Supporting Statement FINAL

12

FERC-917, OMB No. 1902-0233

Order on Rehearing and Clarification in RM10-23-001 (issued 5/17/2012; RIN: 1902-AE03)

SUPPORTING STATEMENT FOR

FERC-917 (OMB No. 1902-0233)¹ in

Order on Rehearing and Clarification

“Transmission Planning and Cost Allocation by Transmission Owning

and Operating Public Utilities”; Order No. 1000-A in Docket No. RM10-23-001

Issued May 17, 2012; RIN No. 1902-AE03

In the order on rehearing and clarification entitled “Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities” (Order No. 1000-A), in Docket No. RM10-23-001, the Federal Energy Regulatory Commission (Commission or FERC) affirms its basic determinations in Order No. 1000, amending the transmission planning and cost allocation requirements established in Order No. 890 to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential. In the order on rehearing the Commission provides clarification on certain aspects of Order No. 1000, resulting in additional information collection requirements as described in this supporting statement. [The information collection requirements are included in the order on rehearing in RM10-23-001].

A. Justification

1. CIRCUMSTANCES THAT MAKE THE COLLECTION OF INFORMATION NECESSARY

The Commission has a statutory obligation under the Federal Power Act (FPA) to prevent unduly discriminatory practices in transmission access. Specifically, section 206 of the FPA obligates the Commission to remedy unjust and unreasonable, or unduly discriminatory or preferential, rates, terms and conditions of transmission service.² Toward this goal, in its 1996 landmark Order No. 888,³ the Commission implemented open access to transmission facilities owned, operated, or controlled by a public utility. Concurrently, through Order No. 889,⁴ the Commission adopted standards and information requirements for Open Access Same-Time Information Systems (OASIS). In 2007, the Commission addressed newly identified opportunities for undue discrimination in electric power transmission through its issuance of Order No. 890.⁵ The Commission, in Order No. 1000, reformed these rules to further ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or preferential.

In Order No. 888, the Commission required public utility transmission providers to offer transmission service on an open and non-discriminatory basis pursuant to a pro forma Open Access Transmission Tariff (pro forma OATT) that sets forth the non-rate terms and conditions of transmission service that the Commission deemed necessary. The Commission also required public utility transmission providers to provide transmission customers with equal and timely access to transmission and ancillary service tariff information through OASIS website postings. The Commission found that transmission customers must have simultaneous access to the same information available to transmission providers if truly nondiscriminatory transmission services are to exist. In Order No. 889, the Commission adopted business practice standards and information requirements for OASIS. During their development, the Commission relied heavily on the assistance provided by all segments of the wholesale electric power industry and its customers in ad hoc working groups that offered consensus proposals for the Commission’s consideration.

The Commission determined that more work was needed to remedy undue discrimination related to transmission service, leading to the issuance of Order No. 890. The Commission found that the requirements in Order No. 890 were necessary to: (1) strengthen the pro forma OATT to ensure that it achieves its original purpose of remedying undue discrimination; (2) provide greater specificity to reduce opportunities for undue discrimination and facilitate the Commission’s enforcement; and (3) increase transparency in the rules applicable to planning and use of the transmission system.

The Commission acknowledged in Order No. 1000 that significant work has been done in recent years to enhance regional transmission planning processes to achieve compliance with the requirements of Order No. 890. The Commission believes that the expanded cooperation and collaboration that is now occurring in transmission planning both among transmission providers, and between transmission providers and their stakeholders, is to be commended.

In Order No. 1000, the Commission identified the following inadequacies in the Order No. 890 requirements. Under Order No. 890, public utility transmission providers are under no affirmative obligation to develop a regional transmission plan. Furthermore, there is no requirement to develop a regional transmission plan that reflects the evaluation of whether alternative regional solutions may be more efficient or cost-effective than solutions identified in local transmission planning processes. There is no requirement that public utility transmission providers consider transmission needs at the local or regional level driven by public policy requirements established by state or federal laws or regulations. Nonincumbent transmission developers seeking to invest in transmission can be discouraged from doing so as a result of federal rights of first refusal in tariffs and agreements subject to the Commission’s jurisdiction. While neighboring transmission planning regions may coordinate evaluation of the reliability impacts of transmission within their respective regions, few procedures are in place for identifying and evaluating the benefits of alternative interregional transmission solutions. Many cost allocation methods in place within transmission planning regions fail to account for the beneficiaries of new transmission facilities. Finally, cost allocation methods for potential interregional transmission facilities are largely nonexistent. Order No. 1000 helped to remedy these inadequacies to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is not unduly discriminatory or preferential.

The electric industry is currently facing the possibility of substantial investment in future transmission facilities to meet the challenge of maintaining reliable service at a reasonable cost. Therefore, the Commission concluded in Order No. 1000 that it is appropriate to act now to ensure that its transmission planning processes and cost allocation requirements are adequate to allow public utility transmission providers to address these challenges more efficiently and cost-effectively. Thus, in Order No. 1000 the Commission is fulfilling its statutory obligation to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is not unduly discriminatory or preferential.

a. Order No. 1000-A

In Order No. 1000, the Commission amended the transmission planning and cost allocation requirements established in Order No. 890 to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential. Order No. 1000-A affirms the Order No. 1000 transmission planning reforms requiring: (1) each public utility transmission provider to participate in a regional transmission planning process that produces a regional transmission plan; (2) that local and regional transmission planning processes must provide an opportunity to identify and evaluate transmission needs driven by public policy requirements established by state or federal laws or regulations; (3) improved coordination between neighboring transmission planning regions for new interregional transmission facilities; and (4) the removal from Commission-approved tariffs and agreements of a federal right of first refusal.

Order No. 1000-A also affirms the Order No. 1000 requirements that each public utility transmission provider must participate in a regional transmission planning process that has: (1) a regional cost allocation method for the cost of new transmission facilities selected in a regional transmission plan for purposes of cost allocation and (2) an interregional cost allocation method for the cost of new transmission facilities that are located in two neighboring transmission planning regions and are jointly evaluated by the two regions in the interregional transmission coordination process required by Order No. 1000. Additionally, Order No. 1000-A affirms the Order No. 1000 requirement that each cost allocation method must satisfy six cost allocation principles.

Taken together, the reforms adopted in Order No. 1000 will ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential. The Commission therefore rejected in Order No. 1000-A requests to eliminate, or substantially modify, the various reforms adopted in Order No. 1000; however, it did make a number of clarifications.⁶

2. HOW, BY WHOM, AND FOR WHAT PURPOSE THE INFORMATION IS TO BE USED AND THE CONSEQUENCES OF NOT COLLECTING THE INFORMATION

Previously, the Commission submitted to OMB the information collection requirements arising from Order No. 1000 and OMB approved those requirements. In Order No. 1000-A, the Commission is making no substantive changes to those requirements, but has provided clarifications that require public utility transmission providers to collect additional information.

Specifically, Order No. 1000-A includes the following additional requirements:

• Public utility transmission providers in each transmission planning region must have a clear enrollment process that defines how entities become part of the transmission planning region and include in their OATTs a list of all those that have enrolled as transmission providers in their planning region. FERC believes that the requirement to have a clear enrollment process for transmission providers in a transmission planning region along with the maintenance of a list of such enrollees, provides certainty regarding who is enrolled in a region and therefore who is a potential beneficiary that may be allocated costs. To the extent that a non-public utility transmission provider makes the choice to join the transmission planning region, the enrollment process would apply to such a non-public utility transmission provider.

• If a transmission facility is selected in the regional transmission plan for purposes of cost allocation, the transmission developer of that transmission facility must submit a development schedule that indicates the required steps, such as the granting of state approvals, necessary to develop and construct the transmission facility such that it meets the transmission needs of the region. This approach (1) ensures that transmission developers that have the technical and financial capability to build a transmission facility, and meet other nondiscriminatory and non-preferential criteria, are eligible to propose a transmission facility for evaluation and selection, thereby increasing the universe of potential facilities evaluated and selected to meet a region’s transmission needs; (2) gives a nonincumbent transmission developer the opportunity to propose a transmission facility while it seeks to obtain necessary state approvals or otherwise seeks to comply with applicable state law or regulation; and (3) provides the public utility transmission providers in a transmission planning region with the ability to monitor the development of a transmission facility selected in the regional transmission plan for purposes of cost allocation, as well as the ability to remove that new transmission facility if its developer is unable to meet an established date by which the critical development step of obtaining necessary state approvals must be achieved.

• Public utility transmission providers must describe in their OATTs how their regional transmission planning processes will enable stakeholders to provide meaningful and timely input with respect to the consideration of interregional transmission facilities, as well as how stakeholders and transmission developers can propose interregional transmission facilities for the public utility transmission providers in neighboring transmission planning regions to evaluate jointly. These requirements will provide stakeholders and transmission developers with important information about how they can participate in the consideration of and propose ideas for interregional transmission facilities.

• To the extent that public utility transmission providers consider either cost containment or cost recovery provisions in connection with a cost allocation method or methods for a regional or interregional transmission facility, public utility transmission providers may include such provisions in their compliance filings. This information will be used by the Commission to determine whether the provisions are just and reasonable and not unduly discriminatory or preferential.

Without this information, the Commission would not be able to meet its statutory obligation under the Federal Power Act to ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or preferential and to prevent undue discrimination.

3. DESCRIBE ANY CONSIDERATION OF THE USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN AND TECHNICAL OR LEGAL OBSTACLES TO REDUCING BURDEN

There is an ongoing effort to determine the potential and value of improved information technology to reduce the burden. In general, the Commission has adopted user friendly electronic formats and software in order to facilitate electronic filings. As of 2011, nearly all filings submitted to FERC (except for Protected materials) may be submitted in an electronic format. More information on FERC’s eFiling program is available at http://www.ferc.gov/docs-filing/efiling.asp.

In addition, in Order No. 714, FERC revised its regulations to require that all tariffs, tariff revisions and rate change applications for the public utility, natural gas pipeline and oil pipeline industries be filed according to a set of standards developed in conjunction with NAESB.⁷ The electronic filing of tariffs (eTariffs) was phased in in 2010. [ETariffs are included in FERC-516 (OMB Control No. 1902-0096).] Electronically filed tariffs and rate change applications improved the efficiency, convenience, and overall management of the tariff and tariff change filing process, facilitated public access to tariff information, and reduced the burden and expense associated with paper tariffs and tariff changes. FERC’s eTariff program is described at http://www.ferc.gov/docs-filing/etariff.asp. The improvements implemented by eTariff will ease the burden related to the filings required by Order Nos. 1000 and 1000-A.

4. DESCRIBE EFFORTS TO IDENTIFY DUPLICATION AND SHOW SPECIFICALLY WHY ANY SIMILAR INFORMATION ALREADY AVAILABLE CANNOT BE USED OR MODIFIED FOR USE FOR THE PURPOSE(S) DESCRIBED IN INSTRUCTION 2.

Order No. 1000-A affects processes and provisions set out in federal rate schedules and tariffs of electric transmission providers pursuant to FERC implementation of the Federal Power Act, Energy Policy Act of 1992, and Energy Policy Act of 2005. Because the filing requirements in the order are related to new processes and provisions in services, the resulting information is not available from any other resource.

5. METHODS USED TO MINIMIZE BURDEN IN COLLECTION OF INFORMATION INVOLVING SMALL ENTITIES

Order No. 1000-A applies to utilities that own, control, or operate interstate transmission facilities other than those that have received waiver of the obligation to comply with Order Nos. 888, 889 and 890. Small entities have the option of seeking a waiver of the obligation to comply with Order No. 1000 (and any subsequent rehearing orders). The criteria for waiver that would be applied under this rulemaking for small entities is unchanged from that used to evaluate requests for waiver under Order Nos. 888, 889, and 890.

6. CONSEQUENCE TO FEDERAL PROGRAM IF COLLECTION WERE CONDUCTED LESS FREQUENTLY

Collecting this information less frequently would mean that accurate and timely information would not be available to public utility transmission providers and stakeholders, which would undermine the purpose of the reform.

7. EXPLAIN ANY SPECIAL CIRCUMSTANCES RELATING TO THE INFORMATION COLLECTION

There are no special circumstances related to the requirements in Order No. 1000-A. The guidelines of 5 C.F.R. 1320.5(d) are being followed.

8. DESCRIBE EFFORTS TO CONSULT OUTSIDE THE AGENCY: SUMMARIZE PUBLIC COMMENTS AND THE AGENCY'S RESPONSE TO THESE COMMENTS

The Commission has consulted with the public regarding transmission planning and cost allocation (the subject of this proceeding) through technical conferences, a proposed rule and a final rule as indicated below.

Technical conferences in related Docket AD09-8 (announced at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12065275) were held in 2009 in Phoenix, Arizona, Atlanta, Georgia, and Philadelphia, Pennsylvania. A notice of request for comments was issued on October 8, 2009 (at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12169158 ). The comments are available in FERC’s eLibrary (http://www.ferc.gov/docs-filing/elibrary.asp) by doing a search (General, Advanced, or Docket No.) and using Docket No. AD09-8.

In Docket No. RM10-23, FERC issued a Proposed Rule on 6/17/2010 (at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12372941). The public comment period was extended in 8/2010 (at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12411473). In 9/2010, FERC provided (at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12449991)

for submittal of reply comments. The comments are available in FERC’s eLibrary (http://www.ferc.gov/docs-filing/elibrary.asp) by doing a search (General, Advanced, or Docket No.) and using Docket No. RM10-23.

The initial and reply comments submitted in response to the Notice of Proposed Rulemaking were addressed in the preamble of the Final Rule. See Sections II, III, IV, and V (at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12712383).

After the issuance of the Final Rule (Order No. 1000), Commission staff held informational conferences to assist public utility transmission providers in their efforts to comply with the order (notice at http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12736181).

Many entities petitioned the Commission for rehearing of Order No. 1000. In this proceeding (the subject of this supporting statement), the Commission is denying rehearing but granting clarification on some points. None of the petitioners raised concerns specifically in regards to the burden estimates used in Order No. 1000 and for this reason we do not include any of the comments in this supporting statement. A summary of the comments and the Commission’s full response can be found in sections II, III, IV, and V of Order No. 1000-A attached to this package in ROCIS or publicly available via reginfo.gov and in FERC’s eLibrary (http://www.ferc.gov/docs-filing/elibrary.asp) by doing a search (General, Advanced, or Docket No.) and using Docket No. RM10-23.

9. EXPLAIN ANY PAYMENT OR GIFTS TO RESPONDENTS

No gifts or payments have been made to the respondents.

10. DESCRIBE ANY ASSURANCE OF CONFIDENTIALITY PROVIDED TO RESPONDENTS

There are no special circumstances relating to this information.

11. PROVIDE ADDITIONAL JUSTIFICATION FOR ANY QUESTIONS OF A SENSITIVE NATURE THAT ARE CONSIDERED PRIVATE.

There are no questions of a sensitive nature that are considered private.

12. ESTIMATED BURDEN OF COLLECTION OF INFORMATION

Previously, the Commission submitted to OMB the information collection requirements arising from Order No. 1000, and OMB approved those requirements. In Order No. 1000-A, the Commission is making no significant changes to those requirements, but has provided clarifications that require public utility transmission providers and transmission developers to comply with additional information collection requirements.

The burden estimates in Order No. 1000-A represent the incremental burden changes related only to the new and revised requirements set forth in the order. It also should be noted that the burden estimates are averages for all of the filers.

FERC-917 - New and Revised Reporting Requirements in Order 1000-A in RM10-23	Annual Number of Respondents (Filers)	Annual Number of Responses	Hours per Response	Total Annual Hours in Year 1	Total Annual Hours in Subsequent Years
Public utility transmission providers must develop and maintain an enrollment process defining how entities become part of a transmission planning region, and must include and maintain in their OATTs a list of all public utility and non-public utility transmission providers (to the extent that non-public utility transmission providers make the choice to join) enrolled as a transmission provider in the transmission planning region	132	1	2 in Year 1; 1 in Yrs. 2 & 3	264	132
Transmission developers must submit a development schedule (if their proposed facility is selected in the regional transmission plan for purposes of cost allocation)	140	1	4 (each in Yrs. 1-3)	560	560
Public utility transmission providers must describe in their OATTs how their regional transmission planning processes will enable stakeholders to provide meaningful and timely input with respect to the consideration of interregional transmission facilities, as well as how stakeholders and transmission developers can propose interregional transmission facilities	132	1	5 in Year 1; 0.5 in Yrs. 2&3	660	66
To the extent that a public utility transmission provider considers either cost containment or cost recovery provisions in connection with its cost allocation method for a regional or interregional facility, such provisions may be included in its compliance filing	132	1	18 in Year 1; 1 in Yrs. 2&3	2,376	132
Total Estimated Additional Burden Hours, for FERC-917 due to Order 1000-A in RM10-23				3,860	890

For input into OMB’s ROCIS system (reginfo.gov for public users) we average the new burden related to Order No. 1000-A over years 1-3. The average annual new burden will be 1,880 ((3,860 + 890 + 890)/3).

We show in the following table how the total burden hours under OMB Control No. 1902-0233 (FERC-917/918) will be affected by the new burden.

FERC-917/918	Total Request	Previously Approved	Change due to Adjustment in Estimate	Change Due to Agency Discretion
Annual Number of Responses	672	400	-	272
Annual Time Burden (Hr)	157,754	155,874	-	1,880
Annual Cost Burden ($)	7,400,000	7,400,000	-	-

13. ESTIMATE OF THE TOTAL ANNUAL COST BURDEN TO RESPONDENTS

The Commission has projected cost burden of compliance for the reporting requirements in the Order as follows:

Cost to Comply⁸:

Year 1: $440,040 or [3,860 hours X $114 per hour]

Subsequent Years: $101,460 or [890 hours X $114 per hour]

Using 1,880 hours (the average additional annual burden associated with the Final Rule in RM10-23 over Years 1-3) at an average hourly cost of $114Error: Reference source not found, the average additional annual cost burden would be $214,320 for Order No. 1000-A in RM10-23.

The existing industry cost figure in ROCIS/reginfo.gov originated in a previous ICR (201008-1902-003) and relates only to the cost not associated with burden hours. Accordingly, the off-site storage costs of $7,400,000 (8,000 sq. ft. x $925/sq. ft.) will be used in the ROCIS metadata. Other cost figures related to burden hours are provided above and not included in the ROCIS metadata.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

In the supporting statement for Order No. 1000, the Commission estimated that 7 full-time employees would be required to process the data. The Commission estimates that the additional information collection requirements contained in Order No. 1000-A will not add any additional processing costs.

The Commission estimates an additional annualized Federal Government cost of $1,588 related to obtaining OMB clearance for the information collection requirements contained in Order No. 1000-A.⁹

15. REASONS FOR CHANGES IN BURDEN INCLUDING THE NEED FOR ANY INCREASE

In Order 1000-A, the Commission provides clarification on various aspects of Order No. 1000. Some of these clarifications lead to additional burden, both mandatory and voluntary, on the affected entities.

Order No. 1000 builds on the reforms of Order No. 890 by requiring amendments to the pro forma OATT to correct certain deficiencies in transmission planning and cost allocation requirements for public utility transmission providers. The purpose of Order No. 1000 is to strengthen the pro forma OATT and transmission planning and cost allocation processes so that the transmission grid can better support wholesale power markets and ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or preferential. We achieve this goal by reforming electric transmission planning requirements and establishing a closer link between cost allocation and regional transmission planning processes.

The additional burden imposed by Order No. 1000-A is directly in line with the purposes of Order No. 1000 and is in fact a clarification on the requirements in that order.

The changes in burden hours and number of responses are detailed in the tables above contained in question 12.

16. TIME SCHEDULE FOR THE PUBLICATION OF DATA

This is not a collection of information for which results are planned to be published.

17. DISPLAY OF EXPIRATION DATE

It is not appropriate to display the expiration date for OMB approval of the Information collected. Currently, the information on the tariff and other filings is not collected on a standard, preprinted form which would avail itself to this display. Rather, public utilities, licensees, and transmission providers prepare and submit filings that reflect the unique or specific circumstances related to rates and services involved in the filing. In addition, the information contains a mixture of narrative descriptions and empirical support that varies depending on the nature of the services to be provided.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT

The information collected for this reporting requirement is not used for statistical purposes. The information collected is case specific to each respondent.

1 Note that “FERC-917” as described in OMB Control No. 1902-0233 currently includes two separate information collection components (FERC-917 and FERC-918). “FERC-917”as used throughout this document relates to the entire ‘umbrella’ OMB Control No. 1902-0233, unless otherwise specified.

2 16 U.S.C. 824e. See attachment included under “Supplementary Documents” in reginfor.gov of ROCIS.

3 Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ¶ 31,036 (1996), order on reh’g, Order No. 888-A, 62 FR 12274 (Mar. 14, 1997), FERC Stats. & Regs. ¶ 31,048 (1997), order on reh’g, Order No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC ¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000) (TAPS v. FERC), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002).

4 Open Access Same-Time Information System (Formerly Real-Time Information Networks) and Standards of Conduct, Order No. 889, 61 FR 21737 (May 10, 1996), FERC Stats. & Regs. ¶ 31,035 (1996), order on reh’g, Order No. 889-A, FERC Stats. & Regs. ¶ 31,049 (1997), order on reh’g, Order No. 889-B, 81 FERC ¶ 61,253 (1997).

5 Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. & Regs. ¶ 31,241, order on reh’g, Order No. 890-A FERC Stats. & Regs. ¶ 31,261 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228 (2009).

6 No change is made to the regulatory text of Order No. 1000. The regulatory text of Order No. 1000 should be understood in light of the explanations in the preamble of Order No. 1000 as further clarified in the preamble of Order No. 1000-A.

7 Electronic Tariff Filings, Order No. 714, 124 FERC ¶ 61,270 (2008).

8 The estimated cost of $114 an hour is the average of the hourly costs of: attorney ($200), consultant ($150), technical ($80), and administrative support ($25).

9 The OMB clearance cost is based on 24 hours of FERC staff time per information collection.