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Functional Model FAQ
The Functional Model is a reference tool that links responsible entities with associated reliability-related functions and respective tasks. Drafting teams use the Functional Model to help them determine which responsible entity should be required to comply with each requirement in a Reliability Standard.
In the past, drafting teams used an informal process when seeking answers to questions about the Functional Model. A drafting team coordinator contacted the FMWG chair and the chair responded to the request via email.
With the recent expansion in the number of drafting teams working in parallel, it is no longer practical to use such an informal process for handling questions about the Functional Model. To provide consistent responses to questions about the Functional Model that can be used by all drafting teams, a more open and inclusive process is needed.
The FMWG is following this formal process for handling requests for clarification of the Functional Model. This process is more open and inclusive as the avenue for requesting clarifications and the avenue for reviewing clarifications is accessible to all drafting teams as well as any other interested stakeholders.
  1. If a drafting team needs help in understanding tasks that comprise a function or in determining which reliability model function entity is responsible for a function or task, the drafting team's coordinator will email the NERC staff assigned as FMWG facilitator with a request for clarification.
  2. The NERC staff assigned as FMWG facilitator will convene a conference call or meeting of available members of the FMWG to review the questions and provide a clarification.
    1. If the questions need more detailed discussion with the drafting team, the two coordinators will organize a conference call or meeting with available members of the FMWG and available members of the drafting team to discuss the issues in more detail.
  3. Each FMWG request for clarification and the associated response will be posted on the NERC Functional Model web page under a Frequently Asked  Questions section.
    1. If the questions result in changes to the model, the changes will be added to a change summary table used to develop the next updated version of the Functional Model document.
The Functional Model continues to confuse functions with organizations. What can be done to fix this?
NERC staff reformatted the Functional Model document to distinguish between functions, which are defined as tasks, and responsible entities, which are organizations that register with NERC to perform the functions. Version 4 of the Functional Model lists the tasks associated with each function separately from the interrelationships among the responsible entities. The NERC Reliability Standards will specify what responsible entities must do or achieve to maintain electric system reliability.
NERC staff also developed a Technical Discussion document that contains the explanations, opinions, and discussions of the FMWG and contains examples of how functions can be rolled up in an organization.
Is the Functional Model a Reliability Standard?
The Functional Model provides the foundation and framework for NERC’s Reliability Standards, but is not a standard itself. In that regard, it is similar to the Reliability Principles and Market Interface Principles in NERC’s Reliability Standards Process Manual. It defines the basic functions that must be performed to ensure that the Bulk Electric Systems are planned and operated reliably. The Functional Model also describes the interrelationship between the responsible entities. However, the it does not include compliance measures or requirements.
A “Purpose” statement is in the Functional Model document that further explains how the model is used within NERC and by other organizations that write standards and business practices. A “Guiding Principles” section clearly explains the basis for the model.
How can the Functional Model be revised?
The FMWG is responsible for revisions to the Functional Model. The FMWG reviews annually need to revise the Functional Model based on input from NERC Standing Committees, Standards Drafting Teams, and the industry at large. The new version of the Functional Model is provided for public review and comment, with final consideration and approval by the standing committees.
Why doesn’t the Functional Model mention the Regional Entities?
The Regional Entities are organizations, not functions. The Regional Entities may perform some of the functions defined in the Functional Model. For instance, some Regional Entities perform the Reliability Operations function (Reliability Coordinator), some the Planning Reliability functions (Planning Coordinator), and all perform the Compliance Enforcement (Compliance Enforcement Authority) function.
Does the Planning Coordinator consider the Regional Council’s planning standards when assessing the “plan?”
The Planning Coordinator assesses plans against NERC Reliability Standards. The Planning Coordinator may also assess plans against other industry Reliability Standards; however, NERC compliance will be based on NERC Reliability Standards.
Why doesn’t the Functional Model include the FERC-defined Transmission Provider from Order 888?
For two reasons: First, many organizations are not FERC-jurisdictional, and their provision of transmission services may not align with FERC’s Transmission Provider; and second, FERC defines the Transmission Provider as an organization, not a function.
“The public utility (or its Designated Agent) that owns, controls, or operates facilities used for the transmission of electric energy in interstate commerce and provides transmission service under the Tariff.” (from pro forma tariff)
Thus, the FERC-defined Transmission Provider has actually “bundled” several functions that can today be performed by separate organizations. For instance, one can envision an organization that owns transmission and a separate organization that operates the transmission system. Both of these organizations could be within an RTO that provides transmission service through its tariff.
It appears that the revisions to the Functional Model are trying to align with FERC's proposed Standard Market Design and RTO structures. Is that true?
No. The Functional Model is designed to accommodate any market design and does not assume any particular organization structure. It’s designed for traditional, vertically integrated utilities, regional transmission organizations, independent system operators, and so on.
Why are the Transmission Owner and Transmission Operator separate functions? Similarly, why are the Generator Owner and Generator Operator separate functions?
These are separate, fundamental functions that comprise sets of related tasks that can be performed by separate organizations. For instance, some organizations, such as an RTO, provide the Transmission Operations function for their members who are individual Transmission Owners. However, other organizations have bundled the Transmission Ownership and Transmission Operations functions. Similarly, a Generator Owner can arrange for a Generator Operator to operate its facilities.
Why is the Interchange Authority’s role restricted to bilateral transactions?
The sole purpose of the Interchange Authority is to bring the financial “deal” between Purchasing-Selling Entities across Balancing Areas to physical implementation. Financial transactions within markets are handled by the Market Operator and do not need the services of the Interchange Authority.
Why does the model include the Market Operator?
This function in the Functional Model recognizes that it provides energy and capacity products in some markets. The Market Operator is also an interconnection point between the NERC Functional Model and models that other organizations may create as a framework for market structures and business practices.
Is the “Generator Operator” referred to in our standards strictly related to System Operators or does it also includes power plant operators?  Due to the fact that a power plant operator operates generator units, should they receive the same training as that of a system operator?
The NERC Functional Model identifies entities with specific functions and tasks that support the reliability of the Bulk Electric System. Several entities, including the Generator Operator, are staffed with System Operators in their respective control centers (i.e., Balancing Authority, Transmission Operator, Generator Operator, and Reliability Coordinator).
This is concept supported by the NERC Glossary of Terms with the following definitions:
  • Generator Operator: The entity that operates generating unit(s) and performs the functions of supplying energy and Interconnected Operations Services.
  • System Operator: An individual at a control center (Balancing Authority, Transmission Operator, Generator Operator, Reliability Coordinator) whose responsibility it is to monitor and control that electric system in real time.
Power plant operators control and monitor boilers, turbines, generators, and auxiliary equipment while the System Operator (Generator Operator) monitors the status of the generating facility and controls the real and reactive power (i.e., AGC control signals) in a manner to support Interconnection frequency the overall reliability of the Bulk Electric System.
The NERC Personnel Performance, Training, and Qualifications (PER) Standards are applicable to the Balancing Authority, Transmission Operator, and Reliability Coordinator entities and contain specific requirements associated with the training and qualification of System Operators responsible for the execution of the tasks assigned to these entities (i.e., Balancing Authority, Transmission Operator, and Reliability Coordinator). The opinion of the FMWG is that the NERC PER Standards are not applicable to the System Operators associated with the Generator Operator entities and are therefore not applicable to power plant operators.
This FMWG opinion is a direct response to a NERC staff request to address a stakeholder’s question and does not constitute a formal interpretation on behalf of NERC and is not meant to provide evidentiary testimony for compliance determinations and is informational only. If what is sought by the requester is a strict interpretation, the FMWG suggests that the NERC formal process for interpretation be initiated as outlined in the NERC Reliability Standards Development Procedure.
Does the Balancing Authority have responsibility for providing frequency response?
In Section 11-5 of the Functional Model Technical document, Providing and Deploying Ancillary Services, it is stated "The Functional Model explains that the Balancing Authority, alone or in coordination with the Reliability Coordinator, determines the amount required and arranges for reliability-related services to ensure balance. The Balancing Authority determines regulation, load following, frequency response, and contingency reserves, etc. and deploys these as reliability-related services." 

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