[Federal Register: October 15, 2003 (Volume 68, Number 199)]
[Notices]
[Page 59391-59393]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15oc03-67]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket Nos. RM02-1-000 and RM02-1-001]
Before Commissioners: Pat Wood, III, Chairman; William L. Massey,
and Nora Mead Brownell: Standardization of Generator Interconnection
Agreements and Procedures; Order Denying Stay and Granting Extension
Issued October 7, 2003.
1. On July 24, 2003, the Commission issued Order No. 2003,
Standardization of Generator Interconnection Agreements and
Procedures.\1\ The final rule will become effective on October 20,
2003. Several parties have requested that the Commission stay the
effective date of this rule pending rehearing and judicial review,
while other parties have requested that the Commission extend the
effective date of the rule or extend the date on which compliance
filings
[[Page 59392]]
are due. This order denies the requests for stay of Order No. 2003, but
grants the requests to extend the effective date of the rule and the
date on which compliance filings are due.
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\1\ Standardization of Generator Interconnection Agreements and
Procedures, Order No. 2003, 68 FR 49,845 (Aug. 19, 2003), FERC
Stats. & Regs. ] 31,146 (2003) (``Final Rule'').
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I. Background
2. On August 25, 2003, the Commission received requests for stay of
all or part of Order No. 2003 from the Alabama Public Service
Commission (Alabama PSC); Mississippi Public Service Commission
(Mississippi PSC); Southern Company Services, Inc. (Southern); and the
National Rural Electric Cooperative Association in a joint filing with
the American Public Power Association (NRECA-APPA).\2\
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\2\ Some movants requested a stay as part of their requests for
rehearing or clarification (Alabama PSC, Mississippi PSC, and NRECA-
APPA). All requests for rehearing and clarification will be
addressed in a subsequent order.
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3. On September 26, 2003, the Commission granted the requests of
the Midwest Independent Transmission System Operator, Inc., the New
York Independent System Operator, Inc., PJM Interconnection, L.L.C.,
the New England Power Pool Participants Committee and ISO New England,
Inc., the New England Transmission Owners (NETO), the California
Independent System Operator Corporation and its Jurisdictional
Participating Transmission Owners and the New York Transmission Owners
(NYTO) (Collectively, ``Independent Movants'') to extend the date on
which compliance filings were due for independent transmission-owning
entities until January 20, 2004.
4. Between September 22, 2003 and October 2, 2003, the Commission
received requests from various non-independent transmission owners,
including Arizona Public Service Company (APS), Cleco Energy, LLC,
Entergy Services (Entergy), NETO, NYTO, Progress Energy, and Southern
Company Services (Southern) (collectively ``Non-Independent Movants'')
requesting that non-independent transmission owners also be granted an
extension of time to comply with Order No. 2003 until January 20, 2004.
II. Request for Stay
A. Arguments Raised
5. Southern argues that the Commission should stay the final rule
provisions on two issues: Network Resource Interconnection Service (NR
Service) and refunds of Network Upgrade costs. Southern asks that the
stay remain in effect until the Commission grants rehearing and removes
the two provisions, or, alternatively, if the Commission denies
rehearing, until Southern is able to seek judicial review of the two
provisions.
6. Southern first argues that NR Service threatens system
reliability because it ignores the need to perform additional studies
if the Generating Facility is ever designated a network resource, and
removes the incentive to site new generation in close proximity to
loads. Southern then argues that NR Service would harm transmission
providers and their customer by eliminating the pricing signals that
ensure that network resources are economical resource options. Also,
the ``contradictory and inherently vague'' NR Service provisions would
be difficult and costly to implement and revise once the Commission
provides the necessary clarification. Furthermore, requiring
transmission providers to adopt the ``inherently vague and
inconsistent'' NR Service provisions is a violation of due process.\3\
Finally, the threat of irreparable harm is imminent because of the
impending effective date of the Final Rule and the fact that Southern
has ``at least two'' Interconnection Customers that could claim they
would be entitled to take NR Service.
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\3\ Citing Satellite Broadcasting Company, Inc. v. FCC, 824 F.2d
1, 3 (DC Cir. 1987) (``Traditional concepts of due process
incorporated into administrative law preclude an agency from
penalizing a private party for violating a rule without first
providing adequate notice of the substance of the rule.''); Jolly v.
Coughlin, 76 F.3d 468, 482 (2d Cir. 1996) (noting that the ``alleged
violation of a constitution right * * * triggers a finding of
irreparable harm'').
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7. Second, Southern argues that a stay should be granted with
respect to (1) the five-year deadline for refund to the Interconnection
Customer of the cost of Network Upgrades, and (2) the requirement that
an Interconnection Customer receive such refunds when transmission
service is taken at locations on the Transmission Provider's system
other than from the generating facility itself. Without a stay, other
transmission customers will be subject to the costs of Network Upgrades
that provide them no benefit. Southern argues that even if it is
successful on appeal, because many generator owners are
undercapitalized special-purpose entities and have had severe financial
problems of late, it is possible that these Interconnection Customers
would not be able to pay such amounts if ordered to do so.
8. Alabama PSC and Mississippi PSC raise arguments similar to those
presented by Southern and request that the Commission stay the
effective date of Order No. 2003 in its entirety until the Commission
acts on their requests for rehearing. And, if the Commission fails to
grant their requests for rehearing, the Commission should stay the
interconnection rule until these matters are addressed by a court. They
argue that retail customers in their states will face irreparable harm
because these customers risk losing their low-cost power, along with
``the resulting negative impacts to their quality of life and
comparative economic advantages for purposes of attracting new
industries.'' Even if they prevail on judicial review, ``it is unlikely
that monetary damages could be awarded at that time to rectify this
harm'' because the Commission lacks the authority to make such awards
and recovery from merchant power entities may not be possible.
9. NRECA-APPA request a stay of the effective date of Order No.
2003 ``because the issues raised in this request are so important to
NRECA-APPA, as well as consumers, state regulators, and many market
participants.''
B. Discussion
10. To assure definiteness and finality in Commission proceedings,
the Commission typically does not stay its orders.\4\ The Commission
may stay its action when ``justice so requires.''\5\ In addressing
motions for stay, the Commission considers: (1) Whether the moving
party will suffer irreparable injury without a stay; (2) whether
issuing the stay will substantially harm other parties; and (3) whether
a stay is in the public interest.\6\ The key element in the inquiry is
irreparable injury to the moving party.\7\ If a party is unable to
demonstrate that it will suffer irreparable harm absent a stay, we need
not examine the other factors.\8\ The standard for showing irreparable
harm is strict, as the DC Circuit has explained:
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\4\ Midland, 56 FERC at 61,630. See also Sea Robin Pipeline Co.,
92 FERC ] 61,217 (2000).
\5\ 5 U.S.C. 705 (2000).
\6\ See e.g., CMS Midland, Inc., 56 FERC ] 61,177 at 61,631
(1991) (Midland), aff'd sub nom. Michigan Municipal Cooperative
Group v. FERC, 990 F.2d 1377 (D.C. Cir. 1993).
\7\ Midland, 56 FERC at 61,631.
\8\ Id.
First, the injury must be both certain and great; it must be
actual and not theoretical. Injunctive relief `will not be granted
against something merely feared as liable to occur at some
indefinite time.' It is also well settled that economic loss does
not, in and of itself, constitute irreparable harm. . . . Implicit
in each of these principles is the further requirement that the
movant substantiate the claim that irreparable injury is `likely' to
occur. Bare allegations of what is likely to occur are of no value
since the court must
[[Page 59393]]
decide whether the harm will in fact occur. The movant must provide
proof that the harm has occurred in the past and is likely to occur
again, or proof indicating that the harm is certain to occur in the
near future.\9\
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\9\ Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.
1985) (Wisconsin Gas) (citations omitted).
Because none of the movants have met the irreparable harm criterion, we
do not discuss the remaining two factors for evaluating a stay request.
11. Regarding the claim that the final rule threatens system
reliability, the movants have not shown that their concerns about the
effects on reliability are more than speculation. Bare allegations
regarding the effect on reliability without a substantive showing that
such harm is likely or certain to occur are insufficient. The
Commission believes that this rule, in fact, will protect
reliability.\10\
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\10\ See e.g., Order No. 2003, FERC Stats. & Regs. ] 31,146 at P
7 (noting that preserving reliability is one of the goals of Order
No. 2003).
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12. Likewise, the claims regarding the economic effects of the
final rule, including Southern's arguments regarding the refund
obligations, do not demonstrate irreparable harm. First, the movants
have not made the necessary showing that the expected economic effects
are more than mere speculation. By failing to show that ``harm has
occurred in the past and is likely to occur again'' or providing
``proof indicating that the harm is certain to occur in the near
future,'' \11\ the movants have not substantiated their claims that the
final rule will result in economic harm. Moreover, even if the movants
could show that these costs are more certain than speculative, they
have not shown that the costs are more than economic losses. In order
for an economic loss to be irreparable harm, it must be unrecoverable
and must threaten economic viability.\12\ Since the parties have not
made this showing, we cannot conclude that the alleged economic losses
constitute irreparable harm.
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\11\ Wisconsin Gas, 758 F.2d at 674.
\12\ See id.
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13. As for the claim that the final rule is vague and ambiguous in
certain respects and violates due process, that is a matter for
rehearing or clarification.
III. Requests for Extension of Compliance and Effective Date
A. Arguments Raised
14. The Non-Independent Movants request that the Commission allow
non-independent entities until January 20, 2004 to make their
compliance filings. The Non-Independent Movants argue that transmission
providers need the additional time to assimilate the provisions of
Order No. 2003 into their OATTs and to ensure proper implementation of
Order No. 2003's provisions. Additionally, several suggest that
granting an extension of the filing date until after the Commission
rules on the various pending requests for rehearing would make it
unnecessary for them to have to make more than one compliance filing if
the Commission grants rehearing.
15. Additionally, NYTO and NETO request that transmission providers
belonging to RTOs and ISOs (as distinct from the RTOs or ISOs
themselves) be granted an extension until January 20, 2004 to allow
them to work with their respective ISOs or RTOs to develop joint
compliance filings. APS also requests that the extension of time be
granted to jurisdictional entities in the Western Interconnection who
jointly own facilities with non-jurisdictional entities, and, like ISOs
and RTOs, employ a collaborative stakeholder process to develop their
OATTs.
16. Southern and Entergy add that they need additional time to
safely implement the Network Resource Interconnection Service portions
of Order No. 2003. Finally, Southern also requests that the Commission
delay the effective date of the rule by 90 days.
B. Discussion
17. In response to the concerns of the Non-Independent Movants
(including APS, NETO, and NYTO), the Commission grants the requests for
extension of the compliance deadline until January 20, 2004. The
Commission intends to act on the pending rehearing requests prior to
that date.
18. In order to avoid confusion, the Commission will also grant the
requests to extend the effective date of the rule until January 20,
2004.
The Commission orders
(A) All requests for stay are hereby denied, as discussed in the
body of this order.
(B) Requests for extension of the compliance deadline and effective
date until January 20, 2004 are granted.
(C) The Secretary is hereby directed to publish this order in the
Federal Register.
By the Commission.
Linda Mitry,
Acting Secretary.
[FR Doc. 03-25970 Filed 10-14-03; 8:45 am]
BILLING CODE 6717-01-P