Category 2 IBR Registration & Compliance: Technical Guide for Asset Owners and Operators

Executive Summary

The North American bulk power system (BPS) is undergoing a fundamental transformation driven by the rapid growth of inverter-based resources (IBRs), including solar photovoltaic (PV), wind, battery energy storage systems (BESS), fuel cells, and hybrid plants. While these technologies deliver decarbonization, flexibility, and efficiency, they also introduce new reliability challenges that differ materially from those associated with traditional synchronous generation.

In response, the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) have launched a coordinated, multi-year regulatory initiative to identify, register, and regulate a previously unregistered class of bulk power system–connected inverter-based resources, now commonly referred to as Category 2 IBRs. This effort fundamentally changes the compliance landscape for many owners and operators who historically operated outside mandatory NERC Reliability Standards.

This white paper provides a comprehensive, end-to-end explanation of the Category 2 IBR Registration Initiative, associated compliance timelines, applicable Reliability Standards, and the technical implications of FERC Order No. 901. It is written for executives, compliance managers, engineers, developers, and legal teams seeking a clear, actionable understanding of their obligations and risks.

1. Background: Why Category 2 IBRs Matter

1.1 The Reliability Gap

As inverter-based generation increased across North America, NERC identified a growing population of resources that:

• Are connected to the Bulk Power System (BPS),
• Have a material aggregate impact on system reliability,
• But do not meet the Bulk Electric System (BES) definition, and
• Were therefore not registered and not subject to NERC Reliability Standards.
  
  

This created a structural reliability gap. System planners and operators increasingly relied on IBRs for energy, capacity, and ancillary services, yet lacked enforceable mechanisms to ensure model accuracy, performance validation, data sharing, and disturbance response.

1.2 FERC Direction and NERC Response

In 2022, FERC formally directed NERC to address this gap by identifying and registering unregistered BPS-connected IBRs. NERC responded by developing and filing a multi-phase Work Plan, approved by FERC in May 2023, to bring these resources into the Electric Reliability Organization (ERO) Enterprise framework.

2. What Is a Category 2 IBR?

2.1 Definition2.1 Definition

A Category 2 Inverter-Based Resource is generally defined as a non-BES inverter-based generating resource that:

• Has or contributes to an aggregate nameplate capacity of 20 MVA or greater,
• Is connected through a system designed primarily to deliver power to a common point of connection, and
• Is interconnected at a voltage of 60 kV or higher.
  
  

These facilities are typically too large to be considered purely distribution-level resources, yet historically fell outside BES-based registration thresholds.

2.2 Functional Registration

Category 2 entities may be registered as:

• Generator Owners (GO),
• Generator Operators (GOP), or
• Both GO and GOP, depending on ownership and operational responsibilities.
  
  

Registration is functional, meaning compliance obligations attach to the specific reliability functions performed.

3. The IBR Registration Initiative: Structure and Timeline

3.1 Three-Phase Work Plan

NERC’s FERC-approved Work Plan follows three core phases:

1. Registry Criteria Development – Updating NERC Rules of Procedure to define Category 2 GO/GOP registration.
2. Identification & Outreach – Identifying candidate facilities and conducting extensive industry outreach.
   
   

Registration & Integration – Formal registration, onboarding, and compliance integration.

The registration of Category 2 GO/GOPs becomes effective May 15, 2026. From this date forward, registered entities are subject to mandatory compliance and enforcement.

4. Compliance Monitoring and Enforcement (CMEP)

4.1 What CMEP Means for New Registrants

Once registered, Category 2 entities enter the Compliance Monitoring and Enforcement Program (CMEP). CMEP governs:

• Audits and spot checks
• Self-certifications
• Self-reports and mitigation
• Enforcement actions and penalties
  
  

NERC and the Regional Entities have emphasized onboarding support, but CMEP expectations remain legally binding.

4.2 No Informal Grace Period

While NERC provides education and outreach, the compliance dates are explicit. Registration automatically triggers CMEP applicability for enforceable standards.

5. Reliability Standards Applicable to Category 2 IBRs

5.1 Initial Enforceable Standards (Effective May 15, 2026)

Eight Reliability Standards apply to Category 2 IBRs without requiring modification:

• BAL-001-TRE-2 – Real Power Balancing Control Performance
• IRO-010-5 – Reliability Coordinator Data Specification
• MOD-032-1 – Data for Power System Modeling and Analysis
• PRC-012-2 – Special Protection System Data and Documentation
• PRC-017-1 – Protection System Maintenance and Testing
• TOP-003-6.1 – Operational Reliability Data
• VAR-001-5 – Voltage and Reactive Control
• VAR-002-4.1 – Automatic Voltage Regulator Requirements
  
  

These standards form the minimum compliance baseline for Category 2 entities.

5.2 Standards Requiring Modification

Most other NERC Reliability Standards reference BES-based definitions and therefore require formal modification before they can apply to Category 2 IBRs. These revisions occur through the NERC Standards Development Process and are often driven by FERC directives.

6. FERC Order No. 901: The Technical Backbone

6.1 Purpose of Order No. 901

FERC Order No. 901 addresses systemic weaknesses in IBR modeling, validation, and study practices. The Order directs NERC to ensure that inverter-based resources are accurately represented in planning, operational, and event analysis models.

6.2 Milestone 3 Projects

Key standards projects under Milestone 3 include:

• Project 2020-06 – Verification of Models and Data for Generators
• Project 2021-01 – System Model Validation with IBRs
• Project 2022-02 – Uniform Modeling Framework for IBRs
• Project 2022-04 – Electromagnetic Transient (EMT) Modeling
  
  

These projects significantly expand expectations for data quality, model verification, and disturbance-based validation.

6.3 Milestone 4 (Looking Ahead)

Milestone 4 projects focus on operational and planning studies involving IBRs, further integrating these resources into real-time and long-term reliability assessments.

7. Technical Implications for Category 2 IBR Owners and Operators

Category 2 registration is not merely administrative. It carries substantial technical obligations, including:

• Submission of accurate steady-state and dynamic models
• Participation in model validation and correction
• Support for EMT studies where required
• Maintenance of protection, voltage control, and reactive capability
  
  

Engineering rigor and documentation become enforceable expectations.

8. Risk, Liability, and Strategic Preparation

8.1 Compliance Risk

Failure to prepare exposes entities to:

• Audit findings
• Penalties
• Required mitigation plans
• Reputational risk
  

8.2 Strategic Advantage of Early Preparation

Organizations that invest early in compliance readiness gain:

• Reduced enforcement risk
• Faster audit response
• Better interconnection and planning outcomes
• Improved credibility with regulators and system operators
  

9. How Keentel Engineering Supports Category 2 IBR Compliance

Keentel Engineering provides end-to-end technical and compliance support, including:

• Category 2 applicability assessments
• GO/GOP role mapping
• Reliability Standards gap analyses
• Dynamic and EMT modeling support
• Model validation and documentation
• CMEP readiness and audit support
  

Frequently Asked Questions (FAQs)