[Federal Register Volume 76, Number 183 (Wednesday, September 21, 2011)]
[Proposed Rules]
[Pages 58424-58433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24167]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 39 and 40

[Docket No. RM11-16-000]


Transmission Relay Loadability Reliability Standard

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: Pursuant to section 215 of the Federal Power Act, the 
Commission proposes to approve Reliability Standard PRC-023-2 
(Transmission Relay Loadability) submitted to the Commission for 
approval by the North American Electric Reliability Corporation (NERC), 
the Electric Reliability Organization (ERO) certified by the 
Commission. The proposed Reliability Standard requires transmission 
owners, generator owners, and distribution providers to set relays 
according to specific criteria in order to ensure that the relays 
reliably detect and protect the electric network from fault conditions, 
but do not limit transmission loadability or interfere with system 
operators' ability to protect system reliability. The Commission seeks 
comment from interested persons on the proposed Reliability Standard. 
The Commission also proposes to approve NERC Rules of Procedure Section 
1700--Challenges to Determinations. This proposed rule provides 
registered entities a means to challenge determinations made by 
planning coordinators under Reliability Standard PRC-023.

DATES: Comments are due November 21, 2011.

ADDRESSES:  You may submit comments, identified by docket number RM11-
16-000 and in accordance with the requirements posted on the 
Commission's Web site, http//www.ferc.gov. Comments may be submitted by 
any of the following methods:
     Agency Web site: http://ferc.gov. Documents created 
electronically using word processing software should be filed in native 
applications or print-to-PDF format and not in a scanned format, at 
http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery: Commenters unable to file comments 
electronically must mail or hand deliver their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426. These requirements can be found on 
the Commission's Web site, see, e.g., the ``Quick Reference Guide for 
Paper Submissions,'' available at http://www.ferc.gov/docs-filing/efiling.asp or via phone from FERC Online Support at (202) 502-6652 or 
toll-free at 1-(866) 208-3676.

FOR FURTHER INFORMATION CONTACT:
Terence A. Burke (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6498.
Kenneth U. Hubona (Technical Information), Office of Electric 
Reliability, Division of Reliability Standards, Federal Energy 
Regulatory Commission, 13511 Label Lane, Suite 203, Hagerstown, MD 
21740, (301) 665-1608.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

September 15, 2011.

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission proposes to approve Reliability Standard PRC-023-2 
(Transmission Relay Loadability) submitted by the North American 
Electric Reliability Corporation (NERC), the Electric Reliability 
Organization (ERO) certified by the Commission. The proposed 
Reliability Standard requires transmission owners, generation owners, 
and distribution providers to set load-responsive phase protective 
relays according to specific criteria in order to ensure that the 
relays reliably detect and protect the electric network from fault 
conditions, but do not limit transmission loadability \2\ or interfere 
with system operators' ability to protect system reliability. The 
Commission seeks comment from interested persons on the proposed 
Reliability Standard. The Commission also proposes to approve NERC 
Rules of Procedure Section 1700--Challenges to Determinations also 
included in NERC's filing. This proposed rule provides registered 
entities a means to challenge determinations made by planning 
coordinators under Reliability Standard PRC-023.
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o (2006).
    \2\ In the context of the proposed Reliability Standard, 
``loadability'' refers to the ability of protective relays to 
refrain from operating under load conditions.
---------------------------------------------------------------------------

I. Background

A. Relay Protection Systems

    2. Protective relays are devices that detect and initiate the 
removal of faults

[[Page 58425]]

on an electric system.\3\ They are designed to read electrical 
measurements, such as current, voltage, and frequency, and can be set 
to recognize certain measurements as indicating a fault. When a 
protective relay detects a fault on an element of the system under its 
protection, it sends a signal to an interrupting device(s) (such as a 
circuit breaker) to disconnect the element from the rest of the system. 
Impedance relays are the most common type of relays used to protect 
transmission lines. They continuously measure voltage and current on 
the protected transmission line and operate when the measured magnitude 
and phase angle of the impedance (voltage/current) falls within the 
settings of the relay. Impedance relays can also provide backup 
protection and protection against remote circuit breaker failure.
---------------------------------------------------------------------------

    \3\ A ``fault'' is defined in the NERC Glossary of Terms used in 
Reliability Standards as ``[a]n event occurring on an electric 
system such as a short circuit, broken wire, or an intermittent 
connection.''
---------------------------------------------------------------------------

    3. On March 18, 2010, the Commission issued a Final Rule approving 
Reliability Standard PRC-023-1 (Transmission Relay Loadability), a 
Standard that requires transmission owners, generator owners, and 
distribution providers to set load-responsive phase protection relays 
according to specific criteria to ensure that the relays reliably 
detect and protect the electric network from all fault conditions, but 
do not operate during non-fault load conditions.\4\ In addition, under 
section 215(d)(5) of the FPA, the Commission directed the ERO to 
develop modifications to the Standard to address certain issues 
identified by the Commission. At issue in the immediate proceeding is a 
revised Reliability Standard that addresses our directives in that 
order and will replace the currently effective PRC-023-1.
---------------------------------------------------------------------------

    \4\ Transmission Relay Loadability Reliability Standard, Order 
No. 733, 130 FERC ] 61,221 (2010), order on reh'g and clarification, 
Order No. 733-A, 134 FERC ] 61,127 (2011); clarified, Order No. 733-
B, 136 FERC ] 61,185 (2011). Order No. 733-B is issuing concurrently 
with this Notice of Proposed Rulemaking.
---------------------------------------------------------------------------

B. Reliability Standard PRC-023-1 and Order No. 733

    4. Currently effective Reliability Standard PRC-023-1 applies to 
relay settings on (1) All transmission lines and transformers with low-
voltage terminals operated or connected at or above 200 kV; and (2) 
those transmission lines and transformers with low voltage terminals 
operated or connected between 100 kV and 200 kV that are designated by 
planning coordinators as critical to the reliability of the bulk 
electric system.\5\ The Reliability Standard consists of three 
compliance requirements and Attachment A. Requirement R1 requires 
entities with certain transmission facilities to set their relays 
according to one of thirteen specific settings (sub-parts R1.1 through 
R1.13) designed to maximize loadability while maintaining Reliable 
Operation of the bulk electric system for all fault conditions. 
Requirement R2 provides additional obligations for entities that elect 
certain settings. Requirement R3 requires planning coordinators to 
designate facilities, operated between 100 kV and 200 kV, that are 
critical to the reliability of the bulk electric system and are 
therefore subject to Requirement R1. Attachment A specifies the 
protection systems that are subject to and excluded from the Standard's 
Requirements.
---------------------------------------------------------------------------

    \5\ Pursuant to section 40.3 of the Commission's regulations, 
all Commission-approved Reliability Standards are available on 
NERC's Web site at http:[sol][sol]www.nerc.com. See 18 CFR 40.3.
---------------------------------------------------------------------------

1. Currently Effective Requirement R1
    5. Requirement R1 states that each transmission owner, generator 
owner, and distribution provider subject to Reliability Standard PRC-
023-1 shall use one of the criteria prescribed in sub-parts R1.1 
through R1.13 for any specific circuit terminal to prevent its phase 
protective relay setting from limiting transmission system loadability 
while maintaining reliable protection of the bulk electric system for 
all fault conditions.
    6. In Order No. 733, the Commission directed the ERO, under section 
215(d)(5) of the FPA, to develop modifications to Requirement R1 to: 
(1) Require that transmission owners, generator owners, and 
distribution providers give their transmission operators a list of 
transmission facilities that implement sub-part R1.2; \6\ (2) require 
entities that have protective relays set pursuant to sub-part R1.10 to 
verify that the limiting piece of equipment is capable of sustaining 
the anticipated overload for the longest clearing time associated with 
a fault; \7\ and (3) require the ERO to document, subject to audit by 
the Commission, and to make available for review to users, owners, and 
operators of the Bulk-Power System, by request, a list of those 
facilities that have protective relays set pursuant to sub-part 
R1.12.\8\
---------------------------------------------------------------------------

    \6\ Order No. 733, 130 FERC ] 61,221 at P 186. sub-part R.1.2 
allows transmission owners, generation owners and distribution 
providers to ``set transmission line relays so they do not operate 
at or below 115 [percent] of the highest seasonal 15-minute Facility 
Rating of a circuit (expressed in amperes).'' The Standard includes 
a footnote that states ``[w]hen a 15-minute rating has been 
calculated and published for use in real-time operations, the 15-
minute rating can be used to establish the loadability requirement 
for the protective relays.''
    \7\ Id. P 203. sub-part R.1.10 allows transmission owners, 
generation owners and distribution providers to set transformer 
fault protection relays and transmission line relays on transmission 
lines terminated only with a transformer * * * at or below the 
greater of:
    [a.] 150 [percent] of the applicable maximum transformer 
nameplate rating (expressed in amperes), including the forced cooled 
ratings corresponding to all installed supplemental cooling 
equipment[; or]
    [b.] 115 [percent] of the highest operator established emergency 
transformer rating.
    \8\ Id. P 224. Sub-part R1.12 addresses setting transmission 
line distance relays to a maximum of 125 percent of the apparent 
impedance (at the impedance angle of the transmission line), subject 
to specified constraints, when the transmission line's desired 
capability is limited by the requirement to adequately protect the 
transmission line.
---------------------------------------------------------------------------

2. Currently Effective Requirement R2
    7. Requirement R2 states that transmission owners, generator 
owners, and distribution providers that use a circuit with the 
protective relay settings determined by the practical limitations 
described in specified R1 sub-parts must use the calculated circuit 
capability as the circuit's facility rating and must obtain the 
agreement of the planning coordinator, transmission operator, and 
reliability coordinator with the calculated circuit capability.
3. Currently Effective Requirement R3
    8. Requirement R3 requires planning coordinators to designate which 
transmission lines and transformers with low-voltage terminals operated 
or connected between 100 kV and 200 kV are critical to the reliability 
of the bulk electric system and therefore subject to Requirement R1. 
Sub-part R3.1 requires planning coordinators to have a process to 
identify critical facilities. Sub-part R3.1.1 specifies that the 
process must consider input from adjoining planning coordinators and 
affected reliability coordinators. Sub-parts R3.2 and R3.3 require 
planning coordinators to maintain a list of critical facilities and 
provide it to reliability coordinators, transmission owners, generator 
owners, and distribution providers within 30 days of initially 
establishing it, and 30 days of any subsequent change.
    9. Under section 215(d)(5) of the FPA, the Commission directed the 
ERO to modify Requirement R3 to: (1) Apply an ``add in'' approach to 
sub-100 kV facilities that are owned or operated by currently 
registered entities or entities that become registered entities in the 
future, and are associated with a facility that is included on a 
critical facilities

[[Page 58426]]

list defined by the Regional Entity; \9\ (2) specify the test that 
planning coordinators must use to determine whether a sub-200 kV 
facility is critical to the reliability of the Bulk-Power System; \10\ 
and (3) add the Regional Entity to the list of entities that receive a 
list of sub-200 kV facilities determined by the planning coordinator to 
be critical to the reliability of the bulk electric system.\11\ In 
addition, the Commission directed the ERO to develop an appeals process 
for entities to challenge a criticality determination.\12\
---------------------------------------------------------------------------

    \9\ Id. P 60.
    \10\ Id. P 69.
    \11\ Id. P 237.
    \12\ Id. P 97.
---------------------------------------------------------------------------

4. Currently Effective Attachment A
    10. Attachment A to Reliability Standard PRC-023-1 specifies which 
protection systems are subject to and excluded from the Standard's 
Requirements. Section 1 of Attachment A provides that the Reliability 
Standard applies to any protective functions that can operate with or 
without time delay, on load current, including but not limited to: (1) 
Phase distance; (2) out-of-step tripping; (3) switch-on-to-fault; (4) 
overcurrent relays; and (5) communication-aided protection 
applications. Section 2 states that the Reliability Standard requires 
evaluation of out-of-step blocking schemes \13\ to ensure that they do 
not operate for faults during the loading conditions defined in the 
Standard's Requirements. Finally, section 3 expressly excludes certain 
relay elements and protection systems from the Reliability Standard's 
Requirements, such as relay elements enabled only when other relays or 
associated systems fail (e.g., overcurrent elements enabled only during 
abnormal system conditions or a loss of communications) and protection 
relay systems intended for the detection of ground fault conditions or 
for protection during stable power swings.
---------------------------------------------------------------------------

    \13\ ``Out-of-step blocking'' refers to a protection system that 
is capable of distinguishing between a fault and a power swing. If a 
power swing is detected, the protection system, ``blocks,'' or 
prevents the tripping of its associated transmission facilities.
---------------------------------------------------------------------------

    11. The Commission, under section 215(d)(5) of the FPA, directed 
the ERO to modify Attachment A to: (1) Include section 2 as an 
additional Requirement with the appropriate violation risk factor and 
violation severity level in the Reliability Standard; \14\ and (2) 
include supervising relay elements on the list of relays and protection 
systems that are specifically subject to the reliability Standard.\15\
---------------------------------------------------------------------------

    \14\ Id. P 244.
    \15\ Id. P 264.
---------------------------------------------------------------------------

5. Currently Effective Implementation Plan
    12. Reliability Standard PRC-023-1 established staggered effective 
dates for various Requirements and facilities. The Standard also 
included a footnote (exceptions footnote) to the ``Effective Dates'' 
section honoring temporary exceptions from enforcement actions approved 
by the NERC Planning Committee before NERC proposed the Reliability 
Standard.
    13. In Order No. 733, the Commission directed the ERO, under 
section 215(d)(5), to modify the Reliability Standard to include an 
implementation plan for sub-100 kV facilities \16\ and to remove the 
exceptions footnote from the ``Effective Dates'' section of the 
Reliability Standard.\17\
---------------------------------------------------------------------------

    \16\ Id. P 283.
    \17\ Id. P 284.
---------------------------------------------------------------------------

II. NERC Petition for Proposed Reliability Standard PRC-023-2 and Rule 
of Procedure, Section 1700--Challenges to Determinations

    14. In a March 18, 2011 filing (NERC Petition), NERC requests 
Commission approval of both its proposed Reliability Standard PRC-023-2 
(Transmission Relay Loadability) and its proposed NERC Rules of 
Procedure Section 1700--Challenges to Determinations.
    15. NERC states that the proposed Reliability Standard requires 
transmission owners, generator owners, and distribution providers to 
verify relay loadability using methods that achieve ``the reliability 
goal of this Standard in an effective and efficient manner familiar to 
the responsible entities.'' \18\ The proposed Standard also applies to 
out-of-step blocking systems as well as to load-responsive phase 
protections systems. NERC specifically identifies the benefits of 
proposed Reliability Standard PRC-023-2, as including (a) Consistent 
identification of operationally critical circuits operated below 200 kV 
that must comply with the Requirements of the Standard, and (b) 
providing transmission operators, planning coordinators, reliability 
coordinators, and the ERO with more information regarding the criteria 
selected by entities for verifying relay loadability.\19\
---------------------------------------------------------------------------

    \18\ NERC Petition at 42.
    \19\ NERC Petition at 5.
---------------------------------------------------------------------------

A. Reliability Standard PRC-023-2

    16. Proposed Reliability Standard PRC-023-2 contains six 
requirements with the stated purpose of ensuring that protective relay 
settings do not limit transmission loadability; do not interfere with 
system operators' ability to take remedial action to protect system 
reliability; and are set to reliably detect all fault conditions and 
protect the electrical network from these faults.\20\ The proposed 
Reliability Standard also includes two attachments. Attachment A 
specifies the protection systems that are subject to and excluded from 
the Standard's Requirements. Attachment B specifies the criteria for 
determining the circuits which must comply with Requirements R1 through 
R5.
---------------------------------------------------------------------------

    \20\ Reliability Standard PRC-023-2, Section A.3 (Purpose).
---------------------------------------------------------------------------

1. Proposed Requirement R1
    17. The ERO describes proposed Reliability Standard PRC-023-2 
Requirement R1 as follows:

    Requirement R1 mandates that each Transmission Owner, Generator 
Owner, and Distribution Provider shall use any one of the identified 
criteria (Requirement R1, criteria 1 through 13) for any specific 
circuit terminal to prevent its phase protective relay settings from 
limiting transmission system loadability while maintaining reliable 
protection of the [bulk electric system] for all fault conditions. 
Each Transmission Owner, Generator Owner, and Distribution Provider 
shall evaluate relay loadability at 0.85 per unit voltage and power 
factor angle of 30 degrees[.] \21\
---------------------------------------------------------------------------

    \21\ NERC Petition at 30.

    18. With the exception of clarifying language and the addition of 
criterion 10.1, proposed Requirement R1 retains the same criteria as 
currently existing PRC-023-1. Criteria 1 through 13 prescribe specific 
criteria to be used for certain transmission system configurations. 
These criteria account for the presence of devices such as series 
capacitors and address circuit and transformer thermal capability.
    19. Criterion 1 specifies transmission line relay settings based on 
the highest seasonal facility rating using the 4-hour thermal rating of 
a transmission line, plus a design margin of 150 percent. Criterion 2 
allows transmission line relays to be set so that they do not operate 
at or below 115 percent of the highest seasonal 15-minute facility 
rating of a circuit, when a 15-minute rating has been calculated and 
published for use in real-time operations. Criterion 3 allows 
transmission line relays to be set so that they do not operate at or 
below 115 percent of the maximum theoretical power capability. 
Criterion 4 may be applied where series capacitors are used on long 
transmission lines to increase power transfer. Criterion 5 applies in 
cases where the maximum end-of-line

[[Page 58427]]

three-phase fault current is small relative to the thermal loadability 
of the conductor. Criterion 6 may be used for system configurations 
where generation is remote from load busses or main transmission 
busses.
    20. Criterion 7 is appropriate for system configurations that have 
load centers that are remote from the generation center. Criterion 8 
applies to system configurations that have one or more transmission 
lines connecting a remote, net importing load center to the rest of the 
system. Criterion 9 applies to the same system configuration, but 
applies to the load end. Criterion 10 is specific to transmission 
transformer fault protective relays and transmission lines terminated 
only with a transformer. Criterion 11 may be used for transformer 
overload protection relays when criterion 10 cannot be met. Criterion 
12 may be used when the circuits have three or more terminals. The 
limited circuit loading capability established by this criterion will 
become the facility rating of the circuit. Finally, criterion 13 is 
intended to apply when otherwise supportable situations and practical 
limitations are identified under criteria 1 through 12.
    21. Proposed Reliability Standard PRC-023-2 modifies PRC-023-1 by 
adding criterion 10.1 to address the Commission's directive that 
entities with protective relays set pursuant to criteria R1.10 must 
verify that the limiting piece of equipment is capable of sustaining 
the anticipated overload for the longest clearing time associated with 
a fault.\22\ The criterion requires coordination so that settings on a 
transformer's load responsive relay do not expose the transformer to a 
fault level and duration that exceeds the transformer's mechanical 
withstand capability.\23\ NERC states that, for through-faults, it is 
not possible to set fault protection relays to both meet the relay 
loadability requirement in criterion 10 and coordinate a transformer's 
thermal limits, but the mechanical damage threshold is more limiting 
than the thermal damage threshold. Moreover, NERC states, the 
permissible time duration to avoid thermal damage is longer than the 
maximum expected duration for which a through-fault would remain before 
being cleared by the protection system. Thus, requiring that 
transformer fault protection relays are set to not expose the 
transformer to a fault level and duration that exceeds the 
transformer's mechanical withstand capability assures the transformer 
will be capable of withstanding an overload for the longest clearing 
time associated with a fault on the low-voltage side of the 
transformer.\24\
---------------------------------------------------------------------------

    \22\ Id. at 20.
    \23\ The mechanical withstand capability is determined on the 
basis of the transformer's design and the maintenance of that 
capability by the owner. Maintenance would be an issue if, for 
example, the moisture level in a transformer is allowed to increase 
above the design value but still within dielectric acceptance, the 
dielectric withstand capability could be compromised.
    \24\ Id. at 22-23.
---------------------------------------------------------------------------

    22. NERC believes that Requirement 10.1 is equally effective and 
efficient as the approach directed in Order No. 733.\25\ It states that 
as a result of design constraints, transformers are more limiting than 
other series elements with regard to through-fault capability. 
Accordingly, coordinating transformer fault protection relays with the 
transformer mechanical withstand capability addresses the Commission's 
concerns underlying its directive even though it does not reference the 
most limiting piece of equipment. Because the fault withstand 
capability of terminal equipment is not always readily available, 
requiring entities to provide evidence that equipment in series with 
the transformer is capable of withstanding a through-fault current for 
the expected duration, NERC argues, is not necessary to address the 
Commission's concerns and places an unnecessary burden on entities.\26\
---------------------------------------------------------------------------

    \25\ Id. at 20-21.
    \26\ Id. at 23.
---------------------------------------------------------------------------

2. Proposed Requirement R2
    23. Proposed Reliability Standard PRC-023-2 adds a new Requirement 
R2 that requires each transmission owner, generation owner, and 
distribution provider to set its out-of-step blocking elements to allow 
tripping of phase protective relays for faults that occur during the 
loading conditions modeled under Requirement R1. NERC states that 
Requirement R2 has been added to proposed Reliability Standard PRC-023-
2 to address the Commission's directive to include section 2 of PRC-
023-1 Attachment A as an additional Requirement with the appropriate 
violation risk factor and violation severity level.\27\ NERC has 
assigned this proposed Requirement a high Violation Risk Factor and a 
severe Violation Severity Level reflecting the impact to reliability of 
violating the Requirement.
---------------------------------------------------------------------------

    \27\ NERC Petition at 24.
---------------------------------------------------------------------------

3. Proposed Requirements R3, R4, and R5
    24. Requirement R3 in proposed Reliability Standard PRC-023-2 
renumbers and makes conforming edits to Requirement R2 from PRC-023-1. 
Proposed new Requirement R4 requires an entity that chooses to use 
Requirement R1 criterion 2 as the basis for verifying transmission line 
relay loadability to provide its planning coordinator, transmission 
operator, and reliability coordinator with an updated list of circuits 
associated with those transmission line relays at least once each 
calendar year. Similarly, proposed Reliability Standard PRC-023-2 adds 
a new Requirement R5 that requires entities that set transmission line 
relays according to Requirement R1 criterion 12 to provide an updated 
list of the circuits associated with those relays to its Regional 
Entity at least once each calendar year, to allow the ERO to compile a 
list of all circuits that have protective relays settings that limit 
circuit capability. NERC states that new Requirements R4 and R5, 
respectively, address the Commission's directives relating to providing 
transmission operators a list of transmission facilities that implement 
criterion 2 and directing that the ERO create a list of those 
facilities that have protective relays set pursuant to criterion 
12.\28\
---------------------------------------------------------------------------

    \28\ Id. at 23-24.
---------------------------------------------------------------------------

 4. Proposed Requirement R6
    25. Requirement R6 of proposed Reliability Standard PRC-023-2 
requires each planning coordinator to conduct an assessment at least 
once each calendar year (but no less frequently than every 15 months) 
by applying the criteria in Attachment B to determine the circuits in 
its planning coordinator area for which entities must comply with 
Requirements R1 through R5. Sub-part 6.1 requires the planning 
coordinator to maintain a list of circuits subject to PRC-023-2 per 
application of Attachment B identifying the year in which any criterion 
in Attachment B applies. Sub-part 6.2 requires the planning coordinator 
to provide the list to all Regional Entities, reliability coordinators, 
transmission owners, generators owners, and distribution providers 
within its planning coordinator area within 30 calendar days of 
establishing the initial list, and 30 days of any subsequent change 
thereto. NERC states that the proposed sub-part 6.2, formerly 
Requirement R3.3 in PRC-023-1, modifies the Requirement in order to 
address the Commission's directive to add the Regional Entity to the 
list of entities that receive the list of critical facilities.\29\
---------------------------------------------------------------------------

    \29\ Id. at 24.
---------------------------------------------------------------------------

5. Proposed Attachment A
    26. Attachment A to proposed Reliability Standard PRC-023-2

[[Page 58428]]

includes a new section 1.6 that extends the Standard's applicability to 
include phase overcurrent supervisory elements (i.e., phase fault 
detectors) associated with current-based, communication-assisted 
schemes (i.e., pilot wire, phase comparison, and line current 
differential) where the scheme is capable of tripping for loss of 
communications. In addition, conforming changes are made to proposed 
section 2.1, formerly section 3.1 of the PRC-023-1, to recognize that 
elements described in new section 1.6 are no longer excluded from the 
proposed Standard's scope. NERC states that these changes have been 
made to address the Commission's directives to include supervising 
relay elements on the list of relays and protection systems that are 
specifically subject to the Reliability Standard.\30\
---------------------------------------------------------------------------

    \30\ Id. at 25.
---------------------------------------------------------------------------

    27. NERC states that it believes proposed section 1.6 of Attachment 
A is equally effective and efficient in addressing the Commission's 
concern as the approach directed in Order No. 733.\31\ It states that 
modifying Attachment A to extend the scope of the proposed Reliability 
Standard to include all supervising relays as directed would have an 
unintended negative impact on system reliability by reducing the 
dependability and security of certain protection system, e.g., 
supervising phase distance (impedance) elements. It contends that the 
description in section 1.6 is tailored to avoid the negative impacts on 
reliability that could occur with an overly broad application of the 
proposed Standard to supervising relays.\32\
---------------------------------------------------------------------------

    \31\ Id.
    \32\ Id. at 26-27.
---------------------------------------------------------------------------

6. Proposed Attachment B
    28. Proposed Reliability Standard PRC-023-2 adds an Attachment B to 
specify six criteria that planning coordinators must use to identify 
sub-200kV facilities that, upon being so identified, are required to 
comply with the proposed Reliability Standard. The proposed criteria 
identify facilities using bright line criteria and analyses. A facility 
meets the bright line criteria if it:
     Is a monitored facility of a permanent flowgate in the 
Eastern Interconnection, a major transfer path within the Western 
Interconnection, or a comparable monitored facility in the Quebec 
Interconnection, that has been included to address reliability concerns 
for loading of that circuit (Criteria B1);
     Is a monitored facility of an interconnection reliability 
operating limit, where the limit was determined in the planning horizon 
pursuant to Reliability Standard FAC-010 (System Operating Limits 
Methodology for Planning Horizon) (Criteria B2); or
     Forms a path to supply off-site power to a nuclear plant 
as established in the nuclear plant interface requirements pursuant to 
Reliability Standard NUC-001 (Nuclear Plant Interface Coordination) 
(Criteria B3).\33\
---------------------------------------------------------------------------

    \33\ As we stated previously, ``[w]e would expect that any 
[nuclear plant interface requirements] agreed to between a nuclear 
plant generator operator and transmission entity would include all 
facilities needed to transmit offsite power and auxiliary power to 
the nuclear facility. Mandatory Reliability Standard for Nuclear 
Plant Interface Coordination, 125 FERC ] 61,065, at P 51 (2008).
---------------------------------------------------------------------------

    A facility is identified through the analysis criteria if it:
     Is identified through a sequence of power flow analyses 
specified in Attachment B and performed by the planning coordinator 
(Criteria B4);
     Is selected by the planning coordinator based on technical 
studies or assessments other than those specified above, in 
consultation with the facility owner (Criteria B5); or
     Is mutually agreed upon for inclusion by the planning 
coordinator and the facility owner (Criteria B6).
    NERC states that while the six criteria presented in Attachment B 
vary from some of the guidance provided in Order No. 733, they 
nonetheless identify all facilities that must be subject to proposed 
Reliability Standard PRC-023-2 in order to achieve the Standard's 
reliability objective.\34\ NERC further reports that it is in the 
process of applying the test to a representative sample of utilities 
from each of the three Interconnections and plans to file the results 
of these tests by February 17, 2013. NERC plans to revise Attachment B, 
if necessary, pending the results of this test and clarifications made 
in Order No. 733-A.\35\
---------------------------------------------------------------------------

    \34\ NERC Petition at 14.
    \35\ Id. at 13.
---------------------------------------------------------------------------

    29. Attachment B, unlike currently effective Reliability Standard 
PRC-023-1, does not state that the goal of screening sub-200 kV 
facilities is to identify those that are ``critical to the reliability 
of the bulk electric system.'' Instead, NERC states that the test in 
Attachment B ``is designed to identify circuits that if tripped on 
relay loadability following an initiating event could contribute to 
undesirable system performance similar to what occurred during the 
August 2003 Blackout * * *.'' \36\ This change in wording, NERC states, 
eliminates potential confusion regarding the use of the phrase 
``critical to the reliability of the bulk electric system'' in the 
context of this Reliability Standard compared to other Standards such 
as those addressing critical infrastructure, and it presents the same 
meaning in an equally effective and efficient approach for referring to 
the circuits identified through the planning coordinators' assessments.
---------------------------------------------------------------------------

    \36\ Id. at 15.
---------------------------------------------------------------------------

    30. The proposed Reliability Standard also omits reference to sub-
100 kV facilities ``that Regional Entities have identified as critical 
to the reliability of the [b]ulk [e]lectric [s]ystem'' in favor of 
referring to ``transmission lines operated below 100 kV and 
transformers with low voltage terminal connected below 100 kV that are 
part of the [bulk electric system].'' NERC states that sub-100 kV 
circuits identified by the Regional Entities as critical facilities 
should be included in the definition of the bulk electric system and 
the proposed language conveys the same meaning in an equally effective 
and efficient manner.\37\ This change in wording, NERC states, responds 
to confusion arising from the fact that very few such facilities have, 
as yet, been identified.
---------------------------------------------------------------------------

    \37\ Id. at 16.
---------------------------------------------------------------------------

    31. NERC is taking a three phase approach to addressing the various 
directives in Order No. 733. Phase I is intended to address directed 
modifications to PRC-023-1. Phase II entails development of a new 
Reliability Standard addressing generator relay loadability, and Phase 
III consists of developing a new Reliability Standard addressing 
protective relay operations due to stable power swings. According to 
the NERC Petition, transmission lines that tripped unnecessarily during 
the August 2003 Blackout did not trip as a result of power swings up 
through the tripping of the Argenta-Battle Creek and the Argenta-
Tompkins 345 kV lines, but subsequent line trips were due to power 
swings. While the power system did experience stable swings following 
each line trip prior to losing these two lines, the swings were not of 
significant magnitude and dampened quickly allowing the system to 
return to a new steady-state condition. For this reason, NERC asserts 
that analysis using steady-state base cases is the appropriate tool to 
assess the potential for lines to trip under similar conditions, and 
dynamic base cases are the appropriate tool to assess line tripping due 
to power swings. NERC has elected to limit the applicability test in 
Attachment B to power flow analysis with steady-state base cases and to 
address dynamic base cases in its Phase III Reliability Standard 
addressing power swings. This

[[Page 58429]]

election, NERC states, is an equally efficient and effective approach 
to addressing all facets of the unnecessary line tripping caused by 
relay loadability that occurred during the August 2003 Blackout.
    32. Order No. 733 provided guidance that a test to determine 
critical sub-200 facilities should include the same simulations and 
assessments as the Transmission Planning (TPL) Reliability Standards. 
While the TPL Standards permit manual system adjustments between two 
contingencies, NERC believes it is more informative, and in line with 
the reliability objective, to require testing of double contingencies 
without such manual adjustments, thereby modeling a situation in which 
an operator fails to, or does not have time to, make appropriate system 
adjustments. This focused testing exceeds the requirements of the TPL 
Standards and, NERC asserts, is an equally efficient and effective 
approach to addressing the Commission's concern that the test must be 
sufficiently robust to provide assurance that all appropriate 
facilities are identified and made subject to the Reliability Standard 
for the Standard to achieve its purpose.
    33. Order No. 733 also provided guidance regarding elements of a 
definition of desirable system performance that must inform any test to 
determine which sub-200 kV circuits are critical to system reliability. 
The Commission's guidance stated, among other things, that the power 
system should maintain all facilities within their applicable thermal 
(i.e., current), voltage, or stability ratings (short time ratings are 
applicable). NERC asserts that it is most appropriate to focus on 
avoiding thermal loading of transmission circuits. In order to achieve 
its reliability goal, NERC believes, Reliability Standard PRC-023-2 
must apply to circuits whose relays will be challenged by excessive 
thermal loading to the point that a relay hampers the system operator's 
ability to take remedial action. The system performance measure in this 
test is less rigorous than that required by TPL-003 (System Performance 
Following Loss of Two or More BES Elements) because it ignores voltage 
and stability ratings. But, NERC points out that the contingency 
condition in Attachment B is more stringent than that in TPL-003 and 
the contingency and system performance measure were developed together 
in order to align with the reliability objective of the proposed 
Standard. NERC believes this test is an equally effective and efficient 
approach to addressing the Commission's concern regarding the 
rigorousness of the test.
7. Proposed Implementation Plan
    34. NERC proposes staggered effective dates for Reliability 
Standard PRC-023-2, i.e., the mandatory compliance date after an 
allotted implementation period, for each of the Standard's 
requirements. The implementation plan provides 18 months for planning 
coordinators to apply the criteria in Attachment B and determine which 
sub-200 kV circuits must be subject to the Standard. Those entities 
responsible for compliance on circuits identified by a planning 
coordinator pursuant to Requirement R6 are provided until the first day 
of the first calendar quarter 39 months following notification to 
become compliant, or until the first day of the first calendar year in 
which any criterion in Attachment B applies if the planning coordinator 
indentifies the circuit in an assessment of a future year more than 39 
months beyond the year in which the assessment is conducted.
8. Violation Risk Factors/Violation Severity Levels
    35. To determine a base penalty amount for a violation of a 
Requirement within a Reliability standard, NERC must first determine an 
initial range for the penalty amount. To do so, NERC assigns a 
violation risk factor to 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. NERC may 
propose either a lower, medium, or high violation risk factor for each 
Requirement. The Commission has established guidelines for evaluating 
the validity of each violation risk factor assignment.\38\ NERC also 
assigns each Requirement one of four violation severity levels--low, 
moderate, high, and severe--as measurements for the degree to which the 
requirement was violated in a specific circumstance.\39\ NERC assigns 
Requirements R1, R2, and R6 a ``high'' violation risk factor, 
Requirement R3 a ``medium'' violation risk factor, and Requirements R4 
and R5 a ``lower'' violation risk factor. The NERC Petition proposes 
violation severity levels for each of the Requirements of proposed 
Reliability Standard PRC-023-2.
---------------------------------------------------------------------------

    \38\ See North American Electric Reliability Corp., 135 FERC 
 61,166 (2011); North American Electric Reliability 
Corp.,119 FERC ] 61,145, order on reh'g, 120 FERC ] 61,145, at P 8-
13 (2007).
    \39\ See North American Electric Reliability Corp., 135 FERC ] 
61,166; North American Electric Reliability Corp., 123 FERC ] 61,284 
(2008).
---------------------------------------------------------------------------

B. NERC Rules of Procedure Section 1700--Challenges to Determinations

    36. Proposed NERC Rules of Procedure Section 1700--Challenges to 
Determinations allows registered entities to challenge a planning 
coordinator's determination made under a Reliability Standard or terms 
defined in the Glossary of Terms Used in NERC Reliability Standards. 
Proposed Rule 1702 sets out the procedure for challenging a 
determination by a planning coordinator under Reliability Standard PRC-
023-2. It provides that a registered entity is encouraged, but not 
required, initially to meet with the planning coordinator to resolve 
any dispute. If the matter cannot be resolved, the registered entity 
may challenge the determination with the appropriate Regional Entity, 
and if not satisfied with the Regional Entity's decision, may appeal to 
NERC. Review by NERC would initially be handled by a panel appointed by 
the NERC Board of Trustees. The Board of Trustees would then have the 
authority, but not the duty, to review the matter upon the request of 
the planning coordinator or registered entity. The final NERC decision 
may then be appealed to the applicable governmental authority, e.g., 
the Commission for appeals within the United States.

III. Discussion

    37. We agree with NERC that the proposed Reliability Standard PRC-
023-2 addresses the reliability gaps identified in Order No. 733 that 
relate specifically to Reliability Standard PRC-023-1 and represents an 
improvement in the Reliability Standard. Accordingly, under section 
215(d)(2) of the FPA, the Commission proposes to approve the new 
Reliability Standard, including its Violation Risk Factors and 
Violation Severity Levels, as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. Also, under 
section 215(f) of the FPA, the Commission proposes to approve NERC Rule 
of Procedure Section 1700--Challenges to Determinations as just, 
reasonable, not unduly discriminatory or preferential, in the public 
interest, and satisfying the requirements of section 215(c) of the FPA. 
NERC reports that it is in the process of applying the test set forth 
in Attachment B to a representative sample of utilities from each of 
the three Interconnections and will file the results of these tests in 
a report on or before February, 2013 (Report). In order to better 
understand the practical application of the test, the Commission 
proposes to direct the ERO to address specific matters described below 
in the Report.
    38. Based on our review of NERC's petition and accompanying 
information, we propose to find that the proposed

[[Page 58430]]

Reliability Standard and NERC Rule of Procedure Section 1700--
Challenges to Determinations adequately address the directed 
modifications set forth in Order No. 733 regarding Reliability Standard 
PRC-023-1. Specifically, we propose to find that proposed Reliability 
Standard PRC-023-2 and the proposed NERC Rule of Procedure address the 
following Order No. 733 directives: (1) Adopt an ``add in'' approach to 
sub-100 kV facilities and modify Requirement R3 to specify the test 
planning coordinators must use to determine whether a sub-200 kV 
facility is critical to reliability; (2) establish a mechanism for 
registered entities to challenge criticality determinations; (3) 
require applicable entities to notify transmission operators of 
facilities that implement sub-requirement R1.2; (4) modify sub-
requirement R1.10 to require verification that the limiting piece of 
equipment can sustain the anticipated overload; (5) direct the ERO to 
document facilities that have protective relays set pursuant to sub-
requirement R1.12; (6) add Regional Entities to the list of those that 
receive the critical facilities list pursuant to sub-requirement 3.3; 
(7) include section 2 of Attachment A as an additional Requirement; (8) 
revise section 1 of Attachment A to include supervising relay elements 
associated with the identified reliability concern subject to the 
Standard; (9) create an implementation plan for sub-100 kV facilities; 
and (10) remove the exceptions footnote from the ``Effective Dates'' 
section. In light of the manner in which it addresses these directives, 
the proposed Reliability Standard represents an improvement in 
transmission relay loadability.
    39. Attachment A to the proposed Reliability Standard has been 
modified to extend coverage of the Standard to phase overcurrent 
supervisory elements associated with current-based, communication-
assisted schemes capable of tripping for loss of communications. While 
the description of the supervisory elements is more specific than the 
directive in Order No. 733,\40\ the proposed Attachment A reflects 
industry comment regarding the potential for unintended, negative 
reliability consequences that could arise from an overly broad 
description. In light of the explanation provided and our reliability 
concern,\41\ we consider the proposed alternative solution to be an 
equally effective and efficient approach to addressing the Commission's 
reliability concerns.
---------------------------------------------------------------------------

    \40\ Order No. 733, 130 FERC ] 61,221 at P 264.
    \41\ Id. P 251.
---------------------------------------------------------------------------

    40. Transmission relay loadability is important to ensuring the 
reliability of the Bulk-Power System. The ERO has proposed changes to 
currently effective Reliability Standard PRC-023-1 on many issues, 
including (1) Extending its coverage to communication assisted 
supervising elements and out-of-step blocking schemes; (2) requiring 
that a uniform test is applied consistently by planning coordinators 
utilizing their judgment to identify sub-200 kV circuits to which the 
Reliability Standard must apply; (3) requiring that load responsive 
transformer fault protection relays be set to reflect the transformer's 
mechanical withstand capability; and (4) ensuring communication 
regarding the ratings used to verify transmission facility relay 
loadability. These changes extend and strengthen the reliability 
benefits currently effective Reliability Standard PRC-023-1 was 
designed to achieve.
    41. Attachment B to the proposed Reliability Standard specifies the 
test planning coordinators are required to use to determine whether a 
sub-200 kV facility is critical to reliability. NERC states that it 
plans to revise the test, if necessary, based on the results of this 
testing and the clarifications regarding the test made in Order No. 
733-A.\42\ The Commission seeks to better understand the implementation 
and effects of Requirement R6, and criteria B4 and B5, as they are used 
to identify operationally critical sub-200 kV facilities.
---------------------------------------------------------------------------

    \42\ NERC Petition at 13.
---------------------------------------------------------------------------

Questions Regarding Test to Determine Critical Sub-200 kV Facilities
    42. Criterion B4 of Attachment B requires application of proposed 
Reliability Standard PRC-023-2 to any circuit identified through a 
specified set of power flow analyses performed by planning 
coordinators. Planning coordinators must apply their engineering 
judgment in the simulation of double contingency combinations in order 
to determine which combinations of contingencies result in undesirable 
tripping. In guidance given in Order No. 733, the Commission stated 
that for Category C contingencies (i.e., events resulting in the loss 
of two or more elements) desirable system performance includes, among 
other things, the maintenance of all facilities within their applicable 
thermal, voltage, or stability ratings (short time ratings are 
applicable).\43\ An impedance relay reads the magnitude and phase angle 
of both the current and voltage quantities, and if the combination 
results in an apparent impedance that encroaches or penetrates the 
relay's operational settings, the relay is susceptible to undesirable 
tripping. The performance standard proposed in Attachment B requires 
the planning coordinator to monitor thermal ratings but does not 
consider the other parameters that could result in a relay trip event 
without high currents.
---------------------------------------------------------------------------

    \43\ Order No. 733, 130 FERC ] 61,221 at P 84.
---------------------------------------------------------------------------

    43. NERC states that though ``the system performance measure in 
this test is less stringent than required for Category C contingencies 
in TPL-003, it is important to note that the contingency itself is more 
stringent than a Category C contingency [because it does not allow 
manual system adjustments between the two contingencies as does a 
Category C contingency], and the contingency and system performance 
measure have been developed together * * * .'' \44\ However, the 
standard is silent as to the rigor of the simulations other than 
requiring the planning coordinators to apply their engineering 
judgment. We propose that the ERO address in the Report whether the 
power system assessment proposed in criterion B4 includes the critical 
system conditions utilized under Reliability Standard TPL-003-0 
Requirement R1.3.2 \45\ and whether applicable entities evaluate relay 
loadability under the B4 criterion consistent with Requirement R1 which 
requires, in part, that they ``evaluate relay loadability at 0.85 per 
unit voltage and a power factor angle of 30 degrees'' in addition to 
applicable current criteria. If the evaluation uses other per unit 
voltage and power factor angle assumptions, we propose that the Report 
include a comparison of results obtained from those that would be 
achieved were the assumptions consistent with Requirement R1.
---------------------------------------------------------------------------

    \44\ NERC Petition at 19.
    \45\ Reliability Standard TPL-003-0 Requirement R1.3.2 provides 
that a transmission planner assessment shall ``[c]over critical 
system conditions and study years as deemed appropriate by the 
responsible entity.''
---------------------------------------------------------------------------

    44. Criterion B5 of Attachment B requires compliance with the 
proposed Reliability Standard with respect to a ``circuit * * * 
selected by the Planning Coordinator based on technical studies or 
assessments, other than those specified in criteria B1 through B4, in 
consultation with the Facility owner.'' The Commission proposes that 
the Report comment on what ``technical studies or assessments'' 
planning coordinators use to identify critical facilities.
    45. According to the NERC Petition, ``[d]uring the standard 
development

[[Page 58431]]

process, a number of industry comments expressed concern with potential 
confusion regarding use of the phrase `critical to the reliability of 
the bulk electric system' in the context of PRC-023-1 versus other 
standards such as those addressing critical infrastructure.'' \46\ As a 
result, the proposed Requirement R6 omits that phrase and refers 
instead to circuits ``for which Transmission Owners, Generator Owners, 
and Distribution Providers must comply with Requirements R1 through 
R5.'' In contrast, however, the Blackout Report used the phrase 
``operationally significant,'' and the test in Attachment B is 
``designed to identify circuits that if tripped on relay loadability 
following an initiating event could contribute to undesirable system 
performance similar to what occurred during the August 2003 Blackout.'' 
\47\ Notwithstanding the various phrases used to describe the 
reliability objective, the NERC Petition indicates that the test is 
intended to identify all circuits in a planning coordinator's area that 
could have an operational impact on the reliability of the bulk 
electric system. The Commission proposes that the Report assess whether 
Attachment B is sufficiently comprehensive to capture all such 
circuits.
---------------------------------------------------------------------------

    \46\ NERC Petition at 15.
    \47\ Id.
---------------------------------------------------------------------------

Summary
    46. In summary, the Commission proposes to approve proposed 
Reliability Standard PRC-023-2 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. We also 
propose to approve proposed NERC Rules of Procedure Section 1700--
Challenges to Determinations as just, reasonable, not unduly 
discriminatory or preferential, in the public interest, and satisfying 
the requirements of section 215(c) of the FPA. In addition, the 
Commission proposes that NERC addresses in the Report questions 
regarding the system assessment simulations and results of the power 
flow analyses criterion in the proposed test for critical facilities.

IV. Information Collection Statement

    47. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules.\48\ Upon approval of a collection(s) of information, OMB 
will assign an OMB control number and expiration date. Respondents 
subject to the filing requirement of this rule will not be penalized 
for failing to respond to these collections of information unless the 
collections of information display a valid OMB control number. The 
Paperwork Reduction Act (PRA) \49\ requires each federal agency to seek 
and obtain OMB approval before undertaking a collection of information 
directed to ten or more persons, or continuing a collection for which 
OMB approval and validity of the control number are about to 
expire.\50\
---------------------------------------------------------------------------

    \48\ 5 CFR 1320.11.
    \49\ 44 U.S.C. 3501-20.
    \50\ 44 U.S.C. 3502(3)(A)(i), 55 U.S.C. 3507(a)(3).
---------------------------------------------------------------------------

    48. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the PRA. Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing the respondent's burden, including the 
use of automated information techniques.
    49. This Notice of Proposed Rulemaking proposes to approve 
Reliability Standard PRC-023-2 (Transmission Relay Loadability) which 
will replace currently effective Reliability Standard PRC-023-1 
approved by the Commission in Order No. 733. Rather than creating 
entirely new requirements regarding the setting of protective relays, 
the proposed Reliability Standard instead modifies and improves the 
existing Reliability Standard. Thus this proposed rulemaking does not 
impose entirely new burdens on the effected entities. For example, the 
currently effective Reliability Standard PRC-023-1 requires 
transmission owners, generation owners, and distribution providers to 
each have evidence to show that each of its transmission relays are set 
according to one of the criteria in criteria R1.1 through R1.13. 
Similarly, proposed Reliability Standard PRC-023-2 requires 
transmission owners, generation owners, and distribution providers to 
have evidence that each of its transmission relays is set according to 
one of the 13 criteria in Requirement R1 but adds that each such entity 
shall also have evidence that relays set according to criterion 10 do 
not expose the transformer to fault levels and durations beyond those 
indicated in the Standard. Thus, the recordkeeping obligations for some 
Requirements are more specific but not necessarily more expansive than 
those of currently effective Reliability Standard PRC-023-1. However, 
proposed PRC-023-2 does add new Requirements, each of which has new 
recordkeeping obligations.
    50. Proposed Requirement R2 will require each transmission owner, 
generator owner, and distribution provider to have evidence that its 
out-of-step blocking elements are set in accordance with the Standard, 
and proposed Requirements R4 and R5 will require those same entities to 
maintain evidence that they have informed the appropriate parties of 
their updated lists of certain circuits. Under Requirement R6, planning 
coordinators will be required to execute a test for applicability of 
the Standard as set forth in Attachment B and retain analyses, 
calculation summaries, or study reports to evidence execution of the 
test, whereas under the currently effective PRC-023-1, a test was 
required but only the results needed to be retained. Because an 
unspecified test is currently required to be carried out on facilities 
operated at between 100 kV and 200 kV under currently effective 
Reliability Standard PRC-023-1, for purposes of this analysis, we 
assume that there is little additional cost for planning coordinators 
to implement and document that portion of the test. However, the 
proposed Requirement R6 imposes the new burdens of performing the test 
on sub-100 kV facilities, maintaining appropriate records, and 
distributing the list of circuits identified by the test to Regional 
Entities.
    51. Public Reporting Burden: Our estimate below regarding the 
number of respondents is based on the NERC compliance registry as of 
July 29, 2011. According to the NERC compliance registry, there are 335 
transmission owners, 793 generation owners, 553 distribution providers, 
and 72 planning coordinators. However, under NERC's compliance 
registration program, entities may be registered for multiple 
functions, so these numbers incorporate some double counting. The net 
number of entities responding will be approximately 645 entities 
registered as a transmission owner, a distribution provider, or a 
generation owner that is also a transmission owner and/or a 
distribution owner, and 72 planning coordinators.\51\ The estimated 
burden for the requirements in this Order follow:
---------------------------------------------------------------------------

    \51\ Under its applicability provisions, proposed Reliability 
Standard applies to specified circuits such that very few, if any, 
generator owners that are not also a transmission owner and/or a 
distribution provider will be subject to the Standard.

[[Page 58432]]



----------------------------------------------------------------------------------------------------------------
                                         Number of         Number of                              Total annual
     Changes to FERC-725G data          respondents      responses per    Average burden hours   hours (1 x 2 x
             collection                annually (1)     respondent (2)    per response 52 (3)          3)
----------------------------------------------------------------------------------------------------------------
R1 criterion 1.10: TOs, GOs, and                  645                 1  Analysis for                      5,160
 DPs must analyze and document                                            compliance                       1,290
 criterion 1.10 compliance.                                               documents--8.
                                                                         Record Retention--2..
R2: TOs, GOs, and DPs must perform                645                 1  Analysis for                      5,160
 analysis and retain evidence of                                          compliance                       1,290
 compliance.                                                              documents--8.
                                                                         Record Retention--2..
R4 and R5: TOs, GOs, and DPs must                 645                 1  Reporting (dist. of               6,450
 distribute updated lists and                                             list)--10.                       6,450
 retain evidence that lists were                                         Record Retention--10.
 distributed.
R6: PC must perform assessment,                    72                 1  Reporting (assessment             1,440
 distribute list of circuits and                                          and dist. of list)--               720
 retain evidence of testing and                                           20.
 distribution 53.                                                        Record Retention--10.
    Total..........................  ................  ................  .....................            27,960
----------------------------------------------------------------------------------------------------------------

    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements and recordkeeping burden 
associated with Reliability Standard PRC-023-2.
     Total Annual Hours for Collection: (Reporting and Record 
Retention) = 27,960 hours.
     Total Estimated Reporting/Analysis Cost = 18,210 hours @ 
$120/hour = $2,185,200.
---------------------------------------------------------------------------

    \52\ The burden hours are based on estimates that the Commission 
has used for similar reporting requirements.
    \53\ This applies to the portion of R6 that deals with testing 
for sub-100 kV facilities as described in the text. In addition it 
includes burden hours associated with adding Regional Entities to 
the list of entities to receive a list of circuits from the planning 
coordinator.
---------------------------------------------------------------------------

     Total Estimated Record Retention Cost = 9,750 hours @ $28/
hour = $273,000.
     Total Estimated Annual Cost (reporting + Record Retention) 
\54\ = $2,458,200.
---------------------------------------------------------------------------

    \54\ The hourly reporting cost is based on the estimated cost of 
an engineer to implement the requirements of the rule. The record 
retention cost comes from Commission staff research on record 
retention requirements.
---------------------------------------------------------------------------

     Title: Mandatory Reliability Standards for the Bulk-Power 
System.
     Action: FERC 725G, Proposed Modification to FERC-725G.
     OMB Control No: 1902-0252.
     Respondents: Business or other for profit, and/or not for 
profit institutions.
     Frequency of Responses: On occasion.
     Necessity of the Information: This proposed rule would 
approve a revised Reliability Standard that modifies an existing 
requirement regarding setting protective relays according to specific 
criteria in order to ensure that the relays reliably detect and protect 
the electric network from all fault conditions, but do not limit 
transmission loadability or interfere with system operators' ability to 
protect system reliability. Proposed Reliability Standard PRC-023-2 
requires entities to set transmission relays according to specified 
criteria and to retain evidence of compliance. It also requires 
planning coordinators to implement a test to determine which sub-200 kV 
facilities are critical to the reliability of the power system and 
subjects such facilities to the requirements of the proposed Standard. 
The proposed Reliability Standard requires entities to maintain records 
subject to review by the Commission and NERC to ensure compliance with 
the Reliability Standard.
     Internal review: The Commission has reviewed the 
requirements pertaining to the proposed Reliability Standard for the 
Bulk-Power System and determined that the proposed requirements are 
necessary to meet the statutory provisions of the Energy Policy Act of 
2005. These requirements conform to the Commission's plan for efficient 
information collection, communication and management within the energy 
industry. The Commission has assured itself, by means of internal 
review, that there is specific objective support for the burden 
estimates associated with the information requirements.
    52. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Ellen Brown, Office 
of the Executive Director, e-mail: [email protected], Phone: (202) 
502-8663, fax: (202) 273-0873]. Comments on the requirements of this 
order may also be sent to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 
For security reasons, comments should be sent by e-mail to OMB at 
[email protected]. Please reference OMB Control Number 1902-
0252 and the docket number of this Order in your submission.

V. Environmental Analysis

    53. 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.\55\ The 
actions proposed here fall within the categorical exclusion in the 
Commission's regulations for rules that are clarifying, corrective or 
procedural, for information gathering, analysis, and dissemination.\56\ 
Accordingly, neither an environmental impact statement nor 
environmental assessment is required.
---------------------------------------------------------------------------

    \55\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
Regulations Preambles 1986-1990 ] 30,783 (1987).
    \56\ 18 CFR 380.4(a)(5).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Analysis

    54. The Regulatory Flexibility Act of 1980 (RFA) \57\ generally 
requires a description and analysis of proposed and 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 order and that 
minimize any significant economic impact on a substantial number of 
small entities. The Small Business Administration's (SBA) Office of 
Size Standards develops the numerical definition of a small 
business.\58\ The SBA has established a size standard for electric 
utilities, stating that 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

[[Page 58433]]

months did not exceed four million megawatt-hours.\59\
---------------------------------------------------------------------------

    \57\ 5 U.S.C. 601-612.
    \58\ 13 CFR 121.101.
    \59\ 13 CFR 121.201, Sector 22, Utilities & n. 1.
---------------------------------------------------------------------------

    55. Proposed Reliability Standard PRC-023-2 modifies currently 
existing Reliability Standard PRC-023-1 which requires applicable 
entities to set protective relays according to specific criteria, to 
communicate about such settings with specified entities, and to conduct 
assessments to determine the applicability of the Standard to 100-200 
kV facilities. The proposed standard modifies PRC-023-1 by (1) 
Increasing communication and documentation requirements, (2) extending 
the applicability of the Standard to formerly excluded relays, and (3) 
standardizing the terms of the assessment whose terms were formerly not 
specified. In addition, proposed PRC-023-2 extends the current 
requirement that planning coordinators annually assess which 100-200 kV 
circuits must be brought into compliance with the Standard and will 
require planning coordinators to carry out the assessment with respect 
to some sub-100 kV facilities.
    56. Comparison of the NERC compliance registry with data submitted 
to the Energy Information Administration on Form EIA-861 indicates that 
perhaps as many 103 transmission owners, 329 distribution providers, 46 
generation owners, and 8 planning coordinators qualify as small 
entities. However, under NERC's compliance registration program, 
entities may be registered for multiple functions, so these numbers 
incorporate some double counting. The net number of registered entities 
that qualify as small entities responding to this rule will be 
approximately 339 entities registered as a transmission owner, a 
distribution provider, or a generation owner that is also a 
transmission owner and/or a distribution provider, and 8 planning 
coordinators. The proposed rule directly affects each of the small 
entities. Therefore, FERC has determined that this proposed rule will 
have an impact on a substantial number of small entities. However, the 
Commission has determined that the impact on entities affected by the 
proposed rule will not be significant. The Commission estimates that in 
order to comply with the Standard's modification of existing 
requirements each of the small entities registered as planning 
coordinators will face a cost of $2,680 and each of the remaining small 
entities (transmission owners, distribution providers, or generation 
owners that are also transmission owners and/or distribution providers) 
will face a cost of $3,512. Accordingly, the Commission determines that 
the incremental cost of Reliability Standard PRC-023-2 (going from PRC-
023-1 to PRC-023-2) is minimal, and should not present a significant 
operating cost to any of the small entities.
    57. Based on this understanding, the Commission certifies that this 
Reliability Standard will not have a significant economic impact on a 
substantial number of small entities. Accordingly, no regulatory 
flexibility analysis is required.
    58. The Commission invites comment from members of the public 
regarding the accuracy of the certification provided here, the economic 
analysis, and its underlying assumptions.

VII. Comment Procedures

    59. 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 21, 2011. Comments must refer to 
Docket No. RM11-16-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    60. Commenters may submit comments, identified by Docket No. RM11-
16-000 and in accordance with the requirements posted on the 
Commission's Web site, http://www.ferc.gov. Comments may be submitted 
by any of the following methods:
     Agency Web site: Documents created electronically using 
word processing software should be filed in native applications or 
print-to-PDF format, and not in a scanned format, at http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery: Commenters unable to file comments 
electronically must mail or hand deliver their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426. These requirements can be found on 
the Commission's Web site, see, e.g., the ``Quick Reference Guide for 
Paper Submissions,'' available at http://www.ferc.gov/docs-filing/efiling.asp or via phone from FERC Online Support at (202) 502-6652 or 
toll-free at 1 (866) 208-3676.
    61. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    62. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through 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.
    63. 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.
    64. 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].

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2011-24167 Filed 9-20-11; 8:45 am]
BILLING CODE 6717-01-P