[Federal Register Volume 62, Number 50 (Friday, March 14, 1997)]
[Rules and Regulations]
[Pages 12484-12505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5768]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket No. RM95-9-001; Order No. 889-A]


Open Access Same-Time Information System and Standards of Conduct

Issued March 4, 1997.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final Rule; order on rehearing.

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SUMMARY: The Federal Energy Regulatory Commission is revising its 
policy on posting discounts to be consistent with changes in the 
discount policy that we simultaneously are implementing in Order No. 
888-A. Additionally, we are making other minor revisions to 18 CFR Part 
37--which contains rules establishing and governing transmission 
information networks and standards of conduct--to be responsive to 
arguments made on rehearing and to make the regulations operate more 
smoothly.
    In addition, the Commission requests that the How Working Group 
propose the necessary changes in the Standards and Protocols document 
and the Data Dictionary by June 2, 1997 to address four issues.

EFFECTIVE DATE: This rule is effective on May 13, 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 and 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 5.1 format. CIPS user 
assistance is available at 202-208-2474.
    CIPS is also available through the Fed World system. Telnet 
software is required. To access CIPS via the Internet, point your 
browser to the URL address: http://www.fedworld.gov and select the ``Go 
to the FedWorld Telnet Site'' button. When your Telnet software 
connects you, log onto the FedWorld system, scroll down and select 
FedWorld by typing: 1 and at the command line then typing: /go FERC. 
FedWorld may also be accessed by Telnet at the address fedworld.gov.
    Finally, 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 also located in the Public 
Reference Room at 888 First Street, N.E., Washington, D.C. 20426.

Table of Contents

I. Introduction
II. Background
III. Public Reporting Burden
IV. Discussion
    A. Overview of Revisions Made in This Order
    B. Section 37.1--Applicability
    1. Extent of the Commission's Authority to Impose Standards of 
Conduct
    2. The Commission's Authority to Impose Reciprocity Provision
    3. Waiver Policy
    C. Section 37.2--Purpose
    D. Section 37.3--Definitions
    E. Section 37.4--Standards of Conduct
    1. Contacts Between Employees Providing Ancillary Services and 
System Operators
    2. Contacts Between Generation Control Employees and 
Transmission Operations and Wholesale Merchant Employees
    3. Monitoring the Standards of Conduct
    4. Adequacy of Emergency Exception
    5. Short-term Economy Energy Purchases
    6. Tight Pools
    7. Clarification of Sec. 37.4(b)(5)(iv)
    8. Discounts
    F. Section 37.5--Obligations of Transmission Providers and 
Responsible Parties
    G. Section 37.6--Information to be Posted on an OASIS

[[Page 12485]]

    1. Definition of ``Posted Path''
    2. Definition of ``interconnection''
    3. ATC Supporting Information
    a. Disclosure of Data Supporting Calculations of ATC and TTC
    b. Disclosure of Data on Nonfirm ATC
    c. Time Limits for Disclosure of Utility Generation Data
    d. Reporting of Network Service Usage
    4. Posting Firm and Nonfirm ATC Separately
    5. Minimum Term of Firm Point-to-Point Transmission Service
    6. Posting of Discounts
    7. Secondary Markets
    8. Masking of Service Request Information
    9. Requests for Service Made on the OASIS During Phase I
    10. Delay in Posting Requests for Hourly Transmission Service 
and Schedule Information
    11. Liability for Accuracy of ATC/TTC Estimates
    H. Section 37.7--Auditing Transmission Service Information
    I. Standards and Communication Protocols
    1. CCEM's Suggested Changes to the Standards and Protocols
    a. Service Request Priorities
    b. Clarification of the Requirement to Post, Upload, and 
Download Information
    c. Sequence of Data Elements Appearing in Templates
    2. Standardized Format for Electronic Tariff Filings
    3. Company Codes and Identification Displays
    4. Common Location Codes
    5. Time by Which Hourly Postings Must be Made Available
    J. Mechanism For Recovering OASIS Expenses
    K. Section 37.8--Implementation Schedule; Phases
V. Regulatory Flexibility Act Certification
VI. Environmental Statement
VII. Information Collection Statement
VIII. Effective Date
Regulatory Text
Attachment 1

I. Introduction

    In this order, the Commission addresses the requests for rehearing 
of Order No. 889, our final rule requiring 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 Same-Time Information System (OASIS) site in conformance with 
the requirements set out in 18 CFR Part 37.<SUP>1 Those requirements 
also obligate public utilities subject to the rule to implement 
standards of conduct to functionally separate transmission and 
wholesale merchant functions.
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    \1\ Open Access Same-Time Information System and Standards of 
Conduct, Final Rule, Order No. 889, FERC Stats. & Regs. para. 
31,037, 61 FR 21,737 (1996). Since issuance of Order No. 889, we 
have issued two additional orders. These orders: (1) revise the 
standards and communication protocols for OASIS nodes; and (2) 
extend the date for commencing Phase I OASIS operations and 
complying with the standards of conduct. See infra notes 4, 6, 
respectively.
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    For the reasons stated, we will grant rehearing, in part, and adopt 
several suggested revisions to the OASIS final rule, but will, in main 
part, deny rehearing and retain the OASIS final rule as promulgated in 
Order No. 889. In addition, we request that the How Working Group 
propose changes to the Standards and Protocols document and the Data 
Dictionary by June 2, 1997 to address four issues described below.

II. Background

    In Order No. 889, the Commission promulgated a final rule (OASIS 
Final Rule) requiring Transmission Providers <SUP>2 to implement the 
legal and policy determinations made concurrently in Order No. 888, the 
final rule on open access transmission (Open Access Final Rule).<SUP>3 
Under Order No. 889, the OASIS Final Rule applies to any transmission 
service offered under the Open Access Final Rule pro forma tariff, 
including service both to wholesale Transmission Customers and to 
retail Transmission Customers that are able to receive unbundled retail 
transmission service and to any entity required to provide such 
service.
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    \2\ Order No. 889 and the OASIS regulations at 18 CFR 37.3 
define a ``Transmission Provider'' as any public utility that owns, 
operates, or controls facilities used for the transmission of 
electric energy in interstate commerce. This same definition applies 
to our use of this term in this order.
    \3\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Order No. 888, Final Rule, FERC Stats. & Regs. para. 
31,632, 61 FR 21,540 (1996), order on reh'g, Order No. 888-A,--FERC 
para. --,---(1997).
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    Under the OASIS Final Rule, Transmission Providers are required to 
establish or participate in an OASIS that meets certain requirements 
and must comply with prescribed standards of conduct. The standards of 
conduct are designed to prevent employees of a public utility (or any 
employees of its affiliates) engaged in wholesale merchant functions 
(wholesale sales of electricity for resale in interstate commerce) from 
obtaining preferential access to pertinent transmission-related 
information.
    To this end, the standards of conduct, set out in the Commission's 
regulations at 18 CFR 37.4, require companies to separate their 
transmission operations/reliability functions from their wholesale 
marketing/merchant functions. They are intended to prevent transmission 
system operators from providing wholesale merchant employees or 
wholesale merchant employees of affiliates with transmission-related 
information not available to all customers at the same time (through 
public posting on the OASIS).
    The OASIS Final Rule describes what information must be posted on 
an OASIS, what procedures must be followed in responding to requests 
for transmission service, and references the Commission's accompanying 
Standards and Protocols document adopted by the Commission to ensure 
that information is to be posted on an OASIS in a uniform manner.<SUP>4 
Transmission Providers are required to provide on an OASIS, in a 
uniform manner, certain types of information concerning the status of 
their transmission systems. The provisions of the OASIS Final Rule are 
intended to work together to ensure that Transmission Customers <SUP>5 
have access to transmission information, through electronic means, that 
will enable them to obtain comparable, open access transmission service 
on a non-discriminatory basis.
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    \4\ See Open Access Same-Time Information System and Standards 
of Conduct, Order Issuing Revised OASIS Standards and Protocols 
Document, 76 FERC para. 61,243, 61 FR 50,116 (1996), where the 
Commission revised the Standards and Protocols document that 
accompanied Order No. 889.
    \5\ Order No. 889 and the OASIS regulations at 18 CFR 37.3 
define a ``Transmission Customer'' as any eligible customer (or its 
designated agent) that can or does execute a transmission service 
agreement or can or does receive transmission service. This same 
definition applies to our use of this term in this order.
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    Order No. 889 established Phase I OASIS rules that required the 
creation of a basic OASIS by November 1, 1996 (subsequently extended 
until January 3, 1997).<SUP>6 We are appreciative of the ongoing 
efforts of the How Working Group and the What Working Group in helping 
to develop the OASIS Standards and Protocols and in helping to resolve 
numerous difficult OASIS implementation issues.<SUP>7 We also, despite 
setbacks encountered by some public utilities, are appreciative of the 
hard work of the entire electric industry in meeting the ambitious 
schedule for OASIS implementation prescribed in Order No. 889.
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    \6\ See Open Access Same-Time Information System and Standards 
of Conduct, Order Granting Request for Extension of Time, 76 FERC 
para. 61,305 (1996).
    \7\ The How Working Group and its companion working group, the 
What Working Group, are industry-led groups, with diverse industry 
and customer representatives, working to reach consensus on OASIS-
related issues. See OASIS Final Rule, 61 FR at 21,740, n.13, for a 
fuller description of both working groups and their activities.
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    Order No. 889 also explained that Phase I implementation would be 
followed by Phase II procedures

[[Page 12486]]

whereby the Commission, with ongoing industry participation, will 
continue to refine and further develop the requirements for a fully 
functional OASIS.<SUP>8
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    \8\ In the OASIS Final Rule, 61 FR at 21,762, we requested that 
the industry prepare a report on Phase II issues due on or before 
August 4, 1997 (seven months from January 3, 1997, the revised 
compliance date for Phase I implementation).
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    Requests for rehearing relating to Order No. 889 were filed by over 
40 interested persons. These include 37 requests for rehearing that 
collectively list both Order Nos. 888 and 889 in their captions and ten 
requests for rehearing that are aimed exclusively at Order No. 
889.<SUP>9 Several of the issues raised on rehearing that implicate 
both Order Nos. 888 and 889 are addressed more fully in Order No. 888-
A, which is being issued contemporaneously with this order.<SUP>10
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    \9\ The requests for rehearing for AK Cities, AL EC, AL MEA, 
Basin EC, Cajun, Central P&L, Central Montana EC, Cooperative Power, 
FPL, Florida Power Corp, Hoosier EC, NWRTA, Santa Clara, and SWRTA 
raised no direct 889 issues. The names and abbreviations of all 
interested persons who filed requests for rehearing of Order No. 889 
(or a combined request for rehearing of Order Nos. 888 and 889) are 
listed in Attachment 1.
    We also note that, in various places in this order, we identify 
issues that were raised in requests for rehearing of Order No. 889, 
or that were identified as pertaining to Order No. 889, that, in our 
judgment, really seek rehearing of matters relating to Order No. 
888. They are therefore decided in Order No. 888-A.
    \10\ See Order No. 888-A.
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III. Public Reporting Burden

    This order on rehearing adopts a number of small changes, more 
fully elaborated in Section IV.E.8 below, to be consistent with the 
Commission's revised discount policy being announced in Order No. 888-
A. In addition, we also are making nine minor revisions to the OASIS 
Final Rule and direct the How Working Group to propose changes to the 
Standards and Protocols document addressing four additional issues. We 
find, after reviewing these revisions, that they do not, on balance, 
increase the public reporting burden.
    The OASIS Final Rule contained an estimated annual public reporting 
burden based on the requirements of the Final Rule and consideration of 
comments from interested persons.<SUP>11 Using the burden estimate 
contained in the OASIS Final Rule as a starting point, we evaluated the 
public burden estimate contained in the OASIS Final Rule in light of 
the revisions contained in this order and assessed whether this 
estimate needed revision. We have concluded, given the minor nature of 
the revisions, and their offsetting nature, that our estimate of the 
public reporting burden of this order on rehearing remains unchanged 
from our original estimate of the public reporting burden contained in 
the OASIS Final Rule. 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 the OASIS Final Rule as revised 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.
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    \11\ No comments were filed in objection to the public burden 
estimate contained in the OASIS Final Rule.
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    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 or 
via the Internet at <a href="/cdn-cgi/l/email-protection#3159585d5d5854436e6e457150001f545e411f565e47"><span class="__cf_email__" data-cfemail="721a1b1e1e1b17002d2d063213435c171d025c151d04">[email protected]</span></a>. 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

A. Overview of Revisions made in this Order

    In this order on rehearing of Order No. 889, the Commission has 
implemented a new discounting policy, adopted and described in detail 
in Order No. 888-A. This new discount policy necessitates a number of 
changes to the Standards of Conduct and OASIS posting requirements:

    (1) We are deleting Secs. 37.4(b)(5)(v) and 37.4(b)(5)(vi).
    (2) We are adding a provision now designated as Sec. 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) We are revising Sec. 37.6(c)(4) to no longer treat the 
posting of transmission service transactions involving the 
Transmission Provider's (or any affiliate's) 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) We are adding a provision now designated as Sec. 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) We are revising Sec. 37.6(d)(3) on ancillary services 
consistent with item 3 above.
    (6) We are revising Sec. 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) We are adding a provision, now designated as 
Sec. 37.6(e)(1)(ii), that during Phase I, while requests for next-
hour service need to be posted as soon as possible and in any event 
within one hour of receiving the request, they need not be posted 
prior to being acted on.
    (8) We are adding a provision, at Sec. 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 request 
need not be posted on the OASIS.
    (9) We are renumbering Sec. 37.6(e)(1)(ii) as 
Sec. 37.6(e)(1)(iv) and are expanding the information required to be 
posted on the status of requests for transmission and ancillary 
service.
    (10) We are deleting the provision formerly found in 
Sec. 37.6(e)(1)(iii) and are revising Sec. 37.6(e)(3)(i) because we 
no longer will allow the identity of parties to transactions to be 
masked.

    Additionally, we believe that any ``negotiation'' <SUP>12 between a 
Transmission Provider and a potential customer should take place on the 
OASIS, and should be visible to all market participants, and we will 
revise our regulations to accomplish this as soon as practicable. To 
this end, we direct the How Working Group, by no later than June 2, 
1997, to propose: (1) any changes that might be necessitated to the 
Standards and Protocols document; and (2) the earliest date when the 
industry can meet such a requirement during Phase I.
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    \12\ ``Negotiation'' would only take place if the Transmission 
Provider or potential customer seeks prices below the ceiling prices 
set forth in the tariff.
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    We also are making nine minor revisions to 18 CFR Part 37. These 
include: (1) amending the definition of wholesale merchant function in 
Sec. 37.3; (2) amending Secs. 37.4(b)(5)(iii) and 37.6(g)(4) to require 
Transmission Providers to post on the OASIS the information that they 
already are 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

[[Page 12487]]

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 Sec. 37.4(b)(5)(iv), to 
be consistent with the revised definition of ``wholesale merchant 
function'; (4) amending Sec. 37.6(b)(1) to clarify the meaning of the 
term ``interconnection'' as used in the definition of posted path; (5) 
amending Sec. 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 Sec. 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 Sec. 37.6(g)(3) to require that 
notices of transfers of personnel posted on the OASIS as described in 
Sec. 37.4(b)(2) remain available for the same time period as audit 
information in Sec. 37.7(b); (8) amending Sec. 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) removing 
Sec. 37.8, because the compliance date for Part 37 has already passed.
    In addition, we are requesting that the How Working Group propose 
changes in the Standards and Protocols document and the Data Dictionary 
by June 2, 1997 necessitated by the Commission's revised discount 
policy and by our findings on various requests for rehearing.
    We will retain the provisions of Order No. 889 and 18 CFR Part 37 
in all other respects. Below, we address the provisions of 18 CFR Part 
37 in light of the issues raised in the requests for rehearing.

B. Section 37.1--Applicability

1. Extent of the Commission's Authority to Impose Standards of Conduct
    In the OASIS Final Rule, the Commission determined that the rules 
in Part 37--including the obligation to adopt standards of conduct--
would apply to any public utility that owns, operates, or controls 
facilities used for the transmission of electric energy in interstate 
commerce. Among other things, we concluded that we would not directly 
assert jurisdiction over non-public utilities under Sec. 311 of the 
Federal Power Act (FPA) to ensure compliance with OASIS requirements, 
including the requirement to comply with the standards of conduct. 
Instead, we are relying on the reciprocity provision of the Open Access 
pro forma tariff that requires a non-public utility to offer comparable 
transmission service to the Transmission Provider as a condition of 
obtaining open access service.<SUP>13
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    \13\ We discuss below, in the next section of this order, issues 
raised on rehearing that implicate the Commission's authority to 
condition the use of public utility Open Access pro forma tariffs on 
the provision of reciprocal transmission services, including 
compliance with the standards of conduct and OASIS requirements.
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Rehearing Request

    ConEd argues that the Commission lacks authority to issue the 
standards of conduct requiring functional unbundling.<SUP>14 
Specifically, ConEd argues that the Commission has 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).''<SUP>15 ConEd asserts 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.
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    \14\ ConEd Rehearing Request at pp. 2-6.
    \15\ ConEd Rehearing Request at p. 2.
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Commission Conclusion

    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 Sec. 37.3(e)) should be modified to delete the 
phrase, ``* * *, or purchase for resale, * * *.'' because this clause 
creates confusion and is not necessary. When a utility purchases power 
for its retail native load customers, this is not a sale for resale. In 
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. Our authority to require functional unbundling of 
interstate electricity transmission and the wholesale merchant 
function, as newly defined, is fully supported in Order No. 888.
2. The Commission's Authority to Impose Reciprocity Provision
    In the OASIS Final Rule, we concluded that we will not directly 
assert jurisdiction over non-public utilities under Sec. 311 of the FPA 
<SUP>16 to ensure compliance with OASIS requirements. We concluded that 
we would, instead, rely on the reciprocity provision of the Open Access 
pro forma tariff that requires a non-public utility to offer comparable 
transmission service to the Transmission Provider as a condition of 
obtaining open access service. We found that if a non-public utility 
chooses to take open access service, and therefore is subject to the 
Open Access pro forma tariff reciprocity provision, it also is subject 
to the OASIS and standards of conduct requirements in 18 CFR Part 37, 
unless the Commission grants a waiver of the reciprocity provision. The 
reciprocity provision announced in the Open Access Final Rule does not 
require non-public utilities to provide transmission access, but, 
instead, conditions the use of public utilities' open access services 
on an agreement to offer open access services in return.
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    \16\ 16 U.S.C. Sec. 825j.
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Rehearing Requests

    A number of non-public utilities have raised arguments on rehearing 
challenging the reciprocity provision. First, some argue that, 
notwithstanding the Commission's discussion of this issue in Order Nos. 
888 and 889, the reciprocity provision is not voluntary. <SUP>17 
Second, some argue that the Commission lacks the authority to impose 
the reciprocity provision and that the Commission is trying to 
accomplish indirectly what it lacks the authority to do 
directly.<SUP>18 Third, CAMU argues that the Commission should defer 
imposing the reciprocity provision until such time as the IRS clarifies 
the status of private use limitations within the context of 
transmission access.<SUP>19 NE Public Power District objects that Order 
No. 889 contained scant discussion of the Commission's authority to 
impose functional unbundling and other requirements based on the 
reciprocity provision.<SUP>20
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    \17\ See Requests for Rehearing of AL EC, NE Public Power 
District, NRECA, and TDU Systems.
    \18\ See Requests for Rehearing of Redding, NE Public Power 
District, NRECA, and TDU Systems.
    \19\ CAMU Rehearing Request at pp. 3-4.
    \20\ This issue was fully considered and addressed in Order No. 
888. NE Public Power District also raises a related issue, now moot, 
concerning possible conflicts between the standards of conduct and 
state freedom of information laws. Given that this issue concerns 
the confidentiality provisions of Sec. 37.6(e), we will address this 
issue below in section IV.G.8 of this order.

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[[Page 12488]]

    Other entities seeking rehearing argue that the Commission did not 
go far enough in adopting and relying upon the reciprocity provision 
for purposes of attaining compliance with the OASIS and standards of 
conduct requirements. CCEM argues that the Commission erred by failing 
to require nonjurisdictional entities providing reciprocal service to 
comply with the OASIS requirements. <SUP>21
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    \21\ CCEM Rehearing Request at p. 10.
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    EEI argues that the reciprocity provision requires all non-public 
utilities to functionally unbundle their transmission systems, 
establish an OASIS, and fully comply with the OASIS standards of 
conduct. Additionally, EEI advances a number of proposals that would 
expand the reciprocity provision contained in the Open Access Final 
Rule.<SUP>22
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    \22\ EEI Rehearing Request at n.10 and pp. 2, 7-15.
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    Montana-Dakota argues that the reciprocity provision should be 
expanded for non-public utilities. It argues that cooperatives should 
not be able to construct barriers minimizing their obligations under 
the reciprocity provision.<SUP>23
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    \23\ Montana-Dakota Rehearing Request at pp. 2-4.
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Commission Conclusion

    After consideration of the arguments made on rehearing, both in 
this rulemaking proceeding and on rehearing of the Open Access Final 
Rule, we continue to believe that it is appropriate to condition the 
use of public utility open access tariffs on the agreement of the 
tariff user to provide reciprocal access to the Transmission Provider. 
Any eligible customer, including a non-public utility, that takes 
advantage of open access transmission tariff services should not be 
allowed to deny service or otherwise discriminate against the open 
access provider. Moreover, we continue to believe that, absent a 
waiver, the obligation to provide reciprocal, non-discriminatory 
services necessarily commits the customer of open access service, even 
if not a public utility, to abide by the OASIS and standards of conduct 
requirements.
    Contrary to arguments raised on rehearing, we are not requiring 
non-public utilities to provide transmission access. Instead, we are 
conditioning the use of public utility open access tariffs, by all 
customers including non-public utilities, on an agreement to offer 
comparable (not unduly discriminatory) services in return. It would not 
be in the public interest to allow a non-public utility to take non-
discriminatory transmission service from a public utility at the same 
time that it refuses to provide comparable service to the public 
utility. Such a disparity would restrict the operation of robust 
competitive markets and would harm the very ratepayers that Congress 
has charged us to protect.
    Similarly, it would not serve the public interest to compel public 
utilities to have OASIS nodes and to functionally unbundle their 
wholesale merchant functions from their transmission operations and 
reliability functions, while allowing non-public utilities that seek 
open access transmission from a public utility to evade these 
responsibilities. <SUP>24
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    \24\ See South Carolina Public Service Authority (Santee 
Cooper), 75 FERC para. 61,209 (1996); Central Electric Cooperative, 
Inc., 77 FERC para. 61,076 (1996).
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    Moreover, we have provided a mechanism, equally applicable both to 
small public utilities and to small non-public utilities, for them to 
obtain waivers of the OASIS and separation of function requirements and 
the other reciprocity requirements.<SUP>25
---------------------------------------------------------------------------

    \25\ Moreover, as we discuss further below, see supra sections 
IV.B.3 and V., the Commission has granted waivers to a number of 
small non-public utilities from the requirements to establish and 
maintain an OASIS and the requirement in the standards of conduct to 
separate the wholesale merchant function from the transmission 
operation and reliability function.
---------------------------------------------------------------------------

    Turning to arguments that assert that the reciprocity condition 
does not go far enough, we are unpersuaded that we should further 
expand the reciprocity condition. In our view, the reciprocity 
condition, as written, suffices to ensure comparability and to avoid 
undue discrimination. We discuss this matter more fully in Order No. 
888-A.
3. Waiver Policy
    The Open Access Final Rule provides that public utilities may seek 
waivers for some or all of the requirements of the Open Access Final 
Rule, including waiver of the standards of conduct and OASIS 
requirements. Similarly, the Open Access Final Rule provides that non-
public utilities may seek waivers of the tariff reciprocity provision 
as applied to them.

Rehearing Requests

    APPA argues that the Commission should revise the waiver standard 
for non-public utilities (the reciprocity provision) to allow waivers 
when a non-public utility lacks market power or where the cost of 
compliance exceeds the annual net revenues expected to be received from 
transmission and ancillary services under a reciprocity tariff. APPA 
further argues that, in such circumstances, compliance with the 
requirements of the Open Access and OASIS Final Rules would be anti-
competitive.<SUP>26 Similarly, CAMU argues that only dominant utilities 
are capable of subverting the transmission market and that, therefore, 
only such larger utilities should be burdened with the costs of 
compliance.<SUP>27
---------------------------------------------------------------------------

    \26\ APPA Rehearing Request at pp. 9-11.
    \27\ CAMU Rehearing Request at pp. 2-3.
---------------------------------------------------------------------------

    Blue Ridge argues that the Commission should clarify that a waiver 
from compliance with the requirements of Order No. 888 also gives a 
waiver from compliance with the requirements of Order No. 889.<SUP>28
---------------------------------------------------------------------------

    \28\ Blue Ridge Rehearing Request at p. 39. We note that the 
Commission only granted waiver of Order No. 889 requirements to 
those public utilities that made a specific request for waiver of 
those requirements. See infra n.33, First Waiver Order, 76 FERC at 
62,296-97.
---------------------------------------------------------------------------

    Indianapolis P&L argues that the Commission's criteria for 
evaluating waiver requests are too rigid and that it probably will be 
denied waiver even though it is a small system that lacks transmission 
market power.<SUP>29
---------------------------------------------------------------------------

    \29\ Indianapolis P&L's request for waiver was denied in the 
First Waiver Order, infra n.33, see 76 FERC at 62,295. Indianapolis 
P&L's request for rehearing in Docket No. OA96-81-001 currently is 
pending.
---------------------------------------------------------------------------

    Michigan Systems argue that small systems that lack market power in 
transmission should be granted a blanket exemption from compliance with 
the separation of functions requirement in the OASIS standards of 
conduct, without the necessity for applying for waivers on a case-by-
case basis.<SUP>30
---------------------------------------------------------------------------

    \30\ Michigan Systems Rehearing Request passim.
---------------------------------------------------------------------------

    Ohio Valley argues that the criteria in the Open Access Final Rule 
for obtaining waivers from compliance with Order Nos. 888 and 889 are 
too stringent and should be revised to accommodate waivers whenever 
justified. <SUP>31 It argues that control area operators should not be 
excluded from obtaining a waiver of the Commission's Open Access 
requirements. Ohio Valley adds that the waiver process is uncertain and 
that its 1953 agreement to supply power to the United States Department 
of Energy should be ``grandfathered'' and exempted from compliance with 
the requirements of Order Nos. 888 and 889.
---------------------------------------------------------------------------

    \31\ Ohio Valley Rehearing Request at p. 12.
---------------------------------------------------------------------------

    TAPS argues that in areas of the country where a major transmission 
owner elects to set up its own OASIS, in lieu of participation in a 
regional OASIS, or refuses to allow smaller utilities to participate in 
an OASIS, waivers should be granted to the smaller utilities so that 
they are not forced to set up their own OASIS sites, the costs of which 
would be unwarranted. TAPS further argues that larger utilities that do

[[Page 12489]]

not allow smaller utilities to participate with them in a joint OASIS 
should not be able to deny service to those smaller utilities on that 
basis.<SUP>32
---------------------------------------------------------------------------

    \32\ See related issue, discussed in section IV.F below, 
concerning the argument that Transmission Providers must create 
regional OASIS nodes.
---------------------------------------------------------------------------

Commission Conclusion

    Since issuance of the Open Access and OASIS Final Rules, the 
Commission has issued a series of orders addressing specific requests 
for waiver of all or some of the requirements of the Open Access and 
OASIS Final Rules, including the requirements under Order No. 889 to: 
(1) establish and maintain an OASIS; and (2) comply with the standards 
of conduct (including the requirement to separate the activities of, 
and restrict communications between, employees performing wholesale 
merchant functions and employees performing system operations and 
reliability functions).<SUP>33 The waiver standards enunciated by the 
Commission apply to public utilities subject to the rules, as well as 
to non-public utilities that seek waiver of the reciprocity provision.
---------------------------------------------------------------------------

    \33\ See, e.g., Northern States Power Company (MI), et al., 
Order on Requests by Public Utilities for Waivers of Order No. 888 
and 889, 76 FERC para. 61,250 (1996) (First Waiver Order); order on 
reh'g, Black Creek Hydro, Inc., et al., Order on Rehearing and 
Granting Waivers of Order No. 889, 77 FERC para. 61,232 (1996) 
(Black Creek); Midwest Energy, Inc., et al., 77 FERC para. 61,208 
(1996) (Midwest); Soyland Power Cooperative Association, et al., 78 
FERC para. 61,095 (1997) (Soyland); Dakota Electric Ass'n, et al., 
78 FERC ] 61,117 (1997) (Dakota). In addition, the Commission, in 
Central Electric Cooperative, Inc., et al., 77 FERC para. 61,076 
(1996), reh'g pending (Central Electric); Dakota; and Niobrara 
Valley Electric Membership Corporation, Docket Nos. OA96-146-001 and 
ER97-1412-000 (Niobrara), addressed various requests for rulings on 
exemptions from and waivers of Order Nos. 888 and 889, on the basis 
that applicants are not public utilities subject to the requirements 
of the Final Rules.
---------------------------------------------------------------------------

    In Black Creek, the Commission announced modified standards used to 
determine whether to grant waiver of Order Nos. 888 and 889.<SUP>34 
Under these modified standards, waiver of Order No. 889 would be 
appropriate: (1) if the applicant owns, operates, or controls only 
limited and discrete transmission facilities (rather than an integrated 
transmission grid); or (2) if the applicant is a small public utility 
<SUP>35 that owns, operates, or controls an integrated transmission 
grid. With respect to the second category, a waiver would not be 
available if the utility is a member of a tight power pool, or other 
circumstances are present which indicate that a waiver would not be 
justified.<SUP>36 The Commission, in addressing situations where waiver 
is granted, further stated that:

    \34\ To avoid confusion, we will discuss the waiver standards as 
set out in Black Creek rather than in the First Waiver Order, 
because Black Creek modified the First Waiver Order's standards for 
waiver.
    \35\ To qualify as a small public utility, the applicant must 
meet the Small Business Administration definition of a small 
electric utility, i.e., one that is independently owned and disposes 
of no more than 4 million MWh annually.
    \36\ Black Creek, 77 FERC at 61,941; see also Midwest, 77 FERC 
at 61,854 (elaborating on the exception where the applicant is a 
member of a tight power pool).
---------------------------------------------------------------------------

Waiver 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.<SUP>37

    \37\ Black Creek, 77 FERC at 61,941 (citation to First Waiver 
Order omitted).
---------------------------------------------------------------------------

    Thus, the Commission has developed waiver criteria that take into 
account potential burdens on small entities and at the same time 
balance the need to prevent undue discrimination and affiliate abuse in 
interstate power markets. We believe that this flexible waiver approach 
adequately addresses the concerns raised on rehearing.
    In response to the requests for rehearing of Indianapolis P&L and 
Ohio Valley, this order on rehearing is not the proper vehicle for a 
company to request a company-specific waiver. 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.<SUP>38
---------------------------------------------------------------------------

    \38\ As noted above, supra  n.29, Indianapolis P&L's specific 
waiver request was addressed in the First Waiver Order and is 
pending rehearing. To date, Ohio Valley has not filed a specific 
request for waiver.
---------------------------------------------------------------------------

    TAPS expresses a concern that larger utilities may not allow 
smaller utilities to participate with them in a joint OASIS. We do not 
believe that any revisions to the OASIS Final Rule are necessary at 
this time to address TAPS' concern, because: (1) if the OASIS for its 
particular geographic area is unavailable, a utility may always choose 
to participate in an OASIS for a different region; <SUP>39 (2) smaller 
utilities should be able to meet their OASIS obligations cost-
effectively by joining with other small entities to hire the services 
of private vendors collectively; and (3) as mentioned above, the 
Commission will grant waivers of the OASIS requirements to small 
utilities under proper circumstances.
---------------------------------------------------------------------------

    \39\ We note that even though a majority of the OASIS nodes are 
joint nodes, these nodes nevertheless report data on a company-
specific basis that is accessed using each company's individual 
Internet World Wide Web (WWW) address. Thus, the geographic location 
of the Transmission Provider is irrelevant to locating data about 
that company's operations on the Internet.
---------------------------------------------------------------------------

    Moreover, we do not currently have any evidence that larger 
utilities will, in fact, attempt to exclude smaller utilities from 
participating in their OASIS sites. In fact, all indications are to the 
contrary.
    Thus, while we are not taking any steps based on TAPS' concerns, at 
this time, we will revisit this issue if it appears that Commission 
action is appropriate. We would also entertain a company-specific 
complaint that a larger utility is misusing the reciprocity provision 
to improperly withhold transmission service.

C. Section 37.2--Purpose

    The requests for rehearing did not specifically address this 
provision nor seek revision of this portion of the OASIS Final Rule.

D. Section 37.3--Definitions

    The OASIS Final Rule contains definitions of ``Transmission 
Provider'', ``Transmission Customer'', ``Responsible Party'', 
``Reseller'', ``Wholesale Merchant Function'', and 
``Affiliate''.<SUP>40 The requests for rehearing did not specifically 
address these definitions nor seek revision of this portion of the 
OASIS Final Rule. However, as discussed above, we are modifying the 
definition of ``wholesale merchant function'' in response to ConEd's 
request for rehearing or clarification.
---------------------------------------------------------------------------

    \40\ Additionally, Sec. 37.6(b)(1) provides definitions of 
``Posted Path'', ``Constrained Posted Path'', and ``Unconstrained 
Posted Path'' as used in Sec. 37.6. As these additional terms were 
defined in Sec. 37.6 of the OASIS Final Rule, we will discuss 
suggestions to clarify these terms in sections IV.G.1 and IV.G.2 
below.
---------------------------------------------------------------------------

E. Section 37.4--Standards of Conduct

    In the OASIS Final Rule, we adopted standards of conduct intended 
to accomplish four main objectives. First, we prohibited Transmission 
Providers from giving preferential access to information related to 
transmission prices and availability to employees of the public 
utility, or any affiliate, engaged in wholesale merchant functions. We 
accomplished this by: (a) Requiring that transmission-related 
information be made available to all customers (including employees of 
the public utility, and any affiliate, engaged in wholesale merchant 
functions) through OASIS postings available at the same time and on an 
equal basis; and (b)

[[Page 12490]]

prohibiting the employees of Transmission Providers and any affiliates 
from disclosing or obtaining non-public transmission-related 
information through communications not posted on the OASIS. Thus, 
employees engaged in wholesale merchant functions may only obtain 
information about transmission prices and availability from postings on 
the OASIS or from public sources equally available to all other 
customers.
    Second, we mandated that employees engaged in system operations and 
reliability functions must treat all customers in a fair and impartial 
manner and may not give any preferential treatment to the company's (or 
its affiliates') employees conducting wholesale merchant functions. 
This requirement includes not disclosing market information about a 
customer and its activities to other customers in the course of 
responding to requests for transmission service.
    Third, we required the functional unbundling of the transmission 
operations and wholesale merchant functions of public utilities and 
their affiliates so that those employees charged with system operations 
and reliability would be free to operate the system impartially for the 
benefit of all customers, including the Transmission Provider 
itself.<SUP>41
---------------------------------------------------------------------------

    \41\ As explained in the OASIS Final Rule, functional unbundling 
seeks to ensure that the same employee is not responsible for 
performing both wholesale merchant functions and system operation 
functions at the same time. See OASIS Final Rule, 61 FR at 21,744-
48. These functions are to be performed by separate employees and 
the standards of conduct provide that they are prohibited from 
communicating with each other about transmission-related matters 
unless they do so through the OASIS. See Secs. 37.4(a) and 37.4(b).
---------------------------------------------------------------------------

    Fourth, to ensure that the OASIS Final Rule would not compromise 
reliability, we created an exemption, in emergency circumstances 
affecting system reliability, that allows system operators to take 
whatever steps are necessary to keep the system in operation.
    Finally, we warned that the standards of conduct are to be 
interpreted consistent with common sense, prudence, and caution, and 
that the burden is on entities subject to the rules to design 
procedures and safeguards and to take all necessary actions to ensure 
compliance. Those who have questions on these issues may contact the 
Enforcement Task Force Hotline at 202-208-1390 to obtain informal 
advice on implementing the standards of conduct.
1. Contacts Between Employees Providing Ancillary Services and System 
Operators
    The OASIS Final Rule defines the ``wholesale merchant function'' at 
Sec. 37.3(e). The definition contains no specific reference to, or 
exclusion of, ancillary services. In the Open Access Final Rule, the 
Commission concluded that six ancillary services must be included in an 
open access transmission tariff.<SUP>42
---------------------------------------------------------------------------

    \42\ These are: (1) Scheduling, system control and dispatch 
service; (2) reactive supply and voltage control from generation 
sources service; (3) regulation and frequency response service; (4) 
energy imbalance service; (5) operating reserve--spinning reserve 
service; and (6) operating reserve--supplemental reserve service.
    In the Open Access Final Rule, the Commission has determined 
that the Transmission Provider must provide and the Transmission 
Customer must purchase from the Transmission Provider the first two 
services listed above, subject to conditions set out in Order No. 
888. The Transmission Provider must offer the remaining four 
services to the Transmission Customers upon request.
---------------------------------------------------------------------------

Rehearing Request

    Allegheny argues that an employee of the Transmission Provider who 
is responsible for providing customers with ancillary services mandated 
by the Open Access Final Rule should not, for that reason, be deemed to 
be a ``merchant employee'' excluded from contact with system operators 
under Order No. 889. <SUP>43
---------------------------------------------------------------------------

    \43\ Allegheny Rehearing Request at pp. 9-10.
---------------------------------------------------------------------------

Commission Conclusion

    We disagree with Allegheny's interpretation of the OASIS standards 
of conduct. Under the standards of conduct, employees who are 
responsible for providing ancillary services are not (without regard to 
their actual job functions) uniformly deemed to be, or not to be, 
wholesale merchant employees. To the contrary, whether these employees 
are deemed to be wholesale merchant employees, or not, depends on the 
nature of their job functions.
    The Transmission Provider's sale of ancillary services in support 
of its provision of basic transmission service is not a wholesale power 
merchant function for purposes of Order No. 889. This is because the 
provision of ancillary services is essential for providing basic 
transmission service. However, the sale of ancillary service not in 
support of the Transmission Provider's provision of basic transmission 
service is a wholesale merchant function for purposes of Order No. 889. 
Thus, if an employee is marketing an ancillary service independent of 
the Transmission Provider's obligations to provide basic transmission 
service, then that employee would be providing a wholesale merchant 
function and would be subject to the applicable requirements pertaining 
to wholesale merchant employees under the standards of conduct.
    Therefore, we reject Allegheny's suggestion that our current 
regulations categorically deem any employees involved in the provision 
of ancillary services as not being wholesale merchant employees, 
without regard to their actual job responsibilities.
2. Contacts Between Generation Control Employees and Transmission 
Operations and Wholesale Merchant Employees
    Among other matters, the OASIS standards of conduct preclude 
employees engaged in wholesale merchant functions from improperly 
communicating with employees engaged in transmission system operations 
or reliability functions. However, we did not extend Order No. 888 or 
the OASIS Final Rule to require the corporate unbundling of 
transmission and generation control functions or to mandate the 
divestiture by Transmission Providers of their generation assets.

Rehearing Request

    CCEM argues that the Commission erred by not drafting the standards 
of conduct to preclude generation control employees from being a 
conduit for improper communications between transmission operations 
personnel and wholesale merchant personnel. <SUP>44
---------------------------------------------------------------------------

    \44\ CCEM Rehearing Request at pp. 10-11.
---------------------------------------------------------------------------

Commission Conclusion

    As we stated above, in our discussion of whether employees 
responsible for providing ancillary services are to be deemed wholesale 
merchant employees, what limitations are placed on an employee's 
conduct under the standards of conduct depends on that employee's 
actual job functions and activities, rather than that employee's job 
title. <SUP>45 In the same way, whom a generation control employee may 
or may not communicate with depends on the respective job functions of 
that generation control employee and the employee(s) with whom he or 
she intends to communicate. Generation control employees whose job 
responsibilities involve wholesale merchant functions would be 
precluded from having pertinent off-the-OASIS communications with 
employees

[[Page 12491]]

performing system operations and reliability functions.
---------------------------------------------------------------------------

    \45\ See supra discussion in section IV.E.1 above.
---------------------------------------------------------------------------

    Additionally, notwithstanding CCEM's concerns, the standards of 
conduct already preclude any employee from acting as a conduit for 
improper communications between transmission operations employees and 
wholesale merchant employees. Furthermore, if these activities were 
carried out by a non-employee (e.g., an outside attorney or 
consultant), they nevertheless would constitute a violation of the 
standards of conduct by the involved transmission operations 
employee(s), the involved wholesale merchant employee(s), and their 
employer. This being the case, we reject CCEM's proposal as 
unnecessary.
3. Monitoring the Standards of Conduct
    The preamble's discussion of the standards of conduct and the 
regulations at Sec. 37.4 are intentionally directed at the 
responsibilities of the Transmission Providers subject to these rules 
rather than the Commission's plans to monitor compliance and pursue 
enforcement strategies.

Rehearing Requests

    APPA and Blue Ridge argue that monitoring of the standards of 
conduct is essential and that the Commission must establish and 
publicize a plan to do so. <SUP>46 APPA argues that reliance on utility 
self monitoring is not sufficient.
---------------------------------------------------------------------------

    \46\ APPA Rehearing Request at pp. 11-19, Blue Ridge Rehearing 
Request at p. 39.
---------------------------------------------------------------------------

Commission Conclusion

    We agree with APPA and Blue Ridge that it is important for the 
Commission to monitor compliance with the standards of conduct 
carefully and that self monitoring may not be fully sufficient to 
accomplish this. Accordingly, we are amending Secs. 37.4(b)(5)(iii) and 
37.6(g)(4) to require the posting on the OASIS of information from a 
Transmission Provider that details the circumstances when it exercises 
its discretion in applying any terms of the tariff (and which 
Transmission Providers already are required to maintain pursuant to 
Sec. 37.4(b)(5)(iii)). This will assist the Commission in monitoring 
whether the standards of conduct are being met. Consistent with 
Sec. 37.7(b), which governs the retention period for audit data, this 
information must remain available for download on the OASIS for a 
specified period, and must remain available upon request for three 
years from the date when such information is first posted. <SUP>47 We 
request that the How Working Group propose the necessary template to be 
included in the Standards and Protocols document.
---------------------------------------------------------------------------

    \47\ Under Sec. 37.7(b), all audit data currently must remain 
available for download for 90 days. Later in this order, we shorten 
the retention period for making ATC/TTC postings available for 
download to 20 days, with the data to be made available upon request 
for three years. See discussion in section IV.H below.
---------------------------------------------------------------------------

    As to APPA's and Blue Ridge's specific suggestions that we should 
modify the OASIS Final Rule to address the Commission's oversight plans 
and functions, we do not believe that this would be appropriate. 
Although the Commission is well aware of the importance of its 
enforcement responsibilities, and will remain vigilant in reviewing the 
operation of OASIS sites and compliance with the standards of conduct, 
the purpose of the OASIS Final Rule is to detail the responsibilities 
of the regulated community and not those of the Commission.
4. Adequacy of Emergency Exception
    As explained above, the OASIS standards of conduct include an 
exception, in emergency circumstances affecting system reliability, 
that allows system operators to take whatever steps are necessary to 
keep the system in operation.

Rehearing Request

    El Paso argues that the standards of conduct's emergency exception 
is inadequate; contingencies may arise daily that require a system 
operator to react promptly to unanticipated losses of generation units. 
Therefore, operators should be allowed to buy and sell current hour and 
next hour power (to preserve system reliability). El Paso does not 
oppose the separation of functions as applied to longer-term 
transactions (i.e., transactions involving transmission service beyond 
the current hour and next hour). <SUP>48
---------------------------------------------------------------------------

    \48\ El Paso Rehearing Request at pp. 1-4.
---------------------------------------------------------------------------

Commission Conclusion

    We reject the proposal to allow operators to buy for resale at 
wholesale and sell at wholesale next hour power on a routine basis, 
without regard for the separation of functions required by the 
standards of conduct. We find this proposal too broad and find that it 
has too much potential for abuse. However, as explained more fully 
below, the regulations do not dictate what group of employees is to 
have responsibility for making purchases on behalf of bundled retail 
customers. For example, the transmission operations and reliability 
function may be assigned responsibility for making purchases on behalf 
of bundled retail customers.
5. Short-Term Economy Energy Purchases
    FIT Utilities do not object generally to functional unbundling; 
however, they argue that the system operator should be allowed to make 
short-term economy energy purchases in order to maintain system 
reliability. <SUP>49 FIT Utilities further argue that, while the OASIS 
Final Rule does not require the physical separation of transmission and 
generation dispatchers, it does effectively rewrite generation 
dispatchers' jobs to exclude the purchase for resale and sale at 
wholesale of energy in hourly interchange markets. FIT Utilities argue 
that a generation dispatcher needs to know loads on transmission lines 
on an instantaneous basis to assess whether to increase or decrease 
outputs from particular generation facilities. FIT Utilities argue that 
generators are often run, not for energy, but for voltage support or to 
otherwise stabilize the transmission system.
---------------------------------------------------------------------------

    \49\ FIT Utilities Rehearing Request at pp. 39-40.
---------------------------------------------------------------------------

    They argue that, in addition to reliability concerns, system 
operators also worry about keeping transactions economical. They argue 
that separating the functions relating to short-term energy purchases 
(for resale) makes this task harder, at a substantial cost to 
consumers. They continue that allowing a dispatcher to buy power would 
not hurt competition, as long as the dispatcher cannot also sell 
power.<SUP>50 They add that if a dispatcher buys power that offsets 
higher cost utility generated power, this helps everyone.
---------------------------------------------------------------------------

    \50\ FIT Utilities Rehearing Request at p. 42.
---------------------------------------------------------------------------

    For these reasons, FIT Utilities argue that the OASIS Final Rule 
should be revised to retain a prohibition against a dispatcher selling 
power while allowing the dispatcher to buy power. FIT Utilities argue 
that, at a minimum, the dispatcher should be able to buy power in 
hourly economic energy markets to serve load.<SUP>51 They argue that if 
the Commission has a concern that this would somehow be anti-
competitive, then a utility should be allowed to set up a computer 
system to make such purchases automatically. They argue that the 
Commission should be concerned with both reliability and price and 
should aim for the lowest cost supply possible.
---------------------------------------------------------------------------

    \51\ FIT Utilities Rehearing Request at p. 43.
---------------------------------------------------------------------------

Commission Conclusion

    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

[[Page 12492]]

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.
    To avoid any confusion, we are modifying Sec. 37.4(b)(5)(iv) to 
substitute the phrase ``sales 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 Sec. 37.4(b)(5)(iv).
    Moreover, nothing in the standards of conduct prohibits a public 
utility subject to the rule from arranging to have the same data about 
the company's generation sources and load simultaneously fed to both 
transmission system operators and merchant employees. Thus, if the 
company elects to have wholesale merchant employees perform the 
function of making purchases to serve bundled retail native load, this 
can be done without necessitating any change in the standards of 
conduct. Data received by system operators about the activities of 
third parties may not be conveyed to wholesale merchant employees 
except through postings on the OASIS equally available to all OASIS 
users.
6. Tight Pools
    NY MU argues that the Commission erred in not requiring operational 
unbundling, at least for tight pools, which NY MU asserts includes 
requiring that the transmission component of retail rates be treated as 
if the rates were based on the use of the pool-wide pro forma tariff of 
the Open Access Final Rule.<SUP>52
---------------------------------------------------------------------------

    \52\ NY MU Rehearing Request at pp. 5, 7. See Open Access pro 
forma tariff at p. 5.
---------------------------------------------------------------------------

Commission Conclusion

    As further discussed in Order No. 888-A,<SUP>53 the Commission 
stands by its decision in the Open Access Final Rule that functional 
unbundling, along with the flexible safeguards contained in the Final 
Rule, is a reasonable and workable means of assuring non-discriminatory 
open access transmission. The Commission has not found it necessary to 
adopt a more intrusive and potentially more costly approach at this 
time based on speculative allegations that functional unbundling may 
not work and that more severe measures may be needed.
---------------------------------------------------------------------------

    \53\ See Order No. 888-A at section IV.A.
---------------------------------------------------------------------------

7. Clarification of Sec. 37.4(b)(5)(iv)
    As modified above, Sec. 37.4(b)(5)(iv) requires that a Transmission 
Provider not, through its tariffs or otherwise, give preference to 
sales made to any person for resale made by the wholesale merchant 
function or by any affiliate, over the interests of any other wholesale 
customer in matters relating to the sale of wholesale transmission 
service.

Rehearing Request

    SoCal Edison asks the Commission to clarify that the OASIS rule 
(Sec. 37.4(b)(5)(iv)) was not intended to require the Transmission 
Provider or network customer to charge itself for transmission for its 
economy energy purchases or to assign to those purchases the same 
curtailment priority assigned to other non-network, non-firm point-to-
point transactions. <SUP>54
---------------------------------------------------------------------------

    \54\ SoCal Edison Rehearing Request at p. 24. On July 18, 1996, 
SoCalGas filed a request for clarification responsive to SoCal 
Edison's rehearing request, which argues that Sec. 37.4(b)(5)(iv), 
together with the Open Access Final Rule, provide for comparability 
and that: ``a Transmission Provider is not entitled to accord itself 
special priority, special services, or special prices, merely 
because it owns the transmission facilities, and the Transmission 
Provider is not permitted to import wholesale power `for free'; 
however, the Transmission Provider may enjoy any priorities or 
advantages provided to it and similarly situated customers by the 
express terms of its transmission tariff.''
    SoCalGas' arguments overlook that SoCal Edison itself concedes 
that if Sec. 37.4(b)(5)(iv) is interpreted in harmony with 
Commission precedent, it would: ``operate to ensure that the 
Transmission Provider would not give preference to its own purchases 
and sales over that of other similarly situated customers (e.g., by 
assigning a higher curtailment priority to its own economy energy 
purchases than it would assign to an identical economy energy 
purchase by a network customer).'' Thus, the issues raised in 
SoCalGas' request for clarification are not before us.
---------------------------------------------------------------------------

Commission Conclusion

    Turning first to the narrow issue raised by SoCal Edison's request 
for rehearing, we clarify that Sec. 37.4(b)(5)(iv) was intended to be 
consistent with the Open Access pro forma tariff provisions of Order 
No. 888. Moreover, we intended that the question raised by SoCal Edison 
would be answered by reference to the provisions of the Open Access pro 
forma tariff. Thus, Sec. 37.4(b)(5)(iv) does not require the 
Transmission Provider or network customer to charge itself for 
transmission for its economy energy purchases. Nor does it require that 
they assign to those purchases the same curtailment priority assigned 
to other non-network, non-firm point-to-point transactions. Under the 
Open Access pro forma tariff, if purchases are for bundled retail 
sales, then the Transmission Provider is not required to charge itself 
for its economy energy purchases. By contrast, if the purchases are for 
wholesale sales, then the Transmission Provider must charge itself for 
the transmission. The same delineation would also apply to curtailment 
priority.
    Moreover, we clarify that Sec. 37.4(b)(5)(iv) was not intended to 
rewrite the rules regarding utilities' purchases and priorities for 
bundled retail customers, nor to set aside the rules prescribed in 
section 1.11 of the Open Access pro forma tariff.<SUP>55
---------------------------------------------------------------------------

    \55\ Section 1.11 of the Open Access pro forma tariff is also 
the subject of a number of requests for rehearing that are addressed 
in Order No. 888-A at section IV.C.1.
---------------------------------------------------------------------------

8. Discounts
    The issue of what discounts must be provided by a Transmission 
Provider who offers a discount to its affiliates or its own wholesale 
merchant function was addressed in the Open Access Final Rule. The 
matter also was discussed in the OASIS Final Rule, but only to the 
extent that it related to what information must be posted on the 
OASIS.<SUP>56 In Sec. 37.4(b)(5)(v), we mandated that when a 
Transmission Provider offers a discount to its wholesale merchant 
function or any affiliate, then it must, at the same time, post on the 
OASIS an offer to provide the same discount to all Transmission 
Customers on the same path and on all unconstrained transmission 
paths.<SUP>57 The posting requirement corresponding to this obligation 
to offer discounts was contained in Sec. 37.6(c)(3). We also found, in 
Sec. 37.6(c)(3), that discounts offered to non-affiliates must be 
posted within 24 hours of when available transmission capability (ATC) 
is adjusted in response to the transaction.
---------------------------------------------------------------------------

    \56\ In Order No. 889, we found that if a Transmission Provider 
offers a discount to an affiliate, or attributes a discounted 
transmission service rate to its own wholesale transactions, then 
the Transmission Provider must, at the same time, post on the OASIS 
an offer to provide the same discount to all eligible customers. If 
a Transmission Provider offers discounts to non-affiliates, it must 
offer to do so on a basis that is not unduly discriminatory.
    \57\ In Order No. 888-A, we are addressing arguments that we 
should revise the requirement to offer the same discount to all 
Transmission Customers on the same path and on all unconstrained 
transmission paths.
---------------------------------------------------------------------------

    The requests for rehearing address both: (1) what discounts must be 
offered; and (2) what postings must accompany discount offers. As

[[Page 12493]]

explained in Order No. 888-A, we have decided to revise our policy on 
discounts of transmission services, and to apply this same policy, with 
the exception concerning paths, to ancillary services provided by the 
Transmission Provider in support of its provision of basic transmission 
service. To implement this revised policy, we are making changes to the 
standards of conduct and to the posting of discounts under Sec. 37.6. 
We address changes to the standards of conduct here, and changes to 
Sec. 37.6 in section IV.G.6 below.
    Under our revised discount policy, three principal requirements are 
appropriate. 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. This 
requirement, which will ensure that all potential Transmission 
Customers under the Open Access pro forma tariff will have equal access 
to discount information, will guard against the Transmission Provider's 
wholesale merchant function or an affiliate gaining an unfair timing 
advantage concerning the availability of discounts.
    Second, we will require that any customer-initiated requests for 
discounts of transmission and/or ancillary services occur solely by 
posting on the OASIS, regardless of whether the customer is the 
Transmission Provider's wholesale merchant function, an affiliate, or a 
non-affiliate. We will permit customer-initiated requests for discounts 
but will require that such requests be visible (via posting on the 
OASIS) to all market participants.
    Third, we will require that, once the Transmission Provider and 
customer agree to a discounted transaction for transmission and/or 
ancillary services, the details be immediately posted on the OASIS. 
This requirement will be equally applicable regardless of whether the 
customer is the Transmission Provider's wholesale merchant function, an 
affiliate, or a non-affiliate.
    Additionally, we believe that any ``negotiation'' between a 
Transmission Provider and a potential customer should take place on the 
OASIS, and should be visible to all market participants, and we will 
revise our regulations to accomplish this as soon as practicable. To 
this end, we direct the How Working Group, by no later than June 2, 
1997, to propose: (1) Whatever changes are needed to the Standards and 
Protocols document; and (2) the earliest date when the industry can 
meet such a requirement during Phase I.
    In Secs. 37.4(b)(5)(v) and 37.4(b)(5)(vi), we required Transmission 
Providers to post on the OASIS any offers they made to their wholesale 
merchant function or to their affiliates of a discounted price for 
transmission services or ancillary services. We are now deleting these 
provisions because under our revised discount policy, the distinction 
between discounts to affiliates and discounts to non-affiliates has 
been abandoned.
    As discussed above, we are addressing the modifications to the 
posting requirements in Sec. 37.6 in Section IV.G.6 below.

F. Section 37.5--Obligations of Transmission Providers and Responsible 
Parties

    In the OASIS regulations, the Commission requires Transmission 
Providers to operate an OASIS, either individually or jointly with 
other Transmission Providers. The Transmission Provider may delegate 
this responsibility to a Responsible Party such as another Transmission 
Provider, an Independent System Operator, a Regional Transmission 
Group, a Regional Reliability Council, or a third-party operator. 
Nevertheless, each Transmission Provider remains responsible for 
compliance, regardless of whether it establishes its own OASIS or 
participates in a joint OASIS.

Rehearing Requests

    TAPS and TDU Systems argue that the Commission should require 
Transmission Providers to establish a regional OASIS because individual 
utility OASIS sites are inefficient. They contend that, as the number 
of OASIS sites increases, OASIS postings become less meaningful and the 
accomplishments of the OASIS Final Rule lessen.<SUP>58
---------------------------------------------------------------------------

    \58\ TAPS Rehearing Request at pp. 8-9 and TDU Systems Rehearing 
Request at p. 85.
---------------------------------------------------------------------------

Commission Conclusion

    At this juncture, the Commission continues to believe it 
appropriate to encourage, but not require, regional OASIS sites. It is 
the Commission's understanding that most utilities are participating in 
regional OASIS sites. This issue can be revisited in Phase II of OASIS, 
if a significant number of utilities fail to join a regional OASIS and 
this results in significant inefficiency in bulk power markets.

G. Section 37.6--Information to be Posted on an Oasis

1. Definition of ``Posted Path''
    Section 37.6(b)(1)(i) defines a posted path as: (1) any control 
area to control area interconnection; (2) any path for which service is 
denied, curtailed or interrupted for more than 24 hours in the past 12 
months; and (3) any path for which a customer requests the posting of 
ATC or total transmission capability (TTC). For posted paths requested 
by customers, the paths must be posted for 180 days and the posting 
must continue after that until 180 days elapse from the most recent 
request for service over the path.

Rehearing Requests

    CCEM argues that the Commission erred by requiring posting of ATC 
solely at interfaces between control areas. CCEM further argues that 
the Commission should require the posting of paths across control 
areas.<SUP>59
---------------------------------------------------------------------------

    \59\ /CCEM Rehearing Request at pp. 7-8.
---------------------------------------------------------------------------

    MAPP argues that the Commission should reconsider the requirement 
to post ATC between control areas or, in the alternative, should grant 
it a waiver of this requirement. MAPP suggests that posted paths should 
be defined as paths between zones determined by transmission 
constraints. MAPP argues that defining posted paths in this manner 
would be more consistent with the MAPP regional flow-based transmission 
arrangement.<SUP>60
---------------------------------------------------------------------------

    \60\ /MAPP Rehearing Request at pp. 4-10.
---------------------------------------------------------------------------

    EEI asks the Commission to revise the criteria for a customer-
requested posted path. EEI argues that customers should have to make a 
service request over the path within 180 days of asking that the path 
be a posted path or face a penalty.<SUP>61
---------------------------------------------------------------------------

    \61\ /EEI Rehearing Request at p. 53.
---------------------------------------------------------------------------

Commission Conclusion

    The Commission will not require the posting of all paths across 
control areas, since customers can request to have ATC and TTC posted 
for any path. Given that customers can request to have ATC and TTC 
posted for any path, adopting CCEM's proposal would burden OASIS sites 
with a very large number of posted paths that may have little 
commercial value.
    As to MAPP's request to drop the requirement for posting ATC for 
paths between control areas, MAPP's concern appears to relate to 
business relationships particular to the MAPP agreement. MAPP's request 
for a waiver is not based on a lack of traffic over its system. It is 
based on the fact that MAPP's control areas do not correspond to the 
service territories of its members (MAPP has 26 utilities and 14 
control areas). Some of its control areas cover the generation of more 
than one utility. Other control areas overlap the same

[[Page 12494]]

geographic area, with each control area covering the generation of a 
separate utility.
    Under MAPP's proposal, it will provide pool-wide transmission 
service based on a MW mile methodology. It proposes to determine the 
transmission availability for known constrained interfaces or paths and 
assess the impact on its member systems of each transaction based on 
the POD and POR for each transaction. MAPP argues that the Open Access 
Final Rule was intended to accommodate flow based pricing methods and 
that, under the circumstances, it makes sense for its member systems to 
make postings for area to area interfaces rather than control area to 
control area interfaces. MAPP argues that we should either change our 
rules for posting between control areas or grant it a waiver.
    After reviewing MAPP's arguments, we do not believe that it would 
be appropriate to modify the ATC posting requirements to address a 
MAPP-specific issue. However, the Commission will grant MAPP a limited 
waiver of the control area to control area ATC/TTC posting requirement 
(in Sec. 37.6(b)(1)(i)) based on the particular circumstances presented 
by the MAPP system. This waiver should not harm Transmission Customers 
because MAPP provides pool wide transmission service using a flow based 
(single MW-mile) pricing methodology for the entire system and proposes 
to determine transmission availability for all known constrained 
interfaces or paths. Moreover, this waiver only applies to postings for 
intra-MAPP interfaces. MAPP will still be required to post ATC and TTC 
for control area to control area paths that connect its member systems 
with neighboring transmission systems. Finally, MAPP customers can 
always request that ATC/TTC be posted for a specific path including a 
control area to control area path (in which case MAPP would be required 
to post the information for the path on its OASIS node).
    Turning to EEI's suggested limitations on customers requesting that 
paths be posted, we find that requiring a customer to request service 
over any path that it asks to be posted places too heavy a burden on 
customers. However, the Commission may reconsider this requirement if 
we find that customers abuse the system by requesting postings for too 
many paths over which no requests for service are made.
2. Definition of ``interconnection''
    ``Posted path'' is defined in Sec. 37.6, in part, as ``any control 
area to control area interconnection.'' However, the regulation does 
not provide a definition of ``interconnection''.

Rehearing Request

    EEI and Public Service Co of CO ask the Commission to clarify that 
the term ``interconnection'', in the definition of ``posted path'' in 
Sec. 37.6, includes lines connecting two systems or control areas 
rather than just one line.<SUP>62
---------------------------------------------------------------------------

    \62\ EEI Rehearing Request at p. 48 and Public Service Co of CO 
Rehearing Request at pp. 1-2.
---------------------------------------------------------------------------

Commission Conclusion

    To avoid any confusion, we clarify that the term 
``interconnection'' in the definition of posted path means all 
facilities connecting two adjacent control areas and we are amending 
Sec. 37.6 accordingly. This is consistent with the definition of 
``interconnection'' in NERC's Glossary of Terms: ``the facilities that 
connect two systems or Control Areas.''<SUP>63
---------------------------------------------------------------------------

    \63\ NERC's Glossary of Terms, August 1996.
---------------------------------------------------------------------------

3. ATC Supporting Information
    The OASIS regulations require that the Responsible Party make all 
data used to calculate ATC and TTC for any constrained path publicly 
available within one week of the ATC/TTC posting.
a. Disclosure of Data Supporting Calculations of ATC and TTC

Rehearing Request

    EEI argues that the requirement in Sec. 37.6(b)(2)(ii) to disclose 
data supporting calculations of ATC and TTC provides competitors with 
backdoor access to sensitive proprietary information. It claims that 
the Commission intended to allow companies to keep confidential 
information such as generation run status and the maintenance schedules 
for generation and transmission.<SUP>64
---------------------------------------------------------------------------

    \64\ EEI Rehearing Request at pp. 49-52.
---------------------------------------------------------------------------

Commission Conclusion

    EEI is correct that the Commission declined in the OASIS Final Rule 
to require the posting of information about the run status of 
generation and transmission facilities. However, EEI incorrectly 
attributes the Commission's decision to a finding on the claimed 
proprietary nature of this information. The Commission did not require 
the same-time posting of facility status information because the 
Commission did not believe this information was needed for Phase I 
implementation. The OASIS Final Rule states that the Commission may 
reconsider the issue in Phase II.
    On rehearing, EEI argues that the same considerations about 
commercial sensitivity that led the Commission to decline to order the 
same-time posting of facility status also dictate that this information 
should not be divulged as part of the data supporting ATC calculations. 
We reject this argument for three reasons. First, as shown above, EEI's 
argument is based on a false premise as to why the Commission declined 
to order the same-time posting of information on facility run status.
    Second, even if, arguendo, we accepted EEI's contention that the 
same-time posting of facility run status is commercially sensitive, 
this still would not suffice to show that making ATC supporting 
information available on request and after seven days would have any 
adverse competitive impact. Whatever commercial sensitivity the 
information might have would be greatly diminished by the fact that 
seven days need to elapse before a request for the information can be 
made. In our view, this delay ensures that no realistic concern remains 
about the competitive consequences of releasing this information.
    Finally, the purpose of ATC supporting information is to ensure 
that Transmission Customers have confidence in ATC/TTC postings. The 
OASIS and the Commission's functional unbundling policy depend on 
customers being able to rely upon the accuracy of ATC postings. The 
availability of ATC supporting information is essential for building 
and maintaining this confidence. Thus, the concerns raised by EEI about 
commercial sensitivity are, in our judgment, outweighed by the public 
interest served by making this information available, upon request, 
after seven days. The Commission will not further restrict the 
availability of information needed to support ATC/TTC calculations and 
this information will continue to be available to customers upon 
request after seven days.
b. Disclosure of Data on Nonfirm ATC

Rehearing Request

    EEI also argues against disclosing supporting data on nonfirm ATC 
because it would not exist but for the collection of data to calculate 
firm ATC and TTC.<SUP>65
---------------------------------------------------------------------------

    \65\ EEI Rehearing Request at p. 52.
---------------------------------------------------------------------------

Commission Conclusion

    If, as EEI claims, data supporting the calculation of nonfirm ATC 
does not exist in an independent form and is a residual of calculating 
firm ATC, then

[[Page 12495]]

requiring a Transmission Provider to document how it calculates nonfirm 
ATC should be relatively simple and should not require much additional 
information. Therefore, the Commission requires that supporting 
information for firm and nonfirm information be available as required 
in Sec. 37.6(b)(2)(ii).
c. Time Limits for Disclosure of Utility Generation Data
    In the OASIS Final Rule, the Commission rejected arguments by NUCOR 
that the Commission should require data on generation costs to be 
posted on OASIS on a same-time basis.<SUP>66
---------------------------------------------------------------------------

    \66\ See OASIS Final Rule, 61 FR at 21,746. See also OASIS Final 
Rule, 61 FR at 21,754-55, where we decided not to require the 
posting of generator run status. Although the OASIS Final Rule does 
not require the posting of utility generation data, per se, this 
data may be required to be reported, after-the-fact, as part of the 
Transmission Provider's supporting data for ATC calculations.
---------------------------------------------------------------------------

Rehearing Request

    On rehearing, NUCOR argues again that the Commission should require 
same-time disclosure of utility generation data used for economic 
dispatch.<SUP>67
---------------------------------------------------------------------------

    \67\ NUCOR Rehearing Request at pp. 15-18.
---------------------------------------------------------------------------

Commission Conclusion

    In the OASIS Final Rule, we rejected the argument that we should 
require the same-time disclosure of utility generation data used for 
economic dispatch based on a balancing of the need for the information, 
the claimed commercial sensitivity of the information, and the desire 
to avoid, to the extent possible, having public utilities reporting 
generation data that their competitors may not be required to report. 
We concluded that the information was not necessary and that during 
Phase I we would limit OASIS postings to essentials.
    On rehearing, NUCOR attempts to buttress its argument by pointing 
out that utilities will face financial pressure to maintain or enhance 
their market share in electric generation and that the Commission's 
enforcement of the standards of conduct could be enhanced by requiring 
the same-time disclosure of generation data. NUCOR expresses the 
concern that after-the-fact complaints, unearthed based on a review of 
audit files, may be neither feasible nor practical.
    NUCOR's arguments about discriminatory treatment are not new. They 
highlight the need for the Commission and other OASIS users to review 
this information to ensure that system operators have not conducted 
system operations in violation of the OASIS standards of conduct. NUCOR 
argues that only by requiring the same-time disclosure of utility 
generation data used for economic dispatch can we be sure that unduly 
preferential treatment by means of a Transmission Provider's own 
generation will not occur. We do not quarrel with the possibility of 
affiliate abuse raised by NUCOR. However, NUCOR still has not persuaded 
us that it is necessary to post these data. If experience shows that 
the concerns raised by NUCOR are a significant problem, we can consider 
further actions in the future.<SUP>68
---------------------------------------------------------------------------

    \68\ As to NUCOR's contention that after-the-fact review of 
utility generation data would be ineffectual, we note that if we 
required the contemporaneous posting of such information on the 
OASIS (as proposed by NUCOR), our review of any complaint filed as a 
result of such information would still be conducted after-the-fact.
---------------------------------------------------------------------------

d. Reporting of Network Service Usage

Rehearing Request

    CCEM argues that the Commission erred by not requiring Transmission 
Providers to report network service usage monthly.<SUP>69
---------------------------------------------------------------------------

    \69\ CCEM Rehearing Request at p. 10.
---------------------------------------------------------------------------

Commission Conclusion

    CCEM does not state what it means by monthly network service usage 
or explain why the Transmission Provider should be required to report 
the data. In any event, we note that the current measure of network 
usage is load (i.e., billing is based on load-ratio usage). To the 
extent that utilities use the monthly load data of network customers in 
calculating ATC, utilities will include load data in the ATC/TTC 
supporting information required in Sec. 37.6(b)(2)(ii).
4. Posting Firm and Nonfirm ATC Separately
    Section 37.6(b)(3) of the OASIS regulations addresses the posting 
of ATC and TTC for constrained and unconstrained posted paths. For 
constrained posted paths, the regulations contain separate posting 
requirements for firm and nonfirm ATC. For unconstrained posted paths, 
the posting requirements for firm and nonfirm ATC are the same. Section 
37.6(b)(3)(ii) does not specifically mention firm and nonfirm ATC.

Rehearing Requests

    CCEM and the EPRI/NERC Working Group argue that the Commission 
erred by failing to require the separate posting of firm ATC and 
nonfirm ATC for unconstrained posted paths.<SUP>70
---------------------------------------------------------------------------

    \70\ CCEM Rehearing Request at p. 5 and EPRI/NERC Working Group 
Rehearing Request at p. 9. For purposes of submitting their request 
for rehearing, the How Working Group and the What Working Group 
combined their efforts and submitted a joint request for rehearing 
on behalf of ``the Industry Management Process on How to Implement 
Transmission Services Information Networks'' (EPRI/NERC Working 
Group).
---------------------------------------------------------------------------

Commission Conclusion

    The regulations inadvertently left out a reference to firm and 
nonfirm ATC in the posting requirements for unconstrained posted paths. 
The regulations at Sec. 37.6(b)(3)(ii) will be modified to correct this 
and to clarify that firm and nonfirm ATC for unconstrained paths, like 
firm and nonfirm ATC for constrained paths, must be posted separately.
5. Minimum Term of Firm Point-to-Point Transmission Service
    Section 13.1 of the Open Access Final Rule's pro forma tariff 
specifies that the minimum required term for Firm Point-to-Point 
Transmission Service is one day.<SUP>71 By contrast, Sec. 37.6(b)(3)(i) 
of the OASIS regulations requires the posting of firm and nonfirm ATC 
on constrained paths for the next hour and for the next 168 hours 
(i.e., for the next week).
---------------------------------------------------------------------------

    \71\ In Order No. 888-A, the Commission addresses the issue of 
reducing the minimum term for firm point-to-point transmission 
service from one day to one hour.
---------------------------------------------------------------------------

Rehearing Requests

    CCEM argues that the Commission erred by not requiring Transmission 
Providers to offer hourly firm transmission service.<SUP>72 CCEM argues 
that, if the Commission agrees to change the Open Access pro forma 
tariff to allow for hourly firm transmission service, then the 
requirement to post hourly transmission service requests on the OASIS 
should be deferred until the reliability of OASIS sites is established.
---------------------------------------------------------------------------

    \72\ CCEM Rehearing Request at pp. 3-4.
---------------------------------------------------------------------------

    EPRI/NERC Working Group argues that the posting of ATC and other 
information should be consistent with a utility's Open Access pro forma 
tariff. They argue that, as the minimum term for firm ATC is one day 
under the Open Access pro forma tariff, firm ATC should only be 
required to be posted daily instead of hourly. Hourly firm ATC would be 
posted only if it is offered under a revised Open Access tariff.<SUP>73
---------------------------------------------------------------------------

    \73\ EPRI/NERC Working Group Rehearing Request at p. 9.
---------------------------------------------------------------------------

Commission Conclusion

    The OASIS regulations currently require the posting of hourly firm 
ATC even though the shortest mandated term for firm transmission 
service under the Open Access pro forma tariff is one day. The 
Commission believes hourly posting provides useful information to

[[Page 12496]]

customers about the availability of daily service and the likelihood of 
curtailment during particular hours during the day.
    If a Transmission Provider voluntarily offers hourly firm service 
in its Open Access pro forma tariff, it must offer the service through 
postings on its OASIS. Section 37.6(c)(1) requires Transmission 
Providers to ``post prices and a summary of the terms and conditions 
associated with all transmission products offered to Transmission 
Customers.'' [Emphasis added]. The OASIS regulations do not, however, 
control what services must be provided by Transmission Providers. This 
is covered by the Open Access Final Rule.
6. Posting of Discounts
    Under the OASIS Final Rule, Sec. 37.6(c)(3) of the OASIS 
regulations requires a Transmission Provider to post (within 24 hours 
of its adjustment of its ATC calculation) any discounts on transmission 
service given to non-affiliated customers. This posting was required to 
remain on the OASIS for 30 days.

Rehearing Requests

    EPRI/NERC Working Group asks the Commission to clarify that the 
purpose of the requirement in Sec. 37.6(c)(3) to post discount 
information for 30 days is to record the discount and does not 
constitute a continuing offer of a discount. They suggest dropping this 
requirement since, under Sec. 37.7, audit data (including data on 
discounts) must be recorded and retained.<SUP>74
---------------------------------------------------------------------------

    \74\ EPRI/NERC Working Group Rehearing Request at p. 10.
---------------------------------------------------------------------------

Commission Conclusion

    As discussed above in Section IV.E.8, the Commission has adopted a 
new discounting policy, which is more fully elaborated in Order No. 
888-A. This new discounting policy necessitates a number of changes to 
the OASIS posting requirements.
    We have revised and moved the text of Sec. 37.6(c)(3) to 
Sec. 37.6(c)(4) and have substituted a new Sec. 37.6(c)(3) that 
requires that any offer of a discount by the Transmission Provider for 
transmission service must be announced to all potential customers 
solely by posting on the OASIS.
    We have revised the section now designated as Sec. 37.6(c)(4) to no 
longer treat the posting of transmission service transactions involving 
the Transmission Provider's wholesale merchant function or affiliates 
differently from the posting of transactions involving non-affiliates. 
However, we will require that transactions involving the Transmission 
Provider's wholesale merchant function or affiliates be identified. The 
24-hour delay in posting non-affiliate discounts has been dropped. All 
transactions for transmission service, agreed to between a Transmission 
Provider and a customer, regardless of whether they involve a discount 
or not, must be posted at the time when ATC must be adjusted in 
response to the transaction. We also have expanded the list of 
information about the transaction required to be posted.
    We have revised and moved the text of Sec. 37.6(d)(2) to 
Sec. 37.6(d)(3) and have substituted a new Sec. 37.6(d)(2) that 
requires that any offer of a discount by the Transmission Provider for 
ancillary service in support of the Transmission Provider's provision 
of transmission service must be announced to all potential customers 
solely by posting on the OASIS.
    We have revised the section now designated as Sec. 37.6(d)(3) to no 
longer treat the posting of ancillary service transactions involving 
the Transmission Provider's wholesale merchant function or affiliates 
differently from the posting of transactions involving non-affiliates. 
However, we will require that transactions involving Transmission 
Provider's wholesale merchant function or affiliates be identified. The 
24-hour delay in posting non-affiliate discounts has been dropped. All 
transactions for ancillary service, agreed to between a Transmission 
Provider and a customer, regardless of whether they involve a discount 
or not, must be posted on the OASIS at the time when ATC must be 
adjusted in response to an associated transmission service transaction, 
if any. We also have expanded the list of information about the 
transaction required to be posted.
    We have revised Sec. 37.6(e)(1)(i) to require that, with the 
exception of next-hour service, requests for transmission and ancillary 
service must be posted prior to the Transmission Provider responding to 
these requests. This will ensure that other customers can observe any 
discounts being requested before they are acted on. We also are 
requiring that all postings of requests be made comparably. We are 
making this revision to prevent discriminatory practices.
    We are revising Sec. 37.6(e)(1)(ii) to expand the information 
required to be posted on the status of requests for transmission and 
ancillary service to include the information required in 
Sec. 37.6(c)(4) and Sec. 37.6(d)(3).
    We are deleting the provision formerly found at 
Sec. 37.6(e)(1)(iii) and are revising Sec. 37.6(e)(3)(i) because, under 
the Commission's new discounting policy, we no longer will allow the 
identity of parties to be masked.
    We are adding a new provision, at Sec. 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 a basic transmission 
service being provided by the Transmission Provider, such request need 
not be posted on the OASIS. We add this provision because we are 
limiting our revisions relating to the posting of discounts for 
ancillary services to those ancillary services that are in support of 
basic transmission service provided by a Transmission Provider.
    The Phase I OASIS is a passive communication system. A customer 
sends a request for a discount directly to the Transmission Provider. 
But the passive nature of the Phase I OASIS prevents the Transmission 
Provider from sending a reply directly to the customer. Instead, the 
Transmission Provider posts the reply on the OASIS and the customer 
must periodically check the node for the reply. A more active 
communication system would permit the Transmission Provider to send 
replies directly to customers, as well as to anyone else who is 
interested. Offers and replies could be exchanged quickly, and the 
unnecessary delays caused by the cumbersomeness of the passive system 
would be eliminated. We, therefore, request the How Working Group to 
consider adding more active capabilities to the OASIS in Phase 
II.<SUP>75
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    \75\ Other benefits of an active system include:
    <bullet> Making the market more efficient by notifying customers 
immediately of changes in ATC on specified paths and sending system-
wide notices directly to customers as soon as they are issued.
    <bullet> Making OASIS nodes more responsive by reducing the load 
on the servers caused by customers periodically checking for 
messages.
---------------------------------------------------------------------------

    The Commission's revised discount policy necessitates certain 
changes to the Standards and Protocols document. The OASIS regulations 
require that prices offered by a Transmission Provider be posted and 
that discounts requested by customers be posted. However, under the 
current Standards and Protocols document, the templates for posting of 
offered and requested prices do not identify whether these prices 
constitute a discount and how much of a discount these prices 
represent. We believe that this information is vitally important to 
prevent discrimination.
    Accordingly, we are requiring that the templates in the Standards 
and Protocols document dealing with posted offerings (Sec. 4.3.2), 
status of transmission service requests (Sec. 4.3.7), and status of

[[Page 12497]]

ancillary service requests (Sec. 4.3.9), be revised to include: (1) The 
Transmission Provider's filed (ceiling) transmission and ancillary 
services rates; (2) the Transmission Provider's offering price; (3) the 
price requested by the customer; and (4) the details of the negotiated 
transaction. We request that the How Working Group propose the 
necessary changes in the Standards and Protocols document and the Data 
Dictionary by June 2, 1997.
    Turning to EPRI/NERC Working Group's request that we clarify that 
the purpose of the requirement in Sec. 37.6(c)(4) (formerly found at 
Sec. 37.6(c)(3)) to post discount information for 30 days is to record 
the discount and does not constitute a continuing offer of a discount, 
we agree that this posting requirement does not constitute an offer of 
a discount. The purpose of this requirement is to document discounting 
that might be considered unduly preferential or discriminatory. To 
serve this purpose, it is important that Transmission Customers have 
ready access to this information. Posting of discounts provides ready 
access, while the audit information does not.
7. Secondary Markets
    In the OASIS Final Rule, the Commission directed, in 
Sec. 37.6(c)(4), that customers choosing to use the OASIS to offer 
transmission capacity (that they have purchased) for resale must post 
relevant information on the same OASIS used by that customer in 
purchasing the transmission capacity. This information must be posted 
on the same display page, using the same tables, as similar capability 
being sold by the Transmission Provider, and the information must be 
contained in the same downloadable files as the Transmission Provider's 
own available capability. A customer reselling transmission capacity 
without the use of an OASIS must, nevertheless, inform the original 
Transmission Provider of the transaction within the time limits 
prescribed by Sec. 23.1 (``Procedures for Assignment of Transmission 
Service'') of the Open Access pro forma tariff.

Rehearing Requests

    CCEM makes three arguments regarding secondary markets. First, CCEM 
argues that the Commission erred by not allowing the assignee of 
transmission capacity, or its agent, to schedule the transmission 
service obtained in the secondary market. Second, CCEM argues that the 
Commission should clarify that it will not impose onerous regulations 
on secondary market participants. Third, CCEM argues that the 
Commission erred by not excluding customers receiving service under 
pre-Open Access tariffs from participation in the secondary market 
until they agree to comply with the Open Access pro forma 
tariff.<SUP>76
---------------------------------------------------------------------------

    \76\ CCEM Rehearing Request at pp. 6-7.
---------------------------------------------------------------------------

Commission Conclusion

    CCEM's arguments relate more to our findings in Order No. 888 than 
to the OASIS Final Rule. Accordingly, we incorporate here our findings 
that we explain in greater detail in Order No. 888-A. First, the Open 
Access pro forma tariff does not prohibit the assignee of transmission 
capacity from scheduling transmission service with the Transmission 
Provider. Second, the issues raised by CCEM with respect to the 
regulation of resellers into the secondary market are fact specific and 
we will decide them on a case-by-case basis. Third, we reject CCEM's 
argument that customers receiving service under pre-Open Access tariffs 
should be excluded from participation in the secondary market until 
they agree to comply with the Open Access pro forma tariff.
8. Masking of Service Request Information
    Section 37.6(e)(1)(ii) of the OASIS Final Rule requires the 
Responsible Party to post certain information about the status of the 
request. In Sec. 37.6(e)(1)(iii) of the OASIS Final Rule, the 
Commission allowed the parties to mask the identity of the requester 
during the negotiation period and for 30 days after the request is 
accepted, denied or withdrawn.
    Under Sec. 37.6(e)(1) and Sec. 37.6(e)(3), all requests for 
transmission service and all transmission service curtailments or 
interruptions must be posted on the Transmission Provider's OASIS in 
accordance with the terms of the Transmission Provider's tariff.<SUP>77 
Under the OASIS Final Rule, parties to these transactions were allowed 
to request that their identities be masked for 30 days. See 
Secs. 37.6(e)(1)(iii) and 37.6(e)(3)(i).
---------------------------------------------------------------------------

    \77\ The issue of the timing of when requests for transmission 
service, responses thereto, curtailments, and interruptions must be 
posted on the OASIS is discussed in section IV.G.9 below.
---------------------------------------------------------------------------

Rehearing Requests

    APPA argues that the Commission erred in permitting Transmission 
Providers to withhold critical market information about requests for 
transmission and ancillary services. APPA and Blue Ridge believe that 
the 30-day masking period for the identity of the requester is 
inappropriate. They claim that the Commission failed to require posting 
of the price, quantity, and any other relevant terms or conditions 
associated with a request for service at the time when the provider 
accepts the request. They argue that withholding the precise terms of a 
proposed transaction and the identity of parties denies other market 
participants the opportunity to make informed decisions, is potentially 
discriminatory, and inefficient. They argue that data provided 30 days 
later are of little use to market participants.<SUP>78
---------------------------------------------------------------------------

    \78\ APPA Rehearing Request at pp. 19-21 and Blue Ridge 
Rehearing Request at p. 39.
---------------------------------------------------------------------------

    CCEM identifies an apparent conflict between the OASIS regulations 
and OASIS Final Rule preamble on the posting of denials. It asks the 
Commission to clarify that Transmission Providers need not post, for 
reasons other than those related to ATC, the reason for any denial of 
transmission service on an OASIS. A requester can, however, request a 
fuller explanation.<SUP>79
---------------------------------------------------------------------------

    \79\ CCEM Rehearing Request at pp. 11-12.
---------------------------------------------------------------------------

    EEI argues that masking the identities of requesters should not 
apply to system operators. EEI argues that system operators need to 
know all the parties to a transaction to ensure reliability and to 
ensure equity in the treatment of customers.<SUP>80
---------------------------------------------------------------------------

    \80\ EEI Rehearing Request at p. 49.
---------------------------------------------------------------------------

    NE Public Power District argues that certain provisions in the 
Final Rule dealing with confidentiality (i.e., Secs. 37.6(e)(1)(iii) 
and 37.6(e)(3)(i)) are in conflict with Nebraska state law. NE Public 
Power District explains that it is subject to state freedom of 
information laws and must disclose commercially sensitive information 
such as the identity of a customer seeking transmission service, unless 
the information constitutes an exempt trade secret.<SUP>81 NE Public 
Power District maintains that utilities subject to local freedom of 
information laws should be given the option to conform their conduct to 
those laws.
---------------------------------------------------------------------------

    \81\ NE Public Power District Rehearing Request at p. 14.
---------------------------------------------------------------------------

Commission Conclusion

    We agree with APPA that the masking provision should be dropped and 
we are amending our regulations accordingly. We are making this 
decision as part of our new discounting policy, that we explain more 
fully above and in Order No. 888-A. Consistent with this finding, we 
request that the How Working Group eliminate any references in the 
Standards and Protocols document to masking the identities of parties 
(e.g., Sec. 4.3.7(b)). This should be done in concert with the report 
to be submitted

[[Page 12498]]

no later than June 2, 1997. Moreover, EEI's concern that the masking of 
parties' identities would apply to system operators is now moot. NE 
Public Power District's concerns are also moot.
    We agree with CCEM that language in the preamble of the OASIS Final 
Rule can be interpreted as being inconsistent with the requirement in 
Sec. 37.6(e)(2)(i) to provide the reasons why requests for service are 
denied. However, consistent with the Commission's new discounting 
policy, we will interpret Sec. 37.6(e)(2)(i) to require Transmission 
Providers to post the reasons for a denial of a request for service on 
the OASIS for review by all OASIS users.
    We will also take this opportunity to clarify that Sec. 37.6(e) 
applies not only to requests for transmission service, but also to 
requests for ancillary service. Although this was the intent of the 
OASIS Final Rule, it was not clearly stated. We will make the necessary 
revisions to make this clear.
9. Requests for Service Made on the OASIS During Phase I
    On December 23, 1996, the How Working Group filed a letter 
requesting clarification of whether the Commission intended, in the 
OASIS Final Rule, to require that the OASIS serve as a ``next hour'' 
reservation tool during Phase 1 of OASIS implementation. The letter 
stated:

    It was the interpretation of the How Working Group that a 
Provider would accept reservation requests after 2 p.m. of the 
preceding day, only if practical. Otherwise, these requests would be 
accepted off-line and posted after-the-fact. It was our view that 
``next hour'' functionality was not feasible in Phase 1.

In response, the Commission issued an order explaining that the OASIS 
Final Rule makes a clear distinction between reserving transmission 
service and scheduling transmission service.<SUP>82 The Commission 
further explained that the Phase 1 OASIS regulations create a mechanism 
for making reservations of transmission service, while the inclusion of 
energy scheduling as part of the OASIS requirements was left as a Phase 
2 OASIS issue. Nevertheless, the Commission acknowledged that ``for 
near-term transactions, the distinction between scheduling and 
reservations tends to blur.'' This left the problem raised by the How 
Working Group's letter. To wit,
---------------------------------------------------------------------------

    \82\ See Open Access Same-time Information System and Standards 
of Conduct, 77 FERC para. 61,335 at 62,491 (1996) (Clarifying 
Order).

[t]he OASIS regulations provide, at 18 C.F.R. Sec. 37.6(e)(1), that 
``[a]ll requests for transmission services offered by Transmission 
Providers under the pro forma tariff must be made on the OASIS.'' 
Notwithstanding the clear language of this regulation, the How 
Working Group would like to accommodate requests for service, made 
after 2:00 p.m. of the day preceding the commencement of such 
service, off the OASIS and states that it is not feasible to handle 
such requests on the OASIS during Phase 1. [ <SUP>83]
---------------------------------------------------------------------------

    \83\ Letter dated December 23, 1996 from the How Working Group. 
The 2:00 p.m. deadline is consistent with Sec. 14.6 of the Open 
Access pro forma tariff, which provides: ``Schedules for Non-Firm 
Point-to-Point Transmission Service must be submitted to the 
Transmission Provider no later than 2:00 p.m. . . . of the day prior 
to commencement of such service. Schedules submitted after 2:00 p.m. 
will be accommodated, if practicable.'' See Clarifying Order, 77 
FERC at 62,492, n.4.

    To resolve this difficulty, the Commission clarified in a recent 
---------------------------------------------------------------------------
order that,

during Phase I, a request for transmission service made after 2:00 
p.m. of the day preceding the commencement of such service, will be 
``made on the OASIS'' if it is made directly on the OASIS, or, if it 
is made by facsimile or telephone and promptly (within one hour) 
posted on the OASIS by the Transmission Provider. In all other 
circumstances, requests for transmission service must be made 
exclusively on the OASIS. [ <SUP>84]
---------------------------------------------------------------------------

    \84\ Id. (Emphasis in original).

    As part of the Commission's revised discount policy, see discussion 
in Section IV.G.6 and Order No. 888-A, we have required Transmission 
Providers to post requests for transmission and ancillary services, 
including requests for discounts, on the OASIS prior to taking action 
on those requests.<SUP>85 This policy applies to all requests for 
discounts for transmission and/or ancillary service with the exception 
of requests for next-hour service during Phase I.<SUP>86
---------------------------------------------------------------------------

    \85\ See Sec. 37.6(e)(1)(i).
    \86\ See Sec. 37.6(e)(1)(ii).
---------------------------------------------------------------------------

    For next-hour service requests, the Transmission Provider, during 
Phase I, must post the request for discounted service on the OASIS, as 
soon as possible, but in no event later than one hour after the request 
for a discount is received.
    In the event that a discount is being requested for ancillary 
services that are not in support of a basic transmission service being 
offered by the Transmission Provider, this need not be posted on the 
OASIS.<SUP>87
---------------------------------------------------------------------------

    \87\ See Sec. 37.6(e)(1)(iii).
---------------------------------------------------------------------------

10. Delay in Posting Requests for Hourly Transmission Service and 
Schedule Information
    Section 37.6(e) requires a Transmission Provider to post on the 
OASIS requests for transmission service that is offered by that 
Transmission Provider under its Open Access pro forma tariff, in 
accordance with its tariff, the FPA, and Commission regulations. 
Section 37.6(f) requires information about transmission service 
schedules to be recorded and available for download from the OASIS. 
This information must be available within seven calendar days of when 
the service is scheduled.

Rehearing Requests

    CCEM requests that the Commission clarify that Responsible Parties 
must post requests for hourly firm and nonfirm transmission within the 
next hour following the request.<SUP>88
---------------------------------------------------------------------------

    \88\ CCEM Rehearing Request at pp. 4-5. We note that CCEM's 
rehearing request regarding hourly firm transmission service is 
misplaced. The Commission has rejected hourly firm point-to-point 
transmission service as a mandatory service to be provided under the 
Open Access pro forma tariff. See Order No. 888, FERC Stats & Regs. 
at 31,752.
---------------------------------------------------------------------------

    APPA and Blue Ridge argue that the seven-day delay in posting 
transmission schedule data is potentially discriminatory and makes the 
data meaningless for hourly or daily transactions. They ask that 
Responsible Parties post schedule information when they update postings 
of ATC or, at latest, when service begins.<SUP>89
---------------------------------------------------------------------------

    \89\ APPA Rehearing Request at p. 23 and Blue Ridge Rehearing 
Request at p. 40.
---------------------------------------------------------------------------

Commission Conclusion

    The OASIS regulations currently do not specify how soon the 
Responsible Party must post a request for service after it is received. 
However, under our new discounting policy we are requiring such 
postings to be made prior to the Transmission Provider responding to 
the request. Moreover, although we are not adopting a specific time 
period for such postings, as requested by CCEM, we are adding a 
requirement that all such postings be made on a comparable basis, to 
prevent discriminatory practices.
    The Phase I OASIS is a transmission information and service 
application system. The Commission accepts the industry's position that 
including scheduling of transmission service in the Phase I OASIS is 
not possible. The Commission strongly encourages the industry to 
consider including transmission service scheduling in Phase II of the 
OASIS.
    The reporting of schedule information serves the same purpose as 
the audit information (i.e., to document discriminatory practices). The 
Commission does not intend schedule information to supplement ATC

[[Page 12499]]

postings on a same-time basis during Phase I.
11. Liability for Accuracy of ATC/TTC Estimates
    In the OASIS Final Rule, the Commission found that the 
responsibility for assuring the reliability and accuracy of data 
supplied by third parties rests with those third parties and not with 
the public utility that posts this information on the OASIS as an 
accommodation.<SUP>90 As to the accuracy of a Transmission Provider's 
own estimates of its ATC and TTC, the OASIS Final Rule provides that 
Transmission Providers are required to post the amounts ``expected to 
be available'' (Sec. 37.6(b)) but does not directly address whether 
(and to what extent) Transmission Providers are liable for the accuracy 
of good faith estimates made in accordance with prescribed procedures.
---------------------------------------------------------------------------

    \90\ See 18 CFR Sec. 37.6(g)(2) and OASIS Final Rule, 61 FR at 
21,755.
---------------------------------------------------------------------------

Rehearing Request

    CSW argues that Transmission Providers should not be liable for the 
accuracy of ATC & TTC estimates made in good faith and in accordance 
with the company's published procedures.<SUP>91
---------------------------------------------------------------------------

    \91\ CSW Rehearing Request at pp. 2-6.
---------------------------------------------------------------------------

Commission Conclusion

    As further discussed in Order No. 888-A, the Commission will not 
revise the Open Access pro forma tariff, as requested by CSW, to 
provide that a Transmission Provider will not be liable for errors in 
an estimate made in good faith or in accordance with its published 
procedure, because we believe that a utility should have the same 
liability standard for operating an OASIS as it has for its other 
operations.<SUP>92
---------------------------------------------------------------------------

    \92\ See, e.g., Texas Eastern Transmission Corporation, 62 FERC 
para. 61,015 at 61,107 (1993).
---------------------------------------------------------------------------

H. Section 37.7--Auditing Transmission Service Information

    The OASIS regulations require that all OASIS database transactions, 
except ``want ads'' and ``other communications'', are to be stored and 
remain available for download for 90 days. After 90 days, the audit 
data are available on request for three years.

Rehearing Requests

    EEI argues that the retention period for audit data retained under 
Sec. 37.7(b) is excessive and should be reduced from 90 days to 7 days. 
EEI argues that, beyond 7 days, the data could be provided off-line, 
upon request.<SUP>93
---------------------------------------------------------------------------

    \93\ /EEI Rehearing Request at p. 52.
---------------------------------------------------------------------------

    Similarly, EPRI/NERC Working Group (with APPA dissenting) argues 
that the Commission should reduce the on-line availability of the ATC/
TTC data in the audit file from 90 to 10 days. They claim that the 
longer time limit is burdensome and unfeasible and suggest making the 
data available off-line.<SUP>94
---------------------------------------------------------------------------

    \94\ EPRI/NERC Working Group Rehearing Request at pp. 9-10.
---------------------------------------------------------------------------

Commission Conclusion

    The Commission agrees with the proposal of the EPRI/NERC Working 
Group majority that we should reduce the amount of time that the audit 
file remains on-line. However, we believe that ten days may not be long 
enough to provide OASIS users with sufficient time to evaluate these 
data. In our judgment, 20 calendar days is a period that will allow 
OASIS users who wish to do so adequate time to find and download these 
data (even allowing for weekends or holidays) without unduly burdening 
Transmission Providers. Therefore, we will modify the regulations at 
Sec. 37.7(b) to shorten--from 90 to 20 days--the time during which ATC/
TTC postings must remain available on the OASIS for download. The data 
will, however, remain available (upon request) for three years from the 
date on which they are first posted.
    We will take this opportunity to correct an omission in 
Sec. 37.6(g)(3). As written, this provision currently does not specify 
the retention period for notices of employee transfers. We will correct 
this omission by specifying that the posting requirements for notices 
of employee transfers are the same as those provided in Sec. 37.7 for 
audit data postings. We request that the How Working Group propose the 
necessary template (for notices of employee transfers) to be included 
in the Standards and Protocols document.
    We also will take this opportunity to clarify that the audit data 
required to be made available for three years under Sec. 37.7(b) are to 
be made available upon request for download in the same electronic form 
as used when they originally were posted on the OASIS.

I. Standards and Communication Protocols

1. CCEM's Suggested Changes to the Standards and Protocols Document
    The OASIS Final Rule was accompanied by a Standards and Protocols 
document, revised on September 10, 1996, to help ensure that each OASIS 
will provide information in a uniform manner.<SUP>95 The publication 
details the Phase I requirements for technical issues related to the 
implementation and use of an OASIS (i.e., a compilation of OASIS 
standards and communication protocols).
---------------------------------------------------------------------------

    \95\ See supra note 4.
---------------------------------------------------------------------------

Rehearing Request

    CCEM argues that the Commission should clarify certain technical 
aspects of the templates in the OASIS Standards and Protocols document. 
We will discuss these various suggested revisions separately.
a. Service Request Priorities
    The Open Access pro forma tariff requires Transmission Providers to 
respond to customer requests for point-to-point service within a 
certain time limit depending on the type of service requested.<SUP>96 
The OASIS Standards and Protocols document states that ``[i]f a 
purchase request is approved by the Seller, then it must be again 
confirmed by the Customer. Once the customer confirms an approved 
purchase, a reservation for those services is considered to exist, 
unless later the reservation is reassigned or displaced.'' <SUP>97
---------------------------------------------------------------------------

    \96\ See Open Access pro forma tariff at Secs. 17.5 and 18.4.
    \97\ See Standards and Protocols document at Sec. 3.6(b).
---------------------------------------------------------------------------

Rehearing Request

    CCEM asks the Commission to clarify priorities between competing 
requests for service. They also ask that Transmission Customers be 
allowed to confirm a purchase request before it has been approved by 
the Transmission Provider.<SUP>98
---------------------------------------------------------------------------

    \98\ CCEM Rehearing Request at p. 7.
---------------------------------------------------------------------------

    EPRI/NERC Working Group requests that the Commission: (1) specify a 
time limit for customer confirmation of accepted requests for service; 
(2) eliminate the confirmation step; or (3) handle confirmation limits 
in umbrella service agreements.<SUP>99
---------------------------------------------------------------------------

    \99\ EPRI/NERC Working Group letter dated July 3, 1996 at pp. 1-
2.
---------------------------------------------------------------------------

Commission Conclusion

    The requirement that a customer confirm its request for service 
appears in the OASIS Standards and Protocols document (and not in the 
Open Access pro forma tariff or 18 CFR Part 37). Although the easiest 
approach might be to eliminate the confirmation step, the Commission is 
reluctant to modify the OASIS Standards and Protocols document at this 
late date. The Commission is also reluctant to specify confirmation 
time limits without first soliciting the views of representative 
industry segments. Accordingly, the

[[Page 12500]]

Commission requests that the industry address this issue as part of the 
Phase II report due on or before August 4, 1997.
    As to EPRI/NERC Working Group's suggestion of handling confirmation 
limits in umbrella service agreements, we find this acceptable, for the 
time being, as long as Transmission Providers treat all customers, 
including their own wholesale merchant employees, comparably.
b. Clarification of the Requirement to Post, Upload, and Download 
Information
    In the OASIS Final Rule, the Commission discussed the necessity for 
Hypertext Mark-up Language (HTML) screen displays and stated that this 
information also needed to be made available for downloading.<SUP>100 
The Commission also required OASIS sites to be set up in a manner that 
will allow customers to upload certain information to OASIS nodes.
---------------------------------------------------------------------------

    \100\ See OASIS Final Rule, 61 FR at 21,756.
---------------------------------------------------------------------------

Rehearing Request

    CCEM requests that the Commission clarify that when the OASIS Final 
Rule makes an individual reference to ``uploading'', ``downloading'', 
or ``posting'' requirements (without expressly making a reference to 
all three of these requirements), the Commission, nevertheless, 
intended to require, as appropriate, a collective requirement to 
upload, download, and post the information at issue. CCEM points out 
that uploading and downloading are computer to computer transactions, 
while posting is an on-line function. CCEM argues that, in order for 
the OASIS system to function effectively in providing open access 
Transmission Customers with information through electronic means, 
uploading and downloading should always be required as an alternative 
to comparable on-line services.<SUP>101
---------------------------------------------------------------------------

    \101\ CCEM Rehearing Request at p. 12.
---------------------------------------------------------------------------

Commission Conclusion

    Section 4.3.1 of the revised Standards and Protocols document, 
issued subsequent to CCEM's request, specifies what type of information 
may be uploaded to, or downloaded from, OASIS nodes. Thus, CCEM's goal 
of clarifying the requirements for uploading, downloading, and posting 
has been met. We, therefore, find that it is not necessary to broadly 
reinterpret the terms used in the OASIS Final Rule, as urged by CCEM.
c. Sequence of Data Elements Appearing in Templates
    Section 4.2.4.2 of the revised Standards and Protocol document 
discusses the format of downloadable files. The narrative in 
Sec. 4.2.4.2 2.d states:

    The DATA--ROWS record contains the number of data records 
following the COLUMN--HEADERS. The COLUMN--HEADERS record contains 
the template element name for each field that is required in the 
Template, in the exact order as listed in the Template. * * *
    The Template information then follows as records which 
correspond one-to-one with the column headings.

Rehearing Request

    CCEM requests clarification that the data elements that make up the 
templates in the Standards and Protocols document are fixed in sequence 
and in number. CCEM argues that because computer systems will be 
established on the basis of the templates outlined in the Standards and 
Protocols document, including the sequence of templates and the number 
of data elements, it is important that the order of the data provided 
in the templates not be shuffled. Otherwise, problems may occur in the 
transfer and receipt of information between computer systems.<SUP>102
---------------------------------------------------------------------------

    \102\ Id.
---------------------------------------------------------------------------

Commission Conclusion

    To avoid any possible confusion, we hereby clarify that the 
Standards and Protocols document requires that the data elements in the 
templates are fixed in sequence and number, and are not to differ from 
OASIS node to OASIS node. However, the Commission will continue to 
order revisions to the Standards and Protocols document periodically 
(thus implementing across-the-board changes to the templates for all 
OASIS nodes), as necessary.
2. Standardized Format for Electronic Tariff Filings
    In the OASIS Final Rule, the Commission found that utilities must 
provide tariff downloads from their OASIS sites in the same format that 
they use to file their tariffs with the Commission. Order No. 888 
permitted tariff filings to be in any word processor format.

Rehearing Request

    APPA argues that the standardized electronic format for tariffs 
needs to be specified and recommends the use of either ASCII or 
HTML.<SUP>103
---------------------------------------------------------------------------

    \103\ APPA Rehearing Request at p. 25.
---------------------------------------------------------------------------

Commission Conclusion

    The Commission's order clarifying Order Nos. 888 and 889 compliance 
matters resolved the issue raised by APPA by requiring that tariffs be 
filed in either Wordperfect 5.1/5.2 or ASCII format.<SUP>104 However, 
in the near future, the Commission expects to adopt another standard 
word processor for its own uses (i.e., Wordperfect 6.1). The Commission 
will, therefore, modify the finding in the Clarifying Order to accept 
postings of tariff filings on the OASIS in the ASCII format or in 
whatever standard word processor format is currently authorized by the 
Commission for its own uses.<SUP>105 Once posted, a tariff posting will 
remain available for download in its original format.
---------------------------------------------------------------------------

    \104\ Promoting Wholesale Competition Through Open-Access Non-
Discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Open Access Same-Time Information System and Standards of 
Conduct, Order Clarifying Order Nos. 888 and 889, 76 FERC para. 
61,009 at 61,026 (1996) (Clarifying Order).
    \105\ A review of CIPS, or any successor, will show what 
standard word processor is currently authorized by the Commission 
for its own uses.
---------------------------------------------------------------------------

3. Company Codes and Identification Displays
    In the OASIS Final Rule, the Commission required the use of ``DUNS 
numbers'' to identify transmission owning utilities and customers on 
OASIS nodes.<SUP>106
---------------------------------------------------------------------------

    \106\ ``DUNS numbers'' refer to the Data Universal Numbering 
System, maintained by Dun and Bradstreet.
---------------------------------------------------------------------------

Rehearing Requests

    APPA argues that, notwithstanding claims to the contrary, the use 
of DUNS numbers could result in costs being incurred by OASIS users. 
APPA also argues that, because Dun & Bradstreet also owns Moody's 
Investors Services, DUNS numbers may somehow allow Dun & Bradstreet/
Moody's customers to obtain access to confidential information about 
APPA members. Accordingly, APPA requests that the Commission use the 
EIA (Energy Information Agency) UCode in lieu of DUNS numbers to 
identify transmission owning utilities and OASIS customers.<SUP>107
---------------------------------------------------------------------------

    \107\ APPA Rehearing Request at p. 25.
---------------------------------------------------------------------------

    CCEM requests that the Commission clarify that when information is 
uploaded and downloaded, the DUNS number identification of the parties 
be the only field required to identify a company. CCEM also requests 
clarification that the Commission require that for purposes of the HTML 
displays, the minimum data element to

[[Page 12501]]

be displayed should be the company's alias/initials.<SUP>108
---------------------------------------------------------------------------

    \108\ CCEM Rehearing Request at p. 13.
---------------------------------------------------------------------------

    In addition, CCEM requests that Transmission Providers be required 
to maintain an additional display containing a cross-reference of DUNS 
number, full company name, and alias/initials. CCEM argues that the 
cross-reference will reduce confusion on the OASIS.<SUP>109
---------------------------------------------------------------------------

    \109\ Id.
---------------------------------------------------------------------------

Commission Conclusion

    The industry-wide Internet site on the WWW (http:/www.tsin.com) 
reports that Dun & Bradstreet will issue DUNS numbers at no charge and 
provides instructions and procedures for applying for a DUNS number at 
no cost. This representation is consistent with our experience in 
issuing DUNS numbers for natural gas pipelines and their customers. We, 
therefore, find APPA's concerns about the costs of DUNS numbers to be 
unwarranted.
    As to APPA's concern about DUNS numbers somehow giving Moody's 
customers unrestricted access to otherwise restricted information, we 
do not find this concern convincing. The Commission has several years'' 
experience with requiring the use of DUNS numbers for similar 
identification purposes in the natural gas pipeline industry and has 
not received any complaints along these lines.
    We decline to adopt CCEM's proposal concerning identification 
fields and a data element displays. The industry is in the midst of 
implementing OASIS standards and we are reluctant to modify the 
Standards and Protocols document at this time unless there is a serious 
need for the modification. CCEM's proposal is one that may somewhat 
improve the efficiency of OASIS operations, but an OASIS can operate 
without it, and, with experience, other solutions may prove preferable. 
We request that the industry consider CCEM's proposal when developing 
standards for OASIS Phase II implementation.
    We agree with CCEM that an additional display, such as a cross-
reference of possible business partners and their various 
identification codes and symbols, would greatly enhance the industry's 
ability to transact business. Subsequent to CCEM's request, the 
``TSIN'' WWW site began providing such a cross-reference. As long as 
this Internet site continues to provide this information for the entire 
industry, there is no need for individual Transmission Providers to do 
so.
4. Common Location Codes
    In the preamble to the OASIS Final Rule, we stated that we were 
abandoning the proposal in the RIN NOPR to require that the OASIS 
incorporate a system for location codes. We requested that the industry 
continue its efforts to develop a common naming convention to be 
implemented as soon as practicable.

Rehearing Request

    CCEM argues that the Commission should modify the OASIS Final Rule 
to include a requirement that Transmission Providers provide a 
downloadable on-line listing of all PORs and PODs that includes point 
name, point alias, and point code. CCEM also requests that when 
downloading this information, the customer should have the ability to 
download only those aspects of the listing that have changed over a 
user-defined time period.<SUP>110
---------------------------------------------------------------------------

    \110\ Id.
---------------------------------------------------------------------------

Commission Conclusion

    After CCEM filed its rehearing request, the Standards and Protocols 
document was revised to require that this information be 
provided.<SUP>111
---------------------------------------------------------------------------

    \111\ See Standards and Protocols document at Sec. 4.3.5.
---------------------------------------------------------------------------

5. Time by Which Hourly Postings Must be Made Available
    The OASIS Final Rule requires that updates of hourly postings under 
Sec. 37.6(b)(3)(i)(C)(2) are to be made on the hour.

Rehearing Request

    CCEM requests that the Commission clarify that all hourly postings 
will be available no later than ``on the hour.'' CCEM argues that these 
requirements will be critical if computer-to-computer interfaces are to 
be accomplished with reliability and comparability.<SUP>112
---------------------------------------------------------------------------

    \112\ CCEM Rehearing Request at p. 13.
---------------------------------------------------------------------------

Commission Conclusion

    Subsequent to CCEM's request, the Commission issued a revised 
Standards and Protocol document that defines permissible deviations 
from the hourly posting requirement.<SUP>113 The Transmission 
Provider's most recent transmission services information must be 
available on the OASIS node within five minutes of its required posting 
time at least 98 percent of the time. The remaining two percent of the 
time, the transmission services information must be available within 
ten minutes of its scheduled posting time.<SUP>114 We are satisfied 
with the resolution of this issue in the revised Standards and 
Protocols document, at least for the time being. However, the industry 
may want to address this issue again, in Phase II, after it has more 
experience transacting business on the OASIS.
---------------------------------------------------------------------------

    \113\ See supra note 4.
    \114\ See Standards and Protocols document at Sec. 5.7.
---------------------------------------------------------------------------

J. Mechanism for Recovering Oasis Expenses

    In the preamble to the OASIS Final Rule, the Commission concluded 
that it is appropriate that all wholesale Transmission Customers and 
all unbundled retail Transmission Customers pay a share of OASIS 
development costs in their rates. The costs of developing an OASIS are 
to be included in unbundled transmission rates with variable costs of 
operating an OASIS to be recovered, to the extent possible, in usage 
fees. Recovery of OASIS costs is left to individual rate 
proceedings.<SUP>115
---------------------------------------------------------------------------

    \115\ See OASIS Final Rule, 61 FR at 21,760-61.
---------------------------------------------------------------------------

Rehearing Requests

    EEI argues that the costs of operating an OASIS should be 
recoverable in supplements that the Transmission Providers file to 
their rate schedules on a company-specific basis. They ask that 
Transmission Providers not be required to amend their approved tariffs 
to seek recovery of OASIS expenses. They argue that refiling would be a 
problem because it would entail unnecessary expenses, because the level 
of such expenses is subject to change, and because the OASIS 
requirements are still evolving and the systems are not yet 
complete.<SUP>116
---------------------------------------------------------------------------

    \116\ EEI Rehearing Request at pp. 54-55.
---------------------------------------------------------------------------

Commission Conclusion

    EEI is asking the Commission to allow utilities to automatically 
adjust their transmission rates to recover their OASIS costs without 
filing for a change in rates. The Commission has allowed this sort of 
automatic rate adjustment for fuel costs through fuel adjustment 
clauses, but only because fuel costs are a significant portion of total 
costs and can be volatile. OASIS costs are neither. We deny EEI's 
request.

K. Section 37.8--Implementation Schedule; Phases

    Order No. 889 provided that all of the requirements prescribed in 
the standards of conduct were to be complied with and Phase I OASIS 
sites meeting all the requirements of the OASIS Final Rule were to be 
in operation by November 1, 1996.<SUP>117 This compliance schedule 
later was modified

[[Page 12502]]

(in response to a request from the How Working Group for a two-step 
time extension) with full compliance required by January 3, 
1997.<SUP>118 Thus, the date for compliance with Phase I OASIS 
implementation and for compliance with the standards of conduct has 
elapsed and the language in Sec. 37.8 is no longer accurate, even as a 
record of past events. We, therefore, will revise 18 CFR Part 37 to 
delete this provision.
---------------------------------------------------------------------------

    \117\ See OASIS Final Rule, 61 FR at 21,764.
    \118\ See supra note 6.
---------------------------------------------------------------------------

Rehearing Request

    Union argues that it has been given insufficient time to comply and 
objects to the requirement that OASIS systems must be in place by 
November 1, 1996. Union argues that compliance by such an early date 
will require the company to incur a considerable effort and expense and 
will involve the development of intricate electronic information 
functions, even though the operational requirements for OASIS sites 
have not yet been completed.<SUP>119
---------------------------------------------------------------------------

    \119\ Union Rehearing Request at pp. 53-54, 56-57. We also note 
that as of the issuance of this order, Union's OASIS site is in 
operation.
---------------------------------------------------------------------------

Commission Conclusion

    We find Union's arguments to be moot. As noted above, after Union 
filed its request for rehearing, the Commission issued a revised 
Standards and Protocols document that more fully describes the 
operational requirements of OASIS sites, and granted the request from 
the How Working Group for a 2-month time extension for compliance with 
the requirements of Order No. 889. Moreover, the Commission invited 
comments from interested persons prior to issuing the revised Standards 
and Protocols document.

V. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (RFA) <SUP>120 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 Sec. 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.<SUP>121
---------------------------------------------------------------------------

    \120\ 5 U.S.C. Secs. 601-612.
    \121\ See OASIS Final Rule, 61 FR at 21,762-63.
---------------------------------------------------------------------------

    NRECA challenges this certification.<SUP>122 NRECA recognizes that 
OASIS requirements do not apply unless a non-public utility offers 
reciprocal transmission service.<SUP>123 However, NRECA maintains that 
business necessity will force non-public utilities to file open access 
tariffs, and thus subject themselves to OASIS requirements, since, if 
they do not, ``they will not retain access over the long-term to the 
nation's bulk power transmission grid--access they must have if they 
wish to stay in business.'' <SUP>124
---------------------------------------------------------------------------

    \122\ NRECA Rehearing Request at pp. 42-48. On November 1, 1996, 
NRECA filed a supplement to its request for rehearing and 
clarifications. We will accept NRECA's pleading as a request for 
clarification and/or a motion for reconsideration, and not as a 
request for rehearing, because it was not filed within the 30-day 
statutory time limit for rehearing requests. See 16 U.S.C. 
Sec. 8251(a).
    \123\ OASIS Final Rule, 61 FR at 21,742.
    \124\ NRECA Rehearing Request at pp. 42-43.
---------------------------------------------------------------------------

    In the OASIS Final Rule, we noted that the entities that would have 
to comply with the Final Rule are public utilities. However, the 
Commission under appropriate circumstances will grant waiver of the 
Final Rule requirements to small public utilities. Similarly, it will 
grant waiver of the reciprocity condition to small non-public 
utilities. As discussed earlier, in section IV.B.3, the Commission's 
waiver policy follows the SBA definition of small electric 
utility.<SUP>125
---------------------------------------------------------------------------

    \125\ See 5 U.S.C. Secs. 601(3) and 601(6) and 15 U.S.C. 
Sec. 632(a). The RFA defines a small entity as one that is 
independently owned and not dominant in its field of operation. See 
15 U.S.C. Sec. 632(a). The Small Business Administration defines a 
small electric utility as one that disposes of 4 million MWh or less 
of electric energy in a given year. See 13 CFR 121.601 (Major Group 
49-Electric, Gas and Sanitary Services) (1995).
    In the Open Access Final Rule, we concluded that, under these 
definitions, the Open Access Final Rule would not have a significant 
economic impact on a substantial number of small entities. We 
reaffirm that conclusion in Order No. 888-A, which is being issued 
contemporaneously with this order on rehearing. This same conclusion 
is warranted here, because Order No. 889 and this order on rehearing 
only implement the OASIS requirements of the Open Access Final Rule.
---------------------------------------------------------------------------

    We disagree with NRECA that non-public utilities must publish open 
access tariffs or forego access to the nation's bulk power transmission 
grid. As we noted in the Open Access Final Rule, non-public utilities 
do not have to offer open access tariffs in order to comply with the 
open access reciprocity condition; rather, they must offer reciprocal 
transmission access to those public utility Transmission Providers from 
whom they receive open access service. Additionally, reciprocal service 
is voluntary. If non-public utilities do not want to offer reciprocal 
service, they may continue to seek voluntary, bilateral transmission 
services from public utilities.<SUP>126 We note that since NRECA filed 
its rehearing comments, the Commission has issued several orders 
addressing its waiver policy and specific waiver requests. We have 
granted waivers of the reciprocity provision in the Open Access pro 
forma tariffs and waivers of the requirements of the OASIS Final Rule: 
approximately 17 small entities have received waivers of the Open 
Access Final Rule;<SUP>127 approximately 36 small entities have 
received waivers of the requirement to establish and maintain an OASIS 
and/or the requirement to comply with the standards of conduct 
requirements of the OASIS Final Rule.<SUP>128 We also have granted 
waiver of the open access tariff reciprocity provision that would apply 
to ten small non-public utility applicants if they chose to receive 
open access transmission service, and have determined that 19 small 
non-public electric utilities that requested exemption from all or part 
of the Open Access Rule are not public utilities subject to the 
requirement to file an open access tariff.<SUP>129
---------------------------------------------------------------------------

    \126\ Open Access Final Rule, 61 FR at 21,540 and 21,691.
    \127\ See Order No. 888-A at Section VI.
    \128\ See Central Electric, 77 FERC at 61,311, 61,313-317 (3 
waivers, including 2 for entities later found non-jurisdictional); 
Northern States (21 waivers); Black Creek (3 waivers); Midwest (5 
waivers); UtiliCorp, et al., 77 FERC 61,027 (1997) (2 waivers); 
Soyland (6 waivers); and Dakota (3 waivers). Of the entities granted 
waivers by these orders, at least 36 involve small public utilities.
    \129\ See Central Electric; Niabrara; and Dakota.
---------------------------------------------------------------------------

    Although NRECA speculates that it may be burdensome for small non-
public utilities to file for waiver of our Open Access and OASIS Final 
Rules, many small public and non-public utilities have found little or 
no problem in obtaining waivers when they are properly justified under 
our waiver standards. As the Commission's decisions show, the 
Commission is carefully evaluating the effect of the OASIS Final Rule 
on small electric utilities and is granting waivers where appropriate, 
thus mitigating the effect of that rule on small public and non-public 
utilities.
    Given that this order makes only minor revisions to Order No. 889, 
none of which are substantive, and that we are granting waivers from 
the requirements of the OASIS Final Rule to small entities where 
appropriate, we reaffirm our earlier certification that the OASIS Final 
Rule will not have a significant economic impact on a substantial 
number of small entities and that no regulatory flexibility analysis is 
required pursuant to Sec. 603 of the RFA.

[[Page 12503]]

VI. Environmental Statement

    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 only minor revisions to Order No. 889, none 
of which is substantive, no separate environmental assessment or 
environmental impact statement has been prepared in this proceeding.

VII. Information Collection Statement

    Order No. 889 contained an information collection statement for 
which the Commission obtained approval from the Office of Management 
and Budget (OMB). Given that this order makes only minor revisions to 
Order No. 889, 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 No. 889.<SUP>130 
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].
---------------------------------------------------------------------------

    \130\ As discussed in section IV.E.3 above, to aid in our 
monitoring efforts, we are modifying Secs. 37.4 and 37.6 to require 
the posting of the Transmission Provider logs already required (by 
the OASIS Final Rule) to be maintained. We also are revising the 
Standards and Protocols document to specify the templates for 
posting discounts to be consistent with our revised discount policy. 
However, given that this information was already required to be 
assembled and available for audit, these additional posting 
requirements will have only a negligible effect on the information 
collection requirement. Moreover, these effects are more than offset 
by the revision to Sec. 37.7(b) that reduces, from 90 days to 20 
days, the time during which ATC/TTC postings must remain available 
for download on the OASIS.
---------------------------------------------------------------------------

VIII. Effective Date

    The changes ordered in this order on rehearing will become 
effective on May 13, 1997. By issuing this order, we are not further 
delaying the requirement to comply with Order No. 889 by January 3, 
1997. The current requirements of Part 37 will remain in full effect 
until the changes required by this order become effective.

List of Subjects in 18 CFR Part 37

    Electric power plants, Electric utilities.

    By the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission amends Part 37 in 
Chapter I, Title 18, Code of Federal Regulations, as set forth below.

PART 37--OPEN ACCESS SAME-TIME INFORMATION SYSTEMS AND STANDARDS OF 
CONDUCT FOR PUBLIC UTILITIES

    1. The authority citation for Part 37 continues to read as follows:

    Authority. 16 U.S.C. Secs. 791-825r, 2601-2645; 31 U.S.C. 
Sec. 9701; 42 U.S.C. Sec. 7101-7352.

    2. Section 37.3 is amended by revising paragraph (e) to read as 
follows:


Sec. 37.3  Definitions.

* * * * *
    (e) Wholesale merchant function means the sale for resale of 
electric energy in interstate commerce.
* * * * *
    3. Section 37.4 is amended by removing paragraphs (b)(5)(v) and 
(b)(5)(vi), and by revising paragraphs (b)(5)(iii) and (b)(5)(iv) to 
read as follows:


Sec. 37.4  Standards of conduct.

* * * * *
    (b) * * *
    (5) * * *
    (iii) The Transmission Provider must keep a log, available for 
Commission audit, detailing the circumstances and manner in which it 
exercised its discretion under any terms of the tariff. The information 
contained in this log is to be posted on the OASIS as provided in 
Sec. 37.6(g)(4).
    (iv) The Transmission Provider may not, through its tariffs or 
otherwise, give preference to sales for resale by the wholesale 
merchant function or by any affiliate, over the interests of any other 
wholesale customer in matters relating to the sale or purchase of 
transmission service (including issues of price, curtailments, 
scheduling, priority, ancillary services, etc.).
* * * * *
    4. Section 37.6 is amended by revising paragraphs (b)(3)(ii)(A), 
(c)(3), (c)(4), (d)(2), (d)(3), (d)(4), (e)(1)(i), (e)(1)(ii), 
(e)(1)(iii), (e)(3)(i), and (g)(3) and by adding paragraphs (b)(1)(iv), 
(c)(5), (d)(5), (e)(1)(iv), and (g)(4) to read as follows:


Sec. 37.6  Information to be posted on an OASIS.

* * * * *
    (b) * * *
    (1) * * *
    (iv) The word ``interconnection'', as used in the definition of 
``posted path'', means all facilities connecting two adjacent systems 
or control areas.
* * * * *
    (3) * * *
    (ii) Unconstrained posted paths. (A) Postings of firm and nonfirm 
ATC and TTC shall be posted separately by the day, showing for the 
current day and the next six days following and thereafter, by the 
month for the 12 months next following. If the Transmission Provider 
charges separately for on-peak and off-peak periods in its tariff, ATC 
and TTC will be posted separately for the current day and the next six 
days following for each period. These postings are to be updated 
whenever the ATC changes by more than 20 percent of the Path's TTC.
* * * * *
(c) Posting transmission service products and prices.
* * * * *
    (3) Any offer of a discount for any transmission service made by 
the Transmission Provider must be announced to all potential customers 
solely by posting on the OASIS.
    (4) For any transaction for transmission service agreed to by the 
Transmission Provider and a customer, the Transmission Provider (at the 
time when ATC must be adjusted in response to the transaction), must 
post on the OASIS (and make available for download) information 
describing the transaction (including: price; quantity; points of 
receipt and delivery; length and type of service; identification of 
whether the transaction involves the Transmission Provider's wholesale 
merchant function or any affiliate; identification of what, if any, 
ancillary service transactions are associated with this transmission 
service transaction; and any other relevant terms and conditions) and 
shall keep such information posted on the OASIS for at least 30 days. A 
record of the transaction must be retained and kept available as part 
of the audit log required in Sec. 37.7.
    (5) Customers choosing to use the OASIS to offer for resale 
transmission capacity they have purchased must post relevant 
information to the same OASIS as used by the one from whom the Reseller 
purchased the transmission capacity. This information must be posted on 
the same display page, using the same tables, as similar capability

[[Page 12504]]

being sold by the Transmission Provider, and the information must be 
contained in the same downloadable files as the Transmission Provider's 
own available capability. A customer reselling transmission capacity 
without the use of an OASIS must, nevertheless, inform the original 
Transmission Provider of the transaction within any time limits 
prescribed by the Transmission Provider's tariff or in a contract or 
service agreement between the Transmission Provider and a customer.
(d) Posting ancillary service offerings and prices.
* * * * *
    (2) Any offer of a discount for any ancillary service made by the 
Transmission Provider must be announced to all potential customers 
solely by posting on the OASIS.
    (3) For any transaction for ancillary service agreed to by the 
Transmission Provider and a customer, the Transmission Provider (at the 
time when ATC must be adjusted in response to an associated 
transmission service transaction, if any), must post on the OASIS (and 
make available for download) information describing the transaction 
(including: date and time when the agreement was entered into; price; 
quantity; length and type of service; identification of whether the 
transaction involves the Transmission Provider's wholesale merchant 
function or any affiliate; identification of what, if any, transmission 
service transactions are associated with this ancillary service 
transaction; and any other relevant terms and conditions) and shall 
keep such information posted on the OASIS for at least 30 days. A 
record of the transaction must be retained and kept available as part 
of the audit log required in Sec. 37.7.
    (4) Any other interconnected operations service offered by the 
Transmission Provider may be posted, with the price for that service.
    (5) Any entity offering an ancillary service shall have the right 
to post the offering of that service on the OASIS if the service is one 
required to be offered by the Transmission Provider under the pro forma 
tariff prescribed by part 35 of this chapter. Any entity may also post 
any other interconnected operations service voluntarily offered by the 
Transmission Provider. Postings by customers and third parties must be 
on the same page, and in the same format, as postings of the 
Transmission Provider.
(e) Posting specific transmission and ancillary service requests and 
responses.
    (1) General rules. (i) All requests for transmission and ancillary 
service offered by Transmission Providers under the pro forma tariff, 
including requests for discounts, must be made on the OASIS, and posted 
prior to the Transmission Provider responding to the request, except as 
discussed in paragraphs (e)(1) (ii) and (iii). The Transmission 
Provider must post all requests for transmission service and for 
ancillary service comparably. Requests for transmission and ancillary 
service, and the responses to such requests, must be conducted in 
accordance with the Transmission Provider's tariff, the Federal Power 
Act, and Commission regulations.
    (ii) The requirement in paragraph (e)(1)(i) of this section, to 
post requests for transmission and ancillary service offered by 
Transmission Providers under the pro forma tariff, including requests 
for discounts, prior to the Transmission Provider responding to the 
request, does not apply to requests for next-hour service made during 
Phase I.
    (iii) In the event that a discount is being requested for ancillary 
services that are not in support of basic transmission service provided 
by the Transmission Provider, such request need not be posted on the 
OASIS.
    (iv) In processing a request for transmission or ancillary service, 
the Responsible Party shall post the same information as required in 
Sec. 37.6(c)(4), Sec. 37.6(d)(3), and the following information: the 
date and time when the request is made, its place in any queue, the 
status of that request, and the result (accepted, denied, withdrawn).
* * * * *
    (3) Posting when a transaction is curtailed or interrupted.
    (i) When any transaction is curtailed or interrupted, the 
Transmission Provider must post notice of the curtailment or 
interruption on the OASIS, and the Transmission Provider must state on 
the OASIS the reason why the transaction could not be continued or 
completed.
* * * * *
    (g) * * *
    (3) Notices of transfers of personnel shall be posted as described 
in Sec. 37.4(b)(2). The posting requirements are the same as those 
provided in Sec. 37.7 for audit data postings.
    (4) Logs detailing the circumstances and manner in which a 
Transmission Provider or Responsible Party exercised its discretion 
under any terms of the tariff shall be posted as described in 
Sec. 37.4(b)(5)(iii). The posting requirements are the same as those 
provided in Sec. 37.7 for audit data postings.
    5. Section 37.7 is amended by revising paragraph (b) to read as 
follows:


Sec. 37.7  Auditing transmission service information.

* * * * *
    (b) Audit data must remain available for download on the OASIS for 
90 days, except ATC/TTC postings that must remain available for 
download on the OASIS for 20 days. The audit data are to be retained 
and made available upon request for download for three years from the 
date when they are first posted in the same electronic form as used 
when they originally were posted on the OASIS.


Sec. 37.8  [Removed]

    6. Section 37.8 is removed.

    [Note: This attachment will not appear in the Code of Federal 
Regulations.]

Attachment 1

List of Requests for Rehearing of Order No. 889

    (This list includes all requests for rehearing that made a 
reference to Order No. 889 in their text and/or caption)

Company Name (Abbreviation)

1. Alabama Municipal Electric Authority (AL MEA)*
2. Alabama Electric Cooperative, Inc. and South Mississippi Electric 
Power Association (AL EC)*
3. Operating Companies of American Electric Power System (AEP)
4. American Public Power Association (APPA)
5. Basin Electric Power Cooperative (Basin EC)*
6. Blue Ridge Power Agency, Northeast Texas Electric Cooperative, 
Inc., Sam Rayburn G&T Electric Cooperative, Inc., and Tex-La 
Electric Cooperative of Texas, Inc. (Blue Ridge)
7. Ralph R. Mabey, Trustee for Cajun Electric Power Cooperative, 
Inc. (Cajun)*
8. Carolina Power & Light Company (Carolina P&L)
9. Central Power and Light Company, West Texas Utilities Company, 
Public Service Company of Oklahoma, and Southwestern Electric Power 
Company (Central P&L)*
10. Central Montana Electric Power Cooperative, Inc. (Central 
Montana EC)*
11. Cities of Benton, Conway, North Little Rock, Osceola, Prescott, 
West Memphis, Arkansas and the Farmers Electric Cooperative 
Corporation (AK Cities)*
12. City of Redding, CA (Redding)
13. City of Santa Clara, CA (Santa Clara)*
14. Coalition for a Competitive Electric Market (CCEM)
15. Colorado Association of Municipal Utilities (CAMU)

[[Page 12505]]

16. Consolidated Edison Company of New York, Inc., Long Island 
Lighting Company, New York State Electric & Gas Corporation, and 
Rochester Gas and Electric Corporation (ConEd)
17. Cooperative Power (Cooperative Power)*
18. Edison Electric Institute (EEI)
19. El Paso Electric Company (El Paso)
20. Electric Power Research Institute (EPRI) and North American 
Electric Reliability Council (NERC), on behalf of Industry 
Management Process on ``how'' to implement Transmission Services 
Information Networks (EPRI/NERC Working Group)
21. Florida Power & Light Company (FPL)*
22. Florida Power Corporation (Florida Power Corp)*
23. Hoosier Energy Rural Electric Cooperative, Inc. (Hoosier EC)*
24. Illinois Power Company (Illinois Power)
25. Indianapolis Power & Light Company (Indianapolis P&L)
26. Michigan Systems (Michigan Public Power Agency, Michigan South 
Central Power Agency, and Wolverine Power Supply Cooperative, Inc.) 
on behalf of themselves, Florida Municipal Power Agency, and Central 
Minnesota Municipal Power Agency (Michigan Systems)
27. Mid-Continent Area Power Pool (MAPP)
28. Montana-Dakota Utilities Company (Montana-Dakota Utilities)
29. Municipal Electric Utilities Association of New York State (NY 
MU)
30. National Rural Electric Cooperative Association (NRECA)
31. Nebraska Public Power District (NE Public Power District)
32. New York Power Pool (NYPP)
33. Northwest Regional Transmission Association (NWRTA)*
34. Nuclear Energy Institute (Nuclear Energy Institute)
35. Nucor Corporation (Nucor)
36. Ohio Valley Electric Corporation and Indiana-Kentucky Electric 
Corporation (Ohio Valley)
37. Pennsylvania Rural Electric Association and Allegheny Electric 
Cooperative, Inc. (PA Coops)
38. Public Service Company of Colorado (Public Service Co of CO)
39. Southern California Edison Company (SoCal Edison)
40. Southern California Gas Company (SoCal Gas) ``'
41. Southwest Regional Transmission Association (SWRTA)*
42. Transmission Access Policy Study Group (TAPS)
43. Transmission Dependent Utility Systems (TDU Systems)
44. Union Electric Company (Union Electric)
45. Utilities for an Improved Transition (FIT Utilities)
46. Virginia Electric and Power Company (VEPCO)

    * Request for rehearing raises no direct Order No. 889 issues.
    ** Request for clarification.

[FR Doc. 97-5768 Filed 3-13-97; 8:45 am]
BILLING CODE 6717-01-P


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