[Federal Register Volume 78, Number 79 (Wednesday, April 24, 2013)]
[Proposed Rules]
[Pages 24101-24107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09645]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 78, No. 79 / Wednesday, April 24, 2013 / 
Proposed Rules  

[[Page 24101]]



DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-16-000]


Generator Requirements at the Transmission Interface

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission proposes to approve modifications to four existing 
Reliability Standards as submitted by the North American Electric 
Reliability Corporation (NERC), the Commission certified Electric 
Reliability Organization. Specifically, the Commission is proposing to 
approve Reliability Standards FAC-001-1 (Facility Connection 
Requirements), FAC-003-3 (Transmission Vegetation Management), PRC-004-
2.1a (Analysis and Mitigation of Transmission and Generation Protection 
System Misoperations), and PRC-005-1.1b (Transmission and Generation 
Protection System Maintenance and Testing). The proposed modifications 
improve reliability either by extending their applicability to certain 
generator interconnection facilities, or by clarifying that the 
existing Reliability Standard is and remains applicable to generator 
interconnection facilities. The Commission also proposes to approve the 
related Violation Risk Factors and Violation Severity Levels, as well 
as the implementation plan and effective dates proposed by NERC.
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    \1\ 16 U.S.C. 824o (2006).

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DATES: Comments are due June 24, 2013.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.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.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT: Stephanie Schmidt (Technical 
Information), Office of Electric Reliability, Division of Reliability 
Standards, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6568, [email protected]; Julie 
Greenisen (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-6362, [email protected].

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

(Issued April 18, 2013)

    1. Pursuant to section 215 of the Federal Power Act (FPA),\2\ the 
Commission proposes to approve modifications to four existing 
Reliability Standards as submitted by the North American Electric 
Reliability Corporation (NERC), the Commission certified Electric 
Reliability Organization. Specifically, the Commission is proposing to 
approve Reliability Standards FAC-001-1 (Facility Connection 
Requirements), FAC-003-3 (Transmission Vegetation Management), PRC-004-
2.1a (Analysis and Mitigation of Transmission and Generation Protection 
System Misoperations), and PRC-005-1.1b (Transmission and Generation 
Protection System Maintenance and Testing). The proposed modifications 
improve reliability either by extending their applicability to certain 
generator interconnection facilities, or by clarifying that the 
existing Reliability Standard is and remains applicable to generator 
interconnection facilities. The Commission also proposes to approve the 
related Violation Risk Factors and Violation Severity Levels, as well 
as the implementation plan and effective dates proposed by NERC.
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    \2\ 16 U.S.C. 824o (2006).
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I. Background

A. Regulatory Background--Section 215 of the FPA

    2. Section 215 of the FPA requires a Commission-certified Electric 
Reliability Organization (ERO) to develop mandatory and enforceable 
Reliability Standards, which are subject to Commission review and 
approval.\3\ Once approved, the Reliability Standards may be enforced 
by the ERO subject to Commission oversight, or by the Commission 
independently.\4\
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    \3\ Id. 824o(c) and (d).
    \4\ See id. 824o(e).
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    3. In 2006, the Commission established a process to select and 
certify an ERO\5\ and, subsequently, certified NERC as the ERO.\6\ In 
2007, as part of Order No. 693, the Commission approved 83 Reliability 
Standards submitted by NERC, including initial versions of Reliability 
Standards FAC-001, FAC-003, PRC-004, and PRC-005.\7\ Further, in Order 
No. 693, the Commission approved NERC's compliance registry process, 
including NERC's Statement of Compliance Registry Criteria (Registry 
Criteria), which describes how NERC and the Regional Entities\8\ will 
identify the entities that should be registered for compliance with 
mandatory Reliability Standards.\9\ While that process allows a 
Regional Entity to register an entity over its objection, NERC's Rules 
of Procedure provide a mechanism for such an entity to seek NERC review 
of the Regional

[[Page 24102]]

Entity's registration decision and, ultimately, to appeal to the 
Commission if NERC upholds the Regional Entity's decision.\10\
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    \5\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval and 
Enforcement of Electric Reliability Standards, Order No. 672, FERC 
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC 
Stats. & Regs. ] 31,212 (2006).
    \6\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g & compliance, 117 FERC ] 61,126 (2006), aff'd 
sub nom., Alcoa, Inc. v. FERC, 564 F.3d 1342 (DC Cir. 2009).
    \7\ Mandatory Reliability Standards for the Bulk Power System, 
Order No. 693, 72 Fed. Reg. 16416 (April 4, 2007), FERC Stats. & 
Regs. ] 31,242 (2007), order on reh'g, Order No. 693-A, 120 FERC ] 
61,053 (2007).
    \8\ NERC is authorized to delegate certain authority to regional 
entities as prescribed by FPA section 215(e)(4). See 16 U.S.C. 
824o(e)(4).
    \9\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 92-95. The 
Commission has approved subsequent amendments to the Registry 
Criteria. See, e.g., North American Electric Reliability Corp., 122 
FERC ] 61,101 (2008).
    \10\ Rules of Procedure of the North American Electric 
Reliability Corporation, Rule 501.1.3.4.
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B. Related Commission Orders and Genesis of Project 2010-07

    4. In several fact-specific cases on appeal from a NERC 
registration determination, the Commission has addressed the need to 
apply Reliability Standard requirements, otherwise generally applicable 
to a registered transmission owner or transmission operator, to the 
owner or operator of a significant generator interconnection facility 
or tie-line. In New Harquahala Generating Co., LLC, 123 FERC ] 61,173 
(2008) (Harquahala), the Commission upheld NERC's registration of New 
Harquahala Generating Company (Harquahala) as a transmission owner and 
transmission operator, agreeing that Harquahala's 26-mile, 500 kV 
generator tie-line was ``material to the reliability of the bulk power 
system.''\11\ The Commission went into some detail concerning the 
impact on the transmission network of an event on Harquahala's 
facilities,\12\ and noted that it was affirming the Western Electric 
Coordinating Council's (WECC's) and NERC's findings ``based on the 
specific facts of this case.''\13\ Similarly, in Cedar Creek Wind 
Energy, LLC, 135 FERC ] 61,141 (2011) (Cedar Creek), the Commission 
upheld the registration of two wind farm owners, Milford Wind Corridor 
Phase I, LLC (Milford) and Cedar Creek Wind Energy, LLC (Cedar Creek), 
as transmission owners and transmission operators, again based on the 
specific tie-line facilities involved.\14\
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    \11\ Harquahala, 123 FERC ] 61,173 at P 44.
    \12\ See id. PP 45-55.
    \13\ Id. P 44.
    \14\ Cedar Creek Wind Energy, LLC, 135 FERC ] 61,241 (Cedar 
Creek), order on reh'g and clarification, 137 FERC ] 61,141 (2011) 
(November 17 Order), order on compliance filing, 139 FERC ] 61,214 
(2012) (Cedar Creek Compliance Order).
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    5. In both Harquahala and Cedar Creek, the Commission found that 
there would be a reliability risk if certain Reliability Standards 
generally applicable to transmission owners and operators were not also 
applied to Harquahala, Cedar Creek and Milford, and cited to specific 
Reliability Standards and requirements that should apply to those 
generators. However, the Commission recognized that it may not be 
appropriate to require these entities to comply with all Reliability 
Standards otherwise applicable to transmission owners and operators, 
and in each case ordered NERC to negotiate with the generating company 
to develop a list of transmission owner and transmission operator 
Reliability Standard requirements applicable to that individual 
entity.\15\ On December 21, 2011, NERC submitted its compliance filing 
to the Cedar Creek order identifying which standards should apply to 
the generators subject to that order. In accepting NERC's filing, the 
Commission noted that the Cedar Creek order did not preclude NERC from 
pursuing a generic approach through the standards development process 
to determine which Reliability Standards should apply to 
generators.\16\
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    \15\ See Harquahala, 123 FERC ] 61,173 at PP 56-57; Cedar Creek, 
135 FERC ] 61,241 at PP 88-89.
    \16\ Cedar Creek Compliance Order, 139 FERC ] 61,214 at P 19.
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    6. After the Harquahala decision, NERC announced the formation of 
an Ad Hoc Group for Generator Requirements at the Transmission 
Interface (Ad Hoc Group) to address concerns about perceived 
reliability gaps associated with generator interconnection 
facilities.\17\ The Ad Hoc Group issued a report (Ad Hoc Group Report) 
suggesting a fairly broad approach to address these perceived gaps, 
including proposed changes to standard applicability and requirement 
language, as well as the introduction of two new NERC Glossary 
terms.\18\ NERC initiated Project 2010-07 on January 15, 2010, 
following the issuance of a Standard Authorization Request as developed 
by the Ad Hoc Group.\19\
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    \17\ See NERC Petition at 11.
    \18\ Id.
    \19\ Id. at 11, 28.
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C. NERC Petition

    7. On July 30, 2012, NERC filed a petition (NERC Petition or 
Petition) seeking Commission approval of proposed Reliability Standards 
FAC-001-1, FAC-003-3, PRC-004-2.1a, and PRC-005-1.1b. The FAC-001 and 
FAC-003 standards currently in effect are applicable only to 
transmission owners and operators, and NERC is proposing to extend 
their applicability to certain generator interconnection facilities. By 
contrast, the current version of PRC-004 and PRC-005 do apply to 
generator owners as well as transmission owners. Accordingly, NERC 
asserts that the proposed modifications in Reliability Standards PRC-
004-2.1a and PRC-005-1.1b are designed merely to clarify that their 
requirements extend not only to protection systems associated with the 
generating facility or station itself, but also to any protection 
systems associated with the generator interconnection facilities.
    8. For FAC-001-1, and for FAC-003-3 Requirement R3, NERC requests 
an effective date of one year following the first quarter after 
regulatory approvals. For the remaining requirements of FAC-003-3, NERC 
requests an effective date of two years following the first calendar 
quarter after regulatory approvals. NERC requests that PRC-004-2.1a and 
PRC-005-1.1b become effective upon receiving required regulatory 
approvals.
1. FAC-001-1
    9. The currently effective Reliability Standard FAC-001-0 requires 
transmission owners to document, maintain, and publish facility 
connection requirements that comply with NERC, regional, and individual 
criteria for generation facilities, transmission facilities, and end-
user facilities. In its Petition, NERC proposes to modify this standard 
so that it applies to any generator owner that has executed an 
``Agreement to evaluate the reliability impact of interconnecting a 
third party Facility to the Generator Owner's existing Facility * * * 
used to interconnect to the interconnected Transmission systems (under 
FAC-002-1).'' \20\
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    \20\ Id. at Ex. B (Proposed FAC-001-1, Requirement R1).
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    10. NERC notes that the proposed modification is designed to 
address the rare circumstance where a generator owner is required by a 
regulatory body to interconnect a third party generator to the 
generator owner's interconnection facility. NERC states that such an 
arrangement could result in the generator owner being registered as a 
new functional entity (such as a transmission owner or operator).\21\ 
NERC further explains that the modification provides ``appropriate 
reliability coverage until any additional registration is required and 
ensures that the standard does not impact any Generator Owner that 
never executes an Agreement as described in the standard.'' \22\
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    \21\ Id. at 20.
    \22\ Id. at 20-21. In addition, NERC notes that minor changes 
were made to the standard to reflect that ``Facilities'' and 
``Transmission'' are defined terms, to reference ``Regional Entity'' 
instead of ``Regional Reliability Organization,'' and to reference 
``ERO'' instead of ``NERC.'' Violation Risk Factors and Violation 
Severity Levels were created for each requirement.
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2. FAC-003-3
    11. Both Reliability Standards FAC-003-1 (the currently effective 
vegetation management standard) and FAC-003-2 (the recently approved 
version of that standard) \23\ set out requirements for

[[Page 24103]]

management of vegetation for transmission owners, but do not impose any 
obligations on generator owners. NERC's proposed modifications to 
Reliability Standard FAC-003-2 would extend its requirements to a 
subset of generator owners.
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    \23\ Subsequent to NERC's filing of the Petition, the Commission 
approved Reliability Standard FAC-003-2 although the revised 
standard has not yet become effective. See Revisions to Reliability 
Standard for Transmission Vegetation Management, Order No. 777, 78 
FR 18,817 (Mar 28, 2013), 142 FERC ] 61,208 (2013).
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    12. The proposed standard revises the ``Applicability'' section of 
FAC-003-2 to indicate that the standard applies to ``Generator Owners'' 
that own overhead lines that (1) extend more than one mile beyond the 
fenced area of the generating station switchyard, or (2) do not have a 
clear line of sight from the generating station switchyard to the point 
of interconnection with a transmission owner's facility (which NERC 
refers to as ``applicable lines'').\24\ In addition, to qualify, the 
lines must meet the minimum standards for applicability associated with 
``Transmission Facilities,'' i.e., they must be operated at 200 kV or 
higher; or if operated below 200 kV, must be identified as an element 
of an Interconnection Reliability Operating Limit (IROL) under NERC 
Standard FAC-014 or as an element of a Major WECC Transfer Path. For 
generator owners with applicable lines, FAC-003-3 would impose the same 
requirements as are currently imposed on transmission owners under FAC-
003-2, including an affirmative obligation to prevent encroachments 
into a minimum clearance distance, to prepare and update a formal 
transmission vegetation management program, to implement an annual work 
plan, and to report sustained outages for qualified lines.\25\
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    \24\ ``Clear line of sight'' is the distance that can be seen by 
the average person without special instrumentation on a clear day. 
NERC Petition, Ex. B (Proposed Reliability Standard FAC-003-3 Sec.  
4.3.1, n.3).
    \25\ See NERC Petition at 21, 23.
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3. PRC-004-2.1a
    13. Currently effective Reliability Standard PRC-004-2a requires 
transmission owners, applicable distribution providers, and generator 
owners to analyze their respective protection system misoperations, and 
to develop and implement a corrective action plan to address such 
misoperations. NERC states that, while there is no reliability gap in 
the existing version of this standard, the specific wording of the 
requirement could lead to confusion as to whether the activities 
required by this Reliability Standard apply to a generator owner's 
generator interconnection facilities.\26\ Accordingly, NERC has 
proposed a modification that inserts the language ``and generator 
interconnection Facility'' into Requirement R2 (modification 
underlined):
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    \26\ Id. at 24-25.

The Generator Owner shall analyze its generator and generator 
interconnection Facility Protection System Misoperations, and shall 
develop and implement a Corrective Action Plan to avoid future 
Misoperations of a similar nature according to the Regional Entity's 
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procedures.

NERC asserts that the change to R2 ``makes clear that generator 
interconnection Facilities are also part of the Generator Owners' 
responsibility in the context of this standard.'' \27\
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    \27\ Id. at 25.
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4. PRC-005-1.1b
    14. Like the changes to Reliability Standard PRC-004, NERC states 
that the changes for proposed Reliability Standard PRC-005-1.1b are 
merely clarifying changes.\28\ As currently written, Reliability 
Standard PRC-005-1b requires transmission owners, applicable 
distribution providers, and applicable generator owners to have a 
protection system maintenance and testing program in place for any 
protection system that affects the reliability of the bulk electric 
system. NERC maintains that, as with PRC-004-2.1a described above, 
there is no reliability gap associated with the standard as currently 
written but proposes to modify the standard to make clear that any 
generator interconnection facilities are also part of the generator 
owners' responsibility.\29\ To make this clarification, NERC is 
proposing the following changes to Requirement R1 (modification 
underlined):
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    \28\ Id. at 26.
    \29\ Id. at 26-27.

Each Transmission Owner and any Distribution Provider that owns a 
transmission Protection System and each Generator Owner that owns a 
generation or generator interconnection Facility Protection System 
shall have a Protection System maintenance and testing program for 
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Protection Systems that affect the reliability of the BES * * *.

NERC has proposed similar changes as needed throughout the revised 
standard, including changes to Requirement R2 (related to documentation 
of Protection System testing and maintenance programs) and Measure M1.
5. Sufficiency
    15. NERC maintains that the changes proposed for these four 
Reliability Standards will address the reliability gap for generator 
interconnection facilities ``for the vast majority of Generator Owners 
and Generator Operators.'' \30\ NERC explains that the proposed 
modifications to these standards will result in the application of 
certain Reliability Standards to generator owners without the need to 
register them as transmission owners or transmission operators only as 
a result of the generator interconnection facilities.\31\ NERC further 
states that these are the only standards that need to be applied to 
generator owners and generator operators to ensure appropriate coverage 
of generator interconnection facilities ``[e]xcept as necessary on a 
fact-specific basis.'' \32\
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    \30\ Id. at 5.
    \31\ Id. at 12.
    \32\ Id. at 5.
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    16. NERC notes that the standard drafting team reviewed and 
assessed the Reliability Standards as identified in the Ad Hoc Group's 
Report, as well as the Reliability Standards identified in Cedar Creek. 
According to NERC, the Project 2010-07 standard drafting team reviewed 
34 Reliability Standards and 102 requirements to determine what 
requirements should be extended to generator owners and generator 
operators that own or operate generator interconnection facilities, 
many of which had also been addressed in the Ad Hoc Group's Report.\33\ 
However, the Project 2010-07 standard drafting team ultimately chose a 
different approach than that proposed in the Ad Hoc Group Report. The 
standard drafting team elected not to include clarifying language about 
a Reliability Standard's applicability to generator interconnection 
facilities in most standards otherwise applicable to generator owners 
or generator operators, and to instead focus on modifying certain 
Reliability Standards not currently applicable to generating 
entities.\34\
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    \33\ Id. at 11.
    \34\ See id. at 11-12.
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    17. NERC provides a ``technical justification'' as to why it is not 
proposing modifications to the remaining Reliability Standards 
identified in the Ad Hoc Group Report or by the Commission in Cedar 
Creek, to apply them to generator owners and generator operators with 
generator interconnection facilities.\35\ NERC acknowledges, however, 
that some generator interconnection facilities may require a more 
expansive approach:
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    \35\ See id. at 12-18, Ex. C (Technical Resource Justification 
Document).


[[Page 24104]]


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The drafting team acknowledges that some Facilities used solely to 
connect generators to the transmission system are more complex and 
may therefore require individual assessment. The reliability gaps 
associated with such Facilities should not be addressed simply 
through application of all standards applicable to Transmission 
Owners and Transmission Operators, but instead through an assessment 
of the impact of such a Facility on neighboring transmission 
Facilities. Such assessment should then be used to determine exactly 
which Reliability Standards and requirements should apply to that 
Facility and whether additional entity registration is warranted. 
This assessment should, at a minimum, be based upon the output of 
transmission planning and operating studies used by the Reliability 
Coordinator, Transmission Operator and Transmission Planner in 
complying with applicable Reliability Standards (specifically, IRO, 
TOP and TPL).\36\
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    \36\ Id. at 12-13.

    Finally, NERC notes that its Petition and the proposed 
modifications will not have the effect of de-registering any entity 
from the NERC Compliance Registry.\37\
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    \37\ Id. at 5. The Commission reads this statement to mean that 
the Petition does not propose to overturn any order the Commission 
has issued addressing an entity's registration. See, e.g., Cedar 
Creek and Harquahala.
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II. Discussion

    18. Pursuant to section 215(d)(2) of the FPA, the Commission 
proposes to approve Reliability Standards FAC-001-1, FAC-003-3, PRC-
004-2.1a, and PRC-005-1.1b as proposed by NERC.
    19. First, we find that revised Reliability Standards FAC-001-1 and 
FAC-003-3 will enhance reliability by extending current requirements to 
appropriate generator interconnection facilities. Currently, generator 
owners are not required under Reliability Standard FAC-001-1 to develop 
and make available facility connection requirements to ensure 
compliance with NERC Reliability Standards, even if a third party is 
requesting such an interconnection. Because this situation may not 
commonly arise, we agree that extending the requirements of Reliability 
Standard FAC-001 to generator owners only upon execution of an 
agreement stemming from an interconnection request, as proposed in 
Reliability Standard FAC-001-1, is a reasonable way to address the 
reliability gap that may arise from the changes in conditions resulting 
from the third party interconnection.
    20. Similarly, we agree that extending the vegetation management 
requirements of Reliability Standard FAC-003-2 to certain generator 
interconnection facilities addresses a potential reliability gap in a 
reasonable manner. While the vegetation surrounding generator 
interconnection facilities is typically regularly maintained to ensure 
the delivery of generation, there are currently no Reliability 
Standards that require generator owners to perform vegetation 
management or to maintain minimum levels of clearance between 
vegetation and significant overhead generator interconnection lines. We 
further find that the limitations on applicability to ``applicable 
lines'' as NERC proposes are reasonable. It is common for generator 
interconnection facilities of a relatively short span (i.e., less than 
one mile) to cross only areas with limited or no vegetation, i.e., 
gravel or concrete surfaces typically found in switchyards and 
immediate surrounding areas. However, with respect to lines that are 
``exempt'' based on the existence of a clear sight line to the point of 
interconnection, we emphasize that this exemption must be interpreted 
narrowly, i.e. there should be no obstructions (such as vegetation, 
geological formations, buildings, fences, curvatures in the line, etc.) 
that prevent personnel from identifying potential reliability hazards 
for the full extent of the line.\38\
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    \38\ See generally, Version One Regional Reliability Standards 
for Facilities Design, Connections, and Maintenance; Protection and 
Control; and Voltage and Reactive, Notice of Proposed Rulemaking, 
135 FERC ] 61,061, at P 79 (2010) (requesting comment on whether a 
Regional Entity should be directed to replace a blanket exemption 
for two percent of operating hours with a more specific exemption, 
and noting a concern that the exemption was ``written more broadly 
than necessary'').
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    21. We further propose to approve the clarifying language NERC has 
proposed for Reliability Standards PRC-004-2.1a and PRC-005-1.1b. Given 
the potential that the existing standards could be interpreted to 
exclude generator interconnection facilities from the responsibilities 
otherwise assigned to the generator owner, we agree that it is 
appropriate to mitigate that possibility with the clarifying 
modifications.
    22. However, further clarification of the term ``generator 
interconnection facility'' may be warranted. We understand the term to 
refer to generator interconnection tie-lines and their associated 
facilities extending from the secondary (high) side of a generator 
owner's step-up transformer(s) to the point of interconnection with the 
host transmission owner.\39\ We further understand that a generator 
owner or generator operator's compliance obligations extend to the 
generator interconnection facilities up to the point of interconnection 
with the host transmission owner. We seek comment on this 
understanding.
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    \39\ In Revisions to Electric Reliability Organization 
Definition of Bulk Electric System and Rules of Procedure, Order No. 
773, 141 FERC ] 61,236, at PP 164-65 (2012), we discussed the phrase 
``generator tie-line'' in the context of deciding whether such lines 
should be excluded from the definition of bulk electric system as 
part of a broader exclusion for radial lines and radial systems. In 
that case, the Commission found that such lines should be included 
as part of the bulk electric system definition ``[i]f the generator 
is necessary for the operation of the interconnected transmission 
network.'' Id. P 164. We are not seeking any change to the approach 
taken or the definitions used in Order No. 773, but note that the 
inclusion of a generator tie-line in the bulk electric system 
definition does not necessarily mean its owner must be registered as 
a transmission owner or operator. In fact, NERC's proposal here 
assumes such registration will usually be unnecessary so long as the 
entity, if registered as a generator owner or operator, is subject 
to the four Reliability Standards addressed here.
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    23. We recognize that the standard drafting team reviewed 34 other 
Reliability Standards and 102 requirements to assess the need for 
applicability to generator owners and generator operators, and 
determined that some of those other Reliability Standards and 
requirements already apply to generators.\40\ In its Petition, NERC 
makes clear that it is not seeking any changes to those other 
Reliability Standards and requirements, but identifies them in the 
Petition ``to provide a more complete picture of the assessments made 
by the drafting team in the course of Project 2010-07.'' \41\ The 
Commission appreciates NERC's work on this matter and its 
acknowledgement that the four Reliability Standards addressed in the 
Petition are not the only Reliability Standards that will apply to 
generators. However, the Commission concludes that the only Reliability 
Standards before the Commission for review in this proceeding are the 
four Reliability Standards described above. Therefore, this NOPR 
addresses the four Reliability Standards for which NERC seeks approval 
and makes no proposal about those other Reliability Standards and 
requirements that NERC identified in its Petition for informational 
purposes.
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    \40\ See NERC Petition at 11-18.
    \41\ Id. at 13.
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    24. Further, in its Petition, NERC explains that some facilities 
are ``complex,'' and that it may require an ``individual assessment'' 
to determine whether a Reliability Standard applies to a facility used 
to connect a generator to the grid.\42\ NERC goes on to state that such 
``assessments should then be used to determine exactly what Reliability 
Standards and requirements should apply to that Facility and whether 
additional entity registration is

[[Page 24105]]

warranted.''\43\ NERC adds that ``[t]his assessment should, at a 
minimum, be based upon the output of transmission planning and 
operating studies used by the Reliability Coordinator, Transmission 
Operator and Transmission Planner in complying with applicable 
Reliability Standards (specifically, IRO, TOP and TPL).''\44\ The 
Commission appreciates that, while certain facilities may be adequately 
addressed through a generic evaluation, other facilities may, as NERC 
indicates, require ``individual assessment'' to properly determine 
which Reliability Standards apply to a facility. Thus, our proposal to 
approve the revised Reliability Standards is based on the understanding 
that additional Reliability Standards or individual requirements may 
need to be applied to generator interconnection facilities as NERC 
acknowledges in its Petition, based on ``individual assessments.'' 
However, the Petition is vague on the specific aspects of the 
individual assessments. For instance, will the determination of which 
Reliability Standards and requirements should apply to a facility occur 
during the Feasibility Study, the System Impact Study, the Facility 
Study, or some other time? Also, based on the individual assessments, 
how will the identification of the additional Reliability Standards and 
requirements be coordinated among the transmission owners, generator 
owners and others? Therefore, we seek comment as to what circumstances 
could trigger such an individual assessment. We also seek comment on 
how NERC envisions the individual assessments will be performed as part 
of the transmission planning and operating studies NERC mentions in the 
Petition, when the individual assessments will occur, what percentage 
of generator interconnection facilities are ``complex'' and thereby 
likely to trigger such an individual assessment (including the number 
of existing generator interconnection facilities that will be required 
to adhere to additional transmission owner or transmission operator 
Reliability Standards), and how the results of the individual 
assessments will be coordinated among the interested parties.
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    \42\ Id. at 12.
    \43\ Id.
    \44\ Id. The assessment of the other Reliability Standards and 
requirements included in the Petition for informational purposes is 
the outcome of an assessment made by the standard drafting team for 
the purposes of filing the Petition.
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    25. Finally, we propose to approve the Violation Risk Factors and 
Violation Severity Levels, as well as the implementation plan and 
effective dates for each modified Reliability Standard as proposed by 
NERC, including the proposed retirement dates for the existing 
standards.

III. Information Collection Statement

    26. The following collection of information contained in the 
Proposed Rule is subject to review by the Office of Management and 
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995 (PRA).\45\ OMB's regulations require that OMB approve certain 
reporting and recordkeeping requirements (collections of information) 
imposed by an agency.\46\ Upon approval of a collection of information, 
OMB will assign an OMB control number and expiration date. Respondents 
subject to the filing or recordkeeping requirements 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.
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    \45\ 44 U.S.C. 3507(d) (2006).
    \46\ 5 CFR 1320.11 (2012).
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    27. The Commission will submit 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 the provided burden estimate, 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.
    28. This Notice of Proposed Rulemaking proposes to approve 
Reliability Standards FAC-001-1, FAC-003-3, PRC-004-2.1a, and PRC-005-
1.1b, which would replace currently effective Reliability Standards 
FAC-001-0, FAC-003-1,\47\ PRC-004-2a, and PRC-005-1b. The modifications 
proposed for PRC-004-2.1a and PRC-005-1.1b are clarifications of 
existing requirements, do not extend those existing requirements to any 
new entity or to additional facilities, and do not affect the existing 
burden related to those standards.
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    \47\ As of the date of issuance of this NOPR, the currently 
effective standard is FAC-003-1. As noted above (see n.23), we 
recently approved FAC-003-2, which has yet to go into effect.
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    29. The modifications proposed for FAC-001-1 would extend the 
obligation to document, maintain, and publish interconnection 
requirements to any generator owner that has an executed agreement with 
a third party to evaluate the reliability impact of a requested or 
required interconnection. NERC states, and we agree, that the number of 
affected generator owners is likely to be extremely small.\48\ 
Moreover, it is likely that any increase in an entity's recordkeeping 
and reporting requirements would occur through a change in that 
entity's NERC registration status in any case, i.e., NERC would likely 
be considering registration of an entity as a transmission owner. 
Accordingly, the Commission views the potential increase in 
recordkeeping and reporting burden from revised standard FAC-001-1 as 
minimal, but has provided an estimate of that burden in the table set 
out below.
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    \48\ See NERC Petition at 20.
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    30. The modifications proposed in FAC-003-3 would extend NERC's 
vegetation management requirements to certain generator interconnection 
facilities, including requirements to create and maintain records 
related to the generator owner's vegetation management work plan and 
performance of inspections. Generator owners typically already maintain 
the vegetation surrounding the right of way for the generator 
interconnection facility that connects the generating station 
switchyard to the point of interconnection with a transmission owner's 
facility. However, the proposed requirements outlined in FAC-003-3 may 
exceed a generator owner's current vegetation management program, 
particularly with respect to recordkeeping and reporting.
    31. Public Reporting Burden: The burden and cost estimates below 
are based on the increase in the reporting and recordkeeping burden 
imposed by the proposed Reliability Standards. Our estimate of the 
number of respondents affected is based on the NERC Compliance Registry 
as of March 19, 2013. According to the Compliance Registry, NERC has 
registered 892 generator owners within the United States, and we 
estimate that approximately 10 percent (or 89) of these generator 
owners have interconnection facilities that meet the proposed 
requirements for applicability of the new standard (i.e., having 
overhead lines that are greater than 200 kV or are part of an IROL or 
WECC Transfer Path, and that are either longer than one mile or without 
a clear sightline to the point of interconnection with the host 
transmission system).
    32. The burden estimates reflect the changes in the standards and 
the number of affected entities (e.g., the generator owner's one-time 
burden to

[[Page 24106]]

develop, or review and modify, an existing vegetation management 
program, and the on-going, relatively minor burden of preparing 
quarterly reports of relevant outages). Estimates for the proposed 
additional burden imposed by the NOPR in RM12-16 follow.
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    \49\ GO = Generator Owner; RE = Regional Entity. The respondents 
are generator owners, unless otherwise indicated.
    \50\ The estimates for cost per hour are derived as follows:
     $52/hour, the average of the salary plus benefits for 
an engineer and a forester, from Bureau of Labor and Statistics at 
http://bls.gov/oes/current/naics3_221000.htm
     $70/hour, the average of the salary plus benefits for a 
manager and an engineer, from Bureau of Labor and Statistics at 
http://bls.gov/oes/current/naics3_221000.htm
     $28/hour, based on a Commission staff study of record 
retention burden cost.
    \51\ Number of respondents includes 89 generator owners, who may 
be subject to the recordkeeping and reporting burdens of FAC-003 for 
the first time, and 8 Regional Entities, who may have a slight 
increase in recordkeeping and reporting requirements due to the 
increase in entities covered by the vegetation management standard.
    \52\ Regional Entities may have a de minimis increase in burden 
due to the increase in the number of entities potentially subject to 
the revised standard; that burden has been rolled into the estimated 
Average Burden Hours per Response.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Average
                                             Number of       Number of    burden hours
                FERC-725A                   respondents    responses per       per       Total annual  burden hours         Total annual cost \50\
                                               \49\         respondent      response
                                                     (1)             (2)        (3)     (1) X (2) X (3).............
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     FAC-003-3 (Transmission Vegetation Management)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Strategies, documentation, processes, &               89               1         32     2,848 (one-time)............  $148,096 one-time [@$52/hr.]
 procedures (M3).
Quarterly Reporting (Compliance 1.4)....         \51\ 97               4          0.25  97..........................  $6,790 [@$70/hr.]
Annual Veg. Inspect. Doc. (M6); annual                89               1          2     178.........................  12,460 [@$70/hr.]
 veg. work plan (M7); evidence of mgt.
 of veg. (M1 & M2), confirmed veg.
 condition (M4) & corrective action (M5).
Record Retention (Compliance 1.2).......              89               1          1     89..........................  $2,492 [@$28/hr.]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      FAC-001-1 (Facility Connection Requirements)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facility connection reqs. (R2, R3, M2, &               5               1         16     80(one-time)................  $5,600 (one-time) [@$70/hr.]
 M3).
Record Retention \52\...................               5               1          1     5...........................  $140 [@$28/hr.]
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................  ..............  ..............  ............  3,297.......................  $175,578
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Title: Mandatory Reliability Standards for the Bulk-Power System.
    Action: Proposed revisions to FERC-725A.
    OMB Control No.: 1902-0244.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time, annual, and quarterly.
    Necessity of the Information: The proposed revisions to the four 
Reliability Standards noted above are part of the implementation of the 
Congressional mandate of the Energy Policy Act of 2005, to develop 
mandatory and enforceable Reliability Standards to better ensure the 
reliability of the nation's Bulk-Power System.
    Internal Review: The Commission has reviewed the proposed revisions 
to the Reliability Standards and made a determination that its action 
is necessary to implement section 215 of the FPA. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimate associated with the 
information requirements.
    33. Interested persons may obtain information on the reporting 
requirements by contacting the following: 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].
    34. For submitting comments concerning the collection of 
information and the associated burden estimates, please send your 
comments to the Commission, and to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission, 
phone: (202) 395-4638, fax: (202) 395-7285]. For security reasons, 
comments to OMB should be submitted by email to: [email protected]. Comments submitted to OMB should include Docket 
Number RM12-04 and OMB Control Number 1902-0244.

IV. Regulatory Flexibility Act Certification

    35. The Regulatory Flexibility Act of 1980 (RFA) \53\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's (SBA's) Office of Size 
Standards develops the numerical definition of a small business.\54\ 
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 
months did not exceed four million megawatt hours.\55\
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    \53\ 5 U.S.C. 601-612 (2006).
    \54\ 13 CFR 121.101 (2012).
    \55\ 13 CFR 121.201, Sector 22, Utilities & n.1.
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    36. Proposed Reliability Standards FAC-001-1, FAC-003-3, PRC-004-
2.1a, and PRC-005-1.1b will help to ensure that generator 
interconnection facilities are properly maintained and operated. The 
number of small business entities affected is expected to be small, 
because FAC-001-1 will apply only to the small subset of generator 
owners that have executed an agreement to interconnect with a third 
party, and FAC-003-3 will only affect generator owners with overhead 
transmission lines that (1) are operated at 200 kV or

[[Page 24107]]

higher, or, are elements of an IROL or of a Major WECC Transfer Path, 
and (2) are longer than one mile or lacking in clear sightlines to the 
point of interconnection with the host transmission system.\56\ 
Comparison of the NERC Compliance Registry with data submitted to the 
Energy Information Administration on Form EIA-861 indicates that, of 
the 892 generator owners in the United States registered by NERC, 48 
qualify as small businesses. Of these, only about ten percent, or five 
entities, are expected to have qualifying interconnection facilities.
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    \56\ Some of the standards may also affect Regional Entities; 
however, they do not qualify as small entities.
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    37. For the number of small generator owners that do have 
applicable facilities, the primary cost increase is expected to be in 
documentation, recordkeeping, and reporting burdens as discussed above. 
In addition, we estimate that for each of the estimated five small 
generator owners there will be an additional cost for the two hours to 
perform the annual inspection of the lines (at $47.00 per hour,\57\ or 
an additional $94.00 per owner). Therefore, the estimated cost in the 
first year for the increased data collection and retention for these 
entities is approximately $3,144.00 per entity ($3,050.00 for the one-
time and recurring reporting and record retention requirements from the 
table above plus $94.00 for the annual inspection of the line). In 
subsequent years, after completion of the one-time recordkeeping or 
reporting requirements, the cost will be reduced. Based on the above, 
the Commission does not consider the costs associated with NERC's 
proposed revisions to the four Reliability Standards to constitute a 
significant economic impact for small entities, because it should not 
represent a significant percentage of an affected small entity's 
operating budget. Accordingly, the Commission certifies that the 
revised requirements set forth in the four Reliability Standards will 
not have a significant economic impact on a substantial number of small 
entities, and no regulatory flexibility analysis is required.
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    \57\ This wage figure is taken from the Bureau of Labor and 
Statistics at http://bls.gov/oes/current/naics3.221000.htm.
---------------------------------------------------------------------------

V. Environmental Analysis

    38. 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.\58\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\59\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
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    \58\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \59\ 18 CFR 380.4(a)(2)(ii).
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VI. Comment Procedures

    39. 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 June 24, 2013. Comments must refer to 
Docket No. RM12-16-000, and must include the commenter's name, the 
organization they represent, if applicable, and address.
    40. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    41. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    42. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    43. 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 the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    44. From the Commission'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.
    45. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-09645 Filed 4-23-13; 8:45 am]
BILLING CODE 6717-01-P