
[Federal Register Volume 82, Number 185 (Tuesday, September 26, 2017)]
[Rules and Regulations]
[Pages 44723-44731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20554]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM16-13-000; Order No. 836]


Balancing Authority Control, Inadvertent Interchange, and 
Facility Interconnection Reliability Standards

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) approves 
Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-
001-3 (Facility Interconnection Requirements), submitted by the North 
American Electric Reliability Corporation, as well as the retirement of 
Reliability Standards BAL-005-0.2b (Automatic Generation Control), FAC-
001-2 (Facility Interconnection Requirements), and BAL-006-2 
(Inadvertent Interchange).

DATES: This rule will become effective November 27, 2017.

FOR FURTHER INFORMATION CONTACT:
Syed Ahmad (Technical Information), Office of Electric Reliability, 
Division of Reliability Standards, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, Telephone: 
(202) 502-8718, Syed.Ahmad@ferc.gov
Julie Greenisen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-6362, Julie.Greenisen@ferc.gov.

SUPPLEMENTARY INFORMATION: 

ORDER NO. 836

FINAL RULE

    1. Pursuant to section 215 of the Federal Power Act (FPA),\1\ the 
Commission approves Reliability Standards BAL-005-1 (Balancing 
Authority Control) and FAC-001-3 (Facility Interconnection 
Requirements), submitted by the North American Electric Reliability 
Corporation (NERC), as well as the retirement of Reliability Standards 
BAL-005-0.2b (Automatic Generation Control), FAC-001-2 (Facility 
Interconnection Requirements), and BAL-006-2 (Inadvertent Interchange). 
The Commission also approves the associated implementation plans, 
violation risk factors, and violation severity levels for Reliability 
Standards BAL-005-1 and FAC-001-3. Finally, the Commission approves 
three revised definitions for the glossary of terms used in NERC's 
Reliability Standards (NERC Glossary).
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    \1\ 16 U.S.C. 824(o).
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    2. The Commission determines that Reliability Standards BAL-005-1 
and FAC-001-3 will enhance the reliability of the Bulk-Power System, as 
compared to currently-effective Reliability Standards BAL-005-0.2b and 
FAC-001-2, by clarifying and consolidating existing requirements 
related to frequency control. In addition, the Commission determines 
that the revised Reliability Standards support more accurate and 
comprehensive calculation of Reporting Area Control Error (Reporting 
ACE), by requiring timely reporting of an inability to calculate 
Reporting ACE and by requiring balancing authorities to maintain 
minimum levels of annual availability of 99.5 percent for each 
balancing authority's system for calculating Reporting ACE. Based on 
the information received in the comments on the Notice of Proposed 
Rulemaking in this proceeding,\2\ as well as in response to a 
subsequent data request issued to NERC,\3\ the Commission has 
determined that it will not, at this time, direct NERC to restore 
existing requirements in Requirement R15 of Reliability Standard BAL-
005-0.2b related to maintaining and testing backup power supplies at 
primary control centers and other critical locations. We also approve 
NERC's request to retire Reliability Standard BAL-006-2, BAL-005-0.2b 
and FAC-001-2 upon the effective date of Reliability Standard BAL-005-
1.
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    \2\ Balancing Authority Control, Inadvertent Interchange, and 
Facility Interconnection Reliability Standards, Notice of Proposed 
Rulemaking, 81 FR 66,555 (Sept. 28, 2016), 156 FERC ] 61,210 (2016) 
(NOPR).
    \3\ See Response of the North American Electric Corporation to 
Data Request, Docket No. RM16-13-000 (April 7, 2017).
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I. Background

A. Mandatory Reliability Standards and Order No. 693

    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. Specifically, the Commission may approve, by rule or order, a 
proposed Reliability Standard or modification to a Reliability Standard 
if it determines that the Reliability 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\
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    \4\ 16 U.S.C. 824o(d)(2).
    \5\ Id. 824o(e).
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    4. Pursuant to section 215 of the FPA, the Commission established a 
process to select and certify an ERO,\6\ and subsequently certified 
NERC as the ERO.\7\ On March 16, 2007, the Commission issued Order No. 
693, approving 83 of the initial 107 Reliability Standards filed by 
NERC, including Reliability Standards BAL-005-0 (Automatic Generation 
Control), FAC-001-0 (Facility Interconnection Requirements), and BAL-
006-1 (Inadvertent Interchange).\8\ In addition to approving 
Reliability Standards BAL-005-0 and BAL-006-1, the Commission directed 
NERC to develop modifications to those Reliability Standards through

[[Page 44724]]

the NERC standards development process.
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    \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).
    \8\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242 at PP 420, 439, and 680, 
order on reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
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    5. With respect to Reliability Standard BAL-005-0, the Commission 
directed NERC to develop a modification that:
    (1) develops a process to calculate the minimum regulating reserve 
a balancing authority must have at any given time taking into account 
expected load and generation variation and transactions being ramped 
into or out of the balancing authority; (2) changes the title of the 
Reliability Standard to be neutral as to the source of regulating 
reserves and to allow the inclusion of technically qualified DSM and 
direct control load management; (3) clarifies Requirement R5 of this 
Reliability Standard to specify the required type of transmission or 
backup plans when receiving regulation from outside the balancing 
authority when using non-firm service; and (4) includes Levels of Non-
Compliance and a Measure that provides for a verification process over 
the minimum required automatic generation control or regulating 
reserves a balancing authority must maintain.\9\
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    \9\ Id. P 420.
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    Subsequently, the Commission approved one interpretation of 
Reliability Standard BAL-005-0 and two errata filings.\10\ The 
currently-effective version of the Reliability Standard is BAL-005-
0.2b.
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    \10\ See Modification of Interchange and Transmission Loading 
Relief Reliability Standards; and Electric Reliability Organization 
Interpretation of Specific Requirements of Four Reliability 
Standards, Order No. 713, 124 FERC ] 61,071 (2008); North American 
Electric Reliability Corp., Docket No. RD09-2-000 (May 13, 2009) 
(delegated letter order); North American Electric Reliability Corp., 
Docket No. RD12-4-000 (Sept. 13, 2012) (delegated letter order).
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    6. With respect to Reliability Standard BAL-006-1, the Commission 
directed NERC to develop a modification ``that adds Measures concerning 
the accumulation of large inadvertent imbalances and Levels of Non-
Compliance.'' \11\ The Commission explained the need for such a 
modification as follows:
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    \11\ Order No. 693, FERC Stats. & Regs. ] 31,242 at P 428.
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    While we agree that inadvertent imbalances do not normally affect 
the real-time operations of the Bulk-Power System and pose no immediate 
threat to reliability, we are concerned that large imbalances represent 
dependence by some balancing authorities on their neighbors and are an 
indication of less than desirable balancing of generation with load. 
The Commission also notes that the stated purpose of this Reliability 
Standard is to define a process for monitoring balancing authorities to 
ensure that, over the long term, balancing authorities do not 
excessively depend on other balancing authorities in the 
Interconnection for meeting their demand or interchange 
obligations.\12\
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    \12\ Id.
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    Since then, the Commission has approved one revision to Reliability 
Standard BAL-006-1 to remove the regional waiver of certain 
requirements for the Midcontinent ISO, following the Midcontinent ISO's 
transition to a single balancing authority model.\13\ The currently-
effective version of the Reliability Standard is BAL-006-2.
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    \13\ See North American Electric Reliability Corp., 134 FERC ] 
61,007 (2011).
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B. NERC Petition

    7. On April 20, 2016, NERC filed a petition seeking approval of 
Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-
001-3 (Facility Interconnection Requirements), nine new or revised 
definitions associated with the Reliability Standards, and retirement 
of currently-effective Reliability Standards BAL-005-0.2b (Automatic 
Generation Control), FAC-001-2 (Facility Interconnection Requirements), 
and BAL-006-2 (Inadvertent Interchange).
    8. In its petition, NERC requested that the two modified 
Reliability Standards and the revised definitions of Automatic 
Generation Control, Pseudo-Tie, and Balancing Authority become 
effective on the first day of the first calendar quarter twelve months 
from the effective date of the applicable governmental authority's 
approval of NERC's petition. NERC also requested that the retirement of 
Reliability Standard BAL-006-2 become effective upon the latter of the 
effective date of proposed Reliability Standard BAL-005-1 and the NERC 
Operating Committee's approval of an Inadvertent Interchange Guideline 
document.
    9. For the six remaining definitions (Reporting ACE \14\ and its 
component definitions: Actual Frequency, Actual Net Interchange, 
Scheduled Net Interchange, Interchange Meter Error, and Automatic Time 
Error Correction), NERC initially requested an effective date of July 
1, 2016, to coincide with the effective date for Reliability Standard 
BAL-001-2. However, NERC subsequently withdrew its request for approval 
of the six Reporting ACE-related definitions from the instant docket, 
and filed for expedited approval of the six definitions in a separate 
docket. The six definitions were approved by delegated letter order on 
June 23, 2016, and are no longer at issue in the instant 
proceeding.\15\
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    \14\ NERC states that Reporting ACE ``represents a Balancing 
Authority Area's (BAA's) Area Control Error (ACE) measured in 
megawatts (MW) as the difference between the BAA's Actual and 
Scheduled Net Interchange, plus its Frequency Bias Setting 
obligation and meter error corrections. Reporting ACE helps 
Responsible Entities provide reliable frequency control by 
indicating the current state of the entity's contribution to 
Reliability.'' NERC Petition at 3.
    \15\ North American Electric Reliability Corp., Docket No. RD16-
7-000 (June 23, 2016) (delegated letter order).
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    10. NERC explained in its petition that Reliability Standards BAL-
005-1 and FAC-001-3, and the proposed retirement of Reliability 
Standard BAL-006-2, came about as part of the second phase of NERC's 
project to ``clarify, consolidate, streamline, and enhance the 
Reliability Standards addressing frequency control.'' \16\ NERC 
indicated in its petition that the standard drafting team developed the 
proposed revisions after reviewing applicable Commission directives, 
``Paragraph 81'' criteria, and the recommendations of the periodic 
review team that examined Reliability Standards BAL-005-0.2b and BAL-
006-2.\17\
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    \16\ NERC Petition at 2 (referencing Project 2010-14.2.1 Phase 2 
of Balancing Authority Reliability-based Controls).
    \17\ Id. at 3 (citing North American Electric. Reliability 
Corp., 138 FERC ] 61,193 at P 81, order on reh'g and clarification, 
139 FERC ] 61,168 (2012); Petition of the North American Electric 
Reliability Corporation for Approval of Retirement of Requirements 
in Reliability Standards, Docket No. RM13-8-000, at Exhibit A 
(``Paragraph 81 Criteria'') (filed Feb. 28, 2013); North American 
Electric Reliability Corp. Order No. 788, 145 FERC ] 61,147 (2013)).
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    11. NERC described the revisions to Reliability Standard BAL-005-
0.2b as clarifying and refining the current requirements ``for 
accurate, consistent, and complete'' reporting of Reporting ACE, which 
is a key frequency control and reliability indicator.\18\ These 
revisions include relocating some of the current requirements of 
Reliability Standard BAL-005-0.2b, which relate to confirming that 
facilities are within a balancing authority's metered boundary, into 
Reliability Standard FAC-001-3. In addition, NERC proposed to relocate 
Requirement R3 of currently-effective Reliability Standard BAL-006-2 
into Reliability Standard BAL-005-1, explaining that the requirement 
relates to ensuring that balancing authorities use consistent data 
sources to calculate Reporting ACE, and therefore more properly belongs 
in Reliability Standard BAL-005.
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    \18\ Id.
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    12. NERC explained that the revised Reliability Standards 
``represent substantial improvements over existing Reliability 
Standards by helping to support more accurate and comprehensive 
calculation of Reporting

[[Page 44725]]

ACE and satisfying all remaining Commission directives for Reliability 
Standards BAL-005 and BAL-006.'' \19\ Further, NERC maintained that 
Reliability Standard BAL-005-1 is an improvement over the currently-
effective version, BAL-005-0.2b, because it ``consolidates unnecessary 
or repetitive Requirements and moves certain metrics for calculating 
Reporting ACE to the revised, proposed definition of Reporting ACE.'' 
\20\ Among other things, NERC proposed to move requirements applicable 
to generator operators and transmission operators in currently-
effective Reliability Standard BAL-005-0.2b, into a more appropriate 
Reliability Standard, explaining that ``[a]s the purpose of FAC-001-3 
is more commensurate with interconnection responsibilities, 
interconnection procedures contained in currently effective BAL-005-
0.2b should be included in proposed Reliability Standard FAC-001-3.'' 
\21\
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    \19\ Id. at 12.
    \20\ Id. at 13.
    \21\ Id. at 23.
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    13. In addition, NERC asserted that Reliability Standard BAL-005-1 
improves on the currently-effective version of the Reliability Standard 
because proposed Requirement R2 clarifies the performance expectations 
for notification to reliability coordinators when a balancing authority 
is unable to calculate Reporting ACE for 30 minutes or more,\22\ and 
Requirement R5 ``introduces a new obligation . . . to assure the 
availability of a BA's system used to calculate Reporting ACE,'' 
requiring a minimum availability of 99.5 percent in each calendar 
year.\23\
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    \22\ Id. at 16.
    \23\ Id. at 19.
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    14. NERC stated that the package of revisions reflected in its 
petition addresses the outstanding directives related to Reliability 
Standards BAL-005 and BAL-006 from Order No. 693. Specifically, NERC 
stated that the title of Reliability Standard BAL-005-1 has been 
modified from Automatic Generation Control to Balancing Authority 
Control ``to reflect the connection to Reporting ACE and resource-
neutral requirements.'' \24\ In addition, NERC indicated that it has 
revised the definition of Automatic Generation Control to ensure a 
resource-neutral process for controlling demand and resources.\25\
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    \24\ Id. at 13 (referencing Order No. 693, FERC Stats. & Regs. ] 
31,242 at P 404, and noting that the Commission's directive related 
to resource-neutrality for regulating reserves is now moot, as 
Requirement R2 of Reliability Standard BAL-005-0.2b, which required 
entities to maintain regulating reserves, has been retired).
    \25\ Id. at n.39.
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    15. NERC also stated that the requirements of Reliability Standard 
BAL-005-1 all have a ``medium'' violation risk factor, thereby 
addressing the Commission's directive to revise the violation risk 
factor for Reliability Standard BAL-005-0, Requirement R17 to 
``medium.'' \26\ Similarly, NERC asserted that it met the directive to 
consider Xcel and FirstEnergy's comments about the scope of Requirement 
R17, which set minimum accuracy requirements for time error and 
frequency devices, by retiring part of the currently-effective 
requirement and moving the minimum accuracy requirements into 
Requirement R3 of Reliability Standard BAL-005-1. NERC maintained that 
this response has ``streamlined obligations to use specific frequency 
metering equipment that is necessary for operation of [automatic 
generation control (AGC)] and accurate calculation of Reporting ACE, as 
this ensures that costs associated with implementation are commensurate 
with reliability benefit.'' \27\
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    \26\ Id. at 17; see also North American Elec. Reliability Corp., 
121 FERC ] 61,179, at P 58 (2007).
    \27\ NERC Petition at 18.
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    16. NERC proposed to move Requirement R3 from currently-effective 
Reliability BAL-006-2 into Reliability Standard BAL-005-1, but NERC 
proposed to retire the rest of the requirements of Reliability Standard 
BAL-006-2 (Requirements R1, R2, R4, and R5). NERC stated that the 
standard drafting team determined that, aside from Requirement R3, each 
of the requirements in Reliability Standard BAL-006-2 are ``energy 
accounting standards'' and/or are ``administrative'' in nature, and 
should accordingly be retired.\28\
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    \28\ Id. at 25-26.
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    17. NERC acknowledged that the Commission previously directed it to 
develop measures concerning the accumulation of large inadvertent 
imbalances, based on the Commission's concern that large imbalances may 
indicate an underlying problem. NERC explained, however, that the 
requirements of Reliability Standard BAL-001-2, which require balancing 
authorities to maintain clock-minute ACE within the Balancing Authority 
ACE Limit, as well as the requirements of Reliability Standard BAL-003-
1 and proposed Reliability Standard BAL-002-2, which require entities 
to restore Reporting ACE within predefined bounds, prevent any 
excessive dependency on other entities. As NERC explained in its 
petition:
    Because entities are supporting frequency through this coordinated 
suite of reliability standards, entities will not excessively depend on 
other entities in the Interconnection such that the purely economic 
issue that was addressed by BAL-006-2 becomes a reliability issue for a 
NERC Reliability Standard.\29\
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    \29\ Id. at 27.
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    18. In order to address ``any remaining or potential concerns with 
retirement of BAL-006-2,'' NERC proposed that the retirement become 
effective only upon the Operating Committee's approval of an 
Inadvertent Interchange Guideline document.\30\ NERC stated that the 
Inadvertent Interchange Guideline document was based on a white paper 
developed by the standard drafting team for Reliability Standards BAL-
005 and BAL-006, and maintained that it provides an in-depth 
justification for why a NERC Reliability Standard is not necessary for 
inadvertent interchange.
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    \30\ The Inadvertent Interchange Guideline document was 
subsequently approved by the NERC Operating Committee, on December 
13, 2016. See NERC, Reliability Guideline: Inadvertent Interchange 
(Dec. 13, 2016, http://www.nerc.com/comm/OC/Reliability%20Guideline%20DL/Reliability_Guideline_Inadvertent_Interchange.pdf.
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    19. With respect to the three proposed definitions that remain at 
issue in this proceeding, NERC explained that: (1) ``Automatic 
Generation Control'' has been revised to set forth a resource-neutral 
process for controlling demand and resources; (2) ``Pseudo-Tie'' has 
been updated to reflect the use of the term ``Reporting ACE;'' and (3) 
``Balancing Authority'' has been revised to more accurately describe a 
balancing authority's resource demand function.

C. NERC Supplemental Filing

    20. On June 14, 2016, NERC submitted supplemental information in 
support of its April 20, 2016 petition (Supplemental Filing), to 
provide additional explanation and support for the retirement of 
Requirement R15 in currently-effective Reliability Standard BAL-005-
0.2b.\31\ In its Supplemental Filing, NERC maintained that Requirement 
R15 should be retired because the objectives of that requirement (i.e., 
to ensure the continued operation of AGC and certain data recording 
equipment during the loss of normal power supply) are being addressed 
through other Reliability Standards and requirements. Specifically, 
NERC maintained that

[[Page 44726]]

Reliability Standard EOP-008-1 requires a balancing authority to have a 
backup control center facility and an operating plan that allows it to 
meet its functional obligations with regard to the reliable operation 
of the bulk electric system in the event that its primary control 
center functionality is lost.\32\
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    \31\ As NERC notes in its Supplemental Filing, NERC stated in 
its initial petition that ``Requirements R2, R7 and R15 . . . are 
redundant, ineffective, and should be retired based on Commission-
approved Paragraph 81 Criteria.'' NERC Supplemental Filing at 1 
(quoting NERC Petition at 15).
    \32\ NERC Supplemental Filing at 2.
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    21. In addition, NERC maintained that the proposed performance 
requirements of Requirement R3 of Reliability BAL-005-1, which would 
require balancing authorities to ``use frequency metering equipment for 
the calculation of Reporting ACE that is available a minimum of 99.95% 
of each calendar year,'' will help to ensure that balancing authorities 
can continuously operate the equipment necessary for the calculation of 
Reporting ACE, effectively eliminating the need for Requirement 
R15.\33\
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    \33\ Id. at 4.
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D. Notice of Proposed Rulemaking and Data Request

    22. On September 22, 2016, the Commission issued a notice of 
Proposed Rulemaking proposing to approve Reliability Standards BAL-005-
1 and FAC-001-3, as replacements for the existing versions of those 
standards, and to approve the retirement of Reliability Standard BAL-
006-2 on the latter of the effective date of BAL-005-1 or the NERC 
Operating Committee's approval of an Inadvertent Interchange Guideline. 
In the NOPR, the Commission raised several questions about the impact 
of eliminating Requirement R15 from currently-effective Reliability 
Standard BAL-005-0.2b, which requires responsible entities to maintain 
and periodically test backup power supplies at primary control centers 
and other critical locations.\34\ The Commission indicated that, 
depending on the information received in comments in response to its 
questions, it may decide to issue a directive to restore the substance 
of Requirement R15 as part of a final rule.\35\
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    \34\ NOPR, 156 FERC ] 61,210 at PP 26-33.
    \35\ Id. P 25.
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    23. Five sets of comments were filed in response to the NOPR.\36\ 
Subsequently, the Commission staff issued a data request to NERC 
seeking additional information about the current practices of a 
representative sample of entities concerning the use of backup power 
supplies.\37\ Specifically, the Commission sought further information 
from a sample of existing balancing authorities, reliability 
coordinators, and transmission operators related to the kinds of backup 
power supply they maintain at control centers and other critical 
locations, including current testing practices for those backup power 
supplies. NERC submitted its response to the data request on April 7, 
2017.
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    \36\ The Appendix lists the entities that submitted comments and 
the shortened names used throughout this Final Rule to describe 
those entities.
    \37\ Data Request in Response to Petition Seeking Approval of 
Reliability Standards BAL-005-1 and FAC-001-3, Docket No. RM16-13-
000 (March 7, 2017) (March 7 Data Request).
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II. Discussion

    24. Pursuant to FPA section 215(d)(2), the Commission approves 
Reliability Standards BAL-005-1 and FAC-001-3 as just, reasonable, not 
unduly discriminatory or preferential, and in the public interest. 
Reliability Standard BAL-005-1 and FAC-001-3 will enhance reliability 
as compared to currently-effective Reliability Standards BAL-005-0.2b 
and FAC-001-2, because the Reliability Standards clarify and 
consolidate existing requirements related to frequency control. In 
addition, Reliability Standard BAL-005-1 supports more accurate and 
comprehensive calculation of Reporting ACE by requiring timely 
reporting of an inability to calculate Reporting ACE (Requirement R2) 
and by requiring minimum levels of availability and accuracy for each 
balancing authority's system for calculating Reporting ACE (Requirement 
R5).
    25. We also approve the violation risk factors and violation 
severity levels associated with Reliability Standards BAL-005-1 and 
FAC-001-3; the revisions to the definitions of Automatic Generation 
Control, Pseudo-Tie, and Balancing Authority as proposed by NERC; the 
retirement of Reliability Standards BAL-005-0.2b, FAC-001-2, and BAL-
006-2 in accordance with NERC's implementation plan; \38\ and NERC's 
implementation plans for proposed Reliability Standards BAL-005-1 and 
FAC-001-3.
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    \38\ As discussed above, NERC requested that the retirement of 
Reliability Standard BAL-006-2 become effective upon the latter of 
the effective date of proposed Reliability Standard BAL-005-1 and 
the NERC Operating Committee's approval of the Inadvertent 
Interchange Guideline document. Because the NERC Operating Committee 
has now approved the guideline document, we approve the retirement 
of BAL-006-2 as of the date BAL-005-1 goes into effect.
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    26. As discussed below, the Commission determines not to direct 
NERC to restore the requirement, currently found in Requirement R15 of 
Reliability Standard BAL-005-0.2b, to maintain and test backup power 
supplies at primary control centers and other critical locations at 
this time.

A. Reliability Standards BAL-005-1 and FAC-001-3 NOPR

    27. In the NOPR, the Commission proposed to approve Reliability 
Standards BAL-005-1 and FAC-001-3. The Commission noted that the 
modified Reliability Standards would clarify and consolidate existing 
requirements related to frequency control, and that Reliability 
Standard BAL-005-1 would support more accurate and comprehensive 
calculation of Reporting ACE.
Comments
    28. NERC, Trade Associations, and BPA submitted comments in support 
of the Commission's proposal to approve Reliability Standards BAL-005-1 
and FAC-001-3. NERC maintains, as it did in its petition and 
supplemental filing, that the modified Reliability Standards not only 
address all remaining directives related to BAL-005 and BAL-006, but 
also ``substantially improve existing frequency control requirements 
and support stronger frequency control performance.'' \39\ Similarly, 
Trade Associations argue that the Reliability Standards will support 
more accurate and comprehensive calculation of Reporting ACE, as the 
Commission recognized in the NOPR.\40\
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    \39\ NERC Comments at 4.
    \40\ Trade Associations Comments at 4.
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Commission Determination
    29. We approve Reliability Standards BAL-005-1 and FAC-001-3. As 
proposed in the NOPR, the Commission determines that the modified 
Reliability Standards will, overall, enhance reliability by clarifying 
and consolidating existing requirements related to frequency control. 
Specifically, the Reliability Standards will support more accurate and 
comprehensive calculation of Reporting ACE by requiring timely 
reporting of an inability to calculate Reporting ACE and by requiring 
balancing authorities to maintain minimum levels of annual availability 
of 99.5 percent for each balancing authority's system for calculating 
Reporting ACE.

B. Retirement of Reliability Standard BAL-005-0.2b, Requirement R15 
NOPR

    30. The NOPR observed that Reliability Standard BAL-005-1 does not 
include a requirement comparable to currently-effective Requirement R15 
of Reliability Standard BAL-005-0.2b, which states as follows:

    The Balancing Authority shall provide adequate and reliable 
backup power supplies and shall periodically test these supplies at 
the Balancing Authority's control center and

[[Page 44727]]

other critical locations to ensure continuous operation of AGC and 
vital data recording equipment during loss of the normal power 
supply.\41\
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    \41\ See NOPR, 156 ] 61,210 at P 26.

    31. The NOPR recognized that the approach taken in Reliability 
Standard BAL-005-1, when combined with the requirements of other 
Reliability Standards requiring entities to meet their functional 
obligations in the event of the loss of a primary control center, was 
intended to be a more performance-based approach to ensuring reliable 
operation of the bulk electric system.\42\ However, the Commission 
expressed concern that the objectives of Requirement R15 would not be 
fully met by the other Reliability Standards and requirements NERC had 
identified, and in particular pointed out the following potential gap:
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    \42\ Id. at 30.

    Requirement R15 of currently-effective Reliability Standard BAL-
005-0.2b helps to ensure continued operability of balancing 
authorities' primary control centers, despite the loss of normal 
power supply, without evacuation to or activation of backup control 
centers. Thus, this provision appears to provide additional 
robustness in the primary control center and mitigates the risk of 
problems occurring in the transition to a secondary control 
center.\43\
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    \43\ Id. P 31.

    The NOPR also pointed out that balancing authorities currently 
appear to be the only type of functional entity explicitly required to 
have and to test adequate and reliable backup supply at critical 
locations, and that there is no provision parallel to Requirement R15 
for reliability coordinators or transmission operators.\44\
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    \44\ Id. P 30.
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    32. The NOPR requested comments from NERC and others on the 
retirement of Requirement R15 of Reliability Standard BAL-005-0.2b, 
specifically asking for comment on the benefits and potential burden of 
retaining Requirement R15, and an explanation as to why there is no 
parallel to Requirement R15 for reliability coordinators and 
transmission operators, including whether any reason exists to 
distinguish between balancing authorities and other entities that may 
operate a control center or critical facility.\45\ In addition, the 
Commission asked commenters to respond to six specific questions 
regarding the impact of retiring Requirement R15; current practices 
with respect to backup power supply at control centers; and the scope 
of other requirements identified by NERC as fulfilling the same 
objectives as current Requirement R15.\46\
---------------------------------------------------------------------------

    \45\ Id. P 32.
    \46\ Id. P 33.
---------------------------------------------------------------------------

Comments
    33. NERC, Trade Associations, and BPA maintain that Requirement R15 
should be retired without further directive from the Commission, as the 
results-based requirements of Reliability Standard BAL-005-1 represent 
a more comprehensive and superior approach. NERC asserts that 
Reliability Standard EOP-008-1's results-based or functionality-based 
approach is preferable overall,\47\ while Trade Associations and other 
commenters point out that the performance levels required in 
Reliability Standard BAL-005-1, Requirements R3 and R5, cannot be 
achieved without having critical backup systems, including a backup 
power supply that is routinely maintained and tested.\48\
---------------------------------------------------------------------------

    \47\ NERC Comments at 8-9.
    \48\ Trade Associations Comments at 8; see also BPA Comments at 
4.
---------------------------------------------------------------------------

    34. NERC contends that the existing requirements of R15 focus on 
only one factor contributing to reliable control center performance 
(i.e., backup power supplies), while Reliability Standard BAL-005-1 
includes two performance obligations ``that subsume requirement R15.'' 
\49\ Specifically, NERC points out that Requirement R3 requires 
balancing authorities to use frequency metering equipment for 
calculation of Reporting ACE that is available at least 99.95 percent 
annually, with minimum accuracy of 0.001 Hz, and Requirement R5 
requires that each system used by a balancing authority to calculate 
Reporting ACE also be available at least 99.5 percent annually. NERC 
states that these performance obligations, which provide no exceptions 
and include other critical elements such as data acquisition and 
communications, frequency metering, and ACE calculation systems, 
contrast with existing Requirement R15, which focuses on only one 
component (power supply) that contributes to performance.\50\ In 
addition, NERC maintains that new Requirement R3 ``will ensure virtual 
`continuous operation of AGC and vital data recording equipment during 
loss of the normal power supply,' '' thereby effectively replacing 
Requirement R15.\51\
---------------------------------------------------------------------------

    \49\ NERC Comments at 5; Trade Associations Comments at 7-9.
    \50\ NERC Comments at 6; see also Trade Associations Comments at 
8 (asserting that Reliability Standard BAL-005-1's required minimum 
performance level for calculating ACE ``provides real performance 
measures that far exceed'' the current requirements of BAL-005-0.2b, 
and that ``entities will not be able to ensure that they can achieve 
this level of performance without having critical backups,'' 
including reliable backup power).
    \51\ Id. at 6 (responding to NOPR Question 5).
---------------------------------------------------------------------------

    35. NERC also maintains, as it did in its petition, that 
Requirement R15 should be retired, as it is redundant with broader 
obligations imposed on balancing authorities, reliability coordinators, 
and transmission operators in Reliability Standard EOP-008-1. NERC 
contends that applicable entities cannot comply with Reliability 
Standard EOP-008-1 without addressing power sources, although NERC 
acknowledges that backup power supply may not always be necessary to 
support the required backup functionality for control center functions. 
NERC further points out that the functionality obligations under 
Requirement R1 of Reliability Standard EOP-008-1 include the obligation 
to address operation of vital equipment necessary for the collection of 
data to calculate Reporting ACE, assuming frequency metering equipment 
does not meet the minimum performance requirement under new Requirement 
R3 of BAL-005-1.\52\ Overall, NERC maintains that Requirements R1 and 
R7 of Reliability Standard EOP-008-1 ``are broader and clearer than 
Requirement R15, by requiring [applicable entities] to have in place 
and test Operating Plans that address all elements (including any power 
sources) necessary for backup functionality.'' \53\
---------------------------------------------------------------------------

    \52\ Id. at 8-9 (responding to NOPR Question 6).
    \53\ Id. at 10.
---------------------------------------------------------------------------

    36. Trade Associations maintain, on a more general level, that 
overly-prescriptive requirements can be burdensome and often 
ineffective. Trade Associations assert that in determining whether 
there is adequate justification for the retirement of Requirement R15, 
the Commission should assess ``whether [the new and remaining] 
requirements have sufficient rigor to ensure [bulk electric system] 
reliability through the continuous efforts to design, build and 
maintain systems to achieve the desired level of performance.'' \54\ 
Trade Associations note that NERC's Independent Expert Review Panel 
concluded that results-based Reliability Standards would improve 
overall reliability.\55\ Moreover, Trade Associations contend that the 
absence of a recommendation by the Independent Expert Review Panel to 
retire Requirement R15 as part of its 2013 report has no bearing on the 
question of

[[Page 44728]]

retirement now, given the improvements and enhancements associated with 
Reliability BAL-005-1. Finally, Trade Associations raise a concern that 
the Commission may be misconstruing Reliability Standard BAL-005-0.2b 
to address a reliability concern beyond that intended for BAL-005. 
Trade Associations maintain that the BAL-005 Reliability Standards 
``were written for the express purpose of ensuring [balancing 
authorities] can reliably and effectively calculate Reporting ACE in 
order to maintain resource and demand balance within their area of 
responsibility.'' \56\
---------------------------------------------------------------------------

    \54\ Trade Associations Comments at 6-7.
    \55\ Id. at 7 (citing Standards Independent Expert Review 
Project; Chapter 5; Conclusions; at 18).
    \56\ Id. at 7.
---------------------------------------------------------------------------

    37. As to what obligations would still exist under Reliability 
Standard EOP-008-1 if the backup power supply obligation in Requirement 
R15 was retired, NERC, Trade Associations, and all other commenters 
addressing the question acknowledge that EOP-008-1 does not require 
applicable entities to have backup power supply at the primary or the 
secondary control center.\57\ However, NERC asserts that backup 
functionality obligations under Requirement R1 of Reliability Standard 
EOP-008-1 ``include the obligation to address operation of vital 
equipment necessary for the collection of data to calculate Reporting 
ACE if frequency metering equipment does not meet the minimum 
performance requirements under proposed R3 of BAL-005-1.'' \58\ By 
contrast, the Trade Associations acknowledge that Reliability Standard 
EOP-008-1 does not ensure continuous operation of AGC and vital data 
recording equipment during the loss of normal power supply.\59\
---------------------------------------------------------------------------

    \57\ NERC notes, for example, that Reliability Standard EOP-008-
1, Requirement R1 requires entities to address power and backup 
power as part of their emergency plans, but acknowledges that it 
does not necessarily require backup power at either the primary or 
secondary control center. See also Trade Associations at 12; BPA at 
3 (stating that without R15, BPA ``does not believe there is an 
enforceable requirement to have a backup power supply to support 
frequency metering equipment'').
    \58\ NERC Comments at 8-9 (responding to NOPR Question 6).
    \59\ Trade Associations Comments at 16.
---------------------------------------------------------------------------

    38. With respect to the NOPR's questions on current practices 
regarding backup power supply, BPA and Idaho Power indicate that they 
have backup power supply at all of their primary and secondary control 
centers.\60\ Trade Associations state that most companies have many 
layers of backup to ensure continued control center functionality, 
which may include backup power, backup generators and uninterrupted 
power supply.\61\ In response to the NOPR's questions about the 
definition of ``critical location'' as currently used in Reliability 
Standard BAL-005-0.2b, Trade Associations state that the ``other 
critical locations'' referenced in current requirement R15 could refer 
to frequency metering equipment (including equipment outside the 
control center), ancillary computer rooms with energy management 
systems (EMS) and EMS backups, and other data systems needed for ACE 
calculation.\62\
---------------------------------------------------------------------------

    \60\ BPA Comments at 3; Idaho Power Comments at 3.
    \61\ Trade Associations Comments at 14.
    \62\ Id. at 14.
---------------------------------------------------------------------------

    39. With respect to the benefits and burdens of having backup power 
supply at certain locations, Idaho Power acknowledges the benefits of 
having backup power supply at primary control centers and other 
critical locations (including the benefit of ensuring compliance with 
other reliability requirements), and it states that the potential 
impact to reliability is no different for reliability coordinators or 
transmission operators.\63\ Trade Associations maintain, however, that 
there is no need for additional requirements for reliability 
coordinators and transmission operators related to backup power supply, 
because other Reliability Standards require or encourage certain levels 
of reliability and functionality at these locations, as evidenced by 
the historical lack of problems with loss of EMS or loss of power 
supply at control centers.\64\
---------------------------------------------------------------------------

    \63\ Idaho Power Comments at 2.
    \64\ Trade Associations Comments at 9-11.
---------------------------------------------------------------------------

    40. Appelbaum primarily discusses the importance of backup power 
supplies in the context of communications networks. Appelbaum points to 
a report issued by the Federal Communications Commission in response to 
the June 2012 ``derecho'' event on communications networks and services 
in Virginia. The report found that communications were disrupted in 
large part during that event because of avoidable planning and system 
failures, including the lack of functional backup power, notably in 
central offices. Appelbaum contends, based on the derecho event, that 
the need to properly plan and design backup power is a critical 
component of reliability, and asks that the findings of the derecho 
event be considered when the Commission assesses the functional 
approach of Reliability Standard EOP-008-1.\65\ Appelbaum points out 
that ``there is no specific mention of the performance requirements of 
the backup power supply, the required design, or reference to an 
Industry Standard'' in Reliability Standard EOP-008-1, which ``creates 
a degree of ambiguity that can be exploited to avoid installing a 
sufficient level of redundancy in power supplies.'' \66\ Appelbaum 
further states the requirement for backup power design and testing 
should extend to reliability coordinators, transmission operators, and 
balancing authorities.\67\ In sum, Appelbaum's comments stress the 
overall need to impose specific requirements, not merely functional 
obligations, related to backup power supply for critical systems.
---------------------------------------------------------------------------

    \65\ See Appelbaum Comments at 4.
    \66\ Id.
    \67\ Id. at 5.
---------------------------------------------------------------------------

Response to Data Request
    41. In response to the Commission's March 7 Data Request requesting 
information on specific backup supply practices from a sampling of 
registered entities, NERC indicated that it collected data from nine 
entities, all registered as a balancing authority, reliability 
coordinator, transmission operator, or some combination of those 
functional categories. NERC indicated that the sample reflected some 
diversity as to size and type of entity and, therefore, the information 
``should be reflective of current practices throughout the industry.'' 
\68\
---------------------------------------------------------------------------

    \68\ NERC Response to Data Request at 3.
---------------------------------------------------------------------------

    42. NERC's response indicates that all surveyed entities have 
backup power supplies at their primary and backup control centers. A 
number of entities responded that these backup supplies were installed 
prior to the effective date of NERC's mandatory Reliability Standards, 
and that they would not change their practices if the Commission 
approved the retirement of Requirement R15 of Reliability Standard BAL-
005-0.2b. NERC reported that the surveyed entities have backup power 
supply at a number of other critical locations, which include data 
centers, corporate facilities, and operations centers (e.g., those 
housing cyber and physical security operations). NERC indicated that 
the surveyed entities have two types of backup power supplies at their 
control centers: backup generators and uninterruptible power supplies. 
According to NERC, each of the surveyed entities reported that it 
regularly tests its backup power supplies in accordance with written 
procedures, the majority doing monthly run testing. NERC reported that 
some entities also perform switchover or transfer testing on a monthly 
basis, while others perform such testing at longer intervals.

[[Page 44729]]

Commission Determination
    43. We approve the retirement of Reliability Standard BAL-005-0.2b, 
including Requirement R15, upon the effective date of Reliability 
Standard BAL-005-1. Based on the NOPR comments, we determine not to 
direct NERC to develop modifications to the Reliability Standards to 
restore the substance of Requirement R15 at this time. We conclude that 
the performance obligations of Reliability Standards BAL-005-1 and EOP-
008-1 will ensure the continued operation of AGC and certain data 
recording equipment during the loss of normal power supply. Moreover, 
based on the responses to the March 7 Data Request, we are satisfied 
that backup power supplies at primary and secondary control centers and 
other critical locations will likely continue to be used even after the 
retirement of Reliability Standard BAL-005-0.2b, Requirement R15. 
Should that practice change to the detriment of Bulk-Power System 
reliability after the revised Reliability Standards go into effect, the 
Commission may revisit this issue.

III. Information Collection Statement

    44. The Paperwork Reduction Act (PRA) \69\ requires each federal 
agency to seek and obtain Office of Management and Budget (OMB) 
approval before undertaking a collection of information directed to ten 
or more persons, or contained in a rule of general applicability. The 
OMB regulations require that OMB approve certain reporting and 
recordkeeping (collections of information) imposed by an agency.\70\ 
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.
---------------------------------------------------------------------------

    \69\ 44 U.S.C. 3501-3520.
    \70\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    45. This Final Rule approves revisions to Reliability Standards 
BAL-005, associated with FERC-725R, and FAC-001, associated with FERC-
725D. These revisions streamline and clarify the current requirements 
related to the calculation of Reporting ACE, a key frequency control 
and reliability indicator factor, including consolidating the seventeen 
requirements of currently-effective Reliability Standard BAL-005-0.2b, 
associated with FERC-725R, into seven requirements in Reliability 
Standard BAL-005-1; relocation of certain requirements related to 
interconnection requirements for transmission owners and generation 
owners into Reliability Standard FAC-001-3; relocation of Requirement 
R3 in currently-effective Reliability Standard BAL-006-2 into 
Reliability Standard BAL-005-1; and relocation of certain metrics and 
calculations required for calculating Reporting ACE into the NERC 
definition of Reporting ACE and its component definitions.
    46. The revisions to Reliability Standards BAL-005 and FAC-001 will 
not result in an increase in the record-keeping and reporting 
requirements imposed on balancing authorities, other than the one-time 
cost of administering the change to the revised Reliability Standards. 
All other recordkeeping and reporting obligations imposed on balancing 
authorities under the modified requirements essentially track those 
that already exist under currently-effective Reliability Standards BAL-
005-0.2b and FAC-001-2. The modifications to Reliability Standard FAC-
001-3 will result in a limited increase in the record-keeping and 
reporting requirements imposed on those transmission owners and 
generator owners that are not also transmission operators and generator 
operators (an estimated 161 entities in the United States), as shown in 
the chart below.\71\ Many of the modifications to the Reliability 
Standards reflected in this Final Rule were developed to help clarify 
and streamline existing requirements related to calculation of 
Reporting ACE, and they are expected to reduce these entities' overall 
burden with respect to recordkeeping, reporting, and compliance. 
Moreover, the Final Rule approves the retirement of the majority of the 
requirements in Reliability Standard BAL-006-2, further reducing the 
overall record-keeping and reporting requirements for balancing 
authorities. Accordingly, the Commission estimates that the overall 
change in the record-keeping and reporting requirements as a result of 
this Final Rule will be de minimis on a per-entity basis.
---------------------------------------------------------------------------

    \71\ Reliability Standard FAC-001-3 replaces and strengthens 
currently-effective Reliability Standard FAC-001-2 by moving 
currently-effective Requirement R1 of Reliability Standard BAL-005-
0.2b to Reliability Standard FAC-001-3, requiring that transmission 
owner and generator owner interconnection requirements include 
procedures for confirming that new or materially modified facilities 
connecting to the bulk electric system are within a balancing 
authority's metered boundaries. NERC explains that these 
interconnection requirements should be relocated to Reliability 
Standard FAC-001-3, as FAC-001-3 establishes facility 
interconnection requirements.
---------------------------------------------------------------------------

    47. Public Reporting Burden: The changes reflected in Reliability 
Standard BAL-005-1 are not expected to result in an increase in the 
annual record-keeping and reporting requirements on applicable entities 
(balancing authorities). However, balancing authorities will have to 
perform a one-time review of the modified Reliability Standard to 
ensure that their compliance practices (including record-keeping) are 
consistent with the revised requirements. The relocation of Requirement 
R1 of Reliability Standard BAL-005-0.2b into Reliability Standard FAC-
001-3 will result in an increase in the number of entities subject to 
the requirement, as the requirement will be applicable to transmission 
owners and generator owners rather than transmission operators and 
generator operators. However, this limited increase in annual record-
keeping and reporting burden, along with the one-time burden of 
administering the change from Reliability Standard BAL-005-0.2b to BAL-
005-1, is expected to be offset to some extent by the decrease in 
record-keeping and reporting burden associated with the retirement of 
Reliability Standard BAL-006-2.

----------------------------------------------------------------------------------------------------------------
                                                                                      Average     Annual  burden
                                   Number of        Number of      Total  number   burden hours      hours and
       Data collection         respondents \72\   responses per    of  responses   and cost per    total annual
                                                    respondent                     response \73\     cost \74\
FERC-725A, 725D & 725R1        (1).............  (2)............     (1) x (2) =             (4)     (3) x (4) =
(modifications in RM16-13-                                                   (3)                             (5)
 000)
----------------------------------------------------------------------------------------------------------------
BAL-005-1 (FERC-725R1).......  BA..............  1 (one-time)...              99               1              99
                               99..............  ...............  ..............          $64.29       $6,364.71
FAC-001-3 R3 (FERC-725D).....  GO/TO...........  1 (annual).....             161               1             161
                               161 \75\........  ...............  ..............         $102.04      $16,428.44

[[Page 44730]]

 
Retirement of current          BA..............  -1 (annual)....             -99              -1             -99
 standard BAL-006-02 (FERC-    99..............  ...............  ..............         -$37.75      -$3,737.25
 725A).
                                                                 -----------------------------------------------
    Total....................  ................  ...............  ..............  ..............             260
                                                                                                      $19,055.90
----------------------------------------------------------------------------------------------------------------

    Title: FERC-725A, Mandatory Reliability Standards for the Bulk-
Power System; FERC-725D, Mandatory Reliability Standards: FAC 
Reliability Standards; FERC-725R1, Mandatory Reliability Standards: BAL 
Reliability Standards

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

    \72\ The estimated number of respondents is based on the NERC 
compliance registry as of April 7, 2017. According to the NERC 
compliance registry, there are 64 U.S. balancing authorities (BA) in 
the Eastern Interconnection, 34 balancing authorities in the Western 
Interconnection and one balancing authority in the Electric 
Reliability Council of Texas (ERCOT).
    \73\ The burden hours and cost are based on the hourly cost for 
an engineer for BAL-005-1, the average of the hourly cost for an 
engineer and clerical staff for FAC-001-3, and the hourly cost for 
clerical staff for changes associated with the retirement of BAL-
006-2. The estimates for cost per hour are based on 2015 wage 
figures and derived as follows:
    $64.29/hour, the average salary plus benefits per engineer (from 
Bureau of Labor Statistics at https://www.bls.gov/oes/current/naics2_22.htm);
    $37.75/hour, the average salary plus benefits per information 
and record clerks (from Bureau of Labor Statistics at https://www.bls.gov/oes/current/naics2_22.htm).
    \74\ Solely for purposes of determining the overall annual cost 
of the record-keeping and reporting changes reflected in this Final 
Rule, the one-time cost associated with administering the change to 
Reliability Standard BAL-005-1 is being treated as an annual cost.
    \75\ Per the NERC compliance registry, in the United States 
there are 54 generator owners (GO) that are not also generator 
operators and 107 transmission owners (TO) that are not also 
transmission operators, for a total of 161 new entities in the 
United States subject to Reliability Standard FAC-001-3, Requirement 
R3.
---------------------------------------------------------------------------

    Action: Revision to existing collections.
    OMB Control No: 1902-0244 (FERC-725A); 1902-0247 (FERC-725D); TBD 
(FERC-725R1).
    Respondents: Business or other for-profit and not-for-profit 
institutions.
    Frequency of Responses: On-going.
    Necessity of the Information: The Commission has reviewed the 
requirements of Reliability Standards BAL-005-1 and FAC-001-3 and has 
made a determination that the requirements of these Reliability 
Standards are necessary to implement section 215 of the FPA.
    Internal Review: The Commission reviewed the revised Reliability 
Standards and made a determination that its action is necessary to 
implement section 215 of the FPA. The Commission has assured itself, by 
means of its internal review, that there is specific, objective support 
for the burden estimates associated with the information requirements.
    48. 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, e-mail: 
DataClearance@ferc.gov, phone: (202) 502-8663, fax: (202) 273-0873].
    49. 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 e-mail to: 
oira_submission@omb.eop.gov. Comments submitted to OMB should include 
FERC-725A, FERC-725D, and FERC-725R1 and Docket Number RM16-13-000.

IV. Environmental Analysis

    50. 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.\76\ 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.\77\ The actions taken here 
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \76\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs., Regulations 
Preambles 1986-1990 ] 30,783 (1987).
    \77\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act Certification

    51. The Regulatory Flexibility Act of 1980 (RFA) \78\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA does not mandate any particular outcome in a rulemaking. It 
only requires consideration of alternatives that are less burdensome to 
small entities and an agency explanation of why alternatives were 
rejected. The Small Business Administration (SBA) revised its size 
standard effective January 22, 2014 for electric utilities from a 
standard based on megawatt hours to a standard based on the number of 
employees, including affiliates. Under SBA's size standards, some 
balancing authorities, generation owners, and transmission owners will 
fall under the following category and associated size threshold: 
Electric bulk power transmission and control, at 500 employees.\79\
---------------------------------------------------------------------------

    \78\ 5 U.S.C. 601-612.
    \79\ 13 CFR 121.201, Sector 22 (Utilities), NAICS code 221121 
(Electric Bulk Power Transmission and Control).
---------------------------------------------------------------------------

    52. As stated in the NOPR, the Commission estimates a very limited, 
one-time increase in recordkeeping and reporting burden on balancing 
authorities due to the changes in the revised Reliability Standards, 
with no other increase in the cost of compliance. Approximately 24 of 
the 99 balancing authorities are expected to meet the SBA's definition 
for a small entity. In addition, approximately 161 entities will be 
subject annually to new record-keeping and reporting requirements under 
revised Reliability Standard FAC-001-3, with no other increase in the 
cost of compliance.

[[Page 44731]]

    53. Even assuming that the one-time cost of compliance for 
administering the change from Reliability Standard BAL-005-0.2b to BAL-
005-1 is an annual cost, and assuming that all of the entities affected 
by the revisions to both BAL-005 and FAC-001 qualify as small entities, 
the estimated total annual cost to the industry as a whole is minimal 
($19,055.90), and the average cost per affected entity is $118.36.
    54. According to SBA guidance, the determination of significance of 
impact ``should be seen as relative to the size of the business, the 
size of the competitor's business, and the impact the regulation has on 
larger competitors.'' \80\ The Commission does not consider the 
estimated burden to be a significant economic impact. As a result, the 
Commission certifies that the revised Reliability Standards will not 
have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \80\ U.S. Small Business Administration, A Guide for Government 
Agencies How to Comply with the Regulatory Flexibility Act, at 18 
(May 2012), https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.
---------------------------------------------------------------------------

VI. Document Availability

    55. 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.
    56. 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.
    57. 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 e-mail at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

VII. Effective Date and Congressional Notification

    These regulations are effective November 27, 2017. The Commission 
has determined, with the concurrence of the Administrator of the Office 
of Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

    By the Commission.

    Issued: September 20, 2017
Nathaniel J. Davis, Sr.,
Deputy Secretary.

Appendix

List of Commenters

------------------------------------------------------------------------
              Abbreviation                          Commenter
------------------------------------------------------------------------
NERC...................................  North American Electric
                                          Reliability Corporation.
Trade Associations.....................  Edison Electric Institute,
                                          American Public Power
                                          Association, and Large Public
                                          Power Council.
BPA....................................  Bonneville Power
                                          Administration.
Idaho Power............................  Idaho Power Company.
Appelbaum..............................  Jonathan Appelbaum.
------------------------------------------------------------------------

[FR Doc. 2017-20554 Filed 9-25-17; 8:45 am]
 BILLING CODE 6717-01-P


