Document ID: FERC-2012-0198-0001
Agency: ferc
Document Type: Notice
Title: Workshops: Allocation of Capacity on New Merchant Transmission Projects and New Cost-Based, Participant-Funded Transmission Projects, etc.
Posted Date: 2012-02-06T05:00Z

[Federal Register Volume 77, Number 24 (Monday, February 6, 2012)]
[Notices]
[Pages 5791-5793]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2575]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

 Notice of Workshop

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                                                   Docket No.
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Allocation of Capacity on New Merchant  AD12-9-000
 Transmission Projects and New Cost-
 Based, Participant-Funded
 Transmission Projects.
Priority Rights to New Participant-     AD11-11-000
 Funded Transmission.
Puget Sound Energy, Inc...............  EL10-72-001
National Grid Transmission Services     EL11-49-000
 Corporation Bangor Hydro Electric
 Company.
Rock Island Clean Line LLC............  ER12-365-000
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    Take notice that Federal Energy Regulatory Commission (Commission) 
staff will convene a workshop to obtain input on potential reforms to 
the Commission's policies governing the allocation of capacity on new 
merchant transmission projects and new cost-based, participant-funded 
electric transmission projects. The workshop will be held on Tuesday, 
February 28, 2012, from 9 a.m. to 1:15 p.m. (EST), at the offices of 
the Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426. Members of the Commission may attend.
    Advance registration is not required, but is encouraged. You may 
register at the following Web page: https://www.ferc.gov/whats-new/registration/capacity-workshop-2-28-12-form.asp.
    Attached to this notice is an agenda for the workshop. If any 
changes are made, the revised agenda will be posted prior to the event 
on the Calendar of Events on the Commission's Web site, www.ferc.gov.
    This workshop is not intended to address the substance of any 
particular case pending before the Commission. However, out of an 
abundance of caution, notice is hereby given that discussions at the 
workshop may touch upon matters at issue in the above-referenced 
individual proceedings that are either pending or within their 
rehearing period.
    The format of the workshop is a facilitated discussion with those 
persons attending the workshop. As such, there will be no panelists or 
presentations from participants. We encourage people to attend in 
person. However, if that is not possible, the Commission will provide a 
listen-only line. If you need a listen-only line, please email Sarah 
McKinley (Sarah.McKinley@ferc.gov) by 5 p.m. (EST) on Thursday, 
February 23, with your name, email, and phone number, in order to 
receive the call-in information the day before the conference. Please 
use the following text for the subject line, ``AD12-9-000 listen-only 
line registration.''
    The workshop will not be transcribed nor webcast. The Commission 
will be accepting comments following the workshop from all interested 
parties. Comments will be due within 30 days of the workshop.
    FERC workshops are accessible under section 508 of the 
Rehabilitation Act of 1973. For accessibility accommodations please 
send an email to accessibility@ferc.gov or call toll free (866) 208-
3372 (voice) or (202) 502-8659 (TTY), or send a fax to (202) 208-2106 
with the requested accommodations.

FOR FURTHER INFORMATION PLEASE CONTACT: 
Andrew Weinstein (Legal Information), Federal Energy Regulatory 
Commission, Office of the General

[[Page 5792]]

Counsel, 888 First Street NE., Washington, DC 20426, (202) 502-6230, 
andrew.weinstein@ferc.gov.
Becky Robinson (Technical Information), Federal Energy Regulatory 
Commission, Office of Energy Policy & Innovation, 888 First Street NE., 
Washington, DC 20426, (202) 502-8868, becky.robinson@ferc.gov.

    Dated: January 31, 2012.
Kimberly D. Bose,
Secretary.
[GRAPHIC] [TIFF OMITTED] TN06FE12.006

Allocation of Capacity on New Merchant Transmission Projects and New 
Cost-Based, Participant-Funded Transmission Projects

AD12-9-000
February 28, 2012
Agenda
9-9:15 a.m. Welcome and Opening Remarks

    In March 2011, the Commission convened a conference to examine, 
among other things, the process of allocating transmission capacity of 
new transmission projects, including projects by merchant transmission 
developers at negotiated rates \1\ and participant-funded projects 
being developed by incumbent public utility transmission providers and 
nonincumbent transmission developers at cost-of-service based rates.\2\ 
Having analyzed the discussion and comments received, Commission staff 
is reviewing a range of more specific policy reforms that the 
Commission may wish to consider. The purpose of this workshop is to 
obtain input on possible policy reforms, balancing open access 
principles with the needs of transmission developers to reasonably 
allocate capacity created by new merchant transmission projects and new 
cost-based, participant-funded transmission projects. Each session will 
consist of a facilitated dialogue; there will be no panelists or 
presentations by participants.
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    \1\ See, e.g., Chinook Power Transmission, LLC, 126 FERC ] 
61,134 (2009) (Chinook).
    \2\ See, e.g., Northeast Utilities Service Co. and NSTAR 
Electric Co., LLC, 127 FERC ] 61,179, reh'g denied, 129 FERC ] 
61,279 (2009) (NU/NSTAR); Grasslands Renewable Energy, LLC, 133 FERC 
] 61,225 (2010) (Grasslands).

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9:15-11:15 a.m. Session 1: Merchant Transmission Projects

    Commission staff seeks to explore the merits of potential reforms 
to the Commission's policies governing negotiated rate authority for 
merchant transmission projects. Prior to the Chinook order in 2009, the 
Commission required that all merchant transmission capacity be 
allocated during an open season. In Chinook and subsequent proceedings, 
the Commission has permitted flexible capacity allocations on a case-
by-case basis with some share of capacity allowed for anchor customer 
presubscriptions and the remainder being allocated in a subsequent open 
season. In SunZia,\3\ the Commission rejected a request to allocate 100 
percent of a line's capacity to anchor customers, finding that the 
applicant did not provide sufficient justification to support that 
allocation. The Commission, however, did not foreclose the possibility 
that an applicant could propose and justify a 100 percent capacity 
allocation to anchor customers. During a technical conference held in 
March 2011 in Docket No. AD11-11-000, several commenters suggested that 
the Commission allow 100 percent of a line's capacity to be allocated 
to an anchor customer.\4\
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    \3\ SunZia Transmission, LLC, 131 FERC ] 61,162 (2010).
    \4\ Priority Rights to New Participant-Funded Transmission, 
March 15, 2011 Technical Conference, AD11-11-000. Tr. 21:24, 45:2.
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    Staff seeks comment regarding whether it would be appropriate for 
the Commission to return to the pre-Chinook requirement for open 
seasons as the means to allocate all capacity on a merchant 
transmission line, but also to allow for distinctions among prospective 
customers in the open season based on transparent and not unduly 
discriminatory criteria, with the possible result that a single 
customer could be awarded up to 100 percent of capacity. Staff also 
wants to explore the use of the terms open season and anchor customer 
as used by industry. While petitioners have characterized certain 
parties as anchor customers, staff has noticed that at times the 
process used to select these looks like what staff would consider an 
open season. In evaluating whether this policy change would be an 
appropriate action for the Commission, participants are encouraged to 
consider the following questions:
    1. Would the above-noted approach provide similar benefits as 
presubscription of anchor customers? If not, in what ways does 
presubscription of anchor customers enable a project to succeed that 
are not also satisfied by allocating up to 100 percent of capacity 
through an open season, including to a single customer?
    2. In the event of an oversubscription in an open season, would it 
be appropriate for the Commission to clarify that there is no 
obligation to prorate capacity allocations where bids are 
distinguishable by transparent and not unduly discriminatory criteria, 
such as creditworthiness, term of service sought, price bid, and net 
present value?
    3. What criteria should the Commission use in evaluating whether a 
developer has appropriately sized a line?
    4. Given the protections afforded by the open season process, 
should the Commission permit affiliates of the merchant transmission 
developer to be awarded up to 100 percent of capacity in the open 
season?
    5. What are the characteristics of a well-designed open season 
process? Are there lessons learned from the use of open seasons for 
natural gas pipeline development that are relevant to merchant 
development of electric transmission?
    6. Are the existing open season reporting requirements adequate to 
provide transparency as to how capacity rights are allocated?
    7. Should the Commission retain its practice of considering 
responses to requests for proposals (RFP) by a merchant transmission 
developer to satisfy open season requirements, provided that any 
capacity in excess of the RFP amount be allocated through an open 
season? \5\

    \5\ See Hudson Transmission Partners, LLC, 135 FERC ] 61,104 
(2011).
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11:15 a.m.-11:30 a.m. Break
11:30 a.m.-1 p.m. Session 2: Cost-Based, Participant-Funded 
Transmission Projects

    Staff also seeks to explore the merits of potential reforms to 
Commission policies regarding the development of participant-funded 
transmission projects at cost-based rates. In recent years, the 
Commission has received innovative proposals from transmission 
developers seeking to construct facilities for the use of specific 
customers in exchange for recovering the cost of the facilities from 
those customers.\6\ To date, the Commission has not required the use of 
open seasons for customer solicitation for these projects, nor has it 
required transmission providers to follow service request procedures 
set

[[Page 5793]]

forth in the pro forma Open Access Transmission Tariff (OATT).
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    \6\ See NU/NSTAR and Grasslands.
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    As the Commission receives similar proposals in the future, staff 
anticipates that questions of customer access to capacity for such 
cost-based projects will arise. In resolving these questions, staff 
also anticipates that the nature of the transmission developer may be 
relevant, with potential distinctions made between incumbent public 
utility transmission providers and nonincumbent transmission 
developers.\7\ With regard to incumbent public utility transmission 
providers, staff seeks comment regarding whether it would be 
appropriate for the Commission to adopt a policy requiring such 
entities to use service request and transmission planning rules 
contained in their OATTs for the development of all new transmission 
facilities. With regard to nonincumbent transmission developers, staff 
seeks comment on whether it would be appropriate for the Commission to 
adopt a policy requiring such entities to allocate capacity on new 
cost-based, participant-funded projects pursuant to an open season, 
similar to the development of merchant transmission projects.\8\ In 
evaluating whether these would be appropriate actions for the 
Commission, participants are encouraged to consider the following 
questions:
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    \7\ Nonincumbent transmission developers include a transmission 
developer that does not currently have a retail distribution service 
territory or footprint as well as public utility transmission 
providers proposing transmission projects outside of their existing 
retail distribution service territory or footprint. A similar 
distinction was made in Order No. 1000. Transmission Planning and 
Cost Allocation by Transmission Owning and Operating Public 
Utilities, Order No. 1000, 136 FERC ] 61,051 at P 225 (2011).
    \8\ In the alternative, the nonincumbent transmission developer 
could use the service request and transmission planning rules of the 
pro forma OATT to allocate capacity on a project, even where the 
developer is not yet a public utility.
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    1. Would it be appropriate for the Commission to distinguish for 
this purpose between incumbent public utility transmission providers 
and nonincumbent transmission developers, given that the former have a 
set of rules in place to govern the processing of service requests and 
planning of grid expansion, while the latter do not?
    2. Is requiring incumbent public utility transmission providers to 
use the service request and transmission planning rules contained in 
their OATTs when allocating capacity on cost-based, participant-funded 
lines necessary to ensure transparent planning of transmission 
expansion?
    3. Would requiring incumbent public utility transmission providers 
to use the service request and transmission planning rules contained in 
their OATTs when allocating capacity on cost-based, participant-funded 
lines undermine the ability of some projects to succeed? If so, how?
    4. Is requiring nonincumbent transmission developers to allocate 
capacity on cost-based, participant-funded projects through an open 
season necessary to ensure that such developers have sufficient 
information to make appropriate sizing decisions and avoid undue 
discrimination among customers?
    5. Would requiring nonincumbent transmission developers to allocate 
capacity on cost-based, participant-funded projects through an open 
season undermine the ability of some projects to succeed? If so, how?
    6. For purposes of allocating capacity on cost-based, participant-
funded projects, would it be appropriate for the Commission to treat a 
nonincumbent transmission developer as an incumbent public utility 
transmission provider once it energizes transmission facilities?

1-1:15 p.m. Wrap-Up

[FR Doc. 2012-2575 Filed 2-3-12; 8:45 am]
BILLING CODE 6717-01-P