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Commission Information Collection Activities (FERC-919); Comment Request; Submitted for OMB Review

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Information about this document as published in the Federal Register.

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Start Preamble November 12, 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 collection described below to the Office of Management and Budget (OMB) for review and renewal. 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 (75FR 41840, 07/19/2010) requesting public comments on renewing this information collection. FERC received one comment on the FERC-919 from Edison Electric Institute (EEI) and has made this notation in its submission to OMB.

DATES:

Further comments on this collection of information are due by December 22, 2010.

ADDRESSES:

Address further comments on this collection 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 oira__submission@omb.eop.gov and include OMB Control Number 1902-0234 for 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. IC10-919-001. 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.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 No. IC10-919-001.

Users interested in receiving automatic notification of activity in FERC Docket Number IC10-919 may do so through eSubscription at http://www.ferc.gov/​docs-filing/​esubscription.asp. All comments may be viewed, printed or downloaded remotely via the Internet through FERC's homepage using the “eLibrary” link. For user assistance, contact ferconlinesupport@ferc.gov or toll-free at (866) 208-3676, or for TTY, contact (202) 502-8659.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Ellen Brown may be reached by e-mail at DataClearance@FERC.gov, by telephone at (202) 502-8663, and by fax at (202) 273-0873.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

The Commission is responding to comments on its request for a three-year extension of the information collected under FERC-919 (OMB Control No. 1902-0234) “Market Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities.” Order No. 697 [1] was issued by the Commission on June 21, 2007 to modify Subpart H to 18 Code of Federal Regulations (CFR) part 35, governing market-based authorization. In Order No. 697, the Commission revised and codified its standards for obtaining and retaining market-based rates for public utilities. Order No. 697 also made minor adjustments to the change in status filing requirements adopted in Order No. 652.[2] It added a requirement to include appendices of generation and transmission assets in the form provided in Appendix B of Order No. 697 when reporting a change in status regarding a change that impacts the pertinent assets held by a seller or its affiliates with market-based rate authorization.

The market power analyses required by Order No. 697 help to inform the Commission as to whether an entity seeking market-based rate authority lacks market power, and whether rates charged by that entity will be just and reasonable. The updated market power analyses allow the Commission to monitor changes in a seller's market presence or potential abuses of market power. The use of the Order No. 697 screens and reviews for market power for all companies seeking authority for market-based rates and those who have been charging market based rates results in a consistent authorization and review process. It provides regulatory certainty while ensuring the Commission meets Start Printed Page 71098its statutory requirements as mandated by the Federal Power Act (FPA) sections 205 and 206.

For more detailed background information on the Commission's MBR program and polices as they relate to this Information Collection Review (ICR), see the public notice issued July 13, 2010 under Docket No. IC10-919-000 at http://elibrary.ferc.gov/​idmws/​File_​list.asp?​document_​id=​13831765.

Public Comment and FERC Response. The Commission received comments from EEI in response to the previously mentioned July 2010 public notice on this ICR. No other comments were filed. A summary of the comments by EEI regarding FERC-919 reporting requirements and the Commission's response, including proposed changes to the burden estimates of the FERC-919 requirements, are provided below. For documents related to this ICR, see http://www.reginfo.gov/​public/​do/​PRAMain, scroll to “Currently under Review,” key in “Federal Energy Regulatory Commission” and scroll to 1902-0234 “Market Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities.”

Public Comment: Triennial Reviews. EEI asserts the ICR's burden estimate for the triennial review filings appears to be too low. Based on research and historical activity, FERC concluded 74 triennial market power analyses in category 2[3] were filed annually. FERC estimated that it took an average of 40 hours to prepare each of these. EEI states that “several member companies” take 400 to 720 hours or more of company and consultant time to prepare the triennial review applications. EEI states these companies reported to them that preparation of the triennial review entailed:

  • 120 to 160 hours for internal engineering analyses, including calculation of simultaneous transmission import limits;
  • 150 to 160 hours for internal legal and compliance analyses; and
  • 110 to 450 hours for outside consultant market-power and legal analyses, including obtaining data pertaining to loads, generation resources, planned outages, remote generation, and power purchase arrangements in broad first and second tier balancing authority areas.

EEI states there is additional time devoted to regional coordination related to triennial review preparation.

Moreover, EEI asserts that FERC's total estimated annual cost burden for triennial review applications is too low. In its 60-day notice, FERC estimated the total average annual cost burden for respondents filing the data required in the FERC-919 is $2,801,891. This resulted from using an average cost estimate of $137,874. This average cost was based on salaries for internal professional and clerical support, as well as direct and indirect overhead costs. EEI argues that this average cost is not an appropriate figure to use because the vast majority of the work done on triennial review applications is performed by highly paid professionals. They state that outside legal, engineering, and economic expertise costs far more than the estimate included in the July 2010 notice for this ICR.

EEI comments that the Commission's burden estimate for triennial review applications may be low by a factor of 10 or more.

FERC Response. According to EEI comments, it is the association of the nation's shareholder-owned electric utilities, international affiliates, and industry associates worldwide. Its members represent approximately 70 percent of the U.S. electric power industry and serve 95 percent of the ultimate customers in the shareholder-owned segment of the industry. EEI members include the majority of the public utilities that are subject to the Commission's rate jurisdiction under Federal Power Act section 205 and, therefore, must submit MBR applications and change-in-status reports to obtain and to retain MBR authorizations.

In response to the EEI statement that “several EEI member companies” report a higher number of hours for preparing triennial reviews than FERC estimated in its ICR, FERC acknowledges that large transmission-owning utilities with market-based rate authority have to undertake more complex analyses in their triennial reviews than smaller companies who do not own transmission. However, there are significantly fewer entities that prepare complex analyses for their triennial reviews than there are small energy businesses that prepare the triennial reviews. FERC records show in September 2010 there were 1,590 organizations with authority to charge market-based rates. According to the Energy Information Administration's most recent count from 2009, there are 201 investor owned utilities (generally larger than other respondents). These numbers give an order of magnitude as to how many more small sellers there are than big sellers. The filings of these smaller companies related to the activities of this ICR are far simpler and require significantly fewer resources and time to complete. It is this wide variation in the amount of effort required to prepare triennial reviews that led the Commission to conclude that basing its estimate on an average made the reporting burden in the July 2010 Notice as accurate as possible.

Nevertheless, in consideration of EEI's concerns, FERC acknowledges in this Notice that the complexity characteristic of triennial reviews prepared by transmission-owning utilities with market-based rate authority typically approaches what is done in the initial market power analysis where the utility first sought market-based rate authorization. FERC also recognizes that the complex analysis of triennial reviews for transmission-owning utilities results from the work of a diverse set of professions including consultant economists, lawyers, and electrical engineers. The costs of engaging these professionals may be somewhat higher than the estimate included in the July 2010 Notice of this ICR.

As a result of the foregoing, FERC has increased the estimated average hours per response for triennial review applications from 40 to 250—the same amount of time FERC estimates it takes to prepare a market power analysis for a new market-based rate application. The Commission has also increased the average annual salary figure associated with completing market power analysis in new applications for market-based rates as well as completing triennial reviews from $137,874 to $166,602. Even though EEI comments do not address the costs associated with initial applications for MBRs, FERC will use the revised $166,602 annual salary rate for triennials as the average annual salary amount associated with its estimates for initial MBR filings. The latter is an average, including benefits and bonuses, of the salaries for a mid-level economist, lawyer, and electrical engineer according to Salary.com data. (See http://salary.com).

Public Comment: Change in status. EEI states that the ICR's burden estimate for change in status filings appears to be Start Printed Page 71099too low. They argue that each change in status filing is unique and must be developed to fit specific circumstances. They state that FERC regulations require updated market-power analyses to accompany certain change in status filings, for example, any time there is a cumulative increase in ownership or control of 100 MW or more of generation capacity in a market. EEI states that the burden in such cases potentially is comparable to the burden of performing the market-power analysis portion of the triennial reviews. EEI asserts that the burden of complying is far higher than FERC's estimated one hour per report. Even in cases where a full market-power analysis is not required to be filed, EEI states that some analysis has to be done to determine whether such an analysis should be included in the filing. Also, beyond drafting and submitting the change in status filing, EEI notes in its comments that regulatory staff must constantly monitor business activities, and must train business unit staff to inform them of changes which may lead to a required change in status filing.

FERC Response. As noted above, the Commission directed the filing of changes in status in Order No. 652. In that order, the Commission found the ongoing burden associated with change in status filings to be de minimis.[4] As a result of that determination, the Commission did not attribute a burden estimate to this activity at that time; therefore, no authorization from OMB was needed for that data collection. In examining various aspects of it market-based rate program in Order No. 697, FERC compiled all market-based rate data requirements into this ICR, the FERC-919. Although the consolidation of market-based rate data requirements in the FERC-919 included change in status filings, FERC did not estimate burden hours for the change in status filings based on the assumption they were still a de minimis activity as determined in Order No. 652. In the July Notice for this ICR FERC did, however, estimate that the Appendix B addition to change in status filings would take one hour to complete.

As an initial matter, FERC would like to clarify an apparent misunderstanding regarding whether an updated market power analysis is required to be submitted with a change in status filing. FERC does not, in all instances, require market-based rate sellers to include an updated market power analysis with a change in status filing that involves an increase in ownership or control of 100 MW or more of capacity. The Commission has left it to the market-based rate seller to determine whether a change in status is a material change and to provide adequate support and analysis for that conclusion, including submission of an updated market power analysis if it chooses.[5] However, it is hereby noted that the Commission retains the right to require additional information, including an updated market power analysis where necessary to determine the effect of a seller's change in status on its market-based rate authority.[6]

In response to EEI's comments, FERC reviewed change in status filings made October 21, 2008 to October 20, 2010. To facilitate its analyses, FERC divided change in status filings into two categories based on the complexity and amount of work evident in the filing. Those filings that were voluminous, provided detailed economic and market data, undertook market power analyses and provided substantive information about current operational dynamics were categorized as “major” change in status filings. These filings most commonly included a full market power analysis with significant amount of detail and complexity. Filings that did not include detailed market power analyses but instead relied on simplified assumptions based on previously submitted market power analyses to conclude that the change in status did not reflect a departure from the characteristics the Commission relied upon in granting the seller market-based rate authority were categorized as “minor.” The change in status filings categorized as “minor” were often from a market-based rate seller who simply pointed to a recent market power study for the same market as support for its contention that, given the size of the market and the size of the seller's uncommitted generation capacity, the seller does not have market power in the market; thus, the acquisition has not changed any of the facts upon which the Commission relied in granting the seller market-based rate authority. FERC also noted that sellers sometimes make supplemental filings providing additional information relating to previously submitted change in status. These supplemental filings can similarly be categorized as “major” or “minor.”

FERC assessment and tally of these filings is as follows:

Total Number of Change in Status Filings at FERC: 82

[10-21-2009 to 10-20-2010]

All change in status filingsChange in status (CIS) filingsSupplemental CIS filings
Total filingsInitial CIS filingCIS requiring major workCIS requiring minor workCIS previously filedMajor workMinor work
826295320317
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Total Number of Change in Status Filings at FERC: 78

[10-21-2008 to 10-20-2009]

All change in status filingsChange in status (CIS) filingsSupplemental CIS filings
Total filingsInitial CIS filingCIS requiring major workCIS requiring minor workCIS previously filedMajor workMinor work
787786911

From October 21, 2009 to October 20, 2010, there were a total of 82 change in status filings. Sixty-two of these were initial change in status filings, nine of which were categorized as “major” and 53 of which were categorized as “minor.” The remaining 20 filings were supplements to initial notice of change in status filings submitted by companies to provide additional information regarding a filing they had already made; 3 of these supplemental filings were categorized as “major” and 17 were categorized as “minor.” Between October 21, 2008 to October 20, 2009, there were a total of 78 change in status filings. Seventy-seven were initial change in status filings, eight of which were “major” and 69 of which were categorized as “minor.” One of the 78 filings was a “minor” supplement to an initial change in status.

Based on the EEI's comments and historical data regarding change in status filings, FERC has decided to increase its assessment of the reporting burden hours for change in status filings to 34.75 hours per response, which includes preparation of the associated asset appendices. FERC estimates an average of 80 change in status filings per year [(82 + 78)/2 = 80)]. Of these, it estimates that 10 will be major (250 hours per response) and 70 will be minor (4 hours per response). By taking an average, FERC estimates that the total annual burden for change in status filings is 2,780 hours [(250*10 = 2500) + (70*4 = 280) = 2,780]. FERC estimates an average of 58 respondents per year each filing an average of 1.38 responses (80 filings per year/58 = 1.38 [7] ). Using the above estimates the average burden hours per response is 34.75 (2,780 total hours/80 responses = 34.75).

Action: The Commission is requesting a three-year extension of the FERC-919 reporting requirements, with revised burden and cost estimates based on comments received in response to its July 2010 Notice and as described above. There is no change to the reporting requirements.

Burden Statement: The revised estimated annual burden for triennial market power analysis in category 2 seller updates and the change in status filings are shown below. There are also changes from the July 2010 Notice burden and cost estimates for market power analyses in new applications for market based rates because FERC has revised the average salary estimate for preparing market power analysis. There are no changes to the burden estimates for the quarterly land acquisition reports.

FERC-919Estimated number of respondents annually (1)Average number of responses per respondent (2)Average burden hours per response (3)Total annual burden hours (1) × (2) × (3)
Market power analysis in new applications for market-based rates (required in 18 CFR 35.37(a))155125038,750
Triennial market power analysis in category 2 seller updates (required in 18 CFR 35.37(a))74125018,500
Quarterly land acquisition reports (required in 18 CFR 35.42(d))4014160
Change in Status Filings (required in 18 CFR 35.42(a))581.3834.757 2,780
Total60,190

The total estimated annual cost burden to respondents is $4,814,968 [((38,750 + 18,500 + 2,500 [8] )/2,080 [9] hours per year, times $166,602) + ((280 [10] + 160)/2,080 hours per year, times $137,874) = $4,814,968]. This number uses the average salary rate of $166,602, which includes annual salaries, bonuses and benefits, of a mid-level economist, lawyer, and electrical engineer according to Salary.com data, for the hours required in 18 CFR 35.37(a) for market power analysis in new applications for market-based rates, triennial market power analysis in category 2 seller updates and major change in status filings. It uses the average salary rate for an internal professional of $137,874, based on a FERC estimate, for preparation of the quarterly land acquisition reports and minor change in status filings.

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; Start Printed Page 71101and (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.

Any additional 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.

Start Signature

Kimberly D. Bose,

Secretary.

End Signature End Supplemental Information

Footnotes

1.  Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, Order No. 697, 72 FR 39,904 (Jul. 20, 2007), FERC Stats. & Regs. ¶ 31,252 (2007), clarified, 121 FERC ¶ 61,260 (2007), order on reh'g, Order No. 697-A, 73 FR 25832 (May 7, 2008), FERC Stats. & Regs. ¶ 31,268, Order No. 697-B, 73 FR 79610 (Dec. 30, 2008), FERC Stats. & Regs. ¶ 31,285 (2008), order on reh'g, Order No. 697-C, 74 FR 30924 (June 29, 2009), FERC Stats. & Regs. ¶ 31,291 (2009), order on reh'g, Order No. 697-D, 75 FR 14342 (Mar. 25, 2010), FERC Stats. & Regs. ¶ 31,305 (2010).

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2.  Reporting Requirement for Changes in Status for Public Utilities with Market-Based Rate Authority, Order No. 652, 70 FR 8253 (Feb. 18, 2005), FERC Stats. & Regs. ¶ 31,175, order on reh'g, 111 FERC ¶ 61,413 (2005), FERC Stats. & Regs. ¶ 31,175.

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3.  Category 2 means any sellers not in Category 1. Category 1 Sellers means wholesale power marketers and wholesale power producers that own or control 500 MW or less of generation in aggregate per region; that do not own, operate or control transmission facilities other than limited equipment necessary to connect individual generating facilities to the transmission grid (or have been granted waiver of the requirements of Order No. 888, FERC Stats. & Regs. ¶ 31,036); that are not affiliated with anyone that owns, operates or controls transmission facilities in the same region as the seller's generation assets; that are not affiliated with a franchised public utility in the same region as the seller's generation assets; and that do not raise other vertical market power issues.

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4.  Order No. 652, FERC Stats. & Regs. ¶ 31,175 at P 35 (“the time and effort required to prepare the notice of a change in status—consisting of a transmittal sheet and a brief narrative statement—will be de minimis and will constitute a fraction of that required to submit the [FPA] section 203 application or [FPA] section 205 filing. Furthermore, the information required to comply with the reporting requirement would normally be collected by the market-based rate seller in the ordinary course of preparing the underlying filing.”)

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5.  See Order No. 697-A, FERC Stats. & Regs. ¶ 31,268 at P 504 (“In Order No. 652, the Commission clarified and standardized market-based rate sellers' reporting requirement for changes in status and the Commission considered and rejected the idea that change in status filing include an updated market power analysis. The Commission explained that it is incumbent on an applicant to decide whether a change in status is a material change and that an applicant should provide adequate support and analysis, including an updated market power analysis if it chooses.”) See also Order No. 652, FERC Stats. & Regs. ¶ 31,175 at P 95.

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6.  See Order No. 697-A, FERC Stats. & Regs. ¶ 31,268 at P 505.

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7.  Rounded off due to truncating the average number of responses per respondent to two decimal places.

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8.  Total number of burden hours for major change in status filings. Of the 80 responses per year, 10 are major (10 responses × 250 hours per response = 2500).

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9.  Estimated number of hours an employee works each year.

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10.  Total number of burden hours for minor change in status filings. Of the 80 responses per year, 70 are minor (70 responses × 4 hours per response = 280).

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[FR Doc. 2010-29304 Filed 11-19-10; 8:45 am]

BILLING CODE 6717-01-P