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Approve NERC definition of bulk electric system, APPA urges FERC

From the September 6, 2012 issue of Public Power Daily

Originally published September 6, 2012

APPA strongly supports the Federal Energy Regulatory Commission’s proposal to adopt the North American Electric Reliability Corp.’s revised definition of the bulk electric system and accompanying modifications to its rules of procedure. NERC’s definition, which would establish a 100-kV bright-line threshold, with specific inclusions and exclusions, "effectively differentiates between local distribution and transmission facilities," APPA said in Sept. 4 comments to FERC. "In APPA’s opinion, NERC’s proposal comes as close as any proposal could to hitting the ‘sweet spot.’"

As Congress intended in Section 215 of the Federal Power Act, the commission "should give due weight to NERC’s technical expertise" and approve its proposal, APPA said.

NERC has proposed a definition "that provides an objective test to identify those facilities that are (and are not) a part" of the bulk electric system, APPA said. Changes to NERC’s proposal "could result in perverse infrastructure investment decisions that might in fact not serve the cause of increased reliability," the association said, noting that use of networked systems for local distribution has become commonplace because of greater reliability.

The vast majority of sub-100-kV facilities have no material impact on the bulk electric system, APPA said. "Where sub-100 kV facilities do have an impact, the new Rules of Procedure exception process can be used to designate these facilities." The commission could potentially exceed its authority under Section 215 of the Federal Power Act if it were to designate directly (or order NERC and its regional entities to designate) entire classes of sub-100 kV facilities as part of the bulk electric system, APPA said.

Once the 100-kV bright-line threshold has been applied, "outliers can be addressed via the exception process in a manner that provides due process to affected parties and technical justification to support such exceptions," APPA said. The exception process also will capture any outlier configurations of radial systems that pose a significant risk to the reliable operation of the interconnected transmission network, APPA said.

A directive that "other registered entities" study their sub-100-kV facilities for inclusion in the bulk electric system "would be excessively burdensome to the industry, especially small registered entities," APPA said. APPA asked the commission to give NERC and the regional entities the flexibility to develop, with industry input, a reasonable approach for the evaluation of sub-100-kV facilities that does not create an excessive burden.

Section 215 does not give the commission authority to designate specific classes of facilities for inclusion in or exclusion from the bulk electric system independently from its consideration of a proposed reliability standard, or in the instant proceeding, a NERC glossary term used in such reliability standards, APPA said. Under Section 215(d), the commission’s role "is to review NERC’s decisions regarding reliability standards, and to either approve such decisions or remand them for further proceedings."

The commission, like NERC, "should focus its resources on ensuring that regional entities enforce compliance with the [bulk electric system] definition and the NERC Rules of Procedure in a consistent, non-discriminatory and transparent manner," APPA said.

APPA also asked FERC to expedite the deregistration process for those entities or facilities that are no longer designated as part of the BES under the new definition or through application of the exception process.


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