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Proposed Rule

Preventing Undue Discrimination and Preference in Transmission Service

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Start Preamble Start Printed Page 68495 November 15, 2006.

AGENCY:

Federal Energy Regulatory Commission, DOE.

ACTION:

Notice of Request for Supplemental Comments.

SUMMARY:

On May 19, 2006, the Commission issued a Notice of Proposed Rulemaking (NOPR) in this proceeding. Preventing Undue Discrimination and Preference in Transmission Service, 71 FR 32636 (June 6, 2006). In the NOPR, the Commission proposed, inter alia, to modify the redispatch obligations associated with long-term firm point-to-point service and, in addition, sought comments on whether the creation of a conditional firm product would represent a superior approach to address circumstances under which firm transmission service can be provided in most, but not all, of the hours of the request. Based on the comments received in response to the NOPR, the Commission is seeking further comment on the following two topics: the proposal of the Transparent Dispatch Advocates for transmission providers to post redispatch cost information and provide real-time redispatch; and specific questions related to the provision of conditional firm service.

DATES:

Comments are due December 15, 2006.

ADDRESSES:

You may submit comments, identified by Docket Nos. RM05-25-000 and RM05-17-000, by one of the following methods:

  • Agency Web Site: http://www.ferc.gov. Follow the instructions for submitting comments via the eFiling link found in the Comment Procedures section of the preamble of the May 19, 2006 NOPR.
  • Mail: Commenters unable to file comments electronically must mail or hand deliver an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street, NE., Washington, DC, 20426. Please refer to the Comment Procedures section of the preamble of the May 19, 2006 NOPR for additional information on how to file paper comments.
Start Further Info

FOR FURTHER INFORMATION CONTACT:

Daniel Hedberg, Office of Energy Markets and Reliability, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-6243, daniel.hedberg@ferc.gov.

Jennifer Amerkhail, Office of Energy Markets and Reliability, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-8650, jennifer.amerkhail@ferc.gov.

Mason Emnett, Office of the General Counsel—Energy Markets, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-6540, mason.emnett@ferc.gov.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Notice of Request for Supplemental Comments

On May 19, 2006, the Commission issued a Notice of Proposed Rulemaking (NOPR) in this proceeding. Preventing Undue Discrimination and Preference in Transmission Service, 71 FR 32,636 (June 6, 2006), FERC Stats. & Regs. ¶ 32,603 (2006). In the NOPR, the Commission proposed, inter alia, to modify the redispatch obligations associated with long-term firm point-to-point service and, in addition, sought comments on whether the creation of a conditional firm product would represent a superior approach to address circumstances under which firm transmission service can be provided in most, but not all, of the hours of the request. Based on the comments received in response to the NOPR, the Commission is seeking further comment on the following two topics:

1. Transparent Dispatch Advocates (TDA) Proposal

In Reply Comments submitted on September 20, 2006, the TDA submitted a proposal that, among other things, would require transmission providers to: (1) Post the real-time cost estimate of providing redispatch service from their resources at congested locations; (2) accept bids from third parties that choose to offer and are capable of providing redispatch service; and (3) provide real-time redispatch to resolve transmission constraints. In order to provide an opportunity for others to respond to the TDA proposal, the Commission is allowing an additional period to file comments on the proposal generally and, more specifically, the following questions:

  • Is the TDA proposal required to remedy undue discrimination?
  • What are the implementation impediments to requiring greater transparency of redispatch cost information? For example, if long-term point-to-point service is granted based on redispatch of the transmission provider's generation, would it be reasonable to require the transmission provider to post its daily or hourly redispatch cost for the constraint implicated by that request?
  • Are there confidentiality or anticompetitive issues associated with requiring posting of this type of information? Are any concerns alleviated or exacerbated if the transmission provider were required to post the differential in costs between redispatched generators?
  • Would the TDA proposal for the transmission provider to provide real-time redispatch using third party resources require the establishment of limited markets and, if so, what are the costs or benefits of doing so?

2. Conditional Firm Service

In the NOPR, the Commission sought comment on whether a new conditional firm transmission service would provide a better means than redispatch for addressing circumstances in which insufficient transfer capacity exists to grant a long-term point-to-point request. Subsequent to the NOPR, the Commission held a technical conference on October 12, 2006, that addressed, among other things, conditional firm service. In addition, Commission staff has held informal outreach sessions Start Printed Page 68496with industry stakeholders on conditional firm service. During these discussions, certain additional issues regarding conditional firm service have arisen that merit further comment by the industry. The Commission invites comments on the following issues, to the extent supplemental comments add to the record rather than repeat arguments already made:

  • Should conditional firm be offered as an alternative to redispatch or are they complementary services? For example, if redispatch is not available, should the transmission provider nevertheless be required to offer conditional firm service if available?
  • Should conditional firm service be available for all long-term requests (including those of 20-30 years) or should it be offered only as a “bridge” service where the customer agrees to pay for transmission system upgrades and conditional firm service is provided until those relevant upgrades are constructed? For example, for a 20-year request for service, should the transmission provider be required to offer conditional firm service only during the first few years until relevant upgrades are constructed?
  • Do limitations on system modeling present problems in offering conditional firm service over long periods (e.g., 10-30 years)? For example, do standard modeling techniques make it easier to analyze system conditions in the near term (e.g., 1-5 years) than over the long term (e.g., 10-30 years)?
  • If conditional firm service is considered as a “bridge” product, should special rules apply when the necessary upgrades are extremely expensive (e.g., 10 times the embedded cost rate)?
  • If any necessary upgrades produce “lumpy” capacity (e.g., a request for 100 MW of point-to-point service results in upgrades that create 1,000 MW of additional flowgate capacity), how should the lumpy capacity be handled? Should the costs be assigned exclusively to the requesting customer or, alternatively, be shared with other customers? If costs are assigned to the requesting customers, should it obtain rights to the lumpy capacity that can be resold in the marketplace? Alternatively, could a “bridging” application of conditional firm service even out the “lumpiness” of the upgrade requirement by permitting deferral of the upgrade until load growth or new customers are prepared to absorb and help pay for the excess capacity from the upgrade and, if so, how could the transmission provider implement such a mechanism?
  • In responding to a request for conditional firm service, should the transmission provider be required to provide customers with a choice between conditional curtailment based on specified system conditions and the maximum number of hours per year?
  • Should conditional firm service qualify as a network resource when the associated resource is imported by a network customer on an adjacent system?

Commenters are invited to file supplemental comments with the Commission on or before December 15, 2006. Commenters are invited to file joint supplemental comments in lieu of individually-filed comments. The Commission strongly discourages repetition of prior arguments.

Start Signature

By direction of the Commission.

Magalie R. Salas,

Secretary.

End Signature End Supplemental Information

[FR Doc. E6-19998 Filed 11-24-06; 8:45 am]

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