2024-14667. Electric Reliability Organization Performance Assessments; Withdrawal

AGENCY:

Federal Energy Regulatory Commission.

ACTION:

Withdrawal of notice of proposed rulemaking and termination of rulemaking proceeding.

SUMMARY:

The Federal Energy Regulatory Commission (Commission) is withdrawing a notice of proposed rulemaking, which proposed to amend its regulations pursuant to section 215 of the Federal Power Act to require the Commission-certified Electric Reliability Organization (ERO) to submit performance assessments every three years; to include in its performance assessment a detailed discussion of any areas of the ERO's responsibilities and activities, or a Regional Entity's delegated functions, beyond those required by the Commission's regulations, that the Commission has identified at least 90 days prior to the expected performance assessment submission date; and to formalize the method for the ERO and Regional Entities to receive and respond to recommendations by the users, owners, and operators of the Bulk-Power System, and other interested parties for improvement of the ERO's operations, activities, oversight, and procedures.

DATES:

The notice of proposed rulemaking published in the Federal Register at 86 FR 7518 on January 29, 2021, is withdrawn as of July 5, 2024.

FOR FURTHER INFORMATION CONTACT:

Michael Gildea (Technical Information), Office of Electric Reliability, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, [phone], [e-mail]

Leigh Anne Faugust (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, [phone], [e-mail]

SUPPLEMENTARY INFORMATION:

Withdrawal of Notice of Proposed Rulemaking and Termination of Rulemaking Proceeding

1. On January 19, 2021, the Commission issued a notice of proposed rulemaking (NOPR) proposing to revise its regulations regarding the Electric Reliability Organization's (ERO) performance assessments pursuant to section 215 of the Federal Power Act (FPA).^[1] The Commission received seven comments in response to the NOPR.^[2] After reviewing the comments received, the Commission has decided to retain its existing regulations regarding the ERO's performance assessments. For the reasons set forth below, we are exercising our discretion to withdraw the NOPR and terminate this rulemaking proceeding.

I. Background

A. Commission Regulations on the ERO Performance Assessment

2. Section 215 of the FPA requires the Commission to issue regulations that, among other things, provide for the certification of an entity as the ERO if it meets certain criteria.^[3] On February 3, 2006, the Commission issued Order No. 672, which amended the Commission's regulations to implement the requirements of FPA section 215.^[4] The specific requirements for the ERO performance assessments are set out in the Commission's regulations in § 39.3(c).^[5] On July 20, 2006, the Commission certified NERC as the ERO.^[6]

B. NOPR

3. In its NOPR, the Commission proposed to amend its regulations regarding the ERO performance assessments. First, the Commission proposed to require the ERO to submit assessments of its performance every three years instead of every five years. Second, the Commission proposed to add a requirement for the ERO to include in its performance assessment a detailed discussion of any areas of the ERO's responsibilities and activities, or a Regional Entity's delegated functions, beyond those required by the Commission's regulations, that the Commission has identified at least 90 days prior to the expected performance assessment submission date. Finally, the Commission proposed to formalize the method for the ERO and Regional Entities to receive and respond to recommendations by the users, owners, and operators of the Bulk-Power System, and other interested parties for improvement of the ERO's operations, activities, oversight, and procedures.

4. The Commission explained in the NOPR that it believed that the proposals would provide better continuity in its review of the ERO's operations, activities, oversight, procedures, and evaluation of the effectiveness of each Regional Entity in the performance of delegated functions. Further, the Commission explained that shorter performance assessment cycles could provide an opportunity for timelier identification and implementation of potential improvements to ERO performance and improve the efficiency of the overall performance assessment process.^[7]

5. Notice of the NOPR was published in the Federal Register , 86 FR 7518 (Jan. 29, 2021), with comments due by March 1, 2021.

C. Comments

6. In their joint comments, NERC and the Regional Entities oppose all proposed modifications. They assert that the proposed changes would place undue burden on ERO staff by directing their focus away from key activities that “would outweigh any potential benefits.” ^[8] They explain that the existing five-year performance assessment cycle provides “greater opportunity to demonstrate evolution of the ERO than a three-year cycle” ^[9] and allows NERC initiatives to come to fruition and be evaluated.^[10] NERC and the Regional Entities explain that, due to the time it takes to coordinate with the Regional Entities, incorporate stakeholder feedback, present the draft to the NERC Board of Trustees for approval, and meet with Commission staff on specific questions, a three-year cycle would mean the process would begin two years after the prior assessment ends.^[11]

7. Regarding the proposed 90-day advance notice of Commission requested information, NERC and the Regional Entities believe that the NOPR proposal does not consider “numerous, existing opportunities for coordination and timely feedback from industry, FERC Commissioners, and Commission staff.” ^[12] They re-affirm their commitment to the existing oversight process to provide the Commission with “all information necessary for [the Commission's] evaluation” of the ERO's ongoing compliance with its certification criteria through the performance assessments.^[13]

8. Finally, NERC and the Regional Entities oppose a formal solicitation of stakeholder feedback and recommendations. They say they already provide “extensive opportunities for stakeholder feedback on ERO operations, activities, oversight, and procedures, including areas for improvement.” ^[14] NERC and the Regional Entities explain that they solicit public comment on the draft performance assessment two to three months prior to its filing—asserting that the draft performance assessment is the “best vehicle to solicit comments . . . because such a posting ensures that comments are grounded in specific activities and issues material to ERO certification and effectiveness.” ^[15]

9. WIRAB, Joint Trade Associations, Public Citizen, and Resilient Societies support the proposed changes to the Commission's regulations.^[16] The ISO/RTO Council supports the formal solicitation of public feedback.^[17] Commenters generally agree that the proposed changes would support the early identification of emerging trends, challenges, and opportunities regarding the ERO's assurance of Bulk-Power System reliability and allow necessary changes to be made in a timelier manner.^[18]

II. Discussion

10. The Commission withdraws the NOPR and terminates this proceeding. We appreciate the feedback that the Commission received in response to the NOPR. Considering NERC and the Regional Entities' concerns regarding the scope and implementation of the proposal and the increased burden on the ERO, that NERC will need to expend significant resources to address multiple Commission directives, and that the Commission will need to expend significant resources considering those responsive proposals,^[19] we do not believe that modifying the periodicity or procedural requirements for the ERO performance assessments is an efficient use of ERO or Commission resources.

11. Therefore, we exercise our discretion to withdraw the NOPR and terminate this rulemaking proceeding.^[20]

The Commission orders: The NOPR is hereby withdrawn and Docket No. RM21-12-000 is hereby terminated.

By the Commission. Commissioner Rosner is not participating.

Issued: June 27, 2024.

Debbie-Anne A. Reese,

Acting Secretary.

Footnotes

1.   Revisions to Regulations on Elec. Reliability Org. Performance Assessments, Notice of Proposed Rulemaking, 86 FR 7518 (Jan. 29, 2021), 174 FERC ¶ 61,031 (2021).

2.  The North American Electric Reliability Corporation (NERC) and Regional Entities, jointly; the Western Interconnection Regional Advisory Body (WIRAB); the ISO/RTO Council; the American Public Power Association, Edison Electric Institute, Electric Power Supply Association, the Large Public Power Council, National Rural Electric Cooperative Association, and Transmission Access Policy Study Group, jointly (Joint Trade Associations); Public Citizen, Inc. (Public Citizen); and the Foundation for Resilient Societies (Resilient Societies).

3.  16 U.S.C. 824o.

4.   Rules Concerning Certification of the Elec. Reliability Org.; and Procedures for the Establishment, Approval, and Enforcement of Elec. Reliability Standards, Order No. 672, 71 FR 8662 (Feb. 17, 2006), 114 FERC ¶ 61,104, at P 186, order on reh'g, Order No. 672-A, 114 FERC ¶ 61,328 (2006).

5.  18 CFR 39.3(c) (2023).

6.   N. Am. Elec. Reliability Corp., 116 FERC ¶ 61,062, order on reh'g and compliance, 117 FERC ¶ 61,126 (2006), aff'd sub nom. Alcoa Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009) (ERO Certification Order) (certifying NERC as the ERO responsible for the development and enforcement of mandatory Reliability Standards).

7.  NOPR, 174 FERC ¶ 61,031 at P 1.

8.  NERC and Regional Entities Joint Comments at 2.

9.   Id. at 6.

10.   Id. at 8.

11.   Id. at 11.

12.   Id. (referencing NERC and Regional Entities Joint Comments, App. A listing such opportunities ( e.g., board meetings, stakeholder meetings, and technical and Reliability Standards working groups)).

13.   Id. at 2.

14.   Id. at 13.

15.   Id. at 14.

16.   See WIRAB Comments at 3; Joint Trade Associations Comments at 3-4; Public Citizen Comments at 2-3; and Resilient Societies Comments at 1.

17.  ISO/RTO Council Comments at 2.

18.   See, e.g., WIRAB Comments at 3; Resilient Societies Comments at 4-5; Joint Trade Associations Comments at 3-4.

19.   See, e.g., Reliability Standards to Address Inverter-Based Resources, Order No. 901, 88 FR 74250 (Oct. 30, 2023), 185 FERC ¶ 61,042 (2023), (directing revisions to Reliability Standards for inverter-based resources); Transmission Sys. Planning Performance Requirements for Extreme Weather, Order No. 896, 88 FR 41262 (June 23, 2023), 183 FERC ¶ 61,191 (2023) (directing revisions to Reliability Standards for transmission system planning); N. Am. Elec. Reliability Corp., 187 FERC ¶ 61,196 (2024) (directing revisions to Reliability Standards to address generator cold weather preparedness).

20.   See, e.g., Revised Public Utility Filing Requirements for Elec. Quarterly Reports, 169 FERC ¶ 61,236 (2019) (order withdrawing NOPR and terminating rulemaking proceeding); see also, e.g., Fast-Start Pricing in Markets Operated by Reg'l Transmission Org. and Indep. Sys. Operators, 161 FERC ¶ 61,293 (2017) (order withdrawing NOPR and terminating rulemaking proceeding).