FERC considers bulk electric system definition

In a society dependent on electricity for many essential and desired services, maintaining the reliability of the electric grid bears increased importance.  From hospitals and home heating to business operations, "keeping the lights on" has become a matter of national significance.  How electric reliability is regulated is the subject of an ongoing administrative case noticed in today's Federal Register.

At the federal level, chief regulatory responsibility for electric reliability falls on the Federal Energy Regulatory Commission.  Following the August 2003 blackout, when 50 million people lost power in the U.S. and Canada, Congress authorized the creation of an “electric reliability organization” to manage the reliability of the North American bulk power system.

Today, that organization is the North American Electric Reliability Corporation (NERC).  NERC's mission is to ensure the reliability of the North American bulk power system.  To achieve this mission, NERC establishes and enforces reliability standards for the bulk power system.

In 2010, FERC issued Order No. 743 (104-page PDF), which ordered NERC to revise its definition of the "bulk electric system" -- a specific subset of the bulk power system.  Historically, that term has been defined differently by each of each of eight regional entities.  In Order No. 743, FERC recognized concerns arising from inconsistencies among these regional definitions, and recommended replacing the regional entities' discretion to define the "bulk electric system" with a bright line threshold.  This bright line standard would include all facilities operated at or above 100 kV except defined radial facilities.  FERC also recommended that NERC adopt an exemption process and criteria for removing facilities from NERC's authority that are not necessary for operating the interconnected transmission network.

After stakeholder input, NERC proposed a core definition that included all transmission elements operated at 100 kV or higher and real power and reactive power resources connected at 100 kV or higher, while establishing an express exclusion for facilities used in the local distribution of electrical energy as well as certain behind-the-meter generation facilities.  NERC also proposed changes to how entities targeted for inclusion in its compliance registry as part of the bulk electric system may seek an exception from regulation.

FERC proposes to adopt NERC's proposal, and has issued a Notice of Proposed Rulemaking (or "NOPR", a 94-page PDF) on the issue.  In the NOPR, FERC seeks public comment on several issues, including whether NERC's proposal properly distinguishes between local distribution and transmission, and whether NERC's proposed procedures for seeking an exclusion from registration are sufficient.  Comments are due to FERC by September 4, 2012.