[Federal Register Volume 62, Number 236 (Tuesday, December 9, 1997)]
[Rules and Regulations]
[Pages 64715-64720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31856]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket No. RM95-9-002; Order No. 889-B]


Open Access Same-Time Information System and Standards of Conduct

Issued November 25, 1997.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final order; order denying rehearing.

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SUMMARY: The Federal Energy Regulatory Commission is denying the 
requests for rehearing of its order on rehearing of the final rule in 
this proceeding. The final rule required public utilities that own, 
control, or operate facilities used for the transmission of electric 
energy in interstate commerce to create or participate in an Open 
Access Same-Time Information System (OASIS) in conformance with 
Commission regulations. The final rule also required

[[Page 64716]]

those public utilities to implement standards of conduct to 
functionally separate transmission and wholesale merchant functions. 
The order on rehearing made minor revisions to the final rule and 
implemented a revised transmission discounting policy. This order 
denies the requests for rehearing filed by six interested persons in 
response to the order on rehearing of the final rule.

EFFECTIVE DATE: November 25, 1997.

FOR FURTHER INFORMATION CONTACT:
Marvin Rosenberg (Technical Information), Office of Economic Policy, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, DC 20426, (202) 208-1283.
William C. Booth (Technical Information), Office of Electric Power 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
N.E., Washington, DC 20426, (202) 208-0849.
Gary D. Cohen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, DC 20426, (202) 208-0321.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in the Public Reference Room 
at 888 First Street, N.E., Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user. CIPS can be accessed over the Internet by pointing your 
browser to the URL address: http://www.ferc.fed.us. Select the link to 
CIPS. The full text of this document can be viewed, and saved, in ASCII 
format and an entire day's documents can be downloaded in WordPerfect 
6.1 format by searching the miscellaneous file for the last seven days. 
CIPS also may be accessed using a personal computer with a modem by 
dialing 202-208-1397, if dialing locally, or 1-800-856-3920, if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits and 1 stop bit. The full text of this order will 
be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user 
assistance is available at 202-208-2474.
    The complete text on diskette in WordPerfect format may be 
purchased from the Commission's copy contractor, La Dorn Systems 
Corporation. La Dorn Systems Corporation is located in the Public 
Reference Room at 888 First Street, N.E., Washington, D.C. 20426.

    Before Commissioners: James J. Hoecker, Chairman; Vicky A. 
Bailey, and William L. Massey.

Order Denying Rehearing of Order No. 889-A

    Issued November 25, 1997.

I. Introduction

    In this order, we deny the requests for rehearing of Order No. 889-
A, our order on rehearing of Order No. 889.\1\
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    \1\ Open Access Same-Time Information System and Standards of 
Conduct, Final Rule, Order No. 889, FERC Stats. & Regs. para. 
31,035, 61 FR 21737 (May 10, 1996), Order on Reh'g, Order No. 889-A, 
FERC Stats. & Regs. para. 31,049, 62 FR 12484 (March 14, 1997).
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II. Background

    In Order No. 889-A, the Commission addressed over 40 requests for 
rehearing of Order No. 889 and affirmed the major findings made 
therein. We did, however, make certain minor revisions to fine-tune the 
regulations at 18 CFR Part 37 and to implement a revised transmission 
discounting policy that we adopted and described in detail in Order No. 
888-A, our order on rehearing of Order No. 888.\2\
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    \2\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Final Rule, Order No. 888, FERC Stats. & Regs. para. 31,036, 61 FR 
21540 (May 10, 1996), Order on Reh'g, Order No. 888-A, FERC Stats. & 
Regs. para. 31,048, 62 FR 12274 (March 14, 1997).
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    The revised transmission discounting policy necessitated a number 
of changes to the Standards of Conduct and to the Open Access Same-Time 
Information (OASIS) posting requirements in 18 CFR Part 37. These were:
    (1) Deleting Secs. 37.4(b)(5)(v) and 37.4(b)(5)(vi);
    (2) Adding a provision at Sec. 37.6(c)(3) to require, among other 
things, that any offer of a discount for basic transmission service 
must be announced to all potential customers solely by posting on the 
OASIS;
    (3) Revising Sec. 37.6(c)(4) to no longer treat the posting of 
transmission service transactions involving the Transmission Provider's 
(or any affiliate's) generation merchant function any differently from 
the posting of transactions involving non-affiliates except that 
transactions involving the Transmission Provider's wholesale merchant 
function or affiliates must be identified;
    (4) Adding a provision at Sec. 37.6(d)(2) to require, among other 
things, that any offer of a discount for ancillary service provided by 
the Transmission Provider in support of its provision of basic 
transmission service must be announced to all potential customers 
solely by posting on the OASIS;
    (5) Revising Sec. 37.6(d)(3) on ancillary services to be consistent 
with our revision to Sec. 37.6(c)(4);
    (6) Revising Sec. 37.6(e)(1)(I) to require that, except for next-
hour service, requests for transmission and ancillary service must be 
posted prior to the Transmission Provider responding to these requests;
    (7) Adding a provision, at Sec. 37.6(e)(1)(ii), that during Phase 
I, while requests for next-hour service need to be posted on the OASIS 
as soon as possible and in any event within one hour of receiving the 
request, they need not be posted on the OASIS prior to being acted on;
    (8) Adding a provision, at Sec. 37.6(e)(1)(iii), that provides that 
in the event that a discount is being requested for ancillary services 
that are not in support of the Transmission Provider's provision of 
basic transmission service, such a request need not be posted on the 
OASIS;
    (9) Expanding, in Sec. 37.6(e)(1)(iv), the information required to 
be posted on the status of requests for transmission and ancillary 
service; and
    (10) Deleting the provision, formerly found in Sec. 37.6(e)(1)(iii) 
and the revised Sec. 37.6(e)(3)(I), to disallow masking the identity of 
parties to transactions.
    We also made nine minor revisions in Order No. 889-A to the 
regulations in 18 CFR Part 37 that were unrelated to our revised 
transmission discounting policy. These were:
    (1) Amending the definition of ``wholesale merchant function'' in 
Sec. 37.3(e);
    (2) Amending Secs. 37.4(b)(5)(iii) and 37.6(g)(4) to require 
Transmission Providers to post on the OASIS the information that they 
already were required to keep, detailing the circumstances and manner 
in which they exercise their discretion under any terms of the tariff;
    (3) Substituting the phrase ``sales made to any person for resale 
made by the wholesale merchant function or any affiliate'' for the 
phrase ``wholesale purchases or sales made on behalf of its own power 
customers, or those of an affiliate'' in Sec. 37.4(b)(5)(iv), to be 
consistent with the revised definition of ``wholesale merchant 
function'';
    (4) Amending Sec. 37.6(b)(1) to clarify the meaning of the term

[[Page 64717]]

``interconnection'' as used in the definition of ``posted path'';
    (5) Amending Sec. 37.6(b)(3)(ii) to clarify that firm available 
transmission capability (ATC) and nonfirm ATC for unconstrained posted 
paths must be separately posted;
    (6) Amending Sec. 37.6(e) to clarify that the provision applies to 
requests for ancillary service and that requests for service must be 
posted before the Transmission Provider responds to the request;
    (7) Amending Sec. 37.6(g)(3) to require that notices of transfers 
of personnel posted on the OASIS, as described in Sec. 37.4(b)(2), 
remain available for the same time period as audit information in 
Sec. 37.7(b);
    (8) Amending Sec. 37.7(b) to shorten, from 90 days to 20 days, the 
time during which ATC/total transmission capability (TTC) postings must 
remain available for download on the OASIS (the data will, however, 
remain available upon request for three years from the date when they 
are first posted); and
    (9) Deleting Sec. 37.8, because the compliance date for Part 37 had 
already passed.
    In response to the issuance of Order No. 889-A, requests for 
rehearing were filed by six interested persons.\3\
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    \3\ Requests for rehearing of Order No. 889-A were filed by 
Coalition for a Competitive Electric Market (CCEM), National Rural 
Electric Cooperative Association (NRECA), Transmission Access Policy 
Study Group (TAPS), and Transmission Dependent Utility Systems (TDU 
Systems). In addition, requests for rehearing of Order No. 889-A 
nominally were filed by Puget Sound Energy, Inc. (Puget Sound) and 
by the United States Department of Agriculture (USDA), although 
these rehearing requests raise no specific issues related to Order 
No. 889-A.
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III. Public Reporting Burden

    This order on rehearing makes no changes to Order No. 889-A or the 
regulations found at 18 CFR Part 37. Consequently, the public reporting 
burden associated with issuance of this order is unchanged from what we 
estimated when we issued Order Nos. 889 and 889-A. The Commission has 
conducted an internal review of this conclusion and has assured itself, 
by means of its internal review, that there is specific, objective 
support for this information burden estimate. Moreover, the Commission 
has reviewed the collection of information required by Order Nos. 889 
and 889-A, as clarified by this order on rehearing, and has determined 
that the collection of information is necessary and conforms to the 
Commission's plan, as described in this order, for the collection, 
efficient management, and use of the required information.
    Persons wishing to comment on the collections of information 
required by this order on rehearing should direct their comments to the 
Desk Officer for FERC, Office of Management and Budget, Room 3019 NEOB, 
Washington, D.C. 20503, phone 202-395-3087, facsimile 202-395-7285. 
Comments must be filed with the Office of Management and Budget within 
30 days of publication of this document in the Federal Register. Three 
copies of any comments filed with the Office of Management and Budget 
also should be sent to the following address: Ms. Lois Cashell, 
Secretary, Federal Energy Regulatory Commission, Room 1A, 888 First 
Street, N.E., Washington, D.C. 20426. For further information, contact 
Michael Miller, 202-208-1415.

IV. Discussion

    The rehearing requests collectively raise four major issues. We 
will deny rehearing on each of these issues as discussed below.

A. Section 37.1--Applicability

The Commission's Waiver Policy
    In Order Nos. 888 and 889, the Commission determined that requests 
for waiver would be better decided on a case-by-case basis so that the 
Commission could evaluate them based on individual circumstances, 
rather than as part of a generic rulemaking.\4\ In Order No. 889, we 
stated that the Commission would develop, in the context of individual 
adjudications, a mechanism that would allow small public utilities to 
seek a waiver of some or all of the Open Access requirements, including 
the requirements to establish and/or participate in an OASIS and to 
develop Standards of Conduct. This same waiver mechanism was made 
applicable to small non-public utilities seeking waiver from all or 
part of the reciprocity condition.
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    \4\ See Order No. 888, FERC Stats. & Regs. at 31,854, Order No. 
889, FERC Stats. & Regs. at 31,596.
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    Consistent with this approach, the Commission, in Order Nos. 888-A 
and 889-A, recounted the waiver standards enunciated by the Commission 
in a series of orders dealing with companies' specific requests for 
waiver of all or some of the requirements of Order Nos. 888 and 889, 
and declined to revise the standards established in those case-by-case 
determinations.\5\
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    \5\ See Order No. 888-A, FERC Stats. & Regs. at 30,293 and 
30,332-34, Order No. 889-A, FERC Stats. & Regs. at 30,554-55. We 
did, however, in Order No. 888-A, provide some clarification of the 
Commission's waiver policy. See FERC Stats. & Regs. at 30,334.
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    Additionally, in Order No. 889-A, the Commission recited the 
arguments raised in the requests for rehearing of the Commission's 
waiver policy as it related to the Commission's OASIS and Standard of 
Conduct requirements under Order No. 889. The Commission explained 
that, in a series of orders, it had developed waiver criteria that took 
into account potential burdens on small entities and at the same time 
balanced the need to prevent undue discrimination and affiliate abuse 
in interstate power markets, and that this flexible waiver approach 
adequately addressed the concerns raised on rehearing. The Commission 
concluded that an order on rehearing of a final rulemaking was not the 
proper vehicle for a company to request a company-specific waiver or to 
challenge the Commission's waiver policy. It further explained that 
waivers are appropriately addressed on a case-by-case basis, which 
permits the Commission to review the specific facts of each waiver 
application and permits affected parties to intervene and make their 
views known to the Commission.\6\
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    \6\ See Order No. 889-A, FERC Stats. & Regs. at 30,555.
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    Rehearing Requests. On rehearing, NRECA argues that the Commission 
should modify its waiver policy so that waivers terminate upon issuance 
of a Commission order, and not upon the filing of a complaint or 
request for service.\7\ NRECA argues that a waiver should be terminated 
not when an entity files a complaint, but when the Commission issues an 
order finding that the complaint has merit.\8\
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    \7\ At the time of NRECA's rehearing, the Commission's policy on 
the expiration of waivers provided that
    [w]aiver of the requirement to establish and maintain an 
information system (i.e., an OASIS) will be granted unless and until 
an entity evaluating its transmission needs complains that it could 
not get information necessary to complete its evaluation. Waiver of 
the standards of conduct will be granted unless and until an entity 
complains that a public utility has used its access to information 
about transmission to unfairly benefit the public utility's own or 
the public utility's affiliates' sales. Compliance must be made 
within 60 days of the complaint.
    Order No. 889-A, FERC Stats. & Regs. at 30,555 and Black Creek 
Hydro, Inc., et al., Order on Reh'g and Granting Waivers of Order 
No. 889, 77 FERC para. 61,232 at 61,941 (1996).
    \8\ NRECA Rehearing Request at p. 11.
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    This same basic argument is also made by TDU Systems.\9\ TDU 
Systems argues that the Commission's current waiver policy makes a 
waiver a ``mirage'', terminable by a baseless complaint made solely to 
drive up a competitor's costs by triggering

[[Page 64718]]

unnecessary compliance with the OASIS and Standards of Conduct 
requirements.\10\ Moreover, TDU Systems argues that such a complaint, 
terminating a waiver of Order No. 889 requirements, should be based on 
a ``good faith'' request for transmission service and a prima facie 
case that adequate information about a respondent's transmission 
service is unavailable, or that preferential treatment is being given 
to the respondent's wholesale merchant function.\11\
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    \9\ TDU Systems Rehearing Request at pp. 10-12.
    \10\ TDU Systems Rehearing Request at p. 11.
    \11\ TDU Systems Rehearing Request at p. 12.
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    Commission Conclusion. In a company-specific order issued 
subsequent to the date of NRECA's and TDU Systems' rehearing requests, 
the Commission modified its waiver policy in the manner requested by 
the two parties.\12\ Specifically, the Commission has reconsidered its 
policy of automatically revoking waivers of the requirements of Order 
No. 889 on the filing of a complaint and has determined that, 
henceforth, waivers will remain effective until the Commission takes 
action in response to a complaint.
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    \12\ Central Minnesota Municipal Power Agency, et al., Order on 
Requests for Disclaimer of Jurisdiction and for Waiver of Order Nos. 
888 and 889, 79 FERC para. 61,260 at 62,127 (1997).
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B. Sections 37.3 (Definitions) and 37.4 (Standards of Conduct)

Definition of ``Wholesale Merchant Function'' and Employees Engaged in 
Wholesale Purchases for Bundled Retail Customers
    In Order No. 889, in Sec. 37.6(e), the Commission defined the 
``wholesale merchant function'' as the ``sale for resale, or purchase 
for resale, of electric energy in interstate commerce.'' [Emphasis 
added]. On rehearing of Order No. 889, Consolidated Edison Company of 
New York, Inc. (ConEd) argued that the Commission had exceeded its 
authority by requiring ``transmission providers to functionally 
separate interstate electricity transmission and wholesale merchant 
functions (wholesale sales and purchases of electricity in interstate 
commerce).'' \13\ ConEd asserted that wholesale purchases of 
electricity in interstate commerce on behalf of native load customers 
are bundled retail electric service transactions that are local 
distribution and not subject to the Commission's authority.
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    \13\ ConEd Rehearing Request of Order No. 889 at p. 2.
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    In Order No. 889-A, we considered ConEd's argument and stated as 
follows:

    We agree with ConEd to the extent that when a utility uses its 
own transmission system to transmit purchased power to retail load 
customers we have no jurisdiction over the transmission that is 
included in the bundled sale of power to the retail native load. 
Upon further consideration, we conclude that our definition of 
``wholesale merchant function'' (in Sec. 37.3(e)) should be modified 
to delete the phrase, ``* * *, or purchase for resale, * * * *'' 
because this clause creates confusion and is not necessary.\14\

    \14\ FERC Stats. & Regs. at 30,552.
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We explained that when a utility purchases power for its retail native 
load customers, this is not a sale for resale. We further explained 
that,

    [i]n contrast, when a utility purchases power for its wholesale 
native load, the transmission of purchased power to the wholesale 
customer is really part of a transaction that includes a wholesale 
sale of power to a third party.\15\

    \15\ Id.
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    In Order No. 889-A, the Commission also explained that the 
Standards of Conduct do not mandate that Transmission Providers assign 
employees making purchases on behalf of bundled retail customers to the 
group performing wholesale merchant functions. Specifically, we stated:

    The standards of conduct's separation of functions currently 
prohibit a Transmission Provider's employees engaged in transmission 
system operations and reliability functions from giving preference 
to wholesale purchases or sales made on behalf of its own wholesale 
customers or those of affiliates. The standards of conduct do not, 
however, dictate whether bundled retail merchant functions are to be 
grouped with the wholesale merchant function or with the 
transmission operations and reliability function.
    Thus, FIT Utilities' request to allow dispatchers to buy power 
to serve retail load is consistent with the regulations. As 
discussed above, the regulations do not prohibit Transmission 
Providers from assigning the responsibility for making purchases to 
serve bundled retail customers to the transmission operations and 
reliability function.

    Rehearing Requests. On rehearing, CCEM argues that the Commission 
erred by modifying the definition of ``wholesale merchant function'' 
and by revising provisions of the Standards of Conduct to exempt 
transmission service provided in conjunction with a Transmission 
Provider's wholesale purchases for bundled retail sales.\16\ CCEM also 
argues that the Commission erred when it found that it lacks 
jurisdiction over transmission service that is bundled with the sale of 
power to a utility's retail native load.\17\ It argues that artificial 
distinctions between wholesale and retail transactions should be 
avoided. CCEM further argues that the Commission should insist that all 
transmission providers and customers face the same unbundled market.
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    \16\ CCEM Rehearing Request at pp. 5-6.
    \17\ CCEM Rehearing Request at p. 5.
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    Similarly, TAPS argues that the Commission's change in the 
definition of ``wholesale merchant function'' unwisely narrows the 
scope of the Standards of Conduct rules.\18\ TAPS further argues that a 
Transmission Provider's use of its own transmission system to make 
wholesale purchases for bundled retail load should not be exempted from 
functional unbundling and functional separation requirements.\19\ TAPS 
argues that the Commission erred by watering down the functional 
unbundling requirements in the Standards of Conduct by excluding 
wholesale purchases for bundled retail customers from the requirement 
to functionally unbundle.
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    \18\ TAPS Rehearing Request at pp. 3-5.
    \19\ TAPS Rehearing Request at pp. 3-5.
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    Commission Conclusion. Nothing in the rehearings convinces us to 
modify the definition of ``wholesale merchant function'' or to 
otherwise modify our decision on this issue reached in Order No. 889-A. 
However, we will repeat here certain clarifications we have made in 
response to similar arguments made in requests for rehearing of Order 
No. 888-A.
    Although we reiterate our view that the Commission does not have 
jurisdiction over the rates, terms and conditions of bundled retail 
service, as a practical matter, we do not believe that it is possible 
to divide a single power purchase made on behalf of both wholesale and 
retail native load such that the transmission provider takes service 
under the open access non-rate terms and conditions for the part of the 
purchase that goes to wholesale native load, but takes service under 
different terms and conditions for the part of the purchase that goes 
to retail native load. Because the power purchase transaction 
(including the delivery across the transmission provider's system to 
both wholesale and retail customers) is indivisible, and because the 
transmission of the purchased power to the wholesale native load 
customer must be done pursuant to the open access tariff, this means 
that the entire transaction de facto must be pursuant to the non-rate 
terms and conditions of the tariff.
    Concerning the Standards of Conduct requirement that public 
utilities separate their wholesale power marketing functions from their

[[Page 64719]]

transmission operations, the Commission did not require separation of 
the retail power marketing function because the state has jurisdiction 
over retail power marketing and over bundled retail transmission. 
However, here too we believe further clarification is necessary. First, 
the public utility has no choice pursuant to Order Nos. 888 and 888-A 
but to separate its wholesale power marketing function (including power 
purchase transactions made by the marketing function on behalf of 
wholesale native load) from the transmission operations function. This 
means that those persons in the company that are involved in wholesale 
power purchases as well as wholesale sales cannot interact with the 
transmission personnel other than through the OASIS. Thus, to the 
extent they are making purchases on behalf of wholesale as well as 
bundled retail native load as part of a single purchase, they will have 
to abide by the separation of function requirement. As discussed above, 
such a purchase is not divisible. Additionally, it is conceivable that 
there could be a separate retail marketing function for native load and 
a separate wholesale marketing function for native load. If a challenge 
is made to the way a utility organizes its functions, then the utility 
bears the burden of demonstrating that it is maintaining a separate 
staff to perform retail marketing functions. Furthermore, in such 
cases, it would clearly be inappropriate for the retail staff to share 
transmission information with the wholesale marketing staff.

C. Section 37.6--Information To Be Posted on an Oasis

Transmission Discounting Policy
    In Order No. 889-A, we explained that the Commission was adopting a 
revised discounting policy in Order No. 888-A that necessitated changes 
to the OASIS and Standards of Conduct regulations found in 18 CFR Part 
37. These changes entailed three principal requirements.
    First, any offer of a discount for transmission and/or ancillary 
services made by the Transmission Provider must be announced to all 
potential customers solely by posting on the OASIS.
    Second, any customer-initiated requests for discounts of 
transmission and/or ancillary services must occur solely by posting on 
the OASIS, regardless of whether the customer is the Transmission 
Provider's wholesale merchant function, an affiliate, or a non-
affiliate.
    Third, once the Transmission Provider and customer agree to a 
discounted transaction for transmission and/or ancillary services, the 
details immediately must be posted on the OASIS. This requirement is 
equally applicable regardless of whether the customer is the 
Transmission Provider's wholesale merchant function, an affiliate, or a 
non-affiliate.
    Rehearing Request. On rehearing, TAPS argues that the Commission's 
policy on transmission discounting should be modified to minimize the 
potential for self dealing and other abuses.20 Specifically, 
TAPS argues that the Commission's revised discounting policy in Order 
No. 888-A, by allowing delivery point-specific discounts, offers a 
means for transmission providing utilities to offer each other 
reciprocal discounts, while requiring transmission dependent utilities 
to pay full freight. TAPS argues that if a transmission provider offers 
a discount to itself or any other transmission user, the transmission 
provider should be required to offer the discount either on all 
unconstrained paths, or, at a minimum, to all delivery points in the 
same unconstrained portion of the transmission provider's transmission 
system and to other similarly situated customers. TAPS argues that 
there is no justification for a transmission provider to refuse to 
offer a discount to delivery points located along the same electrical 
path as the discounted transaction.21
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    \20\ TAPS Rehearing Request at pp. 5-6.
    \21\ TAPS Rehearing Request at p. 6.
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    Commission Conclusion. In Order No. 888-B, being issued 
concurrently with this order, the Commission has considered various 
requests for rehearing of the discounting policy announced in Order 
Nos. 888-A and 889-A. Among these requests for rehearing is that 
submitted by TAPS, wherein TAPS raises the same discounting issue as 
that raised in its request for rehearing of Order No. 889-
A.22/ As we are denying rehearing of this issue in Order No. 
888-B, for the reasons discussed therein, we similarly deny rehearing 
of this issue in this order.
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    \22\ TAPS Rehearing Request of Order No. 888-A at pp. 17-20.
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    As we explain in Order No. 888-B, the revised discounting policy 
announced in Order No. 888-A is the result of a careful balancing of 
incentives to operate the transmission grid efficiently while ensuring 
that the grid is not operated in an unduly discriminatory manner. After 
a review of the requests for rehearing, the Commission concludes, in 
Order No. 888-B, that it properly balanced these concerns in Order No. 
888-A. For this reason, the Commission denies the requests for 
rehearing of this issue in Order No. 888-B, and we do the same here.

D. Section 37.6--Information to be Posted on an Oasis

Deletion of Masking Provision
    In Order No. 889-A, the Commission deleted Sec. 37.6(e)(1)(iii) and 
revised Sec. 37.6(e)(3)(I) to remove provisions that directed 
Transmission Providers posting transmission service requests on the 
OASIS to honor requests from parties to transactions to mask their 
identities during the negotiating period and for 30 days from the date 
when the request for service was accepted, denied, or withdrawn. The 
Commission deleted the masking provision in response to certain 
arguments raised on rehearing of Order No. 889 and to implement the 
discounting policy announced in Order No. 888-A.
    Rehearing Request. CCEM argues that the Commission erred by 
eliminating the customer identity/transaction masking 
provision.23 CCEM contends that this revision was not based 
on reasoned decision-making. CCEM argues that by revealing a 
transmission requester's identity, competitors--particularly public 
utilities with captive native loads--can learn commercially sensitive 
information that will allow them to misappropriate the service 
requester's marketing efforts and transactions. CCEM argues that this 
is a larger problem than it was previously because the Commission has 
now expanded the information to be posted on the status of requests for 
transmission and ancillary services to include information about: (1) 
points of delivery and receipt; (2) length and type of service; and (3) 
identification of ancillary service transactions associated with a 
transmission service transaction.
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    \23\ CCEM Rehearing Request at pp. 2-5.
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    CCEM also argues that eliminating the 30-day masking provision 
allows the Standards of Conduct to be undercut by allowing wholesale 
merchant employees to obtain market information in a manner giving them 
an advantage over unaffiliated marketers. CCEM does not agree that 
masking inhibits market participants from making informed choices and 
notes that all relevant information except a requester's identity 
already would be available. CCEM argues that a requester's identity is 
neither critical nor important to a competitor pursuing ``its own 
interests''.
    Commission Conclusion. We find CCEM's arguments unpersuasive. While

[[Page 64720]]

CCEM makes much of the so-called ``uneven playing field'' that it 
allegedly will endure without the masking provision, we find this 
concern to be unfounded. The Order No. 889 version of 
Secs. 37.6(e)(1)(iii) and 37.6(e)(3)(I) treated all market participants 
making a request for transmission service (or whose transactions were 
curtailed or interrupted) equally, by allowing parties to such 
transactions to mask their identities for thirty days, upon request. 
The current (Order No. 889-A) version treats all market participants 
making a request for transmission service (or whose transactions are 
curtailed or interrupted) equally, by requiring the identity of parties 
to such transactions to be posted. Although the Commission has revised 
its policy on masking, all market participants making a request for 
transmission service, whether affiliated or non-affiliated with the 
Transmission Provider are treated equally in both instances. Thus, 
under the revised rule, the playing field is just as level as before.
    Moreover, we are not persuaded that eliminating the masking 
provision will have the dire anticompetitive consequences that CCEM 
predicts. To the contrary, we continue to believe that fuller 
disclosure of customer and transaction information is necessary to 
implement the discounting provisions added by Order Nos. 888-A and 889-
A and to ensure that customers (actual or potential) are able to detect 
any affiliate abuse or undue discrimination.
    If actual experience proves different, CCEM or other interested 
persons may bring these facts to our attention and we will consider 
taking appropriate remedial action.

V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (RFA) 24 requires any 
proposed or final rule issued by the Commission to contain a 
description and analysis of the impact that the proposed or final rule 
would have on small entities or to contain a certification that the 
rule, if promulgated, will not have a significant economic impact on a 
substantial number of small entities. Order No. 889 contained a 
certification under section 605(b) of the RFA that the OASIS Final Rule 
would not impose a significant economic impact on a substantial number 
of small entities within the meaning of the RFA.25
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    \24\ 5 U.S.C. 601-612.
    \25\ See Order No. 889, FERC Stats. & Regs. at 31,628.
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    Given that Order No. 889-A made only minor revisions to Order No. 
889, none of which was substantive, that this order makes no revisions 
to Order No. 889-A, and that we are granting waivers from the 
requirements of the OASIS Final Rule to small entities where 
appropriate, we reaffirm our earlier certification in Order Nos. 889 
and 889-A that the requirements in 18 CFR Part 37, to establish and 
participate in an OASIS and to comply with the Standards of Conduct, 
will not have a significant economic impact on a substantial number of 
small entities and that no regulatory flexibility analysis is required 
pursuant to section 603 of the RFA.

VI. Environmental Statement

    As explained in Order Nos. 888-A and 889-A, Order Nos. 888 and 889 
were the joint subjects of the Final Environmental Impact Statement 
issued in the Open Access NOPR proceeding in Docket Nos. RM95-8-000 and 
RM94-7-001 on April 12, 1996. Given that this order makes no revisions 
to Order No. 889-A, no separate environmental assessment or 
environmental impact statement has been prepared in this proceeding.

VII. Information Collection Statement

    As explained in Order Nos. 889-A, Order No. 889 contained an 
information collection statement for which the Commission obtained 
approval from the Office of Management and Budget (OMB).26 
Given that Order No. 889-A made only minor revisions to Order No. 889, 
none of which was substantive, and given that this order makes no 
revisions to Order No. 889-A, OMB approval for this order will not be 
necessary. However, the Commission will send a copy of this order to 
OMB, for informational purposes only.
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    \26\ OMB Control No. 1902-0173.
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    The information reporting requirements under this order are 
unchanged from those contained in Order No. 889-A. Interested persons 
may obtain information on the reporting requirements by contacting the 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 20426 [Attention Michael Miller, Information Services 
Division, (202) 208-1415], and the Office of Management and Budget 
[Attention: Desk Officer for the Federal Energy Regulatory Commission 
(202) 395-3087].

The Commission Orders

    As discussed in the body of this order, the requests for rehearing 
are hereby denied.

    By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 97-31856 Filed 12-8-97; 8:45 am]
BILLING CODE 6717-01-P