16 U.S.C. § 824o — Electric reliability

Page 1423 TITLE 16—CONSERVATION § 824o 1 See References in Text note below. Subsec. (b). Pub. L. 102–486, § 722(1), struck out subsec. (b) which required applicants for orders to be ready, willing, and able to reimburse parties subject to such orders. Subsec. (e). Pub. L. 102–486, § 722(2), amended subsec. (e) generally. Prior to amendment, subsec. (e) related to utilization of interconnection or wheeling authority in lieu of other authority and limitation of Commission authority. Subsecs. (g) to (k). Pub. L. 102–486, § 722(3), added sub- secs. (g) to (k). Statutory Notes and Related Subsidiaries STATE AUTHORITIES; CONSTRUCTION Nothing in amendment by Pub. L. 102–486 to be con- strued as affecting or intending to affect, or in any way to interfere with, authority of any State or local gov- ernment relating to environmental protection or siting of facilities, see section 731 of Pub. L. 102–486, set out as a note under section 796 of this title. § 824l. Information requirements (a) Requests for wholesale transmission services Whenever any electric utility, Federal power marketing agency, or any other person gener- ating electric energy for sale for resale makes a good faith request to a transmitting utility to provide wholesale transmission services and re- quests specific rates and charges, and other terms and conditions, unless the transmitting utility agrees to provide such services at rates, charges, terms and conditions acceptable to such person, the transmitting utility shall, within 60 days of its receipt of the request, or other mutually agreed upon period, provide such person with a detailed written explanation, with specific reference to the facts and circumstances of the request, stating (1) the transmitting util- ity’s basis for the proposed rates, charges, terms, and conditions for such services, and (2) its analysis of any physical or other constraints affecting the provision of such services. (b) Transmission capacity and constraints Not later than 1 year after October 24, 1992, the Commission shall promulgate a rule requir- ing that information be submitted annually to the Commission by transmitting utilities which is adequate to inform potential transmission customers, State regulatory authorities, and the public of potentially available transmission ca- pacity and known constraints. (June 10, 1920, ch. 285, pt. II, § 213, as added Pub. L. 102–486, title VII, § 723, Oct. 24, 1992, 106 Stat. 2919.) Statutory Notes and Related Subsidiaries STATE AUTHORITIES; CONSTRUCTION Nothing in this section to be construed as affecting or intending to affect, or in any way to interfere with, authority of any State or local government relating to environmental protection or siting of facilities, see sec- tion 731 of Pub. L. 102–486, set out as a note under sec- tion 796 of this title. § 824m. Sales by exempt wholesale generators No rate or charge received by an exempt wholesale generator for the sale of electric en- ergy shall be lawful under section 824d of this title if, after notice and opportunity for hearing, the Commission finds that such rate or charge results from the receipt of any undue preference or advantage from an electric utility which is an associate company or an affiliate of the exempt wholesale generator. For purposes of this sec- tion, the terms ‘‘associate company’’ and ‘‘affil- iate’’ shall have the same meaning as provided in section 16451 of title 42.1 (June 10, 1920, ch. 285, pt. II, § 214, as added Pub. L. 102–486, title VII, § 724, Oct. 24, 1992, 106 Stat. 2920; amended Pub. L. 109–58, title XII, § 1277(b)(2), Aug. 8, 2005, 119 Stat. 978.) Editorial Notes REFERENCES IN TEXT Section 16451 of title 42, referred to in text, was in the original ‘‘section 2(a) of the Public Utility Holding Company Act of 2005’’ and was translated as reading ‘‘section 1262’’ of that Act, meaning section 1262 of sub- title F of title XII of Pub. L. 109–58, to reflect the prob- able intent of Congress, because subtitle F of title XII of Pub. L. 109–58 does not contain a section 2 and sec- tion 1262 of subtitle F of title XII of Pub. L. 109–58 de- fines terms. AMENDMENTS 2005—Pub. L. 109–58 substituted ‘‘section 16451 of title 42’’ for ‘‘section 79b(a) of title 15’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–58 effective 6 months after Aug. 8, 2005, with provisions relating to effect of com- pliance with certain regulations approved and made ef- fective prior to such date, see section 1274 of Pub. L. 109–58, set out as an Effective Date note under section 16451 of Title 42, The Public Health and Welfare. STATE AUTHORITIES; CONSTRUCTION Nothing in this section to be construed as affecting or intending to affect, or in any way to interfere with, authority of any State or local government relating to environmental protection or siting of facilities, see sec- tion 731 of Pub. L. 102–486, set out as a note under sec- tion 796 of this title. § 824n. Repealed. Pub. L. 109–58, title XII, § 1232(e)(3), Aug. 8, 2005, 119 Stat. 957 Section, Pub. L. 106–377, § 1(a)(2) [title III, § 311], Oct. 27, 2000, 114 Stat. 1441, 1441A–80, related to authority re- garding formation and operation of regional trans- mission organizations. § 824o. Electric reliability (a) Definitions For purposes of this section: (1) The term ‘‘bulk-power system’’ means— (A) facilities and control systems nec- essary for operating an interconnected elec- tric energy transmission network (or any portion thereof); and (B) electric energy from generation facili- ties needed to maintain transmission system reliability. The term does not include facilities used in the local distribution of electric energy. (2) The terms ‘‘Electric Reliability Organiza- tion’’ and ‘‘ERO’’ mean the organization cer- Page 1424 TITLE 16—CONSERVATION § 824o tified by the Commission under subsection (c) the purpose of which is to establish and en- force reliability standards for the bulk-power system, subject to Commission review. (3) The term ‘‘reliability standard’’ means a requirement, approved by the Commission under this section, to provide for reliable oper- ation of the bulk-power system. The term in- cludes requirements for the operation of exist- ing bulk-power system facilities, including cybersecurity protection, and the design of planned additions or modifications to such fa- cilities to the extent necessary to provide for reliable operation of the bulk-power system, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity. (4) The term ‘‘reliable operation’’ means op- erating the elements of the bulk-power system within equipment and electric system ther- mal, voltage, and stability limits so that in- stability, uncontrolled separation, or cas- cading failures of such system will not occur as a result of a sudden disturbance, including a cybersecurity incident, or unanticipated failure of system elements. (5) The term ‘‘Interconnection’’ means a geo- graphic area in which the operation of bulk- power system components is synchronized such that the failure of one or more of such components may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the facilities within their control. (6) The term ‘‘transmission organization’’ means a Regional Transmission Organization, Independent System Operator, independent transmission provider, or other transmission organization finally approved by the Commis- sion for the operation of transmission facili- ties. (7) The term ‘‘regional entity’’ means an en- tity having enforcement authority pursuant to subsection (e)(4). (8) The term ‘‘cybersecurity incident’’ means a malicious act or suspicious event that dis- rupts, or was an attempt to disrupt, the oper- ation of those programmable electronic de- vices and communication networks including hardware, software and data that are essential to the reliable operation of the bulk power system. (b) Jurisdiction and applicability (1) The Commission shall have jurisdiction, within the United States, over the ERO certified by the Commission under subsection (c), any re- gional entities, and all users, owners and opera- tors of the bulk-power system, including but not limited to the entities described in section 824(f) of this title, for purposes of approving reliability standards established under this section and en- forcing compliance with this section. All users, owners and operators of the bulk-power system shall comply with reliability standards that take effect under this section. (2) The Commission shall issue a final rule to implement the requirements of this section not later than 180 days after August 8, 2005. (c) Certification Following the issuance of a Commission rule under subsection (b)(2), any person may submit an application to the Commission for certifi- cation as the Electric Reliability Organization. The Commission may certify one such ERO if the Commission determines that such ERO— (1) has the ability to develop and enforce, subject to subsection (e)(2), reliability stand- ards that provide for an adequate level of reli- ability of the bulk-power system; and (2) has established rules that— (A) assure its independence of the users and owners and operators of the bulk-power system, while assuring fair stakeholder rep- resentation in the selection of its directors and balanced decisionmaking in any ERO committee or subordinate organizational structure; (B) allocate equitably reasonable dues, fees, and other charges among end users for all activities under this section; (C) provide fair and impartial procedures for enforcement of reliability standards through the imposition of penalties in ac- cordance with subsection (e) (including limi- tations on activities, functions, or oper- ations, or other appropriate sanctions); (D) provide for reasonable notice and op- portunity for public comment, due process, openness, and balance of interests in devel- oping reliability standards and otherwise ex- ercising its duties; and (E) provide for taking, after certification, appropriate steps to gain recognition in Can- ada and Mexico. (d) Reliability standards (1) The Electric Reliability Organization shall file each reliability standard or modification to a reliability standard that it proposes to be made effective under this section with the Com- mission. (2) The Commission may approve, by rule or order, a proposed reliability standard or modi- fication to a reliability standard if it determines that the standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission shall give due weight to the technical expertise of the Electric Reli- ability Organization with respect to the content of a proposed standard or modification to a reli- ability standard and to the technical expertise of a regional entity organized on an Inter- connection-wide basis with respect to a reli- ability standard to be applicable within that Interconnection, but shall not defer with respect to the effect of a standard on competition. A proposed standard or modification shall take ef- fect upon approval by the Commission. (3) The Electric Reliability Organization shall rebuttably presume that a proposal from a re- gional entity organized on an Interconnection- wide basis for a reliability standard or modifica- tion to a reliability standard to be applicable on an Interconnection-wide basis is just, reason- able, and not unduly discriminatory or pref- erential, and in the public interest. (4) The Commission shall remand to the Elec- tric Reliability Organization for further consid- eration a proposed reliability standard or a modification to a reliability standard that the Commission disapproves in whole or in part. (5) The Commission, upon its own motion or upon complaint, may order the Electric Reli- Page 1425 TITLE 16—CONSERVATION § 824o ability Organization to submit to the Commis- sion a proposed reliability standard or a modi- fication to a reliability standard that addresses a specific matter if the Commission considers such a new or modified reliability standard ap- propriate to carry out this section. (6) The final rule adopted under subsection (b)(2) shall include fair processes for the identi- fication and timely resolution of any conflict between a reliability standard and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, or ordered by the Commis- sion applicable to a transmission organization. Such transmission organization shall continue to comply with such function, rule, order, tariff, rate schedule or agreement accepted, approved, or ordered by the Commission until— (A) the Commission finds a conflict exists between a reliability standard and any such provision; (B) the Commission orders a change to such provision pursuant to section 824e of this title; and (C) the ordered change becomes effective under this subchapter. If the Commission determines that a reliability standard needs to be changed as a result of such a conflict, it shall order the ERO to develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this sub- section. (e) Enforcement (1) The ERO may impose, subject to paragraph (2), a penalty on a user or owner or operator of the bulk-power system for a violation of a reli- ability standard approved by the Commission under subsection (d) if the ERO, after notice and an opportunity for a hearing— (A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and (B) files notice and the record of the pro- ceeding with the Commission. (2) A penalty imposed under paragraph (1) may take effect not earlier than the 31st day after the ERO files with the Commission notice of the penalty and the record of proceedings. Such pen- alty shall be subject to review by the Commis- sion, on its own motion or upon application by the user, owner or operator that is the subject of the penalty filed within 30 days after the date such notice is filed with the Commission. Appli- cation to the Commission for review, or the ini- tiation of review by the Commission on its own motion, shall not operate as a stay of such pen- alty unless the Commission otherwise orders upon its own motion or upon application by the user, owner or operator that is the subject of such penalty. In any proceeding to review a pen- alty imposed under paragraph (1), the Commis- sion, after notice and opportunity for hearing (which hearing may consist solely of the record before the ERO and opportunity for the presen- tation of supporting reasons to affirm, modify, or set aside the penalty), shall by order affirm, set aside, reinstate, or modify the penalty, and, if appropriate, remand to the ERO for further proceedings. The Commission shall implement expedited procedures for such hearings. (3) On its own motion or upon complaint, the Commission may order compliance with a reli- ability standard and may impose a penalty against a user or owner or operator of the bulk- power system if the Commission finds, after no- tice and opportunity for a hearing, that the user or owner or operator of the bulk-power system has engaged or is about to engage in any acts or practices that constitute or will constitute a violation of a reliability standard. (4) The Commission shall issue regulations au- thorizing the ERO to enter into an agreement to delegate authority to a regional entity for the purpose of proposing reliability standards to the ERO and enforcing reliability standards under paragraph (1) if— (A) the regional entity is governed by— (i) an independent board; (ii) a balanced stakeholder board; or (iii) a combination independent and bal- anced stakeholder board. (B) the regional entity otherwise satisfies the provisions of subsection (c)(1) and (2); and (C) the agreement promotes effective and ef- ficient administration of bulk-power system reliability. The Commission may modify such delegation. The ERO and the Commission shall rebuttably presume that a proposal for delegation to a re- gional entity organized on an Interconnection- wide basis promotes effective and efficient ad- ministration of bulk-power system reliability and should be approved. Such regulation may provide that the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) directly to a regional entity consistent with the requirements of this para- graph. (5) The Commission may take such action as is necessary or appropriate against the ERO or a regional entity to ensure compliance with a reli- ability standard or any Commission order af- fecting the ERO or a regional entity. (6) Any penalty imposed under this section shall bear a reasonable relation to the serious- ness of the violation and shall take into consid- eration the efforts of such user, owner, or oper- ator to remedy the violation in a timely man- ner. (f) Changes in Electric Reliability Organization rules The Electric Reliability Organization shall file with the Commission for approval any pro- posed rule or proposed rule change, accompanied by an explanation of its basis and purpose. The Commission, upon its own motion or complaint, may propose a change to the rules of the ERO. A proposed rule or proposed rule change shall take effect upon a finding by the Commission, after notice and opportunity for comment, that the change is just, reasonable, not unduly dis- criminatory or preferential, is in the public in- terest, and satisfies the requirements of sub- section (c). (g) Reliability reports The ERO shall conduct periodic assessments of the reliability and adequacy of the bulk-power system in North America. Page 1426 TITLE 16—CONSERVATION § 824o–1 (h) Coordination with Canada and Mexico The President is urged to negotiate inter- national agreements with the governments of Canada and Mexico to provide for effective com- pliance with reliability standards and the effec- tiveness of the ERO in the United States and Canada or Mexico. (i) Savings provisions (1) The ERO shall have authority to develop and enforce compliance with reliability stand- ards for only the bulk-power system. (2) This section does not authorize the ERO or the Commission to order the construction of ad- ditional generation or transmission capacity or to set and enforce compliance with standards for adequacy or safety of electric facilities or serv- ices. (3) Nothing in this section shall be construed to preempt any authority of any State to take action to ensure the safety, adequacy, and reli- ability of electric service within that State, as long as such action is not inconsistent with any reliability standard, except that the State of New York may establish rules that result in greater reliability within that State, as long as such action does not result in lesser reliability outside the State than that provided by the reli- ability standards. (4) Within 90 days of the application of the Electric Reliability Organization or other af- fected party, and after notice and opportunity for comment, the Commission shall issue a final order determining whether a State action is in- consistent with a reliability standard, taking into consideration any recommendation of the ERO. (5) The Commission, after consultation with the ERO and the State taking action, may stay the effectiveness of any State action, pending the Commission’s issuance of a final order. (j) Regional advisory bodies The Commission shall establish a regional ad- visory body on the petition of at least two- thirds of the States within a region that have more than one-half of their electric load served within the region. A regional advisory body shall be composed of one member from each par- ticipating State in the region, appointed by the Governor of each State, and may include rep- resentatives of agencies, States, and provinces outside the United States. A regional advisory body may provide advice to the Electric Reli- ability Organization, a regional entity, or the Commission regarding the governance of an ex- isting or proposed regional entity within the same region, whether a standard proposed to apply within the region is just, reasonable, not unduly discriminatory or preferential, and in the public interest, whether fees proposed to be assessed within the region are just, reasonable, not unduly discriminatory or preferential, and in the public interest and any other responsibil- ities requested by the Commission. The Commis- sion may give deference to the advice of any such regional advisory body if that body is orga- nized on an Interconnection-wide basis. (k) Alaska and Hawaii The provisions of this section do not apply to Alaska or Hawaii. (June 10, 1920, ch. 285, pt. II, § 215, as added Pub. L. 109–58, title XII, § 1211(a), Aug. 8, 2005, 119 Stat. 941.) Statutory Notes and Related Subsidiaries STATUS OF ERO Pub. L. 109–58, title XII, § 1211(b), Aug. 8, 2005, 119 Stat. 946, provided that: ‘‘The Electric Reliability Orga- nization certified by the Federal Energy Regulatory Commission under section 215(c) of the Federal Power Act [16 U.S.C. 824o(c)] and any regional entity delegated enforcement authority pursuant to section 215(e)(4) of that Act [16 U.S.C. 824o(e)(4)] are not departments, agencies, or instrumentalities of the United States Government.’’ ACCESS APPROVALS BY FEDERAL AGENCIES Pub. L. 109–58, title XII, § 1211(c), Aug. 8, 2005, 119 Stat. 946, provided that: ‘‘Federal agencies responsible for approving access to electric transmission or dis- tribution facilities located on lands within the United States shall, in accordance with applicable law, expe- dite any Federal agency approvals that are necessary to allow the owners or operators of such facilities to comply with any reliability standard, approved by the [Federal Energy Regulatory] Commission under section 215 of the Federal Power Act [16 U.S.C. 824o], that per- tains to vegetation management, electric service res- toration, or resolution of situations that imminently endanger the reliability or safety of the facilities.’’ § 824o–1. Critical electric infrastructure security (a) Definitions For purposes of this section: (1) Bulk-power system; Electric Reliability Or- ganization; regional entity The terms ‘‘bulk-power system’’, ‘‘Electric Reliability Organization’’, and ‘‘regional enti- ty’’ have the meanings given such terms in paragraphs (1), (2), and (7) of section 824o(a) of this title, respectively. (2) Critical electric infrastructure The term ‘‘critical electric infrastructure’’ means a system or asset of the bulk-power sys- tem, whether physical or virtual, the inca- pacity or destruction of which would nega- tively affect national security, economic secu- rity, public health or safety, or any combina- tion of such matters. (3) Critical electric infrastructure information The term ‘‘critical electric infrastructure in- formation’’ means information related to crit- ical electric infrastructure, or proposed crit- ical electrical infrastructure, generated by or provided to the Commission or other Federal agency, other than classified national security information, that is designated as critical electric infrastructure information by the Commission or the Secretary pursuant to sub- section (d). Such term includes information that qualifies as critical energy infrastructure information under the Commission’s regula- tions. (4) Defense critical electric infrastructure The term ‘‘defense critical electric infra- structure’’ means any electric infrastructure located in any of the 48 contiguous States or the District of Columbia that serves a facility designated by the Secretary pursuant to sub-