At its meeting on July 17, 2014, FERC took three significant actions.

Physical Security NOPR

First, and most significantly, FERC issued a notice of proposed rulemaking (NOPR) proposing to approve NERC’s proposed Reliability Standard CIP-014-1, which addresses physical security of certain transmission substations that are the most critical to the operation of the Bulk-Power System.  In a blog article we posted last March, we reported that FERC had directed NERC to promulgate new standards related to physical security within 90 days after significant attention to the issue was raised in the press and in Congress earlier in the year.  Reliability Standard CIP-014-1 tracks the directives FERC had set forth in March to establish standards that provided for the identification of the substations most critical to Bulk-Power System reliability, development of risk assessments and security plans for such critical substations, and verification of those assessments and plans.

Although FERC proposes to approve Reliability Standard CIP-014-1, FERC does propose to direct NERC to make two changes and to provide two informational filings.

• FERC proposes to direct NERC to develop additional provisions to allow applicable governmental authorities (which FERC defines as itself and other appropriate federal and provincial authorities) to add or subtract from a transmission owner’s list of critical facilities that warrant physical security protections.

• FERC proposes to direct NERC to strike the term “widespread” from the standard.  In defining critical facilities, NERC had proposed that transmission owners identify substations which if rendered inoperable or damaged could result in inter alia“widespread instability,” but FERC noted that the term “widespread” is undefined and could be read inappropriately to limit the scope of the standard.

• FERC proposes to direct NERC to file within six months of the final rule an informational filing indicating whether development of reliability standards for physical security of all “High impact” control centers (as those are defined in the Cyber security standards) is necessary for Bulk-Power System reliability.

• FERC proposes to direct NERC to file within a year of the final rule an informational filing that addresses resiliency of the Bulk-Power System when faced with the loss of critical facilities.

Speaking about the NOPR and the issue of physical security, acting Chairwoman LaFleur noted the narrow focus of the proposed reliability standard and commended FERC staff and the industry for their focused efforts to develop the Reliability Standard so quickly.  She noted that this is only the second time FERC has exercised its authority to require NERC to develop a completely new standard, and despite the aggressive 90-day deadline, NERC managed to file two weeks early.  Reacting to Commissioner Moeller’s comment that he had taken a “low-key” position on this issue, Commissioner Norris indicated that he would not reiterate his prior statements, but simply urged that the industry take a rational approach to the issue and look for modern solutions rather than simply building walls.  Commissioner Clark stated that he thought this proposed reliability standard was only a first step and indicated his belief that more work could be done to enhance system-wide visibility of critical facilities rather than simply relying on the “bottom up” exercise in the proposed standard.  The text of Commissioner Clark statement is available on FERC’s website.

Comments on these proposed directives and other aspects of the NOPR are due September 8. Reply comments are due September 22.  Copies of FERC’s press release and FERC staff’s presentation on this NOPR are available on FERC’s website.

Protection System Maintenance NOPR

In a second NOPR, FERC proposed to approve Reliability Standard PRC-005-3, which is a new version of the requirements for maintenance and testing of protection systems.  This version was submitted by NERC in response to a directive by FERC to address maintenance and testing of automatic reclosing relays that affect reliability.  Specifically, the new version incorporates references to “Automatic Reclosing,” which is defined to apply to relays: (i) at terminals of elements connected to the bulk electric system bus located at generating plant substations where the gross generating plant capacity is greater than the gross capacity of the largest bulk electric system generating unit in the balancing authority area (ii) at substations one bus away and within 10 miles from such generating plant substations, or (iii) that are an integral part of a special protection system.

Although FERC proposed to accept the new version of the protection system maintenance standard, FERC also proposed to direct NERC to submit a report within two years to address the effectiveness of the auto reclosing provisions.  FERC indicated that report should be based both on actual operations data and on simulated system conditions.  FERC noted that the analysis it proposes is similar to the contingency analysis required under Reliability Standard TPL-001-4, R4 (which requires transmission planning to include explicit examination of the of high speed reclosing into a fault when assessing if the system performance criteria can be met).  FERC seeks comment on whether the analysis under TPL-001-4 may provide a meaningful benchmark or metric for the analysis it proposes to require in this NOPR.

A second issue raised in the NOPR relates to expanding the scope to address supervisory devices that control automatic reclosing (i.e. “allow auto-reclosing for desirable conditions or block auto-reclosing for undesirable conditions”).  FERC noted that NERC defined “Automatic Reclosing” under PRC-005-3 to include both the reclosing relay and its associated circuitry, but did not include supervisory devices such as sync-check or voltage relays that are sometimes part of an auto-reclosing scheme.  FERC proposes to direct NERC to develop modifications to address these supervisory devices.

Comments on these proposed directives and other aspects of the NOPR will be due in mid-September.

Order Approving Generator and Transmission Relay Loadability Standards

In a third order at its open meeting, FERC approved a new reliability standard  dealing with generator relay loadability (Reliability Standard PRC-025-1) as well as a revised reliability standard dealing with transmission relay loadability (Reliability Standard PRC-023-3).  Reliability Standard PRC-025-1 was developed in response to FERC’s directive in Order No. 733, in which FERC accepted the transmission relay loadability standard and directed that a new standard be developed covering generator relay loadability.    PRC-025-1 is designed to prevent unnecessary generator tripping when conditions do not pose a risk to the generator and associated equipment.  The revisions to the transmission relay loadbility standard in PRC-023-3 were developed to clearly distinguish the relays covered under PRC-023-3 and those covered under PRC-025-1.

This order will become effective on September 2, 2014.