The North American Electric Reliability Corporation (NERC) has proposed that all transmission facilities operated at 100 kV or higher and all real and reactive power resources connected to the grid at 100 kV or higher be subject to its Reliability Standards. In NERC’s January 25, 2012 petition to the Federal Energy Regulatory Commission (FERC) to approve its revised definition of “Bulk Electric System” (BES) – the term used by NERC to identify the electric transmission, generation and related facilities subject to the Reliability Standards – NERC adopted 100 kV as a bright-line threshold for identifying BES facilities, but also included all blackstart resources regardless of size or voltage level. NERC’s revised definition would exclude local distribution and radial facilities. Although the 100-kV threshold is the defining element of the revised definition, owners and operators of facilities subject to BES designation will have an opportunity to seek an exception using NERC’s BES Exception Procedure proposed in connection with the revised definition of BES.

NERC’s revised definition appears to meet FERC’s requirement in Order Nos. 743 and 743-A that NERC establish a uniform standard for identifying BES facilities. The additional detail proposed by NERC in the definition, together with the formal Exception Procedure, should help regulated entities identify which facilities are BES facilities and thus subject to the Reliability Standards. Although the revised definition remains subject to FERC approval and interested parties will have an opportunity to submit comments on the proposal (in FERC Docket Nos. RM12-6 and RM12-7), entities with facilities that could for the first time fall within the scope of regulated BES facilities should begin the process of inventorying their facilities and assessing their state of compliance.

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