18 CFR [4/2019 edition]
§ 35.28 Non-discriminatory open access
transmission tariff.
(a) Applicability. This section applies
to any public utility that owns, controls
or operates facilities used for the
transmission of electric energy in
interstate commerce and to any nonpublic
utility that seeks voluntary
compliance with jurisdictional transmission
tariff reciprocity conditions.
(b) Definitions—(1) Requirements service
agreement means a contract or rate
schedule under which a public utility
provides any portion of a customer’s
bundled wholesale power requirements.
(2) Economy energy coordination agreement
means a contract, or service
schedule thereunder, that provides for
trading of electric energy on an ‘‘if, as
and when available’’ basis, but does not
require either the seller or the buyer to
engage in a particular transaction.
(3) Non-economy energy coordination
agreement means any non-requirements
service agreement, except an economy
energy coordination agreement as defined
in paragraph (b)(2) of this section.
(4) Demand response means a reduction
in the consumption of electric energy
by customers from their expected
consumption in response to an increase
in the price of electric energy or to incentive
payments designed to induce
lower consumption of electric energy.
(5) Demand response resource means a
resource capable of providing demand
response.
(6) An operating reserve shortage
means a period when the amount of
available supply falls short of demand
plus the operating reserve requirement.
(7) Market Monitoring Unit means the
person or entity responsible for carrying
out the market monitoring functions
that the Commission has ordered
Commission-approved independent system
operators and regional transmission
organizations to perform.
(8) Market Violation means a tariff
violation, violation of a Commissionapproved
order, rule or regulation,
market manipulation, or inappropriate
dispatch that creates substantial concerns
regarding unnecessary market
inefficiencies.
(9) Electric storage resource as used in
this section means a resource capable
of receiving electric energy from the
grid and storing it for later injection of
electric energy back to the grid.
(c) Non-discriminatory open access
transmission tariffs. (1) Every public
utility that owns, controls, or operates
facilities used for the transmission of
electric energy in interstate commerce
must have on file with the Commission
an open access transmission tariff of
general applicability for transmission
services, including ancillary services,
over such facilities. Such tariff must be
the pro forma tariff promulgated by the
Commission, as amended from time to
time, or such other tariff as may be approved
by the Commission consistent
with the principles set forth in Commission
rulemaking proceedings promulgating
and amending the pro forma
tariff.
(i) Subject to the exceptions in paragraphs
(c)(1)(ii), (c)(1)(iii), (c)(1)(iv),
and (c)(1)(v) of this section, the open
access transmission tariff, which tariff
must be the pro forma tariff required by
Commission rulemaking proceedings
promulgating and amending the pro
forma tariff, and accompanying rates
must be filed no later than 60 days
prior to the date on which a public
utility would engage in a sale of electric
energy at wholesale in interstate
commerce or in the transmission of
electric energy in interstate commerce.
(ii) If a public utility owns, controls,
or operates facilities used for the
transmission of electric energy in
interstate commerce, it must file the
revisions to its open access transmission
tariff required by Commission
rulemaking proceedings promulgating
and amending the pro forma tariff, pursuant
to section 206 of the FPA and accompanying
rates pursuant to section
205 of the FPA in accordance with the
procedures set forth in Commission
rulemaking proceedings promulgating
and amending the pro forma tariff.
(iii) If a public utility owns, controls,
or operates transmission facilities used
for the transmission of electric energy
in interstate commerce, such facilities
are jointly owned with a non-public
utility, and the joint ownership contract
prohibits transmission service
over the facilities to third parties, the
public utility with respect to access
over the public utility’s share of the
jointly owned facilities must file the
revisions to its open access transmission
tariff required by Commission
rulemaking proceedings promulgating
and amending the pro forma tariff pursuant
to section 206 of the FPA and accompanying
rates pursuant to section
205 of the FPA in accordance with the
procedures set forth in Commission
rulemaking proceedings promulgating
and amending the pro forma tariff.
(iv) Any public utility whose transmission
facilities are under the independent
control of a Commission-approved
ISO or RTO may satisfy its obligation
under paragraph (c)(1) of this
section, with respect to such facilities,
through the open access transmission
tariff filed by the ISO or RTO.
(v) If a public utility obtains a waiver
of the tariff requirement pursuant to
paragraph (d) of this section, it does
not need to file the open access transmission
tariff required by this section.
(vi) Any public utility that seeks a
deviation from the pro forma tariff promulgated
by the Commission, as
amended from time to time, must demonstrate
that the deviation is consistent
with the principles set forth in
Commission rulemaking proceedings
promulgating and amending the pro
forma tariff.
(vii) Each public utility’s open access
transmission tariff must include the
standards incorporated by reference in
part 38 of this chapter.
(2) Subject to the exceptions in paragraphs
(c)(2)(i) and (c)(3)(iii) of this section,
every public utility that owns,
controls, or operates facilities used for
the transmission of electric energy in
interstate commerce, and that uses
those facilities to engage in wholesale
sales and/or purchases of electric energy,
or unbundled retail sales of electric
energy, must take transmission
service for such sales and/or purchases
under the open access transmission
tariff filed pursuant to this section.
(i) For sales of electric energy pursuant
to a requirements service agreement
executed on or before July 9, 1996,
this requirement will not apply unless
separately ordered by the Commission.
For sales of electric energy pursuant to
a bilateral economy energy coordination
agreement executed on or before
July 9, 1996, this requirement is effective
on December 31, 1996. For sales of
electric energy pursuant to a bilateral
non-economy energy coordination
agreement executed on or before July
9, 1996, this requirement will not apply
unless separately ordered by the Commission.
(ii) [Reserved]
(3) Every public utility that owns,
controls, or operates facilities used for
the transmission of electric energy in
interstate commerce, and that is a
member of a power pool, public utility
holding company, or other multi-lateral
trading arrangement or agreement
that contains transmission rates,
terms or conditions, must have on file
a joint pool-wide or system-wide open
access transmission tariff, which tariff
must be the pro forma tariff promulgated
by the Commission, as amended
from time to time, or such other open
access transmission tariff as may be
approved by the Commission consistent
with the principles set forth in Commission
rulemaking proceedings promulgating
and amending the pro forma
tariff.
(i) For any power pool, public utility
holding company or other multi-lateral
arrangement or agreement that contains
transmission rates, terms or conditions
and that is executed after October
11, 2011, this requirement is effective
on the date that transactions
begin under the arrangement or agreement.
(ii) For any power pool, public utility
holding company or other multi-lateral
arrangement or agreement that contains
transmission rates, terms or conditions
and that is executed on or before
May 14, 2007, a public utility member
of such power pool, public utility
holding company or other multi-lateral
arrangement or agreement that owns,
controls, or operates facilities used for
the transmission of electric energy in
interstate commerce must file the revisions
to its joint pool-wide or systemwide
open access transmission tariff required
by Commission rulemaking proceedings
promulgating and amending
the pro forma tariff pursuant to section
206 of the FPA and accompanying rates
pursuant to section 205 of the FPA in
accordance with the procedures set
forth in Commission rulemaking proceedings
promulgating and amending
the pro forma tariff.
(iii) A public utility member of a
power pool, public utility holding company
or other multi-lateral arrangement
or agreement that contains
transmission rates, terms or conditions
and that is executed on or before July
9, 1996 must take transmission service
under a joint pool-wide or system-wide
open access transmission tariff filed
pursuant to this section for wholesale
trades among the pool or system members.
(4) Consistent with paragraph (c)(1) of
this section, every Commission-approved
ISO or RTO must have on file
with the Commission an open access
transmission tariff of general applicability
for transmission services, including
ancillary services, over such facilities.
Such tariff must be the pro forma
tariff promulgated by the Commission,
as amended from time to time, or such
other tariff as may be approved by the
Commission consistent with the principles
set forth in Commission rulemaking
proceedings promulgating and
amending the pro forma tariff.
(i) Subject to paragraph (c)(4)(ii) of
this section, a Commission-approved
ISO or RTO must file the revisions to
its open access transmission tariff required
by Commission rulemaking proceedings
promulgating and amending
the pro forma tariff pursuant to section
206 of the FPA and accompanying rates
pursuant to section 205 of the FPA in
accordance with the procedures set
forth in Commission rulemaking proceedings
promulgating and amending
the pro forma tariff.
(ii) If a Commission-approved ISO or
RTO can demonstrate that its existing
open access transmission tariff is consistent
with or superior to the pro
forma tariff promulgated by the Commission,
as amended from time to
time, the Commission-approved ISO or
RTO may instead set forth such demonstration
in its filing pursuant to section
206 in accordance with the procedures
set forth in Commission rulemaking
proceedings promulgating and
amending the pro forma tariff.
(d) Waivers. (1) A public utility subject
to the requirements of this section
and 18 CFR parts 37 (Open Access
Same-Time Information System) and
358 (Standards of Conduct for Transmission
Providers) may file a request
for waiver of all or part of such requirements
for good cause shown. Except
as provided in paragraph (f) of this
section, an application for waiver must
be filed no later than 60 days prior to
the time the public utility would have
to comply with the requirement.
(2) The requirements of this section,
18 CFR parts 37 (Open Access Same-
Time Information System) and 358
(Standards of Conduct for Transmission
Providers) are waived for any
public utility that is or becomes subject
to such requirements solely because
it owns, controls, or operates
Interconnection Customer’s Interconnection
Facilities, in whole or in
part, as that term is defined in the
standard generator interconnection
procedures and agreements referenced
in paragraph (f) of this section, or comparable
jurisdictional interconnection
facilities that are the subject of interconnection
agreements other than the
standard generator interconnection
procedures and agreements referenced
in paragraph (f) of this section, if the
entity that owns, operates, or controls
such facilities either sells electric energy,
or files a statement with the
Commission that it commits to comply
with and be bound by the obligations
and procedures applicable to electric
utilities under section 210 of the Federal
Power Act.
(i) The waivers referenced in this
paragraph (d)(2) shall be deemed to be
revoked as of the date the public utility
ceases to satisfy the qualifications
of this paragraph (d)(2), and may be revoked
by the Commission if the Commission
determines that it is in the
public interest to do so. After revocation
of its waivers, the public utility
must comply with the requirements
that had been waived within 60 days of
revocation.
(ii) Any eligible entity that seeks
interconnection or transmission services
with respect to the interconnection
facilities for which a waiver is in
effect pursuant to this paragraph (d)(2)
may follow the procedures in sections
210, 211, and 212 of the Federal Power
Act, 18 CFR 2.20, and 18 CFR part 36. In
any proceeding pursuant to this paragraph
(d)(2)(ii):
(A) The Commission will consider it
to be in the public interest to grant
priority rights to the owner and/or operator
of interconnection facilities
specified in this paragraph (d)(2) to use
capacity thereon when such owner and/
or operator can demonstrate that it
has specific plans with milestones to
use such capacity to interconnect its
or its affiliate’s future generation
projects.
(B) For the first five years after the
commercial operation date of the
interconnection facilities specified in
this paragraph (d)(2), the Commission
will apply the rebuttable presumption
that the owner and/or operator of such
facilities has definitive plans to use the
capacity thereon, and it is thus in the
public interest to grant priority rights
to the owner and/or operator of such facilities
to use capacity thereon.
(e) Non-public utility procedures for
tariff reciprocity compliance. (1) A nonpublic
utility may submit an open access
transmission tariff and a request
for declaratory order that its voluntary
transmission tariff meets the
requirements of Commission rulemaking
proceedings promulgating and
amending the pro forma tariff.
(i) Any submittal and request for declaratory
order submitted by a nonpublic
utility will be provided an NJ
(non-jurisdictional) docket designation.
(ii) If the submittal is found to be an
acceptable open access transmission
tariff, an applicant in a Federal Power
Act (FPA) section 211 or 211A proceeding
against the non-public utility
shall have the burden of proof to show
why service under the open access
transmission tariff is not sufficient and
why a section 211 or 211A order should
be granted.
(2) A non-public utility may file a request
for waiver of all or part of the
reciprocity conditions contained in a
public utility open access transmission
tariff, for good cause shown. An application
for waiver may be filed at any
time.
(f) Standard generator interconnection
procedures and agreements. (1) Every
public utility that is required to have
on file a non-discriminatory open access
transmission tariff under this section
must amend such tariff by adding
the standard interconnection procedures
and agreement and the standard
small generator interconnection procedures
and agreement required by Commission
rulemaking proceedings promulgating
and amending such interconnection
procedures and agreements,
or such other interconnection procedures
and agreements as may be required
by Commission rulemaking proceedings
promulgating and amending
the standard interconnection procedures
and agreement and the standard
small generator interconnection procedures
and agreement.
(i) Any public utility that seeks a deviation
from the standard interconnection
procedures and agreement or the
standard small generator interconnection
procedures and agreement required
by Commission rulemaking proceedings
promulgating and amending
such interconnection procedures and
agreements, must demonstrate that
the deviation is consistent with the
principles set forth in Commission
rulemaking proceedings promulgating
and amending such interconnection
procedures and agreements.
(ii)–(iv) [Reserved]
(2) The non-public utility procedures
for tariff reciprocity compliance described
in paragraph (e) of this section
are applicable to the standard interconnection
procedures and agreements.
(3) A public utility subject to the requirements
of this paragraph (f) may
file a request for waiver of all or part
of the requirements of this paragraph
(f), for good cause shown.
(g) Tariffs and operations of Commission-
approved independent system operators
and regional transmission organizations—(
1) Demand response and pricing—
(i) Ancillary services provided by demand
response resources. (A) Every Commission-
approved independent system operator
or regional transmission organization
that operates organized markets
based on competitive bidding for energy
imbalance, spinning reserves,
supplemental reserves, reactive
power and voltage control, or regulation
and frequency response ancillary
services (or its functional equivalent in
the Commission-approved independent
system operator’s or regional transmission
organization’s tariff) must accept
bids from demand response resources
in these markets for that product
on a basis comparable to any other
resources, if the demand response resource
meets the necessary technical
requirements under the tariff, and submits
a bid under the Commission-approved
independent system operator’s
or regional transmission organization’s
bidding rules at or below the marketclearing
price, unless not permitted by
the laws or regulations of the relevant
electric retail regulatory authority.
(B) Each Commission-approved independent
system operator or regional
transmission organization must allow
providers of a demand response resource
to specify the following in their
bids:
(1) A maximum duration in hours
that the demand response resource
may be dispatched;
(2) A maximum number of times that
the demand response resource may be
dispatched during a day; and
(3) A maximum amount of electric
energy reduction that the demand response
resource may be required to
provide either daily or weekly.
(ii) Removal of deviation charges. A
Commission-approved independent system
operator or regional transmission
organization with a tariff that contains
a day-ahead and a real-time market
may not assess charge to a purchaser
of electric energy in its day-ahead market
for purchasing less power in the
real-time market during a real-time
market period for which the Commission-
approved independent system operator
or regional transmission organization
declares an operating reserve
shortage or makes a generic request to
reduce load to avoid an operating reserve
shortage.
(iii) Aggregation of retail customers.
Each Commission-approved independent
system operator and regional
transmission organization must accept
bids from an aggregator of retail customers
that aggregates the demand response
of the customers of utilities
that distributed more than 4 million
megawatt-hours in the previous fiscal
year, and the customers of utilities
that distributed 4 million megawatthours
or less in the previous fiscal
year, where the relevant electric retail
regulatory authority permits such customers’
demand response to be bid into
organized markets by an aggregator of
retail customers. An independent system
operator or regional transmission
organization must not accept bids from
an aggregator of retail customers that
aggregates the demand response of the
customers of utilities that distributed
more than 4 million megawatt-hours in
the previous fiscal year, where the relevant
electric retail regulatory authority
prohibits such customers’ demand
response to be bid into organized markets
by an aggregator of retail customers,
or the customers of utilities
that distributed 4 million megawatthours
or less in the previous fiscal
year, unless the relevant electric retail
regulatory authority permits such customers’
demand response to be bid into
organized markets by an aggregator of
retail customers.
(iv) Price formation during periods of
operating reserve shortage. (A) Each
Commission-approved independent system
operator and regional transmission
organization must modify its
market rules to allow the marketclearing
price during periods of operating
reserve shortage to reach a level
that rebalances supply and demand so
as to maintain reliability while providing
sufficient provisions for mitigating
market power. Each Commission-
approved independent system operator
and regional transmission organization
must trigger shortage pricing
for any interval in which a shortage of
energy or operating reserves is indicated
during the pricing of resources
for that interval.
(B) A Commission-approved independent
system operator or regional
transmission organization may phase
in this modification of its market
rules.
(v) Demand response compensation in
energy markets. Each Commission-approved
independent system operator or
regional transmission organization
that has a tariff provision permitting
demand response resources to participate
as a resource in the energy market
by reducing consumption of electric
energy from their expected levels
in response to price signals must:
(A) Pay to those demand response resources
the market price for energy for
these reductions when these demand
response resources have the capability
to balance supply and demand and
when payment of the market price for
energy to these resources is cost-effective
as determined by a net benefits
test accepted by the Commission;
(B) Allocate the costs associated with
demand response compensation proportionally
to all entities that purchase
from the relevant energy market in the
area(s) where the demand response reduces
the market price for energy at
the time when the demand response resource
is committed or dispatched.
(vi) Settlement intervals. Each Commission-
approved independent system
operator and regional transmission organization
must settle energy transactions
in its real-time markets at the
same time interval it dispatches energy,
must settle operating reserves
transactions in its real-time markets
at the same time interval it prices operating
reserves, and must settle
intertie transactions at the same time
interval it schedules intertie transactions.
(2) Long-term power contracting in organized
markets. Each Commission-approved
independent system operator or
regional transmission organization
must provide a portion of its Web site
for market participants to post offers
to buy or sell power on a long-term
basis.
(3) Market monitoring policies. (i) Each
Commission-approved independent system
operator or regional transmission
organization must modify its tariff
provisions governing its Market Monitoring
Unit to reflect the directives
provided in OrderNo. 719, including the
following:
(A) Each Commission-approved independent
system operator or regional
transmission organization must include
in its tariff a provision to provide
its Market Monitoring Unit access to
Commission-approved independent system
operator and regional transmission
organization market data, resources
and personnel to enable the
MarketMonitoring Unit to carry out
its functions.
(B) The tariff provision must provide
the Market Monitoring Unit complete
access to the Commission-approved
independent system operator’s and regional
transmission organization’s
databases of market information.
(C) The tariff provision must provide
that any data created by the Market
Monitoring Unit, including, but not
limited to, reconfiguring of the Commission-
approved independent system
operator’s and regional transmission
organization’s data, will be kept within
the exclusive control of the Market
Monitoring Unit.
(D) The Market Monitoring Unit
must report to the Commission-approved
independent system operator’s
or regional transmission organization’s
board of directors, with its management
members removed, or to an independent
committee of the Commissionapproved
independent system operator’s
or regional transmission organization’s
board of directors. A Commission-
approved independent system operator
or regional transmission organization
that has both an internal Market
Monitoring Unit and an external
Market Monitoring Unit may permit
the internal Market Monitoring Unit
to report to management and the external
Market Monitoring Unit to report
to the Commission-approved independent
system operator’s or regional
transmission organization’s board of
directors with its management members
removed, or to an independent
committee of the Commission-approved
independent system operator or
regional transmission organization
board of directors. If the internal market
monitor is responsible for carrying
out any or all of the core Market Monitoring
Unit functions identified in
paragraph (g)(3)(ii) of this section, the
internal market monitor must report
to the independent system operator’s
or regional transmission organization’s
board of directors.
(E) A Commission-approved independent
system operator or regional
transmission organization may not
alter the reports generated by the Market
Monitoring Unit, or dictate the
conclusions reached by the Market
Monitoring Unit.
(F) Each Commission-approved independent
system operator or regional
transmission organization must consolidate
the core Market Monitoring
Unit provisions into one section of its
tariff. Each independent system operator
or regional transmission organization
must include a mission statement
in the introduction to the Market Monitoring
Unit provisions that identifies
the Market Monitoring Unit’s goals,
including the protection of consumers
and market participants by the identification
and reporting of market design
flaws and market power abuses.
(ii) Core Functions of Market Monitoring
Unit. The Market Monitoring
Unit must perform the following core
functions:
(A) Evaluate existing and proposed
market rules, tariff provisions and
market design elements and recommend
proposed rule and tariff
changes to the Commission-approved
independent system operator or regional
transmission organization, to
the Commission’s Office of Energy
Market Regulation staff and to other
interested entities such as state commissions
and market participants, provided
that:
(1) The Market Monitoring Unit is
not to effectuate its proposed market
design itself, and
(2) The Market Monitoring Unit must
limit distribution of its identifications
and recommendations to the independent
system operator or regional
transmission organization and to Commission
staff in the event it believes
broader dissemination could lead to exploitation,
with an explanation of why
further dissemination should be avoided
at that time.
(B) Review and report on the performance
of the wholesale markets to
the Commission-approved independent
system operator or regional transmission
organization, the Commission,
and other interested entities such as
state commissions and market participants,
on at least a quarterly basis and
submit a more comprehensive annual
state of the market report. The Market
Monitoring Unit may issue additional
reports as necessary.
(C) Identify and notify the Commission’s
Office of Enforcement staff of instances
in which a market participant’s
or the Commission-approved
independent system operator’s or regional
transmission organization’s behavior
may require investigation, including,
but not limited to, suspected
Market Violations.
(iii) Tariff administration and mitigation
(A) A Commission-approved independent
system operator or regional
transmission organization may not
permit its Market Monitoring Unit,
whether internal or external, to participate
in the administration of the
Commission-approved independent system
operator’s or regional transmission
organization’s tariff or, except
as provided in paragraph (g)(3)(iii)(D)
of this section, to conduct prospective
mitigation.
(B) A Commission-approved independent
system operator or regional
transmission organization may permit
its Market Monitoring Unit to provide
the inputs required for the Commission-
approved independent system operator
or regional transmission organization
to conduct prospective mitigation,
including, but not limited to, reference
levels, identification of system
constraints, and cost calculations.
(C) A Commission-approved independent
system operator or regional
transmission organization may allow
its Market Monitoring Unit to conduct
retrospective mitigation.
(D) A Commission-approved independent
system operator or regional
transmission organization with a hybrid
Market Monitoring Unit structure
may permit its internal market monitor
to conduct prospective and/or retrospective
mitigation, in which case it
must assign to its external market
monitor the responsibility and the
tools to monitor the quality and appropriateness
of the mitigation.
(E) Each Commission-approved independent
system operator or regional
transmission organization must identify
in its tariff the functions the Market
Monitoring Unit will perform and
the functions the Commission-approved
independent system operator or
regional transmission organization will
perform.
(iv) Protocols on Market Monitoring
Unit referrals to the Commission of suspected
violations. (A) A Market Monitoring
Unit is to make a non-public referral
to the Commission in all instances
where the Market Monitoring
Unit has reason to believe that a Market
Violation has occurred. While the
Market Monitoring Unit need not be
able to prove that a Market Violation
has occurred, the Market Monitoring
Unit is to provide sufficient credible
information to warrant further investigation
by the Commission. Once the
Market Monitoring Unit has obtained
sufficient credible information to warrant
referral to the Commission, the
Market Monitoring Unit is to immediately
refer the matter to the Commission
and desist from independent
action related to the alleged Market
Violation. This does not preclude the
Market Monitoring Unit from continuing
to monitor for any repeated instances
of the activity by the same or
other entities, which would constitute
new Market Violations. The Market
Monitoring Unit is to respond to requests
from the Commission for any
additional information in connection
with the alleged Market Violation it
has referred.
(B) All referrals to the Commission
of alleged Market Violations are to be
in writing, whether transmitted electronically,
by fax, mail, or courier. The
Market Monitoring Unit may alert the
Commission orally in advance of the
written referral.
(C) The referral is to be addressed to
the Commission’s Director of the Office
of Enforcement, with a copy also directed
to both the Director of the Office
of Energy Market Regulation and
the General Counsel.
(D) The referral is to include, but
need not be limited to, the following
information.
(1) The name[s] of and, if possible,
the contact information for, the
entity[ies] that allegedly took the
action[s] that constituted the alleged
Market Violation[s];
(2) The date[s] or time period during
which the alleged Market Violation[s]
occurred and whether the alleged
wrongful conduct is ongoing;
(3) The specific rule or regulation,
and/or tariff provision, that was allegedly
violated, or the nature of any inappropriate
dispatch that may have occurred;
(4) The specific act[s] or conduct that
allegedly constituted the Market Violation;
(5) The consequences to the market
resulting from the acts or conduct, including,
if known, an estimate of economic
impact on the market;
(6) If the Market Monitoring Unit believes
that the act[s] or conduct constituted
a violation of the anti-manipulation
rule of Part 1c, a description of
the alleged manipulative effect on market
prices, market conditions, or market
rules;
(7) Any other information the Market
Monitoring Unit believes is relevant
and may be helpful to the Commission.
(E) Following a referral to the Commission,
the Market Monitoring Unit is
to continue to notify and inform the
Commission of any information that
the Market Monitoring Unit learns of
that may be related to the referral, but
the Market Monitoring Unit is not to
undertake any investigative steps regarding
the referral except at the express
direction of the Commission or
Commission Staff.
(v) Protocols on Market Monitoring
Unit Referrals to the Commission of Perceived
Market Design Flaws and Recommended
Tariff Changes. (A) A Market
Monitoring Unit is to make a referral
to the Commission in all instances
where the Market Monitoring Unit has
reason to believe market design flaws
exist that it believes could effectively
be remedied by rule or tariff changes.
The Market Monitoring Unit must
limit distribution of its identifications
and recommendations to the independent
system operator or regional
transmission organization and to the
Commission in the event it believes
broader dissemination could lead to exploitation,
with an explanation of why
further dissemination should be avoided
at that time.
(B) All referrals to the Commission
relating to perceived market design
flaws and recommended tariff changes
are to be in writing, whether transmitted
electronically, by fax, mail, or
courier. The Market Monitoring Unit
may alert the Commission orally in advance
of the written referral.
(C) The referral should be addressed
to the Commission’s Director of the Office
of Energy Market Regulation, with
copies directed to both the Director of
the Office of Enforcement and the General
Counsel.
(D) The referral is to include, but
need not be limited to, the following
information.
(1) A detailed narrative describing
the perceived market design flaw[s];
(2) The consequences of the perceived
market design flaw[s], including, if
known, an estimate of economic impact
on the market;
(3) The rule or tariff change(s) that
the Market Monitoring Unit believes
could remedy the perceived market design
flaw;
(4) Any other information the Market
Monitoring Unit believes is relevant
and may be helpful to the Commission.
(E) Following a referral to the Commission,
the Market Monitoring Unit is
to continue to notify and inform the
Commission of any additional information
regarding the perceived market
design flaw, its effects on the market,
any additional or modified observations
concerning the rule or tariff
changes that could remedy the perceived
design flaw, any recommendations
made by the Market Monitoring
Unit to the regional transmission organization
or independent system operator,
stakeholders, market participants
or state commissions regarding
the perceived design flaw, and any actions
taken by the regional transmission
organization or independent
system operator regarding the perceived
design flaw.
(vi) Market Monitoring Unit ethics
standards. Each Commission-approved
independent system operator or regional
transmission organization must
include in its tariff ethical standards
for its Market Monitoring Unit and the
employees of its Market Monitoring
Unit. At a minimum, the ethics standards
must include the following requirements:
(A) The Market Monitoring Unit and
its employees must have no material
affiliation with any market participant
or affiliate.
(B) The Market Monitoring Unit and
its employees must not serve as an officer,
employee, or partner of a market
participant.
(C) The Market Monitoring Unit and
its employees must have no material
financial interest in any market participant
or affiliate with potential exceptions
for mutual funds and non-directed
investments.
(D) The Market Monitoring Unit and
its employees must not engage in any
market transactions other than the
performance of their duties under the
tariff.
(E) The Market Monitoring Unit and
its employees must not be compensated,
other than by the Commission-
approved independent system operator
or regional transmission organization
that retains or employs it, for
any expert witness testimony or other
commercial services, either to the
Commission-approved independent system
operator or regional transmission
organization or to any other party, in
connection with any legal or regulatory
proceeding or commercial transaction
relating to the Commission-approved
independent system operator or
regional transmission organization or
to the Commission-approved independent
system operator’s or regional
transmission organization’s markets.
(F) The Market Monitoring Unit and
its employees may not accept anything
of value from a market participant in
excess of a de minimis amount.
(G) The Market Monitoring Unit and
its employees must advise a supervisor
in the event they seek employment
with a market participant, and must
disqualify themselves from participating
in any matter that would have
an effect on the financial interest of
the market participant.
(4) Electronic delivery of data. Each
Commission-approved regional transmission
organization and independent
system operator must electronically
deliver to the Commission, on an ongoing
basis and in a form and manner
consistent with its own collection of
data and in a form and manner acceptable
to the Commission, data related to
the markets that the regional transmission
organization or independent
system operator administers.
(5) Offer and bid data. (i) Unless a
Commission-approved independent system
operator or regional transmission
organization obtains Commission approval
for a different period, each Commission-
approved independent system
operator and regional transmission organization
must release its offer and
bid data within three months.
(ii) A Commission-approved independent
system operator or regional
transmission organization must mask
the identity of market participants
when releasing offer and bid data. The
Commission-approved independent system
operators and regional transmission
organization may propose a
time period for eventual unmasking.
(6) Responsiveness of Commission-approved
independent system operators and
regional transmission organizations. Each
Commission-approved independent system
operator or regional transmission
organization must adopt business practices
and procedures that achieve Commission-
approved independent system
operator and regional transmission organization
board of directors’ responsiveness
to customers and other stakeholders
and satisfy the following criteria:
(i) Inclusiveness. The business practices
and procedures must ensure that
any customer or other stakeholder affected
by the operation of the Commission-
approved independent system operator
or regional transmission organization,
or its representative, is permitted
to communicate the customer’s
or other stakeholder’s views to the
independent system operator’s or regional
transmission organization’s
board of directors;
(ii) Fairness in balancing diverse interests.
The business practices and procedures
must ensure that the interests of
customers or other stakeholders are
equitably considered, and that deliberation
and consideration of Commission-
approved independent system operator’s
and regional transmission organization’s
issues are not dominated
by any single stakeholder category;
(iii) Representation of minority positions.
The business practices and procedures
must ensure that, in instances
where stakeholders are not in total
agreement on a particular issue, minority
positions are communicated to
the Commission-approved independent
system operator’s and regional transmission
organization’s board of directors
at the same time as majority positions;
and
(iv) Ongoing responsiveness. The business
practices and procedures must
provide for stakeholder input into the
Commission-approved independent system
operator’s or regional transmission
organization’s decisions as
well as mechanisms to provide feedback
to stakeholders to ensure that information
exchange and communication
continue over time.
(7) Compliance filings. All Commission-
approved independent system operators
and regional transmission organizations
must make a compliance filing
with the Commission as described
in Order No. 719 under the following
schedule:
(i) The compliance filing addressing
the accepting of bids from demand response
resources in markets for ancillary
services on a basis comparable to
other resources, removal of deviation
charges, aggregation of retail customers,
shortage pricing during periods
of operating reserve shortage, longterm
power contracting in organized
markets, Market Monitoring Units,
Commission-approved independent system
operators’ and regional transmission
organizations’ board of directors’
responsiveness, and reporting on
the study of the need for further reforms
to remove barriers to comparable
treatment of demand response
resources must be submitted on or before
April 28, 2009.
(ii) A public utility that is approved
as a regional transmission organization
under § 35.34, or that is not approved
but begins to operate regional markets
for electric energy or ancillary services
after December 29, 2008, must comply
with Order No. 719 and the provisions of
paragraphs (g)(1) through (g)(5) of this
section before beginning operations.
(8) Frequency regulation compensation
in ancillary services markets. Each Commission-
approved independent system
operator or regional transmission organization
that has a tariff that provides
for the compensation for frequency regulation
service must provide such compensation
based on the actual service
provided, including a capacity payment
that includes the marginal unit’s opportunity
costs and a payment for performance
that reflects the quantity of
frequency regulation service provided
by a resource when the resource is accurately
following the dispatch signal.
(9) Electric storage resources. (i) Each
Commission-approved independent system
operator and regional transmission
organization must have tariff
provisions providing a participation
model for electric storage resources
that:
(A) Ensures that a resource using the
participation model for electric storage
resources in an independent system operator
or regional transmission organization
market is eligible to provide all
capacity, energy, and ancillary services
that it is technically capable of
providing;
(B) Ensures that a resource using the
participation model for electric storage
resources can be dispatched and can set
the wholesale market clearing price as
both a wholesale seller and wholesale
buyer consistent with rules that govern
the conditions under which a resource
can set the wholesale price;
(C) Accounts for the physical and
operational characteristics of electric
storage resources through bidding parameters
or other means; and
(D) Establishes a minimum size requirement
for resources using the participation
model for electric storage
resources that does not exceed 100 kW.
(ii) The sale of electric energy from
an independent system operator or regional
transmission organization market
to an electric storage resource that
the resource then resells back to that
market must be at the wholesale locational
marginal price.
(10) Transparency—(i) Uplift reporting.
Each Commission-approved independent
system operator or regional
transmission organization must post
two reports, at minimum, regarding
uplift on a publicly accessible portion
of its website. First, each Commissionapproved
independent system operator
or regional transmission organization
must post uplift, paid in dollars, and
categorized by transmission zone, day,
and uplift category. Transmission zone
shall be defined as the geographic area
that is used for the local allocation of
charges. Transmission zones with fewer
than four resources may be aggregated
with one or more neighboring transmission
zones, until each aggregated
zone contains at least four resources,
and reported collectively. This report
shall be posted within 20 calendar days
of the end of each month. Second, each
Commission-approved independent system
operator or regional transmission
organization must post the resource
name and the total amount of uplift
paid in dollars aggregated across the
month to each resource that received
uplift payments within the calendar
month. This report shall be posted
within 90 calendar days of the end of
each month.
(ii) Reporting Operator-Initiated Commitments.
Each Commission-approved
independent system operator or regional
transmission organization must
post a report of each operator-initiated
commitment listing the size of the
commitment, transmission zone, commitment
reason, and commitment
start time on a publicly accessible portion
of its website within 30 calendar
days of the end of each month. Transmission
zone shall be defined as a geographic
area that is used for the local
allocation of charges. Commitment
reasons shall include, but are not limited
to, system-wide capacity, constraint
management, and voltage support.
(iii) Transmission constraint penalty
factors. Each Commission-approved
independent system operator or regional
transmission organization must
include, in its tariff, its transmission
constraint penalty factor values; the
circumstances, if any, under which the
transmission constraint penalty factors
can set locational marginal prices;
and the procedure, if any, for temporarily
changing the transmission constraint
penalty factor values. Any procedure
for temporarily changing transmission
constraint penalty factor values
must provide for notice of the
change to market participants.
(11) A resource’s incremental energy
offer must be capped at the higher of
$1,000/MWh or that resource’s costbased
incremental energy offer. For the
purpose of calculating Locational Marginal
Prices, Regional Transmission
Organizations and Independent System
Operators must cap cost-based incremental
energy offers at $2,000/MWh.
The actual or expected costs underlying
a resource’s cost-based incremental
energy offer above $1,000/MWh
must be verified before that offer can
be used for purposes of calculating Locational
Marginal Prices. If a resource
submits an incremental energy offer
above $1,000/MWh and the actual or expected
costs underlying that offer cannot
be verified before the market clearing
process begins, that offer may not
be used to calculate Locational Marginal
Prices and the resource would be
eligible for a make-whole payment if
that resource is dispatched and the resource’s
actual costs are verified afterthe-
fact. A resource would also be eligible
for a make-whole payment if it is
dispatched and its verified cost-based
incremental energy offer exceeds $2,000/
MWh. All resources, regardless of type,
are eligible to submit cost-based incremental
energy offers in excess of $1,000/
MWh.
[Order 888, 61 FR 21693, May 10, 1996]
EDITORIAL NOTE: For FEDERAL REGISTER citations
affecting § 35.28, see the List of CFR
Sections Affected, which appears in the
Finding Aids section of the printed volume
and at www.govinfo.gov.
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| Author | Ellen Brown |
| File Modified | 0000-00-00 |
| File Created | 2022-07-08 |