Overview
In a June 27, 2024 Order, FERC accepted NERC-proposed revisions that would "ensure that unregistered [non-Bulk Electric System (BES) Invertor-Based Resources (IBRs)] will become subject to Reliability Standards currently applicable to generator owners and operators in May 2026 and then become subject to additional Reliability Standards following the implementation of projects developed in accordance with Order No. 901." FERC’s aim was to ensure NERC registration of entities that either own and maintain (Category 2 GO), or operate (Category 2 GOP), non-BES IBRs that either have or contribute to an aggregate nameplate capacity of greater than or equal to 20 MVA, connected through a system designed primarily for delivering such capacity to a common point of connection at a voltage greater than or equal to 60 kV.
In the June 27, 2024 Order, FERC noted that "NERC has made clear that its proposed revisions do not address IBRs connected to the local distribution system and do not address IBR-DERs." Thus, if a resource owner that would otherwise qualify as a Category 2 GO, owns a resource connected to, for example, a 69 kV local distribution facility, it would not be covered by the order. The local distribution facility exception is particularly relevant to those Category 2 GOs/GOPs interconnected to the very few utilities who treat 69 kV facilities as local distribution facilities. In short, the order did not address DERs, but it likely impacted many qualifying facilities (QFs) that are equal in size to the 20 MVA minimum, as many QFs try to meet, but not exceed, the 20 MW net output threshold for the FPA rate exemption.
The primary issue left unresolved by the June 27, 2024 Order was to which Reliability Standards the Category 2 GOs/GOPs would be subject on May 15, 2026. FERC explained in the order that "NERC has not provided in its petition a list of new or modified Reliability Standards that would apply to Category 2 generator owners and Category 2 generator operators." FERC also noted that "[o]nce NERC has provided a list of new or modified Reliability Standards, NERC and [FERC] can evaluate any concerns that new registrants may have with the Reliability Standards applicable to them."
On August 27, 2025, NERC submitted a Petition to change the definitions of Generation Owner and Generation Operator in its Glossary of Terms used in NERC Reliability Standards. The new definitions mirror the definitions already approved for registration purposes, but perhaps far more importantly, tucked away in the Petition (first mentioned five pages in) is a request for FERC to approve an implementation plan that states which Reliability Standards would apply as of May 15, 2026. Those standards are as follows:
- BAL-001-TRE (Primary Frequency Response in the ERCOT Region)
- IRO-010-5 (Reliability Coordinator Data and information Specification and Collection)
- MOD-032-1 (Data for Power System Modeling and Analysis)
- PRC-012-2 (Remedial Action Schemes)
- PRC-017-1 (Remedial Action Scheme Maintenance and Testing)
- TOP-003-6.1 (Transmission Operator and Balancing Authority Data and Information Specification and Collection)
- VAR-001-5 (Voltage and Reactive Control)
- VAR-002-4.1 (Generator Operation for Maintaining Network Voltage Schedules)
Also, an attachment to the Petition noted that "currently approved Reliability Standards PRC-028-1, PRC-030-1, and recently filed NERC Reliability Standard PRC-029-1 is drafted such that, if approved, will be enforceable for Category 2 GOs and GOPs based on the Implementation Plans for those Reliability Standards." (FERC approved PRC-029-1 on July 24, 1015.) These standards’ implementation dates, however, are after May 15, 2026. That said, "[a]ll other Reliability Standards using GO and GOP may become applicable and enforceable to generation assets that meet the Category 2 criteria upon their revision and in accordance with their respective revised Reliability Standard language and Implementation Plans." The timeline as to when Category 2 GOs/GOPs may become subject to additional Reliability Standards is unclear because, according to NERC, "it may take additional time for NERC to determine which of these Reliability Standards should apply to Generator Owners or Generator Operators with IBRs meeting the Category 2 criteria, balancing all relevant considerations, and the appropriate revisions and timeframe to effectuate such applicability."
This relatively modest list should ease the compliance burden for Category 2 GOs/GOPs in the short term, if approved by FERC. The Solar Energy Industries Association and the American Clean Power Association had expressed concerns about compliance costs, as reflected in the June 27, 2025 Order. Comments on the NERC proposal are due September 17, 2025. Notably, FERC in issuing final rules on Reliability Standards has not mentioned, or followed, Executive Order 14192, such that it is not expected that the Administration will delay the rulemaking process once it commences.
