NERC Exhibit C, Order No. 672 Criteria Rel Stand VAR-501-WECC-3

Exhibit C
Order No. 672 Criteria for Proposed Regional Reliability Standard VAR-501-WECC-3

Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
NERC is responsible for ensuring that the Reliability Standards, Violation Risk Factors (VRF),
Violation Severity Levels (VSL), definitions, Variances, and Interpretations developed by drafting
teams are developed in accordance with NERC processes. They must also meet NERC’s
benchmarks for Reliability Standards, as well as criteria for governmental approval.
In FERC Order No. 672, 1 the Federal Energy Regulatory Commission (FERC) identified a number
of criteria that 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 Regional Reliability
Standard has met or exceeded the criteria:
1.

Proposed reliability standards must be designed to achieve a specified reliability goal.
The proposed Reliability Standard must address a reliability concern that falls
within the requirements of section 215 of the Federal Power Act. 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 321.
NERC 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.”
NERC Reliability Principle 1 states: “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.” 2

1

http://www.nerc.com/files/final_rule_reliability_Order_672.pdf

2

http://www.nerc.com/files/Reliability_Principles.pdf
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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
The Purpose of VAR-501-WECC-3 is “to ensure the Western
Interconnection is operated in a coordinated manner under normal and
abnormal conditions by establishing the performance criteria for WECC
power system stabilizers.”
2. Proposed reliability standards must contain a technically sound method to achieve the
goal.
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.
Order No. 672 at P 324.
Standard Development
The proposed standard was developed using the NERC and WECC
Standards development processes that were approved by FERC and in
effect at each point in the process. Among other things, these processes
include drafting of the standard by a drafting team composed of subject
matter experts (SME). Biographies of those SMEs are provided with this
filing.
These processes also include repeated public iterative
comment/response cycles whereby comments are received from the
industry and responses to those comments are provided by the drafting
team.
Technically Sound
A technical review of the PSS tuning specifications is provided in Attachment F of
this filing, WECC-0107 VAR-501-WECC-3 Power System Stabilizers, Use of
Minimum-Load for Tuning In Proposed Requirement R3, WECC-0107 Drafting
Team (DT), Kestrel Consulting, Mr. Leo Lima, Kestrel Consulting, July 2, 2015.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
A technical review of the applicability threshold is addressed in Attachment F1 of
this filing, Power System Stabilizer Applicability in the WECC System, Study
Progress Report to WECC-0107 Drafting Team, Shawn Patterson of the United
States Bureau of Reclamation, April 2014.
Lessons Learned
PSSs are part of the Automatic Voltage Regulation (AVR) system of a generator
and are designed to add or subtract torque to a generator with the goal of
damping oscillations on the WECC Interconnection’s Bulk Electric System (BES)
that otherwise would be amplified if the AVR is operated by itself.
PSSs within WECC (originally called Supplementary Control Systems) were
developed in the 1960s in response to power system oscillations on the Pacific
Intertie within the Western Interconnection. These oscillations occur at very low
frequencies (<1 hertz), are very lightly dampened, and became known as “interarea modes” (modes) of oscillation because they occurred when real power was
transferred from one Western Interconnection geographic region to another
(such as between the Pacific Northwest and the Southwest).
These modal oscillations are the result of a combination of many machines on
one part of the Western Interconnection BES whose voltage support response to
system fluctuations is not in phase with the response of machines on another
part of the Interconnection’s BES.
WECC Physical Characteristics
The Federal Energy Regulatory Commission (FERC) Order 740, Docket No. RM0915-000, P23, noted that “in the Western Interconnection a significant number of
transmission paths are voltage or frequency stability-limited, in contrast to other
regions of the [BES] where transmission paths more often are thermally-limited.
Disturbances resulting 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. [FERC has also noted]
its understanding that this physical difference is one of the reasons for the need
for certain provisions of regional Reliability Standards in the Western
Interconnection.”
When coupled with generator operations within WECC, these physical
characteristics create modal oscillations, that when not corrected by the

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
installation and accurate operation of PSS, could contribute to instability within
the WECC Interconnection.
3. Proposed reliability standards must be applicable to users, owners, and operators of
the bulk power system, and not others.
The proposed Reliability Standard may impose a requirement on any user,
owner, or operator of such facilities, but not on others. Order No. 672 at P 322.
VAR-501-WECC-3 complies with Order 672 in that it applies to the Generator
Operator and the Generator Owner.
4. Proposed reliability standards must be clear and unambiguous as to what is required
and who is required to comply.
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. Order No. 672 at P 325.
VAR-501-WECC-3 complies with Order 672 in that it applies to the Generator
Operator and the Generator Owner and specifically states the task(s) each of
those entities is required to perform.
The proposed standard requires the Generator Owner to: 1) inform the
applicable entities as to the known circumstances when a power system
stabilizer (PSS) will be out-of-service (R1), 2) tune the PSS to stated specifications
(R3), and 3) establish installation (R4) and servicing criteria (R5) for the PSS.
The proposed standard requires the Generator Operator to have the PSS
in-service unless otherwise specified (R2).
5. Proposed reliability standards must include clear and understandable consequences
and a range of penalties (monetary and/or non-monetary) for a violation.
The possible consequences, including range of possible penalties, for violating a
proposed Reliability Standard should be clear and understandable by those who
must comply. Order No. 672 at P 326.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
Violation Risk Factors
The WECC-0107 VAR-501-WECC-3 - Power System Stabilizer Drafting
Team (DT) used the NERC-provided guidance document for Violation Risk
Factors (VRF) to determine the VRF for each requirement. Based on the
guidance document, the DT assigned a low VRF to Requirement R1
because the requirement is administrative in nature addressing the
planning horizon. A violation of the requirement would not—under the
emergency, abnormal, or restorative conditions anticipated by the
preparations—be expected to adversely affect the electrical state or
capability of the Bulk Electric System (BES), or the ability to effectively
monitor, control, or restore the BES.
All other requirements were assigned a medium VRF.
The remaining requirements address the operational horizon. If violated,
they could directly affect the electrical state or the capability of the BES,
or the ability to effectively monitor and control the BES. However,
violation of these medium-risk requirements is unlikely to lead to BES
instability, separation, or cascading failures.
Violation Severity Level (VSL)
The DT used the NERC-provided guidance document for VSLs to
determine the VSL for each requirement. Based on the guidance
document, the DT assigned a severe VSL to Requirements R1, R4 and R5,
because the requirements are binary in nature, that is a “pass or fail”
type requirement where any degree of noncompliant performance would
result in totally or mostly missing the reliability intent of the
Requirements.
For each of the remaining Requirements, the DT assigned a gradated
performance schedule with each requirement being assigned four
increasing tiers for non-compliance. In each case the DT concluded that
partial performance would have some reliability-related value.
The VSL for Requirement R2 is based on the passage of time. The longer
a Generator Operator leaves its power system stabilizer out of service,
the greater the VSL becomes.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
The VSL for Requirement R3 is based on the cumulative number of times
the Generator Owner failed to meet the prescribed performance. Each
piece of the prescribed performance contributes equally to the reliabilityrelated objective; therefore, the VSL was uniformly applied for each
piece.
6. Proposed reliability standards must identify clear and objective criterion or measure
for compliance, so that it can be enforced in a consistent and non-preferential
manner.
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. Order No. 672 at P 327.
Each proposed requirement has a corresponding measure stating the
objective evidence required to illustrate compliance.
7. Proposed reliability standards should achieve a reliability goal effectively and
efficiently - but does not necessarily have to reflect “best practices” without regard to
implementation cost.
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. Order No.
672 at P 328.
The proposed standard was posted eight times for comment. Each time,
the industry was invited to provide comments on all aspects of the
document. Cost concerns were raised by PPL Montana in Posting 1. In
response, the DT reassured PPL that the standard would not apply to all
units; it would only apply to those impacting the BES. In the following
seven postings the DT received no comments regarding costs.
8. Proposed reliability standards cannot be “lowest common denominator,” i.e., cannot
reflect a compromise that does not adequately protect bulk power system reliability.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
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 the Commission 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. Order No. 672 at P 329.
The proposed standard takes the existing standard and builds on its
strengths. The existing standard has but one requirement calling for a
PSS to be in-service for 98% of the time. The spirit of the requirement is
retained but redrafted so the applicable entities no longer have to count
each hour but are still required to keep the PSS in-service.
In addition to retention of the in-service requirement, the proposed
standard adds requirements to install, tune, repair and document the
operations of its PSS.
9. Proposed reliability standards may consider costs to implement for smaller entities
but not at consequence of less than excellence in operating system reliability.
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 operator of the Bulk-Power System must bear the
cost of complying with each Reliability Standard that applies to it. Order No. 672
at P 330.
See response to Question 7.
10. 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 area or approach.
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

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
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. Order No. 672 at P 331.
Matters not Covered Elsewhere
The Federal Energy Regulatory Commission (FERC) has stated that,
Regional Entity Standards or Regional Variances to a NERC Reliability
Standard (Standard) are permissible if:
• they set more stringent reliability requirements than the NERC
Reliability Standard;
• cover matters not covered by an existing NERC Reliability
Standard; or
• are necessitated by a physical difference in the Bulk-Power
System (BES). 3
As mentioned in Question 8, the proposed standard adds requirements
not otherwise addressed in existing NERC Standards.
WECC Physical Characteristics
The Federal Energy Regulatory Commission (FERC) Order 740, Docket No.
RM09-15-000, P23, noted that “in the Western Interconnection a
significant number of transmission paths are voltage or frequency
stability-limited, in contrast to other regions of the [BES] where
transmission paths more often are thermally-limited. Disturbances
resulting 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. [FERC has also noted] its
understanding that this physical difference is one of the reasons for the
need for certain provisions of regional Reliability Standards in the
Western Interconnection.”

3

Order No. 672 at P 291. See also NERC Functional Model, Version 5, “2. Reliability Standards,” page
36.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
When coupled with generator operations within WECC, these physical
characteristics create modal oscillations, that when not corrected by the
installation and accurate operation of PSS, could contribute to instability
within the Western Interconnection.
11. Proposed reliability standards should cause no undue negative effect on competition
or restriction of the grid.
As directed by section 215 of the FPA, the Commission 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. Order No. 672 at P 332
The proposed standard is not anticipated to have any negative impact on
competition.
12. The implementation time for the proposed reliability standards must be reasonable.
In considering whether a proposed Reliability Standard is just and reasonable,
the Commission 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. Order No. 672 at P 333
Implementation
For more detail please refer to Attachment E of this filing.
With the exception of Requirement R3, VAR-501-WECC-3 has a
standardized Effective Date.
Use of this separate Effective Date for Requirement R3 highlights the fact
that the reliability-related tasks included in Requirement R3 are a change
from existing tuning parameters and could impose an entity-specific

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
burden that is moderate to severe, depending on the existing practices of
each entity. The tiered implementation of Requirement R3 reduces the
burden by allowing entities to address the Requirement over a longer
period of time.
Units placed into first-time service after regulatory approval will require
initial testing, tuning, and set-up. As such, immediate compliance with
Requirement R3 for new units should impose no undue burden. Many of
the units already in service are currently and adequately tuned to preRequirement R3 parameters and need not be immediately revisited. The
five-year applicability date for those units already in service lessens the
burden while targeting a uniform tuning across the Western
Interconnection.
Consideration of Early Compliance
Early compliance should impose no negative impacts. Because many of
the Requirements are based on existing WECC guidelines, many Applicable
Entities within WECC will already be in voluntary compliance.
13. The reliability standard development process must be open and fair.
Further, in considering whether a proposed Reliability Standard meets the legal
standard of review, we will entertain comments about whether the ERO
implemented its Commission-approved 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 the Commission. Order No. 672 at P 334.
WECC followed the standard development process that was approved by
FERC and in effect at the time of each step in the process.
In accordance with the WECC Reliability Standards Development
Procedures, all drafting team meetings are open to the public.
This drafting team met in excess of 35 times.

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
Notice of the meetings was provided to NERC, posted on the WECC
website and embedded in the minutes of each meeting. Meeting
minutes are posted on the WECC website and accessible by the public.
All meetings were supported by a telephone conference bridge
associated with an online internet visual capability allowing all
participants to see the document(s) as they were being developed.
Further, this team held an open-mic standards briefing prior to balloting
affording the industry an additional opportunity to have its questions
addressed.
The project was posted for comment on eight occasions. On each
occasion comments were received, considered, and addressed.
In addition, the project was posted at NERC for a 45-day comment
period.
Comments and their responses are currently posted on the WECC
website at the WECC-0107 Project Page on the Submit and Review
Comments accordion and have been provided with this filing.
14. Proposed reliability standards must balance with other vital public interests.
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. Order No. 672 at P 335
WECC is not aware of any other vital public interests. No such balancing
concerns were raised or noted.
15. Proposed reliability standards must consider any other relevant factors.
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. Order No. 672 at P
323

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Order 672 Criteria
WECC-0107 Power System Stabilizer
VAR-501-WECC-3
Inter alia, the DT considered and addressed the following issues:
1) cost allocation,
2) operational impact to smaller entities, and
3) inclusion / exclusion of units based on size.
Although not all suggested changes were adopted by the DT, the DT is
confident that each voiced concern was heard, considered and
addressed.

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