[Federal Register Volume 87, Number 225 (Wednesday, November 23, 2022)]
[Notices]
[Pages 71612-71620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25589]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RD22-4-000]


Before Commissioners: Richard Glick, Chairman; James P. Danly, 
Allison Clements, Mark C. Christie, and Willie L. Phillips; 
Registration of Inverter-Based Resources; Registration of Inverter-
Based Resources

    1. In order to address concerns regarding the reliability impacts 
of

[[Page 71613]]

inverter-based resources (IBR) \1\ on the Bulk-Power System,\2\ the 
Commission directs the North American Electric Reliability Corporation 
(NERC) to submit a work plan within 90 days of the issuance of this 
order describing, in detail, how it plans to identify and register 
owners and operators of IBRs that are connected to the Bulk-Power 
System, but are not currently required to register with NERC under the 
bulk electric system (BES) definition \3\ (referred to as 
``unregistered IBRs'' throughout this order) that have an aggregate,\4\ 
material impact on the reliable operation of the Bulk-Power System. The 
work plan should explain how NERC will modify its processes to address 
unregistered IBRs (whether by working with stakeholders to change the 
BES definition, a change to its registration program, or some other 
solution) within 12 months of approval of the work plan. The work plan 
should also include implementation milestones ensuring that owners and 
operators meeting the new registration criteria are identified within 
24 months of the approval date of the work plan, and that they are 
registered and required to comply with applicable Reliability Standards 
within 36 months of the approval date of the work plan. The work plan 
will be noticed for public comment. Once the Commission approves the 
proposed work plan, we direct NERC to file progress updates every 90 
days thereafter detailing NERC's progress towards identifying and 
registering owners and operators of unregistered IBRs.
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    \1\ This order uses the term IBRs to include all generating 
facilities that connect to the electric power system using power 
electronic devices that change direct current (DC) power produced by 
a resource to alternating current (AC) power compatible with 
distribution and transmission systems. This order does not address 
IBRs connected to the distribution system.
    \2\ The Bulk-Power System is defined in the Federal Power Act 
(FPA) as facilities and control systems necessary for operating an 
interconnected electric energy transmission network (or any portion 
thereof), and electric energy from generating facilities needed to 
maintain transmission system reliability. The term does not include 
facilities used in the local distribution of electric energy. 16 
U.S.C. 824o(a)(1).
    \3\ NERC's Commission-approved BES definition is a subset of the 
Bulk-Power System and defines the scope of the Reliability Standards 
and the entities subject to NERC compliance. Revisions to Elec. 
Reliability Org. Definition of Bulk Elec. Sys. & Rules of Proc., 
Order No. 773, 78 FR 804 (Jan. 4, 2013), 141 FERC ] 61,236 (2012), 
order on reh'g, Order No. 773-A, 78 FR 29209 (May 17, 2013), 143 
FERC ] 61,053 (2013) rev'd sub nom. People of the State of N.Y. v. 
FERC, 783 F.3d 946 (2d Cir. 2015) (rejecting New York's challenge to 
the presumptive threshold for local distribution lines at 100 kV, 
adopted for implementing Reliability Standards for the Bulk-Power 
System); NERC, Glossary of Terms Used in NERC Reliability Standards, 
5-7 (Mar. 29, 2022), https://www.nerc.com/pa/Stand/Glossary%20of%20Terms/Glossary_of_Terms.pdf (NERC Glossary).
    \4\ This order focuses on unregistered IBRs that may have 
smaller individual capacities but which, when considered together or 
in the aggregate, have a material impact on the reliability of the 
Bulk-Power System. Pursuant to its registration program, NERC may 
already register resources that have an individual material impact.
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    2. The Bulk-Power System generation resource mix is undergoing a 
rapid change, including the projected addition over the next decade of 
an ``unprecedented proportion of nonsynchronous resources,'' \5\ i.e., 
IBRs. According to NERC, the rapid integration of IBRs is ``the most 
significant driver of grid transformation'' on the Bulk-Power 
System.\6\ However, despite the potential for IBRs to have a 
significant aggregate impact on the Bulk-Power System, many of the 
owners and operators of these individual resources are not required to 
register with NERC or comply with NERC's mandatory Reliability 
Standards.
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    \5\ NERC, 2020 Long Term Reliability Assessment Report, 9 (Dec. 
2020), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2020.pdf.
    \6\ NERC, Inverter-Based Resource Strategy: Ensuring Reliability 
of the Bulk Power System with Increased Levels of BPS-Connected 
IBRs, 1 (Sep. 14, 2022), https://www.nerc.com/comm/Documents/NERC_IBR_Strategy.pdf (NERC IBR Strategy).
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    3. To identify which Bulk-Power System users, owners, and operators 
must register with NERC and comply with mandatory Reliability 
Standards, NERC applies its Commission-approved definition of BES. This 
definition identifies elements \7\ and groups of elements, including 
generation elements, that are necessary for the reliable planning and 
operation of the Bulk-Power System. The BES definition includes a 
``bright line'' for identifying all transmission elements operated at 
100 kV or higher and real and reactive power resources connected at 100 
kV or higher. After applying the bright line, the BES definition also 
lists a series of exceptions to the bright line that NERC may apply to 
either include within the BES elements that fall below the bright line 
(inclusions), or to exclude elements from the BES that meet the bright 
line (exclusions). The BES definition does not include facilities used 
in the local distribution of electric energy. Entities that use, own, 
or operate elements of NERC's approved definition of BES are users, 
owners, and operators of the Bulk-Power System and candidates for 
registration.\8\
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    \7\ ``Element'' is defined in the NERC Glossary as: ``Any 
electrical device with terminals that may be connected to other 
electrical devices such as a generator, transformer, circuit 
breaker, bus section, or transmission line. An element may be 
comprised of one or more components.'' NERC Glossary at 11.
    \8\ NERC Rules of Procedure, App. 5B (Statement of Compliance 
Registry) at 4.
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    4. Unregistered IBRs connecting to the Bulk-Power System do not 
meet the current BES definition, are not registered with NERC, and are 
not required to comply with Reliability Standards.\9\ While NERC has 
the capability to individually register unregistered IBRs connected to 
the Bulk-Power System through its materiality test, a non-exclusive 
series of factors used to assess whether an element has a material 
impact on reliability,\10\ NERC's materiality test is typically used to 
assess an individual entity's material impact and not the aggregate 
impact of a class of facilities. NERC has not, to date, applied the 
materiality test to unregistered IBRs to determine whether they have an 
aggregate material impact on the reliable operation of the Bulk-Power 
System.
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    \9\ NERC, Improvements to Interconnection Requirements for BPS-
Connected Inverter-Based Resources, at 1, (Sept. 2019) (IBR 
Interconnection Requirements Guideline) (reporting that the majority 
of newly interconnecting IBRs are either connecting at voltages less 
than 100 kV or with capacity less than 75 MVA and therefore do not 
meet the size criteria in the BES definition). All NERC Guidelines 
referenced in this order are available on NERC's website at https://www.nerc.com/comm/Pages/Reliability-and-Security-Guidelines.aspx.
    \10\ See NERC Rules of Procedure, App. 5B at 7-8 (listing a non-
exclusive set of factors (materiality test) for consideration in 
registration decisions).
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    5. In a series of reports detailing grid disturbances over the past 
six years, NERC has determined that the operational characteristics of 
IBRs, regardless of size, coupled with their equipment settings, may 
cause IBRs to reduce power output, whether by tripping offline \11\ or 
ceasing operation without tripping offline (known as ``momentary 
cessation''),\12\ both individually and in the aggregate, in response 
to a single fault on a transmission or sub-transmission system.\13\ For 
example, in the San

[[Page 71614]]

Fernando Disturbance Report, NERC found that many of the facilities 
that unexpectedly and adversely responded to the fault events were 
``non-BES solar PV [IBRs] that had a noticeable effect on [Bulk-Power 
System] performance in aggregate.'' \14\ This aggregate impact may 
occur when individual IBRs' controls and equipment protection settings 
are not configured or programmed to ride through \15\ system 
disturbances.\16\ These reports demonstrate that the potential for IBRs 
to have a material impact on the Bulk-Power System is not limited to 
larger IBRs that are typically required to register with NERC or to the 
IBRs within an individual balancing authority area. Additionally, 
simulations indicate that aggregate IBRs experiencing momentary 
cessation can lead to instability, uncontrolled separation, and voltage 
collapse.\17\ In areas of high IBR saturation, simulations indicate 
that this type of response may have an impact much greater than the 
most severe single contingency (i.e., the traditional worst-case N-1 
contingency) \18\ of a balancing authority area, potentially impacting 
a widespread area.\19\
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    \11\ Tripping offline is a mode of operation during which part 
of or the entire IBR disconnects from the Bulk-Power System and 
therefore cannot supply real and reactive power.
    \12\ Momentary cessation is a mode of operation during which the 
inverter remains electrically connected to the Bulk-Power System, 
but the inverter does not inject current during low or high voltage 
conditions outside the continuous operating range. As a result, 
there is no current injection from the inverter and therefore no 
active or reactive current (and no active or reactive power). NERC, 
Reliability Guideline BPS-Connected Inverter-Based Resource 
Performance, 11 (Sept. 2018) (IBR Performance Guideline).
    \13\ NERC's IBR disturbance event reports indicate that 
unregistered Bulk-Power System connected solar and wind IBRs 
(unregistered IBRs) experience identical power reduction and power 
loss issues. All NERC event reports referenced in this order are 
available on NERC's website at https://www.nerc.com/pa/rrm/ea/Pages/Major-Event-Reports.aspx.
    \14\ NERC and WECC, San Fernando Disturbance, 23 (Nov. 2020) 
(San Fernando Disturbance Report). While various NERC reports refer 
to ``non-BES'' to describe IBRs that fall below the BES definition 
threshold, we understand this term to be synonymous with 
``unregistered IBRs.''
    \15\ See Standardization of Generator Interconnection Agreements 
and Procedures, Order No. 2003, 68 FR 49846 (Aug. 19, 2003), 104 
FERC ] 61,103, at P 562 n.88 (2003) (defining ride through as ``a 
Generating Facility staying connected to and synchronized with the 
Transmission System during system disturbances within a range of 
over- and under-frequency[/voltage] conditions, in accordance with 
Good Utility Practice.'').
    \16\ See e.g., NERC and WECC, 900 MW Fault Induced Solar 
Photovoltaic Resource Interruption Disturbance Report, 19 (Feb. 
2018) (Canyon 2 Fire Event Report) (finding momentary cessation as a 
major cause for the loss of IBRs when voltages rose above 1.1 per 
unit or decreased below 0.9 per unit).
    \17\ NERC, Resource Loss Protection Criteria Assessment 
Whitepaper, at 1-2, key findings 4, 7, 8 (Feb. 2018), https://www.nerc.com/comm/PC/InverterBased%20Resource%20Performance%20Task%20Force%20IRPT/IRPTF_RLPC_Assessment.pdf.
    \18\ The most severe single contingency or the N-1 contingency 
generally refers to the concept that a system must be able to 
withstand an unexpected failure or outage of a single system 
component and maintain reliable service at all times. See NERC 
Glossary at 17 (defining ``most severe single contingency'').
    \19\ See, e.g., San Fernando Disturbance Report at vi (stating 
that ``[t]his event, as with past events, involved a significant 
number of solar photovoltaic (PV) resources reducing power output 
(either due to momentary cessation or inverter tripping) as a result 
of normally-cleared [Bulk-Power System] faults. The widespread 
nature of power reduction across many facilities poses risks to 
[Bulk-Power System] performance and reliability.'').
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    6. Therefore, we find that it is necessary to ensure that 
unregistered IBRs that may have an aggregate material impact on the 
reliable operation of the Bulk-Power System are required to: (1) 
register with NERC, and (2) comply with NERC Reliability Standards. 
Hence, we direct NERC, pursuant to our authority under FPA section 
215,\20\ to submit for Commission approval within 90 days a work plan 
describing in detail how NERC plans to identify and register 
unregistered IBRs that, in the aggregate, have a material impact on the 
reliable operation of the Bulk-Power System. The work plan should 
explain how NERC will modify its processes to encompass unregistered 
IBRs (whether by working with stakeholders to change the BES 
definition, a change to its registration program, or some other 
solution) within 12 months of approval of the work plan. The work plan 
should also include implementation milestones ensuring that 
unregistered IBR owners and operators meeting the new registration 
criteria are identified within 24 months of the approval date of the 
work plan, and that they are registered and required to comply with 
applicable Reliability Standards within 36 months of the approval date 
of the work plan. The work plan will be noticed for public comment. 
Once the Commission approves the work plan, NERC must file updates 
every 90 days thereafter detailing its progress towards identifying and 
registering owners and operators of IBRs (e.g., the number or 
percentage of entities identified and/or registered and anticipated 
completion date if changed, with an explanation of any such change).
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    \20\ 16 U.S.C. 824o(b)(1). See also 18 CFR 39.2(d) (2021) (the 
ERO shall provide the Commission information as necessary to 
implement section 215 of the FPA).
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    7. In view of the rapid growth of IBRs and their potential to 
materially impact the reliability of the Bulk-Power System (including 
the potential for unregistered IBRs to materially impact the 
reliability of the Bulk-Power System in the aggregate), we are issuing 
this order concurrently with a notice of proposed rulemaking that 
preliminary finds that the Reliability Standards do not fully address 
the impacts of IBRs on the reliable operation of the Bulk-Power System 
and that proposes to direct NERC to create new or modified Reliability 
Standards that address reliability concerns pertaining to IBRs.\21\ 
Together, these actions are necessary to ensure that the ongoing 
integration of IBRs does not adversely impact the reliable operation of 
the Bulk-Power System.
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    \21\ Reliability Standards to Address Inverter-based Resources, 
181 FERC ] 61,125 (2022).
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I. Background

A. Section 215 of the FPA

    8. Section 215 of the FPA provides that the Commission may certify 
an Electric Reliability Organization (ERO), the purpose of which is to 
establish and enforce Reliability Standards, subject to Commission 
review and approval.\22\ Once approved, the Reliability Standards may 
be enforced by the ERO, subject to Commission oversight, or by the 
Commission independently.\23\ Pursuant to section 215 of the FPA, the 
Commission established a process to select and certify an ERO,\24\ and 
subsequently certified NERC.\25\
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    \22\ 16 U.S.C. 824o.
    \23\ Id. 824o(e)(3).
    \24\ Rules Concerning Certification of the Elec. Reliability 
Org.; and Procs. for the Establishment, Approval, & Enforcement of 
Elec. Reliability Standards, Order No. 672, 71 FR 8662 (Feb. 17, 
2006), 114 FERC ] 61,104, order on reh'g, Order No. 672-A, 71 FR 
19814 (Apr. 18, 2006), 114 FERC ] 61,328 (2006).
    \25\ N. Am. Elec. Reliability Corp., 116 FERC ] 61,062 (2006), 
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) (certifying 
NERC as the ERO responsible for the development and enforcement of 
mandatory Reliability Standards).
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B. NERC Registration

    9. The Commission's regulations require each user, owner, and 
operator of the Bulk-Power System to be registered with the ERO and to 
comply with applicable Reliability Standards.\26\ NERC registers users, 
owners, and operators of the Bulk-Power System through either 
application of its BES definition or its materiality test.\27\ As 
explained by NERC's Rules of Procedure, ``any entity reasonably deemed 
material to the reliability of the [Bulk-Power System] will be 
registered, irrespective of other considerations.'' \28\ NERC 
determines whether an entity is ``deemed material'' through either 
application of its BES definition or its materiality test to an 
entity's facilities and elements. Once an entity is identified as a 
candidate for registration, the functions it normally performs are 
compared to a list of function type definitions.\29\ NERC registers 
these Bulk-Power System users, owners, and operators by the reliability 
functions they perform (e.g., generator owner or

[[Page 71615]]

generator operator),\30\ and to which specific requirements of the 
mandatory Reliability Standards are applicable.\31\
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    \26\ 18 CFR 39.2 (c).
    \27\ NERC Rules of Procedure, App. 5B at 3. See id. at 7-8 
(listing the criteria for determining which entities that have a 
``material impact'').
    \28\ Id.
    \29\ Id. at 5.
    \30\ See NERC, Active Entities List (updated Oct. 3, 2022), 
https://www.nerc.com/pa/comp/Registration%20and%20Certification%20DL/NERC_Compliance_Registry_Matrix_Excel.xlsx.
    \31\ Each Reliability Standard includes an applicability section 
that identifies the specific functional entity or subset of 
functional entities responsible for compliance with that standard.
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    10. NERC's registration criteria also allow NERC to limit the 
compliance obligations of a given entity registered for a particular 
function or of a similarly-situated class of entities, as warranted 
based on the particular facts and circumstances, to a subset of 
Reliability Standards or requirements.\32\ For example, an entity that 
owns underfrequency load shedding (UFLS) protection equipment needed to 
implement a required UFLS program designed for the protection of the 
BES, but that does not meet any of the other registration criteria for 
a distribution provider, would be registered as a ``UFLS-only 
distribution provider'' and only be required to comply with a subset of 
the Reliability Standards normally required for registered distribution 
providers.\33\
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    \32\ NERC Rules of Procedure, App. 5B at 8.
    \33\ Id. at 7.
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C. Bulk Electric System Definition

    11. On March 16, 2007, in Order No. 693, pursuant to section 215(d) 
of the FPA, the Commission approved 83 of 107 proposed Reliability 
Standards and the Glossary of Terms Used in NERC Reliability Standards 
(NERC Glossary), which included an early version of NERC's BES 
definition.\34\ The Commission observed that the NERC BES definition 
omitted ``significant portions of the transmission system component[s] 
of the Bulk-Power System'' \35\ but declined to direct NERC at that 
time to revise its BES definition. The Commission stated that it would, 
for at least an initial period, rely on the NERC BES definition to 
determine the applicability of the Reliability Standards; however, the 
Commission noted that it ``remains concerned about the need to address 
the potential for gaps in coverage of facilities.'' \36\
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    \34\ Mandatory Reliability Standards for the Bulk-Power Sys., 
Order No. 693, 72 FR 16416 (Apr. 4, 2007), 118 FERC ] 61,218 order 
on reh'g, Order No. 693-A, 72 FR 40717 (July 25, 2007), 120 FERC ] 
61,053 (2007).
    \35\ Order No. 693, 118 FERC ] 61,218 at P 54.
    \36\ Id. PP 75-76.
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    12. On November 18, 2010, in Order No. 743, the Commission directed 
NERC to revise its definition of the term BES to ensure that the 
definition encompasses all facilities necessary for operating an 
interconnected transmission network.\37\ The Commission concluded that 
the best way to accomplish this was to eliminate the Regional Entity 
discretion to define the BES without NERC or Commission review, 
maintain a bright-line threshold that includes all facilities operated 
at or above 100 kV except radial facilities,\38\ and adopt an exemption 
process and criteria for removing from the BES facilities that are not 
necessary for operating the interconnected transmission network. In 
Order No. 743, the Commission allowed NERC to ``propose a different 
solution that is as effective as, or superior to, the Commission's 
proposed approach in addressing the Commission's technical and other 
concerns so as to ensure that all necessary facilities are included 
within the scope of the definition.'' \39\
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    \37\ Revision to Elec. Reliability Org. Definition of Bulk Elec. 
System, Order No. 743, 75 FR 72910 (Nov. 26, 2010), 133 FERC ] 
61,150, at P 16 (2010), order on reh'g, Order No. 743-A, 76 FR 16263 
(Mar. 23, 2011), 134 FERC ] 61,210 (2011).
    \38\ Id. Order No. 743 uses ``defined radial facilities'' to 
mean those radial transmission facilities serving only load with one 
transmission source.
    \39\ Id.
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    13. On January 25, 2012, NERC submitted two petitions to revise its 
BES definition and Rules of Procedure pursuant to the directives in 
Order No. 743, including: (1) NERC's proposed revision to the 
definition of BES with a ``core'' definition (i.e., the 100 kV bright 
line) and provisions that include and exclude specific categories of 
facilities within the BES irrespective of the bright line; \40\ and (2) 
revisions to NERC's Rules of Procedure to add an exception process to 
classify or de-classify an element as part of the BES on a case-by-case 
basis.\41\ On December 20, 2012, in Order No. 773, the Commission 
approved the revisions to the BES definition and the NERC Rules of 
Procedure exception process.\42\
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    \40\ N. Am. Elec. Reliability Corp., Docket No. RM12-6-000 
(filed Jan. 25, 2012).
    \41\ N. Am. Elec. Reliability Corp., Docket No. RM12-7-000 
(filed Jan. 25, 2012).
    \42\ Order No. 773, 141 FERC ] 61,236.
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    14. NERC uses the BES definition to identify which users, owners, 
and operators of the Bulk-Power System should be registered by first 
using the BES definition bright-line (i.e., all elements connected at 
100 kV or higher). After the bright line, additional elements may be 
identified as BES elements by applying one or more of the five 
``Inclusions'' that make up the BES definition.\43\
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    \43\ The five inclusions are: (1) I1--Transformers; (2) I2--
Generating Resources; (3) I3--Blackstart Resources; (4) I4--
Dispersed Power Producing Resources; and (5) Static or Dynamic 
Devices. The NERC Glossary includes additional detail on what 
specific configurations are covered by these inclusions. NERC 
Glossary at 5-7.
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    15. On December 13, 2013, NERC filed proposed revisions to the BES 
definition to, among other things, address Commission directives in 
Order Nos. 773 and 773-A to improve the BES definition inclusions and 
exclusions.\44\ On March 20, 2014, the Commission approved 
modifications to the BES definition inclusions and exclusions to ensure 
that generator interconnection facilities at or above 100 kV connected 
to BES generators identified in inclusion I2 (generating resources 
connected at a voltage of 100 kV or above with either a gross 
individual nameplate rating above 20 MVA or a gross plant/facility 
nameplate rating greater than 75 MVA) are not excluded from the 
BES.\45\ The Commission also approved revisions to inclusion I4 to 
include collector systems from the point where the generation 
aggregates to greater than 75 MVA to a common point of connection at a 
voltage of 100 kV or above.\46\
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    \44\ N. Am. Elec. Reliability Corp., Docket No. RD14-2-000, at 2 
(filed Dec. 13, 2013).
    \45\ N. Am. Elec. Reliability Corp., 146 FERC ] 61,199, at P 8 
(2014).
    \46\ Id. P 19.
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    16. The inclusions relevant for IBRs are inclusions I2 (generating 
resources) and I4 (dispersed power producing resources),\47\ which are 
defined as follows:
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    \47\ The Commission approved NERC's clarification that inclusion 
I4's dispersed power producing resources includes variable 
generation resources in light of ``the increasing presence of wind, 
solar, and other non-traditional forms of generation.'' The 
Commission recognized that these individual variable generation 
units should be included within the scope of the BES ``where 
necessary to support reliability.'' Id. P 47.
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    I2--Generating resource(s) including the generator terminals 
through the high-side of the step-up transformer(s) connected at a 
voltage of 100 kV or above with: (a) Gross individual nameplate rating 
greater than 20 MVA. Or, (b) Gross plant/facility aggregate nameplate 
rating greater than 75 MVA.
    I4--Dispersed power producing resources that aggregate to a total 
capacity greater than 75 MVA (gross nameplate rating), and that are 
connected through a system designed primarily for delivering such 
capacity to a common point of connection at a voltage of 100 kV or 
above. Thus, the facilities designated as BES are: (a) The individual 
resources, and (b) The system designed primarily for delivering 
capacity from the point where those resources aggregate to greater than 
75 MVA to a common point of connection at a voltage of 100 kV or above.
    17. Further, in approving revisions to NERC's BES definition in 
Order No.

[[Page 71616]]

773, the Commission recognized its authority under section 215 of the 
FPA to designate an element as part of the BES.\48\ The Commission went 
on to explain that ``where an event analysis of a system disturbance 
indicates the operational importance of sub-100 kV elements . . . to 
reliability, the Commission may find it necessary for the reliable 
operation of the interconnected transmission network to designate 
facilities to be included in the bulk electric system.'' \49\ The 
Commission also explained that it would expect in the normal course 
that registered entities, Regional Entities, and NERC would proactively 
identify and include those sub-100 kV elements (including generation 
elements) in the BES.\50\ But in the case that another entity does not 
initiate the registration of such facilities, the Commission stated it 
would exercise its authority to do so.\51\
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    \48\ Order No. 773, 141 FERC ] 61,236 at P 285 (citing authority 
under FPA sections 215(a)(1) and (b)(1)).
    \49\ Id.
    \50\ Id. P 288.
    \51\ Id.
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D. NERC Determination of Material Impact

    18. An entity that does not have elements that fall within the BES 
definition may nevertheless be registered if it can be demonstrated 
that the entity has a material impact on Bulk-Power System reliability. 
To determine whether users, owners, and operators of facilities and 
elements that fall outside the BES definition are material to Bulk-
Power System reliability and must be registered, NERC uses a non-
exclusive set of factors (materiality test).\52\ NERC recognizes that 
only a subset of the materiality test factors may be applicable to 
particular functional registration categories when determining whether 
a facility should be registered or deregistered.\53\ All such 
registration decisions regarding materiality must be made by a NERC-led 
registration review panel.\54\
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    \52\ NERC Rules of Procedure, App. 5B at 7-8.
    \53\ Id. at 7.
    \54\ Id. The NERC-led registration review panel is comprised of 
a NERC lead with Regional Entity participants. The panel evaluates 
requests to de-register entities meeting registration criteria, 
requests to add an entity that does not meet registration criteria, 
disputes regarding application of registration criteria, and 
requests for subset lists of applicable Reliability Standards. NERC 
Rules of Procedure, App. 5A (Organization Registration and 
Certification Manual) at 10.
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    19. Relevant to IBRs, the factors for determining material impact 
include the following:
    Will intentional or inadvertent removal of an Element owned or 
operated by the entity, or a common mode failure of two Elements as 
identified in the Reliability Standards (for example, loss of two 
Elements as a result of a breaker failure), lead to a reliability issue 
on another entity's system (such as a neighboring entity's Element 
exceeding an applicable rating, or loss of non-consequential load due 
to a single contingency)? Conversely, will such contingencies on a 
neighboring entity's system result in issues for Reliability Standards 
compliance on the system of the entity in question?

. . . .

    Can the normal operation, misoperation, or malicious use of the 
entity's Protection Systems (including UFLS [under frequency load 
shedding], UVLS [under voltage load shedding], Special Protection 
System, Remedial Action Schemes and other Protection Systems protecting 
BES Facilities) cause an adverse impact on the operational reliability 
of any associated Balancing Authority, Generator Operator or 
Transmission Operator, or the automatic load shedding programs of a PC 
[planning coordinator] or TP [transmission planner] (UFLS, UVLS)? \55\
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    \55\ NERC Rules of Procedure, App. 5B at 7-8.
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II. Discussion

    20. We are issuing this order to ensure that timely action is taken 
to address the reliability challenges presented by IBRs because their 
individual and aggregate impacts can exacerbate disturbances on the 
Bulk-Power System. Such impacts are well documented in studies of Bulk-
Power System disturbances over the past six years, as discussed below. 
The rapid growth of IBRs will make these impacts more acute over time 
unless they are adequately addressed. Accordingly, we direct NERC 
within 90 days of the date of issuance of this order to develop and 
submit for Commission approval a work plan describing, in detail, how 
NERC will identify and register owners and operators of unregistered 
IBRs that in the aggregate materially impact the reliable operation of 
the Bulk-Power System.
    21. NERC should explain in its work plan how NERC will modify its 
processes to encompass unregistered IBRs (whether by working with 
stakeholders to change the BES definition, a change to its registration 
program, or some other solution) within 12 months of approval of the 
work plan. The work plan should also include implementation milestones 
ensuring that unregistered IBR owners and operators meeting the new 
registration criteria are identified within 24 months of the approval 
date of the work plan, and they are registered and required to comply 
with applicable Reliability Standards within 36 months of the approval 
date of the work plan. The work plan will be noticed for public 
comment. Once the Commission approves the proposed work plan, we direct 
NERC to file progress updates every 90 days thereafter detailing NERC's 
progress towards modifying its processes and, once the modification is 
complete, every 90 days thereafter detailing its progress towards 
identifying and registering owners and operators of unregistered IBRs.
    22. IBRs are rapidly becoming a principal source of electric 
power,\56\ and in certain areas of the Bulk-Power System the IBR 
saturation is significant enough that their operations can materially 
impact Bulk-Power System reliability. As their contribution to the 
resource mix continues to increase, IBRs present new considerations for 
transmission planning and operation of the Bulk-Power System, which was 
designed primarily for synchronous generation.\57\ Like synchronous 
generators, IBRs such as solar PV, wind, fuel cells, and battery 
storage produce real and reactive power; however, they do not react to 
disturbances on the transmission system in the same manner as 
synchronous generators do. As discussed below, the operational 
characteristics and equipment settings of IBRs have in some instances 
exacerbated system disturbances both individually and in the aggregate, 
and the status quo presents a risk to Bulk-Power System reliability.
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    \56\ See NERC, 2021 Long Term Reliability Assessment Report, 29 
(Dec. 2021). https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2021.pdf. In the report, 
NERC projects IBR nameplate capacity additions of approximately 504 
GW of solar and 360 GW of wind (i.e., a total nameplate capacity of 
864 GW) and cumulative retirements of approximately 60 GW of 
nuclear, coal, natural gas, and biomass to the Bulk-Power System 
over the next decade.
    \57\ See e.g., NERC, 2012 Special Assessment Interconnection 
Requirements for Variable Generation, 1 (Sept. 2012), https://www.nerc.com/files/2012_IVGTF_Task_1-3.pdf (finding that ``many of 
NERC's existing interconnection standards and procedures have been 
based on technical characteristics and physical capabilities of 
traditional power generation resources that employ synchronous 
generators'').
---------------------------------------------------------------------------

    23. Unregistered IBRs often have small individual generation 
capacities, are connected to the Bulk-Power System at less than 100 kV 
transmission or sub-transmission voltages, and do not meet one of the 
inclusions in the BES definition. NERC's materiality test \58\ includes 
an assessment of material

[[Page 71617]]

impact for individual entities; however, it has not been used to 
determine whether unregistered IBRs can, in the aggregate, have a 
material impact on the Bulk-Power System such that their owners or 
operators should be registered with NERC. As discussed below, the 
aggregate impact of unregistered IBRs is not directly addressed by the 
BES definition or the materiality test, meaning that the users, owners, 
and operators of those unregistered IBRs are not required to register 
with NERC and therefore are not required to comply with Reliability 
Standards.
---------------------------------------------------------------------------

    \58\ NERC Rules of Procedure, App. 5B at 7-8.
---------------------------------------------------------------------------

A. Unregistered IBRs Continue To Exacerbate Disturbance Events on the 
Bulk-Power System

    24. The first documented large-scale reliability issues related to 
IBRs occurred in August of 2016 during the Blue Cut Fire event in 
California. Until this event, the likelihood of IBRs tripping or 
momentarily ceasing during faults on the Bulk-Power System was unclear. 
Since the Blue Cut Fire, at least 11 additional NERC-documented events 
\59\ have demonstrated common mode failures of IBRs acting unexpectedly 
and adversely in response to normally cleared transmission line faults 
on the Bulk-Power System.\60\ Most of the early NERC reports, however, 
do not provide IBR nameplate capacity of the facilities involved. 
Without a breakdown of unregistered IBR and IBR nameplate capacities we 
are unable to determine what percentage of the elements involved were 
unregistered IBRs. Later studies of IBR-related disturbance events 
indicate that a loss of real power generation from unregistered IBRs 
contributed to the total resource loss during these disturbances.\61\
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    \59\ These 12 events report an average of approximately 1,000 MW 
of IBRs entering into momentary cessation or tripping in the 
aggregate. See Blue Cut Fire Event Report (covering the Blue Cut 
Fire (August 16, 2016)); Canyon 2 Fire Event Report (covering the 
Canyon 2 Fire (October 9, 2017)); NERC and WECC, April and May 2018 
Fault Induced Solar Photovoltaic Resource Interruption Disturbances 
Report (Jan. 2019) (Angeles Forest and Palmdale Roost Events Report) 
(covering the Angeles Forest (April 20, 2018) and Palmdale Roost 
(May 11, 2018) events); San Fernando Disturbance Report (covering 
the San Fernando Event (July 7, 2020)); NERC and Texas RE, Odessa 
Disturbance (Sept. 2021) (Odessa Disturbance Report) (covering 
events in Odessa, Texas on May 9, 2021 and June 26, 2021); NERC and 
WECC, Multiple Solar PV Disturbances in CAISO (April 2022) (2021 
Solar PV Disturbances Report) (covering four events: Victorville 
(June 24, 2021); Tumbleweed (July 4, 2021); Windhub (July 28, 2021); 
and Lytle Creek (August 26, 2021)); and NERC and Texas RE, Panhandle 
Wind Disturbance, Texas Event: March 22, 2022, (Aug. 2022) 
(Panhandle Wind Disturbance Report).
    \60\ Smaller scale events have occurred as well. However, there 
is less documentation of smaller scale events in part because NERC 
only tracks ``Category 1'' events, which are unexpected outages of 
three or more BES facilities, including interruptions of IBRs 
aggregated to a 500 MW threshold (Category 1aii and Category 1i). 
See, e.g., NERC, ERO Event Analysis Process--Version 4.0, at 2 (Dec. 
2019), https://www.nerc.com/pa/rrm/ea/ERO_EAP_Documents%20DL/ERO_EAP_v4.0_final.pdf.
    \61\ As unregistered IBRs do not have to comply with Reliability 
Standards or respond to NERC Alerts, it is difficult for NERC to 
perform root cause analyses of IBR-disturbance events that fully 
reflect unregistered IBR contributions to Bulk-Power System 
disturbances. See e.g., 2021 Solar PV Disturbances Report at 13 
(``non-BES facilities chose not to respond to the [requests for 
information] nor participate in any follow-up discussions to perform 
root cause analysis.'').
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    25. On July 7, 2020, two consecutive faults in northern Los Angeles 
county, California resulted in the wide-spread interruption of solar PV 
IBRs across the Southern California region, referred to as the ``San 
Fernando Disturbance.'' \62\ Those faults included an approximately 205 
MW power reduction followed by a 1,000 MW power reduction, both 
observed at Bulk-Power System-connected solar PV IBRs.\63\ In the San 
Fernando Disturbance Report, NERC found that many of the facilities 
that unexpectedly and adversely responded to the fault events were 
``non-BES solar PV [IBR] that had a noticeable effect on [Bulk-Power 
System] performance in aggregate.'' \64\ NERC explained that the 
performance of these types of IBRs ``mirror the responses of the larger 
solar PV [IBR] facilities; [and] this is to be expected since the 
inverter manufacturer, make, and model are likely similar.'' \65\ The 
San Fernando Disturbance Report showed that the active power output 
response from two small solar PV IBRs during the disturbance responded 
to the normally cleared faults with their inverters entering momentary 
cessation and returning to service after several minutes.\66\ During 
the event, about 1,000 MW of IBRs tripped or momentarily ceased 
operation; 112 MW or about 11% of those IBRs were unregistered 
IBRs.\67\
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    \62\ San Fernando Disturbance Report at 2.
    \63\ Id. at vi.
    \64\ Id. at 23.
    \65\ Id.
    \66\ Id.
    \67\ Id. at app. B, tbl. B.1
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    26. During the summer of 2021, California experienced four solar PV 
IBR disturbance events. Similar to prior disturbances, these four 
events involved normally cleared transmission line faults and the loss 
of Bulk-Power System-connected solar PV IBRs.\68\ NERC and WECC found 
that 13 non-BES connected solar PV IBRs contributed between almost 10% 
(in Lytle Creek, 58 MW of 600 MW) and almost 30% (in Tumbleweed, 162 MW 
of 566 MW) of the total losses. The report stated that the total number 
of non-BES connected solar PV IBRs may have been underestimated because 
the count only included solar PV IBRs with active power reduction of 
more than 10 MW.\69\ As owners and operators of unregistered facilities 
are not required to respond to NERC Alerts (and therefore do not 
provide data to NERC), NERC was unable to perform a complete root cause 
analysis that included these facilities.\70\
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    \68\ 2021 Solar PV Disturbances Report at 2.
    \69\ Id. at 36, app. B (providing a detailed review of affected 
facilities). NERC and WECC's analysis was limited to solar PV IBRs 
that exhibited an active power reduction greater than 10 MW for the 
four disturbances.
    \70\ Id. at 13 (noting that ``[n]on-BES facilities chose not to 
respond to the [requests for information] nor participate in any 
follow-up discussions to perform root cause analysis'').
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    27. In its 2021 Solar PV Disturbances Report, NERC recognized the 
risk posed by non-BES connected IBRs, finding that ``[t]he ongoing 
widespread [power] reduction of solar PV [IBR] resources continues to 
be a notable reliability risk to the [Bulk-Power System], particularly 
when combined with the additional loss of other generating resources on 
the [Bulk-Power System] and in aggregate on the distribution system.'' 
\71\ Further, NERC has stated that ``lack of data visibility and poor 
data quality continue to be a concern for comprehensive event analysis 
after large [Bulk-Power System] disturbances.'' \72\
---------------------------------------------------------------------------

    \71\ Id. at v.
    \72\ Angeles Forest and Palmdale Roost Events Report at 23.
---------------------------------------------------------------------------

    28. Since the discernment of reliability issues related to IBRs in 
2016, NERC has taken the following actions to assess and mitigate the 
impact of both registered and unregistered IBRs: (1) published seven 
reports documenting 12 events; \73\ (2) issued two NERC Alerts; \74\ 
(3) issued three reliability guidelines regarding IBR data collection 
and performance; \75\ (4) formed an IBR

[[Page 71618]]

performance task force (IRPTF) \76\ and system planning impacts from 
distributed energy resources working group; (5) issued multiple 
technical reports; \77\ and (6) issued an IBR strategy document.\78\ 
Nevertheless, NERC acknowledges that its actions to date have not 
successfully addressed the most common reliability issues posed by 
IBRs, like momentary cessation, nor have they resolved any modeling or 
other IBR-related performance issues from unregistered IBRs.\79\
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    \73\ Blue Cut Fire Event Report; Canyon 2 Fire Event Report; the 
San Fernando Disturbance Report; the Angeles Forest and Palmdale 
Roost Events Report; Odessa Disturbance Report; 2021 Solar PV 
Disturbances Report; and the Panhandle Wind Disturbance Report.
    \74\ NERC, Loss of Solar Resources during Transmission 
Disturbances due to Inverter Settings (June 2017) (Loss of Solar 
Resources Alert I); NERC, Industry Recommendation Loss of Solar 
Resources during Transmission Disturbances due to Inverter 
Settings--II (May 2018) (Loss of Solar Resources Alert II). All NERC 
Alerts referenced in this order are available on NERC's website at 
https://www.nerc.com/pa/rrm/bpsa/Pages/Alerts.aspx.
    \75\ See NERC, Reliability Guideline BPS-Connected Inverter-
Based Resource Performance, (Sept. 2018); IBR Interconnection 
Requirements Guideline; and NERC, Reliability Guideline Performance, 
Modeling, and Simulations of BPS-Connected Battery Energy Storage 
Systems and Hybrid Power Plants (Mar. 2021). NERC guidelines are a 
collection of best practices and are provided to the industry as 
voluntary guidance; they are not mandatory. All NERC guidelines 
referenced in this order are available on NERC's website at https://www.nerc.com/comm/Pages/Reliability-and-Security-Guidelines.aspx.
    \76\ The task force became the IBR Performance Working Group in 
October 2020, and most recently became the IBR Performance 
Subcommittee in March 2022. For consistency, this order uses 
``IRPTF'' to refer to all three iterations.
    \77\ See e.g., NERC, Technical Report, BPS-Connected Inverter-
Based Resource Modeling and Studies (May 2020) (Modeling and Studies 
Report); NERC, WECC Base Case Review: Inverter-Based Resources (Aug. 
2020), (WI Base Case IBR Review). All technical reports referenced 
in this order are available on NERC's website at https://nerc.com/comm/PC/Pages/Inverter-Based-Resource-Performance-Task-Force.aspx.
    \78\ NERC IBR Strategy, supra note 6.
    \79\ See e.g., San Fernando Disturbance Report at 23; see also 
Odessa Disturbance Report at vi (finding that industry is aware of 
the guidance materials published by NERC yet are not comprehensively 
adopting those recommendations); see also NERC, Agenda Member 
Representatives Committee, at 16 (Apr. 2022) (stating that as NERC 
``continue[s] to observe, significant amounts of inverter-based 
resources cease or reduce energy production during system faults 
just when needed--this increasingly risky behavior impacts the 
reliable operation of the bulk power system'').
---------------------------------------------------------------------------

    29. The NERC IRPTF May 2020 technical report explained that the 
``[i]nformation from only about one-half of the installed capacity of 
[Bulk-Power System]-connected solar PV resources (in the Western 
Interconnection) was collected as part of the NERC Alert process based 
on the size of resources and their designation as [BES] or non-BES 
resources. The extent of model accuracy for those resources that did 
not respond to the NERC Alert is unknown.'' \80\ Further, the report 
found that ``[w]hile entities owning non-BES resources were requested 
to provide data, only BES resources are required to respond to the data 
requests in the NERC Alert.'' \81\ As a consequence of not having the 
requested unregistered IBR data, the NERC IRPTF made modeling 
assumptions that only included roughly half (i.e., approximately 7 GW) 
of the existing solar PV IBRs in the WECC base case when performing 
system reliability studies to identify potential IBR reliability 
issues.\82\ In 2020, NERC and WECC conducted a review of the Western 
Interconnection base case transmission planning model and found 
numerous modeling errors and omissions regarding IBRs.\83\
---------------------------------------------------------------------------

    \80\ Modeling and Studies Report at 2.
    \81\ Id. at 25 n.34.
    \82\ See id. at 24, 25 (finding that while the WECC base case 
reflects around 14,500 MW of Bulk-Power System-connected non-BES 
solar PV IBRs, only approximately 7,200 MW of Bulk-Power System-
connected non-BES solar PV IBRs submitted data during the NERC Alert 
process).
    \83\ WI Base Case IBR Review Report. The WI base case has been 
updated since the time of this report.
---------------------------------------------------------------------------

    30. In summary, events and disturbances have shown that IBRs, 
regardless of size and transmission or sub-transmission voltage, have a 
material impact on Bulk-Power System reliability. Further, while NERC 
recognizes that action is necessary to address the most common 
reliability issues posed by IBRs, these issues have not been resolved. 
Finally, even when NERC does address IBR-specific gaps through its 
Reliability Standards, until unregistered IBRs are registered, they 
will not be required to comply with the Reliability Standards.

B. Generator Owners and Operators of Unregistered IBRs That Materially 
Impact the Reliable Operation of the Bulk-Power System Must Be 
Registered by NERC and Subject to Mandatory Reliability Standards

    31. As IBR saturation continues to increase on the Bulk-Power 
System, we are concerned that, absent Commission action, larger numbers 
of unregistered IBRs may pose increasing risk to reliable operation, as 
demonstrated by the disturbance events described above. Therefore, we 
find it necessary to ensure that NERC register the owners and operators 
of those unregistered IBRs that, in the aggregate, have a material 
impact on Bulk-Power System reliability, to ensure those entities are 
subject to a relevant set of mandatory and enforceable Reliability 
Standard requirements.
    32. Many IBRs have small individual generation capacities, are 
connected to the Bulk-Power System at less than 100 kV transmission or 
sub-transmission voltage, or do not meet one of the inclusions in the 
NERC BES definition, and therefore are not registered. Similarly, while 
NERC's materiality test can be used to assess whether an individual 
entity that does not meet the NERC BES definition has a material impact 
on the reliable operation of the Bulk-Power System, and thus should be 
registered with NERC and subject to its mandatory Reliability 
Standards, NERC has not, to date, applied the materiality test to 
unregistered IBRs to determine whether they, in the aggregate, have a 
material impact on the reliable operation of the Bulk-Power System. 
Therefore, NERC has not addressed through either its BES definition or 
the materiality test the impact of unregistered IBRs that, in the 
aggregate, materially impact the reliable operation Bulk-Power System. 
As a result, these potentially impactful unregistered IBRs are not 
required to comply with any Reliability Standards. To address this 
concern, we find that unregistered IBRs connected to the Bulk-Power 
System, regardless of size and transmission or sub-transmission 
voltage, that in the aggregate have a material impact on Bulk-Power 
System performance should be registered.
    33. Based on the record of IBR facilities materially impacting the 
reliability of the Bulk-Power System discussed above, we find that the 
current BES definition and NERC's application of the materiality test 
to individual entities do not address the potential impacts to the 
reliability of the Bulk-Power System of the increasing numbers of 
smaller non-BES Bulk-Power System-connected IBRs. Therefore, we direct 
NERC to develop and file a work plan within 90 days of the date of this 
order explaining how it will identify and register unregistered IBRs 
that, in the aggregate, have a material impact on the reliable 
operation of the Bulk-Power System, but that are not currently required 
to be registered with NERC under the BES definition. The work plan 
should explain how NERC will modify its processes to encompass 
unregistered IBRs (whether by working with stakeholders to change the 
BES definition, changing its Rules of Procedure related to 
registration, or some other solution) within 12 months of approval of 
the work plan. The work plan should also include implementation 
milestones ensuring that unregistered IBR owners and operators meeting 
the new registration criteria are identified within 24 months of the 
approval date of the work plan, and that they are registered and 
required to comply with applicable Reliability Standards within 36 
months of the approval date of the work plan. The work plan will be 
noticed for public comment.
    34. We recognize that the currently unregistered IBRs may not 
present the same impact in all circumstances as IBRs that fall under 
the current BES definition. Accordingly, NERC may determine that the 
full set of Reliability Standard Requirements otherwise applicable to 
generator owners and operators need not apply to currently

[[Page 71619]]

unregistered IBR generator owners and operators when they are 
registered.\84\ For example, NERC may determine that currently 
unregistered IBR generator owners and operators that must register as a 
result of this order need comply only with provisions pertaining to 
facility interconnections and studies, protection systems, modeling, 
voltage support, and frequency response, as well as any new or modified 
standards developed through the rulemaking in Docket No. RM22-12-000. 
While we provide the above by way of example, NERC may, subject to 
Commission review and approval, determine whether specific provisions 
from the full set of Reliability Standard Requirements otherwise 
applicable to generator owners and operators need not apply to 
generator owners and operators when they are registered that currently 
only own unregistered IBRs.
---------------------------------------------------------------------------

    \84\ See, e.g., New Harquahala Generating Co., LLC, 123 FERC ] 
61,173 (2008).
---------------------------------------------------------------------------

    35. Accordingly, consistent with the discussion in this order, we 
direct NERC to file the work plan within 90 days of the date of this 
order for Commission approval. The work plan filed by NERC will be 
noticed for public comment. Once the Commission approves the work plan, 
we direct NERC to file progress updates every 90 days from the date of 
approval documenting NERC's progress. We direct NERC to complete 
implementation of the work plan (whether by working with stakeholders 
to change the BES definition, changes to its registration program, or 
some other solution) within 12 months from the date of Commission 
approval of the work plan and to complete the identification of 
unregistered IBR owners and operators within 24 months from the date of 
Commission approval, so that they are registered and required to comply 
with applicable Reliability Standards within 36 months from the date of 
Commission approval of the work plan.

III. Information Collection Statement

    36. The Paperwork Reduction Act (PRA) \85\ requires each federal 
agency to seek and obtain approval by the Office of Management and 
Budget (OMB) before undertaking a collection of information (including 
reporting, record keeping, and public disclosure requirements) directed 
to ten or more persons or contained in a rule of general applicability. 
OMB regulations \86\ require approval of certain information collection 
requirements (including deletion or revision of existing requirements, 
or implementation of new requirements). Upon approval of a collection 
of information, OMB will assign an OMB Control Number and an expiration 
date. Respondents subject to the filing requirements will not be 
penalized for failing to respond to the collection of information 
unless the collection of information displays a valid OMB control 
number.
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    \85\ 44 U.S.C. 3501-3521.
    \86\ 5 CFR pt. 1320 (2021).
---------------------------------------------------------------------------

    37. The information collection affected by this order is FERC-725, 
``Certification of Electric Reliability Organization; Procedures for 
Electric Reliability Standards'' (OMB Control Number 1902-0225). The 
information collection requirements in this order are covered by and 
included in, the existing OMB-approved FERC-725.\87\
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    \87\ FERC-725 includes the burden, reporting, and recordkeeping 
requirements associated with Reliability Standards Development, 
Reliability Assessments, Self-Assessment and ERO Application, 
Reliability Compliance, Stakeholder Survey, and Other Reporting.
---------------------------------------------------------------------------

    38. This order directs the ERO to develop and submit to the 
Commission for approval within 90 days of the date of this order a work 
plan describing, in detail, how the ERO plans to modify its 
registration processes to identify and register owners and operators of 
unregistered IBRs that in the aggregate, materially impact the reliable 
operation of the Bulk-Power System, as discussed in the body of this 
order. NERC is required to submit progress updates every 90 days after 
approval of the work plan.
    39. In this order, NERC is directed to: (1) complete modifications 
to its registration process within 12 months of Commission approval of 
the work plan; (2) complete identification of owners and operators of 
IBRs that are connected to the Bulk Power System and that, in the 
aggregate, materially impact the reliable operation of the Bulk-Power 
System within 24 months of Commission approval of the work plan; and 
(3) complete registration of unregistered IBR owners and operators so 
they are required to comply with applicable Reliability Standards 
within 36 months of Commission approval of the work plan, as discussed 
in the body of this order.
    40. The Commission solicits comments on the Commission's need for 
the revision of the information collection, whether the information 
will have practical utility, the accuracy of the burden estimates, ways 
to enhance the quality, utility, and clarity of the information to be 
collected or retained.
    41. Interested persons may submit questions about this information 
collection by contacting Ellen Brown, Office of the Executive Director, 
at [email protected], or (202) 502-8663. Please send comments 
concerning the collection of information and the associated burden 
estimates to: Office of Information and Regulatory Affairs, Office of 
Management and Budget [Attention: Federal Energy Regulatory Commission 
Desk Officer]. Due to security concerns, comments should be submitted 
at www.reginfo.gov/public/do/PRAMain. Comments submitted to OMB should 
be sent within 60 days of publication of this notice in the Federal 
Register and refer to FERC-725 and OMB Control No. 1902-0225.
    The Commission orders:
    (A) NERC is hereby directed to submit a work plan within 90 days of 
the date of this order describing, in detail, how it plans to modify 
with stakeholder input its BES definition, registration program, or 
some other solution to identify and register owners and operators of 
unregistered IBRs that are connected to the Bulk-Power System and that, 
in the aggregate, materially impact the reliable operation of the Bulk-
Power System, as discussed in the body of this order.
    (B) NERC is hereby directed to complete modifications in accordance 
with its work plan within 12 months of Commission approval of the work 
plan, complete identification of owners and operators of IBRs that in 
the aggregate, materially impact the reliable operation of the Bulk-
Power System within 24 months of Commission approval of the work plan, 
and complete registration of IBR owners and operators so they are 
required to comply with applicable Reliability Standards within 36 
months of Commission approval of the work plan, as discussed in the 
body of this order.
    (C) NERC is hereby directed to file detailed progress updates on 
the status of its workplan, completed implementation milestones, and 
any delays, every 90 days from the date of Commission approval of the 
work plan, as discussed in the body of this order.

    By the Commission. Commissioner Danly is concurring with a 
separate statement attached.

    Issued: November 17, 2022.
Debbie-Anne A. Reese,
Deputy Secretary.

United States of America

Federal Energy Regulatory Commission

Registration of Inverter-based Resources.
Docket No. RD22-4-000 (Issued November 17, 2022)

    DANLY, Commissioner, concurring:

[[Page 71620]]

    1. I concur in today's order.\1\ I remain gravely concerned about 
the North American Electric Reliability Corporation's (NERC) inability 
to act swiftly and nimbly in response to emerging risks that threaten 
the reliability of the Bulk-Power System (BPS). This is due in no small 
part to the statutory framework of Federal Power Act (FPA) section 
215.\2\ According to NERC's Inverter-Based Resource (IBR) Strategy 
document,\3\ ``[t]he [Electric Reliability Organization (ERO)] 
Enterprise has analyzed numerous widespread IBR loss events and 
identified many systemic performance issues with the inverter-based 
fleet over the past six years.'' \4\ NERC explains that ``[t]he 
disturbance reports, alerts, guidelines, and other deliverables 
developed by the ERO thus far have highlighted that abnormal IBR 
performance issues pose a significant risk to BPS reliability.'' \5\ 
Our actions today in this and another proceeding \6\ propose firm 
deadlines by which NERC must act to register and hold IBR entities 
accountable for failure to comply with mandatory and enforceable 
Reliability Standards.
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    \1\ Registration of Inverter-based Resources, 181 FERC ] 61,124 
(2022).
    \2\ 16 U.S.C. 824o.
    \3\ NERC, Inverter-Based Resource Strategy: Ensuring Reliability 
of the Bulk Power System with Increased Levels of BPS-Connected IBRs 
(Issued Sep. 14, 2022), https://www.nerc.com/comm/Documents/NERC_IBR_Strategy.pdf.
    \4\ Id. at 3.
    \5\ Id. at 5.
    \6\ Reliability Standards to Address Inverter-Based Resources, 
181 FERC ] 61,125 (2022).
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    2. Better late than never, I suppose. Nevertheless, it could be at 
least four years before certain of the IBR entities are registered and 
another five years before the full suite of contemplated requirements 
are mandatory and enforceable. So, it will be about ten or eleven years 
after the significant reliability risk was definitively identified that 
we will have required registration and Reliability Standards in place. 
The reliability consequences that attend the rapid deployment of an 
unprecedented number of IBRs are, at this point, unarguable. As NERC's 
President and CEO explained last week: ``the pace of the transformation 
of the electric system needs to be managed and that transition needs to 
occur in an orderly way.'' \7\ Mandatory reliability standards must be 
implemented as quickly as possible to ensure the reliable operation of 
the BPS. We at FERC are responsible for the reliability of the BPS 
under FPA section 215. I fear we may be taking too long to address 
reliability challenges that urgently need our attention.
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    \7\ Statement of James B. Robb, Annual Commissioner-led 
Reliability Technical Conference (Nov. 10, 2022), https://www.ferc.gov/news-events/events/annual-commissioner-led-reliability-technical-conference-11102022.
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    For these reasons, I respectfully concur.

James P. Danly,

Commissioner.

[FR Doc. 2022-25589 Filed 11-22-22; 8:45 am]
BILLING CODE 6717-01-P


