Document ID: FERC-2008-0606-0001
Agency: ferc
Document Type: Proposed Rule
Title: Annual Charges Assessments for Public Utilities
Posted Date: 2008-04-28T04:00Z

[Federal Register: April 28, 2008 (Volume 73, Number 82)]
[Proposed Rules]               
[Page 22867-22871]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28ap08-22]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 382

[Docket No. AD08-7-000]

 
Annual Charges Assessments for Public Utilities

April 21, 2008.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Inquiry.

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SUMMARY: In this Notice of Inquiry, the Commission is seeking comments 
on its current methodology for the assessment of electric annual 
charges to public utilities, in particular, whether that methodology 
remains fair and equitable, and on alternative methodologies. As 
provided in its current regulations, the Commission recovers the costs 
of its electric regulatory program through filing fees and, as 
particularly relevant here, annual charges assessed to public utilities 
that provide transmission service, based on the volume of electricity 
transmitted. This methodology reflects that regulation of transmission 
providers, transmission facilities and transmission service is central 
to Commission regulation, and that the transmission grid is the 
interstate highway system for wholesale power sales. This Notice will 
enable the Commission to determine whether its current methodology 
remains fair and equitable, and to review alternative methodologies.

DATES: Comments are due May 28, 2008.

ADDRESSES: Interested persons may submit comments, identified by Docket 
No. AD08-7-000, by any of the following methods:
     eFiling: Comments may be filed electronically via the 
eFiling link on the Commission's Web site at http://www.ferc.gov. 
Documents created electronically using word processing software should 
be filed in the native application or print-to-PDF format and not in a 
scanned format. This will enhance document retrieval for both the 
Commission and the public. The Commission accepts most standard word 
processing formats and commenters may attach additional files with 
supporting information in certain other file formats. Attachments that 
exist only in paper form may be scanned. Commenters filing 
electronically should not make a paper filing. Service of rulemaking 
(or Notice of Inquiry) comments is not required.
     Mail/Hand Delivery: Commenters that are not able to file 
electronically must mail or hand deliver an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Secretary of 
the Commission, 888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: For further information contact:
Lawrence R. Greenfield (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6415.
Richard M. Wartchow (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8744.
Troy D. Cole (Technical Information), Director, Division of Financial 
Services, Office of the Executive Director, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6161.

SUPPLEMENTARY INFORMATION: 
    1. In this Notice of Inquiry, the Commission is seeking comments on 
its current methodology for the assessment of electric annual charges 
to public utilities, in particular, whether that methodology remains 
fair and equitable, and on alternative methodologies.\1\ As provided in 
its current regulations, the Commission recovers the costs of its 
electric regulatory program through filing fees and, as particularly 
relevant here, annual charges assessed to public utilities that provide 
transmission service, based on the volume of electricity transmitted. 
This methodology reflects that regulation of transmission providers, 
transmission facilities and transmission service is central to 
Commission regulation, and that the transmission grid is the interstate 
highway system for wholesale power sales. This Notice will enable the 
Commission to determine whether its current methodology remains fair 
and equitable, and to review alternative methodologies.
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    \1\ This Notice of Inquiry is limited to the assessment of 
annual charges to public utilities regulated under Parts II and III 
of the Federal Power Act (FPA). It does not, therefore, address the 
assessment of charges for the Commission's hydroelectric, natural 
gas or oil pipeline regulatory programs. It also does not address 
recovery of Federal power marketing agency (PMA)-related costs or 
electric filing fees (the latter are separately charged for, among 
other things, petitions for declaratory orders, Commission staff 
interpretations and certain qualifying facility-related filings).
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    2. Although the Commission has held in the past that industry 
concerns did not justify a change to the annual charges methodology, in 
response to continued expressions of concern the Commission is issuing 
this Notice of Inquiry to seek comment on whether the existing 
methodology remains an appropriate means to recover the costs of the 
Commission's electric regulatory program or whether there is another 
more appropriate alternative. The Commission seeks to ascertain whether 
those industry concerns, although not determinative previously, may now 
be more valid and, if so, to review alternative proposals for the 
recovery of the Commission's electric regulatory program costs. The 
Commission also invites interested parties to submit in this proceeding 
their views on other possible changes to the Commission's annual 
charges regulations.

[[Page 22868]]

I. Background

A. Commission Authority

    3. The Commission is required by section 3401 of the Omnibus Budget 
Reconciliation Act of 1986 (Budget Act)\2\ to ``assess and collect fees 
and annual charges in any fiscal year in amounts equal to all of the 
costs incurred * * * in that fiscal year.'' \3\ The annual charges must 
be computed based on methods which the Commission determines to be 
``fair and equitable.'' \4\ The Conference Report accompanying the 
Budget Act provides the Commission with the following guidance as to 
this phrase's meaning:
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    \2\ 42 U.S.C. 7178 (2000).
    \3\ This authority is in addition to that granted to the 
Commission in sections 10(e) and 30(e) of the FPA. See 16 U.S.C. 
803(e), 823a(e).
    \4\ 42 U.S.C. 7178(b).

    [A]nnual charges assessed during a fiscal year on any person may 
be reasonably based on the following factors: (1) The type of 
Commission regulation which applies to such person such as a gas 
pipeline or electric utility regulation; (2) the total direct and 
indirect costs of that type of Commission regulation incurred during 
such year; \5\ (3) the amount of energy--electricity, natural gas, 
or oil--transported or sold subject to Commission regulation by such 
person during such year; and (4) the total volume of all energy 
transported or sold subject to Commission regulation by all 
similarly situated persons during such year.\6\
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    \5\ The Commission is required to collect not only all its 
direct costs but also all its indirect expenses such as hearing 
costs and indirect personnel costs. See H.R. Conf. Rep. No. 99-1012 
at 238 (1986), reprinted in 1986 U.S.C.C.A.N. 3868, 3883 (Conference 
Report); see also S. Rep. No. 99-348 at 56, 66 and 68 (1986).
    \6\ See Conference Report at 238. The Commission may assess 
these charges by making estimates based upon data available to it at 
the time of the assessment. 42 U.S.C. 7178(c).

    4. The Commission's annual charges do not enable the Commission to 
collect amounts in excess of its expenses, but merely serve as a 
vehicle to reimburse the United States Treasury for the Commission's 
expenses.\7\
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    \7\ 42 U.S.C. 7178(f). Congress approves the Commission's budget 
through annual and supplemental appropriations.
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B. Current Annual Charges Billing Procedure

    5. As required by the Budget Act, the Commission's regulations 
provide for the payment of annual charges by public utilities to fund 
the Commission's electric regulatory program.\8\ The Commission intends 
that these annual charges in any fiscal year will recover the 
Commission's estimated electric regulatory program costs (other than 
the costs of regulating PMAs and the electric regulatory program costs 
recovered through electric filing fees) for that fiscal year. In the 
next fiscal year, the Commission adjusts its annual charges up or down, 
as appropriate, both to eliminate any over-or under-recovery of the 
Commission's actual costs and to eliminate any over-or under-charging 
of any particular person.\9\
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    \8\ 18 CFR Part 382 (2007); see Revision of Annual Charges 
Assessed to Public Utilities, Order No. 641, FERC Stats. & Regs. ] 
31,109 (2000), order on reh'g, Order No. 641-A, 94 FERC ] 61,290 
(2001). The Commission's regulations define its electric regulatory 
program as ``the Commission's regulation of the electric industry 
under Parts II and III of the Federal Power Act; Public Utility 
Regulatory Policies Act; Powerplant and Industrial Fuel Use Act; 
Department of Energy Organization Act; Energy Security Act; 
Regulatory Flexibility Act; Pacific Northwest Electric Power 
Planning and Conservation Act; Flood Control and River and Harbor 
Acts; Bonneville Project Act; Federal Columbia River Transmission 
Act; Reclamation Project Act; Nuclear Waste Policy Act; National 
Environmental Policy Act; and the Public Utility Holding Company 
Act.'' 18 CFR 382.102.
    \9\ 18 CFR 382.201; accord Annual Charges Under the Omnibus 
Budget Reconciliation Act of 1986, Order No. 507, FERC Stats. & 
Regs. ] 30,839, at 31,263-64 (1988); Texas Utilities Electric 
Company, 45 FERC ] 61,007, at 61,027 (1988).
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    6. When the Commission first developed an annual charge methodology 
for public utilities in response to the Budget Act, it assessed charges 
based on two types of wholesale electricity service: transmission and 
wholesale sales in interstate commerce.\10\ However, in Order No. 641, 
the Commission determined that the sweeping changes in the industry 
occurring in the late 1980's and the 1990's had changed the industry 
landscape, which consequently changed the nature of the Commission's 
work.
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    \10\ See Annual Charges Under the Omnibus Budget Reconciliation 
Act of 1986, Order No. 472, FERC Stats. & Regs. ] 30,746 (1987), 
clarified, Order No. 472-A, FERC Stats. & Regs. ] 30,750, order on 
reh'g, Order No. 472-B, FERC Stats. & Regs. ] 30,767 (1987), order 
on reh'g, Order No. 472-C, 42 FERC ] 61,013 (1988).
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    7. In Order No. 641, the Commission noted that open access 
transmission, functional unbundling, and the rapid movement to market-
based power sales rates brought about by Order No. 888, state retail 
unbundling, and Order No. 2000 encouraging the formation of regional 
transmission organizations (RTOs) caused the Commission's time and 
effort to be increasingly devoted to assuring open and equal access to 
public utilities' transmission systems. Order No. 641 anticipated that 
wholesale power rates would be increasingly disciplined by competitive 
market forces and less by direct regulation, and the Commission's 
workload had, in fact, moved away from its traditional focus on review 
of bilateral power sales agreements and instead focused increasingly on 
transmission. In order to reflect those changes, Order No. 641 changed 
the Commission's annual charges methodology to recover its electric 
regulatory program costs by assessing charges solely on the MWh of 
electric energy transmitted in interstate commerce by public utilities 
providing transmission service, rather than on both jurisdictional 
power sales and transmission volumes, as in the past.\11\
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    \11\ Order No. 641, FERC Stats. & Regs. ] 31,109 at 31,848-49; 
accord Annual Charges Under the Omnibus Budget Reconciliation Act of 
1986 (Phibro Inc.), 81 FERC ] 61,308, at 31,843-56 (1997) (Phibro 
Inc.).
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    8. As such, sections 382.201(a) and (b) of the Commission's 
regulations provide that the costs of the Commission's administration 
of its electric regulatory program (excluding the costs of regulating 
the PMAs such as the Bonneville Power Administration,\12\ and electric 
regulatory program costs recovered through electric filing fees \13\) 
are assessed to public utilities that provide transmission service 
based on the comparative amount of transmission that they provide;\14\ 
those that have provided more transmission service (i.e., more MWhs) 
are charged more, and those that have provided less transmission 
service (i.e., less MWhs) are charged less.\15\
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    \12\ The PMAs such as the Bonneville Power Administration are 
the subject of a separate assessment. 18 CFR 382.201(d).
    \13\ The Commission's case-specific filing fees are spelled out 
in Part 381 of the Commission's regulations. 18 CFR Part 381.
    \14\ 18 CFR 382.201(a), (b).
    \15\ See Order No. 641-A, 94 FERC ] 61,290 at 62,038.
    \16\ The Commission's regulations define public utility, for the 
purpose of assessing annual charges, as ``any person who owns or 
operates facilities subject to the jurisdiction of the Commission 
under Parts II and III of the Federal Power Act, and who has rate 
schedule(s) on file with the Commission and who is not a `qualifying 
small power producer' or a `qualifying cogenerator,' as those terms 
are defined in section 3 of the Federal Power Act, or the United 
States or a state, or any political subdivision of the United States 
or a state, or any agency, authority, or instrumentality of the 
United States, a state, political subdivision of the United States, 
or political subdivision of a state.'' 18 CFR 382.102.
    In addition, the current electric annual charges are assessed 
based on transmission service, and thus exclude power marketers, 
which typically do not provide transmission service. 17 18 CFR 
382.201; see Phibro Inc., 81 FERC ] 61,308 at 62,424-25.
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    9. In calculating annual charges, the Commission first determines 
the total costs of its electric regulatory program and subtracts all 
PMA-related costs and electric filing fee collections to determine 
total collectible electric regulatory program costs. It then uses the 
data submitted under FERC Reporting Requirement No. 582 (FERC 582) to 
determine the total volume of transmission and exchanges for all public 
utilities to be assessed.\16\ The Commission divides that transaction 
volume into its collectible electric regulatory program costs to 
determine

[[Page 22869]]

the unit charge per megawatt-hour. Finally, the Commission multiplies 
the transaction volume for each public utility to be assessed by the 
unit charge per megawatt-hour to determine the annual charges for each 
public utility.\17\
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    \17\ 18 CFR 382.201; see Phibro Inc., 81 FERC ] 61,308 at 
62,424-25.
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    10. In response to Order No. 641, certain public utilities and 
members of RTOs and independent system operators (ISO), including 
municipal utility and cooperative members, expressed concern that this 
annual charges methodology may be unfair and they alleged that the 
resulting annual charges fall more heavily on RTO and ISO members than 
on public utilities that are not RTO or ISO members. These concerns 
were initially raised in proceedings where RTO and ISO members objected 
to bills reflecting the charges determined under Order No. 641 and the 
underlying methodology. Although they did not seek timely rehearing of 
Order No. 641 itself, they sought rehearing of annual charges bills 
determined using the Order No. 641 methodology.\18\ In a second 
proceeding, three RTOs and ISOs filed a petition requesting that the 
Commission initiate a rulemaking proceeding to revise the Order No. 641 
methodology, seeking lower annual charges and questioning the 
assumptions that the Commission made in issuing Order No. 641.\19\
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    \18\ See Revision of Annual Charges to Public Utilities 
(California Independent System Operator), 101 FERC ] 61,043 
(California ISO Order), order dismissing reh'g, 101 FERC ] 61,326 
(2002) (California ISO Rehearing Order) (denying requests for 
rehearing filed by California Independent System Operator, Inc., New 
York Independent System Operator (New York ISO), Arizona Public 
Service Company, American Transmission Company, LLC, and American 
Transmission Services, Inc.).
    \19\ See Midwest Independent Transmission System Operator, Inc., 
103 FERC ] 61,048 (Midwest ISO Order), order denying reh'g, 104 FERC 
] 61,060 (2003) (Midwest ISO Rehearing Order) (denying petition for 
rulemaking filed by Midwest ISO, New York ISO and PJM 
Interconnection, LLC), aff'd, 388 F.3d 903 (D.C. Cir. 2004) (Midwest 
ISO Court Order).
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    11. Those proceedings raised arguments that charges should be 
assessed to power sales as well as transmission,\20\ challenges to the 
Commission's finding that its work was primarily focused on 
transmission regulation,\21\ assertions that annual charge allocations 
should reflect the transmission component of bundled retail sales,\22\ 
and claims that the Commission's annual charge assessments do not 
reflect the level of transmission service in various regions and unduly 
disadvantage RTOs. The proceedings also addressed the assertion that 
the Commission had erred in assessing charges to RTOs and ISOs based on 
services provided for non-jurisdictional members.\23\
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    \20\ Midwest ISO Rehearing Order, 104 FERC ] 61,060 at P 7.
    \21\ Id. P 9.
    \22\ Id. P 7 n.13.
    \23\ Midwest ISO Order, 103 FERC ] 61,048 at P 15 n.25; Midwest 
ISO Rehearing Order, 104 FERC ] 61,060 at P 7.
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    12. After noting that those arguments represented an untimely 
attempt to seek rehearing of Order No. 641, the Commission responded to 
the specifics of each issue. The Commission rejected the arguments that 
annual charges should be allocated to power sales and arguments 
questioning whether transmission was the Commission's primary 
regulatory focus by noting that, in contrast to the timeframe in which 
the Commission established its previous methodology, the Commission was 
then focused increasingly on transmission through efforts related to 
open access transmission service, interconnection policy, and RTO and 
ISO regulation.\24\ The Commission also noted that then-current market 
regulation efforts such as reforming western markets and promoting 
standard market design (SMD), while nominally related to power sales, 
were primarily focused on transmission issues.\25\ The Commission 
reported that its reform of western markets was concerned with 
transmission scheduling and constraints used to manipulate prices, and 
its SMD proposal incorporated a new open access transmission tariff and 
focused on congestion management procedures.\26\
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    \24\ Midwest ISO Order, 103 FERC ] 61,048 at P 11-12; Midwest 
ISO Rehearing Order, 104 FERC ] 61,060 at P 10.
    \25\ Id.
    \26\ Id.
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    13. The Commission rejected the suggestion that it should impose 
annual charges based on the transmission component of bundled retail 
sales, noting that such transactions formed no part of the Commission's 
work load at that time.\27\ The Commission also refuted the suggestion 
that the transaction volumes that it relied on were inaccurate and 
understated transmission service provided by certain utilities, by 
pointing out that the reported transaction volumes were subject to 
audit and correction and annual charge assessments would be updated to 
reflect any correction.\28\ Finally, the Commission justified assessing 
annual charges on public utilities based on transmission services that 
they provided to non-jurisdictional entities, noting that such charges 
were properly recoverable in rates from the non-jurisdictional utility 
and should be treated like any other cost of providing service.\29\
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    \27\ California ISO Order, 101 FERC ] 61,043 at P 15; see also 
Order No. 641-A, 94 FERC ] 61,290 at 62,038.
    \28\ Midwest ISO Order, 103 FERC ] 61,048 at P 13.
    \29\ Id. P 15 & n.25. In fact, since that order, the 
Commission's authority over such traditionally non-jurisdictional 
utilities has expanded with the passage of the Energy Policy Act of 
2005 (EPAct 2005). Compare 16 U.S.C. 824(f) with 16 U.S.C. 824j-
1(a)-(b), 824o(b), 824u, 824v (2000 & Supp. V 2005).
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    14. The Midwest ISO petitioned the United States Court of Appeals 
for the District of Columbia for review of the Commission's orders 
denying the petition for rulemaking. The court denied the petition, but 
noted the Commission's statement in the Midwest ISO Rehearing Order 
that ``the issues may merit further consideration at a later time.'' 
\30\
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    \30\ Midwest ISO Court Order, 388 F.3d at 923, citing Midwest 
ISO Rehearing Order, 104 FERC ] 61,060 at P 16.
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II. Discussion

    15. When the Commission issued Order No. 641, it determined that 
its regulatory focus was turning increasingly towards regulation of 
transmission service and away from a case-by-case review of wholesale 
power sales rates. In recognition of this focus on regulating 
transmission service, Order No. 641 provided for the Commission to 
recover the costs of its electric regulatory program (not otherwise 
recovered by, for example, filing fees) through annual charges assessed 
to public utilities that provide transmission service, based on the 
volume of electricity transmitted. Regulation of transmission 
providers, transmission facilities and transmission service remains at 
the heart of Commission regulation.
    16. Although the state of the industry in 2002 and 2003 did not 
justify a change to the Commission's methodology, the Commission stated

[[Page 22870]]

that it would reconsider its methodology when the issue merited further 
consideration. The Commission is now seeking through this Notice of 
Inquiry to determine whether subsequent developments make it 
appropriate to revisit Order No. 641 or otherwise suggest the need for 
changes to its methodology for assessing annual charges to recover its 
electric regulatory program costs.
    17. The Commission continues to devote substantial resources to 
oversight of transmission service. In February 2007, for example, the 
Commission issued Order No. 890, amending its regulations and reforming 
the pro forma open access transmission tariff to ensure that 
transmission services are provided on a just, reasonable and not unduly 
discriminatory or preferential basis.\31\ In addition, the Commission 
also continues to commit substantial resources to regulation of the 
development and operation of RTOs and ISOs. These transmission service 
providers, moreover, administer complex and comprehensive energy 
markets and transmission tariffs that serve broad regions--New England, 
New York, California, the mid-Atlantic and the Midwest, among others. 
These RTO/ISO markets are based on regional, security-constrained 
economic dispatch transmission service and locational-based marginal 
pricing, including transmission congestion charges. Therefore, although 
the Commission devotes some resources to power sales regulation through 
its regulation of these markets, the markets are fundamentally linked 
to transmission service. As a result, assessing annual charges based on 
transmission has been a fair and equitable means to allocate the costs 
of regulating these markets (with such costs, in turn, being 
incorporated into the RTO/ISO transmission rates). Moreover, the 
Commission devotes extensive resources to resolving hundreds of tariff 
filings by these entities and their members each year--and these 
filings are among the most complex that the Commission faces.
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    \31\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, FERC Stats. & Regs. ] 31,241, 
Order No. 890-A, FERC Stats. & Reg. ] 31,261 (2007).
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    18. The Commission thus continues to focus very significant 
resources on transmission,\32\ including implementation of new 
authority under EPAct 2005 to, among other things, approve and enforce 
mandatory reliability standards for the bulk-power system, which has as 
its center the interstate electric transmission grid.\33\ Order No. 
890, for example, established comprehensive requirements for 
coordinated, open and transparent transmission planning to facilitate 
the expansion of the transmission system and to address transmission 
congestion, which can result in higher energy prices, and other 
customer concerns.
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    \32\ The current electric annual charges methodology also has 
the advantages of being comparatively simple and easy to 
administer--a not insignificant concern. It is a methodology that, 
as well, has been challenged and upheld by the D.C. Circuit. See 
supra notes 18, 29.
    \33\ Pub. L. No 109-58, Title XII, Subtitle A, 119 Stat. 594 
(2005) (EPAct 2005) (amending the FPA, 16 U.S.C. 824, et seq.).
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    19. The RTOs and ISOs and their members in their earlier pleadings 
pointed out that all transmission service in RTOs and ISOs is regulated 
by this Commission and therefore annual charges are assessed on both 
wholesale and retail transmission service. This stands in contrast to 
annual charges paid by a public utility that is not an RTO or ISO 
member, which may provide both unbundled wholesale transmission service 
and bundled retail transmission service; for such public utilities, 
only the former transmission service is considered in allocating the 
Commission's electric regulatory program costs. This results in a 
comparatively high percentage of the Commission's annual charges being 
assessed to RTOs and ISOs.
    20. While the nature of Commission regulation of wholesale power 
sales has certainly changed since adoption of Order No. 641, the 
Commission continues to regulate wholesale power sales. Comprehensive 
wholesale power sales rate review proceedings are now comparatively 
rare. Instead of individual rate proceedings, the Commission reviews 
new market-based rate power sales applications, electric quarterly 
reports, and triennial filings and notices of changes in status for 
market-based rate power sellers. In 2004, the Commission revised the 
market-power analysis that is used to grant market-based rate 
authority, and, in 2007, clarified its market-based rate policies.\34\ 
Further, the Commission establishes market rules and mitigation rules 
for wholesale power sales. Finally, the Commission dedicates 
enforcement resources to investigating compliance with rules governing 
wholesale power sales.
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    \34\ Market-Based Rates for Wholesale Sales of Electric Energy, 
Capacity and Ancillary Services by Public Utilities, Order No. 697, 
72 FR 39904 (Jul. 20, 2007), FERC Stats. & Regs. ] 31,252, 
clarified, 121 FERC ] 61,260 (2007), order on rehearing, 123 FERC 
61,055 (2008).
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    21. These facts, in combination with new programs intended to 
implement new EPAct 2005 authority over certain mergers and other 
corporate transactions and to sanction market manipulation, warrant the 
Commission inquiring whether the current system remains fair and 
equitable, or whether the concerns previously raised by RTOs and ISOs, 
and their members, or other changes in the industry justify a change to 
the current electric annual charges methodology.
    22. If such a change is justified, the Commission requests 
comments, as described below, on whether other annual charges 
assessment methodologies are more suitable than the current 
methodology. Such alternate methodologies could include, but are not 
limited to: (i) Assessing annual charges based on jurisdictional 
wholesale power sales as well as transmission service,\35\ (ii) 
adopting different annual charge calculation methodologies for 
different types of public utilities to account for regional differences 
in market structure or to account for the fact that all RTO and ISO 
transmission service is considered when developing annual charges but 
that non-RTO and ISO members' bundled retail transmission service is 
not accounted for in annual charges, or (iii) determining annual 
charges using factors other than the volume of MWh transmitted in 
interstate commerce, such as peak load or transmission investment.
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    \35\ To the extent that a commenter advocates assessing annual 
charges based on wholesale power sales, such commenter should 
identify what utilities should be assessed annual charges and what 
transactions (and/or power sales volumes) should be used in 
developing such charges, as well as how the Commission would 
calculate such charges. For example, should the methodology reflect 
capacity sales, energy sales or both? Should the methodology reflect 
shorter-term transactions, longer-term transactions or both and 
should the methodology treat them similarly or should the 
methodology treat them differently (and, if so, how)? Given that the 
Commission does not separately track its resources devoted to 
transmission regulation versus those devoted to wholesale power 
sales regulation, how should the Commission allocate its costs 
between the two? Given that any alternative annual charges 
methodology adopted must be practical, i.e. must be a methodology 
that the Commission can administer without undue burden, such 
questions and others are important and necessitate answers.
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    23. The Commission requests that interested parties submit 
comments, taking into account the factors listed in the Conference 
Report for guidance, on the following inquiries:

    (A) Does the current electric annual charges assessment 
methodology remain a fair and equitable method for recovering the 
Commission's electric regulatory program costs, and why?
    (B) If the current electric annual charges assessment 
methodology is no longer a fair

[[Page 22871]]

and equitable method, please identify what alternative methodology 
is fair and equitable, and explain why, providing, where possible, 
empirical evidence to support any proposed methodology.
    (C) For any such alternative methodology, please identify, with 
specificity, what entities should be assessed electric annual 
charges and how such an alternative methodology would work,\36\ 
including what data the Commission would need to allocate the 
charges and how the Commission would obtain the data.
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    \36\ The Commission emphasizes the importance of this third 
question. Parties seeking a change in methodology are cautioned to 
give this question careful thought and thorough analysis. Broadly 
phrased requests that some other entities be charged will be less 
persuasive than specific recommendations as to which particular 
entities should be charged, and how.

III. Comment Procedures

    24. The Commission invites interested persons to submit comments on 
the matters and inquiries discussed in this notice, including any 
related matters or alternative proposals that commenters may wish to 
discuss. Comments are due May 28, 2008. Comments must refer to Docket 
No. AD08-7-000, and must include the commenter's name, the organization 
it represents, if applicable, and its address in their comments.
    25. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://
www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    26. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426.
    27. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters are not required to 
serve copies of their comments on other commenters.

IV. Document Availability

    28. 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 the Commission's Home Page (http://www.ferc.gov) and 
in the Commission'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.
    29. From the Commission'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.
    30. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at (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.

    By direction of the Commission.
Kimberly D. Bose,
Secretary.
 [FR Doc. E8-9199 Filed 4-25-08; 8:45 am]

BILLING CODE 6717-01-P