[Federal Register Volume 75, Number 141 (Friday, July 23, 2010)]
[Rules and Regulations]
[Pages 43059-43062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17735]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 38 and 40

[Docket Nos. RM08-19-003, RM05-5-019; Order No. 729-B]


Mandatory Reliability Standards for the Calculation of Available 
Transfer Capability, Capacity Benefit Margins, Transmission Reliability 
Margins, Total Transfer Capability, and Existing Transmission 
Commitments; Mandatory Reliability Standards for the Bulk-Power System; 
and Standards for Business Practices and Communications Protocols for 
Public Utilities

July 15, 2010.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on Rehearing and Reconsideration.

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[[Page 43060]]

SUMMARY: In this order, the Commission grants several requests for 
rehearing of Order No. 729-A, which, inter alia, provided clarification 
of the implementation timeline for the six Modeling Data, and Analysis 
Reliability Standards submitted by the North American Electric 
Reliability Corporation and approved by the Commission in Order No. 
729. As discussed below, the Commission grants rehearing on the 
implementation timeline. In addition, the Commission is revising the 
implementation deadline for compliance with the related North American 
Energy Standards Board business practice standards incorporated by 
reference in Order No. 676-E, so that the deadlines for compliance with 
the requirements of Order Nos. 729 and 676-E remain consistent.

DATES: Effective Date: This rule will become effective August 23, 2010. 
Accordingly, the North American Electric Reliability Corporation 
Reliability Standards approved in Order No. 729 shall be implemented on 
April 1, 2011. The related North American Energy Standards Board 
business practice standards shall be implemented on the same date as 
the Reliability Standards, as discussed below.

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.
Christopher Young (Technical Information), Office of Electric 
Reliability, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426. (202) 502-6403.
Valerie Roth (Technical Information), Office of Energy Policy 
Innovations, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426. (202) 502-8538.

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip 
D. Moeller, John R. Norris, and Cheryl A. LaFleur.

    In the matter of: RM08-19-003, Mandatory Reliability Standards for 
the Calculation of Available Transfer Capability, Capacity Benefit 
Margins, Transmission Reliability Margins, Total Transfer Capability, 
and Existing Transmission Commitments; Mandatory Reliability Standards 
for the Bulk-Power System.
    RM05-5-019, Standards for Business Practices and Communication 
Protocols for Public Utilities.

Order No. 729-B

Order on Rehearing and Reconsideration

Issued July 15, 2010

    1. In this order, the Commission grants several requests for 
rehearing of Order No. 729-A, which, inter alia, provided clarification 
of the implementation timeline for six Modeling Data, and Analysis 
(MOD) Reliability Standards submitted by the North American Electric 
Reliability Corporation (NERC) and approved by the Commission in Order 
No. 729.\1\ As discussed below, the Commission grants rehearing on the 
implementation timeline. In addition, the Commission is revising the 
implementation deadline for compliance with the related North American 
Energy Standards Board (NAESB) business practice standards incorporated 
by reference in Order No. 676-E,\2\ so that the deadlines for 
compliance with the requirements of Order Nos. 729 and 676-E remain 
consistent.
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    \1\ Mandatory Reliability Standards for the Calculation of 
Available Transfer Capability, Capacity Benefit Margins, 
Transmission Reliability Margins, Total Transfer Capability, and 
Existing Transmission Commitments and Mandatory Reliability 
Standards for the Bulk-Power System, Order No. 729, 129 FERC ] 
61,155 (2009), order on reh'g, Order No. 729-A, 131 FERC ] 61,109 
(2010).
    \2\ Standards for Business Practices and Communication Protocol 
for Public Utilities, Order No. 676-E, 74 FR 63288 (Dec. 3, 2009), 
FERC Stats. & Regs. ] 31,299, at P 126 (Nov. 24, 2009).
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I. Background

    2. On November 24, 2009, the Commission issued Order No. 729, which 
approved six MOD Reliability Standards submitted to the Commission by 
the North American Electric Reliability Corporation (NERC), the 
Commission-certified Electric Reliability Organization (ERO) for the 
United States.\3\ The approved Reliability Standards pertain to 
methodologies for the consistent and transparent calculation of 
available transfer capability or available flowgate capability. 
Pursuant to section 215(d)(5) of the Federal Power Act (FPA),\4\ the 
Commission directed the ERO to develop certain modifications to the MOD 
Reliability Standards. The Commission also directed NERC to retire the 
existing MOD Reliability Standards replaced by the versions approved in 
the Final Rule once the new versions became effective.
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    \3\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g & compliance, 117 FERC ] 61,126 (2006), aff'd 
sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (DC Cir. 2009).
    \4\ 16 U.S.C. 824o(d)(5) (2006).
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    3. On the same date, the Commission issued Order No. 676-E, which 
revised the Commission's regulations to incorporate by reference in its 
regulations the latest version (Version 002.1) of certain business 
practice standards adopted by the Wholesale Electric Quadrant (WEQ) of 
NAESB. In addition, the Commission directed public utilities to file 
any necessary tariff revisions, including any revisions to Attachment C 
to their Open Access Transmission Tariff (OATT), at least ninety days 
before the prescribed date of compliance with the revised business 
practice standards, which was meant to be coincident with the 
implementation date for compliance with the MOD Reliability Standards 
approved in Order No. 729.

II. Discussion

    4. In Order No. 729, the Commission directed that the Reliability 
Standards become effective according to the schedule proposed by the 
ERO.\5\ Thus, the Commission stated that the MOD Reliability Standards 
shall become effective on the first calendar quarter that is twelve 
months beyond the date that the Reliability Standards are approved ``by 
all applicable regulatory authorities.'' \6\ The Commission found that 
this implementation schedule struck a reasonable balance between the 
need for timely reform and the needs of transmission service providers 
and transmission operators to make adjustments to their calculations of 
available transfer capability, capacity benefit margin and transfer 
reserve margin. In response to comments on its notice of proposed 
rulemaking, the Commission clarified that, under this plan, the 
Reliability Standards shall become effective on the first day of the 
first quarter occurring 365 days after approval by all applicable 
regulatory authorities. Approval by the Commission would be effective 
60 days after the date of publication of the Final Rule in the Federal 
Register.\7\
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    \5\ Order No. 729, 129 FERC ] 61,155 at P 95.
    \6\ Id.
    \7\ Id.
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    5. Order No. 676-E set the implementation date for compliance with 
the NAESB business practice standards coincident with the 
implementation date of the MOD Reliability Standards approved in Order 
No. 729. Accordingly, public utilities subject to the NAESB business 
practice standards were directed to comply with these Version 002.1 
business practice standards as of the first day of the first quarter 
occurring 365 days after approval of the MOD Reliability Standards by 
all applicable regulatory authorities. Implementation of some of

[[Page 43061]]

the NAESB business standards will require tariff revisions. The 
Commission also directed public utilities to submit necessary tariff 
revisions, including any revisions to Attachment C of their OATT, at 
least ninety days before the prescribed date for compliance with the 
revised standards.
    6. In response to several requests for clarification, the 
Commission issued Order No. 729-A, which, among other things, clarified 
the implementation timeline of the MOD Reliability Standards. Again, 
the Commission accepted the clarification offered by the ERO in its 
comments and clarified that the Reliability Standards shall become 
effective within the United States on the first day of the first 
quarter occurring 365 days after Order No. 729 was published in the 
Federal Register, i.e., January 1, 2011.\8\
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    \8\ Order No. 729-A, 131 FERC ] 61,109 at P 7.
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    7. The Commission also recognized that compliance with these MOD 
Reliability Standards requires an exchange of information and data 
among neighboring transmission service providers. The Commission stated 
that, in some instances, a transmission service provider within the 
United States may need to exchange information and data with a 
neighboring transmission service provider located in a jurisdiction 
where the Reliability Standard is not yet enforceable, such as some 
Canadian provinces. In this situation, the Commission determined that 
the transmission service provider within the United States must share 
information with the transmission service provider located in another 
jurisdiction pursuant to the requirements of the MOD Reliability 
Standards. But, the Commission clarified, the transmission service 
providers and transmission operators within the continental United 
States who must rely on information and data from utilities located in 
another country to comply with these Reliability Standards shall not be 
penalized solely for the failure of a utility located in another 
jurisdiction to provide such information and data, until such time that 
the MOD Reliability Standards become mandatory in that foreign 
jurisdiction.

Requests for Rehearing

    8. Several petitioners requested rehearing of the clarified 
implementation schedule. Bonneville Power Administration (Bonneville), 
the Large Public Power Council (LPPC), Southwest Area Transmission 
Subregional Planning Group (SWAT), and WestConnect request a July 1, 
2011, implementation date. Bonneville suggests that the Commission do 
this by clarifying that the effective date of the MOD Reliability 
Standards is the first day of the first quarter occurring 365 days 
after publication of Order No. 729-A in the Federal Register, i.e., 
July 1, 2011. By contrast, LPPC and WestConnect argue that their 
members reasonably presumed a July 1, 2011, implementation date when 
the Canadian authorities failed to approve the MOD Reliability 
Standards within three months of the Commission's approval and have 
been acting in reliance of that date. SWAT simply states that a July 1, 
2011, effective date is consistent with the notice given to industry in 
Order No. 729 and that for the sake of the reliable operation of the 
Bulk-Power System and efficient and orderly implementation of the new 
MOD Reliability Standards, the effective date in the United States 
should be set as July 1, 2011. If the Commission rejects the proposed 
July 1, 2011, effective date, all of these petitioners request, in the 
alternative, that the Commission set the effective date no earlier than 
April 1, 2011, which is the first day of the first quarter occurring 
365 days after Commission approval of the MOD Reliability Standards.
    9. Other petitioners advocate for an April 1, 2011, effective date. 
Midwest Independent Transmission System Operation, Inc. (MISO), 
NorthWestern Corp. (NorthWestern), PJM Interconnection, L.L.C. (PJM) 
and Southwest Power Pool, Inc. (SPP) argue that they have relied upon 
April 1, 2011, as the earliest possible effective date of the MOD 
Reliability Standards. MISO argues that Order No. 729-A's acceleration 
of the Order No. 729 compliance deadline is unexpected, unnecessary, 
and likely to impose unreasonable burdens on responsible entities who 
planned for compliance no earlier than April 1, 2011. PJM also contends 
that it has expended resources in reliance upon an April 1, 2011, 
effective date and that an accelerated effective date creates a 
substantial hardship for PJM. Accordingly, these petitioners urge the 
Commission to grant rehearing and set April 1, 2011, as the effective 
date for the MOD Reliability Standards.
    10. In support of their arguments, petitioners comment on how the 
effective dates for other requirements are linked to the implementation 
schedule of the MOD Reliability Standards. MISO, NorthWestern, SWAT and 
Westconnect state that Order No. 729 aligned the effective date of the 
MOD Reliability Standards with the effective date of the NAESB WEQ 
business practice standards Version 002.1. MISO and Northwestern also 
point out that, in Order No. 676-E, the Commission directed utilities 
to file a revised Attachment C to their Open Access Transmission Tariff 
(OATT) on or before 275 days after approval of the MOD Reliability 
Standards. These petitioners argue that the Commission's decision in 
Order No. 729-A to accelerate the implementation of the MOD Reliability 
Standards has disrupted the coordinated implementation of the NAESB 
business practice standards and the OATT Attachment C revisions.
    11. In addition, MISO expresses concern about the Commission's 
statement in Order No. 729-A that transmission service providers within 
the United States who rely upon information and data from transmission 
service providers within Canadian provinces to comply with these 
Reliability Standards shall not be penalized solely for the failure of 
a utility located in another jurisdiction to provide such information 
and data, until such time that the MOD Reliability Standards become 
effective in that foreign jurisdiction. MISO expresses concerns that 
the last clause of this statement could be read to mean that once the 
standards have become mandatory in Canada, transmission operators 
within the United States could be subjected to penalties if the 
Canadian transmission operators fail, for whatever reason, to supply 
the information mandated by the Reliability Standards. Accordingly, 
MISO requests clarification that Order No. 729-A did not create 
automatic liability for transmission operators that comply with their 
own data requirements, but do not receive needed data from other 
transmission operators.
    12. Finally, MISO requests that the Commission act expeditiously 
and issue an order on rehearing by July 1, 2010. MISO states that the 
compliance deadline under the Order No. 729-A framework, i.e., 
September 9, 2010, is rapidly approaching. MISO argues that expedited 
action will provide MISO and others with needed certainty and allow 
them to schedule their compliance efforts accordingly.

Commission Determination

    13. Upon further consideration, the Commission has determined that 
the implementation schedule of the MOD Reliability Standards should be 
keyed to the date of approval of the Reliability Standards, as 
originally contemplated in Order No. 729, and not the date of 
publication of Order No. 729 in the Federal Register. Accordingly, the

[[Page 43062]]

Commission grants rehearing of its determination in Order No. 729-A and 
directs that the MOD Reliability Standards shall become effective 
within the United States as of the first day of the first quarter 
occurring 365 days after their approval by the Commission, i.e., April 
1, 2011.
    14. Thus, the Commission rejects arguments raised by Bonneville, 
LPPC, SWAT and WestConnect that the implementation of the MOD 
Reliability Standards should be delayed because the original 
implementation plan contemplated approval of all applicable regulatory 
authorities, including certain Canadian provinces, and those entities 
did not act within the same quarter as the Commission. It is unclear 
whether and when the Canadian provinces will act on these MOD 
Reliability Standards. This uncertainty is the reason why the 
Commission granted clarification in Order No. 729-A. Although the 
Commission appreciates that industry acted in reliance of the original 
implementation plan, we believe that the most reasonable clarification 
of the Commission's directive in Order No. 729 is to make the MOD 
Reliability Standards effective within the United States on the first 
day of the first quarter occurring 365 days following approval by the 
Commission, i.e., April 1, 2011.
    15. When the Commission issued Order No. 676-E, it purposely set an 
implementation timeline for compliance with the NAESB business practice 
standards that was identical to the one prescribed in Order No. 729 for 
the related NERC reliability standards.\9\ In this order and in Order 
No. 729-A, the Commission has modified the compliance schedule for the 
MOD Reliability Standards such that it no longer matches the compliance 
schedule for the WEQ Version 002.1 Business Practice Standards that the 
Commission incorporated by reference in Order No. 676-E. Thus, to 
maintain the consistency that the Commission determined was appropriate 
in Order Nos. 676-E and 729, we will modify the compliance deadline 
that we prescribed in Order No. 676-E to match the compliance deadline 
that we are prescribing for the MOD Reliability Standards within the 
continental United States.\10\ Thus, the NAESB business practice 
standards shall become effective on the same date as the MOD 
Reliability Standards.
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    \9\ See Order No. 676-E, FERC Stats. & Regs. ] 31,299 at P 126; 
Order No. 729 at P 95.
    \10\ In contrast to the compliance dates the Commission is 
establishing for the NERC MOD Reliability Standards, the compliance 
date for the WEQ Version 002.1 Business Practice Standards do not 
establish a separate compliance date for transactions outside of the 
continental United States.
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    16. Consistent with our determination in Order No. 676-E, public 
utilities shall file any necessary tariff revisions, including any 
revisions to Attachment C of their OATT, at least ninety days before 
the prescribed date for compliance with the revised NAESB business 
practice standards.\11\ Consistent with our prior practice, if a public 
utility fails to file the required tariff revisions prior to the 
compliance date, it nonetheless must abide by the NAESB Version 002.1 
WEQ standards even before it has updated its tariff to incorporate 
these changes.
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    \11\ Order No. 676-E, FERC Stats. & Regs. ] 31,299 at P 128.
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    17. In response to MISO's request, the Commission clarifies that 
Order No. 729-A did not create automatic liability for transmission 
operators that comply with their own data requirements, but do not 
receive needed data from other transmission operators. The Commission 
intended, in Order No. 729-A, to clarify that to the extent 
transmission providers within the United States rely on information 
provided by transmission providers in other countries to complete their 
calculations of available transfer or flowgate capability, and the 
transmission providers in other countries do not provide sufficiently 
transparent information for the transmission providers within the 
United States to complete their implementation documents, the 
transmission operators within the United States would not violate the 
MOD Reliability Standards approved in Order No. 729 as a result of that 
lack of information from counterparts in other countries.

III. Information Collection Statement

    18. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain information collection requirements imposed by 
an agency.\12\ The revisions to the information collection requirements 
for transmission service providers and transmission operators adopted 
in Order No. 729 were approved under OMB Control No. 1902-0244. This 
order clarifies these requirements in order to more clearly state the 
obligations imposed in Order No. 729, but does not substantively alter 
those requirements. OMB approval of this order is therefore 
unnecessary. However, the Commission will send a copy of this order to 
OMB for informational purposes only.
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    \12\ 5 CFR 1320 (2010).
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IV. Document Availability

    19. 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.
    20. 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.
    21. 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].

V. Effective Date and Congressional Notification

    22. Rehearings and clarifications adopted in this Order on 
Rehearing and Reconsideration will become effective August 23, 2010.

    By the Commission. Commissioner LaFleur voting present.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-17735 Filed 7-22-10; 8:45 am]
BILLING CODE 6717-01-P