[Federal Register Volume 80, Number 77 (Wednesday, April 22, 2015)]
[Rules and Regulations]
[Pages 22395-22403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09227]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM14-10-000; Order No. 810]


Real Power Balancing Control Performance Reliability Standard

AGENCY:  Federal Energy Regulatory Commission, Energy.

ACTION:  Final rule.

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SUMMARY:  The Federal Energy Regulatory Commission (Commission) 
approves Reliability Standard BAL-001-2 (Real Power Balancing Control 
Performance) and four new definitions submitted by the North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization. Reliability Standard BAL-001-2 is 
designed to ensure that applicable entities maintain system frequency 
within narrow bounds around a scheduled value, and improves reliability 
by adding a frequency component to the measurement of a Balancing 
Authority's Area Control Error. In addition, the Commission directs 
NERC to submit an informational filing pertaining to the potential 
impact of the Reliability Standard, and also directs NERC to revise one 
definition.

DATES: This rule is effective June 22, 2015.

FOR FURTHER INFORMATION CONTACT: Enakpodia Agbedia (Technical 
Information), Office of Electric Reliability, Division of Reliability 
Standards, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, Telephone: (202) 502-6750, 
[email protected].
    Mark Bennett (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-8524, [email protected].

SUPPLEMENTARY INFORMATION: 

Order No. 810

Final Rule

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves Reliability Standard BAL-001-2 (Real Power 
Balancing Control Performance) submitted by the North American Electric 
Reliability Corporation (NERC), the Commission-certified Electric 
Reliability Organization (ERO). Reliability Standard BAL-001-2 applies 
to balancing authorities and Regulation Reserve Sharing Groups,\2\ and 
is intended to ensure that Interconnection frequency is maintained 
within predefined frequency limits. The Commission also finds that 
Reliability Standard BAL-001-2 addresses the Commission's directive set 
forth in Order No. 693 pertaining to BAL-002-0.\3\ The Commission 
approves the retirement of currently-effective Reliability Standard 
BAL-001-1 immediately prior to the effective date of Reliability 
Standard BAL-001-2.
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    \1\ 16 U.S.C. 824(o).
    \2\ NERC defines Regulation Reserve Sharing Group as ``[a]group 
whose members consist of two or more Balancing Authorities that 
collectively maintain, allocate, and supply the Regulating Reserve 
required for all member Balancing Authorities to use in meeting 
applicable regulating standards.'' NERC Petition at 7.
    \3\ 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).
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    2. Further, the Commission approves NERC's four proposed 
definitions, associated violation risk factors and violation severity 
levels, implementation plan, and effective date. The Commission also 
directs NERC to submit an informational filing 90 days after the end of 
the two-year period following implementation that includes an analysis 
of data on whether experience with the Balancing Authority ACE Limit in 
the first two years after approval has seen ACE swings and inadvertent 
interchange \4\ and unscheduled power flows \5\ that could cause system 
operating limit (SOL) and interconnection reliability operating limit 
(IROL) exceedances, and further directs NERC to revise one definition.
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    \4\ Inadvertent interchange is ``[t]he difference between the 
Balancing Authority's Net Actual Interchange and Net Scheduled 
Interchange. (IA-IS).'' NERC Glossary of Terms 
Used in Reliability Standards (NERC Glossary) at 42.
    \5\ Unscheduled power flows generally refers to power flows that 
result from the law of physics that causes power from a given source 
to flow over all possible paths to its destination.
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I. Background

    3. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards that are 
subject to Commission review and approval. Specifically, the Commission 
may approve, by rule or order, a proposed

[[Page 22396]]

Reliability Standard or modification to a Reliability Standard if it 
determines that the Reliability Standard is just, reasonable, not 
unduly discriminatory or preferential and in the public interest.\6\ 
Once approved, the Reliability Standards may be enforced by NERC, 
subject to Commission oversight, or by the Commission independently.\7\
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    \6\ 16 U.S.C. 824o(d)(2).
    \7\ Id. 824o(e).
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    4. Pursuant to section 215 of the FPA, the Commission established a 
process to select and certify an ERO,\8\ and subsequently certified 
NERC as the ERO.\9\ Subsequent to the Commission's issuance of Order 
No. 693, approving 83 of the 107 Reliability Standards filed by NERC, 
the Commission approved Reliability Standard BAL-001-0 and companion 
Reliability Standard BAL-002-0.\10\ While approving Reliability 
Standard BAL-002-0, the Commission directed NERC ``to modify this 
Reliability Standard to define a significant deviation and a reportable 
event, taking into account all events that have an impact on frequency, 
e.g., loss of supply, loss of load and significant scheduling problems, 
which can cause frequency disturbances and to address how balancing 
authorities should respond.'' \11\
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    \8\ 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).
    \9\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
    \10\ North American Electric Reliability Corporation, Docket No. 
RD13-11-000 (Oct. 16, 2013) (delegated letter order).
    \11\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 355.
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II. NERC Petition and Reliability Standard BAL-001-2

    5. On April 2, 2014, NERC filed a petition seeking approval of 
Reliability Standard BAL-001-2, four new definitions to be added to the 
NERC Glossary and the associated violation risk factors and violation 
severity levels, effective date, and implementation plan.\12\ In its 
petition, NERC explained that balancing generation and load is 
necessary to ensure that system frequency is maintained within narrow 
bounds based on a scheduled value. NERC stated that the purpose of 
Reliability Standard BAL-001-2 is to maintain Interconnection frequency 
within predefined frequency limits and that the Reliability Standard 
``improves reliability by adding a frequency component to the 
measurement of a Balancing Authority's Area Control Error (ACE) and 
allows for the formation of Regulation Reserve Sharing Groups.'' \13\ 
NERC further stated that Reliability Standard BAL-001-2 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.\14\ Also, NERC asserted that Reliability Standard BAL-001-2 
addresses the Commission's Order No. 693 directive pertaining to 
Reliability Standard BAL-002-0.
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    \12\ Reliability Standard BAL-001-2 not attached to this Final 
Rule. The standard is available on the Commission's eLibrary 
document retrieval system in Docket No. RM14-10-000 and on the NERC 
Web site, www.nerc.com.
    \13\ NERC Petition at 2.
    \14\ Id. at 6 and Exhibit C (Order No. 672 Criteria) (citing 
Order No. 672, FERC Stats. & Regs. ] 31,204 at PP 323-335, 444).
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    6. Reliability Standard BAL-001-2 replaces the Control Performance 
Standard 2 (CPS2) in currently-effective Requirement R2 with a new 
term: ``Balancing Authority ACE Limit.'' \15\ The Balancing Authority 
ACE Limit, unique for each balancing authority, contains dynamic limits 
as a function of Interconnection frequency and provides the basis for a 
balancing authority's obligation to balance its resources and demand in 
real-time so that its clock-minute average ACE does not exceed its 
Balancing Authority ACE Limit for more than 30 consecutive clock-
minutes.\16\
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    \15\ Area Control Error (ACE) is the ``instantaneous difference 
between a Balancing Authority's net actual and scheduled 
interchange, taking into accounts the effects of Frequency Bias, 
correction for meter error, and Automatic Time Error Correction 
(ATEC), if operating in the ATEC mode. ATEC is only applicable to 
Balancing Authorities in the Western Interconnection.'' NERC 
Glossary at 7.
    \16\ NERC Petition at 12.
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    7. Reliability Standard BAL-001-2 has two requirements and two 
attachments that contain the mathematical equations for calculating the 
Control Performance Standard 1 (CPS1) in Requirement R1, the Balancing 
Authority ACE Limit in Requirement R2, and associated measures. NERC 
stated that the only change to Requirement R1 is to move the equation 
and explanation of the individual components of CPS1 to Attachment 1. 
NERC explained that the revisions to Requirement R1 ``are 
administratively efficient and clarify the intent of the Requirement.'' 
\17\ NERC further stated that the ``underlying performance aspect'' of 
Requirement R1 remains the same: ``to measure how well a Balancing 
Authority is able to control its generation and load management 
programs, as measured by its ACE, to support its Interconnection's 
frequency over a rolling one-year period.'' \18\
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    \17\ NERC Petition at 11.
    \18\ Id.
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    8. Requirement R2 is new and replaces the existing Control 
Performance Standard 2 requirement. Currently-effective Reliability 
Standard BAL-001-1, Requirement R2 requires each balancing authority to 
operate such that for at least 90 percent of the ten-minute periods in 
a calendar month (using six non-overlapping periods per hour), the 
average ACE must be within a specific limit, referred to as 
L10.
    9. Requirement R2 of Reliability Standard BAL-001-2 states:

    Balancing Authority shall operate such that its clock-minute 
average of Reporting ACE does not exceed its clock-minute Balancing 
Authority ACE Limit (BAAL) for more than 30 consecutive clock-
minutes, calculated in accordance with Attachment 2, for the 
applicable Interconnection in which the Balancing Authority 
operates.

    10. NERC explained that the Balancing Authority ACE Limit is unique 
for each balancing authority and provides dynamic limits for the 
balancing authority's ACE value as a function of its Interconnection 
frequency.\19\ NERC stated that Reliability Standard BAL-001-2 is 
intended to enhance the reliability of each Interconnection by 
maintaining frequency within predefined limits under all conditions. 
Furthermore, NERC stated that Reliability Standard BAL-001-2 and 
accompanying definitions include the benefits of the ATEC equation in 
the Western Electricity Coordinating Council's (WECC) regional variance 
in Reliability Standard BAL-001-1.\20\
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    \19\ Id. at 12.
    \20\ Id. at 2.
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    11. In its petition, NERC proposed violation risk factors and 
violation severity levels for each requirement of Reliability Standard 
BAL-001-2, an implementation plan and an effective date. NERC stated 
that these proposals were developed and reviewed for consistency with 
NERC and Commission guidelines.
    12. NERC proposed an effective date for Reliability Standard BAL-
001-2 that is the first day of the first calendar quarter that is 
twelve months after the date of Commission approval. NERC stated that 
this implementation date will allow entities to make any software 
adjustment that may be required to perform the Balancing Authority ACE 
Limit calculations.\21\
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    \21\ Id. at 3.
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    13. On May 9, 2014, NERC submitted a supplemental filing to address 
the status of the Commission directive in

[[Page 22397]]

Order No. 693 that NERC ``define a significant deviation and a 
reportable event, taking into account all events that have an impact on 
frequency, e.g., loss of supply, loss of load and significant 
scheduling problems. . . .'' \22\ Further, NERC provided an update 
regarding the status of the field trial undertaken for BAL-001-2. In 
the supplemental filing, NERC reiterated the importance of establishing 
dynamic limits for a balancing authority's ACE as a function of the 
Interconnection frequency, stating that ``[o]ne of the reliability 
benefits of the proposed Reliability Standard is that it allows 
Balancing Authorities to calculate their position within these 
boundaries on a real-time basis and take action to support 
reliability.'' \23\ Further, NERC stated that Reliability Standard BAL-
001-2 addresses the Commission's directive related to BAL-002-0 ``in an 
equally efficient and effective manner.'' \24\ NERC added that 
revisions to Reliability Standard BAL-002-1 are currently being 
developed and will complement Reliability Standard BAL-001-2. Regarding 
the ongoing field trial, discussed below, NERC stated that ``the 
widespread participation of Balancing Authorities has provided insight 
into how the changes in Reliability Standard BAL-001-2 will impact 
reliability.'' \25\
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    \22\ NERC May 9, 2014 Supplemental Filing at 3-5 (citing Order 
No. 693, FERC Stats. & Regs. ] 31,242 at P 355).
    \23\ Id. at 2.
    \24\ Id. at 3.
    \25\ NERC Supplemental Filing at 6 (stating that 47 balancing 
authorities participated in the field trial: 16 in the Eastern 
Interconnection, 29 in the Western Interconnection, ERCOT and 
Qu[eacute]bec).
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    14. On July 31, 2014, NERC submitted an informational filing of its 
Preliminary Field Trial Report evaluating the effects of Reliability 
Standard BAL-001-2.\26\ NERC stated that the Field Trial Report results 
to date demonstrate that the correlation between Requirements R1 and R2 
of Reliability Standard BAL-001-2 drive corrective actions to support 
Interconnection frequency and reliability.\27\ NERC also stated that 
the Balancing Authority ACE Limit, in conjunction with currently-
effective Reliability Standard BAL-003-1 (Frequency Response and 
Frequency Bias Setting), satisfies the directive in Order No. 693 
pertaining to Reliability Standard BAL-002-0.\28\
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    \26\ NERC July 31, 2014 Informational Filing (Field Trial 
Report).
    \27\ NERC Field Trial Report at 1.
    \28\ Id. at 14.
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III. Notice of Proposed Rulemaking

    15. On November 20, 2014, the Commission issued a Notice of 
Proposed Rulemaking (NOPR) proposing to approve Reliability Standard 
BAL-001-2 as just, reasonable, not unduly discriminatory or 
preferential and in the public interest.\29\ The Commission also 
proposed to approve NERC's four proposed definitions, violation risk 
factor and violation severity level assignments, and the retirement of 
currently-effective Reliability Standard BAL-001-1.\30\ The NOPR stated 
that the new Balancing Authority ACE Limit in Reliability Standard BAL-
001-2 encourages operation in support of Interconnection frequency and 
drives corrective action back within predefined ACE limits when needed 
to adjust Interconnection frequency.
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    \29\ Real Power Balancing Control Performance Reliability 
Standard, Notice of Proposed Rulemaking, 79 FR 70,483 (November 26, 
2014), 149 FERC ] 61,139 (2014).
    \30\ The four proposed definitions for inclusion in the NERC 
Glossary are: Regulation Reserve Sharing Group, Reserve Sharing 
Group Reporting ACE, Reporting ACE, and Interconnection. NERC 
Petition at 7-10. The standard drafting team explained that 
Regulation Reserve Sharing Group will be added to the NERC 
Compliance Registry prior to implementation of the Reliability 
Standard. NERC Petition, Exhibit G (Summary of Development History 
and Complete Record of Development), Consideration of Comments, 
April 2013 at 13.
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    16. While the Commission proposed to approve Reliability Standard 
BAL-001-2, the Commission raised concerns regarding the potential of 
the Reliability Standard to contribute to unscheduled power flows and 
inadvertent interchange. Based on that concern, the Commission proposed 
to direct NERC to monitor unscheduled power flows and inadvertent 
interchange in the Western and Eastern Interconnections and submit an 
informational filing following implementation of the Reliability 
Standard providing the number of SOL/IROL violations, the date, time, 
location, duration and magnitude due to unscheduled power flows and 
inadvertent interchange. In the NOPR, the Commission sought comments on 
the following issues: (1) The need for an informational filing and 
whether NERC should include additional data pertaining to unscheduled 
power flows and inadvertent interchange in its informational filing; 
and (2) whether a regional variance would be necessary for a region 
experiencing adverse impacts from the Reliability Standard due to 
inadvertent interchange.
    17. In response to the NOPR, the Commission received comments from: 
NERC, Tri-State Generation and Transmission Association, (Tri-State), 
Arizona Public Service Company (APS), Edison Electric Institute (EEI), 
NaturEner USA (NaturEner), Regional Transmission Organizations--
Midcontinent Independent System Operator, ISO New England, and PJM 
Interconnection (collectively ``Indicated RTOs''), The Steel 
Manufacturers Association (SMA), Duke Energy Corporation (Duke), 
Western Area Power Administration (WAPA), Powerex Corp (Powerex), New 
York Independent System Operator (NYISO), and Bonneville Power 
Administration (BPA).

IV. Discussion

    18. Pursuant to FPA section 215(d)(2), we approve Reliability 
Standard BAL-001-2 as just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. The purpose of Reliability 
Standard BAL-001-2 is to control Interconnection frequency within 
defined limits. The Commission determines that the Reliability Standard 
will help ensure that Interconnection frequency is maintained through 
both long and short term performance measures for Interconnection 
frequency control and dynamic (i.e., real-time) limits that are 
specific for each balancing authority and Interconnection.\31\ We find 
that, by basing Balancing Authority ACE Limits on predefined frequency 
trigger limits for each Interconnection, the real-time measurements 
established in the Reliability Standard will help ensure that the 
Interconnection frequency returns to a reliable state should a 
balancing authority's ACE, or the Interconnection's frequency, exceed 
acceptable bounds.
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    \31\ NERC Supplemental Filing at 2.
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    19. We also determine that the Reliability Standard satisfies the 
outstanding directive concerning Reliability Standard BAL-002 set forth 
in Order No. 693, as explained in the NOPR,\32\ and approve NERC's four 
definitions, violation risk factor and violation severity level 
assignments, and the retirement of currently-effective Reliability 
Standard BAL-001-1. Further, we approve NERC's implementation plan, in 
which NERC proposes an effective date of the first day of the first 
calendar quarter, twelve months after the date of Commission 
approval.\33\
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    \32\ NOPR, 149 FERC ] 61,139 at PP 18-19.
    \33\ NERC Petition, Ex. B (Implementation Plan for Proposed 
Reliability Standard BAL-001-2) at 4.
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    20. While approving Reliability Standard BAL-001-2, as discussed 
below, we direct NERC to submit an informational filing to assess the 
potential impact of the Reliability Standard as described herein and to 
revise the definition of the term Reporting ACE in the NERC Glossary.

[[Page 22398]]

    21. We discuss below the following issues raised in the NOPR and 
addressed in the comments: (A) The proposed informational filing and 
NOPR comments regarding the need to revise the definition of the term 
Reporting ACE; and (B) whether a regional variance is necessary to 
address possible adverse impacts from the implementation of Reliability 
Standard BAL-001-2.

A. Informational Filing and Definition of Reporting ACE NOPR

    22. In the NOPR, the Commission noted that feedback from some 
stakeholders who participated in the field trial indicated that the 
Balancing Authority ACE Limit established in Requirement R2 of 
Reliability Standard BAL-001-2 could increase unscheduled power flows, 
possibly resulting in approaching or exceeding SOL/IROL violations. The 
NOPR observed that, in comments submitted to NERC's standard drafting 
team, one large transmission operator stated that the Balancing 
Authority ACE Limit could increase the number of system operating limit 
violations, and could cause large unscheduled power flows resulting in 
an increased ACE.\34\ Another stakeholder commented that the Balancing 
Authority ACE Limit could provide opportunities for entities to create 
unscheduled power flows within the boundaries established by the 
Reliability Standard.\35\
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    \34\ NOPR, 149 FERC ] 61,139 at P 20 (citing NERC Petition, Ex. 
G (Summary of Development History and Complete Record of 
Development), Consideration of Comments, April 2013 at 43).
    \35\ Id., Ex. G, Consideration of Comments, at 77.
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    23. The NOPR stated that, while NERC asserted that there was no 
relationship between the Balancing Authority ACE Limit field trial and 
accumulated inadvertent interchange, a large allowance of ACE 
deviations could increase the amount of inadvertent interchange on the 
bulk electric system. The NOPR explained that Reliability Standard BAL-
001-2 could allow balancing authorities to have a very large deviation 
from an ACE of zero and still be compliant with the dynamic values of 
the Balancing Authority ACE Limits in the proposed Reliability 
Standard.\36\
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    \36\ NOPR, 149 FERC ] 61,139 at P 21.
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    24. Based on this information, in the NOPR, the Commission 
expressed concern that Reliability Standard BAL-001-2 may have the 
``unintended consequence'' of (i) creating large unscheduled power 
flows that could unduly burden transmission operators and reliability 
coordinators in addressing power flows that approach or exceed system 
operating limits or interconnection reliability operating limits, and 
(ii) causing significant increases in inadvertent interchange resulting 
in an adverse reliability impact between real-time operations and day 
and/or hour-ahead analysis performed by reliability coordinators and 
transmission operators.\37\
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    \37\ Id. P 22.
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    25. In order to evaluate the effect of the Reliability Standard on 
unscheduled power flows and inadvertent interchange and the potential 
impact on the Bulk-Power System, the NOPR proposed to direct NERC to 
submit an informational filing to monitor unscheduled flows and 
inadvertent interchange in the Western and Eastern Interconnections 90 
days after the end of the two-year period following implementation. 
Specifically, the NOPR proposed that NERC's informational filing 
provide ``the number of SOL/IROL violations, the date, time, location, 
the duration and magnitude, due to unscheduled power flows and 
inadvertent interchange within [the] Western and Eastern 
Interconnections.'' \38\ Further, the NOPR stated that the Commission 
expects NERC will immediately propose and implement adequate remedies 
should there be increases in unscheduled flow and inadvertent 
interchange causing reliability issues under the new Balancing 
Authority ACE Limit during the two-year period covered by the 
informational filing.
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    \38\ Id. P 23.
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Comments
    26. NERC states that it does not support the Commission's proposed 
directive to submit an informational filing with the data described in 
the NOPR, because it ``will not conclusively demonstrate that large ACE 
swings are correlated with unscheduled power flow and Inadvertent 
Interchange causing SOL/IROL exceedances.'' \39\ NERC asserts that the 
proposed directive ``is based on the speculative opinions of 
commenters, supported by no documented evidence that the proposed 
Reliability Standard contributes to unscheduled power flows and 
Inadvertent Interchange,'' and would not be an effective use of NERC or 
industry resources.\40\
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    \39\ NERC Comments at 6.
    \40\ Id. at 8.
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    27. NERC states that the field trial has not produced any 
``positive evidence'' establishing that implementing the Balancing 
Authority ACE Limit causes high ACE swings negatively affecting 
frequency, or relates to unscheduled power flows or inadvertent 
interchange causing SOL/IROL exceedances. Further, NERC asserts that 
``high ACE swings are not necessarily determinative of overloading 
transmission or SOL/IROL exceedances because SOL/IROL exceedances can 
still occur when ACE is zero.'' \41\
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    \41\ Id.
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    28. While disagreeing with the directive as proposed in the NOPR, 
NERC states that as a ``first step'' to addressing the Commission's 
concerns, and to ``investigate a possible correlation between [the] 
Balancing Authority ACE Limit and SOL/IROL exceedances as attributed to 
Inadvertent Interchange and unscheduled power flows,'' NERC will 
provide the Commission with a ``set of baseline data'' including 
``tracking the number of SOL/IROL exceedances occurring in each 
interconnection where a Balancing Authority's ACE was within BAAL.'' 
\42\ NERC states that it would include this data in an informational 
filing, with the commitment to work with Commission staff to analyze 
the data.
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    \42\ Id. at 8-9.
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    29. EEI, Indicated RTOs, NYISO, WAPA, APS, Duke, Tri-State, Powerex 
and BPA support the Commission's proposed informational filing. While 
supporting the proposed informational filing, EEI believes that the 
Reliability Standard ``will support stronger management of 
interconnection frequency.'' \43\ Indicated RTOs assert that ``the 
trend in manual Time Error Correction is a better indicator of 
unscheduled flows. Operating limit violations resulting from 
unscheduled power flows and the trend in Time Error Correction will 
enable the Commission to evaluate the severity of any issues, and NERC 
and/or its operating committees routinely collect that information.'' 
\44\
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    \43\ EEI Comments at 3-4.
    \44\ Indicated RTOs Comments at 5-6.
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    30. NYISO, Tri-State, BPA and Powerex, while supporting the 
Commission's proposal, urge that the Commission require NERC to provide 
more data in the informational filing than described in the NOPR. NYISO 
states that NERC should provide ACE and Balancing Authority ACE Limit 
values for the SOL/IROL violations associated with unscheduled power 
flows or inadvertent interchange. BPA asserts that NERC should examine 
all unscheduled power flows resulting from the implementation of the 
Balancing Authority ACE Limit, not just those related to SOL/IROL 
violations. BPA further states that NERC should be required to conduct 
an analysis every

[[Page 22399]]

six months for the initial two year implementation period, including an 
examination of loss of supply events and their impact on frequency 
recovery.\45\
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    \45\ BPA Comments at 7.
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    31. BPA states that the proposed definition of ``Reporting ACE'' 
should be revised to include the ATEC upper payback limit term ``Lmax'' 
and the bounds of that upper payback limit for IATEC. BPA 
notes that, while incorporating the WECC regional variance contained in 
currently effective Reliability Standard BAL-001-1 may have been NERC's 
intent, this cannot be accomplished without including the ``Lmax'' 
upper payback limit and the bounds of that upper payback limit in the 
NERC Glossary. BPA asserts that without this language in the 
definition, the ATEC payback does not have an upper bound, which could 
cause some significant unscheduled flows in the interconnection, 
because a balancing authority with a large primary inadvertent 
accumulation could pay most of it off within a three hour period.
    32. While supporting the objective of Reliability Standard BAL-001-
2, Powerex expresses concern that ``the `inadvertent interchange' 
permitted by the modified standard will have a material, adverse impact 
on the western transmission markets subject to the Commission's 
jurisdiction . . . [and] Powerex believes that features of the proposed 
standard could be used to harm competition to the detriment of both 
transmission customers and system reliability.'' \46\ Powerex argues 
that the Balancing Authority ACE Limit ``creates opportunities for 
commercially-interested [balancing authorities] to deliberately reduce 
their control of imbalances, effectively leaning on the grid to balance 
their systems. Such activity creates unscheduled flows on adjacent 
systems that can inequitably and inefficiently curtail the transmission 
capacity available to the transmission customers that have paid to use 
the transmission system.'' \47\
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    \46\ Powerex Comments at 7.
    \47\ Id. at 8.
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    33. Powerex urges the Commission to ``take additional steps to 
ensure that implementation of the BAAL requirement does not thwart the 
provision of open access transmission service in accordance with 
Commission policies.'' \48\ Specifically, Powerex states that the 
Commission should ``direct NERC to supplement its petition with 
information regarding any rules or requirements that may be in place to 
protect against potential curtailments of transmission customers due to 
unscheduled flows associated with BAAL ACEs.'' \49\ Additionally, 
Powerex asserts that NERC's informational filing should describe 
instances in which unscheduled flows associated with the Balancing 
Authority ACE Limit required curtailment of transmission customers or 
other mitigation measures, and that this information should be provided 
every six months during the initial two year implementation period. 
Powerex also asks the Commission to ``provide guidance concerning the 
creation of deliberate [balancing authority] imbalances,'' require 
balancing authorities to disclose ACE and Balancing Authority ACE Limit 
information, and direct NERC to implement safeguards to ensure that 
balancing authorities reduce their ACEs before the curtailment of 
transmission customers.\50\ Tri-State agrees with Powerex's comments.
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    \48\ Id. at 9.
    \49\ Id. at 22.
    \50\ Powerex Comments at 24-29.
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    34. EEI, Indicated RTOs and Duke suggest limiting the informational 
filing to the Western Interconnection. Indicated RTOs state that 
``there has been a decline in the number of time error corrections in 
the Eastern Interconnection during the course of the field trial. These 
outcomes suggest that BAL-001-2 works as intended, and does not trigger 
issue with respect to inadvertent interchange, at least in the Eastern 
Interconnection.'' \51\ EEI asserts that unscheduled power flows and 
inadvertent interchange ``have not been an issue within the Eastern 
Interconnection Field Trial, which has been in place now for nearly ten 
years. During this trial, approximately two-thirds of the Eastern 
Interconnection operated under the BAAL measure without issue. 
Therefore, EEI does not envision problems arising.'' \52\ Similarly, 
Duke notes that the Field Trial Report specifically states that 
unscheduled power flows were not cited as problems within the Eastern 
Interconnection.\53\
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    \51\ Indicated RTOs Comments at 5.
    \52\ EEI Comments at 4 (citing Field Trial Report at 13).
    \53\ Duke Comments at 4 (citing Field Trial Report at 13).
---------------------------------------------------------------------------

    35. NaturEner addresses the time component of the Balancing 
Authority ACE Limit, an issue not raised in the NOPR. NaturEner states 
that the 30 consecutive clock-minute limitation on the time during 
which a balancing authority's Reporting ACE can exceed its Balancing 
Authority ACE Limit should be extended to 60 consecutive clock-minutes. 
NaturEner asserts that the 30 minute time period provides insufficient 
time for a balancing authority to use market mechanisms to resolve 
imbalance events.\54\ Further, NaturEner states that if Reliability 
Standard BAL-001-2 is approved in its current form, the Commission 
should ``include severe loss of wind events as qualifying events under 
BAL-002, thereby qualifying such events as allowable contingency 
reserve events under which contingency reserves may be called upon.'' 
\55\
---------------------------------------------------------------------------

    \54\ NaturEner Comments at 1.
    \55\ Id. at 2-3.
---------------------------------------------------------------------------

Commission Determination
    36. The Commission adopts the NOPR proposal regarding NERC's 
submission of an informational filing. We determine that the field 
trial NERC conducted for Reliability Standard BAL-001-2 raised 
sufficient concerns regarding unscheduled power flows and inadvertent 
interchange to warrant NERC's continued monitoring and submission of an 
informational filing 90 days after the end of the two-year period 
following implementation, as proposed in the NOPR. Further, we find 
that the informational filing should encompass both the Western and 
Eastern Interconnections, as there were concerns about possible 
increases of SOL/IROL exceedances in both Interconnections.\56\ EEI 
supports limiting the informational filing to the Western 
Interconnection, stating that the Balancing Authority ACE Limit has 
``been extensively used [in the Eastern Interconnection] for many years 
without issue.'' \57\ However, the Commission believes that including 
both Interconnections is reasonable, because less than 20 percent of 
balancing authorities in the Eastern Interconnection were in the field 
trial.\58\
---------------------------------------------------------------------------

    \56\ NYISO supports the inclusion of the Eastern Interconnection 
within the scope of the information filing. NYISO described the 
fundamental concern that ``BAL-001-2 will allow balancing 
authorities to have a very large deviation from an Area Control 
Error (``ACE'')--and potentially negatively affect reliability--yet 
still be compliant with the dynamic values of the [Balancing 
Authority ACE Limits calculated pursuant to the proposed Reliability 
Standard.'' NYISO Comments at 1.
    \57\ EEI Comments at 1-2.
    \58\ Twenty-seven balancing authorities participated in the 
Western Interconnection field trial and eleven in the Eastern 
Interconnection. Field Trial Report at 11, 14.
---------------------------------------------------------------------------

    37. We are not persuaded by NERC's objection to the informational 
filing, that the field trial ``produced no conclusive results that 
large ACE swings are correlated with unscheduled power flow and 
Inadvertent Interchange causing SOL/IROL exceedances.'' \59\ While the 
field trial may not have been ``conclusive,'' the information in the 
report indicates the possibility of a

[[Page 22400]]

correlation between large ACE swings and unscheduled power flows that 
warrant further study and analysis. Thus, we agree with the commenters 
who observed that the field trial demonstrated clear potential for the 
Balancing Authority ACE Limit to cause unscheduled power flows and 
inadvertent interchange that could lead to SOL/IROL problems.\60\ While 
the Field Trial Report suggests that unscheduled flow events in the 
Western Interconnection may have occurred due to a number of factors, 
the Report does not eliminate large ACE swings as the cause.\61\ 
Accordingly, we conclude that the matter warrants further study and 
analysis, as directed.
---------------------------------------------------------------------------

    \59\ NERC Comments at 8.
    \60\ Tri-State Comments at 5, APS Comments at 3, EEI Comments at 
4, Duke Energy Comments at 3-4, WAPA Comments at 3-4, Powerex 
Comments at 7, NYISO Comments at 1-2 and BPA Comments at 7-8.
    \61\ NERC Field Trial Report at 16-17, 20.
---------------------------------------------------------------------------

    38. We acknowledge NERC's commitment to take a ``first step'' to 
address the Commission's concerns by providing baseline data, including 
SOL/IROL exceedances where a balancing authority's ACE was within its 
Balancing Authority ACE Limit. However, we agree with those commenters 
who urge the Commission to require NERC to provide more data than 
described in the NOPR. Therefore, we direct NERC to make an 
informational filing 90 days after the end of the two-year period 
following implementation that includes an analysis of data (all 
relevant events or a representative sample) on whether experience with 
the Balancing Authority ACE Limit in the first two years after approval 
has seen ACE swings and unscheduled power flows or inadvertent 
interchange that could cause SOL/IROL exceedances. However, if it is 
evident that during this two-year period the issues discussed above are 
creating SOL/IROL exceedances NERC should provide that information to 
the Commission, together with appropriate recommendations for 
mitigation, as this information becomes available. Further, NERC should 
also make the underlying data available to Commission staff upon 
request. Regarding BPA's concerns about the interplay of Reliability 
Standards BAL-001-2 and BAL-002-1, the Commission believes those 
concerns are best addressed if and when NERC files with the Commission 
proposed changes to Reliability Standard BAL-002-1. However, we expect 
NERC to retain the data pursuant to the analysis directed above so that 
it will be available, if needed, to examine the effect of Reliability 
Standard BAL-002-1 in relation to the Balancing Authority ACE Limit in 
the future.\62\
---------------------------------------------------------------------------

    \62\ We leave it to NERC's discretion whether to include in the 
informational filing time error correction data, as suggested by the 
Indicated RTOs. (See Indicated RTOs Comments at 5-6.)
---------------------------------------------------------------------------

    39. Based on the record before us, the Commission is not persuaded 
by Powerex's assertion that Reliability Standard BAL-001-2 allows 
inadvertent interchange that ``will have a material, adverse impact on 
the western transmission markets.'' \63\ Further, there is no support 
in the record for Powerex's claim that there is evidence that during 
the field trial market participants seized ``opportunities . . . to 
deliberately reduce their control of imbalances, effectively leaning on 
their systems . . . resulting in an increase in unscheduled flows and 
degradation of transmission service in the region.'' \64\ Powerex's 
broad assertions lack factual support in the record of this proceeding 
and are largely speculative.
---------------------------------------------------------------------------

    \63\ Powerex Comments at 7.
    \64\ Id. at 8.
---------------------------------------------------------------------------

    40. We also note that Powerex presented an analysis of the impact 
of the Balancing Authority ACE Limit on unscheduled flow on the 
California Oregon Intertie to WECC's Unscheduled Flow Administrative 
Subcommittee. The WECC staff assessment of Powerex's analysis concluded 
that ``[t]he results of the Powerex analysis are valid only within the 
assumptions they have made, but based upon actual path flow data we 
believe the assumptions are incorrect and lead to large overestimations 
of the RBC (Balancing Authority ACE Limit) impact on Unscheduled 
Flow.'' \65\ Powerex's reliance on the increase in e-tag curtailments 
across Path 36 (``TOT3'' in eastern Wyoming and Colorado) noted in the 
WECC Performance Work Group's December 2011 Quarterly Report on the RBC 
Field Trial as demonstrating that its concerns are ``neither 
speculative or theoretical'' is similarly unpersuasive.\66\ The 
existence of e-tag curtailments during the field trial does not 
establish a causal connection with the Balancing Authority ACE Limit, 
because other factors, such as outages at the San Onofre Nuclear 
Generating Station unit in California; poor hydro conditions in 
Northern California; and other outages impacting energy import to 
California may have contributed to the curtailments. However, this 
uncertainty reinforces the need for the informational filing and 
additional study directed herein.
---------------------------------------------------------------------------

    \65\ NERC May 9, 2014 Supplemental Filing at 5, n.8 (citing 
Reliability-based Control Field Trial Report presented at January 
2013 WECC Board of Directors meeting at 32) (available at: https://www.wecc.biz/Administrative/Board%20Packet%20January%2023%202013.pdf.)
    \66\ Powerex Comments at 17.
---------------------------------------------------------------------------

    41. We determine that Powerex's concerns about the possible adverse 
impacts from Reliability Standard BAL-001-2 on reliability, as well as 
competition and transmission markets, are unpersuasive. While 
expressing concern about the reliability risks associated with 
implementing Reliability Standard BAL-001-2, Powerex acknowledges that 
the extent to which the reliability risks it describes ``will 
materialize remains to be seen.'' \67\ Instead, we agree with NERC that 
``[t]he field trial report finds that the results to date demonstrate 
that the correlation between Requirements R1 and R2 of Reliability 
Standard BAL-001-2 drive corrective actions to support Interconnection 
frequency and reliability.'' \68\ With respect to Powerex's concerns 
about the possibility that ``gaps'' in Reliability Standard BAL-001-2 
could be ``exploited to the detriment of transmission customers,'' we 
encourage Powerex to engage in the ongoing monitoring effort and bring 
any specific instances of deliberate misconduct to the Commission's 
attention if they occur.\69\
---------------------------------------------------------------------------

    \67\ Id. at 20.
    \68\ Field Trial Report at 1.
    \69\ Powerex Comments at 9.
---------------------------------------------------------------------------

    42. We do not adopt NaturEner's proposal that the 30 consecutive 
clock-minute time component should be extended to no less than 60 
consecutive clock-minutes to allow the use of market mechanisms to 
address imbalance events. We note that in the Technical Conclusion 
section of the Field Trial Report the standard drafting team concluded 
that ``[t]he selection of 30 consecutive clock minutes is appropriate 
and actually improves reliability.'' \70\ This conclusion is supported 
in the Field Trial Report by an adequate justification for the 30 
consecutive clock-minute time period:
---------------------------------------------------------------------------

    \70\ Field Trial Report at 19.

    [S]imilar to the approach taken to address an IROL where 
operators are provided 30 minutes to assess options for mitigation, 
the team chose to use the more conservative limit of 30 minute, well 
within the risk-based criteria of the next resource loss, while also 
providing appropriate time for the operator to assess the current 
situation and take corrective actions as needed. Actual experience 
operating under the proposed standards has met with the support of 
all participating Real-time system operators.\71\
---------------------------------------------------------------------------

    \71\ Id. The Commission notes that in accordance with 
Reliability Standard IRO-009-1 Requirement R2 and the definition for 
Interconnection Reliability Operating Limit Tv in the NERC Glossary, 
the 30 minute period is provided for operators to assess and 
implement options for mitigation of an IROL.


[[Page 22401]]


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

In light of this justification and our directive to NERC to monitor the 
implementation of Reliability Standard BAL-001-2 and submit an 
informational filing, we believe that NaturEner's request for annual 
reviews of the 30 consecutive clock-minute time component is 
unnecessary.\72\
---------------------------------------------------------------------------

    \72\ Regarding NaturEner's comment that the Commission should 
require that ``severe loss of wind events'' be considered Qualifying 
Events under BAL-002, we decline to do so in this rulemaking. 
NaturEner Comments at 9. NaturEner may raise its concern in NERC's 
current project to revise Reliability Standard BAL-002.
---------------------------------------------------------------------------

    43. The Commission is persuaded by BPA's comments that a revision 
to the definition of Reporting ACE is warranted. In its petition, NERC 
states that currently-effective Reliability Standard BAL-001-1 includes 
a WECC regional variance which has been incorporated into the 
continent-wide Reliability Standard BAL-001-2 through the definition of 
Reporting ACE. However the definition of Reporting ACE does not include 
the ``Lmax'' upper payback limit and the bounds of that upper payback 
limit in the definition. Accordingly, the Commission directs NERC to 
revise the definition of Reporting ACE to include the ``Lmax'' upper 
payback limit and the bounds of that upper payback limit prior to the 
effective date of Reliability Standard BAL-001-1.

B. Need for a Regional Variance

NOPR
    44. In the NOPR, the Commission sought comment on whether a 
regional variance would be necessary for those regions that experienced 
adverse impacts from inadvertent interchange during the field trial. 
The NOPR observed that the Western Interconnection applies a limit of 
four times a balancing authority's L10 to limit ACE 
deviations from balancing authority flows that negatively impact the 
transmission system.
Comments
    45. WAPA and BPA state that the Commission should direct NERC to 
include a regional variance to establish limits to the Balancing 
Authority ACE Limits for balancing authorities in the WECC before BAL-
001-2 is implemented in the Western Interconnection. BPA states that 
currently in the Western Interconnection a limit of 4 times 
L10 is used, due to concerns with unscheduled flow. BPA 
states that WECC should continue to use this limit until a new limit is 
established.\73\ Rather than a regional variance, Indicated RTOs state 
that a regional standard, or adjustments allowed by Reliability 
Standard BAL-001-2 to address inadvertent interchange, would be 
preferable.
---------------------------------------------------------------------------

    \73\ BPA Comments at 8. BPA states that NERC will need to retain 
the definition of L10 after currently-effective 
Reliability Standard BAL-001-1 is retired. Id.
---------------------------------------------------------------------------

Commission Determination
    46. The Commission is not persuaded that there is a need for a 
regional variance for Reliability Standard BAL-001-2 for use in the 
Western Interconnection. NERC stated in its NOPR comments that NERC 
will develop a regional variance, or a modification to Reliability 
Standard BAL-001-2, should NERC's analysis following the implementation 
of the Reliability Standard confirm the need for either measure.\74\ We 
determine that NERC has described a sound approach for addressing this 
issue.
---------------------------------------------------------------------------

    \74\ NERC Comments at 9.
---------------------------------------------------------------------------

V. Information Collection Statement

    47. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping (collections of 
information) imposed by an agency.\75\ Upon approval of a collection of 
information, OMB will assign an OMB control number and expiration date. 
Respondents subject to the filing requirements of this rule will not be 
penalized for failing to respond to these collections of information 
unless the collections of information displays a valid OMB control 
number.
---------------------------------------------------------------------------

    \75\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    48. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the Paper work Reduction Act. The NOPR solicited comments on the 
Commission's need for this information, whether the information will 
have practical utility, the accuracy of the provided burden estimate, 
ways to enhance the quality, utility, and clarity of the information to 
be collected, and any suggested methods for minimizing the respondent's 
burden, including the use of automated information techniques. No 
comments were received.
    49. This final rule approves revisions to Reliability Standard BAL-
001-2. NERC states in its petition that the Reliability Standard 
defines a new term: Balancing Authority ACE Limit, which is unique for 
each balancing authority and provides dynamic limits for a balancing 
authority's ACE value as a function of the Interconnection 
frequency.\76\ NERC states that the Reliability Standard improves 
reliability by adding a frequency component to the measurement of a 
balancing authority's ACE, and allows for the formation of ``Regulation 
Reserve Sharing Groups.'' NERC's Reliability Standard requires a 
balancing authority to balance its resources and demand in real-time so 
that the clock-minute average of its ACE does not exceed its Balancing 
Authority ACE Limit for more than 30 consecutive clock-minutes. 
Furthermore, NERC states that Reliability Standard BAL-001-2 and 
accompanying definitions include the benefits of the Automatic Time 
Error Correction equation in the WECC-specific regional variance in 
Reliability Standard BAL-001-1.\77\ The Reliability Standard and 
related reporting requirements are applicable to balancing authorities 
and regulation reserve sharing groups.
---------------------------------------------------------------------------

    \76\ NERC Petition at 12.
    \77\ Id. at 2.
---------------------------------------------------------------------------

    50. Public Reporting Burden: Our estimate below regarding the 
number of respondents is based on the NERC Compliance Registry as of 
October 17, 2014. According to the NERC Compliance Registry, there are 
71 balancing authorities in the Eastern Interconnection, 34 balancing 
authorities in the Western Interconnection and one balancing authority 
in the Electric Reliability Council of Texas (ERCOT). The Commission 
bases individual burden estimates on the time needed for balancing 
authorities to develop tools needed to facilitate reporting that is 
required in the Reliability Standard. These burden estimates are 
consistent with estimates for similar tasks in other Commission-
approved Reliability Standards. The following estimates relate to the 
requirements for this final rule in Docket No. RM14-10-000.

[[Page 22402]]



                                          FERC-725R, Modifications in Final Rule in RM14-10-000 Final Rule \78\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Total annual
                                           Number of    Annual number  Total number                                         burden hours &     Cost per
                                          respondents   of responses   of responses   Average burden & cost per response  total annual cost   respondent
                                                       per respondent                                                            \79\            ($)
                                                  (1)             (2)     (1)*(2) =  (4)................................      (3)*(4) = (5)    (5) / (1)
                                                                                (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
BA/RRSG: \80\ Update and Maintain Energy          106               1           106  8 hours per response.                              848         $522
 Management Systems.                                                                 $522 (8 x $65.34)..................            $55,332
BA: Record Retention \81\...............          106               1           106  4..................................                424         $118
                                                                                     $118...............................            $12,508
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................  ...........  ..............           212  640................................              1,272         $640
                                                                                                                                    $67,840
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Title: FERC-725R Mandatory Reliability Standards: Resource and 
Demand Balancing (BAL) Reliability Standards.
---------------------------------------------------------------------------

    \78\ Reliability Standard BAL-001-2 applies to balancing 
authorities and regulation reserve sharing groups. However, the 
burden associated with the balancing authority complying with 
Requirement R1 is not included within this table because the 
Commission accounted for it under Commission-approved Reliability 
Standards BAL-001-1.
    \79\ The estimated hourly cost (salary plus benefits) of $98.17 
is based on Bureau of Labor Statistics (BLS) information of May 2013 
(and available at: http://www.bls.gov/oes/current/naics2_22.htm) and 
is the average for an electrical engineer (NAICS 17-2071; $65.34/
hour) and a lawyer (NAICS 23-1011; $128.76).
    \80\ BA = Balancing Authority; RRSG = Regulation Reserve Sharing 
Group.
    \81\ The $29.52/hour estimate for salary plus benefits is based 
on the BLS data of May 2013 for a file clerk (NAICS 43-4071).
---------------------------------------------------------------------------

    Action: Proposed revision.
    OMB Control No.: 1902-0268.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This Final Rule approves Reliability 
Standard BAL-001-2 pertaining to requiring balancing authorities to 
operate such that its clock-minute average reporting ACE does not 
exceed its clock-minute Balancing Authority ACE Limits for more than 30 
consecutive clock-minutes. Requirement R2 provides each balancing 
authority a dynamic ACE limit that is a function of Interconnection 
frequency. Reliability Standard BAL-001-2 will provide dynamic limits 
that are balancing authority and Interconnection-specific. In addition, 
these ACE limits are based on identified Interconnection frequency 
limits to ensure the Interconnection returns to a reliable state when 
an individual balancing authority's ACE or Interconnection frequency 
deviation contributes undue risk to the Interconnection.
    Internal Review: The Commission has reviewed Reliability Standard 
BAL-001-2 and has determined that it is necessary to implement section 
215 of the FPA. The requirements of Reliability Standard BAL-001-2 
should conform to the Commission's expectation for generation and 
demand balance throughout the Eastern and Western Interconnections as 
well as within the ERCOT Region.
    51. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director, email: 
[email protected], phone: (202) 502-8663, fax: (202) 273-0873].
    Comments on the requirements of this rule may also be sent to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503 [Attention: Desk Officer for the Federal 
Energy Regulatory Commission, phone: (202) 395-4638, fax: (202) 395-
7285]. For security reasons, comments to OMB should be submitted by 
email to: [email protected]. Comments submitted to OMB should 
include FERC-725R and Docket Number RM14-10-000.

VI. Environmental Analysis

    52. 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.\82\ 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.\83\ The actions here fall 
within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \82\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \83\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act Certification

    53. The Regulatory Flexibility Act of 1980 (RFA) \84\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The NOPR stated that, as shown in the information collection section, 
Reliability Standard Reliability Standard BAL-001-2 applies to 106 
entities. Comparison of the applicable entities with the Commission's 
small business data indicates that approximately 23 are small business 
entities.\85\ Of these, the Commission estimates that approximately 
five percent, or one of these small entities, will be affected by the 
new requirements of Reliability Standard BAL-001-2.
---------------------------------------------------------------------------

    \84\ 5 U.S.C. 601-612.
    \85\ This figure constitutes 21.4 percent of the total number of 
affected entities.
---------------------------------------------------------------------------

    54. In the NOPR, the Commission estimated that the small entities 
that will be affected by proposed Reliability Standard BAL-001-2 will 
incur one-time compliance cost up to $109,180 (i.e., the cost of 
updating and maintaining energy management systems), resulting in cost 
of approximately $1,030 per balancing authority and/or Regulation 
Reserve Sharing Groups. The Commission has revised the cost for small 
entities that will be affected by Reliability Standard BAL-001-2 and 
estimates that small entities will incur a one-time compliance cost up 
to $55,332 (i.e., the cost of updating and maintaining energy 
management systems), resulting in cost of approximately $522 per 
balancing

[[Page 22403]]

authority and/or Regulation Reserve Sharing Group. These costs 
represent an estimate of the costs a small entity could incur if the 
entity is identified as an applicable entity. The Commission does not 
consider the estimated cost per small entity to have a significant 
economic impact on a substantial number of small entities. The 
Commission did not receive any comments regarding this aspect of the 
NOPR. Based on the above, the Commission certifies that this Final Rule 
will not have a significant economic impact on a substantial number of 
small entities. Accordingly, no regulatory flexibility analysis is 
required.

VIII. Document Availability

    55. 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.
    56. 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.
    57. 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].

IX. Effective Date and Congressional Notification

    58. This Final Rule is effective June 22, 2015. 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.\86\ The Commission will 
submit the final rule to both houses of Congress and to the General 
Accountability Office.
---------------------------------------------------------------------------

    \86\ See 5 U.S.C. 804(2).

    By the Commission.
    Issued: April 16, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-09227 Filed 4-21-15; 8:45 am]
 BILLING CODE 6717-01-P