On January 16, 2014, the Federal Energy Regulatory Commission (the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) to consider the approval of a North American Electric Reliability Corporation (“NERC”) reliability standard concerning geomagnetic disturbances (“GMDs”). GMD events are distortions to the earth’s magnetic field resulting from solar events. Such disturbances may cause transformer overheating or damage, loss of reactive power sources, increased reactive power demand, and system protection misoperations. These effects could result in voltage collapse and/or blackouts of the Bulk-Power System (“BPS”). The proposed GMD standard, the first of its kind, would be embodied as EOP-010-1 (Geomagnetic Disturbance Operations).

After soliciting input from the electric industry regarding GMD events, the Commission issued Order No. 779 in 2013 mandating that NERC address GMDs in two stages. In the first stage, the Commission directed NERC to submit for approval one or more proposed reliability standard(s) that address the impact of GMD events on the reliable operation of the BPS. EOP-0101-1 is NERC’s attempt at addressing the first stage. According to the NOPR, EOP-010-1 is “designed to mitigate the effects of geomagnetic disturbances on the Bulk-Power System by requiring responsible entities to implement Operating Plans and Operating Procedures or Processes.”

EOP-010-1 would apply to registered Reliability Coordinators (“RC”) as well as a registered Transmission Operator (“TOP”) with “a Transmission Operator Area that includes a power transformer with a high side wye-grounded winding with terminal voltage greater than 200 kV.” EOP-010-1, as proposed, contains three (3) requirements:1

Requirement 1 requires each RC to develop, maintain, and implement a GMD operating plan that coordinates GMD operating procedures or operating processes within its RC area. The operating plan would need to contain, at a minimum, a description of activities designed to mitigate the effects of GMD events on the reliable operation of the interconnected transmission system within the RC area and a process for the RC to review the GMD operating procedures or operating processes of TOPs within the RC area. Requirement 2 requires each RC to disseminate forecasted and current space weather information to functional entities identified as recipients in the RC’s GMD operating plan. Requirement 3 applies to TOPs and requires them to develop, maintain, and implement a GMD operating procedure or operating process. Such an operating procedure or operating process must contain, at a minimum, (1) steps or tasks to receive space weather information, (2) system operator actions to be initiated based on predetermined conditions, and (3) the conditions for terminating the operating procedure or operating process.

The Commission noted in Order No. 779 that the first-stage operational procedures contained in EOP-010-1 are not a “complete solution” to mitigating GMD events. Thus, early next year, NERC will address the second-stage directive from Order No. 779 that requires NERC to develop one or more reliability standard(s) that require owners and operators of the BPS to conduct initial and on-going assessments of the potential impact of GMD events on BPS equipment and the BPS as a whole. Such second-stage standards must identify “benchmark” GMD events that specify what severity GMD events a responsible entity must assess for potential impacts on the BPS.

Comments to the FERC NOPR and the proposed EOP-010-1 standard are due on or before March 24, 2014.