[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Proposed Rules]
[Pages 5206-5237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2388]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket No. RM95-9-003]


Open Access Same-Time Information System and Standards of Conduct

January 27, 1999.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (the Commission) 
proposes to adopt a set of uniform business practices implementing the 
Commission's policies on transmission service price negotiation and 
improving interactions between transmission providers and customers 
over OASIS nodes and proposes to revise 18 CFR 37.5 to require 
compliance with these practices. In addition, the Commission proposes a 
consistent naming convention for path names, proposes to replace the 
Data Dictionary Element ``ANC__SERVICE__TYPE'' in the OASIS Standards 
and Communication Protocols Document (Version 1.3) with the term 
``AS__TYPE,'' and proposes to clarify the terms ``DISPLACED,'' 
``SUPERSEDED,'' and ``REFUSED'' in Sec. 4.2.10.2 of that same document 
and in the Data Dictionary Element.

DATES: Written comments (an original and 14 paper copies) must be 
received by April 5, 1999. In addition, the Commission encourages the 
filing of a copy of the comments on computer diskette or by E-Mail by 
the same date.

ADDRESSES: Office of the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:

Marvin Rosenberg (Technical Information), Office of Economic Policy, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 20426, (202) 208-1283.
Paul Robb (Technical Information), Office of Electric Power Regulation, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 20426, (202) 219-2702.
Gary D. Cohen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, D.C. 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

[[Page 5207]]

inspect or copy the contents of this document during normal business 
hours in the Public Reference Room at 888 First Street, N.E., Room 2A, 
Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS) provides access to 
the texts of formal documents issued by the Commission. CIPS can be 
accessed via Internet through FERC's Home Page (http://www.ferc.fed.us) 
using the CIPS Link or the Energy Information Online icon. The full 
text of this document will be available on CIPS in ASCII and 
WordPerfect 6.1 format. CIPS is also available through the Commission's 
electronic bulletin board service at no charge to the user and 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. User assistance is available at 202-208-2474 
or by E-mail to [email protected].
    This document is also available through the Commission's Records 
and Information Management System (RIMS), an electronic storage and 
retrieval system of documents submitted to and issued by the Commission 
after November 16, 1981. Documents from November 1995 to the present 
can be viewed and printed. RIMS is available in the Public Reference 
Room or remotely via Internet through FERC's Home Page using the RIMS 
link or the Energy Information Online icon. User assistance is 
available at 202-208-2222, or by E-mail to [email protected].
    Finally, the complete text on diskette in WordPerfect format may be 
purchased from the Commission's copy contractor, RVJ International, 
Inc. RVJ International, Inc. is located in the Public Reference Room at 
888 First Street, N.E., Washington, D.C. 20426.

Table of Contents

I. Introduction
II. Public Reporting Burden
III. Discussion
    A. Overview
    B. Background
    C. Composition of CPWG Membership
    D. Business Practices for OASIS Phase IA Transactions
    1. Recommended Voluntary Guides and Recommended Mandatory 
Standards
    2. Need for Standard Terminology (Section 2A of the June 19 
Report)
    3. Attribute Values Defining the Period of Service (Section 2B 
of the June 19 Report)
    4. Attribute Values Defining Service Class and Type (Section 2C 
of the June 19 Report)
    5. Curtailment Priorities (Section 2D of the June 19 Report)
    6. Other Service Attribute Values (Section 2E of the June 19 
Report)
    7. Scheduling Period (Section 2F of the June 19 Report)
    8. Maintenance of Industry Home Page (Section 3A of the June 19 
Report)
    9. Identification of Parties (Section 3A of the June 19 Report)
    10. Registering Non-Standard Service Attributes (Section 3B of 
the June 19 Report)
    11. Registering Points of Receipt and Delivery (Section 3C of 
the June 19 Report)
    12. On-line Price Negotiation in Short-term Markets (Section 4A 
of the June 19 Report)
    13. Diagram Depicting the Negotiation Process (Section 4B of the 
June 19 Report)
    14. Negotiations Without Competing Bids (Section 4C of July 19 
Report)
    15. Negotiations with Competing Bids for Constrained Resources 
(When Customer Has Not Yet Confirmed a Provider's Acceptance) 
(Section 4D of June 19 Report)
    16. Transmission Provider Requirements (Section 5B of June 19 
Report)
    17. Transmission Customer Requirements (Section 5C of June 19 
Report)
    E. Recommended Revisions to Pro Forma Tariff (Appendix A of the 
June 19 Report)
    1. Section 14.2--Reservation Priority
    2. Section 14.7--Curtailment or Interruption of Service
    3. Section 17.5--Response to a Completed Application
    F. September 15th Filing of Standards for Naming Transmission 
Paths
IV. Regulatory Flexibility Act
V. Environmental Statement
VI. Information Collection Statement
VII. Public Comment Procedure

Attachment A--``Business Practices for Open Access Same-Time 
Information System (OASIS) Phase IA Transactions''
Attachment B--quotes sections 13.2, 14.2, 14.7, and 17.5 of the pro 
forma tariff.
Attachment C--quotes section 4.2.10.2 of the S&CP Document.

I. Introduction

    In this notice of proposed rulemaking (NOPR), the Federal Energy 
Regulatory Commission (Commission) proposes a set of uniform business 
practices implementing the Commission's policies on transmission 
service price negotiation and improving interactions between 
transmission providers and customers over Open Access Same-Time 
Information System (OASIS) nodes and proposes to revise 18 CFR 37.5 to 
require compliance with these practices. In addition, we propose a 
consistent naming convention for path names, propose to replace the 
Data Dictionary Element ``ANC__SERVICE__TYPE'' in the OASIS Standards 
and Communication Protocols Document, Version 1.3 (S&CP Document) with 
the term ``AS__TYPE,'' and propose to clarify the terms ``DISPLACED,'' 
``SUPERSEDED,'' and ``REFUSED'' in the Data Dictionary Element and in 
section 4.2.10.2 of the S&CP Document.\1\
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    \1\ See attached ``Business Practice Standards and Guides for 
OASIS Transactions'' (BPS&G). We expect that, with assistance from 
the industry, we will make improvements in these business practices 
over time, in the same way that we have made changes to the S&CP 
Document since its original issuance in 1995.
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II. Public Reporting Burden

    The proposed rule would require a transmission provider to comply 
with a set of uniform business practices to implement the Commission's 
policies on transmission service price negotiation and improve 
interactions between transmission providers and customers over OASIS 
nodes. The proposed business practices are divided between mandatory 
standards and voluntary best practice guides. Under this proposal, the 
best practice guides would not be mandatory; but a transmission 
provider electing to follow them would be bound to follow them on a 
consistent non-discriminatory basis. By necessity, a transmission 
provider already follows business practices in the operation of its 
OASIS node. The NOPR merely proposes to make these practices more 
uniform across the industry.
    On December 1, 1998, the Commission issued a proposed information 
collection and request for comments in Docket No. IC99-717-000 that 
covered all information collected under the requirements of FERC-717 
``Open Access Same-Time Information System and Standards of Conduct'' 
(OMB No. 1902-0173) over the next three years, including the 
implementation of OASIS Phase IA and any information collected under 
this NOPR.\2\ The burden estimate submitted on December 1, 1998 for all 
OASIS requirements was as follows: ``Burden Statement: Public reporting 
burden for this collection is estimated as:
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    \2\ See note 11, infra, where we elaborate on matters covered by 
OASIS Phase IA.

[[Page 5208]]



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    Number of          Number of       Average burden     Total  annual
   respondents       responses per        hours per       burden hours
  annually  (1)     respondent  (2)     response  (3)      (1)x(2)x(3)
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140..............                1              1,418           198,520
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The estimated total cost to respondents is $21,157,500.'' \3\
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    \3\ The estimated total cost of $21,157,500 was computed as 
follows:
    The Commission has assumed that 4.5 personnel are necessary for 
staffing and using a total personnel cost of $109,889, the result is 
$494,501. To get the total cost, add annual ongoing costs of 
$110,000 plus staffing costs [$110,000 + $494,501] for a total of 
$604,501 divided by 4 = $151,125). The estimated total cost of the 
OASIS requirement is 140 respondents  x $151,125 or $21,157,500.
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    We are not preparing a separate estimate covering this NOPR only, 
because we find that the NOPR would not significantly alter the 
estimate contained in the December 1, 1998 notice. The December 1, 1998 
burden estimate gave the Commission's estimate of OASIS-related 
information requirements over the next three years, and this estimate 
contemplated the Commission's issuance of uniform business practices 
during this time frame. In any event, if a separate estimate were 
prepared, it would not be substantial, because the proposal in this 
NOPR, if promulgated, would not create any direct information 
collection requirements and because transmission providers already will 
need to have business practices in place to conduct OASIS transactions 
under the Phase IA S&CP Document that becomes effective on March 1, 
1999. By announcing this proposal before March 1, 1999, the burden of 
making changes from already established business practices will be 
minimized.
    The following collection of information contained in this NOPR has 
been submitted to the Office of Management and Budget (OMB) for review 
under Section 3507(d) of the Paperwork Reduction Act of 1995, 44 U.S.C. 
3507(d). For copies of the OMB submission, contact Michael Miller at 
202-208-1415.

Internal Review

    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 
proposed by this NOPR 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.4
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    \4\ See 44 U.S.C. Sec. 3506(c).
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III. Discussion

A. Overview

    In this NOPR, we propose a set of uniform business practices, set 
out in the attached BPS&G document, for use by transmission providers 
in conjunction with OASIS transactions. Moreover, to ensure compliance, 
we are proposing a revision to 18 CFR 37.5(b) proposing that 
responsible parties must comply with the requirements set out in the 
BPS&G document. In main part, the uniform business practices we propose 
are those recommended by an industry group in two recent filings. 
However, as discussed below, we have made certain revisions to those 
recommendations, to reflect Commission policy, add clarity, and address 
initial comments received from interested persons.5 In 
addition, the Commission proposes a consistent naming convention for 
path names, proposes to replace the Data Dictionary Element 
``ANC__SERVICE__TYPE'' in the S&CP Document with the term ``AS__TYPE,'' 
and proposes to clarify the terms ``DISPLACED,'' ``SUPERSEDED,'' and 
``REFUSED'' in the Data Dictionary Element and in section 4.2.10.2 of 
the S&CP Document.
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    \5\ Throughout this document we have shown additions and 
recommended revisions with italics and boldface and deletions and 
recommended deletions with [italics and brackets].
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B. Background

    The OASIS rulemaking process began with the Commission's issuance 
of a notice of technical conference and request for comments (RIN 
Notice) 6 in conjunction with the Commission's previously 
proposed Open Access Rule.7 The RIN Notice announced that 
the Commission was considering establishing rules to effectuate the 
non-discrimination goals of the Open Access NOPR, through the creation 
of a real-time information network (RIN) or other options to ensure 
that potential and actual transmission service customers would receive 
adequate access to pertinent information.
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    \6\ Real-Time Information Networks, Notice of Technical 
Conference and Request for Comments, FERC Stats. & Regs. para.35,026 
(1995).
    \7\ Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Notice of Proposed Rulemaking and Supplemental Notice of Proposed 
Rulemaking, FERC Stats. & Regs. para.32,514 (1995).
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    The Commission's staff held a technical conference on RINs (RINs 
Technical Conference) in Washington, D.C. on July 27 and 28, 1995.
    During the discussion at the RINs Technical Conference, a consensus 
developed that two industry working groups should be formed, one 
dealing with ``what'' information should be posted on a RIN and the 
other dealing with ``how'' to design a RIN to communicate this 
information to the industry and what, if any, national standards this 
would require.8 The ``what'' group would be facilitated by 
the North American Electric Reliability Council (NERC) and the ``how'' 
group would be facilitated by the Electric Power Research Institute 
(EPRI).
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    \8\ Real-Time Information Networks, Notice of Timetable and 
Opportunity for Participation in Industry Working Groups, FERC 
Stats. & Regs. para.35,029 (1995).
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    On October 16, 1995, both working groups submitted their reports to 
the Commission. The Commission used the two industry reports and 
associated comments as the starting point for a notice of proposed 
rulemaking (RIN NOPR).9 Under the RIN NOPR, each public 
utility that owned and/or controlled facilities used for the 
transmission of electric energy in interstate commerce would be 
required to develop and/or participate in a RIN.
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    \9\ Id.
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    Subsequently, the Commission issued Order No. 889, a final rule 
establishing the OASIS requirements.10 This order required 
jurisdictional public utilities that own or control transmission 
systems (transmission providers) to set up an OASIS. It also 
established standards of conduct designed to ensure that a public 
utility's employees (or any of its affiliates' employees) engaged in 
transmission system operations function independently of the public 
utility's employees (or of any of its affiliates' employees) who are 
engaged in wholesale merchant functions. Finally, the order issued a 
set of communication standards and protocols to ensure that

[[Page 5209]]

the OASIS system presents information in a consistent and uniform 
manner.
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    \10\ Open Access Same-Time Information System and Standards of 
Conduct, Order No. 889, FERC Stats. & Regs. para. 31,035 (1996).
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    The rules established in Order No. 889 were for a basic (Phase I) 
OASIS. The Order also contemplated that an enhanced (Phase II) OASIS 
would be established in the future. The current Phase IA rules improve 
the operations of the basic Phase I OASIS prior to the development of 
the enhanced OASIS Phase II system.11
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    \11\ OASIS ``Phase IA'' is a label devised by the industry to 
refer to revisions to the OASIS Phase I requirements that the 
Commission asked industry to devise to implement the Commission's 
findings in the OASIS Final Rule requiring the on-line negotiation 
of discounts. See Open Access Same-Time Information System and 
Standards of Conduct, 83 FERC para. 61,360 at 62,452 (1998) (June 18 
Order).
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    In Order No. 889-A, the Commission addressed the requests for 
rehearing of Order No. 889 and requested that the industry prepare a 
report on Phase II issues.12 In response to this request, on 
November 3, 1997, the Commercial Practices Working Group (CPWG), 
together with the How Group (jointly ``CPWG/How Group''), submitted a 
document entitled ``Industry Report to the Federal Energy Regulatory 
Commission on the Future of OASIS'' (November 1997 Report). The 
November 1997 Report stated:
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    \12\ Open Access Same-Time Information System and Standards of 
Conduct, Order No. 889-A, FERC Stats. & Regs. para. 31,049 at 
30,549, n.8 (1997), order on reh'g, Order No. 889-B, 81 FERC para. 
61,253 (1997).

[t]here are inconsistencies in business practices across the nodes. 
In fact, OASIS serves to underscore the differences in practices as 
customers try to access information and reserve transmission in a 
familiar way, but find procedures vary from provider to provider. 
Some of the variations . . . include packaging of ancillary 
services, application of discounts, use of ``sliding windows'' of 
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transmission service, and customer confirmation time limits.

    The November 1997 Report contained an action plan that included a 
commitment to file a report with the Commission proposing draft 
guidelines to clarify OASIS Phase IA business practices. Consistent 
with this commitment, on June 19, 1998, CPWG/How Group tendered for 
filing a report entitled ``Industry Report to the Federal Energy 
Regulatory Commission on OASIS Phase IA Business Practices'' (June 19 
Report). CPWG/How Group state that the recommendations in the June 19 
Report are based on a consensus among participants from various 
industry segments with diverse interests and viewpoints who chose to 
participate in the CPWG/How Group process. The June 19 Report offers 
for Commission adoption a set of business practice standards and 
guidelines.
    The June 19 Report states that the recommended business practice 
standards and guides are intended to enable the Commission to implement 
its policy directives related to on-line price negotiation and to 
improve the commercial operation of OASIS. It also is stated that the 
recommended standards and guides are intended to support FERC 
regulations, the pro forma tariff, and the S&CP Document. Finally, the 
June 19 Report maintains that, in a few instances, revisions to the pro 
forma tariff are required to support the recommended business practices 
and offers recommended tariff changes consistent with the recommended 
business practices for Commission review and approval.
    The June 19 Report describes how many OASIS-related business 
practice implementation details were left for transmission providers to 
determine for themselves, based on their interpretations of Order Nos. 
888 and 889, the S&CP Document, and individual tariffs. The June 19 
Report contends that this flexibility has resulted in significant 
variation among business practices across OASIS nodes that influence 
the development of markets.
    CPWG/How Group argue that the recommended ``Phase IA Business 
Practice Standards and Guides'' (Business Practices) in the June 19 
Report provide an important step toward achieving greater consistency 
in the implementation of the Commission's open access policy and OASIS. 
CPWG/How Group request that the Commission adopt the recommended 
Business Practices to support the implementation of Phase IA OASIS. 
CPWG/How Group maintain that the recommended Business Practices are 
consistent with existing FERC regulations, the pro forma tariff, and 
the Phase IA S&CP Document, except where specific tariff revisions are 
requested.
    On July 6, 1998, the Commission issued a notice of the filing of 
the June 19 Report that invited interested persons to comment on the 
CPWG/How Group recommendations on or before July 31, 1998.13 
Timely comments were filed by Electric Clearinghouse, Inc. (ECI), 
Cinergy Services, Inc. (Cinergy), and Enron Power Marketing Inc. 
(EPMI).
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    \13\ 63 FR 38641 (1998).
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    On August 11, 1998, CPWG/How Group filed a letter with the 
Commission requesting implementation of the recommended Business 
Practices on March 1, 1999.
    On September 15, 1998, CPWG/How Group filed a letter with the 
Commission recommending standards for transmission path naming and 
requesting Commission approval coincident with the start of OASIS Phase 
IA (to begin on March 1, 1999). On October 14, 1998, the Commission 
issued a notice of the filing of the proposed standards for 
transmission path naming that invited comments by interested persons on 
or before October 28, 1998.14 Timely comments were filed by 
American Public Power Association (APPA).
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    \14\ 63 FR 56022 (1998).
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C. Composition of CPWG Membership

    In previous orders,15 we have noted that the Commission 
would heed recommendations from industry working groups only to the 
extent that the views of those groups reflected an open process with 
input from diverse industry segments.
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    \15\ See, e.g., RIN NOPR, FERC Stats. & Regs. para. 32,516 at 
33,173-74; Order No. 889, FERC Stats. & Regs. para. 31,035 at 
31,589, n.13; Order No. 889-A, FERC Stats. & Regs. para. 31,049 at 
30,549, n.7.
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Comments

    ECI argues that even though the CPWG has made valuable 
contributions, that group is not a forum ``with balanced industry 
segment representation.'' 16 ECI disagrees with the 
statement in the June 19 Report that the CPWG ``is an independent forum 
with balanced industry segment representation.'' 17 In ECI's 
experience, the composition of the CPWG is unbalanced and is heavily 
dominated by transmission providers. ECI argues that the unbalanced 
composition of CPWG membership has resulted in the group functioning 
more effectively as a barometer for, and not as the definitive 
statement of, electric power industry views. ECI also argues that 
claims of CPWG consensus should be viewed with skepticism and that the 
heavy representation of public utility organizations (estimated by ECI 
as 68 of 78 representatives) in the process encourages resolution of 
problems through a least common denominator approach. Thus, ECI argues 
that recommendations from the CPWG do not deserve the Commission's 
unqualified deference.
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    \16\ ECI Comments at 5-7.
    \17\ June 19 Report at 2.
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Discussion
    We agree with ECI that unqualified deference should not be given to 
the recommendations of any industry group whose decisions are not made 
in an open inclusive process with balanced

[[Page 5210]]

representation reflecting a broad consensus of views from all industry 
segments. Moreover, rather than giving ``unqualified deference'' to 
recommendations from the CPWG, we here are issuing a NOPR that invites 
comment from any interested person before taking any further action on 
this matter. Further, we recently have been informed that the CPWG has 
been reconstituted and its functions taken over by a replacement 
industry group, the Interim Market Interface Committee (IMIC), 
sponsored by NERC.18
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    \18\ Minutes of September 22-23, 1998 CPWG Meeting, p.2.
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    If, in the future, IMIC (or any other industry group) would like 
the Commission to consider its recommendations to reflect the views of 
the entire industry, then it is incumbent on it to demonstrate to the 
Commission that: (1) its membership is drawn from all industry segments 
in an open inclusive process; (2) it makes its decisions in a manner 
that gives fair voice to participants with diverse viewpoints from all 
industry segments; and (3) its activities are conducted in an open 
inclusive manner.

D. Business Practices for OASIS Phase IA Transactions

1. Recommended Voluntary Guides and Recommended Mandatory Standards
    The June 19 Report distinguishes between recommended OASIS business 
practice ``standards'' and best practices ``guides.'' The June 19 
Report states that while the ``standards'' are offered to the 
Commission for adoption as mandatory requirements, the ``guides'' are 
recommended as voluntary best practices. The CPWG/How Group advances 
several reasons why some practices have been offered as guides instead 
of as standards. First, they argue there may be majority support for 
the practice, but not an overwhelming consensus. Second, they argue 
reasonable alternatives may exist. Third, they argue customers and 
providers need time to adapt computer systems and processes. Fourth, 
they argue adoption of a practice as a standard may conflict with 
existing tariffs and require tariff changes prior to adoption as a 
standard. Fifth, they argue the practice may be a suggested, but not 
required, action. CPWG/How Group stated that it plans to file 
additional recommendations for standards and guides over time and, as 
appropriate, request that existing guides be upgraded to mandatory 
standards.
Comments
    ECI argues that ``voluntary best practices'' must be enforceable 
standards.19 Otherwise, ECI argues, these ``voluntary best 
practices'' will foster the problem that CPWG identified in its 
November 1997 report to the Commission.
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    \19\ ECI Comments at 7.

There are inconsistencies in business practices across the nodes. In 
fact, OASIS serves to underscore the differences in practices as 
customers try to access information and reserve transmission in a 
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familiar way, but find procedures vary from provider to provider.

ECI argues that the recommendation of ``voluntary best practices'' 
defeats the chief objective of the June 19 Report--to impose a uniform 
and consistent set of business practices across the board in the 
electric power industry.20
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    \20\ Id.
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    Moreover, as discussed below, both EPMI and Cinergy argue that 
specific recommended guides (recommended Guides 4.2 and 4.3--cited by 
EPMI, and recommended Guide 4.1--cited by Cinergy) should be adopted as 
mandatory standards for all transmission providers and not merely as 
discretionary ``best practice'' guides.
Discussion
    Notwithstanding concerns about the fairness and representativeness 
of CPWG's decision making process, the distinction between mandatory 
standards and voluntary guides helped the participants in its process 
reach agreement on the issues. Similarly, we propose to maintain the 
same distinction between standards and guides in this NOPR, although 
(as discussed further below) we invite comment on this issue.
    However, we agree with Cinergy that uniform and consistent business 
practices across the board in the electric power industry are a desired 
result, and that consistency can best be achieved through mandatory 
standards rather than suggested guidelines.
    Accordingly, although this NOPR proposes to follow the June 19 
Report's general recommendation--that we distinguish between mandatory 
standards and voluntary ``best practice'' guides--we invite commenters 
to this NOPR to address whether particular proposals should be adopted 
as standards or guidelines and whether the commenter recommends the 
adoption of any additional standards or guides not contained in the 
June 19 Report. Specifically, we invite those who agree with the 
tentative classification of guideline vs. standard, as proposed in this 
NOPR, to present their arguments as to why those classifications should 
be retained (in the final rule) and invite those that disagree with the 
current classifications to present their arguments as to why those 
classifications should be changed (in the final rule). Commenters 
should be aware that we are considering making all of the 
recommendations mandatory standards, including those now proposed as 
guidelines in this NOPR.
    As written, the proposed guidelines would only apply to 
transmission providers that choose to follow them, even where words 
such as ``must'' or ``shall'' are used. However, a transmission 
provider choosing to follow the guidelines is bound to apply them on a 
uniform non-discriminatory basis.
2. Need for Standard Terminology (Section 2A of the June 19 Report)
    In the November 1997 Report, CPWG/How Group identified inconsistent 
use of terminology as an area for improvement in OASIS. In the June 19 
Report, CPWG/How Group recommend that we establish a standard set of 
attribute values to provide clarity and consistency in the labeling of 
transmission services.
Comments
    Comments were received from ECI, Cinergy, and EPMI in support of 
standard attributes. However, as discussed in detail below, ECI finds 
fault with several of the specific proposals put forth in the June 19 
Report. Cinergy supports the needs of the marketplace to give 
flexibility for individual transmission providers to use non-standard 
attributes if they are clearly defined by the provider on the OASIS. 
EPMI generally supports standardization and formulation of practices 
that improve consistency of customer-provider interactions across OASIS 
nodes, but suggests revisions to particular provisions.\21\
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    \21\ EPMI Comments at 3.
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Discussion
    Section 2.A of the June 19 Report does not recommend any specific 
guides or standards. It argues, however, that standard attribute values 
should be used in OASIS transactions to the greatest extent possible. 
All of the comments addressing this issue support this approach and we 
agree. ECI and EPMI oppose the authorization of non-standard 
attributes, because they fear that they will be compelled to purchase 
services they do not want.\22\ However,

[[Page 5211]]

there is an important distinction that must be drawn between allowing a 
service to be offered and compelling a customer to purchase that 
service. Providers are encouraged to offer new products within the 
marketplace that are permitted within approved tariffs (i.e., services 
that are consistent with or superior to the pro forma tariff services). 
However, this does not mean that customers are required to purchase 
these products. The non-standard attributes only describe the products 
so that OASIS users will be better informed of available services. 
Allowing the use of non-standard attributes would not by itself 
constitute approval for a transmission provider offering a particular 
services to its customers or compel its purchase.
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    \22\ Id. and ECI Comments at 9.
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3. Attribute Values Defining the Period of Service (Section 2B of the 
June 19 Report)
    On September 29, 1998, the Commission issued a revised OASIS S&CP 
Document for Phase IA implementation.\23\ The Phase IA S&CP Document 
developed data templates, but did not provide a definition for each 
attribute value. CPWG/How Group recommend standards and guides for 
service attribute value definitions to be implemented with Phase IA.
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    \23\ Open Access Same-Time Information System and Standards of 
Conduct, 84 FERC para. 61,329 (1998) (September 29 Order). Version 
1.3 of the S&CP Document is posted on the Commission Issuance 
Posting System (accessed through the Commission's Internet Home Page 
at http://ferc.fed.us) or may be inspected in the Commission's 
Public Reference Room.
---------------------------------------------------------------------------

    In the June 19 Report, CPWG/How Group recommended that the 
Commission establish a standard set of attribute values (i.e., service 
characteristics) to provide clarity and consistency in the labeling of 
transmission services. Table 1-1 of the June 19 Report identifies the 
definitions that are recommended as standard terminology in Phase IA 
for the attributes SERVICE__INCREMENT (Hourly, Daily, Weekly, Monthly, 
and Yearly) and WINDOW (Fixed, Sliding, and Extended).\24\ Recommended 
Table 1-1 provides as follows:
---------------------------------------------------------------------------

    \24\ What is referred to here as ``WINDOW'' is referred to as 
``TS__WINDOW'' in the S&CP Data Dictionary.

 Table 1-1--Standard Service Attribute Definitions Required in Phase IA
------------------------------------------------------------------------
                                    Fixed        Sliding      Extended
------------------------------------------------------------------------
Hourly........................            X           N/A           N/A
Daily.........................            X             X             X
Weekly........................            X             X             X
Monthly.......................            X             X             X
Yearly........................            X             X             X
------------------------------------------------------------------------
[footnote omitted, see note 21, infra].

    CPWG/How Group argue that a definition is required for each 
combination of SERVICE__INCREMENT and WINDOW, except ``Hourly Sliding'' 
and ``Hourly Extended,'' which are not considered by the CPWG to be 
sufficiently common in the market to require standard definitions. 
CPWG/How Group advocate that the Commission add the characteristic 
``Extended'' as a permissible value for WINDOW, which at the time the 
report was submitted, would have required a modification to the S&CP 
Document.\25\
---------------------------------------------------------------------------

    \25\ Subsequent to the submittal of the June 19 Report, the 
Commission incorporated a value for ``EXTENDED'' under the 
definition of TS__WINDOW in Version 1.3 of the S&CP Document. See 
S&CP Document, Version 1.3, Data Element Dictionary at A-18. For 
this reason, we have omitted a footnote from the recommended Table 
1-1 suggesting that this change is needed.
---------------------------------------------------------------------------

    The June 19 Report provides that the existence of a definition in 
this table does not imply the services must be offered by a 
transmission provider. It further provides that requirements as to 
which services must be offered are defined by regulation and tariffs 
and are not addressed by this report. Nor does the report imply that 
there is an implication as to the curtailment priority or price caps 
for these services. CPWG/How Group also suggest that transmission 
providers offer new products that meet the needs of transmission 
customers, when an appropriate standard attribute is not available.
    CPWG/How Group recommend the terms ``fixed,'' ``sliding,'' and 
``extended'' to describe periods of service. ``Fixed'' defines service 
periods that align with calendar periods such as a day, week, or month. 
``Sliding'' defines service periods that are fixed in duration, such as 
a week or month, but the start and stop time may slide. For example, a 
``sliding'' week could start on a Tuesday and end on the following 
Monday. ``Extended'' defines service periods for which the start time 
may ``slide'' and with a longer than standard duration. For example, an 
``extended'' week of service could be nine consecutive days. These 
definitions are contained in recommended Standards 2.1-2.1.13, which 
provide as follows:

    Standard 2.1: A Transmission Provider shall use the values and 
definitions below for the attributes Service__Increment and Window 
for all transmission services offered on OASIS, or shall post 
alternative attribute values and associated definitions on the OASIS 
Home Page at www.tsin.com, or shall use existing attribute values 
and definitions posted by other Transmission Providers. (See Section 
3 of this report for registration requirements.)
    2.1.1: Fixed Hourly--The service starts at the beginning of a 
clock hour and stops at the end of a clock hour.
    2.1.2: Fixed Daily--The service starts at 00:00 and stops at 
24:00 of the same calendar date (same as 00:00 of the next 
consecutive calendar date).
    2.1.3: Fixed Weekly--The service starts at 00:00 on Monday and 
stops at 24:00 of the following Sunday (same as 00:00 of the 
following Monday).
    2.1.4: Fixed Monthly--The service starts at 00:00 on the first 
date of a calendar month and stops at 24:00 on the last date of the 
same calendar month (same as 00:00 of the first date of the next 
consecutive month).
    2.1.5: Fixed Yearly--The service starts at 00:00 on the first 
date of a calendar year and ends at 24:00 on the last date of the 
same calendar year (same as 00:00 of the first date of the next 
consecutive year).
    2.1.6: Sliding Daily--The service starts at the beginning of any 
hour of the day and stops exactly 24 hours later at the same time on 
the next day.
    2.1.7: Sliding Weekly--The service starts at 00:00 of any date 
and stops exactly 168 hours later at 00:00 on the same day of the 
next week.
    2.1.8: Sliding Monthly--The service starts at 00:00 of any date 
and stops at 00:00 on the same date of the next month (28-31 days 
later). If there is no corresponding date in the following month, 
the service stops at 24:00 on the last day of the next month.
    For example: Sliding Monthly starting at 00:00 on January 30 
would stop at 24:00 on February 28 (same as 00:00 March 1).

[[Page 5212]]

    2.1.9: Sliding Yearly--The service starts at 00:00 of any date 
and stops at 00:00 on the same date of the following year. If there 
is no corresponding date in the following year, the service stops at 
24:00 on the last day of the same month in the following year.
    For example Sliding Yearly service starting on February 29 would 
stop on February 28 of the following year.
    2.1.10: Extended Daily--The service starts at any hour of a day 
and stops more than 24 hours later and less than 48 hours later.
    2.1.11: Extended Weekly--The service starts at 00:00 of any date 
and stops at 00:00 more than one week later, but less than two weeks 
later.
    2.1.12: Extended Monthly--The service starts at 00:00 of any 
date and stops at 00:00 more than one month later but less than two 
months later.
    2.1.13: Extended Yearly--The service starts at 00:00 of any date 
and stops at 00:00 more than one year calendar year later but less 
than two calendar years later.

    Definitions are recommended as standard terminology in Phase IA for 
the attributes SERVICE__INCREMENT (Hourly, Daily, Weekly, Monthly, and 
Yearly) and WINDOW (Fixed, Sliding, and Extended). A definition is 
recommended for each combination of SERVICE__INCREMENT and WINDOW. The 
September 29 Order includes ``EXTENDED'' as a permissible value of the 
data element ``TS__WINDOW.'' 26
---------------------------------------------------------------------------

    \26\ As noted above, supra note 25, the Commission incorporated 
a value for ``EXTENDED'' under the definition of TS__WINDOW in 
Version 1.3 of the S&CP Document.
---------------------------------------------------------------------------

Comments
    ECI and Cinergy filed comments on this issue. ECI disagrees with 
the term ``extended'' and states that this term is not contained in the 
pro forma tariff. ECI also asserts that the term ``sliding'' is 
appropriate while the term ``fixed'' is unnecessary. Cinergy argues 
that non pro-forma rate designs approved by the Commission should have 
service attribute definitions defined for Table 1-1.27 For 
example, it argues the information provided in Table 1-1 should include 
service attribute definitions for locational marginal pricing and 
megawatt-mile pricing.28
---------------------------------------------------------------------------

    \27\ Cinergy Comments at 2.
    \28\ Id.
---------------------------------------------------------------------------

Discussion
    We propose that Standards 2.1 through 2.1.13, as shown in the 
attached BPS&G document, be adopted. While the term ``extended'' is not 
included in the pro forma tariff, the marketplace is evolving to the 
point where offerings of extended daily, extended weekly, and extended 
monthly services are products that can serve a useful market niche. 
While not covered by the pro forma tariff, there is no prohibition 
against these services being provided under transmission providers' 
individual open access tariffs. This being the case, it is appropriate 
that the standards proposed in this NOPR should provide such 
definitions. Furthermore, the terms ``sliding'' and ``fixed'' also help 
to improve communications in the contracting for transmission services. 
We note that the Phase IA S&CP Document, approved in the September 29 
Order, provided for the inclusion of ``fixed,'' ``sliding,'' and 
``extended'' transmission service period definitions.
    Cinergy has not persuaded us that the definitions of ``fixed,'' 
``sliding,'' and ``extended'' should be expanded to include service 
attribute definitions for locational marginal pricing and megawatt-mile 
pricing, since these attributes are intended to describe types of 
services, not prices or rate designs for services. However, we invite 
additional comment on this issue in the comments to this NOPR.
4. Attribute Values Defining Service Class and Type (Section 2C of the 
June 19 Report)
    The Phase IA S&CP Document issued in the September 29 Order 
included data templates that refer to service class and type, but do 
not define these attributes. CPWG/How Group recommend definitions for 
Service Class (recommended Standard 2.2) (i.e., Firm Transmission 
Service (recommended Standard 2.2.1) and Non-Firm Transmission Service 
(recommended Standard 2.2.2)) and for Service Type (recommended 
Standard 2.3) (i.e., Point-to-Point Transmission Service (recommended 
Standard 2.3.1) and Network Integration Transmission Service 
(recommended Standard 2.3.2)). These recommended definitions provide as 
follows:

    Standard 2.2: A Transmission Provider shall use the values and 
definitions below to describe the service CLASS for transmission 
services offered on OASIS, or shall post alternative attribute 
values and associated definitions on the OASIS Home Page at 
www.tsin.com, or shall use the attribute values and definitions 
posted by other Providers. (See Section 3 for registration 
requirements.)
    2.2.1: Firm--Transmission service that always has a priority 
over Non-Firm transmission service and has equal priority with 
Native Load Customers and Network Customers, in accordance with FERC 
regulations.
    2.2.2: Non-Firm--Transmission service that is reserved and/or 
scheduled on an as-available basis and is subject to curtailment or 
interruption at a lesser priority compared to Firm transmission 
service, Native Load Customers, and Network Customers.
    Standard 2.3: A Transmission Provider shall use the values and 
definitions below to describe the service TYPE for transmission 
services offered on OASIS, or shall post alternative attribute 
values and associated definitions on the OASIS Home Page at 
www.tsin.com, or shall use the attribute values and definitions 
posted by other Providers. (See Section 3 for registration 
requirements.)
    2.3.1: Point-to-point--Transmission service that is reserved 
and/or scheduled between specified Points of Receipt and Delivery 
pursuant to Part II of the FERC pro forma tariff.
    2.3.2: Network--Network Integration Transmission Service that is 
reserved and/or scheduled to serve a Network Customer load pursuant 
to Part III of the FERC pro forma Tariff.
Comments
    Comments were offered by ECI and EPMI. ECI comments that the 
recommended definitions are unnecessary because the terms are defined 
in the pro forma tariff. EPMI offers a revised definition to indicate 
that there should be no differing priorities within the firm classes of 
service.
Discussion
    In general, we believe that these recommended definitions (2.2.1, 
2.2.2, 2.3.1, and 2.3.2) should be included in the standards. However, 
to avoid any misunderstanding, we propose to add a disclaimer to each 
definition stating in each instance that the service is to be offered 
``in accordance with the definitions in the pro forma tariff.''
    We do not find ECI's argument, that the recommended definitions are 
unnecessary (because they are included in the pro forma tariff), to be 
persuasive. In instances where a term is defined in the pro forma 
tariff, we will incorporate--verbatim--the definition from the pro 
forma tariff--into the BPS&G document. In instances where the term is 
not defined in the pro forma tariff, we will use the recommended 
definitions, so long as we find them consistent with the definitions of 
related terms in the pro forma tariff.
    The standards proposed herein have been proposed to improve the 
communications in conducting business on the OASIS. Therefore, 
terminology used in communications over the OASIS should clearly be 
defined in the BPS&G document, so long as those definitions are 
consistent with those in the pro forma tariff. We propose to adopt the 
suggested revision offered by EPMI to recommended Standard 2.2.1 
because it clarifies the definition of Firm Transmission Service. As 
revised, Standard 2.2.1 will read as follows:

    Standard 2.2.1: FIRM--Transmission service that always has [a] 
priority over NON-

[[Page 5213]]

FIRM transmission service [and has equal priority with] and includes 
Native Load Customers, [and] Network Customers, and any transmission 
service not classified as non-firm in accordance with the 
definitions in the pro forma tariff [FERC regulations].

    Moreover, we find the definitions in sections 2.2-2.3.2, as 
revised, to be consistent with the pro forma tariff.
5. Curtailment Priorities (Section 2D of the June 19 Report)
    Included in the S&CP Document for Phase IA implementation is a data 
dictionary element entitled ``Curtailment Procedures.'' A business 
practice has not previously been defined for this data element. 
Recommended Standard 2.4 on curtailment policies provides as follows:

    Standard 2.4: A Transmission Provider shall use the curtailment 
priority definitions in NERC Policy 9 Security Coordinator 
Procedures for NERC CURTAILMENT PRIORITY (1-7) for all transmission 
services offered on OASIS, or shall post alternative attribute 
values and associated definitions on the OASIS Home Page at 
www.tsin.com, or shall use attribute values and definitions posted 
by another Provider. (See Section 3 for registration requirements.)
Comments
    ECI objects to the CPWG/How Group's proposal, on the basis that the 
Commission in its pro forma tariff has established the curtailment 
priorities for transmission service. ECI comments that the curtailment 
priorities under NERC procedures are unreasonable and anticompetitive. 
To the extent the Commission intends to address the merits of NERC's 
proposal here, ECI incorporates by reference its July 20, 1998 protest 
filed in Docket No. EL98-52-000.29
---------------------------------------------------------------------------

    \29\ ECI's protest argues, among other things, that: (1) NERC's 
Tagging requirements must be applied to all transactions; (2) NERC's 
proposed revisions to Policy 9 (on curtailment) are contrary to the 
pro forma tariff; and (3) NERC security coordinators must be subject 
to enforceable Standards of Conduct.
---------------------------------------------------------------------------

    EPMI offers revisions to the recommended standard to remove the 
option of posting alternative attribute values and definitions.
Discussion
    We have not been persuaded to propose the adoption of Standard 2.4 
as recommended in the June 19 Report in the NOPR. There is still 
considerable work to be accomplished in the area of developing 
procedures/definitions for establishing curtailment policy.
    The Commission recently ruled on a petition for declaratory order 
(Petition) filed by NERC regarding NERC's proposed Transmission Loading 
Relief (TLR) procedures.30 The Commission found that these 
procedures, which address multi-system transactions and unscheduled 
flows, are generally consistent with or superior to the pro forma 
tariff curtailment provisions, but that further efforts by NERC and 
industry participants are necessary. The Commission also found that the 
TLR procedures must be on file with the Commission, and adopted NERC's 
suggestion to establish an efficient mechanism for public utilities to 
incorporate the TLR procedures into their individual open access 
tariffs.31 As policies evolve, we can revisit the notion of 
adding a curtailment definition at a later date.
---------------------------------------------------------------------------

    \30\ North American Electric Reliability Council, 85 FERC para. 
61,353 (1998) (NERC Order).
    \31\ By contrast, in Mid-Continent Area Power Pool, 85 FERC 
para. 61,352 (1998), reh'g pending (MAPP Order), the Commission 
rejected line load relief procedures that were not consistent with 
or superior to the pro forma tariff. See Coalition Against Private 
Tariffs, 83 FERC para. 61,015 at 61,039, reh'g denied, 84 FERC para. 
61,050 at 61,235-36 (1998).
---------------------------------------------------------------------------

    To prevent confusion, this NOPR reserves section 2.4 for future use 
(in the numbering of sections in the attached BPS&G document) so that 
we do not have to renumber sections 2.5-2.5.9 and so that the section 
numbers in the NOPR will continue to match up with the section numbers 
used in the June 19 report.
6. Other Service Attribute Values (Section 2E of the June 19 Report)
    In Order No. 888, the Commission concluded that six ancillary 
services must be included in an open access tariff.32 Other 
services may be offered pursuant to filed tariffs, or as specified in a 
customer's service agreement with the transmission 
provider.33
---------------------------------------------------------------------------

    \32\ The six ancillary services defined in the pro forma tariff 
are: (1) Scheduling, System Control, and Dispatch Service; (2) 
Reactive Supply and Voltage Control from Generation Sources Service; 
(3) Regulation and Frequency Response Service; (4) Energy Imbalance 
Service; (5) Operating Reserve--Spinning Reserve Service; and (6) 
Operating Reserve--Supplemental Reserve Service. See Secs. 3.1-3.6 
of the pro forma tariff.
    \33\ FERC Stats. & Regs. para.31,036 at 31,705.
---------------------------------------------------------------------------

    The June 19 Report recommends the data element 
ANCILLARY__SERVICE__TYPE in the S&CP Document be changed to AS__TYPE. 
This name is less restrictive and may be used to denote ancillary or 
additional services that are not pro forma tariff ancillary services. 
This name is also comparable to the use for transmission service of TS, 
for example TS__TYPE. Consistent with this recommendation, the June 19 
Report recommends Standard 2.5, to describe the AS__TYPES offered on 
OASIS. Recommended Standard 2.5 provides as follows:

    Standard 2.5: A Transmission Provider shall use the definitions 
below to describe the AS__TYPES offered on OASIS, or shall post 
alternative attribute values and associated definitions on the OASIS 
Home Page at www.tsin.com, or shall use attribute values and 
definitions posted by another Provider. (See Section 3 for 
registration requirements.)

    In addition, the June 19 Report recommends FERC Ancillary Services 
Definitions for: Scheduling, System Control, and Dispatch Service; 
Reactive Supply and Voltage Control from Generation Sources Service; 
Regulation and Frequency Response Service; Energy Imbalance Service; 
Operating Reserve--Spinning Reserve Service; Operating Reserve--
Supplemental Reserve Service; and other services which may be offered 
to transmission customers such as Dynamic Transfer, Real Power 
Transmission Losses, and System Black Start Capability. Specifically, 
recommended sections 2.5.1-2.5.9 provide the following definitions:

Ancillary Services Definitions

    2.5.1: Scheduling, System Control and Dispatch Service (SC)--is 
the provision of (i) interchange schedule confirmation and 
implementation with other control areas, including intermediary 
control areas that are providing transmission service, and (ii) 
actions to ensure the operational security during interchange 
transaction.
    2.5.2: Reactive Supply and Voltage Control from Generation 
Sources Service (RV)--is the provision of reactive power and voltage 
control by generating facilities.
    2.5.3: Regulation and Frequency Response Service (RF)--is the 
provision of resources to follow a Transmission Customer's load 
changes and to supply power to meet any difference between a 
Customer's actual and scheduled generation.
    2.5.4: Energy Imbalance Service (EI)--supplies any hourly 
mismatch between a Transmission Customer's energy supply and the 
load being served in the control area. This service makes up for any 
net mismatch over an hour between the scheduled delivery of energy 
and the actual load that the energy serves in the control area.
    2.5.5: Operating Reserve--Spinning Reserve Service (SP)--is the 
provision of resources, which are on-line and loaded at less than 
maximum output, to serve load in case there is an unplanned event 
such as loss of generation.
    2.5.6: Operating Reserve--Supplemental Reserve Service (SU)--is 
the provision of resources that may not be available 
instantaneously, including generating units that are on-line, quick 
start units, and customer-interrupted load, to serve load in case 
there is an unplanned event such as loss of generation.
    2.5.7: Dynamic Transfer (DT)--is the provision of the real-time 
monitoring,

[[Page 5214]]

telemetering, computer software, hardware, communications, 
engineering, and administration required to electronically move all 
or a portion of the real energy services associated with a generator 
or load out of its Host Control Area into a different Electronic 
Control Area.
    2.5.8: Real Power Transmission Losses (TL)--is the provision of 
capacity and energy to replace energy losses associated with 
transmission service on the Transmission Provider's system.
    2.5.9: System Black Start Capability (BS)--is the provision of 
generating equipment that, following a system blackout, is able to 
start without an outside electrical supply. Furthermore, Black Start 
Capability is capable of being synchronized to the transmission 
system such that it can provide a startup supply source for other 
system capacity that can then be likewise synchronized to the 
transmission system to supply load as part of a process of re-
energizing the transmission system.
Comments
    ECI objects to the recommended change on the basis that ancillary 
services are defined in the pro forma tariff. Cinergy comments that, 
for clarity, the words ``according to FERC pro forma tariff'' or 
``pursuant to the transmission provider's open access transmission 
tariff'' should be included when addressing ancillary services. As an 
alternate approach, Cinergy suggests including a blanket introductory 
statement indicating that the ancillary services definitions refer to 
those services offered pursuant to the transmission provider's open 
access transmission tariff.
    EPMI comments that the Commission should not authorize unspecified 
``alternative attribute values,'' and that the Commission must approve 
ancillary services.34
---------------------------------------------------------------------------

    \34\ EPMI Comments at 3-4.
---------------------------------------------------------------------------

Discussion
    We agree with ECI that, in instances where terms are defined in the 
pro forma tariff, we should use that same definition for conducting 
OASIS-related business. Accordingly, we will revise the definitions in 
recommended sections 2.5.1-2.5.6 to match those in the pro forma 
tariff. We therefore propose as follows:

FERC Ancillary Services Definitions

    2.5.1: Scheduling, System Control and Dispatch Service (SC)--is 
necessary to the provision of basic transmission service within 
every control area. This service can be provided only by the 
operator of the control area in which the transmission facilities 
used are located. This is because the service is to schedule the 
movement of power through, out of, within, or into the control 
area.35 This service also includes the dispatch of 
generating resources to maintain generation/load balance and 
maintain security during the transaction and in accordance with 
section 3.1 (and Schedule 1) of the pro forma tariff.36 
[(i) interchange schedule confirmation and implementation with other 
control areas, including intermediary control areas that are 
providing transmission service, and (ii) actions to ensure the 
operational security during interchange transaction.]
---------------------------------------------------------------------------

    \35\ FERC Stats. & Regs., Regulations Preambles, January 1991-
June 1996 at 31,716.
    \36\ Order No. 888-A, FERC Stats. & Regs. para.31,048 at 30,227.
---------------------------------------------------------------------------

    2.5.2: Reactive Supply and Voltage Control from Generation 
Sources Service (RV)--is the provision of reactive power and voltage 
control by generating facilities under the control of the control 
area operator.37 This service is necessary to the 
provision of basic transmission service within every control area 
and in accordance with section 3.2 (and Schedule 2) of the pro forma 
tariff.38
---------------------------------------------------------------------------

    \37\ Id. at 30,228.
    \38\ FERC Stats. & Regs. para.31,036 at 31,716.
---------------------------------------------------------------------------

    2.5.3: Regulation and Frequency Response Service (RF)--is 
provided for transmission within or into the transmission provider's 
control area to serve load in the area. Customers may be able to 
satisfy the regulation service obligation by providing generation 
with automatic generation control capabilities to the control area 
in which the load resides and in accordance with section 3.3 (and 
Schedule 3) of the pro forma tariff.39 [the provision of 
resources to follow a Transmission Customer's load changes and to 
supply power to meet any difference between a Customer's actual and 
scheduled generation.]
---------------------------------------------------------------------------

    \39\ Id. at 31,717.
---------------------------------------------------------------------------

    2.5.4: Energy Imbalance Service (EI) [supplies any hourly 
mismatch between a Transmission Customer's energy supply and the 
load being served in the control area. This service makes up for any 
net mismatch over an hour between the scheduled delivery of energy 
and the actual load that the energy serves in the control area.] is 
the service for transmission within and into the transmission 
provider's control area to serve load in the area. Energy imbalance 
represents the deviation between the scheduled and actual delivery 
of energy to a load in the local control area over a single hour and 
in accordance with section 3.4 (and Schedule 4) of the pro forma 
tariff.40
---------------------------------------------------------------------------

    \40\ Id.
---------------------------------------------------------------------------

    2.5.5: Operating Reserve--Spinning Reserve Service (SP)--[is the 
provision of resources, which are on-line and loaded at less than 
maximum output, to serve load in case there is an unplanned event 
such as loss of generation.] is provided by generating units that 
are on-line and loaded at less than maximum output. They are 
available to serve load immediately in an unexpected contingency, 
such as an unplanned outage of a generating unit and in accordance 
with section 3.5 (and Schedule 5) of the pro forma 
tariff.41
---------------------------------------------------------------------------

    \41\ Id. at 31,708.
---------------------------------------------------------------------------

    2.5.6: Operating Reserve--Supplemental Reserve Service (SU)--[is 
the provision of resources that may not be available 
instantaneously, including generating units that are on-line, quick 
start units, and customer-interrupted load, to serve load in case 
there is an unplanned event such as loss of generation.] is 
generating capacity that can be used to respond to contingency 
situations. Supplemental reserve, is not available instantaneously, 
but rather within a short period (usually ten minutes). It is 
provided by generating units that are on-line but unloaded, by 
quick-start generation, and by customer interrupted load and in 
accordance with section 3.6 (and Schedule 6) of the pro forma 
tariff.42
---------------------------------------------------------------------------

    \42\ Id.

    We agree with Cinergy's suggestion that we add the blanket 
statement ``ancillary service definitions may be offered pursuant to an 
individual transmission provider's specific tariff filings'' and will 
add language to this effect to the paragraph about ``other service 
definitions'' preceding Standard 2.5.7 in the attached BPS&G Document.
    We propose to adopt recommended Standard 2.5, because we agree that 
the term ``AS__TYPE'' is less restrictive than the term 
``ANC__SERVICE__TYPE'' and would allow this data element to be used to 
offer additional services (beyond the six ancillary services denoted in 
the pro forma tariff) if the services are authorized by a transmission 
provider's individual open access tariff. We also propose to add a 
qualifier to Standards 2.5.1-2.5.6 clarifying that the various 
ancillary services are in accordance with the definitions of ancillary 
services in the pro forma tariff. Consistent with this proposal, we 
also propose to replace the Data Dictionary Element 
``ANC__SERVICE__TYPE'' in the S&CP Document with the term ``AS__TYPE.'' 
The comments to this NOPR should identify specifically all of the 
places in the S&CP Document where this change should be made.
7. Scheduling Period (Section 2F of the June 19 Report)
    Recommended Guides 2.6, 2.6.1, and 2.6.2 are recommended by the 
June 19 Report as business practice guides, related to on-line price 
negotiations and bumping rules in short-term markets, SAME-DAY (2.6.1) 
and NEXT-HOUR (2.6.2). They provide as follows:

    Guide 2.6: A Transmission Provider should use the definitions 
below to describe the scheduling period leading up to the start time 
of a transaction:
    2.6.1: Same-day is (i) after 2 p.m. of the preceding day and 
(ii) more than one hour prior to the service start time.
    2.6.2: Next-hour is one hour or less prior to the service start 
time.

These definitions do not apply to a specific data element in the Phase 
IA S&CP Document.

[[Page 5215]]

Comments
    No comments were offered on these definitions.
Discussion
    Recommended Guides 2.6, 2.6.1, and 2.6.2 refer to definitions 
established for the next-hour experiment, which begins November 1, 1998 
and terminates March 1, 1999, with a report due to the Commission by 
March 31, 1999. It is premature to propose the adoption of these guides 
at this time, pending the outcome of the industry experiment.
8. Maintenance of Industry Home Page (Section 3A of the June 19 Report)
    The June 19 Report would require all users of individual OASIS 
sites to register with the industry-wide OASIS Home Page (www.tsin.com) 
to obtain access to any individual OASIS site (Standard 3.1). The June 
19 Report also recommends that the Commission permit a nominal 
registration fee to be charged to defray the cost of the registration 
process and to cover the maintenance of the site. In addition, the 
industry-wide Home Page is referenced in recommended Standards 2.1, 
2.2, 2.3, 2.5, 3.1, 3.2, 3.4, and 3.5 and in recommended Guides 3.3 and 
6.4. However, the June 19 Report does not identify the party who will 
operate and maintain the industry-wide OASIS Home Page. Nor does the 
proposal discuss how the Commission can ensure that it is maintained in 
accordance with Commission regulations.
Comments
    ECI agrees with the June 19 Report that all users of OASIS should 
register their identity at the ``OASIS Home Page.'' However, ECI 
disagrees with the June 19 Report's proposal to charge a registration 
fee to defray the registration and maintenance costs of the OASIS Home 
Page. ECI argues that a ``nominal'' fee is ambiguous and questions 
whether such a fee is FERC jurisdictional and whether it would be cost-
based. It asserts that, consistent with Order No. 889, the costs 
associated with the OASIS Home Page should be collected through a 
transmission provider's cost of service.\43\
---------------------------------------------------------------------------

    \43\ ECI Comments at 11.
---------------------------------------------------------------------------

Discussion
    We are concerned that the proposal could have a non-public utility 
setting fees for the use of the industry-wide OASIS home page (in 
contrast to fees for individual transmission provider OASIS sites). We 
are concerned that this proposal would allow an unidentified, non-
public utility to be the sole gatekeeper of who may use individual 
OASIS sites.\44\ We cannot allow access to individual OASIS sites to be 
controlled by an unidentified, possibly non-public utility party. 
However, this concern would be alleviated if the relationship between 
the industry-wide OASIS Home Page and the individual OASIS sites 
operated or controlled by public utilities is such that: (1) The 
operator of the industry-wide OASIS Home Page acts as an agent for the 
individual transmission providers on whose behalf it acts; and (2) in 
the event that a user or potential user fails to comply with the 
registration procedures followed by the industry-wide OASIS Home Page, 
the operator of the industry-wide OASIS Home Page would take no 
independent action denying access to any individual OASIS site, but 
would merely pass along this assessment to the operators of the 
individual OASIS sites, who would then determine whether to deny access 
to their individual OASIS sites. The user or potential user could then 
file a complaint with the Commission if dissatisfied with this action.
---------------------------------------------------------------------------

    \44\ This is distinguishable from an individual transmission 
provider using a nonjurisdictional entity as its agent to operate 
its OASIS site because, in that instance, the transmission provider 
ultimately still is responsible for the actions of its agent.
---------------------------------------------------------------------------

    Under this scenario, the individual transmission providers, could 
collectively contribute to the operation and maintenance of an 
industry-wide OASIS Home Page, but this would not diminish their 
responsibility to provide access to their individual OASIS site to 
users and potential users who comply with applicable registration 
requirements. Such a contractual arrangement would also permit 
transmission providers to recover reasonable fees they paid for the 
operation and maintenance of the industry-wide OASIS Home Page.
    We, therefore, propose to allow the use of an industry-wide OASIS 
Home Page at www.tsin.com, keeping in mind that the operator of the 
Home Page may only act as an agent of the transmission providers, and 
that this provision in no way undermines the responsibilities of 
individual transmission providers to make their individual OASIS sites 
accessible to users and potential users and to operate their OASIS 
sites in compliance with all applicable Commission orders and 
regulations. As long as transmission providers pay reasonable fees to 
the third party for operating and maintaining the industry-wide OASIS 
Home Page, they will be able to recover these fees in their 
transmission rates.\45\
---------------------------------------------------------------------------

    \45\ As provided in 18 CFR 37.5(c), access to OASIS is to be 
provided to Commission staff and the staffs of State regulatory 
authorities at no cost. This provision governs access to both 
individual OASIS sites and to any industry-wide OASIS Home Page.
---------------------------------------------------------------------------

9. Identification of Parties (Section 3A of the June 19 Report)
    The OASIS S&CP Document specifies what information is necessary to 
communicate among the parties, and how the information must be 
communicated, for the Commission's Open Access program to work. The 
June 19 Report identifies instances where the information requirements 
are not always sufficiently defined. For example, transactions 
generally require the identification of receipt and delivery points, 
but it is left to each transmission provider to name the receipt and 
delivery points on their system. The lack of standardized transmission 
path names and service points often causes confusion when customers 
attempt to reserve service.
    The June 19 Report states that, for OASIS to succeed, there must be 
an unambiguous identification of the parties to a transaction. Further, 
it contends that factors such as mergers, reorganizations, and name 
changes often result in confusion as to the identification of parties. 
The June 19 Report recommends, in Standard 3.1, to keep parties 
informed about parties' name changes by requiring all transmission 
providers and users of OASIS to register at an Internet web site, 
www.tsin.com, and to renew the registration annually. Recommended 
Standard 3.1 provides as follows:

    Standard 3.1: All entities or persons using OASIS shall register 
the identity of their organization or person at the OASIS Home Page 
at www.tsin.com. Registration shall be completed prior to the 
commencement of Phase 1-A and renewed annually thereafter.
Comment
    ECI agrees that all OASIS users should register their identity at 
the industry-wide OASIS Home Page.
Discussion
    The June 19 Report proposal discusses how name changes and the use 
of ambiguous names caused by mergers can make the identification of 
parties difficult. The June 19 Report recommends eliminating the 
problem by requiring each entity to annually renew its registration. We 
believe this proposal for annual renewal may not be sufficient to avoid 
ambiguity. Thus, we propose to require that registration be renewed 
within 48 hours of any changes in

[[Page 5216]]

identification and propose a specific date each year by which 
registration must be accomplished.\46\ Accordingly, we propose to adopt 
recommended Standard 3.1 as modified below:

    \46\ The change in identification includes both name and DUNS 
number of a party. DUNS numbers, a proprietary service of DUN & 
Bradstreet, are a means of uniquely identifying commercial entities 
and their use is required by the S&CP Document.
---------------------------------------------------------------------------

    Standard 3.1: All entities or persons using OASIS shall register 
the identity of their organization (including DUNS number) or person 
at the OASIS Home Page at www.tsin.com. Registration shall be 
completed prior to the commencement of Phase IA and renewed annually 
by January 1st of each year thereafter and within 48 hours of any 
changes in identification.
10. Registering Non-Standard Service Attributes (Section 3B of the June 
19 Report)
    The June 19 Report also maintains that standardized identification 
of service products is needed. It maintains that inconsistencies in the 
names of services can inhibit moving power across the power grid. For 
example, if three transmission providers offer weekly firm service that 
can begin on any day of the week and one calls its service ``sliding 
weekly firm'', and the second calls it ``enhanced weekly firm'' and the 
third calls it ``moveable weekly firm'', customers can become confused. 
The S&CP Document defines standard services using attributes. However, 
the S&CP Document does not define the attributes. The June 19 Report 
proposes standard attribute definitions.47 Sections III.D.2-
D.4 and III.D.6-D.7 above address the proposed standard definitions. 
The June 19 Report also provides for instances where standardized 
attributes and definitions are not appropriate. Specifically, 
recommended Standard 3.2 and recommended Guide 3.3 provide as follows:
---------------------------------------------------------------------------

    \47\ See June 19 Report at Section 2.

    Standard 3.2: Providers of transmission and ancillary services 
shall use only attribute values and definitions that have been 
registered on the OASIS Home Page at www.tsin.com for all 
transmission and ancillary services offered on their OASIS.
    Guide 3.3: Providers of transmission and ancillary services may 
use on their OASIS attribute values and definitions that have been 
posted by other Providers on the OASIS Home Page at www.tsin.com.

    Under this proposal, transmission providers register new attributes 
and definitions on the industry-wide home page (www.tsin.com). 
Transmission providers would be free to use attributes and definitions 
developed by other transmission providers.48
---------------------------------------------------------------------------

    \48\ June 19 Report at 10. However, changes to filed rates would 
require a filing under section 205.
---------------------------------------------------------------------------

    The June 19 Report states that the CPWG will monitor the 
registration process to ``ensure the attributes and definitions do not 
undermine the goal of promoting consistent terminology.'' 49
---------------------------------------------------------------------------

    \49\ Id.
---------------------------------------------------------------------------

Comments
    EPMI recommends that monitoring of the attribute registration 
process not be left to the CPWG as it is not clear that the CPWG will 
even exist in the future.50 Cinergy expresses concern that 
there may be real or perceived conflicts if the CPWG monitors the 
attribute registration process. Cinergy proposes that the process be 
monitored by the Commission or an organization that is not so involved 
in the process.51
---------------------------------------------------------------------------

    \50\ EPMI Comments at 4.
    \51\ Cinergy Comments at 4.
---------------------------------------------------------------------------

Discussion
    The Commission agrees with the June 19 Report that monitoring is 
needed to ensure that the non-standard attribute naming process is not 
abused. The CPWG has volunteered to monitor the process, but as 
discussed above and as predicted by EPMI, the IMIC, a group we are not 
yet familiar with, has taken over the functions of the 
CPWG.52 Although, we continue to believe that an industry 
group is the logical body to monitor the process, the proper group to 
undertake this task needs to be identified.
---------------------------------------------------------------------------

    \52\ This makes moot Cinergy's argument that it would be 
inappropriate for the CPWG to monitor the process because of real or 
perceived conflicts of interests.
---------------------------------------------------------------------------

    Accordingly, we invite comment on which group would be the proper 
group to perform this function, whether that group would be agreeable 
to performing this function, how it organizes itself, and how it 
conducts its business, before deciding whether it would be able to 
perform this function in a fair evenhanded manner. We will consider 
these comments before deciding who should perform this monitoring 
function.
    We propose to adopt recommended Standard 3.2, and recommended Guide 
3.3, with modifications. Recommended Guide 3.3 states that transmission 
providers may use attribute values and definitions that have been 
posted by other transmission providers. We believe that in order to 
minimize the number of attribute values and definitions, transmission 
providers should use attribute values and definitions that have been 
posted by other transmission providers whenever possible. Accordingly, 
we propose a modified Guide 3.3 that would read as follows:

    Guide 3.3: Providers of transmission and ancillary services 
[may] should endeavor to use on their OASIS attribute values and 
definitions that have been posted by other Providers on the OASIS 
Home Page at www.tsin.com whenever possible.

These revisions would more strongly encourage transmission providers to 
use attribute values posted by other providers.
11. Registering Points of Receipt and Delivery (Section 3C of the June 
19 Report)
    OASIS Phase I requires transmission providers to define and post, 
on their OASIS sites, transmission paths and associated transfer 
capabilities. The June 19 Report recommends Standards 3.4 and 3.5 and 
Guide 3.6 as follows: [53]

    \53\ The subject of path names is also the subject of a separate 
September 15, 1998 submittal from CPWG/How Group, discussed below in 
section III.F, infra.
---------------------------------------------------------------------------

    Standard 3.4: A Transmission Provider shall register and 
thereafter maintain on the OASIS Home Page at www.tsin.com all 
Points of Receipt and Delivery to and from which a Transmission 
Customer may reserve and schedule transmission service.
    Standard 3.5: For each reservable Path posted on their OASIS 
node, Transmission Providers shall indicate the available Point(s) 
of Receipt and Delivery for that Path. These Points of Receipt and 
Delivery shall be from the list registered on the OASIS Home Page at 
www.tsin.com.
    Guide 3.6: When two or more Transmission Providers share a 
common Points of Receipt or Delivery, or when a Path connects Points 
of Receipt and Delivery in neighboring systems, the Transmission 
Providers owning and/or operating those facilities should apply 
consistent names for those connecting or common Paths on OASIS.

    The June 19 Report maintains that for the most part, paths and 
service points have been defined from each individual transmission 
provider's perspective. The June 19 Report states that the lack of 
standards results in confusion about the feasibility of connecting 
paths to move power from one system and region to another. The June 19 
Report recommends the following business practices to improve 
coordination of path naming and enhance identification of commercially 
available connection points between transmission providers and regions:

     Transmission Providers register (at the industry-wide 
OASIS home page) all service points (Points of Receipt and Delivery) 
for which transmission service is available over OASIS.

[[Page 5217]]

     Each Provider would indicate on its OASIS node, for 
each Path posted on its OASIS node, the Points of Receipt and 
Delivery to which each Path is connected.

    These principles are incorporated in recommended Standards 3.4 and 
3.5, and recommended Guide 3.6.\54\
---------------------------------------------------------------------------

    \54\ Id.
---------------------------------------------------------------------------

Comments
    No comments were received on this issue.
Discussion
    With a slight revision, we propose to adopt Standards 3.4 and 3.5 
and Guide 3.6 as recommended.\55\ We agree with the principle behind 
Guide 3.6, that transmission providers should be encouraged to apply 
consistent names for connecting paths or common paths and request that 
transmission providers do so whenever possible. We also request that 
the comments to this NOPR address what would be the proper entity to 
monitor this process and whether this function should be performed in 
tandem with the monitoring of the registration of standard attributes 
(as discussed above).
---------------------------------------------------------------------------

    \55\ As shown in Attachment A to this NOPR, we are making a 
grammatical correction to recommended Guide 3.6.
---------------------------------------------------------------------------

12. On-line Price Negotiation in Short-term Markets (Section 4A of the 
June 19 Report)
    Negotiations on the OASIS. Order No. 889-A requires negotiations 
between transmission providers and potential customers to take place on 
the OASIS and be visible to all market participants. The OASIS Phase IA 
S&CP Document specifies the information needed for negotiations and how 
the information will be communicated between the parties. With the 
exception of reservations for next-hour service (which it separately 
discusses in recommended Guide 4.2 and 4.3, discussed below), the June 
19 Report incorporates the requirement in Order No. 889-A that all 
reservations and price negotiations be made directly on the OASIS. This 
is stated explicitly in recommended Guide 4.1 as follows:

    Guide 4.1: Consistent with FERC policy and regulations, all 
reservations and price negotiations should be conducted on OASIS.
Comments
    Cinergy argues that recommended Guide 4.1 should be a standard 
because the guide implements the Commission policy that all 
reservations and price negotiations be conducted on the OASIS.\56\
---------------------------------------------------------------------------

    \56\ Cinergy Comments at 3.
---------------------------------------------------------------------------

Discussion
    We agree with Cinergy that this provision merely restates existing 
Commission policy. Accordingly, we propose adoption of recommended 
Guide 4.1 as Standard 4.1.
    Next-Hour Transactions and Electronic Entry of Reservation and 
Scheduling Requests. At the industry's request, to permit development 
of the next-hour market, the Commission issued an order on December 27, 
1996,\57\ clarifying how reservations for next-hour service would be 
made during OASIS Phase I. The Commission stated:
---------------------------------------------------------------------------

    \57\ Open Access Same-Time Information System and Standards of 
Conduct, 77 FERC para. 61,335 (1996) (December 27, 1996 Order).

A request for transmission service made after 2:00 p.m. of the day 
preceding the commencement of such service, will be ``made on the 
OASIS'' if it is made directly on the OASIS or, if it is made by 
facsimile or telephone and promptly (within one hour) posted on the 
---------------------------------------------------------------------------
OASIS by the Transmission Provider.\58\

    \58\ December 27, 1996 Order, 77 FERC at 62,492.
---------------------------------------------------------------------------

    While it is Commission policy that all reservation requests be made 
on the OASIS, the clarification allows any request made after 2:00 p.m. 
on the day preceding the start of service to be made by telephone or 
facsimile as long as the request is posted on the OASIS within one hour 
of receipt. However, the June 19 Report expresses the fear that next-
hour transactions will have to be treated differently from other same-
day transactions.\59\ Therefore, the June 19 Report recommends Guides 
4.2 and 4.3, which provide as follows:

    \59\ June 19 Report at 12.
---------------------------------------------------------------------------

    Guide 4.2: The following is considered ``on the OASIS'' during 
Phase 1-A: For a transmission service of hourly duration, requested 
within the next-hour, a Customer should have the option, subject to 
the exception allowed by Guide 4.3, of entering a reservation and 
schedule request electronically on the Provider's OASIS and 
scheduling system (if such electronic transactions are allowed on 
the Provider's scheduling system), or arranging the reservation and 
schedule verbally with the Provider. If a transmission reservation 
is confirmed verbally, the Provider should have the option of 
requiring the Customer to enter the reservation on OASIS 
electronically within one hour after the start of the reservation.
    Guide 4.3: If a Provider's OASIS and scheduling processes allow 
that a Customer's reservation and scheduling requests will be 
accepted or refused within 15 minutes of the queue time, then the 
Provider may require that reservations and schedules be entered 
electronically by the Customer prior to the established scheduling 
deadline. If in any case the Provider has not responded to the 
reservation and schedule request within 15 minutes, the Customer has 
the option of calling the Provider to verbally confirm the 
reservation and schedule.
Comments
    EPMI recommends that recommended Guides 4.2 and 4.3 be made 
mandatory standards and not merely voluntary best practice guides.\60\ 
However, EPMI sees an inconsistency between the time limits recommended 
in Guide 4.3 and those in Table 4-2 and recommends that this 
discrepancy be resolved.\61\
---------------------------------------------------------------------------

    \60\ EPMI Comments at 5.
    \61\ Table 4-2 also is discussed in section III.D.14 below, 
infra.
---------------------------------------------------------------------------

Discussion
    The June 19 Report's proposal is essentially the same as the 
proposal made in the June 1998 CPWG/How Group letter to the Commission 
requesting a four-month next-hour experiment and approved by the 
Commission in the September 29 Order. We will defer a decision on this 
issue until we have had an opportunity to evaluate the outcome of that 
experiment. Consistent with our practice elsewhere in this NOPR, we 
will reserve the applicable section numbers (4.2 and 4.3) so that the 
references in Attachment A will continue to match-up with the June 19 
report.
13. Diagram Depicting the Negotiation Process (Section 4B of the June 
19 Report)
    The June 19 Report recommends a process state diagram, Guide 4.4, 
that defines transmission provider and customer interactions when 
negotiating for transmission service. The diagram defines allowable 
steps in the reservation request, negotiation, approval, and 
confirmation processes. The June 19 Report also recommends a table, 
Guide 4.5, that defines the terms used in the diagram. Recommended 
Guides 4.4 and 4.5 provide as follows:

    Guide 4.4: The following state transitions in Figure 4-1 are 
recommended practice in OASIS Phase 1-A.


[[Page 5218]]

[GRAPHIC] [TIFF OMITTED] TP03FE99.052



    Guide 4.5: The following definitions in Table 4-1 should be 
applied to the process states in OASIS Phase 1-A.

              Table 4-1--OASIS Phase 1-A State Definitions
------------------------------------------------------------------------
            Queued               The request has been received by OASIS
------------------------------------------------------------------------
Invalid......................  An invalid request (improper POR, POD,
                                source, sink, increment, combination of
                                duration and increment, etc.). (Final
                                state.)
Received.....................  The request has been received by Provider/
                                Seller.
Study........................  The request is being evaluated by the
                                Provider/Seller.
Accepted.....................  The Provider has determined that the
                                request is valid, there is sufficient
                                transfer capability, and the price is
                                acceptable.
Refused......................  The request is denied due to lack of
                                availability of transfer capability.
                                (Final state.)
Declined.....................  The Provider has determined that the
                                price being proposed by the Customer is
                                unacceptable and that negotiations are
                                terminated. (Final state.)
Counteroffer.................  The Provider/Seller is proposing a
                                different price than was bid by the
                                Customer.
Rebid........................  The Customer responds to a Provider's
                                ACCEPTED or COUNTEROFFER price with a
                                new bid price.
Retracted....................  The Provider has (prior to Customer
                                confirmation) determined that the
                                Customer's time limit has expired.
                                (Final state.)
Superseded...................  A request which has not yet been
                                CONFIRMED is preempted by another
                                reservation request. (Final state.)
Withdrawn....................  The Customer withdraws the request (prior
                                to confirmation). (Final state.)
Confirmed....................  The Customer consummates the reservation
                                which has been ACCEPTED or is in
                                COUNTEROFFER by the Provider. (Final
                                state unless later ANNULLED or
                                DISPLACED.)
Annulled.....................  The request is terminated after reaching
                                the CONFIRMED state. This can only be
                                done if both the Customer and Provider
                                agree. The annulment should be confirmed
                                on OASIS by both the Provider/Seller and
                                Customer. (Final state.)
Displaced....................  A CONFIRMED reservation has been
                                terminated because a reservation of
                                higher priority has preempted it. (Final
                                state.)
------------------------------------------------------------------------


[[Page 5219]]

Comments
    Cinergy argues that the definition of ``REBID'', in recommended 
Guide 4.5, which provides that ``[t]he customer responds to a 
Provider's ACCEPTED or COUNTEROFFER price with a new bid price'', is 
confusing. Cinergy contends that the confusion arises from defining 
``REBID'' in terms of ``ACCEPTED''. It asserts that once a transmission 
provider ``accepts'' a customer's offer, a customer would have no 
reason to rebid.62
---------------------------------------------------------------------------

    \62\ Cinergy Comments at 3.
---------------------------------------------------------------------------

    Cinergy also argues that there is an inconsistency between the 
definition of ``rebid'' recommended in Guide 4.5 and the statement 
recommended in Guide 4.26 that if, during the negotiation process 
(i.e., before confirmation of the deal by the customer), the 
transmission provider receives a pre-confirmed request with a higher 
bid price, the transmission provider may counteroffer the price and 
potentially prompt a rebid.63 Cinergy requests either that: 
(1) the language be clarified; or (2) a cross reference be made.
---------------------------------------------------------------------------

    \63\ Guide 4.26 is quoted below at section III.D.15, infra.
---------------------------------------------------------------------------

    ECI argues that the June 19 Report proposal would revise the 
process state diagram appearing in the S&CP Document by adding 
SUPERSEDED to indicate that a request is preempted prior to 
confirmation by the customer. ECI further argues that this change 
results in a contradiction between June 19 Report's process state 
diagram in Guide 4.4 (Figure 4-1), and an order issued by the 
Commission on July 17, 1998.64 ECI argues that the July 17 
Order holds that ``there is no right to supersede while engaged in 
negotiations (i.e., pending), until there is a refusal to 
match.''65
---------------------------------------------------------------------------

    \64\ Electric Clearinghouse, Inc. v. PJM Interconnection, 
L.L.C., 84 FERC para. 61,045 (1998) (July 17 Order).
    \65\ ECI Comments at 13.
---------------------------------------------------------------------------

    ECI also argues that the definition of SUPERSEDED recommended in 
Guide 4.5 (Table 4-1) is inconsistent with findings in the July 17 
Order regarding section 13.2 of the proforma tariff.66 ECI 
states,

    \66\ For convenience, Section 13.2 of the pro forma tariff is 
quoted in full in Attachment B to this NOPR.
---------------------------------------------------------------------------

[i]n the complaint, ECI asserted that PJM violated Section 13.2 of 
its open access transmission tariff when it granted a transmission 
customer (PP&L), who had made a request for service that had not 
been confirmed, a right of first refusal to match a subsequent 
longer-term request for service that ECI had made.67

    \67\ ECI Comments at 14.
---------------------------------------------------------------------------

On this same point, ECI further argues that the Commission found, in 
the July 17 Order, that ECI's interpretation of the tariff is 
erroneous. ECI quotes from the July 17 Order:

    For purposes of section 13.2, reservations are considered to 
have been made when the request for service is made. PP&L had a 
conditional reservation for one-week service that was made when it 
requested service via PJM's OASIS. As such, it had the right of 
first refusal to match any later longer-term reservation before 
losing its reservation priority.68

    \68\ 84 FERC at 61,196.
---------------------------------------------------------------------------

    ECI also argues that the process state diagram's treatment of 
counteroffers needs revision. In discussing this change, the June 19 
Report states:

    These state changes are necessary in the event the Provider 
needs to change a price during negotiation prior to hearing a 
response from the Customer. For example, a discount may be given to 
another Customer after negotiations started with a first Customer 
(price is lowered by the Provider without a response from the first 
Customer) or the Provider may allow the Customer to match a 
competing bid that would preempt the current price being negotiated 
(price is raised by the Provider).69
---------------------------------------------------------------------------

    \69\ June 19 Report at 14.

    ECI argues that, in order to be consistent with the Commission's 
first-come-first-served and right to match processes, the diagram 
should reflect a right to match a subsequent acceptable request for 
service.70
---------------------------------------------------------------------------

    \70\ ECI Comments at 13.
---------------------------------------------------------------------------

Discussion
    Cinergy sees a conflict or inconsistency between associating REBID 
with ACCEPTED in recommended Guide 4.4 and recommended Guide 4.26. We 
disagree. In our view, the pairing of REBID with ACCEPTED is not 
inconsistent with recommended Guide 4.26. Once a transmission provider 
accepts a customer's offer (but before confirmation) a transmission 
provider can make a counteroffer based on a new higher offer it 
receives from another customer. Under these circumstances, a customer 
might wish to rebid.71
---------------------------------------------------------------------------

    \71\ In the comments to this NOPR, we invite comment on whether 
rebid should be limited to price, as proposed in this NOPR, or 
whether it would be feasible and/or desirable to allow a rebid 
lengthening the duration of the requested service or a rebid wtih 
both a higher price and longer duration.
---------------------------------------------------------------------------

    ECI has raised a number of objections to Part 4B of the June 19 
Report (i.e., ``Phase IA Negotiation Process State Transition 
Diagram''). One of ECI's objections is that the proposal in the June 19 
Report would revise the process state diagram in the S&CP Document. 
While this was true at the time when ECI filed its comments, it is true 
no longer. Subsequent to the filing of ECI's comments, the Commission 
approved a revised S&CP Document that contains the same process state 
diagram recommended by the June 19 Report.72
---------------------------------------------------------------------------

    \72\ See note 23, supra.
---------------------------------------------------------------------------

    Second, ECI contends that the addition of ``SUPERSEDED'' to the 
report's process state transition diagram (at Figure 4-1) is 
inconsistent with the Commission's denial of ECI's complaint against 
PJM in the July 17 Order,73 because ECI maintains that the 
July 17 Order held that ``there is no right to supersede [a pending 
request for service] while engaged in negotiations (i.e., pending) 
until there is a refusal to match.'' 74
---------------------------------------------------------------------------

    \73\ See 84 FERC at 61,196.
    \74\ ECI Comments at 13.
---------------------------------------------------------------------------

    ECI misapprehends the holding of the July 17 Order.75 
The Commission's findings in the July 17 Order conformed to 
determinations in Order No. 888-A, that: (1) Long-term firm point-to-
point service is available on a first-come-first-served basis; (2) as 
to requests for short-term non-firm transmission service, those 
requesting service for a longer duration have priority over requests 
for short-term non-firm transmission service over a shorter duration; 
76 and (3) in dealing with requests for short-term firm 
point-to-point transmission service, a customer should be given an 
opportunity to match a subsequent request for short-term firm point-to-
point transmission service for a longer time period before being 
preempted.77 However, the July 17 Order did not make any 
finding that requests for service could not be superseded for other 
reasons. In fact, the July 17 Order did not address this issue. Thus, 
the June 19 Report's addition of ``SUPERSEDED'' to the process state 
transition diagram is not inconsistent with the Commission's precedent 
on this issue.78
---------------------------------------------------------------------------

    \75\ ECI raises its argument about alleged inconsistencies 
between the July 17 Order and the June 19 Report's proposals in a 
number of contexts. We will address these arguments as they apply in 
various contexts.
    \76\ See pro forma tariff at Secs. 13,2 and 14.2.
    \77\ Order No. 888-A, FERC Stats. & Regs. Sec. 31,048 at 30,277-
78.
    \78\ See June 19 Report, Guide 4.4, Figure 4-1, shown in Section 
III.D.13 above, supra.
---------------------------------------------------------------------------

    Next, ECI argues that the report's treatment of counteroffers needs 
revision to allow a right to match a subsequent request for service. We 
disagree. A review of Table 4-1's REBID definition discloses that a 
customer may respond to a transmission provider's

[[Page 5220]]

counteroffer with a new bid price.79 This mechanism meets 
the concerns raised by ECI's comments on this issue.
---------------------------------------------------------------------------

    \79\ We note that as a REBID is only made on the basis of price, 
see definition in Guide 4.5, Table 4-1, the time limits in Guide 
4.13, Table 4-2 ought to be adequate. Any objections to these time 
limits should be raised in comments to this NOPR. See note 72, 
supra.
---------------------------------------------------------------------------

    Third, ECI argues that the report's definition of ``SUPERSEDED'' 
should be rejected because it does not state, as ECI argues is required 
by the July 17 Order, that a customer has a right to match subsequent 
longer-term requests for service before a requester loses its 
reservation priority. In our view, the findings in the July 17 Order 
need not be restated in the BPS&G to remain in effect. Table 4-1 is not 
incorporated into the proposed BPS&G document (see Attachment A at 
Section 4.2) and, in any event, Table 4-1's definition of SUPERSEDED is 
silent as to why and when an unconfirmed request might be preempted. It 
neither confers nor denies a customer's right to match. When a request 
for transmission service has been superseded, this occurs before the 
customer's confirmation.80 Therefore, the customer has no 
right to match.81 Additionally, a customer whose request for 
transmission service has been superseded may make a new request for 
service.
---------------------------------------------------------------------------

    \80\ After requests for transmission are confirmed, they may be 
preempted under Table 4-3.
    \81\ See Sec. 14.2 of the pro forma tariff.
---------------------------------------------------------------------------

    Upon review, the definition of ``SUPERSEDED'' in the Data Element 
Dictionary and in section 4.2.10.2 of the S&CP Document could be 
improved. We propose to revise the definition by substituting the word 
``preempted'' in place of ``displaced.'' We invite the comments to this 
NOPR to address this issue.
    Version 1.3 of the S&CP Document, adopted by the Commission in the 
September 29 Order, currently contains the same process state diagram 
contained in recommended Guide 4.4 of the June 19 Report.82 
To avoid any possible future conflict between the two documents, we 
will incorporate by reference Exhibit 4-1 of the S&CP Document into the 
attached BPS&G, rather than proposing to adopt the recommended diagram 
itself as part of the attached BPS&G. This will assure that any changes 
to this diagram in the S&CP Document automatically will be reflected in 
the BPS&G document.
---------------------------------------------------------------------------

    \82\ S&CP Document, Version 1.3, Exhibit 4-1, State Diagram of 
Purchase Transactions.
---------------------------------------------------------------------------

    Recommended Guide 4.5 (Table 4-1) of the June 19 Report contains 
definitions of the process states appearing in Guide 4.4. These 
definitions differ slightly from the definitions of the same terms 
appearing at Section 4.2.10.2 of the S&CP Document.83 To 
avoid any inconsistency between these definitions, and because the 
definitions in the S&CP Document are more complete, we will incorporate 
by reference the definitions in Section 4.2.10.2 of the S&CP Document 
in the attached BPS&G.
---------------------------------------------------------------------------

    \83\ For convenience, these provisions are quoted in Attachment 
C to this NOPR.
---------------------------------------------------------------------------

    Because we are incorporating by reference the version of Table 4-1 
that appears in S&CP Document, we are not including Table 4-1 from the 
June 19 Report in the attached BPS&G. However, as we did with section 
2.4, we will reserve for future use a blank Table 4-1, so that Tables 
4-2 and 4-3 as shown in the attached BPS&G will continue to have the 
same designations as in the June 19 Report without any renumbering.
14. Negotiations Without Competing Bids (Section 4C of July 19 Report)
    In our June 18, 1998 order on OASIS-related issues, we asked the 
CPWG to examine the development of predetermined deadlines for 
acceptances by transmission providers of transmission service requests 
and confirmation by customers of acceptances of their 
requests.84 We did this because comments received from PECO 
and NRECA convinced us that the parties to negotiations require 
decisions to be made quickly and in a known time frame. The CPWG/How 
Group responded to this concern by proposing Recommended Guide 4.6 that 
provides as follows:

    \84\ June 18 Order at 62, 464-65.
---------------------------------------------------------------------------

    Guide 4.6: A Transmission Provider/Seller shall respond to a 
Customer's service request, consistent with filed tariffs, within 
the ``Provider Response Time Limit'' defined in Table 4-2 
Reservation Timing Requirements. The time limit is measured from the 
time the request is QUEUED. A Provider may respond by setting the 
state of the reservation request to one of the following:

 INVALID
 DECLINED
 REFUSED
 COUNTEROFFER
 ACCEPTED
 STUDY (when the tariff allows), leading to REFUSED, 
COUNTEROFFER, or ACCEPTED

    This provision provides that, consistent with filed tariffs, 
transmission providers/sellers shall respond to customer requests 
within the time limits appearing in Table 4-2, contained in recommended 
Guide 4.13. Recommended Table 4-2 specifies how long transmission 
providers may take to respond to a request for service and how long 
customers may take to confirm the transmission provider's acceptance. 
In addition, the June 19 Report recommends reservation timing 
guidelines in Guide 4.13 as follows:

    Guide 4.13: The following timing requirements should apply to 
all reservation requests:

                                                        Table 4-2--Reservation Timing Guidelines
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Customer confirmation
                                                              Time QUEUED prior to   Provider evaluation      time limit after     Provider counter time
               Class                    Service increment            start              time limit \1\          ACCEPTED or        limit after REBID \3\
                                                                                                              COUNTEROFFER \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-Firm...........................  Hourly................  <1 hour..............  Best effort..........  5 minutes............  5 minutes.
Non-Firm...........................  Hourly................  >1 hour..............  30 minutes...........  5 minutes............  5 minutes.
Non-Firm...........................  Daily.................  N/A..................  30 minutes...........  2 hours..............  10 minutes.
Non-Firm...........................  Weekly................  N/A..................  4 hours..............  24 hours.............  4 hours.
Non-Firm...........................  Monthly...............  N/A..................  2 days...............  24 hours.............  4 hours.
Firm...............................  Daily.................  < 24 hours...........  Best effort..........  2 hours..............  30 minutes.
Firm...............................  Daily.................  N/A..................  30 days\4\...........  24 hours.............  4 hours.
Firm...............................  Weekly................  N/A..................  30 days\4\...........  48 hours.............  4 hours.
Firm...............................  Monthly...............  N/A..................  30 days\4\...........  4 days...............  4 hours.
Firm...............................  Yearly................  N/A..................  30 days..............  15 days..............  4 hours.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes for Table 4-2:
\1\ Consistent with regulations and filed tariffs, measurement starts at the time the request is QUEUED.

[[Page 5221]]

 
\2\ Measurement starts at the time the request is first moved to either ACCEPTED or COUNTEROFFER. The time limit does not reset on subsequent changes of
  state.
\3\ Measurement starts at the time the Transmission Customer changes the state to REBID. The measurement resets each time the request is changed to
  REBID.
\4\ Subject to expedited time requirements of Section 17.1 of the pro forma tariff. Transmission Providers should make best efforts to respond within 72
  hours, or prior to the scheduling deadline, whichever is earlier, to a request for Daily Firm Service received during period 2-30 days ahead of the
  service start time.

    The report also contains several guides (recommended Guides 4.7-
4.12) dealing with the rights and obligations of the parties during 
negotiations. Recommended Guides 4.7-4.12 provide as follows:

    Guide 4.7: Prior to setting a request to ACCEPTED, COUNTEROFFER, 
or REFUSED a Provider shall evaluate the appropriate resources and 
ascertain that the requested transfer capability is (or is not) 
available.
    Guide 4.8: For any request that is REFUSED or INVALID, the 
Transmission Provider should indicate in the COMMENTS field the 
reason the request was refused or invalid.
    Guide 4.9: The Customer may change a request to WITHDRAWN at any 
time prior to CONFIRMED.
    Guide 4.10: From ACCEPTED or COUNTEROFFER, a Customer may change 
the status to CONFIRMED, WITHDRAWN, or REBID. The Customer has the 
amount of time designated as ``Customer Confirmation Time Limit'' in 
Table 4-2 Reservation Timing Requirements to change the state of the 
request to CONFIRMED. The Customer time limit is measured from the 
first time the request is moved to ACCEPTED or COUNTEROFFER, and is 
not reset with subsequent iterations of negotiation.
    Guide 4.11: After expiration of the ``Customer Confirmation Time 
Limit,'' specified in Table 4-2 Reservation Timing Requirements, the 
Provider has a right to move the request to the RETRACTED state.
    Guide 4.12: Should the Customer elect to respond to a Provider's 
COUNTEROFFER by moving a reservation request to REBID, the Provider 
shall respond by taking the request to a DECLINED, ACCEPTED, or 
COUNTEROFFER state within the ``Provider Counter Time Limit,'' 
specified in Table 4-2 Reservation Timing Requirements. The Provider 
response time is measured from the most recent REBID time.
Comments
    Recommended Guide 4.8 suggests that when a request is REFUSED or 
INVALID the transmission provider should indicate in the COMMENTS field 
the reason the request was refused or found invalid. Cinergy argues 
that a transmission provider should not be required to enter a special 
reason in the comment section for a ``REFUSED'' response, since the 
definition of ``REFUSED'' means that the request is denied due to lack 
of availability of transfer capability.85
---------------------------------------------------------------------------

    \85\ Id.
---------------------------------------------------------------------------

    ECI supports recommended Guide 4.9, which states that a customer 
may change a request to WITHDRAWN at any time prior to confirmation. It 
asserts that this concept should be incorporated into the pro forma 
tariff.86
---------------------------------------------------------------------------

    \86\ ECI Comments at 15.
---------------------------------------------------------------------------

Discussion
    Recommended Guide 4.8 would have transmission providers give an 
explanation of why a request is refused. Cinergy argues that no reason 
other than REFUSED is needed to explain why a service request is 
rejected. We disagree. Even though backup information is available upon 
request to the customer,87 there is a delay before this 
information is provided. Any timely information from the transmission 
provider which can explain the reason(s) for refusal will be useful to 
the customer in assessing the competitiveness of the bid, establishing 
a level of confidence in the transmission provider's ATC posting, and 
detecting any instances of undue discrimination.88 For 
example, the reason for the lack of ATC may be that another customer 
has made a simultaneous bid for a longer duration short-term 
transmission service. Having this information available in a timely 
manner would allow the first customer to make a revised request for 
service that might be accepted. Another example would be where a 
transmission provider had not yet updated its ATC posting and thus its 
OASIS node would still show available ATC even though this was no 
longer true.
---------------------------------------------------------------------------

    \87\ A NOPR on expanding the availability of this back-up 
information is pending in Docket No. RM98-3-000. See Open Access 
Same-Time Information System and Standards of Conduct, FERC Stats. & 
Regs. para. 32,531 (1998).
    \88\ Upon review, the definition of ``REFUSED'' in the Data 
Element Dictionary and in section 4.2.10.2 of the S&CP Document is 
unclear. We propose to clarify the definition by inserting the words 
``lack of'' before the word ``availability.'' We invite the comments 
to this NOPR to address this issue.
---------------------------------------------------------------------------

    ECI agrees with recommended Guide 4.9 of the June 19 Report that, 
in the absence of competing bids, a customer may change a request to 
WITHDRAWN any time prior to it being confirmed. However, ECI contends 
that, under the July 17 Order, this may require a revision to Sec. 13.2 
of the pro forma tariff because this provision is silent as to the 
withdrawal of a request for transmission.
    We disagree. When we addressed the issue of reservation time limits 
in the June 18 Order, we agreed with commenters that on-line 
negotiation of discounts requires predetermined time limits on 
responses by transmission providers and customers.89 We 
asked the CPWG to examine the development of such deadlines and to make 
recommendations to us. The deadlines appearing in recommended Guide 
4.13 on the time limits for customers and transmission providers at 
different stages of the reservation process reflects the 
recommendations of the CPWG/How Group and appear to us to be 
reasonable. Any objections to these proposed time limits should be 
raised in comments to this NOPR.
---------------------------------------------------------------------------

    \89\ 83 FERC at 62,464.
---------------------------------------------------------------------------

    We disagree with ECI that the timing requirements in Table 4-2 of 
Guide 4.13 are inconsistent with section 17.5 of the pro forma tariff. 
Section 17.5 requires a response to a completed application ``as soon 
as practicable.'' In our view, Guide 4.13 sets forth the practicable 
time limits for responses to various reservation requests. We find this 
provision to be consistent with the pro forma tariff.\90\
---------------------------------------------------------------------------

    \90\ We also note that in the Wisconsin Electric case cited in 
note 89, supra, the Commission approved a revision to WEPCO's 
individual open access tariff setting a time limit on customer 
confirmations.
---------------------------------------------------------------------------

    We also find unpersuasive ECI's argument that the statement, in 
recommended Guide 4.13, that,

it is possible that an unconfirmed request with an earlier QUEUED 
time could be preempted (SUPERSEDED). For this to occur, the 
subsequent request would be of higher priority or of greater price * 
* * \91\
---------------------------------------------------------------------------

    \91\ June 19, Report at 18.

is inconsistent with the July 17 Order and needs revision to include a 
right to match the subsequent request. As discussed above, the silence 
of recommended Guide 4.13 and Table 4.1 on this point do not abrogate 
the Commission's findings in the July 17 Order. These findings still 
hold.
    Accordingly, we propose to adopt the June 19 Report's recommended 
Guides 4.6-4.13 in the attached BPS&G.
15. 
Negotiations With Competing Bids for Constrained Resources (When Customer Has Not Yet Confirmed a Provider's Acceptance) (Section 4D of June 19 Report)

    Section 4D of the June 19 Report contains recommended sections 
4.14-

[[Page 5222]]

4.27 dealing with the procedures for negotiations over the OASIS when 
there are competing bids for constrained resources prior to a customer 
confirming the transmission provider's acceptance. For the reasons 
stated below, we propose to adopt recommended Guides 4.14--4.26, with 
certain modifications, and to reject recommended Guide 4.27.
    When competing bids for reservations on constrained resources are 
received, the June 19 Report generally recommends awarding the 
reservation on a first-come-first-served basis. Exceptions to this rule 
are recommended for competing bids for short-term transmission service 
that have a higher priority,\92\ solely because they request service 
for a longer duration, and in the case of non-firm point-to-point 
transmission service, requests that are of the same duration, but at a 
higher price. In some situations, the right of first refusal is 
permitted. We will now discuss the provisions on negotiations for 
competing bids for constrained resources on a section-by-section basis.
---------------------------------------------------------------------------

    \92\ Recommended Guide 4.14 specifies the service request 
priority tiers.
---------------------------------------------------------------------------

Section 4.14--Service Request Priority Tiers

    Consistent with regulations and filed tariffs, Guide 4.14 divides 
transmission service into five tiers of successive priority when 
competing bids are negotiating for transmission service.\93\ Highest 
priority is given to native load, network, or long-term firm service 
(subsection 4.4.1). Second highest priority is given to short-term firm 
service (subsection 4.4.2). Third highest priority is given to network 
service on non-designated resources (subsection 4.4.3). Fourth highest 
priority is given to non-firm service (subsection 4.4.4). Fifth highest 
priority is given to service over secondary receipt and delivery points 
(subsection 4.4.5).
---------------------------------------------------------------------------

    \93\ These priorities are not meant to govern curtailments.
---------------------------------------------------------------------------

Comments
    None of the comments take issue with these priorities.
Discussion
    We propose to adopt the priorities laid out in Guide 4.14 as 
recommended.

Section 4.15--First-Come First-Served

    Consistent with regulations and filed tariffs, recommended Guide 
4.15 provides that reservation requests should be handled on a first-
come-first-served basis based on queue time.
Comments
    EPMI notes that under the June 19 Report's proposal, requests for 
capacity will no longer be pro-rated if there is a lack of available 
transmission capacity. Instead, requests will be evaluated on a first-
come-first-served basis. EPMI supports this change, but is concerned 
about affiliate transactions. EPMI fears that an affiliate of the 
transmission provider could obtain all of the available transmission 
capacity, rather than having it pro-rated if there is a constraint.\94\
---------------------------------------------------------------------------

    \94\ EPMI Comments at 6.
---------------------------------------------------------------------------

Discussion
    EPMI's argument is based on an incorrect premise. Currently, under 
the pro forma tariff, transmission is allocated on a first-come-first-
served basis and is not pro-rated.
    Nor, for two reasons, do we find persuasive EPMI's contention that 
the allocation of capacity on a first-come-first-served basis would 
allow an affiliate of a transmission provider to obtain all available 
transmission capacity. First, the S&CP Document TRANSSTATUS template 
contains the queue time of a request. Customers can monitor requests 
and detect any undue discrimination. Suspected violations can be 
reported to the Commission. As long as capacity is awarded on a non-
discriminatory basis, which gives the affiliate no undue preference, 
the award of capacity should not be an issue. Second, EPMI's prediction 
is contradicted by the fact that transmission already is allocated on a 
first-come-first-served basis and it does not appear that EPMI's 
scenario has come to pass.

Section 4.16--Priorities for Competing Reservation Requests

    Recommended Guide 4.16, which includes Table 4-3, describes the 
relative priorities of competing service requests and rules for 
offering a right of first refusal, consistent with Commission 
regulations and filed tariffs. Specifically, it states:

    Guide 4.16: Consistent with regulations and filed tariffs, Table 
4-3 describes the relative priorities of competing service requests 
and rules for offering right-of-first-refusal. While the table 
indicates the relative priorities of two competing requests, it is 
intended to also be applied in the more general case of more than 
two competing requests.

      Table 4-3 [95]--Priorities for Competing Reservation Requests
------------------------------------------------------------------------
                                 Is preempted by       Right of first
    Row         Request 1           request 2              refusal
------------------------------------------------------------------------
1..........  Tier 1: Long-    N/A--Not preempted    N/A.
              term Firm,       by a subsequent
              Native Load,     request.
              and Network
              Firm.
2..........  Tier 2: Short-   Tier 1: Long-term     No.
              term Firm.       Firm, Native Load,
                               and Network Firm),
                               while Request 1 is
                               conditional. Once
                               Request 1 is
                               unconditional, it
                               may not be
                               preempted.
3..........  Tier 2: Short-   Tier 2: Short-term    Yes, while Request 1
              term Firm.       Firm of longer term   is conditional.
                               (duration), while     Once Request 1 is
                               Request 1 is          unconditional, it
                               conditional. Once     may not be
                               Request 1 is          preempted and right
                               unconditional, it     of first refusal is
                               may not be            not applicable.
                               preempted.
4..........  Tier 3: Network  Tiers 1 and 2: All    No.
              Service From     Firm (including
              Non-Designated   Network).
              Resources.
5..........  Tier 4: All Non- Tiers 1 and 2: All    No.
              Firm PTP.        Firm (including
                               Network).
6..........  Tier 4: All Non- Tier 3: Network       No.
              Firm PTP.        Service from Non-
                               Designated
                               Resources.
7..........  Tier 4: All Non- Tier 4: Non-firm PTP  Yes.
              Firm PTP.        of a longer term
                               (duration) \1\.
                               Except in the last
                               hour prior to start
                               (see Standard 4.23).

[[Page 5223]]

 
8..........  Tier 4: All Non- Tier 4: Non-firm PTP  No.
              Firm PTP.        of equal term
                               (duration) \1\ and
                               higher price, when
                               Request 1 is still
                               unconfirmed and
                               Request 2 is
                               received pre-
                               confirmed. A
                               confirmed non-firm
                               PTP may not be
                               preempted for
                               another non-firm
                               request of equal
                               duration. (See
                               Standards 4.22 and
                               4.25.).
9..........  Tier 5: PTP      Tier 5 can be         No.
              Service over     preempted by Tiers
              secondary        1 through 4.
              receipt and
              delivery
              points.
------------------------------------------------------------------------
\1\ Longer duration, in addition to being higher SERVICE__INCREMENT
  (i.e., WEEKLY has priority over DAILY), also may mean more multiples
  of the same SERVICE__INCREMENT (i.e., 3 Days may have priority over 2
  Days).
\95\ For clarity, we have identified the rows in Table 4-3.

    Guide 4.16 would allocate requests for Tier 1 services (native 
load, network, long-term firm) and Tier 2 services (short-term firm) on 
a first-come-first-served basis. A request for Tier 1 service could not 
be preempted. A request for Tier 2 service that is ``conditional'' 
could be preempted by a request for Tier 1 service without any right of 
first refusal.\96\ A request for Tier 2 service that is ``conditional'' 
could also be preempted by a request for longer term Tier 2 service 
but, under this circumstance, it would receive the right of first 
refusal.\97\
---------------------------------------------------------------------------

    \96\ The distinction between conditional and unconditional 
service, as related to firm point-to-point service, is discussed in 
Order No. 888, FERC Stats. & Regs. para. 31,036 at 31,746, where we 
stated:
    Accordingly, the Final Rule pro forma tariff provides a 
mechanism to address this concern while safeguarding the rights of 
potential customers to obtain access to unused capacity. The tariff 
provides that reservations for short-term firm point-to-point 
service (less than one year) will be conditional until one day 
before the commencement of daily service, one week before the 
commencement of weekly service, and one month before the 
commencement of monthly service. These conditional reservations may 
be displaced by competing requests for longer-term firm point-to-
point service. For example, a reservation for daily firm point-to-
point service could be displaced by a request for weekly firm point-
to-point service during an overlapping period. Before the applicable 
reservation deadline, a holder of a conditional firm point-to-point 
reservation would have the right of first refusal to match any 
longer-term firm point-to-point reservation before being displaced. 
After the deadline, the reservation becomes unconditional, and the 
service would be entitled to the same priorities as any long-term 
point-to-point or network firm service.
    Conditional reservations also are discussed in Madison Gas & 
Electric Company v. Wisconsin Power & Light Company, 80 FERC para. 
61,331 at 62,102-03 (1997), reh'g denied, 82 FERC para. 61,099 at 
61,372-73(1998).
    \97\ The rights of first refusal shown in Table 4-3 should not 
be confused with the right of first refusal available to a customer 
with a pre-existing expiring contract under Order No. 888, see FERC 
Stats. & Regs. para. 31,036 at 31,745.
---------------------------------------------------------------------------

    Tier 3 service (network service from non-designated resources) 
could be preempted by requests for either Tier 1 or Tier 2 service and 
would not receive the right of first refusal. Tier 4 service (all non-
firm PTP) could be preempted by requests for Tier 1, 2, or 3 service 
and would receive the right of first refusal. A Tier 4 request could be 
preempted (except in the hour before service begins) by a longer 
duration Tier 4 service and would receive the right of first refusal. 
Until a Tier 4 request is confirmed, it could be preempted by a 
preconfirmed Tier 4 request of equal duration and higher price.\98\ The 
request would not receive the right of first refusal.
---------------------------------------------------------------------------

    \98\ Under Table 4-3, requests for transmission service may be 
superseded before they are confirmed. After they are confirmed, they 
may be preempted (as provided).
---------------------------------------------------------------------------

Comments
    Cinergy asks how the terms ``conditional'' and ``unconditional'' 
appearing in Table 4-3 should be defined.\99\
---------------------------------------------------------------------------

    \99\ Cinergy Comments at 5.
---------------------------------------------------------------------------

    ECI asserts that the concept in recommended Guide 4.16 (footnote 2 
to Table 4-3), that ``[l]onger duration, in addition to being higher 
SERVICE__INCREMENT (i.e., WEEKLY has priority over DAILY), also may 
mean more multiples of the same SERVICE__INCREMENT (i.e., 3 Days may 
have priority over 2 Days),'' should also apply to firm service.
Discussion
    Recommended Guide 4.16 defines the priorities of longer duration 
for non-firm PTP service to include both a higher service increment 
(weekly service has priority over daily service) and multiples of the 
same service increment (three day service has priority over two day 
service). ECI requests that this definition also be applied to firm 
service. We agree with ECI that multiple service increments should have 
similar priority for short-term firm service.\100\ Accordingly, we will 
revise Table 4-3 of recommended Guide 4.16 so that the footnote, now 
referencing rows 7 and 8 of column 2 of Table 4-3, will also refer to 
row 3, column 2 of the table. Moreover, we find these reservation 
priorities to be consistent with section 14.2 of the pro forma tariff, 
which, by its terms, applies only to non-firm point-to-point 
transmission service. Accordingly, we propose to adopt Guide 4.16 as 
revised.
---------------------------------------------------------------------------

    \100\ Except in cases where firm service becomes unconditional.
---------------------------------------------------------------------------

    We find unpersuasive Cinergy's argument that Table 4-3 should 
define ``conditional'' and ``unconditional.'' As seen in note 100, the 
concepts of conditional and unconditional service are complicated and 
would be cumbersome to define in a table.

Section 4.17--Required Posting When a Reservation Request Is Preempted

    This section provides that when a reservation request is preempted, 
the transmission provider must post the assignment reference number of 
the reservation that preempts the reservation request.
Comments
    None of the comments take issue with this recommendation.
Discussion
    We propose to adopt Guide 4.17 as recommended.

Section 4.18--Displaced and Superseded Pending Requests for 
Transmission Service

    This section lays out the circumstances when a transmission 
provider may displace or supersede pending requests for service based 
on the priorities laid out in Table 4-3 (Guide 4.16). Recommended Guide 
4.18, which addresses counteroffers, provides as follows:

    Guide 4.18: Given competing requests for a limited resource and 
a right-of-first-refusal is not required to be offered, the Provider 
may immediately move requests in the CONFIRMED state to DISPLACED, 
or from an ACCEPTED or COUNTEROFFER state to SUPERSEDED, if the 
competing request is of

[[Page 5224]]

higher priority, based on the rules represented in Table 4-3. These 
state changes require dynamic notification to the Customer if the 
Customer has requested dynamic notification on OASIS.
Comments
    Cinergy states that, under recommended Guide 4.18, when there are 
competing requests for constrained resources, a provider may change a 
confirmed reservation from the CONFIRMED status to DISPLACED status, if 
the competing request is of higher priority, based on the rules 
represented in Table 4-3. Cinergy asks--when does the transmission 
provider displace a request? Is it when the transmission provider 
accepts the offer from a second customer or when the second customer 
confirms the deal? Cinergy's suggested answer is that the transmission 
provider should displace a request at the time the second customer 
confirms the deal.101 Cinergy also questions when ATC should 
be decremented. Cinergy argues that ATC should not be decremented until 
the customer confirms acceptance of the transmission provider's award 
of its capacity. It argues that a customer should not have rights to a 
transmission path or an amount of capacity until the customer commits 
to pay for it.102
---------------------------------------------------------------------------

    \101\ Cinergy Comments at 4.
    \102\ Cinergy Comments at 4.
---------------------------------------------------------------------------

    Recommended Guide 4.18 would have transmission providers 
voluntarily use dynamic notification to notify their customers of 
changes in their requests from the CONFIRMED state to DISPLACED or from 
the ACCEPTED or COUNTEROFFER to SUPERSEDED.103 ECI would 
require transmission providers to use dynamic notification to notify 
their customers of these events.104
---------------------------------------------------------------------------

    \103\ In OASIS Phase IA, transmission providers use the Internet 
to notify customers automatically of when the status of a 
reservation request has changed.
    \104\ ECI Comments at 15.
---------------------------------------------------------------------------

    In addition, ECI cites the statement in the June 19 Report that,

it is possible that an unconfirmed request with an earlier QUEUED 
time could be preempted (SUPERSEDED). For this to occur, the 
subsequent request would be of higher priority or of greater price.

ECI argues that the Commission's ruling in the July 17 Order requires 
that customers get the right of first refusal in this situation. 
Otherwise, ECI argues, this proposal is inconsistent with the 
Commission's decision in its complaint against PJM.105
---------------------------------------------------------------------------

    \105\ See discussion of PJM complaint in Section III.D.13, 
supra.
---------------------------------------------------------------------------

Discussion
    First, Cinergy, referring to recommended Guide 4.18, asks when an 
accepted request for service is displaced by a transmission provider. 
Guide 4.18 states that, when there are competing requests for 
constrained resources, a provider may change a confirmed reservation 
from the CONFIRMED status to DISPLACED status, if the competing request 
is of higher priority, based on the priorities laid out in Table 4-3. 
Cinergy's view is that the first request should be displaced when the 
displacing customer confirms the deal. We agree. Otherwise, the 
displacing customer can walk away from a transaction, leaving the first 
customer with no service and the transmission provider with unused 
capacity.
    Second, Cinergy also maintains that a customer should not have 
rights to capacity until it commits to pay for it. We agree. A 
customer's confirmation already is a commitment to pay and a customer's 
confirmation is what gives the customer its rights to capacity. After 
reviewing recommended Guide 4.18, we do not believe that any revision 
is needed to accommodate Cinergy's concern.
    Third, as to Cinergy's specific question as to when ATC is 
decremented (when there are competing bids for constrained resources), 
we propose that the transmission provider decrement ATC when it accepts 
a request (without waiting for the customer's confirmation). Otherwise, 
a transmission provider could be placed in the awkward position of 
having accepted 10 requests for the same constrained capacity and 
having several customers confirm the deal at the same time. 
Nevertheless, we also invite specific comment on whether ATC should be 
decremented upon acceptance by a transmission provider of the 
customer's request or upon the customer's confirmation of its request, 
following acceptance.
    Consistent with our findings in Order No. 889, however, ATC 
postings should be updated when the transmission service is reserved 
(after confirmation).106 In Order No. 889, we stated,

    \106\ The transmission provider adjusts its calculation of ATC 
internally before it is required to post a revised ATC on the OASIS.
---------------------------------------------------------------------------

[a] posting for a constrained posted path must be updated when 
transmission service on the path is reserved or service ends or when 
the path's TTC changes by more than 10 percent.107

    \107\ Order No. 889, FERC Stats. & Regs. para. 31,035 at 31,606.
---------------------------------------------------------------------------

    ECI reads recommended Guide 4.18 to allow transmission providers to 
provide customers with dynamic notification of changes in the status of 
their reservation requests on a ``best practice'' basis. It requests 
that such notification be made mandatory. We note that dynamic 
notification of changes in reservation status is required by the June 
18 Order for customers requesting such notification.108 It 
is not mandatory for those who do not make such a request. We believe 
that our finding in the June 18 Order is sufficient to address ECI's 
concern and are not proposing in this NOPR any extension of dynamic 
notification beyond that contained in Guide 4.18 as recommended by the 
June 19 Report.
---------------------------------------------------------------------------

    \108\ 83 FERC at 62,463.
---------------------------------------------------------------------------

    ECI argues that the statement in the June 19 Report that ``it is 
possible that an unconfirmed request with an earlier QUEUED time could 
be preempted (SUPERSEDED),'' is inconsistent with the Commission's 
findings in the July 17 Order. As discussed above, although the July 17 
Order held that a customer making a request for short-term firm point-
to-point service is to be afforded an opportunity to match a 
reservation for short-term firm point-to-point service of a longer 
duration, before losing its reservation priority, that order did not 
address other circumstances under which an unconfirmed request may be 
preempted.109 Thus, ECI's comments provide no basis to 
reject Guide 4.18 and we propose its adoption as 
recommended.110
---------------------------------------------------------------------------

    \109\ 84 FERC at 61,196.
    \110\ Upon review, the definition of ``DISPLACED'' in the Data 
Element Dictionary and in section 4.2.10.2 of the S&CP Document is 
unclear. We propose to clarify the definition by inserting the words 
``if any'' after the word ``refusal'' to make clear that the 
existence of a status value for ``DISPLACED'' in the S&CP Document 
is not meant to confer any right of first refusal. In addition, we 
propose to substitute the word ``replaced'' for the word 
``displaced'' in the text of the definition. We invite the comments 
to this NOPR to address this issue.
---------------------------------------------------------------------------

Section 4.19--Counteroffers When Right of First Refusal Is Required

    Section 4.19 provides that, in instances where the customer is 
entitled to a right of first refusal, the transmission provider is to 
notify the customer through the use of a COUNTEROFFER of the 
opportunity to match the subsequent offer.
Comments
    None of the comments address this issue.
Discussion
    We propose to adopt Guide 4.19 as recommended.

[[Page 5225]]

Section 4.20--Time Limits for Right of First Refusal

    When we addressed the issue of reservation time limits in the June 
18 Order, we agreed with commenters that on-line negotiation of 
discounts requires predetermined time limits on responses by 
transmission providers and customers.111 We asked the CPWG 
to examine the development of such deadlines and to make 
recommendations to us. The deadlines appearing in recommended Guides 
4.13 and 4.20 reflect the recommendations of the CPWG/How 
Group.112
---------------------------------------------------------------------------

    \111\ 83 FERC at 62,464.
    \112\ Recommended Guide 4.13 (Table 4-2) is discussed above in 
Section III.D.14, supra.
---------------------------------------------------------------------------

Comments
    ECI argues that the confirmation time limits in recommended Guide 
4.20 are inconsistent with the 24-hour time limit in the pro forma 
tariff. ECI argues that the pro forma tariff should be revised to match 
recommended Guide 4.20. Recommended Guide 4.20 provides as follows:

    Guide 4.20: A Customer who has been extended a right-of-first-
refusal should have a confirmation time limit equal to the lesser of 
a) the Customer Confirmation Time Limit in Table 4-2 or b) 24 hours.

ECI reports that section 4.2 of the pro forma tariff provides a 
confirmation time limit of 24 hours and suggests that the tariff be 
revised in accordance with recommended Guide 4.20.
Discussion
    ECI identifies what it asserts is an inconsistency between 
recommended Guide 4.20 and the pro forma tariff. Recommended Guide 4.20 
provides that a customer who has been given the right of first refusal 
must respond in a time period equal to the lesser of the confirmation 
time in Guide 4.13 (Table 4-2) or 24 hours. The pro forma tariff 
provides, at section 17.5, that a response to a completed application 
be made ``as soon as possible.''
    We already addressed this issue in connection with our discussion 
of Guide 4.13 and Table 4-2. As we explained above,113 we 
find the time limits prescribed in Guide 4.13 to be both reasonable and 
consistent with the pro forma tariff.
---------------------------------------------------------------------------

    \113\ See discussion in Section III.D.14 above, supra.
---------------------------------------------------------------------------

Section 4.21--Non-discriminatory Right of First Refusal Comments

    This recommended standard requires transmission providers to apply 
all rights of first refusal in a non-discriminatory and open manner.
Comments
    None of the comments address this issue.
Discussion
    This provision is entirely consistent with the provisions in 18 CFR 
37.4(b)(5) that require transmission providers to operate their OASIS 
sites in an even handed non-discriminatory manner. We propose the 
adoption of Standard 4.21 as recommended.

Sections 4.22 & 4.23--When Confirmed Requests Shall Not Be Displaced

    Recommended Standards 4.22 and 4.23 provide as follows:

    Standard 4.22: Once a non-firm PTP request has been confirmed, 
it shall not be displaced by a subsequent non-firm PTP request of 
equal duration and higher price.
    Standard 4.23: A confirmed, non-firm PTP reservation for the 
next hour shall not be displaced within one hour of the start of the 
reservation by a subsequent non-firm PTP reservation request of 
longer duration.

    This section does not distinguish between requests that are pre-
confirmed and requests that are confirmed after acceptance. Once 
confirmed, both requests are treated alike.
Comments
    None of the comments address this issue.
Discussion
    We propose to adopt Standards 4.22 and 4.23 as recommended.

Section 4.24--Requests on Unconstrained Paths

    Recommended Guide 4.24 provides as follows:

    Guide 4.24: A Transmission Provider should honor any reservation 
request submitted for an unconstrained Path if the Customer's bid 
price is equal to or greater than the Provider's posted offer price 
at the time the request was queued, even if later requests are 
submitted at a higher price. This guide applies even when the first 
request is still unconfirmed, unless the Customer Confirmation Time 
Limit has expired for the first request.
Comments
    None of the comments address this issue.
Discussion
    We propose to adopt Guide 4.24 as recommended.

Section 4.25--Pre-Confirmation and Pre-Emption

    Recommended Guide 4.25 would permit Tier 4 (non-firm point-to-
point) service of equal term with a higher bid price to preempt a 
request for the same term and lower bid price, as long as the lower bid 
request is not confirmed and the higher bid request is preconfirmed. 
Specifically, the provision provides as follows:

    Guide 4.25: Once an offer to provide non-firm PTP transmission 
service at a given price is extended to a Customer by the Provider, 
and while this first request is still unconfirmed but within the 
Customer Confirmation Time Limit, the Provider should not preempt or 
otherwise alter the status of that first request on receipt of a 
subsequent request of the same Tier and equal duration at a higher 
price, unless the subsequent request is submitted as pre-confirmed.
Comments
    ECI asks that recommended Guide 4.25 be rejected for two reasons. 
First, it argues the guide introduces the concept of pre-confirmed 
requests for transmission service, a concept that does not appear in 
the pro forma tariff.114 Second, it argues that the concept 
violates the first-come-first-served principle.
---------------------------------------------------------------------------

    \114\ Under this concept, customers would be able to make pre-
confirmed requests for service that would lock them into 
automatically confirming their requests for service (and committing 
them to take service) in the event transmission providers accept 
their requests for service. A pre-confirmed reservation would be 
finalized when the transmission provider accepts the customer's 
request for service, without the need (or opportunity) for 
subsequent customer confirmation.
---------------------------------------------------------------------------

Discussion
    ECI requests that we reject recommended Guide 4.25 because the 
concept of pre-confirmed requests for transmission service is not 
addressed in the pro forma tariff and because it violates the principle 
of first-come-first-served. We disagree for two reasons. First, the 
first-come-first-served reservation priority of section 14.2 of the pro 
forma tariff applies from the time when a request for transmission 
service is made, not from the time when a request is confirmed. Thus, 
the recommended confirmation policy in Guide 4.25 would not change any 
reservation priorities under section 14.2 of the pro forma tariff. 
Second, we find the concept of pre-confirmed requests in Guide 4.25 to 
be consistent with the reservation priorities in section 14.2 of the 
pro forma tariff. If approved, the recommended pre-confirmation policy 
advocated by the CPWG/How Group would, however, have an impact on the 
displacement of requests for service by subsequent requests for service 
at a higher price or for a longer duration.115
---------------------------------------------------------------------------

    \115\ Id.

---------------------------------------------------------------------------

[[Page 5226]]

Section 4.26--Right of Customer Making Pre-Confirmed Request To Match a 
Subsequent Pre-Confirmed Request at Higher Price

    Recommended Guide 4.26 provides as follows:

    Guide 4.26: If during a negotiation of service (i.e., prior to 
Customer confirmation) a subsequent pre-confirmed request for 
service over the same limited resource of equal duration but higher 
price is received, the Provider may COUNTEROFFER the price of 
service on the prior COUNTEROFFER or ACCEPTED price to match the 
competing offer, in order to give the first Customer an opportunity 
to match the offer. This practice must be implemented in a non-
discriminatory manner. [Emphasis in original.]
Comments
    ECI suggests a wording change in recommended Guide 
4.26.116 ECI argues that to be consistent with the first-
come-first-served and right of first refusal process, transmission 
providers electing to follow this guide must be required to offer a 
COUNTEROFFER.
---------------------------------------------------------------------------

    \116\ ECI Comments at 16.
---------------------------------------------------------------------------

Discussion
    ECI requests that the word ``may'' in recommended Guide 4.26 be 
changed to ``must.'' Recommended Guide 4.26 states that under certain 
circumstances, ``the Provider may COUNTEROFFER the price of service on 
the prior COUNTEROFFER or ACCEPTED price to match the competing offer, 
in order to give the first Customer an opportunity to match the 
offer.'' ECI argues that, to achieve consistency with the first-come-
first-served and right to match process, transmission providers must be 
required to offer a COUNTEROFFER. We agree with ECI for two reasons. 
First, customers must know what to expect from a transmission provider. 
If a transmission provider allows some customers the right to match, it 
must allow all customers the right to match. Second, even though the 
recommended guide provides that the ``practice must be implemented in a 
non-discriminatory manner,'' there is too much room for discrimination 
if providing the right to match is optional.
    As we are proposing that Guide 4.26 be adopted as a guide rather 
than as a standard, a transmission provider would have the option not 
to follow this guideline. However, by proposing to adopt the suggested 
language change, we seek to assure that if the transmission provider 
elects to follow this guide, it will do so uniformly and not 
selectively.

Section 4.27--Curtailment of Nonfirm PTP Service

    Recommended Guide 4.27 provides that curtailment of non-firm point-
to-point transmission service should not be based on price. 
Specifically, it provides as follows:

    Guide 4.27: Curtailment of non-firm PTP should not consider 
price.
Comments
    Cinergy argues that curtailments are not within the scope of the 
Business Practices Report.
Discussion
    Cinergy notes that recommended Guide 4.27, which recommends that 
curtailment of non-firm PTP not be based on price, is outside the scope 
of Phase IA business practices. We agree that the definition of 
curtailment practices is beyond the scope of this proceeding. In the 
June 18 Order, we agreed to displaying curtailment priority information 
in certain templates contained in the S&CP Document.\117\ However, we 
specifically cautioned that,

    \117\ 83 FERC at 62,462.
---------------------------------------------------------------------------

our adoption of a place on the OASIS for these data elements does 
not constitute an approval of the NERC or other curtailment 
priorities.\118\
---------------------------------------------------------------------------

    \118\ Id.

As we stated in Coalition Against Private Tariffs,\119\ curtailment 
priorities are governed by the pro forma tariff.
---------------------------------------------------------------------------

    \119\ 83 FERC at 61,043. See discussion of NERC and MAPP Orders 
in Section III.D.6 and notes 27-28, above, supra.
---------------------------------------------------------------------------

    Accordingly, we do not propose to adopt recommended Guide 4.27 for 
the reasons discussed above. Commenters disagreeing with this view 
should address this matter in their comments to this NOPR.
16. Transmission Provider Requirements (Section 5B) of June 19 Report)
    Phase IA OASIS data templates allow the coupling of ancillary 
service arrangements with the purchase of transmission service for the 
purpose of simplifying the overall process for customers. Transmission 
providers must indicate (consistent with filed tariffs) what services 
are MANDATORY (must be taken from the Primary Provider), REQUIRED (must 
be provided for but may be procured from alternative sources), or 
OPTIONAL (not required as a condition of transmission service). While 
these interactions are available in the Phase IA S&CP Document, there 
is a need to clarify the associated BPS&G. The associated recommended 
Standards and Guides 5.1, 5.2, 5.3, and 5.4 apply to services defined 
in filed tariffs. Recommended Standards 5.1 and 5.3, and recommended 
Guides 5.2 and 5.4, provide as follows:

    Standard 5.1: The Transmission Provider shall designate which 
ancillary services are MANDATORY, REQUIRED, or OPTIONAL for each 
offered transmission service to the extent these requirements can be 
determined in advance of the submittal of a reservation request on a 
specific Path by a Transmission Customer.
    Guide 5.2: A Transmission Provider may modify a Transmission 
Customer's service request to indicate the Transmission Provider as 
the SELLER of any ancillary service, which is MANDATORY, to be taken 
from the Transmission Provider.
    Standard 5.3: For REQUIRED and OPTIONAL services, the 
Transmission Provider shall not select a SELLER of ancillary service 
without the Transmission Customer first selecting that SELLER.
    Guide 5.4: A Transmission Provider may accept a Transmission 
Customer's request for an ancillary service, which is not MANDATORY 
or REQUIRED, but shall indicate to the Transmission Customer at the 
time of acceptance under PROVIDER COMMENTS that the service is not 
MANDATORY or REQUIRED.
Comments
    With regard to section 5B of the June 19 Report, Cinergy asserts 
that ancillary services cannot be easily categorized as ``MANDATORY,'' 
``REQUIRED,'' or ``OPTIONAL'' on the basis of transmission service. 
Instead, it suggests that services be categorized on the basis of path 
because different ancillary services are required depending on whether 
the service is into, out of, or across, a system.120
---------------------------------------------------------------------------

    \120\ Cinergy Comments at 5.
---------------------------------------------------------------------------

Discussion
    We propose to adopt recommended Standards 5.1 and 5.3 and 
recommended Guides 5.2 and 5.4. Cinergy's concern that services be 
categorized on the basis of path would add undue complexity at this 
time and has not been shown to be needed since only Cinergy is seeking 
such information. Thus, no modification of these recommended Standards 
and Guides is warranted. Moreover, ancillary services are an essential 
part of a transmission service contract. Therefore, the process for 
making transmission contracts on the OASIS is improved through the 
proposed definitions and processes that spell out the mandatory, 
required, and optional ancillary services related to the transmission 
reservation.

[[Page 5227]]

17. Transmission Customer Requirements (Section 5C of June 19 Report)
    The June 19 Report recommends that the transmission customer should 
make known to the transmission provider (at the time of the reservation 
request) certain options related to arrangement of ancillary services, 
including taking all the MANDATORY and REQUIRED ancillary services from 
the primary provider, taking REQUIRED ancillary services from a third 
party seller, purchasing OPTIONAL services, and arranging for ancillary 
services in the future (prior to scheduling). The June 19 Report then 
recommends Guides 5.5 and 5.6. Recommended Guides 5.5 and 5.6 provide 
as follows:

    Guide 5.5: The Transmission Customer should indicate with the 
submittal of a transmission reservation request, the preferred 
options for provision of ancillary services, such as the desire to 
use an alternative resource.
    Guide 5.6: A Transmission Customer may, but is not required to, 
indicate a third party SELLER of ancillary services, if these 
services are arranged by the Transmission Customer off the OASIS and 
if such arrangements are permitted by the Transmission Provider's 
tariff.
Comments
    No specific comments were filed on these guides.
Discussion
    We propose to adopt recommended Guides 5.5 and 5.6.

E. Recommended Revisions to Pro Forma Tariff (Appendix A of the June 19 
Report)

    Based on the business practices recommended above, the June 19 
Report recommends that we modify three sections, 14.2, 14.7 and 17.5, 
of the pro forma tariff.121 As discussed below, we view the 
recommended revisions as either unwarranted or unnecessary and are not 
persuaded to make any modifications to the pro forma tariff at this 
time.
---------------------------------------------------------------------------

    \121\ For convenience, sections 14.2, 14.7, and 17.5 of the pro 
forma tariff are provided in Attachment B to this NOPR.
---------------------------------------------------------------------------

1. Section 14.2--Reservation Priority
    Section 14.2 of the pro forma tariff provides, in pertinent part:

    A higher priority will be assigned to reservations with a longer 
duration of service. In the event the Transmission System is 
constrained, competing requests of equal duration will be 
prioritized based on the highest price offered by the Eligible 
Customer for the Transmission Service. Eligible Customers that have 
already reserved shorter term service have the right of first 
refusal to match any longer term reservation before being 
preempted.122
---------------------------------------------------------------------------

    \122\ Order No. 888-A, FERC Stats. & Regs. para. 31,048 at 
30,518.

The CPWG/How Group argues that this creates problems. While not 
disputing that requests for service of greater duration or for a higher 
price should have priority over requests for shorter duration or lower 
price, the June 19 Report expresses a concern that a last-minute 
subsequent request for non-firm transmission service could displace an 
earlier request for non-firm transmission service without leaving the 
first bidder time to make alternate arrangements. CPWG/How Group 
recommends that customers be allowed to make pre-confirmed requests for 
service, locking themselves into automatically confirming their 
requests for service (and committing them to take service) in the event 
the transmission provider accepts their request for service. Although 
transmission providers could reject the request if a competing bid at a 
higher price or for a longer duration is received before the 
transmission provider accepts the request from the first customer, it 
---------------------------------------------------------------------------
is recommended that,

once an Eligible Customer confirms a reservation at a given price, a 
subsequent request of equal duration but at a higher price will not 
be allowed to displace the confirmed reservation.123
---------------------------------------------------------------------------

    \123\ This proposal stems from recommended Standard 4.22 and 
recommended Guide 4.25 and the priorities appearing on row 8, Table 
4-3 (recommended Guide 4.16).

As to subsequent requests for a longer duration, it is recommended 
---------------------------------------------------------------------------
that,

once an Eligible Customer confirms a reservation, a subsequent 
request of longer duration made within an hour of the scheduled 
start of the confirmed reservation will not be allowed to displace 
the confirmed reservation for that next hour.124
---------------------------------------------------------------------------

    \124\ This proposal stems from recommended Standard 4.23 and the 
priorities appearing on row 7, Table 4-3 (recommended Guide 4.16).

Thus, under these proposals, if a customer makes a pre-confirmed 
reservation, it would obtain protection from displacement from 
competing bids earlier than if it waits to confirm its request after 
the transmission provider accepts the request. However, even without 
pre-confirmation, after confirmation, any customer confirming its 
request would receive the same protection against displacement from 
subsequent requests for service.
    CPWG/How Group also recommends that the right to match subsequent 
requests for service (first refusal), currently guaranteed by Sec. 14.2 
of the pro forma tariff (to match subsequent requests for hourly non-
firm transmission service of longer duration if matched 
``immediately''), be extended to allow matching within five 
minutes.125
---------------------------------------------------------------------------

    \125\ This change stems from the reservation timing guidelines 
appearing on row 1, Table 4-2 (recommended Guide 4.13).
---------------------------------------------------------------------------

    To implement these proposals, CPWG advocates revising Sec. 14.2 of 
the pro forma tariff to read as follows:

    14.2 Reservation Priority: Non-Firm Point-To-Point Transmission 
Service shall be available from transmission capability in excess of 
that needed for reliable service to Native Load Customers, Network 
Customers and other Transmission Customers taking Long-Term and 
Short-Term Firm Point-To-Point Transmission Service. A higher 
priority will be assigned to reservations with a longer duration of 
service, except that once an Eligible Customer confirms a 
reservation, a subsequent request of longer duration made within an 
hour of the scheduled start of the confirmed reservation will not be 
allowed to displace the confirmed reservation for that next hour. In 
the event the Transmission System is constrained, competing requests 
of equal duration will be prioritized based on the highest price 
offered by the Eligible Customer for the Transmission Service, 
except that once an Eligible Customer confirms a reservation at a 
given price, a subsequent request of equal duration but at a higher 
price will not be allowed to displace the confirmed reservation. 
Eligible Customers that have already reserved shorter-term service 
have the right of first refusal to match any longer-term reservation 
before being preempted. A longer-term competing request for Non-Firm 
Point-To-Point Transmission Service will be granted if the Eligible 
Customer with the right of first refusal does not agree to match the 
competing request: (a) immediately within five minutes for hourly 
Non-Firm Point-To-Point Transmission Service after notification by 
the Transmission Provider; and, (b) within 24 hours (or earlier if 
necessary to comply with the scheduling deadlines provided in 
Sec. 14.6) for Non-Firm Point-To-Point Transmission Service other 
than hourly transactions after notification by the Transmission 
Provider. Transmission service for Network Customers from resources 
other than designated Network Resources will have a higher priority 
than any Non-Firm Point-To-Point Transmission Service. Non-Firm 
Point-To-Point Transmission Service over secondary Point(s) of 
Receipt and Point(s) of Delivery will have the lowest reservation 
priority under the Tariff.
Comments
    ECI argues that this provision needs to be reconciled with the 
Commission's findings in the July 17 Order.
Discussion
    We agree with CPWG/How Group that it might be beneficial to allow 
customers to ``hedge'' their requests for service by making pre-
confirmed requests for service. However, we disagree that this

[[Page 5228]]

requires any modification to Sec. 14.2 of the pro forma tariff.
    Section 14.2 creates reservation priorities based on price and 
duration that we have no inclination to revise. However, nothing in 
Sec. 14.2 either condones or condemns the use of pre-confirmed 
reservations. In evaluating competing requests for transmission 
service, we believe that Sec. 14.2 properly directs the transmission 
provider to give priority to requests for service at a higher price or 
for a longer duration. However, Sec. 14.2 does not address displacement 
of an accepted and confirmed request for transmission service upon 
receipt of a subsequent request for service.
    The remaining question, therefore, is whether transmission 
providers need to file a revision to their individual open access 
tariff to implement the pre-confirmation proposals outlined in CPWG/How 
Group's recommended revisions to Sec. 14.2 of the pro forma tariff. 
Given the silence of Sec. 14.2 on this subject, to the extent that a 
transmission provider seeks to add a pre-confirmation procedure, it 
would need to file, for Commission approval, a revision to its 
individual open access tariff.
    As to the proposal that we revise section 14.2 of the pro forma 
tariff to allow a matching response to a competing request for hourly 
non-firm point-to-point transmission service within five minutes of 
notification by the transmission provider, we find this recommended 
revision unnecessary. Currently, section 14.2 requires an eligible 
customer with the right of first refusal to match the competing request 
immediately for non-firm point-to-point transmission service. A 
matching response required within five minutes of notification by the 
transmission provider would satisfy the intent of section 14.2 that a 
matching response be made immediately.
    As to ECI's argument that the recommended revisions to section 14.2 
of the pro forma tariff need to be reconciled with the Commission's 
findings in the July 17 Order,\126\ we find that these concerns are 
moot in light of our determination to leave section 14.2 
unchanged.\127\
---------------------------------------------------------------------------

    \126\ Discussed in Section III.D.13 above, supra.
    \127\ As discussed in Section III.D.13, supra, we also find that 
ECI misinterprets the July 17 Order.
---------------------------------------------------------------------------

2. Section 14.7--Curtailment or Interruption of Service
    The June 19 Report recommends that we revise section 14.7 of the 
pro forma tariff to prevent the interruption of non-firm transmission 
service in favor of non-firm transmission service of the same duration, 
but at a higher price (for the same reasons advanced regarding similar 
changes to section 14.2). Specifically, the June 19 Report recommends 
that we revise section 14.7 of the pro forma tariff to provide as 
follows:

    14.7 Curtailment or Interruption of Service: The Transmission 
Provider reserves the right to Curtail, in whole or in part, Non-
Firm Point-To-Point Transmission Service provided under the Tariff 
for reliability reasons when, an emergency or other unforeseen 
condition threatens to impair or degrade the reliability of its 
Transmission System. The Transmission Provider reserves the right to 
Interrupt, in whole or in part, Non-Firm Point-To-Point Transmission 
Service provided under the Tariff for economic reasons in order to 
accommodate (1) a request for Firm Transmission Service, (2) a 
request for Non-Firm Point-To-Point Transmission Service of greater 
duration, or (3) [a request for Non-Firm Point-To-Point Transmission 
Service of equal duration with a higher price, or (4)] transmission 
service for Network Customers from non-designated resources. The 
Transmission Provider also will discontinue or reduce service to the 
Transmission Customer to the extent that deliveries for transmission 
are discontinued or reduced at the Point(s) of Receipt. Where 
required, Curtailments or Interruptions will be made on a non-
discriminatory basis to the transaction(s) that effectively relieve 
the constraint, however, Non-Firm Point-To-Point Transmission 
Service shall be subordinate to Firm Transmission Service. If 
multiple transactions require Curtailment or Interruption, to the 
extent practicable and consistent with Good Utility Practice, 
Curtailments or Interruptions will be made to transactions of the 
shortest-term (e.g., hourly non-firm transactions will be Curtailed 
or Interrupted before daily non-firm transactions and daily non-firm 
transactions will be Curtailed or Interrupted before weekly non-firm 
transactions). Transmission service for Network Customers from 
resources other than designated Network Resources will have a higher 
priority than any Non-Firm Point-To-Point Transmission Service under 
the Tariff. Non-Firm Point-To-Point Transmission Service over 
secondary Point(s) of Receipt and Point(s) of Delivery will have a 
lower priority than any Non-Firm Point-To-Point Transmission Service 
under the Tariff. The Transmission Provider will provide advance 
notice of Curtailment or Interruption where such notice can be 
provided consistent with Good Utility Practice.
Comments
    Cinergy recommends that the recommended change not be made.\128\
---------------------------------------------------------------------------

    \128\ Cinergy Comments at 6. Cinergy gives no reason for this 
comment.
---------------------------------------------------------------------------

Discussion
    We agree with Cinergy that the recommended change should not be 
made. We reach this conclusion for several reasons. First, the June 19 
Report (see pages A-4 and A-5) fails to provide any support for the 
proposal. Second, as discussed above, we have not been persuaded to 
revise the reservation priorities in section 14.2 and thus there is no 
need to revise section 14.7, for consistency. Third, in any event, 
curtailments and reservation priorities are completely distinct 
subjects. Thus, even if we were to revise the reservation priorities in 
section 14.2, we would need more of a reason than that to revise the 
curtailment priorities in section 14.7. Moreover, as we discussed in 
Section III.D.5 above, this order does not disturb the curtailment 
priorities of section 14.7 of the pro forma tariff.
3. Section 17.5--Response to a Completed Application
    The recommended change to Section 17.5 would require transmission 
providers to use best efforts to respond promptly to applications for 
daily firm service made within 24 hours of start of the transaction. 
The June 19 Report recommends that section 17.5 of the pro forma tariff 
be revised to provide as follows:

    17.5 Response to a Completed Application: Following receipt of a 
Completed Application for Firm Point-To-Point Transmission Service, 
the Transmission Provider shall make a determination of available 
transmission capability as required in Section 15.2. [The] Except 
for a Completed Application for Daily Firm service received less 
than 24 hours prior to the commencement of the transmission service, 
the Transmission Provider shall notify the Eligible Customer as soon 
as practicable, but not later than thirty (30) days after the date 
of receipt of a Completed Application either (I) if it will be able 
to provide service without performing a System Impact Study or (ii) 
if such a study is needed to evaluate the impact of the Application 
pursuant to Section 19.1. For a Completed Application for Daily Firm 
service received less than 24 hours prior to the commencement of the 
transmission service, the Transmission Provider shall use its best 
efforts to respond promptly to notify the Eligible Customer if it 
will be able to provide the service. Responses by the Transmission 
Provider must be made as soon as practicable to all completed 
applications (including applications by its own merchant function) 
and the timing of such responses must be made on a non-
discriminatory basis.
Comments
    No comments were received on this issue.
Discussion
    We do not agree that any revision to the pro forma tariff is needed 
to accommodate this proposal. Section 17.5 requires a response as soon 
as practicable. It would not be reasonable to interpret ``as soon as 
practicable,'' in

[[Page 5229]]

dealing with a response for daily service, as allowing a transmission 
provider to take up to thirty days in responding to a request for 
service. The ``not longer than thirty (30) days'' language was not 
intended to allow transmission providers to stall in giving timely 
responses to requests for shorter duration services. The analysis 
needed to respond to requests for shorter duration service is simpler 
and can be accomplished much faster. We need not revise section 17.5 to 
require ``best efforts'' to respond promptly to customers requesting 
daily service, because that requirement already is implicit in the 
requirement to respond ``as soon as practicable.''

F. September 15th Filing of Standards for Naming Transmission Paths

    In its July 1998 OASIS order, the Commission requested that CPWG/
How Group recommend a consistent naming convention for transmission 
paths. On September 15, 1998, CPWG/How Group made a joint filing 
proposing such standards.
    The existing S&CP Document contains a path naming convention. Paths 
are designated using a 50-character alphanumeric string:

RegionCode/transmissionProviderCode/ PathName/Optional From-to (POR-
POD)/Spare

    CPWG/How Group asserts that the structure of the string is 
appropriate, but that more specificity is needed to assure consistency 
among transmission providers in the designation of path names. Since a 
single transaction may span multiple providers, consistent names will 
make it easier to move power across the systems of several transmission 
providers.
    Specifically, CPWG/How Group recommend:

    Standard 6.1: A transmission provider shall use the path naming 
convention defined in the S&CP Data Dictionary for the naming of all 
reservable paths posted on OASIS.
    Standard 6.2: A transmission provider shall use the third field 
in the path name to indicate the sending and receiving control 
areas. The control areas shall be designated using standard NERC 
codes for the control areas, separated by a hyphen. For example, the 
first three fields of the path name will be:

RR/TPTP/CAXX-CAYY/

    Standard 6.3: A transmission provider shall use the fourth field 
of the path name to indicate POR and POD separated by a hyphen. For 
example, a path with a specific POR/POD would be shown as:

RR/TPTP/CAXX-CAYY/ PORPORPORPOR-PODPODPODPOD/

    If the POR and POD are designated as control areas, then the 
fourth field may be left blank (as per the example in 6.2).
    Guide 6.4: A transmission provider may designate a sub-level for 
Points of Receipt and Delivery. For example, a customer reserves a 
path to POD AAAA. The ultimate load may be indeterminate at the 
time. Later, the customer schedules energy to flow to a particular 
load that may be designated by the transmission provider as a sub-
level Point of Delivery. This option is necessary to ensure certain 
providers are not precluded from using more specific service points 
by the inclusion of the POR/POD in the path name. All sub-level PORs 
and PODs must be registered as such on www.tsin.com.
Comments
    APPA was the only commenter. While APPA has some reservations about 
the recommended standards, it recommends that the standards be adopted. 
APPA's qualms are due to its fear that the standards could be used to 
impose anticompetitive burdens on market participants by requiring a 
higher degree of POR-POD specificity for customers than for the 
transmission providers' own use of their systems. APPA requests that 
the Commission remain vigilant and hear customer complaints if the 
standard is used to disadvantage competitors.\129\
---------------------------------------------------------------------------

    \129\ APPA Comments at 2-3.
---------------------------------------------------------------------------

Discussion
    We propose to adopt the standards (6.1, 6.2, and 6.3) and guide 
(6.4) on this subject recommended by CPWG/How Group in their September 
15, 1998 submittal. The approach which has been in use permitted 
flexibility in the use of optional fields, but has resulted in 
inconsistent path naming. The recommended standards and guides, which 
use the previously optional fields to specify control area codes for 
Point of Receipt and Point of Delivery, will provide consistency in 
path naming, and improve efficiency in the reservation process. There 
were no commenters objecting to the recommended standards and guides. 
We acknowledge APPA's concerns about the potential for abuse, and we 
will be responsive to complaints about possible abuses which might 
result from the requirement to specify control areas for POR-POD when 
making transmission reservations.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA),130 requires the 
Commission to describe the impact a proposed rule would have on small 
entities or to certify that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \130\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    The mandatory standards and voluntary best practices guides 
proposed in this NOPR would be applicable to the same entities subject 
to the requirements of the OASIS Final Rule (i.e., public 
utilities).131 As we explained in Order No. 889-A, however, 
under appropriate circumstances the Commission will grant waiver of the 
OASIS Final Rule requirements to small public utilities. We further 
explained that the Commission's waiver policy follows the SBA 
definition of small electric utility 132 and that 34 small 
entities had received waivers of the requirement to establish and 
maintain an OASIS and five small entities had received waivers of the 
OASIS Standards of Conduct requirements.133 These decisions 
show that the Commission carefully evaluates the effect of the OASIS 
Final Rule on small electric utilities and is granting waivers where 
appropriate, thus mitigating the effect of that rule on small public 
and non-public utilities.
---------------------------------------------------------------------------

    \131\ In the OASIS Final Rule, we noted that the entities that 
would have to comply with the OASIS Final Rule are public utilities. 
See Order No. 889-A, FERC Stats. & Regs para. 31,049 at 30,578.
    \132\ See 5 U.S.C. Secs. 601(3) and 601(6) and 15 U.S.C. 
Sec. 632(a). The RFA defines a small entity as one that is 
independently owned and not dominant in its field of operation. See 
15 U.S.C. Sec. 632(a). The Small Business Administration defines a 
small electric utility as one that disposes of 4 million MWh or less 
of electric energy in a given year. See 13 CFR 121.601 (Major Group 
49--Electric, Gas and Sanitary Services).
    In the Open Access Final Rule, we concluded that, under these 
definitions, the Open Access Final Rule and the OASIS Final Rule 
would not have a significant economic impact on a substantial number 
of small entities. We reaffirmed that conclusion in Order Nos. 888-A 
and 889-A.
    \133\ See Order No. 889-A, FERC Stats. & Regs. para. 31,049 at 
30,578.
---------------------------------------------------------------------------

    The rules here proposed would merely increase the uniformity of the 
business practices public utilities would have to adopt in any event to 
comply with Order Nos. 888 and 889 and other Commission orders. This 
being the case, under section 605(b) of RFA, the Commission hereby 
certifies that this proposed rule will not, if promulgated, have a 
significant economic impact on a substantial number of small entities 
within the meaning of RFA. Accordingly, no regulatory flexibility 
analysis is required pursuant to section 603 of RFA.

V. Environmental Statement

    Commission regulations require that an environmental assessment or 
an environmental impact statement be prepared for a Commission action 
that may have a significant effect on the

[[Page 5230]]

human environment.134 In the Commission's view, the 
environmental impact of this proposal is negligible. Transmission 
providers necessarily already follow business practices in conducting 
their OASIS transactions. This proposal merely adds some uniformity to 
the process. Accordingly, we find that this NOPR does not propose any 
action that may have a significant effect on the human environment and 
that no environmental impact statement is required.
---------------------------------------------------------------------------

    \134\ Regulations Implementing National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987); 1986-90 Regs. 
Preambles FERC Stats. & Regs. para. 30,783 (Dec. 10, 1987) (codified 
at 18 CFR Part 380).
---------------------------------------------------------------------------

VI. Information Collection Statement

    Based on our experience in OASIS implementation over the past four 
years, the Commission refined the estimate of reporting entities 
covered by OASIS regulations. Our latest estimate is that 140 
respondents are required to collect information under the OASIS 
regulations. However, as discussed above, this NOPR does not impose any 
new information collection burdens. Collectively, the OASIS rulemaking 
information collection is covered by FERC-717 as covered by our 
December 1, 1998 proposed information collection and request for 
comments in Docket No. IC99-717-000 as follows:
    Information Collection Statement:
    Title: FERC-717, Open Access Same-time Information Systems and 
Standards of Conduct.
    Action: Proposed Collection.
    OMB Control No: 1902-0173.
    Respondents: Business or other for profit, including small 
business.
    Frequency of Responses: On Occasion.
    Necessity of the information: The Notice of Proposed Rulemaking 
solicits public comments to respond to the proposed issuance of uniform 
business practices for OASIS Phase IA transactions and path name 
conventions, on replacing the Data Dictionary Element 
``ANC__SERVICE__TYPE'' in the OASIS Standards and Communication 
Protocols Document (Version 1.3) with the term ``AS__TYPE,'' and on 
clarifying the terms ``DISPLACED,'' ``SUPERSEDED,'' and ``REFUSED'' in 
the Data Dictionary Element and Sec. 4.2.10.2. These requirements would 
support arrangements made for wholesale sales and purchases for third 
parties. Public utilities and/or their agents would operate under more 
uniform business practices. This would improve the operation of OASIS 
sites.
    The Office of Management and Budget's (OMB) regulations,\135\ 
require OMB to approve certain information collection requirements 
imposed by agency rule. The information collection requirements in the 
proposed rule will be reported directly to transmission users and will 
be subject to subsequent audit by the Commission. The distribution of 
these data will help the Commission carry out its responsibilities 
under Part II of the FPA.
---------------------------------------------------------------------------

    \135\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    The Commission is submitting notification of this proposed rule to 
OMB. Persons wishing to comment on the collections of information 
proposed by this NOPR should direct their comments to the Desk Officer 
for FERC, OMB, Room 10202 NEOB, Washington, D.C. 20503, phone 202-395-
3087, facsimile 202-395-7285. Comments must be filed with OMB 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: Mr. David P. Boergers, 
Secretary, Federal Energy Regulatory Commission, Room 1A, 888 First 
Street, N.E., Washington, D.C. 20426. For further information on the 
reporting requirements, contact Michael Miller at (202) 208-1415.

VII. Public Comment Procedure

    This NOPR gives notice of our intention to issue a set of uniform 
business practices implementing the Commission's policies on 
transmission service price negotiation and improving interactions 
between transmission providers and customers over Open Access Same-Time 
Information System (OASIS) nodes. In addition, we propose a consistent 
naming convention for path names, propose to replace the Data 
Dictionary Element ``ANC__SERVICE__TYPE'' in the OASIS Standards and 
Communication Protocols Document (Version 1.3) with the term 
``AS__TYPE,'' and propose to clarify the terms ``DISPLACED,'' 
``SUPERSEDED,'' and ``REFUSED'' in the Data Dictionary Element and in 
section 4.2.10.2. of the S&CP Document.
    Prior to taking final action on this proposed rulemaking, we are 
inviting comments from interested persons on the proposals discussed in 
this preamble and compiled in Attachment A to this NOPR. Additionally, 
the Commission specifically invites comments on whether any of the best 
practice guides proposed in this NOPR should instead be issued as 
mandatory standards and whether any mandatory standards proposed in 
this NOPR should instead be issued as best practice guides. The 
Commission invites interested persons to submit written comments on the 
matters and issues proposed in this notice to be adopted, including any 
related matters or alternative proposals that commenters may wish to 
discuss.
    The original and 14 copies of such comments must be received by the 
Commission by [insert date 60 days after publication in the Federal 
Register]. Comments should be submitted to the Office of the Secretary, 
Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington D.C. 20426 and should refer to Docket No. RM95-9-003.
    In addition to filing paper copies, the Commission encourages the 
filing of comments either on computer diskette or via Internet E-Mail. 
Comments may be filed in the following formats: WordPerfect 6.1 or 
lower version, MS Word Office 97 or lower version, or ASCII format.
    For diskette filing, include the following information on the 
diskette label: Docket No. RM95-9-003; the name of the filing entity; 
the software and version used to create the file; and the name and 
telephone number of a contact person.
    For Internet E-Mail submittal, comments should be submitted to 
``[email protected]'' in the following format. On the subject 
line, specify Docket No. RM95-9-003. In the body of the E-Mail message, 
include the name of the filing entity; the software and version used to 
create the file, and the name and telephone number of the contact 
person. Attach the comment to the E-Mail in one of the formats 
specified above. The Commission will send an automatic acknowledgment 
to the sender's E-Mail address upon receipt. Questions on electronic 
filing should be directed to Brooks Carter at 202-501-8145, E-Mail 
address [email protected].
    Commenters should take note that, until the Commission amends its 
rules and regulations, the paper copy of the filing remains the 
official copy of the document submitted. Therefore, any discrepancies 
between the paper filing and the electronic filing or the diskette will 
be resolved by reference to the paper filing.
    All written comments will be placed in the Commission's public 
files and will be available for inspection in the Commission's Public 
Reference room at 888 First Street, N.E., Washington D.C. 20426, during 
regular business hours. Additionally, comments may be viewed and 
printed remotely via the Internet through FERC's Home Page using the 
RIMS link or the Energy Information

[[Page 5231]]

Online icon. User assistance is available at 202-208-2222, or by E-Mail 
to [email protected].

List of Subjects in 18 CFR Part 37

    Conflict of interests, Electric power plants, Electric utilities, 
Reporting and recordkeeping requirements.

    By direction of the Commission.
David P. Boergers,
Secretary.

    In consideration of the foregoing, the Commission proposes to adopt 
the attached ``Business Practice Standards and Guides for Open Access 
Same-time Information System (OASIS) Transactions'' and to amend Part 
37 in Chapter I, Title 18, Code of Federal Regulations, as set forth 
below.

PART 37--OPEN ACCESS SAME-TIME INFORMATION SYSTEMS AND STANDARDS OF 
CONDUCT FOR PUBLIC UTILITIES

    1. The authority citation for Part 37 continues to read as follows:

    Authority: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7101-7352.

    2. Section 37.5 is amended by revising paragraph (b) to read as 
follows:


Sec. 37.5  Obligations of Transmission Providers and Responsible 
Parties.

* * * * *
    (b) A Responsible Party must: (1) Provide access to an OASIS 
providing standardized information relevant to the availability of 
transmission capacity, prices, and other information (as described in 
this part) pertaining to the transmission system for which it is 
responsible;
    (2) Operate the OASIS in compliance with the standardized 
procedures and protocols found in OASIS Standards and Communication 
Protocols, which can be obtained from the Public Reference and Files 
Maintenance Branch, Room 2A, Federal Energy Regulatory Commission, 888 
First Street NE, Washington, DC 20426; and
    (3) Operate the OASIS in compliance with the Business Practice 
Standards and Guides for Open Access Same-time Information System 
(OASIS) Transactions, which can be obtained at the same address as 
provided in paragraph (b)(2) of this section.
* * * * *
[Note: This attachment will not appear in the Code of Federal 
Regulations.]

Attachment A--Federal Energy Regulatory Commission, business 
practice standards and guides for open access same-time information 
system (oasis) transactions draft, version 1.0 (January 27, 1999)

Table of Contents

Section 1--Introduction
    1.1  Business Practice Standards vs. Guides
Section 2--Standard Terminology for Transmission and Ancillary 
Services
    2.1  Attribute Values Defining the Period of Service
    2.2  Attribute Values Defining Service Class
    2.3  Attribute Values Defining Service Types
    2.4  Intentionally left Blank
    2.5  Other Service Attribute Values
Section 3--OASIS Registration Procedures
    3.1  Entity Registration
    3.2  Process to Register Non-Standard Service Attribute Values
    3.3  Registration of Points of Receipt and Delivery
Section 4--On-line Negotiation and Confirmation Process
    4.1  On-line Price Negotiation in Short-term Markets
    4.2  Phase IA Negotiation Process State Transition Diagram
    4.3  Negotiations--Without Competing Bids
    4.4  Negotiations--With Competing Bids for Constrained Resources
Section 5--Procurement of Ancillary and Other Services
    5.1  Introduction
    5.2  Transmission Provider Requirements
    5.3  Transmission Customer Requirements
Section 6--Pathnaming Standards
    6.1  Introduction
    6.2  Transmission Provider Requirements

Section 1--Introduction

    This document contains business practice standards and guides 
designed to implement the Commission's policy related to on-line 
price negotiation and to improve the commercial operation of the 
Open Access Same-Time Information System (OASIS).

Section 1.1 Business Practice Standards and Guides

    This document distinguishes between OASIS business practice 
standards and ``best practices'' guides. The standards are adopted 
as mandatory requirements, while the guides are offered as voluntary 
best practices. However, in the event that a transmission provider 
elects to follow the voluntary practice guides, it must do so on a 
uniform, non-discriminatory basis.

Section 2--Standard Terminology for Transmission and Ancillary Services

Section 2.1 Attribute Values Defining the Period of Service

    The data templates of the Phase IA Standards & Communication 
Protocols (S&CP) Document have been developed with the use of 
standard service attributes in mind. What the Phase IA S&CP Document 
does not offer are specific definitions for each attribute value. 
This section offers standards and guides for these service attribute 
definitions to be used in conjunction with the Phase IA data 
templates.
    ``Fixed'' services are associated with transmission services 
whose periods align with calendar periods such as a day, week, or 
month. ``Sliding'' services are fixed in duration, such as a week or 
month, but the start and stop time may slide. For example a 
``sliding'' week could start on Tuesday and end on the following 
Monday. ``Extended'' allows for services in which the start time may 
``slide'' and also the duration may be longer than a standard 
length. For example an ``extended'' week of service could be nine 
consecutive days. Various transmission service offerings using these 
terms are defined in Standards 2.1.1 through 2.1.13 below.
    Table 1-1 identifies the definitions that are proposed as 
standard terminology in OASIS Phase IA for the attributes 
SERVICE__INCREMENT (Hourly, Daily, Weekly, Monthly, and Yearly) and 
WINDOW (Fixed, Sliding, and Extended). A definition is required for 
each combination of SERVICE__INCREMENT and WINDOW, except Hourly 
Sliding and Hourly Extended, which, at the present, are not 
sufficiently common in the market to require standard definitions.

                     Table 1-1.--Standard Service Attribute Definitions Required in Phase IA
----------------------------------------------------------------------------------------------------------------
                                                                    Fixed           Sliding         Extended*
----------------------------------------------------------------------------------------------------------------
Hourly.......................................................               X              N/A              N/A
Daily........................................................               X                X                X
Weekly.......................................................               X                X                X
Monthly......................................................               X                X                X
Yearly.......................................................               X                X               X
----------------------------------------------------------------------------------------------------------------
* Included in the Phase IA S&CP Data Dictionary, Version 1.3, issued September 29, 1998.

    The existence of a definition in this table does not imply the 
services must be offered by a Transmission Provider. Requirements as 
to which services must be offered are defined by regulation and 
tariffs.

[[Page 5232]]

    Each definition assumes a single time zone specified by the 
Transmission Provider. It is recognized that daylight time switches 
must be accommodated in practice, but they have been omitted in the 
definitions for the purpose of simplicity.
    Standard 2.1: A Transmission Provider shall use the values and 
definitions below for the attributes Service__Increment and Window 
for all transmission services offered on OASIS, or shall post 
alternative attribute values and associated definitions on the OASIS 
Home Page at www.tsin.com, or shall use existing attribute values 
and definitions posted by other Transmission Providers. (See Section 
3 for registration requirements.)
    Standard 2.1.1: Fixed Hourly--The service starts at the 
beginning of a clock hour and stops at the end of a clock hour.
    Standard 2.1.2: Fixed Daily--The service starts at 00:00 and 
stops at 24:00 of the same calendar date (same as 00:00 of the next 
consecutive calendar date).
    Standard 2.1.3: Fixed Weekly--The service starts at 00:00 on 
Monday and stops at 24:00 of the following Sunday (same as 00:00 of 
the following Monday).
    Standard 2.1.4: Fixed Monthly--The service starts at 00:00 on 
the first date of a calendar month and stops at 24:00 on the last 
date of the same calendar month (same as 00:00 of the first date of 
the next consecutive month).
    Standard 2.1.5: Fixed Yearly--The service starts at 00:00 on the 
first date of a calendar year and ends at 24:00 on the last date of 
the same calendar year (same as 00:00 of the first date of the next 
consecutive year).
    Standard 2.1.6: Sliding Daily--The service starts at the 
beginning of any hour of the day and stops exactly 24 hours later at 
the same time on the next day.
    Standard 2.1.7: Sliding Weekly--The service starts at 00:00 of 
any date and stops exactly 168 hours later at 00:00 on the same day 
of the next week.
    Standard 2.1.8: Sliding Monthly--The service starts at 00:00 of 
any date and stops at 00:00 on the same date of the next month (28-
31 days later). If there is no corresponding date in the following 
month, the service stops at 24:00 on the last day of the next month.
    For example: Sliding Monthly starting at 00:00 on January 30 
would stop at 24:00 on February 28 (same as 00:00 March 1).
    Standard 2.1.9: Sliding Yearly--The service starts at 00:00 of 
any date and stops at 00:00 on the same date of the following year. 
If there is no corresponding date in the following year, the service 
stops at 24:00 on the last day of the same month in the following 
year.
    For example Sliding Yearly service starting on February 29 would 
stop on February 28 of the following year.
    Standard 2.1.10: Extended Daily--The service starts at any hour 
of a day and stops more than 24 hours later and less than 48 hours 
later.
    Standard 2.1.11: Extended Weekly--The service starts at 00:00 of 
any date and stops at 00:00 more than one week later, but less than 
two weeks later.
    Standard 2.1.12: Extended Monthly--The service starts at 00:00 
of any date and stops at 00:00 more than one month later but less 
than two months later.
    Standard 2.1.13: Extended Yearly--The service starts at 00:00 of 
any date and stops at 00:00 more than one calendar year later but 
less than two calendar years later.

Section 2.2 Attribute Values Defining Service Class

    Standard 2.2: A Transmission Provider shall use the values and 
definitions below to describe the service CLASS for transmission 
services offered on OASIS, or shall post alternative attribute 
values and associated definitions on the OASIS Home Page at 
www.tsin.com, or shall use the attribute values and definitions 
posted by other Providers. (See Section 3 for registration 
requirements.)
    Standard 2.2.1: Firm--Transmission service that always has 
priority over NON-FIRM transmission service and includes Native Load 
Customers, Network Customers, and any transmission service not 
classified as non-firm in accordance with the definitions in the pro 
forma tariff.
    Standard 2.2.2: Non-Firm--Transmission service that is reserved 
and/or scheduled on an as-available basis and is subject to 
curtailment or interruption at a lesser priority compared to Firm 
transmission service, Native Load Customers, and Network Customers 
in accordance with the definitions in the pro forma tariff.

Section 2.3 Attribute Values Defining Service Types

    Standard 2.3: A Transmission Provider shall use the values and 
definitions below to describe the service TYPE for transmission 
services offered on OASIS, or shall post alternative attribute 
values and associated definitions on the OASIS Home Page at 
www.tsin.com, or shall use the attribute values and definitions 
posted by other Providers. (See Section 3 for registration 
requirements.)
    Standard 2.3.1: Point-to-point--Transmission service that is 
reserved and/or scheduled between specified Points of Receipt and 
Delivery pursuant to Part II of the pro forma tariff and in 
accordance with the definitions in the pro forma tariff.
    Standard 2.3.2: Network--Network Integration Transmission 
Service that is provided to serve a Network Customer load pursuant 
to Part III of the pro forma tariff and in accordance with the 
definitions in the pro forma tariff.

Section 2.4

    Reserved for Future Use.

Section 2.5 Other Service Attribute Values

    The Commission has defined six ancillary services in Order No. 
888. Other services may be offered pursuant to filed tariffs.
    Standard 2.5: A Transmission Provider shall use the definitions 
below to describe the AS__TYPEs offered on OASIS, or shall post 
alternative attribute values and associated definitions on the OASIS 
Home Page at www.tsin.com, or shall use attribute values and 
definitions posted by another Provider. (See Section 3 for 
registration requirements.)

FERC Ancillary Services Definitions

    Standard 2.5.1: Scheduling, System Control and Dispatch Service 
(SC)--is necessary to the provision of basic transmission service 
within every control area. This service can be provided only by the 
operator of the control area in which the transmission facilities 
used are located. This is because the service is to schedule the 
movement of power through, out of, within, or into the control area. 
This service also includes the dispatch of generating resources to 
maintain generation/load balance and maintain security during the 
transaction and in accordance with section 3.1 (and Schedule 1) of 
the pro forma tariff.
    Standard 2.5.2: Reactive Supply and Voltage Control from 
Generation Sources Service (RV)--is the provision of reactive power 
and voltage control by generating facilities under the control of 
the control area operator. This service is necessary to the 
provision of basic transmission service within every control area 
and in accordance with section 3.2 (and Schedule 2) of the pro forma 
tariff.
    Standard 2.5.3: Regulation and Frequency Response Service (RF)--
is provided for transmission within or into the transmission 
provider's control area to serve load in the area. Customers may be 
able to satisfy the regulation service obligation by providing 
generation with automatic generation control capabilities to the 
control area in which the load resides and in accordance with 
section 3.3 (and Schedule 3) of the pro forma tariff.
    Standard 2.5.4: Energy Imbalance Service (EI)--is the service 
for transmission within and into the transmission provider's control 
area to serve load in the area. Energy imbalance represents the 
deviation between the scheduled and actual delivery of energy to a 
load in the local control area over a single hour and in accordance 
with section 3.4 (and Schedule 4) of the pro forma tariff.
    Standard 2.5.5: Operating Reserve-Spinning Reserve Service 
(SP)--is provided by generating units that are on-line and loaded at 
less than maximum output. They are available to serve load 
immediately in an unexpected contingency, such as an unplanned 
outage of a generating unit and in accordance with section 3.5 (and 
Schedule 5) of the pro forma tariff.
    Standard 2.5.6: Operating Reserve-Supplemental Reserve Service 
(SU)--is generating capacity that can be used to respond to 
contingency situations. Supplemental reserve, is not available 
instantaneously, but rather within a short period (usually ten 
minutes). It is provided by generating units that are on-line but 
unloaded, by quick-start generation, and by customer interrupted 
load and in accordance with section 3.6 (and Schedule 6) of the pro 
forma tariff.

Other Service Definitions

    Other services may be offered to Transmission Customers through 
individual filed tariffs. Examples of other services that may be 
offered include the Interconnected Operations Services described 
below in Guides 2.5.7, 2.5.8, and 2.5.9. Ancillary service 
definitions may be offered pursuant to an individual transmission 
provider's specific tariff filings.

[[Page 5233]]

    Guide 2.5.7: Dynamic Transfer (DT)--is the provision of the 
real-time monitoring, telemetering, computer software, hardware, 
communications, engineering, and administration required to 
electronically move all or a portion of the real energy services 
associated with a generator or load out of its Host Control Area 
into a different Electronic Control Area.
    Guide 2.5.8: Real Power Transmission Losses (TL)--is the 
provision of capacity and energy to replace energy losses associated 
with transmission service on the Transmission Provider's system.
    Guide 2.5.9: System Black Start Capability (BS)--is the 
provision of generating equipment that, following a system blackout, 
is able to start without an outside electrical supply. Furthermore, 
Black Start Capability is capable of being synchronized to the 
transmission system such that it can provide a startup supply source 
for other system capacity that can then be likewise synchronized to 
the transmission system to supply load as part of a process of re-
energizing the transmission system.

Section 3--OASIS Registration Procedures

Section 3.1  Entity Registration

    Operation of OASIS requires unambiguous identification of 
parties.
    Standard 3.1: All entities or persons using OASIS shall register 
the identity of their organization (including DUNS number) or person 
at the OASIS Home Page at www.tsin.com. Registration shall be 
completed prior to the commencement of Phase IA and renewed annually 
and whenever changes in identification occur and thereafter. An 
entity or person not complying with this requirement may be denied 
access by a provider to that provider's OASIS node.
    The registration requirement applies to any entity logging onto 
OASIS for the purpose of using or updating information, including 
Transmission Providers, Transmission Customers, Observers, Control 
Areas, Security Coordinators, and Independent System Operators.

Section 3.2  Process to Register Non-Standard Service Attribute 
Values

    Section 2 of the OASIS business practice standards and guides 
addresses the use of standard terminology in defining services on 
OASIS. These standard definitions for service attribute values will 
be posted publicly on the OASIS Home Page at www.tsin.com and may be 
used by all Providers to offer transmission and ancillary services 
on OASIS. If the Provider determines that the standard definitions 
are not applicable, the Provider may register new attribute values 
and definitions on the OASIS Home Page. Any Provider may use the 
attribute values and definitions posted by another Provider.
    Standard 3.2: Providers of transmission and ancillary services 
shall use only attribute values and definitions that have been 
registered on the OASIS Home Page at www.tsin.com for all 
transmission and ancillary services offered on their OASIS.
    Guide 3.3: Providers of transmission and ancillary services 
should endeavor to use on their OASIS nodes attribute values and 
definitions that have been posted by other Providers on the OASIS 
Home Page at www.tsin.com whenever possible.

Section 3.3  Registration of Points of Receipt and Delivery

    In order to improve coordination of path naming and to enhance 
the identification of commercially available connection points 
between Providers and regions, the business practice for Phase IA 
OASIS requires that:
     Transmission Providers register at the OASIS Home Page 
at www.tsin.com, all service points (Points of Receipt and Delivery) 
for which transmission service is available over the OASIS.
     Each Provider would then indicate on its OASIS node, 
for each Path posted on its OASIS node, the Points of Receipt and 
Delivery to which each Path is connected.
    A Transmission Provider is not required to register specific 
generating stations as Points of Receipt, unless they were available 
as service points for the purposes of reserving transmission service 
on OASIS. The requirement also does not include registration of 
regional flowgates, unless they are service points for the purposes 
of reserving transmission on OASIS.
    Standard 3.4: A Transmission Provider shall register and 
thereafter maintain on the OASIS Home Page at www.tsin.com all 
Points of Receipt and Delivery to and from which a Transmission 
Customer may reserve and schedule transmission service.
    Standard 3.5: For each reservable Path posted on their OASIS 
nodes, Transmission Providers shall indicate the available Point(s) 
of Receipt and Delivery for that Path. These Points of Receipt and 
Delivery shall be from the list registered on the OASIS Home Page at 
www.tsin.com.
    Guide 3.6: When two or more Transmission Providers share common 
Points of Receipt or Delivery, or when a Path connects Points of 
Receipt and Delivery in neighboring systems, the Transmission 
Providers owning and/or operating those facilities should apply 
consistent names for those connecting paths or common paths on the 
OASIS.

Section 4--On-Line Negotiation and Confirmation Process

Section 4.1  On-Line Price Negotiation in Short-Term Markets

    Standard 4.1: Consistent with FERC policy and regulations, all 
reservations and price negotiations should be conducted on OASIS.
    Guide 4.2: Reserved.
    Guide 4.3: Reserved.

Section 4.2  Phase IA Negotiation Process State Transition Diagram

    The Phase IA S&CP Document provides a process state diagram to 
define the Customer and Provider interactions for negotiating 
transmission service. This diagram defines allowable steps in the 
reservation request, negotiation, approval and confirmation.
    Guide 4.4: The state diagram appearing in Exhibit 4-1 in Section 
4.2.10.2 of the Version 1.3 of the S&CP Document constitutes a 
recommended business practice in OASIS Phase IA.
    Guide 4.5: The definitions in Section 4.2.10.2 of the Version 
1.3 of the S&CP Document (status values) should be applied to the 
process states in OASIS Phase IA.
    Table 4-1--Reserved.

Section 4.3  Negotiations--Without Competing Bids

    The following practices are defined in order to enhance 
consistency of the reservation process across OASIS Phase IA nodes.
    Guide 4.6: A Transmission Provider/Seller shall respond to a 
Customer's service request, consistent with filed tariffs, within 
the ``Provider Response Time Limit'' defined in Table 4-2 
``Reservation Timing Requirements''. The time limit is measured from 
the time the request is QUEUED. A Provider may respond by setting 
the state of the reservation request to one of the following:

 INVALID
 DECLINED
 REFUSED
 COUNTEROFFER
 ACCEPTED
 STUDY (when the tariff allows), leading to REFUSED, 
COUNTEROFFER, or ACCEPTED

    Guide 4.7: Prior to setting a request to ACCEPTED, COUNTEROFFER, 
or REFUSED a Provider shall evaluate the appropriate resources and 
ascertain that the requested transfer capability is (or is not) 
available.
    Guide 4.8: For any request that is REFUSED or INVALID, the 
Transmission Provider should indicate in the COMMENTS field the 
reason the request was refused or invalid.
    Guide 4.9: The Customer may change a request to WITHDRAWN at any 
time prior to it being CONFIRMED.
    Guide 4.10: From ACCEPTED or COUNTEROFFER, a Customer may change 
the status to CONFIRMED, WITHDRAWN, or REBID. The Customer has the 
amount of time designated as ``Customer Confirmation Time Limit'' in 
Table 4-2 ``Reservation Timing Requirements'' to change the state of 
the request to CONFIRMED. The Customer time limit is measured from 
the first time the request is moved to ACCEPTED or COUNTEROFFER, and 
is not reset with subsequent iterations of negotiation.
    Guide 4.11: After expiration of the ``Customer Confirmation Time 
Limit,'' specified in Table 4-2 ``Reservation Timing Requirements'', 
the Provider has a right to move the request to the RETRACTED state.
    Guide 4.12: Should the Customer elect to respond to a Provider's 
COUNTEROFFER by moving a reservation request to REBID, the Provider 
shall respond by taking the request to a DECLINED, ACCEPTED, or 
COUNTEROFFER state within the ``Provider Counter Time Limit,'' 
specified in Table 4-2 ``Reservation Timing Requirements''. The 
Provider response time is measured from the most recent REBID time.
    Guide 4.13: The following timing requirements should apply to 
all reservation requests:

[[Page 5234]]



                                                        Table 4-2.--Reservation Timing Guidelines
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Customer
                                                                                                                 confirmation time     Provider counter
                    Class                        Service increment   Time QUEUED prior to  Provider evaluation      limit after        time limit after
                                                                             start            time limit \1\        ACCEPTED or           REBID \3\
                                                                                                                  COUNTEROFFER \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-Firm.....................................  Hourly..............  <1 hour.............  Best effort........  5 minutes..........  5 minutes
Non-Firm.....................................  Hourly..............  >1 hour.............  30 minutes.........  5 minutes..........  5 minutes
Non-Firm.....................................  Daily...............  N/A.................  30 minutes.........  2 hours............  10 minutes
Non-Firm.....................................  Weekly..............  N/A.................  4 hours............  24 hours...........  4 hours
Non-Firm.....................................  Monthly.............  N/A.................  2 days.............  24 hours...........  4 hours
Firm.........................................  Daily...............  <24 hours...........  Best effort........  2 hours............  30 minutes
Firm.........................................  Daily...............  N/A.................  30 days \4\........  24 hours...........  4 hours
Firm.........................................  Weekly..............  N/A.................  30 days \4\........  48 hours...........  4 hours
Firm.........................................  Monthly.............  N/A.................  30 days \4\........  4 days.............  4 hours
Firm.........................................  Yearly..............  N/A.................  30 days............  15 days............  4 hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Consistent with regulations and filed tariffs, measurement starts at the time the request is QUEUED.
\2\ Measurement starts at the time the request is first moved to either ACCEPTED or COUNTEROFFER. The time limit does not reset on subsequent changes of
  state.
\3\ Measurement starts at the time the Transmission Customer changes the state to REBID. The measurement resets each time the request is changed to
  REBID.
\4\ Subject to expedited time requirements of Section 17.1 of the pro forma tariff. Transmission Providers should make best efforts to respond within 72
  hours, or prior to the scheduling deadline, whichever is earlier, to a request for Daily Firm Service received during period 2-30 days ahead of the
  service start time.

Section 4.4  Negotiations--With Competing Bids for Constrained 
Resources

    Competing bids exist when multiple requests cannot be 
accommodated due to a lack of available transmission capacity. One 
general rule is that OASIS requests should be evaluated and granted 
priority on a first-come-first-served basis established by OASIS 
QUEUED time. Thus, the first to request service should get it, all 
else being equal.
    Exceptions to this first-come-first-served basis occur when 
there are competing requests for limited resources and the requests 
have different priorities established by FERC regulations and filed 
tariffs. Prior to the introduction of price negotiations, the 
attribute values that have served as a basis for determining 
priority include:
     Type (Network, Point-to-point)
     Class (Firm, Non-Firm)
     Increment (Hourly, Daily, Weekly, Monthly, Yearly)
     Duration (the amount of time between the Start Date and 
the Stop Date)
     Amount (the MW amount)
    Under a negotiation model, price can also be used as an 
attribute for determining priority. The negotiation process 
increases the possibility that a Provider will be evaluating 
multiple requests that cannot all be accommodated due to limited 
resources. In this scenario, it is possible that an unconfirmed 
request with an earlier QUEUED time could be preempted (SUPERSEDED). 
For this to occur, the subsequent request would be of higher 
priority or of greater price.
    Guide 4.14: Consistent with regulations and filed tariffs, the 
following are recommended relative priorities of Service Request 
Tiers.\1\ Specific exceptions may exist in accordance with filed 
tariffs. The priorities refer only to negotiation of service and do 
not refer to curtailment priority.

    \1\ Note: The term Tier is introduced to avoid confusion with 
existing terms such as TS__CLASS.
---------------------------------------------------------------------------

4.4.1.  Service Request Tier 1: Native load, Network, or Long-term 
Firm
4.4.2.  Service Request Tier 2: Short-term Firm
4.4.3.  Service Request Tier 3: Network on Non-designated Resources
4.4.4.  Service Request Tier 4: Non-firm
4.4.5.  Service Request Tier 5: Service over secondary receipt and 
delivery points

    Guide 4.15: Consistent with regulations and filed tariffs, 
reservation requests should be handled in a first-come-first-served 
order based on QUEUE__TIME.
    Guide 4.16: Consistent with regulations and filed tariffs, Table 
4-3 describes the relative priorities of competing service requests 
and rules for offering right-of-first-refusal. While the table 
indicates the relative priorities of two competing requests, it also 
is intended to be applied in the more general case of more than two 
competing requests.

                            Table 4-3.--Priorities for Competing Reservation Requests
----------------------------------------------------------------------------------------------------------------
             Request 1                          Is preempted by request 2               Right of first refusal
----------------------------------------------------------------------------------------------------------------
Tier 1: Long-term Firm, Native       N/A--Not preempted by a subsequent request.....  N/A.
 Load, and Network Firm.
Tier 2: Short-term Firm............  Tier 1: Long-term Firm, Native Load, and         No.
                                      Network Firm), while Request 1 is conditional.
                                      Once Request 1 is unconditional, it may not be
                                      preempted.
Tier 2: Short-term Firm............  Tier 2: Short-term Firm of longer term           Yes, while Request 1 is
                                      (duration) \2\, while Request 1 is               conditional. Once Request
                                      conditional. Once Request 1 is unconditional,    1 is unconditional, it
                                      it may not be preempted.                         may not be preempted and
                                                                                       right of first refusal is
                                                                                       not applicable.
Tier 3: Network Service From Non-    Tiers 1 and 2: All Firm (including Network)....  No.
 Designated Resources.
Tier 4: All Non-Firm PTP...........  Tiers 1 and 2: All Firm (including Network)....  No.
Tier 4: All Non-Firm PTP...........  Tier 3: Network Service from Non-Designated      No.
                                      Resources.
Tier 4: All Non-Firm PTP...........  Tier 4: Non-firm PTP of a longer term            Yes.
                                      (duration) 2. Except in the last hour prior to
                                      start (see Standard 4.23).

[[Page 5235]]

 
Tier 4: All Non-Firm PTP...........  Tier 4: Non-firm PTP of equal term (duration)    No.
                                      \2\ and higher price, when Request 1 is still
                                      unconfirmed and Request 2 is received pre-
                                      confirmed. A confirmed non-firm PTP may not be
                                      preempted for another non-firm request of
                                      equal duration. (See Standards 4.22 and 4.25.).
Tier 5: PTP Service over secondary   Tier 5 can be preempted by Tiers 1 through 4...  No.
 receipt and delivery points.
----------------------------------------------------------------------------------------------------------------
\2\ Longer duration, in addition to being higher SERVICE__INCREMENT (i.e., WEEKLY has priority over DAILY), also
  may mean more multiples of the same SERVICE__INCREMENT (i.e., 3 Days may have priority over 2 Days).

    Guide 4.17: For a reservation request that is preempted, the 
Transmission Provider should indicate the Assignment Reference 
Number of the reservation that preempted the reservation request.
    Guide 4.18: Given competing requests for a limited resource and 
a right-of-first-refusal is not required to be offered, the Provider 
may immediately move requests in the CONFIRMED state to DISPLACED, 
or from an ACCEPTED or COUNTEROFFER state to SUPERSEDED, if the 
competing request is of higher priority, based on the rules 
represented in Table 4-3. These state changes require dynamic 
notification to the Customer if the Customer has requested dynamic 
notification on OASIS.
    Guide 4.19: In those cases where right-of-first-refusal is 
required to be offered, the Provider shall notify the Customer, 
through the use of a COUNTEROFFER, of the opportunity to match the 
subsequent offer.
    Guide 4.20: A Customer who has been extended a right-of-first-
refusal should have a confirmation time limit equal to the lesser of 
a) the Customer Confirmation Time Limit in Table 4-2 or b) 24 hours.
    Standard 4.21: A Transmission Provider shall apply all rights-
of-first-refusal in a non-discriminatory and open manner for all 
Customers.
    Standard 4.22: Once a non-firm PTP request has been confirmed, 
it shall not be displaced by a subsequent non-firm PTP request of 
equal duration and higher price.
    Standard 4.23: A confirmed, non-firm PTP reservation for the 
next hour shall not be displaced within one hour of the start of the 
reservation by a subsequent non-firm PTP reservation request of 
longer duration.
    Guide 4.24: A Transmission Provider should honor any reservation 
request submitted for an unconstrained Path if the Customer's bid 
price is equal to or greater than the Provider's posted offer price 
at the time the request was queued, even if later requests are 
submitted at a higher price. This guide applies even when the first 
request is still unconfirmed, unless the Customer Confirmation Time 
Limit has expired for the first request.
    Guide 4.25: Once an offer to provide non-firm PTP transmission 
service at a given price is extended to a Customer by the Provider, 
and while this first request is still unconfirmed but within the 
Customer Confirmation Time Limit, the Provider should not preempt or 
otherwise alter the status of that first request on receipt of a 
subsequent request of the same Tier and equal duration at a higher 
price, unless the subsequent request is submitted as pre-confirmed.
    Guide 4.26: If during a negotiation of service (i.e., prior to 
Customer confirmation) a subsequent pre-confirmed request for 
service over the same limited resource of equal duration but higher 
price is received, the Provider must COUNTEROFFER the price of 
service on the prior COUNTEROFFER or ACCEPTED price to match the 
competing offer, in order to give the first Customer an opportunity 
to match the offer. This practice must be implemented in a non-
discriminatory manner.

Section 5--Procurement of Ancillary and Other Services

Section 5.1  Introduction

    Phase IA OASIS data templates allow the coupling of ancillary 
service arrangements with the purchase of transmission service for 
the purpose of simplifying the overall process for Customers. 
Transmission Providers must indicate (consistent with filed 
tariffs), which services are MANDATORY (must be taken from the 
Primary Provider), REQUIRED (must be provided for but may be 
procured from alternative sources), or OPTIONAL (not required as a 
condition of transmission service).
    The Transmission Customer should make known to the Transmission 
Provider at the time of the reservation request certain options 
related to arrangement of ancillary services. The Transmission 
Customer may indicate:
     I will take all the MANDATORY and REQUIRED ancillary 
services from the Primary Provider.
     I will take REQUIRED ancillary services from Third 
Party Seller ``X''.
     I would like to purchase OPTIONAL services.
     I will self provide ancillary services.
     I will arrange for ancillary services in the future 
(prior to scheduling).
    While these interactions are available in the Phase IA S&CP 
Document, there is a need to clarify the associated business 
practices. The standards in Section 5 apply to services defined in 
filed tariffs.

Section 5.2  Transmission Provider Requirements

    Standard 5.1: The Transmission Provider shall designate which 
ancillary services are MANDATORY, REQUIRED, or OPTIONAL for each 
offered transmission service to the extent these requirements can be 
determined in advance of the submittal of a reservation request on a 
specific Path by a Transmission Customer.
    Guide 5.2: A Transmission Provider may modify a Transmission 
Customer's service request to indicate the Transmission Provider as 
the SELLER of any ancillary service, which is MANDATORY, to be taken 
from the Transmission Provider.
    Standard 5.3: For REQUIRED and OPTIONAL services, the 
Transmission Provider shall not select a SELLER of ancillary service 
without the Transmission Customer first selecting that SELLER.
    Guide 5.4: A Transmission Provider may accept a Transmission 
Customer's request for an ancillary service, which is not MANDATORY 
or REQUIRED, but shall indicate to the Transmission Customer at the 
time of acceptance under PROVIDER COMMENTS that the service is not 
MANDATORY or REQUIRED.

Section 5.3  Transmission Customer Requirements

    Guide 5.5: The Transmission Customer should indicate with the 
submittal of a transmission reservation request, the preferred 
options for provision of ancillary services, such as the desire to 
use an alternative resource.
    Guide 5.6: A Transmission Customer may, but is not required to, 
indicate a third party SELLER of ancillary services, if these 
services are arranged by the Transmission Customer off the OASIS and 
if such arrangements are permitted by the Transmission Provider's 
tariff.

Section 6--Pathnaming Standards

Section 6.1 Introduction

    The Data Element Dictionary of the OASIS S&CP Document, Version 
1.3, defines a path name in terms of a 50-character alphanumeric 
string:

RR/TPTP/PATHPATHPATH/OPTIONALFROM-OPTIONALTOTO/SPR

RegionCode/TransmissionProviderCode/PathName/OptionalFrom-To(POR-POD)/
Spare

    This definition leaves it to the Transmission Providers to name 
the paths from their own perspective. The following standards 
provide an unambiguous convention for naming paths and will produce 
more consistent path names.

[[Page 5236]]

Section 6.2 Transmission Provider Requirements

    Standard 6.1: A transmission provider shall use the path naming 
convention defined in the S&CP Data Dictionary for the naming of all 
reservable paths posted on OASIS.
    Standard 6.2: A transmission provider shall use the third field 
in the path name to indicate the sending and receiving control 
areas. The control areas shall be designated using standard NERC 
codes for the control areas, separated by a hyphen. For example, the 
first three fields of the path name will be:

RR/TPTP/CAXX-CAYY/

    Standard 6.3: A transmission provider shall use the fourth field 
of the path name to indicate POR and POD separated by a hyphen. For 
example, a path with a specific POR/POD would be shown as:

RR/TPTP/CAXX-CAYY/PORPORPORPOR-PODPODPODPOD/

    If the POR and POD are designated as control areas, then the 
fourth field may be left blank (as per the example in 6.2).
    Guide 6.4: A transmission provider may designate a sub-level for 
Points of Receipt and Delivery. For example, a customer reserves a 
path to POD AAAA. The ultimate load may be indeterminate at the 
time. Later, the customer schedules energy to flow to a particular 
load that may be designated by the transmission provider as a sub-
level Point of Delivery. This option is necessary to ensure certain 
providers are not precluded from using more specific service points 
by the inclusion of the POR/POD in the path name. All sub-level PORs 
and PODs must be registered as such on www.tsin.com.
    [Note: This attachment will not appear in the Code of Federal 
Regulations.]
    Sections 13.2, 14.2, 14.7, and 17.5 of the pro forma tariff 
provide as follows:
    13.2 Reservation Priority: Long-Term Firm Point-To-Point 
Transmission Service shall be available on a first-come, first-
served basis i.e., in the chronological sequence in which each 
Transmission Customer has reserved service. Reservations for Short-
Term Firm Point-To-Point Transmission Service will be conditional 
based upon the length of the requested transaction. If the 
Transmission System becomes oversubscribed, requests for longer term 
service may preempt requests for shorter term service up to the 
following deadlines; one day before the commencement of daily 
service, one week before the commencement of weekly service, and one 
month before the commencement of monthly service. Before the 
conditional reservation deadline, if available transmission 
capability is insufficient to satisfy all Applications, an Eligible 
Customer with a reservation for shorter term service has the right 
of first refusal to match any longer term reservation before losing 
its reservation priority. A longer term competing request for Short-
Term Firm Point-To-Point Transmission Service will be granted if the 
Eligible Customer with the right of first refusal does not agree to 
match the competing request within 24 hours (or earlier if necessary 
to comply with the scheduling deadlines provided in section 13.8) 
from being notified by the Transmission Provider of a longer-term 
competing request for Short-Term Firm Point-To-Point Transmission 
Service. After the conditional reservation deadline, service will 
commence pursuant to the terms of Part II of the Tariff. Firm Point-
To-Point Transmission Service will always have a reservation 
priority over Non-Firm Point-To-Point Transmission Service under the 
Tariff. All Long-Term Firm Point-To-Point Transmission Service will 
have equal reservation priority with Native Load Customers and 
Network Customers. Reservation priorities for existing firm service 
customers are provided in Section 2.2.
    14.2 Reservation Priority: Non-Firm Point-To-Point Transmission 
Service shall be available from transmission capability in excess of 
that needed for reliable service to Native Load Customers, Network 
Customers and other Transmission Customers taking Long-Term and 
Short-Term Firm Point-To-Point Transmission Service. A higher 
priority will be assigned to reservations with a longer duration of 
service. In the event the Transmission System is constrained, 
competing requests of equal duration will be prioritized based on 
the highest price offered by the Eligible Customer for the 
Transmission Service. Eligible Customers that have already reserved 
shorter term service have the right of first refusal to match any 
longer term reservation before being preempted. A longer-term 
competing request for Non-Firm Point-To-Point Transmission Service 
will be granted if the Eligible Customer with the right of first 
refusal does not agree to match the competing request: (a) 
immediately for hourly Non-Firm Point-To-Point Transmission Service 
after notification by the Transmission Provider; and, (b) within 24 
hours (or earlier if necessary to comply with the scheduling 
deadlines provided in section 14.6) for Non-Firm Point-To-Point 
Transmission Service other than hourly transactions after 
notification by the Transmission Provider. Transmission service for 
Network Customers from resources other than designated Network 
Resources will have a higher priority than any Non-Firm Point-To-
Point Transmission Service. Non-Firm Point-To-Point Transmission 
Service over secondary Point(s) of Receipt and Point(s) of Delivery 
will have the lowest reservation priority under the Tariff.
    14.7 Curtailment or Interruption of Service: The Transmission 
Provider reserves the right to Curtail, in whole or in part, Non-
Firm Point-To-Point Transmission Service provided under the Tariff 
for reliability reasons when, an emergency or other unforeseen 
condition threatens to impair or degrade the reliability of its 
Transmission System. The Transmission Provider reserves the right to 
Interrupt, in whole or in part, Non-Firm Point-To-Point Transmission 
Service provided under the Tariff for economic reasons in order to 
accommodate (1) a request for Firm Transmission Service, (2) a 
request for Non-Firm Point-To-Point Transmission Service of greater 
duration, (3) a request for Non-Firm Point-To-Point Transmission 
Service of equal duration with a higher price, or (4) transmission 
service for Network Customers from non-designated resources. The 
Transmission Provider also will discontinue or reduce service to the 
Transmission Customer to the extent that deliveries for transmission 
are discontinued or reduced at the Point(s) of Receipt. Where 
required, Curtailments or Interruptions will be made on a non-
discriminatory basis to the transaction(s) that effectively relieve 
the constraint, however, Non-Firm Point-To-Point Transmission 
Service shall be subordinate to Firm Transmission Service. If 
multiple transactions require Curtailment or Interruption, to the 
extent practicable and consistent with Good Utility Practice, 
Curtailments or Interruptions will be made to transactions of the 
shortest term (e.g., hourly non-firm transactions will be Curtailed 
or Interrupted before daily non-firm transactions and daily non-firm 
transactions will be Curtailed or Interrupted before weekly non-firm 
transactions). Transmission service for Network Customers from 
resources other than designated Network Resources will have a higher 
priority than any Non-Firm Point-To-Point Transmission Service under 
the Tariff. Non-Firm Point-To-Point Transmission Service over 
secondary Point(s) of Receipt and Point(s) of Delivery will have a 
lower priority than any Non-Firm Point-To-Point Transmission Service 
under the Tariff. The Transmission Provider will provide advance 
notice of Curtailment or Interruption where such notice can be 
provided consistent with Good Utility Practice.
    17.5 Response to a Completed Application: Following receipt of a 
Completed Application for Firm Point-To-Point Transmission Service, 
the Transmission Provider shall make a determination of available 
transmission capability as required in Section 15.2. The 
Transmission Provider shall notify the Eligible Customer as soon as 
practicable, but not later than thirty (30) days after the date of 
receipt of a Completed Application either (i) if it will be able to 
provide service without performing a System Impact Study or (ii) if 
such a study is needed to evaluate the impact of the Application 
pursuant to Section 19.1. Responses by the Transmission Provider 
must be made as soon as practicable to all completed applications 
(including applications by its own merchant function) and the timing 
of such responses must be made on a non-discriminatory basis.
    [Note: This attachment will not appear in the Code of Federal 
Regulations.]

    Section 4.2.10.2 of the S&CP Document provides as follows:
    4.2.10.2 Status Values: The possible STATUS values are:
    QUEUED = initial status assigned by TSIP on receipt of 
``customer services purchase request''.
    INVALID = assigned by TSIP or Provider indicating an invalid 
field in the request, such as improper POR, POD, source, sink, etc. 
(Final state).
    RECEIVED = assigned by Provider or Seller to acknowledge QUEUED 
requests and indicate the service request is being evaluated, 
including for completing the required ancillary services.
    STUDY = assigned by Provider or Seller to indicate some level of 
study is required or being performed to evaluate service request.
    REFUSED = assigned by Provider or Seller to indicate service 
request has been denied

[[Page 5237]]

due to availability of transmission capability. SELLER__COMMENTS 
should be used to communicate details for denial of service. (Final 
state).
    COUNTEROFFER = assigned by Provider or Seller to indicate that a 
new OFFER__PRICE is being proposed.
    REBID = assigned by Customer to indicate that a new BID__PRICE 
is being proposed.
    SUPERSEDED = assigned by Provider or Seller when a request which 
has not yet been confirmed is displaced by another reservation 
request. (Final state).
    ACCEPTED = assigned by Provider or Seller to indicate the 
service request at the designated OFFER__PRICE has been approved/
accepted. If the reservation request was submitted PRECONFIRMED the 
OASIS Node shall immediately set the reservation status to 
CONFIRMED. Depending upon the type of ancillary services required, 
the Seller may or may not require all ancillary service reservations 
to be completed before accepting a request.
    DECLINED = assigned by Provider or Seller to indicate that the 
BID__PRICE is unacceptable and that negotiations are terminated. 
SELLER__COMMENTS should be used to communicate reason for denial of 
service. (Final state).
    CONFIRMED = assigned by Customer in response to Provider or 
Seller posting ``ACCEPTED'' status, to confirm service. Once a 
request has been ``CONFIRMED'', a transmission service reservation 
exists. (Final state, unless overridden by DISPLACED or ANNULLED 
state).
    WITHDRAWN = assigned by Customer at any point in request 
evaluation to withdraw the request from any further action. (Final 
state).
    DISPLACED = assigned by Provider or Seller when a ``CONFIRMED'' 
reservation from a Customer is displaced by a longer term 
reservation and the Customer has exercised right of first refusal 
(i.e., refused to match terms of new request). (Final state).
    ANNULLED = assigned by Provider or Seller when, by mutual 
agreement with the Customer, a confirmed reservation is to be 
voided. (Final state).
    RETRACTED = assigned by Provider or Seller when the Customer 
fails to confirm or withdraw the request within the required time 
period. (Final state).

[FR Doc. 99-2388 Filed 2-2-99; 8:45 am]
BILLING CODE 6717-01-P