Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Rules and Regulations 58293 

1FERC Staff, Staff Findings on Capacity 

Reassignment (2010), available at http:// 

www.ferc.gov (Staff Report). 

2Promoting Wholesale Competition Through 

Open Access Non-Discriminatory Transmission 

Services by Public Utilities; Recovery of Stranded 

Costs by Public Utilities and Transmitting Utilities, 

Order No. 888, 61 FR 21540 (May 10, 1996), FERC 

Stats. & Regs. ¶ 31,036, at 31,696 (1996), order on 

reh’g, Order No. 888–A, 62 FR 12274 (March 14, 

1997), FERC Stats. & Regs. ¶ 31,048 (1997), order 

on reh’g, Order No. 888–B, 81 FERC ¶ 61,248 

(1997), order on reh’g, Order No. 888–C, 82 FERC 

¶ 61,046 (1998), aff’d in relevant part sub nom. 

Transmission Access Policy Study Group v. FERC, 

225 F.3d 667 (DC Cir. 2000), aff’d sub nom. New 

York v. FERC, 535 U.S. 1 (2002). 

■ 2. On page 52859, in the second 

column, in the fourth line of the 

heading, remove ‘‘FAA–2008–0118’’ and 

add in its place ‘‘FAA–2008–0188.’’ 

■ 3. On page 52859, in the second 

column, in the fifth line of the heading, 

remove ‘‘13–34, 47–29, and 91–318’’ and 

add in its place ‘‘47–29.’’ 

■ 4. On page 52859, in the third column, 

in the second paragraph under 

SUPPLEMENTARY INFORMATION, in the 

twelfth line, remove ‘‘February 29, 2010’’ 

and add in its place ‘‘February 29, 2012.’’ 

Issued in Washington, DC, on September 

20, 2010. 

Dennis R. Pratte, II, 

Acting Director, Office of Rulemaking. 

[FR Doc. 2010–23964 Filed 9–23–10; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 35 

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

Promoting a Competitive Market for 

Capacity Reassignment 

September 20, 2010. 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Energy 

Regulatory Commission lifts the price 

cap for all electric transmission 

customers reassigning transmission 

capacity based on the Commission’s 

experience to date and a two-year study, 

released April 15, 2010. The removal of 

the price cap is intended to help 

facilitate the development of a market 

for electric transmission capacity 

reassignments as a competitive 

alternative to transmission capacity 

acquired directly from the transmission 

owner. 

DATES: Effective Date: This rule will 

become effective September 24, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Laurel Hyde (Technical Information), 

Office of Energy Market Regulation, 

Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, (202) 502– 

8146. 

A. Cory Lankford (Legal Information), 

Office of the General Counsel, Federal 

Energy Regulatory Commission, 888 

First Street, NE., Washington, DC 

20426, (202) 502–6711. 

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon Wellinghoff, 

Chairman; Marc Spitzer, Philip D. Moeller, 

John R. Norris, and Cheryl A. LaFleur. 

Paragraph 

Nos. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

VII. Effective Date and Congressional Notification .............................................................................................................................. 53 

1. Based on the Commission’s 

experience to date and a two-year study, 

released April 15, 2010,1 the Federal 

Energy Regulatory Commission in this 

Final Rule makes permanent the lifting 

of price caps for transmission customers 

reassigning electric transmission 

capacity. This action is intended to 

facilitate the development of a market 

for electric transmission capacity 

reassignments as a competitive 

alternative to primary transmission 

capacity. 

I. Background 

2. In Order No. 888, the Commission 

concluded that a transmission 

provider’s pro forma Open Access 

Transmission Tariff (OATT) must 

permit explicitly the voluntary 

reassignment of all or part of a holder’s 

firm point-to-point capacity rights to 

any eligible customer.2 The Commission 

also found that allowing holders of firm 

transmission capacity rights to reassign 

that transmission capacity would help 

parties manage the financial risks 

associated with their long-term 

commitment, reduce the market power 

of transmission providers by enabling 

customers to compete, and foster 

efficient transmission capacity 

allocation. 

3. With respect to the appropriate rate 

for transmission capacity reassignment, 

the Commission concluded it could not 

permit reassignments at market-based 

rates because it was unable to determine 

that the market for reassigned 

transmission capacity was sufficiently 

competitive so that resellers would not 

be able to exert market power. Instead, 

the Commission capped the rate at the 

highest of: (1) The original transmission 

rate charged to the purchaser (assignor); 

(2) the transmission provider’s 

maximum stated firm transmission rate 

in effect at the time of the reassignment; 

or (3) the assignor’s own opportunity 

costs capped at the cost of expansion 

(price cap). The Commission further 

explained that opportunity cost pricing 

had been permitted at ‘‘the higher of 

embedded costs or legitimate and 

verifiable opportunity costs, but not the 

sum of the two (i.e., ‘or’ pricing is 


hsrobinson on DSK69SOYB1PROD with RULES
58294 Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Rules and Regulations 

3Order No. 888, FERC Stats. & Regs. ¶ 31,036 at 

31,740. 

4Order No. 888–A, FERC Stats. & Regs. ¶ 31,048 

at 30,224. 

5Preventing Undue Discrimination and 

Preference in Transmission Service, Order No. 890, 

72 FR 12266 (March 15, 2007), FERC Stats. & Regs. 

¶ 31,241, at P 808 (2007), order on reh’g, Order No. 

890–A, 73 FR 2984 (January 16, 2008), FERC Stats. 

& Regs. ¶ 31,261 (2007), order on reh’g, Order No. 

890–B, 123 FERC ¶ 61,299 (2008), order on reh’g, 

Order No. 890–C, 126 FERC ¶ 61,228 (2009), order 

on clarification, Order No. 890–D, 129 FERC ¶ 

61,126 (2009). 

6Order No. 890, FERC Stats. & Regs. ¶ 31,241 at 

P 808. 

7 Id. P 815. 

8 Id. 

9 Id. P 816. 

10 Id. P 817. 

11 Id. P 820. 

12 Id. 

13Order No. 890–A, FERC Stats. & Regs. ¶ 31,261 

at P 388, 390. 

14 Id. P 390. 

15Order No. 890–B, 123 FERC ¶ 61,299 at P 78. 

16 Id. 

17 Id. P 79. 

18 Id. P 83. 

19 Id. P 84. 

20 Id. 

21FERC Staff, Staff Finding on Capacity 

Reassignment (2010), available at http:// 

www.ferc.gov (Staff Report). 

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

Order No. 888–A, the Commission 

explained that opportunity costs for 

transmission capacity reassigned by a 

customer should be measured in a 

manner analogous to that used to 

measure the transmission provider’s 

opportunity cost.4

4. To foster the development of a 

more robust secondary market for 

transmission capacity, the Commission, 

in Order No. 890, concluded that it was 

appropriate to lift the price cap for all 

transmission customers reassigning 

transmission capacity.5 The 

Commission stated that this would 

allow transmission capacity to be 

allocated to those entities that value it 

most, thereby sending more accurate 

price signals to identify the appropriate 

location for construction of new 

transmission facilities to reduce 

congestion.6 The Commission also 

found that market forces, combined 

with the requirements of the pro forma 

OATT as modified in Order No. 890, 

would limit the ability of resellers, 

including affiliates of the transmission 

provider, to exert market power. 

5. To enhance oversight and 

monitoring activities, the Commission 

adopted reforms to the underlying rules 

governing transmission capacity 

reassignments.7 First, the Commission 

required that all resales or 

reassignments of transmission capacity 

be conducted through or otherwise 

posted on the transmission provider’s 

OASIS on or before the date the 

reassigned service commences.8 Second, 

the Commission required that assignees 

of transmission capacity execute a 

service agreement prior to the date on 

which the reassigned service 

commences.9 Third, in addition to 

existing OASIS posting requirements, 

the Commission required transmission 

providers to aggregate and summarize in 

an electric quarterly report the data 

contained in these service agreements.10

6. The Commission also directed staff 

to closely monitor the reassignmentrelated data submitted by transmission 

providers in their quarterly reports to 

identify any problems in the 

development of the secondary market 

for transmission capacity and, in 

particular, the potential exercise of 

market power.11 Thus, the Commission 

directed staff to prepare, within six 

months of receipt of two years of 

quarterly reports, a report summarizing 

its findings.12 In addition, the 

Commission encouraged market 

participants to provide feedback 

regarding the development of the 

secondary electric transmission capacity 

market and, in particular, to contact the 

Commission’s Enforcement Hotline if 

concerns arise. 

7. In Order No. 890–A, the 

Commission affirmed its decision to 

remove the price cap on reassignments 

of electric transmission capacity but 

granted rehearing to limit the period 

during which reassignments may occur 

above the cap.13 The period was limited 

so that the Commission could review 

the Staff Report to see if changes were 

needed based on the actual operation of 

the reassignment program. Accordingly, 

the Commission amended section 23.1 

of the pro forma OATT to reinstate the 

price cap as of October 1, 2010.14

8. The Commission also clarified that, 

as of the effective date of the reforms 

adopted in Order No. 890, all 

reassignments of electric transmission 

capacity must take place under the 

terms and conditions of the 

transmission provider’s OATT. As a 

result, there was no longer a need for 

the assigning party to have on file with 

the Commission a rate schedule 

governing reassigned capacity. To the 

extent that a reseller has a market-based 

rate tariff on file, the provisions of that 

tariff, including a price cap or reporting 

obligations, will not apply to the 

reassignment since such transactions no 

longer take place pursuant to the 

authorization of that tariff. 

9. In Order No. 890–B, the 

Commission clarified that the pro forma 

OATT does not, and will not, permit the 

withholding of transmission capacity by 

the transmission provider and that it 

effectively establishes a price cap for 

long-term reassignments at the 

transmission provider’s cost of 

expanding its system.15 The 

Commission further found that the fact 

that a transmission provider’s affiliate 

may profit from congestion on the 

system does not relieve the transmission 

provider of its obligation to offer all 

available transmission capacity and 

expand its system as necessary to 

accommodate requests for service.16 The 

Commission pointed out that customers 

that do not wish to participate in the 

secondary market may continue to take 

service from the transmission provider 

directly, just as if the price cap had not 

been lifted.17

10. With regard to the Staff Report, 

the Commission clarified that staff 

should focus on the competitive effects 

of removing the price cap for reassigned 

electric transmission capacity.18 The 

Commission stated that staff should 

consider the number of reassignments 

occurring over the study period, the 

magnitude and variability of resale 

prices, the term of the reassignments, 

and any relationship between resale 

prices and price differentials in related 

energy markets. In addition, the 

Commission directed staff to examine 

the nature and scope of reassignments 

undertaken by the transmission 

provider’s affiliates and include in its 

report any evidence of abuse in the 

secondary market for transmission 

capacity, whether by those affiliates or 

other customers. 

11. The Commission also granted 

rehearing and directed each 

transmission provider to include in its 

electric quarterly report the identity of 

the reseller and indicate whether the 

reseller is affiliated with the 

transmission provider.19 The 

Commission also directed each 

transmission provider to include in its 

electric quarterly reports the rate that 

would have been charged under its 

OATT had the secondary customer 

purchased primary service from the 

transmission provider for the term of the 

reassignment.20 The Commission 

directed transmission providers to 

submit this additional data for all 

resales during the study period and to 

update, as necessary, any previouslyfiled electric quarterly reports on or 

before the date they submitted their next 

electric quarterly reports. 

12. On April 15, 2010, Commission 

staff published its report on the twoyear study period.21 The Staff Report 

took a comprehensive look at electric 

point-to-point transmission capacity 


hsrobinson on DSK69SOYB1PROD with RULES
Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Rules and Regulations 58295 

22A list of commenters is provided in Appendix 

A. 

23E.g. Bonneville, Cargill, EPSA, FIEG, PG&E, 

PGE, Powerex, Seattle. 

24E.g. APPA, NRECA, SCE, TAPS, Outland, and 

TDU Systems. 

reassignment that occurred over the 

period from the second quarter of 2007 

through the fourth quarter of 2009. Staff 

examined all reported electric 

transmission reassignments during this 

period on both a national and a regional 

basis. These almost 35,000 transactions 

encompassed 65 TWh of total volume 

transferred. Staff looked at the data in a 

number of ways, in order to better 

understand the market and to look for 

evidence of abuse. In doing so, staff 

looked at the magnitude and variability 

of resale prices, and focused on trends 

in those numbers over time and by 

region. Staff compared resale prices to 

the maximum tariff rates that would 

have otherwise been in effect for those 

transactions. Further, staff looked at 

reassignments by term—hourly, daily, 

monthly, and yearly and looked at 

differences in term by transmission 

provider and by volume. Where the 

receipt and delivery points of 

transactions had reported price indices 

with sufficient data, staff compared the 

prices of reassignments to the energy 

market spread (differential in prices 

between the two locations) over the 

same time periods. 

13. Staff also compared resale prices 

for transactions involving affiliates 

versus non-affiliates. Staff compared the 

rate of transactions above the cap for 

both affiliates and non-affiliates. Staff 

looked for additional forms of affiliate 

abuse such as a transmission provider 

providing preferential treatment in the 

allocation of reassigned capacity to an 

affiliate. Staff also checked for 

complaints of the abuse in affiliate 

transactions, as well as for capacity 

reassignment in general. 

14. Two weeks after the release of the 

Staff Report, based on the Commission’s 

experience in the natural gas 

transportation market and the Staff 

Report’s conclusion that the secondary 

market had grown substantially and that 

resale prices reflected market 

fundamentals rather than the exercise of 

market power, the Commission issued a 

Notice of Proposed Rulemaking (NOPR) 

proposing to lift the price cap for all 

electric transmission customers 

reassigning transmission capacity 

beyond October 1, 2010. In addition, the 

Commission proposed to direct 

transmission providers to submit 

corresponding revisions to their OATTs 

within 30 days of publication of the 

Final Rule in the Federal Register. The 

Commission also sought comment as to 

whether there are any other reforms that 

it should undertake to create a more 

efficient and vibrant secondary market 

for electric transmission capacity. In 

response to these NOPR proposals, the 

Commission received comments from 

13 parties, which are addressed 

below.22

II. Discussion 

A. Removal of the Price Cap 

1. Comments 

15. Several commenters support the 

Commission’s proposal to remove the 

price cap on transmission reassignments 

permanently.23 They contend that 

removal of the cap will encourage the 

development of a more robust secondary 

market, resulting in appropriate price 

signals and an efficient allocation of 

transmission capacity. Cargill comments 

that the resale of transmission capacity 

at negotiated rates is consistent with 

other Commission reforms in favor of 

market-based pricing. 

16. Despite their general support for 

the Commission’s proposal, EPSA and 

PG&E raise concerns about the staff 

study and the need for transparency. 

EPSA states that the Staff Report shows 

some gaps that will require further 

analysis; such as limited numbers of 

transmission providers reported and the 

majority of transactions being from 

Bonneville. PG&E expresses a lingering 

concern about the potential for 

transmission service providers to raise 

power prices in locations where there is 

insufficient competition. EPSA and 

PG&E urge the Commission to continue 

to monitor the capacity reassignment 

market as it matures so that the 

Commission will be informed and 

therefore able to direct necessary 

reforms to the market, as the needed 

reforms reveal themselves. EPSA further 

urges the Commission to look at ways of 

increasing transparency for transmission 

capacity available for reassignments as a 

way of promoting the secondary market 

for reassignment. Powerex comments 

that there are already a number of 

safeguards including requirements that 

transmission providers report 

reassignments on their systems on 

OASIS and in the electronic quarterly 

reports (EQR) that should help limit 

abuses. Similarly, Seattle comments that 

reconciliation of EQRs, audits, and 

OASIS transactions would go a long 

way to ensure that resale markets are 

functioning without affiliate abuse. 

17. Bonneville agrees that lifting the 

price cap on transmission capacity 

reassignments appears to support the 

goal of a more robust secondary market 

for that capacity but asks the 

Commission to recognize the position of 

non-jurisdictional entities, such as 

itself. Bonneville contends that nonjurisdictional entities may have to place 

conditions upon the removal of the cap 

in order to obtain reciprocity and 

comply with their applicable statutory 

requirements. Bonneville contends that 

if its administrator determines that 

behavior associated with transmission 

capacity reassignments is occurring on 

its system in a manner that frustrates or 

is otherwise inconsistent with the 

administrator’s statutory requirements 

to make all excess capacity available to 

utilities on a fair and nondiscriminatory 

basis, the administrator must be able to 

act promptly to stop that behavior. 

Thus, Bonneville suggests that any 

revision to section 23 of Bonneville’s 

OATT permanently lifting the price cap 

must be conditioned upon the 

administrator’s express authority to 

carry out this mandate including the 

right to reinstate the cap expeditiously 

if necessary. 

18. Other commenters argue against 

removal of the price cap, contending 

that staff’s two-year study provides 

insufficient evidence to support a 

finding that the secondary market is 

sufficiently competitive to lift the price 

caps or that market forces or other 

factors will be effective to adequately 

protect consumers.24 These commenters 

point out that, although the Final Rule 

would apply to an estimated 132 public 

utilities, the Staff Report included data 

from only 26 with 79 percent of the 

reported transactions coming from 

Bonneville. These commenters also 

point out that the study was performed 

during a recession with concomitant 

reductions in the demand for electricity, 

and that Bonneville is atypical, given 

that it is dependent on large 

hydroelectric projects. APPA further 

comments that because there were so 

few sales made during the study period 

by affiliates above the rate cap, it would 

appear that reinstitution of the cap 

would not significantly dampen resales 

of capacity by affiliates of transmission 

providers. 

19. TAPS states that the staff study 

did not examine both prices offered and 

accepted such that the Commission 

could determine the level of market 

interest in reassigned capacity, whether 

prices increased, the cause of price 

changes, and whether those prices 

remained in the zone of reasonableness. 

It notes that the staff study compared 

resale prices during the study period to 

the tariff rate, but not to the opportunity 

cost cap, which is likely higher. It 

argues that accordingly, the study does 

not show that the price cap constrained 


hsrobinson on DSK69SOYB1PROD with RULES
58296 Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Rules and Regulations 

25Citing Farmers Union Cent. Exch., Inc. v. FERC, 

734 F.2d 1486, 1510 (DC Cir. 1984)(Farmers Union). 26Citing Transwestern Pipeline, 43 FERC ¶ 

61,240, at 61,250 (1988). 27Citing California ex. Rel. Lockyer v. FERC, 383 

F.3d 1006, 1013 (9th Cir. 2004). 28Outland at 1. 

29Promoting Transmission Investment through 

Pricing Reform, Order No. 679, 71 FR 43294 (July 

31, 2006), FERC Stats. & Regs. ¶ 31,222 (2006), 

order on reh’g, Order No. 679–A, 72 FR 1152 

(January 10, 2007), FERC Stats. & Regs. ¶ 31,236 

(2006), order on reh’g, 119 FERC ¶ 61,062 (2007). 

30See Interstate Nat’l Gas Ass’n of America v. 

FERC, 285 F.3d 18, 32–34 (DC Cir. 2002) (INGAA) 

(‘‘[B]rief spikes in moments of extreme exigency are 

completely consistent with competition, reflecting 

scarcity rather than monopoly.’’). 

31Order No. 890–A, FERC Stats. & Regs. ¶ 31,261 

at P 388. 

any prices, and thus it prevents a 

finding that the price cap is unjust and 

unreasonable. SCE requests that the 

Commission reconcile its proposal with 

findings in the Staff Report that removal 

of the price cap does not appear to be 

primarily responsible for the observed 

growth in the secondary market. It also 

states that the Staff Report did not 

definitively conclude that there was not 

abuse by resellers, even in a period with 

very low demand and no supply 

scarcity. SCE states that this is not 

sufficient evidence to lift the price cap. 

APPA, SCE and TAPS suggest that, if 

the Commission wishes to lift the price 

cap, it should only do so as a 

continuation of the experiment. 

20. NRECA, TAPS, and TDU Systems 

argue that the Staff Report does not 

provide a sufficient factual basis for the 

Commission to conclude that the OATT 

section 23.1, which reinstates the price 

cap on October 1, 2010, is unjust and 

unreasonable or to conclude that 

proposed revision is just and 

reasonable. Moreover, TAPS and TDU 

Systems comment that market-based 

reassignment of transmission capacity 

should not be available to entities to the 

extent they lack market-based rate 

authority in the area in which the 

transmission reservation is located. TDU 

Systems states that each secondary 

transmission capacity market should be 

looked at individually, and that there is 

no single, national market for secondary 

transmission capacity rights. It 

questions why the Staff Report 

considers Public Service of New 

Hampshire (PSNH) to be an aberration, 

while the nearby Central Vermont 

Public Service Corporation (Central 

Vermont) system is presented as 

representing national trends. 

21. TAPS and TDU Systems further 

contend that, to permit market-based 

rates, the Commission remains bound 

by the requirement that market-based 

rates be supported by empirical proof 

that existing competition would ensure 

that the actual price is just and 

reasonable.25 TDU Systems comments 

that courts have held that 

undocumented reliance on market 

forces is insufficient grounds for 

authorizing market-based rates.26

Moreover, TAPS and TDU Systems 

argue that the Commission has a 

requirement to make an ex ante finding 

of the absence of market power and 

sufficient post-approval requirements.27

SCE agrees that the Commission should 

engage in an ex ante competitive 

analysis to find that the transmission 

reseller lacks market power, or take 

sufficient steps to mitigate market 

power, as well as adopt sufficient postapproval reporting requirements. 

22. Outland states that the pilot 

project has allowed resellers to acquire 

capacity ‘‘for pennies and then hold up 

the first renewable energy generator that 

comes along looking to use it.’’ 28 It 

states that parties acquire transmission 

when they do not need it for a real 

generation project, to the detriment of 

real projects. 

23. NRECA, TAPS, and TDU Systems 

urge the Commission, at a minimum, to 

retain the price cap on transmission 

capacity reassignments for transmission 

provider affiliates and retail/merchant 

functions. TAPS states that the pattern 

of affiliate pricing reveals more about 

corporate strategy selected by a few 

corporate entities and general 

conditions during an atypical period, 

than confirming the Commission’s 

assumption that the rates for primary 

capacity or competition in the 

reassignment market will restrain 

prices. It states that assuming that the 

customer may always take service from 

the transmission provider directly is 

cold comfort if the available capacity 

has been assigned to the transmission 

provider’s affiliate. NRECA states that a 

larger portion of affiliate than nonaffiliate transactions occurred over the 

cap, and points to the PSNH system 

where all reported transactions 

originated with an affiliate and occurred 

over the price cap. 

24. In its supplemental comments, 

Powerex expresses concern that 

Bonneville might reinstate the price cap 

as of October 1, 2010, regardless of 

Commission action in this proceeding. 

Powerex asks the Commission to 

address the possible adverse 

consequences of non-jurisdictional 

transmission providers reinstating price 

caps on transmission reassignments and 

to provide guidance to customers 

seeking to reassign transmission on the 

systems of non-jurisdictional 

transmission providers that elect not to 

adopt any reforms the Commission 

directs. To address this issue, Powerex 

requests the Commission to clarify that 

its seller-specific market-based rate 

schedule for transmission reassignment 

remains operative. Alternatively, 

Powerex seeks guidance on how to price 

capacity reassignments based on the 

customer’s opportunity cost capped at 

the transmission provider’s cost of 

expansion. 

2. Commission Determination 

a. Removal of the Price Cap 

25. The Commission hereby adopts its 

NOPR proposal to lift the price cap for 

all reassignments of electric 

transmission capacity to become 

effective October 1, 2010. Removal of 

the price cap will help foster the 

development of a more robust secondary 

market for transmission capacity 

because point-to-point transmission 

service customers will have increased 

incentives to resell their service 

whenever others place a higher value on 

it. Existing transmission, therefore, may 

be put to better, more efficient use. 

26. Moreover, removal of the price 

cap will promote the efficient 

construction of new capacity. Prices 

serve as signals indicating where 

capacity shortages exist and where 

potentially profitable construction can 

take place. The Commission has 

previously addressed the need for new 

transmission and established incentives 

for its construction.29 Removing the 

price cap on sales of secondary electric 

transmission capacity is one way to 

create the proper incentives for new 

transmission investment in this 

industry. Areas with congestion tend to 

have higher prices and thus signal the 

need for investment.30 However, if 

prices for reassigned capacity exceed 

the cost of construction of new 

transmission, the customer could 

request service from the transmission 

provider which would support 

investment in new transmission and 

lower costs prospectively by relieving 

constrained transmission capacity. 

Thus, the price of reassigned capacity 

will remain effectively capped at the 

cost of new transmission. We therefore 

reaffirm the Commission’s finding in 

Order No. 890–A that removal of the 

price cap for reassigned capacity will 

help establish a competitive market for 

secondary transmission capacity that 

will send more accurate signals and that 

such price signals will promote more 

efficient use of the electric transmission 

system.31

27. Our continued regulatory 

oversight will also limit the potential for 

the exercise of market power. We are 


hsrobinson on DSK69SOYB1PROD with RULES
Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Rules and Regulations 58297 

32 285 F.3d at 32 (‘‘[i]f holders of firm capacity do 

not use or sell all of their entitlement, the pipelines 

are required to sell the idle capacity as interruptible 

service to any taker at no more than the maximum 

rate—which is still applicable to the pipelines’’); see 

also, Promotion of a More Efficient Capacity 

Release Market, Order No. 712, 73 FR 37058 (June 

30, 2008), FERC Stats. & Regs. ¶ 31,271, at P48–49 

(2008), order on reh’g, Order No. 712–A, FERC 

Stats. & Regs. ¶ 31,284 (2008). 

33See Standards of Conduct for Transmission 

Providers, Order No. 717, 73 FR 63796 (October 27, 

2008), FERC Stats. & Regs. ¶ 31,280 (2008), order 

on reh’g, Order No. 717–A, 74 FR 54463 (October 

22, 2009), FERC Stats. & Regs. ¶ 31,297 (2009), 

order on reh’g, Order No. 717–B, 129 FERC ¶ 61,123 

(2009), order on reh’g, Order No. 717–C, 131 FERC 

¶ 61,045 (2010). The Commission’s Standards of 

Conduct establish that a transmission provider must 

(1) treat all customers, affiliated and non-affiliated, 

on a not unduly discriminatory basis, (2) not make 

or grant any undue preference or advantage to any 

person, and (3) not subject any person to any undue 

prejudice or disadvantage with respect to 

transmission of electric energy. This would include 

avoiding undue prejudice or disadvantage in the 

initial allocation of capacity to affiliates, thereby 

allowing those affiliates to gain market power and 

then to exercise it when reassigning capacity. 

34 INGAA, 285 F.3d at 32–34 (‘‘[B]rief spikes in 

moments of extreme exigency are completely 

consistent with competition, reflecting scarcity 

rather than monopoly.’’). 35See Order No. 890, FERC Stats. & Regs. 

¶ 31,241 at P 815. 

36See INGAA, 285 F.3d at 31 (indicating that 

differentials in prices between receipt and delivery 

points are indicative of the value of the 

transportation between those points). 

37Because 99 percent of the prices were below 

the tariff rate, these prices are almost certainly 

lower than opportunity costs which TAPS suggests 

are likely higher than the tariff rate. 

38 INGAA, 285 F.3d 18, 32 (‘‘A surge in the price 

of candles during a power outage is no evidence of 

monopoly in the candle market’’). 

39The Staff Report states that ‘‘the large number 

of [Central Vermont] transactions may be due, in 

part, to reporting conventions. For EQR reporting 

Continued 

not deregulating or otherwise adopting 

market-based rates for the provision of 

transmission service under the pro 

forma OATT. Transmission providers 

will continue to be obligated to offer 

available transfer capability to 

customers, including available transfer 

capability associated with purchased 

but unused capacity. Transmission 

providers also will continue to be 

obligated to construct new facilities to 

satisfy requests for service if those 

requests cannot be satisfied using 

existing capacity. Furthermore, the rates 

for transmission service provided under 

the pro forma OATT will continue to be 

determined on a cost-of-service basis 

unless the transmission provider can 

demonstrate, on a case-specific basis, 

that it lacks market power. Nothing in 

this Final Rule affects the obligations of 

transmission providers to offer service 

under the pro forma OATT at cost-based 

rates. The availability of firm and nonfirm service from transmission 

providers, therefore, will limit the 

ability of reassignors to exercise market 

power. In INGAA, the Court of Appeals 

for the District of Columbia Circuit 

recognized that the maintenance of 

regulated rates for primary service 

would protect against the potential for 

the exercise of market power in the 

capacity release market.32

28. The Commission disagrees with 

suggestions that affiliates of the 

transmission provider be treated 

differently than non-affiliated customers 

with respect to reassignments of 

transmission capacity. The 

Commission’s Standards of Conduct are 

designed to prevent the transmission 

provider and its affiliate from acting in 

concert to exercise market power.33

Commenters did not identify any 

affiliate concerns that these obligations, 

along with the monitoring discussed 

below, would not address. 

29. The Commission takes seriously 

the possibility that resellers may 

attempt to exercise market power in the 

secondary market for transmission. We 

continue to find, however, that the 

regulatory protections in place and our 

increased oversight of this market will 

limit the potential for market power 

abuse. Prices for secondary transmission 

capacity may rise above prices for 

primary transmission capacity but this 

alone does not indicate an abuse of 

market power. On the contrary, courts 

have recognized that prices in a 

competitive market should rise during 

periods when capacity is truly scarce in 

order to ensure that transmission 

capacity is being allocated 

appropriately.34 Nevertheless, the 

Commission will continue to monitor 

the secondary transmission capacity 

market to ensure that participants are 

not exercising market power.35 The 

Commission also will monitor for abuse 

by transmission providers in concert 

with their affiliates. If a customer has 

evidence of an exercise of market power 

or other abuse, it should bring the 

matter to the Commission’s attention 

through a complaint or other 

appropriate procedural mechanism. 

Absent such evidence, the Commission 

concludes that the continued rate 

regulation of the primary market for 

electric transmission capacity and the 

transmission provider’s obligation to 

expand its system to accommodate 

service requests adequately mitigates 

any market power that resellers may 

have in the long-term secondary market. 

30. The Staff Report did not raise any 

concerns with removal of the price cap 

that would warrant its reimposition 

given the regulatory protections and 

increased market oversight discussed 

above. The report included a 

comprehensive examination of the 

assignments that took place during the 

study period which included both the 

period prior to the economic downturn 

starting in September 2008 and the 

period after the downturn. Although the 

Staff Report did not conclusively 

demonstrate that the price cap inhibited 

the growth of the secondary market, the 

data showed a marked growth in 

reassignments, with both the number of 

transactions and the volume increasing 

during the two and one half year time 

span. The number of reassignments 

grew from just over 200 in 2007 to 

almost 32,000 in 2009. During this same 

period, the volume reassigned grew 

from 3 TWh to 36 TWh. 

31. The data do not suggest the 

exercise of market power. The prices 

during the test period appear consistent 

with pricing differentials between 

locational markets, indicating that the 

transactions reflect market 

fundamentals, not the exercise of market 

power.36 Moreover, the Staff Report 

found that 99 percent of reassignments 

were priced at or below the 

transmission provider’s maximum firm 

transmission rate, an indication that 

prices reflect market conditions and 

competition rather than the exercise of 

market power.37 The brief spikes above 

the price cap are consistent with a 

competitive market, indicating scarcity 

rather than market power.38

32. We disagree with comments 

suggesting that the Staff Report does not 

provide enough evidence to support a 

finding that the market is sufficiently 

competitive to lift the price cap because 

it relied on data from a limited number 

of transmission providers. While 

capacity reassignments occurred on a 

limited number of transmission systems, 

the lack of data for other transmission 

providers indicates a lack of 

reassignments on those systems, not an 

exercise of market power or lack of 

potential competition for capacity 

reassignment. Where reassignment is 

currently non-existent or occurring at a 

lower level, potential reassignment of 

transmission in these areas, should it 

develop, would face competition 

associated with transmission that can be 

acquired from other customers. Such 

reassignment also would compete with 

capacity available from the transmission 

provider. Although the data in the Staff 

Report included extensive data from 

Bonneville and Central Vermont, the 

greater number of such assignments may 

be due to differences in market 

dynamics (such as the extensive use of 

hydroelectric power in the Bonneville 

region) or reporting conventions (in the 

case of Central Vermont).39 It also may 


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purposes, each line of data is counted as one 

transaction.’’ See Staff Report at 4. 

40See Alternatives to Traditional Cost-of-Service 

Ratemaking for Natural Gas Pipelines and 

Regulation of Negotiated Transportation Services of 

Natural Gas Pipelines, 74 FERC ¶ 61,076, at 

61,227–36 (1996). The Commission ultimately 

determined in that case that a market power 

analysis was required in order to allow a pipeline 

to use market-based pricing instead of cost-ofservice rates. The Commission has not proposed to 

allow transmission providers to engage in sales of 

primary capacity at market-based rates and, as 

explained below, sufficient protections exist to 

ensure the secondary market for transmission 

capacity remains sufficiently competitive without 

requiring market power analyses from each reseller. 

41 Interstate Nat’l Gas Ass’n of American v. FERC, 

285 F.3d at 33 (DC Cir. 2002). 

42 Interstate Nat’l Gas Ass’n of America v. FERC, 

285 F.3d 18 at 31–34 (DC Cir. 2002), order on 

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

106 FERC ¶ 61,088 (2004), aff’d sub nom. American 

Gas Ass’n v. FERC, 428 F.3d 255 (DC Cir. 2005). 

43Farmers Union, 734 F.2d at 1502; see also, 

INGAA, 285 F.3d at 31. 

44Farmers Union, 734 F.2d at 1510. 

45See Order No. 890, FERC Stats. & Regs. 

¶ 31,241 at P 811; see also Order No. 712, 73 FR 

37058 (June 30, 2008), FERC Stats. & Regs. ¶ 31,271 

at P 39 (2008), order on reh’g, Order No. 712–A, 

FERC Stats. & Regs. ¶ 31,284 (2008), aff’d sub nom. 

Interstate Natural Gas Ass’n of America, No. 09– 

1016 (DC Cir. Aug. 13, 2010). 

46See Portland General Electric Co., Docket No. 

ER09–93–000 (Dec. 3, 2008) (unpublished letter 

order); Idaho Power Co., Docket No. ER09–524–000 

(Mar. 5, 2009) (unpublished letter order); Puget 

Sound Energy, Inc., Docket No. ER09–528–000 

(Mar. 5, 2009) (unpublished letter order); Avista 

Corp., ER09–729–000 (May 12, 2009) (unpublished 

letter order); PacifiCorp, Docket No. ER09–921–001 

(Sept. 29, 2009) (unpublished letter order); Powerex 

Corp., Docket No. ER09–926–000 (May 21, 2009) 

(unpublished letter order). 

indicate that capacity reassignment is 

more developed in those areas. The 

volume of capacity reassignments on 

these two systems provides an example 

of what may be possible in other areas 

of the country. As for arguments that the 

time period under review was atypical 

due to the economic downturn and, 

thus, not representative, we note that 

study began the second quarter of 2007, 

well before the downturn began. 

33. The Staff Report also did not show 

evidence of affiliate abuse. Ninety-nine 

percent of reassignments by affiliates of 

the transmission provider were at or 

below the transmission provider’s 

maximum rate. The percentage of such 

reassignments over the maximum firm 

transmission rate by affiliates was 

comparable to that by non-affiliates (0.5 

percent versus 0.4 percent). 

34. While it is true, as some of the 

commenters point out, that the 

reassignment transactions were limited 

to certain areas and utilities, we see no 

reason to expect different results as 

capacity reassignment expands. There 

have not been allegations of the exercise 

of market power in reassignment 

markets, and commenters do not 

provide any data to suggest that market 

power may be more prevalent as 

capacity reassignment increases on 

other transmission systems. 

Development of a more robust 

reassignment market in areas where 

reassignments are not prevalent should 

raise, rather than lower, the level of 

competition in markets. Moreover, we 

will continue to monitor the market and 

if anomalies develop in certain areas, 

they can be addressed. 

35. We disagree with the comments 

that a market power study or other 

empirical competition analyses are 

required to lift the price cap on 

transmission capacity reassignments. 

Contrary to commenters’ assertions, 

market power analyses are not the only 

method to ensure that market-based 

rates remain just and reasonable.40 In 

INGAA,41 the DC Circuit affirmed the 

Commission’s removal of price ceilings 

for short-term capacity releases by 

shippers in the natural gas market 

without requiring sellers to submit 

market power analyses. The court 

recognized that non-cost factors such as 

the need to facilitate movement of 

capacity into the hands of those who 

value it most may also justify the 

removal of price ceilings. The court 

concluded that these non-cost factors, 

combined with the limitation of 

negotiated rates to the secondary 

market, distinguished the case from 

Farmers Union in which the court had 

reversed a Commission determination to 

implement lighthanded regulation of the 

oil industry.42

36. Farmers Union itself did not 

require a market power study to support 

a move to a more market-based 

regulatory regime. The court found that 

rates should be within a ‘‘zone of 

reasonableness, where [they] are neither 

less than compensatory nor 

excessive.’’ 43 Moreover, the court found 

that the Commission could justify a 

move to a more market-based focus ‘‘by 

a showing that under circumstances the 

goals and purposes of [the 

Commission’s statutory mandate] will 

be accomplished through substantially 

less regulatory oversight.’’ 44 Here, the 

Commission is relying on competition 

in the market for transmission capacity, 

together with the regulatory protections 

discussed above, to ensure just and 

reasonable rates. Protections, such as 

continuing rate regulation of the 

transmission provider’s primary 

capacity, retention of the requirement 

for transmission owners to build 

additional capacity at cost-based rates, 

competition among resellers, reforms to 

the secondary market for transmission 

capacity, and reporting requirements 

combined with enforcement 

proceedings, audits, and other 

regulatory controls, will assure that 

prices in the secondary market for 

electric transmission capacity remain 

within a zone of reasonableness.45

b. Implementation of the Requirement 

37. Because the current OATTs 

reinstate the price cap as of October 1, 

2010, transmission providers will need 

to revise section 23 of the pro forma 

OATT, as indicated in Appendix B. We 

direct transmission providers to file 

these changes within 30 days from 

publication of this Final Rule in the 

Federal Register. Bonneville requests a 

blanket waiver of the requirement for 

non-jurisdictional entities that are 

unable to satisfy reciprocity conditions 

with regard to the reassignment of 

transmission capacity. Whether the 

particular terms and conditions of a 

non-jurisdictional transmission 

provider’s reciprocity tariff satisfy the 

Commission’s open access principles 

must be determined on a case-by-case 

basis. Therefore, the Commission 

denies, without prejudice, Bonneville’s 

request for a blanket waiver. 

38. We find Powerex’s concern that 

Bonneville will reinstate the price cap 

as of October 1, 2010 to be premature, 

since Bonneville has not made a final 

decision at this point. Moreover, when 

Bonneville submitted its tariff revisions 

pursuant to Order No. 890, it declined 

to adopt certain pro forma provisions 

related to the reassignment of 

transmission capacity and several 

transmission customers within 

Bonneville, including Powerex, filed 

stand-alone rate schedules allowing 

them to sell transmission capacity above 

the price cap.46 These customers may 

submit any necessary revisions to their 

rate schedules before October 1, 2010 

and request waiver of the prior notice 

requirement, if they find such action to 

be necessary and appropriate. 

B. Non-Rate Reforms To Promote 

Secondary Market 

1. NOPR Proposal 

39. In the NOPR, the Commission 

sought comment as to whether there are 

any reforms, other than removal of the 

price cap, that it should undertake to 

create a more efficient and vibrant 

secondary market for transmission 

capacity. The Commission asked if there 

are non-price limitations or regional 

factors that may be continuing to limit 

the utility of reassignment. By way of an 

example, the Commission asked if there 


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47 44 U.S.C. 3507(d) (2006). 

48 5 CFR 1320.11 (2010). 

49These burden estimates apply only to this Final 

Rule and do not reflect upon all of FERC–516 or 

FERC–717. 

are reforms to the redirect process that 

would enable all firm customers to use 

their firm capacity more flexibly and 

thereby facilitate capacity reassignment 

by making point changes by the buyer 

of reassigned capacity more efficient. 

2. Comments 

40. Although FIEG supports the 

Commission’s proposal to allow 

redirects of reassigned capacity, several 

other commenters raise concerns. 

Powerex admits that the ability to 

modify receipt and delivery points of 

reassigned capacity may make the 

capacity more attractive to a potential 

third-party assignee but warns that this 

practice would erode the priority that 

firm capacity should be accorded. 

NRECA expresses similar concern that 

this proposal may give higher priority to 

point-to-point customers who wish to 

redirect by awarding them service over 

those non-firm customers who do not 

redirect and over secondary network 

customers. APPA contends that any 

reforms to firm point-to-point service 

proposed to increase the attractiveness 

of re-sales of firm point-to-point 

capacity would have to be carefully 

assessed to ensure that they do not 

result in a degradation of the quality of 

network integration transmission 

service. TAPS and TDU Systems urge 

the Commission to not use a narrowly 

focused rulemaking to implement a 

sweeping change to point-to-point 

transmission service. 

41. Commenters offered suggestions 

about various other reforms as well. 

Bonneville and Seattle argue that 

requiring transmission providers to act 

as financial intermediaries in capacity 

reassignments imposes an undue 

burden and complicates settlements. 

Powerex and Bonneville raise concerns 

about transmission providers failing to 

recalculate available transfer capability 

or available flowgate capability in a 

timely manner, thereby inhibiting 

reassignments. Bonneville recommends 

that a firm redirect request receive a 

credit for any available flowgate 

capability the parent reservation has on 

the flowgates impacted by the firm 

redirect request. TAPS suggests that the 

Commission require the posting of 

transmission capacity available for 

reassignment on the transmission 

provider’s OASIS. Cargill recommends 

that the reseller not remain responsible 

or liable to the transmission provider for 

the reassigned capacity if it is a 

complete reassignment (the full quantity 

of capacity for the remainder of the 

reservation) or if the reseller performs a 

long-term assignment of the reservation 

for any quantity up to the full amount 

of the capacity of the reservation. 

42. Seattle advocates a transition from 

comma separated data to structured 

XML data in order to enhance data 

exchange and validation between ‘‘frontend’’ and ‘‘back-end systems’’ used by 

transmission customers and providers. 

It also advocates more meaningful forms 

of transaction umbrella agreements, 

such as the WSPP agreement. EPSA 

advocates consistent rules about posting 

the entities and market participants that 

have active umbrella agreements with 

the transmission provider. It says that 

such postings would give competitive 

suppliers transparency about which 

market participants can purchase 

reassigned capacity. 

3. Commission Determination 

43. The Commission declines to 

implement the non-rate reforms 

proposed in this proceeding at this time. 

Although some of these proposals may 

have merit, we are unable to make a 

determination that they are appropriate 

at this time based on the record in this 

proceeding. With respect to the issues 

raised by Seattle and EPSA regarding 

data structures, such issues are best 

addressed through the standards 

development process of the North 

American Energy Standards Board, 

which sets voluntary wholesale electric 

market standards including those 

related to data exchanges and posting 

requirements. 

III. Information Collection Statement 

44. The following collection of 

information contained in this proposed 

rule is subject to review by the Office of 

Management and Budget (OMB) under 

section 3507(d) of the Paperwork 

Reduction Act of 1995.47 OMB’s 

regulations require OMB to approve 

certain information collection 

requirements imposed by agency rule.48

Burden Estimate: The public reporting 

and records retention burdens for the 

reporting requirements and the records 

retention requirement are as follows.49

The Commission solicited comments on 

the need for this information and did 

not receive any specific comments 

regarding its burden estimates. Where 

commenters raised concerns that 

specific information collection 

requirements would be burdensome to 

implement, the Commission has 

addressed those concerns elsewhere in 

the rule. 

Data collection Number of 

respondents 

Number of 

responses 

Hours per 

response 

Total annual 

hours 

Conforming tariff changes ............................................................................... 132 1 10 1,320 

Cost To Comply: $150,480 

1,320 hours @ $114 an hour (average 

cost of attorney ($200 per hour), 

consultant ($150), technical ($80), and 

administrative support ($25)) 

OMB’s regulations require it to 

approve certain information collection 

requirements imposed by an agency 

rule. The Commission is submitting a 

copy of this Final Rule to OMB for their 

review approval of the information 

collection requirements. 

Title: FERC–516, Electric Rate 

Schedules and Tariff Filings; FERC–717 

Standards for Business Practices and 

Communication Protocols for Public 

Utilities. 

Action: Collection 

OMB Control Nos. 1902–0096 and 

1902–0173 

Respondents: Transmission Providers 

Frequency of responses: One time. 

Necessity of the Information: 

45. The Federal Energy Regulatory 

Commission is adopting amendments to 

the pro forma OATT to ensure that 

transmission services are provided on a 

basis that is just, reasonable and not 

unduly discriminatory or preferential. 

The purpose of this rulemaking is to 

strengthen the pro forma OATT by 

encouraging more robust competition. 

The Final Rule achieves this goal by 

removing the price cap previously 

imposed on reassignments of 

transmission capacity. 

46. Interested persons may obtain 

information on the reporting 

requirements by contacting the 

following: Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426, [Attention: 

Michael Miller, Office of the Executive 


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50Regulations Implementing the National 

Environmental Policy Act, Order No. 486, 52 FR 

47897 (December 17, 1987), FERC Stats. & Regs., 

Regulations Preambles 1986–1990 ¶ 30,783 (1987). 51 18 CFR 380.4(a)(15) (2010). 52 5 U.S.C. 601–612 (2006). 53The sources for this figure are FERC Form No. 

1 and FERC Form No. 1–F data. 54 Id. 55The Regulatory Flexibility Act defines a ‘‘small 

entity’’ as ‘‘one which is independently owned and 

operated and which is not dominant in its field of 

operation.’’ See 5 U.S.C. 601(3) and 601(6)(2000); 15 

U.S.C. 632(a)(1) (2000). In Mid-Tex Elec. Coop. v. 

FERC, 773 F.2d 327, 340–343 (DC Cir. 1985), the 

court accepted the Commission’s conclusion that, 

since virtually all of the public utilities that it 

regulates do not fall within the meaning of the term 

‘‘small entities’’ as defined in the Regulatory 

Flexibility Act, the Commission did not need to 

prepare a regulatory flexibility analysis in 

connection with its proposed rule governing the 

allocation of costs for construction work in progress 

(CWIP). The CWIP rules applied to all public 

utilities. The revised pro forma OATT will apply 

only to those public utilities that own, control or 

operate interstate transmission facilities. These 

entities are a subset of the group of public utilities 

found not to require preparation of a regulatory 

flexibility analysis for the CWIP rule. 

56 5 U.S.C. 553(d) (2006). 

57 5 U.S.C. 553(b)(B) (2006). 

Director, Phone: (202) 502–8415, fax: 

(202) 273–0873, e-mail: 

michael.miller@ferc.gov.] 

47. For submitting comments 

concerning the collections of 

information and the associated burden 

estimate(s), please send your comments 

to the contact listed above and to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, 725 17th Street, NW., 

Washington, DC 20503 [Attention: Desk 

Officer for the Federal Energy 

Regulatory Commission, phone: (202) 

395–4638, fax: (202) 395–7285. Due to 

security concerns, comments should be 

sent electronically to the following email address: 

oira_submission@omb.eop.gov. Please 

reference the docket number of this 

rulemaking in your submission. 

IV. Environmental Analysis 

48. The Commission is required to 

prepare an Environmental Assessment 

or an Environmental Impact Statement 

for any action that may have a 

significant adverse effect on the human 

environment.50 The Commission 

concludes that neither an 

Environmental Assessment nor an 

Environmental Impact Statement is 

required for this Final Rule under 

section 380.4(a)(15) of the Commission’s 

regulations, which provides a 

categorical exemption for approval of 

actions under sections 205 and 206 of 

the Federal Power Act (FPA) relating to 

the filing of schedules containing all 

rates and charges for the transmission or 

sale subject to the Commission’s 

jurisdiction, plus the classification, 

practices, contracts and regulations that 

affect rates, charges, classifications and 

services.51

V. Regulatory Flexibility Act 

49. The Regulatory Flexibility Act of 

1980 (RFA) 52 generally requires a 

description and analysis of Final Rules 

that will have significant economic 

impact on a substantial number of small 

entities. This Final Rule applies to 

public utilities that own, control, or 

operate interstate transmission facilities, 

not to electric utilities per se. The total 

number of public utilities that, absent 

waiver, would have to modify their 

current OATTs by filing the revised pro 

forma OATT is 176.53 Of these only six 

public utilities, or less than two percent, 

dispose of four million MWh or less per 

year.54 The Commission does not 

consider this a substantial number, and 

in any event, these small entities may 

seek waiver of these requirements.55

Moreover, the criteria for waiver that 

would be applied under this rulemaking 

for small entities is unchanged from that 

used to evaluate requests for waiver 

under Order Nos. 888 and 889. Thus, 

small entities who have received waiver 

of the requirements to have on file an 

open access tariff or to operate an 

OASIS would be unaffected by the 

requirements of this proposed 

rulemaking. 

VI. Document Availability 

50. In addition to publishing the full 

text of this document in the Federal 

Register, the Commission provides all 

interested persons an opportunity to 

view and/or print the contents of this 

document via the Internet through 

FERC’s Home Page (http://www.ferc.gov) 

and in FERC’s Public Reference Room 

during normal business hours (8:30 a.m. 

to 5 p.m. Eastern time) at 888 First 

Street, NE., Room 2A, Washington DC 

20426. 

51. From FERC’s Home Page on the 

Internet, this information is available on 

eLibrary. The full text of this document 

is available on eLibrary in PDF and 

Microsoft Word format for viewing, 

printing, and/or downloading. To access 

this document in eLibrary, type the 

docket number excluding the last three 

digits of this document in the docket 

number field. 

52. User assistance is available for 

eLibrary and the FERC’s Web site during 

normal business hours from FERC 

Online Support at (202) 502–6652 (toll 

free at 1–866–208–3676) or e-mail at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. E-mail the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

VII. Effective Date and Congressional 

Notification 

53. These regulations shall become 

effective September 24, 2010. Section 

553(d) of the Administrative Procedure 

Act (APA) generally requires a rule to be 

effective not less than 30 days after 

publication in the Federal Register 

unless, inter alia, the rule relieves a 

restriction or good cause is otherwise 

found to shorten the time period.56

Section 553(b)(B) of the APA authorizes 

agencies to dispense with certain 

procedures when the agency, for good 

cause, finds that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to public interest.’’ 57 For the following 

reasons the Commission is using the 

‘‘Good Cause’’ exemption. This Final 

Rule must become effective by 12 a.m. 

on October 1, 2010 or the price cap on 

reassignments of electric transmission 

capacity will be reinstated. Reinstating 

the price cap would impose a restriction 

on the rights of transmission customers. 

Thus, this Final Rule relieves a 

restriction. Furthermore, the 

Commission finds that good cause exists 

to make this Final Rule effective 

immediately because allowing the price 

cap to be reinstated temporarily could 

disrupt the efficient management of the 

secondary market for electric 

transmission capacity and reduce 

opportunities for further reduction of 

transmission congestion. 

54. The Commission has determined, 

with the concurrence of the 

Administrator of the Office of 

Information and Regulatory Affairs of 

OMB, that this rule is not a ‘‘major rule’’ 

as defined in section 351 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. 

List of Subjects in 18 CFR Part 35 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

Note: The following Appendices will not 

appear in the Code of Federal Regulations. 

BILLING CODE 6717–01–P 


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[FR Doc. 2010–23836 Filed 9–23–10; 8:45 am] 

BILLING CODE 6717–01–C 

DEPARTMENT OF DEFENSE 

Department of the Navy 

32 CFR Part 706 

Certifications and Exemptions Under 

the International Regulations for 

Preventing Collisions at Sea, 1972 

AGENCY: Department of the Navy, DoD. 

ACTION: Final rule. 

SUMMARY: The Department of the Navy 

(DoN) is amending its certifications and 

exemptions under the International 

Regulations for Preventing Collisions at 

Sea, 1972 (72 COLREGS), to reflect that 

the Deputy Assistant Judge Advocate 

General (DAJAG) (Admiralty and 

Maritime Law) has determined that 

certain vessels of the PC–1 Class are 

vessels of the Navy which, due to their 

special construction and purpose, 

cannot fully comply with certain 

provisions of the 72 COLREGS without 

interfering with their special functions 

as naval ships. The intended effect of 

this rule is to warn mariners in waters 

where 72 COLREGS apply. 

DATES: This rule is effective September 

24, 2010 and is applicable beginning 

September 8, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Lieutenant Commander Ted Cook, 

JAGC, U.S. Navy, Admiralty Attorney, 

(Admiralty and Maritime Law), Office of 

the Judge Advocate General, Department 

of the Navy, 1322 Patterson Ave., SE., 

Suite 3000, Washington Navy Yard, DC 

20374–5066, telephone number: 202– 

685–5040. 

SUPPLEMENTARY INFORMATION: Pursuant 

to the authority granted in 33 U.S.C. 

1605, the DoN amends 32 CFR part 706. 

This amendment provides notice that 

the DAJAG (Admiralty and Maritime 

Law), under authority delegated by the 

Secretary of the Navy, has certified that 

certain vessels of the PC–1 Class are 

vessels of the Navy which, due to their 

special construction and purpose, 

cannot fully comply with the following 

specific provisions of 72 COLREGS 

without interfering with their special 

function as naval ships: Rule 21(a) 

pertaining to the arc of visibility of a 

masthead light. The DAJAG (Admiralty 

and Maritime Law) has also certified 

that the lights involved are located in 

closest possible compliance with the 

applicable 72 COLREGS requirements. 

Moreover, it has been determined, in 

accordance with 32 CFR parts 296 and 

701, that publication of this amendment 

for public comment prior to adoption is 

impracticable, unnecessary, and 

contrary to public interest since it is 

based on technical findings that the 

placement of lights on this vessel in a 

manner differently from that prescribed 

herein will adversely affect the vessel’s 

ability to perform its military functions. 

List of Subjects in 32 CFR Part 706 

Marine safety, Navigation (water), and 

Vessels. 

■ For the reasons set forth in the 

preamble, the DoN amends part 706 of 

title 32 of the CFR as follows: 

PART 706—CERTIFICATIONS AND 

EXEMPTIONS UNDER THE 

INTERNATIONAL REGULATIONS FOR 

PREVENTING COLLISIONS AT SEA, 

1972 

■ 1. The authority citation for part 706 

continues to read as follows: 

Authority: 33 U.S.C. 1605. 

■ 2. Section 706.2 is amended in Table 

Three by removing the entry for USS 


hsrobinson on DSK69SOYB1PROD with RULESER24SE10.258</GPH>