FERC approves revised definition of bulk electric system

FERC Bulk Electric System Definition sets a bright-line 100 kV threshold, clarifies transmission vs. local distribution under the Federal Power Act, references Order No. 888, and adopts NERC's exception process for reliability and case-by-case determinations.

The Federal Energy Regulatory Commission FERC recently issued a final rule revising the definition of the bulk electric system. The revisions, proposed by the North American Electric Reliability Corporation NERC, should provide greater transparency and uniformity in defining the bulk electric system.

Key revisions to the current definition remove language allowing for broad discretion across the reliability regions under FERC reliability standards and establish a “bright-line” threshold that includes all facilities operated at or above 100 kilovolts.

Today’s final rule also establishes a process for seeking a Commission ruling on whether facilities otherwise included in the bulk power system are used in local distribution as set forth in the Federal Power Act, paralleling FERC's transmission siting rule processes in related dockets.

The starting point for this case-by-case analysis will be Order No. 888’s seven-factor test for determining whether a facility is a local distribution or transmission facility, and, where relevant, recent market-based rate reforms that address market power, however, FERC will consider other factors based on the specific situation.

In other revisions, the final rule:

- Identifies five facilities configurations that are included in the bulk electric system under evolving grid rules adopted by policymakers.

- Identifies four facilities configurations that are not included in the bulk electric system.

- Accepts North American Electric Reliability Corporation’s proposed exception process rules to add or remove system elements from the definition on a case-by-case basis.

The final rule takes effect 60 days after publication in the Federal Register, absent any FERC delay in implementation.

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