June 23, 2023

FERC Responds to Extreme Weather Threats to Reliability by Mandating New Reliability Standard and Transmission Provider Reports

On Thursday, June 15, 2023, the Federal Energy Regulatory Commission (FERC) finalized two rules aimed at improving the reliability of the bulk power system in light of the threats posed by extreme weather. First, in Order No. 896, Transmission System Planning Performance Requirements for Extreme Weather, FERC directed the North American Electric Reliability Corporation (NERC) to establish a new Reliability Standard addressing the risks of extreme heat and cold weather events in long-term transmission system planning. NERC will develop extreme heat and cold weather benchmark events, as well as create benchmark planning cases for these events that will serve as the basis for assessing system performance and studying wide-area impacts. The benchmark events also are required to reflect regional climate and weather pattern differences.

In Order No. 897, One-Time Informational Reports on Extreme Weather Vulnerability Assessments—Climate Change, Extreme Weather, and Electric System Reliability, FERC largely adopted a prior proposal to require all public utility transmission providers to submit one-time reports describing their current or planned policies and processes for conducting extreme weather vulnerability assessments. The final rule requires all transmission providers, including regional transmission organizations and independent system operators (and their transmission-owning members), to file one-time informational reports. Although FERC stated that these reports will enable it to assess how transmission providers evaluate their vulnerabilities to extreme weather events and strengthen its ability to ensure system reliability and just and reasonable rates, FERC refrained from specifying additional future actions it might take as result of these reports.

Specific elements of the required reports include:

• the processes by which transmission providers identify vulnerabilities and determine exposure to extreme weather hazards affecting their transmission assets and operations;

• estimates by transmission providers of the costs associated with extreme weather impacts on their systems; and

• transmission providers’ policies and processes aimed at addressing the risks identified in their extreme weather vulnerability assessments.

This rule is effective September 25, 2023. Each transmission provider must file the one-time informational report required by this final rule by October 25, 2023.

For more information concerning the two new reliability final rules, please contact Wendy Reed (reed@wrightlaw.com), Matthew Binette (binette@wrightlaw.com) and Uju Okasi (okasi@wrightlaw.com).
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