UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Suedeen G. Kelly, Marc Spitzer,

Philip D. Moeller, and Jon Wellinghoff.

+--------------------------------------------+----------+-------------+
| Alcoa Power Generating Inc.                | Docket   | OA07-24-000 |
|                                            | No.      |             |
| (Long Sault Division)                      |          |             |
+--------------------------------------------+----------+-------------+

ORDER GRANTING REQUEST FOR WAIVER OF ORDER NO. 890

(Issued July 13, 2007)

1.  On May 14, 2007, the Long Sault Division (Long Sault) of Alcoa Power
    Generating Inc. (APGI) requested waiver of the requirements of Order
    No. 890,[^1] with the exception of the transmission planning
    requirements. This order grants Long Sault a waiver of the
    requirement to have an open access transmission tariff (OATT) on
    file subject to certain conditions, described below.

    **[Background]{.underline}**

2.  In Order No. 890, the Commission reformed the *pro forma* OATT to
    clarify and expand the obligations of transmission providers to
    ensure that transmission service is provided on a non-discriminatory
    basis.[^2] Among other things, Order No. 890 amended the *pro forma*
    OATT to require greater consistency and transparency in the
    calculation of available transfer capability, open and coordinated
    planning of transmission systems, and standardization of charges for
    generator and energy imbalance services. The Commission also revised
    various policies governing network resources, rollover rights, and
    reassignments of transmission capacity.

3.  Each public utility transmission provider is required to file
    revisions to its OATT to conform to the revised *pro forma* OATT.
    The Commission stated that the criteria for waiver of the
    requirements of Order No. 890 is unchanged from that used to
    evaluate requests for waiver under Order Nos. 888[^3] and 889.[^4]

    **[Request for Waiver]{.underline}**

4.  APGI states that it is a wholly-owned subsidiary of Alcoa Inc.
    (Alcoa), that exists primarily to generate, purchase and/or manage
    electricity for Alcoa's use in its aluminum smelters and other
    industrial processes. APGI states that it serves no traditional
    public utility retail load, and that it makes certain limited sales
    into the wholesale market.

5.  One of APGI's five divisions, Long Sault owns five 115 kV
    transmission lines in northern New York that connect the Alcoa
    Massena Operations with its electric energy suppliers; each line is
    approximately 7 miles in length. APGI explains that the lines were
    originally constructed as feeder lines between the New York Power
    Authority's (NYPA) St. Lawrence-Franklin D. Roosevelt Power Project,
    hydroelectric generation in Quebec, Canada, and the Alcoa
    manufacturing facility in Massena, New York. APGI states that as the
    regional transmission system grew and the NYPA and neighboring
    utilities became more interconnected, these lines became part of
    that interconnected system.

6.  Three of the lines, known as the Moses-to-Alcoa (MAL) lines, connect
    the Alcoa Massena Operations with the NYPA's Moses substation at the
    St. Lawrence Project. There is a tap on two of the three MAL
    transmission lines that connect to the Town of Massena Electric
    Department (Town of Massena). APGI states that Long Sault provides
    transmission service for the Town of Massena under a long-term
    contract that predates Order Nos. 888 and 889 and Long Sault's OATT,
    and that the NYPA, a member of the New York Independent System
    Operator, Inc. (New York ISO), does not post or otherwise report
    Available Transmission Capacity or Total Transmission Capacity for
    the MAL transmission lines. APGI also states that the New York ISO
    has never made any attempt to bring the operation of these lines
    under its control.

7.  APGI explains that the other two lines, known as the Cedars or CRT
    lines, due to their interconnection with Cedars Rapids Transmission
    Company (CRT), connect the Hydro-Quebec System within New York at
    the National Grid Dennison Substation in Massena.[^5] APGI further
    explains that the Cedars' line capacity has been leased to CRT, and
    that Long Sault pays a fee to CRT to meet the Open Access Same Time
    Information System (OASIS) posting requirements pursuant to a
    grandfathered long-term transmission services agreement between APGI
    and CRT.

8.  APGI states that Long Sault has never received a request for
    transmission over the MAL transmission lines under the Long Sault
    OATT. According to APGI, because of the Massena Electric Department
    transmission line tap, Long Sault also provides transmission service
    for the Town of Massena; under the current configuration, however,
    APGI states that Long Sault's MAL transmission lines could not serve
    any other users but Alcoa and the Town of Massena. In addition,
    states APGI, the entire capacity of the CRT lines is made available
    to CRT and there is no residual capacity to be offered under the
    Long Sault OATT.

9.  APGI requests waiver of the requirements of Order No. 890, except
    for the requirement for coordinated, open and transmission planning.
    APGI states that the Long Sault transmission lines are limited and
    discrete transmission facilities and cites in its favor the fact
    that the Commission granted Long Sault's request for waiver or Order
    No. 889 in 1996. APGI states that Long Sault has never received a
    request for service over the MAL transmission lines and that it is
    unlikely that Long Sault will ever receive such a request due to the
    configuration of those lines. As for the Cedar lines, APGI
    reiterates that Long Sault has no control over these lines.

10. APGI also states that complying with Order No. 890 requirements
    would place a substantial burden on Long Sault and that granting the
    request for waiver would not cause detriment to any party. In this
    regard, APGI states that most of the requirements of Order No. 890
    would never be used and that the only transmission service that Long
    Sault provides is based on pre-OATT agreements that account for the
    entire capacity of the Long Sault facilities. APGI states, though,
    that Long Sault intends to comply with the requirement to submit a
    planning strawman and, subsequently, an attachment to the OATT in
    accordance with P 435 *et seq.* of Order No. 890. APGI commits that,
    if Long Sault receives a request for transmission service under its
    OATT in the future, it will file a revised OATT with the Commission
    within 60 days of the date of the request and comply with any
    additional requirements under Order No. 890 that are effective on
    the date of the request.

11. APGI notes that Long Sault was granted waiver of Order No. 889 in
    1996 due to the limited nature of its transmission facilities.[^6]
    However, in 1999, when Alcoa filed an application under section 203
    of the Federal Power Act[^7] for corporate reorganization to create
    APGI, in the face of a protest arguing that APGI should be required
    to comply with Order No. 889 if it sought to obtain market-based
    rate authority, Alcoa relinquished Long Sault's waiver of Order No.
    889.[^8] APGI asserts that the protest in the section 203 case
    related only to APGI's Yadkin Division, which APGI states is located
    hundreds of miles from the Long Sault Division and which operates
    completely separately from the Long Sault Division under its own
    OATT.

12. Most recently, the Commission granted waiver of Long Sault's OASIS
    requirements under Order No. 889 with respect to Long Sault's MAL
    lines.[^9]

    **[Procedural Matters]{.underline}**

13. Notice of the filing was published in the *Federal Register*, 72
    Fed. Reg. 29,138 (2007), with interventions, comments and protests
    due on or before June 13, 2007. No protests or adverse comments were
    filed.

    **[Discussion]{.underline}**

14. In *Black Creek Hydro, Inc.*,[^10] the Commission stated that it
    would grant requests for waiver of Order No. 888 by public utilities
    that could show that they own, operate, or control only limited and
    discrete transmission facilities. However, if the public utility
    receives a request for transmission service, it would have 60 days
    to file a *pro forma* OATT with the Commission and to comply with
    any additional requirements that are effective on the date of the
    request. The Commission also explained that waiver of Order No. 889
    would be appropriate: (1) if the applicant owns, operates, or
    controls only limited and discrete transmission facilities; or (2)
    if the applicant owns, operates, or controls an integrated
    transmission grid, if it is a small public utility, unless it is a
    member of a tight power pool, or other circumstances are present
    which indicate that a waiver would not be justified. The Commission
    clarified that waiver would be granted unless and until an entity
    evaluating its transmission complains that it could not get
    information necessary to complete its evaluation, at which time,
    compliance must be made within 60 days of the complaint.

15. As stated above, the criteria for waiver of Order No. 890 is
    unchanged from that used to evaluate requests for waiver under Order
    Nos. 888 and 889. Although APGI requested waiver of Order No. 890,
    we interpret this more generally as a request for waiver of the
    requirement to have an OATT on file. Based on the statements in
    APGI's filing, we find that the Long Sault transmission lines are
    limited and discrete facilities. The only transmission service that
    Long Sault provides is based on pre-OATT agreements. Further, due to
    the nature of Long Sault's MAL transmission lines, APGI asserts that
    it is unlikely that Long Sault will receive transmission requests
    for service under its OATT in the future. Additionally, APGI states
    that the entire capacity of the CRT lines is made available to CRT;
    there is no residual capacity to be offered under the Long Sault
    OATT. In light of these circumstances, we grant APGI a waiver of the
    requirement that Long Sault have a *pro forma* OATT on file.

16. The Commission grants the waiver of the requirement to have an OATT
    on file on two conditions. First, consistent with *Black Creek*,
    APGI must file a *pro forma* OATT in compliance with Order Nos. 888
    and 890, and any additional requirements, within 60 days of Long
    Sault receiving a request for transmission service from a customer.
    Second, consistent with the commitments made by APGI in its request,
    APGI must participate in the regional planning activities undertaken
    by transmission providers in Long Sault's region pursuant to Order
    No. 890.[^11]

[The Commission orders]{.underline}:

APGI's request for waiver of the requirement to have an OATT on file is
granted, subject to the conditions stated above.

By the Commission. Commissioner Wellinghoff concurring with a

separate statement attached.

( S E A L )

Kimberly D. Bose,

Secretary.

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Alcoa Power Generating Inc. Docket No. OA07-24-000

(Long Sault Division)

(Issued July 13, 2007)

WELLINGHOFF, Commissioner, [concurring]{.underline}:

Alcoa Power Generating Inc. (APGI) has committed its Long Sault Division
to comply with the requirements of Order No. 890 regarding coordinated,
open and transparent transmission planning. The Commission has
conditioned the grant to Long Sault of a waiver of the requirement to
have an OATT on file on APGI's participation in the regional planning
activities undertaken by the transmission providers in Long Sault's
region pursuant to Order No. 890. I commend APGI for its commitment to
the goals of coordinated, open and transparent transmission planning and
agree with the Commission's action here. Nonetheless, I take this
opportunity to reiterate that APGI must fully participate in all
planning activities required by Order No. 890, including but not limited
to the identification of demand resources to be assessed in the
transmission planning process. 

For these reasons, I respectfully concur.

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Jon Wellinghoff
>
> Commissioner

[^1]: *Preventing Undue Discrimination and Preference in Transmission
    Service*, Order No. 890, 72 Fed. Reg. 12,266 (March 15, 2007), FERC
    Stats. & Regs. ¶ 31,241 (2007).

[^2]: *See id.* at P 26-61.

[^3]: *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, FERC Stats. & Regs. ¶ 31,036 (1996),
    *order on reh'g*, Order No. 888-A, 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), *aff'd sub nom. New York v.
    FERC*, 535 U.S. 1 (2002).

[^4]: *Open Access Same-Time Information System and Standards of
    Conduct*, Order No. 889, FERC Stats. & Regs. ¶ 31,035 (1996), *order
    on reh'g*, Order No. 889-A, FERC Stats & Regs. ¶ 31,049, *reh'g
    denied*, 81 FERC ¶ 61,253 (1997).

[^5]: APGI states that CRT was formerly a Canadian subsidiary of Alcoa
    but was sold to Hydro-Quebec in 1985.

[^6]: *Soyland Power Coop., Inc.*, 78 FERC ¶ 61,095, at 61,341 (1997).

[^7]: 16 U.S.C. § 824c (2000).

[^8]: *See* Docket Nos. EC99-74-000 and ER99-2932-000.

[^9]: *Alcoa Power Generating Inc. (Long Sault Div.)*, 116 FERC ¶ 61,257
    (2006).

[^10]: 77 FERC ¶ 61,232 (1996) (*Black Creek*).

[^11]: Because we are waiving the requirement for Long Sault to have an
    OATT on file, it is not necessary for Long Sault to file a formal
    Attachment K to its OATT.