[Federal Register Volume 72, Number 73 (Tuesday, April 17, 2007)]
[Rules and Regulations]
[Pages 19112-19116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7229]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 35 and 37
[Docket Nos. RM05-17-000 and RM05-25-000; Order No. 890]
Preventing Undue Discrimination and Preference in Transmission
Service
Issued April 11, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Order granting extension of compliance action dates.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
extending certain deadlines for compliance actions required by Order
No. 890, the final rule issued in this proceeding on February 16, 2007.
DATES: The date by which transmission providers must implement certain
reforms adopted in Order No. 890 is hereby extended by 60 days, to July
13, 2007, as set forth in Appendix A of this order.
FOR FURTHER INFORMATION CONTACT: W. Mason Emnett (Legal Information),
Office of the General Counsel--Energy Markets, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202) 502-6540.
SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher,
Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon
Wellinghoff.
Order Granting Extension of Compliance Action Dates
1. On March 21, 2007, Tampa Electric Company (Tampa Electric)
together with Florida Power & Light Company (FPL) filed a motion for
extension of deadlines relating to the implementation of additional
functionality for the Open Access Same-Time Information System (OASIS)
and the posting of new transmission-related metrics as outlined in
Order No. 890.\1\ On March 29, 2007, Tampa Electric and FPL
supplemented their motion with a preliminary assessment of technical
work required to implement the additional OASIS functionality and the
posting of new transmission-related metrics.
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\1\ Preventing Undue Discrimination and Preference in
Transmission Service, Order No. 890, 72 FR 12266 (March 15, 2007),
FERC Stats. & Regs. ] 31,241 (2007), reh'g pending (Order No. 890).
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2. On March 23, 2007, the Edison Electric Institute (EEI) filed a
motion requesting that the Commission extend to 120 days from
publication of Order No. 890 in the Federal Register all deadlines
currently set as less than 120 days as applied to transmission
providers that are not members of an Independent System Operator (ISO)
or Regional Transmission Organization (RTO). On March 29, 2007, EEI
filed a second motion to extend the filing deadline for ISO and RTO
transmission providers' ``strawman'' proposals detailing compliance
with each of the nine planning principles adopted in Order No. 890.
3. On April 3, 2007, E.ON U.S. LLC (E.ON) filed a motion stating
its support of EEI's request to allow utilities not participating in an
ISO or RTO an additional 60 days to comply with the non-rate terms and
conditions set out in Order No. 890, but requesting a 90-day extension
for submission of its Federal Power Act (FPA) section 206 compliance
filing due to E.ON's particular circumstances.
4. Finally, on April 9, 2007, Portland General Electric Company
(PGE) filed a motion seeking an extension of deadlines associated with
the optional filing under FPA section 205 regarding previously-approved
variations from the pro forma Open Access Transmission Tariff (OATT).
5. For the reasons outlined below, the Commission grants in part
the March 23, 2007, motion of EEI and denies the March 29, 2007, motion
of EEI, as well as the subsequent motions of E.ON and PGE. Accordingly,
the joint motion of Tampa Electric and FPL, as supplemented, is
rejected as moot.
I. Background
6. On February 16, 2007, the Commission issued Order No. 890 on
Preventing Undue Discrimination and Preference in Transmission Service
in these dockets.\2\ In Order No. 890, the Commission amended its
regulations and the pro forma OATT, adopted in Order No. 888,\3\ to
ensure that transmission services are provided on a basis that is just,
reasonable and not unduly discriminatory or preferential. The
Commission designed Order No. 890 to: (1) Strengthen the pro forma OATT
to ensure that it achieves its original purpose of remedying undue
discrimination; (2) provide greater specificity to reduce opportunities
for undue discrimination and facilitate the Commission's enforcement;
and (3) increase transparency in the rules applicable to planning and
use of the transmission system.
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\2\ Id.
\3\ 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 21540 (May 10, 1996), FERC Stats. & Regs. ]
31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12274 (Mar.
14, 1997), FERC Stats. & Regs. ] 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) (TAPS v. FERC), aff'd sub nom. New York v. FERC, 535 U.S.
1 (2002).
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7. Order No. 890 established a number of compliance requirements
with corresponding deadlines, each necessary to achieve its stated
goals. Among other things, transmission providers that have not been
approved as ISOs or RTOs, and whose transmission facilities are not
under the control of an ISO or RTO, were directed to submit, within 60
days after publication of Order No. 890 in the Federal Register, i.e.,
May 14, 2007, filings under section 206 of the FPA that contain the
non-rate terms and
[[Page 19113]]
conditions set forth in the order.\4\ Within 75 days of publication,
i.e., May 29, 2007, all transmission providers must post a ``strawman''
proposal for compliance with each of the nine planning principles
adopted in Order No. 890.\5\ The Commission also requested that the
North American Electric Reliability Corporation (NERC) and the North
American Energy Standards Board (NAESB) file, within 90 days from
publication, i.e., June 13, 2007, a joint status report that contains a
work plan for completion of business practices and standards related to
calculation of Available Transfer Capability (ATC).\6\ NAESB was
further requested to file a status report and work plan for the
completion of the OASIS functionality or uniform business practices
related to reforms adopted in Order No. 890.\7\ The Commission required
each transmission provider to develop, within 90 days from publication,
i.e., June 13, 2007, its own OASIS functionality or business practices
necessary to implement certain reforms ordered in Order No. 890 pending
completion of the NERC and NAESB processes.\8\ Finally, the Commission
required transmission providers to comply with a number of new
regulations by Order No. 890's effective date of May 14, 2007.
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\4\ Order No. 890 at P 139.
\5\ Id. at P 135.
\6\ Id. at P 223.
\7\ Id. at P 141.
\8\ Id.
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8. In addition to these compliance obligations, the Commission
provided an optional 205 procedure for transmission providers seeking
to maintain previously-approved variations from the Order No. 888 pro
forma OATT that were affected by the reforms adopted in Order No. 890.
To the extent a transmission provider wishes to maintain these
previously-approved variations, the Commission stated that the
transmission provider would have to demonstrate that the relevant
tariff provisions continue to be consistent with or superior to the pro
forma OATT as modified by Order No. 890. The Commission provided that
such demonstrations could be made in an FPA section 205 filing
submitted within 30 days after publication of Order No. 890 in the
Federal Register, i.e., April 16, 2007. The Commission stated that each
applicant should request that these proposed tariff provisions be made
effective as of the date of the transmission provider's section 206
compliance filing.\9\
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\9\ Id. at P 139.
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II. Motions for Extension
9. Tampa Electric and FPL seek extension of compliance deadlines
related to the implementation of additional OASIS functionality and the
posting of new transmission-related metrics. As explained in their
motion, Tampa Electric and FPL currently use FLOASIS, the OASIS for
transmission providers in Florida. Tampa Electric and FPL state that
they are currently negotiating an agreement with a new host, Open
Access Technology International, Inc. (OATI), and anticipate that their
new OASIS system will not be operational until July 1, 2007. If forced
to meet the deadlines set forth in Order No. 890, Tampa Electric and
FPL contend that they would be required to develop new software and
manual processes on the current FLOASIS, which would become obsolete
once they switch to the new OATI-hosted OASIS platform.
10. EEI, on behalf of transmission providers not affiliated with an
ISO or RTO, seeks in its March 23, 2007, motion an extension of certain
of the compliance requirements in Order No. 890 involving deadlines set
at less than 120 days from publication of the order in the Federal
Register. This would include: the FPA section 206 compliance filing
requirement, the ``strawman'' proposal deadline, and the deadlines set
for the NERC and NAESB status reports. EEI contends that the volume and
nature of the compliance requirements set forth in Order No. 890 render
these corresponding deadlines infeasible. To support its argument, EEI
describes in detail many of the steps it believes are necessary for
completion of the compliance requirements, such as the development of
new software or modifications to existing software.
11. In addition, EEI states particular concern regarding the time
needed to develop software upgrades necessary to implement conditional
firm service and planning redispatch. EEI also contends the current
compliance schedule does not allow sufficient time to ensure that the
new software and processes will not harm reliability. EEI therefore
requests reconsideration of the Commission's decision to make reforms
involving NERC and NAESB activities effective in advance of associated
development of business practices and standards. EEI requests the
Commission abandon its requirement that transmission providers
implement reforms on an individual basis prior to issuance of the final
NERC and NAESB rules.
12. EEI also requests the Commission delay other compliance
deadlines until the Commission issues further clarification of Order
No. 890. Specifically, EEI contends that without additional guidance
from the Commission regarding revising transmission rates to reflect
capacity benefit margin (CBM) set-aside, and prior to the issuance of
the final NERC and NAESB standards, there may be significant
inconsistencies in rate design among utilities, which could lead to
hearing and settlement proceedings. EEI also states that transmission
providers that make firm system sales need further clarification
regarding the manner in which network resources should be designated
and that, in the absence of such guidance, the Commission should not
penalize transmission providers for their attempts to implement Order
No. 890.
13. EEI further asks that the Commission clarify that the changes
to Schedule 4 and Schedule 9 regarding imbalance charges need not
become effective until the billing cycle immediately following the
effective date of the revised pro forma OATT. EEI argues that requiring
transmission providers to bill in two different billing methods for the
same service over the course of a month would create the need for a
complex software workaround.
14. In conjunction with its various requests, EEI proposes to
organize a public conference on or about May 14, 2007, for participants
to discuss progress made in their compliance efforts and any obstacles
that have arisen.
15. On March 29, 2007, EEI filed a second motion on behalf of
transmission providers that are members of an ISO or RTO, requesting a
similar extension for filing of the ``strawman'' proposals for those
entities. EEI contends in this motion that it is not feasible for ISOs
and RTOs, and their transmission-owning members, to obtain robust input
from a broad range of stakeholders in time to meet the current 75-day
deadline. According to EEI, this deadline will be particularly
challenging for most ISOs, RTOs and transmission owners because of the
time required to coordinate planning obligations.
16. Answers to the EEI motions were filed by the American Public
Power Association, National Rural Electric Cooperative Association,
Transmission Access Policy Study Group, and Transmission Dependent
Utility Systems (together the APPA Joint Commenters), the Mid-Continent
Power Pool (MAPP) on behalf of its public utility members, Puget Sound
Energy, Inc. (Puget), and the Electric Power Supply Association (EPSA).
MAPP and Puget state full support of EEI's March
[[Page 19114]]
23, 2007, motion, reiterating many of the arguments made by EEI. While
the APPA Joint Commenters do not object to the extensions of time
requested by EEI, they request that the Commission provide at least 45
days to comment on transmission providers' compliance filings if the
requested extensions are granted. In support of their request, the APPA
Joint Commenters contend that consolidation of the 60-day, 75-day, and
90-day deadlines into a single 120-day deadline will impose increased
burdens on interested parties reviewing those previously-staggered
filings and postings. EPSA states its support of the APPA Joint
Commenters' request.
17. The APPA Joint Commenters also express particular concern with
two elements of the EEI motions. First, they argue that the Commission
should only grant an extension of the requirement to complete software
modifications on a case-by-case basis and, even then, only on a showing
of clear and convincing need. Second, the APPA Joint Commenters argue
that, if the Commission grants EEI's request to delay posting of the
``strawman'' proposals, the associated technical conferences should
also be delayed in order to maintain a 15- to 45-day period for
stakeholder review of the ``strawman'' postings.
18. On April 3, 2007, E.ON filed a motion supporting EEI's request
to allow utilities not participating in an ISO or RTO an additional 60
days to comply with the non-rate terms and conditions set out in Order
No. 890. E.ON contends, however, that it is different from most stand-
alone utilities because it must coordinate compliance efforts with the
Southwest Power Pool, the independent transmission organization for
E.ON's transmission system, as well as the Tennessee Valley Authority,
which serves as the reliability coordinator for E.ON's transmission
system. E.ON therefore requests a 90-day extension to submit its FPA
section 206 compliance filing, rather than the 60-day extension
requested by EEI.
19. On April 9, 2007, PGE filed a motion requesting an extension of
the deadline to submit FPA section 205 filings relating to previously-
approved variations from the pro forma OATT. To the extent the
Commission grants EEI's request for an extension of the date to submit
the FPA section 206 compliance filings, PGE requests that the
Commission also generically extend the date of the FPA section 205
filings by 60 days. PGE further requests that, as to its own FPA
section 205 filing, the Commission permit it to delay that filing until
after the Commission issues its order on rehearing in this proceeding.
III. Commission Determination
20. The Commission partially grants EEI's request and extends the
date on which reforms adopted in Order No. 890 would have otherwise
been effective by 60 days, i.e., to July 13, 2007, except as provided
for below. Specifically, all transmission providers that have not been
approved as ISOs or RTOs, and whose transmission facilities are not
under the control of an ISO or RTO, are required to submit FPA section
206 compliance filings that contain the non-rate terms and conditions
set forth in Order No. 890 within 120 days of publication of the order
in the Federal Register, i.e., July 13, 2007. Similarly, transmission
providers must take all other actions necessary to implement the
reforms adopted in Order No. 890, except as provided for below, on or
before July 13, 2007, unless a later compliance date was otherwise
specified in the order.\10\
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\10\ Order No. 890 also requested NERC and NAESB to submit
status reports within 90 days of publication of the order in the
Federal Register, i.e., June 13, 2007, containing work plans for
developing standards and business practices associated with reforms
adopted in Order No. 890. The limited extension of time granted here
applies to actions to be taken by transmission providers and, thus,
the NERC and NAESB filing deadlines remain unchanged.
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21. With regard to the requirement for transmission providers to
post ``strawman'' proposals for compliance with the nine planning
principles adopted in Order No. 890, we deny EEI's requests for
extension and retain the requirement that such postings be made within
75 days of publication of the order in the Federal Register, i.e., May
29, 2007. The ``strawman'' proposals are necessary to facilitate the
technical conferences that the Commission has scheduled in June 2007 to
encourage discussion as to how transmission providers ultimately intend
to fulfill their planning requirements. Due to the delay in Federal
Register publication, the ``strawman'' posting date is more than 100
days after Order No. 890 was issued, which is consistent with EEI's
assertion that the Commission typically provides 90 to 120 days for RTO
and ISO efforts that require stakeholder participation.\11\ In any
event, the ``strawman'' proposals are only one aspect of the compliance
process. The actual Attachment K compliance filing deadline is not
until October 11, 2007. Transmission providers will therefore have
roughly four months to prepare their Attachment K filings after the
Commission holds technical conferences to discuss the ``strawman''
proposals. We believe this is sufficient time to ensure timely
compliance with the Attachment K filing deadline.
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\11\ EEI March 29 Motion at 2.
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22. With regard to imbalance charges, however, we agree that it
would be reasonable for a transmission provider to extend the date on
which the imbalance-related provisions adopted in Schedule 4 and
Schedule 9 become effective until the first day of the billing cycle
following the effectiveness of the underlying imbalance-related
reforms. Specifically, transmission providers submitting their
imbalance provisions in section 206 filings on or before July 13, 2007,
may specify that those provisions will become effective on the first
day of the billing cycle following the filing date. We agree that this
modest extension of the effectiveness of imbalance-related reforms will
facilitate the implementation of those reforms.
23. The Commission is not convinced that EEI's remaining requests
for extension or further generic modification of Order No. 890's
compliance obligations are necessary. Although the Commission is aware
of the challenges of compliance with Order No. 890, we are not
persuaded that the related deadlines, as modified herein, are
unreasonable or unclear. Order No. 890 is the result of a multi-year
proceeding during which the Commission sought and received multiple
rounds of comments from over 300 parties. The various compliance
obligations in Order No. 890, including CBM-related modification of
rates and implementation of interim workarounds pending development of
final NERC and NAESB standards and business practices, were established
after full consideration of these comments and the Commission's
determination that related reforms are necessary to remedy the
potential for undue discrimination.\12\ EEI has not persuaded us that
generic modification of those obligations pending final standards and
practice development by NERC and
[[Page 19115]]
NAESB would be appropriate.\13\ Any issues specific to a transmission
provider's ability to comply with the requirements of Order No. 890, as
modified herein, may be considered during the compliance process on a
case-by-case basis. For similar reasons, we deny the APPA Joint
Commenters' request to establish in advance of the compliance process
the number of days parties will have to comment on compliance filings.
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\12\ With specific regard to the CBM-related rate changes
required in Order No. 890, we believe that EEI's concerns are
misplaced. Order No. 890 expressly contemplated transmission
providers proposing necessary changes to rate design to ensure that
point-to-point customers do not pay a transmission charge that
includes the cost of the CBM set-aside, provided that the subject of
such rate filings be limited solely to the issue of CBM-related cost
recovery. See Order No. 890 at P 263. Nothing in Order No. 890
precludes transmission providers from proposing modification of
rates for other services (such as network service) as necessary to
recover CBM-related costs previously paid by point-to-point
customers and, therefore, it is not necessary to extend the deadline
for those filings.
\13\ Although Order No. 890 directed NERC and NAESB to develop
standards and business practices necessary to implement ATC-related
reforms within 270 and 360 days of publication of the order in the
Federal Register, respectively, it did not establish a specific
timeframe for NAESB's development of business practices necessary
for remaining reforms. Instead, NAESB was requested to submit a work
plan within 90 days of publication of the order in the Federal
Register, upon review of which the Commission will issue an order
establishing further compliance deadlines as necessary. See Order
No. 890 at P 141.
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24. The Commission also denies E.ON's request to extend its FPA
section 206 compliance filing deadline by 90 days instead of the 60-day
extension requested by EEI, granted above. All transmission providers
must coordinate their compliance efforts with personnel internal and
external to their organizations. We recognize these efforts will be
complicated but, as explained above, they are the logical outgrowth of
this multi-year proceeding. E.ON fails to justify the need for
differential treatment during the compliance process.
25. Finally, the Commission denies PGE's request to extend the FPA
section 205 deadlines relating to previously-approved variations from
the pro forma OATT. The optional section 205 procedure was established
so that transmission providers would have an opportunity to demonstrate
that any previously-approved variations continue to be consistent with
or superior to the terms and conditions of the reformed pro forma OATT,
thereby allowing those transmission providers to retain those
variations during implementation of Order No. 890. It is not necessary,
as PGE assumes, to extend the 30-day deadline for submission of the
section 205 filings simply because we extend the deadline for the
section 206 compliance filings above.\14\ The purpose of each filing is
distinct and PGE offers no reason as to why transmission providers may
need additional time to prepare their section 205 filings, which relate
only to tariff provisions the Commission has already reviewed and
approved. Moreover, deferring the deadline for PGE's FPA section 205
filing until after our order on rehearing in this proceeding would not
achieve PGE's stated goal of ensuring that its previously-approved
deviations remain in effect during the compliance process.\15\ In the
section 206 compliance filing, each transmission provider must conform
the non-rate terms and conditions of its OATT to the reformed non-rate
terms and conditions of the pro forma OATT. Failure to request that
previously-approved variations remain in place in advance of submitting
the compliance filing will result in those provisions being eliminated
during the compliance process.
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\14\ As provided in Order No. 890, however, transmission
providers should request that the tariff provisions proposed in
their optional 205 filings be made effective as of the date the
transmission provider submits its section 206 compliance filing,
which must now be on or before July 13, 2007. See id. at P 139.
\15\ See PGE Motion at 3.
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26. In light of the extension of certain deadlines for compliance
with Order No. 890 provided for above, the request for extension
submitted by FPL and Tampa Electric is moot.
The Commission Orders
(A) The date on which the reforms adopted in Order No. 890 would
have otherwise been effective is hereby extended by 60 days, i.e., to
July 13, 2007, except as otherwise provided in the body of this order.
(B) The request for extension submitted by FPL and Tampa Electric
is dismissed as moot.
(C) The request for extensions submitted by E.ON and PGE are
denied.
(D) The Secretary shall promptly publish a copy of this order in
the Federal Register.
By the Commission.
Kimberly D. Bose,
Secretary.
Appendix A: Summary of Compliance Filing Requirements
For a more detailed description of compliance obligations please
refer to Order No. 890 paragraph number. For further information
related to Order No. 890, such as electronic versions of the pro
forma OATT showing tariff changes adopted in Order No. 890 in
redline/strikeout format, and further information regarding
docketing of compliance filings and specific filing instructions,
please visit our Web site at the following location: http://www.ferc.gov/ industries/electric/indus-act/oatt-reform.asp.
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Deadline (days after
publication in the Fed. Compliance action Order No. 890
Reg.) paragraph No.
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30 (4/16/2007).............. Optional Implementation P 139
FPA section 205 filings
allowing transmission
providers to propose
previously approved
variations from the pro
forma OATT that have
been affected by pro
forma OATT reforms to
remain in effect subject
to a demonstration that
such variations continue
to be consistent with or
superior to the revised
pro forma OATT (non RTO/
ISO transmission
providers). Such
optional filings must
request a 90 day
effective date to
facilitate Commission
review under section 205.
75 (5/29/2007).............. Transmission Providers P 443
must post a ``strawman''
proposal for compliance
with each of the nine
planning principles
adopted in Order No.
890. This may be posted
on the Transmission
Providers Web site or
its OASIS site.
90 (6/13/2007).............. NERC/NAESB status report P 223
and work plan for
completion of ATC
related business
practices and standards.
NAESB status report and P 141
work plan for completion
of OASIS functionality
or uniform business
practices (other than
those related to ATC).
120 (7/13/2007)............. Transmission Providers P 135
that have not been
approved as ISOs or
RTOs, and whose
transmission facilities
are not under the
control of an ISO or
RTO, must submit FPA
section 206 filings that
contain the non-rate
terms and conditions set
forth in Order No. 890.
These filings need only
contain the revised
provisions adopted in
Order No. 890.
Transmission providers
utilizing the optional
implementation FPA
section 205 filing
described above, need
only submit tariff
sheets necessary to
implement the remaining
modifications required
under the Order No. 890,
i.e., modifications
related to tariff
provisions that did not
implicate previously-
approved variations.
120 (7/13/2007)............. Transmission Providers P 263
must submit redesigned
transmission charges
that reflect the
Capacity Benefit Margin
set-aside through a
limited issue section
205 rate filing as part
of their initial ATC
related compliance
filings.
[[Page 19116]]
180 (9/11/2007)............. Submit compliance filings P 140
with Attachment C (ATC)
of the pro forma OATT.
210 (10/11/2007)............ ISOs and RTOs, and P 157
transmission providers P 161
located within an ISO/
RTO footprint, submit
FPA section 206 filings
that contain the non-
rate terms and
conditions set forth in
Order No. 890. These
filings need only
contain the revised
provisions adopted in
Order No. 890 or a
demonstration that
previously approved
variations continue to
be consistent with or
superior to the revised
pro forma OATT.
210 (10/11/2007)............ Submit compliance filings P 140
with Attachment K P 422
(Planning) of the pro
forma OATT or RTOs and
ISOs file a
demonstration that their
planning processes are
consistent with or
superior to the planning
principles in Order No.
890.
N/A......................... N/A Transmission P 325
Providers must file a
revised Attachment C to
incorporate any changes
to NERC's and NAESB's
reliability and business
practice standards to
achieve consistency in
ATC within 60 days of
completion of the NERC
and NAESB processes.
N/A......................... After the submission of P 135
FPA section 206
compliance filings,
transmission providers
may submit FPA section
205 filings proposing
rates for the services
provided for in the
tariff, as well as non-
rate terms and
conditions that differ
from those set forth in
Order No. 890 if those
provisions are
``consistent with or
superior to'' the pro
forma OATT.
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[FR Doc. E7-7229 Filed 4-16-07; 8:45 am]
BILLING CODE 6717-01-P