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NERC: Anxiety, regulatory uncertainty surround effective date of BES revisions

The North American Electric Reliability Corporation on May 23 asked Federal Energy Regulatory Commission for a one-year extension to the effective date of its FERC-approved revisions to the definition of the bulk electric system (BES) “in the interest of regulatory certainty.”

NERC, which is charged with ensuring the reliability of the North American BES, said that though it is on schedule to implement the revised definitions of the BES by the current effective date of July 1, there would be a transitional period of time during which the existing definition would be in effect, which could result in unintended consequences that may ultimately thwart FERC’s agenda to bolter reliability (FERC Docket Nos. RM12-6 and RM12-7).

FERC on Dec. 20, 2012, approved NERC’s revisions to the definition of the BES, finding that the revisions satisfied the directives of FERC Order 743. The commission on February 19 granted rehearing of the final rule. Order 743 required that the definition of the BES encompass all facilities necessary for an interconnected transmission system and remove regional discretion without review or oversight.

The commission also directed changes for NERC to implement through its standard development process, which results in this compromising transitional period, NERC said.

Under the current definition of the BES, as of July 1, under Exclusions E1 or E3 (see below), generators could submit a notification of self-determined exclusion that has the effect of excluding their tie-lines from the definition of BES.

“As a result of the notification of self-determined exclusion, such generators would no longer be subject to all applicable reliability standards as they are today,” NERC said. “During the transition period, implementing the current definition of BES would require NERC to accept a registered entity’s application of the then-effective definition and Exclusions E1 and E3, while NERC simultaneously implements the exception process to bring such elements back into the BES.”

Also, under Exclusion E3, certain entities are not eligible to submit a notification of a self-determined exclusion that will be in effect as a result of the FERC directive, NERC said. This would result in requiring entities that wish to remove their elements from the BES during the transition period to submit an exclusion exception request, which can take several months to process. That request would not be required once the changes under FERC’s directive have been approved and made effective, NERC said.

“The confluence of these two circumstances has produced tremendous uncertainty and anxiety within the industry and a need for prompt course correction,” NERC said. “While NERC is prepared to issue guidance on the treatment of elements during the transition period, only commission action will provide the regulatory certainty that would resolve the issues noted above.”

NERC requested a new effective date of July 1, 2014, and asked FERC to shorten the comment period to May 31 and render a decision regarding the new effective date by June 30.

FERC on May 24 shortened the comment period to May 31.

Exclusions:

E1 – Radial systems: A group of contiguous transmission elements that emanates from a single point of connection of 100-kV or higher and: a) only serves load; b) only includes generation resources, not identified in Inclusion I3, with an aggregate capacity less than or equal to 75 MVA (gross nameplate rating); or c) where the radial system serves load and includes generation resources, not identified in Inclusion I3, with an aggregate capacity of non-retail generation less than or equal to 75 MVA (gross nameplate rating).

E3 – Local networks (LN): A group of contiguous transmission elements operated at or above 100-kV but less than 300-kV that distribute power to load rather than transfer bulk-power across the interconnected system. LN’s emanate from multiple points of connection at 100-kV or higher to improve the level of service to retail customer load and not to accommodate bulk-power transfer across the interconnected system.