[Federal Register Volume 72, Number 83 (Tuesday, May 1, 2007)]
[Proposed Rules]
[Pages 23778-23779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8236]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket Nos. RM05-10-000 and AD04-13-000]


Imbalance Provisions for Intermittent Resources; Assessing the 
State of Wind Energy in Wholesale Electricity Markets

Issued April 25, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Withdrawal of notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission is withdrawing its 
proposal to amend its regulations to require public utilities to append 
to their open access transmission tariffs (OATTs) an intermittent 
generator imbalance service schedule in light of the imbalance-related 
reforms adopted in Order No. 890, 72 FR 12266 (Mar. 15, 2007).

DATES: The notice of proposed rulemaking published on April 14, 2005, 
at 70 FR 21349, is withdrawn as of May 1, 2007.

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.
Daniel Hedberg (Technical Information), Office of Energy Markets and 
Reliability, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-6243.

SUPPLEMENTARY INFORMATION: 
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, 
Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

Withdrawal of Notice of Proposed Rulemaking

    1. On April 14, 2005, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) in this proceeding.\1\ For the reasons set forth 
below, we are withdrawing the NOPR and terminating this rulemaking.
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    \1\ Imbalance Provisions for Intermittent Resources Assessing 
the State of Wind Energy in Wholesale Electricity Markets, Notice of 
Proposed Rulemaking, 70 FR 21349 (Apr. 26, 2005), FERC Stats. & 
Regs. ] 32,581 (2005).
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    2. In the NOPR, the Commission proposed to clarify and amend 
imbalance-related provisions in the pro forma Open Access Transmission 
Tariff (OATT) as applied to intermittent resources.\2\ The Commission 
concluded that, although the number of intermittent resources had grown 
since the adoption of the pro forma OATT in Order No. 888,\3\ such 
resources were historically hesitant to take service under the pro 
forma OATT, thereby accessing broader markets, due to the application 
of imbalance provisions that were designed to apply to resources with 
the ability to control fuel input and thus schedule their energy with 
precision. The Commission concluded that the imbalance provisions of 
the Order No. 888 pro forma OATT may no longer be just, reasonable or 
not unduly discriminatory or preferential as applied to intermittent 
resources that by nature are weather-driven.\4\ The Commission 
therefore proposed to establish a standard schedule under the pro forma 
OATT to address generator imbalances solely for intermittent resources 
and sought comment on issues related to that proposal.
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    \2\ For purposes of the NOPR, an intermittent resource was 
defined as an electric generator that is not dispatchable and cannot 
store its fuel source and therefore cannot respond to changes in 
system demand or respond to transmission security constraints.
    \3\ Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Order No. 888, 61 FR 21,540 (May 10, 1996), FERC Stats. & 
Regs. ] 31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12,274 
(March 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, 
remanded in part on other grounds sub nom. Transmission Access 
Policy Study Group, et al. v. FERC, 225 F.3d 667 (D.C. Cir. 2000), 
aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
    \4\ The Commission began exploring these issues at a technical 
conference held on December 1, 2004, in Denver, Colorado in Docket 
No. AD04-13-000. Other transmission-related issues regarding wind 
energy were also discussed at the technical conference and in post-
technical conference comments, such as the interconnection process, 
credits for transmission upgrades, and adoption of a conditional 
firm transmission product. These issues were not addressed in the 
NOPR, which was limited to the imbalance provisions of the pro forma 
OATT as they relate to intermittent resources.
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    3. Since issuance of the NOPR, the Commission has completed its 
OATT reform rulemaking in Docket Nos. RM05-25-000, et al., issuing 
Order No. 890 on February 16, 2007.\5\ Among other things, Order No. 
890 adopted a new Schedule 9 to govern generator imbalances. Under 
Schedule 9, imbalance charges ``must be based on incremental cost or 
some multiple therefore'' and ``must provide an incentive for accurate 
scheduling, such as by increasing the percentage of the adder above 
(and below) incremental cost as the deviation becomes larger.'' \6\ Of 
particular relevance to this proceeding, the Commission also required 
that imbalance provisions ``account for the special circumstances 
presented by intermittent generators and their limited ability to 
precisely forecast or control generation levels, such as waiving the 
more punitive adders associated with higher deviations.'' \7\
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    \5\ See 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.
    \6\ Order No. 890 at P 663.
    \7\ Id. The Commission also adopted a standard definition of 
intermittent resource that is identical to that proposed in this 
proceeding. See Id. at P 666.
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    4. As a result of the imbalance-related reforms adopted in Order 
No. 890, and in particular the requirement that generator imbalance 
provisions in each transmission provider's OATT take into account an 
intermittent resources' limited ability to forecast or control 
generation levels, the Commission concludes that it is no longer 
necessary to address the NOPR proposal to add to the pro forma OATT a 
generator imbalance schedule solely for intermittent resources. The 
reforms adopted in Order No. 890 adequately ensure that the imbalance 
provisions of the pro forma OATT will not result in service to 
intermittent resources that is unjust, unreasonable, or unduly 
discriminatory or preferential.
    5. The Commission therefore withdraws the NOPR and terminates this 
rulemaking proceeding.
    The Commission orders:
    Docket No. RM05-10-000 is hereby terminated.


[[Page 23779]]


    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E7-8236 Filed 4-30-07; 8:45 am]
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