02-22026. Conference on Supply Margin Assessment, AEP Power Marketing, Inc., AEP Service Corporation, CSW Power Marketing, Inc., CSW Energy Services, Inc., and Central and South West Services, Inc., Entergy Services, Inc., Southern Company Energy ...

August 23, 2002.

On November 20, 2001,^[1] the Commission announced a new market power screen for generation, the Supply Margin Assessment (SMA), to be applied to market-based rate applications on an interim basis pending a generic review of new methods for analyzing market power and established mitigation measures applicable to entities that fail the SMA screen. In addition, in a Notice Delaying Effective Date of Mitigation and Announcing Technical Conference, issued on December 20, 2001 (December 20 Notice), the Commission deferred the date by which the companies in the above-captioned proceedings or any other public utilities must implement the mitigation for spot market energy sales set forth in the November 20 Order, and announced its intention to hold a technical conference open to all interested persons, not only parties in the above-captioned dockets.

Following issuance of the November 20 Order, the parties to the above-captioned proceedings as well as a number of other entities filed comments and/or requests for rehearing. Some commenters generally supported the SMA as an interim screen. Several filed in opposition to the SMA screen as a measure of market power. Some commenters argue that the Commission committed procedural error by replacing the hub-and-spoke analysis with the interim SMA through case-by-case adjudication, rather than through formal notice-and-comment rulemaking. On the merits, commenters protest, among other things, that the SMA is ill-suited for load-serving entities with capacity committed to serve native load, and that the test should look at uncommitted capacity and should serve only as a screen rather than a definitive analysis for granting market-based rate authority. Commenters also raise substantive and procedural arguments against the mitigation measures established in the November 20 Order, arguing that the mitigation measures are vague, unworkable and poorly tailored. Commenters also address the exemption from the SMA for sales into an RTO/ISO with Commission-approved market monitoring and mitigation. Some commenters oppose the exemption while others suggest the exemption should be expanded to include non-California portions of the WSCC and any market in which participants agree to be bound by an appropriate Commission-approved market monitoring and mitigation plan.

Consistent with our announcement that we would hold a technical conference open to all interested persons, not only parties in the above-captioned dockets, we are hereby establishing a proceeding, Docket No. PL02-8-000, Conference on Supply Margin Assessment Screen, to provide an opportunity for all interested persons to submit comments. In preparation for the technical conference (the date and time of which will be announced in a subsequent notice), the Commission invites all interested persons to submit written comments regarding the SMA screen and related mitigation measures. All comments should include an executive summary; the summary shall not exceed five pages. To conserve time and avoid unnecessary expense, persons with common interests or views are encouraged to submit joint comments. All written comments should be submitted within 60 days from the date of this order and will be placed in the Commission's public files. Comments will be available for inspection at the Commission's Public Reference Room, 888 First Street, NE., Washington DC, 20426, during regular business hours.

Such written comments should be submitted in Docket No. PL02-8-000. A technical conference to discuss the SMA and related mitigation measures will be scheduled on a date to be determined. All future actions with respect to the technical conference will also be taken under Docket No. PL02-8-000.

Filing Requirements for Paper and Electronic Filings

Comments, papers, or other documents related to this proceeding may be filed in paper format or electronically. However, the Commission strongly encourages electronic filings. Those filing electronically do not need to make a paper filing.

For paper filings, the original and 14 copies of the comments should be submitted to the Office of the Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 and should refer to Docket No. PL02-8-000

Documents filed electronically via the Internet must be prepared in WordPerfect, MS Word, Portable Document Format, or ASCII format. To file the document, access the Commission's website at www.ferc.gov, click on “E-Filing” and then follow the instructions for each screen. First time users will have to establish a user name and password. The Commission will send an automatic acknowledgment to the sender's E-mail address upon receipt of comments. User assistance for electronic filing is available at 202-502-8258 or by E-mail to [e-mail]. Comments should not be submitted to the E-mail address.

All comments will be placed in the Commission's public files and will be available for inspection in the Commission's Public Reference Room at 888 First Street, NE., Washington, DC 20426, during regular business hours. These comments will be available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website at http://www.ferc.gov using the “FERRIS” link. Enter the docket number excluding the last three digits in the docket number field to access the document. For Assistance, call [phone] or for TTY, [phone].

Linwood A. Watson, Jr.,

Deputy Secretary.

Footnotes

1.  AEP Power Marketing, Inc., et al., 97 FERC ¶ 61,219 at 61,969 (2001), reh'g pending (November 20 Order).