FERC Issues a NOPR Proposing Reliability Standards Addressing Potential Impacts of Solar Storms
On October 18, 2012, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) seeking comments on a proposed rule to direct the North American Electric Reliability Corporation (NERC) to submit for approval Reliability Standards that address the impact of geomagnetic disturbances (GMD) on the reliable operation of the Bulk-Power System. GMDs are caused by solar storms. Currently, there are no NERC Reliability Standards directly addressing GMDs. Comments on the NOPR are due 60 days following publication in the Federal Register.
Background
FERC explains that it is issuing this NOPR based on government-sponsored studies and NERC studies, referencing a 2010 study prepared by Oak Ridge National Laboratory and a 2012 NERC Interim GMD Report. The Oak Ridge report found that a solar storm similar to one that occurred in 1921 could destroy up to 300 Bulk-Power System transformers, and interrupt service to 130 million people for a period of years. The NERC Report identified two risks to the Bulk-Power System from geomagnetically induced currents (GIC) from solar storms: (1) damage to transformers and (2) loss of reactive power support. FERC also highlighted in the NOPR its Technical Conference on April 30, 2012, where several panelists indicated that severe GMD events could potentially compromise the reliable operation of the Bulk-Power System.
While not specifically referenced in the NOPR, Congress has considered legislation directing the development of GMD Reliability Standards. Both the GRID Act (H.R. 5026, which passed the House on June 9, 2010) and the SHIELD Act (H.R. 668, introduced on February 11, 2011) contained a requirement that FERC direct NERC to develop Reliability Standards to protect the Bulk-Power System from any reasonably foreseeable geomagnetic storm event.
Key Elements of the NOPR
FERC proposes to direct NERC to develop GMD Reliability Standards in two stages. In the first stage, FERC proposes to direct NERC to file one or more Reliability Standards “that require owners and operators of the Bulk-Power System to develop and implement operational procedures to mitigate the effects of GMDs consistent with the reliable operation of the Bulk-Power System.” Operational procedures can include (1) reduction of equipment loading; (2) unloading the reactive load of operating generation; (3) reductions of system voltage; and (4) system and/or equipment isolation through reconfiguration of the transmission system. FERC acknowledges that the 90 day deadline is aggressive, but “mandatory and enforceable Reliability Standards requiring owners and operators to implement operational procedures should be established quickly to afford some level of uniform protection to the Bulk-Power System against GMD events.”
FERC is also proposing to accept the following NERC proposals from its May 21, 2012 post-Technical Conference comments: (1) identify facilities most at-risk from severe geomagnetic disturbance and (2) conduct a wide-area geomagnetic disturbance vulnerability assessment. FERC therefore proposes to direct NERC to implement these proposals simultaneously with the development and implementation of the first stage GMD Reliability Standards.
In stage two, FERC proposes to direct NERC to develop Reliability Standards that require owners and operators of the Bulk-Power System to conduct initial and on-going assessments of the potential impact of GMDs on Bulk-Power System equipment and on the Bulk-Power System as a whole and, based on those assessments, require owners and operators to develop and implement a plan, which could include automatically blocking GICs. The first aspect of the second stage Reliability Standards relates to conducting vulnerability assessments to determine how critical or vulnerable Bulk-Power System components react to simulated GICs of varying intensities. FERC then proposes to require NERC to develop Reliability Standards that require owners and operators of the Bulk-Power System to implement a plan “so that instability, uncontrolled separation, or cascading failures of the Bulk-Power System, caused by damage to critical or vulnerable Bulk-Power System equipment, or otherwise, will not occur as a result of a GMD.” While FERC states in the NOPR that it is not proposing to require any particular solution, such as blocking technologies, FERC is proposing to direct NERC to identify in the proposed Reliability Standards what would constitute appropriate automatic blocking measures.
FERC is proposing that the stage one Reliability Standards (operational procedures) be filed within 90 days of the effective date of a final rule, and is also encouraging NERC to include an implementation schedule that would implement the required operational procedures 90 days after approval of the standards by FERC. FERC is proposing to direct NERC to file its second stage Reliability Standards within six months of the effective date of the final rule, but is seeking comments on the feasibility of that deadline. FERC acknowledges that these second stage Reliability Standards will likely require an extended, multi-phase implementation period, given the time needed to conduct the required assessments and the time and cost of installing any required automatic protection measures, and is seeking comments on an appropriate implementation schedule.
If you have any questions or seek additional information, please contact Bonnie Suchman.
© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.