News 
2006
| Statement: April 20, 2006 | 
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| Docket No: RM05-5-00 | |
Chairman Joseph T. Kelliher's statement on standards
for business practices and communication protocols for public
utilities
“In this Final Rule, the Commission amends its regulations
to incorporate by reference business practice standards and communication
protocols for the electric industry as developed by the Wholesale
Electric Quadrant (WEQ) of the North American Energy Standards
Board (NAESB).
The standards replace, with modifications and improvements, the
Commission's existing business practice standards for Open Access
Same Time Information System (OASIS) transactions and OASIS standards
and communication protocols requirements.
These standards are the culmination of a process initiated by
the Commission in which we asked the electric industry to first
establish a consensus, industry-wide standards organization for
the wholesale electric industry, and for that body to develop
the business practice standards and communication protocols. NAESB
has fulfilled that role and, with industry, has proposed a first
set of standards that we are incorporating by reference into our
regulations with relatively minor modifications.
As the Final Rule states, 'these standards establish a set of
business practice standards and communication protocols that will
enable industry members to achieve efficiencies by streamlining
utility business and transactional processes and communication
procedures.'
Significantly, by adopting these standards and through the development
of the NAESB-consensus approach, the industry will have a formal
ongoing process for reviewing and upgrading the Commission's OASIS
standards as well as adopting other electric industry business
practice standards.
Also of note, the North American Electric Reliability Council
(NERC) and NAESB have worked cooperatively and in coordination
to ensure that the NERC reliability standards and the NAESB standards
are harmonized and eliminate duplication or inconsistencies.
In the Final Rule, we incorporate by reference into our regulations
four business practice standards that complement NERC's Version
0 reliability standards. These four standards include Coordinate
Interchange, Area Control Error, Manual Time Error Correction,
and Inadvertent Interchange Payback.
We commend the resolution by NERC and NAESB as to these four standards,
which raised the question as to whether a standard should be developed
by NERC because of its reliability implications or whether it
is more appropriately a business practice standard to be developed
by NAESB.
It will be important for NAESB and NERC (and soon the ERO) to
continue their dialogue and coordination in developing appropriate
standards under the appropriate auspices. We will rely in large
part on the judgment of these organizations in making such determinations.
This is an area of increasing importance as the Commission reviews
and ultimately approves reliability standards proposed by the
ERO under our new authority pursuant to the Energy Policy Act
of 2005.
Among the more significant calls made by the Commission in response
to requests for rehearing (other than those related to the reliability-related
standards) are:
- We will not incorporate by reference the WEQ Standards of Conduct for Electric Transmission Providers since they duplicate the Commission's regulations; however, NAESB offered to revise its standards to implement the Commission Standards of Conduct, and we look forward to receiving that work product.
- We require each public utility that requested a waiver of any standard in this proceeding to file a request for waiver, which we can decide on a case-by-case basis. In addition, utilities, including ISOs and RTOs, that have existing waivers of OASIS standards will be required to reapply for a new waiver.
- The Commission states in the order that we typically allow recovery in rates of prudently incurred costs to comply with standards such as those promulgated by NAESB, and we will make those determinations on a case-by-case basis.
- We require that NAESB revise its standards concerning rollover rights to be consistent with the Commission's policies on this subject as provided for under the pro forma OATT.
Finally, I want to commend former Chairman Pat Wood for his leadership in this area. The process that resulted in this Final Rule adopting business practice standards and communication protocols for the electric industry began under Chairman Wood in December 2001. I am pleased we are taking the final step today. ”
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