[Federal Register: June 14, 2005 (Volume 70, Number 113)]
[Proposed Rules]
[Page 34417-34421]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14jn05-33]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 37
[Docket No. RM05-17-000]
Information Requirements for Available Transfer Capability
May 27, 2005.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Notice of Inquiry.
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SUMMARY: The Federal Energy Regulatory Commission seeks comments on:
(a) The North American Electric Reliability Council's recent Long-Term
AFC/ATC Task Force Report; (b) the advisability of revising and
standardizing available transfer capability calculations; and (c) the
most expeditious way to obtain an industry-wide standard for available
transfer capabilitycalculations. This Notice of Inquiry is the result
of a review conducted by the Commission's Information Assessment Team
(FIAT), to propose: (a) new information the Commission needs to promote
greater market transparency in electricity markets; and (b) ways to
reduce the reporting burden on industry through the elimination,
reduction, streamlining or reformatting of current information
collections.
DATES: Comments on this Notice of Inquiry are due on August 15, 2005.
ADDRESSES: Comments may be filed electronically via the eFiling link on
the
[[Page 34418]]
Commission's web site at http://www.ferc.gov. Commenters unable to file
comments electronically must send an original and 14 copies of their
comments to: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street NE., Washington, DC, 20426. Refer to the
Comment Procedures section of the preamble for additional information
on how to file comments.
FOR FURTHER INFORMATION CONTACT:
Michelle Veloso (Technical Information), Office of Markets, Tariffs and
Rates, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426. michelle.veloso@ferc.gov.
Edward Fowlkes (Technical Information), Office of Energy Projects,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426. edward.fowlkes@ferc.gov.
Joseph C. Lynch (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426. joseph.lynch@ferc.gov.
SUPPLEMENTARY INFORMATION:
Notice of Inquiry
1. In Order No. 889,\1\ the Commission required transmission
providers \2\ to offer unused transmission capacity to the market by
posting available transfer capability (ATC) on their Open Access Same-
Time Information Systems (OASIS).\3\ In the years since the Commission
issued Order No. 889, market participants have complained that
variations in the way ATC is calculated provide opportunities for undue
discrimination and create obstacles to doing business. The Commission
believes that standardizing the way ATC is calculated will alleviate
these obstacles. This Notice of Inquiry is the result of a review
conducted by the Commission's Information Assessment Team (FIAT), to
propose: (1) New information the Commission needs to promote greater
market transparency in electricity markets; and (2) ways to reduce the
reporting burden on industry through the elimination, reduction,
streamlining or reformatting of current information collections.
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\1\ Open Access Same-Time Information System and Standards of
Conduct, Order No. 889, 61 FR 21,737 (1996), FERC Stats. & Regs.,
Regulations Preambles July 1996-December 2000 ] 31,035 (1996), order
on reh'g, Order No. 889-A, 62 FR 12,484 (1997), FERC Stats. & Regs.,
Regulations Preambles July 1996-December 2000 ] 31,049 (1997), reh'g
denied, Order No. 889-B, 81 FERC ] 61,253 (1997).
\2\ A transmission provider is the public utility (or its
Designated Agent) that owns, controls, or operates facilities used
for the transmission of electric energy in interstate commerce and
provides transmission service under the Tariff. See 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 21,540 (May 10, 1996), FERC Stats. & Regs., Regulations
Preambles January 1991-June 1996 ] 31,036 Appendix D (Pro Forma
Tariff) at 1.46 (1996), order on reh'g, Order No. 888-A, 62 FR
12,274 (March 4, 1997), FERC Stats. & Regs., Regulations Preambles
July 1996-December 2001 ] 31,048 (1997), 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 (DC Cir. 2000),
aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002) (Order No. 888).
\3\ 18 CFR Part 37.
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2. The Commission has reviewed the final report of the North
American Electric Reliability Council (NERC) on long-term available
flowgate capability (AFC) and ATC,\4\ which addresses the calculation
and coordination of AFC/ATC to increase market liquidity and enhance
reliability. As discussed more fully below, NERC's LTATF Report
provides useful guidance on how to achieve an industry-wide methodology
for calculating ATC. The Commission encourages the electricity industry
to work toward standardization and coordination of ATC and related
terms, and requests comments on the recommendations put forth in the
LTATF Report.\5\
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\4\ North American Electric Reliability Council, Long-Term AFC/
ATC Task Force Final Report (2005) (LTATF Report).
\5\ The Commission recognizes the common interest of the United
States, Canada and Mexico in maintaining a safe and reliable
interconnected North American bulk power system. Any standards
promulgated by the Commission would apply only to jurisdictional
entities.
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Background
A. Definitions
3. The calculation of ATC involves a number of variables that
require definition. The Commission will use the LTATF Report
definitions for purposes of the discussion in this Notice of Inquiry.
The Commission requests, however, that the industry comment on these
definitions, as these variables determine the calculation of ATC.
4. For market participants, ATC is essentially a measure of unused
transmission that a transmission provider can offer for sale pursuant
to Order Nos. 888 and 889. Transmission providers sell transmission
service to customers in the form of transfer capability. Transfer
capability is the measure of the ability of the interconnected
electrical system to move electric energy reliably from one point to
another and is limited by, among other things, the capacity either of
equipment (such as transformers or transmission circuits) or interfaces
(one or more circuits). ATC is the amount of transfer capability still
available for sale after all existing uses are accounted for.\6\
Transmission providers calculate ATC by subtracting existing
transmission commitments, transmission reserve margin, and capacity
benefit margin from total transfer capability.\7\
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\6\ LTATF Report, Appendix A, page 4.
\7\ ATC equals Total Transfer Capability (TTC) minus Existing
Transmission Commitments (ETC) minus Transmission Reserve Margin
(TRM) minus Capacity Benefit Margin (CBM), or ATC=TTC-ETC-TRM-CBM.
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5. A flowgate is the name given to a transmission element(s) and
associated contingencies that may limit ATC. AFC is a measure of the
capability remaining on a flowgate for future uses, after considering
the effect of prior sales. AFC is measured as a flow limit on a
flowgate, while ATC is measured as a transaction limit from a source to
a sink.\8\
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\8\ ``Source'' and ``sink'' are points at which the transmission
of electric energy begins (source) and ends (sink).
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6. There may be multiple flowgates between source and sink that can
limit a transaction. If the assumptions that underlie AFC and ATC do
not reasonably conform to real-time operations, the transmission system
will either be artificially constrained, or it will be underused,
leading to lost transmission opportunities.
7. Transmission providers use CBM and TRM in their ATC and AFC
calculations to account for uncertainties or contingencies that are not
explicitly modeled in the calculations. CBM is the amount of firm
transmission transfer capability reserved by the transmission provider
so that load serving entities, whose loads are located on that
transmission provider's system, can access remote reserve generation
from interconnected systems.\9\ TRM is the amount of transmission
transfer capability necessary to ensure that the interconnected
transmission network will be secure under a reasonable range of
uncertainties in system conditions. The criteria used to determine TRM
and CBM should be consistent with the transmission operator's planning
and operating criteria.\10\
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\9\ LTATF Report, Appendix F, page 2.
\10\ Id. at Appendix A, page 5.
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B. Evolution of Electricity Markets Since Order Nos. 888 and 889
8. In Order Nos. 888 and 889, the Commission required transmission
providers to sell unused transmission capacity and post their ATC on
OASIS. Market transactions depend on this
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critical transmission information. As the electric industry has
evolved, the nature of the calculations of ATC, TTC, TRM and CBM and
the interaction between neighboring transmission providers has changed
substantially. In the years since the Commission established OASIS,
independent system operators (ISOs) and regional transmission
organizations (RTOs) have developed organized markets. Agreements among
neighboring ISOs/RTOs and transmission service providers have led to
increased coordination of operation and requests for transmission
service, and have resulted in fewer variations in the calculation of
ATC for those regions. In regions without an ISO/RTO, however, this may
not be the case.
9. While the electric industry uses OASIS for posting ATC, there is
as yet no industry-wide standard for calculating ATC. The Commission's
OASIS II Advanced Notice of Proposed Rulemaking, issued in July 2000,
contemplated detailed, standard communication protocols and associated
business practices for ATC, TTC, and CBM \11\ but these standards and
protocols are not yet in place.
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\11\ Open Access Same-Time Information System Phase II, 92 FERC
] 61,047 at 61,126-27 (2000).
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C. Problems With ATC Calculations
10. Transmission providers have incentives to understate ATC on
those paths valuable to power sellers that are competitors to a
transmission provider's own (or its affiliate's) power sales. The lack
of clear and consistent methodologies for calculating ATC can allow
transmission providers the discretion to control the transmission
system to favor their own power sales or those of their affiliates. ATC
can vary considerably depending on the criteria they use to calculate
it and the order in which the calculations are made. Although the
Commission has required transmission providers to post the formula for
calculating ATC,\12\ the transmission provider has sole responsibility
for, and a great deal of discretion in, its calculation. More rigorous
and consistent standards and procedures for ATC calculations would help
ensure that transmission providers' exercise of discretion in their
calculation of ATC does not result in undue discrimination with respect
to interstate transmission.
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\12\ 18 CFR 37.6.
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11. Complainants have alleged that transmission providers
misrepresent ATC, often using ATC calculations to inflate transmission
needed to serve native load or to set aside capacity for their
affiliates. In one instance, a transmission provider reserved capacity
on behalf of native load but failed to designate network resources as
required by the open access transmission tariff. The company thus
improperly increased the existing transmission commitment component of
the ATC calculation, artificially reducing posted ATC.\13\ It is thus
important that the ATC component (TRM and CBM) assumptions are stated
and posted so that recalculated ATC values are transparent and not
devised to produce an unduly discriminatory result.
12. The lack of standardization and coordination of ATC can not
only result in unduly discriminatory behavior, but can also on occasion
affect reliability. As the LTATF recognized, inaccurate ATC values can
lead to Transmission Loading Relief actions [or curtailments in the
Western Electricity Coordinating Council (WECC)] if they result in
transmission flows that exceed line limits.\14\ In this regard,
preceding the August 14, 2003 blackout, transmission operators
calculated ATC values approximately seven days ahead using forecasted
system conditions. This lag in real-time ATC values contributed to the
blackout. The Final Blackout Report indicated that transmission
operators should update ATC/TTC values as the forecast of system
conditions changes.\15\
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\13\ See Aquila Power Corporation v. Entergy Services, Inc., 90
FERC ] 61,260 at 61,859-60 (2000).
\14\ LTATF Report, page 1.
\15\ U.S.-Canada Power System Outage Task Force, Final Report on
the August 14th Blackout in the United States and Canada: Causes and
Recommendations 31 (April 2004) (Final Blackout Report).
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D. The LTATF Report
13. NERC created the LTATF to develop a report and specific
recommendations for the calculation and coordination of AFC/ATC to
increase market liquidity and enhance reliability. NERC's Market
Committee directed the LTATF efforts and the LTATF also coordinated its
efforts with representatives from the North American Energy Standards
Board (NAESB). The LTATF Report builds upon NERC's ``Version 0''
reliability standards, which the Commission incorporated into its
Policy Statement on Matters Related to Bulk Power System Reliability in
February 2005.\16\ The Version 0 reliability standards attempt to state
reliability goals clearly and provide a means by which to measure the
progress toward their attainment. The Commission's Supplement to the
Policy Statement makes clear that the term Good Utility Practice as
used in the open access transmission tariff (OATT) includes compliance
with NERC's Version 0 reliability standards.\17\
14. The LTATF Report outlines existing ATC practices in the Eastern
Interconnection and the WECC. It also proposes a method of exchanging
AFC/ATC data between entities and summarizes the minimum requirements
of modeling techniques to facilitate proper calculation and
coordination of AFC/ATC.
15. The LTATF Report details three groups of issues: (1)
Communication and coordination of AFC/ATC; (2) calculation process for
AFC/ATC; and (3) consistency between planning criteria and the
attributes of AFC/ATC calculations (over both planning and operating
horizons).
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\16\ Supplement to Policy Statement on Matters Related to Bulk
Power System Reliability, 110 FERC ] 61,096 (2005) (Supplement); see
Policy Statement on Matters Related to Bulk Power System
Reliability, 107 FERC & 61,052 (Policy Statement), clarified, 108
FERC ] 61,288 (2004).
\17\ Supplement at P 23. Version 0 Standards MOD 001-0 through
009-0 are specifically relevant here.
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Communication and Coordination of AFC/ATC--Respecting Third Party
Constraints
16. The objective of AFC/ATC coordination is to ensure that
neighboring entities exchange relevant information to facilitate: (a) A
reasonable representation of external entities for modeling purposes;
(b) the ability of each calculator \18\ to adequately represent the
values of flowgates on third party transmission systems; and (c) the
ability of each calculator to translate data from neighboring entities
and make meaningful use of the data in its calculations.
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\18\ The calculator prepares and updates ATC values for the
transmission provider.
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17. The LTATF documented the existing coordination processes for
the major regions in the Eastern Interconnection and the WECC. The
report proposes a method of exchanging AFC/ATC data between entities
and provides the minimum requirements for flowgate exchange and
modeling techniques needed to ensure proper calculation and
coordination of transfer capability.
Calculation Process for AFC/ATC
18. The LTATF agreed that transmission service providers need to
provide better documentation and greater transparency for their AFC/ATC
calculation processes. The LTATF Report contains a number of
recommendations to achieve more consistency among AFC/ATC calculations.
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19. The LTATF proposed a Standard Authorization Request (SAR) that
contains recommendations to achieve more consistency among AFC/ATC
calculations. The SAR would change the existing modeling standard(s) by
adding a requirement for transmission providers to coordinate the
calculation of ATC and incorporate specific reliability practices into
the ATC calculation and coordination methodologies.\19\
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\19\ LTATF Report, Attachment A, SAR-1.
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20. The LTATF found that the way in which various regions calculate
and use ATC, TTC, TRM and CBM varies widely.\20\ As the LTATF Report
explains, some transmission providers first calculate TTC, and then
derive ATC. Others first calculate ATC, and then derive TTC. Some
transmission providers first calculate AFC, and then derive ATC. Some
only calculate TTC. Some transmission providers use CBM; some do not
use CBM. The scope of CBM varies by footprint. Nearly all transmission
providers use TRM.\21\
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\20\ LTATF Report at page 3.
\21\ Id. at page 2. The LTATF reviewed ATC methodologies and
found that the numerous ATC calculators in the Midwest have been
replaced by the Midwest Independent Transmission System Operator and
the PJM Interconnection, LLC. The LTATF found 50 to 60 ATC
calculators nationwide, with most of those in the West (30 to 40).
Id. at page 3.
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21. The LTATF noted that consistency is important in the
calculation of CBM and TRM and recommended revising applicable
standards. The LTATF proposed a SAR to modify the current methodology
for calculating CBM and TRM.\22\
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\22\ Id. at Attachment B, SAR-1.
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22. The LTATF also used the LTATF Report and recommendations to
develop a proposed NAESB business practice standard. The LTATF Report
proposes that a single business practice standard be developed related
to both: (a) The processing and evaluation of transmission service
requests which use TTC/ATC/AFC and CBM/TRM; and (b) the processing and
evaluation of requests to schedule against approved transmission
service reservations.\23\
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\23\ Id. at Attachment C, page 2.
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Consistency Between Planning Criteria and the Attributes of the AFC/ATC
Calculations (Over Both Planning and Operating Horizons)
23. The LTATF emphasized that the assumptions used in the
calculation of AFC/ATC and CBM/TRM should be consistent with those used
in the planning and operating horizons. The LTATF noted that
transmission service providers should document these calculations and
make them transparent to all who use the transmission network.\24\
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\24\ Id. at page 3.
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24. The LTATF suggested that transmission providers ensure
consistency between their ATC calculations and their internal planning
processes. For example, the LTATF recommended that both the internal
planning processes and the ATC calculations reflect the same
counterflows and the same components of TRM. Discrepancies between the
internal planning processes and ATC calculations can result in
inaccurate calculations of transmission available to the market.\25\
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\25\ Id. at, Appendix E, page 2.
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Discussion
25. As noted above, problems in the way AFC and ATC are calculated
can create and have created obstacles to ensuring that the provision of
interstate transmission service is not unduly discriminatory or
preferential. The Commission believes that standardizing the way AFC
and ATC are calculated will help mitigate this potential, and enhance
system performance.
26. The LTATF Report contains proposals that appear to go a long
way toward refining and standardizing these calculations. By developing
a business practice standard and revisions related to reliability
standards, the LTATF Report would also take such calculations beyond
NERC's Version 0 reliability standards.
27. NERC also has long encouraged regions to promote a common
methodology for determining TRM and CBM.\26\ Appendix C to the LTATF
Report \27\ recommends that the regions adopt written regional
methodologies for calculating CBM and TRM. The LTATF Report also sets
forth areas in which CBM and TRM standards could be more specific. The
Commission requests comments on these recommendations and whether they
go far enough in promoting a common TRM and CBM methodology within each
region. The Commission also invites comments on whether there should be
common TRM and CBM methodologies among regions.
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\26\ See North American Electric Reliability Council,
Transmission Capability Margins and Their Use in ATC Determination 3
(1999).
\27\ Appendix C is entitled: Review of Current NERC Standards on
CBM and TRM.
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28. More specifically, the Commission seeks industry comment on:
(a) The definitions of AFC, ATC, CBM and TRM used in this order; (b)
the advisability of revising and standardizing AFC, ATC, TRM and CBM
values; (c) the advisability of developing interconnection-wide
standards for the Eastern Interconnection and the WECC; (d) the
contents of the LTATF Report; and (e) the most expeditious way to
obtain industry-wide standards for ATC calculations.
29. While the LTATF Report is a start, the Commission recognizes
that more work is needed before there can be industry-standard AFC and
ATC calculations.
The Commission notes that the LTATF coordinated its efforts with
NAESB and applauds NERC's efforts to work with NAESB in developing
comprehensive business practice and reliability standards. The
Commission urges that these efforts continue.
Comment Procedures
30. The Commission invites interested persons to submit comments on
these matters and any related matters or alternative proposals that
commenters may wish to discuss. Comments are due August 15, 2005.
Comments must refer to Docket No. RM05-17-000, and must include the
commenter's name, the organization they represent, if applicable, and
their address.
31. Comments may be filed electronically via the eFiling link on
the Commission's Web site at http://www.ferc.gov. The Commission
accepts most standard word processing formats and commenters may attach
additional files with supporting information in certain other file
formats. Commenters filing electronically do not need to make a paper
filing. Commenters that are not able to file comments electronically
must send an original and 14 copies of their comments to: The Federal
Energy Regulatory Commission, Office of the Secretary, 888 First Street
NE., Washington, DC, 20426.
32. 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 commenting on this
proposal are not required to serve copies of their comments on other
commenters.
Document Availability
33. 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 Commission's Home Page (http://www.ferc.gov) and in
the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. eastern time) at 888 First Street, NE., Room 2A,
Washington DC 20426.
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34. From the Commission's Home Page on the Internet, this
information is available in its eLibrary. The full text of this
document is available in the eLibrary both in PDF and Microsoft Word
format for viewing, printing, and/or downloading. To access this
document in eLibrary, type the docket number of this document,
excluding the last three digits, in the docket number field.
35. User assistance is available for eLibrary and the Commission's
Web site during normal business hours. For assistance contact FERC
Online Support at FERCOnlineSupport@ferc.gov or toll-free at (866)208-
3676, or for TTY, contact (202) 502-8659. E-Mail the Public Reference
Room at public.referenceroom@ferc.gov or (202) 502-8371.
By direction of the Commission.
Linda Mitry,
Deputy Secretary.
[FR Doc. 05-11530 Filed 6-13-05; 8:45 am]
BILLING CODE 6717-01-J