AD14-15-000 (FERC-922) final supporting statement (8-6-2015)

AD14-15-000 (FERC-922) final supporting statement (8-6-2015).docx

FERC-922, [AD14-15] Performance Metrics for ISOs, RTOs, and Utilities in Regions Outside ISOs and RTOs

OMB: 1902-0262

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FERC-922 (OMB Control No. 1902-0262)

Docket No. AD14-15-000

(updated 8/6/2015)

Supporting Statement for

FERC-922 (Performance Metrics for ISOs, RTOs and

Utilities in Regions Outside ISOs and RTOs)

as revised by Docket No. AD14-15-000

The Federal Energy Regulatory Commission (Commission or FERC) requests that the Office of Management and Budget (OMB) review and approve changes to FERC-922, Performance Metrics for ISOs and RTOs and Regions Outside ISOs and RTOs (OMB Control No. 1902-0262) as stated in the Docket No. AD14-15-000.


This is a reinstatement and modification of a collection that is done approximately biennially.


  1. CIRCUMSTANCES THAT MAKE THE COLLECTION OF INFORMATION NECESSARY


In September 2008, the United States Government Accountability Office (GAO) issued a report titled “Electricity Restructuring: FERC Could Take Additional Steps to Analyze Regional Transmission Organizations’ Benefits and Performance,” GAO-08-987 (GAO report).1 In its report, the GAO noted that “[t]he efficient and reliable operation of the electricity industry is critical to the health of the U.S. economy and the well-being of Americans.”2 Pointing out that it had been over ten years since the advent of electricity restructuring and the emergence of independent systems operators (ISOs) and regional transmission organizations (RTOs), the GAO noted that there was little agreement whether this had been good for consumers, what the impact had been on electricity prices and whether ISOs and RTOs had produced the benefits that the Commission envisioned.”3 The GAO report further criticized the Commission’s existing measures of RTO performance because, among other things, such measures “do not compare performance between RTO and non-RTO regions.”4 Thus, the GAO report recommended that the Chairman of the Commission, among other actions, work with RTOs, ISOs, stakeholders, and other experts to develop standardized measures that track the performance of ISO/RTO operations and markets and report the results to Congress and the public annually, including providing: (1) an interpretation of what the measures indicate about the benefits of ISOs and RTOs; and (2) where appropriate, changes that need to be made to address any performance concerns.5


Consistent with the goals outlined in the GAO report (and outlined in FERC’s Strategic Plan for Fiscal Years 2009-2014), Commission Staff undertook a multi-year process for developing and implementing a common set of performance measures for markets both within and outside of ISOs and RTOs. Commission Staff considers it important to compare the performance of ISOs/RTOs with non-ISO/RTO regions because large portions of the country, notably the Pacific Northwest and the Southeast, have not engaged in restructuring and remain outside of ISOs/RTOs. In the view of Commission Staff, the benefits of ISOs/RTOs cannot be assessed in isolation, but are best considered in comparison with non-restructured regions. Indeed, the GAO and experts reached the same conclusion and recommended such a comparison.6


Consequently, as recommended by the GAO, Commission Staff worked with representatives from all of the jurisdictional ISOs and RTOs to develop a set of performance metrics. Commission Staff and ISO/RTO representatives met with interested stakeholders to solicit their perspectives and comments on the proposed performance metrics. Commission Staff then released the proposed metrics for public comment in Docket No. AD10-5-000. In October 2010, Commission Staff issued a report addressing the comments received and recommending a final list of metrics for ISOs and RTOs. In December 2010, the ISOs and RTOs submitted information for the 2005-2009 period addressing the final metrics developed by Commission Staff. This information, along with a Commission Staff analysis, was included in a report sent to Congress in April 2011.7 In August 2011, the ISOs and RTOs submitted a report providing data for the 2006-2010 period.8


In recognition of the finding in the GAO report that the Commission’s data gathering had not been sufficiently comprehensive because among other items, the Commission did not compare performance between ISO/RTO and non-ISO/RTO regions,9 Commission Staff developed metrics to measure performance in regions outside of ISOs and RTOs. Commission Staff met with the Edison Electric Institute and its members, as well as other interested stakeholders to solicit their perspectives and comments on the proposed performance metrics. These metrics were based on the metrics previously selected in Docket No. AD10-5-000, but were tailored to fit markets outside of ISOs and RTOs. In October 2012, Commission Staff issued a report on performance metrics in regions outside ISOs and RTOs, and subsequently received data on these metrics from five utilities in non-ISO/RTO regions in early 2013.


In August 2014, Commission Staff issued a report in docket AD14-15-00010 summarizing information submitted by the six Commission-jurisdictional ISOs/RTOs, and information submitted by five utilities in regions outside of ISOs and RTOs. In the report, Commission Staff identified 30 Common Metrics to compare reliability and operations functions in areas where ISOs and RTOs, and public utilities in non-ISO/RTO regions perform identical activities. Concurrently, a notice11 was issued in the same docket (AD14-15-000) stating that Commission Staff intended to collect information on these common metrics. The notice included a burden estimate for information submittal, and asked for public comment.


In response to comments received, a subsequent notice was issued that included a revised burden estimate and revisions to the time period covered by the information collection.12 The notice also included additional information submittal instructions.


Utilizing common metrics that compare and contrast performance in ISOs/RTOs with regions outside of ISOs and RTOs will assist Commission Staff in evaluating market performance both within ISOs and RTOs and outside of such regions. Commission Staff notes that entities are not required to report on the metrics; rather, submittal of metrics is voluntary.


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


The common performance metrics for ISOs/RTOs, and regions outside of ISOs/RTOs will be used by Commission Staff and the public to evaluate performance in markets both within ISOs and RTOs and outside of such regions in areas where ISOs/RTOs and utilities in non-ISO/RTO regions perform identical functions. These metrics would provide information to assist Commission Staff and the public in tracking the performance of ISOs and RTOs, as recommended in the GAO report referenced above.


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


Commission Staff expects to receive the data in this collection via the Commission’s electronic filing system (eFiling). By eFiling materials, respondents file the necessary information more efficiently than if they filed on paper. Commission Staff is able to process the information more efficiently when the filings are submitted electronically versus in paper form.


  1. 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 NO. 2


While some of the information that will be reported in response to the metrics is available from other sources, the information collection at issue here is not intended to be a rote recitation of previously reported data. Instead, Commission Staff expects that those entities that decide to provide data in response to the metrics will provide an analysis of and context for what this information means. For example, where there are aberrations in the data or trends are apparent, we expect those that decide to report on the metrics will explain what caused these changes and their implications for performance. In this regard, Commission Staff anticipates that the metrics will result in a unique work product that would provide information for both Commission Staff and the public at large.

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


This collection of information is voluntary. Entities that do not want to participate because of the burden in the collection of information are not required to do so. Further, Commission Staff anticipate that the average burden of approximately 400 hours per response is reasonable.


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


Commission Staff expects to release a report every other year using data for five year periods (in this case, 2010-2014). Less frequent data collection would forestall dissemination of information on industry performance, and delaying knowledge.


7. EXPLAIN ANY SPECIAL CIRCUMSTANCES RELATING TO THE INFORMATION COLLECTION


5 C.F.R. 1320.5(d) specifies that an agency should explain when a collection of information calls for any record-keeping requirement beyond three years. This collection does not explicitly require entities to keep data beyond three years, but does ask for data covering a five year period.13 The full period provides a longer average data period for analysis (smoothing over any anomalies).


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


Public Comments and FERC’s Responses: Comments were filed by the public in response to the FERC-922 Federal Register Notice of Information Collection and Request for Comments,14 and responses to those comments were summarized in a notice issued on May 20, 2015 in docket AD14-15-000.


Burden Estimate


Edison Electric Institute (EEI) considers the burden estimate to be significantly understated, particularly for “stand-alone utilities” without access to data collection and compilation activities performed by ISO and RTO staff. EEI estimates the response time for stand-alone utilities to be as high as 300-400 hours per utility.


FERC Response: We address EEI’s concern by revising the burden estimate. We recognize that certain EEI members have experienced the process of collecting, summarizing, reviewing, and submitting information as part of this initiative, and therefore might be better positioned to estimate the time and resources involved. In response, we revise the burden estimate to be approximately 400 hours per respondent (401 hours for previous participants and 427 hours for new participants). We believe that the updated burden estimate accounts for the higher response times of certain participants. We also believe that the updated burden estimate accounts for any additional time associated with the instruction to submit the numeric values corresponding to charts and tables in an accompanying file.15


Ways To Minimize Information Collection Burden


The ISO/RTO Council (IRC) recommends that data be provided only for the 2010-2014 period. IRC notes that its members have already submitted information through 2010. Southern Company Services, Inc. (Southern) also recommends that only one data collection be required for the 2010-2014 time period. Noting that the Common Metrics Report issued in August 2014 provides information for the 2006-2010 period, Southern considers information collection on the 2008-2012 period to be an additional burden and argues that it should be eliminated. Noting that utilities outside of ISOs/RTOs will have to devote considerable resources and expenses to provide data, EEI recommends that the Commission retain the voluntary approach for these utilities and that data collection for ISO and RTO regions only occur when data is readily available and the data collection process can be streamlined. New York Transmission Owners (NYTOs)16 support continued data collection. NYTOs consider this information to be helpful for analyzing ISO and RTO performance and that the benefits of the information to the Commission and affected parties outweigh any related burdens on respondents. International Transmission Company (ITC) supports the proposed data collection as necessary and not overly burdensome. American Public Power Association (APPA) and American Wind Energy Association (AWEA) also support continued data collection.


FERC Response: We note concerns raised by IRC and Southern over the potential redundancy and additional burden for providing information for the 2008-2012 period. Additionally, we note EEI’s concerns with streamlining the collection process. In designing the information collection process, we aim to balance the goal of creating comparable data series across entities with the goals of wide participation and practical submission criteria. Accordingly, all participating entities may submit a single report with information on the 2010-2014 period rather than submitting two reports for the 2008-2012 and 2010-2014 periods. This includes ISOs, RTOs, and public utilities in non-ISO/RTO regions that have submitted performance information previously, as well as public utilities in non-ISO/RTO regions that have not submitted performance information previously. The voluntary submission of reports is requested by October 30, 2015. Going forward, Commission Staff will continue to consult with ISOs, RTOs and participating public utilities in the voluntary and collaborative data collection process to address ways to minimize the burden of data collection.


Necessity and Practical Utility of Information Collection


Southern states that developing metrics for bilateral markets is not necessary for the Commission to develop proper standardized measures that track the performance of ISO and RTO operations and markets, which is the goal set for the Commission’s performance metrics efforts in the (GAO) report. EEI does not consider further data collection to be necessary for the Commission to properly perform its functions. EEI suggests that if the Commission believes data collection is necessary, then the Commission should explain the importance of this data to the Commission’s functions and the Commission’s intentions for using the data. Southern and EEI also consider the practical usefulness of the information to be limited due to the differences in market structures between utilities outside ISO and RTO markets and ISO and RTO market operators. Southern and EEI state that the usefulness of the information is diminished by errors in the Common Metrics Report, arguing that such errors could have been avoided with review and feedback by participating utilities. Southern and EEI also dispute a statement in the Common Metrics Report that utilities outside of ISOs and RTOs have an incentive to discriminate, and EEI stresses that data voluntarily provided to the Commission should not be used to indicate misconduct or used as record evidence in contested proceedings or in enforcement proceedings against entities providing such data. However, EEI states that utilities will continue to provide data voluntarily to assist the Commission in identifying trends or to highlight areas that could be improved through Commission policy. Similarly, Southern notes its intention to continue to coordinate and work with Commission Staff should the Commission continue with this initiative.


FERC Response: Commission Staff consider it important to compare the performance of ISOs and RTOs with non-ISO/RTO regions because large portions of the country, notably the Pacific Northwest and the Southeast, have not engaged in restructuring and remain outside of ISOs/RTOs. The GAO and other experts were concerned that the benefits of ISOs and RTOs cannot be assessed in isolation, but are best considered in comparison with non-restructured regions.17 Furthermore, as the metrics developed by Commission Staff seek to glean information across various categories, the aim is to assess whether certain particular features of ISOs and RTOs demonstrate superior performance and/or certain (other) features of non-ISO/RTO regions demonstrate superior performance, with a goal of improving the performance of each type of electricity market.


The practical usefulness of the information is not limited by the differences in market structures between utilities outside ISO and RTO regions and between each ISO and RTO market operator. The metrics common to ISOs and RTOs and public utilities in non-ISO/RTO regions measure the performance of reliability and operations functions in which ISOs and RTOs and public utilities in non-ISO/RTO regions perform identical activities, and therefore the common performance metrics provide useful and meaningful information.


The errors and misstatements cited by Southern and EEI do not diminish the practical usefulness of the information submitted because the public record in Docket Nos. AD12-8-000 and AD14-15-000 includes all the correct information submitted by participants. The Common Metrics Report of concern to Southern was intended to evaluate whether the common metrics are measuring the same activities and have the same meaning across the industry.18 Accordingly, the report was not intended to be the primary data source nor did the errors and misstatements19 participants point out have any impact on the common metrics evaluation.


As for the statement in the Common Metrics Report regarding a utility’s incentive to discriminate among users of transmission services, this statement has no bearing on the usefulness or quality of the information collected. Southern’s and EEI’s comments on the potential use of data in enforcement proceedings are also beyond the scope of this data collection notice and are not reflective of the intention of this data collection which is to measure the performance of reliability and operations functions in which ISOs and RTOs and public utilities outside ISO and RTO markets perform identical/comparable activities.


Additional Data Collection


APPA, AWEA, and ITC recommend that additional data be collected and reported in order to further improve the usefulness of the performance metrics. ITC does not consider information on transmission facilities approved for construction for reliability purposes to be meaningful without proper context. Southern and EEI state that the proposed common wholesale price metric for ISOs and RTOs and utilities in non-ISO/RTO regions20 would not provide relevant or useful information since ISO and RTO markets differ significantly from the bilateral markets in non-ISO/RTO regions.


FERC Response: Commission Staff will discuss additional data collection and metrics of interest to commenters, as well as ways to make the metrics more meaningful, in the ongoing voluntary and collaborative process with ISOs, RTOs, participating utilities in non-ISO/RTO regions, and stakeholders.


9. EXPLAIN ANY PAYMENT OR GIFTS TO RESPONDENTS


There are no payments or gifts to respondents.


10. DESCRIBE ANY ASSURANCE OF CONFIDENTIALITY PROVIDED TO RESPONDENTS


Commission Staff generally does not consider the data to be confidential. If any of the data are considered non-public or Critical Energy Infrastructure Information, the respondent may request treatment as such according to 18 CFR 388.112.



11. PROVIDE ADDITIONAL JUSTIFICATION FOR ANY QUESTIONS OF A SENSITIVE NATURE, SUCH AS SEXUAL BEHAVIOR AND ATTITUDES, RELIGIOUS BELIEFS, AND OTHER MATTERS THAT ARE COMMONLY CONSIDERED PRIVATE.


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


12. ESTIMATED BURDEN OF COLLECTION OF INFORMATION


There is no currently approved burden for the FERC-922 information collection. This ICR is a request for reinstatement of the FERC-922 information collection. The collection has not been conducted since it was last approved by OMB.


The estimated burden and cost due to the information collection proposed in FERC-922 follow. (The estimates are annual averages; the collection is made every two years.)


Please note that the responses per respondent figure of 0.5 is due to the fact that this collection is expected to occur once every two years with no regard to the OMB clearance duration (i.e. the timing and schedule of the requested filings does not reset or start based on when FERC and OMB renew the collection). The first filings are due to FERC on 10/30/2015. Functionally, that means FERC can expect a total of two filings during this clearance period (i.e. over the next three years). For subsequent extensions, however, this paradigm may not apply. Consider, for example, the next clearance period for this collection (using the assumption that it’s approved in 8/2015). It is possible that FERC will only receive one filing (per respondent) over the next three year cycle [if filings are received only on Years 1 and 3 during the first clearance period, filings will only be expected on Year 5 of the next clearance period (Years 4, 5, and 6)]. This assumes no lapse in the collection’s approval nor any change to the biennial paradigm of collecting the data.


FERC staff suggests that the 0.5 responses per respondent be used in order to maintain continuity for future clearance packages.


FERC-922 (AD14-15-000): Performance Metrics for ISOs, RTOs and Regions Outside ISOs and RTOs21

Information Collection Component

Number of Respondents
(1)

Annual Number of Responses per Respondent

(2)

Total Number of Annual Responses (1)*(2)=(3)

Average Burden Hours & Cost Per Response22

(4)

Total Annual Burden Hours & Total Annual Cost

(3)*(4)=(5)

Annual Cost per Respondent

($)

(5)÷(1)

ENTITIES THAT HAVE PREVIOSULY SUBMITTED PERFORMANCE INFORMATION23

Metrics Data Collection

11

0.5

5.5

229

$18,366

1,260

$101,012

$9,183

Write Performance Analysis

11

0.5

5.5

139

$11,148

765

$61,313

$5,574

Management Review

11

0.5

5.5

33

$2,796

182

$15,377

$1,398

Subtotal


2,207

$177,702

$16,155

ENTITIES THAT HAVE NOT PREVIOSULY SUBMITTED PERFORMANCE INFORMATION24

Collection, writing, and review

5

0.5

2.5

427

$34,403

1,068

$86,008

$17,202

TOTAL

16


3,275

$263,710




13. ESTIMATE OF TOTAL ANNUAL COST OF BURDEN TO RESPONDENTS

There are no non-labor start-up costs.


14. ESTIMATED ANNUALIZED COST TO FEDERAL GOVERNMENT

The estimated annualized cost to the Federal Government related to the data collections are shown below:



Number of Hours or FTE’s

Estimated Annual Federal Cost ($)25

PRA26 Administration Cost27

-

$ 5,193.

Data Processing and Analysis

0.04

$5,980.

FERC Total

-

$11,173



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


The estimated 3,275 burden hours [average annual figures for this collection done biennially (i.e. once every two years)] are due to the time it will require to compile, review, and submit the information requested. Commission Staff now estimate receiving information from 11 entities that have previously submitted information - five entities outside of RTOs and ISOs and six ISOs and RTOs, for a total of 11 filings. Commission Staff also estimate receiving five additional responses from entities that have not submitted data before. In total, Commission Staff expect 16 filings from RTOs, ISOs, and regions outside of RTOs/ISOs. The number of respondent entities changed due to the voluntary nature of the collection and FERC staff (via their interaction with associated entities) expects an increased level of involvement from these types of entities. The burden per response has decreased due to streamlining of the requested data.


The following table shows the total burden of the new (re-instituted) collection of information. The format, labels, and definitions of the table follow the ROCIS submission system’s “Information Collection Request Summary of Burden” for the metadata. The collection is done biennially; burden estimate are averaged per year.



Total Request

Previously Approved

Change due to Adjustment in Estimate

Change Due to Agency Discretion

Annual Number of Responses

16

028

0


16

Annual Time Burden (Hr.)

3,275

029

0

3,275

Annual Cost Burden ($)

$0

$0

$0

$0



  1. TIME SCHEDULE FOR PUBLICATION OF DATA


The filings are posted in FERC’s eLibrary. Periodically Staff prepares a report on their findings based on analysis of the filed data. The most recent staff report was issued in Docket AD14-15-000 on 8/26/2014.30


17. DISPLAY OF EXPIRATION DATE


The expiration dates are displayed on ferc.gov with links to the updated table from http://www.ferc.gov/docs-filing/info-collections.asp.


  1. EXCEPTIONS TO THE CERTIFICATION STATEMENT


This information collection is a voluntary survey.


2 See GAO Report at 1.

3 Id. at 58.

4 Id. at 56.

5 Id. at 59.

6 Id. at 56, 57.

9 See GAO Report at 56.

11 79 FR 52,313 (9/3/2014).

12 See 80 FR 30,230 (5/27/2015).

13 Public utilities who have not previously submitted performance information may also voluntarily submit data from the 2008-2009 period along with their 2010-2014 submittals, if they believe that such information would be important to this initiative.

14 Published in the Federal Register on 5/27/2015 (80 FR 30,230).

15 The purpose of the additional instruction is to reduce the potential for error in compiling reports on the information submitted.

16 NYTOs are Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Power Supply Long Island, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation.

17 Id. at 56-57.

18 Common Metrics Report at 4.

19 Southern cites, for example, an inaccurate listing of Southern’s transmission loading relief data as “No Data” instead of zero and a mischaracterization of Southern’s transmission planning process as a SERC planning process instead of a Southeastern Regional Transmission Planning Process (SERTP) planning process.

20 See Common Metrics Report at 80.

21 The results in this table have been rounded for display purposes.

22 The estimates for cost per response are derived using the following formula: Average Burden Hours per Response * $XX per Hour = Average Cost per Response. The hourly cost figure for the metrics data collection and writing the performance analysis is based on the loaded average wage (salary plus benefits) of $80.20/hour for an analyst, attorney, engineer, and economist. The hourly cost figure for the management review is based on the loaded average wage (salary plus benefits) of $84.72/hour for management. Wage and benefits data are from the Bureau of Labor Statistics at http://www.bls.gov/oes/current/naics2_22.htm and http://www.bls.gov/news.release/ecec.nr0.htm.

23 Assumes responses from the six RTOs and ISOs and five public utilities that previously submitted data.

24 Assumes five public utilities that have not previously submitted information will submit data. Assumes that four of these public utilities will submit data for the period covering 2010-2014, and that one public utility will voluntarily provide data for 2008-2009 in addition to 2010-2014. The weighted average wage (salary plus benefits) assumed for new respondents is $80.57 per hour, which reflects the weighted average of the wages assumed for entities that have previously submitted performance information (weighted by the hours assumed for each information collection component in the first three rows of the table).

25 Based on 2015 cost (salary plus benefits) per FTE of $149,489 for 1 year (or 2,080 hours), rounded to $72.00 per hour.

26 Paperwork Reduction Act of 1995 (PRA).

27 The PRA Administration Cost is $5,193, and includes preparing supporting statements, notices, and other activities associated with Paperwork Reduction Act compliance.

28 The last approved burden for the FERC-922 information collection estimated the number of annual responses at 7 responses (ICR No. 201210-1092-003; approved on 3/15/2013). The FERC-922 was discontinued on 2/11/2014 (ICR No. 201210-1902-003). This figure (0) indicates that there is no information collection burden currently approved by OMB associated with the FERC-922.

29 The last approved burden for the FERC-922 information collection estimated the number of annual time burden at 1,797 hours responses (ICR No. 201210-1092-003; approved on 3/15/2013). The FERC-922 was discontinued on 2/11/2014 (ICR No. 201210-1902-003). This figure (0) indicates that there is no information collection burden currently approved by OMB associated with the FERC-922.

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