[Federal Register Volume 65, Number 23 (Thursday, February 3, 2000)]
[Proposed Rules]
[Pages 5289-5295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2366]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 382

[Docket No. RM00-7-000]


Revision of Annual Charges Assessed to Public Utilities

January 28, 2000.
AGENCY:  Federal Energy Regulatory Commission, DOE.

ACTION:  Notice of proposed rulemaking.

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SUMMARY:  The Federal Energy Regulatory Commission (Commission) 
proposes to amend its regulations to establish a new methodology for 
the assessment of annual charges to public utilities. The Commission 
proposes that annual charges would be assessed to public utilities 
based on the volume of electricity transmitted by the public utilities.

DATES:  Comments on the proposed rulemaking are due on or before April 
3, 2000..

ADDRESSES:  File comments on the notice of proposed rulemaking with the 
Office of the Secretary, Federal Energy Regulatory Commission, 888 
First Street, N.E., Washington, D.C. 20426. Comments should reference 
Docket No. RM00-7-000

FOR FURTHER INFORMATION CONTACT:

Herman Dalgetty (Technical Information), Chief, Accounts Receivable and 
Assessment Branch, Office of Finance, Accounting and Operations, 888 
First Street, N.E., Washington, D.C. 20426, (202) 219-2918
Jennifer Lokenvitz Schwitzer (Legal Information), Office of the General 
Counsel, 888 First Street, N.E.,

[[Page 5290]]

Washington, D.C. 20426, (202) 219-4471

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 view and/or print the contents of 
this document via the Internet through FERC's Home Page (http://ferc.fed.us) and in FERC's Public Reference Room during normal business 
hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, N.E., 
Room 2A, Washington, DC 20426.
    From FERC's Home Page on the Internet, this information is 
available in both the Commission Issuance Posting System (CIPS) and the 
Records and Information Management System (RIMS).

--CIPS provides access to the texts of formal documents issued by the 
Commission since November 14, 1994.
--CIPS can be accessed using the CIPS link or the Energy Information 
Online icon. The full text of this document will be available on IPS in 
ASCII and WordPerfect 8.0 format for viewing, printing and/or 
downloading.
--RIMS contains images 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 from FERC's Home Page using the RIMS 
link or the Energy Information Online icon. Descriptions of documents 
back to November 16, 1981, are also available from RIMS-on-the-Web; 
requests for copies of these and other older documents should be 
submitted to the Public Reference Room.

    User assistance is available for RIMS, CIPS and the Website during 
normal business hours from our Help Line at (202) 208-2222 (E-mail to 
[email protected]) or the Public Reference Room at (202) 208-1371 
(E-mail to [email protected]).
    During normal business hours, documents can also be viewed and/or 
printed in FERC's Public Reference Room, where RIMS, CIPS and the FERC 
Website are available. User assistance is also available.

I. Introduction

    The Federal Energy Regulatory Commission (Commission) proposes to 
amend its regulations to establish a new methodology for the assessment 
of annual charges to public utilities. The Commission proposes that 
annual charges would be assessed to public utilities based on the 
volume of electricity transmitted by the public utilities. \1\
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    \1\ On August 12, 1998, the Commission received a petition for 
rulemaking from Automated Power Exchange, Citizens Power, Coral 
Power, L.L.C., Electric Clearinghouse, Inc., Enron Power Marketing, 
Inc., Koch Energy Trading, Inc., NP Energy Inc., Sonat Power 
Marketing, L.P., and Williams Energy Services in Docket No. RM98-14-
000. The parties petitioned the Commission to initiate a rulemaking 
to modify its methodology for assessing annual charges. The 
Commission notes that the instant rulemaking on annual charges moots 
the petition. Therefore, the Commission plans to terminate Docket 
No. RM98-14-000 in the final rule. Petitioners are free to file 
timely comments in response to the instant rulemaking and we will 
address them in the final rule.
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II. Background

A. Commission Authority

    The Commission is required by section 3401 of the Omnibus Budget 
Reconciliation Act of 1986 (Budget Act) \2\ to ``assess and collect 
fees and annual charges in any fiscal year in amounts equal to all of 
the costs incurred * * * in that fiscal year.'' \3\ The annual charges 
must be computed based on methods which the Commission determines to be 
``fair and equitable.'' \4\ The Conference Report accompanying the 
Budget Act provides the Commission with the following guidance as to 
this phrase's meaning:
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    \2\ 42 U.S.C. 7178.
    \3\ This authority is in addition to that granted to the 
Commission in sections 10(e) and 30(e) of the Federal Power Act 
(FPA). 16 U.S.C. 803(e), 823a(e).
    \4\ 42 U.S.C. 7178(b).

    [A]nnual charges assessed during a fiscal year on any person may 
be reasonably based on the following factors: (1) The type of 
Commission regulation which applies to such person such as a gas 
pipeline or electric utility regulation; (2) the total direct and 
indirect costs of that type of Commission regulation incurred during 
such year; \5\ (3) the amount of energy--electricity, natural gas, 
or oil--transported or sold subject to Commission regulation by such 
person during such year; and (4) the total volume of all energy 
transported or sold subject to Commission regulation by all 
similarly situated persons during such year.\6\
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    \5\ The Commission is required to collect not only all its 
direct costs but also all its indirect expenses such as hearing 
costs and indirect personnel costs. See H.R. Conf. Rep. No. 99-1012 
at 238 (1986), reprinted in 1986 U.S.C.C.A.N. 3868, 3883 (Conference 
Report); see also, S. Rep. No. 99-348 at 56, 66 and 68 (1986).
    \6\ See Conference Report at 238.

    The Commission may assess these charges by making estimates based 
upon data available to it at the time of the assessment. \7\
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    \7\ 42 U.S.C. 7178(c).
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    The annual charges do not enable the Commission to collect amounts 
in excess of its expenses, but merely serve as a vehicle to reimburse 
the United States Treasury for the Commission's expenses.\8\
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    \8\ Id. at 7178(f). Congress approves the Commission's budget 
through annual and supplemental appropriations.
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B. Current Annual Charge Billing Procedure

    As required by the Budget Act, the Commission's regulations provide 
for the payment of annual charges by public utilities. \9\ The 
Commission intends that these electric annual charges in any fiscal 
year will recover the Commission's estimated electric regulatory 
program costs (other than the costs of regulating Federal Power 
Marketing Agencies and electric regulatory program costs recovered 
through electric filing fees) for that fiscal year. In the next fiscal 
year, the Commission adjusts its annual charges up or down, as 
appropriate, both to eliminate any over-or under-recovery of the 
Commission's actual costs and to eliminate any over-or under-charging 
of any particular person.\10\
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    \9\ 18 CFR Part 382; see Annual Charges Under the Omnibus Budget 
Reconciliation Act of 1986, Order No. 472, 52 FR 21263 and 24153 
(June 5 and 29, 1987),  FERC   Stats. & Regs.,  Regulations 
Preambles   1986-1990 para. 30,746 (1987), clarified, Order No. 472-
A, 52 FR 23650 (June 24, 1987), FERC Stats. & Regs., Regulations 
Preambles 1986-1990 para. 30,750, order on reh'g, Order No. 472-B, 
52 FR 36013 (Sept. 25, 1987), FERC Stats. & Regs., Regulations 
Preambles 1986-1990 para. 30,767 (1987), order on reh'g, Order No. 
472-C, 53 FR 1728 (Jan. 22, 1988), 42 FERC para. 61,013 (1988).
    \10\ 18 CFR 382.201; see Order No. 472, 52 FR 21263 and 24153, 
FERC Stats. & Regs., Regulations Preambles 1986-1990 at 30,612-18; 
accord Annual Charges Under the Omnibus Budget Reconciliation Act of 
1986, Order No. 507, 53 FR 46445 (Nov. 17, 1985), FERC Stats. & 
Regs., Regulations Preambles 1986-1990 para. 30,839 at 31,263-64 
(1988); Texas Utilities Electric Company, 45 FERC para. 61,007 at 
61,027 (1988) (Texas Utilities).
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    In calculating annual charges, the Commission first determines the 
total costs of its electric regulatory program and subtracts all 
Federal Power Marketing Agency-related and electric filing fee 
collections to determine total collectible electric regulatory program 
costs. It then uses the data submitted under FERC Reporting Requirement 
No. 582 (FERC-582) to determine the total volumes of long-term firm 
sales and transmission, and short-term sales and transmission and 
exchanges for all assessable public utilities. The Commission divides 
those transaction volumes into its collectible electric regulatory 
program costs to determine the unit charge per megawatt-hour for each 
category of long-term and short-term transactions. Finally, the

[[Page 5291]]

Commission multiplies the transaction volume in each category for each 
public utility by the relevant unit charge per megawatt-hour to 
determine the annual charges for all assessable public utilities.\11\
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    \11\ 18 CFR 382.201; see Annual Charges Under the Omnibus Budget 
Reconciliation Act of 1986 (Phibro Inc.), 81 FERC para. 61,308 at 
62,424-25 (1997).
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    Public utilities subject to these annual charges must submit FERC-
582 to the Office of the Secretary by April 30 of each year. \12\ The 
Commission issues bills for annual charges, and public utilities then 
must pay the charges within 45 days of the date on which the Commission 
issues the bills.\13\
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    \12\ 18 CFR 382.201(b)(4).
    \13\ See Texas Utilities, 45 FERC at 61,026.
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C. Reasons for This Rule

    Since the issuance of Order No. 472, the industry has undergone 
sweeping changes, including: The Commission's establishment of open 
access transmission as a foundation for competitive wholesale power 
markets; \14\ a movement by many states to develop retail competition; 
the growing divestiture of generation assets by traditional public 
utilities; the entry of new market participants in the industry in the 
form of independent and affiliated power marketers and stand-alone 
merchant plant generators; and the establishment of Independent System 
Operators (ISOs), the expected establishment of transmission companies 
(transcos), and the establishment of power exchanges as managers of 
transmission systems and power markets, respectively.
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    \14\ See Promoting Wholesale Competition Through Open Access 
Non-discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. 
Sec. 31,036 (1996) (Order No. 888), order on reh'g, Order No. 888-A, 
62 FR 12274 (March 14, 1997), FERC Stats. & Regs. Sec. 31,048 
(1997), order on reh'g, Order No. 888-B, 62 FR 64688 (March 14, 
1997), 81 FERC Sec. 61,248 (1997), order on reh'g, Order No. 888-C, 
82 FERC Sec. 61,046 (1998), appeal docketed, Transmission Access 
Policy Study Group, et al. v. FERC, No. 97-1715 et al. (D.C. Cir.).
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    As the landscape of the industry has changed and continues to 
change, the nature of the work of the Commission likewise has changed. 
The purpose of this rule is to change the way in which the Commission 
assesses annual charges to recover its electric regulatory program 
costs to reflect these changes, by assessing annual charges to public 
utilities based on the volumes of electric energy transmitted.

III. Discussion

    In Order No. 472, to implement the Budget Act, the Commission 
formulated an annual charge billing procedure. To do this, the 
Commission had to determine: (1) The types of companies which the 
Commission should bill; (2) how to estimate and then allocate the 
Commission's costs among its different regulatory programs; and (3) how 
to allocate each program's costs among the companies under each 
program. After the annual charge billing procedure was formulated, the 
Commission then had to determine (1) how to adjust the annual charges 
at the end of a fiscal year ``to eliminate any over-recovery or under-
recovery of [the Commission's] total costs, and any overcharging or 
undercharging of any person'' pursuant to section 3401(e) of the Budget 
Act; and (2) the standards for waiving all or part of an annual charge 
pursuant to section 3401(g) of the Budget Act.
    We note at the outset that this proposed rule is only for the 
determination of annual charges to recover the costs of the 
Commission's electric regulatory program.
    Therefore, how to apportion the costs among the Commission's 
different regulatory programs is not before the Commission.
    Below, we will discuss the types of companies to be billed, the 
proposed apportionment of our electric regulatory program costs among 
such companies, and other matters related to the proposed changes to 
the Commission's regulation on annual charges.

A. The Types of Companies To Be Billed

    The Commission's electric regulatory program includes administering 
the provisions of Parts II and III of the Federal Power Act (FPA) \15\ 
as they apply to the activities of public utilities (traditionally, 
principally investor-owned utilities); \16\ discharging its 
responsibilities under various statues involving the Federal Power 
Marketing Agencies (PMAs); and implementing various provisions of the 
Public Utility Regulatory Policies Act of 1987 (PURPA) \17\ involving 
qualifying cogenerators and small power producers (QFs).
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    \15\ 16 U.S.C. 824-825r.
    \16\ Under sections 211, 212 and 213 of the FPA, 16 U.S.C. 824j-
l, the Commission also has authority over transmitting utilities 
that are not public utilities. Compare 16 U.S.C. 796(23) with 16 
U.S.C. 824(b), (e).
    \17\ 16 U.S.C. 2601-2645.
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1. Public Utilities
    Pursuant to section 205 of the FPA, \18\ the Commission regulates 
the rates, terms and conditions of service of public utilities making 
sales for resale or transmitting electric energy in interstate 
commerce. All jurisdictional rates, terms and conditions must be on 
file with the Commission, and may be approved by the Commission only if 
they are just and reasonable and not unduly discriminatory or 
preferential. Under section 206 of the FPA, \19\ the Commission may 
change any rates, terms or conditions that it finds to be unjust, 
unreasonable, or unduly discriminatory or preferential.
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    \18\ 16 U.S.C. 824d(a).
    \19\ 16 U.S.C. 824e.
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    The Commission also regulates certain accounting and corporate 
activities of public utilities pursuant to the FPA. Examples include 
the following: Under section 203, \20\ the Commission reviews 
applications filed by public utilities seeking to merge or to dispose 
of jurisdictional facilities. Pursuant to section 204, \21\ the 
Commission reviews the proposed securities issuances of public 
utilities whose securities issuances are not regulated by a state 
commission within the meaning of section 204(f). Under sections 301 and 
302, \22\ the Commission has authority over a public utility's 
accounting and its depreciation.
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    \20\ 16 U.S.C. 824b.
    \21\ 16 U.S.C. 824c.
    \22\ 16 U.S.C. 825, 825a.
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2. PMA's
    The Commission reviews the rates established by the Department of 
Energy for the federally-owned PMAs (Bonneville Power Administration 
(BPA), Alaska Power Administration, Southeastern Power Administration, 
Southwestern Power Administration, and Western Power Administration). 
While regulation of public utility rates is guided by the FPA, 
regulation of the PMAs' rates is subject to the standards enumerated in 
a number of other statutes. \23\ Essentially, the statutes require that 
the rates established by the PMAs must be devised with regard for the 
recovery of the cost of generation and transmission of electric energy, 
the encouragement of the most widespread use of the power, the 
provision of the lowest possible rates to customers consistent with 
sound business principles, and the protection of the interests of the 
United States in amortizing its investment in the projects within a 
reasonable period of time. The Commission is also authorized,

[[Page 5292]]

pursuant to the Northwest Power Act, to review the Average System Cost 
methodology used to determine rates for exchange sales by utilities to 
BPA.
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    \23\ Flood Control Act of 1944, 16 U.S.C. 825s; Federal Columbia 
River Transmission System Act, 16 U.S.C. 838g; Pacific Northwest 
Power Preference Act, 16 U.S.C. 837; Pacific Northwest Electric 
Power Planning and Conservation Act of 1980, 16 U.S.C. 839; the 
Bonneville Project Act, 16 U.S.C. 832f (Northwest Power Act); and 
the Reclamation Act of 1939, 43 U.S.C. 485h; the Department of 
Energy Organization Act, 42 U.S.C. 7101; see also DOE Delegation 
Order No. 0204-108, 48 FR 55664 (Dec. 14, 1983); 18 CFR Parts 300 
and 301.
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3. QF's
    Section 210 of PURPA \24\ requires the Commission to prescribe 
rules to encourage cogeneration and small power production of 
electricity. In particular, the section directs the Commission to adopt 
rules requiring utilities to purchase power from and sell power to 
qualifying cogeneration and small power production facilities. The 
Commission reviews applications filed by cogenerators and small power 
producers requesting QF certification, and either grants or rejects 
such applications based on criteria set forth in the Commission's 
regulations.\25\
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    \24\ 16 U.S.C. 824a-3(a).
    \25\ 18 CFR Part 292.
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4. Discussion
    The Commission proposes to assess annual charges to public 
utilities involved in the transmission of electric energy in interstate 
commerce. The Commission will continue unchanged its existing policy 
with regard to its assessment of annual charges to PMAs. \26\
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    \26\ See 18 CFR 382.201(c).
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    The Commission also will continue to excuse qualifying cogenerators 
and small power producers from annual charges. For the most part, these 
entities do not provide interstate transmission of electric energy. The 
Commission believes that any amounts which might be assessed as annual 
charges to the few entities that may provide such transmission do not 
justify the risk of discouraging the fullest development of 
cogeneration and small power production by such entities. Therefore, 
the Commission will continue to not assess annual charges to these 
entities.\27\
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    \27\ 18 CFR 382.102(b); see Order No. 472, FERC Stats. & Regs., 
Regulations Preambles 1986-1990 at 30,637.
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    The Commission proposes to continue its existing policy that 
municipals and rural electric cooperative utility systems that are 
financed by the Rural Utilities Service will not be required to pay 
annual charges. While these entities may be transmitting utilities 
subject to our authority under sections 211, 212 and 213 of the FPA, 
they are not public utilities under the FPA.\28\
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    \28\ 18 CFR 382.102(b); see 16 U.S.C. 284; South Carolina Public 
Service Authority, 75 FERC 61,209 at 61,696 (1996); Dairyland Power 
Corporation, 37 FPC 12, 15 (1967); accord, Salt River Project 
Agricultural Improvement and Power District v. FPC, 391 F.2d 470, 
474 (D.C. Cir.), cert. denied, 393 U.S. 857 (1968).
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    The Commission proposes to continue its practice of not assessing 
annual charges to utilities operating in Alaska or Hawaii because they 
are not public utilities under the FPA, because they do not make 
wholesale sales or transmit electric energy in interstate commerce.
    Lastly, the Commission proposes to not assess annual charges to 
foreign electric utilities to the extent that their transactions are in 
foreign commerce or wholly within another country.\29\
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    \29\ E.g., British Columbia Power Exchange Corporation, 80 FERC 
61,343 at 62,137, 62,141 (1997) (sales in foreign commerce or within 
another country are excluded from annual charges calculations).
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B. Proposed Apportionment

    The Commission is proposing to change the way in which it 
apportions annual charges among the entities it regulates. As 
previously stated, the Commission first determines the total costs of 
its electric regulatory program and subtracts all Federal Power 
Marketing Agency-related costs and electric filing fee collections to 
determine the total collectible electric regulatory program costs. It 
then uses the data submitted under FERC-582 to determine the total 
volumes of long-term firm sales and transmission, and short-term sales 
and transmission \30\ and exchanges for all assessable public 
utilities. The Commission divides those transaction volumes into its 
collectible electric regulatory program costs to determine the unit 
charge per megawatt-hour for each category of transactions. Finally, 
the Commission multiplies the transaction volume in each category for 
each public utility by the relevant unit charge per megawatt-hour to 
determine the annual charges for each assessable public utility.\31\
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    \30\ Long-term firm sales and transmission activities and short-
term sales and transmission activities are defined in 18 CFR 
382.102.
    \31\ The Commission also carries over any over-or under-charge 
from the prior year as a credit or debit on the current year's 
annual charge bill.
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The Commission established two separate categories because:

    Rates for long-term coordination and transmission sales usually 
require greater use of Commission resources than those for sales 
which have a duration of less than five years. Long-term sales 
contracts tend to be based upon fully distributed costs and require 
cost projections (test year data) which must be reasonable. Rates 
for short-term coordination or transmission sales, on the other 
hand, are not necessarily exclusively cost-based, but may be made 
for many non-cost reasons as well. \32\
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    \32\ Order 472-B at 30,830.

    This methodology for assessing annual charges worked well for the 
industry structure that existed at the time the rule was issued. 
However, because there has been such dramatic changes in the industry, 
this classification no longer serves its purpose.
    With open-access transmission, functional unbundling and the rapid 
movement to market-based power sales rates brought about by, inter 
alia, Commission Order No. 888,\33\ state retail unbundling efforts, 
and the recently issued Order No. 2000,\34\ the time and effort of our 
electric regulatory program is now increasingly devoted to assuring 
open and equal access to public utilities' transmission systems. In 
contrast, the time and effort of our electric regulatory program that 
had been devoted to reviewing cost-based power sales rates has been 
decreasing, and with open access transmission, power sales rates are 
now increasingly being disciplined by competitive market forces and 
less by the Commission directly. As a consequence, we believe it 
appropriate to assess our electric regulatory program costs solely on 
the MWh of electric energy transmitted in interstate commerce by public 
utilities,\35\ rather than, as in the past, on both jurisdictional 
power sales and transmission volumes. We further note that, as 
described below, sellers of electric energy typically must use public 
utility transmission systems to transmit their electric energy and 
therefore will, in fact, pay annual charges, albeit indirectly.
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    \33\ See supra note 14.
    \34\ Regional Transmission Organizations, Order No. 2000, 65 FR 
810 (Jan. 6, 2000), FERC Stats. & Regs. para. 31,089 (1999).
    \35\ This approach is essentially the same as how annual charges 
are assessed against gas pipelines.
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    The Commission believes that this approach of directly charging 
only those public utilities that provide interstate transmission 
service is both fair and equitable because, in turn, all parties 
involved in the generation and sale of electric energy rely on the 
transmission system to move their product. Thus, the Commission 
believes that power sellers will, in fact, be contributing to the 
Commission's recovery of its electric regulatory program costs in that 
they will be using the transmission system and, in the cost-based rates 
that they will pay for transmission service, will pay, albeit 
indirectly, a fair and equitable share of the Commission's costs.

C. Conclusion

    Specifically, therefore, the Commission is proposing to assess 
annual charges to public utilities based on their transmission of 
electric energy

[[Page 5293]]

in interstate commerce, as measured by: (1) unbundled wholesale 
transmission, (2) unbundled retail transmission,\36\ and (3) bundled 
wholesale power sales which, by definition, include a transmission 
component, where the transmission component is not separately reported 
as unbundled transmission.\37\
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    \36\ The Commission is proposing that annual charges will be 
assessed based on all interstate transmission by public utilities, 
with no distinction made between so-called unbundled retail and 
unbundled wholesale transmission. This transmission would include 
MWh received in wheeling transactions and the MWh delivered in 
exchange transactions.
    \37\ If the bundled wholesale power sale involves only the use 
of non-affiliated, third-party transmission systems, the 
transmission component would be picked up through the non-
affiliated, third-party transmission providers' reporting of the 
MWhs of transmission service they provided. Similarly, if the 
bundled wholesale power sale involves the use of the power seller's 
or its affiliate's transmission system, the transmission component 
may be separately reported as unbundled transmission. If, however, 
neither of these were the case, the MWhs would need to be reported 
as a bundled wholesale power sale.
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    As to ISOs, and potential Regional Transmission Organizations 
(RTOs), that have members that retain ownership of transmission 
facilities, the Commission is concerned that the assessment of annual 
charges to them could result in a ``double counting'' of transactions 
`` by counting a single transaction both to the transmission-owning 
public utility and to the ISO or RTO public utility. We believe that 
there are at least two ways to address this issue, and are inviting 
comments on these and any other solutions to this problem. One way 
would be not to charge the ISO or RTO itself, but instead charge each 
transmission-owning public utility based on the MWh of transmission 
service provided on their lines. The transmission-owning public utility 
would include the annual charges, as a cost element, in its revenue 
requirement, which, in turn, is recovered by the ISO or RTO through the 
ISO's or RTO's open access transmission tariff rates. Another way would 
be to allow the ISO or RTO to act as an agent for all of the individual 
transmission owners and have the ISO or RTO pay the annual charges 
rather than the individual transmission owners. Either of these 
approaches may be acceptable. The Commission is soliciting comments on 
these approaches, as well as any other approach that will allow the 
Commission to collect annual charges on these MWh of transmission 
service, in the most administratively efficient manner.

D. Other Matters

1. Reporting Requirements
    The Commission is proposing a change in its reporting requirements 
for annual charges. Currently, a public utility has to submit the total 
long-term firm sales for resale and transmission megawatt-hours and the 
total short-term sales, transmission, and exchange megawatt-hours. With 
the elimination of the distinction between long-term and short-term 
transactions, such distinctions in the reporting requirement are 
likewise no longer needed. The Commission proposes, therefore, that 
public utilities will report only total volumes of electric energy 
transmitted in interstate commerce (as defined above to include all 
unbundled transmission and all bundled wholesale power sales), in MWh, 
by April 30th of each year.
    Finally, we note that any corrections to FERC-582 will need to be 
made by the end of the calendar year in which the FERC-582 was filed.
2. Standards for Waiving All or Part of an Annual Charge
    The Commission is not proposing to change the standards applicable 
for waiving all or part of an annual charge. Thus, the Commission is 
proposing to continue to apply to annual charges the stringent 
standards for waiver currently applicable to filing fees, with a filing 
period for waiver petitions of 15 days after the issuance of the annual 
charges bill.
3. Effective Date
    We anticipate that we will begin assessing annual charges under 
this new methodology starting with bills to be paid in calendar year 
2002, based on data reported on FERC-582 in calendar year 2002 (for 
transactions that occurred in calendar year 2001, the first full year 
after adoption of changes in the regulation).\38\
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    \38\ Our existing regulations will remain effective until these 
changes become effective.
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    Likewise we anticipate that we will make the change discussed above 
with respect to corrections to FERC-582 effective beginning with the 
data reported in FERC-582 in calendar year 2002 (for transactions that 
occurred in calendar year 2001); thus such corrections will need to be 
submitted on or before December 31, 2002.

IV. Environmental Statement

    The Commission excludes certain actions not having a significant 
effect on the human environment from the requirement to prepare an 
environmental assessment or an environmental impact statement. \39\ The 
promulgation of a rule that is procedural or that does not 
substantially change the effect of legislation or regulations amended 
raises no environmental considerations.\40\ This proposed rule amends 
Part 382 of the Commission's regulations to establish a new methodology 
for the assessment of annual charges to public utilities and does not 
substantially change the effect of the underlying legislation or the 
regulations being revised. Accordingly, no environmental consideration 
is necessary.
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    \39\ 18 CFR 380.4.
    \40\ 18 CFR 380.4(a)(2)(ii).
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V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
rulemakings to contain either a description and analysis of the effect 
that the proposed rule will have on small entities or a certification 
that the rule will not have a significant economic impact on a 
substantial number of small entities.
    In Mid-Tex Elec. Coop. v. FERC, 773 F.2d 327 (D.C. Cir. 1985), the 
court found that Congress, in passing the RFA, intended agencies to 
limit their consideration ``to small entities that would be directly 
regulated'' by proposed rules. Id. at 342. The court further concluded 
that ``the relevant `economic impact' was the impact of compliance with 
the proposed rule on regulated small entities.'' Id. at 342.
    Overall, the Commission does not believe that this rule will have a 
significant direct impact on small entities. Specifically, most, if not 
all, public utilities that would be assessed annual charges under this 
rule do not fall within the RFA's definition of a small entity because 
most public utilities subject to this rule are too large to be 
considered ``small entities.'' \41\ Therefore, the Commission certifies 
that this rule will not have a ``significant economic impact on a 
substantial number of small entities.''
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    \41\ 5 U.S.C. 601(6).
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VI. Public Reporting Burden and Information Collection Statement

    The collection of information contained in this proposed rule is 
being submitted to the Office of Management and Budget (OMB) for review 
under Section 3507(d) of the Paperwork Reduction Act of 1995. FERC 
identifies the information provided under Part 382 as FERC-582.
    Comments are solicited on the Commission's need for this 
information, whether the information will have

[[Page 5294]]

practical utility, the accuracy of the provided burden estimates, ways 
to enhance the quality, utility, and clarity of the information to be 
collected, and any suggested methods for minimizing respondents' 
burden, including the use of automated information techniques.
    The burden estimate for complying with this proposed rule is as 
follows:
    Public Reporting Burden: Estimated Annual Burden:

----------------------------------------------------------------------------------------------------------------
                                                            Number of     Number of     Hours per   Total annual
                     Data collection                       respondents    responses     response        hours
----------------------------------------------------------------------------------------------------------------
FER-582.................................................          242             1             4           968
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection (reporting + recordkeeping, (if 
appropriate)) = 968.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost for all respondents to be: Annualized Capital/Startup 
Costs - Annualized Costs (Operations & Maintenance) - $51,911 (968 
hours  2080 hours per year  x  $111,545 = $51,911). The cost 
per respondent is equal to $215.
    The OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule. \42\ Accordingly, 
pursuant to OMB regulations, the Commission is providing notice of its 
proposed information collections to OMB.
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    \42\ 5 CFR 1320.11.
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    Title: FERC-582, Electric Fees and Annual Charges.
    Action: Proposed Data Collection.
    OMB Control No.: 1902-0132.
    The applicant shall not be penalized for failure to respond to this 
collection of information unless the collection of information displays 
a valid OMB control number.
    Respondents: Business or other for profit, including small 
businesses.
    Frequency of Responses: On occasion.
    Necessity of Information: The proposed rule revises the 
requirements contained in 18 CFR Part 382 to revise the method for 
determining the assessment of annual charges.
    The Commission is seeking to make its assessments for annual 
charges compatible with the current regulatory environment and the 
creation of competitive wholesale markets. The Commission has the 
authority under the Omnibus Budget Reconciliation of 1986 (42 U.S.C. 
7178) to ``assess and collect fees and annual charges in any fiscal 
year in amounts equal to all of the costs incurred * * * in that fiscal 
year.'' The Act gives the Commission the flexibility to arrive at a 
reasonable approximation of its program costs. The costs are determined 
by a summation of all electric regulatory program costs and then 
subtracting all electric regulatory program filing fee collections in 
order to determine the total collectible costs for the electric 
regulatory program. Information submitted under FERC-582 is the basis 
for the calculation of annual charges, and presently includes total 
volumes of long-term firm sales and transmission and short-term sales 
and transmission plus exchanges for all public utilities, including 
power marketers. The proposed rule changes the basis for the 
calculation of annual charges to the total volumes of electricity 
transmitted by public utilities.
    Internal Review: The Commission has assured itself, by means of 
internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements. The 
Commission's Office of Finance, Accounting and Operations will use the 
data submitted under FERC-582 in order to serve as a billing 
determinant to recover costs for administering its electric regulatory 
program, including administering the provisions of Parts II and III of 
the Federal Power Act and the provisions of the Public Utility 
Regulatory Policies Act of 1987.
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, D.C. 20426 [Attention: 
Michael Miller, Capital Planning and Policy Group, Phone: (202) 208-
1415, Fax: (202) 208-2425, E-Mail: [email protected]].
    For submitting comments concerning the collection of information(s) 
and associated burden estimate(s), please send your comments to the 
contact listed above and to the Office of Management and Budget, Office 
of Information and Regulatory Affairs, Washington, D.C. 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission, 
Phone: (202) 395-3087, Fax: (202) 395-7285].

VII. Public Comment Procedures

    Prior to taking final action on this proposed rulemaking, we are 
inviting interested persons to submit written comments on the changes 
to the regulations proposed in this notice to be adopted. All comments 
in response to this notice 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. RM00-7-
000. An original and fourteen (14) copies of such comments should be 
filed with the Commission on or before April 3, 2000.
    In addition to filing paper copies, the Commission encourages the 
filing of comments either on computer diskette or via Internet E-Mail. 
Comments maybe filed in the following formats: WordPerfect 8.0 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. RM00-7-000; 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. RM00-7-000. 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 comments 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 notice 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.

[[Page 5295]]

Additionally, comments may be viewed, printed or downloaded remotely 
via the Internet through FERC's Homepage, using the RIMS or CIPS link. 
RIMS contains all comments but only those comments submitted in 
electronic format are available on CIPS. User assistance is available 
at 202-208-2222, or by E-Mail to [email protected].

List of Subjects in 18 CFR Part 382

    Annual charges.

    By direction of the Commission. Commissioner Bailey did not 
participate in this decision.
David P. Boergers,
Secretary.
    In consideration of the foregoing, the Commission proposes to amend 
Part 382, Chapter I, Title 18 of the Code of Federal Regulations, as 
set forth below.

PART 382--ANNUAL CHARGES

    1. The authority citation for Part 382 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 
49 App. U.S.C. 1-85.


Sec. 382.102  [Amended]

    2. In section 382.102 paragraphs (h), (i), (j) and (k) are removed 
and paragraphs (l), (m), (n), (o) and (p) are redesignated as (h), (i), 
(j), (k) and (l), respectively.
    3. Section 382.201 is revised to read as follows:


Sec. 382.201  Annual charges under Parts II and III of the Federal 
Power Act and related statutes.

    (a) Determination of costs to be assessed to public utilities. The 
adjusted costs of administration of the electric regulatory program, 
excluding the costs of regulating the Power Marketing Agencies, will be 
assessed to public utilities.
    (b) Determination of annual charges to be assessed to public 
utilities. The costs determined under paragraph (a) of this section 
will be assessed as annual charges to each public utility based on the 
proportion of the megawatt-hours of transmission of electric energy in 
interstate commerce of each public utility in the immediately preceding 
reporting year (either a calendar year or fiscal year, depending on 
which accounting convention is used by the public utility to be 
charged) to the sum of the megawatt-hours of transmission of electric 
energy in interstate commerce in the immediately preceding reporting 
year of all public utilities being assessed annual charges.
    (c) Reporting requirement. (1) For purposes of computing annual 
charges, as of January 1, 2002, a public utility, as defined in 
Sec. 382.102(b), must submit under oath to the Office of the Secretary 
by April 30 of each year an original and conformed copies of the 
following information (designated as FERC Reporting Requirement No. 582 
(FERC-582)): the total megawatt-hours of transmission of electric 
energy in interstate commerce, which for purposes of computing the 
annual charges and for purposes of this reporting requirement, will be 
measured by the sum of the megawatt-hours of all unbundled transmission 
(including MWh received in wheeling transactions and MWh delivered in 
exchange transactions) and the megawatt-hours of all bundled wholesale 
power sales (to the extent the megawatt-hours were not separately 
reported as unbundled transmission). This information should be 
reported to 3 decimal places; e.g., 3,105 KWh will be reported as 3.105 
MWh.
    (2) Corrections to the information reported on FERC-582, as of 
January 1, 2002, must be submitted under oath to the Office of the 
Secretary on or before the end of each calendar year in which the 
information was originally reported (i.e., on or before the last day of 
the year that the Commission is open to accept such filings, e.g., on 
or before December 31, 2002, etc.)
    (d) Determination of annual charges to be assessed to power 
marketing agencies. The adjusted costs of administration of the 
electric regulatory program as it applies to Power Marketing Agencies 
will be assessed against each power marketing agency based on the 
proportion of the megawatt-hours of sales of each power marketing 
agency in the immediately preceding reporting year (either a calendar 
year or fiscal year, depending on which accounting convention is used 
by the power marketing agency to be charged) to the sum of the 
megawatt-hours of sales in the immediately preceding reporting year of 
all power marketing agencies being assessed annual charges.

[FR Doc. 00-2366 Filed 2-2-00; 8:45 am]
BILLING CODE 6717-01-P