RM16-20 NOPR Supporting Statement 6-28-17

FERC-725A (OMB Control No.: 1902-0244)

FERC-725G (OMB Control No.:1902-0252)

Notice of Proposed Rulemaking in Docket RM16-20 (issued 12/15/2016)

RIN: 1902-AF36

Updated: 6/28/2017

Supporting Statement for

FERC-725A (Mandatory Reliability Standards for the Bulk-Power System) and FERC-725G (Mandatory Reliability Standards: PRC Reliability Standards),

as modified by the NOPR in RM16-20¹

The Federal Energy Regulatory Commission (Commission or FERC) requests the Office of Management and Budget (OMB) review and approved the information collection in Notice of Proposed Rulemaking (NOPR) RM16-20 which implements Reliability Standard PRC-012-2 (Remedial Action Schemes (RAS)).

This consolidated supporting statement addresses revisions to the following information collections:

1. FERC-725A (Mandatory Reliability Standards for the Bulk-Power System), 1902-0244

2. FERC-725G (Mandatory Reliability Standards: PRC Reliability Standards), 1902-0252

Background

On August 8, 2005, The Electricity Modernization Act of 2005, which is Title XII of the Energy Policy Act of 2005 (EPAct 2005), was enacted into law.² Under section 215 of the Federal Power Act (FPA), the Commission requires a Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards³, which are subject to Commission review and approval. In 2006, the Commission established a process to select and certify an ERO and, subsequently, certified NERC as the ERO.⁴ In Order No. 693, the Commission approved 83 of 107 proposed Reliability Standards submitted by NERC, including Reliability Standards PRC-015-1 (Remedial Action Scheme Data and Documentation) and PRC-016-1 (Remedial Action Scheme Misoperation).⁵. In Order No. 693, the Commission determined that proposed Reliability Standards PRC-012-0, PRC-013-0, and PRC-014-0 were a “fill-in-the-blank” Reliability Standards because, while it was proposed to require regional reliability organizations to ensure that all special protection systems are properly designed, meet performance requirements, and are coordinated with other protection systems, NERC had not submitted any regional review procedures with this standard.⁶ The Commission stated that it would not approve or remand proposed Reliability Standards PRC-012-0, PRC-013-0 or PRC-014-0 until NERC submitted the additional necessary information to the Commission.⁷

On August 5, 2016, NERC submitted a petition seeking Commission approval of proposed Reliability Standard PRC-012-2.⁸ NERC contends that proposed Reliability Standard PRC-012-2 is just, reasonable, not unduly discriminatory or preferential, and in the public interest.⁹ NERC explains that the intent of proposed Reliability Standard PRC-012-2 is to supersede “pending” Reliability Standards PRC-012-1, PRC-013-1, and PRC-014-1 and to retire and replace currently-effective Reliability Standards PRC-015-1 and PRC-016-1.¹⁰ NERC states that proposed Reliability Standard PRC-012-2 represents substantial improvements over these Reliability Standards because it streamlines and consolidates existing requirements; corrects the applicability of previously unapproved Reliability Standards; and implements a continent-wide RAS review program.¹¹

A. Justification

1. CIRCUMSTANCES THAT MAKE THE COLLECTION OF INFORMATION NECESSARY

Pursuant to section 215 of the Federal Power Act (FPA),¹² the Commission proposes to approve Reliability Standard PRC-012-2 (Remedial Action Schemes), developed by the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO). The Commission believes that the proposed Reliability Standard PRC-012-2 is necessary to ensure that remedial action schemes (RAS) do not introduce unintentional or unacceptable reliability risks to the bulk electric system. The Commission proposes that there are benefits to clarifying and bringing efficiencies to the PRC Reliability Standard, consistent with the Commission’s policy promoting increased efficiencies in Reliability Standards and reducing requirements that are either redundant with other currently-effective requirements or have little reliability benefit.¹³

FERC-725A: Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC, including Reliability Standards PRC-015-1 (Remedial Action Scheme Data and Documentation) and PRC-016-1 (Remedial Action Scheme Misoperation). Reliability Standard PRC-015-1 requires transmission owners, generator owners, and distribution providers to maintain a listing, retain evidence or review and provide documentation of existing, new or functionally modified special protection systems. In this NOPR, these two Reliability Standards (PRC-016-1 and PRC-015-1) are being retired.

FERC-725G: On August 5, 2016, NERC submitted a petition seeking Commission approval of proposed Reliability Standard PRC-012-2.¹⁴ NERC contends that proposed Reliability Standard PRC-012-2 is just, reasonable, not unduly discriminatory or preferential, and in the public interest.¹⁵ NERC explains that the intent of proposed Reliability Standard PRC-012-2 is to supersede “pending” Reliability Standards PRC-012-1, PRC-013-1, and PRC-014-1 and to retire and replace currently-effective Reliability Standards PRC-015-1 and PRC-016-1.¹⁶ NERC states that proposed Reliability Standard PRC-012-2 represents substantial improvements over these Reliability Standards because it streamlines and consolidates existing requirements; corrects the applicability of previously unapproved Reliability Standards; and implements a continent-wide RAS review program.¹⁷

2. HOW, BY WHOM, AND FOR WHAT PURPOSE THE INFORMATION IS TO BE USED AND THE CONSEQUENCES OF NOT COLLECTING THE INFORMATION

In general, information collection and record retention requirements related to Reliability Standards are not submitted to, or retained for audit by, FERC. Rather they are submitted to, or retained for audit by, NERC or the Compliance Enforcement Authority, as specified in each individual Reliability Standard.

FERC-725A and FERC-725G: The applicable entities of the Reliability Standard requires reliability coordinators, planning coordinators, and RAS-entities. The reliability coordinator must complete the review before an entity places a new or functionally modified RAS into service. Proposed Requirement R4 requires the planning coordinator to perform a periodic evaluation of each RAS within its planning area, at least once every five years.¹⁸ The evaluation must determine, inter alia, whether each RAS: (1) mitigates the system conditions or contingencies for which it was designed; and (2) avoids adverse interactions with other RAS and protection systems. Proposed Requirement R4, Part 4.1.3 footnote 1 defines a certain subset of RAS as “limited impact” RAS to mean “A RAS designated as limited impact cannot, by inadvertent operation or failure to operate, cause or contribute to BES Cascading, uncontrolled separation, angular instability, voltage instability, voltage collapse, or unacceptably damped oscillations.”¹⁹ Without collecting this information at the proposed frequency, reliability of the bulk-power system could become compromised potentially resulting in wide spread outages.

3. DESCRIBE ANY CONSIDERATION OF THE USE OF IMPROVED TECHNOLOGY TO REDUCE BURDEN AND TECHNICAL OR LEGAL OBSTACLES TO REDUCING BURDEN.

The use of current or improved technology and the medium are not covered in PRC Reliability Standards.

We think that nearly all of the respondents are likely to make and keep related records in an electronic format. Each of the eight Regional Entities has a well-established compliance portal for registered entities to electronically submit compliance information and reports. The compliance portals allow documents developed by the registered entities to be attached and uploaded to the Regional Entity’s portal. Compliance data can also be submitted by filling out data forms on the portals. These portals are accessible through an internet browser password-protected user interface.

In general, the Commission supports the use of information technology to reduce burden.

4. DESCRIBE EFFORTS TO IDENTIFY DUPLICATION AND SHOW SPECIFICALLY WHY ANY SIMILAR INFORMATION ALREADY AVAILABLE CANNOT BE USED OR MODIFIED FOR USE FOR THE PURPOSE(S) DESCRIBED IN INSTRUCTION NO. 2

FERC-725A and FERC-725G: Filing requirements are periodically reviewed as OMB review dates arise or as the Commission may deem necessary in carrying out its regulatory responsibilities under the FPA in order to eliminate duplication and ensure that filing burden is minimized. There are no similar sources for information available that can be used or modified for these reporting purposes.

5. METHODS USED TO MINIMIZE BURDEN IN COLLECTION OF INFORMATION INVOLVING SMALL ENTITIES

FERC-725A and FERC-725G: The proposed Reliability Standard PRC-012-2 improves upon the existing standards because it removes ambiguity in NERC’s original “fill-in-the-blank” Reliability Standards by assigning responsibility to appropriate functional entities. It also streamlines and consolidates the RAS Reliability Standards into one unambiguous and effective Reliability Standard.

Our estimates regarding the number of respondents are based on an examination of the NERC Compliance Registry as of April 21, 2016. According to the NERC Compliance Registry for reliability coordinators, planning coordinators, transmission owners, generation owners, and distribution providers and an estimation of how many entities from that registry will be affected by the proposed Reliability Standard. At the time of Commission review of proposed Reliability Standard PRC‑012‑2, 15 reliability coordinators, 71 planning coordinators, 328 transmission owners, 930 generation owners, and 367 distribution providers in the United States were registered in the NERC compliance registry. However, under NERC’s compliance registration program, entities may be registered for multiple functions, so these numbers incorporate some duplicative counting. The Commission notes that many generation sites share a common generation owner.

6. CONSEQUENCE TO FEDERAL PROGRAM IF COLLECTION WERE CONDUCTED LESS FREQUENTLY

FERC-725A and FERC-725G: The purpose of Reliability Standard PRC-012-2 ensures the remedial action schemes (RAS) does not introduce unintentional or unacceptable reliability risks to the bulk electric system. Reliability Standard PRC-012-2 enhances reliability by addressing all aspects of RAS in a single, continent-wide Reliability Standard and by assigning specific RAS responsibilities to reliability coordinators, planning coordinators and RAS-entities. Failure to follow requirements and compliance of PRC-012-2 could directly affect the ability to effectively monitor, control and ensure reliability of the bulk electric system.

7. EXPLAIN ANY SPECIAL CIRCUMSTANCES RELATING TO THE INFORMATION COLLECTION

FERC-725A. There are no special circumstances relating to this collection.

FERC-725G: Proposed Requirements R1, R2, and R3, together, establish a process for the reliability coordinator to review new or modified RAS schemes.²⁰ The reliability coordinator must complete the review before an entity places a new or functionally modified RAS into service.

Proposed Requirement R4 requires the planning coordinator to perform a periodic evaluation of each RAS within its planning area, at least once every five years.²¹ The evaluation must determine, inter alia, whether each RAS: (1) mitigates the system conditions or contingencies for which it was designed; and (2) avoids adverse interactions with other RAS and protection systems. Proposed Requirement R4, Part 4.1.3 footnote 1 defines a certain subset of RAS as “limited impact” RAS to mean “A RAS designated as limited impact cannot, by inadvertent operation or failure to operate, cause or contribute to BES Cascading, uncontrolled separation, angular instability, voltage instability, voltage collapse, or unacceptably damped oscillations.”²²

8. DESCRIBE EFFORTS TO CONSULT OUTSIDE THE AGENCY: SUMMARIZE PUBLIC COMMENTS AND THE AGENCY'S RESPONSE TO THESE COMMENTS

The ERO process²³ to develop and establish Reliability Standards is a collaborative process between the ERO, Regional Entities and other industry stakeholders developing, discussing, and reviewing drafts, commenting and voting on the drafts, posting responses to the comments, conducting a final ballot, and submitting the standard an implementation plan to the Board of Trustees (BOT) for adoption and approval (this process provides several opportunities for review and comment by stakeholders and interested parties). Then, the final proposed standard (if approved by the BOT) is submitted by the ERO to the FERC for review and approval. Upon approval by FERC, the standards are mandatory and enforceable.

FERC notices were published in the Federal Register thereby allowing all public utilities, natural gas and oil pipeline companies, state commissions, federal agencies, and other interested parties an opportunity to submit comments, or suggestions concerning the proposal. The 60-day Notice was published in the Federal Register (82 FR 9702, 2/8/2017).

9. EXPLAIN ANY PAYMENT OR GIFTS TO RESPONDENTS

The Commission does not make payments or provide gifts for respondents related to FERC-725A and FERC-725G.

10. DESCRIBE ANY ASSURANCE OF CONFIDENTIALITY PROVIDED TO RESPONDENTS

According to the NERC Rules of Procedure²⁴, “…a Receiving Entity shall keep in confidence and not copy, disclose, or distribute any Confidential Information or any part thereof without the permission of the Submitting Entity, except as otherwise legally required.” This serves to protect confidential information submitted to NERC or Regional Entities.

Responding entities do not submit the information collected due to the Reliability Standards to FERC. Rather, they submit the information to NERC, the regional entities, or maintain it internally. Since there are no submissions made to FERC, FERC provides no specific provisions in order to protect confidentiality.

11. PROVIDE ADDITIONAL JUSTIFICATION FOR ANY QUESTIONS OF A SENSITIVE NATURE, SUCH AS SEXUAL BEHAVIOR AND ATTITUDES, RELIGIOUS BELIEFS, AND OTHER MATTERS THAT ARE COMMONLY CONSIDERED PRIVATE

There are no questions of a sensitive nature that are considered private in FERC-725A and FERC-725G.

12. ESTIMATED BURDEN OF COLLECTION OF INFORMATION

FERC-725A. FERC is being conservative and not subtracting hours at this time from FERC-725A. Burden will be removed from this collection at a later date.

FERC-725G. The number of respondents below is based on an examination of the NERC compliance registry for reliability coordinators, planning coordinators, transmission owners, generation owners, and distribution providers and an estimation of how many entities from that registry will be affected by the proposed Reliability Standard. At the time of Commission review of proposed Reliability Standard PRC‑012‑2, 15 reliability coordinators, 71 planning coordinators, 328 transmission owners, 930 generation owners, and 367 distribution providers in the United States were registered in the NERC compliance registry. However, under NERC’s compliance registration program, entities may be registered for multiple functions, so these numbers incorporate some double counting. The Commission notes that many generation sites share a common generation owner. The following table illustrates the estimated burden to be applied to the information collection.²⁵

RM16-20-000 (Mandatory Reliability Standards: Reliability Standard PRC-012-2)
Requirement and Respondent Category for PRC-012-2	Number of Respondents (1)	Number of Responses per Respondent (2)	Total Number of Responses (1)*(2)=(3)	Average Burden Hours & Cost per Response26 (4)	Annual Burden Hours & Total Annual Cost (3)*(4)=(5)
R1. Each RAS-entity (TO, GO, DP)	1,595	1	1,595	(Eng.) 24 hrs. ($1,543); (R.K.) 12 hrs. ($453)	57,420 hrs. (38,280 Eng., 19,140 R.K.); $3,183,556 ($2,461,021 Eng., $722,535 R.K.)
R2. Each Reliability Coordinator	15	1	15	(Eng.) 16 hrs. ($1,029); (R.K.) 4 hrs. ($151)	300 hrs. (240 Eng., 60 R.K.); $17,695 ($15,430 Eng., $2,265 R.K.)
R4. Each Planning Coordinator	71	1	71	(Eng.) 16 hrs. ($1,029); (R.K.) 4 hrs. ($151)	1,420 hrs. (1,136 Eng., 284 R.K.); $85,754 ($73,033 Eng., $10,721 R.K.)
R5, R6, R7, and R8. Each RAS-entity (TO, GO, DP)	1,595	1	1,595	(Eng.) 24 hrs. ($1,543); (R.K.) 12 hrs. ($453)	57,420 hrs. (38,280 Eng., 19,140 R.K.); $3,183,556 ($2,461,021 Eng., $722,535 R.K.)
R9. Each Reliability Coordinator	15	1	15	(Eng.) 10 hrs. ($653); (R.K.) 4 hrs. ($151)	210 hrs. (150 Eng., 60 R.K.); $11,909 ($9,644 Eng., $2,265 R.K.)
TOTAL			3,291		116,770 hrs. (78,086 Eng., 38,684 R.K.); $6,480,470 ($5,020,149 Eng.; $1,460,321 R.K.)

13. ESTIMATE OF THE TOTAL ANNUAL COST BURDEN TO RESPONDENTS

All of the costs in the proposed rule are associated with burden hours (labor) and described in Questions #12 and #15 in this supporting statement. There are no start-up or other non-labor costs.

Total Capital and Start-up cost: $0

Total Operation, Maintenance, and Purchase of Services: $0

14. ESTIMATED ANNUALIZED COST TO FEDERAL GOVERNMENT

The Regional Entities and NERC do most of the data processing, monitoring, audit, and compliance work for Reliability Standards.  Any involvement by the Commission is covered under the FERC-725 collection (OMB Control No. 1902-0244) and is not part of this request or package. The data are not submitted to FERC. 

There is no FERC analysis and processing of the filings associated with FERC-725A and FERC-725G.

The Commission does incur the costs associated with obtaining OMB clearance for FERC-725A and FERC-725G collections under the Paperwork Reduction Act (PRA).  FERC estimates the annual cost for this effort to be $5,481.00 for each of the collection for a total of $10,962.00.

FERC-725A and FERC-725G	Number of Employees (FTEs)	Estimated Annual Federal Cost
FERC-725A Analysis and Processing of filings	0	$0
FERC-725G Analysis and Processing of filings	0	$0
PRA27 Administrative Cost28 for FERC-725A		$5,481.00
PRA Administrative Cost for FERC-725G		$5,481.00
TOTAL		$10,962.00

15. REASONS FOR CHANGES IN BURDEN INCLUDING THE NEED FOR ANY INCREASE

FERC-725A: Reliability Standards PRC-015-1 and PRC-016-1 are being retired with the proposal of PRC-012-1 and will reduce the burden in FERC-725A.²⁹ FERC is being conservative and not subtracting hours at this time from FERC-725A. Burden will be removed from this collection at a later date.

FERC-725G: Proposed Reliability Standard PRC-012-2 sets forth Requirements for remedial action schemes to ensure that remedial action schemes do not introduce unintentional or unacceptable reliability risks to the bulk electric system and are coordinated to provide the service to the system as intended. Reliability Standard PRC-012-2 improves upon the existing standards because it removes ambiguity in NERC’s original “fill-in-the-blank” Reliability Standards by assigning responsibility to appropriate functional entities. It also streamlines and consolidates the RAS Reliability Standards into one clear, effective Reliability Standard.

FERC-725A (OMB Control No. 1902-0244)	Total Request	Previously Approved	Change due to Adjustment in Estimate29	Change Due to Agency Discretion29
Annual Number of Responses	3,966	3,966	0	0
Annual Time Burden (Hr.)	1,624,395	1,624,395	0	0
Annual Cost Burden ($)	$126,725	$126,725	$0	$0

FERC-725G (OMB Control No. 1902-0252)	Total Request	Previously Approved	Change due to Adjustment in Estimate	Change Due to Agency Discretion
Annual Number of Responses	10,770	7,479	0	3,291
Annual Time Burden (Hr.)	643,647	526,877	0	116,770
Annual Cost Burden ($)	$0	$0	$0	$0

16. TIME SCHEDULE FOR THE PUBLICATION OF DATA

There is no publication of data associated with FERC-725A or FERC-725G collections of information.

17. DISPLAY OF THE EXPIRATION DATE

The expiration dates are posted on ferc.gov at http://www.ferc.gov/docs-filing/info-collections.asp.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT

There are no exceptions.

1 The Order was issued on 19 January 2017 and is posted at https://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=14469212

2 The Energy Policy Act of 2005 (EPAct), Pub. L. No 109-58, Title XII, Subtitle A, 119 Stat. 594, 941 (2005), codified at 16 U.S.C. 824o (2000).

3 The Federal Power Act (as modified by the EPAct) states “[t]he 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 North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on reh’g and compliance, 117 FERC ¶ 61,126 (2006), order on compliance, 118 FERC ¶ 61,190, order on reh’g, 119 FERC ¶ 61,046 (2007), aff’d sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).

5 Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, FERC Stats. and Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053 (2007).

6 Id. PP 1517-18, 1520; PP 1521-22, 1524; PP 1525-25, 1528. The Commission used the term “fill-in-the-blank” standards to refer to proposed Reliability Standards that required the regional reliability organizations to develop at a later date criteria for use by users, owners or operators within each region. Id. P 297.

7 Id. PP 1520, 1524, 1528.

8 Proposed Reliability Standard PRC-012-2 is not attached to this Notice of Proposed Rulemaking. The proposed Reliability Standard is available on the Commission’s eLibrary document retrieval system in Docket No. RM16-20-000 and is posted on NERC’s website, http:// www.nerc.com.

9 NERC Petition at 2.

10 NERC notes that it submitted “for completeness” revised versions of Reliability Standards PRC-012-1, PRC-013-1, and PRC‑014‑1 in its petition to revise the definition of RAS, but NERC did not request Commission approval of the revised Reliability Standards in that proceeding. Id. at 1 n.5.

11 Id. at 12-13.

12 16 U.S.C. 824o (2012).

13 Electric Reliability Organization Proposal to Retire Requirements in Reliability Standards, Order No. 788, 145 FERC ¶ 61,147 (2013).

14 Proposed Reliability Standard PRC-012-2 is not attached to the Notice of Proposed Rulemaking but is included in ROCIS and reginfo.gov. The proposed Reliability Standard is available on the Commission’s eLibrary document retrieval system in Docket No. RM16-20-000 and is posted on NERC’s website, http:// www.nerc.com.

15 NERC Petition at 2.

16 NERC notes that it submitted “for completeness” revised versions of Reliability Standards PRC-012-1, PRC-013-1, and PRC‑014‑1 in its petition to revise the definition of RAS, but NERC did not request Commission approval of the revised Reliability Standards in that proceeding. Id. at 1 n.5.

17 Id. at 12-13.

18 Id. at 18-22.

19 Id. at 19 & n.44.

20 Id. at 15-18.

21 Id. at 18-22.

22 Id. at 19 & n.44.

23 Details of the ERO’s standard process is available on the NERC website in the Standard Process Manual (Version 3, effective 6/26/2013) at http://www.nerc.com/comm/SC/Documents/Appendix_3A_StandardsProcessesManual.pdf . Figure 1 (Process for Developing or Modifying a Reliability Standard) on page 15 of the NERC manual includes a diagram showing the “typical process for a project identified in the Reliability Standards Development Plan that involves a revision to an existing Reliability Standard....”

24 Section 1502, Paragraph 2, available at NERCs website

25 In the burden table, engineering is abbreviated as “Eng.” and record keeping is abbreviated as “R.K.”

26 The estimates for cost per response are derived using the following formula: Burden Hours per Response * $/hour = Cost per Response. The $64.29/hour figure for an engineer and the $37.75/hour figure for a record clerk are based on the average salary plus benefits data from the Bureau of Labor Statistics.

27 Paperwork Reduction Act of 1995 (PRA)

28 The Commission bases the cost of Paperwork Reduction Act administration on staff time, and other costs related to compliance with the Paperwork Reduction Act of 1995.

29 Reliability Standards PRC-015-1 and PRC-016-1 are in the Reliability Standards approved in FERC-725A, (OMB Control No 1902-0244). FERC is being conservative and not subtracting hours at his time from FERC-725A. Burden will be removed from this collection at a later date.