2010-14953. Commission Information Collection Activities (FERC Form No. 580); Request; Submitted for OMB Review June 15, 2010.

AGENCY:

Federal Energy Regulatory Commission.

ACTION:

Notice.

SUMMARY:

In compliance with the requirements of section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507, the Federal Energy Regulatory Commission (Commission or FERC) has submitted the information collections described below to the Office of Management and Budget (OMB) for review of the information collection requirements. Any interested person may file comments directly with OMB and should address a copy of those comments to the Commission as explained below. The Commission issued a Notice in the Federal Register (74 FR 66114, 12/14/2009) requesting public comments. FERC received comments from Edison Electric Institute (EEI), American Electric Power Company (AEP), MidAmerican Energy Company (MidAmerican) and Pacific Gas and Electric Company (PG&E) and has made this notation in its submission to OMB.

DATES:

Comments on the collections of information are due by July 21, 2010.

ADDRESSES:

Address comments on the collections of information to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Federal Energy Regulatory Commission Desk Officer. Comments to OMB should be filed electronically, c/o [e-mail] and include the appropriate OMB Control Number(s) and collection number(s) as a point of reference. The Desk Officer may be reached by telephone at 202-395-4638.

A copy of the comments should also be sent to the Federal Energy Regulatory Commission and should refer to Docket No. IC10-580-001. Comments may be filed either electronically or in paper format. Those persons filing electronically do not need to make a paper filing. Documents filed electronically via the Internet must be prepared in an acceptable filing format and in compliance with the Federal Energy Regulatory Commission submission guidelines. Complete filing instructions and acceptable filing formats are available at http://www.ferc.gov/​help/​submission-guide/​electronic-media.asp. To file the document electronically, access the Commission's Web site and click on Documents & Filing, E-Filing (http://www.ferc.gov/​docs-filing/​efiling.asp), 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 acknowledgement to the sender's e-mail address upon receipt of comments.

For paper filings, the comments should be submitted to the Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426, and should refer to Docket Nos. IC10-580-001.

All comments may be viewed, printed or downloaded remotely via the Internet through FERC's homepage using the “eLibrary” link. For user assistance, contact [e-mail], or call toll-free at [phone], or for TTY, contact [phone].

FOR FURTHER INFORMATION CONTACT:

Michael Miller may be reached by telephone at [phone], by fax at [phone], and by e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

For the purpose of publishing this notice and seeking public comment, FERC requests comments on the following information collections: FERC Form No. 580 “Interrogatory on Fuel and Energy Purchase Practices Pursuant to Section 205(f)(2) of the Federal Power Act”, OMB Control No. 1902-0137.

The Public Utility Regulatory Policies Act (PURPA), enacted November 8, 1978, amended the Federal Power Act (the Act) and directed the Commission to make comprehensive biennial reviews of certain matters related to automatic adjustment clauses in wholesale rate schedules used by public utilities subject to the Commission's jurisdiction. Specifically, the Commission is required to examine whether the clauses effectively provide the incentives for efficient use of resources and also whether the clauses reflect only those costs that are either “subject to periodic fluctuations” or “not susceptible to precise determinations” in rate cases prior to the time the costs are incurred. The Commission is also required to review the practices of each public utility under automatic adjustment clauses “to insure efficient use of resources under such clauses.” ^[1] In response to the PURPA directive, the Commission (in Docket No. IN79-6) established an investigation and began in 1982, to collect every other year, the FERC Form No. 580 “Interrogatory on Fuel and Energy Purchase Practices.”

Public Comments and FERC Responses. A summary of the comments on the major issues filed by the public on the FERC Form No. 580 reporting requirements and FERC's response, including proposed changes to the requirements is provided below. For a more detailed explanation please see the Commission's submission at http://www.reginfo.gov/​public/​do/​PRAMain,, scroll to “Currently under Review”, key in “Federal Energy Regulatory Commission” and scroll to 1902-0137, “Interrogatory on Fuel and Energy Purchase Practices Pursuant to Section 205(f)(2) of the Federal Power Act”, (FERC-580).

Public Disclosure

Fuel and Purchase Policies and Procedures (Question No. 5): Commenters stated the information requested in response to this question should be treated as privileged. If the information is released, potential fuel sellers would be given a road map to a purchaser's buying policies and practices. This public disclosure of bidding and bid evaluation practices could facilitate gaming by potential suppliers. In addition, this disclosure would subject the utility to a greater risk of litigation from fuel suppliers.

FERC Response: The Commission has developed an addendum which sets forth a duplicate question 5 which may be filed as privileged, if the filer should choose to do so. The Commission has also added additional instructions to question 5 for those respondents who choose to label as privileged their response(s) to question 5. (For sub questions within question 5, please see item no. 8 of the FERC submission).

Contract Shortfalls, Buy-downs and Buy-outs (Questions 7 & 8): Commenters indicated that the information requested in these two questions is commercially sensitive if reported when they are identified, instead of when these activities are later settled. If this information is made publicly available, at the earlier identification stage, disclosure of such information would impair a company's bargaining power.

FERC Response: The Commission has reworded the question to request information on shortfalls, buy-downs and buy-outs for aged cases only. Respondents need not submit information for cases that are involved in ongoing litigation.

Prior Submissions

Submission of Previously Filed Information: One commenter requested that the Commission acknowledge data filed in 2008 in the format requested by the Commission for that submission.

FERC Response: The Commission will not enter previously filed data into the new form for two reasons: (1) A significant portion of the data filed two years ago was not entered into the preferred Excel format properly. Some filers did not even use the form and many filers that did, did not properly identify each contract's fuel cost with its corresponding delivery information. The required use of the new electronic format will eliminate these issues; (2) the new Adobe PDF platform is not compatable with the previously preferred Excel platform therefore the data cannot be flowed from one format to the other.

The Commission will however, provide the data filed in 2010 for 2012 filers in the appropriate electronic format thus requiring filers to update information previously filed and eliminating the burden of subsequently entering data that doesn't change from year to year.

Reporting Burden: Several commenters have challenged the Commission's burden estimates and indicated that several questions in particular are burdensome in their preparation.

FERC Response: The Commission is eliminating the requirement to file question 6 information for contracts of one year or less and the question 5 requirement to attach copies of utility fuel procurement policies and practices and related studies. In addition, the Commission has increased its burden figures for the 2010 collection to incorporate an added 450 hours of burden to cover training, initial data entry, understanding of the new electronic filing software, etc., which increased the total burden to 4,150 hours. The total burden will revert back to 3,600 hours for the 2012 collection.

Public Comments That Were Not Incorporated and the FERC Responses

AAC

AAC Definition: EEI challenges the Commission's interpretation of what clauses should be considered “automatic adjustment clauses.” Section 205(f)(4) defines “automatic adjustment clauses” as “a provision of a rate schedule which provides for increases or decreases (or both), without prior hearing, in rates reflecting increases or decreases (or both) in costs incurred by an electric utility.” It goes on to exclude “any rate which takes effect subject to refund and subject to a later determination of the appropriate amount of such rate.” Based on this latter exclusion, EEI argues that formula rate tariffs and agreements that are subject to public true-up proceedings and/or refund should not be included within the scope of Form 580. As such, EEI asserts a simple pass-through component, which does not include a pre-established rate, should not be considered an AAC under the proposed changes.

FERC Response: The Commission disagrees with EEI's reading of Section 205(f)(4). Form 580 is an information collection, issued to support the preparation of the review called for by section 205(f) of the FPA.^[2] That section requires the Commission, at least every two years, to “review, with respect to each public utility, practices under any automatic adjustment clauses of such utility to insure efficient use of resources (including economical purchase and use of fuel and electric energy) under such clauses.” ^[3]

Many rate schedules contain provisions for adjustments to rates based on changes in one or more elements of the cost incurred to provide the service, the adjustments being calculated using procedures that have had prior regulatory approval. Where such adjustments in charges are permitted to occur automatically, without specific regulatory review of each adjustment, the rate schedule provisions are referred to as “automatic adjustment clauses.” Many of the wholesale electric rate schedules filed with the Commission by public utilities contain provisions for automatic adjustment of rates. Current Commission policy permits acceptance of these types of energy cost rates, as well as comprehensive cost-of-service formula rates. These operate to adjust rates automatically. The effect of the clause may be reflected in rates charged by the utility without notification to or filing with the Commission. These types of automatic adjustment clauses correspond to the definition of AAC in PURPA. What was not included in this definition were so-called “periodic review-of-rate clauses,” where the Commission has routinely required filing of changes in rates pursuant to implementation of a review-of-rate clause.

The definition of an automatic adjustment clause incorporated in the Form 580—“a provision of a rate schedule which provides for increases or decreases (or both), without prior hearing, in rates reflecting increases or decreases (or both) in costs incurred”—which EEI complains of, see EEI comments at 5, is consistent with the longstanding understanding of Congress' intent. The fact that a rate may be subject to an after-the-fact public true-up proceeding and/or later refund is a rate that is not subject to prior hearing; a rate that adjusts only subject to after-the-fact review, and not prior review, is thus a rate that can and should be legitimately considered an automatic adjustment clause.

In any event, even if EEI were correct in its interpretation of the definition of automatic adjustment clause, the Commission's authority to collect information on such rates is not limited by section 205(f). Section 304 of the FPA ^[4] provides that “every public utility shall file with the Commission such annual and other periodic or special reports as the Commission may by rules and regulations or order prescribe as necessary or appropriate to assist the Commission in the proper administration of this Act.” That section goes on to provide that the Commission may “require from such persons specific answers to all questions upon which the Commission may need information.” Similarly, section 307 of the FPA ^[5] provides for investigation of “any facts, conditions, practices, or matters which [the Commission] may find necessary or appropriate.” ^[6] Thus, even if EEI's claim as to the definition of automatic adjustment clause were valid, the Commission may still seek the information it deems necessary to meet its requirements under the statute.

Basic AAC Identification (Question No. 2): Commenters requested that the Commission change the wording of the question to make clear that information regarding only AACs active during the reporting period are the subject of the question. In addition, the revised form should not cover non-power tariffs or agreements such as transmission tariffs as it would be discriminatory to require transmission owners that own steam generation to report on their non-power tariffs while not requiring competing transmission owners that do not own steam generation over 50MW to do so.

FERC Response: Question 2 reads: “(a) Provide the following information regarding the AACs your utility had on file with the Commission during calendar years 2008 and 2009 and (b) If any of the Utility's wholesale rate and/or service agreements containing an AAC, that was used during 2008 and/or 2009, was filed with the Commission before January 1, 1990, and attach an electronic copy of it with this filing.”

The Commission is not changing the wording of these two questions because the question clearly states the AAC must have been active during 2008 and/or 2009 for the requirement to be applicable. However, a note will be added for this question in the Desk Reference to reiterate that only tariffs active during the reporting period are the subject of the question.

Confidential Treatment of Information (Question 6): EEI believes that fuel costs should be treated as privileged information. Specifically, delivered fuel characteristics, including the quantity may be competitively sensitive, particularly when reporting at the facility level. EEI also believes that information in response to question no. 6 should be limited to the cost of fuels that are passed through an Automatic Adjustment Clause (AAC). Further, question no. 6 should only ask for data on the cost of primary fuels, not the costs from incidental use or other fuels for auxiliary or start-up purposes.

FERC Response: While the Commission understands the desire of some of the respondents to treat the cost data in the Form 580 as privileged information, it is necessary that this data continue to be publicly reported for two reasons. First, the Commission and other government agencies need this data to carry out their statutory responsibilities (e.g., to ensure that the rates are just and reasonable and customers are protected from undue discrimination). Second, ratepayers need this information to evaluate whether the rates they are being charged are just and reasonable and not unduly discriminatory or preferential.

The delivered fuel characteristics and quantities have been historically treated as public by both FERC and EIA at the plant level. EEI's comments are not sufficient to persuade the Commission to change its historic practice.

Duplicative Reporting: Commenters stated that the Commission should not require reporting of information that is already collected elsewhere, particularly with regard to formula rates and fuel costs. The formula rate information is already collected in a new schedule at page 106 of Form 1. The Commission should also not require the submittal of fuel costs as this information is already submitted on the Energy Information Administration's EIA-923 “Power Plant Operations Report.”

FERC Response: The information collected in the EIA-923 and FERC Form No. 1 is insufficient for the Commission to meet its statutory requirements related to AACs. Both the EIA-923 and FERC Form No. 1 collections are designed for a different purpose than the Form 580. As such, the information in these collections that is similar to the Form 580 information does not have the granularity required for the FPA 205(f) review.

The Form 580 analysis requires the collection of fuel information by contract. In contrast, the EIA-923 form collects fuel information by supplier, and, in some cases, supplier information is further aggregated into line item information for “various suppliers”.

FERC's Form No. 1 p. 106 only collects one data element related to the Form 580: rate schedule or tariff number. This data element will be used to help bridge the FERC Form No. 1 and Form 580 collections so that each can be used to support the analysis of the other. If the FERC Form No. 1 respondent files formula rate input changes at least annually, then an additional common data element is collected: the “docket number.” The identification of the service schedule that contains the AAC and the rate schedule that houses the service schedule are needed for the efficiency and completeness of the Commission's Form 580 analysis. If only the rate schedule number were provided and not the service schedule identification, Commission staff would be required to search the many service schedules filed under each rate schedule to locate the AACs.

Reporting Thresholds: Commenters asked that the Commission only require information on natural gas contracts if such contracts in total account for more than, for example, 20% of the total recoveries under AACs during the period.

FERC Response: If a utility has a specific circumstance under which they think there is a compelling reason not to answer a particular question in the interrogatory, they can apply for a waiver of that particular question. It is not possible for the Commission to anticipate every individual circumstance under which it would not make sense for a particular utility to answer any given question.

Action: The Commission is requesting a three-year extension of the FERC Form No. 580 requirements, with changes to the FERC Form No. 580. The redesign of the FERC Form No. 580 provides for electronic submission in a user-friendly format.

Burden Statement: The table below provides an estimate of the annual public reporting burdens followed by the associated public costs.^[7]

	No. of respondents	Annual No. of responses per respondent	Average burden hours per response	Total annual burden hours
	(1)	(2)	(3)	(1)x(2)x(3)
Respondents with FACs	45	0.5	103[7]	2310
Respondents with AACs but no FACs	125	0.5	20	1250
Respondents with no AACs (no FACs)	40	0.5	2	40
Sub Total				3600
One-time burden of learning new software	45	.5	20	450
Total				4150

The total annual cost to respondents ^[8] is estimated as follows.

FERC Data collection	Total annual burden hours	Estimated hourly cost ($)	Estimated total annual cost to respondents ($)7
	(1)	(2)	(2) X (1)
Form 580	4150	$66.29	$275,104

The reporting burden includes the total time, effort, or financial resources expended to generate, maintain, retain, disclose, or provide the information including: (1) Reviewing instructions; (2) developing, acquiring, installing, and utilizing technology and systems for the purposes of collecting, validating, verifying, processing, maintaining, disclosing and providing information; (3) adjusting the existing ways to comply with any previously applicable instructions and requirements; (4) training personnel to respond to a collection of information; (5) searching data sources; (6) completing and reviewing the collection of information; and (7) transmitting, or otherwise disclosing the information.

The estimate of cost for respondents is based upon salaries for professional and clerical support, as well as direct and indirect overhead costs. Direct costs include all costs directly attributable to providing this information, such as administrative costs and the cost for information technology. Indirect or overhead costs are costs incurred by an organization in support of its mission. These costs apply to activities which benefit the whole organization rather than any one particular function or activity.

Comments are invited on: (1) Whether the proposed collections of information are necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden of the proposed collections of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collections of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

Kimberly D. Bose,

Secretary.

Footnotes

1.  The review requirement is set forth in two paragraphs of Section 208 of PURPA, 49 Stat. 851; 16 U.S.C. 824d.

2.  16 U.S.C. 824d(f) (2006).

3.  16 U.S.C. 824d(f)(b) (2006).

4.  16 U.S.C. 825c (2006).

5.  16 U.S.C. 825f (2006).

6.  Cf. 16 U.S.C. 825j (2006) (section 311 of the Federal Power Act provides for collection of information necessary or appropriate as a basis for recommending legislation).

7.  These figures may not be exact, due to rounding and/or truncating.

8.  Using 2,080 hours/year, the estimated cost for 1 full-time employee is $137,874/year. The estimated hourly cost is $66.29 (or $137,874/2,080).