[Federal Register: April 22, 2004 (Volume 69, Number 78)]
[Proposed Rules]
[Page 21777-21778]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ap04-27]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 1
[Docket No. RM04-7-000]
Notice of Technical Conference and Initiation of Rulemaking
Proceeding
April 14, 2004.
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Initiation of rulemaking proceeding and notice of technical
conference.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission is establishing a
rulemaking proceeding with respect to the adequacy of the current four-
prong analysis and whether and how it should be modified to assure that
electric market-based rates are just and reasonable under the Federal
Power Act. The Commission will convene a series of technical
conferences that will be open to the public. The first such technical
conference will be June 9, 2004, at the Commission's headquarters. The
purpose of this conference will be to frame the issues that will
comprise the rulemaking proceeding, including a discussion on how all
four parts of the current test interrelate, as well as what other
factors the Commission should consider in granting market-based rate
authorizations.
FOR FURTHER INFORMATION CONTACT: Michelle Barnaby, Office of Markets,
Tariffs, and Rates, Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426, (202) 502-8407.
SUPPLEMENTARY INFORMATION:
107 FERC ] 61,019
Federal Energy Regulatory Commission
[Docket No. RM04-7-000]
Market-Based Rates For Public Utilities; Initiation of Rulemaking
Proceeding on Market-Based Rates and Notice of Technical Conference
April 14, 2004.
1. In a companion order we are issuing today in AEP Power
Marketing, Inc., Docket No. ER96-2495-016, et al.
[[Page 21778]]
(AEP Order),\1\ the Commission adopts new interim generation market
power screens to identify those applicants for electric market-based
rate authority that may possess generation market power. An analysis of
whether an applicant possesses generation market power has for many
years been one of the four prongs of analysis the Commission has used
to assess whether an applicant should be granted market-based rate
authority. The other three prongs that the Commission has considered
are (1) whether the applicant has transmission market power, (2)
whether the applicant can erect barriers to entry, and (3) whether
there are concerns involving the applicant that relate to affiliate
abuse and/or reciprocal dealing. In today's AEP Order and in prior
orders in the same dockets, the Commission stated that the generation
market power screen it was adopting in that proceeding was only an
interim screen, and that the Commission intended to initiate a generic
rulemaking proceeding on potential new analytical methods for assessing
markets and market power. The Commission has also stated that as part
of this process it intended to hold a series of outreach meetings with
industry experts on these matters.\2\ The purpose of this notice is to
initiate a rulemaking proceeding with respect to the adequacy of the
current four-prong analysis and whether and how it should be modified
to assure that electric market-based rates are just and reasonable
under the Federal Power Act.
---------------------------------------------------------------------------
\1\ 107 FERC ] 61,018 (2004) (AEP Order).
\2\ See, e.g., AEP Order, 107 FERC ] 61,018 at P1-2; AEP Power
Marketing, Inc, et al., 97 FERC ] 61,219 at 61,967 & n.2 (2001);
Notice Delaying Effective Date of Mitigation and Announcing
Technical Conference, December 20, 2001 at 1; Notice of Technical
Conference on Supply Margin Assessment Screen and Alternatives,
December 19, 2003, at 1, 3, and attached Staff Paper at 1.
---------------------------------------------------------------------------
2. The Commission's four-prong market-based rate test was developed
nearly 15 years ago, in the context of specific market-based rate
proposals filed with the Commission, and currently there are no
comprehensive codified regulations governing what applicants must
demonstrate in order to obtain market-based rate authorization from the
Commission. Much has changed in the industry since the Commission began
using the four-prong test in the 1980s, and we believe it is important
not only to ensure that our test is sufficient to support market-based
rates in today's energy markets, but also to provide clarity, by way of
codified regulations, as to what applicants must demonstrate in order
to obtain (and retain) authority to sell at market-based rates.
3. This generic proceeding will address, but not be limited to,
whether the Commission should retain or modify its existing four-prong
test (e.g., whether the analysis should explicitly address vertical
market power issues); whether the factors the Commission considers
under the existing prongs should be revised; whether the interim
generation market power screens that are adopted today in the AEP Order
should be retained over the long-term; whether the Commission should
adopt different approaches to affiliate transactions than it currently
does; and whether there should be new Commission regulations
promulgated expressly for electric market-based rate filings. The
Commission intends the scope of this rulemaking proceeding to be broad,
and to include market-based rate authorizations associated with
ancillary services.
4. In order to have a better understanding of the issues that need
to be considered, as well as the procedural direction the rulemaking
should take, as a first step the Commission intends to convene a series
of technical conferences that will be open to the public. The
Commission will hold the first such technical conference on June 9,
2004, at the Commission's headquarters. The purpose of this conference
will be to frame the issues that will comprise the rulemaking
proceeding, including a discussion of how all four parts of the current
test interrelate, as well as what other factors the Commission should
consider in granting market-based rate authorizations.
5. The conference will be transcribed. Those interested in
acquiring the transcript should contact Ace Reporters at 202-347-3700
or 800-336-6646. Transcripts will be placed in the public record 10
days after the Commission receives the transcripts. Additionally,
Capitol Connection offers the opportunity for remote listening and
viewing of the conference. It is available for a fee, live over the
Internet, by phone or via satellite. Persons interested in receiving
the broadcast, or who need information on making arrangements, should
contact David Reininger or Julia Morelli at Capitol Connection (703-
993-3100) as soon as possible or visit the Capitol Connection Web site
at http://www.capitolconnection.org and click on ``FERC.''
6. For more information about the conference, please contact
Michelle Barnaby at 202-502-8407 or Michelle.Barnaby@ferc.gov.
7. A supplemental notice of this conference will be issued later
that will provide details of the conference, including the panelists.
By direction of the Commission.
Magalie R. Salas,
Secretary.
[FR Doc. 04-9099 Filed 4-21-04; 8:45 am]
BILLING CODE 6717-01-P