[Federal Register Volume 73, Number 206 (Thursday, October 23, 2008)]
[Proposed Rules]
[Pages 63105-63110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25051]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM08-11-000]


Version Two Facilities Design, Connections and Maintenance 
Reliability Standards

Issued October 16, 2008.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to section 215 of the Federal Power Act, the 
Commission is proposing to approve three revised Reliability Standards 
developed by the North American Electric Reliability Corporation 
(NERC), which the Commission has certified as the Electric Reliability 
Organization responsible for developing and enforcing mandatory 
Reliability Standards. The three revised Reliability Standards, 
designated by NERC as FAC-010-2, FAC-011-2 and FAC-014-2, set 
requirements for the development and communication of system operating 
limits of the Bulk-Power System for use in the planning and operation 
horizons.

DATES: Comments are due November 24, 2008.

ADDRESSES: Comments and reply comments may be filed electronically via 
the eFiling link on the Commission's Web site at http://www.ferc.gov. 
Documents created electronically using word processing software should 
be filed in the native application or print-to-PDF format and not in a 
scanned format. This will enhance document retrieval for both the 
Commission and the public. The Commission accepts most standard word 
processing formats and commenters may attach additional files with 
supporting information in certain other file formats. Attachments that 
exist only in paper form may be scanned. Commenters filing 
electronically should not make a paper filing. Service of rulemaking 
comments is not required. Commenters that are not able to file 
electronically must send an original and 14 copies of their comments 
to: Federal Energy Regulatory Commission, Secretary of the Commission, 
888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Cory Lankford (Legal Information), 
Office of the General Counsel, Federal Energy Regulatory Commission, 
888 First Street, NE., Washington, DC 20426, (202) 502-6711; Eddy Lim 
(Technical Information), Office of Electric Reliability, Division of 
Reliability Standards, Federal Energy Regulatory Commission, 888 First 
Street, NE, Washington, DC 20426, (202) 502-6713.

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215 of the Federal Power Act,\1\ the 
Commission is proposing to approve three revised Reliability Standards 
concerning Facilities Design, Connections and Maintenance (FAC) that 
were developed by the North American Electric Reliability Corporation 
(NERC), which the Commission has certified as the Electric Reliability 
Organization (ERO) responsible for developing and enforcing mandatory 
Reliability Standards. The three revised Reliability Standards, 
designated by NERC as FAC-010-2, FAC-011-2 and FAC-014-2, set 
requirements for the development and communication of system operating 
limits of the Bulk-Power System for use in the planning and operation 
horizons.\2\
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    \1\ 16 U.S.C. 824o (2006).
    \2\ The Commission is not proposing any new or modified text to 
its regulations. Rather, as set forth in 18 CFR Part 40, a proposed 
Reliability Standard will not become effective until approved by the 
Commission, and the ERO must post on its Web site each effective 
Reliability Standard.
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I. Background

A. Mandatory Reliability Standards

    2. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, which are 
subject to Commission review and approval. Once approved, the 
Reliability Standards may be enforced by the ERO, subject to Commission 
oversight, or by the Commission independently.\3\
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    \3\ 16 U.S.C. 824o(e)(3).
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B. NERC's Proposed Version Two FAC Reliability Standards

    3. On November 15, 2006, NERC filed 20 revised Reliability 
Standards and three version one FAC Reliability Standards for 
Commission approval. The Commission addressed the 20 revised 
Reliability Standards in Order

[[Page 63106]]

No. 693 \4\ and established a separate rulemaking proceeding to address 
the three version one FAC Reliability Standards, which require planning 
authorities and reliability coordinators to establish methodologies to 
determine system operating limits (SOLs) for the Bulk-Power System in 
the planning and operation horizons. The Commission approved the 
version one FAC Reliability Standards in Order No. 705 and directed the 
ERO to address certain issues.\5\
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    \4\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, 72 FR 16416, FERC Stats. & Regs. ] 31,242, reh'g 
denied, Order No. 693-A, 120 FERC ] 61,053 (2007).
    \5\ Facilities Design, Connections and Maintenance Reliability 
Standards, Order No. 705, 73 FR 1770 (Jan. 9, 2008), 121 FERC ] 
61,296 (2007).
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    4. On June 30, 2008, in response to the Commission's directives in 
Order No. 705, NERC submitted for Commission approval three revised FAC 
Reliability Standards: \6\ FAC-010-2--System Operating Limits 
Methodology for the Planning Horizon, FAC-011-2--System Operating 
Limits Methodology for the Operations Horizon, and FAC-014-2--Establish 
and Communicate System Operating Limits. NERC requests that FAC-010-2 
be made effective on July 1, 2008, FAC-011-2 on October 1, 2008, and 
FAC-014-2 on January 1, 2009, consistent with the implementation dates 
of version one of these Reliability Standards.
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    \6\ NERC designates the version number of a Reliability Standard 
as the last digit of the Reliability Standard number. Therefore, 
version one Reliability Standards end with ``-1'' and version two 
Reliability Standards end with ``-2.''
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II. Discussion

    5. As discussed below, NERC's proposed revisions to the FAC 
Reliability Standards preliminarily appear to be just and reasonable 
and consistent with our direction in Order No. 705. The Commission 
therefore proposes to accept FAC-010-2, FAC-011-2, and FAC-014-2 
effective the latter of the effective date of the final rule in this 
docket or NERC's proposed effective dates.\7\
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    \7\ Reliability Standards cannot become effective before the 
effective date of a Commission order approving them. See, e.g., 
Mandatory Reliability Standards for Critical Infrastructure 
Protection, Order No. 706, 73 FR 7368 at n.190 (Feb. 7, 2008), 122 
FERC ] 61,010 (2008).
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A. Load Greater Than Studied

    6. Requirement R2.3.2 of FAC-011-1 provided that the system's 
response to a single contingency may include, inter alia, 
``[i]nterruption of other network customers, only if the system has 
already been adjusted, or is being adjusted, following at least one 
prior outage, or, if the real-time operating conditions are more 
adverse than anticipated in the corresponding studies, e.g., load 
greater than studied.'' NERC asserted that a significant gap between 
actual and studied conditions (such as a large error in load forecast) 
could be treated as though it were a contingency under the version 1 of 
FAC-011-1 Reliability Standard.
    7. In Order No. 705, the Commission disagreed with NERC's reading 
of FAC-011-1, sub-Requirement R2.3.2 and interpretation of the phrase 
``load greater than studied.'' \8\ However, the Commission found that 
the meaning of Requirement R2.3 and sub-Requirement R2.3.2 was not 
otherwise unclear. The Commission therefore approved FAC-011-1, but 
directed the ERO to revise the Reliability Standard through the 
Reliability Standards development process. The Commission suggested 
that NERC could address the Commission's concern by deleting the 
phrase, ``e.g., load greater than studied.''
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    \8\ Order No. 705, 121 FERC ] 61,296 at P 70.
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NERC Proposal
    8. NERC proposes to address the Commission's concern with the 
phrase ``load greater than studied'' by revising FAC-011-1 to remove 
the phrase from Requirement R2.3.2. NERC states that because the phrase 
served as an example, its removal does not materially change the 
requirement or the Reliability Standard. NERC's proposed FAC-011-2 
therefore omits the relevant phrase.
Commission Proposal
    9. The Commission proposes to approve NERC's proposed removal of 
the phrase ``e.g., load greater than studied'' from Requirement R2.3.2 
of FAC-011-2. NERC's revision in FAC-011-2 appears reasonable and does 
not appear to change or conflict with the stated requirements set forth 
in the version one Reliability Standards approved in Order No. 705. 
NERC's revision therefore appears just, reasonable, not unduly 
discriminatory or preferential, and in the public interest.
    10. While NERC describes the phrase ``load greater than studied'' 
as an example and states that its removal does not materially change 
the requirement, the Commission notes that Order No. 705 found that the 
operating conditions referred to in sub-Requirement R2.3.2 are 
exacerbating circumstances that are distinct from the actual 
contingency to be addressed that is referred to in Requirement R2.3. We 
stated that this did not support treating ``load greater than studied'' 
as a contingency.\9\ As we stated in Order No. 705, correcting for load 
forecast error is not accomplished by treating the error as a 
contingency, but is addressed under other Reliability Standards.\10\
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    \9\ Id. P 69.
    \10\ Id. P 68. For instance, we stated that ``transmission 
operators are required to modify their plans whenever they receive 
information or forecasts that are different from what they used in 
their present plans. Furthermore, variations in weather forecasts 
that result in load forecast errors are more properly addressed 
through operating reserve requirements.'' Id.
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B. Cascading Outages

    11. With the version one FAC Reliability Standards, NERC proposed 
to add the term ``Cascading Outages'' to its glossary. In Order No. 
705, the Commission noted that, although the glossary did not include a 
definition of Cascading Outages, it included an approved definition of 
Cascading, which seemed to describe the same concept. The Commission 
remanded NERC's proposed definition of Cascading Outages because NERC 
did not describe either the need for two definitions that seem to 
address the same matter or the variations between the two. The 
Commission also raised specific concerns with NERC's proposed 
definition of Cascading Outages. However, the Commission allowed NERC 
to file a revised definition that addresses the Commission's concerns.
NERC Proposal
    12. NERC states that it is not proposing a revised definition of 
Cascading Outage. Instead, NERC proposes to address the Commission's 
concern by removing the term from the proposed FAC Reliability 
Standards. NERC states that its Board of Trustees withdrew its approval 
of the term at its February 12, 2008 meeting. NERC further states that 
the drafting team reviewed the term Cascading Outage relative to the 
term Cascading, a term in the approved NERC Glossary of Terms and 
indicated there were no intended material differences in the terms. 
NERC therefore removed the term Cascading Outage from the proposed FAC-
010-2 and FAC-011-2 Reliability Standards and replaced with it with the 
term Cascading.
Commission Proposal
    13. The Commission proposes to approve NERC's proposed removal of 
the term Cascading Outage from its FAC Reliability Standards. NERC's 
proposed revisions to FAC-010-2 and FAC-011-2 appear reasonable and do 
not appear to change or conflict with the stated requirements set forth 
in the version one

[[Page 63107]]

Reliability Standards approved in Order No. 705. NERC's revisions 
therefore appear just, reasonable, not unduly discriminatory or 
preferential, and in the public interest.

C. Loss of Consequential Load

    14. Requirement R2.3 of FAC-010-1 provided that the system's 
response to a single contingency may include, inter alia, ``planned or 
controlled interruption of electric supply to radial customers or some 
local network customers connected to or supplied by the Faulted 
Facility or by the affected area.'' \11\ In response to a question 
raised by the Commission, NERC clarified that the provision in FAC-010-
1, Requirement R2.3 is limited to loss of load that is directly 
connected to the facilities removed from service as a direct result of 
the contingency, i.e., consequential load loss.
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    \11\ Identical language appears in FAC-011-1, Requirement R2.3
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    15. In Order No. 705, the Commission reiterated its holding that 
addressed similar language on loss of load in Order No. 693, regarding 
Reliability Standard TPL-002-0. In Order No. 693, the Commission noted 
that ``allowing for the 30 minute system adjustment period, the system 
must be capable of withstanding an N-1 contingency, with load shedding 
available to system operators as a measure of last resort to prevent 
cascading failures.'' \12\ Order No. 693 directed the ERO to clarify 
the planning Reliability Standard TPL-002-0 accordingly. The Commission 
reached the same conclusion in Order No. 705. In Order No. 705, the 
Commission approved Reliability Standard FAC-010-1, Requirement R2.3 
and directed the ERO to ensure that the clarification developed in 
response to Order No. 693 is made to the FAC Reliability Standards as 
well.\13\
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    \12\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1788.
    \13\ Order No. 705, 121 FERC ] 61,296 at P 53.
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NERC's Proposal
    16. NERC suggests that the revisions to the term ``loss of 
consequential load'' are best addressed in the modifications being made 
to the transmission planning (TPL) family of Reliability Standards in 
its Project 2006-02 Assess Transmission Future Needs and Develop 
Transmission Plans. NERC reiterates its position that the TPL 
Reliability Standards define acceptable system performance response and 
serve as the foundation for the FAC family of Reliability Standards. 
NERC states that the term ``loss of consequential load'' is intrinsic 
to the scope of Project 2006-02. According to NERC, the drafting team 
has already proposed a definition for the term to be presented for 
approval for inclusion in NERC's Glossary of Terms.\14\ NERC states 
that this approach will provide the clarity needed.
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    \14\ On August 14, 2007, the Reliability Standards drafting team 
posted for comment a draft of Reliability Standard TPL-001-1. NERC, 
Draft 2 TPL-001-1, Transmission System Planning Performance 
Requirements Posted for 45-day Comment Period, Project 2006-02, at 2 
(2008), available at: http://www.nerc.com/filez/standards/Assess-Transmission-Future-Needs.html.
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Commission Proposal
    17. The Commission proposes to allow the ERO to address revisions 
to the term ``loss of consequential load'' in the modification being 
made to the TPL Reliability Standards. Such revisions should be 
consistent with the Commission's prior determinations in Order Nos. 693 
and 705.\15\ The Commission finds that FAC-010-2 and FAC-011-2 are 
clearly understood as written and clarified in Order No. 705, including 
its holding with respect to ``loss of consequential load,'' \16\ and 
that NERC's proposal to deal with ``loss of consequential load'' in a 
more-related project is appropriate.
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    \15\ See Order No. 705, 121 FERC ] 61,296 at P 53; Order No. 
693, FERC Stats. & Regs. ] 31,242 at P 1788 & n.461.
    \16\ See id. P 53.
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D. Violation Severity Levels

    18. In the event of a violation of a Reliability Standard, NERC 
will establish the initial value range for the corresponding base 
penalty amount. To do so, NERC will assign a violation risk factor for 
each requirement of a Reliability Standard that relates to the expected 
or potential impact of a violation of the requirement on the 
reliability of the Bulk-Power System. In addition, NERC will define up 
to four violation severity levels--Lower, Moderate, High and Severe--as 
measurements for the degree to which the requirement was violated in a 
specific circumstance.
    19. In Order No. 705, the Commission approved 63 of NERC's 72 
proposed violation risk factors and directed NERC to file violation 
severity level assignments before the version one FAC Reliability 
Standards become effective.\17\ Subsequently, NERC developed violation 
severity levels for each requirement of Reliability Standard, as 
measurements for the degree to which the requirement was violated in a 
specific circumstance.
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    \17\ Order No. 705, 121 FERC ] 61,296 at P 137.
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    20. On June 19, 2008, the Commission issued an order approving the 
violation severity level assignments filed by NERC for the 83 
Reliability Standards approved in Order No. 693.\18\ In that order, the 
Commission offered four guidelines for evaluating the validity of the 
violation severity levels, and ordered a number of reports and further 
compliance filing to bring the remainder of NERC's violation severity 
levels into compliance with the Commission's guidelines. The four 
guidelines are: (1) Violation severity level assignments should not 
have the unintended consequence of lowering the current level of 
compliance; (2) violation severity level assignments should ensure 
uniformity and consistency among all approved Reliability Standards in 
the determination of penalties; (3) violation severity level 
assignments should be consistent with the corresponding requirement; 
and (4) violation severity level assignments should be based on a 
single violation, not a cumulative number of violations.\19\ The 
Commission found that these guidelines will provide a consistent and 
objective means for assessing, inter alia, the consistency, fairness 
and potential consequences of violation severity level assignments. The 
Commission noted that these guidelines were not intended to replace 
NERC's own guidance classifications, but rather, provide an additional 
level of analysis to determine the validity of violation severity level 
assignments.
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    \18\ North American Electric Reliability Corp., 123 FERC ] 
61,284 (2008) (Violation Severity Level Order). NERC had not, at 
that time, submitted violation severity levels for the FAC 
Reliability Standards at issue in this proceeding.
    \19\ Id. P 17.
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NERC Proposal
    21. NERC states that it developed a full suite of violation 
severity levels for FAC-010-2, FAC-011-2 and FAC-014-2. NERC notes that 
it developed these violation severity levels prior to the issuance of 
the Violation Severity Level Order.\20\ NERC requests that the 
Commission accept its violation severity levels for the version two FAC 
Reliability Standards even though it has not yet assessed their 
validity using the four new guidelines established in the Violation 
Severity Level Order. NERC states that it is committed to assessing the 
violation severity levels for the revised FAC Reliability Standards in 
the six-month compliance filing required by the Violation Severity 
Level Order.\21\

[[Page 63108]]

NERC did not submit violation risk factors for these version two FAC 
Reliability Standards.
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    \20\ NERC June 30, 2008 Filing, Docket No. RM07-3-000 at 5.
    \21\ Id. (citing Violation Severity Level Order, 123 FERC ] 
61,284 at P 42 (requiring NERC, within six months from the issuance 
of the Violation Severity Level Order, to conduct a review of the 
approved violation severity levels pursuant to the Commission 
guidelines, and submit a compliance filing)).
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Commission Proposal
    22. The Commission proposes to approve, with modification, NERC's 
proposed violation severity levels for FAC-010-2, FAC-011-2 and FAC-
014-2. While we appreciate that NERC assigned its proposed violation 
severity levels before the Commission established the four guidelines 
for evaluating the validity of the violation severity levels, we find 
that NERC's proposed violation severity levels would not meet our 
guidelines. We therefore propose the following modifications to the 
violation severity levels to form a complete set of violation severity 
levels in this NOPR. We note that NERC has committed to assessing the 
violation severity levels in the compliance filing required by the 
Violation Severity Level Order. Our proposals here do not preclude NERC 
from including an assessment of its FAC violation severity levels in 
its six-month evaluation, and we encourage NERC to do so. If, however, 
NERC does not include an assessment of its FAC violation severity 
levels in its six-month evaluation, the Commission proposes to direct 
the ERO to submit an assessment of the FAC violation severity levels 
within six months of the effective date of the Final Rule in this 
docket.
    23. As drafted, some of NERC's proposed violation severity levels 
do not meet the Commission's guidelines established in the Violation 
Severity Level Order. Of the violation severity levels submitted by 
NERC, FAC-010-2 Requirements R1, R3, R4 and R5; FAC-011-2 Requirement 
R4; and FAC-014-2 Requirement R5 are consistent with the Commission 
violation severity level guidelines and only minor edits are proposed 
for clarity. The Commission therefore proposes to approve modified 
violation severity levels that are consistent with our guidelines.
    24. The Commission is concerned with several of the proposed 
violation severity levels and proposes modifications. For example, as 
proposed by NERC, it is difficult to discern which conditions trigger 
which violation severity level assigned to FAC-010-2 Requirement R4. 
The Commission therefore proposes to direct the ERO to make 
modifications to clarify those conditions without changing the 
substance of the violation severity levels. The Commission also 
proposes to direct the ERO to modify the violation severity levels 
assigned to FAC-011-2 Requirement R1 to make them consistent with the 
violation severity levels proposed for FAC-010-2 Requirement R1. This 
uniformity will assist in the compliance and enforcement of these 
standards because it is logical that nearly identical requirements have 
nearly identical violation severity level structures.
    25. NERC submitted violation severity levels for Requirement R2 of 
FAC-010-2 and Requirement R2 of FAC-011-2. In Order No. 705, the 
Commission found that Requirement R2 of FAC-010-1 and Requirement R2 of 
FAC-011-1, without their sub-requirements, include no required 
performance or outcome.\22\ As such, no violation severity levels need 
to be assigned to these requirements. The Commission therefore proposes 
to delete the proposed violation severity levels for Requirement R2.
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    \22\ Order No. 705, 121 FERC ] 61,296 at P 159.
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    26. As proposed by NERC, Requirement R3 of FAC-011-2 is assigned a 
``Severe'' violation severity level if the reliability coordinator's 
methodology for determining SOLs is missing a description of three or 
more of the sub-requirements ranging from R3.1 to R3.7. At the same 
time, NERC assigns a ``High'' violation severity level if the 
reliability coordinator's methodology for determining SOLs includes a 
description for all but three sub-requirements within the same range. 
Therefore, if a reliability coordinator's methodology for determining 
SOLs is missing a description of three sub-requirements, it could be 
assigned both a ``High'' and a ``Severe'' violation severity level. To 
eliminate this overlap, the Commission proposes to direct the ERO to 
assign a ``Severe'' violation severity level to Requirement R3 of FAC-
011-2 where the reliability coordinator is missing a description of 
four or more sub-requirements R3.1 to R3.7 from its methodology for 
determining SOLs.
    27. Requirements R1 through R4 of FAC-014-2 address the development 
of SOLs and IROLs consistent with the methodologies outlined in FAC-
010-2 and FAC-011-2. NERC proposes to assign violation severity levels 
to these requirements based on a quartile division of the total number 
of inconsistencies between the assigned SOLs and the SOLs that would be 
produced using the methodologies outlined in FAC-010-2 and FAC-011-2. 
For example, NERC proposes to assign a ``Lower'' violation severity 
level where 1 to 25 percent of SOLs are inconsistent with the 
applicable entity's SOL methodology. The Commission believes that each 
time a SOL is inconsistent with the applicable entity's SOL 
methodology, it is a violation of the Reliability Standards. By 
contrast, NERC's proposed violation severity levels are based on 
multiple inconsistent SOLs. The Commission's fourth guideline for 
evaluating violation severity levels makes clear that violation 
severity level assignments should be based on a single violation, not 
on a cumulative number of violations. To remedy this deficiency, the 
Commission proposes to direct the ERO to modify its violation severity 
levels for FAC-014-02 Requirements R1 through R4 based on the 
percentage of deviation from the SOL methodology for each violation.
    28. Requirement R6 of FAC-014-2 requires the planning authority to 
identify the subset of multiple contingencies (if any), from 
Reliability Standard TPL-003 that result in stability limits. However, 
the proposed violation severity levels for Requirement R6 of FAC-014-2 
do not identify a situation where the planning authority fails to 
provide a complete subset of contingencies to the reliability 
coordinator. This omission could result in the reliability coordinator 
not having the information it needs for its situational awareness of 
exceeding SOLs and IROLs that impact the reliable operation of the 
Bulk-Power System. The Commission therefore proposes to direct the ERO 
to add the following ``Lower'' violation severity level: ``The Planning 
Authority failed to provide a complete subset of contingencies to the 
reliability coordinator in accordance with R6.'' The Commission also 
proposes to direct the ERO to reassign NERC's current ``Lower'' 
violation severity level as the new ``Moderate'' violation severity 
level to emphasize the need to notify the reliability coordinator.\23\ 
The revisions proposed here would make the violation severity level 
assignments for Requirement R6 consistent with NERC's own guidelines 
for the development of violation severity levels related to 
communication or coordination requirements.\24\
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    \23\ NERC did not propose a ``Moderate'' violation severity 
level for requirement R6.
    \24\ NERC, Violation Severity Level Guidelines Criteria, Project 
2007-23 at 19 (2008), available at: http://www.nerc.com/docs/standards/sar/VSLDT_Guidelines_Final_Draft_08Jan08.pdf. The NERC 
Guidelines indicate that a Moderate violation severity level should 
be selected when the responsible entity's coordination/communication 
is non-compliant with respect to at least one significant element 
within the requirement. In this case, the significant element is the 
failure to notify the Reliability Coordinator.
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    29. The Commission has directed NERC to develop violation severity 
levels for each requirement and sub-requirement of each Reliability

[[Page 63109]]

Standard.\25\ NERC did not propose any violation severity level 
assignments for sub-requirements. The Commission therefore proposes to 
direct the ERO to assign binary violation severity levels for all of 
the proposed sub-requirements.\26\ In Order No. 705, the Commission 
found that the binary approach is appropriate for certain violation 
severity level assignments.\27\ In this instance, the binary approach 
is appropriate because the violation severity level of the base 
requirement is established by whether a sub-requirement is violated or 
not, not to what extent a sub-requirement is violated. Thus, the 
proposed binary requirements satisfy guideline three, which calls for 
consistency between the violation severity level assignments and their 
corresponding requirements. For example, FAC-010-2 Requirement R1.1 
states that the planning authority's SOL methodology shall ``[b]e 
applicable for developing SOLs used in the planning horizon.'' \28\ 
NERC did not propose any violation severity levels for this sub-
requirement, therefore the Commission proposes a binary severe 
violation severity level that would be triggered when the planning 
authority SOL methodology is not applicable for developing SOLs in the 
planning horizon. This binary approach for sub-requirements provides 
clear criteria to determine a violation of the sub-requirement. The 
Commission took a similar approach to the sub-requirements applicable 
to the WECC regional differences.
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    \25\ North American Electric Reliability Corp., 119 FERC ] 
61,248, order on clarification, 120 FERC ] 61,239 (2007).
    \26\ Binary requirements of Reliability Standards define 
compliance in terms of ``pass'' or ``fail.''
    \27\ Order No. 705, 121 FERC ] 61,296 at P 24.
    \28\ NERC June 30, 2008 Filing, Docket No. RM07-3-000 ex. A.
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    30. The complete set of the Commission's proposals is included in 
Attachment A to this order. The Commission proposes to direct the ERO 
to file the revised violation severity levels within 30 days of the 
Final Rule in this proceeding.
    31. Finally, the Commission notes that NERC did not submit 
violation risk factors for the version two FAC Reliability Standards. 
In Order No. 705, the Commission approved the majority of NERC's 
proposed violation risk factors for the version one FAC Reliability 
Standards.\29\ On April 1, 2008, NERC filed revised violation risk 
factors for the version one FAC Reliability Standards. These were 
accepted by delegated authority on May 29, 2008. The Commission 
proposes to direct the ERO to apply those same violation risk factors 
to the version two FAC Reliability Standards approved in the Final Rule 
in this proceeding.
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    \29\ Order No. 705, 121 FERC ] 61,296 at P 137.
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E. Western Interconnection Regional Differences

    32. Although NERC submitted requirements for FAC-010-2 and FAC-011-
2 that address the Western Interconnection regional difference, NERC 
did not submit violation severity levels or violation risk factors for 
these requirements. In Order No. 705, the Commission approved version 
one of the FAC Reliability Standards and directed WECC to develop and 
submit violation risk factors and violation severity levels that are 
applicable to the Western Interconnection regional difference.\30\ The 
Commission directed WECC to file its violation risk factors and 
violation severity levels no later than the effective date of the 
applicable Reliability Standard. FAC-010-1 became effective on July 1, 
2008 and FAC-011-1 will become effective on October 1, 2008. To remedy 
this deficiency, the Commission offers proposed modifications to the 
violation severity level assignments assigned to FAC-010-2 and FAC-011-
2 that address the Western Interconnection regional differences. The 
Commission's proposed modifications are included in Attachment A to 
this order. Consistent with our decision in Order No. 705, the 
Commission proposes to direct WECC to apply the NERC violation risk 
factors to the Western Interconnection regional difference until after 
WECC develops its own and they are approved by the ERO and the 
Commission.\31\ We note that WECC is still obligated to comply with the 
Commission's directives in Order No. 705 to file violation risk factors 
and violation severity levels addressing the Western Interconnection 
regional difference.
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    \30\ Id. P 146.
    \31\ Id.
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III. Information Collection Statement

    33. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping (collections of 
information) imposed by an agency.\32\ The information contained here 
is also subject to review under section 3507(d) of the Paperwork 
Reduction Act of 1995.\33\ As stated above, the Commission previously 
approved, in Order No. 705, each of the Reliability Standards that are 
the subject of the current rulemaking. The modifications to the 
Reliability Standards are minor; therefore, they do not add to or 
increase entities' reporting burden. Thus, the modified Reliability 
Standards do not materially affect the burden estimates relating to the 
earlier version of the Reliability Standards presented in Order No. 
705.
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    \32\ 5 CFR 1320.11.
    \33\ 44 U.S.C. 3507(d).
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    Title: Version Two Facilities Design, Connections and Maintenance 
Reliability Standards.
    Action: Proposed Collection.
    OMB Control No.:
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This NOPR proposes to approve three 
modified Reliability Standards that pertain to facilities design, 
connections and maintenance. The Reliability Standards will require 
planning authorities and reliability coordinators to establish 
methodologies to determine system operating limits (SOLs) for the Bulk-
Power System in the planning and operation horizons. This NOPR proposes 
to find the Reliability Standards and interpretations just, reasonable, 
not unduly discriminatory or preferential, and in the public interest.
    34. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, Attn: 
Michael Miller, Office of the Executive Director, 888 First Street, NE. 
Washington, DC 20426, Tel: (202) 502-8415, Fax: (202) 273-0873, e-mail: 
[email protected], or by contacting: Office of Information and 
Regulatory Affairs, Attn: Desk Officer for the Federal Energy 
Regulatory Commission (Re: OMB Control No. 1902-0244), Washington, DC 
20503, Tel: (202) 395-4650, Fax: (202) 395-7285, e-mail: [email protected].

IV. Environmental Analysis

    35. 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.\34\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not

[[Page 63110]]

substantially change the effect of the regulations being amended.\35\ 
The actions proposed herein fall within this categorical exclusion in 
the Commission's regulations.
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    \34\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \35\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act

    36. The Regulatory Flexibility Act of 1980 (RFA) \36\ generally 
requires a description and analysis of final rules that will have a 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's Office of Size Standards 
develops the numerical definition of a small business. (See 13 CFR 
121.201). For electric utilities, a firm is small if, including 
affiliates, it is primarily engaged in the transmission, generation 
and/or distribution of electric energy for sale and its total electric 
output for the preceding twelve months did not exceed four million 
megawatt hours. The RFA is not implicated by this Final Rule because 
the minor modifications and interpretations discussed herein will not 
have a significant economic impact on a substantial number of small 
entities.
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    \36\ 5 U.S.C. 601-12.
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VI. Comment Processing

    37. 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 November 24, 2008. Comments must refer to 
Docket No. RM08-11-000, and must include the commenters' name, the 
organization they represent, if applicable, and their address in their 
comments.
    38. 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 the native application or print-to-PDF 
format and not in a scanned format. Commenters filing electronically 
should not make a paper filing. Service of rulemaking comments is not 
required.
    39. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426.
    40. All Comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    41. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    42. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The Full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    43. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours. For assistance, please contact 
the Commission's Online Support at 1-866-208-3676 (toll free) or (202) 
502-6652 (e-mail at [email protected]), or the Public 
Reference Room at (202) 502-8371, TTY (202) 502-8659 (e-mail at 
[email protected]).

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E8-25051 Filed 10-22-08; 8:45 am]
BILLING CODE 6717-01-P