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FERC Approves NERC’s Proposed Interpretation of VAR-002-1.1b

On September 17, 2010, FERC issued an order approving a NERC's proposed interpretation of Requirements R1 – R5 of VAR-002-1.1b (“VAR-002”). In general, VAR-002 requires Generator Operators to operate their generators in the automatic voltage control mode unless they have notified the transmission operator. If a Generator Operator’s automatic voltage regulation ("AVR") is out of service, VAR-002 requires the Generator Operator to use an alternative method to control generator voltage and meet the reactive power schedule directed by the transmission operator (or otherwise explain why the schedule cannot be met).
In its order, FERC agreed with NERC that VAR-002 does not require generators to add or install AVR, and that other reliability standards provide incentives to do so. FERC did note its concern that a generator could take an overly broad view of NERC’s interpretation and apply it to a generator that already has AVR capability. FERC stated that this would be a misapplication of NERC’s interpretation, and that the interpretation is not intended to facilitate the removal of installed AVR for economic reasons or a failure to timely return a generator to operable AVR mode. However, since NERC’s interpretation is consistent with VAR-002, FERC concluded that any adverse behavior would be a result of a potential gap in the Standard and not the interpretation. To read FERC’s order approving NERC’s interpretation of VAR-002-1.1b, click here.