FERC on Nov. 28 accepted NERC’s proposed changes to its reliability standards development process, but it ordered the ERO to submit a follow-up filing by May 2025 to review the effectiveness of the new provisions (RR23-4).

The changes are intended to streamline the development process and allow a faster response to emerging issues. They will primarily affect section 300 and Appendix 3A of NERC’s Rules of Procedure. NERC’s Board of Trustees approved the revisions at its August meeting in Ottawa and submitted them to FERC for approval the following month. (See “Standards Process Changes Accepted,” NERC Board of Trustees/MRC Meeting Briefs: Aug. 16-17, 2023.)

Section 300 of the ROP provides for “public comment, due process, openness and a balance of interests in developing proposed reliability standards,” FERC’s order noted, while Appendix 3A constitutes the ERO’s Standard Processes Manual (SPM), which sets out how standards are to be developed and revised, along with violation risk factors and severity levels, definitions of terms and reference documents.

Board Authority in ‘Extraordinary Circumstances’

Under a newly added section 322, NERC’s board would have the authority to direct the development of a new or revised standard “in extraordinary circumstances, where the board determines a directive is essential to provide for an adequate level of reliability for the” power grid, an event NERC’s petition called “unlikely and unusual.”

Currently, NERC’s board can make such a directive only when the commission or another governmental body has directed the development of a standard but the ERO’s normal development process has failed to satisfy industry consensus.

If the board does decide to authorize the development of a standard, the new section will require it to provide preliminary written notice, with its reasoning for ordering the standard, and set a public comment period of at least 45 days. Standards the board orders under this new authority will be developed using the SPM and subject to the same requirements for public comment and balloting.

Changes to the SPM include creating a tiered system of comment periods, under which the initial 45-day comment and balloting periods would be followed by shorter comment periods of as little as 30 days, when “appropriate for a smaller number of changes affecting a [smaller] number of standards.” The length of the comment period would be determined by the standards drafting team responsible for the project.

In addition, drafting teams will be allowed to conclude a standards action without a final ballot if the previous ballot received approval from at least 85% of the ballot body; the team has “made a good faith effort at resolving applicable objections” and responded to comments in writing; and no further changes are proposed. If no final ballot is conducted, NERC will provide notice of the outcome as if the ballot had been conducted.

Additional revisions to the ROP include retiring section 316, which “commits the ERO to seeking and maintaining” certification from the American National Standards Institute (ANSI) for its standards development process.

NERC observed in its petition that FERC does not require ANSI accreditation, but that the ERO initially used the process to satisfy the commission’s requirement that its rules provide due process and openness. After “15 years of operating in a unique, multijurisdictional framework,” NERC now believes retiring the ANSI requirement will allow more flexibility in its development approach.

FERC Wants Follow-up in 2025

While the commission agreed with improving the speed and flexibility of the standards development process, it also noted the “need for a timely and responsive … process given the rapid pace of change in the reliability and security of the” grid.

To assess the suitability of the ROP revisions, FERC directed NERC to submit, within 18 months of the commission’s order, an informational report on the effectiveness of the changes and whether any further refinements are needed. FERC said the report should include:

• • data on the ERO’s performance since approval, such as a comparison of development times for standards before and after implementation;
  • discussion of how the revised procedures have helped NERC expedite standards on topics such as resource mix changes, cybersecurity and extreme weather;
  • whether and why any standards have been delayed;
  • recommendations for addressing further concerns with the standard development process; and
  • discussion of how NERC has continued to meet FERC’s requirement of a fair and open process.

Commissioner James Danly did not participate in the decision.