FERC Identified NERC’s Rules of Procedure Revision Proposal as Deficient

Summary:

On August 18, 2021, North American Electric Reliability Corporation (NERC) submitted proposed revisions to the NERC Rules of Procedure regarding Reliability Standards. Specifically, NERC proposes revisions to Section 300, Reliability Standards Development; Appendix 3B, Procedure for Election of Members of the Standards Committee; and Appendix 3D, Development of the Registered Ballot Body. Generally, NERC stated that the proposed revisions consist of updates to staff titles, processes, and other language; clarifications to roles and responsibilities with regard to Reliability Standards; and removing unnecessary or duplicative obligations. Among other changes to the Rules of Procedure, NERC proposed to revise sub-section 3.3 of section 305 (Registered Ballot Body), which governs the frequency in which NERC reviews the qualification guidelines and rules for industry members to join the 10 industry segments that vote on NERC Reliability Standards. Instead of reviewing segment criteria at least every three years, NERC proposed to modify section 305.3.3 to require review of the guidelines and rules for joining segments “periodically.” NERC stated this revision was necessary to provide consistency with its guidelines in Appendix 3D of the NERC Rules of Procedure. FERC stated that the filing was deficient and additional information is required by the Commission to evaluate the filing with respect to proposed changes in section 305.3.3 of the NERC Rules of Procedure. (Source: NERC Petition for Approval of Revisions to the NERC Rules of Procedure Regarding Reliability Standards)

Additional Discussion:

FERC Required the Following Questions be Addressed:

• NERC states that the proposed revision to section 305.3.3 is for consistency with similar provisions in Appendix 3D. Currently, section 305.3.3 requires a review of the guidelines and rules for industry members to join NERC’s industry segments that vote on proposed Reliability Standards at least every three years, and Appendix 3D requires periodic review for the same set of guidelines and rules.
• • Please explain why it is preferable to revise section 305.3.3 to require periodic review instead of updating Appendix 3D to require review every three years. For example, if NERC seeks additional flexibility as to when it conducts the reviews, please explain why additional flexibility is needed.
  • Please explain any issues encountered with conducting these reviews “at least every three years,” and how the shift to “periodic” reviews addresses these issues.
  • Please also explain how NERC conducts reviews “at least every three years” under the current provision, such as the timing and process for conducting these reviews.
  • How often were the reviews conducted? If reviews occurred less than every three years, explain what circumstances triggered or preempted a review of segment criteria in a period less than three years.
  • The current provisions for reviewing segment criteria in both section 305.3.3 and Appendix 3D state that “public input will be solicited in the review of these guidelines.”
• Please explain the process that NERC uses to solicit public input when reviewing segment criteria.
• Please also explain, outside of this review process, whether stakeholders/public can provide input or report on potential inequities in the segment criteria, and whether and how this has occurred in the past.
• Please indicate how often previous reviews of the segment criteria have resulted in changes to qualification guidelines/rules and describe the nature and significance of those changes.
• Please explain the periodicity NERC intends to use instead of “at least every three years.”
• What events would trigger a review of segment criteria, and on what basis would NERC determine that a review is necessary to ensure the segment criteria process continues to be fair, open, balanced, and inclusive?
• What is the maximum amount of time that NERC expects could elapse between reviews of the segment criteria if the proposal were enacted?
• Would future Performance Assessments conducted per 18 C.F.R § 39.3(c) also include reviews of the registered ballot body segment criteria?
• Please explain any process changes for conducting reviews that may change as a result of not having a review period on a regular periodic timetable in the NERC Rules of Procedure.

Associated Files:

• 20220224-3016_RR21-8-000 - Deficiency Letter