[Federal Register Volume 61, Number 92 (Friday, May 10, 1996)]
[Rules and Regulations]
[Pages 21736-21846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10693]



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[[Page 21737]]

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 37

[Docket No. RM95-9-000; Order No. 889]


Open Access Same-Time Information System (Formerly Real-Time 
Information Networks) and Standards of Conduct

 April 24, 1996.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission is adding rules 
establishing and governing an Open Access Same-time Information System 
(OASIS) (formerly real-time information networks) and prescribing 
standards of conduct. Under this final rule, each public utility (or 
its agent) that owns, controls, or operates facilities used for the 
transmission of electric energy in interstate commerce will be required 
to create or participate in an OASIS that will provide open access 
transmission customers and potential open access transmission customers 
with information, provided by electronic means, about available 
transmission capacity, prices, and other information that will enable 
them to obtain open access non-discriminatory transmission service. 
This final rule requires each public utility subject to the rule to 
implement standards of conduct to functionally separate transmission 
and wholesale power merchant functions and the creation of a basic 
OASIS system. In addition, some of the standards and formats for OASIS 
nodes are prescribed in a document entitled OASIS Standards and 
Communication Protocols that is being issued with the final rule. The 
Commission also is establishing further procedures to complete the 
standards for displays and formats. The development of OASIS 
requirements will continue in a Phase II, in which the Commission will 
continue to develop the requirements for a fully functional OASIS.

    Effective Date: This final rule will become effective on July 9, 
1996.
    Compliance Date: Compliance with the standards of conduct and 
operation of an OASIS meeting the requirements of this final rule must 
commence on or before November 1, 1996.
    Conference Date: A technical conference on any remaining issues 
will be held on June 17, 1996.

ADDRESSES: The technical conference will be held at the Commission's 
headquarters at 888 First Street, NE., Washington, DC. 20426.

FOR FURTHER INFORMATION CONTACT:

Marvin Rosenberg (Technical Information), Office of Economic Policy, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 208-1283
William C. Booth (Technical Information), Office of Electric Power 
Regulation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426 (202) 208-0849
Gary D. Cohen (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
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, NE., Washington, DC 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. CIPS is also available through the Fed World system (by 
modem or Internet). 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 indefinitely in ASCII and Wordperfect 5.1 format. 
The complete text on diskette in WordPerfect format may also be 
purchased from the Commission's copy contractor, La Dorn Systems 
Corporation, also located in the Public Reference Room at 888 First 
Street, NE., Washington, DC 20426.

Table of Contents

I. Introduction
II. Public Reporting Burden
III. Discussion
    A. Background
    B. Summary of the Regulations and Their Implementation
    C. Section 37.1--Applicability
    D. Section 37.2--Purpose
    E. Section 37.3--Definitions
    F. Section 37.4--Standards of Conduct
    1. Requests by Smaller Public Utilities for Exemptions from the 
Standards of Conduct 
    2. Suggested Revisions to the Standards of Conduct and Timing 
    3. Whether to Require the Separation of Generation and 
Transmission Functions
    G. Section 37.5--Obligations of Transmission Providers
    H. Section 37.6--Information To Be Posted on an Oasis
    1. Oasis Objectives
    2. Posting Available Transmission Capacity
    a. ATC for Network Integration Service
    b. Minimizing the Reporting of ATC
    c. Methodology for Calculating ATC and TTC
    d. Accommodating Flow-Based Pricing
    e. Actual Flow Data
    f. Providing Supporting Information
    g. Long-Term Studies
    3. Posting Transmission Service Products and Prices
    4. Posting Ancillary Service Offerings and Prices
    5. Posting Transmission Service Requests and Responses
    a. Posting Curtailments and Interruptions
    b. Posting Denials of Requests for Service
    c. Transaction Anonymity
    6. Posting Facility Status Information
    7. Posting Transmission Service Schedules Information
    8. Posting Other Transmission-Related Communications
    I. Section 37.7--Auditing Transmission Service Information
    J. Standards and Communication Protocols
    1. Summary of Standards and Communication Protocol Requirements
    2. Number of OASIS Nodes
    3. Direct Connections to OASIS Nodes
    4. Value-Added OASIS Services Provided by Transmission Providers 
or Responsible Parties
    5. Transmission Services Information Timing Requirements
    6. Common Codes
    a. Company Codes
    b. Common Location Codes
    7. Data Definitions and File Formats Not Covered by the How 
Report
    a. Offers to Provide Ancillary Services Provided by an Entity 
Other Than the Transmission Provider
    b. Offering of Primary and Secondary Capacity
    8. Formats for Downloadable Files Not Covered in the How Report
    a. Standard Format for Data Used in Calculating ATC
    b. Standard Formats for Transmission Studies
    c. Standard Format for Electronic Submission to the Commission 
of Transmission Tariffs
    9. Communication Protocol Issues
    a. Internet Browsers
    b. Bandwidth of Node Connections to the Internet
    c. Data Compression Standards
    d. Other Communication Protocol Issues Raised by Commenters
    i. The Requirement to Use FTP for File Transfers
    ii. Field Size for Path Names
    iii. Files Containing More Than 100,000 Bytes
    K. Cost Recovery Issues

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    1. Costs of Developing and Running an OASIS
    2. Cost of Posting Resales of Capacity on the OASIS
    3. Cost of Posting Ancillary Services on the OASIS
    L. Section 37.8--Implementation in Phases
    1. Phase I Implementation
    2. Phase II Implementation
IV. Regulatory Flexibility Act
V. Environmental Statement
VI. Information Collection Statement
VII. Effective Date
Regulatory Text
Attachments
    <diamond> List of Commenters to RIN NOPR
    <diamond> Standards and Communication Protocols for Open Access 
Same-time Information System with Appendix A--Data Element 
Dictionary and Appendix B--Request (Query) Variables

I. Introduction

    The Federal Energy Regulatory Commission (Commission) is 
promulgating new regulations amending 18 CFR to add Part 37 containing 
rules establishing and governing transmission information networks and 
standards of conduct. The Commission is issuing this final rule in 
tandem with its final rule on Open Access Transmission and Stranded 
Costs (Open Access Final Rule).<SUP>1 This final rule applies to any 
public utility that offers open access transmission services under the 
Open Access Final Rule pro forma tariff. Under the Open Access Final 
Rule, the open access pro forma tariff may be used by wholesale 
transmission customers and by retail transmission customers that are 
able to receive unbundled retail transmission either voluntarily from 
the public utility or as a result of a state retail access program.
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    \1\ See Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Final Rule, FERC Stats. & Regs. para. 31,036 (April 24, 
1996); this document is being published concurrently in the Federal 
Register.
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    This final rule is being issued after a review of the comments 
filed in response to the Commission's notice of proposed rulemaking 
issued in this proceeding on December 13, 1995 (RIN NOPR).<SUP>2
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    \2\ Real-Time Information Networks and Standards of Conduct, 
Notice of Proposed Rulemaking, 60 FR 66182 (December 21, 1995), FERC 
Stats. & Regs. para. 32,516 (December 13, 1995).
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    This final rule becomes effective on July 9, 1996. By November 1, 
1996, all affected public utilities must file procedures with the 
Commission that will enable customers and the Commission to determine 
whether they are in compliance with the standards of conduct 
requirements contained herein.
    Additionally, under this final rule, each public utility as defined 
in section 201(e) of the Federal Power Act, 16 U.S.C. 824(e) (1994), 
(or its agent) that owns, controls, or operates facilities used for the 
transmission of electric energy in interstate commerce (each 
Transmission Provider) must develop or participate in an Open Access 
Same-time Information System (OASIS).<SUP>3 This final rule establishes 
Phase I OASIS rules that require the creation of a basic OASIS.<SUP>4 
The basic OASIS required by this final rule must be in place and 
operational by November 1, 1996. The development of OASIS requirements 
will continue in Phase II, during which the Commission will develop the 
requirements for a fully functional OASIS.
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    \3\ In the notice of technical conference that initiated this 
proceeding, see infra n. 12, we chose the term ``Real-Time 
Information Network'' to describe the electronic information system 
envisioned by that notice. We invited comments on whether we should 
substitute another term in place of RIN. In response, a number of 
commenters suggested that ``RIN'' was not a suitable name for the 
electronic information network envisioned by the RIN NOPR, mainly 
because while some RIN postings may be made ``real-time'' most will 
not and that, therefore, RIN is a misnomer.
    After a review of suggested replacements presented in the 
comments, we will abandon the name ``RIN'' in favor of Open Access 
Same-time Information System, suggested by Virginia Electric Power 
Company (VEPCO), for several reasons. First, as noted above, the 
information system being developed in this proceeding actually will 
be a ``same-time'' information system, and not a ``real-time'' 
system. Second, VEPCO correctly points out that the system will be 
part of an existing network (the Internet) and not a new network. 
Third, the name ``OASIS'' highlights that the system relates to open 
access.
    \4\ Any entity may, for good cause, seek a waiver of the 
requirements established by this final rule, either as to the 
creation of an OASIS or for reporting requirements.
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    While the final rule set forth in this order is consistent with the 
proposal described in the RIN NOPR, it also resolves certain issues 
that were described in the RIN NOPR but left undecided, and adds 
clarifications and revisions, as suggested by the comments. As proposed 
in the RIN NOPR, the final rule describes what information must be 
provided on an OASIS, how an OASIS must be implemented and used, and 
contains a code of conduct applicable to all transmission providing 
public utilities.
    As proposed in the RIN NOPR, we are issuing this final rule along 
with a separate document entitled OASIS Standards and Communication 
Protocols (Standards and Protocols) to help ensure that each OASIS will 
provide information in a uniform manner. However, the standards and 
protocols are not yet complete. Consequently, we are inviting the How 
Group <SUP>5 to submit an additional report, on or before May 28, 1996, 
to help us resolve these deficiencies. We will also hold a technical 
conference on June 17, 1996 to resolve any remaining issues and to 
allow input from interested persons. We will issue a revised Standards 
and Protocols document as soon as possible thereafter.
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    \5\ See, infra, n. 13.
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    We are moving promptly to complete the standards and protocols to 
ensure that the OASIS will be operational and in compliance with this 
final rule by November 1, 1996. In selecting this date, we have 
balanced the need to have a functional system of fair and non-
discriminatory information in place to support the Open Access Final 
Rule against the comments that argued that implementation of an OASIS 
could not be accomplished in 60 days and to avoid implementation during 
the peak winter or summer months.

II. Public Reporting Burden

    The final rule requires Transmission Providers to participate in an 
OASIS designed to provide open access transmission users and potential 
open access transmission users with information by electronic means 
about available transmission capacity and prices.
    The RIN NOPR contained an estimated annual public reporting burden 
associated with a final rule consistent with the RIN NOPR. In response 
to the RIN NOPR, NRECA <SUP>6 filed comments with the Commission that 
argued that the Commission's estimated public reporting burden should 
have taken into account that Question 45 of the RIN NOPR asked whether 
OASIS rules should be extended to apply to non-public utilities that 
own or control facilities used for the transmission of electric power 
in interstate commerce.<SUP>7 Based on this inquiry, NRECA argued that 
the public burden estimate should have been based on the assumption 
that the proposed OASIS rules would be extended to apply to non-public 
utilities (even though this was not proposed by the Commission).
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    \6\ Attached to this document is a list of the commenters and 
the abbreviations used to designate them. Several of the comments 
were filed late. We, nevertheless, will consider these comments.
    \7\ NRECA also submitted a letter to the Office of Management 
and Budget (OMB) that raised the same issue.
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    The Commission's task in preparing a public burden estimate at the 
NOPR stage was to estimate the annual public reporting burden 
associated with a final rule consistent with the RIN NOPR. This is what 
the Commission did. An

[[Page 21739]]

 estimate based on deviations from the NOPR proposal, as NRECA 
suggested, would have been inappropriate. At the same time, however, by 
asking Question 45, we identified the issue and gave the commenters an 
opportunity to be heard before making a final decision.
    Our final rule, like the RIN NOPR, applies only to public 
utilities, and not to non-public utilities. However, as discussed in 
this order and as commented upon by various non-public utilities, in 
the Open Access Final Rule we are including a reciprocity provision in 
public utility open access tariffs under which all those who elect to 
take service under the open access tariff (including non-public 
utilities) will have to offer reciprocal service including an 
information network, unless they are granted a waiver of the 
reciprocity provision in the tariff.<SUP>8 Consequently, we have 
increased the estimate of number of respondents in this rulemaking to 
reflect the additional burden on those non-public utilities that seek 
service under open access tariffs. However, this is offset by our 
current expectation that there will be far fewer OASIS sites than we 
originally anticipated in the RIN NOPR. The How Group estimates there 
will be between 20-35 OASIS sites nationwide.<SUP>9 Using the higher 
number, the burden of running each OASIS will be shared, on average, by 
four respondents. This is reflected in the burden hour and cost 
estimates.
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    \8\ As explained in the Open Access Final Rule, non-public 
utilities that do not want to meet the reciprocity condition may 
choose not to take service under an open access tariff. In that 
circumstance, the public utility may, if it chooses, voluntarily 
provide transmission service on a unilateral basis to the non-public 
utility.
    \9\ How Group comments at 19.
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    Our burden hour and cost estimates include the information 
gathering requirements imposed on public utilities that do not develop 
their own OASIS. Additionally, we have refined our estimate of the 
annual public reporting burden to account for revisions that this final 
rule makes to the RIN NOPR.
    Estimated Annual Burden:

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                                                                                                         Total  
                          Data collection                              No. of      No. of   Hours per    annual 
                                                                    respondents  responses   response    hours  
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Reporting.........................................................         140           1       1879    263,060
Recordkeeping.....................................................         140           1        418    58,520 
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Total Annual Hours for Collection (Reporting + Recordkeeping, (if appropriate)) = 321,580.                      
Data collection costs: The Commission projects the average annualized cost per respondent to be the following:  
  Annualized Capital/Startup Costs--$47,500.                                                                    
  Annualized Costs (Operations & Maintenance)--$142,250.                                                        
  Total Annualized Costs--$189,750.                                                                             

Internal Review

    The Commission has reviewed the collection of information required 
by this final rule and has determined that the collection of 
information is necessary and conforms to the Commission's plan, as 
described in this final rule, for the collection, efficient management, 
and use of the required information. The Commission has assured itself, 
by means of its internal review, that there is specific, objective 
support for the information burden estimate set forth above.<SUP>10
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    \10\ See 44 U.S.C. Sec. 3506(c).
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    Persons wishing to comment on the collections of information 
required by this final rule should direct their comments to the Desk 
Officer FERC, Office of Management and Budget, Room 3019NEOB, 
Washington, D.C. 20503, phone 202-395-3087, facsimile: 202-395-7285 or 
via the Internet at <a href="/cdn-cgi/l/email-protection#cea6a7a2a2a7abbc919191919191ba8eafffe0aba1bee0a9a1b8"><span class="__cf_email__" data-cfemail="533b3a3f3f3a36210c0c0c0c0c0c271332627d363c237d343c25">[email protected]</span></a>. Comments must be filed 
with the Office of Management and Budget within 60 days of publication 
of this document in the Federal Register. A copy of any comments filed 
with the Office of Management and Budget also should be sent to the 
following address at the Commission: Federal Energy Regulatory 
Commission, Information Services Division, Room 41-17, 888 First 
Street, NE., Washington, DC 20426. For further information, contact 
Michael Miller, 202-208-1415.

III. Discussion

A. Background

    This proceeding began with the issuance of our proposed Open Access 
rule (Open Access NOPR) <SUP>11 and a notice of technical conference to 
consider whether a RIN (now an OASIS) or some other option would be the 
best means to ensure that potential customers of transmission services 
could obtain access to transmission service on a non-discriminatory 
basis. <SUP>12 The notice of technical conference was followed by 
procedures and input (described in the RIN NOPR) that led to the 
issuance of the RIN NOPR.
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    \11\ See Promoting Wholesale Competition Through Open Access 
Non-Discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Notice and Supplemental Notice of Proposed Rulemaking, 60 
FR 17662 (April 7, 1995), FERC Stats. & Regs. para.32,514 (March 29, 
1995).
    \12\ Real-Time Information Networks, Notice of Technical 
Conference and Request for Comments, 60 FR 17726 (April 7, 1995).
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    Open access non-discriminatory transmission service requires that 
information about the transmission system must be made available to all 
transmission customers at the same time. This means that public 
utilities must make available to others the same transmission 
information that is available to their own employees and that is 
pertinent to decisions they make involving the sale or purchase of 
electricity. The RIN NOPR suggested requirements representing the first 
steps towards accomplishing these objectives.
    The RIN NOPR addressed four main issues: the types of information 
that need to be posted on an OASIS; technical issues concerning the 
development and implementation of an OASIS; the development of a basic 
OASIS in Phase I and the development of a fully functional OASIS in 
Phase II; and proposed standards of conduct to prevent employees of a 
public utility (or any of its affiliates) engaged in marketing 
functions from obtaining preferential access to OASIS-related 
information.

[[Page 21740]]

    The Commission's consideration of the first two of these issues 
relied heavily on the efforts of two industry-led working groups that 
presented recommendations to the Commission. <SUP>13
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    \13\ The North American Electric Reliability Council (NERC) 
acted as a facilitator for an industry-led independent working 
group, representing diverse interests, to help participants reach 
consensus, and to help them prepare a report to the Commission on 
what information should be posted on a RIN (the ``What Group''). The 
Electric Power Research Institute (EPRI) facilitated a similar 
working group (the ``How Group'') that sought consensus on how to 
implement a system that would accomplish these objectives. Both 
groups submitted reports to the Commission describing their progress 
in reaching consensus on their respective issues. As explained in 
the RIN NOPR, after determining that the working groups had balanced 
representation from diverse interests and had operated in an open, 
inclusive manner, the Commission used the working groups' 
recommendations as the starting point for developing the RIN NOPR.
    A fuller description of the working groups' composition and 
activities is contained in the RIN NOPR and in the reports that 
those groups submitted to the Commission for its review (attached to 
the RIN NOPR as Appendices ``A'' and ``B'' and made publicly 
available at the Commission's offices and through the Commission 
Issuance Posting System (CIPS)).
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    Additionally, the RIN NOPR invited commenters to address specific 
questions on various issues and invited comments generally on the 
entire proposal.
    As discussed in the RIN NOPR, the handling of various types of 
information that might be posted on an OASIS depends on substantive 
determinations being made in the Commission's Open Access rulemaking 
proceeding.<SUP>14 For this reason, the RIN NOPR attempted to identify 
the issues that might be affected by decisions that would be made in 
the Open Access rulemaking and invited comment on the mechanics of 
implementing whatever determinations ultimately would be reached in the 
Open Access rulemaking, without attempting to prejudge the merits of 
the underlying legal and policy issues.
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    \14\ For example, the information about ancillary services that 
must be posted on an OASIS depends on what ancillary services a 
public utility must provide. Likewise, the information about 
discounts that must be posted on an OASIS depends on whether 
discounting is allowed.
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    Additionally, the RIN NOPR included (as Appendix ``C'') a set of 
upload and download templates for comment to ensure that all data 
definitions are the same and that the information presented on the 
OASIS will be uniform and clearly understood.
    The Commission's RIN NOPR, issued on December 13, 1995, invited 
comments on enumerated questions, along with general comments. Comments 
were filed by over 100 commenters. These comments were generally 
favorable to the OASIS concept, although numerous disagreements 
remained as to the details. The comments will be discussed below on an 
issue-by-issue basis.<SUP>15
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    \15\ In the discussion that follows, our references to comments 
are illustrative and not inclusive. While we have intended to 
identify all of the major issues raised by the commenters, we have 
not attempted to identify all commenters in instances where more 
than one comment makes the same point.
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    In the RIN NOPR, we invited the two industry-led working groups to 
continue their efforts to reach consensus and to report to us on their 
progress. On March 7, 1996, the How Group submitted a report giving 
proposed revisions to their original report.<SUP>16 The How Group also 
submitted a report on April 15, 1996 making recommendations on 
additional issues on which the group had reached consensus.
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    \16\ The participants in the How Group submitted a report 
entitled Consensus Comments of the Wholesale Electric Power Industry 
on behalf of the ``industry management process (interim) on how to 
implement transmission services information networks?''
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B. Summary of the Regulations and Their Implementation

    The Commission is issuing this final rule with the Open Access 
Final Rule to implement the legal and policy determinations being made 
in the Open Access Final Rule.<SUP>17 This final rule contains three 
basic provisions that, taken together, will ensure that transmission 
customers have access to transmission information enabling them to 
obtain open access transmission service on a non-discriminatory basis. 
This final rule is necessary, therefore, to meet the legal requirement, 
discussed in the Open Access Final Rule, that the Commission remedy 
undue discrimination in interstate transmission services by public 
utilities.
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    \17\ For example, a number of smaller public utilities and non-
public utilities have argued that they should be exempted from the 
OASIS requirements. The Open Access Final Rule provides that public 
utilities may seek waivers of some or all of the requirements of the 
Open Access rules. This would include the OASIS requirement. 
Similarly, the Open Access Final Rule provides that non-public 
utilities may seek waivers of the tariff reciprocity provision as 
applied to them.
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    The first provision establishes standards of conduct. These 
standards are designed to ensure that a public utility's employees (or 
any of its affiliates' employees) engaged in transmission system 
operations function independently of the public utility's employees (or 
of any of its affiliates' employees) who are engaged in wholesale 
purchases and sales of electric energy in interstate commerce. Such 
separation is vital if we are to ensure that the utility does not use 
its access to information about transmission to unfairly benefit its 
own or its affiliates' sales. Entities subject to these rules are to 
achieve compliance with the standards of conduct by November 1, 1996.
    The second provision sets out basic rules requiring that 
jurisdictional utilities that own or control transmission systems set 
up an OASIS. Under these rules, the utilities are required to provide 
certain types of information on that electronic information system as 
to the status of their transmission systems and are required to do so 
in a uniform manner. With these requirements, we are opening up the 
``black box'' of utility transmission system information. When in 
place, the OASIS will allow transmission customers to determine the 
availability of transmission capacity and will help ensure that public 
utilities do not use their ownership, operation, or control of 
transmission to deny access unfairly. Entities subject to this rule are 
to have a basic OASIS, meeting the requirements of this final rule, in 
operation by November 1, 1996.
    The third component involves the various standards and protocols 
referenced in the regulations that are necessary to ensure that the 
OASIS system presents information in a consistent and uniform manner. 
As proposed in the RIN NOPR, this final rule references a publication 
entitled OASIS Standards and Communication Protocols.<SUP>18 This 
publication contains the above-mentioned standards and communication 
protocols. 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). 
Because of their level of detail, the standards and protocols 
referenced in the regulations will be contained in the Standards and 
Protocols document and will not be set out in the Code of Federal 
Regulations.
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    \18\ This title differs slightly from the title we suggested for 
this document in the RIN NOPR. We are making this change to reflect 
more accurately the contents of the document as it has evolved.
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    In developing the standards and protocols, we have been greatly 
assisted by the industry. However, more work needs to be done before 
the necessary standards and protocols are complete. For this we will 
again look to the industry and its working groups. The Commission 
believes a standard or uniform set of protocols is essential. The 
industry is best situated not only to develop the necessary standards 
but to develop them where possible with a consensus. Consequently, we 
are asking the How Group to provide us with

[[Page 21741]]

additional recommendations on those technical issues remaining to be 
resolved. After receiving this report, we will hold a technical 
conference. In the meantime, to enable utilities to begin the process 
of implementing their OASIS, we will publish the standards and 
protocols that have been developed to date.
    We must also provide for the contingency that, over time, the 
standards and protocols may need to be revised. To this end, NERC, in 
its comments, proposed to continue the industry-based process for 
developing OASIS requirements begun by the two industry working groups. 
NERC argued that the Commission should abandon its intention to approve 
standards developed by industry-wide consensus and to make decisions in 
those areas where consensus is not achieved. Instead, NERC argued that 
the Commission should authorize an industry group, facilitated by NERC 
and EPRI, to set and enforce detailed standards under broad policy 
guidelines fixed by the Commission.
    As we have needed the contributions of the industry to develop the 
standards and protocols, we will continue to need that assistance in 
the future to develop a consensus wherever possible. We need to strike 
a balance between standardization to make OASIS work and encouraging 
innovation. To this end we encourage all industry participants to 
continue seeking consensus and reporting proposals to the Commission 
for our consideration. We welcome the continued work of all industry 
participants on revising and improving standards and establishing 
appropriate methods for recommending standards in the future. We will 
continue to give careful consideration to all consensus recommendations 
presented by the industry group(s), provided that they continue to 
invite balanced participation in an open process.
    However, we reject entirely the notion that the Commission need not 
approve the Standards and Protocols and that these matters can be left 
to the industry for implementation and self-policing. Although we 
continue to seek industry consensus, the Commission must reserve final 
decisions to itself. We cannot turn over the process of approving and 
enforcing OASIS requirements to the industry. The Commission does not 
believe that resolution of the outstanding issues or future changes 
will occur more quickly without Commission oversight.\19\ Nor do we 
believe that merely by announcing broad policy guidelines we would be 
creating a mechanism that would be sufficient to allow the Commission 
to revise regulations quickly. Accordingly, we will not abdicate our 
responsibility to decide these issues ourselves; nor shall we delegate 
responsibility for making these decisions to anyone else.
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    \19\ To the contrary, our experience with the natural gas 
pipeline industry persuades us that an expedited schedule is more 
likely with active Commission oversight than otherwise.
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    With respect to the as yet unresolved technical issues, we invite 
the How Group to report to us on or before May 28, 1996 on these issues 
(and to attach any comments it has received from any interested person 
with opposing views). Prior to issuing a revised Standards and 
Protocols document, we will hold a technical conference on these issues 
on June 17, 1996. This short time frame is necessary if the OASIS is to 
be properly operational by November 1, 1996.
    The Commission recognizes that the standards and protocols 
necessarily will evolve over time. The Commission is committed to a 
process for reviewing and, if necessary, revising and improving the 
Standards and Protocols on a regular basis after implementation. We are 
sensitive to the fact that business practices and technology will 
continue to change under open access and that a mechanism to make 
changes to the regulations and to the accompanying standards and 
protocols on an expedited basis may be needed. It would be premature at 
this time, however, to determine the appropriate mechanism for making 
such changes, because the method could vary depending on the type of 
change contemplated. In filing its report, we ask that the How Group 
advise us on this issue. We will welcome discussions and comments on 
mechanisms for revising the standards and protocols on an ongoing basis 
at the June 17, 1996 technical conference.
    In the sections that follow, we discuss, section-by-section, the 
regulations we are adopting with this final rule; how the costs of 
implementing the requirements of these regulations are to be recovered; 
and the details of implementation.

C. Section 37.1--Applicability

    This section is unchanged substantively from what we proposed in 
the RIN NOPR. As proposed previously, the rules in Part 37 apply to any 
public utility that owns or controls facilities used for the 
transmission of electric energy in interstate commerce.\20\
---------------------------------------------------------------------------

    \20\ We are, however, modifying this provision to clarify that 
it is intended to include public utilities that ``operate'' 
facilities used for the transmission of electric energy in 
interstate commerce. We are also clarifying that these regulations 
apply to transactions performed under the pro forma tariff required 
in Part 35 of the Commission's regulations.
---------------------------------------------------------------------------

    In proposing these regulations, we stated that issues relating to 
potential gaps in providing comparable open access to wholesale 
transmission services or to transmission information that may arise 
because the requirements do not apply to non-public utilities would be 
addressed in the Open Access rulemaking proceeding. We also invited 
comment on whether the Commission should extend OASIS requirements to 
non-public utilities that own or control facilities used for the 
transmission of electric energy in interstate commerce (Question 45) 
and on whether the reciprocity condition of the proposed Open Access 
rule dictates that a non-public utility should have an OASIS (Question 
46).
Comments
    The responses to Question 45 split along industry lines. Generally, 
public utilities subject to OASIS rules advocated that the Commission 
should impose OASIS requirements on non-public utilities. They argued 
that applying OASIS requirements to non-public utilities would promote 
competition and a ``level playing field.'' These commenters argue that 
all companies should pay the costs of developing and operating an OASIS 
and should be required to divulge information to their competitors on 
it.
    Along these lines, Allegheny argued that, in order to provide a 
level playing field between public utilities and their competitors, the 
proposed standards of conduct should be expanded to include personnel 
of any entity that trades on an OASIS. Allegheny suggested, therefore, 
that the standards of conduct be rewritten to be applicable to non-
public utilities through a requirement that they sign confidentiality 
agreements as a condition of obtaining access to OASIS.
    Those favoring applying OASIS rules to non-public utilities argued 
that a significant portion of the wholesale transmission market is 
owned by non-public utilities (ConEd estimates that non-public 
utilities, excluding cooperatives, control about 25 percent of the 
circuit miles of transmission lines nationwide). They argued that, 
without information about these lines, accurate calculations of 
available transmission capability cannot be made. However, those 
advocating that the Commission should assert jurisdiction over non-
public utilities were divided between those who maintained that the 
Commission has authority to do so directly under Sec. 311 of the 
Federal

[[Page 21742]]

Power Act (FPA) \21\ and those who maintained that the Commission does 
not have such authority. The latter group suggested that the 
Commission's authority is not clearcut and, to avoid needless delay and 
litigation, the Commission should rely on the reciprocity condition in 
the pro forma tariffs to extend OASIS requirements to non-public 
utilities.\22\ ConEd argued that we should state that compliance with 
OASIS requirements is required by both Sec. 311 and reciprocity.
---------------------------------------------------------------------------

    \21\ 16 U.S.C. Sec. 825j. Section 311 authorizes the Commission 
to obtain information (and conduct appropriate investigations) 
about, among other matters, the transmission of electric energy 
throughout the United States, regardless of whether such 
transmission is otherwise subject to the Commission's jurisdiction, 
and to report to Congress the results of any investigations it 
carries out under the authority of this provision.
    \22\ See discussion of Question 46, infra.
---------------------------------------------------------------------------

    The larger non-public utilities argued that, while the Commission 
lacks authority to impose OASIS rules under Sec. 311 of the FPA, they 
nevertheless will voluntarily comply with the rules because this would 
be in their own best interest. By contrast, a number of small non-
public utilities argued that they should be exempt from OASIS rules, 
particularly the standards of conduct, for the same reasons that 
smaller public utilities argued that they should be exempted from the 
requirements of the Open Access Final Rule. The smaller non-public 
utilities stressed that they do not ``control'' many of their 
transmission lines and that many of their lines lack commercial 
interest. They recommended the development of a joint or regional OASIS 
that would make participation in an OASIS easier and argued that, as to 
smaller non-public utilities, the rules requiring a separation of 
functions are unduly burdensome and their scant benefits would be 
outweighed by their costs to consumers.
    NRECA argued that the availability of transmission service under 
Sec. 211 of the FPA is sufficient to prevent abuses. By contrast, Com 
Ed argued that Commission orders in Sec. 211 proceedings come too late 
to prevent abuses.
    In Question 46 of the RIN NOPR, we asked whether, based on 
reciprocity, we should require non-public utilities to develop or 
participate in an OASIS.\23\ The responses to this question generally 
are split along the same lines as the responses to Question 45, with 
non-public utilities pointing out that most would participate 
voluntarily in an OASIS because it would be in their best interest to 
do so.
---------------------------------------------------------------------------

    \23\ The discussion of questions 45 and 46 by commenters often 
overlapped.
---------------------------------------------------------------------------

    APPA asserted that voluntary participation would suffice to 
accomplish the Commission's goals and seeks assurance that compliance 
with OASIS requirements by non-public utilities would be deemed by the 
Commission to satisfy the reciprocity condition in the pro forma 
tariffs. APPA also asserted that participation in a regional OASIS 
would make compliance easier for non-public utilities and would help 
them deal better with operational issues such as parallel flows. At the 
same time, NE Public Power District argued that, although it is willing 
to participate in an OASIS voluntarily, the Commission lacks authority 
to compel publicly-owned non-public utilities to comply with OASIS 
regulations.
    In contrast, a number of public utilities maintained that non-
public utilities cannot provide comparable open-access non-
discriminatory service unless they comply with the same OASIS rules as 
do public utilities. PJM argued that, although public utilities and 
non-public utilities differ in their ownership, this does not provide a 
rational basis to exclude non-public utilities from participation in an 
OASIS. Carolina P&L argued that the same concerns that motivated the 
Commission to propose the standards of conduct dictate that the rules 
should apply equally to non-public utilities.
    Others argued that, if non-public utilities need not comply with 
the same OASIS rules applicable to public utilities, the non-public 
utilities would have the benefit of an uneven playing field that would 
give them a competitive advantage. Along these lines, EGA argued that, 
in pursuing a competitive wholesale market, the Commission should apply 
OASIS rules equally to all entities that own wholesale transmission 
facilities. Mid-American stressed the need for reciprocity by pointing 
out (as others did in response to Question 45) that a significant 
portion of wholesale transmission facilities nationwide, including some 
in pivotal areas, are owned by non-public utilities. VEPCO urged that 
any entity that owns transmission facilities, is affiliated with an 
entity that owns transmission facilities, controls transmission 
facilities through a lease or contract, or signs a contract for 
transmission services, should be required to establish or participate 
in an OASIS that is compatible with the industry standards established 
by the Commission in the final rule in this proceeding as a condition 
of being eligible to use a Transmission Provider's OASIS.
    OK Com stated that it would support the Commission's assertion of 
jurisdiction over non-public utilities, provided that the Commission 
makes a finding that the non-participation of a transmission owning 
entity in an OASIS would have a substantial detrimental impact on 
potential customers attaining open-access non-discriminatory service 
throughout the Nation. Com Ed argued that the Commission needs to 
ensure that non-public utilities do not circumvent the rule by making 
purchases and sales through intermediaries.
    Larger non-public utilities, such as Public Generating Pool, 
suggested that the participation of larger non-public utilities is much 
more important, in terms of promoting competition in the wholesale 
market, than is participation by smaller non-public utilities, whose 
systems are predominantly small distribution systems that are not 
essential to the larger regional power market. Public Generating Pool 
proposed that small non-public utilities should be able to seek an 
exemption and that regional transmission groups should decide whether 
it is necessary for a small non-public utility to participate in the 
regional OASIS. Public Generating Pool also suggested that, if the 
Commission prefers, decisions as to who is required to implement an 
OASIS could be based on objective factors, such as market share or 
concentration. Other non-public utilities, such as Seattle and 
Tallahassee, stress the need for flexibility (in providing sufficient 
time for compliance and in allowing deviations from the rule) in any 
requirement that non-public utilities make changes to their system.
Discussion
    After reviewing these comments we have concluded that we will not 
directly assert jurisdiction over non-public utilities under Sec. 311 
of the FPA to ensure compliance with OASIS requirements. We will, 
instead, rely on the reciprocity provision of the 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. If a non-public utility chooses to take open access service, 
and therefore is subject to the tariff reciprocity condition, it will 
need to meet the OASIS requirements in new Part 37, unless the 
Commission grants a waiver of this condition. Although, as pointed out 
by ConEd, non-public utilities control a significant percentage of the 
circuit miles of transmission lines nationwide, and fully accurate 
calculations of available capacity on public utilities' lines cannot be 
made without information about these lines,

[[Page 21743]]

we believe reciprocity provides a sufficient incentive for non-public 
utilities to meet the OASIS requirements imposed on public utilities.
    We note that in our Open Access Final Rule we have concluded that 
certain of the requirements we are imposing on public utilities may not 
be appropriate for small utilities. This conclusion applies equally to 
the treatment of small public utilities and small non-public utilities. 
Accordingly, we have established a mechanism in the Open Access 
proceeding that allows small public utilities and small non-public 
utilities to seek waivers based on the same criteria.<SUP>24
---------------------------------------------------------------------------

    \24\ Open Access Final Rule at section IV.K.
---------------------------------------------------------------------------

D. Section 37.2--Purpose

    Section 37.2 sets out the fundamental purpose of this part--to 
ensure that all potential customers of open access transmission service 
have access to the information that will enable them to obtain 
transmission service on a non-discriminatory basis. Comments in 
response to the RIN NOPR did not take issue with the proposed language 
of Sec. 37.2 and we are adopting this provision largely without change.
    We wish to clarify, however, that while the OASIS requirements 
imposed by this final rule establish a mechanism by which Transmission 
Customers may reserve transmission capacity, they do not require the 
replacement of existing systems for scheduling transmission service and 
conducting transmission system operations at this time. We believe that 
it may be appropriate to include energy scheduling as part of the OASIS 
requirements developed for Phase II. In the meantime, if we conclude 
that an existing system is operated in an unduly discriminatory manner, 
we will pursue changes to such a system in a separate proceeding.

E. Section 37.3--Definitions

    This section defines six terms used throughout this Part--
``Transmission Provider'', ``Transmission Customer'', ``Responsible 
Party'', ``Resellers'', ``Wholesale Merchant Function'', and 
``Affiliate''. The comments in response to the RIN NOPR did not take 
issue with the proposed definitions. <SUP>25 Consequently, this final 
rule adopts these definitions largely without change. To prevent 
confusion, the definition of Transmission Customer has been revised to 
include potential customers, i.e., those who can execute service 
agreements or can receive services as well as those who actually do so. 
And, we have modified the definition of ``Affiliate'' to more closely 
track provisions of the FPA and the Public Utility Holding Company Act.
---------------------------------------------------------------------------

    \25\ MidAmerican Energy suggested, however, that a definition 
for ``Transmission System Operator'' be added. We will not do so 
because we do not use this term anywhere in the OASIS regulations. 
MidAmerican's purpose in making this suggestion may have been to 
exclude the posting on the OASIS of transactions involving the use 
of transmission for purchases made for native load (this issue was 
also brought up by CCEM, EGA, MidAmerican, NYPP, and NIEP). We 
address the issue of native load purchases in the Open Access Final 
Rule.
---------------------------------------------------------------------------

F. Section 37.4--Standards of Conduct

    This section sets out the standards of conduct necessary to ensure 
that Transmission Providers do not use their unique access to 
information unfairly to favor their own merchant functions, or those of 
their affiliates, in selling electric energy in interstate commerce. 
Although preserving the substance of what was proposed, the final rule 
has been reorganized.
    Paragraph (a) sets out the general rules that require the 
separation of transmission and merchant functions and that recognize in 
emergency circumstances system operators may take whatever steps are 
necessary to keep the system in operation.
    Paragraph (b) sets out the specific rules governing employee 
conduct under five headings covering prohibited practices, transfers of 
employees, access to information, disclosure, and conduct in 
implementing tariffs. These provisions correspond to elements of 
paragraph (a), as well as paragraphs (b) through (h) and (j) of the 
standards proposed in the RIN NOPR.
    Paragraph (c) requires that there be written procedures 
implementing the standards of conduct and that these must be kept in a 
public place and filed with the Commission. Paragraph (c) corresponds 
to paragraph (k) of the standards proposed in the RIN NOPR.
    In the RIN NOPR, the Commission proposed standards of conduct for 
public utilities patterned after those promulgated for natural gas 
pipelines.<SUP>26 The proposed standards of conduct would require 
Transmission Providers to separate their wholesale merchant functions 
(i.e., wholesale purchases or wholesale sales of electric energy in 
interstate commerce) from their wholesale transmission system 
operations and reliability functions. Employees performing wholesale 
merchant functions would be required to obtain information on wholesale 
transmission services only through an OASIS, on the same basis 
available to all other OASIS users. The standards of conduct were 
intended to prevent employees of the Transmission Provider that perform 
wholesale merchant functions or employees of any affiliate from having 
preferential access to any relevant information about the Transmission 
Provider's wholesale transmission availability and costs, or uses or 
possible uses of the Transmission Provider's transmission system by 
non-affiliates.<SUP>27
---------------------------------------------------------------------------

    \26\ In the RIN NOPR, the proposed standards of conduct were set 
out in Sec. 37.6. See RIN NOPR text at section III.E (60 FR at 
66196) and the proposed regulation at 18 CFR Sec. 37.6 (60 FR at 
66199). We are renumbering this provision as Sec. 37.4 in this final 
rule.
    \27\ Because the Open Access Final Rule pro forma tariff may 
include certain retail transmission customers, this final rule's 
OASIS information requirements will apply to applicable retail as 
well as wholesale services and information.
---------------------------------------------------------------------------

    We accompanied this proposal with two questions that asked whether 
the proposed standards of conduct should be modified and whether they 
sufficiently addressed functional unbundling (Questions 41 and 42). We 
also asked whether our proposal might interfere with system reliability 
(see Question 43).
    The responses basically fell into three categories.\28\ First, a 
number of smaller public utilities argued that they should be granted 
waivers (or be deemed exempt) from the proposed standards of conduct 
because these standards would compel them to hire additional staff not 
justified by their small market share or by the small revenues they 
derive from providing wholesale transmission services. These comments 
suggested that the standards should not apply to public utilities that 
lack operational control over the facilities used for wholesale 
transmission service, or to public utilities that do not exceed given 
thresholds for market share, percent of revenues, or total revenues 
from wholesale transmission services.
---------------------------------------------------------------------------

    \28\ Among the over 100 comments filed, only Dayton P&L, among 
public utilities, questioned the Commission's underlying authority 
to mandate control room unbundling. Dayton P&L's short conclusory 
statements in this proceeding were not accompanied by even a cursory 
explanation of its reasoning or by any legal analysis or supporting 
citations.
    Although Dayton P&L offered no support for its position in this 
proceeding, it did (along with other parties) devote extensive 
discussion to the more general issue of the Commission's authority 
to order open access transmission in its initial comments in the 
Open Access rulemaking proceeding. We reject Dayton P&L's 
unsubstantiated conclusion, urged in this proceeding, that we lack 
authority to order control room unbundling for the same reasons that 
we reject their more general and more extensive arguments on the 
Commission's authority in the Open Access Final Rule. See Open 
Access Final Rule at section IV.B.
---------------------------------------------------------------------------

    Second, a number of large utilities basically were satisfied with 
the proposed rules and offered specific suggestions for revisions. 
Third, commenters raised the issue of whether to require the separation 
of generation

[[Page 21744]]

and transmission functions.\29\ We discuss these three categories 
below.
---------------------------------------------------------------------------

    \29\ A number of comments raised the issue of whether the OASIS 
regulations would promote ISOs (independent system operators) and 
whether participation in an ISO would exempt an entity from 
compliance with OASIS requirements. In this regard, a number of 
comments suggested that the proposed standards of conduct will 
result in the widespread transfer of transmission functions to the 
control of ISOs and predicted that the need for the standards of 
conduct will diminish as ISOs become more prevalent. In this 
context, IN Com supported the formation of ISOs, because this would 
reduce the need for state commissions to monitor functional 
unbundling and would help in resolving jurisdictional questions.
    The concept of ISOs is addressed in the Open Access Final Rule. 
As to the prediction that the rise in the number of ISOs will make 
the standards of conduct unnecessary, or should offer a basis for an 
exemption from the standards of conduct, we would characterize the 
potential of ISOs somewhat differently. In our view, a properly 
constituted ISO could be a mechanism, not for an exemption, but as a 
means to comply with the standards of conduct.
---------------------------------------------------------------------------

1. Requests by Smaller Public Utilities for Waivers From the Standards 
of Conduct
    Turning first to the arguments of smaller public utilities that 
they should be exempt from the standards of conduct, we note that this 
issue also arose in the Commission's Open Access rulemaking proceeding. 
As described in the Open Access Final Rule, we will publish a list of 
jurisdictional public utilities that must comply with these rules. At 
the same time, we establish a mechanism that allows small public 
utilities to seek a waiver. In appropriate circumstances, the 
Commission would waive some or all of the Open Access requirements, 
subject to future reconsideration as warranted by circumstances.\30\
---------------------------------------------------------------------------

    \30\ Open Access Final Rule at section IV.K.
---------------------------------------------------------------------------

    A related issue involves the concerns of small non-public utilities 
about their obligation under the reciprocity condition. We have decided 
in the Open Access rulemaking proceeding that we would use these same 
criteria to decide whether a small non-public utility should be granted 
a waiver from all or part of the reciprocity condition contained in 
public utility open access tariffs. Such waivers could be sought of the 
requirements to have open access tariffs, provide ancillary services, 
establish an OASIS, or separate functions.
    A full explanation of the waiver mechanism is contained in the Open 
Access Final Rule.\31\ We will use these same standards to determine 
whether small public utilities have complied with the OASIS 
requirements and to determine whether small non-public utilities have 
met their contractual obligation to comply with OASIS requirements as a 
condition of service under open access tariff reciprocity provisions.
---------------------------------------------------------------------------

    \31\ Id.
---------------------------------------------------------------------------

2. Suggested Revisions to the Standards of Conduct and Timing
    For the most part, we have adopted the standards of conduct as 
proposed, making technical and conforming revisions. In a few 
instances, in response to comments, we have made substantive changes. 
These changes, and the suggestions that led us to make them, are 
discussed below, along with some suggestions that we rejected.
    1. As proposed, the regulations would prohibit preferential access 
to the system control room and ``other facilities of the public 
utility'' that differs from the access available to other potential 
transmission users. AEP suggested that it is not clear whether this was 
intended to restrict access to all other facilities or is meant to 
restrict access to other similar facilities, (i.e., those facilities 
that, like the control room, are involved in transmission operations 
and reliability functions). Consistent with this latter interpretation, 
AEP suggested that the restriction be modified to apply to the system 
control room and ``similar facilities used for transmission operations 
or reliability functions.'' We agree with AEP's interpretation of the 
scope of this restriction and adopt the suggested revision in section 
37.4(b)(1)(ii) of the final rule.
    2. Section 37.4(c) of the proposed standards of conduct would 
prohibit contacts (off OASIS) between employees of the public utility 
engaged in transmission system operations and employees of the public 
utility engaged in wholesale marketing functions, and employees of any 
affiliate no matter how employed. AEP, Com Ed, and Ohio Edison argued 
that this provision is too broad and would exclude contacts between 
transmission system operators and employees of affiliates engaged in 
various activities, many of which are unrelated to a public utility's 
merchant functions. For example, an energy services subsidiary might be 
engaged in building a power plant in a foreign country. AEP argued that 
there would be no reason to deny employees engaged in such an activity 
access to utility personnel involved in transmission or reliability 
functions. Com Ed suggested that this provision should be modified to 
prevent contacts between system operators and employees engaged in 
wholesale marketing functions, regardless of whether those marketing 
employees are engaged in those activities on behalf of either the 
utility or its affiliates. Thus, under this argument, contacts between 
system operators and affiliate employees not engaged in wholesale 
marketing functions would not be prohibited.
    We agree with AEP, Com Ed, and Ohio Edison that our proposed 
standards of conduct were overly broad because they prohibited contacts 
between system operators and affiliate employees engaged in functions 
completely unrelated to a public utility's wholesale power and energy 
marketing functions. We will revise the proposed standards of conduct 
accordingly.
    AEP also argued that employees of the affiliate may be involved in 
the wholesale merchant function, but not in the utility's market area. 
For example, an employee of an affiliate might be involved in a 
different geographic area, far from the system's transmission grid. AEP 
argued that there would be no need to isolate such activities from the 
utility's transmission operations. To cover such situations, AEP 
suggested that the language be modified to read ``employees of any 
affiliate of the public utility, to the extent that such employees are 
engaged in wholesale merchant functions in the utility's market area.''
    We reject AEP's suggestion. Although public utilities may still 
have the ability to exert market dominance in particular markets, they 
also will now have the ability to participate in transactions across 
the nation. We fully expect--and our experience with the WSPP 
demonstrates--that in the move to a competitive wholesale bulk power 
market, public utilities will have extensive market areas in which to 
make offers. Thus, there is no reason to limit the scope of the 
standards of conduct as recommended by AEP.
    We also have clarified section 37.4(b)(3)(i) to explain that 
employees engaged in merchant trading functions must not have 
preferential access to any information about the Transmission 
Provider's transmission system that is not available to all users of an 
OASIS. However, the standards of conduct do not foreclose customers, 
including merchant employees, from obtaining information about the 
status of their particular contracted for transaction from Transmission 
Provider employees engaged in system operation and reliability 
functions. The information provided in status reports must present the 
same types of information, in the same level of detail, to any customer 
presenting a similar request. The standards do, however, preclude 
merchant employees from obtaining preferential access to information 
about

[[Page 21745]]

the Transmission Provider's system (not directly linked to their 
particular transaction) from any nonpublic source as well as market 
information acquired from nonaffiliated customers or potential 
nonaffiliated customers or developed by the Transmission Provider in 
its role as a Transmission Provider (except to the limited extent that 
this information is required to be posted on the OASIS).\32\
---------------------------------------------------------------------------

    \32\ See Sec. 37.4(b)(4)(iii); see text accompanying n. 33, 
infra.
---------------------------------------------------------------------------

    3. APPA argued that the rules should prohibit preferential 
treatment of wholesale purchases or sales by any utility. APPA 
interpreted the originally proposed language to mean that preferential 
treatment would be permitted, as long as the preference would not be 
extended to the public utility itself or an affiliate. APPA and Com Ed 
argued that preferential treatment of any wholesale customer over the 
interests of any other wholesale customer must not be allowed. Com Ed 
adds that absent clarification, relationships of reciprocal favoritism 
could develop in the industry, to the detriment of all other customers.
    We find this contingency is possible. While the standards of 
conduct set guidelines for Transmission Providers and their affiliates 
in handling their wholesale merchant functions; public utilities are 
also governed by section 205(b) of the Federal Power Act. Section 
205(b) prohibits public utilities from granting any undue preference or 
advantage to any person or subjecting any person to any undue prejudice 
or disadvantage with respect to any transmission or sale subject to the 
jurisdiction of the Commission. This provision remains in full force 
and effect and prohibits preferential treatment in transactions 
regardless of whether those transactions are specifically addressed in 
the standards of conduct.
    4. In section 37.6(i) of the RIN NOPR we proposed that public 
utilities offer customers discounts comparable to those that the public 
utility offers to its own power customers or those of an affiliate. AEP 
suggested that this limitation on allowable discounts be expressly 
limited to discounts on wholesale transmission services. We agree and 
are revising this provision accordingly. Discounts for jurisdictional 
power sales are not governed by this final rule but by section 205(b) 
of the FPA and related precedent on power sales.
    5. Allegheny suggested that the Commission should find that there 
will no longer be a presumption of discriminatory dealing between 
utility affiliates in generation and transmission services when network 
owners comply with the standards of conduct. Allegheny has presented no 
basis for making such a finding and we decline to do so.
    6. Com Ed, Duke, and NEPOOL suggested that the proposed standards 
should not be interpreted to prevent employees of the utility engaged 
in wholesale marketing functions from obtaining information about their 
competitors from non-affiliated third party sources such as the trade 
press. Com Ed also suggested that the utility should be allowed freedom 
to give out information about its transmission functions off OASIS 
(e.g., in briefings at public meetings) as long as the utility's 
wholesale marketing employees do not obtain preferential access to 
those forums. Ohio Edison suggested that the proposed standards of 
conduct should be revised to preclude only ``substantive access'' to 
the system control room. Ohio Edison argued that access for matters 
unrelated to transmission matters, such as training programs, should be 
permitted.
    We have two points we wish to make regarding these related 
suggestions. First, we clarify that the rules do not prohibit access to 
information contemporaneously available without restriction to other 
members of the general public. (See section 37.4(b)(1)(ii) dealing with 
access to information). Second, these rules are intended to be 
interpreted consistent with common sense, prudence, and caution.
    Our standards of conduct are intended to prevent preferential 
access to information related to transmission prices and availability 
by employees of the public utility or any affiliate engaged in 
wholesale merchant functions. Preferential access means that 
information is obtained from those with access to information about the 
public utility's transmission system operations that is not equally 
available to other customers. It is obvious, at least to us, that this 
does not bar wholesale merchant employees from reading the trade press 
or from sitting in the audience of a publicly-announced and available 
lecture delivered by the public utility's transmission operator or a 
third party in an open forum. However, the onus is on the public 
utilities subject to these standards to conduct their affairs in 
compliance with these rules, and they should exercise care and prudence 
in so doing.
    We decline, therefore, to specify in these regulations whether, for 
example, a ``public meeting'' must be preceded by advance notice, to 
whom that notice must be provided, and what that notice would need to 
spell out. We do not believe that it would be appropriate to burden our 
rules with this kind of minutiae in a misplaced effort to anticipate 
every possible contingency. Such regulatory overkill is unwarranted and 
counterproductive. Moreover, those subject to the regulations may, like 
other members of the public, call the Enforcement Task Force Hotline to 
obtain informal advice on implementing the standards of conduct.
    7. VEPCO suggested that, rather than prohibiting contacts between 
system operators and employees of the public utility and any affiliates 
engaged in wholesale merchant functions, the Commission could reach the 
same result by allowing system operators to disclose, through informal 
communications, information about the status of the transmission 
system, provided that they then post this information on OASIS.
    We find this suggestion untenable. First, such disclosures would 
necessarily be posted after-the-fact, and thus the information would 
not be conveyed to all potential customers at the same time. Second, 
such a provision would be very difficult to enforce. Third, the same 
information could just as easily be divulged on the OASIS to all 
customers, rather than ``reported'' on the OASIS after-the-fact.
    8. Com Ed suggested that the reference in subsections (a) and (d) 
of the proposed standards to ``reliability functions'' should be 
clarified to apply only to transmission functions and not to generation 
functions. We disagree. As discussed below, system operations and 
reliability functions include both transmission and generation 
functions.
    9. Con Ed suggested that the standards of conduct should include a 
disclaimer that utilities will not be liable for the reliability or 
accuracy of data posted on the OASIS as an accommodation to third 
parties. We agree 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. We do not, however, view this as a 
standard of conduct issue. Instead, we address this point in our 
discussion of what information is to be posted under Sec. 37.6(g).
    10. Ohio Edison suggested that posting the names of personnel 
transferring between departments would make these employees targets for 
recruitment by competitors. Notwithstanding this concern, we believe 
that this information must be posted on the OASIS to make possible

[[Page 21746]]

``gaming of the system'' through spurious revolving door tactics more 
visible.
    11. Ohio Edison also suggested that the phrase in subsection (b) of 
the proposed standards ``* * * must rely upon the same information 
relied upon by the public utility's wholesale transmission customers'' 
should be modified to read ``* * * must have available only the same 
information available to the public utility's wholesale transmission 
customers.'' Ohio Edison argued that the Transmission Provider has no 
way of knowing what information its customers ``relied upon'' and that 
it should not be held to an undefinable subjective standard. We agree. 
Accordingly, we adopt Ohio Edison's suggestion in section 37.4(b)(3)(i) 
of the final rule and omit the phrase ``rely upon.''
    12. Ohio Edison also suggested that if its suggestion (in the 
previous item) is adopted, then the language in section 37.4(b) 
beginning with the language in parenthesis becomes redundant and should 
be deleted. We disagree and will retain that language in section 
37.4(b)(3)(ii) of the final rule. We believe the language adds 
necessary clarification.
    13. Montana Power suggested that, if off-OASIS communications 
between the utility's system operators and wholesale marketing 
personnel are prohibited, these kinds of communications should also be 
prohibited between system operators and all transmission users. Montana 
Power would prefer, however, that these communications be permissible. 
Likewise, Duke suggested that we change the regulations so that if an 
employee of an unrelated third party calls the transmission-related 
employees, for example, to better understand the public utility's 
transmission system, such communications should be permitted to be 
conducted off the OASIS. Duke maintains that the free flow of 
information should not be discouraged so long as functional unbundling 
is implemented and affiliate abuse is avoided. NEPOOL suggested that 
the rules dictating the Transmission Provider's release of information 
should apply to all Transmission Customers, not just to the 
Transmission Provider's employees, as affiliates, engaged in wholesale 
merchant functions.
    Our proposed standards of conduct were designed, and our final 
standards are being implemented, to prevent Transmission Providers from 
giving themselves an undue preference over their customers through the 
exchange of ``insider'' information between the company's system 
operators and employees of the public utility, or any affiliate, 
engaged in wholesale marketing functions. Thus, the rules place 
restrictions on preferential communications from the system operators 
to only those merchant employees. The rules were not designed to 
prevent system operators from having communications with third parties. 
We do not generally see this as an area that needs regulatory 
oversight. As discussed above, we have revised the regulations to 
ensure no discriminatory treatment and we remind public utilities 
subject to these regulations that section 205(b) of the FPA prohibits 
undue discrimination. This should suffice.
    14. NUSCO suggested that the Commission should distinguish: (1) The 
functional separation of generation marketing related to operation of 
the transmission system and administration of transmission tariffs 
(which are relatively short-term activities); from (2) the coordination 
of marketing with the system planning function (a long-term activity 
encompassing both generation and transmission). Similarly, the FL Com 
is concerned that the standards of conduct might impede system 
reliability, and argued that marketers and system operators should be 
able to confer concerning the company's long-term planning activities 
that require knowledge about the company's generation and transmission 
systems. NEPOOL expresses similar concerns.
    By contrast, Com Ed suggested that the proposed standards of 
conduct will not impair planning because, like a one-way street, they 
allow information to be conveyed from employees engaged in merchant 
functions to system operators, while at the same time prohibiting 
information to be conveyed in the opposite direction. Com Ed submitted 
that the inter-relationship between the areas of strategic planning, 
resource planning and long-range transmission planning require the flow 
of information to transmission personnel. Future acquisitions of 
capacity may constitute a resource taken into account in planning and 
may have an impact on the transmission system that needs to be 
accounted for by transmission planners. Thus, Com Ed argued that there 
should be no restriction on the flow of information about future 
purchases or sales from the merchant function to the transmission 
function, although restrictions on the flow of information to the 
merchant function should be adopted as proposed.
    We agree with Com Ed that, as we proposed in the RIN NOPR, the flow 
of information, through the OASIS, from employees engaged in wholesale 
merchant functions to system operators should remain permissible, to 
allow proper system planning, while at the same time restricting 
information being conveyed off the OASIS from system operators to 
utility and affiliate employees engaged in wholesale merchant 
functions, to prevent preferential access to transmission information. 
Consequently, we reject the proposals offered by NUSCO, FL Com, and 
NEPOOL in this regard.
    15. Omaha PPD argued that information regarding the scheduling of 
power transfers, economic dispatch, and economic conditions have 
nothing to do with the information that is needed regarding the 
availability of transmission capability. Omaha PPD suggested, 
therefore, that any information relating to economic operation or the 
commercial state of a utility be removed from the standards of conduct. 
By contrast, NUCOR suggested that, since economic dispatch is premised 
on real-time marginal production cost data and generating unit 
economics, the comparability standard mandates that utilities provide 
the same generation cost data to other market participants. Similarly, 
NUCOR argued that, because economic dispatch also is dependent on the 
economics of off-system purchases and sales, data pertaining to such 
purchases and sales also must be made generally available.
    Except for postings for certain ancillary services, the RIN NOPR 
did not propose the posting on an OASIS of data on generation and we 
are not persuaded, at this juncture, to do more. Our decision is 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.
    16. VEPCO suggested that the regulations should prohibit system 
operators from disclosing information to wholesale marketing employees 
or other customers about the ancillary services offered by third 
parties because they are not permitted to disclose the same information 
about their companies' own products. VEPCO further suggested that the 
prohibition against discussing the companies' own products should be 
removed.
    We find these suggestions inconsistent with the kinds of safeguards 
we are trying to provide through these standards of conduct. In any 
event, as discussed below in our discussion of items to be posted on 
the OASIS, we are requiring that this kind of information be posted on 
the OASIS, and thus companies will be able to get

[[Page 21747]]

their message out that these services are available.
    17. Duke suggested that the proposed subsection dealing with the 
impartial application of tariff provisions should be revised to make 
clear it is the customer (and not the employees) who is to be treated 
on a fair and impartial basis. We agree and the final rule in section 
37.4(b)(5)(ii) adopts this suggestion.
    18. VEPCO suggested that the rules requiring a separation of 
functions should be suspended if additional employees trained in system 
operations (but normally assigned to marketing functions) should be 
needed to assist in handling system operation functions during 
emergencies affecting system reliability. VEPCO also suggested that the 
Commission should allow transmission and generation operators to engage 
in emergency energy transactions and hourly non-firm energy 
transactions.
    It is not the purpose of these rules to compromise reliability. In 
emergency circumstances affecting system reliability, system operators 
may take whatever steps are necessary to keep the system in operation. 
Consequently, we are adding a provision to the standards of conduct 
that specifically grants system operators the authority to take 
whatever steps are necessary to maintain system reliability during an 
emergency, notwithstanding that this could otherwise constitute a 
violation of the standards of conduct. Transmission Providers will be 
required to report to the Commission and on the OASIS each emergency 
that resulted in any deviation from the standards of conduct, within 24 
hours of such deviation. If we see a pattern of activities that 
suggested that ``emergencies'' are not authentic, we will take strong 
action against the offending public utilities.
    Because we are adding a provision that allows actions to be taken 
in response to emergencies, we are deleting the phrase ``to the maximum 
extent practicable'' that had appeared in section 37.6(a) of the 
standards of conduct proposed in the RIN NOPR.
    19. Continental Power Exchange argued that, just as merchant 
traders should be prohibited from access to the control center, system 
operators should be prohibited from access to the trading floor. United 
Illuminating agreed that separation of functions needs to apply to 
separation of transmission and customer supply functions. Continental 
Power Exchange also suggested that discounts should be offered 
unilaterally to all customers without prior notice and without two-way 
negotiation. Continental Power Exchange further suggested that short-
term transactions should be deemed approved upon request, unless the 
utility specifically notifies the customer that the transaction will be 
denied. Continental Power Exchange argued that this would streamline 
the proposed procedures and make OASIS transactions faster and more 
manageable.
    We will not, at this time, adopt Continental Power Exchange's 
suggestion to create an absolute prohibition against system operators 
having access to the trading floor because we are concerned about 
information divulged by system operators and not about information 
acquired by them. However, any non-public contacts between system 
operators and merchant traders creates the risk that there will be 
improper communications between these employees and the burden is on 
Transmission Providers subject to the standards of conduct to devise 
procedures that will prevent improper contacts. We expect, therefore, 
that the Transmission Providers themselves will devise procedures that 
will either prohibit or, at a minimum, severely restrict access to the 
trading floor by system operators.
    As to Continental Power Exchange's other suggestions, we will not 
adopt these suggestions at this time, but may come back to them as the 
process evolves and the feasibility of back and forth negotiations is 
tested by experience.
    20. SoCal Edison and Tucson Power suggested that, while the 
proposed 60-day deadline for filing procedures to implement the 
standards is adequate, the Commission needs to be flexible on 
implementing other changes, such as reconfiguring and relocating 
control rooms and other facilities, and training and recruiting new 
employees.
    Although we originally proposed to require compliance with the 
standards of conduct starting 60 days from the publication of this 
final rule, on further consideration we have decided to put off the 
requirement that they be implemented until the implementation of OASIS, 
that is by November 1, 1996. As a practical matter, the standards of 
conduct cannot be implemented apart from the electronic communication 
systems of a functioning OASIS; the two work together. In addition, the 
extra time will permit utilities the opportunity to fully implement the 
requirements of the standards of conduct. Although the result will be a 
window of time during which open access transmission tariffs will not 
be supported by standards of conduct (or OASIS), we must recognize that 
the changes we are mandating for the industry cannot be implemented 
overnight; a transition period is required.
    21. Finally, after a review of the comments, we have added an 
additional provision to the standards of conduct (section 
37.4(b)(4)(iii) of the final rule) dealing with the posting of any 
additional market information developed by a Transmission Provider in 
its role as a Transmission Provider and shared with employees of its, 
or an affiliate's, merchant function.
    We have expressed concern in a number of recent orders about the 
possibility of the dissemination of market information by a public 
utility with market-based rate authority.<SUP>33 To guard against the 
possibility of affiliate abuse, we have required such public utilities 
to commit in their codes of conduct with affiliates to share market 
information only if they make the same information publicly available 
to non-affiliates at the same time. We have not dictated the means by 
which public utilities are to make this information simultaneously 
available to all.
---------------------------------------------------------------------------

    \33\ See, e.g., Illinova Power Marketing, Inc., 74 FERC para. 
61,313, slip op. at 4-6 (1996); USGen Power Services, L.P., 73 FERC 
para. 61,302 at 61,845 (1995).
---------------------------------------------------------------------------

    This same concern for the unequal distribution of market 
information, in a manner that may benefit select recipients with 
commercial or competitive information that is not equally available to 
others, leads us, after a review of the comments, to extend the 
standards of conduct to cover any market information gathered by 
Transmission Providers in the course of responding to transmission or 
ancillary service inquiries.
    Our concern, based in part on our experience with implementing and 
monitoring electronic bulletin boards developed for use by the natural 
gas pipeline industry, is that there remains the incentive for a 
Transmission Provider to share with its own merchant employees, or 
those of an affiliate, any information it has developed (not limited to 
transmission system information) in responding to requests made over 
the OASIS. This is particularly a concern with respect to market 
information developed in the course of denying a request for 
transmission service.
    While we have developed procedures dealing with the obligations of 
Transmission Providers in responding to requests for service, we 
believe that these procedures, alone, may not be sufficient to 
eliminate the possibility of an unfair competitive advantage to 
employees of the Transmission Provider

[[Page 21748]]

(or an affiliate) engaged in merchant functions, by virtue of access to 
market information not shared with others.
    Accordingly, we will add to the standards of conduct a provision 
that precludes a Transmission Provider from sharing market information 
acquired from nonaffiliated Transmission Customers or potential 
nonaffiliated Transmission Customers or developed in the course of 
responding to requests for transmission or ancillary service. In this 
manner, we can be better assured that employees of the Transmission 
Provider or an affiliate engaged in merchant operations do not develop 
a competitive advantage by virtue of operation of an OASIS. The 
Transmission Provider may only reveal information about transmission 
requests as provided in the provisions of this rule (section 37.6 (e)) 
dealing, generally, with responses to transmission and ancillary 
service requests and, specifically, with transaction confidentiality 
(except to the limited extent that this information is required to be 
posted on the OASIS).
3. Whether To Require the Separation of Generation and Transmission 
Functions
    In the RIN NOPR we proposed standards of conduct that would require 
Transmission Providers and their affiliates to separate system 
operation and reliability functions from wholesale merchant functions. 
Both transmission and generation functions are included within system 
operation and reliability functions. The RIN NOPR, notwithstanding 
Questions 42 and 43, did not propose that these functions (transmission 
and generation) be separated. Nor did we propose that Transmission 
Providers divest their ownership of generation assets.
    We received numerous comments in response to our questions 42 and 
43 that asked whether, if the Commission would go beyond unbundling 
transmission and generation merchant functions to order the unbundling 
of generation and transmission operations, this would necessitate 
revision of the proposed standards of conduct and whether this would 
adversely affect reliability.\34\ After reviewing the comments, we 
conclude that we should require--with these final rules--only the 
unbundling of the transmission operations and wholesale marketing 
functions of public utilities and their affiliates, as proposed in the 
RIN NOPR. We do not extend these rules to require the unbundling of 
transmission and generation control functions or to mandate the 
divestiture by Transmission Providers of their generation assets.
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    \34\ The commenters nearly universally focused their 
presentations on why the Commission should not order an unbundling 
of generation and transmission operations, rather than addressing 
the precise topic we set out. In any event, the issue is now moot, 
as we have decided not to order Transmission Providers to separate 
their generation and transmission operations at this time. If, 
however, with experience we discover that the steps we are ordering 
here are not adequate to remedy undue discrimination, we can revisit 
this issue.
---------------------------------------------------------------------------

    We will require the functional unbundling of transmission 
operations and wholesale marketing functions because we are persuaded 
that this will prevent abuses based on preferential access to 
information and other discriminatory behavior, without compromising 
system reliability. The standards of conduct are designed to accomplish 
this: (a) By requiring that transmission-related information be made 
available to all customers (including employees of the public utility, 
and any affiliate, engaged in merchant functions) through OASIS 
postings available to all customers at the same time and on an equal 
basis; and (b) by 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.

G. Section 37.5--Obligations of Transmission Providers

    This section of the final rule adopts, without substantive change, 
the provisions proposed as section 37.4 (Standardization of Data Sets 
and Communication Protocols) and section 37.5 (Obligations of 
Transmission Providers) in the RIN NOPR. The final rule requires, in 
paragraph (a), that a Transmission Provider must provide for the 
operation of an OASIS either individually or jointly with other 
Transmission Providers and it must do so in accord with the 
requirements of Part 37. Paragraph (b)(1) requires that the OASIS must 
give access to relevant standardized information pertaining to the 
status of the transmission system as well as to the types and prices of 
services. Finally, in paragraph (b)(2), the rule requires that the 
OASIS must be operated in compliance with the protocols set out in the 
publication, OASIS Standards and Communication Protocols.
    In the RIN NOPR, we explained that each Transmission Provider would 
be responsible for compliance, regardless of whether it establishes its 
own OASIS or participates in a joint OASIS.\35\ The final rule does not 
change this. In a related provision, we proposed, in Sec. 37.1, that 
Part 37 would apply to any public utility that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce. However, as noted by many commenters, it is quite 
probable that individual public utilities may turn the operation of 
their transmission system and information system over to an ISO or 
other joint or regional entity. (This has been provided for in the 
definition of the term ``Responsible Party''). This raises the issue of 
the Commission's jurisdiction over such entities.
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    \35\ NRECA commented that the Commission should ensure that 
expenses by a joint OASIS are subject to the Commission's 
jurisdiction and audit authority. We agree. We will treat this as a 
normal ratemaking expense issue and will allocate such costs on a 
case-by-case basis when such expenses are presented to us for our 
review.
---------------------------------------------------------------------------

    Under section 201(e) of the FPA, a ``public utility'' means,

    Any person who owns or operates facilities subject to the 
jurisdiction of the Commission under this Part (other than 
facilities subject to such jurisdiction solely by reason of section 
210, 211, or 212).\36\

    \36\ 16 U.S.C. Sec. 824.
---------------------------------------------------------------------------

To the extent that anyone is given control and decision making 
authority over the transmission operations of a public utility's 
transmission facilities, it clearly would ``operate'' public 
facilities, within the meaning of section 201(e), and therefore would 
be subject to the Commission's jurisdiction.\37\ To the extent that a 
public utility turns over its operations to an ISO or any other joint 
entity to satisfy the Open Access and OASIS requirements, the ISO or 
any other entity would fall within the definition of a ``public 
utility'' under Sec. 201 of the FPA and thus would be subject to the 
OASIS regulations of Part 37.
---------------------------------------------------------------------------

    \37\ See, e.g., Bechtel Power Corporation, order granting 
declaratory order and disclaiming jurisdiction, 60 FERC para. 61,156 
at 61,572 (1992) (on control issue), and FPC v. Florida Power & 
Light Company, 404 U.S. 453 (1972) (on defining jurisdictional 
facilities).
---------------------------------------------------------------------------

H. Section 37.6--Information To Be Posted on an Oasis

    In the RIN NOPR, we proposed, in sections 37.7 through 37.14, rules 
governing: (1) The information that must be posted on an OASIS; (2) the 
procedures for the posting and updating of information on the OASIS; 
(3) the posting of discounts; (4) procedures for Transmission Providers 
to respond to customer requests for transmission service; (5) 
procedures for communicating denials of requests for service and 
curtailments; and (6) the posting of information about scheduling and 
affiliate transactions. These

[[Page 21749]]

provisions have been consolidated and are now covered in Sec. 37.6 of 
the regulations adopted by this final rule.
    As discussed in more detail below, section 37.6 has eight 
paragraphs. Paragraph (a) lists the objectives of an OASIS. Paragraph 
(b) lists what must be posted for public transmission capability--that 
is, available transmission capability (ATC) and total transmission 
capability (TTC)--as well as how and when this information is to be 
updated. Paragraph (c) sets out the requirements for posting 
transmission service products, including resold capacity as well as 
their prices. Paragraph (d) provides the same for offerings of 
ancillary services. Paragraph (e) sets out the requirements for posting 
transmission service requests and responses including service denials 
and curtailment or interruption of transmission. Paragraph (f) provides 
requirements for posting transmission service schedules. Paragraph (g) 
deals with posting other transmission-related communications. Finally, 
paragraph (h) sets out the requirements for auditing information.
    Some of the proposed provisions have not been adopted. These 
include requirements concerning an application procedure for requesting 
transmission service (Sec. 37.9(b)(5) of the proposed regulations); 
requirements imposed on the reseller to notify the Transmission 
Provider of certain information (Sec. 37.9(c)(3) of the proposed 
regulations); and the steps that must be followed by the Transmission 
Provider and Requester in their negotiations (Sec. 37.12 of the 
proposed regulations). These did not prescribe information that must be 
posted; rather, they were concerned with how parties should conduct 
business in an open access environment. These matters are considered in 
the Open Access Final Rule.
1. OASIS Objectives (Sec. 37.6(a))
    The Commission proposed five objectives for the OASIS in the RIN 
NOPR.<SUP>38 Few comments were received on these objectives; none were 
substantive. Thus, we adopt these objectives without substantive 
revision in the final rule.
---------------------------------------------------------------------------

    \38\ See RIN NOPR text at section III.C (60 FR at 66188) and the 
proposed regulation at 18 CFR 37.7 (60 FR 66200).
---------------------------------------------------------------------------

2. Posting Transmission Capability (Sec. 37.6(b))
    a. ATC for Network Integration Service. The RIN NOPR discussed 
requiring the posting of available transmission capability for network 
service. As we acknowledged in the RIN NOPR,<SUP>39 before-the-fact 
measurement of the availability of network transmission service is 
difficult. Nonetheless, it is important to give potential network 
customers under the Commission's pro forma tariff (as discussed in the 
Open Access Final Rule) <SUP>40 an easy-to-understand indicator of 
service availability. To this end, the Commission requested comments on 
how best to post the availability of network transmission service on 
the OASIS (Question 3).
---------------------------------------------------------------------------

    \39\ See RIN NOPR text at section III.C (60 FR at 66188).
    \40\ See Open Access Final Rule at sections IV.G and IV.H.
---------------------------------------------------------------------------

    NERC reiterated the statement in the What Group report that ``it 
does not seem possible to post the availability of Network Integration 
Transmission Service'' on an OASIS. No other commenter disagreed.
    NERC went on to describe some of the challenges involved with 
calculating available transmission capability (ATC) for network 
integration service. Network service is a complex, long-term 
relationship between a requester and provider that must be investigated 
in detail because it involves the specification of multiple points of 
receipt or delivery or both. Because of the long-term nature of network 
service, the planning process involves a complex interrelationship of 
future loads and resources, with an impact on the network that is 
extremely location dependent. A major difficulty in estimating network 
ATC is the lack of specific locations for which to calculate an impact 
on the network. Each network service request would be unique, with 
different sets of integrated loads and generating stations affecting 
the network, including its constrained paths, differently.
    The Commission also asked if there were any alternative service 
that is more suitable to measurement than the current version of 
network service. Some commenters said that it might be possible to 
devise a concept which supports better measurement of network-like 
service availability, but devising and implementing such a new concept 
within the proposed initial implementation time line for OASIS is not 
feasible. The Commission is not, at this time, persuaded to require the 
posting of ATC for network service.
    b. Minimizing the Reporting of ATC (Secs. 37.6(b) (1) and (3)). In 
the RIN NOPR, the Commission requested comments on ways to minimize the 
burden of ATC calculations, while ensuring that wholesale Transmission 
Customers have the information they need (Question 5).
    Commenters suggested a number of ways to minimize the reporting of 
ATC, including less frequent updates, developing standardized methods 
for calculating ATC, and encouraging regional efforts. Most of the 
comments discussed ways to limit the number of paths for which ATC has 
to be posted.
    The What Group proposed that ATC be posted only for paths as 
``business needs'' arise. This proposal was intended to limit the 
number of paths for which ATC must be posted. A ``business need'' was 
defined, in part, by a Transmission Customer requesting information 
about a path. A number of commenters supported the proposal to limit 
paths based on ``business need.'' <SUP>41
---------------------------------------------------------------------------

    \41\ See, e.g., Arizona, ConEd, NEPOOL, NE Public Power 
District, NERC and Western Group comments.
---------------------------------------------------------------------------

    The Commission suggested in the RIN NOPR a different approach to 
the problem. Calculating ATC and updating frequency could be based, 
instead, on the level of activity and constraints on a given path. This 
approach was supported by a number of commenters.<SUP>42 A number of 
commenters wanted to leave to the Transmission Provider the decision of 
which paths to post ATC.<SUP>43
---------------------------------------------------------------------------

    \42\ See Basin EC, Duke, NE Public Power District, Tallahassee, 
Union Electric, and VEPCO comments. Only Arizona said it was a bad 
idea because it would be too subjective and confusing.
    \43\ See Central Illinois Public Service, Detroit Edison, Omaha 
PPD, PSNM, Texas Utilities, Union Electric, and VEPCO comments.
---------------------------------------------------------------------------

    Detroit Edison, Oklahoma G&E and PSNM suggested that customers 
could also identify paths, along with a process for deleting them. 
NEPOOL and Detroit Edison stated that they will post ATC for all 
control area interfaces and any internal constraints. The Western Group 
had a similar proposal.
    NE Public Power District, NERC and NSP commented that ATCs should 
be posted only for constrained paths. PJM and WP&L proposed that, for 
unconstrained paths, static numbers or limits could be used and would 
be updated infrequently. VEPCO suggested that paths be coded by the 
quality of the ATC calculation used and that high quality effort be 
used only when ATC is less than 25 percent of the total transmission 
capability. ConEd suggested that posting could be sorted by frequency 
of update so that busier paths would be at the top of the list.
    Dayton P&L suggested mandatory information on ATC be limited to: 
(1) Identification of the interface; (2) firm and non-firm ATC (hourly 
for the current day, daily for the next seven

[[Page 21750]]

days, weekly for the next four weeks, monthly for the next 12 months); 
and (3) price for each service.
    MAPP summarized the issue well when it stated ``[t]he burden of ATC 
calculations will be determined by the number of paths for which ATC is 
being calculated and posted, the accuracy needed and the frequency of 
required update.''
    The proposed regulations have been modified to implement the 
alternative approach suggested by the Commission in the RIN NOPR. The 
regulations in Sec. 37.6(b)(1) define the paths for which ATC and TTC 
must be posted. These are called ``posted paths.''
    A transmission path becomes a ``posted path'' in one of three ways. 
First, ATC and TTC must be posted for any path between two control 
areas. Second, posting is required for any path for which transmission 
service has been denied, curtailed or subject to interruption during 
any hour or part of an hour for a total of 24 hours in the last 12 
months. In counting up to 24, curtailment for any part of an hour 
counts for a whole hour. Finally, Transmission Customers can request 
that ATC and TTC be posted for any other transmission path. Customer 
requested postings may be dropped if no customer has taken service on 
the path in the last 180 days.
    The regulations in Sec. 37.6(b)(3) define two classes of posted 
paths based on usage: ``unconstrained'' and ``constrained''. A 
constrained posted path is one for which ATC has been less than or 
equal to 25 percent of TTC for at least one of the last 168 hours or is 
calculated to be 25 percent or less of its associated posted TTC during 
the next 7 days. An unconstrained posted path is any posted path that 
is not a constrained posted path.
    For constrained posted paths, ATC and TTC for firm and non-firm 
service would have to be posted for the next 168 hours and, thereafter, 
to the end of a 30-day period. In addition, ATC and TTC for firm and 
non-firm service must be posted for the current month and the next 
twelve months. However, this monthly posting for ATC and TTC for non-
firm service is required only if requested by a customer. If the 
Transmission Provider charges separately for on-peak and off-peak 
periods in its tariff, ATC and TTC will be posted daily for each 
period. A posting for a constrained posted path must be updated when 
transmission service on the path is reserved or service ends or when 
the path's TTC changes by more than 10 percent.
    For an unconstrained posted path, ATC and TTC for firm transmission 
service and non-firm transmission service would be required to be 
posted for the next seven days and for the current month and the next 
twelve months.<SUP>44 If the Transmission Provider charges separately 
for on-peak and off-peak periods in its tariff, ATC and TTC will be 
posted for the current day and the next six days following for each 
period. Postings for an unconstrained posted path must be updated when 
the ATC changes by more than 20 percent of the path's TTC.
---------------------------------------------------------------------------

    \44\ The terms ``firm point-to-point transmission service'' and 
``non-firm point-to-point transmission service'' are defined in the 
definition section of the pro forma tariff for point-to-point 
service.
---------------------------------------------------------------------------

    We will not require ATC and TTC to be posted on the OASIS more than 
thirteen months in advance, with the following exception. If planning 
and specific requested transmission studies have been done, seasonal 
capability shall be posted for the year following the current year and 
for each year following to the end of the planning horizon, but not to 
exceed 10 years.
    c. Methodology for Calculating ATC and TTC (Sec. 37.6(b)(2)). In 
the RIN NOPR, the Commission discussed the requirements for calculating 
ATC and TTC.<SUP>45 Recognizing that formal methods do not currently 
exist to calculate ATC and TTC, the Commission requested comment on how 
to develop a consistent, industry-wide method of calculation (Question 
4).
---------------------------------------------------------------------------

    \45\ See RIN NOPR text at section III.C (60 FR at 66188) and the 
proposed regulation at 18 CFR 37.9(b)(2) (60 FR 66200).
---------------------------------------------------------------------------

    Most commenters recommended that the Commission defer to NERC 
regarding the development of a consistent, industry-wide method of 
calculation. NERC, in turn, recommended that the Commission give 
deference to NERC's ongoing, industry-wide effort. NERC's Transmission 
Transfer Capability Task Force (TTC Task Force), with an expanded 
roster to include representation from all segments of the electric 
industry, was formed to develop uniform definitions for determining ATC 
and related terms. Because the TTC Task Force will not be finished with 
its assignment until May 1996, NERC recommended that the OASIS final 
rule not contain specific definitions of terms such as ATC, but instead 
be limited to a general framework within which the same information can 
be made available to all transmission users at the same time.
    The Commission encourages industry efforts to develop consistent 
methods for calculating ATC and TTC. Consequently, the final rule 
follows the proposed regulations in requiring that ATC and TTC be 
calculated based on a methodology described in the Transmission 
Provider's tariff and that it be ``based on current industry practices, 
standards and criteria.'' (Section 37.6(b)(2)(i)).<SUP>46
---------------------------------------------------------------------------

    \46\ The pro forma tariff in the Open Access Final Rule provides 
that Transmission Providers must develop a method for calculating 
ATC and TTC and must include a description of this methodology in 
their tariffs.
---------------------------------------------------------------------------

    As provided in the pro forma tariff, Transmission Providers may 
themselves purchase only transmission capability that is posted as 
available. This requirement should create an adequate incentive for 
them to calculate ATC and TTC as accurately and as uniformly as 
possible.
    d. Accommodating Flow-Based Pricing. In the RIN NOPR, the 
Commission asked for comment on what requirements would have to be 
changed if the electric power industry moves to regional pricing, flow-
based pricing, or other pricing models that depart from the ``contract 
path'' approach (Question 2).<SUP>47
---------------------------------------------------------------------------

    \47\ See RIN NOPR text at section III.C (60 FR at 66186).
---------------------------------------------------------------------------

    Many commenters expressed the need for OASIS flexibility to support 
both contract path and actual flow models.<SUP>48 Com Ed stated that, 
so long as the OASIS is flexible, appropriate postings involving ATC, 
price, and related information will develop for use with tariffs using 
flow-based pricing.
---------------------------------------------------------------------------

    \48\ See, e.g., Consumers Power, Basin EC, ERCOT, NEPOOL, PA 
Com, How Group, NIEP, NYPP, NERC, Ohio Com, OK Com, Oklahoma G&E, 
PSNM, Texas Utilities, Western Group, PacifiCorp, and PJM comments.
---------------------------------------------------------------------------

    The Commission concludes that the proposed regulations were general 
enough to accommodate flow-based pricing methods. Therefore, we have 
provided no special provision regarding flow-based pricing in the final 
rule. Any OASIS-related issue that arises when flow-based proposals are 
made can be dealt with at that time. We cannot accurately foresee what 
issues may arise concerning flow-based pricing because this is an 
evolving area.
    e. Actual Flow Data. The RIN NOPR proposed the posting of actual 
path flow data to better inform Transmission Customers about the true 
network impacts of taking service on a contract path basis.<SUP>49 The 
Commission asked whether there are any difficulties, technical or 
otherwise, associated with posting actual path flows (Question 20).
---------------------------------------------------------------------------

    \49\ See RIN NOPR text at section III.C (60 FR at 66191).
---------------------------------------------------------------------------

    In response, commenters stated that such posting is technically 
difficult, but possible. However, they question the value and 
usefulness of such postings.<SUP>50

[[Page 21751]]

Commenters stated that information on actual path flows is voluminous, 
excessive, and burdensome to post.
---------------------------------------------------------------------------

    \50\ See, e.g., Allegheny, Arizona, Central Illinois Public 
Service, Carolina P&L, Florida Power Corp, Montana Power, NERC, 
Omaha PPD, Texas Utilities, Union Electric, and VEPCO comments.
---------------------------------------------------------------------------

    Allegheny stated that actual flow information could be commercially 
sensitive depending on the degree to which a generator's output can be 
determined from it. Oklahoma G&E stated that actual flows are 
meaningless unless accompanied by voltage, line thermal limits, and 
line first contingency incremental transfer capability. NERC commented 
that actual path flow postings would be irrelevant or even misleading 
to the Transmission Customer and should not be required. NERC added, 
however, that the Commission should not preclude such postings either. 
The How Group pointed out that, from a technical standpoint, posting 
actual path flows significantly increases the level of detail in 
information about transmission service. APPA answered that some regions 
already have the capability to post actual flows, but functional 
separation diminished the need for the Commission to require the 
posting of actual flows.
    The final rule does not require the posting of actual path flows. 
As long as ATC and TTC are calculated to reflect network conditions, 
including parallel path constraints, actual flow data need not be 
posted. The Commission may reassess this issue after reviewing the 
proposals of the TTC Task Force on methods for calculating ATC and TTC 
expected in May 1996.
    f. Providing Supporting Information (Sec. 37.6(b)(2)(ii)). In the 
RIN NOPR, we proposed that public utilities must post all data used in 
calculating the ATC and TTC and make such data publicly 
available.<SUP>51 The Commission received a number of comments on this 
proposal.
---------------------------------------------------------------------------

    \51\ See RIN NOPR text at section III.C (60 FR at 66190) and the 
proposed regulation at 18 CFR 37.9(b)(6) (60 FR 66200).
---------------------------------------------------------------------------

    A majority of commenters stated that supporting data should not be 
available on the OASIS.<SUP>52 About half of the commenters argued that 
the data should be available off-line.<SUP>53 Others suggested that 
procedures and software used in calculating ATC and TTC must be 
posted.<SUP>54 NYPP suggested that a bibliography of supporting 
information should be maintained on the OASIS.
---------------------------------------------------------------------------

    \52\ See, e.g., Allegheny, Central Illinois Public Service, 
Continental Power Exchange, EPRI, Florida Power Corp, MAPP, NERC, NE 
Public Power District, NYPP, Ohio Edison, PSNM, VEPCO, Western 
Group, and WP&L comments.
    \53\ See, e.g., Allegheny, ConEd, Detroit Edison, Duke, EPRI, 
Idaho, MAPP, NEPOOL, NE Public Power District, Ohio Edison, PSNM, 
VEPCO, and Western Group comments.
    \54\ See, e.g., Duke, EPRI, Idaho, PSNM, Western Group comments.
---------------------------------------------------------------------------

    Having this information available is essential for building and 
maintaining trust in the information posted on the OASIS. Transmission 
Providers generally seem willing to provide this information after-the-
fact and off-line. Since this information would be used only after-the-
fact and can be voluminous, the final regulations require that ATC and 
TTC supporting information be made available by the Responsible Party 
within one week of posting, on request, in their original electronic 
format and at the cost of reproducing the materials. A requirement 
specifying how long the information must be retained also has been 
added.
    g. Long-Term Studies (Sec. 37.6(b)(2)(iii)). The RIN NOPR proposed 
that any planning or specifically requested studies of the transmission 
network performed by the Transmission Provider be posted on a same-time 
basis.<SUP>55 This would include only those parts of customer-specific 
interconnection studies that relate to network impacts.
---------------------------------------------------------------------------

    \55\ See RIN NOPR text at section III.C (60 FR at 66191) and the 
proposed regulation at 18 CFR 37.8(c) (60 FR 66200).
---------------------------------------------------------------------------

    The majority of commenters responded that transmission planning 
studies should not be posted on the OASIS. ConEd and MAPP suggested an 
index to be maintained on the OASIS. NEPOOL, Tallahassee, and Montana 
Power suggested that summaries should be maintained on the OASIS.
    As with the ATC supporting information, having this information 
available is essential for building and maintaining trust in the ATC 
and TTC posted on the OASIS. Since this information would be used only 
after-the-fact and can be voluminous, the final regulations require 
that final transmission studies be available from the Responsible Party 
on request in original electronic format and at the cost of reproducing 
the materials. A list of available studies is to be posted on the 
OASIS. A requirement specifying how long the studies must be retained 
also has been added.
3. Posting Transmission Service Products and Prices (Sec. 37.6(c))
    Paragraph 37.6(c) of the regulations adopts several of the proposed 
provisions. It requires Transmission Providers to post prices and a 
summary of the terms and conditions of transmission products. In 
addition, Transmission Providers must provide a downloadable file of 
their complete tariffs. Furthermore, customers who use an OASIS to 
resell transmission capacity must submit relevant information about 
their resale transactions to the Transmission Provider for posting to 
the same OASIS as used by the Transmission Provider in originally 
offering that capacity. As proposed in the RIN NOPR, the Transmission 
Provider must post this information about resales on the same display 
page, using the same tables, as similar capacity being sold by it. 
Similarly, the information must be contained in the same downloadable 
files as the Transmission Provider's own available capacity. A customer 
who does not use an OASIS to arrange a resale of transmission capacity 
must, nevertheless, inform the original Transmission Provider of the 
transaction within the time limits prescribed by the ``Sale or 
Assignment of Transmission Service'' section of the pro forma tariff.
    The proposed standards of conduct required a Transmission Provider 
that offers any discount on behalf of its power customers or those of 
an affiliate, to post offers for similar service containing comparable 
discounts, at the same time, to all Transmission Customers.
    As to discounts that the Transmission Provider has agreed to give 
to any Transmission Customer (affiliated or unaffiliated), the 
Commission proposed requiring that these discounts be posted within 24 
hours after the agreement is entered (measured from when ATC is 
adjusted in response to the agreement), and that they remain posted for 
30 days. The Commission sought comment on whether all transmission 
discounts should be posted on the OASIS, or only those provided to the 
Transmission Provider or its affiliates (Question 14).
    Most commenters, including representatives with diverse interests 
such as APPA, EEI, Continental Power Exchange, EGA, EEI, NIEP, and 
NRECA, argued that discounts must be made available to all customers. 
NRECA especially, was concerned about the potential for selective 
discounting. The Ohio Com, clearly concerned about allowing 
Transmission Providers to negotiate privately, asked that we clarify 
how discounting would work, and EGA raised some practical concerns 
about how the Commission's proposal would work. EGA asked whether, when 
a discount is offered to an affiliate, discounts must be offered to 
others on the same path, all paths, or only paths needed to get to the 
buyer to whom the affiliate is selling. This issue is addressed in the 
Open Access Final Rule, which concludes that such

[[Page 21752]]

discounts must be offered to all customers on all unconstrained paths.
    Several commenters were against discounting, but would accept 
discounts if they were made available to all customers.\56\ Several 
commenters agreed with the proposal to require posting of discounts 
offered to affiliates and delaying the reporting of discounts to 
others.\57\ However, CCEM wants to change the 24-hour delay period to 
30 days.
---------------------------------------------------------------------------

    \56\ See ERCOT, MidAmerican, NUCOR, and Public Generating Pool 
comments.
    \57\ See CCEM, OK Com, and Tallahassee comments.
---------------------------------------------------------------------------

    SCE&G and Union Electric would allow discounting but not post them 
on the OASIS. Central Hudson would post only affiliate discounts. SMUD 
argued that selective discounting is good and stated that, if public 
utilities must offer discounts to everyone, no discounts would be 
offered to anyone.
    The question of whether discounts may be offered is discussed in 
the Open Access Final Rule.\58\ If a Transmission Provider offers a 
discount for transmission service to its own power customers or those 
of an affiliate, it must, at the same time, post on the OASIS an offer 
to provide the same discount to all eligible customers on the same path 
and on all unconstrained transmission paths. As to discounts for 
ancillary services, if a Transmission Provider offers a rate discount 
to an affiliate, or attributes a discounted ancillary service rate to 
its own transactions, 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. Any discounts under Sec. 37.6(c)(3) offered to 
affiliates or to the Transmission Provider's own power customers must 
be posted on the OASIS when they are offered pursuant to 
Sec. 37.4(b)(5)(v). Discounts offered to non-affiliates must be posted 
within 24 hours of when ATC is adjusted in response to the transaction.
---------------------------------------------------------------------------

    \58\ See generally Open Access Final Rule at sections IV.D and 
IV.G.
---------------------------------------------------------------------------

4. Posting Ancillary Service Offerings and Prices (Sec. 37.6(d))
    Transmission Providers are required to post on the OASIS 
information about all ancillary services required by the Open Access 
Final Rule to be provided or offered to customers.\59\ A Transmission 
Provider may, at its discretion, post information on the OASIS about 
other interconnected operation services, offered by itself or third 
parties, that are not services required by the Open Access Final Rule 
to be offered to customers. However, if a Transmission Provider elects 
to post these optional services for any party, including itself, then 
it must post on its OASIS, for a reasonable cost based fee, the same 
type of information about comparable optional ancillary services 
offered by third parties.
---------------------------------------------------------------------------

    \59\ See generally Open Access Final Rule at section IV.D.
---------------------------------------------------------------------------

    In the RIN NOPR, we proposed the posting of price and other 
information about ancillary services.\60\ We requested comment on: (1) 
The information needed about ancillary services (Question 12); (2) how 
often the information should be updated (Question 13); and (3) where on 
the information network offers of ancillary services by entities other 
than the Transmission Provider should be placed (Question 9).
---------------------------------------------------------------------------

    \60\ See RIN NOPR text at section III.C (60 FR at 66190).
---------------------------------------------------------------------------

    While there is near consensus among commenters on the need to 
update ancillary services information as it changes, there is 
widespread disagreement on what information about ancillary services 
should be posted and where on the OASIS offers by other entities to 
provide ancillary services should be placed. Some commenters request 
that the Commission allow flexibility because the information 
requirement may depend upon the industry structure that develops in 
response to the Open Access Final Rule. NERC asserted that it is 
impractical to expect the initial OASIS to be the vehicle for posting 
information on the availability and price of all ancillary services.
    Ancillary service providers are required to post all pertinent 
information about their ancillary service offerings (e.g., a 
description of the service being offered, its availability, and its 
price) so that Transmission Customers may compare offers and decide 
which offer best suits their needs. Information about ancillary 
services should be updated as it changes. Postings by customers and 
third parties should be on the same page, and in the same format, as 
postings of the Transmission Provider.
5. Posting Transmission Service Requests and Responses (Sec. 37.6(e))
    Section 37.6(e) requires that all requests by customers for 
transmission service that the Transmission Provider offers under the 
pro forma tariff must be made on the OASIS. The Responsible Party is 
required to provide to others on the OASIS the essential information 
relating to such requests, with the identity of the parties masked, if 
requested. Additionally, the section sets out the steps that must be 
followed in processing such requests, including the posting of 
curtailments, interruptions, or denials of service.\61\ The final OASIS 
regulations require that a record of transactions not resulting in 
agreements also be kept for audit purposes. We now discuss some special 
issues arising under this provision and the comments relating to those 
provisions.
---------------------------------------------------------------------------

    \61\ The Open Access Final Rule discusses curtailments at 
section IV.G and provides that a company's curtailment policy is to 
be described in its tariff.
---------------------------------------------------------------------------

    a. Posting Curtailments and Interruptions (Sec. 37.6(e)(3)). We 
proposed requiring that, when a transaction is curtailed, a 
Transmission Provider must post the reason that the transaction was 
curtailed and the available options, if any, for adjusting the 
operation of the Transmission Provider's system to increase transfer 
capability in order to accommodate the transaction.\62\ Since 
scheduling and the curtailment of schedules would not be done through 
the information network initially, this curtailment data would be for 
information purposes only.
---------------------------------------------------------------------------

    \62\ ``Curtailments'' are service cutbacks made for system 
reliability reasons and are distinguishable from ``interruptions'', 
which are made pursuant to tariff conditions.
---------------------------------------------------------------------------

    The Commission requested comments on what information about 
curtailments should be communicated on an OASIS (Question 7). Only 
Union Electric, among the commenters who answered this question, argued 
against posting information about curtailments or recording this 
information in an audit file. Among those who supported posting or 
recording, the differences were in how much information should be 
provided, where the information should be placed, and who should have 
access to the information.
    The comments expressed support for a Transmission Provider setting 
out in its tariff, or elsewhere, curtailment or interruption rules or 
constraint relief protocols.\63\ This would let a customer know what to 
expect when there is a constraint and would allow the Transmission 
Provider to be held to a formal set of procedures. Then, when a 
curtailment occurs, postings on the OASIS can refer to steps and 
reasons defined in the curtailment procedures.
---------------------------------------------------------------------------

    \63\ See APS, NERC, and NIEP comments.
---------------------------------------------------------------------------

    Many commenters agreed that at least some basic information about 
curtailments needs to be posted or documented in the audit file. 
Several commenters pointed out that there may

[[Page 21753]]

be some lag before these postings are placed on the OASIS because 
control room personnel may need time to determine and resolve the 
problem.\64\ Some commenters believed that these postings should be 
made available only to those curtailed.\65\
---------------------------------------------------------------------------

    \64\ See Allegheny, Com Ed, CSW, NERC, NRECA, and SCE&G 
comments.
    \65\ See, e.g., Allegheny and Central Illinois Public Service 
comments.
---------------------------------------------------------------------------

    The proposed regulations addressed curtailments and denials of 
service together. In this final rule, denials are distinguished from 
curtailments of service. Transmission Providers are not required to 
offer options for making capacity available to those curtailed, but if 
options are offered, they must be offered to curtailed and interrupted 
customers at the same time.
    As discussed in the Open Access Final Rule, transmission tariffs 
must include rules for curtailment and interruption of service, 
including clear steps or stages in the process for relieving 
constraints, and transmission service agreements must clearly identify 
the service's priority relative to concurrent services. Consistent with 
these requirements, the final rule here provides that, when 
curtailments or interruptions take place, they must be posted as soon 
as possible and must include identification of the service (with the 
identity of the customer masked), the reason for the curtailment or 
interruption, and the tariff-defined step in the curtailment and 
interruption process. In the event that an emergency situation 
affecting system reliability delays this posting, the posting must be 
made as soon as practicable thereafter along with an explanation for 
the delayed posting.
    Curtailments and interruptions will be recorded for audit purposes. 
This audit data should contain enough information about the timing of 
superseding requests and changes in ATC to document the reason for a 
curtailment or interruption. The final rule also provides that 
customers have the right to request an explanation of the reason for a 
curtailment or interruption.
    b. Posting Denials of Requests for Service (Sec. 37.6(e)(2)). In 
the RIN NOPR, we proposed requiring that, when requests for service are 
denied, Transmission Providers must communicate to Transmission 
Customers through the OASIS: the reason(s) that the transaction(s) 
could not be accommodated; and the available options, if any, for 
adjusting the operation of the Transmission Provider's system to 
increase transfer capability to accommodate the transaction(s). The 
Commission requested comments on what information about denials of 
requests for service should be communicated on an OASIS (Question 7).
    As with curtailments, only Union Electric out of the commenters who 
answered this question opposed posting information about denials of 
service on the OASIS or recording this information in an audit file. 
Many commenters agreed that at least some basic information about 
denials should be posted. Some commenters believed that these postings 
should be available only to those denied service.\66\
---------------------------------------------------------------------------

    \66\ See Allegheny and Central Illinois Public Service comments.
---------------------------------------------------------------------------

    Service can be denied for two basic reasons: either (1) the 
customer requested more than the posted ATC or (2) after the request 
for service was made, conditions changed due to preexisting requests or 
unforeseen events reducing capacity. Denials should be handled as part 
of the request and response process. A requester should receive a 
standardized reason for denial as part of the response. Denials would 
not be posted. Instead, denials must be recorded for audit purposes and 
maintained as provided in section 37.7(b). This data should contain the 
information about a denial needed to explain the reason for a denial. 
Under the final rules, customers have the right to request an 
explanation of the standardized reason for a denial.
    c. Transaction Anonymity (Sec. 37.6(e)(3)(i)). In the RIN NOPR, we 
proposed that, generally, information concerning negotiations on 
transmission requests need not be posted unless an agreement to provide 
the transmission is reached.\67\ This information would be available 
only after-the-fact in the audit file. In addition, if an agreement is 
reached, the identity of parties to transmission transactions would be 
masked until 30 days after the date when the Transmission Provider's 
ATC was adjusted in response to the transaction. (This might be after 
the date when service begins). After that date, all transaction data 
would be made available. In addition, we proposed that transmission 
transaction prices be included in the information in the audit file. 
Price information concerning cost-based transmission services would not 
be considered commercially sensitive.
---------------------------------------------------------------------------

    \67\ See RIN NOPR text at section III.C (60 FR at 66191) and the 
proposed regulation at 18 CFR 37.14(d) (60 FR 66201).
---------------------------------------------------------------------------

    The Commission requested comment on what information should be 
considered commercially sensitive, the 30-day release period proposal, 
and on how and when commercially sensitive information should be 
released to concerned parties before the standard release period and 
whether affiliated transactions should be treated differently (Question 
24).
    Several commenters agreed that information about negotiations that 
do not reach agreement should not be reported.\68\ No commenter argued 
for making this information public.
---------------------------------------------------------------------------

    \68\ See, e.g., Allegheny, Detroit Edison, El Paso, NorAm, and 
OK Com comments.
---------------------------------------------------------------------------

    A number of commenters supported the 30-day delay on providing 
commercially sensitive information.\69\ Several, however, thought the 
information should be provided as soon as possible.\70\ Others thought 
it should be provided quarterly.\71\ WP&L proposed a 60-day delay. 
Dayton P&L said that the delay should depend on contract length. Union 
Electric suggested a delay of 30 days after the transaction begins and 
not after the ATC is adjusted.
---------------------------------------------------------------------------

    \69\ See Allegheny, CCEM, El Paso, Oklahoma G&E, PJM, PSNM, and 
Western Group comments.
    \70\ See APPA, Continental Power Exchange, MidAmerican Energy, 
and NIEP comments.
    \71\ See Arizona, ConEd, and NorAm comments.
---------------------------------------------------------------------------

    Commenters split on the question of whether price data are 
commercially sensitive.\72\ Commenters listed several items as 
commercially sensitive that were proposed to be posted. These are ATC 
supporting information,\73\ transmission schedule information,\74\ 
generation run status,\75\ amount provided,\76\ terms and 
conditions,\77\ and duration.\78\
---------------------------------------------------------------------------

    \72\ EGA, NUCOR, NRECA, Omaha PPD, and PJM supported the 
proposition that the data are not commercially sensitive. Arizona, 
Central Illinois Public Service, Detroit Edison, OK Com, PSNM, 
Seattle, and Western Group argued that the data are commercially 
sensitive.
    \73\ See Carolina P&L and El Paso comments.
    \74\ See Central Illinois Public Service and OK Com comments.
    \75\ See Allegheny, Carolina P&L, CSW, Detroit Edison, EGA, NE 
Public Power District, and PJM comments.
    \76\ See, e.g., Allegheny and WP&L comments.
    \77\ See Central Illinois Public Service comments.
    \78\ See Allegheny comments.
---------------------------------------------------------------------------

    NE Public Power District argued for full disclosure of all but 
generator information because, as a public entity, it must disclose 
such information. NIEP stated that comparability should be the ruling 
principle in information disclosure.
    The final rule adopts the NOPR proposal and provides that the 
identity of parties to an agreement are confidential during ongoing 
negotiations and for 30 days from the time ATC is adjusted. Although 
not explicitly required in the new Part 37, the price of services 
offered on and

[[Page 21754]]

agreed to through the OASIS are not considered commercially 
sensitive.<SUP>79
---------------------------------------------------------------------------

    \79\ We note, in this regard, that Sec. 205(c) of the FPA 
requires public utilities to have their prices on file with the 
Commission and available for public inspection.
---------------------------------------------------------------------------

6. Posting Facility Status Information
    The RIN NOPR discussed the fact that the ATC of some transmission 
paths depends on generator run status or megawatt output, or both, as 
well as on other system elements.<SUP>80 We proposed requiring 
Transmission Providers to post information about those system elements 
that have a direct and significant impact on ATC. Such elements could 
include generators, transmission lines, phase shifters, series and 
shunt capacitors, static VAR compensators, special protection systems 
or remedial action schemes. We, therefore, requested comment on whether 
it is sufficient to provide information only about planned outages and 
(for both planned and forced outages) return dates for system elements 
deemed to have a direct and significant impact on ATC and whether 
posting this information would cause any confidentiality concerns 
(Question 18). We also requested comment on how ``significant and 
direct impact'' should be defined (Question 19).
---------------------------------------------------------------------------

    \80\ See RIN NOPR text at section III.C (60 FR at 66191).
---------------------------------------------------------------------------

    Additionally, we requested comment on whether it would be 
sufficient to post the changes to ATC corresponding to the planned 
outage or return dates of generators (Question 21); and whether, if 
operating guides, nomograms, operating studies, and similar information 
were posted, the run status of those generators with a significant and 
direct impact on ATC could be deduced (Question 22).
Comments
    A number of commenters stated that the posting of facility status 
information should not be a requirement.<SUP>81 These commenters 
reasoned that the posted ATC and TTC values would reflect facility 
status impacts and that posting status information therefore would be 
unnecessary and burdensome, and would render the information network 
unmanageable. With regard to generator status and outage information, a 
number of respondents argued that generator status and outage-related 
information is commercially sensitive and confidential.<SUP>82 They 
stated that posting generator-related information would give an unfair 
advantage to competitors. Some opposing the posting of generation-
related information also added that the Commission's proposed standards 
of conduct would make it unnecessary to post this information because 
the Transmission Customer's and the Transmission Provider's wholesale 
marketing functions would rely on the same information.<SUP>83 A number 
of Transmission Providers believed that facility status data can be 
archived and made available for after-the-fact audits.<SUP>84
---------------------------------------------------------------------------

    \81\ See Allegheny, Central Illinois Public Service, Com Ed, 
CSW, Dayton P&L, Detroit Edison, Duke, Montana Power, NERC, NYPP, 
Ohio Edison, PJM, PSNM, Texas Utilities, VEPCO, and WP&L comments.
    \82\ See Allegheny, Arizona, Central Illinois Public Service, 
ConEd, Carolina P&L, CSW, Dayton P&L, Detroit Edison, Florida Power 
Corp, NEPOOL, NE Public Power District, NERC, NYPP, Oklahoma G&E, 
Omaha PPD, PJM, Texas Utilities, Union Electric, VEPCO, and WP&L 
comments.
    \83\ See Central Illinois Public Service, Carolina P&L, and Ohio 
Edison comments.
    \84\ See ConEd, CSW, Florida Power Corp, NYPP, Ohio Edison, and 
PSNM comments.
---------------------------------------------------------------------------

    A second group of commenters believed that facility status 
information should be posted on the OASIS.<SUP>85 With regard to 
generator status and outage data, Seattle responded that planned 
generator outage data should be updated as it changes and that an 
explanation of the impact of typical outage configurations should be 
made available to all transmission users in advance. APPA stated that 
the run status (on-line or off-line) of any generating unit should not 
be kept confidential. APPA argued that keeping such information 
confidential, under the guise of competitive necessity, is an excuse to 
protect opportunities to game the market. NCEMC stated that, because 
the transmission user needs to be able to do a reliability and risk 
assessment of various available power supply sources and transmission 
paths, it probably is not sufficient to post ATC changes corresponding 
to generation outages.
---------------------------------------------------------------------------

    \85\ See APPA, CCEM, EGA, NCEMC, NIEP, OK Com, Seattle, 
Tallahassee, and United Illuminating comments.
---------------------------------------------------------------------------

    A third group of commenters suggested that, while generator status-
related information should not be posted, information about 
transmission facilities with direct and significant impact on ATC and 
TTC could be posted.<SUP>86 There were diverging views among the 
commenters as to whether posted ATC or TTC values would reveal the run 
status of generators if operating guides, nomograms, operating studies, 
and similar information were posted. A number of commenters responded 
that ATC and TTC are affected by many variables and, even though in 
some cases it may be possible to deduce the run status of certain 
generators from the posted ATC or TTC, these deductions would be 
uncertain.<SUP>87
---------------------------------------------------------------------------

    \86\ See Arizona, Dayton P&L, MidAmerican, NEPOOL, PJM, and 
Western Group comments.
    \87\ See Arizona, CCEM, Central Illinois Public Service, Com Ed, 
ConEd, CSW, Detroit Edison, NEPOOL, NE Public Power District, VEPCO, 
and WP&L comments.
---------------------------------------------------------------------------

    NERC responded that it may be possible, over time, to recognize 
patterns and supporting data that would indicate which generator went 
off-line, but not whether the reason is a planned outage, forced 
outage, reserve shutdown, or other reasons. NERC explained that a run 
status so deduced would itself be an estimate and not as commercially 
sensitive as knowing the reason for that status. Florida Power Corp and 
Montana Power responded that customers will be able to deduce 
generation-related information from changes in ATC if guides, 
nomograms, or studies are posted and, therefore, such information 
should not be posted.
    By contrast, a number of commenters stated that nomograms, derating 
tables, and operating studies can be used to identify equipment that 
has a direct and significant impact on ATC and TTC. <SUP>88 The Western 
Group responded that, where study results have been summarized in 
nomograms, derating tables, and operating guidelines and procedures, 
these summary forms should be made available as information on the 
OASIS.
---------------------------------------------------------------------------

    \88\ See APPA, Arizona, CCEM, Idaho, NEPOOL, Oklahoma Com, 
Seattle, and SoCal Edison comments.
---------------------------------------------------------------------------

    A number of respondents answered that it is not necessary to define 
``significant and direct impact'' because ATC and TTC are the only 
quantities that need to be posted. <SUP>89 ConEd stated that the 
definition of ``significant'' should be consistent with local and 
regional procedures. Duke and Florida Power Corp commented that the 
Commission should work through NERC in developing appropriate 
definitions. NYPP, on the other hand, stated that ``significant and 
direct impact'' can be determined only on a case-by-case basis. Montana 
Power defined the term as a reduction of ATC that results in the denial 
of service. Continental Power Exchange proposed that any system element 
affecting ATC more than 10 percent should be considered significant. 
CSW proposed a 50 percent threshold. CSW further proposed to include 
those elements that can cause a reduction of more than 25 percent of 
the normal flows across an interface.
---------------------------------------------------------------------------

    \89\ See Allegheny, Com Ed, Detroit Edison, NERC, NE Public 
Power District, Ohio Edison, SCE&G, Texas Utilities, Union Electric, 
and VEPCO comments.

---------------------------------------------------------------------------

[[Page 21755]]

Discussion
    Additional information about the state of the transmission system 
will enable Transmission Customers to make better decisions about the 
quality of the transmission service they intend to purchase. However, 
the development and implementation of Phase I OASIS, in what is a 
relatively short period of time, requires that we limit the posting 
requirements of the OASIS to the essentials. We believe that audit data 
and information required to be provided about the reasons for 
curtailments and interruptions will make it possible to document unduly 
discriminatory practices concerning facilities critical to transmission 
capability. Also, as pointed out by APPA, the standards of conduct that 
we put in place with this rule lessen the urgency of posting additional 
information concerning generating unit status and transmission 
component status. Consequently, the Commission will not require the 
posting of information about the run status of generation and 
transmission facilities for a Phase I OASIS. We may reconsider this 
subject for Phase II OASIS depending on the Phase I experience.
7. Posting Transmission Service Schedules Information (Sec. 37.6(f))
    The final rule consolidates and renumbers Secs. 37.14(b) and (c) of 
the RIN NOPR as Sec. 37.6(f). This provision requires information on 
scheduled transmission service to be recorded by the entity scheduling 
the transmission service and requires that the information be made 
available for download on the OASIS by interested parties. It also 
provides that postings must be made within one week of the start of the 
transmission service schedule agreed upon by the parties. The comments 
in response to the RIN NOPR did not take issue with the proposal. Thus, 
the provision is adopted without substantial revision.
8. Posting Other Transmission-Related Communications (Sec. 37.6(g))
    Section 37.6(g) basically adopts what we proposed for the posting 
of ``want ads'' and ``other communications'' in Sec. 37.9(f) of the RIN 
NOPR. Postings made in this section carry no obligation to respond on 
the part of any market participant.
    This section provides that ``other communications related to 
transmission services'' (such as using the OASIS as a transmission-
related conference space or to provide transmission-related messaging 
services between OASIS users) and ``want ads'' must be posted by the 
Responsible Party.
    We received comments that urged the Commission to issue a 
disclaimer to the effect that, although Transmission Providers are 
responsible for posting other transmission-related communications at 
the request of third parties, it is the responsibility of the third 
parties requesting such postings to ensure the accuracy of the 
information to be posted. We agree that such a disclaimer is 
appropriate. We provide it in Sec. 37.6(g)(2).
    In addition, the final rule requires that transfers of personnel 
between the transmission and marketing functions are to be posted on 
the OASIS (Sec. 37.6(g)(3)). This incorporates the requirements of the 
standards of conduct at Sec. 37.4(b)(2).

I. Section 37.7--Auditing Transmission Service Information

    In the RIN NOPR, we proposed procedures that would govern the 
availability of records about auditing transmission service 
transactions. <SUP>90 The Commission proposed requiring that historical 
data on postings, updates, and request/response communications be 
recorded for audit purposes, be downloadable from the OASIS in an 
appropriate format for 60 days, and be available for download on a 
rolling basis for three years from entry on the OASIS. These provisions 
are now contained in Sec. 37.7 of the final rule. However, we have 
increased the time during which audit data must be available for 
download from 60 days to 90 days because this provides greater 
protection to customers.
---------------------------------------------------------------------------

    \90\ See RIN NOPR text at section III.C (60 FR at 66191) and the 
proposed regulation at 18 CFR 37.14 (60 FR 66201).
---------------------------------------------------------------------------

    ConEd suggested that the Commission should provide assurance to 
Transmission Providers that they will not be liable if they post data 
under the proposed audit provisions that is considered confidential by 
their customers. We do not believe that it would be appropriate for the 
Commission to issue this sort of blanket disclaimer in the absence of 
any particular facts or controversy. However, to the extent that a 
Transmission Provider posts data because this is required by the 
Commission's regulations, the Transmission Provider may, of course, 
assert this as a defense against any legal action brought against it 
based on the disclosure.

J. Standards and Communication Protocols

    In this section, we discuss the major issues raised in response to 
our proposed standards and protocols. As proposed, these are being 
issued in the separate Standards and Protocols document that we are 
issuing together with this final rule. As already described, the final 
rule states explicitly that information is to be posted on the OASIS in 
conformance with the specifications of the Standards and Protocols.
    The most recent How Report (filed on April 15, 1996) shows great 
strides toward reaching consensus on a set of implementable standards. 
However, it needs to be augmented in two ways.
    First, there are some internal inconsistences. For example, there 
are data elements that appear in the data dictionary that do not appear 
in the templates and vice versa. The data elements for DUNS numbers 
that appear in the data dictionary need to be added to the appropriate 
templates. Data elements for DUNS numbers for resellers need to be 
added to both the data dictionary and the appropriate templates. The 
October 16, 1995 How Report contained standards for Transmission 
Services Information Timing Requirements. The most recent report 
substantially changed these requirements. We request that the report we 
are asking the How Group to submit by May 28, 1996 reinstate these 
requirements or explain why they should be changed.
    Second, and not surprisingly, the standards and protocols must now 
be conformed to the requirements of the final rule. For example, 
necessary changes include developing file and display templates for 
curtailments and interruptions, developing file and display templates 
to place primary and resale capacity on the same displays and in the 
same downloadable files, and developing file and display templates to 
place ancillary services provided by the primary provider and others on 
the same display page and in the same downloadable files.
    Under procedures we are instituting today, we expect the 
recommendations for standards and protocols to be conformed to the 
requirements of the final rule and for inconsistencies to be corrected 
in the next few months. We are issuing portions of the standards and 
protocols now to provide as much information as possible to allow the 
industry to begin the work of building necessary systems to make their 
OASIS nodes operational. This information, coupled with the 
requirements of the Open Access Final Rule and our additional 
procedures to complete the Standards and Protocols, should result in 
the OASIS nodes being operational

[[Page 21756]]

within six months of the publication of this final rule in the Federal 
Register.
    The April 15, 1996 How Report contains references to a yet to be 
established industry group, the [OASIS] Management Organization, that 
will maintain a registry of [OASIS] node names and perhaps perform 
other functions associated with maintaining a functioning [OASIS]. We 
agree that there is a need for an industry group to maintain a registry 
of OASIS node names and perform similar functions and expect that such 
a group will be established by the industry prior to the implementation 
of the OASIS requirements. The Standards and Protocols, therefore, 
contains a reference to this function. We expect that such a group 
would be composed of representatives of all segments of the electric 
industry and we expect to be apprised of the group's activities.
1. Summary of Standards and Communication Protocol Requirements
    The Standards and Protocols, which we are adopting together with 
this final rule, require Transmission Providers to make their OASIS 
nodes accessible through the Internet. Each Responsible Party's OASIS 
is considered to be a separate node. An OASIS operated jointly by 
several utilities would be considered one node. By connecting each node 
through the Internet, transmission service information provided by each 
utility becomes part of a network.
    We are requiring that nodes must support the use of Internet tools. 
The specific tools are described in the Standards and Protocols. OASIS 
users will access nodes using World Wide Web (WWW) browsers.<SUP>91 
Each node will display information using the Hypertext Mark-up Language 
(HTML) protocol required by World Wide Web browsers. Screen displays 
will consist of a series of pages that may be viewed by customers 
without requiring the page to be downloaded and viewed by separate 
software. The information on each page, but not the actual displays, 
will be standardized. Information must also be made available for 
downloading, in a standardized ASCII <SUP>92 format.
---------------------------------------------------------------------------

    \91\ The World Wide Web is a system of computer resources that 
are accessed through the Internet.
    A Browser is a computer program for retrieving and reading 
hypermedia documents from the WWW. A hypermedia document can contain 
text, graphics, video, sound or data. These documents are often 
linked to other documents.
    \92\ ASCII refers to the American Standard Code for Information 
Interchange, a code for character representation.
---------------------------------------------------------------------------

    In Phase I, customers will have access to the information required 
to be posted by this rule and will be able to use the OASIS to reserve 
transmission capacity. They will be able to request capacity either by 
completing a standardized form contained in an on-line HTML page or by 
uploading a filled-out form using HTTP. Customers who want to resell 
transmission capacity will upload (post) the relevant information to 
the same OASIS node used by the primary provider from whom they 
purchased the ATC. Customers will also be able to upload other 
communications (e.g., Want Ads) containing such information as requests 
to purchase transmission capacity.
    OASIS nodes must provide direct connections to private networks if 
requested to do so. The cost of the connections will be paid for by the 
requestor and the networks are required to use Internet tools.
    The Standards and Protocols contain a model of the information 
requirements that must be provided at each OASIS node. Customers are 
limited to obtaining information from HTML text displays and selecting 
from menus of downloadable files. Customers will receive the 
information either as HTML pages or as ASCII files in a predetermined 
form and layout.
    For security purposes, and as an aid in auditing performance and 
transactions, all customers are required to register with the 
Responsible Party before they are permitted access to the utility's 
transmission service information on the OASIS. As registered 
subscribers, they will be allowed to read and download information, 
make requests for transmission service, place ``Want Ads'' and offer 
transmission service for resale. Commission staff and staff of state 
regulatory authorities are to obtain free ``read only'' access to the 
OASIS and members of the general public will also be provided ``read 
only'' access to the OASIS for the same usage fee paid by customers, 
once they have complied with the requisite registration procedures.
    Responsible Parties are required to meet a number of performance 
standards and security precautions. Performance requirements include 
sizing OASIS nodes to handle the loading of registered subscribers, 
responding to subscriber requests, backing up the system, and other 
areas that are necessary for the system to function as desired.
2. Number of OASIS Nodes (Question 35)
    The Commission proposed that Transmission Providers be permitted to 
combine their separate OASIS nodes into a single node. Thus, while 
there could be as many nodes as there are transmission-owning 
utilities, if utilities choose to combine together to create joint 
nodes, we could end up with a small number of nodes.
    A small number of nodes would minimize the networking management 
requirements for the OASIS and would help ensure access to the 
information systems. On the other hand, the advantages of a small 
number of separate nodes must be weighed against the greater complexity 
and size of a joint node that would handle transactions for several 
large transmission-owning utilities at one node. The Commission 
requested comments on whether a small or large number of OASIS nodes 
should be encouraged.
    The majority of commenters preferred a small number of nodes, but 
would not necessarily have the Commission require a small number of 
nodes.<SUP>93 Some commenters advocated regional nodes.<SUP>94 PJM 
speculated that, even if the Commission does not encourage a small 
number of nodes, economies of scale and market efficiencies will lead 
to smaller numbers in the normal course of events. The How Group 
reported that significant consolidation is already occurring:

    \93\ See, e.g., Allegheny, Central Hudson, Central Illinois 
Public Service, Com Ed, Continental Power Exchange, How Group, 
Florida Power Corp, Montana Power, NERC, NYPP, Ohio Edison, OK Com, 
PJM, PSNM, Seattle, Texas Utilities, and VEPCO comments.
    \94\ See APPA, CCEM, ConEd, CSW, and MAPP comments.
---------------------------------------------------------------------------

it appears there may be 1 node in ERCOT, 13-14 nodes in the Eastern 
Interconnection, and 6-20 nodes in the Western Interconnection. The 
resulting 20-35 nodes [nationwide] is a manageable number for 
Customers maneuvering through the system and at the same time 
minimizes the impact of possible security breaches or system 
failures by being sufficiently distributed.<SUP>95

    \95\ How Group comments at 19.
---------------------------------------------------------------------------

    Given these comments, we believe that the question of whether there 
should be a small number of nodes is one best left to the industry. At 
this stage, flexibility in such matters is important.
3. Direct Connections to OASIS Nodes (Question 36)
    The Commission explained in the RIN NOPR that private networks and 
third party services can provide valuable contributions to the 
successful operation of an OASIS.<SUP>96 The Commission, therefore, 
proposed to

[[Page 21757]]

require utilities to provide direct connections to the OASIS without 
the need to obtain access through the Internet. We also proposed that 
the cost of these connections be paid for by the customers making the 
requests and that the networks be required to use the same Internet 
tools as the Internet connections.
---------------------------------------------------------------------------

    \96\ For example, a private network could connect to one or more 
OASIS nodes and offer users off-the-Internet connections at faster 
speeds. Third parties could gather OASIS information and repackage 
it into customized displays favored by individual users.
---------------------------------------------------------------------------

    Most commenters preferred that the Commission not require third-
party connections to the OASIS in Phase I.<SUP>97 Com Ed asserted that 
direct connections would provide only marginal benefits to the 
development of an OASIS, and that adding such non-essential goals to 
OASIS requirements would jeopardize utilities' ability to implement an 
OASIS on time. Montana Power argued that direct connections would 
provide affluent large marketers with information ahead of smaller 
users, and thus would give them market power.
---------------------------------------------------------------------------

    \97\ See, e.g., Allegheny, Com Ed, Montana, NERC, Ohio Edison, 
OK Com, PJM, PSNM, and VEPCO comments.
---------------------------------------------------------------------------

    On the other hand, other commenters argued that such connections 
are important. ConEd argued that direct connections would help minimize 
the number of different connections customers must have. Continental 
Power Exchange sees direct connections as allowing third parties to 
provide services that will add valuable contributions to the successful 
operation of an OASIS. The How Group reported that discussions among 
the parties in the group indicated that direct connections would not be 
a problem as long as the Responsible Party is compensated for the 
additional service and given a reasonable time to make the connection.
    All commenters addressing the subject of who should pay for direct 
connections agreed that the cost should be paid by the requesting 
party.<SUP>98
---------------------------------------------------------------------------

    \98\ See APPA, CCEM, ConEd, Continental Power Exchange, How 
Group, and PJM comments.
---------------------------------------------------------------------------

    CCEM and OK Com agreed that the direct connections should be 
required to use the Internet tools required for the Internet 
connection.
    Finally, APPA asserted that, if private networks are created to 
provide direct connections that are operated by partners or affiliates 
of utilities, these networks could provide significant performance 
advantages for the Transmission Provider's merchant affiliates. APPA 
would require full public disclosure of such partnership or affiliate 
relationships by the service provider.
    We find that the How Group's position is reasonable. Direct 
connections are feasible if the provider is compensated for the 
additional service and is given a reasonable time to make the 
connection. We will, therefore, require direct connections in Phase I, 
upon request.
    Moreover, such connections must be made available on an equal basis 
to all requesting customers. We note, however, that to the extent that 
the Transmission Provider is not the Responsible Party, a direct 
connection is available only from the Responsible Party. This being the 
case, APPA's concern that the Transmission Provider's merchant services 
may gain an advantage from an affiliate with a direct connection or 
private network does not appear to be warranted, as anyone can obtain a 
direct connection or the services of a private network.
4. Value-Added OASIS Services Provided by Transmission Providers or 
Responsible Parties
    The Commission proposed in the RIN NOPR to permit Transmission 
Providers or Responsible Parties to provide value-added OASIS services, 
such as higher speed connections and automatic notification of changed 
data.
    NTEC argued that, unless these services are offered on a non-
discriminatory basis, public utilities could gain a competitive 
advantage by offering these services solely to affiliates. NTEC also 
requested the Commission to monitor the ``basic'' and ``premium'' 
service packages to ensure that customers need not pay a ``premium'' 
price to obtain basic services.
    TAPS argued against any offering of value-added services. They 
argued that smaller customers may not be able to afford such services 
and that price could be used to discriminate against them. TAPS 
proposed that instead of permitting value-added services, the 
Commission should include all OASIS costs in transmission rates.
    We agree with NTEC that value-added OASIS services should be 
offered on a non-discriminatory basis. If a value-added service is 
offered to anyone, it should be offered to everyone on the same terms 
and conditions. Regarding NTEC's concern over basic and premium 
services, we believe that the standards setting process will ensure 
that the basic package of OASIS services will provide all pertinent 
information and the means to retrieve it that are necessary for the 
functioning of the Open Access program.
    The Commission will allow these services on a non-discriminatory 
basis. Such services will remain cost-based until the Commission is 
satisfied that market-based (value added) rates should be allowed for 
such services. Requests for market-based rates for such services will 
be addressed on a case-by-case basis.
5. Transmission Services Information Timing Requirements (Question 37)
    In the NOPR, the Commission requested comments on several timing 
requirements for posting transmission service information. These are:
    (1) Transmission Service Information Availability: The most recent 
Provider transmission service information, including updates reflecting 
power system changes, shall be available to all Customers within 5 
minutes of its scheduled posting time at least 98 percent of the time. 
The remaining 2 percent of the time the transmission service 
information shall be available within 10 minutes of its scheduled 
posting time;
    (2) Notification of Posted or Changed Transmission Service 
Information: Notification of transmission service information posted or 
changed by a Provider shall be made available within 60 seconds to all 
subscribed Customers who are currently connected; and
    (3) Acknowledgment by the Transmission Service Information 
Provider: Acknowledgment by the transmission service information 
provider of the receipt of Customer purchase request/response requests 
shall occur within 1 minute for Phase I. The actual negotiations and 
agreements on purchase request/response requests do not have time 
constraints. For Phase II, acknowledgment shall occur within 30 
seconds.
    Most commenters supported the Commission's proposals as proposed 
<SUP>99 or with some modification.<SUP>100 CCEM asserted that the 
proposed requirements for updating transmission service information 
contained in Item (1) would lead to stale information, and would result 
in customers using the telephone and not the OASIS. CCEM asserted that 
the Phase I tolerances should be reduced to 30 seconds and one minute 
respectively.
---------------------------------------------------------------------------

    \99\ See, e.g., APPA, Duke, How Group, Florida Power Corp, NYPP, 
and OK Com comments.
    \100\ See CCEM, Com Ed, Continental Power Exchange, PSNM, and 
Western Group comments.
---------------------------------------------------------------------------

    Continental Power Exchange asserted that items (1) and (2) are good 
starting points. The Western Group suggested that Item (1) would be 
adequate if it can be accomplished automatically. Otherwise, it would 
recommend reducing the 98 percent compliance requirement to 85 percent.
    Some commenters agreed with the need for such standards, but 
opposed

[[Page 21758]]

incorporating timing performance standards in Phase I standards. VEPCO 
asserted that these standards are too ambitious for Phase I. 
Tallahassee argued that these timing requirements may be too 
restrictive for small utilities whose staff and technology capabilities 
will be strained by this rule. Central Hudson proposed that response 
times be determined after OASIS is implemented and users are 
comfortable with what they would expect as adequate performance.
    Most commenters agreed on the need for standards for how quickly 
providers should post transmission service information. Commenters 
argued that the requirements should be stricter, that they are too 
strict, or that they are just right.
    The Commission stated that information posting performance 
requirements are needed to ensure that information is disseminated in a 
timely manner by Transmission Providers. The comments do not persuade 
us to change the proposed requirements. We note that the April 15, 1996 
How Report drops these requirements. We request the How Group to 
reinstate these requirements in the report we are inviting them to file 
on or before May 28, 1996, or to explain why these requirements should 
be dropped.
    Commenters raise several additional points that need to be 
addressed. First, Com Ed and others argued that these requirements 
should not be in force during emergencies. The Commission agrees.
    Second, several commenters pointed out that the phrase ``available 
to all Customers'' contained in Item (1) is ambiguous and request that 
it should be replaced by ``available on the [OASIS].'' We agree.
    Third, some commenters suggested that transmission service requests 
and schedules be approved automatically, on a first come, first served 
basis. The industry does not generally do business in this manner 
today, and the Commission will not require it in Phase I. We request 
the industry to address this issue when developing requirements for 
Phase II.
6. Common Codes
a. Company Codes
    The Commission's experience with implementing standards for file 
transfers and electronic bulletin boards in the natural gas industry 
shows that the use of a common system of identifying companies enhances 
the efficiency of data transfers. The Commission is satisfied with the 
results of using DUNS numbers <SUP>101 as the standard to uniquely 
identify pipelines and shippers in the natural gas 
transactions.<SUP>102 The Commission proposed to require the use of 
DUNS numbers to identify transmission-owning utilities and customers on 
OASIS nodes.
---------------------------------------------------------------------------

    \101\ DUNS numbers refer to the Data Universal Numbering System, 
maintained by Dun and Bradstreet.
    \102\ See Standards for Electronic Bulletin Boards Required 
Under Part 284 of the Commission's Regulations, Docket No. RM93-4-
001, Order 563-A, FERC Stats. & Regs., Regulations Preambles, para. 
30,994 at 31,034 (1994).
---------------------------------------------------------------------------

    Most commenters believed that DUNS numbers alone or DUNS numbers in 
combination with names should be used.<SUP>103 The How Group asserted 
that using DUNS numbers will enhance the management of data from a 
computer perspective and allow flexibility of business applications of 
OASIS in the future. The How Group also asserted that having commonly 
used names is more user friendly and proposed that the list of names 
and DUNs numbers be maintained on a centralized registry.
---------------------------------------------------------------------------

    \103\ See, e.g., Allegheny, CCEM, Com Ed, Continental Power 
Exchange, How Group, OK Com, and PJM comments.
---------------------------------------------------------------------------

    Others believed that names alone would be sufficient.<SUP>104 NERC 
and Ohio Edison believed that such standardization should be left to 
the industry.
---------------------------------------------------------------------------

    \104\ See Seattle, VEPCO, and Western Group comments.
---------------------------------------------------------------------------

    APPA asserted that DUNS numbers are primarily for private companies 
and do not include many public power systems. Instead of using DUNS 
numbers, APPA recommended using a numbering system derived from Energy 
Information Administration forms: EIA-861 (``Annual Electric Utility 
Report'') and EIA-867 (``Annual Nonutility Power Producer Report'') as 
these forms appear to be the most all-encompassing existing numbering 
system that could be used for OASIS identification. Dun and Bradstreet 
have informed staff that they will assign DUNS numbers, free of charge, 
to any entity requesting a number.
    The Commission will require the DUNS numbers as the unique 
numerical identification of OASIS participants. The industry can 
proceed to develop a naming convention as suggested in the comments.
b. Common Location Codes
    The Commission's experience in the natural gas industry 
demonstrates that a common method of uniquely identifying location 
points will be needed to facilitate movement of power across the grid. 
The Commission proposed to use a system to identify locations and paths 
on the electric transmission grid.
    Nearly all commenters who discussed the issue argued that the 
Commission should not require common location codes.\105\ Several 
commenters argued that providing longitude and latitude information for 
power plants and substations raises serious national security 
issues.\106\
---------------------------------------------------------------------------

    \105\ See Allegheny, APPA, CCEM, Continental Power Exchange, 
Duke, How Group, ERCOT, Florida Power Corp, NERC, PJM, VEPCO, and 
Western Group comments.
    \106\ See How Group, FPC, and NERC comments.
---------------------------------------------------------------------------

    Many commenters see the need for a common naming convention for 
paths and other facilities, such as that currently under development by 
the How Working Group.\107\
---------------------------------------------------------------------------

    \107\ See How Group, PSNM, and Western Group comments.
---------------------------------------------------------------------------

    The Commission is persuaded to drop the requirement for a system 
for location codes and requests the industry to continue development of 
a common naming convention to be implemented as soon as practicable.
7. Data Definitions and File Formats Not Covered by the Revised How 
Report
a. Offers to Provide Ancillary Services Provided by an Entity Other 
Than the Transmission Provider (Question 11)
    In the RIN NOPR, the Commission requested the specifications needed 
to post this information in HTML displays and the formats needed to 
standardize uploadable and downloadable files containing this 
information. This final rule requires that information about ancillary 
services provided by an entity other than the Transmission Provider be 
posted on the OASIS by Responsible Parties and be displayed on the same 
page and in the same file format as that of the Transmission Provider.
    Although we did receive comments on this issue from various 
parties, this was not an issue resolved by the revised How Report. We 
would prefer that the How Group attempt to reach consensus on this 
issue before we impose our own solution. Therefore, we will include 
this issue among those that we are requesting further input on before 
we address this issue in the Standards and Protocols.
b. Offering of Primary and Secondary Capacity
    The Commission requested comments on how to redesign the download 
templates in Appendix C of the NOPR so that primary and secondary 
capacity can be offered through downloadable files that have the same 
format. The Commission also requested comments on how primary and 
secondary capacity

[[Page 21759]]

can be displayed in the same tables on an OASIS node. Posting secondary 
capacity requires more information than for primary capacity and, thus, 
using the same formats would require many more fields. We need 
information on the design of those fields before we can set standards 
for the display of this information.
    Although we did receive comments on this issue from various 
parties, this was not an issue resolved by the revised How Report. We 
would prefer that the How Group attempt to reach consensus on this 
issue before we impose our own solution. Therefore, we will include 
this issue among those that we are requesting further comment on before 
we address this issue in the Standards and Protocols.
8. Formats for Downloadable Files Not Covered in the How Report
a. Standard Format for Data Used in Calculating ATC (Question 16)
    The Commission requested comments on how the data used in 
calculating ATC should be formatted and asked whether the information 
should be in free form text, predefined tables, or comma delimited 
ASCII files. We also asked whether, if the information is in free form 
text, it should be in plain ASCII text or in a word processor format, 
such as WordPerfect or Word. We deal with both of these issues in 
section H(2)(f) of this final rule and in the regulations at 
Sec. 37.6(b)(2)(ii).
b. Standard Formats for Transmission Studies (Question 23)
    The Commission requested comments on how transmission studies 
should be formatted for download from the OASIS. We deal with this 
issue in section H(2)(g) of this final rule and in the regulations at 
Sec. 37.6(b)(2)(iii).
c. Standard Format for Electronic Submission to the Commission of 
Transmission Tariffs (Question 6)
    In the RIN NOPR, the Commission proposed requiring that 
Transmission Providers provide downloadable files of their complete 
tariffs on the OASIS.\108\ The Commission requested that commenters 
propose a standard format for electronic submission of transmission 
tariffs to the Commission.
---------------------------------------------------------------------------

    \108\ See RIN NOPR text at section III.C (60 FR at 66186) and 
the proposed regulation at 18 CFR 37.9(c)(1) (60 FR 66200).
---------------------------------------------------------------------------

    New formats continually are being developed by the computer 
industry and it would be worthwhile to address this issue again when 
the Commission addresses Phase II or remaining OASIS issues.
    We will require utilities to provide tariff downloads from their 
OASIS in the same format that they use to file with the Commission.
9. Communication Protocol Issues
a. Internet Browsers
    There are a large number of Internet browsers available 
commercially and in the public domain. The How Report proposed that 
browsers support ``at least'' HTML version 3 and ``optionally'' support 
Secure Sockets Layer. The HTML standards used by browsers change from 
time to time, and, in addition, various browsers can support different 
extensions to the standards. The Commission does not want to stifle 
innovation, but at the same time it does want uniformity on the OASIS. 
The Commission does not want customers to be forced to use different 
browsers for different OASIS nodes. The Commission wants to ensure that 
a customer will be able to choose a browser and use it to access all 
OASIS nodes.
    To this end, the Commission requested comments on how to ensure 
that a customer will be able to choose a browser and use it to access 
all OASIS nodes.
    Most commenters agreed that requiring browsers to support HTML 3 
would be sufficient to meet the needs of OASIS nodes and customers at 
this time.\109\
---------------------------------------------------------------------------

    \109\ See, e.g., Allegheny, APPA, CCEM, and How Group comments.
---------------------------------------------------------------------------

    CSW reported that while the specifications for HTML 3 are still in 
draft mode, it is the first version of HTML to support the table 
feature for browsing that the How Working Group wants to use. NYPP 
would add encryption capabilities to the list of standards. Ohio Edison 
would require JAVA-enabled browsers.\110\
---------------------------------------------------------------------------

    \110\ JAVA is a language that enables a browser to run programs 
embedded in a WWW page.
---------------------------------------------------------------------------

    OK Com recommended that the Commission adopt a primary browser and 
two alternative browsers for use on OASIS nodes. PJM asserted that, by 
requiring OASIS nodes to accommodate browsers in common use, OASIS 
nodes would be able to become more sophisticated as the Internet itself 
becomes more sophisticated.
    Com Ed, ConEd and PSNM would leave the standard to the How Group or 
an industry-wide OASIS Management Organization.
    Most commenters agreed with the How Report that, requiring OASIS 
nodes to support HTML 3 will allow browsers supporting this standard to 
view documents on the OASIS. The Commission will adopt the 
recommendation for HTML 3 contained in the How Report.
b. Bandwidth of Node Connections to the Internet
    At issue is the speed at which OASIS users will receive information 
from OASIS nodes. A major determinant of the speed are the bandwidth 
connections between the OASIS node and the Internet. The How Report 
proposed a formula to compute the required minimum bandwidth based on 
the number of registered users of the node and the number of bits per 
second to be received by users during HTML displays and downloads of 
files.\111\ These information transfers would include both the receipt 
of HTML displays and downloads of files. The How Report proposed to use 
a rate of 8,000 bits per second to determine bandwidth. In the RIN 
NOPR, the Commission noted that an 8,000 bit per second transfer rate 
is a much slower rate than the 28,800 bit per second transfer rate for 
telephone connections that many private individuals and customers use 
to connect to the Internet. The Commission expressed concern that using 
8,000 bit per second as the basis for the bandwidth calculation will 
lead to connections that are too slow and proposed to use 28,800 bits 
per second.
---------------------------------------------------------------------------

    \111\ How Report at Sec. 3.4.3.
---------------------------------------------------------------------------

    Many commenters agreed with the Commission.\112\ Com Ed reported 
that a T1 communications line (1.54 million bits per second) could 
support 500 simultaneous customers using the Commission's proposal of 
using 28,800 bits per second in the bandwidth formula. Com Ed concluded 
that it is unlikely that an OASIS node will experience 500 simultaneous 
users and that a T1 line is a reasonable upper limit, at this time. The 
How Group reported that its members are currently paying between $1,500 
and $3,000 per month for T1 connections and concludes that it may be 
cost effective to oversize the bandwidth even though a high bandwidth 
does not automatically translate into higher access speeds or download 
rates.
---------------------------------------------------------------------------

    \112\ See, e.g., Allegheny, APPA, CSW, OK Com, PJM, and Seattle 
comments.
---------------------------------------------------------------------------

    Several commenters preferred the 8,000 bits per second originally 
proposed by the How Group.\113\ Ohio Edison suggested that using a 
speed of 28,800 will dramatically increase costs and may make joint 
OASIS nodes less attractive. The How Group asserted that experience has 
shown that 8,000 bits per second is a reasonable average rate

[[Page 21760]]

for users of the Internet. VEPCO stated that, while many customers will 
initially use modems rated at 28,800 bits per second, their average 
data transfer rate will be lower due to a number of factors. 
Nevertheless, VEPCO asserted that an average of 8,000 bits per second 
is on the low end of acceptability, especially if large files are to be 
downloaded or if graphics files are to be viewed. Continental Power 
Exchange proposed that the 19,200 bits per second be used in the 
formula. It asserted that this is the fastest modem speed achievable 
with Microsoft's Windows 3.1.
---------------------------------------------------------------------------

    \113\ See ConEd, How Group, and Ohio Edison comments.
---------------------------------------------------------------------------

    APPA speculated that there may some areas in remote locations that 
cannot secure a connection to the Internet with adequate bandwidth to 
support the 28,800 bit per second standard.
    After considering the comments, the Commission continues to believe 
that 8,000 bits per second is too slow, especially when large files 
must be transferred and when information is needed promptly for 
business decisions. The Commission, therefore, will require that a rate 
of 28,800 bits per second be used in the minimum bandwidth calculation.
c. Data Compression Standards
    In the RIN NOPR, the Commission expressed agreement with the How 
Report that data compression will speed up the transmission of 
files.<SUP>114 We also expressed the belief that communication of OASIS 
information would be enhanced if every OASIS node used the same 
compression techniques. The Commission requested comments on what data 
compression technique or techniques should be made standard for all 
OASIS nodes.
---------------------------------------------------------------------------

    \114\ How Report Sec. 3.3.8(c).
---------------------------------------------------------------------------

    Most commenters recommended that the ``ZIP'' file compression 
standard be adopted as the common OASIS standard.<SUP>115 The How Group 
pointed out that the ZIP format is available for most computer 
platforms. Some commenters, however, suggested that setting a common 
compression technique is too detailed for a Commission 
rulemaking.<SUP>116
---------------------------------------------------------------------------

    \115\ See APPA, CCEM, ConEd, and PSNM comments.
    \116\ See NERC and Ohio Edison comments.
---------------------------------------------------------------------------

    Most commenters supported using the ``ZIP'' file compression 
standard on OASIS. This format is widely used for data communication 
and the necessary software is available for most computer platforms. 
The Commission will, therefore, require that the ZIP standard be the 
data compression standard on OASIS nodes. The Commission agrees that 
requiring compression for files created for each HTTP request may be 
too complex for Phase I. However, utilities may want to compress large 
files that would be infrequently updated, such as tariffs. These files 
will benefit from file compression and will not be subject to the 
complexities of compressing the dynamically created HTTP files. The 
Commission will require that static files residing on OASIS nodes be 
compressed.
d. Other Communication Protocol Issues Raised by Commenters
i. The Requirement to Use FTP for File Transfers
    The October 16, 1995 How Report recommended requiring OASIS nodes 
to use the Internet File Transfer Protocol (FTP) for file uploads and 
downloads. In its comments, the How Group recommended changing the file 
transfer method originally proposed in the How Report from the FTP to 
the HTTP for data access, including files upload and download to and 
from OASIS nodes. We will accept this recommendation.
ii. Field Size for Path Names
    The How Report proposed that path names be a 12-character 
alphanumeric string. The March 7, 1996 filing by its How Group 
recommends that the 12 characters be changed to 50 alphanumeric 
characters. Subsequent to the How Report, the How Group found that 12 
characters were insufficient to accommodate path names and the 
associated regional identifiers.
    We will await final recommendations concerning file formats before 
ruling on this issue.
iii. Files Containing More Than 100,000 Bytes
    The How Report recommended that customers not be required to 
download any single file that is larger than 100,000 bytes in order to 
access transmission information in electronic form. The implication is 
that all files larger than 100,000 bytes must be broken into sub-files.
    Detroit Edison argued that there is no easy way to download only a 
section of a file and that customers may prefer to download one large 
file rather than 20 small ones.
    We agree and will not require files to be broken into 100,000 byte 
segments at this time. In the event that a restriction on file size 
becomes needed, it can be addressed in Phase II.

K. Cost Recovery Issues

1. Costs of Developing and Running an OASIS (Question 34)
    Transmission-owning public utilities are entitled to recover the 
costs of developing and running an OASIS. Generally, these costs will 
be fixed costs not attributable to individual users. In the NOPR, the 
Commission proposed to include these costs in wholesale transmission 
rates. The Commission also proposed to allow costs that can be 
identified as varying with usage to be charged as usage fees to 
individual customers.
    The commenters were nearly evenly split between those favoring and 
opposing the Commission's proposals. NIEP argued that rolling-in OASIS 
costs would distribute costs among all transmission users equally and 
would be the only fair method of allocating the cost of an OASIS. NIEP 
concludes that, if costs were directly assigned to individual 
transmission users, these users would be penalized by forcing them to 
pay the cost of providing information which is available to, and used 
by, all transmission users.
    Many commenters objected to including OASIS costs in wholesale 
transmission rates. They argued that it is inappropriate to require 
network service customers (who may not participate in wholesale sales 
transactions) to absorb the cost of the OASIS. Indianapolis P&L claimed 
that it has no significant, unique transmission paths and uses its 
transmission assets to serve its native load customers. Consequently, 
most of its OASIS costs would be borne by its native load customers.
    Many commenters suggested alternatives to rolling in OASIS costs. 
ConEd argued that, if all OASIS costs were included in wholesale 
transmission rates, OASIS costs might not be fully recovered since 
transmission use varies. To remedy this, ConEd proposed rolling in part 
of the costs with the remainder to be recovered through a monthly 
access fee. MAPP suggested usage fees based on cost causation, such as 
time access charges, fixed fees for transmission requests and fees 
based on energy scheduled over transmission secured on the OASIS. NSP 
suggested a fee structure like other on-line information services, such 
as America On Line, CompuServe, and Prodigy.
    Several commenters saw other problems associated with utility 
recovery of OASIS costs. Some called attention to potential problems in 
recovering the costs of a joint OASIS. MAPP pointed out that a jointly

[[Page 21761]]

operated OASIS will not have composite transmission tariffs from which 
to recover costs and that a method was needed for utilities to recover 
joint expenses.
    Detroit Edison speculated that a large number of the general public 
could be connected to an OASIS at one time and thus limit OASIS access 
to transmission users. To prevent this problem, Detroit Edison proposed 
that fees be established to prevent misuse or overuse of an OASIS.
    It is appropriate that all wholesale transmission customers and all 
unbundled retail transmission customers should pay a share of OASIS 
development costs in their rates. Therefore, the Commission concludes 
that the cost of developing an OASIS should be included in unbundled 
transmission rates with variable costs of operating an OASIS to be 
recovered, to the extent possible, in usage fees. Individual rate 
proceedings will determine which OASIS costs can be identified as 
varying with usage and how to set the fees.
2. Costs of Posting Resales of Capacity on the OASIS (Question 40)
    The Commission proposed that resales of capacity be posted on the 
same page, and using the same display and downloadable tables, as 
capacity being sold by the Transmission Provider. This posting incurs 
an expense on the part of the Responsible Party. The Commission 
proposed that each reseller must, therefore, pay the costs of posting 
its own offering.
    Most commenters believed that those posting secondary services 
should pay the cost of posting. APPA proposed that the incremental cost 
of posting should be recovered as a special fee in the primary contract 
of transmission service. Ohio Edison proposed a fee for each posting 
with a ``true up'' mechanism to ensure that over time actual costs are 
recovered. Com Ed and WP&L suggested a fee that is a percentage of 
revenue received from the secondary postings.
    NEPOOL suggested that this expense is unlikely to be significant 
and, therefore, could be included in rates. NRECA and NCEMC warned that 
posting fees not be set so high as to discourage resale of capacity. OK 
Com argued that it would be inappropriate to charge resellers of 
transmission capacity for posting if the Transmission Provider is not 
also required to pay a fee for posting.
    After considering the comments, we have decided that there should 
be no added fee for posting capacity resales. All OASIS users, 
including the Transmission Provider, who post capacity pay all the 
fixed costs of OASIS in wholesale rates and pay usage-related variable 
costs in access fees. Thus, the costs of posting resale capacity are 
already recovered. To require resellers to pay additional fees for 
posting their products would provide OASIS operators with a cost 
advantage.
3. Costs of Posting Ancillary Services on the OASIS
    The Commission proposed that entities posting offers to provide 
ancillary services on the OASIS should pay the costs associated with 
posting this information and requested comments on how to determine 
these costs.
    Commenters proposed various fee schemes to recover these costs. 
Some were based on the cost of developing and maintaining posting 
services, others were based solely on the incremental cost of posting a 
notice. Some proposed to roll the costs into wholesale transmission 
rates. Others proposed that utilities be allowed make a profit from 
this service.
    Arizona proposed an incentive scheme to keep costs down, while 
Continental Power Exchange suggested that the method of calculating 
these costs be left to the industry. PJM proposed a fee based on the 
amount of person-hours and computer usage required by such posting. 
ConEd argued that utilities should be allowed to earn a profit on this 
service.
    CSW submitted that posting costs cannot be broken out individually 
and proposed that the costs for an OASIS should be borne by all market 
participants on a fair basis. Florida Power Corp argued that an OASIS 
is not a newspaper, and that Transmission Providers are not in the 
publishing business; therefore, OASIS services, including the posting 
of ancillary services, should not be sold like classified ads. It 
proposed that the cost of operating an OASIS should be rolled into 
wholesale transmission rates. VEPCO also suggested that the cost of 
posting ancillary services should be included in the cost of the OASIS, 
with costs of specific evaluations of ancillary service offers to be 
determined and posted on the OASIS.
    After assessing the comments, we find that the cost of developing 
the facilities needed to post ancillary services required to be 
provided by the Open Access Final Rule should be recovered through 
unbundled transmission rates. Any variable costs of posting these 
services will be included in the general OASIS usage fees. As for those 
ancillary services not required to be provided,<SUP>117 OASIS operators 
may charge a cost based fee to those offering these services for the 
cost of posting.
---------------------------------------------------------------------------

    \117\ See Open Access Final Rule generally at section IV.D.
---------------------------------------------------------------------------

L. Section 37.8--Implementation in Phases

1. Phase I Implementation
    Implementation of this rule and the initial standards and protocols 
will ensure that sufficient information is available to transmission 
customers to achieve comparable access to transmission information. 
They do not, however, provide all the desired performance requirements.
    Because of the complexity of developing an OASIS, and the need to 
begin the transmission open access program promptly, the Commission 
proposed a phased approach to OASIS implementation. We proposed to 
require implementation of a Phase I OASIS as of the effective date of 
the final rule on non-discriminatory open access transmission and 
stranded costs (i.e., 60 days from publication of this order in the 
Federal Register).
Comments
    Many commenters argued that the proposed 60-day implementation 
period is unrealistic in light of the amount of work that must be done. 
ERCOT suggested that only portions of the Phase I implementation could 
be accomplished within the 60-day period. A vast majority of commenters 
suggested that an implementation period of six months would be 
required.
    Arizona and ConEd pointed out that, while plans for implementation 
can begin in advance of the final rule, final specifications and 
designs depend on the resolution of several major Open Access Final 
Rule issues. ConEd also argued that all new systems require a ``Beta'' 
test stage in which the system can be tested before it is used in a 
production environment, and that a 60-day implementation period will 
not permit such testing. Similarly, NERC argued that more time is 
needed to make sure workable administrative procedures are in place for 
consistency in calculating, posting, and coordinating ATC. NEPOOL 
echoed these comments, reporting that an implementation period of less 
than six months would result in the development of OASIS nodes across 
the nation that lack uniformity as each region complies within a short 
deadline without time to coordinate with other areas.
    Duke argued that a full six months will be needed because, in 
addition to

[[Page 21762]]

the difficult task of implementing OASIS, the Open Access Final Rule 
will change the way the industry does business. Duke argued that the 
coordination of resources necessary to accommodate all of the 
discussions and decisions in developing joint OASIS nodes is a more 
lengthy process than development of an OASIS by each individual 
company. Duke asserted that a six-month implementation period is needed 
to permit joint OASIS projects to develop. <SUP>118
---------------------------------------------------------------------------

    \118\ NERC made this same point in its comments.
---------------------------------------------------------------------------

    SoCal Edison requested that the Commission delay implementation 
until the requirements of the CA Com's California Restructuring Order 
have been fully identified. Public Generating Pool argued that the 
Northwest governors have organized a review of the Northwest Power Act, 
the Bonneville Power Act, and the northwest electric system in general, 
to be completed by November 1996. Public Generating Pool argued that 
the Commission should consider possible contributions to be made by 
this forthcoming report and urged that the Commission not ignore this 
work based on a need to meet self-imposed unreasonable and unrealistic 
OASIS implementation dates.
    The How Group, the Western Group and VEPCO suggested that, if the 
Commission cannot extend the implementation period to six months, then 
Phase I should itself be implemented in stages. The How Group suggested 
a three-stage process that would begin with a requirement for primary 
providers, within 120 days after issuance of the final rule, to post 
estimates of ATC and secondary capacity for resale that might not be 
accurate. This would be followed, within 180 days after issuance of the 
final rule, by the posting of fully accurate secondary capacity 
information and ATC information, and with Transmission Providers 
certifying, within 210 days of the final rule, that all functionality 
and performance requirements for OASIS have been met.
    ConEd and Carolina P&L noted that OASIS implementation will cause 
changes to utility operations, and requested that the Commission 
schedule implementation during off-peak seasons, such as the spring or 
fall, when they claim transmission systems are under less stress.
    Public Generating Pool and Tallahassee speculated that, if 
publicly-owned utilities are considered to be under the Commission's 
jurisdiction for OASIS purposes, they will need more than a six-month 
implementation period because they may be required to obtain funding 
approval from state or local oversight commissions.
Discussion
    Commenters make persuasive arguments for permitting a six-month 
implementation period. They raise concerns that a shorter period will 
not permit adequate time to design, build and thoroughly test an OASIS. 
They also raise concerns that a shorter period will inhibit the 
development of joint OASIS and OASIS with a common look and feel. The 
Commission shares these concerns. We also want to take into account 
commenters' requests that implementation not be required during the 
peak winter or summer months. For this reason, we are requiring 
compliance by November 1, 1996, a specific date about six months from 
when we expect this final rule to become effective, chosen to avoid the 
winter and summer peak months. This date is provided in Sec. 37.8 of 
the final rule, which modifies the provision originally set out in 
Sec. 37.15 of the RIN NOPR.
    In addition, we will provide additional procedures to allow the 
development of the remaining initial standards and protocols. As 
described above, we invite the How Group to report to us on or before 
May 28, 1996 on these issues (and to attach any comments it has 
received from any interested person with opposing views).
    For these reasons, the Commission will require implementation of 
Phase I of OASIS to be operational by November 1, 1996.
2. Phase II Implementation
    Once Phase I becomes operational, and the industry and public gain 
experience with it, the full information and functional requirements 
needed to support open access transmission service will become clearer. 
In the RIN NOPR, the Commission stated that it envisioned that Phase II 
would build on Phase I and requested that the industry continue the 
process of developing standards, and provide a consensus report to the 
Commission on Phase II recommendations by January 1, 1997.
    Most commenters argued that the proposed January 1997 date is too 
ambitious. Southern argued that this date does not provide enough time 
for the industry to gain experience with Phase I. Tallahassee and 
others suggested that Phase II should not be implemented until at least 
one year after Phase I is implemented. Continental Power Exchange 
asserted that Phase II will be a continuum of development from the 
first day of Phase I implementation. NRECA suggested that, if Phase I 
turns out to be inadequate, then Phase II should be accelerated.
    We are sensitive to commenters' concerns about the time between the 
implementation of Phase I and Phase II. At the same time, the need for 
the additional functions and performance requirements proposed for 
Phase II will, we believe, need to be implemented quickly. Accordingly, 
the industry should continue the process of developing standards, and 
attempt to develop a consensus report on Phase II recommendations by no 
later than seven months after implementation of Phase I June 4, 1997. 
We anticipate that this report would be the basis for supplemental 
OASIS proceedings to Phase II OASIS requirements. The additional time 
should permit the industry to obtain sufficient experience with Phase I 
before it recommends specifications for Phase II.
    We believe that it may be appropriate to require the scheduling of 
energy transfers on the OASIS in Phase II. Electronic scheduling of 
energy transfers over the OASIS would increase efficiency. We, 
therefore, request that the industry incorporate standards for the 
scheduling of energy transfers on OASIS into the Phase II report.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) <SUP>119 requires the 
Commission to describe the impact that any proposed or final rule would 
have on small entities or to certify that the rule, if promulgated, 
will not have a significant economic impact on a substantial number of 
small entities. The entities that would have to comply with the final 
rule are public utilities and transmitting utilities that do not fall 
within the RFA's definition of small entities.<SUP>120 Therefore, under 
section 605(b) of the RFA, the Commission hereby certifies that this 
final rule will not have a significant economic impact on small 
entities within the meaning of the RFA. Accordingly, no regulatory

[[Page 21763]]

flexibility analysis is required pursuant to section 603 of the RFA.
---------------------------------------------------------------------------

    \119\ 5 U.S.C. Secs. 601-612.
    \120\ 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). In addition, 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, issued contemporaneously with 
this final rule, we conclude that, under these definitions, the Open 
Access Final Rule would not have a significant economic impact on a 
significant number of small entities. As this final rule only 
implements the OASIS requirements of the Open Access Final Rule, the 
same conclusion is warranted here, for the same reasons.
---------------------------------------------------------------------------

    In its comments, NRECA questioned the Commission's conclusion that 
the RIN NOPR did not need to be accompanied by an RFA analysis. NRECA's 
argument was based on its concern that the Commission might extend 
OASIS requirements to non-public, not-for-profit cooperative utilities. 
NRECA argued that, if this were to happen, the Commission would then 
have to analyze the effect of the OASIS requirements on these utilities 
and show that the requirements would not have a substantial economic 
impact upon them. However, as proposed in the RIN NOPR, the 
Commission's OASIS regulations will apply only to public utilities that 
own, operate, or control transmission facilities subject to the 
Commission's jurisdiction. As noted immediately above, public utilities 
do not fall within the RFA's definition of a ``small entity.'' In 
addition, as discussed earlier, and as discussed in the Open Access 
Final Rule, there will be a provision for a waiver for small entities. 
This responds to NRECA's concerns.

V. Environmental Statement

    Commission regulations require that an environmental assessment or 
an environmental impact statement be prepared for a Commission action 
that may have a significant effect on the human environment. <SUP>121 
Although this final rule does not directly affect any physical 
transmission facilities, but merely requires the electronic posting by 
computers of certain information about transmission availability and 
prices, it nevertheless is covered by 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. Thus, no separate 
environmental assessment or environmental impact statement has been 
prepared in this proceeding.
---------------------------------------------------------------------------

    \121\ Regulations Implementing National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987); 1986-90 Regulations 
Preambles, FERC Stats. & Regs. para.30,783 (Dec. 10, 1987) (codified 
at 18 CFR Part 380).
---------------------------------------------------------------------------

VI. Information Collection Statement

    There are now approximately 328 public utilities, including 
marketers and wholesale generation entities. The Commission estimates 
that approximately 166 of these utilities own, operate, or control 
facilities used for the transmission of electric energy in interstate 
commerce and thus are subject to this rule. However, since the 
operation of an OASIS will be closely associated with control areas, we 
assume that an OASIS will be developed at the control area level and 
not by each public utility that owns, operates, or controls interstate 
transmission facilities. We also expect that some additional OASIS 
nodes will be created voluntarily by non-public utilities subject to 
these regulations under the reciprocity condition of the pro forma 
tariffs. We estimate, therefore, that 140 respondents will be required 
to collect information. We believe that this estimate is conservative 
(on the high side) because some regions are likely to develop a region-
wide OASIS that will cover more than one control area. <SUP>122
---------------------------------------------------------------------------

    \122\ See supra (discussion quoted from How Report at 80).
---------------------------------------------------------------------------

    This estimate is higher than the one we included in the RIN NOPR, 
where we estimated that there would be 84 respondents. We have adjusted 
our estimate in response to the arguments advanced by NRECA and NE 
Public Power District, in separate letters to OMB, that the 
Commission's Information Collection Statement contained in the RIN NOPR 
failed to account for the proposal in the Open Access NOPR that, 
because of the reciprocity requirement, non-public utilities and 
cooperatives entering contracts for open access transmission services 
would be required to establish their own OASIS nodes or participate in 
a regional OASIS node.
    NRECA also argued that the Commission's analysis must include not 
only those entities that are developing their own OASIS node, but also 
those entities who, while they are not developing and operating their 
own OASIS node, nevertheless will contribute data to their control area 
operators or regional OASIS operators. NRECA argued, therefore, that 
the Commission's estimate of the number of respondents should have 
taken this into account. It did.
    Although not explicitly stated in the RIN NOPR, the Commission's 
Information Collection Statement, both in this final rule and in the 
RIN NOPR, has been based not only on the efforts by the respondents who 
will directly operate OASIS nodes but also reflects the collection of 
information from all significant participants in the transmission 
market.

Information Collection Statement

    Title: FERC-717, Real-Time Information Network Standards.
    Action: Final Rule
    OMB Control No: 1902-0173.
    Respondents: Public Utilities that own and/or control facilities 
used for the transmission of electric energy in interstate commerce.
    Frequency of Responses: On Occasion
    Necessity of the information: The final rule requires affected 
public utilities to comply with requirements for an Open Access Same-
time Information System (OASIS) established by the Commission to give 
potential customers access to information, by electronic means, that 
would ensure the availability of open access wholesale transmission 
service on a non-discriminatory basis. These requirements would support 
arrangements made for wholesale sales and purchases for third parties. 
Public utilities or their agents will be required to give competitors 
and other users of the transmission system access to the same 
information available to public utility personnel who initiate the 
acquisition or disposition of power in the wholesale market and at the 
same time. The Commission will use the information to monitor the 
networks to ensure that potential purchasers of transmission services 
obtain the services on a non-discriminatory basis. This final rule was 
developed after a review of comments filed in response to issuance of a 
notice of public rulemaking.
    The Office of Management and Budget's (OMB) regulations, <SUP>123 
require OMB to approve certain information collection requirements 
imposed by agency rule. The information collection requirements in the 
final rule will be reported directly to transmission users and will be 
subject to subsequent audit by the Commission. The distribution of 
these data will help the Commission carry out its responsibilities 
under Part II of the FPA.
---------------------------------------------------------------------------

    \123\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    The Commission is submitting notification of this final rule to 
OMB. 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 to the 
Office of Management and Budget [Attention: Desk Officer for the 
Federal Energy Regulatory Commission (202) 395-3087].

VII. Effective Date

    The regulations of new part 37 will become effective on July 9, 
1996. The Commission has determined, with the concurrence of the 
Administrator of the Office of Information and Regulatory Affairs of 
OMB, that the Open Access Final Rule and the OASIS final rule together 
constitute a ``major rule'' as

[[Page 21764]]

defined in section 351 of the Small Business Regulatory Enforcement Act 
of 1996.<SUP>124 The rule will be submitted to both Houses of Congress 
and the Comptroller General prior to its publication in the Federal 
Register. All of the requirements prescribed in the standards of 
conduct must be complied with and Phase I OASIS sites that meet the 
requirements prescribed in this final rule must be in operation by 
November 1, 1996.
---------------------------------------------------------------------------

    \124\ 5 U.S.C. Sec. 804(2).
---------------------------------------------------------------------------

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 chapter I 
of title 18, Code of Federal Regulations, to add a new part 37, as set 
forth below:

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

Sec.
37.1  Applicability.
37.2  Purpose.
37.3  Definitions.
37.4  Standards of conduct.
37.5  Obligations of Transmission Providers and Responsible Parties.
37.6  Information to be posted on an OASIS.
37.7  Auditing Transmission Service Information.
37.8  Implementation schedule for OASIS requirements; phases.

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


Sec. 37.1  Applicability.

    This part applies to any public utility that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce and to transactions performed under the pro forma 
tariff required in part 35 of this chapter.


Sec. 37.2  Purpose.

    (a) The purpose of this part is to ensure that potential customers 
of open access transmission service receive access to information that 
will enable them to obtain transmission service on a non-discriminatory 
basis from any Transmission Provider. These rules provide standards of 
conduct and require the Transmission Provider (or its agent) to create 
and operate an Open Access Same-time Information System (OASIS) that 
gives all users of the open access transmission system access to the 
same information.
    (b) The OASIS will provide information by electronic means about 
available transmission capability for point-to-point service and will 
provide a process for requesting transmission service. OASIS will 
enable Transmission Providers and Transmission Customers to communicate 
promptly requests and responses to buy and sell available transmission 
capacity offered under the Transmission Provider's tariff.


Sec. 37.3  Definitions.

    (a) Transmission Provider means any public utility that owns, 
operates, or controls facilities used for the transmission of electric 
energy in interstate commerce.
    (b) Transmission Customer means any eligible customer (or its 
designated agent) that can or does execute a transmission service 
agreement or can or does receive transmission service.
    (c) Responsible party means the Transmission Provider or an agent 
to whom the Transmission Provider has delegated the responsibility of 
meeting any of the requirements of this part.
    (d) Reseller means any Transmission Customer who offers to sell 
transmission capacity it has purchased.
    (e) Wholesale merchant function means the sale for resale, or 
purchase for resale, of electric energy in interstate commerce.
    (f) Affiliate means:
    (1) For any exempt wholesale generator, as defined under section 
32(a) of the Public Utility Holding Company Act of 1935, as amended, 
the same as provided in section 214 of the Federal Power Act; and
    (2) For any other entity, the term affiliate has the same meaning 
as given in Sec. 161.2(a) of this chapter.


Sec. 37.4  Standards of conduct.

    A Transmission Provider must conduct its business to conform with 
the following standards:
    (a) General rules. (1) Except as provided in paragraph (a)(2) of 
this section, the employees of the Transmission Provider engaged in 
transmission system operations must function independently of its 
employees, or the employees of any of its affiliates, who engage in 
Wholesale Merchant Functions.
    (2) Notwithstanding any other provisions in this section, in 
emergency circumstances affecting system reliability, Transmission 
Providers may take whatever steps are necessary to keep the system in 
operation. Transmission Providers must report to the Commission and on 
the OASIS each emergency that resulted in any deviation from the 
standards of conduct, within 24 hours of such deviation.
    (b) Rules governing employee conduct. (1) Prohibitions. Any 
employee of the Transmission Provider, or any employee of an affiliate, 
engaged in wholesale merchant functions is prohibited from:
    (i) Conducting transmission system operations or reliability 
functions; and
    (ii) Having access to the system control center or similar 
facilities used for transmission operations or reliability functions 
that differs in any way from the access available to other open access 
Transmission Customers.
    (2) Transfers. Employees engaged in either wholesale merchant 
functions or transmission system operations or reliability functions 
are not precluded from transferring between such functions as long as 
such transfer is not used as a means to circumvent the standards of 
conduct of this section. Notices of any employee transfer to or from 
transmission system operations or reliability functions must be posted 
on the OASIS as provided in Sec. 37.6(g)(3). The information to be 
posted must include: the name of the transferring employee, the 
respective titles held while performing each function (i.e., on behalf 
of the Transmission Provider and wholesale merchant or affiliate), and 
the effective date of the transfer. The information posted under this 
section must remain on the OASIS for 90 days.
    (3) Information access. Any employee of the Transmission Provider, 
or of any of its affiliates, engaged in wholesale merchant functions:
    (i) Shall have access to only that information available to the 
Transmission Provider's open access transmission customers (i.e., the 
information posted on an OASIS), and must not have preferential access 
to any information about the Transmission Provider's transmission 
system that is not available to all users of an OASIS; and
    (ii) Is prohibited from obtaining information about the 
Transmission Provider's transmission system (including information 
about available transmission capability, price, curtailments, ancillary 
services, and the like) through access to information not posted on the 
OASIS that is not otherwise also available to the general public 
without restriction, or through information through the OASIS that is 
not also publicly available to all OASIS users.
    (4) Disclosure. A Transmission Provider is responsible for ensuring 
compliance with the following provisions:

[[Page 21765]]

    (i) Any employee of the Transmission Provider, or any employee of 
an affiliate, engaged in transmission system operations or reliability 
functions may not disclose to employees of the Transmission Provider, 
or any of its affiliates, engaged in wholesale merchant functions any 
information concerning the transmission system of the Transmission 
Provider or the transmission system of another (including information 
received from non-affiliates or information about available 
transmission capability, price, curtailments, ancillary services, etc.) 
through non-public communications conducted off the OASIS, through 
access to information not posted on the OASIS that is not at the same 
time available to the general public without restriction, or through 
information on the OASIS that is not at the same time publicly 
available to all OASIS users (such as E-mail).
    (ii) If an employee of the Transmission Provider engaged in 
transmission system operations or reliability functions discloses 
information not posted on the OASIS in a manner contrary to the 
requirements of the standards of conduct, the Transmission Provider 
must immediately post such information on the OASIS.
    (iii) A Transmission Provider may not share any market information, 
acquired from nonaffiliated Transmission Customers or potential 
nonaffiliated Transmission Customers, or developed in the course of 
responding to requests for transmission or ancillary service on the 
OASIS, with its own employees (or those of an affiliate) engaged in 
merchant functions, except to the limited extent information is 
required to be posted on the OASIS in response to a request for 
transmission service or ancillary services.
    (5) Implementing tariffs. (i) Employees of the Transmission 
Provider engaged in transmission system operations or reliability 
functions must strictly enforce all tariff provisions relating to the 
sale or purchase of open access transmission service, if these 
provisions do not provide for the use of discretion.
    (ii) Employees of the Transmission Provider engaged in transmission 
system operations must apply all tariff provisions relating to the sale 
or purchase of open access transmission service in a fair and impartial 
manner that treats all customers (including the public utility and any 
affiliate) in a non-discriminatory manner, if these provisions involve 
discretion.
    (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.
    (iv) The Transmission Provider may not, through its tariffs or 
otherwise, give preference to wholesale purchases or sales made on 
behalf of its own power customers, or those of an 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.).
    (v) If the Transmission Provider offers a discount on purchases of 
transmission service made on behalf of its own power customers or those 
of any affiliate, then, at the same time, it must 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.
    (vi) If the Transmission Provider offers a rate discount on 
ancillary services to an affiliate, or attributes a discounted 
ancillary service rate to its own transactions, the Transmission 
Provider must, at the same time, post on the OASIS an offer to provide 
the same discount to all eligible customers.
    (6) Books and records. A Transmission Provider must maintain its 
books of account and records (as prescribed under parts 101 and 125 of 
this chapter) separately from those of its affiliates and these must be 
available for Commission inspection.
    (c) Maintenance of written procedures. The Transmission Provider 
must maintain in a public place, and file with the Commission, current 
written procedures implementing the standards of conduct in such detail 
as will enable customers and the Commission to determine that the 
Transmission Provider is in compliance with the requirements of this 
section.


Sec. 37.5  Obligations of Transmission Providers and Responsible 
Parties.

    (a) Each Transmission Provider is required to provide for the 
operation of an OASIS, either individually or jointly with other 
Transmission Providers, in accordance with the requirements of this 
Part. The Transmission Provider may delegate this responsibility to a 
Responsible Party such as another Transmission Provider, an Independent 
System Operator, a Regional Transmission Group, or a Regional 
Reliability Council.
    (b) A Responsible Party must:
    (1) Provide access to an OASIS providing standardized information 
relevant to the availability of transmission capacity, prices, and 
other information (as described in this part) pertaining to the 
transmission system for which it is responsible; and
    (2) Shall operate the OASIS in compliance with the standardized 
procedures and protocols found in OASIS Standards and Communication 
Protocols, which can be obtained from the Public Reference and Files 
Maintenance Branch, Room 2A, Federal Energy Regulatory Commission, 888 
First Street NE., Washington, DC 20426.
    (c) Transmission Providers must provide ``read only'' access to the 
OASIS to Commission staff and the staffs of State regulatory 
authorities, at no cost, after such staff members have complied with 
the requisite registration procedures.


Sec. 37.6  Information to be posted on an OASIS.

    (a) The information posted on the OASIS must be in such detail as 
to allow Transmission Customers to:
    (1) Make requests for transmission services offered by Transmission 
Providers, Resellers and other providers of ancillary services;
    (2) View and download in standard formats, using standard 
protocols, information regarding the transmission system necessary to 
enable prudent business decision making;
    (3) Post, view, upload and download information regarding available 
products and desired services;
    (4) Clearly identify the degree to which their transmission service 
requests or schedules were denied or interrupted; and
    (5) Obtain access, in electronic format, to information to support 
available transmission capability calculations and historical 
transmission service requests and schedules for various audit purposes.
    (b) Posting transmission capability. The transmission capability 
that is expected to be available on the Transmission Provider's system 
(ATC) and the total transmission capability (TTC) of that system shall 
be calculated and posted for each Posted Path as set out in this 
section.
    (1) Definitions. For purposes of this section the terms listed 
below have the following meanings:
    (i) Posted path means any control area to control area 
interconnection; any path for which service is denied, curtailed or 
interrupted for more than 24 hours in the past 12 months; and any path 
for which a customer requests to have ATC or TTC posted. For this last 
category, the posting must continue for 180 days and thereafter until 
180 days have elapsed from the most recent request for service over the 
requested path. For purposes of this definition, an

[[Page 21766]]

hour includes any part of an hour during which service was denied, 
curtailed or interrupted.
    (ii) Constrained posted path means any posted path having an ATC 
less than or equal to 25 percent of TTC at any time during the 
preceding 168 hours or for which ATC has been calculated to be less 
than or equal to 25 percent of TTC for any period during the current 
hour or the next 168 hours.
    (iii) Unconstrained posted path means any posted path not 
determined to be a constrained posted path.
    (2) Calculation methods, availability of information, and requests. 
(i) Information used to calculate any posting of ATC and TTC must be 
dated and time-stamped and all calculations shall be performed 
according to consistently applied methodologies referenced in the 
Transmission Provider's transmission tariff and shall be based on 
current industry practices, standards and criteria.
    (ii) On request, the Responsible Party must make all data used to 
calculate ATC and TTC for any constrained posted paths publicly 
available (including the limiting element(s) and the cause of the limit 
(e.g., thermal, voltage, stability)) in electronic form within one week 
of the posting. The information is required to be provided only in the 
electronic format in which it was created, along with any necessary 
decoding instructions, at a cost limited to the cost of reproducing the 
material. This information is to be retained for six months after the 
applicable posting period.
    (iii) System planning studies or specific network impact studies 
performed for customers to determine network impacts are to be made 
publicly available in electronic form on request and a list of such 
studies shall be posted on the OASIS. A study is required to be 
provided only in the electronic format in which it was created, along 
with any necessary decoding instructions, at a cost limited to the cost 
of reproducing the material. These studies are to be retained for two 
years.
    (3) Posting. The ATC and TTC for all Posted Paths must be posted in 
megawatts by specific direction and in the manner prescribed in this 
subsection.
    (i) Constrained posted paths--(A) For Firm ATC and TTC. (1) The 
posting shall show ATC and TTC for a 30-day period. For this period 
postings shall be: by the hour, for the current hour and the 168 hours 
next following; and thereafter, by the day. If the Transmission 
Provider charges separately for on-peak and off-peak periods in its 
tariff, ATC and TTC will be posted daily for each period.
    (2) Postings shall also be made by the month, showing for the 
current month and the 12 months next following.
    (3) If planning and specific requested transmission studies have 
been done, seasonal capability shall be posted for the year following 
the current year and for each year following to the end of the planning 
horizon but not to exceed 10 years.
    (B) For Non-Firm ATC and TTC. The posting shall show ATC and TTC 
for a 30-day period by the hour and days prescribed under paragraph 
(b)(3)(i)(A)(1) of this section and, if so requested, by the month and 
year as prescribed under paragraph (b)(3)(i)(A) (2) and (3) of this 
section.
    (C) Updating Posted Information for Constrained Paths.
    (1) The capability posted under paragraphs (b)(3)(i) (A) and (B) of 
this section must be updated when transactions are reserved or service 
ends or whenever the TTC estimate for the Path changes by more than 10 
percent.
    (2) All updating of hourly information shall be made on the hour.
    (ii) Unconstrained Posted Paths. (A) Postings of ATC and TTC shall 
be 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 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.
    (B) If planning and specific requested transmission studies have 
been done, seasonal capability shall be posted for the year following 
the current year and for each year following until the end of the 
planning horizon but not to exceed 10 years.
    (c) Posting Transmission Service Products and Prices. (1) 
Transmission Providers must post prices and a summary of the terms and 
conditions associated with all transmission products offered to 
Transmission Customers.
    (2) Transmission Providers must provide a downloadable file of 
their complete tariffs in the same electronic format as the tariff that 
is filed with the Commission.
    (3) A Transmission Provider, within 24 hours of agreeing to sell 
transmission service to a non-affiliate at a discount (as measured from 
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, 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. With respect 
to any discount offered to its own power customers or its affiliates, 
the Transmission Provider 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.
    (4) 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 
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 the ``Sale or Assignment of Transmission Service'' 
section of the pro forma tariff.
    (d) Posting Ancillary Service Offerings and Prices. (1) Any 
ancillary service required to be provided or offered under the pro 
forma tariff prescribed by part 35 of this chapter must be posted with 
the price of that service.
    (2) A Transmission Provider, within 24 hours of agreeing to sell an 
ancillary service to a non-affiliate at a discount, must post on the 
OASIS (and make available for download) information describing the 
transaction (including price, quantity, 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. As to 
discounts for ancillary services, if a Transmission Provider offers a 
rate discount to an affiliate, or attributes a discounted ancillary 
service rate to its own transactions, the Transmission Provider must, 
at the same time, post on the OASIS an offer to provide the same 
discount to all eligible customers.
    (3) Any other interconnected operations service offered by the 
Transmission Provider may be posted, with the price for that service.

[[Page 21767]]

    (4) 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 Service Requests and Responses.
    (1) General rules. (i) All requests for transmission service 
offered by Transmission Providers under the pro forma tariff must be 
made on the OASIS. Requests for transmission 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) In processing a request for transmission or ancillary service, 
the Responsible Party shall post 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).
    (iii) The identity of the parties will be masked--if requested--
during the negotiating period and for 30 days from the date when the 
request was accepted, denied or withdrawn.
    (2) Posting when a request for transmission service is denied. (i) 
When a request for service is denied, the Responsible Party must 
provide the reason for that denial as part of any response to the 
request.
    (ii) Information to support the reason for the denial, including 
the operating status of relevant facilities, must be maintained for 60 
days and provided, upon request, to the potential Transmission 
Customer.
    (iii) Any offer to adjust operation of the Transmission Provider's 
System to accommodate the denied request must be posted and made 
available to all Transmission Customers at the same time.
    (3) Posting when a transaction is curtailed or interrupted.
    (i) When any transaction is curtailed or interrupted, the 
curtailment or interruption must be posted (with the identities of the 
parties masked as required in Sec. 37.6(e)(1)(iii)) and must state the 
reason why the transaction could not be continued or completed.
    (ii) Information to support any such curtailment or interruption, 
including the operating status of the facilities involved in the 
constraint or interruption, must be maintained for 60 days and 
provided, upon request, to the curtailed or interrupted customer.
    (iii) Any offer to adjust the operation of the Transmission 
Provider's system to restore a curtailed or interrupted transaction 
must be posted and made available to all curtailed and interrupted 
Transmission Customers at the same time.
    (f) Posting Transmission Service Schedules Information. Information 
on transmission service schedules must be recorded by the entity 
scheduling the transmission service and must be available on the OASIS 
for download. Transmission service schedules must be posted no later 
than seven calendar days from the start of the transmission service.
    (g) Posting Other Transmission-Related Communications. (1) The 
posting of other communications related to transmission services must 
be provided for by the Responsible Party. These communications may 
include ``want ads'' and ``other communications'' (such as using the 
OASIS as a Transmission-related conference space or to provide 
transmission-related messaging services between OASIS users). Such 
postings carry no obligation to respond on the part of any market 
participant.
    (2) The Responsible Party is responsible for posting other 
transmission-related communications in conformance with the 
instructions provided by the third party on whose behalf the 
communication is posted. It is the responsibility of the third party 
requesting such a posting to ensure the accuracy of the information to 
be posted.
    (3) Notices of transfers of personnel shall be posted as described 
in Sec. 37.4(b)(2).


Sec. 37.7  Auditing Transmission Service Information.

    (a) All OASIS database transactions, except other transmission-
related communications provided for under Sec. 37.6(g)(2), must be 
stored, dated, and time stamped.
    (b) Audit data must remain available for download on the OASIS for 
90 days. The audit data are to be retained and made available upon 
request for three years from the date when they are first posted.


Sec. 37.8  Implementation schedule for OASIS requirements; phases.

    Each Transmission Provider must develop or participate in an OASIS 
that meets the requirements of this part and that is in operation by 
November 1, 1996. Each Transmission Provider must be in compliance with 
the standards of conduct prescribed in Sec. 37.4 by November 1, 1996.


                                       [Note: This attachment will not appear in the Code of Federal Regulations.]                                      
                                                      Attachment 1.--List of Commenters to RIN NOPR                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Number                                     Commenter name                                            Abbreviation                       
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.....................................  ABB Systems Control.................................  (ABB)                                                     
2.....................................  Allegheny Power Service Corporation.................  (Allegheny)                                               
3.....................................  American Electric Power.............................  (AEP)                                                     
4.....................................  American Public Power Association...................  (APPA)                                                    
5.....................................  City of Anaheim, CA.................................  (Anaheim)                                                 
6.....................................  Arizona Public Service Company......................  (Arizona)                                                 
7.....................................  Bangor Hydro-Electric Company.......................  (Bangor)                                                  
8.....................................  Basin Electric Power Cooperative....................  (Basin EC)                                                
9.....................................  Bonneville Power Administration.....................  (BPA)                                                     
10....................................  California PUC......................................  (CA Com)                                                  
11....................................  Carolina Power & Light Company......................  (Carolina P&L)                                            
12....................................  Central Hudson Gas & Electric Corp..................  (Central Hudson)                                          
13....................................  Central Illinois Public Service Company.............  (Central Illinois Public Service)                         
14....................................  CINergy Corporation.................................  (CINergy)                                                 
15....................................  Coalition for a Competitive Electric Market.........  (CCEM)                                                    
16....................................  Colorado Springs Utilities..........................  (CSU)                                                     
17....................................  Commonwealth Edison Company.........................  (Com Ed)                                                  
18....................................  Consolidated Edison Company.........................  (ConEd)                                                   

[[Page 21768]]

                                                                                                                                                        
19....................................  Consumers Power Company.............................  (Consumers Power)                                         
20....................................  Continental Power Exchange..........................  (Continental Power Exchange)                              
21....................................  CSW Companies.......................................  (CSW)                                                     
22....................................  Dayton Power and Light Company......................  (Dayton P&L)                                              
23....................................  Detroit Edison Company..............................  (Detroit Edison)                                          
24....................................  Duke Power Company..................................  (Duke)                                                    
25....................................  Edison Electric Institute...........................  (EEI)                                                     
26....................................  El Paso Electric Company............................  (El Paso)                                                 
27....................................  Electric Generation Association.....................  (EGA)                                                     
28....................................  Electric Reliability Council of Texas...............  (ERCOT)                                                   
29....................................  Entergy Services, Inc...............................  (Entergy)                                                 
30....................................  Florida Electric Power Coordinating Group...........  (Florida CG)                                              
31....................................  Florida Power Corporation...........................  (Florida Power Corp)                                      
32....................................  Florida PSC.........................................  (FL Com)                                                  
33....................................  Fuel Managers Association...........................  (Fuel Managers)                                           
34....................................  ``How'' Industry Working Group (EPRI)...............  (How Group)                                               
35....................................  Idaho Power Company.................................  (Idaho)                                                   
36....................................  Indiana Utility Regulatory Commission...............  (IN Com)                                                  
37....................................  Indianapolis Power & Light Company..................  (Indianapolis P&L)                                        
38....................................  Klein, Stanley A....................................  (Klein)                                                   
39....................................  Long Island Lighting Company........................  (LILCO)                                                   
40....................................  Madison Gas and Electric Company....................  (Madison G&E)                                             
41....................................  Maine Public Service Company........................  (Maine Public Service)                                    
42....................................  MidAmerican Energy Company..........................  (MidAmerican)                                             
43....................................  Mid-Continent Area Power Pool.......................  (MAPP)                                                    
44....................................  Minnesota Power & Light Company.....................  (Minnesota P&L)                                           
45....................................  Missouri Public Service Commission..................  (MO & AK Com's)                                           
46....................................  Montana Power Company...............................  (Montana Power)                                           
47....................................  National Association of Regulatory Utility            (NARUC)                                                   
                                         Commissioners.                                                                                                 
48....................................  National Independent Energy Producers...............  (NIEP)                                                    
49....................................  National Rural Electric Cooperative Association.....  (NRECA)                                                   
50....................................  Nebraska Public Power District......................  (NE Public Power District)                                
51....................................  New England Power Pool..............................  (NEPOOL)                                                  
52....................................  New York Mercantile Exchange........................  (NYMEX)                                                   
53....................................  New York Power Pool.................................  (NYPP)                                                    
54....................................  New York State Electric & Gas Corp..................  (NYSEG)                                                   
55....................................  New York State PSC..................................  (NY Com)                                                  
56....................................  NorAm Energy Services, Inc..........................  (NorAm)                                                   
57....................................  North American Electric Reliability Council.........  (NERC)                                                    
58....................................  North Carolina Electric Membership Corp.............  (NCEMC)                                                   
59....................................  Northeast Texas Electric Cooperative, Inc...........  (NTEC)                                                    
60....................................  Northeast Utilities.................................  (NU)                                                      
61....................................  Northern States Power Companies.....................  (NSP)                                                     
62....................................  Nucor Corporation...................................  (Nucor)                                                   
63....................................  Oak Ridge National Lab, Energy Division.............  (Oak Ridge)                                               
64....................................  Ohio Edison Company.................................  (Ohio Edison)                                             
65....................................  Ohio PUC............................................  (Ohio Com)                                                
66....................................  Oklahoma Corporation Commission.....................  (OK Com)                                                  
67....................................  Oklahoma Gas & Electric.............................  (Oklahoma G&E)                                            
68....................................  Omaha Public Power District.........................  (Omaha PPD)                                               
69....................................  Ontario Hydro.......................................  (Ontario Hydro)                                           
70....................................  Orange and Rockland Utilities, Inc..................  (Orange & Rockland)                                       
71....................................  Oregon Trail Electric Consumers Cooperative.........  (Oregon EC)                                               
72....................................  Otter Tail Power Company............................  (Otter Tail)                                              
73....................................  Pacific Gas and Electric Company....................  (PG&E)                                                    
74....................................  PacifiCorp..........................................  (PacifiCorp)                                              
75....................................  Pennsylvania--New Jersey--Maryland Power Pool.......  (PJM)                                                     
76....................................  Pennsylvania Public Utility Commission..............  (PA Com)                                                  
77....................................  Public Generating Pool..............................  (Public Generating Pool)                                  
78....................................  Public Service Company of New Mexico................  (PSNM)                                                    
79....................................  Sacramento Municipal Utility District...............  (SMUD)                                                    
80....................................  Salt River Project..................................  (Salt River)                                              
81....................................  San Diego Gas & Electric Company....................  (San Diego G&E)                                           
82....................................  Seattle City Light..................................  (Seattle)                                                 
83....................................  Services-Oriented Open Network Technologies, Inc....  (SONETECH)                                                
84....................................  Sierra Pacific Power Company........................  (Sierra)                                                  
85....................................  South Carolina Electric & Gas Company...............  (SCE&G)                                                   
86....................................  South Carolina Public Service Authority.............  (SC Public Service Authority)                             
87....................................  Southern California Edison Company..................  (SoCal Edison)                                            
88....................................  Southern Company Services, Inc......................  (Southern)                                                
89....................................  Southwest Transmission Dependent Utility Group......  (Southwest TDU Group)                                     

[[Page 21769]]

                                                                                                                                                        
90....................................  Southwestern Public Service Company.................  (Southwestern)                                            
91....................................  Sunflower Electric Power Cooperative................  (Sunflower)                                               
92....................................  City of Tallahassee, FL.............................  (Tallahassee)                                             
93....................................  Tampa Electric Company..............................  (Tampa)                                                   
94....................................  Tennessee Valley Authority..........................  (TVA)                                                     
95....................................  Texas Utilities Electric Company....................  (Texas Utilities)                                         
96....................................  Transmission Access Policy Study Group..............  (TAPS)                                                    
97....................................  Tucson Power Electric Power Company.................  (Tucson Power)                                            
98....................................  Union Electric Company..............................  (Union Electric)                                          
99....................................  United Illuminating Company.........................  (United Illuminating)                                     
100...................................  U.S. Department of Energy, Office of Energy Research  (DOE)                                                     
101...................................  UTC, The Telecommunications Association.............  (UTC)                                                     
102...................................  Virginia Electric and Power Company.................  (VEPCO)                                                   
103...................................  Western Group.......................................  (Western Group)                                           
104...................................  Wisconsin Power & Light.............................  (WP&L)                                                    
--------------------------------------------------------------------------------------------------------------------------------------------------------



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[FR Doc. 96-10693 Filed 5-9-96; 8:45 am]
BILLING CODE 6717-01-C

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