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Regulatory Updates

NERC and FERC Take Action on Facilities Ratings

Dylan Achey and Jim Whitaker, PE | December 4, 2020

NERC’s mandatory FAC-008-3 standard sets out requirements for transmission asset owners to ensure that facility ratings used in the reliable planning and operation of the Bulk Electric System (BES) are determined based on technically sound principles.  Facility ratings are essential for determining system operating limits. Violations are often seen in compliance audits, sometimes due to lack of internal controls.

Over the past ten years, there has been significant work across the electric industry to improve facility ratings related processes, programs, frameworks, internal controls and best practices. Yet this continues to be a challenging area for utilities, particularly from an asset management and regulatory compliance perspective. A single substation or generating plant can be comprised of hundreds of AC current carrying elements which need to be tracked. Inadequate asset change management controls (or complete lack of) often result in compliance violations.

The Current Regulatory Requirements

During development of FAC-008, NERC was directed to implement numerous standard changes including a requirement to identify the second most limiting facilities in order to improve understanding of limitations on the delivery of electricity due to transmission constraints. NERC endorsed a FAC-008-3 Application Guide that addressed these issues

For example, to comply with Requirement 6 of FAC-008-3 , the guidance recommends the ratings of each BES Facility should be maintained in a process that allows the company to:

  • Identify each BES Facility
  • Identify the rating of each Element
  • Identify the most limiting and the next most limiting Element identified by the owner
  • Identify most limiting and the next most limiting Element identified by joint owner
  • Identify the overall most limiting and the next most limiting Element overall determining the Facilities Normal and Emergency Ratings

FERC Joins the Facility Ratings Discussion Again

On November 19, 2020 FERC released a Notice of Proposed Rulemaking (NOPR) suggesting a broad, industry wide move from seasonal static to dynamic facility ratings to maximize the capability of delivery facilities. This NOPR and the potential changes it will cause if implemented impacts the already complex issue of facility ratings management. This makes it even more critical for technical experts to become involved in the evaluation of current facility rating internal controls, processes, procedures, oversight.

FERC is taking an interest in this subject to promote greater utilization of existing delivery facilities. In its NOPR FERC identifies that under typical practices today, as implemented in the FAC-008-3 ratings methodologies, facility ratings are frequently seasonal or non-changing static ratings. FERC notes that these ratings are often also based on conservative assumptions about the worst-case, long-term ambient conditions that power delivery equipment might face. The ratings are typically updated only when equipment is changed, or ambient condition assumptions are revised. While some utilities already implement ambient-adjusted ratings (AARs) and dynamic line ratings (DLRs). Many utilities do not use AAR and DLR facility rating methods.

The FERC NOPR proposes to require implementation of AARs and seasonal line ratings. Transmission providers would use AARs for evaluating requests for near-term transmission service, and would use seasonal ratings for evaluating other, longer-term transmission service requests. Any ratings would have to be tracked using the methods which support compliance verification for FAC-008-3 purposes.

If your company does not already use AAR or DLR facility ratings processes, you should consider exploring the implications of the FERC NOPR (if it is adopted as a rule) for your company. TRC can help by independently reviewing your ratings methods, data management practices and the interactions with the planning and operating processes within your company. An independent review will help your company stay ahead of this changing regulatory environment.

Next Steps

TRC clients are advised to carefully review their FAC-008-3 compliance programs in light of the FERC NOPR and assess whether an independent review might be beneficial. NERC and FERC’s future direction will likely impact compliance for both transmission and generation companies.  TRC can assist by providing an independent review of your company’s FAC-008-3 standard compliance internal controls and asset management processes along with any related implementation issues.


About TRC

TRC’s approach to power system planning, design and operations balances solutions that incorporate appropriate standards, regulatory requirements, best practices, operational goals and budgets. Our work for public and private sector clients is a testament to our understanding of power system operations and planning and our successful application of technological solutions in a constantly evolving business and regulatory landscape.

This regulatory update is a service to TRC’s utility clients, helping keep you informed of issues that impact your company’s electric system security risks along with related topics regarding future regulatory developments to help you achieve your company’s business goals.

Dylan Achey

Dylan Achey is TRC’s Manager of Generation Engineering Services. He has been leading the effort with TRC generation clients on evaluating and providing updates/information so that clients can meet applicable NERC standards. His highly technical staff perform NERC compliance standard evaluations as well as studies for both generation and transmission clients that need assistance on technical issues concerning NERC compliance. Contact Dylan at

Jim Whitaker, PE

Jim Whitaker, PE is Supervisor of Power Systems Studies at TRC. He has over 30 years of experience in Transmission and Distribution Planning, and Substation, Transmission and Distribution Engineering. His Transmission Planning projects include coordinating joint/regional 10-year transmission plans, generator interconnections, regional system assessments, as well as NERC compliance studies. His projects have included studies for both Utilities and Project Developers across the United States in the Eastern and Western Interconnection transmission systems as well as ERCOT. Prior to joining TRC, Jim worked for Xcel Energy, Peak Power Engineering, Tucson Electric Power and Virginia Power. Contact Jim at

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