123 FERC ¶ 61,299 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 37 

(Docket Nos. RM05-17-003 and RM05-25-003; Order No. 890-B) 

Preventing Undue Discrimination and Preference in Transmission Service 

(Issued June 23, 2008) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Order on Rehearing and Clarification. 

SUMMARY: The Federal Energy Regulatory Commission affirms its basic 

determinations in Order Nos. 890 and 890-A, granting rehearing and clarification 

regarding certain revisions to its regulations and the pro forma open-access transmission 

tariff, or OATT, adopted in Order Nos. 888 and 889 to ensure that transmission services 

are provided on a basis that is just, reasonable, and not unduly discriminatory. The 

reforms affirmed in this order are designed to: (1) strengthen the pro forma OATT to 

ensure that it achieves its original purpose of remedying undue discrimination; 

(2) provide greater specificity to reduce opportunities for undue discrimination and 

facilitate the Commission’s enforcement; and (3) increase transparency in the rules 

applicable to planning and use of the transmission system. 

EFFECTIVE DATE: This rule will become effective [Insert_Date 60 days after 

publication in the FEDERAL REGISTER]
Docket Nos. RM05-17-003 and RM05-25-003 - 2 -

FOR FURTHER INFORMATION CONTACT: 

W. Mason Emnett (Legal Information) 

Office of the General Counsel – Energy Markets 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6540 

Daniel Hedberg (Technical Information) 

Office of Energy Market Regulation 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6243 

SUPPLEMENTARY INFORMATION:
TABLE OF CONTENTS

 Paragraph Numbers

I. INTRODUCTION........................................................................................................ 1.

II. REFORMS OF THE OATT ..................................................................................... 7.

A. Consistency and Transparency of ATC Calculations ............................................. 7.

1. Consistency........................................................................................................... 8.

2. Transparency....................................................................................................... 25.

B. Transmission Pricing.............................................................................................. 38.

1. Energy and Generation Imbalances ................................................................... 38.

2. Credits for Network Customers ......................................................................... 46.

3. Capacity Reassignment ...................................................................................... 68.

4. Operational Penalties ......................................................................................... 87.

5. “Higher Of” Pricing Policy .............................................................................. 102.

6. Other Ancillary Services ................................................................................. 109.

C. Non-Rate Terms and Conditions.......................................................................... 116.

1. Modifications to Long-Term Firm Point-to-Point Service............................... 116.

2. Rollover Rights................................................................................................. 141.

3. Acquisition of Transmission Service................................................................ 155.

4. Designation of Network Resources .................................................................. 162.

5. Clarifications Related to Network Service ....................................................... 216.

6. OATT Definitions............................................................................................. 220.

III. INFORMATION COLLECTION STATEMENT ............................................ 250.

IV. DOCUMENT AVAILABILITY .......................................................................... 251.

V. EFFECTIVE DATE AND CONGRESSIONAL NOTIFICATION .................. 254.

APPENDIX A: Petitioners’ Acronyms 

APPENDIX B: Pro Forma Open Access Transmission Tariff 
123 FERC ¶ 61,299 

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. 

Preventing Undue Discrimination and Preference in 

Transmission Service 

 Docket Nos. RM05-17-003 

RM05-25-003 

ORDER NO. 890-B 

ORDER ON REHEARING AND CLARIFICATION 

(Issued June 23, 2008)

I. Introduction

1. On February 16, 2007, the Commission issued Order No. 890,1

 addressing and 

remedying opportunities for undue discrimination under the pro forma Open Access 

Transmission Tariff (OATT) adopted in Order No. 888.2

 The pro forma OATT was 

intended to foster greater competition in wholesale power markets by reducing barriers to 

 1

 Preventing Undue Discrimination and Preference in Transmission Service, Order 

No. 890, 72 FR 12,266 (March 15, 2007), FERC Stats. & Regs. ¶ 31,241 (2007) (Order 

No. 890), order on reh’g, Order No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & 

Regs. ¶ 31,261 (2007) (Order No. 890-A). 

2

 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, 61 FR 21540 (May 10, 1996), FERC Stats. & 

Regs. ¶ 31,036 (1996), order on reh’g, Order No. 888-A, 62 FR 12274 (Mar. 14, 1997), 

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) (TAPS v. FERC), aff’d sub nom. New York v. FERC, 535 U.S. 1 

(2002). 
Docket Nos. RM05-17-003 and RM05-25-003 - 2 - 

entry in the provision of transmission service. In the ten years since Order No. 888, 

however, flaws in the pro forma OATT undermined its ability to realize the core 

objective of remedying undue discrimination. The Commission acted in Order No. 890 

to correct these flaws by reforming the terms and conditions of the pro forma OATT in 

several critical areas, including the calculation of available transfer capability (ATC), the 

planning of transmission facilities, and the conditions of services offered by each 

transmission provider. 

2. In Order No. 890-A, the Commission largely affirmed the reforms adopted in 

Order No. 890. The Commission noted that work was well underway to develop 

consistent practices governing the calculation of ATC in coordination with the North 

American Electric Reliability Corporation (NERC) and the North American Energy 

Standards Board (NAESB). When complete, the reliability standards developed through 

NERC and the business practices developed through NAESB will eliminate the broad 

discretion that transmission providers have in calculating ATC, increasing 

nondiscriminatory access to the grid and ensuring that customers are treated fairly in 

seeking alternative power supplies. 

3. The Commission also noted the substantial resources that transmission providers 

have dedicated to the development of transmission planning processes in response to 

Order No. 890. Transmission planning is critical because it is the means by which 

customers consider and access new sources of energy and have an opportunity to explore 

the feasibility of non-transmission alternatives. It is therefore vital for each transmission 

provider to open its transmission planning process to customers, coordinate with 
Docket Nos. RM05-17-003 and RM05-25-003 - 3 - 

customers regarding future system plans, and share necessary planning information with 

customers. 

4. In addition, transmission providers have implemented new service options for 

long-term firm point-to-point customers and adopted modifications to other services. 

Instead of denying a long-term request for point-to-point service because as little as one 

hour of service is unavailable, transmission providers now consider their ability to offer a 

modified form of planning redispatch or a new conditional firm option to accommodate 

the request. This increases opportunities to efficiently utilize transmission by eliminating 

artificial barriers to use of the grid. Charges for energy and generation imbalances also 

have been standardized, including relaxed penalties for intermittent resources. This 

standardization reduces the potential for undue discrimination, increases transparency, 

and reduces confusion in the industry that resulted from the prior lack of consistency. 

5. The Commission concluded that, taken together, these and other reforms adopted 

in Order No. 890 will better enable the pro forma OATT to achieve the core objective of 

remedying undue discrimination in the provision of transmission service. The 

Commission therefore rejected requests to eliminate, or substantially modify, the various 

reforms adopted in Order No. 890. The Commission did, however, grant rehearing and 

clarification regarding certain revisions to its regulations and the pro forma OATT. 
Docket Nos. RM05-17-003 and RM05-25-003 - 4 - 

Several petitioners have sought further rehearing and clarification of the Commission’s 

determinations in Order No. 890-A.3

 

6. The Commission largely affirms the determinations reached in Order No. 890-A, 

granting limited rehearing and clarification to address certain specific matters raised by 

petitioners. Revisions to the pro forma OATT are required to implement several of these 

determinations, although none disturb the fundamental nature of the reforms adopted in 

Order No. 890. We therefore do not anticipate any difficulty in their implementation or 

disruption in on-going compliance efforts. We direct transmission providers that have 

not been approved as RTOs or ISOs, and whose facilities are not in the footprint of an 

RTO or ISO, to submit an Federal Power Act (FPA) section 206 filing that contains the 

revised non-rate terms and conditions of the pro forma OATT stated in Appendix B 

within 60 days of publication of this order in the Federal Register. We direct RTO and 

ISO transmission providers, transmission providers whose facilities are in the footprint of 

an RTO or ISO, and WSPP to submit an FPA section 206 filing that contains the revised 

non-rate terms and conditions of the pro forma OATT as stated in Appendix B within 90 

days of publication of this order in the Federal Register. 

 3

 A list of petitioners filing requests for rehearing and/or clarification is provided 

in Appendix A. 
Docket Nos. RM05-17-003 and RM05-25-003 - 5 - 

II. Reforms of the OATT 

A. Consistency and Transparency of ATC Calculations 

7. In Order No. 890-A, the Commission affirmed its conclusion in Order No. 890 

that the lack of consistency and transparency in the methodology for calculating ATC 

creates the potential for undue discrimination in the provision of open access 

transmission service. To remedy this lack of consistency and transparency, the 

Commission directed public utilities, working through the NERC reliability standards and 

NAESB business practices development processes, to produce workable solutions to 

implement ATC-related reforms adopted by the Commission. A number of petitioners 

seek rehearing and/or clarification regarding the Commission’s ATC-related 

determinations in Order No. 890-A, which we address below. 

1. Consistency

a. Necessary Degree of and Process to Achieve Consistency

8. The Commission affirmed the decision in Order No. 890 to require consistency of 

all ATC components4

 and certain definitions, data inputs, data exchange, and modeling 

assumptions in order to reduce the potential for undue discrimination in the provision of 

transmission service. In response to petitioner requests, the Commission clarified that 

adjacent transmission providers must coordinate and exchange data and assumptions to 

achieve consistent ATC values on either side of a single interface, regardless of whether 

 4

 The ATC components are total transfer capability (TTC), existing transmission 

commitments (ETC), capacity benefit margin (CBM), and transmission reserve margin 

(TRM). 
Docket Nos. RM05-17-003 and RM05-25-003 - 6 - 

they use the same or different ATC methodologies. The Commission also reiterated that 

its regulations require the posting of ATC values associated with a particular path, not 

available flowgate capacity (AFC) values associated with a flowgate. The Commission 

clarified, however, that a transmission provider is free to post both ATC and AFC values. 

The Commission further clarified that transmission-owning utilities in an RTO region can 

request waiver of the requirement to convert AFC calculations into ATC for posting 

purposes in the event the RTO has been granted such a waiver. 

Requests for Rehearing and Clarification

9. Duke, EEI, and E.ON U.S. object to the requirement that ATC values be 

consistent on either side of an interface and suggest alternatively that transmission 

providers be required to achieve consistent TTC values on either side of the interface. 

Duke contends that achieving consistency in TTC values will not necessary result in 

consistent ATC values. EEI agrees, arguing that ATC will be identical on both sides of 

an interface only in the unlikely event that the transmission providers each 

simultaneously receive and process corresponding transmission requests and schedules 

for the same type of product. EEI contends that transmission providers therefore will 

have to expend substantial effort and resources to constantly monitor and investigate 

differences in ATC values, the burden of which EEI argues outweighs any benefit 

realized. 

10. Joined by E.ON U.S., Southern suggests that the Commission clarify that 

“consistent ATC values” does not mean that ATC or TTC values on either side of an 

interface must be identical. Southern argues that interpreting “consistent” to mean 
Docket Nos. RM05-17-003 and RM05-25-003 - 7 - 

“identical” would be contrary to reliable planning and not reasonably achievable. 

Southern contends that there are a number of reasons why adjacent transmission 

providers may have varying ATC and TTC values on an interface, including partial path 

transmission service, CBM and TRM, and the impacts of multiple interfaces. 

11. EEI and E.ON U.S. also request the Commission clarify that the process of 

achieving consistency of TTC values should occur through the ongoing NERC and 

NAESB processes. They argue that the Commission in Order No. 890 only required the 

consistency of components, definitions, data and assumptions with respect to ATC and its 

components, including TTC. They contend that the Commission did not require 

consistency in ATC values or provide for a means to reconcile differences in ATC 

calculations performed by multiple transmission providers. EEI and E.ON U.S. suggest 

that it may take additional time for NERC and NAESB to develop standards and business 

practices to achieve consistency in TTC values or reconcile differences between ATC 

values at common interfaces. Duke requests confirmation that compliance with the 

NERC and NAESB methodologies regarding TTC and related calculations, once they 

have been adopted and implemented, is sufficient to comply with the consistency 

requirement imposed in Order No. 890-A. 

12. Entergy requests the Commission to clarify that Order No. 890-A was not 

intended to reverse the Commission’s prior determination that Entergy and other 

transmission providers can rely on the scenario analyzer to satisfy the ATC posting 
Docket Nos. RM05-17-003 and RM05-25-003 - 8 - 

requirements in part 37 of the Commission’s regulations.5

 Although Entergy uses an 

AFC methodology, it posts ATC values on a path-specific basis by providing 

transmission customers a scenario analyzer tool that allows them to instantaneously 

evaluate transfer capability on a source-to-sink basis. Entergy states that its scenario 

analyzer is also relied on by other transmission providers, such as the Southwest Power 

Pool, Inc. and the Midwest Independent Transmission System Operator, Inc. Entergy 

states that the scenario analyzer will notify the customer the proposed request could be 

approved if sufficient AFC exists. 

13. Entergy notes that the Commission has previously concluded that “Entergy’s AFC 

methodology meets the established minimum posting requirements for transmission 

capability set forth in Order No. 889,”6

 which Entergy argues were not changed in Order 

Nos. 890 or 890-A. If the Commission intended in Order No. 890-A to modify the 

requirements for posting ATC, or reverse its determination that the scenario analyzer 

complies with the posting requirements, Entergy requests clarification regarding what 

specific actions are required of transmission providers that rely on the AFC process. 

Entergy also asks that those transmission providers be allowed to continue using the 

scenario analyzer until those measures are in place. Entergy states that the sole purpose 

of the scenario analyzer has been to comply with the Commission’s posting requirements 

 5

 Citing Entergy Servs., Inc., 106 FERC ¶ 61,115 (2004); 18 CFR 37.6(b)(2)(i) 

(2007). 

6

 See Entergy Servs., Inc., 106 FERC ¶ 61,115 at P 50. 
Docket Nos. RM05-17-003 and RM05-25-003 - 9 - 

and that transmission providers should not be required to maintain two different and 

duplicative systems for meeting those requirements. 

14. E.ON U.S. requests clarification that all transmission-owning utilities within an 

RTO region can request waiver of the requirement to convert AFC calculations into ATC 

for posting purposes in the event the RTO has been granted such a waiver, and not just 

transmission-owning utilities that are members of the RTO. E.ON U.S. states that many 

of its neighboring systems utilize AFC instead of ATC, requiring it to calculate AFC in 

order to transact with the adjacent RTO members, to alleviate seams issues with these 

neighboring systems, and increase transparency for across the border transactions. E.ON 

U.S. contends that AFC calculations are much more accurate means to determine if 

capacity is available on a flowgate than are ATC calculations. If the Commission 

declines to grant the requested clarification, E.ON U.S. seeks rehearing on the grounds 

that the Commission is creating new seams where they do not currently exist by requiring 

transmission capacity to be calculated differently on both sides of the border for such 

transactions. 

Commission Determination

15. The Commission affirms the clarification provided in Order No. 890-A that 

adjacent transmission providers must coordinate and exchange data and assumptions to 

achieve consistent ATC values on either side of a single interface.7

 We disagree with 

petitioners arguing that “consistent” ATC values should not be interpreted as identical. 

 7

 See Order No. 890-A at P 52. 
Docket Nos. RM05-17-003 and RM05-25-003 - 10 - 

We recognize that factors such as timing of reservation requests, acceptances, and 

confirmations, and multiple interfaces between and among transmission providers, can 

make it difficult to achieve coincidental, identical postings of ATC values on both sides 

of an interface. However, as the Commission explained in Order No. 890, if all of the 

ATC components and certain data inputs and assumptions are consistent, the ATC 

calculation methodologies being finalized by NERC through the reliability standards 

development process should produce predictable and sufficiently accurate, consistent, 

equivalent, and replicable results.8

 We therefore disagree that the directive to coordinate 

and exchange data and assumptions to achieve consistent ATC values on either side of an 

interface was newly imposed in Order No. 890-A. The Commission simply clarified that 

the requirement stated in Order No. 890 applies equally to calculations of ATC on either 

side of an interface. 

16. Public utilities have already been directed to work through the NERC and NAESB 

processes to achieve such consistency in ATC and TTC values. In response to Duke, the 

Commission will address whether the resulting reliability standards and business 

practices adequately satisfy this consistency requirement on review of those reliability 

standards and business practices. We note that public utilities were recently granted an 

extension of time to finalize their work through the NERC and NAESB processes. In 

Order No. 890, the Commission directed each transmission provider to file a revised 

Attachment C to its OATT to incorporate any changes associated with the revised 

 8

 See Order No. 890 at P 210. 
Docket Nos. RM05-17-003 and RM05-25-003 - 11 - 

reliability standards and business practices within 60 days of completion of the NERC 

and NAESB processes. We clarify that these revised Attachment C filings are due 60 

days after the date on which the relevant reliability standards or business practices takes 

effect, not their submission for Commission review. 

17. We grant the clarification requested by Entergy regarding the Commission’s 

February 11, 2004 determination that Entergy’s AFC methodology meets the minimum 

posting requirements for transmission capability set forth in Order No. 889.9

 The 

Commission did not amend in Order Nos. 890 or 890-A the obligation for transmission 

providers to post ATC values associated with a particular path instead of AFC values 

associated with a flowgate.10 Prior determinations by the Commission that a particular 

practice satisfies that obligation, or waiving that obligation altogether, therefore remain 

intact.11 

18. We disagree with E.ON U.S. that non-member transmission-owning utilities 

within an RTO region are similarly situated to member transmission-owning utilities, 

which the Commission noted in Order No. 890-A may request waiver of the requirement 

to convert AFC calculations into ATC for posting purposes in the event the RTO has 

been granted such a waiver. RTO members that have retained control over certain 

 9

 See Entergy Servs., Inc., 106 FERC ¶ 61,115 at P 50. 

10 See 18 CFR 37.6(b)(1)(i); see also Order No. 890 at P 211; Order No. 890-A at 

P 51. 

11 See Order No. 890-A at P 36. 
Docket Nos. RM05-17-003 and RM05-25-003 - 12 - 

transmission facilities operate those transmission facilities in coordination with the RTO. 

In comparison, non-RTO members provide transmission service independently and, 

therefore, for purposes of ATC calculation are similar to a transmission provider outside 

the RTO region. Nevertheless, we reiterate that a transmission provider is free to post 

both ATC and AFC values if it believes such postings provide additional transparency.12 

b. ATC Components – CBM and TRM

19. In Order No. 890-A, the Commission affirmed the decision in Order No. 890 to 

require public utilities, working through NERC and NAESB, to develop clear standards 

and business practices for how the CBM value is determined, allocated across 

transmission paths and flowgates, and used. The Commission also affirmed the 

requirement that transmission providers design their transmission charges so that the 

class of customers not benefiting from the CBM set-aside, i.e., point-to-point customers, 

does not pay a transmission charge that includes the cost of the CBM set-aside. The 

Commission explained that only network customers and the transmission provider on 

behalf of its native load may request that transmission capacity be set aside as CBM and, 

therefore, only those users of the system should bear its costs. The Commission also 

rejected requests to use CBM for reserve-sharing arrangements, reiterating that TRM is 

the appropriate category for reserve-sharing. 

 12 See Order No. 890-A at P 51. 
Docket Nos. RM05-17-003 and RM05-25-003 - 13 - 

Requests for Rehearing and Clarification

20. Southern requests rehearing of the Commission’s statement that non-firm point-topoint transmission customers only receive an indirect benefit from CBM. Southern 

contends that under normal conditions without generation deficiencies, non-firm point-topoint customers may use CBM set-aside capacity. Southern states that it has not called 

upon CBM to meet a generation deficit emergency in six years, resulting in that capacity 

consistently being made available to non-firm customers. Southern argues that non-firm 

customers therefore directly benefit from CBM and should bear transmission charges that 

include the cost of the capacity they are actually utilizing. If the Commission does not 

wish to make a generic determination, Southern asks the Commission to clarify that the 

issue of whether non-firm customers benefit from CBM will be addressed on a case-bycase basis. 

21. TDU Systems request clarification of the Commission’s statement in Order No. 

890-A that TRM is the appropriate category for reserve sharing arrangements. TDU 

Systems request confirmation that, if a transmission provider is using another form of setaside for reserve sharing purposes, such as CBM, the transmission providers’ customers 

are entitled to comparable use of the form of set-aside. TDU Systems argue that 

comparability cannot be achieved where the transmission provider does not offer use of 

transmission capacity set-asides to LSE customers comparable to the use that the 

transmission provider allows itself. 
Docket Nos. RM05-17-003 and RM05-25-003 - 14 - 

Commission Determination

22. The Commission affirms the requirement adopted in Order No. 890, and affirmed 

in Order No. 890-A, that transmission providers design their transmission charges so that 

the class of customers not benefiting from the CBM set-aside, i.e., point-to-point 

customers, does not pay a transmission charge that includes the cost of the CBM setaside.13 We disagree with Southern that non-firm customers benefit directly from the 

CBM set-aside. The Commission acknowledged in Order No. 890-A that capacity set 

aside for CBM may be made available to non-firm customers when not otherwise in 

use.14 That benefit, however, is indirect and inferior to the direct benefits enjoyed by 

those entities that have the exclusive right to request the set-aside in the first instance. 

23. The Commission acknowledged in Order No. 890-A that use of capacity set aside 

for CBM by non-firm customers may result in revenues that are credited to the 

transmission provider’s cost of service, to the benefit of point-to-point customers.15 The 

Commission stated its expectation that transmission providers would address in rate 

design filings any possibility for particular customers to receive an inappropriate credit 

for non-firm use of capacity set aside for CBM. Further clarification is unnecessary. 

24. With regard to reserve sharing arrangements, the Commission clearly stated in 

Order No. 890-A that TRM is the appropriate category for reserve sharing arrangements 

 13 See Order No. 890 at P 263; Order No. 890-A at P 86. 

14 See Order No. 890-A at P 87. 

15 Id. 
Docket Nos. RM05-17-003 and RM05-25-003 - 15 - 

and that, in comparison, CBM is used to meet generation reliability criteria in times of 

emergency generation deficiencies.16 Therefore, transmission providers must use TRM, 

not CBM, for reserve sharing arrangements and make ATC set aside for that purpose 

available to all LSEs on a comparable basis for any reserve sharing arrangements they 

may have. 

2. Transparency

25. In Order No. 890-A, the Commission clarified that all data used to calculate ATC 

and TTC for any constrained paths and any system planning studies or specific network 

impact studies performed for customers are to be made available on request, regardless of 

whether the customer is non-affiliated or affiliated with the transmission provider. The 

Commission also clarified that underlying load forecast assumptions to be posted on 

OASIS should include economic and weather-related assumptions. The Commission 

concluded that posting load forecast and actual load data on a control area and LSE level 

does not raise serious competitive implications. The Commission stated that it would 

consider requests for exemption from this posting requirement on a case-by-case basis if 

there is customer-specific information deemed confidential by the affected customer that 

impedes the ability of the transmission provider to post this data.17

26. The Commission further clarified that transmission providers must make available, 

upon request and subject to appropriate confidentiality protections and CEII 

 16 Id. P 85 

17 Id. P 143. 
Docket Nos. RM05-17-003 and RM05-25-003 - 16 - 

requirements, certain modeling data including load flow base cases and generation 

dispatch methodology and, subject to additional reasonable and applicable generator 

confidentiality limitations, production cost models (including assumptions, settings, study 

results, input data, etc.). The Commission declined to require transmission providers to 

post this information on OASIS. 

Requests for Rehearing and Clarification

27. Duke seeks clarification of the requirement to post information requested by an 

affiliate when that information is already available to the public. Duke suggests that only 

a notice that an affiliate requested a publicly-available study needs to be posted, and not 

the actual study, because the additional effort of posting the actual study would be 

redundant, burdensome, and without purpose. 

28. Duke, EEI and Southern request rehearing to eliminate the requirement to post the 

underlying assumptions used to develop load forecasts on a daily basis, including 

economic and weather-related assumptions. They claim that the requirement is a 

substantial modification of regulations adopted in Order No. 890, is unduly burdensome, 

and may cause transmission providers to violate their contractual obligations by releasing 

proprietary assumptions and forecasts obtained from forecasting service providers. 

Southern also complains that it is unclear what is meant by “economic assumptions” and 

any requirement to provide daily updates of such assumptions would be unduly 

burdensome given the amount of effort required and negligible benefit that customers 

might gain from the information. 
Docket Nos. RM05-17-003 and RM05-25-003 - 17 - 

29. Duke argues that the Commission’s expansion of posting requirements to include 

load forecast assumptions daily is an entirely new requirement for which notice and 

comment has not been provided. Duke contends that Constellation’s request for 

rehearing of Order No. 890 mentioning load forecast assumptions was inadequate to 

provide notice because Constellation did not request that load forecast assumptions be 

posted on a daily basis or that load forecast assumptions unrelated to ATC calculations be 

posted. 

30. If the Commission declines to eliminate this posting requirement, Duke suggests 

that it be amended to require a one-time (i.e., not daily) posting of a list of factors that go 

into the peak load forecast, such as day of the week, a day’s status as holiday or nonholiday, temperature, dew point, precipitation forecast, etc. If the Commission continues 

to require the daily posting of information, Duke seeks clarification regarding the 

granularity of such information given that it could vary widely over a control area. Duke 

questions whether, for example, PJM would have to post weather forecasts for each of its 

subregions. Until the Commission grants the requested clarification, Duke argues that the 

posting requirement should be waived or transmission providers should be permitted to 

satisfy the requirement by reference to commercial/government weather websites. 

31. Southern seeks clarification of the requirement to make available, on request, the 

modeling data identified in paragraph 148 of Order No. 890-A. Southern states that it 

does not use all of the specified modeling data to calculate ATC, TTC, CBM and/or 

TRM. In particular, Southern argues that neither production cost models nor special 

protection systems and operation guides are used in its ATC calculations and that 
Docket Nos. RM05-17-003 and RM05-25-003 - 18 - 

production cost models in particular are not even maintained by its transmission function 

given its highly sensitive nature. Southern asks the Commission to clarify that 

transmission providers are required to provide only the specified modeling data actually 

used in performing those calculations and that a transmission provider is not required to 

manufacture and/or produce the data in the event it does not use a particular input in its 

ATC calculations. 

32. Duke also argues that production cost models and generation dispatch 

methodologies typically contain commercially sensitive or proprietary information or 

information that should not be released to the public. Duke acknowledges that the 

Commission stated that availability of production cost models would be subject to 

reasonable and applicable generator confidentiality limitations,18 but argues that still 

would allow employees or consultants of competing entities to be provided access to 

sensitive data. Duke therefore asks the Commission to confirm that reasonable and 

applicable generator confidentiality limitations means that the proprietary/sensitive 

information may be released only to transmission function personnel that are restricted 

from further disclosure, including to their own merchant functions. Duke also requests 

clarification that the transmission provider’s merchant/generation function and thirdparties are to be treated identically as to their right to classify which information that they 

have given to a transmission provider is proprietary/sensitive, in accordance with 

Commission policies. 

 18 Citing Order No. 890-A at P 148. 
Docket Nos. RM05-17-003 and RM05-25-003 - 19 - 

Commission Determination

33. The Commission clarifies in response to Duke that, when an affiliate requests 

information that is already available to the public, the transmission provider need only 

post a notice that an affiliate requested the particular information, not the actual 

information. This clarification applies, however, only to those instances in which the 

actual information is already publicly available. 

34. We affirm the requirement that each transmission provider post on a daily basis its 

load forecast, including underlying assumptions, and actual daily peak load for the prior 

day.19 In the NOPR, the Commission specifically raised the possibility of requiring 

transmission providers to make available their underlying load forecast assumptions for 

all ATC calculations.20 The Commission adopted that proposal in Order No. 890, but 

failed to amend its regulations accordingly.21 The Commission corrected that oversight 

in Order No. 890-A.22 We therefore disagree with Duke that transmission providers were 

not on notice that posting of load forecast data and related assumptions might be 

required. 

35. We clarify, however, that the Commission intended for transmission providers to 

post the underlying factors used to make load forecasts that have a significant impact on 

 19 18 CFR 37.6(b)(3)(iv) (2007). 

20 See Preventing Undue Discrimination and Preference in Transmission Services, 

Notice of Proposed Rulemaking, FERC Stats. & Regs. ¶ 32,603, a P 194 (2006) (NOPR). 

21 See Order No. 890 at P 416. 

22 See Order No. 890-A at P 143. 
Docket Nos. RM05-17-003 and RM05-25-003 - 20 - 

calculations, such as temperature forecasts, not all economic and other data that underlies 

each and every daily load forecast. Transmission providers must post a description of 

their load forecast method including how economic and weather assumptions are used in 

load forecasting. The Commission’s intent is to increase transparency in the transmission 

provider’s process of forecasting, providing assurance to customers that loads are 

consistently being forecast using methodologies which are not subject to daily 

manipulation to favor affiliates. 

36. We also affirm the requirement to make available, upon request and subject to 

appropriate confidentiality protections and CEII requirements, certain modeling data 

including load flow base cases and generation dispatch methodology and, subject to 

additional reasonable and applicable generator confidentiality limitations, production cost 

models (including assumptions, settings, study results, input data, etc.).23 We clarify in 

response to Southern that a transmission provider is not required under Order Nos. 890 or 

890-A to manufacture or otherwise make available modeling data that it does not use in 

its ATC calculations. However, if the specified modeling data are used for the 

calculation of ATC, or any of its components, they must be made available as required in 

Order No. 890-A. 

37. We agree with Duke that production cost models and generation dispatch 

methodologies may contain commercially sensitive or proprietary information. 

Transmission providers are therefore permitted to condition the release of such 

 23 See Order No. 890-A at P 148. 
Docket Nos. RM05-17-003 and RM05-25-003 - 21 - 

information on appropriate confidentiality restrictions. With regard to production costs 

models, reasonable applicable generator confidentiality limitations could include, among 

other things, restrictions on the release of proprietary and commercially sensitive 

information to those engaged in the marketing, sale, or purchase of electric power at 

wholesale. We agree that the transmission provider's merchant and/or generation 

personnel and third-parties are to be treated identically as to their right to classify 

proprietary or commercially sensitive information that they provide to a transmission 

provider, as well as their right to receive such data from the transmission provider. 

B. Transmission Pricing

1. Energy and Generation Imbalances 

a. Generator Imbalance Penalties

38. In Order No. 890-A, the Commission affirmed the decision in Order No. 890 to 

adopt standardized generator imbalance provisions in Schedule 9 of the pro forma OATT. 

The Commission clarified that a transmission provider only has to provide generator 

imbalance service from its own resources to the extent that it is physically feasible to do 

so (i.e., the transmission provider is able to manage the additional potential imbalances 

without compromising reliability). Each transmission provider may state on its OASIS 

the maximum amount of generator imbalance service that it is able to offer from its 

resources based on an analysis of the physical characteristics of its system. Alternatively, 

a transmission provider may consider requests for generator imbalance service on a caseby-case basis, performing as necessary a system impact study to determine the precise 
Docket Nos. RM05-17-003 and RM05-25-003 - 22 - 

amount of additional generation it can accommodate and still reliably respond to the 

imbalances that could occur. 

39. The Commission clarified that neither of these options relieves the transmission 

provider of its obligation to provide generator imbalance service if it is able to acquire 

additional resources to do so. If it is not physically feasible for the transmission provider 

to offer generator imbalance service using its own resources, either because they do not 

exist or they are fully subscribed, the transmission provider must attempt to procure 

alternatives to provide the service, taking appropriate steps to offer an option that 

customers can use to satisfy their obligation to acquire generator imbalance service as a 

condition of taking transmission service. If no such resources are available, the 

transmission provider must accept the use of dynamic scheduling to the extent a 

transmission customer has negotiated an appropriate arrangement with a neighboring 

control area. 

Request for Clarification

40. E.ON U.S. seeks clarification of the time frame within which the transmission 

provider must post the availability of service (e.g., an hourly, 24-hour, or monthly 

interval). E.ON U.S. also asks the Commission to clarify the time frame required for 

obtaining imbalance service from other sources and the extent to which a transmission 

provider is obligated to seek such resources. E.ON U.S. suggests that this obligation 

could be interpreted as requiring only a single search or a constant search for resources 

over a long period of time. E.ON U.S. seeks further clarification regarding the point in 
Docket Nos. RM05-17-003 and RM05-25-003 - 23 - 

the process when the transmission provider must inform the generator that it must arrange 

for dynamic scheduling because no other option is available. 

Commission Determination

41. The Commission affirms the decision in Order No. 890-A to allow a transmission 

provider to post on its OASIS the maximum amount of generator imbalance service it is 

able to offer without impairing reliability.24 To the extent necessary, we clarify that a 

transmission provider must post the availability of generator imbalance service and seek 

imbalance service from other sources in a manner that is reasonable in light of the 

transmission provider’s operations and the needs of its imbalance customers. What is 

reasonable for some imbalance customers and transmission providers may be 

unreasonable for others. We therefore decline to set a specific time frame within which 

the transmission provider must post the availability of generator imbalance service. For 

the same reason, we decline to set a generic time frame for obtaining imbalance service 

from other sources in the event it is not physically feasible to offer generator imbalance 

service using the transmission provider’s resources. 

42. In the event that there are no additional resources available to enable the 

transmission provider to meet its obligation to provide generator imbalance service, the 

transmission provider must accept the use of dynamic scheduling by a transmission 

customer.25 The transmission provider cannot, however, require the use of dynamic 

 24 Order No. 890-A at P 289. 

25 Id. P 290. 
Docket Nos. RM05-17-003 and RM05-25-003 - 24 - 

scheduling, since the customer may choose to make other alternative comparable 

arrangements to self supply generator imbalance service. If a customer chooses to use 

dynamic scheduling in this circumstance, it is the option and the responsibility of the 

transmission customer to seek out and appropriately negotiate dynamic scheduling with a 

neighboring control area. The transmission provider is required to accommodate the use 

of dynamic scheduling only to the extent the transmission provider is unable to provide 

generator imbalance service and the customer has negotiated appropriate arrangements 

with the relevant control areas. 

b. Definition of Incremental Cost

43. In Order No. 890-A, the Commission granted rehearing of its decision to calculate 

incremental costs for the purpose of assessing imbalance charges based on the last 10 

MW dispatched to supply the transmission provider’s native load. The Commission 

determined that it is more reasonable to base imbalance charges on the actual cost to 

correct the imbalance, which may be different than the cost of serving native load. 

Accordingly, the Commission modified the definition to require transmission providers to 

use the cost of the last 10 MWs dispatched for any purpose, i.e., to serve native load, 

correct imbalances, or to make an off-system sale. 

Requests for Rehearing and Clarification

44. EEI and Southern argue that the Commission mistakenly used “i.e.” instead of 

“e.g.” when referring to the costs to be included in the calculation of charges for energy 

imbalance service and generator imbalance service. EEI contends that the specified 

purposes exclude costs to serve other customers, such as on-system customers who take 
Docket Nos. RM05-17-003 and RM05-25-003 - 25 - 

partial requirements service from the transmission provider. EEI asks the Commission to 

clarify that it meant to use “e.g.” to indicate that the list of examples provided were nonexclusive. Southern similarly requests that Schedules 4 and 9 of the pro forma OATT be 

revised to use “e.g.” instead of “i.e.” 

Commission Determination

45. The Commission grants rehearing of the definition of incremental cost as 

described in the preamble of Order No. 890-A and in Schedules 4 and 9 of the pro forma

OATT. Those schedules define incremental cost and decremental cost as “the 

Transmission Provider’s actual average hourly cost of the last 10 MW dispatched for any 

purpose.”26 We agree that use of the term “e.g.” instead of “i.e.” when referring to the 

types of energy to be included in the incremental cost calculation better reflects the 

Commission’s intent to include within that calculation the last 10 MW dispatched for any 

purpose. We revise the pro forma OATT accordingly.27

2. Credits for Network Customers 

46. In Order No. 890-A, the Commission affirmed its decision in Order No. 890 to 

sever the link in the pro forma OATT between joint planning and credits for new 

facilities owned by network customers. As the Commission explained in Order No. 890, 

the linkage between credits and joint planning gave the transmission provider an 

 26 Schedules 4, 9 of the pro forma OATT. 

27 We note in response to EEI, however, that the existing reference to native load 

in Schedules 4 and 9 already includes on-system customers taking requirements service 

under section 1.23 of the pro forma OATT. 
Docket Nos. RM05-17-003 and RM05-25-003 - 26 - 

incentive to deny coordinated planning to avoid granting credits for customer-owned 

facilities. The Commission concluded that any efficiencies that may be lost by severing 

that link should be offset by the increased efficiencies resulting from the coordinated 

planning reforms adopted in Order No. 890, which the Commission noted will ensure that 

most, if not all, transmission facilities are planned on a coordinated basis. 

47. The Commission similarly affirmed the decision to adopt a revised test to 

determine whether a network customer is eligible to receive credits for new facilities. 

Under the revised section 30.9 of the pro forma OATT, customers are eligible for credits 

for those facilities that are integrated with the operations of the transmission provider’s 

facilities; provided, that integration will be presumed for customer-owned facilities that, 

if owned by the transmission provider, would be eligible for inclusion in the transmission 

provider’s annual transmission revenue requirement as specified in Attachment H of the 

pro forma OATT. The Commission clarified in Order No. 890 that this revision did not 

alter the underlying integration standard. In order to satisfy the integration standard, the 

customer must show that its new facility is integrated with the transmission provider’s 

system, provides additional benefits to the transmission grid in terms of capability and 

reliability, and can be relied on by the transmission provider for the coordinated operation 

of the grid.28

 28Order No. 890 at P 754, n. 436 (citing Southwest Power Pool, Inc., 108 FERC 

¶ 61,078 (2004), reh’g denied, 114 FERC ¶ 61,028 (2006)). 
Docket Nos. RM05-17-003 and RM05-25-003 - 27 - 

48. The Commission explained in Order No. 890-A that adoption of the presumption 

of credits in section 30.9 was necessary to ensure comparability between network 

customers and transmission providers serving load. To that end, the Commission 

clarified that the presumption of integration is rebuttable as applied to both the 

transmission provider and the network customer. A transmission provider may challenge 

the presumption that the customer’s facilities are integrated by showing that the 

customer’s facilities do not actually meet the integration standard, notwithstanding the 

fact that they are similar to facilities in the transmission provider’s rate base. Similarly, a 

customer could challenge the presumption that a transmission provider’s facilities are 

integrated by showing that the facilities, for example, do not provide network benefits. 

As a result, the Commission clarified that denial of credits for a network customer no 

longer triggers a need for the transmission provider to demonstrate that its own facilities 

satisfy the integration standard. 

Requests for Clarification and Rehearing

49. NRECA and TAPS ask the Commission to clarify whether it intended to apply a 

single integration standard to both transmission customer and transmission provider 

facilities and, if so, what standard will apply. These petitioners contend that several 

passages in Order No. 890-A suggest that the Commission will now apply a single 

integration standard, no matter whose facilities are under consideration. They note, for 

example, the Commission’s statement in paragraph 353 of Order No. 890-A that “[a] 

transmission provider may overcome the network customer’s presumed integration by 

demonstrating, with reference to its own facilities that meet the integration standard, that 
Docket Nos. RM05-17-003 and RM05-25-003 - 28 - 

the network customer’s facilities do not meet the standard.”29 They point to another 

statement that it is “appropriate for both the transmission provider and its customers to be 

subject to the integration standard to the extent the presumption of integration is 

overcome.”30 These petitioners express concern, however, regarding the Commission’s 

statement that the integration standard for credits under section 30.9 remains unchanged 

and that precedents applying that standard will continue to apply. They argue that those 

precedents establish and apply a significantly more stringent test for integration of 

customer-owned facilities than for facilities of the transmission provider.31

50. TAPS suggests that the Commission’s new policy for new transmission facilities 

must mean one of three things. Its first and preferred possibility is that, in assessing 

whether the new integration presumption has been overcome, the Commission will apply 

a single integration standard to both the transmission provider and the transmission 

customer, i.e., the relaxed standard that has long applied in determining whether a 

transmission provider’s facilities should be rolled into its rate base. Under a second 

possibility, a single integration standard also would apply, but transmission providers 

would be held to the same strict integration standard to which transmission customer 

 29 Order No. 890-A at P 353. 

30 Id. P 354. 

31 Citing East Texas Elec. Coop., Inc. v. Central & South West Services, Inc. 108 

FERC ¶ 61,079 (2004), reh’g denied, 114 FERC ¶ 61,027 (2006) (ETEC); Northeast Tex. 

Elec. Coop., Inc., 108 FERC ¶ 61,108, at P 48 (2004), reh’g denied, 111 FERC ¶ 61,189 

(2005) (NTEC). 
Docket Nos. RM05-17-003 and RM05-25-003 - 29 - 

seeking section 30.9 credits have long been subject. As a final interpretation, TAPS 

states that, to overcome the presumption applicable to new transmission facilities, the 

Commission could continue to apply two different tests: the more stringent one 

applicable to customers seeking credits and the more relaxed one for transmission 

providers to include facilities in rate base. TAPS notes, however, that this would be 

inconsistent with Order No. 890-A’s repeated references to a single, comparable 

integration standard that applies to both customer and transmission providers. 

51. East Texas Cooperatives agree that the case law establishes a different and harder 

test for integration of customer-owned facilities. East Texas Cooperatives state that, 

under that precedent, a transmission provider need only run the load flow study used in 

ETEC to challenge credits for a customer-owned facility. East Texas Cooperatives argue 

that this load flow study cannot be satisfied by any transmission facilities, since it takes 

out both customer facilities and load and asks if the grid can still run reliably. In 

comparison, East Texas Cooperatives contend that the cost of transmission provider 

facilities would continue to be presumptively rolled in subject to challenge unless a party 

can show that those facilities are so isolated from the grid that they are and will likely 

remain non-integrated and thus provide no benefit to the system. 

52. East Texas Cooperatives therefore argue that the Commission’s statement in Order 

No. 890-A regarding the continued applicability of integration precedent mandates 

discrimination in favor of transmission provider facilities in violation of the FPA. They 

contend that eligibility for rolled-in rate treatment of the same facilities would vary solely 

as a result of their ownership, since customer-owned facilities that are found not to be 
Docket Nos. RM05-17-003 and RM05-25-003 - 30 - 

integrated under a load flow integration test would become integrated if purchased by the 

transmission provider, which is subject to a more relaxed application of the integration 

standard. East Texas Cooperatives suggest that the Commission justified its application 

of a more difficult test to network customers on a presumption that the customer-owned 

facilities are less integrated than transmission provider facilities. Joined by NRECA and 

TAPS, East Texas Cooperatives argue that customer-owned facilities are built to serve 

customer loads just as transmission provider facilities are built to serve transmission 

provider loads. These petitioners contend that there is no basis in the record for 

presuming that transmission provider facilities are more integrated than customer 

facilities. 

53. FMPA, NRECA and TDU Systems contend that contradictory statements in Order 

No. 890-A could be read to apply the more stringent integration standard to customerowned facilities and a more relaxed integration standard for transmission provider 

facilities.32 In particular, these petitioners question what standard the Commission was 

referring to in paragraph 353 of Order No. 890-A when it stated that the transmission 

provider may overcome the network customer’s presumed integration by demonstrating, 

with reference to its own facilities that meet the integration standard, that the network 

customer’s new facilities do not meet the standard, i.e., the “integration standard” or the 

“similar in purpose and design” standard. NRECA and TDU Systems argue that the 

appropriate standard to apply when both claiming and rebutting the presumption of 

 32 Citing Order No. 890-A at P 351-52. 
Docket Nos. RM05-17-003 and RM05-25-003 - 31 - 

integration is whether the customer’s facilities are similar in design and purpose to those 

of the transmission provider that are in rates. 

54. Florida Power also requests clarification of language in paragraph 353 of Order 

No. 890-A. Florida Power asks the Commission to confirm that this statement applies 

only to determine whether the customer is entitled to the presumption in the first place, 

not to rebut of the presumption once established, and that the standard to which the 

Commission was referring is whether the customer-owned facilities are similar in design 

and purpose to facilities owned by the transmission provider that are included in rates. 

Florida Power also asks the Commission to confirm that the transmission provider could 

oppose a customer’s initial attempt to establish a presumption of credits by showing, by 

reference to the transmission provider’s own facilities that meet the integration standard, 

that the customer-owned facilities are not similar in design and purpose to facilities 

owned by the transmission provider that are included in rates. 

55. With regard to rebutting the presumption once established, Florida Power requests 

confirmation that the transmission provider can overcome the presumption by showing 

that the customer-owned facilities do not meet the integration standard, i.e., that it does 

not need the network customer’s facility to serve the network customer, the transmission 

provider’s other transmission customers, or the transmission provider’s retail 

customers.33 Florida Power contends that it would not be just and reasonable, or 

 33 Citing Southern California Edison Co., 108 FERC ¶ 61,085, at P 9 n.11 (2004); 

Southwest Power Pool, Inc., 108 FERC ¶ 61,078, at P 18 n.7 (2004), reh’g denied, 

 (continued...) 
Docket Nos. RM05-17-003 and RM05-25-003 - 32 - 

consistent with the cost causation principle, to shift the cost of customer-owned facilities 

if those facilities do not benefit the transmission provider’s system. 

56. E.ON U.S. argues that the rebuttable presumption of integration should apply only 

to customer-owned facilities that are planned through the Attachment K or similar 

process. If the Commission’s expectation that most, if not all, transmission upgrades 

eligible for credits will be planned in the Attachment K process is true, E.ON U.S. 

suggests that the rebuttable presumption of integration most reasonably applies only to 

facilities planned through that process.34 E.ON U.S. contends that linking credits for 

customer-owned facilities to the Attachment K planning process would allow the 

transmission provider an opportunity to coordinate with customers on facilities, while 

preventing any opportunities for undue discrimination given the non-discretionary nature 

of the planning obligation. E.ON U.S. argues that failure to plan facilities through the 

Attachment K or similar process should trigger a presumption against receiving credits 

for such facilities. 

57. Several petitioners request rehearing of the Commission’s determination that 

denial of credits for a network customer would no longer trigger a need for the 

transmission provider to demonstrate that its own facilities satisfy the integration 

standard. East Texas Cooperatives contend that this decision improperly reverses the 

 

114 FERC ¶ 61,028 (2006); ETEC, 108 FERC ¶ 61,079, at P 26 n.11; Northern States 

Power Co., 87 FERC ¶ 61,121 at 61,488 (1999). 

34 Citing Order No. 890-A at P 426. 
Docket Nos. RM05-17-003 and RM05-25-003 - 33 - 

approach adopted in FP&L35 and prohibits a network customer from challenging the 

rolled-in rate treatment of transmission provider facilities even when the customer’s own 

facilities are found ineligible for credits. TAPS contends that reversing this policy is 

inconsistent with notions of comparability unless the Commission clarifies, as requested 

above, that the relaxed integration standard applies to both network customers and 

transmission providers. If a network customer’s facilities are disqualified from eligibility 

for credits due to application of a more stringent integration standard, TAPS and TDU 

Systems argue that comparability requires the removal of the transmission provider’s 

similar facilities from rates. NRECA agrees, arguing that the transmission provider must 

be required to remove its facilities from rates if customer-owned facilities that are similar 

in design and purpose to those transmission provider facilities are found ineligible for 

credits under the integration standard. 

58. TAPS and FMPA ask the Commission to clarify that removal of the trigger applies 

only to denial of credit for new facilities to which the new presumption of integration 

applies. TAPS and FMPA point to language in paragraph 352 of Order No. 890-A 

providing that “the denial of credits for a network customer no longer triggers a need for 

the transmission provider to demonstrate that its own facilities satisfy the integration 

standard.” Both FMPA and TAPS interpret this language as applying to new facilities 

only. TAPS contends that the Commission does not and cannot offer any justification for 

 35 Florida Mun. Power Agency v. Florida Power and Light Co., 74 FERC 

¶ 61,006, at 61,010 (1996), reh’g denied, 96 FERC ¶ 61,130, at 61, 544-45 (2001), aff’d 

sub nom. Florida Mun. Power Agency v. FERC, 315 F.3d 362 (D.C. Cir. 2003) (FP&L). 
Docket Nos. RM05-17-003 and RM05-25-003 - 34 - 

dispensing with the trigger in cases involving requests for credits for existing facilities, in 

which the presumption of integration adopted in Order No. 890 does not apply. TAPS is 

concerned that transmission providers will seek to remove the trigger for existing 

facilities, relying, inter alia, on the more general reference in Order No. 890-A to 

elimination of trigger. 

59. Finally, FMPA seeks clarification on how the Commission’s determinations on 

transmission credits will affect pending cases. FMPA asks the Commission to confirm 

that Order No. 890-A will not be applied to deny or weaken the comparability 

requirement for facilities at issue in Docket No. ER93-465-000, et al. FMPA also asks 

the Commission to clarify that the transmission credit policy articulated in Order No. 890 

and Order No. 890-A will not preclude FMPA’s ability to obtain full relief if the D.C. 

Circuit remands the Commission’s decisions at issue in Fla. Mun. Power Agency v. 

FERC regarding charges for transmission that a network customer is physically unable to 

use.36 

Commission Determination

60. The Commission affirms the decision in Order Nos. 890 and 890-A to revise the 

test for determining whether a network customer is eligible to receive credits for new 

facilities. Under the revised section 30.9 of the pro forma OATT, a network customer is 

eligible for credits if it demonstrates that its facilities are integrated with the operations of 

the transmission provider’s facilities; provided that integration will be presumed for new 

 36 No. 06-1285 (D.C. Cir. filed July 26, 2006). 
Docket Nos. RM05-17-003 and RM05-25-003 - 35 - 

customer-owned facilities that, if owned by the transmission provider, would be eligible 

for inclusion in the transmission provider’s annual transmission revenue requirement as 

specified in Attachment H of the pro forma OATT. As the Commission explained in 

Order No. 890-A, the adoption of this presumption ensures comparability between 

network customers and transmission providers serving native load given that transmission 

providers are now obligated to plan their systems on an open and coordinated basis.37

61. Several petitioners question how this revised test is consistent with the 

Commission’s statements that the integration standard applicable to new facilities 

remains unchanged and that Commission precedent regarding application of that standard 

will continue to apply.38 As these petitioners note, the integration standard has 

historically been applied differently to network customers and transmission providers.39 

Transmission facilities owned by the transmission provider enjoyed a presumption of 

rolled-in rate treatment so long as any degree of integration was shown, while network 

customers were required to demonstrate affirmatively that their facilities were relied upon 

by the transmission provider to provide service to its customers.40 The Commission 

therefore described the test for integration for network customer facilities as being more 

 37 See Order No. 890-A at P 350. 

38 See Order No. 890-A at P 349. 

39 Compare Utah Power & Light Co., 27 FERC ¶ 61,258, at 61,485-87 (1984), 

reh’g denied, 28 FERC ¶ 61,088, at 61,165 (1984) (citing Utah Power & Light Co., 

Opinion No. 113, 14 FERC ¶ 61,112, reh’g denied, 15 FERC ¶ 61,076 (1981)) with

ETEC, 114 FERC ¶ 61,027 at P 42. 

40 NTEC, 111 FERC ¶ 61,189 at P 17. 
Docket Nos. RM05-17-003 and RM05-25-003 - 36 - 

stringent than the test applied to transmission provider facilities.41 The application of the 

integration standard was, in fact, more stringent as applied to network customers because 

they did not enjoy the benefit of presumed integration, as did the transmission provider. 

The underlying integration standard, however, has been and continues to be the same for 

all transmission facilities. Only those facilities that are, in fact, integrated with the 

transmission grid and used by the transmission provider to serve customers should be 

subject to rolled-in rate treatment. It is in this sense that the precedent continues to apply, 

providing guidance regarding the treatment of facilities that benefit from the presumption 

of integration and those that do not. 

62. The presumption of integration enjoyed by the transmission provider has never 

been absolute. Customers have always been able to challenge the inclusion of certain 

transmission provider facilities by showing that the facilities did not actually provide a 

systemwide benefit to the transmission grid.42 In most instances, however, this has not 

been the case given that the transmission provider generally plans, constructs and owns 

its facilities, from the very beginning, to meet delivery obligations, which justifies the 

presumption of integration.43 In the event the transmission provider denied credits to a 

 41 Id. P 15. 

42 See Idaho Power Co., 3 FERC ¶ 61,108 (1978), reh'g denied, 5 FERC ¶ 61,009 

(1978); Minnesota Power & Light Co., 16 FERC ¶ 63,012 (1981), aff’d 21 FERC 

¶ 61,233 (1982). 

43 See Niagara Mohawk Power Corp., 42 FERC ¶ 61,143, at 61,531 (1988); Otter 

Tail Power Co., 12 FERC ¶ 61,169, at 61,420 (1980). 
Docket Nos. RM05-17-003 and RM05-25-003 - 37 - 

network customer, however, the transmission provider lost the benefit of the presumption 

and the same integration standard applied to customer-owned facilities was applied to the 

transmission provider’s facilities.44 This again demonstrates that the same underlying 

integration standard has applied to all facilities, regardless of ownership, notwithstanding 

the presumed integration generally enjoyed by the transmission provider. 

63. In light of the planning-related reforms implemented in Order No. 890, the 

Commission determined it is now appropriate to grant the same presumption of 

integration to new customer-owned facilities that are similar in scope and design to those 

transmission provider facilities that are in rates. Implementation of planning-related 

reforms will now ensure that most, if not all, transmission facilities are planned on a 

coordinated basis.45 However, only those new customer-owned facilities that are similar 

in design and purpose to the transmission provider’s facilities that are in rates will be 

eligible for the presumption of rolled-in rate treatment. Other customer-owned facilities 

will be eligible for credits only if the network customer is able to make an affirmative 

showing that the facilities satisfy the integration standard, i.e., that the facilities are 

nonetheless integrated notwithstanding their ineligibility for the presumption of 

integration.46

 44 See Florida Power & Light Co., 105 FERC ¶ 61,287, at P 16 (2003). 

45 See Order No. 890 at P 736; Order No. 890-A at P 337. 

46 See, e.g., Ne. Tex. Elec. Coop., Inc., 111 FERC ¶ 61,189 at P 16. 
Docket Nos. RM05-17-003 and RM05-25-003 - 38 - 

64. To be clear, if the transmission provider disagrees that the customer-owned 

facilities are similar in design and purpose to its own facilities, it may challenge the 

threshold application of the presumption with a comparative analysis of its facilities and 

those for which credits are claimed. Neither the transmission provider nor the network 

customer need analyze complete satisfaction of the integration standard in order to 

determine whether, as a threshold matter, the presumption of integration applies. 

Assuming that the network customer prevails in its claim for presumed integration, then 

the network customer will enjoy the same rolled-in rate treatment enjoyed by the 

transmission provider for its similar facilities. As the Commission explained in Order 

No. 890, this is appropriate to ensure comparability between the transmission provider 

and network customer now that all transmission facilities will be planned pursuant to an 

open and coordinated process.47 

65. The transmission provider may nevertheless overcome the presumption of 

integration by demonstrating, with reference to its own facilities that meet the integration 

standard, that the customer-owned facilities are not, in fact, integrated and do not provide 

benefits to the system. The same is true of transmission provider facilities previously 

presumed to be integrated. In either case, the challenging party will bear the burden in 

overcoming the presumption of integration and rolled-in rate treatment. It is for this 

reason that it would no longer be appropriate to remove the presumption of integration 

enjoyed by the transmission provider, i.e., apply the more strict integration standard, 

 47 Order No. 890 at P 435. 
Docket Nos. RM05-17-003 and RM05-25-003 - 39 - 

upon denial of credits to a network customer. In the past, only the transmission provider 

enjoyed the presumption of integration, which justified elimination of the presumption in 

the event credits were denied to a network customer. Both transmission providers and 

network customers now enjoy the benefits of presumed integration, and both may 

challenge application of the presumption to each other’s facilities. We continue to 

believe that this will ensure that all similar facilities that are, in fact, not part of the 

integrated network that serves all customers are excluded from rates.48 We acknowledge 

that this approach departs from the approach adopted in FP&L.

49 Our departure is 

justified, however, because the presumption of integration is now shared with new 

customer-owned facilities, shifting to the transmission provider the burden of 

demonstrating that credits for similar customer-owned facilities are not warranted. 

66. We reject the suggestion by E.ON U.S. to reestablish a link between credits and 

joint planning by applying the presumption of integration only to upgrades planned 

through the transmission provider’s Attachment K process. Although we support 

coordinated, open, and transparent planning, transmission providers are not required to 

develop transmission plans on a co-equal basis with customers.50 It would therefore be 

unfair to network customers to condition the receipt of credits for new facilities on 

 48 See Order No. 890-A at P 351. 

49 FP&L, 74 FERC at 61,010 (finding that the integration of facilities into the 

plans or operations of a transmitting utility is the proper test for cost recognition). 

50 Order No. 890-A at P 188. 
Docket Nos. RM05-17-003 and RM05-25-003 - 40 - 

planning activities that are out of their control. Indeed, restablishing a link between joint 

planning and credits would revive disincentives the Commission sought to correct by 

severing the link between planning and credits in Order No. 890. We therefore affirm 

our decision to sever the link between credits and joint planning. 

67. To the extent necessary, we clarify that none of the reforms regarding transmission 

credits adopted in Order No. 890 were intended to apply to facilities existing prior to the 

effectiveness of the revised section 30.9 nor to pending cases involving such facilities. 

Denial of credits to a network customer’s previously existing facilities therefore still 

triggers review of the transmission provider’s rate base. Similarly, a network customer 

may not rely on the presumption of integration for its previously existing facilities. 

3. Capacity Reassignment 

68. In Order No. 890-A, the Commission granted rehearing of its decision in Order 

No. 890 to remove the price cap on reassignments of transmission capacity, concluding 

that it is more appropriate to allow reassignments above the cap only during a study 

period ending on October 1, 2010. The Commission directed staff to closely monitor the 

development of the secondary market for transmission capacity during this period. To 

assist staff in this effort, the Commission affirmed the requirement for transmission 

providers to aggregate and summarize in an electronic quarterly report (EQR) the data 

contained in service agreements and related OASIS schedules for reassigned capacity. 

The Commission also directed staff to prepare a report on staff’s findings within 6 

months of the receipt of two years worth of data, i.e., by May 1, 2010. Upon review of 

the staff report and any feedback from the industry, the Commission will determine 
Docket Nos. RM05-17-003 and RM05-25-003 - 41 - 

whether it is appropriate to continue to allow reassignments of capacity above the price 

cap beyond the study period. In the absence of further Commission action, the price cap 

will resume effect as of October 1, 2010 under section 23.1 of the pro forma OATT. 

69. The Commission clarified in Order No. 890-A that, as of the effective date of the 

reforms adopted in Order No. 890, all reassignments of capacity must take place under 

the terms and conditions of the transmission provider’s OATT. As a result, there is no 

longer a need for the assigning party to have on file with the Commission a rate schedule 

governing reassigned capacity. To the extent that a reseller has a market-based rate tariff 

on file, the provisions of that tariff, including a price cap or reporting obligations, will not 

apply to the reassignment since such transactions no longer take place pursuant to the 

authorization of that tariff. 

Request for Rehearing

70. The APPA Joint Filers argue on rehearing that the decision to remove the price 

cap for reassignments of transmission capacity during the study period is not supported 

by substantial evidence that the price cap has discouraged development of a secondary 

transmission market.51 The APPA Joint Filers also contend that lifting the price cap on 

reassigned capacity will harm consumers by making transmission artificially scarce and 

overpriced. The APPA Joint Filers argue that the existence of congestion creates 

constrained regions within which market power can be exercised. 

 51 The APPA Joint Filers include: APPA, NRECA, TAPS and TDU Systems. 
Docket Nos. RM05-17-003 and RM05-25-003 - 42 - 

71. To further protect consumers, the APPA Joint Filers suggest that the Commission 

limit the experimental lifting of price caps to short-term reassignments.52 The APPA 

Joint Filers state that long-term firm point-to-point transmission service is particularly 

important to LSEs looking to secure economic and reliable power supply and that nonfirm releases of unscheduled transmission capacity will not help those LSEs needing 

long-term firm service. The APPA Joint Filers also argue that, by extending the 

experiment to long-term sales, including reassignments by the transmission provider’s 

merchant function or affiliate, the Commission has discouraged needed transmission 

construction. If the secondary market is clearing at prices above the transmission 

provider’s rate ceiling, the APPA Joint Filers contend that the parent corporation will 

have incentives to put as much capacity in the hands of its merchant function or affiliates 

as possible and to avoid new transmission construction. That result, the APPA Joint 

Filers argue, would reduce the access of LSEs to the long-term firm transmission service 

they require to meet their service obligations, in violation of FPA section 217(b)(4). The 

APPA Joint Filers suggest that the Commission can achieve its goal of determining 

whether the price cap encourages development of a secondary market and whether there 

is competition in such a market by lifting the price cap only for short-term reassignments. 

72. The APPA Joint Filers also contend that the affirmative obligation of the 

transmission provider to expand its system in order to accommodate requests for service 

 52 Citing Interstate Natural Gas Ass’n of Am. v. FERC, 285 F.3d 18 (D.C. Cir. 

2002). 
Docket Nos. RM05-17-003 and RM05-25-003 - 43 - 

is inadequate to ensure customers are protected. The APPA Joint Filers note that this 

obligation has existed since 1996, yet the Commission in Order No. 890 found that it had 

not succeeded in overcoming transmission providers’ incentives to avoid transmission 

investment, especially in favor of their own generation.53 The APPA Joint Filers contend 

that the Commission has no factual basis to conclude that entry in the form of expanded 

transmission capacity will be timely, likely and sufficient to defeat price increases due to 

transmission market power. 

73. The APPA Joint Filers acknowledge that Commission staff will be monitoring the 

EQRs and other data during the two-year period with the goal of preparing its report, but 

argue that this does not alleviate the Commission of its obligation to actively monitor 

resale of transmission capacity during the period to ensure that rates for customers remain 

just and reasonable and that there are no abuses of market power. The APPA Joint Filers 

ask the Commission to explicitly establish its intent to continue to exercise its obligations 

under sections 205 and 206 throughout this period so that resellers are on notice that they 

cannot charge unjust and unreasonable rates. If the Commission discovers evidence of 

unjust and unreasonable rates at any time, the APPA Joint Filers urge the Commission to 

address this as it occurs, including if necessary by terminating the experiment prior to 

October 1, 2010. 

74. With regard to the staff report, the APPA Joint Filers ask the Commission to 

prescribe the parameters, procedures and data to be collected and provide guidance as to 

 53 Citing Order No. 890 at P 424. 
Docket Nos. RM05-17-003 and RM05-25-003 - 44 - 

the issues that should be addressed. The APPA Joint Filers suggest that the Commission 

direct staff to address the following specific matters in the report: identify whether there 

is an increase in reassignments by examining data on the amount of reassignments before 

and after the price caps were lifted; examine prices both offered and accepted to 

determine the level of market interest in reassigned capacity, whether prices increased, 

the cause of price changes, and whether prices remained within a zone of reasonableness; 

examine whether competition among resellers is sufficient to protect consumers from 

excessive rates; identify the kinds of products resold, such as the length of reassignments 

and whether reassigning customers redirected service; consider whether reservations by 

the transmission provider’s merchant function or affiliates increased, whether they 

reassigned the capacity reserved, and to whom and at what price they reassigned service; 

indicate whether the transmission provider’s interactions with affiliated resellers were 

covered by the Standards of Conduct; and, assess whether those needing transmission 

capacity were able to obtain it, whether in the primary or secondary market. 

75. To the extent the EQR data or other sources do not provide this information, the 

APPA Joint Filers suggest that the Commission institute data reporting and collection 

requirements to obtain that information. The APPA Joint Filers state particular concern 

regarding the elimination of the reporting requirement under the reseller’s market-based 

rate tariff. The APPA Joint Filers contend that lifting the price cap will allow marketbased sellers to use transmission capacity reassignment to support attempts to exercise 

market power in sales of transmission, electricity, or both. Because a market-based seller 

no longer needs to report its own transmission reassignments and because the 
Docket Nos. RM05-17-003 and RM05-25-003 - 45 - 

transmission provider will report reassignments only on an aggregate, summary basis, the 

APPA Joint Filers argue that the EQR data will not permit monitoring to detect patterns 

or conduct that suggest efforts to manipulate or exercise market power in transmission 

markets. The APPA Joint Filers contend that, by separating data on the market-based 

seller’s electricity sales from the data on the same seller’s transmission reassignments, 

the Commission has made it difficult to determine whether a market-based seller is 

manipulating transmission resales to favor its market-based sales because it will be 

impossible to determine whether a particular capacity reassignment supported a marketbased sale. The APPA Joint Filers therefore request that the Commission grant rehearing 

and retain the requirement that all holders of market-based rate authority report both their 

electricity sales and their capacity reassignments in the same EQR. 

76. Finally, once the staff report is issued, the APPA Joint Filers ask that it be noticed 

and that the public be provided an opportunity to comment. The APPA Joint Filers 

contend that the data underlying the report must be made public, with sensitive 

information subject to appropriate confidentiality protections. If the Commission 

believes that further extension of the experiment is merited, the APPA Joint Filers ask the 

Commission to use full notice and comment rulemaking procedures to ensure a complete 

record is developed to support any further Commission action. 

Commission Determination

77. The Commission affirms its decision to remove the price cap on reassignments of 

transmission capacity to accommodate a study period expiring on October 1, 2010. For 

the reasons stated in Order Nos. 890 and 890-A, we continue to believe that lifting the 
Docket Nos. RM05-17-003 and RM05-25-003 - 46 - 

price cap during the study period will foster the development of a more robust secondary 

market for transmission capacity.54 Point-to-point transmission service customers will 

have increased incentives to make their service available to others that place a higher 

value on it, which in turn will send more accurate signals that promote efficient use of the 

transmission system by fostering the reassignment of unused capacity. 

78. Although the Commission agrees with the APPA Joint Filers that transmission 

capacity, and in particular long-term transmission capacity, is of great importance to 

LSEs and other customers, we disagree that restricting transactions above the price cap 

only to short-term reassignments is necessary to preserve access to service under the 

pro forma OATT. As the Commission emphasized in Order Nos. 890 and 890-A, 

transmission providers are under an affirmative obligation to offer all available capacity 

to customers on a non-discriminatory basis and to expand their systems as necessary to 

accommodate additional requests for service.55 The pro forma OATT does not, and will 

not, permit the withholding of transmission capacity by the transmission provider and 

effectively establishes a price ceiling for long-term reassignments at the transmission 

provider’s cost of expanding its system. The fact that a transmission provider’s affiliate 

may profit from congestion on the system does not relieve the transmission provider of its 

obligation to offer all available transmission capacity and expand its system as necessary 

to accommodate requests for service. We therefore disagree that allowing reassignments 

 54 Order No. 890 at P 808; Order No. 890-A at P 388-89. 

55 Order No. 890 at P 814; Order No. 890-A at P 392. 
Docket Nos. RM05-17-003 and RM05-25-003 - 47 - 

of transmission capacity above the price cap will reduce the access of any customer to 

service under the pro forma OATT. 

79. The APPA Joint Filers are therefore incorrect that lifting the price cap will make 

transmission capacity artificially scarce and overpriced during the study period. 

Transmission providers must continue to make primary capacity available at the rates 

specified in their individual OATTs. Customers that do not wish to participate in the 

secondary market may continue to take service from the transmission provider directly, 

just as if the price cap had not been lifted. For those customers participating in the 

secondary market, however, lifting the price cap will create additional incentives for 

others to make service available, increasing the ability to obtain transmission capacity. 

80. The APPA Joint Filers incorrectly characterize the Commission’s statement in 

paragraph 392 of Order No. 890 as finding that the transmission provider’s obligation to 

expand the system in response to service requests was inadequate to overcome incentives 

to avoid transmission investment. In the passage cited, the Commission instead found 

that this requirement was inadequate to overcome incentives to exclude customers from 

the transmission planning process.56 To remedy that disincentive, the Commission 

required transmission providers to implement open and transparent planning processes 

that allow customers and other stakeholders to provide input in the development of 

transmission plans. The Commission specifically noted that those planning obligations 

 56 Id. P 424. 
Docket Nos. RM05-17-003 and RM05-25-003 - 48 - 

did not address or dictate which investments identified in a transmission plan should be 

undertaken by the transmission provider.57 

81. The APPA Joint Filers inappropriately discount the importance of the transmission 

provider’s affirmative obligation to expand its system in response to requests for service. 

The Commission has historically relied on these and other obligations under the pro 

forma OATT sufficient to mitigate the potential exercise of transmission market power 

by transmission providers and their affiliates.58 Lifting the price cap on reassignments of 

transmission capacity does not alter those obligations in any way and, therefore, does not 

impair the ability of load serving entities to meet their load service obligations. By lifting 

the price cap on capacity reassignments, the Commission has instead enhanced the 

options available to customers seeking transmission service by increasing the incentives 

for customers with transmission reservations to make capacity available to others placing 

a higher value on it. 

82. We are nevertheless sensitive to the concerns expressed regarding the potentially 

negative competitive effects of lifting the price cap on reassignments of transmission 

capacity. It is for that very reason that the Commission granted rehearing in Order No. 

890-A, at the request of the APPA Joint Filers, to limit the period in which the price cap 

is lifted. During the study period, continuing rate regulation of the transmission 

provider’s primary capacity, competition among resellers, and reforms to the secondary 

 57 Id. P 438. 

58 See Order No. 697 at P 408. 
Docket Nos. RM05-17-003 and RM05-25-003 - 49 - 

market for transmission capacity, combined with enforcement proceedings, audits, and 

other regulatory controls, will assure that prices in the secondary market remain within a 

zone of reasonableness.59 Should any customer believe that capacity is being 

preferentially allocated to a transmission provider’s affiliates, that particular holders of 

transmission capacity are attempting to exercise market power through hoarding or other 

tactics, or that the transmission provider is failing to meet its expansion obligations, the 

customer should bring the matter to the Commission’s attention through a complaint or 

other appropriate procedural mechanisms. If the Commission finds evidence of market 

abuse, it can act to restrict the ability of an offending reseller (and possibly its affiliates) 

to participate in the secondary market or impose other remedies, including civil penalties, 

as appropriate to ensure that rates for secondary transmission capacity are just and 

reasonable. 

83. With respect to our expectations for the report to be prepared by Commission 

staff, we clarify that staff should focus on the competitive effects of removing the price 

cap for reassigned capacity. Staff should consider the number of reassignments occurring 

over the study period, the magnitude and variability of resale prices, the term of the 

reassignments, and any relationship between resale prices and price differentials in 

related energy markets. Staff should also examine the nature and scope of reassignments 

undertaken by the transmission provider’s affiliates and include in its report any evidence 

 59 See Order No. 890 at P 811; Order No. 890-A at P 391. 
Docket Nos. RM05-17-003 and RM05-25-003 - 50 - 

of abuse in the secondary market for transmission capacity, whether by those affiliates or 

other customers.60 

84. As requested by the Joint APPA Filers, we have reconsidered our reporting 

requirements and determined that it would be useful to direct transmission providers to 

include certain additional information in their EQRs. We direct transmission providers to 

include in their EQRs the identity of the reseller and indicate whether the reseller is 

affiliated with the transmission provider. Each transmission provider also must include 

the rate that would have been charged under its OATT had the secondary customer 

purchased primary service from the transmission provider for the term of the 

reassignment. We direct transmission providers to submit this additional data for all 

resales during the study period and to update, as necessary, any previously-filed EQRs on 

or before the date they submit their next EQR. 

85. We disagree that elimination of the reporting requirement under the reseller’s 

market-based rate tariff will impair the ability of staff to perform its analyses. All 

reassignments of transmission capacity now take place under the transmission provider’s 

OATT and, therefore, it is appropriate for the transmission provider to report those 

transactions on its EQR. We reiterate that the EQR must contain all relevant transaction 

data, whether stated in the service agreement governing the reassignment or in a related 

OASIS schedule.61 Transmission providers should not aggregate multiple transactions 

 60 See id. P 406. 

61 See Order No. 890 at P 423, n.162. 
Docket Nos. RM05-17-003 and RM05-25-003 - 51 - 

into single line items on the EQR. All terms must instead be fully described and rates 

provided for each reassignment.62

86. Upon review of the staff report, the Commission will determine whether it is 

appropriate to institute further rulemaking procedures to amend the pro forma OATT to 

allow reassignments of transmission capacity above the price cap after October 1, 2010. 

The report will be made public and subject to comment, with sensitive information 

subject to appropriate confidentiality protections. In the absence of Commission action, 

the rate charged by the transmission provider for each reassignment, and the 

corresponding credit to the reseller, may not exceed the higher of (i) the original rate paid 

by the reseller, (ii) the transmission provider’s maximum rate on file at the time of the 

assignment, or (iii) the reseller’s opportunity cost capped at the transmission provider’s 

cost of expansion.63

4. Operational Penalties 

87. In Order No. 890-A, the Commission affirmed the decision in Order No. 890 to 

subject all transmission providers, including RTOs and ISOs, to operational penalties 

when they routinely fail to meet the deadlines prescribed in sections 19.2, 19.4, 32.3 and 

 62 See Order No. 890 at P 818, n.499. The Commission’s reference to 

“aggregate[ing] and summarize[ing] in an EWQ the data contained in the service 

agreements for reassigned capacity” in Order Nos. 890 and 890-A was intended to refer 

to the transmission provider’s obligation to compile reassignments involving multiple 

parties in a single EQR, not consolidate multiple reassignments into single line items on 

the EQR. 

63 See section 23.1 of the pro forma OATT. 
Docket Nos. RM05-17-003 and RM05-25-003 - 52 - 

32.4 of the pro forma OATT. The Commission explained that the 60-day due diligence 

deadlines set forth in those sections serve as a good measure of a transmission provider’s 

use of due diligence since, in its experience, the vast majority of transmission studies can 

be completed in that time period. 

88. The Commission rejected requests to change section 19.9 of the pro forma OATT, 

concluding that transmission providers will have the ability to explain in notification 

filings the extenuating circumstances that lead to delay in processing transmission service 

request studies and, in turn, demonstrate their use of due diligence notwithstanding the 

inability to meet the 60-day target. The Commission also rejected requests to create 

broad categories or lists of extenuating circumstance that would exempt transmission 

providers from late study penalties or related posting requirements. 

Requests for Rehearing and Clarification

89. E.ON U.S., EEI, and Southern contend that the Commission has failed to justify 

the use of 60 days as the time frame for processing transmission service request studies 

with due diligence. These petitioners argue that the Commission’s stated experience that 

the vast majority of studies are completed within 60 days is unsupported by data or any 

other evidence. Southern further argues that any experience regarding processing times 

does not reflect the increased redispatch and conditional firm study obligations imposed 

under Order No. 890. Southern argues that transmission planners are also facing 

additional workforce pressures due to development of reliability standards, worker 

shortages, and Attachment K planning processes. Southern suggests that the Commission 

grant rehearing to allow for an additional 30 days to process transmission studies or, at a 
Docket Nos. RM05-17-003 and RM05-25-003 - 53 - 

minimum, to process conditional firm and redispatch options. Southern acknowledges 

that the Commission determined in Order No. 890-A that the mere possibility of penalties 

did not justify extension of the 60-day study period. Southern argues, however, that the 

notification and additional posting requirements are in and of themselves penalties, as are 

the requirements to then complete 90 percent of studies within 60 days. 

90. E.ON U.S., EEI, and Southern also ask the Commission to add a clearer due 

diligence standard to section 19.9 of the pro forma OATT. They contend that it is 

necessary to specify in the tariff the circumstances that will excuse the transmission 

provider from penalties. These petitioners argue that failure to articulate a clear standard 

gives the Commission too much discretion in applying penalties and leaves transmission 

providers guessing as to what due diligence means. Southern argues that a lack of clarity 

violates due process and the Commission’s enforcement policies because transmission 

providers do not have adequate notice of the circumstances that will subject them to 

penalties. Southern contends that the risk of late study penalties creates a guilty until 

proven innocent standard that will result in transmission providers favoring speed over 

accuracy, which could harm reliability. 

91. EEI agrees that failure to expressly include a due diligence standard in section 

19.9 provides the Commission undue discretion to apply penalties even if the 

transmission provider has used due diligence in processing request studies. EEI argues 

that the language of section 19.9 does not adequately reflect that the inability to complete 

a study within the 60-day timeframe may be due to customer actions or the need to 

complete other interdependent studies. At a minimum, EEI asks the Commission to 
Docket Nos. RM05-17-003 and RM05-25-003 - 54 - 

amend section 19.9(iii) to state that the transmission provider will not be subject to 

penalties if it demonstrates that it exercised due diligence but nonetheless failed to 

complete a sufficient percentage of its studies within 60 days. EEI also requests that the 

Commission provide additional guidance in this proceeding as to what factors constitute 

due diligence that are sufficiently clear and specific that a transmission provider can 

reasonably determine whether its actions satisfy those guidelines. 

92. E.ON U.S., EEI, and Southern further argue that operational penalties should not 

be imposed until the Commission makes an affirmative finding that the transmission 

provider did not exercise due diligence in processing request studies. EEI and Southern 

argue that due process and the Commission’s enforcement policies require notice and 

hearing procedures prior to application of penalties. If a transmission provider fails to 

complete 90 percent of studies within a 60-day period, EEI suggests that the transmission 

provider be rebuttably presumed to have failed to exercise due diligence in processing 

request studies and that penalties apply only after notice and an opportunity for hearing. 

93. Southern suggests that the explanation of extenuating circumstances in a 

notification filing should automatically suspend the obligation to post additional metrics, 

the obligation to process 90 percent of study requests within 60 days, and the threat of 

monetary penalties until the Commission determines that the extenuating circumstances 

did not exist. Southern states that this would shift the burden of proof to the Commission 

and no longer treat transmission providers as guilty until proven innocent. E.ON U.S. 

argues that deferring the obligation to pay penalties until after the Commission has 

rejected the transmission provider’s explanation for delay would be more efficient 
Docket Nos. RM05-17-003 and RM05-25-003 - 55 - 

because transmission providers would not need to seek refunds from customers to whom 

it has made distribution of penalties for delays the Commission later finds justifiable. 

94. E.ON U.S. seeks clarification that not-for-profit transmission providers are 

responsible for processing transmission request studies within the same time period 

prescribed for other transmission providers and are equally responsible for paying late 

study penalties. E.ON U.S. argues that the ability to request cost recovery of late study 

penalties on a case-by-case basis should not be used to skirt the obligations established in 

Order No. 890. 

95. NYISO asks the Commission to clarify that it did not intend in Order No. 890-A to 

preclude transmission providers from proposing alternative study deadlines pursuant to 

FPA section 205. NYISO states that, because it provides a financial reservation based 

transmission service reservation, it does not receive, or deny, requests for transmission 

service in the way that Order Nos. 888 and 890 contemplate. NYISO states it conducts 

transmission studies only in unusual situations, such as when a customer wants to explore 

whether it would be more economical to pay congestion charges or to fund the 

construction of new transmission facilities in order to obtain incremental congestion 

hedging rights from NYISO. As a result, only a handful of system impact study requests 

have been submitted to the NYISO in the last nine years and, according to NYISO, each 

take substantial time to process. 

96. NYISO also requests clarification regarding the transmission provider’s liability 

when delegating responsibilities for conducting transmission studies. NYISO states that 

it has responsibility for conducting system impact studies under its OATT, while its 
Docket Nos. RM05-17-003 and RM05-25-003 - 56 - 

member transmission owning utilities retained responsibility for conducting facilities 

studies. NYISO asks the Commission to clarify that its member transmission owning 

utilities are responsible for ensuring that facilities studies are conducted in a timely 

manner. NYISO argues that it would be arbitrary and capricious to hold NYISO 

responsible for failures by the member transmission-owning utilities to comply with their 

own obligations. 

Commission Determination

97. The Commission affirms the decision in Order Nos. 890 and 890-A to subject 

transmission providers to operational penalties when they routinely fail to meet the 60-

day due diligence deadlines prescribed in sections 19.2, 19.4, 32.3, and 32.4 of the 

pro forma OATT.64 Transmission providers must have a meaningful stake in meeting 

study timeframes, and the operational penalty structure adopted by the Commission 

provides reasonable financial incentives for transmission providers to exercise due 

diligence in processing service requests in a timely and nondiscriminatory manner. 

98. We disagree that the notice procedures adopted in Order No. 890 give inadequate 

opportunities to explain why studies have been completed late. Due process does not 

require the use of notice and hearing procedures prior to applying operational penalties 

for failing to exercise due diligence in processing transmission service request studies 

within the 60-day study period, nor must the Commission make an affirmative finding 

regarding the justifications provided in a notification filing prior to the application of 

 64 See Order No. 890 at P 1340; Order No. 890-A at P 741. 
Docket Nos. RM05-17-003 and RM05-25-003 - 57 - 

penalties. Section 19.9 of the pro forma OATT requires the submission of a notification 

filing and the application of penalties when certain clearly identified triggering conditions 

occur, i.e., failure to complete studies within the prescribed timeframes. Transmission 

providers therefore have adequate notice of the actions that may lead to penalties. We 

note that transmission customers that pay other operational penalties, like unreserved use 

penalties, do not receive notice or have hearing procedures prior to paying the penalty. 

99. At the same time, to ensure that penalties are not applied to transmission providers 

when study delays are justified, the Commission has provided an opportunity for each 

transmission provider to explain the extenuating circumstances that prevented it from 

meeting the 60-day study completion deadline. Upon review of the notification filing, 

the Commission will waive the penalties if a transmission provider establishes that its noncompliance is the result of extenuating circumstances.65 If the Commission is unable to 

act on the notification filing prior to the date on which the penalties would apply, the 

transmission provider will remain liable for paying the penalties, but is not required to 

distribute those penalties while the notification filing remains pending.66 The 

Commission concluded in Order No. 890, and we affirm here, that this adequately 

balances the transmission provider’s due process rights with the need to provide an 

incentive to the transmission provider to complete studies on a timely basis.67 It is 

 65 See Order No. 890 at P 1343. 

66 See id. P 1349. 

67 Id.
Docket Nos. RM05-17-003 and RM05-25-003 - 58 - 

therefore unnecessary, as petitioners argue, to amend the language of section 19.9 of the 

pro forma OATT to specifically include a due diligence standard or otherwise identify in 

the tariff or elsewhere the circumstances that will excuse the transmission provider from 

penalties. Consideration of the particular extenuating circumstances causing a 

transmission provider to repeatedly miss study deadlines is best left to a case-by-case 

analysis. 

100. We also affirm the decision in Order No. 890-A not to extend the 60-day deadline 

as petitioners request.68 The 60-day deadlines have existed for many years.69 Although 

petitioners challenge that conclusion as unsupported, none dispute the proposition that 60 

days is generally sufficient to complete most transmission studies and, instead, contend 

that certain types of studies take longer or that certain transmission providers have less 

ability to process studies within that period. Yet that is precisely why the Commission 

has provided an opportunity for each transmission provider to demonstrate that 

extenuating circumstances prevented it from timely processing the relevant studies 

notwithstanding its inability to meet the 60-day target. Transmission providers are free to 

discuss in their notification filings any factors they believe are relevant, including any of 

the factors cited by Southern. 

101. In response to E.ON U.S., we affirm that all transmission providers, including 

RTOs and ISOs, are bound by the 60-day timelines of sections 19.2, 19.4, 32.3 and 32.4 

 68 Order No. 890-A P 746. 

69 See Order No. 888-A at 30,324. 
Docket Nos. RM05-17-003 and RM05-25-003 - 59 - 

and the requirements of section 19.9. The Commission clarifies, in response to NYISO, 

that transmission providers are free to make filings under FPA section 205 to seek 

variations from the pro forma OATT and demonstrate that alternative tariff provisions are 

consistent with or superior to the pro forma OATT. With regard to the allocation of 

study responsibilities between NYISO and its transmission owning members, we note 

that the Commission in Docket No. OA08-13-000 determined that the responsibility for 

facility studies, and penalties associated with such studies, rests with the transmission 

owning members under the NYISO tariff.70

5. “Higher Of” Pricing Policy 

102. In Order No. 890, the Commission concluded that changes to the pro forma OATT 

were not needed to address the practice by some transmission providers of quoting 

incremental rates as lump sum payments, a practice that is inconsistent with our 

ratemaking policy. The Commission explained that the transmission provider must 

continue to include a proposed monthly incremental rate with its offer of service 

whenever it proposes to charge the customer an incremental rate. The transmission 

provider also must provide cost support for the derivation of the rate consistent with the 

cost support that the transmission provider would provide to the Commission in a section 

205 rate filing. 

103. The Commission affirmed this decision in Order No. 890-A, noting that the capital 

costs of upgrades, as estimated in a facilities study and eventually specified in a service 

 70 See N.Y. Indep. Sys. Operator, Inc., 123 FERC ¶ 61,134 (2008). 
Docket Nos. RM05-17-003 and RM05-25-003 - 60 - 

agreement through an incremental rate, are not subject to change once the customer has 

executed the service agreement. The Commission explained that it would not be 

appropriate to vary capital costs over the term of such contracts. 

Request for Rehearing

104. Duke, E.ON U.S., and EEI argue that the Commission’s statement that capital 

costs of network upgrades may not vary during the term of a service agreement is 

inconsistent with other sections of the pro forma OATT. Duke notes that section 19.4 of 

the pro forma OATT requires execution (or filing) of a service agreement a mere thirty 

days after completion of the facilities study and, therefore, the service agreement can 

only contain a good faith estimate of network upgrade costs. EEI and E.ON U.S. agree, 

noting section 19.5 further allows for revisions to the good faith estimate to reflect certain 

changed circumstances. EEI and E.ON U.S. contend that transmission providers 

generally are not able to determine the actual cost of required facilities until construction 

is completed, which is long after execution of the service agreement. 

105. EEI and E.ON U.S. argue that not allowing capital costs of upgrades to vary after 

execution of the service agreement will result in the transmission provider either underrecovering the cost of the incremental facilities or the customer overpaying the cost of 

those facilities and, as a result, charges will not be just and reasonable. These petitioners 

suggest that the transmission provider be allowed to modify a service agreement to reflect 

the actual costs of incrementally-charged network upgrades after the facilities are placed 

in service. Duke agrees, arguing that providing for a true-up at a later date is routine 

when facility costs are directly assigned, rather than rolled in. Duke suggests that 
Docket Nos. RM05-17-003 and RM05-25-003 - 61 - 

customers be free to negotiate the ability to terminate the service agreement if a cost 

estimate turns out to far understate actual costs. Duke contends that the Commission’s 

statement regarding the inability of capital costs to vary was merely a general observation 

and that the Commission should review rate changes on a case-by-case basis. 

106. Duke, EEI, and E.ON U.S. further argue that prohibiting recovery of additional 

capital costs that the transmission provider is likely to incur when repairing or replacing 

portions of incrementally-charged upgrades during the term of a service agreement denies 

the transmission provider of its rights under section 205 of the FPA. While the 

incremental facilities on which the cost of service is based (e.g., a specific substation or 

line segment) should not be allowed to vary, EEI contends that transmission providers 

should be allowed recover the additional capital costs associated with repair or 

replacement of those facilities. EEI and E.ON U.S. suggest that remedies such as 

formula rates or a section 205 filing should be available to a transmission provider to 

recover these additional costs. 

Commission Determination

107. The Commission affirms the determination in Order No. 890 that capital costs 

specified in a service agreement are not subject to change once the customer has executed 

the service agreement.71 We clarify, however, that this statement was intended to refer to 

agreements in which a customer and transmission provider have specifically identified 

particular upgrade costs to be paid by the customer, allowing for a clear comparison of 

 71 See Order No. 890-A at P 491. 
Docket Nos. RM05-17-003 and RM05-25-003 - 62 - 

incremental costs to the transmission provider’s embedded cost rate. In such instances, it 

would violate fundamental concepts of contract law, as well as undermine the “higher of” 

pricing policy, to allow either the customer or the transmission provider to unilaterally 

change the costs previously agreed to by the parties. The Commission therefore 

explained in Order No. 890-A that it would not be appropriate to vary, i.e., change, 

capital costs specified in such contracts. 

108. Nothing in Order Nos. 890 or 890-A, however, altered the ability of the 

transmission provider and transmission customer to negotiate alternative pricing 

arrangements such as recovering estimated costs subject to a true-up when upgrades are 

complete. The Commission did not mean to imply in Order No. 890-A that such 

alternative pricing arrangements are necessarily prohibited. As the Commission 

explained in Order No. 890, application of the “higher of” policy to particular cases, 

including proposals to adopt flexible pricing arrangements, is largely fact-specific and 

best addressed on a case-by-case basis during particular rate proceedings.72

6. Other Ancillary Services 

109. In Order No. 890-A, the Commission denied a request by Sempra Global to 

require the transmission provider to offer and make available operating reserves under 

schedules 5 and 6 of the pro forma OATT when transmission service is used to serve load 

outside the transmission provider’s control area. The Commission explained that 

operating reserves are needed to serve load within the control area in the event of system 

 72 See Order No. 890-A at P 883. 
Docket Nos. RM05-17-003 and RM05-25-003 - 63 - 

contingencies and, unless alternative arrangement are made, the transmission provider 

provides these reserves from its own resources. The Commission found that it would be 

inappropriate to require the transmission provider to use its resources to provide 

additional operating reserves to loads in other control areas because the transmission 

providers in those control areas are under their own obligations to make operating 

reserves available. The Commission affirmed those obligations and stated that 

modifications to the pro forma OATT were not necessary to enable generators to engage 

in firm power sales to loads outside of their control area. 

Request for Clarification

110. Sempra Global argues that the Commission did not fully appreciate the problems 

faced by generators in obtaining operating reserves in the WECC. If transmission 

providers are not required to offer operating reserves when transmission service is used to 

serve load outside the transmission provider’s control area, Sempra Global asks that the 

Commission, at a minimum, clarify that generator imbalance service under Schedule 9 of 

the pro forma OATT may be utilized to provide sufficient imbalance energy to keep a 

customer’s schedule whole for at least two hours following a generator derating or forced 

outage, if necessary to allow the generator sufficient time to find and schedule 

replacement energy. Sempra Global states that clarification is needed because, if a 

generator trips within 20 minutes prior to the beginning of the hour, it is too late to 

schedule replacement energy for the hour that is about to begin. 

111. Sempra Global disagrees that the existing requirements of the pro forma OATT 

are sufficient to ensure that operating reserves are available to merchant generators in the 
Docket Nos. RM05-17-003 and RM05-25-003 - 64 - 

WECC, pointing to the differing definitions for “reserves” in the West. Sempra Global 

explains that in the WECC “Operating Reserves” consist of two main components: 

Regulating Reserve and Contingency Reserve.73 According to Sempra Global, WECC’s 

Regulating Reserve could include, but would not necessarily be limited to, regulation 

service offered under schedule 3 of the pro forma OATT, while WECC’s Contingency 

Reserve could include, but would not necessarily be limited to, operating reserve services 

under Schedules 5 and 6 of the pro forma OATT. 

112. Although independent power generators have access to regulation service under 

schedule 3 and generator imbalance service under Schedule 9 from their source balancing 

authority, Sempra Global states that they may not have access to any Contingency 

Reserves for exports from their host balancing authority. Sempra Global contends that it 

can be difficult, if not impossible, for generators to contract for Contingency Reserves 

from a third party without switching to that party’s balancing authority or having a 

dynamic schedule or other telemetry to enable the provider of Contingency Reserves to 

know when the generator trips and to have the reserves provider’s generation respond 

within ten minutes. Sempra Global contends that intra-hour schedule changes are not 

normally allowed by most balancing authorities in the West and that Operating and/or 

Contingency Reserve service can most logically be provided to a balancing authority or 

reserve sharing group, not an individual customer. Sempra Global states that this 

complex type of arrangement could not be practicably implemented for short-term 

 73 Citing WECC Standard BAL-STD-002-0 – Operating Reserves. 
Docket Nos. RM05-17-003 and RM05-25-003 - 65 - 

transactions, or when the output of a generator is split between multiple buyers and 

ultimately delivered into multiple balancing authorities. 

113. Even if a generator were able to contract with a third party to provide operating 

reserves, Sempra Global states that it is unaware of any workable mechanism to assure a 

load (or “sink”) balancing authority that it will have access to such reserves when needed. 

Sempra Global also notes that a generator, as a seller, may not necessarily have a load 

since transactions frequently involve numerous parties between the generator and the 

load. Sempra Global states that a generator may not know who the load is until the 

NERC eTags are generated during the WECC pre-scheduling process, which typically 

takes place the day before the power flows. Even if the sink balancing authority is 

known at the time a long-term transaction is entered into, Sempra Global states that a 

generator still may be unable to procure operating reserves to support the transaction. 

Sempra Global describes a transaction it entered into in 2002 in which none of the host 

transmission provider, the purchaser’s transmission provider, nor the purchaser itself was 

willing to offer to provide Sempra Global with operating reserves to support the 

transaction. Since many LSE purchasers in the West enter into firm energy import 

transactions specifically to reduce their operating reserves obligations, Sempra Global 

states that it would be rarely fruitful for a generator to request, as part of its negotiation 

with a customer, that the customer acquire reserves from its transmission provider. 

Commission Determination

114. The Commission affirms the decision in Order No. 890-A not to require 

transmission providers to offer and make available operating reserves under Schedules 5 
Docket Nos. RM05-17-003 and RM05-25-003 - 66 - 

and 6 of the pro forma OATT when transmission is used to serve load outside the 

transmission provider’s control area. As the Commission explained, operating reserves 

are needed to serve load within the control area in the event of system contingencies. 

Unless alternative arrangements are made, the transmission provider would serve as the 

provider of last resort for these reserves. We continue to believe it would be 

inappropriate to require the transmission provider to provide additional operating reserves 

to loads in other control areas because the transmission providers in those areas are under 

their own obligation to make operating reserves available. 

115. We appreciate Sempra Global’s concern that these obligations may be insufficient 

to enable merchant generators in the WECC to obtain operating reserves in certain 

circumstances. Since its adoption, however, the pro forma OATT has placed the 

obligation to procure operating reserves squarely on load.74 It appears that market rules 

have developed in the WECC in a way that transfers that responsibility from transmission 

customers serving load to those providing resources. It does not follow, however, that 

the pro forma OATT – a tariff of general applicability – must be amended to 

accommodate that regional practice. To the extent transmission providers in the WECC 

wish to amend their tariffs to accommodate the WECC market rules, they may submit 

such variations to the Commission for consideration. Alternatively, the market rules 

 74 See Section 3 of the pro forma OATT. 
Docket Nos. RM05-17-003 and RM05-25-003 - 67 - 

themselves could be amended to reflect the structure of obligations under the pro forma

OATT.75 

C. Non-Rate Terms and Conditions

1. Modifications to Long-Term Firm Point-to-Point Service

116. In Order No. 890, the Commission concluded that the methods for evaluating 

requests for long-term point-to-point transmission service may not be comparable to the 

manner in which transmission service is planned for bundled retail native load and, 

therefore, may no longer be just, reasonable and not unduly discriminatory. To remedy 

this potential for undue discrimination, the Commission amended the pro forma OATT to 

modify planning redispatch requirements and require transmission providers, other than 

most RTOs and ISOs, to offer a conditional firm option to long-term point-to-point 

customers. The Commission affirmed that decision in Order No. 890-A and provided 

certain clarifications regarding the transmission provider’s obligation with regard to 

planning redispatch and conditional firm service. 

a. Requirement to Offer Conditional Firm Service

117. In Order No. 890-A, the Commission denied rehearing of its decision not to 

require transmission providers to offer conditional firm service to network customers. 

 75 We understand that WECC is in the process of developing a revised standard to 

address the responsibility for procuring contingency reserves. WECC Standard BAL002-WECC-1 – Contingency Reserves, available at 

http://www.wecc.biz/documents/library/Standards/2007/BAL-002/BAL-002-WECC-1_1-

25-08.pdf. To the extent that there are any conflicts between the revised WECC standard 

and the pro forma OATT, Sempra Global should raise those concerns when that revised 

standard is submitted for consideration by the Commission. 
Docket Nos. RM05-17-003 and RM05-25-003 - 68 - 

The Commission explained that network customers can designate network resources any 

time firm transmission is available and that the term of the designation can include 

periods of less than a year. Network customers can also use secondary network service to 

access resources during times when firm service is not available. The Commission 

concluded that this flexibility to use designated network resources and secondary network 

service to access undesignated resources already provides a service that is like 

conditional firm that can be used to integrate new resources. The Commission noted, 

however, that transmission providers employ automatic devices, such as special 

protection schemes, to take resources offline during certain system conditions. The 

Commission determined that comparability requires the study of these automatic devices 

for network customers seeking to designate network resources and revised section 32.3 of 

the pro forma OATT to require the study of automatic devices at the request of a network 

customer. 

Requests for Rehearing and Clarification

118. NRECA and TAPS repeat arguments made on rehearing of Order No. 890 that the 

Commission must make conditional firm service available to network customers. 

NRECA contends that a transmission provider will not reject a resource for its own 

bundled retail load simply because it may be unavailable for a few hours per year due to 

congestion. NRECA argues that a transmission provider will, however, reject a request 

by a network customer to designate that same resource because of the same limited 

availability. NRECA concludes that conditional firm network service is therefore 
Docket Nos. RM05-17-003 and RM05-25-003 - 69 - 

necessary to eliminate undue discrimination between network customers serving network 

load and the transmission provider serving its load. 

119. NRECA acknowledges that network customers may designate network resources 

any time firm transmission is available and use secondary network service to access 

resources when firm service is not available. NRECA notes, however, that the 

Commission justified granting conditional firm service to point-to-point customers by 

stating that it made little sense to ask point-to-point customers to cobble together a 

collection of firm and non-firm requests when only the transmission provider has 

information about when service may be available or unavailable.76 NRECA argues that 

network customers should not be required to cobble together service comparable to that 

enjoyed by the transmission provider by designating a resource at some times and 

accessing it through secondary network service at others. 

120. NRECA also argues that the Commission improperly assumed that secondary 

network service can provide a service that resembles conditional firm service. NRECA 

contends that the curtailment priority of secondary network service is inferior to 

conditional firm service. NRECA provides a scenario in which the transmission 

provider, a conditional firm customer and a network customer using secondary network 

service are taking power from the same generator in a location that is constrained ten 

hours per year. NRECA argues that the network customer will be curtailed before the 

transmission owner and before the conditional firm customer. NRECA adds that 

 76 Citing Order No. 890 at P 925. 
Docket Nos. RM05-17-003 and RM05-25-003 - 70 - 

conditional firm customers are considered firm customers and will be able to request 

service far in advance and to the detriment of secondary network customers. NRECA 

concludes that a network customer can only protect itself from loss of service and loss of 

scheduling priority by paying for a network upgrade, which is an obligation not imposed 

on either the transmission provider or the point-to-point customer. 

121. TAPS agrees that the rights of network customers are significantly inferior to 

those of conditional firm customers. TAPS contends that a network customer would be 

required to have perfect knowledge, at the time of a network resource designation, as to 

the effects of constraints in order to limit its decision to periods when transmission is 

adequate to accommodate the request. TAPS argues that information about constraints 

gained as a result of an initial designation request is of minimal value since a reframed 

request would take a later place in the queue. 

122. TAPS also argues that the clarification provided in Order 890-A that excess 

capacity created by transmission upgrades should be allocated first to conditional firm 

customers based on their initial order in the queue further degrades the benefit of network 

service. Even if network customers could predict periods for which to request secondary 

network service and firm designations, TAPS argues that they still could not create a 

service comparable to conditional firm service given the potential benefit of being firmed 

up by excess capacity produced by later upgrades. TAPS contends that the exclusion of 

network customers is discriminatory given the Commission’s finding that transmission 

providers provide conditional service to themselves and the requirement under section 

28.2 of the pro forma OATT that transmission providers “designate resources and loads 
Docket Nos. RM05-17-003 and RM05-25-003 - 71 - 

in the same manner as any Network Customer under Part III of this Tariff.” TAPS 

further asserts that the Commission should clarify whether the customer supporting the 

upgrade is protected from having its upgrade sized to meet the needs of earlier-queued 

conditional firm customers. 

Commission Determination

123. The Commission again affirms the decision not to create a conditional firm 

network service.77 As the Commission explained in Order No. 890-A, the flexibility to 

use designated network resources and secondary network service to access undesignated 

resources already provides a service that is like conditional firm service that can be used 

to integrate new resources. The Commission also revised section 32.3 of the pro forma

OATT to make clear that network customers have the right to request the study of special 

protection schemes like those used by transmission providers in designating resources for 

their native loads.78 Further, Order No. 890 provided that network customers may 

designate off-system resources supported by conditional firm point-to-point service.79 

All of these provisions collectively allow network customers to designate resources in the 

same manner that transmission providers designate resources for their loads. We 

therefore reject arguments that denial of conditional firm network service results in 

 77 Order No. 890-A at P 558. 

78 Id. P 559. 

79 Order No. 890 at P 1091. 
Docket Nos. RM05-17-003 and RM05-25-003 - 72 - 

network service that is inferior to the transmission provider’s own use of the system to 

serve its load. 

124. While we agree with NRECA that conditional firm customers will be able to 

request service in advance of secondary network customers, we find this provides no 

reason to create a new conditional firm service for network customers. Those seeking 

conditional firm service should have the ability to request service ahead of secondary 

network service, a non-firm service. Network customers seeking to designate their 

resources and avoid the use of secondary network service may request the study of 

special protection schemes in their system impact study. Taken together, the rights of 

network customers are therefore not inferior to those of conditional firm customers. 

Indeed, network customers enjoy advantages over conditional firm customers, including 

access to reliability redispatch to avoid curtailment of their loads. In any event, we 

remind NRECA and TAPS that network service and point-to-point service were not 

designed to be identical and the rights and obligations of each type of customer need not 

be the same.80 Comparability does not require the same service be made available to 

network customers and point-to-point customers; rather, the concept applies to the service 

taken for transmission provider’s load by the transmission provider as compared to the 

service for network customer loads. 

125. Additionally, we disagree with the conclusions that NRECA draws from its 

hypothetical scenario involving a network customer using secondary network service, a 

 80 Order No. 890-A at P 559. 
Docket Nos. RM05-17-003 and RM05-25-003 - 73 - 

conditional firm customer, and the transmission provider taking power from the same 

generator. NRECA’s assertion that the transmission provider will not curtail its own 

deliveries from the resource incorrectly assumes that the transmission provider will 

employ redispatch instead of something akin to conditional firm service. If the 

transmission provider is designating network resources using service analogous to 

conditional firm service, it will use a special protection scheme to curtail or limit the 

transmission service for the resource at the same time a network customer’s secondary 

network service is curtailed. The conditional firm customer also should be curtailed 

about the same amount as the secondary network service customer because the 

conditional firm service, by definition, should be subject to curtailment at the secondary 

network service level during the forecast constraints.81 NRECA’s objection to 

conditional firm service is therefore based on a misunderstanding of the new service and 

the way that transmission providers use similar mechanisms to designate resources on 

their systems. 

126. In Order No. 890-A, the Commission clarified that customers supporting upgrades 

have priority access to the capability created by those upgrades even if conditional firm 

customers earlier in the queue opt not to support upgrades.82 The Commission also stated 

 81 We note, however, that network customer load is unlikely to be curtailed due to 

provision of reliability redispatch. In contrast, conditional firm customers’ transactions 

are more likely to be curtailed during conditional periods because reliability redispatch is 

not required for point-to-point service. 

82 Order No. 890-A at P 584. 
Docket Nos. RM05-17-003 and RM05-25-003 - 74 - 

that “any capacity created in excess of the service request should be allocated to those 

planning redispatch and conditional firm customers earlier in the queue, based on their 

order in the queue.”83 TAPS requests clarification of the former determination and 

objects to the latter determination. We clarify that customers supporting upgrades, 

whether through direct assignment or rolled-in pricing, will not have their upgrades sized 

based on the needs of planning redispatch and conditional firm customers that opt not to 

support upgrades. Upon further consideration, we grant rehearing of Order No. 890-A 

with regard to how excess capacity created by upgrades should be allocated among 

transmission customers.84 We conclude that it is premature to make this determination 

given that the complicated series of events leading to such an allocation may never come 

to pass.85 Should transmission providers encounter this series of events, they should file, 

prior to completion of the transmission upgrades, proposed tariff provisions to address 

the allocation of the transmission capacity. 

 83 Id.

84 We note that the clarification provided in Order No. 890-A with regard to the 

allocation of excess capacity was not required to address the original issue raised by 

Southern. See id. P 571, 584. 

85 For this circumstance to present itself, all of the following, at a minimum, must 

occur: (1) conditional firm or planning redispatch service is granted to a customer 

unwilling to support upgrades; (2) a customer seeking service over the same transmission 

capacity agrees to support transmission upgrades to secure its service; (3) the upgrade 

construction is completed; (4) the upgrades create additional capacity that the customer 

supporting the upgrades did not request; and, (5) the conditional firm or planning 

redispatch customer will be taking service when construction is completed. 
Docket Nos. RM05-17-003 and RM05-25-003 - 75 - 

b. Implementation of Planning Redispatch and Conditional 

Firm Service

(1) Characteristics of Service

127. The Commission reiterated in Order No. 890-A that both the transmission provider 

and reliability coordinator play a role in ensuring that adequate reliability is maintained 

when a customer uses third-party provided reliability dispatch. The Commission stated 

that this would entail review of redispatch plans submitted by the customers, coordination 

between the transmission provider and reliability coordinator, and signaling third-party 

generators when the redispatch is needed. It is the customer’s ultimate responsibility, 

however, to ensure that any technical arrangements required by the reliability coordinator 

are in place in order to maintain reliability.

128. With regard to the conditional firm option, the Commission reiterated that 

transmission providers are allowed to add a risk factor to their calculation of annual 

curtailment hours to account for forecasting risks. The Commission clarified that the 

modeling of conditions to determine the number of non-firm curtailments for any 

conditional firm request should not incorporate unexpected events, such as hurricanes and 

ice storms.

Requests for Rehearing and Clarification

129. E.ON U.S. requests that the Commission clarify that the reliability coordinator 

oversees third-party-provided planning redispatch to ensure there is no conflict with 

reliability redispatch. E.ON U.S. also states, however, that third-party planning 

redispatch may have a negative impact on system reliability and ATC and, therefore, the 
Docket Nos. RM05-17-003 and RM05-25-003 - 76 - 

transmission provider should not be completely separated from the third-party planning 

redispatch process. E.ON U.S. nonetheless argues that the reliability coordinator is in the 

best position to monitor the reliability impacts of third-party planning redispatch. E.ON 

U.S. notes that the reliability coordinator and transmission provider sometimes are 

separate entities, as in E.ON U.S.’s case where Tennessee Valley Authority is the 

reliability coordinator. 

130. E.ON U.S. asks for further clarification that unexpected events that are not 

incorporated into the calculation of annual curtailment hours for a conditional firm 

customer do not impact the number of hours the customer can be curtailed. Although the 

Commission acknowledged in Order No. 890-A the need for flexibility in modeling 

various conditions, E.ON U.S. notes the Commission did not specify a level of 

appropriate risk factor to apply when making annual curtailment calculations and further 

found that unexpected events should not be included in calculating annual curtailment 

analysis.86 E.ON U.S. requests that the Commission clarify whether unexpected events 

that are not included in the curtailment hours calculation also do not count towards the 

annual curtailment hours for customers taking conditional firm service. 

Commission Determination

131. In Order No. 890, the Commission directed transmission providers to modify their 

OASIS sites to allow for posting of third-party offers for planning redispatch and to work 

with NAESB to develop the OASIS functionality and any necessary business practice 

 86 Citing Order No. 890-A at P 588. 
Docket Nos. RM05-17-003 and RM05-25-003 - 77 - 

standards to allow for third-party planning redispatch.87 The Commission noted that 

provision of third party planning redispatch required coordination between the customer, 

transmission provider and reliability coordinator, but determined that the customer bears 

the burden to ensure that the necessary contractual and technical arrangements are in 

place to maintain reliability. 

132. We clarify in response to E.ON U.S. that the role of the reliability coordinator in 

coordinating third-party planning redispatch is very limited. The transmission provider 

should have primary responsibility for overseeing the coordination of third-party 

planning redispatch. For example, if third-party planning redispatch impacts ATC, as 

E.ON U.S. suggests, the transmission provider will make this determination and relay 

that information to the customer. It is important to distinguish reliability redispatch, for 

which reliability coordinators generally play a larger role, from planning redispatch. 

Planning redispatch is used to create additional transmission capacity in order to 

accommodate a request for long-term firm transmission service.88 The transmission 

provider or third-party generation operator must plan to dispatch its generator(s) so that 

the requested transmission service, otherwise shown unavailable by the transmission 

provider’s ATC model, may be granted. In comparison, reliability redispatch is used to 

relieve actual system constraints that would otherwise cause curtailment of network 

customer or transmission provider loads. While the reliability coordinator has a larger 

 87 Order No. 890 at P 1007. 

88 See Order No. 890-A at P 603. 
Docket Nos. RM05-17-003 and RM05-25-003 - 78 - 

role to play in reliability redispatch, its role in coordinating third-party provision of 

planning redispatch is very limited. 

133. With regard to our determination that unexpected events should not be 

incorporated into the analysis to determine the number of annual curtailment hours 

applying in any transmission service agreement, we clarify that whether such events 

impact the accounting for annual curtailment hours depends on the curtailment priority of 

the service at the time of the event. If an unexpected event occurs when the conditional 

firm customer is curtailed pursuant to a firm curtailment priority, then the curtailment 

will not count against the annual hours. In determining whether the annual conditional 

curtailments are met, transmission providers should count curtailments made when the 

service is otherwise conditional, i.e., tagged with a secondary network curtailment 

priority, regardless of whether the curtailment occurred during an unexpected event. 

(2) Pricing of Planning Redispatch

134. The Commission affirmed the determination in Order No. 890 that customers 

taking long-term point-to-point service with planning redispatch will have the option of 

paying either (i) the higher of (a) actual incremental costs of redispatch or (b) the 

applicable embedded cost transmission rate on file with the Commission or (ii) a fixed 

rate for redispatch to be negotiated by the transmission provider and customer and subject 

to a cap representing the total fixed and variable costs of the resources expected to 

provide the service. The Commission clarified that, in months in which generationrelated payments are collected for planning redispatch, these payments should be treated 

as a revenue credit to offset the native load customers’ fuel adjustment clause. In months 
Docket Nos. RM05-17-003 and RM05-25-003 - 79 - 

in which the embedded cost rate of transmission is collected for planning redispatch, 

those revenues should be included in the numerator of the rate calculation as a revenue 

credit. The Commission stated that transmission providers may propose in an FPA 

section 205 filing any rate design change that may be necessary through an amendment to 

its formula rate or in a single rate case filing. 

Requests for Rehearing and Clarification

135. E.ON U.S. and EEI request rehearing of the Commission’s pricing provisions with 

respect to the crediting of transmission revenues from planning redispatch. Both repeat 

arguments that the Commission has forced transmission providers’ native load to bear the 

cost of planning redispatch on behalf of point-to-point customers. They ask the 

Commission to grant rehearing to require that, when transmission revenues exceed the 

cost of planning redispatch on a monthly basis, only the amount of the excess 

transmission revenues should be credited against the cost of transmission service and the 

remainder should be credited against the fuel adjustment clause. In the alternative, EEI 

asks the Commission to clarify that, when the transmission revenues exceed the cost of 

redispatch, all of the revenues should be included as a credit in developing the 

transmission cost of service that is used to determine the transmission rate, and the 

generation redispatch costs should be included as a debit in determining the transmission 

cost of service and also should be credited against the fuel adjustment clause. 

136. Southern repeats arguments made on rehearing of Order No. 890 that transmission 

providers should be able to charge planning redispatch customers the embedded costs of 

transmission as well as the generation-related costs of providing redispatch. Southern 
Docket Nos. RM05-17-003 and RM05-25-003 - 80 - 

contends that it is unduly discriminatory and arbitrary and capricious to allow a 

transmission customer to be charged both the costs of generation redispatch and the 

embedded transmission rate when the redispatch is provided by a third party, but not 

when redispatch is provided by the transmission provider. In months in which redispatch 

costs are higher than the embedded cost rate, Southern contends that the transmission 

provider is similarly situated to a third party generator that provides redispatch because 

neither would receive transmission revenues for the additional transmission capability 

created by their redispatch. Southern therefore argues that the policy against “and 

pricing” is unduly discriminatory as applied to transmission providers and that this 

disparate treatment of transmission providers and third-party providers of planning 

redispatch does not withstand scrutiny. 

137. Southern also repeats arguments that the Commission incorrectly concluded in 

Order No. 890-A that planning redispatch creates additional transmission capacity and 

does not take away firm service from native load and network customers. Southern 

contends that planning redispatch merely reallocates, rather than creates, transmission 

capability by forcing certain generators to run and others not to run, thereby changing 

power flows. Southern, raising a new argument, asserts that the provision of planning 

redispatch could result in reduced subsequent, later-queued sales of long-term or shortterm transmission service that might have produced higher transmission revenues than 

the provision of planning redispatch. Southern adds that planning redispatch could 

prevent a network customer from designating a new network resource by taking all of the 

transmission capacity near a generating source. Southern therefore contends that the 
Docket Nos. RM05-17-003 and RM05-25-003 - 81 - 

Commission’s conclusion in Order No. 890-A that the provision of planning redispatch 

provides purely incremental service without effect to existing transmission capacity is 

arbitrary and capricious. 

Commission Determination

138. The Commission grants clarification regarding the rate treatment of generationrelated revenues and revenues from the embedded cost rate of transmission associated 

with planning redispatch. In Order No. 888, the Commission concluded that revenues 

from direct assignment of redispatch costs must be credited to the costs of fuel and 

purchased power expense include in the transmission provider’s wholesale fuel 

adjustment clause.89 This rate treatment is appropriate for all generation-related 

incremental costs, whether the customer pays the embedded cost transmission rate or the 

costs of planning redispatch in any particular month. Therefore, we direct that in months 

in which the embedded cost transmission rate is higher than the generation-related costs 

of providing redispatch, the revenues in excess of the generation-related costs should be 

credited against the costs of transmission service and the remaining revenues, those 

representing the monthly costs of reconfiguring generation resources, should be credited 

against the fuel adjustment clause. 

139. We affirm our decision in Order No. 890-A to deny requests to depart from our 

long-standing prohibition of “and” pricing for planning redispatch service first adopted in 

 89 See Order No. 888 at 31,740. 
Docket Nos. RM05-17-003 and RM05-25-003 - 82 - 

Order No. 888 and followed in Order No. 890.90 In Order No. 890, the Commission 

modified pre-existing planning redispatch obligations and lessened the impact on 

transmission providers (and their customers) with the continuing support of many 

transmission providers, including Southern. The Commission also modified pricing 

provisions to allow for the comparison of monthly generation-related costs of planning 

redispatch to determine the applicable rate. In directing this monthly comparison, the 

Commission rejected the former provisions for basing the charge on a life of the contract 

comparison, concluding that it was appropriate to make planning redispatch service more 

attractive for transmission providers to provide.91 

140. We also affirm, as the Commission did in Order Nos. 890 and 890-A, the 

determination in Order No. 888 that planning redispatch creates additional transmission 

capability.92 We agree with Southern that provision of planning redispatch may have an 

impact on subsequent, later-queued requests to use the transmission grid. It is the nature 

of networked transmission grids that granting any firm point-to-point or network service 

will impact the ability of those seeking to use the system in the future. The impact of 

planning redispatch, or any other firm service, on subsequent uses of the grid does not 

provide a valid reason for lifting the long-standing prohibition on “and” pricing, nor does 

 90 See Order No. 890 at P 1028. 

91 Order No. 890 at P 1025. 

92 Order No. 888-A at 30,267; Order No. 890 at P 1028; Order No. 890-A at 

P 602, n.241. 
Docket Nos. RM05-17-003 and RM05-25-003 - 83 - 

it undermine the determination in Order No. 888-A that planning redispatch creates 

additional transmission capacity. To the extent that Southern argues it could collect 

additional revenues from network customers’ designation of additional resources were 

Southern not providing planning redispatch, we find this unconvincing as network 

customers are charged for service based on their load not the number of resources 

designated. 

2. Rollover Rights

141. In Order No. 890-A, the Commission affirmed the decision in Order No. 890 to 

limit rollover rights to contracts with a minimum term of five years. The Commission 

rejected requests to condition application of the minimum five-year term on a 

demonstration that the relevant generation markets support five-year power supply 

contracts. The Commission explained that the purpose of its reform of the rollover policy 

is to align the rights and obligations of the customer with those of the transmission 

provider, not with the availability of supplies within a market or particular commercial 

practices in a region. The Commission noted that a point-to-point customer does not 

need to have a five-year power contract in order to secure a five-year transmission service 

contract and that the length of the network customer’s service agreement, not the length 

of the power contract supporting a network resource designation, determines whether a 

customer is eligible for rollover. 

142. The Commission also affirmed the decision in Order No. 890 not to eliminate the 

requirement to match competing requests in order to retain rollover rights. With regard 

to the effectiveness of the rollover reforms, the Commission acknowledged that requiring 
Docket Nos. RM05-17-003 and RM05-25-003 - 84 - 

a five-year contract term for pending transmission service requests could cause 

significant disruption to those transmission customers already in the transmission queue 

at the time of the effective date of Order No. 890. The Commission therefore revised 

section 2.2 of the pro forma OATT to provide that the current one-year contract 

commitment requirement will continue to apply to all transmission service requests that 

were in a transmission provider’s transmission queue as of the effective date of the 

reforms adopted in Order No. 890 (i.e., July 13, 2007). 

Requests for Rehearing and Clarification

143. Entergy objects to the Commission’s statement in Order No. 890-A that the term 

of the network customer’s underlying service agreement establishes whether a network 

service reservation is eligible for rollover rights, rather than the term of the relevant 

designated network resources.93 Entergy argues that this determination is an unexplained 

departure from existing rollover policy providing that a network service reservation’s 

eligibility for a rollover is based on the term of the underlying network resource.94 

Entergy argues that network customers most often execute long-term service agreements, 

sometimes up to as many as 30 years in length, that act as umbrella agreements under 

which network customers designate and undesignate different network resources as 

needed to serve network load. Entergy explains that the transmission provider studies 

these reservations as they are submitted and, if they are deliverable to the relevant 

 93 Citing Order No. 890-A at P 645. 

94 Citing Wis. Pub. Power, Inc. v. Wis. Pub. Serv. Corp., 84 FERC ¶ 61,120, at 

61,659 (1998) (WPPI). 
Docket Nos. RM05-17-003 and RM05-25-003 - 85 - 

network load on a firm basis, then they are designated as network resources. 

144. Entergy argues that granting rollover rights based solely on the term of a network 

service agreement, rather than the term of the network resource designation, would 

effectively ignore the firm deliverability requirement underlying all network resources, 

allowing a network customer to execute a multi-year service agreement and obtain 

rollover rights even though it actually may have only designated network resources for as 

little as one day. Entergy contends that this is not the intent of allowing transmission 

customers to designate network resources on a short-term basis and constitutes bad 

transmission policy and undermines reliability. 

145. Cargill objects to the revision of section 2.2 of the pro forma OATT requiring 

existing customers to match the longest-term competing request in order to rollover 

service. Cargill contends that the Commission in Order No. 890 determined that a 

rollover customer must agree to another five-year contract term or match any longer-term 

competing request in order to be eligible for a subsequent rollover,95 but imposed no 

similar requirement when exercising a rollover right when a subsequent rollover is not 

desired. Cargill argues that the new requirement to match the longest-term competing 

request in order to roll over service violates the first-come, first-served principles 

affirmed in Order No. 890. Cargill suggests, for example, that one potential customer 

could submit a competing request well in advance of the incumbent’s rollover, followed 

by a second longer-term competing request submitted by another potential customer 

 95 Citing Order No. 890 at P 1231. 
Docket Nos. RM05-17-003 and RM05-25-003 - 86 - 

closer in time to the incumbent’s rollover. Cargill contends that the revision to section 

2.2 would allow the second customer to effectively preempt the earlier submitted 

competing request simply because both are vying for capacity subject to the incumbent’s 

rollover right. 

146. Cargill argues that the revised language of section 2.2 therefore violates the firstcome, first-served principle of section 13.2 of the pro forma OATT and Commission 

precedent regarding the application of rollover rights,96 nullifying the benefit of being the 

first competitor to submit a competing request for capacity subject to a rollover right. 

Cargill contends that the Commission provided no justification in Order No. 890-A for 

revising its rollover policy to require a customer to match the longest-term competing 

request in order to rollover its service. Cargill also argues that the Commission provided 

no notice or opportunity to comment on this change in Commission policy. 

147. TranServ requests clarification of the Commission’s determination regarding the 

application of the new rollover policies to customer requests queued prior to the effective 

date of the reforms adopted in Order 890. TranServ states that there is continued 

confusion over exactly when customers would be required to request long-term service 

for five years or longer to be granted rollover rights. TranServ contends that customers 

submitting long-term service requests after July 13, 2007, but prior to the effectiveness of 

revised section 2.2 of the OATT, are not granted the right to rollover service under the 

 96 Citing Tenaska Power Services Co. v. Midwest ISO, 106 FERC ¶ 61,230 at 

P 28, reh’g denied, 107 FERC ¶ 61,308 (2004) (Tenaska). 
Docket Nos. RM05-17-003 and RM05-25-003 - 87 - 

previous one-year term rollover policy. TranServ suggests that it may be more 

appropriate to allow transmission customers that submitted requests for one year or 

longer after July 13, 2007, but executed a service agreement prior to the effective date of 

the revised section 2.2, to also be allowed to operate under the one-year term rollover 

policy through their first rollover date. 

Commission Determination

148. The Commission affirms the determination in Order No. 890-A that the length of a 

network customer’s network service agreement, not the length of a power contract 

supporting a network service agreement, determines whether the network customer is 

eligible for rollover rights.97 A network customer’s eligibility for rollover rights is 

distinct from its ability to rollover a particular resource designation. In order for a 

network customer to qualify for rollover rights, it must have a network service agreement 

that satisfies the minimum term necessary for rollover rights. The network customer may 

then continue to designate and undesignate resources pursuant to that service agreement, 

subject to the availability of adequate transmission capability to accommodate the 

request. 

149. This does not, as Entergy argues, depart from Commission precedent regarding the 

network customer’s eligibility for rollover rights. At issue in WPPI was whether a 

network customer is required to compete with other firm uses of the system in order to 

 97 See Order No. 890-A at P 645. 
Docket Nos. RM05-17-003 and RM05-25-003 - 88 - 

continue its resource designation at the time of rollover.98 In considering that issue, the 

Commission first addressed whether rollover rights are available to network customers, 

concluding that all network customers of the transmission system are long-term users of 

the system and, therefore, meet the minimum term required to qualify for rollover rights. 

That determination was appropriate when the one-year contract commitment was in 

effect, since network service agreements are not short-term in nature. However, when the 

Commission extended the minimum contract commitment for rollover rights from one 

year to five years, it was necessary to state more clearly that a network customer’s 

threshold eligibility for rollover rights is linked to the term of its network service 

agreement. 

150. We disagree that this determination undermines the ability of the transmission 

provider to study the potential impact that future resource designations may have on the 

system. Although a network customer rolling over its network service may match a 

competing point-to-point request by extending its network service agreement rather than 

the power contract supporting the resource designation, the Commission specifically 

noted that any subsequent request to designate a network resource would remain subject 

to the requirements of the pro forma OATT, as with any other request to designate a 

 98 See WPPI, 84 FERC at 61,659. 
Docket Nos. RM05-17-003 and RM05-25-003 - 89 - 

network resource.99 The transmission provider will therefore continue to be able to 

consider the deliverability of a particular resource at the time of designation. We note 

that this does not relieve the transmission provider of its obligation under section 28.2 of 

the pro forma OATT to plan, construct, operate and maintain its transmission system in 

order to provide the network customer with network service over the transmission 

system. 

151. We agree with Cargill, however, that the revisions to the language of section 2.2 

of the pro forma OATT adopted in Order No. 890-A do not properly reflect the obligation 

of customers rolling over their service to match competing requests for service. Section 

2.2 of the Order No. 888 pro forma OATT required customers rolling over their service 

to accept a contract term for their new service at least as long as that offered by another 

potential customer.100 This obligation was independent of the separate requirement for 

the rollover customer to request a term of at least one year in order to be eligible for 

rollover rights on the new service. In amending section 2.2 in Order No. 890, the 

Commission inadvertently misstated the matching requirement as requiring the customer 

to match the longer of the term of a competing request or five years in order to roll over 

 99 See Order No. 890-A at P 666, n.264. With regard to competing network 

resource designations, the Commission affirmed in Order No. 890-A that the network 

customer seeking rollover must match the term of the competing network resource power 

contract, consistent with WPPI. See Order No. 890-A at P 666. 

100 See Order No. 888 at 31,665. 
Docket Nos. RM05-17-003 and RM05-25-003 - 90 - 

its service.101 That was incorrect, as the requirement to commit to at least five years of 

service is relevant only to whether the new service has rollover rights, not to whether the 

customer may roll over its existing service. 

152. The Commission corrected this misstatement in Order No. 890-A by amending 

section 2.2 to require customers rolling over the service to match the longest competing 

request.102 As Cargill points out, the Commission’s reference to the longest-term 

competing request could require a rollover customer taking long-term service to match 

the length of any competing long-term request. Under the Commission’s existing 

precedent regarding section 2.2 of the pro forma OATT, however, there would be only 

one potential competitor for rollover customers seeking long-term service, i.e., the first 

customer in the queue requesting competing service.103 We did not intend to modify this 

policy and, therefore, revise the language of section 2.2 to require customers rolling over 

their service to accept a contract term at least equal to a competing request. Any such 

competing request should be identified by the transmission provider consistent with the 

reservation priorities stated in the pro forma OATT. 

 101 See Order No. 890 at Appendix C, pro forma OATT section 2.2. 

102 See Order No. 890-A at P 695 (“An existing customer may rollover its service 

for a term of less than five years, but will not then retain a rollover right for this service. 

We revise section 2.2 of the pro forma OATT to make these requirements clear.”). 

103 See Tenaska, 106 FERC ¶ 61,230 at P 48; see also Cargill Power Marketers, 

LLC v. Southwest Power Pool, Inc., 122 FERC ¶ 61,068 (2008) (distinguishing the 

“equal to a competing request” language of section 2.2 of the pro forma OATT from the 

“longest confirmed competing request” language of SPP’s tariff). 
Docket Nos. RM05-17-003 and RM05-25-003 - 91 - 

153. We affirm the decision in Order No. 890-A to continue to apply the current oneyear contract commitment requirement to all transmission service requests that were in 

the transmission provider’s transmission queue as of the effective date of the reforms 

adopted in Order No. 890, i.e., July 13, 2007.104 This does not mean, as TranServ 

implies, that the five-year contract commitment requirement applies to a customer 

executing a service agreement after that date, but prior to the effectiveness of rollover 

reforms for the particular transmission provider. The Commission reiterated in Order No. 

890-A that the previously existing rollover provisions will remain in effect for the 

transmission provider until such time as the Commission accepts the transmission 

provider’s Attachment K compliance filing.105 We therefore agree with TranServ that the 

one-year contract commitment requirement continues to apply to any customer executing 

a service agreement prior to the effective date of the transmission provider’s revised 

section 2.2, regardless of when the customer’s service request was submitted. 

154. Finally, we take this opportunity to clarify the statement in Order No. 890-A that 

the transmission provider may file the revised rollover language only after the 

transmission provider’s Attachment K planning process is accepted by the 

Commission.106 Transmission providers may file the revised rollover language adopted 

in this proceeding at any point after the Commission has accepted the transmission 

 104 See Order No. 890-A at P 691. 

105 See id. P 684. 

106 See id.
Docket Nos. RM05-17-003 and RM05-25-003 - 92 - 

provider’s Attachment K compliance filing, even if such acceptance is subject to further 

compliance obligations, unless otherwise provided by the Commission in the order 

addressing the Attachment K compliance filing. The effective date of that revised tariff 

language should be commensurate with the date of the filing containing the revised 

language. 

3. Acquisition of Transmission Service

a. Reservation Priority 

155. The Commission confirmed in Order No. 890-A that longer duration service 

requests will continue to have priority over shorter duration service requests, with preconfirmation serving as a tie-breaker for requests of equal duration. Order No. 890-A 

also affirmed the decision to limit priority for pre-confirmation status to short-term firm 

and long-term non-firm requests for service. The Commission also revised sections 1.39, 

17.2 and 18.2 of the pro forma OATT to make clear that pre-confirmation service should 

be available to all eligible customers seeking short-term firm and non-firm transmission 

services. 

Requests for Rehearing and Clarification

156. Schedule 20A Service Providers request rehearing of the Commission’s decision 

to revise the pro forma OATT to allow pre-confirmation by eligible customers that have 

not yet executed service agreements. They argue that this revision is inconsistent with 

how service is reserved on the Phase I/II HVDC-TR transmission system operated by 

ISO New England and Hydro-Quebec TransEnergie. The Schedule 20A Service 

Providers state that they have therefore requested approval of a variation from the pro 
Docket Nos. RM05-17-003 and RM05-25-003 - 93 - 

forma OATT in their October 11, 2007 compliance filing to accommodate their 

reservation practices. 

157. The Schedule 20A Service Providers also argue more generally that OASIS is not 

set up to take pre-confirmed applications and, therefore, there is no means by which an 

eligible customer that is not yet a transmission customer can request pre-confirmed 

service. They argue that limiting pre-confirmation status to transmission customers does 

not preclude new customers from seeking service on an equal footing since the obligation 

to execute a service agreement does not impose an undue burden. To the contrary, they 

argue that substantial implementation difficulties would arise if transmission providers 

are forced to recognize pre-confirmation status for eligible customers that do not have 

access to OASIS. The Schedule 20A Service Providers therefore ask the Commission to 

grant rehearing to provide that the modifications to sections 1.39, 17.2 and 18.2 of the pro 

forma changes are not necessary or appropriate when applications are not a means for 

requesting service through OASIS. 

Commission Determination

158. The Commission affirms the decision in Order No. 890-A to allow eligible 

customers to submit pre-confirmed requests for transmission service.107 The ability to 

submit pre-confirmed requests should not be limited to existing short-term and non-firm 

transmission customers. To the extent this policy conflicts with the operations of any 

given transmission provider, as the Schedule 20A Service Providers suggest, the 

 107 Order No. 890-A at P 790. 
Docket Nos. RM05-17-003 and RM05-25-003 - 94 - 

transmission provider may seek a variation from the terms and conditions of the pro 

forma OATT as necessary to accommodate its operations. We note, for example, that the 

Commission approved the variation requested by the Schedule 20A Service Providers in 

Docket No. ER08-54-000.108

b. Right of First Refusal and Preemption

159. The Commission affirmed in Order No. 890-A the decision not to change the firstcome, first-served nature of the reservation process and the right of first refusal. In 

response to comments that administration of the right of first refusal has the potential to 

create complicated scenarios, such as when scarce capacity exists, the Commission 

declined to expand upon the language of the pro forma OATT to account for every 

factual scenario that could arise. The Commission recognized that certain unique cases 

can present difficult allocation issues, but concluded that such cases arise infrequently 

and that sections 13.2 and 14.2 of the pro forma OATT provide adequate guidance for the 

vast majority of requests. 

Request for Rehearing and Clarification

160. Duke asks the Commission to clarify that a transmission provider need not offer a 

right of first refusal if it cannot be done in a single offering to other eligible customers. 

Duke argues that it is unduly complicated to offer a right of first refusal when the offer 

triggers other transmission customers’ rights of first refusal. If it is the Commission’s 

intention that the transmission provider offer cascading rights of first refusal, Duke 

 108 See ISO New England, Inc., 123 FERC ¶ 61,133 (2008). 
Docket Nos. RM05-17-003 and RM05-25-003 - 95 - 

requests guidance that can be used by NAESB to develop adequate business practices. 

Commission Determination

161. The Commission declines to address in this rulemaking proceeding how 

transmission providers should resolve complicated and fact-specific scenarios such as the 

cascading rights of first refusal described by Duke. Sections 13.2 and 14.2 of the pro 

forma OATT provide adequate guidance for transmission providers to fairly administer 

the vast majority of competing requests, including priorities for determining which 

reservations or requests trump one another as well as the timeframes for eligible 

customers to respond to competing requests. As the Commission explained in Order No. 

890-A, we expect that more complex circumstances such as those suggested by Duke will 

be relatively limited and, therefore, are best addressed on a case-by-case basis.109 

Transmission providers remain free, however, to develop through the NAESB process 

standard procedures for processing complicated request scenarios. 

4. Designation of Network Resources

162. In Order No. 890-A, the Commission clarified certain determinations regarding 

the qualification, documentation and undesignation of resources by a network customer. 

A number of petitioners request additional rehearing and clarification regarding these 

issues. We address each of these issues in turn. 

 109 See Order No. 890-A at P 816. 
Docket Nos. RM05-17-003 and RM05-25-003 - 96 - 

a. Qualification as a Network Resource

(1) LD Contracts

163. In Order No. 890, the Commission affirmed its existing policy that a power 

purchase agreement may be designated as a network resource provided it is not 

interruptible for economic reasons, does not allow the seller to fail to perform under the 

contract for economic reasons, and requires the network customer to pay for the 

purchase. The Commission concluded that power purchases with a firm liquidated 

damages (LD) provision may be eligible for designation as a network resource if the 

contract obligates the supplier, in the case of interruption for reasons other than force 

majeure, to make the aggrieved buyer financially whole by reimbursing them for the 

additional costs, if any, of replacement power. The Commission found that the “make 

whole” LD provisions in EEI’s Master Power Purchase and Sale Agreement’s Firm LD 

product (EEI’s Firm LD Product) and the WSPP Service Schedule C agreement satisfy 

this requirement. In Order No. 890-A, the Commission affirmed its finding that the make 

whole LD provisions in the EEI Firm LD Product and the WSPP Service Schedule C 

agreement are sufficiently firm to make those agreements eligible for designation as a 

network resource. 

Requests for Rehearing and Clarification

164. Duke asks the Commission to confirm that firm LD contracts that are not strictly 

limited to interruption for reliability reasons, such as the EEI Master Agreement Firm LD 

Product, no longer can be designated as network resources in the future. Duke contends 

that the Commission’s statement in Order No. 890-A that “the make whole LD provisions 
Docket Nos. RM05-17-003 and RM05-25-003 - 97 - 

in the EEI firm LD product and WSPP Schedule C agreement are sufficiently firm to 

make those agreements eligible for designation as a network resource” implies that LD 

contracts with make-whole provisions may serve as network resources, even if not 

coupled with provisions that also restrict interruption for reasons other than reliability.110 

Duke requests clarification that both a make-whole provision and a restriction on the 

grounds for interruption, such as the restriction added to the WSPP Schedule C 

agreement, are required for an LD contract to be eligible for network resource status. 

Commission Determination

165. The Commission reiterates that a power purchase agreement must meet all of the 

requirements for designation as a network resource in order to be designated by the 

network customer or transmission provider’s merchant function. The fact that a firm LD 

contract with a make whole provision is sufficient to satisfy one aspect of these 

requirements does not mean that it can be designated as a network resource. The 

remaining requirements must also be met.111 As the Commission made clear in Order 

No. 890, one of those other requirements is that such contracts expressly prohibit 

interruption for reasons other than reliability. 

 110 Citing Order No. 890-A at 832. 

111 See, e.g., id. P 864 (“The Commission did not state that every firm LD contract 

can be designated as a network resource, but rather that they are eligible for 

designation.”) (emphasis in original); Order No. 890 at n. 869 and P 1460 (finding that 

the then current WSPP Schedule C agreement, while meeting requirements for LD 

provisions, otherwise allows interruptions for reasons other than reliability and, as a 

result, would not be eligible for designation as a network resource). 
Docket Nos. RM05-17-003 and RM05-25-003 - 98 - 

166. We disagree with Duke that the EEI firm LD product fails to prohibit interruptions 

for reasons other than reliability. Duke raised a similar argument in its NOPR comments, 

suggesting that the EEI firm LD product allows power to be interrupted for any reason. 

The Commission expressly disagreed, finding that power cannot be interrupted for 

economic reasons under the EEI firm LD product and that the supplier is obligated to 

provide power except in cases of force majeure.112 Duke is therefore mistaken in 

implying that the EEI firm LD product is not eligible for designation under Commission 

policy because of its interruptibility. 

(2) Off-System Resources

167. In Order No. 890, the Commission modified section 29.2(v) to state more clearly 

the information that must be provided for the designation of off-system network 

resources. Among other things, the network customer must provide its transmission 

arrangements on the external transmission system(s). In Order No. 890-A, the 

Commission clarified that this requirement applies to the transmission leg from the 

resource being designated to the transmission provider’s transmission system. If an offsystem power purchase is sufficiently firm to satisfy the designation requirements, the 

transmission provider need not be concerned with the upstream transmission leg(s) from 

the generator(s) to the point where the buyer takes title of the firm power. The 

Commission concluded that the firm contract itself is the resource being designated and, 

therefore, it is not necessary to demonstrate the firmness of the upstream transmission. 

 112 Order No. 890 at P 1452. 
Docket Nos. RM05-17-003 and RM05-25-003 - 99 - 

Requests for Rehearing and Clarification

168. Entergy requests clarification that customers designating an LD contract as an offsystem network resource must still arrange a firm transmission path from the generator to 

the transmission system in order for the purchase to qualify as a network resource, 

regardless of where title of energy and/or capacity actually passes. If the point where title 

to energy and/or capacity underlying a network resource transfers is now relevant, 

Entergy argues that the Commission at a minimum should clarify how that information 

should be relayed to the transmission provider in the network customer’s attestation and 

the procedures, if any, that the transmission provider must undertake in order to ensure 

the veracity of information provided regarding title. Entergy argues that elimination of 

the requirement to support an LD contract with a firm transmission path from the source 

generator would violate the long-standing obligation that third-party transmission 

arrangements delivering purchases be firm and depart from prior governing precedent 

without a reasoned explanation.113

Commission Determination

169. The Commission affirms the determination in Order No. 890-A that the 

requirement in section 29.2(v) of the pro forma OATT to identify the transmission 

arrangements on external systems applies only to the transmission leg from the resource 

being designated to the transmission provider’s transmission system.114 If an off-system 

 113 Citing WPPI, 84 FERC at 61,660. 

114 See Order No. 890-A at P 867. 
Docket Nos. RM05-17-003 and RM05-25-003 - 100 - 

power purchase is sufficiently firm to satisfy the designation requirements, then the 

transmission provider need not be concerned with the upstream transmission leg(s) from 

the generator(s) to the point where the buyer takes title of the firm power. As the 

Commission explained in Order No. 890-A, the resource being designated is the firm 

contract. The network customer therefore must provide to the transmission provider 

information regarding its transmission arrangements only from the point that the network 

customer takes title to the power to the point of delivery to the transmission provider’s 

transmission system, to the extent such points are distinct. 

170. We disagree that this determination conflicts with the Commission’s decision in 

WPPI. In that case, the Commission clarified that the transmission provider could 

require network customers to document compliance with specific requirements for 

obtaining tariff service and that such documentation might include contractual 

materials.115 The Commission did not address whether those requirements include the 

requirement to provide information regarding transmission arrangements between a 

designated power purchase agreement and the source generator. The Commission 

concluded in Order No. 890-A that they do not, given that the designated purchased 

power contract is itself firm.116 Entergy provides no justification for granting rehearing 

of this determination, which is well-founded in the record of this proceeding.117

 115 See WPPI, 84 FERC at 61,660. 

116 See Order No. 890-A at P 867. 

117 See id. P 854-55. 
Docket Nos. RM05-17-003 and RM05-25-003 - 101 - 

171. We disagree that a network customer must separately identify in its attestation the 

location at which the network customer takes title of purchased power. Section 30.2 of 

the pro forma OATT requires the network customer to attest that, among other things, the 

network customer owns or has committed to purchase the resource being designated. 

Implicit in the identification of a resource, then, is the requirement that the network 

customer has or has committed to acquire title to the resource at that location. As the 

Commission explained in Order No. 890-A, it is the responsibility of the network 

customer to assure that the requirements of the pro forma OATT are satisfied prior to 

requesting the designation of a network resource and executing the attestation.118 Review 

of the network customer’s power supply contracts by the transmission provider is 

therefore not necessary. Submitting an attestation with incorrect information as to its 

ownership of purchased power would violate section 30.2, subjecting the network 

customer to potential penalties.119 

b. General

172. In Order No. 890-A, the Commission affirmed the decision to allow off-system 

resources supported by conditional firm point-to-point service to be designated as 

network resources. The Commission declined to require a network customer with a 

designated off-system resource supported by conditional firm service to obtain reserves 

 118 See id. P 921. 

119 See Order No. 890 at P 1523-25. As we note below, the Commission can audit 

a network customer’s compliance with a transmission provider’s OATT in a variety of 

circumstances. 
Docket Nos. RM05-17-003 and RM05-25-003 - 102 - 

or backup resources to cover the periods when the resource supported with conditional 

firm point-to-point transmission service might not be delivered. The Commission 

explained that, in the event conditional firm service is curtailed, the network customer 

would be required to serve its network load from other resources, just as when the 

transmission provider curtails the network customer’s use of secondary network service. 

The Commission reiterated that it is not the responsibility of the transmission provider to 

ensure that the network customer has sufficient resources to meet its load. 

Requests for Rehearing and Clarification

173. Duke argues that the Commission, in its finding that transmission providers are 

not to serve as provider of last resort for their network customers, did not explain how 

transmission providers can realistically avoid this role or how transmission providers or 

their merchant function should be compensated in the likely event that the transmission 

provider will continue to provide power to network customers that are short of energy 

resources. Duke argues that several of the Commission’s policies on designation of 

network resources create or exacerbate risks that network customers may at times be 

short of resources. First, Duke cites the Commission’s decision to allow a network 

customer to deliver power from off-system network resources using conditional firm 

point-to-point service, which it argues may be curtailed with much greater frequency than 

network resources supported by firm point-to-point service. Second, Duke cites the 

Commission’s rejection of requests to allow transmission providers to verify that a 

network resource is supported by firm transmission service upstream of the location of 

the purchase. Third, Duke cites the Commission’s policy of allowing power sales 
Docket Nos. RM05-17-003 and RM05-25-003 - 103 - 

contracts that permit interruption by the seller in order to reliably serve native load to 

qualify as network resources, arguing that such policy may permit double-counting of 

resources. Fourth, Duke states concern regarding the grandfathering of existing 

designations for resources that may be curtailed by the seller for any reason. Finally, 

Duke argues that the Commission’s attestation requirement will not adequately curb the 

practice of designating unqualified resources as network resources due to a lack of audit 

resources. 

174. Duke requests clarification that transmission providers or their merchant functions 

may make section 205 filings to provide for penalty rates for network customers that fail 

to provide enough energy to serve load because network resources were not delivered for 

reasons that could be expected. Duke explains that the most severe penalty for energy 

imbalance service under Schedule 4, 125 percent of incremental cost, is not particularly 

onerous and thus may be insufficient to motivate appropriate behavior. Duke suggests 

that a rate of two times system incremental costs would be appropriate. 

Commission Determination

175. The Commission reiterates that it is not the responsibility of the transmission 

provider to ensure that the network customer has sufficient resources to meet its load. 

The Commission has made clear that the requirements for the designation of network 

resources are not intended to replace or replicate resource adequacy requirements, which 

impose distinct obligations on the transmission provider and its customers.120 To that 

 120 See Order No. 890 at P 1584; Order No. 890-A at P 835, 837. 
Docket Nos. RM05-17-003 and RM05-25-003 - 104 - 

end, the Commission has determined that a resource’s qualification for network resource 

status does not necessarily mean that the resource can or should be counted as firm 

capacity for the purposes of resource adequacy.121 We therefore disagree with Duke that 

the Commission’s policies regarding the designation of network resources creates or 

exacerbates risks that inadequate resources will be available to meet network load. 

176. We decline to address Duke’s suggestion that increased penalty rates may be 

appropriate for network customers that fail to provide enough energy to serve network 

load because their network resources were not delivered for reasons that could be 

expected. The Commission has already made clear that it will consider on a case-by-case 

basis proposals to adopt enhanced imbalance penalties subject to a showing that they are 

necessary under the circumstances.122

c. Documentation for Network Resources

177. In Order No. 890, the Commission required network customers and the 

transmission provider’s merchant function to include a statement with each application 

for network service or to designate a new network resource that attests, for each new 

network resource identified, that (1) the transmission customer owns the resource, or has 

committed to purchase the resource pursuant to an executed contract or where execution 

of a contract is contingent upon the availability of transmission service, and (2) the 

 121 Midwest Indep. Transmission Sys. Operator, Inc., 122 FERC ¶ 61,283, at 

PP 274-76 (2008), reh’g pending. 

122 Order No. 890 at P 676. 
Docket Nos. RM05-17-003 and RM05-25-003 - 105 - 

resource comports with the requirements for designated network resources. The 

Commission stated that these attestations are not required to be submitted until the 

service request is confirmed. In Order No. 890-A, the Commission affirmed the 

requirement that each network customer designating network resources must submit an 

attestation using the language set forth in sections 29.2 and 30.2 of the pro forma OATT. 

178. The Commission also affirmed the decision to require each transmission provider 

to verify that third-party transmission arrangements used to deliver an off-system 

designated network resource to the transmission provider’s system are firm. The 

Commission explained that, under normal circumstances, this verification requirement 

should not present a significant burden for the transmission provider because it only 

requires review of the transmission arrangements from the designated network resource 

to the transmission provider’s system. 

Requests for Rehearing and Clarification 

179. NRECA and TDU Systems seek confirmation that network customers are not 

required to submit attestations until the customer confirms the service request on OASIS. 

These petitioners state that clarification is necessary because some of their members have 

been told by transmission providers that this attestation is required at the time of 

application for service, despite the Commission’s guidance in the preambles of both 

Order Nos. 890 and 890-A.123 NRECA and TDU Systems contend that the language of 

section 29.2 of the pro forma OATT is inconsistent with the preamble and should be 

 123 Citing Order No. 890 at P 1531; Order No. 890-A at P 909. 
Docket Nos. RM05-17-003 and RM05-25-003 - 106 - 

amended because courts have held that language in the preamble of a regulation is not 

controlling over the language in the regulation itself.124 If the Commission actually 

intended to require the attestation at the application stage, they request rehearing on the 

grounds that a network customer cannot be expected to commit to purchase a resource 

before the resource has even been studied by the transmission provider. 

180. Duke states continued concern regarding the effectiveness of the attestation 

requirement submitted by network customers that are not subject to the Commission’s 

ratemaking jurisdiction. Duke maintains that, while the Commission plainly has the 

authority to penalize nonjurisdictional entities that submit false attestations, the 

Commission has never routinely audited such entities. Unless the Commission begins an 

audit program that routinely reviews the designation attestations and supporting contracts 

of nonjurisdictional network customers, Duke argues that noncompliance could be 

viewed as nearly risk-free. Duke contends that this would be inequitable given that 

merchant functions of transmission providers are routinely audited. If the Commission 

lacks the resources to begin routine, random auditing of nonjurisdictional entities’ 

attestations, Duke suggests that the Commission consider permitting market monitors or 

independent entities to at least perform spot checks and report to the Commission if a 

questionable attestation has been made. 

181. TranServ requests clarification of the means by which a transmission provider 

 124 Citing Wyoming Outdoor Council v. U.S. Forest Serv., 165 F.3d 43, 53 (D.C. 

Cir. 1999) (citing Jurgensen v. Fairfax County, Va., 745 F.2d 868, 885 (4th Cir. 1984)) 

and Rowell v. Andrus, 631 F.2d 699, 705 (10th Cir. 1980). 
Docket Nos. RM05-17-003 and RM05-25-003 - 107 - 

may comply with its obligation to verify the firmness of off-system transmission service 

to deliver designated network resources to the transmission provider’s system. TranServ 

requests that only long-term designations of network resources should require an up-front 

verification of any off-system transmission arrangements. For shorter-term designations, 

TranServ suggests that it is sufficient for the transmission provider to verify that all 

transmission arrangements upstream of the provider’s system are supported by firm 

transmission at the time the transactions from the resource are scheduled. TranServ 

contends that this would allow more flexibility on the part of the transmission customer 

in terms of balancing the use of a portfolio of point-to-point transmission rights, while 

still providing the necessary assurance to the transmission provider that the designated 

resource is backed by firm transmission up to the point of delivery to the provider’s 

system. 

Commission Determination

182. The Commission grants rehearing to more accurately state the requirement to 

provide an attestation supporting the designation of network resources pursuant to 

sections 29.2(viii) and 30.2 of the pro forma OATT. In order to designate a network 

resource, section 30.7 of the Order No. 888 pro forma OATT required each network 

customer to demonstrate that (i) it owns or has committed to purchase generation 

pursuant to an executed contract or (ii) execution of a contract is contingent upon the 

availability of transmission service in order to designate a generating resource. In Order 

No. 890, the Commission adopted the attestation requirement as the means by which the 

network customer can make this demonstration, revising sections 29.2 and 30.2 
Docket Nos. RM05-17-003 and RM05-25-003 - 108 - 

accordingly. We affirm this requirement, consistent with the network customer’s 

obligations under section 30.7, and grant rehearing of the Commission’s statements in 

this proceeding indicating that the attestation can instead be submitted at the time a 

resource designation is confirmed, rather than requested. 

183. We disagree with NRECA and TDU Systems that a customer submitting an 

attestation pursuant to section 29.2(viii) or 30.2 of the pro forma OATT must commit to 

purchase the resources for which designation is requested irrespective of the outcome of 

the network service request. Consistent with section 30.7, a network customer may attest 

that execution of a contract is contingent upon the availability of transmission service 

under Part III of the pro forma OATT. Network customers are therefore not required to 

commit to purchasing a resource prior to submitting a request to designate that resource. 

184. In response to Duke, we disagree that it is necessary to establish audit programs 

specifically for nonjurisdictional entities in order to verify attestations supporting their 

network resource designations. The Commission could audit any network customer’s 

compliance with a transmission provider’s OATT in a variety of circumstances. For 

instance, network customers (including nonjurisdictional entities) and the transmission 

provider’s merchant function could be asked to support selected attestations during audits 

of the transmission providers to whom the attestations were submitted. Thus, no special 

audit programs are necessary. 

185. We deny TranServ’s request that the firmness of transmission service used to 

deliver short-term designations of network resources be verified at the time of 

scheduling, rather than at the time of designation. The time of designation is when the 
Docket Nos. RM05-17-003 and RM05-25-003 - 109 - 

transmission provider determines that power from a network resource is deliverable to 

associated network load and, therefore, it is appropriate to require the verification of 

related transmission service at that time. 

d. Undesignation of Network Resources 

(1) Risk to ATC Rights

186. In Order No. 890, the Commission clarified that a request for termination of a 

network resource that is concurrently paired with a request to redesignate that resource at 

a specific point in time will not result in the network customer permanently forfeiting 

rights to use that resource as a designated network resource. Any change in ATC that is 

determined by the transmission provider to have resulted from the temporary termination 

shall be posted on OASIS during this temporary period. The Commission directed 

transmission providers to develop OASIS functionality and, working through NAESB, 

business standards describing the procedures for submitting temporary terminations of 

network resources, including the identification of any related transmission service 

requests to be evaluated concomitantly with the request for temporary termination. 

Requests for Rehearing and Clarification

187. TranServ requests clarification of the sequence of events and requirements for 

releasing transmission capability as a result of a customer’s request to undesignate one 

network resource and replace it with an alternate resource. TranServ argues that the 

process should be deemed similar in nature and treatment to a redirect of firm point-topoint service or a network service request related to the temporary termination of a 
Docket Nos. RM05-17-003 and RM05-25-003 - 110 - 

resource designation, which must be evaluated concomitantly.125 Although TranServ 

acknowledges that network customers should not be “first-in-line” for ATC made 

available from an undesignation, it contends that transmission providers should evaluate 

simultaneous transmission service requests with the knowledge that both resource 

designations will not run concurrently. 

Commission Determination

188. In Order No. 890, the Commission directed transmission providers to evaluate as a 

single request a request for temporary undesignation and related requests for transmission 

service. Transmission providers were therefore directed to develop, working through 

NAESB, business practices allowing for electronic identification of related transmission 

service requests to be evaluated concomitantly with the request for temporary 

undesignation. This was appropriate in light of the Commission’s decision to allow 

network customers to temporarily undesignate their network resources without forfeiting 

the right to use the resource at a specified point in the future, provided they pair the 

temporary undesignation with a request to redesignate the resource. 

189. We find that similar procedures for permanent undesignations of network 

resources are unnecessary given the transmission provider’s obligation to consider 

clustering transmission service requests at the request of customers. If a network 

customer or the transmission provider’s merchant function wishes for the transmission 

provider to take into consideration the effect of a request to terminate a network resource 

 125 Citing Order No. 890 at P 1541. 
Docket Nos. RM05-17-003 and RM05-25-003 - 111 - 

on a concomitant request to designate another network resource, it may request the 

transmission provider to cluster the requests. As TranServ acknowledges, this will not 

alter the priority of the network customer or the transmission provider’s merchant 

function with regard to any ATC that may be made available by undesignating the 

network resource. 

(2) System Sales

190. In Order No. 890-A, the Commission clarified the circumstances in which a 

network customer must undesignate its resources on a unit-specific basis when making a 

system sale. The Commission determined that portions of the seller’s individual network 

resources supporting a sale of system power do not need to be undesignated so long as 

the system sale is itself designated as a network resource by the buyer. Instead, the seller 

should undesignate a portion of its system equal to the amount of the system sale, but 

which is not attributed to any specific generators. If the system sale is not designated as a 

network resource by the buyer, the seller must submit undesignations for each portion of 

each resource supporting the third-party sale. The Commission stated that most, if not 

all, system sales sourced from designated network resources are themselves designated as 

network resources by the buyer and, therefore, few system sales would require 

undesignation on a unit-by-unit basis. 

Requests for Clarification and Rehearing

191. Several petitioners request rehearing and clarification of the requirement that 

generating units supporting a sale of system power that is not designated as a network 
Docket Nos. RM05-17-003 and RM05-25-003 - 112 - 

resource by the buyer must be undesignated by the seller on a unit-by-unit basis.126 

Petitioners generally argue that a seller should not be required to undesignate individual 

resources used to support any system sale of power. 

192. Various petitioners argue that requiring unit-by-unit undesignations by sellers for 

system sales to buyers who use point-to-point service to deliver the power to their load 

has certain undesirable effects, including increased cost and administrative burden for 

system sales, increased tendency of sellers to discriminate against point-to-point buyers, 

foreclosed opportunities for transactions, decreased liquidity, decreased revenues for 

sellers, decreased efficiency in transmission use, and further discouragement of network 

customers from making system sales that do not qualify for designation by the buyer, 

such as sales into day-ahead RTO markets.127 

193. Deseret argues that an LSE’s access to system sales, rather than a unit-specific or 

hub-based sales, further assures delivery of a product necessary to fulfill native load 

requirements. Deseret contends that limiting the flexible undesignation of network 

resources supporting system sales to instances where the buyer designates the purchase as 

a network resource is therefore contrary to section 217 of the FPA. Deseret also argues 

that the Commission’s policy unduly preferences buyers that designate the purchase as a 

network resource. Deseret contends that the Commission has failed to justify why system 

 126 E.g., Deseret, Duke, EEI, NRECA, Pacific Northwest IOUs, Southern, and 

TranServ. 

127 E.g., Deseret, NRECA, Southern, and TAPS. 
Docket Nos. RM05-17-003 and RM05-25-003 - 113 - 

sales to point-to-point customers are more problematic than sales to network customers, 

even where the two buyers would be using the resource in the same way. Southern 

agrees, arguing that there is no support in the record for the Commission’s determination 

regarding the undesignation of resources used for system sales.128 Duke states similar 

concerns, noting that all commenters addressing the issue took the opposite position with 

regard to slice-of-system sales, i.e., that in all cases the slice, not units, should be 

undesignated. 

194. Several petitioners challenge the Commission’s statement that buyers taking 

advantage of system purchases are almost always network customers.129 Deseret explains 

that, in part due to the remote nature of its loads and the composition of the integrated 

transmission grid in its region, it is more efficient, both from a cost perspective and a 

transmission use perspective, for LSEs like itself to serve their loads using point-to-point 

service, either pursuant to an OATT or under pre-Order No. 888 transmission 

arrangements. NRECA and TAPS similarly argue that some LSEs rely on point-to-point 

service instead of network service to serve their native loads. Pacific Northwest IOUs 

state that the majority of system purchases they make are not designated as network 

resources, due at least in part to the fact that many purchases are imported for short-term 

balancing purposes where flexibility is important. Southern agrees that the bulk of 

 128 Citing National Fuel Gas Supply Corp. v. FERC, 468 F.3d 831 (D.C. Cir. 

2006). 

129 E.g., Deseret, NRECA, Pacific Northwest IOUs, Southern, and TAPS. 
Docket Nos. RM05-17-003 and RM05-25-003 - 114 - 

system purchases occur in the short-term markets and suggests that buyers may simply 

not want to bother with designating the purchases as network resources. 

195. TAPS argues that the Commission’s assumption that unit-specific undesignations 

will rarely be required supports elimination of the unit-specific undesignations for all 

transactions. TAPS argues that the better course is to allow system-based undesignation 

for all system sales given that the ATC refinement efforts remain under development by 

NERC and NAESB and the Commission will have the opportunity to revisit the 

undesignation requirements once that work is complete. 

196. Some petitioners challenge the Commission’s underlying concern, as expressed in 

Order No. 888 and referenced in Order No. 890-A, that network customers may have an 

incentive to designate unlimited generation resources absent a prohibition on network 

resources including any portion of a resource that is committed for sale to a third party.130 

Pacific Northwest IOUs argue that a buyer’s decision as to whether or not to designate a 

system sale as a network resource has no bearing on the seller’s incentive or disincentive 

to overdesignate network resources. Pacific Northwest IOUs contend that the seller will 

designate those resources which it believes are necessary to serve its load regardless of 

how a buyer chooses to use a system sale from the seller. Southern agrees, arguing that 

the costs associated with acquiring resources that meet all the requirements for 

designation serve as an appropriate economic incentive not to overdesignate. These 

 130 E.g., EEI, Pacific Northwest IOUs, and Southern (citing Order No. 888 at 

31,753-53; Order No. 890 at P 951). 
Docket Nos. RM05-17-003 and RM05-25-003 - 115 - 

petitioners note that the Commission already addressed concerns regarding overdesignation of network resources in Order No. 888 by determining that “a transmission 

customer, like a transmission provider, has an incentive not to oversubscribe its capacity 

requirements because the cost of excessive reserve margins will be prohibitive.”131 

Pacific Northwest IOUs argue that the procedural complexities associated with 

designating network resources provide further incentives not to overdesignate and that 

such incentives exist regardless of how a buyer uses a system purchase. 

197. EEI contends that a seller will charge more for a power sale that it cannot recall 

without paying a penalty, or that it cannot recall at all, than it will charge for a sale that it 

can recall. EEI argues that there is therefore an additional financial disincentive to 

overdesignate network resources regardless of whether a seller undesignates a slice of its 

entire system or a portion of each generator involved in the sale. EEI acknowledges that 

transmission service that the buyer takes in connection with a system sale might affect 

ATC associated with the transaction. EEI suggests, however, that the Commission 

address any concerns about reservations of transmission service by buyers of slice-ofsystem energy directly through requirements that apply to buyers rather than sellers. EEI 

argues that restricting the type of transmission service the buyer may choose with respect 

to a slice-of-system purchase violates the basic tenet of open access transmission service 

that a transmission customer has the freedom to take whatever transmission service is 

available to it under the pro forma OATT. 

 131 Quoting Order No. 888 at 31,754. 
Docket Nos. RM05-17-003 and RM05-25-003 - 116 - 

198. Some petitioners argue that the policy of requiring resource-specific 

undesignations for system sales which are not designated as network resources by the 

buyer creates implementation problems.132 These petitioners state that the entity making 

the sale may have no knowledge as to whether the sale is being used as a network 

resource and, thus, would not know which undesignation rule to apply. Petitioners also 

note confusion over what the seller’s undesignation obligation would be were the buyer 

to undesignate its purchase after the sale is made, particularly when such activity is not 

known to the seller. E.ON U.S. requests clarification that the seller in a slice-of-system 

sale will not have violated the transmission provider’s OATT as a result of its 

counterparty’s failure to designate or undesignate the network resource as required, so 

long as the seller treated the slice-of-system sale appropriately by relying on the 

counterparty’s actions at the commencement of the transaction. Pacific Northwest IOUs 

question whether an undesignation may be made on a project basis when the resource has 

been designated on a project basis. 

199. Several petitioners question the relevance of an off-system buyer’s designation of 

a system sale as a network resource on another transmission provider system. Duke 

argues that a sale by its merchant function to an off-system network customer designating 

the purchase as a resource and a sale by its merchant function to an off-system power 

marketer intending to resale the power elsewhere must both be accomplished by 

scheduling point-to-point service from Duke to the neighboring system. Duke contends 

 132 E.g., Duke, E.ON U.S., EEI, and Pacific Northwest IOUs. 
Docket Nos. RM05-17-003 and RM05-25-003 - 117 - 

that it makes no sense to require its merchant to undesignate generating units used to 

serve one sale but not the other, particularly since its merchant would have no knowledge 

of subsequent changes in the designation status of the resource purchased by the offsystem network customer. 

200. EEI states similar concern regarding the ability of a seller to know the sink where 

energy from a system power sale is delivered to an off-system buyer since the buyer may 

resell it to another customer. EEI contends that the seller may not have access to the 

OASIS of the transmission provider where the buyer is located and, therefore, may not be 

able to determine whether the buyer has designated the purchase as a network resource. 

EEI notes that, while the Commission directed NERC and NAESB to develop processes 

to allow transmission personnel to obtain access to the OASIS of other transmission 

providers to verify the firmness of transmission arrangements delivering off-system 

designated network resources, the Commission did not grant the same level of OASIS 

access to the merchant function making sales of system power. 

201. Pacific Northwest IOUs ask the Commission to specifically clarify that the 

limitations stated in Order No. 890-A apply only to on-system sales and that sellers may 

undesignate a slice of their system used to support off-system sales regardless of how the 

buyer treats, designates, or uses the purchased power. Pacific Northwest IOUs states that 

this would be consistent with the Commission’s apparent focus on on-system sales in its 

discussion of this issue in Order No. 890-A. In support of their request, Pacific 

Northwest IOUs state that the off-system buyer’s use of the system sale has no impact on 

the seller’s transmission system, including ATC. 
Docket Nos. RM05-17-003 and RM05-25-003 - 118 - 

Commission Determination

202. The Commission affirms the determination in Order No. 890-A that a network 

customer and the transmission provider’s merchant function must undesignate each 

portion of each resource that is used to support a sale of system power if the buyer has 

not designated the purchase as a network resource.133 The requirement that network 

customers undesignate their network resources when making firm third-party sales was 

first imposed in Order No. 888 to ensure that all designated network resources can, in 

fact, be called upon by the transmission provider to serve network load: 

Absent a requirement that network resources always be available to meet a 

customer’s network loads, reliability of service to the network customer as 

well as to native load and other network customers could be affected.... If 

a network customer desires to enter into a firm sale from its designated 

network resource ..., it must eliminate the appropriate resources or portions 

thereof from its designated network resources pursuant to pro forma tariff 

section 30.[134]

203. The restriction on third-party sales from designated network resources therefore 

enhances the ability of the transmission provider to plan and operate its system to 

integrate designated resources with the customer’s loads. Without the restriction, 

transmission providers could reduce ATC by maintaining the same existing transmission 

commitments for anticipated uses of the network customer’s designated resources even 

though the network customer has otherwise committed those same resources to other 

parties on a firm basis. 

 133 See Order No. 890-A at P 947. 

134 See Order No. 888-A at 30,326. 
Docket Nos. RM05-17-003 and RM05-25-003 - 119 - 

204. The Commission in Order No. 890 therefore retained the requirement to 

undesignate network resources that are used to support firm third-party sales, reiterating 

that the undesignation and redesignation requirements work together to promote 

reliability, prevent undue discrimination, promote comparable treatment of customers, 

and increase the accuracy of ATC calculations.135 In Order No. 890-A, however, the 

Commission clarified that the requirement to undesignate on a resource-by-resource basis 

does not apply to system sales in the event the buyer has also designated the purchase as 

a network resource.136 This clarification was provided in response to complaints by 

various petitioners that keeping track of individual generating units and amounts of 

generation from each unit being used to support system sales is unduly burdensome or 

impossible.137 

205. At the outset, we note that the discussion in Order No. 890-A appears to have 

caused confusion by not specifically stating that the exception to the requirement to 

undesignate capacity supporting a system sale on a resource-by-resource basis for system 

sales that are designated as network resources by the buyer applies only to transactions in 

which the buyer and seller are located on the same transmission system. As the 

Commission explained in Order No. 890-A, when a seller’s network resources are used to 

support an on-system system sale, the buyer meets the informational requirements of 

 135 See Order No. 890 at P 1576. 

136 See Order No. 890-A at P 947. 

137 See id. P 936-37. 
Docket Nos. RM05-17-003 and RM05-25-003 - 120 - 

section 29.2(v) simply by identifying the seller’s system as the resource, because the 

detailed operating characteristics for those generators were already provided when they 

were designated by the seller.138 The transmission provider is therefore already modeling 

power transfers from those resources to the seller’s load. The designation of a system 

sale as a network resource by the buyer provides the transmission provider adequate 

information to also simulate power transfers from that resource to the buyer’s load given 

that the transmission provider already has information on the system resources resulting 

from the seller’s designation of the underlying resources. It is not necessary to require 

the seller to undesignate individual resources and, instead, the undesignation can be done 

on a system basis, i.e., by undesignating an aggregate portion of network resources equal 

to the amount of the system sale, but which is not attributed to any specific resource. 

206. In comparison, when the buyer does not designate the system purchase as a 

resource, the buyer will not be using network service to take delivery of associated 

energy. In order for the buyer to schedule point-to-point service to take delivery, the 

transmission customer must identify the points of receipt and delivery for the transaction, 

i.e., the points on the host transmission system where capacity and energy will be 

received from the seller and delivered to the buyer.139 The point-to-point transmission 

 138 See id. P 889. 

139 See pro forma OATT, sections 1.35, 1.36 and 13.7. The Commission therefore 

stated in Order No. 890-A its expectation that most, if not all, system sales sources from 

designated network resources are themselves designated as network resources by the 

buyer. See Order No. 890-A at P 947. Even if this is not the case, as a number of 

petitioners argue, the Commission continues to be concerned that system sales from units 

 (continued...) 
Docket Nos. RM05-17-003 and RM05-25-003 - 121 - 

reservation and the corresponding resource-specific undesignation provide the 

transmission provider with the information it needs regarding location of the particular 

resources being used by the seller to source the transaction in order to model the effect of 

the transaction on its transmission system and set aside ATC accordingly. Without this 

information, transmission capacity associated with integrating the seller’s resources with 

its load could continue to be set aside for the seller’s benefit, even though the resources 

have been committed for sale to third parties on a firm basis.140

207. We therefore disagree that there is no support for distinguishing sales of system 

power that have been designated as network resources by the buyer and those that have 

not. Several petitioners argue that the individual undesignation of network resources 

used to supply system sales will not have an effect on ATC or the reliable operation of 

the transmission system regardless of the type of transmission service used to deliver the 

power to the buyer. EEI, however, acknowledges that the type of transmission service 

used by the buyer of system power may affect ATC associated with the transaction, and 

we agree. It is for that reason that the Commission directed transmission providers to 

address the effect on ATC of designating and undesignating network resources as part of 

 

that are not designated by the buyer as a network resource may impair the reliable 

planning and operation of the transmission provider’s system. 

140 We clarify in response to the Pacific Northwest IOUs that the Commission’s 

reference to the undesignation of “units” in paragraph 947 of Order No. 890-A was 

unintentionally narrow. The restriction on certain third-party sales from a designated 

network resource applies to each resource or portion thereof under section 30.4 of the 

pro forma OATT. 
Docket Nos. RM05-17-003 and RM05-25-003 - 122 - 

the on-going NERC/NAESB ATC standardization effort.141 This does not mean, as EEI 

suggests, that distinguishing the seller’s undesignation obligation on the actions of the 

buyer undermines the buyer’s access to service under the pro forma OATT. The buyer is 

free to request either network or point-to-point service as it believes best fits its needs in 

light of the resources it wishes to deliver. 

208. We disagree that it is unduly burdensome or complicated to condition the seller’s 

ability to make system sales from designated network resources on the buyer’s decision 

to designate the purchase as a network resource. As explained above, the Commission 

has long prohibited firm sales to third parties from any designated network resource. The 

Commission has made an exception for system sales that also have been designated as a 

network resource by a buyer located on the same transmission system. This increases, 

not decreases, opportunities for network customers and the transmission providers’ 

merchant functions to engage in transactions. Although the Commission could further 

expand these opportunities by eliminating the undesignation requirement altogether, to do 

so could adversely affect the transmission provider’s ability to reliably plan and operate 

its system. Because the undesignation restrictions apply equally to all designated 

resources and are necessary to ensure that the transmission provider can provide reliable 

service to all customers, they are therefore consistent with our obligations under FPA 

section 217. 

 141 See Mandatory Reliability Standards for the Bulk-Power System, Order 

No. 693, FERC Stats. & Regs. ¶ 31,242, at P 1041, order on reh’g, Order No. 693-A, 

120 FERC ¶ 61,053 (2007). 
Docket Nos. RM05-17-003 and RM05-25-003 - 123 - 

209. We also conclude that concerns regarding the ability to verify or monitor the 

buyer’s decision to designate a purchase of system power as a network resource are 

overstated in light of the clarification that the buyer and seller must be on the same 

transmission system. In Order No. 890, the Commission directed transmission providers, 

working through NERC, to develop OASIS functionality for the designation of network 

resources and for queries of information provided with designation requests.142 Parties to 

a sale of system power on the same transmission system will therefore have ready access 

to the treatment of the resource. Sellers also may rely on commitments made by the 

buyer to designate the purchase as a network resource. 

210. We reiterate that, if the particular ATC methodology used by a transmission 

provider allows for flexibility in implementing the undesignation requirements for system 

sales, the transmission provider may propose a variation to the pro forma OATT in an 

FPA section 205 filing. In Order No. 890-A, the Commission stated that such requests 

should address the Commission’s concern, as stated in Order No. 888, that network 

customers may have the incentive to designate unlimited generation resources absent a 

prohibition on network resources including any portion of a resource that is committed 

for sale to a third party.143 Several petitioners argue that the Commission 

mischaracterized the concern stated in Order No. 888, since there the Commission found 

that the cost of excessive reserve margins acts as a financial disincentive to overdesignate 

 142 See Order No. 890 at P 1477. 

143 See Order No. 890-A at P 951. 
Docket Nos. RM05-17-003 and RM05-25-003 - 124 - 

resources.144 However, the reason the cost of reserve margins acts as a disincentive to 

overdesignate resources is because designated resources may be used only for certain 

specified purposes. It therefore remains appropriate to require those seeking a variation 

from the pro forma OATT with respect to eligibility for network resource status to 

address the Commission’s concern regarding overdesignation of resources. In addition, 

to the extent necessary, we clarify that the transmission provider should also address the 

Commission’s concern, also stated in Order No. 888-A and reiterated above, that sales 

from designated network resources not impair the reliable planning and operation of the 

transmission provider’s system. 

(3) General

211. In response to requests for rehearing, the Commission in Order No. 890-A 

amended sections 1.26 and 30.4 of the pro forma OATT to make clear that network 

resources do not have to be undesignated before they are used to support the provision of 

reserve energy under a Commission-approved reserve sharing agreement. 

Requests for Rehearing and Clarification

212. E.ON U.S. requests clarification that the exception to the requirement for 

undesignation for resources used to support the provision of reserve energy under a 

Commission-approved reserve sharing agreement also applies to back-up power sales, 

which E.ON U.S. describes as long-term, cost-based sales aimed at substituting power for 

generation that is not available for reasons such as planned or forced outages, 

 144 Quoting Order No. 888 at 31,754. 
Docket Nos. RM05-17-003 and RM05-25-003 - 125 - 

curtailments, or unit de-ratings. E.ON U.S. argues that, like reserve sharing 

arrangements, back-up power sales are made for reliability purposes and may require the 

provision of energy within a timeframe that is too short for the seller to undesignate the 

resource. E.ON U.S. states that back-up power sales are not limited to per se emergency 

situations, but rather are necessary to avert emergencies. 

213. TDU Systems seek clarification of the determination in Order No. 890-A that 

network resources do not have to be undesignated before they are used to support the 

provision of reserve energy under a Commission-approved reserve sharing agreement. 

TDU Systems question whether the Commission intended to impose an additional 

approval process for reserve-sharing agreements being made from designated network 

resources. TDU Systems seek guidance regarding which reserve sharing agreements 

qualify as Commission-approved and what criteria a reserve sharing agreement must 

meet in order to be approved. TDU Systems ask whether, for example, existing 

Commission-approved bilateral interchange agreements providing for emergency and 

maintenance services between and among utilities qualify. TDU Systems also seek 

clarification that Order No. 890-A is not excluding from this exception interchange 

agreements or reserve-sharing agreements among non-jurisdictional entities. 

Commission Determination

214. The Commission declines to expand the categories of third-party sales that can be 

made from designated network resources to include back-up power sales, as requested by 

E.ON U.S. Network customers and the transmission provider’s merchant function are 

permitted to use designated network resources to fulfill obligations under reserve sharing 
Docket Nos. RM05-17-003 and RM05-25-003 - 126 - 

agreements given the particular nature of those transactions, which involve the need to 

deliver power to counterparties promptly during emergency situations. E.ON. U.S. 

acknowledges that, unlike reserve-sharing agreements, back-up power sales are not 

limited to emergency situations. E.ON U.S. has not justified further expanding the 

categories of third-party sales that may be made from designated network resources. 

215. In response to TDU Systems, we grant rehearing of Order No. 890-A to eliminate 

the requirement that a reserve sharing program be approved by the Commission in order 

for a network customer or the transmission provider’s merchant function to use a 

designated network resource to meet its reserve sharing obligations.145 As TDU Systems 

explain, certain reserve sharing arrangements may not be subject to our jurisdiction, and 

the Commission did not intend in Order No. 890-A to establish new criteria for reviewing 

and approving reserve sharing arrangements in this proceeding. We clarify, however, 

that, for purposes of sections 1.26 and 30.4 of the pro forma OATT, a reserve sharing 

program must limit service to the sharing of contingency reserves among the members 

for emergencies146 and the ability to use designated network resources to support reserve 

sharing obligations does not extend to other types of third-party sales. Any use of 

 145 We also revise sections 29.2(viii), 30.1 and 30.2 of the pro forma OATT to 

include references to the use of network resources to meet reserve sharing obligations. 

These tariff revisions do not relieve participants to an otherwise jurisdictional reserve 

sharing arrangement of any obligations they may have under FPA section 205 to obtain 

Commission approval for that arrangement. 

146 See, e.g., Sw. Reserve Sharing Group, 83 FERC ¶ 61,314 (1998), reh’g denied, 

95 FERC ¶ 61,071 (2001). 
Docket Nos. RM05-17-003 and RM05-25-003 - 127 - 

designated network resources for reserve sharing events would be subject to justification 

during an audit. 

5. Clarifications Related to Network Service

216. In Order No. 890-A, the Commission reiterated that the pro forma OATT permits 

transmission customers to exclude the entirety of a discrete load from network service 

and serve such load with the customer’s behind the meter generation and through any 

needed point-to-point service, thereby reducing the network customer’s load ratio share. 

In other situations, use of point-to-point service by network customers is in addition to 

network service and, therefore, does not serve to reduce their network load. With regard 

to concerns about insufficient transmission to serve a network customers’ entire load, the 

Commission stated that it failed to understand how, under normal circumstances, the 

transmission provider has no capacity to serve a load that has been designated by the 

network customer. Once a load has been designated, it is the obligation of the 

transmission provider to serve that load and to plan its system so that the load can be 

accommodated in the future. 

Requests for Rehearing and Clarification

217. Pacific Northwest IOUs request clarification that there is no per se prohibition on 

a transmission customer using both point-to-point and network service to serve load in 

the same balancing authority area, provided that the point-to-point service is acquired in 

addition to the customer’s network service payment obligation and provided that all other 

conditions for the use of point-to-point service are satisfied. Pacific Northwest IOUs 

argue that, for certain compliance and commercial reasons (e.g., lack of sufficient 
Docket Nos. RM05-17-003 and RM05-25-003 - 128 - 

allocated network service), point-to-point service can be an appropriate and important 

adjunct to network service even considering the added cost of the point-to-point 

purchase. Where load ratio share obligations are not at issue, Pacific Northwest IOUs 

argue that transmission customers should be permitted to use both point-to-point and 

network service. 

218. EEI and E.ON U.S. request clarification of the Commission’s statement in Order 

No. 890-A that, once a load has been designated by the network customer, it is the 

obligation of the transmission provider to serve that load and to plan its system so that the 

load can be accommodated in the future.147 These petitioners ask the Commission to 

confirm that a transmission provider has the obligation to serve and plan for a network 

customer’s load only to the extent that the customer has designated sufficient network 

resources to serve that load. In their view, section 28.2 of the pro forma OATT requires 

only that a transmission provider plan for and construct transmission facilities sufficient 

to deliver energy from the network customer’s network resources to meet the customer’s 

network load on a basis comparable to the transmission provider’s delivery of its own 

generating and purchased resources to its native load customers. EEI contends that the 

requirement of section 29.2(v) to provide projections of network resources further 

confirms that the transmission provider is only required to plan for and construct 

transmission facilities required to deliver the network customer’s energy from resources 

designated or forecasted by the network customer. E.ON U.S. argues that failure to 

 147 See Order No. 890-A at P 971. 
Docket Nos. RM05-17-003 and RM05-25-003 - 129 - 

provide the requested clarification could result in transmission providers having to guess 

where facilities will need to be built in order to serve load. 

Commission Determination

219. The Commission clarifies, to the extent necessary, that there is no per se

prohibition on a transmission customer using both point-to-point and network 

transmission service, but that any use of point-to-point service by a network customer 

does not decrease the size of the network customer’s load for purposes of calculating its 

load ratio share payment obligations except to the extent the discrete load being served 

has been excluded in its entirety from network service. In response to EEI and E.ON 

U.S., we clarify that the Commission did not intend in Order No. 890-A to modify the 

obligation of transmission providers under section 28.2 of the pro forma OATT to 

endeavor to construct and place into service sufficient transfer capability to deliver the 

network customer’s network resources to serve its network load on a basis comparable to 

the transmission provider’s delivery of its own generating and purchased resources to its 

native load customers. The statement questioned by petitioners was made in response to 

requests for an exception from load ratio pricing when a particular network load cannot 

be entirely served by the transmission provider’s system without upgrades.148 The 

Commission rejected that request, explaining that the transmission provider should be 

planning its system to serve its network customers’ designated loads and that situations in 

which a particular designated load cannot be served are best addressed on a case-by-case 

 148 See Order No. 890-A at P 971. 
Docket Nos. RM05-17-003 and RM05-25-003 - 130 - 

basis. We agree, however, that the obligation of the transmission provider to adequately 

plan for the needs of its network customers is of course dependent on the network 

customer designating adequate network resources as well as providing information 

regarding its forecasted loads and resources, as required under section 29.2 of the 

pro forma OATT. 

6. OATT Definitions

a. Non-Firm Sales

220. In Order No. 890, the Commission adopted the following definition of Non-Firm 

Sales to identify more clearly those types of sales that are permitted from designated 

network resources: “An energy sale for which receipt or delivery may be interrupted for 

any reason or no reason, without liability on the part of either the buyer or seller.” The 

Commission concluded that it would be inappropriate to adopt commenter suggestions to 

relax the definition of a Non-Firm Sale to include any sale that is not otherwise firm 

enough to be designated as a network resource. 

221. In Order No. 890-A, the Commission clarified that, under normal circumstances, a 

system sale that permits curtailment without penalty to serve the seller’s native load 

would fall within the definition of a Non-Firm Sale since the seller would have the right 

to rely on that capacity in the event it is needed to serve native load, which the 

Commission stated is the principle concern in restricting sales from designated network 

resources to non-firm sales. The Commission disagreed with petitioners arguing that the 

definition of Non-Firm Sales includes transactions that permit interruption with financial 

liability, whether make whole or limited to certain penalties, explaining that any 
Docket Nos. RM05-17-003 and RM05-25-003 - 131 - 

interruption in service that would create liability on the part of the seller would create 

conflicting incentives regarding use of the network resource. 

222. The Commission also denied requests to amend the definition of Non-Firm Sales 

to accommodate the particular market operations of each RTO and ISO. The 

Commission acknowledged that centralized dispatch in those markets may very well 

eliminate any effect that temporary resource undesignations and redesignations have on 

dispatch or ATC calculations and, therefore, tailoring the rules governing the designation 

of network resources to each RTO/ISO market could be appropriate. 

Requests for Rehearing and Clarification

223. TAPS argues that the Commission’s determinations in Order No. 890 regarding 

the sales that may be made from a network resource without undesignation leaves the 

OATT in a state of confusion that will make compliance by transmission providers and 

network customers hazardous. TAPS contends allowing sales that are curtailable for 

native load reliability purposes, not economics, to be considered non-firm sales is in 

conflict with the plain language of the definition, which is strictly limited to sales that are 

interruptible for any or no reason. TAPS contends this modifies without explanation the 

Commission’s clarification provided in Order No. 890 that energy sales that can be 

interrupted to maintain system reliability are considered firm sales.149

224. TAPS argues that the Commission’s focus in Order No. 890-A on the ability to 

curtail sales (without liability) for native or network load is inconsistent with the Non-

 149 Citing Order No. 890 at P 1688, 1692. 
Docket Nos. RM05-17-003 and RM05-25-003 - 132 - 

Firm Sales definition and produces illogical results, allowing the same recallable sale to 

be simultaneously both non-firm for the seller and firm for the buyer and, as a result, be 

designated twice. At the same time, TAPS argues, the Commission expanded the class of 

sales that are neither firm nor non-firm sales by clarifying that sales that may be 

interrupted for any reason, but with potential liability, do not fall within the definition of 

Non-Firm Sales. TAPS contends that finding a total bar on recall for native load 

economic purposes, as in the case of curtailable sales, to be less of a disincentive than the 

ability to recall for native load with potential liability, no matter how small, defies 

common sense and is not supported by evidence. TAPS notes that commenters at the 

July 30 technical conference in this proceeding stated that sellers were moving away 

from participation in the Midwest ISO day-ahead market because of uncertainties about 

redesignation if an undesignated resource selling into that market were needed in real 

time to serve native load due to a real-time contingency. TAPS argues that the obligation 

to pay the real-time locational marginal price (LMP) would not create a disincentive to 

recall the sale if needed for native load and, to the contrary, the flexibility to interrupt for 

any reason or no reason to meet native load needs is so valuable that uncertainties 

associated with undesignation deter sales into RTO markets from resources that are 

designated within and outside the RTO. 

225. TAPS contends that distinguishing between curtailable sales that may be made 

from designated network resources and fully interruptible sales that entail some financial 

liability runs counter to the fundamental principle that it is the nature of the delivery 

obligation, not the LD provisions, that determine whether a resource is sufficiently firm 
Docket Nos. RM05-17-003 and RM05-25-003 - 133 - 

to qualify for designation as a network resource.150 TAPS states that Order No. 890 

suggested that the existence of any financial liability controls whether a sale may be 

deemed a non-firm sale, regardless of the nature of the seller’s obligation to deliver, 

while Order No. 890-A relies on restrictions to warrant exclusion of unit contingent sales 

from the definition of Non-Firm Sales.151 TAPS argues that the Commission has failed to 

provide any consistently applied standard that network customers and transmission 

providers can use to determine whether a sale qualifies as a non-firm sale, much less one 

that conforms to the new definition. 

226. TAPS also argues that the Commission’s determinations do not make sense from 

the standpoint of freeing up ATC since sales that are curtailable for reliability reasons 

may be designated as network resources by both the buyer and seller. TAPS contends 

that dual designation potentially double counts resources for ATC purposes, tying up firm 

ATC potentially on a long-term basis. In contrast, TAPS continues, day-ahead hourly 

sales that can be interrupted for any or no reason, that have been treated as non-firm, and 

that are not and could not be designated as network resources by the buyer require 

undesignation because the potential for any financial consequence of interruption 

disqualifies them as Non-Firm Sales. TAPS argues that the only ATC that might be 

created by such undesignations would be very short-term. Pending the results of on-

 150 Citing id. P 1452; Dynegy Midwest Generation, Inc. v. Commonwealth Edison 

Co., 101 FERC ¶ 61,295, at P 1 (2002), reh’g dismissed as moot, 108 FERC ¶ 61,175 

(2004). 

151 Citing Order No. 890-A at P 1016. 
Docket Nos. RM05-17-003 and RM05-25-003 - 134 - 

going standards development work with NERC and NAESB, TAPS contends it is not 

clear whether such short-term undesignations will create firm capacity more useable than 

the unused non-firm capacity released by the transmission provider without 

undesignation. 

227. TAPS objects to the Commission’s determination in Order No. 890-A that issues 

related to sales into RTO markets should be dealt with in the context of individual 

requests for deviation from the pro forma OATT. Although issues pertaining to the 

ability of a network customer within an RTO to use its network resources to participate in 

the RTO’s day-ahead market can be addressed in the RTO tariff, TAPS argues that 

restrictions on use by a network customer outside the RTO of its network resources 

designated on another transmission provider’s system cannot be addressed through 

modifications to the RTO’s tariff. TAPS therefore argues that the Commission can avoid 

discouraging network customers (and transmission providers) located outside an RTO 

from selling into the RTO’s day-ahead market only by modifying the pro forma OATT. 

228. TAPS maintains that the Commission’s application and interpretation of the NonFirm Sales definition creates new barriers to precisely the type of cross-border sales the 

Commission is trying to encourage.152 TAPS argues that supply limitations resulting 

from applying undesignation requirements to sales into RTO day-ahead markets could 

needlessly increase prices in such markets and potentially affect reliability. Those 

 152 Citing Wis. Pub. Serv. Corp. v. Midwest Indep. Transmission Sys. Operator, 

Inc., 120 FERC ¶ 61,269, at P 58 (2007). 
Docket Nos. RM05-17-003 and RM05-25-003 - 135 - 

located outside RTO markets, TAPS continues, would be most reluctant to sell into RTO 

markets during peak conditions, when transmission is scarce and there are concerns about 

redesignation in the event the energy is needed for native load, thus depriving RTOs of 

supply offers when they need them the most. 

229. TAPS further argues that the lack of clarity in the Commission’s application of the 

Non-Firm Sales definition may discourage sales into organized markets even in situations 

where there is a trivial financial consequence to permissible interruptions that the 

Commission could not rationally conclude would pose any disincentive to recall for 

network load needs. TAPS states that RTO scheduling deadlines may result in some 

short period of liability for real-time LMPs even where market participants retain rights 

to change their bids and schedules. For example, TAPS explains, market participants 

submitting offers into MISO’s real-time market from external generators must provide 

notice prior to 30 minutes before the operating hour in order to make effective their right 

to change their offers in the real-time market, i.e., to interrupt for any or no reason. 

TAPS states that the network customer seeking to recall its interruptible sale would 

therefore be subject to financial consequences during the notice period. TAPS questions 

whether that financial responsibility is sufficient to bar sales without undesignation. 

230. TAPS suggests that the Commission reassess what it was seeking to achieve 

through clarification of the non-firm sales that can be made from network resources 

without undesignation, remove the definition of Non-Firm Sales, and enunciate clear and 

consistent principles for discerning whether, considering the nature of the delivery 

obligation, a sale can be made from a network resource without undesignation. Such 
Docket Nos. RM05-17-003 and RM05-25-003 - 136 - 

principles, TAPS argues, should not assume that the mere existence of any financial 

liability creates improper incentives, thereby giving undue emphasis to what is likely to 

be a minor factor affecting a network customer’s ability to interrupt the sale in favor of 

native load, assuming the contract permits interruption for any reason or no reason. 

TAPS contends that the Commission should expressly permit short-term sales, such as 

sales into organized day-ahead and real-time markets, that involve no obligation to 

deliver (and can be entered by virtual traders with nothing to deliver) to be made from a 

network resource without undesignation. 

231. If the Commission retains the Non-Firm Sale definition, TAPS asks the 

Commission to construe it consistently with the firmness of the delivery obligation and 

make clear that it takes more than the liabilities associated with sales into day-ahead, and 

to eliminate any doubt same-day, RTO markets to disqualify such interruptible sales from 

treatment as Non-Firm Sales. Because of the importance of supporting short-term 

competitive markets, TAPS alternatively requests that the Commission make this clear by 

creating an additional exception to section 30.4 of the pro forma OATT, like the new 

exception for sales pursuant to Commission-approved reserve sharing agreements, to 

permit use of network resources without undesignation for day-ahead and same-day sales 

that are subject to interruptions, without regard to the liabilities associated with such 

interruptions. 

232. At a bare minimum, TAPS argues, the Commission should provide more realistic 

guidelines for the level of liability it views as providing incentives that disqualify an 

interruptible sale from being considered a Non-Firm Sale so that concerns about avoiding 
Docket Nos. RM05-17-003 and RM05-25-003 - 137 - 

potential tariff violations do not discourage transactions that the Commission intends to 

permit without undesignation. TAPS suggests, for example, that the Commission might 

reasonably conclude that liabilities restricted to notice periods applicable to the 

interruption of a sale do not trigger the need for undesignation. TAPS argues that it is 

plainly inconsistent with market realities for the Commission to assume that any liability 

for interruption of a third-party sale, no matter how insignificant, will create incentives 

incompatible with the use of network resources for network load. 

233. E.ON U.S. agrees with TAPS that excluding sales into the Midwest ISO market is 

a disincentive for sellers to participate in that market because the Commission’s 

undesignation requirements are not easily adaptable to such market activity. E.ON U.S. 

also asks the Commission to revise the definition of Non-Firm Sales to include sales into 

organized RTO markets. In the alternative, E.ON U.S. requests that the Commission 

clarify that it will consider transmission providers’ modifications to the definition of 

Non-Firm Sales in order to accommodate sales into RTO/ISO markets. 

Commission Determination

234. The Commission affirms the decision in Order No. 890-A not to amend the 

definition of Non-Firm Sales adopted in Order No. 890.153 Section 30.4 of the pro forma

OATT, as amended in this order, restricts the operation of a network customer’s 

designated network resources such that the output of those facilities does not exceed the 

sum of the network customer’s designated load, non-firm sales, losses, and sales under a 

 153 See Order No. 890-A at P 1016. 
Docket Nos. RM05-17-003 and RM05-25-003 - 138 - 

reserve sharing agreement. This prohibits the transmission provider or a network 

customer from using a designated resource for third-party sales that do not fall within one 

of the specified categories. At times, the Commission has generally referred to this 

prohibition as a limitation on firm third-party sales from designated network resources.154 

To be more specific, network customers may not operate designated network resources 

except for those purposes specified in section 30.4. 

235. The limitation on the use of designated network resources is closely related to the 

restriction on the type of resources that may be designated for use to serve network or 

native load. Together, these rules ensure that only the appropriate amount of network 

resources is designated and, in turn, that excessive amounts of transmission capacity for 

network and native load uses are not set aside and therefore made unavailable to others 

seeking transmission service. We recognize that there is a trade off between the longterm structural efficiencies promoted by the network resource rules and the real-time 

market efficiencies that would come from allowing alternative, flexible use of designated 

network resources. In Order No. 888, the Commission balanced these considerations and 

determined that concerns regarding the over-designation of resources and the reliable 

operation of the system supported the more restrictive rules to which TAPS objects. 

236. In Order No. 888, the Commission explained that restricting the ability to 

designate resources only to those resources that are owned or committed for purchase 

provides a financial incentive for network customers and the transmission provider’s 

 154 See NOPR at P 422; Order No. 890 at P 1539; Order No. 890-A at P 951. 
Docket Nos. RM05-17-003 and RM05-25-003 - 139 - 

merchant function not to oversubscribe their capacity requirements.155 Because a 

designated network resource must be owned or committed for purchase and may be used 

only for certain purposes, network customers and the transmission provider’s merchant 

function are encouraged to designate only those resources that they anticipate needing to 

serve network load. Otherwise, costs would be incurred to acquire resources that could 

go unused. These financial incentives are essential to ensuring just and reasonable 

transmission service to all customers since, each time a network resource is designated, 

the transmission provider sets aside ATC as necessary to allow that resource to be used to 

serve network or native load. If network customers and the transmission providers’ 

merchant function were allowed to earn revenues from alternative sales without 

appropriate limitations, the financial disincentive to over-designate network resources 

would be diminished. This in turn could negatively impact other customers since an 

increase in the number of resource designations can decrease the amount of ATC that is 

available for competing uses. 

237. TAPS fails to address this broader policy consideration and, instead, focuses 

solely on the short-term benefits that may result from relaxing the designation rules. We 

agree that more flexible use of designated network resources could increase efficiencies 

in the short-term, but conclude that such efficiencies would come at the expense of longterm efficiency in the operation of the transmission system. Allowing designated 

network resources to be used for additional short-term purposes as proposed by TAPS 

 155 See Order No. 888 at 31,754. 
Docket Nos. RM05-17-003 and RM05-25-003 - 140 - 

would undermine competing incentives not to over-designate resources in the first place 

and could lead to transmission capacity being set aside for network and native load use to 

the detriment of other customers.156 

238. In light of these competing considerations, the Commission in Order No. 890 

carefully crafted the definition of Non-Firm Sales to ensure that, pursuant to section 30.4, 

network resources are not used to support sales in a way that creates conflicting 

incentives regarding the designation and use of network resources.157 Petitioners have 

failed to demonstrate that elimination or amendment of this definition is either necessary 

or appropriate. TAPS contends that the obligation of a seller to pay the real-time LMP if 

it fails to deliver in response to bids in a day-ahead market may be negligible and, 

therefore, such sales should be considered non-firm for purposes of the network resource 

rules. While that obligation may be minimal in some circumstances, it may be substantial 

in others, particularly during conditions when sellers are most likely to want or need to 

recall such power. The sales that TAPS argues are non-firm enough to be made from a 

network resource do have financial implications, potentially creating disincentives to 

interrupt delivery if capacity is actually needed for native or network load, even though 

ATC may have otherwise been set aside for that use. 

 156 Because rates for network service are calculated on a load-ratio basis, the 

amount of resources designated has no impact on the transmission rate paid by the 

customer and, therefore, does not discourage the over-designation of resources by 

network customers. 

157 See Order No. 890 at P 1691; Order No. 890-A at P 1017. 
Docket Nos. RM05-17-003 and RM05-25-003 - 141 - 

239. We agree with TAPS, however, that the language of the definition does not 

accurately capture the clarification provided in Order No. 890-A that designated network 

resources may be used to support third-party sales that permit curtailment without penalty 

to serve the seller’s network or native load.158 There the Commission stated that such 

sales fall within the definition of Non-Firm Sales since the seller would have the right to 

rely on that capacity in the event it is needed to serve native load. Upon further 

consideration, we conclude that such sales do not fall within the definition of Non-Firm 

Sales because they do not permit interruption for any or no reason, as required by the 

definition. We therefore grant rehearing of the determination that such sales fall within 

the definition of Non-Firm Sales. 

240. We nevertheless affirm the underlying conclusion in Order No. 890-A that 

designated network resources may be used to support sales that permit curtailment 

without penalty to serve the seller’s native or network load and amend section 30.4 of the 

pro forma OATT to make that clear. As the Commission explained in Order No. 890-A, 

those transactions give the seller the right to rely on the underlying capacity in the event 

it is needed to serve native or network load.159 In Order No. 890-A, the Commission 

characterized this as its principal concern in restricting sales from designated network 

 158 See Order No. 890-A at P 1016. 

159 See Order No. 890-A at P 1016. From the seller’s perspective, then, the 

resource satisfies the definition of Network Resource in section 1.26 of the pro forma

OATT because it can be called upon to meet the seller’s load on a non-interruptible basis 

during system reliability conditions. 
Docket Nos. RM05-17-003 and RM05-25-003 - 142 - 

resources to non-firm sales. TAPS misconstrues this statement as indicating the 

Commission is not also concerned about competing incentives created by third-party 

sales from designated network resources or the effect of such sales on the calculation of 

ATC. As we explain above, that is not the case and, to the extent necessary, we clarify 

that the contractual ability of the seller to rely on capacity to serve native or network load 

is but one of the concerns underlying the Commission’s policy restricting the type of 

third-party sales that can be made from network resources. 

241. We acknowledge that, under the Commission’s designation policies, sales that 

may be curtailed without penalty to serve native or network load may be designated as a 

network resource by both the seller and the buyer.160 We also acknowledge that allowing 

these sales from designated network resources could be viewed as inconsistent with the 

policy considerations that cause us to otherwise limit the type of sales that may be made 

from those resources. We conclude, however, that this exception is necessary to ensure 

that the seller is able to access these resources during curtailment conditions, when power 

is needed by the seller to meet its load. Curtailments are triggered by system reliability 

conditions, and requiring the seller to redesignate a network resource in order to recall a 

curtailed delivery would impede the seller’s ability to quickly respond to those 

conditions. We note that transmission providers have been directed to address the effect 

on ATC of designating and undesignating network resources as part of the on-going 

 160 See WPPI, 84 FERC at 61,652 (contracts curtailable by the seller to preserve 

service to native load are eligible for designation as a network resource). 
Docket Nos. RM05-17-003 and RM05-25-003 - 143 - 

NERC/NAESB standardization effort.161 Any concerns regarding the proper modeling of 

designations involving resources that have been sold to others on a curtailable basis 

should be addressed through the NERC/NAESB process. 

242. We disagree with TAPS that allowing sales that are curtailable without penalty to 

be supplied from designated network resources is inconsistent with Order No. 890. 

TAPS contends that the Commission adopted in Order No. 890 the NOPR proposal to 

clarify that, for the purposes of applying section 30.4, energy sales that can only be 

interrupted to maintain system reliability would be considered firm sales.162 Although 

the Commission noted that proposal in Order No. 890, it did not specifically adopt it and, 

instead, simply adopted the proposed definition of Non-Firm Sale and incorporated that 

definition into section 30.4.163 Southern then requested clarification of Order No. 890 on 

this issue, asking whether sales permitting curtailment without penalty to serve the 

seller’s native load can be treated as non-firm sales under section 30.4.164 The 

Commission ultimately addressed the issue, then, in Order No. 890-A by stating that such 

sales could be treated as non-firm sales.165 The Commission corrects that determination 

above, resolving the potential inconsistency cited by TAPS. 

 161 See Order No. 693 at P 1041. 

162 See NOPR at P 462. 

163 Compare Order No. 890 at P 1688 with id. P 1692. 

164 See Order No. 890-A at P 1011. 

165 See id. P 1016. 
Docket Nos. RM05-17-003 and RM05-25-003 - 144 - 

243. We also disagree that the Commission’s treatment of sales curtailable without 

penalty to serve native or network load conflicts with the determination in Order No. 

890-A that, under normal circumstances, unit contingent sales would not fall within the 

definition of a Non-Firm Sale because delivery typically can be interrupted only for the 

specific reasons identified in the underlying agreement.166 While it is true that sales 

curtailable without penalty to serve native or network load may be curtailed only for 

specified reasons, i.e., system reliability conditions, it does not follow that allowing those 

sales to be made from designated network resources conflicts with disallowing unit 

contingent sales. As we explain above, it is appropriate to allow curtailable sales from 

designated network resources because of the particular reliability-related situations giving 

rise to the seller’s ability and need to curtail deliveries for the benefit of native or network 

load. 

244. We reiterate that the Commission is not insensitive to concerns about the effect the 

undesignation policies may have on RTO/ISO markets. As the Commission explained in 

Order No. 890-A, RTOs and ISOs have adopted many variations from the pro forma

OATT to facilitate development of their markets, with some entirely eliminating the 

designation/undesignation requirements for network resources.167 The Commission has 

since specifically directed the Midwest ISO to revise its OATT to eliminate the 

requirement that network resources be undesignated prior to selling into the Midwest ISO 

 166 See id. P 1016. 

167 See id. P 1017. 
Docket Nos. RM05-17-003 and RM05-25-003 - 145 - 

markets, finding that undesignation is not necessary to account for effects on ATC 

because those markets are centrally dispatched without regard to physical transmission 

rights.168 

245. We disagree, however, that changes to the pro forma OATT are necessary to 

facilitate sales into the organized day-ahead markets from designated network resources 

located outside the RTO/ISO regions. Even if such sales are fully interruptible by the 

seller, the competing economic incentives that may arise from failure to deliver support 

the requirement to first undesignate the network resource prior to using it to support such 

sales. As we explain above, failing to require undesignation could result in the host 

transmission provider reducing ATC by maintaining the same existing transmission 

commitments for the seller’s use of the designated network resource even though the 

seller is otherwise using the resource to support off-system sales. 

246. We therefore continue to believe that it is reasonable to require sellers to 

undesignate resources being used to supply third-party sales for which there is liability 

for interruption except in those circumstances identified in section 30.4 of the pro forma

OATT. However, we appreciate that the restrictions on the use of designated network 

resources can have a negative impact on real-time liquidity by limiting the flexibility of 

network customers and the transmission provider’s merchant function. Since adoption of 

the pro forma OATT, the Commission has recognized that there may be circumstances in 

which a transmission provider believes that the pro forma OATT does not provide 

 168 See Midwest Indep. Sys. Operator, Inc., 123 FERC ¶ 61,154, at P 89 (2008). 
Docket Nos. RM05-17-003 and RM05-25-003 - 146 - 

sufficient flexibility and, as a result, transmission providers have been given the 

opportunity to propose superior non-rate terms and conditions to address such 

concerns.169 We encourage network customers and transmission provider merchant 

functions to work with their transmission providers to explore ways to accommodate the 

more flexible use of designated network resources suggested by TAPS without adversely 

affecting other customers or the reliable operation of the system. 

b. Transmission Customer

247. Section 1.49 of the pro forma OATT defines a Transmission Customer as “Any 

Eligible Customer (or its Designated Agent) that (i) executes a Service Agreement, or 

(ii) requests in writing that the Transmission Provider file with the Commission, a 

proposed unexecuted Service Agreement to receive transmission service under Part II of 

the Tariff. This term is used in the Part I Common Service Provisions to include 

customers receiving transmission service under Part II and Part III of this Tariff.” The 

Commission did not amend this definition in Order Nos. 890 or 890-A. 

Requests for Rehearing and Clarification

248. Southern requests rehearing of the Commission’s definition of Transmission 

Customer to include an eligible customer with an executed or proper unexecuted service 

agreement under Part II or Part III of the pro forma OATT. Southern contends that the 

existing reference in the second sentence of the definition merely relates to how the term 

is used in Part I and that the proposed revision is therefore necessary to avoid the 

 169 Order No. 888 at 31,770. 
Docket Nos. RM05-17-003 and RM05-25-003 - 147 - 

implication that a transmission customer does not include network customers in other 

portions of the pro forma OATT. 

Commission Determination

249. The Commission did not propose to amend the definition of Transmission 

Customer in the NOPR, nor did commenters propose such an amendment in response to 

the NOPR. As a result, the definition of Transmission Customer was not addressed in 

Order Nos. 890 or 890-A. Southern’s request for rehearing is therefore beyond the scope 

of this proceeding. 

III. Information Collection Statement

250. The Office of Management and Budget (OMB) regulations require that OMB 

approve certain information collection requirements imposed by an agency.170 The 

revisions to the information collection requirements for transmission providers adopted in 

Order No. 890 were approved under OMB Control Nos. 1902-0233. This order further 

revises these requirements in order to more clearly state the obligations imposed in Order 

No. 890, but does not substantively alter those requirements. OMB approval of this order 

is therefore unnecessary. However, the Commission will send a copy of this order to 

OMB for informational purposes only. 

IV. Document Availability

251. 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 

 170 5 CFR 1320 (2007). 
Docket Nos. RM05-17-003 and RM05-25-003 - 148 - 

contents of this document via the Internet through FERC's Home Page 

(http://www.ferc.gov) and in FERC'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. 

252. From FERC'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. 

253. User assistance is available for eLibrary and the FERC’s website during normal 

business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) 

or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-

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

public.referenceroom@ferc.gov. 

V. Effective Date and Congressional Notification

254. Changes to Order Nos. 890 and 890-A adopted in this order on rehearing and 

clarification will become effective [insert date 60 days from publication in the Federal 

Register]. 

By the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

 Deputy Secretary.
Docket Nos. RM05-17-003 and RM05-25-003 - 149 - 

Appendix A: Petitioners’ Acronyms

Abbreviation Petitioner Names 

APPA Joint Filers 

American Public Power Association, National Rural 

Electric Cooperative Association, Transmission Access 

Policy Study Group, and Transmission Dependent Utility 

Systems 

Cargill Cargill Power Marketers, LLC 

Deseret Desert Generation & Transmission Co-operative, Inc. 

Duke Duke Energy Corp. 

East Texas Cooperatives 

East Texas Electric Cooperative, Inc.; Northeast Texas 

Electric Cooperative, Inc.; Sam Rayburn Generation and 

Electric Cooperative, Inc. and Tex-La Electric 

Cooperative of Texas, Inc. 

EEI Edison Electric Institute 

Entergy Entergy Services, Inc. 

E.ON U.S. E.ON U.S. LLC 

East Texas Cooperatives 

East Texas Electric Cooperative, Inc.; Northeast Texas 

Electric Cooperative, Inc.; Sam Rayburn Generation and 

Electric Cooperative, Inc. and Tex-La Electric 

Cooperative of Texas, Inc. 

FMPA Florida Municipal Power Agency 

Florida Power Florida Power & Light Co. 

NRECA National Rural Electric Cooperative Association 

NYISO New York Independent System Operator 
Docket Nos. RM05-17-003 and RM05-25-003 - 150 - 

Abbreviation Petitioner Names 

Pacific Northwest IOUs Avista Corp., Idaho Power Co., PacifiCorp, Portland 

General Electric Co., and Puget Sound Energy, Inc. 

Schedule 20A Service 

Providers 

Bangor Hydro-Electric Co., Boston Edison Co., 

Commonwealth Electric Co., and Cambridge Electric 

Light Co. 

Sempra Global Sempra Global 

Southern Southern Company Services, Inc. 

TranServ TranServ International, Inc. 

TAPS Transmission Access Policy Study Group 

TDU Systems Transmission Dependent Utilities Systems 
Appendix B

RM05-17-003 & RM05-25-003 

(Issued) 

PRO FORMA OPEN ACCESS 

TRANSMISSION TARIFF 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 2 - 

TABLE OF CONTENTS 

I. COMMON SERVICE PROVISIONS...................................................................10

1 DEFINITIONS...........................................................................................................10

1.1 Affiliate:.........................................................................................................10

1.2 Ancillary Services: ........................................................................................10

1.3 Annual Transmission Costs:..........................................................................10

1.4 Application: ...................................................................................................10

1.5 Commission:..................................................................................................11

1.6 Completed Application:.................................................................................11

1.7 Control Area: .................................................................................................11

1.8 Curtailment:...................................................................................................12

1.9 Delivering Party:............................................................................................12

1.10 Designated Agent: .........................................................................................12

1.11 Direct Assignment Facilities: ........................................................................12

1.12 Eligible Customer:.........................................................................................12

1.13 Facilities Study: .............................................................................................13

1.14 Firm Point-To-Point Transmission Service:..................................................13

1.15 Good Utility Practice:....................................................................................14

1.16 Interruption:...................................................................................................14

1.17 Load Ratio Share: ..........................................................................................14

1.18 Load Shedding:..............................................................................................15

1.19 Long-Term Firm Point-To-Point Transmission Service: ..............................15

1.20 Native Load Customers: ................................................................................15

1.21 Network Customer:........................................................................................15

1.22 Network Integration Transmission Service:..................................................16

1.23 Network Load:...............................................................................................16

1.24 Network Operating Agreement: ....................................................................16

1.25 Network Operating Committee: ....................................................................16

1.26 Network Resource: ........................................................................................17

1.27 Network Upgrades:........................................................................................17

1.28 Non-Firm Point-To-Point Transmission Service: .........................................17

1.29 Non-Firm Sale: ..............................................................................................18

1.30 Open Access Same-Time Information System (OASIS): .............................18

1.31 Part I: .............................................................................................................18

1.32 Part II: ............................................................................................................18

1.33 Part III:...........................................................................................................19

1.34 Parties: ...........................................................................................................19

1.35 Point(s) of Delivery: ......................................................................................19
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 3 - 

1.36 Point(s) of Receipt:........................................................................................19

1.37 Point-To-Point Transmission Service: ..........................................................20

1.38 Power Purchaser: ...........................................................................................20

1.39 Pre-Confirmed Application: ..........................................................................20

1.40 Receiving Party: ............................................................................................20

1.41 Regional Transmission Group (RTG): ..........................................................20

1.42 Reserved Capacity:........................................................................................21

1.43 Service Agreement: .......................................................................................21

1.44 Service Commencement Date: ......................................................................21

1.45 Short-Term Firm Point-To-Point Transmission Service:..............................21

1.46 System Condition: .........................................................................................22

1.47 System Impact Study:....................................................................................22

1.48 Third-Party Sale:............................................................................................22

1.49 Transmission Customer:................................................................................22

1.50 Transmission Provider:..................................................................................23

1.51 Transmission Provider's Monthly Transmission System Peak: ....................23

1.52 Transmission Service:....................................................................................23

1.53 Transmission System:....................................................................................23

2 INITIAL ALLOCATION AND RENEWAL PROCEDURES..............................................24

2.1 Initial Allocation of Available Transfer Capability: .....................................24

2.2 Reservation Priority For Existing Firm Service Customers:.........................24

3 ANCILLARY SERVICES ...........................................................................................26

3.1 Scheduling, System Control and Dispatch Service:......................................29

3.2 Reactive Supply and Voltage Control from Generation or Other Sources 

Service: ......................................................................................................................29

3.3 Regulation and Frequency Response Service: ..............................................29

3.4 Energy Imbalance Service:............................................................................29

3.5 Operating Reserve - Spinning Reserve Service: ...........................................29

3.6 Operating Reserve - Supplemental Reserve Service:....................................29

3.7 Generator Imbalance Service: .......................................................................30

4 OPEN ACCESS SAME-TIME INFORMATION SYSTEM (OASIS)................................30

5 LOCAL FURNISHING BONDS...................................................................................31

5.1 Transmission Providers That Own Facilities Financed by Local Furnishing 

Bonds: .......................................................................................................................31 

5.2 Alternative Procedures for Requesting Transmission Service:.....................31

6 RECIPROCITY..........................................................................................................33

7 BILLING AND PAYMENT .........................................................................................34
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 4 - 

7.1 Billing Procedure:..........................................................................................34

7.2 Interest on Unpaid Balances:.........................................................................35

7.3 Customer Default:..........................................................................................35

8 ACCOUNTING FOR THE TRANSMISSION PROVIDER'S USE OF THE TARIFF..............36

8.1 Transmission Revenues:................................................................................36

8.2 Study Costs and Revenues: ...........................................................................36

9 REGULATORY FILINGS ...........................................................................................37

10 FORCE MAJEURE AND INDEMNIFICATION..............................................................37

10.1 Force Majeure:...............................................................................................37

10.2 Indemnification:.............................................................................................38

11 CREDITWORTHINESS ..............................................................................................39

12 DISPUTE RESOLUTION PROCEDURES .....................................................................39

12.1 Internal Dispute Resolution Procedures:.......................................................39

12.2 External Arbitration Procedures:...................................................................39

12.3 Arbitration Decisions:....................................................................................40

12.4 Costs: .............................................................................................................41

12.5 Rights Under The Federal Power Act: ..........................................................41

II. POINT-TO-POINT TRANSMISSION SERVICE...............................................41

13 NATURE OF FIRM POINT-TO-POINT TRANSMISSION SERVICE ...............................42

13.1 Term: .............................................................................................................42

13.2 Reservation Priority:......................................................................................42

13.3 Use of Firm Transmission Service by the Transmission Provider:...............44

13.4 Service Agreements:......................................................................................45

13.5 Transmission Customer Obligations for Facility Additions or Redispatch 

Costs: .......................................................................................................................46 

13.6 Curtailment of Firm Transmission Service: ..................................................47

13.7 Classification of Firm Transmission Service: ...............................................49

13.8 Scheduling of Firm Point-To-Point Transmission Service: ..........................51

14 NATURE OF NON-FIRM POINT-TO-POINT TRANSMISSION SERVICE ......................52

14.1 Term: .............................................................................................................52

14.2 Reservation Priority:......................................................................................53

14.3 Use of Non-Firm Point-To-Point Transmission Service by the Transmission 

Provider: ....................................................................................................................54

14.4 Service Agreements:......................................................................................54

14.5 Classification of Non-Firm Point-To-Point Transmission Service:..............55

14.6 Scheduling of Non-Firm Point-To-Point Transmission Service:..................56

14.7 Curtailment or Interruption of Service: .........................................................57
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 5 - 

15 SERVICE AVAILABILITY.........................................................................................59

15.1 General Conditions:.......................................................................................59

15.2 Determination of Available Transfer Capability:..........................................59

15.3 Initiating Service in the Absence of an Executed Service Agreement:.........59

15.4 Obligation to Provide Transmission Service that Requires Expansion or 

Modification of the Transmission System, Redispatch or Conditional Curtailment:60

15.5 Deferral of Service: .......................................................................................62

15.6 Other Transmission Service Schedules: ........................................................63

15.7 Real Power Losses:........................................................................................63

16 TRANSMISSION CUSTOMER RESPONSIBILITIES ......................................................63

16.1 Conditions Required of Transmission Customers:........................................63

16.2 Transmission Customer Responsibility for Third-Party Arrangements:.......64

17 PROCEDURES FOR ARRANGING FIRM POINT-TO-POINT TRANSMISSION SERVICE 65

17.1 Application: ...................................................................................................65

17.2 Completed Application:.................................................................................66

17.3 Deposit:..........................................................................................................68

17.4 Notice of Deficient Application: ...................................................................69

17.5 Response to a Completed Application: .........................................................70

17.6 Execution of Service Agreement:..................................................................71

17.7 Extensions for Commencement of Service: ..................................................71

18 PROCEDURES FOR ARRANGING NON-FIRM POINT-TO-POINT TRANSMISSION 

SERVICE .........................................................................................................................72

18.1 Application: ...................................................................................................72

18.2 Completed Application:.................................................................................73

18.3 Reservation of Non-Firm Point-To-Point Transmission Service:.................74

18.4 Determination of Available Transfer Capability:..........................................75

19 ADDITIONAL STUDY PROCEDURES FOR FIRM POINT-TO-POINT TRANSMISSION 

SERVICE REQUESTS........................................................................................................75

19.1 Notice of Need for System Impact Study:.....................................................75

19.2 System Impact Study Agreement and Cost Reimbursement: .......................76

19.3 System Impact Study Procedures:.................................................................77

19.4 Facilities Study Procedures: ..........................................................................79

19.5 Facilities Study Modifications:......................................................................81

19.6 Due Diligence in Completing New Facilities:...............................................81

19.7 Partial Interim Service:..................................................................................82

19.8 Expedited Procedures for New Facilities: .....................................................82

19.9 Penalties for Failure to Meet Study Deadlines:.............................................83

20 PROCEDURES IF THE TRANSMISSION PROVIDER IS UNABLE TO COMPLETE NEW 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 6 - 

TRANSMISSION FACILITIES FOR FIRM POINT-TO-POINT TRANSMISSION SERVICE........85

20.1 Delays in Construction of New Facilities:.....................................................85

20.2 Alternatives to the Original Facility Additions: ............................................86

20.3 Refund Obligation for Unfinished Facility Additions:..................................87

21 PROVISIONS RELATING TO TRANSMISSION CONSTRUCTION AND SERVICES ON THE 

SYSTEMS OF OTHER UTILITIES ......................................................................................87

21.1 Responsibility for Third-Party System Additions:........................................87

21.2 Coordination of Third-Party System Additions: ...........................................88

22 CHANGES IN SERVICE SPECIFICATIONS..................................................................89

22.1 Modifications On a Non-Firm Basis: ............................................................89

22.2 Modification On a Firm Basis: ......................................................................90

23 SALE OR ASSIGNMENT OF TRANSMISSION SERVICE ..............................................91

23.1 Procedures for Assignment or Transfer of Service: ......................................91

23.2 Limitations on Assignment or Transfer of Service: ......................................92

23.3 Information on Assignment or Transfer of Service: .....................................93

24 METERING AND POWER FACTOR CORRECTION AT RECEIPT AND DELIVERY 

POINTS(S) .......................................................................................................................93

24.1 Transmission Customer Obligations: ............................................................93

24.2 Transmission Provider Access to Metering Data:.........................................94

24.3 Power Factor:.................................................................................................94

25 COMPENSATION FOR TRANSMISSION SERVICE ......................................................94

26 STRANDED COST RECOVERY .................................................................................94

27 COMPENSATION FOR NEW FACILITIES AND REDISPATCH COSTS ..........................95

III. NETWORK INTEGRATION TRANSMISSION SERVICE .............................95

28 NATURE OF NETWORK INTEGRATION TRANSMISSION SERVICE ............................96

28.1 Scope of Service:...........................................................................................96

28.2 Transmission Provider Responsibilities: .......................................................96

28.3 Network Integration Transmission Service:..................................................97

28.4 Secondary Service: ........................................................................................97

28.5 Real Power Losses:........................................................................................98

28.6 Restrictions on Use of Service: .....................................................................98

29 INITIATING SERVICE...............................................................................................99

29.1 Condition Precedent for Receiving Service: .................................................99

29.2 Application Procedures: ..............................................................................100

29.3 Technical Arrangements to be Completed Prior to Commencement of 

Service: ....................................................................................................................106
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 7 - 

29.4 Network Customer Facilities:......................................................................107

29.5 Filing of Service Agreement: ......................................................................107

30 NETWORK RESOURCES ........................................................................................108

30.1 Designation of Network Resources:............................................................108

30.2 Designation of New Network Resources: ...................................................108

30.3 Termination of Network Resources: ...........................................................109

30.4 Operation of Network Resources: ...............................................................111

30.5 Network Customer Redispatch Obligation:.................................................112

30.6 Transmission Arrangements for Network Resources Not Physically 

Interconnected With The Transmission Provider:...................................................113

30.7 Limitation on Designation of Network Resources:.....................................113

30.8 Use of Interface Capacity by the Network Customer: ................................113

30.9 Network Customer Owned Transmission Facilities:...................................114

31 DESIGNATION OF NETWORK LOAD ......................................................................115

31.1 Network Load:.............................................................................................115

31.2 New Network Loads Connected With the Transmission Provider: ............115

31.3 Network Load Not Physically Interconnected with the Transmission 

Provider: ..................................................................................................................115

31.4 New Interconnection Points: .......................................................................116

31.5 Changes in Service Requests:......................................................................116

31.6 Annual Load and Resource Information Updates: ......................................117

32 ADDITIONAL STUDY PROCEDURES FOR NETWORK INTEGRATION TRANSMISSION 

SERVICE REQUESTS......................................................................................................118

32.1 Notice of Need for System Impact Study:...................................................118

32.2 System Impact Study Agreement and Cost Reimbursement: .....................119

32.3 System Impact Study Procedures:...............................................................120

32.4 Facilities Study Procedures: ........................................................................121

32.5 Penalties for Failure to Meet Study Deadlines:...........................................123

33 LOAD SHEDDING AND CURTAILMENTS................................................................123

33.1 Procedures: ..................................................................................................123

33.2 Transmission Constraints: ...........................................................................124

33.3 Cost Responsibility for Relieving Transmission Constraints: ....................125

33.4 Curtailments of Scheduled Deliveries:........................................................125

33.5 Allocation of Curtailments: .........................................................................125

33.6 Load Shedding:............................................................................................126

33.7 System Reliability: ......................................................................................126

34 RATES AND CHARGES ..........................................................................................127

34.1 Monthly Demand Charge: ...........................................................................127
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 8 - 

34.2 Determination of Network Customer's Monthly Network Load:................128

34.3 Determination of Transmission Provider's Monthly Transmission System 

Load: .....................................................................................................................128 

34.4 Redispatch Charge:......................................................................................128

34.5 Stranded Cost Recovery: .............................................................................129

35 OPERATING ARRANGEMENTS ..............................................................................129

35.1 Operation under The Network Operating Agreement:................................129

35.2 Network Operating Agreement: ..................................................................129

35.3 Network Operating Committee: ..................................................................131

SCHEDULE 1 ................................................................................................................132

SCHEDULING, SYSTEM CONTROL AND DISPATCH SERVICE ....................................132

SCHEDULE 2 ................................................................................................................133

REACTIVE SUPPLY AND VOLTAGE CONTROL FROM GENERATION SOURCES 

SERVICE ......................................................................................................................133

SCHEDULE 3 ................................................................................................................135

REGULATION AND FREQUENCY RESPONSE SERVICE...............................................135

SCHEDULE 4 ................................................................................................................136

ENERGY IMBALANCE SERVICE..................................................................................136

SCHEDULE 5 ................................................................................................................138

OPERATING RESERVE - SPINNING RESERVE SERVICE.............................................138

SCHEDULE 6 ................................................................................................................139

OPERATING RESERVE - SUPPLEMENTAL RESERVE SERVICE ..................................139

SCHEDULE 7 ................................................................................................................140

LONG-TERM FIRM AND SHORT-TERM FIRM POINT-TO-POINT..............................140

SCHEDULE 8 ................................................................................................................142

NON-FIRM POINT-TO-POINT TRANSMISSION SERVICE...........................................142

SCHEDULE 9 ................................................................................................................144

GENERATOR IMBALANCE SERVICE...........................................................................144

ATTACHMENT A ........................................................................................................147

FORM OF SERVICE AGREEMENT FOR FIRM POINT-TO-POINT TRANSMISSION 

SERVICE ......................................................................................................................147
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 9 - 

ATTACHMENT A-1.....................................................................................................151

FORM OF SERVICE AGREEMENT FOR THE RESALE, REASSIGNMENT OR TRANSFER 

OF POINT-TO-POINT TRANSMISSION SERVICE........................................................151

ATTACHMENT B ........................................................................................................155

FORM OF SERVICE AGREEMENT FOR NON-FIRM POINT-TO-POINT TRANSMISSION 

SERVICE ......................................................................................................................155

ATTACHMENT C ........................................................................................................157

METHODOLOGY TO ASSESS AVAILABLE TRANSFER CAPABILITY..........................157

ATTACHMENT D ........................................................................................................159

METHODOLOGY FOR COMPLETING A SYSTEM IMPACT STUDY ..............................159

ATTACHMENT E ........................................................................................................160

INDEX OF POINT-TO-POINT TRANSMISSION SERVICE CUSTOMERS.......................160

ATTACHMENT F.........................................................................................................161

SERVICE AGREEMENT FOR NETWORK INTEGRATION TRANSMISSION SERVICE...161

ATTACHMENT G........................................................................................................162

NETWORK OPERATING AGREEMENT........................................................................162

ATTACHMENT H........................................................................................................163

ANNUAL TRANSMISSION REVENUE REQUIREMENT FOR NETWORK INTEGRATION 

TRANSMISSION SERVICE ............................................................................................163

ATTACHMENT I..........................................................................................................164

INDEX OF NETWORK INTEGRATION TRANSMISSION SERVICE CUSTOMERS..........164

ATTACHMENT J .........................................................................................................165

PROCEDURES FOR ADDRESSING PARALLEL FLOWS ................................................165

ATTACHMENT K........................................................................................................166

TRANSMISSION PLANNING PROCESS.........................................................................166

ATTACHMENT L ........................................................................................................168

CREDITWORTHINESS PROCEDURES ..........................................................................168
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 10 - 

I. COMMON SERVICE PROVISIONS

1 Definitions 

1.1 Affiliate: 

With respect to a corporation, partnership or other entity, each such other 

corporation, partnership or other entity that directly or indirectly, through one 

or more intermediaries, controls, is controlled by, or is under common control 

with, such corporation, partnership or other entity. 

1.2 Ancillary Services: 

Those services that are necessary to support the transmission of capacity and 

energy from resources to loads while maintaining reliable operation of the 

Transmission Provider's Transmission System in accordance with Good 

Utility Practice. 

1.3 Annual Transmission Costs: 

The total annual cost of the Transmission System for purposes of Network 

Integration Transmission Service shall be the amount specified in Attachment 

H until amended by the Transmission Provider or modified by the 

Commission. 

1.4 Application: 

A request by an Eligible Customer for transmission service pursuant to the 

provisions of the Tariff. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 11 - 

1.5 Commission: 

The Federal Energy Regulatory Commission. 

1.6 Completed Application: 

An Application that satisfies all of the information and other requirements of 

the Tariff, including any required deposit. 

1.7 Control Area: 

An electric power system or combination of electric power systems to which a 

common automatic generation control scheme is applied in order to: 

1. match, at all times, the power output of the generators within the 

electric power system(s) and capacity and energy purchased from 

entities outside the electric power system(s), with the load within the 

electric power system(s); 

2. maintain scheduled interchange with other Control Areas, within the 

limits of Good Utility Practice; 

3. maintain the frequency of the electric power system(s) within 

reasonable limits in accordance with Good Utility Practice; and 

4. provide sufficient generating capacity to maintain operating reserves in 

accordance with Good Utility Practice. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 12 - 

1.8 Curtailment: 

A reduction in firm or non-firm transmission service in response to a transfer 

capability shortage as a result of system reliability conditions. 

1.9 Delivering Party: 

The entity supplying capacity and energy to be transmitted at Point(s) of 

Receipt. 

1.10 Designated Agent: 

Any entity that performs actions or functions on behalf of the Transmission 

Provider, an Eligible Customer, or the Transmission Customer required under 

the Tariff. 

1.11 Direct Assignment Facilities: 

Facilities or portions of facilities that are constructed by the Transmission 

Provider for the sole use/benefit of a particular Transmission Customer 

requesting service under the Tariff. Direct Assignment Facilities shall be 

specified in the Service Agreement that governs service to the Transmission 

Customer and shall be subject to Commission approval. 

1.12 Eligible Customer: 

i. Any electric utility (including the Transmission Provider and any 

power marketer), Federal power marketing agency, or any person 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 13 - 

generating electric energy for sale for resale is an Eligible Customer 

under the Tariff. Electric energy sold or produced by such entity may 

be electric energy produced in the United States, Canada or Mexico. 

However, with respect to transmission service that the Commission is 

prohibited from ordering by Section 212(h) of the Federal Power Act, 

such entity is eligible only if the service is provided pursuant to a state 

requirement that the Transmission Provider offer the unbundled 

transmission service, or pursuant to a voluntary offer of such service by 

the Transmission Provider. 

ii. Any retail customer taking unbundled transmission service pursuant to 

a state requirement that the Transmission Provider offer the 

transmission service, or pursuant to a voluntary offer of such service by 

the Transmission Provider, is an Eligible Customer under the Tariff. 

1.13 Facilities Study: 

An engineering study conducted by the Transmission Provider to determine 

the required modifications to the Transmission Provider's Transmission 

System, including the cost and scheduled completion date for such 

modifications, that will be required to provide the requested transmission 

service. 

1.14 Firm Point-To-Point Transmission Service: 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 14 - 

Transmission Service under this Tariff that is reserved and/or scheduled 

between specified Points of Receipt and Delivery pursuant to Part II of this 

Tariff. 

1.15 Good Utility Practice: 

Any of the practices, methods and acts engaged in or approved by a significant 

portion of the electric utility industry during the relevant time period, or any of 

the practices, methods and acts which, in the exercise of reasonable judgment 

in light of the facts known at the time the decision was made, could have been 

expected to accomplish the desired result at a reasonable cost consistent with 

good business practices, reliability, safety and expedition. Good Utility 

Practice is not intended to be limited to the optimum practice, method, or act 

to the exclusion of all others, but rather to be acceptable practices, methods, or 

acts generally accepted in the region, including those practices required by 

Federal Power Act section 215(a)(4). 

1.16 Interruption: 

A reduction in non-firm transmission service due to economic reasons 

pursuant to Section 14.7. 

1.17 Load Ratio Share: 

Ratio of a Transmission Customer's Network Load to the Transmission 

Provider's total load computed in accordance with Sections 34.2 and 34.3 of 
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the Network Integration Transmission Service under Part III of the Tariff and 

calculated on a rolling twelve month basis. 

1.18 Load Shedding: 

The systematic reduction of system demand by temporarily decreasing load in 

response to transmission system or area capacity shortages, system instability, 

or voltage control considerations under Part III of the Tariff. 

1.19 Long-Term Firm Point-To-Point Transmission Service: 

Firm Point-To-Point Transmission Service under Part II of the Tariff with a 

term of one year or more. 

1.20 Native Load Customers: 

The wholesale and retail power customers of the Transmission Provider on 

whose behalf the Transmission Provider, by statute, franchise, regulatory 

requirement, or contract, has undertaken an obligation to construct and operate 

the Transmission Provider's system to meet the reliable electric needs of such 

customers. 

1.21 Network Customer: 

An entity receiving transmission service pursuant to the terms of the 

Transmission Provider's Network Integration Transmission Service under Part 

III of the Tariff. 
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1.22 Network Integration Transmission Service: 

The transmission service provided under Part III of the Tariff. 

1.23 Network Load: 

The load that a Network Customer designates for Network Integration 

Transmission Service under Part III of the Tariff. The Network Customer's 

Network Load shall include all load served by the output of any Network 

Resources designated by the Network Customer. A Network Customer may 

elect to designate less than its total load as Network Load but may not 

designate only part of the load at a discrete Point of Delivery. Where a 

Eligible Customer has elected not to designate a particular load at discrete 

points of delivery as Network Load, the Eligible Customer is responsible for 

making separate arrangements under Part II of the Tariff for any Point-ToPoint Transmission Service that may be necessary for such non-designated 

load. 

1.24 Network Operating Agreement: 

An executed agreement that contains the terms and conditions under which the 

Network Customer shall operate its facilities and the technical and operational 

matters associated with the implementation of Network Integration 

Transmission Service under Part III of the Tariff. 

1.25 Network Operating Committee: 
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A group made up of representatives from the Network Customer(s) and the 

Transmission Provider established to coordinate operating criteria and other 

technical considerations required for implementation of Network Integration 

Transmission Service under Part III of this Tariff. 

1.26 Network Resource: 

Any designated generating resource owned, purchased or leased by a Network 

Customer under the Network Integration Transmission Service Tariff. 

Network Resources do not include any resource, or any portion thereof, that is 

committed for sale to third parties or otherwise cannot be called upon to meet 

the Network Customer's Network Load on a non-interruptible basis, except for 

purposes of fulfilling obligations under a reserve sharing program. 

1.27 Network Upgrades: 

Modifications or additions to transmission-related facilities that are integrated 

with and support the Transmission Provider's overall Transmission System for 

the general benefit of all users of such Transmission System. 

1.28 Non-Firm Point-To-Point Transmission Service: 

Point-To-Point Transmission Service under the Tariff that is reserved and 

scheduled on an as-available basis and is subject to Curtailment or 

Interruption as set forth in Section 14.7 under Part II of this Tariff. Non-Firm 
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Point-To-Point Transmission Service is available on a stand-alone basis for 

periods ranging from one hour to one month. 

1.29 Non-Firm Sale: 

An energy sale for which receipt or delivery may be interrupted for any reason 

or no reason, without liability on the part of either the buyer or seller. 

1.30 Open Access Same-Time Information System (OASIS): 

The information system and standards of conduct contained in Part 37 of the 

Commission's regulations and all additional requirements implemented by 

subsequent Commission orders dealing with OASIS. 

1.31 Part I: 

Tariff Definitions and Common Service Provisions contained in Sections 2 

through 12. 

1.32 Part II: 

Tariff Sections 13 through 27 pertaining to Point-To-Point Transmission 

Service in conjunction with the applicable Common Service Provisions of Part 

I and appropriate Schedules and Attachments. 
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1.33 Part III: 

Tariff Sections 28 through 35 pertaining to Network Integration Transmission 

Service in conjunction with the applicable Common Service Provisions of Part 

I and appropriate Schedules and Attachments. 

1.34 Parties: 

The Transmission Provider and the Transmission Customer receiving service 

under the Tariff. 

1.35 Point(s) of Delivery: 

Point(s) on the Transmission Provider's Transmission System where capacity 

and energy transmitted by the Transmission Provider will be made available to 

the Receiving Party under Part II of the Tariff. The Point(s) of Delivery shall 

be specified in the Service Agreement for Long-Term Firm Point-To-Point 

Transmission Service. 

1.36 Point(s) of Receipt: 

Point(s) of interconnection on the Transmission Provider's Transmission 

System where capacity and energy will be made available to the Transmission 

Provider by the Delivering Party under Part II of the Tariff. The Point(s) of 

Receipt shall be specified in the Service Agreement for Long-Term Firm 

Point-To-Point Transmission Service. 
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1.37 Point-To-Point Transmission Service: 

The reservation and transmission of capacity and energy on either a firm or 

non-firm basis from the Point(s) of Receipt to the Point(s) of Delivery under 

Part II of the Tariff. 

1.38 Power Purchaser: 

The entity that is purchasing the capacity and energy to be transmitted under 

the Tariff. 

1.39 Pre-Confirmed Application: 

An Application that commits the Eligible Customer to execute a Service 

Agreement upon receipt of notification that the Transmission Provider can 

provide the requested Transmission Service. 

1.40 Receiving Party: 

The entity receiving the capacity and energy transmitted by the Transmission 

Provider to Point(s) of Delivery. 

1.41 Regional Transmission Group (RTG): 

A voluntary organization of transmission owners, transmission users and other 

entities approved by the Commission to efficiently coordinate transmission 

planning (and expansion), operation and use on a regional (and interregional) 

basis. 
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1.42 Reserved Capacity: 

The maximum amount of capacity and energy that the Transmission Provider 

agrees to transmit for the Transmission Customer over the Transmission 

Provider's Transmission System between the Point(s) of Receipt and the 

Point(s) of Delivery under Part II of the Tariff. Reserved Capacity shall be 

expressed in terms of whole megawatts on a sixty (60) minute interval 

(commencing on the clock hour) basis. 

1.43 Service Agreement: 

The initial agreement and any amendments or supplements thereto entered 

into by the Transmission Customer and the Transmission Provider for service 

under the Tariff. 

1.44 Service Commencement Date: 

The date the Transmission Provider begins to provide service pursuant to the 

terms of an executed Service Agreement, or the date the Transmission 

Provider begins to provide service in accordance with Section 15.3 or Section 

29.1 under the Tariff. 

1.45 Short-Term Firm Point-To-Point Transmission Service: 

Firm Point-To-Point Transmission Service under Part II of the Tariff with a 

term of less than one year. 
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1.46 System Condition: 

A specified condition on the Transmission Provider’s system or on a 

neighboring system, such as a constrained transmission element or flowgate, 

that may trigger Curtailment of Long-Term Firm Point-to-Point Transmission 

Service using the curtailment priority pursuant to Section 13.6. Such 

conditions must be identified in the Transmission Customer’s Service 

Agreement. 

1.47 System Impact Study: 

An assessment by the Transmission Provider of (i) the adequacy of the 

Transmission System to accommodate a request for either Firm Point-ToPoint Transmission Service or Network Integration Transmission Service and 

(ii) whether any additional costs may be incurred in order to provide 

transmission service. 

1.48 Third-Party Sale: 

Any sale for resale in interstate commerce to a Power Purchaser that is not 

designated as part of Network Load under the Network Integration 

Transmission Service. 

1.49 Transmission Customer: 

Any Eligible Customer (or its Designated Agent) that (i) executes a Service 

Agreement, or (ii) requests in writing that the Transmission Provider file with 
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the Commission, a proposed unexecuted Service Agreement to receive 

transmission service under Part II of the Tariff. This term is used in the Part I 

Common Service Provisions to include customers receiving transmission 

service under Part II and Part III of this Tariff. 

1.50 Transmission Provider: 

The public utility (or its Designated Agent) that owns, controls, or operates 

facilities used for the transmission of electric energy in interstate commerce 

and provides transmission service under the Tariff. 

1.51 Transmission Provider's Monthly Transmission System Peak: 

The maximum firm usage of the Transmission Provider's Transmission 

System in a calendar month. 

1.52 Transmission Service: 

Point-To-Point Transmission Service provided under Part II of the Tariff on a 

firm and non-firm basis. 

1.53 Transmission System: 

The facilities owned, controlled or operated by the Transmission Provider that 

are used to provide transmission service under Part II and Part III of the Tariff. 
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2 Initial Allocation and Renewal Procedures 

2.1 Initial Allocation of Available Transfer Capability: 

For purposes of determining whether existing capability on the Transmission 

Provider's Transmission System is adequate to accommodate a request for 

firm service under this Tariff, all Completed Applications for new firm 

transmission service received during the initial sixty (60) day period 

commencing with the effective date of the Tariff will be deemed to have been 

filed simultaneously. A lottery system conducted by an independent party 

shall be used to assign priorities for Completed Applications filed 

simultaneously. All Completed Applications for firm transmission service 

received after the initial sixty (60) day period shall be assigned a priority 

pursuant to Section 13.2. 

2.2 Reservation Priority For Existing Firm Service Customers: 

Existing firm service customers (wholesale requirements and transmissiononly, with a contract term of five years or more), have the right to continue to 

take transmission service from the Transmission Provider when the contract 

expires, rolls over or is renewed. This transmission reservation priority is 

independent of whether the existing customer continues to purchase capacity 

and energy from the Transmission Provider or elects to purchase capacity and 

energy from another supplier. If at the end of the contract term, the 
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Transmission Provider's Transmission System cannot accommodate all of the 

requests for transmission service, the existing firm service customer must 

agree to accept a contract term at least equal to a competing request by any 

new Eligible Customer and to pay the current just and reasonable rate, as 

approved by the Commission, for such service; provided that, the firm service 

customer shall have a right of first refusal at the end of such service only if the 

new contract is for five years or more. The existing firm service customer 

must provide notice to the Transmission Provider whether it will exercise its 

right of first refusal no less than one year prior to the expiration date of its 

transmission service agreement. This transmission reservation priority for 

existing firm service customers is an ongoing right that may be exercised at 

the end of all firm contract terms of five years or longer. Service agreements 

subject to a right of first refusal entered into prior to [the date of the 

Transmission Provider’s filing adopting the reformed rollover language herein 

in compliance with Order No. 890] or associated with a transmission service 

request received prior to July 13, 2007, unless terminated, will become subject 

to the five year/one year requirement on the first rollover date after [the date 

of the Transmission Provider’s filing adopting the reformed rollover language 

herein in compliance with Order No. 890]; provided that, the one-year notice 

requirement shall apply to such service agreements with five years or more 
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Original Sheet No. - 26 - 

left in their terms as of the [date of the Transmission Provider’s filing 

adopting the reformed rollover language herein in compliance with Order No. 

890]. 

3 Ancillary Services 

 Ancillary Services are needed with transmission service to maintain 

reliability within and among the Control Areas affected by the transmission 

service. The Transmission Provider is required to provide (or offer to arrange with 

the local Control Area operator as discussed below), and the Transmission 

Customer is required to purchase, the following Ancillary Services (i) Scheduling, 

System Control and Dispatch, and (ii) Reactive Supply and Voltage Control from 

Generation or Other Sources. 

 The Transmission Provider is required to offer to provide (or offer to 

arrange with the local Control Area operator as discussed below) the following 

Ancillary Services only to the Transmission Customer serving load within the 

Transmission Provider's Control Area (i) Regulation and Frequency Response, (ii) 

Energy Imbalance, (iii) Operating Reserve - Spinning, and (iv) Operating Reserve 

- Supplemental. The Transmission Customer serving load within the 

Transmission Provider's Control Area is required to acquire these Ancillary 

Services, whether from the Transmission Provider, from a third party, or by selfsupply. 
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The Transmission Provider is required to provide (or offer to arrange with 

the local Control Area Operator as discussed below), to the extent it is physically 

feasible to do so from its resources or from resources available to it, Generator 

Imbalance Service when Transmission Service is used to deliver energy from a 

generator located within its Control Area. The Transmission Customer using 

Transmission Service to deliver energy from a generator located within the 

Transmission Provider’s Control Area is required to acquire Generator Imbalance 

Service, whether from the Transmission Provider, from a third party, or by selfsupply. 

The Transmission Customer may not decline the Transmission Provider's 

offer of Ancillary Services unless it demonstrates that it has acquired the Ancillary 

Services from another source. The Transmission Customer must list in its 

Application which Ancillary Services it will purchase from the Transmission 

Provider. A Transmission Customer that exceeds its firm reserved capacity at any 

Point of Receipt or Point of Delivery or an Eligible Customer that uses 

Transmission Service at a Point of Receipt or Point of Delivery that it has not 

reserved is required to pay for all of the Ancillary Services identified in this 

section that were provided by the Transmission Provider associated with the 

unreserved service. The Transmission Customer or Eligible Customer will pay for 

Ancillary Services based on the amount of transmission service it used but did not 
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Original Sheet No. - 28 - 

reserve. 

 If the Transmission Provider is a public utility providing transmission 

service but is not a Control Area operator, it may be unable to provide some or all 

of the Ancillary Services. In this case, the Transmission Provider can fulfill its 

obligation to provide Ancillary Services by acting as the Transmission Customer's 

agent to secure these Ancillary Services from the Control Area operator. The 

Transmission Customer may elect to (i) have the Transmission Provider act as its 

agent, (ii) secure the Ancillary Services directly from the Control Area operator, or 

(iii) secure the Ancillary Services (discussed in Schedules 3, 4, 5, 6 and 9) from a 

third party or by self-supply when technically feasible. 

 The Transmission Provider shall specify the rate treatment and all related 

terms and conditions in the event of an unauthorized use of Ancillary Services by 

the Transmission Customer. 

 The specific Ancillary Services, prices and/or compensation methods are 

described on the Schedules that are attached to and made a part of the Tariff. 

Three principal requirements apply to discounts for Ancillary Services provided 

by the Transmission Provider in conjunction with its provision of transmission 

service as follows: (1) any offer of a discount made by the Transmission Provider 

must be announced to all Eligible Customers solely by posting on the OASIS, (2) 

any customer-initiated requests for discounts (including requests for use by one's 
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Original Sheet No. - 29 - 

wholesale merchant or an Affiliate's use) must occur solely by posting on the 

OASIS, and (3) once a discount is negotiated, details must be immediately posted 

on the OASIS. A discount agreed upon for an Ancillary Service must be offered 

for the same period to all Eligible Customers on the Transmission Provider's 

system. Sections 3.1 through 3.7 below list the seven Ancillary Services. 

3.1 Scheduling, System Control and Dispatch Service: 

The rates and/or methodology are described in Schedule 1. 

3.2 Reactive Supply and Voltage Control from Generation or Other 

Sources Service: 

The rates and/or methodology are described in Schedule 2. 

3.3 Regulation and Frequency Response Service: 

Where applicable the rates and/or methodology are described in Schedule 3. 

3.4 Energy Imbalance Service: 

Where applicable the rates and/or methodology are described in Schedule 4. 

3.5 Operating Reserve - Spinning Reserve Service: 

Where applicable the rates and/or methodology are described in Schedule 5. 

3.6 Operating Reserve - Supplemental Reserve Service: 

Where applicable the rates and/or methodology are described in Schedule 6. 
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Original Sheet No. - 30 - 

3.7 Generator Imbalance Service: 

Where applicable the rates and/or methodology are described in Schedule 9. 

4 Open Access Same-Time Information System (OASIS) 

 Terms and conditions regarding Open Access Same-Time Information 

System and standards of conduct are set forth in 18 CFR § 37 of the Commission's 

regulations (Open Access Same-Time Information System and Standards of 

Conduct for Public Utilities) and 18 CFR 38 of the Commission’s regulations 

(Business Practice Standards and Communication Protocols for Public Utilities). 

In the event available transfer capability as posted on the OASIS is insufficient to 

accommodate a request for firm transmission service, additional studies may be 

required as provided by this Tariff pursuant to Sections 19 and 32. 

 The Transmission Provider shall post on OASIS and its public website an 

electronic link to all rules, standards and practices that (i) relate to the terms and 

conditions of transmission service, (ii) are not subject to a North American Energy 

Standards Board (NAESB) copyright restriction, and (iii) are not otherwise 

included in this Tariff. The Transmission Provider shall post on OASIS and on its 

public website an electronic link to the NAESB website where any rules, standards 

and practices that are protected by copyright may be obtained. The Transmission 

Provider shall also post on OASIS and its public website an electronic link to a 

statement of the process by which the Transmission Provider shall add, delete or 
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otherwise modify the rules, standards and practices that are not included in this 

tariff. Such process shall set forth the means by which the Transmission Provider 

shall provide reasonable advance notice to Transmission Customers and Eligible 

Customers of any such additions, deletions or modifications, the associated 

effective date, and any additional implementation procedures that the 

Transmission Provider deems appropriate. 

5 Local Furnishing Bonds 

5.1 Transmission Providers That Own Facilities Financed by Local 

Furnishing Bonds: 

This provision is applicable only to Transmission Providers that have financed 

facilities for the local furnishing of electric energy with tax-exempt bonds, as 

described in Section 142(f) of the Internal Revenue Code ("local furnishing 

bonds"). Notwithstanding any other provision of this Tariff, the Transmission 

Provider shall not be required to provide transmission service to any Eligible 

Customer pursuant to this Tariff if the provision of such transmission service 

would jeopardize the tax-exempt status of any local furnishing bond(s) used to 

finance the Transmission Provider's facilities that would be used in providing 

such transmission service. 

5.2 Alternative Procedures for Requesting Transmission Service: 

(i) If the Transmission Provider determines that the provision of 

transmission service requested by an Eligible Customer would 
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Original Sheet No. - 32 - 

jeopardize the tax-exempt status of any local furnishing bond(s) 

used to finance its facilities that would be used in providing such 

transmission service, it shall advise the Eligible Customer within 

thirty (30) days of receipt of the Completed Application. 

(ii) If the Eligible Customer thereafter renews its request for the same 

transmission service referred to in (i) by tendering an application 

under Section 211 of the Federal Power Act, the Transmission 

Provider, within ten (10) days of receiving a copy of the Section 

211 application, will waive its rights to a request for service under 

Section 213(a) of the Federal Power Act and to the issuance of a 

proposed order under Section 212(c) of the Federal Power Act. 

The Commission, upon receipt of the Transmission Provider's 

waiver of its rights to a request for service under Section 213(a) 

of the Federal Power Act and to the issuance of a proposed order 

under Section 212(c) of the Federal Power Act, shall issue an 

order under Section 211 of the Federal Power Act. Upon issuance 

of the order under Section 211 of the Federal Power Act, the 

Transmission Provider shall be required to provide the requested 

transmission service in accordance with the terms and conditions 

of this Tariff. 
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6 Reciprocity 

 A Transmission Customer receiving transmission service under this Tariff 

agrees to provide comparable transmission service that it is capable of providing to 

the Transmission Provider on similar terms and conditions over facilities used for 

the transmission of electric energy owned, controlled or operated by the 

Transmission Customer and over facilities used for the transmission of electric 

energy owned, controlled or operated by the Transmission Customer's corporate 

Affiliates. A Transmission Customer that is a member of, or takes transmission 

service from, a power pool, Regional Transmission Group, Regional Transmission 

Organization (RTO), Independent System Operator (ISO) or other transmission 

organization approved by the Commission for the operation of transmission 

facilities also agrees to provide comparable transmission service to the 

transmission-owning members of such power pool and Regional Transmission 

Group, RTO, ISO or other transmission organization on similar terms and 

conditions over facilities used for the transmission of electric energy owned, 

controlled or operated by the Transmission Customer and over facilities used for 

the transmission of electric energy owned, controlled or operated by the 

Transmission Customer's corporate Affiliates. 

 This reciprocity requirement applies not only to the Transmission Customer 

that obtains transmission service under the Tariff, but also to all parties to a 
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Original Sheet No. - 34 - 

transaction that involves the use of transmission service under the Tariff, including 

the power seller, buyer and any intermediary, such as a power marketer. This 

reciprocity requirement also applies to any Eligible Customer that owns, controls 

or operates transmission facilities that uses an intermediary, such as a power 

marketer, to request transmission service under the Tariff. If the Transmission 

Customer does not own, control or operate transmission facilities, it must include 

in its Application a sworn statement of one of its duly authorized officers or other 

representatives that the purpose of its Application is not to assist an Eligible 

Customer to avoid the requirements of this provision. 

7 Billing and Payment 

7.1 Billing Procedure: 

Within a reasonable time after the first day of each month, the Transmission 

Provider shall submit an invoice to the Transmission Customer for the charges 

for all services furnished under the Tariff during the preceding month. The 

invoice shall be paid by the Transmission Customer within twenty (20) days 

of receipt. All payments shall be made in immediately available funds 

payable to the Transmission Provider, or by wire transfer to a bank named by 

the Transmission Provider. 
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7.2 Interest on Unpaid Balances: 

Interest on any unpaid amounts (including amounts placed in escrow) shall be 

calculated in accordance with the methodology specified for interest on 

refunds in the Commission's regulations at 18 CFR 35.19a(a)(2)(iii). Interest 

on delinquent amounts shall be calculated from the due date of the bill to the 

date of payment. When payments are made by mail, bills shall be considered 

as having been paid on the date of receipt by the Transmission Provider. 

7.3 Customer Default: 

In the event the Transmission Customer fails, for any reason other than a 

billing dispute as described below, to make payment to the Transmission 

Provider on or before the due date as described above, and such failure of 

payment is not corrected within thirty (30) calendar days after the 

Transmission Provider notifies the Transmission Customer to cure such 

failure, a default by the Transmission Customer shall be deemed to exist. 

Upon the occurrence of a default, the Transmission Provider may initiate a 

proceeding with the Commission to terminate service but shall not terminate 

service until the Commission so approves any such request. In the event of a 

billing dispute between the Transmission Provider and the Transmission 

Customer, the Transmission Provider will continue to provide service under 

the Service Agreement as long as the Transmission Customer (i) continues to 
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Original Sheet No. - 36 - 

make all payments not in dispute, and (ii) pays into an independent escrow 

account the portion of the invoice in dispute, pending resolution of such 

dispute. If the Transmission Customer fails to meet these two requirements 

for continuation of service, then the Transmission Provider may provide 

notice to the Transmission Customer of its intention to suspend service in 

sixty (60) days, in accordance with Commission policy. 

8 Accounting for the Transmission Provider's Use of the Tariff 

 The Transmission Provider shall record the following amounts, as outlined 

below. 

8.1 Transmission Revenues: 

Include in a separate operating revenue account or subaccount the revenues it 

receives from Transmission Service when making Third-Party Sales under 

Part II of the Tariff. 

8.2 Study Costs and Revenues: 

Include in a separate transmission operating expense account or subaccount, 

costs properly chargeable to expense that are incurred to perform any System 

Impact Studies or Facilities Studies which the Transmission Provider conducts 

to determine if it must construct new transmission facilities or upgrades 

necessary for its own uses, including making Third-Party Sales under the 

Tariff; and include in a separate operating revenue account or subaccount the 
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Original Sheet No. - 37 - 

revenues received for System Impact Studies or Facilities Studies performed 

when such amounts are separately stated and identified in the Transmission 

Customer's billing under the Tariff. 

9 Regulatory Filings 

 Nothing contained in the Tariff or any Service Agreement shall be 

construed as affecting in any way the right of the Transmission Provider to 

unilaterally make application to the Commission for a change in rates, terms and 

conditions, charges, classification of service, Service Agreement, rule or 

regulation under Section 205 of the Federal Power Act and pursuant to the 

Commission's rules and regulations promulgated thereunder. 

 Nothing contained in the Tariff or any Service Agreement shall be 

construed as affecting in any way the ability of any Party receiving service under 

the Tariff to exercise its rights under the Federal Power Act and pursuant to the 

Commission's rules and regulations promulgated thereunder. 

10 Force Majeure and Indemnification 

10.1 Force Majeure: 

An event of Force Majeure means any act of God, labor disturbance, act of the 

public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage 

or accident to machinery or equipment, any Curtailment, order, regulation or 

restriction imposed by governmental military or lawfully established civilian 

authorities, or any other cause beyond a Party’s control. A Force Majeure 
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Original Sheet No. - 38 - 

event does not include an act of negligence or intentional wrongdoing. 

Neither the Transmission Provider nor the Transmission Customer will be 

considered in default as to any obligation under this Tariff if prevented from 

fulfilling the obligation due to an event of Force Majeure. However, a Party 

whose performance under this Tariff is hindered by an event of Force Majeure 

shall make all reasonable efforts to perform its obligations under this Tariff. 

10.2 Indemnification: 

The Transmission Customer shall at all times indemnify, defend, and save the 

Transmission Provider harmless from, any and all damages, losses, claims, 

including claims and actions relating to injury to or death of any person or 

damage to property, demands, suits, recoveries, costs and expenses, court 

costs, attorney fees, and all other obligations by or to third parties, arising out 

of or resulting from the Transmission Provider’s performance of its 

obligations under this Tariff on behalf of the Transmission Customer, except 

in cases of negligence or intentional wrongdoing by the Transmission 

Provider. 

11 Creditworthiness 
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 The Transmission Provider will specify its Creditworthiness procedures in 

Attachment L. 

12 Dispute Resolution Procedures 

12.1 Internal Dispute Resolution Procedures: 

Any dispute between a Transmission Customer and the Transmission Provider 

involving transmission service under the Tariff (excluding applications for 

rate changes or other changes to the Tariff, or to any Service Agreement 

entered into under the Tariff, which shall be presented directly to the 

Commission for resolution) shall be referred to a designated senior 

representative of the Transmission Provider and a senior representative of the 

Transmission Customer for resolution on an informal basis as promptly as 

practicable. In the event the designated representatives are unable to resolve 

the dispute within thirty (30) days [or such other period as the Parties may 

agree upon] by mutual agreement, such dispute may be submitted to 

arbitration and resolved in accordance with the arbitration procedures set forth 

below. 

12.2 External Arbitration Procedures: 

Any arbitration initiated under the Tariff shall be conducted before a single 

neutral arbitrator appointed by the Parties. If the Parties fail to agree upon a 

single arbitrator within ten (10) days of the referral of the dispute to 
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Original Sheet No. - 40 - 

arbitration, each Party shall choose one arbitrator who shall sit on a threemember arbitration panel. The two arbitrators so chosen shall within twenty 

(20) days select a third arbitrator to chair the arbitration panel. In either case, 

the arbitrators shall be knowledgeable in electric utility matters, including 

electric transmission and bulk power issues, and shall not have any current or 

past substantial business or financial relationships with any party to the 

arbitration (except prior arbitration). The arbitrator(s) shall provide each of 

the Parties an opportunity to be heard and, except as otherwise provided 

herein, shall generally conduct the arbitration in accordance with the 

Commercial Arbitration Rules of the American Arbitration Association and 

any applicable Commission regulations or Regional Transmission Group 

rules. 

12.3 Arbitration Decisions: 

Unless otherwise agreed, the arbitrator(s) shall render a decision within ninety 

(90) days of appointment and shall notify the Parties in writing of such 

decision and the reasons therefor. The arbitrator(s) shall be authorized only to 

interpret and apply the provisions of the Tariff and any Service Agreement 

entered into under the Tariff and shall have no power to modify or change any 

of the above in any manner. The decision of the arbitrator(s) shall be final and 

binding upon the Parties, and judgment on the award may be entered in any 
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Original Sheet No. - 41 - 

court having jurisdiction. The decision of the arbitrator(s) may be appealed 

solely on the grounds that the conduct of the arbitrator(s), or the decision 

itself, violated the standards set forth in the Federal Arbitration Act and/or the 

Administrative Dispute Resolution Act. The final decision of the arbitrator 

must also be filed with the Commission if it affects jurisdictional rates, terms 

and conditions of service or facilities. 

12.4 Costs: 

Each Party shall be responsible for its own costs incurred during the 

arbitration process and for the following costs, if applicable: 

1. the cost of the arbitrator chosen by the Party to sit on the three member 

panel and one half of the cost of the third arbitrator chosen; or 

2. one half the cost of the single arbitrator jointly chosen by the Parties. 

12.5 Rights Under The Federal Power Act: 

Nothing in this section shall restrict the rights of any party to file a Complaint 

with the Commission under relevant provisions of the Federal Power Act. 

II. POINT-TO-POINT TRANSMISSION SERVICE 

Preamble 

 The Transmission Provider will provide Firm and Non-Firm Point-To-Point 

Transmission Service pursuant to the applicable terms and conditions of this Tariff. 

Point-To-Point Transmission Service is for the receipt of capacity and energy at 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 42 - 

designated Point(s) of Receipt and the transfer of such capacity and energy to designated 

Point(s) of Delivery. 

13 Nature of Firm Point-To-Point Transmission Service 

13.1 Term: 

The minimum term of Firm Point-To-Point Transmission Service shall be one 

day and the maximum term shall be specified in the Service Agreement. 

13.2 Reservation Priority: 

(i) Long-Term Firm Point-To-Point Transmission Service shall be 

available on a first-come, first-served basis, i.e., in the 

chronological sequence in which each Transmission Customer has 

requested service. 

(ii) Reservations for Short-Term Firm Point-To-Point Transmission 

Service will be conditional based upon the length of the requested 

transaction or reservation. However, Pre-Confirmed Applications 

for Short-Term Point-to-Point Transmission Service will receive 

priority over earlier-submitted requests that are not PreConfirmed and that have equal or shorter duration. Among 

requests or reservations with the same duration and, as relevant, 

pre-confirmation status (pre-confirmed, confirmed, or not 

confirmed), priority will be given to an Eligible Customer’s 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 43 - 

request or reservation that offers the highest price, followed by 

the date and time of the request or reservation. 

(iii) If the Transmission System becomes oversubscribed, requests for 

service may preempt competing reservations up to the following 

conditional reservation deadlines: one day before the 

commencement of daily service, one week before the 

commencement of weekly service, and one month before the 

commencement of monthly service. Before the conditional 

reservation deadline, if available transfer capability is insufficient 

to satisfy all requests and reservations, an Eligible Customer with 

a reservation for shorter term service or equal duration service 

and lower price has the right of first refusal to match any longer 

term request or equal duration service with a higher price before 

losing its reservation priority. A longer term competing request 

for Short-Term Firm Point-To-Point Transmission Service will be 

granted if the Eligible Customer with the right of first refusal does 

not agree to match the competing request within 24 hours (or 

earlier if necessary to comply with the scheduling deadlines 

provided in section 13.8) from being notified by the Transmission 

Provider of a longer-term competing request for Short-Term Firm 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 44 - 

Point-To-Point Transmission Service. When a longer duration 

request preempts multiple shorter duration reservations, the 

shorter duration reservations shall have simultaneous 

opportunities to exercise the right of first refusal. Duration, price 

and time of response will be used to determine the order by which 

the multiple shorter duration reservations will be able to exercise 

the right of first refusal. After the conditional reservation 

deadline, service will commence pursuant to the terms of Part II 

of the Tariff. 

(iv) Firm Point-To-Point Transmission Service will always have a 

reservation priority over Non-Firm Point-To-Point Transmission 

Service under the Tariff. All Long-Term Firm Point-To-Point 

Transmission Service will have equal reservation priority with 

Native Load Customers and Network Customers. Reservation 

priorities for existing firm service customers are provided in 

Section 2.2. 

13.3 Use of Firm Transmission Service by the Transmission Provider: 

The Transmission Provider will be subject to the rates, terms and conditions of 

Part II of the Tariff when making Third-Party Sales under (i) agreements 

executed on or after [insert date sixty (60) days after publication in Federal 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 45 - 

Register] or (ii) agreements executed prior to the aforementioned date that the 

Commission requires to be unbundled, by the date specified by the 

Commission. The Transmission Provider will maintain separate accounting, 

pursuant to Section 8, for any use of the Point-To-Point Transmission Service 

to make Third-Party Sales. 

13.4 Service Agreements: 

The Transmission Provider shall offer a standard form Firm Point-To-Point 

Transmission Service Agreement (Attachment A) to an Eligible Customer 

when it submits a Completed Application for Long-Term Firm Point-To-Point 

Transmission Service. The Transmission Provider shall offer a standard form 

Firm Point-To-Point Transmission Service Agreement (Attachment A) to an 

Eligible Customer when it first submits a Completed Application for ShortTerm Firm Point-To-Point Transmission Service pursuant to the Tariff. 

Executed Service Agreements that contain the information required under the 

Tariff shall be filed with the Commission in compliance with applicable 

Commission regulations. An Eligible Customer that uses Transmission 

Service at a Point of Receipt or Point of Delivery that it has not reserved and 

that has not executed a Service Agreement will be deemed, for purposes of 

assessing any appropriate charges and penalties, to have executed the 

appropriate Service Agreement. The Service Agreement shall, when 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 46 - 

applicable, specify any conditional curtailment options selected by the 

Transmission Customer. Where the Service Agreement contains conditional 

curtailment options and is subject to a biennial reassessment as described in 

Section 15.4, the Transmission Provider shall provide the Transmission 

Customer notice of any changes to the curtailment conditions no less than 90 

days prior to the date for imposition of new curtailment conditions. 

Concurrent with such notice, the Transmission Provider shall provide the 

Transmission Customer with the reassessment study and a narrative 

description of the study, including the reasons for changes to the number of 

hours per year or System Conditions under which conditional curtailment may 

occur. 

13.5 Transmission Customer Obligations for Facility Additions or 

Redispatch Costs: 

In cases where the Transmission Provider determines that the Transmission 

System is not capable of providing Firm Point-To-Point Transmission Service 

without (1) degrading or impairing the reliability of service to Native Load 

Customers, Network Customers and other Transmission Customers taking 

Firm Point-To-Point Transmission Service, or (2) interfering with the 

Transmission Provider's ability to meet prior firm contractual commitments to 

others, the Transmission Provider will be obligated to expand or upgrade its 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 47 - 

Transmission System pursuant to the terms of Section 15.4. The Transmission 

Customer must agree to compensate the Transmission Provider for any 

necessary transmission facility additions pursuant to the terms of Section 27. 

To the extent the Transmission Provider can relieve any system constraint by 

redispatching the Transmission Provider's resources, it shall do so, provided 

that the Eligible Customer agrees to compensate the Transmission Provider 

pursuant to the terms of Section 27 and agrees to either (i) compensate the 

Transmission Provider for any necessary transmission facility additions or (ii) 

accept the service subject to a biennial reassessment by the Transmission 

Provider of redispatch requirements as described in Section 15.4. Any 

redispatch, Network Upgrade or Direct Assignment Facilities costs to be 

charged to the Transmission Customer on an incremental basis under the 

Tariff will be specified in the Service Agreement prior to initiating service. 

13.6 Curtailment of Firm Transmission Service: 

In the event that a Curtailment on the Transmission Provider's Transmission 

System, or a portion thereof, is required to maintain reliable operation of such 

system and the system directly and indirectly interconnected with 

Transmission Provider’s Transmission System, Curtailments will be made on 

a non-discriminatory basis to the transaction(s) that effectively relieve the 

constraint. Transmission Provider may elect to implement such Curtailments 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 48 - 

pursuant to the Transmission Loading Relief procedures specified in 

Attachment J. If multiple transactions require Curtailment, to the extent 

practicable and consistent with Good Utility Practice, the Transmission 

Provider will curtail service 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. All Curtailments will be made on a non-discriminatory 

basis, however, Non-Firm Point-To-Point Transmission Service shall be 

subordinate to Firm Transmission Service. Long-Term Firm Point-to-Point 

Service subject to conditions described in Section 15.4 shall be curtailed with 

secondary service in cases where the conditions apply, but otherwise will be 

curtailed on a pro rata basis with other Firm Transmission Service. When the 

Transmission Provider determines that an electrical emergency exists on its 

Transmission System and implements emergency procedures to Curtail Firm 

Transmission Service, the Transmission Customer shall make the required 

reductions upon request of the Transmission Provider. However, the 

Transmission Provider reserves the right to Curtail, in whole or in part, any 

Firm Transmission Service provided under the Tariff when, in the 

Transmission Provider's sole discretion, an emergency or other unforeseen 

condition impairs or degrades the reliability of its Transmission System. The 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 49 - 

Transmission Provider will notify all affected Transmission Customers in a 

timely manner of any scheduled Curtailments. 

13.7 Classification of Firm Transmission Service: 

(a) The Transmission Customer taking Firm Point-To-Point 

Transmission Service may (1) change its Receipt and Delivery 

Points to obtain service on a non-firm basis consistent with the 

terms of Section 22.1 or (2) request a modification of the Points 

of Receipt or Delivery on a firm basis pursuant to the terms of 

Section 22.2. 

(b) The Transmission Customer may purchase transmission service to 

make sales of capacity and energy from multiple generating units 

that are on the Transmission Provider's Transmission System. For 

such a purchase of transmission service, the resources will be 

designated as multiple Points of Receipt, unless the multiple 

generating units are at the same generating plant in which case the 

units would be treated as a single Point of Receipt. 

(c) The Transmission Provider shall provide firm deliveries of 

capacity and energy from the Point(s) of Receipt to the Point(s) of 

Delivery. Each Point of Receipt at which firm transmission 

capacity is reserved by the Transmission Customer shall be set 
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Original Sheet No. - 50 - 

forth in the Firm Point-To-Point Service Agreement for LongTerm Firm Transmission Service along with a corresponding 

capacity reservation associated with each Point of Receipt. Points 

of Receipt and corresponding capacity reservations shall be as 

mutually agreed upon by the Parties for Short-Term Firm 

Transmission. Each Point of Delivery at which firm transfer 

capability is reserved by the Transmission Customer shall be set 

forth in the Firm Point-To-Point Service Agreement for LongTerm Firm Transmission Service along with a corresponding 

capacity reservation associated with each Point of Delivery. 

Points of Delivery and corresponding capacity reservations shall 

be as mutually agreed upon by the Parties for Short-Term Firm 

Transmission. The greater of either (1) the sum of the capacity 

reservations at the Point(s) of Receipt, or (2) the sum of the 

capacity reservations at the Point(s) of Delivery shall be the 

Transmission Customer's Reserved Capacity. The Transmission 

Customer will be billed for its Reserved Capacity under the terms 

of Schedule 7. The Transmission Customer may not exceed its 

firm capacity reserved at each Point of Receipt and each Point of 

Delivery except as otherwise specified in Section 22. The 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 51 - 

Transmission Provider shall specify the rate treatment and all 

related terms and conditions applicable in the event that a 

Transmission Customer (including Third-Party Sales by the 

Transmission Provider) exceeds its firm reserved capacity at any 

Point of Receipt or Point of Delivery or uses Transmission 

Service at a Point of Receipt or Point of Delivery that it has not 

reserved. 

13.8 Scheduling of Firm Point-To-Point Transmission Service: 

Schedules for the Transmission Customer's Firm Point-To-Point Transmission 

Service must be submitted to the Transmission Provider no later than 10:00 

a.m. [or a reasonable time that is generally accepted in the region and is 

consistently adhered to by the Transmission Provider] of the day prior to 

commencement of such service. Schedules submitted after 10:00 a.m. will be 

accommodated, if practicable. Hour-to-hour schedules of any capacity and 

energy that is to be delivered must be stated in increments of 1,000 kW per 

hour [or a reasonable increment that is generally accepted in the region and is 

consistently adhered to by the Transmission Provider]. Transmission 

Customers within the Transmission Provider's service area with multiple 

requests for Transmission Service at a Point of Receipt, each of which is under 

1,000 kW per hour, may consolidate their service requests at a common point 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 52 - 

of receipt into units of 1,000 kW per hour for scheduling and billing purposes. 

Scheduling changes will be permitted up to twenty (20) minutes [or a 

reasonable time that is generally accepted in the region and is consistently 

adhered to by the Transmission Provider] before the start of the next clock 

hour provided that the Delivering Party and Receiving Party also agree to the 

schedule modification. The Transmission Provider will furnish to the 

Delivering Party's system operator, hour-to-hour schedules equal to those 

furnished by the Receiving Party (unless reduced for losses) and shall deliver 

the capacity and energy provided by such schedules. Should the Transmission 

Customer, Delivering Party or Receiving Party revise or terminate any 

schedule, such party shall immediately notify the Transmission Provider, and 

the Transmission Provider shall have the right to adjust accordingly the 

schedule for capacity and energy to be received and to be delivered. 

14 Nature of Non-Firm Point-To-Point Transmission Service 

14.1 Term: 

Non-Firm Point-To-Point Transmission Service will be available for periods 

ranging from one (1) hour to one (1) month. However, a Purchaser of NonFirm Point-To-Point Transmission Service will be entitled to reserve a 

sequential term of service (such as a sequential monthly term without having 

to wait for the initial term to expire before requesting another monthly term) 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 53 - 

so that the total time period for which the reservation applies is greater than 

one month, subject to the requirements of Section 18.3. 

14.2 Reservation Priority: 

Non-Firm Point-To-Point Transmission Service shall be available from 

transfer capability in excess of that needed for reliable service to Native Load 

Customers, Network Customers and other Transmission Customers taking 

Long-Term and Short-Term Firm Point-To-Point Transmission Service. A 

higher priority will be assigned first to requests or reservations with a longer 

duration of service and second to Pre-Confirmed Applications. In the event 

the Transmission System is constrained, competing requests of the same PreConfirmation status and equal duration will be prioritized based on the highest 

price offered by the Eligible Customer for the Transmission Service. Eligible 

Customers that have already reserved shorter term service have the right of 

first refusal to match any longer term request before being preempted. A 

longer term competing request for Non-Firm Point-To-Point Transmission 

Service will be granted if the Eligible Customer with the right of first refusal 

does not agree to match the competing request: (a) immediately for hourly 

Non-Firm Point-To-Point Transmission Service after notification by the 

Transmission Provider; and, (b) within 24 hours (or earlier if necessary to 

comply with the scheduling deadlines provided in section 14.6) for Non-Firm 
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Original Sheet No. - 54 - 

Point-To-Point Transmission Service other than hourly transactions after 

notification by the Transmission Provider. Transmission service for Network 

Customers from resources other than designated Network Resources will have 

a higher priority than any Non-Firm Point-To-Point Transmission Service. 

Non-Firm Point-To-Point Transmission Service over secondary Point(s) of 

Receipt and Point(s) of Delivery will have the lowest reservation priority 

under the Tariff. 

14.3 Use of Non-Firm Point-To-Point Transmission Service by the 

Transmission Provider: 

The Transmission Provider will be subject to the rates, terms and conditions of 

Part II of the Tariff when making Third-Party Sales under (i) agreements 

executed on or after [insert date sixty (60) days after publication in Federal 

Register] or (ii) agreements executed prior to the aforementioned date that the 

Commission requires to be unbundled, by the date specified by the 

Commission. The Transmission Provider will maintain separate accounting, 

pursuant to Section 8, for any use of Non-Firm Point-To-Point Transmission 

Service to make Third-Party Sales. 

14.4 Service Agreements: 

The Transmission Provider shall offer a standard form Non-Firm Point-ToPoint Transmission Service Agreement (Attachment B) to an Eligible 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 55 - 

Customer when it first submits a Completed Application for Non-Firm PointTo-Point Transmission Service pursuant to the Tariff. Executed Service 

Agreements that contain the information required under the Tariff shall be 

filed with the Commission in compliance with applicable Commission 

regulations. 

14.5 Classification of Non-Firm Point-To-Point Transmission Service: 

Non-Firm Point-To-Point Transmission Service shall be offered under terms 

and conditions contained in Part II of the Tariff. The Transmission Provider 

undertakes no obligation under the Tariff to plan its Transmission System in 

order to have sufficient capacity for Non-Firm Point-To-Point Transmission 

Service. Parties requesting Non-Firm Point-To-Point Transmission Service 

for the transmission of firm power do so with the full realization that such 

service is subject to availability and to Curtailment or Interruption under the 

terms of the Tariff. The Transmission Provider shall specify the rate treatment 

and all related terms and conditions applicable in the event that a 

Transmission Customer (including Third-Party Sales by the Transmission 

Provider) exceeds its non-firm capacity reservation. Non-Firm Point-To-Point 

Transmission Service shall include transmission of energy on an hourly basis 

and transmission of scheduled short-term capacity and energy on a daily, 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 56 - 

weekly or monthly basis, but not to exceed one month's reservation for any 

one Application, under Schedule 8. 

14.6 Scheduling of Non-Firm Point-To-Point Transmission Service: 

Schedules for Non-Firm Point-To-Point Transmission Service must be 

submitted to the Transmission Provider no later than 2:00 p.m. [or a 

reasonable time that is generally accepted in the region and is consistently 

adhered to by the Transmission Provider] of the day prior to commencement 

of such service. Schedules submitted after 2:00 p.m. will be accommodated, if 

practicable. Hour-to-hour schedules of energy that is to be delivered must be 

stated in increments of 1,000 kW per hour [or a reasonable increment that is 

generally accepted in the region and is consistently adhered to by the 

Transmission Provider]. Transmission Customers within the Transmission 

Provider's service area with multiple requests for Transmission Service at a 

Point of Receipt, each of which is under 1,000 kW per hour, may consolidate 

their schedules at a common Point of Receipt into units of 1,000 kW per hour. 

Scheduling changes will be permitted up to twenty (20) minutes [or a 

reasonable time that is generally accepted in the region and is consistently 

adhered to by the Transmission Provider] before the start of the next clock 

hour provided that the Delivering Party and Receiving Party also agree to the 

schedule modification. The Transmission Provider will furnish to the 
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Original Sheet No. - 57 - 

Delivering Party's system operator, hour-to-hour schedules equal to those 

furnished by the Receiving Party (unless reduced for losses) and shall deliver 

the capacity and energy provided by such schedules. Should the Transmission 

Customer, Delivering Party or Receiving Party revise or terminate any 

schedule, such party shall immediately notify the Transmission Provider, and 

the Transmission Provider shall have the right to adjust accordingly the 

schedule for capacity and energy to be received and to be delivered. 

14.7 Curtailment or Interruption of Service: 

The Transmission Provider reserves the right to Curtail, in whole or in part, 

Non-Firm Point-To-Point Transmission Service provided under the Tariff for 

reliability reasons when an emergency or other unforeseen condition threatens 

to impair or degrade the reliability of its Transmission System or the systems 

directly and indirectly interconnected with Transmission Provider’s 

Transmission System. Transmission Provider may elect to implement such 

Curtailments pursuant to the Transmission Loading Relief procedures 

specified in Attachment J. The Transmission Provider reserves the right to 

Interrupt, in whole or in part, Non-Firm Point-To-Point Transmission Service 

provided under the Tariff for economic reasons in order to accommodate (1) a 

request for Firm Transmission Service, (2) a request for Non-Firm Point-ToPoint Transmission Service of greater duration, (3) a request for Non-Firm 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 58 - 

Point-To-Point Transmission Service of equal duration with a higher price, (4) 

transmission service for Network Customers from non-designated resources, 

or (5) transmission service for Firm Point-to-Point Transmission Service 

during conditional curtailment periods as described in Section 15.4. The 

Transmission Provider also will discontinue or reduce service to the 

Transmission Customer to the extent that deliveries for transmission are 

discontinued or reduced at the Point(s) of Receipt. Where required, 

Curtailments or Interruptions will be made on a non-discriminatory basis to 

the transaction(s) that effectively relieve the constraint, however, Non-Firm 

Point-To-Point Transmission Service shall be subordinate to Firm 

Transmission Service. If multiple transactions require Curtailment or 

Interruption, to the extent practicable and consistent with Good Utility 

Practice, Curtailments or Interruptions will be made to transactions of the 

shortest term (e.g., hourly non-firm transactions will be Curtailed or 

Interrupted before daily non-firm transactions and daily non-firm transactions 

will be Curtailed or Interrupted before weekly non-firm transactions). 

Transmission service for Network Customers from resources other than 

designated Network Resources will have a higher priority than any Non-Firm 

Point-To-Point Transmission Service under the Tariff. Non-Firm Point-ToPoint Transmission Service over secondary Point(s) of Receipt and Point(s) of 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 59 - 

Delivery will have a lower priority than any Non-Firm Point-To-Point 

Transmission Service under the Tariff. The Transmission Provider will 

provide advance notice of Curtailment or Interruption where such notice can 

be provided consistent with Good Utility Practice. 

15 Service Availability 

15.1 General Conditions: 

The Transmission Provider will provide Firm and Non-Firm Point-To-Point 

Transmission Service over, on or across its Transmission System to any 

Transmission Customer that has met the requirements of Section 16. 

15.2 Determination of Available Transfer Capability: 

A description of the Transmission Provider's specific methodology for 

assessing available transfer capability posted on the Transmission Provider's 

OASIS (Section 4) is contained in Attachment C of the Tariff. In the event 

sufficient transfer capability may not exist to accommodate a service request, 

the Transmission Provider will respond by performing a System Impact Study. 

15.3 Initiating Service in the Absence of an Executed Service 

Agreement: 

If the Transmission Provider and the Transmission Customer requesting Firm 

or Non-Firm Point-To-Point Transmission Service cannot agree on all the 

terms and conditions of the Point-To-Point Service Agreement, the 

Transmission Provider shall file with the Commission, within thirty (30) days 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 60 - 

after the date the Transmission Customer provides written notification 

directing the Transmission Provider to file, an unexecuted Point-To-Point 

Service Agreement containing terms and conditions deemed appropriate by 

the Transmission Provider for such requested Transmission Service. The 

Transmission Provider shall commence providing Transmission Service 

subject to the Transmission Customer agreeing to (i) compensate the 

Transmission Provider at whatever rate the Commission ultimately determines 

to be just and reasonable, and (ii) comply with the terms and conditions of the 

Tariff including posting appropriate security deposits in accordance with the 

terms of Section 17.3. 

15.4 Obligation to Provide Transmission Service that Requires 

Expansion or Modification of the Transmission System, Redispatch 

or Conditional Curtailment: 

(a) If the Transmission Provider determines that it cannot 

accommodate a Completed Application for Firm Point-To-Point 

Transmission Service because of insufficient capability on its 

Transmission System, the Transmission Provider will use due 

diligence to expand or modify its Transmission System to provide 

the requested Firm Transmission Service, consistent with its 

planning obligations in Attachment K, provided the Transmission 

Customer agrees to compensate the Transmission Provider for 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 61 - 

such costs pursuant to the terms of Section 27. The Transmission 

Provider will conform to Good Utility Practice and its planning 

obligations in Attachment K, in determining the need for new 

facilities and in the design and construction of such facilities. The 

obligation applies only to those facilities that the Transmission 

Provider has the right to expand or modify. 

(b) If the Transmission Provider determines that it cannot 

accommodate a Completed Application for Long-Term Firm 

Point-To-Point Transmission Service because of insufficient 

capability on its Transmission System, the Transmission Provider 

will use due diligence to provide redispatch from its own 

resources until (i) Network Upgrades are completed for the 

Transmission Customer, (ii) the Transmission Provider 

determines through a biennial reassessment that it can no longer 

reliably provide the redispatch, or (iii) the Transmission Customer 

terminates the service because of redispatch changes resulting 

from the reassessment. A Transmission Provider shall not 

unreasonably deny self-provided redispatch or redispatch 

arranged by the Transmission Customer from a third party 

resource. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 62 - 

(c) If the Transmission Provider determines that it cannot 

accommodate a Completed Application for Long-Term Firm 

Point-To-Point Transmission Service because of insufficient 

capability on its Transmission System, the Transmission Provider 

will offer the Firm Transmission Service with the condition that 

the Transmission Provider may curtail the service prior to the 

curtailment of other Firm Transmission Service for a specified 

number of hours per year or during System Condition(s). If the 

Transmission Customer accepts the service, the Transmission 

Provider will use due diligence to provide the service until (i) 

Network Upgrades are completed for the Transmission Customer, 

(ii) the Transmission Provider determines through a biennial 

reassessment that it can no longer reliably provide such service, or 

(iii) the Transmission Customer terminates the service because 

the reassessment increased the number of hours per year of 

conditional curtailment or changed the System Conditions. 

15.5 Deferral of Service: 

The Transmission Provider may defer providing service until it completes 

construction of new transmission facilities or upgrades needed to provide Firm 

Point-To-Point Transmission Service whenever the Transmission Provider 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 63 - 

determines that providing the requested service would, without such new 

facilities or upgrades, impair or degrade reliability to any existing firm 

services. 

15.6 Other Transmission Service Schedules: 

Eligible Customers receiving transmission service under other agreements on 

file with the Commission may continue to receive transmission service under 

those agreements until such time as those agreements may be modified by the 

Commission. 

15.7 Real Power Losses: 

Real Power Losses are associated with all transmission service. The 

Transmission Provider is not obligated to provide Real Power Losses. The 

Transmission Customer is responsible for replacing losses associated with all 

transmission service as calculated by the Transmission Provider. The 

applicable Real Power Loss factors are as follows: [To be completed by the 

Transmission Provider]. 

16 Transmission Customer Responsibilities 

16.1 Conditions Required of Transmission Customers: 

Point-To-Point Transmission Service shall be provided by the Transmission 

Provider only if the following conditions are satisfied by the Transmission 

Customer: 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 64 - 

(a) The Transmission Customer has pending a Completed 

Application for service; 

(b) The Transmission Customer meets the creditworthiness criteria 

set forth in Section 11; 

(c) The Transmission Customer will have arrangements in place for 

any other transmission service necessary to effect the delivery 

from the generating source to the Transmission Provider prior to 

the time service under Part II of the Tariff commences; 

(d) The Transmission Customer agrees to pay for any facilities 

constructed and chargeable to such Transmission Customer under 

Part II of the Tariff, whether or not the Transmission Customer 

takes service for the full term of its reservation; 

(e) The Transmission Customer provides the information required by 

the Transmission Provider’s planning process established in 

Attachment K; and 

(f) The Transmission Customer has executed a Point-To-Point 

Service Agreement or has agreed to receive service pursuant to 

Section 15.3. 

16.2 Transmission Customer Responsibility for Third-Party 

Arrangements: 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 65 - 

Any scheduling arrangements that may be required by other electric systems 

shall be the responsibility of the Transmission Customer requesting service. 

The Transmission Customer shall provide, unless waived by the Transmission 

Provider, notification to the Transmission Provider identifying such systems 

and authorizing them to schedule the capacity and energy to be transmitted by 

the Transmission Provider pursuant to Part II of the Tariff on behalf of the 

Receiving Party at the Point of Delivery or the Delivering Party at the Point of 

Receipt. However, the Transmission Provider will undertake reasonable 

efforts to assist the Transmission Customer in making such arrangements, 

including without limitation, providing any information or data required by 

such other electric system pursuant to Good Utility Practice. 

17 Procedures for Arranging Firm Point-To-Point Transmission Service 

17.1 Application: 

A request for Firm Point-To-Point Transmission Service for periods of one 

year or longer must contain a written Application to: [Transmission Provider 

Name and Address], at least sixty (60) days in advance of the calendar month 

in which service is to commence. The Transmission Provider will consider 

requests for such firm service on shorter notice when feasible. Requests for 

firm service for periods of less than one year shall be subject to expedited 

procedures that shall be negotiated between the Parties within the time 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 66 - 

constraints provided in Section 17.5. All Firm Point-To-Point Transmission 

Service requests should be submitted by entering the information listed below 

on the Transmission Provider's OASIS. Prior to implementation of the 

Transmission Provider's OASIS, a Completed Application may be submitted 

by (i) transmitting the required information to the Transmission Provider by 

telefax, or (ii) providing the information by telephone over the Transmission 

Provider's time recorded telephone line. Each of these methods will provide a 

time-stamped record for establishing the priority of the Application. 

17.2 Completed Application: 

A Completed Application shall provide all of the information included in 18 

CFR  2.20 including but not limited to the following: 

(i) The identity, address, telephone number and facsimile number of 

the entity requesting service; 

(ii) A statement that the entity requesting service is, or will be upon 

commencement of service, an Eligible Customer under the Tariff; 

(iii) The location of the Point(s) of Receipt and Point(s) of Delivery 

and the identities of the Delivering Parties and the Receiving 

Parties; 

(iv) The location of the generating facility(ies) supplying the capacity 

and energy and the location of the load ultimately served by the 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 67 - 

capacity and energy transmitted. The Transmission Provider will 

treat this information as confidential except to the extent that 

disclosure of this information is required by this Tariff, by 

regulatory or judicial order, for reliability purposes pursuant to 

Good Utility Practice or pursuant to RTG transmission 

information sharing agreements. The Transmission Provider shall 

treat this information consistent with the standards of conduct 

contained in Part 37 of the Commission's regulations; 

(v) A description of the supply characteristics of the capacity and 

energy to be delivered; 

(vi) An estimate of the capacity and energy expected to be delivered 

to the Receiving Party; 

(vii) The Service Commencement Date and the term of the requested 

Transmission Service; 

(viii) The transmission capacity requested for each Point of Receipt and 

each Point of Delivery on the Transmission Provider's 

Transmission System; customers may combine their requests for 

service in order to satisfy the minimum transmission capacity 

requirement; 

(ix) A statement indicating that, if the Eligible Customer submits a 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 68 - 

Pre-Confirmed Application, the Eligible Customer will execute a 

Service Agreement upon receipt of notification that the 

Transmission Provider can provide the requested Transmission 

Service; and 

(x) Any additional information required by the Transmission 

Provider’s planning process established in Attachment K. 

The Transmission Provider shall treat this information consistent with the 

standards of conduct contained in Part 37 of the Commission's regulations. 

17.3 Deposit: 

A Completed Application for Firm Point-To-Point Transmission Service also 

shall include a deposit of either one month's charge for Reserved Capacity or 

the full charge for Reserved Capacity for service requests of less than one 

month. If the Application is rejected by the Transmission Provider because it 

does not meet the conditions for service as set forth herein, or in the case of 

requests for service arising in connection with losing bidders in a Request For 

Proposals (RFP), said deposit shall be returned with interest less any 

reasonable costs incurred by the Transmission Provider in connection with the 

review of the losing bidder's Application. The deposit also will be returned 

with interest less any reasonable costs incurred by the Transmission Provider 

if the Transmission Provider is unable to complete new facilities needed to 
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provide the service. If an Application is withdrawn or the Eligible Customer 

decides not to enter into a Service Agreement for Firm Point-To-Point 

Transmission Service, the deposit shall be refunded in full, with interest, less 

reasonable costs incurred by the Transmission Provider to the extent such 

costs have not already been recovered by the Transmission Provider from the 

Eligible Customer. The Transmission Provider will provide to the Eligible 

Customer a complete accounting of all costs deducted from the refunded 

deposit, which the Eligible Customer may contest if there is a dispute 

concerning the deducted costs. Deposits associated with construction of new 

facilities are subject to the provisions of Section 19. If a Service Agreement 

for Firm Point-To-Point Transmission Service is executed, the deposit, with 

interest, will be returned to the Transmission Customer upon expiration or 

termination of the Service Agreement for Firm Point-To-Point Transmission 

Service. Applicable interest shall be computed in accordance with the 

Commission's regulations at 18 CFR  35.19a(a)(2)(iii), and shall be calculated 

from the day the deposit check is credited to the Transmission Provider's 

account. 

17.4 Notice of Deficient Application: 

If an Application fails to meet the requirements of the Tariff, the Transmission 

Provider shall notify the entity requesting service within fifteen (15) days of 
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receipt of the reasons for such failure. The Transmission Provider will 

attempt to remedy minor deficiencies in the Application through informal 

communications with the Eligible Customer. If such efforts are unsuccessful, 

the Transmission Provider shall return the Application, along with any 

deposit, with interest. Upon receipt of a new or revised Application that fully 

complies with the requirements of Part II of the Tariff, the Eligible Customer 

shall be assigned a new priority consistent with the date of the new or revised 

Application. 

17.5 Response to a Completed Application: 

Following receipt of a Completed Application for Firm Point-To-Point 

Transmission Service, the Transmission Provider shall make a determination 

of available transfer capability as required in Section 15.2. The Transmission 

Provider shall notify the Eligible Customer as soon as practicable, but not later 

than thirty (30) days after the date of receipt of a Completed Application 

either (i) if it will be able to provide service without performing a System 

Impact Study or (ii) if such a study is needed to evaluate the impact of the 

Application pursuant to Section 19.1. Responses by the Transmission 

Provider must be made as soon as practicable to all completed applications 

(including applications by its own merchant function) and the timing of such 

responses must be made on a non-discriminatory basis. 
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17.6 Execution of Service Agreement: 

Whenever the Transmission Provider determines that a System Impact Study 

is not required and that the service can be provided, it shall notify the Eligible 

Customer as soon as practicable but no later than thirty (30) days after receipt 

of the Completed Application. Where a System Impact Study is required, the 

provisions of Section 19 will govern the execution of a Service Agreement. 

Failure of an Eligible Customer to execute and return the Service Agreement 

or request the filing of an unexecuted service agreement pursuant to Section 

15.3, within fifteen (15) days after it is tendered by the Transmission Provider 

will be deemed a withdrawal and termination of the Application and any 

deposit submitted shall be refunded with interest. Nothing herein limits the 

right of an Eligible Customer to file another Application after such withdrawal 

and termination. 

17.7 Extensions for Commencement of Service: 

The Transmission Customer can obtain, subject to availability, up to five (5) 

one-year extensions for the commencement of service. The Transmission 

Customer may postpone service by paying a non-refundable annual 

reservation fee equal to one-month's charge for Firm Transmission Service for 

each year or fraction thereof within 15 days of notifying the Transmission 

Provider it intends to extend the commencement of service. If during any 
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extension for the commencement of service an Eligible Customer submits a 

Completed Application for Firm Transmission Service, and such request can 

be satisfied only by releasing all or part of the Transmission Customer's 

Reserved Capacity, the original Reserved Capacity will be released unless the 

following condition is satisfied. Within thirty (30) days, the original 

Transmission Customer agrees to pay the Firm Point-To-Point transmission 

rate for its Reserved Capacity concurrent with the new Service 

Commencement Date. In the event the Transmission Customer elects to 

release the Reserved Capacity, the reservation fees or portions thereof 

previously paid will be forfeited. 

18 Procedures for Arranging Non-Firm Point-To-Point Transmission 

Service 

18.1 Application: 

Eligible Customers seeking Non-Firm Point-To-Point Transmission Service 

must submit a Completed Application to the Transmission Provider. 

Applications should be submitted by entering the information listed below on 

the Transmission Provider's OASIS. Prior to implementation of the 

Transmission Provider's OASIS, a Completed Application may be submitted 

by (i) transmitting the required information to the Transmission Provider by 

telefax, or (ii) providing the information by telephone over the Transmission 
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Provider's time recorded telephone line. Each of these methods will provide a 

time-stamped record for establishing the service priority of the Application. 

18.2 Completed Application: 

A Completed Application shall provide all of the information included in 18 

CFR § 2.20 including but not limited to the following: 

(i) The identity, address, telephone number and facsimile number of 

the entity requesting service; 

(ii) A statement that the entity requesting service is, or will be upon 

commencement of service, an Eligible Customer under the Tariff; 

(iii) The Point(s) of Receipt and the Point(s) of Delivery; 

(iv) The maximum amount of capacity requested at each Point of 

Receipt and Point of Delivery; and 

(v) The proposed dates and hours for initiating and terminating 

transmission service hereunder. 

In addition to the information specified above, when required to properly 

evaluate system conditions, the Transmission Provider also may ask the 

Transmission Customer to provide the following: 

(vi) The electrical location of the initial source of the power to be 

transmitted pursuant to the Transmission Customer's request for 

service; and 
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(vii) The electrical location of the ultimate load. 

The Transmission Provider will treat this information in (vi) and (vii) as 

confidential at the request of the Transmission Customer except to the extent 

that disclosure of this information is required by this Tariff, by regulatory or 

judicial order, for reliability purposes pursuant to Good Utility Practice, or 

pursuant to RTG transmission information sharing agreements. The 

Transmission Provider shall treat this information consistent with the 

standards of conduct contained in Part 37 of the Commission's regulations. 

(viii) A statement indicating that, if the Eligible Customer submits a 

Pre-Confirmed Application, the Eligible Customer will execute a 

Service Agreement upon receipt of notification that the 

Transmission Provider can provide the requested Transmission 

Service. 

18.3 Reservation of Non-Firm Point-To-Point Transmission Service: 

Requests for monthly service shall be submitted no earlier than sixty (60) days

before service is to commence; requests for weekly service shall be submitted 

no earlier than fourteen (14) days before service is to commence, requests for 

daily service shall be submitted no earlier than two (2) days before service is 

to commence, and requests for hourly service shall be submitted no earlier 

than noon the day before service is to commence. Requests for service 
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received later than 2:00 p.m. prior to the day service is scheduled to 

commence will be accommodated if practicable [or such reasonable times that 

are generally accepted in the region and are consistently adhered to by the 

Transmission Provider]. 

18.4 Determination of Available Transfer Capability: 

Following receipt of a tendered schedule the Transmission Provider will make 

a determination on a non-discriminatory basis of available transfer capability 

pursuant to Section 15.2. Such determination shall be made as soon as 

reasonably practicable after receipt, but not later than the following time 

periods for the following terms of service (i) thirty (30) minutes for hourly 

service, (ii) thirty (30) minutes for daily service, (iii) four (4) hours for weekly 

service, and (iv) two (2) days for monthly service. [Or such reasonable times 

that are generally accepted in the region and are consistently adhered to by the 

Transmission Provider]. 

19 Additional Study Procedures For Firm Point-To-Point Transmission 

Service Requests 

19.1 Notice of Need for System Impact Study: 

After receiving a request for service, the Transmission Provider shall 

determine on a non-discriminatory basis whether a System Impact Study is 

needed. A description of the Transmission Provider's methodology for 

completing a System Impact Study is provided in Attachment D. If the 
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Transmission Provider determines that a System Impact Study is necessary to 

accommodate the requested service, it shall so inform the Eligible Customer, 

as soon as practicable. Once informed, the Eligible Customer shall timely 

notify the Transmission Provider if it elects to have the Transmission Provider 

study redispatch or conditional curtailment as part of the System Impact 

Study. If notification is provided prior to tender of the System Impact Study 

Agreement, the Eligible Customer can avoid the costs associated with the 

study of these options. The Transmission Provider shall within thirty (30) days 

of receipt of a Completed Application, tender a System Impact Study 

Agreement pursuant to which the Eligible Customer shall agree to reimburse 

the Transmission Provider for performing the required System Impact Study. 

For a service request to remain a Completed Application, the Eligible 

Customer shall execute the System Impact Study Agreement and return it to 

the Transmission Provider within fifteen (15) days. If the Eligible Customer 

elects not to execute the System Impact Study Agreement, its application shall 

be deemed withdrawn and its deposit, pursuant to Section 17.3, shall be 

returned with interest. 

19.2 System Impact Study Agreement and Cost Reimbursement: 

 

(i) The System Impact Study Agreement will clearly specify the 

Transmission Provider's estimate of the actual cost, and time for 
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completion of the System Impact Study. The charge shall not 

exceed the actual cost of the study. In performing the System 

Impact Study, the Transmission Provider shall rely, to the extent 

reasonably practicable, on existing transmission planning studies. 

The Eligible Customer will not be assessed a charge for such 

existing studies; however, the Eligible Customer will be 

responsible for charges associated with any modifications to 

existing planning studies that are reasonably necessary to evaluate 

the impact of the Eligible Customer's request for service on the 

Transmission System. 

(ii) If in response to multiple Eligible Customers requesting service in 

relation to the same competitive solicitation, a single System 

Impact Study is sufficient for the Transmission Provider to 

accommodate the requests for service, the costs of that study shall 

be pro-rated among the Eligible Customers. 

(iii) For System Impact Studies that the Transmission Provider 

conducts on its own behalf, the Transmission Provider shall 

record the cost of the System Impact Studies pursuant to Section 

20. 

19.3 System Impact Study Procedures: 
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Upon receipt of an executed System Impact Study Agreement, the 

Transmission Provider will use due diligence to complete the required System 

Impact Study within a sixty (60) day period. The System Impact Study shall 

identify (1) any system constraints, identified with specificity by transmission 

element or flowgate, (2) redispatch options (when requested by an Eligible 

Customer) including an estimate of the cost of redispatch, (3) conditional 

curtailment options (when requested by an Eligible Customer) including the 

number of hours per year and the System Conditions during which conditional 

curtailment may occur, and (4) additional Direct Assignment Facilities or 

Network Upgrades required to provide the requested service. For customers 

requesting the study of redispatch options, the System Impact Study shall (1) 

identify all resources located within the Transmission Provider’s Control Area 

that can significantly contribute toward relieving the system constraint and (2) 

provide a measurement of each resource’s impact on the system constraint. If 

the Transmission Provider possesses information indicating that any resource 

outside its Control Area could relieve the constraint, it shall identify each such 

resource in the System Impact Study. In the event that the Transmission 

Provider is unable to complete the required System Impact Study within such 

time period, it shall so notify the Eligible Customer and provide an estimated 

completion date along with an explanation of the reasons why additional time 
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is required to complete the required studies. A copy of the completed System 

Impact Study and related work papers shall be made available to the Eligible 

Customer as soon as the System Impact Study is complete. The Transmission 

Provider will use the same due diligence in completing the System Impact 

Study for an Eligible Customer as it uses when completing studies for itself. 

The Transmission Provider shall notify the Eligible Customer immediately 

upon completion of the System Impact Study if the Transmission System will 

be adequate to accommodate all or part of a request for service or that no costs 

are likely to be incurred for new transmission facilities or upgrades. In order 

for a request to remain a Completed Application, within fifteen (15) days of 

completion of the System Impact Study the Eligible Customer must execute a 

Service Agreement or request the filing of an unexecuted Service Agreement 

pursuant to Section 15.3, or the Application shall be deemed terminated and 

withdrawn. 

19.4 Facilities Study Procedures: 

If a System Impact Study indicates that additions or upgrades to the 

Transmission System are needed to supply the Eligible Customer's service 

request, the Transmission Provider, within thirty (30) days of the completion 

of the System Impact Study, shall tender to the Eligible Customer a Facilities 

Study Agreement pursuant to which the Eligible Customer shall agree to 
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reimburse the Transmission Provider for performing the required Facilities 

Study. For a service request to remain a Completed Application, the Eligible 

Customer shall execute the Facilities Study Agreement and return it to the 

Transmission Provider within fifteen (15) days. If the Eligible Customer 

elects not to execute the Facilities Study Agreement, its application shall be 

deemed withdrawn and its deposit, pursuant to Section 17.3, shall be returned 

with interest. Upon receipt of an executed Facilities Study Agreement, the 

Transmission Provider will use due diligence to complete the required 

Facilities Study within a sixty (60) day period. If the Transmission Provider is 

unable to complete the Facilities Study in the allotted time period, the 

Transmission Provider shall notify the Transmission Customer and provide an 

estimate of the time needed to reach a final determination along with an 

explanation of the reasons that additional time is required to complete the 

study. When completed, the Facilities Study will include a good faith estimate 

of (i) the cost of Direct Assignment Facilities to be charged to the 

Transmission Customer, (ii) the Transmission Customer's appropriate share of 

the cost of any required Network Upgrades as determined pursuant to the 

provisions of Part II of the Tariff, and (iii) the time required to complete such 

construction and initiate the requested service. The Transmission Customer 

shall provide the Transmission Provider with a letter of credit or other 
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reasonable form of security acceptable to the Transmission Provider 

equivalent to the costs of new facilities or upgrades consistent with 

commercial practices as established by the Uniform Commercial Code. The 

Transmission Customer shall have thirty (30) days to execute a Service 

Agreement or request the filing of an unexecuted Service Agreement and 

provide the required letter of credit or other form of security or the request 

will no longer be a Completed Application and shall be deemed terminated 

and withdrawn. 

19.5 Facilities Study Modifications: 

Any change in design arising from inability to site or construct facilities as 

proposed will require development of a revised good faith estimate. New 

good faith estimates also will be required in the event of new statutory or 

regulatory requirements that are effective before the completion of 

construction or other circumstances beyond the control of the Transmission 

Provider that significantly affect the final cost of new facilities or upgrades to 

be charged to the Transmission Customer pursuant to the provisions of Part II 

of the Tariff. 

19.6 Due Diligence in Completing New Facilities: 

The Transmission Provider shall use due diligence to add necessary facilities 

or upgrade its Transmission System within a reasonable time. The 
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Transmission Provider will not upgrade its existing or planned Transmission 

System in order to provide the requested Firm Point-To-Point Transmission 

Service if doing so would impair system reliability or otherwise impair or 

degrade existing firm service. 

19.7 Partial Interim Service: 

If the Transmission Provider determines that it will not have adequate transfer 

capability to satisfy the full amount of a Completed Application for Firm 

Point-To-Point Transmission Service, the Transmission Provider nonetheless 

shall be obligated to offer and provide the portion of the requested Firm PointTo-Point Transmission Service that can be accommodated without addition of 

any facilities and through redispatch. However, the Transmission Provider 

shall not be obligated to provide the incremental amount of requested Firm 

Point-To-Point Transmission Service that requires the addition of facilities or 

upgrades to the Transmission System until such facilities or upgrades have 

been placed in service. 

19.8 Expedited Procedures for New Facilities: 

In lieu of the procedures set forth above, the Eligible Customer shall have the 

option to expedite the process by requesting the Transmission Provider to 

tender at one time, together with the results of required studies, an "Expedited 

Service Agreement" pursuant to which the Eligible Customer would agree to 
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compensate the Transmission Provider for all costs incurred pursuant to the 

terms of the Tariff. In order to exercise this option, the Eligible Customer 

shall request in writing an expedited Service Agreement covering all of the 

above-specified items within thirty (30) days of receiving the results of the 

System Impact Study identifying needed facility additions or upgrades or costs 

incurred in providing the requested service. While the Transmission Provider 

agrees to provide the Eligible Customer with its best estimate of the new 

facility costs and other charges that may be incurred, such estimate shall not 

be binding and the Eligible Customer must agree in writing to compensate the 

Transmission Provider for all costs incurred pursuant to the provisions of the 

Tariff. The Eligible Customer shall execute and return such an Expedited 

Service Agreement within fifteen (15) days of its receipt or the Eligible 

Customer's request for service will cease to be a Completed Application and 

will be deemed terminated and withdrawn. 

19.9 Penalties for Failure to Meet Study Deadlines: 

Sections 19.3 and 19.4 require a Transmission Provider to use due diligence to 

meet 60-day study completion deadlines for System Impact Studies and 

Facilities Studies. 

(i) The Transmission Provider is required to file a notice with the 

Commission in the event that more than twenty (20) percent of 
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non-Affiliates’ System Impact Studies and Facilities Studies 

completed by the Transmission Provider in any two consecutive 

calendar quarters are not completed within the 60-day study 

completion deadlines. Such notice must be filed within thirty (30) 

days of the end of the calendar quarter triggering the notice 

requirement. 

(ii) For the purposes of calculating the percent of non-Affiliates’ 

System Impact Studies and Facilities Studies processed outside of 

the 60-day study completion deadlines, the Transmission Provider 

shall consider all System Impact Studies and Facilities Studies 

that it completes for non-Affiliates during the calendar quarter. 

The percentage should be calculated by dividing the number of 

those studies which are completed on time by the total number of 

completed studies. The Transmission Provider may provide an 

explanation in its notification filing to the Commission if it 

believes there are extenuating circumstances that prevented it 

from meeting the 60-day study completion deadlines. 

(iii) The Transmission Provider is subject to an operational penalty if 

it completes ten (10) percent or more of non-Affiliates’ System 

Impact Studies and Facilities Studies outside of the 60-day study 
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Original Sheet No. - 85 - 

completion deadlines for each of the two calendar quarters 

immediately following the quarter that triggered its notification 

filing to the Commission. The operational penalty will be 

assessed for each calendar quarter for which an operational 

penalty applies, starting with the calendar quarter immediately 

following the quarter that triggered the Transmission Provider’s 

notification filing to the Commission. The operational penalty 

will continue to be assessed each quarter until the Transmission 

Provider completes at least ninety (90) percent of all nonAffiliates’ System Impact Studies and Facilities Studies within 

the 60-day deadline. 

(iv) For penalties assessed in accordance with subsection (iii) above, 

the penalty amount for each System Impact Study or Facilities 

Study shall be equal to $500 for each day the Transmission 

Provider takes to complete that study beyond the 60-day deadline. 

20 Procedures if The Transmission Provider is Unable to Complete New 

Transmission Facilities for Firm Point-To-Point Transmission Service 

20.1 Delays in Construction of New Facilities: 

If any event occurs that will materially affect the time for completion of new 

facilities, or the ability to complete them, the Transmission Provider shall 

promptly notify the Transmission Customer. In such circumstances, the 
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Transmission Provider shall within thirty (30) days of notifying the 

Transmission Customer of such delays, convene a technical meeting with the 

Transmission Customer to evaluate the alternatives available to the 

Transmission Customer. The Transmission Provider also shall make available 

to the Transmission Customer studies and work papers related to the delay, 

including all information that is in the possession of the Transmission 

Provider that is reasonably needed by the Transmission Customer to evaluate 

any alternatives. 

20.2 Alternatives to the Original Facility Additions: 

When the review process of Section 20.1 determines that one or more 

alternatives exist to the originally planned construction project, the 

Transmission Provider shall present such alternatives for consideration by the 

Transmission Customer. If, upon review of any alternatives, the Transmission 

Customer desires to maintain its Completed Application subject to 

construction of the alternative facilities, it may request the Transmission 

Provider to submit a revised Service Agreement for Firm Point-To-Point 

Transmission Service. If the alternative approach solely involves Non-Firm 

Point-To-Point Transmission Service, the Transmission Provider shall 

promptly tender a Service Agreement for Non-Firm Point-To-Point 

Transmission Service providing for the service. In the event the Transmission 
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Provider concludes that no reasonable alternative exists and the Transmission 

Customer disagrees, the Transmission Customer may seek relief under the 

dispute resolution procedures pursuant to Section 12 or it may refer the 

dispute to the Commission for resolution. 

20.3 Refund Obligation for Unfinished Facility Additions: 

If the Transmission Provider and the Transmission Customer mutually agree 

that no other reasonable alternatives exist and the requested service cannot be 

provided out of existing capability under the conditions of Part II of the Tariff, 

the obligation to provide the requested Firm Point-To-Point Transmission 

Service shall terminate and any deposit made by the Transmission Customer 

shall be returned with interest pursuant to Commission regulations 

35.19a(a)(2)(iii). However, the Transmission Customer shall be responsible 

for all prudently incurred costs by the Transmission Provider through the time 

construction was suspended. 

21 Provisions Relating to Transmission Construction and Services on the 

Systems of Other Utilities 

21.1 Responsibility for Third-Party System Additions: 

The Transmission Provider shall not be responsible for making arrangements 

for any necessary engineering, permitting, and construction of transmission or 

distribution facilities on the system(s) of any other entity or for obtaining any 

regulatory approval for such facilities. The Transmission Provider will 
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undertake reasonable efforts to assist the Transmission Customer in obtaining 

such arrangements, including without limitation, providing any information or 

data required by such other electric system pursuant to Good Utility Practice. 

21.2 Coordination of Third-Party System Additions: 

In circumstances where the need for transmission facilities or upgrades is 

identified pursuant to the provisions of Part II of the Tariff, and if such 

upgrades further require the addition of transmission facilities on other 

systems, the Transmission Provider shall have the right to coordinate 

construction on its own system with the construction required by others. The 

Transmission Provider, after consultation with the Transmission Customer and 

representatives of such other systems, may defer construction of its new 

transmission facilities, if the new transmission facilities on another system 

cannot be completed in a timely manner. The Transmission Provider shall 

notify the Transmission Customer in writing of the basis for any decision to 

defer construction and the specific problems which must be resolved before it 

will initiate or resume construction of new facilities. Within sixty (60) days of 

receiving written notification by the Transmission Provider of its intent to 

defer construction pursuant to this section, the Transmission Customer may 

challenge the decision in accordance with the dispute resolution procedures 
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pursuant to Section 12 or it may refer the dispute to the Commission for 

resolution. 

22 Changes in Service Specifications 

22.1 Modifications On a Non-Firm Basis: 

The Transmission Customer taking Firm Point-To-Point Transmission Service 

may request the Transmission Provider to provide transmission service on a 

non-firm basis over Receipt and Delivery Points other than those specified in 

the Service Agreement ("Secondary Receipt and Delivery Points"), in amounts 

not to exceed its firm capacity reservation, without incurring an additional 

Non-Firm Point-To-Point Transmission Service charge or executing a new 

Service Agreement, subject to the following conditions. 

(a) Service provided over Secondary Receipt and Delivery Points 

will be non-firm only, on an as-available basis and will not 

displace any firm or non-firm service reserved or scheduled by 

third-parties under the Tariff or by the Transmission Provider on 

behalf of its Native Load Customers. 

(b) The sum of all Firm and non-firm Point-To-Point Transmission 

Service provided to the Transmission Customer at any time 

pursuant to this section shall not exceed the Reserved Capacity in 
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the relevant Service Agreement under which such services are 

provided. 

(c) The Transmission Customer shall retain its right to schedule Firm 

Point-To-Point Transmission Service at the Receipt and Delivery 

Points specified in the relevant Service Agreement in the amount 

of its original capacity reservation. 

(d) Service over Secondary Receipt and Delivery Points on a nonfirm basis shall not require the filing of an Application for NonFirm Point-To-Point Transmission Service under the Tariff. 

However, all other requirements of Part II of the Tariff (except as 

to transmission rates) shall apply to transmission service on a 

non-firm basis over Secondary Receipt and Delivery Points. 

22.2 Modification On a Firm Basis: 

Any request by a Transmission Customer to modify Receipt and Delivery 

Points on a firm basis shall be treated as a new request for service in 

accordance with Section 17 hereof, except that such Transmission Customer 

shall not be obligated to pay any additional deposit if the capacity reservation 

does not exceed the amount reserved in the existing Service Agreement. 

While such new request is pending, the Transmission Customer shall retain its 
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priority for service at the existing firm Receipt and Delivery Points specified 

in its Service Agreement. 

23 Sale or Assignment of Transmission Service 

23.1 Procedures for Assignment or Transfer of Service: 

Subject to Commission approval of any necessary filings, a Transmission 

Customer may sell, assign, or transfer all or a portion of its rights under its 

Service Agreement, but only to another Eligible Customer (the Assignee). 

The Transmission Customer that sells, assigns or transfers its rights under its 

Service Agreement is hereafter referred to as the Reseller. Compensation to 

Resellers shall not exceed the higher of (i) the original rate paid by the 

Reseller, (ii) the Transmission Provider’s maximum rate on file at the time of 

the assignment, or (iii) the Reseller’s opportunity cost capped at the 

Transmission Provider’s cost of expansion; provided that, for service prior to 

October 1, 2010, compensation to Resellers shall be at rates established by 

agreement between the Reseller and the Assignee. 

The Assignee must execute a service agreement with the Transmission 

Provider governing reassignments of transmission service prior to the date on 

which the reassigned service commences. The Transmission Provider shall 

charge the Reseller, as appropriate, at the rate stated in the Reseller’s Service 

Agreement with the Transmission Provider or the associated OASIS schedule 
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and credit the Reseller with the price reflected in the Assignee’s Service 

Agreement with the Transmission Provider or the associated OASIS schedule; 

provided that, such credit shall be reversed in the event of non-payment by the 

Assignee. If the Assignee does not request any change in the Point(s) of 

Receipt or the Point(s) of Delivery, or a change in any other term or condition 

set forth in the original Service Agreement, the Assignee will receive the same 

services as did the Reseller and the priority of service for the Assignee will be 

the same as that of the Reseller. The Assignee will be subject to all terms and 

conditions of this Tariff. If the Assignee requests a change in service, the 

reservation priority of service will be determined by the Transmission 

Provider pursuant to Section 13.2. 

23.2 Limitations on Assignment or Transfer of Service: 

If the Assignee requests a change in the Point(s) of Receipt or Point(s) of 

Delivery, or a change in any other specifications set forth in the original 

Service Agreement, the Transmission Provider will consent to such change 

subject to the provisions of the Tariff, provided that the change will not impair 

the operation and reliability of the Transmission Provider's generation, 

transmission, or distribution systems. The Assignee shall compensate the 

Transmission Provider for performing any System Impact Study needed to 

evaluate the capability of the Transmission System to accommodate the 
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proposed change and any additional costs resulting from such change. The 

Reseller shall remain liable for the performance of all obligations under the 

Service Agreement, except as specifically agreed to by the Transmission 

Provider and the Reseller through an amendment to the Service Agreement. 

23.3 Information on Assignment or Transfer of Service: 

In accordance with Section 4, all sales or assignments of capacity must be 

conducted through or otherwise posted on the Transmission Provider’s OASIS 

on or before the date the reassigned service commences and are subject to 

Section 23.1. Resellers may also use the Transmission Provider's OASIS to 

post transmission capacity available for resale. 

24 Metering and Power Factor Correction at Receipt and Delivery Points(s) 

24.1 Transmission Customer Obligations: 

Unless otherwise agreed, the Transmission Customer shall be responsible for 

installing and maintaining compatible metering and communications 

equipment to accurately account for the capacity and energy being transmitted 

under Part II of the Tariff and to communicate the information to the 

Transmission Provider. Such equipment shall remain the property of the 

Transmission Customer. 
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24.2 Transmission Provider Access to Metering Data: 

The Transmission Provider shall have access to metering data, which may 

reasonably be required to facilitate measurements and billing under the 

Service Agreement. 

24.3 Power Factor: 

Unless otherwise agreed, the Transmission Customer is required to maintain a 

power factor within the same range as the Transmission Provider pursuant to 

Good Utility Practices. The power factor requirements are specified in the 

Service Agreement where applicable. 

25 Compensation for Transmission Service 

 Rates for Firm and Non-Firm Point-To-Point Transmission Service are 

provided in the Schedules appended to the Tariff: Firm Point-To-Point 

Transmission Service (Schedule 7); and Non-Firm Point-To-Point Transmission 

Service (Schedule 8). The Transmission Provider shall use Part II of the Tariff to 

make its Third-Party Sales. The Transmission Provider shall account for such use 

at the applicable Tariff rates, pursuant to Section 8. 

26 Stranded Cost Recovery 

 The Transmission Provider may seek to recover stranded costs from the 

Transmission Customer pursuant to this Tariff in accordance with the terms, 

conditions and procedures set forth in FERC Order No. 888. However, the 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 95 - 

Transmission Provider must separately file any specific proposed stranded cost 

charge under Section 205 of the Federal Power Act. 

27 Compensation for New Facilities and Redispatch Costs 

 Whenever a System Impact Study performed by the Transmission Provider 

in connection with the provision of Firm Point-To-Point Transmission Service 

identifies the need for new facilities, the Transmission Customer shall be 

responsible for such costs to the extent consistent with Commission policy. 

Whenever a System Impact Study performed by the Transmission Provider 

identifies capacity constraints that may be relieved by redispatching the 

Transmission Provider's resources to eliminate such constraints, the Transmission 

Customer shall be responsible for the redispatch costs to the extent consistent with 

Commission policy. 

III. NETWORK INTEGRATION TRANSMISSION SERVICE

Preamble 

 The Transmission Provider will provide Network Integration Transmission 

Service pursuant to the applicable terms and conditions contained in the Tariff and 

Service Agreement. Network Integration Transmission Service allows the Network 

Customer to integrate, economically dispatch and regulate its current and planned 

Network Resources to serve its Network Load in a manner comparable to that in which 

the Transmission Provider utilizes its Transmission System to serve its Native Load 
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Original Sheet No. - 96 - 

Customers. Network Integration Transmission Service also may be used by the Network 

Customer to deliver economy energy purchases to its Network Load from non-designated 

resources on an as-available basis without additional charge. Transmission service for 

sales to non-designated loads will be provided pursuant to the applicable terms and 

conditions of Part II of the Tariff. 

28 Nature of Network Integration Transmission Service 

28.1 Scope of Service: 

Network Integration Transmission Service is a transmission service that 

allows Network Customers to efficiently and economically utilize their 

Network Resources (as well as other non-designated generation resources) to 

serve their Network Load located in the Transmission Provider's Control Area 

and any additional load that may be designated pursuant to Section 31.3 of the 

Tariff. The Network Customer taking Network Integration Transmission 

Service must obtain or provide Ancillary Services pursuant to Section 3. 

28.2 Transmission Provider Responsibilities: 

The Transmission Provider will plan, construct, operate and maintain its 

Transmission System in accordance with Good Utility Practice and its 

planning obligations in Attachment K in order to provide the Network 

Customer with Network Integration Transmission Service over the 

Transmission Provider's Transmission System. The Transmission Provider, 
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Original Sheet No. - 97 - 

on behalf of its Native Load Customers, shall be required to designate 

resources and loads in the same manner as any Network Customer under Part 

III of this Tariff. This information must be consistent with the information 

used by the Transmission Provider to calculate available transfer capability. 

The Transmission Provider shall include the Network Customer's Network 

Load in its Transmission System planning and shall, consistent with Good 

Utility Practice and Attachment K, endeavor to construct and place into 

service sufficient transfer capability to deliver the Network Customer's 

Network Resources to serve its Network Load on a basis comparable to the 

Transmission Provider's delivery of its own generating and purchased 

resources to its Native Load Customers. 

28.3 Network Integration Transmission Service: 

The Transmission Provider will provide firm transmission service over its 

Transmission System to the Network Customer for the delivery of capacity 

and energy from its designated Network Resources to service its Network 

Loads on a basis that is comparable to the Transmission Provider's use of the 

Transmission System to reliably serve its Native Load Customers. 

28.4 Secondary Service: 

The Network Customer may use the Transmission Provider's Transmission 

System to deliver energy to its Network Loads from resources that have not 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 98 - 

been designated as Network Resources. Such energy shall be transmitted, on 

an as-available basis, at no additional charge. Secondary service shall not 

require the filing of an Application for Network Integration Transmission 

Service under the Tariff. However, all other requirements of Part III of the 

Tariff (except for transmission rates) shall apply to secondary service. 

Deliveries from resources other than Network Resources will have a higher 

priority than any Non-Firm Point-To-Point Transmission Service under Part II 

of the Tariff. 

28.5 Real Power Losses: 

Real Power Losses are associated with all transmission service. The 

Transmission Provider is not obligated to provide Real Power Losses. The 

Network Customer is responsible for replacing losses associated with all 

transmission service as calculated by the Transmission Provider. The 

applicable Real Power Loss factors are as follows: [To be completed by the 

Transmission Provider]. 

28.6 Restrictions on Use of Service: 

The Network Customer shall not use Network Integration Transmission 

Service for (i) sales of capacity and energy to non-designated loads, or (ii) 

direct or indirect provision of transmission service by the Network Customer 

to third parties. All Network Customers taking Network Integration 
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Original Sheet No. - 99 - 

Transmission Service shall use Point-To-Point Transmission Service under 

Part II of the Tariff for any Third-Party Sale which requires use of the 

Transmission Provider's Transmission System. The Transmission Provider 

shall specify any appropriate charges and penalties and all related terms and 

conditions applicable in the event that a Network Customer uses Network 

Integration Transmission Service or secondary service pursuant to Section 

28.4 to facilitate a wholesale sale that does not serve a Network Load. 

29 Initiating Service 

29.1 Condition Precedent for Receiving Service: 

Subject to the terms and conditions of Part III of the Tariff, the Transmission 

Provider will provide Network Integration Transmission Service to any 

Eligible Customer, provided that (i) the Eligible Customer completes an 

Application for service as provided under Part III of the Tariff, (ii) the Eligible 

Customer and the Transmission Provider complete the technical arrangements 

set forth in Sections 29.3 and 29.4, (iii) the Eligible Customer executes a 

Service Agreement pursuant to Attachment F for service under Part III of the 

Tariff or requests in writing that the Transmission Provider file a proposed 

unexecuted Service Agreement with the Commission, and (iv) the Eligible 

Customer executes a Network Operating Agreement with the Transmission 

Provider pursuant to Attachment G, or requests in writing that the 
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Original Sheet No. - 100 - 

Transmission Provider file a proposed unexecuted Network Operating 

Agreement. 

29.2 Application Procedures: 

An Eligible Customer requesting service under Part III of the Tariff must 

submit an Application, with a deposit approximating the charge for one month 

of service, to the Transmission Provider as far as possible in advance of the 

month in which service is to commence. Unless subject to the procedures in 

Section 2, Completed Applications for Network Integration Transmission 

Service will be assigned a priority according to the date and time the 

Application is received, with the earliest Application receiving the highest 

priority. Applications should be submitted by entering the information listed 

below on the Transmission Provider's OASIS. Prior to implementation of the 

Transmission Provider's OASIS, a Completed Application may be submitted 

by (i) transmitting the required information to the Transmission Provider by 

telefax, or (ii) providing the information by telephone over the Transmission 

Provider's time recorded telephone line. Each of these methods will provide a 

time-stamped record for establishing the service priority of the Application. A 

Completed Application shall provide all of the information included in 18 

CFR § 2.20 including but not limited to the following: 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 101 - 

(i) The identity, address, telephone number and facsimile number of 

the party requesting service; 

(ii) A statement that the party requesting service is, or will be upon 

commencement of service, an Eligible Customer under the Tariff; 

(iii) A description of the Network Load at each delivery point. This 

description should separately identify and provide the Eligible 

Customer's best estimate of the total loads to be served at each 

transmission voltage level, and the loads to be served from each 

Transmission Provider substation at the same transmission 

voltage level. The description should include a ten (10) year 

forecast of summer and winter load and resource requirements 

beginning with the first year after the service is scheduled to 

commence; 

(iv) The amount and location of any interruptible loads included in the 

Network Load. This shall include the summer and winter 

capacity requirements for each interruptible load (had such load 

not been interruptible), that portion of the load subject to 

interruption, the conditions under which an interruption can be 

implemented and any limitations on the amount and frequency of 

interruptions. An Eligible Customer should identify the amount 
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Original Sheet No. - 102 - 

of interruptible customer load (if any) included in the 10 year load 

forecast provided in response to (iii) above; 

(v) A description of Network Resources (current and 10-year 

projection). For each on-system Network Resource, such 

description shall include: 

• Unit size and amount of capacity from that unit to be 

designated as Network Resource 

• VAR capability (both leading and lagging) of all generators 

• Operating restrictions 

− Any periods of restricted operations throughout the year 

− Maintenance schedules 

− Minimum loading level of unit 

− Normal operating level of unit 

− Any must-run unit designations required for system 

reliability or contract reasons 

• Approximate variable generating cost ($/MWH) for 

redispatch computations 

• Arrangements governing sale and delivery of power to third 

parties from generating facilities located in the Transmission 
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Original Sheet No. - 103 - 

Provider Control Area, where only a portion of unit output is 

designated as a Network Resource; 

For each off-system Network Resource, such description shall 

include: 

• Identification of the Network Resource as an off-system 

resource 

• Amount of power to which the customer has rights 

• Identification of the control area from which the power will 

originate 

• Delivery point(s) to the Transmission Provider’s 

Transmission System 

• Transmission arrangements on the external transmission 

system(s) 

• Operating restrictions, if any 

− Any periods of restricted operations throughout the year 

− Maintenance schedules 

− Minimum loading level of unit 

− Normal operating level of unit 

− Any must-run unit designations required for system 

reliability or contract reasons 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 104 - 

• Approximate variable generating cost ($/MWH) for 

redispatch computations; 

(vi) Description of Eligible Customer's transmission system: 

• Load flow and stability data, such as real and reactive parts of 

the load, lines, transformers, reactive devices and load type, 

including normal and emergency ratings of all transmission 

equipment in a load flow format compatible with that used by 

the Transmission Provider 

• Operating restrictions needed for reliability 

• Operating guides employed by system operators 

• Contractual restrictions or committed uses of the Eligible 

Customer's transmission system, other than the Eligible 

Customer's Network Loads and Resources 

• Location of Network Resources described in subsection (v) 

above 

• 10 year projection of system expansions or upgrades 

• Transmission System maps that include any proposed 

expansions or upgrades 

• Thermal ratings of Eligible Customer's Control Area ties with 

other Control Areas; 
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Original Sheet No. - 105 - 

(vii) Service Commencement Date and the term of the requested 

Network Integration Transmission Service. The minimum term 

for Network Integration Transmission Service is one year; 

(viii) A statement signed by an authorized officer from or agent of the 

Network Customer attesting that all of the network resources 

listed pursuant to Section 29.2(v) satisfy the following conditions: 

(1) the Network Customer owns the resource, has committed to 

purchase generation pursuant to an executed contract, or has 

committed to purchase generation where execution of a contract is 

contingent upon the availability of transmission service under Part 

III of the Tariff; and (2) the Network Resources do not include 

any resources, or any portion thereof, that are committed for sale 

to non-designated third party load or otherwise cannot be called 

upon to meet the Network Customer's Network Load on a noninterruptible basis, except for purposes of fulfilling obligations 

under a reserve sharing program; and 

(ix) Any additional information required of the Transmission 

Customer as specified in the Transmission Provider’s planning 

process established in Attachment K. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 106 - 

Unless the Parties agree to a different time frame, the Transmission Provider 

must acknowledge the request within ten (10) days of receipt. The 

acknowledgement must include a date by which a response, including a 

Service Agreement, will be sent to the Eligible Customer. If an Application 

fails to meet the requirements of this section, the Transmission Provider shall 

notify the Eligible Customer requesting service within fifteen (15) days of 

receipt and specify the reasons for such failure. Wherever possible, the 

Transmission Provider will attempt to remedy deficiencies in the Application 

through informal communications with the Eligible Customer. If such efforts 

are unsuccessful, the Transmission Provider shall return the Application 

without prejudice to the Eligible Customer filing a new or revised Application 

that fully complies with the requirements of this section. The Eligible 

Customer will be assigned a new priority consistent with the date of the new 

or revised Application. The Transmission Provider shall treat this information 

consistent with the standards of conduct contained in Part 37 of the 

Commission's regulations. 

29.3 Technical Arrangements to be Completed Prior to Commencement 

of Service: 

Network Integration Transmission Service shall not commence until the 

Transmission Provider and the Network Customer, or a third party, have 
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Original Sheet No. - 107 - 

completed installation of all equipment specified under the Network Operating 

Agreement consistent with Good Utility Practice and any additional 

requirements reasonably and consistently imposed to ensure the reliable 

operation of the Transmission System. The Transmission Provider shall 

exercise reasonable efforts, in coordination with the Network Customer, to 

complete such arrangements as soon as practicable taking into consideration 

the Service Commencement Date. 

29.4 Network Customer Facilities: 

The provision of Network Integration Transmission Service shall be 

conditioned upon the Network Customer's constructing, maintaining and 

operating the facilities on its side of each delivery point or interconnection 

necessary to reliably deliver capacity and energy from the Transmission 

Provider's Transmission System to the Network Customer. The Network 

Customer shall be solely responsible for constructing or installing all facilities 

on the Network Customer's side of each such delivery point or 

interconnection. 

29.5 Filing of Service Agreement: 

The Transmission Provider will file Service Agreements with the Commission 

in compliance with applicable Commission regulations. 
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Original Sheet No. - 108 - 

30 Network Resources 

30.1 Designation of Network Resources: 

Network Resources shall include all generation owned, purchased or leased by 

the Network Customer designated to serve Network Load under the Tariff. 

Network Resources may not include resources, or any portion thereof, that are 

committed for sale to non-designated third party load or otherwise cannot be 

called upon to meet the Network Customer's Network Load on a noninterruptible basis, except for purposes of fulfilling obligations under a reserve 

sharing program. Any owned or purchased resources that were serving the 

Network Customer's loads under firm agreements entered into on or before the 

Service Commencement Date shall initially be designated as Network 

Resources until the Network Customer terminates the designation of such 

resources. 

30.2 Designation of New Network Resources: 

The Network Customer may designate a new Network Resource by providing 

the Transmission Provider with as much advance notice as practicable. A 

designation of a new Network Resource must be made through the 

Transmission Provider’s OASIS by a request for modification of service 

pursuant to an Application under Section 29. This request must include a 
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Original Sheet No. - 109 - 

statement that the new network resource satisfies the following conditions: (1) 

the Network Customer owns the resource, has committed to purchase 

generation pursuant to an executed contract, or has committed to purchase 

generation where execution of a contract is contingent upon the availability of 

transmission service under Part III of the Tariff; and (2) The Network 

Resources do not include any resources, or any portion thereof, that are 

committed for sale to non-designated third party load or otherwise cannot be 

called upon to meet the Network Customer's Network Load on a noninterruptible basis, except for purposes of fulfilling obligations under a reserve 

sharing program. The Network Customer’s request will be deemed deficient 

if it does not include this statement and the Transmission Provider will follow 

the procedures for a deficient application as described in Section 29.2 of the 

Tariff. 

30.3 Termination of Network Resources: 

The Network Customer may terminate the designation of all or part of a 

generating resource as a Network Resource by providing notification to the 

Transmission Provider through OASIS as soon as reasonably practicable, but 

not later than the firm scheduling deadline for the period of termination. Any 

request for termination of Network Resource status must be submitted on 

OASIS, and should indicate whether the request is for indefinite or temporary 
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Original Sheet No. - 110 - 

termination. A request for indefinite termination of Network Resource status 

must indicate the date and time that the termination is to be effective, and the 

identification and capacity of the resource(s) or portions thereof to be 

indefinitely terminated. A request for temporary termination of Network 

Resource status must include the following: 

(i) Effective date and time of temporary termination; 

(ii) Effective date and time of redesignation, following period of 

temporary termination; 

(iii) Identification and capacity of resource(s) or portions thereof to be 

temporarily terminated; 

(iv) Resource description and attestation for redesignating the network 

resource following the temporary termination, in accordance with 

Section 30.2; and 

(v) Identification of any related transmission service requests to be 

evaluated concomitantly with the request for temporary 

termination, such that the requests for undesignation and the 

request for these related transmission service requests must be 

approved or denied as a single request. The evaluation of these 

related transmission service requests must take into account the 

termination of the network resources identified in (iii) above, as 
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Original Sheet No. - 111 - 

well as all competing transmission service requests of higher 

priority. 

As part of a temporary termination, a Network Customer may only redesignate 

the same resource that was originally designated, or a portion thereof. 

Requests to redesignate a different resource and/or a resource with increased 

capacity will be deemed deficient and the Transmission Provider will follow 

the procedures for a deficient application as described in Section 29.2 of the 

Tariff. 

30.4 Operation of Network Resources: 

The Network Customer shall not operate its designated Network Resources 

located in the Network Customer's or Transmission Provider's Control Area 

such that the output of those facilities exceeds its designated Network Load, 

plus Non-Firm Sales delivered pursuant to Part II of the Tariff, plus losses, 

plus power sales under a reserve sharing program, plus sales that permit 

curtailment without penalty to serve its designated Network Load. This 

limitation shall not apply to changes in the operation of a Transmission 

Customer's Network Resources at the request of the Transmission Provider to 

respond to an emergency or other unforeseen condition which may impair or 

degrade the reliability of the Transmission System. For all Network 

Resources not physically connected with the Transmission Provider’s 
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Original Sheet No. - 112 - 

Transmission System, the Network Customer may not schedule delivery of 

energy in excess of the Network Resource’s capacity, as specified in the 

Network Customer’s Application pursuant to Section 29, unless the Network 

Customer supports such delivery within the Transmission Provider’s 

Transmission System by either obtaining Point-to-Point Transmission Service 

or utilizing secondary service pursuant to Section 28.4. The Transmission 

Provider shall specify the rate treatment and all related terms and conditions 

applicable in the event that a Network Customer’s schedule at the delivery 

point for a Network Resource not physically interconnected with the 

Transmission Provider's Transmission System exceeds the Network 

Resource’s designated capacity, excluding energy delivered using secondary 

service or Point-to-Point Transmission Service. 

30.5 Network Customer Redispatch Obligation: 

As a condition to receiving Network Integration Transmission Service, the 

Network Customer agrees to redispatch its Network Resources as requested by 

the Transmission Provider pursuant to Section 33.2. To the extent practical, 

the redispatch of resources pursuant to this section shall be on a least cost, 

non-discriminatory basis between all Network Customers, and the 

Transmission Provider. 
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Original Sheet No. - 113 - 

30.6 Transmission Arrangements for Network Resources Not Physically 

Interconnected With The Transmission Provider: 

The Network Customer shall be responsible for any arrangements necessary to 

deliver capacity and energy from a Network Resource not physically 

interconnected with the Transmission Provider's Transmission System. The 

Transmission Provider will undertake reasonable efforts to assist the Network 

Customer in obtaining such arrangements, including without limitation, 

providing any information or data required by such other entity pursuant to 

Good Utility Practice. 

30.7 Limitation on Designation of Network Resources: 

The Network Customer must demonstrate that it owns or has committed to 

purchase generation pursuant to an executed contract in order to designate a 

generating resource as a Network Resource. Alternatively, the Network 

Customer may establish that execution of a contract is contingent upon the 

availability of transmission service under Part III of the Tariff. 

30.8 Use of Interface Capacity by the Network Customer: 

There is no limitation upon a Network Customer's use of the Transmission 

Provider's Transmission System at any particular interface to integrate the 

Network Customer's Network Resources (or substitute economy purchases) 

with its Network Loads. However, a Network Customer's use of the 
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Original Sheet No. - 114 - 

Transmission Provider's total interface capacity with other transmission 

systems may not exceed the Network Customer's Load. 

30.9 Network Customer Owned Transmission Facilities: 

The Network Customer that owns existing transmission facilities that are 

integrated with the Transmission Provider's Transmission System may be 

eligible to receive consideration either through a billing credit or some other 

mechanism. In order to receive such consideration the Network Customer 

must demonstrate that its transmission facilities are integrated into the plans or 

operations of the Transmission Provider, to serve its power and transmission 

customers. For facilities added by the Network Customer subsequent to the 

[the effective date of a Final Rule in RM05-25-000], the Network Customer 

shall receive credit for such transmission facilities added if such facilities are 

integrated into the operations of the Transmission Provider’s facilities; 

provided however, the Network Customer’s transmission facilities shall be 

presumed to be integrated if such transmission facilities, if owned by the 

Transmission Provider, would be eligible for inclusion in the Transmission 

Provider’s annual transmission revenue requirement as specified in 

Attachment H. Calculation of any credit under this subsection shall be 

addressed in either the Network Customer's Service Agreement or any other 

agreement between the Parties. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 115 - 

31 Designation of Network Load 

31.1 Network Load: 

The Network Customer must designate the individual Network Loads on 

whose behalf the Transmission Provider will provide Network Integration 

Transmission Service. The Network Loads shall be specified in the Service 

Agreement. 

31.2 New Network Loads Connected With the Transmission Provider: 

The Network Customer shall provide the Transmission Provider with as much 

advance notice as reasonably practicable of the designation of new Network 

Load that will be added to its Transmission System. A designation of new 

Network Load must be made through a modification of service pursuant to a 

new Application. The Transmission Provider will use due diligence to install 

any transmission facilities required to interconnect a new Network Load 

designated by the Network Customer. The costs of new facilities required to 

interconnect a new Network Load shall be determined in accordance with the 

procedures provided in Section 32.4 and shall be charged to the Network 

Customer in accordance with Commission policies. 

31.3 Network Load Not Physically Interconnected with the Transmission 

Provider: 

This section applies to both initial designation pursuant to Section 31.1 and 

the subsequent addition of new Network Load not physically interconnected 
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Original Sheet No. - 116 - 

with the Transmission Provider. To the extent that the Network Customer 

desires to obtain transmission service for a load outside the Transmission 

Provider's Transmission System, the Network Customer shall have the option 

of (1) electing to include the entire load as Network Load for all purposes 

under Part III of the Tariff and designating Network Resources in connection 

with such additional Network Load, or (2) excluding that entire load from its 

Network Load and purchasing Point-To-Point Transmission Service under 

Part II of the Tariff. To the extent that the Network Customer gives notice of 

its intent to add a new Network Load as part of its Network Load pursuant to 

this section the request must be made through a modification of service 

pursuant to a new Application. 

31.4 New Interconnection Points: 

To the extent the Network Customer desires to add a new Delivery Point or 

interconnection point between the Transmission Provider's Transmission 

System and a Network Load, the Network Customer shall provide the 

Transmission Provider with as much advance notice as reasonably practicable. 

31.5 Changes in Service Requests: 

Under no circumstances shall the Network Customer's decision to cancel or 

delay a requested change in Network Integration Transmission Service (e.g.

the addition of a new Network Resource or designation of a new Network 
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Original Sheet No. - 117 - 

Load) in any way relieve the Network Customer of its obligation to pay the 

costs of transmission facilities constructed by the Transmission Provider and 

charged to the Network Customer as reflected in the Service Agreement. 

However, the Transmission Provider must treat any requested change in 

Network Integration Transmission Service in a non-discriminatory manner. 

31.6 Annual Load and Resource Information Updates: 

The Network Customer shall provide the Transmission Provider with annual 

updates of Network Load and Network Resource forecasts consistent with 

those included in its Application for Network Integration Transmission 

Service under Part III of the Tariff including, but not limited to, any 

information provided under section 29.2(ix) pursuant to the Transmission 

Provider’s planning process in Attachment K. The Network Customer also 

shall provide the Transmission Provider with timely written notice of material 

changes in any other information provided in its Application relating to the 

Network Customer's Network Load, Network Resources, its transmission 

system or other aspects of its facilities or operations affecting the 

Transmission Provider's ability to provide reliable service. 
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Original Sheet No. - 118 - 

32 Additional Study Procedures For Network Integration Transmission 

Service Requests 

32.1 Notice of Need for System Impact Study: 

After receiving a request for service, the Transmission Provider shall 

determine on a non-discriminatory basis whether a System Impact Study is 

needed. A description of the Transmission Provider's methodology for 

completing a System Impact Study is provided in Attachment D. If the 

Transmission Provider determines that a System Impact Study is necessary to 

accommodate the requested service, it shall so inform the Eligible Customer, 

as soon as practicable. In such cases, the Transmission Provider shall within 

thirty (30) days of receipt of a Completed Application, tender a System Impact 

Study Agreement pursuant to which the Eligible Customer shall agree to 

reimburse the Transmission Provider for performing the required System 

Impact Study. For a service request to remain a Completed Application, the 

Eligible Customer shall execute the System Impact Study Agreement and 

return it to the Transmission Provider within fifteen (15) days. If the Eligible 

Customer elects not to execute the System Impact Study Agreement, its 

Application shall be deemed withdrawn and its deposit shall be returned with 

interest. 
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Original Sheet No. - 119 - 

32.2 System Impact Study Agreement and Cost Reimbursement: 

(i) The System Impact Study Agreement will clearly specify the 

Transmission Provider's estimate of the actual cost, and time for 

completion of the System Impact Study. The charge shall not 

exceed the actual cost of the study. In performing the System 

Impact Study, the Transmission Provider shall rely, to the extent 

reasonably practicable, on existing transmission planning studies. 

The Eligible Customer will not be assessed a charge for such 

existing studies; however, the Eligible Customer will be 

responsible for charges associated with any modifications to 

existing planning studies that are reasonably necessary to evaluate 

the impact of the Eligible Customer's request for service on the 

Transmission System. 

(ii) If in response to multiple Eligible Customers requesting service in 

relation to the same competitive solicitation, a single System 

Impact Study is sufficient for the Transmission Provider to 

accommodate the service requests, the costs of that study shall be 

pro-rated among the Eligible Customers. 

(iii) For System Impact Studies that the Transmission Provider 

conducts on its own behalf, the Transmission Provider shall 
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Original Sheet No. - 120 - 

record the cost of the System Impact Studies pursuant to Section 

8. 

32.3 System Impact Study Procedures: 

Upon receipt of an executed System Impact Study Agreement, the 

Transmission Provider will use due diligence to complete the required System 

Impact Study within a sixty (60) day period. The System Impact Study shall 

identify (1) any system constraints, identified with specificity by transmission 

element or flowgate, (2) redispatch options (when requested by an Eligible 

Customer) including, to the extent possible, an estimate of the cost of 

redispatch, (3) available options for installation of automatic devices to curtail 

service (when requested by an Eligible Customer), and (4) additional Direct 

Assignment Facilities or Network Upgrades required to provide the requested 

service. For customers requesting the study of redispatch options, the System 

Impact Study shall (1) identify all resources located within the Transmission 

Provider’s Control Area that can significantly contribute toward relieving the 

system constraint and (2) provide a measurement of each resource’s impact on 

the system constraint. If the Transmission Provider possesses information 

indicating that any resource outside its Control Area could relieve the 

constraint, it shall identify each such resource in the System Impact Study. In 

the event that the Transmission Provider is unable to complete the required 
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Original Sheet No. - 121 - 

System Impact Study within such time period, it shall so notify the Eligible 

Customer and provide an estimated completion date along with an explanation 

of the reasons why additional time is required to complete the required 

studies. A copy of the completed System Impact Study and related work 

papers shall be made available to the Eligible Customer as soon as the System 

Impact Study is complete. The Transmission Provider will use the same due 

diligence in completing the System Impact Study for an Eligible Customer as 

it uses when completing studies for itself. The Transmission Provider shall 

notify the Eligible Customer immediately upon completion of the System 

Impact Study if the Transmission System will be adequate to accommodate all 

or part of a request for service or that no costs are likely to be incurred for new 

transmission facilities or upgrades. In order for a request to remain a 

Completed Application, within fifteen (15) days of completion of the System 

Impact Study the Eligible Customer must execute a Service Agreement or 

request the filing of an unexecuted Service Agreement, or the Application 

shall be deemed terminated and withdrawn. 

32.4 Facilities Study Procedures: 

If a System Impact Study indicates that additions or upgrades to the 

Transmission System are needed to supply the Eligible Customer's service 

request, the Transmission Provider, within thirty (30) days of the completion 
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Original Sheet No. - 122 - 

of the System Impact Study, shall tender to the Eligible Customer a Facilities 

Study Agreement pursuant to which the Eligible Customer shall agree to 

reimburse the Transmission Provider for performing the required Facilities 

Study. For a service request to remain a Completed Application, the Eligible 

Customer shall execute the Facilities Study Agreement and return it to the 

Transmission Provider within fifteen (15) days. If the Eligible Customer 

elects not to execute the Facilities Study Agreement, its Application shall be 

deemed withdrawn and its deposit shall be returned with interest. Upon 

receipt of an executed Facilities Study Agreement, the Transmission Provider 

will use due diligence to complete the required Facilities Study within a sixty 

(60) day period. If the Transmission Provider is unable to complete the 

Facilities Study in the allotted time period, the Transmission Provider shall 

notify the Eligible Customer and provide an estimate of the time needed to 

reach a final determination along with an explanation of the reasons that 

additional time is required to complete the study. When completed, the 

Facilities Study will include a good faith estimate of (i) the cost of Direct 

Assignment Facilities to be charged to the Eligible Customer, (ii) the Eligible 

Customer's appropriate share of the cost of any required Network Upgrades, 

and (iii) the time required to complete such construction and initiate the 

requested service. The Eligible Customer shall provide the Transmission 
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Original Sheet No. - 123 - 

Provider with a letter of credit or other reasonable form of security acceptable 

to the Transmission Provider equivalent to the costs of new facilities or 

upgrades consistent with commercial practices as established by the Uniform 

Commercial Code. The Eligible Customer shall have thirty (30) days to 

execute a Service Agreement or request the filing of an unexecuted Service 

Agreement and provide the required letter of credit or other form of security 

or the request no longer will be a Completed Application and shall be deemed 

terminated and withdrawn. 

32.5 Penalties for Failure to Meet Study Deadlines: 

Section 19.9 defines penalties that apply for failure to meet the 60-day study 

completion due diligence deadlines for System Impact Studies and Facilities 

Studies under Part II of the Tariff. These same requirements and penalties 

apply to service under Part III of the Tariff. 

33 Load Shedding and Curtailments 

33.1 Procedures: 

Prior to the Service Commencement Date, the Transmission Provider and the 

Network Customer shall establish Load Shedding and Curtailment procedures 

pursuant to the Network Operating Agreement with the objective of 

responding to contingencies on the Transmission System and on systems 

directly and indirectly interconnected with Transmission Provider’s 
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Original Sheet No. - 124 - 

Transmission System. The Parties will implement such programs during any 

period when the Transmission Provider determines that a system contingency 

exists and such procedures are necessary to alleviate such contingency. The 

Transmission Provider will notify all affected Network Customers in a timely 

manner of any scheduled Curtailment. 

33.2 Transmission Constraints: 

During any period when the Transmission Provider determines that a 

transmission constraint exists on the Transmission System, and such constraint 

may impair the reliability of the Transmission Provider's system, the 

Transmission Provider will take whatever actions, consistent with Good 

Utility Practice, that are reasonably necessary to maintain the reliability of the 

Transmission Provider's system. To the extent the Transmission Provider 

determines that the reliability of the Transmission System can be maintained 

by redispatching resources, the Transmission Provider will initiate procedures 

pursuant to the Network Operating Agreement to redispatch all Network 

Resources and the Transmission Provider's own resources on a least-cost basis 

without regard to the ownership of such resources. Any redispatch under this 

section may not unduly discriminate between the Transmission Provider's use 

of the Transmission System on behalf of its Native Load Customers and any 
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Original Sheet No. - 125 - 

Network Customer's use of the Transmission System to serve its designated 

Network Load. 

33.3 Cost Responsibility for Relieving Transmission Constraints: 

Whenever the Transmission Provider implements least-cost redispatch 

procedures in response to a transmission constraint, the Transmission Provider 

and Network Customers will each bear a proportionate share of the total 

redispatch cost based on their respective Load Ratio Shares. 

33.4 Curtailments of Scheduled Deliveries: 

If a transmission constraint on the Transmission Provider's Transmission 

System cannot be relieved through the implementation of least-cost redispatch 

procedures and the Transmission Provider determines that it is necessary to 

Curtail scheduled deliveries, the Parties shall Curtail such schedules in 

accordance with the Network Operating Agreement or pursuant to the 

Transmission Loading Relief procedures specified in Attachment J. 

33.5 Allocation of Curtailments: 

The Transmission Provider shall, on a non-discriminatory basis, Curtail the 

transaction(s) that effectively relieve the constraint. However, to the extent 

practicable and consistent with Good Utility Practice, any Curtailment will be 

shared by the Transmission Provider and Network Customer in proportion to 

their respective Load Ratio Shares. The Transmission Provider shall not 
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Original Sheet No. - 126 - 

direct the Network Customer to Curtail schedules to an extent greater than the 

Transmission Provider would Curtail the Transmission Provider's schedules 

under similar circumstances. 

33.6 Load Shedding: 

To the extent that a system contingency exists on the Transmission Provider's 

Transmission System and the Transmission Provider determines that it is 

necessary for the Transmission Provider and the Network Customer to shed 

load, the Parties shall shed load in accordance with previously established 

procedures under the Network Operating Agreement. 

33.7 System Reliability: 

Notwithstanding any other provisions of this Tariff, the Transmission Provider 

reserves the right, consistent with Good Utility Practice and on a not unduly 

discriminatory basis, to Curtail Network Integration Transmission Service 

without liability on the Transmission Provider's part for the purpose of making 

necessary adjustments to, changes in, or repairs on its lines, substations and 

facilities, and in cases where the continuance of Network Integration 

Transmission Service would endanger persons or property. In the event of 

any adverse condition(s) or disturbance(s) on the Transmission Provider's 

Transmission System or on any other system(s) directly or indirectly 

interconnected with the Transmission Provider's Transmission System, the 
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Original Sheet No. - 127 - 

Transmission Provider, consistent with Good Utility Practice, also may Curtail 

Network Integration Transmission Service in order to (i) limit the extent or 

damage of the adverse condition(s) or disturbance(s), (ii) prevent damage to 

generating or transmission facilities, or (iii) expedite restoration of service. 

The Transmission Provider will give the Network Customer as much advance 

notice as is practicable in the event of such Curtailment. Any Curtailment of 

Network Integration Transmission Service will be not unduly discriminatory 

relative to the Transmission Provider's use of the Transmission System on 

behalf of its Native Load Customers. The Transmission Provider shall specify 

the rate treatment and all related terms and conditions applicable in the event 

that the Network Customer fails to respond to established Load Shedding and 

Curtailment procedures. 

34 Rates and Charges 

 The Network Customer shall pay the Transmission Provider for any Direct 

Assignment Facilities, Ancillary Services, and applicable study costs, consistent 

with Commission policy, along with the following: 

34.1 Monthly Demand Charge: 

The Network Customer shall pay a monthly Demand Charge, which shall be 

determined by multiplying its Load Ratio Share times one twelfth (1/12) of the 
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Original Sheet No. - 128 - 

Transmission Provider's Annual Transmission Revenue Requirement specified 

in Schedule H. 

34.2 Determination of Network Customer's Monthly Network Load: 

The Network Customer's monthly Network Load is its hourly load (including 

its designated Network Load not physically interconnected with the 

Transmission Provider under Section 31.3) coincident with the Transmission 

Provider's Monthly Transmission System Peak. 

34.3 Determination of Transmission Provider's Monthly Transmission 

System Load: 

The Transmission Provider's monthly Transmission System load is the 

Transmission Provider's Monthly Transmission System Peak minus the 

coincident peak usage of all Firm Point-To-Point Transmission Service 

customers pursuant to Part II of this Tariff plus the Reserved Capacity of all 

Firm Point-To-Point Transmission Service customers. 

34.4 Redispatch Charge: 

The Network Customer shall pay a Load Ratio Share of any redispatch costs 

allocated between the Network Customer and the Transmission Provider 

pursuant to Section 33. To the extent that the Transmission Provider incurs an 

obligation to the Network Customer for redispatch costs in accordance with 
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Original Sheet No. - 129 - 

Section 33, such amounts shall be credited against the Network Customer's 

bill for the applicable month. 

34.5 Stranded Cost Recovery: 

The Transmission Provider may seek to recover stranded costs from the 

Network Customer pursuant to this Tariff in accordance with the terms, 

conditions and procedures set forth in FERC Order No. 888. However, the 

Transmission Provider must separately file any proposal to recover stranded 

costs under Section 205 of the Federal Power Act. 

35 Operating Arrangements 

35.1 Operation under The Network Operating Agreement: 

The Network Customer shall plan, construct, operate and maintain its facilities 

in accordance with Good Utility Practice and in conformance with the 

Network Operating Agreement. 

35.2 Network Operating Agreement: 

The terms and conditions under which the Network Customer shall operate its 

facilities and the technical and operational matters associated with the 

implementation of Part III of the Tariff shall be specified in the Network 

Operating Agreement. The Network Operating Agreement shall provide for 

the Parties to (i) operate and maintain equipment necessary for integrating the 

Network Customer within the Transmission Provider's Transmission System 
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Original Sheet No. - 130 - 

(including, but not limited to, remote terminal units, metering, 

communications equipment and relaying equipment), (ii) transfer data 

between the Transmission Provider and the Network Customer (including, but 

not limited to, heat rates and operational characteristics of Network Resources, 

generation schedules for units outside the Transmission Provider's 

Transmission System, interchange schedules, unit outputs for redispatch 

required under Section 33, voltage schedules, loss factors and other real time 

data), (iii) use software programs required for data links and constraint 

dispatching, (iv) exchange data on forecasted loads and resources necessary 

for long-term planning, and (v) address any other technical and operational 

considerations required for implementation of Part III of the Tariff, including 

scheduling protocols. The Network Operating Agreement will recognize that 

the Network Customer shall either (i) operate as a Control Area under 

applicable guidelines of the Electric Reliability Organization (ERO) as 

defined in 18 CFR 39.1, (ii) satisfy its Control Area requirements, including 

all necessary Ancillary Services, by contracting with the Transmission 

Provider, or (iii) satisfy its Control Area requirements, including all necessary 

Ancillary Services, by contracting with another entity, consistent with Good 

Utility Practice, which satisfies the applicable reliability guidelines of the 

ERO. The Transmission Provider shall not unreasonably refuse to accept 
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Original Sheet No. - 131 - 

contractual arrangements with another entity for Ancillary Services. The 

Network Operating Agreement is included in Attachment G. 

35.3 Network Operating Committee: 

A Network Operating Committee (Committee) shall be established to 

coordinate operating criteria for the Parties' respective responsibilities under 

the Network Operating Agreement. Each Network Customer shall be entitled 

to have at least one representative on the Committee. The Committee shall 

meet from time to time as need requires, but no less than once each calendar 

year. 
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Original Sheet No. - 132 - 

SCHEDULE 1

Scheduling, System Control and Dispatch Service 

 This service is required to schedule the movement of power through, out of, 

within, or into a Control Area. This service can be provided only by the operator of the 

Control Area in which the transmission facilities used for transmission service are 

located. Scheduling, System Control and Dispatch Service is to be provided directly by 

the Transmission Provider (if the Transmission Provider is the Control Area operator) or 

indirectly by the Transmission Provider making arrangements with the Control Area 

operator that performs this service for the Transmission Provider's Transmission System. 

The Transmission Customer must purchase this service from the Transmission Provider 

or the Control Area operator. The charges for Scheduling, System Control and Dispatch 

Service are to be based on the rates set forth below. To the extent the Control Area 

operator performs this service for the Transmission Provider, charges to the Transmission 

Customer are to reflect only a pass-through of the costs charged to the Transmission 

Provider by that Control Area operator. 
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Original Sheet No. - 133 - 

SCHEDULE 2 

Reactive Supply and Voltage Control from 

Generation or Other Sources Service 

 In order to maintain transmission voltages on the Transmission Provider's 

transmission facilities within acceptable limits, generation facilities and non-generation 

resources capable of providing this service that are under the control of the control area 

operator are operated to produce (or absorb) reactive power. Thus, Reactive Supply and 

Voltage Control from Generation or Other Sources Service must be provided for each 

transaction on the Transmission Provider's transmission facilities. The amount of 

Reactive Supply and Voltage Control from Generation or Other Sources Service that 

must be supplied with respect to the Transmission Customer's transaction will be 

determined based on the reactive power support necessary to maintain transmission 

voltages within limits that are generally accepted in the region and consistently adhered 

to by the Transmission Provider. 

 

 Reactive Supply and Voltage Control from Generation or Other Sources Service is 

to be provided directly by the Transmission Provider (if the Transmission Provider is the 

Control Area operator) or indirectly by the Transmission Provider making arrangements 

with the Control Area operator that performs this service for the Transmission Provider's 

Transmission System. The Transmission Customer must purchase this service from the 

Transmission Provider or the Control Area operator. The charges for such service will be 
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Original Sheet No. - 134 - 

based on the rates set forth below. To the extent the Control Area operator performs this 

service for the Transmission Provider, charges to the Transmission Customer are to 

reflect only a pass-through of the costs charged to the Transmission Provider by the 

Control Area operator. 
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Original Sheet No. - 135 - 

SCHEDULE 3 

Regulation and Frequency Response Service 

 Regulation and Frequency Response Service is necessary to provide for the 

continuous balancing of resources (generation and interchange) with load and for 

maintaining scheduled Interconnection frequency at sixty cycles per second (60 Hz). 

Regulation and Frequency Response Service is accomplished by committing on-line 

generation whose output is raised or lowered (predominantly through the use of 

automatic generating control equipment) and by other non-generation resources capable 

of providing this service as necessary to follow the moment-by-moment changes in load. 

The obligation to maintain this balance between resources and load lies with the 

Transmission Provider (or the Control Area operator that performs this function for the 

Transmission Provider). The Transmission Provider must offer this service when the 

transmission service is used to serve load within its Control Area. The Transmission 

Customer must either purchase this service from the Transmission Provider or make 

alternative comparable arrangements to satisfy its Regulation and Frequency Response 

Service obligation. The amount of and charges for Regulation and Frequency Response 

Service are set forth below. To the extent the Control Area operator performs this service 

for the Transmission Provider, charges to the Transmission Customer are to reflect only a 

pass-through of the costs charged to the Transmission Provider by that Control Area 

operator. 
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Original Sheet No. - 136 - 

SCHEDULE 4 

Energy Imbalance Service 

 Energy Imbalance Service is provided when a difference occurs between the 

scheduled and the actual delivery of energy to a load located within a Control Area over a 

single hour. The Transmission Provider must offer this service when the transmission 

service is used to serve load within its Control Area. The Transmission Customer must 

either purchase this service from the Transmission Provider or make alternative 

comparable arrangements, which may include use of non-generation resources capable of 

providing this service, to satisfy its Energy Imbalance Service obligation. To the extent 

the Control Area operator performs this service for the Transmission Provider, charges to 

the Transmission Customer are to reflect only a pass-through of the costs charged to the 

Transmission Provider by that Control Area operator. The Transmission Provider may 

charge a Transmission Customer a penalty for either hourly energy imbalances under this 

Schedule or a penalty for hourly generator imbalances under Schedule 9 for imbalances 

occurring during the same hour, but not both unless the imbalances aggravate rather than 

offset each other. 

 The Transmission Provider shall establish charges for energy imbalance based on 

the deviation bands as follows: (i) deviations within +/- 1.5 percent (with a minimum of 

2 MW) of the scheduled transaction to be applied hourly to any energy imbalance that 

occurs as a result of the Transmission Customer's scheduled transaction(s) will be netted 
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Original Sheet No. - 137 - 

on a monthly basis and settled financially, at the end of the month, at 100 percent of 

incremental or decremental cost; (ii) deviations greater than +/- 1.5 percent up to 7.5 

percent (or greater than 2 MW up to 10 MW) of the scheduled transaction to be applied 

hourly to any energy imbalance that occurs as a result of the Transmission Customer’s 

scheduled transaction(s) will be settled financially, at the end of each month, at 110 

percent of incremental cost or 90 percent of decremental cost, and (iii) deviations greater 

than +/- 7.5 percent (or 10 MW) of the scheduled transaction to be applied hourly to any 

energy imbalance that occurs as a result of the Transmission Customer’s scheduled 

transaction(s) will be settled financially, at the end of each month, at 125 percent of 

incremental cost or 75 percent of decremental cost. 

For purposes of this Schedule, incremental cost and decremental cost represent the 

Transmission Provider’s actual average hourly cost of the last 10 MW dispatched for any 

purpose, e.g., to supply the Transmission Provider’s Native Load Customers, correct 

imbalances, or make off-system sales, based on the replacement cost of fuel, unit heat 

rates, start-up costs (including any commitment and redispatch costs), incremental 

operation and maintenance costs, and purchased and interchange power costs and taxes, 

as applicable. 
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Original Sheet No. - 138 - 

SCHEDULE 5 

Operating Reserve - Spinning Reserve Service 

 Spinning Reserve Service is needed to serve load immediately in the event of a 

system contingency. Spinning Reserve Service may be provided by generating units that 

are on-line and loaded at less than maximum output and by non-generation resources 

capable of providing this service. The Transmission Provider must offer this service 

when the transmission service is used to serve load within its Control Area. The 

Transmission Customer must either purchase this service from the Transmission Provider 

or make alternative comparable arrangements to satisfy its Spinning Reserve Service 

obligation. The amount of and charges for Spinning Reserve Service are set forth below. 

To the extent the Control Area operator performs this service for the Transmission 

Provider, charges to the Transmission Customer are to reflect only a pass-through of the 

costs charged to the Transmission Provider by that Control Area operator. 
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Original Sheet No. - 139 - 

SCHEDULE 6 

Operating Reserve - Supplemental Reserve Service 

 Supplemental Reserve Service is needed to serve load in the event of a system 

contingency; however, it is not available immediately to serve load but rather within a 

short period of time. Supplemental Reserve Service may be provided by generating units 

that are on-line but unloaded, by quick-start generation or by interruptible load or other 

non-generation resources capable of providing this service. The Transmission Provider 

must offer this service when the transmission service is used to serve load within its 

Control Area. The Transmission Customer must either purchase this service from the 

Transmission Provider or make alternative comparable arrangements to satisfy its 

Supplemental Reserve Service obligation. The amount of and charges for Supplemental 

Reserve Service are set forth below. To the extent the Control Area operator performs 

this service for the Transmission Provider, charges to the Transmission Customer are to 

reflect only a pass-through of the costs charged to the Transmission Provider by that 

Control Area operator. 
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Original Sheet No. - 140 - 

SCHEDULE 7 

Long-Term Firm and Short-Term Firm Point-To-Point 

Transmission Service 

 The Transmission Customer shall compensate the Transmission Provider each 

month for Reserved Capacity at the sum of the applicable charges set forth below: 

1) Yearly delivery: one-twelfth of the demand charge of $ /KW of Reserved 

Capacity per year. 

2) Monthly delivery: $ /KW of Reserved Capacity per month. 

3) Weekly delivery: $ /KW of Reserved Capacity per week. 

4) Daily delivery: $ /KW of Reserved Capacity per day. 

The total demand charge in any week, pursuant to a reservation for Daily delivery, 

shall not exceed the rate specified in section (3) above times the highest amount in 

kilowatts of Reserved Capacity in any day during such week. 

5) Discounts: Three principal requirements apply to discounts for transmission 

service as follows (1) any offer of a discount made by the Transmission Provider 

must be announced to all Eligible Customers solely by posting on the OASIS, (2) 

any customer-initiated requests for discounts (including requests for use by one's 

wholesale merchant or an Affiliate's use) must occur solely by posting on the 

OASIS, and (3) once a discount is negotiated, details must be immediately posted 

on the OASIS. For any discount agreed upon for service on a path, from point(s) 
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Original Sheet No. - 141 - 

of receipt to point(s) of delivery, the Transmission Provider must offer the same 

discounted transmission service rate for the same time period to all Eligible 

Customers on all unconstrained transmission paths that go to the same point(s) of 

delivery on the Transmission System. 

6) Resales: The rates and rules governing charges and discounts stated above shall 

not apply to resales of transmission service, compensation for which shall be 

governed by section 23.1 of the Tariff. 
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Original Sheet No. - 142 - 

SCHEDULE 8 

Non-Firm Point-To-Point Transmission Service 

 The Transmission Customer shall compensate the Transmission Provider for NonFirm Point-To-Point Transmission Service up to the sum of the applicable charges set 

forth below: 

1) Monthly delivery: $ /KW of Reserved Capacity per month. 

2) Weekly delivery: $ /KW of Reserved Capacity per week. 

3) Daily delivery: $ /KW of Reserved Capacity per day. 

The total demand charge in any week, pursuant to a reservation for Daily delivery, 

shall not exceed the rate specified in section (2) above times the highest amount in 

kilowatts of Reserved Capacity in any day during such week. 

4) Hourly delivery: The basic charge shall be that agreed upon by the Parties at the 

time this service is reserved and in no event shall exceed $ /MWH. The total 

demand charge in any day, pursuant to a reservation for Hourly delivery, shall not 

exceed the rate specified in section (3) above times the highest amount in 

kilowatts of Reserved Capacity in any hour during such day. In addition, the total 

demand charge in any week, pursuant to a reservation for Hourly or Daily 

delivery, shall not exceed the rate specified in section (2) above times the highest 

amount in kilowatts of Reserved Capacity in any hour during such week. 
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Original Sheet No. - 143 - 

5) Discounts: Three principal requirements apply to discounts for transmission 

service as follows (1) any offer of a discount made by the Transmission Provider 

must be announced to all Eligible Customers solely by posting on the OASIS, (2) 

any customer-initiated requests for discounts (including requests for use by one's 

wholesale merchant or an Affiliate's use) must occur solely by posting on the 

OASIS, and (3) once a discount is negotiated, details must be immediately posted 

on the OASIS. For any discount agreed upon for service on a path, from point(s) 

of receipt to point(s) of delivery, the Transmission Provider must offer the same 

discounted transmission service rate for the same time period to all Eligible 

Customers on all unconstrained transmission paths that go to the same point(s) of 

delivery on the Transmission System. 

6) Resales: The rates and rules governing charges and discounts stated above shall 

not apply to resales of transmission service, compensation for which shall be 

governed by section 23.1 of the Tariff. 
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Original Sheet No. - 144 - 

SCHEDULE 9

Generator Imbalance Service

 Generator Imbalance Service is provided when a difference occurs between the 

output of a generator located in the Transmission Provider’s Control Area and a delivery 

schedule from that generator to (1) another Control Area or (2) a load within the 

Transmission Provider’s Control Area over a single hour. The Transmission Provider 

must offer this service, to the extent it is physically feasible to do so from its resources or 

from resources available to it, when Transmission Service is used to deliver energy from 

a generator located within its Control Area. The Transmission Customer must either 

purchase this service from the Transmission Provider or make alternative comparable 

arrangements, which may include use of non-generation resources capable of providing 

this service, to satisfy its Generator Imbalance Service obligation. To the extent the 

Control Area operator performs this service for the Transmission Provider, charges to the 

Transmission Customer are to reflect only a pass-through of the costs charged to the 

Transmission Provider by that Control Area Operator. The Transmission Provider may 

charge a Transmission Customer a penalty for either hourly generator imbalances under 

this Schedule or a penalty for hourly energy imbalances under Schedule 4 for imbalances 

occurring during the same hour, but not both unless the imbalances aggravate rather than 

offset each other. 

 The Transmission Provider shall establish charges for generator imbalance based 
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Original Sheet No. - 145 - 

on the deviation bands as follows: (i) deviations within +/- 1.5 percent (with a minimum 

of 2 MW) of the scheduled transaction to be applied hourly to any generator imbalance 

that occurs as a result of the Transmission Customer's scheduled transaction(s) will be 

netted on a monthly basis and settled financially, at the end of each month, at 100 percent 

of incremental or decremental cost, (ii) deviations greater than +/- 1.5 percent up to 7.5 

percent (or greater than 2 MW up to 10 MW) of the scheduled transaction to be applied 

hourly to any generator imbalance that occurs as a result of the Transmission Customer's 

scheduled transaction(s) will be settled financially, at the end of each month, at 110 

percent of incremental cost or 90 percent of decremental cost, and (iii) deviations greater 

than +/- 7.5 percent (or 10 MW) of the scheduled transaction to be applied hourly to any 

generator imbalance that occurs as a result of the Transmission Customer's scheduled 

transaction(s) will be settled at 125 percent of incremental cost or 75 percent of 

decremental cost, except that an intermittent resource will be exempt from this deviation 

band and will pay the deviation band charges for all deviations greater than the larger of 

1.5 percent or 2 MW. An intermittent resource, for the limited purpose of this Schedule 

is an electric generator that is not dispatchable and cannot store its fuel source and 

therefore cannot respond to changes in system demand or respond to transmission 

security constraints. 

Notwithstanding the foregoing, deviations from scheduled transactions in order to 

respond to directives by the Transmission Provider, a balancing authority, or a reliability 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 146 - 

coordinator shall not be subject to the deviation bands identified above and, instead, shall 

be settled financially, at the end of the month, at 100 percent of incremental and 

decremental cost. Such directives may include instructions to correct frequency decay, 

respond to a reserve sharing event, or change output to relieve congestion. 

For purposes of this Schedule, incremental cost and decremental cost represent the 

Transmission Provider’s actual average hourly cost of the last 10 MW dispatched for any 

purpose, e.g., to supply the Transmission Provider’s Native Load Customers, correct 

imbalances, or make off-system sales, based on the replacement cost of fuel, unit heat 

rates, start-up costs (including any commitment and redispatch costs), incremental 

operation and maintenance costs, and purchased and interchange power costs and taxes, 

as applicable. 
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Original Sheet No. - 147 - 

 Page 1 of 4 

ATTACHMENT A 

Form Of Service Agreement For 

Firm Point-To-Point Transmission Service 

1.0 This Service Agreement, dated as of _______________, is entered into, by and 

between _____________ (the Transmission Provider), and ____________ 

("Transmission Customer"). 

2.0 The Transmission Customer has been determined by the Transmission Provider to 

have a Completed Application for Firm Point-To-Point Transmission Service 

under the Tariff. 

3.0 The Transmission Customer has provided to the Transmission Provider an 

Application deposit in accordance with the provisions of Section 17.3 of the 

Tariff. 

4.0 Service under this agreement shall commence on the later of (l) the requested 

service commencement date, or (2) the date on which construction of any Direct 

Assignment Facilities and/or Network Upgrades are completed, or (3) such other 

date as it is permitted to become effective by the Commission. Service under this 

agreement shall terminate on such date as mutually agreed upon by the parties. 

5.0 The Transmission Provider agrees to provide and the Transmission Customer 

agrees to take and pay for Firm Point-To-Point Transmission Service in 

accordance with the provisions of Part II of the Tariff and this Service Agreement. 

6.0 Any notice or request made to or by either Party regarding this Service Agreement 

shall be made to the representative of the other Party as indicated below. 
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Original Sheet No. - 148 - 

 Page 2 of 4 

Transmission Provider:

_____________________________________ 

_____________________________________ 

_____________________________________ 

Transmission Customer:

_____________________________________ 

_____________________________________ 

_____________________________________ 

7.0 The Tariff is incorporated herein and made a part hereof. 

IN WITNESS WHEREOF, the Parties have caused this Service Agreement to be 

executed by their respective authorized officials. 

Transmission Provider:

By: ______________________ _______________ ______________ 

 Name Title Date 

Transmission Customer:

By: ______________________ _______________ ______________ 

 Name Title Date 
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Original Sheet No. - 149 - 

 Page 3 of 4 

Specifications For Long-Term Firm Point-To-Point

Transmission Service

1.0 Term of Transaction: __________________________________ 

 Start Date: ___________________________________________ 

 Termination Date: _____________________________________ 

2.0 Description of capacity and energy to be transmitted by Transmission Provider 

including the electric Control Area in which the transaction originates. 

 _______________________________________________________ 

3.0 Point(s) of Receipt:___________________________________ 

 Delivering Party:_______________________________________ 

4.0 Point(s) of Delivery:__________________________________ 

 Receiving Party:______________________________________ 

5.0 Maximum amount of capacity and energy to be transmitted 

 (Reserved Capacity):___________________________________ 

6.0 Designation of party(ies) subject to reciprocal service 

obligation:_________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________ 

7.0 Name(s) of any Intervening Systems providing transmission 

service:____________________________________________________________

__________________________________________________________________ 
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Original Sheet No. - 150 - 

 Page 4 of 4 

8.0 Service under this Agreement may be subject to some combination of the charges 

detailed below. (The appropriate charges for individual transactions will be 

determined in accordance with the terms and conditions of the Tariff.) 

8.1 Transmission Charge:________________________________ 

 __________________________________________________ 

8.2 System Impact and/or Facilities Study Charge(s): 

 __________________________________________________ 

 __________________________________________________ 

8.3 Direct Assignment Facilities Charge:____________________ 

 __________________________________________________ 

8.4 Ancillary Services Charges: ______________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 
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Original Sheet No. - 151 - 

 Page 1 of 4 

ATTACHMENT A-1 

Form Of Service Agreement For 

The Resale, Reassignment Or Transfer Of 

Point-To-Point Transmission Service 

1.0 This Service Agreement, dated as of _______________, is entered into, by and 

between ____________ (the Transmission Provider), and ____________ (the 

Assignee). 

2.0 The Assignee has been determined by the Transmission Provider to be an Eligible 

Customer under the Tariff pursuant to which the transmission service rights to be 

transferred were originally obtained. 

3.0 The terms and conditions for the transaction entered into under this Service 

Agreement shall be subject to the terms and conditions of Part II of the 

Transmission Provider’s Tariff, except for those terms and conditions negotiated 

by the Reseller of the reassigned transmission capacity (pursuant to Section 23.1 

of this Tariff) and the Assignee, to include: contract effective and termination 

dates, the amount of reassigned capacity or energy, point(s) of receipt and 

delivery. Changes by the Assignee to the Reseller’s Points of Receipt and Points 

of Delivery will be subject to the provisions of Section 23.2 of this Tariff. 

4.0 The Transmission Provider shall credit the Reseller for the price reflected in the 

Assignee’s Service Agreement or the associated OASIS schedule. 

5.0 Any notice or request made to or by either Party regarding this Service Agreement 

shall be made to the representative of the other Party as indicated below. 
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Original Sheet No. - 152 - 

 Page 2 of 4 

Transmission Provider: 

______________________________ 

______________________________ 

______________________________ 

Assignee: 

______________________________ 

______________________________ 

______________________________ 

6.0 The Tariff is incorporated herein and made a part hereof. 

IN WITNESS WHEREOF, the Parties have caused this Service Agreement to be 

executed by their respective authorized officials. 

Transmission Provider: 

By:____________________________ ______________________ _______________ 

 Name Title Date 

Assignee: 

By:____________________________ ______________________ _______________ 

 Name Title Date 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 153 - 

 Page 3 of 4 

Specifications For The Resale, Reassignment Or Transfer of 

Long-Term Firm Point-To-Point Transmission Service

1.0 Term of Transaction: ___________________________________ 

 Start Date: ___________________________________________ 

 Termination Date: _____________________________________ 

2.0 Description of capacity and energy to be transmitted by Transmission Provider 

including the electric Control Area in which the transaction originates. 

 _______________________________________________________ 

3.0 Point(s) of Receipt:___________________________________ 

 Delivering Party:_______________________________________ 

4.0 Point(s) of Delivery:__________________________________ 

 Receiving Party:______________________________________ 

5.0 Maximum amount of reassigned capacity: __________________ 

6.0 Designation of party(ies) subject to reciprocal service 

obligation:_________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________ 

7.0 Name(s) of any Intervening Systems providing transmission 

service:____________________________________________________________

__________________________________________________________________ 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 154 - 

 Page 4 of 4 

8.0 Service under this Agreement may be subject to some combination of the charges 

detailed below. (The appropriate charges for individual transactions will be 

determined in accordance with the terms and conditions of the Tariff.) 

8.1 Transmission Charge:________________________________ 

 __________________________________________________ 

8.2 System Impact and/or Facilities Study Charge(s): 

 __________________________________________________ 

 __________________________________________________ 

8.3 Direct Assignment Facilities Charge:____________________ 

 __________________________________________________ 

8.4 Ancillary Services Charges: ______________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

 __________________________________________________ 

9.0 Name of Reseller of the reassigned transmission capacity: 

___________________________________________________________ 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 155 - 

ATTACHMENT B 

Form Of Service Agreement For Non-Firm Point-To-Point 

Transmission Service 

1.0 This Service Agreement, dated as of _______________, is entered into, by and 

between _______________ (the Transmission Provider), and ____________ 

(Transmission Customer). 

2.0 The Transmission Customer has been determined by the Transmission Provider to 

be a Transmission Customer under Part II of the Tariff and has filed a Completed 

Application for Non-Firm Point-To-Point Transmission Service in accordance 

with Section 18.2 of the Tariff. 

3.0 Service under this Agreement shall be provided by the Transmission Provider 

upon request by an authorized representative of the Transmission Customer. 

4.0 The Transmission Customer agrees to supply information the Transmission 

Provider deems reasonably necessary in accordance with Good Utility Practice in 

order for it to provide the requested service. 

5.0 The Transmission Provider agrees to provide and the Transmission Customer 

agrees to take and pay for Non-Firm Point-To-Point Transmission Service in 

accordance with the provisions of Part II of the Tariff and this Service Agreement. 

6.0 Any notice or request made to or by either Party regarding this Service Agreement 

shall be made to the representative of the other Party as indicated below. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 156 - 

Transmission Provider:

____________________________________ 

____________________________________ 

____________________________________ 

Transmission Customer:

_____________________________________ 

_____________________________________ 

_____________________________________ 

7.0 The Tariff is incorporated herein and made a part hereof. 

IN WITNESS WHEREOF, the Parties have caused this Service Agreement to be 

executed by their respective authorized officials. 

 

Transmission Provider: 

By: ______________________ _______________ ______________ 

 Name Title Date 

Transmission Customer: 

By: ______________________ _______________ ______________ 

 Name Title Date 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 157 - 

ATTACHMENT C 

Methodology To Assess Available Transfer Capability 

The Transmission Provider must include, at a minimum, the following information 

concerning its ATC calculation methodology: 

(1) A detailed description of the specific mathematical algorithm used to calculate 

firm and non-firm ATC (and AFC, if applicable) for its scheduling horizon (same day 

and real-time), operating horizon (day ahead and pre-schedule) and planning horizon 

(beyond the operating horizon); 

(2) A process flow diagram that illustrates the various steps through which ATC/AFC 

is calculated; and 

(3) A detailed explanation of how each of the ATC components is calculated for both 

the operating and planning horizons. 

(a) For TTC, a Transmission Provider shall: (i) explain its definition of TTC; (ii) 

explain its TTC calculation methodology; (iii) list the databases used in its TTC 

assessments; and (iv) explain the assumptions used in its TTC assessments regarding load 

levels, generation dispatch, and modeling of planned and contingency outages. 

(b) For ETC, a transmission provider shall explain: (i) its definition of ETC; (ii) the 

calculation methodology used to determine the transmission capacity to be set aside for 

native load (including network load), and non-OATT customers (including, if applicable, 

an explanation of assumptions on the selection of generators that are modeled in service); 

(iii) how point-to-point transmission service requests are incorporated; (iv) how rollover 

rights are accounted for; (v) its processes for ensuring that non-firm capacity is released 

properly (e.g., when real time schedules replace the associated transmission service 

requests in its real-time calculations); and (vi) describe the step-by-step modeling study 

methodology and criteria for adding or eliminating flowgates (permanent and temporary). 

(c) If a Transmission Provider uses an AFC methodology to calculate ATC, it shall: 

(i) explain its definition of AFC; (ii) explain its AFC calculation methodology; (iii) 

explain its process for converting AFC into ATC for OASIS posting; (iv) list the 

databases used in its AFC assessments; and (v) explain the assumptions used in its AFC 

assessments regarding load levels, generation dispatch, and modeling of planned and 

contingency outages. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 158 - 

(d) For TRM, a Transmission Provider shall explain: (i) its definition of TRM; (ii) its 

TRM calculation methodology (e.g., its assumptions on load forecast errors, forecast 

errors in system topology or distribution factors and loop flow sources); (iii) the 

databases used in its TRM assessments; (iv) the conditions under which the transmission 

provider uses TRM. A Transmission Provider that does not set aside transfer capability 

for TRM must so state. 

(e) For CBM, the Transmission Provider shall state include a specific and selfcontained narrative explanation of its CBM practice, including: (i) an identification of the 

entity who performs the resource adequacy analysis for CBM determination; (ii) the 

methodology used to perform generation reliability assessments (e.g., probabilistic or 

deterministic); (iii) an explanation of whether the assessment method reflects a specific 

regional practice; (iv) the assumptions used in this assessment; and (v) the basis for the 

selection of paths on which CBM is set aside. 

(f) In addition, for CBM, a Transmission Provider shall: (i) explain its definition of 

CBM; (ii) list the databases used in its CBM calculations; and (iii) demonstrate that there 

is no double-counting of contingency outages when performing CBM, TTC, and TRM 

calculations. 

(g) The Transmission Provider shall explain its procedures for allowing the use of 

CBM during emergencies (with an explanation of what constitutes an emergency, the 

entities that are permitted to use CBM during emergencies and the procedures which 

must be followed by the transmission providers’ merchant function and other loadserving entities when they need to access CBM). If the Transmission Provider’s practice 

is not to set aside transfer capability for CBM, it shall so state. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 159 - 

ATTACHMENT D 

Methodology for Completing a System Impact Study 

To be filed by the Transmission Provider 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 160 - 

ATTACHMENT E 

Index Of Point-To-Point Transmission Service Customers 

 Date of 

 Customer Service Agreement 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 161 - 

ATTACHMENT F 

Service Agreement For 

Network Integration Transmission Service 

To be filed by the Transmission Provider 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 162 - 

ATTACHMENT G 

Network Operating Agreement 

 To be filed by the Transmission Provider 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 163 - 

ATTACHMENT H 

Annual Transmission Revenue Requirement 

For Network Integration Transmission Service 

1. The Annual Transmission Revenue Requirement for purposes of the Network 

Integration Transmission Service shall be ____________________________. 

2. The amount in (1) shall be effective until amended by the Transmission Provider 

or modified by the Commission. 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 164 - 

ATTACHMENT I 

Index Of Network Integration Transmission Service Customers 

 Date of 

 Customer Service Agreement 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 165 - 

ATTACHMENT J 

Procedures for Addressing Parallel Flows 

To be filed by the Transmission Provider 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 166 - 

ATTACHMENT K 

Transmission Planning Process 

The Transmission Provider shall establish a coordinated, open and transparent planning 

process with its Network and Firm Point-to-Point Transmission Customers and other 

interested parties, including the coordination of such planning with interconnected 

systems within its region, to ensure that the Transmission System is planned to meet the 

needs of both the Transmission Provider and its Network and Firm Point-to-Point 

Transmission Customers on a comparable and nondiscriminatory basis. The 

Transmission Provider’s coordinated, open and transparent planning process shall be 

provided as an attachment to the Transmission Provider’s Tariff. 

The Transmission Provider’s planning process shall satisfy the following nine principles, 

as defined in the Final Rule in Docket No. RM05-25-000: coordination, openness, 

transparency, information exchange, comparability, dispute resolution, regional 

participation, economic planning studies, and cost allocation for new projects. The 

planning process shall also provide a mechanism for the recovery and allocation of 

planning costs consistent with the Final Rule in Docket No. RM05-25-000. 

The Transmission Provider’s planning process must include sufficient detail to enable 

Transmission Customers to understand: 

(i) The process for consulting with customers and neighboring transmission providers; 

(ii) The notice procedures and anticipated frequency of meetings; 

(iii) The methodology, criteria, and processes used to develop transmission plans; 

(iv) The method of disclosure of criteria, assumptions and data underlying transmission 

system plans; 

(v) The obligations of and methods for customers to submit data to the transmission 

provider; 

(vi) The dispute resolution process; 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 167 - 

(vii) The transmission provider’s study procedures for economic upgrades to address 

congestion or the integration of new resources; and 

(viii) The relevant cost allocation procedures or principles. 

 
(Name of Transmission Provider) Open Access Transmission Tariff 

Original Sheet No. - 168 - 

ATTACHMENT L 

Creditworthiness Procedures 

For the purpose of determining the ability of the Transmission Customer to meet its 

obligations related to service hereunder, the Transmission Provider may require 

reasonable credit review procedures. This review shall be made in accordance with 

standard commercial practices and must specify quantitative and qualitative criteria to 

determine the level of secured and unsecured credit 

The Transmission Provider may require the Transmission Customer to provide and 

maintain in effect during the term of the Service Agreement, an unconditional and 

irrevocable letter of credit as security to meet its responsibilities and obligations under 

the Tariff, or an alternative form of security proposed by the Transmission Customer and 

acceptable to the Transmission Provider and consistent with commercial practices 

established by the Uniform Commercial Code that protects the Transmission Provider 

against the risk of non-payment. 

Additionally, the Transmission Provider must include, at a minimum, the following 

information concerning its creditworthiness procedures: 

(1) a summary of the procedure for determining the level of secured and unsecured credit; 

(2) a list of the acceptable types of collateral/security; 

(3) a procedure for providing customers with reasonable notice of changes in credit levels 

and collateral requirements; 

(4) a procedure for providing customers, upon request, a written explanation for any 

change in credit levels or collateral requirements; 

(5) a reasonable opportunity to contest determinations of credit levels or collateral 

requirements; and 

(6) a reasonable opportunity to post additional collateral, including curing any noncreditworthy determination.