Document ID: FERC-2014-0682-0001
Agency: ferc
Document Type: Proposed Rule
Title: Open Access and Priority Rights: Interconnection Customers Interconnection Facilities
Posted Date: 2014-05-30T04:00Z

[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]
[Proposed Rules]
[Pages 31061-31072]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11946]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM14-11-000]

Open Access and Priority Rights on Interconnection Customer's 
Interconnection Facilities

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Notice of Proposed Rulemaking, the Federal Energy 
Regulatory Commission proposes to amend its regulations to waive the 
Open Access Transmission Tariff requirements, the Open Access Same-Time 
Information System requirements its regulations, and the Standards of 
Conduct requirements its regulations for any public utility that is 
subject to such requirements solely because it owns, controls, or 
operates Interconnection Customer's Interconnection Facilities, in 
whole or in part, and sells electric energy from its Generating 
Facility, as those terms are defined in the pro forma Large Generator 
Interconnection Procedures and the pro forma Large Generator 
Interconnection Agreement and adopted in Order No. 2003. The Commission 
proposes to find that requiring the filing of an Open Access 
Transmission Tariff is not necessary to prevent unjust or unreasonable 
rates or unduly discriminatory behavior with respect to Interconnection 
Customer's Interconnection Facilities over which interconnection and 
transmission services can be ordered pursuant to the Federal Power Act.

DATES: Comments are due July 29, 2014.

ADDRESSES: You may submit comments, identified by docket number and in 
accordance with the requirements posted on the Commission's Web site, 
http://www.ferc.gov. Comments may be submitted by any of the following 
methods:
     Agency Web site: Documents created electronically using 
word processing software should be filed in native applications or 
print-to-PDF format, and not in a scanned format, at http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery: Commenters unable to file comments 
electronically must mail or hand deliver an original copy of their 
comments to: Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street NE., Washington, DC 20426. These 
requirements can be found on the Commission's Web site, see, e.g., the 
``Quick Reference Guide for Paper Submissions,'' available at http://www.ferc.gov/docs-filing/efiling.asp, or via phone from FERC Online 
Support at (202) 502-6652 or toll-free at 1-866-208-3676.

FOR FURTHER INFORMATION CONTACT:
Becky Robinson (Technical Information), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8868, Becky.Robinson@ferc.gov.
Brian Gish (Legal Information), Office of the General Counsel--Energy 
Markets, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8998, Brian.Gish@ferc.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
I. Introduction.............................................           1
II. Background..............................................           4
    A. Development of ICIF Policies.........................           4
    B. Notice of Inquiry....................................          16
    C. Comments on the Notice of Inquiry....................          18
III. The Need for Reform....................................          23
IV. Proposed Reform.........................................          33
    A. Proposed New Processes for ICIF Access...............          33
        1. Grant Blanket Waivers to Eligible ICIF Owners....          34
        2. Provide Open Access and Establish Priority Rights          41
         to ICIF Through Sections 210 and 211...............
            a. Procedures Under Sections 210 and 211........          42
            b. Application of Sections 210 and 211 to                 47
             Requests for Service on ICIF...................
        3. Safe Harbor for Early Years After ICIF                     54
         Energization.......................................
    B. Affiliate Concerns...................................          59
V. Information Collection Statement.........................          60
VI. Environmental Analysis..................................          65
VII. Regulatory Flexibility Act Analysis....................          66
VIII. Comment Procedures....................................          69
IX. Document Availability...................................          73
Appendix A: List of Short Names of Commenters on the Federal
 Energy Regulatory Commission's Notice of Inquiry on Open
 Access and Priority Rights on Interconnection Facilities--
 Docket No. AD12-14-000, April 2012.
 

    147 FERC ] 61,123.

Notice of Proposed Rulemaking

May 15, 2014.

I. Introduction

    1. In this Notice of Proposed Rulemaking (Proposed Rule), the 
Federal Energy Regulatory Commission (FERC or Commission) proposes to 
amend its regulations to waive the Open Access Transmission Tariff 
(OATT) requirements of 18 CFR 35.28 (2013), the Open Access Same-Time 
Information System (OASIS) requirements of Part 37 of its regulations, 
18 CFR 37 (2013), and the Standards of Conduct requirements of Part 358 
of its regulations, 18 CFR 358 (2013), for any public utility that is 
subject to such requirements solely because it owns, controls, or 
operates Interconnection Customer's Interconnection Facilities 
(ICIF),\1\ in whole or in part, and sells electric

[[Page 31062]]

energy from its Generating Facility, as those terms are defined in the 
pro forma Large Generator Interconnection Procedures (LGIP) and the pro 
forma Large Generator Interconnection Agreement (LGIA) \2\ and adopted 
in Order No. 2003.\3\ The Commission proposes to find that requiring 
the filing of an OATT is not necessary to prevent unjust or 
unreasonable rates or unduly discriminatory behavior with respect to 
ICIF over which interconnection and transmission services can be 
ordered pursuant to sections 210, 211, and 212 of the Federal Power Act 
(FPA).\4\
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    \1\ The term ``generator tie line'' has often been used in the 
past to refer to the facilities defined as ICIF. The Commission uses 
the term ICIF in this Proposed Rule.
    \2\ Throughout this Proposed Rule, the terms LGIP and LGIA refer 
to the pro forma versions of those documents. The LGIA defines ICIF 
as ``all facilities and equipment, as identified in Appendix A of 
the Standard Large Generator Interconnection Agreement, that are 
located between the Generating Facility and the Point of Change of 
Ownership, including any modification, addition, or upgrades to such 
facilities and equipment necessary to physically and electrically 
interconnect the Generating Facility to the Transmission Provider's 
Transmission System. Interconnection Customer's Interconnection 
Facilities are sole use facilities.'' LGIA Article 1. The LGIP, in 
Section 1, contains identical definitions to those in Article 1 of 
the LGIA.
    \3\ Standardization of Generator Interconnection Agreements and 
Procedures, Order No. 2003, 68 FR 49845 (Aug. 19, 2003), FERC Stats. 
& Regs. ] 31,146 (2003), order on reh'g, Order No. 2003-A, 69 FR 
15932 (Mar. 26, 2004), FERC Stats. & Regs. ] 31,160, order on reh'g, 
Order No. 2003-B, 70 FR 265 (Jan. 4, 2005), FERC Stats. & Regs. ] 
31,171 (2004), order on reh'g, Order No. 2003-C, 70 FR 37661 (Jun. 
30, 2005), FERC Stats. & Regs. ] 31,190 (2005), aff'd sub nom. Nat'l 
Ass'n of Regulatory Util. Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 
2007).
    \4\ 16 U.S.C. 824i, 824j, and 824k (2012).
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    2. Accordingly, with the goal of reducing regulatory burdens and 
promoting development of generating facilities while continuing to 
ensure open access to transmission facilities, the Commission proposes 
to find that those seeking transmission service over ICIF that are 
subject to the proposed blanket waiver discussed below must follow 
procedures applicable to requests for interconnection and/or 
transmission service under sections 210, 211, and 212 of the FPA. This 
Proposed Rule also proposes a five-year safe harbor period during which 
an ICIF owner subject to the blanket waiver discussed herein, who 
initially has excess capacity on its ICIF because it intends to serve 
its own or its affiliates' future phased generator additions or 
expansions, may establish a rebuttable presumption for priority right 
over third parties to use that excess capacity.
    3. Based on input received following a technical conference and a 
Notice of Inquiry (NOI) related to the treatment of ICIF, the 
Commission preliminarily concludes that its policies that require the 
ICIF owner to make excess capacity available to third parties unless it 
can justify its planned use of the line impose risks and burdens on 
ICIF owners and create regulatory inefficiencies that are not necessary 
given the goals that the Commission seeks to achieve through such 
policies. Specifically, the Commission's current policy has led ICIF 
owners to file petitions for declaratory orders demonstrating plans and 
milestones for future generation development to reserve for itself 
currently excess ICIF capacity that it built with the intention of 
using it for such purposes. In the vast majority of cases, the 
Commission has granted the petition, based on confidential 
documentation filed by the ICIF owner, with a limited description of 
the plans and milestones the Commission deemed dispositive. Further, 
the Commission's policy of treating ICIF the same as other transmission 
facilities for OATT purposes, including the requirement to file an OATT 
following a third-party request, creates undue burden for ICIF owners 
without a corresponding enhancement of access given the ICIF owner's 
typical ability to establish priority rights. We propose the 
aforementioned reforms to re-balance the burden on ICIF owners, while 
maintaining access to available capacity for third parties where 
appropriate.

II. Background

A. Development of ICIF Policies

    4. Under section 201(b) of the FPA, the Commission has jurisdiction 
over all facilities used for the transmission of electric energy in 
interstate commerce.\5\ Under section 201(e) of the FPA, any person who 
owns or operates facilities subject to the jurisdiction of the 
Commission is a public utility.\6\ The Commission is charged with the 
responsibility under sections 205 and 206 of the FPA to ensure that a 
public utility's rates, charges, and classifications are just and 
reasonable and not unduly discriminatory or preferential.\7\
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    \5\ 16 U.S.C. 824(b).
    \6\ Section 201(f) of the FPA exempts certain governmental 
entities and electric cooperatives from being a public utility.
    \7\ 16 U.S.C. 824d and 824e.
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    5. In Order No. 888, the Commission, relying upon its authority 
under sections 205 and 206 of the FPA, established nondiscriminatory 
open access to electric transmission service as the foundation 
necessary to develop competitive bulk power markets in the United 
States.\8\ Order No. 888 requires that all public utilities that own, 
control, or operate transmission facilities must offer transmission 
service to all eligible customers under standard terms and conditions.
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    \8\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ] 
31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12274 (Mar. 
14, 1997), FERC Stats. & Regs. ] 31,048, order on reh'g, Order No. 
888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C, 82 
FERC ] 61,046 (1998), aff'd in relevant part sub nom. Transmission 
Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), 
aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
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    6. Order No. 888, codified in section 35.28 of the Commission's 
regulations, requires that any public utility that owns, controls, or 
operates facilities used for the transmission of electric energy in 
interstate commerce must file an OATT and comply with other related 
requirements. The Commission in Order No. 888 did not specifically 
address transmission facilities associated with the interconnection of 
electric generating units to the transmission grid.
    7. In Order No. 2003, the Commission found that interconnection 
service plays a crucial role in bringing much-needed generation into 
the market to meet the growing needs of electricity customers and 
competitive electricity markets.\9\ The Commission reiterated that 
``[i]nterconnection is a critical component of open access transmission 
service,'' and that ``the Commission may order generic interconnection 
terms and procedures pursuant to its authority to remedy undue 
discrimination and preferences under Sections 205 and 206 of the 
Federal Power Act.'' \10\ The Commission concluded that there was a 
pressing need for a uniformly applicable set of procedures and a pro 
forma agreement to form the basis of interconnection service for large 
generators, and thus promulgated the LGIP and the LGIA to be included 
in every public utility's OATT.\11\
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    \9\ Order No. 2003, FERC Stats. & Regs. ] 31,146 at P 11.
    \10\ Id. PP 12, 20.
    \11\ Order No. 2003 established rules for a Large Generating 
Facility, defined as a generating facility with a capacity of more 
than 20 MW. In Order No. 2006, the Commission established procedures 
and a pro forma Small Generator Interconnection Agreement for the 
interconnection of generation resources no larger than 20 MW. 
Standardization of Small Generator Interconnection Agreements and 
Procedures, Order No. 2006, 70 FR 34100 (Jun. 13, 2005), FERC Stats. 
& Regs. ] 31,180, order on reh'g, Order No. 2006-A, 70 FR 71760 
(Nov. 30, 2005), FERC Stats. & Regs. ] 31,196 (2005), order on 
clarification, Order No. 2006-B, 71 FR 42587 (Jul. 27, 2006), FERC 
Stats. & Regs. ] 31,221 (2006).
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    8. The LGIA defines an Interconnection Customer as ``any entity, 
including the Transmission Provider, Transmission Owner or any of

[[Page 31063]]

the Affiliates or subsidiaries of either, that proposes to interconnect 
its Generating Facility with the Transmission Provider's Transmission 
System.'' Article 11.1 of the LGIA provides that the ``Interconnection 
Customer shall design, procure, construct, install, own and/or control 
Interconnection Customer Interconnection Facilities . . . at its sole 
expense.'' The LGIA defines ``Interconnection Facilities'' \12\ as the:
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    \12\ Unless otherwise indicated, capitalized terms herein have 
the same definition as in the Commission's LGIA or in the OATT, as 
applicable.

    Transmission Provider's Interconnection Facilities and the 
Interconnection Customer's Interconnection Facilities. Collectively, 
Interconnection Facilities include all facilities and equipment 
between the Generating Facility and the Point of Interconnection, 
including any modification, additions or upgrades that are necessary 
to physically and electrically interconnect the Generating Facility 
to the Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities and shall not include 
Distribution Upgrades, Stand Alone Network Upgrades or Network 
Upgrades.\13\
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    \13\ LGIA Article 1.

    9. In general, Interconnection Facilities are constructed to enable 
a generation facility or multiple generation facilities to transmit 
power to the integrated transmission grid. Interconnection Facilities 
are typically radial in nature, with a single point of interconnection 
with the network grid, and over which power flows in one direction 
toward the transmission grid.\14\ Depending on the circumstances, 
Interconnection Facilities can be relatively short,\15\ or can span 
considerable distances and represent significant transmission 
capacity.\16\
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    \14\ In limited circumstances, power may flow from the grid to 
supply station power in the event no power is being produced at the 
generating facility.
    \15\ See, e.g., Southern Company Serv., Inc., Docket No. ER12-
554-000 (Jan. 6, 2012) (delegated letter order) (involving an 
approximately 2000 foot interconnection facility).
    \16\ See, e.g., Bayonne Energy Center, 136 FERC ] 61,019 (2011) 
(involving a 345-kV interconnection facility); Terra-Gen Dixie 
Valley, LLC, 132 FERC ] 61,215 (2010) (Terra-Gen I) (involving a 
212-mile interconnection facility).
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    10. Pursuant to the definitions in the LGIA and LGIP, those 
Interconnection Facilities that are located between the Point of 
Interconnection \17\ with the grid and the Point of Change of 
Ownership,\18\ and which are owned, controlled, or operated by the 
Transmission Provider, are the Transmission Provider's Interconnection 
Facilities. Article 11.2 of the LGIA specifies that the ``Transmission 
Provider or Transmission Owner shall design, procure, construct, 
install, own and/or control the Transmission Provider's Interconnection 
Facilities . . . at the sole expense of the Interconnection Customer.'' 
Third-party use of the Transmission Provider's Interconnection 
Facilities is governed by Article 9.9.2 of the LGIA.\19\ This provision 
permits the parties to negotiate for a third party to use the 
Transmission Provider's Interconnection Facilities and entitles the 
Interconnection Customer to compensation, based on pro rata usage, for 
capital costs it incurred to construct those facilities and for the 
associated ongoing costs, including operation and maintenance costs. 
Neither the LGIP nor the LGIA contains provisions for third-party 
requests for use of ICIF.
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    \17\ The Point of Interconnection is defined in Article 1 of the 
LGIA as the point where the Interconnection Facilities connect to 
the Transmission Provider's Transmission System.
    \18\ The Point of Change of Ownership is defined in Article 1 of 
the LGIA as the point, as set forth in Appendix A to the LGIA, where 
the Interconnection Customer's Interconnection Facilities connect to 
the Transmission Provider's Interconnection Facilities. LGIP section 
11.2 states that the Transmission Provider and Interconnection 
Customer shall negotiate the provisions of the appendices to the 
LGIA.
    \19\ Article 9.9.2 provides that:
    [I]f the Parties mutually agree, such agreement not to be 
unreasonably withheld, to allow one or more third parties to use 
Transmission Provider's Interconnection Facilities, or any part 
thereof, Interconnection Customer will be entitled to compensation 
for the capital expenses it incurred in connection with the 
Interconnection Facilities based upon the pro rata use of the 
Interconnection Facilities by the Transmission Provider, all third-
party users and the Interconnection Customer.
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    11. In a series of cases since Order No. 2003 became effective, 
issues have been raised regarding the extent to which, if at all, third 
parties should be able to have open access for transmission on the 
facilities located between the Generating Facility and the point at 
which the Transmission Provider's Interconnection Facilities begin, 
i.e., ICIF. In these cases, the Commission has required the ICIF owner 
to provide open access transmission service over its facilities. In 
Aero Energy, LLC,\20\ in response to an application under sections 210 
and 211 of the FPA, the Commission ordered the Sagebrush Partnership 
(Sagebrush) to interconnect with and provide transmission service to a 
third party (Aero Energy, LLC) over Sagebrush's 46-mile, 230-kV ICIF 
that connects its partners' generation resources to the grid. The 
Commission ordered the parties to file an executed interconnection 
agreement and transmission service agreement setting forth the terms 
and conditions of service.\21\
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    \20\ 115 FERC ] 61,128 (2006) (Aero Proposed Order), order 
granting modification, 116 FERC ] 61,149 (2006) (Aero Modification 
Order), final order directing interconnection and transmission 
service, 118 FERC ] 61,204 (2007), order denying reh'g, 120 FERC ] 
61,188 (2007) (Aero Rehearing Order) (collectively, Aero).
    \21\ Subsequently, the Commission granted market-based rates to 
several Sagebrush affiliates on the condition that Sagebrush file an 
OATT for its line if any third party filed a request for service on 
the line. EDFD Handsome-Lake, 127 FERC ] 61,243, at P 15 (2009). 
Such a request was made, and Sagebrush filed an OATT for its 
interconnection facility. Sagebrush, a California Partnership, 130 
FERC ] 61,093, order on reh'g, 132 FERC ] 61,234 (2010). Similarly, 
in Peetz Logan, the generation owner filed an OATT in response to a 
request for third-party interconnection and transmission services 
over its existing 78.2-mile, 230-kV ICIF that had been used to 
connect three affiliated wind generation projects to the grid. Peetz 
Logan Interconnect, LLC, 136 FERC ] 61,075 (2011) (Peetz Logan). 
Also, in Terra-Gen, the generator owner of a 214-mile, 230-kV radial 
interconnection facility was ordered by the Commission to file an 
OATT in response to a request for third-party transmission service. 
Terra-Gen Dixie Valley, LLC, 134 FERC ] 61,027, order on reh'g 135 
FERC ] 61,134 (2011) (Terra Gen II).
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    12. In Milford Wind Corridor, LLC, the Commission noted that the 
fact that facilities only interconnect a generator to the grid does not 
eliminate the requirement to file an OATT and to provide open access 
transmission service.\22\ However, the Commission recognized that, in 
such cases, it has granted waivers of the OATT requirements on a case-
by-case basis for ICIF owners who demonstrate that their ICIF are 
limited and discrete and there is no outstanding request by a third 
party to access the ICIF. The Commission granted these waivers to 
Milford Wind Corridor, LLC with respect to its 88-mile 345-kV 
``generator lead line.'' \23\
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    \22\ 129 FERC ] 61,149, at P 24 (2009) (Milford).
    \23\ Id. PP 1, 27.
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    13. In Sky River, LLC, the Commission rejected the filing of an 
executed Common Facilities Agreement providing a third party the right 
to access and utilize Sky River, LLC's interest in a nine-mile 230-kV 
``generator tie-line.'' Instead, the Commission required that any 
service by non-owners over the line must be made pursuant to an 
OATT.\24\ The Commission viewed the Common Facilities Agreement as an 
attempt to govern transmission service for an unaffiliated third party 
outside the context of an OATT.
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    \24\ 134 FERC ] 61,064 (2011) (Sky River).
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    14. At issue in these cases was whether the entity that owns and/or 
controls ICIF to serve its or its affiliates' generation project or 
projects has any priority right over third-party requesters to use the 
capacity on its ICIF. Where an owner of ICIF has specific, pre-existing 
generator expansion plans with milestones for construction of

[[Page 31064]]

generation facilities and can demonstrate that it has made material 
progress toward meeting those milestones, the Commission may grant 
priority rights for excess capacity on the ICIF for those future 
generation projects.\25\ In Aero, before ordering service over the 
Sagebrush line, the Commission provided the opportunity for the ICIF 
owner to demonstrate that it had pre-existing contractual obligations 
or other specific plans that would prevent it from providing the 
requested firm transmission service to the third party.\26\ As a 
result, the Commission found that one of the Sagebrush partners had 
shown that it had pre-existing expansion plans that, at some future 
date, would require firm transmission capacity, and that two other 
Sagebrush partners had not shown that they had pre-existing expansion 
plans that will require additional transmission capacity.\27\ 
Subsequently, the Commission has considered, on a case-by-case basis, 
petitions for declaratory order requesting that an ICIF owner be 
granted priority over third-parties to use capacity on its ICIF.\28\ In 
Milford, the Commission granted such priority, finding that Milford had 
shown that it had specific plans for phased development of its 
generation. The Commission in Milford summarized the Aero precedent as 
providing that:
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    \25\ Alta Wind, 134 FERC ] 61,109, at PP 16-17 (2011); Milford, 
129 FERC ] 61,149 at P 22; Aero Modification Order, 116 FERC ] 
61,149 at P 28. Such plans and initial progress also must pre-date a 
valid request for service. Terra-Gen I, 132 FERC ] 61,215 at P 53.
    \26\ Aero Modification Order, 116 FERC ] 61,149 at P 28.
    \27\ Specifically, one partner relied on a power purchase 
agreement for 10 MW more than the nameplate capacity of its existing 
project, but the Commission did not grant priority rights, ruling 
that a power purchase agreement was not evidence of an expansion 
obligation and that the partner had not presented evidence of 
milestones having been met. Another partner argued that it had 
expansion plans for one of its projects and had been working to 
transfer transmission capacity from one of its affiliated projects 
to another to accommodate its currently unused wind turbines; 
however, the Commission ruled that because this was a transfer of 
transmission capacity between partners, the required transmission 
capacity was accounted for and included in the original allocation 
of transmission capacity amongst the Sagebrush partners, and that 
this possible expansion would not need additional transmission.
    \28\ See Milford, 129 FERC ] 61,149 at P 24; Terra-Gen I, 132 
FERC ] 61,215 at P 49.

    A transmission owner that filed specific expansion plans with 
definite dates and milestones for construction, and had made 
material progress toward meeting its milestones, had priority over 
later transmission requests.\29\
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    \29\ Milford, 129 FERC ] 61,149 at P 22.

    This required demonstration necessary to claim priority rights has 
sometimes been referred to as the ``specific plans and milestones'' 
showing. In the past, some combination of the following types of 
criteria has proven acceptable to demonstrate that an ICIF owner has 
specific expansion plans with definite dates and milestones for 
construction, and has made material progress toward meeting its 
milestones: requesting interconnection and progressing with studies to 
interconnect to the integrated transmission grid, demonstrating site 
control, signing a power purchase agreement, pursuing financing 
options, and researching and/or purchasing equipment.\30\
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    \30\ The Aero precedent cited above is the only instance where 
the Commission has not granted priority rights upon an attempted 
plans and milestones demonstration.
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    15. The Commission has also found that an affiliate of the ICIF 
owner that is developing its own generator projects also may obtain 
priority rights to the capacity on the ICIF by meeting the ``specific 
plans and milestones'' standard with respect to future use.\31\ This 
granting of priority rights preserves the ability of the generation 
developer to deliver its future output to the point of interconnection 
with the integrated transmission grid, so long as it can make the 
relevant showing to the Commission sufficient to justify priority.
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    \31\ See NextEra Energy Resources, LLC, 142 FERC ] 61,043, at P 
26 (2013).
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B. Notice of Inquiry

    16. On April 19, 2012, the Commission issued a NOI seeking comment 
on whether and, if so, how it should revise its current policy 
concerning open access and priority rights for capacity on ICIF.\32\ 
Specifically, the Commission sought comments on two alternative 
approaches to govern third-party requests for service and priority 
rights: (1) Continued use of an OATT framework with potential 
modification and clarification, including the creation of a pro forma 
tailored OATT and a case-by-case determination on the generation 
developer's priority rights; and (2) use of an LGIA/LGIP framework in 
which the existing LGIA provisions that govern third-party use of a 
Transmission Provider's Interconnection Facilities would be extended to 
ICIF (i.e., allowing parties to mutually agree to the use of and 
compensation for the facilities, with disagreements coming to the 
Commission for resolution).
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    \32\ Open Access and Priority Rights on Interconnection 
Facilities, 139 FERC ] 61,051 (2012). The Commission also held a 
technical conference in March 2011 to explore, among other things, 
the application of the Commission's open access policies to 
``generator lead lines'' in the instance when affiliated or 
unaffiliated third-party generators seek to use these facilities. 
Priority Rights to New Participant-Funded Transmission, March 15, 
2011 Technical Conference, AD11-11-000.
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    17. These two options were intended to capture the policy debate of 
whether, given the changes in industry (e.g., the development of 
variable energy resources), and concerns over land-use, the Commission 
should require ICIF owners to provide comparable service under known 
rates, terms, and condition (i.e., an OATT) in response to a request of 
a third party, or whether such third-party access should be obtained by 
negotiation with the owner of the ICIF subject to the processes and 
requirements of Order No. 2003, including Commission resolution of 
disputes.

C. Comments on the Notice of Inquiry

    18. Twenty-five entities submitted comments in response to the 
NOI.\33\ Most commenters raised concerns regarding the Commission's 
current policy and agreed that the Commission should change it. For 
example, commenters expressed concerns that: (1) The Commission's 
current policy creates regulatory disincentives for the development of 
more efficient, high voltage ICIF to access new generation by 
dramatically expanding the potential costs and responsibilities of 
generation owners and increasing uncertainty regarding planned future 
generation phases; \34\ (2) subjecting ICIF to open access requirements 
places overly burdensome transmission owner-type requirements on 
generators who are not in the business of providing transmission 
service to third parties; \35\ (3) the Commission's pro forma OATT is 
not well-suited to addressing a third-party request for access to ICIF 
because ICIF do not serve the same purpose, and cannot provide many of 
the same services, as network transmission facilities; \36\ (4) 
treating these facilities under the OATT framework blurs the historical 
distinction between integrated networked transmission facilities and 
radial ICIF; \37\ and (5) having third-party access governed under 
separate OATTs would complicate the third party's development because 
prospective interconnecting generators would need to make separate 
requests to seek

[[Page 31065]]

interconnection and transmission service from the ICIF owner and then 
further transmission service from the Transmission Provider to transmit 
energy on the transmission system.\38\
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    \33\ Appendix A provides a list of commenters and name 
abbreviations used herein.
    \34\ BP Wind at 6; E.ON at 20; EEI at 2, 8-9; EPSA at 3, 16; 
LADWP at 3; NextEra at 10; NRG at 1-3; Tenaska at 4-7.
    \35\ BP Wind at 14; Duke at 3-5; EPSA at 7; First Wind at 2; 
Invenergy at 20-21; NextEra at 10; NJBPU at 4-5, 8; NRG at 1-3.
    \36\ APPA at 7; AWEA at 5; Duke at 5, 13; EEI at 7-8; Invenergy 
at 7-8; NextEra at 9-10; Puget at 6; SEIA at 2; TGP at 28.
    \37\ LADWP at 3, 10.
    \38\ AWEA at 25; MISO at 5-6; Puget at 2-3.
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    19. Commenters differed, however, in their recommendations for 
specific changes to Commission policy. Some commenters supported the 
option of creating a pro forma tailored OATT suited to the use of ICIF 
for the provision of open access transmission service, noting that it: 
(1) Would reduce the bureaucratic and financial burdens associated with 
filing a pro forma OATT, while preserving the spirit of the 
Commission's open access requirements; \39\ and (2) would ensure that 
third-party requests for service on ICIF provide for adequate 
transmission planning and study and appropriate contractual 
relationships between Transmission Providers and interconnection 
customers.\40\
---------------------------------------------------------------------------

    \39\ APPA at 2-4; TAPS at 2.
    \40\ ITC at 7-9.
---------------------------------------------------------------------------

    20. Other commenters argued against requiring any OATT for ICIF. 
They argued, among other things, that: (1) Mandating generator owners 
to assume the role of Transmission Providers when faced with third-
party interconnection requests creates regulatory disincentives for the 
development of more efficient, high voltage lead lines to access new 
generation; \41\ and (2) the current policy of requiring an OATT is not 
legally necessary \42\ or it is beyond the Commission's statutory 
authority to impose a blanket OATT approach on independent generators 
that do not voluntarily submit to the Commission's transmission service 
jurisdiction under section 205.\43\
---------------------------------------------------------------------------

    \41\ LADWP at 3.
    \42\ EPSA at 2-4; First Wind at 2, 11; NRG at 5-6; Tenaska at 2-
3.
    \43\ TGP at 1-2.
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    21. Other commenters supported an LGIA/LGIP approach for ICIF 
access, in which the existing LGIA provisions that govern third-party 
use of a Transmission Provider's Interconnection Facilities would be 
extended to ICIF. They argued that: (1) A third party's access to the 
grid cannot be evaluated solely by evaluating its use of the ICIF but 
must also evaluate the third party's ability to interconnect with the 
networked transmission system; (2) the networked Transmission Provider 
has a more holistic view of the transmission system; (3) the 
Transmission Provider has the necessary information and tools to 
evaluate ICIF uses that are tied to the networked Transmission 
Provider's administration of its interconnection queue and its 
preparation of required system studies; \44\ (4) applying an LGIA/LGIP 
framework to ICIF is administratively easy to implement and removes the 
current uncertainty surrounding the Commission's OATT waiver process; 
\45\ (5) using the LGIA/LGIP approach will avoid placing the overly 
burdensome requirements of an OATT or tailored OATT framework on ICIF 
owners; \46\ (6) this approach will not require the substantial 
staffing and monetary resources that would be necessary to establish an 
OATT, and ensures that balancing authority and Transmission Provider 
functions remain with the most appropriate entity; \47\ and (7) the 
LGIA/LGIP framework provides a more efficient method because it will 
integrate any expanded use of the ICIF with the existing Transmission 
Provider's planning process.\48\
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    \44\ First Wind at 6-7.
    \45\ BPA at 4; NRG at 14-17; Puget at 14-15.
    \46\ EPSA at 9.
    \47\ Puget at 14-15; E.ON at 2-3.
    \48\ BPA at 1-5; MISO at 6.
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    22. Other commenters, however, opposed the use of an LGIA/LGIP 
framework for ICIF, arguing that: (1) It would place the network 
Transmission Provider in control of determining access to the generator 
lead line, when that utility may be a competitor, and leave to the ICIF 
owner only a determination of the rates it could charge; \49\ (2) the 
network Transmission Provider is in no position to grant or facilitate 
access to or over facilities that it does not control or operate; \50\ 
(3) the Commission would have to address cost recovery (for the 
increased burden of managing interconnection requests), cost allocation 
(between the ICIF owner and third party), and the Transmission 
Provider's level of operational control and the scope of 
responsibilities; \51\ and (4) the LGIA/LGIP approach would 
inappropriately favor the ICIF owner's generation vis-[agrave]-vis a 
third-party generator because it would expand the ICIF owner's priority 
rights to the full amount of the original interconnection request.\52\
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    \49\ Invenergy 9-12; TGP at 5.
    \50\ ITC at 6-7.
    \51\ CAISO at 2-3.
    \52\ TAPS at 11.
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III. The Need for Reform

    23. The Commission preliminarily finds that the Commission's 
current OATT requirements as applied to ICIF may impose risks and 
burdens on generators and create regulatory inefficiencies that are not 
necessary to achieve the Commission's open access goals. As such, the 
Commission preliminarily finds that the Commission requirements for 
achieving nondiscriminatory access over ICIF should be reformed to not 
discourage competitive generation development with unnecessary burdens, 
while ensuring nondiscriminatory access by eligible transmission 
customers. Through this Proposed Rule, the Commission seeks to reduce 
regulatory burdens and promote development of generation facilities 
while continuing to ensure open access to transmission facilities.
    24. Through the technical conference and NOI comments, as well as 
other outreach efforts, the Commission has identified concerns with 
respect to the Commission's current policy of applying OATT 
requirements to ICIF. The Commission recognizes that filing and 
maintaining an OATT can be seen as burdensome by ICIF owners who do not 
see themselves, and do not want to be, in the business of providing 
transmission service. Adding an OATT obligation to a generation project 
can introduce an additional element of risk for the developer and its 
lenders that they would not have if the project were not subject to the 
potential obligation to file and maintain a transmission tariff.
    25. The Commission also recognizes that the pro forma OATT is not a 
very good fit for the limited services that could be provided over 
ICIF. A number of sections of the pro forma OATT, such as the 
provisions regarding network service, ancillary services, and planning 
requirements, are arguably inapplicable to most or all ICIF owners. 
Although ICIF owners may propose deviations from the pro forma OATT, 
the Commission's existing process of handling these proposed deviations 
on a case-by-case basis could result in a time-consuming proceeding 
with an uncertain outcome.
    26. An ICIF owner that has obtained a waiver of the OATT is still 
required to file an OATT within 60 days of a request for service by a 
third party and must begin interconnection studies. That obligation can 
be triggered with a minimal effort by a requester, which may not 
sufficiently distinguish customers who have a specific and 
substantiated request for service from those whose request is not as 
well supported. The Commission is aware of situations where the ICIF 
owner received a request for service triggering the requirement that 
the owner file an OATT, but the requester then failed to pursue any 
further development. This is an additional risk for the ICIF owner.
    27. Interconnecting with ICIF often involves unique circumstances 
that would benefit from negotiation of individual access agreements. 
However,

[[Page 31066]]

the current policy limits an ICIF owner's contractual flexibility if it 
chooses to provide third-party access by mutual agreement. 
Specifically, the Commission's current policy requires non-affiliated 
parties to enter into a transmission service agreement, rather than a 
common facilities agreement, which can limit the form of rates, terms, 
and conditions in important ways. For instance, the third party would 
pay average losses rather than incremental losses. In addition, an ICIF 
owner is required to openly offer third-party service if it grants 
third-party use by mutual agreement. This inflexibility may limit the 
willingness of an ICIF owner to enter into third-party use agreements.
    28. With respect to market-based rate filings (initial filings, 
triennial updates, and change of status filings), there is often a lack 
of clarity under existing policies as to whether applicants that own 
ICIF or have affiliates that own ICIF must file an OATT or seek a 
waiver from OATT requirements in order to show a lack of vertical 
market power before the market-based rate order can be processed.\53\
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    \53\ To demonstrate the absence of vertical market power in a 
market power analysis, a seller or its affiliate that owns, 
operates, or controls transmission facilities must have an OATT on 
file unless waived. See 18 CFR 35.37(d) (2013).
---------------------------------------------------------------------------

    29. In addition, the Commission has identified concerns with the 
pro forma OATT's requirement, in the absence of native load, to award 
priority to use available capacity on transmission facilities based on 
the timing (i.e., first-come-first-served) of the transmission request. 
It is common for an ICIF owner to initially have excess capacity on its 
ICIF because it plans to bring generation into commercial service in 
stages or because transmission losses increase dramatically when a 
transmission line becomes fully loaded. Under the Commission's current 
policy, such ICIF owners face the risk of losing that capacity to a 
competing developer who makes a request for service before the ICIF 
owner is ready to use that capacity for its own future phases.
    30. The Commission has developed a process for granting priority 
rights to the ICIF owner for such excess capacity on a case-by-case 
basis when the ICIF owner files a petition for declaratory order to 
establish such priority rights. However, filing a petition for 
declaratory order to establish priority rights can be a significant 
burden for the ICIF owner. The Commission's current policy of requiring 
a demonstration of ``specific plans and milestones'' to establish 
priority rights can require substantial effort and resources on the 
part of the ICIF owner to make the necessary showings. In addition, the 
criteria the Commission uses to establish priority rights may appear as 
vague to the public due to the reliance on documentation filed as 
confidential.
    31. Even with priority established through a request for 
declaratory order, under current policy, the ICIF owner must still file 
an OATT if a transmission request is filed. In other words, the 
priority rights do not diminish the risk that the ICIF owner may have 
to file an OATT within 60 days of a request for service.
    32. The burdens and risks described above fall on all ICIF owners, 
despite the fact that it is unlikely that any third party would request 
OATT service on most ICIF. The Commission has issued numerous 
individual orders granting waivers of OATT, OASIS, and Standards of 
Conduct to ICIF owners, but in only four instances did a third party 
request access on ICIF necessitating the filing of an OATT.\54\ 
Although only a small percentage of ICIF owners have actually had to 
file an OATT, all ICIF owners are subject to the additional risks and 
regulatory burdens discussed above, including possibly having to file 
an OATT on 60 days' notice in response to a request for service, and 
possibly losing some of the ICIF capacity planned for future use to a 
requesting third party. The Commission preliminarily finds that 
reforming its open access transmission requirements in this narrow set 
of circumstances is appropriate due to the infrequency of third-party 
requests to use ICIF. The Commission seeks comments on whether and how 
the burden for eligible ICIF owners of potential OATT compliance bears 
on the need to reform existing Commission policies with respect to ICIF 
access.
---------------------------------------------------------------------------

    \54\ Between January 1, 2009, and January 1, 2014, the 
Commission issued approximately 80 orders granting waiver of OATT, 
OASIS, and Standards of Conduct requirements to ICIF owners.
---------------------------------------------------------------------------

IV. Proposed Reform

A. Proposed New Processes for ICIF Access

    33. The Commission proposes the following approach for non-
discriminatory open access to ICIF to replace the current case-by-case 
approach for granting waivers of the OATT and priority rights 
declarations. The Commission believes this approach will reduce 
regulatory burdens and promote development of generation facilities 
while continuing to ensure open access to transmission facilities. The 
elements of this proposal are as described below.
1. Grant Blanket Waivers to Eligible ICIF Owners
    34. The Commission's current policy is that, because ICIF are 
facilities used for the transmission of electric energy in interstate 
commerce, those who own, control, or operate ICIF must either have an 
OATT on file or receive a waiver of the OATT requirement.\55\ Section 
35.28(d) provides that any public utility subject to OATT, OASIS, and 
Standards of Conduct requirements may file a request for a waiver for 
good cause shown.\56\ The Commission has granted such requests for 
waiver where the public utility owns only limited and discrete 
facilities or is a small utility.\57\ Even if a waiver of the OATT is 
granted for ICIF, it is subject to the requirement that, if a request 
for transmission service over the facilities is made, the ICIF owner 
would have to file an OATT within 60 days of the request \58\ and 
comply with any additional requirements then in effect for compliance 
with Order Nos. 888 and 890.\59\ The ICIF owner would thus become 
subject to all of the relevant pro forma OATT requirements, unless it 
successfully seeks and receives approval for deviations from the pro 
forma OATT.
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    \55\ See Milford, 129 FERC ] 61,149 at P 24 (noting that the 
fact that the facilities merely tie a generator to the grid does not 
render a line exempt from the Commission's regulation of 
transmission facilities). See also Evergreen Wind Power III, LLC, 
135 FERC ] 61,030, at P 15 n.18 (2011) (granting request for waiver 
of the OATT requirement in the context of a request for market-based 
rate authority).
    \56\ The Commission has the general statutory authority to waive 
its regulations as it may find necessary or appropriate. UtiliCorp 
United, Inc. 99 FERC ] 61,280, at P 12 (2002); see also Pacific Gas 
and Electric Co., 99 FERC ] 61,045, at P 5 (2002) (``It is however 
well established that, with or without an explicit provision to that 
effect, an agency may waive its regulations in appropriate 
cases.'').
    \57\ See, e.g., Prairie Breeze Wind Energy LLC, 145 FERC ] 
61,290, at P 26 (2013); Ebensburg Power Company, 145 FERC ] 61,265, 
at P 27 (2013); CSOLAR IV South, LLC, 143 FERC ] 61,275, at P 16 
(2013).
    \58\ Milford, 129 FERC ] 61,149 at P 27. See Termoelectrica 
U.S., LLC, 105 FERC ] 61,087, at P 11 (2003); Black Creek Hydro, 
Inc., 77 FERC ] 61,232, at 61,941 (1996).
    \59\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12266 (Mar. 15, 2007), 
FERC Stats. & Regs. ] 31,241, order on reh'g, Order No. 890-A, 73 FR 
2984 (Jan. 16, 2008), FERC Stats. & Regs. ] 31,261 (2007), order on 
reh'g and clarification, Order No. 890-B, 73 FR 39092 (July 8, 
2008), 123 FERC ] 61,299 (2008), order on reh'g, Order No. 890-C, 74 
FR 12540 (Mar. 25, 2009), 126 FERC ] 61,228 (2009), order on 
clarification, Order No. 890-D, 74 FR 61511 (Nov. 25, 2009), 129 
FERC ] 61,126 (2009).
---------------------------------------------------------------------------

    35. The Commission proposes to add sub-paragraph (d)(2) to 18 CFR 
35.28 to grant a blanket ICIF waiver of all OATT, OASIS, and Standards 
of Conduct

[[Page 31067]]

requirements to any public utility that is subject to such requirements 
solely because it owns, controls, or operates ICIF, in whole or in 
part, and sells electric energy from its Generating Facility, as those 
terms are defined in the LGIP and LGIA.\60\ The waiver would apply to 
all eligible existing and future ICIF owners. The Commission's proposal 
to limit the waiver to ICIF owners who sell electric energy is intended 
to ensure that any public utility with an OATT blanket waiver would be 
subject to both an interconnection order under FPA section 210 and a 
transmission order under FPA section 211, as discussed further below.
---------------------------------------------------------------------------

    \60\ The Commission also proposes to make non-substantive 
revisions to what is currently 18 CFR 35.28(d) in order to update 
certain cross-references in that paragraph.
---------------------------------------------------------------------------

    36. The Commission preliminarily finds that a blanket ICIF waiver 
in these circumstances is justified because the usually limited and 
discrete nature of ICIF and ICIF's dedicated interconnection purpose 
mean that such facilities do not typically present all of the concerns 
about discriminatory conduct that the Commission's OATT, OASIS and 
Standards of Conduct requirements were intended to address. Because 
third-party requests to use ICIF have been relatively rare, it is more 
efficient to address such situations as they arise on an individual 
basis.
    37. Further, the ICIF waiver would remove regulatory burdens on 
competitive generation resources without sacrificing the Commission's 
ability to require open access in appropriate circumstances. 
Specifically, we take this step to address concerns that our current 
policy creates an undue burden on ICIF owners to file an OATT upon 
energizing the ICIF or seek a waiver that would be revoked upon a 
third-party request for service. As discussed above, ICIF owners are 
focused on developing new generation resources. The time, effort and 
cost of complying with the requirements of a public utility 
transmission provider unduly hinder generation development efforts to 
the detriment of competition. In addition, we agree with commenters to 
the NOI and the technical conference that the current policy creates 
too low a bar for third-party requests for service. Specifically, an 
existing waiver of the OATT is revoked as soon as the ICIF owner 
receives a third-party request for service, even if that request meets 
few of the information and other requirements for transmission service 
under the pro forma OATT. Finally, we believe that providing an up-
front waiver of the OATT for ICIF will clarify the manner by which 
owners of these facilities can address concerns about vertical market 
power when they seek market-based rate authority.
    38. Unlike the current waivers for ``limited and discrete'' 
facilities, this blanket waiver of the OATT would not be automatically 
revoked if transmission service is requested by a third party, but 
could be revoked in a Commission order if the Commission determines 
that it is in the public interest to do so. The waiver would also be 
deemed to be revoked as of the date the public utility ceases to 
satisfy the qualifications for such waiver, e.g., it owns, controls, or 
operates transmission facilities that are not ICIF, or the corporate 
structure changes such that the ICIF owner is no longer the entity that 
sells electric energy from its Generating Facility. Thus, if material 
circumstances change so that the ICIF owner no longer satisfies the 
waiver qualifications, it may no longer rely on this waiver. For 
example, providing transmission service not related to interconnecting 
a generator to the grid, or the acquisition of transmission facilities 
that are not ICIF, would be indicators that there has been a change in 
circumstances that would make reliance on an ICIF waiver of the OATT 
inappropriate.\61\ Determining whether the function of an ICIF has 
evolved, and thus whether an ICIF owner may continue to rely on its 
ICIF waiver, may require case-by-case assessment. We seek comment on 
the circumstances under which and the mechanism by which the Commission 
should revoke the proposed waiver.
---------------------------------------------------------------------------

    \61\ Cf. Golden Spread Electric Cooperative, Inc., 139 FERC ] 
61,067, at PP 3-5 (2012) (explaining that the Commission several 
times granted continued waiver of Order Nos. 888 and 889 to Golden 
Spread Electric Cooperative, Inc. in response to system changes). 
Specifically, in 2004, Golden Spread acquired approximately 110 
miles of radial transmission facilities; in 2008, Golden Spread 
acquired approximately 54.5 miles of radial transmission facilities 
and constructed an approximately 18.4 mile radial line; and in 2011, 
Golden Spread acquired Golden Panhandle Wind Ranch, LLC. Each time, 
the Commission granted Golden Spread's waiver requests based on the 
representation that the transmission facilities were limited and 
discrete and did not constitute an integrated transmission system. 
In doing so, the Commission noted its reliance on Golden Spread's 
representation that the transmission lines were only used to provide 
bundled wholesale service to the affected Golden Spread members and 
that the power flowed in only one direction. Id. P 6.
---------------------------------------------------------------------------

    39. If the OATT waiver is revoked because of such a change in 
circumstances, the waivers of OASIS and Standards of Conduct will also 
be revoked, without prejudice to the ICIF owner filing a request to 
continue its waivers of OASIS and Standards of Conduct pursuant to the 
waiver criteria then in place.\62\ In the instance where the Commission 
revokes the ICIF waiver by order, it may determine whether the OASIS 
and Standards of Conduct waivers should be continued based on the 
criteria then in place.
---------------------------------------------------------------------------

    \62\ Waivers of the standards of conduct may be granted for good 
cause pursuant to 18 CFR 358.1(d).
---------------------------------------------------------------------------

    40. The grant of a blanket ICIF waiver under the Proposed Rule 
would have no automatic impact on an OATT already on file or on service 
already being taken under it, but the Commission might on a case-by-
case basis consider requests to withdraw an OATT on file for ICIF if no 
third party is taking service under it. With regard to entities that 
already have received a waiver of the OATT, the blanket ICIF waiver 
would supersede an existing waiver.
2. Provide Open Access and Establish Priority Rights to ICIF Through 
Sections 210 and 211
    41. Under this Proposed Rule and subject to the safe harbor 
presumption proposed below, if a third party seeks to use the ICIF that 
are subject to the blanket ICIF waiver, an eligible entity seeking 
interconnection and transmission service on ICIF would need to follow 
the rules and regulations applicable to requests for service under 
sections 210 and 211.
a. Procedures Under Sections 210 and 211
    42. Sections 210 and 211 of the FPA describe the process for 
granting interconnection and transmission service in the absence of an 
OATT governing these services. Section 210 of the FPA provides, in 
relevant part, ``Upon application of any electric utility . . . the 
Commission may issue an order requiring (A) the physical connection of 
. . . the transmission facilities of any electric utility, with the 
facilities of such applicant.'' \63\ An ``electric utility'' is defined 
as ``a person or Federal or State agency . . . that sells electric 
energy.'' \64\ Section 211 provides that ``any electric utility, 
Federal power marketing agency, or any other person generating electric 
energy for sale or resale'' may apply to the Commission for an order 
requiring a ``transmitting utility'' to provide transmission services, 
including enlargement of facilities if necessary.\65\ The term 
``transmitting utility'' is defined as an entity that ``owns, operates, 
or controls facilities used for the transmission of electric energy . . 
. in interstate commerce . . . for the sale of electric

[[Page 31068]]

energy at wholesale.'' \66\ For a third party to obtain interconnection 
services and transmission services, an application must be made under 
both sections 210 and 211.\67\ An applicant may consolidate the 
applications for the Commission's consideration.\68\
---------------------------------------------------------------------------

    \63\ 16 U.S.C. 824i(a)(1)(A).
    \64\ 16 U.S.C. 796(22).
    \65\ 16 U.S.C. 824j.
    \66\ 16 U.S.C. 796(23).
    \67\ Tres Amigas LLC, 130 FERC ] 61,205, at P 43, reh'g denied, 
132 FERC ] 61,232 (2010). In Laguna Irrigation District, the 
Commission explained that ``[n]othing in our [section 210] 
interconnection order requires transmission service. Rather, 
transmission service will be obtained by Laguna pursuant to other 
transmission tariffs or agreements.'' 95 FERC ] 61,305, at 62,038 
(2001), aff'd sub. nom., Pacific Gas & Electric Co. v. FERC, 44 Fed. 
Appx. 170 (9th Cir. 2002) (unpublished); see also City of Corona, 
California v. Southern California Edison Co., 104 FERC ] 61,085, at 
PP 7-10 (2003) (Corona's application under section 210 did not 
constitute a request for transmission under section 211).
    \68\ See Aero Proposed Order, 115 FERC ] 61,128.
---------------------------------------------------------------------------

    43. As discussed above, under the various provisions of the LGIA, 
ICIF connect the Interconnection Customer's Generating Facility to the 
Point of Interconnection. Consistent with these definitions, to be 
eligible for the ICIF waiver, the Interconnection Customer that owns a 
Generating Facility must also sell electric energy, and thus be subject 
to section 210 of the FPA. Further, that Interconnection Customer must 
also own, control, or operate ICIF, in whole or in part, used for 
transmission for the sale of electric energy at wholesale, and thus be 
subject to section 211 of the FPA. To be eligible for the blanket 
waiver discussed herein, the ICIF owner must be subject to the 
Commission's authority under both sections 210 and section 211.
    44. An application under section 210 must: (1) Show that the 
interconnection is in the public interest; (2) would either encourage 
conservation of energy or capital, optimize efficient use of facilities 
and resources, or improve reliability; and (3) meet the requirements of 
section 212.\69\ The requirements of section 212 are discussed further 
below.
---------------------------------------------------------------------------

    \69\ 16 U.S.C. 824i(c); Aero Proposed Order, 115 FERC ] 61,128 
at PP 15-16.
---------------------------------------------------------------------------

    45. An application under section 211 requires that the third party 
seeking transmission first make a good faith request for service, 
complying with 18 CFR 2.20, specifying details as to how much capacity 
is requested and for what period, at least 60 days before making an 
application to the Commission for an order requiring transmission 
service.\70\ The Commission may grant an application under section 211 
if the application is in the public interest and otherwise meets the 
requirements under section 212.
---------------------------------------------------------------------------

    \70\ See 16 U.S.C. 824j(a) (``No order may be issued under this 
subsection unless the applicant has made a request for transmission 
services to the transmitting utility that would be the subject of 
such order at least 60 days prior to its filing of an application 
for such order.''); 18 CFR 2.20.
---------------------------------------------------------------------------

    46. Section 212 further requires that, before issuing a final order 
under either section 210 or 211, the Commission must issue a proposed 
order setting a reasonable time for the parties to agree to terms and 
conditions for carrying out the order, including allocation of costs. 
If parties can agree to terms within that time, the Commission may 
issue a final order approving those terms. If parties do not agree, the 
Commission will weigh the positions of the parties and issue a final 
order establishing the terms of costs, compensation, and other terms of 
interconnection and transmission and directing service.\71\
---------------------------------------------------------------------------

    \71\ 16 U.S.C. 824k(c)(2); Aero Proposed Order, 115 FERC ] 
61,128 at PP 17-18 (providing parties 28 days to negotiate and 
provide briefing on issues of disagreement).
---------------------------------------------------------------------------

b. Application of Sections 210 and 211 to Requests for Service on ICIF
    47. As discussed above, the Commission's current practice of 
addressing third-party requests for service is to allow the ICIF owner 
to demonstrate ``specific plans and milestones'' for any planned future 
generation development of the ICIF owner or its affiliates. Consistent 
with that practice, the Commission proposes to find that, with respect 
to ICIF eligible for the blanket waiver discussed above, it is 
generally in the public interest under sections 210 and 211 to allow an 
ICIF owner to retain priority rights to the use of excess capacity on 
ICIF that it plans to use to interconnect its own or its affiliates' 
future generation projects to the extent the ICIF owner can demonstrate 
specific plans and milestones for its and/or its affiliates' future use 
of the ICIF. Thus, the Commission will be making priority 
determinations in the section 210 and 211 process. The Commission seeks 
comment on whether an ICIF owner's or affiliate's planned future use of 
the ICIF is an appropriate consideration to factor into a section 210 
or 211 proceeding.
    48. Any disputes as to the extent of excess capacity on ICIF or the 
ICIF owner's future plans to use such excess capacity would be 
resolved, subject to the safe harbor presumption discussed below, 
during the proceedings under sections 210 and 211, using an excess 
capacity analysis similar to that used in Aero and Milford, in which 
the ICIF owner must demonstrate specific plans and milestones for the 
future use of its ICIF. However, unlike Aero and Milford, the ICIF 
waiver proposed here would not carry the automatic obligation to file 
an OATT if transmission is requested; rather, use of the framework 
under sections 210 and 211 will allow third parties to access the 
transmission facilities after following the process set forth under 
those provisions. The Commission acknowledges that entities have 
expressed concern with the plans and milestones standard of Aero/
Milford for demonstrating priority rights, but believes that use of the 
framework under sections 210 and 211 and the safe harbor presumption 
discussed below will reduce the need for ICIF owners to file petitions 
for declaratory order to pre-emptively seek priority rights.
    49. Further, using sections 210 and 211 will protect the ICIF owner 
from non-serious requests for transmission service by requiring the 
entity requesting service to pursue processes under sections 210 and 
211, rather than requiring an ICIF owner to file an OATT upon a request 
for service. This framework will assure eligible ICIF owners that they 
will have specified procedural rights as set forth in sections 210, 
211, and 212 of the FPA. This framework will also provide the 
contractual flexibility that some commenters suggest is not available 
under our current policy so that contractual arrangements (e.g., 
transmission service agreements, interconnection agreements, and/or 
shared facilities agreements) can be tailored to the special situations 
for ICIF. In addition, this framework will provide for some flexibility 
in determining the appropriate terms and conditions of service, as many 
of the pro forma OATT provisions are not applicable to service over 
ICIF.
    50. Under this proposal, the Commission could order the eligible 
ICIF owner to expand its facilities to provide interconnection and 
transmission service under sections 210 and 211 if no excess capacity 
is available.\72\ Section 212 requires that the eligible ICIF owners 
would be fully compensated for any required expansion.\73\ This is 
similar to the rights

[[Page 31069]]

and obligations under the pro forma OATT,\74\ so under the Proposed 
Rule third parties will have substantively similar rights, compared to 
the Commission's current policy, with regard to situations where 
providing interconnection and transmission service entails expanding 
ICIF.
---------------------------------------------------------------------------

    \72\ 16 U.S.C. 824i(a)(1)(D) (``The Commission may issue an 
order requiring . . . such increase in transmission capacity as may 
be necessary . . ..''); 16 U.S.C. 824j(a) (``Any electric utility . 
. . may apply to the Commission for an order under this subsection 
requiring a transmitting utility to provide transmission services 
(including any enlargement of transmission capacity necessary to 
provide such services) to the applicant.'').
    \73\ Section 212(a) provides that:
    An order under section 211 shall require the transmitting 
utility subject to the order to provide wholesale transmission 
services at rates, charges, terms, and conditions which permit the 
recovery by such utility of all the costs incurred in connection 
with the transmission services and necessary associated services, 
including, but not limited to, an appropriate share, if any, of 
legitimate, verifiable and economic costs, including taking into 
account any benefits to the transmission system of providing the 
transmission service, and the costs of any enlargement of 
transmission facilities.
    \74\ Section 15.4 of the pro forma OATT states:
    If the Transmission Provider determines that it cannot 
accommodate a Completed Application for Firm Point-To-Point 
Transmission Service because of insufficient capability on its 
Transmission System, the Transmission Provider will use due 
diligence to expand or modify its Transmission System to provide the 
requested Firm Transmission Service, consistent with its planning 
obligations in Attachment K, provided the Transmission Customer 
agrees to compensate the Transmission Provider for such costs 
pursuant to the terms of Section 27.
---------------------------------------------------------------------------

    51. The Commission believes that the section 210/211 process for 
requesting service over ICIF protects the rights of potential third-
party requesters. The proposed blanket waiver only applies in 
situations where sections 210 and 211 would provide interconnection and 
transmission access to a customer that seeks service over the ICIF. To 
the extent that either the third-party requester or ICIF owner does not 
meet applicable requirements for purposes of sections 210 and 211, but 
where the third-party requester would be eligible for OATT service, the 
ICIF waiver would not apply. The Commission believes that there would 
be a relatively small number of ICIF owners who could not be subject to 
section 210 and 211 orders. The Commission seeks comment on whether 
this limitation on which public utilities can take advantage of the 
blanket ICIF waiver is appropriate.
    52. The Commission notes that an ICIF owner that is not an electric 
utility continues to have the option to seek waiver of the OATT, OASIS, 
and Standards of Conduct requirements on a case-by-case basis. The 
Commission seeks comment on what would be the appropriate criteria and 
procedures for granting such entities a waiver, and whether and under 
what procedures the safe harbor provision discussed below could be 
extended to such entities. The Commission also seeks comment on whether 
a case-by-case process is effective for addressing waivers to such 
entities, or whether there are alternative, more general structures by 
which the Commission could appropriately apply the blanket waiver to 
entities with a broader set of ownership structures.
    53. We note that a section 210 and/or 211 proceeding would not 
necessarily revoke the blanket ICIF waiver, and that the Commission 
might direct service to be provided under an interconnection and/or 
transmission service agreement without directing that the ICIF owner 
file an OATT. However, the Commission reserves the right to revoke the 
blanket ICIF waiver and require the filing of an OATT to ensure open 
access in appropriate circumstances.
3. Safe Harbor for Early Years After ICIF Energization
    54. To reduce risks to ICIF owners eligible for the blanket waiver 
discussed above during the critical early years of their projects, the 
Commission proposes a safe harbor period of five years during which 
there would be a rebuttable presumption that: (1) The eligible ICIF 
owner has definitive plans to use its capacity without having to make a 
demonstration through a specific plans and milestones showing; and (2) 
the eligible ICIF owner should not be required to expand its 
facilities. A third-party requester \75\ for service on ICIF during the 
safe harbor period could attempt to rebut these presumptions, but it 
would have the burden of proof to show that the owner and/or operator 
does not have definitive plans to use its capacity and the public 
interest under sections 210 and 211 is better served by granting access 
to the third party than by allowing the eligible ICIF owner to reserve 
its ICIF capacity for its own future use.
---------------------------------------------------------------------------

    \75\ Such third-party requests for service could include 
requests for firm, nonfirm, conditional, or interim service. See, 
e.g., 18 CFR 2.20(b)(9).
---------------------------------------------------------------------------

    55. We believe a safe harbor period will address several concerns 
with our current policy. Creating a safe harbor period will reduce the 
risks of developing phased generation projects, as it will preserve the 
eligible ICIF owner's priority use of its ICIF capacity during the safe 
harbor period when the third-party requester fails to meet its burden 
of proof and will allow the eligible ICIF owner to demonstrate its 
plans and milestones in the proceedings under section 210 and 211. 
Creating the safe harbor period will require greater specificity for 
third-party requests for service, so the eligible ICIF owner would only 
be required to respond to requests for service that are fully developed 
and appropriate to the circumstances. Doing so will allow an eligible 
ICIF owner to focus on building generation and achieving commercial 
operation during the safe harbor period.
    56. The Commission proposes that the safe harbor period begin on 
the ICIF energization date. Because the energization date is not always 
publicly available, we propose that any eligible ICIF owner seeking to 
take advantage of the safe harbor must file an informational filing 
with the Commission (requiring no Commission action) documenting: (1) 
The ICIF energization date; (2) details sufficient to identify the ICIF 
at issue, such as location and Point of Interconnection; and (3) 
identification of the ICIF owner. For generators that are already 
operating as of the effective date of the Final Rule adopted in this 
proceeding, we propose to allow them to seek safe harbor status by 
filing at the Commission to document the information listed above, and 
that the safe harbor would expire five years after the initial 
energization of their ICIF. The Commission proposes that eligible ICIF 
owners making such an informational filing will be assigned an ``AD'' 
docket prefix for these filings, so that any interested third party 
will be able to easily identify the relevant filing and determine when 
a safe harbor is applicable.
    57. Where an application under sections 210 and 211 is filed during 
a safe harbor period and the Commission determines that the applicant 
has not successfully rebutted the presumption, the Commission could 
dismiss the application without prejudice to it being refiled if 
circumstances change or after the safe harbor period expires.
    58. The Commission seeks comments on whether a safe harbor period 
is appropriate, and about the structure and length of the safe harbor 
policy, including how the ICIF energization date should be reported. 
The Commission also seeks comment on whether ICIF owners that are not 
eligible for the blanket waiver, but that seek waiver on an individual 
basis of the OATT, OASIS, and Standards of Conduct, should be eligible 
for the safe harbor.

B. Affiliate Concerns

    59. The Commission seeks comment as to the set of entities to which 
it is appropriate to extend these reforms. As mentioned above, the 
target of these reforms is intended to be those generators whose 
ownership/operation of transmission facilities is limited to ICIF. 
Should entities that meet this description, but who are affiliated with 
a public utility transmission provider, be eligible for the blanket 
ICIF waiver within or adjacent to a public utility's footprint? A 
potential concern is that the availability of the blanket ICIF waiver 
to affiliated generation could incent vertically-integrated utilities 
to structure their generation and Interconnection Facilities 
developments in such a way that inappropriately limits access to 
certain facilities. If such

[[Page 31070]]

concerns warrant limiting the blanket ICIF waiver only to nonaffiliates 
of public utility transmission providers (within or adjacent to a 
public utility's footprint), the Commission is also interested as to 
what would be the appropriate mechanics of third-party interest on 
affiliates' ICIF (e.g., treatment of the facilities under the 
vertically-integrated utility's OATT or a separate OATT).\76\
---------------------------------------------------------------------------

    \76\ See Termoelectrica U.S., LLC, 102 FERC ] 61,024, at P 28 
(finding that Termoelectrica's line should be covered under the OATT 
of its adjacent, affiliated public utility), order granting reh'g on 
other grounds, 105 FERC ] 61,087 (2003) (granting rehearing to waive 
OATT filing requirements for Termoelectrica).
---------------------------------------------------------------------------

V. Information Collection Statement

    60. The following collections of information contained in this 
Proposed Rule are subject to review by the Office of Management and 
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\77\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\78\ The Commission 
solicits comments on the Commission's need for this information, 
whether the information will have practical utility, the accuracy of 
the burden estimates, ways to enhance the quality, utility, and clarity 
of the information to be collected or retained, and any suggested 
methods for minimizing respondents' burden, including the use of 
automated information techniques.
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    \77\ 44 U.S.C. 3507(d).
    \78\ 5 CFR 1320.11 (2013).
---------------------------------------------------------------------------

    61. The proposed regulations give a blanket waiver of OATT, OASIS, 
and Standards of Conduct filing requirements, and thus avoid both 
individual filings to request waiver as well as OATT filings. The 
Commission also believes that the proposed regulations will reduce the 
need for eligible ICIF owners to file petitions for declaratory order 
to pre-emptively seek priority rights. Based upon a review of the 
filings made over the past five years, the Commission estimates a 
reduction of eighteen filings per year, as shown in the table below.
    62. The Commission also recognizes that, in order to avail 
themselves of the safe harbor period described in the Proposed Rule, 
most ICIF owners will likely file a brief notification filing 
documenting: (1) The energization date; (2) details sufficient to 
identify the ICIF at issue, such as location and Point of 
Interconnection; and (3) identification of the ICIF owner. The 
estimated public reporting burdens for this proposed reporting 
requirement are also in the table below.
---------------------------------------------------------------------------

    \79\ The estimates for cost per response are derived using the 
following formula: Average Burden Hours per Response * $91 per Hour 
= Average Cost per Response. The hourly cost figure represents a 
combined hourly rate of an attorney ($128.39), economist ($70.96), 
engineer ($59.87), and administrative staff ($29.93), with a 50 
percent weighting on the attorney's rate. The estimated hourly costs 
(salary) are based on Bureau of Labor and Statistics information 
(available at http://www.bls.gov/oes/current/naics2_22.htm, and are 
adjusted to include benefits by assuming that salary accounts for 
70.1 percent of total compensation). See http://www.bls.gov/news.release/ecec.nr0.htm.
    \80\ The average number of filings for the first three years is 
computed as follows. The Commission expects approximately 80 safe 
harbor filings in the first year, which represents the number of 
waiver filings over a historical five year period and thus the 
approximate number of existing entities which will be able to take 
advantage of the five year safe harbor period as of the effective 
date of the Final Rule in this proceeding. In the subsequent two 
years, the Commission expects approximately 18 safe harbor filings 
per year, which represents the historical number of OATT waiver 
filings (16), OATT filings (1), and petitions for declaratory order 
(1) per year. Going forward, we would expect the Proposed Rule would 
avoid these filings and that the relevant entities would instead 
avail themselves of the proposed safe harbor period. The average of 
the three year period then is (80 + 18 + 18)/3 = 39.

                           RM14-11 (Open Access and Priority Rights on Interconnection Customer's Interconnection Facilities)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Total annual
                                                             Number of     Annual number   Total number   Average burden   burden hours    Average cost
                                                            respondents    of responses    of responses    and cost per      and total    per respondent
                                                                          per respondent                   response \79\    annual cost         ($)
                                                                     (1)             (2)     (1) * (2) =             (4)     (3) * (4) =       (5) / (1)
                                                                                                     (3)                             (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individual Requests for Waiver (FERC-917)...............              16              -1             -16              10            -160           -$910
                                                                                                                    $910        -$14,560
OATT Filings (FERC-917).................................               1              -1              -1             100            -100         -$9,100
                                                                                                                  $9,100         -$9,100
Petitions for Declaratory Order requesting priority                    1              -1              -1              30             -30         -$2,730
 rights (FERC-582)......................................                                                          $2,730         -$2,730
Safe Harbor Energize Date Filing (average of first three              39               1              39               1              39             $91
 years) \80\ (FERC-917).................................                                                             $91          $3,549
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  ..............  ..............              21  ..............            -251        -$12,649
                                                                                                                                -$22,841
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Cost to Comply: The Commission has projected the cost of compliance 
with the safe harbor energization date filing to be $7,280 in the 
initial year and $1,638 in subsequent years, as new ICIF owners make 
safe harbor filings for their newly energized projects. This is offset 
by the reduction in burden associated with the waiver of filing 
requirements of $26,390 per year. As an average for the first three 
years, this amounts to a net reduction in burden of $22,841.
    Total Annual Hours for Collection in initial year (80 hours) @ $91 
an hour = $7,280
    Total Annual Hours for Collection in subsequent years (18 hours) @ 
$91 an hour = $1,638.
    Total Annual Hours for Reduced Collection per year (290 hours) @ 
$91 an hour = $26,390.
    Title: FERC-917, Non-Discriminatory Open Access Transmission Tariff
    Action: Proposed Collection.
    OMB Control No. 1902-0233
    Respondents for this Rulemaking: Businesses or other for profit 
and/or not-for-profit institutions.
    Frequency of Information: As indicated in the table.
    Necessity of Information: The Federal Energy Regulatory Commission 
is proposing changes to its regulations related to which entities must 
file the pro forma OATT, establish and maintain an OASIS, and abide by 
its

[[Page 31071]]

Standards of Conduct in order to eliminate unnecessary filings and 
increase certainty for entities that develop generation. The purpose of 
this Proposed Rule is to reduce regulatory burdens and promote 
development while continuing to ensure open access to transmission 
facilities. The safe harbor energization date filing is necessary to 
ensure transparency as to the applicability of the safe harbor period.
    Internal Review: The Commission has reviewed the proposed changes 
and has determined that the changes are necessary. These requirements 
conform to the Commission's need for efficient information collection, 
communication, and management within the energy industry. The 
Commission has assured itself, by means of internal review, that there 
is specific, objective support for the burden estimates associated with 
the information collection requirements.
    63. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director], email: 
DataClearance@ferc.gov, Phone: (202) 502-8663, fax: (202) 273-0873.
    64. Comments on the collections of information and the associated 
burden estimates in the proposed rule should be sent to the Commission 
in this docket and may also be sent to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street 
NW., Washington, DC 20503 [Attention: Desk Officer for the Federal 
Energy Regulatory Commission], at the following email address: oira_submission@omb.eop.gov. Please reference OMB Control No. 1902-0096 and 
the docket number of this proposed rulemaking in your submission.

VI. Environmental Analysis

    65. 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.\81\ The 
Commission concludes that neither an Environmental Assessment nor an 
Environmental Impact Statement is required for this Proposed Rule under 
section 380.4(a)(15) of the Commission's regulations, which provides a 
categorical exemption for approval of actions under sections 205 and 
206 of the FPA relating to the filing of schedules containing all rates 
and charges for the transmission or sale of electric energy subject to 
the Commission's jurisdiction, plus the classification, practices, 
contracts, and regulations that affect rates, charges, classifications, 
and services.\82\
---------------------------------------------------------------------------

    \81\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
    \82\ 18 CFR 380.4(a)(15) (2013).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act Analysis

    66. The Regulatory Flexibility Act of 1980 (RFA) generally requires 
a description and analysis of final rules that will have a significant 
economic impact on a substantial number of small entities. The RFA 
mandates consideration of regulatory alternatives that accomplish the 
stated objectives of a proposed rule and that minimize any significant 
economic impact on a substantial number of small entities. The Small 
Business Administration's (SBA's) Office of Size Standards develops the 
numerical definition of a small business.\83\ The SBA recently revised 
its size standard for electric utilities (effective January 22, 2014) 
to a standard based on the number of employees, including affiliates 
(from a standard based on megawatt hours).\84\ Under SBA's new size 
standards, ICIF owners likely come under one of the following 
categories and associated size thresholds: \85\
---------------------------------------------------------------------------

    \83\ 13 CFR 121.101 (2013).
    \84\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77343 (12/23/2013).
    \85\ 13 CFR 121.201, Sector 22, Utilities.

 Hydroelectric power generation, at 500 employees
 Fossil fuel electric power generation, at 750 employees
 Other electric power generation (e.g. solar, wind, geothermal, 
and others), at 250 employees

    67. According to US economic census data,\86\ over half of the 
firms in the categories above are small. However, currently FERC does 
not have information on how the economic census data compares with 
entities registered with NERC and is unable to estimate the number of 
small ICIF owners using the new SBA definitions. Regardless, FERC 
recognizes that the rule will likely impact small ICIF owners and 
estimates the economic impact on each entity below.
---------------------------------------------------------------------------

    \86\ Data and further information is available from SBA at 
http://www.sba.gov/advocacy/849/12162.
---------------------------------------------------------------------------

    68. This Proposed Rule applies to public utilities whose ownership, 
control, or operation of transmission facilities is limited to ICIF, as 
defined in the standard generator interconnection procedures and 
agreements referenced in 18 CFR 35.28(f). Of these public utilities, we 
conservatively estimate that all will qualify as small. The Commission 
estimates that each of the small entities to whom the Proposed Rule 
applies will incur one-time costs of $91 \87\ to document its 
energization date and thus avail itself of the safe harbor provision. 
This is true for those existing entities that have already received 
waiver of the OATT prior to the issuance of a Final Rule, as well as 
for new entities. This cost will be offset for new entities by a cost 
reduction, on average, of $1,269.\88\ As the Commission has previously 
explained, in determining whether a regulatory flexibility analysis is 
required, the Commission is required to examine only direct compliance 
costs that a rulemaking imposes on small business.\89\ It is not 
required to examine indirect economic consequences, nor is it required 
to consider costs that an entity incurs voluntarily. The Commission 
does not consider the estimated costs per small entity to have a 
significant economic impact on a substantial number of small entities. 
Accordingly, the Commission certifies that the proposed rule will not 
have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \87\ $91 is calculated here as one hour of work at an hourly 
rate of $91.
    \88\ This reduced burden amount is calculated by taking the 
total estimated burden reduction per year, $22,841, and dividing by 
18, the estimated number of filings avoided because of the proposed 
regulations.
    \89\ Credit Reforms in Organized Wholesale Electric Markets, 133 
FERC ] 61,060, at P 184 (2010).
---------------------------------------------------------------------------

VIII. Comment Procedures

    69. 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 July 29, 2014. Comments must refer to 
Docket No. RM14-11-000, and must include the commenter's name, the 
organization represented, if applicable, and its address in its 
comments.
    70. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    71. Commenters that are not able to file comments electronically 
must send

[[Page 31072]]

an original copy of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    72. 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.

IX. Document Availability

    73. 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 5:00 
p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 
20426.
    74. From FERC's Home Page on the Internet, this information is 
available on eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    75. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 35

    Electric power rates; Electric utilities; Reporting and 
recordkeeping requirements.

    By direction of the Commission.
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 35, Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

0
1. The authority citation for part 35 continues to read as follows:

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

0
2. Amend Sec.  35.28 by revising paragraph (d) to read as follows:

Sec.  35.28  Non-discriminatory open access transmission tariff.

* * * * *
    (d) Waivers. (1) A public utility subject to the requirements of 
this section and 18 CFR parts 37 (Open Access Same-Time Information 
System) and 358 (Standards of Conduct for Transmission Providers) for 
good cause shown. Except as provided in paragraph (f) of this section, 
an application for waiver must be filed no later than 60 days prior to 
the time the public utility would have to comply with the requirement.
    (2) The requirements of this section, 18 CFR parts 37 (Open Access 
Same-Time Information System) and 358 (Standards of Conduct for 
Transmission Providers) are waived for any public utility that is or 
becomes subject to such requirements solely because it owns, controls, 
or operates Interconnection Customer's Interconnection Facilities, in 
whole or in part, and sells electric energy from its Generating 
Facility, as those terms are defined in the standard generator 
interconnection procedures and agreements referenced in paragraph (f) 
of this section.
    (i) The waivers referenced in this paragraph (d)(2) shall be deemed 
to be revoked as of the date the public utility ceases to satisfy the 
qualifications of this paragraph (d)(2), and may be revoked by the 
Commission if the Commission determines that it is in the public 
interest to do so. After revocation of its waivers, the public utility 
must comply with the requirements that had been waived within 60 days 
of revocation.
    (ii) Any eligible entity that seeks interconnection or transmission 
services with respect to Interconnection Customer's Interconnection 
Facilities for which a waiver is in effect pursuant to this paragraph 
(d)(2) shall follow the procedures in sections 210, 211, and 212 of the 
Federal Power Act and 18 CFR 2.20 and 18 CFR part 36. In any proceeding 
pursuant to this paragraph (d)(2)(ii):
    (A) The Commission will consider it to be in the public interest to 
grant priority rights to the owner and/or operator of Interconnection 
Customer's Interconnection Facilities to use capacity thereon when such 
owner and/or operator can demonstrate that it has specific plans with 
milestones to use such capacity to interconnect its or its affiliate's 
future generation projects.
    (B) For the first five years after the Interconnection Customer's 
Interconnection Facilities are energized, the Commission will apply 
rebuttable presumptions that:
    (1) The owner and/or operator of such facilities has definitive 
plans to use the capacity thereon, and it is thus in the public 
interest to grant priority rights to the owner and/or operator of such 
facilities to use capacity thereon; and
    (2) The owner and/or operator of such facilities should not be 
required to expand its facilities.

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

Appendix A: List of Short Names of Commenters on the Federal Energy 
Regulatory Commission's Notice of Inquiry on Open Access and Priority 
Rights on Interconnection Facilities--Docket No. AD12-14-000, April 
2012

Commenter (Short Name or Acronym)

American Public Power Association (APPA)
American Wind Energy Association (AWEA)
Bonneville Power Administration (BPA)
BP Wind Energy North America Inc. (BP Wind)
California Independent System Operator Corporation (CAISO)
Duke Energy Corporation (Duke)
Edison Electric Institute (EEI)
E.ON Climate & Renewables North America (E.ON)
Electric Power Supply Association (EPSA)
First Wind Holdings, LLC (First Wind)
Invenergy Wind Development LLC and Invenergy Thermal Development LLC 
(Invenergy)
ITC Holdings Corp. (ITC)
Los Angeles Department of Water and Power (LADWP)
Midwest Independent Transmission System Operator, Inc. (MISO)
NextEra Energy Resources, LLC (NextEra)
New Jersey Board of Public Utilities (NJBPU)
The NRG Companies (NRG)
Puget Sound Energy, Inc. (Puget)
Recurrent Energy
San Diego Gas & Electric Company
Solar Energy Industries Association (SEIA)
Southwest Power Pool, Inc.
Tenaska Energy, Inc. (Tenaska)
TGP Development Company, LLC (TGP)
Transmission Access Policy Study Group (TAPS)

[FR Doc. 2014-11946 Filed 5-29-14; 8:45 am]
BILLING CODE 6717-01-P