On January 19, 2017, FERC approved Reliability Standard BAL-002-2, Disturbance Control Standard—Contingency Reserve for Recovery from a Balancing Contingency Event, which is designed to “ensure that balancing authorities and reserve sharing groups balance resources and demand and return their Area Control Error to defined values following a Reportable Balancing Contingency Event.” In doing so, FERC also directed the North American Electric Reliability Corporation (“NERC”) to: (1) collect and report on data regarding additional energy losses following Reportable Balancing Contingency Events during the Contingency Reserve Restoration Period; and (2) study and report on reliability risks associated with energy losses above the most severe single contingency that do not cause energy emergencies.
On May 19, 2016, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to approve BAL-002-2, NERC’s eight new or revised definitions to be added to the NERC Glossary, and a corresponding implementation plan (see May 25, 2016 edition of the WER). In the NOPR, FERC stated that BAL-002-2 improves upon BAL-002-1 by consolidating requirements to streamline and clarify balancing authorities’ and reserve sharing groups’ obligations. However, FERC sought comment on BAL-002-2’s 15-minute Area Control Error recovery period and 90-minute Contingency Reserve Restoration Period. Similarly, FERC expressed concerns regarding a “time-reset” component of BAL-002-2’s requirement that a balancing authority or reserve sharing group restore its contingency reserves within 90 minutes of a Contingency Event Recovery Period. Finally, FERC also sought comment on a reliability “gap” it identified that may occur under BAL-002-2 and under NERC’s proposed definition of “Reportable Balancing Contingency Event.”
In its order, FERC approved BAL-002-2 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. In addition, FERC approved NERC’s new or revised definitions and implementation plan. Furthermore, FERC affirmed its finding that BAL-002-2 improves upon BAL-002-1 by consolidating the number of requirements for balancing authorities and reserve sharing groups. Moreover, FERC concluded that BAL-002-2 satisfies Order No. 693’s directives that NERC develop a continent-wide contingency reserve policy and that demand side management may be used as a resource for contingency reserves.
However, FERC did not adopt the NOPR’s proposal to require reliability coordinator authorization to extend the 15-minute Area Control Error recovery period or the NOPR’s proposal that NERC modify BAL-002-2 to establish a firm requirement that responsible entities must restore contingency reserves within the 90-minute Contingency Reserve Restoration Period. Finally, FERC directed NERC to: (1) collect and report on data regarding the occurrence of Balancing Contingency Events that trigger resets of the 90-minute Contingency Reserve Restoration Period; and (2) study and submit a report to FERC with findings regarding reliability risks associated with most severe contingency exceedances that do not result in energy emergencies.
A copy of the order is available here.