Preventing Undue Discrimination & Preference in Transmission Service, 021607 FERC, RM05-17-000

Docket Nº:RM05-17-000, RM05-25-000
Party Name:Preventing Undue Discrimination and Preference in Transmission Service Nos. 18 CFR Part 35, 18 CFR Part 37
Judge Panel:Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. Magalie R. Salas, Secretary.
Case Date:February 16, 2007
Court:Federal Energy Regulatory Commission

Preventing Undue Discrimination and Preference in Transmission Service

Nos. RM05-17-000, RM05-25-000

Nos. 18 CFR Part 35, 18 CFR Part 37

United States of America, Federal Energy Regulatory Commission

February 16, 2007

Order No. 890

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule

SUMMARY: The Federal Energy Regulatory Commission is amending the regulations and the pro forma open access transmission tariff adopted in Order Nos. 888 and 889 to ensure that transmission services are provided on a basis that is just, reasonable and not unduly discriminatory or preferential. The final rule is designed to: (1) strengthen the pro forma open-access transmission tariff, or OATT, to ensure that it achieves its original purpose of remedying undue discrimination; (2) provide greater specificity to reduce opportunities for undue discrimination and facilitate the Commission's enforcement; and (3) increase transparency in the rules applicable to planning and use of the transmission system.

EFFECTIVE DATE: This rule will become effective [insert date 60 days after publication in the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT:

Daniel Hedberg (Technical Information)

Office of Energy Markets and Reliability

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-6243

W. Mason Emnett (Legal Information)

Office of the General Counsel – Energy Markets

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-6540

Kathleen Barrón (Legal Information)

Office of the General Counsel – Energy Markets

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-6461

SUPPLEMENTARY INFORMATION:

TABLE OF CONTENTS

Paragraph Numbers

I. INTRODUCTION .......................................................................................................................................................................1.

II. BACKGROUND ........................................................................................................................................................................9.

A. Historical Antecedent ...................................................................................................................................................................9.

B. Order No. 888 and Subsequent Reforms ......................................................................................................................................14.

C. EPAct 2005 and Recent Developments ........................................................................................................................................22.

III. NEED FOR REFORM OF ORDER NO. 888 ...........................................................................................................................26.

A. Opportunities for Undue Discrimination Continue to Exist ..............................................................................................................26.

B. Lack of Transparency Undermines Confidence in Open Access and Impedes Enforcement of Open Access Requirements .............44.

C. Congestion and Inadequate Infrastructure Development Impede Customers' Use of the Grid ..........................................................52.

D. A Consistent Method of Measuring ATC Is Needed .....................................................................................................................62.

E. Discriminatory Pricing of Imbalances ..............................................................................................................................................70.

F. Redispatch/Conditional Firm ..........................................................................................................................................................73.

G. EPAct 2005 Emphasized Certain Policies and Priorities for the Commission....................................................................................79.

IV. SUMMARY, SCOPE AND APPLICABILITY OF THE FINAL RULE ....................................................................................82.

A. Summary of Reforms .....................................................................................................................................................................83.

B. Core Elements of Order No. 888 That Are Retained ......................................................................................................................91.

1. Federal/State Jurisdiction ................................................................................................................................................................92.

2. Native Load Protection ..................................................................................................................................................................95.

3. The Types of Transmission Services Offered ...................................................................................................................................110.

4. Functional Unbundling .....................................................................................................................................................................117.

C. Applicability of the Final Rule ..........................................................................................................................................................124.

1. Non-ISO/RTO Public Utility Transmission Providers ........................................................................................................................124.

2. ISO and RTO Public Utility Transmission Providers and Transmission Owner Members of ISOs and RTOs ......................................143.

3. Non-Public Utility Transmission Providers/Reciprocity ......................................................................................................................162.

V. REFORMS OF THE OATT ...........................................................................................................................................................193.

A. Consistency and Transparency of ATC Calculations .........................................................................................................................193.

B. Coordinated, Open and Transparent Planning ...................................................................................................................................418.

C. Transmission Pricing .........................................................................................................................................................................603.

1. General .............................................................................................................................................................................................603.

2. Energy and Generation Imbalances ....................................................................................................................................................627.

3. Credits for Network Customers ........................................................................................................................................................729.

4. Capacity Reassignment .....................................................................................................................................................................778.

5. "Operational" Penalties ......................................................................................................................................................................826.

a. Unreserved Use Penalties ..................................................................................................................................................................826.

b. Distribution of Operational Penalties ..................................................................................................................................................850.

c. Applicability of Operational Penalties Proposal to RTOs and Other Independent or Non-Profit Entities ...............................................866.

6. "Higher of" Pricing Policy ...................................................................................................................................................................870.

7. Other Ancillary Services ....................................................................................................................................................................886.

D. Non-Rate Terms and Conditions .......................................................................................................................................................901.

1. Modifications to Long-Term Firm Point-to-Point Service ....................................................................................................................901.

a. Planning Redispatch and Conditional Firm Options ..............................................................................................................................901.

b. Proposals for Transparent Redispatch .................................................................................................................................................1095.

c. Other Requested Service Modifications ...............................................................................................................................................1165.

2. Hourly Firm Service ............................................................................................................................................................................1177.

3. Rollover Rights...

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