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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM09-25-000; Order No. 742]

System Personnel Training Reliability Standards

AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
SUMMARY: Under section 215 of the Federal Power Act, the Commission approves two Personnel Performance, Training and Qualifications (PER) Reliability Standards, PER-004-2 (Reliability Coordination--Staffing) and PER-005-1 (System Personnel Training), submitted to the Commission for approval by the North American Electric Reliability Corporation, the Electric Reliability Organization certified by the Commission. The approved Reliability Standards require reliability coordinators, balancing authorities, and transmission operators to establish a training program for their system operators, verify each of their system operators' capability to perform tasks, and provide emergency operations training to every system operator. The Commission also approves NERC's proposal to retire two existing PER Reliability Standards that are replaced by the standards approved in this Final Rule.
Issued November 18, 2010.
DATES: Effective Date:This rule will become effective January 25, 2011.
FOR FURTHER INFORMATION CONTACT: Karin L. Larson (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-8236. Kenneth U. Hubona (Technical Information), Office of Electric Reliability, Division of Reliability Standards, Federal Energy Regulatory Commission, 1800 Dual Highway, Suite 201, Hagerstown, MD 21740, (301) 665-1608.
SUPPLEMENTARY INFORMATION:

Before Commissioners:Jon Wellinghoff, Chairman; Marc Spitzer, Philip D. Moeller, John R. Norris, and Cheryl A. LaFleur.

1. Under section 215 of the Federal Power Act (FPA),1 the Commission approves two Personnel Performance, Training and Qualifications (PER) Reliability Standards, PER-004-2 (Reliability Coordination—Staffing) and PER-005-1 (System Personnel Training), submitted to the Commission for approval by the North American Electric Reliability Corporation (NERC), the Electric Reliability Organization (ERO) certified by the Commission. The approved Reliability Standards require reliability coordinators, balancing authorities, and transmission operators to establish a training program for their system operators, verify each of their system operators' capability to perform tasks, and provide emergency operations training to every system operator. The Commission also approves NERC's proposal to retire two existing PER Reliability Standards that are replaced by the standards approved in this Final Rule.

116 U.S.C. 824o.

I. Background

2. On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC,2 including the four PER Reliability Standards: PER-001-0, PER-002-0, PER-003-0, and PER-004-1.3 In addition, in Order No. 693, under section 215(d)(5) of the FPA, the Commission directed NERC to develop modifications to the PER Reliability Standards to address certain issues identified by the Commission. At issue in the immediate proceeding are two new PER Reliability Standards that would replace the currently effectiveReliability Standards PER-002-0 (Operating Personnel Training) and PER-004-1 (Reliability Coordination—Staffing).

2 Mandatory Reliability Standards for the Bulk-Power System,Order No. 693, 72 FR 16416 (Apr. 4, 2007), FERC Stats. & Regs. ¶ 31,242,order on reh'g,Order No. 693-A, 120 FERC ¶ 61,053 (2007).

3Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1330-1417.

Currently Effective Reliability Standard PER-002-0

3. Currently effective Reliability Standard PER-002-0 requires each transmission operator and balancing authority to be staffed with adequately trained operating personnel.4 Specifically, PER-002-0: (1) Directs each transmission operator and balancing authority to have a training program for all operating personnel who occupy positions that either have primary responsibility, directly or through communication with others, for the real-time operation of the Bulk-Power System or who are directly responsible for complying with the NERC Reliability Standards; (2) lists criteria that must be met by the training program; and (3) requires that operating personnel receive at least five days of training in emergency operations each year using realistic simulations.5

4 Id.P 1331.

5Reliability Standard PER-002-0.

4. In Order No. 693, the Commission directed NERC, pursuant to section 215(d)(5) of the FPA, to develop the following modifications to PER-002-0: (1) Identify the expectations of the training for each job function; (2) develop training programs tailored to each job function with consideration of the individual training needs of the personnel; (3) expand the applicability of the training requirements to include: reliability coordinators, local transmission control center operator personnel, generator operators centrally-located at a generation control center with a direct impact on the reliable operation of the Bulk-Power System, and operations planning and operations support staff who carry out outage planning and assessments and those who develop system operating limits (SOL), interconnection reliability operating limits (IROL), or operating nomograms for real-time operations; (4) use a systematic approach to training methodology for developing new training programs; and (5) include the use of simulators by reliability coordinators, transmission operators, and balancing authorities that have operational control over a significant portion of load and generation.6

6Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1393.

5. In Order No. 693, the Commission also directed the ERO to determine whether it is feasible to develop meaningful performance metrics associated with the effectiveness of a training program required by currently effective Reliability Standard PER-002-0 and to consider whether personnel who support Energy Management System (EMS) applications should be included in mandatory training pursuant to the Reliability Standard.7

7 Id.P 1394.

Currently Effective Reliability Standard PER-004-1

6. In Order No. 693, the Commission also approved Reliability Standard PER-004-1.8 This Reliability Standard requires each reliability coordinator to be staffed with adequately trained, NERC-certified operators, 24 hours a day, seven days a week. Further, PER-004-1 requires reliability coordinator operating personnel to have a comprehensive understanding of the area of the Bulk-Power System for which they are responsible.

8 Id.P 1417.

NERC Petition

7. In a September 30, 2009 filing (NERC Petition),9 NERC requests Commission approval of proposed Reliability Standards PER-005-1 (System Personnel Training) and PER-004-2 (Reliability Coordination—Staffing), which were developed in response to the Commission's directives in Order No. 693 regarding currently effective Reliability Standard PER-002-0.10 NERC seeks to concurrently retire currently effective Reliability Standards PER-002-0 and PER-004-1 upon the effective date of the two new Reliability Standards.

9 North American Electric Reliability Corp.,Sept. 30, 2009 Petition for Approval of Proposed Reliability Standards Regarding System Personnel Training (NERC Petition). The two PER Reliability Standards are included as Exhibit A to NERC's Petition. In addition, pursuant to section 40.3 of the Commission's regulations, all Commission-approved Reliability Standards are available on NERC's Web site athttp://www.nerc.com/page.php?cid=2|20. See18 CFR. 40.3.

10NERC's Petition addresses only the directives in Order No. 693 related to existing Reliability Standard PER-002-0, not the directives related to PER-004-1.SeeNERC Petition at 27.

8. NERC states that the proposed Reliability Standards “are a significant improvement over the existing Reliability Standards” and recommends Commission approval of the standards as a “significant step in strengthening the quality of operator training programs as necessary for the reliability of the [B]ulk-[P]ower [S]ystem.”11

11NERC Petition at 5.

Reliability Standard PER-005-1

9. The stated purpose of Reliability Standard PER-005-1 is to ensure system operators performing real-time, reliability-related tasks on the North American bulk electric system are competent to perform those reliability-related tasks.12 Reliability Standard PER-005-1 applies to reliability coordinators, balancing authorities, and transmission operators.13 Reliability Standard PER-005-1 contains three main requirements:

12Reliability Standard PER-005-1, Section A.3 (Purpose).

13The responsible entities subject to PER-005-1 include: Reliability coordinators, balancing authorities and transmission operators as those entities are defined in theGlossary of Terms Used in NERC Reliability Standards,April 20, 2010,available at http://www.nerc.com/docs/standards/rs/Glossary_of_Terms_2010April20.pdf.

• Requirement R1 mandates the use of a systematic approach to training for both new and existing training programs. The requirement further requires applicable entities to create a company-specific, reliability-related task list relevant to Bulk-Power System operation and to design and develop learning objectives and training materials based on the task list performed by its System Operators each calendar year. Finally, the requirement mandates the training be delivered and the training program be evaluated on at least an annual basis to assess its effectiveness.

• Requirement R2 requires the verification of a System Operator's ability to perform the tasks identified in Requirement R1. The requirement also mandates re-verification of a System Operator's ability to perform the tasks within a specified time period when program content is modified.

• Requirement R3 identifies the number of hours of emergency operations training (at least 32 hours) that a System Operator is required to obtain every twelve months. The requirement further identifies those entities required to use simulation technology such as a simulator, virtual technology, or other technology in their emergency operations training programs.14

14NERC Petition at 8-9.

Proposed Reliability Standard PER-005-1 is a new Reliability Standard that is intended to supersede all of currently effective Reliability Standard PER-002-0 as well as Requirements R2, R3, and R4 of currently effective Reliability Standard PER-004-1. Proposed Reliability Standard PER-004-2

10. Proposed Reliability Standard PER-004-2 modifies PER-004-1 by deleting Requirements R2, R3, and R4, as these three Requirements are incorporated into proposed PER-005-1. Proposed Reliability Standard PER-004-2 simply carries forward, unchanged, the remaining provisions from currently effective PER-004-1, including the associated violation risk factor and violation severity level assignments.

Notice of Proposed Rulemaking

11. On June 17, 2010, the Commission issued its Notice of Proposed Rulemaking (NOPR) proposing to approve the two proposed PER Reliability Standards, PER-004-2 and PER-005-1 (and to retire the two superseded standards, PER-002-0 and PER-004-1).15 With respect to Reliability Standard PER-005-1, the NOPR proposed to direct NERC to: (1) Modify PER-005-1 to explicitly require training for local transmission control center personnel, and (2) to evaluate the feasibility of developing meaningful performance metrics to evaluate the effectiveness of PER-005-1. In addition, in the NOPR, the Commission sought clarification from NERC and/or industry comments on several specific aspects of proposed Reliability Standard PER-005-1, including: (1) Whether three specific training requirements are carried over from PER-004-1 to PER-005-1 and are enforceable as part of the systematic approach to training umbrella; (2) whether PER-005-1, R1.2, through the systematic approach to training, adequately requires entities to develop training programs tailored to each job function with consideration of the individual training needs of the personnel; (3) whether PER-005-1, R3.1 requires the use of simulators specific to an operator's own system and if not, whether it is feasible or practical to mandate the use of simulators that are specific to the operator's system; (4) whether the proposed two- and three-year lead time prior to certain Requirements in PER-005-1 become effective are necessary and the feasibility of staggering the retirement of currently effective Reliability Standards PER-002-0 and PER-004-1; and (5) whether it is feasible for NERC to complete the standards development project to expand applicability of PER-005 to include certain generator operators and operations planning and operations support staff by fourth quarter 2011. The Commission also proposed to approve NERC's proposed retirement of currently effective Reliability Standards, PER-002-0 and PER-004-1, which will be superseded by the two new standards.

15 System Personnel Training Reliability Standards,75 FR 35689 (June 17, 2010), FERC Stats. & Regs. ¶ 32,661 (2010) (NOPR).

12. In response to the NOPR, comments were filed by 28 interested parties. These comments assisted us in the evaluation of NERC's proposal. In the discussion below, we address the issues raised by these comments. Appendix A to this Final Rule lists the entities that filed comments on the NOPR.

II. Discussion A. Approval of PER-004-2 and PER-005-1

13. In the NOPR, the Commission proposed to approve the two PER Reliability Standards filed by NERC in this proceeding as just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission stated that proposed Reliability Standards PER-005-1 and PER-004-2 represent an improvement in training requirements.

Comments

14. Many commenters support approving the two proposed Reliability Standards PER-004-2 and PER-005-1.16 NERC reiterates in its comments that implementation of Reliability Standards PER-005-1 and PER-004-2 will achieve a significant improvement in the reliability of the Bulk-Power System and, therefore, it is supportive of the Commission's proposal to approve the two standards. APPA states that the proposed PER standards strike the right balance among costs, flexibility and performance, and that PER-005-1 and PER-004-2 should be approved without modification. Dominion notes that the implementation of the more stringent requirements of PER-005-1, including the adoption of a systematic approach to training for new and existing system operator training programs, recognizes the criticality of such training and contains a logical and reasonable approach to providing the appropriate personnel with the necessary training.

16 Seecomments of APPA, Dominion, EEI, IESO, NERC, NRECA, PG&E, Platte River, Wisconsin Electric, and WECC.

15. EEI states that if the Reliability Standards are approved, compliance with both PER-004-2 and PER-005-1 will support the reliability of the Bulk-Power System by measuring competence against a list of specific task requirements. EEI also comments that by implementing training requirements that test specific competencies, the proposed Reliability Standard PER-005-1 provides greater clarity, thus improving its enforceability. No commenter objects to the approval of the two training Reliability Standards.

Commission Determination

16. The Commission adopts the NOPR proposal and approves Reliability Standard PER-004-2 and PER-005-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest.17 By assigning a significant amount of structure to the training programs for the principal operators of the Bulk-Power System, namely reliability coordinators, balancing authorities and transmission operators, the two proposed Reliability Standards will enhance the reliability of the Bulk-Power System. Moreover, the two proposed Reliability Standards represent a step forward in implementing a key recommendation from the 2003 Blackout Report18 by addressing an identified gap where operations personnel were not adequately trained to maintain reliable operation under emergency conditions.

1716 U.S.C. 824o(d)(2).

18 U.S.-Canada Power System Outage Task Force, Final Report on the August 14, 2003 Blackout in the United States and Canada: Causes and Recommendations,(April 2004) (Blackout Report),available at http://www.ferc.gov/industries/electric/indus-act/blackout.asp.

17. The Commission is not directing any modifications to the substantive requirements of the two new Reliability Standards, PER-005-1 or PER-004-2. Nevertheless, as discussed in greater detail below, the Commission has several concerns regarding certain training issues. To address these concerns, and as discussed in greater detail below, the Commission is issuing directives that the ERO: (1) Consider the necessity of developing an implementation plan for entities that become subject to PER-005-1, Requirement R3.1 after Requirement R3.1 is in effect, and (2) develop a Reliability Standard, through the ERO's Reliability Standards development process, conducted pursuant to its Standard Processes Manual, establishing training requirements for local transmission control center operator personnel.

B. Implementation Timeline

18. In the NOPR, the Commission expressed concern about NERC's proposed use of staggered effective dates for the two proposed Reliability Standards, which Reliability Standards modify currently effective standards. The Commission questioned whether staggered effective dates could create a gap in compliance and enforceability. Specifically, NERC proposed to make the various requirements in PER-005-1 mandatory and enforceable in three stages over a three-year period. The Commission also questioned the need for the proposed two- and three-year lead times before certain Requirements in PER-005-1 become mandatory and enforceable.

Comments

19. NERC's comments clarify the proposed effective dates for each of the new Requirements in PER-005-1 and PER-004-2 as well as the corresponding retirement dates of the currently effective Requirements in PER-002-0 and PER-004-1. NERC included in its comments a table that specifies the retirement and effective date for each Requirement in each of the affected Reliability Standards, specifically, currently effective PER-002-0 and PER-004-1 and proposed Reliability Standards PER-004-2 and PER-005-1. This table is reproduced in Appendix B of this Final Rule. Further, NERC provides justification for the proposed two- and three-year lead times for the effective date for some of the proposed Requirements in PER-005-1. Specifically, NERC states that the 24-month implementation timeframe of proposed PER-005-1, Requirements R1 and R2 allows flexibility in developing and implementing the training programs that use a systematic approach to training, and is structured and tailored to the functions that each entity performs in operating the Bulk-Power System. Additionally, NERC explains that the 36-month implementation timeframe for Requirement R3.1 in the proposed standard PER-005-1 allows entities with simulation technology sufficient time to integrate the use of this technology as a core component of those programs going forward and allows entities without simulation technology the needed time to secure and integrate simulation technology. Finally, NERC states that it reviewed the staggered effective/retirement dates and did not find any overlaps or gaps.

20. The majority of the commenters generally support NERC's proposed effective and retirement dates.19 Many of these commenters state that if the Commission rejects the use of staggered effective and retirement dates, then in the alternative, the Commission should impose a uniform effective date that is the first day of the first calendar quarter, 36 months after FERC approval.20 BGE, GSOC and GTC, KCP&L, SPP, and Westar generally support eliminating the staggered effective dates and instead setting this uniform effective/retirement date.

19 Seecomments submitted by BPA, ITC, Minnesota Power, Montana-Dakota, NV Energy, NorthWestern, PG&E, Platte River, Portland, and WECC.

20 Seecomments submitted by Minnesota Power, Montana-Dakota, PG&E, and WECC.

21. EEI raises a concern regarding the effective date for Reliability Standard PER-005-1, Requirement 3.1. Specifically, EEI states that although Reliability Standard PER-005-1 addresses lead times for compliance based on regulator approval of the standards, it does not address the situation where Requirement 3.1 is not applicable to certain entities at the time of the regulatory effective date of the standard, but later becomes applicable to those entities. Specifically, with respect to PER-005-1, Requirement R3.1, which requires simulator training for entities with established interconnection reliability operating limits (IROLs),21 EEI states that if an entity does not have established IROLs when the Reliability Standard PER-005-1 becomes effective, but later due to system changes an IROL is invoked, the standard does not specify when the requirements for simulation training (Requirement R3.1) would be mandatory and enforceable for such an entity. EEI states that because entities with established IROLs would initially have 36 months to comply with the provisions of Requirement R3.1; i.e., to develop simulation training, that the same 36 month compliance lead time should also be afforded to all entities with future established IROLs. EEI requests that the Commission direct NERC to modify the effective date specified in Reliability Standard PER-005-1, section 5.1 to grant a 36-month lead time for entities with newly established IROLs or operating guides to be compliant with Requirement 3.1.

21 SeeNERC Glossary of Terms athttp://www.nerc.com/docs/standards/rs/Glossary_of_Terms_2010April20.pdf.

Commission Determination

22. The Commission finds that the proposed staggered implementation schedule for PER-005-1 and PER-004-2 and the corresponding retirement schedule for PER-002-0 and PER-004-1 strikes a reasonable balance between the need for timely reform and the needs of the entities that will be subject to PER-005-1 to develop and implement training programs utilizing a systematic approach to training and use of simulators as a training tool. The effective and retirement date table provided by NERC in its comments and incorporated herein as Appendix B demonstrates that there are no apparent overlaps or gaps between the retirement of PER-002-0 and PER-004-1 and the effectiveness of the requirements in the new Reliability Standards, PER-005-1 and PER-004-2.

23. The Commission finds that the commenters that advocate for a uniform effective date of 36-months have not adequately justified such a lengthy lead time for a Reliability Standard that will not impose entirely new requirements. Rather, PER-005-1 requires applicable entities to build upon and improve the existing training programs that are in place under currently effective PER-002-0. Accordingly, as approved, PER-004-2 in its entirety and PER-005-1, Requirement R3 shall become effective on the first day of the first calendar quarter after regulatory approval.22 PER-005-1, Requirements R1, R1.1, R1.1.1, R1.2, R1.3, R1.4, R2, and R2.1 shall become effective on the first day of the first calendar quarter, twenty-four months after regulatory approval. And, finally, PER-005-1, Requirements R3.1 shall become effective on the first day of the first calendar quarter, thirty-six months after regulatory approval.

22“Regulatory approval” for these two Reliability Standards refers to approval by the Commission in a final rule. The date of the Commission's regulatory approval is not the date that the final rule is issued by the Commission, rather, in this case, it is 60 days after the date the final rule is published in theFederal Register.

24. With respect to EEI's comment regarding the effective date for entities that may become, in the future, subject to the simulator training requirement in PER-005-1, R3.1, the Commission believes that this issue should be considered by the ERO. We note that, with respect to the Critical Infrastructure Protection (CIP) Reliability Standards, NERC has developed a separate implementation plan that essentially gives responsible entities some lead time before newly acquired assets must be in compliance with the effective CIP Reliability Standards.23 We direct NERC to consider the necessity of developing a similar implementation plan with respect to PER-005-1, Requirement R3.1.

23 See North American Electric Reliability Corp.,130 FERC ¶ 61,271, at P 15 (2010) (approving the Implementation Plan for Newly Identified Cyber Assets).

C.Systematic Approach to Training

25. A systematic approach to training is a widely-accepted methodology that ensures training is efficiently and effectively conducted and is directly related to the needs of the position in question.24 To achieve training results, the objectives of a systematic approach to training include: management and administration of training and qualification programs; development and qualification of training staff; trainee entry-level requirements; determination of training program content; design and development oftraining programs; conduct of training; trainee examinations and evaluations; and training program evaluation.

24 SeeOrder No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1382.

NOPR

26. In the NOPR, the Commission agreed with NERC that proposed Reliability Standard PER-005-1, Requirement R1 met the Commission's directive to “develop a modification to PER-002-2 (or a new Reliability Standard) that uses the systematic approach to training methodology.”25 However, the Commission noted that the generic reference to systematic approach to training contained in proposed PER-005-1 Requirement R1 raised the question of whether certain Order No. 693 directives and certain specific training requirements that are explicitly set forth in the currently effective Reliability Standards PER-002-0 and PER-004-1, which are to be retired, are fully and adequately captured under the systematic approach to training umbrella. The Commission questioned whether the following three currently effective training requirements from PER-002-0 and PER-004-1 are incorporated in proposed Reliability Standard PER-005-1: (i) Understanding of reliability coordinator area, (ii) continual training, and (iii) training staff identity and competency. In the NOPR, the Commission sought comment on its understanding of the carryover of these three currently enforceable compliance obligations.

25NOPR, FERC Stats. & Regs ¶ 32,601 at P 25 (citing Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1380).

1. Understanding of Reliability Coordinator Area

27. Currently effective Reliability Standard PER-004-1, Requirements R3 and R4 provide that reliability coordinator operating personnel “shall have a comprehensive understanding of the Reliability Coordinator Area and interactions with neighboring Reliability Coordinator areas” and “shall have an extensive understanding of the Balancing Authorities, Transmission Operators, and Generation Operators within the Reliability Coordinator Area, including the operating staff, operating practices and procedures * * * .”26 NERC states that these two requirements are supplanted by and addressed more fully in proposed Reliability Standard PER-005-1, Requirements R1 and R2. However, proposed Reliability Standard PER-005-1 does not explicitly require reliability coordinator operating personnel to have a comprehensive understanding of the reliability coordinator area or an extensive understanding of the balancing authorities, transmission operators, and generation operators within the reliability coordinator area. In order to clarify that these requirements are clear and enforceable under proposed Reliability Standard PER-005-1, the Commission sought an explanation from NERC and comments from the general public whether these existing requirements are enforceable under the proposed Reliability Standard PER-005-1 and whether these requirements are clear or should be more explicit.

26 SeeReliability Standard PER-004-1, Requirements R3 and R4.

Comments

28. Most commenters agree that comprehensive understanding of the reliability coordinator area is fully addressed by PER-005-1, Requirements R1 and R2 through the use of a systematic approach to training.27 For example, Dominion supports proposed PER-005-1, Requirements R1 and R2 because the requirements are clear, measurable, and eliminate the subjectivity of the phrase “comprehensive understanding” that currently exists under the current PER-004-1, Requirement R3. Dominion believes that proper implementation of a systematic approach to training will address the Commission's concern that operating personnel may not have a proper understanding of their system and interactions with neighboring systems without resurrecting the vague language in PER-004-1. However, other commenters, including ITC, MidAmerican, and SPP, state that because the requirement to have a “comprehensive understanding of the reliability coordinator's area” is not explicitly stated in PER-005-1, it will be difficult to enforce.

27 Seecomments of BPA, Dominion, GSOC & GTC, IESO, ISO/RTO Council, KCP&L, Minnesota Power, Montana Dakota, NV Energy, NERC, PG&E, Portland, Westar, and WECC.

29. NERC states that PER-005-1 implements a defense-in-depth approach to ensure that the reliability coordinator's system operators have a comprehensive understanding of their reliability coordinator area. NERC believes this approach ensures that system operators have the tools to effectively monitor and direct actions within the reliability coordinator area in support of the Bulk-Power System. NERC provides examples of how proposed PER-005-1 ensures that the reliability coordinator's system operators will have detailed knowledge of their reliability coordinator area.

Commission Determination

30. Based on NERC's explanation, the Commission agrees that the existing requirements contained in PER-004-1, which require reliability coordinators to have a comprehensive understanding of the reliability coordinator area and interactions with neighboring reliability coordinator areas and an extensive understanding of the balancing authorities, transmission operators, and generation operators within the reliability coordinator area, are adequately captured and enforceable under proposed Reliability Standard PER-005-1.

2. Continual Training

31. Currently effective Reliability Standard PER-002-0, Requirement R3.2 explicitly mandates that “the training program must include a plan for the initial andcontinuingtraining of Transmission Operators and Balancing Authorities operating personnel.” In the NOPR, the Commission sought an explanation from NERC, and comment from the general public, whether continuing training is an enforceable requirement under proposed Reliability Standard PER-005-1 and whether this requirement is clear or should be more explicit.

Comments

32. NERC comments that continual training is an enforceable requirement under PER-005-1, Requirement R1 as a fundamental aspect of a systematic approach to training. Most commenters agree with NERC that continual training is an inherent aspect of the systematic approach to training.28 For example, the ISO/RTO Council states that PER-005-1 is superior to the previous continual training requirement and will be easily measured and enforced and thus does not need to be more explicit.

28 Seecomments of BPA, GSOC & GTC, IESO, ISO/RTO Council, ITC, Minnesota Power, Montana-Dakota, NV Energy, NorthWestern, PG&E, Platte River, Portland, Westar, and WECC.

33. KCP&L believes continuing training is not necessary for routine tasks, only non-routine. MidAmerican and NV Energy both argue that explicit language addressing continual training is necessary to be an enforceable requirement.

Commission Determination

34. Based on NERC's and the majority of the commenters' affirmation that continual training is a fundamental part of a systematic approach to training and an enforceable requirement under PER-005-1, we find that any systematic approach to training, including thesystematic approach to training mandated by Reliability Standard PER-005-1, would entail continual training to refresh system operators' knowledge and to cover any new tasks relevant to the operation of the Bulk-Power System.

3. Training Staff Identity and Competency

35. In the NOPR, the Commission noted that currently effective Reliability Standard PER-002-0, Requirement R3.4 requires a training program in which “[t]raining staff must be identified, and the staff must be competent in both knowledge of system operations and instructional capabilities.” The Commission further noted that this requirement is not explicitly provided in PER-005-1. As such, the NOPR sought clarification as to (i) how and whether a systematic approach to training requires training staff to be identified, and (ii) if not, the mechanism by which training staff will be identified and its competency ensured. The Commission also invited comment on whether this clarification should be made explicit so that entities clearly understand their compliance obligations.

Comments

36. NERC agrees with the Commission that PER-002-0, Requirement R3.4, which requires a training program in which training staff must be identified and competent in system operations and instructional capabilities, is an important requirement and proposes to reassess whether this requirement should be made more explicit in a later version of PER-005-1 so that entities can understand their compliance obligations.

37. The majority of commenters agree that training staff identification and competency are inherent in a systematic approach to training, and that, as such, no modification of proposed PER-005-1 is necessary.29 However, some commenters disagree and argue that PER-005-1 should have an explicit requirement similar to Requirement R3.4 in PER-002-0 mandating training staff to be identified and be competent in system operations and instructional capabilities.30 Other commenters state that the systematic approach to training does not require training staff to be identified or their competency ensured, but argue that such a requirement is not necessary and potentially detrimental.31 For example, ITC believes competency of training staff should be determined by entities internally during the hiring process and companies should not be limited by a prescriptive requirement that does not allow for company discretion during the hiring process.

29 Seecomments of GSOC & GTC, Minnesota Power, Montana Dakota, NRECA, NV Energy, PG&E, Platte River, Portland, SPP, and Westar.

30 Seecomments of BGE, BPA, and MidAmerican.

31 Seecomments of IESO, ISO/RTO Council, ITC, KCP&L, NorthWestern, and Wisconsin Electric.

Commission Determination

38. Based on the comments received, the Commission concludes that the current requirement for each training program (that training staff must be identified and that such staff must be competent in both knowledge of system operations and instructional capabilities) is inherent in any systematic approach to training that a registered entity would use to meet this requirement, and thus is an enforceable component of Requirement R1 under the proposed standard. However, given the number of commenters that argue that it is necessary for the current training program requirement to be explicitly stated in the proposed training standard, we agree that NERC should follow through on its proposal in its comments to reassess whether this requirement should be made more explicit in a later version of PER-005-1.

D. Training Expectations for Each Job Function/Tailored Training NOPR Proposal

39. Proposed Reliability Standard PER-005-1, Requirement R1.2 mandates applicable entities to “design and develop learning objectives and training materials based on the task list created in R1.1.”32 In the NOPR, the Commission noted that it believes that NERC has complied with the directive to require entities to identify the expectations of the training for each job function and develop training programs tailored to each job function with consideration of the individual training needs of their personnel. The Commission took the view in the NOPR that the systematic approach to training used to satisfy PER-005-1, Requirement R1 would assess factors such as educational, technical experience, and medical requirements that candidates must possess before entering a given training program. With the above understanding, the Commission concluded that the systematic approach to training methodology required in Reliability Standard PER-005-1, Requirement R1 satisfies the Commission's directive for Order No. 693 to develop a modification that identifies the expectations of the training for each job function and develops training programs tailored to each job function with consideration of the individual training needs of the personnel. In the NOPR, the Commission sought comment on its understanding that PER-005-1, Requirement R1.2 requires that the learning objectives and training materials be developed with consideration of the individual needs of each operator.

32NERC Petition at 27 (quoting proposed Reliability Standard PER-005-1, Requirement R1.2).

Comments

40. NERC agrees with the Commission that learning objectives and training materials are to be developed for each job function. NERC believes that using a systematic approach to training allows each entity to tailor its training program to best meet the training needs of the function performed by System Operators.

41. A number of commenters33 agree with NERC and affirm the Commission's understanding that a systematic approach to training requires development of tailored training. NorthWestern concurs that PER-005-1 requires the training materials to be tailored to the individual needs of each operator. For example, IESO believes that the systematic approach to training process will ensure that the necessary knowledge, skills and abilities are provided in the development of learning objectives and associated training materials. The ISO/RTO Council contends that PER-005 addresses function/task-specific training and not person-specific training or personal development. With respect to Requirement R1.2, the ISO/RTO Council interprets the Commission's statement that “* * * requires that the learning objectives and training materials be developed with consideration of the individual needs of each operator. * * *” as requiring an entity to address the knowledge and skill gaps of individual system operators with respect to the reliability tasks they are expected to perform.34 The ISO/RTO Council supports the term “systematic approach to training (in lower case)” as used in the Reliability Standard because the lower case term provides registered entities flexibility in complying with the standard.35

33 Seecomments of BPA, GSOC & GTC, NV Energy, NorthWestern, PG&E, and Platte River.

34 SeeIRC Comments at 7.

35 Id.

42. SPP and Westar did not take a position on the issue; rather, they request that the Commission clarify what is meant by “consideration of theindividual needs of each operator.” BG&E recommends that the Commission make more explicit the requirement to implement the Department of Energy Handbook on the systematic approach to training36 as the mandatory standardized methodology industry-wide, and expresses the view that the DOE Handbook is the most stringent set of standards available, has the longest track record of proven successful results, and is familiar to the industry. BG&E identifies the following expectations that training should include: (1) Customized, task-based training; (2) annual assessment of operator needs; and (3) individualized training on any task for which the trainee failed to achieve satisfactory standards during the annual training.

36 SeeU.S. Department of Energy's Handbook, DOE-HDBK-1078-94, Training Program Handbook: A Systematic Approach to Training (August 1994),available at http://www.hss.energy.gov/nuclearsafety/ns/techstds/standard/hdbk1078/hdbk1078.pdf(DOE Handbook).

43. One commenter, Wisconsin Electric, disagrees with the Commission's “understanding” on this issue. Wisconsin Electric expresses several concerns with the following statement in the NOPR:

Based on our review of the Systematic Approach to Training methodology used by the Department of Energy, we understand that a Systematic Approach to Training would assess factors such as educational, technical, experience, and medical requirements that candidates must possess before entering a given training program. With the above understanding, we believe that the Systematic Approach to Training methodology, as proposed in Reliability Standard PER-005-1, satisfies the Commission directive to develop a modification that identifies the expectations of the training for each job function and develops training programs tailored to each job function with consideration of the individual training needs of the personnel.37

37NOPR, FERC Stats & Regs. ¶ 32,661 at P 32.

Specifically, Wisconsin Electric is concerned that this would add a number of elements to PER-005 and would create confusion over the scope of the compliance obligation. Wisconsin Electric states that this language appears to impose the Department of Energy's Systematic Approach to Training as the only acceptable methodology, which, in effect, precludes entities from adopting another approach. Wisconsin Electric is also concerned that the factors that a candidate must possess before entering a training program create a de facto compliance checklist that would exist apart from the language of the Reliability Standard. Wisconsin Electric objects to the expansion of NERC requirements to include assessment of medical condition of its personnel. Wisconsin Electric believes that the Commission should approve PER-005-1 as written without conditioning its approval on additional, unstated requirements. Commission Determination

44. Based on NERC's and other commenters' affirmation of the Commission's understanding as stated in the NOPR, the Commission confirms that Requirement R1.2 of proposed Reliability Standard PER-005-1 requires that the learning objectives and training materials be developed with consideration of the individual needs of each operator. In response to Wisconsin Electric, BG&E and the ISO/RTO Council, the Commission clarifies that it is not mandating the use of the specific Systematic Approach to Training methodology used by the Department of Energy. However, we believe that the Department of Energy's Systematic Approach to Training methodology as set forth in the DOE Handbook is a particularly good and relevant model to use.

45. DOE's Handbook is relevant for two reasons. First, it was designed to assist facilities, specifically nuclear facilities, that are within the same general industry as electric power facilities.38 Second, the DOE Handbook was written on the assumption that the user, a facility, is currently not using the DOE Systematic Approach to Training model for their training programs, which is very likely the case with respect to entities subject to PER-005-1.39 Thus, the DOE Handbook is particularly relevant to entities that transition to a systematic approach to training. We note that the DOE Handbook was compiled from a number of sources including the Institute of Nuclear Power Operations' Principles of Training System Development as well as in collaboration with personnel representing DOE contractors and private industry.40 Moreover, the DOE Handbook provides reasonable flexibility when implementing a systematic approach to training in various settings.41

38DOE has noted that although its training handbooks related to the Systematic Approach to Training were prepared primarily for DOE nuclear facilities, the information can be effectively used by any other type of facility.SeeDOE Handbook, DOE-HDBK-1074-95 at Foreword (January 1995) (Alternative Systematic Approach to Training Handbook),available at http://www.hss.energy.gov/nuclearsafety/ns/techstds/standard/hdbk1074/hdb1074a.html.

39 SeeDOE Handbook at 1.2. The DOE Handbook acknowledges that many nuclear facilities already had effective training programs in place that contain many performance-based characteristics. Accordingly, DOE Handbook states that facilities with existing training programs should not discard such programs; rather, they should validate and supplement the existing training content where necessary using systematic methods.Id.

40 SeeDOE Handbook at 1.1.

41 See id.at 1.2. In developing the DOE Handbook, DOE noted that the handbook describes the more classical concept and approach to systematically establishing training programs. However, in some cases this classical approach has proven to be time- and labor-intensive, and therefore encourages users of the handbook to consider the variety of training options that are available for establishing and maintaining personnel training and qualification programs. DOE further found that blending classical and alternative systematic approaches to training methods often yields the most effective product.SeeDOE Handbook at iii (the Foreword).

46. Finally, SPP and Westar request that the Commission clarify what is meant by “consideration of the individual needs of each operator.” The Commission provides the following clarification. A training plan is designed to prepareindividualsto perform their jobs. More specifically, a training plan should address gaps between the skills necessary to accomplish a particular job task and an operator's competency to carry out that task. Because of the emphasis on the individual, to be effective, a training plan must take into consideration the individual needs of the trainee, which includes the trainee's education level, technical experience, and relevant medical requirements.

E. Simulation Training

47. In Order No. 693, the Commission directed NERC to develop a requirement mandating simulator training for reliability coordinators, transmission operators and balancing authorities that have operational control over a significant portion of load and generation. Recognizing that cost of simulator training is an issue, the Commission allowed for the use of simulators to be dependent on an entity's role and size.42

42 SeeOrder No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1390.

NOPR Proposal

48. In the NOPR, the Commission found that proposed Reliability Standard PER-005-1, Requirement R3.1 meets this Order No. 693 directive regarding training using simulators. However, the Commission sought comment on the terminology in Requirement R3.1 which provides that the emergency operations training should use “simulation technology such as a simulator, virtual technology, or other technology thatreplicates the operational behavior of the BES during normal and emergency conditions.” Specifically, the NOPR asked NERC to clarify: (i) Whether the language in R3.1, “replicates the operational behavior ofthe BES,” requires the use of simulators specific to an operator's own system; (ii) if not, whether operators trained on simulators that replicate systems other than their own will be adequately trained to respond to emergency conditions on their own system; and (iii) whether it is feasible or practicable (including cost considerations) to require use of simulators that realistically replicate the entity's own topology and operating conditions; i.e., to require “custom” simulators.

Comments

49. NERC and all others who commented on the simulator training issue agree that PER-005-1, Requirement R3.1, does not require the use of custom simulators.43 NERC, and other commenters,44 state that Requirement R3.1 requires a simulator to replicate the operational behavioral characteristics of the bulk electric system through the use of simulation technology. Commenters argue that the purpose of simulators is to train the operator in principles that can be applied to any system. Specifically, NRECA explains that the intent of PER-005-1, Requirement R3.1 is not to require simulators that replicate every aspect of an entity's own topology and operating conditions. Rather, the intent is to replicate the operational behavioral characteristics of the bulk electric system through the use of more generalized simulation technology.

43 Seecomments of APPA, BPA, EEI, GSOC & GTC, IESO, ISO/RTO Council, ITC, KCP&L, MidAmerican, Minnesota Power, Montana-Dakota, NRECA, NV Energy, NERC, NorthWestern, PG&E, Platte River, Portland, SPP, and Westar.

44 Seecomments of APPA, EEI, IESO, ISO/RTO Council, NRECA, Northwestern, PG&E, Platte River, Portland, SPP, and Westar.

50. All commenters, except for BPA, agree that the simulator training requirementshould notrequire custom simulators. Some commenters argue that custom simulators are not necessary.45 These commenters argue that it is the understanding of situational conditions and the response to them that is the hallmark of successful operator training, and such training does not require the use of simulators specific to an operator's own system.

45 Seecomments of EEI, IESO, KCP&L, Minnesota Power, Montana-Dakota, NRECA, NV Energy, and PG&E.

51. For example, NRECA states that it is an understanding of the situational conditions and the response to them that is the key to successful operator training, and those do not require the use of simulators specific to an operator's own system. NRECA further described that simulation of operational scenarios such as: frequency response of generators, VAR flow from high voltage to low voltage, and restoration load pick-up and the potential for under-frequency tripping, are concepts common to all systems, noting that a simulator can address and train on these issues irrespective of individual system characteristics. Minnesota Power and Montana Dakota explain that, in general, elements of the bulk electric system exhibit behaviors based upon the characteristics of each element, not upon their specific location in a particular system. They posit that it is the understanding of the situational conditions and the response to them that is the key to successful operator training and that understanding does not require the use of simulators specific to an operator's own system. EEI notes that the issue of custom versus generic simulators was discussed extensively by the PER-005-1 drafting team and argues that custom simulators are not necessary to properly train personnel. EEI urges the Commission to approve PER-005-1, R3.1 without change and to allow NERC to monitor the effectiveness of the simulator training requirement for possible gaps.

52. Other commenters argue against mandating custom simulators because the cost of custom simulators would far exceed the benefit.46 APPA states that the additional cost of developing and maintaining a realistic full-scale, system-specific simulator for a small balancing authority or transmission operator would likely exceed the benefits. No commenter provided specific estimates of the incremental increase in cost of custom simulators. EEI, acknowledging that it does not have specific cost information, noted that accurate Bulk-Power System modeling and maintenance would be a significant cost driver. ITC states that although it believes that the use of system simulators specific to an operator's own system would better prepare a system operator for emergency conditions, the cost of custom simulators could likely outweigh the reliability benefits to small operators. Portland General Electric estimates that purchase, implementation and maintenance of a system-specific simulator could cost several hundred thousand dollars in up-front costs and would necessitate the addition of engineering personnel for programming and ongoing maintenance.

46 Seecomments of APPA, EEI, ISO/RTO Council, ITC, KCP&L, MidAmerican, Minnesota Power, Montana-Dakota, NRECA, NV Energy, NorthWestern, Platte River, Portland, and SPP.

53. BPA, the sole commenter that endorses modifying PER-005-1 to mandate the use of custom simulators, notes that it uses custom simulators. BPA acknowledges that the cost of implementing and maintaining a high fidelity simulator is significant, but suggests an alternative approach of developing a centralized, high fidelity simulator that realistically replicates the entire interconnection that could be remotely accessed by entities for training exercises.

54. NERC notes in its comments that custom simulators could be important in ensuring the reliability of the BES. NERC further states that while a high fidelity simulator may not be necessary to ensure bulk electric system reliability, NERC agrees that simulators used for training that provide a useful representation of the system that the operators work with may warrant further consideration in a subsequent version of the proposed standard.47 EEI appears to agree with NERC, as EEI urges the Commission to allow NERC to implement the new PER-005-1 requirements, gather experience on their effectiveness, and monitor results for possible gaps or challenges that arise with experience.

47NERC Comments at 14.

Commission Determination

55. We affirm NERC's and the industry's understanding that PER-005-1, Requirement R3.1 does not require the use of simulators specific to an operator's own system. While the Commission continues to feel there is value in using custom simulators, we acknowledge that NERC and industry have determined that it is not necessary at this time. However, NERC and other commenters state that there may be potential reliability benefits of some form of custom simulators. NERC has also proposed to consider custom simulators in a subsequent modification of PER-005-1. We appreciate NERC's commitment to continually look at how reliability can be improved and encourage NERC and industry to evaluate the gained reliability in requiring the use of custom simulators.

F. Local Transmission Control Center Operator Personnel Training

56. In Order No. 693, the Commission directed NERC to expand the applicability of currently effective Reliability Standard PER-002-0 to include local transmission control center operator personnel. Order No. 693 provided that the training should be tailored to the functions that local transmission control center operators perform that impact the reliable operation of the Bulk-Power System for both normal and emergencyoperations.48 Proposed Reliability Standard PER-005-1, which is intended to supersede existing Reliability Standard PER-002-0, does not include local transmission control center operator personnel in the applicability section. Rather, proposed Reliability Standard PER-005-1, as drafted, is applicable only to the following three functional entities: reliability coordinators, balancing authorities, and transmission operators. NERC explained that its functional model lists the functions that a transmission operator performs, which includes the functions performed by local transmission control center personnel. NERC therefore concluded that, the Order No. 693 directive to include formal training for local transmission control center personnel is addressed in proposed Reliability Standards PER-005-1 because the transmission operator has the ultimate responsibility to ensure that its functional responsibilities are met, even if through other entities.49

48Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1348.

49NERC Petition at 30.

NOPR Proposal

57. In the NOPR, the Commission rejected NERC's explanation regarding the failure to include local transmission control center operating personnel in the proposed training standard. The Commission stated in the NOPR that, contrary to NERC's suggestion, under proposed Reliability Standard PER-005-1, a transmission operator could not require a local transmission control center operator to receive training if that operator is employed by an entity other than a reliability coordinator, balancing authority, or transmission operator. The Commission noted that with respect to proposed Reliability Standard PER-005-1, the standard requires transmission operators, reliability coordinators, and balancing authorities to establish a training program for thecompany-specifictasks performed byitsSystem Operators.50 Thus the proposed standard only requires implementation of a training program for operators employed by the applicable entity's own company. Accordingly, the NOPR proposed to direct NERC to modify proposed Reliability Standard PER-005-1 to include a provision that explicitly addresses training for local transmission control centers, consistent with the Commission's directive in Order No. 693.

50Reliability Standard PER-005-1, Requirement R1.1 (emphasis added).

Comments

58. NERC, and all other commenters that address this issue, object to the Commission's proposal to direct NERC to expand the applicability of PER-005-1 to explicitly include local transmission control center personnel. Some commenters agree with NERC's position, stated in its Petition, that the local transmission control center operators will receive the necessary training without explicitly including them as a class subject to PER-005-1.51 These commenters are concerned that the Commission's directive will require the creation of a new class of registered entities.

51 Seecomments of IESO, NRECA, and NV Energy.

59. The majority of commenters52 state that the term “local transmission control center” is unclear and undefined and, without definition, is subject to broad interpretation. These commenters raise the concern that “if local transmission control center” is not clearly defined, it could result in training requirements applying to non-NERC jurisdictional persons or entities. Commenters appear generally to support a definition that would define local transmission control centers as those which have authority to make decisions concerning the real-time operation of the bulk electric s