On May 18, 2023, the Federal Energy Regulatory Commission ("FERC") took one more step in its ongoing efforts to enhance and protect the reliability of the bulk power system by approving a work plan submitted by the North American Electric Reliability Corporation ("NERC"). Though the approval order is a major procedural step toward enhancing reliability, some stakeholders may say it is not enough. As reported in a previous post, FERC required NERC to submit a work plan to register entities that own or operate inverter-based resources ("IBRs") that have, in the aggregate, a material impact on the reliability of the bulk power system. Consistent with other IBR proceedings, FERC defines IBRs to include solar photovoltaic, wind, fuel cell, and battery storage resources powering electronic devices that change direct current power produced by these resources to alternating current power to be transmitted on the bulk power system.
Identification and Registration
In the 2022 IBR Registration Order, FERC required NERC to file a work plan to identify and register unregistered IBRs that, in the aggregate, have a material impact on the reliable operation of the bulk power system but are not currently required to be registered with NERC. NERC's work plan proposes to revise its Rules of Procedure and Registry Criteria to create a new registered function, called Generator Owner IBRs ("GO-IBRs"), made up of IBRs that: (i) have aggregate nameplate capacity of 20 to 75 MVA interconnected at a voltage of at least 100 kV; and (ii) have aggregate nameplate capacity of at least 20 MVA interconnected at a voltage less than 100 kV. NERC asserts that these registration criteria will result in approximately 98% of IBRs connected to the bulk power system being subject to applicable NERC Reliability Standards.
NERC plans to register IBRs subject to the new registration requirements through changes to NERC's registration program, though it states that it will continue to examine whether other revisions, such as changes to the definition of "Bulk Electric System," are appropriate.
Distribution-Connected IBRs Excluded
Both the IBR Registration Order and NERC's work plan excluded a requirement to consider the registration of distribution-connected IBRs, including Distributed Energy Resources (the latter referred to as "IBR-DERs"). FERC declined commenters' requests for clarification on this limitation, finding that NERC's collaboration with stakeholders to revise its Rules of Procedure related to registration is the appropriate forum for determining details related to NERC's proposed registration threshold. Hence, FERC did not require NERC to further clarify whether its work plan was intended to register facilities used solely in local distribution.
FERC also agreed with NERC's three-year timeline for developing the required registration process. From the issuance of the Work Plan Order on May 18, 2023, NERC's milestones are to: (i) modify its registration processes within 12 months; (ii) identify unregistered IBR owners and operators meeting the new registration criteria within 24 months; and (iii) ensure IBR owners and operators are registered and required to comply with applicable Reliability Standards within 36 months.
Undue Discrimination Concerns
Commenters raised concerns that NERC's plan would put IBRs at a competitive disadvantage against conventional generation by proposing a registration requirement applicable only to IBRs. FERC found the concerns speculative and premature, given that the commenters offered no evidence of any such competitive disadvantage and that NERC has committed to conduct outreach to entities not traditionally included on its compliance registry and to inform all stakeholders. FERC encouraged entities to use the NERC stakeholder process to raise any concerns of competitive disadvantage.
While many will welcome FERC's approval of NERC's IBR registration work plan, concerns remain over the long three-year timeline and potential further regulatory delay deferring the enhancement of bulk power system reliability. FERC itself recognized the possibility that it could take issue with the substance or direction of the registration approach eventually proposed by NERC. FERC made it clear in the Work Plan Order that it was not addressing the potential registration approach, scope, and detail of NERC's ultimate registration plan. Owners and operators of IBRs that are potentially subject to registration should monitor stakeholder proceedings and actively participate to improve the chances that NERC's registration protocol ultimately addresses their interests and passes muster with FERC.
 N. Am. Elec. Reliability Corp., 183 FERC ¶ 61,116 (2023) ("Work Plan Order").
 Registration of Inverter-Based Resources, 181 FERC ¶ 61,124 (2022) ("2022 IBR Registration Order").
 2022 IBR Registration Order at P 33.
 Work Plan Order at P 32.
 Id. FERC noted that under NERC's current registration process, only 84% of IBRs connected to the bulk power system are subject to applicable NERC Reliability Standards.
 Work Plan Order at P 39.
 Work Plan Order at PP 45, 48.
 Work Plan Order at P 48.
 Work Plan Order at P 49. During the first year, NERC plans to revise the registration-related sections of its Rules of Procedure, in coordination with stakeholders and various committees on the revisions. NERC then plans to incorporate stakeholder feedback and post the revisions for public comment before receiving approval from its Board of Trustees and filing the revisions with FERC. During the second year, NERC plans to identify unregistered IBRs through Energy Information Administration (EIA) Form 860 data and data requests to reliability and planning coordinators, transmission owners, transmission planners, and distribution providers. During the third year, NERC plans to complete registration activities for GO-IBRs, which includes issuance of notification letters to new GO-IBRs with information on their registration and compliance responsibilities with applicable NERC Reliability Standards.
 Work Plan Order at PP 10, 52. FERC noted that it will review NERC's 90-day progress reports upon receipt.
 Work Plan Order at PP 54-55.
 Work Plan Order at P 56.
 Work Plan Order at P 37.