Notes from December 20, 2007 FERC Open Meeting

Chairman Kelliher opened the meeting with the announcement regarding the recent confirmations of Commissioner Wellinghoff and himself to second terms on the Commission. 

E-1 - Preventing Undue Discrimination and Preference in Transmission Service, RM05-17

The first discussion item was E-1 -- Rehearing of Order 890, which consisted of a presentation by Mason Emmet and Daniel Hedberg.  The order largely affirmed Order 890, but also granted limited clarifications.  The order reaffirmed the requirement that ATC standards be developed through the NERC process.  Regarding transmission planning, the order also affirmed the obligations of transmission providers to open their planning processes to customers and conduct planning in a transparent process.  The order also reaffirmed the conditional firm service provisions.  Rehearing was granted regarding the pricing of imbalance such that the last 10 megawatts dispatch for any purpose (not just native load) would set the price.  The draft order also clarifies certain requirements regarding designated network resources. 

G-1 - Transparency Provisions of Section 23 of the Natural Gas Act, RM07-10
G-2 - Pipeline Posting Requirements under Section 23 of the Natural Gas Act, RM08-2

Eric Ciccoretti and Steve Harvey, of the Office of Enforcement, presented item G-1, which was the FERC's first exercise of its authority under the transparency provision of the NGA.  The order requires reporting of any market participant of three categories of information on a new form: Form No. 552.  The categories are : (1) [to be added] (2) whether it reports prices to an index developer consistent with reporting requirement; (3) information regarding the physical volumes of activity, aggregated for the year and territory.

FERC also issued a NOPR proposing a daily pipeline posting requirement of capacity information, scheduled flow information, and actual flow information.

Order No. 890 Compliance Orders

On December 7, 2007, FERC issued two orders, one with respect to APS' section 205 Order 890 compliance filing, and one with respect to APS' section 206 Order 890 compliance filing. In the Section 205 order (Docket No. ER07-1171) FERC stated that APS' proposed tariff revisions were accepted in party and rejected in part, and required a compliance filing to be filed within 30 days:

• accepted the elimination of the requirement for the identification of the source control area(s) for off-system network resources as unnecessary for ATC calculations at this time; this finding "is subject to APS submitting, after Commission action on its required ATC compliance filing, information demonstrating that the specification of delivery points is consistent with that subsequent order, in particular whether it continues to be sufficiently specific to allow a transaction to be evaluated for its effect on the ATC on APS' transmission system."
  
• found that APS' arguments on the need for modifications to the OATT to accommodate reserve sharing arrangement to be compelling, but rejected the specific fixes proffered by APS; instead, the Commission proposed specific language edits to the definition of Network Resource and the OATT provision regarding Operation of Network Resources.
• accepted APS' proposal off a 3:00 p.m. PPT deadline for scheduling firm and non-firm point-to-point transmission service.
• dismissed as moot APS' request with regard to the minimum lead time for undesignation of a network resource, consistent with the Commission's finding in Avista Corporation.
• rejected without prejudice APS' request for a daily minimum term for designation of network resources (even though APS offers hourly point-to-point transmission service) because APS did not provide sufficient information to explain why its proposal was necessary.
• accepted APS' proposal that would allow network customer to make firm off system sales to third parties for two hours, in the event that such sale is necessary to alleviate or forestall a potential system Emergency on a third party system.
  
• accepted APS' proposed tariff revisions to allow for continued booking out of transactions "as long as appropriate documentation is maintained to verify that proper OATT procedures have been followed..."
• accepted APS' proposal to incorporate unchanged designated network resource information by reference, but required clarifying tariff language to be filed.
• rejected without prejudice APS' proposed revisions to section 17.1, 29.2 and 37.2 of the OATT regard fax submissions.
• accepted APS' proposal to include language subjecting generator interconnection customers to generator imbalance charges, and accepted the proposed edits to sections 34.6 and 42.3 of the OATT, which state that Network Customers are subject to unreserved use penalties at the point-to-point rate.
• accepted APS' proposal to subject both energy and generator imbalances to the same penalty -- a weighted average of the Dow Jones Electricity Price Index for Four Corners, Palo Verde and Mead.
  

In the companion order on APS' section 206 compliance filing (in Docket No. OA07-19), the Commission found:

• APS must complete an Attachment J to its OATT "by incorporating either the NERC TLR procedures, WSCC Unscheduled Flow Mitigation Plan, or ERCOT protocol and must provide a link to the applicable procedures."
• that APS' proposed tariff sheets for generator imbalance service and pricing were unnecessary because superseding sheets for the same purpose were accepted in the 205 compliance order discussed above.
• that APS' proposed imbalance crediting mechanism should be revised to define offending customers on an hourly rather than annual basis.
• that APS should further explain how "it will further structure customer obligations under a cluster."
• that there was no need for APS to develop a set-aside rate for CBM since APS does not reserve CBM for native load or any other customer.
• that APS' proposed rollover provision in section 2.2 of its OATT should not take effect until APS' proposed Attachment K is accepted.
• that APS' proposed creditworthiness provisions were acceptable, but that further detail was needed with regard to its "qualitative and quantitative scoring model" to be used when credit rating agency reports are not available for a particular customer.
• that APS' unreserved use penalty provision should be adjusted so that (1) unreserved use is based on the period of unreserved use; (2) unreserved use penalty for a single hour of unreserved use is to be based on the rate for daily firm point-to-point transmission service; and (3) more than one assessment for a given duration (e.g., daily) results in an increase of the penalty period to the next longest duration (e.g., weekly).
• that APS must address the simultaneous submission window by "either (1) indicating that it is currently in compliance with the use of a simultaneous submission window as required in Order No. 890 referencing the Commission order where such variation from the pro forma OATT was accepted by the Commission, or (2) proposing a tariff provision to comply with the remaining compliance requirements of Order No. 890 for adoption of a simultaneous submission window."