The types of transmission facilities subject to mandatory reliability standards could be changing as a result FERC action. The new, final rule is aimed at protecting the reliability of the bulk power system. The rule requires NERC to revise its definition of “bulk electric system” to ensure that the definition encompasses all facilities necessary for operating an interconnected electric transmission network.

FERC's stated intent is to eliminate inconsistencies across regions, eliminate the ambiguity created by the current characterization of the 100 kilovolt (kV) threshold as a general guideline, provide a review system to ensure that any variations do not compromise reliability, and ensure that all facilities with significant impacts on reliability are subject to mandatory rules.

The current “bulk electric system” definition provides regional entities discretion to define “bulk electric system,” including the ability to exclude facilities 100 kV or above, without obtaining approval by NERC or FERC. The NOPR proposed to continue to include all facilities rated above 100 kV and eliminate regional discretion to exclude facilities 100 kV or above, providing a consistent identification of bulk electric system facilities across all regions. The NOPR called for FERC and NERC approval for exempting facilities that would otherwise qualify as part of the bulk electric system on a facility-by-facility basis.

The final rule retains the NOPR bright-line test that includes all facilities operated at or above 100 kV and proposes that NERC adopt a standard process and criteria for excluding facilities at or above 100 kV that are not necessary for the operation of the interconnected transmission network. However, FERC allows NERC to develop its own alternative proposal, so long as it is as or more effective than FERC's approach. NERC must file its revised definition within one year of the order's effective date.

Mr. Wellinghoff stated that it is critically important for the right facilities to be subject to mandatory reliability standards. The current NERC definition allows too much discretion, which, in turn, permits individual regions to define which facilities are subject to reliability standards. Mr. Wellinghoff noted that any alternative NERC proposal must be as effective or more effective than FERC's proposed approach and must not reduce reliability.

Commissioner Spitzer clarified that the order does not call for FERC to rule on every exemption; rather, it allows the regions to grant the exemptions and allows some oversight of the process by FERC.

The final rule will be effective 60 days after publication in the Federal Register.