Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64715

263The OMB control number for this collection of

information is 1902–0096.

1APPA filed its request for rehearing out-of-time

on April 4, 1997. As discussed in Order No. 888–

B, the Commission is accepting this pleading as a

motion for reconsideration.

2CNG Energy Services Corp., Coastal Electric

Services Company, Destec Power Services, Inc.,

Enron Power Marketing, Inc., Koch Energy Trading,

Inc., NorAm Energy Services, Inc., and Vitol Gas &

Electric Services, Inc.

3 General Public Utilities Corp., Illinois Power

Co., Long Island Lighting Co., and New York State

Electric & Gas Corp.

4EEI filed its request for rehearing out-of-time on

April 4, 1997. As discussed in Order No.888–B, the

Commission is accepting this pleading as a motion

for reconsideration.

5 Independent Power Producers of New York, Inc.

(NY IPPs) filed an answer on April 11, 1997.

6 Granite State Hydropower Association filed an

answer on April 21, 1997.

7Formerly Puget Sound Power & Light Company.

8American Municipal Power-Ohio, Inc., Illinois

Municipal Electric Agency, Indiana Municipal

Power Agency, Littleton Electric Light Department,

Massachusetts Municipal Wholesale Electric

Company, Michigan Public Power Agency,

Municipal Energy Agency of Mississippi, Municipal

Energy Agency of Nebraska, New Hampshire

Electric Cooperative, Inc., Northern California

Power Agency, Virginia Municipal Electric

Association No. 1, on behalf of itself and its

members (City of Franklin, City of Manassas,

Harrisonburg Electric Commission, Town of

Blackstone, Town of Culpepper, Town of Elkton,

and Town of Wakefield), and Wisconsin Public

Power, Inc. The operating companies of the

American Electric Power System (AEP) filed an

answer on April 17, 1997.

9Arkansas Electric Cooperative Corporation,

Golden Spread Electric Cooperative, Inc., Holy

Cross Electric Association, Kansas Electric Power

Cooperative, Inc., Magic Valley Electric

Cooperative, Inc., Mid-Tex Generation and

Transmission Electric Cooperative, Inc., North

Carolina Electric Membership Corporation,

Oklahoma Municipal Power Authority, Old

Dominion Electric Membership Corporation, and

Seminole Electric Cooperative, Inc.

Order No. 888–A, the Commission

addressed requests for rehearing that

questioned this certification and that the

final rule would not impose a

significant economic impact on a

substantial number of small entities. No

rehearing requests of Order No. 888–A

were filed on this issue and the

Commission finds no reason to alter its

previous findings on this issue.

VII. Information Collection Statement

Order No. 888 contained an

information collection statement for

which the Commission obtained

approval from the Office of Management

and Budget (OMB). 263 Given that this

order on rehearing makes only minor

revisions to Order Nos. 888 and 888–A,

none of which is substantive, OMB

approval for this order will not be

necessary. However, the Commission

will send a copy of this order to OMB,

for informational purposes only.

The information reporting

requirements under this order are

virtually unchanged from those

contained in Order Nos. 888 and 888–

A. Interested persons may obtain

information on the reporting

requirements by contacting the Federal

Energy Regulatory Commission, 888

First Street, N.E., Washington, D.C.

20426 [Attention: Michael Miller,

Information Services Division, (202)

208–1415], and the Office of

Management and Budget [Attention:

Desk Officer for the Federal Energy

Regulatory Commission, (202) 395–

3087].

VIII. Effective Date

The tariff change to Order Nos. 888

and 888–A made in this order on

rehearing (see footnote 1) will become

effective on February 9, 1998. The

current requirements of Order Nos. 888

and 888–A will remain in effect until

this order becomes effective.

By the Commission.

Lois D. Cashell,

Secretary.

Note: The following Appendices will not

appear in the Code of Federal Regulations.

Appendix A—Order No. 888–B: List of

Petitioners

1. American Public Power Association,

Colorado Association of Municipal

Utilities, Municipal Electric Systems of

Oklahoma, and Utah Associated Municipal

Power Systems (APPA) 1

2. Bonneville Power Administration (BPA)

3. Arizona Public Service Company (Arizona)

4. Boston Edison Company, Central Vermont

Public Service Corporation, Florida Power

Corporation, Montaup Electric Company,

and Wisconsin Public Service Corporation

(Boston Edison)

5. Coalition for a Competitive Electric Market

(CCEM) 2

6. Central Maine Power Company (Central

Maine)

7. Coalition for Economic Competition

(Coalition for Economic Competition) 3

8. Colorado Association of Municipal

Utilities (CAMU)

9. Dairyland Power Cooperative (Dairyland)

10. Edison Electric Institute (EEI) 4

11. Illinois Commerce Commission (IL Com)

12. Kansas City Power & Light Company

(KCPL)

13. Metropolitan Edison Company (Met Ed)

14. National Association of Regulatory Utility

Commissioners (NARUC)

15. National Rural Electric Cooperative

Association (NRECA)

16. New England Power Pool Executive

Committee (NEPOOL)

17. Public Service Commission of the State

of New York (NY Com) 5

18. Niagara Mohawk Power Corporation and

PURPA Reform Group (NIMO) 6

19. Otter Tail Power Company (Otter Tail)

20. Puget Sound Energy, Inc. (Puget) 7

21. Rural Utilities Service, USDA (RUS)

22. Port of Seattle (Port of Seattle)

23. Soyland Power Cooperative, Inc.

(Soyland)

24. Transmission Access Policy Study Group

and certain of its Members (TAPS) 8

25. Transmission Dependent Utility Systems

(TDU Systems) 9

(Name of Transmission Provider) Open

Access Transmission Tariff Original Sheet

No.

Revision to Pro Forma Open Access

Transmission Tariff Pursuant to Order No.

888–B

Appendix B

29.1 Condition Precedent for Receiving

Service: Subject to the terms and conditions

of Part III of the Tariff, the Transmission

Provider will provide Network Integration

Transmission Service to any Eligible

Customer, provided that: (i) The Eligible

Customer completes an Application for

service as provided under Part III of the

Tariff, (ii) the Eligible Customer and the

Transmission Provider complete the

technical arrangements set forth in Sections

29.3 and 29.4, (iii) the Eligible Customer

executes a Service Agreement pursuant to

Attachment F for service under Part III of the

Tariff or requests in writing that the

Transmission Provider file a proposed

unexecuted Service Agreement with the

Commission, and (iv) the Eligible Customer

executes a Network Operating Agreement

with the Transmission Provider pursuant to

Attachment G, or requests in writing that the

Transmission Provider file a proposed

unexecuted Network Operating Agreement.

[FR Doc. 97–31841 Filed 12–8–97; 8:45 am]

BILLING CODE 6717–01–P

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

18 CFR Part 37

[Docket No. RM95–9–002; Order No. 889–

B]

Open Access Same-Time Information

System and Standards of Conduct

Issued November 25, 1997.

AGENCY: Federal Energy Regulatory

Commission.

ACTION: Final order; order denying

rehearing.

SUMMARY: The Federal Energy

Regulatory Commission is denying the

requests for rehearing of its order on

rehearing of the final rule in this

proceeding. The final rule required

public utilities that own, control, or

operate facilities used for the

transmission of electric energy in

interstate commerce to create or

participate in an Open Access SameTime Information System (OASIS) in

conformance with Commission

regulations. The final rule also required
64716 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

1Open Access Same-Time Information System

and Standards of Conduct, Final Rule, Order No.

889, FERC Stats. & Regs. ¶ 31,035, 61 FR 21737

(May 10, 1996), Order on Reh’g, Order No. 889–A,

FERC Stats. & Regs. ¶ 31,049, 62 FR 12484 (March

14, 1997).

2Promoting Wholesale Competition Through

Open Access Non-Discriminatory Transmission

Services by Public Utilities; Recovery of Stranded

Costs by Public Utilities and Transmitting Utilities,

Final Rule, Order No. 888, FERC Stats. & Regs. ¶

31,036, 61 FR 21540 (May 10, 1996), Order on

Reh’g, Order No. 888–A, FERC Stats. & Regs. ¶

31,048, 62 FR 12274 (March 14, 1997).

those public utilities to implement

standards of conduct to functionally

separate transmission and wholesale

merchant functions. The order on

rehearing made minor revisions to the

final rule and implemented a revised

transmission discounting policy. This

order denies the requests for rehearing

filed by six interested persons in

response to the order on rehearing of the

final rule.

EFFECTIVE DATE: November 25, 1997.

FOR FURTHER INFORMATION CONTACT:

Marvin Rosenberg (Technical

Information), Office of Economic

Policy, Federal Energy Regulatory

Commission, 888 First Street, N.E.,

Washington, DC 20426, (202) 208–

1283.

William C. Booth (Technical

Information), Office of Electric Power

Regulation, Federal Energy Regulatory

Commission, 888 First Street, N.E.,

Washington, DC 20426, (202) 208–

0849.

Gary D. Cohen (Legal Information),

Office of the General Counsel, Federal

Energy Regulatory Commission, 888

First Street, N.E., Washington, DC

20426, (202) 208–0321.

SUPPLEMENTARY INFORMATION: In

addition to publishing the full text of

this document in the Federal Register,

the Commission also provides all

interested persons an opportunity to

inspect or copy the contents of this

document during normal business hours

in the Public Reference Room at 888

First Street, N.E., Washington, D.C.

20426.

The Commission Issuance Posting

System (CIPS), an electronic bulletin

board service, provides access to the

texts of formal documents issued by the

Commission. CIPS is available at no

charge to the user. CIPS can be accessed

over the Internet by pointing your

browser to the URL address: http://

www.ferc.fed.us. Select the link to CIPS.

The full text of this document can be

viewed, and saved, in ASCII format and

an entire day’s documents can be

downloaded in WordPerfect 6.1 format

by searching the miscellaneous file for

the last seven days. CIPS also may be

accessed using a personal computer

with a modem by dialing 202–208–

1397, if dialing locally, or 1–800–856–

3920, if dialing long distance. To access

CIPS, set your communications software

to 19200, 14400, 12000, 9600, 7200,

4800, 2400, or 1200 bps, full duplex, no

parity, 8 data bits and 1 stop bit. The

full text of this order will be available

on CIPS in ASCII and WordPerfect 6.1

format. CIPS user assistance is available

at 202–208–2474.

The complete text on diskette in

WordPerfect format may be purchased

from the Commission’s copy contractor,

La Dorn Systems Corporation. La Dorn

Systems Corporation is located in the

Public Reference Room at 888 First

Street, N.E., Washington, D.C. 20426.

Before Commissioners: James J. Hoecker,

Chairman; Vicky A. Bailey, and William L.

Massey.

Order Denying Rehearing of Order No.

889–A

Issued November 25, 1997.

I. Introduction

In this order, we deny the requests for

rehearing of Order No. 889–A, our order

on rehearing of Order No. 889.1

II. Background

In Order No. 889–A, the Commission

addressed over 40 requests for rehearing

of Order No. 889 and affirmed the major

findings made therein. We did,

however, make certain minor revisions

to fine-tune the regulations at 18 CFR

Part 37 and to implement a revised

transmission discounting policy that we

adopted and described in detail in

Order No. 888–A, our order on

rehearing of Order No. 888.2

The revised transmission discounting

policy necessitated a number of changes

to the Standards of Conduct and to the

Open Access Same-Time Information

(OASIS) posting requirements in 18 CFR

Part 37. These were:

(1) Deleting §§ 37.4(b)(5)(v) and

37.4(b)(5)(vi);

(2) Adding a provision at § 37.6(c)(3)

to require, among other things, that any

offer of a discount for basic transmission

service must be announced to all

potential customers solely by posting on

the OASIS;

(3) Revising § 37.6(c)(4) to no longer

treat the posting of transmission service

transactions involving the Transmission

Provider’s (or any affiliate’s) generation

merchant function any differently from

the posting of transactions involving

non-affiliates except that transactions

involving the Transmission Provider’s

wholesale merchant function or

affiliates must be identified;

(4) Adding a provision at § 37.6(d)(2)

to require, among other things, that any

offer of a discount for ancillary service

provided by the Transmission Provider

in support of its provision of basic

transmission service must be announced

to all potential customers solely by

posting on the OASIS;

(5) Revising § 37.6(d)(3) on ancillary

services to be consistent with our

revision to § 37.6(c)(4);

(6) Revising § 37.6(e)(1)(I) to require

that, except for next-hour service,

requests for transmission and ancillary

service must be posted prior to the

Transmission Provider responding to

these requests;

(7) Adding a provision, at

§ 37.6(e)(1)(ii), that during Phase I,

while requests for next-hour service

need to be posted on the OASIS as soon

as possible and in any event within one

hour of receiving the request, they need

not be posted on the OASIS prior to

being acted on;

(8) Adding a provision, at

§ 37.6(e)(1)(iii), that provides that in the

event that a discount is being requested

for ancillary services that are not in

support of the Transmission Provider’s

provision of basic transmission service,

such a request need not be posted on the

OASIS;

(9) Expanding, in § 37.6(e)(1)(iv), the

information required to be posted on the

status of requests for transmission and

ancillary service; and

(10) Deleting the provision, formerly

found in § 37.6(e)(1)(iii) and the revised

§ 37.6(e)(3)(I), to disallow masking the

identity of parties to transactions.

We also made nine minor revisions in

Order No. 889–A to the regulations in

18 CFR Part 37 that were unrelated to

our revised transmission discounting

policy. These were:

(1) Amending the definition of

‘‘wholesale merchant function’’ in

§ 37.3(e);

(2) Amending §§ 37.4(b)(5)(iii) and

37.6(g)(4) to require Transmission

Providers to post on the OASIS the

information that they already were

required to keep, detailing the

circumstances and manner in which

they exercise their discretion under any

terms of the tariff;

(3) Substituting the phrase ‘‘sales

made to any person for resale made by

the wholesale merchant function or any

affiliate’’ for the phrase ‘‘wholesale

purchases or sales made on behalf of its

own power customers, or those of an

affiliate’’ in § 37.4(b)(5)(iv), to be

consistent with the revised definition of

‘‘wholesale merchant function’’;

(4) Amending § 37.6(b)(1) to clarify

the meaning of the term
Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64717

3Requests for rehearing of Order No. 889–A were

filed by Coalition for a Competitive Electric Market

(CCEM), National Rural Electric Cooperative

Association (NRECA), Transmission Access Policy

Study Group (TAPS), and Transmission Dependent

Utility Systems (TDU Systems). In addition,

requests for rehearing of Order No. 889–A

nominally were filed by Puget Sound Energy, Inc.

(Puget Sound) and by the United States Department

of Agriculture (USDA), although these rehearing

requests raise no specific issues related to Order No.

889–A.

4See Order No. 888, FERC Stats. & Regs. at

31,854, Order No. 889, FERC Stats. & Regs. at

31,596.

5See Order No. 888–A, FERC Stats. & Regs. at

30,293 and 30,332–34, Order No. 889–A, FERC

Stats. & Regs. at 30,554–55. We did, however, in

Order No. 888–A, provide some clarification of the

Commission’s waiver policy. See FERC Stats. &

Regs. at 30,334.

6See Order No. 889–A, FERC Stats. & Regs. at

30,555.

7At the time of NRECA’s rehearing, the

Commission’s policy on the expiration of waivers

provided that

[w]aiver of the requirement to establish and

maintain an information system (i.e., an OASIS)

will be granted unless and until an entity evaluating

its transmission needs complains that it could not

get information necessary to complete its

evaluation. Waiver of the standards of conduct will

be granted unless and until an entity complains that

a public utility has used its access to information

about transmission to unfairly benefit the public

utility’s own or the public utility’s affiliates’ sales.

Compliance must be made within 60 days of the

complaint.

Order No. 889–A, FERC Stats. & Regs. at 30,555

and Black Creek Hydro, Inc., et al., Order on Reh’g

and Granting Waivers of Order No. 889, 77 FERC

¶ 61,232 at 61,941 (1996).

8NRECA Rehearing Request at p. 11.

9TDU Systems Rehearing Request at pp. 10–12.

‘‘interconnection’’ as used in the

definition of ‘‘posted path’’;

(5) Amending § 37.6(b)(3)(ii) to clarify

that firm available transmission

capability (ATC) and nonfirm ATC for

unconstrained posted paths must be

separately posted;

(6) Amending § 37.6(e) to clarify that

the provision applies to requests for

ancillary service and that requests for

service must be posted before the

Transmission Provider responds to the

request;

(7) Amending § 37.6(g)(3) to require

that notices of transfers of personnel

posted on the OASIS, as described in

§ 37.4(b)(2), remain available for the

same time period as audit information

in § 37.7(b);

(8) Amending § 37.7(b) to shorten,

from 90 days to 20 days, the time during

which ATC/total transmission

capability (TTC) postings must remain

available for download on the OASIS

(the data will, however, remain

available upon request for three years

from the date when they are first

posted); and

(9) Deleting § 37.8, because the

compliance date for Part 37 had already

passed.

In response to the issuance of Order

No. 889–A, requests for rehearing were

filed by six interested persons.3

III. Public Reporting Burden

This order on rehearing makes no

changes to Order No. 889–A or the

regulations found at 18 CFR Part 37.

Consequently, the public reporting

burden associated with issuance of this

order is unchanged from what we

estimated when we issued Order Nos.

889 and 889–A. The Commission has

conducted an internal review of this

conclusion and has assured itself, by

means of its internal review, that there

is specific, objective support for this

information burden estimate. Moreover,

the Commission has reviewed the

collection of information required by

Order Nos. 889 and 889–A, as clarified

by this order on rehearing, and has

determined that the collection of

information is necessary and conforms

to the Commission’s plan, as described

in this order, for the collection, efficient

management, and use of the required

information.

Persons wishing to comment on the

collections of information required by

this order on rehearing should direct

their comments to the Desk Officer for

FERC, Office of Management and

Budget, Room 3019 NEOB, Washington,

D.C. 20503, phone 202–395–3087,

facsimile 202–395–7285. Comments

must be filed with the Office of

Management and Budget within 30 days

of publication of this document in the

Federal Register. Three copies of any

comments filed with the Office of

Management and Budget also should be

sent to the following address: Ms. Lois

Cashell, Secretary, Federal Energy

Regulatory Commission, Room 1A, 888

First Street, N.E., Washington, D.C.

20426. For further information, contact

Michael Miller, 202–208–1415.

IV. Discussion

The rehearing requests collectively

raise four major issues. We will deny

rehearing on each of these issues as

discussed below.

A. Section 37.1—Applicability

The Commission’s Waiver Policy

In Order Nos. 888 and 889, the

Commission determined that requests

for waiver would be better decided on

a case-by-case basis so that the

Commission could evaluate them based

on individual circumstances, rather

than as part of a generic rulemaking.4 In

Order No. 889, we stated that the

Commission would develop, in the

context of individual adjudications, a

mechanism that would allow small

public utilities to seek a waiver of some

or all of the Open Access requirements,

including the requirements to establish

and/or participate in an OASIS and to

develop Standards of Conduct. This

same waiver mechanism was made

applicable to small non-public utilities

seeking waiver from all or part of the

reciprocity condition.

Consistent with this approach, the

Commission, in Order Nos. 888–A and

889–A, recounted the waiver standards

enunciated by the Commission in a

series of orders dealing with companies’

specific requests for waiver of all or

some of the requirements of Order Nos.

888 and 889, and declined to revise the

standards established in those case-bycase determinations.5

Additionally, in Order No. 889–A, the

Commission recited the arguments

raised in the requests for rehearing of

the Commission’s waiver policy as it

related to the Commission’s OASIS and

Standard of Conduct requirements

under Order No. 889. The Commission

explained that, in a series of orders, it

had developed waiver criteria that took

into account potential burdens on small

entities and at the same time balanced

the need to prevent undue

discrimination and affiliate abuse in

interstate power markets, and that this

flexible waiver approach adequately

addressed the concerns raised on

rehearing. The Commission concluded

that an order on rehearing of a final

rulemaking was not the proper vehicle

for a company to request a companyspecific waiver or to challenge the

Commission’s waiver policy. It further

explained that waivers are appropriately

addressed on a case-by-case basis,

which permits the Commission to

review the specific facts of each waiver

application and permits affected parties

to intervene and make their views

known to the Commission.6

Rehearing Requests. On rehearing,

NRECA argues that the Commission

should modify its waiver policy so that

waivers terminate upon issuance of a

Commission order, and not upon the

filing of a complaint or request for

service.7 NRECA argues that a waiver

should be terminated not when an

entity files a complaint, but when the

Commission issues an order finding that

the complaint has merit.8

This same basic argument is also

made by TDU Systems.9 TDU Systems

argues that the Commission’s current

waiver policy makes a waiver a

‘‘mirage’’, terminable by a baseless

complaint made solely to drive up a

competitor’s costs by triggering
64718 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

10TDU Systems Rehearing Request at p. 11.

11TDU Systems Rehearing Request at p. 12.

12Central Minnesota Municipal Power Agency, et

al., Order on Requests for Disclaimer of Jurisdiction

and for Waiver of Order Nos. 888 and 889, 79 FERC

¶ 61,260 at 62,127 (1997).

13ConEd Rehearing Request of Order No. 889 at

p. 2.

14FERC Stats. & Regs. at 30,552.

15 Id.

16CCEM Rehearing Request at pp. 5–6.

17CCEM Rehearing Request at p. 5.

18TAPS Rehearing Request at pp. 3–5.

19TAPS Rehearing Request at pp. 3–5.

unnecessary compliance with the

OASIS and Standards of Conduct

requirements.10 Moreover, TDU Systems

argues that such a complaint,

terminating a waiver of Order No. 889

requirements, should be based on a

‘‘good faith’’ request for transmission

service and a prima facie case that

adequate information about a

respondent’s transmission service is

unavailable, or that preferential

treatment is being given to the

respondent’s wholesale merchant

function.11

Commission Conclusion. In a

company-specific order issued

subsequent to the date of NRECA’s and

TDU Systems’ rehearing requests, the

Commission modified its waiver policy

in the manner requested by the two

parties.12 Specifically, the Commission

has reconsidered its policy of

automatically revoking waivers of the

requirements of Order No. 889 on the

filing of a complaint and has

determined that, henceforth, waivers

will remain effective until the

Commission takes action in response to

a complaint.

B. Sections 37.3 (Definitions) and 37.4

(Standards of Conduct)

Definition of ‘‘Wholesale Merchant

Function’’ and Employees Engaged in

Wholesale Purchases for Bundled Retail

Customers

In Order No. 889, in § 37.6(e), the

Commission defined the ‘‘wholesale

merchant function’’ as the ‘‘sale for

resale, or purchase for resale, of electric

energy in interstate commerce.’’

[Emphasis added]. On rehearing of

Order No. 889, Consolidated Edison

Company of New York, Inc. (ConEd)

argued that the Commission had

exceeded its authority by requiring

‘‘transmission providers to functionally

separate interstate electricity

transmission and wholesale merchant

functions (wholesale sales and

purchases of electricity in interstate

commerce).’’ 13 ConEd asserted that

wholesale purchases of electricity in

interstate commerce on behalf of native

load customers are bundled retail

electric service transactions that are

local distribution and not subject to the

Commission’s authority.

In Order No. 889–A, we considered

ConEd’s argument and stated as follows:

We agree with ConEd to the extent that

when a utility uses its own transmission

system to transmit purchased power to retail

load customers we have no jurisdiction over

the transmission that is included in the

bundled sale of power to the retail native

load. Upon further consideration, we

conclude that our definition of ‘‘wholesale

merchant function’’ (in § 37.3(e)) should be

modified to delete the phrase, ‘‘* * *, or

purchase for resale, * * * *’’ because this

clause creates confusion and is not

necessary.14

We explained that when a utility

purchases power for its retail native

load customers, this is not a sale for

resale. We further explained that,

[i]n contrast, when a utility purchases

power for its wholesale native load, the

transmission of purchased power to the

wholesale customer is really part of a

transaction that includes a wholesale sale of

power to a third party.15

In Order No. 889–A, the Commission

also explained that the Standards of

Conduct do not mandate that

Transmission Providers assign

employees making purchases on behalf

of bundled retail customers to the group

performing wholesale merchant

functions. Specifically, we stated:

The standards of conduct’s separation of

functions currently prohibit a Transmission

Provider’s employees engaged in

transmission system operations and

reliability functions from giving preference to

wholesale purchases or sales made on behalf

of its own wholesale customers or those of

affiliates. The standards of conduct do not,

however, dictate whether bundled retail

merchant functions are to be grouped with

the wholesale merchant function or with the

transmission operations and reliability

function.

Thus, FIT Utilities’ request to allow

dispatchers to buy power to serve retail load

is consistent with the regulations. As

discussed above, the regulations do not

prohibit Transmission Providers from

assigning the responsibility for making

purchases to serve bundled retail customers

to the transmission operations and reliability

function.

Rehearing Requests. On rehearing,

CCEM argues that the Commission erred

by modifying the definition of

‘‘wholesale merchant function’’ and by

revising provisions of the Standards of

Conduct to exempt transmission service

provided in conjunction with a

Transmission Provider’s wholesale

purchases for bundled retail sales.16

CCEM also argues that the Commission

erred when it found that it lacks

jurisdiction over transmission service

that is bundled with the sale of power

to a utility’s retail native load.17 It

argues that artificial distinctions

between wholesale and retail

transactions should be avoided. CCEM

further argues that the Commission

should insist that all transmission

providers and customers face the same

unbundled market.

Similarly, TAPS argues that the

Commission’s change in the definition

of ‘‘wholesale merchant function’’

unwisely narrows the scope of the

Standards of Conduct rules.18 TAPS

further argues that a Transmission

Provider’s use of its own transmission

system to make wholesale purchases for

bundled retail load should not be

exempted from functional unbundling

and functional separation

requirements.19 TAPS argues that the

Commission erred by watering down the

functional unbundling requirements in

the Standards of Conduct by excluding

wholesale purchases for bundled retail

customers from the requirement to

functionally unbundle.

Commission Conclusion. Nothing in

the rehearings convinces us to modify

the definition of ‘‘wholesale merchant

function’’ or to otherwise modify our

decision on this issue reached in Order

No. 889–A. However, we will repeat

here certain clarifications we have made

in response to similar arguments made

in requests for rehearing of Order No.

888–A.

Although we reiterate our view that

the Commission does not have

jurisdiction over the rates, terms and

conditions of bundled retail service, as

a practical matter, we do not believe

that it is possible to divide a single

power purchase made on behalf of both

wholesale and retail native load such

that the transmission provider takes

service under the open access non-rate

terms and conditions for the part of the

purchase that goes to wholesale native

load, but takes service under different

terms and conditions for the part of the

purchase that goes to retail native load.

Because the power purchase transaction

(including the delivery across the

transmission provider’s system to both

wholesale and retail customers) is

indivisible, and because the

transmission of the purchased power to

the wholesale native load customer

must be done pursuant to the open

access tariff, this means that the entire

transaction de facto must be pursuant to

the non-rate terms and conditions of the

tariff.

Concerning the Standards of Conduct

requirement that public utilities

separate their wholesale power

marketing functions from their
Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64719

20TAPS Rehearing Request at pp. 5–6.

21TAPS Rehearing Request at p. 6.

22TAPS Rehearing Request of Order No. 888-A at

pp. 17–20. 23CCEM Rehearing Request at pp. 2–5.

transmission operations, the

Commission did not require separation

of the retail power marketing function

because the state has jurisdiction over

retail power marketing and over

bundled retail transmission. However,

here too we believe further clarification

is necessary. First, the public utility has

no choice pursuant to Order Nos. 888

and 888–A but to separate its wholesale

power marketing function (including

power purchase transactions made by

the marketing function on behalf of

wholesale native load) from the

transmission operations function. This

means that those persons in the

company that are involved in wholesale

power purchases as well as wholesale

sales cannot interact with the

transmission personnel other than

through the OASIS. Thus, to the extent

they are making purchases on behalf of

wholesale as well as bundled retail

native load as part of a single purchase,

they will have to abide by the separation

of function requirement. As discussed

above, such a purchase is not divisible.

Additionally, it is conceivable that there

could be a separate retail marketing

function for native load and a separate

wholesale marketing function for native

load. If a challenge is made to the way

a utility organizes its functions, then the

utility bears the burden of

demonstrating that it is maintaining a

separate staff to perform retail marketing

functions. Furthermore, in such cases, it

would clearly be inappropriate for the

retail staff to share transmission

information with the wholesale

marketing staff.

C. Section 37.6—Information To Be

Posted on an Oasis

Transmission Discounting Policy

In Order No. 889–A, we explained

that the Commission was adopting a

revised discounting policy in Order No.

888–A that necessitated changes to the

OASIS and Standards of Conduct

regulations found in 18 CFR Part 37.

These changes entailed three principal

requirements.

First, any offer of a discount for

transmission and/or ancillary services

made by the Transmission Provider

must be announced to all potential

customers solely by posting on the

OASIS.

Second, any customer-initiated

requests for discounts of transmission

and/or ancillary services must occur

solely by posting on the OASIS,

regardless of whether the customer is

the Transmission Provider’s wholesale

merchant function, an affiliate, or a nonaffiliate.

Third, once the Transmission

Provider and customer agree to a

discounted transaction for transmission

and/or ancillary services, the details

immediately must be posted on the

OASIS. This requirement is equally

applicable regardless of whether the

customer is the Transmission Provider’s

wholesale merchant function, an

affiliate, or a non-affiliate.

Rehearing Request. On rehearing,

TAPS argues that the Commission’s

policy on transmission discounting

should be modified to minimize the

potential for self dealing and other

abuses.20 Specifically, TAPS argues that

the Commission’s revised discounting

policy in Order No. 888–A, by allowing

delivery point-specific discounts, offers

a means for transmission providing

utilities to offer each other reciprocal

discounts, while requiring transmission

dependent utilities to pay full freight.

TAPS argues that if a transmission

provider offers a discount to itself or

any other transmission user, the

transmission provider should be

required to offer the discount either on

all unconstrained paths, or, at a

minimum, to all delivery points in the

same unconstrained portion of the

transmission provider’s transmission

system and to other similarly situated

customers. TAPS argues that there is no

justification for a transmission provider

to refuse to offer a discount to delivery

points located along the same electrical

path as the discounted transaction.21

Commission Conclusion. In Order No.

888-B, being issued concurrently with

this order, the Commission has

considered various requests for

rehearing of the discounting policy

announced in Order Nos. 888-A and

889-A. Among these requests for

rehearing is that submitted by TAPS,

wherein TAPS raises the same

discounting issue as that raised in its

request for rehearing of Order No. 889-

A.22/ As we are denying rehearing of

this issue in Order No. 888-B, for the

reasons discussed therein, we similarly

deny rehearing of this issue in this

order.

As we explain in Order No. 888-B, the

revised discounting policy announced

in Order No. 888-A is the result of a

careful balancing of incentives to

operate the transmission grid efficiently

while ensuring that the grid is not

operated in an unduly discriminatory

manner. After a review of the requests

for rehearing, the Commission

concludes, in Order No. 888-B, that it

properly balanced these concerns in

Order No. 888-A. For this reason, the

Commission denies the requests for

rehearing of this issue in Order No. 888-

B, and we do the same here.

D. Section 37.6—Information to be

Posted on an Oasis

Deletion of Masking Provision

In Order No. 889-A, the Commission

deleted § 37.6(e)(1)(iii) and revised

§ 37.6(e)(3)(I) to remove provisions that

directed Transmission Providers posting

transmission service requests on the

OASIS to honor requests from parties to

transactions to mask their identities

during the negotiating period and for 30

days from the date when the request for

service was accepted, denied, or

withdrawn. The Commission deleted

the masking provision in response to

certain arguments raised on rehearing of

Order No. 889 and to implement the

discounting policy announced in Order

No. 888-A.

Rehearing Request. CCEM argues that

the Commission erred by eliminating

the customer identity/transaction

masking provision.23 CCEM contends

that this revision was not based on

reasoned decision-making. CCEM argues

that by revealing a transmission

requester’s identity, competitors—

particularly public utilities with captive

native loads—can learn commercially

sensitive information that will allow

them to misappropriate the service

requester’s marketing efforts and

transactions. CCEM argues that this is a

larger problem than it was previously

because the Commission has now

expanded the information to be posted

on the status of requests for

transmission and ancillary services to

include information about: (1) points of

delivery and receipt; (2) length and type

of service; and (3) identification of

ancillary service transactions associated

with a transmission service transaction.

CCEM also argues that eliminating the

30-day masking provision allows the

Standards of Conduct to be undercut by

allowing wholesale merchant employees

to obtain market information in a

manner giving them an advantage over

unaffiliated marketers. CCEM does not

agree that masking inhibits market

participants from making informed

choices and notes that all relevant

information except a requester’s identity

already would be available. CCEM

argues that a requester’s identity is

neither critical nor important to a

competitor pursuing ‘‘its own interests’’.

Commission Conclusion. We find

CCEM’s arguments unpersuasive. While
64720 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

24 5 U.S.C. 601–612.

25See Order No. 889, FERC Stats. & Regs. at

31,628. 26OMB Control No. 1902–0173.

CCEM makes much of the so-called

‘‘uneven playing field’’ that it allegedly

will endure without the masking

provision, we find this concern to be

unfounded. The Order No. 889 version

of §§ 37.6(e)(1)(iii) and 37.6(e)(3)(I)

treated all market participants making a

request for transmission service (or

whose transactions were curtailed or

interrupted) equally, by allowing parties

to such transactions to mask their

identities for thirty days, upon request.

The current (Order No. 889-A) version

treats all market participants making a

request for transmission service (or

whose transactions are curtailed or

interrupted) equally, by requiring the

identity of parties to such transactions

to be posted. Although the Commission

has revised its policy on masking, all

market participants making a request for

transmission service, whether affiliated

or non-affiliated with the Transmission

Provider are treated equally in both

instances. Thus, under the revised rule,

the playing field is just as level as

before.

Moreover, we are not persuaded that

eliminating the masking provision will

have the dire anticompetitive

consequences that CCEM predicts. To

the contrary, we continue to believe that

fuller disclosure of customer and

transaction information is necessary to

implement the discounting provisions

added by Order Nos. 888–A and 889–A

and to ensure that customers (actual or

potential) are able to detect any affiliate

abuse or undue discrimination.

If actual experience proves different,

CCEM or other interested persons may

bring these facts to our attention and we

will consider taking appropriate

remedial action.

V. Regulatory Flexibility Act

Certification

The Regulatory Flexibility Act

(RFA) 24 requires any proposed or final

rule issued by the Commission to

contain a description and analysis of the

impact that the proposed or final rule

would have on small entities or to

contain a certification that the rule, if

promulgated, will not have a significant

economic impact on a substantial

number of small entities. Order No. 889

contained a certification under section

605(b) of the RFA that the OASIS Final

Rule would not impose a significant

economic impact on a substantial

number of small entities within the

meaning of the RFA.25

Given that Order No. 889–A made

only minor revisions to Order No. 889,

none of which was substantive, that this

order makes no revisions to Order No.

889–A, and that we are granting waivers

from the requirements of the OASIS

Final Rule to small entities where

appropriate, we reaffirm our earlier

certification in Order Nos. 889 and 889–

A that the requirements in 18 CFR Part

37, to establish and participate in an

OASIS and to comply with the

Standards of Conduct, will not have a

significant economic impact on a

substantial number of small entities and

that no regulatory flexibility analysis is

required pursuant to section 603 of the

RFA.

VI. Environmental Statement

As explained in Order Nos. 888–A

and 889–A, Order Nos. 888 and 889

were the joint subjects of the Final

Environmental Impact Statement issued

in the Open Access NOPR proceeding in

Docket Nos. RM95–8–000 and RM94–7–

001 on April 12, 1996. Given that this

order makes no revisions to Order No.

889–A, no separate environmental

assessment or environmental impact

statement has been prepared in this

proceeding.

VII. Information Collection Statement

As explained in Order Nos. 889–A,

Order No. 889 contained an information

collection statement for which the

Commission obtained approval from the

Office of Management and Budget

(OMB).26 Given that Order No. 889–A

made only minor revisions to Order No.

889, none of which was substantive, and

given that this order makes no revisions

to Order No. 889–A, OMB approval for

this order will not be necessary.

However, the Commission will send a

copy of this order to OMB, for

informational purposes only.

The information reporting

requirements under this order are

unchanged from those contained in

Order No. 889–A. Interested persons

may obtain information on the reporting

requirements by contacting the Federal

Energy Regulatory Commission, 888

First Street, N.E., Washington, D.C.

20426 [Attention Michael Miller,

Information Services Division, (202)

208–1415], and the Office of

Management and Budget [Attention:

Desk Officer for the Federal Energy

Regulatory Commission (202) 395–

3087].

The Commission Orders

As discussed in the body of this order,

the requests for rehearing are hereby

denied.

By the Commission.

Lois D. Cashell,

Secretary.

[FR Doc. 97–31856 Filed 12–8–97; 8:45 am]

BILLING CODE 6717–01–P

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 500

Foreign Assets Control Regulations:

Reporting of Claims of U.S. Nationals

Against the Government of North

Korea

AGENCY: Office of Foreign Assets

Control

ACTION: Final rule; amendment.

SUMMARY: The Office of Foreign Assets

Control is amending the Foreign Assets

Control Regulations to require the

reporting, no later than March 9, 1998,

of all outstanding claims held by U.S.

nationals against the Government of

North Korea or any North Korean

government entity. The reports are

needed to obtain information, on a one–

time basis, for planning and

administrative purposes in

contemplation of future claims

settlement negotiations. The control

number assigned by the Office of

Management and Budget to this

information collection requirement is

also included.

EFFECTIVE DATE: December 9, 1997.

FOR FURTHER INFORMATION CONTACT:

Loren L. Dohm, Chief, Blocked Assets

Division, tel.: 202/622–2440, or William

B. Hoffman, Chief Counsel, tel.: 202/

622–2410, Office of Foreign Assets

Control, Department of the Treasury,

Washington, DC 20220.

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