[Federal Register: January 9, 1998 (Volume 63, Number 6)] [Notices] [Page 1453-1454] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr09ja98-63] ----------------------------------------------------------------------- DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. PL98-3-000] Process for Assuring Non-discriminatory Transmission Services as New Reliability Rules are Developed for Using the Transmission System; Notice of Conference January 5, 1998. I The Federal Energy Regulatory Commission (Commission) hereby announces its intention to convene a public conference to discuss what procedures it should follow, in the absence of federal legislation on reliability issues, to address the effect of new reliability standards on jurisdictional electric transmission [[Page 1454]] service. Specifically, the Commission wishes to examine how it should go about ensuring non-discriminatory open access service under Order No. 888 as the power industry adopts new methods of protecting system reliability. This conference, described below, is for the limited purpose of discussing the procedures necessary for the Commission to meet this goal. II The Commission requires all public utilities that own, control or operate facilities used for transmitting electric energy in interstate commerce to provide non-discriminatory transmission service to eligible customers and to take transmission service for their own uses under the same rates, terms and conditions applied to others. Increased competition in wholesale electricity markets has resulted in many new market participants who do not own, control or operate transmission facilities, and has fostered a great increase in the number and variety of wholesale transmission and power sale arrangements, including ancillary services needed to accomplish transmission service. In addition, control over transmission facilities is shifting in some instances from traditional utility owners and operators to a regime of control that includes independent transmission system operators whose primary purpose is to ensure nondiscriminatory operation of transmission facilities. In light of the changes taking place in the electric industry, the North American Electric Reliability Council (NERC) and its regional reliability councils are implementing changes in their rules to maintain transmission system security. These rules apply both to transmission-owning utilities and to the transmission customers of those utilities. Historically, the Commission has followed a ``rule of reason'' approach and not required each contract or practice that affects a jurisdictional service to be on file, even though section 205 of the Federal Power Act may lead to that result. If the new reliability rules become terms and conditions with which customers of Commission-jurisdictional utilities must comply as a predicate to obtaining transmission service, the Commission may need to reassess how it is applying the ``rule of reason.'' If jurisdictional services can be denied or compromised under the new reliability rules, then section 205 appears to require that such rules be included in the transmission tariffs on file with the Commission. The Commission is not proposing in this notice to judge the technical adequacy or appropriateness of any reliability standard. Nor is it proposing in this notice to approve the structure of NERC or the appropriateness of any organization that establishes reliability standards under existing laws and circumstances. Indeed, the Commission's authority to act on such matters is at best unclear. As described in a recent position paper of the task force that is charged with advising the Secretary of Energy on electric system reliability: It is not clear whether the FERC has sufficient statutory authority to enforce NERC rules. The FERC has issued several orders requiring parties to abide by the NERC standards and parties have assented to the requirements. However, the use of FERC's conditioning authority to enforce NERC standards has not yet been challenged. Others question whether the FERC should enforce these rules in light of concerns over NERC's governance and decision- making procedures.\1\ --------------------------------------------------------------------------- \1\ ``Maintaining Bull-Power Reliability Through Use of a Self- Regulating Organization: Position Paper.'' Secretary of Energy Advisory Board, Task Force on Electric-System Reliability (November 6, 1997). --------------------------------------------------------------------------- III The Commission is committed to ensuring that competitive developments in the industry take place in a manner that safeguards the reliability of the nation's electric transmission system. The Commission is equally committed to ensuring that the rules and practices for reliable operation of the grid are compatible with open, non-discriminatory use of transmission systems. The Commission believes that it would be beneficial at this juncture to further explore this matter with interested parties in an informal setting. To that end, we are announcing today our intention to convene a round-table discussion on developing an appropriate procedure or procedures for the Commission to address potentially service- affecting reliability practices in the context of non-discriminatory transmission access. We emphasize that the purpose of the round-table is to discuss procedures and not to discuss the merits of any particular reliability rule, practice or organization. The round-table will take place on February 20, 1998, in Washington, DC. The Commission has identified certain possible procedures and expects that participants will be prepared to discuss these procedures as well as to identify others. One approach might be to prohibit any public utility from imposing new terms or conditions related to reliability on any customer unless and until that utility had first incorporated those terms and conditions into its transmission tariff under an appropriately noticed section 205 filing. An alternative might be to have the appropriate reliability organization (NERC or one of the regional reliability councils) file a request for a declaratory order setting forth proposed changes to its existing reliability rules, so that appropriate notice and opportunity for comment could be given. Once the Commission issued a declaratory order, utilities could then incorporate the results of the declaratory order proceeding in their tariffs through what would amount to a compliance filing. This process could apply to those changes in reliability rules that determine whether a transmission customer obtains or loses transmission service, or it could apply to a larger group of reliability rule changes. Staff will contact industry representatives to develop a broadly representative panel. We expect the panel to have no more than fifteen participants. Persons wishing to be considered for inclusion on the panel should contact: David N. Cook, Office of General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 202-208-0955. Persons wishing to file written comments on possible procedural approaches to these issues should do so by January 30, 1998. The Commission will issue a notice identifying the panel members and giving further details on the round-table discussion in the near future. By direction of the Commission. David P. Boergers, Acting Secretary. [FR Doc. 98-529 Filed 1-8-98; 8:45 am] BILLING CODE 6717-01-M