[Federal Register Volume 78, Number 143 (Thursday, July 25, 2013)]
[Proposed Rules]
[Pages 44909-44915]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-17816]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM 13-13-000]


Regional Reliability Standard BAL-002-WECC-2--Contingency Reserve

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Under section 215 of the Federal Power Act, the Federal Energy 
Regulatory Commission (Commission) proposes to approve regional 
Reliability Standard BAL-002-WECC-2 (Contingency Reserve). The North 
American Electric Reliability Corporation (NERC) and Western 
Electricity Coordinating Council (WECC) submitted the proposed regional 
Reliability Standard to the Commission for approval. The proposed WECC 
regional Reliability Standard applies to balancing authorities and 
reserve sharing groups in the WECC Region and is meant to specify the 
quantity and types of contingency reserve required to ensure 
reliability under normal and abnormal conditions. The Commission also 
proposes to approve the associated violation risk factors and violation 
severity levels, implementation plan, and effective date proposed by 
NERC and WECC. The Commission further proposes to retire the currently-
effective WECC regional Reliability Standard BAL-STD-002-0 (Operating 
Reserves) and to remove two WECC Regional Definitions, ``Non-Spinning 
Reserve'' and ``Spinning Reserve,'' from the NERC Glossary of Terms. In 
addition, the Commission proposes to direct NERC to submit an 
informational filing after the first two years of implementation of the 
regional Reliability Standard that addresses the adequacy of 
contingency reserve in the Western Interconnection.

DATES: Comments are due September 23, 2013.

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:

Andr[eacute]s L[oacute]pez Esquerra (Technical Information), Office of 
Electric Reliability, Division of Reliability Standards, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
Telephone: (202) 502-6128, Andres.Lopez@ferc.gov.
Matthew Vlissides (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, Telephone: (202) 502-8408, Matthew.Vlissides@ferc.gov.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

Issued July 18, 2013.
    1. Under section 215 of the Federal Power Act (FPA), the Commission 
proposes to approve regional Reliability Standard BAL-002-WECC-2 
(Contingency Reserve). The North American Electric Reliability 
Corporation (NERC) and Western Electricity Coordinating Council (WECC) 
submitted the proposed regional Reliability Standard to the Commission 
for approval. The proposed WECC regional Reliability Standard applies 
to balancing authorities and reserve sharing groups in the WECC Region 
and is meant to specify the quantity and types of contingency reserve 
required to ensure reliability under normal and abnormal conditions.
    2. The Commission proposes to approve the associated violation risk 
factors (VRFs) and violation severity levels (VSL), implementation 
plan, and effective date proposed by NERC and WECC. The Commission also 
proposes to retire the currently-effective WECC regional Reliability 
Standard BAL-STD-002-0 (Operating Reserves) and to remove two WECC 
Regional Definitions, ``Non-Spinning Reserve'' and ``Spinning 
Reserve,'' from the NERC Glossary of Terms.\1\ Further, the Commission 
proposes to direct NERC to submit an informational filing after the 
first two years of implementation of the regional Reliability Standard 
that addresses the adequacy of contingency reserve in the Western 
Interconnection.
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    \1\ North American Electric Reliability Corporation Definitions 
Used in the Rules of Procedure, Appendix 2 to the NERC Rules of 
Procedure (effective March 5, 2013) (NERC Glossary of Terms).
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I. Background

A. Mandatory Reliability Standards

    3. Section 215 of the FPA requires a Commission-certified Electric 
Reliability Organization (ERO) to develop mandatory and enforceable 
Reliability Standards that are subject to Commission review and 
approval.\2\ Once approved, the Reliability Standards may be enforced 
by NERC, subject to Commission oversight, or by the Commission 
independently.\3\
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    \2\ 16 U.S.C. 824o.
    \3\ 16 U.S.C. 824o(e).
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    4. A Regional Entity may develop a Reliability Standard for 
Commission approval to be effective in that region only.\4\ In Order 
No. 672, the Commission stated that:
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    \4\ 16 U.S.C. 824o(e)(4). A Regional Entity is an entity that 
has been approved by the Commission to enforce Reliability Standards 
under delegated authority from the ERO. See 16 U.S.C. 824o(a)(7) and 
(e)(4).

    As a general matter, we will accept the following two types of 
regional differences, provided they are otherwise just, reasonable, 
not unduly discriminatory or preferential and in the public 
interest, as required under the statute: (1) A regional difference 
that is more stringent than the continent-wide Reliability Standard, 
including a regional difference that addresses matters that the 
continent-wide Reliability Standard does not; and (2) a regional 
Reliability Standard that is necessitated by a physical difference 
in the Bulk-Power System.\5\
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    \5\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval and 
Enforcement of Electric Reliability Standards, Order No. 672, FERC 
Stats. & Regs. ] 31,204, at P 291, order on reh'g, Order No. 672-A, 
FERC Stats. & Regs. ] 31,212 (2006).


[[Page 44910]]


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    5. On April 19, 2007, the Commission accepted delegation agreements 
between NERC and each of the eight Regional Entities.\6\ In the order, 
the Commission accepted WECC as a Regional Entity.
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    \6\ North American Electric Reliability Corp., 119 FERC ] 
61,060, order on reh'g, 120 FERC ] 61,260 (2007).
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B. NERC Reliability Standard BAL-002-1 (Disturbance Control 
Performance)

    6. In Order No. 693, the Commission approved NERC Reliability 
Standard BAL-002-0.\7\ On January 10, 2011, the Commission approved a 
revised version of the NERC Reliability Standard, BAL-002-1 
(Disturbance Control Performance), which NERC developed and submitted 
to address directives contained in Order No. 693.\8\ The purpose of 
NERC Reliability Standard BAL-002-1 is to ensure that a balancing 
authority is able to use its contingency reserve to balance resources 
and demand and return Interconnection frequency within defined limits 
following a Reportable Disturbance.\9\
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    \7\ Mandatory Reliability Standards for the Bulk-Power System, 
Order No. 693, FERC Stats. & Regs. ] 31,242, order on reh'g, Order 
No. 693-A, 120 FERC ] 61,053 (2007).
    \8\ North American Electric Reliability Corp., 134 FERC ] 61,015 
(2011).
    \9\ The NERC Glossary of Terms defines Contingency Reserve as 
``[t]he provision of capacity deployed by the Balancing Authority to 
meet the Disturbance Control Standard (DCS) and other NERC and 
Regional Reliability Organization contingency requirements.'' The 
NERC Glossary of Terms defines Reportable Disturbance as ``[a]ny 
event that causes an [Area Control Error (ACE)] change greater than 
or equal to 80% of a Balancing Authority's or reserve sharing 
group's most severe contingency. The definition of a reportable 
disturbance is specified by each Regional Reliability Organization. 
This definition may not be retroactively adjusted in response to 
observed performance.''
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C. WECC Regional Reliability Standard BAL-STD-002-0

    7. On June 8, 2007, the Commission approved WECC regional 
Reliability Standard BAL-STD-002-0, which is currently in effect.\10\ 
The Commission stated that regional Reliability Standard BAL-STD-002-0 
was more stringent than the NERC Reliability Standard BAL-002-0 because 
the WECC regional Reliability Standard required: (1) A more stringent 
minimum reserve requirement and (2) restoration of contingency reserves 
within 60 minutes, as opposed to the 90-minute restoration period 
required by the NERC Reliability Standard BAL-002-0.\11\ The Commission 
directed WECC to make minor modifications to regional Reliability 
Standard BAL-STD-002-0. For example, the Commission determined that: 
(1) Regional definitions should conform to definitions set forth in the 
NERC Glossary of Terms unless a specific deviation has been justified; 
and (2) documents that are referenced in the Reliability Standard 
should be attached to the Reliability Standards. The Commission also 
found that it is important that regional Reliability Standards and NERC 
Reliability Standards achieve a reasonable level of consistency in 
their structure so that there is a common understanding of the 
elements. Finally, the Commission directed WECC to address stakeholder 
concerns regarding ambiguities in the terms ``load responsibility'' and 
``firm transaction.'' \12\
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    \10\ North American Electric Reliability Corp., 119 FERC ] 
61,260 (2007).
    \11\ Id. P 53.
    \12\ Id. P 56.
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D. Remanded WECC Regional Reliability Standard BAL-002-WECC-1

    8. On March 25, 2009, NERC submitted to the Commission for approval 
WECC regional Reliability Standard BAL-002-WECC-1 (Contingency 
Reserves). In Order No. 740, the Commission remanded regional 
Reliability Standard BAL-002-WECC-1.\13\ In Order No. 740, the 
Commission identified five issues with remanded regional Reliability 
Standard BAL-002-WECC-1: (1) The restoration period for contingency 
reserve; (2) the calculation of minimum contingency reserve; (3) the 
use of firm load to meet the contingency reserve Requirement; (4) the 
use of demand-side management as a resource; and (5) miscellaneous 
directives.\14\
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    \13\ Version One Regional Reliability Standard for Resource and 
Demand Balancing, Order No. 740, 75 FR 65,964, 133 FERC ] 61,063 
(2010).
    \14\ Order No. 740, 133 FERC ] 61,063 at PP 26, 39, 49, 60, 66.
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1. Restoration Period for Contingency Reserve
    9. The Commission stated that, while the currently-effective WECC 
regional Reliability Standard BAL-STD-002-0 requires restoration of 
contingency reserve within 60 minutes, the remanded WECC regional 
Reliability Standard BAL-002-WECC-1 would have extended the restoration 
period to 90 minutes. The Commission determined that NERC and WECC did 
not justify the extension of the reserve restoration period from 60 
minutes to 90 minutes or that such an extension created an acceptable 
level of risk within the Western Interconnection.
2. Calculation of Minimum Contingency Reserve
    10. The Commission stated that WECC regional Reliability Standard 
BAL-STD-002-0 currently requires that minimum contingency reserve must 
equal the greater of: (1) The loss of generating capacity due to forced 
outages of generation or transmission equipment that would result from 
the most severe single contingency or (2) the sum of five percent of 
load responsibility served by hydro generation and seven percent of the 
load responsibility served by thermal generation. The remanded WECC 
regional Reliability Standard BAL-002-WECC-1 included a similar 
requirement, except that instead of basing the calculation of minimum 
contingency reserve on the sum of five percent of load responsibility 
served by hydro generation and seven percent of the load responsibility 
served by thermal generation, the minimum contingency reserve 
calculation would be based on the sum of three percent of load 
(generation minus station service minus net actual interchange) plus 
three percent of net generation (generation minus station service).
    11. WECC submitted eight hours of data from each of the four 
operating seasons (summer, fall, winter, and spring, both on and off-
peak), which demonstrated that the proposed methodology for calculating 
minimum contingency reserve would reduce total contingency reserve 
required in the Western Interconnection for each of the eight hours 
assessed when compared with the methodology in the currently-effective 
WECC regional Reliability Standard BAL-STD-002-0.
    12. The Commission accepted WECC's proposal, finding that ``WECC's 
proposed calculation of minimum contingency reserves is more stringent 
than the national requirement and could be part of a future proposal 
that the Commission could find to be just, reasonable, not unduly 
discriminatory or preferential, and in the public interest.'' \15\ The 
Commission observed, however, that ``WECC also states that the proposed 
regional Reliability Standard does not excuse any non-performance with 
the continent-wide Disturbance Control Standard, which requires each 
balancing authority or reserve sharing group to activate sufficient 
contingency reserve to comply with the Disturbance Control Standard.'' 
\16\
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    \15\ Id. P 39.
    \16\ Id.
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    13. The Commission also stated that, if WECC resubmitted its 
proposed methodology for calculating minimum contingency reserve, WECC 
and NERC could support its proposal with ``audits specifically focused 
on contingency

[[Page 44911]]

reserves and whether the balancing authorities are meeting the adequacy 
and deliverability requirements . . . [t]his auditing also could 
address the concerns raised by some entities in WECC that the original 
eight hours of data provided in NERC's petition is insufficient to 
demonstrate that the proposed minimum contingency reserve requirements 
are sufficiently stringent to ensure that entities within the Western 
Interconnection will meet the requirements of NERC's continent-wide 
Disturbance Control Standard, BAL-002-0.'' \17\
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    \17\ Id. P 40.
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3. Use of Firm Load To Meet Contingency Reserve Requirement
    14. In the Notice of Proposed Rulemaking preceding Order No. 740, 
the Commission stated that, unlike the currently-effective regional 
Reliability Standard BAL-STD-002-0, the remanded regional Reliability 
Standard BAL-002-WECC-1 was not technically sound because it allowed 
balancing authorities and reserve sharing groups within WECC to use 
firm load to meet their minimum contingency reserve requirements once 
the reliability coordinator declared a capacity or energy 
emergency.\18\ However, in Order No. 740 the Commission accepted WECC's 
proposal finding that, although remanded regional Reliability Standard 
BAL-002-WECC-1 allowed balancing authorities and reserve sharing groups 
to use ``Load, other than Interruptible Load, once the Reliability 
Coordinator has declared a capacity or energy emergency,'' these 
entities would not be authorized to shed firm load unless the 
applicable reliability coordinator had issued a level 3 energy 
emergency alert pursuant to Reliability Standard EOP-002-2.1. The 
Commission directed WECC to develop revised language to clarify this 
point.\19\
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    \18\ Id. P 43.
    \19\ Id. PP 48-49.
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4. Demand-Side Management as a Resource
    15. The Commission determined that remanded regional Reliability 
Standard BAL-002-WECC-1 did not allow demand-side management that is 
technically capable of providing this service to be used as a resource 
for contingency reserve. The Commission directed WECC to develop 
modifications that would explicitly provide that demand-side management 
technically capable of providing this service may be used as a resource 
for both spinning and non-spinning contingency reserve.\20\
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    \20\ Id. P 61.
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5. Miscellaneous Directives
    16. The Commission directed WECC to consider comments regarding the 
meaning of the term ``net generation.'' The Commission also directed 
WECC to consider comments stating that the WECC regional Reliability 
Standard did not assign any responsibility or obligations on generator 
owners and generator operators, and that balancing authorities may be 
required to carry a disproportionate share of the contingency reserve 
obligation within the Western Interconnection.\21\
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    \21\ Id. P 66.
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E. Proposed Regional Reliability Standard BAL-002-WECC-2

    17. On April 12, 2013, NERC and WECC petitioned the Commission to 
approve proposed regional Reliability Standard BAL-002-WECC-2 and the 
associated violation risk factors and violation severity levels, 
effective date, and implementation plan. The petition also requests 
retirement of the currently-effective WECC regional Reliability 
Standard BAL-STD-002-0 and removal of two WECC Regional Definitions, 
``Non-Spinning Reserve'' and ``Spinning Reserve,'' from the NERC 
Glossary of Terms. The petition states that the proposed WECC regional 
Reliability Standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest because it satisfies the 
factors set forth in Order No. 672, which the Commission applies when 
reviewing a proposed Reliability Standard.\22\
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    \22\ Petition, Exhibit A.
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    18. The petition states that the Resource and Demand Balancing 
(BAL) group of Reliability Standards ensure that resources and demand 
are balanced to maintain Interconnection frequency within limits. The 
petition states that the purpose of NERC Reliability Standard BAL-002-1 
(Disturbance Control Performance) is to ensure the balancing authority 
is able to use contingency reserve to balance resources and demand and 
return Interconnection frequency within defined limits following a 
Reportable Disturbance. The petition states that the purpose of the 
proposed WECC regional Reliability Standard BAL-002-WECC-2 is to 
provide a regional Reliability Standard that specifies the quantity and 
types of contingency reserve required to ensure reliability under 
normal and abnormal conditions.\23\
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    \23\ Petition at 2.
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    19. The petition states that the proposed regional Reliability 
Standard addresses the five issues identified in Order No. 740, which 
remanded the previously proposed WECC regional Reliability Standard 
BAL-002-WECC-1.\24\
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    \24\ Id. at 12-18.
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    20. First, the petition states that proposed regional Reliability 
Standard BAL-002-WECC-2, Requirement R1, includes a 60-minute 
restoration period for contingency reserve, which is the same as the 
currently-effective regional WECC Reliability Standard BAL-STD-002-
0.\25\
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    \25\ Id. at 12.
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    21. Second, the petition includes two-years of additional data to 
support the method for calculating minimum contingency reserve proposed 
in WECC regional Reliability Standard BAL-002-WECC-2, Requirement R1, 
which is the same as the calculation proposed and accepted by the 
Commission in the remanded WECC regional Reliability Standard BAL-002-
WECC-1.\26\
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    \26\ Id. at 13-16.
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    22. Third, the petition states that the proposed WECC regional 
Reliability Standard BAL-002-WECC-2, Requirement R1, was modified to 
clarify that balancing authorities and reserve sharing groups within 
WECC are subject to the same restrictions regarding the use of firm 
load for contingency reserve as balancing authorities elsewhere 
operating under the NERC Reliability Standards. The petition states 
that it has clarified the connection to the Energy Emergency Level 3 by 
incorporating language from Reliability Standard EOP-002-2.1, 
Attachment 1, Section B, into proposed WECC regional Reliability 
Standard BAL-002-WECC-2, Requirement R1.\27\
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    \27\ Id. at 18.
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    23. Fourth, the petition states that proposed WECC regional 
Reliability Standard BAL-002-WECC-2, Requirement R1, was modified to 
explicitly provide that demand-side management technically capable of 
providing the service may be used as a resource for contingency 
reserve.\28\
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    \28\ Id. at 16-18.
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    24. Fifth, the petition states that proposed WECC regional 
Reliability Standard BAL-002-WECC-2 replaces the term ``net 
generation'' with the phrase ``generating energy values average over 
each Clock Hour.'' The petition states that the proposed regional 
Reliability Standard also includes a reference to Opinion No. 464, 
which addresses the issue of behind-the-meter generation, in response 
to comments raised in the Order No. 740

[[Page 44912]]

rulemaking.\29\ The petition also states that proposed WECC regional 
Reliability Standard BAL-002-WECC-2 allows for impacted balancing 
authorities and reserve sharing groups to enter into transactions to 
provide contingency reserve for another balancing authority or procure 
contingency reserve from another balancing authority to more equitably 
allocate generation for purposes of the reserve calculation. The 
petition further states that the NERC Functional Model, Version 5, more 
closely aligns the tasks in the proposed WECC regional Reliability 
Standard BAL-002-WECC-2 with balancing authorities than to generator 
operators.\30\


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    \29\ California Indep. Sys. Operation Corp., Opinion No. 464, 
104 FERC ] 61,196 (2003).
    \30\ NERC, Reliability Functional Model, Version 5 (approved May 
2010), available at http://www.nerc.com/files/Functional_Model_V5_Final_2009Dec1.pdf.
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II. Discussion

A. Proposed WECC Regional Reliability Standard BAL-002-WECC-2

    25. Pursuant to FPA section 215(d)(2), we propose to approve WECC 
regional Reliability Standard BAL-002-WECC-2 as just, reasonable, not 
unduly discriminatory or preferential, and in the public interest. For 
applicable entities in the WECC Region, proposed WECC regional 
Reliability Standard BAL-002-WECC-2 specifies the quantity and types of 
contingency reserve required to ensure reliability under normal and 
abnormal conditions. Proposed WECC regional Reliability Standard is 
more stringent than the NERC Reliability Standard BAL-002-1 because the 
proposed regional Reliability Standard requires applicable entities to 
restore contingency reserve within 60 minutes following the Disturbance 
Recovery Period while the NERC Reliability Standard only requires 
restoration of contingency reserve within 90 minutes. In addition, the 
method for calculating minimum contingency reserve in the proposed 
regional Reliability Standard is more stringent than Requirement R3.1 
in the NERC Reliability Standard BAL-002-1 because it requires minimum 
contingency reserve levels that will be at least equal to the NERC 
Reliability Standard minimum, equal to the most severe single 
contingency, and more often will be greater.\31\ We also find that NERC 
and WECC addressed the Commission's directives in Order No. 740.
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    \31\ As stated in Order No. 740, the proposed WECC regional 
Reliability Standard does not excuse non-performance with NERC 
Reliability Standard BAL-002-1. Order No. 740, 133 FERC ] 61,063 at 
P 39.
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B. New Methodology of Calculating Minimum Contingency Reserve

    26. While we propose to approve WECC regional Reliability Standard 
BAL-002-WECC-2, the Commission proposes to direct NERC to submit an 
informational filing following implementation of the proposed regional 
Reliability Standard that addresses the adequacy of contingency reserve 
in the Western Interconnection. Proposed WECC regional Reliability 
Standard BAL-002-WECC-2 includes a new methodology for calculating 
minimum contingency reserve based on the greater of the most severe 
single contingency or the sum of three percent of load plus three 
percent of net generation.
    27. In the current WECC regional Reliability Standard BAL-STD-002-
0, minimum contingency reserve is based on the greater of the most 
severe single contingency or the sum of five percent of load 
responsibility served by hydro generation and seven percent of the load 
responsibility served by thermal generation. In approving the 
currently-effective regional Reliability Standard, the Commission noted 
the importance WECC attached to the current methodology for calculating 
minimum contingency reserve to reliability in the Western 
Interconnection:

    According to WECC, while applicable users, owners and operators 
in the Western Interconnection must comply with BAL-002-0, the 
corresponding regional Reliability Standard goes further and 
requires each balancing authority in the West to provide a minimum 
reserve of five percent of the loads served by hydro generation and 
seven percent of the loads served by thermal generation. WECC states 
that this regional minimum reserve requirement was developed to 
assure that there would be sufficient generation to sustain 
acceptable power system performance for various contingencies.\32\
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    \32\ North American Electric Reliability Corp., 119 FERC ] 
61,260 at P 47.

    28. To support the proposed new methodology for calculation of 
minimum contingency reserve based on three percent of load plus three 
percent of net generation, WECC provided ``two years' worth of 
additional data showing the amount of contingency reserves that would 
be calculated for each Balancing Authority and Reserve Sharing Group 
under the proposed methodology.'' \33\ WECC states that ``during the 
two-year period of 2010-2012, the average increase/decrease in 
Contingency Reserve required under the existing methodology juxtaposed 
to the proposed methodology was an average decrease of 137 MW across 
the Western Interconnection.'' \34\ WECC explains that the 137 MW 
decrease represents ``.000932 of WECC's peak load and .001934 of WECC's 
minimum load'' within that two-year period.\35\ Based on the data, WECC 
states that ``implementation of the proposed methodology will, on 
average, reduce the amount of Contingency Reserve held within the 
Interconnection; however, the average change is so small in comparison 
to the load served within the Interconnection that it should have no 
adverse impact on reliability.'' \36\
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    \33\ Petition at 13.
    \34\ Id. at 15.
    \35\ Id.
    \36\ Id. at 16.
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    29. While the data submitted in the petition shows an average 
decrease of 137 MW, the data also shows that the largest single 
decrease in contingency reserve equaled 826 MW during the two-year 
study period when comparing the current and proposed methodologies.\37\ 
At the time of the 826 MW decrease (i.e., 9/15/10 at 14:00) the 
contingency reserve value using the current methodology for calculating 
minimum contingency reserve was 8259 MW versus 7434 MW using the 
proposed methodology. The 826 MW decrease represents a 10 percent 
decrease in contingency reserve at that time interval.\38\ The data 
also show a widening gap over time (e.g., a difference of 114 MW at the 
beginning date but 192 MW at the end date).\39\
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    \37\ Petition, Exhibit G (data point at date/time interval 9/15/
10 at 14:00).
    \38\ Petition at 16.
    \39\ The 114 MW and 192 MW values are calculated by plotting a 
trend line on the contingency reserve data submitted by WECC using 
the existing methodology and plotting a trend line on the 
contingency reserve data submitted by WECC using the proposed 
methodology. The initial difference between the two trend lines is 
114 MW while the difference at the end of the trend lines is 192 MW.
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    30. Recognizing that the new methodology will likely result in 
lower average contingency reserve levels, the Commission proposes to 
direct that NERC submit an informational filing to the Commission 
relating to contingency reserve levels in the Western Interconnection 
after the first two years of implementation of the proposed regional 
Reliability Standard. The Commission proposes to direct NERC, in 
consultation with WECC, to provide an assessment of minimum contingency 
reserve levels in the Western Interconnection following implementation 
of the new methodology. The informational filing should assess whether 
the new methodology for calculating minimum

[[Page 44913]]

contingency reserve levels has had an adverse impact on reliability in 
the Western Interconnection. The informational filing should include 
the data that NERC and WECC use to assess the sufficiency of the 
minimum contingency reserve levels under the new methodology. Such data 
could include, but need not be limited to an increase or decrease in 
the ``Average Percent Non-Recovery Disturbance Control Standards (DCS) 
Events,'' \40\ an increase or decrease in the average Contingency 
Reserve Restoration Period, an increase or decrease in the number of 
events larger than the minimum contingency reserve levels, and any 
other information that NERC or WECC deem relevant. The Commission 
proposes to direct NERC to submit the informational filing to the 
Commission 90 days after the end of the two-year period following 
implementation. NERC may choose to submit the informational filing 
sooner if NERC identifies issues with contingency reserve levels in the 
Western Interconnection that may require immediate action. The 
Commission will review the informational filing to determine whether 
any action is necessary. The Commission seeks comment from NERC, WECC, 
and interested entities on the proposed informational filing.
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    \40\ See NERC, Metric AL2-4 (Average Percent Non-Recovery of 
Disturbance Control Standard (DCS) Events), available at http://www.nerc.com/pa/RAPA/ri/Pages/DCSEvents.aspx.
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C. Violation Risk Factors and Violation Severity Levels

    31. The petition states that each Requirement of the proposed WECC 
regional Reliability Standard BAL-002-WECC-2 includes one violation 
risk factor and one violation severity level and that the ranges of 
penalties for violations will be based on the sanctions table and 
supporting penalty determination process described in the Commission-
approved NERC Sanctions Guideline. The Commission proposes to approve 
the proposed violation risk factors and violation severity levels for 
the Requirements of WECC regional Reliability Standard BAL-002-WECC-2 
as consistent with the Commission's established guidelines.\41\
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    \41\ North American Electric Reliability Corp., 135 FERC ] 
61,166 (2011).
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D. Removal of Terms From NERC Glossary of Terms

    32. The petition states that proposed WECC regional Reliability 
Standard BAL-002-WECC-2 replaces the terms ``Spinning Reserve'' with 
``Operating Reserve-Spinning'' and ``Non-Spinning Reserve'' with 
``Operating Reserve-Supplemental'' to ensure comparable treatment of 
demand-side management with conventional generation, or any other 
technology, and to allow demand-side management to be considered as a 
resource for contingency reserve. The petition states that Operating 
Reserve-Spinning and Operating Reserve-Supplemental have glossary 
definitions that are inclusive of demand-side management, including 
controllable load. Accordingly, the petition seeks revision of the NERC 
Glossary of Terms to remove the two WECC Regional Definitions, Non-
Spinning Reserve and Spinning Reserve. With the removal of Non-Spinning 
Reserve and Spinning Reserve from the proposed WECC regional 
Reliability Standard BAL-002-WECC-2, the Commission proposes to approve 
removal of those WECC Regional Definitions from the NERC Glossary of 
Terms.

E. Implementation Plan and Effective Date

    33. The petition proposes that WECC regional Reliability Standard 
BAL-002- WECC-2 become effective on the first day of the third quarter 
following applicable regulatory approval. The petition states that the 
proposed WECC regional Reliability Standard may require execution of 
contracts by some applicable entities before implementation can occur, 
and the proposed effective date allows time for applicable entities to 
finalize needed contracts. The petition also proposes to retire the 
currently-effective WECC regional Reliability Standard BAL-STD-002-0 on 
the proposed effective date. The Commission proposes to accept the 
petition's implementation plan and effective date for the proposed WECC 
regional Reliability Standard BAL-002-WECC-2.

III. Information Collection Statement

    34. The following collection of information contained in this 
Notice of Proposed Rulemaking is subject to review by the Office of 
Management and Budget (OMB) under section 3507(d) of the Paperwork 
Reduction Act of 1995 (PRA).\42\ OMB's regulations require approval of 
certain information collection requirements imposed by agency 
rules.\43\ 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 a 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.
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    \42\ 44 U.S.C. 3507(d).
    \43\ 5 CFR 1320.11.
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    35. We solicit comments on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the burden estimates, ways to enhance the quality, utility, 
and clarity of the information to be collected or retained, and any 
suggested methods for minimizing respondents' burden, including the use 
of automated information techniques. Specifically, the Commission asks 
that any revised burden or cost estimates submitted by commenters be 
supported by sufficient detail to understand how the estimates are 
generated.
    36. Public Reporting Burden: The burden and cost estimates below 
are based on the need for applicable entities to revise documentation, 
already required by the current WECC regional Reliability Standard BAL-
STD-002-0, to reflect certain changes in the proposed WECC regional 
Reliability Standard BAL-002-WECC-2. Our estimates are based on the 
NERC Compliance Registry as of May 30, 2013, which indicates that 36 
balancing authorities and reserve sharing groups are registered within 
WECC.

[[Page 44914]]



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                                                                                                          Number of
                                                                                         Number of          annual       Average burden  Estimated total
                        Improved requirement                               Year         respondents     responses  per     hours per      annual burden
                                                                                            \44\          respondent        response          hours
                                                                     ...............             (1)              (2)              (3)      (1)*(2)*(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Update Existing Documentation to Conform with Proposed Regional                   1               36                1           \45\ 1               36
 Reliability Standard..............................................
                                                                    ------------------------------------------------------------------------------------
    Total..........................................................  ...............  ...............  ...............  ...............              36
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated Total Annual Burden Hours for Collection: (Compliance/
Documentation) = 36 hours.
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    \44\ NERC balancing authorities and reserve sharing groups are 
responsible for the improved requirement. Further, if a single 
entity is registered as both a balancing authority and reserve 
sharing group, that entity is counted as one unique entity.
    \45\ The Commission bases the hourly reporting burden on the 
time for an engineer to implement the Requirements of the proposed 
rule.
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    Costs to Comply with PRA:
     Year 1: $2,160.
     Year 2 and ongoing: $0.
    37. Year 1 costs include updating existing documentation, already 
required by the current WECC regional Reliability Standard BAL-STD-002-
0, to reflect changes in the proposed WECC regional Reliability 
Standard BAL-002-WECC-2. For the burden category above, the cost is 
$60/hour (salary plus benefits) for an engineer.\46\ The estimated 
breakdown of annual cost is as follows:
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    \46\ Labor rates from Bureau of Labor Statistics (BLS) (http://bls.gov/oes/current/naics2_22.htm). Loaded costs are BLS rates 
divided by 0.703 and rounded to the nearest dollar (http://www.bls.gov/news.release/ecec.nr0.htm).

 Year 1
    [cir] Update Existing Documentation to Conform with Proposed 
Regional Reliability Standard: 36 entities * (1 hours/response * $60/
hour) = $2,160.
    The Commission seeks comment on the costs estimates to comply with 
the paperwork requirements in the proposed regional Reliability 
Standard.
    Title: FERC-725E, Mandatory Reliability Standards--WECC (Western 
Electric Coordinating Council)
    Action: Proposed Collection of Information
    OMB Control No: 1902-0246
    Respondents: Business or other for-profit, and not-for-profit 
institutions.
    Frequency of Responses: One-time.
    Necessity of the Information: The proposed regional Reliability 
Standard BAL-002-WECC-2, if adopted, would implement the Congressional 
mandate of the Energy Policy Act of 2005 to develop mandatory and 
enforceable Reliability Standards to better ensure the reliability of 
the nation's Bulk-Power System. Specifically, the proposal ensures that 
balancing authorities and reserve sharing groups in the WECC Region 
have the quantity and types of contingency reserve required to ensure 
reliability under normal and abnormal conditions.
    Internal review: The Commission has reviewed the proposed regional 
Reliability Standard BAL-002-WECC-2 and made a determination 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 estimates associated with 
the information requirements.
    38. 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, email: DataClearance@ferc.gov, phone: 
(202) 502-8663, fax: (202) 273-0873].
    39. Comments concerning the information collections proposed in 
this Notice of Proposed Rulemaking 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 email to OMB at the following email address: oira_submission@omb.eop.gov. Please reference OMB Control Number 1902-0244 
and the docket numbers of this Notice of Proposed Rulemaking (Docket 
No. RM13-13-000) in your submission.

IV. Environmental Analysis

    40. 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.\47\ 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.\48\ The actions proposed here 
fall within this categorical exclusion in the Commission's regulations.
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    \47\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 ] 30,783 (1987).
    \48\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act

    41. The Regulatory Flexibility Act of 1980 (RFA) \49\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
As discussed above, proposed regional Reliability Standard BAL-002-
WECC-2 would apply to 36 registered balancing authorities and reserve 
sharing Groups in the NERC Compliance Registry. Comparison of the NERC 
Compliance Registry with data submitted to the Energy Information 
Administration on Form EIA-861 indicates that, of the 36 registered 
balancing authorities and reserve sharing groups, two may qualify as 
small entities.\50\
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    \49\ 5 U.S.C. 601-612.
    \50\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act (SBA), which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. See 
15 U.S.C. 632 (2006). According to the Small Business 
Administration, an electric utility is defined as ``small'' if, 
including its affiliates, it is primarily engaged in the generation, 
transmission, and/or distribution of electric energy for sale and 
its total electric output for the preceding fiscal year did not 
exceed 4 million megawatt hours.
---------------------------------------------------------------------------

    42. The Commission estimates that, on average, each of the two 
affected small entities will have an estimated cost of $60 in Year 1 
and no further ongoing costs. These figures are based on information 
collection costs plus additional costs for compliance.
    43. The Commission does not consider this to be a significant 
economic impact for small entities because it should not represent a 
significant percentage of the operating

[[Page 44915]]

budget. Accordingly, the Commission certifies that this proposed 
rulemaking will not have a significant economic impact on a substantial 
number of small entities. The Commission seeks comment on this 
certification.

VI. Comment Procedures

    44. 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 September 23, 2013. Comments must refer to 
Docket No. RM13-13-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    45. 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.
    46. 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.
    47. 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

    48. 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.
    49. 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.
    50. 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. 2013-17816 Filed 7-24-13; 8:45 am]
BILLING CODE 6717-01-P