On March 19, 2009, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued its third order on rehearing (“Order No. 890-C”) regarding its open access transmission reform rule, Order No. 890, in order to clarify the calculation of available transfer capability (“ATC”). The Commission issued Order No. 890-C in response to rehearing requests by NorthWestern Corporation (“NorthWestern”) and South Carolina Electric and Gas Co. (“SCE&G”).
Throughout previous rehearing orders, the Commission had ruled that “transmission providers must coordinate and exchange data and assumptions to achieve consistent [ATC] values on either side of a single interface.” However, in its most recent rehearing order, Order No. 890-B, the Commission added that the ATC calculation processes “should produce predictable and sufficiently accurate, consistent, equivalent, and replicable results.” NorthWestern requested rehearing and clarification that the Commission’s decision did not require identical ATC values on either side of an interface in every instance, which NorthWestern feared could lead to negative and unintended results.
The Commission stated in Order No. 890-C that it would not require identical postings of ATC values even though identical ATC values could be produced in some instances at a single interface. Instead, the Commission reiterated that it required adjacent transmission providers to coordinate and exchange information so that both would calculate consistent ATC values. If the adjacent transmission providers had differences in reservation status or if multiple interfaces were present, identical ATC values would not be possible. However, the methodologies used to calculate those values should be consistent for both transmission providers.
The Commission also addressed issues raised by SCE&G that the Commission unreasonably restricted the types of system sales that can be made from network resources without undesignation. However, the Commission disagreed with SCE&G, and affirmed the requirement set forth in Order No. 890-B that network resources used to supply sales of system power to off-system buyers must first be undesignated. The Commission noted that transactions where both the buyer and seller are on the same network are very different from transactions involving a network customer and an off-system buyer. When both parties are on the same network, the host transmission provider is familiar with the parties’ respective operating levels, variable energy costs, load forecasts, and transmission constraints. Since this is not the case during off-system sales, the buyer must identify the points where capacity and energy will be received and delivered. The Commission added that this is the case regardless of the fact that a transmission provider may be able to determine the likely units used to support a power sale.
A copy of Order No. 890-C can be found at http://www.ferc.gov/whats-new/comm-meet/2009/031909/E-3.pdf.