[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Proposed Rules]
[Pages 64935-64943]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26131]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM12-22-000]


Reliability Standards for Geomagnetic Disturbances

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy

[[Page 64936]]

Regulatory Commission (Commission) proposes to direct the North 
American Electric Reliability Corporation (NERC), the Commission-
certified Electric Reliability Organization, to submit for approval 
Reliability Standards that address the impact of geomagnetic 
disturbances (GMD) on the reliable operation of the Bulk-Power System. 
The Commission proposes to do this in two stages. In the first stage, 
the Commission proposes to direct NERC to file, within 90 days of the 
effective date of a final rule in this proceeding, one or more 
Reliability Standards that require owners and operators of the Bulk-
Power System to develop and implement operational procedures to 
mitigate the effects of GMDs consistent with the reliable operation of 
the Bulk-Power System. In the second stage, the Commission proposes to 
direct NERC to file, within six months of the effective date of a final 
rule in this proceeding, one or more Reliability Standards that require 
owners and operators of the Bulk-Power System to conduct initial and 
on-going assessments of the potential impact of GMDs on Bulk-Power 
System equipment and the Bulk-Power System as a whole. Based on those 
assessments, the Reliability Standards would require owners and 
operators to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD. This plan 
cannot be limited to operational procedures or enhanced training alone, 
but should, subject to the needs indentified in the assessments, 
contain strategies for protecting against the potential impact of GMDs 
based on factors such as the age, condition, technical specifications, 
or location of specific equipment. These strategies could include 
automatically blocking geomagnetically induced currents from entering 
the Bulk-Power System, instituting specification requirements for new 
equipment, inventory management, and isolating certain equipment that 
is not cost effective to retrofit. This second stage would be 
implemented in phases, focusing first on the most critical Bulk-Power 
System assets.

DATES: Comments are due December 24, 2012.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT: 
    David Huff (Technical Information), Office of Electric Reliability, 
Division of Security, Federal Energy Regulatory Commission, 888 First 
Street NE., Washington, DC 20426, (301) 665-1603, David.Huff@ferc.gov.
    Matthew Vlissides (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8408, Matthew.Vlissides@ferc.gov.

SUPPLEMENTARY INFORMATION: 

Notice of Proposed Rulemaking

Issued October 18, 2012.

    1. Pursuant to section 215(d)(5) of the Federal Power Act (FPA),\1\ 
the Federal Energy Regulatory Commission (Commission) proposes to 
direct the North American Electric Reliability Corporation (NERC), the 
Commission-certified Electric Reliability Organization (ERO), to file 
for approval with the Commission Reliability Standards (GMD Reliability 
Standards) that address the risks posed by geomagnetic disturbances 
(GMD) to the reliable operation of the Bulk-Power System.\2\ The 
Commission proposes to direct NERC to develop the GMD Reliability 
Standards in two stages. In the first stage, within 90 days of the 
effective date of a final rule in this proceeding, NERC would file one 
or more proposed Reliability Standards that require owners and 
operators of the Bulk-Power System to develop and implement operational 
procedures to mitigate the effects of GMDs consistent with the reliable 
operation of the Bulk-Power System. In the second stage, within six 
months of the effective date of a final rule in this proceeding, NERC 
would file one or more proposed Reliability Standards that require 
owners and operators of the Bulk-Power System to conduct initial and 
on-going assessments of the potential impact of GMDs on Bulk-Power 
System equipment and the Bulk-Power System as a whole. Based on those 
assessments, the Reliability Standards would require owners and 
operators to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD.\3\ This 
plan cannot be limited to operational procedures or enhanced training 
alone, but should, subject to the needs indentified in the assessments, 
contain strategies for protecting against the potential impact of GMDs 
based on factors such as the age, condition, technical specifications, 
or location of specific equipment. These strategies could include 
automatically blocking geomagnetically induced currents (GICs) from 
entering the Bulk-Power System, instituting specification requirements 
for new equipment, inventory management, and isolating certain 
equipment that is not cost effective to retrofit.\4\ This second stage 
would be implemented in phases, focusing first on the most critical 
Bulk-Power System assets.
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    \1\ 16 U.S.C. 824o(d)(5) (2006).
    \2\ ``A geomagnetic disturbance occurs when the magnetic field 
embedded in the solar wind is opposite that of the earth. This 
disturbance, which results in distortions to the earth's magnetic 
field, can be of varying intensity and has in the past impacted the 
operation of pipelines, communications systems, and electric power 
systems.'' Oak Ridge National Laboratory, Electric Utility Industry 
Experience with Geomagnetic Disturbances at xiii (1991), available 
at http://www.ornl.gov/~webworks/cpr/v823/rpt/51089.pdf.
    \3\ 16 U.S.C. 824o(a)(4) (2006).
    \4\ Some examples of automatic blocking include series line 
capacitors, transformer neutral GIC blocking and/or reduction 
devices, and selective tripping of vulnerable assets. Automatic 
blocking measures can also include the use of relays that can be set 
so that they are activated only when needed.
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    2. We take this action based on government-sponsored studies and 
NERC studies that conclude that GMD events can have an adverse, wide-
area impact on the reliable operation of the Bulk-Power System.\5\ In a 
2010 study prepared for the Commission, Department of Energy, and 
Department of Homeland Security, the Oak Ridge National Laboratory 
reported that GMD events can develop quickly over large

[[Page 64937]]

geographic footprints, having the capability to produce geographically-
large outages and significant damage to Bulk-Power System equipment.\6\
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    \5\ See, e.g., The Oak Ridge National Laboratory prepared a 
study consisting of six technical reports (collectively, ``Oak Ridge 
Study'') on the effects of electromagnetic pulses on the Bulk-Power 
System. Available at http://www.ornl.gov/sci/ees/etsd/pes/ferc_emp_gic.shtml; North American Electric Reliability Corp., 2012 
Special Reliability Assessment Interim Report: Effects of 
Geomagnetic Disturbances on the Bulk Power System at 85 (February 
2012) (NERC Interim GMD Report), available at http://www.nerc.com/files/2012GMD.pdf; North American Electric Reliability Corp., High-
Impact, Low-Frequency Event Risk to the North American Bulk Power 
System at 68 (June 2010) (HILF Report), available at http://www.nerc.com/files/HILF.pdf.
    \6\ Oak Ridge National Laboratory, Electromagnetic Pulse: 
Effects on the U.S. Power Grid: Meta-R-319 at pages 1-30, 1-31, 4-1 
(January 2010) (Oak Ridge Study 319 Report), available at http://www.ornl.gov/sci/ees/etsd/pes/pubs/ferc_Meta-R-319.pdf.
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    3. The seriousness of the risk posed by GMDs to the reliable 
operation of the Bulk-Power System was expressed at a Technical 
Conference held on April 30, 2012.\7\ At the Technical Conference, 
several panelists indicated that severe GMD events could potentially 
compromise the reliable operation of the Bulk-Power System, with some 
noting as an example the GMD-induced disruption of the Hydro-
Qu[eacute]bec grid in 1989.\8\ At the Technical Conference, panelists 
stated that the current 11-year solar activity cycle is expected to hit 
its maximum activity in 2013 and large solar events often occur within 
four years of such a cycle maximum.\9\ While strong GMDs are infrequent 
events, their potential impact on the reliable operation of the Bulk-
Power System (e.g., widespread blackouts) requires Commission action 
under section 215(d)(5) of the FPA.\10\
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    \7\ Written statements presented at the Technical Conference, 
post-Technical Conference comments, and Technical Conference 
transcript are accessible through the Commission's eLibrary document 
retrieval system in Docket No. AD12-13-000.
    \8\ See, e.g., Statement of Scott Pugh, U.S. Department of 
Homeland Security at 2 (citing 1989 Hydro-Qu[eacute]bec blackout); 
Statement of Frank Koza, PJM Interconnection, L.L.C. at 1 (``The 
combination of half-cycle transformer saturation and increased 
reactive power consumption can lead to voltage collapse and 
blackouts if not properly managed.''); Statement of John Kappenman 
at 8 (``The bulk power system is the nation's most important 
critical infrastructure and unlike other threats, a severe 
geomagnetic storms [sic] can impose a near simultaneous nationwide 
crippling threat to this vital infrastructure.''); Statement of 
Gerry Cauley, NERC at 1 (``Previous examples, such as the 1989 event 
in Hydro Qu[eacute]bec demonstrate that severe solar storms 
represent a serious risk that can challenge the reliability of the 
bulk power system.'').
    \9\ April 30, 2012 Technical Conference Tr. 84:14-19 (Pugh); 
106:9-15, 169:1-19 (Murtagh).
    \10\ 16 U.S.C. 824o(d)(5); see also Transmission Relay 
Loadability Reliability Standard, 134 FERC ] 61,127, at P 25 (2011) 
(explaining that under section 215(d)(5) ``the Commission, and not 
just the ERO, has the responsibility and authority to identify 
`specific matters' that it considers appropriate to carry out 
section 215. Section 215 establishes a paradigm by which both the 
Commission and the ERO are responsible for identifying reliability 
gaps--the ERO through its Reliability Standards development process, 
where it can independently identify areas of concern and develop 
Standards to address them; and the Commission through its review of 
proposed Reliability Standards and authority to direct modifications 
or new Standards that address specific issues necessary to 
effectuate the purposes of section 215.'').
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    4. Currently, GMD vulnerabilities are not adequately addressed in 
the Reliability Standards.\11\ This constitutes a reliability gap 
because, as discussed below, GMD events can cause the Bulk-Power System 
to collapse suddenly and can potentially damage the Bulk-Power System.
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    \11\ NERC Reliability Standard IRO-005-3a (Reliability 
Coordination--Current Day Operations), Requirement R3, is the only 
existing requirement that discusses GMDs. Requirement R3 requires 
reliability coordinators to make transmission operators and 
balancing authorities aware of GMD forecast information and assist 
as needed in the development of response plans, but it does not 
require steps for mitigating the effects of GMD events.
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    5. GMD events affect the Bulk-Power System by introducing 
geomagnetically-induced currents \12\ that can cause ``half-cycle 
saturation'' of certain high-voltage Bulk-Power System 
transformers.\13\ Half-cycle saturation of transformers can lead to 
increased consumption of reactive power and creation of disruptive 
harmonics that can cause the sudden collapse of the Bulk-Power 
System.\14\ Further, half-cycle saturation from GICs can potentially 
damage Bulk-Power System transformers because of overheating.\15\ 
Permanent damage to large transformers due to GICs can lead to 
restoration delays for the power grid.\16\ For example, the Oak Ridge 
Study assessed the effects of a ``1-in-100 year'' geomagnetic storm on 
the modern Bulk-Power System.\17\ The Oak Ridge Study simulation 
concluded that such an event could put a significant number of Bulk-
Power System transformers at risk for failure or permanent damage.\18\ 
The Oak Ridge Study simulation also found that the effects of a GMD 
event may be substantially larger if it occurred at lower 
latitudes.\19\ Estimates prepared by the National Research Council of 
the National Academies concluded that these events have the potential 
to cause widespread, long-term losses with economic costs to the United 
States estimated at $1-2 trillion and a recovery time of four to ten 
years.\20\ The NERC Interim GMD Report concluded, on the other hand, 
that the worst-case scenario is ``voltage instability and subsequent 
voltage collapse,'' and cites as an example the 1989 Hydro-
Qu[eacute]bec blackout.\21\ While the conclusions of these reports 
differ significantly, our proposed action is warranted by even the 
lesser consequence of a projected widespread blackout without long-
term, significant damage to the Bulk-Power System. Taking steps to 
prevent such blackouts is consistent with maintaining the reliable 
operation of the Bulk-Power System.\22\
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    \12\ GIC is an electrical current created by a solar event that 
appears as direct current to the bulk electric system. North 
American Electric Reliability Council, March 13, 1989 Geomagnetic 
Disturbance at 36 (1989), available at http://www.nerc.com/files/1989-Quebec-Disturbance.pdf. Automatic blocking prevents or reduces 
GICs flows into protected Bulk-Power System components without 
operator intervention. NERC Interim GMD Report at 73.
    \13\ NERC Interim GMD Report at iii-iv. Half-cycle saturation is 
an abnormal operating condition whereby a transformer operates 
outside nominal voltage design values, saturating the transformer 
core with magnetic flux and forcing magnetic flux into other parts 
of the transformer. Id. at 25.
    \14\ Id. at 3 (``GMD can have * * * a wide range of impacts on 
power apparatus and power system operations. The effects on 
apparatus range from nuisance events, such as tripping of electrical 
equipment, radio interference, and control malfunctions, to large-
scale events, such as voltage and reactive power fluctuations, local 
disruption of service, limited equipment failure, and potential 
voltage instability resulting in uncontrolled cascading of the bulk 
power system.'').
    \15\ While disagreements exist as to the likely severity of 
transformer damage from GMDs compared with the likelihood of voltage 
collapse due to increased reactive power absorption arising from 
GMDs, there appears to be a consensus that GMDs can cause at least 
some damage to Bulk-Power System transformers. See, e.g., Comments 
of the North American Electric Reliability Corporation, Docket No. 
AD12-13-000, at 5 (filed May 21, 2012) (``Though the most likely 
result is voltage collapse, the GMD Task Force members agreed that, 
depending on the transformer health, design, geology and geomagnetic 
latitude, geomagnetic induced current flows can result in 
transformer loss-of-life, and may ultimately result in the failure 
of some transformers.'').
    \16\ Oak Ridge Study 319 Report at pages 4-1, 4-3 (``The 
recovery could plausibly extend into months in many parts of the 
impacted regions * * * These multi-ton apparatus [transformers] 
generally cannot be repaired in the field, and if damaged in this 
manner, they need to be replaced with new units, which have 
manufacture lead times of 12 months or more in the world market.''); 
NERC Interim GMD Report at iv (``[R]estoration times for system 
collapse due to voltage instability would be a matter of hours to 
days, while replacing transformers requires long-lead times (a 
number of months) to replace or move spares into place, unless they 
are in a nearby location. Therefore, the failure of a large numbers 
[sic] of transformers would have considerable impacts on portions of 
the system.'').
    \17\ Oak Ridge Study 319 Report at page 3-22.
    \18\ Id. at page 1-14, Tables 4-1, 4-2, 4-3 (listing numbers of 
at-risk transformers).
    \19\ Id. at pages 3-25, 3-26.
    \20\ National Research Council of the National Academies, Severe 
Space Weather Events--Understanding Societal and Economic Impacts: A 
Workshop Report at 4 (2008) (NAS Workshop Report), available at 
http://www.nap.edu/catalog/12507.html.
    \21\ NERC Interim GMD Report at 69.
    \22\ 16 U.S.C. 824o(a)(4) (``The term `reliable operation' means 
operating the elements of the bulk-power system within equipment and 
electric system thermal, voltage, and stability limits so that 
instability, uncontrolled separation, or cascading failures of such 
system will not occur as a result of a sudden disturbance, including 
a cybersecurity incident, or unanticipated failure of system 
elements.'').
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    6. Given the potentially severe, wide-spread impact to the reliable 
operation of the Bulk-Power System from GMD events and the absence of 
existing Reliability Standards to address it, the Commission proposes 
to direct the ERO to file with the Commission for approval Reliability 
Standards that address this

[[Page 64938]]

reliability gap. In proposing to address the risks posed by GMDs in two 
stages, the Commission finds that there are Reliability Standards that 
the ERO can develop and file quickly (i.e., requiring GMD operational 
procedures) to mitigate the effects of GMDs while it develops other 
Reliability Standards that require owners and operators of the Bulk-
Power System to assess the potential impact of GMDs on Bulk-Power 
System equipment and the Bulk-Power System as a whole. Based on those 
assessments, the Reliability Standards would require owners and 
operators to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD. This plan 
cannot be limited to operational procedures or enhanced training alone, 
but should, subject to the needs identified in the assessments, contain 
strategies for protecting against the potential impact of GMDs based on 
factors such as the age, condition, technical specifications, or 
location of specific equipment. These strategies could include 
automatically blocking geomagnetically induced currents from entering 
the Bulk-Power System, instituting specification requirements for new 
equipment, inventory management, and isolating certain equipment that 
is not cost effective to retrofit.\23\
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    \23\ See infra PP 34-36.
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    7. We recognize that, depending on the results of the initial and 
ongoing assessments that would be required under this proposed rule, 
there could be substantial costs associated with some measures to 
protect against damage to the Bulk-Power System from GMDs.\24\ In 
determining that it is appropriate to issue this proposed rule, 
however, we have compared such costs against the societal harms, 
including the potential costs of equipment damage or prolonged 
blackouts, that could result from taking no action.\25\
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    \24\ For example, estimates for installing blocking devices on 
transformers range from $100,000 to $500,000 for each affected 
transformer. See Foundation for Resilient Societies, Comments on 
Advance Notice of Proposed Rulemaking (ANPR) of the Nuclear 
Regulatory Commission Relating to the Prevention and Mitigation of 
Station Blackout, filed in Docket No. AD12-13-000, at 13 (May 4, 
2012) (citing $500,000 installed costs per transformer); MITRE 
Corp., Impacts of Severe Space Weather on the Electric Grid, at 66 
(November 2011) (citing $100,000 cost for neutral-current-blocking-
capacitors per transformer), available at http://www.fas.org/irp/agency/dod/jason/spaceweather.pdf.
    \25\ For example the estimated total cost of the August 2003 
four-day blackout in the United States is between $4 billion and $10 
billion, with the Department of Energy calculating the total cost to 
be $6 billion. Electricity Consumers Resource Council, The Economic 
Impacts of the August 2003 Blackout, available at http://www.elcon.org/Documents/EconomicImpactsOfAugust2003Blackout.pdf. See 
also supra P 5 (citing estimates by the National Research Council of 
the National Academies of potentially $1-2 trillion in economic 
costs from a severe GMD event).
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I. Background

A. Section 215 and Mandatory Reliability Standards

    8. Section 215 of the FPA requires the Commission to certify an ERO 
to develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval.\26\ Once approved, the Reliability 
Standards may be enforced in the United States by the ERO, subject to 
Commission oversight, or by the Commission independently.
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    \26\ 16 U.S.C. 824o (2006).
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    9. Pursuant to section 215(d)(5) of the FPA, the Commission has the 
authority, upon its own motion or upon complaint, to order the ERO to 
submit to the Commission a proposed Reliability Standard or a 
modification to a Reliability Standard that addresses a specific matter 
if the Commission considers such a new or modified Reliability Standard 
appropriate to carry out section 215 of the FPA.\27\
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    \27\ 16 U.S.C. 824o(d)(5); 18 CFR 39.6(f) (2012).
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B. Studies of GMD Events on the Bulk-Power System

    10. The impact of GMDs on the Bulk-Power System has been evaluated 
in several government-sponsored studies and NERC reports. The EMP 
Commission issued reports assessing the threat to the United States 
from Electromagnetic Pulse (EMP) attack in 2004 and 2008, which also 
addressed the effects of geomagnetic storms on the electric power 
infrastructure.\28\ The NAS Workshop Report addressing the impact of 
severe space weather events was released in 2008. The Oak Ridge 
National Laboratory issued the Oak Ridge Study on the effects of 
electromagnetic pulses on the Bulk-Power System in January 2010. The 
NERC HILF Report on high-impact, low-frequency risks to the Bulk-Power 
System was issued in June 2010.\29\ In February 2012, NERC issued the 
NERC Interim GMD Report evaluating the effects of GMDs on the Bulk-
Power System.
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    \28\ These reports are accessible at the Commission to Assess 
the Threat to the United States from Electromagnetic Pulse (EMP) 
Attack Web site at http://www.empcommission.org/.
    \29\ The HILF Report was prepared by NERC, Department of Energy, 
and a steering committee comprised of industry and risk experts and 
was approved by the NERC Board of Trustees on May 17, 2010. HILF 
Report at 2.
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    11. The Commission conducted a staff-led Technical Conference on 
April 30, 2012 to discuss the effects of GMDs on the reliable operation 
of the Bulk-Power System. NERC, government agencies, industry 
stakeholders, and other interested entities attended the Technical 
Conference and submitted post-Technical Conference comments.

C. Effects of GMD Events on the Bulk-Power System

    12. The interaction of the Earth's magnetic field and solar events 
can cause low frequency GICs to flow along the surface of the Earth and 
in the oceans. Reliability issues arise when GICs enter the Bulk-Power 
System from the Earth. Since many Bulk-Power System transformers are 
grounded, the GIC appears as electrical current to the Bulk-Power 
System and flows through the ground connection and conductors, such as 
transformers and transmission lines.\30\
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    \30\ Oak Ridge National Laboratory, Electromagnetic Pulse: 
Effects on the U.S. Power Grid (Meta-R-322) at page 1-1 (January 
2010) (Oak Ridge Study 322 Report), available at http://www.ornl.gov/sci/ees/etsd/pes/pubs/ferc_Meta-R-322.pdf.
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    13. GICs can cause transformer cores to become ``saturated,'' 
resulting in loss of reactive power (VARs), the introduction of 
harmonic distortions, and possible physical damage to the 
transformer.\31\ GICs enter the Bulk-Power System through the grounded 
neutrals of transformers and are responsible for forcing their metal 
cores into saturation.\32\ A primary effect of saturation is the 
potential for transformer damage through the overheating of internal 
components.\33\

[[Page 64939]]

Saturation is also responsible for secondary effects, such as the 
production of harmonics that are not present during normal Bulk-Power 
System operation and for substantially increasing the transformer's 
absorption of reactive power from the system, thus requiring 
significant amounts of additional voltage support to compensate for 
reactive power absorption. Harmonic production and reactive power 
absorption may interfere with normal system operations creating 
secondary effects on other Bulk-Power System facilities. These primary 
and secondary effects can occur almost simultaneously over a large 
geographic area, resulting in a multiple contingency outage that has 
the potential to cascade across the Bulk-Power System.\34\
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    \31\ HILF Report 70-71. Harmonics are currents or voltages with 
frequencies that are integer multiples of the fundamental power 
frequency (i.e., 60 Hz in the United States). See Northeast Power 
Coordinating Council, Inc. Glossary of Terms, available at https://www.npcc.org/Standards/Directories/Glossary%20of%20Terms.pdf. They 
can cause overcurrent relays to automatically trip components (e.g., 
capacitor banks and static VAR compensators) from service. HILF 
Report at 71. Automatic removal of such components can further 
exacerbate system voltages already reduced by the GIC-related 
absorption of reactive power.
    \32\ Oak Ridge Study 322 Report at pages 1-1, 7-11.
    \33\ HILF Report at 70 (``Transformers experience excessive 
levels of internal heating brought on by stray flux when GICs cause 
the transformer's magnetic core to saturate and spill flux outside 
the normal core steel magnetic circuit. Previous well-documented 
cases have noted heating failures that caused melting and burn-
through of large-amperage copper windings and leads in these 
transformers (Figure 9).''); Oak Ridge Study 319 Report at page 2-29 
(``Also of note from this particular [March 1989] storm is strong 
evidence that GIC-induced half-cycle saturation of transformers can 
indeed produce enough heat to severely damage or even destroy 
exposed large power transformers.'').
    \34\ HILF Report at 71-72.
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    14. The Oak Ridge Study identified factors that determine the 
severity of GMD events, including: (1) Location and strength of the 
underlying solar event; (2) ground conductivity in the affected 
locations (i.e., the geology of the location); (3) orientation of the 
transmission lines; (4) length of transmission lines; and (5) grid 
construction.\35\ A solar disturbance can cause near-simultaneous, 
multi-point failures that can trigger collapse of the Bulk-Power 
System.\36\
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    \35\ Oak Ridge Study 319 Report at page 2-5.
    \36\ Id. at pages 4-1, 4-2. One example cited in the Oak Ridge 
Study is the March 13, 1989 solar disturbance that triggered the 
collapse of the Hydro-Qu[eacute]bec power grid, which went from 
normal to a situation where it sustained seven contingencies in an 
elapsed time of 57 seconds. Id.
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II. Discussion

    15. As discussed below, the Commission finds that there is a gap in 
the Reliability Standards regarding GMDs. Therefore, in order to carry 
out section 215 of the FPA, the Commission proposes to direct the ERO 
to develop and file for approval Reliability Standards that address the 
potentially severe, wide-spread impact of GMD events on the reliable 
operation of the Bulk-Power System.
    16. We propose that the ERO develop and file the GMD Reliability 
Standards in two stages. In the first stage, within 90 days of the 
effective date of a final rule in this proceeding, the Commission 
proposes to direct NERC to file one or more Reliability Standards that 
require owners and operators of the Bulk-Power System to develop and 
implement operational procedures to mitigate the effects of GMDs 
consistent with the reliable operation of the Bulk-Power System. In the 
second stage, the Commission proposes to direct NERC to file one or 
more Reliability Standards, within six months of the effective date of 
a final rule in this proceeding, that require owners and operators of 
the Bulk-Power System to assess the impact of GMDs on Bulk-Power System 
equipment and the Bulk-Power System as a whole. Based on those 
assessments, the Reliability Standards would require owners and 
operators to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD. This plan 
cannot be limited to operational procedures or enhanced training alone, 
but should, subject to the needs indentified in the assessments, 
contain strategies for protecting against the potential impact of GMDs 
based on factors such as the age, condition, technical specifications, 
or location of specific equipment. These strategies could include 
automatically blocking geomagnetically induced currents from entering 
the Bulk-Power System, instituting specification requirements for new 
equipment, inventory management, and isolating certain equipment that 
is not cost effective to retrofit.\37\
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    \37\ The second stage Reliability Standards would not require 
owners and operators of the Bulk-Power System to protect the Bulk-
Power System beyond what is found to be required based on the 
initial and ongoing assessments.
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    17. In proposing to direct the ERO to submit Reliability Standards 
that address the impact of GMD events on the reliable operation of the 
Bulk-Power System, we are not proposing specific requirements or 
otherwise pre-judging what the ERO may eventually submit. Instead, we 
identify concerns that we believe should be addressed in any GMD 
Reliability Standards. We expect the ERO to support its proposed 
Reliability Standards and explain how they address the Commission's 
concerns.

A. Reliability Standards Requiring Operational Procedures

    18. Requiring operational procedures, while not a complete 
solution, constitutes a first step to addressing the GMD reliability 
gap because they can be implemented relatively quickly.\38\ The 
Commission does not propose to require the ERO or owners and operators 
of the Bulk-Power System to adopt any particular operational 
procedures. Owners and operators of the Bulk-Power System are the most 
familiar with the equipment and system configurations. Accordingly, we 
propose that the ERO file one or more Reliability Standards requiring 
owners and operators of the Bulk-Power System to develop and implement 
operational procedures to mitigate the effects of GMDs consistent with 
the reliable operation of the Bulk-Power System based on the following 
guidance.
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    \38\ NERC Interim GMD Report at 79 (``Operating procedures are 
the quickest way to put in place actions that can mitigate the 
adverse effects of GIC on system reliability * * * Both system 
operating and transmission owner organizations need to have 
appropriate procedures and training in place.'').
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    19. Operational procedures may help alleviate abnormal system 
conditions due to transformer absorption of reactive power during GMD 
events, helping to stabilize system voltage swings, and may potentially 
isolate some equipment from being damaged or misoperated. The NERC 
Interim GMD Report identifies examples of operational procedures to 
mitigate GMD events (i.e., the effects of GICs), including: reduction 
of equipment loading (e.g., by starting off-line generation), unloading 
the reactive load of operating generation, reductions of system 
voltage, and system and/or equipment isolation through reconfiguration 
of the transmission system.\39\ Some entities already have operational 
procedures to mitigate the effect of GICs on the Bulk-Power System 
utilizing system resources.\40\ The Commission expects that the ERO and 
owners and operators of the Bulk-Power System will draw on industry's 
experience in developing and implementing existing operational 
procedures. Given that experience, we propose to direct NERC to file, 
within 90 days of the effective date of a final rule in this 
proceeding, proposed Reliability Standards that require the development 
and implementation of operational procedures. While this deadline is 
aggressive, mandatory and enforceable Reliability Standards requiring 
owners and operators to implement operational procedures should be 
established quickly to afford some level of uniform protection to the 
Bulk-Power System against GMD events. As discussed above, the impact of 
GMDs on the Bulk-Power System has been studied extensively for many 
years, laying the foundation for the prompt development of these first 
stage Reliability Standards. Moreover, the fact that operational 
procedures are already in place in some areas should allow for

[[Page 64940]]

faster development and implementation of these Reliability Standards.
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    \39\ NERC Interim GMD Report at 80-81.
    \40\ See, e.g., PJM Interconnection, L.L.C., Manual 13: 
Emergency Operations at 47, available at http://www.pjm.com/~/media/
documents/manuals/m13.ashx; Northeast Power Coordinating Council, 
Inc., Procedures for Solar Magnetic Disturbances Which Affect 
Electric Power Systems, available at https://www.npcc.org/Standards/Procedures/c-15.pdf.
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    20. While the proposed Reliability Standards should not necessarily 
specify what operational procedures must be adopted, the ERO should 
give owners and operators of the Bulk-Power System guidance as to what 
procedures have been or are expected to be effective in mitigating the 
effects of GMDs consistent with the reliable operation of the Bulk-
Power System. Moreover, the proposed Reliability Standards should 
address the coordination of operational procedures among responsible 
entities across regions.\41\ Since there could be potential equipment 
damage resulting from a GMD event, the proposed Reliability Standards 
should also address operational procedures for restoring GMD-impacted 
portions of the Bulk-Power System that take into account the potential 
for equipment that is damaged or out-of-service for an extended period 
of time.
---------------------------------------------------------------------------

    \41\ NERC Interim GMD Report at 79 (``The [operating] procedures 
of these organizations need to be coordinated with each other and 
with their neighboring organizations.'').
---------------------------------------------------------------------------

    21. We do not propose to direct a specific implementation schedule 
for the proposed Reliability Standards, but the Commission encourages 
the ERO to require owners and operators of the Bulk-Power System to 
implement the required operational procedures 90 days after Commission 
approval of the Reliability Standards. Following implementation, the 
Commission proposes to require NERC to provide periodic reports 
assessing the effectiveness of the operational procedures in mitigating 
the effects of GMD events. In addition, NERC should periodically review 
the required operational procedures and recommend to owners and 
operators that they incorporate lessons-learned and new research 
findings.
    22. In addition to developing Reliability Standards that require 
operational procedures during the first stage, the Commission also 
proposes to accept aspects of the ``Initial Actions'' proposal set 
forth in NERC's May 21, 2012 post-Technical Conference comments. 
Specifically, NERC proposed to ``identify facilities most at-risk from 
severe geomagnetic disturbance'' and to ``conduct wide-area geomagnetic 
disturbance vulnerability assessment.'' \42\ As noted in NERC's 
comments regarding the vulnerability assessments, special attention 
would be given to evaluating critical transformers (e.g., step-up 
transformers at large generating facilities). We agree with NERC that 
critical Bulk-Power System facilities should be evaluated for GMD 
vulnerability as an initial action. In addition, as part of the initial 
action, special attention should be given to those Bulk-Power System 
facilities that provide service to critical and priority loads.\43\ The 
Commission, therefore, proposes to direct NERC to conduct this 
``initial action'' simultaneously with the development and 
implementation of the first stage GMD Reliability Standards. The 
Commission seeks comment from NERC and other interested entities on all 
aspects of this proposal.
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    \42\ NERC Comments at 8-9 (``As the first step in identifying 
the risk of geomagnetic disturbance to the bulk power system, NERC 
intends to complete a system-wide vulnerability assessment * * * 
special attention will be given to the evaluation of critical 
transformers, such as generator step-up units at large generating 
facilities * * * a high level review will be conducted to identify 
and classify the at-risk population based on existing peer-reviewed 
research. This assessment will be based on a high level screening 
approach that will include transformer design, condition, geology 
and geomagnetic location.'').
    \43\ The NERC Severe Impact Resilience Task Force identified 
critical and priority loads in a report. See Severe Impact 
Resilience: Considerations and Recommendations at 26 (Accepted by 
NERC Board of Trustees on May 9, 2012), available at http://www.nerc.com/docs/oc/sirtf/SIRTF_Final_May_9_2012-Board_Accepted.pdf.
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B. Second Stage Reliability Standards

    23. To address GMDs comprehensively, the Commission proposes to 
direct NERC to develop, in a second stage, Reliability Standards that 
require owners and operators of the Bulk-Power System to conduct 
initial and on-going assessments of the potential impact of GMDs on 
Bulk-Power System equipment and on the Bulk-Power System as a whole. 
Based on those assessments, the Reliability Standards would require 
owners and operators to develop and implement a plan so that 
instability, uncontrolled separation, or cascading failures of the 
Bulk-Power System, caused by damage to critical or vulnerable Bulk-
Power System equipment, or otherwise, will not occur as a result of a 
GMD. This plan cannot be limited to operational procedures or enhanced 
training alone, but should, subject to the needs identified in the 
assessments, contain strategies for protecting against the potential 
impact of GMDs based on factors such as the age, condition, technical 
specifications, or location of specific equipment. These strategies 
could include automatically blocking geomagnetically induced currents 
from entering the Bulk-Power System, instituting specification 
requirements for new equipment, inventory management, and isolating 
certain equipment that is not cost effective to retrofit. While the 
Commission proposes to direct the ERO to submit the proposed second 
stage Reliability Standards within six months of the effective date of 
a final rule in this proceeding, the Commission seeks comment on the 
feasibility of a six-month deadline.
    24. We propose to direct the filing of these second stage GMD 
Reliability Standards because of two concerns with relying on 
operational procedures alone: (1) Owners and operators of the Bulk-
Power System may not have enough time to initiate effective operating 
procedures after being warned of a GMD event; and (2) operational 
procedures may not prevent permanent damage to Bulk-Power System 
equipment.\44\ Current GMD forecasting methods provide limited time for 
operators to react once a GMD warning is issued.\45\ Even with enough 
time to react, the Oak Ridge Study found that, given a large enough GMD 
event, operational procedures are unlikely to provide the substantial 
levels of GIC reduction needed to limit the potential for permanent 
damage to transformers.\46\ The Oak Ridge Study and the HILF Report 
also found that widespread damage to Bulk-Power System transformers 
could result in prolonged outages.\47\
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    \44\ NERC Interim GMD Report at 10 (``These warning can be 
received as short as 30 minutes before the onset of an impending 
geomagnetic storm.''). At the April 30, 2012 Technical Conference, 
Mr. Murtagh, Program Coordinator at the National Oceanic and 
Atmospheric Administration's Space Weather Prediction Center, stated 
that a warning is issued when a GMD event reaches the NASA Advanced 
Composition Explorer (ACE) satellite and at that point, in some 
cases, it could be 20 or 30 minutes before the event reaches the 
Earth's magnetic field. April 30, 2012 Technical Conference Tr. 
170:5-22 (Murtagh).
    \45\ Mr. Pugh, from the U.S. Department of Homeland Security's 
Interagency Programs Office Science & Technology Directorate, stated 
that the operators in the 1989 Hydro-Qu[eacute]bec blackout only had 
90 seconds to react, which was insufficient to ``prevent a massive 
blackout and significant equipment damage.'' April 30, 2012 
Technical Conference Tr. 12:4-7 (Pugh).
    \46\ Oak Ridge Study 322 Report at pages ix and 1-1.
    \47\ HILF Report at 12 (``The physical damage of certain system 
components (e.g. extra-high-voltage transformers) on a large scale, 
as could be effected by any of these threats, could result in 
prolonged outages as procurement cycles for these components range 
from months to years.''); Oak Ridge Study 319 Report at pages 2-33, 
2-34 (``An especially large storm or GIC event could plausibly 
create the potential for widespread failure of many exposed 
transformers and hamper rapid restoration capabilities. In extreme 
cases, where replacements may take months, a situation may exist 
where the demand for electric service can only be partially 
supplied, raising the prospect of rationing and rotating blackouts 
to regions that are unable to be fully served.'').
---------------------------------------------------------------------------

    25. We recognize that the NERC Interim GMD Report concludes that a 
prolonged blackout due to extensive

[[Page 64941]]

damage to Bulk-Power System transformers is less likely than voltage 
instability due to increased reactive power consumption and loss of 
reactive power support, which can lead to blackouts like the 1989 
Hydro-Qu[eacute]bec event.\48\ The Commission's proposed two-stage 
approach recognizes this difference by focusing first on the 
development of Reliability Standards requiring operational procedures 
in a relatively short time frame. The Commission proposes to give NERC 
and owners and operators of the Bulk-Power System more time to perform, 
in the second stage, initial and on-going assessments. Based on those 
assessments, the Reliability Standards would require owners and 
operators to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD. This plan 
cannot be limited to operational procedures or enhanced training alone, 
but should, subject to the needs identified in the assessments, contain 
strategies for protecting against the potential impact of GMDs based on 
factors such as the age, condition, technical specifications, or 
location of specific equipment. These strategies could include 
automatically blocking geomagnetically induced currents from entering 
the Bulk-Power System, instituting specification requirements for new 
equipment, inventory management, and isolating certain equipment that 
is not cost effective to retrofit. Moreover, although the NOPR proposes 
that the second stage Reliability Standards be filed within six months 
of the effective date of the final rule, we seek comment on the 
feasibility of that deadline.
---------------------------------------------------------------------------

    \48\ NERC Interim GMD Report at vi.
---------------------------------------------------------------------------

    26. Below, we offer guidance on the assessments of Bulk-Power 
System vulnerability to GMDs and potential measures for automatically 
protecting critical or vulnerable components. In addition, recognizing 
the potential for substantial investments of time and resources to 
implement these Reliability Standards, we offer guidance on an 
implementation schedule, which will likely consist of an extended, 
multi-phase process. The Commission seeks comment from NERC and other 
interested entities on all aspects of this proposal.
1. GMD Vulnerability Assessments of the Bulk-Power System
    27. The Commission proposes to direct the ERO to develop 
Reliability Standards that require owners and operators of the Bulk-
Power System to conduct vulnerability assessments to determine how 
critical or vulnerable Bulk-Power System components react to simulated 
GICs of varying intensities.\49\ The Commission proposes to direct the 
ERO to consider the following parameters as it develops the Reliability 
Standards.\50\
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    \49\ To accurately simulate the impact of GMDs on the Bulk-Power 
System, the assessments should consider the impact of GICs that may 
enter the system through transformers that are not treated as part 
of the bulk electric system and any impact that the non-bulk 
electric system transformers may have on the reliability of the 
Bulk-Power System. We do not propose, however, that equipment 
falling outside of our jurisdiction would be required to be 
protected under the proposed Reliability Standard.
    \50\ The vulnerability assessments in the second phase 
Reliability Standards are distinct from the ``initial action'' 
evaluations, discussed above, which NERC proposed to do and we 
propose to have NERC conduct simultaneous with the development and 
implementation of the first phase Reliability Standards. We expect, 
however, that the analyses performed in the ``initial action'' 
evaluations will be used to quickly identify and protect the most 
critical and vulnerable Bulk-Power System components once the second 
stage Reliability Standards become effective.
---------------------------------------------------------------------------

    28. First, the Reliability Standards should contain uniform 
evaluation criteria for owners and operators to follow when conducting 
their assessments. As the Commission noted with respect to other 
reliability assessments, uniformity increases the accuracy of 
transmission system reliability assessments and consequently enhances 
overall reliability.\51\
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    \51\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, at P 1298, order on 
reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
---------------------------------------------------------------------------

    29. Second, the assessments should, through studies and 
simulations, evaluate the primary and secondary effects of GICs on 
Bulk-Power System transformers, including the effects of GICs 
originating from and passing to other regions.
    30. Third, the assessments should evaluate the effects of GICs on 
other Bulk-Power System equipment, system operations, and system 
stability, including the anticipated loss of critical or vulnerable 
devices or elements resulting from GIC-related issues.\52\
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    \52\ The Oak Ridge Study assessment included GMD modeling, 
simulation and review of storm impacts, power grid GIC flows and 
reactive power demands, transformer heating and risk of potential 
damage to transformers. See generally Oak Ridge Study 319 Report.
---------------------------------------------------------------------------

    31. Fourth, in conjunction with assessments by owners and operators 
of their own Bulk-Power System components, wide-area or Regional 
assessments of GIC impacts should be performed. A severe GMD event can 
cause simultaneous stresses at multiple locations on the Bulk-Power 
System, potentially resulting in a multiple-outage event.\53\ In 
predicting GIC flows, it is necessary to take into consideration the 
network topology as an integrated whole (i.e., on a wide-area 
basis).\54\
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    \53\ Oak Ridge Study 319 Report at pages A1-1, A1-2.
    \54\ Id. at page 1-17.
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    32. Fifth, the assessments should be periodically updated, taking 
into account new facilities, modifications to existing facilities, and 
new information, including new research on GMDs, to determine whether 
there are resulting changes in GMD impacts that require modifications 
to Bulk-Power System mitigation schemes.
    33. The Commission seeks comments from NERC and other interested 
entities on all aspects of this proposal.
2. Automatic GIC Blocking for Critical or Vulnerable Bulk-Power System 
Components
    34. While we do not propose to require a particular solution in the 
second stage Reliability Standards to address GMDs, we expect that some 
assessments will demonstrate that automatic blocking is necessary in 
some instances. The Commission, above, proposes to direct the ERO to 
develop Reliability Standards that require owners and operators of the 
Bulk-Power System to develop and implement a plan so that instability, 
uncontrolled separation, or cascading failures of the Bulk-Power 
System, caused by damage to critical or vulnerable Bulk-Power System 
equipment, or otherwise, will not occur as a result of a GMD. Automatic 
blocking measures address the major concerns with relying exclusively 
on operational procedures to mitigate GMDs (i.e., the short period of 
time to react to a GMD event and the potential consequences of not 
reacting fast enough). Blocking can prevent the flow of GICs through 
power transformers and the Bulk-Power System.\55\ Eliminating GICs in 
transformers prevents transformer core saturation and, thus, mitigates 
or prevents the effects of GMDs on the Bulk-Power System (i.e., 
transformer overheating, reactive power absorption, and harmonic 
generation).
---------------------------------------------------------------------------

    \55\ NERC Interim GMD Report at 73.
---------------------------------------------------------------------------

    35. The Commission does not propose to direct the ERO to require a 
particular automatic blocking technology, where blocking is necessary. 
Instead, the Commission proposes to direct the ERO to identify in the 
proposed Reliability Standards what would constitute appropriate 
automatic blocking measures. In defining what is an

[[Page 64942]]

appropriate blocking measure, the ERO should address: (1) Its 
feasibility and effectiveness; and (2) its ability to operate without 
adversely impacting the reliable operation of the Bulk-Power System. 
The Commission proposes that the Reliability Standards should include a 
means by which the ERO can verify that selected blocking measures are 
appropriate.
    36. The use of automatic blocking devices, such as transmission 
line series capacitors and transformer neutral blocking, are possible 
measures.\56\ These devices block or reduce the flow of GIC in a power 
grid.\57\ Although not a means for blocking GICs, another possible 
option is to improve the ``withstand'' capability of Bulk-Power System 
components. The ``withstand'' capability, in this context, refers to a 
component's ability to withstand stresses imposed by GICs before 
suffering damage, but it does not prevent GICs from affecting the rest 
of the Bulk-Power System (e.g., it does not prevent the secondary 
effects of harmonics or increased reactive power consumption).\58\ The 
ERO should consider whether the reliability goals of the proposed 
Reliability Standards can be achieved by a combination of automatic 
protection measures, including, for example, some combination of 
automatic blocking and improved ``withstand'' capability. In any event, 
the measures must be adequate to protect the reliability of the Bulk-
Power System against the risks identified in the assessments.
---------------------------------------------------------------------------

    \56\ Oak Ridge Study 322 Report at ix-x.
    \57\ Id.
    \58\ NERC Interim GMD Report at 67.
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    37. The Commission seeks comments from NERC and other interested 
entities on all aspects of this proposal.
3. Implementation Schedule
    38. The second stage Reliability Standards will likely require an 
extended, multi-phase implementation period given the time needed to 
conduct the required assessments and the time and cost of installing 
any required automatic protection measures. Although the Commission 
does not propose to direct the ERO to develop a specific implementation 
plan, we believe it would be appropriate for the proposed Reliability 
Standard to include an implementation schedule that requires owners and 
operators of the Bulk-Power System to prioritize implementation so that 
components considered vital to the reliable operation of the Bulk-Power 
System are provided with any necessary automatic protection measures in 
the earliest phase of the plan.\59\
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    \59\ For example, critical Bulk-Power System equipment 
identified by NERC in the first stage ``initial actions'' 
assessments, discussed previously, should be protected in the 
earliest phase of the implementation plan.
---------------------------------------------------------------------------

    39. The Commission seeks comments from NERC and other interested 
entities on an implementation plan.

III. Information Collection Statement

    40. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules. Upon approval of a collection(s) of information, OMB will 
assign an OMB control number and an expiration date. Respondents 
subject to the filing requirements of an agency 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. The Paperwork Reduction Act (PRA) requires each federal agency 
to seek and obtain OMB approval before undertaking a collection of 
information directed to ten or more persons, or contained in a rule of 
general applicability.
    41. The Commission is submitting these reporting requirements to 
OMB for its review and approval under section 3507(d) of the PRA. 
Comments are solicited on the Commission's need for this information, 
whether the information will have practical utility, ways to enhance 
the quality, utility, and clarity of the information to be collected, 
and any suggested methods for minimizing the respondent's burden, 
including the use of automated information techniques.
    42. The Public Reporting Burden and cost related to the proposed 
rule in Docket No. RM12-22-000 are covered by, and already included in, 
the existing FERC-725, Certification of Electric Reliability 
Organization; Procedures for Electric Reliability (OMB Control No. 
1902-0225). FERC-725 includes the ERO's overall responsibility for 
developing Reliability Standards, such as the Reliability Standards for 
Geomagnetic Disturbances.
    43. Internal review: The Commission has reviewed the proposed 
changes and has determined that the changes are necessary to ensure the 
reliability and integrity of the Nation's Bulk-Power System.
    44. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office 
of the Executive Director, email: DataClearance@ferc.gov, Phone: (202) 
502-8663, fax: (202) 273-0873]. Comments on the requirements of this 
rule may also be sent to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 
For security reasons, comments should be sent by email to OMB at oira_submission@omb.eop.gov. Please reference OMB Control No. 1902-0225, 
FERC-725 and the docket number of this proposed rulemaking in your 
submission.

IV. Environmental Analysis

    45. 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.\60\ 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.\61\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \60\ 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).
    \61\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act

    46. The Regulatory Flexibility Act of 1980 (RFA) \62\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \62\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    47. By only proposing to direct NERC, the Commission-certified ERO, 
to develop GMD Reliability Standards, this Notice of Proposed 
Rulemaking will not have a significant or substantial impact on 
entities other than NERC. The ERO develops and files with the 
Commission for approval Reliability Standards affecting the Bulk-Power 
System, which represents: (a) A total electricity demand of 830 
gigawatts (830,000 megawatts) and (b) more than $1 trillion worth of 
assets. Therefore, the Commission certifies that this Notice of 
Proposed Rulemaking will not have a significant economic impact on a 
substantial number of small entities.
    48. Any Reliability Standards proposed by NERC in compliance with

[[Page 64943]]

this rulemaking will be considered by the Commission in future 
proceedings. As part of any future proceedings, the Commission will 
make determinations pertaining to the Regulatory Flexibility Act based 
on the content of the Reliability Standards proposed by NERC.

VI. Comment Procedures

    49. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due December 24, 2012. Comments must refer to 
Docket No. RM12-22-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    50. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    51. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    52. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    53. 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 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.
    54. 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.
    55. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

    By direction of the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-26131 Filed 10-23-12; 8:45 am]
BILLING CODE 6717-01-P