Ancillary Services and Required Tariff Provisions

In Order No. 697, the Commission stated that there are two standard "required" provisions that each seller must include in its market-based rate tariff: a provision requiring compliance with the Commission's regulations, and a provision identifying any limitations and exemptions regarding the seller's market-based rate authority (Order No. 697, FERC Stats. & Regs. ¶ 31,252, at P 915-916). In Order No. 697-A, the Commission stated that there would also be a third required provision listing the sellers category in each region (Order No. 697-A, FERC Stats. & Regs. ¶ 31,268, at P 391). Additionally, each tariff must be submitted through the eTariff system in compliance with Order No. 714.

Specifically, the tariff must include the following without modification:

Compliance with Commission Regulations: Seller shall comply with the provisions of 18 CFR Part 35, Subpart H, as applicable, and with any conditions the Commission imposes in its orders concerning seller's market-based rate authority, including orders in which the Commission authorizes seller to engage in affiliate sales under this tariff or otherwise restricts or limits the seller's market-based rate authority. Failure to comply with the applicable provisions of 18 CFR Part 35, Subpart H, and with any orders of the Commission concerning seller's market-based rate authority, will constitute a violation of this tariff.

Seller Category: Seller is a [insert Category 1 or Category 2] seller [insert specific regions or “in all regions”], as defined in 18 CFR 35.36(a).

The Commission also requires that a seller list any and all limitations (including markets where seller does not have market-based rate authority) on its market-based rate authority and any and all exemptions from or waivers granted of Commission regulations and include relevant cites to Commission orders in a Limitations and Exemptions Regarding Market-Based Rate Authority tariff provision. Commission orders should be cited in one of the following ways: Cal. Contract Power., 191 FERC ¶ 61,xxx, at P 23 (2002), or WWW Corp., Docket No. ER03-xxxx-000, at 2 (Apr. 12, 2003) (unpublished letter order). If the seller has no limitations, exemptions, or waivers regarding its market-based rate authority, the seller must state "none" for this provision.

The Commission also adopted a set of standard provisions (commonly referred to as "applicable provisions") that must be included in a seller's market-based rate tariff to the extent that the services are offered by the seller. The tariff must include all of the following provisions that are applicable without modification (Order No. 697, FERC Stats. & Regs. ¶ 31,252, at P 917-919).

Mitigated Sales: Sales of energy and capacity are permissible under this tariff in all balancing authority areas where the Seller has been granted market-based rate authority. Sales of energy and capacity under this tariff are also permissible at the metered boundary between the Seller's mitigated balancing authority area and a balancing authority area where the Seller has been granted market-based rate authority provided: (i) legal title of the power sold transfers at the metered boundary of the balancing authority area where the seller has market-based rate authority; and (ii) if the Seller sells at the metered boundary of a mitigated balancing authority area at market-based rates, then neither it nor its affiliates can sell into that mitigated balancing authority area from the outside. Seller must retain, for a period of five years from the date of the sale, all data and information related to the sale that demonstrates compliance with items (i) and (ii) above.

Ancillary Services: (Include All Services the Seller Is Offering)

PJM: Seller offers regulation and frequency response service, energy imbalance service, and operating reserve service (which includes spinning, 10-minute, and 30-minute reserves) for sale into the market administered by PJM Interconnection, L.L.C. ("PJM") and, where the PJM Open Access Transmission Tariff permits, the self-supply of these services to purchasers for a bilateral sale that is used to satisfy the ancillary services requirements of the PJM Office of Interconnection.

New York: Seller offers regulation and frequency response service, and operating reserve service (which include 10-minute non-synchronous, 30-minute operating reserves, 10-minute spinning reserves, and 10-minute non-spinning reserves) for sale to purchasers in the market administered by the New York Independent System Operator, Inc.

New England: Seller offers regulation and frequency response service (automatic generator control), operating reserve service (which includes 10-minute spinning reserve, 10-minute non-spinning reserve, and 30-minute operating reserve service) to purchasers within the markets administered by the ISO New England, Inc.

California: Seller offers regulation service, spinning reserve service, and non-spinning reserve service to the California Independent System Operator Corporation ("CAISO") and to others that are self-supplying ancillary services to the CAISO.

MISO: Seller offers regulation service and operating reserve service (which include 10-minute spinning reserve and 10-minute supplemental reserve) for sale to the Midwest Independent Transmission System Operator, Inc. (MISO) and to others that are self-supplying ancillary services to MISO.

Ancillary Services - Third Party Provider
Third-party ancillary services: Seller Offers [include all of the following that the seller is offering: Regulation Service, Energy Imbalance Service, Spinning Reserves, and Supplemental Reserves]. Sales will not include the following: (1) sales to an RTO or an ISO, i.e., where that entity has no ability to self-supply ancillary services but instead depends on third parties; (2) sales to a traditional, franchised public utility affiliated with the third-party supplier, or sales where the underlying transmission service is on the system of the public utility affiliated with the third-party supplier; and (3) sales to a public utility that is purchasing ancillary services to satisfy its own open access transmission tariff requirements to offer ancillary services to its own customers.