[Federal Register Volume 78, Number 230 (Friday, November 29, 2013)]
[Rules and Regulations]
[Pages 71448-71457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28626]


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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM13-13-000; Order No. 789]


Regional Reliability Standard BAL-002-WECC-2--Contingency Reserve

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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

SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy 
Regulatory Commission (Commission) approves regional Reliability 
Standard BAL-002-WECC-2 (Contingency Reserve). The North American 
Electric Reliability Corporation (NERC) and Western Electricity 
Coordinating Council (WECC) submitted the regional Reliability Standard 
to the Commission for approval. The regional Reliability Standard 
applies to balancing authorities and reserve sharing groups in the WECC 
Region and is meant to specify the quantity and types of

[[Page 71449]]

contingency reserve required to ensure reliability under normal and 
abnormal conditions.

DATES: Effective Date: This rule will become effective January 28, 
2014.

FOR FURTHER INFORMATION CONTACT: 
    Andr[eacute]s L[oacute]pez Esquerra (Technical Information), Office 
of Electric Reliability, Division of Reliability Standards, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, Telephone: (202) 502-6128, [email protected].
    Matthew Vlissides (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, Telephone: (202) 502-8408, 
[email protected].

SUPPLEMENTARY INFORMATION: 145 FERC ] 61,141, 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.

Regional Reliability Standard BAL-002-WECC-2--Contingency Reserve

Docket No. RM13-13-000

Order No. 789
Final Rule
(Issued November 21, 2013)
    1. Under section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves regional Reliability Standard BAL-002-WECC-2 
(Contingency Reserve). The North American Electric Reliability 
Corporation (NERC) and Western Electricity Coordinating Council (WECC) 
submitted the regional Reliability Standard to the Commission for 
approval. The WECC regional Reliability Standard applies to balancing 
authorities and reserve sharing groups in the WECC Region and is meant 
to specify the quantity and types of contingency reserve required to 
ensure reliability under normal and abnormal conditions.
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o.
---------------------------------------------------------------------------

    2. The Commission approves the associated violation risk factors 
(VRFs) and violation severity levels (VSLs), implementation plan, and 
effective date proposed by NERC and WECC. The Commission also approves 
the retirement of WECC regional Reliability Standard BAL-STD-002-0 
(Operating Reserves) and the removal of two WECC Regional Definitions, 
``Non-Spinning Reserve'' and ``Spinning Reserve,'' from the Glossary of 
Terms Used in NERC Reliability Standards (NERC Glossary).\2\ In 
addition, the Commission directs NERC to submit an informational filing 
after the first two years of implementation of regional Reliability 
Standard BAL-002-WECC-2 that addresses the adequacy of contingency 
reserve in the Western Interconnection.
---------------------------------------------------------------------------

    \2\ North American Electric Reliability Corporation Definitions 
Used in the Rules of Procedure, Appendix 2 to the NERC Rules of 
Procedure (effective September 3, 2013).
---------------------------------------------------------------------------

I. Background

A. Mandatory Reliability Standards

    3. Section 215(c) of the FPA requires a Commission-certified 
Electric Reliability Organization (ERO) to develop mandatory and 
enforceable Reliability Standards that are subject to Commission review 
and approval. Once approved, the Reliability Standards may be enforced 
by NERC, subject to Commission oversight, or by the Commission 
independently.\3\
---------------------------------------------------------------------------

    \3\ 16 U.S.C. 824o(e).
---------------------------------------------------------------------------

    4. A Regional Entity may develop a Reliability Standard for 
Commission approval to be effective in that region only.\4\ In Order 
No. 672, the Commission stated that:
---------------------------------------------------------------------------

    \4\ 16 U.S.C. 824o(e)(4). A Regional Entity is an entity that 
has been approved by the Commission to enforce Reliability Standards 
under delegated authority from the ERO. See 16 U.S.C. 824o(a)(7) and 
(e)(4).

    As a general matter, we will accept the following two types of 
regional differences, provided they are otherwise just, reasonable, 
not unduly discriminatory or preferential and in the public 
interest, as required under the statute: (1) a regional difference 
that is more stringent than the continent-wide Reliability Standard, 
including a regional difference that addresses matters that the 
continent-wide Reliability Standard does not; and (2) a regional 
Reliability Standard that is necessitated by a physical difference 
---------------------------------------------------------------------------
in the Bulk-Power System.\5\

    \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, at P 291, order on reh'g, Order No. 672-A, 
FERC Stats. & Regs. ] 31,212 (2006).
---------------------------------------------------------------------------

    5. On April 19, 2007, the Commission accepted delegation agreements 
between NERC and each of the eight Regional Entities.\6\ In the order, 
the Commission accepted WECC as a Regional Entity.
---------------------------------------------------------------------------

    \6\ North American Electric Reliability Corp., 119 FERC ] 
61,060, order on reh'g, 120 FERC ] 61,260 (2007).
---------------------------------------------------------------------------

B. NERC Reliability Standard BAL-002-1 (Disturbance Control 
Performance)

    6. In Order No. 693, the Commission approved NERC Reliability 
Standard BAL-002-0.\7\ On January 10, 2011, the Commission approved a 
revised version of the NERC Reliability Standard, BAL-002-1 
(Disturbance Control Performance), which NERC developed and submitted 
to address directives contained in Order No. 693.\8\ The purpose of 
NERC Reliability Standard BAL-002-1 is to ensure that a balancing 
authority is able to use its contingency reserve to balance resources 
and demand and return Interconnection frequency within defined limits 
following a Reportable Disturbance.\9\
---------------------------------------------------------------------------

    \7\ 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).
    \8\ North American Electric Reliability Corp., 134 FERC ] 61,015 
(2011).
    \9\ The NERC Glossary defines Contingency Reserve as ``[t]he 
provision of capacity deployed by the Balancing Authority to meet 
the Disturbance Control Standard (DCS) and other NERC and Regional 
Reliability Organization contingency requirements.'' The NERC 
Glossary defines Reportable Disturbance as ``[a]ny event that causes 
an [Area Control Error (ACE)] change greater than or equal to 80% of 
a Balancing Authority's or reserve sharing group's most severe 
contingency. The definition of a reportable disturbance is specified 
by each Regional Reliability Organization. This definition may not 
be retroactively adjusted in response to observed performance.''
---------------------------------------------------------------------------

C. WECC Regional Reliability Standard BAL-STD-002-0

    7. On June 8, 2007, the Commission approved WECC regional 
Reliability Standard BAL-STD-002-0, which is currently in effect.\10\ 
The Commission stated that regional Reliability Standard BAL-STD-002-0 
was more stringent than the NERC Reliability Standard BAL-002-0 because 
the WECC regional Reliability Standard required: (1) a more stringent 
minimum reserve requirement; and (2) restoration of contingency 
reserves within 60 minutes, as opposed to the 90-minute restoration 
period required by the NERC Reliability Standard BAL-002-0.\11\ The 
Commission directed WECC to make minor modifications to regional 
Reliability Standard BAL-STD-002-0. For example, the Commission 
determined that: (1) regional definitions should conform to definitions 
set forth in the NERC Glossary unless a specific deviation has been 
justified; and (2) documents that are referenced in the Reliability 
Standard should be attached to the Reliability Standards. The 
Commission also found that it is important that regional Reliability 
Standards and NERC Reliability Standards achieve a reasonable level of 
consistency in their structure so that there is a common understanding 
of the elements. Finally, the Commission directed WECC to address 
stakeholder

[[Page 71450]]

concerns regarding ambiguities in the terms ``load responsibility'' and 
``firm transaction.'' \12\
---------------------------------------------------------------------------

    \10\ North American Electric Reliability Corp., 119 FERC ] 
61,260 (2007).
    \11\ Id. P 53.
    \12\ Id. P 56.
---------------------------------------------------------------------------

D. Remanded WECC Regional Reliability Standard BAL-002-WECC-1

    8. On March 25, 2009, NERC submitted to the Commission for approval 
WECC regional Reliability Standard BAL-002-WECC-1 (Contingency 
Reserves). In Order No. 740, the Commission remanded regional 
Reliability Standard BAL-002-WECC-1.\13\ In Order No. 740, the 
Commission identified five issues with remanded regional Reliability 
Standard BAL-002-WECC-1: (1) the restoration period for contingency 
reserve; (2) the calculation of minimum contingency reserve; (3) the 
use of firm load to meet the contingency reserve requirement; (4) the 
use of demand-side management as a resource; and (5) miscellaneous 
directives.\14\
---------------------------------------------------------------------------

    \13\ Version One Regional Reliability Standard for Resource and 
Demand Balancing, Order No. 740, 75 FR 65,964, 133 FERC ] 61,063 
(2010).
    \14\ Order No. 740, 133 FERC ] 61,063 at PP 26, 39, 49, 60, 66.
---------------------------------------------------------------------------

1. Restoration Period for Contingency Reserve
    9. The Commission stated that, while the currently-effective WECC 
regional Reliability Standard BAL-STD-002-0 requires restoration of 
contingency reserve within 60 minutes, the remanded WECC regional 
Reliability Standard BAL-002-WECC-1 would have extended the restoration 
period to 90 minutes. The Commission determined that NERC and WECC did 
not justify the extension of the reserve restoration period from 60 
minutes to 90 minutes or that such an extension created an acceptable 
level of risk within the Western Interconnection.
2. Calculation of Minimum Contingency Reserve
    10. The Commission stated that WECC regional Reliability Standard 
BAL-STD-002-0 currently requires that minimum contingency reserve must 
equal the greater of: (1) the loss of generating capacity due to forced 
outages of generation or transmission equipment that would result from 
the most severe single contingency or (2) the sum of five percent of 
load responsibility served by hydro generation and seven percent of the 
load responsibility served by thermal generation. The remanded WECC 
regional Reliability Standard BAL-002-WECC-1 included a similar 
requirement, except that instead of basing the calculation of minimum 
contingency reserve on the sum of five percent of load responsibility 
served by hydro generation and seven percent of the load responsibility 
served by thermal generation, the minimum contingency reserve 
calculation would be based on the sum of three percent of load 
(generation minus station service minus net actual interchange) plus 
three percent of net generation (generation minus station service).
    11. WECC submitted eight hours of data from each of the four 
operating seasons (summer, fall, winter, and spring, both on and off-
peak), which demonstrated that the proposed methodology for calculating 
minimum contingency reserve would reduce total contingency reserve 
required in the Western Interconnection for each of the eight hours 
assessed when compared with the methodology in the currently-effective 
WECC regional Reliability Standard BAL-STD-002-0.
    12. The Commission accepted WECC's proposal, finding that ``WECC's 
proposed calculation of minimum contingency reserves is more stringent 
than the national requirement and could be part of a future proposal 
that the Commission could find to be just, reasonable, not unduly 
discriminatory or preferential, and in the public interest.'' \15\ The 
Commission observed, however, that ``WECC also states that the proposed 
regional Reliability Standard does not excuse any non-performance with 
the continent-wide Disturbance Control Standard, which requires each 
balancing authority or reserve sharing group to activate sufficient 
contingency reserve to comply with the Disturbance Control Standard.'' 
\16\
---------------------------------------------------------------------------

    \15\ Id. P 39.
    \16\ Id.
---------------------------------------------------------------------------

    13. The Commission also stated that, if WECC resubmitted its 
proposed methodology for calculating minimum contingency reserve, WECC 
and NERC could support its proposal with ``audits specifically focused 
on contingency reserves and whether the balancing authorities are 
meeting the adequacy and deliverability requirements . . . [t]his 
auditing also could address the concerns raised by some entities in 
WECC that the original eight hours of data provided in NERC's petition 
is insufficient to demonstrate that the proposed minimum contingency 
reserve requirements are sufficiently stringent to ensure that entities 
within the Western Interconnection will meet the requirements of NERC's 
continent-wide Disturbance Control Standard, BAL-002-0.'' \17\
---------------------------------------------------------------------------

    \17\ Id. P 40.
---------------------------------------------------------------------------

3. Use of Firm Load To Meet Contingency Reserve Requirement
    14. In the Notice of Proposed Rulemaking preceding Order No. 740, 
the Commission stated that, unlike the currently-effective regional 
Reliability Standard BAL-STD-002-0, the remanded regional Reliability 
Standard BAL-002-WECC-1 was not technically sound because it allowed 
balancing authorities and reserve sharing groups within WECC to use 
firm load to meet their minimum contingency reserve requirements once 
the reliability coordinator declared a capacity or energy 
emergency.\18\ However, in Order No. 740, the Commission accepted 
WECC's proposal finding that, although remanded regional Reliability 
Standard BAL-002-WECC-1 allowed balancing authorities and reserve 
sharing groups to use ``Load, other than Interruptible Load, once the 
Reliability Coordinator has declared a capacity or energy emergency,'' 
these entities would not be authorized to shed firm load unless the 
applicable reliability coordinator had issued a level 3 energy 
emergency alert pursuant to Reliability Standard EOP-002-2.1. The 
Commission directed WECC to develop revised language to clarify this 
point.\19\
---------------------------------------------------------------------------

    \18\ Id. P 43.
    \19\ Id. PP 48-49.
---------------------------------------------------------------------------

4. Demand-Side Management as a Resource
    15. The Commission determined that remanded regional Reliability 
Standard BAL-002-WECC-1 did not allow demand-side management that is 
technically capable of providing this service to be used as a resource 
for contingency reserve. The Commission directed WECC to develop 
modifications that would explicitly provide that demand-side management 
technically capable of providing this service may be used as a resource 
for both spinning and non-spinning contingency reserve.\20\
---------------------------------------------------------------------------

    \20\ Id. P 61.
---------------------------------------------------------------------------

5. Miscellaneous Directives
    16. The Commission directed WECC to consider comments regarding the 
meaning of the term ``net generation.'' The Commission also directed 
WECC to consider comments stating that the WECC regional Reliability 
Standard did not assign any responsibility or obligations on generator 
owners and generator operators, and that balancing authorities may be 
required to carry a disproportionate share of the contingency reserve 
obligation within the Western Interconnection.\21\
---------------------------------------------------------------------------

    \21\ Id. P 66.

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

[[Page 71451]]

E. Proposed Regional Reliability Standard BAL-002-WECC-2

    17. On April 12, 2013, NERC and WECC petitioned the Commission to 
approve regional Reliability Standard BAL-002-WECC-2 and the associated 
violation risk factors and violation severity levels, effective date, 
and implementation plan. The petition also requests retirement of the 
currently-effective WECC regional Reliability Standard BAL-STD-002-0 
and removal of two WECC Regional Definitions, ``Non-Spinning Reserve'' 
and ``Spinning Reserve,'' from the NERC Glossary. The petition states 
that the proposed WECC regional Reliability Standard is just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest because it satisfies the factors set forth in Order No. 
672, which the Commission applies when reviewing a proposed Reliability 
Standard.\22\
---------------------------------------------------------------------------

    \22\ Petition, Exhibit A.
---------------------------------------------------------------------------

    18. NERC states in the petition that the Resource and Demand 
Balancing (BAL) group of Reliability Standards ensure that resources 
and demand are balanced to maintain Interconnection frequency within 
limits. The petition states that the purpose of NERC Reliability 
Standard BAL-002-1 (Disturbance Control Performance) is to ensure the 
balancing authority is able to use contingency reserve to balance 
resources and demand and return Interconnection frequency within 
defined limits following a Reportable Disturbance. NERC maintains that 
the purpose of the proposed WECC regional Reliability Standard BAL-002-
WECC-2 is to provide a regional Reliability Standard that specifies the 
quantity and types of contingency reserve required to ensure 
reliability under normal and abnormal conditions.\23\
---------------------------------------------------------------------------

    \23\ Petition at 2.
---------------------------------------------------------------------------

    19. NERC asserts that the proposed regional Reliability Standard 
addresses the five issues identified in Order No. 740, which remanded 
the previously proposed WECC regional Reliability Standard BAL-002-
WECC-1. First, the petition explains that proposed regional Reliability 
Standard BAL-002-WECC-2, Requirement R1, includes a 60-minute 
restoration period for contingency reserve, which is the same as the 
currently-effective regional WECC Reliability Standard BAL-STD-002-
0.\24\
---------------------------------------------------------------------------

    \24\ Id. at 12.
---------------------------------------------------------------------------

    20. Second, the petition includes two-years of additional data to 
support the method for calculating minimum contingency reserve proposed 
in WECC regional Reliability Standard BAL-002-WECC-2, Requirement R1, 
which is the same as the calculation proposed and accepted by the 
Commission in the remanded WECC regional Reliability Standard BAL-002-
WECC-1.\25\
---------------------------------------------------------------------------

    \25\ Id. at 13-16.
---------------------------------------------------------------------------

    21. Third, the petition states that the proposed WECC regional 
Reliability Standard BAL-002-WECC-2, Requirement R1, was modified to 
clarify that balancing authorities and reserve sharing groups within 
WECC are subject to the same restrictions regarding the use of firm 
load for contingency reserve as balancing authorities elsewhere 
operating under the NERC Reliability Standards. NERC indicates that it 
has clarified the connection to the Energy Emergency Level 3 by 
incorporating language from Reliability Standard EOP-002-2.1, 
Attachment 1, Section B, into WECC regional Reliability Standard BAL-
002-WECC-2, Requirement R1.\26\
---------------------------------------------------------------------------

    \26\ Id. at 18.
---------------------------------------------------------------------------

    22. Fourth, according to the petition, WECC regional Reliability 
Standard BAL-002-WECC-2, Requirement R1 was modified to explicitly 
provide that demand-side management technically capable of providing 
the service may be used as a resource for contingency reserve.\27\
---------------------------------------------------------------------------

    \27\ Id. at 16-18.
---------------------------------------------------------------------------

    23. Fifth, the petition states that WECC regional Reliability 
Standard BAL-002-WECC-2 replaces the term ``net generation'' with the 
phrase ``generating energy values average over each Clock Hour.'' The 
petition notes that the regional Reliability Standard also includes a 
reference to Opinion No. 464, which addresses the issue of behind-the-
meter generation, in response to comments raised in the Order No. 740 
rulemaking.\28\ The petition also states that WECC regional Reliability 
Standard BAL-002-WECC-2 allows for impacted balancing authorities and 
reserve sharing groups to enter into transactions to provide 
contingency reserve for another balancing authority or procure 
contingency reserve from another balancing authority to more equitably 
allocate generation for purposes of the reserve calculation. The 
petition further states that the NERC Functional Model, Version 5, more 
closely aligns the tasks in the WECC regional Reliability Standard BAL-
002-WECC-2 with balancing authorities than to generator operators.\29\
---------------------------------------------------------------------------

    \28\ California Indep. Sys. Operation Corp., Opinion No. 464, 
104 FERC ] 61,196 (2003).
    \29\ NERC, Reliability Functional Model, Version 5 (approved May 
2010), available at http://www.nerc.com/files/Functional_Model_V5_Final_2009Dec1.pdf.
---------------------------------------------------------------------------

F. Notice of Proposed Rulemaking

    24. On July 18, 2013, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) proposing to approve regional Reliability Standard 
BAL-002-WECC-2 as just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. The Commission also proposed 
to approve the associated violation risk factors, violation severity 
levels, implementation plan, effective date, and the retirement of WECC 
regional Reliability Standard BAL-STD-002-0 (Operating Reserves) and 
the removal of two WECC Regional Definitions, ``Non-Spinning Reserve'' 
and ``Spinning Reserve,'' from the NERC Glossary. The NOPR stated that 
the WECC regional Reliability Standard is more stringent than the NERC 
Reliability Standard BAL-002-1 because the regional Reliability 
Standard requires applicable entities to restore contingency reserve 
within 60 minutes following the Disturbance Recovery Period while the 
NERC Reliability Standard only requires restoration of contingency 
reserve within 90 minutes. The NOPR also stated that the method for 
calculating minimum contingency reserve in the regional Reliability 
Standard is more stringent than Requirement R3.1 in NERC Reliability 
Standard BAL-002-1 because it requires minimum contingency reserve 
levels that will be at least equal to the NERC Reliability Standard 
minimum (i.e., equal to the most severe single contingency) and more 
often will be greater. The NOPR further stated that NERC and WECC 
addressed the directives in Order No. 740. In addition, the NOPR 
proposed to direct NERC to submit an informational filing after the 
first two years of implementation of regional Reliability Standard BAL-
002-WECC-2 that addresses the adequacy of contingency reserve in the 
Western Interconnection.
    25. In response to the NOPR, NERC and WECC, jointly, and Powerex 
Corp. (Powerex), Portland General Electric Company (Portland), 
California Independent System Operator Corporation (CAISO), and Tacoma 
Power (Tacoma) filed comments. We address below the issues raised in 
the NOPR and comments.

II. Discussion

    26. Pursuant to FPA section 215(d)(2), we approve WECC regional 
Reliability Standard BAL-002-WECC-2 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. For 
applicable entities in the WECC Region, regional Reliability Standard 
BAL-002-WECC-2 specifies

[[Page 71452]]

the quantity and types of contingency reserve required to ensure 
reliability under normal and abnormal conditions. WECC regional 
Reliability Standard is more stringent than the NERC Reliability 
Standard BAL-002-1 because the regional Reliability Standard requires 
applicable entities to restore contingency reserve within 60 minutes 
following the Disturbance Recovery Period while the NERC Reliability 
Standard only requires restoration of contingency reserve within 90 
minutes. In addition, the method for calculating minimum contingency 
reserve in the regional Reliability Standard is more stringent than 
Requirement R3.1 in NERC Reliability Standard BAL-002-1 because it 
requires minimum contingency reserve levels that will be at least equal 
to the NERC Reliability Standard minimum (i.e., equal to the most 
severe single contingency) and more often will be greater.\30\ We also 
conclude that NERC and WECC addressed the Commission's directives in 
Order No. 740. In addition to approving regional Reliability Standard 
BAL-002-WECC-2, the Commission directs NERC to submit an informational 
filing after the first two years of implementation of the regional 
Reliability Standard that addresses the adequacy of contingency reserve 
in the Western Interconnection.
---------------------------------------------------------------------------

    \30\ As stated in Order No. 740, the proposed WECC regional 
Reliability Standard does not excuse non-performance with NERC 
Reliability Standard BAL-002-1. Order No. 740, 133 FERC ] 61,063 at 
P 39.
---------------------------------------------------------------------------

    27. We discuss below the following issues raised in the NOPR and 
comments: (A) new methodology for calculating minimum contingency 
reserve; (B) elimination of interruptible imports requirement; (C) 
qualifying resources for contingency reserve; (D) use of the term 
``Load''; (E) use of net generation data to calculate contingency 
reserve; (F) violation risk factors and violation severity levels; (G) 
removal of terms from the NERC Glossary; and (H) implementation plan 
and effective date.

A. New Methodology for Calculating Minimum Contingency Reserve

NERC Petition
    28. WECC regional Reliability Standard BAL-002-WECC-2 includes a 
new methodology for calculating minimum contingency reserve, based on 
the greater of the most severe single contingency or the sum of three 
percent of load plus three percent of net generation. The new 
methodology is different from the methodology in WECC regional 
Reliability Standard BAL-STD-002-0, which is based on the greater of 
the most severe single contingency or the sum of five percent of load 
responsibility served by hydro generation and seven percent of the load 
responsibility served by thermal generation.
    29. WECC provides ``two years' worth of additional data showing the 
amount of contingency reserves that would be calculated for each 
Balancing Authority and Reserve Sharing Group under the proposed 
methodology.'' \31\ WECC states that ``during the two-year period of 
2010-2012, the average increase/decrease in Contingency Reserve 
required under the existing methodology juxtaposed to the proposed 
methodology was an average decrease of 137 MW across the Western 
Interconnection'' and that a 137 MW decrease represents ``.000932 of 
WECC's peak load and .001934 of WECC's minimum load'' within that two-
year period.\32\ WECC concludes that ``implementation of the proposed 
methodology will, on average, reduce the amount of Contingency Reserve 
held within the Interconnection; however, the average change is so 
small in comparison to the load served within the Interconnection that 
it should have no adverse impact on reliability.'' \33\

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

    \31\ Petition at 13.
    \32\ Id.
    \33\ Id. at 16.
---------------------------------------------------------------------------

NOPR
    30. In the NOPR, the Commission proposed to approve the new 
methodology and to direct NERC to submit an informational filing 
following implementation of the regional Reliability Standard that 
addresses the adequacy of contingency reserve levels in the Western 
Interconnection.
    31. The NOPR stated that, while the data submitted by NERC shows an 
average decrease of 137 MW, the data also shows that the largest single 
decrease in contingency reserve equaled 826 MW during the two-year 
study period when comparing the current and proposed methodologies.\34\ 
The NOPR observed that, at the time of the 826 MW decrease (i.e., 9/15/
10 at 14:00), the contingency reserve value using the current 
methodology for calculating minimum contingency reserve was 8259 MW 
versus 7434 MW using the new methodology. The NOPR stated that the 826 
MW decrease represented a 10 percent decrease in contingency reserve at 
that time interval.\35\ The NOPR noted that the data also show a 
widening gap over time (e.g., a difference of 114 MW at the beginning 
date but 192 MW at the end date).\36\
---------------------------------------------------------------------------

    \34\ Petition, Exhibit G (data point at date/time interval 9/15/
10 at 14:00).
    \35\ Petition at 16.
    \36\ The 114 MW and 192 MW values are calculated by plotting a 
trend line on the contingency reserve data submitted by WECC using 
the existing methodology and plotting a trend line on the 
contingency reserve data submitted by WECC using the proposed 
methodology. The initial difference between the two trend lines is 
114 MW while the difference at the end of the trend lines is 192 MW.
---------------------------------------------------------------------------

    32. The NOPR proposed to direct NERC to submit an informational 
filing to the Commission assessing contingency reserve levels in the 
Western Interconnection after the first two years of implementation of 
the regional Reliability Standard. In the information filing, NERC, in 
consultation with WECC, would provide an assessment of minimum 
contingency reserve levels in the Western Interconnection following 
implementation of the new methodology. The NOPR stated that the 
informational filing should assess whether the new methodology for 
calculating minimum contingency reserve levels has had an adverse 
impact on reliability in the Western Interconnection and should include 
the data that NERC and WECC use to assess the sufficiency of the 
minimum contingency reserve levels under the new methodology. The NOPR 
stated that such data could include, but need not be limited to an 
increase or decrease in the ``Average Percent Non-Recovery Disturbance 
Control Standards (DCS) Events,'' \37\ an increase or decrease in the 
average Contingency Reserve Restoration Period, an increase or decrease 
in the number of events larger than the minimum contingency reserve 
levels, and any other information that NERC or WECC deem relevant. The 
NOPR proposed to direct NERC to submit the informational filing to the 
Commission 90 days after the end of the two-year period following 
implementation. The NOPR stated that NERC may choose to submit the 
informational filing sooner if NERC identifies issues with contingency 
reserve levels in the Western Interconnection that may require 
immediate action, and that the Commission would review the 
informational filing to determine whether any action is necessary.
---------------------------------------------------------------------------

    \37\ See NERC, Metric AL2-4 (Average Percent Non-Recovery of 
Disturbance Control Standard (DCS) Events), available at http://www.nerc.com/pa/RAPA/ri/Pages/DCSEvents.aspx.
---------------------------------------------------------------------------

Comments
    33. NERC and WECC support the NOPR proposal. NERC commits to submit 
an informational filing that assesses whether the methodology for

[[Page 71453]]

calculating minimum contingency reserve levels has had an adverse 
impact on reliability in the Western Interconnection. NERC states that 
the informational filing will include the data used to make the 
assessment and will clarify the effect of WECC regional Reliability 
Standard BAL-002-WECC-2 on reliability in the Western Interconnection.
    34. Tacoma and Portland maintain that the new methodology for 
calculating contingency reserve is ambiguous because the methodology 
uses values based on hourly integrated load and hourly integrated 
generation (i.e., averages over the course of a given hour). Tacoma and 
Portland assert that this is a change over the use of instantaneous 
megawatt values under WECC regional Reliability Standard BAL-STD-002-0. 
Tacoma and Portland state that it is unclear how the new methodology 
should be applied because it is unclear whether the hour referred to is 
the previous hour, a forecast for the next hour, or a value for the 
hour determined after-the-fact. Tacoma states that if the hour referred 
to is the previous hour, the value will no longer be pertinent to real-
time operational data and real-time application.
    35. Portland states that the new methodology could result in 
significant reductions in contingency reserve at specific times, which 
could have an impact on frequency response capabilities. Portland also 
questions the data WECC submitted to support the new methodology. 
Portland states that three of the six entities surveyed by WECC did not 
use the previous methodology (i.e., the sum of five percent of load 
responsibility served by hydro generation and seven percent of the load 
responsibility served by thermal generation) and instead based 
contingency reserve values on the most severe single contingency. In 
addition, Portland states that ``two years of data is not enough to 
show the variability in water years for a region structured around 
hydropower.''\38\ Portland recommends requiring 10 years' worth of 
data. Portland also states that the new methodology unfairly shifts the 
burden on providing reserves to the sink balancing authorities and 
load-serving entities, which may not be able to acquire the reserves. 
Portland further states that, if the Commission approves the regional 
Reliability Standard, NERC should be required to file annual reports 
for five years instead of a single report after two years. Portland 
maintains that balancing authorities may be conservative and carry 
additional reserves in the first year and less so in later years, and 
thus requiring reporting for five years will provide a more accurate 
picture of the regional Reliability Standard's impact. Portland also 
states that NERC should provide a comparative analysis of the new 
methodology and the old methodology.
---------------------------------------------------------------------------

    \38\ Portland Comments at 4.
---------------------------------------------------------------------------

Commission Determination
    36. The Commission adopts the NOPR proposal directing NERC, in 
consultation with WECC, to submit an informational filing two years 
after implementation of WECC regional Reliability Standard BAL-002-
WECC-2 that assesses whether the new methodology for calculating 
minimum contingency reserve levels has had an adverse impact on 
reliability in the Western Interconnection. Consistent with NERC's 
comments, the informational filing should include the data that NERC 
and WECC use to assess the sufficiency of the minimum contingency 
reserve levels under the new methodology. NERC is directed to submit 
the informational filing 90 days after the end of the two-year period 
following implementation. The Commission will review the informational 
filing to determine whether any action is warranted. NERC may submit 
the informational filing sooner if NERC or WECC identifies issues with 
contingency reserve levels in the Western Interconnection that require 
more immediate action.
    37. We reject the comments submitted by Tacoma and Portland 
concerning the new methodology and informational filing. We determine 
that the use of ``hourly integrated Load'' and ``hourly integrated 
generation'' is not ambiguous or substantively different from the 
current practice of calculating contingency reserve. Regional 
Reliability Standard BAL-002-WECC-2, Requirement R1.3, explains that 
these terms are based on ``real-time hourly load and generating energy 
values averaged over each Clock Hour.'' Moreover, the term ``Clock 
Hour'' is defined in the NERC Glossary and refers to the current 
hour.\39\ In addition, using average values over the course of an hour 
is not different from what is required by regional Reliability Standard 
BAL-STD-002-0, which states in the Measures section that ``a 
Responsible Entity identified in Section A.4 must maintain 100% of 
required Operating Reserve levels based upon data averaged over each 
clock hour.'' Ultimately, regional Reliability Standard BAL-002-WECC-2, 
Requirement R1, now requires minimum contingency reserve to be 
calculated from load and generation amounts, but it does not change the 
time frame for calculating minimum contingency reserve.
---------------------------------------------------------------------------

    \39\ ``Clock Hour: The 60-minute period ending at:00. All 
surveys, measurements, and reports are based on Clock Hour periods 
unless specifically noted.'' NERC Glossary at 19.
---------------------------------------------------------------------------

    38. We also reject Portland's comment that the new methodology 
shifts the burden of providing reserves to sink balancing authorities 
and load serving entities, which may be unable to acquire the necessary 
reserves. As we stated in Order No. 740, we agree with NERC and WECC 
that the ``equal split between load and generation [in the new 
methodology] represents a reasonable balance to moderate shifts in 
Contingency Reserve responsibility and costs among the applicable 
entities.'' \40\ Moreover, Portland does not provide any evidence that 
sink balancing authorities or load-serving entities will be unable to 
acquire the necessary reserves.\41\
---------------------------------------------------------------------------

    \40\ Petition at 16; see also Order No. 740, 133 FERC ] 61,063 
at P 41.
    \41\ In developing the implementation plan, NERC recognized that 
the new methodology would require responsible entities to enter into 
contractual agreements and negotiations and allowed sufficient time 
for responsible entities to enter into such arrangements. Petition, 
Exhibit A at 5.
---------------------------------------------------------------------------

    39. With respect to Portland's concerns regarding WECC's data and 
the informational filing, the informational filing is intended to 
identify any issues regarding the adequacy of contingency reserve 
levels in the Western Interconnection and the impact on other 
reliability areas such as frequency response. We are satisfied that 
WECC provided enough representative data to conclude that the new 
methodology will likely not result in significantly less average 
contingency reserve in the Western Interconnection. However, for the 
reasons discussed above, the Commission believes that it is necessary 
to monitor and assess contingency reserve levels in the Western 
Interconnection following implementation of the regional Reliability 
Standard. We are not inclined at this time to require more than two 
years of data as Portland suggests. The Commission intends to analyze 
the two-year informational filing and determine whether it adequately 
addresses the sufficiency of the proposed required reserve levels in 
the Western Interconnection. Portland or other entities may also 
examine the filing and, if there is sufficient technical analysis that 
suggests contingency reserve levels may be inadequate, the Commission 
may direct NERC and/or WECC to submit additional informational filings 
in the future. The

[[Page 71454]]

Commission adopts the NOPR proposal to direct NERC to file an 
informational filing two years after implementation of the regional 
Reliability Standard.

B. Removal of Interruptible Imports Requirement NERC Petition

    40. Regional Reliability Standard BAL-002-WECC-2, Requirement R3, 
states that:

    Each Sink Balancing Authority and each sink Reserve Sharing 
Group shall maintain an amount of Operating Reserve, in addition to 
the minimum Contingency Reserve in Requirement R1, equal to the 
amount of Operating Reserve-Supplemental for any Interchange 
Transaction designated as part of the Source Balancing Authority's 
Operating Reserve-Supplemental or source Reserve Sharing Group's 
Operating Reserve-Supplemental, except within the first sixty 
minutes following an event requiring the activation of Contingency 
Reserve.

    41. NERC maintains that Requirement R3 is a clarification of an 
existing requirement in WECC regional Reliability Standard BAL-STD-002-
0, which requires additional reserves for interruptible imports. NERC 
explains that the standard drafting team removed the term 
``interruptible imports'' because it is not a defined term in the NERC 
Glossary and is subject to misinterpretation. NERC states that the 
standard drafting team replaced the term with clarifying language 
describing which types of transactions must be covered by additional 
reserves. NERC observes that the continent-wide Reliability Standard 
BAL-002-1 does not require reserves for Interchange Transactions 
designated as part of the source balancing authority or source reserve 
sharing group Operating Reserve-Supplemental and thus the requirement 
in the regional Reliability Standard is more stringent than the 
continent-wide Reliability Standard.
Comments
    42. Powerex maintains that, while the term ``interruptible 
imports'' has not been clearly defined by WECC or NERC, the solution is 
not to remove the term from the regional Reliability Standard. Powerex 
states that removal of interruptible imports results in an inferior 
regional Reliability Standard because it effectively eliminates any 
Reliability Standard specifying a reserve requirement for interruptible 
imports. Powerex maintains that balancing authorities will no longer be 
required to set aside any capacity to cover interruptible imports into 
their balancing authority areas. Powerex states that the interruptible 
imports requirement has served to ``differentiate an import of 
interruptible energy--a product that may be curtailed for ANY reason . 
. . from a `firm' energy import that is supported by sufficient 
generating resources within the source [balancing authority] to assure 
the energy will not be curtailed during the delivery period.'' \42\
---------------------------------------------------------------------------

    \42\ Powerex Comments at 8.
---------------------------------------------------------------------------

Commission Determination
    43. The Commission rejects Powerex's comments concerning removal of 
the term ``interruptible imports.'' The Commission agrees with NERC and 
WECC that Requirement R3 identifies the types of transactions, 
including Interchange Transactions, that must be covered by additional 
reserves. Accordingly, we disagree with Powerex that the concept of 
interruptible imports has been removed from the regional Reliability 
Standard. Replacing the term ``interruptible imports'' with the NERC-
defined term ``Interchange Transaction'' eliminates ambiguity from the 
regional Reliability Standard by including all types of Interchange 
Transactions (e.g., firm or interruptible) as it pertains to 
calculating Operating Reserve. Moreover, in response to comments during 
the standards development process, the standard drafting team 
reinforced this view in stating that ``[Requirement] R3 of the proposed 
standard directly addresses the concept of interruptible schedules and 
[Requirement] R4 addresses the concept of on-demand energy.'' \43\
---------------------------------------------------------------------------

    \43\ Petition, Exhibit C at 11.
---------------------------------------------------------------------------

    44. Powerex states that ``in WECC there exists an unacceptable lack 
of clarity with respect to reserve requirements associated with energy 
interchange scheduling.'' Powerex also ``acknowledges that the proposed 
BAL-002-WECC-2 standard alone cannot address all of these concerns, but 
believes it is premature, unwarranted, and problematic to eliminate the 
requirement that interruptible imports carry 100% reserves until these 
broader concerns are addressed by some other regulatory requirement.'' 
We disagree with Powerex that it is appropriate to condition approval 
of regional Reliability Standard BAL-002-WECC-2, and the removal of the 
term ``interruptible imports,'' on first addressing existing problems 
concerning reserve requirements associated with energy interchange 
scheduling. Instead, we agree with NERC and WECC that the regional 
Reliability Standard, in requiring additional reserves for Interchange 
Transactions, is more stringent than the continent-wide Reliability 
Standard BAL-002, and we approve the requirement on that basis.

C. Qualifying Resources for Contingency Reserve

NERC Petition
    45. WECC regional Reliability Standard BAL-002-WECC-2, Requirement 
R.1.1.2 states that contingency reserve may be comprised of any 
combination of the reserve types specified below:
    [ssquf] Operating Reserve--Spinning
    [ssquf] Operating Reserve--Supplemental
    [ssquf] Interchange Transactions designated by the Source 
Balancing.
    [ssquf] Authority as Operating Reserve--Supplemental
    [ssquf] Reserve held by other entities by agreement that is 
deliverable on Firm Transmission Service.
    [ssquf] A resource, other than generation or load, that can provide 
energy or reduce energy consumption.
    [ssquf] Load, including demand response resources, Demand-Side 
Management resources, Direct Control Load Management, Interruptible 
Load or Interruptible Demand, or any other Load made available for 
curtailment by the Balancing Authority or the Reserve Sharing Group via 
contract or agreement.
    [ssquf] All other load, not identified above, once the Reliability 
Coordinator has declared an energy emergency alert signifying that firm 
load interruption is imminent or in progress.
    46. ``Operating Reserve--Spinning'' is defined in the NERC Glossary 
to mean ``generation (synchronized or capable of being synchronized to 
the system) that is fully available to serve load within the 
Disturbance Recovery Period following the contingency event; or load 
fully removable from the system within the Disturbance Recovery Period 
following the contingency event.''
Comments
    47. CAISO seeks clarification that non-traditional resources, 
including electric storage facilities, may qualify as ``Operating 
Reserve--Spinning'' so long as they meet the technical and performance 
requirements in Requirement R2 (i.e., that the resources must be 
immediately and automatically responsive to frequency deviations 
through the action of a control system and capable of fully responding 
within ten minutes).
Commission Determination
    48. The Commission determines that non-traditional resources, 
including electric storage facilities, may qualify as ``Operating 
Reserve--Spinning''

[[Page 71455]]

provided those resources satisfy the technical and performance 
requirements in Requirement R2. Our determination is supported by the 
standard drafting team's response to a comment during the standard 
drafting process where the standard drafting team stated that 
``technologies, such as batteries, both contemplated and not yet 
contemplated are included in the standard as potential resources--so 
long as the undefined resource can meet the response characteristics 
described in the standard * * * The language does not preclude any 
specific technology; rather, the language delineates how that 
technology must [] respond.'' \44\ We also note that non-traditional 
resources could contribute to contingency reserve under the regional 
Reliability Standard if they are resources, ``other than generation or 
load, that can provide energy or reduce energy consumption.''
---------------------------------------------------------------------------

    \44\ Petition, Exhibit C at 20.
---------------------------------------------------------------------------

D. Use of the Term Load in Requirement R.1.1

NERC Petition
    49. WECC regional Reliability Standard BAL-002-WECC-2, Requirement 
R.1.1, states that minimum contingency reserve must equal the ``amount 
of Contingency Reserve equal to the loss of the most severe single 
contingency'' or the ``amount of Contingency Reserve equal to the sum 
of three percent of hourly integrated Load plus three percent of hourly 
integrated generation.''
Comments
    50. Tacoma states that the term ``Load'' is defined in the NERC 
Glossary as ``[a]n end-use device or customer that receives power from 
the electric system.'' Tacoma maintains that the term ``Load'' in 
Requirement R.1.1 cannot be interpreted to be a device or customer that 
receives power from the electric system because ``the requirement 
directs the taking of a percentage of the `Load' and treating it as a 
measurement of power, like megawatts.'' Tacoma recommends that the 
defined term ``Load'' should be replaced with the undefined term 
``load.''
Commission Determination
    51. Based on the context of Requirement R.1.1, the Commission 
understands that the use of the term ``Load'' does not refer to an end-
use device or customer. Instead, it refers to the power consumption 
associated with the end-use device or customer (i.e., Load), which is 
then applied in calculating minimum contingency reserve levels. With 
that understanding, the Commission will not direct NERC to change 
``Load'' to ``load'' in Requirement R.1.1 as requested by Tacoma. NERC 
and WECC may modify this language in the next version of the regional 
Reliability Standard.

E. Use of Net Generation Data To Calculate Contingency Reserve

NERC Petition
    52. NERC states that the ``calculation of minimum Contingency 
Reserves is based on three percent of net generation and three percent 
of net load and this fairly balances the responsibilities of 
Contingency Reserve providers with the financial obligations of those 
who would benefit most from those services.'' \45\ Requirement R1.1.3 
states that the minimum contingency reserve calculation should be based 
on ``real-time hourly load and generating energy values averaged over 
each Clock Hour (excluding Qualifying Facilities covered in 18 CFR 
292.101, as addressed in FERC Opinion 464).'' In Requirement R1.1.3, 
NERC states that the standard drafting team replaced the term ``net 
generation'' with ``generating energy values averaged over each Clock 
Hour.'' NERC maintains that the substitution was in response to 
comments in the Order No. 740 rulemaking regarding the definition of 
the term ``net generation.''
---------------------------------------------------------------------------

    \45\ Petition at 16.
---------------------------------------------------------------------------

Comments
    53. Tacoma states that changing metered data to net generation for 
real-time operations would result in undue burden and cause a delay in 
implementation because many balancing authorities do not use net 
generation in their minimum contingency reserve calculation. Tacoma 
states that it uses gross generation for real-time operations and 
includes station service within its entity load. Tacoma explains that 
it prepares annual reports that include net generation, but Tacoma 
asserts that using net generation in real-time operations will require 
``significant changes in the data and telemetry that must be available 
in real-time operations.'' \46\
---------------------------------------------------------------------------

    \46\ Tacoma Comments at 3.
---------------------------------------------------------------------------

Commission Determination
    54. The Commission notes that NERC's petition states that the 
``calculation of minimum Contingency Reserves is based on three percent 
of net generation.'' \47\ Based on NERC's description, the NOPR also 
used the term ``net generation'' at various points. However, 
Requirement R1 of WECC regional Reliability Standard BAL-002-WECC-2, by 
design, does not use the term ``net generation.'' Instead, Requirement 
R1.1.3 states that the minimum contingency reserve calculation should 
be based on ``real-time hourly load and generating energy values 
averaged over each Clock Hour (excluding Qualifying Facilities covered 
in 18 CFR 292.101, as addressed in FERC Opinion 464).'' Accordingly, 
Tacoma's concern about the use of ``net generation'' to calculate 
minimum contingency reserve is moot.
---------------------------------------------------------------------------

    \47\ Petition at 16.
---------------------------------------------------------------------------

F. Violation Risk Factors and Violation Severity Levels

    55. The petition states that each Requirement of the proposed WECC 
regional Reliability Standard BAL-002-WECC-2 includes one violation 
risk factor and one violation severity level and that the ranges of 
penalties for violations will be based on the sanctions table and 
supporting penalty determination process described in the Commission-
approved NERC Sanctions Guideline. The NOPR proposed to approve the 
violation risk factors and violation severity levels for the 
Requirements of WECC regional Reliability Standard BAL-002-WECC-2 as 
consistent with the Commission's established guidelines.\48\ The 
Commission did not receive comments regarding the proposed violation 
risk factors and violation severity levels. Accordingly, the Commission 
approves the violation risk factors and violation severity levels for 
the requirements of WECC regional Reliability Standard BAL-002-WECC-2.
---------------------------------------------------------------------------

    \48\ See North American Electric Reliability Corp., 135 FERC ] 
61,166 (2011).
---------------------------------------------------------------------------

G. Removal of Terms From NERC Glossary

    56. The petition states that proposed WECC regional Reliability 
Standard BAL-002-WECC-2 replaces the terms ``Spinning Reserve'' with 
``Operating Reserve-Spinning'' and ``Non-Spinning Reserve'' with 
``Operating Reserve-Supplemental'' to ensure comparable treatment of 
demand-side management with conventional generation, or any other 
technology, and to allow demand-side management to be considered as a 
resource for contingency reserve. The petition states that Operating 
Reserve-Spinning and Operating Reserve-Supplemental have glossary 
definitions that are inclusive of demand-side management, including 
controllable load. Accordingly, the petition seeks revision of the NERC 
Glossary to remove the two WECC Regional Definitions,

[[Page 71456]]

Non-Spinning Reserve and Spinning Reserve. With the removal of Non-
Spinning Reserve and Spinning Reserve from the proposed WECC regional 
Reliability Standard BAL-002-WECC-2, the NOPR proposed to approve 
removal of those WECC Regional Definitions from the NERC Glossary. The 
Commission did not receive comments regarding the proposed revisions to 
the NERC Glossary. Accordingly, the Commission approves the proposed 
revisions to the NERC Glossary.

H. Implementation Plan and Effective Date

    57. The petition proposes that WECC regional Reliability Standard 
BAL-002-WECC-2 become effective on the first day of the third quarter 
following applicable regulatory approval. The petition states that the 
proposed WECC regional Reliability Standard may require execution of 
contracts by some applicable entities before implementation can occur, 
and the proposed effective date allows time for applicable entities to 
finalize needed contracts. The petition also proposes to retire the 
currently-effective WECC regional Reliability Standard BAL-STD-002-0 on 
the proposed effective date.
    58. The NOPR proposed to approve the petition's implementation plan 
and effective date for the WECC regional Reliability Standard BAL-002-
WECC-2. The Commission did not receive comments regarding the proposed 
implementation plan and effective date. Accordingly, the Commission 
approves the implementation plan and effective date for WECC regional 
Reliability Standard BAL-002-WECC-2.

III. Information Collection Statement

    59. The following collection of information contained in this Final 
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).\49\ 
OMB's regulations require approval of certain information collection 
requirements imposed by agency rules.\50\ 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 a 
rule will not be penalized for failing to respond to these collections 
of information unless the collections of information display a valid 
OMB control number. The Commission solicited comments on the need for 
and the purpose of the information contained in regional Reliability 
Standard BAL-002-WECC-2 and the corresponding burden to implement the 
regional Reliability Standard. The Commission received comments on 
specific requirements in the regional Reliability Standard, which we 
address in this Final Rule. However, the Commission did not receive any 
comments on our reporting burden estimates.
---------------------------------------------------------------------------

    \49\ 44 U.S.C. 3507(d).
    \50\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    60. Public Reporting Burden: The burden and cost estimates below 
are based on the need for applicable entities to revise documentation, 
already required by the current WECC regional Reliability Standard BAL-
STD-002-0, to reflect certain changes made in WECC regional Reliability 
Standard BAL-002-WECC-2. Our estimates are based on the NERC Compliance 
Registry as of May 30, 2013, which indicates that 36 balancing 
authorities and reserve sharing groups are registered within WECC.

 
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                                                     Number of        annual      Average burden     Estimated
      Improved requirement             Year         respondents    responses per     hours  per    total annual
                                                       \51\         respondent       response      burden hours
----------------------------------------------------------------------------------------------------------------
(1)                                          (2)             (3)     (1)*(2)*(3)
----------------------------------------------------------------------------------------------------------------
Update Existing Documentation to               1              36               1          \52\ 1              36
 Conform with Proposed Regional
 Reliability Standard...........
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............              36
----------------------------------------------------------------------------------------------------------------
\51\ NERC balancing authorities and reserve sharing groups are responsible for the improved requirement.
  Further, if a single entity is registered as both a balancing authority and reserve sharing group, that entity
  is counted as one unique entity.
\52\ The Commission bases the hourly reporting burden on the time for an engineer to implement the requirements
  of the final rule.

    Estimated Total Annual Burden Hours for Collection: (Compliance/
Documentation) = 36 hours
    Costs to Comply with PRA:
     Year 1: $2,160.
     Year 2 and ongoing: $0.
    61. Year 1 costs include updating existing documentation, already 
required by the current WECC regional Reliability Standard BAL-STD-002-
0, to reflect changes in WECC regional Reliability Standard BAL-002-
WECC-2. For the burden category above, the cost is $60/hour (salary 
plus benefits) for an engineer.\53\ The estimated breakdown of annual 
cost is as follows:
---------------------------------------------------------------------------

    \53\ Labor rates from Bureau of Labor Statistics (BLS) (http://bls.gov/oes/current/naics2_22.htm). Loaded costs are BLS rates 
divided by 0.703 and rounded to the nearest dollar (http://www.bls.gov/news.release/ecec.nr0.htm).
---------------------------------------------------------------------------

     Year 1
     Update Existing Documentation to Conform with Proposed 
Regional Reliability Standard: 36 entities * (1 hours/response * $60/
hour) = $2,160.
    Title: FERC-725E, Mandatory Reliability Standards-WECC (Western 
Electric Coordinating Council)
    Action: Proposed Collection of Information
    OMB Control No: 1902-0246
    Respondents: Business or other for-profit, and not-for-profit 
institutions.
    Frequency of Responses: One-time.
    Necessity of the Information: Regional Reliability Standard BAL-
002-WECC-2 implements 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. 
Specifically, the regional Reliability Standard ensures that balancing 
authorities and reserve sharing groups in the WECC Region have the 
quantity and types of contingency reserve required to ensure 
reliability under normal and abnormal conditions.
    Internal review: The Commission has reviewed regional Reliability 
Standard BAL-002-WECC-2 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,

[[Page 71457]]

that there is specific, objective support for the burden estimates 
associated with the information requirements.
    62. Interested persons may obtain information on the reporting 
requirements by contacting the Federal Energy Regulatory Commission, 
Office of the Executive Director, 888 First Street NE., Washington, DC 
20426 [Attention: Ellen Brown, email: Data [email protected], phone: 
(202) 502-8663, fax: (202) 273-0873].

IV. Environmental Analysis

    63. 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.\54\ 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.\55\ The actions directed 
herein fall within this categorical exclusion in the Commission's 
regulations.
---------------------------------------------------------------------------

    \54\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \55\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    64. The Regulatory Flexibility Act of 1980 (RFA) \56\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
As discussed above, regional Reliability Standard BAL-002-WECC-2 
applies to 36 registered balancing authorities and reserve sharing 
groups in the NERC Compliance Registry. Comparison of the NERC 
Compliance Registry with data submitted to the Energy Information 
Administration on Form EIA-861 indicates that, of the 36 registered 
balancing authorities and reserve sharing groups, two may qualify as 
small entities.\57\
---------------------------------------------------------------------------

    \56\ 5 U.S.C. 601-612.
    \57\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act (SBA), which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. See 
15 U.S.C. 632. According to the Small Business Administration, an 
electric utility is defined as ``small'' if, including its 
affiliates, it is primarily engaged in the generation, transmission, 
and/or distribution of electric energy for sale and its total 
electric output for the preceding fiscal year did not exceed 4 
million megawatt hours.
---------------------------------------------------------------------------

    65. The Commission estimates that, on average, each of the two 
affected small entities will have an estimated cost of $60 in Year 1 
and no further ongoing costs. These figures are based on information 
collection costs plus additional costs for compliance. The Commission 
does not consider this to be a significant economic impact for small 
entities because it should not represent a significant percentage of 
the small entities' operating budgets. The Commission solicited 
comments concerning is proposed Regulatory Flexibility Act 
certification and did not receive any comments. Accordingly, the 
Commission certifies that this Final Rule will not have a significant 
economic impact on a substantial number of small entities.

VI. Document Availability

    66. 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.
    67. 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.
    68. 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

    69. These regulations are effective January 28, 2014. 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.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-28626 Filed 11-27-13; 8:45 am]
BILLING CODE 6717-01-P