[Federal Register Volume 63, Number 6 (Friday, January 9, 1998)]
[Notices]
[Pages 1453-1454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-529]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. PL98-3-000]
Process for Assuring Non-discriminatory Transmission Services as
New Reliability Rules are Developed for Using the Transmission System;
Notice of Conference
January 5, 1998.
I
The Federal Energy Regulatory Commission (Commission) hereby
announces its intention to convene a public conference to discuss what
procedures it should follow, in the absence of federal legislation on
reliability issues, to address the effect of new reliability standards
on jurisdictional electric transmission
[[Page 1454]]
service. Specifically, the Commission wishes to examine how it should
go about ensuring non-discriminatory open access service under Order
No. 888 as the power industry adopts new methods of protecting system
reliability. This conference, described below, is for the limited
purpose of discussing the procedures necessary for the Commission to
meet this goal.
II
The Commission requires all public utilities that own, control or
operate facilities used for transmitting electric energy in interstate
commerce to provide non-discriminatory transmission service to eligible
customers and to take transmission service for their own uses under the
same rates, terms and conditions applied to others.
Increased competition in wholesale electricity markets has resulted
in many new market participants who do not own, control or operate
transmission facilities, and has fostered a great increase in the
number and variety of wholesale transmission and power sale
arrangements, including ancillary services needed to accomplish
transmission service. In addition, control over transmission facilities
is shifting in some instances from traditional utility owners and
operators to a regime of control that includes independent transmission
system operators whose primary purpose is to ensure nondiscriminatory
operation of transmission facilities.
In light of the changes taking place in the electric industry, the
North American Electric Reliability Council (NERC) and its regional
reliability councils are implementing changes in their rules to
maintain transmission system security. These rules apply both to
transmission-owning utilities and to the transmission customers of
those utilities. Historically, the Commission has followed a ``rule of
reason'' approach and not required each contract or practice that
affects a jurisdictional service to be on file, even though section 205
of the Federal Power Act may lead to that result. If the new
reliability rules become terms and conditions with which customers of
Commission-jurisdictional utilities must comply as a predicate to
obtaining transmission service, the Commission may need to reassess how
it is applying the ``rule of reason.'' If jurisdictional services can
be denied or compromised under the new reliability rules, then section
205 appears to require that such rules be included in the transmission
tariffs on file with the Commission.
The Commission is not proposing in this notice to judge the
technical adequacy or appropriateness of any reliability standard. Nor
is it proposing in this notice to approve the structure of NERC or the
appropriateness of any organization that establishes reliability
standards under existing laws and circumstances. Indeed, the
Commission's authority to act on such matters is at best unclear. As
described in a recent position paper of the task force that is charged
with advising the Secretary of Energy on electric system reliability:
It is not clear whether the FERC has sufficient statutory
authority to enforce NERC rules. The FERC has issued several orders
requiring parties to abide by the NERC standards and parties have
assented to the requirements. However, the use of FERC's
conditioning authority to enforce NERC standards has not yet been
challenged. Others question whether the FERC should enforce these
rules in light of concerns over NERC's governance and decision-
making procedures.\1\
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\1\ ``Maintaining Bull-Power Reliability Through Use of a Self-
Regulating Organization: Position Paper.'' Secretary of Energy
Advisory Board, Task Force on Electric-System Reliability (November
6, 1997).
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III
The Commission is committed to ensuring that competitive
developments in the industry take place in a manner that safeguards the
reliability of the nation's electric transmission system. The
Commission is equally committed to ensuring that the rules and
practices for reliable operation of the grid are compatible with open,
non-discriminatory use of transmission systems.
The Commission believes that it would be beneficial at this
juncture to further explore this matter with interested parties in an
informal setting. To that end, we are announcing today our intention to
convene a round-table discussion on developing an appropriate procedure
or procedures for the Commission to address potentially service-
affecting reliability practices in the context of non-discriminatory
transmission access. We emphasize that the purpose of the round-table
is to discuss procedures and not to discuss the merits of any
particular reliability rule, practice or organization. The round-table
will take place on February 20, 1998, in Washington, DC.
The Commission has identified certain possible procedures and
expects that participants will be prepared to discuss these procedures
as well as to identify others. One approach might be to prohibit any
public utility from imposing new terms or conditions related to
reliability on any customer unless and until that utility had first
incorporated those terms and conditions into its transmission tariff
under an appropriately noticed section 205 filing. An alternative might
be to have the appropriate reliability organization (NERC or one of the
regional reliability councils) file a request for a declaratory order
setting forth proposed changes to its existing reliability rules, so
that appropriate notice and opportunity for comment could be given.
Once the Commission issued a declaratory order, utilities could then
incorporate the results of the declaratory order proceeding in their
tariffs through what would amount to a compliance filing. This process
could apply to those changes in reliability rules that determine
whether a transmission customer obtains or loses transmission service,
or it could apply to a larger group of reliability rule changes.
Staff will contact industry representatives to develop a broadly
representative panel. We expect the panel to have no more than fifteen
participants. Persons wishing to be considered for inclusion on the
panel should contact: David N. Cook, Office of General Counsel, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426, 202-208-0955.
Persons wishing to file written comments on possible procedural
approaches to these issues should do so by January 30, 1998. The
Commission will issue a notice identifying the panel members and giving
further details on the round-table discussion in the near future.
By direction of the Commission.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-529 Filed 1-8-98; 8:45 am]
BILLING CODE 6717-01-M
