Revision to Electric Reliability Organization Definition of Bulk Electric System

In this Final Rule, pursuant to section 215 of the Federal Power Act (FPA),\1\ the Federal Energy Regulatory Commission (Commission) adopts, with modifications, the proposal outlined in its March 18, 2010 Notice of Proposed Rulemaking to require the Electric Reliability Organization (ERO) to revise its definition of the term "bulk electric system." \2\ The Commission directs the ERO, through the ERO's Reliability Standards Development Process, to revise the definition to address the Commission's technical concerns, as discussed fully below, and ensure that the definition encompasses all facilities necessary for operating an interconnected electric transmission network. The Commission believes that the best way to accomplish these goals is to eliminate the regional discretion in the current definition, maintain a bright-line threshold that includes all facilities operated at or above 100 kV except defined radial facilities, and establish an exemption process and criteria for excluding facilities that are not necessary for operating the interconnected transmission network. However, this Final Rule allows the ERO, in accordance with Order No. 693, to develop an alternative proposal for addressing the Commission's concerns with the present definition with the understanding that any such alternative must be as effective as, or more effective than, the Commission's proposed approach in addressing the identified technical and other concerns, and may not result in a reduction in reliability. ---------------------------------------------------------------------------