OMB files this comment in accordance with 5 CFR 1320.11(c) of the Paperwork Reduction Act and is withholding approval of this collection at this time. This OMB action is not an approval to conduct or sponsor an information collection under the Paperwork Reduction Act of 1995. The agency shall examine public comment in response to the Notice of Proposed Rulemaking and will include in the supporting statement of the next ICR, to be submitted to OMB at the final rule stage, a description of how the agency has responded to any public comments on the ICR. This action has no effect on any current approvals.
table that charts list comparision
Inventory as of this Action
Requested
Previously Approved
36 Months From Approved
0
0
0
0
0
0
0
0
0
FERC proposes to revise its regulations to require that each regional transmission organization (RTO) and independent system operator (ISO) cap each resourceâs incremental energy offer to the higher of $1,000/MWh or that resourceâs verified cost-based incremental energy offer. Under this proposal, verified cost-based incremental energy offers above $1,000/MWh would be used for purposes of calculating Locational Marginal Prices (LMPs).
The Commission preliminarily finds that the offer cap on incremental energy offers (offer cap) may no longer be just and reasonable for several reasons. The offer cap may unjustly prevent a resource from recouping its costs by not permitting that resource to include all of its short-run marginal costs within its energy supply offer (supply offer). The offer cap may result in unjust and unreasonable rates because it can suppress LMPs to a level below the marginal cost of production. Further, because of the offer cap, a resource with short-run marginal costs above that cap may choose not to offer its supply to the RTO/ISO, even though the market may be willing to purchase that supply. Finally, when several resources have short-run marginal costs above the offer cap but are unable to reflect those costs within their incremental energy offers due to the offer cap, the RTO/ISO is not able to dispatch the most efficient set of resources because it will not have access to the underlying costs associated with the multiple incremental energy offers above the offer cap.
To remedy these potential problems associated with the offer cap, the Commission proposes to require that each RTO/ISO cap each resourceâs incremental energy offer to the higher of $1,000/MWh or an incremental energy offer based on that resourceâs short-run marginal cost (cost-based incremental energy offer). Under the proposal, the costs underlying each cost-based incremental energy offer above $1,000/MWh must be verified before that offer could be used for purposes of calculating LMPs. Under this proposal, the Market Monitoring Unit or the RTO/ISO, as prescribed in the RTO/ISO tariff and consistent with FERC Order No. 719, must verify the costs within a cost-based incremental energy offer. The proposed offer cap would be resource neutral, that is, any resource, regardless of fuel-type, would be eligible to submit a cost-based incremental energy offer above $1,000/MWh.
The Commission proposes to make a generic change to the offer cap applicable to all RTOs/ISOs through a rulemaking to avoid exacerbating seams issues. Seams issues could arise if one RTO/ISO has an offer cap that materially differed from a neighboring RTO/ISOâs offer cap. Different offer caps in neighboring RTOs/ISOs could result in flows that depend on the level of the two offer caps as opposed to economics or reliability needs.
The existing tariff filings (covered by FERC-516) related to the electric utility industry are not affected by this NOPR in RM16-5-000. FERC requires this new information (to be covered by a temporary collection no., FERC-516C) in order to perform its mandated oversight and review responsibilities with respect to electric market-based rates being just and reasonable. Without this information, the Commission would be unable to meet its statutory responsibility under Section 206 of the FPA to ensure public utility rates and tariffs are just and reasonable. Failing to meet this responsibility could result in public utilities charging rates that are not just and reasonable.
Temporary collection no. FERC-516C is being used in order to submit the NOPR timely. Another unrelated package under FERC-516 is currently pending OMB review, and only one package per OMB Control No. can be pending review at a time.
$378,916
No
No
No
No
No
Uncollected
James Nachbaur 202 502-6807
Reginfo record details
No
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
516C_RM16-5-000 NOPR supporting statement clean (revised 3-24-2016).docx
18 CFR 35.28.pdf
RM16-5-000 NOPR