**Sample Triennial Review: Generator Owner Affiliated with a
Transmission Owning Public Utility\
**

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

-   Updated Market Power Analysis

-   Asset Appendix

**\<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. ER03-11X1-\_\_\_

Enclosed for filing are an original and six copies of the Updated Market
Power Analysis, submitted by XYZ Small Gen, Inc. (XYZ). The Commission
granted market-based rate authority to XYZ on July 20, 2003 in Docket
No. ER03-11X1-000.

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 UPDATED MARKET POWER ANALYSIS FILING**

UNITED STATES OF AMERICA

BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

XYZ Small Gen, Inc. Docket No. ER03-11X1-\_\_\_

UPDATED MARKET POWER ANALYSIS

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 its updated market power analysis in support of its
continued authority to sell energy, capacity and ancillary services
under its FERC Electric Tariff, Original Volume No. 1.

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.

III\. UPDATED MARKET POWER ANALYSIS

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. 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.[^1] Additionally, XYZ does not own or control,
and is not 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 seller 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. CONCLUSION

WHEREFORE, based on the foregoing facts and the attached analysis, XYZ
Small Gen, Inc. requests that the Commission issue an order accepting
its updated market power analysis as satisfying the Commission's
requirements for continued market-based rate authorization.

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.

Page 1 of 2

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

                                                                                                                                        

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

                                                                                                                                        

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

                                                                                                                                        

  XYZ Small Gen,   ER03-11X1-000   XYZ Gen 1      XYZ Small XYZ Small Gen, NA\*            ABC            Northwest      10/12/2003     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

[^1]: Cite to OATT acceptance.