
[Federal Register Volume 79, Number 123 (Thursday, June 26, 2014)]
[Proposed Rules]
[Pages 36269-36273]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14850]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM14-7-000]


Modeling, Data, and Analysis Reliability Standards

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: Pursuant to the Federal Power Act, the Commission proposes to 
approve Modeling, Data, and Analysis Reliability Standard MOD-001-2 
developed by the North American Electric Reliability Corporation, which 
the Commission has certified as the Electric Reliability Organization 
responsible for developing and enforcing mandatory Reliability 
Standards.

DATES: Comments are due August 25, 2014.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:

Michael Gandolfo (Technical Information), Office of Electric 
Reliability, Federal Energy Regulatory Commission, 888 First Street 
NE., Washington, DC 20426, Telephone: (202) 502-6817, 
Michael.Gandolfo@ferc.gov
Robert T. Stroh (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-8473, Robert.Stroh@ferc.gov

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215(d) of the Federal Power Act (FPA),\1\ 
the Commission proposes to approve Reliability Standard MOD-001-2 
(Modeling, Data, and Analysis) developed by the North American Electric 
Reliability Corporation (NERC), which the Commission has certified as 
the Electric Reliability Organization (ERO) responsible for developing 
and enforcing mandatory Reliability Standards. Reliability Standard 
MOD-001-2 addresses the reliability issues associated with 
determinations of available transfer capability (ATC) and available 
flowgate capability (AFC). The Commission also proposes to approve the 
associated violation risk factors and violation severity levels and 
NERC's proposed retirement of the currently effective Reliability 
Standards MOD-001-1a, MOD-004-1, MOD-008-1, MOD-028-2, MOD-029-1a, and 
MOD-030-2.
---------------------------------------------------------------------------

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

I. Background

    2. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, which are 
subject to Commission review and approval. Once approved, the 
Reliability Standards are enforced by the ERO, subject to Commission 
oversight, or by the Commission independently.

Development of ATC and AFC in Order Nos. 888, 889 and 890

    3. NERC developed the currently-effective Reliability Standards 
MOD-001-1a, MOD-004-1, MOD-008-1, MOD-028-2, MOD-029-1a, and MOD-030-2 
(Existing MOD A Standards) based on the obligation for transmission 
service providers to determine ATC and AFC, as those terms were 
introduced in Order Nos. 888 and 889.\2\ Although Order Nos. 888 and 
889 obligated each public utility to calculate and post ATC, formal 
methods for calculating ATC or AFC did not exist, nor did the 
Commission mandate the use of specific methodologies.
---------------------------------------------------------------------------

    \2\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, FERC Stats. & Regs. ] 31,036 (1996), order on reh'g, 
Order No. 888-A, FERC Stats. & Regs. ] 31,048, order on reh'g, Order 
No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C, 
82 FERC ] 61,046 (1998), aff'd in relevant part sub nom. 
Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. 
Cir. 2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002). Open 
Access Same-Time Information System (Formerly Real-Time Information 
Networks) and Standards of Conduct, Order No. 889, 61 FR 21737 (May 
10, 1996), FERC Stats. & Regs. ] 31,035, at 31,749 (1996), order on 
reh'g, Order No. 889-A, FERC Stats. & Regs. ] 31,049, order on 
reh'g, Order No. 889-B, 81 FERC ] 61,253 (1997).
---------------------------------------------------------------------------

    4. In February 2007 the Commission issued Order No. 890 and, among 
other things, sought to standardize the manner in which ATC/AFC was 
calculated.\3\ The Commission also noted that ATC/AFC calculations 
raise reliability issues, namely, the need for a transmission provider 
to know of its neighbors' system conditions affecting its own ATC 
values. As a result of this reliability concern, the Commission found 
that the proposed ATC reforms were also supported by FPA section 215, 
through which the Commission has the authority to direct the ERO to 
submit a Reliability Standard that addresses a specific matter.\4\ 
Thus, the Commission in Order No. 890 directed the development of 
Reliability Standards, using the ERO's Reliability Standards 
development process, that provide for consistency and transparency in 
the methodologies used by transmission owners to calculate ATC. The 
Commission found that, if all of the ATC components and certain data 
inputs and certain assumptions are consistent, the ATC calculation 
methodologies would produce predictable and sufficiently accurate, 
consistent, equivalent and replicable results.\5\
---------------------------------------------------------------------------

    \3\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, FERC Stats. & Regs. ] 31,241, 
at P 68, order on reh'g, Order No. 890-A, FERC Stats. & Regs. ] 
31,261 (2007), order on reh'g, Order No. 890-B, 123 FERC ] 61,299 
(2008), order on reh'g, Order No. 890-C, 126 FERC ] 61,228, order on 
clarification, Order No. 890-D, 129 FERC ] 61,126 (2009).
    \4\ See 16 U.S.C. 824o(d)(5).
    \5\ Order No. 890, FERC Stats. & Regs. ] 31,241 at P 210.
---------------------------------------------------------------------------

Order Nos. 693 and 729

    5. On March 16, 2007, the Commission issued Order No. 693, 
approving 83 of the 107 Reliability Standards filed by NERC in April 
2006.\6\ Of the 83 approved Reliability Standards, the Commission 
approved ten MOD Reliability Standards. In addition, the Commission 
directed NERC to prospectively modify nine of the ten approved MOD 
Reliability

[[Page 36270]]

Standards to be consistent with the requirements of Order No. 890.\7\ 
In Order No. 693, the Commission reiterated its concerns with respect 
to ATC articulated in Order No. 890 and directed NERC and the industry 
to develop Reliability Standards that provide for consistency and 
transparency in the methodologies used by transmission providers to 
calculate ATC.\8\ The Commission directed public utilities, working 
through the NERC Reliability Standards and North American Energy 
Standards Board (NAESB) business practices development processes, to 
produce solutions to implement the ATC-related reforms adopted by the 
Commission.
---------------------------------------------------------------------------

    \6\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order 
No. 693-A, 120 FERC ] 61,053 (2007).
    \7\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 1010.
    \8\ Id. PP 1020-1034.
---------------------------------------------------------------------------

    6. In response to the requirements of Order No. 890 and related 
directives of Order No. 693, NERC developed the Existing MOD A 
Standards, which the Commission approved in Order No. 729.\9\ The 
Existing MOD A Standards standardized the manner in which ATC/AFC is 
determined and required the documentation and sharing of ATC/AFC 
methodologies. In approving the Existing MOD A Reliability Standards in 
Order No. 729, the Commission also directed NERC to modify certain 
aspects of those standards.
---------------------------------------------------------------------------

    \9\ Mandatory Reliability Standards for the Calculation of 
Available Transfer Capability, Capacity Benefit Margins, 
Transmission Reliability Margins, Total Transfer Capability, and 
Existing Transmission Commitments and Mandatory Reliability 
Standards for the Bulk-Power System, Order No. 729, 129 FERC ] 
61,155 (2009), order on clarification, Order No. 729-A, 131 FERC ] 
61,109 (2010), order on reh'g, Order No. 729-B, 132 FERC ] 61,027 
(2010).
---------------------------------------------------------------------------

II. NERC Petition

    7. NERC states that proposed Reliability Standard MOD-001-2 
replaces, consolidates and improves upon the Existing MOD A Standards 
by establishing a framework that comprehensively addresses the 
reliability concerns raised in Order Nos. 693, 890 and 729. According 
to NERC, ATC and AFC values ``are commercial in nature, representing 
the amount of unused transmission capacity that a Transmission Service 
Provider is willing to make available for sale to third parties. The 
purpose of proposed MOD-001-2 is to help ensure that determinations of 
ATC and AFC are accomplished in a manner that supports the reliable 
operation of the Bulk-Power System.'' \10\ NERC explains that the 
consolidation of the reliability-based requirements of the currently-
effective MOD A Standards into a single standard focused exclusively on 
requirements necessary to protect reliability ``is consistent with the 
ERO's jurisdiction over reliability matters and NERC's primary mission 
to develop standards that support the reliability operation of the 
Bulk-Power System.''\11\ With regard to other provisions of the 
Existing MOD A Standards, NERC recognizes that:
---------------------------------------------------------------------------

    \10\ Petition at 2.
    \11\ Id. at 27.

    Certain of the requirements from the Existing MOD A Standards 
that are not included in the proposed Reliability Standard may be 
necessary for market or commercial purposes. Accordingly, NERC 
formally requested that NAESB, which administers business practice 
standards for the electric industry, consider whether any of the 
``retired'' requirements are appropriate for incorporation into 
NAESB's WEQ Standards to help maintain a non-discriminatory market 
for transmission service. NERC understands that NAESB, working 
through its business practice development process, is considering 
whether to incorporate into its WEQ Standards those elements from 
the Existing MOD A Standards, if any, that relate to commercial or 
business practices.\12\
---------------------------------------------------------------------------

    \12\ Id.

    8. NERC explains that proposed Reliability Standard MOD-001-2 helps 
ensure that: (1) ATC/AFC and total transfer capability and total 
flowgate capacity determinations account for system limits and relevant 
system conditions; (2) ATC/AFC, total transfer capability, total 
flowgate capacity, capacity benefit margin \13\ and transmission 
reliability margin \14\ methodologies are documented and available to 
any registered entity with a demonstrated reliability need for such 
information; (3) the data supporting those determinations are available 
to those entities who need such data to conduct their own 
determinations; and (4) any entity with a reliability need has a 
mechanism for requesting that the transmission service provider or the 
transmission operator respond to requests for clarifications regarding 
their ATC/AFC, total transfer capability, total flowgate capacity, 
capacity benefit margin and transmission reliability margin 
methodologies.
---------------------------------------------------------------------------

    \13\ Capacity benefit margin is a component of ATC/AFC and 
``represents the amount of transmission capacity that needs to be 
set aside for Load Serving Entities (LSEs) to meet certain 
generation reliability requirements.'' Petition at 3.
    \14\ Transmission reliability margin is a component of ATC/AFC 
and ``represents the amount of transmission transfer capacity that 
needs to be set aside to establish margins for system reliability.'' 
Id.
---------------------------------------------------------------------------

    9. Further, NERC states that the proposed Reliability Standard 
addresses the Commission directives in Order No. 729, to the extent 
that the directives relate to the reliability requirements retained in 
proposed MOD-002-1.\15\ According to NERC, NAESB may consider whether 
Commission directives that relate to requirements not retained in the 
proposed Reliability Standard are appropriately addressed in its 
Wholesale Electric Quadrant (WEQ) Standards.
---------------------------------------------------------------------------

    \15\ Id. at 6, 28-37.
---------------------------------------------------------------------------

    10. NERC proposes six requirements in proposed Reliability Standard 
MOD-001-2.\16\ Requirements R1 through R4 require documentation of the 
methodologies for determining ATC/AFC, total transfer capability, total 
flowgate capacity, capacity benefit margin and transmission reliability 
margin, respectively. Requirements R5 and R6 address information and 
data sharing. In particular, Requirement R5 requires each transmission 
operator and transmission service provider to provide, upon request, a 
written response to any request for clarification of its methodologies 
described in Requirements R1 through R4. Requirement R6 provides a data 
sharing mechanism that allows each transmission operator and 
transmission service provider to access the best available data (e.g., 
load forecasts, expected dispatch, planned outages) for use in 
methodologies described in in Requirements R1 through R4.
---------------------------------------------------------------------------

    \16\ Proposed Reliability Standard MOD-001-2 is not attached to 
the NOPR. The complete text of the Reliability Standard is available 
on the Commission's eLibrary document retrieval system in Docket No. 
RM14-7-000 and is posted on the ERO's Web site, available at http://www.nerc.com.

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

[[Page 36271]]

Implementation Plan

    11. NERC requests that the Commission approve proposed Reliability 
Standard MOD-001-2 and the retirement of the Existing MOD A Standards 
effective on the first day of the first calendar quarter that is 18 
months after the date that the proposed standard is approved by the 
Commission.\17\ NERC states that the proposed implementation period 
``is intended to provide NAESB sufficient time to include in its WEQ 
Standards, prior to the effective date of proposed MOD-001-2 and the 
retirement of the Existing MOD A Standards, those requirements from the 
Existing MOD A Standards, if any, that relate to commercial or business 
practices and are not included in proposed Reliability Standard MOD-
001-2.'' \18\ NERC adds that if NAESB and its members determine that 
requirements from the Existing MOD A Standards need to be incorporated 
into the WEQ Standards, 18 months will provide NAESB time, working 
through its business practice development process, to adopt revised WEQ 
Standards and for the Commission to incorporate by reference those 
revised WEQ Standards into its regulations. NERC states that if the 
proposed implementation period does not provide NAESB sufficient time 
to consider the issues, ``NERC is committed to working with NAESB and 
Commission staff to address any timing issues.'' \19\ Further, NERC 
states that it has requested that NAESB adopt any revised WEQ Standards 
to become effective on the same date that the proposed MOD-001-2 and 
the retirement of the Existing MOD A Standards will become effective.
---------------------------------------------------------------------------

    \17\ See Petition at 38 and Exhibit B (Implementation Plan) at 
1.
    \18\ Id. at 38.
    \19\ Id.
---------------------------------------------------------------------------

III. Discussion

    12. Pursuant to section 215(d)(2) of the FPA, the Commission 
proposes to approve Reliability Standard MOD-001-2 as just, reasonable, 
not unduly discriminatory or preferential, and in the public interest. 
We also propose to approve the associated violation risk factors and 
violation severity levels as well as the retirement of the currently-
effective MOD A Standards as requested by NERC.
    13. Proposed Reliability Standard MOD-001-2 appears to adequately 
address the Commission concerns and directives in Order Nos. 890, 693 
and 729. In addition, it appears that proposed Reliability MOD-001-2 
will enhance reliability by imposing mandatory requirements governing 
ATC calculations, thereby providing greater transparency to the 
methodologies used for the reliability components of the ATC 
equation.\20\ We also believe that there is merit in NERC's proposal to 
consolidate the reliability-based requirements of the Existing MOD A 
Standards into a single standard, while coordinating with NAESB to 
develop NAESB WEQ Standards that pertain to the commercial aspects of 
ATC calculations. We seek comment on this aspect of NERC's proposal.
---------------------------------------------------------------------------

    \20\ See, e.g., Petition at 17, 22, 24, 26, and 30-31.
---------------------------------------------------------------------------

    14. With regard to the implementation plan, NERC explains that the 
proposed effective date--the first day of the first calendar quarter 
that is 18 months after Commission approval--is designed to allow NAESB 
to develop related commercial standards that would take effect 
concurrently with MOD-001-2. While NERC's implementation schedule 
appears reasonable, we are concerned about a potential ``gap'' should 
the retirement of the currently-effective MOD A Standards occur prior 
to effective date of corresponding NAESB WEQ business practices. 
Accordingly, we seek comment from NAESB and others whether 18 months 
from the date of Commission approval provides adequate time for NAESB 
to develop related business practices associated with ATC calculations 
or whether additional time may be appropriate to better assure 
synchronization of the effective dates for the proposed Reliability 
Standard and related NAESB practices. Further, while NERC states that 
it is ``committed to working with NAESB and Commission staff to address 
any timing issues,'' \21\ we seek further elaboration on specific 
actions NERC could take to assure synchronization of the effective 
dates.
---------------------------------------------------------------------------

    \21\ Petition at 38.
---------------------------------------------------------------------------

IV. Information Collection Statement

    15. The collection of information contained in this Notice of 
Proposed Rulemaking is subject to review by the Office of Management 
and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act 
of 1995.\22\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\23\ Upon approval of a 
collection(s) of information, OMB will assign an OMB control number and 
an expiration date. Respondents subject to the filing requirements of a 
rule will not be penalized for failing to respond to these collections 
of information unless the collections of information display a valid 
OMB control number.
---------------------------------------------------------------------------

    \22\ 44 U.S.C. 3507(d) (2012).
    \23\ 5 CFR 1320.11 (2013).
---------------------------------------------------------------------------

    16. We solicit comments on the need for this information, whether 
the information will have practical utility, the accuracy of the burden 
estimates, ways to enhance the quality, utility, and clarity of the 
information to be collected or retained, and any suggested methods for 
minimizing respondents' burden, including the use of automated 
information techniques. Specifically, the Commission asks that any 
revised burden or cost estimates submitted by commenters be supported 
by sufficient detail to understand how the estimates are generated.
    17. This notice proposes to approve Reliability Standard MOD-001-2 
and to retire Reliability Standards MOD-001-1a, MOD-004-1, MOD-008-1, 
MOD-028-2, MOD-029-1a, and MOD-030-2. Proposed Reliability Standard 
MOD-001-2 will ensure that ATC calculations are determined in a manner 
that supports the reliable operation of the Bulk-Power System and that 
the methodology and data underlying those determinations are disclosed 
to those registered entities that need such information for reliability 
purposes.
    Public Reporting Burden: Proposed Reliability Standard MOD-001-2 
does not require responsible entities to file information with the 
Commission. However, the Reliability Standard requires applicable 
entities to develop and maintain certain information, subject to audit 
by a regional entity. In particular, transmission owners and 
transmission service providers, with the exception of transmission 
owners and transmission service providers within the Electric 
Reliability Council of Texas (ERCOT), must ``have evidence'' to show 
that methodologies of total flowgate capability or total transfer 
capability and AFC and ATC, as well as capacity benefit margin and 
transmission reliability margin methodologies. Our estimate below 
regarding the number of respondents is based on the NERC compliance 
registry as of March 26, 2014. According to the NERC compliance 
registry, NERC has registered 170 transmission operators (excluding 
transmission operators within ERCOT) and 93 transmission service 
providers (excluding transmission service providers in ERCOT). However, 
under NERC's compliance registration program, entities may be 
registered for multiple functions, so these numbers incorporate some 
double counting. The number of unique entities responding will be 
approximately 186 entities registered as a transmission operator or a 
transmission service provider

[[Page 36272]]

(excluding transmission operators and transmission service providers in 
ERCOT). The Commission estimates the annual reporting burden and cost 
as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Annual  number
                                      Number and  type of    of  responses   Total  number   Average  burden and    Total annual  burden     Cost per
                                          respondents             per        of  responses    cost per  response      hours  and total      respondent
                                                              respondent                                                annual cost            \24\
                                     (1)..................             (2)     (1) * (2) =  (4)..................  (3) * (4) = (5)......       (5) / (1)
                                                                                       (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
(One-time) Review and documentation  170 (TOP)............               1             170  20 hrs. and $1192....  3,400 hours and                 $1192
 of methodology for TFC or TTC and                                                                                  $202,708.
 TRM.
(One-time) Review and documentation  93 (TSP).............               1              93  20 hrs. and $1192....  1,860 hours and                 $1192
 of methodology for AFC or ATC and                                                                                  $110,893.
 CBM.
(On-going) Record retention (of      170 (TOP) + 93 (TSP)                1             186  2 hrs. and $57.90....  372 hours and $10,769          $57.90
 methodology) and requests for data.  \25\.
(On-going) Retirement of             180 (TP) + 492 (LSE)                1            -551  -3 hrs. and -$178.86.  -1,653 hours and -           -$178.86
 Transmission Planner, Load-Serving   + 107 (BA) \26\.                                                              $98,551.86.
 Entity, and Balancing Authority
 applicability.
(On-going) Retirement of non-        170 (TOP) + 93 (TSP).               1            -186  -16 hrs. and -$953.92  -2,976 and -                 -$953.52
 reliability function requirements.                                                                                 $177,429.12.
    Total..........................  .....................            -288  ..............  1003, $48,389.02.....
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

    \24\ The estimated hourly costs (salary plus benefits) are based 
on Bureau of Labor and Statistics (BLS) information (available at 
http://bls.gov/oes/current/naics3_221000.htm#17-0000) for an 
electrical engineer ($59.62/hour for review and documentation), and 
for a file clerk ($28.95/hour for record retention).
    \25\ 170 TOPs and 93 TSPs result in 186 unique and separate 
respondents for the record retention requirement.
    \26\ 180 TPs, 492 LSEs, and 107 BAs result in 551 unique and 
separate respondents.
---------------------------------------------------------------------------

    Title: Mandatory Reliability Standards for the Bulk-Power System: 
MOD Reliability Standards.
    Action: Proposed FERC-725L.
    OMB Control No: 1902-0261
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time and ongoing.
    Necessity of the Information: Reliability Standard MOD-001-2, if 
adopted, would implement 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. 
Specifically, the purpose of the proposed Reliability Standard is to 
ensure that determinations of ATC are determined in a manner that 
supports the reliable operation of the Bulk-Power System and that the 
methodology and data underlying those determinations are disclosed to 
those registered entities that need such information for reliability 
purposes. The proposed Reliability Standard requires entities to 
maintain records subject to review by the Commission and NERC to ensure 
compliance with the Reliability Standard.
    Internal Review: The Commission has reviewed the requirements 
pertaining to the proposed Reliability Standard for the Bulk-Power 
System and determined that the proposed requirements are necessary to 
meet the statutory provisions of the Energy Policy Act of 2005. These 
requirements conform to the Commission's plan for efficient information 
collection, communication and management within the energy industry. 
The Commission has assured itself, by means of internal review, that 
there is specific, objective support for the burden estimates 
associated with the information requirements.
    18. 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].
    19. Comments concerning the information collections proposed in 
this NOPR and the associated burden estimates should be sent to the 
Commission in these dockets and may also be sent to the Office of 
Management and Budget, Office of Information and Regulatory Affairs 
[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 
For security reasons, comments should be sent by email to OMB at the 
following email address: oira_submission@omb.eop.gov. Please reference 
FERC-725Q and the docket numbers of this Notice of Proposed Rulemaking 
(Docket No. RM14-7-000) in your submission.

V. Regulatory Flexibility Act Certification

    20. The Regulatory Flexibility Act of 1980 (RFA) \27\ 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.\28\ 
The SBA recently revised its size standard for electric utilities 
(effective January 22, 2014) to a standard based on the number of 
employees, including affiliates (from a standard based on megawatt 
hours).\29\ Under SBA's new size standards, generator owners, 
distribution providers, and transmission owners likely come under one 
of the following categories and associated size thresholds: \30\
---------------------------------------------------------------------------

    \27\ 5 U.S.C. 601-612.
    \28\ 13 CFR 121.101 (2013).
    \29\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77343 (12/23/2013).
    \30\ 13 CFR 121.201, Sector 22, Utilities.

 Hydroelectric power generation, at 500 employees

[[Page 36273]]

 Fossil fuel electric power generation, at 750 employees
 Nuclear power generation, at 750 employees
 Other electric power generation (e.g. solar, wind, geothermal, 
and others), at 250 employees
 Electric bulk power transmission and control, at 500 employees
 Electric power distribution, at 1,000 employees.

    21. Based on U.S. economic census data,\31\ the approximate 
percentages of small firms in the above categories varies from 24 
percent to 94 percent. However, currently the Commission does not have 
information on how the economic census data compare with entities 
registered with NERC and is unable to estimate the number of small 
transmission service providers and transmission operators using the new 
SBA definitions. Regardless, the Commission recognizes that the rule 
will likely impact small transmission service providers and 
transmission operators and estimates the economic impact on each entity 
below.
---------------------------------------------------------------------------

    \31\ Data and further information are available from SBA 
available at http://www.sba.gov/advocacy/849/12162.
---------------------------------------------------------------------------

    22. Proposed Reliability Standard MOD-001-2 will serve to enhance 
reliability by imposing mandatory requirements governing total flowgate 
capability or total transfer capability and AFC or ATC methodologies, 
as well as capacity benefit margin and transmission reliability margin 
methodologies, to be used in modeling. The Commission estimates that 
each of the small entities to whom proposed Reliability Standard MOD-
001-2 applies will incur one-time compliance costs of $1,192 (i.e. the 
cost of drafting methodologies), plus paperwork and record retention 
costs of $57.90 (annual ongoing).\32\ Per entity, the total one-time 
implementation costs are estimated to be $1,192 (including paperwork 
and non-paperwork costs) and the annual ongoing costs are estimated to 
be $57.90.
---------------------------------------------------------------------------

    \32\ The one-time paperwork-related implementation cost estimate 
is based on a burden of 20 hours at $59.62/hour, and the annual 
record-keeping cost estimate is based on a burden of 2 hours at 
$28.95/hour. See supra at 21 and P 1 note/39.
---------------------------------------------------------------------------

    23. Furthermore, the removal of applicable entities from the 
proposed retirement of Reliability Standards reduces the total burden 
on transmission providers, load-serving entities, and balancing 
authorities for an annual savings of $238.48 per entity.\33\ 
Additionally, NERC proposes the retirement of several requirements 
because they do not have a reliability purpose for the transmission 
operators and transmission service providers. This retirement results 
in an annual savings of $1,192.40 per entity. The Commission does not 
consider the estimated costs per small entity to have a significant 
economic impact on a substantial number of small entities. Accordingly, 
the Commission certifies that this NOPR will not have a significant 
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \33\ $238.48 = $59.62 (hourly review and documentation cost) + 
$178.86 (cost per entity due to retirement of applicability of TPs, 
LSEs, and BAs.
---------------------------------------------------------------------------

VI. Environmental Analysis

    24. 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.\34\ 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.\35\ The actions proposed 
herein fall within this categorical exclusion in the Commission's 
regulations.
---------------------------------------------------------------------------

    \34\ Regulations Implementing the 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).
    \35\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

VII. Comment Procedures

    25. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due August 25, 2014. Comments must refer to 
Docket No. RM14-7-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    26. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    27. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    28. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    29. 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.
    30. 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.
    31. 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.

    By direction of the Commission.

    Issued: June 19, 2014.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-14850 Filed 6-25-14; 8:45 am]
BILLING CODE 6717-01-P


