On April 22, 2015, the United States Court of Appeals for the
Second Circuit (the "Second Circuit") upheld the
Commission's approval of NERC's Bulk Electric System
("BES") definition—a regulatory mechanism that
plays a key role in determining which facilities are subject to
NERC mandatory Reliability Standards.
On December 20, 2012, the Commission issued Order No. 773, which
adopted NERC's proposed BES definition. Under NERC's
definition, the BES consists of "all Transmission Elements
operated at 100 kV or higher and Real Power and Reactive Power
resources connected at 100 kV or higher," subject to certain
enumerated inclusions and exclusions. Order No. 773 also approved
an exemption process that permits entities to petition for: (i)
removal of a facility from, or addition of a facility to, the BES
on a case-by-case basis, as determined by NERC; and (ii) a
jurisdictional determination that certain facilities are used in
"local distribution," as determined by FERC.
