A Difficult Process Approaches a Critical Deadline
A low profile, but very significant, process involving the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC) and participants in the electric utility industry is approaching a critical time point. Driven by FERC directive and timeline, NERC and the industry are working towards completing a revised base definition of the Bulk Electric System (BES) that will apply throughout the United States and Canada. The process to develop the definition is close to conclusion, but the deadline to meet FERC’s filing requirement is also very close.
The BES definition has been evolving for some time – from a rough guideline, to an approval of an interim BES definition in 2007 under FERC Order No. 693, to a definition proposed by NERC under RM12-6 and RM12-7 that was developed through an electric industry stakeholder process, to FERC’s Order No. 773 that was released in 2012. The most recently approved version of the BES definition contains a “Bright Line” where equipment operating above a minimum voltage and electric generators above a certain size are automatically assumed to be part of the BES. The definition also includes five categories of included equipment and four categories of excluded equipment to clarify intent of the process. Finally, it includes a FERC-mandated Exemption process in recognition that a “one size fits all” definition will give unfair or unreasonable results for some specific situations. While there has been a good faith effort on the part of those involved to complete the process in time to meet the deadline set by FERC in Order No. 773, the diversity and complexity of electric utility facility configurations has made the process of the getting consensus on details and implementation difficult.
The complexity of the process led to separation of some issues and a potential timing clash. NERC decided while developing its proposal under RM12-6 and RM12-7 to prepare a “Phase I” definition, while deferring consideration of some issues (including the “Bright Line” values) to a “Phase II” so as to meet the filing deadline FERC had set. FERC generally approved NERC’s “Phase I” proposal, but required significant changes in a few areas. NERC requested, and received, a delay in the effective date of the new BES definition in order to complete a “Phase II” effort that would obtain industry input on implementation of changes FERC required in Order No. 773, as well as attempting to address those issues that were deferred from Phase I.
The Phase II process is drawing to a close. Reaching a successful conclusion for Phase II this year is critical, as there are significant differences between the Phase I provisions approved under Order No. 773 and the industry consensus developed under the Phase II effort. If the Phase II deadline is missed, there is a chance that the revised Phase I definition will go into effect for a limited period, to be followed after a short period by the Phase II definition. Neither industry participants nor NERC want that to happen. However, a ballot held by NERC that closed September 6th of this year – intended to gain industry approval of Phase II – narrowly failed. Comments submitted with the ballot indicated a single issue – implementation of the rules concerning distributed generation facilities and the BES – may have been sufficient to cause the ballot to fail. The NERC team charged with developing the Phase II definition met just a few days ago and is proposing a limited clarification, to be followed by an expedited recirculation ballot. The team’s hope is that the proposed change will be enough to gain approval of the expedited ballot so the approval process can move back onto the timeline.