18 CFR 42.1 - Requirement that Transmission Organizations with Organized Electricity Markets Offer Long-Term Firm Transmission Rights.

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§ 42.1 Requirement that Transmission Organizations with Organized Electricity Markets Offer Long-Term Firm Transmission Rights.

(a)Purpose. This section requires a transmission organization with one or more organized electricity markets (administered either by it or by another entity) to make available long-term firm transmission rights, pursuant to section 217(b)(4) of the Federal Power Act, that satisfy each of the guidelines set forth in paragraph (d) of this section. This section does not require that a specific type of long-term firm transmission right be made available, and is intended to permit transmission organizations flexibility in satisfying the guidelines set forth in paragraph (d) of this section.

(b)Definitions. As used in this section:

(1)Transmission Organization means a Regional Transmission Organization, Independent System Operator, independent transmission provider, or other independent transmission organization finally approved by the Commission for the operation of transmission facilities.

(2)Load serving entity means a distribution utility or an electric utility that has a service obligation.

(3)Service obligation means a requirement applicable to, or the exercise of authority granted to, an electric utility under Federal, State, or local law or under long-term contracts to provide electric service to end-users or to a distribution utility.

(4)Organized Electricity Market means an auction-based day ahead and real time wholesale market where a single entity receives offers to sell and bids to buy electric energy and/or ancillary services from multiple sellers and buyers and determines which sales and purchases are completed and at what prices, based on formal rules contained in Commission-approved tariffs, and where the prices are used by a transmission organization for establishing transmission usage charges.

(c)General rule.

(1) Every public utility that is a transmission organization and that owns, operates or controls facilities used for the transmission of electric energy in interstate commerce and has one or more organized electricity markets (administered either by it or by another entity) must file with the Commission, no later than January 29, 2007, one of the following:

(i) Tariff sheets and rate schedules that make available long-term firm transmission rights that satisfy each of the guidelines set forth in paragraph (d) of this section; or

(ii) An explanation of how its current tariff and rate schedules already provide for long-term firm transmission rights that satisfy each of the guidelines set forth in paragraph (d) of this section.

(2) Any transmission organization approved by the Commission for operation after January 29, 2007 that has one or more organized electricity markets (administered either by it or by another entity) will be required to satisfy this general rule.

(3) Filings made in compliance with this paragraph (c) must explain how the transmission organization's transmission planning and expansion procedures will accommodate long-term firm transmission rights, including but not limited to how the transmission organization will ensure that allocated long-term firm transmission rights remain feasible over their entire term.

(4) Each transmission organization subject to this general rule must also make its transmission planning and expansion procedures and plans publicly available, including (but not limited to) both the actual plans and any underlying information used to develop the plans.

(d)Guidelines for Design and Administration of Long-term Firm Transmission Rights. Transmission organizations subject to paragraph (c) of this section must make available long-term firm transmission rights that satisfy the following guidelines:

(1) The long-term firm transmission right should specify a source (injection node or nodes) and sink (withdrawal node or nodes), and a quantity (MW).

(2) The long-term firm transmission right must provide a hedge against day-ahead locational marginal pricing congestion charges or other direct assignment of congestion costs for the period covered and quantity specified. Once allocated, the financial coverage provided by a financial long-term right should not be modified during its term (the “full funding” requirement) except in the case of extraordinary circumstances or through voluntary agreement of both the holder of the right and the transmission organization.

(3) Long-term firm transmission rights made feasible by transmission upgrades or expansions must be available upon request to any party that pays for such upgrades or expansions in accordance with the transmission organization's prevailing cost allocation methods for upgrades or expansions.

(4) Long-term firm transmission rights must be made available with term lengths (and/or rights to renewal) that are sufficient to meet the needs of load serving entities to hedge long-term power supply arrangements made or planned to satisfy a service obligation. The length of term of renewals may be different from the original term. Transmission organizations may propose rules specifying the length of terms and use of renewal rights to provide long-term coverage, but must be able to offer firm coverage for at least a 10 year period.

(5) Load serving entities must have priority over non-load serving entities in the allocation of long-term firm transmission rights that are supported by existing capacity. The transmission organization may propose reasonable limits on the amount of existing capacity used to support long-term firm transmission rights.

(6) A long-term transmission right held by a load serving entity to support a service obligation should be re-assignable to another entity that acquires that service obligation.

(7) The initial allocation of the long-term firm transmission rights shall not require recipients to participate in an auction.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 16 - CONSERVATION

§ 791a - Short title

§ 792 - Federal Power Commission; creation; number; appointment; term; qualifications; vacancies; quorum; chairman; salary; place of holding sessions

§ 793 - Appointment of officers and employees of Commission; duties, and salaries; detail of officers and employees from other departments; expenditures authorized

§ 793a - Repealed. Pub. L. 87–367, title I, § 103(5), Oct. 4, 1961, 75 Stat. 787

§ 794, 795 - Omitted

§ 796 - Definitions

§ 797 - General powers of Commission

§ 797a - Congressional authorization for permits, licenses, leases, or authorizations for dams, conduits, reservoirs, etc., within national parks or monuments

§ 797b - Duty to keep Congress fully and currently informed

§ 797c - Dams in National Park System units

§ 797d - Third party contracting by FERC

§ 798 - Purpose and scope of preliminary permits; transfer and cancellation

§ 799 - License; duration, conditions, revocation, alteration, or surrender

§ 800 - Issuance of preliminary permits or licenses

§ 801 - Transfer of license; obligations of transferee

§ 802 - Information to accompany application for license; landowner notification

§ 803 - Conditions of license generally

§ 804 - Project works affecting navigable waters; requirements insertable in license

§ 805 - Participation by Government in costs of locks, etc.

§ 806 - Time limit for construction of project works; extension of time; termination or revocation of licenses for delay

§ 807 - Right of Government to take over project works

§ 808 - New licenses and renewals

§ 809 - Temporary use by Government of project works for national safety; compensation for use

§ 810 - Disposition of charges arising from licenses

§ 811 - Operation of navigation facilities; rules and regulations; penalties

§ 812 - Public-service licensee; regulations by State or by commission as to service, rates, charges, etc.

§ 813 - Power entering into interstate commerce; regulation of rates, charges, etc.

§ 814 - Exercise by licensee of power of eminent domain

§ 815 - Contract to furnish power extending beyond period of license; obligations of new licensee

§ 816 - Preservation of rights vested prior to June 10, 1920

§ 817 - Projects not affecting navigable waters; necessity for Federal license, permit or right-of-way; unauthorized activities

§ 818 - Public lands included in project; reservation of lands from entry

§ 819 - Repealed. Aug. 26, 1935, ch. 687, title II, § 212, 49 Stat. 847

§ 820 - Proceedings for revocation of license or to prevent violations of license

§ 821 - State laws and water rights unaffected

§ 822 - Reservation of right to alter or repeal chapter

§ 823 - Repeal of inconsistent laws

§ 823a - Conduit hydroelectric facilities

§ 823b - Enforcement

§ 823c - Alaska State jurisdiction over small hydroelectric projects

§ 823d - Alternative conditions and prescriptions

§ 824 - Declaration of policy; application of subchapter

§ 824a - Interconnection and coordination of facilities; emergencies; transmission to foreign countries

16 U.S. Code § 824a–1 - Pooling

16 U.S. Code § 824a–2 - Reliability

16 U.S. Code § 824a–3 - Cogeneration and small power production

16 U.S. Code § 824a–4 - Seasonal diversity electricity exchange

§ 824b - Disposition of property; consolidations; purchase of securities

§ 824c - Issuance of securities; assumption of liabilities

§ 824d - Rates and charges; schedules; suspension of new rates; automatic adjustment clauses

§ 824e - Power of Commission to fix rates and charges; determination of cost of production or transmission

§ 824f - Ordering furnishing of adequate service

§ 824g - Ascertainment of cost of property and depreciation

§ 824h - References to State boards by Commission

§ 824i - Interconnection authority

§ 824j - Wheeling authority

16 U.S. Code § 824j–1 - Open access by unregulated transmitting utilities

§ 824k - Orders requiring interconnection or wheeling

§ 824l - Information requirements

§ 824m - Sales by exempt wholesale generators

§ 824n - Repealed. Pub. L. 109–58, title XII, § 1232(e)(3), Aug. 8, 2005, 119 Stat. 957

§ 824o - Electric reliability

§ 824p - Siting of interstate electric transmission facilities

§ 824q - Native load service obligation

§ 824r - Protection of transmission contracts in the Pacific Northwest

§ 824s - Transmission infrastructure investment

§ 824t - Electricity market transparency rules

§ 824u - Prohibition on filing false information

§ 824v - Prohibition of energy market manipulation

§ 824w - Joint boards on economic dispatch

§ 825 - Accounts and records

§ 825a - Rates of depreciation; notice to State authorities before fixing

§ 825b - Requirements applicable to agencies of United States

§ 825c - Periodic and special reports; obstructing filing reports or keeping accounts, etc.

§ 825d - Officials dealing in securities

§ 825e - Complaints

§ 825f - Investigations by Commission

§ 825g - Hearings; rules of procedure

§ 825h - Administrative powers of Commission; rules, regulations, and orders

§ 825i - Appointment of officers and employees; compensation

§ 825j - Investigations relating to electric energy; reports to Congress

§ 825k - Publication and sale of reports

§ 825l - Review of orders

§ 825m - Enforcement provisions

§ 825n - Forfeiture for violations; recovery; applicability

§ 825o - Penalties for violations; applicability of section

16 U.S. Code § 825o–1 - Enforcement of certain provisions

§ 825p - Jurisdiction of offenses; enforcement of liabilities and duties

§ 825q - Repealed. Pub. L. 109–58, title XII, § 1277(a), Aug. 8, 2005, 119 Stat. 978

16 U.S. Code § 825q–1 - Office of Public Participation

§ 825r - Separability