144 FERC ¶ 61,222

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Chairman;

 Philip D. Moeller, John R. Norris,

Cheryl A. LaFleur, and Tony Clark.

Integration of Variable Energy Resources Docket No. RM10-11-002

ORDER NO. 764-B

ORDER ON CLARIFICATION AND REHEARING

(Issued September 19, 2013)

I. Introduction

1. On June 22, 2012, the Commission issued the Integration of Variable Energy 

Resources Final Rule,1 requiring each public utility transmission provider to: (1) offer 

intra-hourly transmission scheduling at 15-minute intervals; and (2) incorporate 

provisions into the pro forma Large Generator Interconnection Agreement (LGIA) 

requiring interconnection customers whose generating facilities are variable energy 

resources (VER)2 to provide meteorological and forced outage data to the public utility 

transmission provider for the purpose of power production forecasting. The Commission 

also provided guidance regarding the development and evaluation of proposals related to 

recovering the costs of regulation reserves associated with VER integration. 3

 On 

December 20, 2012, the Commission issued Order No. 764-A, largely affirming the 

reforms adopted in Order No. 764. Here, the Commission grants in part and denies in 

part the requests for clarification and denies the requests for rehearing of the 

Commission’s determinations in Order No. 764-A.

 1 Integration of Variable Energy Resources, Order No. 764, FERC Stats. & Regs. 

¶ 31,331, order on reh’g, Order No. 764-A, 141 FERC ¶ 61,232 (2012).

2 Order No. 764 defined a VER as a device for the production of electricity that is 

characterized by an energy source that: (1) is renewable; (2) cannot be stored by the 

facility owner or operator; and (3) has variability that is beyond the control of the facility 

owner or operator.

3 Order No. 764, FERC Stats. & Regs. ¶ 31,331 at P 4.
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II. Requests for Clarification and/or Rehearing

2. Iberdrola Renewables, LLC (Iberdrola), and Powerex Corporation (Powerex)

sought clarification and/or rehearing of Order No. 764-A. Bonneville Power 

Administration (Bonneville) filed an answer in response to the requests for clarification

and/or rehearing.

III. Discussion

3. Rule 713(d) of the Commission’s Rules of Practice and Procedure, 18 C.F.R. 

§ 385.713(d) (2013) prohibits answers to requests for rehearing. Accordingly, we reject 

Bonneville’s answer.

A. E-Tagging and Transmission Curtailment

1. Order No. 764-A

4. Following the issuance of Order No. 764, Powerex submitted a request for 

clarification and/or rehearing, requesting that the Commission clarify that transmission 

customer transactions must be properly e-Tagged to ensure that sink balancing authorities 

are fully aware of the firmness of energy that they are receiving and whether they should 

procure additional reserves to back particular schedules. In Order No. 764-A, the 

Commission found Powerex’s concerns about e-Tagging to be beyond the scope of the 

proceeding. 

5. The Commission also found that Powerex’s concern appeared to be “based 

primarily on the firmness of the energy that is scheduled by the e-Tag and not on the 

firmness of the transmission service.”4

 The Commission noted that e-Tags only reflect 

the firmness of transmission service priorities that transmission customers reserved prior 

to scheduling; they do not reflect the firmness of energy.

6. Finally, the Commission responded to concerns expressed about a transmission 

provider’s obligation to provide transmission service when balancing reserves were 

limited or insufficient. The Commission affirmed its Order No. 890-A policy that a 

transmission provider must attempt to procure sufficient reserves, and may after 

exhausting all other options (e.g., procure alternative balancing resources, allow dynamic 

transmission scheduling) limit transmission service on a not unduly discriminatory basis.5

 

The Commission also stated that, “[w]hile Order No. 764 allows public utility 

 4 Order No. 764-A, 141 FERC ¶ 61,232 at P 97.

5 Id. P 93.
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transmission providers to require different customers to purchase or otherwise account 

for different amounts of regulating reserves, such distinctions must be reasonable and 

well-supported.”6

 

2. Requests for Clarification and/or Rehearing

7. Powerex seeks clarification that “when a transmission provider seeks to curtail 

transmission customer schedules because the transmission provider does not have 

sufficient reserve capacity, such curtailments should apply to all schedules where the 

transmission customers are over-scheduling relative to generation output, rather than 

curtail any schedules that may provide generation imbalance relief.”

7

 Powerex believes

that this is consistent with the requirement that a transmission provider be nondiscriminatory with respect to transactions that effectively relieve the constraint. 

Powerex reasons that a transmission provider should not curtail customers that are 

scheduling accurately and/or are currently under-scheduled relative to output, because 

doing so would result in the loss of the transmission customer’s excess generation that

may mitigate the reserve deficiency that the transmission provider is experiencing. To 

the extent that a curtailment occurs because the transmission provider has insufficient 

reserve capacity, Powerex argues that the Commission should confirm that transmission

customers that are wheeling power through the transmission provider’s balancing 

authority area and are not taking generator imbalance service should not have their 

transmission schedules curtailed. Powerex submits that these customers would not affect

the transmission provider’s available reserves, such that curtailment of these schedules 

would disrupt power flows on the grid without any benefit.

8. Powerex also requests that the Commission clarify its statement that “[e]-Tags 

only reflect the firmness of transmission service priorities that transmission customers 

reserved prior to scheduling; they do not reflect the firmness of energy.”8 Powerex 

asserts that this statement is not accurate in the Western Interconnection where the 

Western Electricity Coordinating Council’s (WECC) Regional Business Practice INT018-WECC-CRT-1 specifies E-Tag Energy Product Codes specific to WECC. Powerex 

 6 Id. P 94.

7 Powerex Request for Clarification or, in the Alternative, Rehearing at 3 

(Powerex).

8 Id. at 4 (citing Integration of Variable Energy Resources, Order No. 764-A, 

141 FERC ¶ 61,232 at P 97).
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submits that this business practice requires that e-Tag authors within the Western 

Interconnection utilize and specify generation product codes on e-Tags.9

 

9. Powerex explains that some transmission providers’ Business Practices refer to 

product codes and their use in relation to energy that is sourced from, or sinks in, their 

balancing authority area. Powerex further states that the North American Energy 

Standards Board (NAESB) has promulgated E-Tagging Functional Specifications that 

require the generation segment of an e-Tag to describe the firmness of energy being 

supplied in a particular transaction.10 According to Powerex, entities must enter a 

generation product code on an e-Tag in order for that e-Tag to be validated by a 

balancing authority. For these reasons, Powerex is concerned that the Commission’s 

statement that e-Tags do not reflect the firmness of energy could be misinterpreted to 

undermine WECC’s regional business practice requirements, NAESB specifications, and 

transmission providers’ Business Practices. Therefore, Powerex requests that the 

Commission clarify its statement that e-Tags do not reflect the firmness of energy. To 

the extent the Commission declines to provide this clarification, Powerex requests

rehearing as the Commission’s statement is not supported by substantial evidence. 

3. Commission Determination

10. The Commission grants in part and denies in part the request for clarification and 

denies the request for rehearing. In Order No. 764-A, the Commission reaffirmed that 

under the pro forma OATT, “curtailments are required to be made on a nondiscriminatory basis to the transaction(s) that effectively relieve the constraint and to 

network customers and transmission customers taking firm point-to-point transmission 

service on a basis comparable to the curtailment of service to the transmission provider’s 

native load customers.”11 We deny Powerex’s request for clarification that “when a 

transmission provider seeks to curtail transmission customer schedules because the 

transmission provider does not have sufficient reserve capacity, such curtailments should 

apply to all schedules where the transmission customers are over-scheduling relative to

generation output, rather than curtail any schedules that may provide generation 

imbalance relief,”12 as beyond the scope of this proceeding. Order No. 764-A did not 

 9 Powerex states that the use of these generation product codes is not a North 

American Electric Reliability Corporation (NERC) requirement.

10 Powerex at 4.

11 Order No. 764-A, 141 FERC ¶ 61,232 at P 94.

12 Powerex at 3.
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address the specific application of curtailments, but rather reiterated the requirement that 

the transmission provider exhaust all other options before curtailing service on a not 

unduly discriminatory basis, so that Powerex’s requested clarification is not properly 

before the Commission in this proceeding.13 Similarly, we find that Powerex’s request 

that we confirm that transmission customers that are wheeling power through the 

transmission provider’s balancing authority area and are not taking generator imbalance 

service should not have their transmission schedules curtailed, is beyond the scope of this 

proceeding. In response to Powerex’s request that we clarify our statement that e-Tags 

only reflect the firmness of transmission service priorities and do not reflect the firmness 

of energy, we acknowledge that, contrary to the Commission’s statement in Order No. 

764-A, under some regional practices information reflecting the firmness of energy, in 

addition to the typical e-Tag data reflecting the firmness of the transmission, may be

included in an e-Tag. Therefore, the Commission’s statement in Order No. 764-A should 

not be read to require any change to regional e-Tag practices. 

B. Specific Transmission Curtailment Practices

1. Order No. 764-A

11. On rehearing of Order No. 764, Powerex raised concerns regarding curtailment of

energy e-Tagged as firm. In Order No. 764-A, the Commission found Powerex’s 

concerns regarding e-Tagging to be beyond the scope of Order No. 764. Specifically, the 

Commission noted that Powerex’s concern appears to be specific to power being 

exported from Bonneville’s system and the extent to which Bonneville’s curtailment 

practices pursuant to Dispatcher Standing Order 216 (DSO 216) render certain 

transactions sufficiently “firm.”14 The Commission found Powerex’s concern regarding 

the importance of e-Tagging energy as firm or non-firm to be “more of a commercial 

matter between the buyer and the seller of power being exported from Bonneville’s 

system.”15 The Commission also noted that to the extent power is being exported from 

Bonneville’s system, customers and neighboring balancing authorities are aware that 

Bonneville has implemented DSO 216 and that export transactions are subject to 

curtailment. Thus, the Commission found that it is up to these customers to decide 

whether such transactions can be marketed as “firm.” 

 13 Order No. 764-A, 141 FERC ¶ 61,232 at P 93.

14 Id. P 96.

15 Id. 
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12. The Commission further noted that while certain events (e.g., a forced outage or 

a curtailment pursuant to DSO 216) could interrupt the flow of energy scheduled by an 

e-Tag, the underlying nature of transmission service does not change. Finally, the 

Commission found that in terms of reliability, “transmission providers still have the 

authority to alleviate capacity and energy emergencies according to applicable reliability 

standards.”

16

2. Requests for Clarification and/or Rehearing

13. Powerex and Iberdrola both seek clarification of the Commission’s statement that 

“Powerex’s concern is more of a commercial matter between the buyer and the seller of 

power being exported from Bonneville’s system.”17 Powerex concurs with the 

Commission that the question of whether exports from the Bonneville balancing authority 

that are subject to DSO 216 may be marketed as firm or non-firm energy is a commercial 

matter. However, Powerex seeks clarification that the Commission did not intend to 

imply that the firmness of energy transactions, as specified on e-Tags, does not also have 

important reliability implications, particularly in some regions. Powerex explains that in 

the Western Interconnection, sink balancing authorities are responsible for ensuring 

adequate reserves to serve firm loads and sellers may deliver a variety of generation 

products. Thus, Powerex contends that it is critical for the sink balancing authority to 

know with certainty whether power being imported into its balancing authority area and

reported on the e-Tag as firm can be relied upon to meet firm load. Powerex does not

believe the Commission intended to imply that generation product designations on e-Tags 

may not also have reliability, in addition to commercial, implications in some regions. 

Therefore, Powerex requests that the Commission make this clarification.

18

14. Iberdrola also seeks clarification of the Commission’s statement that while certain 

events, including DSO 216, “could interrupt the flow of energy scheduled by an e-Tag,

that does not change the underlying nature of the transmission service.”

19 Specifically, 

 16 Id. P 97 (see, e.g., EOP-002-3.1 Capacity and Energy Emergencies (authorizing 

balancing authorities and reliability coordinator to take whatever actions are needed to 

ensure the reliability of their respective areas and to alleviate capacity and energy 

emergencies)).

17 Powerex at 5 (citing Order No. 764-A, 141 FERC ¶ 61,232 at P 96); Iberdrola 

Request for Clarification or, in the Alternative, Rehearing at 5 (Iberdrola).

18 Powerex at 6.

19 Iberdrola at 5 (citing Integration of Variable Energy Resources, Order 

No. 764-A, 141 FERC ¶ 61,232 at P 97).
Docket No. RM10-11-002 - 7 -

Iberdrola seeks clarification that transmission provider policies, such as DSO 216, do 

not change or diminish the firmness of the underlying transmission service, and any 

curtailment of such transmission service must be done in accordance with the 

aforementioned Commission policies. Iberdrola asserts that this clarification is necessary 

to avoid suggesting that generation curtailment mechanisms have no impact on, and are

entirely separate from, transmission service.

15. Iberdrola contends that in Order No. 764-A, the Commission compared the

firmness of transmission service and the firmness of the energy that may utilize that 

transmission service to explain that the curtailment of energy, unlike transmission, was 

not before the Commission in that proceeding. However, because the Commission 

referred to Bonneville’s curtailment practices, specifically DSO 216, a wind-only 

curtailment protocol, Iberdrola seeks clarification that the Commission did not intend to 

make a substantive determination regarding DSO 216.20 Iberdrola seeks clarification that 

the Commission was not commenting on the appropriateness or lawfulness of DSO 216. 

Iberdrola contends that generation curtailments and transmission curtailments must be for 

reliability purposes, and must be comparable and not unduly discriminatory.21 If the 

Commission’s reference to DSO 216 was intended to endorse or approve the use of DSO 

216, or was intended to hold that DSO 216 is a generation displacement mechanism that 

does not cause non-comparable or unduly discriminatory transmission curtailments, 

Iberdrola requests rehearing, arguing that DSO 216 was beyond the scope of the 

proceeding.

22

3. Commission Determination

16. Powerex and Iberdrola seek clarification, for different reasons, of the 

Commission’s statement that “Powerex’s concern is more of a commercial matter 

between the buyer and the seller of power being exported from Bonneville’s system.” 23

We clarify, in response to Iberdrola’s request, that the Commission was not commenting 

on the appropriateness or lawfulness of DSO 216. We grant Iberdrola’s requested 

clarification that the Commission’s discussion in Order No. 764-A, contrasting the 

firmness of transmission service with the firmness energy, was illustrative and in no way 

a substantive determination about the appropriateness or lawfulness of DSO 216. Upon 

providing this clarification, we find that Iberdrola’s request for rehearing is moot. 

 20 Id. at 4.

21 Id. at 6.

22 See id. at 4, 8.

23 Order No. 764-A, 141 FERC ¶ 61,232 at P 96.
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17. In response to Powerex’s request for clarification that the marketing of energy 

as firm or non-firm also has important reliability implications, we acknowledge that a

balancing authority area considers many issues, potentially including the firmness of 

energy being imported into the balancing authority area, in determining how best to

adhere to all applicable NERC Reliability Standards. That said, Order No. 764-A does 

not specify what information is to be included on an e-Tag or the method used by a sink 

balancing authority to identify the firmness of energy being imported into its system, 

whether through e-Tag energy product codes or other means. 

18. Iberdrola requests clarification that transmission provider policies should not 

change or diminish the firmness of the underlying transmission service, and any 

curtailment of such transmission service must be done in accordance with the 

Commission policies. As a general matter, curtailment of transmission service by public 

utility transmission providers must be done in accordance with Commission policies. 

Furthermore, we grant clarification that although certain events could interrupt the flow 

of energy scheduled by an e-Tag, that does not change or diminish the firmness of the 

underlying transmission service.

The Commission orders:

(A) The requests for clarification are granted in part and denied in part, as 

discussed in the body of this order.

(B) The requests for rehearing are denied, as discussed in the body of this 

order. 

By the Commission.

( S E A L )

Kimberly D. Bose,

 Secretary.