Document ID: FERC-2009-0452-0003
Agency: ferc
Document Type: Rule
Title: Standards for Business Practices and Communication Protocols for Public Utilities
Posted Date: 2009-12-03T05:00Z

[Federal Register: December 3, 2009 (Volume 74, Number 231)]
[Rules and Regulations]               
[Page 63288-63307]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de09-4]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 38

[Docket No. RM05-5-013; Order No. 676-E]

 
Standards for Business Practices and Communication Protocols for 
Public Utilities

Issued November 24, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
revising its regulations to incorporate by reference in its regulations 
at 18 CFR 38.2 the latest version (Version 002.1) of certain business 
practice standards adopted by the Wholesale Electric Quadrant of the 
North American Energy Standards Board (NAESB). NAESB's Version 002.1 
Standards include standards adopted by NAESB in response to Order Nos. 
890, 890-A, and

[[Page 63289]]

890-B. The Version 002.1 Standards we are incorporating by reference in 
this Final Rule modify NAESB's Commercial Timing Table (WEQ-004 
Appendix D) and Transmission Loading Relief Standards (WEQ-008) to 
provide clarity and align NAESB's business practice standards with the 
reliability standards adopted by the North American Electric 
Reliability Corporation, and amend certain ancillary services 
definitions appearing in the Open Access Same-Time Information Systems 
Standards (WEQ-001) relating to the inclusion of demand response 
resources as potential providers of ancillary services. Incorporating 
these revised standards by reference into the Commission's regulations 
will provide customers with information that will enable them to obtain 
transmission service on a non-discriminatory basis and will assist the 
Commission in supporting needed infrastructure and the reliability of 
the interstate transmission grid.

DATES: Effective Date: This Final Rule will become effective on January 
4, 2010. Dates for implementation of the standards are provided in the 
Final Rule. The Director of the Federal Register has approved the 
incorporation by reference of the standards addressed in the Final Rule 
effective January 4, 2010.

FOR FURTHER INFORMATION CONTACT:
Bruce McAllister (technical issues), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-8296.
Valerie Roth (technical issues), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-8538.
Ryan M. Irwin (technical issues), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street, 
NE., Washington, DC 20426, (202) 502-6454.
Gary D. Cohen (legal issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-8321.

SUPPLEMENTARY INFORMATION: 

Table of Contents

                                                              Paragraph
                                                               numbers

I. Background..............................................            3
II. Discussion.............................................           10
    A. Overview............................................           10
    B. Issues Raised by Commenters.........................           18
        1. Available Transfer Capability-Related Standards.           18
        2. Conditional Firm Service Standards..............           57
        3. Other Issues....................................           83
III. Implementation Dates and Procedures...................          122
    A. Commission Determination............................          126
IV. Notice of Use of Voluntary Consensus Standards.........          131
V. Information Collection Statement........................          132
VI. Environmental Analysis.................................          142
VII. Regulatory Flexibility Act Certification..............          144
VIII. Document Availability................................          146
IX. Effective Date and Congressional Notification..........          149

    1. The Federal Energy Regulatory Commission (Commission) is 
amending its regulations under the Federal Power Act (FPA) \1\ to 
incorporate by reference the latest version (Version 002.1) of certain 
business practice standards adopted by the Wholesale Electric Quadrant 
(WEQ) of the North American Energy Standards Board (NAESB). These 
revised standards update an earlier version of the standards that the 
Commission previously incorporated by reference into its regulations at 
18 CFR 38.2 in Order No. 676-C.\2\
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    \1\ 16 U.S.C. 791a, et seq.
    \2\ Standards for Business Practices and Communication Protocols 
for Public Utilities, Order No. 676-C, FERC Stats. & Regs., ] 31,274 
(2008), order on clarification and reh'g, Order No. 676-D, 124 FERC 
] 61,317 (2008).
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    2. The new and revised standards that NAESB adopted in the Version 
002.1 standards enable public utilities to implement requirements of 
Order Nos. 890, 890-A, and 890-B.\3\ In addition, these standards 
modify the Commercial Timing Table (WEQ-004 Appendix D) and 
Transmission Loading Relief Standards (WEQ-008) to provide clarity and 
align NAESB's business practice standards with the reliability 
standards adopted by the North American Electric Reliability 
Corporation (NERC), and amend certain ancillary services definitions 
appearing in the Open Access Same-Time Information Systems (OASIS) 
Standards (WEQ-001) relating to the inclusion of demand response 
resources as potential providers of ancillary services.\4\
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    \3\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, FERC Stats. & Regs. ] 31,241 
(2007); order on reh'g, Order No. 890-A, FERC Stats. & Regs. ] 
31,261 (2007); order on reh'g and clarification, Order No. 890-B, 
123 FERC ] 61,299 (2008).
    \4\ The Version 002.1 Standards also revise the Manual Time 
Error Correction Standards (WEQ-006) to maintain consistency with 
revised NERC Standard BAL-004, but we are not incorporating this 
standard by reference because the Commission's consideration of the 
revised BAL-004 is still pending. Thus, the earlier version of WEQ-
006 will remain in force.
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I. Background

    3. NAESB is a non-profit standards development organization 
established in January 2002 that serves as an industry forum for the 
development of business practice standards that promote a seamless 
marketplace for wholesale and retail natural gas and electricity.\5\ 
Since 1995, NAESB and its predecessor, the Gas Industry Standards 
Board, have been accredited members of the American National Standards 
Institute (ANSI), complying with ANSI's requirements that its standards 
reflect a consensus of the affected industries.\6\
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    \5\ See Standards for Business Practices and Communication 
Protocols for Public Utilities, Notice of Proposed Rulemaking, FERC 
Stats. & Regs. ] 32,612, at P 3 (2007) (Version 2.1 NOPR).
    \6\ Id.
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    4. NAESB's standards include business practices that streamline the 
transactional processes of the natural gas and electric industries, as 
well as communication protocols and related standards designed to 
improve the efficiency of communication within each industry. NAESB 
supports all four quadrants of the gas and electric industries--
wholesale gas, wholesale electric, retail gas, and retail electric. All 
participants in the gas and electric industries are eligible to join 
NAESB

[[Page 63290]]

and participate in standards development.\7\
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    \7\ Id. P 4.
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    5. NAESB's procedures are designed to ensure that all industry 
members can have input into the development of a standard, whether or 
not they are members of NAESB, and each standard NAESB adopts is 
supported by a consensus of the six industry segments: transmission, 
generation, marketer/brokers, distribution/load serving entities, end 
users, and independent grid operators/planners. Under the WEQ process, 
for a standard to be approved, it must receive a super-majority vote of 
67 percent of the members of the WEQ's Executive Committee with support 
from at least 40 percent of each of the six industry segments.\8\ For 
final approval, 67 percent of the WEQ's general membership must ratify 
the standards.\9\
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    \8\ Under NAESB's procedures, interested persons may attend and 
participate in NAESB committee meetings, and phone conferences, even 
if they are not NAESB members.
    \9\ Version 2.1 NOPR, P 5.
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    6. On September 2, 2008, NAESB reported to the Commission that its 
WEQ Executive Committee had approved Version 002.0 of its business 
practice standards.\10\ NAESB states that its leadership responded to 
Order Nos. 890, 890-A, and 890-B, by requesting that its Electronic 
Scheduling Subcommittee/Information Technology Subcommittee (ESS/ITS) 
and its Business Practice Subcommittee (BPS) coordinate efforts to 
address the issues raised by those orders. NAESB states that the ESS/
ITS and BPS worked in close coordination with the pertinent NERC 
committees to draft business practice standards on Order No. 890 issues 
that complement the NERC reliability standards related to these issues, 
so that the standards for both organizations would be consistent.\11\
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    \10\ See NAESB supplemental report dated Nov. 14, 2008.
    \11\ The Commission is addressing the associated reliability 
standards adopted by NERC in a companion final rule being issued in 
Docket No. RM08-19-000. Mandatory Reliability Standards for the 
Calculation of Available Transfer Capability, Capacity Benefit 
Margins, Transmission Reliability Margins, Total Transfer 
Capability, and Existing Transmission Commitments and Mandatory 
Reliability Standards for the Bulk-Power System, Final Rule, FERC 
Stats. & Regs. 129 FERC ] 61,155 (ATC Final Rule).
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    7. On February 19, 2009, NAESB notified the Commission that the WEQ 
Executive Committee had approved its Version 002.1 standards, which 
include both new standards and modifications to existing Version 002.0 
standards.\12\ The Version 002.1 standards include new standards 
related to capacity benefit margin and rollover rights, and were 
developed in response to Order Nos. 890, 890-A, and 676-C. Additional 
modifications included in the Version 002.1 standards include: (1) 
Modifications to existing standards pertaining to rollover rights; (2) 
modifications to the Coordinate Interchange Timing Tables contained in 
Appendix D of the Coordinate Interchange Standards (WEQ-004) to clarify 
the differences in timing requirements for the Western Electricity 
Coordinating Council and all other interconnections, complementary to 
the NERC reliability standards; and (3) modifications to the 
Transmission Loading Relief--Eastern Interconnection Standards (WEQ-
008) to add clarity and ensure that the business practice standards are 
consistent with NERC reliability standard IRO-006. The Version 002.1 
standards supersede and fully replace Version 002.0. To simplify our 
discussion, unless otherwise stated, we will refer to the new standards 
collectively as Version 002.1.
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    \12\ On March 12, 2009, NAESB submitted a report to the 
Commission documenting its ratification of the Version 002.1 
standards.
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    8. On March 19, 2009, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) proposing to incorporate by reference in its 
regulations at 18 CFR 38.2 certain \13\ NAESB WEQ Version 002.1 
Business Practice Standards.\14\ In response to this notice, thirteen 
timely comments, and one late-filed reply comment were filed.\15\
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    \13\ See infra n.6.
    \14\ Standards for Business Practices and Communication 
Protocols for Public Utilities, Notice of Proposed Rulemaking, 74 FR 
16160 (Apr. 9, 2009), FERC Stats. & Regs. ] 32,640 (Mar. 19, 2009) 
(WEQ Version 002.1 NOPR).
    \15\ The Commission will consider all the comments filed in 
response to the WEQ Version 002.1 NOPR, including Arizona Public 
Service Company's (APS) late-filed reply comment. The Commission 
received comments from the following entities: American Wind Energy 
Association (AWEA); APS; Bonneville Power Administration 
(Bonneville); Duke Energy Corporation (Duke); Electric Power Supply 
Association (EPSA); Entergy Services, Inc. (Entergy); ISO/RTO 
Council (IRC); National Rural Electric Cooperative Association 
(NRECA) and American Public Power Association (APPA) (collectively, 
NRECA/APPA); New York Independent System Operator, Inc. (NYISO); 
North Carolina Electric Membership Corporation (NCEMC); Open Access 
Technology International, Inc. (OATI); TranServ International, Inc. 
(TranServ); and Transmission Access Policy Study Group (TAPS).
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    9. On July 7, 2009, and October 9, 2009, NAESB filed reports with 
the Commission stating that it made minor corrections to Standards WEQ-
001, WEQ-003, WEQ-004, and WEQ-008, and corrections to Standard WEQ-
008, which consisted of it deleting WEQ-008-1.4 and WEQ-008 Appendix D 
from Standard WEQ-008. These corrections were ratified by NAESB's 
members and unanimously adopted by WEQ's Executive Committee.

II. Discussion

A. Overview

    10. In this Final Rule, the Commission is amending its regulations 
under the FPA to incorporate by reference the NAESB WEQ Version 002.1 
standards that the Commission proposed to incorporate in the WEQ 
Version 002.1 NOPR.\16\ Most of the changes included in the Version 
002.1 standards were made to support the requirements that the 
Commission established in Order Nos. 890, 890-A, and 890-B, in which 
the Commission took action to prevent undue discrimination under the 
pro forma open access transmission tariff (OATT).
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    \16\ Consistent with our proposal in the WEQ Version 002.1 NOPR, 
we are not revising our regulations to incorporate by reference the 
following standards: Standards of Conduct for Electric Transmission 
Providers (WEQ-009); Contracts Related Standards (WEQ-010); and WEQ/
WGQ eTariff Related Standards (WEQ-014). We are not incorporating 
WEQ-009 into the Commission's regulations because it contains no 
substantive standards and merely serves as a placeholder for future 
standards. We are not incorporating WEQ-010 into the Commission's 
regulations because this standard contains an optional NAESB 
contract regarding funds transfers and the Commission does not 
require utilities to use such contracts. We are not incorporating 
WEQ-014, eTariff Related Standards, into the Commission's 
regulations, because the Commission already has adopted standards 
and protocols for electronic tariff filing based on the NAESB 
standards. See Electronic Tariff Filings, FERC Stats. & Regs. ] 
31,276 (2008). We are not incorporating NAESB's interpretation of 
its standards on Gas/Electric Coordination (WEQ-011) into the 
Commission's regulations because, while interpretations may provide 
useful guidance, they are not determinative and we will not require 
utilities to comply with interpretations. Further, as discussed more 
specifically below, we are incorporating by reference into the 
Commission's regulations portions of WEQ-001, but are not 
incorporating the entire standard. Finally, we are not at this time 
incorporating by reference NAESB's Manual Time Error Correction 
Standards (WEQ-006) because this standard was developed to maintain 
consistency with NERC Standard BAL-004, and the Commission's review 
of BAL-004 is still pending. Thus, the existing version of WEQ-006 
will remain in force.
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    11. In Order No. 890, the Commission specifically requested that 
NAESB seek to develop business practice standards governing the terms 
and conditions of conditional firm service and the posting requirements 
for available transfer capability, its calculation, and other values. 
We recognize that NAESB was faced with a difficult task in seeking to 
develop industry consensus for standards that establish a set of 
business practice and communication standards to govern an entirely new 
service (conditional firm service), as well as the other changes 
envisioned by Order No. 890. For the most part, the industry has

[[Page 63291]]

reached a remarkable level of consensus on these standards. We 
recognize that not every standard enjoys universal support, and that 
standardization, by its very nature, requires the reconciliation of 
different interests and needs. The Commission is satisfied that NAESB's 
process was open and fair. We therefore find that deference to the 
considered judgment of the consensus of the industry is both reasonable 
and appropriate. Although we give great weight to the industry 
consensus, we also have reviewed these standards alongside our Order 
No. 890 requirements and find that they satisfy these requirements, 
except in a small number of cases discussed below.
    12. In the NAESB WEQ Version 002.1 standards, NAESB has included 
business practice and technical standards to support conditional firm 
service, which will provide additional transmission and flexibility to 
customers. Additionally, NAESB has developed standards that govern the 
posting requirements for available transfer capability-related 
information, including narratives explaining changes in available 
transfer capability and total transfer capability, and explaining 
underlying load forecast assumptions for available transfer capability 
calculations and actual peak load. This will improve transparency for 
customers and allows them to validate available transfer capability 
calculations.
    13. As to the minor corrections that the NAESB Executive Committee 
filed with the Commission on May 29, 2009 and October 9, 2009, the 
Commission agrees with NAESB that these corrections are non-substantive 
errata corrections, and we will incorporate these corrections by 
reference to ensure the standards we adopt are as accurate and up-to-
date as possible.
    14. The specific NAESB standards that we are incorporating by 
reference in this Final Rule are:
     Open Access Same-Time Information Systems (OASIS), Version 
1.5 (WEQ-001, Version 002.1, March 11, 2009, with minor corrections 
applied May 29, 2009 and September 8, 2009); \17\
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    \17\ With the exception of Standards 001-0.1, 001-0.9 through 
001-0.13, 001-1.0, 001-9.7, 001-14.1.3, and 001-15.1.2. The Version 
1.5 OASIS standards (WEQ-001, WEQ-002, WEQ-003, and WEQ-013) are 
included in the NAESB WEQ Version 002.1 Standards. While they are 
now developed by NAESB, the OASIS standards were initially developed 
by an industry working group, and are therefore designated as both 
Version 1.5 and Version 002.1. Version 1.5 references an update to 
the designation applied by the original working group, and Version 
002.1 references their inclusion in the NAESB WEQ Version 002.1 
Standards.
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     Open Access Same-Time Information Systems (OASIS) 
Standards & Communications Protocols, Version 1.5 (WEQ-002, Version 
002.1, March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009);
     Open Access Same-Time Information Systems (OASIS) Data 
Dictionary, Version 1.5 (WEQ-003, Version 002.1, March 11, 2009, with 
minor corrections applied May 29, 2009 and September 8, 2009);
     Coordinate Interchange (WEQ-004, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
     Area Control Error (ACE) Equation Special Cases (WEQ-005, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);
     Inadvertent Interchange Payback (WEQ-007, Version 002.1, 
March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009);
     Transmission Loading Relief--Eastern Interconnection (WEQ-
008, Version 002.1, March 11, 2009, with minor corrections applied May 
29, 2009 and September 8, 2009);
     Gas/Electric Coordination (WEQ-011, Version 002.1, March 
11, 2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
     Public Key Infrastructure (PKI) (WEQ-012, Version 002.1, 
March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009); and
     Open Access Same-Time Information Systems (OASIS) 
Implementation Guide, Version 1.5 (WEQ-013, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009).
    15. The NAESB WEQ approved the Version 002.1 Standards under 
NAESB's consensus procedures.\18\ As the Commission found in Order No. 
587, adoption of consensus standards is appropriate because the 
consensus process helps ensure the reasonableness of the standards by 
requiring that the standards draw support from a broad spectrum of 
industry participants representing all segments of the industry. 
Moreover, since the industry itself has to conduct business under these 
standards, the Commission's regulations should reflect those standards 
that have the widest possible support. In section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (NTT&AA), Congress 
affirmatively requires federal agencies to use technical standards 
developed by voluntary consensus standards organizations, like NAESB, 
as means to carry out policy objectives or activities.\19\
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    \18\ This process first requires a super-majority vote of 17 out 
of 25 members of the WEQ's Executive Committee with support from at 
least 40 percent of each of the five industry segments. For final 
approval, 67 percent of the WEQ's general membership voting must 
ratify the standards.
    \19\ Public Law 104-113, section 12(d), 110 Stat. 775 (1996), 15 
U.S.C. 272 note (1997).
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    16. The Commission will require public utilities to modify their 
open access transmission tariffs (OATTs) to include the standards that 
we are incorporating by reference in this Final Rule. In the past, to 
reduce the filing burden, we allowed public utilities to postpone 
making a separate tariff filing making this tariff modification and 
allowed them to include this revision as part of an unrelated 
subsequent tariff filing.\20\ In this case, however, as compliance with 
the standards will not be required for more than a year from the 
issuance of this rule, we will require the tariff filing to be made at 
least 90 days before the compliance date (i.e., on or before the first 
day of the first quarter occurring 365 days after approval of the NERC 
Reliability Standards being addressed in Docket No. RM08-19-000 by all 
applicable regulatory authorities). Public utilities may still, at 
their option, combine this tariff filing with an unrelated separate 
tariff filing, so long as the tariff filing is made at least 90 days 
before the compliance date. As we did in Order No. 676,\21\ we clarify 
that, to the extent a public utility's OASIS obligations are 
administered by an independent system operator (ISO) or regional 
transmission operator (RTO) and are not covered in the public utility's 
OATT, the public utility will not need to modify its OATT to include 
the OASIS standards.
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    \20\ See Order No. 676, FERC Stats. & Regs. ] 31,216, P 100 
(2006). As discussed further below, in order to align the 
implementation date for the NAESB WEQ Version 002.1 standards with 
that of the related NERC reliability standards being addressed in 
the proceeding in Docket No. RM08-19-000, we are not requiring 
compliance with the standards we are incorporating by reference in 
this Final Rule until the first day of the first quarter occurring 
365 days after approval of the referenced Reliability Standards by 
all applicable regulatory authorities. In making its required tariff 
filing, each filing utility is to use the language specified later 
in this order, see infra P 129.
    \21\ Standards for Business Practices and Communication 
Protocols for Public Utilities, Final Rule, Order No. 676, FERC 
Stats. & Regs. ] 31,216, P 20 (2006).
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    17. The following sections address the issues raised by the 
commenters.\22\
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    \22\ In the discussion below, we will discuss the issues raised 
by commenters. We are incorporating by reference without further 
discussion those standards that were not the subject of any adverse 
comments.

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[[Page 63292]]

B. Issues Raised by Commenters

1. Available Transfer Capability-Related Standards
    18. In Order No. 890, we directed public utilities, working through 
NERC reliability standards and NAESB business practices development 
processes, to produce workable solutions to complex and contentious 
issues surrounding improving the consistency and transparency of 
available transfer capability calculations.\23\ As described in the 
NOPR, NAESB developed several standards related to available transfer 
capability in response to Order No. 890. First, NAESB modified WEQ-001 
to support the transparency reporting and related functions required by 
Order No. 890. Second, in response to the available transfer capability 
related posting requirements established by the Commission in Order No. 
890, NAESB has developed business practice standards in WEQ-001 
(including Standards 001-14, 001-15, 001-17, 001-18, 001-19, 001-20 and 
Appendix D), WEQ-002, WEQ-003 and WEQ-013 (including Appendices A and 
B).\24\ We address below the comments filed with respect to these 
standards.
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    \23\ Order No. 890, P 196.
    \24\ Id. P 369 and 371.
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a. Standard 001-13.1.5 (ATC Information Link)
    19. NAESB developed Standard 001-13.1.5, which provides for an ATC 
Information Link on OASIS, in close coordination with the NERC 
available transfer capability drafting team. Standard 001-13.1.5 
replaces NERC MOD-003, which NERC and NAESB determined were better 
classified as business practice standards than reliability standards.
    20. In the WEQ Version 002.1 NOPR, the Commission proposed to 
incorporate by reference Standard 001-13.1.5, which provides for an ATC 
Information Link on OASIS and requires Transmission Providers to post 
links to their Available Transfer Capability Implementation Document, 
Capacity Benefit Margin Implementation Document, and Transmission 
Reserve Margin Implementation Document (as specified in NERC 
reliability standards MOD-001-1, MOD-004-1, and MOD-008-1, 
respectively). Under NERC Standard MOD-001-1 R3.2, the Available 
Transfer Capability Implementation Document must include a 
``description of the manner in which the Transmission Service Provider 
will account for counterflows.''
    21. In addition, the Commission made clear in the WEQ Version 002.1 
NOPR that it expected that the provision in Standard 001-13.1.5 
affording Transmission Providers the ability to redact sensitive 
information would be implemented by Transmission Providers subject to 
the OATT in a manner consistent with the Transmission Provider's 
obligation to make that information available to those with a 
legitimate need to access the information, subject to appropriate 
confidentiality restrictions.
i. Comments
    22. Several commenters \25\ request that the implementation date 
for posting the Available Transfer Capability Information Link required 
by Standard 001-13.1.5 coincide with the effective implementation date 
for implementing the NERC reliability standards relating to available 
transfer capability currently before the Commission, as the documents 
to which links must be provided under Standard 001-13.1.5 are described 
in these NERC standards.
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    \25\ APS at 2-3, Duke at 4, and Entergy at 6-7.
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    23. TAPS \26\ supports the Commission's interpretation of the 
proposed business practices, particularly Standard 001-13.1.5.\27\ TAPS 
states that it is essential for customers to have timely access to 
available transfer capability- and service request-related information. 
This will allow customers to verify the amount of transmission that 
appears to be available for purchase, thereby enhancing the 
Commission's goals of transparency, reliability, and competition.
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    \26\ TAPS is an association of transmission-dependent utilities 
in more than 30 states.
    \27\ TAPS at 3-4.
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    24. EPSA is critical of Standard 001-13.1.5. EPSA comments that the 
standard affords transmission providers the ability to redact certain 
information due to market, security or reliability sensitivity 
concerns, but provides no definition or guidance as to what constitutes 
such concerns, thereby allowing transmission providers the flexibility 
to post whatever information they so choose.\28\ EPSA requests that the 
Commission make explicit that nothing in these standards limits 
customers' ability to specifically request available transfer 
capability-related information subject to appropriate confidentiality 
protections and Critical Energy Infrastructure Information (CEII) 
requirements, as specified in Order No. 890-A.\29\
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    \28\ EPSA at 16.
    \29\ Order No. 890-A, P 148.
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    25. EPSA also argues that Standard 001-13.1.5 results in a ``fill-
in-the-blank'' standard governing the treatment of counterflows. EPSA 
claims that the standard will result in different calculation 
methodologies by different transmission providers. Because Standard 
001-13.1.5 permits transmission providers to redact information due to 
market, security, or reliability sensitivity concerns, EPSA also 
contends that transmission providers will have unfettered discretion 
with respect to their obligations to post the methodology that they use 
to account for counterflows.\30\
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    \30\ EPSA at 17.
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    26. APS requests that the Commission clarify that the 
Implementation Documents and Postback Methodology in the NAESB and NERC 
standards fulfill the requirements and detail specified in Order No. 
890 for Attachment C. If the Commission does not believe that the 
Implementation Documents and Postback Methodology from the NERC and 
NAESB standards meet the requirements of Order No. 890 for the purpose 
of Attachment C, APS requests that the Commission clarify the 
difference between the Order No. 890 requirements and the documentation 
requirements found in the NERC and NAESB standards.
    27. Additionally, APS asks for clarification that the statement in 
Order No. 890 that a ``revised Attachment C to [the] Open Access 
Transmission Tariff (OATT) be made within 60 days of completion of the 
NERC and NAESB process'' means that a revised Attachment C to the OATT 
must be filed within 60 days of the later effective date of the NERC 
standards or NAESB standards.\31\
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    \31\ APS at 3.
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ii. Commission Determination
    28. NAESB's Standard 001-13.1.5 represents a consensus approach 
agreeable to all six segments of the industry, and is not inconsistent 
with Commission policies. Therefore, we will incorporate the standard 
by reference as proposed in the WEQ Version 002.1 NOPR.
    29. In response to EPSA's concerns relating to the redaction of 
information under Standard 001-13.1.5, we reiterate the statement we 
made in the WEQ Version 002.1 NOPR that we expect the provision for a 
transmission provider to redact sensitive information from postings to 
be implemented by a transmission provider subject to the OATT in a 
manner consistent with its obligation to make that information 
available to those with a legitimate need to access the information, 
subject to appropriate confidentiality

[[Page 63293]]

restrictions.\32\ We also clarify that these standards do not limit 
transmission customers' ability to request nor relieve transmission 
providers of their obligation to provide, subject to appropriate 
confidentiality protections and CEII requirements, data relating to the 
calculation of available transfer capability, as required by the 
Commission in Order Nos. 890 and 890-A.\33\ With these clarifications, 
we will incorporate Standard 001-13.1.5 into our regulations as we 
proposed in the WEQ Version 002.1 NOPR.
---------------------------------------------------------------------------

    \32\ See Order No. 890, P 403-04 (requiring the development of 
standard disclosure for timely disclosure of CEII information to 
those with a legitimate need for it).
    \33\ See Order No. 890, P 348 and Order No. 890-A, P 148.
---------------------------------------------------------------------------

    30. As to EPSA's argument that Standard 001-13.1.5 allows 
transmission providers unfettered discretion with respect to their 
obligations to post the methodology that they use to account for 
counterflows, we again emphasize that we expect transmission providers 
subject to the OATT to implement this standard in a manner consistent 
with their obligation to make any redacted information available to 
those with a legitimate need to access it, subject to appropriate 
confidentiality restrictions. Moreover, Order No. 890 did not prescribe 
the exact methodology to account for counterflows, nor did it find that 
there could only be a single acceptable methodology for determining 
this available transfer capability component. The NAESB standards 
address the posting requirements for the document. Responsibility for 
developing the methodology to account for counterflows rests with NERC, 
and not NAESB.\34\
---------------------------------------------------------------------------

    \34\ See MOD-008-1.
---------------------------------------------------------------------------

    31. APS requests clarification that the Implementation Documents 
and Postback Methodology required to be posted on OASIS by Standard 
001-13.1.5 fulfill the requirements and detail specified in Order No. 
890 for Attachment C. The information that the Commission requires 
transmission providers to include in their Attachment C and the 
information that transmission providers are required to include in 
their Implementation Documents under NERC reliability standards MOD-
001-1, MOD-004-1, and MOD-008-1 and Postback Methodology under NAESB 
Standard 001-18 (Postback Requirements) are not identical.
    32. For example, some of the required components of an Attachment C 
include a detailed description of the specific mathematical algorithm 
used to calculate firm and non-firm available transfer capability/
available flowgate capacity for the transmission provider's scheduling 
horizon, operating horizon, and planning horizon; a process flow 
diagram that illustrates the various steps through which available 
transfer capability/available flowgate capacity is calculated; and a 
detailed explanation of how each of the available transfer capability 
components (including total transfer capability, existing transmission 
commitments, capacity benefit margin, and transmission reserve margin) 
is calculated for both the operating and planning horizons. In 
contrast, some of the requirements of the Implementation Documents 
include a description of how the available transfer capability/
available flowgate capacity calculation methodology is implemented; a 
description of how the transmission provider will account for 
counterflows; the other transmission providers and/or transmission 
operators from which a given transmission provider receives data or to 
which it supplies data; the procedure and assumptions that a 
transmission provider uses to establish capacity benefit margin; the 
process through which a load-serving entity can request to set aside or 
use capacity benefit margin; and the components used to calculate 
transmission reserve margin. Thus, we clarify here that the 
Implementation Documents and Postback Methodology are not sufficient to 
satisfy the requirements and detail specified in Order No. 890 for 
Attachment C, as the information that they require to be posted is not 
the same as the information that Commission requires to be included in 
Attachment C.
    33. Moreover, the Commission has determined that it is necessary 
for the information presented in Attachment C to be included in the 
tariff, not simply to be posted on OASIS as is required of the 
information included in the Implementation Documents and Postback 
Methodology by the Standard 001-13.1.5. In Order No. 890, the 
Commission rejected proposals to address the transparency of available 
transfer capability methodology by merely referencing business 
practices and reliability standards. Specifically, the Commission found 
that because available transfer capability calculations have a direct 
and tangible effect on the granting of open access transmission 
service, ``an accurate and detailed statement of the methodology and 
its components that defines how the transmission provider determines 
available transfer capability belongs in the transmission provider's 
OATT as the means of holding the transmission provider accountable for 
following non-discriminatory procedures for granting service, not in 
the business practices kept by the transmission provider.'' \35\ Thus, 
we likewise clarify here that the Implementation Documents and Postback 
Methodology that must be posted on OASIS under Standard 001-13.1.5 are 
separate and distinct from the requirements and detail specified in 
Order No. 890 for Attachment C, which must be included in the 
transmission provider's OATT.\36\
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    \35\ Order No. 890, P 325.
    \36\ We also note that in the companion rulemaking in Docket No. 
RM08-19-000 the Commission found that the requirement to provide 
this information is not overly burdensome. See ATC Final Rule at P 
147.
---------------------------------------------------------------------------

    34. Lastly, we clarify that the NAESB Version 002.1 standards and 
the related NERC reliability standards will have the same 
implementation date.\37\ In addition, the revised Attachment C to the 
OATT should be filed early enough so that it is approved and in place 
by the time the NERC reliability standards become enforceable. This 
being the case, we are directing public utilities to file a revised 
Attachment C to the OATT on or before 275 days after approval of the 
NERC Reliability Standards being addressed in Docket No. RM08-19-000 by 
all applicable regulatory authorities. This will leave 90 days for 
review and approval of these filings before the NERC reliability 
standards become enforceable.
---------------------------------------------------------------------------

    \37\ See supra P 16 & n.20.
---------------------------------------------------------------------------

b. Standards 001-14 and 001-15 (Available Transfer Capability 
Narratives)
    35. In the WEQ Version 002.1 NOPR, the Commission proposed to 
incorporate by reference Standard 001-14, which was developed by NAESB 
to meet the requirement in Order No. 890 for transmission providers to 
post a narrative in instances when available transfer capability 
remains unchanged at a value of zero for six months or longer. In 
addition, the Commission also proposed to incorporate by reference 
Standard 001-15, which requires transmission providers to post a brief 
narrative that explains the reason for a change in monthly or yearly 
available transfer capability values on a constrained path when a 
monthly or yearly available transfer capability value changes as a 
result of a 10 percent change in total transfer capability.
i. Comments
    36. Entergy requests that the Commission clarify that, where a 
transmission provider is not required to convert available flowgate 
capability

[[Page 63294]]

values to available transfer capability values for posting, the values 
to be used to fulfill the posting requirements set forth in Standard 
001-14 and 001-15 are the values calculated and posted by the 
transmission provider, i.e., in Entergy's circumstance, available 
flowgate capability values. Entergy submits that this interpretation is 
supported not only by the Commission's statement in Order No. 890-B, 
but also by the NERC reliability standards, the inclusion of ``Other'' 
as reasons for zero available transfer capability in Standard 001-14, 
and the specific inclusion of total flowgate capacity as an underlying 
assumption in Standard 001-15.\38\
---------------------------------------------------------------------------

    \38\ Entergy at 7-8.
---------------------------------------------------------------------------

    37. EPSA contends that Standard 001-15, while consistent with the 
requirements of Order No. 890, does not reflect the underlying goals of 
the Commission in Order No. 890.\39\ EPSA argues that the standard 
allows transmission providers five business days to post a narrative, 
provides no linkage between the duration of the contingency that has 
caused the reduction in total transfer capability and the resulting 
changes in available transfer capability/available flowgate capability, 
and does not require a narrative posting by a transmission provider 
when an outage on an adjacent system affects the original transmission 
provider's available transfer capability. EPSA states that these 
current requirements are insufficient to promote market transparency.
---------------------------------------------------------------------------

    \39\ EPSA at 13.
---------------------------------------------------------------------------

ii. Commission Determination
    38. In this Final Rule, we will incorporate by reference Standards 
001-14 and 001-15, with the exception of Standards 001-14.1.3 and 001-
15.1.2. As explained further below, we decline to incorporate Standards 
001-14.1.3 and 001-15.1.2 by reference, as they permit transmission 
providers to post an available transfer capability change narrative 
within five business days of meeting the criteria under which a 
narrative is required to be posted, which is inconsistent with the 
Commission's rejection in Order No. 890 of delays in posting data.\40\
---------------------------------------------------------------------------

    \40\ Order No. 890, P 370.
---------------------------------------------------------------------------

    39. In regards to Entergy's question of whether the transmission 
provider's calculated and posted available flowgate capability values 
should be used to fulfill the posting requirements set forth in 
Standard 001-14 and 001-15 in instances where there is no requirement 
to convert this calculation to available transfer capability values, we 
agree with Entergy that this requirement can be met by the transmission 
provider posting its available flowgate capability values. As to EPSA's 
argument that Standard 001-15 falls short of the goals of Order No. 
890, we find that, with the exception of Standard 001-15.1.2, 
compliance with Standard 001-15 provides all of the information 
required by Order No. 890. However, Standards 001-14.1.3 and 001-15.1.2 
permit transmission providers to post an available transfer capability 
change narrative within five business days of meeting the criteria 
under which a narrative is required to be posted. In Order No. 890, the 
Commission rejected calls for delays prior to posting data and required 
posting as soon as possible.\41\ We do not find the NAESB standard 
meets this criterion and therefore decline to incorporate Standards 
001-14.1.3 and 001-15.1.2 by reference. Transmission providers must 
post their narratives as soon as feasibly possible. Posting within one 
day would appear in most cases to be reasonable.
---------------------------------------------------------------------------

    \41\ Id. P 370, where the Commission rejected calls for delays 
prior to posting data, finding that commenters supporting delay had 
``proffered no evidence to support the allegation of potential 
harm.''
---------------------------------------------------------------------------

c. Standard 001-16.1 (Available Transfer Capability or Available 
Flowgate Capability Methodology Questions)
    40. In the WEQ Version 002.1 NOPR, we proposed to incorporate by 
reference Standard 001-16.1, which requires transmission providers to 
respond to questions about the methodology for calculating available 
transfer capability and available flowgate capability. In the NOPR, we 
interpreted this standard as requiring the transmission provider to 
provide data when necessary to respond to the methodology questions in 
order to be consistent with the requirement in Order No. 890 that 
transmission providers must, upon request, ``make available all data 
used to calculate [available transfer capability] and [total transfer 
capability] for any constrained paths and any system planning studies 
or specific network impact studies performed for customers.'' \42\
---------------------------------------------------------------------------

    \42\ Id. P 348.
---------------------------------------------------------------------------

i. Comments
    41. TAPS supports the Commission's interpretation of the proposed 
business practices for the disclosure of available transfer capability 
and transmission service related data. It also supports the 
Commission's pro-transparency interpretation of NAESB Standard 001-16.1 
which requires transmission providers to provide data used to calculate 
available transfer capability and total transfer capability for any 
constrained path upon request. TAPS states that timely access to 
available transfer capability and service request information and a 
transparent and accurate available transfer capability calculation 
process will encourage competition.
ii. Commission Determination
    42. Standard 001-16.1 represents a consensus approach agreeable to 
all six segments of the industry, and, as we interpret the standard, is 
not inconsistent with Commission policies. Therefore, as proposed in 
the WEQ Version 002.1 NOPR, we will incorporate Standard 001-16.1 by 
reference into our regulations. We reiterate our interpretation of this 
standard, as described in the WEQ Version 002.1 NOPR. We expect that 
transmission providers will implement this standard in a manner 
consistent with the requirement in Order No. 890 that transmission 
providers must, upon request, ``make available all data used to 
calculate [available transfer capability] and [total transfer 
capability] for any constrained paths and any system planning studies 
or specific network impact studies performed for customers'' \43\ by 
providing data when necessary to respond to methodology questions.
---------------------------------------------------------------------------

    \43\ Order No. 890, P 348.
---------------------------------------------------------------------------

d. Actual and Forecasted Load Posting
    43. Standard 001-17 is one of the standards that NAESB developed in 
response to Order No. 890 and addresses the obligations of transmission 
providers and ISOs and RTOs to post information concerning their actual 
and forecasted peak load.\44\ Specifically, Standard 001-17.2.1 and 
Standard 001-17.4.1 require transmission providers and ISOs and RTOs 
respectively to post a single maximum hourly megawatt (MW) value for 
peak load. Standard 001-17.6.5 requires transmission providers and ISOs 
and RTOs to post on the available transfer capability Information Link 
a descriptive statement of the current underlying load forecast 
assumptions, which must include all weather variables used (e.g., 
temperature, humidity, wind speed, number of measuring points).
---------------------------------------------------------------------------

    \44\ Id. P 413.
---------------------------------------------------------------------------

i. Comments
    44. Several of EPSA's comments relate to the actual and forecasted 
load posting requirements described in Standard 001-17. EPSA contends 
that Standard 001-17.2.1, Standard 001-17.4.1, and

[[Page 63295]]

Standard 001-17.6.5 limit transparency in that they require the posting 
of only a single number for peak loads, even where a transmission 
provider's internal processes produce multiple (in many cases hourly) 
peak forecasts.\45\ In addition, EPSA is concerned that transmission 
providers may post the information required by Standard 001-17.2.1 at a 
time subject to their discretion.\46\ With regard to Standard 001-
17.6.5, EPSA questions whether a document that includes the weather 
variables used to forecast load without providing the assumed values 
for each weather variable in a particular forecast adds any useful 
information, and therefore any enhanced transparency, to the load 
forecasting process.\47\
---------------------------------------------------------------------------

    \45\ EPSA at 9 and 14.
    \46\ Id. at 18.
    \47\ Id. at 9.
---------------------------------------------------------------------------

ii. Commission Determination
    45. Standard 001-17 represents a consensus approach agreeable to 
all six segments of the industry. Contrary to EPSA's representations, 
we find that this standard satisfies the requirement in Order No. 890 
to post load forecasts and actual daily peak load.\48\
---------------------------------------------------------------------------

    \48\ See Order No. 890, P 416, Order No. 890-A, P 143, and Order 
No. 890-B, P 34-35.
---------------------------------------------------------------------------

    46. In Order No. 890, the Commission required transmission 
providers to post their load forecasts and actual daily peak load for 
both system-wide load (including native load) and native load,\49\ not 
the data concerning multiple peaks requested by EPSA. In Order No. 890-
B, the Commission clarified that it did not intend for transmission 
providers to post all economic and other data that underlies each and 
every daily load forecast, but rather the underlying factors used to 
make load forecasts that have a significant impact on calculations, 
such as temperature forecasts.\50\
---------------------------------------------------------------------------

    \49\ Order No. 890, P 416.
    \50\ Order No. 890-B, P 35.
---------------------------------------------------------------------------

    47. Therefore, we will incorporate Standard 001-17 by reference 
into our regulations.
e. Grandfathered Agreements
    48. In response to Order No. 890,\51\ NAESB has developed posting 
requirements for some of the components included in the amount of 
transfer capability that a transmission provider can set aside for its 
native load and other committed uses. As part of this package, Standard 
001-19, establishes a mechanism for posting the grandfathered 
agreements component of existing transmission commitments associated 
with the available transfer capability value posted on OASIS. Under 
Standard 001-19.1, transmission providers using available transfer 
capability calculation methodologies other than the Flowgate 
Methodology must post the aggregate MW value for the grandfathered 
agreements. Such data must be posted so that it can be viewed and 
queried using the system data template. Standard 1-19.1.2 does not 
require transmission providers using the Flowgate Methodology to post 
an aggregate MW value that can be viewed and queried using the system 
data template. Instead, it requires that the transmission provider must 
post a list of Grandfathered Agreements with MW values that are 
expected to be scheduled or expected to flow.
---------------------------------------------------------------------------

    \51\ Order No. 890, P 244.
---------------------------------------------------------------------------

i. Comments
    49. TranServ recommends that all transmission providers should be 
required to post a list of the grandfathered agreements that are 
factored into their available transfer capability methodology, as is 
required of transmission providers using the Flowgate Methodology under 
Standard 001-19.1.2. TranServ argues that the requirement to post a 
single aggregate MW value representing the impact of all grandfathered 
agreements on available transfer capability has little additional 
value, and that those transmission providers using Flowgate Methodology 
may have difficulties identifying the specific impacts of grandfathered 
agreements from the aggregate impacts of network and native load 
service on their transmission system.
    50. EPSA contends that the requirement to post a single aggregate 
MW value for all grandfathered agreements provides insufficient 
transparency, particularly as grandfathered agreements represent 
allocations of transmission capacity that pre-date the open access 
environment and may include non-standard provisions. Thus, transmission 
providers may need to make accommodations to incorporate these 
commitments into the current structure of OASIS reservations and 
available transfer capability calculations. To promote transparency, 
EPSA argues that the standard should require information concerning the 
duration, MW capacity and the associated point of receipt/point of 
delivery and source/sink combinations, the resulting allocation of the 
contract provisions to specific transmission interfaces, and the 
resulting calculation of the available transfer capability/available 
flowgate capability associated with each contract.\52\
---------------------------------------------------------------------------

    \52\ EPSA at 9-11.
---------------------------------------------------------------------------

ii. Commission Determination
    51. One of the Commission's objectives in Order No. 890 was to 
reduce the potential for transmission providers to unduly discriminate 
when they provide transmission service by limiting their discretion to 
calculate available transfer capability using unknown assumptions and 
methodologies.\53\ For this reason, the Commission found that ``all 
[Available Transfer Capability] components (i.e., [total transfer 
capability], [existing transmission commitments], [capacity benefit 
margin], and [transmission reliability margin]) and certain data 
inputs, data exchange, and assumptions be consistent and that the 
number of industry-wide ATC calculation formulas be few in number, 
transparent and produce equivalent results.'' \54\ In Order No. 890, 
the Commission required that grandfathered transmission rights be 
included as committed uses of the transmission system under the 
definition of Existing Transmission Commitments.\55\
---------------------------------------------------------------------------

    \53\ The Commission reasoned that the potential for 
discrimination is not primarily in the choice of an available 
transfer capability calculation methodology, but rather in the 
inconsistent application of its components. Order No. 890, P 208.
    \54\ Id. P 207.
    \55\ Id. P 244.
---------------------------------------------------------------------------

    52. As we pointed out in the NOPR, the NAESB standards adopt two 
different methods of posting grandfathered agreements, depending on 
whether the flowgate methodology is used. Because of the nature of the 
flowgate methodology, the standards exempt it from the requirement to 
post an aggregate MW value that can be viewed and queried using the 
system data template. Instead, the standards require the transmission 
provider to post a list of grandfathered agreements with MW values that 
are expected to be scheduled or expected to flow. Transmission 
providers using available transfer capability calculation methodologies 
other than the flowgate methodology are required to make this data 
accessible through the system data template.
    53. EPSA and TranServ argue that the complete data on grandfathered 
agreements needs to be provided even for those systems that do not 
utilize the flowgate methodology. Order No. 890 does not require the 
posting of complete data for grandfathered agreements. It required only 
that grandfathered agreements be included in the Existing

[[Page 63296]]

Transmission Commitments component of available transfer capability. 
All six segments of the industry concluded that for transmission 
providers not using the flowgate methodology, inclusion of the 
aggregate information in the calculations is sufficient, and we find 
reasonable the distinctions they have drawn and their determination 
that inclusion of grandfathered agreements in the system data template 
provides sufficient transparency. Moreover, as we discuss below, 
transmission providers must, upon request, provide the basis upon which 
they calculate available transfer capability should such information be 
requested in a particular circumstance.\56\
---------------------------------------------------------------------------

    \56\ WEQ Standard 001-16.1. See also WEQ Standard 001-13.1.5.
---------------------------------------------------------------------------

f. Availability of Data Used in Available Transfer Capability 
Calculations
    54. Standard 001-16.1 requires Transmission Providers to respond to 
questions about the methodology for calculating available transfer 
capability and available flowgate capability. In the WEQ Version 002.1 
NOPR, we stated that we interpreted this standard as requiring the 
Transmission Provider to provide data when necessary to respond to the 
methodology questions in order to be consistent with the requirement in 
Order No. 890 that transmission providers must, upon request, ``make 
available all data used to calculate [available transfer capability] 
and [total transfer capability] for any constrained paths and any 
system planning studies or specific network impact studies performed 
for customers.'' \57\
---------------------------------------------------------------------------

    \57\ WEQ Version 002.1 NOPR, P 21.
---------------------------------------------------------------------------

i. Comments
    55. EPSA is concerned that there is a lack of transparency for the 
data items used in available transfer capability calculations, and 
contends that this issue was not adequately addressed through the NAESB 
process. Specifically, EPSA urges the Commission to require not only 
that data be made available, but that all underlying data supporting 
available transfer capability calculations be required to be posted.
ii. Commission Determination
    56. Standard 001-16.1 represents a consensus approach agreeable to 
all six segments of the industry, and satisfies the requirement in 
Order No. 890 to make data used in available transfer capability 
calculations available. Therefore, as proposed in the WEQ Version 002.1 
NOPR, we will incorporate Standard 001-16.1 by reference into our 
regulations. As described above, we interpret Standard 001-16.1 as 
requiring the Transmission Provider to provide data when necessary to 
respond to the methodology questions in order to be consistent with the 
requirement in Order No. 890 that transmission providers must, upon 
request, ``make available all data used to calculate [available 
transfer capability] and [total transfer capability] for any 
constrained paths and any system planning studies or specific network 
impact studies performed for customers.'' \58\ Since such data will be 
available on request, we see no need to impose a more onerous ongoing 
posting requirement as requested by EPSA.
---------------------------------------------------------------------------

    \58\ Order No. 890, P 348.
---------------------------------------------------------------------------

2. Conditional Firm Service Standards
    57. In the OASIS Standards, NAESB has included a number of 
standards that support conditional firm service as envisioned by the 
Commission in Order Nos. 890 and 890-A. NAESB has developed business 
practice standards to facilitate the implementation of conditional firm 
service, relying on the Commission's description of the attributes of 
that service in Order No. 890.\59\ Specifically, NAESB developed 
Standards 001-21 through 001-21.5.5 on the Conditional Curtailment 
Option, the term that NAESB uses to describe conditional firm service. 
These standards address: (1) The limitations and conditions under which 
the Conditional Curtailment Option is offered; (2) the posting 
requirements for information concerning a Conditional Curtailment 
Option reservation and its curtailment criteria; (3) the process for 
performing the biennial reassessment; (4) the curtailment of a 
Conditional Curtailment Option reservation; and (5) the redirect, 
transfer, and resale of a Conditional Curtailment Option reservation.
---------------------------------------------------------------------------

    \59\ Id. P 1043-47.
---------------------------------------------------------------------------

    58. Additionally, NAESB has developed other standards related to 
conditional firm service in response to the Commission's requests for 
the development of specific standards in Order Nos. 890 and 890-A.\60\ 
Specifically, NAESB has developed Standard 001-21.1.6, which requires 
that transmission providers offer short-term firm service to 
conditional firm customers as capacity (that would alleviate the 
constraints associated with a Conditional Curtailment Option 
reservation) becomes available. In response to Order No. 890-A, NAESB 
has created and modified standards in WEQ-001, Appendix C to WEQ-001, 
WEQ-002, WEQ-003, WEQ-008 and WEQ-013, to provide a consistent set of 
tracking capabilities and business practices for tagging, as a means to 
implement conditional firm service.
---------------------------------------------------------------------------

    \60\ Id. P 1078; Order No. 890-A, P 592.
---------------------------------------------------------------------------

    59. The following addresses the comments received on these 
proposals.
a. Resales of Transmission Service
    60. Standard 001-11.3.2 governs the conditions under which multiple 
transmission service reservations may be aggregated to support a resale 
of transmission service. Under Standard 001-11.3.2, transmission 
service reservations subject to the terms of a Conditional Curtailment 
Option \61\ may not be aggregated to support a resale of transmission 
service.
---------------------------------------------------------------------------

    \61\ ``Conditional Curtailment Option'' is the term that NAESB 
uses to describe conditional firm service.
---------------------------------------------------------------------------

i. Comments
    61. In their comments, both AWEA and EPSA argue that there is no 
basis for treating resales of conditional firm service differently from 
resales of other long-term firm service.\62\ Therefore, AWEA and EPSA 
request that the Commission direct NAESB to remove the restriction on 
aggregating reservations subject to the Conditional Curtailment Option 
to support a resale.
---------------------------------------------------------------------------

    \62\ AWEA at 5-6, EPSA at 20.
---------------------------------------------------------------------------

ii. Commission Determination
    62. We will incorporate by reference into our regulations NAESB's 
revisions to Standard 001-11.3.2. NAESB's standard does not preclude 
the resale of conditional firm service. Such service can be resold as 
separate transactions. Unlike other types of long-term firm service, 
the conditions imposed in a conditional firm reservation are specific 
to the reservation, identified in the system impact study, and 
documented in the service agreement. The service agreement is a 
customer-specific, non-conforming agreement that must be filed with the 
Commission for review and approval. Because the contract terms for 
conditional firm service are likely to be different, we find reasonable 
NAESB's determination not to create standards for the aggregation of 
such transactions.
b. Standard 001-21.1.6
    63. NAESB has developed Standard 001-21.1.6 in response to Order 
No. 890, in which the Commission directed transmission providers to 
work through NAESB to develop appropriate communication protocols to 
assign short-term firm service to conditional firm customers as the 
service becomes

[[Page 63297]]

available.\63\ Standard 001-21.1.6 requires that transmission providers 
offer any available short-term firm capability that would alleviate the 
constraint(s) associated with a conditional firm reservation to the 
conditional firm customer prior to offering such capability to other 
customers.
---------------------------------------------------------------------------

    \63\ Order No. 890, P 1078.
---------------------------------------------------------------------------

i. Comments
    64. In its comments, AWEA is concerned about the ability to 
interpret this standard in various ways, and suggests modifications to 
the standard to ensure that short-term firm capability is not double 
counted.\64\ Both EPSA and AWEA contend that firm available transfer 
capability should be decremented when a conditional firm reservation is 
provided with short-term firm transfer capability before any additional 
short-term firm capability is offered to other transmission 
customers.\65\ EPSA requests that the Commission indicate to NAESB that 
Standard 001-21.1.6 should be modified to reflect their proposal.
---------------------------------------------------------------------------

    \64\ AWEA at 6-7.
    \65\ EPSA at 21.
---------------------------------------------------------------------------

    65. AWEA is also apprehensive that the proposed NAESB standard does 
not address an important aspect of the Conditional Curtailment Option: 
How new long-term available transfer capability will be allocated to 
Conditional Curtailment Option customers when it becomes available.\66\ 
AWEA points out that there may be instances when long-term capacity 
becomes available after a customer signs a conditional firm contract. 
Since Order No. 890 states that conditional firm will be charged at the 
same rate as long-term service, AWEA states that conditional firm 
customers should have rights to long-term firm available transfer 
capability when it becomes available. Accordingly, AWEA urges the 
Commission to require clarification of the methodology for allocating 
such available transfer capability in the conditional firm service 
standard, as it believes this practice should not be left up to the 
transmission provider's discretion and should instead be consistent 
across the industry.
---------------------------------------------------------------------------

    \66\ AWEA at 7.
---------------------------------------------------------------------------

ii. Commission Determination
    66. Standard 001-21.1.6 is consistent with the Commission's 
directive in Order No. 890 \67\ that transmission providers assign 
short-term firm service to conditional firm customers as the service 
becomes available and represents a consensus approach agreeable to all 
six segments of the industry. Therefore, as proposed in the WEQ Version 
002.1 NOPR, we will incorporate Standard 001-21.1.6 by reference into 
our regulations.
---------------------------------------------------------------------------

    \67\ Order No. 890, P 1078.
---------------------------------------------------------------------------

    67. Both EPSA and AWEA are concerned that available transfer 
capability will not be properly decremented to reflect the assignment 
of short-term firm service to conditional firm customers. AWEA suggests 
that the standard should be modified to ensure that double-counting 
does not occur.\68\
---------------------------------------------------------------------------

    \68\ The issue of double-counting data inputs to available 
transfer capability calculations affects the reliability of the Bulk 
Power System, and is addressed in the companion ATC Final Rule at P 
183. See n.11 supra.
---------------------------------------------------------------------------

    68. As to the concerns raised over how new long-term available 
transfer capability will be allocated to conditional firm customers 
when it becomes available, as AWEA recognizes, in Order No. 890, the 
Commission established that conditional firm customers have priority 
relative to short term firm capability, and did not provide such 
priority with respect to long term firm capability. AWEA did not raise 
this issue in the Order No. 890 proceeding, and if it seeks a change to 
the priority order established in the rule, it should do so through an 
appropriate filing with the Commission. Since NAESB's standard complies 
with the requirement of Order No. 890, we are adopting it here.
c. Biennial Reassessment
    69. NAESB developed Standards 001-21 through 001-21.5.5 to 
facilitate the implementation of conditional firm service, relying on 
the Commission's description of the attributes of that service in Order 
No. 890. In its discussion of conditional firm service, the Commission 
specified that transmission providers shall have the right to perform a 
biennial \69\ reassessment of their ability to continue to reliably 
provide conditional firm service for those transmission customers 
taking conditional firm service who are unwilling to commit to a 
facilities study or the payment of network upgrade costs. When 
conducting a biennial reassessment, the transmission provider 
reassesses the conditions under which conditional firm service may be 
curtailed for those conditional firm service reservations subject to 
the system-conditions criteria or the maximum number of hours that 
service can be curtailed for those reservations subject to the number-
of-hours criteria. The Commission also determined that a transmission 
provider is permitted to waive or extend its right to reassess the 
availability of conditional firm service,\70\ so that transmission 
providers may offer conditional firm service for a period of longer 
than two years without reassessment.
---------------------------------------------------------------------------

    \69\ Biennial is every two years, in contrast to biannual, which 
is twice a year.
    \70\ Order No. 890, P 985.
---------------------------------------------------------------------------

i. Comments
    70. Bonneville raises objections to the incorporation by reference 
of Standard 001-21.3.1.2, which allows a transmission provider to waive 
its right to perform a biennial reassessment. Bonneville states that 
Standard 001-21.3.1.2 is inconsistent with the Commission's policy. 
Bonneville argues that the standard should allow a Transmission 
Provider the right to extend its reassessment of the conditions for 
conditional firm service. Bonneville proposes to modify the NAESB 
standard so that it permits transmission providers to extend their 
right to perform the biennial reassessment as well as to waive such 
right.
ii. Commission Determination
    71. Nothing in Standard 001-21.3.1.2 prevents a Transmission 
Provider from extending its right to reassess the availability of 
conditional firm service. The standard states that a transmission 
provider is permitted to waive its right to conduct a biennial 
reassessment, not that a transmission provider is prohibited from 
extending the assessment period. Thus, we do not find the requirements 
of this standard inconsistent with the requirement in Order No. 890 
that a transmission provider may extend its right to reassess the 
availability of conditional firm service and, as proposed in the WEQ 
Version 002.1 NOPR, will incorporate Standard 001-21.3.1.2 by reference 
into our regulations.
    72. However, we reiterate here the Commission's finding in Order 
No. 890 that a transmission provider is permitted to extend its right 
to reassess the availability of conditional firm service.\71\ Since the 
Version 002.1 Standards do not specifically address this issue, we 
would ask the industry, working through NAESB, to continue to look at 
additional business practice standards facilitating a transmission 
provider's extension of its right to perform a reassessment.
---------------------------------------------------------------------------

    \71\ Id.
---------------------------------------------------------------------------

d. Posting System Conditions
    73. As part of the overall Version 002.1 Standards, the Commission 
proposed to incorporate by reference

[[Page 63298]]

Standard 001-21.4.2.1, which is part of a set of standards detailing 
the business practices for managing and curtailing transmission service 
with a conditional curtailment option. Standard 001-21.4.2.1 requires 
transmission providers to post on OASIS the reduction in each impacted 
conditional firm reservation prior to or coincident with any 
curtailments of conditional firm service at the conditional curtailment 
priority level. The conditional curtailment priority level is equal to 
that of secondary network transmission service, and is applied when 
conditional firm service is not firm in accordance with the terms of 
the transmission service agreement. For a conditional firm service 
reservation subject to the system conditions criteria, the conditional 
curtailment priority level is applied to a conditional firm service 
reservation under system conditions specified in the transmission 
service agreement. For a conditional firm service reservation subject 
to the number of hours criteria, it is applied due to reliability 
concerns when the maximum number of hours that service can be curtailed 
under the transmission service agreement has not yet been reached.
i. Comments
    74. Entergy seeks Commission clarification on whether this standard 
requires the posting of any curtailment of conditional firm service 
actually be made ``prior to or coincident with'' the implementation of 
the curtailment, in light of the difficulty of making such postings 
while managing the reliability of the transmission system in a 
congested situation. Entergy urges the Commission to clarify that the 
same posting requirements currently in the regulations at 18 CFR 
37.6(e)(3) are appropriate for posting curtailments of conditional firm 
service.\72\
---------------------------------------------------------------------------

    \72\ Entergy at 5-6. Entergy's comments refer to 18 CFR 33.6, 
which is the regulation covering form of notice. We presume that 
Entergy intends to refer to 18 CFR 37.6(e)(3). To the extent 
Entergy's comments are aimed at 18 CFR 33.6, we see no merit in its 
argument, because this regulation governs form of notice for 
applications pursuant to section 203 of the Federal Power Act, which 
appear to be inapplicable to this issue.
---------------------------------------------------------------------------

    75. Both AWEA and EPSA contend that the standards governing the 
provision of conditional firm service lack adequate transparency due to 
a deficiency of posting requirements regarding system conditions. Under 
a conditional curtailment option subject to the systems-condition 
criteria, conditional firm service can be curtailed based on pre-
identified system conditions. To inform their business decisions and to 
evaluate the firmness of their reservation at any given time, AWEA and 
EPSA argue that transmission customers taking conditional firm service 
require the maximum amount of information practical as to the risk that 
their service will be curtailed. Therefore, AWEA and EPSA claim that 
transmission providers should be required to post information 
pertaining to the system conditions in effect at any given time, even 
if the event of a single condition alone will not reduce the priority 
of the service to non-firm.\73\
---------------------------------------------------------------------------

    \73\ AWEA at 4-5, EPSA at 18-19.
---------------------------------------------------------------------------

ii. Commission Determination
    76. Standard 001-21.4.2.1 represents a consensus approach agreeable 
to all six segments of the industry, and is not inconsistent with 
Commission policies. Therefore, as proposed in the WEQ Version 002.1 
NOPR, we will incorporate Standard 001-21.4.2.1 by reference into our 
regulations. As to Entergy's contention that Standard 001-21.4.2.1 
should allow postings consistent with 18 CFR 37.6(e)(3), we note that 
18 CFR 37.6(e)(3) does not include any specific time requirements for 
the posting. We believe that the timing of when information must be 
posted is an important element in providing for transparency and 
accountability surrounding the provision of conditional firm service. 
Revising the standards to remove any requirement as to when information 
must be posted would severely diminish the achievement of both of those 
goals. Thus, we will require the posting to be made ``prior to or 
coincident with'' as provided in the standard.
    77. As to the concern raised by AWEA and EPSA about the lack of 
transparency regarding the conditions leading to curtailments, these 
commenters failed to persuade a majority of NAESB members to adopt 
their requests to impose posting obligations that exceed the 
requirements of Order No. 890. The requested postings would appear to 
impose a continuous burden on transmission providers which, in light of 
the non-curtailment status of the system for most of the time 
intervals, does not appear to be warranted. Given that the current 
NAESB standard satisfies the Order No. 890 requirements, we will 
incorporate the standard by reference.
e. Redirects of Conditional Firm Service
    78. NAESB developed and adopted Standard 001-21.5.2.1 as part of 
its response to the Commission's directive in Order No. 890 to 
implement conditional firm service; it provides that redirects of 
conditional firm service do not affect the conditions applicable to the 
parent reservation.
i. Comments
    79. When the evaluation of a request for a redirect of conditional 
firm service indicates that such redirected service can be provided 
without conditions, Entergy requests clarification that under Standard 
001-21.5.2.1 ``such service may be granted without the application of 
conditions so long as conditions are retained on the Parent 
Reservation.'' \74\
---------------------------------------------------------------------------

    \74\ Entergy at 6.
---------------------------------------------------------------------------

ii. Commission Determination
    80. Standard 001-21.5.2.1 represents a consensus approach agreeable 
to all six segments of the industry, and is not inconsistent with 
Commission policies. Therefore, as proposed in the WEQ Version 002.1 
NOPR, we will incorporate Standard 001-21.5.2.1 by reference into our 
regulations, as we proposed in the WEQ Version 002.1 NOPR. As to 
Entergy's request for clarification, we find no reason why the 
condition should apply if the evaluation of a request for redirect of 
conditional firm service shows that such redirected service can be 
provided without conditions. We note, however, that under Standard 001-
21.5.2.1, the condition would remain on the parent reservation.
f. Accounting for Conditional Firm Service in Available Transfer 
Capability Calculations
i. Comments
    81. EPSA contends that there is no standard governing the treatment 
of conditional firm service in available transfer capability 
calculations or requiring transmission providers to post the 
methodology that they use to account for conditional firm service in 
these calculations. Thus, EPSA argues that the Version 002.1 Standards 
give the transmission provider too much discretion.\75\
---------------------------------------------------------------------------

    \75\ EPSA at 20-21.
---------------------------------------------------------------------------

ii. Commission Determination
    82. We agree with EPSA that the Version 002.1 standards do not 
provide a uniform methodology for treating conditional firm service in 
available transfer capability calculations. But Order No. 890 did not 
request NAESB to develop the methodology for transfer capability 
calculations. NERC has developed Standard MOD-001-1 which requires that 
the Available Transfer Capability Implementation Document (required by 
NAESB Standard 001-13.1.5 to be posted on OASIS) includes

[[Page 63299]]

information describing how the available transfer capability 
methodology is implemented ``in such detail that, given the same 
information used by the Transmission Service Provider, the results of 
the [available transfer capability] or [available flowgate capacity] 
calculations can be validated.'' \76\ Therefore, the methodology used 
to calculate available transfer capability or available flowgate 
capability as described in the Available Transfer Capability 
Implementation Document will be posted on OASIS and should include the 
treatment of conditional firm service if such calculations are to be 
replicable. We also note that pursuant to the requirements of Order No. 
890 and Standard 001-16.1, this information nevertheless must be 
provided upon request. Because the methodology used to account for 
conditional firm service in available transfer capability calculations 
could affect the reliability of the Bulk-Power System, the appropriate 
forum for addressing EPSA's concern relating to the lack of a standard 
governing the treatment of conditional firm service in such 
calculations is the NERC standards development process.
---------------------------------------------------------------------------

    \76\ NERC Standard MOD-001-1 R3.1.
---------------------------------------------------------------------------

3. Other Issues
a. Transmission Request Priority
    83. NAESB revised Standard 001-4.16 to complement the Commission's 
policies regarding pre-confirmed transmission service requests,\77\ as 
articulated in Order No. 890. As required by Order No. 890, NAESB 
standards ``give priority only to pre-confirmed non-firm point-to-point 
transmission service requests and short-term firm point-to-point 
transmission service requests'' \78\ and provide that ``longer duration 
requests for transmission service will continue to have priority over 
shorter duration requests for transmission service, with pre-
confirmation serving as a tie-breaker for requests of equal duration.'' 
\79\ In addition, as requested by the Commission in Order No. 890, 
NAESB has developed a consensus solution to the question of whether a 
transmission customer should be prohibited from changing a request into 
a pre-confirmed request.\80\
---------------------------------------------------------------------------

    \77\ Under the OATT, there are two types of transmission service 
requests. One type of request involves three steps: (1) A 
prospective shipper requesting service; (2) the transmission 
operator processing that request and responding; and (3) the 
prospective shipper ``confirming'' its request. The second type of 
request has only two steps: (1) The prospective shipper ``pre-
confirms'' its request with the initial submission; and (2) if the 
transmission operator unconditionally grants the request, it is 
deemed confirmed without further contractual communications. Thus, 
pre-confirmed transmission service requests are those requests for 
which the transmission customer commits to purchasing the requested 
transmission service if the transmission provider grants the full 
amount of capability requested for the full duration requested.
    \78\ Order No. 890, P 1401.
    \79\ Id.
    \80\ Id. P 1392.
---------------------------------------------------------------------------

    84. The issue raised in the comments relates to whether daily 
network service can preempt short-term firm service under Standard 001-
4.16. This standard includes Table 4-3, which illustrates the relative 
queue priorities of competing transmission service requests and 
reservations. In addition, the table describes the conditions under 
which a subsequent request can preempt a previously queued request or 
reservation, as well as the rules for offering a right-of-first-
refusal.
    85. Two previously adopted standards also address the queue 
priority for non-firm transmission service requests, i.e., Standards 
001-4.22 and 001-4.25. Standard 001-4.22 states that, once confirmed, a 
non-firm point-to-point request may not be displaced by a subsequent 
non-firm point-to-point request of equal duration and higher price. 
After a transmission provider has offered to provide non-firm 
transmission service to a transmission customer at a given price, the 
transmission customer is afforded a prescribed time limit within which 
to confirm the request. Standard 001-4.25 states that a transmission 
provider may not pre-empt a customer's request in favor of a subsequent 
request of the same Tier and equal duration at a higher price while the 
customer considers whether to confirm its request during the Customer 
Confirmation Time Limit, unless the subsequent request is submitted as 
pre-confirmed.
i. Comments
    86. TranServ claims that, under Table 4-3, a request for 
designation of a new network resource for a single day could 
potentially preempt all confirmed (but conditional) short-term firm 
point-to-point reservations, and that those transmission customers 
whose reservations were displaced would be unable to retain their 
service. TranServ suggests that designation of a new network resource 
for terms less than 12 months should be considered for preemption on a 
par with point-to-point services. At a minimum, it argues that requests 
to designate a new network resource should be eligible to preempt only 
those point-to-point reservations of equal or shorter duration. In 
addition, TranServ requests Commission guidance as to whether longer 
term point-to-point requests should have any rights to preempt a 
shorter term network resource designation and whether a transmission 
customer whose point-to-point reservation has been displaced by a 
longer term request to designate a network resource has a right-of-
first-refusal to modify its request to match the requested longer 
duration of the competing service request so it can retain its service 
priority.\81\
---------------------------------------------------------------------------

    \81\ TranServ at 4-5.
---------------------------------------------------------------------------

    87. In its reply comments, APS opposes TranServ's proposal to allow 
point-to-point services the same queue priority as network customers, 
contending it diminishes the value of network service, which is a long 
term service, to be on par with that of shorter term point-to-point 
service requests.
    88. TranServ also notes that while confirmed but conditional short-
term firm reservations may be preempted based on price, confirmed non-
firm reservations and unconfirmed (but within the Customer Confirmation 
Time Limit) non-firm requests in response to which the transmission 
provider has offered service may not be preempted by subsequent 
requests based on price, as described in Standards 001-4.22 and 001-
4.25. TranServ requests that the Commission advise the industry as to 
whether this disparate treatment of firm and non-firm service with 
regard to preemption based on price should be eliminated from the 
standards. Specifically, TranServ asks if Table 4-3 should be revised 
to include the preemption of non-firm reservations based on price and 
if Standards 001-4.22 and 001-4.25 should be removed.\82\
---------------------------------------------------------------------------

    \82\ Id. at 5-6.
---------------------------------------------------------------------------

ii. Commission Determination
    89. TranServ's comments raise two separate arguments. First, 
TranServ argues that daily network service should not displace short-
term firm reservations while those requests are still conditional. 
Standard 001-4.16 and Table 4-3, which govern the queue priorities of 
competing transmission service requests and reservations, reflects the 
Commission's policies articulated in Order No. 890,\83\ and are 
consistent with our determinations in that order. As specified in the 
pro forma OATT, network service (regardless of contract duration) and 
long-term firm service (over a year) have equal reservation priority 
that is higher than any short-term firm service. Both network and long-
term firm service can preempt short-term firm service before

[[Page 63300]]

the conditional reservation deadlines have expired (i.e., one day 
before the commencement of daily service, one week before the 
commencement of weekly service, and one month before the commencement 
of monthly service).\84\ In Order No. 890, the Commission clarified 
that the minimum term for the designation of new network resources 
should be the same as the minimum time period used for firm point-to-
point service (i.e., daily).\85\
---------------------------------------------------------------------------

    \83\ See Order No. 890, P 1505.
    \84\ Pro forma OATT, section 13.2.
    \85\ Order No. 890, P 1505.
---------------------------------------------------------------------------

    90. Because the priority of network service of any duration is 
higher than that of short-term firm service, it will preempt short-term 
firm service during the conditional reservation period even if the 
short-term firm service is of longer duration. Therefore, the queue 
priority described in Standard 001-4.16 and Table 4-3 is consistent 
with the pro forma OATT, and we will incorporate by reference Standard 
001-4.16 and Table 4-3 as proposed in the NOPR. Moreover, under the pro 
forma OATT, a customer whose reservation has been preempted does not 
have a right to modify its request to match the priority of the 
competing service request.
    91. Second, TranServ contends that previously adopted standards 
should be modified to allow non-firm reservations to be preempted based 
on price. It argues that the same pricing rules that apply to firm 
services, which permit preemption based on price during the conditional 
reservation period, also should apply to non-firm service.
    92. We note that the standards in question, Standards 001-4.22 and 
001-4.25 (governing the queue priority for non-firm transmission 
service requests), were incorporated by reference in Order No. 676,\86\ 
issued in 2006. These standards are not revised in Version 002.0 or 
002.1 of the standards. Thus, TransServ's contention is beyond the 
scope of this proceeding.
---------------------------------------------------------------------------

    \86\ See Order No. 676, P 19.
---------------------------------------------------------------------------

    93. In addition, we note that these standards are consistent with 
the pro forma OATT and prior Commission determinations. Under the pro 
forma OATT, the conditional reservation period applies only to firm 
requests for service, not to non-firm service.\87\ Therefore, the NAESB 
standards are consistent with the Commission policies.
---------------------------------------------------------------------------

    \87\ Open Access Same-Time Information System and Standards of 
Conduct, Final Rule, Order No. 638, FERC Stats. & Regs. ] 31,093, at 
31,437 (2000).
---------------------------------------------------------------------------

b. Rollover Rights for Redirects
    94. In the WEQ Version 002.1 NOPR, the Commission proposed to 
incorporate by reference new and modified standards that relate to 
rollover rights. The Commission recognized that the filed NAESB 
standards represented only the first part of a two part process through 
which NAESB will fully develop standards that are consistent with the 
Commission's policy on rollover rights as articulated in Order Nos. 
676, 890, and 890-A. In the Version 002.1 Standards submitted to the 
Commission as part of the first part of the aforementioned two part 
process, NAESB included a new definition for Unexercised Rollover 
Rights in WEQ-001, as well as other modifications to existing standards 
in WEQ-001, WEQ-003, and WEQ-013. In its Version 002.1 filing letter of 
February 19, 2009, NAESB stated that the second part of this process 
would include modifications to Standard 001-9.7, as directed by Order 
No. 890. NAESB also indicated that it anticipates that the results of 
the second part of the process will be included in a new Version 002.2 
set of business practice standards, which NAESB expects will be 
published in the first quarter of 2010.
i. Comments
    95. Two commenters requested that the Commission not incorporate by 
reference standards related to rollover rights for redirects.\88\ Duke 
states that the standards developed in the first part of the process 
were ratified by the NAESB membership with the understanding that they 
would not be significantly modified during the second part of the 
process. However, as Duke points out, certain standards were 
substantially revised and a new definition for ``Unexercised Rollover 
Rights'' was created and included in the recommendation posted for 
formal comment by the Electronic Scheduling Subcommittee/Information 
Technology Subcommittee of NAESB. Therefore, Duke requests that the 
Commission defer action on these standards until the second installment 
of the standards is submitted. IRC agrees.
---------------------------------------------------------------------------

    \88\ Duke at 5; ISO Council at 4-5.
---------------------------------------------------------------------------

ii. Commission Determination
    96. We recognize that the standards relating to rollover rights for 
redirects included in the Version 002.1 Standards represent only the 
first part of a two-part process. In addition, we understand that both 
Duke and IRC are concerned that the standards currently before the 
Commission have been substantially revised in the second part of the 
two part process. However, neither Duke nor IRC has expressed any 
substantive concerns with the standards currently before the 
Commission, or offered any suggested alternative to the filed 
standards. Given these circumstances and because we find no 
inconsistency between the standards governing rollover rights for 
redirects of transmission service in the Version 002.1 Standards and 
Order No. 890 and the Commission's regulations, we will incorporate 
these standards by reference. We expect that should Duke, IRC, or any 
other party have concerns with the standards being developed during the 
second part of the process that they will be able to raise these 
concerns within the NAESB process and work to achieve a consensus 
solution acceptable to all industry segments. We reserve judgment on 
any phase two standards governing rollover rights for redirects of 
transmission service until such time as these standards are developed 
and filed with the Commission for review.
c. Standard 002-5.10
    97. Standard 002-5.10 requires that all template interactions with 
OASIS be updated to reflect the Version 1.5 OASIS standards within six 
months of the Version 002.1 Standards becoming effective.\89\ During 
this six month implementation period, the standards require that OASIS 
nodes must also continue to support the Version 1.4 templates. The WEQ 
Version 002.1 NOPR did not propose a specific implementation date for 
compliance with any standards incorporated by reference by the 
Commission in a final rule.
---------------------------------------------------------------------------

    \89\ As explained above, see n.17 supra, the Version 1.5 OASIS 
Standards form part of the Version 002.1 Business Practice Standards 
package.
---------------------------------------------------------------------------

i. Comment
    98. Entergy requests clarification that Standard 002-5.10 is 
applicable only to the actual implementation of updated templates and 
not to the additional required OASIS functionalities proposed in the 
Version 002.1 Standards, which may require modification to or 
development of supporting software applications.\90\
---------------------------------------------------------------------------

    \90\ Entergy at 4-5.
---------------------------------------------------------------------------

ii. Commission Determination
    99. The Commission will grant the requested clarification. The 
Commission finds that Standard 002-5.10 is applicable only to the 
actual implementation of updated templates and not to the additional 
required OASIS functionalities proposed in the Version 002.1 Standards, 
which may require modification to or development of supporting software 
applications. As discussed in the Implementation section

[[Page 63301]]

of this Final Rule,\91\ the Commission is not requiring compliance with 
the OASIS requirements established in this rule before the first day of 
the first quarter occurring 365 days after approval of the referenced 
NERC Reliability Standards by all applicable regulatory authorities.
---------------------------------------------------------------------------

    \91\ See infra P 126.
---------------------------------------------------------------------------

d. Order No. 717 Issues
    100. In the WEQ Version 002.1 NOPR, the Commission recognized that 
a specific standard, Standard 001-13.1.2, contained references to 
Commission regulations regarding the posting of Standards of Conduct-
related information. These regulations were revised by Order No. 
717.\92\ The Commission went on to acknowledge that the references in 
the standard were no longer accurate and did not conform to the 
Commission's current requirements, and therefore did not propose to 
require public utilities to comply with any portion of the standard 
that was inconsistent with Order No. 717.
---------------------------------------------------------------------------

    \92\ Standards of Conduct for Transmission Providers, Order No. 
717, 73 FR 63796, FERC Stats. & Regs ] 31,280 (2008).
---------------------------------------------------------------------------

i. Comments
    101. Duke \93\ requests that the Commission not adopt NAESB 
standards that conflict with Order No. 717, and instead adopt the 
revised NAESB standards whenever they are filed with the 
Commission.\94\ Or, in the alternative, Duke states the Commission 
should provide greater clarity that transmission service providers do 
not have to comply with any posting or other requirements in the 
approved NAESB standards that have been revised by Order No. 717.\95\ 
Similarly, APS requests that the Commission decline to incorporate by 
reference Standard 001-21.3.1.2.2 (which states that waivers of the 
Biennial Reassessment be posted on OASIS as a discretionary action) 
because such posting of discretionary actions is no longer required 
under Order No. 717.\96\
---------------------------------------------------------------------------

    \93\ Duke at 3-4.
    \94\ Duke states that NAESB's Executive Committee approved 
modifications to the business practices to make them consistent with 
Order No. 717 on May 12, 2009, and they believe NAESB will ``file 
these standards with the Commission soon.''
    \95\ For instance, Duke references standards WEQ 001-13.1.2, WEQ 
001-21.3.1.2.2, WEQ 001-13.1, and WEQ 002-3.4b(ii) as examples of 
standards containing posting requirements that are no longer 
required by Order No. 717.
    \96\ APS at 4.
---------------------------------------------------------------------------

ii. Commission Determination
    102. We addressed this concern in the WEQ Version 002.1 NOPR, in 
which we stated that ``we do not propose to require public utilities to 
comply with any portion of the standard that requires information to be 
posted in a manner inconsistent with Order No. 717.'' While this 
statement related directly to Standard 001-13.1.2, we clarify here that 
we will not require public utilities to comply with any portion of the 
Version 002.1 standards that requires information to be posted in a 
manner inconsistent with Order No. 717.
e. Coordination of Requests Across Multiple Transmission Systems
    103. In Order No. 890, the Commission directed transmission 
providers, working through NAESB, ``to develop business practice 
standards related to coordination of requests across multiple 
transmission systems.'' \97\
---------------------------------------------------------------------------

    \97\ Order No. 890, P 1377.
---------------------------------------------------------------------------

i. Comments
    104. North Carolina Electric Membership Cooperative (NCEMC) urges 
the Commission to monitor closely NAESB's progress on developing 
standards for the coordination of transmission service requests across 
multiple transmission systems, including requiring status reports as 
appropriate. NCEMC argues that they have experienced difficulties when 
trying to conduct transactions across two transmission providers' 
systems. Because this issue was originally addressed by the Commission 
in response to comments filed by TDU Systems almost three years ago, 
NCEMC believes that it is necessary for the Commission to exert more 
pressure on NAESB to develop this standard, as they have yet to begin 
drafting it.
ii. Commission Determination
    105. We agree that insufficient progress has been made on this 
issue. While we acknowledge that development of standards addressing 
this issue is included in NAESB's 2009 WEQ Annual Plan,\98\ we 
nevertheless urge NAESB to address this issue as soon as possible. 
Accordingly, we request that NAESB provide the Commission with a status 
report concerning its progress on this issue every six months, counting 
from the date this final rule is published in the Federal Register, 
until NAESB's adoption of the applicable standard(s).
---------------------------------------------------------------------------

    \98\ Item 2, (a), (iii), 1.
---------------------------------------------------------------------------

f. Waivers
    106. NYISO asks the Commission to take the opportunity to 
reconsider its position regarding the process for filing waivers. NYISO 
states that it currently is required to make a waiver filing every time 
the Commission incorporates a revised NAESB standard. It asks the 
Commission to revise this process so that recipients of waivers only 
need to file requests to renew their waivers when NAESB adopts (and the 
Commission incorporates by reference) new standards or revises existing 
ones in a substantive way. NYISO argues that tracking, analyzing and 
making frequent waiver filings are burdensome tasks and do not benefit 
NYISO.
i. Commission Determination
    107. When the Commission adopts new requirements, it is incumbent 
on a public utility that wishes to maintain an existing waiver to 
making a showing to the Commission that, based on the particular facts 
at issue, the waiver should continue. The determination of whether a 
waiver from a prior requirement should apply to a revised requirement 
is one that needs to be made on a case-by-case basis. We do not agree 
that waivers should automatically be extended without Commission review 
and approval. Accordingly, we deny NYISO's request.
g. Suggestion To Develop Revised Standards on Available Flowgate 
Capability/Total Flowgate Capability Postings
    108. NERC Standard MOD-030-02 R11 provides definitions of Available 
Flowgate Capacity and Total Flowgate Capability and a formula to 
convert Available Flowgate Capacity to Available Transfer Capability. 
In Order No. 890, the Commission directed public utilities, working 
through NERC, to develop in the MOD-001 standard a rule to convert 
available flowgate capacity into available transfer capability 
values.\99\
---------------------------------------------------------------------------

    \99\ Order No. 890, P 211.
---------------------------------------------------------------------------

i. Comments
    109. TranServ comments they are not in support of posting of flow-
based Available Flowgate Capacity and the related transmission system 
metrics used to convert Available Flowgate Capacity to an effective 
Available Transfer Capability. It seeks clarification on how the 
requirements of 18 CFR 37.6 to post Available Transfer Capability, 
Total Transfer Capability, Capacity Benefit Margin and Transmission 
Reliability Margin are to be addressed by a Transmission Provider 
selecting to use the Flow-based Available Transfer Capability 
Methodology as specified in NERC Standard MOD-030. It further states 
there is no guidance on how the Transmission Provider is to convert a

[[Page 63302]]

Total Flowgate Capability to an effective path Total Transfer 
Capability, nor how to convert flowgate Capacity Benefit Margin or 
Transmission Reliability Margin into an equivalent path-based value. 
TranServ also requests that the Commission direct either NAESB or NERC 
to provide the necessary computational standards to meet the 
Commission's posting requirements of 18 CFR 37.6.
ii. Commission Determination
    110. Responsibility for developing an acceptable formula to convert 
available flowgate capacity to available transfer capability rests with 
NERC, and not NAESB. Our focus in this rulemaking is to evaluate 
NAESB's revised business practice standards, and the comments filed in 
response to our NOPR, to determine whether we should incorporate 
NAESB's revised standards by reference into our regulations. Thus, we 
find that this issue is beyond the scope of this proceeding.
h. Incorporation by Reference
i. Comments
    111. While NRECA and APPA\100\ do not object to the substance of 
the NAESB standards, they oppose the Commission's proposal to 
incorporate by reference non-public standards into its regulations and 
the OATTs of public utilities. NRECA and APPA claim that by 
incorporating standards by reference, the Commission is depriving those 
industry participants that are unable to participate in the time- and 
resource-intensive NAESB standards development process of adequate 
notice or a reasonable opportunity to comment on the standards before 
they are enacted. They argue that the Commission's ordinary notice and 
comment rulemaking process is more cost-effective for smaller 
stakeholders, as they are provided with the opportunity to submit 
comments before a neutral arbiter without incurring the costs involved 
in the time- and resource-intensive private standards development 
process. In addition, NRECA and APPA contend that, because these 
standards are incorporated by reference, industry participants without 
knowledge of, or practical access to, these rules may have to defend 
themselves against enforcement action by the Commission based on 
alleged noncompliance with the standards. Specifically, NRECA and APPA 
cite the enhancement of the Commission's civil penalty authority in 
EPAct 2005 and the possibility that such penalties could be enforced 
against transmission customers for violations of the OATT.
---------------------------------------------------------------------------

    \100\ NCEMC supports the comments filed by NRECA and APPA.
---------------------------------------------------------------------------

    112. Additionally, NRECA and APPA claim that the Commission has 
taken the National Technology Transfer and Advancement Act of 1995 
(NTT&AA) out of context, as it applies to practices regarding federal 
procurement contracts and places no affirmative obligations on agencies 
outside of that context.
    113. Therefore, they contend that the Commission can and should 
reproduce the content of the standards in order to provide for greater 
transparency and compliance.
    114. To address these issues, NRECA and APPA recommend that the 
Commission ``(1) cease incorporating NAESB standards by reference into 
the pro forma OATT and instead promulgate its standards by ordinary 
notice and comment rulemaking; (2) provide substantially greater access 
to those materials that are promulgated in regulations; (3) or, at a 
minimum, clarify that FERC will not attempt to assess civil penalties 
on transmission customers for violations of standards that have merely 
been incorporated by reference into regulations and OATTs of public 
utilities.'' \101\ To support their position for Commission publication 
of the standards, NRECA and APPA claim that the United States Court of 
Appeals for the Fifth Circuit clarified that the contents of privately 
developed standards are not subject to copyright protections once 
incorporated.\102\
---------------------------------------------------------------------------

    \101\ NRECA and APPA at 7.
    \102\ NRECA and APPA at 9. These commenters cite Veeck v. 
Southern Building Code Congress International, Inc., 293 F.3d 791 
(5th Cir. 2002), cert. denied, 539 U.S. 969 (2003) (Veeck) for the 
proposition that a model code incorporated into the law becomes part 
of the ``public domain'' and, therefore, is not copyrightable. They 
also cite John G. Danielson, Inc. v. Winchester-Conant Properties, 
Inc., 322 F.3d 26, 39 (1st Cir. 2003) (Danielson) as supporting this 
proposition.
---------------------------------------------------------------------------

ii. Commission Determination
    115. When the Commission first began to establish technical 
standards for communication protocols and business practices for the 
gas and electric industries, the Commission sponsored technical 
conferences and meetings at which all industry participants were 
entitled to participate. For example, when the Commission sponsored the 
process leading up to the OASIS standards adopted in Order No. 889, it 
relied on two ad hoc committees comprised of volunteers who offered to 
host and conduct their own meetings, open to participants from various 
industry sectors and attended by staff observers, to seek consensus on 
proposed OASIS standards. These committees had no formal structure or 
voting rules.
    116. The NAESB process for both the gas and electric industries 
resulted in streamlining the standards development process and making 
it more efficient by creating regularized procedures and voting rules. 
Under the NAESB approved ANSI consensus procedures, each industry 
segment is represented and it is no longer necessary for all 
participants to attend conferences at the Commission in order to ensure 
their votes are heard. They can now participate either directly or 
indirectly through their industry representatives at NAESB. From our 
experience, the NAESB process is far more efficient and cost effective 
method of developing technical standards for the industries involved 
than the use of a notice and comment rulemaking process involving 
numerous technical conferences in Washington that all believe they have 
to attend.
    117. While the NAESB process includes numerous volunteers from the 
industries, NAESB incurs administrative expenses which it must cover. 
Membership dues and fees for obtaining standards provide a reasonable 
means of obtaining the necessary revenue stream.\103\ When the 
Commission weighed the advantages achieved by the NAESB standards 
development process against the cost to the Commission and the industry 
of developing these standards through notice and comment rulemaking, we 
found, and continue to find, that the benefits of having a well-
established, consensus process outweigh whatever costs non-members may 
incur in having to obtain copies of the standards.
---------------------------------------------------------------------------

    \103\ American National Standards Institute, Why Charge for 
Standards, http://www.ansi.org/help/charge_
standards.aspx?menuid=help. Without such a revenue source, the 
Commission would have to consider imposing mandatory charges, 
similar to the mandatory charges to support NERC. 18 CFR 39.4(e).
---------------------------------------------------------------------------

    118. In choosing to take advantage of the efficiency of the NAESB 
process, we followed the government regulations that require the use of 
incorporation by reference. These rules appropriately balance the 
interest of the standards organization and the expediency of 
governmental use of privately developed standards. Under section 552(a) 
of title 5, material may be incorporated by reference when such 
material is reasonably available to the public. Under the regulations 
adopted by the Federal Register, material incorporated by reference is 
maintained at the Office of the Federal Register for public 
viewing.\104\ As part of the

[[Page 63303]]

incorporation process, the material also must be available and 
obtainable by the user.\105\ As we have pointed out in past orders, the 
NAESB standards are easily and readily available from NAESB, as well as 
being available at the Commission and the Office of the Federal 
Register. For example, for those who want to view the standards in 
order to make comments with the Commission, NAESB makes the standards 
available for free for a three day period.\106\ Even for those non-
members seeking to purchase a copy, the standards are available for 
$900, which we do not find prohibitive, given the costs of otherwise 
participating in a notice and comment rulemaking proceeding, including 
the hiring of legal counsel.\107\
---------------------------------------------------------------------------

    \104\ 1 CFR 51.3.
    \105\ 1 CFR 51.9.
    \106\ http://www.naesb.org/misc/NAESB_Nonmember_Evaluation_
LockLizard.pdf.
    \107\ The cost of obtaining the standards likely would be no 
higher than the legal cost to prepare the pleading at issue. http://
www.usdoj.gov/usao/dc/Divisions/Civil_Division/Laffey_Matrix_
3.html. ($180-$380/hour depending on experience under the Laffey 
Matrix estimation procedure); http://www.altmanweil.com/index.cfm/
fa/r.resource_detail/oid/87716caa-56df-4ad9-b375-9e9366ba6d60/
resource/New_Survey_Provides_Snapshot_of_Law_Firm_Economics_
Across_US.cfm. (2007 median Washington DC legal rates of $455/hour 
for partners and $295/hour for associates).
---------------------------------------------------------------------------

    119. The Veeck case cited by the commenters dealt only with a 
third-party reprinting of local law derived from incorporation of a 
model building code. The case did not invalidate the copyrights held by 
the organization over their standards, nor did it require, nor 
authorize the government to provide copies of private sector standards 
either prior to or after incorporation by reference.\108\
---------------------------------------------------------------------------

    \108\ Veeck, 293 F.3d at 803 (case deals only with the 
``relationship between non-federal government entities and copyright 
holders''). The court also emphasized that it was not dealing with 
extrinsic standards that government agencies incorporate by 
reference as part of the technical requirements of a government 
regulation, similar to our use of the NAESB standards as technical 
implementation of the Commission's OASIS regulations. Veeck, 293 
F.3d at 84; see CCC Info. Services v. Maclean Hunter Market Reports, 
Inc., 44 F.3d 61 (2nd Cir. 1994); and Practice Management Info. 
Corp. v. American Medical Ass'n, 121 F.3d 516 (9th Cir. 1997), 
opinion amended by 133 F.3d 1140 (9th Cir. 1998). Unlike Veeck, 
NAESB does not solicit incorporation by reference. Veeck, 293 F.3d 
at 805. Likewise, in Danielson, the court found that architectural 
drawings were not made into judicial decisions and statutes in the 
public domain merely because they were referenced in a recorded 
deed.
---------------------------------------------------------------------------

    120. Indeed, OMB Circular A-119 requires government agencies 
incorporating privately developed standards to ``observe and protect 
the rights of the copyright holder and any other similar obligations.'' 
\109\ In addition to copyright, the Commission also is barred 
contractually from reproducing the standards for distribution to third 
parties.\110\
---------------------------------------------------------------------------

    \109\ OMB Circular No. A-119 (Revised February 10, 1998), at 6J, 
http://www.whitehouse.gov/omb/rewrite/circulars/a119/a119.html. See 
28 U.S.C.Sec.  1498 (federal government may be liable for copyright 
infringement). Other government agencies similarly have denied 
requests to publish copies of privately developed standards. See 
Updating OSHA Standards Based on National Consensus Standards, 74 FR 
46350-46361 (September 9, 2009) (``OSHA notes that copyright laws 
protect national consensus standards''); Airworthiness Directives; 
Airbus Model A300 Airplanes, 72 FR 6923 (Feb. 14, 2007) (finding 
that incorporated by reference materials ``do not lose their 
copyright protection''). Taken to its logical extreme, NRECA and 
APPA's argument would require that a school system's decision to 
require children to acquire and read the novel ``Fahrenheit 451'' 
over summer vacation operates to vitiate the copyright and obligates 
the system to reprint the text of the novel. See Veeck, 293 F.3d at 
804-805 (copyrighted works do not ``become law'' merely because a 
statute refers to them); CCC Info. Servs. 44 F.3d at 74 (``It 
scarcely extends CCC's argument to require that all such assigned 
books lose their copyright--as one cannot comply with the legal 
requirements without using the copyrighted works'').
    \110\ Agreement Granting Permission to Copy Standards (August 9, 
1996), http://www.naesb.org/pdf4/gisb_copy_permission_to_ferc_
080996.pdf.
---------------------------------------------------------------------------

    121. Nor do we find that the need for public utilities to obtain 
standards to comply with Commission regulations is a sufficient reason 
to reconsider the Commission's reliance on the NAESB process. Public 
utilities must incur numerous fees as a cost of doing business, 
including the payment of Commission annual charges, the filing of 
mandated reports and forms, and the costs incurred in having to 
maintain those records. As to commenters' argument that the Commission 
has misinterpreted section 12d of the NTT&AA, we find that the Act and 
the accompanying regulations are not limited to procurement 
specifications, as suggested in the comments, but include adoption of 
standards ``as a means to carry out policy objectives or activities.'' 
\111\ In any event, as discussed above, we see benefits to the 
continued role of NAESB in developing electronic communication and 
business practice standards for public utilities, whether required by 
NTT&AA or not.
---------------------------------------------------------------------------

    \111\ Public Law 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C. 
272 note (1997). OMB Circular A-119 (agency ``must use voluntary 
consensus standards, both domestic and international, in its 
regulatory'' as well as procurement activities).
---------------------------------------------------------------------------

III. Implementation Dates and Procedures

    122. OATI \112\ supports the Commission's proposed actions and has 
no immediate concerns with any of the proposed standards. Both OATI and 
TranServ suggest that the Commission should defer implementation of 
WEQ-002, WEQ-003, and WEQ-013 for a minimum of six to nine months to 
allow transmission providers sufficient time to modify their existing 
OASIS systems and make necessary changes to their processes, 
procedures, and other supporting software systems. Both also suggest 
avoiding implementation during the summer or winter peak seasons.
---------------------------------------------------------------------------

    \112\ Open Access Technology International, Inc. (OATI) is a 
supplier of software for the electric industry, including OASIS and 
back-office supporting systems.
---------------------------------------------------------------------------

    123. APS argues that because the postings for the ATC Information 
Link and Postback Requirements relate to the Implementation Documents 
required by the NERC standards, there should not be an effective 
requirement to post items related to these documents prior to the date 
on which the underlying NERC rules take effect. Therefore, APS requests 
that the requirements of Standards 001-18 through 001-18.2 have the 
same effective date as the NERC available transfer capability related 
standards.
    124. Entergy argues that because Standards 001-13.1.5, 001-14.1, 
and 001-15.1 relate to, and potentially depend on, the NERC reliability 
standards, the Commission should consider the need to coordinate the 
effective dates of these two sets of standards.\113\
---------------------------------------------------------------------------

    \113\ Entergy at 6-7.
---------------------------------------------------------------------------

    125. While Entergy acknowledges the difficulty of developing a 
single industry methodology for implementing Standard 001-21.1.6, 
because Entergy believes that it does not provide significant guidance 
as to how transmission providers should implement this standard, 
Entergy argues that its implementation will require significant 
software development. To address this issue, Entergy asks that the 
Commission set the effective date of this provision to coincide with 
the date at which the OASIS vendors will have developed the appropriate 
software modifications necessary to implement this standard.\114\
---------------------------------------------------------------------------

    \114\ Id. at 4-5.
---------------------------------------------------------------------------

A. Commission Determination

    126. In light of the time needed to plan and complete the complex 
tasks involved in implementing the standards we are adopting in this 
Final Rule, as well as the desirability of aligning the implementation 
of the requirements in these standards that relate to the NERC 
standards being adopted in Docket No. RM08-19-000, we will make the 
implementation date for compliance with the NAESB standards we are 
incorporating by reference in this Final Rule coincident with the 
implementation date applicable to the NERC reliability standards that 
the

[[Page 63304]]

commission approved in an order being issued concurrently with this 
order. Accordingly, public utilities subject to these requirements will 
not be required to comply with these standards until the first day of 
the first quarter occurring 365 days after approval of the referenced 
Reliability Standards by all applicable regulatory authorities.
    127. However, as we stated above, a revised Attachment C to the 
OATT must be filed on or before 275 days after approval of the NERC 
Reliability Standards being addressed in Docket No. RM08-19-000 by all 
applicable regulatory authorities.
    128. Consistent with our regulation at 18 CFR 35.28(c)(vi), each 
electric utility must revise its OATT to include the Version 002.1 WEQ 
standards that we are incorporating by reference herein. For standards 
that do not require implementing tariff provisions, the Commission will 
allow the utility to incorporate the WEQ standard by reference in its 
OATT. Moreover, as we proposed in the WEQ Version 002.1 NOPR, to 
lighten the burden associated with a stand-alone filing of a revised 
tariff reflecting the standards incorporated by reference in this Final 
Rule, we are giving public utilities the option of including these 
changes as part of an unrelated tariff filing, provided that the 
revised tariff is filed with the Commission at least ninety days before 
the prescribed date for compliance with the revised standards (the 
first day of the first quarter occurring 365 days after approval of the 
referenced Reliability Standards by all applicable regulatory 
authorities). In addition, consistent with our prior practice, if a 
public utility fails to file the required tariff revisions prior to the 
compliance date, it nonetheless must abide by these standards even 
before it has updated its tariff to incorporate these changes.
    129. If adoption of these standards does not require any changes or 
revisions to existing OATT provisions, public utilities may comply with 
this rule by adding a provision to their OATTs that incorporates the 
standards adopted in this rule by reference, including the standard 
number and Version 002.1 to identify the standard. To incorporate these 
standards into their OATTs, public utilities must use the following 
language in their OATTs: \115\
---------------------------------------------------------------------------

    \115\ As shown, the tariff language to be used should reference 
Version 001 of WEQ-006, as we are not incorporating by reference 
Version 002.1 of WEQ-006 at this time.
---------------------------------------------------------------------------

     Open Access Same-Time Information Systems (OASIS), Version 
1.5 (WEQ-001, Version 002.1, March 11, 2009, with minor corrections 
applied May 29, 2009 and September 8, 2009), with the exception of 
Standards 001-0.1, 001-0.9 through 001-0.13, 001-1.0, 001-9.7, 001-
14.1.3, and 001-15.1.2;
     Open Access Same-Time Information Systems (OASIS) 
Standards & Communications Protocols, Version 1.5 (WEQ-002, Version 
002.1, March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009);
     Open Access Same-Time Information Systems (OASIS) Data 
Dictionary, Version 1.5 (WEQ-003, Version 002.1, March 11, 2009, with 
minor corrections applied May 29, 2009 and September 8, 2009);
     Coordinate Interchange (WEQ-004, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
     Area Control Error (ACE) Equation Special Cases (WEQ-005, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);
     Manual Time Error Correction (WEQ-006, Version 001, 
October 31, 2007, with minor corrections applied on Nov. 16, 2007);
     Inadvertent Interchange Payback (WEQ-007, Version 002.1, 
March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009);
     Transmission Loading Relief--Eastern Interconnection (WEQ-
008, Version 002.1, March 11, 2009, with minor corrections applied May 
29, 2009 and September 8, 2009);
     Gas/Electric Coordination (WEQ-011, Version 002.1, March 
11, 2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
     Public Key Infrastructure (PKI) (WEQ-012, Version 002.1, 
March 11, 2009, with minor corrections applied May 29, 2009 and 
September 8, 2009); and
     Open Access Same-Time Information Systems (OASIS) 
Implementation Guide, Version 1.5 (WEQ-013, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009).
    130. If a public utility requests waiver of a standard, it will not 
be required to comply with the standard until the Commission acts on 
its waiver request. Therefore, if a public utility has obtained a 
waiver or has a pending request for a waiver, its proposed revision to 
its OATT should not include the standard number associated with the 
standard for which it has obtained or seeks a waiver. Instead, the 
public utility's OATT should specify those standards for which the 
public utility has obtained a waiver or has pending a request for 
waiver. Once a waiver request is denied, the public utility will be 
required to include in its OATT the standard(s) for which waiver was 
denied.

IV. Notice of Use of Voluntary Consensus Standards

    131. Office of Management and Budget Circular A-119 (section 11) 
(February 10, 1998) provides that when a federal agency issues or 
revises a regulation containing a standard, the agency should publish a 
statement in the Final Rule stating whether the adopted standard is a 
voluntary consensus standard or a government-unique standard. In this 
rulemaking, the Commission is incorporating by reference voluntary 
consensus standards developed by the WEQ.

V. Information Collection Statement

    132. OMB's regulations in 5 CFR 1320.11 (2005) require that it 
approve certain reporting and recordkeeping requirements (collections 
of information) imposed by an agency. Upon approval of a collection of 
information, OMB assigns an OMB control number and an expiration date. 
Respondents subject to the filing requirements of this Final Rule will 
not be penalized for failing to respond to this collection of 
information unless the collection of information displays a valid OMB 
control number.
    133. This Final Rule will affect the following existing data 
collections: Standards for Business Practices and Communication 
Protocols for Public Utilities (FERC-717) and Electric Rate Schedule 
Filings (FERC-516).
    134. The following burden estimate is based on the projected costs 
for the industry to implement revisions to the WEQ Standards currently 
incorporated by reference into the Commission's regulations at 18 CFR 
38.2 and to implement the new standards adopted by NAESB that we are 
incorporating by reference in this Final Rule.

[[Page 63305]]

----------------------------------------------------------------------------------------------------------------
                                                                Number of
             Data collection                  Number of       responses per       Hours per     Total number  of
                                             respondents       respondent         response            hours
----------------------------------------------------------------------------------------------------------------
FERC-516................................               176                 1                 6             1,056
FERC-717................................               176                 1                30             5,280
                                         -----------------------------------------------------------------------
    Totals..............................  ................  ................  ................             6,336
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection:
    (Reporting and Recordkeeping, (if appropriate)) = 6336 hours.
    Information Collection Costs: The Commission projects the average 
annualized cost for all respondents to be the following: \116\
---------------------------------------------------------------------------

    \116\ The total annualized cost for the information collections 
is $2,344,320. This number is reached by multiplying the total hours 
to prepare responses (6,336) by an hourly wage estimate of $370 (a 
composite estimate that includes legal, technical and support staff 
rates, $250 + $95 + $25 = $370), 6,336 hours x $370/hour = 
$2,344,320.

------------------------------------------------------------------------
                                          FERC-516          FERC-717
------------------------------------------------------------------------
Annualized Capital/Startup Costs....          $390,720        $2,344,320
Annualized Costs (Operations &                     N/A  ................
 Maintenance).......................
                                     -----------------------------------
    Total Annualized Costs..........           390,720         2,344,320
------------------------------------------------------------------------

    135. The Commission sought comments on the burden of complying with 
the requirements imposed by these requirements. No comments were filed 
addressing the reporting burden.\117\
---------------------------------------------------------------------------

    \117\ We note, however, that two comments argued that it would 
be too costly for small entities to obtain copies of the NAESB 
Standards from NAESB. We addressed these comments in the preamble of 
this Final Rule.
---------------------------------------------------------------------------

    136. The Commission's regulations adopted in this rule are 
necessary to establish a more efficient and integrated wholesale 
electric power grid. Requiring such information ensures both a common 
means of communication and common business practices that provide 
entities engaged in the wholesale transmission of electric power with 
timely information and uniform business procedures across multiple 
transmission providers. These requirements conform to the Commission's 
goal for efficient information collection, communication, and 
management within the electric power industry. The Commission has 
assured itself, by means of its internal review, that there is 
specific, objective support for the burden estimates associated with 
the information requirements.
    137. OMB regulations \118\ require OMB to approve certain 
information collection requirements imposed by agency rule. The 
Commission is submitting notification of this proposed rule to OMB. 
These information collections are mandatory requirements.
---------------------------------------------------------------------------

    \118\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    Title: Standards for Business Practices and Communication Protocols 
for Public Utilities (formerly Open Access Same Time Information 
System) (FERC-717); Electric Rate Schedule Filings (FERC-516).
    Action: Final Rule.
    OMB Control No.: 1902-0096 (FERC-516); 1902-0173 (FERC-717).
    Respondents: Business or other for profit (Public Utilities--Not 
applicable to small businesses).
    Frequency of Responses: One-time implementation (business 
procedures, capital/start-up).
    Necessity of the Information: This rule will upgrade the 
Commission's current business practice and communication standards to 
comply with the Commission's determinations in Order Nos. 676-C, 890, 
890-A, and 890-B, to explicitly include demand resources in the 
definitions of certain ancillary services, to clarify parties' rollover 
rights, to clarify the differences in timing requirements for the 
Western Electricity Coordinating Council and all other interconnections 
by modifying the Coordinate Interchange Timing Tables contained in 
Appendix D of the Coordinate Interchange Standards (WEQ-004), and to 
modify the Transmission Loading Relief--Eastern Interconnection 
Standards (WEQ-008) to add clarity and ensure that the business 
practice standards are consistent with NERC reliability standard IRO-
006.
    138. These changes will ensure that potential customers of open 
access transmission service receive access to information that will 
enable them to obtain transmission service on a non-discriminatory 
basis, will assist the Commission in maintaining a safe and reliable 
infrastructure and also will assure the reliability of the interstate 
transmission grid. The implementation of these standards and 
regulations is necessary to increase the efficiency of the wholesale 
electric power grid.
    139. The information collection requirements of this Final Rule are 
based on the transition from transactions being made under the 
Commission's existing business practice standards to conducting such 
transactions under the proposed revisions to these standards and to 
account for the burden associated with the new standard(s) being 
proposed here.
    140. Internal Review: The Commission has reviewed the revised 
business practice standards and has made a determination that the 
revisions adopted in this Final Rule are necessary to maintain 
consistency between the business practice standards and reliability 
standards on this subject. The Commission has assured itself, by means 
of its internal review, that there is specific, objective support for 
the burden estimate associated with the information requirements.
    141. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, Attn: Michael Miller, Office of the Executive Director, 888 
First Street, NE., Washington, DC 20426, Tel: (202) 502-8415/Fax: (202) 
273-0873, E-mail: michael.miller@ferc.gov.

VI. Environmental Analysis

    142. 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

[[Page 63306]]

environment.\119\ The Commission has categorically excluded certain 
actions from these requirements as not having a significant effect on 
the human environment.\120\
---------------------------------------------------------------------------

    \119\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act of 1969, 52 FR 47897 (Dec. 17, 1987), FERC 
Stats. & Regs., Regs. Preambles ] 30,783 (1987).
    \120\ 18 CFR 380.4.
---------------------------------------------------------------------------

    143. The actions required by this Final Rule fall within 
categorical exclusions in the Commission's regulations for rules that 
are clarifying, corrective, or procedural, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of electric power that requires no construction of 
facilities.\121\ Therefore, an environmental assessment is unnecessary 
and has not been prepared in this Final Rule.
---------------------------------------------------------------------------

    \121\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act Certification

    144. The Regulatory Flexibility Act of 1980 (RFA)\122\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The regulations adopted here impose requirements only on public 
utilities, which are not small businesses, and, these requirements are, 
in fact, designed to benefit all customers, including small businesses.
---------------------------------------------------------------------------

    \122\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    145. The Commission has followed the provisions of both the RFA and 
the Paperwork Reduction Act on potential impact on small business and 
other small entities. Specifically, the RFA directs agencies to 
consider four regulatory alternatives to be considered in a rulemaking 
to lessen the impact on small entities: tiering or establishment of 
different compliance or reporting requirements for small entities, 
classification, consolidation, clarification or simplification of 
compliance and reporting requirements, performance rather than design 
standards, and exemptions. As the Commission originally stated in Order 
No. 889, the OASIS regulations now known as Standards for Business 
Practices and Communication Protocols for Public Utilities, apply only 
to public utilities that own, operate, or control transmission 
facilities subject to the Commission's jurisdiction and should a small 
entity be subject to the Commission's jurisdiction, it may file for 
waiver of the requirements.\123\ This is consistent with the exemption 
provisions of the RFA. Accordingly, pursuant to section 605(b) of the 
RFA,\124\ the Commission hereby certifies that the regulations proposed 
herein will not have a significant adverse impact on a substantial 
number of small entities.
---------------------------------------------------------------------------

    \123\ We also have provided for requests of waiver in instances 
where compliance would be very burdensome and a waiver would not 
diminish the overall benefits of the standards. See supra P 107, 
130.
    \124\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VIII. Document Availability

    146. 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.
    147. From FERC's Home Page on the Internet, this information is 
available in the eLibrary. The full text of this document is available 
in the eLibrary both 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.\125\
---------------------------------------------------------------------------

    \125\ NAESB's Dec. 26, 2007 submittal is also available for 
viewing in eLibrary. The link to this file is as follows: http://
elibrary.ferc.gov:0/idmws/doc_info.asp?document_id=13566661.
---------------------------------------------------------------------------

    148. User assistance is available for eLibrary and the FERC's 
website during our normal business hours. For assistance contact FERC 
Online Support at FERCOnlineSupport@ferc.gov or toll-free at (866) 208-
3676, or for TTY, contact (202) 502-8659.

IX. Effective Date and Congressional Notification

    149. This Final Rule will become effective January 4, 2010. The 
Commission has determined with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, that this rule is not a major rule within the meaning of 
section 251 of the Small Business Regulatory Enforcement Fairness Act 
of 1996.\126\
---------------------------------------------------------------------------

    \126\ See 5 U.S.C. 804(2).
---------------------------------------------------------------------------

List of Subjects in 18 CFR Part 38

    Conflict of interests, Electric power plants, Electric utilities, 
Incorporation by reference, Reporting and recordkeeping requirements.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

0
In consideration of the foregoing, the Commission amends Chapter I, 
Title 18, part 38 of the Code of Federal Regulations, as follows:

PART 38--BUSINESS PRACTICE STANDARDS AND COMMUNICATION PROTOCOLS 
FOR PUBLIC UTILITIES

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1. The authority citation for part 38 continues to read as follows:

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

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2. Amend Sec.  38.2 by:
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a. Revising paragraphs (a)(1) through (a)(5) and (a)(7) through (a)(11) 
as set forth below.
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b. Amending paragraph (b) to add the phrase ``(713) 356-0060, http://
www.naesb.org'' after the phrase ``77002'' and adding ``(202) 502-
8371'' after the phrase ``20426.''

Sec.  38.2  Incorporation by reference of North American Energy 
Standards Board Wholesale Electric Quadrant standards.

    (a) * * *
    (1) Open Access Same-Time Information Systems (OASIS), Version 1.5 
(WEQ-001, Version 002.1, March 11, 2009, with minor corrections applied 
May 29, 2009 and September 8, 2009, with the exception of Standards 
001-0.1, 001-0.9 through 001-0.13, 001-1.0, 001-9.7, 001-14.1.3, and 
001-15.1.2);
    (2) Open Access Same-Time Information Systems (OASIS) Standards & 
Communication Protocols, Version 1.5 (WEQ-002, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (3) Open Access Same-Time Information Systems (OASIS) Data 
Dictionary, Version 1.5 (WEQ-003, Version 002.1, March 11, 2009, with 
minor corrections applied May 29, 2009 and September 8, 2009);
    (4) Coordinate Interchange (WEQ-004, Version 002.1, March 11, 2009, 
with minor corrections applied May 29, 2009 and September 8, 2009);
    (5) Area Control Error (ACE) Equation Special Cases (WEQ-005, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);
* * * * *
    (7) Inadvertent Interchange Payback (WEQ-007, Version 002.1, March 
11, 2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (8) Transmission Loading Relief--Eastern Interconnection (WEQ-008, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);

[[Page 63307]]

    (9) Gas/Electric Coordination (WEQ-011, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (10) Public Key Infrastructure (PKI) (WEQ-012, Version 002.1, March 
11, 2009, with minor corrections applied May 29, 2009 and September 8, 
2009); and
    (11) Open Access Same-Time Information Systems (OASIS) 
Implementation Guide, Version 1.5 (WEQ-013, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009).
* * * * *
[FR Doc. E9-28619 Filed 12-2-09; 8:45 am]

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