

[Federal Register: May 25, 2006 (Volume 71, Number 101)]
[Rules and Regulations]               
[Page 30056-30058]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25my06-5]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 358

[Docket No. RM01-10-005]

 
Standards of Conduct for Transmission Providers

Issued May 18, 2006.
AGENCY: Federal Energy Regulatory Commission; DOE.

ACTION: Order on Request for Additional Clarification.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
issuing this Order to clarify that, in the event of a grid disturbance, 
a Transmission Provider may communicate to an affiliated nuclear power 
plant specific information about transmission system conditions on a 
real-time basis.

DATES: Effective Date: The Order on Request for Additional 
Clarification will become effective May 25, 2006.

FOR FURTHER INFORMATION CONTACT: Mary Kipp, Office of Enforcement, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426. (202) 502-8228. mary.kipp@ferc.gov.

SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead 
Brownell, and Suedeen G. Kelly.

Order on Request for Additional Clarification

    1. In this order, the Commission addresses the request seeking 
clarification of the Commission's February 16, 2006 ``Interpretive 
Order Relating to the Standards of Conduct'' (Interpretive Order).\1\ 
The Interpretive Order clarified that, subject to the no-conduit rule, 
Transmission Providers may communicate with affiliated nuclear power 
plants regarding certain matters related to the safety and reliability 
of the transmission system, in order to comply with requirements of the 
Nuclear Regulatory Commission (NRC). For the reasons discussed herein, 
we grant the request for additional clarification.
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    \1\ Interpretive Order Relating to the Standards of Conduct, 71 
FR 9446 (Feb. 24, 2006), FERC Stats. & Regs. ] 31,206 (2006).
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    2. On March 20, 2006, Exelon Corporation (``Exelon'') filed 
comments and a request for clarification of the Interpretive Order. 
Specifically, Exelon requests that the Commission clarify that a 
Transmission Provider can provide its affiliated nuclear power plants 
(``NPPs'') with specific information concerning the location and nature 
of grid disturbances that potentially threaten the grid's ability to 
provide power to a plant's safety systems. On March 21, 2006, the 
Nuclear Energy Institute (``NEI'') filed comments in support of 
Exelon's position. In this order, the Commission clarifies that, in the 
event of a grid disturbance, a Transmission Provider may communicate to 
an affiliated NPP specific information about transmission system 
conditions on a real-time basis, including: (i) A technical description 
of the grid disturbance, along with its specific location on the 
system; (ii) the grid elements, whether lines, substations, or other 
elements, that may

[[Page 30057]]

be affected by the disturbance, and their specific locations on the 
system; (iii) the projected duration of the disturbance; and (iv) steps 
being taken by the Transmission Provider to resolve the disturbance. 
This order benefits customers because it clarifies that Transmission 
Providers and NPPs may share information necessary to maintain the 
safety and reliability of the transmission grid while ensuring that 
there is no undue preference or services.

I. Background

    3. On November 25, 2003, the Commission issued a Final Rule 
adopting Standards of Conduct for Transmission Providers (Order No. 
2004).\2\ Under Order No. 2004, the Standards of Conduct govern the 
relationships between Transmission Providers and all of their Marketing 
Affiliates and Energy Affiliates. The Standards of Conduct also contain 
various information-sharing prohibitions to help ensure that 
Transmission Providers do not use their access to information about 
transmission to unfairly benefit their own or their affiliates' sales 
to the detriment of competitive markets. Absent one of the exceptions 
articulated in section 358.5 of the Commission's regulations, if a 
Transmission Provider discloses transmission information to its 
Marketing or Energy Affiliate, the Transmission Provider is required to 
immediately post that information on its OASIS or Internet Web site.
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    \2\ Standards of Conduct for Transmission Providers, Order No. 
2004, FERC Stats. & Regs., Regulations Preambles ] 31,155 (2003), 
order on reh'g, Order No. 2004-A, III FERC Stats. & Regs. ] 31,161 
(2004), 107 FERC ] 61,032 (2004), order on reh'g, Order No. 2004-B, 
III FERC Stats. & Regs. ] 31,166 (2004), 108 FERC ] 61,118 (2004), 
order on reh'g, Order No. 2004-C, 109 FERC ] 61,325 (2004), order on 
reh'g, Order No. 2004-D, 110 FERC ] 61,320 (2005), appeal docketed 
sub nom., National Gas Fuel Supply Corporation v. FERC, No. 04-1183 
(DC Cir. June 9, 2004).
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    4. On February 16, 2006, the Commission issued the Interpretive 
Order. The Interpretive Order clarified that sections 358.5(a) and (b) 
of the Commission's regulations, 18 CFR 358.5(a) and (b) (2005), do not 
prohibit a Transmission Provider and its affiliated NPP from engaging 
in necessary communications related to the safety and reliability of 
the transmission system or the NPP, including information relating to 
the loss of or potential loss of transmission lines that provide off-
site power to the NPP.\3\ The Commission issued the Interpretive Order 
to clarify that Transmission Providers may communicate with affiliated 
and non-affiliated NPPs to enable the NPPs to comply with the 
requirements of the NRC as described in the NRC's February 1, 2006 
Generic Letter 2006-002, Grid Reliability and the Impact on Plant Risk 
and the Operability of Offsite Power (the ``Generic Letter'').\4\ The 
Commission also reemphasized that, although such communications are 
permitted, the NPP operator is prohibited from being a conduit for 
sharing this information with employees of other Marketing or Energy 
Affiliates. 18 CFR 358.5(b)(7) (2005).\5\
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    \3\ Interpretive Order at P 1.
    \4\ Id. referencing Nuclear Regulatory Commission's Generic 
Letter 2006-002, Grid Reliability and the Impact on Plant Risk and 
the Operability of Offsite Power. February 1, 2006. OMB Control No.: 
3150-0011.
    \5\ Interpretive Order at P 6.
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    5. Although no public notice or comment on the Interpretive Order 
was required pursuant to section 4(b)(A) of the Administrative 
Procedure Act, 5 U.S.C. 533(b)(A) (2000), which exempts from such 
notice or comment ``interpretive rules, general statements of policy or 
rules of agency organization, procedure or practice,'' the Commission 
invited all interested persons to submit written comments.\6\ Comments 
were due March 20, 2006. Reply comments were due on April 19, 2006. The 
Generic Letter and the Interpretive Order were also discussed at the 
first ever joint meeting of the Commission and the NRC held on April 
24, 2006.
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    \6\ Id. at P 10.
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    6. Exelon filed timely comments in which it expresses agreement 
with the Commission that the clarifications set forth in the 
Interpretive Order will enhance safe operations at nuclear facilities. 
Exelon also requests that the Commission make additional 
clarifications. NEI filed comments in support of Exelon's position. No 
other comments or reply comments were filed.
    7. Exelon argues that, while the Interpretive Order expressly held 
that Transmission Providers may communicate information on grid 
disturbances and the duration of power unavailability, the Interpretive 
Order only implicitly approved disclosure of the location and nature of 
the disturbance. Exelon asserts that such information clearly 
encompasses the ``necessary communications related to safety or 
reliability that the Standards of Conduct are not intended to impede.'' 
Thus, Exelon asks that the Commission further clarify that, subject to 
the no-conduit rule, a Transmission Provider may provide its affiliated 
NPPs with specific information concerning the location and nature of 
grid disturbances that potentially threaten the grid's ability to 
provide power to a plant's safety systems.
    8. Exelon asserts that grid conditions may not only interfere with 
NPP access to offsite power, but may also require the Transmission 
Provider to ask the NPP to take some action, such as reducing output or 
operating switchyard equipment. In addition, Exelon points out that 
grid conditions may involve actual system emergencies or transmission 
element outages that create contingencies. Finally, Exelon states that 
grid conditions that may impact an NPP may occur on transmission system 
elements directly connected to the NPP, on more remote elements on the 
Transmission Provider's system, or even on elements in the system of 
another Transmission Provider. Exelon argues that under any and all 
such conditions, the NPP needs to know whether an affiliated 
Transmission Provider may disclose to an NPP specific information about 
transmission system conditions on a real-time basis, including: (i) A 
technical description of the grid disturbance, along with its specific 
location on the system; (ii) the grid elements, whether lines, 
substations, or other elements, that may be affected by the 
disturbance, and their specific locations on the system; (iii) the 
projected duration of the disturbance; and (iv) steps being taken by 
the Transmission Provider to resolve the disturbance.

II. Commission Decision

    9. In the Interpretive Order the Commission recognized that, in 
addition to permitting communications necessary to operate and maintain 
the transmission system, the Transmission Provider and its 
interconnected NPP must engage in certain limited communications to 
operate and maintain the interconnection and the safety and reliability 
of the NPP.\7\ Consequently, the Commission clarified that permitted 
communications may include, inter alia, information on grid 
disturbances and the duration of power unavailability in order for the 
NPP to plan for off-site power in the event of a grid-related loss of 
power or station blackout, as required by the NRC.\8\
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    \7\ Id. at P 7.
    \8\ Id.
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    10. The Commission did not intend to restrict to generalized 
information the types of communications that comprise ``information on 
grid disturbances and the duration of power unavailability'' as used in 
the Interpretive Order. Rather, the Commission intends that, subject to 
the no conduit rule, Transmission

[[Page 30058]]

Providers and their affiliated NPPs may communicate as necessary to 
preserve the safety and reliability of the grid, the interconnection, 
and the NPP. The Commission agrees with Exelon that it may be necessary 
for the Transmission Provider and the NPP to discuss specific technical 
information.
    11. Accordingly, the Commission specifically clarifies that 
``information on grid disturbances and the duration of power 
unavailability'' as used in the Interpretive Order encompasses specific 
information about transmission system conditions on a real-time basis, 
including: (i) A technical description of the grid disturbance, along 
with its specific location on the system; (ii) the grid elements, 
whether lines, substations, or other elements, that may be affected by 
the disturbance, and their specific locations on the system; (iii) the 
projected duration of the disturbance; and (iv) steps being taken by 
the Transmission Provider to resolve the disturbance.

III. Document Availability

    12. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 

in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, 
Washington, DC 20426.
    13. From the Commission's Home Page on the Internet, this 
information is available in the Commission's document management 
system, eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    14. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours. For assistance, please contact 
FERC Online Support at 1-866-208-3676 (toll free) or (202) 502-8222 (e-
mail at FERCOnlineSupport@FERC.gov), or the Public Reference Room at 
(202) 502-8371, TTY (202) 502-8659 (e-mail at 
public.referenceroom@ferc.gov).


    By the Commission.
Magalie R. Salas,
Secretary.
[FR Doc. 06-4841 Filed 5-24-06; 8:45 am]

BILLING CODE 6717-01-P
