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Power & Pipes

FERC, CFTC, and State Energy Law Developments

In a Notice of Proposed Rulemaking issued on October 18, 2012, FERC proposed to direct NERC to develop reliability standards addressing the risk posed By geomagnetic disturbances (GMDs). As a first stage, FERC proposed to direct NERC to develop a standard within 90 days of the final rule mandating that bulk-power system owners and operators develop operating procedures to mitigate the effects that GMDs have on reliability.

As a second stage, FERC proposed to direct NERC to develop a standard six months after the final rule requiring bulk-power system owners and operators to conduct assessments of GMD effects on the reliability of their systems. FERC proposed the following parameters for a standard governing these assessments:

  • The assessments should follow uniform evaluation criteria.
  • The assessments should evaluate the primary and secondary effects from geomagnetically induced currents.
  • The assessments should evaluate geomagnetically induced current effects on equipment, operations, and stability.
  • The assessments should include wide-area or regional analyses.
  • The assessments should be periodically updated.

The owners and operators would then use these assessments to develop a plan to protect against GMDs damaging bulk-power system equipment and thereBy harming reliability. As emphasized By FERC, it would not be enough simply to institute procedures or training. Instead, specific technical protections for the relevant equipment would be necessary. FERC noted that, even with sufficient warning of a GMD event, operational procedures may be insufficient to prevent permanent damage, resulting in lengthy outages. For that reason, FERC proposed to direct that the standard address automatic blocking measures for mitigating geomagnetically induced currents By preventing those current flows through power transformers.

Comments on this Notice of Proposed Rulemaking are due December 24, 2012.