[Federal Register Volume 74, Number 101 (Thursday, May 28, 2009)]
[Rules and Regulations]
[Pages 25422-25429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12351]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM08-12-000; Order No.723]


Western Electricity Coordinating Council Regional Reliability 
Standard Regarding Automatic Time Error Correction

Issued May 21, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the 
Federal Energy Regulatory Commission (Commission) approves regional 
Reliability Standard BAL-004-WECC-01 (Automatic Time Error Correction), 
as submitted by the North American Electric Reliability Corporation. As 
a separate action, pursuant to section 215(d)(5) of the FPA, the 
Commission directs the Western Electricity Coordinating Council to 
develop several modifications to the regional Reliability Standard. The 
regional Reliability Standard requires balancing authorities within the 
Western Interconnection to maintain interconnection frequency within a 
predefined frequency profile and ensure that time error corrections are 
effectively conducted in a manner that does not adversely affect the 
reliability of the Interconnection.

[[Page 25423]]


DATES: Effective Date: This rule will become effective June 29, 2009.

FOR FURTHER INFORMATION CONTACT:

Jonathan First (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426. (202) 502-8529.
Katherine Waldbauer (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426. (202) 502-8232. [email protected].
Nick Henery (Technical Information), Office of Electric Reliability, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8636. [email protected].

SUPPLEMENTARY INFORMATION:

Order No. 723

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
I. Background...............................................          4.
    A. Mandatory Reliability Standards......................          4.
    B. Procedural Background................................         11.
    C. Reliability Standard BAL-004-WECC-01.................         14.
II. Discussion..............................................         22.
    A. Requirement R1.2.....................................         27.
    B. Explanation of 24-Hour Exemption Period of                    31.
     Requirement R2.........................................
    C. New Glossary Definitions.............................         35.
    D. Consistency With NERC Reliability Standards..........         41.
    E. Violation Risk Factors...............................         49.
    F. Violation Severity Levels............................         52.
III. Information Collection Statement.......................         55.
IV. Environmental Analysis..................................         60.
V. Regulatory Flexibility Act...............................         61.
VI. Document Availability...................................         64.
VII. Effective Date and Congressional Notification..........         67.
 

    Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly, 
Marc Spitzer, and Philip D. Moeller.

Order No. 723

Final Rule

Issued May 21, 2009

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves regional Reliability Standard BAL-004-WECC-01 
(Automatic Time Error Correction), submitted to the Commission for 
approval by the North American Electric Reliability Corporation (NERC). 
As a separate action, pursuant to section 215(d)(5) of the FPA, the 
Commission directs the Western Electricity Coordinating Council (WECC) 
to develop several modifications to the regional Reliability Standard. 
The regional Reliability Standard requires balancing authorities within 
the WECC region to implement an automatic time error correction 
procedure for the purpose of maintaining Interconnection frequency 
within a predefined frequency profile and ensuring that time error 
corrections are effectively conducted in a manner that does not 
adversely affect reliability.\2\
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    \1\ 16 U.S.C. 824o (2006).
    \2\ The proposed regional Reliability Standard will be in effect 
within the Western Interconnection-wide WECC Regional Entity. In 
this proceeding, the Commission proposes to take action to make 
mandatory the regional Reliability Standard as it applies within the 
U.S. portion of the Western Interconnection.
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    2. The Reliability Standard benefits the reliable operation of the 
Bulk-Power System by creating an operating environment that encourages 
system operators to balance their generation and interchange with their 
load and losses, thereby minimizing the difference between the net 
actual and net scheduled interchanges. This process will result in 
reducing the number of manual time error corrections required by the 
Western Interconnection Time Monitor, and minimize accumulated 
inadvertent interchange energy between Western Interconnection 
balancing authorities.\3\ The Commission also accepts three related 
definitions that are included in the regional Reliability Standard. The 
Commission further approves the violation risk factors for the regional 
Reliability Standard, and directs the Electric Reliability Organization 
(ERO) and WECC to submit revised violation risk factors in a filing 
within 60 days of the effective date of this Final Rule. The Commission 
also directs the ERO and WECC to submit violation severity levels for 
each Requirement and sub-Requirement that has been assigned a violation 
risk factor within 120 days of the effective date of this Final Rule.
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    \3\ Mismatches between generation and interchange and load and 
losses result in the Balancing Area operating at frequencies other 
than 60 Hertz, which causes both time error and inadvertent 
interchange.
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    3. As discussed below, the Commission finds that the regional 
Reliability Standard proposed by WECC satisfies the statutory criteria, 
and is more stringent than the applicable continent-wide NERC 
Reliability Standard.

I. Background

A. Mandatory Reliability Standards

    4. 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.\4\
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    \4\ See FPA 215(e)(3), 16 U.S.C. 824o(e)(3).
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    5. In February 2006, the Commission issued Order No. 672,\5\ 
implementing section 215 of the FPA. Pursuant to Order No. 672, the 
Commission certified one organization, NERC, as the ERO.\6\ Reliability 
Standards that the ERO proposes to the Commission may include 
Reliability Standards that are proposed to the ERO by a Regional 
Entity.\7\ When the ERO reviews a regional Reliability Standard that 
would be applicable on an Interconnection-wide basis and that has been 
proposed by a Regional Entity organized on an Interconnection-wide 
basis, the ERO

[[Page 25424]]

must rebuttably presume that the regional Reliability Standard is just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest.\8\
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    \5\ 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 (2006), order on reh'g, Order No. 672-A, 
FERC Stats. & Regs. ] 31,212 (2006).
    \6\ See North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006).
    \7\ 16 U.S.C. 824o(e)(4).
    \8\ 16 U.S.C. 824o(d)(3); 18 CFR 39.5(b).
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    6. In reviewing the ERO's submission, the Commission will give due 
weight to the ERO's technical expertise, except concerning the effect 
of a proposed Reliability Standard on competition.\9\ The Commission 
will also give due weight to the technical expertise of a Regional 
Entity organized on an Interconnection-wide basis with respect to a 
proposed Reliability Standard to be applicable within that 
Interconnection.\10\
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    \9\ 16 U.S.C. 824o(d)(2).
    \10\ Id.
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    7. The Commission may approve a proposed Reliability Standard if 
the Commission finds it is just, reasonable, not unduly discriminatory 
or preferential, and in the public interest.\11\ In addition, the 
Commission explained in Order No. 672 that ``uniformity of Reliability 
Standards should be the goal and the practice, the rule rather than the 
exception.'' \12\ Yet, the Commission recognized that ``the goal of 
greater uniformity does not, however, mean that regional differences 
cannot exist.'' \13\ The Commission then provided the following 
guidance:
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    \11\ Id.
    \12\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 290.
    \13\ Id. P 291.

    As a general matter, we will accept the following two types of 
regional differences, provided they are otherwise just, reasonable, 
not unduly discriminatory or preferential, and in the public 
interest, as required by the statute: (1) A regional difference that 
is more stringent than the continent-wide Reliability Standard, 
including a regional difference that addresses matters that the 
continent-wide Reliability Standard does not; and (2) a regional 
Reliability Standard that is necessitated by a physical difference 
in the Bulk-Power System.\14\
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    \14\ Id.

    8. On March 16, 2007, the Commission issued Order No. 693, 
approving 83 of the 107 Reliability Standards originally proposed by 
NERC.\15\ In addition, pursuant to section 215(d)(5) of the FPA, the 
Commission directed NERC to develop modifications to 56 of the 83 
approved Reliability Standards.\16\ Relevant to the immediate 
proceeding, the Commission approved continent-wide Reliability Standard 
BAL-004-0 (Time Error Correction), but noted that WECC's regional 
approach appears to serve as a more effective means of accomplishing 
time error corrections.\17\
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    \15\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order 
No. 693-A, 120 FERC ] 61,053 (2007).
    \16\ 16 U.S.C. 824o(d)(5). Section 215(d)(5) provides, ``The 
Commission * * * may order the Electric Reliability Organization to 
submit to the Commission a proposed reliability standard or a 
modification to a reliability standard that addresses a specific 
matter if the Commission considers such a new or modified 
reliability standard appropriate to carry out this section.''
    \17\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 377, 382. 
The Commission also directed NERC to develop a modification to BAL-
004-0 to include Levels of Non-Compliance and additional Measures 
for Requirement R3.
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    9. On April 19, 2007, the Commission approved delegation agreements 
between NERC and each of the eight Regional Entities, including 
WECC.\18\ Pursuant to such agreements, the ERO delegated responsibility 
to the Regional Entities to enforce the mandatory, Commission-approved 
Reliability Standards. In addition, the Commission approved, as part of 
each delegation agreement, a Regional Entity process for developing 
regional Reliability Standards. In the Delegation Agreement Order, the 
Commission accepted WECC as a Regional Entity organized on an 
Interconnection-wide basis and accepted WECC's Standards Development 
Manual, which sets forth the process for development of WECC's 
Reliability Standards.\19\
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    \18\ See North American Electric Reliability Corp., 119 FERC ] 
61,060, order on reh'g, 120 FERC ] 61,260 (2007) (Delegation 
Agreement Order).
    \19\ Id. P 469-470.
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    10. In a June 2007 order, the Commission approved eight regional 
Reliability Standards that apply in the WECC region.\20\
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    \20\ North American Electric Reliability Corp., 119 FERC ] 
61,260 (2007).
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B. Procedural Background

    11. On July 29, 2008, NERC submitted for Commission approval, in 
accordance with section 215(d)(1) of the FPA,\21\ regional Reliability 
Standard BAL-004-WECC-01, which would apply to balancing authorities 
within the Western Interconnection. NERC stated that the primary 
purpose of the regional Reliability Standard is to reduce the number of 
time error corrections imposed on the Western Interconnection by 
requiring balancing authorities that operate synchronously in the 
Western Interconnection to automatically correct for their contribution 
to time error. According to NERC, BAL-004-WECC-01 provides the added 
benefit of a superior approach over the current NERC manual time error 
correction (BAL-004-0) for assigning costs and providing for the 
equitable payback of inadvertent interchange.\22\
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    \21\ 16 U.S.C. 824o(d)(1) (2006).
    \22\ The NERC glossary defines ``interchange'' as the energy 
transfers that cross balancing authority boundaries, and defines 
``inadvertent interchange'' as the difference between the balancing 
authority's net actual interchange and its net scheduled 
interchange. Within a synchronous Interconnection, during real-time 
operations, a balancing authority may engage in ``inadvertent 
interchange'' if it experiences an operational problem that prevents 
its net actual interchange of energy from matching its net scheduled 
interchange with other balancing authorities within the 
Interconnection. This discrepancy will indicate what is referred to 
as a ``time error''--i.e., because the Interconnection will operate 
at a frequency (number of cycles per second) that is different from 
the Interconnection's scheduled frequency of 60 Hz (60 cycles per 
second). Time error also serves as a means to measure of how much 
and which balancing authority within the Interconnection is out of 
balance. To correct the time error using the Automatic Time Error 
Correction (ATEC) method, it is necessary for the balancing 
authority that was out of balance to adjust the Interconnection's 
frequency so that it equalizes its prior inadvertent energy exchange 
with the Interconnection.
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    12. On November 20, 2008, the Commission issued a Notice of 
Proposed Rulemaking (NOPR) that proposed to approve BAL-004-WECC-
01.\23\ In response, four interested persons filed comments: NERC, 
WECC, Consumers Energy Company (Consumers) and Xcel Energy Services Inc 
(Xcel).
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    \23\ Western Electricity Coordinating Council Regional 
Reliability Standard Regarding Automatic Time Error Correction, 
Notice of Proposed Rulemaking, 73 FR 71977 (Nov. 26, 2008), FERC 
Stats. & Regs. ] 32,638 (2008).
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    13. In its July 2008 filing, NERC stated that Automatic Time Error 
Correction or ATEC has been a regional reliability practice in WECC, 
effectively reducing manual time error corrections, reducing the number 
of hours of manual time error correction for the Western 
Interconnection, and reducing the accumulated inadvertent interchange 
in the Western Interconnection since 2003. NERC asserted that the 
proposed WECC regional Reliability Standard is more stringent or covers 
matters not addressed by NERC's continent-wide Reliability Standards, 
BAL-004-0 and BAL-006-1 (Inadvertent Interchange).

C. Reliability Standard BAL-004-WECC-01

    14. Regional Reliability Standard BAL-004-WECC-01 contains four 
requirements, summarized as follows:
    15. Requirement R1. Requires that all balancing authorities must 
continuously participate in Automatic Time Error Correction through 
their automatic generation control systems. The sub-requirement (R1.1) 
limits the payback amount to minimize any operating metric violations, 
while R1.2 addresses actions for cases when invalidated implementation 
of the ATEC

[[Page 25425]]

methodology occurs and requires adjustments.
    16. Requirement R2. Requires a balancing authority that operates in 
any automatic generation control operating mode other than ATEC to 
notify all other balancing authorities of its operating mode. This 
requirement is necessary to ensure the reliable operations of the 
Western Interconnection by creating an operating environment that 
encourages the Balancing Authorities to minimize the difference between 
the net actual and net scheduled interchanges. To avoid large 
accumulation of inadvertent interchanges, Requirement R2 limits a 
balancing authority's use of operating modes other than ATEC to a 
maximum of 24 hours per calendar quarter.
    17. Requirement R3. Requires balancing authorities to have the 
capability to switch between different automatic generation control 
operating modes as necessary to operate reliably during various system 
conditions.
    18. Requirement R4. Requires each balancing authority to calculate 
and record its hourly ``Primary Inadvertent Interchange'' when hourly 
checkout is complete.
    19. The WECC regional Reliability Standard also introduces the 
following three new definitions:
    Automatic Time Error Correction: A frequency control automatic 
action that a Balancing Authority uses to offset its frequency 
contribution to support the Interconnection's scheduled frequency.
    Primary Inadvertent Interchange: The component of area (n) 
inadvertent interchange caused by the regulating deficiencies of area 
(n) itself.
    Secondary Inadvertent Interchange: The component of area (n) 
inadvertent interchange caused by the regulating deficiencies of area 
(i).
    20. In its July 2008 filing, NERC asserted that the ATEC procedure 
provided in the proposed regional Reliability Standard has been 
effective in mitigating three problems relating to correction of time 
errors in the Western Interconnection. First, the ATEC procedure has 
reduced the need for the WECC Time Monitor to conduct manual time error 
corrections from 216 manual time error corrections in 2003 to 106 
manual time error corrections in 2007. Second, since time error is 
directly related to inadvertent interchange, the ATEC procedure reduces 
both time error and accumulated inadvertent interchange. Third, 
according to NERC, the ATEC procedure better identifies the balancing 
authorities responsible for inadvertent interchange and provides a more 
equitable and immediate payback of the inadvertent interchange to the 
balancing authorities that should receive it (i.e., the balancing 
authorities that did not cause the inadvertent interchange but 
supported the interconnection's scheduled frequency) than the current 
NERC time error correction process in BAL-004-0.
    21. NERC also stated that the proposed regional Reliability 
Standard satisfies the factors provided in Order No. 672 that the 
Commission considers when determining whether a proposed Reliability 
Standard is just, reasonable, not unduly discriminatory or preferential 
and in the public interest.\24\ According to NERC, BAL-004-WECC-01 is 
clear and unambiguous regarding what is required and who is required to 
comply (balancing authorities). NERC also stated that the proposed 
regional Reliability Standard has clear and objective measures for 
compliance and achieves a reliability goal (namely, creating an 
operating environment that encourages system operators to minimize the 
difference between the net actual and net scheduled interchanges, and 
to better control frequency) effectively and efficiently.
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    \24\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 323-337.
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II. Discussion

    22. Pursuant to section 215(d) of the FPA, the Commission approves 
regional Reliability Standard BAL-004-WECC-01 as mandatory and 
enforceable.
    23. Pursuant to the continent-wide NERC Reliability Standard BAL-
004-1, when accumulated time error increases to a predetermined level, 
the Interconnection's Time Monitor instructs all balancing authorities 
in the Interconnection to manually change the scheduled 
Interconnection's frequency until the Interconnection's accumulated 
time error has been reduced to a set level. However, the requirements 
of BAL-004-1 do not require each balancing authority to determine what 
portion of the Interconnection's time error that it alone caused.
    24. Under the WECC ATEC methodology, each balancing authority in 
the Western Interconnection is required to calculate its ``primary 
inadvertent interchange'' \25\ and enter its ``primary inadvertent 
interchange'' into its Area Control Error (ACE) \26\ equation. When all 
balancing authorities input their portion of ``primary inadvertent 
interchange'' into their ACE equation, they continuously correct for 
their own ``primary time error'' and, in turn, reduce the Western 
Interconnection's total time error.
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    \25\ The balancing authority causing the frequency error is said 
to have created ``primary time error'' and caused ``primary 
inadvertent interchange.'' The other balancing authorities in the 
Interconnection responding to correct system frequency are said to 
have created ``secondary time error'' and caused ``secondary 
inadvertent interchange.''
    \26\ ACE is the instantaneous difference between a Balancing 
Authority's net actual and scheduled interchange, taking into 
account the effects of Frequency Bias and correction for meter error 
(NERC glossary of terms used in reliability standards, http://www.nerc.com/docs/standards/rs/Glossary_2009April20.pdf, at 1). 
More specifically: ACE = (NIA - NIS)-
10[beta]i(FA - FS)-T0b + 
IME (Requirement R1 of Commission Approved Standard BAL-
001-0.1a, see http://www.nerc.com/docs/standards/sar/Interpretation_WECC_ATEC_BAL-001and003_BOT-Approved_23Oct07.pdf).
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    25. This process differs from the methodology used in NERC's BAL-
004-1, in that ATEC is designed to place the responsibility to correct 
primary time error on the balancing authority that causes it. Further, 
the regional Reliability Standard is more stringent and covers matters 
not addressed by the related continent-wide NERC Reliability Standards 
BAL-004-0 and BAL-006-1. The regional Reliability Standard provides for 
automatic correction of time error, using a more refined primary 
inadvertent interchange term than that included in the continent-wide 
NERC Reliability Standards for manual correction of time error.\27\ 
Accordingly, the Commission finds that the regional Reliability 
Standard proposed by WECC is more stringent than the continent-wide 
NERC Reliability Standard, because it provides for continuous capture 
of inadvertent interchange, and thereby (1) contributes to better 
operation of balancing authorities by operators, and (2) ensures that 
discrepancies between a balancing area's net scheduled interchange and 
its net actual interchange are adjusted more quickly and accurately. 
Pursuant to section 215(d) of the FPA, the Commission approves BAL-004-
WECC-01 as just, reasonable, not unduly discriminatory or preferential 
and in the public interest.
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    \27\ NERC filing at 10.
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    26. As a separate matter, pursuant to section 215(d)(5) of the FPA, 
the Commission directs WECC to develop, pursuant to its regional 
Reliability Standards Development Procedure, modifications to BAL-004-
WECC-01 to address the Commission's specific concerns, as discussed 
below. Further, the Commission approves some of the proposed violation 
risk factors and violation severity levels, and directs the ERO to 
submit a filing within 60 days of the effective date of this Final Rule 
revising other specified violation risk factors and another filing 
within 120 days of the effective date of this Final Rule providing 
violation severity levels

[[Page 25426]]

for each Requirement and sub-Requirement that has been assigned a 
violation risk factor.

A. Requirement R1.2

    27. Requirement R1.2 of BAL-004-WECC-01 provides in part, ``[l]arge 
accumulations of primary inadvertent [energy] point to an invalid 
implementation of ATEC, loose control, metering or accounting errors. A 
[balancing authority] in such a situation should identify the source of 
the error(s) and make the corrections.'' In the NOPR, the Commission 
noted that the phrases ``large accumulation'' and ``in such a 
situation'' are not defined and, while likely obvious in many 
circumstances, leaves to individual interpretation when a ``large'' 
amount of primary inadvertent has accumulated.\28\ The Commission 
proposed to direct WECC to develop revisions to the provision so that a 
balancing authority will know with specificity the circumstances that 
trigger the actions required by Requirement R1.2.
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    \28\ NOPR at P 36.
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1. Comments
    28. WECC acknowledges the Commission's concern that the undefined 
phrases ``large accumulation'' and ``in such a situation'' in 
Requirement R1.2 could lead to uncertainty among Balancing Authorities 
as to when they are required to take action. WECC comments that, while 
these terms have a general industry understanding within the Western 
Interconnection, clarifying these terms would remove the potential for 
controversy over compliance requirements. WECC suggests either defining 
the terms within the regional Reliability Standard or modifying the 
standard language to better identify specific parameters that would 
trigger actions required under this standard.
    29. NERC agrees that further clarity of the identified phrases in 
Requirement R1.2 is appropriate and believes WECC's proposal in its 
comments is responsive.
2. Commission Determination
    30. As we explained in the NOPR, the Commission is concerned that 
the phrases ``large accumulation'' and ``in such a situation'' as used 
in Requirement R1.2 leave to individual interpretation when a ``large'' 
amount of primary inadvertent has accumulated. The ERO and WECC agree 
that the provision could benefit from further clarity. Accordingly, the 
Commission adopts its NOPR proposal and directs WECC to develop 
revisions to the provision so that a balancing authority will know with 
specificity the circumstances that trigger the actions required by 
Requirement R1.2.

B. Explanation of 24-Hour Exemption Period of Requirement R2

    31. Requirement R2 of BAL-004-WECC-01 provides that ``[e]ach 
[balancing authority] while synchronously connected to the Western 
Interconnection will be allowed to have ATEC out of service for a 
maximum of 24 hours per calendar quarter, for reasons including 
maintenance and testing.'' In the NOPR, the Commission proposed to 
direct WECC to develop a modification that clarifies whether the 
``maximum of 24 hours per calendar quarter'' refers to a single 
occurrence of up to 24 hours in the calendar quarter, or whether 
several occurrences are permitted as long as they add up to 24 hours or 
less within a calendar quarter.\29\
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    \29\ NOPR at P 37.
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1. Comments
    32. WECC comments that it intended the 24-hour per calendar quarter 
limit to permit an accumulated total of up to 24 hours, whether 
resulting from one extended occurrence or multiple occurrences. 
Likewise, NERC understands that WECC intended the provision to permit 
an accumulated total of up to 24 hours from one or more occurrences.
    33. WECC and NERC agree the proposed NOPR modifications will leave 
the regional Reliability Standard more definite and can be addressed 
through WECC's stakeholder process.
2. Commission Determination
    34. Consistent with the NOPR, pursuant to section 215(d)(5) of the 
FPA, the Commission directs WECC to develop a modification to the 
regional Reliability Standard consistent with WECC's and NERC's 
explanation that the limit set forth in Requirement 2 of ``24 hours per 
calendar quarter'' is an accumulated total for the period, resulting 
from either a singular event or a cumulative time limit from a number 
of events.

C. New Glossary Definitions

    35. As mentioned above, the WECC regional Reliability Standard 
includes three new definitions: Automatic Time Error Correction, 
Primary Inadvertent Interchange and Secondary Inadvertent Interchange. 
In the NOPR, the Commission proposed to approve the three new 
terms.\30\
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    \30\ NOPR at P 26. While the Commission discussed the proposed 
definitions in several places in the NOPR, in one instance the 
Commission stated that it proposed to ``accept three related 
definitions for inclusion in the NERC Reliability Standards Glossary 
(NERC glossary).'' Id. P 2. In other instances, the Commission 
simply stated that it proposed to approve the definitions. Id. P 26, 
34.
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1. Comments
    36. Consumers expresses concern regarding the incorporation of 
three newly defined terms (Automatic Time Error Correction, Primary 
Inadvertent Interchange and Secondary Inadvertent Interchange) into the 
NERC glossary. Consumers states that it is appropriate for the three 
new definitions to apply to WECC regional Reliability Standards. 
However, according to Consumers, the definitions have not been vetted 
through NERC's full development process for their inclusion in the NERC 
glossary, applicable to NERC Reliability Standards that apply on a 
continent-wide basis. Specifically, Consumers points out that NERC's 
Rules of Procedure provide that all definitions must be approved in 
accordance with the standards process.\31\ Consumers recommends that 
the Commission either clearly designate the proposed definitions as 
being applicable only to WECC regional Reliability Standards or direct 
NERC to submit the proposed definitions for stakeholder review as part 
of the NERC Reliability Standards development process.
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    \31\ Consumers Comments at 4, citing NERC Rules of Procedure, 
section 300 and Appendix 3A (NERC Reliability Standards Development 
Procedure) at 8.
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2. Commission Determination
    37. The Commission agrees with Consumers that the three new 
definitions have not been vetted through the ERO's full development 
process for their inclusion in the NERC glossary; and that the three 
new definitions approved in this Final Rule apply only to WECC regional 
Reliability Standards. NERC should designate them accordingly. 
Therefore, to ensure that all approved definitions, NERC and regional, 
are maintained in a single location, NERC should add or append the 
three new regional definitions to the NERC Glossary of Terms in such a 
way as to designate that they apply only in the Western 
Interconnection.
    38. The Commission, however, has a general concern regarding the 
development of definitions that apply only to regional Reliability 
Standards. The Commission understands that, prior to NERC's development 
of the ``Version 0'' Reliability Standards, there were multiple 
regional standards and protocols, with each region having its own 
definitions of terms. In some instances, the same or similar terms were 
defined differently within different

[[Page 25427]]

regions. The Version 0 process included developing the NERC glossary, 
which eliminated many inconsistencies in terminology across regions and 
created a single source for defining terms used in Reliability 
Standards.
    39. We are concerned about a potential re-proliferation of regional 
terminology, and consequently, the need to prevent possible 
inconsistent use of terminology among regions. While NERC has only 
submitted WECC regional Reliability Standards to the Commission at this 
time, other regions are in the process of developing regional 
standards. Similar to our policy set forth in Order No. 672 that favors 
the development of uniform Reliability Standards,\32\ the Commission 
believes NERC, as a rule, should develop definitions that apply 
uniformly across the different interconnections. As a general goal, 
NERC should work to minimize the use of regional definitions and 
terminology and, assure that proposed regional definitions and 
terminology are as well defined as, do not conflict and are not 
redundant with nor redefine, NERC glossary definitions. We therefore 
direct NERC to develop in its Rules of Procedure, a methodology for 
organizing and managing regional definitions and terminology consistent 
with the principles discussed above.
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    \32\ Order No. 672, FERC Stats. & Regs. ] 31,204 at P 290 (``The 
Commission believes that uniformity of Reliability Standards should 
be the goal and the practice, the rule rather than the exception. 
Greater uniformity will encourage best practices, thereby enhancing 
reliability and benefiting consumers and the economy'').
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    40. Further, NERC should be vigilant to assure that a regional 
definition is consistent with both NERC definitions and the approved 
terms used in other regions. The Commission considers an inconsistency 
or conflict in terms to be reasonable grounds to remand a regional 
definition and, if appropriate, the regional Reliability Standard that 
employs that definition.

D. Consistency With NERC Reliability Standards

1. Comments
    41. Xcel comments that, while it generally supports the adoption of 
BAL-004-WECC-01, it is concerned that the regional Reliability Standard 
creates a potential conflict with two NERC Reliability Standards, BAL-
001-0a (Real Power Balancing Control Performance) and BAL-002-0 
(Disturbance Control Performance). Xcel requests that the Commission 
establish priority for compliance in the event that WECC regional 
Reliability Standards conflict with those of NERC. Xcel's concern 
involves the difference in the ACE equation between the regional and 
the NERC Reliability Standards and the compliance elements regarding 
this equation.
    42. Xcel states that BAL-001-0a requires that ACE be kept within 
specific parameters, while BAL-004-WECC-01 requires a measurement of 
ACE that is outside those parameters to be maintained at all times. 
According to Xcel, BAL-004-WECC-01 requires ATEC operation at all times 
except up to 24 hours per calendar quarter, but is not clear if this 
period covers times when complying with BAL-001-0a requires non-
compliance with BAL-004-WECC-01. Xcel notes that Requirement R3 of BAL-
004-WECC-01 requires the ACE used for NERC reports to be the same as 
the ACE used in the current AGC operating mode. According to Xcel, this 
requires the use of the ACEATEC set forth in BAL-004-WECC-01 
rather than the BAL-001-0a ACE equation in most situations.
    43. Xcel claims that BAL-004-WECC-01 may also conflict with BAL-
002-0 Requirement R4.2, which requires that the balancing authority 
restore ACE to specified parameters within a defined timeframe. Xcel 
posits that in most situations it will be impossible for an entity 
attempting to recover from a disturbance to operate at an ACE 
calculated in accordance with the NERC standard and ACEATEC 
simultaneously. According to Xcel, the use of the BAL-004-WECC-01, 
Requirement R2 exception, allowing ATEC to be out of service for 24 
hours per calendar quarter, should be acceptable for alleviating this 
circumstance. Xcel contends that, where the 24-hour maximum is exceeded 
for the purpose of ACE complying with BAL-002-0, the balancing 
authority should be given express authority to deviate from the 
requirements of BAL-004-WECC-01.
2. Commission Determination
    44. We are not persuaded by Xcel's comments on this matter. We 
believe that our approval, in Order No. 713,\33\ of an ERO 
interpretation addresses Xcel's concern. Specifically, WECC requested 
that the ERO provide a formal interpretation whether the use of WECC's 
automatic time error correction factor that is applied to the net 
interchange portion of the ACE equation violates Requirement R1 of NERC 
Reliability Standard BAL-001-0a. In response, the ERO interpreted BAL-
001-0 Requirement R1 as follows:
---------------------------------------------------------------------------

    \33\ Modification of Interchange and Transmission Loading Relief 
Reliability Standards; and electric Reliability Organization 
Interpretation of specific Requirements of Four Reliability 
Standards, Order No. 713, 73 FR 43613, 124 FERC ] 61,071 (July 21, 
2008).
---------------------------------------------------------------------------

     The [WECC automatic time error correction or WATEC] 
procedural documents ask Balancing Authorities to maintain raw ACE for 
[control performance standard or CPS1 \34\] reporting and to control 
via WATEC-adjusted ACE.
---------------------------------------------------------------------------

    \34\ The Control Performance Standard (CPS) is defined in the 
NERC Glossary as ``[t]he reliability standard that sets the limits 
of a Balancing Authority's Area Control Error over a specified time 
period.''
---------------------------------------------------------------------------

     As long as Balancing Authorities use raw (unadjusted for 
WATEC) ACE for CPS reporting purposes, the use of WATEC for control is 
not in violation of BAL-001 Requirement 1.\35\
---------------------------------------------------------------------------

    \35\ Order No. 713, 124 FERC ] 61,071 at P 17.
---------------------------------------------------------------------------

    45. The Commission-approved interpretation makes clear that a 
balancing authority is in compliance with BAL-001-1a provided that it 
uses the equation identified in R1 for reporting CPS1 and achieves the 
performance required by CPS1. The balancing authority's ability to use 
the ACE calculation also to assist in time error correction and 
inadvertent interchange payback is not precluded.
    46. Further, the Commission is not persuaded by Xcel's claims that 
BAL-004-WECC-01 may also conflict with BAL-002-0, Requirement R4.2, 
which requires that the balancing authority restore ACE to specified 
parameters within a defined timeframe. Requirements R2 and R3 of 
Standard BAL-004-WECC-0 direct that ATEC will be the primary operating 
mode used by all balancing authorities in the WECC region. However, 
balancing authorities may modify their ACE operating mode to account 
for various operating situations, including the need to respond to 
meeting the Disturbance Recovery Criterion within the Disturbance 
Recovery Period in Requirement R4.2 of BAL-002-0.\36\
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    \36\ R4.2 provides that ``[t]he default Disturbance Recovery 
Period is 15 minutes after the start of a Reportable Disturbance,'' 
but further states that ``[t]his period may be adjusted to better 
suit the needs of an Interconnection based on analysis approved by 
the NERC Operating Committee.''
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    47. Nor does the Commission agree with Xcel's concern about the 24-
hour per quarter ATEC operating mode exception period. Giving due 
consideration to the Western Interconnection's participants, the 
Commission finds that a 24-hour per quarter ATEC operating mode 
exception period encourages the Western Interconnection's balancing 
authorities to maintain a high standard of operations to support the 
reliability of the Western Interconnection.

[[Page 25428]]

    48. Consequently, the Commission is not persuaded by Xcel's 
comments. As discussed above, the ERO and the Commission have 
previously addressed the issue raised by Xcel, and the Commission does 
not believe that remand or further clarification is warranted.

E. Violation Risk Factors

    49. In the NOPR, the Commission proposed to direct that the 
violation risk factors assigned to BAL-004-WECC-01, Requirements R1, 
R2, R3, and R4 be modified from ``lower'' to ``medium.'' \37\ The 
Commission explained that the participation in an interconnection's 
time error correction is critical and can directly affect the state of 
the Bulk-Power System.\38\ Further, the Commission explained that the 
assignment of a ``medium'' violation risk factor to the Requirements of 
the WECC regional Reliability Standard would make it consistent with 
the assignment of ``medium'' violation risk factors to NERC Reliability 
Standard BAL-004-0.
---------------------------------------------------------------------------

    \37\ NOPR at P 44-47.
    \38\ Id. P 46.
---------------------------------------------------------------------------

1. Comments
    50. WECC comments that, while it is unlikely that a violation of 
the regional Reliability Standard would lead to Bulk-Power System 
instability, it acknowledges that ATEC is not administrative in nature 
and could affect the electrical status of the Bulk-Power System making 
a `Medium' VRF more appropriate. Thus, WECC comments that ``it does not 
disagree'' with the Commission's proposal to change the violation risk 
factors from low to medium. NERC also agrees that the Commission's 
proposal would promote consistency.
2. Commission Determination
    51. We adopt our NOPR proposal and direct that the violation risk 
factors assigned to BAL-004-WECC-01, Requirements R1, R2, R3, and R4 be 
modified from ``lower'' to ``medium.'' The ERO and WECC must submit a 
filing within 60 days of the effective date of this Final Rule that 
includes the directed modifications.

F. Violation Severity Levels

    52. The ERO's July 2008 filing of the WECC regional Reliability 
Standard included proposed violation severity levels that apply 
generally to all violations of the Requirements of BAL-004-WECC-01 and 
not to any one specific Requirement. In the NOPR, the Commission 
proposed to direct the submission of new violation severity levels for 
each Requirement and sub-Requirement that has been assigned a violation 
risk factor.\39\
---------------------------------------------------------------------------

    \39\ NOPR at P 49. We note that, in Version Two Facilities 
Design, Connections and Maintenance Reliability Standards, Order No. 
722, 126 FERC ] 61,255 at P 45 (2009), the ERO proposed to develop 
violation severity levels for Requirements but not sub-Requirements. 
The Commission denied the proposal as ``premature'' and, instead, 
encouraged the ERO to ``develop a new and comprehensive approach 
that would better facilitate the assignment of violation severity 
levels and violation risk factors.''
---------------------------------------------------------------------------

1. Comments
    53. WECC comments that the Commission's and NERC's guidance on the 
development of violation severity levels has evolved since the drafting 
of the violation severity levels for BAL-004-WECC-1. WECC indicates 
that it will develop violation severity levels for each Requirement and 
sub-Requirement of the regional Reliability Standard, and requests that 
the Commission allow sufficient time to address the issue through the 
WECC stakeholder process.
2. Commission Determination
    54. The Commission adopts its NOPR proposal and directs the ERO and 
WECC to submit violation severity levels for each Requirement and sub-
Requirement that has been assigned a violation risk factor. To allow 
adequate time for the development of the violation severity levels, the 
ERO and WECC must submit a filing within 120 days of the effective date 
of this Final Rule that includes the directed violation severity 
levels.

III. Information Collection Statement

    55. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping (collections of 
information) imposed by agency rules.\40\ The information contained 
here is also subject to review under section 3507(d) of the Paperwork 
Reduction Act of 1995.\41\ Upon approval of a collection(s) of 
information, OMB will assign an OMB control number and an expiration 
date. Respondents subject to the filing requirements of an agency 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.
---------------------------------------------------------------------------

    \40\ 5 CFR 1320.11.
    \41\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    56. This Final Rule approves and requires modifications of one 
regional Reliability Standard that was submitted by NERC as the ERO. 
Section 215 of the FPA authorizes the ERO to submit Reliability 
Standards to provide for the reliable operation of the Bulk-Power 
System. Pursuant to the statute, the ERO must submit each Reliability 
Standard that it proposes to be made effective to the Commission for 
approval.\42\
---------------------------------------------------------------------------

    \42\ See 16 U.S.C. 824(d).
---------------------------------------------------------------------------

    57. The regional Reliability Standard, which applies to 
approximately 35 balancing authorities in the U.S. portion of the 
Western Interconnection, does not require balancing authorities to file 
information with the Commission. It does require balancing authorities 
to develop and maintain certain information for a specified period of 
time, subject to inspection by WECC. However, the Commission does not 
believe that approval of the WECC regional Reliability Standard will 
result in an increase in reporting burdens as compared to current 
practices in WECC. As NERC indicates, since 2003, WECC has used the 
automatic time error correction practice set forth in BAL-004-WECC-01. 
Thus, the Commission finds that the requirement to develop and maintain 
information in the regional Reliability Standard mirrors customary and 
usual business practice in the area in which the Standard will apply 
and, therefore, imposes a minimal burden on applicable balancing 
authorities and eliminates any possible confusion between current 
industry practice and the standard. The Commission also finds that the 
modifications to the current Reliability Standard effected by this 
Final Rule will not increase the reporting burden nor impose any 
additional information collection requirements.
    58. In response to the NOPR, the Commission received no comments 
concerning its determination with respect to the burden and costs and 
therefore uses the same affirmation here.
    Title: Western Electricity Coordinating Council Regional 
Reliability Standard Regarding Automatic Time Error Correction.
    Action: Final Rule.
    OMB Control No.: 1902-0244.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On occasion.
    Necessity of the Information: This Final Rule approves and requires 
modification to one regional Reliability Standard that pertains to 
automatic time error correction in the Western Interconnection. The 
Final Rule finds the Reliability Standard to be just, reasonable, not 
unduly discriminatory or preferential, and in the public interest.
    59. Interested persons may obtain information on the reporting 
requirements by contacting: Federal

[[Page 25429]]

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

    60. 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.\43\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\44\ The actions proposed 
herein fall within this categorical exclusion in the Commission's 
regulations.
---------------------------------------------------------------------------

    \43\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \44\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    61. The Regulatory Flexibility Act of 1980 (RFA) \45\ generally 
requires a description and analysis of Final Rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a 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 its 
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.
---------------------------------------------------------------------------

    \45\ 5 U.S.C. 601-12.
---------------------------------------------------------------------------

    62. As noted above, the regional reliability standard would apply 
to about 35 balancing areas in the Western Interconnection. The 
Commission estimates that of these balancing areas, approximately two 
to four qualify as small entities, because the total electric output of 
each of these entities for the preceding twelve months did not exceed 
four million megawatt hours. Thus, few small entities are impacted by 
the proposed rule.
    63. Based on this understanding, the Commission certifies that this 
Final Rule will not have a significant economic impact on a substantial 
number of small entities. Accordingly, no regulatory flexibility 
analysis is required.

VI. Document Availability

    64. 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.
    65. 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.
    66. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or e-mail at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
[email protected].

VII. Effective Date and Congressional Notification

    67. The Reliability Standard approved in this Final Rule is 
effective June 29, 2009. The Commission has determined, with the 
concurrence of the Administrator of the Office of Information and 
Regulatory Affairs of OMB, that this rule is not a ``major rule'' as 
defined in section 351 of the Small Business Regulatory Enforcement 
Fairness Act of 1996.

List of Subjects in 18 CFR Part 40

    Electric power, Electric utilities, Reporting and recordkeeping 
requirements.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
 [FR Doc. E9-12351 Filed 5-27-09; 8:45 am]
BILLING CODE 6717-01-P