Demand and Energy Data Reliability Standard

AGENCY:

Federal Energy Regulatory Commission, DOE.

ACTION:

Final rule.

SUMMARY:

The Commission approves Demand and Energy Data Reliability Standard MOD-031-1 developed by the North American Electric Reliability Corporation (NERC), which the Commission has certified as the Electric Reliability Organization responsible for developing and enforcing mandatory Reliability Standards. In addition, the Commission directs NERC to develop a clarifying modification to the Reliability Standard.

DATES:

This rule will become effective April 27, 2015.

FOR FURTHER INFORMATION CONTACT:

Susan Morris (Technical Information), Office of Electric Reliability, Division of Reliability Standards and Security, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-6803, Susan.Morris@ferc.gov

Robert T. Stroh (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-8473, Robert.Stroh@ferc.gov.

SUPPLEMENTARY INFORMATION:

1. Pursuant to section 215(d) of the Federal Power Act (FPA), the Commission approves Reliability Standard MOD-031-1 (Demand and Energy Data) developed by the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO). Reliability Standard MOD-031-1 provides authority for planners and operators to collect demand, energy and related data to support reliability studies and assessments. In addition, the Commission approves NERC's proposed definitions for the terms Demand Side Management and Total Internal Demand. The Commission also approves the associated implementation plan, violation risk factors and violation severity levels, and NERC's proposed retirement of the currently-effective Reliability Standards MOD-016-1.1, MOD-017-0.1, MOD-018-0, MOD-019-0.1, and MOD-021-1 (Existing MOD C Standards).

2. Further, pursuant to section 215(d)(5) of the FPA, the Commission directs NERC to (1) develop a modification to Reliability Standard MOD-031-1 to clarify certain obligations to provide data to the Regional Entity and (2) consider the compliance obligations of an applicable entity upon receipt of a data request that seeks confidential information.

I. Background

3. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards, which are subject to Commission review and approval. Once approved, the Reliability Standards are enforced by the ERO, subject to Commission oversight, or by the Commission independently. In 2006, NERC submitted the initial version of Reliability Standards MOD-016-1.1, MOD-017-0.1, MOD-018-0, MOD-019-0.1, MOD-020-0, and MOD-021-1. The Existing MOD C Standards were designed to help ensure that historical and forecasted demand and energy data are available for past event validation and future system assessment. In particular, the Existing MOD C Standards, along with Reliability Standard MOD-020-0, require the collection of actual and forecast demand data necessary to analyze the resource needs to serve peak demand while maintaining a sufficient margin to address operating events. In Order No. 693, the Commission approved the Existing MOD C Standards and Reliability Standard MOD-020-0. In addition, the Commission directed NERC to develop certain modifications to the standards.

II. NERC Petition and NOPR

4. In its petition, NERC stated that Reliability Standard MOD-031-1 will provide planners and operators access to actual and forecast demand and energy data, as well as other related information, needed to perform resource adequacy studies. NERC explained that the proposed Reliability Standard also supports the continued development of the reliability assessments prepared by NERC. NERC stated that the proposed Reliability Standard improves the Existing MOD C Standards by: (1) Streamlining them to clarify data collection requirements; (2) including transmission planners as applicable entities that must report demand and energy data; (3) requiring applicable entities to report weather normalized annual peak hour actual demand data from the previous year to allow for meaningful comparison with forecasted values; and (4) requiring applicable entities to provide an explanation of how their forecasts compare to actual prior year data.

5. Reliability Standard MOD-031-1 contains four requirements. Requirement R1 provides that each planning coordinator or balancing authority that identifies a need for the collection of demand and energy data must develop and issue a data request for such data to the relevant entities in its area. The requirement mandates that the data request identify: (i) The entities responsible for providing the data; (ii) the data to be provided by each entity; and (iii) the schedule for providing the data. Requirement R2 obligates the entities identified in a Requirement R1 data request to provide the requested data to their planning coordinator or balancing authority. Requirement R3 requires that the planning coordinator or the balancing authority provide the data collected under Requirement R2 to their Regional Entity, if requested, to facilitate NERC's development of reliability assessments. Requirement R4 requires entities to share their demand and energy data with any applicable entity that demonstrates a reliability need for such data.

6. On September 18, 2014, the Commission issued a Notice of Proposed Rulemaking (NOPR) proposing to approve Reliability Standard MOD-031-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission also requested comments on the collection of demand and energy data. Specifically, the Commission sought comments on: (1) The Commission's understanding that while a planning coordinator or balancing authority may collect demand and energy forecast data under a tariff or other arrangement, the planning coordinator or balancing authority always retains the option to seek the necessary data through a Requirement R1 data request if, for example, the data are not forthcoming through other means; and (2) whether a planning coordinator or balancing authority that receives data through alternative mechanisms remains obligated to provide such data (i.e., within the scope of Requirement R1) to a Regional Entity upon request, as set forth in Requirement R3.

Comments

7. Comments on the NOPR were submitted by NERC, Edison Electric Institute (EEI), ISO New England, Inc. (ISO New England), International Transmission Company d/b/a ITC Transmission, Michigan Electric Transmission Company, LLC, ITC Midwest LLC, and ITC Great Plains, LLC (collectively, “ITC Companies”), PacifiCorp, and Idaho Power Company (Idaho Power).

8. NERC, EEI, ISO New England support the Commission's proposed approval of MOD-031-1, and ITC Companies “does not object” to the standard. NERC and other commenters provide responses to the Commission's questions regarding the collection of demand and energy data, as discussed below.

9. NERC, EEI, Idaho Power, and ISO New England confirm the Commission's understanding that the planning coordinator or balancing authority retains the option to seek the necessary data through a Requirement R1 data request. NERC states that the Reliability Standard provides planning coordinators and balancing authorities the authority to issue data requests to compel applicable entities to provide the demand and energy data necessary to conduct reliability assessments. According to NERC, the Reliability Standard does not require planning coordinators and balancing authorities to issue such data requests if they have alternative means of obtaining or developing that data but planning coordinators and balancing authorities may always use the authority provided by the Reliability Standard as a backstop to ensure they obtain complete and accurate data.

10. With respect to the issue of whether a planning coordinator or balancing authority that receives data through alternative mechanisms remains obligated to provide such data to a Regional Entity upon request, NERC states that the intent of Requirement R3 was to require all planning coordinators and balancing authorities to provide the necessary demand and energy data to their respective Regional Entities to support the ERO development of seasonal and long-term reliability assessments. NERC commits to modifying the language of Requirement R3 in its standard development process to clarify that planning coordinators and balancing authorities must provide their demand and energy data to their Regional Entity, upon request, whether that data is collected pursuant to the proposed Reliability Standard or through alternative arrangements.

11. With regard to the Commission's question about the obligations of a planning coordinator or balancing authority to share data gathered or obtained through alternative mechanisms, EEI comments that there is no obligation to require a planning coordinator or balancing authority to share such data in a similar manner as required by Requirement R3. EEI adds that it is not aware of any reason that might motivate independent system operators (ISOs) or regional transmission organizations (RTOs) (in their role as planning coordinators or balancing authorities) to withhold such information from the Regional Entity. PacifiCorp agrees with EEI on this issue and favors a finding that Requirement R3 should not apply if the planning coordinator or balancing authority receives data through alternative means.

12. In contrast, Idaho Power and ISO New England assert that a planning coordinator or balancing authority that receives data within the scope of Requirement R1 through alternative mechanisms (as opposed to a data request) remains obligated to provide the data to a Regional Entity upon request pursuant to Requirement R3.

13. EEI also requests that the Commission clarify potential conflicts between a transmission provider's obligation to provide data under Reliability Standard MOD-031-1 and its confidentiality obligations under the Open Access Transmission Tariff (OATT) or other confidentiality or nondisclosure restrictions. ITC Companies raises a concern with the inclusion of transmission planners as entities from whom the types of data specified may be requested because, according to ITC Companies, many transmission planners have delegated the collection of data to the ISO or RTO in which they are located.

III. Discussion

14. Pursuant to section 215(d)(2) of the FPA, the Commission approves Reliability Standard MOD-031-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. We also approve the new and modified glossary definitions, implementation plan, associated violation risk factors and violation severity levels as well as the retirement of the Existing MOD C Standards. Reliability Standard MOD-031-1 should continue to provide planners and operators access to complete and accurate demand and energy data to allow such entities to conduct their own resource adequacy analyses to serve peak demand. As noted above, NERC, EEI, and ISO New England support approval of MOD-031-1, and no commenters oppose approval. ITC Companies “does not object” to the standard and “concurs with the Commission that MOD-031-1 will meaningfully enhance the ability of transmission planners and operators to conduct resource adequacy analyses and plan for peak load conditions.”

15. We also find that the Reliability Standard should provide for consistent documentation and information sharing practices for demand and energy data, and promotes efficient planning practices across the industry and supports the identification of needed system reinforcements. Further, the Commission finds that Reliability Standard MOD-031-1 improves the Existing MOD C Standards by providing applicable entities the authority to collect demand and energy data, and related information, to support reliability assessments and also includes transmission planners as applicable entities that must report demand and energy data.

16. Further, as discussed below, we direct NERC to (1) develop a modification to Reliability Standard MOD-031-1 to clarify certain obligations to provide data to the Regional Entity and (2) consider the compliance obligations of an applicable entity upon receipt of a data request that seeks confidential information.

A. Demand and Energy Data Issues Raised in the NOPR

17. As discussed above, the Commission sought comment in the NOPR on several questions in connection with the collection of demand and energy data. With regard to the responsive comments on the NOPR question regarding the collection of data through mechanisms other than data requests, the Commission accepts the explanation provided by NERC and other commenters that, while a planning coordinator or balancing authority may collect demand and energy forecast data under a tariff or other arrangement, the planning coordinator or balancing authority always retains the option to seek the necessary data through a Requirement R1 data request if, for example, the data are not forthcoming through other means.

18. Further, the Commission raised a concern in the NOPR regarding whether a planning coordinator or balancing authority that receives data “through alternative mechanisms” remains obligated to provide such data (i.e., within the scope of Requirement R1) to a Regional Entity upon request, as set forth in Requirement R3. We accept NERC's explanation that the “intent of Requirement R3 was to require all planning coordinators and balancing authorities to provide the necessary demand and energy data to their respective Regional Entities to support the [ERO]'s development of seasonal and long-term reliability assessments,” although “a strict reading” of Requirement R3 “indicates that it applies only to data collected pursuant to a data request issued under this Reliability Standard.” NERC has the statutory responsibility to conduct periodic assessments of the reliability and adequacy of the Bulk-Power System, and we believe that it is incumbent on users, owners and operators subject to compliance with section 215 of the FPA to provide the necessary data to support such assessments. Accordingly, pursuant to section 215(d)(5) of the FPA and consistent with NERC's comments, we direct NERC to develop a modification to MOD-031-1 through the standards development process to clarify that planning coordinators and balancing authorities must provide demand and energy data upon request of a Regional Entity, as necessary to support NERC's development of seasonal and long-term reliability assessments.

B. Other Issues

19. EEI seeks Commission clarification of a “potential conflict” between a transmission provider's obligation to provide data under MOD-031-1 and the transmission provider's confidentiality obligations under an OATT or other confidentiality restrictions. Under MOD-031-1, Requirement R2, an applicable entity must provide data requested by its planning coordinator or balancing authority in accordance with the Requirement R1 data request provision. EEI notes that, under Requirement R4, an entity has 45 days to respond to a written request for data. Further, under Requirement 4.1, if an entity does not provide requested data because, inter alia, “providing the data would conflict with the Applicable Entity's confidentiality, regulatory or security requirements, the Applicable Entity shall, within 30 calendar days of the written request, provide a written response to the requesting entity specifying the data that is not being provided and on what basis.” According to EEI, it is unclear “at what point a transmission provider's obligation to `cooperate' with the other Party in the formation of a confidentiality agreement or protective order ends, and its obligation as an Applicable Entity to disclose the requested information under either Requirements R1 or R4 begins.”

20. Requirement R1 specifies the planning coordinator or balancing authority shall issue a “data request to applicable entities in its area.” Applicable entities that are subject to providing data pursuant to Requirement R2 are transmission planners, balancing authorities, load-serving entities, and distribution providers. The transmission providers discussed by EEI may, in fact, be registered as one or more of the NERC functional entities that make up the applicable entities list in MOD-031-1. Requirement R4 includes provisions for an applicable entity to follow if a conflict arises. On this basis, the Reliability Standard appears to be clear. However, EEI's concern that MOD-031-1 is not clear regarding the compliance obligations of an applicable entity when required to provide data to a balancing authority or planning coordinator pursuant to a data request under the standard may have merit. Further, it may be possible in some circumstances, depending on the terms of the confidentiality provision at play, to provide data pursuant to a non-disclosure agreement. Therefore, rather than attempting to provide the clarification requested by EEI, the Commission directs NERC to consider EEI's concern regarding the compliance obligations of an applicable entity upon receipt of a data request that seeks confidential information in the standard development process when it addresses the directive to clarify that planning coordinators and balancing authorities must provide demand and energy data upon request of a Regional Entity.

21. ITC Companies raises a concern with the inclusion of transmission planners as listed entities from whom the types of data specified may be requested because, according to ITC Companies, many transmission planners have delegated the collection of data to the ISO or RTO in which they are located. ITC Companies requests that the Commission recognize that agreements governing the reporting of demand and energy data such as those existing between ITC's operating subsidiaries and the ISOs/RTOs in which each operates are common, and thus provide that a transmission planner having such an arrangement with an ISO/RTO will be in compliance with data requests it receives under the Requirements R1 and R4. While the language of particular agreements is beyond the scope of the immediate proceeding, we agree with ITC Companies that Requirement R1 provides the flexibility to collect energy data through alternative mechanisms.

IV. Information Collection Statement

22. The Paperwork Reduction Act (PRA) requires each federal agency to seek and obtain Office of Management and Budget (OMB) approval before undertaking a collection of information directed to ten or more persons or contained in a rule of general applicability. 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.

23. Through issuance of this Final Rule, the Commission approves Reliability Standard MOD-031-1. As stated above, the Existing MOD C Standards were approved by the Commission in Order No. 693. All information collection estimates associated with the collection of demand and energy data and subsequent retention were assessed in Order No. 693 and will not be repeated here. The Reliability Standard expands the actual data to be submitted in two areas: (1) Weather normalized annual peak hour actual demand for the prior calendar year if this demand varies due to weather-related conditions (e.g., temperature, humidity or wind speed); and (2) summaries detailed in Requirement R1, Subparts 1.5.4 and 1.5.5. The additional data and summaries will increase reporting and preparation time for some applicable entities. Most entities already normalize their actual demand data based on weather. However, some entities may have a one-time cost of determining the method to “weather normalize” the actual demand data. Accordingly, the information collection costs will consist of an annual cost for all applicable entities and, for a small percentage, additional costs will occur during the first year of implementation.

Public Reporting Burden: Reliability Standard MOD-031-1 requires each “Applicable Entity” to provide the data requested by its planning coordinator or balancing authority in accordance with the data request issued pursuant to Requirement R1. Our estimate below regarding the number of respondents is based on the NERC Compliance Registry as of July 31, 2014. According to the NERC Compliance Registry, NERC has registered 478 distribution providers, 469 load-serving entities, 179 transmission planners and 107 balancing authorities. However, under NERC's compliance registration program, entities may be registered for multiple functions, so these numbers incorporate some double counting. The total number of unique entities that may be identified as a data provider (e.g. applicable entity) in accordance with Reliability Standard MOD-031-1 will be approximately 561 entities registered in the United States as a distribution provider, load-serving entity, transmission planner and/or balancing authority. The Commission estimates the annual reporting burden and cost as follows:

Title: FERC-725L, Mandatory Reliability Standards for the Bulk-Power System: MOD Reliability Standards.

Action: Final rule.

OMB Control No: 1902-0261.

Respondents: Businesses or other for-profit institutions; not-for-profit institutions.

Frequency of Responses: One-time and ongoing.

Necessity of the Information: Reliability Standard MOD-031-1 implements 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 purpose of the Reliability Standard is to provide authority for applicable entities to collect demand, energy and related data to support reliability studies and assessments and to enumerate the responsibilities and obligations of requestors and respondents of that data.

Internal Review: The Commission has reviewed the requirements pertaining to the Reliability Standard for the Bulk-Power System and determined that the approved requirements are necessary to meet the statutory provisions of the Energy Policy Act of 2005. These requirements conform to the Commission's plan for efficient information collection, communication and management within the energy industry. The Commission has assured itself, by means of internal review, that there is specific, objective support for the burden estimates associated with the information requirements.

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. Comments submitted to OMB should refer to FERC-725L and OMB Control No. 1902-0261.

V. Regulatory Flexibility Act Certification

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

25. The Small Business Administration (SBA) revised its size standard (effective January 22, 2014) for electric utilities from a standard based on megawatt hours to a standard based on the number of employees, including affiliates. Under SBA's new size standards, transmission owners and transmission operators likely come under the following category and associated size threshold: Electric bulk power transmission and control, at 500 employees. The Reliability Standard applies to 561 entities. Comparison of the applicable entities with the Commission's small business data indicates that approximately 249 are small entities. Of these, the Commission estimates that approximately five percent, or twelve of these small entities expect to be affected by the new requirements of the proposed Reliability Standard. The Commission estimates that the small entities that will be affected by Reliability Standard MOD-031-1 will incur one-time compliance costs ranging up to $14,309 (i.e. the cost of determining the method of weather normalizing annual peak hour actual demand), plus the annual development of summary narratives in accordance with Requirement R1, Subparts 1.5.4 and 1.5.5, resulting in costs of $477.

26. Accordingly, the Commission certifies that the Reliability Standard will not have a significant economic impact on a substantial number of small entities.

VI. Environmental Analysis

27. 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. 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. The actions proposed herein fall within this categorical exclusion in the Commission's regulations.

VII. Document Availability

28. 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.

29. 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.

30. 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.

VIII. Effective Date and Congressional Notification

31. These regulations are effective April 27, 2015. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.