[Federal Register Volume 70, Number 113 (Tuesday, June 14, 2005)]
[Notices]
[Pages 34468-34470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11535]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM05-16-000]


Generator Run Status Information

May 27, 2005.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of inquiry.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) seeks 
comments on whether the Commission should require jurisdictional 
generators to provide the Commission with confidential access to 
generator run status information.

DATES: Comments on this Notice of Inquiry are due on August 15, 2005.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. Commenters unable to 
file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street, NE., Washington, DC 20426. Refer to the 
Comment Procedures section of the NOI for additional information on how 
to file comments.

FOR FURTHER INFORMATION CONTACT:

Patricia Morris (Technical Information), Office of Market Oversight and 
Investigation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, [email protected].
Michelle Veloso (Technical Information), Office of Markets, Tariffs and 
Rates, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, [email protected].
Edward Fowlkes (Technical Information), Office of Energy Projects, 
Federal Energy Regulatory Commission, 888 First Street, NW., 
Washington, DC 20426, [email protected].
Joseph C. Lynch (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, [email protected].

SUPPLEMENTARY INFORMATION: 

Notice of Inquiry

    1. The Commission is seeking comments on the need for access to 
generator run status information from all public utility generators on 
a confidential basis. Generator run status includes information on the 
commitment, operating performance and capability of generating units 
connected to the interconnected transmission system. Confidential 
access to this information would allow the Commission to better oversee 
markets by ensuring that generation resources are represented 
accurately and would allow the Commission to promptly monitor and 
investigate market abuses and unduly discriminatory behavior thereby 
upholding the Commission's standards of conduct.

Background

    2. With the issuance of Order No. 888, the Commission required 
public utilities that own, control or operate interstate transmission 
facilities to file open access transmission tariffs that offer others 
the same transmission service that they provide themselves. In doing 
this, the Commission opened wholesale power sales to greater 
competition.\1\ Order No. 889, issued in tandem with Order No. 888, 
required transmission providers to establish or participate in an Open 
Access, Same-Time Information System (OASIS) and to comply with 
prescribed standards of conduct.\2\
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    \1\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21,540 (May 10, 1996), FERC Stats. & Regs., 
Regulations Preambles January 1991-June 1996 ] 31,036 (1996), order 
on reh'g, Order No. 888-A, 62 FR 12,274 (March 4, 1997), FERC Stats. 
& Regs., Regulations Preambles, July 1996-December 2001 ] 31,048 
(1997), order on reh'g, Order No. 888-B, 81 FERC ] 61,248 (1997), 
order on reh'g, Order No. 888-C, 82 FERC ] 61,046 (1998), aff'd in 
relevant part sub nom. Transmission Access Policy Study Group v. 
FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd sub nom. New York v. 
FERC, 535 U.S. 1 (2002).
    \2\ Open Access Same-Time Information System and Standards of 
Conduct, Order No. 889, 61 FR 21,737 (1996), FERC Stats. & Regs., 
Regulations Preambles July 1996-December 2000 ] 31,035 (1996), order 
on reh'g, Order No. 889-A, 62 FR 12,484 (1997), FERC Stats. & Regs., 
Regulations Preambles July 1996-December 2000 ] 31,049 (1997), reh'g 
denied, Order No. 889-B, 81 FERC ] 61,253 (1997).
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    3. The standards of conduct required, among other things, that 
companies separate their transmission operations from their power sales 
marketing/merchant functions. The standards of conduct were designed to 
prevent employees of a public utility, or any of its affiliates, 
engaged in the power sales

[[Page 34469]]

marketing/merchant function from obtaining preferential access to 
transmission information not available to all customers at the same 
time through public posting on OASIS.
    4. The Commission notes that, while OASIS provides information on 
transmission availability, no similar information is available for 
generation. The Commission's OASIS II Advanced Notice of Proposed 
Rulemaking (ANOPR), issued in July 2000, contemplated generator run 
status information requirements. The ANOPR asked for industry comment 
on whether generator run status information should be incorporated into 
OASIS Phase II and posted for public disclosure.\3\ Most of the 
comments raised confidentiality concerns.
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    \3\ Open Access Same-Time Information System Phase II, 92 FERC ] 
61,047 (2000). The Commission has not yet implemented OASIS Phase 
II.
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Generator Run Status

    5. In the wake of Order Nos. 888 and 889, the number of companies 
that generate and sell power and the volume of wholesale trading have 
increased significantly. Markets have evolved to become more complex 
and fluid, and now involve the trading of both physical and financial 
products. This situation has resulted in increased opportunities for 
the strategic use of generation resources. The Commission monitors the 
markets to determine whether there is market manipulation.
    6. The Commission collects transactional data on sales and 
purchases through the Electric Quarterly Reports, however, this data 
does not fully inform the Commission on the real-time operation of 
supply. By obtaining confidential access to generator run status 
information, the Commission can complete the picture, and see the 
electric energy system as a whole.
    7. In order to understand the problem facing the Commission, it is 
necessary to define generator run status. Generator run status 
reporting would include information on the commitment, operating 
performance and capability of generating units connected to the 
interconnected electric transmission system. Generator run status 
information includes: (a) The status of breakers (open/closed); (b) 
generating unit megawatts (MW) and megavolt-ampere reactive (MVAR) 
capability based on generator-tested performance capability data; (c) 
MW and MVAR net output; (d) the status of automatic voltage control 
facilities; (e) unit dispatch levels; (f) unit outages or deratings, 
including the reasons for the outages or deratings; (g) the date and 
time when the unit was taken out of service or derated and the 
estimated (and, later, the actual) date and time when the unit was 
expected back online following an outage or derating; and (h) 
generator-tested performance capability data.
    8. Generator run status information can help the Commission to 
identify the selective withholding of generation and the 
misrepresentation of generating capacity to influence market prices. 
During the Western energy crisis the potential was demonstrated for 
market participants to use generation resources to thwart competition. 
Between January 2000 and June 2001, market participants in the 
California ISO sold ancillary services in the day-ahead market, even 
though they did not have the required resources to provide the 
ancillary services. Market participants also sold non-firm energy as 
firm energy without possessing the dedicated resources necessary to 
supply firm energy.\4\
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    \4\ See, e.g., American Electric Power Service Corporation, 103 
FERC ] 61,345 at P51-55 (2003), reh'g denied, 106 FERC ] 61,020 
(2004). See also, Final Report on Price Manipulation in Western 
Markets: Fact Finding Investigation of Potential Manipulation of 
Electric and Natural Gas Prices, Docket No. PA02-2-000 (March 2003) 
(Final Report).
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    9. The Commission also recognizes the potential for control area 
operators and scheduling authorities with their own generation or with 
generation affiliates to dispatch their units to the prejudice of other 
lower-priced generation. Although public utilities usually dispatch 
generating units based on the application of an algorithm to system 
conditions and constraints, the algorithm cannot take all conditions 
into consideration. A system operator may dispatch generation out-of-
merit \5\ due to changing forecasts or sudden, extraneous events in 
current operating conditions such as generator or transmission system 
forced outages. This leaves open the opportunity to dispatch their own 
or their affiliate's higher-cost generating units, rather than 
dispatching a competitor's lower cost generating units.
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    \5\ Out-of-merit dispatch is a dispatch sequence in which the 
least cost generator is not dispatched to supply the next increment 
of system load.
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    10. The Commission recognizes the potential impact of improper 
generator dispatch upon transmission system capability and appreciates 
that changes in generator run status may affect third parties due to 
reduced transfer capability. Reduced transfer capability diminishes the 
capacity for market participants to move power. Generator run status 
information can allow the Commission to monitor the effects of 
generator operations on transmission system performance.
    11. Access to confidential generator run status information would, 
for example, allow the Commission to: (a) Ensure the accurate 
representation of generating capacity; (b) identify patterns of 
strategic behavior; (c) monitor for undue discrimination or preference 
in the dispatch of generation resources; and (d) better assess the 
validity of complaints. Currently, the Commission can obtain the data 
necessary to accomplish these goals through individual data requests 
and by subpoena in formal investigations. This necessarily occurs long 
after the events at issue. More timely access to this information will 
permit the Commission, among other things, to more promptly address 
misuse and misrepresentation of generator availability to influence 
market behavior.

Considerations in Collecting Generator Run Status Information

    12. In response to the OASIS II ANOPR, the North American Electric 
Reliability Council's (NERC) Electronic Scheduling Collaborative (ESC) 
noted that an overwhelming majority of ESC members opposed disclosure 
of generator run status information. With deference to minority 
opinion, the ESC filed two alternative position papers on generator run 
status, one in favor of disclosure and the other against.\6\
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    \6\ Response of the Electronic Scheduling Collaborative (Docket 
No. RM00-10-000 July 14, 2000).
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    13. Those favoring the disclosure of generator run status 
information maintained that disclosure of generator run status 
information would provide appropriate market signals and create 
disincentives for market participants to improperly withhold capacity 
from the market, while providing essential information to directly 
measure the exercise of horizontal market power. The position paper 
supporting disclosure of generator run status explained:

    Generator run status is a critical element of information used 
by many entities to ensure the operating security of the 
interconnected electric system. It should also be a component of the 
information base made available to all participants in the bulk 
power market to ensure appropriate market responses to real-time 
operating conditions, to provide the transparency needed for 
economically efficient markets, and to add discipline and market 
power mitigation

[[Page 34470]]

through analysis of data to reveal patterns of strategic 
behavior.\7\

    \7\ Response of ESC, Generator Run Status: Position Paper 
Supporting Data Disclosure to the Market Within OASIS Phase II, 
Attachment 7 at 2 (January 29, 2001).
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    14. The position paper opposing the disclosure of generator run 
status information contended that generator run status information is 
proprietary, commercially sensitive information. It argued that a 
generating facility is the private property of its owners and that such 
information is proprietary. It also asserted that disclosure of such 
information to the market could devalue the asset and ``essentially 
represents a confiscation of a portion of the asset itself.'' \8\ Those 
objecting to the disclosure of generator run status information further 
contended that making generator run status information generally 
available would allow some participants in the market to gain an unfair 
advantage over others.
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    \8\ Response of ESC, Generator Run Status: Position Paper 
Opposing Data Disclosure to the Market Within OASIS Phase II 
Attachment 7 at 5 (January 29, 2001).
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    15. The Commission is persuaded that certain information pertaining 
to generator characteristics and operation is proprietary and 
commercially sensitive. However, the Commission also believes that 
knowledge by market participants of current market conditions is vital 
to achieve a fully competitive, and least-cost market. Therefore, the 
Commission is soliciting responses relating to the confidential 
treatment of the information versus the release of certain generator 
run status data elements that could be made available to the 
marketplace to satisfy these objectives without compromising the 
legitimate competitive position of generators, and which information 
should be kept confidential. The Commission intends to respect 
commercially sensitive information by collecting and maintaining 
commercially sensitive information on a confidential basis.

Comments Requested

    16. The Commission encourages comments regarding the topics above. 
In addition, the Commission seeks responses to the following specific 
questions:
    a. Which data elements of generator run status, listed previously, 
should the Commission collect or have access to? In addition, please 
comment, among other things, on whether the Commission should collect: 
(1) Generator logs for all 8,760 hours of the year; (2) balancing 
authority operating logs; (3) raw data as provided to NERC for its GADS 
database; (4) capability performance testing results; and (5) 
equivalent demand forced outage rate (EFORd) data.
    b. Should the Commission collect this generator run status 
information on a regular basis, or instead require public utility 
generators to maintain generator run status information to provide to 
the Commission on short notice when requested?
    c. How is this data currently collected by industry participants? 
What would be the burden on the electric industry to make this 
information on generator run status available to the Commission?
    d. Is there other information that would be more appropriate to 
collect, such as that obtained by NERC for their Generator Availability 
Data System (GADS)?
    e. What should be the frequency of reporting/collection? Should the 
Commission request generator run status information for the peak 
operating hour each day, or is some other period more appropriate?
    f. What real-time data might facilitate a more efficient market by 
enabling market participants to respond to current conditions?
    g. How might the reporting requirements differ between regions with 
organized markets under RTOs and ISOs versus those without organized 
markets?
    h. Which specifically, of the generator run status data elements 
could be made available to market participants and which should be 
withheld due to their commercial sensitivity. Should some of the data 
originally held confidentially be released publicly after a set time 
period?

Comment Procedures

    17. The Commission invites interested persons to submit comments on 
these matters and any related matters or alternative proposals that 
commenters may wish to discuss. Comments are due August 15, 2005. 
Comments must refer to Docket No. RM05-16-000, and must include the 
commenter's name, the organization represented, if applicable, and 
their commenter's address.
    18. Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. The Commission 
accepts most standard word processing formats and commenters may attach 
additional files with supporting information in certain other file 
formats. Commenters filing electronically do not need to make a paper 
filing. Commenters unable to file comments electronically must send an 
original and 14 copies of their comments to: Federal Energy Regulatory 
Commission, Office of the Secretary, 888 First Street, NE., Washington, 
DC 20426.
    19. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

Document Availability

    20. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. eastern time) at 888 First Street, NE., Room 2A, 
Washington DC 20426. E-Mail the Public Reference Room at 
[email protected] or (202) 502-8371.
    21. From the Commission's Home Page on the Internet, this 
information is available in its eLibrary. The full text of this 
document is available in the eLibrary both in PDF and Microsoft Word 
format for viewing, printing, and downloading. To access this document 
in eLibrary, type the docket number of this document, excluding the 
last three digits, in the docket number field.
    22. User assistance is available for eLibrary and the Commission's 
website during normal business hours. For assistance contact FERC 
Online Support at [email protected] or toll-free at (866) 208-
3676, or for TTY, contact (202) 502-8659.

    By direction of the Commission.
Linda Mitry,
Deputy Secretary.
[FR Doc. 05-11535 Filed 6-13-05; 8:45 am]
BILLING CODE 6717-01-P