
[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Proposed Rules]
[Pages 24427-24433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9809]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 38

[Docket No. RM05-5-020]


Standards for Business Practices and Communication Protocols for 
Public Utilities

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to amend its regulations to incorporate by reference the 
business practice standards adopted by the Wholesale Electric Quadrant 
of the North American Energy Standards Board (NAESB) that pertain to 
the measurement and verification of demand response and energy 
efficiency resources participating in organized wholesale electricity 
markets. NAESB adopted the measurement and verification of demand 
response standards in response to the Commission's findings in Order 
No. 676-F.

DATES: Comments are due June 25, 2012.

ADDRESSES: Comments, identified by docket number RM05-5-020, may be 
filed in the following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.
    These standards can be obtained from NAESB at 801 Travis Street, 
Suite 1675, Houston, TX 77002, telephone: (713) 356-0060, http://www.naesb.org, and are available for viewing in the Commission's Public 
Reference Room.

FOR FURTHER INFORMATION CONTACT:

David Kathan (Technical Issues), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6404, david.kathan@ferc.gov;
Dennis Hough (Legal Issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-8631, dennis.hough@ferc.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
I. Background...............................................           2
II. Discussion..............................................          10

[[Page 24428]]

 
    A. NAESB Phase II Demand Response M&V Standards.........          11
        1. Description......................................          12
        2. Discussion.......................................          15
    B. NAESB Wholesale Energy Efficiency M&V Standards......          20
        1. Description......................................          21
        2. Discussion.......................................          23
III. Notice of Use of Voluntary Consensus Standards.........          25
IV. Information Collection Statement........................          26
V. Environmental Analysis...................................          32
VI. Regulatory Flexibility Act Certification................          33
VII. Comment Procedures.....................................          35
VIII. Document Availability.................................          39
 

Notice of Proposed Rulemaking

(April 19, 2012)

    1. In this Notice of Proposed Rulemaking (NOPR), the Federal Energy 
Regulatory Commission (Commission) proposes to amend its regulations at 
18 CFR 38.2 under the Federal Power Act \1\ to incorporate by reference 
the business practice standards adopted by the Wholesale Electric 
Quadrant (WEQ) of the North American Energy Standards Board (NAESB) 
that pertain to the measurement and verification of demand response and 
energy efficiency resources participating in organized wholesale 
electricity markets.\2\ Adoption of these standards is intended to 
improve the methods and procedures used to accurately measure demand 
response and energy efficiency resource performance. Additionally, 
these standards should help Regional Transmission Organizations (RTO) 
and Independent System Operators (ISO) to properly credit demand 
response and energy efficiency resources for their services.\3\
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    \1\ 16 U.S.C. 791a et seq. (2006).
    \2\ See Report, North American Energy Standards Board, 
Measurement and Verification of Demand Response Products, Docket No. 
RM05-5-020 (filed May 3, 2011) (May 3 Report) (providing a status 
update and description of the proposed standards). In accordance 
with applicable copyright laws, complete versions of the standards 
are available from NAESB at 801 Travis Street, Suite 1675, Houston, 
TX 77002, telephone: (713) 356-0060, http://www.naesb.org, and are 
available for viewing in the Commission's Public Reference Room.
    \3\ The Commission has also sought RTO and ISO proposals 
regarding their measurement and verification methodologies, 
including in Order No. 745, Demand Response Compensation in 
Organized Wholesale Energy Markets, Order No. 745, 76 Fed. Reg. 
16,658 (Mar. 24, 2011), FERC Stats. & Regs. ] 31,322, at P 93-95 
(2011), order on reh'g, Order No. 745-A, 137 FERC ] 61,215, at P 123 
(2011).
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I. Background

    2. NAESB is a private consensus standards developer that divides 
its activities among four quadrants, each of which is composed of 
members from all segments of its respective industry.\4\ NAESB is an 
accredited standards organization under the auspices of the American 
National Standards Institute (ANSI). NAESB's procedures are designed to 
ensure that all industry members can have input into the development of 
a standard, whether or not they are members of NAESB, and each 
wholesale electricity standard that NAESB's WEQ adopts is supported by 
a consensus of the seven industry segments: end users, distribution/
load serving entities, transmission, generation, marketers/brokers, 
independent grid operators/planners and technology/services. Under the 
WEQ process, for a standard to be approved, it must receive a super-
majority vote of 67 percent of the members of the WEQ's Executive 
Committee, with support from at least 40 percent of each of the seven 
industry segments.\5\ For final approval, 67 percent of the WEQ's 
general membership must ratify the standard.\6\
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    \4\ The four quadrants are the wholesale and retail electric 
quadrants and the wholesale and retail natural gas quadrants.
    \5\ Under NAESB's procedures, interested persons may attend and 
participate in NAESB committee meetings and phone conferences, even 
if they are not NAESB members.
    \6\ See May 3 Report at 2.
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    3. In 2006, the Commission issued Order No. 676, a Final Rule that 
incorporated by reference business practice standards for the WEQ 
adopted by NAESB applicable to public utilities.\7\ Since 2006, the 
NAESB consensus industry stakeholder process has reviewed the NAESB 
business practice standards for public utilities with a view to 
creating a more efficient marketplace and it has adopted revisions 
that, in a number of instances, the Commission has made mandatory by 
incorporating by reference into the Commission's regulations.\8\
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    \7\ See Standards for Business Practices and Communication 
Protocols for Public Utilities, Order No. 676, FERC Stats. & Regs. ] 
31,216, (2006), reh'g denied, Order No. 676-A, 116 FERC ] 61,255 
(2006).
    \8\ Standards for Business Practices and Communication Protocols 
for Public Utilities, Order No. 676-F, FERC Stats. & Regs. ] 31,309 
(2010); Order No. 676-E, FERC Stats. & Regs. ] 31,299 (2009); Order 
No. 676-D, 124 FERC ] 61,317 (2008), Order No. 676-C, FERC Stats. & 
Regs. ] 31,274 (2008), Order No. 676-B, FERC Stats. & Regs. ] 31,246 
(2007).
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    4. NAESB began work on the development of business practice 
standards pertaining to the measurement and verification of demand 
response \9\ products and services in July 2007, when the NAESB WEQ 
Demand Side Management--Energy Efficiency (DSM-EE) subcommittee began 
work on this issue. This effort led to the adoption and ratification by 
NAESB of initial measurement and verification standards early in 2009.
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    \9\ Demand response means a reduction in the consumption of 
electric energy by customers from their expected consumption in 
response to an increase in the price of electric energy or to 
incentive payments designed to induce lower consumption of electric 
energy. 18 CFR 35.28(b)(4) (2011).
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    5. On April 17, 2009, NAESB filed a report (April 2009 Report) 
informing the Commission that it had adopted an initial set of business 
practice standards to categorize various demand response products and 
services and to support the measurement and verification of these 
products and services in organized wholesale electricity markets (Phase 
I Demand Response M&V Standards).\10\ Key to obtaining consensus on the 
initial set of standards was the agreement to proceed with further work 
on more detailed technical standards for the measurement and 
verification of demand response resources. The NAESB report recognized 
that these standards would need to be followed by the development of 
more detailed technical standards for the measurement and verification 
of demand response

[[Page 24429]]

products and services in RTO and ISO areas.
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    \10\ Report, North American Energy Standards Board, Measurement 
and Verification of Demand Response Products, Docket No. RM05-5-017, 
at 2 (filed Apr. 17, 2009) (April 2009 Report).
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    6. On April 15, 2010, the Commission issued Order No. 676-F, 
incorporating by reference \11\ the Phase I Demand Response M&V 
Standards \12\ that categorize various demand response products and 
services and support the measurement and verification of these products 
and services in organized wholesale electricity markets.\13\ The 
Commission stated that ``[w]hile NAESB's Phase I [Demand Response] M&V 
Standards represent a good first step, additional substantive standards 
would appear beneficial in creating transparent and consistent 
measurement and verification of demand response products and services 
in wholesale electric markets.'' \14\ The Commission also stated that 
``we expect Phase II will address issues related to baseline 
development * * *'' \15\ The Commission anticipated that the 
measurement and verification standards needed to accomplish this goal 
would be a focus of NAESB's Phase II measurement and verification 
standards development efforts.\16\
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    \11\ Incorporation by reference makes compliance with these 
standards mandatory for public utilities subject to Part 38 of the 
Commission's regulations.
    \12\ See Standards for Business Practices and Communication 
Protocols for Public Utilities, Notice of Proposed Rulemaking, FERC 
Stats. & Regs. ] 32,646 (2009) (2009 NOPR).
    \13\ Standards for Business Practices and Communication 
Protocols for Public Utilities, Order No. 676-F, FERC Stats. & Regs. 
] 31,309 (2010).
    \14\ Order No. 676-F, FERC Stats. & Regs. ] 31,309 at P 32.
    \15\ Id. P 37.
    \16\ Id. P 32.
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    7. NAESB subsequently initiated specific plans to improve and adopt 
additional technical standards and filed a report \17\ with the 
Commission on May 3, 2011 (May 3 Report) that informed the Commission 
that NAESB had adopted a revised set of standards covering measurement 
and verification (Phase II Demand Response M&V Standards) and a new set 
of standards covering energy efficiency,\18\ and explained its efforts 
to develop these standards.
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    \17\ See supra n.2.
    \18\ Energy efficiency:
    [r]efers to programs that are aimed at reducing the energy used 
by specific end-use devices and systems, typically without affecting 
the services provided. These programs reduce overall electricity 
consumption (reported in megawatthours), often without explicit 
consideration for the timing of program-induced savings. Such 
savings are generally achieved by substituting technologically more 
advanced equipment to produce the same level of end-use services 
(e.g. lighting, heating, motor drive) with less electricity. 
Examples include high-efficiency appliances, efficient lighting 
programs, high-efficiency heating, ventilating and air conditioning 
(HVAC) systems or control modifications, efficient building design, 
advanced electric motor drives, and heat recovery systems.
    U.S. Energy Information Administration Glossary, http://www.eia.gov/tools/glossary/index.cfm?id=E (last visited Feb. 24, 
2012).
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    8. As discussed in more detail below, the Phase II Demand Response 
M&V Standards add more specifications to the existing Phase I Demand 
Response M&V Standards' definitions and business practice standards in 
the following areas: meter data reporting deadline, advanced 
notification, telemetry interval, meter accuracy for after-the-fact 
metering, meter data reporting interval, and adjustment window.\19\ 
During NAESB's work on Phase II, the WEQ DSM-EE Wholesale Demand 
Response Work Group (WEQ DR work group) discussed the level of detail 
to be included in the standards, with most participants agreeing that 
the standards developed should not ``duplicate efforts undertaken in 
the ISO-RTO stakeholder process,'' which vetted the adopted programs 
extensively.\20\ NAESB states that a majority of the WEQ DR work group 
agreed that ``impacting the stakeholder process would require guidance 
from the FERC.'' \21\
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    \19\ NAESB states that ``advance notification'' involves a 
communication to the demand response resource made prior to when its 
services are required. The ``telemetry interval,'' as described by 
NAESB, is the period of time between submissions of data. NAESB 
defines ``adjustment window'' as a period of time used to calculate 
a baseline adjustment.
    \20\ May 3 Report at 1-2.
    \21\ Id. at 1.
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    9. In addition to demand response standards, NAESB drafted, 
discussed, and adopted business practice standards for the measurement 
and verification of energy efficiency in organized wholesale 
electricity markets (Wholesale Energy Efficiency M&V Standards). NAESB 
reports that the work took place between July 2009 and December 2010, 
and was considered in NAESB's DSM-EE subcommittee meetings and WEQ's 
Executive Committee meetings. The standards are designed to create a 
standard method for quantifying the energy reductions from energy 
efficiency measures. The Wholesale Energy Efficiency M&V Standards 
include six new definitions and 63 business practice standards. 
Included are definitions for energy efficiency baseline and demand 
reduction value. The standards contain criteria for the use of energy 
efficiency products in organized wholesale electricity markets, general 
measurement and verification plan requirements, and detailed criteria 
of acceptable measurement and verification methodologies. NAESB states 
that the standards are built upon PJM Interconnection, L.L.C. and ISO 
New England Inc. manuals, the Federal Energy Management Program (FEMP) 
measurement and verification standards,\22\ the International 
Performance Measurement and Verification Protocol (IPMVP),\23\ and 
several state protocols.\24\
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    \22\ U.S. Department of Energy, FEMP, M&V Guidelines: 
Measurement and Verification for Federal Energy Projects, Version 
3.0, April 2008, http://www1.eere.energy.gov/femp/pdfs/mv_guidelines.pdf.
    \23\ Efficiency Valuation Organization, IPMVP Public Library of 
Documents, http://www.evo-world.org/.
    \24\ May 3 Report at 3.
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II. Discussion

    10. The Commission proposes to incorporate by reference into our 
regulations both the Phase II Demand Response M&V Standards and 
associated terms, and the Wholesale Energy Efficiency M&V Standards and 
associated terms.

A. NAESB Phase II Demand Response M&V Standards

    11. The Commission proposes to incorporate by reference into its 
regulations the Phase II Demand Response M&V Standards as a further 
step toward transparency and consistency in the methods RTOs and ISOs 
use to measure and verify demand response in their organized wholesale 
electricity markets.\25\ Additionally, the Commission seeks comment on 
the Phase II Demand Response M&V Standards and on certain aspects of 
measurement and verification of demand response more generally,

[[Page 24430]]

including the degree to which standardization is important, the 
appropriate degree of detail and specificity that any such standards 
should contain, and the appropriate mechanism for achieving any 
necessary improvements in this area.
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    \25\ We propose to incorporate by reference the following 
standards collectively identified by NAESB as 2010 Wholesale 
Electric Quadrant Annual Plan Item 4(a) and 4(b): General--Section 
015-1.0; Telemetry--Section 015-1.1; After-the-Fact Metering--
Section 015-1.2; Performance Evaluation--Section 015-1.3; General--
Section 015-1.4; Telemetry--Section 015-1.5; After-the-Fact 
Metering--Section 015-1.6; Performance Evaluation--Section 015-1.7; 
General--Section 015-1.8; Telemetry--Section 015-1.9; After-the-Fact 
Metering--Section 015-1.10; Performance Evaluation--Section 015-
1.11; General--Section 015-1.12; Telemetry--Section 015-1.13; After-
the-Fact Metering--Section 015-1.14; Performance Evaluation--Section 
015-1.15; Baseline Information--Section 015-1.16; Event 
Information--Section 015-1.17; Special Processing--Section 015-1.18; 
Baseline Information--Section 015-1.19; Event Information--Section 
015-1.20; Special Processing--Section 015-1.21; Baseline 
Information--Section 015-1.22; Event Information--Section 015-1.23; 
Special Processing--Section 015-1.24; Baseline Information--Section 
015-1.25; Event Information--Section 015-1.26; Special Processing--
Section 015-1.27; Baseline Information--Section 015-1.28; Event 
Information--Section 015-1.29; and Special Processing--Section 015-
1.30.
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1. Description
    12. The Phase II Demand Response M&V Standards build on the Phase I 
Demand Response M&V Standards. These new standards also include updates 
to certain associated definitions as well as some formatting and 
organizational changes. The collective set of Phase I and Phase II 
Demand Response M&V Standards comprise two parts: the first part 
establishes criteria for the use of equipment, technology, and 
procedures to quantify the demand reduction value \26\ of four product 
categories,\27\ and the second part includes business practice 
requirements for five performance evaluation types.\28\
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    \26\ NAESB defines ``demand reduction value'' as the amount of a 
demand resource's reduced electricity usage.
    \27\ The four product categories are energy service, capacity 
service, reserve service, and regulation service.
    \28\ The five performance evaluation types are maximum base 
load, meter before/meter after, baseline type-I, baseline type-II, 
and metering generator output.
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    13. In the Phase II Demand Response M&V Standards, NAESB 
consistently replaced references to the ``System Operator'' with the 
term ``Governing Documents'' \29\ throughout most of the standards. 
Other changes include adding a meter data reporting deadline (103 days 
for the energy and capacity product categories and 55 days for reserve 
and regulation product categories); specifying an advanced notification 
of one day maximum to the demand response resource that its capacity 
product category will be required; establishing a telemetry interval of 
six seconds for the provider of the regulation product category to 
submit data to the system operator; tightening the requirement for 
meter accuracy for after-the-fact metering for all four product 
categories; and defining an adjustment window of four hours for 
calculating baseline adjustments for the baseline type-I and baseline 
type-II performance evaluation types.
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    \29\ ``Governing Documents'' are documents that control or 
affect the interaction and relationship between a system operator 
and other parties, for example, applicable statutes and regulations, 
tariffs, contracts, manuals, and other relevant procedures. The DSM-
EE subcommittee made this change to remove system operator 
discretion and to more accurately reflect that rules are developed 
by markets not the system operator. See 2008 WEQ AP Item 5(a) 
Recommendation to the NAESB WEQ Executive Committee at 37 (Sept. 30, 
2010) (available at May 3 Report, Appendix B, Page 5, http://www.naesb.org/pdf4/dsmee_group3_093010reqcom_a1.doc).
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    14. As characterized by NAESB, the set of business practice 
standards represented by the combination of Phase I and Phase II 
efforts ``provide a framework that may be used to develop performance 
evaluation methodologies for specific Demand Response services; they do 
not specify detailed characteristics of performance evaluation 
methodologies.'' \30\ The standards state that, should a conflict arise 
between the business practice standards and a System Operator's 
Governing Documents, the Governing Documents would have precedence.\31\
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    \30\ 2010 WEQ AP Item 4(a) and 4(b) Final Action at 12 (ratified 
Mar. 21, 2011).
    \31\ Id. at 10.
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2. Discussion
    15. As noted above, when the Commission approved the Phase I Demand 
Response M&V Standards in Order No. 676-F, it recognized that 
``additional substantive standards would appear beneficial in creating 
transparent and consistent measurement and verification * * * in 
wholesale electric markets.'' \32\ The Commission agreed with 
commenters ``that more detailed measurement and verification standards 
will reduce costs for customers and market participants, particularly 
those participating in multiple markets'' and that ``demand response 
providers that participate in more than one RTO or ISO should not have 
to incur the costs of developing different business processes to adapt 
to the differing RTO/ISO requirements, increasing the cost and 
complexity of their business.'' \33\ While the Commission acknowledged 
that NAESB's efforts may not result in a single performance evaluation 
method, the Commission emphasized that ``greater standardization of the 
performance evaluation methods will improve the accuracy of measuring 
and verifying demand response performance and may reduce costs.'' \34\
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    \32\ Order No. 676-F, FERC Stats. & Regs. ] 31,309 at P 32.
    \33\ Id. P 33.
    \34\ Id. P 34.
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    16. The 2009 NOPR noted that the key to several NAESB participants' 
willingness to accept the Phase I Demand Response M&V Standards was an 
agreement among participants to include more specific technical 
measurement and verification standards in NAESB's annual work plan and 
to proceed with further work on more detailed technical standards.\35\ 
Similarly, in its April 2009 Report, NAESB stressed that ``more 
technical standards would be needed to support the standards provided 
in the recommendation,'' that ``[a]ll WEQ [Executive Committee] members 
agreed to have a follow-up development effort to provide additional 
technical context to the standards,'' and that ``the DSM-EE 
subcommittee [had already] begun efforts to scope the development of 
more detailed technical standards for the measurement and verification 
of demand response products and services in ISO-RTO footprint areas.'' 
\36\
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    \35\ NOPR, FERC Stats. & Regs. ] 32,646 at P 6.
    \36\ April 2009 Report at 2.
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    17. As noted above, NAESB acknowledges that the resulting set of 
business practice standards represented by the combination of Phase I 
and Phase II efforts set forth a generalized performance evaluation 
methodology that lacks specific provisions or detailed 
requirements.\37\ The Commission invites comments on the proposed Phase 
II standards. Further, in light of the Commission's statements in Order 
No. 676-F regarding the importance of consistency and specificity, we 
invite comment as to whether the Phase II Demand Response M&V Standards 
that we propose to adopt herein are sufficiently detailed to provide 
transparent measurement and verification among regions, and whether 
greater detail or prescriptiveness would be appropriate. We also seek 
comment on the degree to which encouraging greater consistency among 
markets and regions would reduce costs for customers and market 
participants or otherwise facilitate participation by end users in 
multiple markets.
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    \37\ See 2010 WEQ AP Item 4(a) and 4(b) Final Action at 12 
(ratified Mar. 21, 2011).
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    18. To the extent that greater detail is recommended, the 
Commission seeks comment as to whether sufficient experience in demand 
response is available to identify best practices in the area of 
measurement and verification, particularly for performance evaluation 
types such as baseline calculations. Similarly, we seek comment about 
the particular areas where enhancing such detail or consistency would 
be most useful. For example, are consistent telemetry and metering 
requirements more or less important than consistent approaches to the 
determination of baselines; would it be worthwhile to address 
procedures for weather adjustments; or are any other particular aspects 
of measurement and verification appropriate for further effort 
regarding the addition of increased specificity and more consistency 
across RTOs and ISOs?

[[Page 24431]]

    19. The Commission appreciates the efforts of the WEQ thus far in 
developing these standards. The Commission also understands that 
various participants in the NAESB process expressed concern that the 
NAESB process should not duplicate efforts undertaken in the 
stakeholder processes of the RTOs and ISOs, which vetted their 
individual programs extensively.\38\ As a result, many of the standards 
defer to the existing Governing Documents of the RTOs and ISOs. The 
Commission seeks comment on whether further development of more 
substantive measurement and verification standards broadly applicable 
to RTOs and ISOs are required and, if so, whether a NAESB or a 
Commission-led, or other process should carry out the task. If 
commenters prefer the NAESB process, we request comment on the best 
relationship framework between NAESB and the RTO and ISO stakeholder 
processes to facilitate the formulation of standards.
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    \38\ See May 3 Report at 1.
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B. NAESB Wholesale Energy Efficiency M&V Standards

    20. The Commission proposes to incorporate by reference into our 
regulations the Wholesale Energy Efficiency M&V Standards.\39\ These 
business practice standards provide criteria for energy efficiency 
resources participating in organized wholesale electricity markets, 
general requirements for the structure of a measurement and 
verification plan, and detailed criteria for acceptable measurement and 
verification methodologies. The standards incorporate documentation and 
reporting requirements applicable to installed energy efficiency 
measures. The standards also consider technical requirements such as 
identification of energy efficiency baseline conditions, statistical 
significance requirements for measurement methodologies requiring 
statistical estimation techniques, and technical requirements for 
measurement equipment.
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    \39\ We propose to incorporate by reference the following 
standards collectively identified by NAESB as 2010 Wholesale 
Electric Quadrant Annual Plan Item 4(d): Energy Efficiency Resource 
Use Criteria in Wholesale Markets--Section 021-3.1; General 
Measurement and Verification Plan Requirements--Section 021-3.2; 
Post Installation M&V Report Components--Section 021-3.3; 
Performance Reporting--Section 021-3.4; M&V Supporting Documents--
Section 021-3.5; M&V Methodologies--Section 021-3.6; Energy 
Efficiency Baseline Conditions--Section 021-3.7; Statistical 
Significance--Section 021-3.8; Nominated Energy Efficiency Value 
Calculations/Demand Reduction Value Calculations--Section 021-3.9; 
Measurement and Monitoring--Section 021-3.10; Measurement Equipment 
Specifications--Section 021-3.11; and Data Validation--Section 021-
3.12.
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1. Description
    21. The purpose of these business practice standards is to 
establish a standard method for quantifying the energy reductions 
associated with energy efficiency measures such as lighting, 
appliances, industrial process improvements, and building management. 
NAESB describes the Wholesale Energy Efficiency M&V Standards as an 
initial set of standards for the participation of energy efficiency 
products in organized wholesale electricity markets.
    22. NAESB adopted its Wholesale Energy Efficiency M&V Standards 
under its consensus procedures. The consensus process developed by 
NAESB requires the organization to be fully aware of the positions of 
each of NAESB's six wholesale electric segments (i.e., end users, 
distribution/load serving entities, transmission, generation, 
marketers/brokers, and independent grid operators/planners).
2. Discussion
    23. The Commission preliminarily finds that the Wholesale Energy 
Efficiency M&V Standards provide substantive detail to assure more 
effective evaluation of the performance of energy efficiency products 
and services. The standards provide the means for demonstrating 
consistent and reliable evidence of reductions in electricity usage 
attributable to energy efficiency resources that qualify to participate 
in organized wholesale electricity markets. The NAESB standards are 
intended to provide for proper measurement and verification of energy 
efficiency resources so that the resources may be compensated in 
accordance with how well they perform, and how performance continues as 
equipment or systems age. The standards should also help to ensure that 
energy efficiency resources and other electricity resources are treated 
comparably.
    24. The Commission appreciates the detail provided within the 
Wholesale Energy Efficiency M&V Standards. The standards provide four 
measurement and verification methodologies (Sections 021-3.6.1.1-021-
3.6.1.4), as well as a mechanism by which energy efficiency resource 
providers may propose, and RTOs and ISOs may consider, alternative 
measurement and verification methodologies (Section 021-3.6.2). The 
Commission recognizes that the establishment of baseline performance 
data and monitoring of post-installation performance of energy 
efficiency measures is conducted by directly measuring and monitoring 
system loads, or extrapolating from a selection of available 
measurement variables. The standards contain 15 technical requirements 
for all measurement equipment devices used by energy efficiency 
resource providers (Sections 021-3.11.1-021-3.11.15). Specifically, the 
15 technical requirements provide standards for interval meters that 
record electricity usage data as well as for the measurement or 
monitoring of ``proxy variables'' that do not directly measure 
electricity consumption. The technical requirements for proxy variable 
measurement include detailed accuracy and precision requirements. The 
standards also contain five statistical requirements intended to ensure 
accuracy for the measurement methodologies requiring statistical 
estimation techniques (Sections 021-3.8.2-021-3.8.6). The Commission 
invites comment on the proposed standards.

III. Notice of Use of Voluntary Consensus Standards

    25. Office of Management and Budget Circular A-119 (section 11) 
(Feb. 10, 1998) provides that federal agencies should publish a request 
for comment in a NOPR when the agency is seeking to issue or revise a 
regulation proposing to adopt a voluntary consensus standard or a 
government-unique standard. In this NOPR, the Commission is proposing 
to incorporate by reference voluntary consensus standards developed by 
the NAESB WEQ.

IV. Information Collection Statement

    26. The collections of information contained in this proposed rule 
have been submitted to the Office of Management and Budget (OMB) for 
review under section 3507(d) of the Paperwork Reduction Act of 1995, 44 
U.S.C. 3507(d). The Commission solicits comments on the Commission's 
need for this information, whether the information will have practical 
utility, the accuracy of the provided burden estimates, ways to enhance 
the quality, utility, and clarity of the information to be collected, 
and any suggested methods for minimizing respondents' burden, including 
the use of automated information techniques. 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 display a valid OMB control number.
    27. The following burden estimate is based on the projected costs 
for the

[[Page 24432]]

industry to implement revisions to the WEQ Standards currently 
incorporated by reference into the Commission's regulations at 18 CFR 
38.2 and to implement the new standards adopted by NAESB that we 
propose here to incorporate by reference.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                                 FERC Collection     Number of     responses per     Hours per     Total number
                                       No.          respondents     respondent       response        of hours
                                                             (A)             (B)             (C)     (A) x (B) x
                                                                                                             (C)
----------------------------------------------------------------------------------------------------------------
Demand Response Standards.....  FERC-516 \40\...               6               1               4              24
                                FERC-717 \41\...               6               1               9              54
Energy Efficiency Standards...  FERC-516........               6               1               6              36
                                FERC-717........               6               1              12              72
    Total for FERC-516........  ................  ..............  ..............  ..............              78
    Total for FERC-717........  ................  ..............  ..............  ..............             108
                                                 ---------------------------------------------------------------
    Total One-Time Burden.....  ................  ..............  ..............  ..............             186
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection: (Reporting and Recordkeeping, 
(if appropriate)) = 186 hours.
---------------------------------------------------------------------------

    \40\ ``FERC-516'' is the Commission's identifier that 
corresponds to OMB control no. 1902-0096 which identifies the 
information collection associated with Electric Rate Schedules and 
Tariff Filings.
    \41\ ``FERC-717'' is the Commission's identifier that 
corresponds to OMB control no. 1902-0173 which identifies the 
information collection associated with Standards for Business 
Practices and Communication Protocols for Public Utilities.
---------------------------------------------------------------------------

    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost for all respondents to be the following: \42\
---------------------------------------------------------------------------

    \42\ The Total Annual Cost for information collection is 
$10,974. This number is reached by multiplying the total hours to 
prepare responses (186) by an hourly wage estimate of $59 (a 
composite estimate of wages plus benefits that includes legal, 
technical and support staff rates. Based on data from the Bureau of 
Labor Statistics at http://bls.gov/oes/current/naics3_221000.htm 
and http://www.bls.gov/news.release/ecec.nr0.htm). (78 hours for 
demand response standards + 108 hours for energy efficiency 
standards) x $59/hour = $10,974.
    \43\ We note that 24 hours at $59/hour = $1,416 and 54 hours at 
$59/hour = $3,186.
    \44\ We note that 36 hours at $59/hour = $2,124 and 72 hours at 
$59/hour = $4,248.

------------------------------------------------------------------------
                                             FERC-516        FERC-717
------------------------------------------------------------------------
Demand Response Standards Annualized              $1,416          $3,186
 Capital/Startup Costs..................
Demand Response Standards Annualized                 N/A             N/A
 Costs (Operations & Maintenance).......
Energy Efficiency Standards Annualized             2,124           4,248
 Capital/Startup Costs..................
Energy Efficiency Standards Annualized               N/A             N/A
 Costs (Operations & Maintenance).......
Demand Response Standards Total                    1,416      \43\ 3,186
 Annualized Costs.......................
Energy Efficiency Standards Total                  2,124      \44\ 4,248
 Annualized Costs.......................
                                         -------------------------------
    All Standards Total Annualized Costs           3,540           7,434
------------------------------------------------------------------------

    28. OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule. The Commission is 
submitting notification of this proposed rule to OMB. These information 
collections are mandatory requirements.
    Title: Standards for Business Practices and Communication Protocols 
for Public Utilities (formerly Open Access Same Time Information 
System) (FERC-717); Electric Rate Schedule Filings (FERC-516).
    Action: Proposed collection.
    OMB Control No.: 1902-0096 (FERC-516); 1902-0173 (FERC-717).
    Respondents for This Rulemaking: RTOs and ISOs.
    Frequency of Responses: One-time implementation (business 
procedures, capital/start-up).
    Necessity of the Information: This proposed rule, if implemented, 
will help to standardize the methods and procedures used by RTOs and 
ISOs to accurately measure demand response and energy efficiency 
resource performance, thereby improving an RTO's or ISO's capability to 
detect anti-competitive or manipulative behavior. Additionally, this 
proposed rule will help RTOs and ISOs to properly credit demand 
response and energy efficiency resources for their efforts.
    29. Internal Review: The Commission has reviewed the business 
practice standards proposed in this NOPR and has made a preliminary 
determination that these standards are necessary to maintain 
consistency and help increase the effectiveness of RTO and ISO rules 
pertaining to measurement and verification of demand response and 
energy efficiency resource practices. The Commission has assured 
itself, by means of its internal review, that there is specific, 
objective support for the burden estimate associated with the 
information requirements.
    30. Interested persons may obtain information on the reporting 
requirements by contacting the Federal Energy Regulatory Commission, 
Office of the Executive Director, 888 First Street NE., Washington, DC 
20426 [Attention: Ellen Brown, email: DataClearance@ferc.gov, phone: 
(202) 502-8663, fax: (202) 273-0873].
    31. Comments concerning the information collections proposed in 
this NOPR and the associated burden estimates, should be sent to the 
Commission in this docket and may also be sent to the Office of 
Management and Budge, Office of Information and Regulatory Affairs, 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission]. For security reasons, comments should be sent 
by email to OMB at the following email address: oira_submission@omb.eop.gov. Please reference FERC-xxx and the docket number 
of this proposed rulemaking (Docket No. RM05-5-020) in your submission.

[[Page 24433]]

V. Environmental Analysis

    32. 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.\45\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\46\ The actions proposed to be taken here fall within 
categorical exclusions in the Commission's regulations for rules that 
are corrective, clarifying, or procedural, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of electric power that requires no construction of 
facilities.\47\ Therefore an environmental review is unnecessary and 
has not been prepared in this rulemaking.
---------------------------------------------------------------------------

    \45\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
Regulations Preambles 1986-1990 ] 30,783 (1987).
    \46\ 18 CFR 380.4.
    \47\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and 380.4(a)(27).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Certification

    33. The Regulatory Flexibility Act of 1980 (RFA) \48\ generally 
requires an administrative agency to perform an analysis of rulemakings 
that will have a significant economic impact on a substantial number of 
small entities. The RFA mandates consideration of regulatory 
alternatives that accomplish the stated objectives of a proposed 
rulemaking while minimizing any significant economic impact on a 
substantial number of small entities. The Small Business Administration 
(SBA) develops the numerical definition of a small business.\49\ The 
SBA has established a size standard for electric utilities, stating 
that a firm is small if, including its affiliates, it is primarily 
engaged in the transmission, generation, and/or distribution of 
electric energy for sale and its total electric output for the 
preceding fiscal year did not exceed four million megawatt hours.\50\
---------------------------------------------------------------------------

    \48\ 5 U.S.C. 601-612.
    \49\ 13 CFR 121.101.
    \50\ 13 CFR 121.201, Sector 22 Utilities n.1.
---------------------------------------------------------------------------

    34. The regulations proposed here impose requirements only on RTOs 
and ISOs, which are not small businesses. Moreover, these requirements 
are designed to benefit all customers, including small businesses. 
Accordingly, the Commission hereby certifies, pursuant to section 
605(b) of the RFA,\51\ that the regulations proposed herein will not 
have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VII. Comment Procedures

    35. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due June 25, 2012. Comments must refer to 
Docket No. RM05-5-020, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    36. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    37. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    38. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    39. 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 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington DC 20426.
    40. 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.
    41. 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 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 38

    Conflicts of interests, Electric power plants, Electric utilities, 
Incorporation by reference, Reporting and recordkeeping requirements.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 38, Chapter I, Title 18, Code of Federal Regulations, as follows.

PART 38--BUSINESS PRACTICE STANDARDS AND COMMUNICATION PROTOCOLS 
FOR PUBLIC UTILITIES

    1. The authority citation for part 38 continues to read as follows:

    Authority: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7101-7352.

    2. Section 38.2 is amended by revising paragraph (a)(12) and adding 
paragraph (a)(13) to read as follows:
    Sec.  38.2 Incorporation by reference of North American Energy 
Standards Board Wholesale Electric Quadrant standards.
    (a) * * *
    (12) Business Practices for Measurement and Verification of 
Wholesale Electricity Demand Response (WEQ-015, 2010 Annual Plan Items 
4(a) and 4(b), March 21, 2011).
    (13) Business Practice Standards for Measurement and Verification 
of Energy Efficiency Products (WEQ-021, 2010 Annual Plan Item 4(d), May 
13, 2011).
* * * * *
[FR Doc. 2012-9809 Filed 4-23-12; 8:45 am]
BILLING CODE 6717-01-P


