[Federal Register Volume 74, Number 226 (Wednesday, November 25, 2009)]
[Rules and Regulations]
[Pages 61511-61512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28216]



[[Page 61511]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket Nos. RM05-17-005 and RM05-25-005; Order No. 890-D]


Preventing Undue Discrimination and Preference in Transmission 
Service

November 19, 2009.
AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Order on Clarification.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission affirms its basic 
determinations in Order Nos. 890, 890-A, 890-B, and 890-C, granting 
clarification regarding certain revisions to its regulations and the 
pro forma open-access transmission tariff, or OATT, adopted in Order 
Nos. 888 and 889 to ensure that transmission services are provided on a 
basis that is just, reasonable, and not unduly discriminatory. The 
Commission grants clarification regarding the requirement to 
undesignate network resources used to serve off-system sales.

DATES: Effective Date: This rule will become effective November 25, 
2009.

FOR FURTHER INFORMATION CONTACT: Christina Hayes, Office of the General 
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426. (202) 502-6194.

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

Order on Clarification

    1. On February 16, 2007, the Commission issued Order No. 890,\1\ 
addressing and remedying opportunities for undue discrimination under 
the pro forma Open Access Transmission Tariff (OATT) adopted in Order 
No. 888.\2\ The pro forma OATT was intended to foster greater 
competition in wholesale power markets by reducing barriers to entry in 
the provision of transmission service. In the twelve years since Order 
No. 888, however, flaws in the pro forma OATT undermined, in part, its 
ability to realize the core objective of remedying undue 
discrimination. The Commission acted in Order No. 890 to correct these 
flaws by reforming the terms and conditions of the pro forma OATT in 
several critical areas, including the calculation of available transfer 
capability (ATC), the planning of transmission facilities, and the 
conditions of services offered by each transmission provider.
---------------------------------------------------------------------------

    \1\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12266 (March 15, 2007), 
FERC Stats. & Regs. ] 31,241, order on reh'g, Order No. 890-A, 73 FR 
2984 (January 16, 2008), FERC Stats. & Regs. ] 31,261 (2007), order 
on reh'g, Order No. 890-B, 123 FERC ] 61,299 (2008), order on reh'g 
and clarification, Order No. 890-C, 126 FERC ] 61,228 (2009).
    \2\ 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 (DC 
Cir. 2000) (TAPS v. FERC), aff'd sub nom. New York v. FERC, 535 U.S. 
1 (2002).
---------------------------------------------------------------------------

    2. In Order Nos. 890-A, 890-B, and 890-C, the Commission largely 
affirmed the reforms adopted in Order No. 890. The Commission concluded 
that, taken together, these reforms will better enable the pro forma 
OATT to achieve the core objective of remedying undue discrimination in 
the provision of transmission service. In Order No. 890-C, the 
Commission granted clarification regarding the degree of consistency 
required in the calculation of ATC by transmission providers and denied 
rehearing regarding the requirement to undesignate network resources 
used to serve off-system sales. Duke Energy Corporation (Duke) has 
sought clarification of the latter determination.

I. Reforms of the OATT

A. Designation of Network Resources

    3. In Order No. 890-C, the Commission affirmed the requirement that 
network resources used to supply sales of system power off-system must 
first be undesignated.\3\ The Commission explained that transactions in 
which the buyer and seller are both located on the same transmission 
system are distinct from transactions involving sales of energy from a 
network customer to an off-system buyer. In the latter circumstance, 
the off-system buyer will not be using network service to take delivery 
from the host transmission provider but, instead, must identify the 
points of receipt and delivery for the transaction on the host 
transmission provider's system. The Commission stated that the point-
to-point transmission reservation and the corresponding resource-
specific undesignation provide the transmission provider with the 
information it needs regarding the location of particular resources 
being used by the seller to source the transaction in order to model 
the effect of the transaction on its transmission system and set aside 
ATC accordingly.
---------------------------------------------------------------------------

    \3\ See Order No. 890-C, 126 FERC ] 61,228 at P 17 (citing Order 
No. 890-B, 123 FERC ] 61,299 at P 206).
---------------------------------------------------------------------------

Request for Clarification
    4. Duke argues that the Commission's determination in Order No. 
890-C is inconsistent with the pro forma OATT and Order No. 888. Duke 
contends that Order No. 890-C indicates that network customers 
purchasing system power from an off-system seller cannot take network 
service from the off-system seller's transmission provider, but instead 
must procure point-to-point service from the transmission system on 
which the off-system seller is located. Duke asserts that this is 
inconsistent with section 31.3 of the pro forma OATT, which permits 
network loads of network customers to not be physically interconnected 
with the transmission provider from whom they take network service. 
Duke notes that the Commission has acknowledged in prior cases that, 
although not generally used for through-and-out service, network 
service can be used to serve loads on neighboring transmission 
systems.\4\ Duke seeks confirmation that, where an off-system buyer is 
buying system power from a seller that is a network customer on an 
adjacent transmission system, the off-system buyer needs transmission 
service on both the system on which the seller is located and the 
system on which the buyer is located, but that it remains the choice of 
the buyer as to whether to procure network or point-to-point service.
---------------------------------------------------------------------------

    \4\ Duke Request for Clarification (citing Midwest Indep. Trans. 
System Operator, Inc., 109 FERC ] 61,168, at P 80 (2004)).
---------------------------------------------------------------------------

    5. If the Commission confirms that an off-system buyer is permitted 
to take network service from both transmission providers, Duke 
questions whether the seller needs to undesignate specific generating 
resources or whether it can undesignate a slice of its system. Duke 
contends that resource-specific undesignations are needed only if the 
buyer is using point-to-point service on the transmission system on 
which the seller is located for delivery, not if the off-system buyer 
takes network service on that system.\5\ Duke suggests that, where the 
buyer is a network customer on both transmission systems, the reason 
for requiring resource-specific

[[Page 61512]]

undesignation by the seller is eliminated. Duke requests clarification 
that a slice of system undesignation by the seller would be appropriate 
in such circumstances.
---------------------------------------------------------------------------

    \5\ Duke Request for Clarification at 4-5 (citing Order No. 890-
C, 126 FERC ] 61,228 at P 18).
---------------------------------------------------------------------------

Commission Determination
    6. We confirm that, where an off-system buyer is buying system 
power from a seller that is a network customer on an adjacent 
transmission system, the buyer needs transmission service on both the 
system on which the seller is located and the system on which buyer is 
located, but that it remains the buyer's choice as to whether to 
procure network or point-to-point service. The Commission's reference 
in Order No. 890-C to the use of point-to-point service to take 
delivery of system power was not intended to restrict the buyer's 
choice to instead use network service. As Duke notes, there may be a 
situation in which a buyer and seller of capacity from a network 
resource both take network service on the same transmission system and 
the power is delivered under section 31.3 of the pro forma OATT to 
another transmission system on which the buyer's network load is 
located. In such a situation, both the buyer and seller of power are 
network customers of the transmission system on which the sale of power 
takes place. We clarify, to the extent necessary, that the seller in 
such a situation may support the transaction by undesignating its 
resources on a system basis.
    7. In Order No. 890-C, the Commission noted that the Reliability 
Standards governing the calculation of ATC were pending Commission 
review. Concurrent with this order, the Commission in Docket No. RM08-
19-000 is directing the North American Electric Reliability Corporation 
(NERC) to develop modifications to certain of these Reliability 
Standards to address the modeling of network resources and its impact 
on the calculation of ATC. To the extent Duke or other parties have 
concerns regarding the appropriate modeling of network resource 
designations on the calculation of ATC, the Commission encourages those 
parties to raise their concerns in NERC's standards development 
process.

II. Information Collection Statement

    8. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain information collection requirements imposed by 
an agency.\6\ The revisions to the information collection requirements 
for transmission providers adopted in Order No. 890 were approved under 
OMB Control Nos. 1902-0233. This order does not substantively alter 
those requirements. OMB approval of this order is therefore 
unnecessary. However, the Commission will send a copy of this order to 
OMB for informational purposes only.
---------------------------------------------------------------------------

    \6\ 5 CFR 1320 (2007).
---------------------------------------------------------------------------

III. Document Availability

    9. 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/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC'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.
    10. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    11. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
[email protected].

IV. Effective Date and Congressional Notification

    12. This order does not substantively alter the requirements of 
Order Nos. 890, 890-A, 890-B or 890-C and, therefore, will become 
effective as of the date of publication in the Federal Register.

    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E9-28216 Filed 11-24-09; 8:45 am]
BILLING CODE 6717-01-P