Standards for Business Practices and Communication Protocols for Public Utilities, 43848-43860 [E8-17194]
Download as PDF
<![CDATA[
43848
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
impact is so minimal. Since this is a
routine matter that will only affect air
traffic procedures and air navigation, it
is certified that this rule will not have
a significant economic impact on a
substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle 1, section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority.
This rulemaking is promulgated
under the authority described in
Subtitle VII, Part A, Subpart 1, Section
40103, Sovereignty and use of airspace.
Under that section, the FAA is charged
with prescribing regulations to ensure
the safe and efficient use of the
navigable airspace. This regulation is
within the scope of that authority
because it creates Class E airspace
sufficient in size to contain aircraft
executing instrument procedures for the
Venetie Airport and represents the
FAA’s continuing effort to safely and
efficiently use the navigable airspace.
§ 71.1
[Amended]
2. The incorporation by reference in
14 CFR 71.1 of Federal Aviation
Administration Order 7400.9R, Airspace
Designations and Reporting Points,
signed August 15, 2007, and effective
September 15, 2007, is amended as
follows:
I
Paragraph 6005 Class E Airspace Extending
Upward From 700 Feet or More Above the
Surface of the Earth.
*
*
*
*
*
AAL AK E5 Venetie, AK [New]
Venetie, Venetie Airport, AK
(Lat. 67°00′31″ N., long. 146°21′59″ W.)
That airspace extending upward from 700
feet above the surface within a 6.4-mile
radius of the Venetie Airport, AK, and within
3.9 miles either side of the 062° bearing from
the Venetie Airport, AK, extending from the
6.4-mile radius to 10.1 miles northeast of the
Venetie Airport, AK; and that airspace
extending upward from 1,200 feet above the
surface within a 70-mile radius of the Venetie
Airport, AK.
*
*
*
*
*
Issued in Anchorage, AK, on July 17, 2008.
Anthony M. Wylie,
Manager, Alaska Flight Services Information
Area Group.
[FR Doc. E8–17075 Filed 7–28–08; 8:45 am]
BILLING CODE 4910–13–P
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
DEPARTMENT OF ENERGY
Adoption of the Amendment
Federal Energy Regulatory
Commission
In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR part 71 as follows:
18 CFR Part 38
PART 71—DESIGNATION OF CLASS A,
CLASS B, CLASS C, CLASS D, AND
CLASS E AIRSPACE AREAS;
AIRWAYS; ROUTES; AND REPORTING
POINTS
Standards for Business Practices and
Communication Protocols for Public
Utilities
I
[Docket No. RM05–5–005; Order No. 676–
C]
Issued July 21, 2008.
Federal Energy Regulatory
Commission, DOE.
ACTION: Final rule.
AGENCY:
1. The authority citation for 14 CFR
part 71 continues to read as follows:
I
Authority: 49 U.S.C. 106(g), 40103, 40113,
40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
SUMMARY: The Federal Energy
Regulatory Commission (Commission) is
revising its regulations to incorporate by
reference the latest version (Version
001) of certain standards adopted by the
Wholesale Electric Quadrant (WEQ) of
the North American Energy Standards
Board (NAESB). NAESB’s standards
revise its Open Access Same-Time
Information Systems (OASIS) business
practice standards, revise four business
practice standards relating to reliability
issues, add new standards on
transmission loading relief for the
Eastern Interconnection, add new
standards for public key infrastructure,
and add a new OASIS implementation
guide. Incorporating these revised
standards will provide customers with
information that will enable them to
obtain transmission service on a nondiscriminatory basis and will assist the
Commission in supporting needed
infrastructure and the reliability of the
interstate transmission grid.
DATES: Effective Date: This Final Rule
will become effective on August 28,
2008. Dates for implementation of the
standards are provided in the Final
Rule. The Director of the Federal
Register has approved the Incorporation
by reference of the standards addressed
in the Final Rule effective August 28,
2008.
FOR FURTHER INFORMATION CONTACT:
Ryan M. Irwin (technical issues), Office
of Energy Market Regulation, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426,
(202) 502–6454.
Kay Morice (technical issues), Office
of Energy Market Regulation, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426,
(202) 502–6507.
Gary D. Cohen (legal issues), Office of
the General Counsel, Federal Energy
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426,
(202) 502–8321.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T.
Kelliher, Chairman; Suedeen G. Kelly,
Marc Spitzer, Philip D. Moeller, and Jon
Wellinghoff.
TABLE OF CONTENTS
hsrobinson on PROD1PC76 with RULES
Paragraph
numbers
I. Background ...........................................................................................................................................................................................
II. Discussion ...........................................................................................................................................................................................
A. Overview ......................................................................................................................................................................................
B. Issues Raised by Commenters ....................................................................................................................................................
1. Cost of Obtaining NAESB Standards ...................................................................................................................................
2. Interpretation of NAESB Standards and OATT Principles ...................................................................................................
3. Weighing Costs and Benefits of Proposed Standards .........................................................................................................
4. Implementation Date for WEQ–001 ......................................................................................................................................
5. WEQ–001–0.5 .......................................................................................................................................................................
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
PO 00000
Frm 00004
Fmt 4700
Sfmt 4700
E:\FR\FM\29JYR1.SGM
29JYR1
2
7
7
12
13
16
18
20
22
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
43849
TABLE OF CONTENTS—Continued
Paragraph
numbers
6. WEQ–001–1.5(d) ..................................................................................................................................................................
7. WEQ–001–11 (Resales) .......................................................................................................................................................
8. WEQ–001–11.2.1 ..................................................................................................................................................................
9. WEQ–001–11.3 through WEQ–001–11.3.3 ..........................................................................................................................
10. WEQ–001–11.5.3 ................................................................................................................................................................
11. Resales of Conditional Long Term Firm Reservations .......................................................................................................
12. WEQ–004 (Coordinate Interchange) and WEQ–008 (Transmission Loading Relief—Eastern Interconnection) ..............
13. WEQ–012–1.5 (Public Key Infrastructure) ..........................................................................................................................
14. Requests for Modifications to NAESB Standards ..............................................................................................................
III. Implementation Dates and Procedures ..............................................................................................................................................
IV. Notice of Use of Voluntary Consensus Standards ............................................................................................................................
V. Information Collection Statement ........................................................................................................................................................
VI. Environmental Analysis ......................................................................................................................................................................
VII. Regulatory Flexibility Act Certification ..............................................................................................................................................
VIII. Document Availability .......................................................................................................................................................................
IX. Effective Date and Congressional Notification ..................................................................................................................................
1. The Federal Energy Regulatory
Commission (Commission) is amending
its regulations under the Federal Power
Act (FPA) 1 to incorporate by reference
the latest version (Version 001) of
certain business practice standards
concerning the Open Access Same-Time
Information Systems (OASIS) and gas/
electric coordination and four business
practice standards relating to reliability
issues adopted by the Wholesale
Electric Quadrant (WEQ) of the North
American Energy Standards Board
(NAESB). These revised standards
update earlier versions of these
standards that the Commission
previously incorporated by reference
into its regulations at 18 CFR 38.2 in
Order Nos. 676, 676–B, and 698.2 In
addition, in this Final Rule, the
Commission is amending its regulations
under the FPA to incorporate by
reference NAESB’s new standards on
transmission loading relief (TLR) for the
Eastern Interconnection and on public
key infrastructure (PKI) and to add a
new OASIS implementation guide.
I. Background
2. NAESB is a non-profit standards
development organization established in
January 2002 that serves as an industry
forum for the development of business
practice standards that promote a
seamless marketplace for wholesale and
1 16
U.S.C. 791a, et seq.
for Business Practices and
Communication Protocols for Public Utilities, Order
No. 676, 71 FR 26,199 (May 4, 2006), FERC Stats.
& Regs., ¶ 31,216 (Apr. 25, 2006), reh’g denied,
Order No. 676–A, 116 FERC ¶ 61,255 (2006), Order
No. 676–B, 72 FR 21,095 (Apr. 30, 2007), FERC
Stats. & Regs. ¶ 31,246 (Apr. 19, 2007), Standards
for Business Practices for Interstate Natural Gas
Pipelines; Standards for Business Practices for
Public Utilities, Order No. 698, 72 FR 38757 (July
16, 2007), FERC Stats. & Regs., ¶ 31,251 (June 25,
2007), order on clarification and reh’g, Order No.
698–A, 121 FERC ¶ 61,264 (2007).
hsrobinson on PROD1PC76 with RULES
2 Standards
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
retail natural gas and electricity.3 Since
1995, NAESB and its predecessor, the
Gas Industry Standards Board, have
been accredited members of the
American National Standards Institute
(ANSI), complying with ANSI’s
requirements that its standards reflect a
consensus of the affected industries.4
3. NAESB’s standards include
business practices that streamline the
transactional processes of the natural
gas and electric industries, as well as
communication protocols and related
standards designed to improve the
efficiency of communication within
each industry. NAESB supports all four
quadrants of the gas and electric
industries—wholesale gas, wholesale
electric, retail gas, and retail electric. All
participants in the gas and electric
industries are eligible to join NAESB
and participate in standards
development.5
4. NAESB’s procedures are designed
to ensure that all industry members can
have input into the development of a
standard, whether or not they are
members of NAESB, and each standard
NAESB adopts is supported by a
consensus of the relevant industry
segments.6
5. On December 26, 2007, NAESB
submitted a report detailing its new and
revised Version 001 business practice
standards dated October 31, 2007 with
minor corrections applied on November
16, 2007.7 These standards update the
3 See Standards for Business Practices and
Communication Protocols for Public Utilities,
Notice of Proposed Rulemaking, 72 FR 8318 (Feb.
26, 2007), FERC Stats. & Regs. ¶ 32,612, at P 3 (Feb.
20, 2007).
4 Id.
5 Id. P 4.
6 Id. P 5.
7 The Version 001 standards do not include
modifications of existing standards or new
standards to support Order No. 890, the
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
25
28
36
39
47
53
62
73
76
80
85
86
95
97
99
102
standards that we incorporated by
reference into our regulations in Order
Nos. 676, 676–B and 698, add a new
OASIS implementation guide, and add
new standards to: (1) Provide additional
functionality for OASIS transactions; (2)
provide business practice standards for
TLR in the Eastern Interconnection; and
(3) provide business practice standards
governing PKI.
6. On April 21, 2008, the Commission
issued a Notice of Proposed
Rulemaking, wherein we proposed to
incorporate by reference into the
Commission’s regulations the WEQ
Version 001 Standards (with certain
exceptions) including NAESB’s new
standards on TLR, PKI, and the new
OASIS implementation guide.8 In
response to the WEQ Version 001
NOPR, ten comments were filed.9
II. Discussion
A. Overview
7. In this Final Rule, the Commission
is amending its regulations under the
FPA to incorporate by reference the
NAESB WEQ Version 001 standards that
the Commission proposed to
incorporate in the WEQ Version 001
Commission’s Final Rule amending the
Commission’s pro forma Open Access Transmission
Tariff, Preventing Undue Discrimination and
Preference in Transmission Service, Order No. 890,
72 FR 12,266 (Mar. 15, 2007), FERC Stats. & Regs.
¶ 31,241 (Feb. 16, 2007), order on reh’g, Order No.
890–A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. &
Regs. ¶ 31,261 (Dec. 28, 2007), reh’g pending, with
the exception of modifications to resales and
transfers to address the Commission’s rules for
resales described in Order No. 890 at P 815 and n.
496.
8 Standards for Business Practices and
Communication Protocols for Public Utilities,
Notice of Proposed Rulemaking, 73 FR 22,849 (Apr.
28, 2008), FERC Stats. & Regs. ¶ 32,633 (2008) (WEQ
Version 001 NOPR).
9 Commenters on the WEQ Version 001 NOPR,
and the abbreviations used in this Final Rule to
identify them are listed in the Appendix.
E:\FR\FM\29JYR1.SGM
29JYR1
43850
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
NOPR.10 While many of the standards
simply revise or update existing
standards, some of the standards
address new business practices. For
example, NAESB adopted new business
practice standards for resales and
transfers to standardize secondary
transmission service on the OASIS.
These standards also standardize how
resales and transfers are conducted off
the OASIS. NAESB also adopted PKI
standards to create greater security for
business transactions taking place over
the Internet. In addition, NAESB has
revised and added standards
establishing business practices related
to the North American Electric
Reliability Corporation (NERC)
reliability standards.11 For example,
NAESB has adopted standards
governing TLR that specify business
practices for cutting transmission
services in the event of a TLR,
consistent with the NERC reliability
standards.
8. In the NOPR, we asked for
comment on differences in definitions
in a few of the NERC’s and NAESB’s
TLR standards. The comments indicate
that NERC and NAESB have formed a
subcommittee to ensure that their
definitions are complementary in the
future. We are very pleased that NERC
and NAESB have taken active steps to
ensure that their respective definitions
are harmonized so as to ensure that
these standards will operate efficiently
in the future.
9. The specific NAESB standards that
we are incorporating by reference in this
Final Rule are:
• Business Practices for Open Access
Same-Time Information Systems
(OASIS), Version 1.4 (WEQ–001,
Version 001, Oct. 31, 2007, with minor
hsrobinson on PROD1PC76 with RULES
10 Consistent
with our proposal in the WEQ
Version 001 NOPR, we are not revising our
regulations to incorporate by reference the
following standards: Standards of Conduct for
Electric Transmission Providers (WEQ–009) and
Contracts Related Standards (WEQ–010). In
addition, consistent with our discussion in the
WEQ Version 001 NOPR, we are not incorporating
by reference the following WEQ–001 standards:
WEQ–001–0.1, 001–0.9 through WEQ–001–0.13,
WEQ–001–1.0 through WEQ–001–1.8 and WEQ–
001–9.7.
11 In Docket No. RM08–7–000, the Commission is
issuing a Final Rule (being issued simultaneously
with this rule) approving six modified Reliability
Standards submitted to the Commission for
approval by the North American Electric Reliability
Corporation (NERC). The rule being issued in
Docket No. RM08–7–000 is also approving NERC’s
proposed interpretation of five specific
Requirements of Commission-approved Reliability
Standards. While the Final Rule being issued in
Docket No. RM08–7–000 addresses modified
Reliability Standards, the Final Rule being issued
in the instant proceeding (i.e., in Docket No. RM05–
5–005), is addressing, among other matters, the
business practice standards related to these
Reliability Standards.
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
corrections applied on Nov. 16, 2007)
including Standards 001–0.2 through
001–0.8, 001–0.14 through 001–0.20,
001–2.0 through 001–9.6.2, 001–9.8
through 001–12.5.2, and 001–A and
001–B; 12
• Business Practices for Open Access
Same-Time Information Systems
(OASIS) Standards & Communication
Protocols, Version 1.4 (WEQ–002,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Standards 002–0.1 through
002–5.10;
• Open Access Same-Time
Information Systems (OASIS) Data
Dictionary, Version 1.4 (WEQ–003,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Standard 003–0;
• Coordinate Interchange (WEQ–004,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and
Standards 004–0.1 through 004–17.2,
and 004–A through 004–D;13
• Area Control Error (ACE) Equation
Special Cases Standards (WEQ–005,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and
Standards 005–0.1 through 005–3.1.3,
and 005–A;
• Manual Time Error Correction
(WEQ–006, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Purpose,
Applicability, and Standards 006–0.1
through 006–12;
• Inadvertent Interchange Payback
(WEQ–007, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Purpose,
Applicability, and Standards 007–0.1
through 007–2, and 007–A;
• Transmission Loading Relief—
Eastern Interconnection (WEQ–008,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and
Standards 008–0.1 through 008–
3.11.2.8, and 008–A through 008–D;14
• Gas/Electric Coordination (WEQ–
011, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16,
12 The WEQ Version 001 package of standards
includes Version 1.4 of the OASIS Standards. The
reference to Version 1.4 is based on the fact that this
is the fourth set of revisions to the Version 1.0
OASIS Standards that the Commission adopted in
Order No. 889. Open Access Same-Time
Information System and Standards of Conduct, 61
FR 21,737 (May 10, 1996), FERC Stats. & Regs.
¶ 31,035 (April 24, 1996). The Version 1.4 reference
appears in Standards WEQ–001, WEQ–002, WEQ–
003, and WEQ–013.
13 See supra note 11.
14 Id.
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
2007) including Standards 011–0.1
through 011–1.6;15
• Public Key Infrastructure (PKI)
(WEQ–012, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Recommended
Standard, Certification, Scope,
Commitment to Open Standards, and
Standards 012–0.1 through 012–1.26.5;
and
• Business Practices for Open Access
Same-Time Information Systems
(OASIS) Implementation Guide, Version
1.4 (WEQ–013, Version 001, Oct. 31,
2007, with minor corrections applied on
Nov. 16, 2007) including Introduction
and Standards 013–0.1 through 013–4.2.
10. The Commission will also require
public utilities to modify their open
access transmission tariffs (OATTs) to
include the WEQ standards that we are
incorporating by reference the next time
they make any unrelated filing to revise
their OATTs.16 As we did in Order No.
676,17 we clarify that, to the extent a
public utility’s OASIS obligations are
administered by an independent system
operator or regional transmission
operator (RTO) and are not covered in
the public utility’s OATT, the public
utility will not need to modify its OATT
to include the OASIS standards.
11. NAESB approved the standards
under its consensus procedures.18
Adoption of consensus standards is
appropriate because the consensus
process helps ensure the reasonableness
of the standards by requiring that the
standards draw support from a broad
spectrum of all segments of the
industry. Moreover, since the industry
itself has to conduct business under
these standards, the Commission’s
regulations should reflect those
15 These standards are identical to the standards
the Commission incorporated by reference into its
regulations at 18 CFR 38.2 in Order No. 698.
16 See Order No. 676, FERC Stats. & Regs.
¶ 31,216 at P 100. If the public utility makes no
unrelated tariff filing by January 31, 2009, it must
make a separate tariff filing incorporating these
standards by that date. They are to use the language
specified later in this order, see infra P 83. We also
note that, as discussed in P 82, once the standards
have become effective, utilities must abide by the
standards even before they make their tariff filings
incorporating the standards into their tariffs.
17 Order No. 676, FERC Stats. & Regs. ¶ 31,216 at
P 20.
18 The WEQ’s procedures ensure that all industry
members can have input into the development of
a business practice standard, whether or not they
are members of NAESB, and each standard it adopts
is supported by a consensus of the five industry
segments: Transmission, generation, marketer/
brokers, distribution/load serving entities, and end
users. Under the WEQ process, for a standard to be
approved, it must receive a super-majority vote of
67 percent of the members of the WEQ’s Executive
Committee with support from at least 40 percent of
each of the five industry segments. For final
approval, 67 percent of the WEQ’s general
membership must ratify the standards.
E:\FR\FM\29JYR1.SGM
29JYR1
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
standards that have the widest possible
support. In section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTT&AA), Congress
affirmatively requires federal agencies to
use technical standards developed by
voluntary consensus standards
organizations, like NAESB, as a means
to carry out policy objectives or
activities.19
B. Issues Raised by Commenters
12. Comments in response to the WEQ
Version 001 NOPR were filed by ten
commenters. While some of these
comments raise concerns about specific
standards, none of the ten comments
filed raise any general objection to the
Commission’s proposal to incorporate
by reference the WEQ standards into the
Commission’s regulations.
1. Cost of Obtaining NAESB Standards
hsrobinson on PROD1PC76 with RULES
a. Comments
13. Lafayette and LEPA are concerned
that the cost of obtaining the NAESB
standards impedes dissemination and
understanding of the applicable
requirements. Lafayette and LEPA claim
that incorporating by reference
standards necessarily purchased at not
insubstantial costs imposes a burden on
small entities, particularly where issues
of interpretation of the standards arise.
b. Commission Determination
14. In Order No. 676, the Commission
explained that standards organizations
are permitted to charge for standards
incorporated by reference into federal
government regulations.20 Under the
Freedom of Information Act, to be
eligible for incorporation by reference,
standards must be reasonably available
to the class of persons affected by their
publication.21 The NAESB standards are
reasonably available to all industry
members. The cost for obtaining the
NAESB standards for non-members is
$100 for the printed standards booklet
and $300 for the CD–ROM of the
standards. NAESB members can obtain
the standards on-line at no cost.
15. The arguments raised here by
Lafayette and LEPA are identical to
those that the Commission considered
and rejected in Order No. 676, which
became a final determination when no
party filed a request for rehearing of
Order No. 676 objecting to the
Commission’s finding on this issue.
None of the arguments raised here by
Lafayette and LEPA lead us to reverse
19 Pub.
L. No. 104–113, 12(d), 110 Stat. 775
(1996), 15 U.S.C. 272 note (1997).
20 Order No. 676, FERC Stats. & Regs. ¶ 31,216 at
P 97.
21 1 CFR 51.7(a)(2)–(4).
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
the determination that the Commission
previously reached on this issue in
Order No. 676, i.e., that the standards
are reasonably available to all industry
members. Furthermore, the Commission
finds that the benefits to both the
industry and the public that have
resulted from the adoption of an
industry-driven approach to standards
development outweigh the cost of the
fees required to obtain the NAESB
standards. If industry participants
remain concerned about the
accessibility of the standards, these
concerns should be addressed through
the NAESB process.
2. Interpretation of NAESB Standards
and OATT Principles
a. Comments
16. LEPA requests that the
Commission clarify that it will interpret
NAESB standards in accordance with
the principles underlying the OATT. In
particular, LEPA requests that the
Commission clarify that it is not, by
incorporating the NAESB standards,
intending to override settled matters of
contract law or the Commission policies
underlying open access transmission
service.
b. Commission Determination
17. The NAESB standards are
incorporated by reference in the
regulations and therefore must be
followed to the same extent as other
regulations and policies of the
Commission. The Commission’s
regulations require compliance with
both the pro forma OATT (18 CFR
35.28) and the NAESB standards that
the Commission has incorporated by
reference (18 CFR 38.2) and that must be
included in the utility’s OATT. If LEPA
is concerned that there are
inconsistencies between specific
NAESB standards and the Commission’s
open access transmission service
regulations, it can seek an interpretation
of the standards from NAESB and can
make appropriate filings with the
Commission.
3. Weighing Costs and Benefits of
Proposed Standards
a. Comments
18. The Midwest ISO is concerned
that the cost of complying with and
implementing some of the WEQ–001
NAESB standards (for example,
standards WEQ–001–9.4.3 22 and WEQ–
22 WEQ–001–9.4.3 provides that ‘‘[I]f the TP
determines that only a portion of the requested
capacity can be accommodated, the TP shall extend
to the TC that portion of the capacity (i.e. , partial
service) that can be accommodated through a
COUNTEROFFER. An example is shown in
Appendix B.’’
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
43851
001–1223 ) will be greater than the
benefits that will result. The Midwest
ISO believes it would be unreasonable
and unduly discriminatory to adopt a
business practice that results in
substantial compliance costs while
producing only negligible benefits for a
particular NAESB segment or a group of
industry participants and states that the
Commission has the authority to
determine what costs are considered
just and reasonable through rulemaking.
Thus, Midwest ISO is not, at this time,
requesting a waiver of specific standards
(such as WEQ–001–9.4.3 and WEQ–
001–12) but is asking that the
Commission provide a waiver option
and that NAESB be directed to review
this entire topic. The Midwest ISO
wants consideration to be given to the
relative costs and benefits of the
standards for entities such as the
Midwest ISO or to allow affected
entities to seek waivers.24
b. Commission Determination
19. NAESB’s stakeholder process for
adopting standards ensures that an
industry consensus is necessary before
any standard is approved. This process
helps to ensure that all approved
standards are beneficial to the industry.
However, as we explained in order No.
676, each public utility that wants a
waiver of any standard we are
incorporating by reference in this Final
Rule may file a request for waiver,
supported by the reasons it believes a
waiver is warranted.25 To the extent that
implementation of certain standards
will result in substantial compliance
costs for small industry participants, we
have in the past considered waivers of
extensions of compliance obligations
where granting such requests would not
noticeably diminish the expected
benefits to the rest of the industry that
would derive from compliance with the
standard. Any such waiver requests
should specifically detail the expected
compliance costs and the reasons why
a waiver would not diminish the overall
expected benefits from compliance with
the standard. Therefore, we will
incorporate these standards in our
regulations, as proposed in the WEQ
Version 001 NOPR.
4. Implementation Date for WEQ–001
a. Comments
20. PJM argues that in order to
implement the Resale and Transfer
functionality required by WEQ–001,
23 WEQ–001–12 is the set of standards for
transfers.
24 Midwest ISO Comments at 5–9.
25 Order No. 676, FERC Stats. & Regs. ¶ 31,216 at
P 79.
E:\FR\FM\29JYR1.SGM
29JYR1
43852
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
PJM will have to develop the internal
business documentation, develop the
software modifications, and test those
modifications. To provide sufficient
time to implement the necessary
scheduling and settlements application
changes, PJM requests an
implementation date of January 31, 2009
or later for WEQ–001. NYISO agrees
with PJM’s comment and requests that
the Commission institute an effective
date of January 31, 2009 or later for
compliance with WEQ–001.
b. Commission Determination
21. In order to allow adequate time to
implement the new Resale and Transfer
standards in WEQ–001, the Commission
will provide for an implementation date
for the WEQ–001 standards of January
31, 2009, as requested.
5. WEQ–001–0.5
22. WEQ–001–0.5 defines identical
service requests as ‘‘those OASIS
transmission service requests that have
exactly the same values’’ for certain
OASIS template Data Elements. The
standard also states, ‘‘Service requests
where any combination of PATH, POR
and/or POD represent exactly the same
commercial transmission elements shall
be considered as ‘having the exact same
value.’ ’’
hsrobinson on PROD1PC76 with RULES
a. Comments
23. Bonneville is concerned that no
other OASIS template Data Elements are
subject to the qualifying language
‘‘having the exact same value’’ included
in the Data Elements of PATH, POR, and
POD. Bonneville seeks clarification that
‘‘identical service requests’’ includes
multiple transmission service requests
that have substantially similar start
times and stop times even if those
elements are not exactly the same.
b. Commission Determination
24. Bonneville’s requested
clarification would change the meaning
of this standard. The standard as
adopted by NAESB requires that
‘‘identical service requests’’ must have
‘‘exactly the same values’’ for start time
and stop time, not ‘‘substantially similar
start times and stop times.’’ Bonneville
has not provided us with sufficient
evidence that the standard needs to be
modified as it suggests. If Bonneville
believes the standard should be
modified, it should, as we stated in
Order No. 676, seek such a change
through NAESB.26
6. WEQ–001–1.5(d)
25. WEQ–001–1.5(d) provides, in part:
In the event that an OASIS user’s grossly
inefficient method of accessing an OASIS
node or obtaining information from the node
seriously degrades the performance of the
node, a Responsible Party may limit a user’s
access to an OASIS node without prior
Commission approval.
a. Comments
26. Bonneville asserts that the
Responsible Party should have the right
to determine whether the inefficient
access of an OASIS node ‘‘seriously
degrades’’ the performance of the node
and recommends that WEQ–001–1.5(d)
be revised.
b. Commission Determination
27. We are not incorporating WEQ–
001–1.5(d) by reference in our
regulations, because the standard is one
of several that restate the Commission’s
regulations, in this case § 37.5(d) of the
Commission’s regulations. As we stated
in Order No. 676, the proper function of
the NAESB business practice standards
is to provide business practice standards
that implement the Commission’s
regulations, not merely restate them.27
7. WEQ–001–11 (Resales)
28. WEQ–001–11 states:
Any Transmission Customer (Reseller)
shall have the right to offer for sale the
scheduling rights associated with the points
of delivery and receipt of a Firm or Non-Firm
Point-To-Point Transmission Service
reservation (i.e. Parent Reservation). Any
Eligible Customer (Assignee) may request to
purchase scheduling rights from the Reseller.
a. Comments
29. Duke argues for the modification
of WEQ–001–11, which establishes a
two-party transaction on OASIS
between the reseller and the assignee for
resale transactions. Duke claims that,
because the transmission provider is
permitted to annul the transaction if the
assignee does not execute the required
service agreement, an inappropriate
burden is placed on the transmission
provider to intervene in a transaction to
which it is not a party. Duke
recommends that this standard be
revised to provide for a three-party
transaction, similar to the one presented
in WEQ 001–12.1.2.
30. In addition, Duke asserts that,
although WEQ–001–11 provides for the
resale of both Firm Point-to-Point and
Non-Firm Point-to-Point scheduling
rights and permits the use of a blanket
service agreement, the form of Service
Agreement for resales that appears in
the pro forma OATT refers only to firm
sales. Duke suggests that this form may
require revision to include non-firm
sales.
26 E.g., Order No. 676, FERC Stats. & Regs.
¶ 31,216 at P 67.
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
27 E.g.,
PO 00000
id. P 72 and 74.
Frm 00008
Fmt 4700
Sfmt 4700
31. Duke also requests guidance, in
the form of examples of an Electric
Quarterly Report (EQR) filing, of
multiple resale transactions under a
blanket agreement. Alternatively, Duke
suggests that the Commission could
rescind its requirement that the
transmission provider report resale
transactions in its EQR filings and
substitute a requirement that summary
reports showing a compilation of OASIS
Resale reservations be posted quarterly
on OASIS.
b. Commission Determination
32. The standard Duke refers to as a
model for revising the standards for
resales to provide for a three-party
transaction 28 specifies that a transfer
must be agreed to by the reseller, the
assignee and the transmission provider.
Transfers are distinct from resales
because transfers result in a full
conveyance of rights and obligations
from the original transmission customer
to the assignee. In the case of both a
resale and transfer, however, the
assignee must first execute a service
agreement with the transmission
provider.29 In both instances, the
transmission provider therefore has an
opportunity to ensure that the assignee
meets the transmission provider’s credit
requirements and is otherwise
committed to abide by the terms and
conditions of the transmission
provider’s OATT governing the
reassignment of transmission service.
33. The Commission considers it
reasonable for the industry to reach
consensus through the NAESB process
to require transaction-specific approval
by the transmission provider for
transfers, but not for resales. In a resale,
the original transmission customer’s
service agreement remains in place and
any default by the assignee does not
relieve the original customer of its
obligation to pay for service.30 That may
not be the case in a transfer 31 and,
therefore, it is reasonable to provide
transmission providers with additional
protection in the form of the right to
review and approve the transfer.
Therefore, we see no need to modify the
standards for resales as suggested by
Duke and will incorporate these
28 WEQ–001–12.1.2 states that ‘‘[t]he Transfer
must be agreed to by the FOTC [Financially
Obligated Transmission Customer], the Assignee,
and the TP. The Conveyance of Transfer rights is
not complete until the TP approves the transfer.
The Transmission Provider shall not unduly
withhold such approval.’’
29 See Order No. 890–A, FERC Stats. & Regs.
¶ 31,261 at P 425.
30 See id.
31 See id. P 425, n.165.
E:\FR\FM\29JYR1.SGM
29JYR1
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
standards by reference as we proposed
in the WEQ Version 001 NOPR.
34. In addition, Duke’s concern
regarding the reference to firm sales in
the title of the Form of Service
Agreement in Attachment A–1 of the
pro forma OATT has been resolved by
the Commission in Order No. 890–A.
There the Commission revised
Attachment A–1 to the pro forma OATT
to clarify that the use of a blanket
service agreement for resales is similar
to the use of a blanket service agreement
for primary capacity.32 The
specification sheet for long-term
reassignments was retained, consistent
with the use of a specification sheet for
long-term sales of primary capacity.33
35. Finally, Duke’s comments on the
transmission provider’s EQR obligations
are beyond the scope of this rulemaking.
The Commission adopted the EQR
reporting requirement for reassigned
capacity in the Order No. 890
proceeding, in which Duke actively
participated, and Duke has failed to
justify here rescission of that reporting
requirement.34 Should Duke or any
other transmission provider have
particular concerns regarding how to
comply with its reporting obligation, it
should bring the matter to the
Commission’s attention for resolution.35
8. WEQ–001–11.2.1
36. WEQ–001–11.2.1 states:
The Assignee shall be obligated directly to
the TP for any usage-based charges and
overuse penalties resulting from its
subsequent use of the Resale.
a. Comments
37. The Midwest ISO is concerned
that WEQ–001–11.2.1 introduces a high
risk of financial exposure to the
transmission provider in the event that
the assignee defaults on payment. The
Midwest ISO believes that the RTO
should not have to bear the financial
risk associated with an assignee
defaulting on usage-based market
charges. Furthermore, the Midwest ISO
is concerned that this standard does not
address the allocation and ownership of
Financial Transmission Rights/Auction
Revenue Rights. To address these
concerns, the Midwest ISO recommends
32 Id.
P 424.
id., n.164.
34 See Order No. 890, FERC Stats. & Regs.
¶ 31,241 at P 817; Order No. 890–A, FERC Stats. &
Regs. ¶ 31,261 at P 423 and n.162; Order No. 890–
B, 123 FERC ¶ 61,299 at P 84 (2008).
35 The Commission recently clarified and
expanded the opportunities for regulated entities
and others to obtain guidance regarding compliance
with the rules and regulations administered by the
Commission. See Obtaining Guidance on
Regulatory Requirements, 123 FERC ¶ 61,157
(2008).
hsrobinson on PROD1PC76 with RULES
33 See
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
that WEQ–001–11 be revised to include
prior validation requirements, similar to
those mandated by the Commission in
Order Nos. 890 and 890–A in the
context of service agreements.
Alternatively, the Midwest ISO requests
clarification and assurance that those
standards are to be interpreted such that
transmission providers will not be held
liable in the event of nonperformance of
a resale obligation.
b. Commission Determination
38. The Commission does not
interpret WEQ–001–11.2.1 to expose a
transmission provider to high financial
risks in an event an assignee defaults on
usage-based charges. At least 24 hours
prior to any resale an Assignee must
execute a service agreement with the
Transmission Provider under WEQ–
001–11.1.7. The Commission has held
that this service agreement is a
requirement meant to commit the
Assignee to abide by the terms and
conditions of the Transmission
Provider’s OATT governing the
reassignment of transmission service.36
The assignee therefore must comply
with all creditworthiness requirements
required for signing a service agreement.
If an Assignee were to default on its
usage-based charges or overuse
penalties, it would still be subject to its
service agreement with the
Transmission Provider, and the
Transmission Provider would have
access to any collateral or other
assurances required under its OATT.
Furthermore, Midwest ISO itself points
out the Commission’s policy in Order
No. 890–A that allows a transmission
provider to take action against the
Assignee as it would any other default
under the pro forma OATT, as well as
transfer to the reseller its legal rights to
enforce the Assignee’s payment
obligations.37 We find that these
procedural protections, coupled with
NAESB standard WEQ–001–11.2.1.1,
which grants the Transmission Provider
the right to nullify the Resale in the
event the service agreement is not
executed, address the concerns of
Midwest ISO regarding its comments on
financial exposure and the request for
prior validation. The Commission will
therefore incorporate this standard into
the Commission’s regulations by
reference as we proposed in the WEQ
Version 001 NOPR.
36 Order No. 890–A, FERC Stats. & Regs. ¶ 31,261
at P 423.
37 Id. n.166.
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
43853
9. WEQ–001–11.3 Through WEQ–001–
11.3.3
39. Standards WEQ–001–11.3 through
WEQ–001–11.3.3 describe the service
attributes and timing of resales. These
standards read as follows:
WEQ–001–11.3:
A Resale shall retain all the same
transmission service attributes, transmission
service priority, and points of delivery and
receipt of the Parent Reservation. For
example, if one hour of a Monthly Firm
reservation is Resold, the Resale reservation
shall be a Monthly Firm Resale reservation
lasting one hour.
WEQ–001–11.3.1:
The TP’s OASIS shall not impose any
restrictions regarding the timing of a Resale,
either submission times or service duration,
except that the start and stop times of the
Resale must be within the bounds of the
Parent Reservation(s) that are designated as
supporting the Resale.
WEQ–001–11.3.2:
The Reseller shall have the right to
aggregate multiple reservations into a single
Resale provided that each reservation being
aggregated is of exactly the same service
attribute, priority, product and point of
receipt/point of delivery.
WEQ–001–11.3.3:
A Resale must be in whole hours,
beginning at the top of the hour, and within
the start and stop time(s) of the Parent
Reservation(s).
a. Comments
40. Southern Companies recommends
that the Commission reject the portions
of WEQ–001–11.3 through WEQ–001–
11.3.3 that seem to require transmission
providers to provide hourly firm service
to assignees. Southern Companies
argues that these provisions are
inconsistent with the provisions of
Order No. 890, the pro forma OATT,
and the Commission’s regulations.
41. First, Southern Companies states
that, in Order No. 890, the Commission
determined that transmission providers
are not required to provide hourly firm
service; it argues, therefore, that
portions of WEQ–001–11.3 through
WEQ–001–11.3.3 are in conflict with
Order No. 890 and therefore should be
rejected. Second, Southern Companies
states that, in the pro forma OATT, the
minimum term of firm point-to-point
transmission service that is required to
be offered is one day.
42. Lastly, Southern Companies
points out that the Commission’s
regulations mandate that a reseller
choosing to use OASIS to offer for resale
transmission capacity must post
relevant information on the same OASIS
as used by the transmission provider
from whom the reseller purchased the
E:\FR\FM\29JYR1.SGM
29JYR1
43854
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
hsrobinson on PROD1PC76 with RULES
transmission capacity and in the same
manner that the transmission provider
posts its own information. Southern
Companies argues that, if a reseller is
allowed to sell hourly firm service when
the transmission provider does not offer
it, then the reseller will be unable to
comply with the Commission’s
regulations regarding the posting of
relevant information because the
transmission provider will not have
display pages, tables, etc., that are
designed for hourly firm service.
43. Duke recommends against the
adoption of WEQ–001–11.3.2 due to the
administrative difficulties that the
aggregation of multiple resale
reservations could create. Duke argues
that the value of this practice to its
customers is nominal relative to the
billing complexities that could be
involved.
b. Commission Determination
44. A consensus of the electric
industry has found that allowing
customers the ability to resell
scheduling rights on less than daily
basis will increase the flexibility of
resales and better serve the needs of
customers. We agree that providing such
enhanced flexibility is desirable.
45. We also find no inconsistency
between these standards and Order No.
890, the pro forma OATT, or the
Commission’s regulations. Southern
Companies appears to be confusing its
obligation to offer transmission service
with the resale of scheduling rights by
customers that have previously reserved
service. When a customer reserves daily
transmission service, it is given the right
to schedule the use of transmission
capacity up to the amount reserved in
every hour of that day (subject to OATT
scheduling deadlines). The customer is
not required to schedule use in each
hour of the day and, in fact, could use
as little as a single hour of the reserved
service.
46. The assumption of a customer’s
scheduling rights by an assignee for one
or more hours does not mean the
transmission provider is offering hourly
service to the assignee. As the
Commission explained in Order No.
890–A, the reassignment of transmission
capacity simply results in the reseller
obtaining the right to schedule the
reserved capacity during the period of
the reassignment, consistent with the
original customer’s reservation.38
Indeed, permitting such resales is
consistent with the Commission’s
determination in Order No. 888 that ‘‘a
public utility’s tariff must explicitly
38 Order No. 890–A, FERC Stats. & Regs. ¶ 31,261
at P 425.
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
permit voluntary reassignment of all or
a part of a holder’s firm transmission
capacity rights to any eligible
customer.’’ 39 We therefore find that
WEQ–001–11.3.1 and WEQ–001–11.3.3
are not inconsistent with Order Nos. 888
and 890 and provide customers with
additional flexibility to obtain capacity
in competition with the transmission
provider.40
10. WEQ–001–11.5.3
47. WEQ–001–11.5.3 states:
All resales must include the price of the
Resale. Price units shall always be $/MW–
Hour reserved.
a. Comments
48. Southern Companies recommends
that the Commission reject WEQ–001–
11.5.3. Southern Companies claims that
forcing resales to be converted to an
hourly price is meaningless, particularly
when transmission providers are not
required to provide hourly firm service.
Furthermore, Southern Companies
claims that this provision is inconsistent
with both the pro forma OATT and the
Commission’s regulations. Reassigned
service is governed by the transmission
provider’s OATT, and Southern
Companies claims that in order to be
consistent with the transmission
provider’s OATT, the price of a resale
should be based upon the increments of
service that are set forth in that OATT
and agreed to by the reseller and
assignee. Furthermore, Southern
Companies cites section 23.1 of the pro
forma OATT, which mandates that
assignees receive the same services and
39 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 21,540 (May 10, 1996), FERC
Stats. & Regs. ¶ 31,036 at 31,696 (1996), order on
reh’g, Order No. 888–A, 62 FR 12,274 (Mar. 14,
1997), FERC Stats. & Regs. ¶ 31,048 (1997), order
on reh’g, Order No. 888–B, 81 FERC ¶ 61,248
(1997), order on reh’g, Order No. 888–C, 82 FERC
¶ 61,046 (1998), aff’d in relevant part sub nom.
Transmission Access Policy Study Group v. FERC,
225 F. 3d 667 (D.C. Cir. 2000) (TAPS v. FERC), aff’d
sub nom. New York v. FERC, 535 U.S. 1 (2002)
(emphasis in original; footnotes omitted).
40 In the event of an hourly assignment of
scheduling rights, the assignee would be subject to
the same scheduling deadlines stated in the
transmission provider’s OATT as applicable to the
reseller, e.g., 10 a.m. of the day prior to
commencement of service if the transmission
provider does not otherwise offer hourly firm
service. Recently, in Order No. 890–B, the
Commission directed transmission providers to
include in their EQRs the rate that would have been
charged under their OATTs had the assignee
purchased primary service from the transmission
provider for the term of the reassignment. See Order
No. 890–B at P 84. If the transmission provider does
not offer hourly firm service, the tariff rate that
would be reported for an assignee receiving hourly
scheduling rights would be the rate for daily
service.
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
priority of service as did the reseller,
and that the assignee is subject to all the
terms and conditions of the tariff.
Lastly, the Commission’s regulations
state that the transmission provider
must post OASIS information for third
parties in the same way that it posts its
own information. Southern Companies
argues that the transmission provider
would be unable to comply with this
regulation if WEQ–001–11.5.3 is
adopted and the transmission provider
does not offer hourly firm service
because the transmission provider
would be required to post prices in
units different from the units in which
it reports its own prices if they are based
on the increments of service provided.
Southern Companies notes that they
raised these concerns throughout the
NAESB process of developing the
standards.
49. Bonneville argues that because
resales may be of different increments of
service, the pricing for the different
increments must be permitted to vary to
reflect these increments. Furthermore,
Bonneville claims that the term ‘‘Price
units’’ in proposed WEQ–001–11.5.3 is
inconsistent with the definition of
‘‘PRICE_UNITS’’ in the OASIS Data
Dictionary, WEQ–003–0. Bonneville
recommends that WEQ–001–11.5.3 read
as follows:
All resales must include the price of the
Resale. PRICE_UNITS shall be specified (e.g.,
$/MWhr, $/MWmonth, etc.).
50. Duke supports the adoption of
WEQ–001–11.5.3. Duke claims that this
requirement both simplifies the
calculation of bills and provides the
Commission with a consistent price
format for the comparison of resale
transactions. If the pricing methodology
prepared by NAESB is not acceptable,
then Duke would support a requirement
that the total resale price be included in
the reservation, with the Transmission
Provider billing the total amount to the
Assignee in one bill and crediting the
total amount to the Reseller in a single
credit, regardless of the duration of the
resale reservation.
b. Commission Determination
51. The Commission in Order No. 890
did not address whether the price for
resales must be stated in a particular
unit of measure, such as $/MW–Hour.
Instead, the Commission left to
negotiating parties the determination of
the price for a particular reassignment of
transmission capacity. It is not
unreasonable for the industry to have
reached consensus that the price of
resales should be stated in $/MW–Hour.
The Commission agrees with Duke that
having a consistent price format for all
E:\FR\FM\29JYR1.SGM
29JYR1
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
resale transactions will make it easier
for the Commission to compare such
transactions to each other. This
requirement also will improve the
transparency and openness of resales of
transmission service, allowing potential
reassignment customers to better
understand the comparative value of
assigned transmission service.
Therefore, we will incorporate this
standard by reference as we proposed in
the WEQ Version 001 NOPR.
52. Neither Southern Companies nor
Bonneville stated a compelling reason
as to why the Commission should not
accept the proposed NAESB standard. It
is the obligation of the parties
negotiating the reassignment to state the
price for the transaction and, pursuant
to this standard, all such prices will be
in a consistent format. We recognize
that this may result in the posting of
Resale prices that are not in the same
unit of measure as the original
reservation under which the Resale is
accomplished. Nothing in Order No. 890
or our regulations prohibits this
approach, which we conclude will
permit customers to better compare
prices for different transactions on the
same transmission system, as well as
transactions across transmission
providers.
hsrobinson on PROD1PC76 with RULES
11. Resales of Conditional Long Term
Firm Reservations
53. WEQ–001–11.1.7 states that ‘‘[t]he
Assignee must execute a service
agreement with the Transmission
Provider that will govern the provision
of reassigned service no later than
twenty-four hours prior to the
scheduling deadline applicable for the
commencement of the reassigned
service. The Transmission Provider may
establish a blanket service agreement to
include Resale transactions.’’
54. WEQ–001–11.7 states that ‘‘[i]n
the event a Transmission Provider
requires that a higher priority,
competing transmission service request
must displace all or a portion of a
confirmed lower priority reservation,
the TP shall have the right to nullify any
Resales that reference the displaced
reservation as their Parent.’’
55. WEQ–001–11.7.1 states that
‘‘[o]nce the conditional window on the
Parent Reservation has closed, Resales
for firm service are not subject to
displacement in accordance with
Standard WEQ–001–11.’’
a. Comments
56. Duke strongly recommends that
the resale of Conditional Long Term
Firm reservations be prohibited so that
transmission providers can effectively
manage these reservations and assure
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
the reliable operation of the
transmission grid. In the event that the
resale of these reservations is permitted,
Duke argues that they should only be
permitted during periods in which the
reservations are unconditionally firm
and such resales should be restricted to
the remaining portion of the biennial
reassessment period, where applicable.
57. Furthermore, Duke argues that
although WEQ–001–11.1.7 permits the
use of blanket service agreements, if the
resale of Conditional Long Term Firm
reservations is allowed, then the use of
a blanket service agreement as specified
in WEQ–001–11.1.7 would not be
permitted under Order No. 890. Duke
states that, pursuant to Order No. 890,
transmission providers and assignees
are to execute a non-conforming Service
Agreement for resales that specifies
either specific system conditions during
which conditional curtailment may
occur or annual number of curtailment
hours during which conditional
curtailment may occur.41
58. Bonneville also recommends that
the Commission adopt a provision at
WEQ–001–11.7 preventing transmission
customers from initiating any resale
during the conditional window because
permitting this practice could allow
resales initiated prematurely to impose
risks on all parties involved in the
transaction and could lead to
inefficiencies in the resale market.
b. Commission Determination
59. As the Commission explained in
Order No. 890–A, and reiterates above,
the reassignment of transmission
capacity results in the reseller obtaining
the right to schedule the reserved
capacity during the period of the
reassignment consistent with the
original customer’s reservation.42 This
applies equally to long-term firm pointto-point service using the conditional
firm option adopted in Order No. 890.
We conclude that the NAESB standards
adequately address resales of
conditional firm transactions. WEQ–
001–11.1 makes clear that confirmation
of a resale ‘‘shall also convey any
outstanding conditions that may exist
on the Parent Reservation (such as
conditional approval pursuant to
section 13.2(ii) of the OATT).’’ WEQ–
001–11.7 and WEQ–001–11.7.1 also
address the transmission provider’s
right to nullify resale transactions when
a higher priority transaction displaces a
lower priority transaction and when
41 Duke cites Order No. 890, FERC Stats. & Regs.
¶ 31,241 at P 960.
42 Order No. 890–A, FERC Stats. & Regs. ¶ 31,261
at P 425.
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
43855
those rights apply to conditional firm
transactions.
60. Since these standards permit
resales of conditional firm transactions
and give the transmission provider the
right to nullify resales of displaced
transactions, we find that the standards
address the concerns of Duke and
Bonneville about the effective
management of conditional firm
transactions. If Duke and Bonneville
believe that these standards are not
workable upon implementation, they
may submit a request to NAESB to
modify these standards based on their
experience with these standards.
61. The Commission finds no reason
to reject the industry’s decision to
permit a transmission provider to
develop a blanket service agreement for
resales of conditional firm service.
Order No. 890 required only that an
original conditional firm service
contract would be nonconforming in
every case, and thus, would be required
to be filed with the Commission for
approval. However, we see no reason to
prohibit the use of a blanket service
agreement for the resale of conditional
firm service, since the resale only
provides the right to schedule service
consistent with the original
transmission customer’s reservation,
which will be on file with the
Commission. We agree with NAESB that
the development of a blanket agreement
for resales is beneficial because it will
help encourage and expedite the
processing of resales.
12. WEQ–004 (Coordinate Interchange)
and WEQ–008 (Transmission Loading
Relief—Eastern Interconnection)
62. WEQ–004 provides the NAESB
business practice standards for
coordinate interchange. These standards
are designed to facilitate the transfer of
electric energy between entities
responsible for balancing load and
generation.
63. WEQ–008 provides the NAESB
business practice standards to
complement the transmission loading
relief procedures needed for curtailment
and reloading of interchange
transactions to relieve overloads on
transmission facilities modeled for the
eastern interconnection.
a. NOPR Requests for Comments
64. In the WEQ Version 001 NOPR,
the Commission raised three questions
concerning reliability-related standards
and sought comments in response to
these questions. First, as to WEQ–004,
the Commission asked whether passive
approval (also referred to as
confirmation by silence) is appropriate
for a business practice intended to
E:\FR\FM\29JYR1.SGM
29JYR1
43856
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
hsrobinson on PROD1PC76 with RULES
complement a reliability standard.43
Second, the Commission also asked a
question about e-tagging.44 Third, as to
WEQ–008, the Commission asked
whether the differences in NAESB and
NERC definitions are significant and
whether a single definition for
reliability-related terms should be
adopted in future standards.45
b. Comments
65. In response to the Commission’s
request for comments regarding whether
confirmation by silence is appropriate
for a business practice intended to
complement a reliability standard,
NERC claims that it does not create a
reliability impact and that the NAESB
Standard does not alter the NERC
Reliability Standards requirements,
which require active response by the
Balancing Authority and Transmission
Service Provider.
66. In response to the Commission’s
request for comments on whether the
differences in the definition used by
NAESB and NERC are significant and
whether a single definition for
reliability-related terms should be
adopted in future standards, NERC
asserts that the definitions do not affect
the industry’s ability to successfully
implement the standards as written and
reports that it is working with NAESB
to develop more in-depth coordination
procedures to ensure that definitions are
consistent between both organizations.
This task has been assigned to a newly
formed Standards Committee Process
Subcommittee.
67. Regarding the Commission’s
request for comment concerning the
differences in the reliability-related
definitions used by NAESB and NERC,
the Midwest ISO states that it will rely
on an effort undertaken by NAESB to
resolve these differences and assumes
that the Commission will direct that
NAESB and NERC use the same
definitions. SPP concurs with and
endorses the comments submitted by
the Midwest ISO on whether the
differences in reliability-related
definitions are significant and whether
single definitions should be adopted in
future standards.
68. The Midwest ISO is concerned
that the inclusion of the Regional
Difference in Appendix D of WEQ–008
Transmission Loading Relief—Eastern
Interconnection results in overlapping
requirements, since the same Regional
Difference appears as Section E in the
NERC TLR Standard IRO–006–04—
43 WEQ
Version 001 NOPR at P 21.
P 20. No comments in response to this
question were received.
45 Id. P 28.
44 Id.
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
Reliability Coordination—Transmission
Loading Relief. NERC retains
responsibility for the Regional
Difference Section of the NERC TLR
Standard (section E) while a field test
permitting PJM, Midwest ISO, and SPP
market flows to use a three percent
threshold is being conducted; however,
when the field test and an evaluation of
the results are completed and a
recommendation on the proper
curtailment threshold that will be
included in the Regional Difference is
approved based on the results, the
Regional Difference will be transferred
to NAESB and removed from the NERC
TLR Standard. In Order No. 693,46 the
Commission stated that it would neither
approve nor remand the waiver of the
regional difference to NERC TLR
Standard IRO–006–03 while the field
test was being conducted, and the
Midwest ISO requests that the
Commission take a similar action
regarding WEQ–008 Appendix D,
neither approving it nor remanding it
while the field test is being conducted.
c. Commission Determination
69. As stated above, NAESB and
NERC have agreed to establish a
subcommittee to ensure that their
definitions are consistent. Since all
industry segments indicate that any
existing differences in terms used by
NAESB and NERC will not affect
reliability or the ability to implement
these standards, we will incorporate
these standards.47
70. While we will adopt the Regional
Differences Section in Appendix D of
the WEQ–008 TLR—Eastern
Interconnection standards, we will not
require it to be implemented until after
the completion of the field tests within
PJM, Midwest ISO, and SPP. Currently,
the Regional Differences Section is
housed in the NERC Reliability
Standards and will remain so until the
completion of the field tests.48 NERC
states that, at that time, Section E of the
NERC TLR Standard will be deleted
from its Reliability Standards and
transferred to the NAESB Business
Practice Standards.
46 Mandatory Reliability Standards for the BulkPower System, 72 FR 31,452 (June 7, 2007), FERC
Stats. & Regs. ¶ 31,242, at P 989 (Mar. 16, 2007).
47 In Docket No. RM08–7–000, the Commission
has deferred action on the proposed NERC TLR
Reliability Standards. However, there is no need for
us to defer action on WEQ–008. Thus, we will
proceed to incorporate WEQ–008 by reference in
this Final Rule. If developments concerning NERC’s
TLR Reliability Standards necessitate revisions to
these standards, we are relying on NAESB, in
coordination with NERC, to adopt any needed
revisions.
48 Pursuant to section E of the NERC TLR
Standard.
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
71. The Commission is mindful of
Midwest ISO’s concern regarding
overlapping requirements, and therefore
will postpone the implementation of
Appendix D until after the field tests are
over and NERC has transferred its
responsibility to NAESB. This transfer
will leave the responsibility for the
Regional Differences Section in only one
party’s hands at a given time, and
alleviate Midwest ISO’s concerns.
72. Regarding the Commission’s
request for comments concerning
passive approval, NERC replied that it
does not believe NAESB’s standard
allowing confirmation by silence creates
a detrimental effect on reliability. In
addition, NAESB’s standard does not
alter or interfere with any of the
reliability requirements for the NERC
Reliability Standard. Therefore, we will
accept the NAESB standard.
13. WEQ–012–1.5 (Public Key
Infrastructure) 49
73. WEQ–012–1.5 provides that the
WEQ authorized certification authority
may impose a ‘‘reasonable fee’’ for the
issuance or renewal of certificates and
other services and may not impose a fee
to revoke certificates, for access to the
subscriber’s certificate, or for access to
an authorized certification authority’s
published certificate revocation list.50
a. Comments
74. The Midwest ISO is concerned
about the provision in WEQ–012–1.5,
stating that the provisions allowing a
‘‘reasonable fee’’ for the issuance or
renewal of certificates and other
services could lead to arbitrary fees and
undue discrimination, because it: does
not define what constitutes a
‘‘reasonable fee,’’ does not establish a
methodology for determining whether
or not a fee is reasonable, and does not
establish what entity has the
responsibility of deciding what
constitutes a reasonable fee.
Furthermore, the Midwest ISO is
concerned that the standard does not
identify how often certificates must be
renewed, which results in ambiguity
regarding how often fees would be
charged. Lastly, the Midwest ISO is
49 As we explained in the WEQ Version 001
NOPR, FERC Stats. & Regs. ¶ 32,633, n.23, the PKI
mechanism involves the use of extremely long
prime numbers, called keys, to provide assurance
that communications are properly protected. Two
keys are involved—a private key, which only the
user has access to, and a public key, which can be
accessed by anyone. The two keys work together so
a message scrambled with the private key can only
be unscrambled with the public key and vice versa.
The more digits in these keys, the more secure the
process. Similar to proving an identity through a
handwritten signature offline, a digital signature is
used to prove an identity online.
50 Defined in WEQ–012–0.7.
E:\FR\FM\29JYR1.SGM
29JYR1
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
concerned that because the standard
allows for imposing ‘‘reasonable fees’’
for other services, additional fees may
be charged. To address these concerns,
the Midwest ISO requests that the
Commission direct NAESB to modify
WEQ–012–1.5 to remove the
ambiguities and recommends that all
fees charged by a NAESB WEQ
Certification Authority be approved by
the Commission.
b. Commission Determination
75. The Commission will incorporate
the standard. In order to implement PKI
encryption companies are required to
use a Certification Authority, and the
company can choose among potential
certifiers who offer electronic
certificates that meet the NAESB PKI
Standards.51 Competition among the
Certification Authorities should ensure
that fees are reasonable. In any event,
the fees charged by a Certification
Authority for PKI are not subject to the
Commission’s jurisdiction, because they
are not fees for the transmission or sale
at wholesale of electric energy in
interstate commerce.
14. Requests for Modifications to
NAESB Standards
hsrobinson on PROD1PC76 with RULES
a. Comments
76. In their comments, Bonneville 52
and Duke 53 request modifications to
numerous NAESB standards, and
suggests the addition of two new
standards. Bonneville’s comments do
not object to the incorporation by
reference of these standards, nor allege
that the standards are inconsistent with
Commission policy, but in main part
offer editorial suggestions that in
Bonneville’s view will make the
standards clearer or clarify how they
will play out in specific situations. For
example, Bonneville’s Attachment A
suggests a number of revisions that
attempt to make certain standards
51 Certification Authorities are no different than
other entities which public utilities must hire to
comply with Commission or other government
regulations. For instance, the Commission requires
companies to produce audited financial statements,
and companies therefore must pay fees to produce
such statements. Midwest ISO’s request for the
Commission to regulate Certification Authority fees
is akin to asking the Commission to approve the
fees certified public accountants charge for
preparing financial statements.
52 Specifically, Bonneville suggests revisions to
WEQ–001–8.3, WEQ–013–2.1, WEQ–013–2.2,
WEQ–013–2.4.2, WEQ–013–2.6.4, WEQ–013–
2.6.5.1, WEQ–013–2.6.5.2, WEQ–013–2.6.6, WEQ–
013–2.6.7.1, and WEQ–013–2.6.7.2. Bonneville also
suggests the addition of new standards WEQ–001–
11.5.4 and WEQ–001–12.5.3.
53 Duke’s suggested revisions relate only to WEQ–
001–12. Duke suggests substituting the term
‘‘assignment’’ for ‘‘transfer,’’ and adding a restricted
value and definition for the term ‘‘transfer’’ (or its
replacement).
VerDate Aug<31>2005
16:20 Jul 28, 2008
Jkt 214001
clearer by adding qualifications already
implicit in NAESB’s adopted
standards.54
b. Commission Determination
77. The Commission will not modify
the various NAESB standards as
requested by Bonneville and Duke. The
task before the Commission in this Final
Rule is to review the standards recently
adopted by NAESB, and to decide
whether to incorporate those standards
by reference into the Commission’s
regulations as mandatory standards that
must be complied with by public
utilities. Our task is not to rewrite
NAESB’s standards to make editorial
revisions and enhancements, even if
commenters correctly observe and point
out some improvement that could be
added to the standards. If the
Commission finds NAESB’s standards
inadequate or finds that they conflict
with the Commission’s policies or
regulations, we will decline to
incorporate that standard by reference
into our regulations and on occasion we
may provide NAESB with guidance as
to revisions NAESB might make to that
standard to make it acceptable to the
Commission.
78. While it is appropriate for
commenters who object to the
Commission’s incorporation by
reference of a standard to raise those
arguments with the Commission,
Bonneville should direct any proposed
modifications or additions to NAESB’s
standards to NAESB for consideration.
Following this procedure, Bonneville’s
proposed changes can receive proper
consideration from all industry
segments before they are acted on.55
79. Duke also suggests that WEQ–
001–12 be modified so as to revise the
procedure established in Order No. 890–
A for the pricing of reassigned
transmission. But, as Duke concedes,
WEQ–001–12 does not address the issue
of pricing reassigned transmission. Duke
is attempting to use the adoption of
WEQ–001–12 as a pretext to collaterally
attack an issue already determined by
Order No. 890–A.
43857
Control Error (ACE) Equation Special Cases,
WEQ–006 Manual Time Error, WEQ–007
Inadvertent Interchange Payback, and WEQ–
008 Transmission Loading Relief—Eastern
Interconnection) are required to be
implemented by the later of the effective date
of the Final Rule in RM08–7-000 or the
effective date of this Final Rule;
(2) WEQ–001 OASIS Standards are
required to be implemented by January 31,
2009; and
(3) Appendix D to the WEQ–008
Transmission Loading Relief—Eastern
Interconnection standards need not be
implemented until NERC completes the field
testing.
(1) The reliability related standards (WEQ–
004 Coordinate Interchange, WEQ–005 Area
81. To reduce the burden on filers, as
we did in Order No. 676, although
public utilities must fully comply with
the requirements of this Final Rule in
accordance with the implementation
schedule above, we are not requiring
public utilities immediately to file
revised OATTs incorporating these
changes.
82. The Commission is also requiring,
consistent with our regulation at 18 CFR
35.28(c)(vi), each electric utility to
revise its OATT to include the Version
001 WEQ standards we are
incorporating by reference herein. For
standards that do not require
implementing tariff provisions, the
Commission will allow the utility to
incorporate the WEQ standard by
reference in its OATT. We are not,
however, requiring a separate tariff
filing to accomplish this change.
Consistent with our prior practice, we
will allow public utilities the option of
including these changes as part of an
unrelated tariff filing.56 However,
consistent with our prior practice, as of
the implementation dates above, public
utilities must abide by these standards
even before they update their tariffs to
incorporate these changes.
83. If adoption of these standards does
not require any changes or revisions to
existing OATT provisions, public
utilities may comply with this rule by
adding a provision to their OATTs that
incorporates the standards adopted in
this rule by reference, including the
standard number and Version 001 to
identify the standard. To incorporate
these standards into their OATTs,
public utilities must use the following
language in their OATTs:
• Business Practices for Open Access
Same-Time Information Systems
(OASIS), Version 1.4 (WEQ–001,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
54 See, e.g., WEQ–013–2.6.6 and WEQ–013–
2.6.7.1.
55 As to Bonneville’s request that we clarify the
reference to ‘‘deferral requests posted by the
Primary Provider,’’ see Bonneville Comments at 7,
this matter may also be brought up with NAESB.
56 See Order No. 676, FERC Stats. & Regs.
¶ 31,216 at P 100. If the public utility makes no
unrelated tariff filing by January 31, 2009, it must
make a separate tariff filing incorporating these
standards by that date. They are to use the language
specified later in this order, see infra P 83.
III. Implementation Dates and
Procedures
80. The standards incorporated by
reference in this Final Rule must be
implemented by October 1, 2008, with
the following exceptions:
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
E:\FR\FM\29JYR1.SGM
29JYR1
43858
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
including Standards 001–0.2 through
001–0.8, 001–0.14 through 001–0.20,
001–2.0 through 001–9.6.2, 001–9.8
through 001–12.5.2, and 001–A and
001–B;
• Business Practices for Open Access
Same-Time Information Systems
(OASIS) Standards & Communication
Protocols, Version 1.4 (WEQ–002,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Standards 002–0.1 through
002–5.10;
• Open Access Same-Time
Information Systems (OASIS) Data
Dictionary, Version 1.4 (WEQ–003,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Standard 003–0;
• Coordinate Interchange (WEQ–004,
Version 001, October 31, 2007, with
minor corrections applied on Nov. 16,
2007) including Purpose, Applicability,
and Standards 004–0.1 through 004–
17.2, and 004–A through 004–D;
• Area Control Error (ACE) Equation
Special Cases Standards (WEQ–005,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and
Standards 005–0.1 through 005–3.1.3,
and 005–A;
• Manual Time Error Correction
(WEQ–006, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Purpose,
Applicability, and Standards 006–0.1
through 006–12;
• Inadvertent Interchange Payback
(WEQ–007, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Purpose,
Applicability, and Standards 007–0.1
through 007–2, and 007–A;
• Transmission Loading Relief—
Eastern Interconnection (WEQ–008,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and
Standards 008–0.1 through 008–
3.11.2.8, and 008–A through 008–D;
• Gas/Electric Coordination (WEQ–
011, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16,
2007) including Standards 011–0.1
through 011–1.6;
• Public Key Infrastructure (PKI)
(WEQ–012, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007) including Recommended
Standard, Certification, Scope,
Commitment to Open Standards, and
Standards 012–0.1 through 012–1.26.5;
and
• Business Practices for Open Access
Same-Time Information Systems
(OASIS) Implementation Guide, Version
1.4 (WEQ–013, Version 001, Oct. 31,
2007, with minor corrections applied on
Nov. 16, 2007) including Introduction
and Standards 013–0.1 through 013–4.2.
84. If a public utility requests waiver
of a standard, it will not be required to
comply with the standard until the
Commission acts on its waiver request.
Therefore, if a public utility has
obtained a waiver or has a pending
request for a waiver, its proposed
revision to its OATT should not include
the standard number associated with the
standard for which it has obtained or
seeks a waiver. Instead, the public
utility’s OATT should specify those
standards for which the public utility
has obtained a waiver or has pending a
request for waiver. Once a waiver
request is denied, the public utility will
be required to include in its OATT the
standard(s) for which waiver was
denied.
Number of
respondents
Data collection
IV. Notice of Use of Voluntary
Consensus Standards
85. Office of Management and Budget
Circular A–119 (section 11) (February
10, 1998) provides that when a federal
agency issues or revises a regulation
containing a standard, the agency
should publish a statement in the Final
Rule stating whether the adopted
standard is a voluntary consensus
standard or a government-unique
standard. In this rulemaking, the
Commission is incorporating by
reference voluntary consensus standards
developed by the WEQ.
V. Information Collection Statement
86. OMB’s regulations in 5 CFR
1320.11 (2005) require that it approve
certain reporting and recordkeeping
requirements (collections of
information) imposed by an agency.
Upon approval of a collection of
information, OMB assigns an OMB
control number and an expiration date.
Respondents subject to the filing
requirements of this Final Rule will not
be penalized for failing to respond to
this collection of information unless the
collection of information displays a
valid OMB control number.
87. This Final Rule will affect the
following existing data collections:
Standards for Business Practices and
Communication Protocols for Public
Utilities (FERC–717) and Electric Rate
Schedule Filings (FERC–516).
88. The following burden estimate is
based on the projected costs for the
industry to implement revisions to the
WEQ Standards currently incorporated
by reference into the Commission’s
regulations at 18 CFR 38.2 and to
implement the new standards adopted
by NAESB that we are incorporating by
reference in this Final Rule.
Number of
responses per
respondent
Hours per
response
Total number
of hours
FERC–516 .......................................................................................................
FERC–717 .......................................................................................................
176
176
1
1
6
10
1,056
1,760
Totals ........................................................................................................
........................
........................
........................
2,816
Total Annual Hours for Collection:
(Reporting and Recordkeeping, (if
appropriate)) = 2816 hours.
Information Collection Costs: The
Commission seeks comments on the
costs to comply with these
requirements. It has projected the
average annualized cost for all
respondents to be the following: 57
hsrobinson on PROD1PC76 with RULES
FERC–516
FERC–717
Annualized Capital/Startup Costs ............................................................................................................................
Annualized Costs (Operations & Maintenance) ......................................................................................................
$337,920
N/A
$563,200
........................
Total Annualized Costs ....................................................................................................................................
337,920
563,200
57 The total annualized costs for the information
collection is $901,120. This number is reached by
multiplying the total hours to prepare responses
VerDate Aug<31>2005
16:20 Jul 28, 2008
Jkt 214001
(2816) by an hourly wage estimate of $320 (a
composite estimate that includes legal, technical
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
and support staff rates, $200+$95+$25=$320), 2816
hours × $320/hour= $901,120.
E:\FR\FM\29JYR1.SGM
29JYR1
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
43859
hsrobinson on PROD1PC76 with RULES
89. The Commission sought
comments on the burden of complying
with the requirements imposed by these
requirements. No comments were filed
addressing the reporting burden.58
90. The Commission’s regulations
adopted in this rule are necessary to
establish a more efficient and integrated
wholesale electric power grid. Requiring
such information ensures both a
common means of communication and
common business practices that provide
entities engaged in the wholesale
transmission of electric power with
timely information and uniform
business procedures across multiple
transmission providers. These
requirements conform to the
Commission’s goal for efficient
information collection, communication,
and management within the electric
power industry. The Commission has
assured itself, by means of its internal
review, that there is specific, objective
support for the burden estimates
associated with the information
requirements.
91. OMB regulations 59 require OMB
to approve certain information
collection requirements imposed by
agency rule. The Commission is
submitting notification of this proposed
rule to OMB. These information
collections are mandatory requirements.
Title: Standards for Business Practices
and Communication Protocols for
Public Utilities (formerly Open Access
Same Time Information System) (FERC–
717); Electric Rate Schedule Filings
(FERC–516).
Action: Proposed collection.
OMB Control No.: 1902–0096 (FERC–
516); 1902–0173 (FERC–717).
Respondents: Business or other for
profit, (Public Utilities—Not applicable
to small businesses).
Frequency of Responses: One-time
implementation (business procedures,
capital/start-up).
Necessity of the Information: This
rule, will upgrade the Commission’s
current business practice and
communication standards. Specifically,
these standards include several
modifications to the existing business
practice standards as well as creating
new standards to provide additional
functionality for OASIS transactions,
transmission loading relief and public
key infrastructure. The standards will
assist in providing greater security for
business transactions over the Internet,
identify the business practices to be
used to relieve potential or actual
loading on a constrained facility and
facilitate the transfer of electric energy
between entities responsible for
balancing load and generation. These
practices will ensure that potential
customers of open access transmission
service receive access to information
that will enable them to obtain
transmission service on a nondiscriminatory basis and will assist the
Commission in maintaining a safe and
reliable infrastructure and also will
assure the reliability of the interstate
transmission grid. The implementation
of these standards and regulations is
necessary to increase the efficiency of
the wholesale electric power grid.
92. The information collection
requirements of this Final Rule are
based on the transition from
transactions being made under the
Commission’s existing business practice
standards to conducting such
transactions under the proposed
revisions to these standards and to
account for the burden associated with
the new standard(s) being proposed here
(i.e., WEQ–008 and WEQ–012).
93. Internal Review: The Commission
has reviewed the revised business
practice standards and has made a
determination that the revisions
adopted in this Final Rule are necessary
to maintain consistency between the
business practice standards and
reliability standards on this subject. The
Commission has assured itself, by
means of its internal review, that there
is specific, objective support for the
burden estimate associated with the
information requirements.
94. Interested persons may obtain
information on the reporting
requirements by contacting the
following: Federal Energy Regulatory
Commission, Attn: Michael Miller,
Office of the Executive Director, 888
First Street, NE., Washington, DC 20426,
Tel: (202) 502–8415/Fax: (202) 273–
0873, E-mail: michael.miller@ferc.gov.
environment.60 The Commission has
categorically excluded certain actions
from these requirements as not having a
significant effect on the human
environment.61
96. The actions required by this Final
Rule fall within categorical exclusions
in the Commission’s regulations for
rules that are clarifying, corrective, or
procedural, for information gathering,
analysis, and dissemination, and for
sales, exchange, and transportation of
electric power that requires no
construction of facilities.62 Therefore,
an environmental assessment is
unnecessary and has not been prepared
in this Final Rule.
VI. Environmental Analysis
58 We note, however, that two comments argued
that it would be too costly for small entities to
obtain copies of the NAESB Standards from
NAESB. We addressed these comments in the
preamble of this Final Rule.
59 5 CFR 1320.11.
95. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
60 Order No. 486, Regulations Implementing the
National Environmental Policy Act of 1969, 52 FR
47,897 (Dec. 17, 1987), FERC Stats. & Regs.,
Regulations Preambles 1986–1990 ¶ 30,783 (1987).
61 18 CFR 380.4.
62 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5),
380.4(a)(27).
63 5 U.S.C. 601–612.
VerDate Aug<31>2005
16:20 Jul 28, 2008
Jkt 214001
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
VII. Regulatory Flexibility Act
Certification
97. The Regulatory Flexibility Act of
1980 (RFA) 63 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The regulations adopted here
impose requirements only on public
utilities, which are not small businesses,
and, these requirements are, in fact,
designed to benefit all customers,
including small businesses.
98. The Commission has followed the
provisions of both the RFA and the
Paperwork Reduction Act on potential
impact on small business and other
small entities. Specifically, the RFA
directs agencies to consider four
regulatory alternatives to be considered
in a rulemaking to lessen the impact on
small entities: tiering or establishment
of different compliance or reporting
requirements for small entities,
classification, consolidation,
clarification or simplification of
compliance and reporting requirements,
performance rather than design
standards, and exemptions. As the
Commission originally stated in Order
No. 889, the OASIS regulations now
known as Standards for Business
Practices and Communication Protocols
for Public Utilities, apply only to public
utilities that own, operate, or control
transmission facilities subject to the
Commission’s jurisdiction and should a
E:\FR\FM\29JYR1.SGM
29JYR1
43860
Federal Register / Vol. 73, No. 146 / Tuesday, July 29, 2008 / Rules and Regulations
small entity be subject to the
Commission’s jurisdiction, it may file
for waiver of the requirements.64 This is
consistent with the exemption
provisions of the RFA. Accordingly,
pursuant to section 605(b) of the RFA,65
the Commission hereby certifies that the
regulations proposed herein will not
have a significant adverse impact on a
substantial number of small entities.
VIII. Document Availability
99. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the Internet through
FERC’s Home Page (https://www.ferc.gov)
and in FERC’s Public Reference Room
during normal business hours (8:30 a.m.
to 5 p.m. Eastern time) at 888 First
Street, NE., Room 2A, Washington, DC
20426.
100. From FERC’s Home Page on the
Internet, this information is available in
the eLibrary. The full text of this
document is available in the eLibrary
both in PDF and Microsoft Word format
for viewing, printing, and/or
downloading. To access this document
in eLibrary, type the docket number
excluding the last three digits of this
document in the docket number field.66
101. User assistance is available for
eLibrary and the FERC’s Web site during
our normal business hours. For
assistance contact FERC Online Support
at FERCOnlineSupport@ferc.gov or tollfree at (866) 208–3676, or for TTY,
contact (202) 502–8659.
IX. Effective Date and Congressional
Notification
102. This Final Rule will become
effective August 28, 2008. The
Commission has determined with the
concurrence of the Administrator of the
Office of Information and Regulatory
Affairs, Office of Management and
Budget, that this rule is not a major rule
within the meaning of section 251 of the
Small Business Regulatory Enforcement
Fairness Act of 1996.67
List of Subjects in 18 CFR part 38
hsrobinson on PROD1PC76 with RULES
Electric utilities, Reporting and
recordkeeping requirements,
Incorporation by reference.
64 We also have provided for requests of waiver
in instances where compliance would be very
burdensome and a waiver would not diminish the
overall benefits of the standards. See supra P 19.
65 5 U.S.C. 605(b).
66 NAESB’s Dec. 26, 2007 submittal is also
available for viewing in eLibrary. The link to this
file is as follows: https://elibrary.ferc.gov:0/idmws/
doc_info.asp?document_id=13566661.
67 See 5 U.S.C. 804(2).
VerDate Aug<31>2005
14:28 Jul 28, 2008
Jkt 214001
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
In consideration of the foregoing, the
Commission amends Chapter I, Title 18,
part 38 of the Code of Federal
Regulations, as follows:
I
PART 38—BUSINESS PRACTICE
STANDARDS AND COMMUNICATION
PROTOCOLS FOR PUBLIC UTILITIES
(10) Public Key Infrastructure (PKI)
(WEQ–012, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007); and
(11) Business Practices for Open
Access Same-Time Information Systems
(OASIS) Implementation Guide, Version
1.4 (WEQ–013, Version 001, Oct. 31,
2007, with minor corrections applied on
Nov. 16, 2007).
*
*
*
*
*
I
1. The authority citation for part 38
continues to read as follows:
Note: The following appendix will not be
published in the Code of Federal Regulations.
Authority: 16 U.S.C. 791–825r, 2601–2645;
31 U.S.C. 9701; 42 U.S.C. 7101–7352.
List of Entities Filing Comments on
NOPR in Docket No. RM05–5-005, and
the Abbreviations Used To Identify
Them
Bonneville Power Administration
(Bonneville).
Duke Energy Corporation (Duke).
Lafayette Utilities System (Lafayette).
Louisiana Energy and Power
Authority (LEPA).
Midwest Independent Transmission
System Operator, Inc. (Midwest ISO).
New York Independent System
Operator, Inc. (NYISO).
North American Electric Reliability
Corporation (NERC).
PJM Interconnection, L.L.C. (PJM).
Southern Company Services, Inc.
(Southern Companies).
Southwest Power Pool, Inc. (SPP).
2. In § 38.2, paragraphs (a)(1) through
(8) are revised, and paragraphs (a)(9)
through (11) are added to read as
follows:
I
§ 38.2 Incorporation by reference of North
American Energy Standards Board
Wholesale Electric Quadrant standards.
(a) * * *
(1) Business Practices for Open
Access Same-Time Information Systems
(OASIS), Version 1.4 (WEQ–001,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007)
with the exception of Standards 001–
0.1, 001–0.9 through 001–0.13, 001–1.0
through 001–1.8, and 001–9.7;
(2) Business Practices for Open
Access Same-Time Information Systems
(OASIS) Standards & Communication
Protocols, Version 1.4 (WEQ–002,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007);
(3) Open Access Same-Time
Information Systems (OASIS) Data
Dictionary, Version 1.4 (WEQ–003,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007);
(4) Coordinate Interchange (WEQ–
004, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16,
2007);
(5) Area Control Error (ACE) Equation
Special Cases (WEQ–005, Version 001,
Oct. 31, 2007, with minor corrections
applied on Nov. 16, 2007);
(6) Manual Time Error Correction
(WEQ–006, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007);
(7) Inadvertent Interchange Payback
(WEQ–007, Version 001, Oct. 31, 2007,
with minor corrections applied on Nov.
16, 2007);
(8) Transmission Loading Relief—
Eastern Interconnection (WEQ–008,
Version 001, Oct. 31, 2007, with minor
corrections applied on Nov. 16, 2007);
(9) Gas/Electric Coordination (WEQ–
011, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16,
2007);
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
[FR Doc. E8–17194 Filed 7–28–08; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9418]
RIN 1545–BE65
Converting an IRA Annuity to a Roth
IRA
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:
SUMMARY: This document contains final
regulations under section 408A of the
Internal Revenue Code (Code). These
final regulations provide guidance
concerning the tax consequences of
converting a non-Roth IRA annuity to a
Roth IRA. These final regulations affect
individuals establishing Roth IRAs,
beneficiaries under Roth IRAs, and
trustees, custodians and issuers of Roth
IRAs.
DATES: Effective date: These final
regulations are effective July 29, 2008.
Applicability date: These regulations
are applicable to any Roth IRA
E:\FR\FM\29JYR1.SGM
29JYR1
]]>Agencies
[Federal Register Volume 73, Number 146 (Tuesday, July 29, 2008)]
[Rules and Regulations]
[Pages 43848-43860]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17194]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 38
[Docket No. RM05-5-005; Order No. 676-C]
Standards for Business Practices and Communication Protocols for
Public Utilities
Issued July 21, 2008.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission (Commission) is
revising its regulations to incorporate by reference the latest version
(Version 001) of certain standards adopted by the Wholesale Electric
Quadrant (WEQ) of the North American Energy Standards Board (NAESB).
NAESB's standards revise its Open Access Same-Time Information Systems
(OASIS) business practice standards, revise four business practice
standards relating to reliability issues, add new standards on
transmission loading relief for the Eastern Interconnection, add new
standards for public key infrastructure, and add a new OASIS
implementation guide. Incorporating these revised standards will
provide customers with information that will enable them to obtain
transmission service on a non-discriminatory basis and will assist the
Commission in supporting needed infrastructure and the reliability of
the interstate transmission grid.
DATES: Effective Date: This Final Rule will become effective on August
28, 2008. Dates for implementation of the standards are provided in the
Final Rule. The Director of the Federal Register has approved the
Incorporation by reference of the standards addressed in the Final Rule
effective August 28, 2008.
FOR FURTHER INFORMATION CONTACT: Ryan M. Irwin (technical issues),
Office of Energy Market Regulation, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6454.
Kay Morice (technical issues), Office of Energy Market Regulation,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-6507.
Gary D. Cohen (legal issues), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8321.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G.
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.
Table of Contents
------------------------------------------------------------------------
Paragraph
numbers
------------------------------------------------------------------------
I. Background.............................................. 2
II. Discussion............................................. 7
A. Overview............................................ 7
B. Issues Raised by Commenters......................... 12
1. Cost of Obtaining NAESB Standards............... 13
2. Interpretation of NAESB Standards and OATT 16
Principles........................................
3. Weighing Costs and Benefits of Proposed 18
Standards.........................................
4. Implementation Date for WEQ-001................. 20
5. WEQ-001-0.5..................................... 22
[[Page 43849]]
6. WEQ-001-1.5(d).................................. 25
7. WEQ-001-11 (Resales)............................ 28
8. WEQ-001-11.2.1.................................. 36
9. WEQ-001-11.3 through WEQ-001-11.3.3............. 39
10. WEQ-001-11.5.3................................. 47
11. Resales of Conditional Long Term Firm 53
Reservations......................................
12. WEQ-004 (Coordinate Interchange) and WEQ-008 62
(Transmission Loading Relief--Eastern
Interconnection)..................................
13. WEQ-012-1.5 (Public Key Infrastructure)........ 73
14. Requests for Modifications to NAESB Standards.. 76
III. Implementation Dates and Procedures................... 80
IV. Notice of Use of Voluntary Consensus Standards......... 85
V. Information Collection Statement........................ 86
VI. Environmental Analysis................................. 95
VII. Regulatory Flexibility Act Certification.............. 97
VIII. Document Availability................................ 99
IX. Effective Date and Congressional Notification.......... 102
------------------------------------------------------------------------
1. The Federal Energy Regulatory Commission (Commission) is
amending its regulations under the Federal Power Act (FPA) \1\ to
incorporate by reference the latest version (Version 001) of certain
business practice standards concerning the Open Access Same-Time
Information Systems (OASIS) and gas/electric coordination and four
business practice standards relating to reliability issues adopted by
the Wholesale Electric Quadrant (WEQ) of the North American Energy
Standards Board (NAESB). These revised standards update earlier
versions of these standards that the Commission previously incorporated
by reference into its regulations at 18 CFR 38.2 in Order Nos. 676,
676-B, and 698.\2\ In addition, in this Final Rule, the Commission is
amending its regulations under the FPA to incorporate by reference
NAESB's new standards on transmission loading relief (TLR) for the
Eastern Interconnection and on public key infrastructure (PKI) and to
add a new OASIS implementation guide.
---------------------------------------------------------------------------
\1\ 16 U.S.C. 791a, et seq.
\2\ Standards for Business Practices and Communication Protocols
for Public Utilities, Order No. 676, 71 FR 26,199 (May 4, 2006),
FERC Stats. & Regs., ] 31,216 (Apr. 25, 2006), reh'g denied, Order
No. 676-A, 116 FERC ] 61,255 (2006), Order No. 676-B, 72 FR 21,095
(Apr. 30, 2007), FERC Stats. & Regs. ] 31,246 (Apr. 19, 2007),
Standards for Business Practices for Interstate Natural Gas
Pipelines; Standards for Business Practices for Public Utilities,
Order No. 698, 72 FR 38757 (July 16, 2007), FERC Stats. & Regs., ]
31,251 (June 25, 2007), order on clarification and reh'g, Order No.
698-A, 121 FERC ] 61,264 (2007).
---------------------------------------------------------------------------
I. Background
2. NAESB is a non-profit standards development organization
established in January 2002 that serves as an industry forum for the
development of business practice standards that promote a seamless
marketplace for wholesale and retail natural gas and electricity.\3\
Since 1995, NAESB and its predecessor, the Gas Industry Standards
Board, have been accredited members of the American National Standards
Institute (ANSI), complying with ANSI's requirements that its standards
reflect a consensus of the affected industries.\4\
---------------------------------------------------------------------------
\3\ See Standards for Business Practices and Communication
Protocols for Public Utilities, Notice of Proposed Rulemaking, 72 FR
8318 (Feb. 26, 2007), FERC Stats. & Regs. ] 32,612, at P 3 (Feb. 20,
2007).
\4\ Id.
---------------------------------------------------------------------------
3. NAESB's standards include business practices that streamline the
transactional processes of the natural gas and electric industries, as
well as communication protocols and related standards designed to
improve the efficiency of communication within each industry. NAESB
supports all four quadrants of the gas and electric industries--
wholesale gas, wholesale electric, retail gas, and retail electric. All
participants in the gas and electric industries are eligible to join
NAESB and participate in standards development.\5\
---------------------------------------------------------------------------
\5\ Id. P 4.
---------------------------------------------------------------------------
4. NAESB's procedures are designed to ensure that all industry
members can have input into the development of a standard, whether or
not they are members of NAESB, and each standard NAESB adopts is
supported by a consensus of the relevant industry segments.\6\
---------------------------------------------------------------------------
\6\ Id. P 5.
---------------------------------------------------------------------------
5. On December 26, 2007, NAESB submitted a report detailing its new
and revised Version 001 business practice standards dated October 31,
2007 with minor corrections applied on November 16, 2007.\7\ These
standards update the standards that we incorporated by reference into
our regulations in Order Nos. 676, 676-B and 698, add a new OASIS
implementation guide, and add new standards to: (1) Provide additional
functionality for OASIS transactions; (2) provide business practice
standards for TLR in the Eastern Interconnection; and (3) provide
business practice standards governing PKI.
---------------------------------------------------------------------------
\7\ The Version 001 standards do not include modifications of
existing standards or new standards to support Order No. 890, the
Commission's Final Rule amending the Commission's pro forma Open
Access Transmission Tariff, Preventing Undue Discrimination and
Preference in Transmission Service, Order No. 890, 72 FR 12,266
(Mar. 15, 2007), FERC Stats. & Regs. ] 31,241 (Feb. 16, 2007), order
on reh'g, Order No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. &
Regs. ] 31,261 (Dec. 28, 2007), reh'g pending, with the exception of
modifications to resales and transfers to address the Commission's
rules for resales described in Order No. 890 at P 815 and n. 496.
---------------------------------------------------------------------------
6. On April 21, 2008, the Commission issued a Notice of Proposed
Rulemaking, wherein we proposed to incorporate by reference into the
Commission's regulations the WEQ Version 001 Standards (with certain
exceptions) including NAESB's new standards on TLR, PKI, and the new
OASIS implementation guide.\8\ In response to the WEQ Version 001 NOPR,
ten comments were filed.\9\
---------------------------------------------------------------------------
\8\ Standards for Business Practices and Communication Protocols
for Public Utilities, Notice of Proposed Rulemaking, 73 FR 22,849
(Apr. 28, 2008), FERC Stats. & Regs. ] 32,633 (2008) (WEQ Version
001 NOPR).
\9\ Commenters on the WEQ Version 001 NOPR, and the
abbreviations used in this Final Rule to identify them are listed in
the Appendix.
---------------------------------------------------------------------------
II. Discussion
A. Overview
7. In this Final Rule, the Commission is amending its regulations
under the FPA to incorporate by reference the NAESB WEQ Version 001
standards that the Commission proposed to incorporate in the WEQ
Version 001
[[Page 43850]]
NOPR.\10\ While many of the standards simply revise or update existing
standards, some of the standards address new business practices. For
example, NAESB adopted new business practice standards for resales and
transfers to standardize secondary transmission service on the OASIS.
These standards also standardize how resales and transfers are
conducted off the OASIS. NAESB also adopted PKI standards to create
greater security for business transactions taking place over the
Internet. In addition, NAESB has revised and added standards
establishing business practices related to the North American Electric
Reliability Corporation (NERC) reliability standards.\11\ For example,
NAESB has adopted standards governing TLR that specify business
practices for cutting transmission services in the event of a TLR,
consistent with the NERC reliability standards.
---------------------------------------------------------------------------
\10\ Consistent with our proposal in the WEQ Version 001 NOPR,
we are not revising our regulations to incorporate by reference the
following standards: Standards of Conduct for Electric Transmission
Providers (WEQ-009) and Contracts Related Standards (WEQ-010). In
addition, consistent with our discussion in the WEQ Version 001
NOPR, we are not incorporating by reference the following WEQ-001
standards: WEQ-001-0.1, 001-0.9 through WEQ-001-0.13, WEQ-001-1.0
through WEQ-001-1.8 and WEQ-001-9.7.
\11\ In Docket No. RM08-7-000, the Commission is issuing a Final
Rule (being issued simultaneously with this rule) approving six
modified Reliability Standards submitted to the Commission for
approval by the North American Electric Reliability Corporation
(NERC). The rule being issued in Docket No. RM08-7-000 is also
approving NERC's proposed interpretation of five specific
Requirements of Commission-approved Reliability Standards. While the
Final Rule being issued in Docket No. RM08-7-000 addresses modified
Reliability Standards, the Final Rule being issued in the instant
proceeding (i.e., in Docket No. RM05-5-005), is addressing, among
other matters, the business practice standards related to these
Reliability Standards.
---------------------------------------------------------------------------
8. In the NOPR, we asked for comment on differences in definitions
in a few of the NERC's and NAESB's TLR standards. The comments indicate
that NERC and NAESB have formed a subcommittee to ensure that their
definitions are complementary in the future. We are very pleased that
NERC and NAESB have taken active steps to ensure that their respective
definitions are harmonized so as to ensure that these standards will
operate efficiently in the future.
9. The specific NAESB standards that we are incorporating by
reference in this Final Rule are:
Business Practices for Open Access Same-Time Information
Systems (OASIS), Version 1.4 (WEQ-001, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16, 2007) including Standards 001-0.2
through 001-0.8, 001-0.14 through 001-0.20, 001-2.0 through 001-9.6.2,
001-9.8 through 001-12.5.2, and 001-A and 001-B; \12\
---------------------------------------------------------------------------
\12\ The WEQ Version 001 package of standards includes Version
1.4 of the OASIS Standards. The reference to Version 1.4 is based on
the fact that this is the fourth set of revisions to the Version 1.0
OASIS Standards that the Commission adopted in Order No. 889. Open
Access Same-Time Information System and Standards of Conduct, 61 FR
21,737 (May 10, 1996), FERC Stats. & Regs. ] 31,035 (April 24,
1996). The Version 1.4 reference appears in Standards WEQ-001, WEQ-
002, WEQ-003, and WEQ-013.
---------------------------------------------------------------------------
Business Practices for Open Access Same-Time Information
Systems (OASIS) Standards & Communication Protocols, Version 1.4 (WEQ-
002, Version 001, Oct. 31, 2007, with minor corrections applied on Nov.
16, 2007) including Standards 002-0.1 through 002-5.10;
Open Access Same-Time Information Systems (OASIS) Data
Dictionary, Version 1.4 (WEQ-003, Version 001, Oct. 31, 2007, with
minor corrections applied on Nov. 16, 2007) including Standard 003-0;
Coordinate Interchange (WEQ-004, Version 001, Oct. 31,
2007, with minor corrections applied on Nov. 16, 2007) including
Purpose, Applicability, and Standards 004-0.1 through 004-17.2, and
004-A through 004-D;\13\
---------------------------------------------------------------------------
\13\ See supra note 11.
---------------------------------------------------------------------------
Area Control Error (ACE) Equation Special Cases Standards
(WEQ-005, Version 001, Oct. 31, 2007, with minor corrections applied on
Nov. 16, 2007) including Purpose, Applicability, and Standards 005-0.1
through 005-3.1.3, and 005-A;
Manual Time Error Correction (WEQ-006, Version 001, Oct.
31, 2007, with minor corrections applied on Nov. 16, 2007) including
Purpose, Applicability, and Standards 006-0.1 through 006-12;
Inadvertent Interchange Payback (WEQ-007, Version 001,
Oct. 31, 2007, with minor corrections applied on Nov. 16, 2007)
including Purpose, Applicability, and Standards 007-0.1 through 007-2,
and 007-A;
Transmission Loading Relief--Eastern Interconnection (WEQ-
008, Version 001, Oct. 31, 2007, with minor corrections applied on Nov.
16, 2007) including Purpose, Applicability, and Standards 008-0.1
through 008-3.11.2.8, and 008-A through 008-D;\14\
---------------------------------------------------------------------------
\14\ Id.
---------------------------------------------------------------------------
Gas/Electric Coordination (WEQ-011, Version 001, Oct. 31,
2007, with minor corrections applied on Nov. 16, 2007) including
Standards 011-0.1 through 011-1.6;\15\
---------------------------------------------------------------------------
\15\ These standards are identical to the standards the
Commission incorporated by reference into its regulations at 18 CFR
38.2 in Order No. 698.
---------------------------------------------------------------------------
Public Key Infrastructure (PKI) (WEQ-012, Version 001,
Oct. 31, 2007, with minor corrections applied on Nov. 16, 2007)
including Recommended Standard, Certification, Scope, Commitment to
Open Standards, and Standards 012-0.1 through 012-1.26.5; and
Business Practices for Open Access Same-Time Information
Systems (OASIS) Implementation Guide, Version 1.4 (WEQ-013, Version
001, Oct. 31, 2007, with minor corrections applied on Nov. 16, 2007)
including Introduction and Standards 013-0.1 through 013-4.2.
10. The Commission will also require public utilities to modify
their open access transmission tariffs (OATTs) to include the WEQ
standards that we are incorporating by reference the next time they
make any unrelated filing to revise their OATTs.\16\ As we did in Order
No. 676,\17\ we clarify that, to the extent a public utility's OASIS
obligations are administered by an independent system operator or
regional transmission operator (RTO) and are not covered in the public
utility's OATT, the public utility will not need to modify its OATT to
include the OASIS standards.
---------------------------------------------------------------------------
\16\ See Order No. 676, FERC Stats. & Regs. ] 31,216 at P 100.
If the public utility makes no unrelated tariff filing by January
31, 2009, it must make a separate tariff filing incorporating these
standards by that date. They are to use the language specified later
in this order, see infra P 83. We also note that, as discussed in P
82, once the standards have become effective, utilities must abide
by the standards even before they make their tariff filings
incorporating the standards into their tariffs.
\17\ Order No. 676, FERC Stats. & Regs. ] 31,216 at P 20.
---------------------------------------------------------------------------
11. NAESB approved the standards under its consensus
procedures.\18\ Adoption of consensus standards is appropriate because
the consensus process helps ensure the reasonableness of the standards
by requiring that the standards draw support from a broad spectrum of
all segments of the industry. Moreover, since the industry itself has
to conduct business under these standards, the Commission's regulations
should reflect those
[[Page 43851]]
standards that have the widest possible support. In section 12(d) of
the National Technology Transfer and Advancement Act of 1995 (NTT&AA),
Congress affirmatively requires federal agencies to use technical
standards developed by voluntary consensus standards organizations,
like NAESB, as a means to carry out policy objectives or
activities.\19\
---------------------------------------------------------------------------
\18\ The WEQ's procedures ensure that all industry members can
have input into the development of a business practice standard,
whether or not they are members of NAESB, and each standard it
adopts is supported by a consensus of the five industry segments:
Transmission, generation, marketer/brokers, distribution/load
serving entities, and end users. Under the WEQ process, for a
standard to be approved, it must receive a super-majority vote of 67
percent of the members of the WEQ's Executive Committee with support
from at least 40 percent of each of the five industry segments. For
final approval, 67 percent of the WEQ's general membership must
ratify the standards.
\19\ Pub. L. No. 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C.
272 note (1997).
---------------------------------------------------------------------------
B. Issues Raised by Commenters
12. Comments in response to the WEQ Version 001 NOPR were filed by
ten commenters. While some of these comments raise concerns about
specific standards, none of the ten comments filed raise any general
objection to the Commission's proposal to incorporate by reference the
WEQ standards into the Commission's regulations.
1. Cost of Obtaining NAESB Standards
a. Comments
13. Lafayette and LEPA are concerned that the cost of obtaining the
NAESB standards impedes dissemination and understanding of the
applicable requirements. Lafayette and LEPA claim that incorporating by
reference standards necessarily purchased at not insubstantial costs
imposes a burden on small entities, particularly where issues of
interpretation of the standards arise.
b. Commission Determination
14. In Order No. 676, the Commission explained that standards
organizations are permitted to charge for standards incorporated by
reference into federal government regulations.\20\ Under the Freedom of
Information Act, to be eligible for incorporation by reference,
standards must be reasonably available to the class of persons affected
by their publication.\21\ The NAESB standards are reasonably available
to all industry members. The cost for obtaining the NAESB standards for
non-members is $100 for the printed standards booklet and $300 for the
CD-ROM of the standards. NAESB members can obtain the standards on-line
at no cost.
---------------------------------------------------------------------------
\20\ Order No. 676, FERC Stats. & Regs. ] 31,216 at P 97.
\21\ 1 CFR 51.7(a)(2)-(4).
---------------------------------------------------------------------------
15. The arguments raised here by Lafayette and LEPA are identical
to those that the Commission considered and rejected in Order No. 676,
which became a final determination when no party filed a request for
rehearing of Order No. 676 objecting to the Commission's finding on
this issue. None of the arguments raised here by Lafayette and LEPA
lead us to reverse the determination that the Commission previously
reached on this issue in Order No. 676, i.e., that the standards are
reasonably available to all industry members. Furthermore, the
Commission finds that the benefits to both the industry and the public
that have resulted from the adoption of an industry-driven approach to
standards development outweigh the cost of the fees required to obtain
the NAESB standards. If industry participants remain concerned about
the accessibility of the standards, these concerns should be addressed
through the NAESB process.
2. Interpretation of NAESB Standards and OATT Principles
a. Comments
16. LEPA requests that the Commission clarify that it will
interpret NAESB standards in accordance with the principles underlying
the OATT. In particular, LEPA requests that the Commission clarify that
it is not, by incorporating the NAESB standards, intending to override
settled matters of contract law or the Commission policies underlying
open access transmission service.
b. Commission Determination
17. The NAESB standards are incorporated by reference in the
regulations and therefore must be followed to the same extent as other
regulations and policies of the Commission. The Commission's
regulations require compliance with both the pro forma OATT (18 CFR
35.28) and the NAESB standards that the Commission has incorporated by
reference (18 CFR 38.2) and that must be included in the utility's
OATT. If LEPA is concerned that there are inconsistencies between
specific NAESB standards and the Commission's open access transmission
service regulations, it can seek an interpretation of the standards
from NAESB and can make appropriate filings with the Commission.
3. Weighing Costs and Benefits of Proposed Standards
a. Comments
18. The Midwest ISO is concerned that the cost of complying with
and implementing some of the WEQ-001 NAESB standards (for example,
standards WEQ-001-9.4.3 \22\ and WEQ-001-12\23\ ) will be greater than
the benefits that will result. The Midwest ISO believes it would be
unreasonable and unduly discriminatory to adopt a business practice
that results in substantial compliance costs while producing only
negligible benefits for a particular NAESB segment or a group of
industry participants and states that the Commission has the authority
to determine what costs are considered just and reasonable through
rulemaking. Thus, Midwest ISO is not, at this time, requesting a waiver
of specific standards (such as WEQ-001-9.4.3 and WEQ-001-12) but is
asking that the Commission provide a waiver option and that NAESB be
directed to review this entire topic. The Midwest ISO wants
consideration to be given to the relative costs and benefits of the
standards for entities such as the Midwest ISO or to allow affected
entities to seek waivers.\24\
---------------------------------------------------------------------------
\22\ WEQ-001-9.4.3 provides that ``[I]f the TP determines that
only a portion of the requested capacity can be accommodated, the TP
shall extend to the TC that portion of the capacity (i.e. , partial
service) that can be accommodated through a COUNTEROFFER. An example
is shown in Appendix B.''
\23\ WEQ-001-12 is the set of standards for transfers.
\24\ Midwest ISO Comments at 5-9.
---------------------------------------------------------------------------
b. Commission Determination
19. NAESB's stakeholder process for adopting standards ensures that
an industry consensus is necessary before any standard is approved.
This process helps to ensure that all approved standards are beneficial
to the industry. However, as we explained in order No. 676, each public
utility that wants a waiver of any standard we are incorporating by
reference in this Final Rule may file a request for waiver, supported
by the reasons it believes a waiver is warranted.\25\ To the extent
that implementation of certain standards will result in substantial
compliance costs for small industry participants, we have in the past
considered waivers of extensions of compliance obligations where
granting such requests would not noticeably diminish the expected
benefits to the rest of the industry that would derive from compliance
with the standard. Any such waiver requests should specifically detail
the expected compliance costs and the reasons why a waiver would not
diminish the overall expected benefits from compliance with the
standard. Therefore, we will incorporate these standards in our
regulations, as proposed in the WEQ Version 001 NOPR.
---------------------------------------------------------------------------
\25\ Order No. 676, FERC Stats. & Regs. ] 31,216 at P 79.
---------------------------------------------------------------------------
4. Implementation Date for WEQ-001
a. Comments
20. PJM argues that in order to implement the Resale and Transfer
functionality required by WEQ-001,
[[Page 43852]]
PJM will have to develop the internal business documentation, develop
the software modifications, and test those modifications. To provide
sufficient time to implement the necessary scheduling and settlements
application changes, PJM requests an implementation date of January 31,
2009 or later for WEQ-001. NYISO agrees with PJM's comment and requests
that the Commission institute an effective date of January 31, 2009 or
later for compliance with WEQ-001.
b. Commission Determination
21. In order to allow adequate time to implement the new Resale and
Transfer standards in WEQ-001, the Commission will provide for an
implementation date for the WEQ-001 standards of January 31, 2009, as
requested.
5. WEQ-001-0.5
22. WEQ-001-0.5 defines identical service requests as ``those OASIS
transmission service requests that have exactly the same values'' for
certain OASIS template Data Elements. The standard also states,
``Service requests where any combination of PATH, POR and/or POD
represent exactly the same commercial transmission elements shall be
considered as `having the exact same value.' ''
a. Comments
23. Bonneville is concerned that no other OASIS template Data
Elements are subject to the qualifying language ``having the exact same
value'' included in the Data Elements of PATH, POR, and POD. Bonneville
seeks clarification that ``identical service requests'' includes
multiple transmission service requests that have substantially similar
start times and stop times even if those elements are not exactly the
same.
b. Commission Determination
24. Bonneville's requested clarification would change the meaning
of this standard. The standard as adopted by NAESB requires that
``identical service requests'' must have ``exactly the same values''
for start time and stop time, not ``substantially similar start times
and stop times.'' Bonneville has not provided us with sufficient
evidence that the standard needs to be modified as it suggests. If
Bonneville believes the standard should be modified, it should, as we
stated in Order No. 676, seek such a change through NAESB.\26\
---------------------------------------------------------------------------
\26\ E.g., Order No. 676, FERC Stats. & Regs. ] 31,216 at P 67.
---------------------------------------------------------------------------
6. WEQ-001-1.5(d)
25. WEQ-001-1.5(d) provides, in part:
In the event that an OASIS user's grossly inefficient method of
accessing an OASIS node or obtaining information from the node
seriously degrades the performance of the node, a Responsible Party
may limit a user's access to an OASIS node without prior Commission
approval.
a. Comments
26. Bonneville asserts that the Responsible Party should have the
right to determine whether the inefficient access of an OASIS node
``seriously degrades'' the performance of the node and recommends that
WEQ-001-1.5(d) be revised.
b. Commission Determination
27. We are not incorporating WEQ-001-1.5(d) by reference in our
regulations, because the standard is one of several that restate the
Commission's regulations, in this case Sec. 37.5(d) of the
Commission's regulations. As we stated in Order No. 676, the proper
function of the NAESB business practice standards is to provide
business practice standards that implement the Commission's
regulations, not merely restate them.\27\
---------------------------------------------------------------------------
\27\ E.g., id. P 72 and 74.
---------------------------------------------------------------------------
7. WEQ-001-11 (Resales)
28. WEQ-001-11 states:
Any Transmission Customer (Reseller) shall have the right to
offer for sale the scheduling rights associated with the points of
delivery and receipt of a Firm or Non-Firm Point-To-Point
Transmission Service reservation (i.e. Parent Reservation). Any
Eligible Customer (Assignee) may request to purchase scheduling
rights from the Reseller.
a. Comments
29. Duke argues for the modification of WEQ-001-11, which
establishes a two-party transaction on OASIS between the reseller and
the assignee for resale transactions. Duke claims that, because the
transmission provider is permitted to annul the transaction if the
assignee does not execute the required service agreement, an
inappropriate burden is placed on the transmission provider to
intervene in a transaction to which it is not a party. Duke recommends
that this standard be revised to provide for a three-party transaction,
similar to the one presented in WEQ 001-12.1.2.
30. In addition, Duke asserts that, although WEQ-001-11 provides
for the resale of both Firm Point-to-Point and Non-Firm Point-to-Point
scheduling rights and permits the use of a blanket service agreement,
the form of Service Agreement for resales that appears in the pro forma
OATT refers only to firm sales. Duke suggests that this form may
require revision to include non-firm sales.
31. Duke also requests guidance, in the form of examples of an
Electric Quarterly Report (EQR) filing, of multiple resale transactions
under a blanket agreement. Alternatively, Duke suggests that the
Commission could rescind its requirement that the transmission provider
report resale transactions in its EQR filings and substitute a
requirement that summary reports showing a compilation of OASIS Resale
reservations be posted quarterly on OASIS.
b. Commission Determination
32. The standard Duke refers to as a model for revising the
standards for resales to provide for a three-party transaction \28\
specifies that a transfer must be agreed to by the reseller, the
assignee and the transmission provider. Transfers are distinct from
resales because transfers result in a full conveyance of rights and
obligations from the original transmission customer to the assignee. In
the case of both a resale and transfer, however, the assignee must
first execute a service agreement with the transmission provider.\29\
In both instances, the transmission provider therefore has an
opportunity to ensure that the assignee meets the transmission
provider's credit requirements and is otherwise committed to abide by
the terms and conditions of the transmission provider's OATT governing
the reassignment of transmission service.
---------------------------------------------------------------------------
\28\ WEQ-001-12.1.2 states that ``[t]he Transfer must be agreed
to by the FOTC [Financially Obligated Transmission Customer], the
Assignee, and the TP. The Conveyance of Transfer rights is not
complete until the TP approves the transfer. The Transmission
Provider shall not unduly withhold such approval.''
\29\ See Order No. 890-A, FERC Stats. & Regs. ] 31,261 at P 425.
---------------------------------------------------------------------------
33. The Commission considers it reasonable for the industry to
reach consensus through the NAESB process to require transaction-
specific approval by the transmission provider for transfers, but not
for resales. In a resale, the original transmission customer's service
agreement remains in place and any default by the assignee does not
relieve the original customer of its obligation to pay for service.\30\
That may not be the case in a transfer \31\ and, therefore, it is
reasonable to provide transmission providers with additional protection
in the form of the right to review and approve the transfer. Therefore,
we see no need to modify the standards for resales as suggested by Duke
and will incorporate these
[[Page 43853]]
standards by reference as we proposed in the WEQ Version 001 NOPR.
---------------------------------------------------------------------------
\30\ See id.
\31\ See id. P 425, n.165.
---------------------------------------------------------------------------
34. In addition, Duke's concern regarding the reference to firm
sales in the title of the Form of Service Agreement in Attachment A-1
of the pro forma OATT has been resolved by the Commission in Order No.
890-A. There the Commission revised Attachment A-1 to the pro forma
OATT to clarify that the use of a blanket service agreement for resales
is similar to the use of a blanket service agreement for primary
capacity.\32\ The specification sheet for long-term reassignments was
retained, consistent with the use of a specification sheet for long-
term sales of primary capacity.\33\
---------------------------------------------------------------------------
\32\ Id. P 424.
\33\ See id., n.164.
---------------------------------------------------------------------------
35. Finally, Duke's comments on the transmission provider's EQR
obligations are beyond the scope of this rulemaking. The Commission
adopted the EQR reporting requirement for reassigned capacity in the
Order No. 890 proceeding, in which Duke actively participated, and Duke
has failed to justify here rescission of that reporting
requirement.\34\ Should Duke or any other transmission provider have
particular concerns regarding how to comply with its reporting
obligation, it should bring the matter to the Commission's attention
for resolution.\35\
---------------------------------------------------------------------------
\34\ See Order No. 890, FERC Stats. & Regs. ] 31,241 at P 817;
Order No. 890-A, FERC Stats. & Regs. ] 31,261 at P 423 and n.162;
Order No. 890-B, 123 FERC ] 61,299 at P 84 (2008).
\35\ The Commission recently clarified and expanded the
opportunities for regulated entities and others to obtain guidance
regarding compliance with the rules and regulations administered by
the Commission. See Obtaining Guidance on Regulatory Requirements,
123 FERC ] 61,157 (2008).
---------------------------------------------------------------------------
8. WEQ-001-11.2.1
36. WEQ-001-11.2.1 states:
The Assignee shall be obligated directly to the TP for any
usage-based charges and overuse penalties resulting from its
subsequent use of the Resale.
a. Comments
37. The Midwest ISO is concerned that WEQ-001-11.2.1 introduces a
high risk of financial exposure to the transmission provider in the
event that the assignee defaults on payment. The Midwest ISO believes
that the RTO should not have to bear the financial risk associated with
an assignee defaulting on usage-based market charges. Furthermore, the
Midwest ISO is concerned that this standard does not address the
allocation and ownership of Financial Transmission Rights/Auction
Revenue Rights. To address these concerns, the Midwest ISO recommends
that WEQ-001-11 be revised to include prior validation requirements,
similar to those mandated by the Commission in Order Nos. 890 and 890-A
in the context of service agreements. Alternatively, the Midwest ISO
requests clarification and assurance that those standards are to be
interpreted such that transmission providers will not be held liable in
the event of nonperformance of a resale obligation.
b. Commission Determination
38. The Commission does not interpret WEQ-001-11.2.1 to expose a
transmission provider to high financial risks in an event an assignee
defaults on usage-based charges. At least 24 hours prior to any resale
an Assignee must execute a service agreement with the Transmission
Provider under WEQ-001-11.1.7. The Commission has held that this
service agreement is a requirement meant to commit the Assignee to
abide by the terms and conditions of the Transmission Provider's OATT
governing the reassignment of transmission service.\36\ The assignee
therefore must comply with all creditworthiness requirements required
for signing a service agreement. If an Assignee were to default on its
usage-based charges or overuse penalties, it would still be subject to
its service agreement with the Transmission Provider, and the
Transmission Provider would have access to any collateral or other
assurances required under its OATT. Furthermore, Midwest ISO itself
points out the Commission's policy in Order No. 890-A that allows a
transmission provider to take action against the Assignee as it would
any other default under the pro forma OATT, as well as transfer to the
reseller its legal rights to enforce the Assignee's payment
obligations.\37\ We find that these procedural protections, coupled
with NAESB standard WEQ-001-11.2.1.1, which grants the Transmission
Provider the right to nullify the Resale in the event the service
agreement is not executed, address the concerns of Midwest ISO
regarding its comments on financial exposure and the request for prior
validation. The Commission will therefore incorporate this standard
into the Commission's regulations by reference as we proposed in the
WEQ Version 001 NOPR.
---------------------------------------------------------------------------
\36\ Order No. 890-A, FERC Stats. & Regs. ] 31,261 at P 423.
\37\ Id. n.166.
---------------------------------------------------------------------------
9. WEQ-001-11.3 Through WEQ-001-11.3.3
39. Standards WEQ-001-11.3 through WEQ-001-11.3.3 describe the
service attributes and timing of resales. These standards read as
follows:
WEQ-001-11.3:
A Resale shall retain all the same transmission service
attributes, transmission service priority, and points of delivery
and receipt of the Parent Reservation. For example, if one hour of a
Monthly Firm reservation is Resold, the Resale reservation shall be
a Monthly Firm Resale reservation lasting one hour.
WEQ-001-11.3.1:
The TP's OASIS shall not impose any restrictions regarding the
timing of a Resale, either submission times or service duration,
except that the start and stop times of the Resale must be within
the bounds of the Parent Reservation(s) that are designated as
supporting the Resale.
WEQ-001-11.3.2:
The Reseller shall have the right to aggregate multiple
reservations into a single Resale provided that each reservation
being aggregated is of exactly the same service attribute, priority,
product and point of receipt/point of delivery.
WEQ-001-11.3.3:
A Resale must be in whole hours, beginning at the top of the
hour, and within the start and stop time(s) of the Parent
Reservation(s).
a. Comments
40. Southern Companies recommends that the Commission reject the
portions of WEQ-001-11.3 through WEQ-001-11.3.3 that seem to require
transmission providers to provide hourly firm service to assignees.
Southern Companies argues that these provisions are inconsistent with
the provisions of Order No. 890, the pro forma OATT, and the
Commission's regulations.
41. First, Southern Companies states that, in Order No. 890, the
Commission determined that transmission providers are not required to
provide hourly firm service; it argues, therefore, that portions of
WEQ-001-11.3 through WEQ-001-11.3.3 are in conflict with Order No. 890
and therefore should be rejected. Second, Southern Companies states
that, in the pro forma OATT, the minimum term of firm point-to-point
transmission service that is required to be offered is one day.
42. Lastly, Southern Companies points out that the Commission's
regulations mandate that a reseller choosing to use OASIS to offer for
resale transmission capacity must post relevant information on the same
OASIS as used by the transmission provider from whom the reseller
purchased the
[[Page 43854]]
transmission capacity and in the same manner that the transmission
provider posts its own information. Southern Companies argues that, if
a reseller is allowed to sell hourly firm service when the transmission
provider does not offer it, then the reseller will be unable to comply
with the Commission's regulations regarding the posting of relevant
information because the transmission provider will not have display
pages, tables, etc., that are designed for hourly firm service.
43. Duke recommends against the adoption of WEQ-001-11.3.2 due to
the administrative difficulties that the aggregation of multiple resale
reservations could create. Duke argues that the value of this practice
to its customers is nominal relative to the billing complexities that
could be involved.
b. Commission Determination
44. A consensus of the electric industry has found that allowing
customers the ability to resell scheduling rights on less than daily
basis will increase the flexibility of resales and better serve the
needs of customers. We agree that providing such enhanced flexibility
is desirable.
45. We also find no inconsistency between these standards and Order
No. 890, the pro forma OATT, or the Commission's regulations. Southern
Companies appears to be confusing its obligation to offer transmission
service with the resale of scheduling rights by customers that have
previously reserved service. When a customer reserves daily
transmission service, it is given the right to schedule the use of
transmission capacity up to the amount reserved in every hour of that
day (subject to OATT scheduling deadlines). The customer is not
required to schedule use in each hour of the day and, in fact, could
use as little as a single hour of the reserved service.
46. The assumption of a customer's scheduling rights by an assignee
for one or more hours does not mean the transmission provider is
offering hourly service to the assignee. As the Commission explained in
Order No. 890-A, the reassignment of transmission capacity simply
results in the reseller obtaining the right to schedule the reserved
capacity during the period of the reassignment, consistent with the
original customer's reservation.\38\ Indeed, permitting such resales is
consistent with the Commission's determination in Order No. 888 that
``a public utility's tariff must explicitly permit voluntary
reassignment of all or a part of a holder's firm transmission capacity
rights to any eligible customer.'' \39\ We therefore find that WEQ-001-
11.3.1 and WEQ-001-11.3.3 are not inconsistent with Order Nos. 888 and
890 and provide customers with additional flexibility to obtain
capacity in competition with the transmission provider.\40\
---------------------------------------------------------------------------
\38\ Order No. 890-A, FERC Stats. & Regs. ] 31,261 at P 425.
\39\ 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 21,540 (May 10, 1996), FERC Stats. & Regs. ]
31,036 at 31,696 (1996), order on reh'g, Order No. 888-A, 62 FR
12,274 (Mar. 14, 1997), FERC Stats. & Regs. ] 31,048 (1997), order
on reh'g, Order No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g,
Order No. 888-C, 82 FERC ] 61,046 (1998), aff'd in relevant part sub
nom. Transmission Access Policy Study Group v. FERC, 225 F. 3d 667
(D.C. Cir. 2000) (TAPS v. FERC), aff'd sub nom. New York v. FERC,
535 U.S. 1 (2002) (emphasis in original; footnotes omitted).
\40\ In the event of an hourly assignment of scheduling rights,
the assignee would be subject to the same scheduling deadlines
stated in the transmission provider's OATT as applicable to the
reseller, e.g., 10 a.m. of the day prior to commencement of service
if the transmission provider does not otherwise offer hourly firm
service. Recently, in Order No. 890-B, the Commission directed
transmission providers to include in their EQRs the rate that would
have been charged under their OATTs had the assignee purchased
primary service from the transmission provider for the term of the
reassignment. See Order No. 890-B at P 84. If the transmission
provider does not offer hourly firm service, the tariff rate that
would be reported for an assignee receiving hourly scheduling rights
would be the rate for daily service.
---------------------------------------------------------------------------
10. WEQ-001-11.5.3
47. WEQ-001-11.5.3 states:
All resales must include the price of the Resale. Price units
shall always be $/MW-Hour reserved.
a. Comments
48. Southern Companies recommends that the Commission reject WEQ-
001-11.5.3. Southern Companies claims that forcing resales to be
converted to an hourly price is meaningless, particularly when
transmission providers are not required to provide hourly firm service.
Furthermore, Southern Companies claims that this provision is
inconsistent with both the pro forma OATT and the Commission's
regulations. Reassigned service is governed by the transmission
provider's OATT, and Southern Companies claims that in order to be
consistent with the transmission provider's OATT, the price of a resale
should be based upon the increments of service that are set forth in
that OATT and agreed to by the reseller and assignee. Furthermore,
Southern Companies cites section 23.1 of the pro forma OATT, which
mandates that assignees receive the same services and priority of
service as did the reseller, and that the assignee is subject to all
the terms and conditions of the tariff. Lastly, the Commission's
regulations state that the transmission provider must post OASIS
information for third parties in the same way that it posts its own
information. Southern Companies argues that the transmission provider
would be unable to comply with this regulation if WEQ-001-11.5.3 is
adopted and the transmission provider does not offer hourly firm
service because the transmission provider would be required to post
prices in units different from the units in which it reports its own
prices if they are based on the increments of service provided.
Southern Companies notes that they raised these concerns throughout the
NAESB process of developing the standards.
49. Bonneville argues that because resales may be of different
increments of service, the pricing for the different increments must be
permitted to vary to reflect these increments. Furthermore, Bonneville
claims that the term ``Price units'' in proposed WEQ-001-11.5.3 is
inconsistent with the definition of ``PRICE--UNITS'' in the OASIS Data
Dictionary, WEQ-003-0. Bonneville recommends that WEQ-001-11.5.3 read
as follows:
All resales must include the price of the Resale. PRICE--UNITS
shall be specified (e.g., $/MWhr, $/MWmonth, etc.).
50. Duke supports the adoption of WEQ-001-11.5.3. Duke claims that
this requirement both simplifies the calculation of bills and provides
the Commission with a consistent price format for the comparison of
resale transactions. If the pricing methodology prepared by NAESB is
not acceptable, then Duke would support a requirement that the total
resale price be included in the reservation, with the Transmission
Provider billing the total amount to the Assignee in one bill and
crediting the total amount to the Reseller in a single credit,
regardless of the duration of the resale reservation.
b. Commission Determination
51. The Commission in Order No. 890 did not address whether the
price for resales must be stated in a particular unit of measure, such
as $/MW-Hour. Instead, the Commission left to negotiating parties the
determination of the price for a particular reassignment of
transmission capacity. It is not unreasonable for the industry to have
reached consensus that the price of resales should be stated in $/MW-
Hour. The Commission agrees with Duke that having a consistent price
format for all
[[Page 43855]]
resale transactions will make it easier for the Commission to compare
such transactions to each other. This requirement also will improve the
transparency and openness of resales of transmission service, allowing
potential reassignment customers to better understand the comparative
value of assigned transmission service. Therefore, we will incorporate
this standard by reference as we proposed in the WEQ Version 001 NOPR.
52. Neither Southern Companies nor Bonneville stated a compelling
reason as to why the Commission should not accept the proposed NAESB
standard. It is the obligation of the parties negotiating the
reassignment to state the price for the transaction and, pursuant to
this standard, all such prices will be in a consistent format. We
recognize that this may result in the posting of Resale prices that are
not in the same unit of measure as the original reservation under which
the Resale is accomplished. Nothing in Order No. 890 or our regulations
prohibits this approach, which we conclude will permit customers to
better compare prices for different transactions on the same
transmission system, as well as transactions across transmission
providers.
11. Resales of Conditional Long Term Firm Reservations
53. WEQ-001-11.1.7 states that ``[t]he Assignee must execute a
service agreement with the Transmission Provider that will govern the
provision of reassigned service no later than twenty-four hours prior
to the scheduling deadline applicable for the commencement of the
reassigned service. The Transmission Provider may establish a blanket
service agreement to include Resale transactions.''
54. WEQ-001-11.7 states that ``[i]n the event a Transmission
Provider requires that a higher priority, competing transmission
service request must displace all or a portion of a confirmed lower
priority reservation, the TP shall have the right to nullify any
Resales that reference the displaced reservation as their Parent.''
55. WEQ-001-11.7.1 states that ``[o]nce the conditional window on
the Parent Reservation has closed, Resales for firm service are not
subject to displacement in accordance with Standard WEQ-001-11.''
a. Comments
56. Duke strongly recommends that the resale of Conditional Long
Term Firm reservations be prohibited so that transmission providers can
effectively manage these reservations and assure the reliable operation
of the transmission grid. In the event that the resale of these
reservations is permitted, Duke argues that they should only be
permitted during periods in which the reservations are unconditionally
firm and such resales should be restricted to the remaining portion of
the biennial reassessment period, where applicable.
57. Furthermore, Duke argues that although WEQ-001-11.1.7 permits
the use of blanket service agreements, if the resale of Conditional
Long Term Firm reservations is allowed, then the use of a blanket
service agreement as specified in WEQ-001-11.1.7 would not be permitted
under Order No. 890. Duke states that, pursuant to Order No. 890,
transmission providers and assignees are to execute a non-conforming
Service Agreement for resales that specifies either specific system
conditions during which conditional curtailment may occur or annual
number of curtailment hours during which conditional curtailment may
occur.\41\
---------------------------------------------------------------------------
\41\ Duke cites Order No. 890, FERC Stats. & Regs. ] 31,241 at P
960.
---------------------------------------------------------------------------
58. Bonneville also recommends that the Commission adopt a
provision at WEQ-001-11.7 preventing transmission customers from
initiating any resale during the conditional window because permitting
this practice could allow resales initiated prematurely to impose risks
on all parties involved in the transaction and could lead to
inefficiencies in the resale market.
b. Commission Determination
59. As the Commission explained in Order No. 890-A, and reiterates
above, the reassignment of transmission capacity results in the
reseller obtaining the right to schedule the reserved capacity during
the period of the reassignment consistent with the original customer's
reservation.\42\ This applies equally to long-term firm point-to-point
service using the conditional firm option adopted in Order No. 890. We
conclude that the NAESB standards adequately address resales of
conditional firm transactions. WEQ-001-11.1 makes clear that
confirmation of a resale ``shall also convey any outstanding conditions
that may exist on the Parent Reservation (such as conditional approval
pursuant to section 13.2(ii) of the OATT).'' WEQ-001-11.7 and WEQ-001-
11.7.1 also address the transmission provider's right to nullify resale
transactions when a higher priority transaction displaces a lower
priority transaction and when those rights apply to conditional firm
transactions.
---------------------------------------------------------------------------
\42\ Order No. 890-A, FERC Stats. & Regs. ] 31,261 at P 425.
---------------------------------------------------------------------------
60. Since these standards permit resales of conditional firm
transactions and give the transmission provider the right to nullify
resales of displaced transactions, we find that the standards address
the concerns of Duke and Bonneville about the effective management of
conditional firm transactions. If Duke and Bonneville believe that
these standards are not workable upon implementation, they may submit a
request to NAESB to modify these standards based on their experience
with these standards.
61. The Commission finds no reason to reject the industry's
decision to permit a transmission provider to develop a blanket service
agreement for resales of conditional firm service. Order No. 890
required only that an original conditional firm service contract would
be nonconforming in every case, and thus, would be required to be filed
with the Commission for approval. However, we see no reason to prohibit
the use of a blanket service agreement for the resale of conditional
firm service, since the resale only provides the right to schedule
service consistent with the original transmission customer's
reservation, which will be on file with the Commission. We agree with
NAESB that the development of a blanket agreement for resales is
beneficial because it will help encourage and expedite the processing
of resales.
12. WEQ-004 (Coordinate Interchange) and WEQ-008 (Transmission Loading
Relief--Eastern Interconnection)
62. WEQ-004 provides the NAESB business practice standards for
coordinate interchange. These standards are designed to facilitate the
transfer of electric energy between entities responsible for balancing
load and generation.
63. WEQ-008 provides the NAESB business practice standards to
complement the transmission loading relief procedures needed for
curtailment and reloading of interchange transactions to relieve
overloads on transmission facilities modeled for the eastern
interconnection.
a. NOPR Requests for Comments
64. In the WEQ Version 001 NOPR, the Commission raised three
questions concerning reliability-related standards and sought comments
in response to these questions. First, as to WEQ-004, the Commission
asked whether passive approval (also referred to as confirmation by
silence) is appropriate for a business practice intended to
[[Page 43856]]
complement a reliability standard.\43\ Second, the Commission also
asked a question about e-tagging.\44\ Third, as to WEQ-008, the
Commission asked whether the differences in NAESB and NERC definitions
are significant and whether a single definition for reliability-related
terms should be adopted in future standards.\45\
---------------------------------------------------------------------------
\43\ WEQ Version 001 NOPR at P 21.
\44\ Id. P 20. No comments in response to this question were
received.
\45\ Id. P 28.
---------------------------------------------------------------------------
b. Comments
65. In response to the Commission's request for comments regarding
whether confirmation by silence is appropriate for a business practice
intended to complement a reliability standard, NERC claims that it does
not create a reliability impact and that the NAESB Standard does not
alter the NERC Reliability Standards requirements, which require active
response by the Balancing Authority and Transmission Service Provider.
66. In response to the Commission's request for comments on whether
the differences in the definition used by NAESB and NERC are
significant and whether a single definition for reliability-related
terms should be adopted in future standards, NERC asserts that the
definitions do not affect the industry's ability to successfully
implement the standards as written and reports that it is working with
NAESB to develop more in-depth coordination procedures to ensure that
definitions are consistent between both organizations. This task has
been assigned to a newly formed Standards Committee Process
Subcommittee.
67. Regarding the Commission's request for comment concerning the
differences in the reliability-related definitions used by NAESB and
NERC, the Midwest ISO states that it will rely on an effort undertaken
by NAESB to resolve these differences and assumes that the Commission
will direct that NAESB and NERC use the same definitions. SPP concurs
with and endorses the comments submitted by the Midwest ISO on whether
the differences in reliability-related definitions are significant and
whether single definitions should be adopted in future standards.
68. The Midwest ISO is concerned that the inclusion of the Regional
Difference in Appendix D of WEQ-008 Transmission Loading Relief--
Eastern Interconnection results in overlapping requirements, since the
same Regional Difference appears as Section E in the NERC TLR Standard
IRO-006-04--Reliability Coordination--Transmission Loading Relief. NERC
retains responsibility for the Regional Difference Section of the NERC
TLR Standard (section E) while a field test permitting PJM, Midwest
ISO, and SPP market flows to use a three percent threshold is being
conducted; however, when the field test and an evaluation of the
results are completed and a recommendation on the proper curtailment
threshold that will be included in the Regional Difference is approved
based on the results, the Regional Difference will be transferred to
NAESB and removed from the NERC TLR Standard. In Order No. 693,\46\ the
Commission stated that it would neither approve nor remand the waiver
of the regional difference to NERC TLR Standard IRO-006-03 while the
field test was being conducted, and the Midwest ISO requests that the
Commission take a similar action regarding WEQ-008 Appendix D, neither
approving it nor remanding it while the field test is being conducted.
---------------------------------------------------------------------------
\46\ Mandatory Reliability Standards for the Bulk-Power System,
72 FR 31,452 (June 7, 2007), FERC Stats. & Regs. ] 31,242, at P 989
(Mar. 16, 2007).
---------------------------------------------------------------------------
c. Commission Determination
69. As stated above, NAESB and NERC have agreed to establish a
subcommittee to ensure that their definitions are consistent. Since all
industry segments indicate that any existing differences in terms used
by NAESB and NERC will not affect reliability or the ability to
implement these standards, we will incorporate these standards.\47\
---------------------------------------------------------------------------
\47\ In Docket No. RM08-7-000, the Commission has deferred
action on the proposed NERC TLR Reliability Standards. However,
there is no need for us to defer action on WEQ-008. Thus, we will
proceed to incorporate WEQ-008 by reference in this Final Rule. If
developments concerning NERC's TLR Reliability Standards necessitate
revisions to these standards, we are relying on NAESB, in
coordination with NERC, to adopt any needed revisions.
---------------------------------------------------------------------------
70. While we will adopt the Regional Differences Section in
Appendix D of the WEQ-008 TLR--Eastern Interconnection standards, we
will not require it to be implemented until after the completion of the
field tests within PJM, Midwest ISO, and SPP. Currently, the Regional
Differences Section is housed in the NERC Reliability Standards and
will remain so until the completion of the field tests.\48\ NERC states
that, at that time, Section E of the NERC TLR Standard will be deleted
from its Reliability Standards and transferred to the NAESB Business
Practice Standards.
---------------------------------------------------------------------------
\48\ Pursuant to sec
