132 FERC ¶ 61,238 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 35 

[Docket No. RM10-22-000; Order No. 739] 

Promoting a Competitive Market for Capacity Reassignment 

(Issued September 20, 2010) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule. 

SUMMARY: The Federal Energy Regulatory Commission lifts the price cap for all 

electric transmission customers reassigning transmission capacity based on the 

Commission’s experience to date and a two-year study, released April 15, 2010. The 

removal of the price cap is intended to help facilitate the development of a market for 

electric transmission capacity reassignments as a competitive alternative to transmission 

capacity acquired directly from the transmission owner. 

EFFECTIVE DATE: This rule will become effective upon publication in the Federal 

Register or at 12:00 a.m. on October 1, 2010 whichever is sooner. 

FOR FURTHER INFORMATION CONTACT: 

Laurel Hyde (Technical Information) 

Office of Energy Market Regulation 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-8146 
Docket No. RM10-22-000 - 2 - 

A. Cory Lankford (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, NE 

Washington, DC 20426 

(202) 502-6711 

SUPPLEMENTARY INFORMATION

:
132 FERC ¶ 61,238 

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. 

Promoting a Competitive Market for Capacity 

Reassignment 

Docket No. RM10-22-000 

ORDER NO. 739 

FINAL RULE 

(Issued September 20, 2010) 

Paragraph Numbers

I. Background...........................................................................................................................2.

II. Discussion ............................................................................................................................15.

A. Removal of the Price Cap ................................................................................................15.

1. Comments.....................................................................................................................15.

2. Commission Determination..........................................................................................25.

a. Removal of the Price Cap.........................................................................................25.

b. Implementation of the Requirement.........................................................................37.

B. Non-Rate Reforms to Promote Secondary Market ..........................................................39.

1. NOPR Proposal.............................................................................................................39.

2. Comments.....................................................................................................................40.

3. Commission Determination..........................................................................................43.

III. Information Collection Statement...................................................................................44.

IV. Environmental Analysis ...................................................................................................48.

V. Regulatory Flexibility Act..................................................................................................49.

VI. Document Availability ......................................................................................................50.

VII. Effective Date and Congressional Notification.............................................................53.
Docket No. RM10-22-000 - 2 - 

1. Based on the Commission’s experience to date and a two-year study, released 

April 15, 2010,1

 the Federal Energy Regulatory Commission in this Final Rule makes 

permanent the lifting of price caps for transmission customers reassigning electric 

transmission capacity. This action is intended to facilitate the development of a market 

for electric transmission capacity reassignments as a competitive alternative to primary 

transmission capacity. 

I. Background

2. In Order No. 888, the Commission concluded that a transmission provider’s 

pro forma Open Access Transmission Tariff (OATT) must permit explicitly the voluntary 

reassignment of all or part of a holder’s firm point-to-point capacity rights to any eligible 

customer.2

 The Commission also found that allowing holders of firm transmission 

capacity rights to reassign that transmission capacity would help parties manage the 

financial risks associated with their long-term commitment, reduce the market power of 

 

1

 FERC Staff, Staff Findings on Capacity Reassignment (2010), available at

http://www.ferc.gov (Staff Report). 

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, at 31,696 (1996), order on reh’g, Order No. 888-A, 62 FR 12274 

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

(2002). 
Docket No. RM10-22-000 - 3 - 

 

transmission providers by enabling customers to compete, and foster efficient 

transmission capacity allocation. 

3. With respect to the appropriate rate for transmission capacity reassignment, the 

Commission concluded it could not permit reassignments at market-based rates because it 

was unable to determine that the market for reassigned transmission capacity was 

sufficiently competitive so that resellers would not be able to exert market power. 

Instead, the Commission capped the rate at the highest of: (1) the original transmission 

rate charged to the purchaser (assignor); (2) the transmission provider’s maximum stated 

firm transmission rate in effect at the time of the reassignment; or (3) the assignor’s own 

opportunity costs capped at the cost of expansion (price cap). The Commission further 

explained that opportunity cost pricing had been permitted at “the higher of embedded 

costs or legitimate and verifiable opportunity costs, but not the sum of the two (i.e., ‘or’ 

pricing is permitted; ‘and’ pricing is not).”3

 In Order No. 888-A, the Commission 

explained that opportunity costs for transmission capacity reassigned by a customer 

should be measured in a manner analogous to that used to measure the transmission 

provider’s opportunity cost.4

4. To foster the development of a more robust secondary market for transmission 

capacity, the Commission, in Order No. 890, concluded that it was appropriate to lift the 

3

 Order No. 888, FERC Stats. & Regs. ¶ 31,036 at 31,740. 

4

 Order No. 888-A, FERC Stats. & Regs. ¶ 31,048 at 30,224. 
Docket No. RM10-22-000 - 4 - 

 

price cap for all transmission customers reassigning transmission capacity.5

 The 

Commission stated that this would allow transmission capacity to be allocated to those 

entities that value it most, thereby sending more accurate price signals to identify the 

appropriate location for construction of new transmission facilities to reduce congestion.6

 

The Commission also found that market forces, combined with the requirements of the 

pro forma OATT as modified in Order No. 890, would limit the ability of resellers, 

including affiliates of the transmission provider, to exert market power. 

5. To enhance oversight and monitoring activities, the Commission adopted reforms 

to the underlying rules governing transmission capacity reassignments.7

 First, the 

Commission required that all resales or reassignments of transmission capacity be 

conducted through or otherwise posted on the transmission provider’s OASIS on or 

before the date the reassigned service commences.8

 Second, the Commission required 

that assignees of transmission capacity execute a service agreement prior to the date on 

5 Preventing Undue Discrimination and Preference in Transmission Service, 

Order No. 890, 72 FR 12266 (March 15, 2007), FERC Stats. & Regs. ¶ 31,241, at P 808 

(2007), order on reh'g, Order No. 890-A, 73 FR 2984 (January 16, 2008), FERC Stats. & 

Regs. ¶ 31,261 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), 

order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228 (2009), order on clarification, 

Order No. 890-D, 129 FERC ¶ 61,126 (2009). 

6

 Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 808. 

7 Id. P 815. 

8 Id. 
Docket No. RM10-22-000 - 5 - 

ted 

d staff 

ts 

 and, in particular, to contact the Commission’s Enforcement Hotline if 

 cap 

 

which the reassigned service commences.9

 Third, in addition to existing OASIS posting 

requirements, the Commission required transmission providers to aggregate and 

summarize in an electric quarterly report the data contained in these service 

agreements.10 

6. The Commission also directed staff to closely monitor the reassignment-rela

data submitted by transmission providers in their quarterly reports to identify any 

problems in the development of the secondary market for transmission capacity and, in 

particular, the potential exercise of market power.11 Thus, the Commission directe

to prepare, within six months of receipt of two years of quarterly reports, a report 

summarizing its findings.12 In addition, the Commission encouraged market participan

to provide feedback regarding the development of the secondary electric transmission 

capacity market

concerns arise. 

7. In Order No. 890-A, the Commission affirmed its decision to remove the price

on reassignments of electric transmission capacity but granted rehearing to limit the 

9 Id. P 816. 

10 Id. P 817. 

11 Id. P 820. 

12 Id. 
Docket No. RM10-22-000 - 6 - 

ed 

eeded 

d section 23.1 of the pro forma OATT to reinstate the price cap as of 

ted 

et-based 

ce such transactions no longer take 

es not, 

period during which reassignments may occur above the cap.13 The period was limit

so that the Commission could review the Staff Report to see if changes were n

based on the actual operation of the reassignment program. Accordingly, the 

Commission amende

October 1, 2010.14 

8. The Commission also clarified that, as of the effective date of the reforms adop

in Order No. 890, all reassignments of electric transmission capacity must take place 

under the terms and conditions of the transmission provider’s OATT. As a result, there 

was 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 mark

rate tariff on file, the provisions of that tariff, including a price cap or reporting 

obligations, will not apply to the reassignment sin

place pursuant to the authorization of that tariff. 

9. In Order No. 890-B, the Commission clarified that the pro forma OATT do

and will not, permit the withholding of transmission capacity by the transmission 

provider and that it effectively establishes a price cap for long-term reassignments at the

transmission provider’s cost of expanding its system.15 The Commission further found

 13 Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 at P 388, 390. 

14

15

Id. P 390. 

 Order No. 890-B, 123 FERC ¶ 61,299 at P 78. 
Docket No. RM10-22-000 - 7 - 

 for 

 that do not wish to participate in 

uld focus 

d 

aff 

include in its electric quarterly report the identity of the reseller and indicate whether the 

 

that 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

service.16 The Commission pointed out that customers

the secondary market may continue to take service from the transmission provider 

directly, just as if the price cap had not been lifted.17 

10. With regard to the Staff Report, the Commission clarified that staff sho

on the competitive effects of removing the price cap for reassigned electric transmission

capacity.18 The Commission stated that 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 an

price differentials in related energy markets. In addition, the Commission directed st

to examine the nature and scope of reassignments undertaken by the transmission

provider’s affiliates and include in its report any evidence of abuse in the secondary 

market for transmission capacity, whether by those affiliates or other customers. 

11. The Commission also granted rehearing and directed each transmission provider to 

16 Id. 

17 Id. P 79. 

18 Id. P 83. 
Docket No. RM10-22-000 - 8 - 

e 

quarterly reports on 

 study 

 quarter 

reseller is affiliated with the transmission provider.19 The Commission also directed each

transmission provider to include in its electric quarterly reports the rate that would hav

been charged under its OATT had the secondary customer purchased primary service

from the transmission provider for the term of the reassignment.20 The Commission 

directed transmission providers to submit this additional data for all resales during the 

study period and to update, as necessary, any previously-filed electric 

or before the date they submitted their next electric quarterly reports. 

12. On April 15, 2010, Commission staff published its report on the two-year

period.21 The Staff Report took a comprehensive look at electric point-to-point 

transmission capacity reassignment that occurred over the period from the second

of 2007 through the fourth quarter of 2009. Staff examined all reported electric 

transmission reassignments during this period on both a national and a regional basis. 

These almost 35,000 transactions encompassed 65 TWh of total volume transferred. 

Staff looked at the data in a number of ways, in order to better understand the market and

to look for evidence of abuse. In doing so, staff looked at the magnitude and variability 

of resale prices, and focused on trends in those numbers over time and by region. Staff

 19 Id. P 84. 

20 Id. 

21 FERC Staff, Staff Finding on Capacity Reassignment (2010), available at

http://www.ferc.gov (Staff Report). 
Docket No. RM10-22-000 - 9 - 

and 

ith sufficient data, staff compared the prices of reassignments to the energy 

 in the allocation of reassigned capacity to an 

ell 

arket 

 in 

compared resale prices to the maximum tariff rates that would have otherwise been in 

effect for those transactions. Further, staff looked at reassignments by term – hourly,

daily, monthly, and yearly and looked at differences in term by transmission provider 

by volume. Where the receipt and delivery points of transactions had reported price

indices w

market spread (differential in prices between the two locations) over the same time 

periods. 

13. Staff also compared resale prices for transactions involving affiliates versus nonaffiliates. Staff compared the rate of transactions above the cap for both affiliates and 

non-affiliates. Staff looked for additional forms of affiliate abuse such as a transmission 

provider providing preferential treatment

affiliate. Staff also checked for complaints of the abuse in affiliate transactions, as w

as for capacity reassignment in general. 

14. Two weeks after the release of the Staff Report, based on the Commission’s 

experience in the natural gas transportation market and the Staff Report’s conclusion that

the secondary market had grown substantially and that resale prices reflected m

fundamentals rather than the exercise of market power, the Commission issued a Notice

of Proposed Rulemaking (NOPR) proposing to lift the price cap for all electric 

transmission customers reassigning transmission capacity beyond October 1, 2010. In 

addition, the Commission proposed to direct transmission providers to submit 

corresponding revisions to their OATTs within 30 days of publication of the Final Rule
Docket No. RM10-22-000 - 10 - 

any 

dary 

transmission capacity. In response to these NOPR proposals, the 

arties, which are addressed below.22 

II.

the Federal Register. The Commission also sought comment as to whether there are 

other reforms that it should undertake to create a more efficient and vibrant secon

market for electric 

Commission received comments from 13 p

Discussion

A. Removal of the Price Cap

1. Comments

15. Several commenters support the Commission’s proposal to remove the price cap 

on transmission reassignments permanently. They contend that removal of the cap will

encourage the development of a more robust secondary market, resulting in ap

price signals and an efficient allocation of transmission c

23

propriate 

apacity. Cargill comments that 

 that the 

rs 

 

the resale of transmission capacity at negotiated rates is consistent with other 

Commission reforms in favor of market-based pricing. 

16. Despite their general support for the Commission’s proposal, EPSA and PG&E 

raise concerns about the staff study and the need for transparency. EPSA states

Staff Report shows some gaps that will require further analysis; such as limited numbe

of transmission providers reported and the majority of transactions being from

Bonneville. PG&E expresses a lingering concern about the potential for transmission 

22 A list of commenters is provided in Appendix A. 

23 E.g. Bonneville, Cargill, EPSA, FIEG, PG&E, PGE, Powerex, Seattle. 
Docket No. RM10-22-000 - 11 - 

efore 

r 

 on 

Seattle comments that reconciliation of EQRs, audits, and 

ts 

n 

n its system 

ory 

service providers to raise power prices in locations where there is insufficient 

competition. EPSA and PG&E urge the Commission to continue to monitor the capacity 

reassignment market as it matures so that the Commission will be informed and ther

able to direct necessary reforms to the market, as the needed reforms reveal themselves. 

EPSA further urges the Commission to look at ways of increasing transparency fo

transmission capacity available for reassignments as a way of promoting the secondary 

market for reassignment. Powerex comments that there are already a number of 

safeguards including requirements that transmission providers report reassignments

their systems on OASIS and in the electronic quarterly reports (EQR) that should help 

limit abuses. Similarly, 

OASIS transactions would go a long way to ensure that resale markets are functioning 

without affiliate abuse. 

17. Bonneville agrees that lifting the price cap on transmission capacity reassignmen

appears to support the goal of a more robust secondary market for that capacity but asks

the Commission to recognize the position of non-jurisdictional entities, such as itself. 

Bonneville contends that non-jurisdictional entities may have to place conditions upo

the removal of the cap in order to obtain reciprocity and comply with their applicable 

statutory requirements. Bonneville contends that if its administrator determines that 

behavior associated with transmission capacity reassignments is occurring o

in a manner that frustrates or is otherwise inconsistent with the administrator’s statut

requirements to make all excess capacity available to utilities on a fair and 
Docket No. RM10-22-000 - 12 - 

s 

he price cap must be conditioned upon the administrator’s 

f’s 

t 

ing a 

y period by affiliates 

 

nondiscriminatory basis, the administrator must be able to act promptly to stop that 

behavior. Thus, Bonneville suggests that any revision to section 23 of Bonneville’

OATT permanently lifting t

express authority to carry out this mandate including the right to reinstate the cap 

expeditiously if necessary. 

18. Other commenters argue against removal of the price cap, contending that staf

two-year study provides insufficient evidence to support a finding that the secondary 

market is sufficiently competitive to lift the price caps or that market forces or other 

factors will be effective to adequately protect consumers.24 These commenters point ou

that, although the Final Rule would apply to an estimated 132 public utilities, the Staff 

Report included data from only 26 with 79 percent of the reported transactions coming 

from Bonneville. These commenters also point out that the study was performed dur

recession with concomitant reductions in the demand for electricity, and that Bonneville 

is atypical, given that it is dependent on large hydroelectric projects. APPA further 

comments that because there were so few sales made during the stud

above the rate cap, it would appear that reinstitution of the cap would not significantly 

dampen resales of capacity by affiliates of transmission providers. 

19. TAPS states that the staff study did not examine both prices offered and accepted 

such that the Commission could determine the level of market interest in reassigned 

24 E.g. APPA, NRECA, SCE, TAPS, Outland, and TDU Systems. 
Docket No. RM10-22-000 - 13 - 

hich 

ient evidence to lift 

ide a 

e 

e, 

national market for secondary transmission capacity rights. It questions why the Staff 

capacity, whether prices increased, the cause of price changes, and whether those prices 

remained in the zone of reasonableness. It notes that the staff study compared resale 

prices during the study period to the tariff rate, but not to the opportunity cost cap, w

is likely higher. It argues that accordingly, the study does not show that the price cap 

constrained any prices, and thus it prevents a finding that the price cap is unjust and 

unreasonable. SCE requests that the Commission reconcile its proposal with findings in 

the Staff Report that removal of the price cap does not appear to be primarily responsible 

for the observed growth in the secondary market. It also states that the Staff Report did 

not definitively conclude that there was not abuse by resellers, even in a period with very

low demand and no supply scarcity. SCE states that this is not suffic

the price cap. APPA, SCE and TAPS suggest that, if the Commission wishes to lift the 

price cap, it should only do so as a continuation of the experiment. 

20. NRECA, TAPS, and TDU Systems argue that the Staff Report does not prov

sufficient factual basis for the Commission to conclude that the OATT section 23.1, 

which reinstates the price cap on October 1, 2010, is unjust and unreasonable or to 

conclude that proposed revision is just and reasonable. Moreover, TAPS and TDU 

Systems comment that market-based reassignment of transmission capacity should not b

available to entities to the extent they lack market-based rate authority in the area in 

which the transmission reservation is located. TDU Systems states that each secondary

transmission capacity market should be looked at individually, and that there is no singl
Docket No. RM10-22-000 - 14 - 

Corporation (Central Vermont) system is 

er, 

find 

ate 

pennies and then hold up the first renewable energy generator that comes along looking 

 

Report considers Public Service of New Hampshire (PSNH) to be an aberration, while

the nearby Central Vermont Public Service

presented as representing national trends. 

21. TAPS and TDU Systems further contend that, to permit market-based rates, the 

Commission remains bound by the requirement that market-based rates be supported by

empirical proof that existing competition would ensure that the actual price is just and 

reasonable.25 TDU Systems comments that courts have held that undocumented reliance 

on market forces is insufficient grounds for authorizing market-based rates.26 Moreov

TAPS and TDU Systems argue that the Commission has a requirement to make an ex 

ante finding of the absence of market power and sufficient post-approval requirements.27 

SCE agrees that the Commission should engage in an ex ante competitive analysis to 

that the transmission reseller lacks market power, or take sufficient steps to mitig

market power, as well as adopt sufficient post-approval reporting requirements. 

22. Outland states that the pilot project has allowed resellers to acquire capacity “for 

25 Citing Farmers Union Cent. Exch., Inc. v. FERC, 734 F.2d 1486, 1510 (D.C. 

Cir. 1984)(Farmers Union). 

26 Citing Transwestern Pipeline, 43 FERC ¶ 61,240, at 61,250 (1988). 

27 Citing California ex. Rel. Lockyer v. FERC, 383 F.3d 1006, 1013 (9th Cir. 2004). 
Docket No. RM10-22-000 - 15 - 

 

to use it.”28 It states that parties acquire transmission when they do not need it for a real 

generation project, to the detriment of real projects. 

23. NRECA, TAPS, and TDU Systems urge the Commission, at a minimum, to retain 

the price cap on transmission capacity reassignments for transmission provider affiliates 

and retail/merchant functions. TAPS states that the pattern of affiliate pricing reveals 

more about corporate strategy selected by a few corporate entities and general conditions 

during an atypical period, than confirming the Commission’s assumption that the rates 

for primary capacity or competition in the reassignment market will restrain prices. It 

states that assuming that the customer may always take service from the transmission 

provider directly is cold comfort if the available capacity has been assigned to the 

transmission provider’s affiliate. NRECA states that a larger portion of affiliate than 

non-affiliate transactions occurred over the cap, and points to the PSNH system where all 

reported transactions originated with an affiliate and occurred over the price cap. 

24. In its supplemental comments, Powerex expresses concern that Bonneville might 

reinstate the price cap as of October 1, 2010, regardless of Commission action in this 

proceeding. Powerex asks the Commission to address the possible adverse consequences 

of non-jurisdictional transmission providers reinstating price caps on transmission 

reassignments and to provide guidance to customers seeking to reassign transmission on 

the systems of non-jurisdictional transmission providers that elect not to adopt any 

28 Outland at 1. 
Docket No. RM10-22-000 - 16 - 

reforms the Commission directs. To address this issue, Powerex requests the 

Commission to clarify that its seller-specific market-based rate schedule for transmission 

reassignment remains operative. Alternatively, Powerex seeks guidance on how to price 

capacity reassignments based on the customer’s opportunity cost capped at the 

transmission provider’s cost of expansion. 

2. Commission Determination

a. Removal of the Price Cap

25. The Commission hereby adopts its NOPR proposal to lift the price cap for all 

reassignments of electric transmission capacity to become effective October 1, 2010. 

Removal of the price cap will help foster the development of a more robust secondary 

market for transmission capacity because point-to-point transmission service customers 

will have increased incentives to resell their service whenever others place a higher value 

on it. Existing transmission, therefore, may be put to better, more efficient use. 

26. Moreover, removal of the price cap will promote the efficient construction of new 

capacity. Prices serve as signals indicating where capacity shortages exist and where 

potentially profitable construction can take place. The Commission has previously 

addressed the need for new transmission and established incentives for its construction.29 

Removing the price cap on sales of secondary electric transmission capacity is one way to 

 29 Promoting Transmission Investment through Pricing Reform, Order No. 679, 

71 FR 43294 (July 31, 2006), FERC Stats. & Regs. ¶ 31,222 (2006), order on reh’g, 

Order No. 679-A, 72 FR 1152 (January 10, 2007), FERC Stats. & Regs. ¶ 31,236 (2006), 

order on reh’g, 119 FERC ¶ 61,062 (2007). 
Docket No. RM10-22-000 - 17 - 

 

create the proper incentives for new transmission investment in this industry. Areas with 

congestion tend to have higher prices and thus signal the need for investment.30 

However, if prices for reassigned capacity exceed the cost of construction of new 

transmission, the customer could request service from the transmission provider which 

would support investment in new transmission and lower costs prospectively by relieving 

constrained transmission capacity. Thus, the price of reassigned capacity will remain 

effectively capped at the cost of new transmission. We therefore reaffirm the 

Commission’s finding in Order No. 890-A that removal of the price cap for reassigned 

capacity will help establish a competitive market for secondary transmission capacity that 

will send more accurate signals and that such price signals will promote more efficient 

use of the electric transmission system.31 

27. Our continued regulatory oversight will also limit the potential for the exercise of 

market power. We are not deregulating or otherwise adopting market-based rates for the 

provision of transmission service under the pro forma OATT. Transmission providers 

will continue to be obligated to offer available transfer capability to customers, including 

available transfer capability associated with purchased but unused capacity. 

Transmission providers also will continue to be obligated to construct new facilities to 

30 See Interstate Nat’l Gas Ass’n of America v. FERC ̧ 285 F.3d 18, 32-34 (D.C. 

Cir. 2002) (INGAA) (“[B]rief spikes in moments of extreme exigency are completely 

consistent with competition, reflecting scarcity rather than monopoly.”). 

31 Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 at P 388. 
Docket No. RM10-22-000 - 18 - 

 

satisfy requests for service if those requests cannot be satisfied using existing capacity. 

Furthermore, the rates for transmission service provided under the pro forma OATT will 

continue to be determined on a cost-of-service basis unless the transmission provider can 

demonstrate, on a case-specific basis, that it lacks market power. Nothing in this Final 

Rule affects the obligations of transmission providers to offer service under the pro forma

OATT at cost-based rates. The availability of firm and non-firm service from 

transmission providers, therefore, will limit the ability of reassignors to exercise market 

power. In INGAA, the Court of Appeals for the District of Columbia Circuit recognized 

that the maintenance of regulated rates for primary service would protect against the 

potential for the exercise of market power in the capacity release market. 32

28. The Commission disagrees with suggestions that affiliates of the transmission 

provider be treated differently than non-affiliated customers with respect to 

reassignments of transmission capacity. The Commission’s Standards of Conduct are 

designed to prevent the transmission provider and its affiliate from acting in concert to 

32 285 F.3d at 32 (“[i]f holders of firm capacity do not use or sell all of their 

entitlement, the pipelines are required to sell the idle capacity as interruptible service to 

any taker at no more than the maximum rate - which is still applicable to the pipelines”); 

see also, Promotion of a More Efficient Capacity Release Market, Order No. 712, 73 FR 

37058 (June 30, 2008), FERC Stats. & Regs. ¶ 31,271, at P48-49 (2008), order on reh’g, 

Order No. 712-A, FERC Stats. & Regs. ¶ 31,284 (2008). 
Docket No. RM10-22-000 - 19 - 

 

exercise market power.33 Commenters did not identify any affiliate concerns that these 

obligations, along with the monitoring discussed below, would not address. 

29. The Commission takes seriously the possibility that resellers may attempt to 

exercise market power in the secondary market for transmission. We continue to find, 

however, that the regulatory protections in place and our increased oversight of this 

market will limit the potential for market power abuse. Prices for secondary transmission 

capacity may rise above prices for primary transmission capacity but this alone does not 

indicate an abuse of market power. On the contrary, courts have recognized that prices in 

a competitive market should rise during periods when capacity is truly scarce in order to 

ensure that transmission capacity is being allocated appropriately.34 Nevertheless, the 

Commission will continue to monitor the secondary transmission capacity market to 

33 See Standards of Conduct for Transmission Providers, Order No. 717, 73 FR 

63796 (October 27, 2008), FERC Stats. & Regs. ¶ 31,280 (2008), order on reh’g, Order 

No. 717-A, 74 FR 54463 (October 22, 2009), FERC Stats. & Regs. ¶ 31,297 (2009), 

order on reh’g, Order No. 717-B, 129 FERC ¶ 61,123 (2009), order on reh’g, Order 

No. 717-C, 131 FERC ¶ 61,045 (2010). The Commission’s Standards of Conduct 

establish that a transmission provider must (1) treat all customers, affiliated and nonaffiliated, on a not unduly discriminatory basis, (2) not make or grant any undue 

preference or advantage to any person, and (3) not subject any person to any undue 

prejudice or disadvantage with respect to transmission of electric energy. This would 

include avoiding undue prejudice or disadvantage in the initial allocation of capacity to 

affiliates, thereby allowing those affiliates to gain market power and then to exercise it 

when reassigning capacity. 

34 INGAA ̧ 285 F.3d at 32-34 (“[B]rief spikes in moments of extreme exigency are 

completely consistent with competition, reflecting scarcity rather than monopoly.”). 
Docket No. RM10-22-000 - 20 - 

 

ensure that participants are not exercising market power.35 The Commission also will 

monitor for abuse by transmission providers in concert with their affiliates. If a customer 

has evidence of an exercise of market power or other abuse, it should bring the matter to 

the Commission’s attention through a complaint or other appropriate procedural 

mechanism. Absent such evidence, the Commission concludes that the continued rate 

regulation of the primary market for electric transmission capacity and the transmission 

provider’s obligation to expand its system to accommodate service requests adequately 

mitigates any market power that resellers may have in the long-term secondary market. 

30. The Staff Report did not raise any concerns with removal of the price cap that 

would warrant its reimposition given the regulatory protections and increased market 

oversight discussed above. The report included a comprehensive examination of the 

assignments that took place during the study period which included both the period prior 

to the economic downturn starting in September 2008 and the period after the downturn. 

Although the Staff Report did not conclusively demonstrate that the price cap inhibited 

the growth of the secondary market, the data showed a marked growth in reassignments, 

with both the number of transactions and the volume increasing during the two and one 

half year time span. The number of reassignments grew from just over 200 in 2007 to 

almost 32,000 in 2009. During this same period, the volume reassigned grew from 

3 TWh to 36 TWh. 

35 See Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 815. 
Docket No. RM10-22-000 - 21 - 

 

31. The data do not suggest the exercise of market power. The prices during the test 

period appear consistent with pricing differentials between locational markets, indicating 

that the transactions reflect market fundamentals, not the exercise of market power.36 

Moreover, the Staff Report found that 99 percent of reassignments were priced at or 

below the transmission provider’s maximum firm transmission rate, an indication that 

prices reflect market conditions and competition rather than the exercise of market 

power.37 The brief spikes above the price cap are consistent with a competitive market, 

indicating scarcity rather than market power.38 

32. We disagree with comments suggesting that the Staff Report does not provide 

enough evidence to support a finding that the market is sufficiently competitive to lift the 

price cap because it relied on data from a limited number of transmission providers. 

While capacity reassignments occurred on a limited number of transmission systems, the 

lack of data for other transmission providers indicates a lack of reassignments on those 

systems, not an exercise of market power or lack of potential competition for capacity 

reassignment. Where reassignment is currently non-existent or occurring at a lower level, 

36 See INGAA, 285 F.3d at 31 (indicating that differentials in prices between 

receipt and delivery points are indicative of the value of the transportation between those 

points). 

37 Because 99 percent of the prices were below the tariff rate, these prices are 

almost certainly lower than opportunity costs which TAPS suggests are likely higher than 

the tariff rate. 

38 INGAA, 285 F.3d 18, 32 (“A surge in the price of candles during a power outage 

is no evidence of monopoly in the candle market”). 
Docket No. RM10-22-000 - 22 - 

 

potential reassignment of transmission in these areas, should it develop, would face 

competition associated with transmission that can be acquired from other customers. 

Such reassignment also would compete with capacity available from the transmission 

provider. Although the data in the Staff Report included extensive data from Bonneville 

and Central Vermont, the greater number of such assignments may be due to differences 

in market dynamics (such as the extensive use of hydroelectric power in the Bonneville 

region) or reporting conventions (in the case of Central Vermont).39 It also may indicate 

that capacity reassignment is more developed in those areas. The volume of capacity 

reassignments on these two systems provides an example of what may be possible in 

other areas of the country. As for arguments that the time period under review was 

atypical due to the economic downturn and, thus, not representative, we note that study 

began the second quarter of 2007, well before the downturn began. 

33. The Staff Report also did not show evidence of affiliate abuse. Ninety-nine 

percent of reassignments by affiliates of the transmission provider were at or below the 

transmission provider’s maximum rate. The percentage of such reassignments over the 

maximum firm transmission rate by affiliates was comparable to that by non-affiliates 

(0.5 percent versus 0.4 percent). 

39 The Staff Report states that “the large number of [Central Vermont] transactions 

may be due, in part, to reporting conventions. For EQR reporting purposes, each line of 

data is counted as one transaction.” See Staff Report at 4. 
Docket No. RM10-22-000 - 23 - 

 

34. While it is true, as some of the commenters point out, that the reassignment 

transactions were limited to certain areas and utilities, we see no reason to expect 

different results as capacity reassignment expands. There have not been allegations of 

the exercise of market power in reassignment markets, and commenters do not provide 

any data to suggest that market power may be more prevalent as capacity reassignment 

increases on other transmission systems. Development of a more robust reassignment 

market in areas where reassignments are not prevalent should raise, rather than lower, the 

level of competition in markets. Moreover, we will continue to monitor the market and if 

anomalies develop in certain areas, they can be addressed. 

35. We disagree with the comments that a market power study or other empirical 

competition analyses are required to lift the price cap on transmission capacity 

reassignments. Contrary to commenters’ assertions, market power analyses are not the 

only method to ensure that market-based rates remain just and reasonable.40 In INGAA,

41 

the D.C. Circuit affirmed the Commission’s removal of price ceilings for short-term 

40 See Alternatives to Traditional Cost-of-Service Ratemaking for Natural Gas 

Pipelines and Regulation of Negotiated Transportation Services of Natural Gas 

Pipelines, 74 FERC ¶ 61,076, at 61,227-36 (1996). The Commission ultimately 

determined in that case that a market power analysis was required in order to allow a 

pipeline to use market-based pricing instead of cost-of-service rates. The Commission 

has not proposed to allow transmission providers to engage in sales of primary capacity at 

market-based rates and, as explained below, sufficient protections exist to ensure the 

secondary market for transmission capacity remains sufficiently competitive without 

requiring market power analyses from each reseller. 

41 Interstate Nat’l Gas Ass’n of American v. FERC, 285 F.3d at 33 (D.C. Cir. 

2002). 
Docket No. RM10-22-000 - 24 - 

 

capacity releases by shippers in the natural gas market without requiring sellers to submit 

market power analyses. The court recognized that non-cost factors such as the need to 

facilitate movement of capacity into the hands of those who value it most may also justify 

the removal of price ceilings. The court concluded that these non-cost factors, combined 

with the limitation of negotiated rates to the secondary market, distinguished the case from 

Farmers Union in which the court had reversed a Commission determination to implement 

lighthanded regulation of the oil industry.42 

36. Farmers Union itself did not require a market power study to support a move to a 

more market-based regulatory regime. The court found that rates should be within a “zone 

of reasonableness, where [they] are neither less than compensatory nor excessive.”43 

Moreover, the court found that the Commission could justify a move to a more marketbased focus “by a showing that under circumstances the goals and purposes of [the 

Commission’s statutory mandate] will be accomplished through substantially less 

regulatory oversight.”44 Here, the Commission is relying on competition in the market for 

transmission capacity, together with the regulatory protections discussed above, to ensure 

just and reasonable rates. Protections, such as continuing rate regulation of the 

42 Interstate Nat’l Gas Ass’n of America v. FERC, 285 F.3d 18 at 31-34 (D.C. Cir. 

2002), order on remand, 101 FERC ¶ 61,127 (2002), order on reh’g, 106 FERC ¶ 61,088 

(2004), aff’d sub nom. American Gas Ass’n v. FERC, 428 F.3d 255 (D.C. Cir. 2005).

43 Farmers Union, 734 F.2d at 1502; see also, INGAA, 285 F.3d at 31. 

44 Farmers Union, 734 F.2d at 1510. 
Docket No. RM10-22-000 - 25 - 

transmission provider’s primary capacity, retention of the requirement for transmission 

owners to build additional capacity at cost-based rates, competition among resellers, 

reforms to the secondary market for transmission capacity, and reporting requirements 

combined with enforcement proceedings, audits, and other regulatory controls, will assure 

that prices in the secondary market for electric transmission capacity remain within a zone 

of reasonableness.45

b. Implementation of the Requirement

37. Because the current OATTs reinstate the price cap as of October 1, 2010, 

transmission providers will need to revise section 23 of the pro forma OATT, as 

indicated in Appendix B. We direct transmission providers to file these changes within 

30 days from publication of this Final Rule in the Federal Register. Bonneville requests 

a blanket waiver of the requirement for non-jurisdictional entities that are unable to 

satisfy reciprocity conditions with regard to the reassignment of transmission capacity. 

Whether the particular terms and conditions of a non-jurisdictional transmission 

provider’s reciprocity tariff satisfy the Commission’s open access principles must be 

determined on a case-by-case basis. Therefore, the Commission denies, without 

prejudice, Bonneville’s request for a blanket waiver. 

 45 See Order No. 890, FERC Stats. & Regs. ¶ 31,241 at P 811; see also Order 

No. 712, 73 FR 37058 (June 30, 2008), FERC Stats. & Regs. ¶ 31,271 at P 39 (2008), 

order on reh’g, Order No. 712-A, FERC Stats. & Regs. ¶ 31,284 (2008), aff’d sub nom.

Interstate Natural Gas Ass’n of America, No. 09-1016 (D.C. Cir. Aug. 13, 2010). 
Docket No. RM10-22-000 - 26 - 

38. We find Powerex’s concern that Bonneville will reinstate the price cap as of 

October 1, 2010 to be premature, since Bonneville has not made a final decision at this 

point. Moreover, when Bonneville submitted its tariff revisions pursuant to Order No. 

890, it declined to adopt certain pro forma provisions related to the reassignment of 

transmission capacity and several transmission customers within Bonneville, including 

Powerex, filed stand-alone rate schedules allowing them to sell transmission capacity 

above the price cap.46 These customers may submit any necessary revisions to their rate 

schedules before October 1, 2010 and request waiver of the prior notice requirement, if 

they find such action to be necessary and appropriate. 

B. Non-Rate Reforms to Promote Secondary Market

1. NOPR Proposal

39. In the NOPR, the Commission sought comment as to whether there are any 

reforms, other than removal of the price cap, that it should undertake to create a more 

efficient and vibrant secondary market for transmission capacity. The Commission asked 

if there are non-price limitations or regional factors that may be continuing to limit the 

utility of reassignment. By way of an example, the Commission asked if there are 

 46 See Portland General Electric Co., Docket No. ER09-93-000 (Dec. 3, 2008) 

(unpublished letter order); Idaho Power Co., Docket No. ER09-524-000 (Mar. 5, 2009) 

(unpublished letter order); Puget Sound Energy, Inc., Docket No. ER09-528-000 (Mar. 5, 

2009) (unpublished letter order); Avista Corp., ER09-729-000 (May 12, 2009) 

(unpublished letter order); PacifiCorp, Docket No. ER09-921-001 (Sept. 29, 2009) 

(unpublished letter order); Powerex Corp., Docket No. ER09-926-000 (May 21, 2009) 

(unpublished letter order). 
Docket No. RM10-22-000 - 27 - 

reforms to the redirect process that would enable all firm customers to use their firm 

capacity more flexibly and thereby facilitate capacity reassignment by making point 

changes by the buyer of reassigned capacity more efficient. 

2. Comments

40. Although FIEG supports the Commission’s proposal to allow redirects of 

reassigned capacity, several other commenters raise concerns. Powerex admits that the 

ability to modify receipt and delivery points of reassigned capacity may make the 

capacity more attractive to a potential third-party assignee but warns that this practice 

would erode the priority that firm capacity should be accorded. NRECA expresses 

similar concern that this proposal may give higher priority to point-to-point customers 

who wish to redirect by awarding them service over those non-firm customers who do not 

redirect and over secondary network customers. APPA contends that any reforms to firm 

point-to-point service proposed to increase the attractiveness of re-sales of firm point-topoint capacity would have to be carefully assessed to ensure that they do not result in a 

degradation of the quality of network integration transmission service. TAPS and TDU 

Systems urge the Commission to not use a narrowly focused rulemaking to implement a 

sweeping change to point-to-point transmission service. 

41. Commenters offered suggestions about various other reforms as well. Bonneville 

and Seattle argue that requiring transmission providers to act as financial intermediaries 

in capacity reassignments imposes an undue burden and complicates settlements. 

Powerex and Bonneville raise concerns about transmission providers failing to 
Docket No. RM10-22-000 - 28 - 

recalculate available transfer capability or available flowgate capability in a timely 

manner, thereby inhibiting reassignments. Bonneville recommends that a firm redirect 

request receive a credit for any available flowgate capability the parent reservation has on 

the flowgates impacted by the firm redirect request. TAPS suggests that the Commission 

require the posting of transmission capacity available for reassignment on the 

transmission provider’s OASIS. Cargill recommends that the reseller not remain 

responsible or liable to the transmission provider for the reassigned capacity if it is a 

complete reassignment (the full quantity of capacity for the remainder of the reservation) 

or if the reseller performs a long-term assignment of the reservation for any quantity up 

to the full amount of the capacity of the reservation. 

42. Seattle advocates a transition from comma separated data to structured XML data 

in order to enhance data exchange and validation between “front-end” and “back-end 

systems” used by transmission customers and providers. It also advocates more 

meaningful forms of transaction umbrella agreements, such as the WSPP agreement. 

EPSA advocates consistent rules about posting the entities and market participants that 

have active umbrella agreements with the transmission provider. It says that such 

postings would give competitive suppliers transparency about which market participants 

can purchase reassigned capacity. 

3. Commission Determination

43. The Commission declines to implement the non-rate reforms proposed in this 

proceeding at this time. Although some of these proposals may have merit, we are 
Docket No. RM10-22-000 - 29 - 

unable to make a determination that they are appropriate at this time based on the record 

in this proceeding. With respect to the issues raised by Seattle and EPSA regarding data 

structures, such issues are best addressed through the standards development process of 

the North American Energy Standards Board, which sets voluntary wholesale electric 

market standards including those related to data exchanges and posting requirements. 

III. Information Collection Statement

44. The following collection of information contained in this proposed rule is subject 

to review by the Office of Management and Budget (OMB) under section 3507(d) of the 

Paperwork Reduction Act of 1995.47 OMB’s regulations require OMB to approve certain 

information collection requirements imposed by agency rule.48

Burden Estimate: The public reporting and records retention burdens for the reporting 

requirements and the records retention requirement are as follows.49 The Commission 

solicited comments on the need for this information and did not receive any specific 

comments regarding its burden estimates. Where commenters raised concerns that 

specific information collection requirements would be burdensome to implement, the 

Commission has addressed those concerns elsewhere in the rule. 

 47 44 U.S.C. § 3507(d) (2006). 

48 5 C.F.R. § 1320.11 (2010). 

49 These burden estimates apply only to this Final Rule and do not reflect upon all 

of FERC-516 or FERC-717. 
Docket No. RM10-22-000 - 30 - 

Data 

Collection 

Number of 

Respondents 

Number of 

Responses 

Hours per 

Response 

Total Annual 

Hours 

Conforming 

tariff changes 

132 1 10 1,320

Cost to Comply: $150,480 

1,320 hours @ $114 an hour (average cost of attorney ($200 per hour), 

consultant ($150), technical ($80), and administrative support ($25)) 

OMB’s regulations require it to approve certain information collection requirements 

imposed by an agency rule. The Commission is submitting a copy of this Final Rule to 

OMB for their review approval of the information collection requirements. 

Title: FERC-516, Electric Rate Schedules and Tariff Filings; 

FERC-717 Standards for Business Practices and Communication Protocols for Public 

Utilities. 

Action: Collection 

OMB Control Nos. 1902-0096 and 1902-0173 

Respondents: Transmission Providers 

Frequency of responses: One time. 

Necessity of the Information: 

45. The Federal Energy Regulatory Commission is adopting amendments to the 

pro forma OATT to ensure that transmission services are provided on a basis that is just, 

reasonable and not unduly discriminatory or preferential. The purpose of this rulemaking 

is to strengthen the pro forma OATT by encouraging more robust competition. The Final 
Docket No. RM10-22-000 - 31 - 

Rule achieves this goal by removing the price cap previously imposed on reassignments 

of transmission capacity. 

46. Interested persons may obtain information on the reporting requirements by 

contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE, 

Washington, DC 20426, [Attention: Michael Miller, Office of the Executive Director, 

Phone: (202) 502-8415, fax: (202) 273-0873, e-mail: michael.miller@ferc.gov.] 

47. For submitting comments concerning the collections of information and the 

associated burden estimate(s), please send your comments to the contact listed above and 

to the Office of Information and Regulatory Affairs, Office of Management and Budget, 

725 17th Street, NW, Washington, DC 20503 [Attention: Desk Officer for the Federal 

Energy Regulatory Commission, phone: (202) 395-4638, fax: (202) 395-7285. Due to 

security concerns, comments should be sent electronically to the following e-mail 

address: oira_submission@omb.eop.gov. Please reference the docket number of this 

rulemaking in your submission. 

IV. Environmental Analysis

48. The Commission is required to prepare an Environmental Assessment or an 

Environmental Impact Statement for any action that may have a significant adverse effect 

on the human environment.50 The Commission concludes that neither an Environmental 

 50 Regulations Implementing the National Environmental Policy Act, Order 

No. 486, 52 FR 47897 (December 17, 1987), FERC Stats. & Regs., Regulations 

Preambles 1986-1990 ¶ 30,783 (1987). 
Docket No. RM10-22-000 - 32 - 

Assessment nor an Environmental Impact Statement is required for this Final Rule under 

section 380.4(a)(15) of the Commission’s regulations, which provides a categorical 

exemption for approval of actions under sections 205 and 206 of the Federal Power Act 

(FPA) relating to the filing of schedules containing all rates and charges for the 

transmission or sale subject to the Commission’s jurisdiction, plus the classification, 

practices, contracts and regulations that affect rates, charges, classifications and 

services.51

V. Regulatory Flexibility Act

49. The Regulatory Flexibility Act of 1980 (RFA)52 generally requires a description 

and analysis of Final Rules that will have significant economic impact on a substantial 

number of small entities. This Final Rule applies to public utilities that own, control, or 

operate interstate transmission facilities, not to electric utilities per se. The total number 

of public utilities that, absent waiver, would have to modify their current OATTs by 

filing the revised pro forma OATT is 176.53 Of these only six public utilities, or less than 

two percent, dispose of four million MWh or less per year.54 The Commission does not 

consider this a substantial number, and in any event, these small entities may seek waiver 

 51 18 CFR § 380.4(a)(15) (2010). 

52 5 U.S.C. § 601-612 (2006). 

53 The sources for this figure are FERC Form No. 1 and FERC Form No. 1-F data. 

54 Id. 
Docket No. RM10-22-000 - 33 - 

of these requirements.55 Moreover, the criteria for waiver that would be applied under 

this rulemaking for small entities is unchanged from that used to evaluate requests for 

waiver under Order Nos. 888 and 889. Thus, small entities who have received waiver of 

the requirements to have on file an open access tariff or to operate an OASIS would be 

unaffected by the requirements of this proposed rulemaking. 

VI. Document Availability

50. 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. 

 55 The Regulatory Flexibility Act defines a "small entity" as "one which is 

independently owned and operated and which is not dominant in its field of operation." 

See 5 U.S.C. 601(3) and 601(6)(2000); 15 U.S.C. 632(a)(1) (2000). In Mid-Tex Elec. 

Coop. v. FERC, 773 F.2d 327, 340-343 (D.C. Cir. 1985), the court accepted the 

Commission's conclusion that, since virtually all of the public utilities that it regulates do 

not fall within the meaning of the term "small entities" as defined in the Regulatory 

Flexibility Act, the Commission did not need to prepare a regulatory flexibility analysis 

in connection with its proposed rule governing the allocation of costs for construction 

work in progress (CWIP). The CWIP rules applied to all public utilities. The revised 

pro forma OATT will apply only to those public utilities that own, control or operate 

interstate transmission facilities. These entities are a subset of the group of public 

utilities found not to require preparation of a regulatory flexibility analysis for the CWIP 

rule. 
Docket No. RM10-22-000 - 34 - 

51. 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. 

52. 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. 

VII. Effective Date and Congressional Notification

53. These regulations shall become effective upon publication in the Federal Register

or at 12:00am on October 1, 2010, whichever is sooner. Section 553(d) of the 

Administrative Procedure Act (APA) generally requires a rule to be effective not less 

than 30 days after publication in the Federal Register unless, inter alia, the rule relieves a 

restriction or good cause is otherwise found to shorten the time period.56 Section 

553(b)B) of the APA authorizes agencies to dispense with certain procedures when the 

agency, for good cause, finds that those procedures are “impracticable, unnecessary, or 

 56 5 U.S.C. § 553(d) (2006). 
Docket No. RM10-22-000 - 35 - 

contrary to public interest.”57 For the following reasons the Commission is using the 

“Good Cause” exemption. This Final Rule must become effective by 12:00 a.m. on 

October 1, 2010 or the price cap on reassignments of electric transmission capacity will 

be reinstated. Reinstating the price cap would impose a restriction on the rights of 

transmission customers. Thus, this Final Rule relieves a restriction. Furthermore, the 

Commission finds that good cause exists to make this Final Rule effective immediately 

because allowing the price cap to be reinstated temporarily could disrupt the efficient 

management of the secondary market for electric transmission capacity and reduce 

opportunities for further reduction of transmission congestion. 

54. The Commission has determined, with the concurrence of the Administrator of the 

Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” 

as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 

1996. 

List of subjects in 18 CFR Part 35 

By the Commission. 

( S E A L ) 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

 57 5 U.S.C. § 553(b)(B) (2006). 
Docket No. RM10-22-000 - 36 - 

Appendix A

List of Commenters 

Commenter Name Abbreviation 

American Public Power Association APPA 

Bonneville Power Administration Bonneville 

Cargill Power Markets, LLC Cargill 

Electric Power Supply Association EPSA 

Financial Institutions Energy Group FIEG 

National Rural Electric Cooperative 

Association 

NRECA 

Outland Renewable Energy LLC Outland 

Pacific Gas & Electric Co. PG&E 

Portland General Electric Co. PGE 

Powerex Corp. Powerex 

Southern California Edison Co. SCE 

Seattle City Light Seattle 

Transmission Access Policy Study Group TAPS 

Transmission Dependent Utility Systems TDU Systems 
Appendix B

RM05-17-001, -002 & RM05-25-001, -002 

(Issued) 

PRO FORMA OPEN ACCESS 

TRANSMISSION TARIFF 

23 Sale or Assignment of Transmission Service 

23.1 Procedures for Assignment or Transfer of Service: 

(a) Subject to Commission approval of any necessary filings, aA

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, cCompensation to Resellers shall be at rates established by 

agreement between the Reseller and the Assignee. 

(b) 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 
Docket No. RM10-22-000 - 2 - 

charge the Reseller, as appropriate, at the rate stated in the Reseller’s Service 

Agreement with the Transmission Provider or the associated OASIS schedule 

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.