[Federal Register Volume 78, Number 145 (Monday, July 29, 2013)]
[Rules and Regulations]
[Pages 45447-45451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17813]


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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-19-000; Order No. 782]


Revisions to Modeling, Data, and Analysis Reliability Standard

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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

SUMMARY: In this Final Rule, pursuant to section 215 of the Federal 
Power Act, the Federal Energy Regulatory Commission (Commission) 
approves Modeling, Data, and Analysis (MOD) Reliability Standard MOD-
028-2, submitted to the Commission for approval by the North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization. The Commission finds that the 
proposed Reliability Standard represents an improvement over the 
currently-effective standard, MOD-028-1 because the proposed 
Reliability Standard clarifies the timing and frequency of Total 
Transfer Capability calculations needed for Available Transfer 
Capability calculations. The Commission also approves NERC's proposed 
implementation plan and retirement of the currently-effective standard.

DATES: This rule is effective September 27, 2013.

FOR FURTHER INFORMATION CONTACT:
Rachel Bryant (Legal Information), Office of General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-6155, [email protected].
Syed Ahmad (Technical Information), Office of Electric Reliability, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8718, [email protected].
Christopher Young (Technical Information), Office of Energy of Energy 
Policy and Innovation, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, (202) 502-6403, 
[email protected].

SUPPLEMENTARY INFORMATION: 

144 FERC ] 61,027

United States Of America

Federal Energy Regulatory Commission

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

[[Page 45448]]

Final Rule

    Issued July 18, 2013.

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves Modeling, Data, and Analysis (MOD) Reliability 
Standard MOD-028-2 submitted to the Commission by the North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization (ERO). NERC submitted one 
modification to the currently-effective Reliability Standard MOD-028-1, 
pertaining to the information a transmission service provider \2\ must 
include when calculating Total Transfer Capability (TTC) using the area 
interchange methodology for the on-peak and off-peak intra-day and next 
day time periods. The Commission also approves NERC's proposed 
implementation plan and retirement of the currently-effective 
Reliability Standard MOD-028-1.
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o (2006).
    \2\ NERC defines ``transmission service provider'' as ``[t]he 
entity that administers the transmission tariff and provides 
Transmission Service to Transmission Customers under applicable 
transmission service agreements.'' NERC, Glossary of Terms Used in 
NERC Reliability Standards 64 (2011), http://www.nerc.com/files/Glossary_of_Terms.pdf. We also use the term ``transmission 
operator'' in this final rule, which is defined by NERC as ``[t]he 
entity responsible for the reliability of its ``local'' transmission 
system, and that operates or directs the operations of the 
transmission facilities.'' Id. These terms indicate distinct NERC 
functional entities, to which different requirements within the same 
Reliability Standard may apply. Accordingly, in the context of 
describing the requirement of a Reliability Standard, we necessarily 
use either or both terms where appropriate.
---------------------------------------------------------------------------

I. Background

A. Mandatory Reliability Standards

    2. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval. Specifically, the Commission may 
approve, by rule or order, a proposed Reliability Standard or 
modification to a Reliability Standard if it determines that the 
Standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest.\3\ Once approved, the 
Reliability Standards may be enforced by the ERO, subject to Commission 
oversight, or by the Commission independently.\4\ Pursuant to section 
215 of the FPA, the Commission established a process to select and 
certify an ERO,\5\ and subsequently certified NERC.\6\
---------------------------------------------------------------------------

    \3\ Id. 824o(d)(2).
    \4\ Id. 824o(e)(3).
    \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 (D.C. Cir. 2009).
---------------------------------------------------------------------------

    3. In March 2007, the Commission issued Order No. 693, evaluating 
107 Reliability Standards, including 23 MOD standards pertaining to 
methodologies for calculating Available Transfer Capability (ATC) and 
Available Flowgate Capability (AFC).\7\ The Commission approved one out 
of the 23 MOD standards unconditionally, approved nine with direction 
for modification and left the remaining 13 pending with direction for 
modification.\8\
---------------------------------------------------------------------------

    \7\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, at P 1046, order on 
reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007). See also 
Preventing Undue Discrimination and Preference in Transmission 
Service, Order No. 890, FERC Stats. & Regs. ] 31,241, order on 
reh'g, Order No. 890-A, FERC Stats. & Regs. ] 31,261 (2007), order 
on reh'g, Order No. 890-B, 123 FERC ] 61,299 (2008), order on reh'g, 
Order No. 890-C, 126 FERC ] 61,228 (2009) (directing public 
utilities to develop Reliability Standards and business practices to 
improve the consistency and transparency of ATC calculations).
    \8\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1010.
---------------------------------------------------------------------------

    4. On November 24, 2009, the Commission issued Order No. 729,\9\ 
which approved Available Transmission System Capability Reliability 
Standard MOD-001-1 as part of a set of Reliability Standards that 
pertain to methodologies for the consistent and transparent calculation 
of ATC and AFC. These Reliability Standards were designed to ensure, 
among other things, that transmission service providers maintain 
awareness of available system capability and future flows on their own 
systems, as well as those of their neighbors, and to reduce 
transmission service provider discretion and enhance transparency in 
the calculation of ATC.\10\ Requirement R1 of MOD-001-1 required a 
transmission operator to select one of three methodologies for 
calculation of ATC or AFC for each available ATC path for each time 
frame (hourly, daily or monthly). NERC developed these three 
methodologies as detailed in Reliability Standards MOD-028-1 (the area 
interchange methodology), MOD-029-1a (the rated system path 
methodology), and MOD-030-2 (the flowgate methodology).\11\
---------------------------------------------------------------------------

    \9\ Mandatory Reliability Standards for the Calculation of 
Available Transfer Capability, Capacity Benefit Margins, 
Transmission Reliability Margins, Total Transfer Capability, and 
Existing Transmission Commitments and Mandatory Reliability 
Standards for the Bulk Power System, Order No. 729, 129 FERC ] 
61,155 (2009), order on clarification, Order No. 729-A, 131 FERC ] 
61,109, order on reh'g and reconsideration, Order No. 729-B, 132 
FERC ] 61,027 (2010).
    \10\ Order No. 729, 129 FERC ] 61,155 at PP 87-89.
    \11\ Id. P 51.
---------------------------------------------------------------------------

    5. The MOD Reliability Standards require certain users, owners, and 
operators of the bulk power system to develop consistent and 
transparent methodologies for the calculation of ATC or AFC.\12\ Three 
currently-effective Reliability Standards--MOD-028-1, MOD-029-1a, and 
MOD-030-2--address three different methodologies for calculating ATC or 
AFC.\13\ MOD-028-1, which describes the area interchange methodology 
for determining ATC, only applies to those transmission operators and 
transmission service providers that elect to implement this particular 
methodology as part of their reliability compliance with Reliability 
Standard MOD-001-1. MOD-001-1 requires transmission service providers 
to ``[adhere] to a specific documented and transparent methodology'' 
and ``to select one of three methodologies for calculating [ATC] or 
[AFC] for each available transfer capability path for each time frame 
(hourly, daily or monthly) for the facilities in its area.\14\
---------------------------------------------------------------------------

    \12\ Id. P 1.
    \13\ Id. P 51.
    \14\ Id. P 19.
---------------------------------------------------------------------------

    6. Requirement R3.1 of MOD-028-1 details the information a 
transmission operator must include in its TTC determination under the 
area interchange methodology for the on-peak and off-peak intra-day and 
next day time periods, as well as future days two through 31 and for 
months two through 13.\15\
---------------------------------------------------------------------------

    \15\ Id. P 57 (stating that this information includes: expected 
generation and transmission outages, additions, and retirements; 
load forecasts; and unit commitment and dispatch order).
---------------------------------------------------------------------------

B. NERC Petition

    7. On August 24, 2012, NERC submitted a Petition for Approval of 
Proposed Reliability Standard (Petition), seeking Commission approval 
of a proposed Reliability Standard, MOD-028-2, Area Interchange 
Methodology, Requirement R3.1, which would revise the currently 
effective ``Version 1'' standard--MOD-028-1.
    8. NERC stated that Florida Power & Light Company (FPL) requested 
that NERC interpret MOD-028-1, Requirement R3.1. Specifically, FPL 
requested that NERC clarify whether Requirement R3.1, which instructs 
transmission operators to include data

[[Page 45449]]

``[f]or on peak and off peak intra-day and next day TTCs,'' actually 
requires transmission operators to provide separate TTC numbers for 
different portions of the current day. NERC explained that, upon 
reviewing FPL's request for interpretation, the NERC Standards 
Committee determined that providing this clarification might require a 
modification to the Standard.\16\ In its Petition, NERC asserted that 
it intended the language of MOD-028-1 to specify that, for TTC used in 
current-day and next-day ATC calculations, the load forecast used 
should be consistent with the period being calculated. Specifically, 
NERC stated:

    \16\ Petition, Exhibit E (Record of Development of Proposed 
Reliability Standard).
---------------------------------------------------------------------------

    Requirement R3 of the MOD-028-1 standard is proposed to be 
modified to clarify language regarding load forecasting, to indicate 
that for days two through 31, a daily load forecast is required 
(identical to the current standard); for months two through 13, a 
monthly load forecast is required (identical to the current 
standard); and for current-day and next-day, entities may use either 
a daily or hourly load forecast (the language being clarified). The 
new language clarifies and is consistent with the intent of the 
original requirement language, and does not materially change the 
standard.\17\

    \17\ Petition at 7 (emphasis added).
---------------------------------------------------------------------------

    9. NERC thus proposed Reliability Standard MOD-028-2, which revises 
MOD-028-1 as follows:
[GRAPHIC] [TIFF OMITTED] TR29JY13.010

C. Notice of Proposed Rulemaking

    10. On March 21, 2013, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) proposing to approve Reliability Standard MOD-028-2 
as just, reasonable, not unduly discriminatory or preferential, and in 
the public interest.\18\ The Commission proposed to approve Reliability 
Standard MOD-028-2 after determining that it clarified requirement R3.1 
of Reliability Standard MOD-028-1 and did not present reliability 
concerns.
---------------------------------------------------------------------------

    \18\ Revisions to Modeling, Data, and Analysis Reliability 
Standard, Notice of Proposed Rulemaking, 78 FR 19,152 (Mar. 29, 
2013), 142 FERC ] 61,210 (2013).
---------------------------------------------------------------------------

    11. While proposing to approve Reliability Standard MOD-028-2, the 
NOPR also identified possible market implications of NERC's proposed 
modification to requirement R3.1. The NOPR stated that, although NERC's 
statutory functions are properly focused on the reliability of the 
Bulk-Power System, the Commission has determined that the ERO should 
also attempt to develop Reliability Standards that have no undue 
negative effect on competition.\19\
---------------------------------------------------------------------------

    \19\ Id. P 11 (citing Order No. 729, 129 FERC ] 61,155 at PP 
109, 135).
---------------------------------------------------------------------------

    12. The NOPR stated that NERC's proposed revision to requirement 
R3.1.2 allows a transmission operator flexibility to choose either a 
daily or hourly load forecast when forecasting current-day and next-day 
TTC. The NOPR sought comments regarding whether a transmission operator 
could potentially use a load forecast assumption that is not applicable 
to the period being calculated. As an example, the NOPR stated that a 
transmission operator using daily on-peak load forecasts in determining 
off-peak TTC for the current day could, either purposefully or 
inadvertently, suppress off-peak ATC used by generators that make off-
peak sales, or other customers who purchase hourly service.
    13. Comments in support of the NOPR were filed by NERC and Southern

[[Page 45450]]

Company Services, Inc., acting as agent for Alabama Power Company, 
Georgia Power Company, Gulf Power Company, and Mississippi Power 
Company (Southern Company Services).

II. Discussion

    14. Pursuant to section 215(d)(2) of the FPA, we approve 
Reliability Standard MOD-028-2 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
Commission also approves NERC's proposed implementation plan, i.e., 
that the standard shall become effective on the first day of the first 
calendar quarter after Commission approval, and retirement of the 
currently-effective Reliability Standard MOD-028-1. NERC's clarifying 
revision to Requirement R3.1.2 of MOD-028-2 allows a transmission 
operator the flexibility to choose either a daily or hourly load 
forecast when forecasting current-day and next-day TTC. This revision 
does not present reliability concerns.
    15. In the NOPR, the Commission asked for comment on a potential 
market-related concern regarding whether a transmission operator using 
daily on-peak load forecasts in determining off-peak TTC for the 
current day could, either purposefully or inadvertently, suppress off-
peak ATC used by generators that make off-peak sales, or other 
customers who purchase hourly service. In response to the NOPR, two 
entities submitted comments, both supporting Commission approval of 
MOD-028-2. Southern Company Services comments that the flexibility in 
Requirement R3.1 does not give rise to the potential for undue 
discrimination in ATC calculations. NERC states that the proposed 
modification to Reliability Standard MOD-028-2 clarifies the existing 
language and provides flexibility for operators to select a methodology 
that best fits their needs. NERC comments that it ``expect[s] that 
entities will implement proposed Reliability Standard MOD-028-2 
consistent with their existing legal obligations, i.e., pursuant to 
open access transmission tariffs, etc.'' \20\ NERC adds that, ``while 
it might be possible for an entity to use a load forecast assumption 
that is not applicable to the period being calculated, the Commission 
can mitigate such risks through complaints and the Commission's market 
oversight authority.'' \21\
---------------------------------------------------------------------------

    \20\ NERC Comments at 3-4.
    \21\ Id. at 3.
---------------------------------------------------------------------------

    16. We are satisfied that the modification to Requirement R3.1 does 
not give rise to any immediate market-related concerns in the instant 
proceeding. No entity filed comments raising the concern that a 
transmission operator would use a load forecast assumption that is not 
applicable to the period being calculated. However, we agree with NERC 
that, consistent with Order No. 729, the risk of a transmission service 
provider using parameters and assumptions to skew its ATC values can be 
mitigated through complaints and market oversight authority.\22\ In 
addition, as NERC also acknowledges, transmission operators must 
implement the revised Reliability Standard MOD-028-2 in a manner 
consistent with their existing legal obligations, including their 
obligations under their open access transmission tariffs.\23\
---------------------------------------------------------------------------

    \22\ See Order No. 729, 129 FERC ] 61,155 at P 135.
    \23\ To the extent a market-related issue arises as a result of 
future changes to Reliability Standard MOD-028, we can address it at 
that time.
---------------------------------------------------------------------------

    17. Accordingly, pursuant to FPA section 215(d)(2), we approve 
Reliability Standard MOD-028-2.

III. Information Collection Statement

    18. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping (collections of 
information) imposed by an agency.\24\ The information contained here 
is also subject to review under section 3507(d) of the Paperwork 
Reduction Act of 1995.\25\
---------------------------------------------------------------------------

    \24\ 5 CFR 1320.11 (2012).
    \25\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    19. As stated above, the Commission previously approved, in Order 
No. 729, the Reliability Standard that is the subject of the current 
rulemaking. This Final Rule approves one revision to a previously 
approved Reliability Standard developed by NERC as the ERO. The minor 
revision relates to an existing Reliability Standard and does not add 
to or otherwise increase entities' current reporting burden. Thus, the 
revision does not materially affect the burden estimates relating to 
the currently effective version of the Reliability Standards presented 
in Order No. 729. The MOD-028-1 Reliability Standard that is subject of 
the approved revision was approved in Order No. 729, and the related 
information collection requirements were reviewed and approved, 
accordingly.\26\ The Commission submitted the revised Reliability 
Standard to OMB as a request for ``no material'' or ``nonsubstantive'' 
change \27\ at the NOPR stage. OMB approved the nonsubstantive change, 
requiring no further Commission action related to the information 
collection requirements.
---------------------------------------------------------------------------

    \26\ See Order No. 729, 129 FERC ] 61,155 at PP 307-312.
    \27\ This type of submittal means that there is no change to the 
existing burden estimates and the existing expiration date.
---------------------------------------------------------------------------

IV. Environmental Analysis

    20. 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.\28\ 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.\29\ The actions proposed 
herein fall within this categorical exclusion in the Commission's 
regulations.
---------------------------------------------------------------------------

    \28\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
Regulations Preambles 1986-1990 ] 30,783 (1987).
    \29\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    21. The Regulatory Flexibility Act of 1980 (RFA) \30\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a final rule and that minimize any 
significant economic impact on a substantial number of small entities. 
The Small Business Administration's Office of Size Standards develops 
the numerical definition of a small business.\31\ For electric 
utilities, a firm is small if, including its affiliates, it is 
primarily engaged in the transmission, generation and/or distribution 
of electric energy for sale and its total electric output for the 
preceding twelve months did not exceed four million megawatt hours. The 
Commission does not expect the revision adopted herein to materially 
affect the cost for small entities to comply with the proposed 
Reliability Standard. As discussed above, the clarifying revision 
allows transmission service providers more flexibility in calculating 
ATC and only de minimis costs are associated with implementation of the 
revision. Therefore, the Commission certifies that the Final Rule will 
not have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \30\ 5 U.S.C. 601-612.
    \31\ See 13 CFR 121.201.

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

[[Page 45451]]

VI. Document Availability

    22. 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.
    23. 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.
    24. 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].

VII. Effective Date and Congressional Notification

    25. These regulations are effective September 27, 2013. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB, that this rule 
is not a ``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-17813 Filed 7-26-13; 8:45 am]
BILLING CODE 6717-01-P