On November 24, FERC approved six Reliability Standards, which mandate the methods transmission owners must use to calculate Available Transfer Capability (“ATC”).
In Order No. 890, the Commission found that the lack of a consistent and transparent methodology for calculating ATC is a significant problem. Because the calculation of ATC varies greatly depending on the criteria and assumptions used, FERC found that transmission service providers may potentially discriminate against competitors. In Order No. 693, FERC reiterated its concerns and said that the impact on reliability should be considered in any rules requiring consistency in the ATC calculation.
On March 19, 2009, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to approve six Modeling, Data and Analysis (“MOD”) Reliability Standards that would require certain users, owners and operators of the transmission system to develop consistent methodologies for the calculation of ATC. NERC originally submitted such standards to the Commission on August 29, 2008 and November 21, 2008. (See March 27, 2009 edition of the WER ).
In approving the six Reliability Standards proposed in the NOPR, the Commission stated that it believes that requiring industry-wide consistent ATC calculation methodology, certain definitions, data, and modeling assumptions will improve transparency and reduce potential discrimination against competitors. MOD-001-1 – Available Transmission System Capability Reliability Standard requires each transmission owner to select and implement one or more of the three available transfer capability methodologies found in MOD-028-1, MOD-029-1, or MOD-030-2. MOD-008-1 – Transmission Reliability Margin Methodology and MOD-004-1 – Capacity Benefit Margin Methodology set forth the calculation of capacity benefit margin and transmission reliability margin, which are inputs into the ATC calculation.
As part of the new rule, transmission owners will also be required to provide NERC and its regional reliability organizations with their counterflow assumptions and outage processing rules. This will prevent transmission owners from producing too conservative ATC calculations, or estimates of low spare capacity for competitors to use.
The six new Reliability Standards will be effective on the first day of the first calendar quarter that is twelve months after the date that the Reliability Standards are approved by all applicable regulatory authorities.