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Federal Register / Vol. 71, No. 18 / Friday, January 27, 2006 / Proposed Rules
• An area where the percentage of the
population living in poverty is at least
20 percent;
• An area in a Metropolitan Area
where the median family income is at or
below 80 percent of the Metropolitan
Area median family income or the
national Metropolitan Area median
family income, whichever is greater;
• An area outside of a Metropolitan
Area, where the median family income
is at or below 80 percent of the
statewide non-Metropolitan Area
median family income or the national
non-Metropolitan Area median family
income, whichever is greater;
• An area where the unemployment
rate is at least 1.5 times the national
average;
• An area meeting the criteria for
economic distress that may be
established by the Community
Development Financial Institutions
Fund (CDFI) of the United States
Department of the Treasury.
In addition, the local community,
neighborhood, or rural district must be
underserved, based on data considered
by the NCUA Board and the Federal
banking agencies.
Once an underserved area has been
added to a federal credit union’s field of
membership, the credit union must
establish and maintain an office or
service facility in the community within
two years. A service facility is defined
as a place where shares are accepted for
members’ accounts, loan applications
are accepted and loans are disbursed.
This definition includes a credit union
owned branch, a shared branch, a
mobile branch, or an office operated on
a regularly scheduled weekly basis. This
definition does not include an ATM or
the credit union’s Internet Web site.
The federal credit union adding the
underserved community must
document that the community meets the
definition for serving underserved areas
in the Federal Credit Union Act. The
charter type of a multiple common-bond
federal credit union adding such a
community will not change. Therefore,
the multiple common-bond federal
credit union will not be able to receive
the benefits afforded to low-income
designated credit unions, such as
expanded use of nonmember deposits
and access to the Community
Development Revolving Loan Program
for Credit Unions.
A federal credit union that desires to
include an underserved community in
its field of membership must first
develop a business plan specifying how
it will serve the community. The
business plan, at a minimum, must
identify the credit and depository needs
of the community and detail how the
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credit union plans to serve those needs.
The credit union will be expected to
regularly review the business plan to
determine if the community is being
adequately served. The regional director
may require periodic service status
reports from a credit union about the
underserved area to ensure that the
needs of the community are being met
as well as requiring such reports before
NCUA allows a multiple common-bond
federal credit union to add an additional
underserved area.
[FR Doc. E6–908 Filed 1–26–06; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 292
[Docket No. RM06–10–000]
New PURPA Section 210(m)
Regulations Applicable to Small Power
Production and Cogeneration Facilities
Issued January 19, 2006.
AGENCY: Federal Energy Regulatory
Commission, DOE.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Federal Energy
Regulatory Commission (Commission) is
proposing to amend its regulations
governing small power production and
cogeneration in response to section 1253
of the Energy Policy Act of 2005 (EPAct
2005), which added section 210(m) to
the Public Utility Regulatory Policies
Act of 1978 (PURPA). The Commission
seeks public comment on the amended
regulations proposed herein.
DATES: Comments are due February 27,
2006. Reply Comments are due March
28, 2006.
ADDRESSES: Comments may be filed
electronically via the eFiling link on the
Commission’s Web site at http://
www.ferc.gov. Commenters unable to
file comments electronically must send
an original and 14 copies of their
comments to: Federal Energy Regulatory
Commission, Office of the Secretary,
888 First Street, NE., Washington, DC
20426. Refer to the Comment
Procedures section of the preamble for
additional information on how to file
comments.
FOR FURTHER INFORMATION CONTACT:
Deborah Wyrick (Technical
Information), Office of Energy Markets
and Reliability, Federal Energy
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426,
(202) 502–6113.
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Marka Shaw (Technical Information),
Office of Energy Markets and
Reliability, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502–
8641.
Samuel Higginbottom (Legal
Information), Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502–
8561.
Giuseppe Fina (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC
20426, (202) 502–8696.
SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T.
Kelliher, Chairman; Nora Mead
Brownell, and Suedeen G. Kelly.
I. Introduction
1. On August 8, 2005, the Energy
Policy Act of 2005 (EPAct 2005) 1 was
signed into law. Section 1253(a) of
EPAct 2005 adds a new section 210(m)
to the Public Utility Regulatory Policies
Act of 1978 (PURPA) 2 which provides
for termination of an electric utility’s
obligation to purchase energy and
capacity from qualifying cogeneration
facilities and qualifying small power
production facilities (QFs), if the
Federal Energy Regulatory Commission
(Commission) finds that certain
conditions are met. Section 210(m) 3: (1)
Provides a procedure for an electric
utility to file an application for relief
from the mandatory purchase obligation
on a service territory-wide basis; (2)
provides a procedure for any affected
entity or person to apply to the
Commission for an order reinstating the
electric utility’s obligation to purchase
energy; (3) provides for termination of
an electric utility’s obligation to sell to
QFs energy and capacity if the
Commission finds that certain
conditions are met; (4) protects existing
rights and remedies under any contract
or obligation in effect or pending
approval involving the purchase of
energy or capacity or sale of energy or
capacity to a QF; and (5) allows the
Commission to issue and enforce
1 Public Law 109–58, § 1253, 119 Stat. 594 (2005).
2 16 U.S.C. 824a–3 (2000).
3 We note that the Commission has issued a
notice of proposed rulemaking regarding added
section 210(n) in Docket No. RM05–36–000. That
section makes clear that no new qualifying
cogeneration facility can enter into a contract with
an electric utility unless the cogeneration facility
satisfies criteria for new qualifying cogeneration
facilities that will be established by the
Commission. Revised Regulations Governing Small
Power Production and Cogeneration Facilities,
Notice of Proposed Rulemaking, 70 FR 60,456 (Oct.
18, 2005), FERC Stats. & Regs. ¶ 32,590 (2005).
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regulations to ensure that an electric
utility recovers all prudently incurred
costs associated with the purchase of
energy from a QF.
2. The Commission proposes to
amend its regulations, specifically 18
CFR 292.303, to implement the
requirements in section 210(m).4 The
Commission seeks public comment on
the regulations proposed herein.
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II. Background
3. When Congress enacted section 210
of PURPA, it required the Commission
to prescribe rules as the Commission
determined necessary to encourage
cogeneration and small power
production, including rules requiring
electric utilities to offer to purchase
electric power from and sell electric
power to QFs. Additionally, section 210
of PURPA authorized the Commission
to exempt QFs from certain federal and
state laws and regulations.
4. Under section 201 of PURPA,
cogeneration facilities and small power
production facilities which meet certain
standards and which are not owned by
persons primarily engaged in the
generation or sale of electric power 5 can
become QFs, and thus become eligible
for the rates and exemptions pursuant to
section 210 of PURPA and found in our
regulations.6
5. A cogeneration facility is defined in
the Federal Power Act (FPA) 7 as a
facility which produces electric energy
and steam or forms of useful energy
(such as heat) which are used for
industrial, commercial, heating, or
cooling purposes.8 Thus, cogeneration
facilities simultaneously produce two
forms of useful energy, namely electric
power and heat. Cogeneration facilities
can use significantly less fuel to
produce electricity and steam (or other
forms of energy) than would be needed
to produce the two separately.
6. Small power production facilities
as defined in the FPA use biomass,
waste, or renewable resources,
including wind, solar energy and water,
to produce electric power and have a
4 We will generally refer to EPAct 2005’s added
section 210(m) of PURPA as ‘‘amended section
210.’’ All other references to PURPA section 210 are
as it currently exists.
5 The ownership requirement was codified in
sections 3(17)(A) and 3(18)(A) of the FPA. Section
1253(b) of EPAct 2005 removed the ownership
requirement from sections 3(17)(A) and 3(18)(A) of
the FPA, and the Commission has proposed to
remove the ownership requirement from its
regulations in Docket No. RM05–36–000. Revised
Regulations Governing Small Power Production and
Cogeneration Facilities, Notice of Proposed
Rulemaking, 70 FR 60456 (Oct.18, 2005), FERC
Stats. & Regs. ¶ 32,590 (2005).
6 18 CFR Part 292 (2005).
7 16 U.S.C. 824 et seq. (2000).
8 16 U.S.C. 796(18) (2000).
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power production capacity which,
together with any other facilities located
at the same site, are not greater than 80
megawatts.9 Reliance on these sources
of energy can reduce the need to
consume fossil fuels to generate electric
power.
7. Prior to the enactment of PURPA,
a cogenerator or small power producer
seeking to establish interconnected
operation with a utility faced three
major obstacles. First, utilities were not
generally willing to purchase this
electric output or were not willing to
pay an appropriate rate for that output.
Second, utilities generally charged
discriminatorily high rates for back-up
service to cogenerators and small power
producers. Third, a cogenerator or small
power producer which provided
electricity to a utility’s grid ran the risk
of being considered a public utility and
thus being subjected to extensive state
and federal regulation.
8. Section 210 of PURPA was
designed to remove these obstacles.
Each electric utility is required under
section 210 to offer to purchase
available electric energy from
cogeneration and small power
production facilities which obtain
qualifying status. The rates for such
purchases from QFs must be just and
reasonable to the ratepayers of the
utility, in the public interest, and must
not discriminate against cogenerators or
small power producers. Rates also must
not exceed the incremental cost to the
electric utility of alternative electric
energy (also known as the electric
utility’s ‘‘avoided costs’’). Section 210
also requires electric utilities to provide
electric service to QFs at rates which are
just and reasonable, in the public
interest, and which do not discriminate
against cogenerators and small power
producers.
9. Since Congress enacted PURPA,
electric utilities have complained that
their obligation to purchase from and
sell to QFs, as implemented by the
Commission in 18 CFR 292.303(a)–(b),
was not economically beneficial and
that they were purchasing energy they
did not need and selling energy they did
not want to sell. In 1995, the
Commission clarified that in
determining the avoided cost rate, the
electric utility must take into account all
alternative sources including third-party
suppliers and does not have to buy
power it does not need.10 In the past
4533
decade, with the development of
exempt wholesale generators (EWGs)
introduced by the Energy Policy Act of
1992,11 and increasing competition in
wholesale electric markets as well as
some retail electric markets, Congress
has debated whether to repeal PURPA
altogether, or to revise it. The result is
new section 210(m), which is the
subject of this rulemaking, and new
section 210(n), which is being addressed
in Docket No. RM05–36–000. New
section 210(m) requires the Commission
to lift the mandatory purchase
obligation if it finds, in effect, that there
is a sufficiently competitive market for
the QF to sell its power. While the
provision permits electric utilities to file
applications for relief from the
mandatory purchase obligation, and
requires the Commission to act on such
applications within 90 days, the
Commission has determined that it can
more appropriately address this issue
through rulemaking.
III. Proposed Revisions to Regulations
A. Obligation To Purchase
10. Section 292.303(a) of the
Commission’s regulations, 18 CFR
292.303(a), states that:
Obligation to purchase from qualifying
facilities. Each electric utility shall purchase,
in accordance with § 292.304, any energy and
capacity which is made available from a
qualifying facility:
(1) Directly to the electric utility; or
(2) Indirectly to the electric utility in
accordance with paragraph (d) of this section.
11. The new PURPA section 210(m)(1)
amends the obligation to purchase and
states that:
* * * no electric utility shall be required
to enter into a new contract or obligation to
purchase electric energy from a qualifying
cogeneration facility or a qualifying small
power production facility under this section
if the Commission finds that the qualifying
cogeneration facility or qualifying small
power production facility has
nondiscriminatory access to—
(A)(i) Independently administered,
auction-based day ahead and real time
wholesale markets for the sale of electric
energy; and (ii) wholesale markets for longterm sales of capacity and electric energy; or
(B)(i) Transmission and interconnection
services that are provided by a Commissionapproved regional transmission entity and
administered pursuant to an open access
transmission tariff that affords
nondiscriminatory treatment to all
customers; and (ii) competitive wholesale
markets that provide a meaningful
9 16 U.S.C. 796(17)(A)(i)–(ii) (2000).
10 Southern California Edison Company and San
Diego Gas & Electric Company, 70 FERC ¶ 61,215
at 61,677–78, reconsideration denied, 71 FERC ¶
61,269 at 62,078 (1995) (finding that the
determination of avoided cost must take into
account ‘‘all sources’’).
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11 Energy Policy Act of 1992, Public Law No. 102–
486, 106 Stat. 2776, (1993) (EPAct 1992). EPAct
1992 added a new section 32 to the Public Utility
Holding Company Act of 1935 (PUHCA) to permit
a category of sellers called EWGs to be exempt from
PUHCA.
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opportunity to sell capacity, including longterm and short-term sales, and electric
energy, including long-term, short-term and
real-time sales, to buyers other than the
utility to which the qualifying facility is
interconnected. In determining whether a
meaningful opportunity to sell exists, the
Commission shall consider, among other
factors, evidence of transactions within the
relevant market; or
(C) Wholesale markets for the sale of
capacity and electric energy that are, at a
minimum, of comparable competitive quality
as markets described in subparagraphs (A)
and (B).
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Section 210(m)(1) thus relieves an
electric utility of its obligation to enter
into a new contract or obligation to
purchase QF power upon a Commission
finding that certain market conditions
exist.
12. As discussed below, the
Commission will: (1) Discuss its
interpretation of the criteria for electric
utility relief from the purchase
obligation; (2) make a preliminary
finding that QFs interconnected with
utilities that are members of Midwest
Independent Transmission System
Operator, Inc. (Midwest ISO), PJM
Interconnection, L.L.C. (PJM), ISO New
England, Inc. (ISO–NE), and New York
Independent System Operator (NYISO)
have nondiscriminatory access to those
markets and that those markets satisfy
the section 210(m)(1)(A) criteria for
removing the obligation of those electric
utilities to enter into new contracts or
obligations with QFs; and (3) provide
guidance on the definition of
‘‘nondiscriminatory access,’’ and ‘‘new
contract or obligation.’’
1. Meaning of Section 210(m)(1)
13. Section 210(m)(1) states that no
utility shall be obligated to enter into a
new contract or obligation if the
Commission finds that QFs have
nondiscriminatory access to one of the
three market circumstances described in
section 210(m)(1)(A), (B), and (C). In
effect, Congress has required the
Commission to remove the mandatory
purchase obligation if it finds that there
is access to a sufficiently competitive
market for QFs to sell their power.
Based on this statutory language, in this
section, we discuss our interpretation of
what type of markets are required by
section 210(m)(1) of PURPA to relieve a
utility of the mandatory purchase
obligation.
14. Subparagraph (A) waives the
purchase obligation if QFs have
nondiscriminatory access to (i)
independently administered, auctionbased day-ahead and real-time
wholesale markets for the sale of electric
energy; and (ii) wholesale markets for
long-term sales of capacity and electric
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energy. We conclude that the most
reasonable interpretation of subsection
(A) is that it was crafted to apply in
regions in which Independent System
Operators (ISO) and Regional
Transmission Organizations (RTO)
administer day-ahead and real-time
markets, and bilateral long-term
contracts for the sale of capacity and
electric energy are available to
participants/QFs in these markets.
15. We note that the second prong of
subparagraph (A) does not require
auction-based long-term capacity or
energy markets and such an
interpretation would not be consistent
with the statutory text. First,
subparagraph (A)(ii) does not use the
terms ‘‘organized,’’ ‘‘independently
administered,’’ or ‘‘competitive’’ when
describing the long term markets. As
evidenced by subparagraph (B)(ii),
discussed below, Congress could have
imposed such requirements for the longterm wholesale markets, but did not.
Therefore, we conclude that no such
requirement was intended for the longterm markets of section 210(m)(1)(A)(ii).
Second, unlike subparagraph (B)(ii),
subparagraph (A)(ii) does not require
the Commission to consider ‘‘evidence
of transactions within the relevant
market’’ when determining whether QFs
have meaningful opportunities to sell
into wholesale markets outside the host
utility. This suggests that Congress
presumed there was a meaningful
opportunity to sell for QFs that have
‘‘nondiscriminatory access to’’ ISO and
RTO regions with day-ahead and realtime markets.
16. A reasonable interpretation of
subparagraph (B) is that it is intended to
apply in non-auction-based markets
because it waives the mandatory
purchase requirement so long as there is
(i) a Commission-approved regional
transmission entity providing
nondiscriminatory transmission and
interconnection services; and (ii)
‘‘competitive wholesale markets’’ for
short- and long-term energy and
capacity sales and real-time energy
sales. To meet subparagraph (B)(i), QFs
must have nondiscriminatory access to
transmission and interconnection
service that is nondiscriminatory, which
we interpret to mean access pursuant to
a Commission-approved open access
transmission tariff (OATT) and
interconnection rules and provided by
an entity that is regional in scope.
Amended section 210 does not contain
any express definition, and, therefore,
the Commission has discretion in this
context to deem an entity to be
‘‘regional’’ based on factors such as
sufficient regional scope or
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configuration or the multiple discrete
transmission systems it controls.
17. As to the second prong,
subparagraph (B)(ii) requires that QFs
have access to ‘‘competitive wholesale
markets that provide a meaningful
opportunity’’ to sell capacity and energy
on both a short- and long-term basis and
energy on a real-time basis (emphasis
added). ‘‘Meaningful opportunity’’ is to
be determined by the Commission after
considering, among other factors,
‘‘evidence of transactions within the
relevant market.’’ Taken together, the
terms ‘‘competitive,’’ ‘‘meaningful
opportunity’’ and ‘‘evidence of
transactions’’ suggest that Congress
intended that waiver occur in a nonauction-based market only if it could be
established that QFs had opportunities
to sell their output into competitive
wholesale markets.
18. Subparagraph (C) removes the
purchase obligation in wholesale
markets for the sale of capacity and
electric energy that are, ‘‘at a
minimum,’’ of comparable competitive
quality as markets described in
subparagraphs (A) and (B). Although
this provision is not clear on its face, its
reference to subparagraphs (A) and (B)
requires the Commission to be mindful,
in interpreting the provision, of the two
types of requirements that are embodied
in those sections, i.e., (1)
nondiscriminatory access to
transmission and interconnection
services, and (2) competitive short-term
and long-term markets. These
provisions appear to require a case-bycase approach, but we seek comments
on whether the Commission can make
generic findings on these provisions.
19. The Commission’s existing OATT,
adopted in Order No. 888,12 and
interconnection rules, adopted in Order
Nos. 2003 13 and 2006,14 are designed to
12 Promoting Wholesale Competition Through
Open Access Non-discriminatory Transmission
Services by Public Utilities and Recovery of
Stranded Costs by Public Utilities and Transmitting
Utilities, Order No. 888, FERC Stats. & Regs.
Regulations Preambles January 1991-June 1996
¶ 31,036 (1996), Order No. 888–A, FERC Stats. &
Regs., Regulations Preambles July 1996–December
2000 ¶ 31,048 (1997), order on reh’g, Order No.
888–B, 81 FERC ¶ 61,248 (1997), order on reh’g,
Order No. 888–C, 82 FERC ¶ 61,046 (1998), aff’d in
relevant part sub nom. Transmission Access Policy
Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000),
aff’d sub nom. New York v. FERC, 535 U.S. 1
(2002).
13 Standardization of Generator Interconnection
Agreements and Procedures, Order No. 2003, 68 FR
49,845 (Aug. 19, 2003), FERC Stats. & Regs. ¶ 31,146
(2003), order on reh’g, Order No. 2003–A, 69 FR
15,932 (Mar. 26, 2004), FERC Stats. & Regs. ¶ 31,160
(2004), order on reh’g, Order No. 2003–B, 70 FR 265
(Jan. 4, 2005), FERC Stats. & Regs. ¶ 31,171 (2004),
order on reh’g, Order No. 2003–C, 70 FR 37,661
(June 30, 2005), FERC Stats. & Regs. ¶ 31,190 (2005).
14 Standardization of Small Generator
Interconnection Agreements and Procedures, Order
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eliminate undue discrimination in the
provision of transmission and
interconnection services. Although the
Commission recently issued a Notice Of
Inquiry regarding changes to the OATT,
the OATT has been considered
sufficient to provide non-discriminatory
access to transmission until such time
as modified. Accordingly, we conclude
that QFs have non-discriminatory access
to transmission and interconnection if
they have access to utilities providing
service under an Order No. 888 OATT
(or to utilities providing service under a
Commission-accepted reciprocity tariff)
and interconnection services pursuant
to the Commission’s interconnection
rules. However, we seek comment on
whether there are any circumstances in
which an OATT should be considered
insufficient for purposes of section
210(m). We also seek comment on
whether a Commission-accepted
reciprocity tariff filed by a
nonjurisdictional electric utility has the
same effect as an OATT for purposes of
meeting section 210(m)(1)(C). We also
seek comment on whether
nonjurisdictional utilities provide
nondiscriminatory interconnection
services for purposes of section
210(m)(1)(C) of PURPA.
20. We also recognize that small QFs
may be in a unique situation with
respect to nondiscriminatory access
because they interconnect with the host
utility at a distribution level. For
instance, Granite State has recently filed
a petition in Docket No. EL06–26–000
asking the Commission to initiate a
rulemaking implementing section
210(m) of PURPA and as part of that
rulemaking, issue rules retaining the
mandatory purchase obligation for small
QFs (those with a nameplate capacity of
5 MW or less) and creating a rebuttable
presumption in favor of retaining the
mandatory purchase obligation for small
power production facilities with a
capacity over 5 MW and up to 20 MW.
Granite State suggests that small hydro
QFs do not have nondiscriminatory
access to RTO/ISO markets. Therefore,
we seek comment on whether the
purchase obligation should be retained
for small renewable projects and, if so,
how to define ‘‘small,’’ e.g., 5 MWs or
below, 20 MWs or below as proposed by
Granite State. In addition, we seek
comment on whether there may be other
categories of QFs that lack
nondiscriminatory access to RTO/ISO
short-term or long-term wholesale
No. 2006, 70 FR 34,100 (Jun. 13, 2005), FERC Stats.
& Regs. ¶ 31,180 at 31,406–31,551 (2005), order on
reh’g, Order No. 2006–A, 70 FR 71,760 (Nov. 30,
2005), FERC Stats. & Regs. ¶ 31,196 (2005).
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markets for which we should retain the
obligation to purchase.
21. With respect to whether the
second prong of section 210(m)(B)(ii) is
met in non-ISO/non-RTO markets, i.e.,
whether QFs in non-ISO/non-RTO
markets have access to wholesale
markets for long-term sales of capacity
and electric energy, would that prong be
satisfied if there is a demonstration that
an organized power procurement
process exists in which QFs can
participate (albeit not an auction-based
process)? We seek comments on ways
the prong may be satisfied.
2. Implementation of Section 210(m)(1)
(a) Subparagraph A
22. As we discussed above, the
Commission interprets section
210(m)(1)(A) to apply in regions in
which ISOs and RTOs administer dayahead and real-time markets, and
bilateral long-term contracts for the sale
of capacity and electric energy are
available to participants/QFs in these
markets. The Commission proposes to
find that the Midwest ISO, PJM, ISO–
NE, and NYISO satisfy the requirements
of section 210(m)(1)(A).15 These entities
are Commission approved ISO or RTOs
that provide non-discriminatory open
access transmission services and
independently administer auction-based
wholesale markets for day-ahead and
real-time energy sales. Additionally,
with respect to (A)(ii), the existence of
bilateral long-term contracts for longterm sales of capacity and energy is an
indication of a market. It is reasonable
to conclude that the second prong of
subparagraph (A) is met because
bilateral long-term contracts are
available to participants in the
footprints of the Midwest ISO, PJM,
ISO–NE, and NYISO. Therefore, we
propose to find that electric utilities that
are members of the Midwest ISO, PJM,
ISO–NE, and NYISO would meet the
requirements for relief from the
mandatory purchase obligation. We
describe these markets in more detail
below.
(1) Midwest ISO
23. On December 20, 2001, the
Commission found that the Midwest
ISO satisfied the requirements,
including independence from market
15 While Southwest Power Pool, Inc. (SPP) and
the California Independent System Operator
Corporation (Cal ISO), respectively are a
Commission-approved RTO and ISO, they do not
satisfy the requirements of section 210(m)(1)(A)
because neither has day-ahead markets. However,
any utility within SPP and Cal ISO may file an
application with the Commission to seek relief from
the mandatory purchase obligation under sections
210(m)(1)(B) or (C), on a case-by-case basis.
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4535
participants, of Order No. 2000, and
thus granted the Midwest ISO RTO
status.16 Thus, we believe that the
Midwest ISO ‘‘independently
administers’’ auction-based real-time
markets. With respect to subparagraph
(1)(A)(i), the Commission approved the
Midwest ISO’s proposed Transmission
and Energy Markets Tariff (TEMT),
which allowed the Midwest ISO to
initiate Day 2 operations in its 15-state
region.17 The Midwest ISO’s Day 2
operations include, among other things,
day-ahead and real-time energy markets
and a Financial Transmission Rights
(FTR) market for transmission capacity.
The Midwest ISO began Day 2
operations on April 1, 2005. Since
market participants have access to the
Midwest ISO’s day-ahead and real-time
energy markets to sell their electric
energy, a QF that has ‘‘nondiscriminatory access’’ would have the
same opportunity. Also, bilateral
contracts exist in the Midwest ISO for
the long-term sales of capacity and
energy. Accordingly, we would expect
that such long-term sales would be
available to all participants in the
Midwest ISO’s footprint. Based on the
foregoing, we propose to find that the
Midwest ISO meets the conditions of
subparagraph (A).
(2) PJM
24. PJM received Commission
approval as an independent regional
transmission organization on July 12,
2001.18 Since independence from
market participants is one of four
characteristics that PJM had shown for
Commission approval to operate as an
RTO, PJM satisfies the ‘‘independently
administered’’ condition. Second, since
1997, PJM has operated auction-based,
day-ahead and real-time wholesale
energy markets pursuant to its OATT
and Operating Agreement.19 Because
PJM’s market participants have access to
auction-based day ahead and real time
wholesale energy markets, a QF would
have the same opportunity as other
generators to sell energy in that market.
Also, there are bilateral contracts in PJM
for the long-term sales of capacity and
16 See Midwest Independent Transmission System
Operator, Inc., 97 FERC ¶ 61,326 (2001) order on
reh’g, 103 FERC ¶ 61,169 (2003).
17 See Midwest Independent Transmission System
Operator, Inc., 108 FERC ¶ 61,163 (Midwest ISO,
FERC Electric Tariff, Third Revised Volume No. 1,
Module C), order on reh’g, 109 FERC ¶ 61,157
(2004), order on reh’g, 111 FERC ¶ 61,043 (2005).
18 PJM Interconnection, L.L.C., 96 FERC ¶ 61,061
(2001). On December 20, 2002, in PJM
Interconnection, L.L.C., 101 FERC ¶ 61,345 (2002),
PJM was granted full, rather than provisional, RTO
status. Independence was one of the matters
considered in the 2002 Order.
19 PJM Interconnection, L.L.C., FERC Electric
Tariff, Sixth Revised Volume No. 1.
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energy. Accordingly, we would expect
that such long-term sales would be
available to all participants in PJM’s
footprint. Therefore, we propose to find
that PJM meets the conditions of
subparagraph (A).
(3) ISO–NE
25. ISO–NE received Commission
approval as an independent regional
transmission operator on March 24,
2004, by having satisfied the
Commission’s criterion of independence
from market participants.20 Due to ISO–
NE’s status as an RTO, we believe that
the ISO–NE satisfies the ‘‘independently
administered’’ condition of
subparagraph (A)(i). With respect to the
second condition of subparagraph (A)(i),
ISO–NE, pursuant to Market Rule 1 of
its OATT, commenced operation of its
auction-based energy markets on March
1, 2003. Since ISO–NE’s market
participants have access to auctionbased day ahead and real time
wholesale energy markets, a QF would
have the same opportunity. Also, there
are bilateral contracts in ISO–NE for the
long-term sales of capacity and energy.
Accordingly, we would expect that such
long-term sales would be available to all
participants in ISO–NE’s footprint.
Therefore we propose to find that ISO–
NE meets the conditions of
subparagraph (A).
(4) NYISO
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26. The NYISO received Commission
authorization to operate as an
independent transmission operator on
June 30, 1998 after showing that it is
independent of market participants.21
On November 18, 1999, the NYISO
commenced operation of its auctionbased energy markets. Under the ISO
Market Administration and Control
Area Services Tariff, NYISO’s market
participants have access to auctionbased day ahead and real time
wholesale energy markets,22 and a QF
would have the same opportunity as
other generators within NYISO to sell
energy into NYISO’s auction-based day
ahead and real time wholesale energy
markets. Also, there are bilateral
contracts in NYISO for the long-term
sales of capacity and energy.
Accordingly, we would expect that such
long-term sales would be available to all
participants in NYISO’s footprint.
Therefore we propose to find that
20 ISO New England, Inc., 106 FERC 61,280
(2004).
21 Central Hudson Gas & Electric Co., 83 FERC
¶ 61,352 (1998), order on reh’g, 87 FERC ¶ 61,135
(1999).
22 New York Independent System Operator, Inc.,
FERC Electric Tariff Original Volume No. 2.
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NYISO meets the conditions of
subparagraph (A).
(5) Conclusion
27. The Commission thus proposes to
find in this rulemaking proceeding that
QFs interconnected with electric
utilities that are members of Midwest
ISO, PJM, ISO–NE, and NYISO have
nondiscriminatory access to those
markets and those markets meet the
section 210(m)(1)(A) criteria for
removing the obligation of those electric
utilities to enter into new contracts or
obligations with the QFs. We seek
comments, including specific evidence,
which either support or refute this
preliminary finding Finally, as noted
previously, we seek comment on
whether the obligation to purchase
should be retained in these markets for
‘‘small’’ QFs.
28. Under our proposed regulations,
to claim relief from the purchase
obligation, electric utilities that are
members of Midwest ISO, PJM, ISO–NE,
and NYISO will need to make
compliance filings pursuant to section
210(m)(3). This compliance filing is
discussed in more detail in our
discussion of section 210(m)(3).
(b) Subparagraphs B and C
29. The Commission proposes to
determine on a case-by-case basis 23
whether a utility has met the
requirements of sections 210(m)(1)(B)
and 210(m)(1)(C) for relief from its
purchase obligation. An electric utility
filing an application claiming to meet
the requirements of section 210(m)(1)(B)
or section 210(m)(1)(C) of PURPA must
demonstrate the ‘‘factual basis upon
which relief is requested.’’ Applicants
should provide, among other evidence,
actual sales data for (1) long-term and
short-term capacity and (2) long-term,
short-term, and real-time electric energy
as well as evidence that the utility
operates in a competitive wholesale
market. Accordingly, to be relieved of
their mandatory purchase obligations,
electric utilities that are not members of
Midwest ISO, PJM, ISO–NE, and NYISO
would be required to file such
applications with the Commission
pursuant to section 210(m)(3) of
PURPA.
30. We propose that other markets,
i.e., both non-auction-based markets and
non-RTO markets, as well as new
auction-based markets, and utilityspecific markets would be addressed on
23 We will allow joint applications to be filed by
a number of utilities in a region if the applications
for relief from the purchase obligation present
common issues of law and fact. We would expect
common issues of law and fact to exist where one
or more utilities operate within the same market.
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a case-by-case basis, pursuant to section
210(m)(3) discussed below. In addition,
subsequent changes to market
conditions in all markets would be
handled on a case-by-case basis,
pursuant to section 210(m)(4) discussed
below.
3. Other Issues
31. Section 210(m)(1) states that no
electric utility shall be obligated to
purchase from a QF if the Commission
finds that the QF has nondiscriminatory
access to the market conditions
identified in each subparagraph. We
propose that there be a rebuttable
presumption that a utility provides
nondiscriminatory access if it has an
open access transmission tariff in
compliance with our pro forma OATT
(or a Commission-approved reciprocity
tariff).24 We also propose that QFs or
any other affected party should be
allowed to rebut that presumption, for
example, by providing specific and
credible evidence that the QF does not
have non-discriminatory access to
wholesale markets. However, the
presumption cannot be rebutted by an
argument that the utility has not
properly implemented or administered
its OATT. Improper implementation of
an OATT is more properly the subject
of a complaint and the Commission will
take appropriate steps in response to a
complaint to ensure that the OATT is
properly implemented.
32. Section 210(m)(1) also states that
no electric utility ‘‘shall be required to
enter into a new contract or obligation’’
to purchase electric energy from a QF if
the Commission makes the required
finding. The Commission proposes to
find that when a contract terminates by
its own accord, an electric utility is not
compelled to enter into a new, successor
contract with the QF if the Commission
has found that the QF has
nondiscriminatory access to markets
that satisfy the criteria of section
210(m)(1). Some have alleged that the
grant of QF status means that electric
utilities have an ‘‘obligation’’ to
purchase from that QF in perpetuity. We
disagree. That a facility has QF status
does not mean that an electric utility
has an ‘‘obligation’’ to purchase from
the QF in perpetuity, or, conversely,
that the QF has the right to demand that
the utility purchase at avoided-cost rates
in perpetuity. The Commission
proposes to find that if a contract is
entered into after August 8, 2005, the
date of enactment, but before the
24 In Docket No. RM05–25–000, the Commission
is currently reviewing the adequacy and sufficiency
of the pro forma OATT to ensure that it prevents
undue discrimination in the provision of
transmission service.
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Commission has determined that an
electric utility is entitled to relief from
the obligation to purchase from a QF,
the contract already entered into will be
treated as though it was in effect on
August 8, 2005 for purposes of section
210(m)(1).
B. Purchase and Sale Obligations for
New Cogeneration Facilities
33. Section 210(m)(2)(A) of PURPA
reads:
REVISED PURCHASE AND SALE
OBLIGATIONS FOR NEW FACILITIES—(A)
After the date of enactment of this
subsection, no electric utility shall be
required pursuant to this section to enter into
a new contract or obligation to purchase from
or sell electric energy to a facility that is not
an existing qualifying cogeneration facility
unless the facility meets the criteria for
qualifying cogeneration facilities established
by the Commission pursuant to the
rulemaking required by subsection (n).
34. This provision reinforces the
requirement that new qualifying
cogeneration facilities must satisfy the
section 210(n) criteria for new
qualifying cogeneration facilities, which
the Commission is implementing in
pending Docket No. RM05–36–000. The
Commission proposes to make this
clarification in section 292.309(d) of its
regulations.
35. Section 210(m)(2)(B) defines the
term ‘‘existing qualifying cogeneration
facility’’ to mean a facility that: (i) Was
a qualifying cogeneration facility on the
date of enactment of subsection (m), or
(ii) had filed with the Commission a
notice of self-certification, selfrecertification or an application for
Commission certification under 18 CFR
292.207 prior to the date on which the
Commission issues the final rule
required by subsection 210(n). The
Commission proposes to adopt this
definition in new section 292.309(b)(1)
of its regulations.
C. Application for Relief
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36. Section 210(m)(3) of PURPA
states:
COMMISSION REVIEW—Any electric
utility may file an application with the
Commission for relief from the mandatory
purchase obligation pursuant to this
subsection on a service territory-wide basis.
Such application shall set forth the factual
basis upon which relief is requested and
describe why the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1)
of this subsection have been met. After
notice, including sufficient notice to
potentially affected qualifying cogeneration
facilities and qualifying small power
production facilities, and an opportunity for
comment, the Commission shall make a final
determination within 90 days of such
application regarding whether the conditions
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set forth in subparagraphs (A), (B) or (C) of
paragraph (1) have been met.
37. The Commission proposes to
include in new section 292.310 the
language of section 210(m)(3) of PURPA.
Since the enactment of EPAct 2005, two
applications for relief from the
mandatory purchase obligation have
been filed with the Commission.25 In
Alliant, the Commission explained that,
in order to meet the express statutory
requirement of ‘‘notice,’’ including
‘‘sufficient notice to potentially affected
qualifying cogeneration facilities and
qualifying small power production
facilities,’’ contained in section
210(m)(3) of PURPA, it would require
that an applicant identify all potentially
affected QFs in any application for relief
filed pursuant to section 210(m)(3).26
The Commission then described which
facilities constitute ‘‘all potentially
affected QFs.’’ 27
38. Consistent with Alliant and
Montana-Dakota, before the
Commission will consider an
application filed pursuant to section
210(m)(3) of PURPA, an applicant must
first identify in the application all
potentially affected QFs (with their
names and current addresses)—
including: (1) Those QFs that have
existing power purchase contracts with
the applicant; (2) other QFs that sell
their output to the applicant or that
have pending requests for the applicant
to purchase their output; (3) any
developer of generating facilities with
whom the applicant has agreed to enter
into power purchase contracts or is
discussing power purchase contacts; (4)
the developers of facilities that have
pending state avoided cost proceedings;
and (5) any other QFs that the applicant
reasonably believes to be affected by its
petition. This will ensure that the
statutory obligation is met to provide
notice and an opportunity to comment
to all potentially affected QFs. The
Commission proposes to incorporate
this interpretation of ‘‘sufficient notice’’
and ‘‘all potentially affected QFs’’ in
new section 292.310(b) and (c).
39. We point out that under section
210(m)(3) the Commission must make a
finding regarding an application for
relief of the purchase obligation and that
the finding must be made within 90
days of the date of such application. The
Commission, accordingly, will expect
25 See Alliant Energy Corporate Services, Inc., 113
FERC ¶ 61,024 (2005) (Alliant); Montana-Dakota
Utilities Co., 113 FERC ¶ 61,045 (2005) (MontanaDakota). In both instances, the Commission
dismissed petitions for declaratory orders pursuant
to section 210(m)(3) of PURPA requesting relief
from the mandatory purchase obligation on the
grounds of insufficient notice.
26 Alliant, 113 FERC ¶ 61,024 at P 18.
27 Id. at P 19–20.
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4537
an application for relief to be fully
supported by documentation upon
which the required finding can be made,
i.e., a case in chief. For those not in one
of the Commission-certified markets,
such documentation should include, but
is not limited to: (1) Prepared testimony;
(2) affidavits; (3) exhibits; and (4) any
other evidence. Given the statutory 90day time limit for finding, we stress that
the burden will be on the applicant to
provide a fully-supported application in
the first instance.
40. With regard to applications filed
by electric utilities that are members of
Midwest ISO, PJM, NYISO, or ISO–NE,
an electric utility need only submit a
compliance filing showing that: (1) It is
a member of one of these RTOs/ISOs; (2)
the Commission has made a final
finding that the RTO/ISO that it is a
member of provides QFs with
nondiscriminatory access;28 (3) a list of
all potentially affected QFs; and (4) the
QFs have the right to request service
under an OATT or OATTs (or
reciprocity tariffs) on file. Once a final
rule issues and the Commission has
acted on rehearing of the final rule, the
Commission will not reevaluate its
decision on specific markets made in
the instant proceeding, absent changed
circumstances. The Commission seeks
comments on whether there are any QFs
within the service territories of members
of the Midwest ISO, PJM, ISO–NE, and
NYISO that, although they have access
to an OATT or OATTs (or reciprocal
tariffs), nonetheless do not have
nondiscriminatory access to those
markets.
41. We anticipate that the compliance
filings of the electric utilities that are
members of the Midwest ISO, PJM,
NYISO, or ISO–NE and seeking relief
from the purchase obligation will be
essentially ministerial; we do not expect
the findings made in this rulemaking to
be re-litigated in the compliance filing
proceeding. In this regard, we conclude
that the existence of a filed OATT ( or
reciprocity tariff) will be construed to
provide nondiscriminatory access. If a
QF believes that the administration or
implementation of the OATT denies it
access to markets, it is not an issue for
the compliance filing proceeding;
instead the QF may file a complaint
challenging the implementation or
administration of an OATT.
28 The final rule in this proceeding must have
become effective before an electric utility may rely
upon it. As a result, any electric utilities that file
early and seek to rely on the preliminary findings
with respect to Midwest ISO, PJM, NYISO or ISO–
NE in this NOPR will not be permitted to do so.
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D. Reinstatement of Obligation To
Purchase
42. Section 210(m)(4) provides:
REINSTATEMENT OF OBLIGATION TO
PURCHASE. At any time after the
Commission makes a finding under
paragraph (3) relieving an electric utility of
its obligation to purchase electric energy, a
qualifying cogeneration facility, a qualifying
small power production facility, a State
agency, or any other affected person may
apply to the Commission for an order
reinstating the electric utility’s obligation to
purchase electric energy under this section.
Such application shall set forth the factual
basis upon which the application is based
and describe why the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1)
of this subsection are no longer met. After
notice, including sufficient notice to
potentially affected utilities, and opportunity
for comment, the Commission shall issue an
order within 90 days of such application
reinstating the electric utility’s obligation to
purchase electric energy under this section if
the Commission finds that the conditions set
forth in subparagraphs (A), (B) or (C) of
paragraph (1) which relieved the obligation
to purchase, are no longer met.
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43. The Commission views this
section as an opportunity for a QF, a
state agency, or any affected person to
seek to reinstate the purchase obligation
should there be a material change in the
circumstances under which the
Commission granted relief. We note that
the applicant bears the burden to ‘‘set
forth the factual basis’’ upon which the
application is based. The requirement
for a ‘‘factual basis’’ indicates that
allegations of a change in the conditions
upon which relief was granted must be
supported with evidence. The
Commission proposes to consider these
applications on a case-by-case basis.
44. Consistent with our interpretation
of ‘‘notice’’ under section 210(m)(3), the
Commission will require an applicant to
identify all potentially affected utilities
in the application so that the
Commission will be able to meet its
statutory requirement to provide
sufficient notice and an opportunity for
comment.
E. Obligation To Sell
45. Section 292.303(b) of the
Commission’s regulations, 18 CFR
292.303(b), states that: ‘‘Each electric
utility shall sell to any qualifying
facility, in accordance with § 292.305,
any energy and capacity requested by
the qualifying facility.’’ Under new
section 210(m)(5), this mandatory
obligation to sell can be terminated if
the Commission finds that: ‘‘Competing
retail electric suppliers are willing and
29 See P 29 supra.
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15:15 Jan 26, 2006
able to sell and deliver electric energy
to the qualifying cogeneration facility or
qualifying small power production
facility; and the electric utility is not
required by State law to sell electric
energy in its service territory.’’
46. The Commission proposes to
incorporate the language of section
210(m)(5) of PURPA in new section
292.312 of the Commission’s
regulations. The Commission proposes
to interpret the phrase ‘‘new contract or
obligation’’ contained in section
210(m)(3) consistently with its
interpretation of the same words
contained in section 210(m)(1) of
PURPA.29
47. The Commission is also proposing
to include a provision, section 292.313,
allowing a QF, State agency, or any
other affected person to apply to the
Commission for an order reinstating the
electric utility’s obligation to sell
electric energy if the factual predicate
for the determination that the obligation
to purchase should be terminated no
longer exists.
F. Section 210(m)(6)
48. Section 210(m)(6) of PURPA
requires that:
Nothing in this subsection affects the rights
or remedies of any party under any contract
or obligation, in effect or pending approval
before the appropriate State regulatory
authority or non-regulated electric utility on
the date of enactment of this subsection, to
purchase electric energy or capacity from or
to sell electric energy or capacity to a
qualifying cogeneration facility or qualifying
small power production facility under this
Act (including the right to recover costs of
purchasing electric energy or capacity).
49. We propose to implement section
210(m)(6) of PURPA by adopting the
language of the statute in section
292.314. In addition, the Commission
will clarify that the stage of the
construction of a facility has no bearing
on whether the protections of section
210(m)(6) are triggered. The
Commission interprets section
210(m)(6) to protect the rights and
remedies under a contract or obligation
in effect or pending approval before the
state regulatory authority, regardless of
the construction stage of the facility that
may be the subject of the contract or
obligation. We solicit comments on
whether further or different language
and/or clarifications other than those
proposed here should be incorporated
into our regulations.
G. Section 210(m)(7)
50. Section 210(m)(7) of PURPA
requires that:
(A) The Commission shall issue and
enforce such regulations as are necessary to
ensure that an electric utility that purchases
electric energy or capacity from a qualifying
cogeneration facility or qualifying small
power production facility in accordance with
any legally enforceable obligation entered
into or imposed under this section recovers
all prudently incurred costs associated with
the purchase. (B) A regulation under
subparagraph (A) shall be enforceable in
accordance with the provisions of law
applicable to enforcement of regulations
under the Federal Power Act (16 U.S.C. 791a
et seq.).
51. The Commission does not believe
that regulations are necessary at this
time; this is a matter that the
Commission can address on a case-bycase basis. However, the Commission
will consider a regulation under this
section in the future if a need becomes
apparent.
52. We solicit comments on whether
there is a need for the Commission to
consider a regulation, and if so what
that regulation should state, to ensure
that an electric utility that purchases
electric energy or capacity from a
cogeneration QF or qualifying small
power production facility in accordance
with any legally enforceable obligation
entered into or imposed under section
210(m)(7) recovers all prudently
incurred costs associated with the
purchase.
IV. Information Collection Statement
53. The Commission is submitting the
following collection of information
contained in this proposed rulemaking
to the Office of Management and Budget
(OMB) for review under section 3507(d)
of the Paperwork Reduction Act of
1995.30 The Commission identifies the
information provided for under part 292
as FERC–556. These collections of
information are specifically mandated
by statute.
54. The Commission solicits
comments on the Commission’s need for
this information, whether the
information will have practical utility,
the accuracy of the provided burden
estimates, ways to enhance the quality
and clarity of the information that the
Commission will collect, and any
suggested methods for minimizing the
respondent’s burden, including the use
of information techniques. The burden
estimates for complying with this
proposed rule are as follows:
30 44 U.S.C. 3507(d) (2000).
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Number of
respondents
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Data collection FERC–556
Number of
responses
Hour per
response
§ 292.310 .........................................................................................................
§ 292.312 .........................................................................................................
§ 292.413 .........................................................................................................
230
230
630
1
1
1
Totals ........................................................................................................
860
1
Total Annual Hours for the
Collection: (reporting + recordkeeping if
appropriate)
Information Collection Costs: Because
of the regional differences and the
various staffing levels that will be
involved in preparing the
documentation (legal, technical and
support) the Commission is using an
hourly rate of $150 to estimate the costs
for filing and other administrative
processes (reviewing instructions,
searching data sources, completing and
transmitting the collection of
information). The estimated cost is
anticipated to be $421,500.
Title: FERC–556 Small Power
Production and Cogeneration Facilities.
Action: Proposed Data Collections.
OMB Control Nos.: 1902–0075.
Upon approval of a collection of
information, OMB will assign an OMB
control number and an expiration date.
Respondents subject to the filing
requirements of this rule will not be
penalized for failing to respond to these
collections of information unless the
collections of information display a
valid OMB control number or the
Commission has provided justification
as to why the control number should
not be displayed.
Respondents: Businesses or other for
profit, state, local or tribal government.
Necessity of the Information: The
Commission proposes amending its
regulations to implement section 210(m)
of PURPA which was enacted in section
1253 of the EPAct 2005; specifically, its
regulations governing purchases of
electric energy from and sales of electric
energy to qualifying small power
production and cogeneration facilities
These requirements conform to the
Commission’s plan for efficient
information collection, communication,
and management within the energy
industry. The Commission has assured
itself, by means of internal review, that
there is specific, objective support for
the burden estimates associated with the
information requirements.
Interested persons may obtain
information on the reporting
requirements by contacting the
following: Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426 [Attention:
Michael Miller, Office of the Executive
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15:15 Jan 26, 2006
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Director, Phone: (202) 502–8415, fax:
(202) 273–0873, e-mail:
michael.miller@ferc.gov].
55. For submitting comments
concerning the collection(s) of
information and the associated burden
estimate(s), please send your comments
to the contact listed above and to the
Office of Management and Budget,
Office of Information and Regulatory
Affairs, Washington, DC 20503,
[Attention: Desk Officer for the Federal
Energy Regulatory Commission, phone:
(202) 395–4650, fax: (202) 395–7285, email: oira_submission@omb.eop.gov.
V. Environmental Analysis
56. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
environment. The Commission has
categorically excluded certain actions
from this requirement as not having a
significant effect on the human
environment. As explained above, this
proposed rule is clarifying in nature. It
interprets several amendments made to
PURPA by EPAct 2005, and clarifies the
applicability of these amendments to
electric utilities and QFs; it does not
substantially change the effect of the
legislation. Accordingly, no
environmental consideration is
necessary.
VI. Regulatory Flexibility Act Analysis
57. The Regulatory Flexibility Act of
1980 (RFA) 31 generally requires a
description and analysis of rules that
will have significant economic impact
on a substantial number of small entities
and where notice and comment
rulemaking is required. Certain rules are
exempt from notice and comment from
the RFA requirements; exempt rules
include interpretative rules, general
statements of policy, or rules of agency
organization procedure or practice.32
Interpretative rules ‘‘generally interpret
the intent expressed by Congress, where
an agency does not insert its own
judgments or interpretations in
implementing a rule and simply
31 5 U.S.C. 601–12.
32 5 U.S.C. 553(b)(A).
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Total annual
hours
2
2
3
460
460
1,890
2,810
regurgitates statutory language.’’ 33 The
rule we are proposing in this docket is
an interpretative rule. Accordingly, no
regulatory flexibility analysis is
required.
VII. Comment Procedures
58. The Commission invites interested
persons to submit comments on the
matters and issues proposed in this
notice to be adopted, including any
related matters or alternative proposals
that commenters may wish to discuss.
Comments are due February 27, 2006.
Reply comments are due March 28,
2006. Comments and reply comments
must refer to Docket No. RM06–10–000,
and must include the commenters’
names, the organizations they represent,
if applicable, and their address in their
comments. Comments and reply
comments may be filed either in
electronic or paper format.
59. Comments and reply comments
may be filed electronically via the
eFiling link on the Commission’s Web
site at http://www.ferc.gov. The
Commission accepts most standard
word processing formats and
commenters may attach additional files
with supporting information in certain
other file formats. Commenters filing
electronically do not need to make
paper filings. Commenters that are not
able to file comments and reply
comments electronically must send an
original and 14 copies of their
comments to: Federal Energy Regulatory
Commission, Office of the Secretary,
888 First Street, NE., Washington, DC
20426.
60. All comments and reply
comments will be placed in the
Commission’s public files and may be
viewed, printed, or downloaded
remotely as described in the Document
Availability section below. Commenters
on this proposal are not required to
serve copies of their comments and
reply comments on other commenters.
VIII. Document Availability
61. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
33 ‘‘How to Comply with the Regulatory
Flexibility Act: A Guide for Government Agencies’’,
Small Business Administration, Office of Advocacy,
P.5, May 2003.
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Federal Register / Vol. 71, No. 18 / Friday, January 27, 2006 / Proposed Rules
interested persons an opportunity to
view and/or print the contents of this
document via the Internet through the
Commission’s Home Page (http://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE.,
Room 2A, Washington, DC 20426.
62. From the Commission’s Home
Page on the Internet, this information is
available in the Commission’s document
management system, eLibrary. The full
text of this document is available on
eLibrary in PDF and Microsoft Word
format for viewing, printing, and/or
downloading. To access this document
in eLibrary, type the docket number
excluding the last three digits of this
document in the docket number field.
63. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours. For
assistance, please contact FERC Online
Support at 1–866–208–3676 (toll free) or
(202) 502–8222 (e-mail at
FERCOnlineSupport@FERC.gov), or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659 (e-mail at
public.referenceroom@ferc.gov).
List of Subjects in 18 CFR Part 292
Electricity, Electric power plants,
Electric utilities, Natural gas, Reporting
and recordkeeping requirements.
By direction of the Commission.
Magalie R. Salas,
Secretary.
In consideration of the foregoing, the
Commission proposes to amend part
292, Chapter I, Title 18, Code of Federal
Regulations, as follows:
PART 292—REGULATIONS UNDER
SECTIONS 201 AND 210 OF THE
PUBLIC UTILITY REGULATORY
POLICIES ACT OF 1978 WITH REGARD
TO SMALL POWER PRODUCTION AND
COGENERATION
1. The authority citation for part 292
continues to read as follows:
Authority: 16 U.S.C. 791a–825r, 2601–
2645; 31 U.S.C. 9701; 42 U.S.C. 7101–7352.
2. Section 292.303 is amended by
revising paragraphs (a) and (b) to read
as follows:
rmajette on PROD1PC67 with PROPOSALS
§ 292.303 Electric utility obligations under
this subpart.
(a) Obligation to purchase from
qualifying facilities. Each electric utility
shall purchase, in accordance with
§ 292.304, unless exempted by
§ 292.309, any energy and capacity
which is generated from a qualifying
facility
(1) Directly to the electric utility; or
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15:15 Jan 26, 2006
Jkt 208001
(2) Indirectly to the electric utility in
accordance with paragraph (d) of this
section.
(b) Obligation to sell to qualifying
facilities. Each electric utility shall sell
to any qualifying facility, in accordance
with § 292.305, unless exempted by
§ 292.312 of this chapter, energy and
capacity requested by the qualifying
facility.
*
*
*
*
*
3. Sections 292.309 through 292.314
are added to read as follows:
§ 292.309 Termination of obligation to
purchase from qualifying facilities.
(a) An electric utility shall no longer
be required to enter into a new contract
or obligation to purchase electric energy
from a qualifying cogeneration facility
or a qualifying small power production
facility if the Commission finds that the
qualifying cogeneration facility or
qualifying small power production
facility has nondiscriminatory access to:
(1)(i) Independently administered,
auction-based day ahead and real time
wholesale markets for the sale of electric
energy; and
(ii) Wholesale markets for long-term
sales of capacity and electric energy; or
(2)(i) Transmission and
interconnection services that are
provided by a Commission-approved
regional transmission entity and
administered pursuant to an open
access transmission tariff that affords
nondiscriminatory treatment to all
customers; and
(ii) Competitive wholesale markets
that provide a meaningful opportunity
to sell capacity, including long-term and
short-term sales, and electric energy,
including long-term, short-term and
real-time sales, to buyers other than the
utility to which the qualifying facility is
interconnected; in determining whether
a meaningful opportunity to sell exists
within the meaning of
§ 292.309(a)(2)(ii), the Commission shall
consider, among other factors, evidence
of transactions within the relevant
market; or
(3) Wholesale markets for the sale of
capacity and electric energy that are, at
a minimum, of comparable competitive
quality as markets described in
paragraphs (a)(1) and (a)(2) of this
section.
(b) Definitions. (1) For purposes of
this section, an ‘‘existing qualifying
cogeneration facility’’ is a facility that:
(i) Was a qualifying cogeneration
facility before or on August 8, 2005; or
(ii) Had filed with the Commission a
notice of self-certification, selfrecertification or an application for
Commission certification under
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§ 292.207 prior to [the date the
Commission issues a final rule].
(2) For the purposes of this section, a
‘‘new qualifying cogeneration facility’’
is a facility that satisfies the criteria for
qualifying cogeneration facilities under
§ 292.205.
(3) For the purposes of this section, a
renewal of a contract that expires by its
own terms is a ‘‘new contract or
obligation.’’
(c) For the purposes of this section,
there is a rebuttable presumption that
there is ‘‘non-discriminatory access’’ to
wholesale markets when a qualifying
facility is provided transmission
services pursuant to a Commissionapproved open access transmission
tariff or reciprocity tariff, and
interconnection services pursuant to
Commission-approved interconnection
rules.
(d) No electric utility shall be required
to enter into a new contract or
obligation to purchase from or sell
electric energy to a facility that is not an
existing qualifying cogeneration facility
unless the facility meets the criteria for
new qualifying cogeneration facilities
established by the Commission in
§ 292.205.
§ 292.310 Procedures for utilities
requesting termination of obligation to
purchase from qualifying facilities.
(a) Any electric utility may file an
application with the Commission for
relief from the mandatory purchase
obligation in § 292.303(a) pursuant to
this section on a service territory-wide
basis. Such application shall set forth
the factual basis upon which relief is
requested and describe why the
conditions set forth in § 292.309(a)(1),
(2) or (3) have been met. After notice,
including sufficient notice to potentially
affected qualifying cogeneration
facilities and qualifying small power
production facilities, and an
opportunity for comment, the
Commission shall make a final
determination within 90 days of such
application regarding whether the
conditions set forth in § 292.309(a)(1),
(2) or (3) have been met; provided,
however, that if the Commission has
made a determination pursuant to
notice and comment rulemaking or
order that a particular market meets the
criteria for relief in § 292.309(a)(1), (2)
or (3), an applicant may make a
ministerial application under this
section and the application will be
treated as a compliance filing.
(b) Sufficient notice shall mean that
an electric utility must identify with
names and addresses all potentially
affected qualifying facilities in an
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Federal Register / Vol. 71, No. 18 / Friday, January 27, 2006 / Proposed Rules
application filed pursuant to paragraph
(a) of this section.
(c) All potentially affected qualifying
facilities shall include:
(1) Those qualifying facilities that
have existing power purchase contracts
with the applicant;
(2) Other qualifying facilities that sell
their output to the applicant or that
have pending self-certification or
Commission certification with the
Commission for qualifying facility status
whereby the applicant will be the
purchaser of the qualifying facility’s
output;
(3) Any developer of generating
facilities with whom the applicant has
agreed to enter into power purchase
contracts or are in discussion with
regard to power purchase contacts;
(4) The developers of facilities that
have pending state avoided cost
proceedings; and
(5) Any other qualifying facilities that
the applicant reasonably believes to be
affected by its application filed pursuant
to paragraph (a) of this section.
§ 292.311 Reinstatement of obligation to
purchase.
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At any time after the Commission
makes a finding under § 292.310
relieving an electric utility of its
obligation to purchase electric energy, a
qualifying cogeneration facility, a
qualifying small power production
facility, a State agency, or any other
affected person may apply to the
Commission for an order reinstating the
electric utility’s obligation to purchase
electric energy under this section, if
there has been a change in the
conditions upon which the Commission
based its finding. Such application shall
set forth the factual basis upon which
the application is based and describe
why the conditions set forth in
§ 292.309 (a)(1), (2) or (3) are no longer
met. After notice, including sufficient
notice to potentially affected utilities,
and opportunity for comment, the
Commission shall issue an order within
90 days of such application reinstating
the electric utility’s obligation to
purchase electric energy under this
section if the Commission finds that the
conditions set forth in § 292.309 (a)(1),
(2), or (3) which relieved the obligation
to purchase, are no longer met.
§ 292.312 Procedures for utilities
requesting termination of obligation to sell
to qualifying facilities.
(a) An electric utility shall not be
required to enter into a new contract or
obligation to sell electric energy to a
qualifying small power production
facility, an existing qualifying
cogeneration qualifying facility, or a
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15:15 Jan 26, 2006
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new qualifying cogeneration facility if
the Commission has found that:
(1) Competing retail electric suppliers
are willing and able to sell and deliver
electric energy to the qualifying
cogeneration facility or qualifying small
power production facility; and
(2) The electric utility is not required
by State law to sell electric energy in its
service territory.
(b) Any electric utility may file an
application with this Commission for
relief from the mandatory obligation to
sell under this paragraph on a service
territory-wide basis or a single
qualifying facility basis. Such
application shall set forth the factual
basis upon which relief is requested and
describe why the conditions set forth in
paragraphs (a)(1) and (a)(2) of this
section have been met. After notice,
including sufficient notice to potentially
affected qualifying facilities, and an
opportunity for comment, the
Commission shall make a final
determination within 90 days of such
application regarding whether the
conditions set forth in paragraphs (a)(1)
and (a)(2) of this section have been met.
§ 292.313
sell.
Reinstatement of obligation to
At any time after the Commission
makes a finding under § 292.312
relieving an electric utility of its
obligation to sell electric energy, a
qualifying cogeneration facility, a
qualifying small power production
facility, a State agency, or any other
affected person may apply to the
Commission for an order reinstating the
electric utility’s obligation to sell
electric energy under this section, if
there has been a change in the
conditions upon which the Commission
based its finding. Such application shall
set forth the factual basis upon which
the application is based and describe
why the conditions set forth in
§ 292.312 (a)(1) and (a)(2) are no longer
met. After notice, including sufficient
notice to potentially affected utilities,
and opportunity for comment, the
Commission shall issue an order within
90 days of such application reinstating
the electric utility’s obligation to sell
electric energy under this section if the
Commission finds that the conditions
set forth in § 292.312 (a)(1) and (a)(2) are
no longer met.
§ 292.314
Existing rights and remedies.
Nothing in this §§ 292.303 through
292.314 affects the rights or remedies of
any party under any contract or
obligation, in effect or pending approval
before the appropriate State regulatory
authority or non-regulated electric
utility on or before August 8, 2005, to
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4541
purchase electric energy or capacity
from or to sell electric energy or
capacity to a qualifying cogeneration
facility or qualifying small power
production facility (including the right
to recover costs of purchasing electric
energy or capacity).
[FR Doc. E6–940 Filed 1–26–06; 8:45 am]
BILLING CODE 6717–01–P
NATIONAL ARCHIVES AND RECORDS
ADMINISTRATION
Information Security Oversight Office
32 CFR Part 2004
RIN 3095–AB34
Information Security Oversight Office;
National Industrial Security Program
Directive No. 1
AGENCY: Information Security Oversight
Office (ISOO), National Archives and
Records Administration (NARA).
ACTION: Implementing directive;
proposed rule.
SUMMARY: The Information Security
Oversight Office (ISOO), National
Archives and Records Administration
(NARA), is publishing this Directive as
a proposed rule and pursuant to section
102(b)(1) of Executive Order 12829, as
amended, relating to the National
Industrial Security Program. This order
establishes a National Industrial
Security Program (NISP) to safeguard
Federal Government classified
information that is released to
contractors, licensees, and grantees of
the United States Government.
Redundant, overlapping, or unnecessary
requirements impede those interests.
Therefore, the NISP serves as the single,
integrated, cohesive industrial security
program to protect classified
information and to preserve our
Nation’s economic and technological
interests. This Directive sets forth
guidance to agencies to set uniform
standards throughout the NISP that
promote these objectives.
DATES: Comments must be received on
or before March 13, 2006.
ADDRESSES: You may submit comments,
identified by ‘‘RIN 3095–AB34,’’ by any
of the following methods:
Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
E-mail: comments@nara.gov. Include
‘‘RIN 3095–AB34’’ in the subject line of
the message.
Fax: (301) 837–0319.
Mail: Regulation Comments Desk
(NPOL), Room 4100, National Archives
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.