**Sample Initial Application: Affiliated Generator Owner\
**

This example assumes that the filing entity owns a generator and is
affiliated with a transmission-owning utility. This example includes the
following elements:

-   Cover letter

-   Petition for acceptance of initial rate filing

-   Asset Appendix

-   FERC Electric Tariff, Original Volume No. 1

**\<EXAMPLE OF COVER LETTER\>**

(current date)

Federal Energy Regulatory Commission

Office of the Secretary

888 First St., NE

Washington, D.C. 20426

Re: XYZ Small Gen, Inc.

Docket No. ER08-\_\_\_\_\_-000

Enclosed for filing are an original and six copies of the Petition for
Acceptance of Initial Tariff, Waivers and Blanket Authority, submitted
by XYZ Small Gen, Inc. (XYZ). XYZ hereby requests acceptance of FERC
Electric Tariff, Original Volume No. 1, under which it will engage in
wholesale sales of electric energy, capacity, and ancillary services at
market-based rates, the grant of certain blanket approvals, and waiver
of certain Commission regulations.

Sincerely,

Cynthia F. Kilowatt

Vice President

XYZ Small Gen, Inc.

Suite 9000

1111 Half Street, N.W.

Washington, D.C. 20426-0000

Ph: (202) XXX-XXXX

Enclosure

**EXAMPLE OF PETITION FOR ACCEPTANCE OF INITIAL RATE FILING**

UNITED STATES OF AMERICA

BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

XYZ Small Gen, Inc. Docket No. ER08-\_\_\_\_\_-000

PETITION FOR ACCEPTANCE OF INITIAL TARIFF,

WAIVERS AND BLANKET AUTHORITY

Pursuant to section 205 of the Federal Power Act (FPA), 16 U.S.C. § 824d
(2000), Rules 205 and 207 of the Rules of Practice and Procedure of the
Federal Energy Regulatory Commission (Commission), 18 C.F.R. § 385.205
(2007) and 18 C.F.R. § 385.207 (2007), and Part 35 of the Commission's
regulations, 18 C.F.R. Part 35 (2007), XYZ Small Gen, Inc. (XYZ) hereby
submits for filing FERC Electric Tariff, Original Volume No. 1, under
which XYZ will engage in sales of wholesale electric energy, capacity,
and ancillary services.

I. COMMUNICATIONS

All communications and service related to this application should be
directed to the following:

Cynthia F. Kilowatt

Vice President

XYZ Small Gen, Inc.

Suite 9000

1111 Half Street, N.W.

Washington, D.C. 20426-0000

Ph: (202) XXX-XXXX

II\. DESCRIPTION OF APPLICANT

XYZ is a Delaware corporation with its principal place of business in
Washington, D.C. XYZ is a wholly-owned subsidiary of ZYX Manufacturing
Corporation. ZYX is primarily engaged in the manufacture of farm
equipment. ZYX is owned by two managing members, Julie A. Webbers and
Bill X. West. ZYX Manufacturing Corporation also owns ABC Transmission
Co. (ABC). Other affiliates of XYZ are engaged in the production and
distribution of building supplies. Neither of the two managing members
nor the vice president, Cynthia F. Kilowatt is engaged in any other
business in the energy industry. Additionally, none sit on the board of
any other energy companies and none hold interests in any other energy
related companies.

XYZ owns a 511 MW combined cycle generator located in the ABC balancing
authority, which is located in the Northwest region as identified in
Appendix D of Order No. 697-A. ABC's transmission includes an
approximately fifty-five mile, 500 kV line in the ABC balancing
authority. ABC does not own any generation.

XYZ also respectfully requests authorization to sell the ancillary
services the Commission has authorized utilities with market-based rate
authority to sell in the markets administrated by PJM Interconnection,
L.L.C. (PJM), New York Independent System Operator (NYISO), ISO New
England, Inc. (ISO-NE), and California Independent System Operator
Corporation (CAISO).[^1] In accordance with the Commission\'s
requirements, XYZ has listed in its tariff the applicable provisions
including specific ancillary services it may sell in such markets.[^2]

III\. REQUEST FOR BLANKET AUTHORIZATION TO SELL ELECTRICITY AT
MARKET-BASED RATES

XYZ requests authorization to sell electric energy, capacity, and
ancillary services at market-based rates pursuant to the attached FERC
Electric Tariff, Original Volume No. 1. The Commission allows power
sales at market-based rates if the seller and its affiliates do not
have, or have adequately mitigated, horizontal and vertical market
power. The Commission has also codified affiliate restrictions in its
regulations which must be satisfied on an ongoing basis.

A. Horizontal Market Power

In Order No. 697 the Commission codified two indicative screens for
assessing horizontal market power and stated that there is a rebuttable
presumption of market power if a seller fails either.

**(Note that there are several ways an applicant can address the
Commission's horizontal market power concerns. Applicants may utilize
one or more of the following approaches.**

**The Commission's horizontal market power screens are described in
Order No. 697 and Order No. 697-A. Appendix A to 18 CFR Part 35, Subpart
H provides a standard format for reporting horizontal market power
screen results. Applicants should submit all work papers associated with
performing the screens.**

**Applicants may submit streamlined applications. For example, if an
applicant's entire capacity is committed under long-term contract (one
year or more) and that applicant's affiliates do not own generation,
then neither the applicant nor its affiliate have any uncommitted
capacity. Based on this, the applicant passes both the Commission's
generation market power screens. An applicant can use simplifying
assumptions when conducting the screens as long as it provides
sufficient support for its assumptions. Another example is an applicant
can rely on a recent market power analysis accepted by the Commission.
In this instance, the applicant can adopt the analysis as its own and
provide the pivotal supplier and market shares for its, along with its
affiliates, generation.**

**An entity that files screens must provide all relevant work papers
supporting those screens as required in Order No. 697. Those work papers
should be clear and support the statements in the filing.)**

B. Vertical Market Power

XYZ's affiliate ABC owns transmission facilities in the ABC balancing
authority area. ABC has a Commission-approved open access transmission
tariff (OATT) on file.[^3] Additionally, XYZ does not own or control,
and is affiliated with an entity that owns or controls, intrastate
natural gas transportation, intrastate natural gas storage or
distribution facilities; sites for generation capacity development; or
sources of coal supplies and the transportation of coal supplies such as
barges and rail cars. Neither XYZ nor any of its affiliates has erected
barriers to entry into the relevant market and will not erect barriers
to entry into the relevant market. Accordingly, XYZ satisfies the
Commission's standards with regard to vertical market power.

IV\. SELLER CATEGORY

XYZ owns generation totaling 511 MW in the Northwest region and is
affiliated with an entity that owns transmission facilities in the same
region. Pursuant to the definition of category 1 and 2 sellers in 18 CFR
35.36(a), XYZ submits that it is a category 2 seller.

**(note that if an applicant owns or controls 500 MW or less of
generation in aggregate per region; does not own, operate or control
transmission facilities other than limited equipment necessary to
connect individual generation facilities to the transmission grid (or
have been granted waiver of the requirements of Order No. 888); is not
affiliated with anyone that owns, operates or controls transmission
facilities in the same region as the seller's generation assets; is not
affiliated with a franchised public utility in the same region as the
seller's generation assets; and does not raise other vertical market
power issues, the applicant may argue that it is a Category 1 seller. As
the Commission stated in Order No. 697, after the Commission finds a
seller is Category 1 it will not be required to file regularly scheduled
updated market power analyses.)**

V. REQUEST FOR WAIVERS AND ADDITIONAL BLANKET AUTHORITY

XYZ requests waivers from the following Commission regulations, which
have been granted to other sellers:

1)  Subparts B and C of Part 35, regarding the filing of rate schedules,
    except sections 35.12(a), 35.13(b), 35.15, and 35.16;

2)  Part 41, regarding accounts, records, and memoranda;

3)  Part 101, regarding the uniform system of accounts; and

4)  Part 141, regarding statements and reports.

XYZ requests blanket approval under Part 34 of the Commission\'s
regulations of future issuances regarding securities and assumptions of
liabilities, subject to objection by an interested party.

VI\. EFFECTIVE DATE

XYZ requests that the tariff be effective (insert proposed effective
date).

VII\. QUARTERLY FILINGS

XYZ will submit electric quarterly reports in accordance with the
requirements of Order No. 2001.

VII\. CONCLUSION

WHEREFORE, XYZ Small Gen, Inc. requests that the Commission issue an
order accepting FERC Electric Tariff, Original Volume No. 1 and granting
the waivers and authorizations requested in this Petition.

Respectfully submitted,

XYZ Small Gen, Inc.

(insert current date) By:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Cynthia F. Kilowatt

Vice President

XYZ Small Gen, Inc.

Suite 9000

1111 Half Street, N.W.

Washington, D.C. 20000-1111

Ph: (202) XXX-XXXX

**Asset Appendix**

Listing the filing entity and all its energy affiliates and their
associated assets. (Both sections of this appendix are required even if
the applicant does not own any assets.)

Page 1 of 2

  ---------------- ----------------- -------------- --------- -------------- --------------- -------------- -------------- -------------- -------------
  **Market-Based                                                                                                                          
  Rate Authority                                                                                                                          
  and Generation                                                                                                                          
  Assets**                                                                                                                                

                                                                                                                                          

  **Filing Entity  **Docket \# where **Generation   **Owned   **Controlled   **Date Control  **Location**                  **In-service   **Nameplate
  and its Energy   MBR authority was Name**         By**      By**           Transferred**                                 Date**         and/or
  Affiliates**     granted**                                                                                                              Seasonal
                                                                                                                                          Rating**

                                                                                                                                          

                                                                                             **Balancing    **Geographic                  
                                                                                             Authority      Region (per                   
                                                                                             Area**         Appendix D)**                 

                                                                                                                                          

  XYZ Small Gen,   ER08-\_\_\_-000   XYZ Gen 1      XYZ Small XYZ Small Gen, NA\*            ABC            Northwest      10/12/2007     511 MW
  Inc.                                              Gen, Inc. Inc.                           Transmission                                 (nameplate)
                                                                                             Co. Balancing                                
                                                                                             Authority                                    
  ---------------- ----------------- -------------- --------- -------------- --------------- -------------- -------------- -------------- -------------

\* Not Applicable

Page 2 of 2

  -------------- ---------- -------------- -------------- --------------- -------------- -------------- ---------------
  **Electric                                                                                            
  Transmission                                                                                          
  Assets and/or                                                                                         
  Natural Gas                                                                                           
  Intrastate                                                                                            
  Pipelines                                                                                             
  and/or Gas                                                                                            
  Storage                                                                                               
  Facilities**                                                                                          

                                                                                                        

  **Filing       **Asset    **Owned By**   **Controlled   **Date Control  **Location**                  **Size**
  Entity and its Name and                  By**           Transferred**                                 
  Energy         Use**                                                                                  
  Affiliates**                                                                                          

                                                                          **Balancing    **Geographic   
                                                                          Authority      Region (per    
                                                                          Area**         Appendix D)**  

  ABC            Nowhere    ABC            ABC            NA\*            ABC            Northwest      Approximately
  Transmission   Line.      Transmission   Transmission                   Transmission                  fifty-five
  Co.            Connects   Co.            Co.                            Co. Balancing                 mile, 500 kV
                 XYZ Gen 1                                                Authority                     line
                 to CAISO                                                                               
  -------------- ---------- -------------- -------------- --------------- -------------- -------------- ---------------

\* Not Applicable

**\< EXAMPLE OF TARIFF, note that while this example may apply to most
entities, it may not cover all situations.\>**

1\) Availability

XYZ Small Gen, Inc. (Seller) makes electric energy, capacity, and
ancillary services available under this tariff to any purchaser, except
as prohibited below.

2\) Rates

All sales shall be made at rates established by agreement between the
purchaser and Seller.

3\) Seller Category

Seller is a Category 2 seller, as defined in 18 CFR 35.36(a).

4\) Compliance with Commission Regulations

Seller shall comply with the provisions of 18 CFR Part 35, Subpart H, as
applicable, and with any conditions the Commission imposes in its orders
concerning seller's market-based rate authority, including orders in
which the Commission authorizes seller to engage in affiliate sales
under this tariff or otherwise restricts or limits the seller's
market-based rate authority. Failure to comply with the applicable
provisions of 18 CFR Part 35, Subpart H, and with any orders of the
Commission concerning seller's market-based rate authority, will
constitute a violation of this tariff.

5\) Limitations and Exemptions Regarding Market-Based Rate Authority

Seller has received waiver of: Subparts B and C of Part 35, except for
sections 35.12(a), 35.13(b), 35.15 and 35.16; Part 41, Part 101, and
Part 141; and received blanket approval under Part 34. (*XYZ Small Gen,
Inc.*, 199 FERC 61,2X3 (2008))

**(Note that the Commission has developed a way for new applicant to
receive a docket number prior to filing. That docket number can be
inserted in place of the full citation above if you are a new
applicant.)**

6\) Ancillary Services

PJM: Seller offers regulation and frequency response service, energy
imbalance service, and operating reserve service (which includes
spinning, 10-minute, and 30-minute reserves) for sale into the market
administered by PJM Interconnection, L.L.C. (\"PJM\") and, where the PJM
Open Access Transmission Tariff permits, the self-supply of these
services to purchasers for a bilateral sale that is used to satisfy the
ancillary services requirements of the PJM Office of Interconnection.

New York: Seller offers regulation and frequency response service, and
operating reserve service (which include 10-minute non-synchronous,
30-minute operating reserves, 10-minute spinning reserves, and 10-minute
non-spinning reserves) for sale to purchasers in the market administered
by the New York Independent System Operator, Inc.

New England: Seller offers regulation and frequency response service
(automatic generator control), operating reserve service (which includes
10-minute spinning reserve, 10-minute non-spinning reserve, and
30-minute operating reserve service) to purchasers within the markets
administered by the ISO New England, Inc.

California: Seller offers regulation service, spinning reserve service,
and non-spinning reserve service to the California Independent System
Operator Corporation (\"CAISO\") and to others that are self-supplying
ancillary services to the CAISO.

Third-party ancillary services: Seller offers Regulation Service, Energy
Imbalance Service, Spinning Reserves, and Supplemental Reserves. Sales
will not include the following: (1) sales to an RTO or an ISO, i.e.,
where that entity has no ability to self-supply ancillary services but
instead depends on third parties; (2) sales to a traditional, franchised
public utility affiliated with the third-party supplier, or sales where
the underlying transmission service is on the system of the public
utility affiliated with the third-party supplier; and (3) sales to a
public utility that is purchasing ancillary services to satisfy its own
open access transmission tariff requirements to offer ancillary services
to its own customers.

[^1]: **^?^** *Atlantic City Electric Co.,* 86 FERC ¶ 61,248 (1999);
    *PJM Interconnection, L.L.C.,* 91 FERC ¶ 61,021(2002) (granting
    market-based rate authorization for specified ancillary services in
    the PJM market); *Central Hudson Gas & Electric Corp.,* 86 FERC ¶
    61,062, *order on reh'g,* 88 FERC ¶ 61,138 (1999) (granting
    market-based rate authorization for specified ancillary services in
    markets administered by the NYISO); *New England Power Pool,* 85
    FERC ¶ 61,379 (1998), *reh'g denied,* 95 FERC ¶ 61,074 (2001)
    (granting market-based rate authorization for specified ancillary
    services in markets administered by the ISO-NE); *AES Redondo Beach,
    L.L.C.,* 83 FERC ¶ 61,358, *order on reh'g,* 85 FERC ¶ 61,123
    (1998), *order on reh'g,* 87 FERC ¶ 61,208, *order on reh'g,* 88
    FERC 1 61,096 (1999), *order on reh'g and clarification* 90 FERC ¶
    61,036 (granting market-based rate authorization for specified
    ancillary services in markets administered by the California ISO).

[^2]: **^?^** *See, e.g., Minergy Neenah L.L.C.,* 88 FERC ¶ 61,102 at
    61,242 (1999).

[^3]: Cite to OATT acceptance.