Preventing Undue Discrimination and Preference in Transmission Service, 2984-3143 [E8-144]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 73, Number 11 (Wednesday, January 16, 2008)]
[Rules and Regulations]
[Pages 2984-3143]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-144]



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Part II





Department of Energy





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Federal Energy Regulatory Commission



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18 CFR Part 37



Preventing Undue Discrimination and Preference in Transmission Service; 
Final Rule

Federal Register / Vol. 73, No. 11 / Wednesday, January 16, 2008 / 
Rules and Regulations

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket Nos. RM05-17-001, 002 and RM05-25-001, 002; Order No. 890-A]


Preventing Undue Discrimination and Preference in Transmission 
Service

Issued December 28, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Order on rehearing and clarification.

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SUMMARY: The Federal Energy Regulatory Commission affirms its basic 
determinations in Order No. 890, granting rehearing and clarification 
regarding certain revisions to its regulations and the pro forma open-
access transmission tariff, or OATT, adopted in Order Nos. 888 and 889 
to ensure that transmission services are provided on a basis that is 
just, reasonable, and not unduly discriminatory. The reforms affirmed 
in this order are designed to: (1) Strengthen the pro forma OATT to 
ensure that it achieves its original purpose of remedying undue 
discrimination; (2) provide greater specificity to reduce opportunities 
for undue discrimination and facilitate the Commission's enforcement; 
and (3) increase transparency in the rules applicable to planning and 
use of the transmission system.

DATES: Effective Date: This rule will become effective March 17, 2008.

FOR FURTHER INFORMATION CONTACT:
    W. Mason Emnett (Legal Information), Office of the General 
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426, (202) 502-6540.
    Daniel Hedberg (Technical Information), Office of Energy Market 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-6243.
    Tony Ingram (Technical Information), Office of Energy Market 
Regulation, 888 First Street, NE., Washington, DC 20426, (202) 502-
8938.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Need for and Applicability of Order No. 888
    A. The Need for Reform
    B. Core Elements of Order No. 888 That Are Retained
    C. Scope and Applicability of Order No. 890
III. Reforms of the OATT
    A. Consistency and Transparency of ATC Calculations
    B. Coordinated, Open, and Transparent Planning
    C. Transmission Pricing
    1. Energy and Generation Imbalances
    2. Credits for Network Customers
    3. Capacity Reassignment
    4. ``Operational'' Penalties
    5. ``Higher of'' Pricing Policy
    6. Other Ancillary Services
    D. Non-Rate Terms and Conditions
    1. Modifications to Long-Term Firm Point-to-Point Service
    2. Rollover Rights
    3. Modification of Receipt or Delivery Points
    4. Acquisition of Transmission Service
    5. Designation of Network Resources
    6. Clarifications Related to Network Service
    7. Transmission Curtailments
    8. Standardization of Rules and Practices
    9. OATT Definitions
    E. Enforcement
IV. Information Collection Statement
V. Document Availability
VI. Effective Date and Congressional Notification
Regulatory Text
Appendix A: Petitioner Acronyms
Appendix B: Post-Technical Conference Commenter Acronyms
Appendix C: Pro Forma Open Access Transmission Tariff

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

I. Introduction

    1. On February 16, 2007, the Commission issued Order No. 890,\1\ 
addressing and remedying opportunities for undue discrimination under 
the pro forma Open Access Transmission Tariff (OATT) adopted in Order 
No. 888.\2\ The pro forma OATT was intended to foster greater 
competition in wholesale power markets by reducing barriers to entry in 
the provision of transmission service. In the ten years since Order No. 
888, however, flaws in the pro forma OATT undermined its ability to 
realize the core objective of remedying undue discrimination. The 
Commission acted in Order No. 890 to correct these flaws by reforming 
the terms and conditions of the pro forma OATT in several critical 
areas, including the calculation of available transfer capability 
(ATC), the planning of transmission facilities, and the conditions of 
services offered by each transmission provider.
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    \1\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12,266 (March 15, 2007), 
FERC Stats. & Regs. ] 31,241 (2007) (Order No. 890).
    \2\ Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ] 
31,036 (1996), order on reh'g, Order No. 888-B, 81 FERC ] 61,248 
(1997), order on reh'g, Order No. 888-C, 82 FERC ] 61,046 (1998), 
aff'd in relevant part sub nom. Transmission Access Policy Study 
Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000) (TAPS v. FERC), aff'd 
sub nom. New York v. FERC, 535 U.S. 1 (2002).
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    2. Many have expressed support of the Commission's reforms. Greater 
specificity regarding the transmission provider's obligations under its 
OATT will reduce opportunities for the exercise of undue 
discrimination, make undue discrimination easier to detect, and 
facilitate the Commission's enforcement of the tariff. Greater 
transparency in the rules applicable to the planning and use of the 
transmission system will help both transmission providers and customers 
comply with applicable tariff requirements. Although we grant rehearing 
and clarification below to address certain implementation issues raised 
by petitioners, we leave in place the fundamental reforms adopted in 
Order No. 890.
    3. At the outset, we note that work is well underway to develop 
consistent practices governing the calculation of ATC, in coordination 
with the North American Electric Reliability Corporation (NERC) and the 
North American Energy Standards Board (NAESB). Eliminating the broad 
discretion that transmission providers currently have in calculating 
ATC will increase nondiscriminatory access to the grid and ensure that 
customers are treated fairly in seeking alternative power supplies. We 
commend transmission providers for the substantial resources they have 
dedicated to this process and NERC and NAESB for their leadership in 
guiding the standardization effort.
    4. We also commend transmission providers for the substantial 
resources dedicated to the development of transmission planning 
processes in response to Order No. 890. Transmission providers and 
stakeholders recently submitted tariff proposals that will govern 
transmission planning under the pro forma OATT. Transmission planning 
is critical because it is the means by which customers consider and 
access new sources of energy and have an opportunity to explore the 
feasibility of non-transmission alternatives. It is therefore vital for 
each transmission provider to open its transmission planning process to 
customers, coordinate with customers regarding future system plans, and 
share necessary planning information with customers.

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    5. In addition, transmission providers have implemented new service 
options for long-term firm point-to-point customers and adopted 
modifications to other services. Instead of denying a long-term request 
for point-to-point service because as little as one hour of service is 
unavailable, transmission providers must now consider their ability to 
offer a modified form of planning redispatch or a new conditional firm 
option to accommodate the request. This increases opportunities to 
efficiently utilize transmission by eliminating artificial barriers to 
use of the grid. Charges for energy and generation imbalances also have 
been standardized, including relaxed penalties for intermittent 
resources. This standardization reduces the potential for undue 
discrimination, increases transparency, and reduces confusion in the 
industry that resulted from the prior lack of consistency.
    6. Taken together, these and other reforms adopted in Order No. 890 
will better enable the pro forma OATT to achieve the core object of 
remedying undue discrimination in the provision of transmission 
service. The Commission therefore rejects requests to eliminate, or 
substantially modify, the various reforms adopted in Order No. 890.\3\ 
We address each of the arguments made by petitioners in turn. We also 
address comments received in response to the technical conference held 
by Commission staff on July 30, 2007, regarding certain issues related 
to the designation and termination of network resources, in section 
III.D.5.\4\
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    \3\ A list of petitioners filing requests for rehearing and/or 
clarification is provided in Appendix A. The requests for rehearing 
filed by American Transmission, Bonneville, EPSA, Pacific Northwest 
Parties, and REPIO are deficient because they fail to include a 
Statement of Issues section separate from the arguments made, as 
required by Rule 713 of the Commission's Rules of Practice and 
Procedure. See 18 CFR 385.713(c)(2). Consistent with Rule 713, we 
deem these petitioners to have waived the particular issues for 
which they seek rehearing. We also reject TranServ's request for 
rehearing for having been filed late, in violation of section 313(a) 
of the Federal Power Act (FPA). See 16 U.S.C. 8351(a). The 
Commission does consider, however, these petitioners' requests for 
clarification, to the extent they are not in fact requests for 
rehearing. We also address the merits of each request for rehearing 
to demonstrate that, had they been considered, our decision would be 
unchanged.
    \4\ A list of parties filing comments in response to the July 
30, 2007 technical conference is provided in Appendix B.
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II. Need for and Applicability of Order No. 888

 A. The Need for Reform

    7. As the Commission noted in Order No. 888, it is in the economic 
self-interest of transmission monopolists to deny transmission to 
competitors or to offer transmission on a basis that is inferior to 
that which they provide themselves.\5\ The Commission sought to remedy 
that potential for discrimination through adoption of the pro forma 
OATT in Order No. 888. Despite the many accomplishments of Order No. 
888, the Commission determined in Order No. 890 that the existing pro 
forma OATT continued to allow transmission providers substantial 
discretion in implementing some of its basic requirements. This 
discretion, in turn, created substantial opportunities for undue 
discrimination. Order No. 890 reformed the pro forma OATT to limit 
opportunities for undue discrimination and promote efficient use of the 
grid.
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    \5\ Order No. 888 at 31,682.
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    8. In Order No. 890, the Commission rejected arguments that it was 
relying on unsubstantiated allegations of discriminatory conduct to 
justify its reforms. Although certain commenters did allege 
discriminatory conduct in response to the Notice of Proposed Rulemaking 
(NOPR) initiating this proceeding,\6\ the Commission made clear that it 
was not making specific factual findings of discrimination and that 
such specific findings were not required in order for it to promulgate 
a generic rule to eliminate undue discrimination.\7\ The Commission 
explained that it had ample grounds to act as necessary to limit 
opportunities for undue discrimination that continue to exist under the 
pro forma OATT.
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    \6\ Preventing Undue Discrimination and Preference in 
Transmission Service, Notice of Proposed Rulemaking, 71 FR 32,636 
(Jun. 6, 2006), FERC Stats. & Regs. ] 32,603 (2006) (NOPR).
    \7\ See Order No. 890 at P 41 (citing Transmission Access Policy 
Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd sub nom., 
New York v. FERC, 535 U.S. 1 (2002); National Fuel Gas Supply Corp 
v. FERC, 468 F.3d 831 (D.C. Cir. 2006)).
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Requests for Rehearing and Clarification
    9. Many petitioners agree with the Commission on rehearing that 
reforms to the pro forma OATT are needed because there continues to be 
both the opportunity and incentive for transmission providers to engage 
in undue discrimination.\8\ Two petitioners, however, seek rehearing of 
that finding as sufficient justification for adopting the reforms set 
forth in Order No. 890.
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    \8\ See e.g., Constellation, MISO, NRECA, Powerex, PSEG, and 
TAPS.
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    10. E.ON U.S. argues that the Commission has not presented any 
actual evidence of discrimination or opportunities for undue 
discrimination. Without actual evidence of discrimination, E.ON U.S. 
argues that the Commission lacks reasoned support for its finding that 
the reforms adopted in Order No. 890 are necessary to remedy undue 
discrimination. E.ON U.S. states a particular concern for the cost of 
implementing these reforms. E.ON U.S. contends that, absent evidence of 
unduly discriminatory behavior, the burdensome nature of compliance 
with Order No. 890 outweighs the benefits of its reforms.
    11. Southern expresses similar concern that Order No. 890 lacks 
actual findings of discrimination. Southern claims that the theoretical 
claims of discrimination relied upon by the Commission are attenuated 
and inconsistent with statements discouraging commenters from making 
sweeping generalizations regarding undue discrimination. Rather than 
predicating Order No. 890 on the Commission's authority to prevent 
undue discrimination, Southern suggests that the Commission clarify 
that it is promulgating these reforms pursuant to its authority to 
ensure just and reasonable rates and not to prevent undue 
discrimination.
    12. Southern also argues that the Commission failed to acknowledge 
other legal requirements and processes adopted after issuance of Order 
No. 888 that mitigate a transmission provider's incentives to 
discriminate, such as the Standards of Conduct, enforcement audits, new 
civil penalty authority, and mandatory reliability standards. Southern 
contends that transmission providers have a pecuniary incentive to 
grant, rather than deny, customer requests since doing so provides 
additional OATT revenues. Southern argues that the Commission appears 
to equate discretion with opportunities for discrimination, yet in 
certain circumstances expressly acknowledges that the transmission 
provider retains discretion in certain activities.
Commission Determination
    13. The Commission concluded in Order No. 890 that reforms to the 
pro forma OATT were necessary to address remaining opportunities for 
undue discrimination by transmission providers. Despite the efforts of 
Order No. 888 and our subsequent reforms, including those cited by 
Southern, opportunities for undue discrimination continued to exist. 
Under section 206 of the FPA, the Commission has a continuing 
obligation to ``determine whether any rule, regulation, practice or 
contract affecting rates for such transmission or sale for resale is 
unduly discriminatory or preferential, and must prevent those contracts 
and practices

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that do no meet this standard.'' \9\ The Commission's finding that 
continuing opportunities to discriminate exist therefore supports our 
action under FPA section 206 to adopt changes to the pro forma OATT. 
Upon review of the extensive record of this proceeding, including the 
support of a vast majority of commenters, the Commission remains 
convinced that the particular reforms adopted in Order No. 890 are 
appropriate to satisfy our obligation to remedy undue discrimination.
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    \9\ Order No. 888 at 31,669.
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    14. We reject E.ON U.S.' arguments that, without actual evidence of 
undue discrimination, Order No. 890 lacks reasoned support. As the 
Commission explained in Order No. 890, the courts have made clear that 
the Commission need not make specific factual findings of 
discrimination in order to promulgate a generic rule to eliminate undue 
discrimination. In Associated Gas Distributors v. FERC, the D.C. 
Circuit Court explained that the promulgation of generic rate criteria 
involves the determination of policy goals and the selection of the 
means to achieve them.\10\ The court concluded that, just as courts do 
not insist on empirical data for every proposition upon which the 
selection depends, ``[a]gencies do not need to conduct experiments in 
order to rely on the prediction that an unsupported stone will fall.'' 
\11\ The Commission exercised this authority in Order No. 890, 
discussing with particularity the concerns motivating each of the 
reforms adopted. As it did in Order No. 888, the Commission properly 
acted to limit continuing opportunities for undue discrimination, not 
to remedy actual instances of undue discrimination.
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    \10\ 824 F.2d 981 (D.C. Cir. 1987).
    \11\ Id. at 1008.
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    15. We acknowledge, as argued by Southern, that it is appropriate 
for transmission providers to retain discretion in some areas and that 
such discretion does not necessarily equate to discrimination. It is 
also true that some OATT revenues may increase as requests for service 
are granted (such as for point-to-point requests), rather than denied. 
This is not always or even predominantly the case, however, given that 
rates for network service are based on load-ratio shares and revenues 
do not increase with designations of network resources unless new 
facilities are constructed. Moreover, there are competing incentives 
for a transmission provider to deny or restrict service to customers in 
certain circumstances and allowing broad discretion in such areas is no 
longer appropriate. The Commission identified these areas in Order No. 
890, including the calculation of ATC, planning for transmission needs, 
and the provision of certain transmission services, and acted to remedy 
potential discrimination in each area. Notwithstanding the other legal 
requirements and processes cited by Southern, the Commission concluded 
in Order No. 890 that the reforms adopted were necessary based on a 
decade of experience administering the pro forma OATT. While the 
Standards of Conduct, audit procedures, and enhanced authority under 
the Energy Policy Act of 2005 (EPAct 2005) \12\ have aided the 
Commission in fulfilling its obligations under the FPA, the reforms 
adopted in Order No. 890 are also necessary to reduce opportunities for 
the exercise of undue discrimination, make undue discrimination easier 
to detect, and facilitate the Commission's enforcement of the open 
access requirements.
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    \12\ Pub. L. No. 109-58, 119 Stat. 594 (to be codified in 
scattered titles of the U.S.C.).
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    16. We appreciate that a significant amount of resources must be 
dedicated to implementation of the reforms adopted in Order No. 890 by 
transmission providers. We believe the burden of implementing these 
reforms is fully justified by the need to eliminate remaining 
opportunities for undue discrimination in the administration and 
implementation of open access requirements under the pro forma OATT. We 
note, moreover, that these reforms will benefit transmission providers 
seeking to comply with our regulations in good faith by providing more 
clarity regarding the requirements of the pro forma OATT previously 
left open to interpretation, thereby decreasing the possibility of 
disputes with transmission customers and enforcement actions by the 
Commission. The ability of transmission customers to misuse the tariffs 
to their own advantage, particularly in the scheduling process, has 
similarly been addressed. Taken together, we conclude that the benefits 
of our reforms outweigh the associated costs of implementation.

B. Core Elements of Order No. 888 That Are Retained

    17. Although Order No. 890 introduced many important reforms, the 
Commission also retained many core elements from Order No. 888. As 
noted in the NOPR, many provisions of Order No. 888 enjoy broad support 
from many sectors of the industry and the Commission did not intend in 
this proceeding to pursue the same level of industry restructuring 
undertaken there. Rather, the Commission intended Order No. 890 to 
strengthen the pro forma OATT while retaining the fundamental structure 
articulated in Order No. 888.
    18. The Commission thus retained the existing boundaries between 
wholesale and retail service drawn in Order No. 888. The Commission 
also retained the native load priority established in Order No. 888. 
The Commission stated that this priority continues to strike the 
appropriate balance between the transmission provider's need to meet 
its native load obligations and the needs of other entities to obtain 
service from the transmission provider to meet their own obligations. 
Order No. 890 also did not alter the types of services required under 
Order No. 888, i.e., network service and point-to-point service. 
Finally, the Commission retained the functional unbundling requirement 
promulgated in Order No. 888.
Requests for Rehearing and Clarification
    19. South Carolina E&G objects to the Commission's decision to 
retain the native load priority established in Order No. 888, arguing 
that FPA section 217 requires further protection for native load 
service. South Carolina E&G states that the native load priority 
adopted under Order No. 888 was implemented so that all customers, 
native load and non-native load, would be entitled to equivalent, 
nondiscriminatory service.\13\ South Carolina E&G argues that FPA 
section 217(k) now entitles load-serving entities (LSEs) to use their 
transmission systems to meet their state-law imposed native load 
service obligations and that this entitlement can no longer be deemed 
discriminatory under the FPA. To the extent an OATT provision 
compromising native load service is grounded in a finding of undue 
discrimination, South Carolina E&G argues that it must yield to the 
need to meet native load service obligations.
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    \13\ Citing Louisville Gas & Elec. Co., 114 FERC ] 61,282 at P 
125 (2006).
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    20. Joined by South Carolina Regulatory Staff, South Carolina E&G 
objects in particular to the Commission's decision to retain equal 
curtailment priority for all firm service.\14\ These petitioners argue 
that requiring transmission providers to curtail service to network and 
point-to-point customers on a basis comparable to the curtailment of 
service to native load customers unfairly exalts non-native customers 
at the expense of the

[[Page 2987]]

native load that financed the transmission system. They also contend 
the Commission's decision is inconsistent with Northern States Power 
Co. v. FERC,\15\ which they argue prohibits mandating comparable 
curtailment priority among native load and non-native load services in 
the face of a state commission edict requiring a transmission provider 
to give its native load top curtailment priority. In their view, this 
precedent must be read broadly in light of enactment of FPA section 
217(k), which they contend peremptorily counters any argument that 
priority for native load would be discriminatory.
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    \14\ South Carolina E&G and South Carolina Regulatory Staff also 
argue that reforms related to planning redispatch and conditional 
firm, rollover rights, and capacity reassignment are in violation of 
FPA section 217. We address those arguments in sections III.D.1, 
III.D.2, and III.C.3 respectively.
    \15\ 176 F.3d 1090 (8th Cir. 1999).
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    21. E.ON LSE similarly argues that FPA section 217 categorically 
protects an LSE's use of firm transmission service to the extent that 
such transmission service is required to meet the LSE's service 
obligation. E.ON LSE asks the Commission to allow LSEs to deviate from 
the requirements of Order No. 890 in circumstances where, in the LSE's 
good faith judgment, compliance would adversely affect the provision of 
firm transmission service to native load protected by FPA section 217.
    22. TDU Systems request clarification or rehearing to confirm that 
there is no preference under the reformed pro forma OATT for a public 
utility transmission provider's native load over the service 
obligations of other LSEs that use their transmission system. TDU 
Systems argue that section 217(a) of the FPA does not distinguish 
between the service obligations of transmission providers and the 
service obligations of their load serving customers and, therefore, 
neither should the pro forma OATT.
Commission Determination
    23. The Commission affirms the decision to retain the native load 
protections embodied in Order No. 888, as enhanced by the reforms 
adopted in Order No. 890. In Order No. 888, the Commission gave public 
utilities the right to reserve existing transmission capacity needed 
for native load growth reasonably forecasted within the utility's 
current planning horizon.\16\ The Commission also allowed transmission 
providers to restrict rollover rights based on reasonably forecasted 
need at the time the contract is executed.\17\ Contrary to petitioner's 
assertions, the native load protections affirmed in Order No. 890 
satisfy the requirements of FPA section 217. Section 217 applies not 
only to distribution utilities providing service to end-users, but also 
to electric utilities with long-term contracts to provide service to a 
distribution utility.\18\ Congress placed each of these types of 
customers on equal footing, regardless of their status as a network or 
firm point-to-point customer under the pro forma OATT or a transmission 
provider serving its native load. We therefore disagree with 
petitioners that section 217 requires the Commission to give top 
curtailment priority solely to network customers or the transmission 
provider serving native load.
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    \16\ See Order No. 888 at 31,394.
    \17\ See id. at 31,745.
    \18\ See EPAct 2005 sec. 1233(a)(3) (to be codified at section 
217(a)(3) of the FPA, 16 U.S.C. 824q(a)(3)). Petitioners' reliance 
on Northern States Power Co. v. FERC, 176 F.3d 1090 (8th Cir. 1999), 
is therefore misplaced. As the Commission has explained, the court 
upheld our authority to require pro rata curtailment of both 
network/native load and firm point-to-point service except in the 
limited circumstance when it would require the shedding of bundled 
retail load. Indeed, FPA section 217 could be read to grant electric 
utilities with long-term contracts to provide service to a 
distribution utility equal curtailment priority with other LSEs even 
in that limited situation, although we decline to address that 
argument here as it has not been raised on rehearing.
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    24. We decline to allow LSEs to deviate from the requirements of 
the pro forma OATT as they believe necessary to serve their native 
load, as suggested by E.ON LSE. Section 217 is intended to facilitate 
the ability of all utilities using firm transmission to meet their 
long-term service obligations, which the statute defines broadly to 
include not only service to end-users, but also distribution utilities 
serving end-users.\19\ The requirements of the pro forma OATT and the 
reforms adopted in Order No. 890 appropriately balance the needs of 
these various classes of transmission customers, including the 
transmission provider's native load, LSE customers serving network 
load, and other firm users of the system. This is entirely consistent 
with, if not expressly required by, FPA section 217.
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    \19\ See EPAct 2005 sec 1233(a) (to be codified at section 
217(a) of the FPA, 16 U.S.C. 824q(a)).
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C. Scope and Applicability of Order No. 890

    25. The reforms adopted in Order No. 890 apply to all transmission 
providers, including Commission-approved regional transmission 
organizations (RTOs) and independent system operators (ISOs), and non-
public utility transmission providers with reciprocity obligations. The 
particular process for implementing certain of the reforms adopted in 
Order No. 890 varied depending on the type of transmission provider at 
issue.
    26. For those transmission providers that have not been approved as 
ISOs or RTOs, and whose facilities are not under the control or within 
the footprint of an ISO or RTO, Order No. 890 established a two-tiered 
compliance process for adopting the non-rate terms and conditions of 
the revised pro forma OATT. These transmission providers were directed 
to submit FPA section 206 compliance filings that contain the revised 
non-rate terms and conditions of the revised pro forma OATT within 60 
days after publication of the order in the Federal Register.\20\ Any of 
these transmission providers that wished to retain a previously-
approved variation from the Order No. 888 pro forma OATT that was 
substantively affected by a reform adopted in Order No. 890 were 
directed to submit, within 30 days after publication of Order No. 890 
in the Federal Register, a request under FPA section 205 to retain 
those previously-approved variations, provided they continued to be 
consistent with or superior to the revised pro forma OATT adopted in 
Order No. 890.
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    \20\ The Commission subsequently extended by 60 days the date on 
which the reforms adopted in Order No. 890 would have otherwise been 
effective. See Preventing Undue Discrimination and Preference in 
Transmission Service, 119 FERC ] 61,037 (2007) (April 11 Order).
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    27. ISO and RTO transmission providers were directed to submit FPA 
section 206 compliance filings, within 210 days after the publication 
of Order No. 890 in the Federal Register, that contain the non-rate 
terms and conditions set forth in Order No. 890 or that demonstrate 
that their existing tariff provisions are consistent with or superior 
to the revised provisions of the pro forma OATT. Transmission-owning 
members of ISOs and RTOs, and non-ISO/RTO transmission providers within 
the footprint of an ISO or RTO, were similarly directed to make any 
necessary tariff filings within 210 days of its publication in the 
Federal Register.
    28. With regard to non-public utility transmission providers, the 
Commission retained the reciprocity language of the Order No. 888 pro 
forma OATT with a few modifications. First, the Commission updated the 
language to contain references to ISOs and RTOs, requiring transmission 
customers that are members of, or that take service from, an ISO/RTO to 
make comparable service available to other members of the ISO/RTO. As 
proposed in the NOPR, the Commission did not adopt a generic rule to 
implement FPA section 211A, which allows the Commission to require an 
unregulated transmitting utility to provide transmission services at 
rates that are comparable to those it charges itself and under non-rate 
terms and

[[Page 2988]]

conditions that are comparable to those it applies to itself, and are 
not unduly discriminatory or preferential. The Commission instead 
explained that it would follow a case-by-case approach to implementing 
FPA section 211A.
Requests for Rehearing and Clarification
    29. Few petitioners question the applicability of Order No. 890, 
although some are concerned with the timing of the compliance actions 
required by the Commission. Southern asks the Commission to grant 
rehearing and extend the initial compliance deadlines by 60 days and to 
remain open to further requests for extension if the deadlines set 
forth in Order No. 890 cannot be met. MidAmerican asks the Commission 
to extend the effective date for the revisions to the pro forma OATT to 
the first day of the month following the effective date of these 
reforms. MidAmerican contends that it will be burdensome for 
transmission providers and confusing to transmission customers to 
implement the reforms adopted in Order No. 890 in the middle of a 
billing cycle.
    30. TDU Systems express concern with the burden of reviewing 
section 205 filings by transmission providers seeking a determination 
from the Commission that a previously-approved variation from Order No. 
888 continues to be consistent with or superior to the revised pro 
forma OATT. TDU Systems contend that reviewing and evaluating these 
filings will be a large and time-consuming process. TDU Systems ask the 
Commission to allow transmission customers 45 days to perform their own 
evaluation and comment upon these filings, while retaining a 90-day 
deadline for the Commission to process the filings. Alternatively, TDU 
Systems request rehearing of the Commission's decision not to stagger 
the due dates for the various compliance filings required in Order No. 
890.
    31. Although they recognize that Order No. 890 preserves existing 
waivers of the obligations to file an OATT, Unitil and Alcoa seek 
explicit confirmation that their waivers of the obligation to maintain 
an Open Access Same-Time Information System (OASIS) site are still 
valid. Unitil notes that the Commission has found that it does not 
operate or control an interstate transmission grid.\21\ In addition, 
Unitil states that it voluntarily offers relevant information to ISO-NE 
for posting on its OASIS Web site. Similarly, Alcoa notes that the 
Commission has granted waiver of OASIS requirements to its Long Sault 
division, which owns five transmission lines in northern New York 
connecting Alcoa to its electric energy suppliers.\22\ Thus, Unitil and 
Alcoa seek confirmation that the Commission did not intend the OASIS 
requirements outlined in Order No. 890 to apply to their operations.
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    \21\ Citing Northern States Power Co., 76 FERC ] 61,250 at 
62,297 (2002).
    \22\ Citing Alcoa Power Generating, Inc. (Long Sault Division), 
116 FERC ] 61,257 (2006).
---------------------------------------------------------------------------

    32. NRECA requests clarification, or in the alternative rehearing, 
that the Commission did not intend in Order No. 890 to extend 
reciprocity obligations beyond transmission owning members of an ISO or 
RTO. NRECA contends that the Commission's modification to the pro forma 
OATT creates ambiguity by imposing the reciprocity obligation for all 
``members'' of an ISO or RTO. NRECA points out that some members of 
ISOs and RTOs do not own transmission, such as transmission dependent 
utilities, state regulatory authorities and eligible end-use customers. 
NRECA argues that expanding the reciprocity obligation to require non-
public utility transmission providers to provide service to non-
transmission owning members of an ISO or RTO would contradict 
Commission precedent \23\ and be unsupported by the record in this 
proceeding.
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    \23\ Citing American Transmission Co. LLC, 95 FERC ] 61,387 
(2001).
---------------------------------------------------------------------------

    33. WSPP requests that the Commission establish a date by which it 
must submit a compliance filing containing the non-rate terms and 
conditions of the revised pro forma OATT. WSPP states that it is 
neither a transmission provider nor an RTO/ISO and, instead, only has a 
limited open access transmission tariff on file with the Commission. 
WSPP states that this tariff only applies to its transmission-owning 
members that do not otherwise have an OATT.
Commission Determination
    34. In the April 11 Order, the Commission granted requests by EEI 
and others to extend by 60 days the date by which transmissions 
providers outside of ISO/RTO regions would have to submit compliance 
filings containing the non-rate terms and conditions of the revised pro 
forma OATT.\24\ Southern's request for rehearing on this point is 
therefore moot. Similarly, we reject as unnecessary TDU Systems' 
request to allow transmission customers additional time to evaluate and 
comment upon compliance filings. These filings have already been made, 
comments have been filed, and in many cases orders addressing the 
filings have been issued.
---------------------------------------------------------------------------

    \24\ April 11 Order at P 20.
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    35. The Commission also determined in the April 11 Order that it 
would be reasonable for a transmission provider to request that the 
imbalance-related provisions in Schedule 4 and Schedule 9 of the pro 
forma OATT be made effective on the first day of the billing cycle 
following the effectiveness of the underlying imbalance-related 
reforms.\25\ MidAmerican does not explain or otherwise justify the need 
to delay the effectiveness of any other reforms until the following 
billing cycle. We therefore reject as moot MidAmerican's request to 
extend the effective date of the imbalance-related reforms adopted in 
Order No. 890 until the following billing cycle and reject as 
unsupported its request to extend the effective date of all other 
reforms adopted in Order No. 890.
---------------------------------------------------------------------------

    \25\ Id. at P 22.
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    36. The Commission made clear in Order No. 890 that the reforms 
therein were not intended to disturb any existing waivers of the 
obligation to file an OATT or otherwise offer open access transmission 
service.\26\ The criteria for waiver of Order No. 890, moreover, 
remains unchanged from that used to evaluate the requests for waiver 
under Order Nos. 888 and 889. Revocation of any waivers will continued 
to be considered on a case-by-case basis in response to concerns raised 
by interested parties. We clarify that this applies equally to existing 
waivers of Order No. 889 and requirements to maintain an OASIS site.
---------------------------------------------------------------------------

    \26\ See Order No. 890 at P 135, n.105.
---------------------------------------------------------------------------

    37. We grant rehearing, in response to NRECA, to revise section 6 
of the pro forma OATT to require a customer that is a member of or that 
takes service from an RTO or ISO to provide comparable service, to the 
extent it owns transmission facilities, only to the transmission-owning 
members of the RTO or ISO. The Commission has expressed concern in the 
past that failure to grant reciprocity to transmission-owning members 
of an RTO or ISO would cause those members to lose the right to 
reciprocity solely as a result of participating in the RTO or ISO.\27\ 
We did not intend to expand that obligation in Order No. 890 to other 
members of an RTO or ISO when revising the language of section 6 of the 
pro forma OATT to refer to RTOs and ISOs.
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    \27\ See American Transmission Company LLC, 93 FERC ] 61,267 at 
61,858-59 (2000), reh'g denied, 95 FERC ] 61,387 at 62,446 (2001).
---------------------------------------------------------------------------

    38. Below the Commission adopts various other revisions to the pro 
forma OATT in response to requests for rehearing and clarification. 
These revisions do not disturb the

[[Page 2989]]

fundamental nature of the reforms adopted in Order No. 890 and, thus, 
we do not anticipate any difficulty in their implementation or 
disruption in on-going compliance efforts. We direct transmission 
providers that have not been approved as RTOs or ISOs, and whose 
facilities are not in the footprint of an RTO or ISO, to submit an FPA 
section 206 filing that contains the revised non-rate terms and 
conditions of the pro forma OATT stated in Appendix C within 60 days of 
publication of this order in the Federal Register. We direct RTO and 
ISO transmission providers, transmission providers whose facilities are 
in the footprint of an RTO or ISO, and WSPP to submit an FPA section 
206 filing that contains the revised non-rate terms and conditions of 
the pro forma OATT as stated within Appendix C within 90 days of 
publication of this order in the Federal Register.

III. Reforms of the OATT

A. Consistency and Transparency of ATC Calculations

    39. In Order No. 890, the Commission concluded that the lack of 
consistency and transparency in the methodology for calculating ATC 
creates the potential for undue discrimination in the provision of open 
access transmission service. To remedy this lack of consistency and 
transparency, the Commission directed public utilities, working through 
the NERC reliability standards and NAESB business practices development 
processes, to produce workable solutions to implement the ATC-related 
reforms adopted by the Commission. A number of petitioners seek 
rehearing and/or clarification regarding the Commission's ATC-related 
rulings, which we address below.
1. Consistency
a. Necessary Degree of Consistency
    40. The Commission required industry-wide consistency of all ATC 
components \28\ and certain definitions, data inputs, data exchange, 
and modeling assumptions in order to reduce the potential for undue 
discrimination in the provision of transmission service. Although the 
Commission concluded that the number of industry-wide ATC calculation 
formulas should be few in number, it did not require that a single ATC 
calculation methodology be applied by all transmission providers. The 
Commission found that it is not the methodologies for calculating ATC 
that create the opportunity for undue discrimination, rather the 
variability in the calculation of the components of ATC and the lack of 
a detailed description of the ATC calculation methodology and 
underlying assumptions used by the transmission provider.
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    \28\ The ATC components are total transfer capability (TTC), 
existing transmission commitments (ETC), capacity benefit margin 
(CBM), and transmission reserve margin (TRM).
---------------------------------------------------------------------------

    41. The Commission noted that NERC was then in the process of 
developing standards for three ATC calculation methodologies: contract 
or rated path ATC, network ATC, and network Available Flowgate Capacity 
(AFC). The Commission concluded that, if all of the ATC components and 
certain data inputs and assumptions are consistent, the use of the 
three ATC calculation methodologies included in reliability standards 
being developed would be acceptable. With regard to network AFC, the 
Commission specifically directed public utilities, working through 
NERC, to develop an AFC definition and requirements used to identify a 
particular set of transmission facilities as a flowgate. However, the 
Commission reminded transmission providers that our regulations require 
the posting of ATC values associated with a particular path, not AFC 
values associated with a flowgate. The Commission therefore directed 
public utilities, working through NERC, to develop in the MOD-001 
standard a rule to convert AFC into ATC values to be posted by 
transmission providers that currently use the flowgate methodology.
    42. The Commission also required further clarification regarding 
the calculation algorithms for firm and non-firm ATC. The Commission 
directed public utilities, working through NERC, to modify related ATC 
standards by implementing the following principles: (1) For firm ATC 
calculations, the transmission provider shall account only for firm 
commitments; and (2) for non-firm ATC calculations, the transmission 
provider shall account for both firm and non-firm commitments, 
postbacks of redirected services, unscheduled service, and 
counterflows.
Requests for Rehearing and Clarification
    43. Southern requests that the Commission clarify that consistency 
in ATC methodologies and CBM and TRM calculations must not take 
precedence over reliability and that some transmission provider 
discretion is necessary. Southern states that, in several places, Order 
No. 890 discusses minimizing transmission provider discretion in order 
to achieve consistency.\29\ Southern contends that totally eliminating 
this discretion would not allow transmission providers to address 
unique system conditions in ATC, CBM, and TRM calculations, which would 
impact system reliability. Southern claims that eliminating 
transmission provider discretion also would lead to more conservative 
modeling, which would likely result in understated amounts of ATC and 
an inefficient use of the system.\30\ To the extent making the 
treatment of certain ATC parameters or CBM or TRM calculations 
consistent would affect reliability, Southern asks that transparency in 
the treatment of those parameters and calculations be required, but 
that strict consistency not be enforced.
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    \29\ Citing Order No. 890 at P 207.
    \30\ Southern suggests that one example of when a transmission 
provider should have discretion is when modeling long-term firm 
transmission service reservation from a combustion turbine 
generating facility. Southern argues that, by its nature, such a 
generating facility normally will not often run in off-peak times. 
During those times, or when there is an impending outage of a 
generating facility, Southern argues that the transmission provider 
should have the discretion to reflect the operating characteristics 
of the generating facility by not including transmission service 
from the facility in its model.
---------------------------------------------------------------------------

    44. MidAmerican requests clarification that AFC quantities do not 
need to be converted into control area-to-control area path ATC 
quantities and that the Commission is not eliminating the coordination 
of individual transmission provider service with seams agreements and/
or regional tariff service on flowgates. MidAmerican asks the 
Commission to confirm that it is merely intending to require NERC to 
define a flowgate ATC quantity which is equal to or related to the 
flowgate AFC. MidAmerican contends that transmission customers, 
operators, and owners will not benefit from the conversion of flowgate 
AFCs into control area-to-control area path ATCs, the elimination of 
AFC as a useful transmission commodity, or the elimination of the 
coordination of individual provider and regional transmission service 
over flowgates. To the extent the Commission feels there is a 
comparability benefit for the conversion of AFC to ATC, MidAmerican 
requests clarification that providing transmission customers with a 
mechanism on OASIS to query/assess the effective ATC on a specific 
transmission path over a specific time is sufficient for compliance 
with the transmission provider's ATC posting obligation.
    45. E.ON U.S. requests clarification of the requirement that AFC 
calculations be converted into ATC for purposes of posting. E.ON U.S. 
states that some

[[Page 2990]]

RTOs, such as MISO and others, utilize AFC and do not calculate or post 
ATC for their systems. Due to interactions with these RTOs, E.ON U.S. 
now calculates AFC as well. E.ON requests that the Commission clarify 
that if RTOs and their member utilities are granted waivers of the 
requirement to calculate and post ATC, in favor of AFC, all 
transmission owning utilities in the region should be able to request a 
waiver on the same basis. E.ON claims that allowing all transmission-
owning utilities within a region to calculate AFC (instead of ATC) will 
result in greater accuracy and consistency within the industry.
    46. Although it does not challenge the Commission's decision not to 
require a single, industry-wide ATC calculation method, TDU Systems 
claims that the Commission fails to address the situation where 
transmission providers on a single interface choose different ATC 
calculation methods. TDU Systems argue that transmission providers must 
be required to provide consistent ATC values on either side of an 
interface. TDU Systems therefore request that adjacent transmission 
providers be required to coordinate to provide consistent ATC values 
across their common interfaces.
    47. NorthWestern requests that the Commission clarify that the 
consistency requirements of Order No. 890 do not prohibit utilities 
from reducing transfer capability for the purchase of reliability 
services. According to NorthWestern, some transmission providers may 
have to acquire various generation-based services, such as load 
following and regulation service, in the marketplace in order to meet 
reliability criteria. NorthWestern argues that some means should be 
allowed for retaining transmission at no cost for such deliveries, even 
though they do not meet the strict definition of CBM, since they are 
made for reliability reasons and no single user of the system would 
otherwise reimburse the transmission provider for the associated costs.
    48. EPSA and Williams request clarification that ATC and AFC 
calculations should be determined and posted in real-time, not just as 
planning information, and that the transmission provider be required to 
post results of its system utilization for ETC. Williams contends that 
this would augment the transparency deemed critical to a coherent and 
uniform calculation of ATC by enabling interested stakeholders and the 
Commission to verify the ATC calculations performed by transmission 
providers.
Commission Determination
    49. The Commission affirms the decision in Order No. 890 to require 
consistency of all ATC components and certain definitions, data inputs, 
data exchange and modeling assumptions. We continue to believe such 
consistency is necessary to reduce the potential for undue 
discrimination in the provision of transmission service.
    50. We disagree with Southern that increasing consistency with 
respect to the determination of ATC is contrary to reliability. Use of 
the NERC reliability standards process will, as a matter of course, 
guard against any unintended reduction in reliability. Nevertheless, we 
agree that reliability standards cannot address every unique system 
difference or differences in risk assumptions when modeling expected 
flows, which necessitates leaving room for limited discretion on the 
part of the transmission provider. We believe that the ATC requirements 
in Order No. 890 allow sufficient flexibility so that utilities, 
working through NERC/NAESB, can develop ATC standards that continue to 
provide reliability and are compatible with all other mandatory 
reliability standards or business practices, yet provide discretion 
where appropriate. If a transmission provider is faced with unique 
system conditions or modeling assumptions related to firm transmission 
service reservations\31\ that are not addressed in the ATC-related NERC 
reliability standards, it must make them transparent through its 
Attachment C filing and the OASIS posting requirements regarding ATC 
calculation and modeling approach, studies, models and assumptions and 
implement them consistently for all transmission customers.
---------------------------------------------------------------------------

    \31\ Transmission providers use different assumptions related to 
the percentage of firm reservations that are actually scheduled and 
flow.
---------------------------------------------------------------------------

    51. We deny MidAmerican's request for clarification that AFC values 
do not need to be converted into ATC postings of control area-to-
control area path quantities. As the Commission explained in Order No. 
890, our regulations require the posting of ATC values associated with 
a particular path, not AFC values associated with a flowgate.\32\ The 
Commission did not amend that requirement in Order No. 890 and 
MidAmerican fails to justify doing so now. To the extent MidAmerican or 
its customers find it beneficial also to post AFC, MidAmerican is free 
to post both ATC and AFC values. In response to E.ON U.S., however, we 
clarify that transmission-owning utilities in an RTO region can request 
waiver of the requirement to convert AFC calculations into ATC for 
posting purposes in the event the RTO has been granted such a waiver.
---------------------------------------------------------------------------

    \32\ See Order No. 890 at P 211. ATC values must be posted for 
control area to control area interconnections, paths for which 
service is denied, curtailed or interrupted for more than 24 hours 
in the past 12 months, and paths for which a customer requests to 
have ATC or TTC posted. See 18 CFR 37.6(b)(1)(i).
---------------------------------------------------------------------------

    52. In response to TDU Systems, we clarify that adjacent 
transmission providers must coordinate and exchange data and 
assumptions to achieve consistent ATC values on either side of a single 
interface. This is applicable to any neighboring transmission providers 
no matter whether they use the same or different ATC methodologies. We 
note, however, that the anticipated consistency is for available 
capability in the same direction across an interface.
    53. We clarify in response to NorthWestern that TRM may be used to 
accommodate the procurement of ancillary services used to provide 
service under the pro forma OATT. We deny as premature EPSA's and 
Williams' requests for clarification regarding the real-time 
determination and posting of ATC and AFC values, as well as posting of 
utilization of transmission provider's own system ETC. In Order No. 
890, the Commission required an exchange of the data both for short and 
long-term ATC/AFC calculation that will increase the accuracy of ATC 
calculations.\33\ The Commission also required that ATC be recalculated 
by all transmission providers on a consistent time interval, and in a 
manner that closely reflects the actual topology of the system, load 
forecast, interchange schedules, transmission reservations, facility 
ratings, and other necessary data, and that NERC/NAESB revise the 
related reliability standard and business practices accordingly.\34\ 
EPSA and William should address their concerns through the NERC and 
NAESB processes implementing these requirements.
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    \33\ See Order No. 890 at P 310.
    \34\ See id. at P 301.
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b. Process To Achieve Consistency
    54. The Commission directed public utilities, working through NERC 
and NAESB, to modify the ATC-related reliability standards and business 
practices in accordance with specific direction provided in Order No. 
890. The Commission concluded that the NERC reliability standards 
development process and the NAESB business standards development 
process are the appropriate forums for developing

[[Page 2991]]

consistency in ATC calculations. To that end, public utilities were 
directed, working through NERC, to modify the ATC-related reliability 
standards within 270 days after the publication of Order No. 890 in the 
Federal Register, i.e., December 10, 2007. Public utilities were also 
directed, working through NAESB, to develop business practices that 
complement NERC's new reliability standards within 360 days after the 
publication of Order No. 890 in the Federal Register, i.e., March 10, 
2008.\35\
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    \35\ The Commission has since extended these compliance 
deadlines to May 9, 2008, and August 7, 2008, respectively. See 
Preventing Undue Discrimination and Preference in Transmission 
Service, Notice of Extension of Time, Docket Nos. RM05-17-000, et 
al. (Dec. 6, 2007).
---------------------------------------------------------------------------

Requests for Rehearing and Clarification
    55. Several petitioners contend that the Commission's direction to 
public utilities, working through NERC, to modify standards to meet 
specific ATC requirements is tantamount to dictating reliability 
standards in violation of FPA section 215.\36\ These petitioners assert 
that system reliability will be best maintained if NERC, having been 
certified by the Commission as the ERO, is afforded discretion in 
creating the necessary reliability standards in the first instance 
prior to submission to the Commission for approval consistent with 
section 215.\37\ EEI and Southern suggest that the Commission give 
guidance and direction to NERC on how standards should be developed, 
but not be overly prescriptive. E.ON LSE argues that the Commission 
should require, or at least permit, NERC to consolidate its ATC 
development process with its ongoing reliability standards process to 
develop policies, but should refrain from rewriting any standards 
developed through that consolidated process.
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    \36\ E.g., EEI, E.ON LSE, and Southern.
    \37\ Citing 16 U.S.C. 824o(d)(2) (requiring the Commission to 
``give due weight to the technical expertise of the [ERO]'' on 
reliability matters).
---------------------------------------------------------------------------

Commission Determination
    56. The Commission affirms the decision in Order No. 890 to rely on 
the NERC reliability standards development process, and the NAESB 
business practices development process, to achieve a more coherent and 
uniform determination of ATC. We disagree that this conflicts with the 
Commission's obligations under section 215 of the FPA. In Order No. 
693, the Commission exercised its authority under FPA section 215 to 
direct the ERO to modify the existing modeling, data, and analysis 
(MOD) standards related to ATC calculation, providing guidance 
consistent with our requirements in Order No. 890. The Commission 
clarified that, where Order No. 693 identified a concern and offered a 
specific approach to address the concern, the Commission would consider 
an equivalent alternative approach provided that the ERO demonstrated 
that the alternative would address the Commission's underlying concern 
or goal as efficiently and effectively as the Commission's 
proposal.\38\ We believe this provides the appropriate flexibility for 
NERC, while ensuring that the Commission act to remedy the potential 
for undue discrimination in the calculation of ATC.
---------------------------------------------------------------------------

    \38\ See Mandatory Reliability Standards for the Bulk Power 
System, Order No. 693, 72 FR 16,416 (Apr. 4, 2007), FERC Stats. & 
Regs. ] 31,242 (2007) (Order No. 693), order on reh'g, 120 FERC ] 
61,053 (2007) (Order No. 693-A). Pending completion of the NERC/
NAESB standardization process, each transmission provider must 
perform its ATC-related calculations in accordance with the 
methodology set forth in Attachment C to its OATT, as revised to 
comply with Order No. 890.
---------------------------------------------------------------------------

c. Applicability to ISOs, RTOs, and Non-Public Utility Transmission 
Providers
    57. The Commission did not require ISO and RTO transmission 
providers to ``rejustify'' existing provisions in their OATTs that are 
not affected in a substantive manner by the revisions to the pro forma 
OATT in the Final Rule. However, the Commission did require all 
transmission providers, including an ISO or RTO, to demonstrate that 
variations from the tariff modifications required in Order No. 890 
continue to satisfy the consistent with or superior to standard. With 
respect to the application of the ATC requirements of Order No. 890, 
the Commission noted that ISOs and RTOs would be required to comply 
with reliability standards developed under FPA section 215.
Requests for Rehearing and Clarification
    58. Because Order No. 890 did not exempt ISOs/RTOs from the new ATC 
standards or curtailment information posting requirements, NYISO asks 
the Commission to clarify that NERC and NAESB must develop ATC 
standards and curtailment information posting rules that accommodate 
ISOs/RTOs. NYISO anticipates that ATC calculations will continue to be 
of limited significance within its control area, but acknowledges that 
it does calculate ATC at its external interfaces and also uses ATC to 
determine the availability of non-firm transmission service, i.e., 
service for customers that do not wish to be exposed to congestion 
charges. NYISO states that it, therefore, has an interest and intends 
to participate in the NERC and NAESB processes developing new ATC 
standards and curtailment information posting requirements.
    59. NYISO contends, however, that stakeholders from traditional 
systems will have a greater interest in the development of those rules 
and, as a result, that the NERC and NAESB processes may produce rules 
that primarily reflect the needs of traditional systems and do not 
accommodate ISOs/RTOs that are based upon locational marginal pricing 
of transmission. NYISO argues that Order No. 890 requires NERC and 
NAESB to develop standards that suit both traditional systems as well 
as the ISOs/RTOs that cover more than half of the load in the United 
States. NYISO requests that the Commission expressly state its 
expectation that the NERC and NAESB processes will produce standards 
that fulfill Order No. 890's objectives of transparency and inter-
regional consistency, yet that are sufficiently flexible to work for 
ISO/RTO regions.
Commission Determination
    60. Order No. 890 requires NERC and NAESB to develop a single set 
of ATC-related standards that will apply to all transmission providers, 
including RTOs and ISOs. We understand that the NERC ATC standard 
drafting team includes representatives from various industry sectors, 
including RTOs/ISOs, and we encourage NYISO to participate in the 
standard development process to provide NERC an opportunity to address 
its concerns. To the extent NYISO feels its concerns are not addressed 
in this process, it should bring the issue to the Commission's 
attention on review of the resulting reliability standards.
d. ATC Components
    61. In Order No. 890, the Commission adopted certain requirements 
regarding the components of ATC (i.e., TTC/TFC, ETC, CBM and TRM) 
necessary to achieve consistency and, in turn, limit the potential for 
undue discrimination in the calculation of ATC. Petitioners request 
rehearing and clarifi