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28 March 2008


[Federal Register: March 28, 2008 (Volume 73, Number 61)]
[Proposed Rules]               
[Page 16586-16604]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28mr08-18]                         

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM08-3-000]

 
Mandatory Reliability Standard for Nuclear Plant Interface 
Coordination

March 20, 2008.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Proposed Rulemaking.

-----------------------------------------------------------------------

SUMMARY: Pursuant to section 215 of the Federal Power Act, the 
Commission proposes to approve the Nuclear Plant Interface Coordination 
Reliability Standard developed by the North American Electric 
Reliability Corporation (NERC). The proposed Reliability Standard 
requires a nuclear power plant operator and its suppliers of back-up 
power and related transmission and distribution services to coordinate 
concerning nuclear licensing requirements for safe nuclear plant 
operation and shutdown and system operating limits. The Commission also 
proposes to accept four related definitions for addition to the NERC 
Glossary of Terms and to direct various changes to proposed violation 
risk factors, which measure the potential impact of violations of the 
Reliability Standard on the reliability of the Bulk-Power System. The 
proposed rule would benefit the Reliable Operation of the Bulk-Power 
System by facilitating the provision of off-site power to ensure 
reliable and safe nuclear power plant operation and shutdown.

DATES: Comments are due April 28, 2008.

ADDRESSES: Interested persons may submit comments, identified by Docket 
No. RM08-3-000, by any of the following methods:
     eFiling: Comments may be filed electronically via the 
eFiling link on the Commission's Web site at: http://www.ferc.gov. 
Documents created electronically using word processing software should 
be filed in the native application or print-to-PDF format and not in a 
scanned format. This will enhance document retrieval for both the 
Commission and the public. The Commission accepts most standard word 
processing formats and commenters may attach additional files with 
supporting information in certain other file formats. Attachments that 
exist only in paper form may be scanned. Commenters filing 
electronically should not make a paper filing. Service of rulemaking 
comments is not required.
     Mail/Hand Delivery: Commenters that are not able to file 
electronically must mail or hand deliver an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Secretary of 
the Commission, 888 First Street, NE., Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process,

[[Page 16587]]

see the Comment Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT

    :
Richard M. Wartchow (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8744.
Christy Walsh (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6523.
Robert Snow (Technical Information), Office of Electric Reliability, 
Division of Reliability Standards, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6716.
Kevin Thundiyil (Technical Information), Office of Electric 
Reliability, Division of Reliability Standards, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-6490.

SUPPLEMENTARY INFORMATION: 

Table of Contents



                                                              Paragraph
                                                               numbers

I. Background..............................................            2
    A. EPAct 2005 and Mandatory Reliability Standards......            2
        1. NERC's Proposed Nuclear Reliability Standard....            4
        2. Proposed NERC Glossary Definitions..............           10
        3. Nuclear Reliability Standard Requirements.......           11
        4. Nuclear Reliability Standard Development........           15
II. Discussion.............................................           17
    A. Applicability.......................................           18
        1. Notification of Parties to Interface Agreements.           20
        2. Transmission Entities...........................           22
        3. Agreement on NPIRs..............................           31
    B. Scope of Agreements.................................           38
        1. Generally.......................................           39
        2. Revisions to Interface Agreements To Reflect               40
         Interim Changes...................................
    C. Coordination........................................           43
    D. Proposed Terms for Addition to the NERC Glossary....           46
    E. Violation Risk Factors..............................           48
    F. Violation Severity Levels...........................           60
III. Information Collection Statement......................           63
IV. Environmental Analysis.................................           73
V. Regulatory Flexibility Act Analysis.....................           74
VI. Comment Procedures.....................................           77
VII. Document Availability.................................           81


    1. Pursuant to section 215 of the Federal Power Act (FPA), the 
Commission proposes to approve the Nuclear Plant Interface Coordination 
Reliability Standard (NUC-001-1) developed by the North American 
Electric Reliability Corporation (NERC). The proposed Reliability 
Standard requires a nuclear power plant operator and its suppliers of 
back-up power and transmission and distribution services \1\ to 
coordinate concerning nuclear licensing requirements for safe nuclear 
plant operation and shutdown and system operating limits (SOLs). The 
Commission also proposes to accept four related definitions for 
addition to the NERC Glossary of Terms \2\ and to direct various 
changes to proposed violation risk factors, which measure the potential 
impact of violations of the Reliability Standard on the reliability of 
the Bulk-Power System. The proposed rule would benefit the Reliable 
Operation of the Bulk-Power System by facilitating the provision of 
off-site power to ensure reliable and safe nuclear power plant 
operation and shutdown.\3\
---------------------------------------------------------------------------

    \1\ The Reliability Standard defines those suppliers who provide 
such generation, transmission and distribution services pursuant to 
agreements under the Nuclear Reliability Standard as ``transmission 
entities,'' as discussed below.
    \2\ See the NERC Glossary of Terms Used in Reliability Standards 
(as revised) (Glossary), originally filed in Mandatory Reliability 
Standards for the Bulk-Power System, NERC Request for Approval of 
Reliability Standards, Docket No. RM06-16-000 (Apr. 4, 2006), and 
affirmed by Order No. 693, 72 FR 16416 (Apr. 4, 2007), FERC Stats. 
and Regs. ] 31,242 (2007), order on reh'g, Order No. 693-A, 72 FR 
40717 (July 25, 2007), 120 FERC ] 61,053 (2007).
    \3\ The Commission is not proposing any new or modified text to 
its regulations. Rather, as set forth in 18 CFR part 40, a proposed 
Reliability Standard will not become effective until approved by the 
Commission, and the Electric Reliability Organization (ERO) must 
post on its Web site each effective Reliability Standard.
---------------------------------------------------------------------------

I. Background

A. EPAct 2005 and Mandatory Reliability Standards

    2. On August 8, 2005, the Electricity Modernization Act of 2005 was 
enacted as Title XII, Subtitle A, of the Energy Policy Act of 2005 
(EPAct 2005).\4\ EPAct 2005 added section 215 to the FPA, requiring the 
Commission-certified Electric Reliability Organization (ERO) to develop 
mandatory and enforceable Reliability Standards, subject to Commission 
review and approval. Once approved, the Reliability Standards may be 
enforced by the ERO, subject to Commission oversight, or by the 
Commission independently.\5\
---------------------------------------------------------------------------

    \4\ Energy Policy Act of 2005, (Pub. L. 109-58), Title XII, 
Subtitle A, 119 Stat. 594, 941 (2005), 16 U.S.C. 824o (2000 & Supp. 
V 2005).
    \5\ 16 U.S.C. 824o(e)(3).
---------------------------------------------------------------------------

    3. On February 3, 2006, the Commission issued Order No. 672, 
implementing section 215.\6\ Pursuant to Order No. 672, the Commission 
certified NERC as the ERO.\7\ The ERO is required to develop 
Reliability Standards, subject

[[Page 16588]]

to Commission review and approval, applicable to users, owners and 
operators of the Bulk-Power System, as set forth in each Reliability 
Standard.
---------------------------------------------------------------------------

    \6\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval, and 
Enforcement of Electric Reliability Standards, Order No. 672, 71 FR 
8662 (Feb. 17, 2006), FERC Stats. & Regs. ] 31,204, order on reh'g, 
Order No. 672-A, 71 FR 19814 (Apr. 18, 2006), FERC Stats. & Regs. ] 
31,212 (2006).
    \7\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g & compliance, 117 FERC ] 61,126 (2006).
---------------------------------------------------------------------------

1. NERC's Proposed Nuclear Reliability Standard
    4. On November 19, 2007, NERC filed its petition for Commission 
approval of the Nuclear Plant Interface Coordination Reliability 
Standard, designated NUC-001-1 (November 19, 2007 Petition). NERC 
supplemented the filing on December 11, 2007 (December 11, 2007 
Supplement) to propose four related NERC Glossary terms: ``Nuclear 
Plant Generator Operator,'' ``Nuclear Plant Off-site Power Supply (Off-
site Power),'' ``Nuclear Plant Licensing Requirements (NPLRs),'' and 
``Nuclear Plant Interface Requirements (NPIRs).'' The November 19, 2007 
Petition states that the proposed Reliability Standard addresses the 
coordination of interface requirements for two domains: (i) Bulk-Power 
System planning and operations; and (ii) nuclear power plant licensing 
requirements for off-site power necessary to enable safe nuclear plant 
operation and shutdown.
    5. The Nuclear Reliability Standard applies to nuclear plant 
generator operators (generally nuclear power plant owners and 
operators, including licensees) and ``transmission entities,'' defined 
in the Reliability Standard as including a nuclear plant's suppliers of 
off-site power and related transmission and distribution services. To 
account for the variations in nuclear plant design and grid 
interconnection characteristics, the Reliability Standard defines 
transmission entities as ``all entities that are responsible for 
providing services related to Nuclear Plant Interface Requirements 
(NPIRs),'' and lists eleven types of functional entities that could 
provide services related to NPIRs.\8\
---------------------------------------------------------------------------

    \8\ The list of functional entities consists of transmission 
operators, transmission owners, transmission planners, transmission 
service providers, balancing authorities, reliability coordinators, 
planning authorities, distribution providers, load-serving entities, 
generator owners and generator operators. Additional applicability 
issues are discussed in a separate section below.
---------------------------------------------------------------------------

    6. According to NERC, nuclear plant generator operators and 
transmission entities operate according to separate, established 
reliability and safety procedures. NERC states that the proposed 
Reliability Standard requires a nuclear plant generator operator to 
coordinate operations and planning with its transmission entities by 
developing procedures that reflect nuclear plant licensing requirements 
and SOLs,\9\ including interconnection reliability operating limits 
(IROLs), affecting nuclear plant operations.\10\ The proposed Nuclear 
Reliability Standard requires nuclear plant generator operators and 
transmission entities, including off-site power suppliers, to develop 
expectations and procedures for coordinating operations to meet the 
nuclear plant licensing requirements, SOLs and IROLs and to execute 
agreements, called interface agreements, reflecting those expectations 
and procedures. The resulting operations and planning requirements 
developed in the agreements to address the nuclear plant licensing 
requirements, SOLs and IROLs are called NPIRs.\11\ NERC states that 
Requirements R3 through R8, which state that the interface agreement 
parties will address the NPIRs in planning, operations and facility 
upgrade and outage coordination, provide additional specificity on 
these expectations.
---------------------------------------------------------------------------

    \9\ The NERC glossary defines system operating limit or SOL as 
``the value * * * that satisfies the most limiting of the prescribed 
operating criteria for a specified system configuration to ensure 
operation within acceptable reliability criteria * * *'' 18 CFR part 
40, Facilities Design, Connections and Maintenance Mandatory 
Reliability Standards, Notice of Proposed Rulemaking, 72 FR 46413 
(Aug. 20, 2007), FERC Stats. and Regs. ] 32,622, at P 19 (2007) 
(Aug. 13, 2007).
    \10\ The NERC glossary defines IROL as a ``system operating 
limit that, if violated, could lead to instability, uncontrolled 
separation, or Cascading Outages that adversely impact the 
reliability of the bulk electric system.'' 18 CFR part 40, 
Facilities Design, Connections and Maintenance Mandatory Reliability 
Standards, Order No. 705, 73 FR 1770 (Jan. 9, 2008), 121 FERC ] 
61,296, at P 118 (2007) (Dec. 27, 2007).
    \11\ See NUC-001-1, Requirement R2 and the proposed NERC 
Glossary term, Nuclear Plant Interface Requirements.
---------------------------------------------------------------------------

    7. NERC's November 19, 2007 Petition notes that nuclear plant 
generator operators must already fulfill nuclear licensing requirements 
for off-site power.\12\ NERC states that, while various forms of 
agreements exist to meet the nuclear power plant general design 
criterion for off-site power, NUC-001-1 places a new, mandatory and 
enforceable obligation under section 215 of the FPA on both nuclear 
plant generator operators and transmission entities. NUC-001-1 requires 
these entities to inform one another of limits and requirements on 
their systems and to enter into agreements to coordinate and operate 
their systems to address nuclear plant licensing requirements and 
related system limits.
---------------------------------------------------------------------------

    \12\ See also the U.S.-Canada Power System Outage Task Force, 
Final Report on the August 14, 2003 Blackout in the United States 
and Canada: Causes and Recommendations, at 112 (April 2004) 
(Blackout Report), for a description of Nuclear Regulatory 
Commission (NRC) oversight; available at: http://www.ferc.gov/
industries/electric/indus-act/blackout.asp:
    The NRC, which regulates U.S. commercial nuclear power plants, 
has regulatory requirements for offsite power systems. These 
requirements address the number of offsite power sources and the 
ability to withstand certain transients. Offsite power is the normal 
source of alternating current (AC) power to the safety systems in 
the plants when the plant main generator is not in operation. The 
requirements also are designed to protect safety systems from 
potentially damaging variations (in voltage and frequency) in the 
supplied power. For loss of offsite power events, the NRC requires 
emergency generation (typically emergency diesel generators) to 
provide AC power to safety systems. In addition, the NRC provides 
oversight of the safety aspects of offsite power issues through its 
inspection program, by monitoring operating experience, and by 
performing technical studies.
---------------------------------------------------------------------------

    8. The nuclear plant licensing requirements addressed in the 
proposed Reliability Standard include requirements for off-site power 
to enable safe operation and shutdown during an electric system or 
plant event, and requirements for avoiding nuclear safety issues as a 
result of changes in electric system conditions during a disturbance, 
transient or normal conditions. NERC cites general design criterion 17 
for nuclear power plants, which requires nuclear plant generator 
operators to obtain off-site electric power that will provide 
sufficient capacity to permit safety systems to function, assure that 
reactor coolant design limits are not exceeded, prevent core cooling, 
and maintain containment integrity and other vital functions.\13\
---------------------------------------------------------------------------

    \13\ NERC November 19, 2007 Petition at 22-23, citing the NRC 
regulations, 10 CFR part 50, Appendix A--General Design Criteria for 
Nuclear Power Plants.
---------------------------------------------------------------------------

    9. NERC states that NUC-001-1, in combination with the nuclear 
license general design criteria requirements, achieves the vital public 
interest of assuring safe nuclear power generation. According to NERC, 
the Reliability Standard is beneficial to nuclear plant generator 
operators because it will assist them in meeting nuclear plant 
licensing requirements to safely produce nuclear power. It is also 
beneficial to Bulk-Power System users, due to the significant support 
that nuclear plants provide to the Reliable Operation of the Bulk-Power 
System. This Reliability Standard was assigned to a new rulemaking 
proceeding, Docket No. RM08-3-000, and is the subject of the current 
Notice of Proposed Rulemaking (NOPR).\14\
---------------------------------------------------------------------------

    \14\ The Nuclear Reliability Standard is attached in Appendix A 
to this NOPR and is available on the Commission's eLibrary document 
retrieval system in Docket No. RM08-3-000 and also on NERC's Web 
site, http://www.nerc.com.
---------------------------------------------------------------------------

2. Proposed NERC Glossary Definitions
    10. NERC proposes in its December 11, 2007 Supplement to add the

[[Page 16589]]

following four terms to the NERC Glossary: \15\
---------------------------------------------------------------------------

    \15\ The Commission reviews and approves revisions to the NERC 
Glossary, directing modifications where necessary. See, e.g., Order 
No. 693 at P 1893-98.

    Nuclear Plant Generator Operator: Any Generator Operator or 
Generator Owner that is a [n]uclear [p]lant [l]icensee responsible 
for operation of a nuclear facility licensed to produce commercial 
power.
    Nuclear Plant Off-site Power Supply or Off-site Power: The 
electric power supply provided from the electric system to the 
nuclear power plant distribution system as required per the nuclear 
power plant license.
    Nuclear Plant Licensing Requirements (NPLRs): Requirements 
included in the design basis of the nuclear plant and statutorily 
mandated for the operation of the plant, including nuclear power 
plant licensing requirements for: (1) Off-site power supply to 
enable safe shutdown of the plant during an electric system or plant 
event; and (2) Avoiding preventable challenges to nuclear safety as 
a result of an electric system disturbance, transient, or 
condition.\16\
---------------------------------------------------------------------------

    \16\ The proposed Reliability Standard incorporates a regional 
difference that provides an alternative definition of nuclear plant 
licensing requirements that applies to units located in Canada.
---------------------------------------------------------------------------

    Nuclear Plant Interface Requirements (NPIRs): The requirements, 
based on NPLRs and Bulk Electric System requirements, that have been 
mutually agreed to by the Nuclear Plant Generator Operator and the 
applicable [t]ransmission [e]ntities.
3. Nuclear Reliability Standard Requirements
    11. NERC's November 19, 2007 Petition summarizes the Nuclear 
Reliability Standard's nine compliance Requirements. Requirement R1 
states that a nuclear plant generator operator shall provide proposed 
NPIRs to its transmission entities. Requirement R2 states that a 
nuclear plant generator operator and its transmission entities shall 
execute one or more agreements ``that include mutually agreed to 
NPIRs'' and document how the nuclear plant generator operator and the 
applicable transmission entities shall address and implement these 
NPIRs as further described in Requirement R9.
    12. Requirements R3 through R8 dictate various operating and 
planning obligations that the nuclear plant generator operator and 
transmission entities shall meet per the interface agreements. 
Requirement R3 states that the transmission entities shall incorporate 
NPIR information into planning analyses and communicate the study 
results to the nuclear plant generator operator. Requirement R4 directs 
transmission entities to incorporate the NPIRs into operating analyses 
and meet the resulting operating targets or inform the nuclear plant 
generator operator when the transmission entity loses the ability to 
assess its performance. Requirement R5 places an obligation on the 
nuclear plant generator operator to operate its facilities in 
accordance with the interface agreements. Requirement R6 provides that 
a nuclear plant generator operator and its transmission entities shall 
coordinate outages and maintenance activities that affect the NPIRs 
(additional details concerning operations and maintenance coordination 
are set forth in Requirement R9.3). Requirements R7 and R8 oblige a 
nuclear plant generator operator and its transmission entities, 
respectively, to inform each other under their interface agreement of 
actual or proposed facility changes affecting the NPIRs.
    13. Requirement R9, including sub-Requirements R9.1.1 through 
R9.4.4, outline certain administrative, technical, operations and 
maintenance, and communications and training provisions that must be 
included in an interface agreement. Provisions concerning technical 
requirements and analysis direct the interface agreement parties to: 
(1) Identify limits, configurations and operating scenarios included in 
the NPIRs (Requirement R9.2.1); (2) identify essential facilities, 
components and configuration restrictions (Requirement R9.2.2); and (3) 
describe planning and operational analyses, including scope and timing, 
to support the NPIRs (Requirement R9.2.3).
    14. The operations and maintenance coordination provisions mandate 
that the interface agreements provide for coordination of operations 
and maintenance of electrical facilities at the interface between the 
electrical system and the nuclear plant and power supply systems, 
including off-site power (Requirements R9.3.1-.3). Further, an 
interface agreement must coordinate responses to unusual conditions on 
the grid such as loss of ability to monitor grid performance, loss of 
off-site power, use of special protection systems, and underfrequency 
and undervoltage load shedding programs (Requirements R9.3.4, R9.3.5, 
and R9.3.7). Requirement R9.3.6 requires coordination of physical and 
cyber security systems. The interface agreements also must adopt terms 
and protocols for communications between the nuclear plant generator 
operator and transmission entities, coordination and communication 
during atypical operating conditions or emergency events, investigation 
and resolution of the causes of unplanned events, compliance with 
regulatory information requirements, and personnel training relating to 
NPIRs (Requirements R9.4.1-.5) and dispute resolution procedures 
(Requirement R9.1.3).
4. Nuclear Reliability Standard Development
    15. NERC reports that in October 2004 it received a Standard 
Authorization Request (SAR) for NUC-001-1 from the Nuclear Energy 
Institute Grid Reliability Task Force. The NERC Standards Committee 
approved the SAR in May 2005 and authorized development of the 
Reliability Standard. After more than 50 stakeholders, including 
Nuclear Regulatory Commission (NRC) staff, provided comments on the 
draft, the NERC Nuclear Reliability Standard drafting team finalized 
the proposed Reliability Standard and set it for vote. NERC reports 
that, while the first ballot in March 2007 indicated approval by 77 
percent of the weighted segment votes, negative ballots with comments 
triggered a recirculation ballot. NERC describes the negative comments 
as being largely concerned with two issues: (1) Whether the term 
``transmission entities'' is too ambiguous to be enforceable; and (2) 
whether the proposed Reliability Standard makes SOL determinations and 
Bulk-Power System integrity procedures subservient to nuclear plant 
licensing requirements. NERC reports the drafting team's responses to 
these comments on ``nsmission entities'' and SOL coordination. The 
drafting team supported its proposal for identifying transmission 
entities by stating that the proposed generic treatment was appropriate 
because it reflected the variety of potential interactions between a 
given nuclear plant generator operator and grid operators with nuclear 
plant interconnections. According to NERC, the drafting team indicated 
that the specific entities covered by the proposed Reliability Standard 
would be determined through the NUC-001-1 implementation plan. NERC 
states that the drafting team responded to criticisms that SOL 
coordination was not adequately supported by pointing out that the 
nuclear plant generator operators and transmission entities will 
develop NPIRs under NUC-001-1 through a collaborative process that 
permits both groups to identify and address both nuclear requirements 
and Bulk-Power System limits in the resulting agreements.
    16. With these responses, the proposed Reliability Standard passed 
in a recirculation ballot with an 80 percent weighted segment approval 
and a 96 percent quorum. The NERC Board of Trustees adopted the 
proposed Reliability Standard on May 2, 2007. To

[[Page 16590]]

provide time for nuclear plant generator operators and transmission 
entities to identify NPIRs and negotiate and execute interface 
agreements, NERC proposes that NUC-001-1 become effective in the United 
States on the first day of the calendar quarter falling 15 months after 
Commission approval.

II. Discussion

    17. The Commission proposes to approve the Reliability Standard, 
NUC-001-1, effective as proposed by NERC, but seeks comment on several 
specific issues concerning the applicability of the Reliability 
Standard, coordination among transmission entities, and the scope of 
nuclear plant interface agreements. The Commission is not taking any 
action on the regional difference, because it applies outside of the 
United States and is not applicable to any facilities within the 
Commission's jurisdiction.\17\ Further, the Commission proposes to 
order several modifications to the violation risk factors for the 
Reliability Standard and approve the proposed violation severity levels 
until they are superseded in an upcoming proceeding, as discussed 
below. The Commission also proposes to approve the proposed Glossary 
terms.
---------------------------------------------------------------------------

    \17\ NERC proposes to adopt as a regional difference for Canada 
a separate definition of Nuclear Plant Licensing Requirements that 
does not reference regulatory requirements for off-site power supply 
for safe plant shutdown because Canada does not have regulatory 
standards for off-site power comparable to those established by the 
NRC.
---------------------------------------------------------------------------

A. Applicability

    18. Reliability Standard NUC-001-1 applies to nuclear plant 
generator operators and transmission entities, including off-site power 
suppliers and entities that provide distribution and transmission 
services that affect plant operations. NERC states that the Reliability 
Standard meets the criteria that it apply to users, owners and 
operators of the Bulk-Power System because NUC-001-1 will apply to 
transmission entities that are responsible for providing services 
relating to NPIRs. According to NERC, these transmission entities can 
affect the safety and reliability of the nuclear plant and Bulk-Power 
System, for instance in the case of a distribution service provider 
that supplies off-site power from a low-voltage, local distribution 
system. Therefore, these entities are subject to the Reliability 
Standard Requirements and may be registered under the NERC compliance 
registry process.
    19. While the Commission does not at this time propose to modify 
the Reliability Standard, this NOPR seeks comment on several issues 
concerning: (1) A nuclear plant generator operator's role in notifying 
applicable transmission entities that they may be responsible for 
NPIRs, (2) when NUC-001-1 becomes applicable to transmission entities; 
and (3) the applicability of NERC's compliance procedures when 
potential parties to interface agreements fail to reach agreement. The 
Commission presents its understanding of these applicability issues and 
seeks comment as discussed below.
1. Notification of Parties to Interface Agreements
    20. Requirement R1 provides: ``The Nuclear Plant Generator Operator 
shall provide the proposed NPIRs in writing to the applicable 
transmission entities and shall verify receipt.'' Thus, it is the 
responsibility of a nuclear plant generator operator to notify its 
appropriate transmission entities that they are responsible for meeting 
the provisions of NUC-001-1. In response, a nuclear plant generator 
operator and its transmission entities are expected to negotiate and 
execute interface agreements ``that include mutually agreed to NPIRs.''
Commission Proposal
    21. The Commission understands Requirement R1 to provide that, if a 
nuclear plant generator operator fails to provide all appropriate NPIRs 
to an applicable transmission entity, the nuclear plant generator 
operator will not be in compliance with the Reliability Standard. 
However, the Commission also understands that the impact of such an 
implication is limited, because a nuclear plant generator operator will 
know, as a result of the NRC licensing approval and review processes, 
which applicable entities to contact and what services are needed to 
meet NRC licensing requirements. Thus, it is unlikely that a nuclear 
plant generator operator would fail to obtain appropriate services and 
contact the necessary off-site power suppliers and transmission 
entities. With this understanding, the Commission preliminarily finds 
that the Requirement R1 obligation on a nuclear plant generator 
operator to contact transmission entities that will be subject to NUC-
001-1 is appropriate.
2. Transmission Entities
    22. The proposed Reliability Standard includes the term 
``transmission entities,'' defined in the Applicability section of NUC-
001-1 as ``all entities that are responsible for providing services 
related to Nuclear Plant Interface Requirements (NPIRs).'' NERC 
explains that each of the functional entities listed as transmission 
entities is defined as a user, owner, or operator of the Bulk-Power 
System. NERC notes that entities defined as transmission entities, such 
as distribution providers, are transmission entities by virtue of their 
involvement with a nuclear plant, by agreeing to meet an NPIR.\18\ NERC 
states that a distribution provider that supplies backup power to a 
nuclear plant from a local, lower voltage distribution system to meet 
the plant's licensing requirements for offsite power will be considered 
a transmission entity, because the distribution provider can impact the 
safety and reliability of the nuclear plant and the Bulk-Power 
System.\19\ In particular, the November 19, 2007 Petition states:
---------------------------------------------------------------------------

    \18\ See NERC November 19, 2007 Petition at 12.
    \19\ Id.

    Because the relationship of each nuclear plant generator 
operator with its provider of transmission-related services is 
unique, it will be important and necessary for the registration 
process to identify on a plant-by-plant basis the specific 
transmission entities required to identify NPIRs and develop the 
requisite agreement. Once the agreement becomes final, all 
applicable nuclear plant generator operator and transmission 
entities for each agreement will be identified by name and specific 
function. The respective Regional Entity will then be responsible 
for ensuring that each nuclear plant generator operator and 
transmission entities identified in the agreement(s) is registered 
on the NERC Compliance Registry for the applicable function(s). NERC 
will work with the Regional Entities to ensure that all nuclear 
plant generator operators and transmission entities included in the 
agreements that result from the NPIRs are listed in the Compliance 
---------------------------------------------------------------------------
Registry for this specific reliability standard.\20\

    \20\ NERC November 19, 2007 Petition at 12-13.
---------------------------------------------------------------------------

    23. NERC explains that the term ``transmission entities'' is used 
to refer to all the entities that may provide services to meet NPIRs 
for the 104 various nuclear plants subject to NUC-001-1 Requirements. 
NERC adopted this approach to applicability because, due to the unique 
characteristics of the interconnection of each nuclear facility with 
its transmission grid, it is not possible to specify in advance and on 
a generic basis which functional entities operating near a given 
nuclear plant would be responsible for meeting the Requirements of NUC-
001-1.
    24. NERC indicates that the particular transmission entities 
subject to the Reliability Standard will be determined as they are 
identified by the nuclear plant generator operator as providing 
services related to NPIRs, pursuant to Requirement R1. According to 
NERC,

[[Page 16591]]

once a nuclear plant generator operator and its applicable transmission 
entities execute one or more interface agreements, a Regional Entity 
shall ensure that the transmission entities that are parties to the 
interface agreement are listed in the compliance registry and add to it 
any interface agreement parties that are subject to NUC-001-1 but that 
were not previously identified in the NERC compliance registry 
process.\21\
---------------------------------------------------------------------------

    \21\ See Order No. 693 at P 92-96 (approving NERC compliance 
registry process) and NERC, ``Statement of Compliance Registry 
Criteria (Revision 3),'' filed with its Supplemental Information 
Filing, Docket No. RM06-16-000 (Feb. 6, 2007) (describing NERC 
procedures to identify and register owners, operators and users of 
the Bulk-Power System, including organizations performing functions 
listed in the definition of transmission entities, generators that 
are material to the Reliable Operation of the Bulk-Power System, and 
organizations that ``should be subject to the Reliability 
Standards'').
---------------------------------------------------------------------------

Commission Proposal
    25. The Commission proposes to accept the identification and 
registration process set forth in the November 19, 2007 Petition to 
determine applicability for NUC-001-1. This proposed acceptance comes 
with the Commission's understanding that NERC will use its authority 
under the compliance registry process to register all users, owners and 
operators of the Bulk-Power System that provide transmission or 
generating services relating to off-site power supply or delivery.\22\
---------------------------------------------------------------------------

    \22\ See NERC November 19, 2007 Petition at 12.
---------------------------------------------------------------------------

    26. Certain auxiliary power suppliers and transmission service 
providers may serve nuclear power plants through facilities that fall 
outside of the current Regional Entity definitions of bulk electric 
system that NERC uses to establish the applicability of the Reliability 
Standards. For instance, some nuclear power plants may obtain auxiliary 
power through lower voltage facilities that are not included in the 
Regional Entity's definition of bulk electric system. Other nuclear 
power plants may retain alternate sources of auxiliary power provided 
through lower voltage facilities operated by a small utility or 
cooperative that is not included in a Regional Entity's definition of 
bulk electric system. The Commission understands that NERC and the 
Regional Entities will register these and other service providers that 
provide interconnection and/or auxiliary power facilities vital to 
nuclear plant operation through NERC's authority to register an owner 
or operator of an otherwise exempt facility that is needed for Bulk-
Power System reliability, on a facility-by-facility basis.\23\ Once 
registered, the transmission entity providing such services to a 
nuclear generating plant may be subject to other Reliability Standards 
applicable to the functional class within the NERC functional model for 
which the transmission entity has been registered, as deemed 
appropriate through the registration process. With this understanding, 
the Commission proposes to accept the scope of the definition of 
transmission entities as appropriate.
---------------------------------------------------------------------------

    \23\ See Order No. 693 at P 101; NERC Statement of Compliance 
Registry, Revision 3.1 at 8.
---------------------------------------------------------------------------

    27. In addition, the Commission seeks clarification from the ERO, 
and public comment, on several concerns regarding the implementation of 
the Reliability Standard and the registration of transmission entities.
    28. First, the Commission asks NERC to clarify its statement in the 
November 19, 2007 Petition that the registry process will identify on a 
plant-by-plant basis the specific transmission entities that provide 
services relating to NPIRs. Specifically, does NERC intend, for 
entities that are not otherwise registered, to limit registration to 
those facilities that provide such services? How does this relate to 
the definition of bulk electric system? For example, when identifying 
``on a plant-by-plant basis the specific transmission entities required 
to identify NPIRs and develop the requisite agreement,'' \24\ would the 
``plant'' be identified as a critical facility that is included in the 
bulk electric system? \25\
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    \24\ November 19, 2007 Petition at 12.
    \25\ See Order No. 693 at P 101 (holding generally, in the 
context of a specific Reliability Standard that identifies a 
threshold, that ``despite the existence of a voltage or demand 
threshold for a particular Reliability Standard, the ERO or Regional 
Entity should be permitted to include an otherwise exempt facility 
on a facility-by-facility basis if it determines that the facility 
is needed for Bulk-Power System reliability'').
---------------------------------------------------------------------------

    29. Second, the Commission understands the Nuclear Reliability 
Standard is not enforceable against an entity, other than a nuclear 
plant generator operator, until it executes an interface agreement. 
Upon execution, such an entity becomes a ``transmission entity'' 
subject to the Nuclear Reliability Standard and other Reliability 
Standards as noted above. The Commission requests comment on this 
understanding.
    30. Third, the Commission has concerns regarding the implementation 
of NUC-001-1 in the context of a single entity that both operates a 
nuclear plant and is responsible to provide services related to NPIRs, 
as may be the case with an integrated utility. In that situation, a 
single entity would be both the nuclear plant generator operator and 
the transmission entity. The Commission seeks clarification from the 
ERO, and public comment, on whether an agreement or arrangement would 
be required in a situation where one entity both operates the nuclear 
plant and provide services related to NPIRs. If an agreement or 
arrangement is required, who would execute it, e.g., different 
functional units or divisions within the same entity? Would such an 
agreement or arrangement be accessible during a compliance audit? If an 
agreement is not required in this situation, will there be reasonable 
assurance of adequate coordination between the nuclear plant operator 
and other units within the entity that are responsible to provide 
services related NPIRs?
3. Agreement on NPIRs
    31. Other than Requirement R1, NUC-001-1 utilizes a consensus 
approach, in that the NPIRs contained in an interface agreement must be 
``mutually agreed to.'' The proposed NERC Glossary term NPIR is 
defined, ``The requirements, based on NPLRs [nuclear plant licensing 
requirements] and Bulk-Electric System requirements, that have been 
mutually agreed to by the nuclear plant generator operator and the 
applicable Transmission Entities'' [emphasis added]. This emphasis on 
agreement is reflected in Requirement R2, which states that the 
interface agreements shall include ``mutually agreed to NPIRs.'' 
Requirement R2 also provides that the interface agreements shall 
document how the interface agreement parties will address and implement 
the NPIRs, and states that the resulting interface agreement ``may 
include mutually agreed upon procedures or protocols.''
    32. According to NERC, the proposed Reliability Standard was 
initially drafted such that the nuclear power generator operators might 
unilaterally identify or change the NPIRs as then defined without 
mutual collaboration and agreement with the transmission entity. NERC 
states that this approach could have created limitations on the Bulk-
Power System solely as a result of the NPIR declaration and resultant 
obligation of the transmission entity to operate the Bulk-Power System 
in accordance with these modified NPIRs. The standard drafting team 
responded to these initial comments and created the term ``Nuclear 
Plant Licensing Requirements'' for subsequent drafts. The term NPIR was 
also modified to reflect the requirements based on Nuclear Plant 
Licensing Requirements and Bulk-Power System requirements that have 
been mutually agreed to by the nuclear plant generator operator and the

[[Page 16592]]

applicable transmission entity. According to NERC, these changes 
ensured that the transmission entities actively participated in the 
establishment of NPIRs and mitigated the potential for transmission 
limitations caused by unilateral decisions by the nuclear plant 
generator operators.\26\ Additionally, in defining NPIRs and 
documenting them in the required agreements per Requirement R2, the 
transmission entities can safeguard against the acceptance of NPIRs not 
expressly tied to licensing requirements that could impose a constraint 
to grid operation and limit available transmission capability.
---------------------------------------------------------------------------

    \26\ November 19, 2007 Petition at 27.
---------------------------------------------------------------------------

    33. Also, NERC reports that the drafting team replied to comments 
that the proposed Reliability Standard subordinates SOLs and Bulk-Power 
System integrity to nuclear licensing requirements by noting that the 
NPIRs are to be developed through mutual collaboration. Therefore, the 
consensus approach provides parties to an interface agreement with the 
obligation and expectation to identify NPIRs and develop responses.
Commission Proposal
    34. The Commission proposes to find this consensus approach an 
acceptable and appropriate means to resolve concerns with the differing 
operational requirements faced by nuclear plant generator operators and 
transmission entities, as well as the variety of issues that could 
arise among them. However, the Commission seeks clarification of what 
compliance options are available under the Reliability Standard when 
nuclear plant generator operators and transmission entities fail to 
reach agreement.
    35. The Commission notes that NPIRs are comprised of two distinct 
types of operational limits: (1) Nuclear plant licensing requirements 
representing nuclear plant system limits, and (2) SOLs and IROLs 
representing transmission system limits. Each of these types of 
operational limits is determined through processes outside of NUC-001-
1. Nuclear plant licensing requirements are developed through the NRC 
licensing procedures, and SOLs and IROLs are determined in accordance 
with methodologies required by the Facilities Design, Connection and 
Maintenance Reliability Standards.\27\
---------------------------------------------------------------------------

    \27\ Consequently, although the NPIRs are ``mutually agreed 
to,'' the Commission understands that the parties to the interface 
agreement may not alter by agreement the specific determinations of 
the limits contained in the nuclear plant licensing requirements, 
SOLs and IROLs that are established elsewhere.
---------------------------------------------------------------------------

    36. The Commission is concerned with the possibility that nuclear 
plant generator operators and transmission entities may fail to come to 
agreement while attempting to draft an interface agreement. The 
Commission therefore asks NERC to clarify what compliance options are 
available when a nuclear plant generator operator and a designated 
transmission entity fail to come to agreement over a proposed NPIR or a 
suitable approach to resolve any failure to agree.\28\
---------------------------------------------------------------------------

    \28\ Requirement R9.1.4 states that an interface agreement must 
include a dispute resolution mechanism, which would apply to 
disagreements after the agreement is signed.
---------------------------------------------------------------------------

    37. It appears that, prior to executing an interface agreement, no 
compliance registry process would be triggered and no agreed-to NPIRs 
would exist to support the remaining Requirements of the Reliability 
Standard. The Commission seeks clarification from NERC, and public 
comment, on a circumstance involving an off-site power supplier or 
other potential transmission entity that disagrees with the nuclear 
plant generator operator that it should execute an interface agreement. 
In such circumstance, how would NERC resolve the impasse? Also, would 
NERC proceed to register such an entity (if not previously registered) 
without an executed interface agreement?

B. Scope of Agreements

    38. Although the Requirements of NUC-001-1 dictate that interface 
agreements contain various contractual terms and provide for various 
studies and procedures, the Reliability Standard does not describe 
specific substantive terms to be included in the agreements. NERC 
states that the Nuclear Reliability Standard drafting team adopted this 
consensus approach to coordinating nuclear plant and transmission grid 
operations to provide a platform for coordination at the interface that 
allows both nuclear plant generator operators and transmission entities 
to respect their main system drivers. NERC explains that the time and 
effort needed to coordinate nuclear and transmission system 
requirements in advance and on a generic basis was deemed to be 
prohibitive and the results of such an exercise deemed questionable. 
Therefore, according to NERC, the Nuclear Reliability Standard drafting 
team decided to focus on the interface agreement as the historical 
model for coordination. The interface agreement model, by its nature, 
places the obligation on nuclear plant generator operators and 
transmission entities to coordinate differing operational requirements 
by consensus.
1. Generally
    39. Based on the existence of workable interface agreements that 
are already in place to meet existing nuclear licensing requirements, 
the Commission understands that the studies, analysis and plant 
requirements are developed in the licensing process, prior to the NRC's 
grant of a license or authority for continued operations. Thus, the 
required studies and licensing requirements to be addressed are 
typically established prior to the development of the interface 
agreements. In light of this process, the Commission proposes to find 
that the level of detail provided in the proposed Reliability Standard 
Requirements to define substantive provisions of the interface 
agreements is appropriate. However, the Commission has concerns about 
the interpretation of particular Requirements of NUC-001-1 on the 
development of the interface agreements, as described below.
2. Revisions to Interface Agreements To Reflect Interim Changes
    40. Several of the Requirements direct the parties to interface 
agreements to include provisions to address changes to the nuclear 
plant or transmission grid characteristics. For example, Requirements 
R8 and R9 require nuclear plant generator operators and transmission 
entities to incorporate provisions in the interface agreements to 
inform one another of actual and proposed changes to their facilities 
that may impact their ability to meet the NPIRs. Furthermore, the 
Reliability Standard obligates the parties to interface agreements to 
incorporate provisions to review and update the agreement ``at least 
every three years'' under Requirement R9.1.3 and to address mitigation 
actions needed to avoid violating NPIRs under Requirement R9.3.4.
Commission Proposal
    41. The Commission is concerned that an interface agreement may not 
be updated for significant system changes outside of the three-year 
review process. However, the Commission does not at this time expect 
revisions to the Reliability Standard to be necessary to address its 
concern. The Commission, therefore, proposes to find acceptable the 
provisions for revision to interface agreements, but seeks comment on 
whether NUC-001-1 adequately provides for revisions to reflect interim 
changes.

[[Page 16593]]

    42. The Commission notes that the Requirements of NUC-001-1 
describe a minimum set of elements that must be included in an 
interface agreement. The Commission understands that the NRC requires a 
nuclear plant generator operator to have operationally feasible 
solutions in place prior to authorizing plant start up or continued 
operation following licensing review procedures. As operating solutions 
are worked out in advance, the Commission would prefer that the updated 
operational procedures be reflected in the interface agreements prior 
to being implemented upon plant start up or reauthorization, or shortly 
thereafter. The Commission therefore seeks comment whether it is 
feasible for the nuclear plant interface agreements to provide for 
negotiation and amendments to address emerging transmission and 
generating system limits and revised nuclear plant licensing 
requirements prior to, or contemporaneously with, implementing 
operations solutions. At this time, the Commission anticipates that 
such an approach would not require revision to the Reliability Standard 
itself, and that such provision could be made to implement the standard 
contractual practice requiring negotiation and revision whenever 
external circumstances represent a material change to the original 
assumptions that forms the basis of the agreement. The Commission views 
such a provision as being consistent with Requirement R9.1.3, providing 
for review and update of an agreement ``at least every three years,'' 
and Requirement R9.3.4, providing for review and updates to address 
mitigation actions needed to avoid violating NPIRs.

C. Coordination

    43. Requirements R7 and R8 require communication between nuclear 
plant generator operators and transmission entities regarding 
significant changes in design, configuration, operation or limits of 
their facilities:

    Requirement R7: Per the Agreements developed in accordance with 
this standard, the Nuclear Plant Generator Operator shall inform the 
applicable Transmission Entities of actual or proposed changes to 
nuclear plant design, configuration, operations, limits, protection 
systems, or capabilities that may impact the ability of the electric 
system to meet the NPIRs.
    Requirement R8: Per the Agreements developed in accordance with 
this standard, the applicable Transmission Entities shall inform the 
Nuclear Plant Generator Operator of actual or proposed changes to 
electric system design, configuration, operations, limits, 
protection systems, or capabilities that may impact the ability of 
the electric system to meet the NPIRs.

    44. Furthermore, Requirement R6 obligates interface agreement 
parties to coordinate outages and maintenance activities; Requirement 
R9.3.6 requires coordination of physical and cyber-security 
protections; and Requirement R9.3.7 requires coordination of special 
protection systems and load shedding. Thus, these Requirements provide 
for communication between a nuclear plant generator operator and its 
individual transmission entities, as well as the reverse for 
communication from the transmission entities to the nuclear plant 
generator operator. However, these Requirements do not explicitly 
provide for communication and coordination among the various 
transmission entities that is necessary to facilitate the provision of 
generation and transmission services to support the nuclear power plant 
operations.
Commission Proposal
    45. The NUC-001-1 Requirements cited above explicitly provide for 
bilateral coordination between the nuclear plant generator operator and 
each individual transmission entity. However, the Reliability Standard 
does not explicitly require communication and coordination among the 
transmission entities necessary to meet the NPIRs. The Commission 
understands that the historical practice is for the interface agreement 
to provide for all necessary coordination, typically by obligating 
control area operators to communicate with neighboring entities, 
including Regional Transmission Organization-type grid operators and 
other interconnected utilities and load serving entities, when 
necessary. The Commission anticipates that, pursuant to the 
Requirements of the proposed Reliability Standard, the parties to 
nuclear plant interface agreements will continue to provide for 
coordination among transmission entities, in order to comply with NUC-
001-1 Requirement R9.3.1 obligations to provide for coordination of 
interface facilities. Interface agreement parties may continue to 
designate former integrated control area operators when appropriate or 
may revise their approach, reflecting changes under restructuring to 
grid operations when necessary, consistent with coordination 
responsibilities provided for in existing Reliability Standards. 
Consistent with this understanding, the Commission proposes to accept 
the coordination provisions as requiring all appropriate coordination 
among transmission entities.

D. Proposed Terms for Addition to the NERC Glossary

    46. In its November 19, 2007 Petition, NERC submitted and requested 
approval of additional terms that relate to the Nuclear Reliability 
Standard to be added to the NERC Glossary. The NERC Glossary initially 
became effective on April 1, 2005 and is updated whenever a new or 
revised Reliability Standard is approved that includes a new term or 
definition.
Commission Proposal
    47. Earlier in this NOPR,\29\ the Commission sought comment on 
implications of the phrase ``mutually agreed to'' in the NPIR 
definition. The Commission does not propose any revisions to the 
Glossary terms at this time, however, it is possible that comments 
received in response to this NOPR may raise unforeseen issues. With 
this understanding, the Commission proposes to approve the additional 
terms for the NERC Glossary.
---------------------------------------------------------------------------

    \29\ See section II(A)(3), above, discussing ``Agreement on 
NPIRs.''
---------------------------------------------------------------------------

E. Violation Risk Factors

    48. As part of its compliance and enforcement program, NERC plans 
to assign a lower, medium or high violation risk factor to each 
Requirement of each mandatory Reliability Standard to associate a 
violation of the Requirement with its potential impact on the 
reliability of the Bulk-Power System. Violation risk factors are 
defined as follows:

    High Risk Requirement: (a) Is a requirement that, if violated, 
could directly cause or contribute to Bulk-Power System instability, 
separation, or a cascading sequence of failures, or could place the 
Bulk-Power System at an unacceptable risk of instability, 
separation, or cascading failures; or (b) is a requirement in a 
planning time frame that, if violated, could, under emergency, 
abnormal, or restorative conditions anticipated by the preparations, 
directly cause or contribute to Bulk-Power System instability, 
separation, or a cascading sequence of failures, or could place the 
Bulk-Power System at an unacceptable risk of instability, 
separation, or cascading failures, or could hinder restoration to a 
normal condition.
    Medium Risk Requirement: (a) Is a requirement that, if violated, 
could directly affect the electrical state or the capability of the 
Bulk-Power System, or the ability to effectively monitor and control 
the Bulk-Power System, but is unlikely to lead to Bulk-Power System 
instability, separation, or cascading failures; or (b) is a 
requirement in a planning time frame that, if violated, could, under 
emergency, abnormal, or restorative conditions anticipated by the 
preparations, directly affect the electrical state or capability

[[Page 16594]]

of the Bulk-Power System, or the ability to effectively monitor, 
control, or restore the Bulk-Power System, but is unlikely, under 
emergency, abnormal, or restoration conditions anticipated by the 
preparations, to lead to Bulk-Power System instability, separation, 
or cascading failures, nor to hinder restoration to a normal 
condition.
    Lower Risk Requirement: Is administrative in nature and (a) is a 
requirement that, if violated, would not be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor and control the Bulk-Power System; or 
(b) is a requirement in a planning time frame that, if violated, 
would not, under the emergency, abnormal, or restorative conditions 
anticipated by the preparations, be expected to affect the 
electrical state or capability of the Bulk-Power System, or the 
ability to effectively monitor, control, or restore the Bulk-Power 
System.\30\
---------------------------------------------------------------------------

    \30\ North American Electric Reliability Corp., 119 FERC ] 
61,145, at P 9 (2007) (Violation Risk Factor Order).

    49. In its November 19, 2007 Petition, NERC identifies violation 
risk factors for each Requirement of proposed Reliability Standard NUC-
001-1. NERC proposes either a lower or medium violation risk factor for 
each Requirement of NUC-001-1.\31\ NERC requests that the Commission 
approve the violation risk factors when it takes action on the Nuclear 
Reliability Standard.
---------------------------------------------------------------------------

    \31\ NERC proposes a lower violation risk factor for 
Requirements R1, R2, and R9 and a medium violation risk factor for 
Requirements R3 through R8.
---------------------------------------------------------------------------

    50. In the Violation Risk Factor Order, the Commission addressed 
violation risk factors filed by NERC for Version 0 and Version 1 
Reliability Standards. In that order, the Commission used five 
guidelines for evaluating the validity of each violation risk factor 
assignment: (1) Consistency with the conclusions of the Blackout 
Report, (2) consistency within a Reliability Standard, (3) consistency 
among Reliability Standards with similar Requirements, (4) consistency 
with NERC's proposed definition of the violation risk factor level, and 
(5) assignment of violation risk factor levels to those Requirements in 
certain Reliability Standards that co-mingle a higher risk reliability 
objective and a lower risk reliability objective.\32\
---------------------------------------------------------------------------

    \32\ For a complete discussion of each factor, see the Violation 
Risk Factor Order at: P 19-36.
---------------------------------------------------------------------------

Commission Proposal
    51. The Commission proposes to direct NERC to raise violation risk 
factors for several Requirements, as discussed below. The Commission 
generally views a Reliability Standard that ensures safe and reliable 
nuclear power plant operation and shutdown as meriting violation risk 
factors of medium or high, rather than lower, due to the reliability 
benefits of nuclear power and the impact of separating a plant from the 
grid. While it is true that many of the Requirements are administrative 
in nature, these same Requirements provide for the development of 
procedures to ensure the safe and reliable operation of the grid, and 
responses to potential emergency conditions. If the Requirements are 
not met, the procedures will not be in place to address changing or 
emergency conditions or provide for safe operation and shutdown of a 
nuclear power plant. In short, the Requirements co-mingle the 
administrative tasks with the more critical reliability objective of 
ensuring safe nuclear power plant operation and shutdown. The 
Commission understands that NERC will apply the violation risk factor 
for the main Requirement to any violation of a sub-Requirement, unless 
separate violation risk factors are assigned to the Requirement and the 
sub-Requirement. The Commission discusses individual Requirements of 
NUC-001-1 and proposes changes, below.
a. Requirement R2
    52. The Commission proposes to direct NERC to raise the violation 
risk factor for Requirement R2 from lower to medium and seeks comment 
on this proposal. Requirement R2 places an obligation on a nuclear 
plant generator operator and transmission entities that agree to 
provide services relating to NPIRs to have an interface agreement in 
place to document how nuclear licensing requirements and transmission 
system limits will be addressed. Thus, the Requirement co-mingles the 
administrative element of having an executed agreement in place with 
the operational element of determining how the parties to the interface 
agreement will address nuclear plant licensing requirements and SOLs in 
order to provide for safe nuclear plant operation and shutdown. The 
operational requirements established in the interface agreements 
include requirements for off-site power to enable safe operation and 
shutdown during an electric system or plant event and requirements for 
avoiding nuclear safety issues as a result of changes in electric 
system conditions during a disturbance, transient or normal conditions. 
Therefore, because a violation of Requirement R2 ``could, under 
emergency, abnormal, or restorative conditions anticipated by the 
preparations, directly affect the electrical state or capability of the 
Bulk-Power System,'' a medium violation risk factor is appropriate for 
this Requirement.
b. Requirement R4
    53. The Commission proposes to direct NERC to raise the violation 
risk factors for sub-Requirements R4.2 and R4.3 to high, and seeks 
comment on its proposal. NERC proposes a medium violation risk factor 
for sub-Requirement R4.1, R4.2, and R4.3, which state that transmission 
entities shall incorporate the NPIRs into operating analyses, operate 
to meet the NPIRs and inform the nuclear plant generator operator when 
it loses the ability to assess its performance to meet the NPIRs.
    54. Requirement R4.2 states that transmission entities shall 
operate their electric systems to meet the NPIRs established in the 
interface agreements. According to NERC, the NPIRs form the basis under 
which nuclear plant generator operators and transmission entities will 
``coordinate planning, assessment, analysis, and operation of the bulk 
power system to ensure safe nuclear plant operations and shutdowns.'' 
Therefore, under emergency, abnormal, or restorative conditions a 
violation of Requirement R4.2 could directly cause or contribute to 
Bulk-Power System instability, separation, or a cascading sequence of 
failures, or could place the Bulk-Power System at an unacceptable risk 
of instability, separation, or cascading failures.\33\ For these 
reasons, the Commission believes that a high violation risk factor is 
appropriate for Requirement R4.2.
---------------------------------------------------------------------------

    \33\ See also the NERC November 19, 2007 Petition at 20: ``The 
proposed reliability standard also acknowledges that the obligation 
to public safety relative to nuclear plant operation establishes a 
unique set of requirements that other generating facilities are not 
subjected to. In order to protect the common good, the applicable 
transmission entities must respect these unique requirements that 
maintain and/or restore offsite power adequate to supply minimum 
nuclear safety requirements.''
---------------------------------------------------------------------------

    55. Under Requirement R4.3, when the transmission entities have 
lost the ability to monitor the system to ensure that NPIRs are met, 
they must inform the nuclear plant generator operators. The Commission 
believes that, if a nuclear plant generator operator is unaware of the 
fact that a transmission entity can no longer guarantee that NPIRs are 
met, the nuclear plant generator operator's ability to respond to, or 
anticipate, emergencies and changing system conditions will be 
impaired. Such an event could increase the likelihood that the plant is 
separated from the transmission system, causing significant degradation 
in Bulk-Power System reliability, characterized by instability, 
uncontrolled islanding and

[[Page 16595]]

cascading. Therefore, the Commission proposes to direct NERC to raise 
the violation risk factor for Requirements R4.2 and R4.3 from medium to 
high, and requests comment on this proposal.
c. Requirement R5
    56. The Commission proposes to direct NERC to raise the violation 
risk factor for Requirement R5 from medium to high, and seeks comment 
on its proposal. Requirement R5 states that a nuclear plant generator 
operator shall operate its system consistent with the interface 
agreement developed under NUC-001-1. Due to the size of nuclear power 
plants, the separation of a nuclear power plant from the grid may 
significantly affect grid operations. Not all nuclear power plant 
service interruptions are initiated by incidents occurring off the 
nuclear power plant system. For instance, if a nuclear power plant 
breaker opens, separating a turbine from the grid, the resulting lack 
of power could cause degraded voltage near the plant. As a result, the 
transmission system may be unable to deliver off-site power to the 
plant, causing the entire plant to separate from the grid.\34\ Due to 
the possibility for a violation of Requirement R5 to directly affect 
the reliability of the system, the Commission proposes to direct NERC 
to raise the violation risk factor for this Requirement from medium to 
high.
---------------------------------------------------------------------------

    \34\ Nuclear power plants are large, typically consisting of two 
large turbines on the order of 1,000 MW or more, so disruptions 
within the nuclear plant system can have significant reciprocal 
impacts on the interconnected system.
---------------------------------------------------------------------------

d. Requirements R7 and R8
    57. The Commission proposes to direct NERC to raise the violation 
risk factors for Requirements R7 and R8 from medium to high, and seeks 
comment on its proposal. Requirements R7 and R8 state that a nuclear 
plant generator operator and its transmission entities must inform each 
other of actual or proposed changes to their facilities that affect 
their ability to meet NPIRs. The information to be exchanged, such as 
``limits'' and ``protection systems,'' is relevant for a transmission 
entity to determine its system capability and configuration, which 
affect the ability of a plant to remain connected to the Bulk-Power 
System. Due to the safety implications of nuclear generation, a 
transmission entity must plan and operate to meet a nuclear power 
plant's operating requirements, which are more stringent than for other 
generators. To permit the necessary planning and system operations, a 
nuclear plant generator operator and its applicable transmission 
entities must exchange information relating to proposed and actual 
system changes. If transmission entities and nuclear plant generator 
operators do not provide information concerning system changes to each 
other, their planning and operating analyses may not be based on 
accurate data. As a result, unanticipated events could result in the 
nuclear plant disconnecting from the Bulk-Power System, placing the 
Bulk-Power System at risk for cascading outages.
    58. The Blackout Report highlighted the importance of coordinated 
planning and operations between the Bulk-Power System and nuclear power 
plants, stating ``[a]s the design and operation of the electricity grid 
is taken into account when evaluating the safety analysis of nuclear 
power plants, changes to the electricity grid must be evaluated for the 
impact on plant safety.'' \35\ To account for the potential impact on 
safety and the integrity of the transmission system, the Commission 
proposes to direct NERC to raise the violation risk factors for 
Requirements R7 and R8 from medium to high.
---------------------------------------------------------------------------

    \35\ Blackout Report at 129.
---------------------------------------------------------------------------

e. Requirement R9
    59. The Commission proposes to direct NERC to raise the violation 
risk factor for Requirement R9 from lower to medium, and seeks comment 
on its proposal. According to NERC, Requirement R9 sets forth the 
specific administrative, technical, operations, maintenance, 
coordination, communications, and training elements that a nuclear 
plant generator operator and its transmission entities must include in 
their interface agreement. Thus, similar to Requirement R2, Requirement 
R9 co-mingles the administrative element of incorporating the various 
elements into the interface agreement with the operational element of 
determining how the parties to the interface agreement will address the 
administrative, technical, operations, maintenance, coordination, 
communications, and training issues in order to provide for safe 
nuclear plant operation and shutdown. A violation of Requirement R9 may 
mean that the necessary operational or emergency planning elements are 
not in place, resulting in an inability to resolve system conditions in 
an emergency. Therefore, a violation of Requirement R9 ``could, under 
emergency, abnormal, or restorative conditions anticipated by the 
preparations, directly affect the electrical state or capability of the 
Bulk-Power System.'' Consequently, the Commission proposes to find that 
a medium violation risk factor is appropriate for Requirement R9. 
Should NERC wish to assign a lower violation risk factor to any of the 
purely administrative sub-Requirements of Requirement R9, it may 
propose appropriate differentiation in its comments.

F. Violation Severity Levels

    60. For each Requirement of a Reliability Standard, NERC states 
that it will also define up to four violation severity levels--lower, 
moderate, high and severe--as measurements of the degree to which the 
Requirement was violated. For a specific violation of a particular 
Requirement, NERC or the Regional Entity will establish the initial 
value range for the base penalty amount by finding the intersection of 
the applicable violation risk factor and violation severity level in 
the Base Penalty Amount Table in Appendix A of the Sanction 
Guidelines.\36\
---------------------------------------------------------------------------

    \36\ See North American Electric Reliability Corp., 119 FERC ] 
61,248, at P 74 (2007) (directing NERC to develop up to four 
violation severity levels (lower, moderate, high, and severe) as 
measurements of the degree of a violation for each requirement and 
sub-requirement of a Reliability Standard and submit a compliance 
filing by March 1, 2008).
---------------------------------------------------------------------------

    61. In its November 19, 2007 Petition, NERC proposes violation 
severity levels that apply generally to all violations of the 
Requirements of NUC-001-1, rather than to specific Requirements and 
sub-Requirements. However, NERC submitted proposed violation severity 
levels for each Requirement and sub-Requirement of NUC-001-1 that 
supersede those from the November 19, 2007 Petition pursuant to its 
March 3, 2008 compliance filing in Docket No. RR08-4-000.\37\
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    \37\ The updated NUC-001-1 violation severity levels are 
provided in NERC's March 4, 2008 filing of revised Exhibit A in 
Docket No. RR08-4-000.
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Commission Proposal
    62. Because NERC has recently filed new Requirement and sub-
Requirement-specific violation severity levels in Docket No. RR08-4-
000, the Commission intends to address all issues relating to NUC-001-1 
violation severity levels in that proceeding. In the interim, should 
the review process in Docket No. RR08-4-000 not approve revised 
violation risk factors before the NUC-001-1 effective date, the 
Commission proposes to approve the interim violation severity levels 
proposed in this proceeding, until acceptance of the superseding 
violation severity levels. The Commission notes that the proposed 
violation severity levels for NUC-001-1 resemble the levels of non-
compliance that will also be replaced by NERC's compliance

[[Page 16596]]

filing in Docket No. RR08-4-000 because they describe violation 
severity levels for groups of Requirements in the Reliability Standard 
rather than on a per-Requirement and sub-Requirement basis. Because 
NERC's proposed violation severity levels do not specifically refer to 
each Requirement and sub-Requirement in NUC-001-1, the Commission is 
concerned that, if the new violation risk factors are not approved by 
the time NUC-001-1 takes effect, Regional Entities may have difficulty 
using NERC's Base Penalty Amount Table to compute penalties for 
violations of all Requirements and sub-Requirements.\38\ While the 
Commission believes that the proposed effective date for NUC-001-1 
provides ample time to address the violation severity levels filed in 
Docket No. RR08-4-000, the Commission proposes to treat the proposed, 
undifferentiated violation severity levels for NUC-001-1 consistent 
with the treatment adopted for levels of non-compliance, until 
Requirement and sub-Requirement-specific violation severity levels are 
in place.\39\
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    \38\ See North American Electric Reliability Corp., 119 FERC ] 
61,248 at P 78-80.
    \39\ See id. P 79.
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III. Information Collection Statement

    63. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection requirements imposed by 
agency rules.\40\ Upon approval of a collection(s) of information, OMB 
will assign an OMB control number and an expiration date. Respondents 
subject to the filing requirements of this rule will not be penalized 
for failing to respond to these collections of information unless the 
collections of information display a valid OMB control number. The 
Paperwork Reduction Act (PRA) \41\ requires each federal agency to seek 
and obtain OMB approval before undertaking a collection of information 
directed to ten or more persons, or continuing a collection for which 
OMB approval and validity of the control number are about to 
expire.\42\ The PRA defines the phrase ``collection of information'' to 
be the ``obtaining, causing to be obtained, soliciting, or requiring 
the disclosure to third parties or the public, of facts or opinions by 
or for an agency, regardless of form or format, calling for either--

    \40\ 5 CFR 1320.11.
    \41\ 44 U.S.C. 3501-20.
    \42\ 44 U.S.C. 3502(3)(A)(i), 44 U.S.C. 3507(a)(3).

    (i) Answers to identical questions posed to, or identical 
reporting or recordkeeping requirements imposed on ten or more 
persons, other than agencies, instrumentalities, or employees of the 
United States; or (ii) answers to questions posed to agencies, 
instrumentalities, or employees of the United States which are to be 
used for general statistical purposes.'' \43\
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    \43\ 44 U.S.C. 3502(3)(A).

    64. This NOPR proposes to approve the new Reliability Standard 
developed by NERC as the ERO. Section 215 of the FPA authorizes the ERO 
to develop and enforce Reliability Standards that provide for an 
adequate level of reliability of the Bulk-Power System. Pursuant to the 
statute, the ERO must submit each Reliability Standard that it proposes 
to be made effective to the Commission for approval.\44\
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    \44\ See 16 U.S.C. 824o(d).
---------------------------------------------------------------------------

    65. Proposed Reliability Standard NUC-001-1 does not require 
responsible entities to file information with the Commission. Nor, with 
the exception of a three year self-certification of compliance, does 
the Reliability Standard require responsible entities to file 
information with the ERO or Regional Entities. However, the Reliability 
Standard does require responsible entities to develop and maintain 
certain information for a specified period of time, subject to 
inspection by the ERO or Regional Entities.
    66. Reliability Standard NUC-001-1 requires nuclear plant generator 
operators and entities that provide generation, transmission and 
distribution services relating to off-site power (these entities are 
defined as ``transmission entities'') to enter into interface 
agreements with nuclear plant generator operators that will govern 
certain communication, training, operational and planning elements for 
use in addressing generation and transmission system limits and nuclear 
licensing requirements. The Commission understands that most entities 
subject to this Reliability Standard already have such agreements in 
place. The responsible entities are also required to retain evidence 
that they executed such an agreement and incorporated its terms into 
systems planning and operations. Further, each nuclear plant generator 
operator and transmission entity must self-certify its compliance to 
the compliance monitor once every three years.
    67. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the PRA. Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing the respondent's burden, including the 
use of automated information techniques.
    68. Our estimate below regarding the number of respondents is based 
on the NERC compliance registry as of April 2007 and NERC's November 
19, 2007 Petition that is the subject of this proceeding. In its 
Petition, NERC states that 104 nuclear power plants are subject to the 
proposed Reliability Standard. These plants are run by approximately 30 
different utilities and are located on 65 different sites. Each plant 
must contract with transmission entities to obtain off-site power, and 
coordinate distribution and transmission services for such power.
    69. The proposed Reliability Standard identifies eleven categories 
of functional entities that could be a transmission entity when 
providing covered services, including transmission operators, 
transmission owners, transmission planners, transmission service 
providers, balancing authorities, reliability coordinators, planning 
authorities, distribution providers, load-serving entities, generator 
owners and generator operators. NERC's compliance registry indicates 
that there is a significant amount of overlap among the entities that 
perform these functions. Therefore, in some instances, a single entity 
may be registered under several of these functions. The November 19, 
2007 Petition includes NERC drafting team comments which report, ``In 
many cases, agreements are not two-party [agreements]--they are often 
multi-party agreements involving RTO/ISO Protocols, transmission and 
generation owners and others.'' \45\ Therefore, this analysis attempts 
to account for the overlap of services to be provided by entities 
responsible for the various roles identified in the Reliability 
Standard, as well as the fact that certain plants may need to 
coordinate with multiple entities.
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    \45\ NERC Nuclear Reliability Standard drafting team, 
``Consideration of Comments, Draft 2--SAR on Nuclear Plant Offsite 
Power Reliability,'' p. 2 of 25 (May 23, 2005), filed in November 
19, 2007 Petition, Exhibit B, Record of Development of Proposed 
Reliability Standard.
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    70. Under NUC-001-1, the 104 nuclear power plants must coordinate 
with off-site power suppliers and related transmission and/or 
distribution service providers. The Nuclear Reliability Standard 
drafting team reports in its responses to SAR comments, ``Nuclear plant 
generators and most nuclear offsite power supplies

[[Page 16597]]

interconnect with the bulk electric system at transmission system 
voltage levels. While backup station service for some plants may be 
provided via distribution lines, these cases are the exception, not the 
rule.'' \46\ Assuming conservatively, that not more than half of the 
nuclear power plants call for multi-party coordination and those that 
do involve all the types of parties listed by the drafting team, the 
Commission estimates that 52 nuclear plants will execute bi-lateral 
interface agreements and 52 nuclear plants will execute multi-lateral 
interface agreements with approximately four other parties. Thus, the 
Commission estimates that the 104 nuclear plants will enter into 
agreements with an additional 260 parties to bilateral and multi-party 
agreements, providing 364 as the total number of entities required to 
comply with the information ``reporting'' or development requirements 
of the proposed Reliability Standard. \47\
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    \46\ NERC Nuclear Reliability Standard drafting team, 
``Consideration of Comments on 2nd Draft of Nuclear Off-site Power 
Supply Standard,'' p. 54 of 60 (Feb. 7, 2007), filed in November 19, 
2007 Petition, Exhibit B, Record of Development of Proposed 
Reliability Standard.
    \47\ Because it is assumed that each plant operator must ensure 
that appropriate agreements are in place for each plant, this 
analysis assesses the workload by measuring the work for 104 plants, 
rather than for the 30 nuclear plant operators.
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    71. Burden Estimate: The Public Reporting burden for the 
requirements contained in the NOPR is as follows:

----------------------------------------------------------------------------------------------------------------
                                       Number of       Number of
          Data collection             respondents      responses     Hours per respondent    Total annual hours
----------------------------------------------------------------------------------------------------------------
FERC-725F:
    Nuclear Plant Owners or                    104               1  Reporting: 80........  Reporting: 8,320.
     Operators.
                                    ..............  ..............  Recordkeeping: 40....  Recordkeeping: 4,160.
Investor-Owned Utilities..........             130               1  Reporting: 80........  Reporting: 10,400.
                                    ..............  ..............  Recordkeeping: 40....  Recordkeeping: 5,200.
    Large Municipals, Cooperatives             130               1  Reporting: 80........  Reporting: 10,400.
     and other agencies.
                                    ..............  ..............  Recordkeeping: 40....  Recordkeeping: 5,200.
                                   -----------------------------------------------------------------------------
    Total.........................             364  ..............  .....................  43,680.
----------------------------------------------------------------------------------------------------------------

    Total Hours: (Reporting 29,120 hours + Recordkeeping 14,560 hours) 
= 43,680 hours. (FTE=Full Time Equivalent or 2,080 hours).
    Total Annual hours for Collection: Reporting + Recordkeeping = 
43,680 hours.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost to be the total annual hours (Reporting) 29,120 times 
$120 = $3,494,400.
    Recordkeeping = @ $40/hour = $582,400, with labor calculated as 
file/record clerk @ $17 an hour + supervisory @ $23 an hour.
    Total costs = $4,076,800.
    The Commission believes that this estimate may be conservative 
because most if not all of the applicable entities currently have 
agreements in place to provide for coordination between a nuclear plant 
generator operator and its local transmission, distribution and off-
site power suppliers. Furthermore, multiple plants are located on 
certain sites, and one entity may operate multiple plants, providing 
for potential economies in updating, drafting and executing the 
interface agreements.
    Title: FERC-725F, Mandatory Reliability Standard for Nuclear Plant 
Interface Coordination.
    Action: Proposed Collection of Information.
    OMB Control No: [To be determined].
    Respondents: Business or other for profit, and/or not for profit 
institutions.
    Frequency of Responses: One time to initially comply with the rule, 
and then on occasion as needed to revise or modify. In addition, annual 
and three-year self-certification requirements will apply.
    Necessity of the Information: The Nuclear Reliability Standard, if 
adopted, would implement the Congressional mandate of the Energy Policy 
Act of 2005 to develop mandatory and enforceable Reliability Standards 
to better ensure the reliability of the nation's Bulk-Power System. 
Specifically, the proposed Reliability Standard would ensure that 
system operating limits or SOLs used in the reliability planning and 
operation of the Bulk-Power System are coordinated with nuclear 
licensing requirements in order to ensure the safe operation and shut 
down of nuclear power plants.
    Internal review: The Commission has reviewed the requirements 
pertaining to the proposed Reliability Standard for the Bulk-Power 
System and determined that the proposed requirements are necessary to 
meet the statutory provisions of the Energy Policy Act of 2005. These 
requirements conform to the Commission's plan for efficient information 
collection, communication and management within the energy industry. 
The Commission has assured itself, by means of internal review, that 
there is specific, objective support for the burden estimates 
associated with the information requirements.
    72. Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Michael Miller, 
Office of the Executive Director, Phone: (202) 502-8415, fax: (202) 
273-0873, e-mail: michael.miller@ferc.gov]. Comments on the 
requirements of the proposed rule may also be sent to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission], e-mail: oira_submission@omb.eop.gov.

[[Page 16598]]

IV. Environmental Analysis

    73. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\48\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. The actions proposed here fall within the categorical 
exclusion in the Commission's regulations for rules that are 
clarifying, corrective or procedural, for information gathering, 
analysis, and dissemination.\49\ Accordingly, neither an environmental 
impact statement nor environmental assessment is required.
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    \48\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. ] 30,783 (1987).
    \49\ 18 CFR 380.4(a)(5).
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V. Regulatory Flexibility Act Analysis

    74. The Regulatory Flexibility Act of 1980 (RFA) \50\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
Most of the entities, i.e., planning authorities, reliability 
coordinators, transmission planners and transmission operators, to 
which the requirements of this rule would apply do not fall within the 
definition of small entities.\51\
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    \50\ 5 U.S.C. 601-12.
    \51\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act, which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. See 
15 U.S.C. 632 (2000). According to the SBA, a small electric utility 
is defined as one that has a total electric output of less than four 
million MWh in the preceding year.
---------------------------------------------------------------------------

    75. As indicated above, based on available information regarding 
NERC's compliance registry, approximately 364 entities, including 
owners and operators of 104 nuclear power plants, will be responsible 
for compliance with the new Reliability Standard. It is estimated that 
one-third of the responsible entities, about 130 entities, would be 
municipal and cooperative organizations. In addition to generator 
owners and operators and distribution service providers, the proposed 
Reliability Standard would apply to planning authorities, transmission 
planners, transmission operators and reliability coordinators, which 
tend to be larger entities. Thus, the Commission believes that only a 
portion, approximately 30 to 40 of the municipal and cooperative 
organizations to which the proposed Reliability Standard would apply, 
qualify as small entities.\52\ The Commission does not consider this a 
substantial number of all municipal and cooperative organizations. 
Moreover, as discussed above, the proposed Reliability Standard will 
not be a burden on the industry since most if not all of the applicable 
entities currently coordinate operations and planning with nuclear 
plant generator operators and the proposed Reliability Standard will 
simply provide a common framework for agreements governing such 
coordination and many of the entities already have agreements in place 
to meet prior NRC requirements. Accordingly, the Commission certifies 
that the proposed Reliability Standard will not have a significant 
adverse impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \52\ According to the DOE's Energy Information Administration 
(EIA), there were 3,284 electric utility companies in the United 
States in 2005, and 3,029 of these electric utilities qualify as 
small entities under the SBA definition. Among these 3,284 electric 
utility companies are: (1) 883 cooperatives of which 852 are small 
entity cooperatives; (2) 1,862 municipal utilities, of which 1842 
are small entity municipal utilities; (3) 127 political 
subdivisions, of which 114 are small entity political subdivisions; 
and (4) 219 privately owned utilities, of which 104 could be 
considered small entity private utilities. See Energy Information 
Administration Database, Form EIA-861, Dept. of Energy (2005), 
available at http://www.eia.doe.gov/cneaf/electricity/page/
eia861.html.
---------------------------------------------------------------------------

    76. Based on this understanding, the Commission certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities. Accordingly, no regulatory flexibility 
analysis is required.

VI. Comment Procedures

    77. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due April 28, 2008. Comments must refer to 
Docket No. RM08-3-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    78. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at: http://
www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    79. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426.
    80. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VII. Document Availability

    81. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    82. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    83. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at (866) 208-3676) or email at: 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at: 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 40

    Electric power, Reporting and recordkeeping requirements.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
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