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Long Term Transmission Rights in Markets Operated by Regional Transmission Organizations and Independent System Operators; Notice Inviting Comments on Establishing Long Term Transmission Rights in Markets With Locational Pricing

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Start Preamble May 11, 2005.

The Commission invites all interested persons to file comments addressing establishing long term transmission rights in electricity markets operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).

An important cost of transmission service is the congestion cost that customers incur when, due to the physical limitations of the grid, they are unable to obtain energy from the lowest cost generation resources. In markets with locational pricing, participants can hedge against congestion costs by holding Financial Transmission Rights (FTRs), which are generally allocated to historical users of the grid. Currently, the longest term FTR offered in any of the RTO or ISO markets is one year.

The Commission is aware of interest by some market participants and others to obtain transmission service at a known price for periods longer than one year in markets that use locational pricing. In response, the Commission staff has conducted informal outreach to get informal views on the need for, and issues raised by, establishing long term transmission rights. At this point, the Commission desires to obtain written comments by all interested parties. The Commission is particularly interested in comments that address the following:

  • The need for long term transmission rights and the problems caused by the lack of them. Are such rights needed more by certain types of entities or in markets in certain regions?
  • The impacts of introducing long term rights. What specific impediments or problems must be addressed?
  • The plans of specific RTOs and ISOs to address long term transmission rights.
  • Substantive and procedural options for the Commission to address long term transmission rights.

The Commission is aware that the adequacy of long term transmission rights may be an issue in markets that do not use locational pricing but believes that there are unique issues in markets with locational pricing that are best addressed separately.

A Commission staff document is available online at to assist parties in providing comments, but will not be published in the Federal Register. The staff document provides background on the need for long term transmission rights and the issues that must be addressed in introducing them into markets. The document also provides specific questions to address as well as general background on locational pricing and on FTR allocation methods in the existing RTOs and ISOs.

For further information, contact:

Wilbur Earley, Office of Markets Tariffs and Rates, 202-502-8087,

Udi Helman, Office of Markets Tariffs and Rates, 202-502-8080,

Jeffery Dennis, Office of General Counsel, 202-502-6027,

The Commission encourages electronic submission of comments in lieu of paper using the “eFiling” link at Persons unable to file electronically should submit an original and 14 copies of the comment to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.

All filings in this docket are accessible on-line at, using the “eLibrary” link and will be available for review in the Commission's Public Reference Room in Washington, DC. There is an “eSubscription” link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please e-mail, or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

Comment Date: 5 p.m. eastern time on June 27, 2005.

Start Signature

Linda Mitry,

Deputy Secretary.

End Signature End Preamble

[FR Doc. E5-2488 Filed 5-17-05; 8:45 am]