The North American Electric Reliability Corporation is seeking Federal Energy Regulatory Commission approval of proposed Rules of Procedure revisions that add two new functional entities to the NERC registry criteria -- Computational Load Owner and Computational Load Operator.
“Through this proposal, NERC takes steps to address the most immediate risks of large computational loads to the reliability of the BPS before impacts are more fully realized,” NERC said in the Oct. 21 filing.
Over the past few years, NERC identified, through the Long-Term Reliability Assessments (LTRAs), reliability risks posed by the unprecedented amount of large load, such as data centers and large industrial facilities, connecting rapidly to the BPS.
Trends documented in the LTRAs showed higher demand growth than at any point in the last two decades, NERC said.
In addition to the proliferation of large load interconnecting to the BPS, NERC observed emerging concerns over the electrical behavior of large data centers and other computational load, it said.
Specifically, large-scale customer-initiated load reductions during normal grid faults could lead to voltage and frequency excursions, posing risks to the operation of the BPS.
"Moreover, existing registered entities could not perform all the actions needed to address the risks. It became clear that computational load did not behave like other large load, and with the projected increase connecting to the grid, NERC needed to quickly understand how to mitigate any impacts from the aggregate risks posed by large amounts of load with unique electrical behaviors," it noted.
NERC launched the Large Loads Action Plan to address risks comprehensively and expeditiously, engaging with its technical stakeholder committee to consider characteristics of these loads and how to mitigate impacts to the BPS, it said.
Similarly, the United States Secretary of Energy and the Commission acknowledged the need for prompt mitigation of emerging risks through the Advance Notice of Proposed Rulemaking docket and subsequently a Computational Loads Order.
As a result of the work under the Large Loads Action Plan and the need highlighted by the Secretary of Energy and the Commission, NERC determined now was the time to regulate computational loads.
"While new electrical behavior and load growth drives the need to regulate these users of the BPS, Congress and the Commission long ago contemplated that such large customers may someday need to be regulated under section 215 of the Federal Power Act," NERC said.
"Even with this expansive reliability authority under section 215, however, NERC has always relied on identified risk, stakeholder input from across industries, and a targeted focus on the engineering and physics behind a reliable grid to determine which entities should be registered on its NERC Compliance Registry as subject to mandatory Reliability Standards."
Historically, NERC focused on owners and operators of the Bulk Electric System (BES), a subset of BPS facilities, as those entities who must comply with Reliability Standards.
However, recently, new risks led to expansion of the NERC Compliance Registry to include entities owning and operating non-BES generating resources (i.e. inverter-based resources) due to their impact to the BPS, NERC said.
Based on the newly emerging reliability risks and recommended mitigation, NERC is proposing for the first time to regulate certain large customers based on their impact on the reliable operation of the BPS.
NERC launched extensive stakeholder outreach and held multiple public comment periods to revise the Rules of Procedure Appendices 2, 5A, and 5B that include provisions on registration processes and registry criteria to add new functional entity types to the NERC Compliance Registry, it added.
Once registered on the NERC Compliance Registry, these new functional entity types would need to comply with mandatory applicable Reliability Standards.
The two new proposed functional entity types are proposed to be defined as follows:
- “Computational Load Operator” means the entity that operates a Computational Load Site.
- “Computational Load Owner” means the entity that owns and maintains a Computational Load Site.
These functional entities “own and maintain” or “operate” a “Computational Load Site”, which is proposed to be defined as follows:
One or more buildings, structures, or installations at a single location that 1) Primarily contains information technology infrastructure used for creating, executing, and delivering software applications and services; artificial intelligence training, deployment, and delivery; cryptocurrency mining; or other computational activities at a data center; and 2) is supplied through electrical equipment that is connected to the BPS.
To appropriately identify those Computational Load Owners and Computational Load Operators who should be registered, NERC developed additional criteria for Computational Load Sites to tailor registration to the associated BPS risks.
Specifically, NERC is proposing to register entities that are Computational Load Owners or Computational Load Operators of a Computational Load Site “with a total connected Load greater than or equal to 50 MW that is supplied through electrical equipment connected at a voltage level greater than or equal to 100 kV from one or more points of connection.”
NERC determined the proposed criteria address the aggregate risks posed by computational loads while also helping to ensure NERC does not capture smaller entities that pose less risk to the BPS at this time.
The proposed thresholds include approximately 86% of the overall total (all sizes and voltages) amount of computational load projected by the end of 2027.
Therefore, the threshold encompasses a majority of those Computational Load Sites of the size and connected voltage that can create unforeseen and unique electrical dynamic behaviors when connected to the BPS.
"Nevertheless, NERC continues to monitor impacts of all computational load to assess whether there are any material risks to the BPS," it said.
Given the rapid proliferation of large computational load, NERC is asking the Commission provide expedited treatment in considering its approval of the proposed revisions to the Rules of Procedure.
"While the proposed applicable Reliability Standards will be filed at a later date for Commission approval along with associated implementation plans, expedited action on the registry criteria will permit NERC and the Regional Entities to more effectively engage new potential registrants and provide targeted education and outreach to appropriate entities."
Furthermore, the regulatory certainty "provided by approved registry criteria would encourage entities to engage early with NERC and the Regional Entities, providing the best outcomes for compliance preparation prior to the effective date of any applicable Reliability Standards," NERC said.
"NERC exercises prudence in any expansion of its registry criteria, employing a targeted, impact-based approach to development. It is through this lens that NERC determined that now is the time to stay a step ahead of risk and register Computational Load Owners and Computational Load Operators."
