The Federal Energy Regulatory Commission ("FERC") issued two Notices of Proposed Rulemaking ("NOPRs") on October 18, 2012 seeking to improve the reliability of the Bulk-Power System ("BPS"). In one NOPR, FERC proposes to approve FAC-003-2—Transmission Vegetation Management, submitted for FERC approval by the North American Electric Reliability Corporation ("NERC") late last year, which would expand the applicability of that vegetation management standard (the "FAC-003 NOPR"). In the other NOPR, FERC proposes to direct NERC to develop new reliability standards that address the impact of geomagnetic disturbances ("GMD") on grid reliability (the "GMD NOPR").


NERC submitted FAC-003-2 for FERC approval in December 2011 (described in more detail in a prior Blank Rome alert here), to replace the currently-effective FAC-003-1. NERC's proposed modifications, in part, respond to directives in FERC Order No. 693, the order that initially approved FAC-003-1. Per NERC's submission, FERC proposes to approve: i) FAC-003-2; ii) revised definitions for "Right-of-Way (ROW)," "Vegetation Inspection," and the new defined term - "Minimum Vegetation Clearance Distance (MVCD)" found in the Glossary of Terms Used in NERC Reliability Standards; iii) an implementation plan setting forth effective dates for existing lines and new lines subject to the standard; and iv) the applicable Violation Security Levels and Violation Risk Factors.

Under the proposed FAC-003-2, registered Transmission Owners would be obligated to prevent an encroachment into the MVCD, which are flashover distances calculated using the Gallet equation, for the lines subject to the standard.1 The concepts of Clearance 1 and 2 flashover distances in FAC-003-1 would be eliminated under the proposed new version. FAC-003-2 is more stringent because it explicitly treats any encroachment into the MVCD as a violation of the standard, even if no contact, flashover, momentary outage or sustained outage occurs. However, the proposed standard includes exceptions for when a Transmission Owner would not be held accountable for encroachments into the MVCD. These exceptions include circumstances that are beyond the control of the Transmission Owner such as a natural disaster (e.g., earthquakes and fires) and human or animal activity (e.g., logging).

If adopted, FAC-003-2 would apply to all overhead transmission lines operated at or above 200 kV and would now also apply to any lower voltage overhead transmission line that is either an element of an Interconnection Reliability Operating Limit or a Major WECC Transfer Path. Further, Transmission Owners would be required to annually perform Vegetation Inspections2 of all transmission lines subject to the standard, with no more than 18 months between inspections on the same right-of-way, and to complete 100% of their annual vegetation work plan.

FERC proposes to approve NERC's implementation plan, which establishes the effective date of FAC-003-2 as the first day of the first calendar quarter that is twelve months following the effective date of FERC's Final Rule. Comments on the FAC-003 NOPR are due by December 24, 2012.


GMDs are disturbances to the electric system that occur during solar storms. When electrically charged particles of the solar wind interact with the earth's magnetic field it can cause wide-spread outages and significant damage to BPS equipment.

In the GMD NOPR, FERC proposes to require NERC to submit, for FERC approval, reliability standards in two filings that address the impact of GMD on the reliable operation of the BPS. First, FERC proposes to require that NERC file, within 90 days of the effective date of the Final Rule, at least one reliability standard that requires owners and operators of the BPS to develop and implement operational procedures to mitigate the effects of GMDs. FERC is not requiring that NERC specify what operational procedures must be implemented. Instead, FERC directs NERC to provide such owners and operators with guidance as to what procedures have been or are expected to be effective in mitigating GMD impacts. FERC has not established a set implementation time frame, but encourages NERC to require compliance with the new reliability standard(s) within 90 days after FERC approval of such standard(s).

In a subsequent filing FERC proposes to require that NERC file at least one reliability standard that requires BPS owners and operators to: i) conduct initial and on-going assessments of the potential impact of GMDs on BPS equipment and the BPS as a whole; and ii) require such owners and operators to develop and implement a plan, based on such assessments, preventing instability, uncontrolled separation or cascading failures caused by GMDs. According to the GMD NOPR, these plans must go beyond operational procedures and enhanced training and include protection strategies specifically tailored to the entity's equipment characteristics and locations. FERC suggests a number of strategies that may be employed, including automatically blocking geomagnetically-induced currents from entering the BPS and instituting specification requirements for new equipment. As with the filing for the operational procedures reliability standard(s), FERC does not propose a specific implementation schedule for this reliability standard(s), but it recognizes that such standard(s) will likely require an extended, multi-phase implementation period considering the time needed to conduct required assessments and the time and cost of installing any required protection measures.

FERC issued the GMD NOPR in response to several government-sponsored studies, NERC reports and a Technical Conference on April 30, 2012 that discussed GMD impacts. FERC finds that these vulnerabilities are not adequately addressed in the current reliability standards and, thus, represent a reliability gap.

Comments on the GMD NOPR are also due by December 24, 2012.