Document ID: FERC-2008-0607-0001
Agency: ferc
Document Type: Proposed Rule
Title: Standards for Business Practices and Communication Protocols for Public Utilities
Posted Date: 2008-04-28T04:00Z

[Federal Register: April 28, 2008 (Volume 73, Number 82)]
[Proposed Rules]               
[Page 22849-22856]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28ap08-20]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 38

[Docket No. RM05-5-005]

 
Standards for Business Practices and Communication Protocols for 
Public Utilities

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes 
to incorporate by reference in its regulations the latest version 
(Version 001) of certain standards adopted by the Wholesale Electric 
Quadrant (WEQ) of the North American Energy Standards Board (NAESB). 
NAESB's standards revise its Open Access Same-Time Information Systems 
(OASIS) business practice standards and four business practice 
standards relating to reliability issues, add new standards on 
transmission loading relief for the Eastern Interconnection and public 
key infrastructure, and add a new OASIS implementation guide.

DATES: Comments on the proposed rule are due May 28, 2008.

ADDRESSES: You may submit comments identified by Docket No. RM05-5-005, 
by one of the following methods:
     Agency Web site: http://ferc.gov. Follow the instructions 
for submitting comments via the eFiling link found in the Comment 
Procedures Section of the preamble.
     Mail: Commenters unable to file comments electronically 
must mail or hand deliver an original and 14 copies of their comments 
to the Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street, NE., Washington, DC 20426. Please refer 
to the Comment Procedures Section of the preamble for additional 
information on how to file paper comments.

FOR FURTHER INFORMATION CONTACT:

Gary D. Cohen (legal issues), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, (202) 502-8321.
Kay Morice (technical issues), Office of Energy Market Regulation, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6507.
Ryan M. Irwin (technical issues), Office of Energy Market Regulation, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6454.

SUPPLEMENTARY INFORMATION:
    1. The Federal Energy Regulatory Commission (Commission) proposes 
to amend its regulations under the Federal Power Act \1\ to incorporate 
by reference the latest version (Version 001) of certain business 
practice standards concerning the Open Access Same-Time Information 
Systems (OASIS) and four business practice standards relating to 
reliability issues adopted by the Wholesale Electric Quadrant (WEQ) of 
the North American Energy Standards Board (NAESB). These revised 
standards update earlier versions of these standards that the 
Commission previously incorporated by reference into its regulations at 
18 CFR 38.2 in Order Nos. 676 and 676-B.\2\ In addition, we propose to 
incorporate by reference NAESB's new standards on transmission loading 
relief for the Eastern Interconnection and public key infrastructure, 
and add a new OASIS implementation guide.
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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, 71 FR 26199 (May 4, 2006), FERC 
Stats. & Regs., Regulations Preambles ] 31,216 (Apr. 25, 2006), 
reh'g denied, Order No. 676-A, 116 FERC ] 61,255 (2006), Order No. 
676-B, 72 FR 21095 (Apr. 30, 2007), FERC Stats. & Regs. ] 31,246 
(Apr. 19, 2007).
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I. Background

NAESB

    2. NAESB is a non-profit standards development organization 
established in January 2002 that serves as an industry forum for the 
development and promotion of business practice standards that promote a 
seamless marketplace for wholesale and retail natural gas and 
electricity.\3\ 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.\4\
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    \3\ See Standards for Business Practices and Communication 
Protocols for Public Utilities, Notice of Proposed Rulemaking, 72 FR 
8318 (Feb. 27, 2007), FERC Stats. & Regs. ] 32,612 at P 3 (Feb. 20, 
2007).
    \4\ Id.
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    3. NAESB's standards include business practices that streamline the

[[Page 22850]]

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 and participate in standards development.\5\
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    \5\ Id. at P 4.
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    4. 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 relevant industry segments.\6\
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    \6\ Id. at P 5.
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Order Nos. 676 and 676-B

    5. In Order No. 676, with certain specified exceptions, the 
Commission incorporated by reference into its regulations at 18 CFR 
38.2 the Version 000 OASIS Business Practice Standards adopted by NAESB 
in January 2005. In Order No. 676, the Commission also incorporated by 
reference into its regulations at 18 CFR 38.2 NAESB's OASIS Standards & 
Communication Protocols, OASIS Data Dictionary and four business 
practice standards related to reliability issues. Specifically, the 
business practice standards related to reliability issues are: 
Coordinate Interchange, WEQ-004, Version 000; Area Control Error (ACE) 
Equation Special Cases, WEQ-005, Version 000; Manual Time Error 
Correction, WEQ-006, Version 000; and Inadvertent Interchange Payback, 
WEQ-007, Version 000.
    6. In Order No. 676, the Commission not only adopted business 
practice standards and communication protocols for the wholesale 
electric industry, it also established a formal ongoing process for 
reviewing and upgrading the Commission's OASIS standards and other 
wholesale electric industry business practice standards.\7\
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    \7\ In developing the original OASIS standards and 
communications protocols adopted in Order No. 889, and revised in 
subsequent orders, the Commission enlisted the assistance of two ad 
hoc industry working groups (the ``How'' Group and the ``What'' 
Group) that developed proposals for OASIS standards and 
communications protocols that the Commission reviewed, modified 
where appropriate, and ultimately adopted as Commission regulations 
and requirements. See Open Access Same-Time Information System 
(OASIS) and Standards of Conduct, Order No. 889, 61 FR 21737 (May 
10, 1996), FERC Stats. & Regs., Regulations Preambles January 1991-
June 1996 ] 31,035 at 31,588-89 & n. 13 (Apr. 24, 1996). In Order 
No. 676, this informal process was replaced by the more formal NAESB 
process, where NAESB, as an ANSI-approved standards development 
organization, adopted standards and requirements that were then 
reported to the Commission to consider and, following public 
comment, incorporate by reference into its regulations, where 
appropriate.
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    7. In Order No. 676-B, the Commission incorporated by reference 
into its regulations at 18 CFR 38.2 the revised Coordinate Interchange 
Standards adopted by NAESB in June 2005.

NAESB's Version 001 Report

    8. On December 26, 2007, NAESB filed a report informing the 
Commission that the NAESB WEQ had ratified WEQ Version 001 of its 
standards. These standards include several modifications to the 
existing business practice standards that the Commission incorporated 
by reference in Order Nos. 676 and 676-B, as well as creating new 
standards to provide additional functionality for OASIS transactions, 
transmission loading relief for the Eastern Interconnection, and public 
key infrastructure. Some of the standards subsequently were corrected 
by the WEQ and these minor corrections were applied to the Version 001 
standards on November 16, 2007.\8\ NAESB's WEQ Version 001 includes the 
following standards:
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    \8\ The Version 001 standards do not include modifications of 
existing standards or new standards to support Order No. 890, the 
Commission's Final Rule amending the Commission's pro forma Open 
Access Transmission Tariff, Preventing Undue Discrimination and 
Preference in Transmission Service, 72 FR 12266 (Mar. 15, 2007), 
FERC Stats. & Regs. ] 31,241 (Feb. 16, 2007), order on reh'g, Order 
No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & Regs. ] 31,261 
(Dec. 28, 2007), reh'g pending, with the exception of modifications 
to resales and transfers to address the Commission's rules for 
resales described in Order No. 890 in P 815 and footnote 496.
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     Business Practices for Open Access Same-Time Information 
Systems (OASIS), Version 1.4 (WEQ-001); \9\
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    \9\ The WEQ Version 001 package of standards includes Version 
1.4 of the OASIS Standards. The reference to Version 1.4 is based on 
the fact that this is the fourth set of revisions to the Version 1.0 
OASIS Standards that the Commission adopted in Order No. 889. The 
Version 1.4 reference appears in Standards WEQ-001, WEQ-002, WEQ-
003, and WEQ-013.
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     Business Practices for Open Access Same-Time Information 
Systems (OASIS) Standards & Communications Protocols, Version 1.4 (WEQ-
002);
     OASIS Data Dictionary, Version 1.4 (WEQ-003);
     Coordinate Interchange (WEQ-004); \10\
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    \10\ In a Notice of Proposed Rulemaking (NOPR), being issued 
contemporaneously by the Commission in Docket No. RM08-7-000, the 
Commission proposes, pursuant to section 215 of the Federal Power 
Act, to approve six modified Reliability Standards submitted to the 
Commission for approval by the North American Electric Reliability 
Corporation (NERC). In the proceeding in Docket No. RM08-7-000, the 
Commission is addressing modified Reliability Standards, while in 
the instant proceeding, in Docket No. RM05-5-005, the Commission is 
addressing, among other matters, the business practice standards 
related to these Reliability Standards. Five of the modified 
Reliability Standards being addressed in the proceeding in Docket 
No. RM08-7-000 pertain to interchange scheduling and coordination 
and one pertains to transmission loading relief procedures. In 
addition, the Commission proposes, in the NOPR being issued in RM08-
7-000, to approve NERC's proposed interpretation of five specific 
Requirements of Commission-approved Reliability Standards.
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     Area Control Error (ACE) Equation Special Cases (WEQ-005);
     Manual Time Error Correction (WEQ-006);
     Inadvertent Interchange Payback (WEQ-007);
     Transmission Loading Relief--Eastern Interconnection (WEQ-
008); \11\
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    \11\ Id.
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     Standards of Conduct for Electric Transmission Providers 
(WEQ-009);
     Contracts Related Standards (WEQ-010);
     Gas/Electric Coordination (WEQ-011); \12\
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    \12\ These standards are identical to the standards the 
Commission incorporated by reference into its regulations at 18 CFR 
38.2 in Order No. 698. Standards for Business Practices for 
Interstate Natural Gas Pipelines; Standards for Business Practices 
for Public Utilities, Order No. 698, 72 FR 38757 (July 16, 2007), 
FERC Stats. & Regs., Regulations Preambles 2006-2007 ] 31,251 (June 
25, 2007), order on clarification and reh'g, Order No. 698-A, 121 
FERC ] 61,264 (2007).
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     Public Key Infrastructure (PKI) (WEQ-012); and
     Business Practices for Open Access Same-Time Information 
Systems (OASIS) Implementation Guide, Version 1.4 (WEQ-013).

II. Discussion

    9. We propose generally to incorporate by reference the NAESB WEQ 
standards.\13\ While many of the standards simply revise or update 
existing standards, some of the standards address new business 
practices. For example, NAESB adopted new business practice standards 
for Resales and Transfers to standardize

[[Page 22851]]

secondary transmission service on OASIS. These standards also 
standardize how Resales and Transfers are conducted off OASIS. NAESB 
also adopted public key infrastructure standards to create greater 
security for business transactions taking place over the Internet. In 
addition, NAESB has revised and added standards establishing business 
practices related to the NERC reliability standards.\14\ In particular, 
NAESB has adopted standards governing transmission loading relief (TLR) 
that specify business practices for cutting transmission services in 
the event of a TLR, consistent with the NERC reliability standards. 
These standards are described more fully in the discussion below.
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    \13\ We do not propose to incorporate by reference in the 
Commission's regulations the following standards: Standards of 
Conduct for Electric Transmission Providers (WEQ-009) and Contracts 
Related Standards (WEQ-010). We do not propose to incorporate these 
standards into the Commission's regulations because WEQ-009 contains 
no substantive standards and merely serves as a placeholder for 
future standards while WEQ-010 contains an optional NAESB contract 
regarding funds transfers. The Commission does not require utilities 
to use such contracts and thus, the Commission does not propose to 
incorporate this standard by reference. In addition, as discussed 
more specifically in note 22, infra, we do not propose to 
incorporate by reference certain portions of WEQ-001.
    \14\ See note 10, supra.
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    10. NAESB approved the standards under its consensus 
procedures.\15\ 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 
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 Sec.  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 a means to carry out policy objectives or 
activities.\16\
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    \15\ The WEQ's procedures ensure that all industry members can 
have input into the development of a business practice standard, 
whether or not they are members of NAESB, and each standard it 
adopts is supported by a consensus of the five industry segments: 
transmission, generation, marketer/brokers, distribution/load 
serving entities, and end users. 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 five industry segments. For 
final approval, 67 percent of the WEQ's general membership must 
ratify the standards.
    \16\ Public Law No. 104-113, 12(d), 110 Stat. 775 (1996), 15 
U.S.C. 272 note (1997).
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    11. The Commission is also proposing, consistent with our 
regulation at 18 CFR 35.28(c)(vi), to require each electric utility to 
revise its open access transmission tariff (OATT) to include the 
Version 001 WEQ standards we are proposing to incorporate by reference 
herein. For standards that do not require implementing tariff 
provisions, the Commission is proposing to permit the utility to 
incorporate the WEQ standard by reference in its OATT. We are not, 
however, requiring a separate tariff filing to accomplish this change. 
Consistent with our prior practice, we are proposing to give public 
utilities the option of including these changes as part of an unrelated 
tariff filing.\17\ However, consistent with our prior practice, we 
propose that, once the Commission incorporates these standards by 
reference into its regulations, public utilities must abide by these 
standards even before they have updated their tariffs to incorporate 
these changes.
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    \17\ See Order No. 676 at P 100.
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A. OASIS Standards
    12. In Standards WEQ-001, WEQ-002, and WEQ-003, NAESB revises the 
OASIS Standards currently incorporated by reference by the Commission. 
More specifically, in Standard WEQ-001, NAESB adopts new standards 
addressing Resale and Transfer transactions \18\ that are consistent 
with the Commission's policies articulated in Order No. 890.\19\
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    \18\ NAESB defines a ``Resale'' as ``[t]he request to convey 
scheduling rights associated with a reservation for Point-to-Point 
Transmission Service from a Reseller to an Assignee.'' Standard WEQ-
001.0.19. NAESB defines ``Transfer'' as a ``[r]equest to convey all 
rights and obligations associated with a reservation for Point-to-
Point Transmission Service from a Reseller to an Assignee.'' 
Standard WEQ-001-0.20.
    \19\ See Order No. 890, P 815 and n.496.
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    13. In Order No. 890, the Commission adopted reforms to its 
underlying rules governing capacity reassignments. Specifically, the 
Commission required that all sales or assignments of capacity be 
conducted through or otherwise posted on the transmission provider's 
OASIS on or before the date the reassigned service commences.\20\ The 
Commission directed transmission providers (working through NAESB) to 
develop the appropriate OASIS functionality to allow such postings and 
stated that transmission providers need not implement this new OASIS 
functionality and any related business practices until NAESB develops 
appropriate standards. These business practices and functionality have 
now been adopted by NAESB in Standard WEQ-001.
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    \20\ Id.
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    14. The WEQ's Standard WEQ-002 creates a new business practice 
standard requiring a Standards of Conduct link on the OASIS in response 
to the Commission's NOPR that preceded Order No. 676.\21\ In addition, 
WEQ Standard WEQ-002 divides the OASIS Standards and Communications 
Protocols Document (S&CP Document) into two documents, thus separating 
the technical requirements (which remain in WEQ-002) from the business 
requirements (now found in WEQ-013). The WEQ's Standard WEQ-003 revises 
the OASIS Data Dictionary to include minor clarifications or 
corrections to the format, appearance, or descriptions of standards in 
standards documentation, as well as corrections and minor revisions 
that did not materially change a standard.
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    \21\ The types of information accessible from this link include 
Emergency Circumstances Deviations, Marketing and Energy Affiliate 
List, Shared Facilities, Organizational Charts and Job Descriptions, 
Common Employees, Potential Merger Partners, Transfers, Information 
Disclosure, Voluntary Consent to Share Non-Affiliated Customer 
Information, Discretionary Actions Under Tariff, Discounts, Chief 
Compliance Officer, and Written Procedures for Implementation.
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    15. The WEQ's Standard WEQ-013 contains a new OASIS Implementation 
Guide. While this Standard condenses and incorporates the various OASIS 
S&CP Document business practices and requirements that formerly were 
found in WEQ-002 into a separate Implementation Guide, it makes no 
significant substantive changes to the prior standard.
    16. In this NOPR, we propose to incorporate by reference all four 
of these OASIS-related business practice standards, as revised (i.e., 
Standards WEQ-001, WEQ-002, WEQ-003, and WEQ-013).\22\
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    \22\ As we stated in Order No. 676, we are not proposing to 
incorporate by reference WEQ standards 001-0.1, 001-0.9 through 001-
0.13, 001-1.0 through 001-1.8, and 001-9.7, because these standards 
merely restate Commission regulations and because standard 001-9.7 
is not consistent with the Commission's policy on redirects.
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B. Public Key Infrastructure
    17. In Version 001, NAESB has adopted new standards for secure 
communications over the public internet, Public Key Infrastructure 
(PKI) \23\ (WEQ-012). These standards describe the requirements that 
Certification Authorities (CAs) \24\ must meet to claim the electronic 
certificate that a CA issues meets the NAESB WEQ

[[Page 22852]]

PKI Standards and to conform to the NAESB Certification Program and, 
thus, be considered an Authorized Certification Authority (Authorized 
CA).\25\ Providing security for transactions across the public internet 
is an important part of supporting energy markets and system 
reliability functions. Therefore, we propose to update our regulations 
at 18 CFR 38.2 to incorporate by reference Standard WEQ-012.
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    \23\ This PKI mechanism occurs through the use of extremely long 
prime numbers, called keys. Two keys are involved--a private key, 
which only the user has access to, and a public key, which can be 
accessed by anyone. The two keys work together so a message 
scrambled with the private key can only be unscrambled with the 
public key and vice versa. The more digits in these keys, the more 
secure the process. Similar to proving an identity through a 
handwritten signature offline, a digital signature is used to prove 
an identity online.
    \24\ A Certification Authority is a third-party entity that 
issues digital certificates used to create digital signatures and 
public-private key pairs. A Certification Authority plays a critical 
role in data security and electronic commerce since it is entrusted 
to guarantee that the two parties exchanging information are really 
who they claim to be.
    \25\ On achieving NAESB certification, NAESB will provide NERC 
with the names of Authorized CAs. The Authorized CA may immediately 
display the NAESB certification mark and will be authorized to claim 
compliance with NAESB WEQ PKI Standards. All industry applications 
(e.g., OASIS) secured under these PKI Standards must permit access 
to any legitimate user that presents a valid electronic certificate 
issued by an Authorized CA.
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C. Business Standards to Coordinate With Reliability Standards
    18. The WEQ has also adopted revisions to business practice 
standards addressing the business ramifications of certain reliability-
related issues.
1. Coordinate Interchange
    19. In Version 001 standards for Coordinate Interchange (WEQ-004), 
NAESB has made additional modifications to the Coordinate Interchange 
standards that the Commission incorporated by reference into its 
regulations in Order No. 676-B.\26\ These modifications were made to 
account for a regional difference in the Western Electricity 
Coordinating Council regarding acceptable backup methods for creating a 
Request for Interchange, to provide for Purchasing-Selling Entity 
optional approval rights, to explain the terms ``correctable'' and 
``required,'' to clarify that tag data elements may be ``not 
correctable'' or ``not required,'' and to make the element of ``Energy 
Product Type'' required. These modifications were made as a result of a 
joint effort of NERC and NAESB via the Joint Interchange Scheduling 
Working Group which is a committee of both NERC and NAESB participants.
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    \26\ The revised Coordinate Interchange standards were designed 
to facilitate the transfer of electric energy between entities 
responsible for balancing load and generation. Also, the revised 
Coordinate Interchange standards were intended to be compatible with 
the NERC Interchange Scheduling and Coordination Reliability 
Standards that the Commission approved in Order No. 693, Mandatory 
Reliability Standards for the Bulk-Power System, 72 FR 16416 (Apr. 
4, 2007), FERC Stats. & Regs. ] 31,242, at P 961-65 (2007), order on 
reh'g, Order No. 693-A, 120 FERC ] 61,053 (2007).
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    20. We propose to update our regulations at 18 CFR 38.2 to 
incorporate by reference the Coordinate Interchange Standard WEQ-004, 
Version 001. However, we seek comment on two aspects of these 
standards. Standard 004-3.1 states that ``[f]or Interchange where the 
sink is in the Western Interconnection for same day transactions, the 
last Purchasing-Selling Entity before the DC Tie in the Eastern 
Interconnection shall be responsible for submitting the e-Tag.'' This 
standard identifies only the last Purchasing-Selling Entity before the 
DC Tie in the Eastern Interconnection as being responsible for 
submitting the e-Tag Interchange when the sink is in the Western 
Interconnection. However, we request comment on whether, based on the 
NERC standards, this standard also should address whether a Generator 
Owner or Load Serving Entity may schedule directly to the DC Tie owner.
    21. Additionally, Standard 004-6.1.2 states that ``[i]f the PSE, 
LSE, and GPE do not respond to a request from the Interchange 
Authority, the Interchange is considered passively approved.'' While 
confirmation by silence is a common business practice eliminating 
unnecessary communications, we request comment on whether this is 
appropriate for a business practice intended to complement a 
reliability standard.
2. Area Control Error (ACE) Equation Special Cases
    22. In the Version 001 standards for Area Control Error (ACE) 
Equation Special Cases (WEQ-005), NAESB has made only minor 
modifications to the standards to number the definitions and make other 
minor edits. We propose to update our regulations at 18 CFR 38.2 to 
incorporate by reference this revised standard in lieu of the current 
version of this standard.
3. Manual Time Error Correction
    23. In the Version 001 standards for Manual Time Error Correction 
(WEQ-006), NAESB has made changes to remove references to the Electric 
Reliability Council of Texas (ERCOT), to make minor corrections to the 
standards for the Western Interconnection, and to make other minor 
modifications including numbering the definitions. We propose to update 
our regulations at 18 CFR 38.2 to incorporate by reference this revised 
standard in lieu of the current version of this standard.
4. Inadvertent Interchange Payback
    24. In the Version 001 standards for Inadvertent Interchange 
Payback (WEQ-007), NAESB has made changes to remove references to ERCOT 
and make other minor modifications including numbering the definitions. 
We propose to update our regulations at 18 CFR 38.2 to incorporate by 
reference this revised standard in lieu of the current version of this 
standard.
5. Transmission Loading Relief
    25. In Version 001, NAESB has adopted new standards for 
Transmission Loading Relief--Eastern Interconnection (WEQ-008). NAESB 
states that these business practice standards are intended to be 
complementary to the NERC reliability standards INT-004-1--Reliability 
Coordination--Operations Planning and INT-006-4--Reliability 
Coordination--Transmission Loading Relief.\27\ NAESB reports that its 
Transmission Loading Relief (TLR) business practice standards are the 
result of a multi-year joint effort of the NERC Transmission Loading 
Relief Drafting Team and the NAESB WEQ Business Practices Subcommittee 
to split the existing NERC Transmission Loading Relief reliability 
standards into reliability and business practice components. In 
addition, NAESB states that the NAESB WEQ TLR standards have been 
further modified to allow for regional differences for market 
flows.\28\ The NAESB WEQ TLR standards include general requirements 
regarding the use of Interconnection-wide TLR procedures; \29\ 
Interchange Transaction \30\ priorities for use with Interconnection-
wide TLR procedures; the Eastern Interconnection procedure for physical 
curtailment of Interchange Transactions; appendices with various

[[Page 22853]]

examples; and an appendix specifying regional differences for PJM 
Interconnection, L.L.C./Midwest Independent System Operator, Inc. and 
for Southwest Power Pool.
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    \27\ NERC filed a petition seeking approval of its related 
proposed reliability standards, IRO-006-4--Reliability 
Coordination--Transmission Loading Relief, with the Commission in 
Docket No. RM08-7-000. We believe that NAESB's reference to INT-006-
4 should be a reference to IRO-006-4. We also believe that the 
proper subject of INT-004-1 is ``Dynamic Interchange Transaction 
Modifications,'' rather than ``Reliability Coordination--Operations 
Planning.''
    \28\ Market flows are the calculated energy flows on a specified 
Flowgate as a result of the dispatch of generating resources within 
a Market-Based Operating Entity's market. NAESB defines ``Flowgate'' 
as a ``designated point of the transmission system through which the 
Interchange Distribution Calculator calculates the power flow from 
Interchange Transactions.'' The treatment of the market flows of 
regional transmission organizations compared with the treatment of 
generation-to-load impacts of non-market entities as they relate to 
the use of TLRs has been addressed by the Commission in a number of 
cases, including Order No. 693, FERC Stats. & Regs. ] 31,242 at P 
987, Alliance Companies, 100 FERC ] 61,137 (2002) and Midwest 
Independent Transmission System Operator, Inc. and PJM 
Interconnection, L.L.C., 106 FERC ] 61,251 (2004).
    \29\ NAESB defines ``Transmission Loading Relief'' (TLR) as 
``[a] procedure used in the Eastern Interconnection to relieve 
potential or actual loading on a Constrained Facility or Flowgate.'' 
Standard WEQ-008-0.40.
    \30\ NAESB defines an ``Interchange Transaction'' as ``[a] 
transaction that crosses one or more Balancing Authorities' 
boundaries. The planned energy exchange between two adjacent 
Balancing Authorities.'' Standard WEQ-008-0.19.
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    26. The Commission seeks to ensure that the NAESB WEQ TLR business 
practice standards and the proposed NERC TLR reliability standard 
complement each other and can be implemented together harmoniously. 
Therefore, we propose to update our regulations at 18 CFR 38.2 to 
incorporate by reference Standard WEQ-008. We invite comment on this 
proposal.
    27. While we understand that NAESB and NERC have worked 
collaboratively to coordinate their standard development efforts, there 
appear to be several occasions in the TLR standards in which the 
definitions used by the two depart. The following are some examples:
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    \31\ Glossary of Terms Used in Reliability Standards, ftp://
www.nerc.com/pub/sys/all_updl/standards/rs/Glossary_02Aug06.pdf.

------------------------------------------------------------------------
            NAESB definition                   NERC definition \31\
------------------------------------------------------------------------
Balancing Authority Area: [a]n           Balancing Authority Area: [t]he
 electrical system bounded by             collection of generation,
 Interconnection (tie-line) metering      transmission, and loads within
 and telemetry, where the Balancing       the metered boundaries of the
 Authority controls (either directly or   Balancing Authority. The
 by contract) generation to maintain      Balancing Authority maintains
 its Interchange Schedule with other      load-resource balance within
 Balancing Authority Areas and            this area.
 contributes to frequency regulation of
 the Interconnection.
Interchange Transaction: [a]             Interchange Transaction: [a]n
 transaction that crosses one or more     agreement to transfer energy
 Balancing Authorities' boundaries. The   from a seller to a buyer that
 planned energy exchange between two      crosses one or more Balancing
 adjacent Balancing Authorities.          Authority Area boundaries.
Reliability Coordinator: [a]n entity     Reliability Coordinator: [t]he
 that provides the security assessment    entity that is the highest
 and emergency operations coordination    level of authority who is
 for a group of Balancing Authorities,    responsible for the reliable
 Transmission Service Providers, and      operation of the Bulk Electric
 Transmission Operators.                  System, has the Wide Area view
                                          of the Bulk Electric System,
                                          and has the operating tools,
                                          processes and procedures,
                                          including the authority to
                                          prevent or mitigate emergency
                                          operating situations in both
                                          next-day analysis and real-
                                          time operations. The
                                          Reliability Coordinator has
                                          the purview that is broad
                                          enough to enable the
                                          calculation of Interconnection
                                          Reliability Operating Limits,
                                          which may be based on the
                                          operating parameters of
                                          transmission systems beyond
                                          any Transmission Operator's
                                          vision.
------------------------------------------------------------------------

    28. There also appear to be some instances in various NAESB 
standards where the same term is defined differently. For example, the 
definition of Balancing Authority in Standard WEQ-004-0.3 is not 
identical to the definition of that same term in Standard WEQ-008-0.4. 
As the Commission stated in Order No. 676, the standards relating to 
reliability would be clearer if a single definition were used. Although 
in Order No. 676 the Commission generally found that NERC should take 
the lead in defining reliability-related terms, \32\ we recognize that 
good reasons may exist in certain cases for some differences in these 
terms. We therefore request comment on whether the differences in 
definitions are significant and whether a single definition for 
reliability-related terms should be adopted in future standards.
---------------------------------------------------------------------------

    \32\ Order No. 676 at P 40.
---------------------------------------------------------------------------

III. Notice of Use of Voluntary Consensus Standards

    29. The NAESB WEQ standards were adopted pursuant to NAESB's 
consensus procedures.\33\ As the Commission found in Order No. 676, 
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 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, Congress affirmatively requires federal agencies to use 
technical standards developed by voluntary consensus standards 
organizations, like NAESB, as a means to carry out policy objectives or 
activities.\34\
---------------------------------------------------------------------------

    \33\ This process is described in note 15, supra.
    \34\ Public Law 104-113, 12(d), 110 Stat. 775 (1996), 15 U.S.C. 
272 note (1997).
---------------------------------------------------------------------------

    30. Office of Management and Budget Circular A-119 (section 11) 
(February 10, 1998) provides that Federal Agencies should publish a 
request for comment in a NOPR when the agency is seeking to issue or 
revise a regulation proposing to adopt a voluntary consensus standard 
or a government-unique standard. In this NOPR, the Commission is 
proposing to incorporate by reference a voluntary consensus standard 
developed by the WEQ.

IV. Information Collection Statement

    31. The following collection(s) of information contained in this 
proposed rule have been submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the Paperwork 
Reduction Act of 1995, 44 U.S.C. 3507(d). The Commission solicits 
comments on the Commission's need for this information, whether the 
information will have practical utility, the accuracy of the provided 
burden estimates, ways to enhance the quality, utility, and clarity of 
the information to be collected, and any suggested methods for 
minimizing respondents' burden, including the use of automated 
information techniques. Respondents subject to the filing requirements 
of this rule will not be penalized for failing to respond to these 
collections of information unless the collections of information 
display a valid OMB Control number.
    32. 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 
propose here to incorporate by reference.

[[Page 22854]]

----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                 Data collection                     Nunber of     responses per     Hours per     Total number
                                                    respondents     respondent       response        of hours
----------------------------------------------------------------------------------------------------------------
FERC-516........................................             176               1               6            1056
FERC-717........................................             176               1              10            1760
                                                 ---------------------------------------------------------------
Totals..........................................  ..............  ..............  ..............            2816
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection: (Reporting and Recordkeeping, 
(if appropriate)) = 2816 hours.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost for all respondents to be the following: \35\
---------------------------------------------------------------------------

    \35\ The total annualized costs for the information collection 
is $901,120. This number is reached by multiplying the total hours 
to prepare responses (2,816) by an hourly wage estimate of $320 (a 
composite estimate that includes legal, technical and support staff 
rates, $200 + $95 + $25=$320), 2,816 hours x $320/hour= $901,120.

------------------------------------------------------------------------
                                             FERC-516        FERC-717
------------------------------------------------------------------------
Annualized Capital/Startup Costs........        $337,920        $563,200
Annualized Costs (Operations &                       N/A
 Maintenance)...........................
                                         -------------------------------
    Total Annualized Costs..............         337,920         563,200
------------------------------------------------------------------------

    33. OMB regulations \36\ 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.
---------------------------------------------------------------------------

    \36\ 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: Proposed collection.
    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 proposed rule, if implemented 
would upgrade the Commission's current business practice and 
communication standards. Specifically, these standards include several 
modifications to the existing business practice standards as well as 
creating new standards to provide additional functionality for OASIS 
transactions, transmission loading relief and public key 
infrastructure. The standards will assist in providing greater security 
for business transactions over the Internet, identify the business 
practices to be used to relieve potential or actual loading on a 
constrained facility and facilitate the transfer of electric energy 
between entities responsible for balancing load and generation. These 
practices 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 and 
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.
    34. The information collection requirements of this proposed 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 (i.e., WEQ-008 and WEQ-012).
    35. Internal Review: The Commission has reviewed the revised 
business practice standards and has made a preliminary determination 
that the proposed revisions 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.
    36. 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.
    37. Comments concerning the collection of information(s) and the 
associated burden estimate(s), should be sent to the contact listed 
above and to the Office of Management and Budget, Office of Information 
and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer 
for the Federal Energy Regulatory Commission, phone: (202) 395-7856, 
fax: (202) 395-7285].

V. Environmental Analysis

    38. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\37\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\38\ The actions proposed here 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.\39\ Therefore, an environmental assessment is unnecessary 
and has not been prepared in this NOPR.
---------------------------------------------------------------------------

    \37\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs., Regulations Preambles 1986-1990 ]30,783 (1987).
    \38\ 18 CFR 380.4.
    \39\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 380.4(a)(27).

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

[[Page 22855]]

VI. Regulatory Flexibility Act Certification

    39. The Regulatory Flexibility Act of 1980 (RFA) \40\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The regulations proposed 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.
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    40. 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. This is consistent with the exemption 
provisions of the RFA. Accordingly, pursuant to section 605(b) of the 
RFA,\41\ the Commission hereby certifies that the regulations proposed 
herein will not have a significant adverse impact on a substantial 
number of small entities.
---------------------------------------------------------------------------

    \41\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VII. Comment Procedures

    41. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due May 28, 2008. Comments must refer to 
Docket No. RM05-5-005, and must include the commenter's name, the 
organization they represent, if applicable, and their address. Comments 
may be filed either in electronic or paper format.
    42. Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. The Commission 
accepts most standard word processing formats and commenters may attach 
additional files with supporting information in certain other file 
formats. Commenters filing electronically do not need to make a paper 
filing. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426.
    43. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    44. 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.
    45. 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.\42\
---------------------------------------------------------------------------

    \42\ 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.
---------------------------------------------------------------------------

    46. User assistance is available for eLibrary and the FERC's web 
site 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.

List of Subjects in 18 CFR Part 38

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

    By direction of the Commission.

    Commissioner Wellinghoff concurring with a separate statement 
attached.
Kimberly D. Bose,
Secretary.
    In consideration of the foregoing, the Commission proposes to amend 
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

    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.

    2. In Sec.  38.2, paragraphs (a)(1) through (8) are revised, and 
paragraphs (a)(9) through (11) are added to read as follows:

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

    (a) * * *
    (1) Business Practices for Open Access Same-Time Information 
Systems (OASIS), Version 1.4 (WEQ-001, Version 001, October 31, 2007, 
with minor corrections applied on November 16, 2007) with the exception 
of Standards 001-0.1, 001-0.9 through 001-0.13, 001-1.0 through 001-
1.8, and 001-9.7;
    (2) Business Practices for Open Access Same-Time Information 
Systems (OASIS) Standards & Communication Protocols, Version 1.4 (WEQ-
002, Version 001, October 31, 2007, with minor corrections applied on 
November 16, 2007);
    (3) Open Access Same-Time Information Systems (OASIS) Data 
Dictionary, Version 1.4 (WEQ-003, Version 001, October 31, 2007, with 
minor corrections applied on November 16, 2007);
    (4) Coordinate Interchange (WEQ-004, Version 001, October 31, 2007, 
with minor corrections applied on November 16, 2007);
    (5) Area Control Error (ACE) Equation Special Cases (WEQ-005, 
Version 001, October 31, 2007, with minor corrections applied on 
November 16, 2007);
    (6) Manual Time Error Correction (WEQ-006, Version 001, October 31, 
2007, with minor corrections applied on November 16, 2007);
    (7) Inadvertent Interchange Payback (WEQ-007, Version 001, October 
31, 2007, with minor corrections applied on November 16, 2007);
    (8) Transmission Loading Relief--Eastern Interconnection (WEQ-008, 
Version 001, October 31, 2007, with minor corrections applied on 
November 16, 2007);
    (9) Gas/Electric Coordination (WEQ-011, Version 001, October 31, 
2007, with minor corrections applied on November 16, 2007);
    (10) Public Key Infrastructure (PKI) (WEQ-012, Version 001, October 
31,

[[Page 22856]]

2007, with minor corrections applied on November 16, 2007);
    (11) Business Practices for Open Access Same-Time Information 
Systems (OASIS) Implementation Guide, Version 1.4 (WEQ-013, Version 
001, October 31, 2007, with minor corrections applied on November 16, 
2007).
* * * * *

    Note: The following statement will not appear in the Code of 
Federal Regulations.

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM05-5-005]

Standards for Business Practices and Communication Protocols for Public 
Utilities
April 21, 2008.
WELLINGHOFF, Commissioner, concurring:

    Today, the Commission issues a Notice of Proposed Rulemaking (NOPR) 
proposing to amend its regulations under the Federal Power Act \43\ to 
incorporate by reference, among other matters, the latest version of 
certain business practice standards concerning the Open Access Same-
Time Information Systems (OASIS) adopted by the Wholesale Electric 
Quadrant (WEQ) of the North American Energy Standards Board 
(NAESB).\44\ I appreciate NAESB's leadership and the work of the 
industry in developing these business practice standards.
---------------------------------------------------------------------------

    \43\ 16 U.S.C. 791a, et. seq.
    \44\ In addition, the Commission proposes in this NOPR to 
incorporate by reference NAESB's new business practices standards on 
transmission loading relief (TLR) for the Eastern Interconnection. I 
note my concurrence to the separate, concurrently issued NOPR in 
Docket No. RM08-7-000, in which the Commission proposes to approve, 
among other matters, modified Reliability Standard IRO-006-4 
pertaining to TLR procedures to which the NAESB business practice we 
address herein relates.
---------------------------------------------------------------------------

    One of the business practice standards addressed in this NOPR, WEQ-
001 Version 1.4, revises NAESB's Business Practices for OASIS and, 
among other matters, addresses the information that is to be posted on 
OASIS. This information includes posting of ancillary service offerings 
and prices and the process for customers to procure ancillary services.
    I write separately to note that in Order No. 890, the Commission 
determined that many ancillary services may be provided by generating 
units as well as other non-generation resources such as demand 
resources where appropriate.\45\ Nothing in WEQ-001 precludes such a 
role for demand resources, but the definition of certain ancillary 
services in the standard also does not specifically reflect that 
possible role.
---------------------------------------------------------------------------

    \45\ See Order No. 890 at P 888 (addressing the following 
ancillary services: Reactive Supply and Voltage Control, Regulation 
and Frequency Response, Energy Imbalances, Spinning Reserves, 
Supplemental Reserves, and Generator Imbalances (Schedules 2, 3, 4, 
5, 6, and 9, respectively, of the pro forma OATT)).
---------------------------------------------------------------------------

    To remove any confusion between the pro forma tariff that the 
Commission adopted in Order No. 890 and the business practice standards 
for offering and procuring ancillary services on OASIS, I encourage 
NAESB and its stakeholders to amend WEQ-001, as soon as possible, to 
reflect that the above-noted ancillary services may be provided by non-
generation resources such as demand resources. This will facilitate 
implementation of this aspect of the pro forma OATT.
    For this reason, I concur with this NOPR.

Jon Wellinghoff,
Commissioner.
[FR Doc. E8-9046 Filed 4-25-08; 8:45 am]

BILLING CODE 6717-01-P