On February 16, 2023, FERC approved two new extreme cold weather Reliability Standards—EOP-011-3 (Emergency Operations) and EOP-012-1 (Extreme Cold Weather Preparedness and Operations)—filed by the North American Electric Reliability Corporation (“NERC”) and aimed at implementing the recommendations resulting from a joint inquiry into the circumstances surrounding Winter Storm Uri. However, FERC also directed modifications to EOP-012-1 to address what FERC characterized as concerns over the Standard’s applicability, ambiguity, lack of objective measures and deadlines, and prolonged, indefinite compliance periods. The new Reliability Standards constitute the first phase of NERC’s effort to implement the recommendations resulting from the joint inquiry into the 2021 winter storm. NERC stated that it will address the remaining recommendations in the second phase of the project.
On February 16, 2021, FERC, NERC, and Regional Entity staff initiated a joint inquiry into the circumstances surrounding Winter Storm Uri, the February 2021 cold weather event that affected Texas and the South-Central United States and that lead to the largest controlled load shed event in United States history. The joint inquiry resulted in a November 2021 Report that identified recommendations for Reliability Standard improvements to address cold weather operations, preparedness, and coordination. (Reliability Standards define the reliability requirements for planning and operating the North American bulk power system.) On October 28, 2022, NERC submitted a petition seeking approval of proposed Reliability Standards EOP-011-3 and EOP-012-1.
The purpose of Reliability Standard EOP-011-3 is to ensure that each transmission operator implements plans to mitigate operating emergencies and that such plans are coordinated within the reliability coordinator area. The 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. The Standards contain new and revised requirements for generators to implement freeze protection measures and enhanced cold weather preparedness plans; identify freeze-sensitive equipment in generators and corrective actions for when equipment freeze issues occur; provide annual training for generator maintenance and operations personnel; and identify procedures for how to improve the coordination of load reduction measures during a grid emergency.
FERC’s February 16, 2023, order accepted the new Reliability Standards EOP-011-3 and EOP-012-1, noting that the Standards provide new protections not currently found in any Reliability Standard. However, FERC also noted that EOP-012-1 requires improvement because it includes undefined terms, broad limitations, exceptions and exemptions, and prolonged compliance periods. For example, FERC noted its concern that the Standard as drafted may not require compliance by all generating units. Accordingly, FERC directed NERC to modify EOP-012-1 to include all bulk electric system generation resources needed for reliable operation and exclude only those generation resources not relied upon during freezing conditions.
As another example, FERC also expressed concern regarding EOP-012-1’s lack of an implementation timeframe for corrective action plans. Accordingly, FERC directed NERC to amend the Standard to include a deadline or maximum period for the implementation completion of corrective action plans. FERC reasoned that a deadline would provide a significant level of risk reduction and is an improvement to the status quo. FERC also directed NERC to collect and assess data over time to monitor and assess entities’ implementation of the new requirements.
FERC’s order, issued in Docket No. RD23-1 can be found here.