
[Federal Register Volume 81, Number 102 (Thursday, May 26, 2016)]
[Proposed Rules]
[Pages 33441-33448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12428]


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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM16-7-000]


Disturbance Control Standard--Contingency Reserve for Recovery 
From a Balancing Contingency Event Reliability Standard

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Federal Energy Regulatory Commission proposes to approve 
Reliability Standard BAL-002-2 (Disturbance Control Standard--
Contingency Reserve for Recovery from a Balancing Contingency Event) 
submitted by the North American Electric Reliability Corporation 
(NERC). Proposed Reliability Standard BAL-002-2 is designed to ensure 
that applicable entities balance resources and demand and return their 
Area Control Error to defined values following a Reportable Balancing 
Contingency Event. In addition, the Commission proposes to direct NERC 
to modify Reliability Standard BAL-002-2 to address concerns related to 
the possible extension or delay of the periods for Area Control Error 
recovery and contingency reserve restoration. The Commission also 
proposes to direct NERC to address a reliability gap regarding megawatt 
losses above the most severe single contingency.

DATES: Comments are due July 25, 2016.

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:
    Enakpodia Agbedia (Technical Information), Office of Electric 
Reliability, Division of Reliability Standards, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
Telephone: (202) 502-6750, Enakpodia.Agbedia@ferc.gov.
    Mark Bennett (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-8524, Mark.Bennett@ferc.gov.

SUPPLEMENTARY INFORMATION: 1. Under section 215 of the Federal Power 
Act (FPA),\1\ the Commission proposes to approve proposed Reliability 
Standard BAL-002-2 (Disturbance Control Standard--Contingency Reserve 
for Recovery from a Balancing Contingency Event). The North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization (ERO), submitted proposed Reliability 
Standard BAL-002-2 for Commission approval. Proposed Reliability 
Standard BAL-002-2 applies to balancing authorities and reserve sharing 
groups. Proposed Reliability Standard BAL-002-2 is designed to ensure 
that these entities are able to recover from system contingencies by 
deploying adequate reserves to return their Area Control Error (ACE) to 
defined values and by replacing the capacity and energy lost due to 
generation or transmission equipment outages.\2\ In addition, the 
Commission proposes to approve eight new and revised definitions 
proposed by NERC for inclusion in the NERC Glossary of Terms Used in 
NERC Reliability Standards (NERC Glossary) and to retire currently-
effective Reliability Standard BAL-002-1 immediately prior to the 
effective date of proposed Reliability Standard BAL-002-2. The 
Commission also proposes to approve, with certain modifications, the 
associated violation risk factors and violation severity levels, and 
implementation plan.
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824(o). Proposed Reliability Standard BAL-002-2 is 
available on the Commission's eLibrary document retrieval system in 
Docket No. RM16-7-000 and on the NERC Web site, www.nerc.com.
    \2\ ACE is the instantaneous difference between a balancing 
authority's Net Actual and Scheduled Interchange, taking into 
account the effects of Frequency Bias, correction for meter error, 
and Automatic Time Error Correction, if operating in that mode. NERC 
Glossary of Terms Used in NERC Reliability Standards at 7 (updated 
April 20, 2016).
---------------------------------------------------------------------------

    2. Pursuant to section 215(d)(5) of the FPA,\3\ the Commission 
proposes to direct NERC to modify Reliability Standard BAL-002-2 to 
address concerns related to the possible extension or delay of the 
periods for ACE recovery and contingency reserve restoration. The 
Commission also proposes to direct NERC to address a reliability gap 
regarding megawatt losses above the most severe single contingency.
---------------------------------------------------------------------------

    \3\ 16 U.S.C. 824o(d)(5).
---------------------------------------------------------------------------

I. Background

A. Mandatory Reliability Standards and Order No. 693 Directives

    3. Section 215 of the FPA requires a Commission-certified Electric 
Reliability Organization (ERO) to develop mandatory and enforceable 
Reliability Standards that are subject to Commission review and 
approval. The Commission may approve, by rule or order, a proposed 
Reliability Standard or modification to a Reliability Standard if it 
determines that the Standard is just, reasonable, not unduly 
discriminatory or preferential and in the public interest.\4\ Once 
approved, the Reliability Standards may be enforced by NERC, subject to 
Commission oversight, or by the Commission independently.\5\ Pursuant 
to section 215 of the FPA, the Commission established a process to 
select and certify an ERO,\6\ and subsequently certified NERC.\7\
---------------------------------------------------------------------------

    \4\ Id. 824o(d)(2).
    \5\ Id. 824o(e).
    \6\ 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).
    \7\ 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).
---------------------------------------------------------------------------

    4. On March 16, 2007, the Commission issued Order No. 693, 
approving 83 of the 107 Reliability Standards filed by NERC, including 
Reliability Standard BAL-002-0.\8\ In

[[Page 33442]]

addition, pursuant to section 215(d)(5) of the FPA, the Commission 
directed the ERO to develop modifications to Reliability Standard BAL-
002-0 to: (1) Include a requirement that explicitly provides that 
demand side management may be used as a resource for contingency 
reserves; (2) develop a continent-wide contingency reserve policy; and 
(3) refer to the ERO rather than the NERC Operating Committee in 
Requirements R4.2 and R6.2.\9\ On January 10, 2011, the Commission 
approved Reliability Standard BAL-002-1, which addressed the third 
directive described above.\10\
---------------------------------------------------------------------------

    \8\ 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).
    \9\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 356.
    \10\ North American Electric Reliability Corp., 134 FERC ] 
61,015 (2011).
---------------------------------------------------------------------------

B. Proposed Reliability Standard BAL-002-2

    5. On January 29, 2016, NERC filed a petition seeking approval of 
proposed Reliability Standard BAL-002-2; eight new or revised 
definitions to be added to the NERC Glossary; and the associated 
violation risk factors and violation severity levels, effective date, 
and implementation plan.\11\ NERC states that the proposed Reliability 
Standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest because it satisfies the 
factors set forth in Order No. 672, which the Commission applies when 
reviewing a proposed Reliability Standard.\12\ NERC also contends that 
proposed Reliability Standard BAL-002-2 addresses the outstanding 
directives from Order No. 693 regarding the use of demand side 
management as a resource for contingency reserve and the development of 
a continent-wide contingency reserve policy.
---------------------------------------------------------------------------

    \11\ The eight proposed new and revised definitions for 
inclusion in the NERC Glossary are for the following terms: 
Balancing Contingency Event, Most Severe Single Contingency, 
Reportable Balancing Contingency Event, Contingency Event Recovery 
Period, Contingency Reserve Restoration Period, Pre-Reporting 
Contingency Event ACE Value, Reserve Sharing Group Reporting ACE, 
and Contingency Reserve. NERC Petition at 28-34.
    \12\ NERC Petition at 13 and Ex. F (Order No. 672 Criteria).
---------------------------------------------------------------------------

    6. NERC proposes to consolidate six requirements in currently-
effective Reliability Standard BAL-002-1 into three requirements. NERC 
contends that proposed Reliability Standard BAL-002-2 improves upon 
existing Reliability Standard BAL-002-1 because ``it clarifies 
obligations associated with achieving the objective of BAL-002 by 
streamlining and organizing the responsibilities required therein, 
enhancing the obligation to maintain reserves, and further defining 
events that predicate action under the standard.'' \13\ NERC also 
maintains that proposed Reliability Standard BAL-002-2 ``address[es] 
and supersede[s]'' the proposed interpretation previously submitted by 
NERC (i.e., of Reliability Standard BAL-002-1a) and now pending in 
Docket No. RM13-6-000.\14\
---------------------------------------------------------------------------

    \13\ Id. at 13.
    \14\ Id. at 1. On February 12, 2013, NERC filed a proposed 
interpretation of Reliability Standard BAL-002-1 that construed the 
Reliability Standard so that the 15 minute ACE recovery period would 
not apply to events of a magnitude exceeding an entity's most severe 
single contingency. In a NOPR issued on May 16, 2013, the Commission 
proposed to remand the proposed interpretation on procedural 
grounds. Electric Reliability Organization Interpretation of 
Specific Requirements of the Disturbance Control Performance 
Standard, 143 FERC ] 61,138 (2013). The rulemaking on the proposed 
interpretation is pending. In the petition in the immediate 
proceeding, NERC states that, upon approval of proposed Reliability 
Standard BAL-002-2, NERC will file a notice of withdrawal of the 
proposed interpretation. NERC Petition at 1.
---------------------------------------------------------------------------

    7. Proposed Requirement R1 requires a responsible entity, either a 
balancing authority or reserve sharing group, experiencing a Reportable 
Balancing Contingency Event to deploy its contingency reserves to 
recover its ACE to certain prescribed values within the Contingency 
Event Recovery Period of 15 minutes.\15\ However, proposed Reliability 
Standard BAL-002-2 relieves responsible entities from strict compliance 
with the existing time periods for ACE recovery and contingency reserve 
restoration ``to ensure responsible entities retain flexibility to 
maintain service to Demand, while managing reliability, and to avoid 
duplication with other Reliability Standards.'' \16\
---------------------------------------------------------------------------

    \15\ Reportable Balancing Contingency Event means: ``Any 
Balancing Contingency Event occurring within a one-minute interval 
of an initial sudden decline in ACE based on EMS scan rate data that 
results in a loss of MW output less than or equal to the Most Severe 
Single Contingency, and greater than or equal to the lesser amount 
of: (i) 80% of the Most Severe Single Contingency, or (ii) the 
amount listed below for the applicable Interconnection. Prior to any 
given calendar quarter, the 80% threshold may be reduced by the 
responsible entity upon written notification to the Regional 
Entity.'' NERC Petition at 30. Contingency Event Recovery Period 
means: ``A period that begins at the time that the resource output 
begins to decline within the first one-minute interval of a 
Reportable Balancing Contingency Event, and extends for fifteen 
minutes thereafter.'' Id. at 32.
    \16\ Id. at 4.
---------------------------------------------------------------------------

    8. Specifically, Requirement R1, Part 1.3.1 provides that a 
balancing authority or reserve sharing group is not subject to 
Requirement R1, Part 1.1 if it: (1) Is experiencing a Reliability 
Coordinator declared Energy Emergency Alert Level; (2) is utilizing its 
contingency reserve to mitigate an operating emergency in accordance 
with its emergency Operating Plan, and (3) has depleted its contingency 
reserve to a level below its most severe single contingency (MSSC).
    9. In addition, under Requirement R1, Part 1.3.2, a balancing 
authority or reserve sharing group is not subject to Requirement R1, 
Part 1.1 if the balancing authority or reserve sharing group 
experiences: (1) Multiple Contingencies where the combined megawatt 
(MW) loss exceeds its most severe single contingency and that are 
defined as a single Balancing Contingency Event or (2) multiple 
Balancing Contingency Events within the sum of the time periods defined 
by the Contingency Event Recovery Period and Contingency Reserve 
Restoration Period whose combined magnitude exceeds the Responsible 
Entity's most severe single contingency.
    10. Proposed Requirement R2 provides that each responsible entity:

shall develop, review and maintain annually, and implement an 
Operating Process as part of its Operating Plan to determine its 
Most Severe Single Contingency and to make preparations to have 
Contingency Reserve equal to, or greater than the Responsible 
Entity's Most Severe Single Contingency available for maintaining 
system reliability.

    NERC explains that Requirement R2 requires responsible entities to 
demonstrate that their process for calculating their most severe single 
contingency ``surveys all contingencies, including single points of 
failure, to identify the event that would cause the greatest loss of 
resource output used by the [reserve sharing group or balancing 
authority] to meet Firm Demand.'' \17\ NERC further states that 
Requirement R2 supports Requirements R1 and R3 in proposed Reliability 
Standard BAL-002-2 ``as these requirements rely on proper calculation 
of [most severe single contingency].'' \18\
---------------------------------------------------------------------------

    \17\ Id. at 25.
    \18\ Id. NERC provides examples of how responsible entities may 
calculate the most severe single contingency in the petition. See 
NERC Petition, Ex. B (Calculating Most Severe Single Contingency).
---------------------------------------------------------------------------

    11. Proposed Requirement R3 provides that ``each Responsible 
Entity, following a Reportable Balancing Contingency Event, shall 
restore its Contingency Reserve to at least its Most Severe Single 
Contingency, before the end of the Contingency Reserve Restoration 
Period [90 minutes], but any Balancing Contingency Event that occurs 
before the end of a Contingency Reserve Restoration Period resets the 
beginning of the Contingency Event Recovery Period.''
    12. NERC explains that the revised language in the consolidated 
requirements in proposed Reliability

[[Page 33443]]

Standard BAL-002-2 will improve efficiency and clarity by removing 
``unnecessary entities from compliance to capture only those entities 
that are vital for reliability.'' \19\ NERC states that the proposed 
new definitions for Balancing Contingency Event and Reportable 
Balancing Contingency Event more clearly identify the types of events 
that cause frequency deviations necessitating action under the proposed 
Reliability Standard and provide additional detail regarding the types 
of resources that may be identified as contingency reserves. 
Furthermore, NERC states that proposed Reliability Standard BAL-002-2 
``ensures objectivity of the reserve measurement process by 
guaranteeing a Commission-sanctioned continent-wide reserve policy,'' 
and therefore satisfies an outstanding Order No. 693 directive for 
uniform elements, definitions and requirements for a continent-wide 
contingency reserve policy.\20\ Finally, NERC states that the proposed 
revised definition of Contingency Reserves ``improves the existing 
definition by addressing a Commission directive in Order No. 693 to 
allow demand side management to be used as a resource for contingency 
reserve when necessary.'' \21\
---------------------------------------------------------------------------

    \19\ NERC Petition at 14.
    \20\ Id.
    \21\ Id. at 33.
---------------------------------------------------------------------------

    13. NERC submitted proposed violation risk factors and violation 
severity levels for each requirement of the proposed Reliability 
Standard and an implementation plan and effective dates. NERC states 
that these proposals were developed and reviewed for consistency with 
NERC and Commission guidelines. NERC proposes an effective date for the 
proposed Reliability Standard that is the first day of the first 
calendar quarter that is six months after the date of Commission 
approval. NERC explains that the proposed implementation date will 
allow entities to make necessary modifications to existing software 
programs to ensure compliance.\22\
---------------------------------------------------------------------------

    \22\ Id. Ex. D (Implementation Plan) at 3.
---------------------------------------------------------------------------

    14. On February 12, 2016, NERC submitted a supplemental filing to 
clarify a statement in the petition that proposed Reliability Standard 
BAL-002-2 would operate in conjunction with Reliability Standard TOP-
007-0 to control system frequency by addressing transmission line 
loading in the event of a transmission overload. NERC explains that, 
while Reliability Standard TOP-007-0 will be retired on April 1, 2017, 
``the obligations related to [transmission line loading] under TOP-007-
0 will be covered by Commission-approved TOP-001-3, EOP-003-2, IRO-009-
2, and IRO-008-2 . . . by requiring relevant functional entities to 
communicate [Interconnection Reliability Operating Limits (IROL)] and 
[System Operating Limits (SOL)] exceedances so that the [reliability 
coordinator] can direct appropriate corrective action to mitigate or 
prevent those events.'' \23\
---------------------------------------------------------------------------

    \23\ NERC February 12, 2016 Supplemental Filing at 2-3.
---------------------------------------------------------------------------

    15. On March 31, 2016, NERC submitted a second supplemental filing 
to ``further clarify the extent to which BAL-002-2 interacts with other 
Commission-approved Reliability Standards to promote Bulk Power System 
reliability . . . [and support] the overarching policy objective 
reflected in the stated purpose of Reliability Standard BAL-002-2.'' 
\24\ In its filing, NERC expands upon the explanation in the petition 
regarding how an ``integrated'' and ``coordinated suite of Reliability 
Standards'' (BAL-001-2, BAL-003-1, TOP-007-0, EOP-002-3, EOP-011-1, 
IRO-008-2, and IRO-009-2) will apply to events causing MW losses above 
a responsible entity's most severe single contingency, and how those 
other Reliability Standards are better designed to manage the greater 
risks created by such events.\25\
---------------------------------------------------------------------------

    \24\ NERC March 31, 2016 Supplemental Filing at 1, 5.
    \25\ Id. at 2-5.
---------------------------------------------------------------------------

II. Discussion

    16. Pursuant to FPA section 215(d)(2), we propose to approve 
Reliability Standard BAL-002-2 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. We also 
propose to approve NERC's eight new and revised proposed definitions 
and, with certain proposed modifications, the proposed violation risk 
factor and violation severity level assignments. In addition, we 
propose to approve NERC's implementation plan, in which NERC proposes 
an effective date of the first day of the first calendar quarter, six 
months after the date of Commission approval, and the retirement of 
currently-effective BAL-002-1 immediately before that date.\26\
---------------------------------------------------------------------------

    \26\ NERC Petition, Ex. D (Implementation Plan) at 3.
---------------------------------------------------------------------------

    17. The purpose of proposed Reliability Standard BAL-002-2 is to 
ensure that balancing authorities and reserve sharing groups balance 
resources and demand and return their ACE to defined values following a 
Reportable Balancing Contingency Event. We agree with NERC that it is 
essential for grid reliability for responsible entities to balance 
resources and demand, and restore system frequency, to recover from a 
system event, and that they maintain reserves necessary to replace 
capacity and energy lost due to generation or transmission outages. 
Proposed Reliability Standard BAL-002-2 improves upon currently-
effective Reliability Standard BAL-002-1 by consolidating the number of 
requirements to streamline and clarify the obligations related to 
achieving these goals.
    18. We believe that proposed BAL-002-2 satisfies the Order No. 693 
directive that NERC develop a continent-wide contingency reserve 
policy.\27\ Further, we agree with NERC that, in addition to the 
proposed Reliability Standard, the development of a continent-wide 
contingency reserve policy includes revisions to Reliability Standard 
BAL-001-1a (superseded by BAL-001-1) (Real Power Balancing Control 
Performance).\28\ When approving Reliability Standard BAL-002-0 in 
Order No. 693, the Commission directed the ERO to develop modifications 
to Reliability Standard BAL-002-0 to include a requirement that 
explicitly provides that demand side management may be used as a 
resource for contingency reserves.\29\ NERC states that the ``proposed 
definition of Contingency Reserve improves the existing definition by 
addressing a Commission directive in Order No. 693 to allow demand side 
management to be used as a resource for contingency reserve when 
necessary.'' \30\ Further, NERC asserts that the drafting team elected 
to expand the definition of contingency reserve to explicitly include 
capacity associated with demand side management.\31\ However, the 
proposed definition does not include the NERC-defined term Demand-Side 
Management.\32\ The Commission seeks comment on whether the proposed 
definition of contingency reserve should include the NERC-defined term 
Demand-Side Management for better clarity.
---------------------------------------------------------------------------

    \27\ Order No. 693, FERC Stats. & Regs ] 31,242 at PP 340, 341 
and 356.
    \28\ NERC Petition at 9.
    \29\ Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 330, 335 
and 356.
    \30\ NERC Petition at 33.
    \31\ NERC Petition, Ex. E (BAL-002-2 Background Document) at 6.
    \32\ The NERC Glossary currently defines Demand-Side Management 
as ``the term for all activities or programs undertaken by Load 
Serving Entity or its customers to influence the amount or timing of 
electricity they use.'' NERC Glossary of Terms Used in NERC 
Reliability Standards at 35 (updated April 20, 2016). As of July 1, 
2016, the new definition of Demand-Side Management will be: ``All 
activities or programs undertaken by any applicable entity to 
achieve a reduction in Demand.'' Id.
---------------------------------------------------------------------------

    19. In addition to proposing to approve Reliability Standard BAL-
002-

[[Page 33444]]

2, the Commission, pursuant to section 215(d)(5) of the FPA, proposes 
to direct NERC to develop modifications regarding the 15-minute ACE 
recovery period in Requirement R1 and the 90-minute Contingency Reserve 
Restoration Period in Requirement R3 under certain circumstances. We 
also propose to direct NERC to develop a new or modified Reliability 
Standard that addresses the reliability impact of megawatt losses above 
a responsible entity's most severe single contingency, because 
``recovery of ACE within a specified time period and restoration of 
Contingency Reserves due to unlikely events above a responsible 
entity's most severe single contingency is not within the scope of 
proposed Reliability Standard BAL-002-2.'' \33\
---------------------------------------------------------------------------

    \33\ NERC Petition at 14-15.
---------------------------------------------------------------------------

    20. The Commission seeks comment on the following issues discussed 
below: (1) The 15-minute ACE recovery period; (2) the 90-minute 
Contingency Reserve Restoration Period; (3) the exclusion of losses 
above the most severe single contingency in the proposed definition of 
Reportable Balancing Contingency Event; and (4) NERC's proposal to 
reduce from High to Medium the violation risk factor for proposed 
Requirements R1 and R2.

A. The 15-Minute ACE Recovery Period

    21. Proposed Reliability Standard BAL-002-2, Requirement R1 
obligates a balancing authority or reserve sharing group that 
experience a Reportable Balancing Contingency Event to return its 
Reporting ACE to pre-defined values within the 15-minute Contingency 
Event Recovery Period. Proposed Requirement R1, Part 1.3.1 provides an 
``exemption'' from the 15-minute ACE recovery period based upon the 
occurrence of a reliability coordinator-declared Energy Emergency Alert 
level and the depletion of the entity's contingency reserves to below 
its most severe single contingency to mitigate the operating emergency. 
NERC states that this exemption ``eliminates the existing conflict with 
EOP-011-1, as it removes undefined auditor discretion when assessing 
compliance and allows the responsible entity flexibility to maintain 
service to load while managing reliability.'' \34\ Further, NERC 
explains that this exemption does not eliminate an entity's obligation 
to respond to a Reportable Balancing Contingency Event, but rather it 
will ``simply allow more time to return the Reporting ACE to the 
defined limits than would otherwise be allowed.'' \35\ The proposed 
Reliability Standard does not expressly provide a definitive and 
enforceable deadline for ACE recovery under these circumstances.
---------------------------------------------------------------------------

    \34\ NERC Petition at 22.
    \35\ Id. at 24.
---------------------------------------------------------------------------

    22. In proposing to approve Reliability Standard BAL-002-2, we 
agree that NERC's proposal clarifies the obligations imposed on 
responsible entities and is therefore an improvement on currently-
effective Reliability Standard BAL-002-1. Furthermore, Proposed 
Reliability Standard BAL-002-2 improves on the currently effective BAL-
002-1 by obligating the responsible entities to accurately calculate 
most severe single contingency according to system models maintained by 
the balancing authority and reserve sharing groups. NERC's explanation 
for the relief from the 15-minute ACE recovery period raises concerns, 
however, because it is unclear how or when an entity will prepare for a 
second contingency during the indeterminate extension of the 15-minute 
ACE recovery period that proposed Requirement R1, Part 1.3 permits. A 
balancing authority that is operating out-of-balance for an extended 
period of time is ``leaning on the system'' by relying on external 
resources to meet its obligations and could affect other entities 
within an Interconnection, particularly if another entity is reacting 
to a grid event while unaware that the first entity has not restored 
its ACE. Therefore, while an extension of the 15-minute ACE recovery 
period may be appropriate under certain emergency conditions, we 
believe that the reliability coordinator should make that decision 
rather than an individual balancing authority or reserve sharing group. 
With a wide-area view, the reliability coordinator has the authority, 
with more or better information and objectivity, to make the decision 
whether to extend the ACE recovery period after an entity has met the 
criteria described in Requirement R1, Part 1.3.1. In other words, a 
reliability coordinator's extension of the 15-minute ACE recovery 
period may be appropriate based on all of the circumstances, if an 
entity has met the criteria in Requirement R1, Part 1.3.1.
    23. NERC suggests that reliability coordinator approval of an 
extension of the 15-minute ACE recovery period is redundant because the 
reliability coordinator is involved in the creation of balancing 
authority Operating Plans pursuant to Reliability Standard EOP-011-1, 
which already requires a balancing authority to communicate with its 
reliability coordinator.\36\ However, there is currently no express 
requirement that the reliability coordinator must make or approve the 
decision to extend the 15-minute ACE recovery period. Further, while 
Reliability Standard EOP-011-1, Requirement R3, requires the 
reliability coordinator to review balancing authority Operating Plans 
and notify a balancing authority of any ``reliability risks'' the 
reliability coordinator may identify with a time frame for the 
resubmittal of revised Operating Plans, that Reliability Standard does 
not require reliability coordinator approval of Operating Plans.
---------------------------------------------------------------------------

    \36\ Id. at 23.
---------------------------------------------------------------------------

    24. Accordingly, the Commission proposes to direct NERC to develop 
modifications to Reliability Standard BAL-002-2 that would require 
Reporting ACE recovery within the 15-minute Contingency Event Recovery 
Period unless the relevant reliability coordinator expressly authorizes 
an extension of the 15-minute ACE recovery period after the balancing 
authority has met the criteria described in Requirement R1, Part 1.3.1. 
Additionally, the Commission's proposal would include modifying the 
standard to identify the reliability coordinator as an Applicable 
Entity. The Commission seeks comment on this proposal.

B. The 90-Minute Contingency Reserve Restoration Period

    25. Proposed Reliability Standard BAL-002-2, Requirement R3 
requires a balancing authority or reserve sharing group to restore its 
contingency reserves to at least its most severe single contingency 
before the end of the Contingency Reserve Restoration Period, which 
NERC proposes to define as ``a period not exceeding 90 minutes 
following the end of the Contingency Event Recovery Period.'' \37\ 
Requirement R3 further states that ``any Balancing Contingency Event 
that occurs before the end of a Contingency Reserve Restoration Period 
resets the beginning of the Contingency Event Recovery Period.'' \38\ 
Under this approach, a

[[Page 33445]]

second contingency ``resets'' this 90-minute restoration window, 
regardless of the amount of the megawatt loss resulting from that 
event.
---------------------------------------------------------------------------

    \37\ NERC Petition, Ex. D (Implementation Plan). The 90-minute 
contingency reserve restoration period begins after the end of the 
15-minute ACE restoration period under Requirement R1. Accordingly, 
responsible entities must restore contingency reserves within 105 
minutes of the occurrence of a Reportable Balancing Contingency 
Event to comply with Requirement R3.
    \38\ Balancing Contingency Event means: ``Any single event 
described in Subsections (A), (B), or (C) below, or any series of 
such otherwise single events, with each separated from the next by 
one minute or less.
    A. Sudden loss of generation:
    a. Due to
    i. unit tripping,
     ii. loss of generator Facility resulting in isolation of the 
generator from the Bulk Electric System or from the responsible 
entity's System, or
    iii. sudden unplanned outage of transmission Facility;
    b. And, that causes an unexpected change to the responsible 
entity's ACE;
    B. Sudden loss of an import, due to unplanned outage of 
transmission equipment that causes an unexpected imbalance between 
generation and Demand on the Interconnection.
    C. Sudden restoration of a Demand that was used as a resource 
that causes an unexpected change to the responsible entity's ACE. 
NERC Petition Ex. D.''
---------------------------------------------------------------------------

    26. NERC asserts that the 90-minute contingency restoration period 
``is just and reasonable by providing adequate opportunity for a 
responsible entity to recover from an event while also maintaining 
reliability and recovery of reserves in a timely manner.'' \39\ 
Further, NERC states that the ``reset'' for a Balancing Contingency 
Event provides ``time and flexibility for an entity's ongoing 
recovery,'' and is intended to accommodate the ``heightened 
sensitivities applicable during such a Contingency Reserve Restoration 
Period.'' \40\ NERC explains that the `` `reset' avoids punishing a 
responsible entity for an unexpected event, occurring within [sic] 
Contingency Restoration Period, which may make it infeasible to fully 
restore the requisite level of Contingency Reserves as intended.'' \41\
---------------------------------------------------------------------------

    \39\ NERC Petition at 26.
    \40\ Id. at 27.
    \41\ Id.
---------------------------------------------------------------------------

    27. We agree with NERC that a ``reset'' of the Contingency Reserve 
Restoration Period may be appropriate in some instances. For example, a 
Balancing Contingency Event involving substantial megawatt loss that 
occurs during the recovery period following a Reportable Balancing 
Contingency Event may make it infeasible to fully restore the 
contingency reserves as originally planned. Proposed Reliability 
Standard BAL-002-2 Requirement R3 improves on the currently-effective 
BAL-002-1 by requiring the balancing authority or reserve sharing group 
to restore its contingency reserves to ``at least its MSSC'' following 
a reportable balancing contingency event. However, Requirement R3 
potentially allows unlimited ``resets'' of the 90-minute restoration 
period, even for insignificant megawatt losses from a Balancing 
Contingency Event that occur after the initial Reportable Balancing 
Contingency Event.
    28. NERC explains that responsible entities need relief from the 
loss of any additional megawatts above those resulting from a 
Reportable Balancing Contingency Event because ``this compounding loss 
inevitably increases the total recovery necessary to replenish the 
reserves while also meeting current demand.'' \42\ However, while 
megawatt losses occurring during the Contingency Reserve Restoration 
Period that qualify as a Reportable Balancing Contingency Event could 
reasonably justify an extension of the 90-minute Contingency Reserve 
Restoration Period, there is less need for a Balancing Contingency 
Event, which could involve an insignificant loss of megawatts, to 
result automatically in a resetting of the time period. Under such 
circumstances, balancing authorities and reserve sharing groups should 
be required to restore the initial megawatt losses associated with the 
Reportable Balancing Contingency Event within the 90-minute restoration 
period, but could be allowed to ``credit'' megawatt losses from the 
Balancing Contingency Event, and have an additional 90 minutes to 
restore those losses.\43\ This would prevent the possibility of 
multiple resets that could result in entities not maintaining 
sufficient contingency reserves for long periods of time.
---------------------------------------------------------------------------

    \42\ Id.
    \43\ For example, two generation units are lost, one of 900 MW 
(a Reportable Balancing Contingency Event) and another of 200 MW (a 
Balancing Contingency Event) 16 minutes later. Because of this 
second 200 MW loss, the balancing authority would be required to 
restore its contingency reserves to 700 MW (900 MW less the 200 MW 
Balancing Contingency Event) within the 90-minute contingency 
restoration period.
---------------------------------------------------------------------------

    29. The Commission proposes to direct that NERC develop 
modifications to Reliability Standard BAL-002-2 to eliminate the 
potential for unlimited resets and ensure that contingency reserves 
must be restored within the 90-minute Contingency Reserve Restoration 
Period. One possible approach would be to give a balancing authority or 
reserve sharing group ``credits'' for megawatt losses resulting from 
Balancing Contingency Events during the 90-minute Contingency Reserve 
Restoration Period and allow an additional 90 minutes to restore 
reserves associated with those megawatt losses, if necessary. The 
Commission seeks comment on this proposal.

C. Exclusion of Megawatt Losses Above the Most Severe Single 
Contingency

    30. NERC proposes to define Reportable Balancing Contingency Event 
as:

[a]ny Balancing Contingency Event occurring within a one-minute 
interval of an initial sudden decline in ACE based on EMS scan rate 
data that results in a loss of MW output less than or equal to the 
[most severe single contingency], and greater than or equal to the 
lesser amount of: (i) 80% of the [most severe single contingency] . 
. . Prior to any given calendar quarter, the 80% threshold may be 
reduced by the responsible entity upon written notification to the 
Regional Entity.

    NERC states that this definition ``provides the scope of 
obligations required under Requirements R1 and R3 of BAL-002-2 [and] 
impose obligations on responsible entities to take certain recovery 
actions upon the occurrence of a Reportable Balancing Contingency Event 
to sustain Reporting ACE and adequate levels of Contingency Reserves.'' 
\44\
---------------------------------------------------------------------------

    \44\ NERC Petition at 30-31 and Ex. D (Implementation Plan).
---------------------------------------------------------------------------

    31. NERC's proposed definition would limit balancing authority and 
reserve sharing group responsibility to megawatt losses between 80 
percent and 100 percent of their most severe single contingency that 
occur within a one minute interval. As NERC explains, if a balancing 
authority has a most severe single contingency of 1000 megawatts and a 
generation unit with a capacity of 850 megawatts is lost, this system 
event is within the scope of proposed Reliability Standard BAL-002-2 
because the loss is greater than 80 percent of, but does not exceed, 
the most severe single contingency. NERC contrasts that situation with 
the example of a balancing authority's loss of two generation units, 
one of 750 megawatts and another of 300 megawatts within 60 seconds of 
one another. The total generation loss of 1050 megawatts in this 
example is exempt from proposed Reliability Standard BAL-002-2 because 
the total loss resulting from the two events, which are aggregated 
because both events occurred within one minute of each other, is 
greater than the balancing authority's most severe single contingency 
of 1000 megawatts.\45\
---------------------------------------------------------------------------

    \45\ See NERC Petition, Ex. A (Examples of Reportable Balancing 
Contingency Events).
---------------------------------------------------------------------------

    32. NERC explains that events causing megawatt losses above a 
balancing authority's or reserve sharing group's most severe single 
contingency are not within the scope of proposed Reliability Standard 
BAL-002-2, and therefore those megawatt losses are not subject to the 
15-minute ACE recovery period or the 90-minute Contingency Reserve 
Restoration Period.\46\ Instead, balancing

[[Page 33446]]

authorities and reserve sharing groups must respond to these large 
events under the suite of related Reliability Standards mentioned 
above: BAL-001-2, BAL-3-1, TOP-007-0, EOP-002-3, EOP-011-1, IRO-008-2, 
and IRO-009-2. According to NERC, ``this integrated and coordinated 
approach would ensure reliability while also avoiding any gap in 
coverage and providing means to address complex issues arising during 
events that exceed MSSC.'' \47\
---------------------------------------------------------------------------

    \46\ NERC states that between 2006 and 2011, ninety disturbance 
events exceeded the most severe single contingency, with no year 
experiencing more than 29 events. According to NERC, ``evaluation of 
this data illustrates that events greater than MSSC occur very 
infrequently.'' NERC March 31, 2016 Supplemental Filing at 3, n.5, 
citing the 2012 State of Reliability (May 2012) accessible online at 
http://www.nerc.com/files/2012_sor.pdf.
    \47\ NERC Petition at 15.
---------------------------------------------------------------------------

    33. NERC's proposed limitation on the scope of proposed Reliability 
Standard BAL-002-2 raises questions, particularly NERC's assumption 
that megawatt exceedances above the most severe single contingency, 
however small, often or always will result in ``complex issues.'' We 
recognize that in extreme megawatt loss scenarios triggering energy 
emergencies, Reliability Standard EOP-011-1 and the broader suite of 
Reliability Standards NERC mentions could provide appropriate 
reliability protection when proposed Reliability Standard BAL-002-2 
would not apply. However, a reliability gap may exist for megawatt 
exceedances of the most severe single contingency that do not cause 
energy emergencies or otherwise clearly implicate the other Reliability 
Standards cited by NERC. Our concern is that unless this gap is 
addressed, the potential for balancing authorities to lean on the 
Interconnection by relying on external resources for an indeterminate 
period exists.
    34. The Commission seeks comment from NERC and other entities on 
how to address that gap and whether to impose a reasonable obligation 
for balancing authorities and reserve sharing groups to address 
scenarios involving megawatt losses above the most severe single 
contingency that do not cause energy emergencies. Based on the 
comments, the Commission may direct that NERC develop a new or modified 
Reliability Standard to address that reliability gap.

D. NERC's Proposed Violation Risk Factor for Requirements R1 and R2

    35. NERC proposes a ``medium'' violation risk factor for each 
requirement of proposed Reliability Standard BAL-002-2. Currently-
effective Reliability Standard BAL-002-1 assigns a ``high'' violation 
risk factor for its Requirements R3 and R3.1, which NERC explains are 
analogous to proposed Requirements R1 and R2 in the proposed 
Reliability Standard.\48\ We do not believe that NERC adequately 
justifies lowering the assignment of the violation risk factor for 
proposed Requirements R1 and R2 from high to medium. Proposed 
Requirement R1 requires a balancing authority or reserve sharing group 
to deploy contingency reserves in response to all Reportable Balancing 
Contingency Events as the means for recovering Reporting ACE. Proposed 
Requirement R2 requires a balancing authority or reserve sharing group 
to develop, review and maintain a process within its Operating Plans 
for determining its most severe single contingency and to prepare to 
have contingency reserves equal to, or greater than, its most severe 
single contingency.
---------------------------------------------------------------------------

    \48\ NERC Petition, Ex. I (Mapping Document for BAL-002-2).
---------------------------------------------------------------------------

    36. NERC provides insufficient support for the proposed violation 
risk factor for proposed Requirements R1 and R2. In justifying the 
assignment of a medium violation risk factor. NERC asserts, without 
explanation, that a medium violation risk factor is ``consistent with 
other reliability standards (i.e., BAL-001-2, BAL-003-1).'' \49\ NERC 
also contends, without explanation, that proposed Requirement R3 is 
similar in concept to the current enforceable BAL-001-0.1a standard 
Requirements R1 and R2, which have an approved Medium [violation risk 
factor], and approved reliability standards BAL-001-1 and BAL-003-
1.\50\ The conclusory statements in NERC's petition regarding the 
alleged similarities between proposed Requirements R1 and R2 and other 
Reliability Standards does not adequately explain the alleged bases for 
reducing the violation risk factor for Requirements R1 and R2 from the 
analogous Requirement R3 in the currently-effective Reliability 
Standard.
---------------------------------------------------------------------------

    \49\ NERC Petition, Ex. G (Analysis of Violation Risk Factors 
and Violation Severity Levels) at 4.
    \50\ Id.
---------------------------------------------------------------------------

    37. NERC further states that while a violation of proposed 
Requirements R1 or R2 could directly affect the electrical state or 
capability of the bulk electric system, it ``would unlikely result in 
the Bulk Electric System instability, separation or cascading failures 
since this requirement is an after-the-fact calculation, not performed 
in Real-time.'' \51\ We believe this to be an inadequate justification 
for lowering the violation risk factors for proposed Requirements R1 
and R2. While a calculation of how far out of compliance may occur 
after the fact, the issue is the risk resulting from a failure to meet 
the performance set forth in the requirement in real time. With regard 
to proposed Requirement R2 requiring responsible entities to have a 
process for determining their most severe single contingency, NERC 
itself states that ``proper calculation of MSSC is critical for 
reliability.'' \52\
---------------------------------------------------------------------------

    \51\ Id. Ex. G (Analysis of Violation Risk Factors and Violation 
Severity Levels) at 3-4.
    \52\ NERC March 31, 2016 Supplemental Filing at 3.
---------------------------------------------------------------------------

    38. Accordingly, we propose to direct that NERC assign a high 
violation risk factor to proposed Reliability Standard BAL-002-2, 
Requirements R1 and R2. We seek comment on this proposal.

III. Information Collection Statement

    39. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting and recordkeeping (collections of 
information) imposed by an agency.\53\ Upon approval of a collection(s) 
of information, OMB will assign an OMB control number and expiration 
date. Respondents subject to the filing requirements of this rule will 
not be penalized for failing to respond to these collections of 
information unless the collections of information display a valid OMB 
control number.
---------------------------------------------------------------------------

    \53\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    40. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the Paper Reduction Act of 1995, 44 U.S.C. 3507(d) (2012). Comments 
are solicited on the Commission's 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.
    41. This Notice of Proposed Rulemaking proposes to approve 
revisions to Reliability Standard BAL-002-2. NERC states in its 
petition that the proposed Reliability Standard applies to balancing 
authorities and reserve sharing groups, and is designed to ensure that 
these entities are able to recover from system contingencies by 
deploying adequate reserves to return their ACE to defined values and 
by replacing the capacity and energy lost due to generation or 
transmission equipment outages. The Commission also proposes to approve 
NERC's seven proposed new definitions and one proposed revised 
definition, and the retirement of currently-effective Reliability 
Standard BAL-002-1

[[Page 33447]]

immediately prior to the effective date of BAL-002-1.
    42. Public Reporting Burden: Our estimate below regarding the 
number of respondents is based on the NERC Compliance Registry as of 
April 15, 2016. According to the NERC Compliance Registry, there are 70 
balancing authorities in the Eastern Interconnection, 34 balancing 
authorities in the Western Interconnection and one balancing authority 
in the Electric Reliability Council of Texas (ERCOT). The Commission 
bases individual burden estimates on the time needed for balancing 
authorities and reserve sharing groups to maintain annually, the 
operating process and operating plan that are required in the 
Reliability Standard. These burden estimates are consistent with 
estimates for similar tasks in other Commission-approved Reliability 
Standards. The following estimates relate to the requirements for this 
Notice of Proposed Rulemaking in Docket No. RM16-7-000.

                                                                     RM16-7-000 NOPR
                   [BAL-002-2: Disturbance Control Standard--Contingency Reserve for Recovery from a Balancing Contingency Event] \54\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Average burden   Total annual
                                                             Number of     Annual number   Total number    hours & cost   burden hours &     Cost per
                                                            respondents    of responses    of responses    per response    total annual   respondent ($)
                                                                          per respondent                       \55\            cost
                                                                     (1)             (2)     (1) * (2) =             (4)     (3) * (4) =       (5) / (1)
                                                                                                     (3)                             (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
BA/RSG: \56\ Develop and Maintain annually, Operating                105               1             105               8             840            $773
 Process and Operating Plans............................                                                            $773         $81,119
BA/RSG: Record Retention \57\...........................             105               1             105               4             420             112
                                                                                                                    $112         $11,760
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  ..............  ..............             210  ..............           1.260             885
                                                                                                                                 $92,879
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Title: FERC-725R, Mandatory Reliability Standard BAL-002-2.
---------------------------------------------------------------------------

    \54\ Proposed Reliability Standard BAL-002-2 applies to 
balancing authorities and reserve sharing groups. However, the 
burden associated with the balancing authorities complying with 
Requirements R1 and R3 is not included within this table because the 
Commission accounted for it under Commission-approved Reliability 
Standard BAL-002-1.
    \55\ The estimated hourly cost (salary plus benefits) of $96.57 
is an average based on Bureau of Labor Statistics (BLS) information 
(http://www.bls.gov/oes/current/naics2_22.htm) for an electrical 
engineer ($64.20/hour) and a lawyer ($128.94).
    \56\ BA = Balancing Authority; RSG = Reserve Sharing Group.
    \57\ $28/hour, based on a Commission staff study of record 
retention burden cost.
---------------------------------------------------------------------------

    Action: Proposed Collection of Information.
    OMB Control No.: 1902-0268.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This proposed rule proposes to 
approve Reliability Standard BAL-002-2, which is designed to ensure 
that a responsible entity, either a balancing authority or reserve 
sharing group, is able to recover from system contingencies by 
deploying adequate reserves to return their ACE to defined values and 
replacing the capacity and energy lost due to generation or 
transmission equipment outages. Proposed Reliability Standard BAL-002-
2, Requirement R1 requires a responsible entity, either a balancing 
authority or reserve sharing group, experiencing a Reportable Balancing 
Contingency Event to deploy its contingency reserves to recover its ACE 
to certain prescribed values within the Contingency Event Recovery 
Period of 15 minutes. Proposed Requirement R2 requires a balancing 
authority or reserve sharing group to develop, review and maintain a 
process within its Operating Plans for determining its most severe 
single contingency and prepare to have contingency reserves equal to, 
or greater than, its most severe single contingency. Proposed 
Requirement R3 provides that, following a Reportable Balancing 
Contingency Event, the responsible entity shall restore its Contingency 
Reserve to at least its most severe single contingency, before the end 
of the Contingency Reserve Restoration Period of 90 minutes.
    Internal Review: The Commission reviewed the proposed Reliability 
Standard and made a determination that its action is necessary to 
implement section 215 of the FPA. These requirements, if accepted, 
should conform to the Commission's expectation for generation and 
demand balance throughout the Eastern and Western Interconnections as 
well as within the ERCOT Region.
    43. 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].
    44. For submitting comments concerning the collection(s) of 
information and the associated burden estimate(s), 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) 395-4638, 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 
FERC-725R and Docket Number RM16- 7-000.

IV. Environmental Analysis

    45. 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.\58\ 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

[[Page 33448]]

regulations being amended.\59\ The actions proposed here fall within 
this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \58\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \59\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    46. The Regulatory Flexibility Act of 1980 (RFA) \60\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
As shown in the information collection section, the proposed 
Reliability Standard applies to 105 entities. Comparison of the 
applicable entities with the Commission's small business data indicates 
that approximately 23 \61\ are small business entities.\62\ Of these, 
the Commission estimates that approximately five percent, or one of 
these 23 small entities, will be affected by the new requirements of 
the proposed Reliability Standard.
---------------------------------------------------------------------------

    \60\ 5 U.S.C. 601-612.
    \61\ 21.73 percent of the total number of affected entities.
    \62\ The Small Business Administration sets the threshold for 
what constitutes a small business. Public utilities may fall under 
one of several different categories, each with a size threshold 
based on the company's number of employees, including affiliates, 
the parent company, and subsidiaries. For the analysis in this Final 
Rule, we are using a 500 employee threshold for each affected 
entity. Each entity is classified as Electric Bulk Power 
Transmission and Control (NAICS code 221121).
---------------------------------------------------------------------------

    47. The Commission estimates that the small entities affected by 
proposed Reliability Standard BAL-002-2 will incur an annual compliance 
cost of up to $20,355 (i.e., the cost of developing, and maintaining 
annually operating process and operating plans), resulting in a cost of 
approximately $885 per balancing authority and/or reserve sharing 
group. These costs represent an estimate of the costs a small entity 
could incur if the entity is identified as an applicable entity. The 
Commission does not consider the estimated cost 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.

VI. Comment Procedures

    48. 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 July 25, 2016. Comments must refer to 
Docket No. RM16-7-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    49. 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.
    50. 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.
    51. 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.

VII. Document Availability

    52. 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.
    53. 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 of this document, excluding the last three digits, in 
the docket number field.
    54. 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: May 19, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-12428 Filed 5-25-16; 8:45 am]
BILLING CODE 6717-01-P


