Large Transport
Flight Crew Air Transport Pilot (ATP); Flight Crew Instrument; Flight Crew Multiengine
Confusion
ATC Issue All Types; Deviation - Altitude Excursion From Assigned Altitude; Deviation / Discrepancy - Procedural Clearance; Deviation / Discrepancy - Procedural FAR
Air Traffic Control Provided Assistance; Air Traffic Control Issued New Clearance; Flight Crew Requested ATC Assistance / Clarification; Flight Crew Returned To Clearance
Weather
Climbing out of KBTV; we were cleared to 18;000 ft. Upon leveling at 18;000 ft; we set altimeters to 29.92. Doing this immediately; gave us an altitude indication of 18; 640 ft so we began a descent leveling at an altitude of 18;000 ft indicated.  Shortly thereafter; Boston Center informed us that we had indicated a level off followed by a descent to approximately 17;360 ft. I informed them about the discrepancy in our indicated altitude when setting 29.92 and informed them why the descent was initiated. Realizing that our true altitude was lower than 18;000 ft; I asked the controller if they wanted us to set the local altimeter setting of 29.28 or 29.92. The controller told us to set the local altimeter setting for the time being.  Shortly thereafter; the controller said that the next controller requested we climb to either FL190 or FL200. We elected to climb to FL200.Considering the local altimeter setting of 29.28; 18;000 ft is not a usable flight level. Both we and the controller failed to realize this until we had leveled off and reset the altimeters to 29.92. We all realized the error simultaneously and practically instantly. Given the fact that the cruising altitude of 18;000 ft was not a usable flight level; it should have never been filed by us nor should it have been assigned by the center controller. The problem with filing is not knowing the local altimeter setting for the area concerned. This can at times be hard to determine; therefore; FL180 should not be used and filed as a canned cruising flight level for flights in our system. A better idea would be to select either 17;000 ft or FL190 and above. On the controller side of the equation; there should be a system in place so that the controller is automatically alerted to the lowest usable flight level in their sector. This would prevent the assigning of an unusable flight level and the problem of insufficient altitude separation at those altitudes.  In the end; the responsibility ultimately rest with both the aircrew and the controlling agency to prevent such an event. The easiest remedy is to just not plan on a cruising altitude of 18;000 ft.
On initial climbout from KBTV; we leveled off at our filed altitude of 18;000 ft. At 18;000 ft we accomplished the normal procedure of going to 'standard' (29.92) on our altimeters. This immediately changed our indicated altitude from 18;000 ft to about 18;650 ft because the local altimeter on climb out was 29.28. The captain and I obviously recognized this immediately and I began a descent to 18;000 ft. Upon leveling at 18;000 ft; Boston commented that our altitude seemed to be changing and showed us at 17;360 ft. The captain told Boston what happened when we switched to 29.92 and asked them what the preferred for us to do; i.e. set local altimeter or 29.92. The controller requested we set local for the time being. Seconds later; she said the next controller requested we climb to either FL190 or 200. We chose to climb to FL200.This event was caused by us being filed at an unusable flight level due to the lower-than-standard altimeter setting. We; nor the controller; realized it until we leveled off and then it was immediate. It can be prevented by not filing 18;000 as a cruising altitude. Given that 18;000 ft is the transition altitude; it just makes sense to not cruise at this altitude. The company should file at 17;000 ft or FL190.
Flight crew of a Large Transport aircraft reported descending approximately 700 feet due to using the local altimeter setting instead of 29.92. ATC asked about their altitude change and then assigned FL200 to fix the discrepancy.