[Federal Register Volume 83, Number 114 (Wednesday, June 13, 2018)]
[Rules and Regulations]
[Pages 27505-27511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12663]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 
 ========================================================================
 

  Federal Register / Vol. 83, No. 114 / Wednesday, June 13, 2018 / 
Rules and Regulations  

[[Page 27505]]



DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM16-22-000; Order No. 847]


Coordination of Protection Systems for Performance During Faults 
and Specific Training for Personnel Reliability Standards

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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

SUMMARY: The Federal Energy Regulatory Commission (Commission) approves 
Reliability Standards PRC-027-1 (Coordination of Protection Systems for 
Performance During Faults) and PER-006-1 (Specific Training for 
Personnel) submitted by the North American Electric Reliability 
Corporation (NERC).

DATES: This rule will become effective August 13, 2018.

FOR FURTHER INFORMATION CONTACT: 
Juan Villar (Technical Information), Office of Electric Reliability, 
Division of Reliability Standards and Security, 888 First Street NE, 
Washington, DC 20426, Telephone: (772) 678-6496, [email protected].
Alan Rukin (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 
20426, Telephone: (202) 502-8502, [email protected].

SUPPLEMENTARY INFORMATION:

Order No. 847

Final Rule

(Issued June 7, 2018)
    1. Pursuant to section 215 of the Federal Power Act (FPA), the 
Commission approves Reliability Standards PRC-027-1 (Coordination of 
Protection Systems for Performance During Faults) and PER-006-1 
(Specific Training for Personnel).\1\ The North American Electric 
Reliability Corporation (NERC), the Commission-certified Electric 
Reliability Organization (ERO), submitted Reliability Standards PRC-
027-1 and PER-006-1 for approval. As discussed below, we determine that 
Reliability Standard PRC-027-1, which is designed to maintain the 
coordination of protection systems installed to detect and isolate 
faults on bulk electric system elements, such that those protection 
systems operate in the intended sequence during faults, and PER-006-1, 
which is intended to ensure that personnel are trained on specific 
topics essential to reliability to perform or support real-time 
operations of the bulk electric system, improve upon the currently-
effective Reliability Standards. In addition, based on the record 
before us, we do not adopt the NOPR proposal to direct NERC to modify 
Reliability Standard PRC-027-1 to require an initial protection system 
coordination study to ensure that applicable entities will perform (or 
have performed), as a baseline, a study demonstrating proper 
coordination of its protection systems.
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o (2012).
---------------------------------------------------------------------------

    2. The Commission also approves the associated violation risk 
factors, violation severity levels, implementation plans, and effective 
dates proposed by NERC for Reliability Standards PRC-027-1 and PER-006-
1. The Commission further approves the retirement of currently-
effective Reliability Standard PRC-001-1.1(ii) (System Protection 
Coordination) as proposed by NERC. Finally, the Commission approves new 
and revised definitions submitted by NERC for incorporation in the NERC 
Glossary for the following terms: (1) ``protection system coordination 
study;'' (2) ``operational planning analysis;'' and (3) ``real-time 
assessment.'' \2\
---------------------------------------------------------------------------

    \2\ NERC Glossary of Terms Used in NERC Reliability Standards 
(NERC Glossary).
---------------------------------------------------------------------------

I. Background

A. Section 215 and Mandatory Reliability Standards

    3. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval.\3\ Once approved, the Reliability 
Standards may be enforced by the ERO subject to Commission oversight or 
by the Commission independently.\4\ In 2006, the Commission certified 
NERC as the ERO pursuant to section 215 of the FPA.\5\
---------------------------------------------------------------------------

    \3\ Id. 824o(c), (d).
    \4\ Id. 824o(e).
    \5\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
order on compliance, 118 FERC ] 61,190, order on reh'g, 119 FERC ] 
61,046 (2007), aff'd sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 
(D.C. Cir. 2009).
---------------------------------------------------------------------------

B. Order No. 693

    4. On March 16, 2007, the Commission issued Order No. 693, 
approving 83 of the 107 Reliability Standards filed by NERC, including 
Reliability Standard PRC-001-1.\6\ In addition, the Commission directed 
NERC to develop modifications to Reliability Standard PRC-001-1 that:
---------------------------------------------------------------------------

    \6\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 1433-1449, order 
on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).

    (1) correct the references for Requirements, and [sic]
    (2) include a requirement that upon the detection of failures in 
relays or protection system elements on the Bulk-Power System that 
threaten reliable operation, relevant transmission operators must be 
informed promptly, but within a specified period of time that is 
developed in the Reliability Standards development process, whereas 
generator operators must also promptly inform their transmission 
operators; and (3) clarifies that, after being informed of failures 
in relays or protection system elements that threaten reliability of 
the Bulk-Power System, transmission operators must carry out 
corrective control actions, i.e., return a system to a stable state 
that respects system requirements as soon as possible and no longer 
than 30 minutes after they receive notice of the failure.\7\
---------------------------------------------------------------------------

    \7\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1449.
---------------------------------------------------------------------------

C. NERC Petition and Reliability Standards PRC-027-1 and PER-006-1

    5. On September 2, 2016, NERC submitted a petition seeking 
Commission approval of Reliability Standards PRC-027-1 and PER-006-
1.\8\

[[Page 27506]]

NERC stated that the Reliability Standards, new and revised NERC 
Glossary terms, and the retirement of Reliability Standard PRC-001-
1.1(ii) satisfy the Commission's criteria in Order No. 672 and are 
just, reasonable, not unduly discriminatory or preferential, and in the 
public interest.\9\ NERC explained that the intent of the submitted 
Reliability Standards and changes to the NERC Glossary are to maintain 
the coordination of protection systems installed to detect and isolate 
faults on bulk electric system elements and require registered entities 
to provide training to their relevant personnel on protection systems 
and remedial action schemes. NERC asserted that the submitted 
Reliability Standards are an improvement over currently-effective 
Reliability Standard PRC-001-1.1(ii) and will ensure that appropriate 
personnel are trained on protection systems and that protection systems 
are appropriately studied, coordinated, and monitored.
---------------------------------------------------------------------------

    \8\ Reliability Standards PRC-027-1 and PER-006-1 are not 
attached to this Final Rule. The Reliability Standards are available 
on the Commission's eLibrary document retrieval system in Docket No. 
RM16-22-000 and are posted on the NERC website, http://www.nerc.com.
    \9\ NERC Petition at 10.
---------------------------------------------------------------------------

1. Reliability Standard PER-006-1
    6. NERC stated that Reliability Standard PER-006-1 requires 
generator operators to use a systematic approach to develop and 
implement training for dispatch personnel at centrally-located dispatch 
centers.\10\ NERC explained that Reliability Standard PER-006-1 will 
also cover plant personnel who are responsible for real-time control of 
a generator. NERC maintained that it is appropriate to train plant 
personnel in the functionality of protection systems and remedial 
action schemes. NERC observed that Reliability Standard PER-006-1 
replaces the phrase ``purpose and limitations'' used in Reliability 
Standard PRC-001-1(ii) with the phrase ``operational functionality'' to 
clearly identify the objective of the training.\11\ NERC also noted 
that Reliability Standard PER-006-1 replaces the phrase ``applied in 
its area'' in Reliability Standard PRC-001-1.1(ii) with the phrase 
``that affect the output of the generating facility(ies) it operates'' 
to properly tailor the scope of the required training. NERC noted that 
Reliability Standard PER-006-1 does not specify a periodicity for the 
required training.
---------------------------------------------------------------------------

    \10\ Id. at 13.
    \11\ Id. at 15.
---------------------------------------------------------------------------

2. Reliability Standard PRC-027-1
    7. NERC asserted that Reliability Standard PRC-027-1:

provides a clear set of Requirements that obligate entities to (1) 
implement a process for establishing and coordinating new or revised 
Protection System settings, and (2) periodically study Protection 
System settings that could be affected by incremental changes in 
Fault current to ensure the Protection Systems continue to operate 
in their intended sequence.\12\
---------------------------------------------------------------------------

    \12\ Id. at 26.

    According to NERC, Reliability Standard PRC-027-1, Requirement R1 
mandates that each transmission owner, generator owner, and 
distribution provider establish a process for developing new and 
revised protection system settings for bulk electric system 
elements.\13\
---------------------------------------------------------------------------

    \13\ Id. at 27.
---------------------------------------------------------------------------

    8. NERC stated that Reliability Standard PRC-027-1, Requirement R2 
mandates that every six years, applicable entities must either: (1) 
Perform a protection system coordination study to determine whether the 
protection systems continue to operate in the intended sequence during 
faults; (2) compare present fault current values to an established 
fault current baseline and, only if the comparison identifies a 15 
percent or greater deviation in fault current values (either three 
phase or phase to ground) at a bus to which the bulk electric system is 
connected, perform a protection system coordination study; or (3) use a 
combination of Options 1 and 2.\14\
---------------------------------------------------------------------------

    \14\ Id. at 26.
---------------------------------------------------------------------------

    9. NERC explained that Reliability Standard PRC-027-1, Requirement 
R3 will require applicable entities to use the process established 
under Reliability Standard PRC-027-1, Requirement R1 for the 
development of any new or revised protection system settings.
3. Retirement of Reliability Standard PRC-001-1.1(ii)
    10. NERC stated that Reliability Standard PRC-001-1.1(ii) includes 
six requirements that are either addressed by Reliability Standards 
approved by the Commission or by Reliability Standards PER-006-1and 
PRC-027-1. Specifically, NERC explained that Reliability Standard PRC-
001-1.1(ii), Requirement R1 has been partially replaced by Reliability 
Standards PER-003-1 and PER-005-2. NERC continued that Reliability 
Standard PER-006-1 and the revised definitions of operational planning 
analysis and real-time assessment will replace the remaining portions 
of Reliability Standard PRC-001-1.1(ii), Requirement R1. NERC asserted 
that Reliability Standard PRC-001-1.1(ii), Requirement R2 has been 
addressed by Reliability Standards IRO-001-4, IRO-008-2, IRO-010-2, 
TOP-001-3, and TOP-003-3, which the Commission approved in Order No. 
817.\15\ NERC stated that Reliability Standard PRC-027-1 will replace 
Reliability Standard PRC-001-1.1(ii), Requirements R3 and R4. NERC also 
explained that Reliability Standard PRC-001-1.1(ii), Requirement R5 has 
been replaced with several Reliability Standards developed after 
Reliability Standard PRC-001-1(ii) became effective.\16\ NERC further 
stated that Reliability Standard PRC-001-1.1(ii), Requirement R6 has 
been replaced with Reliability Standards TOP-001-3 and TOP-003-3.
---------------------------------------------------------------------------

    \15\ Id. at 5 (citing Transmission Operations Reliability 
Standards and Interconnection Reliability Operations and 
Coordination Reliability Standards, Order No. 817, 153 FERC ] 61,178 
(2015)).
    \16\ Id. at 6.
---------------------------------------------------------------------------

D. Notice of Proposed Rulemaking

    11. On November 16, 2017, the Commission issued a Notice of 
Proposed Rulemaking proposing to approve Reliability Standards PRC-027-
1 and PER-006-1.\17\ The NOPR proposed to determine that Reliability 
Standards PRC-027-1 and PER-006-1 improve upon the currently-effective 
Reliability Standards. However, the NOPR observed that Reliability 
Standard PRC-027-1, Requirement R2, Option 2 does not appear to ensure 
coordination of all bulk electric system elements with protection 
system functions because it does not require an initial protection 
system coordination study. Accordingly, the NOPR also proposed to 
direct NERC, pursuant to section 215(d)(5) of the FPA, to submit 
modifications to Reliability Standard PRC-027-1 within 12 months of the 
effective date of this Final Rule to require an initial protection 
system coordination study to ensure that applicable entities will 
perform (or have performed), as a baseline, a study demonstrating 
proper coordination of its protection systems.\18\
---------------------------------------------------------------------------

    \17\ Coordination of Protection Systems for Performance During 
Faults and Specific Training for Personnel Reliability Standards, 
Notice of Proposed Rulemaking, 82 FR 55535 (Nov. 22, 2017), 161 FERC 
] 61,159, at P 12 (2017) (NOPR). The NOPR was erroneously published 
a second time in the Federal Register on November 28, 2017, which 
changed the comment date to January 29, 2018. 82 FR 56759 (Nov. 30, 
2017); 82 FR 56186 (Nov. 28, 2017).
    \18\ NOPR, 161 FERC ] 61,159 at PP 14, 24.
---------------------------------------------------------------------------

    12. In addition, the NOPR proposed to approve the associated 
violation risk factors and violation severity levels, implementation 
plan, and effective date proposed by NERC.\19\ The NOPR also proposed 
to approve the revised definitions for inclusion in the NERC

[[Page 27507]]

Glossary.\20\ Further, the NOPR proposed to approve the retirement of 
Reliability Standard PRC-001-1.1(ii), as requested by NERC.\21\
---------------------------------------------------------------------------

    \19\ Id. P 13.
    \20\ Id.
    \21\ Id.
---------------------------------------------------------------------------

    13. In response to the NOPR, the Commission received fifteen sets 
of comments. We address below the issues raised in the NOPR and 
comments. The Appendix to this Final Rule lists the entities that filed 
comments in response to the NOPR.

II. Discussion

    14. Pursuant to section 215(d)(2) of the FPA, we approve 
Reliability Standards PER-006-1 and PRC-027-1 as just, reasonable, not 
unduly discriminatory or preferential, and in the public interest, as 
both Reliability Standards improve on currently-effective Reliability 
Standard PRC-001-1.1(ii) in important ways.\22\ As discussed below, we 
do not adopt the NOPR proposal to direct NERC to modify Reliability 
Standard PRC-027-1 to require coordination of all bulk electric system 
elements with protection system functions.
---------------------------------------------------------------------------

    \22\ 16 U.S.C. 824o(d)(2).
---------------------------------------------------------------------------

    15. Reliability Standard PRC-027-1 improves on currently-effective 
Reliability Standard PRC-001-1.1(ii) by: (1) Modifying the 
applicability section to include the appropriate functional entity 
types with the responsibilities, resources, and skill sets to conduct 
the studies required to coordinate protection systems, and (2) listing 
the protection system functions on all bulk electric system elements 
that require coordination. Reliability Standard PER-006-1, along with 
existing formal training requirements in the Personnel Performance, 
Training, and Qualifications (PER) group of Reliability Standards, also 
improves upon Reliability Standard PRC-001-1.1(ii), Requirement R1 by 
ensuring that the necessary personnel are familiar with and understand 
the purpose and limitations of protection systems schemes while 
providing more precise and auditable requirements.
    16. In addition, we approve NERC's associated violation risk 
factors, violation severity levels, implementation plans, and effective 
dates. We also approve the revised definitions for inclusion in the 
NERC Glossary. Further, we approve the retirement of Reliability 
Standard PRC-001-1.1(ii), as requested by NERC.

Initial Protection System Coordination Study

NOPR
    17. The NOPR proposed to direct that NERC develop modifications to 
Reliability Standard PRC-027-1 to ensure coordination of all bulk 
electric system elements with protection system functions by requiring 
that applicable entities perform an initial protection coordination 
study under Requirement R2, Option 2.
Comments
    18. NERC does not support the proposed directive because it 
believes that the proposed directive is unduly burdensome and 
unsupported by the materials cited in the NOPR. NERC contends that 
while the ``proposed directive could potentially help reduce 
misoperations caused by coordination issues . . . [it] would also 
impose a significant burden on industry . . . requiring a substantial 
expenditure of resources.'' \23\ NERC also states that it ``expects 
that many entities will choose to do a full Protection System 
Coordination Study . . . for their more impactful [bulk electric 
system] Elements'' and that ``it is highly likely that the overwhelming 
majority of entities have already conducted coordination studies for 
their Protection Systems.'' \24\ While NERC agrees with the goal of 
reducing protection system misoperation rates on the bulk electric 
system, it contends that recent misoperation rates demonstrate that 
mis-coordination of existing protection systems ``does not present a 
widespread risk to [bulk electric system] reliability that would 
necessitate the expenditure of resources required to conduct full 
Protection System Coordination Studies for every [bulk electric system] 
element with a Protection System.'' \25\
---------------------------------------------------------------------------

    \23\ NERC Comments at 4.
    \24\ Id. at 5-6.
    \25\ Id. at 6.
---------------------------------------------------------------------------

    19. In addition, NERC and other commenters contend that the 
materials cited in the NOPR do not support the proposal to modify 
Reliability Standard PRC-027-1.\26\ NERC, EEI and Tri-State contend 
that the Arizona Southern California September 8, 2011 Outage Report is 
unsupportive because it addresses mis-coordination of remedial action 
schemes and not protection systems.\27\ NERC and Tri-State assert that 
the NERC System Protection Control Task Force Report addressed issues 
specific to generation transmission interfaces and did not apply 
broadly to all bulk electric system elements with protection 
systems.\28\ NERC and Tri-State also contend that the 2009 letter from 
the NERC President to the NERC board of Trustees and stakeholders is no 
longer relevant because mis-coordination issues are now responsible for 
a smaller percentage of events and that mis-coordination has not 
recently caused any significant system disturbances.\29\ NERC and Tri-
State claim that Reliability Standard PRC-004 now requires applicable 
entities to mitigate the effects of misoperations by implementing a 
corrective action plan that has reduced misoperations.\30\
---------------------------------------------------------------------------

    \26\ See generally NERC Comments; EEI Comments; Tri-State 
Comments; Entergy Comments; ITC Comments.
    \27\ NERC Comments at 7; EEI Comments at 7; Tri-State Comments 
at 7-8.
    \28\ NERC Comments at 7-8; Tri-State Comments at 8-9.
    \29\ NERC Comments at 8; Tri-State Comments at 9-10.
    \30\ NERC Comments at 8; Tri-State Comments at 9.
---------------------------------------------------------------------------

    20. Further, while NERC agrees with the 2013 Misoperations Report 
that reducing misoperations, including mis-coordination events, is an 
important priority for bulk electric system reliability, NERC contends 
that the report does not indicate that requiring protection system 
coordination studies for all applicable elements, as proposed in the 
NOPR, is the only or optimal way to reduce mis-coordination events.\31\ 
EEI also contends that the 2013 Misoperations Report shows that human 
error and lack of training are responsible for a significant portion of 
misoperations.\32\
---------------------------------------------------------------------------

    \31\ NERC Comments at 9.
    \32\ EEI Comments at 7.
---------------------------------------------------------------------------

    21. NERC, EEI, and Tri-State explain that the 2014 incident 
identified in the ``lessons learned'' document on ``Generation 
Relaying--Underfrequency Protection Coordination'' was unrelated to 
protection system coordination.\33\
---------------------------------------------------------------------------

    \33\ NERC Comments at 10; EEI Comments at 8; Tri-State Comments 
at 10.
---------------------------------------------------------------------------

    22. Finally, NERC states that while the 2016 State of Reliability 
Report highlights the continued need to reduce misoperations, the 
report does not indicate that there is a need to require entities to 
perform a protection system coordination study for every bulk electric 
system element with a protection system.\34\ NERC also contends that 
the 2017 State of Reliability Report observes a continuing decline in 
misoperation rates, but that misoperations are a priority for NERC.\35\ 
NERC states that the misoperations rate within the Texas Reliability 
Entity Region observed in the 2016 State of Reliability Report was 
mitigated by the

[[Page 27508]]

time NERC issued the 2017 State of Reliability Report.\36\ NERC claims 
that this reduction in misoperation events is evidence that requiring 
entities to perform protection system coordination studies is 
unnecessary because the entities will address the misoperation events 
without specific requirements in Reliability Standards.\37\
---------------------------------------------------------------------------

    \34\ NERC Comments at 10.
    \35\ Id. at 9.
    \36\ NERC Comments at 11; see also Entergy Comments at 8.
    \37\ NERC Comments at 11.
---------------------------------------------------------------------------

    23. Other commenters do not support the proposal to direct NERC to 
develop modifications to Reliability Standard PRC-027-1 because they 
generally contend that the proposed directive is not necessary and 
would impose a burden without a proportional reliability benefit.\38\ 
Hydro One estimates that it will need approximately 30,000 hours of 
work to perform an initial protection system coordination study.\39\ 
Tri-State estimates that it would take an engineer at least twenty 
hours to perform a protection system coordination study at each of its 
approximately 700 terminals.\40\ Tri-State estimates that the actual 
cost to all applicable entities could be more than $120 million.\41\ 
PG&E estimates a cost to industry ``greatly in excess of $100 million'' 
and asserts that the proposed directive would require PG&E to perform 
coordination studies for 95 percent of the PG&E bulk electric system at 
a cost of $3.5 million in engineering labor.\42\
---------------------------------------------------------------------------

    \38\ APPA/TAPS Comments at 3; EEI Comments at 3; El Paso 
Electric Comments at 4; Entergy Comments at 4; Hydro One Comments at 
1-2; ITC Comments at 3; LPPC Comments at 2; NPPD Comments at 1; 
NRECA/ELCON Comments at 5; Oncor Comments at 1; PG&E Comments at 2; 
SCE&G Comments at 1; Tri-State Comments at 4.
    \39\ Hydro One Comments at 1.
    \40\ Id. at 13.
    \41\ Id.
    \42\ PG&E Comments at 3.
---------------------------------------------------------------------------

    24. Entergy requests that the Commission find that NERC's approach 
for requiring protection system coordination studies achieves the 
Reliability Standard's ``reliability goals effectively and 
efficiently.'' \43\ Entergy opines that, by adopting NERC's proposal 
without modification, the Commission appropriately would give ``due 
weight'' to the technical expertise of the ERO. Entergy asserts that 
NERC properly supported Requirement R2 by setting forth evidence of the 
frequency of coordination events over a four-year period, which shows 
that only 11 percent of misoperation events (17 events out of 151) and 
only 2.9 percent of total events (17 out of 574) involved Protection 
System coordination issues. Further, Entergy claims that, in proposing 
the Reliability Standard, NERC was aware of the possibility that some 
bulk electric system elements may never undergo a Protection System 
Coordination Study and that ``NERC does not afford this possibility the 
same risk as the Commission.'' \44\ According to Entergy, ``NERC has 
properly balanced the implementation costs and reliability benefits of 
the proposed PRC-027-1 Reliability Standard and determined that Option 
2 is sufficient to ensure reliability'' and the Commission should defer 
to NERC's expertise, or otherwise provide more support to justify a 
deviation from NERC's proposal.
---------------------------------------------------------------------------

    \43\ Entergy Comments at 5.
    \44\ Id. at 9-10.
---------------------------------------------------------------------------

    25. In addition, some commenters expressed concern that applicable 
entities may not have maintained sufficient documentation to 
substantiate prior protection system coordination studies and, as 
result, entities would have to perform new protection system 
coordination studies purely for compliance purposes.\45\
---------------------------------------------------------------------------

    \45\ ITC Comments at 4; Entergy Comments at 1; NPPD Comments at 
1; PG&E Comments at 3.
---------------------------------------------------------------------------

    26. As an alternative to the proposed directive, NERC and other 
commenters suggest that Reliability Standard PRC-027-1 be modified so 
that it requires an applicable entity to conduct an initial baseline 
protection system coordination study on a certain subset of its bulk 
electric system elements (i.e., based on a higher voltage or higher 
risk protection systems).\46\ NERC and other commenters also request 
that the Commission permit NERC to allow more than 6 years to complete 
the initial baseline protection system coordination studies (i.e., 10 
or 12 years) if the Commission directs NERC to modify Reliability 
Standard PRC-027-1.\47\ EEI recommends that if the Commission continues 
to have concerns about Reliability Standard PRC-027-1, Requirement R2, 
Option 2, as an alternative to the proposed directive, a final rule 
should direct NERC ``to assess the effectiveness of Option 2 after the 
implementation of the proposed Reliability Standard and if necessary 
make technical recommendations to improve the efficiency and 
effectiveness as appropriate.'' \48\
---------------------------------------------------------------------------

    \46\ NERC Comments at 11-12; El Paso Electric Comments at 2; 
Entergy Comments at 12; NRECA/ELCON Comments at 6-7.
    \47\ NERC Comments at 12; El Paso Electric Comments at 2-3; 
Entergy Comments at 12-13; NRECA/ELCON Comments at 6-7. Separately, 
El Paso Electric contends that the six-year cycle proposed by NERC 
in Reliability Standard PRC-027-1, Requirement R2 is too short and 
directs resources away from ``other activities that have a greater 
likelihood of improving reliability outcomes in a demonstrable 
way.'' El Paso Electric Comments at 2. We disagree. NERC recognized 
the potential burden imposed by Requirement R2 and determined that 
six years ``balance[d] the resources required to perform Protection 
System Coordination Studies and the potential reliability impacts 
created by incremental changes of Fault current over time.'' NERC 
Petition at 40. Moreover, during the standard drafting process, some 
commenters indicated that six years was too long an interval. See, 
e.g., NERC Petition, Exhibit G (Summary of Development History and 
Record of Development) at 1479 of pdf (ReliabilityFirst recommending 
a 24-month period to conduct protection system coordination study), 
2169 of pdf (Texas RE stating that six years is too long of a time 
period between studies of fault currents).
    \48\ EEI Comments at 6.
---------------------------------------------------------------------------

    27. Idaho Power supports the proposed directive.\49\ Idaho Power 
supports eliminating Reliability Standard PRC-027-1, Requirement R2, 
Option 2 because it contends that Option 1 is a more robust option 
explaining that it is ``preferable because it is more likely to address 
miscoordinations.'' \50\
---------------------------------------------------------------------------

    \49\ Idaho Power Comments at 1-2.
    \50\ Id. at 2.
---------------------------------------------------------------------------

Commission Determination
    28. Based on the record before us, we do not adopt the directive 
proposed in the NOPR. The record in this proceeding supports the NOPR's 
conclusion that mis-coordination of protection systems may pose a 
potential reliability risk and, as currently drafted, Reliability 
Standard PRC-027-1, Requirement R2, Option 2 permits applicable 
entities to forego protection system coordination studies under certain 
circumstances.\51\ However, we are persuaded by the statements from 
NERC and other commenters that applicable entities generally perform, 
or will choose to perform for their significant facilities, protection 
system coordination studies even in the absence of a Reliability 
Standard requirement.\52\ We also recognize the concern raised by 
commenters regarding the burden of compliance. Specifically, we 
recognize the concern that were the NOPR directive adopted, applicable 
entities could be required to re-run protection system coordination 
studies for the sole purpose of generating compliance documentation, 
even if such entities already performed protection

[[Page 27509]]

system coordination studies that remain valid but lack documentation to 
substantiate compliance. Accordingly, pursuant to 215(d)(2) of the FPA, 
we approve Reliability Standard PRC-027-1 and do not direct 
modifications to the Reliability Standard.\53\
---------------------------------------------------------------------------

    \51\ See, e.g., NERC Comments at 6 (``NERC and the standard 
drafting team concluded that Protection System coordination did not 
present a prevalent enough risk to the reliable operation of the 
[bulk electric system] to warrant imposing the burden of requiring 
applicable entities to perform a full Protection System Coordination 
Study for every [bulk electric system] Element with a Protection 
System.''); Entergy Comments at 9 (``In proposing the Reliability 
Standard, NERC was aware of the possibility that some bulk electric 
system elements may never undergo a Protection System Coordination 
Study.'').
    \52\ See, e.g., NERC Comments at 5; NPPD Comments at 1; Tri-
State Comments at 10; ITC Comments at 4.
    \53\ 16 U.S.C. 824o(d)(2).
---------------------------------------------------------------------------

III. Information Collection Statement

    29. The collections of information addressed in this Final Rule are 
subject to review by the Office of Management and Budget (OMB) under 
section 3507(d) of the Paperwork Reduction Act of 1995.\54\ OMB's 
regulations require approval of certain information collection 
requirements imposed by agency rules.\55\ 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.
---------------------------------------------------------------------------

    \54\ 44 U.S.C. 3507(d) (2012).
    \55\ 5 CFR 1320.11 (2017).
---------------------------------------------------------------------------

    30. The Commission solicited public comments in the NOPR on the 
need for this information, whether the information will have practical 
utility, the accuracy of the burden estimates, ways to enhance the 
quality, utility, and clarity of the information to be collected or 
retained, and any suggested methods for minimizing respondents' burden, 
including the use of automated information techniques. The Commission 
did not receive comments regarding the burden estimates for the 
Reliability Standards approved herein (i.e., Reliability Standards PRC-
027-1 and PER-006-1).\56\
---------------------------------------------------------------------------

    \56\ As discussed above, several commenters addressed the 
potential burden of a new version of Reliability Standard PRC-027-1 
modified, pursuant to the Commission's directive, to require initial 
protection system coordination studies. See, e.g., Tri-State 
Comments at 12. However, those comments are not relevant to the 
burden estimates contained in this Final Rule because, herein, the 
Commission only approves Reliability Standards PRC-027-1 and PER-
006-1.
---------------------------------------------------------------------------

    31. The information collection requirements in this Final Rule in 
Docket No. RM16-22-000 are associated with FERC-725A, FERC-725G, and 
FERC-725Y, as discussed below.\57\
---------------------------------------------------------------------------

    \57\ In the NOPR in Docket No. RM16-22-000, some of the 
reporting requirements were included under FERC-725G6 (OMB Control 
No. 1902-0300), a temporary place holder, because FERC-725G was 
pending review at OMB in an unrelated action. As indicated below, 
those reporting requirements are now included under FERC-725G (OMB 
Control No. 1902-0252). When the NOPR in Docket No. RM16-22-000 was 
issued, another unrelated item affecting FERC-725A was pending OMB 
review. Burden estimates were provided in order to solicit public 
comments, but the burden reduction to FERC-725A was not submitted to 
OMB at that time. The burden reduction to FERC-725A for this Final 
Rule will be submitted to OMB for review.
---------------------------------------------------------------------------

    32. Public Reporting Burden: The number of respondents below is 
based on an examination of the NERC compliance registry on December 1, 
2017, for transmission owners, generator owners, generator operators, 
and distribution providers within the United States and an estimate of 
how many such entities from that registry will be affected by the 
Reliability Standards in this Final Rule for adoption and 
implementation. As of December 1, 2017, 337 transmission owners, 971 
generator owners, 944 generator operators, and 419 distribution 
providers in the United States were registered in the NERC compliance 
registry. However, under NERC's compliance registration program, 
entities may be registered for multiple functions, so these numbers 
incorporate some double counting. We note that many generation sites 
share a common generator owner or generator operator. The following 
table provides the estimated annual burden and cost related to 
information collection requirements in this Final Rule.\58\
---------------------------------------------------------------------------

    \58\ TO = transmission owner; TOP = transmission operator; GO = 
generator owner; GOP = generator operator; DP = distribution 
provider; and BA = balancing authority.

                             Changes Due to the Final Rule in Docket No. RM16-22-000
----------------------------------------------------------------------------------------------------------------
                                                Annual
                                              number of                        Average burden     Annual burden
    Respondent category and      Number of    responses    Total  number of    hours and cost    hours and total
       requirement \59\         respondents      per      annual  responses  per response \60\     annual cost
                                              respondent                                         (rounded) \61\
                                        (1)          (2)    (1) * (2) = (3)  (4)..............  (3) * (4) = (5)
----------------------------------------------------------------------------------------------------------------
                                 FERC-725G (Reliability Standard PRC-027-1) \62\
----------------------------------------------------------------------------------------------------------------
TO; Reporting Reqs. R1, R2, &           337            1                337  60 hrs.;           20,220 hrs.;
 R3.                                                                          $3,941.40.         $1,328,252.
TO; Recordkeeping Reqs........          337            1                337  40 hrs.;           13,480 hrs.;
                                                                              $1,565.60.         $527,607.
GO; Reporting Reqs. R1, R2, &           971            1                971  10 hrs.; $656.90.  9,710 hrs.;
 R3.                                                                                             $637,830.
GO; Recordkeeping Reqs........          971            1                971  10 hrs.; $391.40.  9,710 hrs.;
                                                                                                 $380,049.
DP; Reporting Reqs. R1, R2, &           419            1                419  10 hrs.; $656.90.  4,190 hrs.;
 R3.                                                                                             $275,241.
DP; Recordkeeping Reqs........          419            1                419  10 hrs.; $391.40.  4,190 hrs.;
                                                                                                 $163,997.
Sub-Total for Reporting Reqs.   ...........  ...........  .................  .................  34,120 hrs.;
 for FERC-725G.                                                                                  $2,241,323.
Sub-Total for Recordkeeping     ...........  ...........  .................  .................  27,380 hrs.;
 Reqs. for FERC-725G.                                                                            $1,072,653.
Total Increase for FERC-725G..  ...........  ...........  .................  .................  61,500 hrs.;
                                                                                                 $3,313,976.
----------------------------------------------------------------------------------------------------------------
                                 FERC-725Y (Reliability Standard PER-006-1) \63\
----------------------------------------------------------------------------------------------------------------
GOP; Reporting Req. R1........          944            1                944  5 hrs.; $328.45..  4,720 hrs.;
                                                                                                 $310,057.
GOP; Recordkeeping Req........          944            1                944  10 hrs.; $391.40.  9,440 hrs.;
                                                                                                 $369,482.
Total Increase for FERC-725Y..  ...........  ...........  .................  .................  14,160 hrs.;
                                                                                                 $679,539.
----------------------------------------------------------------------------------------------------------------
                  Reductions to FERC-725A (retirement of Reliability Standard PRC-001-1.1) \64\
----------------------------------------------------------------------------------------------------------------
GOP; Reporting Req............          944            1                944  40 hrs.;           37,760 hrs.;
                                                                              $2,627.60.         $2,480,454.
GOP; Recordkeeping Req........          944            1                944  50 hrs.;           47,200 hrs.;
                                                                              $1,957.00.         $1,847,408.
TOP; Reporting Req............          176            1                176  60 hrs.;           10,560 hrs.;
                                                                              $3,941.40.         $693,686.
TOP; Recordkeeping Req........          176            1                176  70 hrs.;           12,320 hrs.;
                                                                              $2,739.80.         $482,205.
BA; Reporting Req.............           99            1                 99  32 hrs.;           3,168 hrs.;
                                                                              $2,102.08.         $208,106.
BA; Recordkeeping Req.........           99            1                 99  20 hrs.; $782.80.  1,980 hrs.;
                                                                                                 $77,497.
Reduction Sub-Total Reporting   ...........  ...........  .................  .................  51,484 hrs.;
 Reqs. for FERC-725A.                                                                            $3,382,246.
Reduction Sub-Total             ...........  ...........  .................  .................  61,500 hrs.;
 Recordkeeping Reqs. for FERC-                                                                   $2,407,110.
 725A.
Reduction Sub-Total for FERC-   ...........  ...........  .................  .................  112,984 hrs.;
 725A.                                                                                           $5,789,356
                                                                                                 (reduction).

[[Page 27510]]

 
NET TOTAL REDUCTION FOR         ...........  ...........  .................  .................  37,324 hrs.;
 CHANGES IN RM16-22-000.                                                                         $1,795,841
                                                                                                 (reduction).
----------------------------------------------------------------------------------------------------------------

    Titles: FERC-725A (Mandatory Reliability Standards for the Bulk-
Power System), FERC-725G (Reliability Standards for the Bulk Power 
System: PRC Reliability Standards) and FERC-725Y (Mandatory Reliability 
Standards: Operations Personnel Training).
---------------------------------------------------------------------------

    \59\ For each Reliability Standard, the Measure shows the 
acceptable evidence for the associated Reporting Requirement, and 
the Compliance section details the related Recordkeeping 
Requirement.
    \60\ The estimates for cost per hour are based on May 2016 wage 
figures from the Bureau of Labor Statistics (BLS, https://www.bls.gov/oes/current/naics2_22.htm) and BLS benefits information 
from March 20, 2018 (for December 2017, https://www.bls.gov/news.release/ecec.nr0.htm). The estimated hourly cost, for wages 
plus benefits, are: (a) $68.12/hour, for electrical engineer, 
Occupation Code 17-2071, and (b) $39.14/hour, for information and 
record clerk, Occupation Code 43-4199.
    The hourly cost for an electrical engineer is used for the 
reporting requirements; the hourly cost for a record clerk is used 
for the recordkeeping requirements.
---------------------------------------------------------------------------

    Action: Revisions to existing collections.
---------------------------------------------------------------------------

    \61\ For display purposes, the cost figures in column 5 have 
been rounded.
---------------------------------------------------------------------------

    OMB Control Nos.: 1902-0244 (FERC-725A); 1902-0252 (FERC-725G) and 
1902-0279 (FERC-725Y).
---------------------------------------------------------------------------

    \62\ Some of the reporting requirements are required at least 
every six calendar years. In this table, the Commission assumes that 
respondents might work on some of their elements each year; the 
annual burden estimate shown is one sixth of the burden associated 
with one complete six-year cycle. For example, for each transmission 
owner: (a) The annual reporting burden associated with Requirements 
R1, R2, and R3 is shown as 60 hours per year, and (b) the burden for 
the six-year cycle would be six times that, or a total of 360 hours.
---------------------------------------------------------------------------

    Respondents: Business or other for profit, and not for profit 
institutions.
---------------------------------------------------------------------------

    \63\ In order to provide improved information on the Reliability 
Standard and associated burden, FERC-725Y (rather than FERC-725A) 
will cover the burden required by PER-006-1.
---------------------------------------------------------------------------

    Frequency of Responses: Annual recordkeeping and reporting 
requirements, with some reporting requirements being at least once 
every six years.
---------------------------------------------------------------------------

    \64\ The estimates for average annual burden hours per response 
are based on figures in Order No. 693. Order No. 693, FERC Stats. & 
Regs. ] 31,242, at PP 1906-1907. The numbers of respondents and 
estimated hourly costs are based on current figures.
---------------------------------------------------------------------------

    Necessity of the Information: Reliability Standards PRC-027-1 and 
PER-006-1 set forth requirements for coordination of protection systems 
and personnel training on specific topics essential to reliability. The 
Commission approves Reliability Standards PRC-027-1 and PER-006-1, 
which will replace Commission-approved Reliability Standard PRC-001-
1.1(ii). Reliability Standards PRC-027-1 and PER-006-1 improve upon 
existing Reliability Standard PRC-001-1.1(ii) because the Reliability 
Standards assign responsibilities to entities with more appropriate 
resources and skill sets to conduct studies required to coordinate 
protection systems. The approved Reliability Standards also provide 
additional clarity to applicable entities.
    Internal review: The Commission has assured itself, by means of its 
internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements.

IV. Environmental Analysis

    33. 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.\65\ The 
action here falls within the categorical exclusion in the Commission's 
regulations for rules that are clarifying, corrective or procedural, 
for information gathering, analysis, and dissemination.\66\
---------------------------------------------------------------------------

    \65\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987) 
(cross-referenced at 41 FERC ] 61,284).
    \66\ 18 CFR 380.4(a)(2)(ii) (2017).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    34. The Regulatory Flexibility Act of 1980 (RFA) generally requires 
a description and analysis of final rules that will have significant 
economic impact on a substantial number of small entities.\67\ The 
Small Business Administration (SBA) defines which utilities are small 
businesses based on the number of employees that a utility and its 
affiliates employ.\68\
---------------------------------------------------------------------------

    \67\ 5 U.S.C. 601-612 (2012).
    \68\ 13 CFR 121.201, Subsector 221 (2017).
---------------------------------------------------------------------------

    35. Reliability Standard PRC-027-1 (included in FERC-725G) will 
apply to approximately 1,727 entities (337 transmission owners, 971 
generator owners, and 419 distribution providers) in the United 
States.\69\ Pursuant to SBA regulations, the small business threshold 
for Electric Bulk Power Transmission and Control is 500 employees. For 
generator owners, the small generator threshold ranges from 250 to 750 
employees (depending on the fuel source). For Electric Power 
Distribution, the small business threshold is 1,000 employees. We 
estimate that the annual cost for each entity will be $1,048 for each 
generator owner and distribution provider and $5,507 for each 
transmission owner.
---------------------------------------------------------------------------

    \69\ Many respondents serve multiple roles in the NERC 
compliance registry, so there is likely double counting in the 
estimates.
---------------------------------------------------------------------------

    36. Reliability Standard PER-006-1 (included in FERC-725Y) will 
apply to approximately 944 generator operators in the United States. 
Pursuant to SBA regulations the small business threshold for generator 
operators ranges from 250 to 750 employees (depending on the fuel 
source). We estimate that the annual cost for each generator operator 
will be $719.
    37. The retirement of Reliability Standard PRC-001-1.1(ii) 
(included in FERC-725A) will decrease the annual estimated cost for 944 
generator operators by $4,585 each, for 176 transmission operators by 
$6,681 each, and for 99 balancing authorities by $2,885 each. For the 
generator operators affected by this retirement and approval of 
Reliability Standard PER-006-1, the net annual effect would be a 
decrease of $3,866 each.
    38. We estimate the net annual cost of this Final Rule would vary, 
by type of entity, from an annual decrease of $6,681 (for each 
transmission operator) to an annual increase of $5,507 (for each 
transmission owner). We view this as a minimal economic impact for each 
entity. Accordingly, we certify that this Final Rule will not have a 
significant economic impact on a substantial number of small entities.

VI. Document Availability

    39. In addition to publishing the full text of this document in the 
Federal

[[Page 27511]]

Register, the Commission provides all interested persons an opportunity 
to view and/or print the contents of this document via the internet 
through FERC's Home Page (http://www.ferc.gov) and in FERC'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.
    40. From FERC'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.
    41. User assistance is available for eLibrary and the FERC's 
website during normal business hours from FERC 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

    42. The Final Rule is effective August 13, 2018. 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. This Final Rule is being 
submitted to the Senate, House, and Government Accountability Office.

    By the Commission.

    Issued: June 7, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix

List of Commenters

------------------------------------------------------------------------
                                   American Public Power Association and
            APPA/TAPS                 Transmission Access Policy Study
                                                   Group
------------------------------------------------------------------------
EEI..............................  Edison Electric Institute.
El Paso Electric.................  El Paso Electric Company.
Entergy..........................  Entergy Services, Inc.
Hydro One........................  Hydro One Networks Inc.
Idaho Power......................  Idaho Power Company.
ITC..............................  International Transmission Company d/
                                    b/a ITC Transmission, Michigan
                                    Electric Transmission Company, LLC,
                                    ITC Midwest LLC and ITC Great
                                    Plains, LLC.
LPPC.............................  Large Public Power Council.
NPPD.............................  Nebraska Public Power District.
NERC.............................  North American Electric Reliability
                                    Corporation.
NRECA/ELCON......................  National Rural Electric Cooperative
                                    Association and the Electricity
                                    Consumers Resource Council.
Oncor............................  Oncor Electric Delivery.
PG&E.............................  Pacific Gas and Electric Company.
SCE&G............................  South Carolina Electric and Gas
                                    Company.
Tri-State........................  Tri-State Generation and Transmission
                                    Association, Inc.
------------------------------------------------------------------------


[FR Doc. 2018-12663 Filed 6-12-18; 8:45 am]
 BILLING CODE 6717-01-P