Before Commissioners: Pat Wood, III, Chairman; Nora Mead Brownell, Joseph T. Kelliher, and Suedeen G. Kelly: FirstEnergy Operating Companies, FirstEnergy Solutions Corporation, FirstEnergy Generation Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company, et al., FirstEnergy Corporation; Order Conditionally Accepting Updated Market Power Analysis and Providing Guidance on the Scope of Compliance Filings, 20885-20888 [E5-1918]

Download as PDF Federal Register / Vol. 70, No. 77 / Friday, April 22, 2005 / Notices Commission (Commission) has submitted the information collection described below to the Office of Management and Budget (OMB) for review and extension of this information collection requirement. Any interested person may file comments directly with OMB and should address a copy of those comments to the Commission as explained below. The Commission received no comments in response to an earlier Federal Register notice of January 31, 2005 (70 FR 3006– 3007) and has made this notification in its submission to OMB. DATES: Comments on the collection of information are due by May 20, 2005. ADDRESSES: Address comments on the collection of information to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Federal Energy Regulatory Commission Desk Officer. Comments to OMB should be filed electronically, c/o oira_submission@omb.eop.gov and include the OMB Control No. as a point of reference. The Desk Officer may be reached by telephone at 202–395–4650. A copy of the comments should also be sent to the Federal Energy Regulatory Commission, Office of the Executive Director, ED–33, Attention: Michael Miller, 888 First Street NE., Washington, DC 20426. Comments may be filed either in paper format or electronically. Those persons filing electronically do not need to make a paper filing. For paper filings, such comments should be submitted to the Office of the Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 and should refer to Docket No. IC05–566–001. Documents filed electronically via the Internet must be prepared in WordPerfect, MS Word, Portable Document Format, or ASCII format. To file the document, access the Commission’s Web site at https:// www.ferc.gov and click on ‘‘Make an Efiling,’’ and then follow the instructions for each screen. First time users will have to establish a user name and password. The Commission will send an automatic acknowledgement to the sender’s e-mail address upon receipt of comments. User assistance for electronic filings is available at 202–502–8258 or by e-mail to efiling@ferc.gov. Comments should not be submitted to the e-mail address. All comments are available for review at the Commission or may be viewed, printed or downloaded remotely via the Internet through FERC’s homepage using the ‘‘eLibrary’’ link. Enter the docket number excluding the last three digits in the docket number field to VerDate jul<14>2003 15:27 Apr 21, 2005 Jkt 205001 access the document. For user assistance, contact FERCOnlineSupport@ferc.gov or tollfree at (866) 208–3676 or for TTY, contact (202) 502–8659. FOR FURTHER INFORMATION CONTACT: Michael Miller may be reached by telephone at (202) 502–8415, by fax at (202) 273–0873, and by e-mail at michael.miller@ferc.gov. SUPPLEMENTARY INFORMATION: Description The information collection submitted for OMB review contains the following: 1. Collection of Information: FERC– 566 ‘‘Annual Report of a Utility’s Twenty Largest Purchasers.’’ 2. Sponsor: Federal Energy Regulatory Commission. 3. Control No: 1902–0114. The Commission is now requesting that OMB approve and extend the expiration date for an additional three years with no changes to the existing collection. The information filed with the Commission is mandatory. 4. Necessity of the Collection of Information: Submission of the information is necessary to enable the Commission to carry out its responsibilities in implementing the statutory provisions of section 305 of the Federal Power Act, as amended by section 211 of the Public Utility Regulatory Policies Act of 1978. Submission of the list is necessary to fulfill the requirements of section 211– Interlocking Directorates, which defines monitoring and regulatory operations concerning interlocking directorate positions held by utility personnel and possible conflicts of interest. The information on facilities, who seek qualifying status for their facilities, to file the information is collected by the Commission to identify large purchasers of electric energy and possible conflicts of interest. Through this process, the Commission is able to review and exercise oversight of interlocking directorates of public utilities and their related activities. The Commission implements these requirements in the Code of Federal Regulations (CFR) under 18 CFR part 46, Section 46.3. 5. Respondent Description: The respondent universe currently comprises 183 respondents (average) subject to the Commission’s jurisdiction. 6. Estimated Burden: 1,098 total hours, 183 respondents (average per year), 1 response per respondent, and 6 hours per respondent (average). 7. Estimated Cost Burden to Respondents: 1,098 total hours/2080 hours per year × $108,558 per year = PO 00000 Frm 00031 Fmt 4703 Sfmt 4703 20885 $57,306. The cost per respondent is $313. Statutory Authority: Section 305(c)(2)(D), 16 U.S.C. 825d. Magalie R. Salas, Secretary. [FR Doc. E5–1910 Filed 4–21–05; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket Nos. ER01–1403–002, ER01–2968– 002, ER01–2968–003, ER01–845–001, ER01– 845–002, ER04–366–002, ER04–372–002, ER99–2330–001, ER99–2330–002 and ER99– 2330–004] Before Commissioners: Pat Wood, III, Chairman; Nora Mead Brownell, Joseph T. Kelliher, and Suedeen G. Kelly: FirstEnergy Operating Companies, FirstEnergy Solutions Corporation, FirstEnergy Generation Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company, et al., FirstEnergy Corporation; Order Conditionally Accepting Updated Market Power Analysis and Providing Guidance on the Scope of Compliance Filings Issued April 14, 2005. 1. In this order, we accept an updated market power analysis filed by FirstEnergy Corporation and its subsidiaries, FirstEnergy Operating Companies (FirstEnergy Operating Companies),1 FirstEnergy Solutions Corporation (FESolutions), FirstEnergy Generation Corporation (FEGeneration), Jersey Central Power & Light Company (JCP&L), and Metropolitan Edison Company et al. (MetEd)2 (collectively, FirstEnergy Companies). As discussed below, we conclude that, subject to the Commission’s acceptance of the compliance filing directed herein, FirstEnergy Companies satisfy the Commission’s standards for marketbased rate authority. This order benefits customers by reviewing the conditions under which market-based rate authority is granted, thus ensuring that the prices charged for jurisdictional sales are just and reasonable. FirstEnergy Companies’ next updated market power analysis is due three years from the date of this order. 2. In this order, we reject as outside the scope of FirstEnergy Companies’ 1 FirstEnergy Operating Companies consist of The Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, and The Toledo Edison Company. 2 MetED consist of MetED and Pennsylvania Electric Company (Penelec). E:\FR\FM\22APN1.SGM 22APN1 20886 Federal Register / Vol. 70, No. 77 / Friday, April 22, 2005 / Notices compliance filing certain proposed tariff revisions that FirstEnergy Companies included with their December 31, 2003 updated market power analysis. Background 3. FirstEnergy Operating Companies are public utilities that provide retail and wholesale electric service in areas of Ohio and Pennslyvania and are participants in the Midwest Independent Transmission System Operator (Midwest ISO) markets. JCP&L, MetEd and Penelec are public utilities that provide retail and wholesale electric service in areas of New Jersey and Pennsylvania and are located in the PJM Interconnection, LLC (PJM) control area. FEGeneration is a stand-alone generation company that owns and/or operates electric generating facilities previously owned by FirstEnergy Operating Companies. FEGeneration also owns and operates approximately 1155 MW of new generation capacity that it has installed or acquired since 2000 and all of the power from those facilities is committed by contract for sale to FESolutions. All of the generating facilities owned and/or operated by FEGeneration are connected to either the Midwest ISO or the PJM transmission grid. FESolutions is a power marketer engaged in the sale of electricity at market-based rates to wholesale and retail customers throughout the eastern and midwestern United States in which retail access programs have been initiated. 4. On December 31, 2003 FirstEnergy Companies filed their triennial updated market power analysis pursuant to the Commission’s order granting authority to sell electric energy and capacity at market-based rates.3 This filing used the then applicable Supply Margin Assessment to assess generation market power. FirstEnergy Companies’ December 31, 2003 Filing also included modifications to the market-based rate power sales tariffs of FirstEnergy Companies incorporating the Commission’s market behavior rules.4 5. As part of its December 31, 2003 Filing, FirstEnergy also included several changes to their market-based rate tariffs 3 FirstEnergy Operating Companies, Docket No. ER01–1403–000, Letter Order issued November 30, 2001; Cleveland Electric Illuminating Company, 76 FERC ¶ 61,346 (1996); Toledo Edison Company, 78 FERC ¶ 61,013 (1997); GPU Advanced Resources, Inc., 80 FERC ¶ 61,255 (1997); Jersey Central Power & Light Company, et al., 82 FERC ¶ 61,023 (1998); FirstEnergy Services Corp., 94 FERC ¶ 61,052 (2001); FirstEnergy Solutions Corp., Docket No. ER01–2968–000, Letter Order issued October 24, 2001; FirstEnergy Generation Corporation, 94 FERC ¶ 61,177 (2001). 4 Investigation of Terms and Conditions of Public Utility Market-Based Rate Authorizations, 105 FERC ¶ 61,218 (2003). VerDate jul<14>2003 15:27 Apr 21, 2005 Jkt 205001 (e.g., revisions to the code of conduct and affiliate sales provisions). As discussed below, we reject these as beyond the scope of a previouslydirected compliance filing. Furthermore, we put the industry on notice that, consistent with Commission precedent, any such market-based rate tariff revisions that are beyond the scope of Commission-directed compliance filings will be deemed automatically rejected at the time of filing. 6. In its December 31, 2003 Filing, FirstEnergy Companies also filed notices of cancellation for The Cleveland Electric Illuminating Company, (CEI) and The Toledo Edison Company (TE) stating that there are no sales of electricity currently being made pursuant to their tariffs as well as a notice of cancellation for JCP&L. FirstEnergy Companies stated that, as a result of commitments made by JCP&L at the time JCP&L, MetEd and Penelec were acquired by FirstEnergy Companies, JCP&L determined that it was desirable to sell power under a market-based power sales tariff separate from under which MetEd and Penelec sell power at market-based rates.5 The notices of cancellation of JCP&L, CEI and TE were accepted for filing on February 26, 2004 in Docket No. ER04– 363–000. 7. On February 7, 2005, FirstEnergy Companies submitted an updated generation market power analysis pursuant to the Commission’s order issued on May 13, 2004.6 The May 13 Order addressed the procedures for implementing the generation market power analysis announced on April 14, 2004 and clarified on July 8, 2004.7 5 On December 31, 2003, as amended on February 12, 2004, JCP&L filed in, a separate proceeding, a market-based rate tariff. The Commission accepted this market-based rate tariff for filing on March 16, 2004. Jersey Central Power & Light Co., Docket Nos. ER04–366–001 (unpublished letter order). Similarly, on March 16, 2004 the Commission accepted a market-based rate tariff of MetEd and Penelec for filing. Metropolitan Edison Company, Pennsylvania Electric Company, Docket Nos. ER04– 372–000 and ER04–372–001 (unpublished letter order). 6 Acadia Power Partners, LLC, 107 FERC ¶ 61,168 (2004) (May 13 Order). On June 14, 2004, FirstEnergy Companies filed for clarification and/or rehearing of the May 13 Order. Specifically, FirstEnergy Companies argued that certain of its subsidiaries (JCP&L, MetEd, and Penelec) should not have been required to file a revised market power analysis pursuant to the May 13 Order. As described above, FirstEnergy Companies included all of its public utility subsidiaries, including JCP&L, MetEd, and Penelec, in its February 7, 2005 Market Power Update. 7 AEP Power Marketing, Inc., 107 FERC ¶ 61,018 (April 14 Order), order on reh’g, 108 FERC ¶ 61,026 (2004) (July 8 Order). PO 00000 Frm 00032 Fmt 4703 Sfmt 4703 Notice of Filing 8. Notice of FirstEnergy Companies’ updated generation market power analysis was published in the Federal Register 8 with interventions, comments, and protests due on or before February 28, 2005. None was filed. Discussion Market-Based Rate Authorization 9. The Commission allows power sales at market-based rates if the seller and its affiliates do not have, or have adequately mitigated, market power in generation and transmission and cannot erect other barriers to entry. The Commission also considers whether there is evidence of affiliate abuse or reciprocal dealing.9 10. As discussed below, the Commission concludes that, subject to the Commission’s acceptance of the compliance filing directed herein, FirstEnergy Companies satisfy the Commission’s standards for marketbased rate authority.10 Generation Market Power 11. In the April 14 Order, the Commission adopted two indicative screens for assessing generation market power, the pivotal supplier screen and the wholesale market share screen. FirstEnergy Companies have prepared both the pivotal supplier and the wholesale market share screens for the Midwest ISO and PJM markets. 12. As the Commission noted in the April 14 Order, once Midwest ISO becomes a single market and performs functions such as a central commitment and dispatch with Commissionapproved market monitoring and mitigation, Midwest ISO presumptively would be considered a single geographic market for purposes of our generation dominance screens.11 The Commission has reviewed FirstEnergy companies’ generation market power screen analyses for the Midwest ISO market and has determined that FirstEnergy Companies have passed the screens in that market. Accordingly, the Commission finds that FirstEnergy 8 70 FR 8357 (2005). e.g., Progress Power Marketing, Inc., 76 FERC ¶ 61,155 at 61,919 (1996); Northwest Power Marketing Co., L.L.C., 75 FERC ¶ 61,281 at 61,899 (1996); accord Heartland Energy Services, Inc., 68 FERC ¶ 61,223 at 62,062–63 (1994). 10 Accordingly, the June 14, 2004 request for rehearing will be dismissed as moot. 11 Because the Midwest ISO became a single market and began performing the central commitment and dispatch functions with Commission-approved market monitoring and mitigation on April 1, 2005, we have used the Midwest ISO market as the geographic market for purposes of analyzing FirstEnergy Companies’ generation market power screens. 9 See, E:\FR\FM\22APN1.SGM 22APN1 Federal Register / Vol. 70, No. 77 / Friday, April 22, 2005 / Notices Companies satisfy the Commission’s generation market power standard for the grant of market-based rate authority based on the Midwest ISO becoming a single market and performing these functions with Commission-approved market monitoring and mitigation. The Commission also finds that FirstEnergy Companies pass the Commission’s screens for generation market power in the PJM market. Accordingly, the Commission finds that FirstEnergy Companies satisfy the Commission’s generation market power standard for the grant of market-based rate authority. Transmission Market Power 13. When a transmission-owning public utility seeks market-based rate authority, the Commission has required the public utility to have an Open Access Transmission Tariff (OATT) on file before granting such authorization. FirstEnergy Companies state that both the Midwest ISO and PJM are Commission-approved RTOs with OATTs on file with the Commission and are independent of all market participants, including FirstEnergy Companies. The Midwest ISO and PJM’s control of transmission facilities owned by FirstEnergy Companies assures that the amount of transmission capacity over those facilities will be determined objectively and that transmission service is available to all potential transmission customers on a nondiscriminatory basis. Based on FirstEnergy Companies’ representations, we find that FirstEnergy Companies satisfy the Commission’s transmission market power standard for the grant of market-based rate authority. Other Barriers to Entry 14. FirstEnergy Companies state that, at the time FirstEnergy Companies were originally authorized to sell power at market-based rates, the Commission concluded that they each lacked the ability to erect such barriers to entry. FirstEnergy Companies state that there has been no change in circumstances since those determinations were made that might warrant a different conclusion. Based on FirstEnergy Companies’ representations, the Commission is satisfied that FirstEnergy Companies cannot erect barriers to entry. Affiliate Abuse 15. In its February 7, 2005 Filing, FirstEnergy Companies referred to their December 31, 2003 Updated Market Power Analysis Filing which they submit showed that FirstEnergy Companies had adopted codes of conduct designed to preclude affiliate VerDate jul<14>2003 15:27 Apr 21, 2005 Jkt 205001 abuse and reciprocal dealing. However, FirstEnergy Companies’ December 31, 2003 Filing does not address the affiliate abuse prong of the Commission’s market-based rate authorization. In that filing, FirstEnergy Companies state that they ‘‘(a)[do] not have market power in any relevant wholesale power market, (b) [have] adequately mitigated potential transmission market power by transferring control over its transmission facilities to Commissionapproved RTOs, and (c) [lack] the ability to erect barriers to entry by potential competitors,’’ but make no reference to the affiliate abuse prong.12 Accordingly, FirstEnergy Companies are directed, within 30 days of the date of issuance of this order, to submit a compliance filing to address the Commission’s concerns with regard to affiliate abuse. Reporting Requirements 16. Consistent with the procedures the Commission adopted in Order No. 2001, an entity with market-based rates must file electronically with the Commission an Electric Quarterly Report containing: (1) A summary of the contractual terms and conditions in every effective service agreement for market-based power sales; and (2) transaction information for effective short-term (less than one year) and longterm (one year or greater) market-based power sales during the most recent calendar quarter.13 Electric Quarterly Reports must be filed quarterly no later than 30 days after the end of the reporting quarter.14 17. FirstEnergy Companies must timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority.15 Order No. 652 requires that the change in status 12 December 31, 2003 Updated Market Power Analysis, pp. 5–6. 13 Revised Public Utility Filing Requirements, Order No. 2001, 67 Fed. Reg. 31,043 (May 8, 2002), FERC Stats. & Regs. 31,127 (2002). Required data sets for contractual and transaction information are described in Attachments B and C of Order No. 2001. The Electric Quarterly Report must be submitted to the Commission using the EQR Submission System Software, which may be downloaded from the Commission’s Web site at https://www.ferc.gov/docs-filing/eqr.asp. 14 The exact filing dates for these reports are prescribed in 18 C.F.R. § 35.10b (2004). Failure to file an Electric Quarterly Report (without appropriate request for extension), or failure to report an agreement in an Electric Quarterly Report, may result in forfeiture of market-based rate authority, requiring filing of a new application for market-based rate authority if the applicant wishes to resume making sales at market-based rates. 15 Reporting Requirement for Changes in Status for Public Utilities with Market-Based Rate Authority, Order No. 652, 70 Fed. Reg. 8,253 (Feb. 18, 2005); FERC Stats. & Regs. ¶ 31,175 (2005). PO 00000 Frm 00033 Fmt 4703 Sfmt 4703 20887 reporting requirement be incorporated into the market-based rate tariff of each entity authorized to make sales at market-based rates. Accordingly, FirstEnergy Companies are required, within 30 days of the date of issuance of this order, to revise their marketbased rate tariffs to incorporate the following provision: [Insert Market-based rate seller name] must timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority. A change in status includes, but is not limited to, each of the following: (i) ownership or control of generation or transmission facilities or inputs to electric power production other than fuel supplies, or (ii) affiliation with any entity not disclosed in the application for marketbased rate authority that owns or controls generation or transmission facilities or inputs to electric power production, or affiliation with any entity that has a franchised service area. Any change in status must be filed no later than 30 days after the change in status occurs. 18. FirstEnergy Companies are directed to file an updated market power analysis within three years of the date of this order, and every three years thereafter. The Commission also reserves the right to require such an analysis at any intervening time. Policy on Issues Outside the Scope of Market-Based Rate Tariff Compliance Filings 19. The filing of updated market power analyses pursuant to Commission orders, as well as the filing of revisions to the utility’s market-based rate tariff to incorporate the Commission’s market behavior rules, the change in status reporting requirement, and compliance with Order No. 614, constitute compliance filings. As stated above, in the December 31, 2003 Compliance Filing, FirstEnergy Companies provided an updated market power analysis pursuant to the Commission’s orders granting them market-based rate authority as well as tariff revisions to incorporate the Commission’s market behavior rules. However, FirstEnergy Companies also included in its compliance filing several other changes to their market-based rate tariffs that go beyond the scope of that compliance filing (e.g., revisions to the code of conduct and affiliate sales provisions). In this regard, we note that FirstEnergy Companies’ transmittal fails to inform the Commission of those proposed changes. E:\FR\FM\22APN1.SGM 22APN1 20888 Federal Register / Vol. 70, No. 77 / Friday, April 22, 2005 / Notices 20. The Commission has long established that compliance filings must be limited to the specific directives ordered by the Commission. The purpose of a compliance filing is to make the directed changes and the Commission’s focus in reviewing them is whether they comply with the Commission’s previously-stated directives.16 In this instance, FirstEnergy Companies identified their December 31, 2003 Filing as a triennial updated market power analysis and stated that they had submitted this analysis pursuant to the various orders granting FirstEnergy Companies marketbased rate authorization; however, they included with the updated market power analysis changes to their marketbased rate tariffs not directed by the underlying orders. Therefore, the Commission will reject these proposed changes to the FirstEnergy Companies’ market-based rate tariffs submitted with the December 31, 2003 Updated Market Power Analysis Filing as outside the scope of that compliance filing. We reaffirm that compliance filings must only provide the changes directed by the Commission. Accordingly, marketbased rate tariff revisions that are beyond the scope of a Commissiondirected compliance filing will be deemed automatically rejected at the time of filing. The Commission orders: (A) FirstEnergy Companies’ updated generation market power analysis is hereby accepted for filing, subject to Commission acceptance of the compliance filing directed in Ordering Paragraph (B), as discussed in the body of this order. (B) FirstEnergy Companies are directed, within 30 days of the date of issuance of this order, to submit a compliance filing to address whether FirstEnergy Companies satisfy the Commission’s concerns with regard to affiliate abuse, as discussed in the body of this order. (C) FirstEnergy Companies’ next updated market power analysis is due within three years of the date of this order. (D) FirstEnergy Companies’ revised tariff sheets (e.g. revising the code of conduct and affiliate sales provision), with the exception of those discussed in Ordering Paragraph (F) below, are 16 Pacific Gas and Electric Company, 109 FERC ¶ 61,336 at P5 (2004); Midwest Independent Transmission System Operator, Inc., 99 FERC ¶ 61,302 at 62,264 (2002); ISO New England, Inc., 91 FERC ¶ 61,016 at 61,060 (2000); Sierra Pacific Power Company, 80 FERC ¶ 61,376 at 62,271 (1997); Delmarva Power & Light Company, 63 FERC ¶ 61,321 at 63,160 (1993). VerDate jul<14>2003 15:27 Apr 21, 2005 Jkt 205001 rejected, as discussed in the body of this order. (E) FirstEnergy Companies are directed, within 30 days of the date of issuance of this order, to revise their market-based rate tariffs to include the change in status reporting requirement adopted in Order No. 652. (F) FirstEnergy Companies’ revised tariff sheet(s) incorporating the Commission’s market behavior rules are accepted for filing, effective December 17, 2003. (G) FirstEnergy Companies’ June, 2004, request for rehearing is dismissed as moot. (H) The Secretary is hereby directed to publish a copy of this order in the Federal Register. By the Commission. Linda Mitry, Deputy Secretary. [FR Doc. E5–1918 Filed 4–21–05; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. EL05–93–000] PJM Industrial Customer Coalition, Complainant v. PJM Interconnection, L.L.C. and American Electric Power Service Corporation, Respondents; Notice of Complaint April 15, 2005. Take notice that on April 15, 2005, the PJM Industrial Customer Coalition filed a formal complaint against PJM Interconnection, L.L.C. and American Electric Power Service Corporation pursuant to sections 206 and 306 of the Federal Power Act and Rule 206 of the Commission’s Rules of Practice and Procedure, alleging that Respondents’ refusal to allow members of the PJM Industrial Customer Coalition, located in American Electric Power Service Corporation’s service territory, to participate in PJM Interconnection, L.L.C.’s emergency and economic load response programs contravenes Respondents’ obligations under the PJM open access transmission tariff. The PJM Industrial Customer Coalition certifies that copies of the complaint were served on the contacts for PJM Interconnection, L.L.C. and American Electric Power Service Corporation as listed on the Commission’s list of corporate officials. Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission’s Rules of Practice and PO 00000 Frm 00034 Fmt 4703 Sfmt 4703 Procedure (18 CFR 385.211 and 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. The Respondent’s answer and all interventions, or protests must be filed on or before the comment date. The Respondent’s answer, motions to intervene, and protest must be served on the Complainants. The Commission encourages electronic submission of protests and interventions in lieu of paper using the ‘‘eFiling’’ link at https://www.ferc.gov. Persons unable to file electronically should submit an original and 14 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. This filing is accessible on-line at https://www.ferc.gov, using the ‘‘eLibrary’’ link and is available for review in the Commission’s Public Reference Room in Washington, DC. There is an ‘‘eSubscription’’ link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please e-mail FERCOnlineSupport@ferc.gov, or call (866) 208–3676 (toll free). For TTY, call (202) 502–8659. Comment Date: 5 p.m. eastern time on May 5, 2005. Magalie R. Salas, Secretary. [FR Doc. E5–1898 Filed 4–21–05; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. EL05–62–001, et al.] PJM Interconnection, L.L.C., et al.; Electric Rate and Corporate Filings April 13, 2005. The following filings have been made with the Commission. The filings are listed in ascending order within each docket classification. 1. PJM Interconnection, L.L.C. [Docket No. EL05–62–001] Take notice that on March 28, 2005, PJM Interconnection, L.L.C. submitted a compliance filing pursuant to the Commission’s order issued February 25, E:\FR\FM\22APN1.SGM 22APN1

Agencies

[Federal Register Volume 70, Number 77 (Friday, April 22, 2005)]
[Notices]
[Pages 20885-20888]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1918]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. ER01-1403-002, ER01-2968-002, ER01-2968-003, ER01-845-001, 
ER01-845-002, ER04-366-002, ER04-372-002, ER99-2330-001, ER99-2330-002 
and ER99-2330-004]


Before Commissioners: Pat Wood, III, Chairman; Nora Mead 
Brownell, Joseph T. Kelliher, and Suedeen G. Kelly: FirstEnergy 
Operating Companies, FirstEnergy Solutions Corporation, FirstEnergy 
Generation Corporation, Jersey Central Power & Light Company, 
Metropolitan Edison Company, et al., FirstEnergy Corporation; Order 
Conditionally Accepting Updated Market Power Analysis and Providing 
Guidance on the Scope of Compliance Filings

Issued April 14, 2005.
    1. In this order, we accept an updated market power analysis filed 
by FirstEnergy Corporation and its subsidiaries, FirstEnergy Operating 
Companies (FirstEnergy Operating Companies),\1\ FirstEnergy Solutions 
Corporation (FESolutions), FirstEnergy Generation Corporation 
(FEGeneration), Jersey Central Power & Light Company (JCP&L), and 
Metropolitan Edison Company et al. (MetEd)\2\ (collectively, 
FirstEnergy Companies). As discussed below, we conclude that, subject 
to the Commission's acceptance of the compliance filing directed 
herein, FirstEnergy Companies satisfy the Commission's standards for 
market-based rate authority. This order benefits customers by reviewing 
the conditions under which market-based rate authority is granted, thus 
ensuring that the prices charged for jurisdictional sales are just and 
reasonable. FirstEnergy Companies' next updated market power analysis 
is due three years from the date of this order.
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    \1\ FirstEnergy Operating Companies consist of The Cleveland 
Electric Illuminating Company, Ohio Edison Company, Pennsylvania 
Power Company, and The Toledo Edison Company.
    \2\ MetED consist of MetED and Pennsylvania Electric Company 
(Penelec).
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    2. In this order, we reject as outside the scope of FirstEnergy 
Companies'

[[Page 20886]]

compliance filing certain proposed tariff revisions that FirstEnergy 
Companies included with their December 31, 2003 updated market power 
analysis.

Background

    3. FirstEnergy Operating Companies are public utilities that 
provide retail and wholesale electric service in areas of Ohio and 
Pennslyvania and are participants in the Midwest Independent 
Transmission System Operator (Midwest ISO) markets. JCP&L, MetEd and 
Penelec are public utilities that provide retail and wholesale electric 
service in areas of New Jersey and Pennsylvania and are located in the 
PJM Interconnection, LLC (PJM) control area. FEGeneration is a stand-
alone generation company that owns and/or operates electric generating 
facilities previously owned by FirstEnergy Operating Companies. 
FEGeneration also owns and operates approximately 1155 MW of new 
generation capacity that it has installed or acquired since 2000 and 
all of the power from those facilities is committed by contract for 
sale to FESolutions. All of the generating facilities owned and/or 
operated by FEGeneration are connected to either the Midwest ISO or the 
PJM transmission grid. FESolutions is a power marketer engaged in the 
sale of electricity at market-based rates to wholesale and retail 
customers throughout the eastern and midwestern United States in which 
retail access programs have been initiated.
    4. On December 31, 2003 FirstEnergy Companies filed their triennial 
updated market power analysis pursuant to the Commission's order 
granting authority to sell electric energy and capacity at market-based 
rates.\3\ This filing used the then applicable Supply Margin Assessment 
to assess generation market power. FirstEnergy Companies' December 31, 
2003 Filing also included modifications to the market-based rate power 
sales tariffs of FirstEnergy Companies incorporating the Commission's 
market behavior rules.\4\
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    \3\ FirstEnergy Operating Companies, Docket No. ER01-1403-000, 
Letter Order issued November 30, 2001; Cleveland Electric 
Illuminating Company, 76 FERC ] 61,346 (1996); Toledo Edison 
Company, 78 FERC ] 61,013 (1997); GPU Advanced Resources, Inc., 80 
FERC ] 61,255 (1997); Jersey Central Power & Light Company, et al., 
82 FERC ] 61,023 (1998); FirstEnergy Services Corp., 94 FERC ] 
61,052 (2001); FirstEnergy Solutions Corp., Docket No. ER01-2968-
000, Letter Order issued October 24, 2001; FirstEnergy Generation 
Corporation, 94 FERC ] 61,177 (2001).
    \4\ Investigation of Terms and Conditions of Public Utility 
Market-Based Rate Authorizations, 105 FERC ] 61,218 (2003).
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    5. As part of its December 31, 2003 Filing, FirstEnergy also 
included several changes to their market-based rate tariffs (e.g., 
revisions to the code of conduct and affiliate sales provisions). As 
discussed below, we reject these as beyond the scope of a previously-
directed compliance filing. Furthermore, we put the industry on notice 
that, consistent with Commission precedent, any such market-based rate 
tariff revisions that are beyond the scope of Commission-directed 
compliance filings will be deemed automatically rejected at the time of 
filing.
    6. In its December 31, 2003 Filing, FirstEnergy Companies also 
filed notices of cancellation for The Cleveland Electric Illuminating 
Company, (CEI) and The Toledo Edison Company (TE) stating that there 
are no sales of electricity currently being made pursuant to their 
tariffs as well as a notice of cancellation for JCP&L. FirstEnergy 
Companies stated that, as a result of commitments made by JCP&L at the 
time JCP&L, MetEd and Penelec were acquired by FirstEnergy Companies, 
JCP&L determined that it was desirable to sell power under a market-
based power sales tariff separate from under which MetEd and Penelec 
sell power at market-based rates.\5\ The notices of cancellation of 
JCP&L, CEI and TE were accepted for filing on February 26, 2004 in 
Docket No. ER04-363-000.
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    \5\ On December 31, 2003, as amended on February 12, 2004, JCP&L 
filed in, a separate proceeding, a market-based rate tariff. The 
Commission accepted this market-based rate tariff for filing on 
March 16, 2004. Jersey Central Power & Light Co., Docket Nos. ER04-
366-001 (unpublished letter order). Similarly, on March 16, 2004 the 
Commission accepted a market-based rate tariff of MetEd and Penelec 
for filing. Metropolitan Edison Company, Pennsylvania Electric 
Company, Docket Nos. ER04-372-000 and ER04-372-001 (unpublished 
letter order).
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    7. On February 7, 2005, FirstEnergy Companies submitted an updated 
generation market power analysis pursuant to the Commission's order 
issued on May 13, 2004.\6\ The May 13 Order addressed the procedures 
for implementing the generation market power analysis announced on 
April 14, 2004 and clarified on July 8, 2004.\7\
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    \6\ Acadia Power Partners, LLC, 107 FERC ] 61,168 (2004) (May 13 
Order). On June 14, 2004, FirstEnergy Companies filed for 
clarification and/or rehearing of the May 13 Order. Specifically, 
FirstEnergy Companies argued that certain of its subsidiaries 
(JCP&L, MetEd, and Penelec) should not have been required to file a 
revised market power analysis pursuant to the May 13 Order. As 
described above, FirstEnergy Companies included all of its public 
utility subsidiaries, including JCP&L, MetEd, and Penelec, in its 
February 7, 2005 Market Power Update.
    \7\ AEP Power Marketing, Inc., 107 FERC ] 61,018 (April 14 
Order), order on reh'g, 108 FERC ] 61,026 (2004) (July 8 Order).
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Notice of Filing

    8. Notice of FirstEnergy Companies' updated generation market power 
analysis was published in the Federal Register \8\ with interventions, 
comments, and protests due on or before February 28, 2005. None was 
filed.
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    \8\ 70 FR 8357 (2005).
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Discussion

Market-Based Rate Authorization

    9. The Commission allows power sales at market-based rates if the 
seller and its affiliates do not have, or have adequately mitigated, 
market power in generation and transmission and cannot erect other 
barriers to entry. The Commission also considers whether there is 
evidence of affiliate abuse or reciprocal dealing.\9\
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    \9\ See, e.g., Progress Power Marketing, Inc., 76 FERC ] 61,155 
at 61,919 (1996); Northwest Power Marketing Co., L.L.C., 75 FERC ] 
61,281 at 61,899 (1996); accord Heartland Energy Services, Inc., 68 
FERC ] 61,223 at 62,062-63 (1994).
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    10. As discussed below, the Commission concludes that, subject to 
the Commission's acceptance of the compliance filing directed herein, 
FirstEnergy Companies satisfy the Commission's standards for market-
based rate authority.\10\
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    \10\ Accordingly, the June 14, 2004 request for rehearing will 
be dismissed as moot.
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Generation Market Power

    11. In the April 14 Order, the Commission adopted two indicative 
screens for assessing generation market power, the pivotal supplier 
screen and the wholesale market share screen. FirstEnergy Companies 
have prepared both the pivotal supplier and the wholesale market share 
screens for the Midwest ISO and PJM markets.
    12. As the Commission noted in the April 14 Order, once Midwest ISO 
becomes a single market and performs functions such as a central 
commitment and dispatch with Commission-approved market monitoring and 
mitigation, Midwest ISO presumptively would be considered a single 
geographic market for purposes of our generation dominance screens.\11\ 
The Commission has reviewed FirstEnergy companies' generation market 
power screen analyses for the Midwest ISO market and has determined 
that FirstEnergy Companies have passed the screens in that market. 
Accordingly, the Commission finds that FirstEnergy

[[Page 20887]]

Companies satisfy the Commission's generation market power standard for 
the grant of market-based rate authority based on the Midwest ISO 
becoming a single market and performing these functions with 
Commission-approved market monitoring and mitigation. The Commission 
also finds that FirstEnergy Companies pass the Commission's screens for 
generation market power in the PJM market. Accordingly, the Commission 
finds that FirstEnergy Companies satisfy the Commission's generation 
market power standard for the grant of market-based rate authority.
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    \11\ Because the Midwest ISO became a single market and began 
performing the central commitment and dispatch functions with 
Commission-approved market monitoring and mitigation on April 1, 
2005, we have used the Midwest ISO market as the geographic market 
for purposes of analyzing FirstEnergy Companies' generation market 
power screens.
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Transmission Market Power

    13. When a transmission-owning public utility seeks market-based 
rate authority, the Commission has required the public utility to have 
an Open Access Transmission Tariff (OATT) on file before granting such 
authorization. FirstEnergy Companies state that both the Midwest ISO 
and PJM are Commission-approved RTOs with OATTs on file with the 
Commission and are independent of all market participants, including 
FirstEnergy Companies. The Midwest ISO and PJM's control of 
transmission facilities owned by FirstEnergy Companies assures that the 
amount of transmission capacity over those facilities will be 
determined objectively and that transmission service is available to 
all potential transmission customers on a non-discriminatory basis. 
Based on FirstEnergy Companies' representations, we find that 
FirstEnergy Companies satisfy the Commission's transmission market 
power standard for the grant of market-based rate authority.

Other Barriers to Entry

    14. FirstEnergy Companies state that, at the time FirstEnergy 
Companies were originally authorized to sell power at market-based 
rates, the Commission concluded that they each lacked the ability to 
erect such barriers to entry. FirstEnergy Companies state that there 
has been no change in circumstances since those determinations were 
made that might warrant a different conclusion. Based on FirstEnergy 
Companies' representations, the Commission is satisfied that 
FirstEnergy Companies cannot erect barriers to entry.

Affiliate Abuse

    15. In its February 7, 2005 Filing, FirstEnergy Companies referred 
to their December 31, 2003 Updated Market Power Analysis Filing which 
they submit showed that FirstEnergy Companies had adopted codes of 
conduct designed to preclude affiliate abuse and reciprocal dealing. 
However, FirstEnergy Companies' December 31, 2003 Filing does not 
address the affiliate abuse prong of the Commission's market-based rate 
authorization. In that filing, FirstEnergy Companies state that they 
``(a)[do] not have market power in any relevant wholesale power market, 
(b) [have] adequately mitigated potential transmission market power by 
transferring control over its transmission facilities to Commission-
approved RTOs, and (c) [lack] the ability to erect barriers to entry by 
potential competitors,'' but make no reference to the affiliate abuse 
prong.\12\ Accordingly, FirstEnergy Companies are directed, within 30 
days of the date of issuance of this order, to submit a compliance 
filing to address the Commission's concerns with regard to affiliate 
abuse.
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    \12\ December 31, 2003 Updated Market Power Analysis, pp. 5-6.
---------------------------------------------------------------------------

Reporting Requirements

    16. Consistent with the procedures the Commission adopted in Order 
No. 2001, an entity with market-based rates must file electronically 
with the Commission an Electric Quarterly Report containing: (1) A 
summary of the contractual terms and conditions in every effective 
service agreement for market-based power sales; and (2) transaction 
information for effective short-term (less than one year) and long-term 
(one year or greater) market-based power sales during the most recent 
calendar quarter.\13\ Electric Quarterly Reports must be filed 
quarterly no later than 30 days after the end of the reporting 
quarter.\14\
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    \13\ Revised Public Utility Filing Requirements, Order No. 2001, 
67 Fed. Reg. 31,043 (May 8, 2002), FERC Stats. & Regs. 31,127 
(2002). Required data sets for contractual and transaction 
information are described in Attachments B and C of Order No. 2001. 
The Electric Quarterly Report must be submitted to the Commission 
using the EQR Submission System Software, which may be downloaded 
from the Commission's Web site at https://www.ferc.gov/docs-filing/
eqr.asp.
    \14\ The exact filing dates for these reports are prescribed in 
18 C.F.R. Sec.  35.10b (2004). Failure to file an Electric Quarterly 
Report (without appropriate request for extension), or failure to 
report an agreement in an Electric Quarterly Report, may result in 
forfeiture of market-based rate authority, requiring filing of a new 
application for market-based rate authority if the applicant wishes 
to resume making sales at market-based rates.
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    17. FirstEnergy Companies must timely report to the Commission any 
change in status that would reflect a departure from the 
characteristics the Commission relied upon in granting market-based 
rate authority.\15\ Order No. 652 requires that the change in status 
reporting requirement be incorporated into the market-based rate tariff 
of each entity authorized to make sales at market-based rates. 
Accordingly, FirstEnergy Companies are required, within 30 days of the 
date of issuance of this order, to revise their market-based rate 
tariffs to incorporate the following provision:
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    \15\ Reporting Requirement for Changes in Status for Public 
Utilities with Market-Based Rate Authority, Order No. 652, 70 Fed. 
Reg. 8,253 (Feb. 18, 2005); FERC Stats. & Regs. ] 31,175 (2005).
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    [Insert Market-based rate seller name] must timely report to the 
Commission any change in status that would reflect a departure from the 
characteristics the Commission relied upon in granting market-based 
rate authority. A change in status includes, but is not limited to, 
each of the following: (i) ownership or control of generation or 
transmission facilities or inputs to electric power production other 
than fuel supplies, or (ii) affiliation with any entity not disclosed 
in the application for market-based rate authority that owns or 
controls generation or transmission facilities or inputs to electric 
power production, or affiliation with any entity that has a franchised 
service area. Any change in status must be filed no later than 30 days 
after the change in status occurs.
    18. FirstEnergy Companies are directed to file an updated market 
power analysis within three years of the date of this order, and every 
three years thereafter. The Commission also reserves the right to 
require such an analysis at any intervening time.

Policy on Issues Outside the Scope of Market-Based Rate Tariff 
Compliance Filings

    19. The filing of updated market power analyses pursuant to 
Commission orders, as well as the filing of revisions to the utility's 
market-based rate tariff to incorporate the Commission's market 
behavior rules, the change in status reporting requirement, and 
compliance with Order No. 614, constitute compliance filings. As stated 
above, in the December 31, 2003 Compliance Filing, FirstEnergy 
Companies provided an updated market power analysis pursuant to the 
Commission's orders granting them market-based rate authority as well 
as tariff revisions to incorporate the Commission's market behavior 
rules. However, FirstEnergy Companies also included in its compliance 
filing several other changes to their market-based rate tariffs that go 
beyond the scope of that compliance filing (e.g., revisions to the code 
of conduct and affiliate sales provisions). In this regard, we note 
that FirstEnergy Companies' transmittal fails to inform the Commission 
of those proposed changes.

[[Page 20888]]

    20. The Commission has long established that compliance filings 
must be limited to the specific directives ordered by the Commission. 
The purpose of a compliance filing is to make the directed changes and 
the Commission's focus in reviewing them is whether they comply with 
the Commission's previously-stated directives.\16\ In this instance, 
FirstEnergy Companies identified their December 31, 2003 Filing as a 
triennial updated market power analysis and stated that they had 
submitted this analysis pursuant to the various orders granting 
FirstEnergy Companies market-based rate authorization; however, they 
included with the updated market power analysis changes to their 
market-based rate tariffs not directed by the underlying orders. 
Therefore, the Commission will reject these proposed changes to the 
FirstEnergy Companies' market-based rate tariffs submitted with the 
December 31, 2003 Updated Market Power Analysis Filing as outside the 
scope of that compliance filing. We reaffirm that compliance filings 
must only provide the changes directed by the Commission. Accordingly, 
market-based rate tariff revisions that are beyond the scope of a 
Commission-directed compliance filing will be deemed automatically 
rejected at the time of filing.
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    \16\ Pacific Gas and Electric Company, 109 FERC ] 61,336 at P5 
(2004); Midwest Independent Transmission System Operator, Inc., 99 
FERC ] 61,302 at 62,264 (2002); ISO New England, Inc., 91 FERC ] 
61,016 at 61,060 (2000); Sierra Pacific Power Company, 80 FERC ] 
61,376 at 62,271 (1997); Delmarva Power & Light Company, 63 FERC ] 
61,321 at 63,160 (1993).
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    The Commission orders:
    (A) FirstEnergy Companies' updated generation market power analysis 
is hereby accepted for filing, subject to Commission acceptance of the 
compliance filing directed in Ordering Paragraph (B), as discussed in 
the body of this order.
    (B) FirstEnergy Companies are directed, within 30 days of the date 
of issuance of this order, to submit a compliance filing to address 
whether FirstEnergy Companies satisfy the Commission's concerns with 
regard to affiliate abuse, as discussed in the body of this order.
    (C) FirstEnergy Companies' next updated market power analysis is 
due within three years of the date of this order.
    (D) FirstEnergy Companies' revised tariff sheets (e.g. revising the 
code of conduct and affiliate sales provision), with the exception of 
those discussed in Ordering Paragraph (F) below, are rejected, as 
discussed in the body of this order.
    (E) FirstEnergy Companies are directed, within 30 days of the date 
of issuance of this order, to revise their market-based rate tariffs to 
include the change in status reporting requirement adopted in Order No. 
652.
    (F) FirstEnergy Companies' revised tariff sheet(s) incorporating 
the Commission's market behavior rules are accepted for filing, 
effective December 17, 2003.
    (G) FirstEnergy Companies' June, 2004, request for rehearing is 
dismissed as moot.
    (H) The Secretary is hereby directed to publish a copy of this 
order in the Federal Register.

    By the Commission.
Linda Mitry,
Deputy Secretary.
[FR Doc. E5-1918 Filed 4-21-05; 8:45 am]
BILLING CODE 6717-01-P
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