL-003-1. We recognize that the Balancing Authorities must,
in turn, obtain frequency response from available resources, and the
proposed Reliability Standard imposes no obligation on those resources
to provide frequency response.\52\ The Commission proposes to direct
NERC to submit a report 15 months after implementation of BAL-003-1
that provides an analysis of the availability of resources for each
Balancing Authority to meet its Frequency Response Obligation during
the first year of implementation. The report should also provide data
indicating whether actual Frequency Response was sufficient to meet
each Balancing Authority's Frequency Response Obligation. Further, upon
completion of this analysis, should the findings indicate that the
Frequency Response Obligation was not met, NERC should provide
appropriate recommendations to ensure that frequency response can be
maintained at all times within each Balancing Authority's footprint.
---------------------------------------------------------------------------

    \52\ NERC points out that improvements in frequency response
have been achieved in the ERCOT Interconnection. See NERC Petition
at 12, n. 27. For example, the ERCOT Nodal Operating Guides Section
2 has specified requirements for governor deadband settings. NERC
Petition, Exh. F at 81. In addition, the Texas Reliability Entity
Board of Directors has approved a Regional Reliability Standard,
which is currently under review by the NERC Board of Directors, that
requires generators to maintain prescribed deadband and droop
settings that assure generator governors provide automatic sustained
frequency response for specified frequency deviations. See BAL-001-
TRE-1. http://www.texasre.org/CPDL/BAL-001-TRE-1_5.24.11.docx.
---------------------------------------------------------------------------

D. Premature Withdrawal of Primary Frequency Response

    35. As explained above, following the sudden loss of generation,
the automatic and immediate increase in power output by resources
providing primary frequency control seeks to quickly arrest and
stabilize the frequency of the interconnection, usually within 30
seconds or less. After this rapid primary frequency response, AGC
provides secondary frequency response to return frequency to the
scheduled value in time frames of several minutes after the loss of
generation. If a significant amount of primary frequency response is
withdrawn before the secondary frequency response is activated, a
further drop in frequency response will occur. This drop in frequency
is illustrated by the following diagram: \53\
---------------------------------------------------------------------------

    \53\ NERC Petition, Exh. F at 35, fig. 21.

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

[GRAPHIC] [TIFF OMITTED] TP29JY13.009

    36. NERC indicates that, while the standards drafting team
addressed the early withdrawal of primary frequency response, there are
no requirements that address this issue and it remains a concern.\54\
Specifically, during the initial recovery from the loss of a generator,
a ``gap'' can occur if significant amounts of primary frequency
responses are withdrawn before the secondary response is fully
activated. As previously noted, the Interconnection Frequency Response
Obligation for each Interconnection is a function of the resource
contingency criteria and the maximum change in frequency.\55\ The
Frequency Response Initiative Report recommends that an adjustment
should be made to the maximum allowable change in frequency to
compensate for the predominate withdrawal of primary frequency response
exhibited in an Interconnection until such withdrawal is no longer
exhibited.\56\ NERC includes an adjustment to provide an additional
primary frequency response when early withdrawal of primary frequency
response would occur.\57\ This adjustment only partially addresses the
concern because, while increased primary frequency response is
beneficial, it still does not address early withdrawal of primary
frequency response that otherwise would allow time for secondary
frequency response to prevent further decline in frequency. The
Frequency Response Initiative Report also recommends that this
adjustment should be carefully monitored and recalculated during the
annual Interconnection Frequency Response Obligation calculations.\58\
The Frequency Response Initiative Report notes that there are potential
ways of alleviating this withdrawal symptom, including, as discussed
below, modification of outer-loop control systems that could prevent
withdrawal of primary frequency response.
---------------------------------------------------------------------------

    \54\ See Id., Exh. D (Frequency Response Standard Background
Document) at 19 (``the intentional withdrawal of response before
frequency has been restored to schedule can cause a decline in
frequency beyond that which would be otherwise expected. This
intentional withdrawal of response is highly detrimental to
reliability. Therefore, it can be concluded in general that
sustained response has a higher reliability value than
un[hyphen]sustained response.'').
    \55\ The maximum change in frequency is an amount of frequency
deviation based on the loss of the identified resource contingency
that will not trigger under-frequency load shedding.
    \56\ NERC Petition, Exh. F at 5.
    \57\ In addition NERC extends the time period (to 20-52 seconds
from the time of the frequency event) for the measurement of the low
point of frequency deviation to provide an incentive to reduce
primary frequency response withdrawal.
    \58\ Id. at 50. This adjustment is initially applied in the
Eastern Interconnection.
---------------------------------------------------------------------------

    37. NERC's 2012 Frequency Response Initiative Report states
``[w]ithdrawal of primary frequency response is an undesirable
characteristic associated most often with digital turbine-generator
control systems using setpoint output targets for generator output.
These are typically outer-loop control systems that defeat the primary
frequency response of the governors after a short time to return the
unit to operating at a requested MW output.'' \59\ The Frequency
Response Initiative Report recommends measuring and tracking frequency
response sustainability trends.\60\ The Frequency Response Initiative
Report also recommends that ``NERC should include guidance on methods
to reduce or eliminate the effects of primary frequency response
withdrawal by outer-loop unit or plant control systems.'' \61\
---------------------------------------------------------------------------

    \59\ Id. at 31.
    \60\ Id. at 35. The Frequency Response Initiative Report also
recognizes unit characteristics and operating philosophies as
typical causes.
    \61\ Id. at 41-42.
---------------------------------------------------------------------------

    38. We are concerned that proposed Reliability Standard BAL-003-1
does not adequately address the reliability issue associated with the
withdrawal of primary frequency response prior to activation of
secondary frequency response. The premature withdrawal of primary
frequency response absent activation of resources providing secondary
frequency response may lead to under-frequency load shed and possible
cascading outages. Accordingly, we propose to direct that NERC develop
a modification to BAL-003-1 to address the concern of premature
withdrawal of frequency response prior to the activation of secondary
frequency response.

E. Light-Load Case Study

    39. NERC's Frequency Response Initiative Report recognizes that

``[s]ustainability of primary frequency response becomes more important
during light-load conditions when there are generally fewer frequency-
responsive generators online.'' \62\ This is because inertia, i.e., the
resistance to a change in the motion of an object, plays a crucial role
in how fast frequency declines following the sudden loss of
generation.\63\ When the inertia on the system is low (i.e. fewer
generators on line), the loss of generation creates a steeper frequency
excursion and thus the need for faster frequency response.\64\
---------------------------------------------------------------------------

    \62\ Id. at 32.
    \63\ Id. at 39-40. Inertia is provided from the stored energy in
the rotating mass of the turbine-generators and synchronous motors
on the Interconnection. See Id., Exh. D at 16-17.
    \64\ Id., Exh. F at 40. The reduction in inertia also drives a
need for higher speed response to frequency excursions.
---------------------------------------------------------------------------

    40. For the Eastern Interconnection, the proposed Reliability
Standard's resource contingency criterion for calculating the
Interconnection Frequency Response Obligation is based on an event that
took place during heavy system load conditions. The stability
simulation testing for the Eastern Interconnection resource contingency
criteria used in the determination of the Interconnection Frequency
Response Obligation was limited to analysis using a generic governor
stability case, therefore representing conditions far different than
light-load conditions when system inertia and load response would be
expected to be lower than in the generic case. The Frequency Response
Initiative Report recommends the development of a new light-load case
study, and that the resource contingency criterion for the Eastern
Interconnection Frequency Response Obligation should be re-
simulated.\65\ According to NERC, the Eastern Interconnection
Reliability Assessment Group has agreed to prepare an updated generic
governor 2013 summer light-load case (from the 2012 case series) by
August 1, 2013, and evaluate Eastern Interconnection Frequency Response
Obligation during the expected light-load conditions.\66\
---------------------------------------------------------------------------

    \65\ Id. at 99.
    \66\ Id., Exh. G. A study conducted by the National Renewable
Energy Laboratory explored the relationship between system
disturbance and grid frequency perturbation See National Renewable
Energy Laboratory, Eastern Frequency Response Study (May 2013). A
key finding is that the dynamic model of the Eastern Interconnection
can be adjusted to more closely capture the observed behavior. In
particular, the amount of generation with governor controls
activated was adjusted to model the contingency used in calculating
the Eastern Interconnection Frequency Response Obligation. In
addition, a light load power flow case was selected with the
expectation that it would represent one of the more challenging
conditions for the Eastern Interconnection with respect to frequency
response. See http://www.nrel.gov/docs/fy13osti/58077.pdf.
---------------------------------------------------------------------------

    41. We agree with NERC that the study of light-load scenarios is
useful to determining an appropriate Interconnection Frequency Response
Obligation, in particular for the Eastern Interconnection.\67\
Accordingly, we propose to direct that NERC submit the results of the
light-load case, together with NERC's recommendations on whether
further actions are warranted.
---------------------------------------------------------------------------

    \67\ According to NERC, ``[m]odeling of frequency response
characteristics has been a known problem since at least 2008, when
forensic modeling of the Eastern Interconnection required a `de-
tuning' of the existing [Multiregional Modeling Working Group]
dynamics governor to 20% of modeled (80% error) to approach the
measured frequency response values from the [August 4, 2007]
event.'' See NERC Petition, Exh. F at 35.
---------------------------------------------------------------------------

F. Assignment of Violation Risk Factors and Violation Severity Levels

    42. In its Petition, NERC proposes a ``medium'' violation risk
factor for each requirement of the proposed Reliability Standard. We do
not believe that NERC adequately justifies assignment of a medium
violation risk factor to Requirement R1, which establishes the
Frequency Response Measure a Balancing Authority must achieve to arrest
a decline in system frequency. NERC asserts that a violation of this
requirement will not cause bulk electric system instability, separation
or cascading failures because ``a Balancing Authority's previous year's
Frequency Bias setting is included within its ACE equation and would
provide support for the contingency.'' \68\ This explanation does not
apply to Requirement R1. The ACE equation provides input to secondary
frequency control. As identified in NERC's background document for BAL-
003-1, secondary frequency is delivered within minutes while the time
needed to arrest a frequency decline is within seconds.\69\ NERC
describes frequency response as a critical component to the reliable
operation of the Bulk-Power System, indicating that Requirement R1 does
not impose merely an administrative burden. The medium violation risk
factor that the Commission approved for each BAL-003-0.1b requirement
does not apply to Requirement R1 because it has no equivalent in that
standard. We propose to direct NERC to assign a high violation risk
factor to Requirement R1. We seek comments on this proposal.
---------------------------------------------------------------------------

    \68\ Id., Exh. J at 7.
    \69\ Id., Exh. D at 38.
---------------------------------------------------------------------------

    43. We propose several changes to NERC's proposed violation
severity level assignments. For Requirement R1, NERC proposes two
violation severity levels depending on whether a Balancing Authority or
a Frequency Response Sharing Group has an annual Frequency Response
Measure ``less negative than its Frequency Response Obligation by more
than 1% but by at most 30%, or 15 MW/0.1Hz, whichever one is the
greater deviation from its [Frequency Response Obligation].'' This
violation would have a ``lower'' severity level if ``[t]he summation of
the Balancing Authorities' [Frequency Response Measure] within an
Interconnection was equal to or more negative than the
Interconnection's IFRO,'' and a ``high'' severity level if this
summation ``did not meet its [Interconnection Frequency Response
Obligation].'' Based on these two possibilities for this summation,
NERC proposes either a ``medium'' severity level and a ``severe''
severity level for a Balancing Authority or Frequency Response Sharing
Group with an Frequency Response Measure that is ``less negative than
its [Frequency Response Obligation] by more than 30% or by more than 15
MW/0.1 Hz, whichever is the greater deviation from its [Frequency
Response Obligation].''
    44. NERC assigns these severity levels partly on performance of
Requirement R1 by all other responsible entities in the Interconnection
in which a violator is located. We do not agree with these assignments.
Violation severity levels focus on a violator's deviation from required
performance, not the risk the violation is expected to pose to
reliability or performance by other entities.\70\ A Balancing Authority
or Frequency Response Sharing Group subject to Requirement R1 does not
control compliance with this requirement by any other Balancing
Authority or Frequency Response Sharing Group within the same
Interconnection. It is unfair to base a penalty on a responsible entity
in part upon the collective compliance or lack of compliance by
independent entities. We propose that NERC modify its severity level
assignments for Requirement R1 to remove references to performance by
other entities or otherwise to address our concern. We seek comments on
this proposal.
---------------------------------------------------------------------------

    \70\ Sanction Guidelines of the North American Electric
Reliability Corporation (effective January 31, 2012), at 8 (section
3.1.2).
---------------------------------------------------------------------------

G. Supporting/Associated Documents

    45. Proposed Reliability Standard BAL-003-1 has several supporting
or associated documents. Attachment A is appended to the proposed
Reliability Standard, and is explicitly referenced in Requirements R1
and R2. For example, Requirement R1 provides in part that

``[e]ach Frequency Response Sharing Group (FRSG) or Balancing Authority
. . . shall achieve an annual Frequency Response Measure (FRM) (as
calculated and reported in accordance with Attachment A) that is equal
to or more negative than its Frequency Response Obligation . . .''
NERC's Procedure for ERO Support of Frequency Response and Frequency
Bias Setting Standard (Procedure), is included as an ``associated
document'' in the proposed Reliability Standard, and is referenced in
Attachment A.\71\ Likewise, Requirement 4 of proposed BAL-003-1
references FRS Forms 1 and 2, stating that ``each Balancing Authority
that provides Overlap Regulation Service shall modify its Frequency
Bias Setting in its ACE calculation . . . to be equivalent to ``the sum
of Frequency Bias Settings as shown on FRS Form 1 and Form 2 . . . as
validated by the ERO.'' \72\
---------------------------------------------------------------------------

    \71\ The Procedure is provided as Exh. C to the NERC petition.
NERC states that it included the Procedure in the petition for
informational purposes and NERC does not request Commission approval
of the document. NERC Petition at 4.
    \72\ Proposed Reliability Standard BAL-003-1 identifies FRS Form
1 and FRS Form 2 as ``associated documents.'' Neither form is
included in the NERC Petition.
---------------------------------------------------------------------------

    46. These associated and supporting documents are explicitly
referenced in the Requirements of the Reliability Standard. Thus,
failure of a Balancing Authority to comply with such associated and
supporting documents could result in non-compliance with the underlying
Requirement.\73\
---------------------------------------------------------------------------

    \73\ Attachment A and the Procedures also require NERC to take
certain actions pertaining to the calculation of frequency response
measure and allocation among balancing authorities. The ERO is not
an applicable entity pursuant to proposed Reliability Standard BAL-
003-1. The ERO, however, has an independent obligation to ``ensure
compliance with a reliability standard or any Commission order
affecting the ERO or a regional entity'' and the Commission can take
``such action as is necessary or appropriate'' to ensure that the
ERO fulfills this responsibility under Attachment A and the
Procedures. See 16 U.S.C. 824o(e)(5).
---------------------------------------------------------------------------

IV. Information Collection Statement

    47. This NOPR proposes to approve Reliability Standard BAL-003-1,
which establishes an Interconnection Frequency Response Obligation
based on the frequency response observations reported annually by
Balancing Authorities or Frequency Response Sharing Groups for the
frequency events specified by the ERO. The collection of information
contained in the proposed Reliability Standard BAL-003-1 is subject to
review by the Office of Management and Budget (OMB) under section
3507(d) of the Paperwork Reduction Act of 1995 (PRA).\74\ OMB's
regulations require that OMB approve certain reporting and
recordkeeping requirements (collections of information) imposed by an
agency.\75\ Upon approval of a collection of information, OMB will
assign an OMB control number and expiration date. Respondents subject
to the filing requirements of this rule will not be penalized for
failing to respond to these collections of information unless the
collections of information display a valid OMB control number.
---------------------------------------------------------------------------

    \74\ 44 U.S.C. 3507(d) (2006).
    \75\ 5 CFR 1320.11 (2012).
---------------------------------------------------------------------------

    48. Comments are solicited on the Commission's need for this
information, whether the information will have practical utility, the
accuracy of the provided burden estimate, ways to enhance the quality,
utility, and clarity of the information to be collected, and any
suggested methods for minimizing the respondent's burden, including the
use of automated information techniques. Specifically, the Commission
asks that any revised burden or cost estimates submitted by commenters
be supported by sufficient detail to understand how the estimates are
generated.
    49. Public Reporting Burden: The proposed Reliability Standard
requires the collection of certain information to establish the
Interconnection Frequency Response Obligation and the Frequency Bias
Setting for each Balancing Authority. Each Balancing Authority reports
its previous year Frequency Response Measure and Frequency Bias Setting
to NERC, and revised Frequency Bias Settings are based on data from
events the Balancing Authorities report on the proposed FRS Form 1. The
information provided on the FRS Form 1 is based on events which qualify
for analyses,\76\ and NERC states that it will identify between 20 to
35 events in each Interconnection for calculating the Frequency
Response Measure and Frequency Bias Setting and the Frequency Response
Measure.\77\
---------------------------------------------------------------------------

    \76\ NERC states that it will provide quarterly posting of
candidate events to assist the Balancing Authorities with
compliance, and lessen the burden of the annual submission of FRS
Form 1 data. NERC Petition, Exh. C at 3-4.
    \77\ Id. at 1. The Frequency Response Initiative Report states
that between 20 and 25 events are necessary for statistical
analysis. Id., Exh. F at 72.
---------------------------------------------------------------------------

    50. Allotting eight hours for Balancing Authorities to compile the
information on candidate events,\78\ multiplied by 28 events per
Balancing Authority per year yields 224 hours per year per Balancing
Authority as the regulatory burden for compliance.\79\ As of May 31,
2013, there are 132 registered Balancing Authorities.\80\ Accordingly,
the Commission estimates the annual regulatory burden for compliance
with the proposed Reliability Standard to be $13,560 per Balancing
Authority,\81\ with an estimated total annual cost for all Balancing
Authorities to be $1,789,920.\82\
---------------------------------------------------------------------------

    \78\ The information is automatically generated from computer
data bases. However, time is allotted to compile, verify, and review
the information.
    \79\ Assuming an average of between 20 and 35 events per year.
    \80\ NERC Compliance Registry List, May 30, 2013.
    \81\ The estimated hourly loaded cost (salary plus benefits) for
an engineer is assumed to be $60/hour, based on salaries as reported
by the Bureau of Labor Statistics (BLS) (http://bls.gov/oes/current/naics2_22.htm). Loaded costs are BLS rates divided by 0.703 and
rounded to the nearest dollar. http://www.bls.gov/news.release/ecec.nr0.htm
    \82\ The estimated total annual cost includes an annual data
retention burden of $15,840 for all Balancing Authorities.

----------------------------------------------------------------------------------------------------------------
                                  Number of
BAL-003-1 (frequency response     balancing       Number of        Average      Total annual    Estimated total
 and frequency  bias setting)     authority     responses per   burden hours    burden hours    annual cost  ($)
                                 respondents     respondent     per response
                                          (1)             (2)             (3)     (1) x (2) x  Total hours x $60
                                                                                (3)
----------------------------------------------------------------------------------------------------------------
Annual Reporting.............             132              28               8          29,568         $1,774,080
Data Retention...............             132               1               2             264             15,840
                              ----------------------------------------------------------------------------------
    Total....................  ..............  ..............  ..............          29,832          1,789,920
----------------------------------------------------------------------------------------------------------------

    Title: FERC-725R, Mandatory Reliability Standards: Reliability
Standard BAL-003-1.
    Action: Proposed Collection of Information.
    OMB Control No.: To be determined.
    Respondents: Business or other for-profit, and not-for-profit
institutions.
    Frequency of Responses: Annual.
    51. Necessity of the Information: The proposed revision of NERC
Reliability Standard BAL-003-1 is part of the implementation of the
Congressional mandate of the Energy Policy Act of 2005 to develop
mandatory and enforceable Reliability Standards to better ensure the
reliability of the nation's Bulk Power System. Specifically, the
proposed Reliability Standard BAL-003-1 would ensure sufficient
Frequency Response from the Balancing Authorities to maintain
Interconnection Frequency within predefined bounds.
    52. Internal Review: The Commission has reviewed the proposed
revision to the current Reliability Standard and made a determination
that its action is necessary to implement section 215 of the FPA. The
Commission has assured itself, by means of its internal review, that
there is specific, objective support for the burden estimate associated
with the information requirements.
    53. Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street NE., Washington, DC 20426 [Attention:
Ellen Brown, Office of the Executive Director, email:
<EMAIL_ADDRESS>phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>].
    54. For submitting comments concerning the collection of
information and the associated burden estimate, please send your
comments to the Commission and to the Office of Management and Budget,
Office of Information and Regulatory Affairs, Washington, DC 20503
[Attention: Desk Officer for the Federal Energy Regulatory Commission,
phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>]. For security reasons,
comments to OMB should be submitted by email to<EMAIL_ADDRESS>Comments submitted to OMB should include Docket
Number RM13-11-000.

V. Environmental Analysis

    55. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\83\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. The actions proposed here fall within the categorical
exclusion in the Commission's regulations for rules that are
clarifying, corrective or procedural, or do not substantially change
the effect of the regulations being amended.\84\ The actions proposed
herein fall within this categorical exclusion in the Commission's
regulations.
---------------------------------------------------------------------------

    \83\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \84\ 18 CFR 380.4(a)(2)(ii) (2012).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act

    56. The Regulatory Flexibility Act of 1980 (RFA) \85\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The NERC registry includes 132 individual Balancing Authorities.
Comparison of the NERC Compliance Registry with data submitted to the
Energy Information Administration on Form EIA-861 indicates that, of
these entities, 15 may qualify as small entities.\86\
---------------------------------------------------------------------------

    \85\ 5 U.S.C. 601-612.
    \86\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act (SBA), which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. See
15 U.S.C. 632 (2006). According to the Small Business
Administration, an electric utility is defined as ``small'' if,
including its affiliates, it is primarily engaged in the generation,
transmission, and/or distribution of electric energy for sale and
its total electric output for the preceding fiscal year did not
exceed 4 million megawatt hours.
---------------------------------------------------------------------------

    57. As noted above, the Commission estimates the annual regulatory
burden for compliance with the proposed Reliability Standard to be
$13,560 per Balancing Authority. This estimate for all Balancing
Authorities was established using 28 events per year, but smaller
entities may have fewer events which qualify for analysis,\87\ and the
costs for these smaller entities may be reduced. Further, while the
proposed Reliability Standard establishes a Balancing Authority's
Frequency Response Obligation, because Balancing Authorities are
currently providing frequency response, we do not anticipate additional
compliance costs. Accordingly, we do not consider the cost of the
proposed Reliability Standard to be a significant economic impact for
small entities because it should not represent a significant percentage
of an affected small entity's operating budget. Accordingly, no
regulatory flexibility analysis is required.
---------------------------------------------------------------------------

    \87\ The Procedures establish a minimum of 20 events for
analysis, and a process for identifying when fewer than 20 events
are available for analysis.
---------------------------------------------------------------------------

VII. Comment Procedures

    58. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due September 27, 2013. Comments must refer to
Docket No. RM13-11-000, and must include the commenter's name, the
organization they represent, if applicable, and their address in their
comments.
    59. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    60. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    61. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    62. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
    63. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the

last three digits of this document in the docket number field.
    64. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
    By direction of the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-18000 Filed 7-26-13; 8:45 am]
BILLING CODE 6717-01-P