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On February 16, 2023, the Federal Energy Regulatory Commission (“FERC”) issued an order approving two extreme cold weather reliability standards: EOP-011-3 (Emergency Operations) and EOP-012-1 (Extreme Cold Weather Preparedness and Operations) proposed by the North American Electric Reliability Corporation (“NERC”), subject to modification.[1] The approved Reliability Standards help to maintain reliable operation of the Bulk Power System by ensuring that enough generating units will be available during a cold weather event. According to FERC, the proposed Reliability Standards EOP-011-3 and EOP-012-1 are improvements to the existing Reliability Standards, but NERC must address additional concerns such as ambiguity, applicability, and compliance timelines. NERC is directed to submit modifications within twelve months.

In 2021, FERC and NERC announced a joint inquiry into the operations of the bulk-power system during extreme winter weather conditions. FERC and NERC released a final report (November 2021 Report) on Winter Storm Uri and the impact on the reliability of the bulk electric system. In response to the findings in the November 2021 Report, NERC proposed an initial series of cold weather reliability standards, which required generator owner/operators (GOs) to implement cold weather plans. FERC approved the proposed initial standards in August 2021, and they went into effect on April 1, 2023.[2] The February 16th Order and the two approved reliability standards are a continuation of the process to address an “ongoing risk posed by extreme cold weather events to the bulk power system.”

I. EOP-011-3 (Emergency Operations):

Reliability Standard EOP-011-3 aims to improve on the existing EOP-011-2 by placing obligations on transmission operators to implement plans to prevent future weather emergencies. Among other things, EOP-011-3 seeks to ensure that transmission operators are adequately prepared for emergencies and their emergency operation plans appropriately mitigate risks related to load shed. Reliability Standard EOP-011-3 will require each transmission operator to implement plans for emergency operations and coordinate such plans with the reliability coordinator area. Specifically, it requires transmission operators to account for the overlap of manual load shed and automatic load shed in its emergency operating plans. Additionally, those emergency operating plans must address the need to minimize usage of manual load shed that could worsen the situation and threaten reliability.

II. EOP-012-1 (Extreme Cold Weather Preparedness and Operations):

During Winter Storm Uri, over 1,000 generating units experienced massive outages, derates, or failures to start. The November 2021 Report found that seventy-five percent were caused either by freezing or fuel issues. As a result of the widespread failure of generating units, grid operators were forced to shed load. The stated purpose of Reliability Standard EOP-012-1 is “to ensure that each generator owner develops and implements plans to alleviate the reliability effects of extreme cold weather on its generating units.”

In total, EOP-012-1 contains seven separate requirements, four of which are most noteworthy. Requirement R3 contained within EOP-012-1 requires GOs to implement freeze protection measures for all applicable units, which must be based on the applicable Extreme Cold Weather Temperatures to ensure the capability to operate at that temperature. Requirement R5 requires GOs to implement cold weather preparedness plans and provide annual personnel training. Additionally, Requirement R4, requires GOs to review their Extreme Cold Weather Temperature calculation, cold weather preparedness plans, and freeze protection measures every five years to determine if changes or updates are needed.

Any generator that experiences a Generator Cold Weather Reliability Event, which NERC defines as a forced outage, a start-up failure or forced derate due to freezing conditions, is also required to develop a Corrective Action Plan (CAP). The CAP must include a summary identifying the causes, a review of similar equipment owned by the generator, and an identification of any temporary operating limitations or any impacted cold weather preparedness plan. If required to implement a corrective action plan, and a generator fails to implement such plan, the GO must explain in a declaration the technical, commercial, or operational constraints preventing implementation.

III. FERC Directs Modifications:

In the February 16, 2023 order, FERC acknowledged that NERC’s proposed changes are an improvement to the existing requirements, but found that they need to be strengthened to address “undefined terms, broad limitations, exceptions and exemptions, and prolonged compliance periods.” Specifically, FERC directed the following modifications:

  • Finding that “excluded generating units should be the exception and not the rule,” FERC directed NERC to modify certain terms used in the applicability section of EOP-012-1 to ensure that the standard captures all bulk electric system generation units needed for reliable operation in cold weather events.
  • FERC directed NERC to modify EOP-012-1, Requirements R1 and R7 to include objective criteria on permissible technical, commercial or operational constraints that exempt GOs from implementing freeze protection measures. The Modifications should also specify the appropriate entity to receive the GO’s constraint declarations and how that entity would confirm the GO’s compliance with the objective criteria established.
  • NERC must modify EOP-012-1, Requirement R1, to ensure that generators that are technically capable of operating for 12 continuous hours, such as solar facilities during winter months with less than 12 hours of sunlight, are not excluded from complying with the standard. 
  • Existing EOP-012-1, Requirement R2, requires GOs to add new or modify existing freeze protections measures to allow the unit to operate for not less than one hour at the unit’s Extreme Cold Weather Temperature. FERC found that one hour was too short and directed NERC to increase the one-hour continuous operation requirement.
  • EOP-012-1, Requirement R7, must include deadlines for completing implementation of corrective action plans.

Finally, FERC directed NERC to shorten the proposed 60-month implementation period for existing generators to implement freeze protection measures. While giving NERC some flexibility to propose a shorter compliance time frame, and to provide a phased implementation plan, FERC noted that “the industry has been aware of and alerted to the need to prepare their generating units for cold weather since at least 2011.” In the meantime, NERC must submit a plan explaining how it will collect and assess data regarding generator owner declared constraints and the adequacy of the Extreme Cold Weather Temperature definition.

IV. Generator Implications:

With some exceptions, Reliability Standard EOP-012-1 is intended to apply to:

“[a] Blackstart Resource… or Bulk Electric System generating unit that commits or is obligated to serve . . . pursuant to a tariff obligation, state requirement . . . , or other contractual arrangement, rule, or regulation, for a continuous run of four hours or more at or below a temperature of 32 degrees Fahrenheit (zero degrees Celsius).” 

The Reliability Standards contained in EOP-012-1, and the subsequent modifications, will have a direct impact on many GOs and will require significant compliance measures. Undoubtedly, GOs will need adequate time to develop, implement, and sustain the extreme cold weather reliability standards and the included plans and measures. Only generators not needed for reliability operation during freezing conditions will be excluded from the standard. Nevertheless, the currently effective EOP-011-2, with requirements to implement and maintain cold weather preparedness plans and associated training, applies to all bulk electric system generating units. Some compliance deadlines for new requirements are not yet known, but some deadlines may be expedited over current requirements.

The Texas Reliability Entity, Inc. (“TRE”), through a FERC approved Delegation Agreement with NERC, is authorized to monitor, assess, and enforce compliance with NERC Reliability Standards. TRE held a NERC Standards Review Forum on Thursday, March 23, 2023. TRE provided an update on the newly adopted standards and will likely provide additional information and training opportunities to assist generators in implementing the required measures. Generator owners in Texas should prepare to implement the appropriate measures to ensure compliance with the new standards.

Please contact Husch Blackwell LLP’s energy regulatory team if you have any questions about these NERC Reliability Standards developments.

[1] N. Am. Elec. Reliability Corp., 182 FERC ¶ 61,094 (2023).

[2] N. Am. Elec. Reliability Corp., 176 FERC ¶ 61,119 (2021).

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Photo of Linda Walsh Linda Walsh

Linda focuses on regulatory issues affecting the electric utility industry.

Photo of Mackinlee Rogers Mackinlee Rogers

Mackinlee assists with regulatory analysis for corporate transactions, primarily in the energy sector.

Mackinlee always knew a legal career would be a perfect fit for her logical, analytical mind. A problem solver who thrives on collaboration, she was drawn to corporate and transactional

Mackinlee assists with regulatory analysis for corporate transactions, primarily in the energy sector.

Mackinlee always knew a legal career would be a perfect fit for her logical, analytical mind. A problem solver who thrives on collaboration, she was drawn to corporate and transactional work, and she loves the challenge of assembling the puzzle pieces of a perfect deal.

During both her undergraduate and law school years, Mackinlee interned with a renewable energy company which worked with investors and developers to maximize the economics of renewable energy projects. The experience fostered a passion for renewable energy as Mackinlee served on developer’s and investor’s counsel teams for wind farm acquisitions and solar photovoltaic systems. She’s eager to work in the industry in the midst of the ongoing energy transition, and she’s excited to watch the development of renewable energy forms over the course of her career.

Prior to joining the firm as a full associate, Mackinlee spent a season as a summer associate assisting the renewable energy team with transactional work. She was especially enthusiastic about the national scope of Husch Blackwell’s practice and about the opportunity to collaborate with attorneys across the country. Today, Mackinlee handles the regulatory aspects of transaction due diligence for energy projects and is building a reputation as a trustworthy, hard-working professional who gets the job done.