
[Federal Register Volume 78, Number 45 (Thursday, March 7, 2013)]
[Rules and Regulations]
[Pages 14654-14664]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04433]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 38

[Docket No. RM05-5-020; Order No. 676-G]


Standards for Business Practices and Communication Protocols for 
Public Utilities

AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
amending its regulations which establish standards for business 
practices and electronic communications for public utilities to 
incorporate by reference updated business practice standards adopted by 
the Wholesale Electric Quadrant of the North American Energy Standards 
Board to categorize various products and services for demand response 
and energy efficiency and to support the measurement and verification 
of these products and services in organized wholesale electric markets. 
These standards provide common definitions and processes regarding 
demand response and energy efficiency products in organized wholesale 
electric markets where such products are offered. The standards also 
require each regional transmission organization (RTO) and independent 
system operator (ISO) to address in the RTO or ISO's governing 
documents the performance evaluation methods to be used for demand 
response and energy efficiency products. The standards thereby 
facilitate the ability of demand response and energy efficiency 
providers to participate in organized wholesale electric markets, 
reducing transaction costs and providing an opportunity for more 
customers to participate in these programs, especially for customers 
that operate in more than one organized market.

DATES: This rule will become effective May 6, 2013. Dates for 
implementation of the standards are provided in the Final Rule. This 
incorporation by reference of certain publications in the rule is 
approved by the Director of the Federal Register as of May 6, 2013.

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.
Mindi Sauter (legal issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-6830.

SUPPLEMENTARY INFORMATION: 

Order No. 676-G

Table of Contents

I. Background............................  2.
II. Discussion...........................  11.
    A. Overview..........................  11.
    B. NAESB Phase II Demand Response M&V  14.
     Standards.
        1. Comments......................  15.
            a. Adoption of Phase II        15.
             Demand Response M&V
             Standards.
            b. Level of Detail,            19.
             Standardization, and Best
             Practices.
            c. Other Matters.............  26.
        2. Commission Determination......  33.
    C. NAESB Energy Efficiency M&V         40.
     Standards.
        1. Comments......................  41.
            a. Adoption of Wholesale       41.
             Energy Efficiency M&V
             Standards.
            b. Other Matters.............  45.
        2. Commission Determination......  47.
    D. Incorporation by Reference/         52.
     Copyrighted Standards.
III. Implementation Dates and Procedures.  54.
IV. Notice of Use of Voluntary Consensus   58.
 Standards.
V. Information Collection Statement......  59.
VI. Environmental Analysis...............  67.
VII. Regulatory Flexibility Act..........  68.
VIII. Document Availability..............  71.
IX. Effective Date and Congressional       74.
 Notification.
 


[[Page 14655]]

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

Order No. 676-G

Final Rule

Issued February 21, 2013.
    1. The Federal Energy Regulatory Commission (Commission) is 
amending its regulations at 18 CFR 38.2(a) (which establish standards 
for business practices and electronic communications for public 
utilities) \1\ to incorporate by reference \2\ updated business 
practice standards adopted by the Wholesale Electric Quadrant (WEQ) of 
the North American Energy Standards Board (NAESB) to categorize various 
products and services for demand response and energy efficiency and to 
support the measurement and verification (M&V) of these products and 
services in organized wholesale electric markets. These standards 
provide common definitions and processes regarding demand response and 
energy efficiency products in organized wholesale electric markets 
where such products are offered. The standards also require each 
regional transmission organization (RTO) and independent system 
operator (ISO) to address in the RTO's or ISO's governing documents the 
performance evaluation methods to be used for demand response and 
energy efficiency products. The standards thereby facilitate the 
ability of demand response and energy efficiency providers to 
participate in organized wholesale electric markets, reducing 
transaction costs and providing an opportunity for more customers to 
participate in these programs, especially for customers that operate in 
more than one organized market.


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    \1\ 18 CFR 38.2(a) (2012).
    \2\ Incorporation by reference makes compliance with these 
standards mandatory for public utilities subject to Part 38 of the 
Commission's regulations.
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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.\3\ 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 participants can have input into the 
development of a standard, whether or not they are members of NAESB, 
and each wholesale electric 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. The WEQ process requires 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, to approve a 
business practice standard.\4\ For final approval, 67 percent of the 
WEQ's general membership must ratify the standards,\5\ at which point 
compliance with NAESB's standards would be voluntary.
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    \3\ The four quadrants are the wholesale and retail electric 
quadrants and the wholesale and retail natural gas quadrants.
    \4\ Under NAESB's procedures, interested persons may attend and 
participate in NAESB committee meetings, and phone conferences, even 
if they are not NAESB members.
    \5\ See Standards for Business Practices and Communication 
Protocols for Public Utilities, Order No. 676, FERC Stats. & Regs. ] 
31,216, n.5 (2006), reh'g denied, Order No. 676-A, 116 FERC ] 61,255 
(2006).
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    3. In 2006, the Commission adopted Order No. 676, a Final Rule that 
incorporated by reference business practice standards adopted by NAESB 
applicable to public utilities.\6\ 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. In a number of instances, the 
Commission has incorporated the standards by reference into the 
Commission's regulations, making them mandatory for the entities 
identified in the standards.\7\
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    \6\ Id.
    \7\ Standards for Business Practices and Communication Protocols 
for Public Utilities, Final Rule, Order No. 676-F, FERC Stats. & 
Regs. ] 31,309 (2010); Final Rule, Order No. 676-E, FERC Stats. & 
Regs. ] 31,299 (2009); order granting clarification and denying 
reh'g, Order No. 676-D, 124 FERC ] 61,317 (2008), Final Rule, Order 
No. 676-C, FERC Stats. & Regs. ] 31,274 (2008), Final Rule, Order 
No. 676-B, FERC Stats. & Regs. ] 31,246 (2007).
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    4. NAESB began work on developing business practice standards 
pertaining to the measurement and verification of demand response \8\ 
products and services in July 2007, when the NAESB WEQ Demand Side 
Management (DSM)--Energy Efficiency (EE) subcommittee began work on 
this issue. Key to obtaining consensus on the initial set of demand 
response measurement and verification standards was the agreement to 
proceed with further work on more detailed technical standards for the 
measurement and verification of demand response resources. This effort 
led to the adoption and ratification by NAESB of measurement and 
verification standards early in 2009.
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    \8\ 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) (2012).
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    5. On April 17, 2009, NAESB filed a 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 electric markets (Phase I Demand Response M&V 
Standards).\9\ As mentioned above, the NAESB report recognized that 
adoption of these standards would need to be followed by the 
development of more detailed technical standards for the measurement 
and verification of demand response products and services in RTO and 
ISO areas.
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    \9\ 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 the Phase I Demand Response M&V Standards 
that categorize various demand response products and services and 
support the measurement and verification of these products and services 
in organized wholesale electric markets.\10\ 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.''\11\ The Commission also stated that ``we expect 
Phase II will address issues related to baseline development * * * 
.''\12\ 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.\13\
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    \10\ Standards for Business Practices and Communication 
Protocols for Public Utilities, Order No. 676-F, FERC Stats. & Regs. 
] 31,309 (2010).
    \11\ Order No. 676-F, FERC Stats. & Regs. ] 31,309 at P 32.
    \12\ Id. P 37. The NAESB Phase I Demand Response M&V Standards 
defines ``baseline'' as ``an estimate of the electricity that would 
have been consumed by a Demand Resource in the absence of a Demand 
Response Event.''
    \13\ Id. P 32.

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[[Page 14656]]

    7. NAESB subsequently initiated specific plans to improve and adopt 
additional technical standards and filed a report\14\ with the 
Commission on May 3, 2011 informing 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\15\ (Wholesale Energy Efficiency 
M&V Standards), and explaining its efforts to develop these standards.
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    \14\ Report, North American Energy Standards Board, Measurement 
and Verification of Demand Response Products, Docket No. RM05-5-020 
(filed May 3, 2011) (May 2011 Report).
    \15\ Energy efficiency, Electricity:
    [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. 6, 
2013).
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    8. After a review of NAESB's May 2011 Report, the Commission issued 
a notice of proposed rulemaking (NOPR) on April 19, 2012 proposing to 
amend the Commission's regulations at 18 CFR 38.2 to incorporate by 
reference specific enumerated business practice standards\16\ and 
seeking comment on both the proposed Energy Efficiency and Phase II 
Demand Response M&V Standards.\17\ In light of the Commission's 
statements in Order No. 676-F regarding the importance of consistency 
and specificity as discussed above, the Commission requested comments 
in the NOPR as to whether the Phase II Demand Response M&V Standards 
were sufficiently detailed to provide transparent measurement and 
verification among regions, and whether greater detail or 
prescriptiveness would be appropriate. The Commission also requested 
comments 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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    \16\ NAESB Phase II Demand Response M&V 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. NAESB Energy Efficiency 
M&V 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.
    \17\ Standards for Business Practices and Communication 
Protocols for Public Utilities, Notice of Proposed Rulemaking, 77 FR 
24427 (Apr. 24, 2012), FERC Stats. & Regs. ] 32,688 (2012) (Energy 
Efficiency and Phase II M&V NOPR).
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    9. To the extent that commenters recommended greater detail in the 
standards, the Commission requested additional comment as to whether 
market participants have attained sufficient experience in demand 
response to allow them to identify best practices in the area of 
measurement and verification, particularly for performance evaluation-
type areas such as baseline calculations, to help inform any guidance 
that the Commission may provide. Similarly, the Commission requested 
comment regarding particular areas where enhancing such detail or 
consistency would be most useful. The Commission also requested comment 
on whether further development of more substantive measurement and 
verification standards broadly applicable to RTOs and ISOs is necessary 
and, if so, whether a NAESB or a Commission-led, or other process 
should carry out the task. Further, the Commission requested that, if 
commenters prefer the NAESB process, they comment on the best 
relationship between NAESB and the RTO and ISO stakeholder process to 
facilitate the formulation of standards.
    10. In response to the NAESB Energy Efficiency and Phase II M&V 
NOPR, 21 entities filed comments.\18\ On July 17, 2012, NAESB filed a 
report with the Commission stating it made a modification to the Energy 
Efficiency M&V Standards by deleting reference to the International 
Performance Measurement and Verification Protocol (IPMVP).\19\ Using 
NAESB operating procedures for minor clarifications and corrections to 
standards, the WEQ Executive Committee approved the correction on June 
15, 2012.
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    \18\ The names of entities that filed comments are listed in the 
Appendix to this Final Rule.
    \19\ Errata Report, North American Energy Standards Board, 
Measurement and Verification of Demand Response Products, Docket No. 
RM05-5-000, RM05-5-020 (filed July 17, 2012).
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II. Discussion

A. Overview

    11. In this Final Rule, the Commission is revising its regulations 
at 18 CFR 38.2 to incorporate by reference the Phase II Demand Response 
M&V Standards and the Wholesale Energy Efficiency M&V Standards. The 
Commission concludes that the Phase II Demand Response M&V Standards 
represent an incremental improvement to the business practices for 
measuring and verifying demand resource products and services in the 
organized wholesale electric markets. This phase of demand response 
standard development builds upon the work that already has been 
accomplished to provide demand response resources with opportunities to 
participate in organized wholesale electric markets, including accurate 
measurement and verification of demand response resources' performance. 
Similarly, the Commission concludes that the Wholesale Energy 
Efficiency M&V Standards facilitate energy efficiency providers' 
ability to participate in electricity markets by providing standardized 
measurement requirements and reducing transaction costs, and assure 
more effective evaluation of the performance of energy efficiency 
products and services.
    12. The Phase II Demand Response M&V Standards and Wholesale Energy 
Efficiency Standards were approved by the WEQ and ratified by the NAESB 
membership under NAESB's consensus procedures.\20\ As the Commission 
found in Order No. 587,\21\ adoption of consensus business practice 
standards is appropriate because the consensus process helps ensure the 
reasonableness of the standards by requiring that the

[[Page 14657]]

standards draw support from a broad spectrum of industry participants 
representing all segments of the industry. Moreover, since the industry 
itself has to conduct business under these standards, the Commission's 
regulations should reflect those business practice standards that have 
the widest possible support.
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    \20\ As noted earlier, 67 percent of the WEQ's general 
membership voting is required for ratification of a business 
practice standard.
    \21\ Standards for Business Practices of Interstate Natural Gas 
Pipelines, Order No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & 
Regs. ] 31,038 (1996).
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    13. The specific NAESB standards that the Commission is 
incorporating by reference in this Final Rule are the Phase II Demand 
Response M&V Standards and associated terms, and the Wholesale Energy 
Efficiency M&V Standards and associated terms.\22\


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    \22\ The specific standards are enumerated in n.16 supra.
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B. NAESB Phase II Demand Response M&V Standards

    14. In the NOPR, the Commission proposed to incorporate by 
reference the NAESB Phase II Demand Response M&V standards, which 
include three sections: the first section (Introduction and Definition 
of Terms) contains an overview of the standards and definitions, the 
second section (Standards 015-1.0 through 015-1.15) contains standards 
on Provision of Wholesale Electric Demand Response Energy, Capacity, 
Reserve and Regulation Products, and the third section (Standards 015-
1.16 through 015-1.30) contains standards on the five performance 
evaluation methodologies: (1) Maximum Base Load; (2) Meter Before/Meter 
After; (3) Baseline Type-I (Interval Meter); (4) Baseline Type-II (Non-
Interval Meter); and (5) Metering Generator Output.
1. Comments
a. Adoption of Phase II Demand Response M&V Standards
    15. The Commission sought comments on whether it should incorporate 
by reference NAESB's proposed Phase II Demand Response M&V Standards. 
Commenters supporting incorporation of the proposed NAESB Phase II 
Demand Response M&V business practice standards into the Commission's 
regulations include the IRC, EPSA, AEP, Indicated New York Transmission 
Owners, DR Supporters, IECA, Hess, PSEG, and WEM. DR Supporters, IECA, 
Hess and PSEG also recommend further standardization, as discussed in 
detail below.
    16. Viridity generally supports the incorporation of the Phase II 
Demand Response M&V Standards, but also requests that the Commission 
include in the final rule a requirement for RTOs and ISOs to adopt 
performance evaluation methods that provide a reasonably accurate, 
reasonably unbiased, and reasonably consistent baseline for a 
customer's highly-variable load.\23\
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    \23\ Viridity notes that NAESB defines ``highly-variable load'' 
as a customer that has a ``fluctuating or unpredictable electricity 
usage pattern.'' Viridity states that these customers' ``business-
as-usual'' loads may have little or no relation to the weather; thus 
predicting their loads is based on factors specific to the customer 
instead of more universal factors such as the weather.
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    17. EEI and Southern also generally support incorporation of the 
Phase II Demand Response M&V Standards, but request that, to avoid 
inadvertent ambiguity, the Commission clarify in the Final Rule and in 
revisions to 18 CFR 38.2 that the NAESB standards and associated terms 
for the Phase II Demand Response M&V and the Wholesale Energy 
Efficiency M&V apply only in markets administered by RTOs and ISOs. EEI 
and Southern further request that the Commission incorporate by 
reference those provisions of the NAESB standards that limit their 
applicability to RTO and ISO markets.
    18. NAPP and the PJM IMM recommend against adopting the Phase II 
Demand Response M&V Standards. As discussed below, the PJM IMM states 
that the proposed standards do not reference the Peak Load Contribution 
recently adopted in PJM, that they do not adequately define ``Capacity 
Service,'' and that they inappropriately allow the same five approaches 
for capacity as for energy products. It states that adopting the 
standards as applicable to capacity creates the potential to ``reopen 
and confuse the issue of double counting in PJM that was only recently 
resolved.'' \24\ The PJM IMM also notes the difficulty of trying to 
apply common measurement and verification standards across all RTOs and 
ISOs.
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    \24\ See PJM Interconnection, L.L.C., 138 FERC ] 61,138 (2012).
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b. Level of Detail, Standardization, and Best Practices
    19. The Commission sought comments on whether the proposed NAESB 
Phase II Demand Response M&V Standards were sufficiently detailed and 
whether greater detail would be appropriate. The IRC believes that the 
five performance evaluation methodologies in the NAESB Phase II Demand 
Response M&V standards provide RTOs and ISOs with the necessary 
flexibility to enable accurate M&V. EPSA agrees and believes it is 
appropriate to defer to the RTO and ISO for an assessment of whether 
greater detail is needed for a particular region, and to establish the 
best next steps for refining demand response M&V mechanisms.
    20. On the other hand, IECA states there has been minimal forward 
movement in developing greater standardization and ``best practices'' 
for demand response M&V, and argues that the status quo is unjust, 
unreasonable or unduly discriminatory and that the NAESB process 
discriminates against manufacturers. DR Supporters indicate that the 
proposed standards do not include specific and detailed characteristics 
of performance evaluation methodologies and that, because the NAESB 
standards defer to the RTO and ISO governing documents, the Phase II 
standards do little to bring consistency or standardization to the 
manner in which demand response is measured. The DR Supporters argue 
that greater detail or prescriptiveness is appropriate with respect to 
the measurement and verification of energy. However, DR Supporters 
state that efforts to impose consistent M&V approaches across RTO and 
ISO capacity markets would be misspent given that M&V in those markets 
is so intertwined with the details of the specific capacity markets 
themselves.
    21. PSEG suggests that additional standards be developed that 
define the testing and auditing requirements for demand response 
resources to ensure that they have the capability to reduce demand 
during their time commitment. PSEG also argues that the requirement to 
provide real-time telemetry data for all four products (i.e., energy, 
capacity, reserve, and regulation) should be mandatory, and requests 
that the language in the standards be revised in the future to require 
specific language in this regard. PSEG also requests that additional 
standards be developed that require providers to measure demand 
response delivered via behind-the-meter generation, noting that it is 
important for system reliability planners to evaluate the impact of 
environmental regulations that affect those types of facilities.
    22. The Commission also sought comments on whether encouraging 
greater consistency would reduce costs and facilitate participation. 
The IRC contends that further efforts at developing a standardized M&V 
performance evaluation methodology will not be productive at this time, 
and could reduce the accuracy of demand response M&V and exclude 
participation by resources with load shapes that do not conform to the 
standard. The IRC believes that a flexible, regional approach to demand

[[Page 14658]]

response M&V is crucial to ensuring the growth of demand response 
resources in wholesale electric markets. Hess recommends that the 
Commission pursue simplicity and consistency over time (i.e., 
stability), as opposed to simply consistency across all RTOs and ISOs. 
Hess urges the Commission to be mindful that confusion and loss of 
customer confidence due to frequent rule changes might outweigh 
marginal benefits of rule improvements.
    23. However, DR Supporters indicate that encouraging greater 
consistency among RTO and ISO energy markets and regions would reduce 
costs and facilitate participation. DR Supporters argue that 
differences in baseline designs require demand response providers that 
are active across the country to pay for and/or develop, maintain and 
adapt diverse systems in order to settle energy payments for demand 
response customers in order to accommodate each market's differences, 
and that this can result in customer dissatisfaction related to 
increased costs and confusion.
    24. The Commission also sought comments on whether the demand 
response industry has had sufficient experience to enable it to 
identify best practices. DR Supporters believe the industry has had 
sufficient experience, and that this experience should be used to 
develop a common energy baseline methodology for use across all RTOs 
and ISOs, which would be available as an alternative to the approach a 
particular RTO and ISO already has implemented. Hess agrees that there 
is sufficient experience to identify best practices, and suggests that 
the standards proposed for incorporation do not draw upon available 
market experience to provide the details necessary to allow for true 
standardization.
    25. The Commission also asked commenters to identify particular 
areas in which enhancing detail or consistency would be useful. 
Viridity indicates that the proposed M&V standards give RTOs and ISOs 
complete discretion as to whether a region utilizes any baseline 
methodology that is suitable for highly-variable loads,\25\ leaving 
these resources without a reasonable baseline against which their 
performance can be measured. EPSA asserts that a lack of specific 
comparability between demand resources and other resources that 
participate in the wholesale market risks artificially skewing 
incentives towards potentially less reliable resources, discouraging 
needed investments and compromising the reliability of the system.
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    \25\ See supra note 23.
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c. Other Matters
    26. The Commission requested comments on whether, if further 
development of more substantive measurement and verification standards 
broadly applicable to RTOs and ISOs is required, a NAESB, Commission-
led, or other process should carry out the task.\26\ Several 
commenters, including EVO, Hess, IECA, DR Supporters, PSEG, and NYTOs 
prefer a Commission-led process, with some suggesting that the 
Department of Energy and NAESB also should participate. IECA, NYTOs, 
and DR Supporters variously ask the Commission to undertake technical 
conferences to review the M&V methods used by the different RTOs and 
ISOs in order to fully understand their differences, develop a set of 
consistent, detailed demand response M&V standards to enable demand 
response resources to participate in multiple jurisdictions without 
incurring costs of complying with different standards, determine the 
M&V floor required to provide demand response compensation, and 
establish a single Baseline Type I measurement and verification 
approach for energy that any curtailment service provider would be 
permitted to use in any Commission-jurisdictional market.
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    \26\ NOPR, FERC Stats. & Regs. ] 32,688 at P 19.
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    27. IRC states that in some cases, Commission action has provided 
critical guidance that can be more effective in providing direction 
than can be achieved in trying to reach consensus; therefore, future 
Commission guidance potentially can avoid significant hours of debate 
among NAESB participants on additional contentious M&V issues.
    28. IRC further states that stakeholders have expressed only 
limited support for launching an additional NAESB process. IRC urges 
the Commission not to press for additional standardization at this 
time; however, should the Commission decide to do so, IRC suggests that 
the NAESB process is preferable to creating a new institutional process 
and requests that the Commission provide detailed guidance on the 
nature of further efforts. EPSA supports using existing NAESB processes 
in order to avoid establishing competing processes for developing 
demand response M&V baselines. EPSA believes the Phase II standards 
serve as a benchmark for RTO and ISO governing documents, establishing 
parameters that regional standards must either meet or surpass.
    29. NAPP supports an industry-led standard development process, 
because it believes the NAESB process has little participation from 
demand response providers, energy efficiency providers and end use 
customers.
    30. The PJM IMM also recommends that if the Commission decides to 
incorporate NAESB standards into its rules, the Commission should 
clarify that ``Capacity Service'' necessarily means achieving a 
reduction to a level at or below a resource's peak load contribution in 
order to prevent confusion in the industry and to avoid inefficient 
market rules. Additionally, the PJM IMM considers the NAESB standards 
to be flawed because they do not differentiate metrics appropriate to 
energy demand from metrics appropriate for capacity demand.
    31. EPSA requests that the Commission confirm EPSA's understanding 
of the NOPR's explanation regarding conflicts between the RTO's or 
ISO's governing documents and the NAESB business standards. 
Specifically, EPSA requests that the Commission clarify that, if a 
conflict arises between a system operator's governing documents and the 
NAESB business standards, the system operator's governing documents 
would have precedence over the NAESB business standards with respect to 
things such as consistency of terms or definitions, but that such 
conflicts should not refer to use of or reliance on less rigorous 
regional demand response M&V techniques. EPSA believes this provision 
should allow for regional variation while protecting against a region 
adopting measures and protocols that are inferior to those prescribed 
in the Phase II proposal.
    32. Mr. Lynch states that he opposes the proposed standard for 
power plants regulating carbon dioxide emissions from new coal-based 
power plants, arguing that such a regulation would effectively outlaw 
coal as a fuel source for the next generation of power plants, causing 
energy costs to rise.
2. Commission Determination
    33. The Commission is revising its regulations at 18 CFR 38.2 to 
incorporate by reference the revised NAESB Phase II Demand Response M&V 
Standards, as they represent an incremental improvement to the existing 
standards that we incorporated by reference in Order No. 676-F. This 
phase of the demand response standard development builds upon the work 
that allows demand response to participate in organized wholesale 
electric markets, including accurate measurement and

[[Page 14659]]

monitoring of demand response resources' performance.
    34. The Phase II Demand Response M&V Standards provide common 
definitions and processes regarding demand response products in 
organized wholesale electric markets where such products are offered. 
The standards address the applicability of performance evaluation, 
metering, and processes to each of the organized wholesale electric 
markets. The changes included in the Phase II Demand Response M&V 
Standards add greater specificity on items such as meter data reporting 
deadlines. The standards also require each RTO and ISO to address in 
the RTO's or ISO's governing documents the performance evaluation 
methods to be used for demand response products. The performance 
evaluation standards define each of the individual methods and their 
use during demand response events. The changes to the performance 
evaluation standards included in the Phase II Demand Response M&V 
Standards add greater specificity on the use of the individual 
performance evaluation methods.
    35. The Commission concludes that the Phase II Demand Response M&V 
Standards facilitate the ability of demand response providers to 
participate in organized wholesale electric markets, reducing 
transaction costs and providing an opportunity for more customers to 
participate in these programs, especially for customers that operate in 
more than one organized market. The improvements to the uniform set of 
definitions and applicability requirements in the Phase II Demand 
Response M&V Standards should further reduce differences in performance 
evaluation methods between regions. Incorporating by reference these 
measurement and verification standards also will improve the methods 
and procedures for accurately measuring the performance of demand 
response resources and assist in monitoring demand response services 
for potential market manipulation.
    36. The Commission appreciates the thoughtful comments and 
proposals related to increasing the detail of the Phase II Demand 
Response M&V Standards, as well as the proposals to establish a common 
M&V approach that would supplement each RTO's and ISO's approved 
methods. As the Commission has explained in prior orders, in choosing 
to take advantage of the efficiency of the NAESB process to establish 
technical standards for business practices and communication protocols 
for the gas and electric industries, we follow the standard regulatory 
process by which standards are incorporated by reference.\27\ These 
rules appropriately balance the interests of the standards organization 
and the expediency of governmental use of privately developed 
standards. We find that, on balance, the objections raised to adopting 
the standards do not warrant rejecting them. While additional efforts 
to increase consistency across regions could benefit end users and 
demand response providers, as presented the Phase II Demand Response 
M&V Standards nonetheless represent an incremental improvement to the 
standards incorporated by reference in Order No. 676-F. The Commission 
therefore will incorporate by reference the standards without 
modification. While the Commission will not require any additional 
process to further refine or develop demand response measurement and 
verification standards at this time, we will monitor efforts at RTOs 
and ISOs and NAESB to address the issues raised in this proceeding and 
otherwise made known to us, and take action in the future in a separate 
docket as necessary.
---------------------------------------------------------------------------

    \27\ See, e.g., Standards for Business Practices and 
Communication Protocols for Public Utilities, Order No. 676-E, FERC 
Stats. & Regs. ] 31,299, at P 118 (2009).
---------------------------------------------------------------------------

    37. We agree with EEI and Southern that the particular standards we 
are incorporating by reference in this Final Rule apply only in 
organized wholesale electric markets administered by RTOs or ISOs. 
NAESB made this clear in the applicability section of its standards, 
and we do not see any need to further amend 18 CFR 38.2. With respect 
to questions regarding whether the relevant RTO or ISO governing 
documents take precedence over the standards that we are incorporating 
by reference, we find that the standards adopted are sufficiently 
clear. To the extent that the Phase II Demand Response M&V Standards 
refer to ``Governing Documents,'' in the event of a conflict with the 
otherwise applicable NAESB standard, the governing documents will take 
precedence. If such a conflict arises and is of concern to affected 
parties, they may bring that concern to the Commission for 
consideration.
    38. We also find merit in the suggestions to develop baselines that 
are more accurate for highly-variable load, to consider whether further 
work is needed to reflect in the standards the distinct functions 
provided by capacity and energy products, and to consider further 
development of appropriate rules for demand response supported by 
behind-the-meter generation. We encourage stakeholders to pursue these 
issues as they consider potential enhancements to the NAESB standards.
    39. Mr. Lynch's comments are not related to the issues in this 
proceeding and, therefore, we will not address them here.

C. NAESB Energy Efficiency M&V Standards

    40. In the NOPR, the Commission proposed to incorporate by 
reference the NAESB Wholesale Energy Efficiency M&V Standards, which 
include the following new standards--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. We address below the issues raised by the 
commenters.
1. Comments
a. Adoption of Wholesale Energy Efficiency M&V Standards
    41. The Commission sought comments on whether it should incorporate 
by reference NAESB's proposed Energy Efficiency M&V Standards. Several 
commenters, including EEI, AEP, and IRC support incorporating the NAESB 
Energy Efficiency M&V business practice standards into the Commission's 
regulations.
    42. Several other parties offer qualified support, including the DR 
Supporters, IECA, and PSEG. While generally supporting the 
incorporation of the energy efficiency business standards into the 
Commission rules, these commenters recommend several changes. The DR 
Supporters and IECA recommend that ``streamlined, cost-effective 
application of coincidence factors for simple conversion of energy use 
to peak demand reduction'' be included in the NAESB Energy Efficiency 
M&V standards, particularly for capacity markets. In its comments, PSEG 
recommends several specific modifications to the proposed Energy 
Efficiency M&V standards including wording changes, changes in report

[[Page 14660]]

timing, and deletion of Standard 021-3.11.1.9, which addresses the 
precision of measurement or monitoring equipment for proxy variables 
that do not directly measure electrical demand. IRC states that the 
Commission also should adopt and incorporate into its regulations the 
Introduction and Principles and Applicability sections identified in 
the Annual Plan item 4(d) as WEQ-021-1 and WE1-021-2, respectively. IRC 
argues that the Introduction and Principles frame the context of the 
standards and that the Applicability section: limits the applicability 
of the standard to RTOs and ISOs; establishes that RTO and ISO 
governing documents take precedence over the standard where there is a 
conflict; clarifies that the standard does not establish requirements 
related to compensation, design, operation, or use of energy efficiency 
products and services, and does not require system operators to offer 
energy efficiency products and services; and states that the standard 
includes the requirements on energy efficiency resource providers for 
M&V of energy efficiency products and services offered into wholesale 
electric markets.
    43. NEEP, NAPP, WEM, Alliance to Save Energy, and EVO recommend 
against adopting the NAESB Energy Efficiency M&V Standards. NEEP and 
EVO share PSEG's objections to the required precision of measurement of 
monitoring equipment in Standard 021-3.11.1.9. NAPP, NEEP, Alliance to 
Save Energy, and EVO object to removing references to the International 
Performance Measurement and Verification Protocol (IPMVP). These 
commenters are concerned that deleting references to the IPMVP in the 
body of the Energy Efficiency M&V Standards removes the connection of 
the NAESB energy efficiency standards to the leading industry-accepted 
energy efficiency M&V guidance document. They argue that removing the 
references to IPMVP could cause confusion in the field and impede 
credible and consistent energy efficiency M&V, and will make it much 
more difficult for the Commission to be assured of consistency and 
transparency. NAPP argues that the NAESB process resulting in removing 
references to the IPMVP did not involve broad industry participation.
    44. DNV KEMA and NEEP recommend several modifications to the Energy 
Efficiency M&V standards that address statistical significance and 
accuracy of the measurement of proxy variables. NEEP proposes 
modifications stating that the plus or minus two percent accuracy 
requirement on equipment required in WEQ.021.3.11.9 is redundant with 
the overall accuracy level required in Section WEQ.021.3.8. NEEP argues 
that this requirement could lead to a departure from standard practice 
in evaluating energy efficiency resources, and may compromise the 
overall accuracy of the M&V results while imposing higher evaluation 
costs. NEEP contends the prescribed level of accuracy for measurement 
for monitoring equipment extends beyond the hardware-specific scope of 
Section WEQ.021.3.11.
b. Other Matters
    45. Several comments request that the Commission initiate a process 
to examine specific energy efficiency standards or to convene a 
technical conference to discuss the proposed energy efficiency 
standards in general in order to resolve areas of concern. IECA 
requests that the Commission add a process to create streamlined, cost-
effective application of factors for simple conversion of energy use to 
peak reduction. EVO, NECPUC, and NEEP ask the Commission to convene a 
technical conference to address energy efficiency issues identified by 
commenters in this rulemaking process and to resolve areas of concern. 
EVO, supported by NEEP, also asks the Commission to convene a technical 
conference to address the removal of references to IPMVP from the 
energy efficiency standards, arguing that the removal constitutes a 
material change to the substance of the Wholesale Energy Efficiency M&V 
Standards.
    46. NECPUC states its understanding that there is a significant 
divergence in views amongst the NAESB board with respect to the 
equipment accuracy requirement in WEQ.021.3.11.9, and NEEP states that 
its comments on statistical precision (discussed above) were not 
sufficiently considered or understood within the NAESB process.
2. Commission Determination
    47. The Commission is revising its regulations at 18 CFR 38.2 to 
incorporate by reference the NAESB Wholesale Energy Efficiency M&V 
Standards. The new standards define terms and definitions that can be 
used to facilitate communications and provide standards for measurement 
and verification methodologies for energy efficiency in organized 
wholesale electric markets. These standards will reduce transaction 
costs and provide an additional opportunity and increased incentive for 
energy efficiency resources to participate in the wholesale markets 
established in RTO and ISO regions.
    48. As with the Phase II Demand Response M&V Standards discussed 
above, the Wholesale Energy Efficiency M&V Standards were developed 
through the consensus-based NAESB process. Most of the modifications 
commenters suggest in response to the NOPR have already been considered 
through the NAESB process; consequently, the Commission declines to 
require that such modifications be included here. We find the standard 
requiring a plus or minus two percent accuracy for measuring equipment, 
to be reasonable; thus we incorporate it here, noting that its 
applicability is limited to measuring equipment only. These standards 
on measuring equipment accuracy reflect industry consensus, arrived at 
through the NAESB standards development process, on the specific 
statistical precision requirements associated with the reliable 
operation of organized wholesale electric markets. Additionally, while 
some express concern with NAESB's use of the minor clarifications and 
correction procedures to remove the IPMVP requirement, this procedure 
is permitted by NAESB's rules, and the NAESB Executive Committee 
reached a consensus on the removal of references to IPMVP from the 
energy efficiency M&V standards. Since the standards before us do not 
include the IPMVP references, we will not address the comments in that 
regard. As previously stated, NAESB followed its processes to remove 
these references. We find that standards as presented are incremental 
improvements and incorporation by reference does not foreclose 
stakeholders from pursuing these enhancements and their concerns 
through RTO and ISO or NAESB processes. The Commission, therefore, 
incorporates the standards.\28\
---------------------------------------------------------------------------

    \28\ See n.21 supra; see also OMB Circular A-119 Revised, 
February 10, 1998, available at http://www.whitehouse.gov/omb/circulars_a119.
---------------------------------------------------------------------------

    49. Additionally, a few commenters suggested modifications that 
were not considered during the consensus-based NAESB process, and the 
Commission declines to require that those additional modifications 
here. Specifically, we will not include provisions requiring RTOs to 
carefully consider acceptance of industry developed coincidence factors 
when evaluating Energy Efficiency M&V plans, and thus the Commission 
will not undertake a Commission-led process to develop such coincidence 
factors. We encourage stakeholders to pursue these issues as they 
consider potential enhancements to the NAESB standards.
    50. We will not incorporate into our regulations the Introduction 
and Principles and Applicability sections

[[Page 14661]]

identified in the Annual Plan item 4(d) as WEQ-021-1 and WE1-021-2, 
respectively, as we find that standards that we are incorporating by 
reference are sufficiently clear that the standards apply to organized 
wholesale electric markets administered by RTOs or ISOs.
    51. The Commission also declines to convene a process or conduct 
technical conferences to discuss potential changes to the Wholesale 
Energy Efficiency M&V Standards. We conclude that it is appropriate to 
allow industry to gain additional experience with these new standards 
prior to considering additional enhancements. If the Commission 
determines that further efforts are warranted at a later time, it will 
take appropriate steps in a separate docket.

D. Incorporation by Reference/Copyrighted Standards

    52. EVO and WEM object to the incorporation by reference of the 
NAESB standards, maintaining they should not have to pay to obtain 
copies of the copyrighted standards. Similarly, WEM expresses concern 
that NAESB was utilized to develop the standards and contends that the 
fee NAESB charges for access to its standards will be onerous for some 
entities, noting that it experienced complications in getting free 
access to the standards from NAESB during the NOPR comment period. The 
PJM IMM also recommends that the Commission ensure that any standards 
incorporated into its rules are published in full in the Federal 
Register.
    53. We addressed this issue at length in Order No. 676-E \29\ in 
November of 2009, concluding that the NAESB process is an efficient and 
cost-effective method of developing these standards, incorporation by 
reference is the appropriate method for the Commission to adopt the 
regulations, and the Commission is required to observe NAESB's 
copyright.\30\ As we pointed out in that order, obtaining these 
standards is not cost prohibitive. NAESB, in fact, makes the standards 
available free for a limited period of time to those that want to view 
the standards during comment periods related to Commission proposals to 
incorporate standards by reference.\31\ For non-members seeking to 
purchase a copy, an email copy of any final action (e.g., the Demand 
Response Phase II standards) is available for $50, which is not 
prohibitive.
---------------------------------------------------------------------------

    \29\ Order No. 676-E, FERC Stats. & Regs. ] 31,299 at PP 115-
121.
    \30\ Id.
    \31\ See http://www.naesb.org/misc/NAESB_Nonmember_Evaluation_LockLizard.pdf.
---------------------------------------------------------------------------

III. Implementation Dates and Procedures

    54. The Commission is requiring, consistent with our regulations at 
18 CFR 35.28(c)(vi), each RTO and ISO to revise its OATT to include the 
NAESB Energy Efficiency and Phase II Demand Response M&V Standards we 
are incorporating by reference herein. For standards that do not 
require implementing tariff provisions, the Commission will allow the 
RTO or ISO to incorporate the WEQ standard by reference in its OATT. 
Compliance with the standards incorporated in this Final Rule will be 
required beginning on the same date that the rule becomes effective 
(i.e., sixty days after publication in the Federal Register), even if 
this precedes the filing of a revised OATT reflecting these new 
requirements.
    55. However, as we directed in the Phase I Demand Response M&V 
Final Rule, to lighten the burden associated with an immediate, stand-
alone filing of a revised tariff reflecting the standards incorporated 
by reference in this Final Rule, we are giving RTOs and ISOs the option 
of including these changes as part of an unrelated tariff filing, even 
though compliance with the revised standards is required beginning on 
the effective date of this Final Rule.\32\ If the RTO or ISO makes no 
unrelated tariff filing by December 31, 2013, it must make a separate 
tariff filing incorporating these standards by that date.
---------------------------------------------------------------------------

    \32\ See Order No. 676-F, FERC Stats. & Regs. ] 31,309 at P 44.
---------------------------------------------------------------------------

    56. If adoption of these standards does not require any changes or 
revisions to existing OATT provisions, RTOs and ISOs may comply with 
this rule by adding a provision to their OATTs that incorporates the 
standards adopted in this rule by reference, including the standard 
number used to identify the standard. To incorporate this standard into 
their OATTs, RTOs and ISOs must use the following language in their 
OATTs: Measurement and Verification of Wholesale Electricity Efficiency 
(WEQ-021 2010 Annual Plan Item 4(d), July 16, 2012; and Measurement and 
Verification of Wholesale Electricity Demand Response (WEQ-015, 2010 
Annual Plan Items 4(a) and 4(b), March 21, 2011).
    57. If a RTO or ISO requests waiver of a standard, it will not be 
required to comply with the standard until the Commission acts on its 
waiver request. Therefore, if a RTO or ISO has obtained a waiver or has 
a pending request for a waiver, its proposed revision to its OATT 
should not include the standard number associated with the standard for 
which it has obtained or seeks a waiver. Instead, the RTO's or ISO's 
OATT should specify those standards for which the RTO or ISO has 
obtained a waiver or has pending a request for waiver. If and when a 
waiver request is denied, the RTO or ISO will be required to include in 
its OATT the standard(s) for which waiver was denied.

IV. Notice of Use of Voluntary Consensus Standards

    58. In section 12(d) of NTT&AA,\33\ Congress affirmatively requires 
federal agencies to use technical standards developed by voluntary 
consensus standards organizations, like NAESB, as the means to carry 
out policy objectives or activities determined by the agencies unless 
use of such standards would be inconsistent with applicable law or 
otherwise impractical.\34\ NAESB approved the standards under its 
consensus procedures. Office of Management and Budget Circular A-119 
(Sec.  11) (February 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. The Commission published a 
request for comment in the Energy Efficiency and Phase II Demand 
Response M&V NOPR.
---------------------------------------------------------------------------

    \33\ National Technology Transfer and Advancement Act of 1995.
    \34\ Id.
---------------------------------------------------------------------------

V. Information Collection Statement

    59. The Office of Management and Budget's (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules.\35\ Upon approval of a collection of information, OMB 
will assign an OMB control number and an expiration date. Respondents 
subject to the filing requirements of a rule will not be penalized for 
failing to respond to these collections of information unless the 
collections of information display a valid OMB control number. The OMB 
Control Numbers will not be displayed in the NAESB standards; an 
explanation will be included in the clearance package submitted to OMB.
---------------------------------------------------------------------------

    \35\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    60. This Final Rule upgrades the Commission's current business 
practice and communication standards to include NAESB's Energy 
Efficiency M&V Standards and Phase II Demand Response M&V Standards. 
The implementation of these standards is necessary to increase the 
efficiency of demand response and energy efficiency

[[Page 14662]]

in organized wholesale electric markets. In addition, requiring such 
information ensures a common means of communication and ensures common 
business practices that provide participants engaged in transactions 
with demand response programs with timely information and consistent 
business procedures across multiple markets. The implementation of 
these data requirements will help the Commission carry out its 
responsibilities under the Federal Power Act.
    61. The Commission sought comments on its burden estimates 
associated with adoption of the NOPR proposals. In response to the 
NOPR, no comments were filed that addressed the reporting burden 
imposed by these requirements. Therefore the Commission will use these 
same estimates in this Final Rule.

----------------------------------------------------------------------------------------------------------------
                                                                      No. of
                                 FERC collection      No. of       responses per     Hours per     Total No. of
                                     number         respondents     respondent       response          hours
                                ................             (A)             (B)             (C)     (A) x (B) x
                                                                                                             (C)
----------------------------------------------------------------------------------------------------------------
Demand Response Standards.....  FERC-516 \36\...               6               1               4              24
                                FERC-717\37\....               6               1               9              54
Energy Efficiency Standards...  FERC-516........               6               1               6              36
                                FERC-717........               6               1              12              72
----------------------------------------------------------------------------------------------------------------
Total for FERC-516............                                                                                60
----------------------------------------------------------------------------------------------------------------
Total for FERC-717............                                                                               126
----------------------------------------------------------------------------------------------------------------
Total One-Time Burden.........                                                                               186
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------

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

    \36\ ``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.
    \37\ ``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 projects the average 
annualized cost for all respondents to be the following: \38\
---------------------------------------------------------------------------

    \38\ 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.

FERC-516: 60 hours*$59/hour = $3,540 ($590 per respondent).
FERC-717: 126 hours*59/hour = $7,434 ($1,239 per respondent).

    The following table breaks out the cost by standard:

------------------------------------------------------------------------
                                                            FERC-717
                                     FERC-516 (tariff      (standards
                                         filing)        implementation)
------------------------------------------------------------------------
Demand Response Standards Capital/             $1,416             $3,186
 Startup Costs....................
Demand Response Standards                         N/A                N/A
 Annualized Costs (Operations &
 Maintenance).....................
Energy Efficiency Standards                     2,124              4,248
 Capital/Startup Costs............
Energy Efficiency Standards                       N/A                N/A
 Annualized Costs (Operations &
 Maintenance).....................
                                    .................  .................
Demand Response Standards Total                 1,416         3,186 \39\
 Costs............................
Energy Efficiency Standards Total               2,124         4,248 \40\
 Costs............................
All Standards Total Costs.........              3,540              7,434
------------------------------------------------------------------------

    62. These new  information collection requirements  are mandatory.
---------------------------------------------------------------------------

    \39\ We note that 24 hours at $59/hour = $1,416 and 54 hours at 
$59/hour = $3,186.
    \40\ We note that 36 hours at $59/hour = $2,124 and 72 hours at 
$59/hour = $4,248.
---------------------------------------------------------------------------

    Title: Standards for Business Practices and Communication Protocols 
for Public Utilities (FERC-717); Electric Rate Schedule Filings (FERC-
516).
    Action: Information collection.
    OMB Control No.: 1902-0096 (FERC-516); 1902-0173 (FERC-717).
    Respondents: RTO and ISOs.
    Frequency of Responses: One-time implementation.
    63. Necessity of Information: The Commission's regulations adopted 
in this rule upgrade the Commission's current business practices and 
communication standards by standardizing the definitions used by RTOs 
and ISOs to identify their various energy efficiency and demand 
response products and to measure and verify the results obtained by 
these products. Moreover, the implementation of these data requirements 
will help ensure consistency among the RTOs/ISOs with respect to the 
measurement and verification of energy efficiency and demand response 
performance in their organized wholesale electric markets.
    64. Internal Review: The Commission has reviewed the information 
collection requirements and has determined, as discussed above, that 
its action in this proceeding is necessary because this rule increases 
access to standardized information for participants in wholesale energy 
markets that administer demand response and energy efficiency products 
and services. This rule also facilitates the ability of demand response 
and energy efficiency providers to participate in electricity markets, 
reducing transaction costs and providing an opportunity for more

[[Page 14663]]

customers to participate in these programs.
    65. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attn: Ellen 
Brown, Office of the Executive Director, email: DataClearance@ferc.gov, 
phone: (202) 502-8663, fax: (202) 273-0873],
    66. For submitting comments concerning the collection of 
information and the associated burden estimate, please send your 
comments to the Office of Management and Budget, Office of Information 
and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer 
for the Federal Energy Regulatory Commission, phone: (202) 395-4718, 
fax: (202) 395-7285]. For security reasons, comments to OMB should be 
submitted by email to: oira submission@omb.eop.gov. Comments submitted 
to OMB should reference the appropriate OMB Control Number(s) and 
collection number(s) (OMB Control No. 1902-0096 for FERC-516, and/or 
OMB Control No. 1902-0173 for FERC-717).

VI. Environmental Analysis

    67. 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.\41\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\42\ The actions adopted here fall within categorical 
exclusions in the Commission's regulations for rules that are 
clarifying, corrective, or procedural, for information gathering 
analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas and electric power that requires no 
construction of facilities. Therefore, an environmental assessment is 
unnecessary and has not been prepared in this Final Rule.


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

    \41\ Regulations Implementing National Environmental Policy Act 
of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \42\ 18 CFR 380.4.
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    68. The Regulatory Flexibility Act of 1980 (RFA) \43\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The Small Business Administration's (SBA) Office of Size Standards 
develops the numerical definition of a small business.\44\ 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 twelve months did 
not exceed four million megawatt hours.\45\
---------------------------------------------------------------------------

    \43\ 5 U.S.C. 601-612.
    \44\ 13 CFR 121.101.
    \45\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    69. The regulations we are incorporating by reference in this Final 
Rule impose filing requirements only on RTOs and ISOs, none of which is 
a small business. Moreover, these requirements are designed to benefit 
all customers, including small businesses. As noted above, adoption of 
consensus standards helps ensure the reasonableness of the standards by 
requiring that the standards draw support from a broad spectrum of 
industry participants representing all segments of the industry. 
Because of that representation and the fact that industry conducts 
business under these standards, the Commission's regulations should 
reflect those standards that have the widest possible support.
    70. Accordingly, pursuant to section 605(b) of the RFA, the 
Commission hereby certifies that the regulations incorporated by 
reference herein will not have a significant impact on a substantial 
number of small entities.

VIII. Document Availability

    71. 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 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.
    72. 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.
    73. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC 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.

IX. Effective Date and Congressional Notification

    74. These regulations are effective May 6, 2013. The Commission has 
determined, with the concurrence of the Administrator of the Office of 
Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of subjects in 18 CFR Part 38

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

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
    In consideration of the foregoing, the Commission amends part 38, 
Chapter I, Title 18, Code of Federal Regulations, as follows.

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

0
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.


0
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).
* * * * *

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

Appendix

List of Commenters\46\
---------------------------------------------------------------------------

    \46\ The abbreviations used to identify these commenters in this 
Final Rule are shown parenthetically.
---------------------------------------------------------------------------

Alliance to Save Energy (Alliance)

[[Page 14664]]

American Electric Power Service Corporation (AEP)
DNV KEMA
DR Supporters \47\
---------------------------------------------------------------------------

    \47\ DR Supporters include Comverge, Inc., Energy Connect, Inc., 
Energy Curtailment Specialists, Inc., EnerNOC, Inc., and Wal-Mart 
Stores, Inc.
---------------------------------------------------------------------------

Edison Electric Institute (EEI)
Efficiency Evaluation Organization (EVO)
Electricity Consumers Resource Council (ELCON)
Electric Power Supply Association (EPSA)
Hess Corporation (HESS)
Independent Market Monitor for PJM (PJM IMM)
Industrial Energy Consumers of America (IECA)
ISO/RTO Council (IRC)
John Lynch (Mr. Lynch)
North America Power Partners (NAPP)
New England Conference of Public Utilities Commissioners (NECPUC)
New York Transmission Owners (NYTOs) \48\
---------------------------------------------------------------------------

    \48\ New York Transmission Owners includes Central Hudson Gas & 
Electric Corporation, Consolidated Edison Company of New York, Inc., 
Long Island Power Authority, New York Power Authority, New York 
State Electric & Gas Corporation, Orange and Rockland Utilities, 
Inc., and Rochester Gas and Electric Corporation.
---------------------------------------------------------------------------

Northeast Energy Efficiency Partnerships, Inc. (NEEP)
PSEG Companies (PSEG) \49\
---------------------------------------------------------------------------

    \49\ The PSEG Companies are: Public Service Electric and Gas 
Company (PSE&G), PSEG Power LLC (PSEG Power) and PSEG Energy 
Resources & Trade LLC (PSEG ER&T).
---------------------------------------------------------------------------

Southern Company Services, Inc. (Southern)
Viridity Energy, Inc.; EnergyConnect, Inc.; and PJM Industrial 
Customer Coalition (Viridity)
Women's Energy Matters (WEM)

[FR Doc. 2013-04433 Filed 3-6-13; 8:45 am]
BILLING CODE 6717-01-P


