The new grades, released last week, are based on students' proficiency on statewide math, science and language arts tests and the percentage who show sufficient annual growth in their scores. High schools get additional points based on graduation rates.
Meanwhile, Niederhauser met Tuesday with lawmakers, educators and others to discuss possible changes, including altering the bell curve the system uses, giving credit for lower levels of student growth and different grading options for alternative schools.
"We won't be making earth-shattering changes to school grading because it's based on a solid foundation," said Niederhauser. But the group came to consensus on a "few minor tweaks," he said.
Among them: removing the threat of an automatic F for schools that fail to test 95 percent of their students. "That seems draconian, but you need to have some incentive to get students to take the test," he said.
Niederhauser is now proposing dropping schools that don't meet the 95 percent threshold by just one letter grade.
He said he also has committed to changing the method for calculating student progress "by giving teachers a clear benchmark for students to meet in order to be counted as having made sufficient growth."
Changing the formula could "drastically" alter schools' scores, he acknowledged while insisting this year's letter grades will still be comparable to next year's grades.
Eleven percent of Utah's 855 traditional and charter public schools earned an A, 45 percent a B, 30 percent a C, 10 percent a D and 4 percent an F.
There are no financial rewards or penalties tied to the grades.
Herbert called the grades released this year "a baseline" that has spurred conversation but should not be seen as a definitive assessment of the quality of a school.
"I'm a little concerned about the simplification of the grading," he said.
Herbert pointed to West High School in Salt Lake City as an example. Known in part for its International Baccalaureate program for students with strong academic skills, the school received an automatic F grade because it did not have a 95 percent participation rate in testing. Otherwise, it would have received a D grade.
"Like at a West High School, where they are doing very good at International Baccalaureate, recognized as probably an A+ school in that regard, but their minorities are not graduating from high school, which means they are a D or failing in that regard," Herbert said.
"So what is the real grade for the school? Maybe it is a GPA of 2.0," Herbert said. "If we don't have a real reflection of the outcome and performance of the school then we can't manage it."
Niederhauser has noted that West's graduation rate, which was 72 percent in 2012, is lower for some subgroups of minority and lower-income students. Principal Parley Jacobs emphasizes that the "comprehensive" high school teaches subjects far beyond the three covered by state tests, and that the grades don't take into account factors such as student engagement.
Patti Harrington, executive director of Utah School Superintendents Association, said she left Tuesday's meeting when she realized lawmakers would not consider removing the letter grades.
"Grading schools is bad policy" that amendments won't fix, she said.
Harrington said she was also frustrated that lawmakers were belatedly discussing problems educators had previously raised. "Why didn't they listen before the grades went out?" she asked.
In a letter, representatives from the Utah Parent-Teacher Association, the Utah Education Association and the Utah School Boards Association asked Niederhauser to seek an independent evaluation to assess the grading law's statistical reliability and gauge whether it contains a bias against students from low-income homes, with special needs or with language barriers.
Utah already had the Utah Comprehensive Accountability System, or UCAS, in place. Despite efforts over the summer to reconcile the two systems, both remain in place. Later this month, the Utah State Office of Education will release new UCAS results.
Find your school's grade
Go to this portal and search for the school you want. Each school receives an individual report card with scores and a grade.
See our other coverage
Utah assigns grades to all schools – how did yours do?
D and F grades for Salt Lake City's high schools
Mixed grades for Wasatch Front high schools