123 FERC ¶ 61,063 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 382 

Docket No. AD08-7-000 

Annual Charges Assessments for Public Utilities 

(April 21, 2008) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Notice of Inquiry. 

SUMMARY: In this Notice of Inquiry, the Commission is seeking comments on its 

current methodology for the assessment of electric annual charges to public utilities, in 

particular, whether that methodology remains fair and equitable, and on alternative 

methodologies. As provided in its current regulations, the Commission recovers the costs 

of its electric regulatory program through filing fees and, as particularly relevant here, 

annual charges assessed to public utilities that provide transmission service, based on the 

volume of electricity transmitted. This methodology reflects that regulation of 

transmission providers, transmission facilities and transmission service is central to 

Commission regulation, and that the transmission grid is the interstate highway system 

for wholesale power sales. This Notice will enable the Commission to determine whether 

its current methodology remains fair and equitable, and to review alternative 

methodologies. 

DATES: Comments are due [insert date that is 30 days from the date of publication in 

the FEDERAL REGISTER]. 
Docket No. AD08-7-000 - 2 - 

ADDRESSES: Interested persons may submit comments, identified by 

Docket No. AD08-7-000, by any of the following methods: 

• eFiling: Comments may be filed electronically via the eFiling link on the 

Commission's web site at www.ferc.gov. Documents created electronically using 

word processing software should be filed in the native application or print-to-PDF 

format and not in a scanned format. This will enhance document retrieval for both 

the Commission and the public. The Commission accepts most standard word 

processing formats and commenters may attach additional files with supporting 

information in certain other file formats. Attachments that exist only in paper 

form may be scanned. Commenters filing electronically should not make a paper 

filing. Service of rulemaking (or Notice of Inquiry) comments is not required. 

• Mail/Hand Delivery: Commenters that are not able to file electronically must mail 

or hand deliver an original and 14 copies of their comments to: Federal Energy 

Regulatory Commission, Secretary of the Commission, 888 First Street, N.E., 

Washington, D.C. 20426. 

FOR FURTHER INFORMATION CONTACT: 

Lawrence R. Greenfield (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6415 
Docket No. AD08-7-000 - 3 - 

Richard M. Wartchow (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8744 

Troy D. Cole (Technical Information) 

Director, Division of Financial Services 

Office of the Executive Director 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6161 

SUPPLEMENTARY INFORMATION: 
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 382 

Annual Charges Assessments for Public Utilities Docket No. AD08-7-000 

NOTICE OF INQUIRY 

(April 21, 2008) 

1. In this Notice of Inquiry, the Commission is seeking comments on its current 

methodology for the assessment of electric annual charges to public utilities, in particular, 

whether that methodology remains fair and equitable, and on alternative methodologies.1

 

As provided in its current regulations, the Commission recovers the costs of its electric 

regulatory program through filing fees and, as particularly relevant here, annual charges 

assessed to public utilities that provide transmission service, based on the volume of 

electricity transmitted. This methodology reflects that regulation of transmission 

providers, transmission facilities and transmission service is central to Commission 

regulation, and that the transmission grid is the interstate highway system for wholesale 

power sales. This Notice will enable the Commission to determine whether its current 

methodology remains fair and equitable, and to review alternative methodologies. 

 1

 This Notice of Inquiry is limited to the assessment of annual charges to public 

utilities regulated under Parts II and III of the Federal Power Act (FPA). It does not, 

therefore, address the assessment of charges for the Commission’s hydroelectric, natural 

gas or oil pipeline regulatory programs. It also does not address recovery of Federal 

power marketing agency (PMA)-related costs or electric filing fees (the latter are 

separately charged for, among other things, petitions for declaratory orders, Commission 

staff interpretations and certain qualifying facility-related filings). 
Docket No. AD08-7-000 - 2 - 

2. Although the Commission has held in the past that industry concerns did not 

justify a change to the annual charges methodology, in response to continued expressions 

of concern the Commission is issuing this Notice of Inquiry to seek comment on whether 

the existing methodology remains an appropriate means to recover the costs of the 

Commission’s electric regulatory program or whether there is another more appropriate 

alternative. The Commission seeks to ascertain whether those industry concerns, 

although not determinative previously, may now be more valid and, if so, to review 

alternative proposals for the recovery of the Commission’s electric regulatory program 

costs. The Commission also invites interested parties to submit in this proceeding their 

views on other possible changes to the Commission’s annual charges regulations. 

I. Background

A. Commission Authority

3. The Commission is required by section 3401 of the Omnibus Budget 

Reconciliation Act of 1986 (Budget Act)2

 to “assess and collect fees and annual charges 

in any fiscal year in amounts equal to all of the costs incurred . . . in that fiscal year.”3

 

The annual charges must be computed based on methods which the Commission 

determines to be “fair and equitable.”4

 The Conference Report accompanying the Budget 

Act provides the Commission with the following guidance as to this phrase's meaning: 

 2

 42 U.S.C. 7178 (2000). 

3

 This authority is in addition to that granted to the Commission in sections 10(e) 

and 30(e) of the FPA. See 16 U.S.C. 803(e), 823a(e). 

4

 42 U.S.C. 7178(b). 
Docket No. AD08-7-000 - 3 - 

[A]nnual charges assessed during a fiscal year on any person 

may be reasonably based on the following factors: (1) the 

type of Commission regulation which applies to such person 

such as a gas pipeline or electric utility regulation; (2) the 

total direct and indirect costs of that type of Commission 

regulation incurred during such year;[5

] (3) the amount of 

energy--electricity, natural gas, or oil--transported or sold 

subject to Commission regulation by such person during such 

year; and (4) the total volume of all energy transported or sold 

subject to Commission regulation by all similarly situated 

persons during such year.[6

] 

4. The Commission’s annual charges do not enable the Commission to collect 

amounts in excess of its expenses, but merely serve as a vehicle to reimburse the United 

States Treasury for the Commission's expenses.7

 

B. Current Annual Charges Billing Procedure

5. As required by the Budget Act, the Commission's regulations provide for the 

payment of annual charges by public utilities to fund the Commission’s electric 

regulatory program.8

 The Commission intends that these annual charges in any fiscal 

 5

 The Commission is required to collect not only all its direct costs but also all its 

indirect expenses such as hearing costs and indirect personnel costs. See H.R. Conf. Rep. 

No. 99-1012 at 238 (1986), reprinted in 1986 U.S.C.C.A.N. 3868, 3883 (Conference 

Report); see also S. Rep. No. 99-348 at 56, 66 and 68 (1986). 

6 See Conference Report at 238. The Commission may assess these charges by 

making estimates based upon data available to it at the time of the assessment. 42 U.S.C. 

7178(c). 

7

 42 U.S.C. 7178(f). Congress approves the Commission's budget through annual 

and supplemental appropriations. 

8

 18 CFR Part 382 (2007); see Revision of Annual Charges Assessed to Public 

Utilities, Order No. 641, FERC Stats. & Regs. ¶ 31,109 (2000), order on reh’g, Order 

No. 641-A, 94 FERC ¶ 61,290 (2001). The Commission’s regulations define its electric 

regulatory program as “the Commission's regulation of the electric industry under Parts II 

(continued...) 
Docket No. AD08-7-000 - 4 - 

year will recover the Commission's estimated electric regulatory program costs (other 

than the costs of regulating PMAs and the electric regulatory program costs recovered 

through electric filing fees) for that fiscal year. In the next fiscal year, the Commission 

adjusts its annual charges up or down, as appropriate, both to eliminate any over- or 

under-recovery of the Commission’s actual costs and to eliminate any over- or undercharging of any particular person.9

 

6. When the Commission first developed an annual charge methodology for public 

utilities in response to the Budget Act, it assessed charges based on two types of 

wholesale electricity service: transmission and wholesale sales in interstate commerce.10 

However, in Order No. 641, the Commission determined that the sweeping changes in the 

industry occurring in the late 1980’s and the 1990’s had changed the industry landscape, 

which consequently changed the nature of the Commission’s work. 

 

and III of the Federal Power Act; Public Utility Regulatory Policies Act; Powerplant and 

Industrial Fuel Use Act; Department of Energy Organization Act; Energy Security Act; 

Regulatory Flexibility Act; Pacific Northwest Electric Power Planning and Conservation 

Act; Flood Control and River and Harbor Acts; Bonneville Project Act; Federal 

Columbia River Transmission Act; Reclamation Project Act; Nuclear Waste Policy Act; 

National Environmental Policy Act; and the Public Utility Holding Company Act.” 

18 CFR 382.102. 

9

 18 CFR 382.201; accord Annual Charges Under the Omnibus Budget 

Reconciliation Act of 1986, Order No. 507, FERC Stats. & Regs. ¶ 30,839, at 31,263-64 

(1988); Texas Utilities Electric Company, 45 FERC ¶ 61,007, at 61,027 (1988). 

10 See Annual Charges Under the Omnibus Budget Reconciliation Act of 1986, 

Order No. 472, FERC Stats. & Regs. ¶ 30,746 (1987), clarified, Order No. 472-A, FERC 

Stats. & Regs. ¶ 30,750, order on reh'g, Order No. 472-B, FERC Stats. & Regs. ¶ 30,767 

(1987), order on reh'g, Order No. 472-C, 42 FERC ¶ 61,013 (1988). 
Docket No. AD08-7-000 - 5 - 

7. In Order No. 641, the Commission noted that open access transmission, functional 

unbundling, and the rapid movement to market-based power sales rates brought about by 

Order No. 888, state retail unbundling, and Order No. 2000 encouraging the formation of 

regional transmission organizations (RTOs) caused the Commission’s time and effort to 

be increasingly devoted to assuring open and equal access to public utilities’ transmission 

systems. Order No. 641 anticipated that wholesale power rates would be increasingly 

disciplined by competitive market forces and less by direct regulation, and the 

Commission’s workload had, in fact, moved away from its traditional focus on review of 

bilateral power sales agreements and instead focused increasingly on transmission. In 

order to reflect those changes, Order No. 641 changed the Commission’s annual charges 

methodology to recover its electric regulatory program costs by assessing charges solely 

on the MWh of electric energy transmitted in interstate commerce by public utilities 

providing transmission service, rather than on both jurisdictional power sales and 

transmission volumes, as in the past.11 

8. As such, sections 382.201(a) and (b) of the Commission’s regulations provide that 

the costs of the Commission’s administration of its electric regulatory program 

(excluding the costs of regulating the PMAs such as the Bonneville Power 

 11 Order No. 641, FERC Stats. & Regs. ¶ 31,109 at 31,848-49; accord Annual 

Charges Under the Omnibus Budget Reconciliation Act of 1986 (Phibro Inc.), 81 FERC 

¶ 61,308, at 31,843-56 (1997) (Phibro Inc.). 
Docket No. AD08-7-000 - 6 - 

Administration,12 and electric regulatory program costs recovered through electric filing 

fees13) are assessed to public utilities that provide transmission service based on the 

comparative amount of transmission that they provide;14 those that have provided more 

transmission service (i.e., more MWhs) are charged more, and those that have provided 

less transmission service (i.e., less MWhs) are charged less.15 

9. In calculating annual charges, the Commission first determines the total costs of 

its electric regulatory program and subtracts all PMA-related costs and electric filing fee 

collections to determine total collectible electric regulatory program costs. It then uses 

the data submitted under FERC Reporting Requirement No. 582 (FERC 582) to 

determine the total volume of transmission and exchanges for all public utilities to be 

assessed.16 The Commission divides that transaction volume into its collectible electric 

 12 The PMAs such as the Bonneville Power Administration are the subject of a 

separate assessment. 18 CFR 382.201(d). 

13 The Commission’s case-specific filing fees are spelled out in Part 381 of the 

Commission’s regulations. 18 CFR Part 381. 

14 18 CFR 382.201(a), (b). 

15 See Order No. 641-A, 94 FERC ¶ 61,290 at 62,038. 

16 The Commission’s regulations define public utility, for the purpose of assessing 

annual charges, as “any person who owns or operates facilities subject to the jurisdiction 

of the Commission under Parts II and III of the Federal Power Act, and who has rate 

schedule(s) on file with the Commission and who is not a ‘qualifying small power 

producer’ or a ‘qualifying cogenerator,’ as those terms are defined in section 3 of the 

Federal Power Act, or the United States or a state, or any political subdivision of the 

United States or a state, or any agency, authority, or instrumentality of the United States, 

a state, political subdivision of the United States, or political subdivision of a state.” 

18 CFR 382.102. 

(continued...) 
Docket No. AD08-7-000 - 7 - 

regulatory program costs to determine the unit charge per megawatt-hour. Finally, the 

Commission multiplies the transaction volume for each public utility to be assessed by 

the unit charge per megawatt-hour to determine the annual charges for each public 

utility.17 

10. In response to Order No. 641, certain public utilities and members of RTOs and 

independent system operators (ISO), including municipal utility and cooperative 

members, expressed concern that this annual charges methodology may be unfair and 

they alleged that the resulting annual charges fall more heavily on RTO and ISO 

members than on public utilities that are not RTO or ISO members. These concerns were 

initially raised in proceedings where RTO and ISO members objected to bills reflecting 

the charges determined under Order No. 641 and the underlying methodology. Although 

they did not seek timely rehearing of Order No. 641 itself, they sought rehearing of 

annual charges bills determined using the Order No. 641 methodology.18 In a second 

proceeding, three RTOs and ISOs filed a petition requesting that the Commission initiate 

 

In addition, the current electric annual charges are assessed based on transmission 

service, and thus exclude power marketers, which typically do not provide transmission 

service. 

17 18 CFR 382.201; see Phibro Inc., 81 FERC ¶ 61,308 at 62,424-25. 

18 See Revision of Annual Charges to Public Utilities (California Independent 

System Operator), 101 FERC ¶ 61,043 (California ISO Order), order dismissing reh'g, 

101 FERC ¶ 61,326 (2002) (California ISO Rehearing Order) (denying requests for 

rehearing filed by California Independent System Operator, Inc., New York Independent 

System Operator (New York ISO), Arizona Public Service Company, American 

Transmission Company, LLC and American Transmission Services, Inc.). 
Docket No. AD08-7-000 - 8 - 

a rulemaking proceeding to revise the Order No. 641 methodology, seeking lower annual 

charges and questioning the assumptions that the Commission made in issuing Order 

No. 641.19

11. Those proceedings raised arguments that charges should be assessed to power 

sales as well as transmission,20 challenges to the Commission’s finding that its work was 

primarily focused on transmission regulation,21 assertions that annual charge allocations 

should reflect the transmission component of bundled retail sales,22 and claims that the 

Commission’s annual charge assessments do not reflect the level of transmission service 

in various regions and unduly disadvantage RTOs. The proceedings also addressed the 

assertion that the Commission had erred in assessing charges to RTOs and ISOs based on 

services provided for non-jurisdictional members.23 

12. After noting that those arguments represented an untimely attempt to seek 

rehearing of Order No. 641, the Commission responded to the specifics of each issue. 

The Commission rejected the arguments that annual charges should be allocated to power 

 19 See Midwest Independent Transmission System Operator, Inc., 103 FERC 

¶ 61,048 (Midwest ISO Order), order denying reh'g, 104 FERC ¶ 61,060 (2003) 

(Midwest ISO Rehearing Order) (denying petition for rulemaking filed by Midwest ISO, 

New York ISO and PJM Interconnection, L.L.C.), aff’d, 388 F.3d 903 (D.C. Cir. 2004) 

(Midwest ISO Court Order). 

20 Midwest ISO Rehearing Order, 104 FERC ¶ 61,060 at P 7. 

21 Id. P 9. 

22 Id. P 7 n.13. 

23 Midwest ISO Order, 103 FERC ¶ 61,048 at P 15 n.25; Midwest ISO Rehearing 

Order, 104 FERC ¶ 61,060 at P 7. 
Docket No. AD08-7-000 - 9 - 

sales and arguments questioning whether transmission was the Commission’s primary 

regulatory focus by noting that, in contrast to the timeframe in which the Commission 

established its previous methodology, the Commission was then focused increasingly on 

transmission through efforts related to open access transmission service, interconnection 

policy, and RTO and ISO regulation.24 The Commission also noted that then-current 

market regulation efforts such as reforming western markets and promoting standard 

market design (SMD), while nominally related to power sales, were primarily focused on 

transmission issues.25 The Commission reported that its reform of western markets was 

concerned with transmission scheduling and constraints used to manipulate prices, and its 

SMD proposal incorporated a new open access transmission tariff and focused on 

congestion management procedures.26 

13. The Commission rejected the suggestion that it should impose annual charges 

based on the transmission component of bundled retail sales, noting that such transactions 

formed no part of the Commission’s work load at that time.27 The Commission also 

refuted the suggestion that the transaction volumes that it relied on were inaccurate and 

understated transmission service provided by certain utilities, by pointing out that the 

 24 Midwest ISO Order, 103 FERC ¶ 61,048 at P 11-12; Midwest ISO Rehearing 

Order, 104 FERC ¶ 61,060 at P 10. 

25 Id. 

26 Id. 

27 California ISO Order, 101 FERC ¶ 61,043 at P 15; see also Order No. 641-A, 

94 FERC ¶ 61,290 at 62,038. 
Docket No. AD08-7-000 - 10 - 

reported transaction volumes were subject to audit and correction and annual charge 

assessments would be updated to reflect any correction.28 Finally, the Commission 

justified assessing annual charges on public utilities based on transmission services that 

they provided to non-jurisdictional entities, noting that such charges were properly 

recoverable in rates from the non-jurisdictional utility and should be treated like any 

other cost of providing service.29 

14. The Midwest ISO petitioned the United States Court of Appeals for the District of 

Columbia for review of the Commission’s orders denying the petition for rulemaking. 

The court denied the petition, but noted the Commission’s statement in the Midwest ISO 

Rehearing Order that “the issues may merit further consideration at a later time.”30 

II. Discussion

15. When the Commission issued Order No. 641, it determined that its regulatory 

focus was turning increasingly towards regulation of transmission service and away from 

a case-by-case review of wholesale power sales rates. In recognition of this focus on 

regulating transmission service, Order No. 641 provided for the Commission to recover 

the costs of its electric regulatory program (not otherwise recovered by, for example, 

 28 Midwest ISO Order, 103 FERC ¶ 61,048 at P 13. 

29 Id. P 15 & n.25. In fact, since that order, the Commission’s authority over such 

traditionally non-jurisdictional utilities has expanded with the passage of the Energy 

Policy Act of 2005 (EPAct 2005). Compare 16 U.S.C. 824(f) with 16 U.S.C. 824j-1(a)-

(b), 824o(b), 824u, 824v (2000 & Supp. V 2005). 

30 Midwest ISO Court Order, 388 F.3d at 923, citing Midwest ISO Rehearing 

Order, 104 FERC ¶ 61,060 at P 16. 
Docket No. AD08-7-000 - 11 - 

filing fees) through annual charges assessed to public utilities that provide transmission 

service, based on the volume of electricity transmitted. Regulation of transmission 

providers, transmission facilities and transmission service remains at the heart of 

Commission regulation. 

16. Although the state of the industry in 2002 and 2003 did not justify a change to the 

Commission’s methodology, the Commission stated that it would reconsider its 

methodology when the issue merited further consideration. The Commission is now 

seeking through this Notice of Inquiry to determine whether subsequent developments 

make it appropriate to revisit Order No. 641 or otherwise suggest the need for changes to 

its methodology for assessing annual charges to recover its electric regulatory program 

costs. 

17. The Commission continues to devote substantial resources to oversight of 

transmission service. In February 2007, for example, the Commission issued Order 

No. 890, amending its regulations and reforming the pro forma open access transmission 

tariff to ensure that transmission services are provided on a just, reasonable and not 

unduly discriminatory or preferential basis.31 In addition, the Commission also continues 

to commit substantial resources to regulation of the development and operation of RTOs 

and ISOs. These transmission service providers, moreover, administer complex and 

comprehensive energy markets and transmission tariffs that serve broad regions — New 

 31 Preventing Undue Discrimination and Preference in Transmission Service, 

Order No. 890, FERC Stats. & Regs. ¶ 31,241, Order No. 890-A, FERC Stats. & Reg. 

¶ 31,261 (2007). 
Docket No. AD08-7-000 - 12 - 

England, New York, California, the mid-Atlantic and the Midwest, among others. These 

RTO/ISO markets are based on regional, security-constrained economic dispatch 

transmission service and locational-based marginal pricing, including transmission 

congestion charges. Therefore, although the Commission devotes some resources to 

power sales regulation through its regulation of these markets, the markets are 

fundamentally linked to transmission service. As a result, assessing annual charges based 

on transmission has been a fair and equitable means to allocate the costs of regulating 

these markets (with such costs, in turn, being incorporated into the RTO/ISO 

transmission rates). Moreover, the Commission devotes extensive resources to resolving 

hundreds of tariff filings by these entities and their members each year – and these filings 

are among the most complex that the Commission faces. 

18. The Commission thus continues to focus very significant resources on 

transmission,32 including implementation of new authority under EPAct 2005 to, among 

other things, approve and enforce mandatory reliability standards for the bulk-power 

system, which has as its center the interstate electric transmission grid.33 Order No. 890, 

for example, established comprehensive requirements for coordinated, open and 

transparent transmission planning to facilitate the expansion of the transmission system 

 32 The current electric annual charges methodology also has the advantages of 

being comparatively simple and easy to administer – a not insignificant concern. It is a 

methodology that, as well, has been challenged and upheld by the D.C. Circuit. See

supra notes 18, 29. 

33 Pub. L. No 109-58, Title XII, Subtitle A, 119 Stat. 594 (2005) (EPAct 2005) 

(amending the FPA, 16 U.S.C. 824, et seq.). 
Docket No. AD08-7-000 - 13 - 

and to address transmission congestion, which can result in higher energy prices, and 

other customer concerns. 

19. The RTOs and ISOs and their members in their earlier pleadings pointed out that 

all transmission service in RTOs and ISOs is regulated by this Commission and therefore 

annual charges are assessed on both wholesale and retail transmission service. This 

stands in contrast to annual charges paid by a public utility that is not an RTO or ISO 

member, which may provide both unbundled wholesale transmission service and bundled 

retail transmission service; for such public utilities, only the former transmission service 

is considered in allocating the Commission’s electric regulatory program costs. This 

results in a comparatively high percentage of the Commission’s annual charges being 

assessed to RTOs and ISOs. 

20. While the nature of Commission regulation of wholesale power sales has certainly 

changed since adoption of Order No. 641, the Commission continues to regulate 

wholesale power sales. Comprehensive wholesale power sales rate review proceedings 

are now comparatively rare. Instead of individual rate proceedings, the Commission 

reviews new market-based rate power sales applications, electric quarterly reports, and 

triennial filings and notices of changes in status for market-based rate power sellers. In 

2004, the Commission revised the market-power analysis that is used to grant market- 
Docket No. AD08-7-000 - 14 - 

based rate authority, and, in 2007, clarified its market-based rate policies.34 Further, the 

Commission establishes market rules and mitigation rules for wholesale power sales. 

Finally, the Commission dedicates enforcement resources to investigating compliance 

with rules governing wholesale power sales. 

21. These facts, in combination with new programs intended to implement new EPAct 

2005 authority over certain mergers and other corporate transactions and to sanction 

market manipulation, warrant the Commission inquiring whether the current system 

remains fair and equitable, or whether the concerns previously raised by RTOs and ISOs, 

and their members, or other changes in the industry justify a change to the current electric 

annual charges methodology. 

22. If such a change is justified, the Commission requests comments, as described 

below, on whether other annual charges assessment methodologies are more suitable than 

the current methodology. Such alternate methodologies could include, but are not limited 

to: (i) assessing annual charges based on jurisdictional wholesale power sales as well as 

 34 Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and 

Ancillary Services by Public Utilities, Order No. 697, 72 FR 39904 (Jul. 20, 1007), 

FERC Stats. & Regs. ¶ 31,252, clarified, 121 FERC ¶ 61,260 (2007), order on rehearing, 

123 FERC 61,055 (2008).
Docket No. AD08-7-000 - 15 - 

transmission service,35 (ii) adopting different annual charge calculation methodologies 

for different types of public utilities to account for regional differences in market 

structure or to account for the fact that all RTO and ISO transmission service is 

considered when developing annual charges but that non-RTO and ISO members’ 

bundled retail transmission service is not accounted for in annual charges, or (iii) 

determining annual charges using factors other than the volume of MWh transmitted in 

interstate commerce, such as peak load or transmission investment. 

23. The Commission requests that interested parties submit comments, taking into 

account the factors listed in the Conference Report for guidance, on the following 

inquiries: 

(A) Does the current electric annual charges assessment 

methodology remain a fair and equitable method for 

recovering the Commission’s electric regulatory program 

costs, and why? 

(B) If the current electric annual charges assessment 

methodology is no longer a fair and equitable method, please 

 35 To the extent that a commenter advocates assessing annual charges based on 

wholesale power sales, such commenter should identify what utilities should be assessed 

annual charges and what transactions (and/or power sales volumes) should be used in 

developing such charges, as well as how the Commission would calculate such charges. 

For example, should the methodology reflect capacity sales, energy sales or both? 

Should the methodology reflect shorter-term transactions, longer-term transactions or 

both and should the methodology treat them similarly or should the methodology treat 

them differently (and, if so, how)? Given that the Commission does not separately track 

its resources devoted to transmission regulation versus those devoted to wholesale power 

sales regulation, how should the Commission allocate its costs between the two? Given 

that any alternative annual charges methodology adopted must be practical, i.e. must be a 

methodology that the Commission can administer without undue burden, such questions 

and others are important and necessitate answers. 
Docket No. AD08-7-000 - 16 - 

identify what alternative methodology is fair and equitable, 

and explain why, providing, where possible, empirical 

evidence to support any proposed methodology. 

(C) For any such alternative methodology, please identify, 

with specificity, what entities should be assessed electric 

annual charges and how such an alternative methodology 

would work,36 including what data the Commission would 

need to allocate the charges and how the Commission would 

obtain the data. 

III. Comment Procedures

24. The Commission invites interested persons to submit comments on the matters and 

inquiries discussed in this notice, including any related matters or alternative proposals 

that commenters may wish to discuss. Comments are due [Insert date that is 30 days 

from the date of publication in the FEDERAL REGISTER]. Comments must refer to 

Docket No. AD08-7-000, and must include the commenter's name, the organization it 

represents, if applicable, and its address in their comments. 

25. The Commission encourages comments to be filed electronically via the eFiling 

link on the Commission's web site at http://www.ferc.gov. The Commission accepts 

most standard word processing formats. Documents created electronically using word 

processing software should be filed in native applications or print-to-PDF format and not 

in a scanned format. Commenters filing electronically do not need to make a paper 

filing. 

 36 The Commission emphasizes the importance of this third question. Parties 

seeking a change in methodology are cautioned to give this question careful thought and 

thorough analysis. Broadly phrased requests that some other entities be charged will be 

less persuasive than specific recommendations as to which particular entities should be 

charged, and how. 
Docket No. AD08-7-000 - 17 - 

26. Commenters that are not able to file comments electronically must send an 

original and 14 copies of their comments to: Federal Energy Regulatory Commission, 

Secretary of the Commission, 888 First Street, N.E., Washington, D.C. 20426. 

27. All comments will be placed in the Commission's public files and may be viewed, 

printed, or downloaded remotely as described in the Document Availability section 

below. Commenters are not required to serve copies of their comments on other 

commenters. 

IV. Document Availability

28. 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 the Commission's Home Page 

(http://www.ferc.gov) and in the Commission’s Public Reference Room during normal 

business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, N.E., Room 2A, 

Washington, D.C. 20426. 

29. From the Commission's Home Page on the Internet, this information is available 

on eLibrary. The full text of this document is available on eLibrary 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. 

30. User assistance is available for eLibrary and the Commission’s web site during 

normal business hours from FERC Online Support at (202) 502-6652 (toll free at 

(866) 208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room 
Docket No. AD08-7-000 - 18 - 

at (202) 502-8371, TTY (202)502-8659. E-mail the Public Reference Room at 

public.referenceroom@ferc.gov. 

By direction of the Commission. 

( S E A L ) 

Kimberly D. Bose, 

Secretary.