[Federal Register Volume 76, Number 225 (Tuesday, November 22, 2011)]
[Notices]
[Pages 72197-72202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30116]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[137 FERC ] 61,131; Docket No. RD11-3-000]


Before Commissioners: Jon Wellinghoff, Chairman; Philip D. 
Moeller, John R. Norris, and Cheryl A. LaFleur; North American Electric 
Reliability Corporation; Order Approving Reliability Standard

    1. On January 28, 2011, the North American Electric Reliability 
Corporation (NERC) submitted a petition seeking approval of a revised 
Facilities Design, Connections, and Maintenance (FAC) Reliability 
Standard FAC-013-2--Assessment of Transfer Capability for the Near-Term 
Transmission Planning Horizon, pursuant to section 215(d)(1) of the 
Federal Power Act (FPA) \1\ and section 39.5 of the Commission's 
regulations.\2\ The revised Reliability Standard requires planning 
coordinators to have a transparent methodology for, and to annually 
perform, an assessment of transmission transfer capability for the 
Near-Term Transmission Planning Horizon, as a basis for identifying 
system weaknesses or limiting facilities that could limit energy 
transfers in the future. NERC also requests approval of two new terms 
utilized in the proposed Reliability Standard, to be included in NERC's 
Glossary of Terms Used in NERC Reliability Standards (NERC Glossary or 
Glossary). Finally, NERC requests approval of its implementation plan 
for Reliability Standard FAC-013-2, setting an effective date that will 
allow planning coordinators a reasonable time, after certain related 
Modeling, Data, and Analysis (MOD) Reliability Standards have gone into 
effect, to meet the requirements of the revised Reliability Standard.
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    \1\ 16 U.S.C. 824o(d)(1) (2006).
    \2\ 18 CFR 39.5 (2011).
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    2. As explained below, we find that revised Reliability Standard 
FAC-013-2 (including the associated new Glossary terms and 
implementation plan) is just, reasonable, not unduly discriminatory or 
preferential and in the public interest. We accept the violation risk 
factors and violation severity levels associated with the standard as 
proposed by NERC, with three exceptions described below. We also deny a 
request by the Electric Reliability Council of Texas (ERCOT) for an 
exemption from Reliability Standard FAC-013-2.

I. Background

    3. The Commission certified NERC as the Electric Reliability 
Organization (ERO), as defined in section 215 of the FPA, in July 
2006.\3\ In Order No. 693, the Commission reviewed an initial set of 
Reliability Standards as developed and submitted for review by NERC, 
accepting 83 standards as mandatory

[[Page 72198]]

and enforceable.\4\ In Order No. 693, the Commission, inter alia, 
accepted Reliability Standard FAC-013-1, which sets out requirements 
for communication of transfer capability calculations. In addition, the 
Commission directed NERC to modify FAC-013 so that it would apply to 
all reliability coordinators.\5\
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    \3\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
order on compliance, 118 FERC ] 61,190, order on reh'g 119 FERC ] 
61,046 (2007), aff'd sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (DC 
Cir. 2009).
    \4\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order 
No. 693-A, 120 FERC ] 61,053 (2007).
    \5\ Id. P 790, 794.
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    4. Also related to NERC's immediate proposal, the Commission, in 
Order No. 693, neither approved nor remanded Reliability Standard FAC-
012-1, which set out proposed requirements for documenting the 
methodologies used by reliability coordinators and planning authorities 
in determining transfer capability.\6\ Because additional information 
was needed regarding the standards' reference to regional 
implementation, the Commission did not act on proposed FAC-012-1, but 
directed certain changes to be included in a revised version of FAC-
012-1. In particular, the Commission stated that the standard should 
provide a framework for the calculation of transfer capabilities, 
including data inputs and modeling assumptions.\7\ Further, the 
Commission stated that the process and criteria used to determine 
transfer capabilities must be consistent with the process and criteria 
used in planning and operating the system.\8\
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    \6\ Id. P 776, 782. See also id. P 287 (discussing ``fill-in-
the-blank'' standards). NERC's proposed FAC-013-2 addresses 
directives pertaining to related to both FAC-013-1 and FAC-012-1.
    \7\ Id. P 779.
    \8\ Id. P 782.
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    5. Subsequently, as part of its submission of revised Modeling, 
Data, and Analysis (MOD) Reliability Standards, which govern the 
calculation of Available Transfer Capability (ATC), NERC requested that 
it be permitted to withdraw FAC-012-1 and retire FAC-013-1. In Order 
No. 729, the Commission found that FAC-012-1 and FAC-013-1 had not been 
wholly superseded by the revised MOD Reliability Standards because the 
revised MOD Reliability Standards did not address the calculation of 
transfer capabilities in the planning horizon.\9\ Moreover, the 
Commission found that the existing versions of FAC-012-1 (as adopted by 
NERC) and FAC-013-1 (as approved by FERC) were insufficient to address 
the Commission's concerns as stated in Order No. 693, and ordered NERC 
to develop specific modifications to comply with those outstanding 
directives.\10\
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    \9\ Mandatory Reliability Standards for the Calculation of 
Available Transfer Capability, Capacity Benefit Margins, 
Transmission Reliability Margins, Total Transfer Capability and 
Existing Transmission Commitment and Mandatory Reliability Standards 
for the Bulk-Power System, Order No. 729, 129 FERC ] 61,155, at P 
291 (2009); order on reh'g, Order No. 729-A, 131 FERC ] 61,109, 
order on reh'g, Order No. 729-B, 132 FERC ] 61,027 (2010).
    \10\ Id.
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    6. The Commission explained in Order No. 729 the potential value of 
assessing transfer capabilities in the planning horizon, as a means of 
improving the long-term reliability of the Bulk-Power System:

    The Commission recognizes that the calculation of transfer 
capabilities in the planning horizon (years one thorough five) may 
not be so accurate to support long-term scheduling of the 
transmission system but we do believe that such forecasts will be 
useful for long-term planning, in general, by measuring sufficient 
long-term capacity needed to ensure the reliable operation of the 
Bulk-Power System. Although regional planning authorities have 
developed similar efforts in response to Order No. 890, we believe 
that the requirements imposed by FAC-012 and FAC-013 need not be 
duplicative of those existing efforts and, by contrast, should be 
focused on improving the long-term reliability of the Bulk-Power 
System pursuant to the ERO's Reliability Standards.\11\
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    \11\ Id. P 290.

    Thus, the Commission directed NERC to develop modifications to FAC-
012-1 and FAC-013-1 to comply with the directives of Order No. 693 and 
to otherwise revise those Standards to be consistent with the revised 
MOD Reliability Standards.\12\
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    \12\ Id. P 291.
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II. NERC's Petition

    7. In its Petition, NERC explains that FAC-013-2 was developed in 
response to Commission directives in Order Nos. 693 and 729 (as 
discussed above) to require appropriate entities to perform an annual 
assessment of transfer capability in the planning horizon and to do so 
using data inputs and modeling assumptions that are consistent with 
other planning uses. Under Requirement R1, each planning coordinator 
must have a documented methodology for performing an annual assessment 
of transfer capability in the Near-Term Transmission Planning Horizon. 
Under Requirement R2, each planning coordinator must share its 
methodology with adjacent planning coordinators and transmission 
planners, and with other functional entities with a reliability-related 
need for the information. Under Requirement R3, planning coordinators 
must provide a documented response to comments made by an interested 
party about the methodology. Under Requirement R4, planning 
coordinators must conduct and document an annual simulation or 
assessment of transfer capability for at least one year in the Near-
Term Transmission Planning Horizon. Under Requirement R5, planning 
coordinators must make the results of the assessment available to the 
same types of parties identified in Requirement R2. Finally, under 
Requirement R6, planning coordinators must provide data to support the 
assessment if requested by identified interested parties.\13\
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    \13\ See NERC Petition at 8-10, Ex. A.
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    8. NERC explains in its Petition that the proposed Reliability 
Standard addresses the Commission's directives by requiring planning 
coordinators to undertake an annual assessment of transfer capability 
in the planning horizon, and by requiring the use of certain data 
inputs and modeling assumptions to identify future transmission system 
weaknesses or limiting facilities.
    9. NERC also requests approval of the terms ``Near-Term 
Transmission Planning Horizon'' and ``Year One'' to be added to the 
NERC Glossary. Finally, NERC proposes an implementation plan that 
includes an effective date for the revised Reliability Standard that is 
the later of (1) the first day of the calendar quarter twelve months 
after Commission approval of FAC-013-2, or (2) the first day of the 
calendar quarter six months after Reliability Standards MOD-001-1, MOD-
028-1, MOD-029-1, and MOD-030-1 go into effect.\14\ At that time, the 
plan calls for the retirement of existing Reliability Standards FAC-
012-1 and FAC-013-1.\15\
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    \14\ The relevant MOD Reliability Standards went into effect on 
April 1, 2011.
    \15\ NERC Petition at Ex. B.
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III. Notice of Filing and Responsive Pleading

    10. Notice of NERC's Petition was issued on Feb. 2, 2011 and 
published on Feb. 10, 2011 in the Federal Register, with comments, 
protests and motions to intervene due on or before Feb. 28, 2011.\16\ 
Two sets of comments were received. The Midwest Independent 
Transmission System Operator, Inc. (MISO) and the New York Independent 
System Operator, Inc. (NYISO) filed a joint set of comments asking the 
Commission to reject FAC-013-2 as duplicative of the now-effective 
Transmission Planning (TPL) Standards. In addition, the ERCOT filed a 
motion to intervene out-of-time, asking the Commission to find that 
ERCOT should

[[Page 72199]]

be exempt from FAC-013-2's requirements.
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    \16\ 76 FR 7557 (2011).
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    11. MISO and NYISO state that Reliability Standard FAC-013-2 will 
not provide any reliability benefits beyond those conferred by the 
current TPL Reliability Standards, arguing that proposed Reliability 
Standard FAC-013-2 is ``substantially similar'' to the approved TPL 
Reliability Standards in purpose and in the assessments required.\17\ 
MISO and NYISO further argue that both the proposed Reliability 
Standard and the TPL Reliability Standards (particularly TPL-002) 
require an assessment of system conditions over the Near-Term 
Transmission Planning Horizon using similar assumptions or inputs, 
including contingencies, system conditions, projected firm transfers or 
transmission uses, and system demand levels.\18\
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    \17\ MISO and NYISO Comments at 3-4.
    \18\ Id. at 4.
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    12. MISO and NYISO note that the TPL Reliability Standards require 
applicable entities not only to perform system simulations and related 
annual assessments to identify reliability issues based on current and 
projected firm transmission commitments, but also to take affirmative 
action to address any identified reliability issues based on those 
commitments. MISO and NYISO argue that the very similar assessment 
required under Reliability Standard FAC-013-2, which is intended ``to 
identify potential future Transmission System weaknesses and limiting 
Facilities that could impact the Bulk Electric System's (BES) ability 
to reliability transfer energy,'' does not provide a similar obligation 
to rectify any deficiencies identified from the assessment as is found 
in the TPL Standards, and therefore has questionable value.\19\ As an 
example, MISO and NYISO note that if an assessment performed under 
Reliability Standard FAC-013-2 found that incremental transfer 
capability was 0 MW at some point within the Near-Term Transmission 
Planning Horizon, FAC-013-2 does not provide any guidance about steps 
to be taken to address the identified weaknesses. Accordingly, MISO and 
NYISO argue that Reliability Standard FAC-013-2 is unnecessary and 
could lead to confusion with respect to the responsible entities' 
obligations to preserve the reliability of the BES.\20\
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    \19\ Id. at 5.
    \20\ Id.
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    13. Finally, MISO and NYISO note that a calculation of transfer 
capability that is set one to five years in the future (i.e., the Near-
Term Transmission Planning Horizon) does not provide any useful 
information for the future reliable operation of the system, because 
system conditions are likely to be significantly different than those 
assumed for the required assessment.\21\
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    \21\ Id. at 6.
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    14. ERCOT initially notes its support for MISO and NYISO's position 
that FAC-013-2 is unnecessary given its overlap with the requirements 
of the TPL Reliability Standards.\22\ However, if Reliability Standard 
FAC-013-2 is approved over MISO and NYISO's objections, ERCOT asks the 
Commission to provide an exemption for the ERCOT region. ERCOT notes 
that the revised Reliability Standard was developed in response to the 
Commission's directive to apply the transfer capability methodology 
requirements, as implemented in the MOD Reliability Standards, to the 
planning horizon.\23\ ERCOT states that the Commission has already 
found that the requirements of the MOD Reliability Standards governing 
the calculation of ATC provide no reliability benefit in the ERCOT 
region, essentially recognizing that ERCOT has no transmission market 
(and instead manages congestion through re-dispatch of generation), and 
that ERCOT has no interchange with neighboring regions. ERCOT argues 
that the same rationale applies for Reliability Standard FAC-013-2 with 
respect to the planning horizon, as ERCOT's reliability planning 
analyses are performed using the same assumptions as are used for 
operations.\24\
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    \22\ ERCOT Comments at 2.
    \23\ Id. at 3.
    \24\ Id. at 3-4 (noting that the Commission agreed with ERCOT's 
position that applying the MOD Reliability Standards to ERCOT would 
not provide any reliability benefits due to physical differences in 
ERCOT's transmission system (citing Order No. 729, 129 FERC ] 61,155 
at P 292-93, 296 and 298)).
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    15. ERCOT notes that the Texas Reliability Entity, Inc. (Texas RE) 
\25\ supported ERCOT's position on the propriety of an ERCOT exemption 
through comments submitted during NERC's Standards Development Process. 
Texas RE provided the following rationale for the exemption: ``ERCOT 
does not need to address transmission allocation issues either in the 
operating horizon or in the planning horizon. To the extent that ERCOT 
does planning studies to examine transfers, those studies are related 
more to economic planning than to reliability.'' \26\ ERCOT further 
argues that the Standards Drafting Team failed to draw a meaningful 
distinction between the MOD requirements regarding calculation of 
transfer capabilities in the operating horizon, which are not 
applicable to ERCOT by virtue of a FERC-granted exemption, and FAC-013-
2's requirements related to assessment of transfer capabilities in the 
planning horizon.\27\
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    \25\ Texas RE is the approved regional entity, as defined under 
FPA section 215(e)(4), for the ERCOT region, with delegated 
authority from NERC to develop, monitor, assess, and enforce 
compliance with NERC Reliability Standards within that region.
    \26\ ERCOT Comments at 5 (quoting from Texas RE Comments 
submitted to NERC in the Standards Development Process).
    \27\ Id. at 6.
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IV. Discussion

    16. Pursuant to Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214, the timely joint motion to intervene filed 
by MISO and NYISO serves to make them parties to this proceeding. 
Pursuant to Rule 214(d) of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214(d), the Commission will grant ERCOT's late-
filed motion to intervene, given its interest in the proceeding, the 
early stage of the proceeding, and the absence of undue prejudice or 
delay.

A. Reliability Standard FAC-013-2

    17. We approve Reliability Standard FAC-013-2 and find that the 
standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. We also approve the proposed 
implementation plan for Reliability Standard FAC-013-2, which would 
retire Reliability Standards FAC-012-1 and FAC-013-1 when FAC-013-2 
becomes effective. We accept the addition of the terms ``Near-Term 
Transmission Planning Horizon'' and ``Year One'' to the NERC Glossary. 
Finally, we find that the proposed Reliability Standard satisfies our 
outstanding directives in Order Nos. 693 and 729 regarding the non-
discriminatory assessment of transfer capability in the planning 
horizon.\28\
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    \28\ See Background Section above describing the pending 
Commission directives from Order No. 693 and Order No. 729.
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    18. Contrary to the arguments of MISO and NYISO, we find that 
Reliability Standard FAC-013-2 provides a unique reliability benefit 
beyond that conferred by the TPL Standards. Reliability Standard FAC-
013-2 is designed to ensure that planning coordinators perform annual 
assessments to identify potential weaknesses and limiting facilities of 
the bulk electric system. Such potential weaknesses and limitations 
could ultimately affect reliable transfers of energy. Further, in 
performing the required annual assessment, the

[[Page 72200]]

planning coordinator must consider both current approved and projected 
transmission uses.\29\
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    \29\ See proposed Reliability Standard FAC-013-2 R.1.4.4.
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    19. By contrast, the TPL Reliability Standards set out specific 
performance requirements for all transmission planners (as well as 
planning authorities and coordinators), requiring among other things a 
demonstration that each transmission planner's portion of the bulk 
electric system is designed to maintain system stability and to stay 
within thermal and voltage limits, while serving forecast customer 
demand and all projected firm (non-recallable) reserved transmission 
services.\30\ Thus, the TPL Reliability Standards do not require a 
planning assessment that reflects all projected transmission uses but, 
rather, an assessment that reflects only projected firm reserved 
transmission uses. In other words, Reliability Standard FAC-013-2 
differs from the TPL standards because the former focuses on 
identifying potential weaknesses that could limit energy transfers 
across a broader region and requires the planning coordinator to 
consider any expected transmission uses, regardless of whether they 
have been scheduled or otherwise reserved, and thereby allows for an 
assessment that may be more accurate in the outer years of the planning 
horizon.
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    \30\ See Reliability Standard TPL-001-0.1 R1.
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    20. As MISO and NYISO note, Reliability Standard FAC-013-2 does not 
impose an obligation to develop a plan to address identified 
limitations in transfer capability in the Near-Term Transmission 
Planning Horizon. However, the lack of such an obligation does not 
detract from the Reliability Standard's value as an informational tool 
for the early identification of inter-regional or intra-regional 
limitations on transfers. In Order No. 729, the Commission recognized 
that the calculation of transfer capabilities in the planning horizon 
(years one through five) may not be accurate enough to support long-
term scheduling of the transmission system.\31\ The Commission 
nonetheless determined that such forecasts would be useful ``for long-
term planning, in general, by measuring sufficient long-term capacity 
needed to ensure the reliable operation of the Bulk-Power System.'' 
\32\
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    \31\ Order No. 729, 129 FERC ] 61,155 at P 290.
    \32\ Id.
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    21. Consistent with its purpose as a planning tool with a regional 
focus, rather than a mechanism for ensuring that individual systems are 
planned to reliably meet projected load and known transmission uses, 
Reliability Standard FAC-013-2 provides the planning coordinator 
flexibility in determining what transfers to assess. Moreover, an 
assessment conducted pursuant to FAC-013-2 may include transmission 
uses that are expected but which are not yet scheduled or reserved 
(e.g., expected interconnection of a large group of renewable 
generators), and can be used as a regional coordination tool rather 
than as a means of ensuring adequate planning for reliable system 
performance. Accordingly, we find that Reliability Standard FAC-013-2 
does confer reliability benefits beyond those provided by the TPL 
Reliability Standards, and we are not persuaded by the arguments of 
MISO and NYISO on this issue.
    22. We further find that Reliability Standard FAC-013-2 satisfies 
certain outstanding directives from Order Nos. 693 and 729 which are 
not satisfied by the TPL Reliability Standards. Reliability Standard 
FAC-013-2 requires the planning coordinator to perform an annual 
assessment of transfer capability for at least one year in the Near-
Term Transmission Planning Horizon, and to document that the 
assumptions and criteria used to perform the assessment are consistent 
with the planning coordinator's planning practices. By contrast, the 
TPL Reliability Standards impose system performance requirements under 
various conditions, and do not require a specific assessment of 
transfer capabilities within a single system or across interconnected 
transmission systems. While we agree that Reliability Standard FAC-013-
2 and the TPL Reliability Standards are designed primarily to encourage 
adequate longer-term planning rather than to generate accurate measures 
of ATC or total transfer capability (TTC), we believe that our 
outstanding directives regarding the review of transfer capability 
within the planning horizon are not satisfied by the TPL Reliability 
Standards.

B. Violation Risk Factors and Violation Severity Levels

    23. We find that the violation risk factors (VRFs) assigned to 
Requirements R2, R3, R5 and R6 are consistent with the Commission's 
established guidelines and approve them as filed.\33\ However, we find 
that NERC has not adequately justified its proposed ``lower'' VRF 
designation for Requirements R1 and R4, and direct NERC to either 
provide additional justification for these VRF designations or propose 
a revised VRF designation that addresses our concerns.
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    \33\ See North American Electric Reliability Corp., 119 FERC ] 
61,145, order on reh'g, 120 FERC ] 61,145, at P 8-13 (2007); North 
American Electric Reliability Corp., 123 FERC ] 61,284, at P 20-35, 
order on reh'g & compliance, 125 FERC ] 61,212 (2008); North 
American Electric Reliability Corp., 135 FERC ] 61,166 (2011). Given 
the significant change in the scope of FAC-013-2 as compared to the 
original standards from which its requirements derive (FAC-012-1 and 
FAC-013-2), a reduction in the assigned VRF levels appears to be 
warranted for at least some of the requirements.
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    24. NERC states that Requirements R1 and R4 meet the definition of 
a ``lower'' risk requirement because they are ``strictly administrative 
in nature and are in the planning timeframe,'' and because ``it is not 
anticipated that under emergency, abnormal or restorative conditions 
violation of this requirement would affect the electric state or 
capability of the BES.'' \34\
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    \34\ NERC Petition at 33-34. The approved NERC definition for a 
``lower'' VRF designation is as follows:
    Lower Risk Requirement: Is administrative in nature and (a) is a 
requirement that, if violated, would not be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor and control the Bulk-Power System; or 
(b) is a requirement in a planning time frame that, if violated, 
would not, under the emergency, abnormal, or restorative conditions 
anticipated by the preparations, be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor, control, or restore the Bulk-Power 
System.
    See North American Electric Reliability Corporation, 119 FERC ] 
61,145, at P9, order on compliance, 121 FERC ] 61,179, at P 2 and 
Appendix A (2007).
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    25. Requirement R4 does not appear to be ``administrative in 
nature,'' in that it requires the planning coordinator to annually 
conduct a simulation assessing transfer capability on its system during 
at least one year in the near-term planning time frame. Requirement R4 
requires an affirmative action by the applicable entity, and not merely 
documentation of the results of the study.
    26. We have similar concerns with respect to R1, as it is a 
substantive requirement to adopt and document a methodology for 
assessing transfer capability that is consistent with the specific 
criteria set out in sub-requirements R1.1.2-1.5. This requirement goes 
further than mere documentation, and instead establishes the criteria 
that must be incorporated into a compliant methodology.
    27. Finally, we approve the violation severity levels (VSLs) for 
FAC-013-2 as proposed, with the exception of the VSL triggers for R1, 
which appear to contain a typographical error. The VSL language for R1, 
as filed by NERC, uses the same description for ``medium,'' ``high,'' 
and ``severe'' violations, as follows:

    The Planning Coordinator has a Transfer Capability methodology, 
but failed to

[[Page 72201]]

incorporate one of [sub-requirements 1.1 through 1.5] of Requirement 
R1 into that methodology.

    It appears that these triggers were intended to be progressive, 
i.e., the failure to incorporate one component was intended to be a 
medium level violation, as is currently stated in NERC's filed version 
of FAC-013-2, but a high level violation should require a failure to 
incorporate two components, and so on. Accordingly, we will direct NERC 
to modify the VSL language for Requirement R1 to correct this apparent 
error.
    28. For the reasons stated above, we direct NERC to submit a 
compliance filing within 60 days of issuance of this order, that (1) 
either proposes a ``medium'' VRF designation for Requirements R1 and 
R4, or provides additional justification for a ``lower'' VRF level; and 
(2) corrects the proposed VSL language for R1.

C. Applicability to ERCOT

    29. For the reasons discussed below, we are not persuaded by 
ERCOT's arguments and, therefore, deny ERCOT's request for an 
exemption. ERCOT points out that the Commission granted an exemption to 
ERCOT regarding certain modeling, data and analysis, or MOD, 
Reliability Standards and believes that the Commission should grant 
ERCOT a similar exemption regarding compliance with FAC-013-2. 
Reliability Standard FAC-013-2, however, is distinguishable from the 
MOD Reliability Standards because the MOD Reliability Standards address 
methodologies for calculating ATC and total transfer capability (TTC) 
for the purpose of allocating transmission capacity. In Order No. 729, 
the Commission agreed that the MOD Reliability Standards would not 
provide any reliability benefit to ERCOT due to physical differences in 
ERCOT's transmission system.\35\
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    \35\ Order No. 729, 129 FERC ] 61,155, at P 292-93, 296 (noting, 
inter alia, that ERCOT does not have a transmission market and 
manages transmission congestion through redispatch of generation).
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    30. In contrast to the MOD Reliability Standards, FAC-013-2 is not 
designed primarily to ensure non-discriminatory allocation of 
transmission capacity among transmission market participants, but is 
instead a planning tool, with a particular focus on identifying 
weaknesses or limitations in transfer capability between regions 
(including constrained regions within a single market such as ERCOT). 
We believe ERCOT, like other regions, will benefit from the assessment 
of potential limitations in transfer capability in the planning horizon 
over the Near-Term Transmission Planning Horizon that is required under 
FAC-013-2.
    31. Moreover, ERCOT concedes that it currently has a planning 
process in place that allows it to address ``prospective weaknesses and 
limiting facilities that may arise under all probable prospective 
operating conditions.'' \36\ That ERCOT already undertakes these kinds 
of planning assessments leads to the conclusion that such assessments 
are in fact useful to ERCOT. Incorporating an obligation to continue 
performing such an assessment as part of a mandatory and enforceable 
Reliability Standard, especially one that will provide for greater 
levels of transparency as to how the assessments are done, will not 
only provide a meaningful reliability benefit but also would presumably 
impose little additional burden on ERCOT.
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    \36\ ERCOT Comments at 7.
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V. Information Collection Statement

    32. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency action.\37\ Upon approval of a collection(s) of information, OMB 
will assign an OMB control number and an expiration date. Respondents 
subject to the filing requirements of this Order will not be penalized 
for failing to respond to these collections of information unless the 
collections of information display a valid OMB control number.
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    \37\ 5 CFR 1320.11.
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    33. The Commission will submit these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the Paperwork Reduction Act. Comments are solicited within 60 days 
of the date this order is published in the Federal Register 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. Comments 
should be submitted following the Commission's submission guidelines at 
http://www.ferc.gov/help/submission-guide.asp and should reference 
Docket No. RD11-3.
    34. Rather than creating entirely new obligations with respect to 
the assessment of transfer capability for the near-term transmission 
planning horizon, Reliability Standard FAC-013-2 upgrades the existing 
planning requirements contained in FAC-013-1 and specifically requires 
planning coordinators to have a methodology for and to perform an 
annual assessment identifying potential future transmission system 
weaknesses and limiting facilities that could impact the bulk electric 
system's ability to reliably transfer energy in the near-term 
transmission planning horizon. Thus, this Order does not impose 
entirely new burdens on the affected entities. For example, FAC-013-1 
requires each applicable entity to have a documented methodology for 
assessing transfer capability and to share the results of that 
assessment with specific entities. FAC-013-2 imposes relatively minimal 
new requirements regarding the information that must be included in the 
documented methodology, the frequency of the assessment and the number 
of days allocated to make the assessment results available to other 
entities.
    35. Burden Estimate: Our estimate below regarding the number of 
respondents is based on the NERC compliance registry as of August 29, 
2011. According to the registry, there are 80 planning authorities \38\ 
that will be involved in providing information. This Order will require 
applicable entities to review their transfer capability methodologies 
and document compliance with the Reliability Standard's requirements. 
For those planning coordinators that do not already comply with the 
Standard's requirement for having a documented methodology for 
assessing transfer capability in the Near-Term Transmission Planning 
Horizon, they will be required to update their methodology documents 
and compliance protocols. In addition, planning coordinators must 
ensure that the required assessment will be performed at least once per 
calendar year.\39\ The estimated burden for the requirements in this 
Order follow:
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    \38\ The term ``planning coordinator'' is synonymous with the 
term ``planning authority,'' in the NERC Glossary.
    \39\ While the document retention requirements are being 
increased under the new Reliability Standard (from one to three 
years), the usual and customary practice currently is to retain 
documentation needed to demonstrate compliance for the period since 
the last audit, which is on a three year schedule. In addition, 
while planning coordinators must ensure that they perform an 
appropriate transfer capability assessment at least once per year, 
they are already required to establish transfer capabilities and 
disseminate information about those capabilities. Thus, there should 
be no increase in burden other than the one-time cost of (1) setting 
up a procedure to ensure that the assessment will be performed at 
least once per year, and (2) adjusting the methodology (if needed) 
to comply with the more specific requirements set out in the new 
Reliability Standard.

[[Page 72202]]



----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                 Data collection                     Number of     responses per  respondent per   Total annual
                                                    respondents     respondent       response          hours
----------------------------------------------------------------------------------------------------------------
                                                             (A)             (B)             (C)     (A x B x C)
----------------------------------------------------------------------------------------------------------------
Review and possible revision of methodology (one-        \40\ 20               1              80           1,600
 time)..........................................
Procedure to perform the Transfer Capability                  80               1              80           6,400
 Assessment annually (one-time).................
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............  ..............           8,000
----------------------------------------------------------------------------------------------------------------

     
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    \40\ Requirement R1 applies to planning coordinators. We 
estimate that 25 percent of all planning coordinators will have to 
update their methodology documents.
---------------------------------------------------------------------------

    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements and recordkeeping burden 
associated with Reliability Standard FAC-013-2.
     Total Burden Hours for Collection: (Compliance/
Documentation) = 8,000 hours.
     Burden Hours Averaged Over Three Years \41\ = 2,667.
---------------------------------------------------------------------------

    \41\ While this is a one-time burden, information collections 
tend to be on a three year approval cycle. Therefore, we are 
averaging the one-time burden estimate over three years.
---------------------------------------------------------------------------

     Total One-Time Compliance Cost = 8,000 hours @ $120/hour = 
$960,000.
     Total First Year Cost = $960,000.
     Title: Order Approving Reliability Standard.
     Action: Proposed Collection in FERC-725A.
     OMB Control No: 1902-0244.
     Respondents: Business or other for profit, and/or not for 
profit institutions.
     Frequency of Responses: On occasion.
     Necessity of the Information: Reliability Standard FAC-
013-2 satisfies certain directives the Commission issued in Order No. 
729 requiring applicable entities to specify the framework used for 
calculating transfer capabilities in the Near-Term Transmission 
Planning Horizon and to ensure that the framework is consistent with 
the processes and criteria used for other operating and planning 
purposes. It also requires some entities to update their Transfer 
Capability methodology documents and procedures to perform assessments 
annually.
    36. 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, email: [email protected], Phone: (202) 
502-8663, fax: (202) 273-0873].

VI. Effective Date

    37. This order will become effective January 23, 2012.
    The Commission orders:
    (A) Reliability Standard FAC-013-2 is hereby approved as just, 
reasonable, not unduly discriminatory, and in the public interest.
    (B) NERC's addition of the terms ``Year One'' and ``Near-Term 
Transmission Planning Horizon'' to the NERC Glossary is hereby 
approved.
    (C) NERC's proposed implementation plan for Reliability Standard 
FAC-013-2 is hereby approved, including the retirement of existing 
Reliability Standards FAC-012-1 and FAC-013-1 upon the effective date 
of Reliability Standard FAC-013-2.
    (D) The VRF levels and VSL levels proposed for FAC-013-2 are 
approved with the exceptions discussed above, and NERC is directed to 
submit a compliance filing within 60 days of this order addressing the 
Commission's stated concerns with respect to the VRF levels of R1 and 
R4 and the VSL language of R1.

    By the Commission. Commissioner Spitzer is not participating.
    Dated: Issued November 17, 2011.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2011-30116 Filed 11-21-11; 8:45 am]
BILLING CODE 6717-01-P