UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 37 

[Docket No. RM05-17-000] 

Information Requirements for Available Transfer Capability 

(May 27, 2005) 

 

AGENCY: Federal Energy Regulatory Commission 

ACTION: Notice of Inquiry 

SUMMARY: The Federal Energy Regulatory Commission seeks comments on: 

(a) the North American Electric Reliability Council’s recent Long-Term 

AFC/ATC Task Force Report; (b) the advisability of revising and standardizing 

available transfer capability calculations; and (c) the most expeditious way to 

obtain an industry-wide standard for available transfer capability calculations. 

This Notice of Inquiry is the result of a review conducted by the Commission’s 

Information Assessment Team (FIAT), to propose: (a) new information the 

Commission needs to promote greater market transparency in electricity markets; 

and (b) ways to reduce the reporting burden on industry through the elimination, 

reduction, streamlining or reformatting of current information collections. 

DATES: Comments on this Notice of Inquiry are due on [Insert date 60 days after 

publication in the FEDERAL REGISTER]. 
Docket No. RM05-17-000 - 2 -

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

Commission's web site at http://www.ferc.gov. Commenters unable to file 

comments electronically must send an original and 14 copies of their comments to: 

Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street 

N.E., Washington, DC, 20426. Refer to the Comment Procedures section of the 

preamble for additional information on how to file comments. 

FOR FURTHER INFORMATION CONTACT: 

Michelle Veloso (Technical Information) 

Office of Markets, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

michelle.veloso@ferc.gov

Edward Fowlkes (Technical Information) 

Office of Energy Projects 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

edward.fowlkes@ferc.gov

Joseph C. Lynch (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

joseph.lynch@ferc.gov

SUPPLEMENTARY INFORMATION: 
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Information Requirements for Docket No. RM05-17-000 

Available Transfer Capability 

NOTICE OF INQUIRY 

( May 27, 2005) 

1. In Order No. 889,1

 the Commission required transmission providers2 to 

offer unused transmission capacity to the market by posting available transfer 

capability (ATC) on their Open Access Same-Time Information Systems 

 1 Open Access Same-Time Information System and Standards of Conduct, 

Order No. 889, 61 FR 21,737 (1996), FERC Stats. & Regs., Regulations 

Preambles July 1996-December 2000 & 31,035 (1996), order on reh'g, Order 

No. 889-A, 62 FR12,484 (1997), FERC Stats. & Regs., Regulations Preambles 

July 1996-December 2000 & 31,049 (1997), reh'g denied, Order No. 889-B, 

81 FERC & 61,253 (1997). 

2

 A transmission provider is 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. See 

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 21,540 (May 10, 1996), 

FERC Stats. & Regs., Regulations Preambles January 1991-June 1996 & 31,036 

Appendix D (Pro Forma Tariff) at 1.46 (1996), order on reh'g, Order No. 888-A, 

62 FR 12,274 (March 4, 1997), FERC Stats. & Regs., Regulations Preambles July 

1996-December 2001 & 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), aff'd sub nom. New York v. FERC, 535 U.S. 

1 (2002) (Order No. 888). 
Docket No. RM05-017-000 - 2 -

(OASIS).3 In the years since the Commission issued Order No. 889, market 

participants have complained that variations in the way ATC is calculated provide 

opportunities for undue discrimination and create obstacles to doing business. The 

Commission believes that standardizing the way ATC is calculated will alleviate 

these obstacles. This Notice of Inquiry is the result of a review conducted by the 

Commission’s Information Assessment Team (FIAT), to propose: (1) new 

information the Commission needs to promote greater market transparency in 

electricity markets; and (b) ways to reduce the reporting burden on industry 

through the elimination, reduction, streamlining or reformatting of current 

information collections. 

2. The Commission has reviewed the final report of the North American 

Electric Reliability Council (NERC) on long-term available flowgate capability 

(AFC) and ATC,4

 which addresses the calculation and coordination of AFC/ATC 

to increase market liquidity and enhance reliability. As discussed more fully 

below, NERC’s LTATF Report provides useful guidance on how to achieve an 

industry-wide methodology for calculating ATC. The Commission encourages the 

electricity industry to work toward standardization and coordination of ATC and 

 3

 18 CFR Part 37. 

4

 North American Electric Reliability Council, Long-Term AFC/ATC Task 

Force Final Report (2005) (LTATF Report). 
Docket No. RM05-017-000 - 3 -

related terms, and requests comments on the recommendations put forth in the 

LTATF Report.5

Background

A. Definitions

3. The calculation of ATC involves a number of variables that require 

definition. The Commission will use the LTATF Report definitions for purposes 

of the discussion in this Notice of Inquiry. The Commission requests, however, 

that the industry comment on these definitions, as these variables determine the 

calculation of ATC. 

4. For market participants, ATC is essentially a measure of unused 

transmission that a transmission provider can offer for sale pursuant to Order 

Nos. 888 and 889. Transmission providers sell transmission service to customers 

in the form of transfer capability. Transfer capability is the measure of the ability 

of the interconnected electrical system to move electric energy reliably from one 

point to another and is limited by, among other things, the capacity either of 

equipment (such as transformers or transmission circuits) or interfaces (one or 

more circuits). ATC is the amount of transfer capability still available for sale 

after all existing uses are accounted for.6

 Transmission providers calculate ATC 

 5

 The Commission recognizes the common interest of the United States, 

Canada and Mexico in maintaining a safe and reliable interconnected North 

American bulk power system. Any standards promulgated by the Commission 

would apply only to jurisdictional entities. 

6

 LTATF Report, Appendix A, page 4. 
Docket No. RM05-017-000 - 4 -

by subtracting existing transmission commitments, transmission reserve margin, 

and capacity benefit margin from total transfer capability.7

 

5. A flowgate is the name given to a transmission element(s) and associated 

contingencies that may limit ATC. AFC is a measure of the capability remaining 

on a flowgate for future uses, after considering the effect of prior sales. AFC is 

measured as a flow limit on a flowgate, while ATC is measured as a transaction 

limit from a source to a sink.8

 

6. There may be multiple flowgates between source and sink that can limit a 

transaction. If the assumptions that underlie AFC and ATC do not reasonably 

conform to real-time operations, the transmission system will either be artificially 

constrained, or it will be underused, leading to lost transmission opportunities. 

7. Transmission providers use CBM and TRM in their ATC and AFC 

calculations to account for uncertainties or contingencies that are not explicitly 

modeled in the calculations. CBM is the amount of firm transmission transfer 

capability reserved by the transmission provider so that load serving entities, 

whose loads are located on that transmission provider’s system, can access remote 

reserve generation from interconnected systems.9

 TRM is the amount of 

 7

 ATC equals Total Transfer Capability (TTC) minus Existing 

Transmission Commitments (ETC) minus Transmission Reserve Margin (TRM) 

minus Capacity Benefit Margin (CBM), or ATC=TTC-ETC-TRM-CBM. 

8

 “Source” and “sink” are points at which the transmission of electric 

energy begins (source) and ends (sink). 

9

 LTATF Report, Appendix F, page 2. 
Docket No. RM05-017-000 - 5 -

transmission transfer capability necessary to ensure that the interconnected 

transmission network will be secure under a reasonable range of uncertainties in 

system conditions. The criteria used to determine TRM and CBM should be 

consistent with the transmission operator’s planning and operating criteria.10

B. Evolution of Electricity Markets since Order Nos. 888 and 889

8. In Order Nos. 888 and 889, the Commission required transmission 

providers to sell unused transmission capacity and post their ATC on OASIS. 

Market transactions depend on this critical transmission information. As the 

electric industry has evolved, the nature of the calculations of ATC, TTC, TRM 

and CBM and the interaction between neighboring transmission providers has 

changed substantially. In the years since the Commission established OASIS, 

independent system operators (ISOs) and regional transmission organizations 

(RTOs) have developed organized markets. Agreements among neighboring 

ISOs/RTOs and transmission service providers have led to increased coordination 

of operation and requests for transmission service, and have resulted in fewer 

variations in the calculation of ATC for those regions. In regions without an 

ISO/RTO, however, this may not be the case. 

9. While the electric industry uses OASIS for posting ATC, there is as yet no 

industry-wide standard for calculating ATC. The Commission’s OASIS II 

Advanced Notice of Proposed Rulemaking, issued in July 2000, contemplated 

 10 Id. at Appendix A, page 5. 

 
Docket No. RM05-017-000 - 6 -

detailed, standard communication protocols and associated business practices for 

ATC, TTC, and CBM11 but these standards and protocols are not yet in place. 

C. Problems with ATC Calculations

10. Transmission providers have incentives to understate ATC on those paths 

valuable to power sellers that are competitors to a transmission provider’s own (or 

its affiliate’s) power sales. The lack of clear and consistent methodologies for 

calculating ATC can allow transmission providers the discretion to control the 

transmission system to favor their own power sales or those of their affiliates. 

ATC can vary considerably depending on the criteria they use to calculate it and 

the order in which the calculations are made. Although the Commission has 

required transmission providers to post the formula for calculating ATC,12 the 

transmission provider has sole responsibility for, and a great deal of discretion in, 

its calculation. More rigorous and consistent standards and procedures for ATC 

calculations would help ensure that transmission providers’ exercise of discretion 

in their calculation of ATC does not result in undue discrimination with respect to 

interstate transmission. 

11. Complainants have alleged that transmission providers misrepresent ATC, 

often using ATC calculations to inflate transmission needed to serve native load or 

to set aside capacity for their affiliates. In one instance, a transmission provider 

 11 Open Access Same-Time Information System Phase II, 92 FERC &61,047 

at 61,126-27 (2000). 

12 18 CFR 37.6. 
Docket No. RM05-017-000 - 7 -

reserved capacity on behalf of native load but failed to designate network 

resources as required by the open access transmission tariff. The company thus 

improperly increased the existing transmission commitment component of the 

ATC calculation, artificially reducing posted ATC.13 It is thus important that the 

ATC component (TRM and CBM) assumptions are stated and posted so that 

recalculated ATC values are transparent and not devised to produce an unduly 

discriminatory result. 

12. The lack of standardization and coordination of ATC can not only result in 

unduly discriminatory behavior, but can also on occasion affect reliability. As the 

LTATF recognized, inaccurate ATC values can lead to Transmission Loading 

Relief actions [or curtailments in the Western Electricity Coordinating Council 

(WECC)] if they result in transmission flows that exceed line limits.14 In this 

regard, preceding the August 14, 2003 blackout, transmission operators calculated 

ATC values approximately seven days ahead using forecasted system conditions. 

This lag in real-time ATC values contributed to the blackout. The Final Blackout 

Report indicated that transmission operators should update ATC/TTC values as 

the forecast of system conditions changes.15

 13 See Aquila Power Corporation v. Entergy Services, Inc., 90 FERC 

& 61,260 at 61,859-60 (2000). 

14 LTATF Report, page 1. 

15 U.S.-Canada Power System Outage Task Force, Final Report on the 

August 14th Blackout in the United States and Canada: Causes and 

Recommendations 31 (April 2004) (Final Blackout Report). 
Docket No. RM05-017-000 - 8 -

D. The LTATF Report

13. NERC created the LTATF to develop a report and specific 

recommendations for the calculation and coordination of AFC/ATC to increase 

market liquidity and enhance reliability. NERC’s Market Committee directed the 

LTATF efforts and the LTATF also coordinated its efforts with representatives 

from the North American Energy Standards Board (NAESB). The LTATF Report 

builds upon NERC’s “Version 0” reliability standards, which the Commission 

incorporated into its Policy Statement on Matters Related to Bulk Power System 

Reliability in February 2005.16 The Version 0 reliability standards attempt to state 

reliability goals clearly and provide a means by which to measure the progress 

toward their attainment. The Commission’s Supplement to the Policy Statement

makes clear that the term Good Utility Practice as used in the open access 

transmission tariff (OATT) includes compliance with NERC’s Version 0 

reliability standards.17

14. The LTATF Report outlines existing ATC practices in the Eastern 

Interconnection and the WECC. It also proposes a method of exchanging 

AFC/ATC data between entities and summarizes the minimum requirements of 

 16 Supplement to Policy Statement on Matters Related to Bulk Power 

System Reliability, 110 FERC &61,096 (2005) (Supplement); see Policy Statement 

on Matters Related to Bulk Power System Reliability, 107 FERC & 61,052 (Policy 

Statement), clarified, 108 FERC &61,288 (2004). 

17 Supplement at P 23. Version 0 Standards MOD 001-0 through 009-0 are 

specifically relevant here. 
Docket No. RM05-017-000 - 9 -

modeling techniques to facilitate proper calculation and coordination of 

AFC/ATC. 

15. The LTATF Report details three groups of issues: (1) communication and 

coordination of AFC/ATC; (2) calculation process for AFC/ATC; and 

(3) consistency between planning criteria and the attributes of AFC/ATC 

calculations (over both planning and operating horizons). 

Communication and coordination of AFC/ATC—respecting third party 

constraints

16. The objective of AFC/ATC coordination is to ensure that neighboring 

entities exchange relevant information to facilitate: (a) a reasonable representation 

of external entities for modeling purposes; (b) the ability of each calculator18 to 

adequately represent the values of flowgates on third party transmission systems; 

and (c) the ability of each calculator to translate data from neighboring entities and 

make meaningful use of the data in its calculations. 

17. The LTATF documented the existing coordination processes for the major 

regions in the Eastern Interconnection and the WECC. The report proposes a 

method of exchanging AFC/ATC data between entities and provides the minimum 

requirements for flowgate exchange and modeling techniques needed to ensure 

proper calculation and coordination of transfer capability. 

 18 The calculator prepares and updates ATC values for the transmission 

provider. 
Docket No. RM05-017-000 - 10 -

Calculation process for AFC/ATC

18. The LTATF agreed that transmission service providers need to provide 

better documentation and greater transparency for their AFC/ATC calculation 

processes. The LTATF Report contains a number of recommendations to achieve 

more consistency among AFC/ATC calculations. 

19. The LTATF proposed a Standard Authorization Request (SAR) that 

contains recommendations to achieve more consistency among AFC/ATC 

calculations. The SAR would change the existing modeling standard(s) by adding 

a requirement for transmission providers to coordinate the calculation of ATC and 

incorporate specific reliability practices into the ATC calculation and coordination 

methodologies.19

20. The LTATF found that the way in which various regions calculate and use 

ATC, TTC, TRM and CBM varies widely.20 As the LTATF Report explains, 

some transmission providers first calculate TTC, and then derive ATC. Others 

first calculate ATC, and then derive TTC. Some transmission providers first 

calculate AFC, and then derive ATC. Some only calculate TTC. Some 

transmission providers use CBM; some do not use CBM. The scope of CBM 

varies by footprint. Nearly all transmission providers use TRM.21

 19 LTATF Report, Attachment A, SAR-1. 

20 LTATF Report at page 3. 

21 Id. at page 2. The LTATF reviewed ATC methodologies and found that 

the numerous ATC calculators in the Midwest have been replaced by the Midwest 

Independent Transmission System Operator and the PJM Interconnection, LLC. 
Docket No. RM05-017-000 - 11 -

21. The LTATF noted that consistency is important in the calculation of CBM 

and TRM and recommended revising applicable standards. The LTATF proposed 

a SAR to modify the current methodology for calculating CBM and TRM.22

22. The LTATF also used the LTATF Report and recommendations to develop 

a proposed NAESB business practice standard. The LTATF Report proposes that 

a single business practice standard be developed related to both: (a) the 

processing and evaluation of transmission service requests which use 

TTC/ATC/AFC and CBM/TRM; and (b) the processing and evaluation of requests 

to schedule against approved transmission service reservations.23

Consistency between planning criteria and the attributes of the AFC/ATC 

calculations (over both planning and operating horizons)

23. The LTATF emphasized that the assumptions used in the calculation of 

AFC/ATC and CBM/TRM should be consistent with those used in the planning 

and operating horizons. The LTATF noted that transmission service providers 

should document these calculations and make them transparent to all who use the 

transmission network.24

24. The LTATF suggested that transmission providers ensure consistency 

between their ATC calculations and their internal planning processes. For 

 

The LTATF found 50 to 60 ATC calculators nationwide, with most of those in the 

West (30 to 40). Id. at page 3. 

22 Id. at Attachment B, SAR-1. 

23 Id. at Attachment C, page 2. 

24 Id. at page 3. 
Docket No. RM05-017-000 - 12 -

example, the LTATF recommended that both the internal planning processes and 

the ATC calculations reflect the same counterflows and the same components of 

TRM. Discrepancies between the internal planning processes and ATC 

calculations can result in inaccurate calculations of transmission available to the 

market.25 

Discussion

25. As noted above, problems in the way AFC and ATC are calculated can 

create and have created obstacles to ensuring that the provision of interstate 

transmission service is not unduly discriminatory or preferential. The 

Commission believes that standardizing the way AFC and ATC are calculated will 

help mitigate this potential, and enhance system performance. 

26. The LTATF Report contains proposals that appear to go a long way toward 

refining and standardizing these calculations. By developing a business practice 

standard and revisions related to reliability standards, the LTATF Report would 

also take such calculations beyond NERC’s Version 0 reliability standards. 

27. NERC also has long encouraged regions to promote a common 

methodology for determining TRM and CBM.26 Appendix C to the LTATF 

Report 27 recommends that the regions adopt written regional methodologies for 

 25 Id. at, Appendix E, page 2. 

26 See North American Electric Reliability Council, Transmission 

Capability Margins and Their Use in ATC Determination 3 (1999). 

27 Appendix C is entitled: Review of Current NERC Standards on CBM 

and TRM. 
Docket No. RM05-017-000 - 13 -

calculating CBM and TRM. The LTATF Report also sets forth areas in which 

CBM and TRM standards could be more specific. The Commission requests 

comments on these recommendations and whether they go far enough in 

promoting a common TRM and CBM methodology within each region. The 

Commission also invites comments on whether there should be common TRM and 

CBM methodologies among regions. 

28. More specifically, the Commission seeks industry comment on: (a) the 

definitions of AFC, ATC, CBM and TRM used in this order; (b) the advisability of 

revising and standardizing AFC, ATC, TRM and CBM values; (c) the advisability 

of developing interconnection-wide standards for the Eastern Interconnection and 

the WECC; (d) the contents of the LTATF Report; and (e) the most expeditious 

way to obtain industry-wide standards for ATC calculations. 

29. While the LTATF Report is a start, the Commission recognizes that more 

work is needed before there can be industry-standard AFC and ATC calculations. 

The Commission notes that the LTATF coordinated its efforts with NAESB and 

applauds NERC’s efforts to work with NAESB in developing comprehensive 

business practice and reliability standards. The Commission urges that these 

efforts continue. 

Comment Procedures

30. The Commission invites interested persons to submit comments on these 

matters and any related matters or alternative proposals that commenters may wish 

to discuss. Comments are due [insert date 60 days after publication in the 
Docket No. RM05-017-000 - 14 -

FEDERAL REGISTER]. Comments must refer to Docket No. RM05-17-000, 

and must include the commenter’s name, the organization they represent, if 

applicable, and their address. 

31. Comments may be filed electronically via the eFiling link on the 

Commission's web site at http://www.ferc.gov. The Commission accepts most 

standard word processing formats and commenters may attach additional files with 

supporting information in certain other file formats. Commenters filing 

electronically do not need to make a paper filing. Commenters that are not able to 

file comments electronically must send an original and 14 copies of their 

comments to: The Federal Energy Regulatory Commission, Office of the 

Secretary, 888 First Street N.E., Washington, DC, 20426. 

32. All comments will be placed in the Commission's public files and may be 

viewed, printed, or downloaded remotely as described in the Document 

Availability section below. Commenters commenting on this proposal are not 

required to serve copies of their comments on other commenters. 

Document Availability

33. In addition to publishing the full text of this document in the Federal 

Register, the Commission provides all interested persons an opportunity to view 

and/or print the contents of this document via the Internet through Commission's 

Home Page (http://www.ferc.gov) and in the Commission's Public Reference 

Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 

888 First Street, N.E., Room 2A, Washington D.C. 20426. 
Docket No. RM05-017-000 - 15 -

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

available in its eLibrary. The full text of this document is available in the eLibrary 

both in PDF and Microsoft Word format for viewing, printing, and/or 

downloading. To access this document in eLibrary, type the docket number of this 

document, excluding the last three digits, in the docket number field. 

35. User assistance is available for eLibrary and the Commission's website 

during normal business hours. For assistance contact FERC Online Support at 

FERCOnlineSupport@ferc.gov or toll-free at (866)208-3676, or for TTY, contact 

(202) 502-8659. E-Mail the Public Reference Room at 

public.referenceroom@ferc.gov or (202) 502-8371. 

 By direction of the Commission. 

Linda Mitry, 

Deputy Secretary.