Statute (16USC 824o)

§ 824m

TITLE 16—CONSERVATION

ing that information be submitted annually to
the Commission by transmitting utilities which
is adequate to inform potential transmission
customers, State regulatory authorities, and the
public of potentially available transmission capacity and known constraints.
(June 10, 1920, ch. 285, pt. II, § 213, as added Pub.
L. 102–486, title VII, § 723, Oct. 24, 1992, 106 Stat.
2919.)
STATE AUTHORITIES; CONSTRUCTION
Nothing in this section to be construed as affecting
or intending to affect, or in any way to interfere with,
authority of any State or local government relating to
environmental protection or siting of facilities, see section 731 of Pub. L. 102–486, set out as a note under section 796 of this title.

§ 824m. Sales by exempt wholesale generators
No rate or charge received by an exempt
wholesale generator for the sale of electric energy shall be lawful under section 824d of this
title if, after notice and opportunity for hearing,
the Commission finds that such rate or charge
results from the receipt of any undue preference
or advantage from an electric utility which is an
associate company or an affiliate of the exempt
wholesale generator. For purposes of this section, the terms ‘‘associate company’’ and ‘‘affiliate’’ shall have the same meaning as provided in
section 16451 of title 42.1
(June 10, 1920, ch. 285, pt. II, § 214, as added Pub.
L. 102–486, title VII, § 724, Oct. 24, 1992, 106 Stat.
2920; amended Pub. L. 109–58, title XII,
§ 1277(b)(2), Aug. 8, 2005, 119 Stat. 978.)
REFERENCES IN TEXT
Section 16451 of title 42, referred to in text, was in the
original ‘‘section 2(a) of the Public Utility Holding
Company Act of 2005’’ and was translated as reading
‘‘section 1262’’ of that Act, meaning section 1262 of subtitle F of title XII of Pub. L. 109–58, to reflect the probable intent of Congress, because subtitle F of title XII
of Pub. L. 109–58 does not contain a section 2 and section 1262 of subtitle F of title XII of Pub. L. 109–58 defines terms.
AMENDMENTS
2005—Pub. L. 109–58 substituted ‘‘section 16451 of title
42’’ for ‘‘section 79b(a) of title 15’’.
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Pub. L. 109–58 effective 6 months after
Aug. 8, 2005, with provisions relating to effect of compliance with certain regulations approved and made effective prior to such date, see section 1274 of Pub. L.
109–58, set out as an Effective Date note under section
16451 of Title 42, The Public Health and Welfare.
STATE AUTHORITIES; CONSTRUCTION
Nothing in this section to be construed as affecting
or intending to affect, or in any way to interfere with,
authority of any State or local government relating to
environmental protection or siting of facilities, see section 731 of Pub. L. 102–486, set out as a note under section 796 of this title.

§ 824n. Repealed. Pub. L. 109–58, title
§ 1232(e)(3), Aug. 8, 2005, 119 Stat. 957

XII,

Section, Pub. L. 106–377, § 1(a)(2) [title III, § 311], Oct.
27, 2000, 114 Stat. 1441, 1441A–80, related to authority re1 See

References in Text note below.

Page 1348

garding formation and operation of regional transmission organizations.

§ 824o. Electric reliability
(a) Definitions
For purposes of this section:
(1) The term ‘‘bulk-power system’’ means—
(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any
portion thereof); and
(B) electric energy from generation facilities needed to maintain transmission system
reliability.
The term does not include facilities used in
the local distribution of electric energy.
(2) The terms ‘‘Electric Reliability Organization’’ and ‘‘ERO’’ mean the organization certified by the Commission under subsection (c)
of this section the purpose of which is to establish and enforce reliability standards for
the bulk-power system, subject to Commission
review.
(3) The term ‘‘reliability standard’’ means a
requirement, approved by the Commission
under this section, to provide for reliable operation of the bulk-power system. The term includes requirements for the operation of existing bulk-power system facilities, including
cybersecurity protection, and the design of
planned additions or modifications to such facilities to the extent necessary to provide for
reliable operation of the bulk-power system,
but the term does not include any requirement
to enlarge such facilities or to construct new
transmission capacity or generation capacity.
(4) The term ‘‘reliable operation’’ means operating the elements of the bulk-power system
within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a
result of a sudden disturbance, including a
cybersecurity incident, or unanticipated failure of system elements.
(5) The term ‘‘Interconnection’’ means a geographic area in which the operation of bulkpower system components is synchronized
such that the failure of one or more of such
components may adversely affect the ability
of the operators of other components within
the system to maintain reliable operation of
the facilities within their control.
(6) The term ‘‘transmission organization’’
means a Regional Transmission Organization,
Independent System Operator, independent
transmission provider, or other transmission
organization finally approved by the Commission for the operation of transmission facilities.
(7) The term ‘‘regional entity’’ means an entity having enforcement authority pursuant to
subsection (e)(4) of this section.
(8) The term ‘‘cybersecurity incident’’ means
a malicious act or suspicious event that disrupts, or was an attempt to disrupt, the operation of those programmable electronic devices and communication networks including
hardware, software and data that are essential
to the reliable operation of the bulk power
system.

Page 1349

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(b) Jurisdiction and applicability
(1) The Commission shall have jurisdiction,
within the United States, over the ERO certified
by the Commission under subsection (c) of this
section, any regional entities, and all users,
owners and operators of the bulk-power system,
including but not limited to the entities described in section 824(f) of this title, for purposes
of approving reliability standards established
under this section and enforcing compliance
with this section. All users, owners and operators of the bulk-power system shall comply with
reliability standards that take effect under this
section.
(2) The Commission shall issue a final rule to
implement the requirements of this section not
later than 180 days after August 8, 2005.
(c) Certification
Following the issuance of a Commission rule
under subsection (b)(2) of this section, any person may submit an application to the Commission for certification as the Electric Reliability
Organization. The Commission may certify one
such ERO if the Commission determines that
such ERO—
(1) has the ability to develop and enforce,
subject to subsection (e)(2) of this section, reliability standards that provide for an adequate level of reliability of the bulk-power
system; and
(2) has established rules that—
(A) assure its independence of the users
and owners and operators of the bulk-power
system, while assuring fair stakeholder representation in the selection of its directors
and balanced decisionmaking in any ERO
committee or subordinate organizational
structure;
(B) allocate equitably reasonable dues,
fees, and other charges among end users for
all activities under this section;
(C) provide fair and impartial procedures
for enforcement of reliability standards
through the imposition of penalties in accordance with subsection (e) of this section
(including limitations on activities, functions, or operations, or other appropriate
sanctions);
(D) provide for reasonable notice and opportunity for public comment, due process,
openness, and balance of interests in developing reliability standards and otherwise exercising its duties; and
(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada and Mexico.
(d) Reliability standards
(1) The Electric Reliability Organization shall
file each reliability standard or modification to
a reliability standard that it proposes to be
made effective under this section with the Commission.
(2) The Commission may approve, by rule or
order, a proposed reliability standard or modification to a reliability standard if it determines
that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public
interest. The Commission shall give due weight
to the technical expertise of the Electric Reli-

§ 824o

ability Organization with respect to the content
of a proposed standard or modification to a reliability standard 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, but shall not defer with respect to
the effect of a standard on competition. A proposed standard or modification shall take effect
upon approval by the Commission.
(3) The Electric Reliability Organization shall
rebuttably presume that a proposal from a regional entity organized on an Interconnectionwide basis for a reliability standard or modification to a reliability standard to be applicable on
an Interconnection-wide basis is just, reasonable, and not unduly discriminatory or preferential, and in the public interest.
(4) The Commission shall remand to the Electric Reliability Organization for further consideration a proposed reliability standard or a
modification to a reliability standard that the
Commission disapproves in whole or in part.
(5) The Commission, upon its own motion or
upon complaint, may order the Electric Reliability Organization to submit to the Commission a proposed reliability standard or a modification to a reliability standard that addresses
a specific matter if the Commission considers
such a new or modified reliability standard appropriate to carry out this section.
(6) The final rule adopted under subsection
(b)(2) of this section shall include fair processes
for the identification and timely resolution of
any conflict between a reliability standard and
any function, rule, order, tariff, rate schedule,
or agreement accepted, approved, or ordered by
the Commission applicable to a transmission organization. Such transmission organization
shall continue to comply with such function,
rule, order, tariff, rate schedule or agreement
accepted, approved, or ordered by the Commission until—
(A) the Commission finds a conflict exists
between a reliability standard and any such
provision;
(B) the Commission orders a change to such
provision pursuant to section 824e of this title;
and
(C) the ordered change becomes effective
under this subchapter.
If the Commission determines that a reliability
standard needs to be changed as a result of such
a conflict, it shall order the ERO to develop and
file with the Commission a modified reliability
standard under paragraph (4) or (5) of this subsection.
(e) Enforcement
(1) The ERO may impose, subject to paragraph
(2), a penalty on a user or owner or operator of
the bulk-power system for a violation of a reliability standard approved by the Commission
under subsection (d) of this section if the ERO,
after notice and an opportunity for a hearing—
(A) finds that the user or owner or operator
has violated a reliability standard approved by
the Commission under subsection (d) of this
section; and
(B) files notice and the record of the proceeding with the Commission.

§ 824o

TITLE 16—CONSERVATION

(2) A penalty imposed under paragraph (1) may
take effect not earlier than the 31st day after
the ERO files with the Commission notice of the
penalty and the record of proceedings. Such penalty shall be subject to review by the Commission, on its own motion or upon application by
the user, owner or operator that is the subject of
the penalty filed within 30 days after the date
such notice is filed with the Commission. Application to the Commission for review, or the initiation of review by the Commission on its own
motion, shall not operate as a stay of such penalty unless the Commission otherwise orders
upon its own motion or upon application by the
user, owner or operator that is the subject of
such penalty. In any proceeding to review a penalty imposed under paragraph (1), the Commission, after notice and opportunity for hearing
(which hearing may consist solely of the record
before the ERO and opportunity for the presentation of supporting reasons to affirm, modify,
or set aside the penalty), shall by order affirm,
set aside, reinstate, or modify the penalty, and,
if appropriate, remand to the ERO for further
proceedings. The Commission shall implement
expedited procedures for such hearings.
(3) On its own motion or upon complaint, the
Commission may order compliance with a reliability standard and may impose a penalty
against a user or owner or operator of the bulkpower system if the Commission finds, after notice and opportunity for a hearing, that the user
or owner or operator of the bulk-power system
has engaged or is about to engage in any acts or
practices that constitute or will constitute a
violation of a reliability standard.
(4) The Commission shall issue regulations authorizing the ERO to enter into an agreement to
delegate authority to a regional entity for the
purpose of proposing reliability standards to the
ERO and enforcing reliability standards under
paragraph (1) if—
(A) the regional entity is governed by—
(i) an independent board;
(ii) a balanced stakeholder board; or
(iii) a combination independent and balanced stakeholder board.
(B) the regional entity otherwise satisfies
the provisions of subsection (c)(1) and (2) of
this section; and
(C) the agreement promotes effective and efficient administration of bulk-power system
reliability.
The Commission may modify such delegation.
The ERO and the Commission shall rebuttably
presume that a proposal for delegation to a regional entity organized on an Interconnectionwide basis promotes effective and efficient administration of bulk-power system reliability
and should be approved. Such regulation may
provide that the Commission may assign the
ERO’s authority to enforce reliability standards
under paragraph (1) directly to a regional entity
consistent with the requirements of this paragraph.
(5) The Commission may take such action as is
necessary or appropriate against the ERO or a
regional entity to ensure compliance with a reliability standard or any Commission order affecting the ERO or a regional entity.

Page 1350

(6) Any penalty imposed under this section
shall bear a reasonable relation to the seriousness of the violation and shall take into consideration the efforts of such user, owner, or operator to remedy the violation in a timely manner.
(f) Changes in Electric Reliability Organization
rules
The Electric Reliability Organization shall
file with the Commission for approval any proposed rule or proposed rule change, accompanied
by an explanation of its basis and purpose. The
Commission, upon its own motion or complaint,
may propose a change to the rules of the ERO.
A proposed rule or proposed rule change shall
take effect upon a finding by the Commission,
after notice and opportunity for comment, that
the change is just, reasonable, not unduly discriminatory or preferential, is in the public interest, and satisfies the requirements of subsection (c) of this section.
(g) Reliability reports
The ERO shall conduct periodic assessments of
the reliability and adequacy of the bulk-power
system in North America.
(h) Coordination with Canada and Mexico
The President is urged to negotiate international agreements with the governments of
Canada and Mexico to provide for effective compliance with reliability standards and the effectiveness of the ERO in the United States and
Canada or Mexico.
(i) Savings provisions
(1) The ERO shall have authority to develop
and enforce compliance with reliability standards for only the bulk-power system.
(2) This section does not authorize the ERO or
the Commission to order the construction of additional generation or transmission capacity or
to set and enforce compliance with standards for
adequacy or safety of electric facilities or services.
(3) Nothing in this section shall be construed
to preempt any authority of any State to take
action to ensure the safety, adequacy, and reliability of electric service within that State, as
long as such action is not inconsistent with any
reliability standard, except that the State of
New York may establish rules that result in
greater reliability within that State, as long as
such action does not result in lesser reliability
outside the State than that provided by the reliability standards.
(4) Within 90 days of the application of the
Electric Reliability Organization or other affected party, and after notice and opportunity
for comment, the Commission shall issue a final
order determining whether a State action is inconsistent with a reliability standard, taking
into consideration any recommendation of the
ERO.
(5) The Commission, after consultation with
the ERO and the State taking action, may stay
the effectiveness of any State action, pending
the Commission’s issuance of a final order.
(j) Regional advisory bodies
The Commission shall establish a regional advisory body on the petition of at least twothirds of the States within a region that have

Page 1351

TITLE 16—CONSERVATION

more than one-half of their electric load served
within the region. A regional advisory body
shall be composed of one member from each participating State in the region, appointed by the
Governor of each State, and may include representatives of agencies, States, and provinces
outside the United States. A regional advisory
body may provide advice to the Electric Reliability Organization, a regional entity, or the
Commission regarding the governance of an existing or proposed regional entity within the
same region, whether a standard proposed to
apply within the region is just, reasonable, not
unduly discriminatory or preferential, and in
the public interest, whether fees proposed to be
assessed within the region are just, reasonable,
not unduly discriminatory or preferential, and
in the public interest and any other responsibilities requested by the Commission. The Commission may give deference to the advice of any
such regional advisory body if that body is organized on an Interconnection-wide basis.
(k) Alaska and Hawaii
The provisions of this section do not apply to
Alaska or Hawaii.
(June 10, 1920, ch. 285, pt. II, § 215, as added Pub.
L. 109–58, title XII, § 1211(a), Aug. 8, 2005, 119
Stat. 941.)
STATUS OF ERO
Pub. L. 109–58, title XII, § 1211(b), Aug. 8, 2005, 119
Stat. 946, provided that: ‘‘The Electric Reliability Organization certified by the Federal Energy Regulatory
Commission under section 215(c) of the Federal Power
Act [16 U.S.C. 824o(c)] and any regional entity delegated
enforcement authority pursuant to section 215(e)(4) of
that Act [16 U.S.C. 824o(e)(4)] are not departments,
agencies, or instrumentalities of the United States
Government.’’
ACCESS APPROVALS BY FEDERAL AGENCIES
Pub. L. 109–58, title XII, § 1211(c), Aug. 8, 2005, 119
Stat. 946, provided that: ‘‘Federal agencies responsible
for approving access to electric transmission or distribution facilities located on lands within the United
States shall, in accordance with applicable law, expedite any Federal agency approvals that are necessary
to allow the owners or operators of such facilities to
comply with any reliability standard, approved by the
[Federal Energy Regulatory] Commission under section
215 of the Federal Power Act [16 U.S.C. 824o], that pertains to vegetation management, electric service restoration, or resolution of situations that imminently
endanger the reliability or safety of the facilities.’’

§ 824p. Siting of interstate electric transmission
facilities
(a) Designation of national interest electric
transmission corridors
(1) Not later than 1 year after August 8, 2005,
and every 3 years thereafter, the Secretary of
Energy (referred to in this section as the ‘‘Secretary’’), in consultation with affected States,
shall conduct a study of electric transmission
congestion.
(2) After considering alternatives and recommendations from interested parties (including
an opportunity for comment from affected
States), the Secretary shall issue a report, based
on the study, which may designate any geographic area experiencing electric energy transmission capacity constraints or congestion that

§ 824p

adversely affects consumers as a national interest electric transmission corridor.
(3) The Secretary shall conduct the study and
issue the report in consultation with any appropriate regional entity referred to in section 824o
of this title.
(4) In determining whether to designate a national interest electric transmission corridor
under paragraph (2), the Secretary may consider
whether—
(A) the economic vitality and development
of the corridor, or the end markets served by
the corridor, may be constrained by lack of
adequate or reasonably priced electricity;
(B)(i) economic growth in the corridor, or
the end markets served by the corridor, may
be jeopardized by reliance on limited sources
of energy; and
(ii) a diversification of supply is warranted;
(C) the energy independence of the United
States would be served by the designation;
(D) the designation would be in the interest
of national energy policy; and
(E) the designation would enhance national
defense and homeland security.
(b) Construction permit
Except as provided in subsection (i) of this section, the Commission may, after notice and an
opportunity for hearing, issue one or more permits for the construction or modification of
electric transmission facilities in a national interest electric transmission corridor designated
by the Secretary under subsection (a) of this
section if the Commission finds that—
(1)(A) a State in which the transmission facilities are to be constructed or modified does
not have authority to—
(i) approve the siting of the facilities; or
(ii) consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State;
(B) the applicant for a permit is a transmitting utility under this chapter but does not
qualify to apply for a permit or siting approval for the proposed project in a State because the applicant does not serve end-use customers in the State; or
(C) a State commission or other entity that
has authority to approve the siting of the facilities has—
(i) withheld approval for more than 1 year
after the filing of an application seeking approval pursuant to applicable law or 1 year
after the designation of the relevant national interest electric transmission corridor, whichever is later; or
(ii) conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce
or is not economically feasible;
(2) the facilities to be authorized by the permit will be used for the transmission of electric energy in interstate commerce;
(3) the proposed construction or modification is consistent with the public interest;
(4) the proposed construction or modification will significantly reduce transmission