On June 15, 2023, the Federal Energy Regulatory Commission (FERC) issued a Final Rule directing NERC to develop a new or modified reliability standard addressing transmission system planning performance requirements for extreme heat or cold weather events. The development of mandatory compliance steps for benchmarking and corrective action plans (CAPS) will significantly impact transmission planning processes.
Benchmarking and Corrective Action Plan Impacts
There are many details in this order and TRC clients with transmission planning obligations under NERC registration are advised to review the Final Rule and its directives closely to understand the key impacts and potential required changes to the planning process.
As a result of the Rule as directed by FERC, NERC must develop a Standard that requires:
- Development of benchmark planning cases based on prior extreme heat and cold weather events and/or future meteorological projections.
- Planning for extreme heat and cold events using steady state and transient stability analyses that cover a range of extreme weather scenarios, including the expected resource mix’s availability during extreme weather conditions and the broad area impacts of extreme weather.
- Corrective action plans that include mitigation activities for specified instances where performance requirements during extreme heat and cold events are not met.
FERC noted that without specific requirements describing the types of heat and cold scenarios that utilities must study, the new or modified Reliability Standard may not provide a significant improvement upon the status quo. Benchmark events will provide defined scenarios for the basis for assessing system performance during extreme heat and cold weather events. Benchmark events will also form the basis for a planner’s benchmark planning case—i.e., the base case representing system conditions under the relevant benchmark event—that will be used to study the potential wide-area impacts of anticipated extreme heat and cold weather events.
While there is currently no established guidance or set of tools in place to facilitate the development of extreme heat and cold benchmark events for the purpose of informing transmission system planning, NERC must consider the examples of approaches for defining benchmark cold and heat events identified in the NOPR (e.g., the use of projected frequency or probability distributions; of extreme weather). FERC noted that NERC may also consider other approaches that achieve the objectives outlined in its final rule.
Because the impact of most extreme heat and cold events spans beyond the footprint of individual planning entities, it is important that all utilities likely to be impacted by the same extreme weather events use consistent benchmark events. For instance, a benchmark event could be constructed based on data from a major prior extreme heat or cold event, with adjustments if necessary to account for the fact that future meteorological projections may estimate that similar events in the future are likely to be more extreme.
FERC agreed that because different regions experience weather conditions and weather impacts differently, a single benchmark event for the entire nation is unlikely to meet the objectives of this final rule. Accordingly, in developing extreme heat and cold benchmark events, NERC shall ensure that benchmark events reflect regional differences in climate and weather patterns.
NERC was directed to include in the Reliability Standard the framework and criteria that utilities shall use to develop studies from the relevant benchmark event planning cases to represent potential weather-related contingencies (e.g., concurrent/correlated generation and transmission outages, derates). These studies should include expected future conditions on the system such as changes in load, interregional transfers, generation resource mix, and weather impacts on generators sensitive to extreme heat or cold due to the weather conditions indicated in the benchmark events. Developing such a framework would provide a common design basis for utilities to follow when creating benchmark planning cases. This would not only help establish a clear set of expectations for utilities to follow when developing benchmark planning events, but also facilitate auditing and enforcement of the Standard.
These standards development directives are significant regulatory events which will implement fundamental changes in transmission planning processes.
The process will evolve through the NERC standards development process and will ultimately lead to the need to the develop revised compliance programs for transmission planning. TRC utility clients with transmission planning responsibilities should follow this development with an eye toward compliance with modified NERC mandatory standards. This will ultimately require modification of transmission planning processes and your company’s NERC compliance programs, procedures and internal controls.
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This regulatory update is provided as a service to TRC’s utility clients, helping to keep you informed of forward-looking issues that will impact your company’s electric system reliability risks along with related topics regarding regulatory developments to help you achieve your company’s business goals.