[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Rules and Regulations]
[Pages 20838-20840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9059]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 358
[Docket No. RM07-1-003; Order No. 717-D]
Standards of Conduct for Transmission Providers
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Order on rehearing and clarification.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) issued
Order No. 717-A to address requests for rehearing and make clearer the
Standards of Conduct as implemented by Order No. 717. The Commission
issued Order No. 717-B to address expedited requests for rehearing and
clarification concerning paragraph 80 of Order No. 717-A and whether an
employee who is not making business decisions about contract non-price
terms and conditions is considered a ``marketing function employee.''
Order No. 717-C addressed requests for rehearing and clarification
concerning Order No. 717-A. This order addresses an additional request
for rehearing and clarification concerning Order No. 717-C.
DATES: Effective Date: This rule will become effective May 16, 2011.
FOR FURTHER INFORMATION CONTACT: Susan Miller, Office of the General
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426. (202) 502-8977.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer,
Philip D. Moeller, John R. Norris, and Cheryl A. LaFleur.
Issued April 8, 2011.
I. Introduction
1. On October 16, 2008, the Commission issued Order No. 717
amending the Standards of Conduct for Transmission Providers (the
Standards of Conduct or the Standards) to make them clearer and to
refocus the rules on the areas where there is the greatest potential
for abuse.\1\ On October 15, 2009, the Commission issued Order No. 717-
A to address requests for rehearing and clarification of Order No. 717,
largely affirming the reforms adopted in Order No. 717.\2\ On November
16, 2009, the Commission issued Order No. 717-B to address expedited
requests for rehearing and clarification concerning paragraph 80 of
Order No. 717-A and whether an employee who is not making business
decisions about contract non-price terms and conditions is considered a
``marketing function employee''.\3\ On April 16, 2010 the
[[Page 20839]]
Commission issued Order No. 717-C to provide additional clarification
concerning matters petitioners raised regarding the Commission's
determinations in Order No. 717-A.\4\ In this order, the Commission
addresses an additional request for rehearing and clarification
concerning Order No. 717-C.
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\1\ Standards of Conduct for Transmission Providers, Order No.
717, 73 FR 63796 (Oct. 27, 2008), FERC Stats. & Regs. ] 31,280
(Order No. 717).
\2\ Standards of Conduct for Transmission Providers, Order No.
717-A, 74 FR 54463 (Oct. 22, 2009), FERC Stats. & Regs. ] 31,297
(Order No. 717-A).
\3\ Standards of Conduct for Transmission Providers, Order No.
717-B, 74 FR 60153 (Nov. 20, 2009), 129 FERC ] 61,123 (2009) (Order
No. 717-B). On October 30, 2009, Edison Electric Institute (EEI)
filed a request for expedited clarification of a single issue
addressed in Order No. 717-A. The Commission determined that it
should address this issue expeditiously even though the time allowed
under the regulations for filing rehearing requests had not yet
expired. For this reason, the Commission issued Order No. 717-B on
November 16, 2009, in which it addressed a single clarification
request of EEI, Western Utilities, Otter Tail and Central Vermont.
All other timely requests for rehearing, i.e. those filed by
November 16, 2009, were addressed in Order No. 717-C.
\4\ Standards of Conduct for Transmission Providers, Order No.
717-C, 75 FR 20909 (Apr. 22, 2010), 131 FERC ] 61,045 (2010) (Order
No. 717-C).
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II. Discussion
2. In paragraph 16 of Order No. 717-C, the Commission clarified
that ``a system impact study performed pursuant to a request for energy
resource interconnection service or network resource interconnection
service is similar to long-range planning and therefore not a
transmission function, because the focus of such a study is to
determine the impact of the proposed interconnection on the safety and
reliability of the transmission provider's transmission system, but
without conveying a right to transmission service''.\5\ As a result,
the Commission concluded that the performance of a system impact study
in the context of evaluating an energy resource interconnection service
and network resource interconnection service is not a transmission
function.
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\5\ Id. P 16.
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3. The Transmission Access Policy Study Group (TAPS) requests
rehearing and clarification of one aspect of Order No. 717-C.
Specifically, TAPS requests that the Commission grant rehearing to hold
that employees who perform system impact studies (or other studies) in
connection with interconnection service requests are transmission
function employees. TAPS argues that the consequence of a finding that
``performance of a system impact study in the context of evaluating an
energy resource interconnection service and network resource
interconnection service is not a transmission function'' is that the
studies may be performed by the Transmission Provider's ``merchant-
function'' personnel.
4. TAPS further argues that the Commission created an inconsistency
with its regulatory text when it clarified in Order No. 717-C that the
performance of a system impact study in the context of evaluating an
energy resource interconnection service and network resource
interconnection service is not a transmission function. Specifically,
TAPS cites 18 CFR 358.3(h), which defines ``transmission functions'' as
``the planning, directing, organizing or carrying out of day-to-day
transmission operations, including the granting and denying of
transmission service requests.'' TAPS then argues that because 18 CFR
358.3(f) defines ``transmission'' as ``the interconnection with
jurisdictional transmission facilities,'' employees who perform studies
that identify upgrades needed for interconnection, or who otherwise
help to determine the terms on which interconnection may occur, perform
a transmission function.
5. Alternatively, TAPS requests that the Commission clarify that
system study information be treated like other planning information,
which the Commission requires transmission providers to make available
on a non-discriminatory basis to all interested transmission customers.
TAPS is concerned that if ``merchant-function'' personnel are permitted
to conduct interconnection-related studies and have access to customer
information, ``merchant-function'' personnel would obtain undue
competitive advantages over any other transmission customer.
6. TAPS further requests clarification of paragraph 17 of Order No.
717-C to make clear that where an employee performs system impact
studies in response to transmission service requests, the employee's
designation as a transmission-function employee does not turn on the
duration of the requested transmission service.
Commission Determination
7. We deny TAPS' request that we classify employees who perform
system impact studies in connection with interconnection service
requests as transmission function employees.\6\ Whether an employee
performing a system impact study is a transmission function employee
depends upon the purpose for which that study is being performed. The
key factor in determining whether the employee is performing a
transmission function in conducting the system impact study is whether
the performance of that study implicates the day-to-day operation of
the transmission system. Thus, an employee performing system impact
studies that do not implicate the day-to-day operations of the
transmission system would not be a transmission function \7\ employee,
even in those instances where the system impact study pertains to
interconnection.
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\6\ In a footnote, TAPS contends that employees who perform
facility studies and feasibility studies in response to requests for
interconnection service should be transmission function employees.
TAPS, Motion for Rehearing at p. 3-4 n.4. TAPS concedes that Order
No. 717-C does not address the performance of these types of
studies. Given that TAPS failed to proffer this argument during
previous stages of the process and that Order No. 717-C does not
address this issue, TAPS cannot raise this argument at this juncture
in the proceeding. See, e.g., PJM Interconnection, LLC, 126 FERC ]
61,030, at P 15 & n.10 (2009) (A request for rehearing of a new
issue is outside the proper scope of the rehearing). See also,
Wholesale Competition in Regions with Organized Electric Markets,
129 FERC ] 61,252, at P 9 & n.18 (2009).
\7\ 18 CFR 358.3(h).
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8. In Order No. 717-C, we found that a system impact study
performed pursuant to a request for energy resource interconnection
service or network resource interconnection service is similar to long-
range planning and therefore not a transmission function because it
does not involve the conveyance of a right to transmission service.
Contrary to the argument raised by TAPS, our focus in reaching this
determination was not based on a distinction between transmission and
interconnection. Our conclusion was based upon our finding that these
types of system impact studies are analogous to transmission long range
planning studies, and that neither type of study implicates day-to-day
transmission operations.\8\ The performance of a system impact study is
not a transmission function so long as the performance of this system
impact study is not carried out as part of day-to-day transmission
operations, including the granting or denying of transmission
service.\9\
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\8\ See Order No. 717-C, 131 FERC ] 61,045 at P 11-17. See also
Order No. 717, FERC Stats. & Regs. ] 31,280 at P 146-147.
\9\ Order No. 717-C, 131 FERC ] 61,045 at P 17.
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9. TAPS is also incorrect that the Commission's clarification in
Order No. 717-C concerning the performance of system impact studies
created an inconsistency with its regulatory text. The definition of
``transmission functions'' includes ``the planning, directing,
organizing or carrying out of day-to-day transmission operations,
including the granting and denying of transmission service
requests.''\10\ ``Transmission'' is defined to include ``the
interconnection with jurisdictional transmission facilities.''\11\
Thus, the definition of transmission functions includes the planning,
directing, organizing or carrying out of day-to-day interconnection
operations with jurisdictional transmission facilities. Because of the
limiting phrase ``day-to-day transmission operations,'' TAPS is
incorrect in its conclusion that ``transmission functions'' always
include
[[Page 20840]]
interconnection-related system impact studies.
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\10\ 18 CFR 358.3(h).
\11\ 18 CFR 358.3(f).
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10. Similarly, we deny TAPS's request that the information from
system impact studies be made available on a non-discriminatory basis
to all interested transmission customers. TAPS erroneously assumes that
the Commission determined that system impact studies (or other studies)
performed in response to interconnection requests are planning
activities that may be conducted by marketing function employees.
Marketing function employees may not perform system impact studies (or
other studies) in response to interconnection requests since the
studies would involve the use and analysis of non-public transmission
information. As we stated in Order No. 717, planning personnel who do
not qualify as marketing function employees may discuss information
with transmission function employees.\12\ However, we reiterated that
the No Conduit Rule applied in this situation, stating that if
transmission employees share transmission function information with
planning personnel, the planning personnel may not pass such
information on to marketing function employees. The clear implication
of these statements is that while planning studies may be conducted by
personnel who are not transmission function employees, marketing
function employees may not participate in the preparation of studies
which involve the use and analysis of non-public transmission
information.\13\
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\12\ Order No. 717, FERC Stats. & Regs ] 31,280 at P 151.
\13\ Order No. 717 specifically recognized that there are
employees who are neither transmission function employees nor
marketing function employees. See, e.g., Order No. 717, FERC Stats.
& Regs. ] 31,280 at P 174 (``Transmission function employees are no
longer barred from interacting with all the employees of a marketing
or energy affiliate (only marketing function employees)'').
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11. We grant TAPS's clarification request that when an employee
performs a system impact study in response to a transmission service
request, that employee is a transmission function employee regardless
of the duration of the requested transmission service. This
clarification is consistent with our previous conclusion that the
designation of an employee as a transmission function employee does not
depend upon the duration of the requested transmission service.\14\
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\14\ See Standards of Conduct for Transmission Providers, Order
No. 717-A, 74 FR 54463 (Oct. 22, 2009), FERC Stats. & Regs. ]
31,297, at P 27 (2009).
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III. Document Availability
12. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
13. 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.
14. User assistance is available for eLibrary and the FERC's
website during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or e-mail at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at
[email protected].
IV. Effective Date
15. Changes to Order No. 717-C adopted in this order on rehearing
and clarification are effective May 16, 2011.
By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. 2011-9059 Filed 4-13-11; 8:45 am]
BILLING CODE 6717-01-P