[Federal Register Volume 68, Number 199 (Wednesday, October 15, 2003)]
[Notices]
[Pages 59391-59393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25970]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. RM02-1-000 and RM02-1-001]


Before Commissioners: Pat Wood, III, Chairman; William L. Massey, 
and Nora Mead Brownell: Standardization of Generator Interconnection 
Agreements and Procedures; Order Denying Stay and Granting Extension

Issued October 7, 2003.

    1. On July 24, 2003, the Commission issued Order No. 2003, 
Standardization of Generator Interconnection Agreements and 
Procedures.\1\ The final rule will become effective on October 20, 
2003. Several parties have requested that the Commission stay the 
effective date of this rule pending rehearing and judicial review, 
while other parties have requested that the Commission extend the 
effective date of the rule or extend the date on which compliance 
filings

[[Page 59392]]

are due. This order denies the requests for stay of Order No. 2003, but 
grants the requests to extend the effective date of the rule and the 
date on which compliance filings are due.
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    \1\ Standardization of Generator Interconnection Agreements and 
Procedures, Order No. 2003, 68 FR 49,845 (Aug. 19, 2003), FERC 
Stats. & Regs. ] 31,146 (2003) (``Final Rule'').
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I. Background

    2. On August 25, 2003, the Commission received requests for stay of 
all or part of Order No. 2003 from the Alabama Public Service 
Commission (Alabama PSC); Mississippi Public Service Commission 
(Mississippi PSC); Southern Company Services, Inc. (Southern); and the 
National Rural Electric Cooperative Association in a joint filing with 
the American Public Power Association (NRECA-APPA).\2\
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    \2\ Some movants requested a stay as part of their requests for 
rehearing or clarification (Alabama PSC, Mississippi PSC, and NRECA-
APPA). All requests for rehearing and clarification will be 
addressed in a subsequent order.
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    3. On September 26, 2003, the Commission granted the requests of 
the Midwest Independent Transmission System Operator, Inc., the New 
York Independent System Operator, Inc., PJM Interconnection, L.L.C., 
the New England Power Pool Participants Committee and ISO New England, 
Inc., the New England Transmission Owners (NETO), the California 
Independent System Operator Corporation and its Jurisdictional 
Participating Transmission Owners and the New York Transmission Owners 
(NYTO) (Collectively, ``Independent Movants'') to extend the date on 
which compliance filings were due for independent transmission-owning 
entities until January 20, 2004.
    4. Between September 22, 2003 and October 2, 2003, the Commission 
received requests from various non-independent transmission owners, 
including Arizona Public Service Company (APS), Cleco Energy, LLC, 
Entergy Services (Entergy), NETO, NYTO, Progress Energy, and Southern 
Company Services (Southern) (collectively ``Non-Independent Movants'') 
requesting that non-independent transmission owners also be granted an 
extension of time to comply with Order No. 2003 until January 20, 2004.

II. Request for Stay

A. Arguments Raised

    5. Southern argues that the Commission should stay the final rule 
provisions on two issues: Network Resource Interconnection Service (NR 
Service) and refunds of Network Upgrade costs. Southern asks that the 
stay remain in effect until the Commission grants rehearing and removes 
the two provisions, or, alternatively, if the Commission denies 
rehearing, until Southern is able to seek judicial review of the two 
provisions.
    6. Southern first argues that NR Service threatens system 
reliability because it ignores the need to perform additional studies 
if the Generating Facility is ever designated a network resource, and 
removes the incentive to site new generation in close proximity to 
loads. Southern then argues that NR Service would harm transmission 
providers and their customer by eliminating the pricing signals that 
ensure that network resources are economical resource options. Also, 
the ``contradictory and inherently vague'' NR Service provisions would 
be difficult and costly to implement and revise once the Commission 
provides the necessary clarification. Furthermore, requiring 
transmission providers to adopt the ``inherently vague and 
inconsistent'' NR Service provisions is a violation of due process.\3\ 
Finally, the threat of irreparable harm is imminent because of the 
impending effective date of the Final Rule and the fact that Southern 
has ``at least two'' Interconnection Customers that could claim they 
would be entitled to take NR Service.
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    \3\ Citing Satellite Broadcasting Company, Inc. v. FCC, 824 F.2d 
1, 3 (DC Cir. 1987) (``Traditional concepts of due process 
incorporated into administrative law preclude an agency from 
penalizing a private party for violating a rule without first 
providing adequate notice of the substance of the rule.''); Jolly v. 
Coughlin, 76 F.3d 468, 482 (2d Cir. 1996) (noting that the ``alleged 
violation of a constitution right * * * triggers a finding of 
irreparable harm'').
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    7. Second, Southern argues that a stay should be granted with 
respect to (1) the five-year deadline for refund to the Interconnection 
Customer of the cost of Network Upgrades, and (2) the requirement that 
an Interconnection Customer receive such refunds when transmission 
service is taken at locations on the Transmission Provider's system 
other than from the generating facility itself. Without a stay, other 
transmission customers will be subject to the costs of Network Upgrades 
that provide them no benefit. Southern argues that even if it is 
successful on appeal, because many generator owners are 
undercapitalized special-purpose entities and have had severe financial 
problems of late, it is possible that these Interconnection Customers 
would not be able to pay such amounts if ordered to do so.
    8. Alabama PSC and Mississippi PSC raise arguments similar to those 
presented by Southern and request that the Commission stay the 
effective date of Order No. 2003 in its entirety until the Commission 
acts on their requests for rehearing. And, if the Commission fails to 
grant their requests for rehearing, the Commission should stay the 
interconnection rule until these matters are addressed by a court. They 
argue that retail customers in their states will face irreparable harm 
because these customers risk losing their low-cost power, along with 
``the resulting negative impacts to their quality of life and 
comparative economic advantages for purposes of attracting new 
industries.'' Even if they prevail on judicial review, ``it is unlikely 
that monetary damages could be awarded at that time to rectify this 
harm'' because the Commission lacks the authority to make such awards 
and recovery from merchant power entities may not be possible.
    9. NRECA-APPA request a stay of the effective date of Order No. 
2003 ``because the issues raised in this request are so important to 
NRECA-APPA, as well as consumers, state regulators, and many market 
participants.''

B. Discussion

    10. To assure definiteness and finality in Commission proceedings, 
the Commission typically does not stay its orders.\4\ The Commission 
may stay its action when ``justice so requires.''\5\ In addressing 
motions for stay, the Commission considers: (1) Whether the moving 
party will suffer irreparable injury without a stay; (2) whether 
issuing the stay will substantially harm other parties; and (3) whether 
a stay is in the public interest.\6\ The key element in the inquiry is 
irreparable injury to the moving party.\7\ If a party is unable to 
demonstrate that it will suffer irreparable harm absent a stay, we need 
not examine the other factors.\8\ The standard for showing irreparable 
harm is strict, as the DC Circuit has explained:
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    \4\ Midland, 56 FERC at 61,630. See also Sea Robin Pipeline Co., 
92 FERC ] 61,217 (2000).
    \5\ 5 U.S.C. 705 (2000).
    \6\ See e.g., CMS Midland, Inc., 56 FERC ] 61,177 at 61,631 
(1991) (Midland), aff'd sub nom. Michigan Municipal Cooperative 
Group v. FERC, 990 F.2d 1377 (D.C. Cir. 1993).
    \7\ Midland, 56 FERC at 61,631.
    \8\ Id.

    First, the injury must be both certain and great; it must be 
actual and not theoretical. Injunctive relief `will not be granted 
against something merely feared as liable to occur at some 
indefinite time.' It is also well settled that economic loss does 
not, in and of itself, constitute irreparable harm. . . . Implicit 
in each of these principles is the further requirement that the 
movant substantiate the claim that irreparable injury is `likely' to 
occur. Bare allegations of what is likely to occur are of no value 
since the court must

[[Page 59393]]

decide whether the harm will in fact occur. The movant must provide 
proof that the harm has occurred in the past and is likely to occur 
again, or proof indicating that the harm is certain to occur in the 
near future.\9\
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    \9\ Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 
1985) (Wisconsin Gas) (citations omitted).

Because none of the movants have met the irreparable harm criterion, we 
do not discuss the remaining two factors for evaluating a stay request.
    11. Regarding the claim that the final rule threatens system 
reliability, the movants have not shown that their concerns about the 
effects on reliability are more than speculation. Bare allegations 
regarding the effect on reliability without a substantive showing that 
such harm is likely or certain to occur are insufficient. The 
Commission believes that this rule, in fact, will protect 
reliability.\10\
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    \10\ See e.g., Order No. 2003, FERC Stats. & Regs. ] 31,146 at P 
7 (noting that preserving reliability is one of the goals of Order 
No. 2003).
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    12. Likewise, the claims regarding the economic effects of the 
final rule, including Southern's arguments regarding the refund 
obligations, do not demonstrate irreparable harm. First, the movants 
have not made the necessary showing that the expected economic effects 
are more than mere speculation. By failing to show that ``harm has 
occurred in the past and is likely to occur again'' or providing 
``proof indicating that the harm is certain to occur in the near 
future,'' \11\ the movants have not substantiated their claims that the 
final rule will result in economic harm. Moreover, even if the movants 
could show that these costs are more certain than speculative, they 
have not shown that the costs are more than economic losses. In order 
for an economic loss to be irreparable harm, it must be unrecoverable 
and must threaten economic viability.\12\ Since the parties have not 
made this showing, we cannot conclude that the alleged economic losses 
constitute irreparable harm.
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    \11\ Wisconsin Gas, 758 F.2d at 674.
    \12\ See id.
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    13. As for the claim that the final rule is vague and ambiguous in 
certain respects and violates due process, that is a matter for 
rehearing or clarification.

III. Requests for Extension of Compliance and Effective Date

A. Arguments Raised

    14. The Non-Independent Movants request that the Commission allow 
non-independent entities until January 20, 2004 to make their 
compliance filings. The Non-Independent Movants argue that transmission 
providers need the additional time to assimilate the provisions of 
Order No. 2003 into their OATTs and to ensure proper implementation of 
Order No. 2003's provisions. Additionally, several suggest that 
granting an extension of the filing date until after the Commission 
rules on the various pending requests for rehearing would make it 
unnecessary for them to have to make more than one compliance filing if 
the Commission grants rehearing.
    15. Additionally, NYTO and NETO request that transmission providers 
belonging to RTOs and ISOs (as distinct from the RTOs or ISOs 
themselves) be granted an extension until January 20, 2004 to allow 
them to work with their respective ISOs or RTOs to develop joint 
compliance filings. APS also requests that the extension of time be 
granted to jurisdictional entities in the Western Interconnection who 
jointly own facilities with non-jurisdictional entities, and, like ISOs 
and RTOs, employ a collaborative stakeholder process to develop their 
OATTs.
    16. Southern and Entergy add that they need additional time to 
safely implement the Network Resource Interconnection Service portions 
of Order No. 2003. Finally, Southern also requests that the Commission 
delay the effective date of the rule by 90 days.

B. Discussion

    17. In response to the concerns of the Non-Independent Movants 
(including APS, NETO, and NYTO), the Commission grants the requests for 
extension of the compliance deadline until January 20, 2004. The 
Commission intends to act on the pending rehearing requests prior to 
that date.
    18. In order to avoid confusion, the Commission will also grant the 
requests to extend the effective date of the rule until January 20, 
2004.
The Commission orders
    (A) All requests for stay are hereby denied, as discussed in the 
body of this order.
    (B) Requests for extension of the compliance deadline and effective 
date until January 20, 2004 are granted.
    (C) The Secretary is hereby directed to publish this order in the 
Federal Register.

    By the Commission.
Linda Mitry,
Acting Secretary.
[FR Doc. 03-25970 Filed 10-14-03; 8:45 am]
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