Order No 873

172 FERC ¶ 61,225
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
18 CFR Part 40
[Docket Nos. RM19-16-000 and RM19-17-000; Order No. 873]
Electric Reliability Organization Proposal to Retire
Requirements in Reliability Standards Under the NERC Standards Efficiency Review
(Issued September 17, 2020)
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
SUMMARY: The Federal Energy Regulatory Commission (Commission) approves the
retirement of 18 Reliability Standard requirements identified by the North American
Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability
Organization. The Commission also remands proposed Reliability Standard FAC-008-4
for further consideration by NERC. The Commission takes no action at this time on the
proposed retirement of 56 MOD A Reliability Standard requirements.
DATES: This rule will become effective [INSERT DATE 60 days after date of
publication in the FEDERAL REGISTER].
FOR FURTHER INFORMATION CONTACT:
Michael Gandolfo (Technical Information)
Office of Electric Reliability, Division of Reliability Standards and Security
Federal Energy Regulatory Commission
888 First Street, NE
Washington, DC 20426
Telephone: (202) 502-6817

Docket Nos. RM19-16-000 and RM19-17-000

Mark Bennett (Legal Information)
Office of the General Counsel
Federal Energy Regulatory Commission
888 First Street, NE
Washington, DC 20426
Telephone: (202) 502-8524
SUPPLEMENTARY INFORMATION

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172 FERC ¶ 61,225
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Richard Glick and James P. Danly.
Electric Reliability Organization Proposal to Retire
Requirements in Reliability Standards Under the NERC
Standards Efficiency Review

Docket Nos. RM19-16-000
RM19-17-000

ORDER NO. 873
FINAL RULE
(Issued September 17, 2020)
1.

Pursuant to section 215(d)(2) of the Federal Power Act (FPA), 1 the Commission

approves 18 of the 76 Reliability Standard requirements requested for retirement by the
North American Electric Reliability Corporation (NERC). 2 For the reasons discussed
below, we determine that the retirement of the 18 Reliability Standard requirements
through the retirement of four Reliability Standards and the modification of five
Reliability Standards is just, reasonable, not unduly discriminatory or preferential, and in
the public interest. 3 The Commission also approves the associated violation risk factors,
violation severity levels, implementation plan, and effective dates proposed by NERC.
1

16 U.S.C. 824o(d)(2).

2

NERC withdrew the originally requested retirement of Reliability Standard
VAR-001-6, Requirement R2 on May 14, 2020.
3

The four Reliability Standards being eliminated in their entirety are Reliability
Standards FAC-013-2 (Assessment of Transfer Capability for the Near-term

Docket Nos. RM19-16-000 and RM19-17-000
2.

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As set forth in the petitions, we conclude that the 18 Reliability Standard

requirements: (1) provide little or no reliability benefit; (2) are administrative in nature
or relate expressly to commercial or business practices; or (3) are redundant with other
Reliability Standards. These justifications are consistent with the Commission-approved
rationale for retiring Reliability Standard requirements articulated in prior proceedings. 4
3.

The approved retirements will enhance the efficiency of the Reliability Standards

program by reducing duplicative or otherwise unnecessary regulatory burdens.
4.

In the Notice of Proposed Rulemaking (NOPR), the Commission also proposed to

approve the retirement of 56 requirements constituting the so-called MOD A Reliability
Standards. 5 The NOPR indicated that, if approved, the Commission intends to coordinate

Transmission Planning Horizon), INT-004-3.1 (Dynamic Transfers), INT-010-2.1
(Interchange Initiation and Modification for Reliability), MOD-020-0 (Providing
Interruptible Demands and Direct Control Load Management Data to System
Operations and Reliability Coordinators). The five modified Reliability Standards
approved herein are Reliability Standards INT-006-5 (Evaluation of Interchange
Transactions), INT-009-3 (Implementation of Interchange) and PRC-004-6 (Protection
System Misoperation Identification and Correction), IRO-002-7 (Reliability
Coordination—Monitoring and Analysis), TOP-001-5 (Transmission Operations).
4

North American Electric Reliability Corp., 138 FERC ¶ 61,193, at P 81
(March 2012 Order), order on reh’g and clarification, 139 FERC ¶ 61,168 (2012);
Electric Reliability Organization Proposal to Retire Requirements in Reliability
Standards, Order No. 788, 145 FERC ¶ 61,147, at P 1 (2013) (stating that the proposed
retirements “meet the benchmarks set forth in the Commission’s March 15, 2012 Order”).
5

Electric Reliability Organization Proposal to Retire Requirements in Reliability
Standards Under the NERC Standards Efficiency Review, 170 FERC ¶ 61,032 (2020)
(NOPR). The MOD A Reliability Standards proposed for retirement are MOD-001-1a
(Available Transmission System Capability), MOD-004-1 (Capacity Benefit Margin),
MOD-008-1 (Transmission Reliability Margin Calculation Methodology), MOD-028-2

Docket Nos. RM19-16-000 and RM19-17-000

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the effective dates for the retirement of the MOD A Reliability Standards with successor
North American Energy Standards Board (NAESB) business practice standards. 6 On
March 30, 2020, NAESB submitted Version 003.3 of the Standards for Business
Practices and Communication Protocols for Public Utilities that, inter alia, include
Modeling business practices. On July 16, 2020, the Commission issued a NOPR in
Docket Nos. RM05-5-029 and RM05-5-030 proposing to amend its regulations to
incorporate by reference, with certain enumerated exceptions, NAESB’s Version 003.3
Business Practices. 7 Comments on the NAESB NOPR are due on November 3, 2020. 8
In light of these developments, this final rule does not address the retirement of the
MOD A Reliability Standards. The Commission will determine the appropriate action
regarding the proposed retirement of the MOD A Reliability Standards at a later time.
5.

While the Commission approves the 18 retirements, pursuant to FPA

section 215(d)(4), we remand proposed Reliability Standard FAC-008-4. 9 As discussed
below, we are satisfied with NERC’s justification for retiring Reliability Standard

(Area Interchange Methodology), MOD-029-2a (Rated System Path Methodology), and
MOD-030-3 (Flowgate Methodology).
6

NOPR, 170 FERC ¶ 61,032, at P 21, n.35.

7

Standards for Business Practices and Communication Protocols for Public
Utilities, Notice of Proposed Rulemaking, Order No. 676, 85 FR 10571, 172 FERC
¶ 61,047 (2020).
8

Standards for Business Practices and Communication Protocols for Public
Utilities, 85 Fed. Reg. 55201 (September 4, 2020).
9

16 U.S.C. 824o(d)(4).

Docket Nos. RM19-16-000 and RM19-17-000

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FAC-008-3, Requirement R7. However, for the reasons discussed below, we are not
persuaded that it is appropriate to retire Reliability Standard FAC-008-3,
Requirement R8. Because the Commission, pursuant to FPA section 215(d)(4), must
remand to NERC for further consideration a proposed modification to a Reliability
Standard that the Commission disapproves in whole or in part, we remand proposed
Reliability Standard FAC-008-4 to address our concerns with the retirement of
Requirement R8.
I.

Background
A.

6.

Section 215 of the FPA

Section 215 of the FPA requires the Commission-certified Electric Reliability

Organization (ERO) to develop mandatory and enforceable Reliability Standards, subject
to Commission review and approval. Once approved, the Reliability Standards may be
enforced in the United States by the ERO subject to Commission oversight, or by the
Commission independently. 10 Pursuant to the requirements of FPA section 215, the
Commission established a process to select and certify an ERO 11 and, subsequently,
certified NERC as the ERO. 12
10

16 U.S.C. 824o(e)(3).

11

Rules Concerning Certification of the Electric Reliability Organization; and
Procedures for the Establishment, Approval, and Enforcement of Electric Reliability
Standards, Order No. 672, 114 FERC ¶ 61,104, order on reh’g, Order No. 672-A,
114 FERC ¶ 61,328 (2006).
12

North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on
reh’g and compliance, 117 FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa Inc. v. FERC,
564 F.3d 1342 (D.C. Cir. 2009).

Docket Nos. RM19-16-000 and RM19-17-000
B.
7.

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Prior Retirements of Reliability Standard Requirements

In the March 2012 Order, the Commission observed that NERC’s compliance

program could be made more efficient by removing existing requirements deemed
unnecessary for reliability. 13 The Commission stated that if NERC believes certain
Reliability Standards or requirements should be revised or removed, “we invite NERC to
make specific proposals to the Commission identifying the Standards or requirements and
setting forth in detail the technical basis for its belief.” 14 Further, the Commission
encouraged NERC “to propose appropriate mechanisms to identify and remove from the
Commission-approved Reliability Standards unnecessary or redundant requirements.” 15
8.

In response, in February 2013, NERC proposed to retire 34 requirements within

19 Reliability Standards based on the justification that the requirements “are redundant or
otherwise unnecessary” and that “violations of these requirements . . . pose a lesser risk to
the reliability of the Bulk-Power System.” 16 NERC explained that the proposed
retirements were based upon three major criteria: (1) whether a proposed retirement
would create a reliability gap; (2) whether the requirement in question is administrative;
involves data collection, retention, documentation, periodic updates or reporting; is a
commercial or business practice; or is redundant; and (3) consideration of responses to

13

March 2012 Order, 138 FERC ¶ 61,193 at P 81.

14

Id.

15

Id.

16

NERC, Petition, Docket No. RM13-8-000, at 2 (filed Feb. 28, 2013).

Docket Nos. RM19-16-000 and RM19-17-000

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seven questions regarding the proposed retirement, including whether the requirement
was part of a “find, fix and track” filing, the requirement’s violation risk factor level, and
whether the requirement is part of on-going standards development project. 17
9.

On November 21, 2013, the Commission approved the retirements that NERC

proposed, and determined that the retirements “meet the benchmarks” set forth in the
March 2012 Order that “requirements proposed for retirement either: (1) provide little
protection for Bulk-Power System reliability; or (2) are redundant with other aspects of
the Reliability Standards.” 18
C.

NERC Standards Efficiency Review Project and Petitions
1.

10.

NERC Standards Efficiency Review Project

NERC states that the proposed retirements are the product of its Standards

Efficiency Review (SER) Project. NERC explains that the SER Project began in 2017
“to achieve [NERC’s] long-term strategic goal of establishing risk-based controls to
minimize [Bulk-Power System] reliability risk while also driving operational efficiencies
and effectiveness.” 19 NERC states that in Phase 1 of the SER Project, teams of industry
experts conducted a risk-based analysis of non-CIP Reliability Standards. 20 The purpose
17

Id. at 4.

18

Electric Reliability Organization Proposal to Retire Requirements in Reliability
Standards, Order No. 788, 145 FERC ¶ 61,147 (2013).
19
20

Docket No. RM19-16-000 Petition at 3; Docket No. RM19-17-000 Petition at 4.

NERC states that Phase 2 of the SER Project will “consider recommendations
for Reliability Standard revisions that would further improve the efficiency of the body of
NERC Reliability Standards, such as through consolidation of Reliability Standard
requirements . . . [and will] consider recommendations for standards-based improvements

Docket Nos. RM19-16-000 and RM19-17-000

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of this review, according to NERC, was “to identify Reliability Standard requirements
that provide little or no benefit to reliability and should be retired.” 21 NERC maintains
that, unlike the periodic reviews 22 of Reliability Standards performed by NERC pursuant
to the NERC Rules of Procedure, the SER Project involved “exploring the relationships
between the different Reliability Standards in a deeper way than would be feasible during
a targeted periodic review . . . [and] allowed NERC to identify requirements that are not
necessary for reliability or that are redundant to other requirements.” 23
11.

NERC contends that the SER Project “was conducted in an open and transparent

manner, with broad industry participation.” 24 NERC states that it initiated the standards
development process to consider the retirement recommendations generated by the SER
Project.

that would further reduce inefficiencies and promote effectiveness.” Docket
No. RM19-16-000 Petition at 6-7; Docket No. RM19-17-000 Petition at 7.
21

Docket No. RM19-16-000 Petition at 5; Docket No. RM19-17-000 Petition at 6.

22

The NERC Rules of Procedure require a periodic review of each Reliability
Standard; and they provide for a five-year cyclical review of Reliability Standards
approved by the American National Standards Institute (ANSI) and 10-year cyclical
review for Reliability Standards not approved by ANSI. See NERC Rules of Procedure,
Section 317 and Appendix 3A (Standards Process Manual), section 13.0.

at 7.

23

Docket No. RM19-16-000 Petition at 5; Docket No. RM19-17-000 Petition at 6.

24

Docket No. RM19-16-000 Petition at 5-6; Docket No. RM19-17-000 Petition

Docket Nos. RM19-16-000 and RM19-17-000
2.
12.

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IRO, TOP and VAR Petition (Docket No. RM19-16-000)

On June 7, 2019, in Docket No. RM19-16-000, NERC submitted for Commission

approval new versions of three Reliability Standards: IRO-002-7 (Reliability
Coordination—Monitoring and Analysis), TOP-001-5 (Transmission Operations), and
VAR-001-6 (Voltage and Reactive Control). 25 NERC explains that approval of the new
versions would result in the retirement of four requirements from the currently-effective
versions of the Reliability Standards. 26 NERC proposes to retire three of the existing
requirements in Reliability Standards IRO-002 and TOP-001 that require the reliability
coordinator, transmission operator, and balancing authority to have data exchange
capabilities with entities having data needed to perform operational planning analyses
and to develop operating plans for next-day operations. NERC contends that these
requirements are redundant and not necessary “because the performance required by
these requirements is inherent to the performance of other Reliability Standard
requirements.” 27
13.

In particular, NERC maintains that the data exchange capability requirement

in Reliability Standard IRO-002-5, Requirement R1 is covered by Reliability
25

On May 14, 2020, NERC withdrew its request to retire Reliability Standard
VAR-001-6, Requirement R2.
26

The revised versions of the IRO and TOP Reliability Standards are not attached
to this final rule. The complete text of the Reliability Standards is available on the
Commission’s eLibrary document retrieval system in Docket No. RM19-16-000 and is
posted on the ERO’s website, http://www.nerc.com.
27

Docket No. RM19-16-000 Petition at 7.

Docket Nos. RM19-16-000 and RM19-17-000

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Standard IRO-008-2, Requirement R1, which obligates the reliability coordinator to
perform operational planning analyses to assess whether the planned operations for the
next-day will exceed System Operating Limits and Interconnection Reliability Operating
Limits within its Wide Area. NERC asserts that “to perform the required operational
planning analyses, the Reliability Coordinator must have the data it deems necessary
from those entities that possess it.” 28
14.

Additionally, regarding data exchange, NERC cites Reliability Standard

IRO-010-2 (Reliability Coordinator Data Specification and Collection) and its stated
purpose of preventing instability, uncontrolled separation, or cascading outages “by
ensuring the Reliability Coordinator has the data it needs to monitor and assess the
operation of its Reliability Coordinator Area.” 29 NERC states that under Reliability
Standard IRO-010-2, Requirements R1, R2 and R3, the reliability coordinator must
specify the data necessary for it to perform its operational planning analyses and provide
the specifications to the entities from which it needs data who then must comply with the
data request using a mutually agreeable format and security protocols.
15.

NERC states that the performance of Reliability Standard IRO-010-2,

Requirements R1, R2 and R3 is premised on the existence of data exchange capabilities,
“regardless of whether a separate requirement expressly requires the Reliability

28

Id. at 14-15.

29

Id. at 15.

Docket Nos. RM19-16-000 and RM19-17-000

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Coordinator to have data exchange capabilities in place.” 30 NERC therefore asserts that
Reliability Standard IRO-002-5, Requirement R1 provides no additional reliability
benefit and “is therefore unnecessary and redundant and should be retired.” 31
16.

NERC also proposes to retire Reliability Standards TOP-001-4, Requirements R19

and R22. NERC explains that Requirements R19 and R22 of Reliability Standard
TOP-001-4 require transmission operators and balancing authorities respectively to have
data exchange capabilities with entities from which they need data to perform operational
planning analyses (transmission operators) and next-day Operating Plans (balancing
authorities). NERC notes, however, that Reliability Standard TOP-002-4,
Requirement R1 requires a transmission operator to perform an operational planning
analyses to determine whether next-day operations within its area will exceed System
Operating Limits. NERC also states that TOP-002-4, Requirement R4 requires each
balancing authority to have a next-day Operating Plan addressing expected generation
resource commitment and dispatch, Interchange scheduling and related matters. NERC
asserts that to satisfy these requirements, “each Transmission Operator and Balancing
Authority must have the data it deems necessary from those entities that possess it.” 32
17.

NERC also points to Reliability Standard TOP-003-3 (Operational Reliability

Data) whose purpose is “to ensure that the Transmission Operator and Balancing

30

Id.

31

Id.

32

Id. at 16.

Docket Nos. RM19-16-000 and RM19-17-000

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Authority have data needed to fulfill their operational and planning responsibilities.”
NERC contends that the requirements in Reliability Standard TOP-003-3 largely mirror
the requirements in Reliability Standard IRO-010-2 discussed above, and thus, as with
Reliability Standard IRO-010-2, transmission operators and balancing authorities must
have data exchange capabilities with its reporting entities to satisfy the requirements of
Reliability TOP-003-3. For these reasons, NERC contends that Reliability Standards
TOP-001-4, Requirements R19 and R22 are unnecessary and redundant and should be
retired.
18.

NERC requests that the Commission approve the implementation plan, attached to

NERC’s petition as Exhibit B, and the associated violation risk factors and violation
severity levels described in Exhibit D. The implementation plan provides that proposed
Reliability Standards IRO-002-7 and TOP-001-5 would become effective on the first day
of the first calendar quarter that is three months after regulatory approval. The currently
effective versions of the Reliability Standards would be retired immediately prior to the
effective date of the revised Reliability Standards. NERC explains that the requested
timeline accounts for the time entities will need to update their systems and related
documentation.
3.
19.

FAC, INT, MOD and PRC Petition (Docket No. RM19-17-000)

On June 7, 2019, in Docket No. RM19-17-000, NERC submitted for Commission

approval the proposed retirement of 10 currently-effective FAC, INT, MOD and PRC

Docket Nos. RM19-16-000 and RM19-17-000

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Reliability Standards in their entirety without replacement. 33 Additionally, NERC
proposed modifications to four Reliability Standards reflecting the retirement of certain
requirements from the currently-effective versions: FAC-008-4 (Facility Ratings),
INT-006-5 (Evaluation of Interchange Transactions), INT-009-3 (Implementation of
Interchange) and PRC-004-6 (Protection System Misoperation Identification and
Correction). 34 NERC asserts that its proposals would not adversely impact reliability, but
rather they “would benefit reliability by allowing entities to focus their resources on those
Reliability Standard requirements that promote the reliable operation and planning of the
BPS [Bulk-Power System] and avoid unnecessary regulatory burden.” 35
20.

Regarding the full FAC, INT, MOD and PRC Reliability Standards proposed for

retirement, NERC contends that they are not necessary and that removing them would not
adversely affect reliability. NERC states that retirement of the ten full Reliability

33

Reliability Standards FAC-013-2 (Assessment of Transfer Capability for the
Near-term Transmission Planning Horizon), INT-004-3.1 (Dynamic Transfers),
INT-010-2.1 (Interchange Initiation and Modification for Reliability), MOD-001-1a
(Available Transmission System Capability), MOD-004-1 (Capacity Benefit Margin),
MOD-008-1 (Transmission Reliability Margin Calculation Methodology), MOD-020-0
(Providing Interruptible Demands and Direct Control Load Management Data to System
Operations and Reliability Coordinators), MOD-028-2 (Area Interchange Methodology),
MOD-029-2a (Rated System Path Methodology), and MOD-030-3 (Flowgate
Methodology).
34

The revised versions of the FAC, INT and PRC Reliability Standards are not
attached to this final rule. The complete text of the Reliability Standards is available on
the Commission’s eLibrary document retrieval system in Docket No. RM19-17-000 and
is posted on the ERO’s website, http://www.nerc.com.
35

Docket No. RM19-17-000 Petition at 7.

Docket Nos. RM19-16-000 and RM19-17-000

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Standards is justified because they are primarily administrative in nature or largely
related to commercial or business practices, and therefore no longer serve a reliability
purpose. 36 For example, NERC states that the transfer capability assessment required
under Reliability Standard FAC-013-2 “serves only a market function” and “is not an
indicator of [bulk electric system] reliability.” 37 In supporting its conclusion that
Reliability Standard INT-010-2.1 primarily relates to commercial and business practices,
NERC notes that in 2013 the NERC Independent Experts Review Panel recommended
retiring the previous version of the Reliability Standard “due to overlap with the NAESB
Electronic Tagging Functional Specification.” 38
21.

Similarly, regarding the MOD Reliability Standards, NERC states that “[Available

Transfer Capability] and [Available Flowgate Methodology], as well as e-Tags, are
commercially-focused elements facilitating interchange and balancing of interchange,”
and that system operators maintain reliability by monitoring Real-time flows based on
System Operating Limits and Interconnection Reliability Operating Limits. 39 In
particular, NERC explains that information on Interruptible Demands and Direct Control
Load Management required under Reliability Standard MOD-020-0 is not useful for
transmission operators and reliability coordinators, “who must plan and operate the
36

Docket No. RM19-17-000 Petition at 13-24.

37

Id. at 13.

38

Id. at 16-19.

39

Id. at 21.

Docket Nos. RM19-16-000 and RM19-17-000

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[Bulk-Power System] within System Operating Limits and Interconnection Reliability
Operating Limits under the TOP and IRO Reliability Standards.” 40
22.

Regarding NERC’s proposed modified Reliability Standards, NERC states that the

data provision obligations of currently effective Reliability Standard FAC-008-3,
Requirements R7 and R8 are redundant with Reliability Standards MOD-032-1,
IRO-010-2 and TOP-003-3. NERC asserts that Requirements R3.1, R4 and R5 of
currently-effective Reliability Standard INT-006-4 “provide little, if any, benefit or
protection to the reliability operation of the [Bulk-Power System]” 41 and that the
substance of Requirements R4 and R5 in particular relate to commercial or business
practices and are better addressed through the balancing authority’s e-Tag Authority
Service. 42 Also, NERC states that Requirement R1 of currently-effective Reliability
Standard INT-009-2.1 is being revised to remove the reference to Reliability Standard
INT-010, which is also proposed for retirement, and Requirement R2 is redundant with
Reliability Standard BAL-005-1, Requirement R7. 43 Finally, NERC states that it has
determined that rather than the “specific, recurring and inflexible timeframe” set forth in
Requirement R4 of currently-effective Reliability Standard PRC-004-5 for identifying the
cause of a protection system misoperation, “it would be more effective to have entities
40

Id. at 23.

41

Id. at 29.

42

Id. at 29-31.

43

Id. at 31-32.

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investigate the causes of misoperations according to their own internal control policies
and procedures.” 44
23.

NERC requests that the Commission approve the implementation plan, attached to

NERC’s petition as Exhibit B, and the associated violation risk factors and violation
severity levels, attached to NERC’s petition as Exhibit D, which are generally unchanged
from the currently effective versions. For the Reliability Standards retired in their
entirety, NERC proposes an effective date that is immediately upon regulatory approval
of the retirement. NERC also seeks to retire the currently effective Reliability Standards
FAC-008-3, INT-006-4, INT-009-2.1, and PRC-004-5(i) immediately prior to the
effective date of their new versions.
D.
24.

Notice of Proposed Rulemaking

On January 23, 2020, the Commission issued a NOPR proposing to approve the

retirement of 74 of the 77 Reliability Standard requirements requested by NERC.
However, while proposing to approve the majority of Reliability Standard requirement
retirements NERC proposed, the Commission expressed concern with NERC’s
justification for retirement of Reliability Standard FAC-008-3, Requirement R7 and R8
because those requirements did not appear to be entirely redundant of other existing
Reliability Standards. Accordingly, the Commission sought more information from
NERC regarding how other existing Reliability Standards render Reliability Standard

44

Id. at 34.

Docket Nos. RM19-16-000 and RM19-17-000

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FAC-008-3, Requirements R7 and R8 redundant, and how retiring those requirements
would not create a reliability gap.
25.

In response to the NOPR, the Commission received comments from NERC, Trade

Associations (i.e., American Public Power Association, Edison Electric Institute, Large
Public Power Council, National Rural Electric Cooperative Association, Transmission
Access Policy Study Group), Bonneville Power Administration, Western Area Power
Administration, and Jonathan Appelbaum. We address below the issues raised in the
NOPR and comments.
II.

Discussion
A.

26.

Approved Retirement of 18 Reliability Standard Requirements

Pursuant to section 215(d)(2) of the FPA, the Commission approves NERC’s

request to retire 18 Reliability Standard requirements as just, reasonable, not unduly
discriminatory or preferential, and in the public interest. NERC’s petitions provide an
adequate basis to conclude that the requirements proposed for retirement: (1) provide
little or no reliability benefit; (2) are administrative in nature or relate expressly to
commercial or business practices; or (3) are redundant with other Reliability Standards.
NERC’s justifications for retiring the 18 requirements are consistent with the retirement
guidelines set forth by the Commission in Order No. 788 and with the determination that
“requirements proposed for retirement can be removed from the Reliability Standards

Docket Nos. RM19-16-000 and RM19-17-000

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with little effect on reliability and an increase in efficiency of the ERO compliance
program.” 45
27.

While the Commission approves the retirement of the 18 Reliability Standard

requirements, pursuant to FPA section 215(d)(4), we remand proposed Reliability
Standard FAC-008-4. As discussed below, we are satisfied with the justification for
retiring Reliability Standard FAC-008-3, Requirement R7 contained in NERC’s
comments. However, for the reasons discussed below, we are not persuaded that it is
appropriate to retire Reliability Standard FAC-008-3, Requirement R8. Because the
Commission, pursuant to FPA section 215(d)(4), must remand to NERC for further
consideration a proposed modification to a Reliability Standard that the Commission
disapproves in whole or in part, we remand proposed Reliability Standard FAC-008-4 to
address our concerns with the retirement of Requirement R8.
B.

Reliability Standard FAC-008-3, Requirements R7 and R8
1.

28.

NERC Petition

Reliability Standard FAC-008-3, Requirements R7 and R8 require generator

owners and transmission owners, respectively, to provide facility ratings and related
information to requesting reliability coordinators, planning coordinators, transmission
planners, transmission owners and transmission operators. NERC contends that
requirements in Reliability Standards MOD-032-1, IRO-010-2, and TOP-003-3 render

45

Order No. 788, 145 FERC ¶ 61,147 at P 1.

Docket Nos. RM19-16-000 and RM19-17-000

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the data provision obligations of Requirements R7 and R8 in Reliability Standard
FAC-008-3 redundant and, therefore, unnecessary for reliability. 46
29.

To support its redundancy claim, NERC explains that Reliability Standard

MOD-032-1 requires generator owners and transmission owners to provide information
on power capabilities and facility ratings (Requirement R2) to enable planning
coordinators and transmission planners to “jointly develop steady-state, dynamics, and
short circuit modeling data requirements and reporting procedures for the Planning
Coordinator’s planning area” (Requirement R1). NERC further explains that Reliability
Standard IRO-010-2 requires reliability coordinators to maintain “a documented
specification for the data necessary to perform its Operational Planning Analyses,
Real-time monitoring, and Real-time Assessments. This data necessarily includes
Facility Ratings as inputs to System Operating Limit monitoring.” 47 NERC notes that
under Requirement R3 of IRO-010-2, the transmission owner and generator owner must
provide such data. Finally, NERC points out that Reliability Standard TOP-003-3
requires the transmission operator to maintain data specifications (Requirement R1) and
the transmission owner and generation owner to provide the requested data
(Requirement R5). Relying on this framework of data specification and provision, NERC
concludes that Reliability Standard FAC-008-3, Requirements R7 and R8 “are now

46

Docket No. RM19-17-000 Petition at 15.

47

Id. at 28.

Docket Nos. RM19-16-000 and RM19-17-000

- 19 -

redundant to other more robust Reliability Standards and are no longer needed for
reliability.” 48
2.
30.

NOPR

While agreeing with NERC that Reliability Standards MOD-032-1, IRO-010-2

and TOP-003-3 provide a basis for retiring certain elements of Reliability Standard
FAC-008-3, Requirements R7 and R8, the Commission stated that NERC’s petition
“does not address other elements of Requirements R7 and R8 that do not appear to be
redundant.” 49 The NOPR explained that Reliability Standard FAC-008-3,
Requirements R7 and R8 require generation owners and transmission owners to provide
facility ratings to several functional entity types, including transmission owners. The
Commission observed that the three Reliability Standards NERC claims to render
Requirements R7 and R8 redundant require generator owners and transmission owners to
provide facility ratings to other functional entities, including reliability coordinators,
planning coordinators, transmission planners, and transmission operators, they do not
require the provision of facility ratings to transmission owners. The Commission
expressed concern that eliminating the mandatory exchange of facility-related
information with transmission owners could “impact reliability since these requirements

48

Id.

49

NOPR, 170 FERC ¶ 61,032 at P 31.

Docket Nos. RM19-16-000 and RM19-17-000

- 20 -

ensure that all transmission owners have accurate facility-related information in the
models that they use to plan and operate the bulk electric system.” 50
31.

The Commission also noted that Reliability Standards MOD-032-1, IRO-010-2,

and TOP-003-3 do not address sub-requirement R8.1.2 of Reliability Standard
FAC-008-3, relating to the identity of the next most limiting equipment of a requested
facility. Further, the Commission observed that the Reliability Standards NERC claims
are redundant also do not account for sub-requirement R8.2, which requires the
identification and thermal rating of the existing next most limiting equipment of facilities
with a thermal rating that limits the use of that facility by causing either an
Interconnection Reliability Operating Limit, a limitation of Total Transfer Capability, an
impediment to generator deliverability, or an impediment to service to a major load
center as specified in FAC-008-3 (Requirement R8.2). 51
32.

Therefore, the Commission stated that Reliability Standard FAC-008-3,

Requirements R7 and R8 do not appear to be entirely redundant of the Reliability
Standards cited by NERC and, if retired, could create reliability gaps. The Commission
sought clarification from NERC because the petition does not address these
non-redundant elements of Requirements R7 and R8.

50
51

Id.

This requirement was developed in response to a directive in Order No. 693.
Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, 118 FERC
¶ 61,218, at P 756, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053 (2007); see
also NERC, Petition, Docket No. RD11-10-000, at 11-13, 20-21 (filed Jun. 15, 2011).

Docket Nos. RM19-16-000 and RM19-17-000
3.
33.

- 21 -

Comments

NERC, Trade Associations and Appelbaum support the retirement of Reliability

Standard FAC-008-3, Requirements R7 and R8, maintaining that transmission owners do
not need facility ratings and related information to perform their responsibilities. 52 In
their view, transmission owners play a more limited role than the planning and operation
function of the other applicable entities in Reliability Standard FAC-008-3. NERC notes
that the NERC Glossary describes transmission owner as an “entity that owns and
maintains transmission facilities” and that a transmission owner is “not the functional
entity directly responsible for complying with Reliability Standards for planning and
operating the Bulk Power System.” 53 Additionally, Appelbaum notes that “in many
cases” transmission owner and generation owner interconnection agreements exist and
contain provisions governing how facilities are operated and maintained, including the
methodology and responsibility for rating facilities. 54 By contrast Bonneville
commented, without elaboration, that it agrees that Reliability Standards FAC-008,
Requirements R7 and R8 should be retained. 55

52

As discussed below, Appelbaum supports retaining sub-requirement R8.2.

53

NERC Comments at 8 (citing NERC Glossary of Terms Used in NERC
Reliability Standards).
54

Appelbaum Comments at 3.

55

Bonneville Comments at 2.

Docket Nos. RM19-16-000 and RM19-17-000
34.

- 22 -

NERC and Trade Associations assert that entities with the responsibility to plan

and operate the Bulk-Power System (i.e., transmission operators and transmission
planners) obtain the information they need under Reliability Standards MOD-032-1 and
TOP-003-3, and thus they do not require Reliability Standard FAC-008-3,
Requirements R7 and R8. 56 Trade Associations state that “from a grid reliability
perspective, it is the responsible Transmission Planner and Transmission Operator that
need the facility ratings because they are accountable for the reliable planning and
operation of the bulk electric system, not the Transmission Owner.” 57 Further, Trade
Associations note that the Commission previously approved the retirement of Reliability
Standard FAC-008-3, Requirement R4, which had similar obligations to
Requirements R7 and R8, based on the Commission’s conclusion that the requirement to
make available such facility ratings information was an administrative task that provides
little protection for bulk electric system reliability. 58
35.

In response to the Commission’s concerns regarding Reliability Standard

FAC-008-3, sub-requirements 8.1.2 and 8.2, NERC and Trade Associations assert that
the “catch-all” provision in Reliability Standard MOD-032-1, Attachment 1 Data
Reporting Requirements, requires transmission owners and generation owners to provide

56

NERC Comments at 8; Trade Association Comments at 6.

57

Trade Association Comments at 7.

58

Id. (citing Order No. 788, 145 FERC ¶ 61,147 at P 19).

Docket Nos. RM19-16-000 and RM19-17-000

- 23 -

“other information requested by the planning coordinator or transmission provider
necessary for modeling purposes,” which includes data described in
sub-requirements 8.1.2 and 8.2. 59 Further, NERC and Trade Associations assert that
reliability coordinators and transmission system operators obtain this information under
the data specification requirements in Reliability Standards IRO-010-2 and TOP-003-3. 60
NERC concludes that “[n]ow that these broader data specification standards are in place,
NERC has identified no reliability need to maintain additional requirements expressly
requiring the provision of this data in the FAC-008 standards.” 61
36.

Appelbaum contends that sub-requirement 8.2 should be retained, however,

because it “support[s] reliable operations under very limited circumstances and very
limited locations, yet it is important enough to retain.” 62 He explains that
sub-requirement 8.2 focuses on specific circumstances, wherein having knowledge of the
increase in facility rating based on the next most limiting equipment improves system

59

NERC Comments at 8-9; Trade Association Comments at 9.

60

NERC Comments at 9; Trade Associations Comments at 8-9 (“Reliability
Standard TOP-003-3 (Operational Reliability Data) Requirements R3 and R5 require the
provision of such information through data specifications that are issued by Transmission
Operators.”)
61
62

NERC Comments at 9.

Appelbaum Comments at 7 (referring to load pockets that contain critical
infrastructure, dense populations, or have large financial impacts).

Docket Nos. RM19-16-000 and RM19-17-000

- 24 -

operations, and therefore reliability, and “adds resilience to the operation of the Bulk
Power System.” 63
4.
37.

Commission Determination

Pursuant to FPA section 215(d)(4), we remand proposed Reliability Standard

FAC-008-4. As discussed below, we are satisfied with NERC’s justification for retiring
Reliability Standard FAC-008-3, Requirement R7. However, for the reasons discussed
below, we are not persuaded that it is appropriate to retire Reliability Standard
FAC-008-3, Requirement R8. Because the Commission, pursuant to FPA
section 215(d)(4), must remand to NERC for further consideration a proposed
modification to a Reliability Standard that the Commission disapproves in whole or in
part, we remand proposed Reliability Standard FAC-008-4 to address our concerns with
the retirement of Requirement R8.
38.

Regarding Reliability Standard FAC-008-3, Requirement R7, we are persuaded

that retiring Requirement R7 will not result in a reliability gap because Requirement R7
is redundant or otherwise provides little or no reliability benefit. We agree with NERC
that, unlike transmission operators and transmission planners that need and will continue
to receive facility ratings information under other Reliability Standards, transmission
owners do not need to exchange facility ratings because they have a more limited
functional role that does not involve planning and operating the Bulk-Power System.

63

Id. at 6-7.

Docket Nos. RM19-16-000 and RM19-17-000

- 25 -

Only Bonneville, a registered transmission owner, supported retaining Requirement R7,
and no transmission owner submitted comments indicating that it needed the facility
ratings information required under Requirement R7.64 Moreover, the Commission did
not direct the inclusion of transmission owners in Requirement R7. Reliability Standard
FAC-008-3, Requirement R7 was formerly designated Reliability Standard FAC-009-1,
Requirement R2. The Commission approved Reliability Standard FAC-009-1,
Requirement R2 in Order No. 693 and did so without requiring the sharing of facility
ratings information with transmission owners. 65
39.

While we determine that the retirement of Requirement R7 is appropriate, we are

not convinced that the retirement of sub-requirements R8.1.2 and 8.2 will not result in a
reliability gap. By retiring sub-requirements R8.1.2 and 8.2, transmission owners will no
longer be required to communicate ratings information for solely owned limiting and next
most limiting equipment present on jointly-owned facilities. Without ratings information
on limiting and next most limiting equipment, transmission owners could lack the
necessary information to correctly calculate the ratings for their jointly-owned facilities.
The Commission recognized the importance of this type of information exchange in

64

While Bonneville submitted comments supporting the retention of
Requirement R7, Bonneville did not elaborate on its position.
65

Order No. 693, 118 FERC ¶ 61,218 at PP 772-774. NERC subsequently added
transmission owners as recipients, without elaboration, when NERC revised Reliability
Standard FAC-008 and retired Reliability Standard FAC-009.

Docket Nos. RM19-16-000 and RM19-17-000

- 26 -

Order No. 693 by directing NERC to require the sharing of information regarding the
most limiting and next most limiting equipment when requested. 66
40.

The transmission owner’s obligation under Reliability Standard FAC-008-3,

Requirement R3 is also impacted by the proposed retirement of Requirement R8.
Reliability Standard FAC-008-3, Requirement R3 requires transmission owners to have a
documented facility ratings methodology for solely and jointly owned facilities that,
pursuant to Requirement R3.3, includes a “statement that a Facility Rating shall respect
the most limiting applicable Equipment Rating of the individual equipment that
comprises that Facility.” In order to rate equipment accurately to avoid mis-ratings of
jointly-owned transmission lines, the transmission owner needs information about the
co-owner’s most limiting equipment on shared facilities. Therefore, under these
circumstances, we conclude that Requirement R8 is needed to ensure that limiting and
next limiting equipment is identified and communicated.
III.

Information Collection Statement

41.

The information collection requirements contained in this final rule are subject to

review by the Office of Management and Budget (OMB) under section 3507(d) of the
Paperwork Reduction Act of 1995. 67 OMB’s regulations require approval of certain
information collection requirements imposed by agency rules. 68 Upon approval of a

66

Order No. 693, 118 FERC ¶ 61,218 at PP 755-762.

67

44 U.S.C. 3507(d).

68

5 CFR 1320.

Docket Nos. RM19-16-000 and RM19-17-000

- 27 -

collection of information, OMB will assign an OMB control number and expiration date.
Respondents subject to the filing requirements of this rule will not be penalized for
failing to respond to these collections of information unless the collections of information
display a valid OMB control number.
42.

The Commission estimates that the final rule, which would retire 18 requirements

of Reliability Standards without adding any new obligations on registered entities, would
result in a total reduction in burden for industry of 42,907.44 hours. The Commission
based the burden reduction estimates on staff experience, knowledge, and expertise.
Reductions Due to Final Rule in Docket Nos. RM19-16 & RM19-17
Average
Number
of
Number
Burden
of Annual
Total
Hours
Type 69 and
Responses Number
per
of
Number of
Reliability
Per
Total Burden
Responses Response
Entity
Standard &
Entity
Hours
Requirement
(1)
(2)
(1)*(2)=(3)
(4)
(3)*(4)=(5)
FERC-725A
FAC-013-2
RC (12)
8.33
100
26.67
2,667
INT-006-4
BA/TSP (169)
1
169
56.3
9,514.7
R3.1, R4, R5,
R5.1, R5.2,
R5.3, R5.4,
R5.5
INT-004-3.1 BA (97)
1
97
56.3
5,461.1
69

RC=Reliability Coordinator; BA=Balancing Authority; TSP=Transmission
Service Provider; TO=Transmission Owner; GO=Generator Owner; DP=Distribution
Provider; TP=Transmission Provider; and RP=Resource Planner. Our estimates are
based on the NERC Compliance Registry of July 17, 2020, which indicates there are
974 entities registered as GOs, 321 entities registered as TOs, 97 entities registered as
BAs, 72 entities registered as TSPs, 198 entities registered as TPs312 entities registered
as DPs, 160 entities registered as RPs, and 12 entities registered as RCs within the United
States.

Docket Nos. RM19-16-000 and RM19-17-000
INT-010-2.1
INT-009-2.1
R2
MOD-020-0
Sub-Total
for FERC725A
TOP-001-4
R19 & R22
Sub-Total
for FERC725A(1C)

BA(97)
BA (97)

1
1

97
97

56.3
56.3

5,461.1
5,461.1

TP/RP/DP/BA
(767)
1,239

1

767

14.4

11,044.8

BA/TO/GO/DP
(1,704)
1,704

PRC-004-5(i) TO/GO/DP
R4
(1,607)
Sub-Total
1,607
for FERC725G1
IRO-002-6
R1
Sub-Total
for FERC725Z
Total
Reductions
Due to Final
Rule in
RM19-16 &
RM19-17

- 28 -

1,327
FERC-725A(1C)
.25
426

39,609.8

0.8

340.8

426
FERC-725G1
.41

RC (12)
12

659

340.8

4.36

659
FERC-725Z
1.17

14

2,873.24
2,873.24

5.97

83.6

14

83.6

2,426

42,907.44

Titles: FERC-725A, Mandatory Reliability Standards for the Bulk Power System;
FERC-725A(1C), Mandatory Reliability Standards for Bulk-Power System: Reliability
Standard TOP-001-4; FERC-725G1, Mandatory Reliability Standards for the Bulk-Power
System: Reliability Standard PRC-004-5(i); FERC-725Z, Mandatory Reliability
Standards: IRO Reliability Standards.

Docket Nos. RM19-16-000 and RM19-17-000

- 29 -

Action: Reductions to Existing Collections of Information FERC-725A,
FERC-725A(1C), and FERC-725Z; and Elimination of Collections of Information, and
FERC-725G1.
OMB Control Nos: 1902-0244 (FERC-725A); 1902-0298 (FERC-725A(1C));1902-0284
(FERC-725G1); and 1902-0276 (FERC-725Z)
Respondents: Business or other for profit, and not for profit institutions.
Frequency of Responses: On occasion (and proposed for deletion).
43.

Necessity of the Information: This proceeding approves the retirement of four

Reliability Standards in their entirety and five revised Reliability Standards, reflecting a
total of 18 retired requirements identified by NERC. The approved retirements either:
(1) provide little or no reliability benefit; (2) are administrative in nature or relate
expressly to commercial or business practices; or (3) are redundant with other Reliability
Standards.
44.

Internal review: The Commission has reviewed NERC’s proposal and determined

that its action is necessary to implement section 215 of the FPA. The Commission has
assured itself, by means of its internal review, that there is specific, objective support for
the burden reduction estimates associated with the information requirements approved for
retirement.
45.

Interested persons may obtain information on the reporting requirements by

contacting the Federal Energy Regulatory Commission, Office of the Executive Director,
888 First Street, NE, Washington, DC 20426 [Attention: Ellen Brown, e-mail:
[email protected], phone: (202) 502-8663, fax: (202) 273-0873].

Docket Nos. RM19-16-000 and RM19-17-000
46.

- 30 -

Comments concerning the information collections and requirements approved for

retirement in this final rule and the associated burden estimates, should be sent to the
Commission in this docket and may also be sent to the Office of Management and
Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the
Federal Energy Regulatory Commission]. For security reasons, comments should be sent
by e-mail to OMB at the following e-mail address: [email protected].
Please refer to the appropriate OMB Control Number(s) and Docket Nos. RM19-16-000
and RM19-17-000 in your submission.
IV.

Regulatory Flexibility Act Certification

47.

The Regulatory Flexibility Act of 1980 (RFA) 70 generally requires a description

and analysis of rulemakings that will have significant economic impact on a substantial
number of small entities. The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a rule and that minimize any significant economic
impact on a substantial number of small entities. The Small Business Administration’s
Office of Size Standards develops the numerical definition of a small business. 71 The
Small Business Administration has established size standards, for the types of affected
entities (noted in the table above), that range from a maximum of 250-1,000 employees
for an entity and its affiliates to be considered small.

70

5 U.S.C. 601-612.

71

13 CFR 121.101.

Docket Nos. RM19-16-000 and RM19-17-000
48.

- 31 -

The Commission estimates the total industry reduction in burden for all entities

(large and small) to be 42,907.44 hours (or approximately 18 hours (rounded) per
response). The Commission believes that this will reduce burden and cost for all affected
entities.
49.

Based on the information above, the Commission certifies that the reductions will

not have a significant impact on a substantial number of small entities. Accordingly, no
initial regulatory flexibility analysis is required.
V.

Environmental Analysis

50.

The Commission is required to prepare an Environmental Assessment or an

Environmental Impact Statement for any action that may have a significant adverse effect
on the human environment. 72 The Commission has categorically excluded certain actions
from this requirement as not having a significant effect on the human environment.
Included in the exclusion are rules that are clarifying, corrective, or procedural or that do
not substantially change the effect of the regulations being amended. 73 The actions
approved here fall within this categorical exclusion in the Commission’s regulations.
VI.

Document Availability

51.

In addition to publishing the full text of this document in the Federal Register, the

Commission provides all interested persons an opportunity to view and/or print the

72

Regulations Implementing the National Environmental Policy Act of 1969,
Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs., Regulations
Preambles 1986-1990 ¶ 30,783 (1987).
73

18 CFR 380.4(a)(2)(ii).

Docket Nos. RM19-16-000 and RM19-17-000

- 32 -

contents of this document via the Internet through the Commission's Home Page
(http://www.ferc.gov) and in the Commission's Public Reference Room during normal
business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A,
Washington, DC 20426.
52.

From the Commission's Home Page on the Internet, this information is available

on eLibrary. The full text of this document is available on eLibrary in PDF and
Microsoft Word format for viewing, printing, and/or downloading. To access this
document in eLibrary, type the docket number excluding the last three digits of this
document in the docket number field.
53.

User assistance is available for eLibrary and the Commission’s website during

normal business hours from the Commission’s Online Support at (202) 502-6652
(toll free at 1-866-208-3676) or email at [email protected], or the Public
Reference Room at (202) 502-8371, TTY (202) 502-8659. E-mail the Public Reference
Room at [email protected].

Docket Nos. RM19-16-000 and RM19-17-000

- 33 -

VII.

Effective Date and Congressional Notification

54.

This final rule is effective [insert date 60 days after date of publication in the

Federal Register]. The Commission has determined, with the concurrence of the
Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule
is not a “major rule” as defined in section 351 of the Small Business Regulatory
Enforcement Fairness Act of 1996. This final rule is being submitted to the Senate,
House, and Government Accountability Office.
By direction of the Commission.

Nathaniel J. Davis, Sr.,
Deputy Secretary.

Docket Nos. RM19-16-000 and RM19-17-000

- 34 -

Note: the following Appendix will not appear in the Code of Federal Regulations.
Appendix
Commenters
Abbreviation

Commenter

NERC

North American Electric Reliability Corporation

Trade Associations

American Public Power Association, Edison Electric
Institute, Large Public Power Council, National Rural Electric
Cooperative Association, Transmission Policy Study Group

Bonneville

Bonneville Power Administration

WAPA

Western Area Power Administration

Appelbaum

Jonathan Appelbaum