
[Federal Register Volume 78, Number 185 (Tuesday, September 24, 2013)]
[Rules and Regulations]
[Pages 58449-58458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23180]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-16-000; Order No. 785]


Generator Requirements at the Transmission Interface

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: Pursuant to section 215 of the Federal Power Act, the Federal 
Energy Regulatory Commission (Commission) approves modifications to 
four existing Reliability Standards submitted by the North American 
Electric Reliability Corporation (NERC), the Commission certified 
Electric Reliability Organization. Specifically, the Commission 
approves Reliability Standards FAC-001-1 (Facility Connection 
Requirements), FAC-003-3 (Transmission Vegetation Management), PRC-004-
2.1a (Analysis and Mitigation of Transmission and Generation Protection 
System Misoperations), and PRC-005-1.1b (Transmission and Generation 
Protection System Maintenance and Testing). The modifications improve 
reliability either by extending applicability of the Reliability 
Standard to certain generator interconnection facilities, or by 
clarifying that the existing Reliability Standard is and remains 
applicable to generator interconnection facilities. The Commission also 
approves the related Violation Risk Factors and Violation Severity 
Levels, as well as the implementation plan and effective dates proposed 
by NERC.

DATES: Effective Date: This rule will become effective November 25, 
2013.

FOR FURTHER INFORMATION CONTACT:
Susan Morris (Technical Information), Office of Electric Reliability, 
Division of Reliability Standards and Security, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-6803, susan.morris@ferc.gov.
Julie Greenisen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426 (202) 502-6362, julie.greenisen@ferc.gov.

SUPPLEMENTARY INFORMATION:

144 FERC ] 61,221

Order No. 785

Final Rule

Issued September 19, 2013
    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission hereby approves modifications to four existing Reliability 
Standards submitted by the North American Electric Reliability 
Corporation (NERC), the Commission certified Electric Reliability 
Organization. Specifically, the Commission approves Reliability 
Standards FAC-001-1 (Facility Connection Requirements), FAC-003-3 
(Transmission Vegetation Management), PRC-004-2.1a (Analysis and 
Mitigation of Transmission and Generation Protection System 
Misoperations), and PRC-005-1.1b (Transmission and Generation 
Protection System Maintenance and Testing). The modifications to these 
standards improve reliability either by extending their applicability 
to certain generator interconnection facilities, or by clarifying that 
the existing Reliability Standard is and remains applicable to 
generator interconnection facilities. The Commission also approves the 
related Violation Risk Factors and Violation Severity Levels, as well 
as the implementation plan and effective dates proposed by NERC.
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    \1\ 16 U.S.C. 824o (2006).
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I. Background

A. Regulatory Background--Section 215 of the FPA

    Section 215 of the FPA requires a Commission-certified Electric 
Reliability Organization (ERO) to develop mandatory and enforceable 
Reliability Standards, which are subject to Commission review and 
approval.\2\ Once approved, the Reliability Standards may be enforced 
either by the ERO (subject to Commission oversight), or by the 
Commission independently.\3\
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    \2\ Id. 824o(c) and (d).
    \3\ See id. 824o(e).
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    In 2006, the Commission established a process to select and certify 
an ERO \4\ and, subsequently, certified NERC as the ERO.\5\ In 2007, in 
Order No. 693, the Commission approved 83 Reliability Standards 
submitted by NERC, including initial versions of Reliability Standards 
FAC-001, FAC-003, PRC-004, and PRC-005.\6\ Further, in Order No. 693, 
the Commission approved NERC's compliance registry process, including 
NERC's Statement of Compliance Registry Criteria (Registry Criteria), 
which describes how NERC and the Regional Entities \7\ will identify 
the entities that should be registered for compliance with mandatory 
Reliability Standards.\8\ While that process allows a Regional Entity 
to register an entity over its objection, NERC's Rules of Procedure 
provide a mechanism for NERC review

[[Page 58450]]

of the Regional Entity's registration decision and, ultimately, for 
appeal to the Commission if NERC upholds the Regional Entity's 
decision.\9\
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    \4\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval and 
Enforcement of Electric Reliability Standards, Order No. 672, FERC 
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC 
Stats. & Regs. ] 31,212 (2006).
    \5\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
    \6\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242 (2007) (Order No. 693), 
order on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
    \7\ NERC is authorized to delegate certain authority to regional 
entities as prescribed by FPA section 215(e)(4). See 16 U.S.C. 
824o(e)(4).
    \8\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 92-95. The 
Commission has approved subsequent amendments to the Registry 
Criteria. See, e.g., North American Electric Reliability Corp., 122 
FERC ] 61,101 (2008).
    \9\ Rules of Procedure of the North American Electric 
Reliability Corporation, Rule 501.1.3.4.
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B. Related Commission Orders and Genesis of Project 2010-07

    4. In several fact-specific cases on appeal from a NERC 
registration determination, the Commission has addressed the need to 
apply Reliability Standard requirements that are generally applicable 
to a registered transmission owner or transmission operator to the 
owner or operator of a generator interconnection facility or tie-line. 
In New Harquahala Generating Co., LLC, 123 FERC ] 61,173 (2008) 
(Harquahala), the Commission upheld NERC's registration of New 
Harquahala Generating Company (Harquahala) as a transmission owner and 
transmission operator, agreeing that Harquahala's 26-mile, 500 kV 
generator tie-line was ``material to the reliability of the bulk power 
system.'' \10\ The Commission went into some detail concerning the 
impact on the transmission network of an event on Harquahala's 
facilities,\11\ and noted that it was affirming the Western Electricity 
Coordinating Council's (WECC's) and NERC's findings ``based on the 
specific facts of this case.'' \12\ Similarly, in Cedar Creek Wind 
Energy, LLC, 135 FERC ] 61,241 (2011) (Cedar Creek), the Commission 
upheld the registration of two wind farm owners, Milford Wind Corridor 
Phase I, LLC (Milford) and Cedar Creek Wind Energy, LLC (Cedar Creek), 
as transmission owners and transmission operators, again based on the 
specific tie-line facilities involved.\13\
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    \10\ Harquahala, 123 FERC ] 61,173 at P 44.
    \11\ See id. PP 45-55.
    \12\ Id. P 44.
    \13\ Cedar Creek Wind Energy, LLC, 135 FERC ] 61,241 (Cedar 
Creek), order on reh'g and clarification, 137 FERC ] 61,141 (2011), 
order on compliance filing, 139 FERC ] 61,214 (2012) (Cedar Creek 
Compliance Order).
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    5. In both Harquahala and Cedar Creek, the Commission found that 
there would be a reliability risk if certain Reliability Standards 
generally applicable to transmission owners and operators were not also 
applied to Harquahala, Cedar Creek and Milford, and cited to specific 
Reliability Standards and requirements that should apply to those 
entities. However, the Commission recognized that it may not be 
appropriate to require these entities to comply with all Reliability 
Standards otherwise applicable to transmission owners and operators, 
and in each case ordered NERC to negotiate with the generating company 
to develop a list of transmission owner and transmission operator 
Reliability Standard requirements applicable to that individual 
entity.\14\ On December 21, 2011, NERC submitted its compliance filing 
to the Cedar Creek order identifying which standards should apply to 
the registered entities subject to that order. In accepting NERC's 
filing, the Commission noted that the Cedar Creek order did not 
preclude NERC from pursuing a generic approach through the standards 
development process to determine which Reliability Standards should 
apply to generators.\15\
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    \14\ See Harquahala, 123 FERC ] 61,173 at PP 56-57; Cedar Creek, 
135 FERC ] 61,241 at PP 88-89.
    \15\ Cedar Creek Compliance Order, 139 FERC ] 61,214 at P 19.
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    6. After the Harquahala decision, NERC announced the formation of 
an Ad Hoc Group for Generator Requirements at the Transmission 
Interface (Ad Hoc Group) to address concerns about perceived 
reliability gaps associated with generator interconnection 
facilities.\16\ The Ad Hoc Group issued a report (Ad Hoc Group Report) 
suggesting a fairly broad approach to address these perceived gaps, 
including proposed changes to standard applicability and requirement 
language, as well as the introduction of two new terms for the Glossary 
of Terms Used in NERC Reliability Standards (NERC Glossary or 
Glossary).\17\ NERC initiated Project 2010-07 on January 15, 2010, 
following the issuance of a standard authorization request as developed 
by the Ad Hoc Group.\18\
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    \16\ See NERC Petition at 11.
    \17\ Id.; see also Final Report of the Ad Hoc Group for 
Generator Requirements at the Transmission Interface (Nov. 16, 
2009), available at: www.nerc.com/files/GO-TO_Final_Report_Complete_2009Nov16.pdf.
    \18\ NERC Petition at 11, 28.
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C. Revised Reliability Standards and NERC Petition

    7. On July 30, 2012, NERC filed a petition (NERC Petition or 
Petition) seeking Commission approval of proposed Reliability Standards 
FAC-001-1, FAC-003-3, PRC-004-2.1a, and PRC-005-1.1b. The FAC-001 and 
FAC-003 standards currently in effect are applicable only to 
transmission owners and operators, and NERC is proposing to extend 
their applicability to certain generator interconnection facilities. By 
contrast, the current version of PRC-004 and PRC-005 do apply to 
generator owners as well as transmission owners. Accordingly, NERC 
asserted that the proposed modifications in Reliability Standards PRC-
004-2.1a and PRC-005-1.1b are designed merely to clarify that their 
requirements extend not only to protection systems associated with the 
generating facility or station itself, but also to any protection 
systems associated with the generator interconnection facilities.
    8. In its Petition, NERC maintained that the changes proposed for 
these four Reliability Standards will address the reliability gap for 
generator interconnection facilities ``for the vast majority of 
Generator Owners and Generator Operators.'' \19\ NERC also explained 
that the proposed modifications to these standards will result in the 
application of certain Reliability Standards to generator owners 
without the need to register them as transmission owners or 
transmission operators only as a result of the generator 
interconnection facilities.\20\ NERC stated that these are the only 
standards that need to be applied to generator owners and generator 
operators to ensure appropriate coverage of generator interconnection 
facilities ``[e]xcept as necessary on a fact-specific basis.'' \21\ 
NERC specifically acknowledged that some generator interconnection 
facilities may require a more expansive approach:
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    \19\ Id. at 5.
    \20\ Id. at 12.
    \21\ Id. at 5. NERC noted in its Petition that the standard 
drafting team reviewed and assessed the Reliability Standards as 
identified in the Ad Hoc Group's Report, as well as the Reliability 
Standards identified in Cedar Creek. According to NERC, the Project 
2010-07 standard drafting team reviewed 34 Reliability Standards and 
102 requirements to determine what requirements should be extended 
to generator owners and generator operators that own or operate 
generator interconnection facilities, many of which had also been 
addressed in the Ad Hoc Group's Report. Id. at 11. However, the 
Project 2010-07 standard drafting team ultimately chose a different 
approach than that proposed in the Ad Hoc Group Report. The standard 
drafting team elected not to include clarifying language about a 
Reliability Standard's applicability to generator interconnection 
facilities in most standards otherwise applicable to generator 
owners or generator operators, and to instead focus on modifying 
certain Reliability Standards not currently applicable to generating 
entities. Id. at 11-12.

    The drafting team acknowledges that some Facilities used solely 
to connect generators to the transmission system are more complex 
and may therefore require individual assessment. The reliability 
gaps associated with such Facilities should not be addressed simply 
through application of all standards applicable to Transmission 
Owners and Transmission Operators, but instead through an assessment 
of the impact of such a Facility on neighboring transmission 
Facilities. Such assessment should then be used to determine exactly 
which Reliability Standards and requirements should apply to that 
Facility and whether additional entity registration is warranted. 
This assessment should, at a minimum, be based upon the output of

[[Page 58451]]

transmission planning and operating studies used by the Reliability 
Coordinator, Transmission Operator and Transmission Planner in 
complying with applicable Reliability Standards (specifically, IRO, 
TOP and TPL).\22\
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    \22\ Id. at 12-13.

    9. With respect to implementation, NERC requested an effective date 
of one year following the first quarter after regulatory approvals for 
FAC-001-1, and for FAC-003-3 Requirement R3. For the remaining 
requirements of FAC-003-3, NERC requested an effective date of two 
years following the first calendar quarter after regulatory approvals. 
NERC requested that PRC-004-2.1a and PRC-005-1.1b become effective upon 
receiving required regulatory approvals.

D. Notice of Proposed Rulemaking

    10. On April 18, 2013, the Commission issued a Notice of Proposed 
Rulemaking proposing to approve Reliability Standards FAC-001-1, FAC-
003-3, PRC-004-2.1a and PRC-005-1.1b.\23\ The Commission explained that 
the modifications to FAC-001 and FAC-003 would enhance reliability by 
extending certain requirements to appropriate generator interconnection 
facilities.\24\ In addition, the Commission found that the 
clarifications proposed in PRC-004-2.1a and PRC-005-1.1b would mitigate 
the possibility that the standards' requirements could be interpreted 
to exclude the generator interconnection facilities.\25\
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    \23\ Generator Requirements at the Transmission Interface, 
Notice of Proposed Rulemaking, 143 FERC ] 61,049 (2013) (NOPR).
    \24\ Id. PP 19-20.
    \25\ Id. P 21.
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    11. In addition to the proposal to approve the four revised 
Reliability Standards and to accept NERC's overall approach to 
registration of generator owners and operators going forward, the 
Commission sought comment in the NOPR in two areas. First, the 
Commission sought further comment on its understanding of the meaning 
of the term ``generator interconnection facility,'' as used in the 
proposed standards. The Commission indicated that it understood the 
term to refer to ``generator interconnection tie-lines and their 
associated facilities extending from the secondary (high) side of a 
generator owner's step-up transformer(s) to the point of 
interconnection with the host transmission owner.'' \26\
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    \26\ Id. P 22 (footnotes omitted).
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    12. Second, the Commission stated that ``our proposal to approve 
the revised Reliability Standards is based on the understanding that 
additional Reliability Standards or individual requirements may need to 
be applied to generator interconnection facilities as NERC acknowledges 
in its Petition, based on `individual assessments.' '' \27\ The 
Commission sought further information and comment on the particular 
circumstances that could trigger an ``individual assessment'' of 
generation interconnection facilities.
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    \27\ Id. P 24.
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    13. Finally, the NOPR proposed to approve the Violation Risk 
Factors and Violation Severity Levels, as well as the implementation 
plan and effective dates for each modified Reliability Standard as 
proposed by NERC.\28\
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    \28\ Id. P 25.
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    14. Comments were due regarding the NOPR on June 24, 2013. In 
addition to the comments filed by NERC, the Commission received twelve 
sets of substantive comments (identified in the Appendix to the Final 
Rule). In addition, on July 9, 2013, NERC filed reply comments in 
response to certain arguments raised by other commenters.

II. Discussion

    15. Pursuant to Section 215(d) of the FPA, we approve Reliability 
Standards FAC-001-1, FAC-003-3, PRC-004-2.1a and PRC-005-1.1b, 
including the associated implementation plan, as just, reasonable, not 
unduly discriminatory or preferential, and in the public interest. As 
discussed in Section A below, we believe the revised Reliability 
Standards will enhance reliability by extending certain obligations to 
generator owners and operators and by clarifying certain existing 
obligations for protective relay systems on generator interconnection 
facilities. We also discuss the following: (1) Use of the term 
generator interconnection facilities; (2) criteria and process for 
conducting individual assessments; and (3) sufficiency of NERC's 
proposed revisions.

A. Reliability Standards To Be Applied to Generator Owners and 
Generator Operators

NOPR Proposal
    16. In the NOPR, the Commission proposed to approve the four 
revised Reliability Standards as proposed in NERC's petition, but noted 
that ``this NOPR addresses the four Reliability Standards for which 
NERC seeks approval and makes no proposal about . . . other Reliability 
Standards and requirements that NERC identified in its Petition for 
informational purposes.'' \29\ The Commission also recognized that 
``while certain facilities may be adequately addressed through a 
generic evaluation, other facilities may, as NERC indicates, require 
`individual assessment' to properly determine which Reliability 
Standards apply to a facility.'' \30\ Accordingly, the Commission's 
proposed approval of the four revised Reliability Standards was ``based 
on the understanding that additional Reliability Standards or 
individual requirements may need to be applied to generator 
interconnection facilities . . . based on `individual assessments.' '' 
\31\
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    \29\ NOPR, 143 FERC ] 61,049 at P 23.
    \30\ Id. P 24.
    \31\ Id.
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Comments
    17. NERC and all other entities filing comments support the 
approval of the revised Reliability Standards, with many noting their 
strong support for NERC's package of revisions as a whole. EPSA/ELCON 
views the revised Reliability Standards and NERC's modified approach to 
registration as a ``substantial improvement in addressing reliability 
concerns with respect to generator interconnection Facilities.'' \32\ 
APPA similarly supports approval of NERC's petition, claiming that such 
approval ``will ensure reliability, clarify roles and responsibilities 
in the area of bulk electric system reliability for both generators and 
their host transmission owner/operators, and lessen ambiguity regarding 
registration questions for existing generators.'' \33\
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    \32\ EPSA/ELCON Comments at 8.
    \33\ APPA Comments at 2.
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    18. BP Wind Energy strongly supports the NOPR's proposed approval 
of the revised Reliability Standards, asserting that the NOPR's 
approach is ``a tailored approach that addresses perceived generator 
interconnection reliability gap issues from a practical perspective 
without resulting in unnecessary increased costs and burdens on 
generator owners and generator operators. . . .'' \34\ Likewise, ITC 
supports approval of each of the revised standards, and notes that 
``[a]pplying these standards to the facilities as the NOPR proposes 
will not only improve reliability, but will also level the playing 
field between transmission owners and owners of facilities which are 
similar in terms of operation and potential system impact.'' \35\
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    \34\ BP Wind Energy Comments at 5.
    \35\ ITC Comments at 5-6; see also CDWR Comments at 5 
(supporting approval of the four modified Reliability Standards); 
PPL Comments at 3.
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Commission Determination
    19. We approve each of the four revised Reliability Standards as 
proposed by NERC, as discussed further

[[Page 58452]]

below. We agree with NERC that the changes proposed for these four 
Reliability Standards will address the reliability gap for generator 
interconnection facilities for the majority of generator owners and 
generator operators. Closing these gaps is an important reliability 
benefit. We also confirm our understanding that additional Reliability 
Standards or individual requirements may need to be applied on a case-
by-case basis to generator interconnection facilities in certain 
circumstances, but that for the majority of generator owners and 
operators, NERC will not pursue registration of generator owners and 
operators as transmission owners or transmission operators due solely 
to their ownership or operation of generator interconnection 
facilities.
1. Approval of Reliability Standard FAC-001-1 NOPR Proposal
    20. In the NOPR, the Commission proposed to approve changes to the 
existing FAC-001 Reliability Standard, which requires transmission 
owners to document, maintain, and publish facility connection 
requirements that comply with NERC, regional, and individual criteria 
for generation facilities, transmission facilities, and end-user 
facilities. The proposed modification would extend the standard's 
obligations to any generator owner that has executed an ``[a]greement 
to evaluate the reliability impact of interconnecting a third party 
Facility to the Generator Owner's existing Facility . . . used to 
interconnect to the interconnected Transmission systems.'' \36\ The 
Commission proposed to approve this modification, finding it would 
enhance reliability by extending obligations to develop and make 
available facility connection requirements as appropriate, i.e., in the 
relatively uncommon situation where an agreement stemming from an 
interconnection request has been executed.\37\
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    \36\ NOPR, 143 FERC ] 61,049 at P 9 (citing to NERC Petition at 
Ex. B (Proposed FAC-001-1, Requirement R1)). The NOPR noted NERC's 
characterization of the circumstances the modification was designed 
to address as being the ``rare'' circumstance where a generator 
owner is required by a regulatory body to interconnect a third party 
generator to its tie-line. While NERC recognized that the 
arrangement could result in the generator owner ultimately being 
registered as a transmission owner or operator, the modification to 
FAC-001-1 would provide ``appropriate reliability coverage until any 
additional registration is required,'' while ensuring that ``the 
standard does not impact any Generator Owner that never executes an 
[a]greement as described in the standard.'' See id. P 10.
    \37\ Id. P 19.
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Comments
    21. None of the commenters object to the revisions reflected in 
FAC-001-1. ITC explicitly supports the revision, asserting that the 
proposed changes are ``critical to avoid any potential gap in 
reliability standards prior to a generator owner's registration as a 
new functional entity.'' \38\ ITC further notes that the information 
required under Requirement R3.1 enhances ITC's ability to maintain safe 
and reliable transmission service, and will be useful in its and other 
ISOs'/RTOs' transmission planning processes as it will allow them to 
account for any third party interconnections and their impacts on the 
overall transmission system.
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    \38\ ITC Comments at 6.
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    22. Similarly, AWEA supports the modifications reflected in FAC-
001-1 due to its limited application to generator owners and operators 
that have executed an agreement to evaluate the impacts of 
interconnection, which AWEA argues is ``appropriately balanced.'' \39\ 
However, AWEA expresses concern about the uncertainties as to when a 
generator owner must offer interconnection or transmission service to 
third parties, and therefore (1) asks NERC to ensure that FAC-001-1 is 
not applied to generators that are not required to accept 
interconnection requests; and (2) asks the Commission to clarify that 
the standard only applies when a generator is required to accept an 
interconnection request, and not merely upon receipt of such a request.
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    \39\ AWEA Comments at 5.
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Commission Determination
    23. We approve proposed Reliability Standard FAC-001-1, as it will 
enhance reliability by expanding the obligation to develop and make 
available facility connection requirements to generators who have 
executed an agreement to interconnect with a third party, which will 
assist in the transmission planning process. With respect to AWEA's 
request for clarification, we do not believe the standard itself is 
unclear as to when it will apply to a generator owner or operator, but 
note that a mere request for interconnection would not immediately 
trigger the application of the standard to a generator owner or 
operator receiving such a request. Instead, FAC-001-1 would apply as 
soon as an agreement to evaluate the reliability impact of an 
interconnection is executed, whether the generator owner is required to 
do so by regulatory order or has entered into such an agreement without 
such a regulatory mandate.
2. Approval of Reliability Standard FAC-003-3
NOPR Proposal
    24. In the NOPR, the Commission proposed to approve the 
modifications in Reliability Standard FAC-003-3, which would extend the 
FAC-003-2 vegetation management requirements to certain generator 
interconnection facilities, indicating that the proposal addresses a 
potential reliability gap in the currently-effective standard.
Comments
    25. None of the commenters object to the approval of Reliability 
Standard FAC-003-3, and several commenters explicitly state their 
support for it. ITC states that the extension of the vegetation 
management standards to generator interconnection facilities that meet 
the proposed criteria ``will help avoid future vegetation-related 
events,'' and notes that the types of generator interconnection 
facilities that will be subject to the vegetation management 
requirements under FAC-003-3 are ``functionally similar to transmission 
facilities with respect to the significant impact that failure or 
misoperations of such tie line facilities could potentially have on the 
bulk electric system.'' \40\ AWEA supports the limitations on 
applicability reflected in the proposed standard as a ``reasonable and 
balanced approach,'' asserting that application of the vegetation 
management requirements of FAC-003-3 to all generator interconnection 
facilities would be excessive, especially for interconnection 
facilities of limited length, and points out that generator owners and 
operators have ``every incentive'' to maintain the facilities in order 
to deliver energy.\41\
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    \40\ ITC Comments at 7.
    \41\ AWEA Comments at 6.
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Commission Determination
    26. We approve Reliability Standard FAC-003-3. Consistent with the 
NOPR, we find that the modifications to FAC-003 address a potential 
reliability gap in the current set of Reliability Standards, since they 
do not include a requirement for generator owners to perform vegetation 
management on their tie-lines or to maintain minimum levels of 
clearance between vegetation and significant overhead generator 
interconnection facilities. Further, we conclude that the proposed 
limits on applicability reflected in FAC-003-3 are reasonable, as it is 
common for generator interconnection facilities of

[[Page 58453]]

relatively short span (i.e., less than one mile) to cross only areas 
with limited or no vegetation.\42\
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    \42\ See NOPR, 143 FERC ] 61,049 at P 20.
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    27. Further, we adopt our proposed guidance that the exemption for 
overhead lines with a clear line of sight from the generator to the 
point of interconnection should be ``interpreted narrowly,'' meaning 
there should be ``no obstructions . . . that prevent personnel from 
identifying potential reliability hazards over the full length of the 
line.'' \43\
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    \43\ Id.
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3. Approval of Reliability Standards PRC-004-2.1a and PRC-005-1.1b
NOPR Proposal
    28. In the NOPR, the Commission proposed to approve the clarifying 
language NERC proposed for PRC-004 and PRC-005.
Comments
    29. None of the commenters object to the changes to Reliability 
Standards PRC-004 and PRC-005, and several expressly support the 
changes. AWEA states that the proposed modifications provide greater 
certainty to generator owners and operators regarding their 
responsibilities under the standards.\44\ Similarly, ITC believes the 
changes will avoid future misunderstandings as to rights and 
responsibilities.\45\
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    \44\ AWEA Comments at 6-7.
    \45\ ITC Comments at 7.
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Commission Determination
    30. approve Reliability Standards PRC-004-2.1a and PRC-005-1.1b. We 
agree with NERC that the changes mitigate the possibility that entities 
could interpret the standards to exclude generator interconnection 
facilities.\46\
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    \46\ See NOPR, 143 FERC ] 61,049 at P 21.
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B. Definition of Generator Interconnection Facility

NOPR Proposal
    31. While proposing to approve the use of the term ``generator 
interconnection facility'' as proposed in the revised Reliability 
Standards, the Commission indicated in the NOPR that further 
clarification of that term may be warranted. The Commission stated its 
understanding of the term to refer to ``generator interconnection tie-
lines and their associated facilities extending from the secondary 
(high) side of a generator owner's step-up transformer(s) to the point 
of interconnection with the host transmission owner.'' \47\ The 
Commission sought comment on its understanding of the term, as well as 
its understanding that a generator owner or operator's compliance 
obligations with respect to the generator interconnection facilities 
extend to the point of interconnection with the host transmission 
owner.\48\
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    \47\ Id. P 22 (footnotes omitted).
    \48\ Id.
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Comments
    32. NERC agrees with the Commission's understanding of the term 
``generator interconnection facility'' as well as its understanding of 
the extent of the generator owner or operator's obligations with 
respect to those facilities.\49\ EPSA/ELCON also agree that the 
Commission's understanding of the term is consistent with that used 
during the standard development process (i.e., Project 2010-07), and 
with common industry practice and understanding.\50\
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    \49\ NERC Comments at 3-4.
    \50\ EPSA/ELCON Comments at 4.
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    33. However, a number of commenters argue that the Commission's 
understanding of the term generator interconnection facility requires 
further refinement or modification, and several of these commenters ask 
the Commission to adopt a formal definition of the term, either within 
the context of the relevant Reliability Standard or as a defined 
Glossary term. AWEA and E.ON Renewables ask the Commission to clarify 
that a generator owner/operator's compliance obligations extend only to 
the point where there is a change in ownership to another transmission 
owner, ``whether those facilities are classified as interconnection, or 
transmission facilities.'' \51\ E.ON Renewables states that this 
proposed refinement will ensure that the obligations of the generator 
owner or operator extend only to the facilities it owns or operates, 
and is consistent with the concept of point of change of ownership as 
commonly reflected in generator interconnection agreements.\52\ BP Wind 
Energy argues for a similar clarification, but asserts that the term as 
clarified should also be memorialized either in the NERC Glossary or in 
each relevant standard.\53\
---------------------------------------------------------------------------

    \51\ AWEA Comments at 9; see also E.ON Renewables at 3 
(proposing that the term as clarified should include facilities ``to 
the point of interconnection where there is a change in ownership 
with the host transmission owner's interconnection or transmission 
facilities, as applicable'').
    \52\ E.ON Renewables Comments at 3-4.
    \53\ BP Wind Energy Comments at 10-11.
---------------------------------------------------------------------------

    34. BPA also contends that the term ``generator interconnection 
facility'' should be formally defined, but seeks a more substantial 
modification to the Commission's understanding of the term. BPA is 
concerned that in situations where the host transmission owner owns the 
tie-line and other interconnection facilities down to the high-side of 
the step-up transformer, the generator owner would not own a 
``generator interconnection facility'' at all as the Commission would 
define the term.\54\
---------------------------------------------------------------------------

    \54\ BPA Comments at 3-4.
---------------------------------------------------------------------------

    35. Alameda raises a concern with respect to the Commission's 
understanding of the term ``generator interconnection facility,'' 
asserting that it fails to address the situation where a generator 
interconnection facility is not owned by the generator owner or 
operator of the facility, but by a third party. Alameda suggests that 
the term should encompass generator interconnection tie-lines and 
associated facilities owned by entities other than the generator owner/
operator of the relevant generating resource, and argues that these 
entities, like the generator owner or generator operator, should not be 
required to register as a transmission owner or operator solely because 
of its interconnection facilities.\55\
---------------------------------------------------------------------------

    \55\ Alameda Comments at 6.
---------------------------------------------------------------------------

    36. NERC responds to the comments of AWEA and E.ON Renewables, 
inter alia, by asserting that their requested modification is 
unnecessary, since generator owners and operators are responsible only 
for the facilities they own or operate (or for which they volunteer to 
be responsible) under NERC's Reliability Standards framework.\56\ In 
response to comments seeking adoption of a formal definition of the 
term ``generator interconnection facility,'' NERC states that the 
standard drafting team considered and rejected that approach. NERC 
notes nonetheless that interested parties are free to initiate the 
development of a defined term pursuant to the procedures outlined in 
its standard processes manual.\57\
---------------------------------------------------------------------------

    \56\ NERC Reply Comments at 4-5.
    \57\ NERC Reply Comments at 5-6.
---------------------------------------------------------------------------

Commission Determination
    37. We affirm our understanding that the term ``generator 
interconnection facility'' refers to ``generator interconnection tie-
lines and their associated facilities extending from the secondary 
(high) side of a generator owner's step-up transformer(s) to the point 
of interconnection with the host transmission owner.'' \58\ We are not 
persuaded by the commenters that further refinement of this 
understanding is warranted.
---------------------------------------------------------------------------

    \58\ NOPR, 143 FERC ] 61,049 at P 22 (footnotes omitted).
---------------------------------------------------------------------------

    38. Further, we agree with NERC that a generator owner or operator 
would not

[[Page 58454]]

have compliance obligations associated with facilities it does not own 
or operate (unless it volunteers to undertake such obligations).\59\ 
While we do not agree that a modification of the term is necessary to 
address AWEA and E.ON Renewables' concerns, we confirm that our intent 
is to ensure that a generator owner or operator's obligations with 
respect to generator interconnection facilities extend to the point of 
change of ownership from the generator owner/operator to the next 
interconnected registered entity, which may not occur at the point of 
interconnection between the tie-line as a whole and the larger, 
interconnected transmission grid.
---------------------------------------------------------------------------

    \59\ See NERC Reply Comments at 4-5.
---------------------------------------------------------------------------

    39. Nor are we persuaded that BPA's suggested modification is 
necessary to cover a potential reliability gap. In the situation 
described by BPA, the Reliability Standards and requirements normally 
applicable to generator interconnection facilities would apply due to 
the owner's status as a registered transmission owner, and any 
facilities below the high side of the step-up transformer should be 
covered as part of the Reliability Standards and requirements generally 
applicable to generator owners and operators.
    40. Finally, we reject Alameda's requested modification to the term 
``generator interconnection facility'' in order to address the 
circumstance where a third entity owns or operates all or a portion of 
the interconnection facilities between the generating resource and the 
interconnected transmission system. In such cases, we agree that it may 
be more appropriate for the entity to be subject to the Reliability 
Standards applicable to generator owners and operators (including the 
four standards at issue here) rather than to the full panoply of 
standards applicable to transmission owners and operators, but we will 
not make such a blanket finding here. Rather, NERC and the Regional 
Entities can consider the appropriate registry status for an entity in 
this position on a case-by-case basis. Further, any categorical change 
to applicability of specific Reliability Standards should be addressed 
in the Reliability Standards development process.

Individual Assessments

NOPR Proposal
    41. In the NOPR, the Commission proposed to accept NERC's approach 
to the registration of generator owners and operators going forward, 
whereby most generator owners and operators would not, solely as a 
result of their interconnection facilities, be registered as 
transmission owners and operators, and would only be subject to the 
Reliability Standards and requirements applicable to generator owners 
and operators (including the four revised standards at issue in this 
proceeding). The Commission explicitly based its approval of this 
approach on its ``understanding that additional Reliability Standards 
or individual requirements may need to be applied to generator 
interconnection facilities . . . based on `individual assessments.' '' 
\60\ The Commission sought comment on several aspects of NERC's 
expectations for these individual assessments, as follows:
---------------------------------------------------------------------------

    \60\ NOPR, 143 FERC ] 61,049 at P 24.

    [W]e seek comment as to what circumstances could trigger such an 
individual assessment. We also seek comment on how NERC envisions 
the individual assessments will be performed as part of the 
transmission planning and operating studies NERC mentions in the 
Petition, when the individual assessments will occur, what 
percentage of generator interconnection facilities are ``complex'' 
and thereby likely to trigger such an individual assessment 
(including the number of existing generator interconnection 
facilities that will be required to adhere to additional 
transmission owner or transmission operator Reliability Standards), 
and how the results of the individual assessments will be 
coordinated among the interested parties.\61\
---------------------------------------------------------------------------

    \61\ Id.
---------------------------------------------------------------------------

Comments
    42. NERC comments that ``several events'' could trigger an 
individual assessment, including: (1) NERC gaining new information, for 
example, from NERC's analysis of an event or off-normal occurrence on 
the system, which NERC would pursue through development of a new or 
revised standard if of a general nature; (2) NERC gaining additional 
information specific to an individual generator owner or operator, 
which might lead NERC and the Regional Entity to pursue additional 
registration; and (3) through review of an element as part of the bulk 
electric system definition exception process.\62\ NERC adds that ``the 
existing processes and roles and responsibilities of NERC and the 
regions should ensure that `complex' generator interconnection 
facilities will be identified and appropriately addressed on a case-
specific basis.'' \63\
---------------------------------------------------------------------------

    \62\ NERC Comments at 5-6. PPL concurs with NERC's identified 
triggering events, and supports NERC's proposed approach for 
individual assessments. PPL Comments at 4-5.
    \63\ NERC Comments at 6.
---------------------------------------------------------------------------

    43. With respect to the prevalence of such individual assessments 
going forward, NERC states that it ``expects that widespread 
registration of Generator Owner or Generator Operators as Transmission 
Owners and Transmission Operators should not be necessary in the 
future.'' \64\ NERC further states that, with the approval of the four 
modified Reliability Standards, it ``believes it has addressed the 
reliability concerns that caused NERC to pursue registration of certain 
Generator Owners and Generator Operators as Transmission Owners and 
Transmission Operators (thereby subjecting them to some additional 
Requirements).'' \65\
---------------------------------------------------------------------------

    \64\ Id. at 5.
    \65\ Id. at 6-7.
---------------------------------------------------------------------------

    44. EPSA/ELCON agrees with NERC's general approach, i.e., 
identification of the set of standards and requirements that need to be 
applied to generator owners and operators in general to close any 
reliability gap, with the expectation that ``only a limited narrow 
subset of generators could potentially be `complex' and thereby subject 
to further assessment for either application of limited TO or TOP 
Reliability Standards and specific limited requirements therein.'' \66\ 
To the extent that individual circumstances warrant additional 
registration as a transmission owner or transmission operator, EPSA/
ELCON argues for development of a specific process for that assessment, 
which should be used only as a last resort. EPSA/ELCON argues for the 
development of a process, utilizing industry input and modeled after 
the bulk electric system exception process, which will allow 
independent assessment of the perceived reliability gap by a technical 
review panel. Dominion and APPA support EPSA/ELCON's proposed approach 
in developing a process required for individual assessment,\67\ 
although Dominion adds that the process ``should involve an assessment 
by the entity's Balancing Authority, Reliability Coordinator, 
Transmission Operator, and Transmission Provider.'' \68\
---------------------------------------------------------------------------

    \66\ EPSA/ELCON Comments at 5.
    \67\ Dominion Comments at 3; APPA Comments at 2-3 (commenting 
that ``it is difficult to identify in advance the factors and 
considerations that may come into play as part of a specific complex 
generator interconnection'').
    \68\ Dominion Comments at 3-4.
---------------------------------------------------------------------------

    45. E.ON Renewables comments that NERC's description of the 
circumstances that might trigger an individual assessment is vague.\69\ 
E.ON Renewables and AWEA argue that NERC should be required to identify 
the specific criteria to be used to establish a facility as 
``complex,'' with examples and an explanation of the reliability gap 
associated with that example, as well an

[[Page 58455]]

explanation of how assessments will be performed. E.ON Renewables 
argues that these criteria and processes should be identified on the 
record in this or another proceeding, and be subject to industry 
comment. Finally, E.ON Renewables asks the Commission to find, in this 
proceeding, that (1) generator interconnection facilities that connect 
to the transmission system at a single point of interconnection are not 
``complex,'' and (2) the only additional requirements that can be 
applied to the owner or operator of ``complex'' generator 
interconnection facilities are those needed to close the identified 
reliability gap, rather than ``classification as a TO or TOP and the 
attendant registry and compliance associated with a TO and TOP.'' \70\
---------------------------------------------------------------------------

    \69\ E.ON Renewables Comments at 4.
    \70\ Id. at 5-6. See also AWEA Comments at 7-8.
---------------------------------------------------------------------------

    46. BP Wind Energy makes similar arguments regarding the need for 
the establishment of ``clear and defined parameters regarding 
individual assessments, set forth either in the NERC registry or other 
Commission-approved rule, procedure or document.'' \71\ BP Wind Energy 
asserts that generator owners and operators should be involved in the 
development of the parameters and process.
---------------------------------------------------------------------------

    \71\ BP Wind Energy Comments at 8.
---------------------------------------------------------------------------

    47. TDU Systems states it does not object to individual assessment 
of ``truly complex generator interconnection facilities,'' but argues 
that such assessments must be narrowly tailored to ensure that the vast 
majority of generator owners and operators are not subject to such an 
assessment.\72\ Despite TDU Systems' recognition that individual 
assessments may be warranted in some cases, it asks the Commission to 
``confirm'' that an entity owning or operating generator 
interconnection facilities and no other transmission facilities need 
not be registered as a transmission owner or transmission operator 
going forward (i.e., after approval of the four Reliability Standards 
at issue in this proceeding).\73\
---------------------------------------------------------------------------

    \72\ TDU Systems at 6-7.
    \73\ Id. at 4-5.
---------------------------------------------------------------------------

    48. In its Response, NERC states that a process for conducting 
individual assessments is unnecessary at this time because there are 
existing mechanisms under the NERC Rules of Procedure to deal with any 
registration changes that may be warranted.\74\ Accordingly, NERC 
further maintains that the development of such a process is 
premature.\75\
---------------------------------------------------------------------------

    \74\ NERC Response at 2-3.
    \75\ NERC notes that it will be reviewing its registration 
process in 2014. NERC Response at 3 & n.7.
---------------------------------------------------------------------------

    49. In responding to the requests for further clarification or 
``confirmation'' that generator owners and operators will not be 
subject to registration as a transmission owner or operator based 
solely on their interconnection facilities, NERC reiterates that it 
``will generally no longer pursue registration of Generator Owners and 
Generator Operators as Transmission Owners and Transmission 
Operators.'' \76\ However, NERC asserts that it ``cannot guarantee that 
it will never be necessary to register a Generator Owner or Generator 
Operator as a Transmission Owner or Transmission Operator as such a 
statement would be inconsistent with NERC's obligations as the Electric 
Reliability Organization.'' \77\
---------------------------------------------------------------------------

    \76\ Id. at 3 (quoting NERC Comments at 7).
    \77\ Id.
---------------------------------------------------------------------------

Commission Determination
    50. We find NERC's proposed approach to determining whether an 
individual assessment, or whether additional Reliability Standards need 
to be more broadly applied, to be reasonable. Given NERC's expectation 
that ``the number of such facilities is low,'' it seems unnecessary at 
this time to require a new process tailored to such individual 
assessments.\78\ Should greater transparency and consistency across the 
regions become necessary, there are existing mechanisms under the NERC 
Rules of Procedure to deal with any changes to the registration 
criteria that may be warranted.\79\
---------------------------------------------------------------------------

    \78\ NERC Comments at 6.
    \79\ See NERC Rules of Procedure Sec. Sec.  500 and 1400; see 
also NERC Response at 3.
---------------------------------------------------------------------------

    51. We reject E.ON Renewable's request for a finding that generator 
interconnection facilities that connect to the transmission system at a 
single point of interconnection are categorically not ``complex.'' We 
believe it is inappropriate to make a blanket finding as to any 
specific configuration, and note that we upheld NERC's registration of 
Harquahala as a transmission owner although the generator 
interconnection facilities in that case connected to the transmission 
system at a single point.
    52. We also reject TDU Systems' and other commenters' request to 
``clarify'' that generator owners and operators will no longer be asked 
to register as transmission owners or operators under any 
circumstances. Quite the contrary, as we stated in the NOPR, our 
proposed approval of the revised Reliability Standards was ``based on 
the understanding that additional Reliability Standards or individual 
requirements may need to be applied to the generator interconnection 
facilities . . . based on `individual assessments.' '' \80\ We leave 
open the possibility that in some cases, the interconnection facilities 
may be so extensive that the entity should not only be registered as a 
transmission owner or operator, but should be subject to all of the 
Reliability Standards and requirements applicable to such an entity. In 
other cases, it may be appropriate to waive a significant portion of 
the standards or requirements generally applicable to transmission 
owners and operators, even if the entity is technically registered as a 
transmission owner or operator.
---------------------------------------------------------------------------

    \80\ NOPR, 143 FERC ] 61,049 at P 24.
---------------------------------------------------------------------------

    53. However, consistent with our prior decisions in Harquahala and 
Cedar Creek, we clarify that for the anticipated small number of 
generator owners and operators owning facilities deemed to be 
``complex'' and therefore potentially subject to additional Reliability 
Standards, NERC should evaluate, in consultation with the Regional 
Entity, which Reliability Standards should apply to the particular 
entity based on the specific facts and circumstances. We further 
clarify that the generator owner or operator should only be obligated 
to comply with those Reliability Standards and requirements necessary 
to close the identified reliability gap.\81\ To the extent that 
disputes remain about the appropriate application of Reliability 
Standards and requirements, we note that generator owners and operators 
continue to have the right to bring any such dispute to the Commission.
---------------------------------------------------------------------------

    \81\ See NERC Comments at 6.
---------------------------------------------------------------------------

D. Impact on Current Registrations and Registration Process

NOPR Proposal
    54. In the NOPR, the Commission noted NERC's position that 
acceptance of its proposed revisions would ``not have the effect of de-
registering any entity from the NERC Compliance Registry.'' \82\ The 
Commission also recognized that the Petition was not intended to 
overturn any previous orders, citing to Cedar Creek and Harquahala.\83\
---------------------------------------------------------------------------

    \82\ NOPR, 143 FERC ] 61,049 at P 17.
    \83\ Id. n.37.
    \84\ TDU Systems at 5-6.
---------------------------------------------------------------------------

Comments
    55. TDU Systems asks for clarification regarding the process by 
which entities currently registered as a transmission owner or operator 
may seek de-registration.\84\ In particular, TDU Systems seeks 
clarification that a request for de-registration under NERC's

[[Page 58456]]

Rules of Procedure will not be treated as an appeal of an existing 
registration listing, i.e., it will not be subject to the 21 day 
deadline for filing an appeal from an initial registration decision. In 
the alternative, TDU Systems asks the Commission to direct NERC to 
explain the process that should be used for de-registration of an 
entity currently registered as a transmission owner or operator. BP 
Wind Energy also seeks clarification that entities are free to seek a 
change in their registry status as a transmission owner or operator, or 
to modify the requirements with which they are required to comply.\85\
---------------------------------------------------------------------------

    \85\ BP Wind Energy Comments at 9-10.
---------------------------------------------------------------------------

    56. In its response, NERC reiterates that this proceeding will not 
have the effect of de-registering any entity from the NERC Compliance 
Registry, and states that any changes to registration will be governed 
by its Rules of Procedure.\86\
---------------------------------------------------------------------------

    \86\ NERC Response at 2-3.
---------------------------------------------------------------------------

Commission Determination
    57. We confirm that this final rule does not have the effect of de-
registering any entity from the NERC Compliance Registry. However, we 
grant the requested clarification that this order does not alter an 
entity's right to seek a change in its registration status under NERC's 
Rules of Procedure.

III. Information Collection Statement

    58. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping requirements 
(collections of information) imposed by an agency.\87\ Upon approval of 
a collection of information, OMB will assign an OMB control number and 
expiration date. Respondents subject to the filing or recordkeeping 
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.
---------------------------------------------------------------------------

    \87\ 5 CFR 1320.11 (2013).
---------------------------------------------------------------------------

    59. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the Paperwork Reduction Act (PRA). The Commission solicited comments 
on the need for this information, whether the information will have 
practical utility, the accuracy of the provided burden estimate, ways 
to enhance the quality, utility, and clarity of the information to be 
collected, and any suggested methods for minimizing the respondent's 
burden, including the use of automated information techniques. The 
Commission did not receive any comments on the reporting burden 
estimate.
    60. This Final Rule approves Reliability Standards FAC-001-1, FAC-
003-3, PRC-004-2.1a, and PRC-005-1.1b, which would replace currently 
effective Reliability Standards FAC-001-0, FAC-003-1,\88\ PRC-004-2a, 
and PRC-005-1b. The modifications included in PRC-004-2.1a and PRC-005-
1.1b are clarifications of existing requirements, do not extend those 
existing requirements to any new entity or to additional facilities, 
and do not affect the existing burden related to those standards.\89\
---------------------------------------------------------------------------

    \88\ As of the date of issuance of this Final Rule, the 
currently effective standard is FAC-003-1. While a revised version 
of that standard, FAC-003-2, was approved in Docket No. RM12-4-000, 
it has yet to go into effect.
    The information collection requirements of Reliability Standard 
FAC-003-2 were approved by the OMB on May 29, 2013, under FERC-725A 
(OMB Control No. 1902-0244).
    \89\ The information collection requirements and related burden 
(both unchanged in this Final Rule) of Reliability Standards PRC-
004-2a and PRC-005-1b are covered under FERC-725A(OMB Control No. 
1902-0244).
---------------------------------------------------------------------------

    61. The modifications reflected in FAC-001-1 extend the obligation 
to document, maintain, and publish interconnection requirements to any 
generator owner that has an executed agreement with a third party to 
evaluate the reliability impact of a requested or required 
interconnection. NERC states, and we agree, that the number of affected 
generator owners is likely to be extremely small.\90\ Moreover, it is 
likely that any increase in an entity's recordkeeping and reporting 
requirements would occur through a change in that entity's NERC 
registration status in any case, i.e., NERC would likely be considering 
registration of the entity as a transmission owner, with the 
corresponding responsibilities. Accordingly, the Commission views the 
potential increase in recordkeeping and reporting burden from revised 
standard FAC-001-1 as minimal, but has provided an estimate of that 
burden in the table set out below.
---------------------------------------------------------------------------

    \90\ See NERC Petition at 20.
---------------------------------------------------------------------------

    62. The modifications reflected in FAC-003-3 extend NERC's 
vegetation management requirements to certain generator interconnection 
facilities, including requirements to create and maintain records 
related to the generator owner's vegetation management work plan and 
performance of inspections. Generator owners typically already maintain 
the vegetation surrounding the right-of-way for the generator 
interconnection facility that connects the generating station 
switchyard to the point of interconnection with a transmission owner's 
facility. However, the proposed requirements outlined in FAC-003-3 may 
exceed a generator owner's current vegetation management program, 
particularly with respect to recordkeeping and reporting.
    63. Public Reporting Burden: The burden and cost estimates below 
are based on the increase in the reporting and recordkeeping burden 
imposed by the proposed Reliability Standards. Our estimate of the 
number of respondents affected is based on the NERC Compliance Registry 
as of July 30, 2013. According to the Compliance Registry, NERC has 
registered 881 generator owners within the United States, and we 
estimate that approximately 10 percent (or 88) of these generator 
owners have interconnection facilities that meet the proposed 
requirements for applicability of the new standard (i.e., having 
overhead lines that are greater than 200 kV or are part of an IROL or 
WECC Transfer Path, and that are either longer than one mile or without 
a clear sightline to the point of interconnection with the host 
transmission system).
    64. The burden estimates reflect the changes in the standards and 
the number of affected entities (e.g., the generator owner's one-time 
burden to develop, or review and modify, an existing vegetation 
management program, and the on-going, relatively minor burden of 
preparing quarterly reports of relevant outages). Estimates for the 
proposed additional burden imposed by the Final Rule in RM12-16 
follow.\91\
---------------------------------------------------------------------------

    \91\ The NOPR used the identifier FERC-725A (OMB Control No. 
1902-0244). However, for administrative purposes and to submit the 
information collection requirements to OMB timely, the requirements 
were labeled FERC-725M (OMB Control No. 1902-0263) in the submittal 
to OMB associated with the NOPR. We are using FERC-725M in this 
Final Rule and in the associated submittal to OMB.

[[Page 58457]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         No. of          No. of      Average burden
             FERC-725M                 respondents    responses per     hours per        Total annual burden hours              Total annual cost
                                          \92\         respondent       response
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                (1)             (2)             (3)  (1 ) x (2) x (3).................
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    FAC-003-3 (Transmission Vegetation Management)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Strategies, documentation,                       88               1              32  2,816 (one-time).................  $146,432 one-time [@$52/hr.]
 processes, & procedures (M3).
Quarterly Reporting (Compliance             \94\ 96               4            0.25  96...............................  6,720 [@$70/hr.]
 1.4).
Annual Veg. Inspect. Doc. (M6);                  88               1               2  176..............................  12,320 [@$70/hr.]
 annual veg. work plan (M7);
 evidence of mgt. of veg. (M1 &
 M2), confirmed veg. condition (M4)
 & corrective action (M5).
Record Retention (Compliance 1.2)..              88               1               1  88...............................  2,464 [@$28/hr.]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     FAC-001-1 (Facility Connection Requirements)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facility connection reqs. (R2, R3,                5               1              16  80 (one-time)....................  5,600 (one-time) [@$70/hr.]
 M2, & M3).
Record Retention \95\..............               5               1               1  5................................  140 [@$28/hr.]
                                    --------------------------------------------------------------------------------------------------------------------
    Total in First Year............                                                  3,261............................  173,676
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

    \92\ GO = Generator Owner; RE = Regional Entity. The respondents 
are generator owners, unless otherwise indicated.
    \93\ The estimates for cost per hour are derived as follows:
     $52/hour, the average of the salary plus benefits for 
an engineer and a forester, from Bureau of Labor and Statistics at 
http://bls.gov/oes/current/naics3_221000.htm.
     $70/hour, the average of the salary plus benefits for a 
manager and an engineer, from Bureau of Labor and Statistics at 
http://bls.gov/oes/current/naics3_221000.htm.
     $28/hour, based on a Commission staff study of record 
retention burden cost.
    \94\ Number of respondents includes 88 generator owners, who may 
be subject to the recordkeeping and reporting burdens of FAC-003 for 
the first time, and 8 Regional Entities, who may have a slight 
increase in recordkeeping and reporting requirements due to the 
increase in entities covered by the vegetation management standard.
    \95\ Regional Entities may have a de minimis increase in burden 
due to the increase in the number of entities potentially subject to 
the revised standard; that burden has been rolled into the estimated 
Average Burden Hours per Response.
---------------------------------------------------------------------------

    Title: Mandatory Reliability Standards for the Bulk-Power System.
    Action: Proposed revisions to FERC-725M.
    OMB Control No.: 1902-0263.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time, annual, and quarterly.
    Necessity of the Information: The revisions to the four Reliability 
Standards noted above are part of the implementation of the 
Congressional mandate of the Energy Policy Act of 2005, to develop 
mandatory and enforceable Reliability Standards to better ensure the 
reliability of the nation's Bulk-Power System.
    Internal Review: The Commission has reviewed the revisions to the 
four Reliability Standards and made a determination that its action is 
necessary to implement section 215 of the FPA. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimate associated with the 
information requirements.
    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 [Attention: 
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 estimates, please send your 
comments to the Commission, and 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 include Docket 
Number RM12-16, FERC-725M and OMB Control Number 1902-0263.

IV. Regulatory Flexibility Act Certification

    67. The Regulatory Flexibility Act of 1980 (RFA) \96\ generally 
requires a description and analysis of proposed rules that will have 
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 rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's (SBA's) Office of Size 
Standards develops the numerical definition of a small business.\97\ 
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.\98\
---------------------------------------------------------------------------

    \96\ 5 U.S.C. 601-612 (2006).
    \97\ 13 CFR 121.101 (2013).
    \98\ 13 CFR 121.201, Sector 22, Utilities & n.1.
---------------------------------------------------------------------------

    68. Reliability Standards FAC-001-1, FAC-003-3, PRC-004-2.1a, and 
PRC-005-1.1b will help to ensure that generator interconnection 
facilities are properly maintained and operated. The number of small 
business entities affected is expected to be small, because FAC-001-1 
will apply only to the small subset of generator owners that have 
executed an agreement to interconnect with a third party, and FAC-003-3 
will only affect generator owners with overhead transmission lines 
that: (1) Are operated at 200 kV or higher, or, are elements of an IROL 
or of a Major WECC Transfer Path, and (2) are longer than one mile or 
lacking in clear sightlines to the point of interconnection with the 
host transmission system.\99\ Comparison of the NERC Compliance 
Registry with data submitted to the Energy Information Administration 
on Form EIA-861 indicates that, of the 881 generator owners in the 
United States

[[Page 58458]]

registered by NERC, 49 qualify as small businesses.\100\ Of these, only 
five entities (about ten percent of the small entities) are expected to 
have qualifying interconnection facilities.
---------------------------------------------------------------------------

    \99\ Some of the standards may also affect Regional Entities; 
however, they do not qualify as small entities.
    \100\ See NERC Compliance Registry as of July 30, 2013; U.S. 
Energy Information Administration Form EIA-861--Annual Electric 
Power Industry Report, Preliminary Data for 2012 (released August 
15, 2013).
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    69. For the number of small generator owners that do have 
applicable facilities, the primary cost increase is expected to be in 
documentation, recordkeeping, and reporting burdens as discussed above. 
In addition, we estimate that for each of the estimated five small 
generator owners there will be an additional cost for the two hours to 
perform the annual inspection of the lines (at $47.00 per hour,\101\ or 
an additional $94.00 per owner annually). Therefore, the estimated cost 
in the first year for the increased data collection and retention for 
these entities is approximately $3,144.00 per entity ($3,050.00 for the 
one-time and recurring reporting and record retention requirements from 
the table above plus $94.00 for the annual inspection of the line). In 
subsequent years, after completion of the one-time recordkeeping or 
reporting requirements, the cost will be reduced. Based on the above, 
the Commission does not consider the costs associated with NERC's 
revisions to the four Reliability Standards to constitute a significant 
economic impact for small entities, because it should not represent a 
significant percentage of an affected small entity's operating budget. 
Accordingly, the Commission certifies that the revised requirements set 
forth in the four Reliability Standards will not have a significant 
economic impact on a substantial number of small entities, and no 
regulatory flexibility analysis is required.
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    \101\ This wage figure is taken from the Bureau of Labor and 
Statistics at http://bls.gov/oes/current/naics3.221000.htm.
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V. Environmental Analysis

    70. 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.\102\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\103\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
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    \102\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \103\ 18 CFR 380.4(a)(2)(ii).
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VI. 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 the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    72. 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.
    73. 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.

VII. Effective Date and Congressional Notification

    74. These regulations are effective November 25, 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. The Commission will submit 
this Final Rule to both houses of Congress and the Government 
Accountability Office.

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

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

Appendix

Commenters

American Public Power Association (APPA)
American Wind Energy Association (AWEA)
Bonneville Power Administration (BPA)
BP Wind Energy North America, Inc. (BP Wind Energy)
City of Alameda, California (Alameda)
California Department of Water Resources State Water Project (CDWR)
Dominion Resources Services, Inc. (Dominion)
Electric Power Supply Association and Electricity Consumers Resource 
Council (EPSA/ELCON)
E.ON Climate & Renewables North America, LLC (E.ON Renewables)
International Transmission Company d/b/a ITC Transmission, Michigan 
Electric
Transmission Company, LLC, ITC Midwest LLC and ITC Great Plains LLC 
(ITC)
Louisville Gas and Electric Company, Kentucky Utilities Corporation, 
Lower Mount Bethel Energy, LLC, PPL Brunner Island, LLC, PPL 
Electric Utilities Corporation, PPL EnergyPlus, LLC, PPL Holtwood, 
LLC, PPL Ironwood, LLC, PPL Martins Creek, LLC, PPL Montana, LLC, 
PPL Montour, LLC, and PPL Susquehanna, LLC (PPL)
North American Electric Reliability Corporation (NERC)
Transmission Dependent Utility Systems (TDU Systems)
[FR Doc. 2013-23180 Filed 9-23-13; 8:45 am]
BILLING CODE 6717-01-P


