Petition Approval (BAL-002-WECC-2)

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

NORTH AMERICAN ELECTRIC
RELIABILITY CORPORATION

)
)

Docket Nos. RD13-_______
RM09-15-____

JOINT PETITION OF THE
NORTH AMERICAN ELECTRIC RELIABILITY CORPORATION AND
WESTERN ELECTRICITY COORDINATING COUNCIL
FOR APPROVAL OF WECC REGIONAL RELIABILITY STANDARD
BAL-002-WECC-2 — CONTINGENCY RESERVE
Gerald W. Cauley
President and Chief Executive Officer
North American Electric Reliability Corporation
3353 Peachtree Road, N.E.
Suite 600, North Tower
Atlanta, GA 30326
(404) 446-2560
(404) 446-2595– facsimile

Charles A. Berardesco
Senior Vice President and General Counsel
Holly A. Hawkins
Assistant General Counsel
Stacey Tyrewala
Senior Counsel
North American Electric Reliability Corporation
1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099– facsimile
[email protected]
[email protected]
[email protected]
Sandy Mooy
Associate General Counsel
Chris Albrecht
Legal Counsel
Western Electricity Coordinating Council
155 North 400 West, Suite 200
Salt Lake City, UT 84103
(801) 582-0353
[email protected]
[email protected]

April 12, 2013

TABLE OF CONTENTS
I. EXECUTIVE SUMMARY ............................................................................................................. 2
A. Procedural History
II. NOTICES AND COMMUNICATIONS ....................................................................................... 6
III. BACKGROUND .............................................................................................................................. 7
A. Regulatory Framework
B. Basis for Approval of Proposed Regional Reliability Standard
IV. JUSTIFICATION FOR APPROVAL OF PROPOSED REGIONAL RELIABILITY
STANDARD ..................................................................................................................................... 10
A. Basis and Purpose of Standard BAL-002-WECC-2 – Contingency Reserve
B. Additional Order No. 672 Criteria for Regional Reliability Standards
V. CONCLUSION ............................................................................................................................... 22
EXHIBITS
Exhibit A — Order No. 672 Criteria
Exhibit B — BAL-002-WECC-2 — Contingency Reserve Regional Reliability Standard
Proposed for Approval
Exhibit C — Consideration of Comments
Exhibit D — Standard Drafting Team Roster
Exhibit E — BAL-002-WECC-2 Violation Severity Level and Violation Risk Factor
Analysis
Exhibit F — Implementation Plan for the Proposed Standard
Exhibit G — Contingency Reserve Data Comparison – Two Years
Exhibit H — BAL-002-WECC-2 Redline to WECC BAL-STD-002-0 and BAL-002WECC-2 Redline to BAL-002-WECC-1
Exhibit I — Complete Development Record of Proposed BAL-002-WECC-2
Contingency Reserve Regional Reliability Standard

1

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

NORTH AMERICAN ELECTRIC
RELIABILITY CORPORATION

)
)

Docket No. RD13-_______
RM09-15-____

JOINT PETITION OF THE
NORTH AMERICAN ELECTRIC RELIABILITY CORPORATION AND
WESTERN ELECTRICITY COORDINATING COUNCIL
FOR APPROVAL OF WECC REGIONAL RELIABILITY STANDARD
BAL-002-WECC-2 — CONTINGENCY RESERVE
The North American Electric Reliability Corporation (“NERC”)1 hereby requests
that the Federal Energy Regulatory Commission (“FERC” or the “Commission”)
approve, in accordance with Section 215(d)(1) of the Federal Power Act (“FPA”)2 and
Section 39.5 of the Commission’s regulations, 18 C.F.R. § 39.5, proposed regional
Reliability Standard BAL-002-WECC-2 included in Exhibit B. The Western Electricity
Coordinating Council (“WECC”) supports the filing of this petition.3 NERC is hereby
requesting approval of the proposed regional Reliability Standard, implementation plan,
Violation Risk Factors (“VRFs”) and Violation Severity Levels (“VSLs”) and revision of
the Glossary of Terms Used in NERC Reliability Standards4 to remove the following
WECC regional terms: Non-Spinning Reserve and Spinning Reserve.
NERC proposes an effective date of the first day of the third quarter following
applicable regulatory approval. Upon Commission approval, this standard will only be
1

NERC has been certified by the Commission as the Electric Reliability Organization (“ERO”)
authorized by Section 215 of the Federal Power Act. The Commission certified NERC as the ERO in its
order issued July 20, 2006 in Docket No. RR06-1-000. 116 FERC ¶ 61,062 (2006) (“ERO Certification
Order).
2
16 U.S.C. 824o.
3
As the Regional Entity who developed proposed regional Reliability Standard BAL-002-WECC-2,
WECC joins and supports NERC’s petition, thereby making WECC a party in this proceeding.
4
Available here: http://www.nerc.com/files/Glossary_of_Terms.pdf.

1

effective within the WECC footprint and the existing BAL-STD-002-0 WECC regional
Reliability Standard will be retired. The proposed regional Reliability Standard will be in
effect only for applicable registered entities within the WECC Region.
I.

EXECUTIVE SUMMARY
The Resource and Demand Balancing (“BAL”) group of Reliability Standards

ensure that resources and demand are balanced to maintain Interconnection frequency
within limits. The purpose of the BAL-002 Disturbance Control Performance Reliability
Standard is to ensure the Balancing Authority is able to utilize its Contingency Reserve5
to balance resources and demand and return Interconnection frequency within defined
limits following a Reportable Disturbance. The purpose of proposed Reliability Standard
BAL-002-WECC-2 ― Contingency Reserve is to provide a regional Reliability Standard
that specifies the quantity and types of Contingency Reserve required to ensure reliability
under normal and abnormal conditions. The modifications submitted to the proposed
regional Reliability Standard BAL-002-WECC-2 were developed in response to
Commission Order No. 740, which remanded the previously proposed regional
Reliability Standard, BAL-002-WECC-1.6
As explained herein, proposed regional Reliability Standard BAL-002-WECC-2
is more stringent than the continent-wide Reliability Standard, BAL-002-1a. NERC
Reliability Standard BAL-002-1a provides that a Balancing Authority, Reserve Sharing
Group, or Regional Reliability Organization responding to a disturbance must fully

5

The term “Contingency Reserve” is defined in the NERC Glossary of Terms Used in Reliability
Standards as “The provision of capacity deployed by the Balancing Authority to meet the Disturbance
Control Standard (DCS) and other NERC and Regional Reliability Organization contingency
requirements.”
6
Version One Regional Reliability Standard for Resource and Demand Balancing, Order No. 740,
133 FERC ¶ 61,063 (2010).

2

restore its Contingency Reserves within 90 minutes7 following the Disturbance Recovery
Period, which is set at 15 minutes.8
Proposed regional Reliability Standard BAL-002-WECC-2 provides that a
Balancing Authority or Reserve Sharing Group responding to a disturbance must fully
restore its Contingency Reserves within 60 minutes.9 Further, the calculation of
minimum Contingency Reserves in Requirement R1 of proposed regional Reliability
Standard BAL-002-WECC-2 is more stringent than the national requirement.10
As the Commission has noted, in the Western Interconnection there are a
significant number of transmission paths that are voltage or frequency stability-limited, in
contrast to other regions of the Bulk-Power System where transmission paths are more
often thermally-limited.11 Disturbances that result in a stability-limited transmission path
overload, generally must be responded to in a shorter time frame than a disturbance that
results in a thermally-limited transmission path overload. This physical difference is one
of the reasons for the need for certain provisions of regional Reliability Standards in the
Western Interconnection, including proposed regional Reliability Standard BAL-002WECC-2.

7

BAL-002-1a, Requirement R6 states:
R6. A Balancing Authority or Reserve Sharing Group shall fully restore its Contingency Reserves
within the Contingency Reserve Restoration Period for its Interconnection.
R6.1. The Contingency Reserve Restoration Period begins at the end of the Disturbance
Recovery Period.
R6.2. The default Contingency Reserve Restoration Period is 90 minutes.
8
BAL-002-1a, Requirement R4.2 provides: “R4.2. The default Disturbance Recovery Period is 15
minutes after the start of a Reportable Disturbance.”
9
In approving WECC-BAL-STD-002-0, the Commission found that WECC’s requirement to
restore contingency reserves within 60 minutes was more stringent than the 90 minute restoration period set
forth in NERC’s BAL-002-0. North American Electric Reliability Corp., 119 FERC ¶ 61,260 at P 53
(2007).
10
The Commission acknowledged this in Order No. 740 at P 39. (“We believe that WECC’s
proposed calculation of minimum contingency reserves is more stringent than the national requirement…”).
11
Order No. 740 at P 23.

3

A. Procedural History
1. BAL-002
BAL-002 is the continent-wide Reliability Standard and was initially submitted
for Commission approval in Docket No. RM06-16-000 and accepted in Order No. 693.12
BAL-002-0 was revised (and therefore renumbered as BAL-002-1) to address two
Commission directives from paragraph 321 of Order No. 693. BAL-002-1 was submitted
in Docket No. RD10-15-000 and was accepted by the Commission via letter order on
January 10, 2011.13 An interpretation of BAL-002 was submitted for Commission
approval on February 12, 2013 in Docket No. RM13-6-000 and is currently pending.
2. BAL-002-WECC
In June 2007, the Commission approved regional Reliability Standard WECC
BAL-STD-002-0 (the predecessor of BAL-002-WECC-1) finding that the standard was
more stringent than the corresponding NERC Reliability Standard, BAL-002-0.14
Specifically, the Commission found that WECC’s requirement to restore contingency
reserve within 60 minutes was more stringent than the 90-minute restoration period as set
forth in NERC’s BAL-002-0.15
The Commission directed WECC to develop certain minor modifications to
WECC BAL-STD-002-0, as identified by NERC in its filing letter for the current

12

Mandatory Reliability Standards for the Bulk-Power System, Order No. 693,
FERC Stats. & Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053 (2007).
13
134 FERC ¶ 61,015 (2011).
14
North American Electric Reliability Corp., 119 FERC ¶ 61,260 at P 53 (2007).
15
Id. (“The Commission finds that the proposed regional Reliability Standard is more stringent than
the corresponding NERC Reliability Standard, BAL-002-0, because WECC requires a more stringent
minimum reserve requirement than the nation-wide requirement. Further, WECC’s requirement to restore
contingency reserves within 60 minutes is more stringent than the 90 minute restoration period set forth in
NERC’s BAL-002-0.”)(internal citation omitted).

4

standard.16 For example, the Commission determined that: (1) regional definitions
should conform to definitions set forth in the NERC Glossary of Terms Used in
Reliability Standards (“NERC Glossary”) unless a specific deviation has been justified;
and (2) documents that are referenced in the Reliability Standard should be attached to
the Reliability Standard. The Commission also found that it is important that regional
Reliability Standards and NERC Reliability Standards achieve a reasonable level of
consistency in their structure so that there is a common understanding of the elements.
Finally, the Commission directed WECC to address stakeholder concerns regarding
ambiguities in the terms “load responsibility” and “firm transaction.”17
On March 25, 2009, NERC submitted a petition to the Commission seeking
approval of BAL-002-WECC-1 and requesting the concurrent retirement of WECC BALSTD-002-0. On October 21, 2010, the Commission remanded the proposed BAL-002WECC-1 standard based on concerns that WECC had not provided adequate technical
support to demonstrate that the requirements of the proposed regional Reliability
Standard are sufficient to ensure the reliable operation of the Bulk-Power System within
WECC. Specifically, the Commission stated that WECC did not present data indicating
that extending the reserve restoration period from 60 to 90 minutes did not present an
unreasonable risk that a second major contingency could occur before reserves are
restored after an initial contingency.18
In response to the Commission’s remand, WECC has developed modifications to
the proposed standard, BAL-002-WECC-2, and reverted to the more stringent approach

16

119 FERC ¶ 61,260 at P 55.
Id. at P 56.
18
Version One Regional Reliability Standard for Resource and Demand Balancing, 133 FERC ¶
61,063 at P 2 (2010).
17

5

previously approved by the Commission. This filing is submitted with the specific
purpose of addressing those issues mandated for modification by the Commission in its
order remanding BAL-002-WECC-1. The WECC standard drafting team has also made
conforming changes to the standard, bringing the styles, formatting, standardized
language, and Violation Risk Factors and Violation Severity Levels into compliance with
current NERC drafting conventions. The proposed regional Reliability Standard was
adopted by the NERC Board of Trustees on November 7, 2012.

II.

NOTICES AND COMMUNICATIONS
Notices and communications with respect to this filing may be addressed to the

following:19
Gerald W. Cauley
President and Chief Executive Officer
North American Electric Reliability
Corporation
3353 Peachtree Road, N.E.
Suite 600, North Tower
Atlanta, GA 30326
(404) 446-2560
(404) 446-2595– facsimile

Charles A. Berardesco*
Senior Vice President, General Counsel and
Corporate Secretary
Holly A. Hawkins*
Assistant General Counsel
Stacey Tyrewala *
Senior Counsel
North American Electric Reliability Corporation
1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099– facsimile
[email protected]
[email protected]
[email protected]
Sandy Mooy*
Associate General Counsel
Chris Albrecht*
Legal Counsel
Western Electricity Coordinating Council
155 North 400 West, Suite 200

19

Persons to be included on the Commission’s service list are indicated with an asterisk. NERC
requests waiver of the Commission’s rules and regulations to permit the inclusion of more than two people
on the service list.

6

Salt Lake City, UT 84103
(801) 582-0353
[email protected]
[email protected]

III.

BACKGROUND
A. Regulatory Framework
By enacting the Energy Policy Act of 2005,20 Congress entrusted the Commission

with the duties of approving and enforcing rules to ensure the reliability of the nation’s
bulk power system and with the duties of certifying an ERO that would be charged with
developing and enforcing mandatory Reliability Standards, subject to Commission
approval. Section 215 of the FPA states that all users, owners, and operators of the BulkPower System in the United States will be subject to Commission-approved Reliability
Standards.
B. Basis for Approval of Proposed Regional Reliability Standard
Section 39.5(a) of the Commission’s regulations requires the ERO to file with the
Commission each Reliability Standard that the ERO proposes to become mandatory and
enforceable in the United States and each modification to a Reliability Standard that the
ERO proposes to be made effective. The Commission has the regulatory responsibility to
approve standards that protect the reliability of the bulk power system. In discharging its
responsibility to review, approve, and enforce mandatory Reliability Standards, the

20

16 U.S.C. § 824o.

7

Commission is authorized to approve those proposed Reliability Standards that meet the
criteria detailed by Congress:
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.21
When evaluating proposed Reliability Standards, the Commission is expected to
give “due weight” to the technical expertise of the ERO and to the technical expertise of a
Regional Entity organized on an Interconnection-wide basis with respect to a Reliability
Standard to be applicable within that Interconnection. Order No. 672 provides guidance
on the factors FERC will consider when determining whether proposed Reliability
Standards meet the statutory criteria.22
A regional Reliability Standard proposed by a Regional Entity must meet the
same standards that NERC’s Reliability Standards must meet, i.e., the regional Reliability
Standard must be shown to be just, reasonable, not unduly discriminatory or preferential,
and in the public interest.23 Order No. 672 also requires additional criteria that a regional
Reliability Standard must satisfy: a regional difference from a continent-wide Reliability
Standard must either be: (1) more stringent than the continent-wide Reliability Standard
(which includes a regional standard that addresses matters that the continent-wide
Reliability Standard does not), or (2) a regional Reliability Standard must be necessitated
by a physical difference in the Bulk-Power System.24

21

16 U.S.C. § 824o(d)(2).
See Rules Concerning Certification of the Electric Reliability Organization; Procedures for the
Establishment, Approval and Enforcement of Electric Reliability Standards, FERC Stats. & Regs., ¶ 31,204
at PP 320-338 (“Order No. 672”), order on reh’g, FERC Stats. & Regs. ¶ 31,212 (2006) (“Order No. 672A”).
23
Section 215(d)(2) of the FPA and 18 C.F.R. §39.5(a).
24
Order No. 672 at P 291.
22

8

As set forth in the FERC approved WECC Reliability Standards Development
Procedures,25 WECC’s standards must be developed according to the following
characteristic attributes:


Open Access by eligible voters to all aspects of the Standard Development
process



Drafting by Subject Matter Experts that accept and respond to all public
input



Formal approval process involving response to input and final vote by the
WECC Ballot Pool and WECC Board of Directors

Proposed WECC standards are subject to approval by NERC, as the ERO, and the
Commission before becoming mandatory and enforceable under Section 215 of the
FPA.26 As demonstrated herein, the proposed WECC regional Reliability Standard was
developed in an open, transparent, and inclusive fashion. The proposed standard was
widely supported by the WECC Ballot Pool, was approved for WECC Board of Directors
consideration by the WECC Standards Committee, and approved by the WECC Board of
Directors and NERC as a meaningful and necessary step forward in solving a
longstanding problem.
Applicable users, owners, and operators of the Bulk-Power System must adhere to
NERC Reliability Standards and WECC regional Reliability Standards. NERC
Reliability Standards and the WECC regional Reliability Standards are both enforced
through the WECC Compliance Program.
WECC is a Regional Entity organized on an Interconnection-wide basis and the
proposed regional Reliability Standard is to be applicable on an Interconnection-wide
25

The WECC Development Procedure is available at:
http://www.wecc.biz/library/WECC%20Documents/Business%20and%20Governance%20Documents/WEC
C%20Reliability%20Standards%20Development%20Procedures.pdf
26
16 U.S.C. 824o.

9

basis. The proposed regional Reliability Standard was developed by those from the
Western Interconnection, to apply in the Western Interconnection, in a process that
enabled all those with an interest in the standards to be heard.

IV.

JUSTIFICATION FOR APPROVAL OF PROPOSED REGIONAL
RELIABILITY STANDARD
This section summarizes the development of the proposed regional Reliability

Standard BAL-002-WECC-2 — Contingency Reserve; describes the reliability objectives
to be achieved by the regional Reliability Standard; explains the development history of
the regional Reliability Standard; and demonstrates how the standard meets the
Commission’s criteria for approval. NERC, in its analysis and approval of the proposed
regional Reliability Standard, determined that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest. Furthermore, NERC accepts
that the standard was developed in accordance with the Commission-approved WECC
Reliability Standards Development Procedures.
The complete development record for the proposed regional Reliability Standard
is provided in Exhibit I and includes the development and approval process, comments
received during the industry-wide comment periods, responses to those comments, ballot
information, and NERC’s evaluation of the proposed standard.
A. Basis and Purpose of Proposed Regional Reliability Standard
BAL-002-WECC-2 — Contingency Reserve
The purpose of proposed regional Reliability Standard, BAL-002-WECC-2 —
Contingency Reserve, is to specify the quantity and types of Contingency Reserve
required to ensure reliability under normal and abnormal conditions. The proposed
standard applies to Balancing Authorities and Reserve Sharing Groups within the
10

Western Interconnection. The proposed regional Reliability standard is included in
Exhibit B to this filing. BAL-002-WECC-2 consists of four Requirements and
Attachment A, which is a practical illustration that shows how the generation amount
may be calculated under Requirement R1. Attachment A is illustrative only and is
provided for informational purposes, it is not a Requirement.

Proposed Requirements

R1. Each Balancing Authority and each Reserve Sharing Group shall maintain a
minimum amount of Contingency Reserve, except within the first sixty minutes
following an event requiring the activation of Contingency Reserve, that is:
[Violation Risk Factor: High] [Time Horizon: Real-time operations]
1.1 The greater of either:
 The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
 The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.

1.2 Comprised of any combination of the reserve types specified below:
 Operating Reserve – Spinning
 Operating Reserve - Supplemental
 Interchange Transactions designated by the Source Balancing
Authority as Operating Reserve – Supplemental
 Reserve held by other entities by agreement that is deliverable on
Firm Transmission Service
 A resource, other than generation or load, that can provide energy
or reduce energy consumption
 Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management,
Interruptible Load or Interruptible Demand, or any other Load
made available for curtailment by the Balancing Authority or the
Reserve Sharing Group via contract or agreement.
 All other load, not identified above, once the Reliability
Coordinator has declared an energy emergency alert signifying
that firm load interruption is imminent or in progress.

11

1.3 Based on real-time hourly load and generating energy values averaged
over each Clock Hour (excluding Qualifying Facilities covered in 18 C.F.R. §
292.101, as addressed in FERC Opinion 464).
1.4 An amount of capacity from a resource that is deployable within ten
minutes.
Requirement R1 has been significantly modified in accordance with the
Commission’s directives in Order No. 740. First, Requirement R1 has been modified
from BAL-002-WECC-1 in accordance with the Commission’s directive to develop a
modification to the reserve restoration period.27 The proposed restoration period has
been modified from 90 minutes to 60 minutes, consistent with the prior (and currentlyeffective) version, WECC BAL-STD-002-0. This requirement is more stringent than the
90 minute restoration period set forth in the continent-wide NERC Reliability Standard.
The associated Measure, Measure 1, has also been modified for consistency.
Second, Requirement R1 has been modified to explicitly provide that demandside management technically capable of providing this service may be used as a resource
for both Contingency Reserve - Spinning and Contingency Reserve - Supplemental.28
Part 1.2 of the proposed Requirement lists the types of resources, including demand-side
management, which can be used to meet Contingency Reserve requirements. As the
Commission noted, this proposed modification should ensure comparable treatment of
demand-side management with conventional generation or any other technology and
allow demand-side management to be considered as a resource for Contingency Reserves

27

Order No. 740 at P 28 (“we direct WECC to develop a modification to the reserve restoration
period…”).
28
Order No. 740 at P 61 (“On remand, the Commission hereby adopts its NOPR proposal and
directs the WECC to develop modifications to the proposed regional Reliability Standard that explicitly
provide that demand-side management technically capable of providing this service may be used as a
resource for both spinning and non-spinning contingency reserves.”)(internal citation omitted).

12

on this basis without requiring the use of any particular Contingency Reserve option.29
Furthermore, consistent with the Commission’s determination in Order No. 693 and
Order No. 740, the term “Spinning Reserve” has been replaced with “Operating ReserveSpinning” and the term “Non-Spinning Reserve” has been replaced with “Operating
Reserve-Supplemental,” since these glossary definitions are inclusive of demand-side
management, including controllable load.30
Third, WECC is providing additional data to support the proposed calculation of
minimum Contingency Reserves in Requirement R1.31 The Commission accepted
WECC’s proposal on this issue in Order No. 740, and stated that WECC’s proposed
calculation is more stringent than the national requirement.32 The Commission
encouraged WECC to buttress its proposal with audits specifically focused on
Contingency Reserves and whether Balancing Authorities are meeting the adequacy and
deliverability requirements.33
In response, WECC is providing two years’ worth of additional data showing the
amount of reserves that would be calculated for each Balancing Authority and Reserve
Sharing Group under the proposed methodology. To obtain this data, WECC issued a
data request to each of its Balancing Authorities and/or the Reserve Sharing Groups to
29

Order No. 740 at P 61.
Order No. 740 at P 61 (“For example, consistent with our determinations in Order No. 693, the
modification could replace the term Spinning Reserve with Operating Reserve-Spinning and Non-Spinning
Reserve with Operating Reserve-Supplemental, since these glossary definitions are inclusive of demandside management, including controllable load, in contrast to the current terms used in the proposed regional
Reliability Standard”)(internal citation omitted); see also Order No. 693 at P 1896.
31
Under the current regional Reliability Standard, WECC BAL-STD-002-0, the total contingency
reserve that a Balancing Authority must maintain is based only on generating resources. In contrast, under
the proposed Requirement, the total contingency reserve that a Balancing Authority must maintain is based
on a combination of the generating resources and the demand served within a Balancing Authority
footprint. The equal split between load and generation represents a reasonable balance to moderate shifts in
contingency reserve responsibility and costs among the applicable entities.
32
Order No. 740 at P 39 (“We believe that WECC’s proposed calculation of minimum contingency
reserves is more stringent than the national requirement…”).
33
Id.
30

13

which the proposed standard would apply. The data request was designed to determine
the amount of reserve actually required under the existing methodology under the current
standard juxtaposed to the amount of reserve that would have been required had the
proposed methodology in the proposed standard been applied to the same actual historical
data. In other words, WECC evaluated whether, if the proposed methodology had been
in place for the same period, more or less reserve would have been required. WECC
received data from the following entities:


Comision Federal de Electricidad (CFE)



California Independent System Operator (CAISO)



Los Angeles Department of Water and Power (LADWP)



Northwest Power Pool (NWPP)



Rocky Mountain Reserve Group (RMRG)



Southwest Reserve Sharing Group (SRSG)

The data received covered the two-year period spanning April 1, 2010, Hour 00,
through March 31, 2012, Hour 23, for a total of 17,546 hours, covering each season of
each calendar year, for a total in excess of 100,000 data entries. Where data was missing
or was clearly erroneous, WECC zeroed out those fields and marked them as “BAD
DATA.” WECC accepted all other received data as accurate. The resultant database is
available in Exhibit G as well as on a publicly accessible WECC website at the URL
listed below. The database can be viewed and manipulated for analysis by clicking the
following link: Reserve Comparison Data.34
34

Available here: http://www.wecc.biz/Standards/Development/WECC0083/Shared%20Documents/NERC%20Filing%20-%20Final%20Documents/WECC-0083%20BAL-002WECC2%20Attachment%20V%20Contingency%20Reserve%20Comparison%20Two%20Year%20Data%20Fina
l%2010-10-2012.xlsx. Should the reader have difficulty accessing the link, please contact Mr. W. Shannon
Black, [email protected], (503) 307-5782.

14

When the results of the entire Interconnection were considered, for the entire twoyear period examined, three respondents (CFE, LADWP, and the RMRG) showed
virtually no average change under either methodology because the reserve calculation for
these entities is driven by their most severe single contingency. Of the remaining three
respondents, two showed a nominal decrease under the newly proposed methodology
whereas one showed an increase.
During the two-year period of 2010-2012, the average increase/decrease in
Contingency Reserve required under the existing methodology juxtaposed to the
proposed methodology was an average decrease of 137 MW across the Western
Interconnection. For comparative purposes, WECC’s peak load during the two-year
window was 146,950.6 MW reached at 16:30:20 on August 25, 2011. WECC’s
minimum load during that same period was 70,811.91 MW reached at 03:29:10 on April
18, 2010. The 137 MWs equate to .000932 of WECC’s peak load and .001934 of
WECC’s minimum load, respectively.
Total averages were calculated as follows:
BAL-002-WECC-2 Contingency Reserve Data

Summary of Reserve Changes between Existing and Proposed Methodology35
Area
Max Increase
Max Decrease
Average Change
CFE
29
-209
0
CAISO
199
-379
-60
LADWP
0
0
0
NWPP
415
-598
15
RMRG
67
0
0
SRSG
135
-382
-43
Total System:

299

-826

35

-137

CFE and RMRG had an average positive change of less than 1.0 MW due to the fact that there can
be hours when the most severe single contingency is changed due to a unit being offline. Due to rounding,
these numbers were reported as zero change.

15

Analysis of the two-year period between April 2010 and March 2012 reaches the same
conclusion as that presented in WECC’s previous filing. Implementation of the proposed
methodology will, on average, reduce the amount of Contingency Reserve held within the
Interconnection; however, the average change is so small in comparison to the load
served within the Interconnection that it should have no adverse impact on reliability.
The calculation of minimum Contingency Reserves is based on three percent of
net generation and three percent of net load and this fairly balances the responsibilities of
Contingency Reserve providers with the financial obligations of those who would benefit
most from those services. As the Commission noted in Order No. 740, under the current
regional Reliability Standard, the total Contingency Reserve that a Balancing Authority
must maintain is based only on generating resources.36 By contrast, under the proposed
Requirement, the total Contingency Reserve that a Balancing Authority must maintain is
based on a combination of the generating resources and the demand served within a
Balancing Authority footprint. The equal split between load and generation represents a
reasonable balance to moderate shifts in Contingency Reserve responsibility and costs
among the applicable entities.
Fourth, Requirement R1 has been modified in response to Order No. 740 and the
concerns raised by commenters to include the following language in Section 1.3: “Based
on real-time hourly load and generating energy values averaged over each Clock Hour
(excluding Qualifying Facilities covered in 18 C.F.R. § 292.101, as addressed in FERC
Opinion 464).”37 The standard drafting team replaced the term “net generation” with
“generating energy values averaged over each Clock Hour” and included a reference to
36

Order No. 740 at P 41.
Order No. 740 at P 66 (“we direct WECC to consider the concerns raised by the QF Parties and
NV Energy.”).
37

16

Opinion No. 464 which addresses the issue of behind-the-meter generation.38 This
change is responsive to the concern previously raised by commenters that the term “load
responsibility” in BAL-STD-002-0 should be defined consistent with Opinion No. 464.39
Opinion No. 464 addressed the treatment of qualifying facilities (“QFs”) under the
CAISO open access transmission tariff, and provides in relevant part (at P 40) that:
We affirm the judge's finding that the long-standing practice in the
CAISO control area of scheduling, metering and procuring
reserves on a net load basis should be permitted to continue, so
long as a QF has contracted for standby service with a UDC
[Utility Distribution Company], i.e., a contract that provides for the
immediate replacement of energy in case of the QF's forced
outage. The record indicates... that by contract with a QF, a UDC
will provide standby service and operating reserves if there is a
forced QF outage.
A similar concern was also expressed regarding BAL-002-WECC-1 regarding the
definition of “net generation,” as the Commission noted in Order No. 740.40 For these
reasons, the replacement of the term “net generation” and the reference to Opinion No.
464 in Requirement R1 are appropriate. Further, for illustrative purposes only, the
proposed standard includes an Attachment A illustrating how required reserves may be
calculated for various scenarios. Attachment A also illustrates how QF generation might
be treated for purposes of the three percent generation predicate.
WECC also considered the Commission’s directive to address whether a
Balancing Authority may be required to carry a disproportionate share of the

38

California Indep. Sys. Operator Corp., Opinion No. 464, 104 FERC ¶ 61,196 (2003). In Opinion
No. 464, the Commission ruled that generation serving load behind-the-meter does not impose ancillary
service obligations on the Balancing Authority and should not be included in that entity’s reserve
requirements.
39
119 FERC ¶ 61,260 at P 57.
40
Order No. 740 at P 66.

17

Contingency Reserve obligation within the Western Interconnection.41 The proposed
standard allows for impacted Balancing Authorities and/or Reserve Sharing Groups to
enter into transactions to provide Contingency Reserves for another Balancing Authority
or procure Contingency Reserves from another Balancing Authority, thereby more
equitably allocating generation for purposes of the reserve calculation. In reviewing the
NERC Functional Model, Version 5, the standard drafting team concluded that the tasks
required more closely align to the Balancing Authority than to a Generator Operator.
Finally, Requirement R1 has also been modified, consistent with Order No. 740,
to clarify that Balancing Authorities and Reserve Sharing Groups within WECC are
subject to the same restrictions regarding the use of firm load as Contingency Reserve as
Balancing Authorities elsewhere operating under the continent-wide Reliability
Standard.42 To clarify the connection to the Energy Emergency Level 3 language, the
proposed standard uses the same language from EOP-002-2.1, Attachment 1, Section B,
Energy Emergency Alerts Levels, Part 3, titled “Alert 3 —Firm load interruption
imminent or in progress” for purposes of the proposed Requirement R1, Section 1.2,
Bullet 7 43 wherein the types of reserve resources are dictated.

R2.
Each Balancing Authority and each Reserve Sharing Group shall maintain
at least half of its minimum amount of Contingency Reserve identified in
Requirement R1, as Operating Reserve – Spinning that meets both of the following
reserve characteristics. [Violation Risk Factor: High] [Time Horizon: Real-time
operations]
2.1 Reserve that is immediately and automatically responsive to frequency
deviations through the action of a governor or other control system;
2.2 Reserve that is capable of fully responding within ten minutes.

41
42
43

Order No. 740 at PP 65-66.
Order No. 740 at P 49.
http://www.nerc.com/files/EOP-002-3.pdf.

18

The requirements included in Requirement R2 are included in the currentlyeffective version of the regional Reliability Standard, WECC BAL-STD-002-0,44
however, Requirement R2 has been reformatted consistent with NERC Reliability
Standards and the Commission’s direction to achieve a reasonable level of consistency in
the structure of a Reliability Standard so that there is a common understanding of the
elements.45 Requirement R2 is more stringent than the continent-wide Reliability
Standard as it specifies that half of the amount of Contingency Reserve must be
Operating Reserve-Spinning. The proposed regional Reliability Standard also requires
that the Operating Reserve – Spinning be automatically responsive to frequency and be
able to fully respond within ten minutes. Neither of these requirements are in the
continent-wide Reliability Standard and provide a benefit to reliability.
R3.
Each Sink Balancing Authority and each sink Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum Contingency
Reserve in Requirement R1, equal to the amount of Operating Reserve–
Supplemental for any Interchange Transaction designated as part of the Source
Balancing Authority’s Operating Reserve–Supplemental or source Reserve Sharing
Group’s Operating Reserve–Supplemental, except within the first sixty minutes
following an event requiring the activation of Contingency Reserve. [Violation Risk
Factor: High] [Time Horizon: Real-time operations]

44

BAL-STD-002-0 provides:
(ii) Contingency reserve. An amount of Spinning Reserve and Nonspinning Reserve (at least half of which
must be Spinning Reserve), sufficient to meet the NERC Disturbance Control Standard BAL-002-0, equal
to the greater of:
(a) The loss of generating capacity due to forced outages of generation or transmission equipment
that would result from the most severe single contingency; or
(b) The sum of five percent of the load responsibility served by hydro generation and seven
percent of the load responsibility served by thermal generation.
The combined unit ramp rate of each Balancing Authority's on-line, unloaded generating capacity must be
capable of responding to the Spinning Reserve requirement of that Balancing Authority within ten minutes
45
119 FERC ¶ 61,260 at P 55.

19

Requirement R3 is a clarification of an existing requirement in WECC BALSTD-002-0 which requires additional reserves for interruptible imports.46 The term
“interruptible imports” included in WECC BAL-STD-002-0 has been removed as this is
not a defined term in the NERC Glossary and is subject to misinterpretation. Therefore,
the standard drafting team has proposed to remove this ambiguous term and replace it
with clarifying language describing which type of transactions must be covered by
additional reserves. The continent-wide version of the standard does not require reserves
for Interchange Transactions designated as part of the Source BA’s or Source RSG’s
Operating Reserve-Supplemental. Therefore, this proposed Requirement is more stringent
than the continent-wide Reliability Standard, BAL-002.

R4.
Each Source Balancing Authority and each source Reserve Sharing Group
shall maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve amounts identified in Requirement R1, equal to the amount
and type of Operating Reserves for any Operating Reserve transactions for which it
is the Source Balancing Authority or source Reserve Sharing Group. [Violation Risk
Factor: High] [Time Horizon: Real-time operations]
Requirement R4 is a clarification of an existing requirement in WECC BALSTD-002-0, which requires additional reserve for on demand obligations. The continentwide version of the standard does not require Source BAs or Source RSGs to carry
additional Contingency Reserves for any transactions for Operating Reserves, either
spinning or supplemental, for which they are the source. Therefore, this Requirement is
more stringent than the continent-wide Reliability Standard, BAL-002.

46

WECC BAL-STD-002-0 provides: “Additional reserve for interruptible imports. An amount of
reserve, which can be made effective within ten minutes, equal to interruptible imports.”

20

Requirements R3 and R4 specify situations in which specific transactions for
obtaining Contingency Reserves require additional reserves to be carried by the
appropriate BA or RSG.
B. Additional Order No. 672 Criteria for Regional Reliability Standards
As shown in Exhibit A, the proposed regional Reliability Standard meets each of
the requirements of Commission Order 672. The exhibit provides a detailed explanation
regarding how the proposed revisions to the standard meet each aspect of the order.

21

VI.

CONCLUSION
For the reasons stated above, NERC respectfully requests that the Commission

approve the proposed BAL-002-WECC-2 Contingency Reserve regional Reliability
Standard and the associated proposed VRFs and VSLs included in Exhibit B to this filing
in accordance with Section 215(d)(1) of the FPA and Part 39.5 of the Commission’s
regulations. NERC requests that these approvals be made effective in accordance with
the implementation plan for BAL-002-WECC-2 included in Exhibit F to this filing.
Respectfully submitted,
/s/ Stacey Tyrewala
Gerald W. Cauley
President and Chief Executive Officer
North American Electric Reliability Corporation
3353 Peachtree Road, N.E.
Suite 600, North Tower
Atlanta, GA 30326
(404) 446-2560
(404) 446-2595– facsimile

Charles A. Berardesco
Senior Vice President and General Counsel
Holly A. Hawkins
Assistant General Counsel
Stacey Tyrewala
Senior Counsel
North American Electric Reliability Corporation
1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099– facsimile
[email protected]
[email protected]
[email protected]
Sandy Mooy
Associate General Counsel
Chris Albrecht
Legal Counsel
Western Electricity Coordinating Council
155 North 400 West, Suite 200
Salt Lake City, UT 84103
(801) 582-0353
[email protected]
[email protected]

April 12, 2013

22

CERTIFICATE OF SERVICE
I hereby certify that I have served a copy of the foregoing document upon all
parties listed on the official service list compiled by the Secretary in this proceeding.
Dated at Washington, D.C. this 12th day of April, 2013.
/s/ Stacey Tyrewala
Stacey Tyrewala
Attorney for North American Electric
Reliability Corporation

23

Exhibit A

Order No. 672 Criteria

EXHIBIT A – Order No. 672 Criteria
Order No. 672 Criteria
In Order No. 672,1 the Commission identified a number of criteria it will use to
analyze Reliability Standards proposed for approval to ensure they are just, reasonable,
not unduly discriminatory or preferential, and in the public interest. The discussion
below identifies these factors and explains how the proposed Reliability Standard has met
or exceeded the criteria.
1.

Proposed Reliability Standards must be designed to achieve a specified
reliability goal and must contain a technically sound means to achieve that goal.2
The proposed regional Reliability Standard, BAL-002-WECC-2 — Contingency
Reserve, was developed, as stated in the document, to “specify the quantity and types of
Contingency Reserve required to ensure reliability under normal and abnormal
conditions…” A level of Contingency Reserve is required to assure that capacity will be
available to carry load in the event of the loss of generation supply to a reserve area
within WECC.

1

Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the
Establishment, Approval, and Enforcement of Electric Reliability Standards, Order No. 672, FERC Stats. &
Regs. ¶ 31,204, order on reh’g, Order No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006).
2
Order No. 672 at P 321. The proposed Reliability Standard must address a reliability concern that
falls within the requirements of section 215 of the FPA. That is, it must provide for the reliable operation
of Bulk-Power System facilities. It may not extend beyond reliable operation of such facilities or apply to
other facilities. Such facilities include all those necessary for operating an interconnected electric energy
transmission network, or any portion of that network, including control systems. The proposed Reliability
Standard may apply to any design of planned additions or modifications of such facilities that is necessary
to provide for reliable operation. It may also apply to Cybersecurity protection.
Order No. 672 at P 324. The proposed Reliability Standard must be designed to achieve a specified
reliability goal and must contain a technically sound means to achieve this goal. Although any person may
propose a topic for a Reliability Standard to the ERO, in the ERO’s process, the specific proposed
Reliability Standard should be developed initially by persons within the electric power industry and
community with a high level of technical expertise and be based on sound technical and engineering
criteria. It should be based on actual data and lessons learned from past operating incidents, where
appropriate. The process for ERO approval of a proposed Reliability Standard should be fair and open to
all interested persons.

1

The proposed regional Reliability Standard contains a technically sound means to
achieve this goal.
In June 2007, the Commission approved WECC-BAL-STD-002-0 (the
predecessor of BAL-002-WECC-1 and BAL-002-WECC-2) finding that the standard was
more stringent than the corresponding NERC Reliability Standard, BAL-002-03.
Specifically, the Commission found that WECC’s requirement to restore Contingency
Reserve within 60 minutes was more stringent than the 90-minute restoration period as
set forth in NERC’s BAL-002-0.4 NERC concurred with the Commission’s finding that
the proposed WECC regional Reliability Standard establishes requirements that are more
stringent than those provided for in the corresponding NERC Reliability Standard.”5
Subsequent versions of the proposed standard sought to lessen the rigors of the
restoration period to match those of the continent-wide NERC Reliability Standard. In
response, the Commission remanded the proposed standard with instructions that WECC
should provide additional technical justification for the relaxed criteria.6 In response to
the Commission’s request, WECC no longer seeks to justify that relaxed criteria in this
filing; rather, the proposed standard reverts to the more stringent approach previously
approved by the Commission.
The Commission further found that the “proposed calculation of minimum
contingency reserves” included in BAL-002-WECC-1 “is more stringent than the
national requirement and could be part of a future proposal that the Commission could

3
4
5
6

North American Electric Reliability Corp., 119 FERC ¶ 61,060, at P 432 (2007).
Id.
Order 740 at P 11.
Id at P 14.

2

find to be just, reasonable, not unduly discriminatory or preferential, and in the public
interest.”7
In addition, as part of this filing, WECC has supplied technical data illustrating
that its proposed Contingency Reserve allocation is virtually equal to the quantity of
reserve set aside under existing processes under BAL-STD-002-0; thus, implementation
of the standard will maintain reliability in this regard.

2.

Proposed Reliability Standards must be applicable only to users, owners and
operators of the bulk power system, and must be clear and unambiguous as to
what is required and who is required to comply.8
The proposed regional Reliability Standard is applicable only to Balancing
Authorities and Reserve Sharing Groups within the WECC region. The standard clearly
identifies these applicable entities and is clear and unambiguous as to what is required to
comply.

3.

A proposed Reliability Standard must include clear and understandable
consequences and a range of penalties (monetary and/or non-monetary) for a
violation.9

The proposed regional Reliability Standard includes a VRF and at least one VSL
for each requirement. The ranges of penalties for violations will be based on the
applicable VRF and VSL and will be administered based on the sanctions table and

7

Order No. 740 at P 39.
Order No. 672 at P 322. The proposed Reliability Standard may impose a requirement on any
user, owner, or operator of such facilities, but not on others.
8

Order No. 672 at P 325. The 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.
9
Order No. 672 at P 326. The possible consequences, including range of possible penalties, for
violating a proposed Reliability Standard should be clear and understandable by those who must comply.

3

supporting penalty determination process described in the FERC-approved NERC
Sanction Guidelines.10
WECC developed the VSLs and VRFs proposed for assignment to BAL-002WECC-2 following applicable NERC and FERC guidance. Exhibit E to this filing
contains the VSL and VRF guideline analysis for BAL-002-WECC-2.

4.

A proposed Reliability Standard must identify clear and objective criterion or
measure for compliance, so that it can be enforced in a consistent and nonpreferential manner. 11
For each Requirement specified in BAL-002-WECC-2, there is a corresponding
objective measurement by which the assigned task can be measured. These objective
measurements include, but are not limited to, possession of specified documentation that
provides evidence that the task assigned in the corresponding Requirement was achieved.

5.

Proposed Reliability Standards should achieve a reliability goal effectively and
efficiently — but do not necessarily have to reflect “best practices” without
regard to implementation cost or historical regional infrastructure design.12
BAL-002-WECC-2 reaches its goals effectively and efficiently by using existing
business practices. Further, noting that implementation of the document may take time,
the proposed effective date is designed to afford applicable entities sufficient time to
implement any needed contractual arrangements.

10

NERC Rules of Procedure Appendix 4B. Available at:
http://www.nerc.com/page.php?cid=1|8|169.
11
Order No. 672 at P 327. There should be a clear criterion or measure of whether an entity is in
compliance with a proposed Reliability Standard. It should contain or be accompanied by an objective
measure of compliance so that it can be enforced and so that enforcement can be applied in a consistent and
non-preferential manner.
12
Order No. 672 at P 328. The proposed Reliability Standard does not necessarily have to reflect the
optimal method, or “best practice,” for achieving its reliability goal without regard to implementation cost
or historical regional infrastructure design. It should however achieve its reliability goal effectively and
efficiently.

4

BAL-002-WECC-2 establishes the quantity and type of Contingency Reserve
required to ensure reliability under normal and abnormal conditions. Further, the
proposed standard equally splits the allocation of reserves between load and generation.
In response to cost allocation concerns, the Commission stated:
[U]nder the proposed requirement, the total contingency reserve that a
balancing authority must maintain is based on a combination of the
generating resources and the demand served within a balancing authority
footprint. We agree with NERC that the equal split between load and
generation represents a reasonable balance to moderate shifts in
contingency reserve responsibility and costs among the applicable
entities.13
To assist the applicable entities in implementing this reasonable balance of costs,
the drafting team has designed the standard to allow for a shifting of the burden between
applicable entities. Realizing that such a shift will require contractual agreements and
negotiations, the drafting team has requested an Effective Date of “the first day of the
third quarter following applicable regulatory approval.” The implementation plan for
BAL-002-WECC-2 is included in Exhibit F.

6.

Proposed Reliability Standards cannot be “lowest common denominator,” i.e.,
cannot reflect a compromise that does not adequately protect Bulk-Power
System reliability. Proposed Reliability Standards can consider costs to
implement for smaller entities, but not at consequences of less than excellence in
operating system reliability.14
13

Order 740 at P 41.
Order No. 672 at P 329. The proposed Reliability Standard must not simply reflect a compromise
in the ERO’s Reliability Standard development process based on the least effective North American
practice — the so-called “lowest common denominator” — if such practice does not adequately protect
Bulk-Power System reliability. Although FERC will give due weight to the technical expertise of the ERO,
we will not hesitate to remand a proposed Reliability Standard if we are convinced it is not adequate to
protect reliability.

14

Order No. 672 at P 330. A proposed Reliability Standard may take into account the size of the entity that
must comply with the Reliability Standard and the cost to those entities of implementing the proposed
Reliability Standard. However, the ERO should not propose a “lowest common denominator” Reliability
Standard that would achieve less than excellence in operating system reliability solely to protect against
reasonable expenses for supporting this vital national infrastructure. For example, a small owner or

5

The proposed regional Reliability Standard does not reflect a “lowest common
denominator” approach. BAL-002-WECC-2 requires a more stringent restoration period
and a more stringent maintenance of Contingency Reserve than that required by the
parallel NERC continent-wide standard (see comments regarding technical justification
above). The needs for the more stringent approach, based upon the specific attributes of
the Western Interconnection, were noted by the Commission in Order No. 740.15 In
addition to the above responses describing how BAL-002-WECC-2 is a more stringent
approach that will maintain and increase reliability, BAL-002-WECC-2 specifically
addresses cost-related concerns raised by Qualifying Facilities (“QFs”). To ensure the
QFs burden remained consistent with existing Commission Orders, the proposed standard
requires that those facilities be treated in accordance with existing Opinion No. 464.

7.

Proposed Reliability Standards must be designed to apply throughout North
America to the maximum extent achievable with a single Reliability Standard
while not favoring one geographic area or regional model. It should take into
account regional variations in the organization and corporate structures of
transmission owners and operators, variations in generation fuel type and
ownership patterns, and regional variations in market design if these affect the
proposed Reliability Standard.16

operator of the Bulk-Power System must bear the cost of complying with each Reliability Standard that
applies to it.
15
Order No. 740 at P 7 and P 22.
16
Order No. 672 at P 331. A proposed Reliability Standard should be designed to apply throughout
the interconnected North American Bulk-Power System, to the maximum extent this is achievable with a
single Reliability Standard. The proposed Reliability Standard should not be based on a single geographic
or regional model but should take into account geographic variations in grid characteristics, terrain,
weather, and other such factors; it should also take into account regional variations in the organizational
and corporate structures of transmission owners and operators, variations in generation fuel type and
ownership patterns, and regional variations in market design if these affect the proposed Reliability
Standard.

6

This is a regional Reliability Standard developed by and applicable to the
Balancing Authorities and Reserve Sharing Groups operating within the United States
portion of the Western Interconnection. The need for a more stringent approach, based
upon the specific attributes of the Western Interconnection was noted by the Commission
in Order 740. 17

8.

Proposed Reliability Standards should cause no undue negative effect on
competition or restriction of the grid beyond any restriction necessary for
reliability.18
The proposed Reliability Standard does not restrict the available transmission
capability or limit use of the bulk-power system in a preferential manner.
The proposed standard will be applied equally across the WECC region and therefore
will not negatively affect competition. The standard may enhance competition as it
invites creation of commercial arrangements for reserves (R1.2) and illustrates via
Attachment A of the standard how those commercial arrangements might be treated.
Recognizing that these endeavors may take some time to implement, the proposed
standard calls for an Effective Date that allows sufficient time to negotiate new business
arrangements.
The implementation time for the proposed Reliability Standard is reasonable.19

9.
17

Order No. 740 at P 21, 23.
Order No. 672 at P 332. As directed by section 215 of the FPA, FERC itself will give special
attention to the effect of a proposed Reliability Standard on competition. The ERO should attempt to
develop a proposed Reliability Standard that has no undue negative effect on competition. Among other
possible considerations, a proposed Reliability Standard should not unreasonably restrict available
transmission capability on the Bulk-Power System beyond any restriction necessary for reliability and
should not limit use of the Bulk-Power System in an unduly preferential manner. It should not create an
undue advantage for one competitor over another.
19
Order No. 672 at P 333. In considering whether a proposed Reliability Standard is just and
reasonable, FERC will consider also the timetable for implementation of the new requirements, including
how the proposal balances any urgency in the need to implement it against the reasonableness of the time
allowed for those who must comply to develop the necessary procedures, software, facilities, staffing or
other relevant capability.
18

7

The proposed effective dates for the standard are just and reasonable and are designed
to allow applicable entities an adequate amount of time to implement the necessary changes
to ensure implementation across the region without introducing unnecessary delay. The
proposed effective date is explained in the proposed Implementation Plan, attached as
Exhibit F.
10.

The Reliability Standard was developed in an open and fair manner and in
accordance with the Commission-approved Reliability Standard development
process.20
WECC followed the standard development process approved by FERC and in
effect at the time of each step in the process.
In accordance with Step 3 of the Process for Developing and Approving WECC
Standards,21 as well as its successor document, the Reliability Standards Development
Procedures,22 effective March 1, 2012, all drafting team meetings are open to the public.
Between February 22, 2011 and April 2, 2012, the BAL drafting team conducted 16 open
meetings. Notice of the meetings was provided to NERC, posted on WECC’s website
and embedded in the minutes of each meeting. Meeting minutes are posted on WECC’s
website and accessible by the public.

20

Order No. 672 at P 334. Further, in considering whether a proposed Reliability Standard meets the legal
standard of review, we will entertain comments about whether the ERO implemented its Commissionapproved Reliability Standard development process for the development of the particular proposed
Reliability Standard in a proper manner, especially whether the process was open and fair. However, we
caution that we will not be sympathetic to arguments by interested parties that choose, for whatever reason,
not to participate in the ERO’s Reliability Standard development process if it is conducted in good faith in
accordance with the procedures approved by FERC.
21
Available here:
http://www.wecc.biz/library/Documentation%20Categorization%20Files/Forms/AllItems.aspx?RootFolder
=%2Flibrary%2FDocumentation%20Categorization%20Files%2FRetire%20and%20Archive&FolderCTID
=0x01200015E7900DB2E794468FDE06D520B95C07&View=%7bAD6002B2-0E39-48DD-B4B59AFC9F8A8DB3%7d.
22
Available here:
http://www.wecc.biz/library/WECC%20Documents/Business%20and%20Governance%20Documents/WE
CC%20Reliability%20Standards%20Development%20Procedures.pdf.

8

All meetings were supported by a telephone conference bridge associated with an
on-line Internet visual capability, allowing all participants to see the document(s) as they
were being developed. Further, this team held a public, face-to-face technical
conference, during which all participants were invited to bring their standard-related
questions directly to the drafting team.
The proposed standard was posted for public comment by WECC on five
different occasions and by NERC on one additional occasion. Comments were solicited,
received, considered, and answered. Comments and their responses are posted on
WECC’s website.23
The proposed regional Reliability Standard has been developed and approved by
industry stakeholders using WECC’s Reliability Standards Development Procedures and
was approved by the WECC Board of Directors on June 26, 2012. The standard was
subsequently presented to and adopted by the NERC Board of Trustees on November 7,
2012. Therefore, WECC has utilized its standard development process in good faith and
in a manner that is open and fair. No commenters disagreed with the open and fair
implementation of the WECC process.

11.

NERC must explain any balancing of vital public interests in the development of
proposed Reliability Standards.24
Neither NERC nor WECC has identified any competing public interests regarding
the request for approval of this proposed Reliability Standard. No comments were
received that indicated the proposed standard conflicts with other vital public interests.
23

Available here: http://www.wecc.biz/Standards/Development/WECC-0083/default.aspx.
Order No. 672 at P 335. Finally, we understand that at times development of a proposed
Reliability Standard may require that a particular reliability goal must be balanced against other vital public
interests, such as environmental, social and other goals. We expect the ERO to explain any such balancing
in its application for approval of a proposed Reliability Standard.

24

9

Proposed Reliability Standards must consider any other appropriate factors.25

12.

No other factors relevant to whether the proposed Reliability Standard is just and
reasonable were identified.
Additional Criteria for Regional Reliability Standards
Order No. 672 also establishes additional criteria that a regional Reliability
Standard must satisfy: “A regional difference from a continent-wide Reliability Standard
must either be (1) more stringent than the continent-wide Reliability Standard including a
regional difference that addresses matters the continent-wide Reliability Standard does
not, or (2) a Regional Reliability Standard that is necessitated by a physical difference in
the Bulk-Power System.”26
The proposed regional Reliability Standard is more stringent than the continentwide Reliability Standard. In Order No. 740 (at P 39), the Commission acknowledged
that the “proposed calculation of minimum contingency reserves” included in BAL-002WECC-1 “is more stringent than the national requirement” and this element has been
retained in BAL-002-WECC-2. Further, WECC’s requirement to restore Contingency
Reserve within 60 minutes is more stringent than the 90-minute restoration period as set
forth in the continent-wide Reliability Standard. In addition, Requirements R2 through
R4 contain Contingency Reserve requirements not present in the continent-wide
Standard. For these reasons, the proposed regional Reliability Standard is more stringent
than the continent-wide Reliability Standard.

25

Order No. 672 at P 323. In considering whether a proposed Reliability Standard is just and
reasonable, we will consider the following general factors, as well as other factors that are appropriate for
the particular Reliability Standard proposed.
26
Order No. 672 at P 291.

10

Exhibit B

BAL-002-WECC-2 — Contingency Reserve Regional Reliability
Standard Proposed for Approval

WECC Standard BAL-002-WECC-2 — Contingency Reserve
A. Introduction

1. Title:

Contingency Reserve

2. Number:

BAL-002-WECC-2

3. Purpose:

To specify the quantity and types of Contingency Reserve
required to ensure reliability under normal and abnormal
conditions.

4. Applicability:
4.1

Balancing Authority
4.1.1. The Balancing Authority is the responsible entity unless the
Balancing Authority is a member of a Reserve Sharing
Group, in which case, the Reserve Sharing Group
becomes the responsible entity.

4.2

Reserve Sharing Group
4.2.1. The Reserve Sharing Group when comprised of a Source
Balancing Authority becomes the source Reserve Sharing
Group.
4.2.2. The Reserve Sharing Group when comprised of a Sink
Balancing Authority becomes the sink Reserve Sharing
Group.

5. Effective Date:

On the first day of the third quarter following applicable regulatory
approval.

B. Requirements and Measures
R1. Each Balancing Authority and each Reserve Sharing Group shall maintain a
minimum amount of Contingency Reserve, except within the first sixty minutes
following an event requiring the activation of Contingency Reserve, that is: [Violation
Risk Factor: High] [Time Horizon: Real-time operations]
1.1 The greater of either:



The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
1

WECC Standard BAL-002-WECC-2 — Contingency Reserve
integrated generation.
1.2 Comprised of any combination of the reserve types specified below:









Operating Reserve – Spinning
Operating Reserve - Supplemental
Interchange Transactions designated by the Source Balancing
Authority as Operating Reserve – Supplemental
Reserve held by other entities by agreement that is deliverable on
Firm Transmission Service
A resource, other than generation or load, that can provide energy or
reduce energy consumption
Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management,
Interruptible Load or Interruptible Demand, or any other Load made
available for curtailment by the Balancing Authority or the Reserve
Sharing Group via contract or agreement.
All other load, not identified above, once the Reliability Coordinator
has declared an energy emergency alert signifying that firm load
interruption is imminent or in progress.

1.3 Based on real-time hourly load and generating energy values averaged over
each Clock Hour (excluding Qualifying Facilities covered in 18 C.F.R.§
292.101, as addressed in FERC Opinion 464).
1.4 An amount of capacity from a resource that is deployable within ten minutes.
M1.

Each Balancing Authority and each Reserve Sharing Group will have documentation
demonstrating its Contingency Reserve was maintained, except within the first sixty
minutes following an event requiring the activation of Contingency Reserve.
Part 1.1
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates its Contingency Reserve was maintained in
accordance with the amounts identified in Requirement R1, Part 1.1, except within
the first sixty minutes following an event requiring the activation of Contingency
Reserve.
Attachment A is a practical illustration showing how the generation amount may be
calculated under Requirement R1.


Where Dynamic Schedules are used as part of the generation amount upon
which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1 may include, but is not limited to,
documentation showing a reciprocal acknowledgement as to which entity is
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WECC Standard BAL-002-WECC-2 — Contingency Reserve
carrying the reserves. This transfer may be all or some portion of the
physical generator and is not limited to the entire physical capability of the
generator.


Where Pseudo-Ties are used as part of the generation amount upon which
Contingency Reserve is predicated, additional evidence of compliance with
Requirement R1, Part 1.1, may include, but is not limited to, documentation
accounting for the transfers included in the Pseudo-Ties.

Part 1.2
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.2.
Evidence may include, but is not limited to, documentation that reserves were
comprised of the types listed in Requirement R1, Part 1.2 for purposes of meeting
the Contingency Reserve obligation of Requirement R1. Additionally, for purposes
of the last bullet of Requirement R1, Part 1.2, evidence of compliance may include,
but is not limited to, documentation that the reliability coordinator had issued an
energy emergency alert, indicating that firm Load interruption was imminent or was
in progress.
Part 1.3
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.3.
Evidence of compliance with Requirement R1, Part 1.3 may include, but is not
limited to, documentation that Contingency Reserve amounts are based upon load
and generating data averaged over each Clock Hour and excludes Qualifying
Facilities covered in 18 C.F.R.§ 292.101, as addressed in FERC Opinion 464.
Part 1.4
Evidence of compliance with Requirement R1, Part 1.4 may include, but is not
limited to, documentation that the reserves maintained to comply with Requirement
R1, Part 1.4 are fully deployable within ten minutes.
R2.

Each Balancing Authority and each Reserve Sharing Group shall maintain at least
half of its minimum amount of Contingency Reserve identified in Requirement R1, as
Operating Reserve – Spinning that meets both of the following reserve
characteristics. [Violation Risk Factor: High] [Time Horizon: Real-time operations]
2.1

Reserve that is immediately and automatically responsive to frequency
deviations through the action of a governor or other control system;

2.2

Reserve that is capable of fully responding within ten minutes.

3

WECC Standard BAL-002-WECC-2 — Contingency Reserve
M2.

Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates it maintained at least half of the Contingency
Reserve identified in Requirement R1 as Operating Reserve – Spinning, averaged
over each Clock Hour, that met both of the reserve characteristics identified in
Requirement R2, Part 2.1 and Requirement R2, Part 2.2.

R3.

Each Sink Balancing Authority and each sink Reserve Sharing Group shall maintain
an amount of Operating Reserve, in addition to the minimum Contingency Reserve
in Requirement R1, equal to the amount of Operating Reserve–Supplemental for
any Interchange Transaction designated as part of the Source Balancing Authority’s
Operating Reserve–Supplemental or source Reserve Sharing Group’s Operating
Reserve–Supplemental, except within the first sixty minutes following an event
requiring the activation of Contingency Reserve. [Violation Risk Factor: High] [Time
Horizon: Real-time operations]

M3.

Each Sink Balancing Authority and each sink Reserve Sharing Group will have
dated documentation demonstrating it maintained an amount of Operating Reserve,
in addition to the Contingency Reserve identified in Requirement R1, equal to the
amount of Operating Reserve–Supplemental for any Interchange Transaction
designated as part of the Source Balancing Authority’s Operating Reserve–
Supplemental or source Reserve Sharing Group’s Operating Reserve–
Supplemental, for the entire period of the transaction, except within the first sixty
minutes following an event requiring the activation of Contingency Reserves, in
accordance with Requirement 3.

R4.

Each Source Balancing Authority and each source Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum Contingency
Reserve amounts identified in Requirement R1, equal to the amount and type of
Operating Reserves for any Operating Reserve transactions for which it is the
Source Balancing Authority or source Reserve Sharing Group. [Violation Risk
Factor: High] [Time Horizon: Real-time operations]

M4.

Each Source Balancing Authority and each source Reserve Sharing Group will have
dated documentation that demonstrates it maintained an amount of additional
Operating Reserves identified in Requirement R1, greater than or equal to the
amount and type of that identified in Requirement 4, for the entire period of the
transaction.

C. Compliance
1. Compliance Monitoring Process
1.1

Compliance Enforcement Authority
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WECC Standard BAL-002-WECC-2 — Contingency Reserve

For entities that do not work for the Regional Entity, the Regional Entity shall
serve as the Compliance Enforcement Authority.
For Reliability Coordinators and other functional entities that work for their
Regional Entity, the ERO or a Regional Entity approved by the ERO and FERC
or other applicable governmental authorities shall serve as the Compliance
Enforcement Authority.
For responsible entities that are also Regional Entities, the ERO or a Regional
Entity approved by the ERO and FERC or other applicable governmental
authorities shall serve as the Compliance Enforcement Authority.
1.2

Compliance Monitoring and Assessment Processes:
Compliance Audit
Self-Certification
Spot Checking
Compliance Investigation
Self-Reporting
Complaint

1.3

Evidence Retention
The following evidence retention periods identify the period of time an entity is
required to retain specific evidence to demonstrate compliance. For instances
where the evidence retention period specified below is shorter than the time
since the last audit, the Compliance Enforcement Authority may ask an entity to
provide other evidence to show that it was compliant for the full time period
since the last audit.
Each Balancing Authority and each Reserve Sharing Group shall keep
evidence for Requirement R1 through R4 for three years plus calendar current.

1.4.

Additional Compliance Information
1.4.1. This Standard shall apply to each Balancing Authority and each Reserve
Sharing Group that has registered with WECC as provided in Part 1.4.2
of Section C.
Each Balancing Authority identified in the registration with WECC as
provided in Part 1.4.2 of Section C shall be responsible for compliance
with this Standard through its participation in the Reserve Sharing Group
and not on an individual basis.
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WECC Standard BAL-002-WECC-2 — Contingency Reserve

1.4.2. A Reserve Sharing Group may register as the Responsible Entity for
purposes of compliance with this Standard by providing written notice to
the WECC: 1) indicating that the Reserve Sharing Group is registering
as the Responsible Entity for purposes of compliance with this Standard,
2) identifying each Balancing Authority that is a member of the Reserve
Sharing Group, and 3) identifying the person or organization that will
serve as agent on behalf of the Reserve Sharing Group for purposes of
communications and data submissions related to or required by this
Standard.
1.4.3. If an agent properly designated in accordance with Part 1.4.2 of Section
C identifies individual Balancing Authorities within the Reserve Sharing
Group responsible for noncompliance at the time of data submission,
together with the percentage of responsibility attributable to each
identified Balancing Authority, then, except as may otherwise be finally
determined through a duly conducted review or appeal of the initial
finding of noncompliance: 1) any penalties assessed for noncompliance
by the Reserve Sharing Group shall be allocated to the individual
Balancing Authorities identified in the applicable data submission in
proportion to their respective percentages of responsibility as specified in
the data submission, 2) each Balancing Authority shall be solely
responsible for all penalties allocated to it according to its percentage of
responsibility as provided in subsection 1) of this Part 1.4.3 of Section C,
and 3) neither the Reserve Sharing Group nor any member of the
Reserve Sharing Group shall be responsible for any portion of a penalty
assessed against another member of the Reserve Sharing Group in
accordance with subsection 1) of this Part 1.4.3 of Section C (even if the
member of Reserve Sharing Group against which the penalty is
assessed is not subject to or otherwise fails to pay its allocated share of
the penalty).
1.4.4. If an agent properly designated in accordance with Part 1.4.2 of Section
C fails to identify individual Balancing Authorities within the Reserve
Sharing Group responsible for noncompliance at the time of data
submission or fails to specify percentages of responsibility attributable to
each identified Balancing Authority, any penalties for noncompliance
shall be assessed against the agent on behalf of the Reserve Sharing
Group, and it shall be the responsibility of the members of the Reserve
Sharing Group to allocate responsibility for such noncompliance.
1.4.5. Any Balancing Authority that is a member of a Reserve Sharing Group
that has failed to register as provided in Part 1.4.2 of Section C shall be
subject to this Standard on an individual basis.

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WECC Standard BAL-002-WECC-2 — Contingency Reserve

Table of Compliance Elements

R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

Severe VSL

R1

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.

R2

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 100% but
greater than or

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 90% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 80% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
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WECC Standard BAL-002-WECC-2 — Contingency Reserve
R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

equal to 90% of
the required
Operating
Reserve–
Spinning amount
specified in
Requirement R2,
and both
characteristics
were met.

greater than or
equal to 80% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

greater than or
equal to 70% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

Severe VSL
required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

R3

Real-time
Operations

High

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R3. specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R3.

R4

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one hour,
during a
calendar month,
in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency

8

WECC Standard BAL-002-WECC-2 — Contingency Reserve
R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

Severe VSL

Reserve
Operating
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Operating
Reserve amount
specified in
Requirement R4.

Reserve
Operating
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

Reserve
Operating
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R4.

D. Regional Variances
None.
E. Interpretations
None.
F. Associated Documents
None.

9

WECC Standard BAL-002-WECC-2 — Contingency Reserve
Attachment A
Attachment A is illustrative only; it is not a requirement. Requirement R1 calls for an amount
of Contingency Reserve to be maintained, predicated on an amount of generation and load
required in Requirement R1, Part 1.1., specifically:
“1.1 The greater of either:



The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.”

Attachment A illustrates one possible way to account for and calculate the amount of
generation upon which the Contingency Reserve amount is predicated.
Below is a practical illustration showing how the generation amount may be calculated under
Requirement R1 for Balancing Authorities (BA) and Reserve Sharing Groups (RSG).
BA1 / RSG 1

Generation

Generator 1
Generator 2
Generator 3 (Pseudo-Tied out to BA2)
Generator 4 QF (has backup contract)
Generator 5 QF in EMS
Generator 6

300 MWs online
200 MWs online
100 MWs online
10 MWs online
10 MWs online
0 MWs online

Part of Generator
Yes
Yes
No
No
Yes
Yes

Dynamic Schedule to BA2 from BA11

(50 MWs)

Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

620 MWs
(The sum of gen 1-6)
510 MWs
(The sum of gen 1, 2, and 5)
460 MWs** (The sum of gen 1, 2 and 5
minus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would maintain reserves based on 510 MWs Generation.

BA2 / RSG2
Generator 11
1

Generation

Part of Generator

100 MWs

Yes

Note: This Dynamic Schedule is not the same as the Generator 3 Pseudo-Tie.

10

WECC Standard BAL-002-WECC-2 — Contingency Reserve
Generator 12
Generator 3 (Pseudo-Tied in from BA1)
Dynamic Schedule from BA1 to BA2
Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

100 MWs
100 MWs

Yes
Yes

50 MWs

Yes

300 MWs
(The sum of gen 11, 12 and 3.)
300 MWs
(The sum of gen 11, 12 and 3)
350 MWs** (The sum of gen 11, 12 and 3
plus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would have to maintain reserves based on 510MWs Generation and BA2 would determine its
generation to be 300 MWs.

11

Exhibit C

Consideration of Comments

Consideration of Comments
Regional Reliability Standard BAL-002-WECC-1

The Regional Reliability Standard Drafting Team (Drafting Team) thanks all commentors who submitted
comments on the BAL-002-WECC-1 – Contingency Reserve (Order 740 Remand). 1 This standard was
posted for a 45-day public comment period from January 6, 2012 through February 20, 2012.
Stakeholders were asked to provide feedback on the standard and associated documents through a
special electronic comment form. There were 10 sets of comments, including comments from 13
different people from 10 companies representing six of the 10 Industry Segments as shown in the table
on the following pages.
All comments submitted may be reviewed in their original format on the standard’s project page:
http://www.nerc.com/filez/regional_standards/regional_reliability_standards_under_development.ht
ml
If you feel that your comment has been overlooked, please let us know immediately. Our goal is to give
every comment serious consideration in this process! If you feel there has been an error or omission,
you can contact the Vice President of Standards and Training, Mark Lauby, at 404-446-2560 or at
[email protected]. In addition, there is a NERC Reliability Standards Appeals Process.2

1

Developed as WECC-0083.

2

The appeals process is in the Reliability Standards Development Procedures: http://www.nerc.com/standards/newstandardsprocess.html.

Index to Questions, Comments, and Responses
1.

Do you agree the proposed standard is being developed in a fair and open process, using the
associated Regional Reliability Standards Development Procedure? …. ............................................ 5

2.

Does the proposed standard pose an adverse impact to reliability or commerce in a neighboring
region or interconnection? …. ............................................................................................................. 7

3.

Does the proposed standard pose a serious and substantial threat to public health, safety, welfare,
or national security? …. .................................................................................................................... 10

4.

Does the proposed standard pose a serious and substantial burden on competitive markets within
the interconnection that is not necessary for reliability? …. ............................................................ 12

5.

Does the proposed regional reliability standard meet at least one of the following criteria? …. .... 17
•
•
•

The proposed standard has more specific criteria for the same requirements covered in a
continent-wide standard
The proposed standard has requirements that are not included in the corresponding
continent-wide reliability standard
The proposed regional difference is necessitated by a physical difference in the bulk power
system.

Consideration of Comments: BAL-002-WECC-1

2

The Industry Segments are:
1 — Transmission Owners
2 — RTOs, ISOs
3 — Load-serving Entities
4 — Transmission-dependent Utilities
5 — Electric Generators
6 — Electricity Brokers, Aggregators, and Marketers
7 — Large Electricity End Users
8 — Small Electricity End Users
9 — Federal, State, Provincial Regulatory or other Government Entities
10 — Regional Reliability Organizations, Regional Entities

Group/Individual

Commenter

Organization

Registered Ballot Body Segment
1

1.

Group

Chris Higgins

Bonneville Power Administration

2

3

4

5

6

X

X

X

X

X
X

Additional Member Additional Organization Region Segment Selection
1. Bart

McManus

WECC 1

2. Fran

Halpin

WECC 5

3. Brenda

Anderson

WECC 6

2.
3.

Individual
Individual

Chris Chavez
Sandra Shaffer

Salt River Project
PacifiCorp

X
X

X
X

X
X

4.

Individual

John Canavan

NorthWestern Corporation

X

X

X

5.

Individual

Keira Kazmerski

Xcel Energy

X

X

X

X

6.

Individual

Claire Lloyd

Tacoma Power

X

X

X

X

X

7

8

9

10

Group/Individual

Commenter

Organization

Registered Ballot Body Segment
1

7.

Individual

Mark B Thompson

Alberta Electric System Operator

8.
9.

Individual
Individual

Mike Goodenough
Richard Vine

Powerex
California ISO

10.

Individual

Tina Gary

Portland General Electric Company

Consideration of Comments: BAL-002-WECC-1

2

3

4

5

6

7

X
X
X
X

X

X

X

4

8

9

10

1.

Do you agree the proposed standard is being developed in a fair and open process, using the associated Regional Reliability
Standards Development Procedure?

Summary Consideration:
Ten of the ten respondents agreed the proposed standard is being developed in a fair and open process, using the associated
Regional Reliability Standards Development Procedure. The Drafting Team appreciates the consensus.

Organization

Yes or No

Bonneville Power Administration

Yes

Salt River Project

Yes

PacifiCorp

Yes

NorthWestern Corporation

Yes

Xcel Energy

Yes

Tacoma Power

Yes

Consideration of Comments: BAL-002-WECC-1

Question 1 Comment

Tacoma Power acknowledges that the proposed new WECC standard was
developed and routed through the WECC and subsequently through the
NERC process. Tacoma Power has not supported this proposed new WECC
standard due to the fact that it will produce approximately the same amount
of total contingency operating reserves, yet it will make a significant shifting
of the contingency reserve obligation between the entities, including new
entities. This shifting of the contingency reserve obligation has not been
shown to be a benefit to the interconnection and is unnecessary.

5

Organization

Yes or No

Question 1 Comment

Response:
The Drafting Team notes and appreciates your consensus as to use of the process for developing the proposed standard
and commends Tacoma for its continued participation.
The Drafting Team also notes Tacoma’s concern that when changes are made to the reliability aspects of the grid via
implementation of reliability standards, these changes do not come without a shifting of obligation or cost. Further, the
Drafting Team acknowledges that as standards are implemented, cost shifting often occurs giving way to the argument
that the sole intent of the changes is financially motivated. Finally, the Drafting Team acknowledges that these facts are
no mystery to the industry and the processes for development of standards hold the potential to be used for financial as
opposed to reliability-related purposes.
The Drafting Team did consider the potential of cost shifting in a number of forums, largely in the early years of
developing this standard. This Drafting Team and its predecessors concluded that an even split of the burden between
generation and load was a reasonable approach, albeit, not the only possible approach.
Based on the evaluation of different alternatives to determine the allocation methodology, the Drafting Team determined
that this methodology had the least negative effect on the greatest number of entities. The Drafting Team acknowledges
that anytime there is a cost shift, some will incur greater costs, some will lower their costs, and some will remain revenue
neutral. Support or opposition for the shift generally depends on which side of the equation one falls.
As to this specific standard, the Drafting Team does not claim to know all the differences between those entities
dissuaded by the standard because it may harm their own profit and loss statements versus those in support of the
standard because its higher criteria bolsters reliability. Rather, the Drafting Team has endeavored to meet both the
mandates of Order 740 as well as the mandate to be responsive imposed by the Process for Developing and Approving
WECC Standards (Process). The Drafting Team is reluctant to meet one obligation without also meeting the other.
Alberta Electric System Operator

Yes

Consideration of Comments: BAL-002-WECC-1

6

Organization

Yes or No

Powerex

Yes

California ISO

Yes

Portland General Electric Company

Yes

Question 1 Comment

Although the process has been open, WECC disregarded some major
concerns voiced by the industry. Portland General Electric Company (PGE) is
concerned that the consequences of the proposed standard were not fully
considered and worry that the standard will have a negative impact on the
reliability of the BES in the Western region. The reliability concerns with the
standard must be addressed before it is approved for use by the
industry.Under WECC rules, a proposed standard is submitted to NERC with
only a simple majority, potentially telephonic, vote of the WECC standing
committee membership. This process differs from that used by NERC, which
will not pass a standards revision without a 70% weighted majority of
members approving the proposed standard. During the 2011 balloting of
subject matter experts and the standing committee, the proposal failed and
the WECC Board sent the proposal back to the drafting committee to
address issues presented in the “No” vote statements. However, the
proposal is now up for comment simultaneously within both WECC and
NERC without adequately addressing the concerns of the voting members.

Response:
The Drafting Team notes and appreciates your consensus as to use of the process for developing the proposed standard
and commends PGE for its continued participation.
The Drafting Team notes PGE’s concurrence that the process has been fair and open. Part of that process has been the
receipt, consideration, and response to PGE’s comments each time they have been submitted. The Drafting Team
suggests that disagreement with PGE’s position is not the same as disregarding PGE’s position. Noting that numerous
entities have commented on the document during its development, many of those entities are diametrically opposed to

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Organization

Yes or No

Question 1 Comment

PGE’s position. All positions cannot be accommodated; however, all positions are considered.
Noting PGE’s concurrence that the process has been fair and open, the Drafting Team points out that although the
WECC process differs from the NERC process it still maintains a number of required tiered approvals before the
document can be finally approved. Specifically, solely within WECC, the Drafting Team, which is comprised of subject
matter experts, must first approve the document for forwarding to the Operating Committee. Thereafter, the Operating
Committee must approve of the document and subsequently the WECC Board of Directors must approve the document.
As for the document being forwarded through the process without regard to consideration of the NERC comments
received during this posting, that 45-day period closed on February 20, 2012. The Drafting Team met to review the
comments on February 23, 2012 before making any decision to move the document forward in the development process.
The Drafting Team assures PGE that PGE’s comments have been received, considered, and addressed. They have not
been disregarded.
Finally, as to the May 19, 2011 vote, as drafted at that time the standard was approved by a majority of the Transmission
Customers and failed by only three votes in the Transmission Providers category. Had those three votes been affirmative
the document would have moved forward without additional change. In response to the negative votes, the Drafting Team
considered the industry’s input, made a number of very positive changes, and believes the document as drafted now
addresses the majority of all “no” votes cast during the May 19, 2011 ballot.

Consideration of Comments: BAL-002-WECC-1

8

2. Does the proposed standard pose an adverse impact to reliability or commerce in a neighboring region or interconnection?
Summary Consideration: Of the ten respondents, eight stated the standard poses no adverse impact to reliability. Of the remaining
two, Powerex is concerned that interruptible imports will not be covered and PGE is concerned that markets and transmission might
not be available, and if available, this results in an unnecessary cost shift. As to Powerex, interruptible are addressed in R3 and R4.
As to PGE’s concerns, the team concluded that a mature capacity market does exist. As to the need for other markets to mature, the
team believes there is ample industry experience to indicate that a market will be made where the need for a market is expressed.

Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

NorthWestern Corporation

No

Xcel Energy

No

Question 2 Comment

The proposed standard addresses the shortcomings of the existing standard as it
relates to commercial impacts and reliability issues while maintaining a reserve
requirement comparable to the existing requirement. The existing standard pits
Balancing Authority operators against non-Balancing Authority owned generation and
raises questions as to what is and is not allowed when it comes to selling “firm”
power from these generators. The proposed standard removes this issue from the
standard and allows the Balancing Authority operator to determine the reserve
quantity without having to know each transaction’s impact to the reserve
requirement.

Response: The Drafting Team appreciates your support and concurs with your conclusion.

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Organization

Yes or No

Tacoma Power

No

Question 2 Comment
Tacoma Power does not know of any adverse impact to any neighboring region or
interconnection.

Response: The Drafting Team appreciated your support and concurs with your conclusion.
Alberta Electric System
Operator

No

The AESO does not agree with the FERC assessment that an EEA3 level is the
appropriate level for a supply shortfall situation when using firm load as reserves. An
EEA3 is defined as - firm load curtailment is immanent or in progress. The AESO does
not believe that using firm load as reserves, in this situation, is an “imminent” firm
load curtailment (R 1.2 last bullet). NERC EOP-002-3 Attachment 1 supports this
position.

Response: The Drafting Team appreciates AESO’s input regarding the issue of “EEA3.”
In FERC Order 740, P47, “NERC [agreed] with WECC that a reliability coordinator must declare a capacity or energy
emergency before firm load could be considered to maintain contingency reserves…” In answering that position, FERC
stated at P49, that “[B]alancing authorities and reserve sharing groups within WECC are subject to the same restrictions
regarding the use of firm load as contingency reserve as balancing authorities elsewhere operating under the continentwide Reliability Standard.”
To clarify the EEA3 issue, the proposed standard allows for Contingency Reserve to be comprised of “All other load…once
the Reliability Coordinator has declared an energy emergency alert signifying that firm load interruption is imminent or in
progress.” (See R1, 1.2) It should be noted that the phrase “firm load interruption imminent or in progress” comes directly
from the title of EOP-002-3, Capacity and Energy Emergencies, Attachment 1-EOP-002-2.1, Energy Emergency Alerts, “3.
Alert 3 – Firm load interruption imminent or in progress” (AKA: EEA3 alert.)
Powerex

Yes

The elimination of the requirement to carry additional reserves for interruptible
imports may be a step backward in relaibility until such time that the issue of reserve
requirements associated with interruptible imports is addressed in some way, either
through another standard development process or a regional criterion that
specifically identifies the operating reserves required for interruptible imports.

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Organization

Yes or No

Question 2 Comment

Response:
As to the use of the undefined terms “interruptible imports” or “interruptible load,” the Drafting Team recognized that within
WECC the colloquial use of these phrases is not always universally understood or implemented in a standardized fashion.
To address this concern the Drafting Team opted to use the NERC-defined term “Interruptible Load” contained in the NERC
Glossary to avoid any misunderstanding.
R3 of the proposed standard directly addresses the concept of interruptible schedules and R4 addresses the concept of ondemand energy.
The standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing of the
energy codes). The standard as drafted does not preclude the continued use of the e-Tag system in any of its iterations.
By contrast, the standard is designed to address Contingency Reserve obligations and Contingency Reserve transactions.
The standard requires that the seller of Contingency Reserves hold reserves to meet that obligation. The standard is
designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss of resource to include loss
of its own generation or loss of an import. Of note, the remand order did not take issue with the associated language as
drafted.
While this approach may not align with all parties’ interpretation of the retired MORC language, the Drafting Team believes
it addresses the reliability needs of the grid.
California ISO

No

Portland General Electric
Company

Yes

PGE is concerned that the proposed standard puts the responsibility to provide
reserves in part on the Sink Balancing Authorities (BAs)/Load Serving Entities (LSEs),
which are subject to an immature bilateral market for acquisition of said reserves. If
Sink BAs / LSEs are not able to acquire the proposed reserve level, they could be
forced to shed load to remain compliant with the proposed standard. There is a
fundamental difference between the acquisition of reserves in an organized market
compared to a bilateral market such as that prominent in the WECC region. In a
bilaterally based market, because generators are not subject to must-run

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Organization

Yes or No

Question 2 Comment
requirements and are not required to offer their generation into the market, Sink BAs
/LSEs do not have assured access to spinning and non-spinning capacity. Therefore,
reserve requirements are currently maintained by the generators in the majority of
the WECC region. Generators are the only entities that have the assured ability,
without shedding load, to respond to contingency events. The transfer of reserve
obligation from generators to load is an unnecessary cost shift from the parties
physically able to perform, to parties that must contract. Moreover, even if a
contracting party is able to secure reserves, there would be no assurance that they
could secure transmission on a system encumbered due to the requirements of the
proposed standard. Simply put, the proposed BAL-002-WECC-01 shifts costs with no
associated increase in reliability, and would potentially reduce reliability and increase
transmission constraints in the WECC region.

Response:
Issue #1: Immature Market
The Drafting Team understands PGE’s need for absolute certainty that a market will exist for the services described in the
proposed standard. The Drafting Team also acknowledges PGE’s statement that, indeed, a market does not exist, though it
is immature. Additionally, the Drafting Team points PGE to PacifiCorp’s statement below suggesting that, even if there is an
immature market today, there is a likelihood that a new market will self-initiate to meet the needs of the marketplace.
Although there is no guarantee that this standard will create a market, it is safe to say that — based on industry history —
where a market need is expressed, a market will rise up to meet it. Further, there is no model that can perfectly predict
market forces; thus, waiting on one as the precursor for addressing a reliability concern does not seem the wisest approach.

Issue #2: Transfers reserve obligation to contract parties as opposed to Generators
Although there may not be a mature bilateral market, there is a mature capacity market from which the required resources
can be purchased. These capacity resources can and do provide the required resources based on their loading.

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Organization

Yes or No

Question 2 Comment

Issue #3: No guarantee wires will be there
The standard spreads the burden equally between load and generation. This spread better locates the resource to the load.
Therefore, this standard provides an increased reliability over its predecessor in that it requires both load and generation
(not just generation) to carry the reserves.

Consideration of Comments: BAL-002-WECC-1

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3.

Does the proposed standard pose a serious and substantial threat to public health, safety, welfare, or national security?

Summary Consideration: Of the ten respondents, all ten are in accord that the proposed standard either poses no serious/substantial
threat to public health, safety, welfare, or national security; or, in the alternative, they are not in a position to perform a full analysis.
Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

NorthWestern Corporation

No

Xcel Energy

No

Tacoma Power

No

Question 3 Comment

Tacoma Power notes that the contingency reserve obligation will be shifted between
the entities under the proposed new WECC standard. We do not have the expertise
to determine if there is any serious or substantial threat to public health, safety,
welfare, or national security due to the shifting of contingency reserve obligation
between the entities.

Response: The Drafting Team appreciates your observation.
Alberta Electric System
Operator

No

Powerex

No

California ISO

No

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Organization

Yes or No

Portland General Electric
Company

Question 3 Comment

No

Consideration of Comments: BAL-002-WECC-1

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4.

Does the proposed standard pose a serious and substantial burden on competitive markets within the interconnection that is
not necessary for reliability?

Summary Consideration: Of the nine respondents, seven agree that the standard does not pose a serious/substantial burden on
competitive markets within the interconnection that is not necessary for reliability. One did not respond. Of the two concerned
respondents, Tacoma is concerned that there is no guarantee that a mature bilateral market will ever exist; albeit, they concur an
immature market now exists. By contrast, PacifiCorp sees that passage of the standard could be the catalyst to creation of a new
market. The standard cannot assure a market will be created; however, there is historical precedence to show that where a market
need is expressed – a market will evolve. As to PGE’s multiple concerns: 1) anytime a standard is implemented resulting in a cost
shift, some will pay more, some will pay less and some will be neutral, 2) interruptible imports is an ambiguous term; however
interruptible transactions are already addressed in R3 and R4, and 3) like Tacoma, where a market expresses a need there is historical
evidence suggesting that a market will meet those needs.
Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

question 4 Comment

While PacifiCorp does not believe the proposed standard would pose a serious and
subsantial burden on existing competitive markets, we do believe that it may lead to
the creation of a new market product.

Response: The Drafting Team concurs and appreciates your observation.
NorthWestern Corporation

No

Xcel Energy
Tacoma Power

Yes

As Tacoma Power has stated above, this proposed new WECC standard shifts the
contingency reserve obligation between the entities in WECC. Due to this shift, new
or different relationships will have to be created. Cost causation principles will create

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Organization

Yes or No

question 4 Comment
new issues for the entities such that the entities that are responsible for providing
the new contingency reserve obligations are truly held responsible. New contracts
will have to be executed between these new entities and the balancing authorities,
and there is no guarantee of agreement.

Response: The Drafting Team appreciates Tacoma’s concern and notes that there is no single agreement on the market
issue. A simple study cannot be performed that will conclude, without fail, that a market for the required services will be
available. However, it is the nature of a bilateral market that when a product is needed, the market for that product often
self-initiates. On point, PacifiCorp (see above) suggests in counter-point to Tacoma that the proposed standard may result
in the creation of a new market and new market products. As such, waiting for a fully mature market to develop before the
need is established may not be the best way to facilitate that market nor can it be the single catalyst to approving this
standard since it is unlikely that a market will be created “just in case” this standard is approved.
The Drafting Team concurs that as responsibilities shift, new agreements will have to be executed. To meet this need, and
in response to an earlier comment from WECC members, the Drafting Team is requesting an extended Effective Date, in
part, to allow for these new relationships to mature.
Alberta Electric System
Operator

No

Powerex

No

California ISO

No

Though the proposed standard may not pose a "serious and substantial" burden on
competetive markets, the ISO feels that (1) the proposed recovery period is more
burdensome than necessary and (2) more clarity should be provided as to allowed
technology to meet operating reserve requirements as follows: 1. The ISO believes
the last sentence in Measurements M1.1, M2 and M3 should be modified to indicate
that the 60-minute recovery period begins when the DCS event is over, at the end of
the allowed 15-minute recovery period. This would be consistent with what is
allowed by the NERC BAL-002-0 Standards which specifically states that "The
Contingency Reserve Restoration Period begins at the end of the Disturbance

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Organization

Yes or No

question 4 Comment
Recovery Period." The current wording "within 60 minutes of the event” is too vague
and has been interpreted by the drafting team to mean "from the start of the event."
This interpretation would mean that WECC entities have only 45 minutes after the
recovery period to restore reserves which is only half of the 90 minutes Eastern
entities would have. This seems overly burdensome and will continue to be an ever
greater challenge as we increase the levels of intermittent renewables going
forward.2. The proposed Requirement R2 in BAL-002-WECC-1 requires that at least
half of the Contingency Reserve obligation be "Operating Reserve - Spinning", which
is in the NERC Glossary of Terms. The problem is that the NERC definition of
"Operating Reserve - Spinning" focuses on generation and demand response, which
raises doubt as to whether a battery or other form of energy storage could be used.
In keeping with the spirit that FERC has made clear that Reliability Standards should
not dictate the type of technology used to meet a reserve requirement NERC should
consider revising the definition of "Operating Reserve - Spinning" to ensure this is
understood.

Response:

Issue #1: The proposed recovery period is more burdensome than necessary.

The Drafting Team appreciates your concern. Although a longer recovery period was suggested early on, FERC stated that
unless the Drafting Team could produce substantial technical justification for the position, FERC would not agree to that
inclusion. To date, the Drafting Team has not compiled what it believes to be sufficient technical justification to request a
longer recovery period. Thus, it was not included in the proposed standard.
That said, the Drafting Team would point the CAISO to Bonneville Power Authority’s (BPA) comment in WECC Posting 5 of
this standard wherein BPA states that “BPA will submit a SAR for the same standard to extend the time period for reserve
restoration consistent with the NERC standard, 15 minutes DCS recovery plus 90 minutes for reserve restoration for a total
of 105 minutes after the contingency.” Further, PPL in that same comment window suggested they would support that effort.

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Organization

Yes or No

question 4 Comment

Although the Drafting Team is unable to address your concerns due to the instant lack of data, the Drafting Team believes
the CAISO should join with BPA and PPL to pursue the matter in the standards development process.

Issue #2: Adjust the Measures

The Drafting Team would refer the CAISO to the below paragraph of FERC Order 740.

“On remand, we direct WECC to develop a modification to the reserve restoration period or provide evidence demonstrating
that extending the reserve restoration period to 90 minutes and adding a disturbance recovery period of 15 minutes would
not increase the risk of a major disturbance in the Western Interconnection.” FERC Order 740. P. 28.

The above language indicates that the current application refers to 60 minutes from the time of the event – not 60 minutes
following the recovery period. After repeated requests to the field, the Drafting Team has not yet been provided sufficient
data to justify making the requested change.
Although the Drafting Team does not opt to adopt your proposed language, the Drafting Team has made changes to
Version 5 in an effort to clarify the matter. First, taking note that the language was contained within the measures and not
the requirements, the Drafting Team was concerned that the measure added additional features not contemplated in the
requirement. As such, the language was removed from the measure and moved to the requirement. This change was also
made as a result of the NERC Quality Review of the proposed document.

In Version 5, the affected language now reads as follows:
“Except within the first sixty minutes following an event requiring the activation of Contingency Reserves….”
That same sixty-minute period is now accurately reflected in both the requirement and the measure.

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Organization

Yes or No

question 4 Comment

Issue #3: Can a battery be used?

The Drafting Team does not agree with the CAISO and believes technologies, such as batteries, both contemplated and not
yet contemplated are included in the standard as potential resources – so long as the undefined resource can meet the
response characteristics described in the standard. The language does not preclude any specific technology; rather, the
language delineates how that technology must be respond.
As to the use of the NERC term Operating Reserve – Spinning, the Drafting Team disagrees that the NERC term focuses
on generation in that the term specifically includes “generation synchronized to the system” and “load fully removable from
the system”; thus, load and generation.
To meet the CAISO’s concerns; R1, Part 1.2 states that Contingency Reserve can be comprised of “A resource, other than
generation or load, that can provide energy or reduce energy consumption.” This wide berth should accommodate new
technologies both now conceived and conceievable in the future.
Portland General Electric
Company

Yes

PGE is concerned with the movement toward unnecessary changes to an approved
reliability standard as proposed in BAL-002-WECC-1 that will not result in increased
reliability. The changes made through BAL-002-WECC-1 go beyond the language
clarity and consistency required by FERC in the 2007 Order (RR07-11) and seem to be
driven more by the economic interests to shift contingency reserve responsibility (i.e.
costs) from the generators to the loads rather than improving reliability. Changes to
reliability standards should be driven by technical merit weighed against overall
costs. The standards process should not be used as a lever to shift costs among
members. o The current "Tier One" BAL-STD-002-0 reflects the longstanding WECC
Minimum Operating Reliability Criteria (MORC) by breaking down required operating
reserve into four components: regulating reserve, contingency reserve, reserve for
on-demand obligations, and reserves for interruptible imports. However, the
proposed BAL-002-WECC-1 narrows the scope to only contingency reserve, which
raises the question of what happens to the other components. In the time since the

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Organization

Yes or No

question 4 Comment
initial comment period on BAL-002-WECC-1, WECC has retired the WECC MORC with
some parts preserved as new “criteria”. However, the reserve requirements for
interruptible schedules and on-demand rights/obligations were not preserved. The
passage of the proposed BAL-002-WECC-1 and the retirement of the WECC MORC
would remove any explicit reserve requirements for interruptible schedules and ondemand rights/obligations. The effect of this can only be a step down in the
reliability of the interconnected system. o The clarification of "load responsibility"
and e-tag 1.8 helped characterize the nature of the transactions. For the "sink" BA, it
identified those imports that were "firm for the hour". The simplified calculation of
contingency reserve in BAL-002-WECC-1 does NOT consider the responsibility of the
BA to anticipate which imports might be interrupted in-hour, and therefore the
quantity of additional reserves that need to be available. Under BAL-002-WECC-1
everyone will be forced to parse the energy codes to infer what energy is "firm for
the hour". BAL-002-WECCC-1 should require continued use of the "load
responsibility" feature in e-tag 1.8 to clearly identify those transactions that are not
"firm for the hour". o Despite industry-voiced concerns over the difficulty of
interpreting "load responsibility", BAL-002-WECC-1 is saddled with the term
"interruptible load". Such poorly defined terms put the BA in a position to judge
whether or not loads offered up by an LSE meet the contract requirements of being
"interruptible". o BAL-002-WECC-1 is assuming a robust reserves market in the West.
The West does not have a mature reserves market. This new standard will put
additional burden on the load serving entities by forcing them to procure reserves, if
available, from third parties in order to meet the new standard. PGE is concerned
this requirement will increase demand for capacity across constrained transmission
without any beneficial increase in reliability. o PGE is concerned that the proposed
standard puts the responsibility to provide reserves in part on the Sink Balancing
Authorities (BAs)/Load Serving Entities (LSEs), which are subject to an immature
bilateral market for acquisition of said reserves. If Sink BAs / LSEs are not able to
acquire the proposed reserve level, they could be forced to shed load to remain
compliant with the proposed standard. There is a fundamental difference between

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Organization

Yes or No

question 4 Comment
the acquisition of reserves in an organized market compared to a bilateral market
such as that prominent in the WECC region. In a bilaterally based market, because
generators are not subject to must-run requirements and are not required to offer
their generation into the market, Sink BAs /LSEs do not have assured access to
spinning and non-spinning capacity. Therefore, reserve requirements are currently
maintained by the generators in the majority of the WECC region. Generators are the
only entities that have the assured ability, without shedding load, to respond to
contingency events. The transfer of reserve obligation from generators to load is an
unnecessary cost shift from the parties physically able to perform, to parties that
must contract. Moreover, even if a contracting party is able to secure reserves, there
would be no assurance that they could secure transmission on a system encumbered
due to the requirements of the proposed standard. Simply put, the proposed BAL002-WECC-01 shifts costs with no associated increase in reliability, and would
potentially reduce reliability and increase transmission constraints in the WECC
region.

Response:
Issue #1: Use of Process for Cost Shifting
The Drafting Team notes your concern that when changes are made to the reliability aspects of the grid via implementation
of reliability standards, these changes do not come without cost. Further, the Drafting Team acknowledges that as
standards are implemented, cost shifting often occurs giving way to the argument that the sole intent of the changes is
financially motivated. Finally, the Drafting Team acknowledges that these facts are no mystery to the industry and the
processes for development of standards hold the potential to be used for financial as opposed to reliability-related purposes.
The Drafting Team did consider the potential of cost shifting in a number of forums, largely in the early years of developing
this standard. This Drafting Team and its predecessors concluded that an even split of the burden between generation and
load was a reasonable approach, albeit, not the only possible approach.
Based on the evaluation of different alternatives to determine the allocation methodology, the Drafting Team determined
that this methodology had the least negative effect on the greatest number of entities. The Drafting Team acknowledges

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Organization

Yes or No

question 4 Comment

that anytime there is a cost shift, some will incur greater costs, some will lower their costs, and some will remain revenue
neutral. Support or opposition for the shift generally depends on which side of the equation one falls. For example, please
see NV Energy’s comment above stating their own entity’s position on what constitutes a just split of costs.
As to this specific standard, the Drafting Team does not claim to know all the differences between those entities dissuaded
by the standard because it may harm their own profit and loss statements versus those in support of the standard because
its higher criteria bolsters reliability. Rather, the Drafting Team has endeavored to meet both the mandates of Order 740 as
well as the mandate to be responsive imposed by the Process for developing and Approving WECC Standards (Process).
The Drafting Team is reluctant to meet one obligation without also meeting the other.
Issue #2: The Standard’s scope regarding “MORC” is Too Narrow
The Drafting Team disagrees with your conclusion. R3 directly addresses the concept of interruptible schedules and R4
addresses the concept of on-demand energy. (Note: “Interruptible imports” remains an undefined term not uniformly used
across the Western Interconnection.)
Issue #3: Addressing Interruptible Imports / Using the “Load Responsibility” concept
The standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing of the
energy codes). The standard as drafted does not preclude the continued use of the e-Tag system in any of its iterations.
By contrast, the standard is designed to address Contingency Reserve obligations and Contingency Reserve transactions.
Further, the standard requires that the seller of Contingency Reserves hold reserves to meet that obligation. The standard is
designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss of resource to include loss
of its own generation or loss of an import. Of note, the remand order did not take issue with the associated language as
drafted.
As to the use of the undefined term “interruptible load,” the Drafting Team recognized that within WECC the colloquial use
of the phrase is not always implemented in a standardized fashion. To address this concern the Drafting Team opted to use
the defined term “Interruptible Load” contained in the NERC Glossary to avoid any misunderstanding.
Issue #4: An immature Market may Preclude Compliance
The immature market issue was already addressed above; please refer there.

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Organization

Yes or No

question 4 Comment

The Drafting Team recognizes PGE’s market concerns as well as the likelihood that costs and burdens may shift to meet
the “3 and 3” proposal; some entities may experience a cost increase whereas some may experience a cost decrease. The
choice of “3 and 3” was made in an effort to arrive at an equitable calculation of Contingency Reserve.

5.

Does the proposed regional reliability standard meet at least one of the following criteria?
•

The proposed standard has more specific criteria for the same requirements covered in a continent-wide standard

•

The proposed standard has requirements that are not included in the corresponding continent-wide reliability standard

•

The proposed regional difference is necessitated by a physical difference in the bulk power system.

Summary Consideration: All respondents concurred that the proposed standard meets at least one of the NERC reliability criteria.

Organization

Yes or No

Bonneville Power
Administration

Yes

Salt River Project

Yes

PacifiCorp

Yes

Consideration of Comments: BAL-002-WECC-1

Question 4 Comment

24

Organization

Yes or No

NorthWestern Corporation

Yes

Xcel Energy

Yes

Tacoma Power

Yes

Question 4 Comment

Tacoma Power believes that at least one of the criteria is met. However, that does
not mean it is the right thing to do. We believe that this proposed new WECC
standard has a significant shift in the contingency reserve obligation without any
demonstrated benefits and no increased reliability. We urge you to not approve the
proposed new WECC standard.Thank you for consideration of our comments.

Response: The Drafting Team appreciates your comment. The “3 and 3” spread will result in roughly the same amount of
Contingency Reserves being carried as under the existing standard. By contrast to the existing standard, the proposed
standard provides clarity as to the BAs’ reserve requirement, and removes market transactions from the determination of
the reserve requirement.
Alberta Electric System
Operator

Yes

Powerex

Yes

California ISO

Yes

Portland General Electric
Company

Yes

a. While the proposed standard has more specificity than the continent-wide
standard, the proposed standard’s increased specificity has not been proven to
provide additional reliability or clarity than the existing regional reliability standard.
b. The proposed standard does not include requirements that are not included in the
corresponding continent-wide reliability standard that are not already contained
within the existing regional reliability standard.
c. The proposed standard does not consider the differences between the bulk of
WECC’s operational model (i.e., a bilateral path based model), and a centrally

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Organization

Yes or No

Question 4 Comment
managed flow based model. Ignoring the differences between the two models and
implementing the proposed standard would impose cost shifting with the potential
for a reduced level of reliability. The reduced liability would be due to reserve
requirements being placed on entities that have no assured ability to respond to
contingency events without shedding load.

Response:
Issue #1: The standard does not provide additional reliability
The Drafting Team appreciates your comment. The “3 and 3” spread will result in roughly the same amount of Contingency
Reserves being carried as under the existing standard. By contrast to the existing standard, the proposed standard provides
clarity as to the BAs’ reserve requirement. The proposed standard calculates the reserve requirement independent of
market transactions, and electrically places the reserves closer to the load to be served.
The proposed standard closes a gap contained in the existing standard in that, under the existing standard, there is not a
requirement for renewable generation to be included in the calculation of the Contingency Reserve requirement. The
existing standard requires Contingency Reserve based only on hydro and thermal generation; it does not include
renewable. There is such a requirement in the proposed standard. The proposed standard, which requires inclusion of all
types of generation in the calculation of the Contingency Reserve amount, enhances reliability over the existing standard.
With the large amount of existing and proposed wind, PV, and other renewable, this is a substantial improvement in
reliability.
Issue #2: There are no new requirements compared to the existing standard.
Please see comment above.
Issue #3: Immature bilateral contract market
Please see the Drafting Team’s responses above regarding immature markets and shifting of costs.

Consideration of Comments: BAL-002-WECC-1

26

6. Additional Comments Submitted
Summary Consideration:
The team thanks all respondents for their time and considered responses. For those seeking change to the standard beyond those
contemplated in the current request, the team encourages full use of the standards development process.
The distribution of the “3 and 3” between load and generation is designed to equitably spread the reserve burden. Within the
industry there is ample example that where a market need is expressed, a market will develop to meet that need.
Wherever appropriate, the team opted to use NERC defined terms, such as Interruptible Load as opposed to the undefined term
“interruptible” often used within WECC but not uniformly implemented.

Organization
Bonneville Power Administration

Yes or No

Additional Comments

Yes

BPA is supportive of this standard. However, BPA does have the following
comment with the standard, with the understanding that this is not going to
be a change to the standard as submitted: BPA will submit a SAR for the
same standard to extend the time period for reserve restoration consistent
with the NERC standard, 15 minute DCS recovery plus 90 minutes for reserve
restoration for a total of 105 minutes after the contingency. BPA does
understand that this issue is not currently a part of the proposed changes
due to insufficient documentation being submitted to FERC during the first
iteration of this standard. Since this time, a large amount of documentation
that justifies expanding the recovery period has been submitted to the
drafting team. This documentation detailed why thermal issues with the
transmission system are not an issue in WECC plus showed that there is
almost nonexistent increase in risk to WECC with expanding the recovery
period. Although BPA understands that it is not desired by WECC members
to confront this issue with this iteration of the standard, BPA strongly

Consideration of Comments: BAL-002-WECC-1

27

Organization

Yes or No

Additional Comments
recommends that, if this standard is approved by FERC, WECC immediately
reconvene the drafting team in order to correct this issue.

Response: The Drafting Team appreciates your support as well as your initiative and further notes the reiteration of your
position as made in BAL-002-WECC-1, Posting 2 and again in Posting 5. The Drafting Team encourages full use of the
standards development process and thanks BPA for acknowledging the confines under which the Drafting Team has
labored.
NorthWestern Corporation

No

NorthWestern Energy disagrees with the amount of Contingency Reserve
equal to the sum of three percent of hourly integrated load plus three
percent of hourly integrated generation as specified in Requirement 1 of
BAL-002-WECC-1. This amount of Contingency Reserve strays away from the
current requirement of the sum of five percent of the load responsibility
served by hydro and wind generation and seven percent of the load
responsibility served by thermal generation. The sum of five and seven
percent Contingency Reserve responsibility is a tried practice that has
proven to allocate adequate Contingency Reserve to responsible entities in
the Western interconnection. In addition, NorthWestern Energy
recommends that Contingency Reserves and Operating Reserves be defined
in the proposed BAL-004-WECC-1 standard. The use of these terms in the
standard does not seem to be consistent with industry standards and it
leads to confusion when the two terms and referenced and interchanged
throughout the document.

Response:
Issue #1: The amount strays from 5 hydro/wind and 7 thermal
The “3 and 3” has already been approved by the WECC Operating Committee, and when reviewed by FERC in the Order
740 Remand Order, FERC did not challenge the allocation. The Drafting Team notes that the existing standard does not
specifically require reserves to be carried for “wind.” By contrast, the proposed standard would require that reserves be
carried for ‘all” generation. This would also include wind, PV, and “all” renewable generation.
When studied by the Drafting Team, the 3 and 3 allocation resulted in an amount of Contingency Reserve essentially the
Consideration of Comments: BAL-002-WECC-1

28

Organization

Yes or No

Additional Comments

same as the “tried and true” 5 and 7.
Issue #2: Contingency Reserves and Operating Reserves should be defined in BAL-004-WECC-1 – not here.
The Drafting Team notes that it has no control over the BAL-004-WECC-1 standards development process. (Could this
have been a typo?) The Drafting Team notes that the terms Operating Reserve – Spinning and Operating Reserve –
Supplemental are currently NERC-defined terms, used in this standard, the definitions for which have been taken directly
from the NERC Glossary without change.
To avoid confusion as to the definitions, WECC will respond to FERC Order 740, at Paragraph 62, and request that the
WECC Operating Committee retire the term “Spinning Reserve” from the WECC Glossary.
Powerex has indicated in its previous comments that WECC should continue
the operating reserves requirements for interruptible imports, as specified
in the current standard (BAL-STD-002-0 - Operating Reserves): WR1.a
Minimum Operating Reserve. Each Balancing Authority shall maintain
minimumOperating Reserve which is the sum of the following:...(iii)
Additional reserve for interruptible imports. An amount of reserve, which
canbe made effective within ten minutes, equal to interruptible imports. It is
the opinion of Powerex that the above requirement should remain in place
until such time that the issue of reserve requirements associated with
interruptible imports is addressed in some way, either through another
standard development process or a regional criteria that specifically
identifies the operating reserves required for interruptible imports. Though
the term “interruptible imports” has never been clearly defined by WECC or
NERC, the language was placed in the standard to differentiate an
interruptible energy product - a product that may be curtailed for ANY
reason, including the lack of sufficient operating reserves to hold the
schedule whole for the scheduling period, from a “Firm” energy product - a
product served by sufficient generating resources that the energy would not
be curtailed during the scheduling period, unless those resources were
depleted as a result of an event that qualified as that for which Contingency
Reserve could be deployed. Removing the requirement from the current

Powerex

Consideration of Comments: BAL-002-WECC-1

29

Organization

Yes or No

Additional Comments
standard could lead to further confusion over the requirement for reserves
associated with interruptible imports. Right now in WECC there exists an
unacceptable lack of clarity with respect to regulation requirements
associated with energy interchange scheduling, and arguably there is no
clear, standardized means of communicating the type of energy product (i.e.
Firm, interruptible, or Unit Contingent) associated with an exchange.
Powerex acknowledges that the Operating Reserve (i.e. Contingency
Reserve) standard alone cannot address these concerns, but we feel it is
premature to eliminate the language until the concerns are addressed via
some other regulatory requirement.

Response:
Removing the requirement to address interruptible power could lead to further confusion. It may be premature to eliminate
the language until the concerns are addressed via some other regulatory requirement.
The Drafting Team notes that the Powerex hypothesis as to the intent of the language may not be accurate because the
language was included in WECC’s MORC document long before energy markets were deregulated.
As to the development of markets, the “5 and 7” Contingency Reserve concept was developed decades ago. In response,
markets developed to match the need. It is anticipated that as the “3 and 3” is implemented, the market will respond
accordingly.
As to clarity of “regulation” requirements, this standard does not address the Regulating Reserve portion of Operating
Reserves. This issue is addressed under NERC’s BAL-001 standard.
The proposed standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing
of the energy codes). The proposed standard does not preclude the continued use of the e-Tag system in any of its
iterations.
By contrast, the proposed standard is designed to address Contingency Reserve obligations and Contingency Reserve
transactions. Further, the proposed standard requires that the seller of Contingency Reserves hold reserves to meet that
obligation. The standard is designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss
of resource to include loss of its own generation or loss of an import. Of note, the remand order did not take issue with the
Consideration of Comments: BAL-002-WECC-1

30

Organization

Yes or No

Additional Comments

associated language as drafted.
As to the use of the undefined term “interruptible load,” the Drafting Team recognized that within WECC the colloquial use
of the phrase is not always implemented in a standardized fashion. To address this concern the Drafting Team opted to
use the defined term “Interruptible Load” contained in the NERC Glossary to avoid any misunderstanding.
Finally, the Drafting Team believes the current methodology cited by Powerex does not add any clarity nor does it have
universal agreement as to its implementation; rather, the existing language is the source of the ambiguity. The Drafting
Team encourages Powerex to initiate a SAR to facilitate addressing Powerex’ concerns.

END OF REPORT

Consideration of Comments: BAL-002-WECC-1

31

Exhibit D

Standard Drafting Team Roster

Team Member Biographies
BAL-002-WECC-2
Contingency Reserve
Exhibit D

Below please find a biographical snapshot for the members of the WECC-0083 BAL002-WECC-2 Contingency Reserve Drafting Team.
Ali Amirali

Inactive

Bart McManus

Mr. McManus received his BSEE degree from the University of
Washington and has been at Bonneville Power Authority (BPA) since
1994. Mr. McManus was the lead programmer for the Automatic
Generation Control (AGC) system for multiple years, before becoming
the lead for AGC and other Balancing Authority Area Operations at BPA.
Mr. McManus began working on wind integration issues in 2006, and
now serves as the wind integration lead for BPA Transmission
Operations.

Ben Williams

Mr. Williams works for Utility System Efficiencies as its senior power
systems engineer, performing consulting work related to electric
transmission planning, operations, and protection. Previously, Mr.
Williams was employed at Pacific Gas and Electric Company as a
transmission planning engineer and supervising power system engineer
in the operations department. Mr. Williams is a member of WECC’s
Operating Committee, and was previously a member of WECC’s
Minimum Operating Reliability Criteria Work Group. Mr. Williams
received a B.S. degree in electrical engineering from Washington State
University in 1996, an MBA from Saint Mary’s College in 2007, and is a
registered professional engineer in California.

Brenda
Anderson

Ms. Anderson has been employed by BPA since 1989. She has served in
positions in scheduling, planning, and marketing prior to the separation of
the merchant and transmission functions. Since the separation, Ms.
Anderson has been an energy trader and policy expert on the BPA
Trading Floor. She has a broad understanding of West Coast markets,
standards, contracts and transmission systems. Since 1997, Ms.
Anderson has been BPA's representative and a very active member of
the Western System Power Pool Agreement (WSPP). BPA also assigned
Ms. Anderson to represent BPA at the WECC, NERC, and North
American Energy Standards Board (NAESB). She is a voting member in
all three.
1

Clyde Loutan

Inactive

David
Frederick

Mr. Frederick is the administrator of the Southwest Reserve Sharing
Group and an employee of Salt River Project, where he has worked
since 1999. He has worked in merchant and reliability departments as a
cost/plant/power production analyst. Mr. Frederick is a NERC-certified
dispatcher in balancing, interchange, and transmission operations; and
holds a B.S. degree in accountancy.

David
Lemmons,
Chair

Mr. Lemmons began his career in the electric industry with Southwestern
Public Service Company (SPS) in Amarillo, Texas, in 1989. He spent
eight years in the rates and regulation department where he performed
rate of return analyses, designed rates and worked with other regulatory
issues.
In 1997, Mr. Lemmons transferred to the energy trading department
during the merger between SPS and Public Service Company of
Colorado (PSCo). In this capacity, with Xcel Energy and its predecessor,
New Century Energies, he analyzed the electric system loads and
resources for day-ahead and real-time operations and trading — working
with generation and fuel procurement to ensure resources were ready
and available to serve loads.
In his current position as senior manager of market operations, Mr.
Lemmons represents Xcel Energy at electric reliability, RTO development
and system operation meetings throughout the United States, as well as
providing support for state and Federal regulatory proceedings. Mr.
Lemmons chairs the WECC-0083 BAL-002-WECC-2 Standard Drafting
Team, the NERC Project 2007-12 Standard Drafting team and is a team
member on the NERC Project 2010-14.1 Standard Drafting Team. He
holds a Master of Science degree in finance and economics from West
Texas A&M University.

Duane
Helderlein

Mr. Helderlein, business development manager, Tri-State Generation
and Transmission Association, Inc., has more than 20 years of electric
utility experience (12 years with Tri-State), six years in environmental
compliance and regulatory permitting, and 14 years in wholesale
electricity marketing and operations. Mr. Helderlein has spent over eight
years in a managerial role that involved real-time marketing, scheduling
and generation dispatch; as well as prescheduling and marketing daily
and short-term wholesale electricity and natural gas commodities. He has
a B.S. in chemistry and an M.B.A.

Gregory Van
Pelt

Mr. Van Pelt is the external affairs manager for the California
Independent System Operator (CAISO). The CAISO is a nonprofit
corporation chartered by the State of California to ensure the reliability of
the state’s electric transmission system, and to facilitate an open-access
2

market to the Bulk Electric System in California.
Mr. Van Pelt has 40 years of involvement in power system operations,
and was part of the original start-up staff at the CAISO. Prior to his
current assignment, his responsibilities included real-time operations,
operations training, outage management, regional coordination and
compliance; as well as developing and coordinating emergency response
actions. Before coming to the CAISO, Mr. Van Pelt spent over 25 years
with the Southern California Edison Company where his responsibilities
were primarily in electric system operations and emergency
management.
John
Marusenko

Mr. Marusenko is a registered professional engineer in British Columbia.
Mr. Marusenko has 18 years of engineering experience leading up to his
current position as system control manager for BC Hydro’s control
center. Mr. Marusenko represents BC Hydro on several WECC work
groups/standard drafting teams, and is the BC Hydro subject matter
expert for the NERC Transmission Operation standards.

John Tolo

Mr. Tolo is currently employed by Tucson Electric Power as director,
system control and reliability, and has been in the utility business for 26
years. Mr. Tolo has held positions in power production and distribution,
transmission, and generation operations. He has memberships in the
NERC Resources Subcommittee, the WECC Performance Work Group,
serves as vice chair of the WECC Operating Committee, chair of the
WECC Joint Guidance Committee, and is a member of the BAL-004WECC-01 and WECC-0068 drafting teams.

Justin Lee

Mr. Lee holds a B.S. degree in electrical engineering from Arizona State
University. Mr. Lee has seven years experience in transmission
operations.

Phil Tice

Mr. Tice, manager wholesale contracts and regulations at Deseret Power
Electric Cooperative, Inc., has more than 40 years of electric utility
experience (20 years with Deseret). Mr. Tice held engineering and
supervisory positions with utilities for 24 years in plant design, operation
and maintenance. Mr. Tice has been engaged in wholesale electricity
marketing and associated Federal regulations for the past 16 years. Mr.
Tice is a past chair of the WECC Market Interface Committee, as well as
Deseret’s voting representative on the WECC Operating Committee.
Education: B.S. in mechanical engineering from Indiana Institute of
Technology in 1970. Mr. Tice is a registered professional engineer
licensed by the State of Pennsylvania.

Robert
Johnson

Mr. Johnson is administrator, Rocky Mountain Reserve Group (RMRG),
and senior operations engineer for Public Service Company of
3

Colorado (PSCo). He manages the generation reserve coordination,
compliance monitoring and reporting, software development, and
training; and is involved in all aspects of administering the RMRG, which
has10 members covering Colorado and Wyoming.
As senior engineer for PSCo, Mr. Johnson prepares advanced
operational analysis to address operational issues and concerns covering
a broad spectrum.
He is a voting member of the WECC Operations Committee, Colorado
Coordinated; the planning group, WECC Operating Procedures Review
Group; the Foothills Planning Group; and the Rocky Mountain Operations
Study Group.
Previously, Mr. Johnson has served on the NERC Compliance and
Certification Committee, WECC Operating Capability Studies Group, and
the NERC Standards Compliance Task Force.
Over the course of his career, Mr. Johnson has written a number of
technical papers for the Institute of Electrical and Electronics
Engineers(IEEE) and Council on Large Electric Systems (CIGRE).
He was manager and supervisor in resource and transmission planning
at the Western Area Power Administration in Golden and Loveland, Colo.
He also managed the operational, resource and transmission planning
group for Western’s RMR Region in Colorado, Wyoming, and portions of
Utah, New Mexico, Nebraska, and Montana. In a separate position,
supervised planning engineers evaluating projects for all of Western’s
Regions. Mr. Johnson served on the NERC Planning Committee and on
numerous WECC technical committees. He also chaired the WECC
Technical Studies Subcommittee, the WECC Operating Capability Study
Group, and was secretary of the WECC Planning Coordination
Committee.

Steven
Johnson

Beforehand, he power system engineer for the Bureau of Reclamation
and Western Area Power.
Mr. Johnson is the reliability/balancing manager for the Western Area
Colorado Missouri (WACM) and Western Area Lower Colorado (WALC)
BAs. He has been in the power industry since 1996. His career began
with Hetch Hetchy Water and Power in Northern California as a power
generation technician. In 2000, Mr. Johnson joined the Western Area
Power Administration in Loveland, Colo. While with Western, Mr.
Johnson has held various positions including transmission scheduling
4

and security dispatcher, reliability coordinator, and reliability/balancing
supervisor. Mr. Johnson also spent some time with WECC as a reliability
coordinator technical lead from 2006-2007.

5

Exhibit E

BAL-002-WECC-2 Violation Severity Level and
Violation Risk Factor Analysis

Violation Risk Factor and Violation Severity Level Justification
BAL-002-WECC-2
Contingency Reserve
Exhibit E

Violation Risk Factor (VRF)
BAL-002-WECC-1 was reviewed by NERC and FERC, resulting in a remand to WECC under
FERC Order 740. 1 The order did not require changes to the Violation Risk Factors; however,
upon review, the drafting team opted to assign each of the Requirements a High VRF.
The WECC-0083 Contingency Reserve Drafting Team used the definitions for VRFs 2 to
determine the VRF for each requirement. Based upon the definitions, the drafting team
assigned a High VRF for all Requirements, because, if violated, these requirements could
directly cause or contribute to Bulk Electric System (BES) instability, separation, or a cascading
sequence of failures, or could place the BES at an unacceptable risk of instability, separation, or
cascading failures.
Violation Severity Level (VSL)

FERC Order 740 did not require changes to the VSLs of BAL-002-WECC-1; however,
as part of the NERC Quality Review of the standard, non-substantive changes were
accepted as was the addition of an “or” statement in the VSL for Requirement R4. The
new VSL table is appended to this Attachment.
In preparing the VSLs for BAL-002-WECC-2, the drafting team used the guidelines
provided in the NERC Violation Severity Level Guidelines (Guidelines). The VSLs as
proposed:

1

FERC Remand Order 740, UNITED STATES OF AMERICA, FEDERAL ENERGY REGULATORY
COMMISSION, 18 CFR Part 40, Docket No. RM09-15-000; Order No. 740, Version One Regional
Reliability Standard for Resource and Demand Balancing, Issued October 21, 2010 (herein after Order
740).
2

http://www.nerc.com/files/Violation_Risk_Factors.pdf

1

•
•
•
•
•
•
•
•
•

specify the responsible entity
are drafted in the past tense
describe the specific noncompliant performance
apply the same VSL to the main body of the Requirement as well as each of the
sub-requirements or “Parts”
are structured in the preferred four-part Lower-to-Severe style
are based on a specific occurrence as opposed to a cumulative number of
violations
describe an increasing degree of non-performance as occurring in percentage
increments (For example, a Lower VSL in Requirement R1 occurs when reserves
are “less than 100% but greater than or equal to 90%.”)
do not represent any “pass or fail” performance; thus, the binary application of a
Severe VSL is not applicable
do not decrease as compared to the previous filing

When developing the VSLs based on the percentage increments, the team concluded
that applying the same percentage to each responsible entity imposed a comparable
burden on each entity due to the comparable size and business structures of the
responsible entities.
(See the attached compliance table for details.)

2

R
R1

R2

Time
Horizon
Real-time
Operations

Real-time
Operations

VRF
High

High

Lower VSL
The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 100% but
greater than or
equal to 90% of
the required
Operating
Reserve–
Spinning amount

Violation Severity Levels
Moderate VSL
High VSL
The Balancing
The Balancing
Authority or the Authority or the
Reserve
Reserve Sharing
Sharing Group
Group that
that incurs one
incurs one Clock
Clock Hour,
Hour, during a
during a
calendar month,
calendar month, in which
in which
Contingency
Contingency
Reserve is less
Reserve is less than 80% but
than 90% but
greater than or
greater than or
equal to 70% of
equal to 80% of the required
the required
Contingency
Contingency
Reserve
Reserve
amount, with the
amount, with the characteristics
characteristics
specified in
specified in
Requirement
Requirement
R1.
R1.
The Balancing
The Balancing
Authority or the
Authority or the
Reserve
Reserve
Sharing Group
Sharing Group
that incurs one
that incurs one
Clock Hour,
Clock Hour,
during a
during a
calendar month, calendar
in which
month, in which
Contingency
Contingency
Reserve
Reserve
Operating
Operating
Reserve Reserve Spinning is less
Spinning is less
than 90% but
than 80% but
greater than or
greater than or
equal to 80% of
equal to 70% of
the required
the required
Operating
Operating
Reserve–
Reserve–
3

Severe VSL
The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.
The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
required
Operating
Reserve–
Spinning
amount

R

Time
Horizon

VRF

R3

Real-time
Operations

High

R4

Real-time
Operations

High

Violation Severity Levels
Lower VSL
Moderate VSL
High VSL
specified in
Spinning
Spinning
Requirement R2, amount
amount
and both
specified in
specified in
characteristics
Requirement
Requirement
were met.
R2, and both
R2, and both
characteristics
characteristics
were met.
were met.
The Balancing
The Balancing
The Balancing
Authority or the
Authority or the
Authority or the
Reserve Sharing Reserve
Reserve
Group that
Sharing Group
Sharing Group
incurs one hour, that incurs one
that incurs one
during a
hour, during a
hour, during a
calendar month, calendar month, calendar
in which
in which
month, in which
Contingency
Contingency
Contingency
Reserve is less
Reserve is less
Reserve is less
than 100% but
than 90% but
than 80% but
greater than or
greater than or
greater than or
equal to 90% of
equal to 80% of
equal to 70% of
the required
the required
the required
Operating
Operating
Operating
Reserve amount Reserve
Reserve
specified in
amount
amount
Requirement R3. specified in
specified in
Requirement
Requirement
R3.
R3.
The Balancing
The Balancing
The Balancing
Authority or the
Authority or the
Authority or the
Reserve Sharing Reserve
Reserve
Group that
Sharing Group
Sharing Group
incurs one hour, that incurs one
that incurs one
during a
hour, during a
hour, during a
calendar month, calendar month, calendar
in which
in which
month, in which
Contingency
Contingency
Contingency
Reserve
Reserve
Reserve
Operating
Operating
Operating
Reserve is less
Reserve is less
Reserve is less
than 100% but
than 90% but
than 80% but
greater than or
greater than or
greater than or
equal to 90% of
equal to 80% of
equal to 70% of
the required
the required
the required
Operating
Operating
Operating
4

Severe VSL
specified in
Requirement
R2, and both
characteristics
were met.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount

R

Time
Horizon

VRF
Lower VSL
Reserve amount
specified in
Requirement R4.

Violation Severity Levels
Moderate VSL
High VSL
Reserve
Reserve
amount
amount
specified in
specified in
Requirement
Requirement
R4.
R4.

5

Severe VSL
specified in
Requirement
R4.

Exhibit F

Implementation Plan for the Proposed Standard

Implementation Plan
BAL-002-WECC-2
Contingency Reserve
Exhibit F
Standards Authorization Request
http://www.wecc.biz/Standards/Development/Lists/Request%20Form/DispForm.as
px?ID=83&Source=/Standards/Development
Approvals Required
BAL-002-WECC-2
Contingency Reserve
Prerequisite Approvals
On May 18, 2012, the WECC Ballot Pool approved the standard during the April 2,
2012, through May 18, 2012, ballot window. Results of that ballot can be found here. A
summary of those results follows.
Ballot Name:
Ballot Period:
Total # Votes:
Total Ballot Pool:
Quorum:
Weighted Sector
Vote:
Ballot Results:

BAL-002-WECC-2 Modification to BAL-002-WECC-1
Contingency Reserve
4/2/2012 - 5/18/2012
158
174
90.8%
80.6%
The standard has passed

On May 21, 2012, the WECC Standards Committee approved forwarding the standard
to the WECC Board of Directors. A summary of that approval follows.
Name

Organization

Sector

Angela Small
Crystal

NAES
Proven

2 Generation
8 Other Non-

Yes

X
X

No

Abstain

A vote
was
not
cast

Musselman
Dana
Cabbell
Gregory
Maxfield
Jerry Murray

John Meyer

Joseph
Tarantino
Glen
Hoisington
Rick Noger

Compliance
Solutions
Southern
California
Edison
PacifiCorp
Oregon
Public Utility
Commission
Non-Affiliate
Director /
WSC Chair
Sacramento
Municipal
Utility District
FEUS
Praxair

Registered
Entities
1 Transmission

3 Marketers and
Brokers
7 State and
Provincial
Representatives
Board

5 System
Coordination

X

X
X

X

X

4 Distribution
6 End User
Representative
Sector

X
X

On June 26, 2012, the WECC Board of Directors approved the standard during the
WECC June 2012 Board meeting. The WECC Board of Directors voting summary can
be found here.
Applicable Entities
Balancing Authority
Reserve Sharing Group
Conforming Changes to Other Standards
None required as BAL-002-WECC-2 is designed to modify BAL-002-WECC-1 in
accordance with FERC Order 740, and to replace BAL-STD-002-0 upon the Effective
Date of BAL-002-WECC-2.
Effective Date
On the first day of the third quarter, after receipt of applicable regulatory approval.

Justification of Effective Date
BAL-002-WECC-2 may require execution of contracts by some entities before
implementation can occur. In response to comments and requests from the field, the
drafting team opted for the above Effective Date as a means to allow applicable entities
to finalize needed contracts.
Consideration of Early Compliance
BAL-002-WECC-2 predominately addresses the types and amounts of Contingency
Reserve required of the applicable entities, based upon three percent of load and three
percent of generation. Should the applicable entities opt for early compliance, there is
no empirical evidence suggesting a decrease in reliability as the amount of Contingency
Reserve required under the proposed standard approximates the amount of
Contingency Reserve already being maintained.
Retirements
BAL-002-WECC-2 is designed to modify BAL-002-WECC-1 in accordance with FERC
Order 740, and to replace BAL-STD-002-0 upon the Effective Date of BAL-002-WECC2.

Exhibit H

BAL-002-WECC-2 Redline to WECC BAL-STD-002-0 and
BAL-002-WECC-2 Redline to BAL-002-WECC-1

WECC Standard BAL-STD-002-0 – Operating Reserves – Attachment B2
A. A. Introduction

1. 1. Title:

Operating Reserves

2. 2. Number:
3. 3. Purpose:

Contingency Reserve

BAL-STD-002-0WECC-2
Regional Reliability Standard to addressTo specify the
Operatingquantity and types of Contingency Reserve
requirements of the Western Interconnectionrequired to
ensure reliability under normal and abnormal
conditions.

4. 4. Applicability:
4.1

4.1.1 This criterion applies to each Responsible Entity that is
(i) a Balancing Authority or a

.
4.1.1. The Balancing Authority is the responsible entity
unless the Balancing Authority is a member of a
Reserve Sharing Group that does not designate its ,
in which case, the Reserve Sharing Group as its
agent, or (ii) a becomes the responsible entity.
4.2

Reserve Sharing Group. A Responsible Entity that is a
Balancing Authority and a member of a
4.2.1. The Reserve Sharing Group is subject to this
criterion only as described in Section A.4.1.2. A
Responsible Entity that is a member of awhen
comprised of a Source Balancing Authority
becomes the source Reserve Sharing Group is
not subject to this criterion on an individual basis.
4.1.2 Responsible Entities that are members of a.2. The
Reserve Sharing Group may designate in writing to
WECC a Responsible Entity to act as agent for
purposes of this criterion for each suchwhen
comprised of a Sink Balancing Authority
becomes the sink Reserve Sharing Group. Such

5. Effective Date:

On the first day of the third quarter following applicable
regulatory approval.

B. Requirements and Measures
R1. Each Balancing Authority and each Reserve Sharing Group agents shall be
responsible for all data submission requirements under Section Dmaintain a minimum
amount of Contingency Reserve, except within the first sixty minutes
following an event requiring the activation of this Reliability Agreement. Unless
aContingency Reserve, that is: [Violation Risk Factor: High] [Time

Horizon: Real-time operations]
1.1 The greater of either:



The amount of Contingency Reserve equal to the loss of
the most severe single contingency;
The amount of Contingency Reserve equal to the sum of
three percent of hourly integrated Load plus three percent
of hourly integrated generation.

1.2 Comprised of any combination of the reserve types specified below:









Operating Reserve – Spinning
Operating Reserve - Supplemental
Interchange Transactions designated by the Source
Balancing Authority as Operating Reserve – Supplemental
Reserve held by other entities by agreement that is
deliverable on Firm Transmission Service
A resource, other than generation or load, that can provide
energy or reduce energy consumption
Load, including demand response resources, DemandSide Management resources, Direct Control Load
Management, Interruptible Load or Interruptible Demand,
or any other Load made available for curtailment by the
Balancing Authority or the Reserve Sharing Group agent via
contract or agreement.
All other load, not identified above, once the Reliability
Coordinator has declared an energy emergency alert
signifying that firm load interruption is imminent or in
progress.

1.3 Based on real-time hourly load and generating energy values
averaged over each Clock Hour (excluding Qualifying Facilities
covered in 18 C.F.R.§ 292.101, as addressed in FERC Opinion 464).
1.4 An amount of capacity from a resource that is deployable within ten
minutes.
M1.

Each Balancing Authority and each Reserve Sharing Group will have
documentation demonstrating its Contingency Reserve was maintained,
except within the first sixty minutes following an event requiring the
activation of Contingency Reserve.
Part 1.1
Each Balancing Authority and each Reserve Sharing Group will have
dated documentation that demonstrates its Contingency Reserve was
maintained in accordance with the amounts identified in Requirement R1,
Part 1.1, except within the first sixty minutes following an event requiring
the activation of Contingency Reserve.
Attachment A is a practical illustration showing how the generation amount
may be calculated under Requirement R1.



Where Dynamic Schedules are used as part of the generation
amount upon which Contingency Reserve is predicated, additional
evidence of compliance with Requirement R1, Part 1.1 may
include, but is not limited to, documentation showing a reciprocal
acknowledgement as to which entity is carrying the reserves. This
transfer may be all or some portion of the physical generator and
is not limited to the entire physical capability of the generator.



Where Pseudo-Ties are used as part of the generation amount
upon which Contingency Reserve is predicated, additional
evidence of compliance with Requirement R1, Part 1.1, may
include, but is not limited to, documentation accounting for the
transfers included in the Pseudo-Ties.

Part 1.2
Each Balancing Authority and each Reserve Sharing Group will have
dated documentation that demonstrates compliance with Requirement R1,
Part 1.2. Evidence may include, but is not limited to, documentation that
reserves were comprised of the types listed in Requirement R1, Part 1.2
for purposes of meeting the Contingency Reserve obligation of
Requirement R1. Additionally, for purposes of the last bullet of
Requirement R1, Part 1.2, evidence of compliance may include, but is not
limited to, documentation that the reliability coordinator had issued an
energy emergency alert, indicating that firm Load interruption was
imminent or was in progress.
Part 1.3
Each Balancing Authority and each Reserve Sharing Group will have
dated documentation that demonstrates compliance with Requirement
R1, Part 1.3. Evidence of compliance with Requirement R1, Part 1.3 may
include, but is not limited to, documentation that Contingency Reserve
amounts are based upon load and generating data averaged over each
Clock Hour and excludes Qualifying Facilities covered in 18 C.F.R.§
292.101, as addressed in FERC Opinion 464.
Part 1.4
Evidence of compliance with Requirement R1, Part 1.4 may include, but
is not limited to, documentation that the reserves maintained to comply
with Requirement R1, Part 1.4 are fully deployable within ten minutes.
R2.

Each Balancing Authority and each Reserve Sharing Group shall maintain
at least half of its minimum amount of Contingency Reserve identified in
Requirement R1, as Operating Reserve – Spinning that meets both of the
following reserve characteristics. [Violation Risk Factor: High] [Time
Horizon: Real-time operations]
2.1

Reserve that is immediately and automatically responsive to
frequency deviations through the action of a governor or other
control system;

2.2

Reserve that is capable of fully responding within ten minutes.

M2.

Each Balancing Authority and each Reserve Sharing Group will have
dated documentation that demonstrates it maintained at least half of the
Contingency Reserve identified in Requirement R1 as Operating Reserve
– Spinning, averaged over each Clock Hour, that met both of the reserve
characteristics identified in Requirement R2, Part 2.1 and Requirement
R2, Part 2.2.

R3.

Each Sink Balancing Authority and each sink Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve in Requirement R1, equal to the amount of
Operating Reserve–Supplemental for any Interchange Transaction
designated as part of the Source Balancing Authority’s Operating
Reserve–Supplemental or source Reserve Sharing Group’s Operating
Reserve–Supplemental, except within the first sixty minutes following an
event requiring the activation of Contingency Reserve. [Violation Risk
Factor: High] [Time Horizon: Real-time operations]

M3.

Each Sink Balancing Authority and each sink Reserve Sharing Group will
have dated documentation demonstrating it maintained an amount of
Operating Reserve, in addition to the Contingency Reserve identified in
Requirement R1, equal to the amount of Operating Reserve–
Supplemental for any Interchange Transaction designated as part of the
Source Balancing Authority’s Operating Reserve–Supplemental or source
Reserve Sharing Group’s Operating Reserve–Supplemental, for the entire
period of the transaction, except within the first sixty minutes following an
event requiring the activation of Contingency Reserves, in accordance with
Requirement 3.

R4.

Each Source Balancing Authority and each source Reserve Sharing Group
shall maintain an amount of Operating Reserve, in addition to the
minimum Contingency Reserve amounts identified in Requirement R1,
equal to the amount and type of Operating Reserves for any Operating
Reserve transactions for which it is the Source Balancing Authority or
source Reserve Sharing Group. [Violation Risk Factor: High] [Time
Horizon: Real-time operations]

M4.

Each Source Balancing Authority and each source Reserve Sharing Group
will have dated documentation that demonstrates it maintained an amount
of additional Operating Reserves identified in Requirement R1, greater
than or equal to the amount and type of that identified in Requirement 4,
for the entire period of the transaction.

C. Compliance
1. Compliance Monitoring Process
1.1

Compliance Enforcement Authority

For entities that do not work for the Regional Entity, the Regional
Entity shall serve as the Compliance Enforcement Authority.
For Reliability Coordinators and other functional entities that work for
their Regional Entity, the ERO or a Regional Entity approved by the
ERO and FERC or other applicable governmental authorities shall
serve as the Compliance Enforcement Authority.
For responsible entities that are also Regional Entities, the ERO or a
Regional Entity approved by the ERO and FERC or other applicable
governmental authorities shall serve as the Compliance Enforcement
Authority.
1.2

Compliance Monitoring and Assessment Processes:
Compliance Audit
Self-Certification
Spot Checking
Compliance Investigation
Self-Reporting
Complaint

1.3

Evidence Retention
The following evidence retention periods identify the period of time an
entity is required to retain specific evidence to demonstrate
compliance. For instances where the evidence retention period
specified below is shorter than the time since the last audit, the
Compliance Enforcement Authority may ask an entity to provide other
evidence to show that it was compliant for the full time period since
the last audit.
Each Balancing Authority and each Reserve Sharing Group shall
keep evidence for Requirement R1 through R4 for three years plus
calendar current.

1.4.

Additional Compliance Information
1.4.1. This Standard shall apply to each Balancing Authority and
each Reserve Sharing Group that has registered with WECC
as provided in Part 1.4.2 of Section C.
Each Balancing Authority identified in the registration with
WECC as provided in Part 1.4.2 of Section C shall be
responsible for compliance with this Standard through its
participation in the Reserve Sharing Group and not on an
individual basis.
1.4.2. A Reserve Sharing Group may register as the Responsible
Entity for purposes of compliance with this Standard by
providing written notice to the WECC: 1) indicating that the

Reserve Sharing Group is registering as the Responsible
Entity for purposes of compliance with this Standard, 2)
identifying each Balancing Authority that is a member of the
Reserve Sharing Group, and 3) identifying the person or
organization that will serve as agent on behalf of the Reserve
Sharing Group for purposes of communications and data
submissions related to or required by this Standard.
1.4.3. If an agent properly designated in accordance with Part 1.4.2
of Section C identifies individual Responsible EntitiesBalancing
Authorities within the Reserve Sharing Group responsible for
noncompliance at the time of data submission,
sanctionstogether with the percentage of responsibility
attributable to each identified Balancing Authority, then, except
as may otherwise be finally determined through a duly
conducted review or appeal of the initial finding of
noncompliance: 1) any penalties assessed for noncompliance
by the Reserve Sharing Group shall be allocated to the
individual Balancing Authorities identified in the applicable
data submission in proportion to their respective percentages
of responsibility as specified in the data submission, 2) each
Balancing Authority shall be solely responsible for all penalties
allocated to it according to its percentage of responsibility as
provided in subsection 1) of this Part 1.4.3 of Section C, and 3)
neither the Reserve Sharing Group nor any member of the
Reserve Sharing Group shall be responsible for any portion of
a penalty assessed against another member of the Reserve
Sharing Group in accordance with subsection 1) of this Part
1.4.3 of Section C (even if the member of Reserve Sharing
Group against which the penalty is assessed is not subject to
or otherwise fails to pay its allocated share of the penalty).
1.4.4. If an agent properly designated in accordance with Part 1.4.2
of Section C fails to identify individual Balancing Authorities
within the Reserve Sharing Group responsible for
noncompliance at the time of data submission or fails to
specify percentages of responsibility attributable to each
identified Balancing Authority, any penalties for noncompliance
shall be assessed against the agent on behalf of the Reserve
Sharing Group, and it shall be the responsibility of the
members of the Reserve Sharing Group to allocate
responsibility for such noncompliance. If a Responsible Entity
that is a member of a Reserve Sharing Group does not designate in
writing to WECC a Responsible Entity to act as agent for purposes of
this criterion for each such Reserve Sharing Group, such Responsible
Entity shall be subject to this criterion on an individual basis.
5. Effective Date: This Western Electricity Coordinating Council Regional Reliability
Standard will be effective when approved by the Federal Energy Regulatory
Commission under Section 215 of the Federal Power Act. This Regional Reliability
Standard shall be in effect for one year from the date of Commission approval or until
a North American Standard or a revised Western Electricity Coordinating Council
Regional Reliability Standard goes into place, whichever occurs first. At no time shall

this regional Standard be enforced in addition to a similar North American Standard.
B.
Requirements
WR1.
The reliable operation of the interconnected power system requires that
adequate generating capacity be available at all times to maintain scheduled
frequency and avoid loss of firm load following transmission or generation
contingencies. This generating capacity is necessary to:
! supply requirements for load variations.
! replace generating capacity and energy lost due to forced outages of
generation or transmission equipment.
! meet on-demand obligations.
Page 1 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
! replace energy lost due to curtailment of interruptible imports.
a. Minimum Operating Reserve. Each.4.5.
Any Balancing Authority
shall maintain minimum
Operating Reserve which that is the suma member of the following:
(i) Regulating reserve. Sufficient Spinning Reserve, immediately
responsive to Automatic Generation Control (AGC) to provide sufficient
regulating margin to allow the Balancing Authority to meet NERC’s
Control Performance Criteria (see BAL-001-0).
(ii) Contingency reserve. An amount of Spinning Reserve and Nonspinning
Reserve (at least half of which must be Spinning Reserve), sufficient to
meet the NERC Disturbance Control Standard BAL-002-0, equal to the
greater of:
(a) The loss of generating capacity due to forced outages of
generation or transmission equipment that would result from the
most severe single contingency; or
(b) The sum of five percent of the load responsibility served by hydro
generation and seven percent of the load responsibility served by
thermal generation.
The combined unit ramp rate of each Balancing Authority’s on-line,
unloaded generating capacity must be capable of responding to the
Spinning Reserve requirement of that Balancing Authority within ten
minutes
(iii) Additional reserve for interruptible imports. An amount of reserve,
which can be made effective within ten minutes, equal to interruptible
imports.
(iv) Additional reserve for on-demand obligations. An amount of reserve,
which can be made effective within ten minutes, equal to on-demand
obligations to other entities or Balancing Authorities.
b. Acceptable types of Nonspinning Reserve. The Nonspinning Reserve
obligations identified in subsections a(ii), a(iii), and a(iv), if any, can be
met by use of the following:
(i)

interruptible load;

(ii) interruptible exports;
(iii) on-demand rights from other entities or Balancing Authorities;
(iv) Spinning Reserve in excess of requirements in subsections a(i) and a(ii);
or
(v) off-line generation which qualifies as Nonspinning Reserve.
c.

Knowledge of Operating Reserve. Operating Reserves shall be

calculated such that the amount available which can be fully activated in
the next ten minutes will be known at all times.

Page 2 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
d.

Restoration of Operating Reserve. After the occurrence of any event
necessitating the use of Operating Reserve, that reserve shall be restored
as promptly as practicable. The time taken to restore reserves shall not
exceed 60 minutes (Source: WECC Criterion)

C. Measures
WM1.

Except within the first 60 minutes following an event requiring the activation of
Operating Reserves, a Responsible Entity identified in Section A.4 must
maintain 100% of required Operating Reserve levels based upon data averaged
over each clock hour. Following every event requiring the activation of
Operating Reserves, a Responsible Entity identified in Section A.4 must reestablish the required Operating Reserve levels within 60 minutes. (Source:
Compliance Standard)
D. Compliance
1. Compliance Monitoring Process
1.1

Compliance Monitoring Responsibility
Western Electricity Coordinating Council (WECC)

1.2

Compliance Monitoring Period

At Occurrence and Quarterly
By no later than 5:00 p.m. Mountain Time on the first Business Day
following the day on which an instance of non-compliance occurs (or such
other date specified in Form A.1(a)), the Responsible Entities identified in
SectionA.4 shall submit to the WECC office Operating Reserve data in
Form A.1(a) (available on the WECC web site) for each such instance of
non-compliance. On or before the tenth day of each calendar quarter (or
such other date specified in Form A.1(b)), the Responsible Entities
identified in Section A.4 (including Responsible Entities with no reported
instances of non-compliance) shall submit to the WECC office a completed
Operating Reserve summary compliance Form A.1(b) (available on
the WECC web site) for the immediately preceding calendar quarter.
1.3

Data Retention

Data will be retained in electronic form for at least one year. The retention
period will be evaluated before expiration of one year to determine if a
longer retention period is necessary. If the data is being reviewed to
address a question of compliance, the data will be saved beyond the
normal retention period until the question is formally resolved. (Source:
NERC Language)
1.4.

Additional Compliance Information

For purposes of applying the sanctions specified in Sanction Table for
violations of this criterion, the “Sanction Measure” is Average Generation
and the “Specified Period” is the most recent calendar month.(Source:
Sanctions)

2. Levels of Non-Compliance
Sanction Measure: Average Generation

Page 3 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
2.1. Level 1: There shall be a Level 1 non-compliance if any of the
following conditions exist:
2.1.1 One instance during a calendar month in which the Balancing
Authority’s or the Reserve Sharing Group’s Operating Reserve is less
thanGroup that has failed to register as provided in Part 1.4.2 of
Section C shall be subject to this Standard on an individual
basis.
100% but greater than or equal to 90% of the required Operating Reserve.
2.2. Level 2: There shall be a Level 2 non-compliance if any of the
following conditions exist:
2.2.1 One instance during a calendar month in which the Balancing
Authority’s or the Reserve Sharing Group’s Operating Reserve is less
than
90% but greater than or equal to 80% of the required Operating Reserve.
2.3. Level 3: There shall be a Level 3 non-compliance if any of the
following conditions exist:
2.3.1 One instance during a calendar month in which the Balancing
Authority’s or the Reserve Sharing Group’s Operating Reserve is less
than
80% but greater than or equal to 70% of the required Operating Reserve.
2.4. Level 4: There shall be a Level 4 non-compliance if any of the
following conditions exist:
2.4.1 One instance during a calendar month in which the Balancing
Authority’s or the Reserve Sharing Group’s Operating Reserve is
less than 70% of
the required Operating Reserve.
E. Regional Differences
Version History – Shows Approval History and Summary of Changes in the Action
Field

Table of Compliance Elements

Versi
onR

DateTime

ActionV

Horizon

RF

Merged Cells

Change TrackingViolation Severity Levels

Merged Cells
Merged Cells

Lower VSL

Moderate VSL

High VSL

Severe VSL

R1

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.

R2

Real-time
Operations

High

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one Clock that incurs one
Hour, during a
Clock Hour,
calendar month, during a
in which
calendar month,
Contingency
in which
Reserve
Contingency
Operating
Reserve
Reserve Operating
Spinning is less
Reserve than 100% but
Spinning is less
greater than or
than 90% but
equal to 90% of
greater than or
the required
equal to 80% of
Operating
the required
Reserve–
Operating
Spinning amount Reserve–
specified in
Spinning

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve–
Spinning

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
required
Operating
Reserve–
Spinning
amount
specified in

Versi
onR

DateTime

ActionV

Horizon

RF

Merged Cells

Change TrackingViolation Severity Levels

Merged Cells
Merged Cells

Lower VSL
Requirement R2,
and both
characteristics
were met.

Moderate VSL
amount
specified in
Requirement
R2, and both
characteristics
were met.

High VSL

Severe VSL

amount
specified in
Requirement
R2, and both
characteristics
were met.

Requirement
R2, and both
characteristics
were met.

R3

Real-time
Operations

High

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R3. specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R3.

R4

Real-time
Operations

High

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve
Reserve
Operating
Operating
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R4. specified in
Requirement

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R4.

Versi
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DateTime

ActionV

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RF

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Change TrackingViolation Severity Levels

Merged Cells
Merged Cells

Lower VSL

Moderate VSL
R4.

Page 4 of 9

High VSL
R4.

Severe VSL

WECC Standard BAL-STD-002-0 – Operating Reserves

Sanction Table
Sanctions for non-compliance with respect to each criterion in Section B Requirements
shall be assessed pursuant to the following table. All monetary sanctions shall also
include sending of Letter (B).

Level of Noncompliance
Level 1

Number of Occurrences at a Given Level within Specified Period
1
2
3
4 or more
Letter (A)

Letter (B)

Higher of $1,000
or $1 per MW of
Sanction Measure

Level 2

Letter (B)

Higher of $1,000
or $1 per MW of
Sanction Measure

Higher of $2,000
or $2 per MW of
Sanction Measure

Level 3

Higher of $1,000 Higher of $2,000
or $1 per MW of or $2 per MW of
Sanction Measure Sanction Measure

Higher of $4,000
or $4 per MW of
Sanction Measure

Level 4

Higher of $2,000 Higher of $4,000
or $2 per MW of or $4 per MW of
Sanction Measure Sanction Measure

Higher of $6,000
or $6 per MW of
Sanction Measure

Higher of $2,000
or $2 per MW of
Sanction
Measure
Higher of $4,000
or $4 per MW of
Sanction
Measure
Higher of $6,000
or $6 per MW of
Sanction
Measure
Higher of
$10,000 or $10
per MW of
Sanction
Measure

Letter (A):
Letter to Responsible Entity’s Chief Executive Officer informing the
Responsible Entity of noncompliance with copies to NERC, WECC Member
Representative, and WECC Operating Committee Representative1.
Letter (B):
Identical to Letter (A), with additional copies to (i) Chairman of the Board
of Responsible Entity (if different from Chief Executive Officer), and to (ii) state or
provincial regulatory agencies with jurisdiction over Responsible Entity, and, in the case
of U.S. entities, FERC, and Department of Energy, if such government entities request
such information.
The “Specified Period” and the “Sanction Measure” are as specified in Section D1.4 for
each criterion.
Sanctions shall be assessed for all instances of non-compliance within a Specified Period.
For example, if a Responsible Entity had two instances of Level 1 non-compliance and
1

Copies of Letter A and Letter B will be sent to WECC Member Representative and
WECC Operating Committee Representative when the Generator Operator is a
WECC member.

Page 5 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
one instance of Level 3 non-compliance for a specific criterion in the first Specified
Period, it would be assessed the sanction from Column 2 of the Level 1 row, and the
sanction from Column 1 of the Level 3 row.
If the Responsible Entity fails to comply with a given criterion for two or more
consecutive Specified Periods, the sanctions assessed at each level of noncompliance for
the most recent Specified Period shall be the sanction specified in the column
immediately to the right of the indicated sanction. For example, if a Responsible Entity
fails to comply with a given criterion for two consecutive Specified Periods, and in the
second Specified Period the Responsible Entity has one instance of Level 1
non-compliance and two instances of Level 3 non-compliance, it would be assessed the
sanction from Column 2 of the Level 1 row, and the sanction from Column 3 of the
Level 3 row. If the sanction assessed at the highest level is the sanction in Column 4, no
such modification of the specified sanction shall occur.

DEFINITIONS
Unless the context requires otherwise, all capitalized terms shall have the meanings
assigned in this Standard and as set out below:
Area Control Error or ACE means the instantaneous difference between net actual and
scheduled interchange, taking into account the effects of Frequency Bias including
correction for meter error.
Automatic Generation Control or AGC means equipment that automatically adjusts a
Control Area’s generation from a central location to maintain its interchange schedule
plus Frequency Bias.
Average Generation means the total MWh generated within the Balancing Authority
Operator’s Balancing Authority Area during the prior year divided by 8760 hours (8784
hours if the prior year had 366 days).
Business Day means any day other than Saturday, Sunday, or a legal public holiday as
designated in section 6103 of title 5, U.S. Code.
Disturbance means (i) any perturbation to the electric system, or (ii) the unexpected
change in ACE that is caused by the sudden loss of generation or interruption of load.
Extraordinary Contingency shall have the meaning set out in Excuse of Performance,
section B.4.c.

Page 6 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
Frequency Bias means a value, usually given in megawatts per 0.1 Hertz, associated
with a Control Area that relates the difference between scheduled and actual frequency to
the amount of generation required to correct the difference.
Nonspinning Reserve means that Operating Reserve not connected to the system but
capable of serving demand within a specified time, or interruptible load that can be
removed from the system in a specified time.
Operating Reserve means that capability above firm system demand required to provide
for regulation, load-forecasting error, equipment forced and scheduled outages and local
area protection. Operating Reserve consists of Spinning Reserve and Nonspinning
Reserve.
Spinning Reserve means unloaded generation which is synchronized and ready to serve
additional demand. It consists of Regulating reserve and Contingency reserve (as each
are described in Sections B.a.i and ii).

EXCUSE OF PERFORMANCE
A.

Excused Non-Compliance
Non-compliance with any of the reliability criteria contained in this
Standard shall be excused and no sanction applied if such non-compliance
results directly from one or more of the actions or events listed below.

B.

Specific Excuses
1.

Governmental Order
The Reliability Entity’s compliance with or action under any
applicable law or regulation or other legal obligation related
thereto or any curtailment, order, regulation or restriction imposed
by any governmental authority (other than the Reliability Entity, if
the Reliability Entity is a municipal corporation or a federal, state,
or provincial governmental entity or subdivision thereof).

2.

Order of Reliability Coordinator
The Reliability Entity’s compliance or reasonable effort to comply
with any instruction, directive, order or suggested action (“Security
Order”) by the WECC Reliability Coordinator for the WECC subregion within which the Reliability Entity is operating, provided
that the need for such Security Order was not due to the Reliability
Entity’s non-compliance with (a) the WECC Reliability Criteria
for Transmission System Planning, (b) the WECC Power Supply

Page 7 of 9

WECC Standard BAL-STD-002-0 – Operating Reserves
Design Criteria, (c) the WECC Minimum Operating Reliability
Criteria, or (d) any other WECC reliability criterion, policy or
procedure then in effect (collectively, “WECC Reliability
Standards”), and provided further that the Reliability Entity in
complying or attempting to comply with such Security Order has
taken all reasonable measures to minimize Reliability Entity’s noncompliance with the reliability criteria.

3.

Protection of Facilities
Any action taken or not taken by the Reliability Entity which, in
the reasonable judgment of the Reliability Entity, was necessary to
protect the operation, performance, integrity, reliability or stability
of the Reliability Entity’s computer system, electric system
(including transmission and generating facilities), or any electric
system with which the Reliability Entity’s electric system is
interconnected, whether such action occurs automatically or
manually; provided that the need for such action or inaction was
not due to Reliability Entity’s non-compliance with any WECC
Reliability Standard and provided further that Reliability Entity
could not have avoided the need for such action or inaction
through reasonable efforts taken in a timely manner. Reasonable
efforts shall include shedding load, disconnecting facilities,
altering generation patterns or schedules on the transmission
system, or purchasing energy or capacity, except to the extent that
the Reliability Entity demonstrates to the WECC Staff and/or the
RCC that in the particular circumstances such action would have
been unreasonable.

4.

Extraordinary Contingency
a.

Any Extraordinary Contingency (as defined in subsection
c); provided that this provision shall apply only to the
extent and for the duration that the Extraordinary
Contingency actually and reasonably prevented the
Reliability Entity from complying with any applicable
reliability criteria; and provided further that Reliability
Entity took all reasonable efforts in a timely manner to
mitigate the effects of the Extraordinary Contingency and
to resume full compliance with all applicable reliability
criteria contained in this Reliability Agreement.
Reasonable efforts shall include shedding load,
disconnecting facilities, altering generation patterns or
schedules on the transmission system, or purchasing energy
or capacity, except to the extent that the Reliability Entity

Page 8 of 9

WECC Standard BAL-002-WECC-2 — Contingency Reserve
WECC Standard BAL-STD-002-0 – Operating Reserves
demonstrates to the WECC Staff and/or the RCC that in the particular
circumstances such action would have been unreasonable. Reasonable
efforts shall not include the settlement of any strike, lockout or labor
dispute.

5.

b.

Any Reliability Entity whose compliance is prevented by an
Extraordinary Contingency shall immediately notify the WECC of
such contingency and shall report daily or at such other interval
prescribed by the WECC the efforts being undertaken to mitigate the
effects of such contingency and to bring the Reliability Entity back
into full compliance.

c.

An Extraordinary Contingency means any act of God, actions by a
non-affiliated third party, labor disturbance, act of the public enemy,
war, insurrection, riot, fire, storm or flood, earthquake, explosion,
accident to or breakage,
failure or malfunction of machinery or equipment, or any other cause
beyond the Reliability Entity’s reasonable control; provided that
prudent industry standards (e.g., maintenance, design, operation) have
been employed; and provided further that no act or cause shall be
considered an Extraordinary Contingency if such act or cause results
in any contingency contemplated in any WECC Reliability Standard
(e.g., the “Most Severe Single Contingency” as defined in the WECC
Reliability Criteria or any lesser contingency).

Participation in Field Testing
Any action taken or not taken by the Reliability Entity in conjunction with the
Reliability Entity’s involvement in the field testing (as approved by either the
WECC Operating Committee or the WECC Planning Coordination
Committee) of a new reliability criterion or a revision to an existing reliability
criterion where such action or non-action causes the Reliability Entity’s noncompliance with the reliability criterion to be replaced or revised by the
criterion being field tested; provided that Reliability Entity’s non- compliance
is the result of Reliability Entity’s reasonable efforts to participate in the field
testing.

20

WECC Standard BAL-002-WECC-2 — Contingency Reserve

Page 9 of 9D. Regional Variances
None.
E. Interpretations
None.
F. Associated Documents
None.

21

WECC Standard BAL-002-WECC-2 — Contingency Reserve
Attachment A
Attachment A is illustrative only; it is not a requirement. Requirement R1 calls for an amount
of Contingency Reserve to be maintained, predicated on an amount of generation and load
required in Requirement R1, Part 1.1., specifically:
“1.1 The greater of either:



The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.”

Attachment A illustrates one possible way to account for and calculate the amount of
generation upon which the Contingency Reserve amount is predicated.
Below is a practical illustration showing how the generation amount may be calculated under
Requirement R1 for Balancing Authorities (BA) and Reserve Sharing Groups (RSG).
BA1 / RSG 1

Generation

Generator 1
Generator 2
Generator 3 (Pseudo-Tied out to BA2)
Generator 4 QF (has backup contract)
Generator 5 QF in EMS
Generator 6

300 MWs online
200 MWs online
100 MWs online
10 MWs online
10 MWs online
0 MWs online

Part of Generator
Yes
Yes
No
No
Yes
Yes

Dynamic Schedule to BA2 from BA11

(50 MWs)

Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

620 MWs
(The sum of gen 1-6)
510 MWs
(The sum of gen 1, 2, and 5)
460 MWs** (The sum of gen 1, 2 and 5
minus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would maintain reserves based on 510 MWs Generation.

BA2 / RSG2
Generator 11
1

Generation

Part of Generator

100 MWs

Yes

Note: This Dynamic Schedule is not the same as the Generator 3 Pseudo-Tie.

22

WECC Standard BAL-002-WECC-2 — Contingency Reserve
Generator 12
Generator 3 (Pseudo-Tied in from BA1)
Dynamic Schedule from BA1 to BA2
Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

100 MWs
100 MWs

Yes
Yes

50 MWs

Yes

300 MWs
(The sum of gen 11, 12 and 3.)
300 MWs
(The sum of gen 11, 12 and 3)
350 MWs** (The sum of gen 11, 12 and 3
plus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would have to maintain reserves based on 510MWs Generation and BA2 would determine its
generation to be 300 MWs.

23

BAL-002-WECC-2 Redline to BAL-002-WECC-1

WECC Standard BAL-002-WECC-1 — Contingency Reserves Attachment C

A. A. Introduction
1.
1. Title:

3.

Formatted

Contingency ReservesReserve

2. 2.

Number:

BAL-002-WECC-2

Purpose: Contingency Reserve is required for the reliable operation of the
interconnected power system. Adequate generating capacity must be available at all
times to maintain scheduled frequency, and avoid loss of firm load following
transmission or generation contingencies. This generating capacity is necessary to
replace generating capacity and energy lost due to forced outages of generation or
transmission equipment.

3. 4. Purpose:

To specify the quantity and types of Contingency Reserve
required to ensure reliability under normal and abnormal
conditions.

4. Applicability:
4.1

4.1

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Balancing Authority

...

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...

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4.2 Reserve Sharing Group

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5. Effective Date: On the first day of the next quarter, after receipt of applicable regulatory
approval.
B. Requirements
R1.

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Each Reserve Sharing Group or1.1. The Balancing
Authority that is not is the responsible entity unless the
Balancing Authority is a member of a Reserve Sharing
Group, in which case, the Reserve Sharing Group
becomes the responsible entity.

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4.2

Reserve Sharing Group

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4.2.1. The Reserve Sharing Group when comprised of a
Source Balancing Authority becomes the source
Reserve Sharing Group.
4.2.2. The Reserve Sharing Group when comprised of a Sink
Balancing Authority becomes the sink Reserve Sharing
Group.
5. Effective Date:

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On the first day of the third quarter following applicable
regulatory approval.

B. Requirements and Measures
R1. Each Balancing Authority and each Reserve Sharing Group shall maintain as a
minimum amount of Contingency Reserve , except within the first sixty minutes
following an event requiring the activation of Contingency Reserve, that is the

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...

sum of the following: [Violation Risk Factor: MediumHigh] [Time Horizon: Realtime Operationsoperations]

Formatted

...

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R1.1.1

Formatted

The greater of the following:either:
R1.1.1.
An
• The amount of reserveContingency Reserve equal to the loss of
the most severe single contingency; or
•

R1.2.

R1.3.

R1.1.2.
AnThe amount of reserveContingency Reserve equal to
the sum of three percent of the load (generation minus station service
minus Net Actual Interchange) and hourly integrated Load plus three
percent of nethourly integrated generation (generation minus station
service)..

If the Source Balancing Authority designates an Interchange
Transaction(s) as part of its Non-Spinning Contingency Reserve, the
Sink Balancing Authority shall carry an amount of additional NonSpinning Contingency Reserve equal to the Interchange Transaction(s).
This type of transaction cannot be designated as Spinning Reserves by
the source BA. If the Source Balancing Authority does not designate
the Interchange Transaction as part of its Contingency Reserve, the
Sink Balancing Authority is not required to carry any additional
Contingency Reserves under this Requirement.
If the Sink Balancing Authority is designating an Interchange
Transaction(s) as part of its Contingency Reserve either Spinning or
Non-Spinning, the Source Balancing Authority shall increase its
Contingency Reserves equal in amount and type, to the capacity
transaction(s) where the Sink Balancing Authority is designating the

Adopted by Board of Trustees: October 29, 2008

1

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...

WECC Standard BAL-002-WECC-1 — Contingency Reserves
transaction(s) as a resource to meet its Contingency Reserve
requirements. These types of transactions could be designated as either
spinning or non-spinning reserves. If designated as Spinning Reserves,
all of the requirements of section R2.1 & R2.2 must be met.
R2. Each Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group shall maintain at least half of the Contingency Reserve in R1.1 as
Spinning Reserve. Any Spinning Reserve specified in R1 shall meet the following
requirements. [Violation Risk Factor: High] [Time Horizon: Real-time Operations]
R2.1.

Immediately and automatically responds proportionally to frequency
deviations, e.g. through the action of a governor or other control
systems.

R2.2.

Capable of fully responding within ten minutes.

R3. Each Reserve Sharing Group or Balancing Authority shall use the following acceptable
types of reserve which must be fully deployable within 10 minutes of notification to
meet R1: [Violation Risk Factor: Medium] [Time Horizon: Real-time Operations]
R3.1.

Spinning Reserve

R3.2.

Interruptible Load;

R3.3.1.2

Comprised of any combination of the reserve types specified below:
•
•
•

Operating Reserve – Spinning
Operating Reserve - Supplemental
Interchange Transactions designated by the sourceSource
Balancing Authority as non-spinning contingency reserve;Operating
Reserve – Supplemental

R3.4.

Reserve held by other entities by agreement that is deliverable on Firm
• Transmission Service;

R3.5.

An amount of off-line generation which can be synchronized and
generating; or
•
•

•

R3.6.
LoadA resource, other than generation or load, that can
provide energy or reduce energy consumption
Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management,
Interruptible Load or Interruptible LoadDemand, or any other Load
made available for curtailment by the Balancing Authority or the
Reserve Sharing Group via contract or agreement.
All other load, not identified above, once the Reliability
Coordinator has declared a capacity or an energy emergency. alert
signifying that firm load interruption is imminent or in progress.

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C. Measures
1.3 Based on real-time hourly load and generating energy values averaged over
each Clock Hour (excluding Qualifying Facilities covered in 18 C.F.R.§
292.101, as addressed in FERC Order 464).
1.4 An amount of capacity from a resource that is deployable within ten minutes.
M1. The

Each Balancing Authority and each Reserve Sharing Group orwill have

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documentation demonstrating its Contingency Reserve was maintained, except
within the first sixty minutes following an event requiring the activation of
Contingency Reserve.
Part 1.1
Each Balancing Authority that is not a member of aand each Reserve Sharing
Group haswill have dated documentation that demonstrates its Contingency
Reserve was maintained in accordance with the amounts identified in
Requirement R1, Part 1.1, except within the first sixty minutes following an event
requiring the activation of Contingency Reserve.

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Attachment A is a practical illustration showing how the generation amount may
be calculated under Requirement R1.

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•

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•

Where Dynamic Schedules are used as part of the generation amount
upon which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1 may include, but is not limited
to, documentation showing a reciprocal acknowledgement as to which
entity is carrying the reserves. This transfer may be all or some portion of
the physical generator and is not limited to the entire physical capability
of the generator.

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Where Pseudo-Ties are used as part of the generation amount upon
which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1, may include, but is not
limited to, documentation accounting for the transfers included in the
Pseudo-Ties.

Part 1.2

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Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.2.
Evidence may include, but is not limited to, documentation that reserves were
comprised of the types listed in Requirement R1, Part 1.2 for purposes of
meeting the Contingency Reserve obligation of Requirement R1. Additionally, for
purposes of the last bullet of Requirement R1, Part 1.2, evidence of compliance
may include, but is not limited to, documentation that the reliability coordinator
had issued an energy emergency alert, indicating that firm Load interruption was
imminent or was in progress.

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Part 1.3

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Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.3.
Evidence of compliance with Requirement R1, Part 1.3 may include, but is not
limited to, documentation that Contingency Reserve amounts are based upon
load and generating data averaged over each Clock Hour and excludes
Qualifying Facilities covered in 18 C.F.R.§ 292.101, as addressed in FERC
Order 464.
Part 1.4
Evidence of compliance with Requirement R1, Part 1.4 may include, but is not

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limited to, documentation that the reserves maintained to comply with
Requirement R1, Part 1.4 are fully deployable within ten minutes.
R2.

M2.

Each Balancing Authority and each Reserve Sharing Group shall maintain at
least half of its minimum amount of Contingency Reserve identified in
Requirement R1, as Operating Reserve – Spinning that meets both of the
following reserve characteristics. [Violation Risk Factor: High] [Time Horizon:
Real-time operations]
2.1

Reserve that is immediately and automatically responsive to frequency
deviations through the action of a governor or other control system;

2.2

Reserve that is capable of fully responding within ten minutes.

Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates it maintained 100% of required Contingency
Reserve levels based upon data integrated over each clock hour except within the firstat
least half of the Contingency Reserve identified in Requirement R1 as Operating
Reserve – Spinning, averaged over each Clock Hour, that met both of the
reserve characteristics identified in Requirement R2, Part 2.1 and Requirement
R2, Part 2.2.
105 minutes (15 minute Disturbance Recovery Period, plus 90 minute Contingency
Reserve Restoration Period) following an event requiring the activation of Contingency
Reserves. For each hour Reserve Sharing Group or Balancing Authority shall have and
provide upon request their Contingency Reserve Requirement in MW, how the
requirement was calculated, and amount of Contingency Reserve available in MW. Etags and/or contracts shall be provided to document any transactions under R1.2 and
R1.3.

M2. The Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group has documentation that it maintained at least 100% of minimum
Spinning Contingency Reserve required based upon data averaged over each clock
hour except within the first 105 minutes following an event requiring the activation of
Contingency Reserves. For each hour, Reserve Sharing Group or Balancing Authority

Adopted by Board of Trustees: October 29, 2008

2

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WECC Standard BAL-002-WECC-1 — Contingency Reserves
that is not a member of a Reserve Sharing Group shall have and provide upon request
the Spinning Reserve Requirement in MW and amount of Spinning Reserve available
in MW that is automatically responsive to frequency and can be fully deployed in 10
minutes.
M3. The Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group has documentation that it used the acceptable types of reserve for each
hour to meet R3.
M3.1

R3.

M3.

R4.

M4.

Any Reserve Sharing Group or Balancing Authority utilizing Load other than
Interruptible Load shall submit documentation demonstrating that the
Reliability Coordinator declared a Capacity and/or Energy Emergency prior to
utilizing Load for Contingency Reserves.

D.
Each Sink Balancing Authority and each sink Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve in Requirement R1, equal to the amount of Operating
Reserve–Supplemental for any Interchange Transaction designated as part of
the Source Balancing Authority’s Operating Reserve–Supplemental or source
Reserve Sharing Group’s Operating Reserve–Supplemental, except within the
first sixty minutes following an event requiring the activation of Contingency
Reserve. [Violation Risk Factor: High] [Time Horizon: Real-time operations]

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Each Sink Balancing Authority and each sink Reserve Sharing Group will have
dated documentation demonstrating it maintained an amount of Operating
Reserve, in addition to the Contingency Reserve identified in Requirement R1,
equal to the amount of Operating Reserve–Supplemental for any Interchange
Transaction designated as part of the Source Balancing Authority’s Operating
Reserve–Supplemental or source Reserve Sharing Group’s Operating Reserve–
Supplemental, for the entire period of the transaction, except within the first sixty
minutes following an event requiring the activation of Contingency Reserves, in
accordance with Requirement 3.

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Each Source Balancing Authority and each source Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve amounts identified in Requirement R1, equal to the
amount and type of Operating Reserves for any Operating Reserve transactions
for which it is the Source Balancing Authority or source Reserve Sharing Group.
[Violation Risk Factor: High] [Time Horizon: Real-time operations]

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Each Source Balancing Authority and each source Reserve Sharing Group will
have dated documentation that demonstrates it maintained an amount of
additional Operating Reserves identified in Requirement R1, greater than or
equal to the amount and type of that identified in Requirement 4, for the entire
period of the transaction.

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C. Compliance

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1. Compliance Monitoring Process
1.1

Compliance Monitoring Responsibility

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1.1

Compliance Enforcement Authority

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For entities that do not work for the Regional Entity, the Regional Entity
shall serve as the Compliance Enforcement Authority.
For Reliability Coordinators and other functional entities that work for their
Regional Entity, the ERO or a Regional Entity approved by the ERO and
FERC or other applicable governmental authorities shall serve as the
Compliance Enforcement Authority.
For responsible entities that are also Regional Entities, the ERO or a
Regional Entity approved by the ERO and FERC or other applicable
governmental authorities shall serve as the Compliance Enforcement
Authority.

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1.2

Compliance Monitoring Periodand Assessment Processes:
The Compliance Enforcement Authority may use one or more of the following
methods to assess compliance:

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- Reports conducted quarterly

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- Spot check audits conducted anytime with 30 days notice given to prepare

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- Periodic audit as scheduled by the Compliance Audit

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Self-Certification

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Spot Checking

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Compliance Enforcement AuthorityInvestigation

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- Investigations
- Other methods as provided for in the Compliance Monitoring Enforcement
Program
Reserve Sharing Groups and Self-Reporting
Complaint
1.3

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Evidence Retention
The following evidence retention periods identify the period of time an entity
is required to retain specific evidence to demonstrate compliance. For
instances where the evidence retention period specified below is shorter
than the time since the last audit, the Compliance Enforcement Authority
may ask an entity to provide other evidence to show that it was compliant
for the full time period since the last audit.

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Each Balancing Authorities shall submit to their Compliance Enforcement
Authority a Contingency Reserve verification report on or before the tenth
business day following the end of Authority and each calendar quarter.

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1.2.1

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Compliance Monitoring Period: One Clock Hour.

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1.2.2
1.3

The Performance-reset Period is calendar quarter.

Data Retention

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Reserve Sharing Groups and Balancing AuthoritiesGroup shall keep evidence
for Measure M.1Requirement R1 through M3R4 for three years plus calendar
current, or since the last audit, whichever is longer.
1.4.

Additional Compliance Information
1.4.1. This Standard shall apply to aeach Balancing Authority and each
Reserve Sharing Group that has registered with the WECC as
provided in Part 1.4.2 of Section 1.4.2, and eachC.
Each Balancing Authority identified in the registration with WECC as
provided in Part 1.4.2 of Section C shall be responsible for compliance
with this

Adopted by Board of Trustees: October 29, 2008

3

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WECC Standard BAL-002-WECC-1 — Contingency Reserves
Standard through its participation in the Reserve Sharing Group and not on
an individual basis.
1.4.2. A Reserve Sharing Group may register as the Responsible Entity for
purposes of compliance with this Standard by providing written notice
to the WECC
(a: 1) indicating that the Reserve Sharing Group is registering as the
Responsible Entity for purposes of compliance with this Standard,
(b2) identifying each Balancing Authority that is a member of the
Reserve Sharing Group, and (c3) identifying the person or
organization that will serve as agent on behalf of the Reserve Sharing
Group for purposes of communications and data submissions related
to or required by this Standard.

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1.4.3. If an agent properly designated in accordance with Part 1.4.2 of
Section 1.4.2C identifies individual Balancing Authorities within the
Reserve Sharing Group responsible for noncompliance at the time of
data submission, together with the percentage of responsibility
attributable to each identified Balancing Authority, then, except as may
otherwise be finally determined through a duly conducted review or
appeal of the initial finding of noncompliance, (a: 1) any penalties
assessed for noncompliance by the Reserve Sharing Group shall be
allocated to the individual Balancing Authorities identified in the
applicable data submission in proportion to their respective
percentages of responsibility as specified in the data submission, (b2)
each Balancing Authority shall be solely responsible for all penalties
allocated to it according to its percentage
of responsibility as provided in subsection (a1) of this Part 1.4.3 of
Section 1.4.3C, and (c3) neither the Reserve Sharing Group nor any
member of the Reserve Sharing Group shall be responsible for any
portion of a penalty assessed against another member of the Reserve
Sharing Group in accordance with subsection (a1) of this Part 1.4.3 of
Section 1.4.3C (even if the member of Reserve Sharing Group
against which the penalty is assessed is not subject to or otherwise fails to
pay its allocated share of the penalty).
1.4.4. If an agent properly designated in accordance with Part 1.4.2 of
Section 1.4.2C fails to identify individual Balancing Authorities within
the Reserve Sharing Group responsible for noncompliance at the time
of data submission or fails to specify percentages of responsibility
attributable to each identified Balancing Authority, any penalties for
noncompliance shall be assessed against the agent on behalf of the
Reserve Sharing Group, and it shall be the responsibility of
the members of the Reserve Sharing Group to allocate responsibility for
such noncompliance.
1.4.5. Any Balancing Authority that is a member of a Reserve Sharing
Group that has failed to register as provided in Part 1.4.2 of Section
1.4.2C shall be subject to this Standard on an individual basis.

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2. Violation Severity Levels for Requirement R1
2.1. Lower: There shall be a Lower Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 100% but greater than or equal

Adopted by Board of Trustees: October 29, 2008

4

WECC Standard BAL-002-WECC-1 — Contingency Reserves
to 90% of the required Contingency Reserve.
2.2. Moderate: There shall be a Moderate Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 90% but greater than or equal to
80% of the required Contingency Reserve.
2.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority's or the Reserve Sharing
Group's Contingency Reserve is less than 80% but greater than or equal to 70% of
the required Contingency Reserve.
2.4. Severe: There shall be a Severe Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 70% of the required
Contingency Reserve.
3. Violation Severity Level for Requirement R2
3.1 Lower: There shall be a Lower Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 100% but greater than or equal to
90% of the required Spinning Reserve.
3.2. Moderate: There shall be a Moderate Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 90% but greater than or equal to
80% of the required Spinning Reserve.
3.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority's or the Reserve Sharing
Group's Spinning Reserve is less than 80% but greater than or equal to 70% of the
required Spinning Reserve.
3.4. Severe: There shall be a Severe Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 70% of the required Spinning
Reserve.
4. Violation Severity Level for Requirement R3
4.1 Lower: Not Applicable
4.2. Moderate: Not Applicable
4.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority or Reserve Sharing Group used
unacceptable resources for Contingency Reserves.
4.4. Severe: Not Applicable
Version History — Shows Approval Histor y and Summary of Changes in the Action Field

Adopted by Board of Trustees: October 29, 2008

5

WECC Standard BAL-002-WECC-1
Contingency Reserve

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WECC Standard BAL-002-WECC-1 — Contingency Reserves

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12

WECC Standard BAL-002-WECC-1
Contingency Reserve

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Table of Compliance Elements
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Lower VSL

Moderate VSL

High VSL

Severe VSL

BALSTD002-0
R1

R2

Real-time
Operations

Real-time
Operations

High

High

The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock

Developed as WECC-0083

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
13

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WECC Standard BAL-002-WECC-1
Contingency Reserve

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Lower VSL

Moderate VSL

High VSL

Severe VSL

Hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 100% but
greater than or
equal to 90% of
the required
Operating
Reserve–
Spinning amount
specified in
Requirement R2,
and both
characteristics
were met.

Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 90% but
greater than or
equal to 80% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

Clock Hour,
during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 90% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve is less
than 80% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the

BALSTD002-0

R3

Real-time
Operations

High

Developed as WECC-0083

characteristics
were met.

14

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WECC Standard BAL-002-WECC-1
Contingency Reserve

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Lower VSL

Moderate VSL

High VSL

Severe VSL

greater than or
equal to 90% of
the required
Operating
Reserve amount
specified in
Requirement R3.

greater than or
equal to 80% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve
Reserve
Operating
Operating
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R4. specified in
Requirement
R4.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R4.

BALSTD002-0

R4

Real-time
Operations

High

Developed as WECC-0083

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15

WECC Standard BAL-002-WECC-1
Contingency Reserve

Formatted: Centered, Tab stops: 3.25",
Centered + 6.5", Right
Formatted: Font: 10 pt

Adopted by Board of Trustees: October 29, 2008

6D.

Regional Variances

None.
E. Interpretations
Developed as WECC-0083

16

WECC Standard BAL-002-WECC-1
Contingency Reserve

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None.
F. Associated Documents
None.

Developed as WECC-0083

17

WECC Standard BAL-002-WECC-1
Contingency Reserve

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Centered + 6.5", Right

Attachment A

Formatted: Font: 10 pt

Attachment A is illustrative only; it is not a requirement. Requirement R1 calls for an amount
of Contingency Reserve to be maintained, predicated on an amount of generation and load
required in Requirement R1, Part 1.1., specifically:
“1.1 The greater of either:
•
•

The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.”

Attachment A illustrates one possible way to account for and calculate the amount of
generation upon which the Contingency Reserve amount is predicated.
Below is a practical illustration showing how the generation amount may be calculated under
Requirement R1 for Balancing Authorities (BA) and Reserve Sharing Groups (RSG).
BA1 / RSG 1

Generation

Generator 1
Generator 2
Generator 3 (Pseudo-Tied out to BA2)
Generator 4 QF (has backup contract)
Generator 5 QF in EMS
Generator 6

300 MWs online
200 MWs online
100 MWs online
10 MWs online
10 MWs online
0 MWs online

Part of Generator
Yes
Yes
No
No
Yes
Yes

Dynamic Schedule to BA2 from BA1 1

(50 MWs)

Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

620 MWs
(The sum of gen 1-6)
510 MWs
(The sum of gen 1, 2, and 5)
460 MWs** (The sum of gen 1, 2 and 5
minus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would maintain reserves based on 510 MWs Generation.

BA2 / RSG2
Generator 11
1

Generation

Part of Generator

100 MWs

Yes

Note: This Dynamic Schedule is not the same as the Generator 3 Pseudo-Tie.

Developed as WECC-0083

18

WECC Standard BAL-002-WECC-1
Contingency Reserve

Generator 12
Generator 3 (Pseudo-Tied in from BA1)
Dynamic Schedule from BA1 to BA2
Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

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Centered + 6.5", Right

100 MWs
100 MWs

Yes
Yes

50 MWs

Yes

Formatted: Font: 10 pt

300 MWs
(The sum of gen 11, 12 and 3.)
300 MWs
(The sum of gen 11, 12 and 3)
350 MWs** (The sum of gen 11, 12 and 3
plus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would have to maintain reserves based on 510MWs Generation and BA2 would determine its
generation to be 300 MWs.

Developed as WECC-0083

19

WECC Standard BAL-002-WECC-1
Contingency Reserve

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Centered + 6.5", Right
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Guideline and Technical Basis
A Guidance Document addressing implementation of this standard has been filed with this
standard.

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Developed as WECC-0083

20

Exhibit I

Complete Development Record of Proposed BAL-002-WECC-2
Contingency Reserve Regional Reliability Standard

Regional Reliability Standards - Under Development
Standard No.

Title

Regional
Status

Dates

NERC Status

Western Electricity Coordinating Council (WECC)

Info (1)
Submit
Comments
Comment Form
(2)

Contingency
Reserves
BAL-002-WECC-2
(Order 740
Remand)

NERC Board
Adopted
November 7,
2012

BAL-002-WECC2 (clean) (3)
01/06/12 02/20/12

BAL-002-WECC2 (redlined) (4)
Implementation
Plan (5)
Comments
Received (6)
Consideration
of Comments
(7)

Regional Reliability Standards
Announcement
Comment Period Open for BAL-002-WECC-1
January 6 – February 20, 2012
Regional Project: Now available
Proposed Standard for the Western Electricity Coordinating Council (WECC)

WECC has requested NERC to post regional reliability standard BAL-002-WECC-1 Contingency Reserves
for a 45-day industry review as permitted by the NERC Rules of Procedure.
Instructions

Please use this electronic form to submit comments. If you experience any difficulties in using the
electronic form, please contact Monica Benson at [email protected]. An off-line, unofficial
copy of the comment form is posted on the regional standards development page.
Background

On March 26, 2007, NERC submitted WECC-BAL-STD-002-0 to FERC for approval. The purpose of
standard was to convert the substance of WECC’s Reliability Criteria Agreement, III.A.2. WECC Criterion
into an enforceable standard.
On June 8, 2007, FERC approved WECC-BAL-STD-002-0 — subject to specific requested changes —
finding the standard was more stringent than the corresponding NERC Reliability Standard BAL-002-0.
Specifically, FERC found that WECC’s requirement to restore Contingency Reserve within 60 minutes
was more stringent than the 90-minute restoration period as set forth in NERC’s BAL-002-0.
After making the FERC mandated changes, on March 25, 2009, NERC submitted BAL-002-WECC-1
(nomenclature change) to FERC for approval and requested retirement of WECC BAL-STD-002-0. On
October 21, 2010, FERC remanded BAL-002-WECC-1 to NERC under FERC Final Order 740 with
instruction for WECC to further development the standard. This standard is the result of the
aforementioned proceedings.
Regional Reliability Standards Development Process

Section 300 of the Rules of Procedure for the Electric Reliability Organization governs the regional reliability
standards development process. The success of the NERC standards development process depends on
stakeholder participation. We extend our thanks to all those who participate.

For more information or assistance, please contact Monica Benson,
Standards Process Administrator, at [email protected] or at 404-446-2560.
North American Electric Reliability Corporation
116-390 Village Blvd.
Princeton, NJ 08540
609.452.8060 | www.nerc.com

Regional Reliability Standards Announcement
BAL-002-WECC-1

2

Unofficial Comment Form for Regional Reliability Standard
BAL-002-WECC-1
Please DO NOT use this form. Please use the electronic form to submit comments on the Regional
Reliability Standard BAL-002-WECC-1. Comments must be submitted by February 20, 2012. If you
have questions please contact Howard Gugel at [email protected] or Barb Nutter at
[email protected]
http://www.nerc.com/filez/regional_standards/regional_reliability_standards_under_development.ht
ml
Background Information
A regional reliability standard shall be: (1) a regional reliability standard that is more stringent than the
continent-wide reliability standard, including a regional standard that addresses matters that the
continent-wide reliability standard does not; or (2) a regional reliability standard that is necessitated by
a physical difference in the bulk power system. Regional reliability standards shall provide for as much
uniformity as possible with reliability standards across the interconnected bulk power system of the
North American continent. Regional reliability standards, when approved by FERC and applicable
authorities in Mexico and Canada shall be made part of the body of NERC reliability standards and shall
be enforced upon all applicable bulk power system owners, operators, and users within the applicable
area, regardless of membership in the region.
BAL-002-WECC-1 specifies the quantity and types of Contingency Reserve required to ensure reliability
under normal and abnormal conditions.
Each WECC Regional Reliability Standard shall enable or support one or more of the NERC reliability
principles, thereby ensuring that each standard serves a purpose in support of the reliability of the
regional bulk electric system. Each of those standards shall also be consistent with all of the NERC
reliability principles, thereby ensuring that no standard undermines reliability through an unintended
consequence. The NERC reliability principles supported by this standard are the following:
Reliability Principle 1 - Interconnected bulk power systems shall be planned and operated in a
coordinated manner to perform reliably under normal and abnormal conditions as defined in
the NERC Standards.
Reliability Principle 3 - Information necessary for the planning and operation of interconnected
bulk power systems shall be made available to those entities responsible for planning and
operating the systems reliably.
The proposed WECC Regional Reliability Standard is not inconsistent with, or less stringent than
established NERC Reliability Standards. Once approved by the appropriate authorities, the WECC
Regional Reliability Standard obligates the WECC to monitor and enforce compliance, apply sanctions,
if any, consistent with any regional agreements and the NERC rules.

1

The BAL-002-WECC-1 standard contains four main requirements for applicable entities within the
WECC geographic area. The standard contains the following:
Requirement 1 - Each Balancing Authority and each Reserve Sharing Group shall maintain a minimum
amount of Contingency Reserve, except within the first sixty minutes following an event requiring the
activation of Contingency Reserve, that is:
Requirement 2 - Each Balancing Authority and each Reserve Sharing Group shall maintain at least half
of its minimum amount of Contingency Reserve identified in Requirement R1, as Operating Reserve –
Spinning that meets both of the following reserve characteristics.
Requirement 3 - Each Sink Balancing Authority and each sink Reserve Sharing Group shall maintain an
amount of Operating Reserve, in addition to the minimum Contingency Reserve in Requirement R1,
equal to the amount of Operating Reserve–Supplemental for any Interchange Transaction designated
as part of the Source Balancing Authority’s Operating Reserve–Supplemental or source Reserve Sharing
Group’s Operating Reserve–Supplemental, except within the first sixty minutes following an event
requiring the activation of Contingency Reserve.
Requirement 4 - Each Source Balancing Authority and each source Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum Contingency Reserve amounts
identified in Requirement R1, equal to the amount and type of Operating Reserves for any Operating
Reserve transactions for which it is the Source Balancing Authority or source Reserve Sharing Group.
The approval process for a regional reliability standard requires NERC to publicly notice and request
comment on the proposed standard. Comments shall be permitted only on the following criteria
(technical aspects of the standard are vetted through the regional standards development process):
Unfair or Closed Process — The regional reliability standard was not developed in a fair and
open process that provided an opportunity for all interested parties to participate. Although a
NERC-approved regional reliability standards development procedure shall be presumed to be
fair and open, objections could be raised regarding the implementation of the procedure.
Adverse Reliability or Commercial Impact on Other Interconnections — The regional reliability
standard would have a significant adverse impact on reliability or commerce in other
interconnections.
Deficient Standard — The regional reliability standard fails to provide a level of reliability of the
bulk power system such that the regional reliability standard would be likely to cause a serious
and substantial threat to public health, safety, welfare, or national security.
Adverse Impact on Competitive Markets within the Interconnection — The regional reliability
standard would create a serious and substantial burden on competitive markets within the
interconnection that is not necessary for reliability.

2

1. Do you agree the proposed standard is being developed in a fair and open process, using the
associated Regional Reliability Standards Development Procedure?
Yes
No
Comments:
2. Does the proposed standard pose an adverse impact to reliability or commerce in a neighboring
region or interconnection?
Yes
No
Comments:
3. Does the proposed standard pose a serious and substantial threat to public health, safety,
welfare, or national security?
Yes
No
Comments:
4. Does the proposed standard pose a serious and substantial burden on competitive markets
within the interconnection that is not necessary for reliability?
Yes
No
Comments:
5. Does the proposed regional reliability standard meet at least one of the following criteria?
- The proposed standard has more specific criteria for the same requirements covered in a
continent-wide standard
- The proposed standard has requirements that are not included in the corresponding
continent-wide reliability standard
- The proposed regional difference is necessitated by a physical difference in the bulk power
system.
Yes
No
Comments:

3

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
Completed Actions
1.

Post Draft Standard for initial industry comments

Completion Date
September 14, 2007

2. Drafting Team to review and respond to initial industry comments

November 20, 2007

3. Post second Draft Standard for industry comments

November 20, 2007

4. Drafting Team to review and respond to industry comments

January 25, 2008

5. Post Draft Standard for Operating Committee approval

January 25, 2008

6. Operating Committee approved proposed standard

March 6, 2008

7. Post Draft Standard for WECC Board approval

March 12, 2008

8. Post Draft Standard for NERC comment period

April 14, 2008

9. WECC Board approved proposed standard

April 16, 2008

10. NERC comment period ended

May 20, 2008

11. Drafting Team completes review and consideration of NERC
industry comments

May 30, 2008

12. NERC Board approved the request; Request FERC approval

June 2008

13. FERC Remanded under Order 740, 18 CFR Part 40, Docket No.
RM09-15-000.

October 21, 2010

14. Drafting Team first meeting

January 10, 2011

15. Posting 1

January 17, 2011

16. Posting 1 Responses to Comments

March 21, 2011

17. Posting 2 Posted

March 11, 2011

18. Posting 2 Responses to Comments

April 14, 2011

19. Operating Committee Special Vote – Failed

May 19, 2011

20. Posting 3

September 19, 2011

21. Posting 3 Responses to Comments

November 15, 2011

22. Posting 4

November 15, 2011

23. Technical Conference / Salt Lake City, UT

December 5, 2011

24. Team finalizes Version 4 Responses to Comments and Version 5
for posting

January 4, 2012

25. Posting 4 Responses to Comments

January 4, 2012

1

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
26. Posting 5 at WECC for 30 days

January 5, 2012

27. Posting 5 at NERC for 45 days

January 6, 2012

28. Posting 5 WECC closes

February 6, 2012

29. Posting 5 NERC closes

February 20, 2012

30. Posting 5 Responses posted

February 23, 2012

31. Team approved forwarding the standard to the Operating
Committee for approval. At the onset of the Reliability Standards
Development Procedures, effective March 1, 2012, this document
was forwarded through the Ballot Pool, the WECC Standards
Committee and the WECC Board of Directors for approval.

February 23, 2012

32. Notice to OC for March agenda

February 24, 2012

33. Reliability Standards Development Procedures became effective
changing the process for development

March 1, 2012

34. Operating Committee discussion

March 27, 2012

35. Ballot Pool approved

May 18, 2012

36. WECC Standards Committee approved forwarding to the WECC
Board of Directors for approval

May 21, 2012

37. WECC Board of Directors approved

June 26, 2012

2

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B

Version History – Shows Approval History and Summary of Changes in the Action Field
Version

Date

1

January 17, 2011

Action

Change Tracking

Draft Version of Permanent
Version 1 posted
Replacement Standard for BAL- 1/17/2011 through
STD-002-0
3/3/2011

1

March 11, 2011

“Purpose” adjusted, reserve
restoration window adjusted,
calculation moved to the
Measures

1

September 19, 2011

Post-OC rejection

1

Structure changed for clarity,
Version 4 posted
November 15, 2011 added Applicable Entities earlier 11/15/2011 through
omitted
12/15/2011

1

January 5, 2012

Version 2 posted
3/11-2011 through
4/11/2011
Version 3 posted
9/19/2011 through
10/19/2011

Structure changed for clarity,
added Applicable Entities earlier Version 5 posted
omitted, responded to technical 1/5/2012 through
conference, comments and NERC
2/6/2012
quality review

3

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
A. Introduction

1. Title:

Contingency Reserve

2. Number:

BAL-002-WECC-2

3. Purpose:

To specify the quantity and types of Contingency Reserve
required to ensure reliability under normal and abnormal
conditions.

4. Applicability:
4.1

Balancing Authority
4.1.1. The Balancing Authority is the responsible entity unless the
Balancing Authority is a member of a Reserve Sharing
Group, in which case, the Reserve Sharing Group
becomes the responsible entity.

4.2

Reserve Sharing Group
4.2.1. The Reserve Sharing Group when comprised of a Source
Balancing Authority becomes the source Reserve Sharing
Group.
4.2.2. The Reserve Sharing Group when comprised of a Sink
Balancing Authority becomes the sink Reserve Sharing
Group.

5. Effective Date:

On the first day of the third quarter following applicable regulatory
approval.

B. Requirements and Measures
R1. Each Balancing Authority and each Reserve Sharing Group shall maintain a
minimum amount of Contingency Reserve, except within the first sixty minutes
following an event requiring the activation of Contingency Reserve, that is: [Violation
Risk Factor: High] [Time Horizon: Real-time operations]
1.1 The greater of either:
•
•

The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.
4

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B

1.2 Comprised of any combination of the reserve types specified below:
•
•
•
•
•
•

•

Operating Reserve – Spinning
Operating Reserve - Supplemental
Interchange Transactions designated by the Source Balancing
Authority as Operating Reserve – Supplemental
Reserve held by other entities by agreement that is deliverable on
Firm Transmission Service
A resource, other than generation or load, that can provide energy or
reduce energy consumption
Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management,
Interruptible Load or Interruptible Demand, or any other Load made
available for curtailment by the Balancing Authority or the Reserve
Sharing Group via contract or agreement.
All other load, not identified above, once the Reliability Coordinator
has declared an energy emergency alert signifying that firm load
interruption is imminent or in progress.

1.3 Based on real-time hourly load and generating energy values averaged over
each Clock Hour (excluding Qualifying Facilities covered in 18 C.F.R.§
292.101, as addressed in FERC Order 464).
1.4 An amount of capacity from a resource that is deployable within ten minutes.
M1.

Each Balancing Authority and each Reserve Sharing Group will have documentation
demonstrating its Contingency Reserve was maintained, except within the first sixty
minutes following an event requiring the activation of Contingency Reserve.
Part 1.1
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates its Contingency Reserve was maintained in
accordance with the amounts identified in Requirement R1, Part 1.1, except within
the first sixty minutes following an event requiring the activation of Contingency
Reserve.
Attachment A is a practical illustration showing how the generation amount may be
calculated under Requirement R1.
•

Where Dynamic Schedules are used as part of the generation amount upon
which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1 may include, but is not limited to,
documentation showing a reciprocal acknowledgement as to which entity is
carrying the reserves. This transfer may be all or some portion of the
5

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
physical generator and is not limited to the entire physical capability of the
generator.
•

Where Pseudo-Ties are used as part of the generation amount upon which
Contingency Reserve is predicated, additional evidence of compliance with
Requirement R1, Part 1.1, may include, but is not limited to, documentation
accounting for the transfers included in the Pseudo-Ties.

Part 1.2
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.2.
Evidence may include, but is not limited to, documentation that reserves were
comprised of the types listed in Requirement R1, Part 1.2 for purposes of meeting
the Contingency Reserve obligation of Requirement R1. Additionally, for purposes
of the last bullet of Requirement R1, Part 1.2, evidence of compliance may include,
but is not limited to, documentation that the reliability coordinator had issued an
energy emergency alert, indicating that firm Load interruption was imminent or was
in progress.
Part 1.3
Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.3.
Evidence of compliance with Requirement R1, Part 1.3 may include, but is not
limited to, documentation that Contingency Reserve amounts are based upon load
and generating data averaged over each Clock Hour and excludes Qualifying
Facilities covered in 18 C.F.R.§ 292.101, as addressed in FERC Order 464.
Part 1.4
Evidence of compliance with Requirement R1, Part 1.4 may include, but is not
limited to, documentation that the reserves maintained to comply with Requirement
R1, Part 1.4 are fully deployable within ten minutes.
R2.

M2.

Each Balancing Authority and each Reserve Sharing Group shall maintain at least
half of its minimum amount of Contingency Reserve identified in Requirement R1, as
Operating Reserve – Spinning that meets both of the following reserve
characteristics. [Violation Risk Factor: High] [Time Horizon: Real-time operations]
2.1

Reserve that is immediately and automatically responsive to frequency
deviations through the action of a governor or other control system;

2.2

Reserve that is capable of fully responding within ten minutes.

Each Balancing Authority and each Reserve Sharing Group will have dated
6

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
documentation that demonstrates it maintained at least half of the Contingency
Reserve identified in Requirement R1 as Operating Reserve – Spinning, averaged
over each Clock Hour, that met both of the reserve characteristics identified in
Requirement R2, Part 2.1 and Requirement R2, Part 2.2.
R3.

Each Sink Balancing Authority and each sink Reserve Sharing Group shall maintain
an amount of Operating Reserve, in addition to the minimum Contingency Reserve
in Requirement R1, equal to the amount of Operating Reserve–Supplemental for
any Interchange Transaction designated as part of the Source Balancing Authority’s
Operating Reserve–Supplemental or source Reserve Sharing Group’s Operating
Reserve–Supplemental, except within the first sixty minutes following an event
requiring the activation of Contingency Reserve. [Violation Risk Factor: High] [Time
Horizon: Real-time operations]

M3.

Each Sink Balancing Authority and each sink Reserve Sharing Group will have
dated documentation demonstrating it maintained an amount of Operating Reserve,
in addition to the Contingency Reserve identified in Requirement R1, equal to the
amount of Operating Reserve–Supplemental for any Interchange Transaction
designated as part of the Source Balancing Authority’s Operating Reserve–
Supplemental or source Reserve Sharing Group’s Operating Reserve–
Supplemental, for the entire period of the transaction, except within the first sixty
minutes following an event requiring the activation of Contingency Reserves, in
accordance with Requirement 3.

R4.

Each Source Balancing Authority and each source Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum Contingency
Reserve amounts identified in Requirement R1, equal to the amount and type of
Operating Reserves for any Operating Reserve transactions for which it is the
Source Balancing Authority or source Reserve Sharing Group. [Violation Risk
Factor: High] [Time Horizon: Real-time operations]

M4.

Each Source Balancing Authority and each source Reserve Sharing Group will have
dated documentation that demonstrates it maintained an amount of additional
Operating Reserves identified in Requirement R1, greater than or equal to the
amount and type of that identified in Requirement 4, for the entire period of the
transaction.

C. Compliance
1. Compliance Monitoring Process
1.1

Compliance Enforcement Authority

7

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
For entities that do not work for the Regional Entity, the Regional Entity shall
serve as the Compliance Enforcement Authority.
For Reliability Coordinators and other functional entities that work for their
Regional Entity, the ERO or a Regional Entity approved by the ERO and FERC
or other applicable governmental authorities shall serve as the Compliance
Enforcement Authority.
For responsible entities that are also Regional Entities, the ERO or a Regional
Entity approved by the ERO and FERC or other applicable governmental
authorities shall serve as the Compliance Enforcement Authority.
1.2

Compliance Monitoring and Assessment Processes:
Compliance Audit
Self-Certification
Spot Checking
Compliance Investigation
Self-Reporting
Complaint

1.3

Evidence Retention
The following evidence retention periods identify the period of time an entity is
required to retain specific evidence to demonstrate compliance. For instances
where the evidence retention period specified below is shorter than the time
since the last audit, the Compliance Enforcement Authority may ask an entity to
provide other evidence to show that it was compliant for the full time period
since the last audit.
Each Balancing Authority and each Reserve Sharing Group shall keep
evidence for Requirement R1 through R4 for three years plus calendar current.

1.4.

Additional Compliance Information
1.4.1. This Standard shall apply to each Balancing Authority and each Reserve
Sharing Group that has registered with WECC as provided in Part 1.4.2
of Section C.
Each Balancing Authority identified in the registration with WECC as
provided in Part 1.4.2 of Section C shall be responsible for compliance
with this Standard through its participation in the Reserve Sharing Group
and not on an individual basis.

8

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
1.4.2. A Reserve Sharing Group may register as the Responsible Entity for
purposes of compliance with this Standard by providing written notice to
the WECC: 1) indicating that the Reserve Sharing Group is registering
as the Responsible Entity for purposes of compliance with this Standard,
2) identifying each Balancing Authority that is a member of the Reserve
Sharing Group, and 3) identifying the person or organization that will
serve as agent on behalf of the Reserve Sharing Group for purposes of
communications and data submissions related to or required by this
Standard.
1.4.3. If an agent properly designated in accordance with Part 1.4.2 of Section
C identifies individual Balancing Authorities within the Reserve Sharing
Group responsible for noncompliance at the time of data submission,
together with the percentage of responsibility attributable to each
identified Balancing Authority, then, except as may otherwise be finally
determined through a duly conducted review or appeal of the initial
finding of noncompliance: 1) any penalties assessed for noncompliance
by the Reserve Sharing Group shall be allocated to the individual
Balancing Authorities identified in the applicable data submission in
proportion to their respective percentages of responsibility as specified in
the data submission, 2) each Balancing Authority shall be solely
responsible for all penalties allocated to it according to its percentage of
responsibility as provided in subsection 1) of this Part 1.4.3 of Section C,
and 3) neither the Reserve Sharing Group nor any member of the
Reserve Sharing Group shall be responsible for any portion of a penalty
assessed against another member of the Reserve Sharing Group in
accordance with subsection 1) of this Part 1.4.3 of Section C (even if the
member of Reserve Sharing Group against which the penalty is
assessed is not subject to or otherwise fails to pay its allocated share of
the penalty).
1.4.4. If an agent properly designated in accordance with Part 1.4.2 of Section
C fails to identify individual Balancing Authorities within the Reserve
Sharing Group responsible for noncompliance at the time of data
submission or fails to specify percentages of responsibility attributable to
each identified Balancing Authority, any penalties for noncompliance
shall be assessed against the agent on behalf of the Reserve Sharing
Group, and it shall be the responsibility of the members of the Reserve
Sharing Group to allocate responsibility for such noncompliance.
1.4.5. Any Balancing Authority that is a member of a Reserve Sharing Group
that has failed to register as provided in Part 1.4.2 of Section C shall be
subject to this Standard on an individual basis.

9

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B

Table of Compliance Elements

R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

Severe VSL

R1

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.

R2

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 100% but
greater than or

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 90% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 80% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
10

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

Severe VSL

equal to 90% of
the required
Operating
Reserve–
Spinning amount
specified in
Requirement R2,
and both
characteristics
were met.

greater than or
equal to 80% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

greater than or
equal to 70% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

R3

Real-time
Operations

High

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R3. specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R3.

R4

Real-time
Operations

High

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one hour,
during a
calendar month,
in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency

11

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
R

Time
Horizon

VRF

Violation Severity Levels
Lower VSL

Moderate VSL

High VSL

Severe VSL

Reserve
Operating
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Operating
Reserve amount
specified in
Requirement R4.

Reserve
Operating
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

Reserve
Operating
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R4.

D. Regional Variances
None.
E. Interpretations
None.
F. Associated Documents
None.

12

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
Attachment A
Attachment A is illustrative only; it is not a requirement. Requirement R1 calls for an amount
of Contingency Reserve to be maintained, predicated on an amount of generation and load
required in Requirement R1, Part 1.1., specifically:
“1.1 The greater of either:
•
•

The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.”

Attachment A illustrates one possible way to account for and calculate the amount of
generation upon which the Contingency Reserve amount is predicated.
Below is a practical illustration showing how the generation amount may be calculated under
Requirement R1 for Balancing Authorities (BA) and Reserve Sharing Groups (RSG).
BA1 / RSG 1

Generation

Generator 1
Generator 2
Generator 3 (Pseudo-Tied out to BA2)
Generator 4 QF (has backup contract)
Generator 5 QF in EMS
Generator 6

300 MWs online
200 MWs online
100 MWs online
10 MWs online
10 MWs online
0 MWs online

Part of Generator
Yes
Yes
No
No
Yes
Yes

Dynamic Schedule to BA2 from BA1 1

(50 MWs)

Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

620 MWs
(The sum of gen 1-6)
510 MWs
(The sum of gen 1, 2, and 5)
460 MWs** (The sum of gen 1, 2 and 5
minus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would maintain reserves based on 510 MWs Generation.

BA2 / RSG2
Generator 11
1

Generation

Part of Generator

100 MWs

Yes

Note: This Dynamic Schedule is not the same as the Generator 3 Pseudo-Tie.

13

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
Generator 12
Generator 3 (Pseudo-Tied in from BA1)
Dynamic Schedule from BA1 to BA2
Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

100 MWs
100 MWs

Yes
Yes

50 MWs

Yes

300 MWs
(The sum of gen 11, 12 and 3.)
300 MWs
(The sum of gen 11, 12 and 3)
350 MWs** (The sum of gen 11, 12 and 3
plus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would have to maintain reserves based on 510MWs Generation and BA2 would determine its
generation to be 300 MWs.

14

WECC Standard BAL-002-WECC-2 — Contingency Reserve – Attachment B
Guideline and Technical Basis
A Guidance Document addressing implementation of this standard has been filed with this
standard.

15

WECC Standard BAL-002-WECC-1 — Contingency Reserves Attachment C

A. A. Introduction
1.
1. Title:

3.

Formatted

Contingency ReservesReserve

2. 2.

Number:

BAL-002-WECC-2

Purpose: Contingency Reserve is required for the reliable operation of the
interconnected power system. Adequate generating capacity must be available at all
times to maintain scheduled frequency, and avoid loss of firm load following
transmission or generation contingencies. This generating capacity is necessary to
replace generating capacity and energy lost due to forced outages of generation or
transmission equipment.

3. 4. Purpose:

To specify the quantity and types of Contingency Reserve
required to ensure reliability under normal and abnormal
conditions.

4. Applicability:
4.1

4.1

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Balancing Authority

...

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...

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4.2 Reserve Sharing Group

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5. Effective Date: On the first day of the next quarter, after receipt of applicable regulatory
approval.
B. Requirements
R1.

...

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Each Reserve Sharing Group or1.1. The Balancing
Authority that is not is the responsible entity unless the
Balancing Authority is a member of a Reserve Sharing
Group, in which case, the Reserve Sharing Group
becomes the responsible entity.

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4.2

Reserve Sharing Group

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...

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4.2.1. The Reserve Sharing Group when comprised of a
Source Balancing Authority becomes the source
Reserve Sharing Group.
4.2.2. The Reserve Sharing Group when comprised of a Sink
Balancing Authority becomes the sink Reserve Sharing
Group.
5. Effective Date:

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...

On the first day of the third quarter following applicable
regulatory approval.

B. Requirements and Measures
R1. Each Balancing Authority and each Reserve Sharing Group shall maintain as a
minimum amount of Contingency Reserve , except within the first sixty minutes
following an event requiring the activation of Contingency Reserve, that is the

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...

sum of the following: [Violation Risk Factor: MediumHigh] [Time Horizon: Realtime Operationsoperations]

Formatted

...

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R1.1.1

Formatted

The greater of the following:either:
R1.1.1.
An
• The amount of reserveContingency Reserve equal to the loss of
the most severe single contingency; or
•

R1.2.

R1.3.

R1.1.2.
AnThe amount of reserveContingency Reserve equal to
the sum of three percent of the load (generation minus station service
minus Net Actual Interchange) and hourly integrated Load plus three
percent of nethourly integrated generation (generation minus station
service)..

If the Source Balancing Authority designates an Interchange
Transaction(s) as part of its Non-Spinning Contingency Reserve, the
Sink Balancing Authority shall carry an amount of additional NonSpinning Contingency Reserve equal to the Interchange Transaction(s).
This type of transaction cannot be designated as Spinning Reserves by
the source BA. If the Source Balancing Authority does not designate
the Interchange Transaction as part of its Contingency Reserve, the
Sink Balancing Authority is not required to carry any additional
Contingency Reserves under this Requirement.
If the Sink Balancing Authority is designating an Interchange
Transaction(s) as part of its Contingency Reserve either Spinning or
Non-Spinning, the Source Balancing Authority shall increase its
Contingency Reserves equal in amount and type, to the capacity
transaction(s) where the Sink Balancing Authority is designating the

Adopted by Board of Trustees: October 29, 2008

1

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...

WECC Standard BAL-002-WECC-1 — Contingency Reserves
transaction(s) as a resource to meet its Contingency Reserve
requirements. These types of transactions could be designated as either
spinning or non-spinning reserves. If designated as Spinning Reserves,
all of the requirements of section R2.1 & R2.2 must be met.
R2. Each Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group shall maintain at least half of the Contingency Reserve in R1.1 as
Spinning Reserve. Any Spinning Reserve specified in R1 shall meet the following
requirements. [Violation Risk Factor: High] [Time Horizon: Real-time Operations]
R2.1.

Immediately and automatically responds proportionally to frequency
deviations, e.g. through the action of a governor or other control
systems.

R2.2.

Capable of fully responding within ten minutes.

R3. Each Reserve Sharing Group or Balancing Authority shall use the following acceptable
types of reserve which must be fully deployable within 10 minutes of notification to
meet R1: [Violation Risk Factor: Medium] [Time Horizon: Real-time Operations]
R3.1.

Spinning Reserve

R3.2.

Interruptible Load;

R3.3.1.2

Comprised of any combination of the reserve types specified below:
•
•
•

Operating Reserve – Spinning
Operating Reserve - Supplemental
Interchange Transactions designated by the sourceSource
Balancing Authority as non-spinning contingency reserve;Operating
Reserve – Supplemental

R3.4.

Reserve held by other entities by agreement that is deliverable on Firm
• Transmission Service;

R3.5.

An amount of off-line generation which can be synchronized and
generating; or
•
•

•

R3.6.
LoadA resource, other than generation or load, that can
provide energy or reduce energy consumption
Load, including demand response resources, Demand-Side
Management resources, Direct Control Load Management,
Interruptible Load or Interruptible LoadDemand, or any other Load
made available for curtailment by the Balancing Authority or the
Reserve Sharing Group via contract or agreement.
All other load, not identified above, once the Reliability
Coordinator has declared a capacity or an energy emergency. alert
signifying that firm load interruption is imminent or in progress.

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C. Measures
1.3 Based on real-time hourly load and generating energy values averaged over
each Clock Hour (excluding Qualifying Facilities covered in 18 C.F.R.§
292.101, as addressed in FERC Order 464).
1.4 An amount of capacity from a resource that is deployable within ten minutes.
M1. The

Each Balancing Authority and each Reserve Sharing Group orwill have

...

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documentation demonstrating its Contingency Reserve was maintained, except
within the first sixty minutes following an event requiring the activation of
Contingency Reserve.
Part 1.1
Each Balancing Authority that is not a member of aand each Reserve Sharing
Group haswill have dated documentation that demonstrates its Contingency
Reserve was maintained in accordance with the amounts identified in
Requirement R1, Part 1.1, except within the first sixty minutes following an event
requiring the activation of Contingency Reserve.

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Attachment A is a practical illustration showing how the generation amount may
be calculated under Requirement R1.

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•

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•

Where Dynamic Schedules are used as part of the generation amount
upon which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1 may include, but is not limited
to, documentation showing a reciprocal acknowledgement as to which
entity is carrying the reserves. This transfer may be all or some portion of
the physical generator and is not limited to the entire physical capability
of the generator.

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Where Pseudo-Ties are used as part of the generation amount upon
which Contingency Reserve is predicated, additional evidence of
compliance with Requirement R1, Part 1.1, may include, but is not
limited to, documentation accounting for the transfers included in the
Pseudo-Ties.

Part 1.2

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Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.2.
Evidence may include, but is not limited to, documentation that reserves were
comprised of the types listed in Requirement R1, Part 1.2 for purposes of
meeting the Contingency Reserve obligation of Requirement R1. Additionally, for
purposes of the last bullet of Requirement R1, Part 1.2, evidence of compliance
may include, but is not limited to, documentation that the reliability coordinator
had issued an energy emergency alert, indicating that firm Load interruption was
imminent or was in progress.

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Part 1.3

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Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates compliance with Requirement R1, Part 1.3.
Evidence of compliance with Requirement R1, Part 1.3 may include, but is not
limited to, documentation that Contingency Reserve amounts are based upon
load and generating data averaged over each Clock Hour and excludes
Qualifying Facilities covered in 18 C.F.R.§ 292.101, as addressed in FERC
Order 464.
Part 1.4
Evidence of compliance with Requirement R1, Part 1.4 may include, but is not

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limited to, documentation that the reserves maintained to comply with
Requirement R1, Part 1.4 are fully deployable within ten minutes.
R2.

M2.

Each Balancing Authority and each Reserve Sharing Group shall maintain at
least half of its minimum amount of Contingency Reserve identified in
Requirement R1, as Operating Reserve – Spinning that meets both of the
following reserve characteristics. [Violation Risk Factor: High] [Time Horizon:
Real-time operations]
2.1

Reserve that is immediately and automatically responsive to frequency
deviations through the action of a governor or other control system;

2.2

Reserve that is capable of fully responding within ten minutes.

Each Balancing Authority and each Reserve Sharing Group will have dated
documentation that demonstrates it maintained 100% of required Contingency
Reserve levels based upon data integrated over each clock hour except within the firstat
least half of the Contingency Reserve identified in Requirement R1 as Operating
Reserve – Spinning, averaged over each Clock Hour, that met both of the
reserve characteristics identified in Requirement R2, Part 2.1 and Requirement
R2, Part 2.2.
105 minutes (15 minute Disturbance Recovery Period, plus 90 minute Contingency
Reserve Restoration Period) following an event requiring the activation of Contingency
Reserves. For each hour Reserve Sharing Group or Balancing Authority shall have and
provide upon request their Contingency Reserve Requirement in MW, how the
requirement was calculated, and amount of Contingency Reserve available in MW. Etags and/or contracts shall be provided to document any transactions under R1.2 and
R1.3.

M2. The Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group has documentation that it maintained at least 100% of minimum
Spinning Contingency Reserve required based upon data averaged over each clock
hour except within the first 105 minutes following an event requiring the activation of
Contingency Reserves. For each hour, Reserve Sharing Group or Balancing Authority

Adopted by Board of Trustees: October 29, 2008

2

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WECC Standard BAL-002-WECC-1 — Contingency Reserves
that is not a member of a Reserve Sharing Group shall have and provide upon request
the Spinning Reserve Requirement in MW and amount of Spinning Reserve available
in MW that is automatically responsive to frequency and can be fully deployed in 10
minutes.
M3. The Reserve Sharing Group or Balancing Authority that is not a member of a Reserve
Sharing Group has documentation that it used the acceptable types of reserve for each
hour to meet R3.
M3.1

R3.

M3.

R4.

M4.

Any Reserve Sharing Group or Balancing Authority utilizing Load other than
Interruptible Load shall submit documentation demonstrating that the
Reliability Coordinator declared a Capacity and/or Energy Emergency prior to
utilizing Load for Contingency Reserves.

D.
Each Sink Balancing Authority and each sink Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve in Requirement R1, equal to the amount of Operating
Reserve–Supplemental for any Interchange Transaction designated as part of
the Source Balancing Authority’s Operating Reserve–Supplemental or source
Reserve Sharing Group’s Operating Reserve–Supplemental, except within the
first sixty minutes following an event requiring the activation of Contingency
Reserve. [Violation Risk Factor: High] [Time Horizon: Real-time operations]

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Each Sink Balancing Authority and each sink Reserve Sharing Group will have
dated documentation demonstrating it maintained an amount of Operating
Reserve, in addition to the Contingency Reserve identified in Requirement R1,
equal to the amount of Operating Reserve–Supplemental for any Interchange
Transaction designated as part of the Source Balancing Authority’s Operating
Reserve–Supplemental or source Reserve Sharing Group’s Operating Reserve–
Supplemental, for the entire period of the transaction, except within the first sixty
minutes following an event requiring the activation of Contingency Reserves, in
accordance with Requirement 3.

Formatted

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...

Each Source Balancing Authority and each source Reserve Sharing Group shall
maintain an amount of Operating Reserve, in addition to the minimum
Contingency Reserve amounts identified in Requirement R1, equal to the
amount and type of Operating Reserves for any Operating Reserve transactions
for which it is the Source Balancing Authority or source Reserve Sharing Group.
[Violation Risk Factor: High] [Time Horizon: Real-time operations]

Formatted

...

Each Source Balancing Authority and each source Reserve Sharing Group will
have dated documentation that demonstrates it maintained an amount of
additional Operating Reserves identified in Requirement R1, greater than or
equal to the amount and type of that identified in Requirement 4, for the entire
period of the transaction.

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C. Compliance

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1. Compliance Monitoring Process
1.1

Compliance Monitoring Responsibility

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1.1

Compliance Enforcement Authority

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For entities that do not work for the Regional Entity, the Regional Entity
shall serve as the Compliance Enforcement Authority.
For Reliability Coordinators and other functional entities that work for their
Regional Entity, the ERO or a Regional Entity approved by the ERO and
FERC or other applicable governmental authorities shall serve as the
Compliance Enforcement Authority.
For responsible entities that are also Regional Entities, the ERO or a
Regional Entity approved by the ERO and FERC or other applicable
governmental authorities shall serve as the Compliance Enforcement
Authority.

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1.2

Compliance Monitoring Periodand Assessment Processes:
The Compliance Enforcement Authority may use one or more of the following
methods to assess compliance:

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- Reports conducted quarterly

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- Spot check audits conducted anytime with 30 days notice given to prepare

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- Periodic audit as scheduled by the Compliance Audit

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Self-Certification

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Spot Checking

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Compliance Enforcement AuthorityInvestigation

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- Investigations
- Other methods as provided for in the Compliance Monitoring Enforcement
Program
Reserve Sharing Groups and Self-Reporting
Complaint
1.3

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Evidence Retention
The following evidence retention periods identify the period of time an entity
is required to retain specific evidence to demonstrate compliance. For
instances where the evidence retention period specified below is shorter
than the time since the last audit, the Compliance Enforcement Authority
may ask an entity to provide other evidence to show that it was compliant
for the full time period since the last audit.

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Each Balancing Authorities shall submit to their Compliance Enforcement
Authority a Contingency Reserve verification report on or before the tenth
business day following the end of Authority and each calendar quarter.

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1.2.1

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Compliance Monitoring Period: One Clock Hour.

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1.2.2
1.3

The Performance-reset Period is calendar quarter.

Data Retention

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Reserve Sharing Groups and Balancing AuthoritiesGroup shall keep evidence
for Measure M.1Requirement R1 through M3R4 for three years plus calendar
current, or since the last audit, whichever is longer.
1.4.

Additional Compliance Information
1.4.1. This Standard shall apply to aeach Balancing Authority and each
Reserve Sharing Group that has registered with the WECC as
provided in Part 1.4.2 of Section 1.4.2, and eachC.
Each Balancing Authority identified in the registration with WECC as
provided in Part 1.4.2 of Section C shall be responsible for compliance
with this

Adopted by Board of Trustees: October 29, 2008

3

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WECC Standard BAL-002-WECC-1 — Contingency Reserves
Standard through its participation in the Reserve Sharing Group and not on
an individual basis.
1.4.2. A Reserve Sharing Group may register as the Responsible Entity for
purposes of compliance with this Standard by providing written notice
to the WECC
(a: 1) indicating that the Reserve Sharing Group is registering as the
Responsible Entity for purposes of compliance with this Standard,
(b2) identifying each Balancing Authority that is a member of the
Reserve Sharing Group, and (c3) identifying the person or
organization that will serve as agent on behalf of the Reserve Sharing
Group for purposes of communications and data submissions related
to or required by this Standard.

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1.4.3. If an agent properly designated in accordance with Part 1.4.2 of
Section 1.4.2C identifies individual Balancing Authorities within the
Reserve Sharing Group responsible for noncompliance at the time of
data submission, together with the percentage of responsibility
attributable to each identified Balancing Authority, then, except as may
otherwise be finally determined through a duly conducted review or
appeal of the initial finding of noncompliance, (a: 1) any penalties
assessed for noncompliance by the Reserve Sharing Group shall be
allocated to the individual Balancing Authorities identified in the
applicable data submission in proportion to their respective
percentages of responsibility as specified in the data submission, (b2)
each Balancing Authority shall be solely responsible for all penalties
allocated to it according to its percentage
of responsibility as provided in subsection (a1) of this Part 1.4.3 of
Section 1.4.3C, and (c3) neither the Reserve Sharing Group nor any
member of the Reserve Sharing Group shall be responsible for any
portion of a penalty assessed against another member of the Reserve
Sharing Group in accordance with subsection (a1) of this Part 1.4.3 of
Section 1.4.3C (even if the member of Reserve Sharing Group
against which the penalty is assessed is not subject to or otherwise fails to
pay its allocated share of the penalty).
1.4.4. If an agent properly designated in accordance with Part 1.4.2 of
Section 1.4.2C fails to identify individual Balancing Authorities within
the Reserve Sharing Group responsible for noncompliance at the time
of data submission or fails to specify percentages of responsibility
attributable to each identified Balancing Authority, any penalties for
noncompliance shall be assessed against the agent on behalf of the
Reserve Sharing Group, and it shall be the responsibility of
the members of the Reserve Sharing Group to allocate responsibility for
such noncompliance.
1.4.5. Any Balancing Authority that is a member of a Reserve Sharing
Group that has failed to register as provided in Part 1.4.2 of Section
1.4.2C shall be subject to this Standard on an individual basis.

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2. Violation Severity Levels for Requirement R1
2.1. Lower: There shall be a Lower Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 100% but greater than or equal

Adopted by Board of Trustees: October 29, 2008

4

WECC Standard BAL-002-WECC-1 — Contingency Reserves
to 90% of the required Contingency Reserve.
2.2. Moderate: There shall be a Moderate Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 90% but greater than or equal to
80% of the required Contingency Reserve.
2.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority's or the Reserve Sharing
Group's Contingency Reserve is less than 80% but greater than or equal to 70% of
the required Contingency Reserve.
2.4. Severe: There shall be a Severe Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Contingency Reserve is less than 70% of the required
Contingency Reserve.
3. Violation Severity Level for Requirement R2
3.1 Lower: There shall be a Lower Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 100% but greater than or equal to
90% of the required Spinning Reserve.
3.2. Moderate: There shall be a Moderate Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 90% but greater than or equal to
80% of the required Spinning Reserve.
3.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority's or the Reserve Sharing
Group's Spinning Reserve is less than 80% but greater than or equal to 70% of the
required Spinning Reserve.
3.4. Severe: There shall be a Severe Level of non-compliance if there is one hour
during a calendar month in which the Balancing Authority's or the Reserve
Sharing Group's Spinning Reserve is less than 70% of the required Spinning
Reserve.
4. Violation Severity Level for Requirement R3
4.1 Lower: Not Applicable
4.2. Moderate: Not Applicable
4.3. High: There shall be a High Level of non-compliance if there is one hour during a
calendar month in which the Balancing Authority or Reserve Sharing Group used
unacceptable resources for Contingency Reserves.
4.4. Severe: Not Applicable
Version History — Shows Approval Histor y and Summary of Changes in the Action Field

Adopted by Board of Trustees: October 29, 2008

5

WECC Standard BAL-002-WECC-1
Contingency Reserve

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WECC Standard BAL-002-WECC-1 — Contingency Reserves

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12

WECC Standard BAL-002-WECC-1
Contingency Reserve

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Table of Compliance Elements
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Change TrackingViolation Severity Levels

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Lower VSL

Moderate VSL

High VSL

Severe VSL

BALSTD002-0
R1

R2

Real-time
Operations

Real-time
Operations

High

High

The Balancing
Authority or the
Reserve Sharing
Group that incurs
one Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but
greater than or
equal to 90% of
the required
Contingency
Reserve amount,
with the
characteristics
specified in
Requirement R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock

Developed as WECC-0083

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 90% but
greater than or
equal to 80% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one Clock
Hour, during a
calendar month,
in which
Contingency
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Contingency
Reserve
amount, with the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
Clock Hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the
required
Contingency
Reserve
amount, with
the
characteristics
specified in
Requirement
R1.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
13

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WECC Standard BAL-002-WECC-1
Contingency Reserve

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Lower VSL

Moderate VSL

High VSL

Severe VSL

Hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 100% but
greater than or
equal to 90% of
the required
Operating
Reserve–
Spinning amount
specified in
Requirement R2,
and both
characteristics
were met.

Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 90% but
greater than or
equal to 80% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

Clock Hour,
during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both
characteristics
were met.

Clock Hour,
during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve Spinning is less
than 70% of the
required
Operating
Reserve–
Spinning
amount
specified in
Requirement
R2, and both

The Balancing
Authority or the
Reserve Sharing
Group that
incurs one hour,
during a
calendar month,
in which
Contingency
Reserve is less
than 100% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 90% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve is less
than 80% but

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve is less
than 70% of the

BALSTD002-0

R3

Real-time
Operations

High

Developed as WECC-0083

characteristics
were met.

14

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WECC Standard BAL-002-WECC-1
Contingency Reserve

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space between Asian text and numbers

Lower VSL

Moderate VSL

High VSL

Severe VSL

greater than or
equal to 90% of
the required
Operating
Reserve amount
specified in
Requirement R3.

greater than or
equal to 80% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R3.

required
Operating
Reserve
amount
specified in
Requirement
R3.

The Balancing
The Balancing
Authority or the
Authority or the
Reserve Sharing Reserve
Group that
Sharing Group
incurs one hour, that incurs one
during a
hour, during a
calendar month, calendar month,
in which
in which
Contingency
Contingency
Reserve
Reserve
Operating
Operating
Reserve is less
Reserve is less
than 100% but
than 90% but
greater than or
greater than or
equal to 90% of
equal to 80% of
the required
the required
Operating
Operating
Reserve amount Reserve
specified in
amount
Requirement R4. specified in
Requirement
R4.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar
month, in which
Contingency
Reserve
Operating
Reserve is less
than 80% but
greater than or
equal to 70% of
the required
Operating
Reserve
amount
specified in
Requirement
R4.

The Balancing
Authority or the
Reserve
Sharing Group
that incurs one
hour, during a
calendar month,
in which
Contingency
Reserve
Operating
Reserve is less
than 70% of the
required
Operating
Reserve
amount
specified in
Requirement
R4.

BALSTD002-0

R4

Real-time
Operations

High

Developed as WECC-0083

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15

WECC Standard BAL-002-WECC-1
Contingency Reserve

Formatted: Centered, Tab stops: 3.25",
Centered + 6.5", Right
Formatted: Font: 10 pt

Adopted by Board of Trustees: October 29, 2008

6D.

Regional Variances

None.
E. Interpretations
Developed as WECC-0083

16

WECC Standard BAL-002-WECC-1
Contingency Reserve

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None.
F. Associated Documents
None.

Developed as WECC-0083

17

WECC Standard BAL-002-WECC-1
Contingency Reserve

Formatted: Centered, Tab stops: 3.25",
Centered + 6.5", Right

Attachment A

Formatted: Font: 10 pt

Attachment A is illustrative only; it is not a requirement. Requirement R1 calls for an amount
of Contingency Reserve to be maintained, predicated on an amount of generation and load
required in Requirement R1, Part 1.1., specifically:
“1.1 The greater of either:
•
•

The amount of Contingency Reserve equal to the loss of the most
severe single contingency;
The amount of Contingency Reserve equal to the sum of three
percent of hourly integrated Load plus three percent of hourly
integrated generation.”

Attachment A illustrates one possible way to account for and calculate the amount of
generation upon which the Contingency Reserve amount is predicated.
Below is a practical illustration showing how the generation amount may be calculated under
Requirement R1 for Balancing Authorities (BA) and Reserve Sharing Groups (RSG).
BA1 / RSG 1

Generation

Generator 1
Generator 2
Generator 3 (Pseudo-Tied out to BA2)
Generator 4 QF (has backup contract)
Generator 5 QF in EMS
Generator 6

300 MWs online
200 MWs online
100 MWs online
10 MWs online
10 MWs online
0 MWs online

Part of Generator
Yes
Yes
No
No
Yes
Yes

Dynamic Schedule to BA2 from BA1 1

(50 MWs)

Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

620 MWs
(The sum of gen 1-6)
510 MWs
(The sum of gen 1, 2, and 5)
460 MWs** (The sum of gen 1, 2 and 5
minus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would maintain reserves based on 510 MWs Generation.

BA2 / RSG2
Generator 11
1

Generation

Part of Generator

100 MWs

Yes

Note: This Dynamic Schedule is not the same as the Generator 3 Pseudo-Tie.

Developed as WECC-0083

18

WECC Standard BAL-002-WECC-1
Contingency Reserve

Generator 12
Generator 3 (Pseudo-Tied in from BA1)
Dynamic Schedule from BA1 to BA2
Generation
BA generation (EMS)
Generation to use Under BAL-002-WECC-1

Formatted: Centered, Tab stops: 3.25",
Centered + 6.5", Right

100 MWs
100 MWs

Yes
Yes

50 MWs

Yes

Formatted: Font: 10 pt

300 MWs
(The sum of gen 11, 12 and 3.)
300 MWs
(The sum of gen 11, 12 and 3)
350 MWs** (The sum of gen 11, 12 and 3
plus Dynamic Schedule)

** Assumes BA1 and BA2 agree on Dynamic Schedule treatment. If no agreement, BA1
would have to maintain reserves based on 510MWs Generation and BA2 would determine its
generation to be 300 MWs.

Developed as WECC-0083

19

WECC Standard BAL-002-WECC-1
Contingency Reserve

Formatted: Centered, Tab stops: 3.25",
Centered + 6.5", Right
Formatted: Font: 10 pt

Guideline and Technical Basis
A Guidance Document addressing implementation of this standard has been filed with this
standard.

Formatted: Default, Indent: Left: 0", Space
Before: Auto, After: Auto, Don't add space
between paragraphs of the same style,
Widow/Orphan control, Adjust space between
Latin and Asian text, Adjust space between
Asian text and numbers, Tab stops: Not at
5.99"
Formatted: Font: 12 pt

Developed as WECC-0083

20

Implementation Plan
BAL-002-WECC-2
Contingency Reserve
Attachment E

Standards Authorization Request
http://www.wecc.biz/Standards/Development/Lists/Request%20Form/DispForm.as
px?ID=83&Source=/Standards/Development

Approvals Required
BAL-002-WECC-2
Contingency Reserve
Prerequisite Approvals
On May 18, 2012, the WECC Ballot Pool approved the standard during the April 2,
2012, through May 18, 2012, ballot window. Results of that ballot can be found here. A
summary of those results follows.
Ballot Name:
Ballot Period:
Total # Votes:
Total Ballot Pool:
Quorum:
Weighted Sector
Vote:
Ballot Results:

BAL-002-WECC-2 Modification to BAL-002-WECC-1
Contingency Reserve
4/2/2012 - 5/18/2012
158
174
90.8%
80.6%
The standard has passed

On May 21, 2012, the WECC Standards Committee approved forwarding the standard
to the WECC Board of Directors. A summary of that approval follows.
Name

Organization

Sector

Angela Small
Crystal

NAES
Proven

2 Generation
8 Other Non-

Yes

X
X

No

Abstain

A vote
was
not
cast

Musselman
Dana
Cabbell
Gregory
Maxfield
Jerry Murray

John Meyer

Joseph
Tarantino
Glen
Hoisington
Rick Noger

Compliance
Solutions
Southern
California
Edison
PacifiCorp
Oregon
Public Utility
Commission
Non-Affiliate
Director /
WSC Chair
Sacramento
Municipal
Utility District
FEUS
Praxair

Registered
Entities
1 Transmission

3 Marketers and
Brokers
7 State and
Provincial
Representatives
Board

5 System
Coordination

X

X
X

X

X

4 Distribution
6 End User
Representative
Sector

X
X

On June 26, 2012, the WECC Board of Directors approved the standard during the
WECC June 2012 Board meeting. The WECC Board of Directors voting summary can
be found here.

Applicable Entities
Balancing Authority
Reserve Sharing Group
Conforming Changes to Other Standards
None required as BAL-002-WECC-2 is designed to modify BAL-002-WECC-1 in
accordance with FERC Order 740, and to replace BAL-STD-002-0 upon the Effective
Date of BAL-002-WECC-2.
Effective Date
On the first day of the third quarter, after receipt of applicable regulatory approval.

Justification of Effective Date
BAL-002-WECC-2 may require execution of contracts by some entities before
implementation can occur. In response to comments and requests from the field, the
drafting team opted for the above Effective Date as a means to allow applicable entities
to finalize needed contracts.
Consideration of Early Compliance
BAL-002-WECC-2 predominately addresses the types and amounts of Contingency
Reserve required of the applicable entities, based upon three percent of load and three
percent of generation. Should the applicable entities opt for early compliance, there is
no empirical evidence suggesting a decrease in reliability as the amount of Contingency
Reserve required under the proposed standard approximates the amount of
Contingency Reserve already being maintained.
Retirements
BAL-002-WECC-2 is designed to modify BAL-002-WECC-1 in accordance with FERC
Order 740, and to replace BAL-STD-002-0 upon the Effective Date of BAL-002-WECC2.

Name (6 Responses)
Organization (6 Responses)
Group Name (4 Responses)
Lead Contact (4 Responses)
Question 1 (10 Responses)
Question 1 Comments (10 Responses)
Question 2 (10 Responses)
Question 2 Comments (10 Responses)
Question 3 (10 Responses)
Question 3 Comments (10 Responses)
Question 4 (9 Responses)
Question 4 Comments (10 Responses)
Question 5 (10 Responses)
Question 5 Comments (10 Responses)

Individual
Keira Kazmerski
Xcel Energy
Yes
No
The proposed standard addresses the shortcomings of the existing standard as it relates to
commercial impacts and reliability issues while maintaining a reserve requirement comparable to the
existing requirement. The existing standard pits Balancing Authority operators against non-Balancing
Authority owned generation and raises questions as to what is and is not allowed when it comes to
selling “firm” power from these generators. The proposed standard removes this issue from the
standard and allows the Balancing Authority operator to determine the reserve quantity without
having to know each transaction’s impact to the reserve requirement.
No

Yes
Group
Bonneville Power Administration
Chris Higgins
Yes
No
No
No
Yes
Group
Salt River Project
Chris Chavez
Yes

No
No
No
Yes
Individual
Claire Lloyd
Tacoma Power
Yes
Tacoma Power acknowledges that the proposed new WECC standard was developed and routed
through the WECC and subsequently through the NERC process. Tacoma Power has not supported
this proposed new WECC standard due to the fact that it will produce approximately the same amount
of total contingency operating reserves, yet it will make a significant shifting of the contingency
reserve obligation between the entities, including new entities. This shifting of the contingency
reserve obligation has not been shown to be a benefit to the interconnection and is unnecessary.
No
Tacoma Power does not know of any adverse impact to any neighboring region or interconnection.
No
Tacoma Power notes that the contingency reserve obligation will be shifted between the entities under
the proposed new WECC standard. We do not have the expertise to determine if there is any serious
or substantial threat to public health, safety, welfare, or national security due to the shifting of
contingency reserve obligation between the entities.
Yes
As Tacoma Power has stated above, this proposed new WECC standard shifts the contingency reserve
obligation between the entities in WECC. Due to this shift, new or different relationships will have to
be created. Cost causation principles will create new issues for the entities such that the entities that
are responsible for providing the new contingency reserve obligations are truly held responsible. New
contracts will have to be executed between these new entities and the balancing authorities, and
there is no guarantee of agreement.
Yes
Tacoma Power believes that at least one of the criteria is met. However, that does not mean it is the
right thing to do. We believe that this proposed new WECC standard has a significant shift in the
contingency reserve obligation without any demonstrated benefits and no increased reliability. We
urge you to not approve the proposed new WECC standard. Thank you for consideration of our
comments.
Group
PacifiCorp
Sandra Shaffer
Yes
No
No
No
While PacifiCorp does not believe the proposed standard would pose a serious and subsantial burden
on existing competitive markets, we do believe that it may lead to the creation of a new market
product.

Yes
Individual
Mark B Thompson
Alberta Electric System Operator
Yes
No
The AESO does not agree with the FERC assessment that an EEA3 level is the appropriate level for a
supply shortfall situation when using firm load as reserves. An EEA3 is defined as – firm load
curtailment is immanent or in progress. The AESO does not believe that using firm load as reserves,
in this situation, is an “imminent” firm load curtailment (R 1.2 last bullet). NERC EOP-002-3
Attachment 1 supports this position.
No
No
Yes
Individual
Mike Goodenough
Powerex
Yes
Yes
The elimination of the requirement to carry additional reserves for interruptible imports may be a step
backward in relaibility until such time that the issue of reserve requirements associated with
interruptible imports is addressed in some way, either through another standard development process
or a regional criteria that specifically identifies the operating reserves required for interruptible
imports.
No
No
Yes
Individual
Richard Vine
California ISO
Yes
No
No
No
Though the proposed standard may not pose a "serious and substantial" burden on competetive
markets, the ISO feels that (1)the proposed recovery period is more burdensome than necessary and
(2) more clarity should be provided as to allowed technology to meet operating reserve requirements
as follows: 1. The ISO believes the last sentence in Measurements M1.1, M2 and M3 should be

modified to indicate that the 60-minute recovery period begins when the DCS event is over, at the
end of the allowed 15-minute recovery period. This would be consistent with what is allowed by the
NERC BAL-002-0 Standards which specifically states that "The Contingency Reserve Restoration
Period begins at the end of the Disturbance Recovery Period." The current wording "within 60 minutes
of the event” is too vague and has been interpreted by the drafting team to mean "from the start of
the event." This interpretation would mean that WECC entities have only 45 minutes after the
recovery period to restore reserves which is only half of the 90 minutes Eastern entities would have.
This seems overly burdensome and will continue to be an ever greater challenge as we increase the
levels of intermittent renewables going forward. 2. The proposed Requirement R2 in BAL-002-WECC-1
requires that at least half of the Contingency Reserve obligation be "Operating Reserve - Spinning",
which is in the NERC Glossary of Terms. The problem is that the NERC definition of "Operating
Reserve - Spinning" focuses on generation and demand response, which raises doubt as to whether a
battery or other form of energy storage could be used. In keeping with the spirit that FERC has made
clear that Reliability Standards should not dictate the type of technology used to meet a reserve
requirement NERC should consider revising the definition of "Operating Reserve - Spinning" to ensure
this is understood.
Yes
Individual
Tina Gary
Portland General Electric Company
Yes
Although the process has been open, WECC disregarded some major concerns voiced by the industry.
Portland General Electric Company (PGE) is concerned that the consequences of the proposed
standard were not fully considered and worry that the standard will have a negative impact on the
reliability of the BES in the Western region. The reliability concerns with the standard must be
addressed before it is approved for use by the industry. Under WECC rules, a proposed standard is
submitted to NERC with only a simple majority, potentially telephonic, vote of the WECC standing
committee membership. This process differs from that used by NERC, which will not pass a standards
revision without a 70% weighted majority of members approving the proposed standard. During the
2011 balloting of subject matter experts and the standing committee, the proposal failed and the
WECC Board sent the proposal back to the drafting committee to address issues presented in the “No”
vote statements. However, the proposal is now up for comment simultaneously within both WECC and
NERC without adequately addressing the concerns of the voting members.
Yes
PGE is concerned that the proposed standard puts the responsibility to provide reserves in part on the
Sink Balancing Authorities (BAs)/Load Serving Entities (LSEs), which are subject to an immature
bilateral market for acquisition of said reserves. If Sink BAs / LSEs are not able to acquire the
proposed reserve level, they could be forced to shed load to remain compliant with the proposed
standard. There is a fundamental difference between the acquisition of reserves in an organized
market compared to a bilateral market such as that prominent in the WECC region. In a bilaterally
based market, because generators are not subject to must-run requirements and are not required to
offer their generation into the market, Sink BAs /LSEs do not have assured access to spinning and
non-spinning capacity. Therefore, reserve requirements are currently maintained by the generators in
the majority of the WECC region. Generators are the only entities that have the assured ability,
without shedding load, to respond to contingency events. The transfer of reserve obligation from
generators to load is an unnecessary cost shift from the parties physically able to perform, to parties
that must contract. Moreover, even if a contracting party is able to secure reserves, there would be
no assurance that they could secure transmission on a system encumbered due to the requirements
of the proposed standard. Simply put, the proposed BAL-002-WECC-01 shifts costs with no associated
increase in reliability, and would potentially reduce reliability and increase transmission constraints in
the WECC region.
No
Yes

• PGE is concerned with the movement toward unnecessary changes to an approved reliability
standard as proposed in BAL-002-WECC-1 that will not result in increased reliability. The changes
made through BAL-002-WECC-1 go beyond the language clarity and consistency required by FERC in
the 2007 Order (RR07-11) and seem to be driven more by the economic interests to shift contingency
reserve responsibility (i.e. costs) from the generators to the loads rather than improving reliability.
Changes to reliability standards should be driven by technical merit weighed against overall costs. The
standards process should not be used as a lever to shift costs among members. • The current "Tier
One" BAL-STD-002-0 reflects the longstanding WECC Minimum Operating Reliability Criteria (MORC)
by breaking down required operating reserve into four components: regulating reserve, contingency
reserve, reserve for on-demand obligations, and reserves for interruptible imports. However, the
proposed BAL-002-WECC-1 narrows the scope to only contingency reserve, which raises the question
of what happens to the other components. In the time since the initial comment period on BAL-002WECC-1, WECC has retired the WECC MORC with some parts preserved as new “criteria”. However,
the reserve requirements for interruptible schedules and on-demand rights/obligations were not
preserved. The passage of the proposed BAL-002-WECC-1 and the retirement of the WECC MORC
would remove any explicit reserve requirements for interruptible schedules and on-demand
rights/obligations. The effect of this can only be a step down in the reliability of the interconnected
system. • The clarification of "load responsibility" and e-tag 1.8 helped characterize the nature of the
transactions. For the "sink" BA, it identified those imports that were "firm for the hour". The simplified
calculation of contingency reserve in BAL-002-WECC-1 does NOT consider the responsibility of the BA
to anticipate which imports might be interrupted in-hour, and therefore the quantity of additional
reserves that need to be available. Under BAL-002-WECC-1 everyone will be forced to parse the
energy codes to infer what energy is "firm for the hour". BAL-002-WECCC-1 should require continued
use of the "load responsibility" feature in e-tag 1.8 to clearly identify those transactions that are not
"firm for the hour". • Despite industry-voiced concerns over the difficulty of interpreting "load
responsibility", BAL-002-WECC-1 is saddled with the term "interruptible load". Such poorly defined
terms put the BA in a position to judge whether or not loads offered up by an LSE meet the contract
requirements of being "interruptible". • BAL-002-WECC-1 is assuming a robust reserves market in the
West. The West does not have a mature reserves market. This new standard will put additional
burden on the load serving entities by forcing them to procure reserves, if available, from third
parties in order to meet the new standard. PGE is concerned this requirement will increase demand
for capacity across constrained transmission without any beneficial increase in reliability. • PGE is
concerned that the proposed standard puts the responsibility to provide reserves in part on the Sink
Balancing Authorities (BAs)/Load Serving Entities (LSEs), which are subject to an immature bilateral
market for acquisition of said reserves. If Sink BAs / LSEs are not able to acquire the proposed
reserve level, they could be forced to shed load to remain compliant with the proposed standard.
There is a fundamental difference between the acquisition of reserves in an organized market
compared to a bilateral market such as that prominent in the WECC region. In a bilaterally based
market, because generators are not subject to must-run requirements and are not required to offer
their generation into the market, Sink BAs /LSEs do not have assured access to spinning and nonspinning capacity. Therefore, reserve requirements are currently maintained by the generators in the
majority of the WECC region. Generators are the only entities that have the assured ability, without
shedding load, to respond to contingency events. The transfer of reserve obligation from generators
to load is an unnecessary cost shift from the parties physically able to perform, to parties that must
contract. Moreover, even if a contracting party is able to secure reserves, there would be no
assurance that they could secure transmission on a system encumbered due to the requirements of
the proposed standard. Simply put, the proposed BAL-002-WECC-01 shifts costs with no associated
increase in reliability, and would potentially reduce reliability and increase transmission constraints in
the WECC region.
Yes
a. While the proposed standard has more specificity than the continent-wide standard, the proposed
standard’s increased specificity has not been proven to provide additional reliability or clarity than the
existing regional reliability standard. b. The proposed standard does not include requirements that are
not included in the corresponding continent-wide reliability standard that are not already contained
within the existing regional reliability standard. c. The proposed standard does not consider the
differences between the bulk of WECC’s operational model (i.e., a bilateral path based model), and a
centrally managed flow based model. Ignoring the differences between the two models and
implementing the proposed standard would impose cost shifting with the potential for a reduced level

of reliability. The reduced liability would be due to reserve requirements being placed on entities that
have no assured ability to respond to contingency events without shedding load.
Group
NorthWestern Corporation
John Canavan
Yes
No
No
No
Yes

Consideration of Comments
Regional Reliability Standard BAL-002-WECC-1

The Regional Reliability Standard Drafting Team (Drafting Team) thanks all commentors who submitted
comments on the BAL-002-WECC-1 – Contingency Reserve (Order 740 Remand). 1 This standard was
posted for a 45-day public comment period from January 6, 2012 through February 20, 2012.
Stakeholders were asked to provide feedback on the standard and associated documents through a
special electronic comment form. There were 10 sets of comments, including comments from 13
different people from 10 companies representing six of the 10 Industry Segments as shown in the table
on the following pages.
All comments submitted may be reviewed in their original format on the standard’s project page:
http://www.nerc.com/filez/regional_standards/regional_reliability_standards_under_development.ht
ml
If you feel that your comment has been overlooked, please let us know immediately. Our goal is to give
every comment serious consideration in this process! If you feel there has been an error or omission,
you can contact the Vice President of Standards and Training, Mark Lauby, at 404-446-2560 or at
[email protected]. In addition, there is a NERC Reliability Standards Appeals Process.2

1

Developed as WECC-0083.

2

The appeals process is in the Reliability Standards Development Procedures: http://www.nerc.com/standards/newstandardsprocess.html.

Index to Questions, Comments, and Responses
1.

Do you agree the proposed standard is being developed in a fair and open process, using the
associated Regional Reliability Standards Development Procedure? …. ............................................ 5

2.

Does the proposed standard pose an adverse impact to reliability or commerce in a neighboring
region or interconnection? …. ............................................................................................................. 7

3.

Does the proposed standard pose a serious and substantial threat to public health, safety, welfare,
or national security? …. .................................................................................................................... 10

4.

Does the proposed standard pose a serious and substantial burden on competitive markets within
the interconnection that is not necessary for reliability? …. ............................................................ 12

5.

Does the proposed regional reliability standard meet at least one of the following criteria? …. .... 17
•
•
•

The proposed standard has more specific criteria for the same requirements covered in a
continent-wide standard
The proposed standard has requirements that are not included in the corresponding
continent-wide reliability standard
The proposed regional difference is necessitated by a physical difference in the bulk power
system.

Consideration of Comments: BAL-002-WECC-1

2

The Industry Segments are:
1 — Transmission Owners
2 — RTOs, ISOs
3 — Load-serving Entities
4 — Transmission-dependent Utilities
5 — Electric Generators
6 — Electricity Brokers, Aggregators, and Marketers
7 — Large Electricity End Users
8 — Small Electricity End Users
9 — Federal, State, Provincial Regulatory or other Government Entities
10 — Regional Reliability Organizations, Regional Entities

Group/Individual

Commenter

Organization

Registered Ballot Body Segment
1

1.

Group

Chris Higgins

Bonneville Power Administration

2

3

4

5

6

X

X

X

X

X
X

Additional Member Additional Organization Region Segment Selection
1. Bart

McManus

WECC 1

2. Fran

Halpin

WECC 5

3. Brenda

Anderson

WECC 6

2.
3.

Individual
Individual

Chris Chavez
Sandra Shaffer

Salt River Project
PacifiCorp

X
X

X
X

X
X

4.

Individual

John Canavan

NorthWestern Corporation

X

X

X

5.

Individual

Keira Kazmerski

Xcel Energy

X

X

X

X

6.

Individual

Claire Lloyd

Tacoma Power

X

X

X

X

X

7

8

9

10

Group/Individual

Commenter

Organization

Registered Ballot Body Segment
1

7.

Individual

Mark B Thompson

Alberta Electric System Operator

8.
9.

Individual
Individual

Mike Goodenough
Richard Vine

Powerex
California ISO

10.

Individual

Tina Gary

Portland General Electric Company

Consideration of Comments: BAL-002-WECC-1

2

3

4

5

6

7

X
X
X
X

X

X

X

4

8

9

10

1.

Do you agree the proposed standard is being developed in a fair and open process, using the associated Regional Reliability
Standards Development Procedure?

Summary Consideration:
Ten of the ten respondents agreed the proposed standard is being developed in a fair and open process, using the associated
Regional Reliability Standards Development Procedure. The Drafting Team appreciates the consensus.

Organization

Yes or No

Bonneville Power Administration

Yes

Salt River Project

Yes

PacifiCorp

Yes

NorthWestern Corporation

Yes

Xcel Energy

Yes

Tacoma Power

Yes

Consideration of Comments: BAL-002-WECC-1

Question 1 Comment

Tacoma Power acknowledges that the proposed new WECC standard was
developed and routed through the WECC and subsequently through the
NERC process. Tacoma Power has not supported this proposed new WECC
standard due to the fact that it will produce approximately the same amount
of total contingency operating reserves, yet it will make a significant shifting
of the contingency reserve obligation between the entities, including new
entities. This shifting of the contingency reserve obligation has not been
shown to be a benefit to the interconnection and is unnecessary.

5

Organization

Yes or No

Question 1 Comment

Response:
The Drafting Team notes and appreciates your consensus as to use of the process for developing the proposed standard
and commends Tacoma for its continued participation.
The Drafting Team also notes Tacoma’s concern that when changes are made to the reliability aspects of the grid via
implementation of reliability standards, these changes do not come without a shifting of obligation or cost. Further, the
Drafting Team acknowledges that as standards are implemented, cost shifting often occurs giving way to the argument
that the sole intent of the changes is financially motivated. Finally, the Drafting Team acknowledges that these facts are
no mystery to the industry and the processes for development of standards hold the potential to be used for financial as
opposed to reliability-related purposes.
The Drafting Team did consider the potential of cost shifting in a number of forums, largely in the early years of
developing this standard. This Drafting Team and its predecessors concluded that an even split of the burden between
generation and load was a reasonable approach, albeit, not the only possible approach.
Based on the evaluation of different alternatives to determine the allocation methodology, the Drafting Team determined
that this methodology had the least negative effect on the greatest number of entities. The Drafting Team acknowledges
that anytime there is a cost shift, some will incur greater costs, some will lower their costs, and some will remain revenue
neutral. Support or opposition for the shift generally depends on which side of the equation one falls.
As to this specific standard, the Drafting Team does not claim to know all the differences between those entities
dissuaded by the standard because it may harm their own profit and loss statements versus those in support of the
standard because its higher criteria bolsters reliability. Rather, the Drafting Team has endeavored to meet both the
mandates of Order 740 as well as the mandate to be responsive imposed by the Process for Developing and Approving
WECC Standards (Process). The Drafting Team is reluctant to meet one obligation without also meeting the other.
Alberta Electric System Operator

Yes

Consideration of Comments: BAL-002-WECC-1

6

Organization

Yes or No

Powerex

Yes

California ISO

Yes

Portland General Electric Company

Yes

Question 1 Comment

Although the process has been open, WECC disregarded some major
concerns voiced by the industry. Portland General Electric Company (PGE) is
concerned that the consequences of the proposed standard were not fully
considered and worry that the standard will have a negative impact on the
reliability of the BES in the Western region. The reliability concerns with the
standard must be addressed before it is approved for use by the
industry.Under WECC rules, a proposed standard is submitted to NERC with
only a simple majority, potentially telephonic, vote of the WECC standing
committee membership. This process differs from that used by NERC, which
will not pass a standards revision without a 70% weighted majority of
members approving the proposed standard. During the 2011 balloting of
subject matter experts and the standing committee, the proposal failed and
the WECC Board sent the proposal back to the drafting committee to
address issues presented in the “No” vote statements. However, the
proposal is now up for comment simultaneously within both WECC and
NERC without adequately addressing the concerns of the voting members.

Response:
The Drafting Team notes and appreciates your consensus as to use of the process for developing the proposed standard
and commends PGE for its continued participation.
The Drafting Team notes PGE’s concurrence that the process has been fair and open. Part of that process has been the
receipt, consideration, and response to PGE’s comments each time they have been submitted. The Drafting Team
suggests that disagreement with PGE’s position is not the same as disregarding PGE’s position. Noting that numerous
entities have commented on the document during its development, many of those entities are diametrically opposed to

Consideration of Comments: BAL-002-WECC-1

7

Organization

Yes or No

Question 1 Comment

PGE’s position. All positions cannot be accommodated; however, all positions are considered.
Noting PGE’s concurrence that the process has been fair and open, the Drafting Team points out that although the
WECC process differs from the NERC process it still maintains a number of required tiered approvals before the
document can be finally approved. Specifically, solely within WECC, the Drafting Team, which is comprised of subject
matter experts, must first approve the document for forwarding to the Operating Committee. Thereafter, the Operating
Committee must approve of the document and subsequently the WECC Board of Directors must approve the document.
As for the document being forwarded through the process without regard to consideration of the NERC comments
received during this posting, that 45-day period closed on February 20, 2012. The Drafting Team met to review the
comments on February 23, 2012 before making any decision to move the document forward in the development process.
The Drafting Team assures PGE that PGE’s comments have been received, considered, and addressed. They have not
been disregarded.
Finally, as to the May 19, 2011 vote, as drafted at that time the standard was approved by a majority of the Transmission
Customers and failed by only three votes in the Transmission Providers category. Had those three votes been affirmative
the document would have moved forward without additional change. In response to the negative votes, the Drafting Team
considered the industry’s input, made a number of very positive changes, and believes the document as drafted now
addresses the majority of all “no” votes cast during the May 19, 2011 ballot.

Consideration of Comments: BAL-002-WECC-1

8

2. Does the proposed standard pose an adverse impact to reliability or commerce in a neighboring region or interconnection?
Summary Consideration: Of the ten respondents, eight stated the standard poses no adverse impact to reliability. Of the remaining
two, Powerex is concerned that interruptible imports will not be covered and PGE is concerned that markets and transmission might
not be available, and if available, this results in an unnecessary cost shift. As to Powerex, interruptible are addressed in R3 and R4.
As to PGE’s concerns, the team concluded that a mature capacity market does exist. As to the need for other markets to mature, the
team believes there is ample industry experience to indicate that a market will be made where the need for a market is expressed.

Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

NorthWestern Corporation

No

Xcel Energy

No

Question 2 Comment

The proposed standard addresses the shortcomings of the existing standard as it
relates to commercial impacts and reliability issues while maintaining a reserve
requirement comparable to the existing requirement. The existing standard pits
Balancing Authority operators against non-Balancing Authority owned generation and
raises questions as to what is and is not allowed when it comes to selling “firm”
power from these generators. The proposed standard removes this issue from the
standard and allows the Balancing Authority operator to determine the reserve
quantity without having to know each transaction’s impact to the reserve
requirement.

Response: The Drafting Team appreciates your support and concurs with your conclusion.

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Organization

Yes or No

Tacoma Power

No

Question 2 Comment
Tacoma Power does not know of any adverse impact to any neighboring region or
interconnection.

Response: The Drafting Team appreciated your support and concurs with your conclusion.
Alberta Electric System
Operator

No

The AESO does not agree with the FERC assessment that an EEA3 level is the
appropriate level for a supply shortfall situation when using firm load as reserves. An
EEA3 is defined as - firm load curtailment is immanent or in progress. The AESO does
not believe that using firm load as reserves, in this situation, is an “imminent” firm
load curtailment (R 1.2 last bullet). NERC EOP-002-3 Attachment 1 supports this
position.

Response: The Drafting Team appreciates AESO’s input regarding the issue of “EEA3.”
In FERC Order 740, P47, “NERC [agreed] with WECC that a reliability coordinator must declare a capacity or energy
emergency before firm load could be considered to maintain contingency reserves…” In answering that position, FERC
stated at P49, that “[B]alancing authorities and reserve sharing groups within WECC are subject to the same restrictions
regarding the use of firm load as contingency reserve as balancing authorities elsewhere operating under the continentwide Reliability Standard.”
To clarify the EEA3 issue, the proposed standard allows for Contingency Reserve to be comprised of “All other load…once
the Reliability Coordinator has declared an energy emergency alert signifying that firm load interruption is imminent or in
progress.” (See R1, 1.2) It should be noted that the phrase “firm load interruption imminent or in progress” comes directly
from the title of EOP-002-3, Capacity and Energy Emergencies, Attachment 1-EOP-002-2.1, Energy Emergency Alerts, “3.
Alert 3 – Firm load interruption imminent or in progress” (AKA: EEA3 alert.)
Powerex

Yes

The elimination of the requirement to carry additional reserves for interruptible
imports may be a step backward in relaibility until such time that the issue of reserve
requirements associated with interruptible imports is addressed in some way, either
through another standard development process or a regional criterion that
specifically identifies the operating reserves required for interruptible imports.

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Organization

Yes or No

Question 2 Comment

Response:
As to the use of the undefined terms “interruptible imports” or “interruptible load,” the Drafting Team recognized that within
WECC the colloquial use of these phrases is not always universally understood or implemented in a standardized fashion.
To address this concern the Drafting Team opted to use the NERC-defined term “Interruptible Load” contained in the NERC
Glossary to avoid any misunderstanding.
R3 of the proposed standard directly addresses the concept of interruptible schedules and R4 addresses the concept of ondemand energy.
The standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing of the
energy codes). The standard as drafted does not preclude the continued use of the e-Tag system in any of its iterations.
By contrast, the standard is designed to address Contingency Reserve obligations and Contingency Reserve transactions.
The standard requires that the seller of Contingency Reserves hold reserves to meet that obligation. The standard is
designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss of resource to include loss
of its own generation or loss of an import. Of note, the remand order did not take issue with the associated language as
drafted.
While this approach may not align with all parties’ interpretation of the retired MORC language, the Drafting Team believes
it addresses the reliability needs of the grid.
California ISO

No

Portland General Electric
Company

Yes

PGE is concerned that the proposed standard puts the responsibility to provide
reserves in part on the Sink Balancing Authorities (BAs)/Load Serving Entities (LSEs),
which are subject to an immature bilateral market for acquisition of said reserves. If
Sink BAs / LSEs are not able to acquire the proposed reserve level, they could be
forced to shed load to remain compliant with the proposed standard. There is a
fundamental difference between the acquisition of reserves in an organized market
compared to a bilateral market such as that prominent in the WECC region. In a
bilaterally based market, because generators are not subject to must-run

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Organization

Yes or No

Question 2 Comment
requirements and are not required to offer their generation into the market, Sink BAs
/LSEs do not have assured access to spinning and non-spinning capacity. Therefore,
reserve requirements are currently maintained by the generators in the majority of
the WECC region. Generators are the only entities that have the assured ability,
without shedding load, to respond to contingency events. The transfer of reserve
obligation from generators to load is an unnecessary cost shift from the parties
physically able to perform, to parties that must contract. Moreover, even if a
contracting party is able to secure reserves, there would be no assurance that they
could secure transmission on a system encumbered due to the requirements of the
proposed standard. Simply put, the proposed BAL-002-WECC-01 shifts costs with no
associated increase in reliability, and would potentially reduce reliability and increase
transmission constraints in the WECC region.

Response:
Issue #1: Immature Market
The Drafting Team understands PGE’s need for absolute certainty that a market will exist for the services described in the
proposed standard. The Drafting Team also acknowledges PGE’s statement that, indeed, a market does not exist, though it
is immature. Additionally, the Drafting Team points PGE to PacifiCorp’s statement below suggesting that, even if there is an
immature market today, there is a likelihood that a new market will self-initiate to meet the needs of the marketplace.
Although there is no guarantee that this standard will create a market, it is safe to say that — based on industry history —
where a market need is expressed, a market will rise up to meet it. Further, there is no model that can perfectly predict
market forces; thus, waiting on one as the precursor for addressing a reliability concern does not seem the wisest approach.

Issue #2: Transfers reserve obligation to contract parties as opposed to Generators
Although there may not be a mature bilateral market, there is a mature capacity market from which the required resources
can be purchased. These capacity resources can and do provide the required resources based on their loading.

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Organization

Yes or No

Question 2 Comment

Issue #3: No guarantee wires will be there
The standard spreads the burden equally between load and generation. This spread better locates the resource to the load.
Therefore, this standard provides an increased reliability over its predecessor in that it requires both load and generation
(not just generation) to carry the reserves.

Consideration of Comments: BAL-002-WECC-1

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3.

Does the proposed standard pose a serious and substantial threat to public health, safety, welfare, or national security?

Summary Consideration: Of the ten respondents, all ten are in accord that the proposed standard either poses no serious/substantial
threat to public health, safety, welfare, or national security; or, in the alternative, they are not in a position to perform a full analysis.
Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

NorthWestern Corporation

No

Xcel Energy

No

Tacoma Power

No

Question 3 Comment

Tacoma Power notes that the contingency reserve obligation will be shifted between
the entities under the proposed new WECC standard. We do not have the expertise
to determine if there is any serious or substantial threat to public health, safety,
welfare, or national security due to the shifting of contingency reserve obligation
between the entities.

Response: The Drafting Team appreciates your observation.
Alberta Electric System
Operator

No

Powerex

No

California ISO

No

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Organization

Yes or No

Portland General Electric
Company

Question 3 Comment

No

Consideration of Comments: BAL-002-WECC-1

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4.

Does the proposed standard pose a serious and substantial burden on competitive markets within the interconnection that is
not necessary for reliability?

Summary Consideration: Of the nine respondents, seven agree that the standard does not pose a serious/substantial burden on
competitive markets within the interconnection that is not necessary for reliability. One did not respond. Of the two concerned
respondents, Tacoma is concerned that there is no guarantee that a mature bilateral market will ever exist; albeit, they concur an
immature market now exists. By contrast, PacifiCorp sees that passage of the standard could be the catalyst to creation of a new
market. The standard cannot assure a market will be created; however, there is historical precedence to show that where a market
need is expressed – a market will evolve. As to PGE’s multiple concerns: 1) anytime a standard is implemented resulting in a cost
shift, some will pay more, some will pay less and some will be neutral, 2) interruptible imports is an ambiguous term; however
interruptible transactions are already addressed in R3 and R4, and 3) like Tacoma, where a market expresses a need there is historical
evidence suggesting that a market will meet those needs.
Organization

Yes or No

Bonneville Power
Administration

No

Salt River Project

No

PacifiCorp

No

question 4 Comment

While PacifiCorp does not believe the proposed standard would pose a serious and
subsantial burden on existing competitive markets, we do believe that it may lead to
the creation of a new market product.

Response: The Drafting Team concurs and appreciates your observation.
NorthWestern Corporation

No

Xcel Energy
Tacoma Power

Yes

As Tacoma Power has stated above, this proposed new WECC standard shifts the
contingency reserve obligation between the entities in WECC. Due to this shift, new
or different relationships will have to be created. Cost causation principles will create

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Organization

Yes or No

question 4 Comment
new issues for the entities such that the entities that are responsible for providing
the new contingency reserve obligations are truly held responsible. New contracts
will have to be executed between these new entities and the balancing authorities,
and there is no guarantee of agreement.

Response: The Drafting Team appreciates Tacoma’s concern and notes that there is no single agreement on the market
issue. A simple study cannot be performed that will conclude, without fail, that a market for the required services will be
available. However, it is the nature of a bilateral market that when a product is needed, the market for that product often
self-initiates. On point, PacifiCorp (see above) suggests in counter-point to Tacoma that the proposed standard may result
in the creation of a new market and new market products. As such, waiting for a fully mature market to develop before the
need is established may not be the best way to facilitate that market nor can it be the single catalyst to approving this
standard since it is unlikely that a market will be created “just in case” this standard is approved.
The Drafting Team concurs that as responsibilities shift, new agreements will have to be executed. To meet this need, and
in response to an earlier comment from WECC members, the Drafting Team is requesting an extended Effective Date, in
part, to allow for these new relationships to mature.
Alberta Electric System
Operator

No

Powerex

No

California ISO

No

Though the proposed standard may not pose a "serious and substantial" burden on
competetive markets, the ISO feels that (1) the proposed recovery period is more
burdensome than necessary and (2) more clarity should be provided as to allowed
technology to meet operating reserve requirements as follows: 1. The ISO believes
the last sentence in Measurements M1.1, M2 and M3 should be modified to indicate
that the 60-minute recovery period begins when the DCS event is over, at the end of
the allowed 15-minute recovery period. This would be consistent with what is
allowed by the NERC BAL-002-0 Standards which specifically states that "The
Contingency Reserve Restoration Period begins at the end of the Disturbance

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Organization

Yes or No

question 4 Comment
Recovery Period." The current wording "within 60 minutes of the event” is too vague
and has been interpreted by the drafting team to mean "from the start of the event."
This interpretation would mean that WECC entities have only 45 minutes after the
recovery period to restore reserves which is only half of the 90 minutes Eastern
entities would have. This seems overly burdensome and will continue to be an ever
greater challenge as we increase the levels of intermittent renewables going
forward.2. The proposed Requirement R2 in BAL-002-WECC-1 requires that at least
half of the Contingency Reserve obligation be "Operating Reserve - Spinning", which
is in the NERC Glossary of Terms. The problem is that the NERC definition of
"Operating Reserve - Spinning" focuses on generation and demand response, which
raises doubt as to whether a battery or other form of energy storage could be used.
In keeping with the spirit that FERC has made clear that Reliability Standards should
not dictate the type of technology used to meet a reserve requirement NERC should
consider revising the definition of "Operating Reserve - Spinning" to ensure this is
understood.

Response:

Issue #1: The proposed recovery period is more burdensome than necessary.

The Drafting Team appreciates your concern. Although a longer recovery period was suggested early on, FERC stated that
unless the Drafting Team could produce substantial technical justification for the position, FERC would not agree to that
inclusion. To date, the Drafting Team has not compiled what it believes to be sufficient technical justification to request a
longer recovery period. Thus, it was not included in the proposed standard.
That said, the Drafting Team would point the CAISO to Bonneville Power Authority’s (BPA) comment in WECC Posting 5 of
this standard wherein BPA states that “BPA will submit a SAR for the same standard to extend the time period for reserve
restoration consistent with the NERC standard, 15 minutes DCS recovery plus 90 minutes for reserve restoration for a total
of 105 minutes after the contingency.” Further, PPL in that same comment window suggested they would support that effort.

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Organization

Yes or No

question 4 Comment

Although the Drafting Team is unable to address your concerns due to the instant lack of data, the Drafting Team believes
the CAISO should join with BPA and PPL to pursue the matter in the standards development process.

Issue #2: Adjust the Measures

The Drafting Team would refer the CAISO to the below paragraph of FERC Order 740.

“On remand, we direct WECC to develop a modification to the reserve restoration period or provide evidence demonstrating
that extending the reserve restoration period to 90 minutes and adding a disturbance recovery period of 15 minutes would
not increase the risk of a major disturbance in the Western Interconnection.” FERC Order 740. P. 28.

The above language indicates that the current application refers to 60 minutes from the time of the event – not 60 minutes
following the recovery period. After repeated requests to the field, the Drafting Team has not yet been provided sufficient
data to justify making the requested change.
Although the Drafting Team does not opt to adopt your proposed language, the Drafting Team has made changes to
Version 5 in an effort to clarify the matter. First, taking note that the language was contained within the measures and not
the requirements, the Drafting Team was concerned that the measure added additional features not contemplated in the
requirement. As such, the language was removed from the measure and moved to the requirement. This change was also
made as a result of the NERC Quality Review of the proposed document.

In Version 5, the affected language now reads as follows:
“Except within the first sixty minutes following an event requiring the activation of Contingency Reserves….”
That same sixty-minute period is now accurately reflected in both the requirement and the measure.

Consideration of Comments: BAL-002-WECC-1

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Organization

Yes or No

question 4 Comment

Issue #3: Can a battery be used?

The Drafting Team does not agree with the CAISO and believes technologies, such as batteries, both contemplated and not
yet contemplated are included in the standard as potential resources – so long as the undefined resource can meet the
response characteristics described in the standard. The language does not preclude any specific technology; rather, the
language delineates how that technology must be respond.
As to the use of the NERC term Operating Reserve – Spinning, the Drafting Team disagrees that the NERC term focuses
on generation in that the term specifically includes “generation synchronized to the system” and “load fully removable from
the system”; thus, load and generation.
To meet the CAISO’s concerns; R1, Part 1.2 states that Contingency Reserve can be comprised of “A resource, other than
generation or load, that can provide energy or reduce energy consumption.” This wide berth should accommodate new
technologies both now conceived and conceievable in the future.
Portland General Electric
Company

Yes

PGE is concerned with the movement toward unnecessary changes to an approved
reliability standard as proposed in BAL-002-WECC-1 that will not result in increased
reliability. The changes made through BAL-002-WECC-1 go beyond the language
clarity and consistency required by FERC in the 2007 Order (RR07-11) and seem to be
driven more by the economic interests to shift contingency reserve responsibility (i.e.
costs) from the generators to the loads rather than improving reliability. Changes to
reliability standards should be driven by technical merit weighed against overall
costs. The standards process should not be used as a lever to shift costs among
members. o The current "Tier One" BAL-STD-002-0 reflects the longstanding WECC
Minimum Operating Reliability Criteria (MORC) by breaking down required operating
reserve into four components: regulating reserve, contingency reserve, reserve for
on-demand obligations, and reserves for interruptible imports. However, the
proposed BAL-002-WECC-1 narrows the scope to only contingency reserve, which
raises the question of what happens to the other components. In the time since the

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Organization

Yes or No

question 4 Comment
initial comment period on BAL-002-WECC-1, WECC has retired the WECC MORC with
some parts preserved as new “criteria”. However, the reserve requirements for
interruptible schedules and on-demand rights/obligations were not preserved. The
passage of the proposed BAL-002-WECC-1 and the retirement of the WECC MORC
would remove any explicit reserve requirements for interruptible schedules and ondemand rights/obligations. The effect of this can only be a step down in the
reliability of the interconnected system. o The clarification of "load responsibility"
and e-tag 1.8 helped characterize the nature of the transactions. For the "sink" BA, it
identified those imports that were "firm for the hour". The simplified calculation of
contingency reserve in BAL-002-WECC-1 does NOT consider the responsibility of the
BA to anticipate which imports might be interrupted in-hour, and therefore the
quantity of additional reserves that need to be available. Under BAL-002-WECC-1
everyone will be forced to parse the energy codes to infer what energy is "firm for
the hour". BAL-002-WECCC-1 should require continued use of the "load
responsibility" feature in e-tag 1.8 to clearly identify those transactions that are not
"firm for the hour". o Despite industry-voiced concerns over the difficulty of
interpreting "load responsibility", BAL-002-WECC-1 is saddled with the term
"interruptible load". Such poorly defined terms put the BA in a position to judge
whether or not loads offered up by an LSE meet the contract requirements of being
"interruptible". o BAL-002-WECC-1 is assuming a robust reserves market in the West.
The West does not have a mature reserves market. This new standard will put
additional burden on the load serving entities by forcing them to procure reserves, if
available, from third parties in order to meet the new standard. PGE is concerned
this requirement will increase demand for capacity across constrained transmission
without any beneficial increase in reliability. o PGE is concerned that the proposed
standard puts the responsibility to provide reserves in part on the Sink Balancing
Authorities (BAs)/Load Serving Entities (LSEs), which are subject to an immature
bilateral market for acquisition of said reserves. If Sink BAs / LSEs are not able to
acquire the proposed reserve level, they could be forced to shed load to remain
compliant with the proposed standard. There is a fundamental difference between

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Organization

Yes or No

question 4 Comment
the acquisition of reserves in an organized market compared to a bilateral market
such as that prominent in the WECC region. In a bilaterally based market, because
generators are not subject to must-run requirements and are not required to offer
their generation into the market, Sink BAs /LSEs do not have assured access to
spinning and non-spinning capacity. Therefore, reserve requirements are currently
maintained by the generators in the majority of the WECC region. Generators are the
only entities that have the assured ability, without shedding load, to respond to
contingency events. The transfer of reserve obligation from generators to load is an
unnecessary cost shift from the parties physically able to perform, to parties that
must contract. Moreover, even if a contracting party is able to secure reserves, there
would be no assurance that they could secure transmission on a system encumbered
due to the requirements of the proposed standard. Simply put, the proposed BAL002-WECC-01 shifts costs with no associated increase in reliability, and would
potentially reduce reliability and increase transmission constraints in the WECC
region.

Response:
Issue #1: Use of Process for Cost Shifting
The Drafting Team notes your concern that when changes are made to the reliability aspects of the grid via implementation
of reliability standards, these changes do not come without cost. Further, the Drafting Team acknowledges that as
standards are implemented, cost shifting often occurs giving way to the argument that the sole intent of the changes is
financially motivated. Finally, the Drafting Team acknowledges that these facts are no mystery to the industry and the
processes for development of standards hold the potential to be used for financial as opposed to reliability-related purposes.
The Drafting Team did consider the potential of cost shifting in a number of forums, largely in the early years of developing
this standard. This Drafting Team and its predecessors concluded that an even split of the burden between generation and
load was a reasonable approach, albeit, not the only possible approach.
Based on the evaluation of different alternatives to determine the allocation methodology, the Drafting Team determined
that this methodology had the least negative effect on the greatest number of entities. The Drafting Team acknowledges

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Organization

Yes or No

question 4 Comment

that anytime there is a cost shift, some will incur greater costs, some will lower their costs, and some will remain revenue
neutral. Support or opposition for the shift generally depends on which side of the equation one falls. For example, please
see NV Energy’s comment above stating their own entity’s position on what constitutes a just split of costs.
As to this specific standard, the Drafting Team does not claim to know all the differences between those entities dissuaded
by the standard because it may harm their own profit and loss statements versus those in support of the standard because
its higher criteria bolsters reliability. Rather, the Drafting Team has endeavored to meet both the mandates of Order 740 as
well as the mandate to be responsive imposed by the Process for developing and Approving WECC Standards (Process).
The Drafting Team is reluctant to meet one obligation without also meeting the other.
Issue #2: The Standard’s scope regarding “MORC” is Too Narrow
The Drafting Team disagrees with your conclusion. R3 directly addresses the concept of interruptible schedules and R4
addresses the concept of on-demand energy. (Note: “Interruptible imports” remains an undefined term not uniformly used
across the Western Interconnection.)
Issue #3: Addressing Interruptible Imports / Using the “Load Responsibility” concept
The standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing of the
energy codes). The standard as drafted does not preclude the continued use of the e-Tag system in any of its iterations.
By contrast, the standard is designed to address Contingency Reserve obligations and Contingency Reserve transactions.
Further, the standard requires that the seller of Contingency Reserves hold reserves to meet that obligation. The standard is
designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss of resource to include loss
of its own generation or loss of an import. Of note, the remand order did not take issue with the associated language as
drafted.
As to the use of the undefined term “interruptible load,” the Drafting Team recognized that within WECC the colloquial use
of the phrase is not always implemented in a standardized fashion. To address this concern the Drafting Team opted to use
the defined term “Interruptible Load” contained in the NERC Glossary to avoid any misunderstanding.
Issue #4: An immature Market may Preclude Compliance
The immature market issue was already addressed above; please refer there.

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Organization

Yes or No

question 4 Comment

The Drafting Team recognizes PGE’s market concerns as well as the likelihood that costs and burdens may shift to meet
the “3 and 3” proposal; some entities may experience a cost increase whereas some may experience a cost decrease. The
choice of “3 and 3” was made in an effort to arrive at an equitable calculation of Contingency Reserve.

5.

Does the proposed regional reliability standard meet at least one of the following criteria?
•

The proposed standard has more specific criteria for the same requirements covered in a continent-wide standard

•

The proposed standard has requirements that are not included in the corresponding continent-wide reliability standard

•

The proposed regional difference is necessitated by a physical difference in the bulk power system.

Summary Consideration: All respondents concurred that the proposed standard meets at least one of the NERC reliability criteria.

Organization

Yes or No

Bonneville Power
Administration

Yes

Salt River Project

Yes

PacifiCorp

Yes

Consideration of Comments: BAL-002-WECC-1

Question 4 Comment

24

Organization

Yes or No

NorthWestern Corporation

Yes

Xcel Energy

Yes

Tacoma Power

Yes

Question 4 Comment

Tacoma Power believes that at least one of the criteria is met. However, that does
not mean it is the right thing to do. We believe that this proposed new WECC
standard has a significant shift in the contingency reserve obligation without any
demonstrated benefits and no increased reliability. We urge you to not approve the
proposed new WECC standard.Thank you for consideration of our comments.

Response: The Drafting Team appreciates your comment. The “3 and 3” spread will result in roughly the same amount of
Contingency Reserves being carried as under the existing standard. By contrast to the existing standard, the proposed
standard provides clarity as to the BAs’ reserve requirement, and removes market transactions from the determination of
the reserve requirement.
Alberta Electric System
Operator

Yes

Powerex

Yes

California ISO

Yes

Portland General Electric
Company

Yes

a. While the proposed standard has more specificity than the continent-wide
standard, the proposed standard’s increased specificity has not been proven to
provide additional reliability or clarity than the existing regional reliability standard.
b. The proposed standard does not include requirements that are not included in the
corresponding continent-wide reliability standard that are not already contained
within the existing regional reliability standard.
c. The proposed standard does not consider the differences between the bulk of
WECC’s operational model (i.e., a bilateral path based model), and a centrally

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Organization

Yes or No

Question 4 Comment
managed flow based model. Ignoring the differences between the two models and
implementing the proposed standard would impose cost shifting with the potential
for a reduced level of reliability. The reduced liability would be due to reserve
requirements being placed on entities that have no assured ability to respond to
contingency events without shedding load.

Response:
Issue #1: The standard does not provide additional reliability
The Drafting Team appreciates your comment. The “3 and 3” spread will result in roughly the same amount of Contingency
Reserves being carried as under the existing standard. By contrast to the existing standard, the proposed standard provides
clarity as to the BAs’ reserve requirement. The proposed standard calculates the reserve requirement independent of
market transactions, and electrically places the reserves closer to the load to be served.
The proposed standard closes a gap contained in the existing standard in that, under the existing standard, there is not a
requirement for renewable generation to be included in the calculation of the Contingency Reserve requirement. The
existing standard requires Contingency Reserve based only on hydro and thermal generation; it does not include
renewable. There is such a requirement in the proposed standard. The proposed standard, which requires inclusion of all
types of generation in the calculation of the Contingency Reserve amount, enhances reliability over the existing standard.
With the large amount of existing and proposed wind, PV, and other renewable, this is a substantial improvement in
reliability.
Issue #2: There are no new requirements compared to the existing standard.
Please see comment above.
Issue #3: Immature bilateral contract market
Please see the Drafting Team’s responses above regarding immature markets and shifting of costs.

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6. Additional Comments Submitted
Summary Consideration:
The team thanks all respondents for their time and considered responses. For those seeking change to the standard beyond those
contemplated in the current request, the team encourages full use of the standards development process.
The distribution of the “3 and 3” between load and generation is designed to equitably spread the reserve burden. Within the
industry there is ample example that where a market need is expressed, a market will develop to meet that need.
Wherever appropriate, the team opted to use NERC defined terms, such as Interruptible Load as opposed to the undefined term
“interruptible” often used within WECC but not uniformly implemented.

Organization
Bonneville Power Administration

Yes or No

Additional Comments

Yes

BPA is supportive of this standard. However, BPA does have the following
comment with the standard, with the understanding that this is not going to
be a change to the standard as submitted: BPA will submit a SAR for the
same standard to extend the time period for reserve restoration consistent
with the NERC standard, 15 minute DCS recovery plus 90 minutes for reserve
restoration for a total of 105 minutes after the contingency. BPA does
understand that this issue is not currently a part of the proposed changes
due to insufficient documentation being submitted to FERC during the first
iteration of this standard. Since this time, a large amount of documentation
that justifies expanding the recovery period has been submitted to the
drafting team. This documentation detailed why thermal issues with the
transmission system are not an issue in WECC plus showed that there is
almost nonexistent increase in risk to WECC with expanding the recovery
period. Although BPA understands that it is not desired by WECC members
to confront this issue with this iteration of the standard, BPA strongly

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Organization

Yes or No

Additional Comments
recommends that, if this standard is approved by FERC, WECC immediately
reconvene the drafting team in order to correct this issue.

Response: The Drafting Team appreciates your support as well as your initiative and further notes the reiteration of your
position as made in BAL-002-WECC-1, Posting 2 and again in Posting 5. The Drafting Team encourages full use of the
standards development process and thanks BPA for acknowledging the confines under which the Drafting Team has
labored.
NorthWestern Corporation

No

NorthWestern Energy disagrees with the amount of Contingency Reserve
equal to the sum of three percent of hourly integrated load plus three
percent of hourly integrated generation as specified in Requirement 1 of
BAL-002-WECC-1. This amount of Contingency Reserve strays away from the
current requirement of the sum of five percent of the load responsibility
served by hydro and wind generation and seven percent of the load
responsibility served by thermal generation. The sum of five and seven
percent Contingency Reserve responsibility is a tried practice that has
proven to allocate adequate Contingency Reserve to responsible entities in
the Western interconnection. In addition, NorthWestern Energy
recommends that Contingency Reserves and Operating Reserves be defined
in the proposed BAL-004-WECC-1 standard. The use of these terms in the
standard does not seem to be consistent with industry standards and it
leads to confusion when the two terms and referenced and interchanged
throughout the document.

Response:
Issue #1: The amount strays from 5 hydro/wind and 7 thermal
The “3 and 3” has already been approved by the WECC Operating Committee, and when reviewed by FERC in the Order
740 Remand Order, FERC did not challenge the allocation. The Drafting Team notes that the existing standard does not
specifically require reserves to be carried for “wind.” By contrast, the proposed standard would require that reserves be
carried for ‘all” generation. This would also include wind, PV, and “all” renewable generation.
When studied by the Drafting Team, the 3 and 3 allocation resulted in an amount of Contingency Reserve essentially the
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Additional Comments

same as the “tried and true” 5 and 7.
Issue #2: Contingency Reserves and Operating Reserves should be defined in BAL-004-WECC-1 – not here.
The Drafting Team notes that it has no control over the BAL-004-WECC-1 standards development process. (Could this
have been a typo?) The Drafting Team notes that the terms Operating Reserve – Spinning and Operating Reserve –
Supplemental are currently NERC-defined terms, used in this standard, the definitions for which have been taken directly
from the NERC Glossary without change.
To avoid confusion as to the definitions, WECC will respond to FERC Order 740, at Paragraph 62, and request that the
WECC Operating Committee retire the term “Spinning Reserve” from the WECC Glossary.
Powerex has indicated in its previous comments that WECC should continue
the operating reserves requirements for interruptible imports, as specified
in the current standard (BAL-STD-002-0 - Operating Reserves): WR1.a
Minimum Operating Reserve. Each Balancing Authority shall maintain
minimumOperating Reserve which is the sum of the following:...(iii)
Additional reserve for interruptible imports. An amount of reserve, which
canbe made effective within ten minutes, equal to interruptible imports. It is
the opinion of Powerex that the above requirement should remain in place
until such time that the issue of reserve requirements associated with
interruptible imports is addressed in some way, either through another
standard development process or a regional criteria that specifically
identifies the operating reserves required for interruptible imports. Though
the term “interruptible imports” has never been clearly defined by WECC or
NERC, the language was placed in the standard to differentiate an
interruptible energy product - a product that may be curtailed for ANY
reason, including the lack of sufficient operating reserves to hold the
schedule whole for the scheduling period, from a “Firm” energy product - a
product served by sufficient generating resources that the energy would not
be curtailed during the scheduling period, unless those resources were
depleted as a result of an event that qualified as that for which Contingency
Reserve could be deployed. Removing the requirement from the current

Powerex

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standard could lead to further confusion over the requirement for reserves
associated with interruptible imports. Right now in WECC there exists an
unacceptable lack of clarity with respect to regulation requirements
associated with energy interchange scheduling, and arguably there is no
clear, standardized means of communicating the type of energy product (i.e.
Firm, interruptible, or Unit Contingent) associated with an exchange.
Powerex acknowledges that the Operating Reserve (i.e. Contingency
Reserve) standard alone cannot address these concerns, but we feel it is
premature to eliminate the language until the concerns are addressed via
some other regulatory requirement.

Response:
Removing the requirement to address interruptible power could lead to further confusion. It may be premature to eliminate
the language until the concerns are addressed via some other regulatory requirement.
The Drafting Team notes that the Powerex hypothesis as to the intent of the language may not be accurate because the
language was included in WECC’s MORC document long before energy markets were deregulated.
As to the development of markets, the “5 and 7” Contingency Reserve concept was developed decades ago. In response,
markets developed to match the need. It is anticipated that as the “3 and 3” is implemented, the market will respond
accordingly.
As to clarity of “regulation” requirements, this standard does not address the Regulating Reserve portion of Operating
Reserves. This issue is addressed under NERC’s BAL-001 standard.
The proposed standard is not designed to address how a Balancing Authority addresses market transactions (i.e., parsing
of the energy codes). The proposed standard does not preclude the continued use of the e-Tag system in any of its
iterations.
By contrast, the proposed standard is designed to address Contingency Reserve obligations and Contingency Reserve
transactions. Further, the proposed standard requires that the seller of Contingency Reserves hold reserves to meet that
obligation. The standard is designed to ensure that a Balancing Authority carries reserves sufficient to respond to any loss
of resource to include loss of its own generation or loss of an import. Of note, the remand order did not take issue with the
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associated language as drafted.
As to the use of the undefined term “interruptible load,” the Drafting Team recognized that within WECC the colloquial use
of the phrase is not always implemented in a standardized fashion. To address this concern the Drafting Team opted to
use the defined term “Interruptible Load” contained in the NERC Glossary to avoid any misunderstanding.
Finally, the Drafting Team believes the current methodology cited by Powerex does not add any clarity nor does it have
universal agreement as to its implementation; rather, the existing language is the source of the ambiguity. The Drafting
Team encourages Powerex to initiate a SAR to facilitate addressing Powerex’ concerns.

END OF REPORT

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Guidance Document
BAL-002-WECC-2
Contingency Reserve

Background
On March 26, 2007, NERC submitted WECC-BAL-STD-002-0 to FERC for approval.
The purpose of the standard was to convert the substance of WECC’s Reliability
Criteria Agreement, III.A.2. WECC Criterion into an enforceable standard.
On June 8, 2007, FERC approved WECC-BAL-STD-002-0 — subject to specific
requested changes — finding the standard was more stringent than the corresponding
NERC Reliability Standard BAL-002-0. Specifically, FERC found that WECC’s
requirement to restore Contingency Reserve within 60 minutes was more stringent
than the 90-minute restoration period as set forth in NERC’s BAL-002-0.
After making the FERC mandated changes, on March 25, 2009, NERC submitted
BAL-002-WECC-1 (nomenclature change) to FERC for approval and requested
retirement of WECC BAL-STD-002-0. On October 21, 2010, FERC remanded BAL002-WECC-1 to NERC under FERC Final Order 740 with instruction for WECC to
further development the standard. This standard is the result of the aforementioned
proceedings.
The following FAQs are offered as guidance to the practical application of the
standard. The questions and answers are structured to follow the structure of the
proposed standard.
Purpose Statement

1)

Why was the Purpose statement changed from that of the original BALSTD-002-0 and Version 1 of BAL-002-WECC-2?
The industry commented that it preferred the substance of the original Purpose
statement over that of Version 2 rejected on May 19, 2011 by the WECC
Operating Committee. Specifically, commenters were concerned that the
reference to frequency response was removed as was any mention of a policy
statement indicating the circumstances under which reserves should be used.
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At the threshold, it should be understood that the Purpose statement is not an
enforceable portion of the standard. Further, the writing style illustrated in the
current BAL-002-0 (similar to that of BAL-STD-002-0 and BAL-002-WECC-2,
Version 1) is one of many Purpose statements used in NERC training as an
example of “How not to Write a Purpose Statement.”
Specifically, the Purpose statement needs to be a concise statement of the
reliability attribute achieved by the document. The standard as drafted only
specifies the quantity and types of Contingency Reserve required for the
reliable operation of the interconnected power system. The standard is neither
a frequency response standard nor is it a Disturbance Control Performance
standard. The standard does not opine on whether or not to use reserves to
replace generating capacity and energy lost due to forced outages of
generation or transmission equipment. As such, these additional statements
included in the earlier Purpose statements have been accurately dropped from the
current version.
As presented in Version 5, the Purpose statement reflects reliability principle
number one as contained in NERC’s Reliability Principles document found at the
following hyperlink. An excerpt from that document is as follows:
http://www.nerc.com/files/Reliability_Principles.pdf
“Reliability Principles
NERC Reliability Standards are based on certain reliability principles that
define the foundation of reliability for North American bulk power systems.
Each reliability standard shall enable or support one or more of the
reliability principles, thereby ensuring that each standard serves a purpose
in support of reliability of the North American bulk power systems. Each
reliability standard shall also be consistent with all of the reliability
principles, thereby ensuring that no standard undermines reliability
through an unintended consequence.
1.

Interconnected bulk power systems shall be planned and operated
in a coordinated manner to perform reliably under normal and
abnormal conditions as defined in the NERC Standards.”

Applicability
2)

For purposes of this standard, what entity determines the amount of
generation for which reserves must be carried?
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Each Balancing Authority that is not a member of a Reserve Sharing Group and
each Reserve Sharing Group. This means those two entities ultimately decide
what constitutes generation for purposes of their calculation.
The applicability has been clarified in Version 5 to read as follows:
4.
4.1

Applicability:
Balancing Authority
4.1.1. The Balancing Authority is the responsible entity unless the
Balancing Authority is a member of a Reserve Sharing
Group, in which case, the Reserve Sharing Group becomes
the responsible entity.

4.2

Reserve Sharing Group
4.2.1. The Reserve Sharing Group when comprised of a Source
Balancing Authority becomes the source Reserve Sharing
Group.
4.2.2. The Reserve Sharing Group when comprised of a Sink
Balancing Authority becomes the sink Reserve Sharing
Group.

3)

Some have suggested that where the Balancing Authority or Reserve
Sharing Group have only limited ownership or operational control over
significant shares of generating resources within its footprint, this may
result in the Balancing Authority or Reserve Sharing Group carrying a
disproportionate share of reserves of the Interconnection. Why doesn’t
the standard apply to the generator owners and generator operators
within the Balancing Authority as opposed to each Balancing Authority
that is not a member of a Reserve Sharing Group and each Reserve
Sharing Group?
As for assigning tasks to the Generator Owner and/or the Generator Operator,
the standard does not assign tasks to either entity as the required tasks are
more closely aligned with those ascribed to the Balancing Authority / Reserve
Sharing Group as assigned in the NERC Functional Model, Version 5.
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As for the potential increased burden on Balancing Authorities and/or Reserve
Sharing Groups to carry a disproportionate share of reserves, the standard
allows for impacted Balancing Authorities and/or Reserve Sharing Groups to
transfer generation out of their area thereby more equitably allocating
generation for purposes of the reserve calculation.
Effective Date
4)

Comments from the field requested a change to the Effective Date. Was
the date changed?
Yes. The drafting team has accepted the request to extend the Effective Date.
The current proposal is “The first day of the third quarter after receipt of
applicable regulatory approval.” This extended Effective Date recognizes that
the proposed standard may require negotiation and execution of contracts as
well as potential retooling of software.

Requirements and Measures

5)

R1 establishes, among other things, the amount of reserves that must be
carried. That amount is predicated on 3% of generation and 3% of load.
Please explain how this standard meets the requirements for minimum
reserves and is technically justified.
The drafting team is cognizant that there is no technical justification for setting a
reserve amount at either the existing 5% Hydro and 7% Thermal of BAL-STD002-0 or the 3% generation and 3% load proposed in BAL-002-WECC-2. With
that said, the drafting team believes that the proposed methodology of BAL002-WECC-2 provides for a reliable amount of reserves approximating the
existing methodology while removing references to market products.
As for the amount of reserves, the team utilized a number of technical
evaluations comparing the existing methodology with the proposed
methodology in order to ensure that the new requirement was not less reliable.
The results of the evaluations showed that the amount of reserves required by
either the old method of BAL-STD-002-0 or the new method proposed in BAL002-WECC-2 was relatively the same. Being relatively the same, the BAL-002WECC-2 methodology is projected to have no adverse affect on reliability.
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Additionally, the drafting team points out that FERC determined in the Final
Order in Docket RM09-15, that:
“WECC’s proposed calculation of minimum contingency reserves is
more stringent than the national requirement and could be part of a
future proposal that the Commission could find to be just, reasonable,
not unduly discriminatory or preferential, and in the public interest.”
(P39).
As for removing references to market products, the reason for removing market
products is that the reliability side of an organization is not involved in the
transaction negotiations and does not always have access to the details related
to the different market products. This issue was identified as early as four years
ago and continues to be argued at WECC today. Until consensus on the issue
is reached, it is not advisable to imbue ambiguous concepts into a mandatory
standard.
6) A number of comments expressed concerns that the standard as proposed
would shift costs to load-based entities by increasing the amount of reserves
required by those entities. How has the team addressed the issue?
FERC has already ruled that a calculation of minimum contingency reserves based
on three percent of generation and three percent of load would fairly balance both
the reserve obligation as well as the financial obligations of those who would benefit
most from those services. FERC Order 740, P47.

7)

Does this standard affect how a Balancing Authority calculates its most
sever single contingency (MSSC)?

No. This standard does not impact how a Balancing Authority calculates its
MSSC.
8)

Is there ever a time when a Balancing Authority would have to carry even
more reserves than the greater of two amounts stated in Question 2?
Yes, under specific circumstances.
In addition to the minimum amount of Contingency Reserve required in
Requirement R1, each Source or Sink Balancing Authority may have to carry
additional reserves under specific conditions. Specifically, these are reserve
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transactions and recallable energy transactions. These transactions are readily
identified by WECC product codes for reserve transactions: 1) C-SP (spinning
reserve transactions), 2) C-NS (non-spinning reserve transactions), and 3) CRE (recallable energy transactions).
For example:
If the Source Balancing Authority designates an Interchange Transaction(s) as
part of its Non-Spinning Contingency Reserve, the Sink Balancing Authority
shall carry an amount of additional Non-Spinning Contingency Reserve equal to
the Interchange Transaction(s). This type of transaction cannot be designated
as Spinning Reserves by the source Balancing Authority. If the Source
Balancing Authority does not designate the Interchange Transaction as part of
its Contingency Reserve, the Sink Balancing Authority is not required to carry
any additional Contingency Reserve under the proposed standard.
If the Sink Balancing Authority is designating an Interchange Transaction(s) as
part of its Contingency Reserve, either Spinning or Non-Spinning, the Source
Balancing Authority shall increase its Contingency Reserve equal in amount
and type to the capacity transaction(s) where the Sink Balancing Authority is
designating the transaction(s) as a resource to meet its Contingency Reserve
requirements. These types of transactions could be designated as either
spinning or non-spinning reserves.
9)

Could you please provide a practical illustration showing how the
additional reserve amount is calculated?
Example 1 – Recallable Energy
BA1 – Source BA on e-Tag
BA2 – Sink BA on e-Tag
BA1 designates the sale of energy as being provided from its reserve. The eTag will show the product code of C-RE on the tag. BA2 is required to carry
additional reserve equal to 100 percent of this transaction.
Example 2 – Operating Reserve - Spinning
BA1 – Source BA on e-Tag
BA2 – Sink BA on e-Tag
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BA2 purchases from BA1 Operating Reserves – Spinning. An e-Tag is created
showing a flow of zero energy with a transmission profile equal to the maximum
capacity of the transaction with a product code type of C-SP. BA1 is required to
increase its minimum reserve amount for Operating Reserve – Spinning by the
amount of the transaction.
Example 3 – Operating Reserve - Supplemental
BA1 – Source BA on e-Tag
BA2 – Sink BA on e-Tag
BA2 purchases from BA1 Operating Reserves – Supplemental. An e-Tag is
created showing a flow of zero energy with a transmission profile equal to the
maximum capacity of the transaction with a product code type of C-NS. BA1 is
required to increase its minimum reserve amount for Operating Reserve –
Supplemental by the amount of the transaction.
10)

Why does the current version use different defined terms than Version 2?
The drafting team modified the standard to address the FERC Order 740
mandate requiring the definitions be changed to place load and generation on
equal footing for purposes of providing reserves. Specifically, the Order stated:
“On remand, the Commission [directed WECC to modify BAL-002WECC-1 to] explicitly provide that demand-side management technically
capable of providing [contingency reserve] may be used as a resource
for both spinning and non-spinning contingency reserves” and to “ensure
comparable treatment of demand-side management with conventional
generation.” FERC Order 740, P. 61; see also FERC Order 693.
To meet these two mandates, the current version explicitly provides that
Demand-Side management can be used as a resource for Contingency
Reserve. To ensure comparable treatment of Demand-Side management with
conventional generation, WECC has removed all reference to the more
restrictive terms Spinning Reserve (containing reference only to generation)
and Non-Spinning Reserves (exclusive to generation and Interruptible Load)
and substituted the correct terms Operating Reserve – Spinning and Operating
Reserve-Supplemental at FERC’s request.
Further, “In its order approving WECC’s current regional Reliability Standard,
the Commission determined that regional definitions should conform to the
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definitions set forth in the NERC Glossary, unless a specific deviation has been
justified. WECC has not justified the need for a separate, regional definition of
Spinning Reserve. Accordingly, we direct WECC to remove this regional
definition from the NERC Glossary,” emphasis added FERC Order 740, P. 62.
11)

In addition to the above definitional changes, the current version further
qualifies some of the defined terms. Can you explain?
When the drafting team incorporated the FERC mandated terms, it determined
that the definition for Contingency Reserve – Spinning did not require that it be
automatically responsive to frequency. To fill that void, the drafting team
included in the current version the historical WECC requirement that spinning
reserve must be automatically responsive proportionally to frequency
deviations. Parenthetically, this approach should also assuage some concerns
that the frequency component of the earlier Purpose statements is no longer
offered.

12)

Why has the team decided not to pursue the 105 minute restoration
period?
In the Order 740 Remand, FERC said:
“2. [FERC] remands the…Standard based on concerns that WECC has
not provided adequate technical support to demonstrate that the
requirements of [BAL-002-WECC-1] are sufficient to ensure the reliable
operation of the [grid]. Specifically, WECC’s data indicates that
extending the reserve restoration period from 60 to 90 minutes presents
an unreasonable risk that a second major contingency could occur
before reserves are restored after an initial contingency. Without further
technical justification demonstrating that this less stringent requirement
will adequately support reliability in [WECC], [FERC] is unable to
[approve the Standard]. Accordingly, we remand…BAL-002-WECC1…[for] further modifications consistent with this final rule.” FERC Final
Order 740, P2.
To date, the drafting team has been unable to procure further technical
justification in support of the 90-minute restoration period. After outreach to the
industry covering multiple years, the drafting team does not currently project the
ability to obtain the required evidence. As such, the drafting team has complied
with FERC’s order. Compliance with FERC’s order does not preclude a
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subsequent filing should the industry provide persuasive evidence in support of
the 90-minute period.
13) Why doesn’t the standard address Interruptible Exports?
The term "interruptible" is not a defined term in the NERC or WECC glossary of
terms. The term is interpreted differently by different parties. Unless there is a
common definition of the term "interruptible", the drafting team does not believe
a standard utilizing the term is clear and unambiguous. Therefore, the drafting
team has removed this terminology. Further, the team concluded that creating
a new definition for interruptible was outside of the scope of the Remand.
While the standard does not use the term “interruptible”, R3 does address one
form of an interruptible transaction.
14) Please explain why the Energy Emergency Alert (EEA) 3 was used instead
of the EEA2 in EOP-002-3.
FERC’s Order in Docket RM09-15 specifically stated a Balancing Authority that
“planned to shed firm load before the reliability coordinator issued a level 3
energy emergency alert” (P49, RM09-15 Final Order) would be in violation of
EOP-002-3. The drafting team believes that under the EOP-002-3
Requirements, two things are clear: 1) the Balancing Authority can curtail firm
load prior to asking for an EEA, and 2) if the Balancing Authority believes that
curtailment of firm load is imminent, then it should request an EEA level 3.
The drafting team believes that it is our obligation to make it clear when it is
appropriate for an entity to utilize firm load as its contingency reserve. As FERC
pointed out in its order, a Balancing Authority using firm load as its reserve
must believe that it will curtail that load if an event occurs. Since we know such
events happen from time to time, as long as the load is used for reserve, it is
likely that it will be curtailed and therefore FERC believes that the correct EEA
level is EEA Level 3 – “Firm load interruption is imminent or in progress.”
Some of the commenters state that EEA Level 2 is more appropriate. The
drafting team believes this position is because under an EEA Level 2, reserves
are utilized to serve loads and the entity is deficient of reserves. When one
starts looking at the interaction between WECC’s proposed BAL-002-WECC-1
and EOP-002-3, the issue is less clear. As an example, does the declaration of
an EEA Level 2 relieve that entity of its obligation to carry a minimum amount of
reserves under BAL-002-WECC-2? If not, then an entity can only be deficient
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of reserves for at most 60 minutes under the BAL-002-WECC-2 standard, and
only then if the entity had a contingency event which causes the declaration of
the EEA Level 2. Otherwise, the entity has no excuse for being below the
minimum level of reserves under BAL-002-WECC-2. If the entity can restore
reserves by utilizing firm load as its reserve, without actually curtailing the load,
FERC’s order states that the entity should declare an EEA Level 3 since at that
time, the entity is planning to curtail firm load if a contingency occurs and
therefore curtailment of firm load is imminent.
15) FERC instructed WECC to “consider” QF Parties' concerns about the ambiguity

of the term "Net Generation," Paragraphs 64 and 66. Further, FERC instructed
WECC to consider the QFs issues in light of FERC Order 464. How did the team
address the issue?
The term “Net Generation” has been removed from the current version.
After considering the QF’s position in light of FERC Order 464, the team
concluded that the QF’s issues were preserved in Order 464 and need not be
vetted again in the proposed standard. Where an existing FERC Order exists it
is presumed that the industry will follow that order without reiteration in peripheral
documents.
To accommodate the needs of the QFs, the drafting team included the following
language in Requirement R1 as a reminder to Balancing Authorities and Reserve
Sharing Groups that FERC has already adjudicated the QF’s concerns.
“(excluding Qualifying Facilities (18 C.F.R. Section 292.101) as addressed in
FERC Order 464)”.

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