Commissioner Norris Statement

December 20, 2012
Commissioner John R. Norris

Docket Nos. RM12-6-000 & RM12-7-000
Item No. E-5

Statement of Commissioner John R. Norris on
Revised Definition of Bulk Electric System
“I consider the process that led to today’s Final Rule to be a success story in our ongoing efforts to improve the process
of developing and implementing mandatory reliability standards under section 215 of the Federal Power Act.
“While speed is relative, it is worth noting that in about two years, we have moved from Order No. 743, which directed
NERC to revise its definition of bulk electric system, to today’s Final Rule. In that time, NERC conducted an industry
stakeholder process, the Commission issued a NOPR on the results of that process, we analyzed numerous comments on
that NOPR, and today we issue a Final Rule on NERC’s proposal.
“The end result is a Final Rule that overwhelmingly approves the work of NERC and industry stakeholders in crafting
the new bulk electric system definition. This shows that when FERC and NERC work together, clearly define goals and
expectations, and avoid surprises, a quality product can result.
“With respect to the substance of today’s Final Rule, I note that there are two narrow instances in this order where the
Commission reserves to itself a direct role in defining the bulk electric system. Specifically, the draft Final Rule
concludes that, where necessary, questions of fact regarding whether a facility is used in local distribution (and thus
excluded from the bulk electric system under section 215) should be resolved directly by the Commission, rather than
through NERC’s exceptions process. In addition, the draft Final Rule finds that the Commission has authority under
section 215 to act on its own to designate facilities for inclusion in the bulk electric system if it deems that such action
is necessary.
“As I have said many times, I believe the FERC-NERC construct works best when FERC sets the overall policy direction,
and leaves the day-to-day implementation of the mandatory reliability standards regime to NERC, the Regional Entities
and industry. These two portions of the Final Rule, in some measure, deviate from this framework. However, in both
instances we emphasize that direct Commission action should be rare. I support these two aspects of today’s Final
Rule, but hope that we will monitor them in practice to ensure that they do not interfere or conflict with the overall
FERC-NERC working relationship.”