135 FERC ¶ 61,017

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 358

[Docket No. RM07-1-003; Order No. 717-D]

Standards of Conduct for Transmission Providers

(Issued April 8, 2011)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on Rehearing and Clarification.

SUMMARY: The Federal Energy Regulatory Commission (Commission) issued Order 

No. 717-A to address requests for rehearing and make clearer the Standards of Conduct

as implemented by Order No. 717. The Commission issued Order No. 717-B to address 

expedited requests for rehearing and clarification concerning paragraph 80 of Order 

No. 717-A and whether an employee who is not making business decisions about contract 

non-price terms and conditions is considered a “marketing function employee.” Order 

No. 717-C addressed requests for rehearing and clarification concerning Order 

No. 717-A. This order addresses an additional request for rehearing and clarification 

concerning Order No. 717-C.

EFFECTIVE DATE: This rule will become effective [Insert_Date 30 days after 

publication in the FEDERAL REGISTER].

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FOR FURTHER INFORMATION CONTACT:

Susan Miller

Office of the General Counsel – Energy Markets

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

(202) 502-8977

SUPPLEMENTARY INFORMATION:

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135 FERC ¶ 61,017

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Chairman;

 Marc Spitzer, Philip D. Moeller,

 John R. Norris, and Cheryl A. LaFleur.

Standards of Conduct for Transmission Providers Docket No. RM07-1-003

ORDER NO. 717-D

ORDER ON REHEARING AND CLARIFICATION

(Issued April 8, 2011)

I. Introduction

1. On October 16, 2008, the Commission issued Order No. 717 amending the 

Standards of Conduct for Transmission Providers (the Standards of Conduct or the 

Standards) to make them clearer and to refocus the rules on the areas where there is the 

greatest potential for abuse.1

 On October 15, 2009, the Commission issued Order 

No. 717-A to address requests for rehearing and clarification of Order No. 717, largely 

affirming the reforms adopted in Order No. 717.2

 On November 16, 2009, the 

Commission issued Order No. 717-B to address expedited requests for rehearing and 

 1 Standards of Conduct for Transmission Providers, Order No. 717, 73 Fed. Reg.

63,796 (Oct. 27, 2008), FERC Stats. & Regs. ¶ 31,280 (Order No. 717).

2 Standards of Conduct for Transmission Providers, Order No. 717-A, 74 Fed. 

Reg. 54,463 (Oct. 22, 2009), FERC Stats. & Regs. ¶ 31,297 (Order No. 717-A).

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clarification concerning paragraph 80 of Order No. 717-A and whether an employee who 

is not making business decisions about contract non-price terms and conditions is 

considered a “marketing function employee.”3 On April 16, 2010 the Commission issued 

Order No. 717-C to provide additional clarification concerning matters petitioners raised 

regarding the Commission’s determinations in Order No. 717-A.4

 In this order, the 

Commission addresses an additional request for rehearing and clarification concerning 

Order No. 717-C.

II. Discussion 

2. In paragraph 16 of Order No. 717-C, the Commission clarified that “a system 

impact study performed pursuant to a request for energy resource interconnection service 

or network resource interconnection service is similar to long-range planning and 

therefore not a transmission function, because the focus of such a study is to determine 

the impact of the proposed interconnection on the safety and reliability of the 

transmission provider’s transmission system, but without conveying a right to 

 3 Standards of Conduct for Transmission Providers, Order No. 717-B, 

74 Fed. Reg. 60,153 (Nov. 20, 2009), 129 FERC ¶ 61,123 (2009) (Order No. 717-B). On 

October 30, 2009, Edison Electric Institute (EEI) filed a request for expedited 

clarification of a single issue addressed in Order No. 717-A. The Commission 

determined that it should address this issue expeditiously even though the time allowed 

under the regulations for filing rehearing requests had not yet expired. For this reason, 

the Commission issued Order No. 717-B on November 16, 2009, in which it addressed a 

single clarification request of EEI, Western Utilities, Otter Tail and Central Vermont. All 

other timely requests for rehearing, i.e. those filed by November 16, 2009, were 

addressed in Order No. 717-C. 

4 Standards of Conduct for Transmission Providers, Order No. 717-C, 

75 Fed. Reg. 20,909 (Apr. 22, 2010), 131 FERC ¶ 61,045 (2010) (Order No. 717-C). 

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transmission service.”5

 As a result, the Commission concluded that the performance of a 

system impact study in the context of evaluating an energy resource interconnection

service and network resource interconnection service is not a transmission function. 

3. The Transmission Access Policy Study Group (TAPS) requests rehearing and 

clarification of one aspect of Order No. 717-C. Specifically, TAPS requests that the 

Commission grant rehearing to hold that employees who perform system impact studies 

(or other studies) in connection with interconnection service requests are transmission 

function employees. TAPS argues that the consequence of a finding that “performance of 

a system impact study in the context of evaluating an energy resource interconnection 

service and network resource interconnection service is not a transmission function” is 

that the studies may be performed by the Transmission Provider’s “merchant-function”

personnel. 

4. TAPS further argues that the Commission created an inconsistency with its 

regulatory text when it clarified in Order No. 717-C that the performance of a system 

impact study in the context of evaluating an energy resource interconnection service and 

network resource interconnection service is not a transmission function. Specifically, 

TAPS cites 18 C.F.R. § 358.3(h), which defines “transmission functions” as “the 

planning, directing, organizing or carrying out of day-to-day transmission operations, 

including the granting and denying of transmission service requests.” TAPS then argues 

that because 18 C.F.R. § 358.3(f) defines “transmission” as “the interconnection with 

 5 Id. P 16.

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jurisdictional transmission facilities,” employees who perform studies that identify 

upgrades needed for interconnection, or who otherwise help to determine the terms on 

which interconnection may occur, perform a transmission function. 

5. Alternatively, TAPS requests that the Commission clarify that system study 

information be treated like other planning information, which the Commission requires 

transmission providers to make available on a non-discriminatory basis to all interested 

transmission customers. TAPS is concerned that if “merchant-function” personnel are 

permitted to conduct interconnection-related studies and have access to customer 

information, “merchant-function” personnel would obtain undue competitive advantages 

over any other transmission customer.

6. TAPS further requests clarification of paragraph 17 of Order No. 717-C to make 

clear that where an employee performs system impact studies in response to transmission 

service requests, the employee’s designation as a transmission-function employee does 

not turn on the duration of the requested transmission service. 

Commission Determination

7. We deny TAPS’ request that we classify employees who perform system impact 

studies in connection with interconnection service requests as transmission function 

employees.6

 Whether an employee performing a system impact study is a transmission 

 6

 In a footnote, TAPS contends that employees who perform facility studies and 

feasibility studies in response to requests for interconnection service should be 

transmission function employees. TAPS, Motion for Rehearing at p. 3-4 n.4. TAPS 

concedes that Order No. 717-C does not address the performance of these types of 

studies. Given that TAPS failed to proffer this argument during previous stages of the 

(continued...)

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function employee depends upon the purpose for which that study is being performed. 

The key factor in determining whether the employee is performing a transmission 

function in conducting the system impact study is whether the performance of that study

implicates the day-to-day operation of the transmission system. Thus, an employee 

performing system impact studies that do not implicate the day-to-day operations of the 

transmission system would not be a transmission function7

 employee, even in those

instances where the system impact study pertains to interconnection. 

8. In Order No. 717-C, we found that a system impact study performed pursuant to a 

request for energy resource interconnection service or network resource interconnection 

service is similar to long-range planning and therefore not a transmission function 

because it does not involve the conveyance of a right to transmission service. Contrary to 

the argument raised by TAPS, our focus in reaching this determination was not based on 

a distinction between transmission and interconnection. Our conclusion was based upon 

our finding that these types of system impact studies are analogous to transmission long 

range planning studies, and that neither type of study implicates day-to-day transmission

 

process and that Order No. 717-C does not address this issue, TAPS cannot raise 

this argument at this juncture in the proceeding. See, e.g., PJM Interconnection, LLC, 

126 FERC ¶ 61,030, at P 15 & n.10 (2009) (A request for rehearing of a new issue is 

outside the proper scope of the rehearing). See also, Wholesale Competition in Regions 

with Organized Electric Markets, 129 FERC ¶ 61,252, at P 9 & n.18 (2009).

7 18 C.F.R. 358.3(h).

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operations.8

 The performance of a system impact study is not a transmission function so 

long as the performance of this system impact study is not carried out as part of day-today transmission operations, including the granting or denying of transmission service.9

 

9. TAPS is also incorrect that the Commission’s clarification in Order No. 717-C 

concerning the performance of system impact studies created an inconsistency with its 

regulatory text. The definition of “transmission functions” includes “the planning, 

directing, organizing or carrying out of day-to-day transmission operations, including the 

granting and denying of transmission service requests.”10 “Transmission” is defined to 

include “the interconnection with jurisdictional transmission facilities.”11 Thus, the 

definition of transmission functions includes the planning, directing, organizing or 

carrying out of day-to-day interconnection operations with jurisdictional transmission 

facilities. Because of the limiting phrase “day-to-day transmission operations,” TAPS is 

incorrect in its conclusion that “transmission functions” always include interconnectionrelated system impact studies. 

10. Similarly, we deny TAPS’s request that the information from system impact 

studies be made available on a non-discriminatory basis to all interested transmission 

customers. TAPS erroneously assumes that the Commission determined that system 

 8 See Order No. 717–C, 131 FERC ¶ 61,045 at P 11-17. See also Order No. 717, 

FERC Stats. & Regs. ¶ 31,280 at P 146-147.

9

 Order No. 717–C, 131 FERC ¶ 61,045 at P 17.

10 18 C.F.R. 358.3(h).

11 18 C.F.R. 358.3(f).

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impact studies (or other studies) performed in response to interconnection requests are 

planning activities that may be conducted by marketing function employees. Marketing 

function employees may not perform system impact studies (or other studies) in response 

to interconnection requests since the studies would involve the use and analysis of nonpublic transmission information. As we stated in Order No. 717, planning personnel who 

do not qualify as marketing function employees may discuss information with 

transmission function employees.12 However, we reiterated that the No Conduit Rule 

applied in this situation, stating that if transmission employees share transmission 

function information with planning personnel, the planning personnel may not pass such 

information on to marketing function employees. The clear implication of these 

statements is that while planning studies may be conducted by personnel who are not 

transmission function employees, marketing function employees may not participate in 

the preparation of studies which involve the use and analysis of non-public transmission 

information.13 

11. We grant TAPS’s clarification request that when an employee performs a system 

impact study in response to a transmission service request, that employee is a 

transmission function employee regardless of the duration of the requested transmission 

 12 Order No. 717, FERC Stats. & Regs ¶ 31,280 at P 151.

13 Order No. 717 specifically recognized that there are employees who are neither 

transmission function employees nor marketing function employees. See, e.g., Order 

No. 717, FERC Stats. & Regs. ¶ 31,280 at P 174 (“Transmission function employees are 

no longer barred from interacting with all the employees of a marketing or energy 

affiliate (only marketing function employees)”).

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service. This clarification is consistent with our previous conclusion that the designation 

of an employee as a transmission function employee does not depend upon the duration 

of the requested transmission service.14

III. Document Availability

12. 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 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, NE., Room 2A, 

Washington, DC 20426.

13. 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.

14. 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 

 14 See Standards of Conduct for Transmission Providers, Order No. 717-A, 

74 Fed. Reg. 54,463 (Oct. 22, 2009), FERC Stats. & Regs. ¶ 31,297, at P 27 (2009).

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

public.referenceroom@ferc.gov.

IV. Effective Date

15. Changes to Order No. 717-C adopted in this order on rehearing and clarification 

are effective [insert date 30 days from publication in FEDERAL REGISTER].

By the Commission.

( S E A L )

Kimberly D. Bose,

Secretary.

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Document Content(s)

RM07-1-003.DOC........................................................1-11

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