NERC Work Plan, 2007-2009

Exhibit A ⎯ Reliability Standards Work Plan 2007 — 2009

Reliability Standards Development Plan:
2007–2009
Volume I
Work Plan and Schedule
November 30, 2006

A New Jersey Nonprofit Corporation

Reliability Standards Development Plan: 2007–2009

Table of Contents
Volume I: Work Plan and Schedule
Table of Contents............................................................................................................................. i
Introduction..................................................................................................................................... 1
Purpose........................................................................................................................................ 1
Background ................................................................................................................................. 2
Plan Organization........................................................................................................................ 3
Resource Documents .................................................................................................................. 4
Work Plan Description.................................................................................................................... 5
Overview..................................................................................................................................... 5
Resource Plan.................................................................................................................................. 8
Global Improvements...................................................................................................................... 9
Statutory Criteria......................................................................................................................... 9
Quality Objectives ...................................................................................................................... 9
Issues Related to the Applicability of a Standard ..................................................................... 11
Issues Related to Regional Entities and Reliability Organizations........................................... 12
Issues Related to Ambiguity ..................................................................................................... 13
Issues Related to Technical Adequacy ..................................................................................... 14
Issues Related to Measures and Compliance Elements ............................................................ 14
Fill-in-the-Blank Standards....................................................................................................... 16
Undue Negative Impact on Competition .................................................................................. 17
Additional Considerations ........................................................................................................ 18
Appendix A — Work Plan Schedule ............................................................................................ 19
Volume II: Project Descriptions (provided separately)
Volume III: Work Plan for Regional “Fill-in-the-Blank” Standards (provided separately)

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Introduction
Purpose
This work plan is a management tool to guide and coordinate the development of reliability
standards and provide benchmarks for assessing progress. The work plan serves as a
communications tool for coordinating standards development work with applicable
governmental agencies in the United States and Canada, and for engaging stakeholders in
standards development. The plan provides a basis for developing annual work plans and budgets
for the standards program.
The initial stage in the establishment of mandatory reliability standards began with the
translation of the historical operating policies, planning standards, and compliance templates into
a baseline set of working standards. That work is now drawing to a close as missing compliance
elements are completed, violation risk factors are added, and plans are being finalized to address
regional “fill-in-the-blank” standards.
Attention in this three-year work plan shifts the focus from establishing a baseline set of
standards to improving the starting point established by the Version 0 reliability standards. The
improvements address issues exemplified in the May 11, 2006 Federal Energy Regulatory
Commission Staff Preliminary Assessment of Proposed Reliability Standards. In that report, the
FERC Staff stated that certain proposed standards are (1) ambiguous; (2) insufficient to ensure
an adequate level of reliability; (3) fail to contain adequate “measures and compliance;” (4) may
have an undue impact on competition; and (5) are “fill-in-the-blank” standards. The Staff report
also pointed out that NERC has not completed standards addressing all recommendations made
following the August 2003 Northeast blackout. The work plan enclosed here is intended to
address these issues, as well as previous comments and issues noted by industry in the initial
development of the standards.
In all, the work plan defines 31 standards development projects. The work plan also allocates
resources to begin four new, as yet unidentified, high–priority projects. Experience over the past
few years demonstrates that important new projects will emerge each year because of industry
need or unforeseen circumstances.
The goal of the work plan is to ensure that the entire set of standards provides an adequate
level of reliability to the North American bulk power system, and is enforceable upon all
bulk power system owners, operators, and users in accordance with applicable statutes and
regulations in the United States and Canada.
Work plan objectives that support this goal include:
x

Addressing remaining blackout recommendations requiring new or revised standards.

x

Addressing prior comments from industry, FERC, and others suggesting improvements to
each standard.

x

Addressing quality issues to ensure each standard has a clear statement of purpose, and
has outcome-focused requirements that are clear and measurable.

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x

Ensuring measures and compliance elements are aligned to support the requirements
within the standard and follow definitions outlined in the standards template.

x

Reorganizing the standards more logically based on topic and remove redundancies.

x

Addressing other pending proposals for new standards.

x

Satisfying the requirement for a five-year review of all standards.

Developing excellent reliability standards is a long-term effort that needs the flexibility to
continuously adapt to events and changing priorities. Therefore, the plan will remain dynamic as
new standards are proposed and priorities evolve. The work plan will be maintained by the
NERC Standards Committee and program staff, and will be updated on an annual basis, more
frequently if needed.
To be adopted as mandatory, all standards must be filed and approved by the applicable
regulatory authorities. NERC intends to annually review its standards work plan with applicable
governmental authorities in the United States and Canada so as to coordinate work priorities and
expectations with them. In addition to approving the standards, the regulatory authorities will be
able to direct the development of standards and to remand standards to the ERO for additional
work if needed.

Background
Through the enactment of the Energy Policy Act of 2005, Congress created Section 215 of the
Federal Power Act (FPA). Section 215 assigns to the Federal Energy Regulatory Commission
(FERC or Commission) the responsibility and authority for overseeing the reliability of the bulk
power systems in the United States, including the setting and enforcement of mandatory
reliability standards. In February 2006, the Commission issued Order No. 672 establishing its
requirements for certifying an industry self-regulating electric reliability organization (ERO), as
envisioned in the legislation. On the basis of that Order, NERC filed its application to become
the ERO in the United States on April 4, 2006. NERC concurrently filed for similar recognition
with the federal and provincial governments in Canada.
On July 20, 2006 the Commission issued its Order Certifying NERC as the Electric Reliability
Organization (ERO) and Ordering Compliance Filing, finding that NERC met the requirements
of Order No. 672. In issuing the Order, the Commission directed NERC to provide additional
information and file specific revisions to its rules within 90 days, which NERC has done. On
September 15, 2006 the National Energy Board of Canada announced a memorandum of
understanding recognizing NERC as the ERO in Canada. NERC continues to work toward
establishing a framework for the ERO in each province.
On a parallel track, in April 2006 NERC filed a petition for approval of 102 reliability standards.
After that, NERC continued to develop and improve its reliability standards, and in August 2006
filed 16 new and 11 revised standards (one standard was retired, bringing the total to 117
pending approval). The Commission issued a Notice of Proposed Rulemaking (NOPR) in
October 2006, proposing to make 83 of the standards mandatory before the summer of 2007.
The Commission proposes to direct improvements to 62 of these standards and that work is
contained in this work plan. The work plan also addresses the 24 standards that the Commission
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neither approved nor remanded, which are referred to as the “fill-in-the-blank” regional
standards. The Commission will address the cyber security standards in a separate rulemaking.
Order No. 672 provides guidance on the factors the Commission will consider when determining
whether proposed reliability standards meet the statutory criteria. For example, the Commission
states that a proposed reliability standard must be designed to achieve a specified reliability goal
and be clear and unambiguous regarding what is required and who is required to comply. In
addition, while a proposed reliability standard does not have to reflect the “best practice,” it
cannot be based on the “lowest common denominator,” if such a standard would not efficiently
and effectively achieve its reliability goal.
In its application to be certified as the ERO, NERC proposed to develop reliability standards in
accordance with Section 300 (Reliability Standards Development) of its Rules of Procedure and
the Reliability Standards Development Procedure, which was incorporated into the rules as
Appendix A. In its ERO Certification Order, the Commission found that NERC’s proposed rules
provide for reasonable notice and opportunity for public comment, due process, openness, and a
balance of interests in developing reliability standards. The Commission noted that NERC’s
procedure calls for notifying and involving the public in developing a reliability standard. The
development process is open to any person or entity with a legitimate interest in the reliability of
the bulk power system. NERC considers the comments of all stakeholders, and a vote of
stakeholders is required to approve a reliability standard before it is submitted for Commission
approval.
A key element of the work plan is to review and upgrade all the existing standards based on the
directives in the Commission’s proposed rulemaking; previous industry comments and actual
experience gathered from using the standards; and, information provided in the Staff assessment.
NERC’s rules, and a condition of accreditation by the American National Standards Institute,
require that each standard be reviewed at least every five years. NERC received ANSI
accreditation on March 24, 2003. NERC anticipates completing its review and upgrade of
standards identified in this work plan over several years, beginning with the highest-priority
standards in 2007 (some projects are continuing from 2006).
NERC’s Reliability Standards Development Procedure provides a systematic approach to
improve the standards and to document the basis for those improvements, and it also will serve
as the mechanism for achieving those improvements. Active involvement of industry experts
and stakeholders ensures the best possible opportunity for developing excellent standards.
NERC coordinates its reliability standards development activities with the business practices
developed by the North American Energy Standards Board (NAESB) and with the ISO/RTO
Council. The three organizations coordinate their activities through a Joint Interface Committee.

Plan Organization
The Reliability Standards Development Plan: 2007–2009 is organized as follows:
Volume I
x

Work plan overview:

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o Introduction explaining the purpose of the work plan and background.
o Work plan description.
o Issues to be addressed in improving standards.
x

Appendix A — Schedule and milestones (separate detailed project schedules are
available for distribution to the drafting teams).

Volume II
x

Appendix B — Project descriptions and preliminary standards requests:
o Preliminary outline of a request for each project, describing purpose and scope of
project.
o Work sheets identifying specific issues to be addressed for each standard.

Volume III
x

Plan to address regional “fill-in-the-blank” standards:
o Work plan overview.
o Schedule.
o Preliminary Standard Authorization Requests and work scopes.

Resource Documents
In preparing this work plan, several references were used. These references provide detailed
descriptions of the issues and comments that need to be considered by the drafting teams as they
work on the standards projects defined in the work plan. The references include:
x

FERC NOPR on Reliability Standards, October 20, 2006.

x

FERC Staff Preliminary Assessment of Proposed Reliability Standards, May 11, 2006.

x

Comments of the North American Electric Reliability Council and North American
Electric Reliability Corporation on Staff Preliminary Assessment of Reliability
Standards, June 26, 2006.

x

Comments received during the development of Version 0 reliability standards.

x

Consideration of comments of the Missing Compliance Elements drafting team.

x

Consideration of comments of the Violation Risk Factors drafting team.

x

Consideration of comments in the Phase III–IV standards.

A summary of comments received on each standard has been provided in the individual work
sheets provided in Appendix B (Volume II) for use by the drafting teams.

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Work Plan Description
Overview
A large portion of the work plan is dedicated to reopening the existing reliability standards to
incorporate improvements. The plan groups the existing standards into projects based on
content. Standards with related content are grouped together into a single project to allow a team
of experts to consolidate the requirements, eliminate redundancies, and to ensure consistency of
all the requirements in all the standards. This approach makes the most efficient use of industry
experts.
A total of 31 different projects are defined in Appendix B (Volume II). Some of the projects
address revising a single standard, such as FAC-003. The largest project includes revising 19
standards focusing on related topics: reliability coordinator performance standards IRO-001 to
IRO-005 and IRO-014 to IRO-016; reliability coordinator certification standards ORG-020 to
ORG-27; reliability coordinator staffing and training standard PER-004; and, communications
standards COM-001 and COM-002. Managing the projects in this manner will provide an
opportunity to clearly separate certification requirements (the capability to be a competent
reliability coordinator) from the requirements measuring ongoing reliability performance. Those
requirements are co-mingled in the existing standards today.
The size and makeup of the drafting teams will be determined according to the project scope.
Some drafting teams may choose to subdivide the work. The teams will focus on effectively
integrating the scope of the work within the project to ensure that the standards are consistent
and comprehensive across the subject area.
Each drafting team will be provided a preliminary outline of the project scope, which is provided
in Appendix B (Volume II) and then prepare a Standard Authorization Request for industry
review and comment. A unique development aspect of the projects included in the work plan,
which is different from the development of the Version 0 translation, is that the drafting teams
will not be inhibited from addressing at one time all necessary improvements to the standards, or
from even proposing new changes to the standard, as long as the changes are within the content
area of the standard. The goal is for the drafting team to develop the best possible standard
within the defined subject area, as supported by a consensus of stakeholders.
Several important standards projects are already under way. Those existing projects are expected
to conclude with the standards being approved at the February 2007 NERC Board of Trustees
meetings, and are thus not addressed in the work plan. These include the balancing resources
and demand standards (BAL-007 to BAL-011), relay loadability standard, and the nuclear offsite power supply coordination standard.
The plan does include all other projects to be completed after February 2007. Note that the
project number indicates the year the project was initiated and the sequence within the year.

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Projects initiated in 2006:
2006-01 System Personnel Training (PER-002 and PER-004)
2006-02 Transmission Assessments and Plans (TPL-001 to TPL-006)
2006-03 System Restoration and Blackstart (EOP-005 to EOP-007, and EOP-009)
2006-04 Backup Facilities (COM-001 and EOP-008)
2006-05 Phase III & IV Field Tests (PRC-019, PRC-024, MOD-026, and MOD-027)
2006-06 Reliability Coordination (COM-001, COM-002, IRO-001 to IRO-005, IRO-007 to
IRO-016, ORG-020 to ORG-027, PER-004, and PRC-001)
2006-07 Transfer Capabilities: ATC, TTC, CBM, and TRM (FAC-012, FAC-013, and MOD001 to MOD-009)
2006-08 Transmission Loading Relief (IRO-006)
2006-09 Facility Ratings (FAC-008 and FAC-009)
Projects starting in 2007
2007-01 Underfrequency Load Shedding (PRC-006 to PRC-009)
2007-02 Operating Personnel Communications Protocols (COM-002)
2007-03 Real-time Transmission Operations and Balancing of Load and Generation (COM001, COM-002, TOP-001 to TOP-008, ORG-001 to ORG-018, and PER-001)
2007-04 Certifying System Operators (PER-003)
2007-05 Balancing Authority Controls (BAL-002, and BAL-004 to BAL-006)
2007-06 System Protection (PRC-001)
2007-07 Vegetation Management (FAC-003)
2007-08 Emergency Operations (EOP-001 to EOP-003, and IRO-001)
2007-09 Generator Verification (MOD-024 and MOD-025)
2007-10 Modeling Data (MOD-010 to MOD-015, PRC-013, PRC-015, PRC-020, and PRC021)
2007-11 Disturbance Monitoring (PRC-002 and PRC-018)
Projects starting in 2008
2008-01 Voltage and Reactive Control (VAR-001 and VAR-002)
2008-02 Undervoltage Load Shedding (PRC-010, PRC-011 011, and PRC-022)
2008-03 Demand Data (MOD-016 to MOD-021)
2008-04 Protection Systems (PRC-003 to PRC-005, PRC-012, PRC-014, PRC-016, and PRC017)
2008-05 Cyber Security (CIP-002 to CIP-009)
2008-06 Phasor Measurement Units (new)
2008-07 Resource Adequacy Assessments (new)
Projects starting in 2009 and beyond
2009-01 Disturbance and Sabotage Reporting (CIP-001, EOP-004)
2009-02 Connecting New Facilities to the Grid (FAC-001 and FAC-002)
2009-03 Interchange Information (INT-001, and INT-003 to INT-010)
2010-01 Support Personnel Training (new)
Some current standards are not included in the work plan due to retirement or replacement:
x

BAL-001 and BAL-003

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x

FAC-004 and FAC-005

x

INT-002

x

PER-002

Work on the regional standards will be coordinated with the NERC projects. The work plan to
address regional “fill-in-the-blank” standards, with an evaluation provided in Volume III of this
plan, has been integrated into the project list above to facilitate consistency between the North
American standards and regional standards.
Several of the identified projects require studies to develop the technology or methods that need
to be used in the standards. The studies are identified within the project descriptions and the
schedules of the projects allow time to complete the studies. The studies will be requested of the
NERC Operating and Planning Committees, as well as other groups with the appropriate
expertise to complete the study.
The work plan includes placeholders for two high-priority projects per year that are unknown at
this time. Experience demonstrates that requests will come in for high-priority work on a
continual basis and the resources must be available to handle such requests.
The project timelines have been developed with a certain set of base assumptions regarding the
number of postings of each Standard Authorization Request and draft standard and the time
needed to complete underlying studies. The project schedule is intended to estimate milestones
and provide feedback regarding progress on the projects. However, in most instances NERC
believes it will be more important to focus on ensuring that the standards are correct, rather than
to rush them through a process. Therefore, NERC anticipates that schedules could change over
time. The Standards Committee and NERC staff will oversee the work of the drafting teams to
ensure that any delays maintain a productive and necessary pace, and avoid inefficiency.
The overall schedule for the work plan is shown in Appendix A. Detailed project descriptions
are shown in Appendix B (Volume II).

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Strategy for Project Resources
The work plan has been designed to recognize there are limited staff and industry resources to
complete the projects immediately and completely. While the volume of work and the schedule
are aggressive, they are manageable with the work being extended over several years, and
because much of the work is revising and improving existing standards for which the issues are
already well-defined.
The sequence of projects has been adjusted to spread the use of industry expertise over several
years in the project. For example, system protection experts are a limited resource and each
project requiring that expertise was spread out from the other for that reason. This same
approach was used in sequencing most of the projects. NERC staff resources can effectively
facilitate up to four average-sized projects, another limitation also accounted for in the
development of the work plan.
NERC staff will assign project facilitators. The drafting teams will be formed through the
regular nominations process and appointed by the Standards Committee. Smaller projects may
be staffed with only a few experts to preserve resources for larger projects. Even the larger
projects will be scaled down in size compared to past projects such as the Version 0 effort or the
Phase III-IV standards. Larger projects are expected to be staffed with up to 15 industry
representatives. The smaller teams will allow efficient coverage of the numerous projects
without over-committing industry resources. Stakeholder input is preserved through the public
commenting and voting on standards.
NERC has also established an aggressive program to make more extensive use of conference
calls and WebEx meetings to cut down on travel time associated with meetings.

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Global Improvements
Statutory Criteria
In accordance with Section 215 of the Federal Power Act, FERC may approve, by rule or order,
a proposed reliability standard or modification to a reliability standard if it determines that “the
standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest.”
The first three of these criteria can be addressed in large part by the diligent adherence to
NERC’s Reliability Standards Development Procedure, which has been certified by the
American National Standards Institute (ANSI) as being open, inclusive, balanced, and fair.
Owners, operators, and users of the bulk power system that must comply with the standards, as
well as the end-users who benefit from a reliable supply of electricity and the public in general,
gain some assurance that standards are just, reasonable, and not unduly discriminatory or
preferential because the standards are developed through an ANSI-accredited procedure.
The remaining portion of the statutory test is whether the standard is “in the public interest.”
Implicit in the public-interest test is that a standard is technically sound and ensures a level of
reliability that should be reasonably expected by end-users of electricity. Additionally, each
standard must be clearly written, so that bulk power system owners, operators, and users are put
on notice of the expected behavior. Ultimately, the standards should be defensible in the event
of a governmental authority review or court action that may result from enforcing the standard
and applying a financial penalty.
The standards must collectively provide a comprehensive and complete set of technically sound
requirements that establish an acceptable threshold of performance necessary to ensure the
reliability of the bulk power system. “An adequate level of reliability” would argue for both a
complete set of standards addressing all aspects of bulk power system design, planning, and
operation that materially affect reliability, and for the technical efficacy of each standard.

Quality Objectives
To achieve the goals outlined above, NERC has developed the several quality objectives for the
development of reliability standards. Drafting teams working on assigned projects are charged to
adhere to the following objectives in their work:
1. Applicability  Each reliability standard shall clearly identify the functional classes of
entities responsible for complying with the reliability standard, with any specific
additions or exceptions noted. Such functional classes 1 include: reliability coordinators,
balancing authorities, transmission operators, transmission owners, generator operators,
generator owners, interchange authorities, transmission service providers, market
operators, planning coordinators, transmission planners, resource planners, load-serving
entities, purchasing-selling entities, and distribution providers. Each reliability standard
1

These functional classes of entities are derived from NERC’s Reliability Functional Model.
When a standard identifies a class of entities to which it applies, that class must be defined in the Glossary
of Terms Used in Reliability Standards.

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shall also identify the geographic applicability of the standard, such as the entire North
American bulk power system, an interconnection, or within a regional entity area. A
standard should also identify any limitations on the applicability of the standard based on
electric facility characteristics, such as generators with a nameplate rating of 20 MW or
greater, or transmission facilities energized at 200 kV or greater.
2. Purpose  Each reliability standard shall have a clear statement of purpose that shall
describe how the standard contributes to the reliability of the bulk power system.
3. Performance Requirements — Each reliability standard shall state one or more
performance requirements, which if achieved by the applicable entities, will provide for a
reliable bulk power system, consistent with good utility practices and the public interest.
Each requirement is not a “lowest common denominator” compromise, but instead
achieves an objective that is the best approach for bulk power system reliability, taking
account of the costs and benefits of implementing the proposal.
4. Measurability  Each performance requirement shall be stated so as to be objectively
measurable by a third party with knowledge or expertise in the area addressed by that
requirement. Each performance requirement shall have one or more associated measures
used to objectively evaluate compliance with the requirement. If performance results can
be practically measured quantitatively, metrics shall be provided within the requirement
to indicate satisfactory performance.
5. Technical Basis in Engineering and Operations — Each reliability standard shall be
based upon sound engineering and operating judgment, analysis, or experience, as
determined by expert practitioners in that particular field.
6. Completeness — Each reliability standard shall be complete and self-contained. The
standards shall not depend on external information to determine the required level of
performance.
7. Consequences for Noncompliance  Each reliability standard shall make clearly
known to the responsible entities the consequences of violating a standard, in
combination with guidelines for penalties and sanctions, as well as other ERO and
regional entity compliance documents.
8. Clear Language — Each reliability standard shall be stated using clear and unambiguous
language. Responsible entities, using reasonable judgment and in keeping with good
utility practices, are able to arrive at a consistent interpretation of the required
performance.
9. Practicality — Each reliability standard shall establish requirements that can be
practically implemented by the assigned responsible entities within the specified effective
date and thereafter.
10. Consistent Terminology — Each reliability standard, to the extent possible, shall use a
set of standard terms and definitions that are approved through the NERC reliability
standards development process.

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Issues Related to the Applicability of a Standard
In Order No. 672, the Commission states that a proposed reliability standard should be clear and
unambiguous regarding what is required and who is required to comply. Users, owners, and
operators of the bulk power system must know what they are required to do to maintain
reliability. Section 215(b) of the FPA requires all “users, owners and operators of the bulk
power system” to comply with Commission-approved reliability standards.
The term “owner, operator and users of the bulk power system” defines the statutory
applicability of the reliability standards. NERC’s Reliability Functional Model further refines
the set of owners, operators, and users by identifying categories of functions that entities perform
so the applicability of each standard can be more clearly defined. Applicability is clear if a
standard precisely states the applicability using the functions an entity performs. For example,
“a generator operator shall verify the reactive power output capability of each generating unit”
states clear applicability compared with a standard that states “a bulk power system user shall
verify the reactive power output capability of each generating unit.” The use of the Reliability
Functional Model in the standards narrows the applicability of the standard to a particular class
or classes of bulk power system owners, operators, and users. A standard is more clearly
enforceable when it narrows the applicability to a specific class of entities than if the standard
simply references a wide range of entities, e.g., all bulk power system owners, operators, and
users.
In determining the applicability of each standard and the requirements within a standard, the
drafting team should follow the definitions provided in the NERC Glossary of Terms Used in
Reliability Standards and should also be guided by the Reliability Functional Model.
In addition to applying definitions from the Reliability Functional Model, the revised standards
must address more specific applicability criteria that identify only those entities and facilities that
are material to bulk power system reliability with regard to the particular standard. For example,
the drafting team may determine that only generators above 20 MW may be material with regard
to a particular standard. The drafting team may choose to indicate a nominal voltage level or
other criteria to indicate transmission facilities that are relevant to the reliability of the bulk
power system in the context of a particular standard. The drafting team should consider other
clarifications to applicability, such as transmission operators that perform bulk power system
switching or transmission owners with special protection systems. The drafting team should
consider guidance in the Reliability Functional Model regarding which entities are responsible
for a wide-area perspective, such as the reliability coordinator and planning coordinator,
compared to entities that are responsible for a more local perspective.
The drafting team should strive to clearly define the entities and facilities that are addressed by
the standard, and which are considered not relevant to the reliability of the bulk power system.
Given the diversity of electric systems in North America, this is a difficult task and exceptions
can always be expected to exist. The goal is to place obligations on the entities whose
performance will impact the reliability of the bulk power system, but to avoid painting the
applicability with such a broad brush that entities become obligated even when meeting a
requirement will make no material contribution to bulk power system reliability.

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Every entity class described in the Reliability Functional Model performs functions that are
essential to the reliability of the bulk power system. This point is best highlighted with the
example that might be the most difficult to understand, the inclusion of distribution providers.
Section 215 of the FPA specifically excludes facilities used in the local distribution of electric
energy. Nonetheless, some of the NERC standards apply to a class of entities called distribution
providers. Distribution providers are covered because, although they own and operate facilities
in the local distribution of electric energy, they also perform functions affecting and essential to
the reliability of the bulk power system. With regard to these facilities and functions that are
material to the reliability of the bulk power system, a distribution provider is a bulk power
system user. For example, requirements for distribution providers in the reliability standards
apply to the underfrequency load shedding relays that are maintained and operated within the
distribution system to protect the reliability of the bulk power system. There are also
requirements for distribution providers to provide demand forecast information for the planning
of reliable operations of the bulk power system.
A similar line of thinking can apply to every other entity in the Reliability Functional Model,
including load-serving entities and purchasing-selling entities, which are users of the bulk power
system to the extent they transact business for the use of transmission service or to transfer
power across the bulk power system. NERC has specific requirements for these entities based on
how these uses may impact the reliability of the bulk power systems. Other functional entities
are more obviously bulk power system owners and operators, such as reliability coordinators,
transmission owners and operators, generator owners and operators, planning coordinators,
transmission planners and resource planners. It is the extent to which these entities provide for a
reliable bulk power system or perform functions that materially affect the reliability of the bulk
power system that these entities fall under the jurisdiction of Section 215 of the FPA and the
proposed reliability standards. The use of the Reliability Functional Model simply groups these
entities into logical functional areas to enable the standards to more clearly define the
applicability.

Issues Related to Regional Entities and Reliability Organizations
Because of the transition to mandatory reliability standards, confusion has arisen with regard to
the distinction between regional entities and regional reliability organizations. The regional
councils that have until now been the owners and members of NERC have historically been
referred to as regional reliability organizations in the Reliability Functional Model and in the
standards. In an era of voluntary standards and guides, it was acceptable that a number of the
standards placed requirements on regional reliability organizations to develop regional criteria,
procedures, and plans, and that entities within the region would be expected to follow those
requirements. Section 215 of the FPA introduces a new term, called regional entities. Regional
entities have delegated authorities, under agreement with NERC, to propose and enforce
reliability standards within the region, and to perform other functions in support of the electric
reliability organization. The existing regional reliability organizations are expected to apply to
become regional entities.
With the regions having responsibility for enforcement, it is no longer appropriate for the regions
to be named as responsible entities within the standards. The work plan calls for removing
requirements from the standards that refer to regional reliability organizations, either by deleting

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the requirements or redirecting the responsibilities to the most applicable functions in the
Reliability Functional Model, such as planning coordinators, reliability coordinators, or resource
planners. In instances where a regional standard or criteria are needed, the ERO may direct the
regional entities to propose a regional standard in accordance with ERO Rule 312.2, which states
NERC may “direct regional entities to develop regional reliability standards.” There is no need
to have a NERC standard that directs the regions to develop a regional standard. NERC
standards should only include regional entities or RROs in the rare instance the region has a
specific operational, planning, or security responsibility.
Many of the so-called regional “fill-in-the-blank” standards can be rewritten as North American
standards, without diluting the requirements to a least-common-denominator solution. The
regional standards work plan in Volume III addresses specific examples of standards that will
become North American standards as a result of the projects in this work plan. In the cases that
the regional entities are required to develop regional standards, such as in underfrequency load
shedding, NERC can direct the regions to propose such standards and may, if necessary develop
a uniform North American standard to serve as a default.
With regard to distinguishing between the terms regional reliability organizations and regional
entities, the following guidance should be used. The corporations that provide regional
reliability services on behalf of their members are regional reliability organizations. NERC may
delegate to these entities a set of regional entity functions. The regional reliability organizations
perform delegated regional entity functions like NERC is the organization that performs the
electric reliability organization function. Regional reliability organizations may do things other
than their statutory or delegated regional entity functions.

Issues Related to Ambiguity
Drafting teams should strive to address all potential ambiguities in the language of each standard,
particularly in the performance requirements. Redundancies should also be eliminated.
There are many areas in which the reliability standards can be further improved beyond the
changes incorporated in the Version 0 translation and other post-blackout clarifications to the
operating policies. Each performance requirement must be written to include four elements:
x

Who — defines which functional entity or entities are responsible, including any
narrowing limits on applicability based on material impact to reliability.

x

Shall do what — describes an action the responsible entity must perform. A list of
commonly used action verbs is provided in the Drafting Team Guidelines.

x

To what outcome — describes the expected, measurable outcome from the action.

x

Under what conditions — describes specific conditions under which the action must be
performed. If blank, the action is assumed to be required at all times and conditions.

Drafting teams should focus on defining measurable outcomes for each requirement, and not on
prescribing how a requirement is to be met. While being more prescriptive may provide a sense
of being more measurable, it does not add reliability benefits and may be inefficient and restrict
innovation.

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Issues Related to Technical Adequacy
The Staff Report notes that requirements specified in some standards may not be sufficient to
ensure an adequate level of reliability. While Order No. 672 notes that “best practice” may be an
inappropriately high standard, it also warns that a “lowest common denominator” approach will
not be acceptable if it is not sufficient to ensure system reliability.
Each standard should clearly meet the statutory test of providing an adequate level of reliability
of the bulk power system. Each requirement should be evaluated and the bar raised as needed,
consistent with good practice and as supported by consensus.

Issues Related to Measures and Compliance Elements
Although an effort has been made to provide measures and compliance information for all
existing standards, some standards provide only a partial set of measures or compliance
information. The drafting teams should ensure that each performance requirement is covered by
one or more measures and the information necessary to guide compliance monitoring.
Each requirement must be addressed by one or more measures. A measure states what a
responsible entity must do to demonstrate compliance to a third party, i.e., the compliance
monitor. Measures are proxies, or “yardsticks” used to evaluate whether required performance
or outcomes have been achieved. Measures do not add new requirements or expand the details
of the requirements. Each measure shall be tangible, practical, and objective. A measure should
be written so that achieving full compliance with the measure provides the compliance monitor
with the necessary and sufficient information to demonstrate that the associated requirement was
met by the responsible entity. Each measure should clearly refer to the requirement(s) to which
it applies and each requirement should clearly indicate which measure(s) apply to that
requirement.
The violation severity levels (formerly known as levels of non-compliance) are meant to indicate
how severely an entity violated a requirement. For example, in the recently approved standard
on vegetation management, there are three levels of non-compliance ranging from whether the
vegetation management program has all necessary documentation to meet the requirements to the
number of transmission outages due to tree contacts. Historically, there has been confusion and
some of the existing levels of non-compliance incorporate risk impacts or consequences. Going
forward, the risk or consequences component should be addressed by the violation risk factor,
while the violation severity levels should only be used to categorize how badly the requirement
was violated.
The drafting team is instructed to develop a violation risk factor for each requirement in a
standard in accordance with the following definitions:
x

High Risk Requirement — A requirement that, if violated, could directly cause or
contribute to bulk electric system instability, separation, or a cascading sequence of
failures, or could place the bulk electric system at an unacceptable risk of instability,
separation, or cascading failures; or a requirement in a planning time frame that, if
violated, could, under emergency, abnormal, or restorative conditions anticipated by the
preparations, directly cause or contribute to bulk electric system instability, separation, or

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Reliability Standards Development Plan: 2007–2009

a cascading sequence of failures, or could place the bulk electric system at an
unacceptable risk of instability, separation, or cascading failures, or could hinder
restoration to a normal condition.
x

Medium Risk Requirement — A requirement that, if violated, could directly affect the
electrical state or the capability of the bulk electric system, or the ability to effectively
monitor and control the bulk electric system. However, violation of a medium risk
requirement is unlikely to lead to bulk electric system instability, separation, or cascading
failures; or a requirement in a planning time frame that, if violated, could, under
emergency, abnormal, or restorative conditions anticipated by the preparations, directly
and adversely affect the electrical state or capability of the bulk electric system, or the
ability to effectively monitor, control, or restore the bulk electric system. However,
violation of a medium risk requirement is unlikely, under emergency, abnormal, or
restoration conditions anticipated by the preparations, to lead to bulk electric system
instability, separation, or cascading failures, nor to hinder restoration to a normal
condition.

x

Lower Risk Requirement — A requirement that, if violated, would not be expected to
adversely affect the electrical state or capability of the bulk electric system, or the ability
to effectively monitor and control the bulk electric system. A requirement that is
administrative in nature; or a requirement in a planning time frame that, if violated,
would not, under the emergency, abnormal, or restorative conditions anticipated by the
preparations, be expected to adversely affect the electrical state or capability of the bulk
electric system, or the ability to effectively monitor, control, or restore the bulk electric
system. A planning requirement that is administrative in nature.

The drafting team should also indicate the time horizon available for mitigating a violation to the
requirement:
x

Long-term planning — a planning horizon of one year or longer.

x

Operations planning — operating and resource plans from day-ahead up to and
including seasonal.

x

Same-day operations — routine actions required within the timeframe of a day, but not
real-time.

x

Real-time operations — actions required within one hour or less to preserve the
reliability of the bulk electric system.

x

Operations assessment — follow-up evaluations and reporting of real time operations.

The drafting team should indicate a set of violation severity levels that can be applied for the
requirements within a standard. (“Violation severity levels” replace the existing “levels of noncompliance.”) The violation severity levels may be applied for each requirement or combined to
cover multiple requirements, as long as it is clear which requirements are included.

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Reliability Standards Development Plan: 2007–2009

The violation severity levels should be based on the following definition:
x

Level 1: mostly compliant with minor exceptions — The responsible entity is mostly
compliant with and meets the intent of the requirement but is deficient with respect to one
or more minor details. Equivalent score: 95 percent to 99 percent compliant.

x

Level 2: mostly compliant with significant exceptions — The responsible entity is
mostly compliant with and meets the intent of the requirement but is deficient with
respect to one or more significant elements. Equivalent score: 85 percent to 94 percent
compliant.

x

Level 3: marginal performance or results — The responsible entity has only partially
achieved the reliability objective of the requirement and is missing one or more
significant elements. Equivalent score: 70 percent to 84 percent compliant.

x

Level 4: poor performance or results — The responsible entity has failed to meet the
reliability objective of the requirement. Equivalent score: less than 70 percent compliant.

The drafting team should seek inputs and review of all measures and compliance information
from the NERC compliance staff. The compliance staff will provide general guidance regarding
compliance data retention requirements and other elements of the compliance process.

Fill-in-the-Blank Standards
The phrase “fill-in-the-blank” standards has been coined to refer to those standards that require a
bulk power system owner, operator, or user to follow regional criteria that are not part of a
reliability standard. These “fill-in-the-blank” standards have been identified and discussed
earlier in these comments. The practice of using “fill-in-the-blank” standards was acceptable
historically when standards were voluntary, but not with standards that are mandatory and
enforceable under statutory authority.
NERC recognized this issue early in the process of developing its application to become the
ERO. NERC formed and staffed a program to coordinate the development of regional standards
and to address the “fill-in-the-blank” issue. A team with representation from each region was
formed and reviewed these particular standards to prepare recommendations for a course of
action. The action plan and schedule to resolve each “fill-in-the-blank” standard are provided in
Volume III of this plan.
There are several possible outcomes with regard to each of these particular standards. The work
team completed a review to verify which standards are in fact “fill-in-the-blank,” i.e., they
require the responsible entity to perform in accordance with regional criteria that are outside the
NERC standards. There are several options to address each standard on a case-by-case basis:
Analysis Results
Insufficient justification for regional
differences.
Mandatory enforcement is necessary for
reliability but regional differences are justified.

November 30, 2006

Recommended Action
Replace the standard with a uniform North
American standard.
Direct the regions to develop their regional
criteria as consistent standards to be filed with
NERC, FERC, and the applicable authorities in

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Reliability Standards Development Plan: 2007–2009

Mandatory enforcement is not necessary for
reliability.

Canada for approval as ERO standards.
Retire the NERC standards and allow the
regions to maintain voluntary criteria and
procedures as needed to coordinate reliability
in the region. No enforcement mechanism is
provided under the FPA.

NERC supports the strong preference of the Commission for consistency with regard to regional
standards, with statutory deference for regions organized on an interconnection-wide basis as
required by statute. NERC will work to achieve that consistency and to provide sufficient
justification for regional standards or variations to the NERC standards that are filed for
Commission approval.

Undue Negative Impact on Competition
Many of the existing NERC standards are related to business practices, although their primary
purpose is reliability. Reliability standards, business practices, and commercial interests are
inextricably linked. An example of an existing standard that is both a reliability standard and a
business practice is the Transmission Loading Relief Procedure currently used as an
interconnection-wide congestion management method in the Eastern Interconnection. It would
be safe to conclude that every reliability standard has some degree of commercial impact and
therefore impacts competition. The statutory test to be applied by the Commission is whether the
reliability standard has an “undue adverse effect” on competition.
NERC has taken several steps to ensure its reliability standards do not have an undue adverse
impact on business practices or competition. First, NERC coordinates the development of all
standards with the North American Energy Standards Board (NAESB) and the ISO/RTO Council
through a memorandum of understanding and the work of the Joint Interface Committee. In
addition to this formal process, NERC technical groups work informally with NAESB groups to
ensure effective coordination of wholesale electric business practice standards and reliability
standards. Recently, NERC and NAESB established a procedure for the joint development of
standards in areas that have both reliability and business practice elements, and agreed to jointly
publish the results to facilitate access by users of the standards. This procedure is being
implemented for all standards in which the reliability and business practice elements are closely
related, thereby making joint development a more efficient approach.
To ensure each reliability standard does not have an undue adverse effect on competition, NERC
requires that each standard meet the following criteria:
x

Competition — A reliability standard shall not give any market participant an unfair
competitive advantage.

x

Market Structures — A reliability standard shall neither mandate nor prohibit any
specific market structure.

x

Market Solutions — A reliability standard shall not preclude market solutions to
achieving compliance with that standard.

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Reliability Standards Development Plan: 2007–2009

x

Commercially Sensitive Information — A reliability standard shall not require the public
disclosure of commercially sensitive information. All market participants shall have
equal opportunity to access commercially non-sensitive information that is required for
compliance with reliability standards.

Additional Considerations
Drafting teams should consider the following in reviewing and revising their assigned standards:
x

Title: In general, the title should be concise and to the point. Care should be taken not to
try to fully describe a standard through its title. The title should fit a single line in both
the header and in the body of the standard.

x

Purpose: Current purpose statements are inconsistent. The purpose should clearly state a
benefit to the industry (value proposition) in fulfilling the requirements. The purpose
should not simply state “the purpose is develop a standard to …”

x

References: A new section (F) is being added to the standards template for a listing of
associated references that support implementation of the standard. Drafting teams may
develop or reference supporting documents and provide a link in this section.

x

Version histories: Version histories should be exploited to include complete listings of
what has been changed from version to version so that end-users can easily keep track of
changes to standards. This will also serve as a type of audit trail for changes.

x

Maintaining certification: Certification standards should be modified to include longterm maintainability of the initial certification requirements.

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Reliability Standards Development Plan: 2007–2009

Appendix A — Work Plan Schedule

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MOD-001 thru MOD-009, FAC-012, FAC-013

TLR Split joint with NAESB (IRO-006)

FAC-008, FAC-009

PRC-006 thru 009

COM-002

2006-07 Transfer Capabilities (ATC,TTC,CBM, and TRM)

2006-08 Transmission Loading Relief

2006-09 Facility Ratings

2007-01 Under Frequency Load Shed

2007-02 Operating Personnel Communication Protocols

PER-003

BAL-002,004,005,006

PRC-001

FAC-003

EOP-001 thru 003

MOD-024, MOD-025

MOD-010 thru 015, PRC-013,PRC-015,PRC-020,PRC-021

PRC-002, PRC-018

VAR-001, VAR-002

PRC-010, PRC-011, PRC-022

MOD-016 thru 021

PRC-003 thru 005, PRC-012,PRC-014,PRC-016,PRC- 017

CIP-002 thru -009

New Standard

New Standard

Unplanned

Unplanned

CIP-001, EOP-004

FAC-001, FAC-002

INT-001, INT-003 thru -010

Unplanned

Unplanned

New Standard

2007-04 Certifying System Operators

2007-05 Balancing Authority Controls

2007-06 System Protection

2007-07 Vegetation Management

2007-08 Emergency Operations

2007-09 Generator Verification

2007-10 Modeling Data

2007-11 Disturbance Monitoring

2008-01 Voltage & Reactive Control

2008-02 Under Voltage Load Shed

2008-03 Demand Data

2008-04 Protection Systems

2008-05 Cyber Security

2008-06 Phasor Measuring Units

2008-07 Resource Adequacy Assessments

2008-A Unplanned Project

2008-B Unplanned Project

2009-01 Disturbance and Sabotage Reporting

2009-02 Connecting New Facilities to the Grid

2009-03 Interchange Information

2009-A Unplanned Project

2009-B Unplanned Project

2010-01 Support Personnel Training

2007-03 Real-time Transmission Operations & Balancing of TOP-001 thru 008, ORG-001 thru -018 , COM-001,COM-002
Load and Generation

PRC-019, PRC-024, MOD-026, MOD-027

IRO-001 thru 005, IRO-007 thru 016, ORG-020 THRU 027,
PER-004, COM-001, COM-002

EOP-008

2006-06 Reliability Coordination

EOP-005, EOP-006, EOP-007, EOP-009

2006-04 Back-up Facilities

2006-05 Phase III/IV Field Tests

TPL-001 thru 006

Applicable Standards

2006-03 System Restoration

New Standard

2006-02 Transmission Assessments and Plans

Project #
Name
2006-01 System Personnel Training
Qtr 3

Qtr 4

2007
Qtr 1

Page 1

Qtr 2

Qtr 3

Qtr 4

2008
Qtr 1
Qtr 2

Qtr 3

Relaibility Standards Development Plan
2007-2009
Qtr 4

2009
Qtr 1
Qtr 2

Qtr 3

Qtr 4

2010
Qtr 1
Qtr 2

Qtr 3

Qtr 4

2011
Qtr 1

Qtr 2

Qtr 3

Qtr 4

2012
Qtr 1