# Open Access Transmission Service Tariff > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A97-25332 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** September 26, 1997 - **Citation:** 62 FR 50572 ## Text DEPARTMENT OF ENERGY Western Area Power Administration Open Access Transmission Service Tariff AGENCY: Western Area Power Administration, DOE. ACTION: Notice of proposed tariff. ----------------------------------------------------------------------- SUMMARY: The Western Area Power Administration (Western) is proposing to adopt this Open Access Transmission Service Tariff (Tariff) in order to be consistent with the Federal Energy Regulatory Commission (FERC) Orders 888 and 888-A to the extent practicable and consistent with laws applicable to Western's activities. DATES: The comment period on the proposed Tariff will begin with the publication of this notice in the Federal Register and will end October 27, 1997. To be assured of consideration, all written comments must be received by the end of the comment period. Western will hold a combined public information and public comment forum on the proposed Tariff beginning at 1 p.m., October 7, 1997. ADDRESSES: The combined public information and public comment forum will be held at the Stapleton Plaza Hotel, 3333 Quebec Street, Denver, Colorado. All written comments regarding this proposed Tariff should be directed to the following address: Mr. Robert C. Fullerton, A0600, Corporate Communications, Western Area Power Administration, 1627 Cole Boulevard, P.O. Box 3402, Golden, CO 80401-0098, Electronic Mail: [email protected] Facsimile: (303) 275-1290. FOR FURTHER INFORMATION CONTACT: Mr. Robert J. Harris, Power Marketing Manager, Upper Great Plains Region, Western Area Power Administration, P.O. Box 35800, Billings, MT 59107-5800, (406) 247-7394 [[Page 50573]] Mr. Dave Sabo, CRSP Manager, CRSP Customer Service Center, Western Area Power Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606, (801) 524-5493 Mr. Anthony H. Montoya, Power Marketing Manager, Desert Southwest Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 352-2789 Mr. James D. Keselburg, Power Marketing Manager, Rocky Mountain Region, Western Area Power Administration, P.O. Box 3700, Loveland, CO 80539- 3003, (970) 490-7370 Ms. Zola Jackson, Power Marketing Manager, Sierra Nevada Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, (916) 353-4421. SUPPLEMENTARY INFORMATION: Table of Contents I. Procedures II. Background III. Issues Raised During the Development of this Proposed Tariff IV. Summary of Changes from the FERC Pro Forma Tariff V. Coordination with Adoption of Open Access Transmission Rates I. Procedures After all public comments have been considered, Western will prepare a final Tariff and publish it in the Federal Register. Western will submit the final Tariff to FERC under a nonjurisdictional docket and will request a declaratory order that the Tariff meets FERC comparability standards as set forth in FERC Orders 888 and 888-A. Western will make necessary changes in response to the FERC declaratory order and further comments and will then publish the revised final Tariff in the Federal Register. II. Background Western was established pursuant to Section 302 of the Department of Energy (DOE) Organization Act, Public Law 95-91, dated August 4, 1977. Western is generally a partial requirements power supplier that markets and transmits Federal electric power in 15 central and western States encompassing a geographic area of 3.38 million-square-kilometers (1.3 million-square-miles). Western has four Regional Offices and one Customer Service Center which market and transmit power generated by various Federal projects. Nothing in the proposed Tariff is intended to alter, amend, or abridge the statutory obligations of Western to market Federal power and to repay the Federal investment in those Federal projects. FERC issued a Notice of Proposed Rulemaking (NOPR) for Open Access Transmission Service, published at 60 FR 17662, on April 7, 1995. On October 4, 1995, the Secretary of the Department of Energy (DOE) adopted a Power Marketing Administration Open Access Transmission Policy which stated that DOE supported the spirit and intent of the NOPR and directed the Power Marketing Administrations to prepare tariffs which would conform to the principles set forth in the FERC's final rule. FERC issued its final rule, Order 888, published at 61 FR 21540 on May 10, 1996, and followed with Order 888-A, published at 62 FR 12273, on March 14, 1997. In early 1996, Western began developing a Tariff Equivalent Package (TEP) to comply with the Secretary's directive. A draft TEP, which was designed as a Western-wide document that would contain Region-specific rates and charges, was completed in July 1996 and sent to Western's electric service customers, transmission-service customers, and other interested parties for review and comment. Western accepted comments through November 1996. After evaluating comments, Western modified its original concept of preparing a Western-wide TEP and began developing Regional Open Access Transmission Service Guidelines (Regional Guidelines). These Regional Guidelines contained service agreements consistent with the specific conditions applicable to each Region. The resulting documents were sent to electric service customers, transmission customers, and other interested parties for review and comment in April 1997. The review period for those documents ended in early June 1997. To date, customer and interested party participation has been conducted informally. Western will submit a single Tariff document to FERC under a nonjurisdictional docket and request a declaratory order from FERC that the Tariff meets the FERC comparability standards as set forth in FERC Orders 888 and 888-A. Consistent with a single FERC filing, Western decided to develop and file this single Tariff with appended schedules and attachments. Western's Tariff includes Attachment J, Provisions Specific to the Transmission Provider, and Attachment K, Authorities and Obligations, which are specific to Western and are not found in FERC Order 888-A, Exhibit B, Pro Forma Tariff. III. Issues Raised During the Development of This Proposed Tariff Participants in the informal review process raised numerous issues about both versions of the draft documents. The following discussion highlights the more significant issues and Western's responses as incorporated into this proposed Tariff. A. Issue: There is concern that some of Western's Regional Offices may not offer Network Integration Transmission Service, hereafter called network service, at this time. Some think that not providing network service would probably mean that the Tariff would be of little value to all existing transmission customers. They think this would raise significant comparability issues since the service Western provides itself is network service. Response: In most cases, the service Western provides to its firm power customers is not exactly network or point-to-point service. Western will offer network service subject to available transfer capability determined considering operating constraints, facility limitations, and existing contractual obligations. B. Issue: Some of Western's customers have expressed concern that the combination of the network service provisions and the definitions provided in Western's Tariff result in transmission being paid for both as part of Western's power rates and again under Western's Tariff. The Tariff does not clearly describe how this would be eliminated. A Western customer's load and/or resources should be reduced to account for Western's power contract commitment to the customer. Similarly, the definition of Network Customer should include the possibility that a Network Customer may also be a Federal customer as defined in Attachment K. Response: FERC recognized that existing power and transmission arrangements represent a transitional problem as customers begin to take service under the Pro Forma Tariff. FERC did not intend, nor does Western, for a transmission provider to receive two payments for providing service to the same portion of a transmission customer's load. The current definition of Network Customer does not exclude the possibility that a Network Customer may also be a Federal customer. C. Issue: Some of Western's customers encouraged Western to reserve its transmission capability to serve future load growth needs of its customers, including direct-service customers. Some of Western's firm power customers also requested that Western [[Page 50574]] identify its allocations to customers as Native Load in the Tariff. Response: Western's customers with point-to-point transmission service may request increased reservations of point-to-point transmission to accommodate specified amounts of anticipated load growth of the customer. Where Western is able to provide network service, Western intends to meet anticipated load growth; however, Western's ability to construct additional transmission facilities to accommodate Network Customer load growth may be limited by appropriations or advance customer funding. Western will adhere to the transmission procedures set forth in its final Tariff for all requests for transmission service. Western has defined firm power and project use customers as Federal customers in Attachment K to the Tariff and will treat them in a manner analogous to the treatment of Native Load Customers of public utilities. D. Issue: Why does Western require advancement of funds? Response: Under present legislation, Western cannot use appropriated funds to do work for others and is prohibited from entering into contracts that obligate it to spend funds it does not have. E. Issue: Western should be proposing service only over Federal facilities. Western should not allow stranded cost recovery for non- Federal facilities. Response: Each Western Regional Office will design rates to include the facilities used to provide transmission service under the Tariff. The transmission system description may be modified in the Tariff to correspond with results of some rate making processes. The terms of the Tariff will allow stranded cost recovery when appropriate and consistent with applicable Federal law. F. Issue: Why cannot Western provide service without a contract? Response: Western believes that the Pro Forma language, as modified in Western's Tariff, provides adequate protection and is willing to provide service without an executed Service Agreement in accordance with the terms of sections 1.45, 15.3 and 29.1. These sections require the Transmission customer to agree to abide by the Tariff terms and the existing transmission rates. The Transmission Customer may also request resolution under the provisions of Section 12, Dispute Resolution, of the Tariff. G. Issue: What process will Western use for future changes to the Tariff? Response: Western is providing notice of this proposal and an opportunity to comment. The proposal may then be modified after considering the comments received. Western will submit the final Tariff to FERC under a nonjurisdictional docket and request a declaratory order from FERC that the final Tariff meets FERC comparability standards as set forth in FERC Orders 888 and 888-A. Interested parties will have an opportunity to comment on the Tariff by following appropriate procedures to intervene with FERC. Western will make necessary changes in response to the FERC declaratory order and further comments and will then publish the final revised Tariff in the Federal Register. H. Issue: Some of Western's customers believe that Western has a statutory obligation to deliver power to its firm power customers and therefore, should not they have a superior right? How will Western address ``comparability'' issues? Response: Service to be provided under the Tariff will not conflict with any of Western's statutory obligations. There will be no need to give Western's Federal customers a superior right to transmission since adequate capacity will be reserved for the long-term delivery of the Federal power through Western's process in determining its Available Transfer Capability (ATC), which requires consideration of various hydrological conditions and also considers the possible integration of thermal or other generation sources. If there is additional capacity above Western's needs for use by others, Western will make that capacity available under the Tariff. This will ensure adequate long- term transmission capacity for Federal purposes as well as allowing Western the ability to provide comparable service to others. I. Issue: Does Western intend that an entity seeking transmission service across the entire Western system would need to have a service agreement with each Western Regional Office and pay individual rates for use of each office's system, leading to a pancaking of rates? Response: More than one service agreement may be needed if an entity wants service across the transmission facilities of more than one project. Although a Regional Office may have responsibility for more than one Project Transmission System, each Project has its own separate transmission system and its own repayment obligation for that specific system. IV. Summary of Changes From the FERC Pro Forma Tariff Western's proposed Tariff has 11 differences from the Pro Forma Tariff that can be grouped into four major categories: Preservation of Obligations, FERC Jurisdictional Issues, Financial Considerations, and Legal Issues. A. Preservation of Obligations i. Transmission Provider and Transmission System Western operates, manages, and has repayment responsibilities for several independent transmission systems. Each system is managed as an independent financial entity with discrete repayment responsibilities under Federal statutes authorizing the individual transmission systems. A Service Agreement for use of one system's facilities and payment of one system's rate may not permit a transmission customer to use the facilities of another system. There is no single Western-wide transmission system or transmission rate. Each system is described in Attachment K (Authorities and Obligations) to the proposed Tariff. The definitions of Transmission Provider in Section 1.46 and Transmission System in Section 1.49 are modified to recognize the independent nature of the transmission facilities. ii. Losses Sections 15.7 and 28.5 of the Pro Forma Tariff are modified to allow the applicable transmission losses percentages to be included in the Region-specific Service Agreements. Western's Regional Offices frequently modify transmission loss factors based on actual system losses. Including losses in the Service Agreement provides a more efficient means of modifying losses than modifying the Tariff. Additionally, since Western has developed a Western-wide Tariff applicable to all Regional Offices, including losses in the Service Agreements is more appropriate. iii. Federal Customers Western markets generation to customers that are entitled by law to receive preference in the sale of Federal power, as opposed to jurisdictional public utilities that serve load requirements in a geographical area. Western will treat preference customers in a manner analogous to Native Load Customers of public utilities as defined in the Pro Forma Tariff. Attachment K defines these Federal Customers. iv. Ancillary Services Section 3 of the proposed Tariff is modified to include the option for Western to purchase Ancillary Services and pass through such costs to the Transmission Customer. Western's hydroelectric power facilities have limited capability to provide some Ancillary Services, due to variable [[Page 50575]] hydrological conditions and environmental and operational constraints. The existing long-term hydrological capability is allocated and under contract to Federal Customers in accordance with the preference provisions of Federal law. B. FERC Jurisdictional Issues Since Western is not a jurisdictional public utility, the Tariff does not include reference to FERC approval of rates or service agreements. Western does not file its rates or contracts under Section 205 and Section 206 of the Federal Power Act. Western's rates are developed pursuant to Federal law, under public information and comment procedures, that specify FERC's role in reviewing Power Marketing Administration rates. Appropriate modifications reflecting Western's rate setting process were made to Sections 1.10, 2.2, 9, 12.1, 13.3, 14.3, 20.3, 26, 27, 34, 34.5. Western does not file executed service agreements with FERC or seek FERC approval to terminate service. Appropriate modifications are made to Sections 1.45, 7.3, 13.4, 14.4, 15.3, 17.6, 19.3, 19.4, 29.1, 29.5, 32.3, and 32.4 to reflect Western's status as a nonjurisdictional utility. C. Financial Considerations i. Deposits for Transmission Service and Interest Western's current financial system and procedures make collecting and refunding deposits unduly burdensome. Western has replaced provisions for collecting deposits with Completed Applications and returning such deposits with interest under certain circumstances with language that allows Western to assess a nondiscriminatory, non- refundable application processing fee for all Transmission Service requests. The processing fee reflects an average of staff wages and benefits multiplied by the average time it takes to analyze and respond to requests for service. FERC has found in other nonjurisdictional tariffs that such an approach represents an administratively simple alternative to the Pro Forma language. Also, Western will not pay interest on deposits for studies or construction. Although Western may, by contract, pay interest, Western cannot earn interest on funds deposited into the U.S. Treasury. Western has also investigated escrow accounts at commercial financial institutions and found that administrative costs generally exceeded interest payments. Paying interest on deposits would result in other ratepayers funding this expense. Western does not believe this is an equitable method and will not pay interest. Appropriate modifications are made to Sections 1.5, 17.3, 17.4, 17.6, 19.1, 19.4, 20.3, 22.2, 29.2, 32.1, 32.2, and 32.4. ii. Advance Payment There are several sections in the Pro Forma Tariff that require the Transmission Provider to perform activities with reimbursement by the Transmission Customer. Except for certain activities with other Federal agencies, Western normally requires advance of funds to perform work rather than receiving a reimbursement. Western is funded through Congressional appropriations. The Anti-Deficiency Act and other appropriations laws generally prohibit Federal agencies from expending funds without having adequate funds in the Treasury and from expending appropriations for purposes other than those for which Congress appropriated the funds. Modifications are made to Sections 13.5, 15.4, 19.1, 19.2, 19.4, 19.8, 20.3, 23.2, 28.2, 31.5, 32.1, and 32.4. iii. Net Billing and Bill Crediting Western's proposed Tariff uses the Pro Forma Tariff language in Section 7 (Billing and Payment). In addition, two provisions in Attachment J provide for Net Billing and Bill Crediting. Net Billing and Bill Crediting are two alternative financing mechanisms that Western has a long-standing history of using. The Net Billing language provides that charges for generation will not be offset with transmission charges without mutual agreement. To be as consistent as possible with the Pro Forma Tariff language, Western included these Western-specific provisions in Attachment J. D. Legal Issues Western has adopted the Force Majeure language of the Pro Forma Tariff. Western has added language assuring that both parties to a contract will provide each other with written notice of any Force Majeure and exercise due diligence in resolving the problem. Western used the Pro Forma Tariff language for Indemnification with the addition of a sentence to reflect the fact that Western's liability is limited under Federal law and is determined in accordance with the Federal Tort Claims Act. Appropriate modifications are made to Section 10. i. Dispute Resolution Western modified the dispute resolution provisions to recognize the limits to Western's statutory and regulatory authority to submit disputes to arbitration consistent with the Administrative Dispute Resolution Act. Appropriate modifications are made to Section 12. ii. Western-Specific Provisions In Attachment J to the Tariff, Western incorporated several provisions specific to Western, as a Federal agency. Section 1, Change of Rates, provides for Western to change rates under the Schedules in accordance with appropriate rate adjustment procedures and other applicable Federal laws. This provision also provides an option for transmission customers to terminate service within 90 days after the effective date of a rate change. This language is necessary because Western does not file its rate adjustments with FERC under the Federal Power Act like jurisdictional public utilities. FERC's review of Western's rates is provided under a different body of Federal law. Section 2, Contingent Upon Appropriations, is required by Federal law to be included in Federal contracts that will extend beyond the current fiscal year. Section 3, Covenant Against Contingent Fees; Section 4, Contract Work Hours and Safety Standards; Section 5, Equal Opportunity Employment Practices; and Section 6, Use of Convict Labor, are contract sections that are required by Federal law to be included in all Federal contracts. Section 7, Independent System Operator (ISO), recognizes that Western is involved with the development of several independent system operator (ISO) organizations and that the final Tariff may need modifications as a result of a Western Regional Office joining an ISO. Section 8 provides that the final Tariff does not grant any rights to any Third Parties who are not a party to the Service Agreement. Section 9, Entire Agreement, provides that the Service Agreement and Tariff are the entire understanding between Western and the Transmission Customer. Section 10, Power Supply Obligations, provides that Western is not obligated to supply capacity and energy from Federal generation sources during Interruptions or Curtailments other than through the provisions of Operating Reserve Service and emergency power. Generally, Federal generation is completely allocated and under contract on a long-term basis to customers entitled to preference under Federal law and may not be available for support of Transmission Service. Section 11, Federal Law, provides that the performance under the Tariff and Service Agreement shall be governed by [[Page 50576]] applicable Federal law. This avoids disputes concerning state law and Federal sovereignty. There may be other sections of the Tariff where there may be potential conflicts between laws under which Western must operate and FERC policy, such as Sections 27 and 31.2. Section 12, Continuing Obligations, provides that obligations to make payments survive termination of the Service Agreement until satisfied. Section 13, Net Billing, and Section 14, Bill Crediting, are discussed above. V. Coordination With Adoption of Open Access Transmission Rates Each of Western's Regional Offices is at a different point in the process of developing Open Access Transmission Rates. DOE approval of Western's rates is addressed in DOE Delegation Order No. 0204-108. Western's procedures for public involvement for rate procedures are covered in 10 CFR Part 903. Filing requirements and procedures for FERC review of Power Marketing Administration rates are detailed in 18 CFR Part 300. Until the Regional Offices complete the processes of placing long-term rates in effect for the services to be provided under the open-access tariff, they will use existing long-term rates when applicable. Short-term rates may be placed in effect by Western's Administrator and used when no rates exist for such services. Once the long-term rates are in effect, they will supersede the short-term rates. The Sierra Nevada Region's (SNR) new rates for ancillary services and transmission are proposed to become effective October 1, 1997, and to be effective for a 5-year period ending September 30, 2002. The proposed rate adjustment was initiated on May 5, 1996, and four informal customer workshops were held. A Federal Register notice was published on March 4, 1997 (62 FR 9763), officially announcing the proposed rates, initiating the public consultation and comment period, and announcing the public information and public comment forums. The Federal Register notice was sent to all Central Valley Project preference customers and interested parties, and a public information and a public comment forum were held. The Colorado River Storage Project Customer Service Center (CRSP CSC) is currently conducting a public process to develop transmission and ancillary service rates consistent with FERC Orders 888 and 888-A to be used with its Tariff. The public comment period will conclude September 23, 1997. The proposed effective date of the rates will be April 1, 1998. The Desert Southwest Region will begin a formal public involvement process in September 1997 to develop transmission and ancillary service rates consistent with FERC Orders 888 and 888-A to be used with the Tariff. The proposed effective date of the rates will be April 1, 1998. The Upper Great Plains Region (UGPR) has implemented short-term Open Access Transmission Rates approved by Western's Administrator. These transmission rates and ancillary service rates became effective December 20, 1996, and will expire December 19, 1997. On March 28, 1997, by the mailing of an Advance Announcement of the transmission rate adjustment for the Pick-Sloan Missouri Basin Program, Eastern Division, a public process was initiated to establish long-term Open Access Transmission Rates for the UGPR. UGPR has received comments from that announcement and published its proposal in September 1997. The proposed effective date is February 1, 1998. The Rocky Mountain Region (RMR) will begin a formal public involvement process in September 1997 to develop transmission and ancillary service rates consistent with FERC Orders 888 and 888-A to be used with the Tariff. The proposed effective date of the rates will be April 1, 1998. Subsequent changes to Regional Office Open Access Transmission rates will be completed on a project-by-project basis using the public involvement and FERC review processes outlined above. Review Under Executive Order 12866 Western has an exemption from centralized regulatory review under Executive Order 12866; accordingly, no clearance of this notice by the Office of Management and Budget (OMB) is required. Regulatory Flexibility Analysis Pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.), each agency, when required by 5 U.S.C. 553 to publish a proposed rule, is further required to prepare and make available for public comment an initial regulatory flexibility analysis to describe the impact of the proposed rule on small entities. The Acting Administrator for Western certifies that Western's providing open transmission access would not cause an adverse economic impact on a substantial number of such entities. Since the proposed open-access tariff is of limited applicability, no flexibility analysis is required. Review Under the Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C. 3501-3520, Western has received approval from OMB for the collection of information in this rule under OMB control number 1910-0100. Review Under the National Environmental Policy Act Western will comply with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the Council on Environmental Quality Regulations (40 CFR Parts 1500-1508), and the DOE NEPA Implementing Procedures (10 CFR Part 1021) prior to adopting the Tariff. AVAILABILITY OF INFORMATION: A redline/strikeout comparison of Western's proposed Tariff to the FERC Pro Forma will be available from the informational contacts listed previously or on the Internet at http://www.wapa.gov. Dated: September 17, 1997. Michael S. Hacskaylo, Acting Administrator. Table of Contents Part I. Common Service Provisions 1 Definitions 1.1 Ancillary Services 1.2 Annual Transmission Costs 1.3 Application 1.4 Commission 1.5 Completed Application 1.6 Control Area 1.7 Curtailment 1.8 Delivering Party 1.9 Designated Agent 1.10 Direct Assignment Facilities 1.11 Eligible Customer 1.12 Facilities Study 1.13 Firm Point-To-Point Transmission Service 1.14 Good Utility Practice 1.15 Interruption 1.16 Load Ratio Share 1.17 Load Shedding 1.18 Long-Term Firm Point-To-Point Transmission Service 1.19 Native Load Customers 1.20 Network Customer 1.21 Network Integration Transmission Service 1.22 Network Load 1.23 Network Operating Agreement 1.24 Network Operating Committee 1.25 Network Resource 1.26 Network Upgrades 1.27 Non-Firm Point-To-Point Transmission Service 1.28 Open Access Same-Time Information System 1.29 Part I 1.30 Part II 1.31 Part III 1.32 Parties 1.33 Point(s) of Delivery 1.34 Point(s) of Receipt [[Page 50577]] 1.35 Point-To-Point Transmission Service 1.36 Power Purchaser 1.37 Receiving Party 1.38 Regional Transmission Group 1.39 Reserved Capacity 1.40 Service Agreement 1.41 Service Commencement Date 1.42 Short-Term Firm Point-To-Point Transmission Service 1.43 System Impact Study 1.44 Third-Party Sale 1.45 Transmission Customer 1.46 Transmission Provider 1.47 Transmission Provider's Monthly Transmission System Peak 1.48 Transmission Service 1.49 Transmission System 2 Initial Allocation and Renewal Procedures 2.1 Initial Allocation of Available Transmission Capability 2.2 Reservation Priority For Existing Firm Service Customers 3 Ancillary Services 3.1 Scheduling, System Control and Dispatch Service 3.2 Reactive Supply and Voltage Control from Generation Sources Service 3.3 Regulation and Frequency Response Service 3.4 Energy Imbalance Service 3.5 Operating Reserve--Spinning Reserve Service 3.6 Operating Reserve--Supplemental Reserve Service 4 Open Access Same-Time Information System (OASIS) 5 Local Furnishing Bonds 5.1 Transmission Providers That Own Facilities Financed by Local Furnishing Bonds 5.2 Alternative Procedures for Requesting Transmission Service 6 Reciprocity 7 Billing and Payment 7.1 Billing Procedures 7.2 Interest on Unpaid Balances 7.3 Customer Default 8 Accounting for the Transmission Provider's Use of the Tariff 8.1 Transmission Revenues 8.2 Study Costs and Revenues 9 Regulatory Filings 10 Force Majeure and Indemnification 10.1 Force Majeure 10.2 Indemnification 11 Creditworthiness 12 Dispute Resolution Procedures 12.1 Internal Dispute Resolution Procedures 12.2 Disputes 12.3 Rights Under The Federal Power Act Part II. Point-To-Point Transmission Service Preamble 13 Nature of Firm Point-To-Point Transmission Service 13.1 Term 13.2 Reservation Priority 13.3 Use of Firm Transmission Service by the Transmission Provider 13.4 Service Agreements 13.5 Transmission Customer Obligations for Facility Additions or Redispatch Costs 13.6 Curtailment of Firm Transmission Service 13.7 Classification of Firm Transmission Service 13.8 Scheduling of Firm Point-To-Point Transmission Service 14 Nature of Non-Firm Point-To-Point Transmission Service 14.1 Term 14.2 Reservation Priority 14.3 Use of Non-Firm Point-To-Point Transmission Service by the Transmission Provider 14.4 Service Agreements 14.5 Classification of Non-Firm Point-To-Point Transmission Service 14.6 Scheduling of Non-Firm Point-To-Point Transmission Service 14.7 Curtailment or Interruption of Service 15 Service Availability 15.1 General Conditions 15.2 Determination of Available Transmission Capability 15.3 Initiating Service in the Absence of an Executed Service Agreement 15.4 Obligation to Provide Transmission Service that Requires Expansion or Modification of the Transmission System 15.5 Deferral of Service 15.6 Other Transmission Service Schedules 15.7 Real Power Losses 16 Transmission Customer Responsibilities 16.1 Conditions Required of Transmission Customers 16.2 Transmission Customer Responsibility for Third-Party Arrangements 17 Procedures for Arranging Firm Point-To-Point Transmission Service 17.1 Application 17.2 Completed Application 17.3 Processing Fee 17.4 Notice of Deficient Application 17.5 Response to a Completed Application 17.6 Execution of a Service Agreement 17.7 Extensions for Commencement of Service 18 Procedures for Arranging Non-Firm Point-To-Point Transmission Service 18.1 Application 18.2 Completed Application 18.3 Reservation of Non-Firm Point-To-Point Transmission Service 18.4 Determination of Available Transmission Capability 19 Additional Study Procedures For Firm Point-To-Point Transmission Service Requests 19.1 Notice of Need for System Impact Study 19.2 System Impact Study Agreement and Compensation 19.3 System Impact Study Procedures 19.4 Facilities Study Procedures 19.5 Facilities Study Modifications 19.6 Due Diligence in Completing New Facilities 19.7 Partial Interim Service 19.8 Expedited Procedures for New Facilities 20 Procedures if The Transmission Provider is Unable to Complete New Transmission Facilities for Firm Point-To-Point Transmission Service 20.1 Delays in Construction of New Facilities 20.2 Alternatives to the Original Facility Additions 20.3 Refund Obligation for Unfinished Facility Additions 21 Provisions Relating to Transmission Construction and Services on the Systems of Other Utilities 21.1 Responsibility for Third-Party System Additions 21.2 Coordination of Third-Party System Additions 22 Changes in Service Specifications 22.1 Modifications On a Non-Firm Basis 22.2 Modifications On a Firm Basis 23 Sale or Assignment of Transmission Service 23.1 Procedures for Assignment or Transfer of Service 23.2 Limitations on Assignment or Transfer of Service 23.3 Information on Assignment or Transfer of Service 24 Metering and Power Factor Correction at Receipt and Delivery Point(s) 24.1 Transmission Customer Obligations 24.2 Transmission Provider Access to Metering Data 24.3 Power Factor 25 Compensation for Transmission Service 26 Stranded Cost Recovery 27 Compensation for New Facilities and Redispatch Costs Part III. Network Integration Transmission Service Preamble 28 Nature of Network Integration Transmission Service 28.1 Scope of Service 28.2 Transmission Provider Responsibilities 28.3 Network Integration Transmission Service 28.4 Secondary Service 28.5 Real Power Losses 28.6 Restrictions on Use of Service 29 Initiating Service 29.1 Condition Precedent for Receiving Service 29.2 Application Procedures 29.3 Technical Arrangements to be Completed Prior to Commencement of Service 29.4 Network Customer Facilities 29.5 This section is intentionally left blank 30 Network Resources 30.1 Designation of Network Resources 30.2 Designation of New Network Resources 30.3 Termination of Network Resources 30.4 Operation of Network Resources 30.5 Network Customer Redispatch Obligation 30.6 Transmission Arrangements for Network Resources Not Physically Interconnected With The Transmission Provider 30.7 Limitation on Designation of Network Resources 30.8 Use of Interface Capacity by the Network Customer 30.9 Network Customer Owned Transmission Facilities 31 Designation of Network Load [[Page 50578]] 31.1 Network Load 31.2 New Network Loads Connected With the Transmission Provider 31.3 Network Load Not Physically Interconnected with the Transmission Provider 31.4 New Interconnection Points 31.5 Changes in Service Requests 31.6 Annual Load and Resource Information Updates 32 Additional Study Procedures For Network Integration Transmission Service Requests 32.1 Notice of Need for System Impact Study 32.2 System Impact Study Agreement and Compensation 32.3 System Impact Study Procedures 32.4 Facilities Study Procedures 33 Load Shedding and Curtailments 33.1 Procedures 33.2 Transmission Constraints 33.3 Cost Responsibility for Relieving Transmission Constraints 33.4 Curtailments of Scheduled Deliveries 33.5 Allocation of Curtailments 33.6 Load Shedding 33.7 System Reliability 34 Rates and Charges 34.1 Monthly Demand Charge 34.2 Determination of Network Customer's Monthly Network Load 34.3 Determination of Transmission Provider's Monthly Transmission System Load 34.4 Redispatch Charge 34.5 Stranded Cost Recovery 35 Operating Arrangements 35.1 Operation under The Network Operating Agreement 35.2 Network Operating Agreement 35.3 Network Operating Committee Schedule 1 Scheduling, System Control and Dispatch Service Schedule 2 Reactive Supply and Voltage Control from Generation Sources Service Schedule 3 Regulation and Frequency Response Service Schedule 4 Energy Imbalance Service Schedule 5 Operating Reserve--Spinning Reserve Service Schedule 6 Operating Reserve--Supplemental Reserve Service Schedule 7 Long-Term Firm and Short-Term Firm Point-to-Point Transmission Service Schedule 8 Non-Firm Point-to-Point Transmission Service Attachment A Form of Service Agreement For Firm Point-to-Point Transmission Service Attachment B Form of Service Agreement For Non-Firm Point-to-Point Transmission Service Attachment C Methodology to Assess Available Transmission Capability Attachment D Methodology for Completing a System Impact Study Attachment E Index of Point-to-Point Transmission Service Customers Attachment F Service Agreement For Network Integration Transmission Service Attachment G Network Operating Agreement Attachment H Annual Transmission Revenue Requirement For Network Integration Transmission Service Attachment I Index of Network Integration Transmission Service Customers Attachment J Provisions Specific to the Transmission Provider Attachment K Transmission Provider Authorities and Obligations I. Common Service Provisions 1 Definitions 1.1 Ancillary Services: Those services that are necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the Transmission Provider's Transmission System in accordance with Good Utility Practice. 1.2 Annual Transmission Costs: The total annual cost of the Transmission System for purposes of Network Integration Transmission Service shall be the amount specified in Attachment H until amended by the Transmission Provider or modified by the Commission, pursuant to Federal Law. 1.3 Application: A request by an Eligible Customer for transmission service pursuant to the provisions of the Tariff. 1.4 Commission: The Federal Energy Regulatory Commission. 1.5 Completed Application: An Application that satisfies all of the information and other requirements of the Tariff, including any required application processing fee. 1.6 Control Area: An electric power system or combination of electric power systems to which a common automatic generation control scheme is applied in order to: (1) Match, at all times, the power output of the generators within the electric power system(s) and capacity and energy purchased from entities outside the electric power system(s), with the load within the electric power system(s); (2) Maintain scheduled interchange with other Control Areas, within the limits of Good Utility Practice; (3) Maintain the frequency of the electric power system(s) within reasonable limits in accordance with Good Utility Practice; and (4) Provide sufficient generating capacity to maintain operating reserves in accordance with Good Utility Practice. 1.7 Curtailment: A reduction in firm or non-firm transmission service in response to a transmission capacity shortage as a result of system reliability conditions. 1.8 Delivering Party: The entity supplying capacity and energy to be transmitted at Point(s) of Receipt. 1.9 Designated Agent: Any entity that performs actions or functions on behalf of the Transmission Provider, an Eligible Customer, or the Transmission Customer required under the Tariff. 1.10 Direct Assignment Facilities: Facilities or portions of facilities that are constructed by the Transmission Provider for the sole use/benefit of a particular Transmission Customer requesting service under the Tariff. Direct Assignment Facilities shall be specified in the Service Agreement that governs service to the Transmission Customer. 1.11 Eligible Customer: (i) Any electric utility (including the Transmission Provider and any power marketer), Federal power marketing agency, or any person generating electric energy for sale for resale is an Eligible Customer under the Tariff. Electric energy sold or produced by such entity may be electric energy produced in the United States, Canada or Mexico. However, with respect to transmission service that the Commission is prohibited from ordering by Section 212(h) of the Federal Power Act, such entity is eligible only if the service is provided pursuant to a state requirement that the Transmission Provider offer the unbundled transmission service, or pursuant to a voluntary offer of such service by the Transmission Provider. (ii) Any retail customer taking unbundled transmission service pursuant to a state requirement that the Transmission Provider offer the transmission service, or pursuant to a voluntary offer of such service by the Transmission Provider, is an Eligible Customer under the Tariff. 1.12 Facilities Study: An engineering study conducted by the Transmission Provider to determine the required modifications to the Transmission Provider's Transmission System, including the cost and scheduled completion date for such modifications, that will be required to provide the requested transmission service. [[Page 50579]] 1.13 Firm Point-To-Point Transmission Service: Transmission Service under this Tariff that is reserved and/or scheduled between specified Points of Receipt and Delivery pursuant to Part II of this Tariff. 1.14 Good Utility Practice: Any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region. 1.15 Interruption: A reduction in non-firm transmission service due to economic reasons pursuant to Section 14.7. 1.16 Load Ratio Share: Ratio of a Transmission Customer's Network Load to the Transmission Provider's total load computed in accordance with Sections 34.2 and 34.3 of the Network Integration Transmission Service under Part III of the Tariff and calculated on a rolling twelve month basis. 1.17 Load Shedding: The systematic reduction of system demand by temporarily decreasing load in response to transmission system or area capacity shortages, system instability, or voltage control considerations under Part III of the Tariff. 1.18 Long-Term Firm Point-To-Point Transmission Service: Firm Point- To-Point Transmission Service under Part II of the Tariff with a term of one year or more. 1.19 Native Load Customers: The wholesale and retail power customers of the Transmission Provider on whose behalf the Transmission Provider, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to construct and operate the Transmission Provider's system to meet the reliable electric needs of such customers. 1.20 Network Customer: An entity receiving transmission service pursuant to the terms of the Transmission Provider's Network Integration Transmission Service under Part III of the Tariff. 1.21 Network Integration Transmission Service: The transmission service provided under Part III of the Tariff. 1.22 Network Load: The load that a Network Customer designates for Network Integration Transmission Service under Part III of the Tariff. The Network Customer's Network Load shall include all load served by the output of any Network Resources designated by the Network Customer. A Network Customer may elect to designate less than its total load as Network Load but may not designate only part of the load at a discrete Point of Delivery. Where a Eligible Customer has elected not to designate a particular load at discrete points of delivery as Network Load, the Eligible Customer is responsible for making separate arrangements under Part II of the Tariff for any Point-To-Point Transmission Service that may be necessary for such non-designated load. 1.23 Network Operating Agreement: An executed agreement that contains the terms and conditions under which the Network Customer shall operate its facilities and the technical and operational matters associated with the implementation of Network Integration Transmission Service under Part III of the Tariff. 1.24 Network Operating Committee: A group made up of representatives from the Network Customer(s) and the Transmission Provider established to coordinate operating criteria and other technical considerations required for implementation of Network Integration Transmission Service under Part III of this Tariff. 1.25 Network Resource: Any designated generating resource owned, purchased, or leased by a Network Customer under the Network Integration Transmission Service Tariff. Network Resources do not include any resource, or any portion thereof, that is committed for sale to third parties or otherwise cannot be called upon to meet the Network Customer's Network Load on a non-interruptible basis. 1.26 Network Upgrades: Modifications or additions to transmission- related facilities that are integrated with and support the Transmission Provider's overall Transmission System for the general benefit of all users of such Transmission System. 1.27 Non-Firm Point-To-Point Transmission Service: Point-To-Point Transmission Service under the Tariff that is reserved and scheduled on an as-available basis and is subject to Curtailment or Interruption as set forth in Section 14.7 under Part II of the Tariff. Non-Firm Point- To-Point Transmission Service is available on a stand-alone basis for periods ranging from one hour to one month. 1.28 Open Access Same-Time Information System (OASIS): The information system and standards of conduct contained in Part 37 of the Commission's regulations and all additional requirements implemented by subsequent Commission orders dealing with OASIS. 1.29 Part I: Tariff Definitions and Common Service Provisions contained in Sections 2 through 12. 1.30 Part II: Tariff Sections 13 through 27 pertaining to Point-To- Point Transmission Service in conjunction with the applicable Common Service Provisions of Part I and appropriate Schedules and Attachments. 1.31 Part III: Tariff Sections 28 through 35 pertaining to Network Integration Transmission Service in conjunction with the applicable Common Service Provisions of Part I and appropriate Schedules and Attachments. 1.32 Parties: The Transmission Provider and the Transmission Customer receiving service under the Tariff. 1.33 Point(s) of Delivery: Point(s) on the Transmission Provider's Transmission System where capacity and energy transmitted by the Transmission Provider will be made available to the Receiving Party under Part II of the Tariff. The Point(s) of Delivery shall be specified in the Service Agreement for Long-Term Firm Point-to-Point Transmission Service. 1.34 Point(s) of Receipt: Point(s) of interconnection on the Transmission Provider's Transmission System where capacity and energy will be made available to the Transmission Provider by the Delivering Party under Part II of the Tariff. The Point(s) of Receipt shall be specified in the Service Agreement for Long-Term Firm Point-to-Point Transmission Service. 1.35 Point-To-Point Transmission Service: The reservation and transmission of capacity and energy on either a firm or non-firm basis from the Point(s) of Receipt to the Point(s) of Delivery under Part II of the Tariff. 1.36 Power Purchaser: The entity that is purchasing the capacity and energy to be transmitted under the Tariff. 1.37 Receiving Party: The entity receiving the capacity and energy transmitted by the Transmission Provider to Point(s) of Delivery. [[Page 50580]] 1.38 Regional Transmission Group (RTG): A voluntary organization of transmission owners, transmission users and other entities approved by the Commission to efficiently coordinate transmission planning (and expansion), operation and use on a regional (and interregional) basis. 1.39 Reserved Capacity: The maximum amount of capacity and energy that the Transmission Provider agrees to transmit for the Transmission Customer over the Transmission Provider's Transmission System between the Point(s) of Receipt and the Point(s) of Delivery under Part II of the Tariff. Reserved Capacity shall be expressed in terms of whole megawatts on a sixty (60) minute interval (commencing on the clock hour) basis. 1.40 Service Agreement: The initial agreement and any amendments or supplements thereto entered into by the Transmission Customer and the Transmission Provider for service under the Tariff. 1.41 Service Commencement Date: The date the Transmission Provider begins to provide service pursuant to the terms of an executed Service Agreement, or the date the Transmission Provider begins to provide service in accordance with Section 15.3 or Section 29.1 under the Tariff. 1.42 Short-Term Firm Point-To-Point Transmission Service: Firm Point- To-Point Transmission Service under Part II of the Tariff with a term of less than one year. 1.43 System Impact Study: An assessment by the Transmission Provider of (i) the adequacy of the Transmission System to accommodate a request for either Firm Point-To-Point Transmission Service or Network Integration Transmission Service and (ii) whether any additional costs may be incurred in order to provide transmission service. 1.44 Third-Party Sale: Any sale for resale in interstate commerce to a Power Purchaser that is not designated as part of Network Load under the Network Integration Transmission Service. 1.45 Transmission Customer: Any Eligible Customer (or its Designated Agent) that (i) executes a Service Agreement, or (ii) requests in writing that the Transmission Provider provide transmission service without a Service Agreement, pursuant to section 15.3 of the Tariff. This term is used in the Part I Common Service Provisions to include customers receiving transmission service under Part II and Part III of this Tariff. 1.46 Transmission Provider: The Regional Office of the Western Area Power Administration (Western) which owns, controls, or operates the facilities used for the transmission of electric energy in interstate commerce and provides transmission service under the Tariff with which the Transmission Customer has contracted to provide Transmission Service (See Attachment K). 1.47 Transmission Provider's Monthly Transmission System Peak: The maximum firm usage of the Transmission Provider's Transmission System in a calendar month. 1.48 Transmission Service: Point-To-Point Transmission Service provided under Part II of the Tariff on a firm and non-firm basis. 1.49 Transmission System: The facilities owned, controlled or operated by the Transmission Provider that are used to provide transmission service under Part II and Part III of the Tariff and are defined in Attachment K to the Tariff. 2 Initial Allocation and Renewal Procedures 2.1 Initial Allocation of Available Transmission Capability: For purposes of determining whether existing capability on the Transmission Provider's Transmission System is adequate to accommodate a request for firm service under this Tariff, all Completed Applications for new firm transmission service received during the initial sixty (60) day period commencing with the effective date of the Tariff will be deemed to have been filed simultaneously. A lottery system conducted by an independent party shall be used to assign priorities for Completed Applications filed simultaneously. All Completed Applications for firm transmission service received after the initial sixty (60) day period shall be assigned a priority pursuant to Section 13.2. 2.2 Reservation Priority For Existing Firm Service Customers: Existing firm service customers (wholesale requirements and transmission-only, with a contract term of one-year or more), have the right to continue to take transmission service from the Transmission Provider when the contract expires, rolls over or is renewed. This transmission reservation priority is independent of whether the existing customer continues to purchase capacity and energy from the Transmission Provider or elects to purchase capacity and energy from another supplier. If at the end of the contract term, the Transmission Provider's Transmission System cannot accommodate all of the requests for transmission service, the existing firm service customer must agree to accept a contract term at least equal to a competing request by any new Eligible Customer and to pay the current rate for such service. This transmission reservation priority for existing firm service customers is an ongoing right that may be exercised at the end of all firm contract terms of one-year or longer. 3 Ancillary Services Ancillary Services are needed with transmission service to maintain reliability within and among the Control Areas affected by the transmission service. The Transmission Provider is required to provide (or offer to arrange with the local Control Area operator as discussed below), and the Transmission Customer is required to purchase, the following Ancillary Services (i) Scheduling, System Control and Dispatch, and (ii) Reactive Supply and Voltage Control from Generation Sources. The Transmission Provider is required, to the extent possible, to offer to provide (or offer to arrange with the local Control Area operator as discussed below) the following Ancillary Services only to the Transmission Customer serving load within the Transmission Provider's Control Area (i) Regulation and Frequency Response, (ii) Energy Imbalance, (iii) Operating Reserve--Spinning, and (iv) Operating Reserve--Supplemental. The Transmission Customer serving load within the Transmission Provider's Control Area, is required to acquire these Ancillary Services, whether from the Transmission Provider, from a third party, or by self-supply. The Transmission Customer may not decline the Transmission Provider's offer of Ancillary Services unless it demonstrates that it has acquired the Ancillary Services from another source. The Transmission Provider will offer to provide the Transmission Customer Ancillary Services only to the extent surplus Federal generation is available for such services. However, the Transmission Provider may purchase Ancillary Services from others on behalf of the Transmission Customer under the terms of an agreement separate from the Service Agreement. The costs of such purchases on behalf of a Transmission Customer will be passed directly through to that Transmission Customer. The Transmission Customer must list in its Application which Ancillary [[Page 50581]] Services it will purchase from the Transmission Provider. If the Transmission Provider is a utility providing transmission service, but is not a Control Area operator, it may be unable to provide some or all of the Ancillary Services. In this case, the Transmission Provider can fulfill its obligation to provide Ancillary Services by acting as the Transmission Customer's agent to secure these Ancillary Services from the Control Area operator. The Transmission Customer may elect to (i) have the Transmission Provider act as its agent, (ii) secure the Ancillary Services directly from the Control Area operator, or (iii) secure the Ancillary Services (discussed in Schedules 3, 4, 5, and 6) from a third party or by self-supply when technically feasible. The Transmission Provider shall specify the rate treatment and all related terms and conditions in the event of an unauthorized use of Ancillary Services by the Transmission Customer. The specific Ancillary Services, prices and/or compensation methods for each are described on the Schedules that are attached to and made a part of the Tariff. Three principal requirements apply to discounts for Ancillary Services provided by the Transmission Provider in conjunction with its provision of transmission service as follows: (1) Any offer of a discount made by the Transmission Provider must be announced to all Eligible Customers solely by posting on the OASIS, (2) any customer- initiated requests for discounts (including requests for use by one's wholesale merchant or an affiliate's use) must occur solely by posting on the OASIS, and (3) once a discount is negotiated, details must be immediately posted on the OASIS. A discount agreed upon for an Ancillary Service must be offered for the same period to all Eligible Customers on the Transmission Provider's system. Sections 3.1 through 3.6 below list the six Ancillary Services. 3.1 Scheduling, System Control and Dispatch Service: The rates and/or methodology are described in Schedule 1. 3.2 Reactive Supply and Voltage Control from Generation Sources Service: The rates and/or methodology are described in Schedule 2. 3.3 Regulation and Frequency Response Service: Where applicable the rates and/or methodology are described in Schedule 3. 3.4 Energy Imbalance Service: Where applicable the rates and/or methodology are described in Schedule 4. 3.5 Operating Reserve--Spinning Reserve Service: Where applicable the rates and/or methodology are described in Schedule 5. 3.6 Operating Reserve--Supplemental Reserve Service: Where applicable the rates and/or methodology are described in Schedule 6. 4 Open Access Same-Time Information System (OASIS) Terms and conditions regarding Open Access Same-Time Information System and standards of conduct are set forth in 18 CFR 37 of the Commission's regulations (Open Access Same-Time Information System and Standards of Conduct for Public Utilities). In the event available transmission capability as posted on the OASIS is insufficient to accommodate a request for firm transmission service, additional studies may be required as provided by this Tariff pursuant to Sections 19 and 32. 5 Local Furnishing Bonds 5.1 Transmission Providers That Own Facilities Financed by Local Furnishing Bonds: This provision is applicable only to Transmission Providers that have financed facilities for the local furnishing of electric energy with tax-exempt bonds, as described in Section 142(f) of the Internal Revenue Code (``local furnishing bonds''). Notwithstanding any other provision of this Tariff, the Transmission Provider shall not be required to provide transmission service to any Eligible Customer pursuant to this Tariff if the provision of such transmission service would jeopardize the tax-exempt status of any local furnishing bond(s) used to finance the Transmission Provider's facilities that would be used in providing such transmission service. 5.2 Alternative Procedures for Requesting Transmission Service: (i) If the Transmission Provider determines that the provision of transmission service requested by an Eligible Customer would jeopardize the tax-exempt status of any local furnishing bond(s) used to finance its facilities that would be used in providing such transmission service, it shall advise the Eligible Customer within thirty (30) days of receipt of the Completed Application. (ii) If the Eligible Customer thereafter renews its request for the same transmission service referred to in (i) by tendering an application under Section 211 of the Federal Power Act, the Transmission Provider, within ten (10) days of receiving a copy of the Section 211 application, will waive its rights to a request for service under Section 213(a) of the Federal Power Act and to the issuance of a proposed order under Section 212(c) of the Federal Power Act. The Commission, upon receipt of the Transmission Provider's waiver of its rights to a request for service under Section 213(a) of the Federal Power Act and to the issuance of a proposed order under Section 212(c) of the Federal Power Act, shall issue an order under Section 211 of the Federal Power Act. Upon issuance of the order under Section 211 of the Federal Power Act, the Transmission Provider shall be required to provide the requested transmission service in accordance with the terms and conditions of this Tariff. 6 Reciprocity A Transmission Customer receiving transmission service under this Tariff agrees to provide comparable transmission service that it is capable of providing to the Transmission Provider on similar terms and conditions over facilities used for the transmission of electric energy owned, controlled or operated by the Transmission Customer and over facilities used for the transmission of electric energy owned, controlled or operated by the Transmission Customer's corporate affiliates. A Transmission Customer that is a member of a power pool or Regional Transmission Group also agrees to provide comparable transmission service to the members of such power pool and Regional Transmission Group on similar terms and conditions over facilities used for the transmission of electric energy owned, controlled or operated by the Transmission Customer and over facilities used for the transmission of electric energy owned, controlled or operated by the Transmission Customer's corporate affiliates. This reciprocity requirement applies not only to the Transmission Customer that obtains transmission service under the Tariff, but also to all parties to a transaction that involves the use of transmission service under the Tariff, including the power seller, buyer and any intermediary, such as a power marketer. This reciprocity requirement also applies to any Eligible Customer that owns, controls or operates transmission facilities that uses an intermediary, such as a power marketer, to request transmission service under the Tariff. If the Transmission Customer does not own, control or operate transmission facilities, it must include [[Page 50582]] in its Application a sworn statement of one of its duly authorized officers or other representatives that the purpose of its Application is not to assist an Eligible Customer to avoid the requirements of this provision. 7 Billing and Payment 7.1 Billing Procedures: Within a reasonable time after the first day of each month, the Transmission Provider shall submit an invoice to the Transmission Customer for the charges for all services furnished under the Tariff during the preceding month. The invoice shall be paid by the Transmission Customer within twenty (20) days of receipt. All payments shall be made in immediately available funds payable to the Transmission Provider, or by wire transfer to a bank named by the Transmission Provider. 7.2 Interest on Unpaid Balances: Interest on any unpaid amounts (including amounts placed in escrow) shall be calculated in accordance with the methodology specified for interest on refunds in the Commission's regulations at 18 CFR 35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated from the due date of the bill to the date of payment. When payments are made by mail, bills shall be considered as having been paid on the date of receipt by the Transmission Provider. 7.3 Customer Default: In the event the Transmission Customer fails, for any reason other than a billing dispute as described below, to make payment to the Transmission Provider on or before the due date as described above, and such failure of payment is not corrected within thirty (30) calendar days after the Transmission Provider notifies the Transmission Customer to cure such failure, a default by the Transmission Customer shall be deemed to exist. Within the same 30 calendar days after notice of failure to make payment, the Transmission Customer shall have the right of appeal to the Administrator of Western. The Transmission Provider shall submit its recommendation to the Administrator for review and approval, but shall not terminate service until the Administrator makes a determination on the Transmission Customer's appeal. In the event of a billing dispute between the Transmission Provider and the Transmission Customer, the Transmission Provider will continue to provide service under the Service Agreement as long as the Transmission Customer (i) continues to make all payments not in dispute, and (ii) pays into an independent escrow account the portion of the invoice in dispute, pending resolution of such dispute. If the Transmission Customer fails to meet these two requirements for continuation of service, then the Transmission Provider may provide notice to the Transmission Customer of its intention to suspend service in sixty (60) days, in accordance with Commission policy. 8 Accounting for the Transmission Provider's Use of the Tariff The Transmission Provider shall record the following amounts, as outlined below. 8.1 Transmission Revenues: Include in a separate operating revenue account or subaccount the revenues it receives from Transmission Service when making Third-Party Sales under Part II of the Tariff. 8.2 Study Costs and Revenues: Include in a separate transmission operating expense account or subaccount, costs properly chargeable to expense that are incurred to perform any System Impact Studies or Facilities Studies which the Transmission Provider conducts to determine if it must construct new transmission facilities or upgrades necessary for its own uses, including making Third-Party Sales under the Tariff; and include in a separate operating revenue account or subaccount the revenues received for System Impact Studies or Facilities Studies performed when such amounts are separately stated and identified in the Transmission Customer's billing under the Tariff. 9 Regulatory Filings Nothing contained in the Tariff or any Service Agreement shall be construed as affecting in any way the ability of any Party receiving service under the Tariff to exercise its rights under the Federal Power Act and pursuant to the Commission's rules and regulations promulgated thereunder. 10 Force Majeure and Indemnification 10.1 Force Majeure: An event of Force Majeure means any act of God, labor disturbance, act of the public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any Curtailment, order, regulation or restriction imposed by governmental military or lawfully established civilian authorities, or any other cause beyond a Party's control. A Force Majeure event does not include an act of negligence or intentional wrongdoing. Neither the Transmission Provider nor the Transmission Customer will be considered in default as to any obligation under this Tariff if prevented from fulfilling the obligation due to an event of Force Majeure. However, a Party whose performance under this Tariff is hindered by an event of Force Majeure shall make all reasonable efforts to perform its obligations under this Tariff. Either Party rendered unable to fulfill any of its obligations under the Service Agreement by reason of an uncontrollable force shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch. 10.2 Indemnification: The Transmission Customer shall at all times indemnify, defend, and save the Transmission Provider harmless from, any and all damages, losses, claims, including claims and actions relating to injury to or death of any person or damage to property, demands, suits, recoveries, costs and expenses, court costs, attorney fees, and all other obligations by or to third parties, arising out of or resulting from the Transmission Provider's performance of its obligations under this Tariff on behalf of the Transmission Customer, except in cases of negligence or intentional wrongdoing by the Transmission Provider. The liability of the Transmission Provider shall be determined in accordance with the provisions of the Federal Tort Claims Act, as amended. 11 Creditworthiness For the purpose of determining the ability of the Transmission Customer to meet its obligations related to service hereunder, the Transmission Provider may require reasonable credit review procedures. This review shall be made in accordance with standard commercial practices. In addition, the Transmission Provider may require the Transmission Customer to provide and maintain in effect during the term of the Service Agreement, an unconditional and irrevocable letter of credit as security to meet its responsibilities and obligations under the Tariff, or an alternative form of security proposed by the Transmission Customer and acceptable to the Transmission Provider and consistent with commercial practices established by the Uniform Commercial Code that protects the Transmission Provider against the risk of non- payment. [[Page 50583]] 12 Dispute Resolution Procedures 12.1 Internal Dispute Resolution Procedures: Any dispute between a Transmission Customer and the Transmission Provider involving transmission service under the Tariff shall be referred to a designated senior representative of the Transmission Provider and a senior representative of the Transmission Customer for resolution on an informal basis as promptly as practicable. 12.2 Disputes: Any dispute regarding service provided under the Service Agreement will be resolved in a manner consistent with the Administrative Dispute Resolution Act, as amended, subject to statutory and regulatory limits on Western's authority to submit disputes to arbitration. 12.3 Rights Under The Federal Power Act: Nothing in this section shall restrict the rights of any party to file a Complaint with the Commission under relevant provisions of the Federal Power Act. Part II. Point-To-Point Transmission Service Preamble The Transmission Provider will provide Firm and Non-Firm Point-To- Point Transmission Service pursuant to the applicable terms and conditions of this Tariff. Point-To-Point Transmission Service is for the receipt of capacity and energy at designated Point(s) of Receipt and the transmission of such capacity and energy to designated Point(s) of Delivery. 13 Nature of Firm Point-To-Point Transmission Service 13.1 Term: The minimum term of Firm Point-To-Point Transmission Service shall be one day and the maximum term shall be specified in the Service Agreement. 13.2 Reservation Priority: Long-Term Firm Point-To-Point Transmission Service shall be available on a first-come, first-served basis i.e., in the chronological sequence in which each Transmission Customer reserved service. Reservations for Short-Term Firm Point-To-Point Transmission Service will be conditional based upon the length of the requested transaction. If the Transmission System becomes oversubscribed, requests for longer term service may preempt requests for shorter term service up to the following deadlines; one day before the commencement of daily service, one week before the commencement of weekly service, and one month before the commencement of monthly service. Before the conditional reservation deadline, if available transmission capability is insufficient to satisfy all Applications, an Eligible Customer with a reservation for shorter term service has the right of first refusal to match any longer term reservation before losing its reservation priority. A longer term competing request for Short-Term Firm Point-To- Point Transmission Service will be granted if the Eligible Customer with the right of first refusal does not agree to match the competing request within 24 hours (or earlier if necessary to comply with the scheduling deadlines provided in Section 13.8) from being notified by the Transmission Provider of a longer-term competing request for Short- Term Firm Point-To-Point Transmission Service. After the conditional reservation deadline, service will commence pursuant to the terms of Part II of the Tariff. Firm Point-To-Point Transmission Service will always have a reservation priority over Non-Firm Point-To-Point Transmission Service under the Tariff. All Long-Term Firm Point-To- Point Transmission Service will have equal reservation priority with Native Load Customers and Network Customers. Reservation priorities for existing firm service customers are provided in Section 2.2. 13.3 Use of Firm Transmission Service by the Transmission Provider: The Transmission Provider will be subject to the rates, terms and conditions of Part II of the Tariff when making Third-Party Sales under agreements executed on or after November 25, 1997. The Transmission Provider will maintain separate accounting, pursuant to Section 8, for any use of the Point-To-Point Transmission Service to make Third-Party Sales. 13.4 Service Agreements: The Transmission Provider shall offer a standard form Firm Point-To-Point Transmission Service Agreement (Attachment A) to an Eligible Customer when it submits a Completed Application for Long-Term Firm Point-To-Point Transmission Service. The Transmission Provider shall offer a standard form Firm Point-to-Point Transmission Service Agreement (Attachment A) to an Eligible Customer when it first submits a Completed Application for Short-Term Firm Point-to-Point Transmission Service pursuant to the Tariff. 13.5 Transmission Customer Obligations for Facility Additions or Redispatch Costs: In cases where the Transmission Provider determines that the Transmission System is not capable of providing Firm Point-To- Point Transmission Service without (1) degrading or impairing the reliability of service to Native Load Customers, Network Customers and other Transmission Customers taking Firm Point-To-Point Transmission Service, or (2) interfering with the Transmission Provider's ability to meet prior firm contractual commitments to others, the Transmission Provider will be obligated to expand or upgrade its Transmission System pursuant to the terms of Section 15.4. The Transmission Customer must agree to compensate the Transmission Provider in advance for any necessary transmission facility additions pursuant to the terms of Section 27. To the extent the Transmission Provider can relieve any system constraint more economically by redispatching the Transmission Provider's resources than through constructing Network Upgrades, it shall do so, provided that the Eligible Customer agrees to compensate the Transmission Provider pursuant to the terms of Section 27. Any redispatch, Network Upgrade or Direct Assignment Facilities costs to be charged to the Transmission Customer on an incremental basis under the Tariff will be specified in the Service Agreement or a separate agreement, as appropriate, prior to initiating service. 13.6 Curtailment of Firm Transmission Service: In the event that a Curtailment on the Transmission Provider's Transmission System, or a portion thereof, is required to maintain reliable operation of such system, Curtailments will be made on a non-discriminatory basis to the transaction(s) that effectively relieve the constraint. If multiple transactions require Curtailment, to the extent practicable and consistent with Good Utility Practice, the Transmission Provider will curtail service to Network Customers and Transmission Customers taking Firm Point-To-Point Transmission Service on a basis comparable to the curtailment of service to the Transmission Provider's Native Load Customers. All Curtailments will be made on a non-discriminatory basis, however, Non-Firm Point-To-Point Transmission Service shall be subordinate to Firm Transmission Service. When the Transmission Provider determines that an electrical emergency exists on its Transmission System and [[Page 50584]] implements emergency procedures to Curtail Firm Transmission Service, the Transmission Customer shall make the required reductions upon request of the Transmission Provider. However, the Transmission Provider reserves the right to Curtail, in whole or in part, any Firm Transmission Service provided under the Tariff when, in the Transmission Provider's sole discretion, an emergency or other unforeseen condition impairs or degrades the reliability of its Transmission System. The Transmission Provider will notify all affected Transmission Customers in a timely manner of any scheduled Curtailments. 13.7 Classification of Firm Transmission Service: (a) The Transmission Customer taking Firm Point-To-Point Transmission Service may (1) change its Receipt and Delivery Points to obtain service on a non-firm basis consistent with the terms of Section 22.1 or (2) request a modification of the Points of Receipt or Delivery on a firm basis pursuant to the terms of Section 22.2. (b) The Transmission Customer may purchase transmission service to make sales of capacity and energy from multiple generating units that are on the Transmission Provider's Transmission System. For such a purchase of transmission service, the resources will be designated as multiple Points of Receipt, unless the multiple generating units are at the same generating plant in which case the units would be treated as a single Point of Receipt. (c) The Transmission Provider shall provide firm deliveries of capacity and energy from the Point(s) of Receipt to the Point(s) of Delivery. Each Point of Receipt at which firm transmission capacity is reserved by the Transmission Customer shall be set forth in the Firm Point-To-Point Service Agreement for Long-Term Firm Transmission Service along with a corresponding capacity reservation associated with each Point of Receipt. Points of Receipt and corresponding capacity reservations shall be as mutually agreed upon by the Parties for Short- Term Firm Transmission. Each Point of Delivery at which firm transmission capacity is reserved by the Transmission Customer shall be set forth in the Firm Point-To-Point Service Agreement for Long-Term Firm Transmission Service along with a corresponding capacity reservation associated with each Point of Delivery. Points of Delivery and corresponding capacity reservations shall be as mutually agreed upon by the Parties for Short-Term Firm Transmission. The greater of either (1) the sum of the capacity reservations at the Point(s) of Receipt, or (2) the sum of the capacity reservations at the Point(s) of Delivery shall be the Transmission Customer's Reserved Capacity. The Transmission Customer will be billed for its Reserved Capacity under the terms of Schedule 7. The Transmission Customer may not exceed its firm capacity reserved at each Point of Receipt and each Point of Delivery except as otherwise specified in Section 22. The Transmission Provider shall specify the rate treatment and all related terms and conditions applicable in the event that a Transmission Customer, (including Third-Party Sales by the Transmission Provider) exceeds its firm reserved capacity at any Point of Receipt or Point of Delivery. 13.8 Scheduling of Firm Point-To-Point Transmission Service: Schedules for the Transmission Customer's Firm Point-To-Point Transmission Service must be submitted to the Transmission Provider no later than 10:00 a.m. [or a reasonable time that is generally accepted in the region and is consistently adhered to by the Transmission Provider] of the day prior to commencement of such service. Schedules submitted after 10:00 a.m. will be accommodated, if practicable. Hour-to-hour schedules of any capacity and energy that is to be delivered must be stated in increments of 1,000 kW per hour [or a reasonable increment that is generally accepted in the region and is consistently adhered to by the Transmission Provider]. Transmission Customers within the Transmission Provider's service area with multiple requests for Transmission Service at a Point of Receipt, each of which is under 1,000 kW per hour, may consolidate their service requests at a common point of receipt into units of 1,000 kW per hour for scheduling and billing purposes. Scheduling changes will be permitted up to twenty (20) minutes [or a reasonable time that is generally accepted in the region and is consistently adhered to by the Transmission Provider] before the start of the next clock hour provided that the Delivering Party and Receiving Party also agree to the schedule modification. The Transmission Provider will furnish to the Delivering Party's system operator, hour-to-hour schedules equal to those furnished by the Receiving Party (unless reduced for losses) and shall deliver the capacity and energy provided by such schedules. Should the Transmission Customer, Delivering Party or Receiving Party revise or terminate any schedule, such party shall immediately notify the Transmission Provider, and the Transmission Provider shall have the right to adjust accordingly the schedule for capacity and energy to be received and to be delivered. 14 Nature of Non-Firm Point-To-Point Transmission Service 14.1 Term: Non-Firm Point-To-Point Transmission Service will be available for periods ranging from one (1) hour to one (1) month. However, a Purchaser of Non-Firm Point-To-Point Transmission Service will be entitled to reserve a sequential term of service (such as a sequential monthly term without having to wait for the initial term to expire before requesting another monthly term) so that the total time period for which the reservation applies is greater than one month, subject to the requirements of Section 18.3. 14.2 Reservation Priority: Non-Firm Point-To-Point Transmission Service shall be available from transmission capability in excess of that needed for reliable service to Native Load Customers, Network Customers and other Transmission Customers taking Long-Term and Short- Term Firm Point-To-Point Transmission Service. A higher priority will be assigned to reservations with a longer duration of service. In the event the Transmission System is constrained, competing requests of equal duration will be prioritized based on the highest price offered by the Eligible Customer for the Transmission Service. Eligible Customers that have already reserved shorter term service have the right of first refusal to match any longer term reservation before being preempted. A longer term competing request for Non-Firm Point-To- Point Transmission Service will be granted if the Eligible Customer with the right of first refusal does not agree to match the competing request: (a) Immediately for hourly Non-Firm Point-To-Point Transmission Service after notification by the Transmission Provider; and, (b) within 24 hours (or earlier if necessary to comply with the scheduling deadlines provided in Section 14.6) for Non-Firm Point-To- [[Page 50585]] Point Transmission Service other than hourly transactions after notification by the Transmission Provider. Transmission service for Network Customers from resources other than designated Network Resources will have a higher priority than any Non-Firm Point-To-Point Transmission Service. Non-Firm Point-To-Point Transmission Service over secondary Point(s) of Receipt and Point(s) of Delivery will have the lowest reservation priority under the Tariff. 14.3 Use of Non-Firm Point-To-Point Transmission Service by the Transmission Provider: The Transmission Provider will be subject to the rates, terms and conditions of Part II of the Tariff when making Third- Party Sales under agreements executed on or after November 25, 1997. The Transmission Provider will maintain separate accounting, pursuant to Section 8, for any use of Non-Firm Point-To-Point Transmission Service to make Third-Party Sales. 14.4 Service Agreements: The Transmission Provider shall offer a standard form Non-Firm Point-To-Point Transmission Service Agreement (Attachment D) to an Eligible Customer when it first submits a Completed Application for Non-Firm Point-To-Point Transmission Service pursuant to the Tariff. 14.5 Classification of Non-Firm Point-To-Point Transmission Service: Non-Firm Point-To-Point Transmission Service shall be offered under terms and conditions contained in Part II of the Tariff. The Transmission Provider undertakes no obligation under the Tariff to plan its Transmission System in order to have sufficient capacity for Non- Firm Point-To-Point Transmission Service. Parties requesting Non-Firm Point-To-Point Transmission Service for the transmission of firm power do so with the full realization that such service is subject to availability and to Curtailment or Interruption under the terms of the Tariff. The Transmission Provider shall specify the rate treatment and all related terms and conditions applicable in the event that a Transmission Customer (including Third-Party Sales by the Transmission Provider) exceeds its non-firm capacity reservation. Non-Firm Point-To- Point Transmission Service shall include transmission of energy on an hourly basis and transmission of scheduled short-term capacity and energy on a daily, weekly or monthly basis, but not to exceed one month's reservation for any one Application under Schedule 8. 14.6 Scheduling of Non-Firm Point-To-Point Transmission Service: Schedules for Non-Firm Point-To-Point Transmission Service must be submitted to the Transmission Provider no later than 2:00 p.m. [or a reasonable time that is generally accepted in the region and is consistently adhered to by the Transmission Provider] of the day prior to commencement of such service. Schedules submitted after 2:00 p.m. will be accommodated, if practicable. Hour-to-hour schedules of energy that are to be delivered must be stated in increments of 1,000 kW per hour [or a reasonable increment that is generally accepted in the region and is consistently adhered to by the Transmission Provider]. Transmission Customers within the Transmission Provider's service area with multiple requests for Transmission Service at a Point of Receipt, each of which is under 1,000 kW per hour, may consolidate their schedules at a common Point of Receipt into units of 1,000 kW per hour. Scheduling changes will be permitted up to twenty (20) minutes [or a reasonable time that is generally accepted in the region and is consistently adhered to by the Transmission Provider] before the start of the next clock hour provided that the Delivering Party and Receiving Party also agree to the schedule modification. The Transmission Provider will furnish to the Delivering Party's system operator, hour- to-hour schedules equal to those furnished by the Receiving Party (unless reduced for losses) and shall deliver the capacity and energy provided by such schedules. Should the Transmission Customer, Delivering Party or Receiving Party revise or terminate any schedule, such party shall immediately notify the Transmission Provider, and the Transmission Provider shall have the right to adjust accordingly the schedule for capacity and energy to be received and to be delivered. 14.7 Curtailment or Interruption of Service: The Transmission Provider reserves the right to Curtail, in whole or in part, Non-Firm Point-To- Point Transmission Service provided under the Tariff for reliability reasons when, an emergency or other unforeseen condition threatens to impair or degrade the reliability of its Transmission System. The Transmission Provider reserves the right to Interrupt, in whole or in part, Non-Firm Point-To-Point Transmission Service provided under the Tariff for economic reasons in order to accommodate (1) a request for Firm Transmission Service, (2) a request for Non-Firm Point-To-Point Transmission Service of greater duration, (3) a request for Non-Firm Point-To-Point Transmission Service of equal duration with a higher price, or (4) transmission service for Network Customers from non- designated resources. The Transmission Provider also will discontinue or reduce service to the Transmission Customer to the extent that deliveries for transmission are discontinued or reduced at the Point(s) of Receipt. Where required, Curtailments or Interruptions will be made on a non-discriminatory basis to the transaction(s) that effectively relieve the constraint, however, Non-Firm Point-To-Point Transmission Service shall be subordinate to Firm Transmission Service. If multiple transactions require Curtailment or Interruption, to the extent practicable and consistent with Good Utility Practice, Curtailments or Interruptions will be made to transactions of the shortest term (e.g., hourly non-firm transactions will be Curtailed or Interrupted before daily non-firm transactions and daily non-firm transactions will be Curtailed or Interrupted before weekly non-firm transactions). Transmission service for Network Customers from resources other than designated Network Resources will have a higher priority than any Non- Firm Point-To-Point Transmission Service under the Tariff. Non-Firm Point-To-Point Transmission Service over secondary Point(s) of Receipt and Point(s) of Delivery will have a lower priority than any Non-Firm Point-To-Point Transmission Service under the Tariff. The Transmission Provider will provide advance notice of Curtailment or Interruption where such notice can be provided consistent with Good Utility Practice. 15 Service Availability 15.1 General Conditions: The Transmission Provider will provide Firm and Non-Firm Point-To-Point Transmission Service over, on or across its Transmission System to any Transmission Customer that has met the requirements of Section 16. 15.2 Determination of Available Transmission Capability: A description of the Transmission Provider's specific methodology for assessing available transmission capability posted on the Transmission [[Page 50586]] Provider's OASIS (Section 4) is contained in Attachment C of the Tariff. In the event sufficient transmission capability may not exist to accommodate a service request, the Transmission Provider will respond by performing a System Impact Study. 15.3 Initiating Service in the Absence of an Executed Service Agreement: If the Transmission Provider and the Transmission Customer requesting Firm or Non-Firm Point-To-Point Transmission Service cannot agree on all the terms and conditions of the Point-To-Point Service Agreement, the Transmission Provider shall commence providing Transmission Service subject to the Transmission Customer agreeing to (i) compensate the Transmission Provider at the existing rate placed in effect pursuant to applicable Federal law and regulations , and (ii) comply with the terms and conditions of the Tariff including paying the appropriate processing fees in accordance with the terms of Section 17.3. If the Transmission Customer cannot accept all of the terms and conditions of the offered Service Agreement, the Transmission Customer may request resolution of the unacceptable terms and conditions under Section 12, Dispute Resolution Procedures, of the Tariff. Any changes resulting from the Dispute Resolution Procedures will be effective upon the date of initial service. 15.4 Obligation to Provide Transmission Service that Requires Expansion or Modification of the Transmission System: If the Transmission Provider determines that it cannot accommodate a Completed Application for Firm Point-To-Point Transmission Service because of insufficient capability on its Transmission System, the Transmission Provider will use due diligence to expand or modify its Transmission System to provide the requested Firm Transmission Service, provided the Transmission Customer agrees to compensate the Transmission Provider in advance for such costs pursuant to the terms of Section 27. The Transmission Provider will conform to Good Utility Practice in determining the need for new facilities and in the design and construction of such facilities. The obligation applies only to those facilities that the Transmission Provider has the right to expand or modify. 15.5 Deferral of Service: The Transmission Provider may defer providing service until it completes construction of new transmission facilities or upgrades needed to provide Firm Point-To-Point Transmission Service whenever the Transmission Provider determines that providing the requested service would, without such new facilities or upgrades, impair or degrade reliability to any existing firm services. 15.6 Other Transmission Service Schedules: Eligible Customers receiving transmission service under other agreements on file with the Commission may continue to receive transmission service under those agreements until such time as those agreements may be modified by the Commission. 15.7 Real Power Losses: Real Power Losses are associated with all transmission service. The Transmission Provider is not obligated to provide Real Power Losses. The Transmission Customer is responsible for replacing losses associated with all transmission service as calculated by the Transmission Provider. The applicable Real Power Loss factors are specified in the Service Agreements. 16 Transmission Customer Responsibilities 16.1 Conditions Required of Transmission Customers: Point-To-Point Transmission Service shall be provided by the Transmission Provider only if the following conditions are satisfied by the Transmission Customer: a. The Transmission Customer has pending a Completed Application for service; b. The Transmission Customer meets the creditworthiness criteria set forth in Section 11; c. The Transmission Customer will have arrangements in place for any other transmission service necessary to effect the delivery from the generating source to the Transmission Provider prior to the time service under Part II of the Tariff commences; d. The Transmission Customer agrees to pay for any facilities constructed and chargeable to such Transmission Customer under Part II of the Tariff, whether or not the Transmission Customer takes service for the full term of its reservation; and e. The Transmission Customer has executed a Point-To-Point Service Agreement or has agreed to receive service pursuant to Section 15.3. 16.2 Transmission Customer Responsibility for Third-Party Arrangements: Any scheduling arrangements that may be required by other electric systems shall be the responsibility of the Transmission Customer requesting service. The Transmission Customer shall provide, unless waived by the Transmission Provider, notification to the Transmission Provider identifying such systems and authorizing them to schedule the capacity and energy to be transmitted by the Transmission Provider pursuant to Part II of the Tariff on behalf of the Receiving Party at the Point of Delivery or the Delivering Party at the Point of Receipt. However, the Transmission Provider will undertake reasonable efforts to assist the Transmission Customer in making such arrangements, including without limitation, providing any information or data required by such other electric system pursuant to Good Utility Practice. 17 Procedures for Arranging Firm Point-To-Point Transmission Service 17.1 Application: A request for Firm Point-To-Point Transmission Service for periods of one year or longer must contain a written Application to appropriate Regional Office, as identified in Attachment K to the Tariff, at least sixty (60) days in advance of the calendar month in which service is to commence. The Transmission Provider will consider requests for such firm service on shorter notice when feasible. Requests for firm service for periods of less than one year shall be subject to expedited procedures that shall be negotiated between the Parties within the time constraints provided in Section 17.5. All Firm Point-To-Point Transmission Service requests should be submitted by entering the information listed below on the Transmission Provider's OASIS. Prior to implementation of the Transmission Provider's OASIS, a Completed Application may be submitted by (i) transmitting the required information to the Transmission Provider by telefax, or (ii) providing the information by telephone over the Transmission Provider's time recorded telephone line. Each of these methods will provide a time-stamped record for establishing the priority of the Application. 17.2 Completed Application: A Completed Application shall provide all of the information included in 18 CFR 2.20 including but not limited to the following: (i) The identity, address, telephone number and facsimile number of the entity requesting service; [[Page 50587]] (ii) A statement that the entity requesting service is, or will be upon commencement of service, an Eligible Customer under the Tariff; (iii) The location of the Point(s) of Receipt and Point(s) of Delivery and the identities of the Delivering Parties and the Receiving Parties; (iv) The location of the generating facility(ies) supplying the capacity and energy and the location of the load ultimately served by the capacity and energy transmitted. The Transmission Provider will treat this information as confidential except to the extent that disclosure of this information is required by the Tariff, by regulatory or judicial order, for reliability purposes pursuant to Good Utility Practice or pursuant to RTG transmission information sharing agreements. The Transmission Provider shall treat this information consistent with the standards of conduct contained in Part 37 of the Commission's regulations; (v) A description of the supply characteristics of the capacity and energy to be delivered; (vi) An estimate of the capacity and energy expected to be delivered to the Receiving Party; (vii) The Service Commencement Date and the term of the requested Transmission Service; (viii) The transmission capacity requested for each Point of Receipt and each Point of Delivery on the Transmission Provider's Transmission System; customers may combine their requests for service in order to satisfy the minimum transmission capacity requirement; The Transmission Provider shall treat this information consistent with the standards of conduct contained in Part 37 of the Commission's regulations. 17.3 Processing Fee: A Completed Application for Firm Point-To-Point Transmission Service also shall include a non-refundable processing fee. Such fee shall be applicable to all Transmission Customers for firm Transmission Service requests of one year or longer. Individual Transmission Provider processing fees will be calculated using the number of estimated hours it will take to process an application and will be set forth in Attachment K. This fee does not apply to costs to complete System Impact Studies or Facility Studies or to add new facilities. 17.4 Notice of Deficient Application: If an Application fails to meet the requirements of the Tariff, the Transmission Provider shall notify the entity requesting service within fifteen (15) days of receipt of the reasons for such failure. The Transmission Provider will attempt to remedy minor deficiencies in the Application through informal communications with the Eligible Customer. If such efforts are unsuccessful, the Transmission Provider shall return the Application. Upon receipt of a new or revised Application that fully complies with the requirements of Part II of the Tariff, the Eligible Customer shall be assigned a new priority consistent with the date of the new or revised Application. 17.5 Response to a Completed Application: Following receipt of a Completed Application for Firm Point-To-Point Transmission Service, the Transmission Provider shall make a determination of available transmission capability as required in Section 15.2. The Transmission Provider shall notify the Eligible Customer as soon as practicable, but not later than thirty (30) days after the date of receipt of a Completed Application either (i) if it will be able to provide service without performing a System Impact Study or (ii) if such a study is needed to evaluate the impact of the Application pursuant to Section 19.1. Responses by the Transmission Provider must be made as soon as practicable to all completed applications (including applications by its own merchant function) and the timing of such responses must be made on a non-discriminatory basis. 17.6 Execution of a Service Agreement: Whenever the Transmission Provider determines that a System Impact Study is not required and that the service can be provided, it shall notify the Eligible Customer as soon as practicable but no later than thirty (30) days after receipt of the Completed Application. Where a System Impact Study is required, the provisions of Section 19 will govern the execution of a Service Agreement. Failure of an Eligible Customer to execute and return the Service Agreement or request service without an executed Service Agreement pursuant to Section 15.3, within fifteen (15) days after it is tendered by the Transmission Provider will be deemed a withdrawal and termination of the Application. Nothing herein limits the right of an Eligible Customer to file another Application after such withdrawal and termination. 17.7 Extensions for Commencement of Service: The Transmission Customer can obtain up to five (5) one-year extensions for the commencement of service. The Transmission Customer may postpone service by paying a non-refundable annual reservation fee equal to one-month's charge for Firm Transmission Service for each year or fraction thereof. If during any extension for the commencement of service an Eligible Customer submits a Completed Application for Firm Transmission Service, and such request can be satisfied only by releasing all or part of the Transmission Customer's Reserved Capacity, the original Reserved Capacity will be released unless the following condition is satisfied. Within thirty (30) days, the original Transmission Customer agrees to pay the Firm Point-To-Point transmission rate for its Reserved Capacity concurrent with the new Service Commencement Date. In the event the Transmission Customer elects to release the Reserved Capacity, the reservation fees or portions thereof previously paid will be forfeited. 18 Procedures for Arranging Non-Firm Point-To-Point Transmission Service 18.1 Application: Eligible Customers seeking Non-Firm Point-To-Point Transmission Service must submit a Completed Application to the Transmission Provider. Applications should be submitted by entering the information listed below on the Transmission Provider's OASIS. Prior to implementation of the Transmission Provider's OASIS, a Completed Application may be submitted by (i) transmitting the required information to the Transmission Provider by telefax, or (ii) providing the information by telephone over the Transmission Provider's time recorded telephone line. Each of these methods will provide a time- stamped record for establishing the service priority of the Application. 18.2 Completed Application: A Completed Application shall provide all of the information included in 18 CFR 2.20 including but not limited to the following: (i) The identity, address, telephone number and facsimile number of the entity requesting service; (ii) A statement that the entity requesting service is, or will be upon commencement of service, an Eligible Customer under the Tariff; (iii) The Point(s) of Receipt and the Point(s) of Delivery; (iv) The maximum amount of capacity [[Page 50588]] requested at each Point of Receipt and Point of Delivery; and (v) The proposed dates and hours for initiating and terminating transmission service hereunder. In addition to the information specified above, when required to properly evaluate system conditions, the Transmission Provider also may ask the Transmission Customer to provide the following: (vi) The electrical location of the initial source of the power to be transmitted pursuant to the Transmission Customer's request for service; (vii) The electrical location of the ultimate load The Transmission Provider will treat this information in (vi) and (vii) as confidential at the request of the Transmission Customer except to the extent that disclosure of this information is required by this Tariff, by Federal Law or regulatory or judicial order, for reliability purposes pursuant to Good Utility Practice, or pursuant to RTG transmission information sharing agreements. The Transmission Provider shall treat this information consistent with the standards of conduct contained in Part 37 of the Commission's regulations. 18.3 Reservation of Non-Firm Point-To-Point Transmission Service: Requests for monthly service shall be submitted no earlier than sixty (60) days before service is to commence; requests for weekly service shall be submitted no earlier than fourteen (14) days before service is to commence, requests for daily service shall be submitted no earlier than two (2) days before service is to commence, and requests for hourly service shall be submitted no earlier than noon the day before service is to commence. Requests for service received later than 2:00 p.m. prior to the day service is scheduled to commence will be accommodated if practicable [or such reasonable times that are generally accepted in the region and are consistently adhered to by the Transmission Provider]. 18.4 Determination of Available Transmission Capability: Following receipt of a tendered schedule the Transmission Provider will make a determination on a non-discriminatory basis of available transmission capability pursuant to Section 15.2. Such determination shall be made as soon as reasonably practicable after receipt, but not later than the following time periods for the following terms of service (i) thirty (30) minutes for hourly service, (ii) thirty (30) minutes for daily service, (iii) four (4) hours for weekly service, and (iv) two (2) days for monthly service. [Or such reasonable times that are generally accepted in the region and are consistently adhered to by the Transmission Provider]. 19 Additional Study Procedures for Firm Point-To-Point Transmission Service Requests 19.1 Notice of Need for System Impact Study: After receiving a request for service, the Transmission Provider shall determine on a non- discriminatory basis whether a System Impact Study is needed. A description of the Transmission Provider's methodology for completing a System Impact Study is provided in Attachment D. If the Transmission Provider determines that a System Impact Study is necessary to accommodate the requested service, it shall so inform the Eligible Customer, as soon as practicable. In such cases, the Transmission Provider shall within thirty (30) days of receipt of a Completed Application, tender a System Impact Study Agreement pursuant to which the Eligible Customer shall agree to advance funds to the Transmission Provider for performing the required System Impact Study. For a service request to remain a Completed Application, the Eligible Customer shall execute the System Impact Study Agreement and return it to the Transmission Provider within fifteen (15) days. If the Eligible Customer elects not to execute the System Impact Study Agreement, its application shall be deemed withdrawn. 19.2 System Impact Study Agreement and Compensation: (i) The System Impact Study Agreement will clearly specify the Transmission Provider's estimate of the actual cost, and time for completion of the System Impact Study. The charge will not exceed the actual cost of the study. In performing the System Impact Study, the Transmission Provider shall rely, to the extent reasonably practicable, on existing transmission planning studies. The Eligible Customer will not be assessed a charge for such existing studies; however, the Eligible Customer will be responsible for charges associated with any modifications to existing planning studies that are reasonably necessary to evaluate the impact of the Eligible Customer's request for service on the Transmission System. (ii) If in response to multiple Eligible Customers requesting service in relation to the same competitive solicitation, a single System Impact Study is sufficient for the Transmission Provider to accommodate the requests for service, the costs of that study shall be pro-rated among the Eligible Customers. (iii) For System Impact Studies that the Transmission Provider conducts on its own behalf, the Transmission Provider shall record the cost of the System Impact Studies pursuant to Section 8. 19.3 System Impact Study Procedures: Upon receipt of an executed System Impact Study Agreement, the Transmission Provider will use due diligence to complete the required System Impact Study within a sixty (60) day period. The System Impact Study shall identify any system constraints and redispatch options, additional Direct Assignment Facilities or Network Upgrades required to provide the requested service. In the event that the Transmission Provider is unable to complete the required System Impact Study within such time period, it shall so notify the Eligible Customer and provide an estimated completion date along with an explanation of the reasons why additional time is required to complete the required studies. A copy of the completed System Impact Study and related work papers shall be made available to the Eligible Customer. The Transmission Provider will use the same due diligence in completing the System Impact Study for an Eligible Customer as it uses when completing studies for itself. The Transmission Provider shall notify the Eligible Customer immediately upon completion of the System Impact Study if the Transmission System will be adequate to accommodate all or part of a request for service or that no costs are likely to be incurred for new transmission facilities or upgrades. In order for a request to remain a Completed Application, within fifteen (15) days of completion of the System Impact Study the Eligible Customer must execute a Service Agreement or request service without an executed Service Agreement pursuant to Section 15.3, or the Application shall be deemed terminated and withdrawn. 19.4 Facilities Study Procedures: If a System Impact Study indicates that [[Page 50589]] additions or upgrades to the Transmission System are needed to supply the Eligible Customer's service request, the Transmission Provider, within thirty (30) days of the completion of the System Impact Study, shall tender to the Eligible Customer a Facilities Study Agreement pursuant to which the Eligible Customer shall agree to advance funds to the Transmission Provider for performing the required Facilities Study. For a service request to remain a Completed Application, the Eligible Customer shall execute the Facilities Study Agreement and return it to the Transmission Provider within fifteen (15) days. If the Eligible Customer elects not to execute the Facilities Study Agreement, its application shall be deemed withdrawn. Upon receipt of an executed Facilities Study Agreement, the Transmission Provider will use due diligence to complete the required Facilities Study within a sixty (60) day period. If the Transmission Provider is unable to complete the Facilities Study in the allotted time period, the Transmission Provider shall notify the Transmission Customer and provide an estimate of the time needed to reach a final determination along with an explanation of the reasons that additional time is required to complete the study. When completed, the Facilities Study will include a good faith estimate of (i) the cost of Direct Assignment Facilities to be charged to the Transmission Customer, (ii) the Transmission Customer's appropriate share of the cost of any required Network Upgrades as determined pursuant to the provisions of Part II of the Tariff, and (iii) the time required to complete such construction and initiate the requested service. The Transmission Customer shall pay the Transmission Provider in advance the Transmission Customer's share of the costs of new facilities or upgrades. The Transmission Customer shall have thirty (30) days to execute a construction agreement and a Service Agreement and provide the advance payment or request service without an executed Service Agreement pursuant to Section 15.3 and provide the required letter of credit or other form of security or the request will no longer be a Completed Application and shall be deemed terminated and withdrawn. 19.5 Facilities Study Modifications: Any change in design arising from inability to site or construct facilities as proposed will require development of a revised good faith estimate. New good faith estimates also will be required in the event of new statutory or regulatory requirements that are effective before the completion of construction or other circumstances beyond the control of the Transmission Provider that significantly affect the final cost of new facilities or upgrades to be charged to the Transmission Customer pursuant to the provisions of Part II of the Tariff. 19.6 Due Diligence in Completing New Facilities: The Transmission Provider shall use due diligence to add necessary facilities or upgrade its Transmission System within a reasonable time. The Transmission Provider will not upgrade its existing or planned Transmission System in order to provide the requested Firm Point-To-Point Transmission Service if doing so would impair system reliability or otherwise impair or degrade existing firm service. 19.7 Partial Interim Service: If the Transmission Provider determines that it will not have adequate transmission capability to satisfy the full amount of a Completed Application for Firm Point-To-Point Transmission Service, the Transmission Provider nonetheless shall be obligated to offer and provide the portion of the requested Firm Point- To-Point Transmission Service that can be accommodated without addition of any facilities and through redispatch. However, the Transmission Provider shall not be obligated to provide the incremental amount of requested Firm Point-To-Point Transmission Service that requires the addition of facilities or upgrades to the Transmission System until such facilities or upgrades have been placed in service. 19.8 Expedited Procedures for New Facilities: In lieu of the procedures set forth above, the Eligible Customer shall have the option to expedite the process by requesting the Transmission Provider to tender at one time, together with the results of required studies, an ``Expedited Service Agreement'' pursuant to which the Eligible Customer would agree to compensate the Transmission Provider in advance for all costs incurred pursuant to the terms of the Tariff. In order to exercise this option, the Eligible Customer shall request in writing an expedited Service Agreement covering all of the above-specified items within thirty (30) days of receiving the results of the System Impact Study identifying needed facility additions or upgrades or costs incurred in providing the requested service. While the Transmission Provider agrees to provide the Eligible Customer with its best estimate of the new facility costs and other charges that may be incurred, such estimate shall not be binding and the Eligible Customer must agree in writing to compensate the Transmission Provider in advance for all costs incurred pursuant to the provisions of the Tariff. The Eligible Customer shall execute and return such an Expedited Service Agreement within fifteen (15) days of its receipt or the Eligible Customer's request for service will cease to be a Completed Application and will be deemed terminated and withdrawn. 20 Procedures if the Transmission Provider Is Unable To Complete New Transmission Facilities for Firm Point-To-Point Transmission Service 20.1 Delays in Construction of New Facilities: If any event occurs that will materially affect the time for completion of new facilities, or the ability to complete them, the Transmission Provider shall promptly notify the Transmission Customer. In such circumstances, the Transmission Provider shall within thirty (30) days of notifying the Transmission Customer of such delays, convene a technical meeting with the Transmission Customer to evaluate the alternatives available to the Transmission Customer. The Transmission Provider also shall make available to the Transmission Customer studies and work papers related to the delay, including all information that is in the possession of the Transmission Provider that is reasonably needed by the Transmission Customer to evaluate any alternatives. 20.2 Alternatives to the Original Facility Additions: When the review process of Section 20.1 determines that one or more alternatives exist to the originally planned construction project, the Transmission Provider shall present such alternatives for consideration by the Transmission Customer. If, upon review of any alternatives, the Transmission Customer desires to maintain its Completed Application subject to construction of the alternative facilities, it may request the Transmission Provider to submit a revised Service Agreement for Firm Point-To-Point Transmission Service. If the alternative approach solely involves Non-Firm Point-To-Point Transmission Service, the [[Page 50590]] Transmission Provider shall promptly tender a Service Agreement for Non-Firm Point-To-Point Transmission Service providing for the service. In the event the Transmission Provider concludes that no reasonable alternative exists and the Transmission Customer disagrees, the Transmission Customer may seek relief under the dispute resolution procedures pursuant to Section 12 or it may refer the dispute to the Commission for resolution. 20.3 Refund Obligation for Unfinished Facility Additions: If the Transmission Provider and the Transmission Customer mutually agree that no other reasonable alternatives exist and the requested service cannot be provided out of existing capability under the conditions of Part II of the Tariff, the obligation to provide the requested Firm Point-To- Point Transmission Service shall terminate and any advance payment made by the Transmission Customer that is in excess of the costs incurred by the Transmission Provider through the time construction was suspended shall be returned. However, the Transmission Customer shall be responsible for all prudently incurred costs by the Transmission Provider through the time construction was suspended. 21 Provisions Relating to Transmission Construction and Services on the Systems of Other Utilities 21.1 Responsibility for Third-Party System Additions: The Transmission Provider shall not be responsible for making arrangements for any necessary engineering, permitting, and construction of transmission or distribution facilities on the system(s) of any other entity or for obtaining any regulatory approval for such facilities. The Transmission Provider will undertake reasonable efforts to assist the Transmission Customer in obtaining such arrangements, including without limitation, providing any information or data required by such other electric system pursuant to Good Utility Practice. 21.2 Coordination of Third-Party System Additions: In circumstances where the need for transmission facilities or upgrades is identified pursuant to the provisions of Part II of the Tariff, and if such upgrades further require the addition of transmission facilities on other systems, the Transmission Provider shall have the right to coordinate construction on its own system with the construction required by others. The Transmission Provider, after consultation with the Transmission Custome [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-25332. Public record. Not legal advice.