NERC Criteria Order 672

Exhibit C
Order No. 672 Criteria

Order No. 672 Criteria
In Order No. 672, 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. 1 The discussion below identifies these
factors and explains how the revisions reflected in proposed Reliability Standard meet or exceed
the Commission’s 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 purpose of proposed Reliability Standard COM-001-3, attached as Exhibit A, is to
establish Interpersonal Communication capabilities necessary to maintain reliability. Proposed
Reliability Standard COM-001-3 was designed to include two new Requirements R12 and R13
on internal Interpersonal Communication capabilities. The proposed Requirements will require
applicable entities to have internal Interpersonal Communication capabilities for the exchange of
information necessary for the Reliable Operation of the Bulk Electric System (“BES”). This
includes communication capabilities between Control Centers within the same functional entity,
and/or between a Control Center and field personnel.
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. 3
The proposed Reliability Standard is applicable only to users, owners, and operators of the
Bulk-Power System and is clear and unambiguous as to what is required and who is required to

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 PP 321, 324.
3
Order No. 672 at PP 322, 325.

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comply, in accordance with Order No. 672. The proposed Reliability Standard, with proposed
new Requirements R12 and R13, applies to Transmission Operators, Balancing Authorities,
Reliability Coordinators, Distribution Providers, and Generator Operators. The proposed
Reliability Standard clearly articulates the actions that such entities must take to comply with the
standard, each of which are triggered by articulable actions and situations.
3. A proposed Reliability Standard must include clear and understandable
consequences and a range of penalties (monetary and/or non-monetary) for a
violation. 4
The Violation Risk Factors (“VRFs”) and Violation Severity Levels (“VSLs”) for the
proposed Requirements R12 and R13 of proposed Reliability Standard COM-001-3 are reflected
in Exhibit A as supported by the justification attached at Exhibit E. 5 These VRFs and VSLs
comport with NERC and Commission guidelines related to their assignment. The assignment of
the severity level for each VSL is consistent with the corresponding Requirement and will ensure
uniformity and consistency in the determination of penalties. The VSLs do not use any
ambiguous terminology, thereby supporting uniformity and consistency in the determination of
similar penalties for similar violations. For these reasons, the proposed Requirements R12 and
R13 of COM-001-3 includes clear and understandable consequences in accordance with Order
No. 672.
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. 6
The proposed Reliability Standard contains Measures that support each Requirement by
clearly identifying what is required and how the requirement will be enforced. These measures
help provide clarity regarding how the requirements will be enforced, and ensure that the

4
5
6

Order No. 672 at P 326.
No changes were made to the VRFs and VSLs for existing Requirements in COM-001-2.1.
Order No. 672 at P 327.

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requirements will be enforced in a clear, consistent, and non-preferential manner and without
prejudice to any party.
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.7
The proposed Reliability Standard and the proposed new Requirements achieve the
reliability goal effectively and efficiently in accordance with Order No. 672. Consistent with Order
No. 808, regarding COM-001-2, the proposed Requirements will ensure that Reliability Standard
COM-001-3 addresses internal Interpersonal Communications capabilities that could involve the
issuance or receipt of Operating Instructions or other communications that could directly impact
reliability. 8
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.9
The proposed Reliability Standard and Requirements does not reflect a “lowest common
denominator” approach. To the contrary, the proposed standard and two new Requirements
represent significant benefits for the reliability of the Bulk-Power System by requiring entities to
have internal Interpersonal Communication capabilities for the exchange of information necessary
for Reliable Operation of the BES. The proposed Reliability Standard and Requirements do not
sacrifice excellence in operating system reliability for costs associated with implementation of the
Reliability Standard.

7

Order No. 672 at P 328.
Order No. 808, Communications Reliability Standards, 151 FERC ¶ 61,039, 80 Fed. Reg. 22,385 (2015) (to be
codified at 18 C.F.R. pt. 40). See, e.g., id., at P 41.
9
Order No. 672 at P 329-30.
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7. 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.10
The proposed Reliability Standard applies throughout North America and does not favor
one geographic area or regional model.
8. Proposed Reliability Standards should cause no undue negative effect on
competition or restriction of the grid beyond any restriction necessary for
reliability. 11
The proposed Reliability Standard has no undue negative impact on competition. The
proposed Reliability Standard requires the same performance by each applicable entity. The
standard does not unreasonably restrict the available transmission capability or limit use of the
Bulk-Power System in a preferential manner.
9. The implementation time for the proposed Reliability Standard is reasonable.12
The proposed effective date is just and reasonable and appropriately balances the urgency of
implementing the revised standard against the reasonableness of the time allowed those who
must comply to develop necessary procedures, software, facilities, staffing or other relevant
capability. NERC proposes an effective date for COM-001-3 on the first day of the first calendar
quarter that is nine months after the effective date of the applicable regulatory approval. The
proposed implementation period is designed to allow sufficient time for the applicable entities to
make any changes in their internal process necessary to implement the proposed revisions. The
proposed effective date is reflected in the proposed Implementation Plan, attached as Exhibit B.

10
11
12

Order No. 672 at P 331.
Order No. 672 at P 332.
Order No. 672 at P 333.

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10. The Reliability Standard was developed in an open and fair manner and in
accordance with the Commission-approved Reliability Standard development
process. 13
The proposed Reliability Standard was developed in accordance with NERC’s Commission
approved, ANSI-accredited processes for developing and approving Reliability Standards. 14
Exhibit F includes a summary of the Reliability Standard development proceedings and details
the processes followed to develop the Reliability Standard. These processes included, among
other things, three comment periods, pre-ballot review periods, and balloting periods.
Additionally, all meetings of the standard drafting team were properly noticed and open to the
public.
11. NERC must explain any balancing of vital public interests in the development of
proposed Reliability Standards. 15
NERC has identified no competing public interests regarding the request for approval of
proposed Reliability Standard COM-001-3. No comments were received that indicated the
proposed Reliability Standard conflict with other vital public interests.
12. Proposed Reliability Standards must consider any other appropriate factors. 16
NERC has identified no other factors relevant to whether the proposed Reliability Standard
COM-001-3 is just and reasonable.

13

Order No. 672 at P 334.
See NERC Rules of Procedure, Section 300 (Reliability Standards Development) and Appendix 3A (Standard
Processes Manual).
15
Order No. 672 at P 335.
16
Order No. 672 at P 323.
14

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