Revision of Annual Charges to Public Utilities (Westar Energy, Inc. and Kansas Gas and Electric Company), 13442-13444 [E7-5052]

Download as PDF 13442 Federal Register / Vol. 72, No. 55 / Thursday, March 22, 2007 / Rules and Regulations Note 2: Special Post Shipment Verification reporting and recordkeeping requirements for exports of computers to destinations in Computer Tier 3 may be found in § 743.2 of the EAR. License Exceptions LVS: $5000; N/A for 4A003.b and .c. GBS: Yes, for 4A003.e, and .g and specially designed components therefor, exported separately or as part of a system. APP: Yes, for computers controlled by 4A003.a or .b, and ‘‘electronic assemblies’’ controlled by 4A003.c, to the exclusion of other technical parameters, with the exception of 4A003.e (equipment performing analogto-digital conversions exceeding the limits of 3A001.a.5.a). See § 740.7 of the EAR. CIV: Yes, for 4A003.e, and .g. * * * * * I 7. In Supplement No. 1 to part 774 (the Commerce Control List), Category 4—Computers, Export Control Classification Number (ECCN) 4D001 is amended by revising the Heading, the License Requirements section, and the License Exceptions section, to read as follows: 4D001 Specified ‘‘software’’, see List of Items Controlled. License Requirements Reason for Control: NS, CC, AT, NP. Control(s) NS applies to entire entry .. CC applies to ‘‘software’’ for computerized fingerprint equipment controlled by 4A003 for CC reasons. AT applies to entire entry .. Country chart NS Column 1. CC Column 1. rmajette on PROD1PC67 with RULES License Requirements Reason for Control: NS, MT, CC, AT, NP. Control(s) Country chart NS applies to entire entry .. MT applies to ‘‘technology’’ for items controlled by 4A001.a and 4A101 for MT reasons. CC applies to ‘‘technology’’ for computerized fingerprint equipment controlled by 4A003 for CC reasons. AT applies to entire entry .. NS Column 1. MT Column 1. CC Column 1. AT Column 1. NP applies, unless a License Exception is available. See § 742.3(b) of the EAR for information on applicable licensing review policies. License Requirement Notes: See § 743.1 of the EAR for reporting requirements for exports under License Exceptions. License Exceptions CIV: N/A TSR: Yes, for ‘‘technology’’ described in 4E001.b with an ‘‘Adjusted Peak Performance’’ (‘‘APP’’) equal to or less than 0.1 WT. APP: Yes to specific countries (see § 740.7 of the EAR for eligibility criteria). * * * * * Eileen M. Albanese, Director, Office of Exporter Services. [FR Doc. E7–5271 Filed 3–21–07; 8:45 am] BILLING CODE 3510–33–P AT Column 1. NP applies, unless a License Exception is available. See § 742.3(b) of the EAR for information on applicable licensing review policies. License Exceptions CIV: N/A TSR: Yes, for ‘‘software’’ described in 4D001.b with an ‘‘Adjusted Peak Performance’’ (‘‘APP’’) equal to or less than 0.1 WT. APP: Yes to specific countries (see § 740.7 of the EAR for eligibility criteria) * * * * * I 8. In Supplement No. 1 to part 774 (the Commerce Control List), Category 4—Computers, Export Control Classification Number (ECCN) 4E001 is amended by revising the Heading, the License Requirements section, and the License Exceptions section, to read as follows: VerDate Aug<31>2005 4E001 Specified ‘‘technology’’, see List of Items Controlled. 12:29 Mar 21, 2007 Jkt 211001 DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 382 [Docket No. RM00–7–012] Revision of Annual Charges to Public Utilities (Westar Energy, Inc. and Kansas Gas and Electric Company) Circuit) on remand in Westar Energy Inc., Docket No. RM87–3–000. The Commission here affirms its regulation at 18 CFR 382.201 (2006), adopted in Order No. 641, allowing correction of transmission volumes, but in response to the remand allows Westar Energy, Inc. to submit corrected transmission volumes out-of-time. The Commission clarifies going forward that it will accept timely FERC Reporting Requirement No. 582 (FERC 582) corrections but will accept only those late-filed FERC 582 corrections that are discovered through a Commission-conducted audit and that correct previously under-reported transmission volumes. When a public utility underreports, it is assessed comparatively smaller annual charges, and other public utilities are assessed relatively larger annual charges thereby subsidizing those utilities who underreport. DATES: Effective Date: This order on remand is effective March 15, 2007. FOR FURTHER INFORMATION CONTACT: Jennifer Rinker, Office of the General Counsel—Energy Markets, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502–6563. SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. Order on Remand and Announcing Policy on Submission of Corrected Electric Annual Charge-Related Data 1. This order addresses issues raised by the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) on remand.1 The Commission here affirms its regulation allowing correction of transmission volumes,2 adopted in Order No. 641,3 but in response to the remand allows Westar Energy, Inc. (Westar) to submit corrected transmission volumes out-oftime. The Commission clarifies going forward that it will accept timely FERC Reporting Requirement No. 582 (FERC 582) corrections but will accept only those late-filed FERC 582 corrections that are discovered through a Issued March 15, 2007. Federal Energy Regulatory Commission, DOE. ACTION: Final rule; order on remand and announcement of policy. AGENCY: SUMMARY: In this order, the Federal Energy Regulatory Commission (Commission) addresses issues raised by the United States Court of Appeals for the District of Columbia Circuit (D.C. PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 1 Westar Energy Inc., Docket No. RM87–3–000 (Apr. 8, 2004) (unpublished letter order), reh’g denied sub nom. Revision of Annual Charges to Public Utilities (Westar Energy, Inc. and Kansas Gas and Electric Company), 111 FERC ¶ 61,086 (2005), remanded sub nom. Westar Energy, Inc. v. FERC, 473 F.3d 1239 (D.C. Cir. 2007). 2 18 CFR 382.201 (2006). 3 Revision of Annual Charges to Public Utilities, Order No. 641, FERC Stats. & Regs. ¶ 31,109 (2000), reh’g denied, Order No. 641–A, 94 FERC ¶ 61,290 (2001). E:\FR\FM\22MRR1.SGM 22MRR1 Federal Register / Vol. 72, No. 55 / Thursday, March 22, 2007 / Rules and Regulations Commission-conducted audit and that correct previously under-reported transmission volumes.4 rmajette on PROD1PC67 with RULES Background 2. As required by Section 3401 of the Omnibus Budget Reconciliation Act of 1986,5 the Commission’s regulations provide for the payment of annual charges by public utilities.6 The Commission intends that its electric annual charges in any fiscal year will recover the Commission’s estimated electric regulatory program costs (other than the costs of regulating Federal Power Marketing Agencies (PMAs) and electric regulatory program costs recovered through electric filing fees) for that fiscal year. In the next fiscal year the Commission adjusts the annual charges up or down, as appropriate, both to eliminate any over-or underrecovery of the Commission’s actual costs and to eliminate any over-or under-charge of any particular public utility. The Commission accomplishes this by recalculating the annual charges and carrying over any over-or undercharge from the prior year as a credit or debit on the next fiscal year’s annual charges bill.7 3. In calculating annual charges, the Commission determines its total electric regulatory program costs and subtracts all PMA-related costs and electric filing fee collections to determine its collectible electric regulatory program costs. That amount is charged to public utilities that provide transmission service. Public utilities that provide transmission service and thus are subject to annual charges must submit FERC 582 to the Office of the Secretary by April 30 of each year, providing data for the previous calendar year.8 The reports include their transmission of electric energy in interstate commerce, as measured by: (1) Unbundled wholesale transmission; (2) unbundled retail transmission; and (3) bundled wholesale power sales which, by definition, include a transmission 4 When a public utility underreports, it is assessed comparatively smaller annual charges, and other public utilities are assessed relatively larger annual charges. The effect is that the underreporting utility pays less than its fair share of the Commission’s costs, and is effectively subsidized by other utilities who will pay more than their fair share of the Commission’s costs. 5 42 U.S.C. 7178 (2000). 6 18 CFR 382.201 (2006). 7 18 CFR 382.201 (2006); see, e.g., Order No. 641, FERC Stats. & Regs. ¶ 31,109 at 31,841–42; accord Annual Charges under the Omnibus Budget Reconciliation Act of 1986 (CNG Power Services), 87 FERC ¶ 61,074 at 61,302 (1999) (CNG); Annual Charges Under the Omnibus Budget Reconciliation Act of 1986 (Phibro Inc.), 81 FERC ¶ 61,308 at 62,424–25 (1997). 8 18 CFR 382.201 (2006). VerDate Aug<31>2005 12:29 Mar 21, 2007 Jkt 211001 component, where the transmission component is not separately reported as unbundled transmission. 4. Importantly, the Commission uses that data to allocate its collectible electric regulatory program costs among all public utilities that provide transmission service; changing the amount owed by one public utility has an effect on the amount owed by all of the others. The Commission issues bills for annual charges based on each public utility’s transmission service (as reported in the FERC 582) as compared to the total of all public utilities’ transmission service, and the bills must be paid within 45 days of the date on which the Commission issues the bills.9 The regulations allow public utilities to make corrections to their previously filed FERC 582s, but they must do so within a specified time: Corrections to the information reported on [FERC] 582, as of January 1, 2002, must be submitted under oath to the Office of the Secretary on or before the end of each calendar year in which the information was originally reported (i.e., on or before the last day of the year that the Commission is open to accept such filings).10 The Commission adjusts the annual charges in the following fiscal year (FY), using this corrected information, in order to eliminate any over or under recovery both of the Commission’s actual costs and of the charges to each public utility.11 Earlier Filings and Orders 5. On December 18, 2003, Westar submitted a corrected FERC 582 for both 2002 and 2003, correcting the data reported for the years 2001 and 2002, respectively. Westar explained that its internal review, prompted by a change in the Commission’s reporting requirements, revealed that it had overreported transmission in several particulars. Westar requested a waiver of the Commission’s regulations, observing that the Commission had permitted another company, Kansas City Power and Light Company (KCPL), to file a correction for calendar year 2001 in 2003.12 6. By letter order dated April 8, 2004, the Director of the Commission’s Division of Financial Services, Office of 9 See, e.g., Order No. 641, FERC Stats. & Regs. ¶ 31,109 at 31,848–20; Order No. 641–A, 94 FERC at 62,037. 10 18 CFR 382.201(c)(2) (2006). 11 See Order No. 641, FERC Stats & Regs. ¶ 31,109 at 31,857; Revision of Annual Charges to Public Utilities (California Independent System Operator, Inc.), 101 FERC ¶ 61,043 at 61,163, reh’g dismissed, 101 FERC ¶ 61,326 at P 9 (2002) (CAISO); accord CNG, 87 FERC at 61,303. 12 Kansas City Power & Light, Docket No. FA03– 17–000 (August 14, 2003). PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 13443 the Executive Director, accepted Westar’s corrections for FY 2003 (reporting corrected calendar year 2002 transmission data), but rejected Westar’s proposed corrections for FY 2002 (reporting corrected calendar year 2001 transmission data) on the ground that it was untimely under section 382.201(c)(2) of the Commission’s regulations. On May 7, 2004, Westar sought rehearing. 7. The Commission subsequently denied rehearing for four reasons: first, the Commission’s regulations expressly provided that corrections be made by the end of the calendar year in which the information was originally filed; second, the broader interest in preserving the finality of annual charges weighed against Westar’s individual interest in allowing an untimely correction; third, the Commission had offered no assurances that it would correct erroneously filed information beyond the deadline for filing corrected information expressly spelled out in the regulations; and fourth, Westar and KCPL were not similarly situated because the Commission itself caused KCPL’s late filing and it would, therefore, have been inequitable to reject KCPL’s out-of-time corrections to the detriment of the company.13 8. Westar filed a petition for review with the D.C. Circuit, and on January 16, 2007, the D.C. Circuit vacated and remanded the Commission’s not allowing Westar’s corrected FERC 582 for FY 2002, finding the Commission’s order provided no basis ‘‘in fact or in logic for the Commission’s refusal to treat Westar as it had treated KCPL.’’ 14 Discussion 9. In light of the D.C. Circuit’s finding, and to bring this matter to an expeditious conclusion, the Commission will allow Westar to submit the corrected FY 2002 transmission volumes that the Commission had previously rejected because they had been filed out-of-time. 10. The Commission does, however, reiterate its continued commitment to the policy reflected in part 382 of the Commission’s regulations, namely that corrected transmission volumes must be filed by the end of the calendar year in which the transmission volumes were originally filed. This is what the Commission’s regulations require.15 The court found, while vacating and remanding the Commission’s determination as to Westar, that the first three of the Commission’s four reasons 13 111 FERC ¶ 61,086 at P 10–12. F.3d. at 1243. 15 18 CFR 382.201(c)(2) (2006). 14 473 E:\FR\FM\22MRR1.SGM 22MRR1 13444 Federal Register / Vol. 72, No. 55 / Thursday, March 22, 2007 / Rules and Regulations rmajette on PROD1PC67 with RULES for denying Westar’s request both alone and together justify this policy: (1) The regulations expressly required filing of corrections by a date certain; (2) waiving the deadline would undermine the certainty that the annual charges would not be indefinitely subject to change; and (3) the Commission has never suggested it would ignore the deadline spelled out in its regulations.16 11. We also announce a policy, going forward, as to when we will waive the regulation and allow untimely submissions. The Commission’s policy going forward will be to grant waiver and accept only those late-filed corrections discovered through a Commission-conducted audit in order to remedy an underreporting of transmission volumes (and thus where other utilities have subsidized the underreporting utility). 12. As stated above, the Commission allocates its collectible electric regulatory program costs among public utilities. A reduction in the amount owed by one utility necessarily has an effect, an increase, on the amount owed by all of the others. Therefore, if a utility does not accurately report its transmission volumes, the Commission cannot charge it appropriately.17 The allocation of costs based on transmission volumes creates a natural incentive for utilities to underreport their transmission volumes in a given year. Just as public utilities have a natural incentive to ‘‘abuse their market power,’’ 18 so, by analogy, public utilities subject to reporting transmission volumes for purposes of calculating their proportionate share of the Commission’s collectible electric regulatory program costs have similar incentives to underreport their transmission volumes and thereby reduce the costs allocated to them. The 16 473 F.3d. at 1241–42. As noted above, it was the Commission’s failure to adequately explain the fourth reason that led to the remand. 17 As we have noted, the transmission volumes utilities report are the utilities’ data. These data are, moreover, filed under oath. 18 CFR 382.201(c)(1) (2006); see Revision of Annual Charges to Public Utilities (PJM Interconnection), 105 FERC ¶ 61,093 at P 8 (2003); Midwest Independent Transmission System Operator, Inc., 103 FERC ¶ 61,048 at P 13– 14, reh’g denied, 104 FERC ¶ 61,060 (2003); CAISO, 101 FERC ¶ 61,326 at P 9; CAISO, 101 FERC ¶ 61,043 at P 10. While utilities are thus required to report complete and accurate data (by April 30 of each year), we nevertheless recognize that utilities may err in their reporting, and so we allow corrections to be filed up to eight months following their original filing, i.e., by the end of the calendar year. 18 Pennsylvania Elec. Co. v. FERC, 11 F.3d 207, 211 n.5 (D.C. Cir. 1993); Nat’l Fuel Gas Supply Corp. v. FERC, 468 F.3d 831, 834–835 (D.C. Cir. 2006); United Distribution Cos. v. FERC, 88 F.3d 1105, 1122 & n.4 (D.C. Cir. 1996); Associated Gas Distribs. v. FERC, 824 F.2d 981, 1010 (D.C. Cir. 1987). VerDate Aug<31>2005 12:29 Mar 21, 2007 Jkt 211001 effect of such underreporting is an inequitable subsidization by other utilities of any utility that underreported. The agency’s audit process provides a check on that natural incentive. Therefore, the Commission will allow late-filed corrections resulting from an audit revealing that a utility has underreported its transmission volumes and consequently forced other utilities to bear costs that should have been borne by the underreporting utility. The Commission thus retains its ability to make right the situation where the remainder of the industry has paid amounts which rightfully were owed by another.19 13. However, the reverse is not true. Overreporting does not raise the same concerns as underreporting; if a company overreports its transmission volumes and fails to file corrections by the deadline, it does so to its detriment and harms no one but itself. Errors of overreporting discovered after the deadline, by Commission-conducted audit or otherwise, thus may not be corrected. The D.C. Circuit acknowledged that any one of the first three justifications provided by the Commission, described above, justify a Commission policy of not accepting a corrected FERC 582 after the deadline. Indeed, the Commission need not have structured its regulation to allow corrections at all. The data the utilities must report is, after all, the utilities’ data, and that data must be filed under oath; in other words, full and complete reporting at the outset should be the norm. The Commission, however, elected to build leniency into its requirement to submit transmission volumes, in the form of an 8-month window from the April 30 filing deadline to the December 31 corrections deadline. That 8-month window provides more than sufficient time for utilities to identify and correct their overreporting. The Commission orders: (A) The Commission hereby grants waiver of the annual charges reporting requirement, FERC 582, to allow Westar to submit corrected information for FY 2002 (reporting corrected calendar year 2001 transmission data). The upcoming annual charges will be calculated to reflect this corrected information. (B) The Secretary is hereby directed to publish this order in the Federal Register. 19 If the Commission finds that the underreporting was intentional, it may seek to invoke its civil penalty authority as well. PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 By the Commission. Philis J. Posey, Acting Secretary. [FR Doc. E7–5052 Filed 3–21–07; 8:45 am] BILLING CODE 6717–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 60 [MSN–2006–1; FRL–8290–4] New Stationary Sources; Supplemental Delegation of Authority to the Mississippi Department of Environmental Quality Environmental Protection Agency (EPA). ACTION: Delegation of authority. AGENCY: SUMMARY: The Mississippi Department of Environmental Quality (MSDEQ or agency) has requested that EPA delegate authority for implementation and enforcement of existing New Source Performance Standards (NSPS) which have been previously adopted by the agency but have remained undelegated by EPA, and has requested that EPA approve the mechanism for delegation (adopt-by-reference) of future NSPS. The purpose of MSDEQ’s request for approval of its delegation mechanism is to streamline existing administrative procedures by eliminating any unnecessary steps involved in the Federal delegation process. With this NSPS delegation mechanism in place, a new or revised NSPS promulgated by EPA will become effective in the State of Mississippi on the date the NSPS is adopted-by-reference pursuant to a rulemaking of the MSDEQ, if the agency adopts the NSPS without change. ‘‘Adopt-by-reference’’ means the EPA promulgated standard has been adopted directly into the State regulations by reference to the Federal law. No further agency requests for delegation will be necessary. Likewise, no further Federal Register notices will be published. In this action, EPA is delegating authority to MSDEQ for implementation and enforcement of existing NSPS which have been previously adopted by MSDEQ and which are identified in the Supplementary Information section below. In addition, EPA is approving MSDEQ’s ‘‘adopt-by-reference’’ mechanism for delegation of future NSPS. DATES: Effective Date: The effective date is March 22, 2007. ADDRESSES: Copies of the request for delegation of authority are available for public inspection during normal E:\FR\FM\22MRR1.SGM 22MRR1

Agencies

[Federal Register Volume 72, Number 55 (Thursday, March 22, 2007)]
[Rules and Regulations]
[Pages 13442-13444]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-5052]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 382

[Docket No. RM00-7-012]


Revision of Annual Charges to Public Utilities (Westar Energy, 
Inc. and Kansas Gas and Electric Company)

Issued March 15, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule; order on remand and announcement of policy.

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

SUMMARY: In this order, the Federal Energy Regulatory Commission 
(Commission) addresses issues raised by the United States Court of 
Appeals for the District of Columbia Circuit (D.C. Circuit) on remand 
in Westar Energy Inc., Docket No. RM87-3-000. The Commission here 
affirms its regulation at 18 CFR 382.201 (2006), adopted in Order No. 
641, allowing correction of transmission volumes, but in response to 
the remand allows Westar Energy, Inc. to submit corrected transmission 
volumes out-of-time.
    The Commission clarifies going forward that it will accept timely 
FERC Reporting Requirement No. 582 (FERC 582) corrections but will 
accept only those late-filed FERC 582 corrections that are discovered 
through a Commission-conducted audit and that correct previously under-
reported transmission volumes. When a public utility underreports, it 
is assessed comparatively smaller annual charges, and other public 
utilities are assessed relatively larger annual charges thereby 
subsidizing those utilities who underreport.

DATES: Effective Date: This order on remand is effective March 15, 
2007.

FOR FURTHER INFORMATION CONTACT: Jennifer Rinker, Office of the General 
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426, (202) 502-6563.

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

Order on Remand and Announcing Policy on Submission of Corrected 
Electric Annual Charge-Related Data

    1. This order addresses issues raised by the United States Court of 
Appeals for the District of Columbia Circuit (D.C. Circuit) on 
remand.\1\ The Commission here affirms its regulation allowing 
correction of transmission volumes,\2\ adopted in Order No. 641,\3\ but 
in response to the remand allows Westar Energy, Inc. (Westar) to submit 
corrected transmission volumes out-of-time. The Commission clarifies 
going forward that it will accept timely FERC Reporting Requirement No. 
582 (FERC 582) corrections but will accept only those late-filed FERC 
582 corrections that are discovered through a

[[Page 13443]]

Commission-conducted audit and that correct previously under-reported 
transmission volumes.\4\
---------------------------------------------------------------------------

    \1\ Westar Energy Inc., Docket No. RM87-3-000 (Apr. 8, 2004) 
(unpublished letter order), reh'g denied sub nom. Revision of Annual 
Charges to Public Utilities (Westar Energy, Inc. and Kansas Gas and 
Electric Company), 111 FERC ] 61,086 (2005), remanded sub nom. 
Westar Energy, Inc. v. FERC, 473 F.3d 1239 (D.C. Cir. 2007).
    \2\ 18 CFR 382.201 (2006).
    \3\ Revision of Annual Charges to Public Utilities, Order No. 
641, FERC Stats. & Regs. ] 31,109 (2000), reh'g denied, Order No. 
641-A, 94 FERC ] 61,290 (2001).
    \4\ When a public utility underreports, it is assessed 
comparatively smaller annual charges, and other public utilities are 
assessed relatively larger annual charges. The effect is that the 
underreporting utility pays less than its fair share of the 
Commission's costs, and is effectively subsidized by other utilities 
who will pay more than their fair share of the Commission's costs.
---------------------------------------------------------------------------

Background

    2. As required by Section 3401 of the Omnibus Budget Reconciliation 
Act of 1986,\5\ the Commission's regulations provide for the payment of 
annual charges by public utilities.\6\ The Commission intends that its 
electric annual charges in any fiscal year will recover the 
Commission's estimated electric regulatory program costs (other than 
the costs of regulating Federal Power Marketing Agencies (PMAs) and 
electric regulatory program costs recovered through electric filing 
fees) for that fiscal year. In the next fiscal year the Commission 
adjusts the annual charges up or down, as appropriate, both to 
eliminate any over-or under-recovery of the Commission's actual costs 
and to eliminate any over-or under-charge of any particular public 
utility. The Commission accomplishes this by recalculating the annual 
charges and carrying over any over-or under-charge from the prior year 
as a credit or debit on the next fiscal year's annual charges bill.\7\
---------------------------------------------------------------------------

    \5\ 42 U.S.C. 7178 (2000).
    \6\ 18 CFR 382.201 (2006).
    \7\ 18 CFR 382.201 (2006); see, e.g., Order No. 641, FERC Stats. 
& Regs. ] 31,109 at 31,841-42; accord Annual Charges under the 
Omnibus Budget Reconciliation Act of 1986 (CNG Power Services), 87 
FERC ] 61,074 at 61,302 (1999) (CNG); Annual Charges Under the 
Omnibus Budget Reconciliation Act of 1986 (Phibro Inc.), 81 FERC ] 
61,308 at 62,424-25 (1997).
---------------------------------------------------------------------------

    3. In calculating annual charges, the Commission determines its 
total electric regulatory program costs and subtracts all PMA-related 
costs and electric filing fee collections to determine its collectible 
electric regulatory program costs. That amount is charged to public 
utilities that provide transmission service. Public utilities that 
provide transmission service and thus are subject to annual charges 
must submit FERC 582 to the Office of the Secretary by April 30 of each 
year, providing data for the previous calendar year.\8\ The reports 
include their transmission of electric energy in interstate commerce, 
as measured by: (1) Unbundled wholesale transmission; (2) unbundled 
retail transmission; and (3) bundled wholesale power sales which, by 
definition, include a transmission component, where the transmission 
component is not separately reported as unbundled transmission.
---------------------------------------------------------------------------

    \8\ 18 CFR 382.201 (2006).
---------------------------------------------------------------------------

    4. Importantly, the Commission uses that data to allocate its 
collectible electric regulatory program costs among all public 
utilities that provide transmission service; changing the amount owed 
by one public utility has an effect on the amount owed by all of the 
others. The Commission issues bills for annual charges based on each 
public utility's transmission service (as reported in the FERC 582) as 
compared to the total of all public utilities' transmission service, 
and the bills must be paid within 45 days of the date on which the 
Commission issues the bills.\9\ The regulations allow public utilities 
to make corrections to their previously filed FERC 582s, but they must 
do so within a specified time:
---------------------------------------------------------------------------

    \9\ See, e.g., Order No. 641, FERC Stats. & Regs. ] 31,109 at 
31,848-20; Order No. 641-A, 94 FERC at 62,037.

    Corrections to the information reported on [FERC] 582, as of 
January 1, 2002, must be submitted under oath to the Office of the 
Secretary on or before the end of each calendar year in which the 
information was originally reported (i.e., on or before the last day 
of the year that the Commission is open to accept such filings).\10\
---------------------------------------------------------------------------

    \10\ 18 CFR 382.201(c)(2) (2006).

    The Commission adjusts the annual charges in the following fiscal 
year (FY), using this corrected information, in order to eliminate any 
over or under recovery both of the Commission's actual costs and of the 
charges to each public utility.\11\
---------------------------------------------------------------------------

    \11\ See Order No. 641, FERC Stats & Regs. ] 31,109 at 31,857; 
Revision of Annual Charges to Public Utilities (California 
Independent System Operator, Inc.), 101 FERC ] 61,043 at 61,163, 
reh'g dismissed, 101 FERC ] 61,326 at P 9 (2002) (CAISO); accord 
CNG, 87 FERC at 61,303.
---------------------------------------------------------------------------

Earlier Filings and Orders

    5. On December 18, 2003, Westar submitted a corrected FERC 582 for 
both 2002 and 2003, correcting the data reported for the years 2001 and 
2002, respectively. Westar explained that its internal review, prompted 
by a change in the Commission's reporting requirements, revealed that 
it had over-reported transmission in several particulars. Westar 
requested a waiver of the Commission's regulations, observing that the 
Commission had permitted another company, Kansas City Power and Light 
Company (KCPL), to file a correction for calendar year 2001 in 
2003.\12\
---------------------------------------------------------------------------

    \12\ Kansas City Power & Light, Docket No. FA03-17-000 (August 
14, 2003).
---------------------------------------------------------------------------

    6. By letter order dated April 8, 2004, the Director of the 
Commission's Division of Financial Services, Office of the Executive 
Director, accepted Westar's corrections for FY 2003 (reporting 
corrected calendar year 2002 transmission data), but rejected Westar's 
proposed corrections for FY 2002 (reporting corrected calendar year 
2001 transmission data) on the ground that it was untimely under 
section 382.201(c)(2) of the Commission's regulations. On May 7, 2004, 
Westar sought rehearing.
    7. The Commission subsequently denied rehearing for four reasons: 
first, the Commission's regulations expressly provided that corrections 
be made by the end of the calendar year in which the information was 
originally filed; second, the broader interest in preserving the 
finality of annual charges weighed against Westar's individual interest 
in allowing an untimely correction; third, the Commission had offered 
no assurances that it would correct erroneously filed information 
beyond the deadline for filing corrected information expressly spelled 
out in the regulations; and fourth, Westar and KCPL were not similarly 
situated because the Commission itself caused KCPL's late filing and it 
would, therefore, have been inequitable to reject KCPL's out-of-time 
corrections to the detriment of the company.\13\
---------------------------------------------------------------------------

    \13\ 111 FERC ] 61,086 at P 10-12.
---------------------------------------------------------------------------

    8. Westar filed a petition for review with the D.C. Circuit, and on 
January 16, 2007, the D.C. Circuit vacated and remanded the 
Commission's not allowing Westar's corrected FERC 582 for FY 2002, 
finding the Commission's order provided no basis ``in fact or in logic 
for the Commission's refusal to treat Westar as it had treated KCPL.'' 
\14\
---------------------------------------------------------------------------

    \14\ 473 F.3d. at 1243.
---------------------------------------------------------------------------

Discussion

    9. In light of the D.C. Circuit's finding, and to bring this matter 
to an expeditious conclusion, the Commission will allow Westar to 
submit the corrected FY 2002 transmission volumes that the Commission 
had previously rejected because they had been filed out-of-time.
    10. The Commission does, however, reiterate its continued 
commitment to the policy reflected in part 382 of the Commission's 
regulations, namely that corrected transmission volumes must be filed 
by the end of the calendar year in which the transmission volumes were 
originally filed. This is what the Commission's regulations 
require.\15\ The court found, while vacating and remanding the 
Commission's determination as to Westar, that the first three of the 
Commission's four reasons

[[Page 13444]]

for denying Westar's request both alone and together justify this 
policy: (1) The regulations expressly required filing of corrections by 
a date certain; (2) waiving the deadline would undermine the certainty 
that the annual charges would not be indefinitely subject to change; 
and (3) the Commission has never suggested it would ignore the deadline 
spelled out in its regulations.\16\
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    \15\ 18 CFR 382.201(c)(2) (2006).
    \16\ 473 F.3d. at 1241-42. As noted above, it was the 
Commission's failure to adequately explain the fourth reason that 
led to the remand.
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    11. We also announce a policy, going forward, as to when we will 
waive the regulation and allow untimely submissions. The Commission's 
policy going forward will be to grant waiver and accept only those 
late-filed corrections discovered through a Commission-conducted audit 
in order to remedy an underreporting of transmission volumes (and thus 
where other utilities have subsidized the underreporting utility).
    12. As stated above, the Commission allocates its collectible 
electric regulatory program costs among public utilities. A reduction 
in the amount owed by one utility necessarily has an effect, an 
increase, on the amount owed by all of the others. Therefore, if a 
utility does not accurately report its transmission volumes, the 
Commission cannot charge it appropriately.\17\ The allocation of costs 
based on transmission volumes creates a natural incentive for utilities 
to underreport their transmission volumes in a given year. Just as 
public utilities have a natural incentive to ``abuse their market 
power,'' \18\ so, by analogy, public utilities subject to reporting 
transmission volumes for purposes of calculating their proportionate 
share of the Commission's collectible electric regulatory program costs 
have similar incentives to underreport their transmission volumes and 
thereby reduce the costs allocated to them. The effect of such 
underreporting is an inequitable subsidization by other utilities of 
any utility that underreported. The agency's audit process provides a 
check on that natural incentive. Therefore, the Commission will allow 
late-filed corrections resulting from an audit revealing that a utility 
has underreported its transmission volumes and consequently forced 
other utilities to bear costs that should have been borne by the 
underreporting utility. The Commission thus retains its ability to make 
right the situation where the remainder of the industry has paid 
amounts which rightfully were owed by another.\19\
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    \17\ As we have noted, the transmission volumes utilities report 
are the utilities' data. These data are, moreover, filed under oath. 
18 CFR 382.201(c)(1) (2006); see Revision of Annual Charges to 
Public Utilities (PJM Interconnection), 105 FERC ] 61,093 at P 8 
(2003); Midwest Independent Transmission System Operator, Inc., 103 
FERC ] 61,048 at P 13-14, reh'g denied, 104 FERC ] 61,060 (2003); 
CAISO, 101 FERC ] 61,326 at P 9; CAISO, 101 FERC ] 61,043 at P 10. 
While utilities are thus required to report complete and accurate 
data (by April 30 of each year), we nevertheless recognize that 
utilities may err in their reporting, and so we allow corrections to 
be filed up to eight months following their original filing, i.e., 
by the end of the calendar year.
    \18\ Pennsylvania Elec. Co. v. FERC, 11 F.3d 207, 211 n.5 (D.C. 
Cir. 1993); Nat'l Fuel Gas Supply Corp. v. FERC, 468 F.3d 831, 834-
835 (D.C. Cir. 2006); United Distribution Cos. v. FERC, 88 F.3d 
1105, 1122 & n.4 (D.C. Cir. 1996); Associated Gas Distribs. v. FERC, 
824 F.2d 981, 1010 (D.C. Cir. 1987).
    \19\ If the Commission finds that the underreporting was 
intentional, it may seek to invoke its civil penalty authority as 
well.
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    13. However, the reverse is not true. Overreporting does not raise 
the same concerns as underreporting; if a company overreports its 
transmission volumes and fails to file corrections by the deadline, it 
does so to its detriment and harms no one but itself. Errors of 
overreporting discovered after the deadline, by Commission-conducted 
audit or otherwise, thus may not be corrected. The D.C. Circuit 
acknowledged that any one of the first three justifications provided by 
the Commission, described above, justify a Commission policy of not 
accepting a corrected FERC 582 after the deadline. Indeed, the 
Commission need not have structured its regulation to allow corrections 
at all. The data the utilities must report is, after all, the 
utilities' data, and that data must be filed under oath; in other 
words, full and complete reporting at the outset should be the norm. 
The Commission, however, elected to build leniency into its requirement 
to submit transmission volumes, in the form of an 8-month window from 
the April 30 filing deadline to the December 31 corrections deadline. 
That 8-month window provides more than sufficient time for utilities to 
identify and correct their overreporting.
    The Commission orders:
    (A) The Commission hereby grants waiver of the annual charges 
reporting requirement, FERC 582, to allow Westar to submit corrected 
information for FY 2002 (reporting corrected calendar year 2001 
transmission data). The upcoming annual charges will be calculated to 
reflect this corrected information.
    (B) The Secretary is hereby directed to publish this order in the 
Federal Register.

    By the Commission.
Philis J. Posey,
Acting Secretary.
 [FR Doc. E7-5052 Filed 3-21-07; 8:45 am]
BILLING CODE 6717-01-P
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