
[Federal Register Volume 80, Number 62 (Wednesday, April 1, 2015)]
[Rules and Regulations]
[Pages 17653-17682]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06953]



[[Page 17653]]

Vol. 80

Wednesday,

No. 62

April 1, 2015

Part IV





Department of Energy





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 Federal Energy Regulatory Commission





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18 CFR Part 35





 Open Access and Priority Rights on Interconnection Customer's 
Interconnection Facilities; Final Rule

  Federal Register / Vol. 80 , No. 62 / Wednesday, April 1, 2015 / 
Rules and Regulations  

[[Page 17654]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[RM14-11-000; Order No. 807]


Open Access and Priority Rights on Interconnection Customer's 
Interconnection Facilities

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: In this Final Rule, the Federal Energy Regulatory Commission 
is amending its regulations to waive the Open Access Transmission 
Tariff requirements, the Open Access Same-Time Information System 
requirements, and the Standards of Conduct requirements, under certain 
conditions, for the ownership, control, or operation of Interconnection 
Customer's Interconnection Facilities (ICIF). This Final Rule finds 
that those seeking interconnection and transmission service over ICIF 
that are subject to the blanket waiver adopted herein may follow 
procedures applicable to requests for interconnection and transmission 
service under sections 210, 211, and 212 of the FPA, which also allows 
the contractual flexibility for entities to reach mutually agreeable 
access solutions. This Final Rule establishes a modified rebuttable 
presumption for a five-year safe harbor period to reduce risks to ICIF 
owners eligible for the blanket waiver during the critical early years 
of their projects. Finally, this Final Rule modifies, as described in 
detail below, several elements of the Notice of Proposed Rulemaking, 
including the entities eligible for the OATT waiver, the date on which 
the safe harbor begins, the rebuttable presumption that the ICIF owner 
should not be required to expand its facilities during the safe harbor, 
and the facilities covered by the Final Rule.

DATES: This rule will become effective June 30, 2015.

FOR FURTHER INFORMATION CONTACT:
Becky Robinson (Technical Information), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8868, Becky.Robinson@ferc.gov.
Brian Gish (Legal Information), Office of the General Counsel--Energy 
Markets, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8998, Brian.Gish@ferc.gov.

SUPPLEMENTARY INFORMATION:

                              Order No. 807
                               Final Rule
 
                                                        Paragraph Nos.
 
I. Introduction....................................                    1
II. Background.....................................                    6
    A. Development of ICIF Policies................                    6
III. Need for Reform...............................                   18
    A. Commission Proposal.........................                   18
    B. Comments....................................                   19
    C. Commission Determination....................                   33
IV. Proposed Reforms...............................                   41
    A. Eligible ICIF...............................                   41
        1. Commission Proposal.....................                   41
        2. Comments................................                   42
        3. Commission Determination................                   43
    B. Grant Blanket Waivers to Eligible ICIF                         44
     Owners........................................
        1. Blanket Waivers.........................                   44
        2. Requirement That ICIF Owners Must Sell                     59
         Electricity To Qualify for the Waiver.....
        3. Status of the Third-Party Requester.....                   76
        4. Non-Public Utilities....................                   79
        5. Applicability to Industrial Power                          83
         Systems' Tie Lines........................
        6. Applicability of the Blanket Waiver to                     85
         Additional Regulations....................
        7. Existing Agreements and Waivers.........                   88
        8. Existing OATTs..........................                   90
        9. Revoking the Blanket Waiver.............                   94
    C. Interconnection and Transmission Under                        104
     Sections 210 and 211 of the Federal Power Act.
        1. Sections 210 and 211....................                  104
        2. Voluntary Arrangements..................                  115
        3. Interaction With the Transmission System                  119
        4. Scope of Regulations To Be Modified.....                  128
        5. Reliability Standards...................                  131
    D. Safe Harbor.................................                  133
        1. Whether and To What Extent There Should                   133
         Be a Safe Harbor Period...................
        2. Starting Point for the Safe Harbor                        141
         Period....................................
        3. Length of the Safe Harbor Period........                  147
    E. Affiliate Concerns..........................                  153
        1. Commission Proposal.....................                  153
        2. Comments................................                  154
        3. Commission Determination................                  165
    F. Miscellaneous...............................                  170
        1. Treatment of Line Losses on ICIF........                  170
        2. Applicability of the Commission's                         172
         ``Prior Notice'' Policy...................
        3. Technical Aspects of Interconnection....                  174
        4. Implementation..........................                  176
V. Information Collection Statement................                  177
VI.8 Regulatory Flexibility Act Analysis...........                  184
VII. Document Availability.........................                  185
VIII. Effective Date and Congressional Notification                  188
Regulatory Text
Appendix A: List of Short Names of Commenters on
 the Notice of Proposed Rulemaking
 


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I. Introduction

    1. In this Final Rule, the Federal Energy Regulatory Commission 
(FERC or Commission) is amending its regulations to waive the Open 
Access Transmission Tariff (OATT) requirements of 18 CFR 35.28, the 
Open Access Same-Time Information System (OASIS) requirements of 18 CFR 
37, and the Standards of Conduct requirements 18 CFR 358, under certain 
conditions, for the ownership, control, or operation of Interconnection 
Customer's Interconnection Facilities (ICIF).\1\ This Final Rule finds 
that those seeking interconnection and transmission service over ICIF 
that are subject to the blanket waiver adopted herein may follow 
procedures applicable to requests for interconnection and transmission 
service under sections 210, 211, and 212 of the Federal Power Act 
(FPA), which also allows the contractual flexibility for entities to 
reach mutually agreeable access solutions.\2\ This Final Rule 
establishes a modified rebuttable presumption for a five-year safe 
harbor period to reduce risks to ICIF owners \3\ eligible for the 
blanket waiver during the critical early years of their projects. 
Finally, this Final Rule modifies, as described in detail below, 
several elements of the Notice of Proposed Rulemaking (NOPR), including 
the entities eligible for the OATT waiver, the date on which the safe 
harbor begins, the rebuttable presumption that the ICIF owner should 
not be required to expand its facilities during the safe harbor, and 
the facilities covered by the Final Rule.\4\
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    \1\ The jurisdictional interconnection facilities for which this 
Final Rule grants a waiver have sometimes in the past been referred 
to informally as ``generator tie lines,'' but, in the Notice of 
Proposed Rulemaking, the Commission used the term ICIF as defined in 
the pro forma documents issued with Order No. 2003. As discussed 
below, infra section IV.A Eligible ICIF, we continue to use the term 
``ICIF'' throughout this Final Rule but clarify there that we intend 
the term to encompass a broader scope. Standardization of Generator 
Interconnection Agreements and Procedures, Order No. 2003, 68 FR 
49845 (Aug. 19, 2003), FERC Stats. & Regs. ]31,146, at Appendix C, 
Appendix 6, Article 1 (2003), order on reh'g, Order No. 2003-A, 69 
FR 15932 (Mar. 26, 2004), FERC Stats. & Regs. ] 31,160, order on 
reh'g, Order No. 2003-B, 70 FR 265 (Jan. 4, 2005), FERC Stats. & 
Regs. ] 31,171 (2004), order on reh'g, Order No. 2003-C, 70 FR 37661 
(Jun. 30, 2005), FERC Stats. & Regs. ] 31,190 (2005), aff'd sub nom. 
Nat'l Ass'n of Regulatory Util. Comm'rs v. FERC, 475 F.3d 1277 (D.C. 
Cir. 2007), cert denied, 552 U.S. 1230 (2008).
    \2\ 16 U.S.C. 824i, 824j, and 824k.
    \3\ In this Final Rule, the term ``ICIF owners'' includes those 
who operate or control ICIF.
    \4\ Open Access and Priority Rights on Interconnection 
Customer's Interconnection Facilities, Notice of Proposed 
Rulemaking, 79 FR 31061 (May 30, 2014), FERC Stats. & Regs. ] 32,701 
(2014), corrected, 79 FR 35501 (June 23, 2014).
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    2. We find that requiring the filing of an OATT is not necessary to 
prevent unjust or unreasonable rates or unduly discriminatory behavior 
with respect to ICIF, over which interconnection and transmission 
services can be ordered pursuant to sections 210, 211, and 212 of the 
FPA.\5\ Further, we conclude that the Commission's policies requiring 
the ICIF owner to make excess capacity available to third parties 
unless it can justify its planned use of the line impose risks and 
burdens on ICIF owners and create regulatory inefficiencies that are 
not necessary given the goals that the Commission seeks to achieve 
through such policies. Based on comments received as part of our 
consideration of the treatment of ICIF, we understand that generation 
developers may develop new projects in phases and build interconnection 
facilities large enough to accommodate the development of all planned 
phases. The Commission's existing policy has led ICIF owners to file 
petitions for declaratory orders demonstrating plans and milestones for 
future generation development to reserve for themselves currently 
excess ICIF capacity that they built for such purposes. In the vast 
majority of cases, the Commission has granted the petition, based on 
confidential documentation filed by the ICIF owner, with a limited 
description of the plans and milestones the Commission deemed 
dispositive. Further, the Commission's existing policy of treating ICIF 
the same as other transmission facilities for OATT purposes, including 
the requirement to file an OATT following a third-party request, 
creates undue burden for ICIF owners without a corresponding 
enhancement of access given the ICIF owner's typical ability to 
establish priority rights.
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    \5\ As discussed infra, the blanket waiver will apply only to 
entities that are either directly subject to section 210 or have 
voluntarily committed to comply with section 210.
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    3. Granting an OATT waiver to ICIF owners and providing that third-
party access be governed by sections 210, 211, and 212 will enable ICIF 
owners and third parties, where possible, to reach mutually agreeable 
and voluntary arrangements that provide ICIF access to third parties, 
while protecting a third party's right to request that the Commission 
order interconnection and transmission service over ICIF. We find that 
providing this contractual flexibility may remove barriers to an ICIF 
owner's willingness to enter into such an agreement with a third party.
    4. We recognize that ICIF owners often construct ICIF to 
accommodate multiple generation project phases and intend for their 
subsequent generation projects to use what is initially excess capacity 
on the ICIF. We believe that the safe harbor period established by this 
Final Rule will enable these ICIF owners to focus in the early stages 
of development on building generation.
    5. We find that the reforms adopted herein re-balance the burden on 
ICIF owners and encourage efficient generation and interconnection 
facility development, while maintaining access to available capacity 
for third parties where appropriate.

II. Background

A. Development of ICIF Policies

    6. Under section 201(b) of the FPA, the Commission has jurisdiction 
over all facilities used for the transmission of electric energy in 
interstate commerce.\6\ Under section 201(e) of the FPA, any person who 
owns or operates facilities subject to the jurisdiction of the 
Commission is a public utility.\7\ The Commission is charged with the 
responsibility under sections 205 and 206 of the FPA to ensure that a 
public utility's rates, charges, and classifications of service are 
just and reasonable and not unduly discriminatory or preferential.\8\
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    \6\ 16 U.S.C. 824(b).
    \7\ 16 U.S.C. 824(e). Section 201(f) of the FPA exempts certain 
governmental entities and electric cooperatives from being a public 
utility.
    \8\ 16 U.S.C. 824d and 824e.
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    7. In Order No. 888, the Commission, relying upon its authority 
under sections 205 and 206 of the FPA, established non-discriminatory 
open access to electric transmission service as the foundation 
necessary to develop competitive bulk power markets in the United 
States.\9\ Order No. 888, codified in section 35.28 of the Commission's 
regulations, requires that any public utility that owns, controls, or 
operates facilities used for the transmission of electric energy in 
interstate commerce must file an OATT and comply with other related 
requirements. The Commission in Order No. 888 did not specifically 
address transmission facilities associated with the

[[Page 17656]]

interconnection of electric generating units to the transmission grid.
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    \9\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ] 
31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12274 (Mar. 
14, 1997), FERC Stats. & Regs. ] 31,048, order on reh'g, Order No. 
888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C, 82 
FERC ] 61,046 (1998), aff'd in relevant part sub nom. Transmission 
Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), 
aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
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    8. At the same time, the Commission issued Order No. 889,\10\ which 
promulgated the Open Access Same-Time Information System (OASIS) and 
Standards of Conduct requirements in Part 37 of the Commission's 
regulations to ensure the contemporaneous disclosure of certain 
information and prevent transmission providers from engaging in non-
discriminatory behavior in favor of their marketing affiliates.\11\
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    \10\ Open Access Same-Time Information System and Standards of 
Conduct, Order No. 889, 61 FR 21737 (May 10, 1996), FERC Stats. & 
Regs. ] 31,035 (1996), order on reh'g, Order No. 889-A, FERC Stats. 
& Regs. ] 31,049 (1997), reh'g denied, Order No. 889-B, 81 FERC ] 
61,253 (1997).
    \11\ Although originally promulgated by Order No. 889, the 
Commission has since relocated the Standards of Conduct to Part 358 
and adopted a number of changes, most recently revised by Order No. 
717. Standards of Conduct for Transmission Providers, Order No. 717, 
FERC Stats. & Regs. ] 31,280 (2008).
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    9. In Order No. 2003, the Commission found that interconnection 
service plays a crucial role in bringing generation into the market to 
meet the growing needs of electricity customers and competitive 
electricity markets.\12\ The Commission reiterated that 
``[i]nterconnection is a critical component of open access transmission 
service,'' and that ``the Commission may order generic interconnection 
terms and procedures pursuant to its authority to remedy undue 
discrimination and preferences under sections 205 and 206 of the 
Federal Power Act.'' \13\ The Commission concluded that there was a 
pressing need for a uniformly applicable set of procedures and a pro 
forma agreement to form the basis of interconnection service for large 
generators, and thus promulgated the pro forma Large Generator 
Interconnection Procedures (LGIP) and the pro forma Large Generator 
Interconnection Agreement (LGIA) \14\ to be included in every public 
utility's OATT.\15\
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    \12\ Order No. 2003, FERC Stats. & Regs. ] 31,146 at P 11.
    \13\ Id. PP 12, 20.
    \14\ As discussed above, throughout this Final Rule, the terms 
LGIP and LGIA refer to the pro forma versions of those documents.
    \15\ Order No. 2003 established rules for a Large Generating 
Facility, defined as a generating facility with a capacity of more 
than 20 MW. Similarly, in Order No. 2006, the Commission established 
the pro forma Small Generator Interconnection Procedures and the pro 
forma Small Generator Interconnection Agreement for interconnecting 
small generators (no larger than 20 MW). Standardization of Small 
Generator Interconnection Agreements and Procedures, Order No. 2006, 
FERC Stats. & Regs. ] 31,180, order on reh'g, Order No. 2006-A, FERC 
Stats. & Regs. ] 31,196 (2005), order granting clarification, Order 
No. 2006-B, FERC Stats. & Regs. ] 31,221 (2006).
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    10. Article 11.1 of the LGIA provides that the ``Interconnection 
Customer shall design, procure, construct, install, own and/or control 
Interconnection Customer Interconnection Facilities . . . at its sole 
expense.'' The LGIA defines ICIF as ``all facilities and equipment, as 
identified in Appendix A of the Standard Large Generator 
Interconnection Agreement, that are located between the Generating 
Facility and the Point of Change of Ownership, including any 
modification, addition, or upgrades to such facilities and equipment 
necessary to physically and electrically interconnect the Generating 
Facility to the Transmission Provider's Transmission System. 
Interconnection Customer's Interconnection Facilities are sole use 
facilities.'' \16\ The LGIA defines ``Interconnection Facilities'' \17\ 
as the:
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    \16\ LGIA Article 1. Section 1 of the LGIP includes identical 
definitions to those in Article 1 of the LGIA.
    \17\ Unless otherwise indicated, capitalized terms herein have 
the same definition as in the Commission's LGIA or in the OATT, as 
applicable.

Transmission Provider's Interconnection Facilities and the 
Interconnection Customer's Interconnection Facilities. Collectively, 
Interconnection Facilities include all facilities and equipment 
between the Generating Facility and the Point of Interconnection, 
including any modification, additions or upgrades that are necessary 
to physically and electrically interconnect the Generating Facility 
to the Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities and shall not include 
Distribution Upgrades, Stand Alone Network Upgrades or Network 
Upgrades.\18\
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    \18\ LGIA Article 1. See supra n.1.

Finally, the LGIA defines Transmission Provider's Interconnection 
Facilities as ``those Interconnection Facilities that are located 
between the Point of Interconnection \19\ with the grid and the Point 
of Change of Ownership,\20\ and which are owned, controlled, or 
operated by the transmission provider.'' \21\
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    \19\ The Point of Interconnection is defined in Article 1 of the 
LGIA as the point where the Interconnection Facilities connect to 
the Transmission Provider's Transmission System.
    \20\ The Point of Change of Ownership is defined in Article 1 of 
the LGIA as the point, as set forth in Appendix A to the LGIA, where 
the Interconnection Customer's Interconnection Facilities connect to 
the Transmission Provider's Interconnection Facilities. LGIP section 
11.2 states that the Transmission Provider and Interconnection 
Customer shall negotiate the provisions of the appendices to the 
LGIA.
    \21\ LGIA Article 1.
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    11. In general, Interconnection Facilities are constructed to 
enable a generation facility or multiple generation facilities to 
transmit power to the integrated transmission grid. Interconnection 
Facilities are typically radial in nature, with a single point of 
interconnection with the network grid, and over which power flows in 
one direction toward the transmission grid.\22\ Depending on the 
circumstances, Interconnection Facilities may range in length, but can 
span considerable distances and represent significant transmission 
capacity.\23\
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    \22\ In limited circumstances, power may flow from the grid to 
supply station power in the event no power is being produced at the 
generating facility.
    \23\ See, e.g., Bayonne Energy Center, LLC, 136 FERC ] 61,019 
(2011) (involving a 6.75-mile, 345-kV interconnection facility); 
Terra-Gen Dixie Valley, LLC, 132 FERC ] 61,215 (2010) (Terra-Gen I), 
reh'g denied, 134 FERC ] 61,021 (2011), order on request for 
priority rights, 137 FERC ] 61,179 (2011), order on reh'g, 147 FERC 
] 61,122 (2014) (involving a 214-mile, 230-kV interconnection 
facility). See also, e.g., Southern Company Serv., Inc., Docket No. 
ER12-554-000 (Jan. 6, 2012) (delegated letter order) (involving an 
approximately 2000 foot interconnection facility).
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    12. In a series of cases since Order No. 2003 became effective, 
issues have been raised regarding the extent to which, if at all, third 
parties should be able to have access rights for transmission on the 
facilities located between the generating facility and the Point of 
Change of Ownership at which the Transmission Provider's 
Interconnection Facilities begin, i.e., ICIF. Applications have come 
before the Commission as petitions for declaratory order and requests 
for service under sections 210 and 211. In each of these, the 
Commission has put the onus on the developer, if it would like to 
preempt a third party's use, to demonstrate that it has plans to use 
the currently excess capacity.
    13. In Milford Wind Corridor, LLC, the Commission recognized that 
it has granted waivers of the OATT requirements on a case-by-case basis 
for ICIF owners who demonstrate that their ICIF are limited and 
discrete and there is no outstanding request by a third party to access 
the ICIF.\24\
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    \24\ Milford Wind Corridor, LLC, 129 FERC ] 61,149, at P 24 
(2009) (Milford).
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    14. At issue in these cases was whether the entity that owns and/or 
controls ICIF to serve its or its affiliates' generation project or 
projects has any priority right over third-party requesters to use the 
capacity on its ICIF. Where an ICIF owner has specific, pre-existing 
generator expansion plans with milestones for construction of 
generation facilities and can demonstrate that it has made material 
progress toward meeting those milestones, the Commission granted 
priority rights for excess capacity on the ICIF for those future 
generation

[[Page 17657]]

projects.\25\ For example in Aero Energy, LLC,\26\ before ordering 
service over the Sagebrush line pursuant to FPA sections 210 and 211, 
the Commission provided the opportunity for the ICIF owner to 
demonstrate that it had pre-existing contractual obligations or other 
specific plans that would prevent it from providing the requested firm 
transmission service to the third party.\27\ As a result, the 
Commission found that one of the Sagebrush partners had shown that it 
had pre-existing expansion plans that, at some future date, would 
require firm transmission capacity, and that two other Sagebrush 
partners had not shown that they had pre-existing expansion plans that 
would require additional transmission capacity.
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    \25\ Alta Wind I, LLC, 134 FERC ] 61,109, at PP 16-17 (2011); 
Milford, 129 FERC ] 61,149 at P 22; Aero Energy LLC, 116 FERC ] 
61,149, at P 28 (2006) Aero Modification Order. Such plans and 
initial progress also must pre-date a valid request for service. 
Terra-Gen I, 132 FERC ] 61,215 at P 53.
    \26\ Aero Energy LLC, 115 FERC ] 61,128 (2006) (Aero Proposed 
Order), order granting modification, 116 FERC ] 61,149 (2006) (Aero 
Modification Order), final order, 118 FERC ] 61,204 (2007), reh'g 
denied, 120 FERC ] 61,188 (2007) (Aero Rehearing Order) 
(collectively, Aero).
    \27\ Aero Modification Order, 116 FERC ] 61,149 at P 28.
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    15. The Commission has also considered, on a case-by-case basis, 
petitions for declaratory order requesting that an ICIF owner be 
granted priority over third parties to use capacity on its ICIF.\28\ In 
Milford, the Commission granted such priority, finding that Milford had 
shown that it had specific plans for phased development of its 
generation. The Commission in Milford summarized the Aero precedent as 
providing that:
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    \28\ See, e.g., Milford, 129 FERC ] 61,149 at P 24; Terra-Gen I, 
132 FERC ] 61,215 at P 49.

    A transmission owner that filed specific expansion plans with 
definite dates and milestones for construction, and had made 
material progress toward meeting its milestones, had priority over 
later transmission requests.\29\
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    \29\ Milford, 129 FERC ] 61,149 at P 22.

This required demonstration necessary to claim priority rights has been 
referred to as the ``specific plans and milestones'' showing. This 
granting of priority rights preserves the ability of the generation 
developer to deliver its future output to the point of interconnection 
with the integrated transmission grid, so long as it can make the 
relevant showing to the Commission sufficient to justify priority.\30\ 
The Commission has also found that an affiliate of the ICIF owner that 
is developing its own generator projects also may obtain priority 
rights to the capacity on the ICIF by meeting the ``specific plans and 
milestones'' standard with respect to future use.\31\
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    \30\ The Aero precedent cited above is the only instance where 
the Commission has not granted priority rights upon an attempted 
plans and milestones demonstration.
    \31\ See NextEra Energy Resources, LLC, 142 FERC ] 61,043, at P 
26 (2013).
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    16. Notwithstanding the ability of an ICIF owner to request 
priority rights, where an ICIF owner has received a third-party request 
for service, the Commission has required that the ICIF owner file an 
OATT.\32\
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    \32\ Subsequent to ordering transmission under FPA sections 210 
and 211 in Aero, the Commission granted market-based rates to 
several Sagebrush affiliates on the condition that Sagebrush file an 
OATT for its line if any third party filed a request for service on 
the line. EDFD Handsome-Lake, 127 FERC ] 61,243, at P 15 (2009). 
Such a request was made, and Sagebrush filed an OATT for its 
interconnection facility. Sagebrush, a California Partnership, 130 
FERC ] 61,093, order on reh'g, 132 FERC ] 61,234 (2010). In Peetz 
Logan, the generation owner filed an OATT in response to a request 
for third-party interconnection and transmission services over its 
existing 78.2-mile, 230-kV ICIF that had been used to connect three 
affiliated wind generation projects to the grid. Peetz Logan 
Interconnect, LLC, 136 FERC ] 61,075 (2011) (Peetz Logan). In Sky 
River, the Commission rejected the filing of an executed Common 
Facilities Agreement providing a third party the right to access and 
utilize Sky River, LLC's interest in a nine-mile 230-kV ``generator 
tie-line.'' Instead, the Commission required that any service by 
non-owners over the line must be made pursuant to an OATT. Sky 
River, LLC, 134 FERC ] 61,064 (2011) (Sky River). Also, in Terra-
Gen, the generator owner of a 214-mile, 230-kV radial 
interconnection facility was ordered by the Commission to file an 
OATT in response to a request for third-party transmission service. 
Terra-Gen Dixie Valley, LLC, 134 FERC ] 61,027 (2011), order on 
reh'g, 135 FERC ] 61,134 (2011), order granting extension of time, 
136 FERC ] 61,026 (2011), order on reh'g, 147 FERC ] 61,122 (2014).
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    17. In summary, the Commission's existing policy since 2009 is 
that, because ICIF are facilities used for the transmission of electric 
energy in interstate commerce, those who own, control, or operate ICIF 
must either have an OATT on file or receive a waiver of the OATT 
requirement.\33\ Section 35.28(d) provides that any public utility 
subject to OATT, OASIS, and Standards of Conduct requirements may file 
a request for a waiver for good cause shown.\34\ The Commission grants 
such requests for waiver where the public utility owns only limited and 
discrete facilities or is a small utility.\35\ Even if a waiver of the 
OATT is granted for ICIF, the ICIF owner is subject to the requirement 
that, if a request for transmission service over the facilities is 
made, it would have to file an OATT within 60 days of the request \36\ 
and comply with any additional requirements then in effect for public 
utility transmission providers. The ICIF owner would thus become 
subject to all of the relevant pro forma OATT requirements, unless it 
successfully seeks and receives approval for deviations from the pro 
forma OATT.
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    \33\ See Milford, 129 FERC ] 61,149 at P 24 (noting that the 
fact that the facilities merely tie a generator to the grid does not 
render a line exempt from the Commission's regulation of 
transmission facilities). See also Evergreen Wind Power III, LLC, 
135 FERC ] 61,030, at P 15 n.18 (2011) (granting request for waiver 
of the OATT requirement in the context of a request for market-based 
rate authority).
    \34\ The Commission has the general statutory authority to waive 
its regulations as it may find necessary or appropriate. UtiliCorp 
United Inc., 99 FERC ] 61,280, at P 12 (2002); see also Pacific Gas 
and Electric Co., 99 FERC ] 61,045, at P 5 (2002) (``It is however 
well established that, with or without an explicit provision to that 
effect, an agency may waive its regulations in appropriate 
cases.''). Similarly, section 358.1(d) of the Commission's 
regulations provides that a transmission provider may seek a waiver 
from all or some of the requirements of Part 358.
    \35\ See, e.g., Prairie Breeze Wind Energy LLC, 145 FERC ] 
61,290, at P 26 (2013); Ebensburg Power Company, 145 FERC ] 61,265, 
at P 27 (2013); CSOLAR IV South, LLC, 143 FERC ] 61,275, at P 16 
(2013).
    \36\ Milford, 129 FERC ] 61,149 at P 27. See Termoelectrica 
U.S., LLC, 105 FERC ] 61,087, at P 11 (2003); Black Creek Hydro, 
Inc., 77 FERC ] 61,232, at 61,941 (1996).
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III. Need for Reform

A. Commission Proposal

    18. The Commission issued a NOPR in this proceeding on May 15, 
2014. In the NOPR, the Commission proposed to grant a blanket waiver 
for ICIF of all OATT, OASIS, and Standards of Conduct requirements in 
circumstances where a public utility is subject to such requirements 
solely because it owns, controls, or operates ICIF and sells electric 
energy from its generating facility. The Commission also proposed a 
safe harbor period of five years during which there would be a 
rebuttable presumption that: (1) The eligible ICIF owner has definitive 
plans to use its capacity without having to make a demonstration 
through a specific plans and milestones showing; and (2) the eligible 
ICIF owner should not be required to expand its facilities.\37\ The 
Commission found, on a preliminary basis, that there was a need for 
reform because OATT requirements as applied to ICIF may impose risks 
and burdens on generators and create regulatory inefficiencies that are 
not necessary to achieve the Commission's open access goals. The 
Commission also preliminarily found that there was a need to reform its 
requirements for achieving non-discriminatory access over ICIF so as 
not to discourage competitive generation development with unnecessary 
burdens, while ensuring non-discriminatory access by eligible 
transmission customers.
---------------------------------------------------------------------------

    \37\ NOPR, FERC Stats. & Regs. ] 32,701 at P 54.

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[[Page 17658]]

B. Comments

    19. The Commission received 24 comments and one reply comment on 
the NOPR.\38\ Of those, 21 commenters \39\ generally support the need 
for reform and the NOPR proposals. Commenters state that the 
Commission's existing policy is unduly burdensome and unnecessary \40\ 
and that it does not meet the goal of promoting development of 
generation facilities while ensuring not unduly discriminatory open 
access to transmission facilities.\41\ Commenters argue that ICIF 
owners are focused on developing new generation resources and the time, 
effort and cost of complying with the OATT requirements under the 
Commission's existing policy hinders generation development.\42\ 
Commenters support the Commission's goal of reducing regulatory burdens 
and promoting development of generation facilities while ensuring open 
access to transmission facilities and support the Commission's proposal 
to revise its current ICIF policies.\43\
---------------------------------------------------------------------------

    \38\ See Appendix A for a list of NOPR commenters.
    \39\ These include AWEA, BHE, BP Wind, Linden, DTE, E.ON, EEI, 
ELCON, EPSA, First Wind, Invenergy, ITC, MISO, MISO TOs, NextEra, 
NRG, Recurrent, SEIA, Sempra, Southern, and Terra-Gen. SWP also 
commented on the NOPR, but did not express support or opposition to 
the proposed changes overall.
    \40\ AWEA at 1; E.ON at 2; and NextEra at 3.
    \41\ EEI at 2.
    \42\ AWEA at 2; Linden at 3; and E.ON at 2.
    \43\ BHE at 1; EEI at 2; and ELCON at 2.
---------------------------------------------------------------------------

    20. Terra-Gen states that the NOPR proposals are essential to 
minimize the business and regulatory risks faced by generation owners 
and developers.\44\ Further, Terra-Gen argues that the Commission's 
existing ICIF policy allows third parties to impose substantial and 
potentially unrecoverable regulatory compliance and other costs on 
generation owners by requesting access to ICIF without making a showing 
that the third party is ``ready, willing, and able to pay the 
reasonable costs of transmission services plus a reasonable rate of 
return on such costs.'' \45\
---------------------------------------------------------------------------

    \44\ Terra-Gen at 1.
    \45\ Terra-Gen at 1 (citing New York State Electric & Gas Corp. 
v. FERC, 638 F.2d 388, 402 (2d. Cir. 1980), cert. denied, 454 U.S. 
821 (1981)).
---------------------------------------------------------------------------

    21. Linden states that ICIF owners generally plan to use the excess 
capacity on their ICIF for their own purposes and that the Commission's 
existing policy imposes a risk of losing that capacity if another party 
makes a request for service.\46\ ELCON argues that an ICIF owner should 
retain the rights over its ICIF for its own future projected use.\47\
---------------------------------------------------------------------------

    \46\ Linden at 4.
    \47\ ELCON at 2.
---------------------------------------------------------------------------

    22. MISO supports revising the Commission's ICIF policy because it 
argues that the existing policy: (1) Creates disincentives to develop 
more efficient, high-voltage ICIF by expanding the costs and 
responsibilities of generation owners; (2) imposes transmission owner 
requirements on entities that are not in the business of providing 
transmission service to third parties; and (3) creates concerns over 
the interaction of ICIF with the transmission system, and the reliable 
interconnection of projects to the transmission system.\48\
---------------------------------------------------------------------------

    \48\ MISO at 4-5.
---------------------------------------------------------------------------

    23. Commenters argue that ICIF are unique and the Commission's open 
access requirements and pro forma OATT were not designed for and are 
not appropriate for these facilities.\49\ MISO asserts that use of an 
OATT by an ICIF owner raises complicated issues regarding seams 
agreements between the transmission provider and the ICIF owner and 
issues related to Order No. 1000-compliance regional transmission 
planning and cost allocation.\50\ MISO also notes that using OATTs for 
access to ICIF could create different interconnection processes for 
different ICIF within the MISO footprint, thus complicating the 
interconnection process.\51\
---------------------------------------------------------------------------

    \49\ BP Wind at 4; Linden at 3; ELCON at 2; and E.ON at 2.
    \50\ MISO at 5.
    \51\ MISO at 5.
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    24. On the other hand, APPA, TAPS, and NCPA state that they support 
the Commission's goal of promoting generation development, but assert 
that the NOPR proposals would erode the Commission's open access 
transmission policies.\52\ APPA and TAPS argue that the Commission 
should instead address the concerns identified in the NOPR in a manner 
that preserves the open access underpinnings of competitive markets and 
its reliance on market-based rates to ensure just and reasonable 
wholesale sales, and meets its statutory obligation to eliminate undue 
discrimination in transmission service. APPA and TAPS contend that the 
NOPR, as proposed, fundamentally erodes open access by making it 
effectively impossible for subsequent competitive generation developers 
to interconnect with the ICIF owner's facilities for long periods of 
time, if ever.\53\ NCPA states that while it supports the Commission's 
desire to promote generation development, it shares the concerns 
expressed by APPA and TAPS that the NOPR imperils the open access 
underpinnings for competitive markets by cutting back on the 
significant procedural reforms initiated by this Commission in Order 
Nos. 888 and 889, and supports the alternatives proposed by APPA and 
TAPS, as described below, by which the Commission could achieve the 
NOPR's objectives without unnecessarily reducing the protection from 
discrimination that those orders provided.\54\ Similarly, NRECA states 
that it appreciates the Commission's concerns about imposing the entire 
open access regime on entities that only own ICIF, but contends that 
reducing this burden must not come at the expense of ensuring that 
load-serving entities have access to facilities to serve their 
loads.\55\
---------------------------------------------------------------------------

    \52\ APPA and TAPS at 2 and NCPA at 3.
    \53\ APPA and TAPS at 2.
    \54\ NCPA at 3.
    \55\ NRECA at 2.
---------------------------------------------------------------------------

    25. APPA and TAPS \56\ argue that the NOPR fails to demonstrate the 
need to change the requirement that an ICIF owner file an OATT upon 
receipt of a third-party request for service, noting that the NOPR 
itself recognizes that third-party requests to ICIF owners for service 
are ``infrequen[t]'' and ``relatively rare.'' \57\ They also contend 
that the NOPR has not demonstrated that the proposed procedures would 
cost less than existing requirements, arguing that the lengthy and 
costly procedures of sections 210 and 211 could not possibly be less 
expensive for ICIF owners on an industry-wide basis. They argue that 
the NOPR proposals will therefore be ineffective at reducing the 
regulatory costs of ICIF owners and may function as a bar to open 
access.\58\
---------------------------------------------------------------------------

    \56\ NCPA states that it supports the comments submitted by APPA 
and TAPS. NCPA at 1 and 3.
    \57\ APPA and TAPS at 20 (citing NOPR, FERC Stats. & Regs. ] 
32,701 at PP 32, 36).
    \58\ APPA and TAPS at 21.
---------------------------------------------------------------------------

    26. APPA and TAPS contend that the NOPR would invite ICIF owners to 
close off access to what could well be significant highways to areas 
ripe for renewable resource development.\59\ APPA and TAPS argue that 
the NOPR would allow an ICIF owner to hold that transmission corridor 
hostage, block efficient expansion, and deny access to competitors. 
They add that the ICIF owner is likely to be the competitor of the 
third party seeking interconnection and transmission service over the 
ICIF, giving the ICIF owner strong incentive to use its control over 
ICIF to the advantage of its own generation resources.\60\
---------------------------------------------------------------------------

    \59\ APPA and TAPS at 8 (citing NOPR, FERC Stats. & Regs. ] 
32,701 at P 9, n.16).
    \60\ APPA and TAPS at 8-9.
---------------------------------------------------------------------------

    27. APPA and TAPS also state that the Commission cannot assume that 
open access principles need not apply to ICIF

[[Page 17659]]

because competitors can build their own, arguing that such lines 
require extensive permitting, and that it is often more difficult to 
obtain siting approvals for a second line once a first line has been 
permitted.\61\ They contend that, even where it is possible to obtain 
necessary siting approvals for duplicative lines, inefficient build-out 
of the grid would make it more costly than necessary to access new 
generation resources, burdening those resources and consumers, as well 
as undermining competitive wholesale markets.
---------------------------------------------------------------------------

    \61\ APPA and TAPS at 9-10.
---------------------------------------------------------------------------

    28. APPA and TAPS contend that departure from the Commission's non-
discriminatory access requirements cannot be excused by the fact that 
usage of ICIF has been requested infrequently thus far, arguing that 
ICIF access may well become more common in the future given the 
increasing dependence on renewable resources.
    29. APPA, TAPS, and NRECA suggest alternatives to the NOPR 
proposals. APPA and TAPS state that the Commission could grant a 
blanket waiver of OATT, OASIS, and Standards of Conduct requirements, 
but require ICIF owners to submit a standardized, more limited OATT 
within 60 days of a third-party service request. APPA and TAPS argue 
that the modified OATT should not remove core elements of open access, 
including the obligation to expand and the development of rates for 
point-to-point service, but could eliminate provisions for network 
transmission service and ancillary services.\62\ They state that this 
will reduce the regulatory burden on ICIF owners and eliminate the need 
to apply for special waivers on a case-by-case basis, while preserving 
key limitations on the ICIF owner's ability to discriminate and create 
barriers to entry to competitive markets.
---------------------------------------------------------------------------

    \62\ APPA and TAPS at 21-22.
---------------------------------------------------------------------------

    30. APPA and TAPS state that the Commission could address the 
concern that the existing policy creates too low a bar for third-party 
requests to trigger the requirement for an ICIF owner to file an OATT 
by specifying clarified and heightened thresholds for a service request 
to trigger the requirement to file. They add that the Commission could 
approve fee structures that enable an ICIF owner to insist upon 
reasonable deposits before the obligation to file a notice of receipt 
of a service request and, subsequently, an OATT is triggered.\63\ They 
argue that such additional deposits would discourage speculative 
service requests that trigger a first-time OATT filing and fully 
address the specific ICIF owner regulatory burden that the NOPR 
identifies. They contend that while the extra deposit would increase 
costs for the first entity that seeks service from the ICIF owner's 
corporate family, the amount of the deposit would be much lower than 
the costs of requesting, negotiating, and litigating service under 
sections 210 and 211.\64\
---------------------------------------------------------------------------

    \63\ APPA and TAPS at 23.
    \64\ APPA and TAPS at 23-24.
---------------------------------------------------------------------------

    31. NRECA suggests that the Commission could implement a procedure 
under which a prospective customer seeking service on ICIF must submit 
a request that is fully supported by specified information, followed by 
the necessary studies and the parties cooperating to reach an agreement 
for service within a specified period of time, such as 90 days.\65\ 
NRECA adds that if the parties are not able to reach an agreement, the 
ICIF owner would file an unexecuted service proposal with the 
Commission.\66\
---------------------------------------------------------------------------

    \65\ NRECA at 5-6.
    \66\ NRECA at 6-7.
---------------------------------------------------------------------------

    32. NRECA argues that its proposed procedures would address the 
Commission's concern that the existing policy ``creates too low a bar 
for third-party requests for service'' because those seeking service 
would be required to provide adequate information to support their 
requests. NRECA also argues that its proposal would alleviate the 
concern that an ICIF owner may be required to file an OATT due to a 
service request by a requester that subsequently fails to pursue any 
further development, because a mere service request would no longer 
trigger that requirement. In addition, NRECA contends that its proposal 
would promote flexibility by requiring the parties to work together to 
attempt to reach an agreement.\67\


---------------------------------------------------------------------------

    \67\ NRECA at 7.
---------------------------------------------------------------------------

C. Commission Determination

    33. We believe this Final Rule will relieve regulatory burdens and 
unnecessary risks from generation developers to encourage the 
development of new generation and efficient interconnection facilities 
and promote competition while ensuring access to transmission on a not 
unduly discriminatory basis.
    34. Our action is supported by comments on the NOPR, the technical 
conference,\68\ and Notice of Inquiry.\69\ Specifically, we appreciate 
that filing and maintaining an OATT can be burdensome to ICIF owners 
who do not seek to provide transmission service. Adding a potential 
OATT obligation to a generation project can introduce an additional 
element of risk for the developer and its lenders that they would not 
have if the project were not subject to the potential obligation to 
file and maintain a transmission tariff. The risk stems from the policy 
to require an ICIF owner to file an OATT within 60 days of a request 
for service by a third party and must begin interconnection studies. 
The ICIF owner's obligation can be triggered with minimal effort by a 
third party requester, thus a request for service may not sufficiently 
distinguish third party requesters who have a well-supported request 
for service from those that do not. We are aware of situations where 
the ICIF owner received a request for service triggering the 
requirement that the owner file an OATT, but the requester then failed 
to pursue any further development.\70\ This is an additional risk for 
the ICIF owner.
---------------------------------------------------------------------------

    \68\ Priority Rights to New Participant-Funded Transmission, 
March 15, 2011 Technical Conference, AD11-11-000.
    \69\ Open Access and Priority Rights on Interconnection 
Facilities, Notice of Inquiry, FERC Stats. & Regs. ] 35,574 (cross-
referenced at 139 FERC ] 61,051 (2012).
    \70\ See NextEra at 5 (``Two of the three NextEra subsidiaries 
that received inquiries triggering OATT filings with respect to 
their ICIF--Sagebrush and Peetz Logan--never had customers actually 
pursue transmission or interconnection service following the initial 
inquiries'') and Terra-Gen at 2 (``Dixie Valley . . . incurred 
substantial costs in attempting to comply with the Commission's OATT 
requirements over several years, only to find that it would have no 
way to recover those costs because the customer that requested 
transmission service ultimately did not become a transmission 
customer'').
---------------------------------------------------------------------------

    35. We also agree that a number of sections of the pro forma OATT, 
such as the provisions regarding network service, ancillary services, 
and planning requirements, are arguably inapplicable to most or all 
ICIF owners. Although ICIF owners may propose deviations from the pro 
forma OATT, the Commission's existing process of handling these 
proposed deviations on a case-by-case basis can impose the risk of a 
time-consuming proceeding with an uncertain outcome.
    36. Moreover, interconnecting with ICIF often involves unique 
circumstances that would benefit from negotiations to tailor individual 
access agreements. However, the existing policy limits an ICIF owner's 
contractual flexibility and does not allow parties to use common 
facility agreements or have service governed outside of an OATT.\71\
---------------------------------------------------------------------------

    \71\ Sky River, 134 FERC ] 61,064 at P 13.
---------------------------------------------------------------------------

    37. In addition, it is common for an ICIF owner to initially have 
excess capacity on its ICIF when it plans to bring generation into 
commercial service in stages. The Commission has

[[Page 17660]]

a process for granting priority rights to the ICIF owner for such 
excess capacity on a case-by-case basis. However, filing a petition for 
declaratory order to establish priority rights can be a significant 
burden for the ICIF owner because the Commission's existing policy of 
requiring a demonstration of ``specific plans and milestones'' can 
require substantial effort and resources on the part of the ICIF owner 
to make the necessary showings. Further, these priority rights do not 
diminish the risk and potential burden that the ICIF owner may have to 
file an OATT within 60 days of a request for service.
    38. Contrary to APPA and TAPS' argument that the proposed revisions 
will likely cost more to implement than the Commission's existing OATT 
requirements,\72\ other commenters assert that the risks described 
above fall on all ICIF owners and therefore that the Commission's 
existing policy imposes costs,\73\ despite the fact that it is unlikely 
that any third party would request OATT service on most ICIF. The 
Commission has issued numerous individual orders granting waivers of 
OATT, OASIS, and Standards of Conduct to ICIF owners, but in only four 
instances did a third-party request access on ICIF such that the filing 
of an OATT was required.\74\ Although only a small percentage of ICIF 
owners have actually had to file an OATT, all ICIF owners are subject 
to the additional risks and potential regulatory burdens discussed 
above, including possibly having to file an OATT on 60 days' notice in 
response to a request for service, and possibly losing some of the ICIF 
capacity planned for future use to a requesting third party. In 
response to commenters concerns that the process under sections 210 and 
211 is more expensive for potential transmission customers than the 
existing process, we note that the cost of any process has many 
variables. This Final Rule specifically allows for voluntary 
interconnection agreements, which may be a more efficient process than 
currently exists. Under our existing policy, while a potential 
transmission customer may trigger an ICIF owner's OATT obligation by 
making a simple request for service, the potential customer often bears 
the expense to be a party to what are sometimes controversial 
proceedings. We find that the proposed reforms will avoid the expense 
of requests that are unlikely to be successful. Accordingly, we find 
that reforming the open access transmission requirements in this narrow 
set of circumstances is appropriate.
---------------------------------------------------------------------------

    \72\ APPA and TAPS at 20.
    \73\ AWEA at 2 and E.ON at 2.
    \74\ Between January 1, 2009, and January 1, 2014, the 
Commission issued approximately 80 orders granting waiver of OATT, 
OASIS, and Standards of Conduct requirements to ICIF owners.
---------------------------------------------------------------------------

    39. We find that APPA and TAPS' concerns that the NOPR would allow 
an ICIF owner to close off access to significant highways to areas ripe 
for renewable resource development overlook practical considerations of 
infrastructure development. The approach taken in this Final Rule 
recognizes that, often, an ICIF owner anticipates that it will use its 
excess ICIF capacity, and seeks to reduce unnecessary regulatory 
burdens. The Commission precedent with respect to priority use has 
given ICIF owners the opportunity to demonstrate that they had pre-
existing contractual obligations or other specific plans that would 
prevent them from providing the requested transmission service at a 
future date.\75\ In balancing the considerations, we are persuaded that 
the process under sections 210 and 211 allows an ICIF owner to be 
reasonably assured of being able to use that extra capacity, while also 
providing a mechanism for expansion. Without such reasonable assurance, 
there is no incentive for a developer to shoulder the extra expense of 
ICIF sized larger than their initial project.
---------------------------------------------------------------------------

    \75\ See, e.g., Aero Modification Order, 116 FERC ] 61,149 at P 
28.
---------------------------------------------------------------------------

    40. Moreover, we agree with NRECA that it is important to promote 
flexibility by encouraging the ICIF owner and the third party to work 
together to attempt to reach an agreement. As discussed further below, 
this Final Rule adopts a framework that includes opportunities for the 
ICIF owner and third party to reach mutually agreeable solutions, 
either as part of a proceeding under sections 210 and 211, or in such a 
way that obviates the need to bring a proceeding under sections 210 and 
211 to the Commission.

IV. Proposed Reforms

A. Eligible ICIF

1. Commission Proposal
    41. In the NOPR, the Commission defined the facilities that were 
subject to the rule as ICIF because that term already had a specific 
definition in the pro forma LGIA and LGIP.\76\ The Commission proposed 
to apply the NOPR reforms to any public utility that is subject to 
OATT, OASIS, and Standards of Conduct requirements solely because it 
owns, controls, or operates ICIF, in whole or in part, and sells 
electric energy from its generating facility, as those terms are 
defined in the pro forma LGIP and the pro forma LGIA adopted in Order 
No. 2003. The LGIA and LGIP define ICIF as ``all facilities and 
equipment, as identified in Appendix A of the LGIA, that are located 
between the generating facility and the Point of Change of Ownership, 
including any modification, addition, or upgrades to such facilities 
and equipment necessary to physically and electrically interconnect the 
generating facility to the transmission provider's transmission 
system.'' \77\
---------------------------------------------------------------------------

    \76\ NOPR, FERC Stats. & Regs. ] 32,701 at PP 1 and 35.
    \77\ LGIA Article 1.
---------------------------------------------------------------------------

2. Comments
    42. First Wind and Invenergy recommend that the Commission not 
define the interconnection facilities subject to the waiver with 
reference to the LGIA and LGIP, but simply as those facilities located 
between the generating facility and the point of interconnection to the 
transmission provider's transmission system. This is because some 
interconnection agreements predate Order No. 2003 which first defined 
ICIF; some may be implemented under the small generator interconnection 
procedures under Order No. 2006; and some agreements were entered into 
with non-Commission jurisdictional transmission providers. They argue 
that the definition of ICIF and generating facility should be revised 
to encompass facilities that may not be installed under the 
Commission's LGIA/LGIP arrangements.\78\ Similarly, AWEA seeks 
clarification that ICIF owners who do not have interconnection 
agreements under pro forma arrangements or those that have shared 
facilities agreements (or similar understandings) also qualify for the 
blanket waiver.\79\
---------------------------------------------------------------------------

    \78\ First Wind at 11-12 and Invenergy at 4-6.
    \79\ AWEA at 7-8.
---------------------------------------------------------------------------

3. Commission Determination
    43. We expand our definition of what interconnection facilities are 
subject to the Final Rule to include ICIF as well as comparable 
jurisdictional interconnection facilities that are the subject of 
interconnection agreements other than an LGIA. For those 
interconnection customers that have entered into an LGIA, these 
facilities will be those defined as ICIF in the LGIA and LGIP. For 
those interconnection customers that have entered into interconnection 
agreements other than an LGIA, these facilities will be the comparable 
set of interconnection facilities as those described as ICIF in the 
LGIA. Therefore, the term ICIF

[[Page 17661]]

should be read in this Final Rule to encompass this broader scope. We 
use the term ``comparable'' set of interconnection facilities because 
the definition of ICIF in the LGIA is made with reference to specific 
facilities listed in an appendix to the LGIA and to terms defined 
elsewhere in the LGIA. Therefore, we cannot apply literally the 
definition of ICIF in the LGIA to describe facilities in 
interconnection agreements other than the LGIA. Generally, this 
comparable set of facilities would include all facilities and equipment 
that are located between an interconnection customer's generating 
facility and the point where such facilities connect to the 
transmission provider's interconnection facilities (called the ``point 
of change of ownership'' in the LGIA) that are necessary to physically 
and electrically interconnect the interconnection customer's generating 
facility to the transmission provider's facilities that are used to 
provide transmission service (called the ``point of interconnection'' 
in the LGIA).

B. Grant Blanket Waivers to Eligible ICIF Owners

1. Blanket Waivers
a. Commission Proposal
    44. The Commission proposed to add sub-paragraph (d)(2) to 18 CFR 
35.28 to grant a blanket waiver of all OATT, OASIS, and Standards of 
Conduct requirements to any public utility that is subject to such 
requirements solely because it owns, controls, or operates ICIF, in 
whole or in part, and sells electric energy from its generating 
facility, as those terms are defined in the LGIP and LGIA.\80\ The 
Commission proposed that the blanket waiver would apply to all eligible 
existing and future ICIF owners, and explained that the limitation to 
ICIF owners that sell electric energy was meant to ensure that the 
proposed blanket waiver would only apply in situations where sections 
210 and 211 would provide interconnection and transmission access to a 
customer that seeks service over the ICIF.\81\
---------------------------------------------------------------------------

    \80\ The Commission also proposed to make non-substantive 
revisions to what is currently 18 CFR 35.28(d) in order to update 
certain cross-references in that paragraph.
    \81\ NOPR, FERC Stats. & Regs. ] 32,701 at P 35.
---------------------------------------------------------------------------

b. Comments
    45. The majority of commenters support the Commission's proposal to 
grant a blanket waiver of all OATT, OASIS, and Standards of Conduct 
requirements to public utility ICIF owners. Commenters agree with the 
Commission's preliminary findings in the NOPR that a blanket waiver is 
justified because such facilities do not typically present the concerns 
about discriminatory conduct that the Commission's OATT, OASIS, and 
Standards of Conduct requirements were intended to address.\82\ 
Commenters agree that the Commission's existing practice of requiring 
an OATT for ICIF discourages generation development and results in a 
disincentive to be the first developer in an area to build ICIF, while 
creating a relative advantage for subsequent competing generation 
developers in that area.\83\ Additionally, they argue that the 
Commission's existing practice unreasonably causes developers of ICIF 
to incur significant costs in response to mere written third-party 
requests unaccompanied by any deposit. Commenters agree that the 
requirement to file an OATT following any third-party request creates a 
regulatory burden without a corresponding enhancement of access.\84\
---------------------------------------------------------------------------

    \82\ EEI at 3 and BHE at 6-7.
    \83\ EEI at 8-9; BHE at 6-7; and E.ON at 2.
    \84\ EEI at 8-9; BHE at 6-7; and E.ON at 2.
---------------------------------------------------------------------------

    46. Commenters state that the OATT is not a good fit for the 
services that can be provided over ICIF, and argue that such limited 
service is not comparable to the integrated network, point-to-point, 
and ancillary services provided under the pro forma OATT.\85\ E.ON 
agrees that the current OATT requirement can be seen as burdensome by 
ICIF owners who do not seek to be in the business of providing 
transmission service, can introduce an additional element of risk for 
the developer and its lenders that they would not have if the project 
were not subject to the potential obligation to file and maintain a 
transmission tariff, and limits an ICIF owner's contractual flexibility 
if it chooses to provide third-party access by mutual agreement.\86\
---------------------------------------------------------------------------

    \85\ NextEra at 4-5 and E.ON at 2.
    \86\ E.ON at 2.
---------------------------------------------------------------------------

    47. Commenters state that the Commission's existing policy of 
requiring an ICIF owner to file an OATT or seek a waiver that would be 
revoked only upon a third-party request for service creates too low a 
bar for third-party requests for service and could lead to competitive 
mischief.\87\ BHE argues that ICIF owners are focused on developing new 
generation resources and that, given the infrequency of third-party 
requests and the absence of disputes before the Commission, it is more 
reasonable and efficient to address third-party requests to access 
available ICIF capacity as they arise on an individual basis.\88\
---------------------------------------------------------------------------

    \87\ BHE at 6-7 and E.ON at 2.
    \88\ BHE at 6-7.
---------------------------------------------------------------------------

    48. Some commenters argue that adjudicating such OATT waiver 
requests and OATT tariff filings on a case-by-case basis has led to 
confusion and uncertainty in the industry with respect to compliance 
with the Commission's open access requirements as applied to ICIF.\89\ 
DTE argues that there is a filing burden associated with making a 
waiver request, as well as some uncertainty about the actions that 
would need to be taken in the unlikely event that these requests for 
waiver were not granted. DTE states that the proposed blanket waiver 
would remove any uncertainty regarding the current status of existing 
eligible ICIF owners that may have been awaiting the Commission's 
direction on this matter before making the determination of whether or 
not to seek a ``limited and discrete'' waiver from the OATT, OASIS and 
Standards of Conduct regulations.\90\ Similarly, NextEra argues that 
the implication of the description of existing policy in the NOPR is 
that a significant number of generation owners should be taking actions 
to address existing open access requirements. NextEra points out that, 
in the NOPR, the Commission notes that this lack of clarity extends to 
whether market-based rate applicants that own ICIF, or have affiliates 
that own ICIF, must file an OATT or seek a waiver from OATT 
requirements in order to show a lack of vertical market power. NextEra 
argues that the proposed waiver will provide much needed certainty for 
ICIF owners by clearly identifying those entities that are not subject 
to OATT, OASIS, or Standards of Conduct requirements.\91\
---------------------------------------------------------------------------

    \89\ NextEra at 3-4.
    \90\ DTE at 2.
    \91\ NextEra at 7.
---------------------------------------------------------------------------

    49. Southern agrees that the blanket waiver approach appears to be 
appropriate given that very few generator tie lines have the 
characteristics (e.g., long length, excess capacity) that would make 
them more feasible for interconnection by another generator than the 
transmission system.\92\
---------------------------------------------------------------------------

    \92\ Southern at 4.
---------------------------------------------------------------------------

    50. In contrast, APPA and TAPS state that creating and maintaining 
two different standards for access to transmission facilities is 
problematic in a dynamic grid, adding that ICIF that look like radial 
lines at the fringe of the system today may be a more central part of 
the network in a decade or two.\93\
---------------------------------------------------------------------------

    \93\ APPA and TAPS at 10.

---------------------------------------------------------------------------

[[Page 17662]]

    51. APPA and TAPS argue that the Commission has long required 
market-based rate sellers that own transmission to demonstrate 
mitigation of vertical market power by showing that they and their 
affiliates either have filed an OATT or received a waiver for every 
transmission facility that they own, operate, or control, and to offer 
third parties service comparable to the service the market-based rate 
sellers and their affiliates provide themselves. APPA and TAPS contend 
that the proposed blanket waiver does not clarify the manner by which 
ICIF owners can address concerns about vertical market power when they 
seek market-based rate authority, but rather that it magnifies those 
concerns by discarding an essential foundation for allowing the ICIF 
owner and its affiliates to enjoy market-based rates.\94\
---------------------------------------------------------------------------

    \94\ APPA and TAPS at 14.
---------------------------------------------------------------------------

    52. APPA and TAPS state that they would not oppose an initial grant 
of a blanket waiver of the requirement that each ICIF owner must file 
an individual request for waiver of OATT, OASIS, and Standards of 
Conduct, provided that such waivers would be revoked upon receipt of a 
third-party request for service on the ICIF.\95\
---------------------------------------------------------------------------

    \95\ APPA and TAPS at 20.
---------------------------------------------------------------------------

    53. APPA and TAPS argue that the NOPR places no limit on the 
proposed blanket waiver, extending it to periods when there is no 
reasonable expectation that the ICIF owner is still in the project 
development mode.
    54. NRECA states that it does not object to exempting certain ICIF 
owners from the mandate to file an OATT and related requirements for 
limited and discrete facilities, but that any such waiver should be 
revoked if the entity no longer meets those criteria.\96\
---------------------------------------------------------------------------

    \96\ NRECA at 4.
---------------------------------------------------------------------------

c. Commission Determination
    55. We adopt the proposed blanket waiver with modifications as 
discussed below.\97\ We believe the proposal as modified addresses the 
concerns of commenters while meeting our purpose of reducing 
unnecessary burden and providing clarity and certainty to developers. 
Such a waiver is justified because the usually limited and discrete 
nature of ICIF and ICIF's dedicated interconnection purpose means that 
such facilities do not typically present the concerns about 
discriminatory conduct that the Commission's OATT, OASIS, and Standards 
of Conduct requirements were intended to address. Because third-party 
requests to use ICIF have been relatively rare, it is more efficient to 
address such situations as they arise on an individual basis.
---------------------------------------------------------------------------

    \97\ Certain aspects of the blanket ICIF waiver adopted herein 
differ from the NOPR proposal. E.g., see infra PP 73-75 for the 
Commission determination on the public utilities eligible for the 
blanket waiver and supra P 43 for the Commission determination on 
the ICIF eligible for the blanket waiver.
---------------------------------------------------------------------------

    56. Further, the ICIF waiver would remove regulatory burdens on 
competitive generation developers without sacrificing the Commission's 
ability to require open access in appropriate circumstances. 
Specifically, we find that a blanket waiver will remedy the undue 
burden on ICIF owners under our existing policy to file an OATT or seek 
a waiver that would be revoked upon a third-party request for service 
from ICIF owners. We find that the time, effort, and cost of complying 
with the requirements of a public utility transmission provider in 
these circumstances unduly burden generation development efforts. In 
addition, we agree with commenters that the existing policy creates too 
low a bar for third-party requests for service. Specifically, an 
existing waiver of the OATT is revoked as soon as the ICIF owner 
receives a third-party request for service, even if that request meets 
few of the information and other requirements for transmission service 
under the pro forma OATT.
    57. Finally, we agree with DTE and NextEra that providing a blanket 
waiver of the OATT for ICIF owners will clarify how they meet the OATT 
filing or OATT waiver requirements involved when seeking market-based 
rate authority.\98\ APPA and TAPS argue that the blanket waiver does 
not explain how sellers would address vertical market power for 
purposes of market-based rate authority. However, this Final Rule 
simply provides an additional method for obtaining waiver of the OATT 
requirements. Therefore, to the extent that a market-based rate seller 
or any of its affiliates owns, operates, or controls transmission 
facilities, the Commission will require that, in order to satisfy the 
Commission's market-based rate vertical market power requirements in 18 
CFR 35.37(d), it either must have a Commission-approved OATT on file, 
receive waiver of the OATT requirement under 18 CFR 35.28(d)(1), or 
satisfy the requirements for blanket waiver under 18 CFR 35.28(d)(2). 
Market-based rate filings cannot be used as the vehicle by which 
applicants may obtain determinations on whether they qualify for an 
ICIF blanket waiver.
---------------------------------------------------------------------------

    \98\ To demonstrate the absence of vertical market power in a 
market power analysis, a seller or its affiliate that owns, 
operates, or controls transmission facilities must have an OATT on 
file unless waived. See 18 CFR 35.37(d).
---------------------------------------------------------------------------

    58. As discussed further below, the blanket waiver adopted herein 
only applies in situations where sections 210, 211, and 212 would 
provide interconnection and transmission access to a customer that 
seeks service over the ICIF. This ensures that we are only waiving the 
OATT requirements in circumstances where there is an alternative for 
third parties to seek not unduly discriminatory access.
2. Requirement That ICIF Owners Must Sell Electricity To Qualify for 
the Waiver
a. Commission Proposal
    59. The Commission proposed to grant the blanket waiver to any 
public utility that is subject to the Commission's OATT, OASIS, and 
Standards of Conduct requirements solely because it owns, controls, or 
operates ICIF, in whole or in part, and sells electric energy from its 
generating facility. The Commission's proposal to limit the waiver to 
ICIF owners who sell electric energy was intended to ensure that any 
public utility with an OATT blanket waiver would be subject to an 
interconnection order under section 210. This requirement was seen as 
necessary so as not to create a gap and leave a potential customer 
without a means of obtaining an interconnection with ICIF once the OATT 
interconnection procedures were waived.\99\
---------------------------------------------------------------------------

    \99\ NOPR, FERC Stats. & Regs. ] 32,701 at PP 35, 43.
---------------------------------------------------------------------------

    60. Section 210 of the FPA provides, in relevant part, ``Upon 
application of any electric utility . . . the Commission may issue an 
order requiring (A) the physical connection of . . . the transmission 
facilities of any electric utility, with the facilities of such 
applicant.'' \100\ An ``electric utility'' is defined as ``a person or 
Federal or State agency . . . that sells electric energy.'' \101\ Thus, 
the NOPR granted the waiver only to those that qualified as an electric 
utility to ensure that section 210 would be applicable. The Commission 
stated that it believes that there would be a relatively small number 
of ICIF owners who could not be subject to orders under sections 210 
and 211, and sought comments on whether this limitation on which public 
utilities can take advantage of the blanket waiver is appropriate. The 
Commission noted that ICIF owners who were not electric

[[Page 17663]]

utilities had the option to seek waiver on a case-by-case basis.\102\
---------------------------------------------------------------------------

    \100\ 16 U.S.C. 824i(a)(1)(A).
    \101\ 16 U.S.C. 796(22).
    \102\ NOPR, FERC Stats. & Regs. ] 32,701 at PP 51-52.
---------------------------------------------------------------------------

b. Comments
    61. Some commenters argue that it is common for separate ICIF-only 
companies to be created and owned by a generation company or an 
affiliate, so that an entity separate from the generation company is 
used to own, operate, and manage the ICIF.\103\ Further, these 
commenters argue that it is unnecessary to exclude from the waiver and 
safe harbor those entities that do not sell electric energy, and that 
the Commission can and should modify the proposal to make the waiver 
applicable to entities that only own the ICIF but do not sell electric 
energy. They also argue that the Commission routinely grants OATT 
waivers for such companies under the limited and discrete facilities 
factor.\104\
---------------------------------------------------------------------------

    \103\ Recurrent at 4; First Wind at 4-8; Invenergy at 7-11; BP 
Wind at 4-5; E.ON at 6; ITC at 8; NextEra at 7-9; SEIA at 4-5; 
Sempra at 3-6; and MISO TOs at 5-6.
    \104\ First Wind at 4-8 and Invenergy at 7-11.
---------------------------------------------------------------------------

    62. Recurrent, SEIA, and Sempra argue that ICIF-only companies 
often are employed when the generation project is developed in phases, 
and separate companies own the discrete portions of the generating 
facility that is the subject of a LGIA.\105\ SEIA states that 
establishing a separate entity can facilitate management of the 
jointly-owned ICIF, assist in establishing a single point of contact 
with the interconnected transmission owner and operator, and can 
facilitate the addition of other ICIF users.\106\ Sempra states that 
the ICIF-only entity structure has also been utilized because of tax 
regulations and other permitting considerations.\107\ BP Wind notes 
that sometimes a separate stand-alone entity is formed to own the ICIF 
because an RTO requests to have a single point of contact for multiple 
generators interconnecting at the same point on the grid.\108\
---------------------------------------------------------------------------

    \105\ Sempra at 3 (citing, e.g., Wolverine Creek Goshen 
Interconnection LLC, Docket Nos. ER06-267-000 (Letter Order dated 
Jan. 13 2006), Wolverine Creek Energy LLC, et al., Docket Nos. ER12-
1280-000 and ER12-1281-000 (May 9, 2012) (unpublished letter order 
accepting amended common facilities agreement for filing), and Maine 
GenLead, LLC, 146 FERC ] 61,223 (2014)).
    \106\ SEIA at 4.
    \107\ Sempra at 3 (citing, e.g., Docket No. ER03-175-000, 
``Request of Termoelectrica U.S., LLC for Rehearing, and Expedited 
Consideration and/or Stay'' at n.6 (filed Feb. 10, 2003) (TDM 
Rehearing Request), and Termoelectrica U.S., LLC, 105 FERC ] 61,087 
(2003) (order granting rehearing relating to OATT waivers), Docket 
No. EC14-80-000, ``Application for Authorization to Transfer 
Jurisdictional Facilities Pursuant to section 203 of the Federal 
Power Act and Request for Expedited Action'' at pp. 5-6 (describing 
the planned ownership structure of future cross-border 
interconnection facilities), and Energia Sierra Juarez U.S., LLC, 
Docket No. EC14-80-000 (May 29, 2014) (letter order approving 
transfer)).
    \108\ BP Wind at 4-5. MISO's comments seem to support this 
point, stating, ``from an operational and reliability perspective, 
MISO needs to have a single Interconnection Customer entity at each 
distinct Point of Interconnection to the Transmission System with 
whom MISO can coordinate. That entity must have the authority to 
control any other generators that interconnect to its ICIF on its 
side of the Point of Interconnection.'' MISO at 8.
---------------------------------------------------------------------------

    63. E.ON argues that an ICIF-only entity should be afforded the 
same opportunity to obtain a blanket waiver as entities that sell 
electricity because this type of entity only exists to accommodate a 
generator company's phased access to the grid.\109\ Recurrent states 
that when an interconnection company structure is used, the physical 
arrangement is identical to where the same entity owns the generation 
and the ICIF--the only difference is that a separate entity, the 
interconnection company, owns all or a portion of the ICIF and no 
generation.\110\ SEIA asserts that the Commission should not impose 
unnecessary burdens on developers based on their use of this ownership 
structure.\111\ ITC argues that the ICIF owned by an ICIF-only entity 
will be functionally identical to situations where generators own ICIF, 
and the service is likely to be the same.\112\ BP Wind agrees that the 
Commission should ensure that ICIF-only entities are not precluded from 
being eligible for the proposed blanket waiver on a technicality, so 
long as the facilities are utilized to interconnect generating 
facilities to the transmission grid.\113\ BP Wind argues that these 
interconnection-only entities, like generators that directly own 
interconnection facilities, do not seek to be in the transmission 
business.
---------------------------------------------------------------------------

    \109\ E.ON at 6-7.
    \110\ Recurrent at 5-6.
    \111\ SEIA at 4-5.
    \112\ ITC at 12-13.
    \113\ BP Wind at 6.
---------------------------------------------------------------------------

    64. First Wind and Invenergy argue that, if the Commission does not 
extend the blanket waiver to ICIF-only entities, the rule would be 
discriminatory because there is no basis to distinguish the two types 
of ICIF entities other than corporate structure, and ICIF-only entities 
would face the undue burdens identified in the NOPR.\114\ ITC and MISO 
TOs argue that to provide a blanket waiver to ICIF owners that sell 
electric energy, but to require ICIF owners that do not sell electric 
energy to file an OATT or seek waiver thereof, serves no clear purpose 
and imposes precisely the same burdens and regulatory inefficiencies 
identified as the basis for the Commission's NOPR, in a manner which 
discriminates against non-sellers of electric energy.\115\
---------------------------------------------------------------------------

    \114\ First Wind at 4-8 and Invenergy at 7-11.
    \115\ ITC at 12-13 and MISO TOs at 5-6.
---------------------------------------------------------------------------

    65. ITC also is concerned that the Commission's proposal to limit 
eligibility for the waiver may have unintended consequences. For 
example, given the practical burdens associated with the operation and 
maintenance of ICIF, ICIF owners may wish to divest such facilities to 
transmission owners with more experience operating these types of 
facilities, and more resources for meeting the reliability requirements 
of such operation. ITC argues that failure to extend the blanket waiver 
in such scenarios may discourage such transactions, thereby imposing 
reliability and operational burdens on generator owners who may not be 
willing or able to carry them out.\116\ MISO TOs quote the NOPR as 
stating that the pro forma OATT is not a good fit for ICIF and that 
these facilities do not typically present all the concerns the OATT is 
intended to address; MISO TOs assert that the same is true whether the 
ICIF owner happens to sell electric energy from its generating facility 
or not.\117\
---------------------------------------------------------------------------

    \116\ ITC at 13.
    \117\ MISO TOs at 5-6.
---------------------------------------------------------------------------

    66. Recurrent and Sempra further argue that the Commission has 
addressed these types of ownership arrangements in the context of 
``exempt wholesale generator'' (EWG) status pursuant to section 32 of 
the Public Utility Holding Company Act of 2005 (PUHCA).\118\ Recurrent 
states that the Commission has held that an entity that does not own 
generation facilities but does own a radial interconnection line used 
solely to connect wholesale-only generating facilities to the 
transmission grid qualifies as an EWG. Recurrent argues that section 
32(a)(2) of PUHCA states that the term ``eligible facility'' includes 
interconnecting transmission facilities necessary to effect a sale of 
electric energy at wholesale, and that an entity may be an EWG if it 
owns ``all or part of one or more eligible facilities.'' Recurrent 
states that with respect to the

[[Page 17664]]

statutory requirement that an EWG ``sell electric energy at 
wholesale,'' the Commission has imputed the generation owner's sales of 
wholesale power to the interconnection company, in order to satisfy the 
statutory requirement, in all of the proceedings that have addressed 
this issue.\119\ Recurrent argues that in decisions involving requests 
for waivers of OATT and related requirements, and in those involving 
EWG status, the Commission appropriately has not elevated form over 
substance and has not differentiated its regulatory treatment of 
interconnection companies from its treatment of a ``single entity'' 
that owns both generation and ICIF.\120\
---------------------------------------------------------------------------

    \118\ Sempra at 4-5 (citing, e.g., Wolverine Creek Goshen 
Interconnection LLC, 111 FERC ] 62,209 (2005) (Wolverine Creek 
Goshen); Sagebrush, 103 FERC ] 61,332 (2003) (Sagebrush); 
Termoelectrica U.S., LLC, 102 FERC ] 61,019 (2003) (Termoelectrica); 
Peetz Logan Interconnect, LLC, Docket No. EG06-84-000, ``Notice of 
Exempt Wholesale Generator Status'' (Sept. 27, 2006); Bishop Hill 
Interconnection LLC, Docket No. EG12-24-000, ``Notice of Self-
Certification of Exempt Wholesale Generator Status'' (Jan. 20, 
2012); Maine GenLead LLC, Docket No. EG14-23-000, ``Notice of Self-
Certification of Exempt Wholesale Generator Status'' (Jan. 24, 
2014)).
    \119\ Recurrent at 6.
    \120\ Recurrent at 6-7.
---------------------------------------------------------------------------

    67. Several commenters suggest potential ways to fix the section 
210 applicability issue with respect to ICIF-only entities, such that 
the blanket waiver and safe harbor would apply to ICIF-only companies, 
and section 210 would preserve the ``backstop'' ability of third 
parties to obtain a Commission order requiring the ICIF-only company to 
interconnect with and provide transmission services to the third party. 
Recurrent proposes that the Commission grant the blanket waiver to an 
ICIF owner that does not sell electric energy if the interconnection 
company files a request for waiver that includes a commitment that if 
the Commission issues an order requiring the interconnection company to 
provide transmission services to a third party pursuant to section 211 
of the FPA--to which the interconnection company is subject--the 
interconnection company agrees to voluntarily provide interconnection 
to the third party.\121\ SEIA states that it supports Recurrent's 
proposal.\122\ Similarly E.ON states that the section 210 applicability 
concern could be alleviated by having the ICIF-only entity 
affirmatively submit to the Commission's section 210 jurisdiction as a 
condition to being afforded the blanket waiver.\123\
---------------------------------------------------------------------------

    \121\ Recurrent at 9-10.
    \122\ SEIA at 5 (citing Recurrent at 9-10).
    \123\ E.ON at 7. E.ON also offers a redline of the proposed 
regulations to effect this change.
---------------------------------------------------------------------------

    68. Sempra states that, although ICIF-only entities may not sell 
the power produced by their affiliates, they are an indispensable part 
of the sales transaction, and are typically party to the 
interconnection agreement along with or as agent for the affiliated 
generator.\124\ Therefore, Sempra argues, for the purpose of section 
210 applicability, it would be appropriate to impute the electricity 
sales of an affiliated generator, as the Commission does in the EWG 
context, as discussed above, and extend that blanket waiver and safe 
harbor to the ICIF-only entity.\125\
---------------------------------------------------------------------------

    \124\ Sempra at 4.
    \125\ Sempra at 4-6.
---------------------------------------------------------------------------

    69. First Wind and Invenergy argue that the Commission's concern 
about entities not being able to use section 210 to request 
interconnection service can be addressed by the Commission creating an 
equivalent obligation by regulation for requesting interconnection from 
an ICIF entity, and then review requests under section 210 
standards.\126\ Similarly, BP Wind argues that the Commission should 
revise its regulations so that ICIF-only entities that receive a 
request for interconnection service would process the request in 
accordance with requirements similar to those set forth in section 210 
of the FPA.\127\
---------------------------------------------------------------------------

    \126\ First Wind at 4-8 and Invenergy at 7-11. Invenergy also 
offers a redline of the proposed regulations to effect this change.
    \127\ BP Wind at 5-6.
---------------------------------------------------------------------------

    70. NextEra requests that the Commission clarify that ICIF owners 
that have authorization from the Commission to sell electric energy at 
market-based rates or that are EWGs are engaged in the sale of electric 
energy for purposes of determining application of the proposed waiver 
and application of section 210. NextEra argues that this would ensure 
consistency between the Commission's use of similar terms and with 
Commission precedent with respect to EWGs.\128\ NextEra states that 
there may be instances in which an ICIF owner is not currently engaged 
in sales of electricity yet is authorized by the Commission to engage 
in such sales under a market-based rates tariff, so it should qualify 
as an electric utility.
---------------------------------------------------------------------------

    \128\ NextEra at 7-9.
---------------------------------------------------------------------------

    71. ITC argues that section 210(d) provides that the Commission 
may, on its own motion, issue an order requiring any action described 
in subsection (a)(1) if the Commission determines that such order meets 
the requirements of subsection (c). ITC interprets this to mean that 
the Commission may issue an interconnection order on its own motion, 
regardless of whether the ICIF owner qualifies as an electric utility 
by selling energy.
    72. BP Wind argues that, if the Commission does not allow ICIF-only 
entities to forego filing an OATT, it should at a minimum not require 
such companies to file an OATT with the Commission until after 
completion of interconnection studies by the interconnecting utility 
and the requesting party has committed to move forward with its 
project.\129\ ITC argues that if the Commission does not extend the 
blanket waiver to ICIF-only entities, the Commission should provide the 
option for ineligible entities to file a less burdensome and more 
narrowly tailored OATT that governs the terms of interconnections via 
the LGIP and LGIA.\130\
---------------------------------------------------------------------------

    \129\ BP Wind at 7.
    \130\ ITC at 8.
---------------------------------------------------------------------------

c. Commission Determination
    73. The proposal to limit the waiver to ICIF owners that also sell 
electricity was intended to prevent the creation of a regulatory gap 
and ensure that potential customers are not deprived of the ability to 
seek interconnection with ICIF as a result of the waiver of ICIF 
owners' OATT obligation. We believe that the initial assessment in the 
NOPR that relatively few entities that own and/or operate ICIF would be 
excluded from the blanket waiver by the requirement that they sell 
electricity may be incorrect. We also believe that the value of 
reducing regulatory burdens, which is a goal of this Final Rule, 
applies equally to ICIF owners who sell electricity and to those that 
do not. Therefore, we conclude that we should extend the blanket waiver 
to ICIF owners who do not sell electricity, but, in doing so, we must 
ensure that no potential customers are deprived of their ability to 
seek interconnection with ICIF by the waiver of the ICIF owner's OATT 
obligation. To expand the entities eligible for the blanket OATT 
waiver, we adopt the following procedure to allow ICIF-only entities to 
be eligible for the blanket OATT waiver. Any public utility to which 
the blanket waiver stated in section 35.28(d)(2) of the regulations 
adopted herein applies, but which does not sell electric energy, will 
receive the blanket waiver upon filing an informational statement with 
the Commission, as provided for in those regulations adopted 
herein.\131\ In the statement, the entity must declare that, ``In order 
to satisfy the requirements for a blanket waiver as described in 
section 35.28(d)(2) of the Commission's regulations, [entity] commits 
to comply with and be bound by the obligations and procedures 
applicable to electric utilities under section 210 of the FPA.'' This 
informational statement may be brief, requiring only the name and 
contact information for the entity making the statement, and the 
affirmative declaration described in the previous

[[Page 17665]]

sentence. These section 210 statements are to be filed in the following 
docket, Docket No. AD15-9-000. The Commission will take no action in 
response to these statements, but the blanket waiver will be applicable 
upon filing this informational statement.
---------------------------------------------------------------------------

    \131\ We will not issue a public notice, accept comments, or 
issue an order on the informational filings.
---------------------------------------------------------------------------

    74. The purpose of this section 210 statement is to create a 
publically available record of ICIF-only entities that are taking 
advantage of the blanket OATT waiver, and of the fact that, even though 
these entities are not electric utilities, they are subject to an 
application to the Commission under section 210 for an interconnection 
order. Through this process, our intent is to extend the benefits of 
the blanket OATT waiver to ICIF-only entities, protect the rights of 
potential interconnection customers, and minimize the regulatory burden 
to accomplish these goals. If an entity submits such a statement and 
later objects to or fails to comply with section 210 obligations and 
procedures, its blanket waiver will be deemed to have been 
revoked.\132\
---------------------------------------------------------------------------

    \132\ A section 210 informational statement would remain 
operative if the public utility that filed it had a change in 
ownership. However, if the original public utility with an 
informational statement sold the facilities to a different entity, 
the new entity would have to satisfy the criteria for a waiver 
(including, for instance, not owning network transmission 
facilities), and if it does not, it would be subject to OATT 
requirements. It is the party's responsibility to ensure that its 
regulatory filings are up to date.
---------------------------------------------------------------------------

    75. Accordingly, we are revising section 35.28(d)(2) of the 
regulations to incorporate this extension of the blanket waiver to 
entities that are not electric utilities, upon the filing of the 
section 210 statement described above. The safe harbor protections at 
section 35.28(d)(2)(ii)(B) will also be available to those entities 
eligible for the blanket waiver, as discussed below.
3. Status of the Third-Party Requester
a. Commission Proposal
    76. In the NOPR, the Commission stated, ``To the extent that either 
the third-party requester or ICIF owner does not meet applicable 
requirements for purposes of sections 210 and 211, but where the third-
party requester would be eligible for OATT service, the ICIF waiver 
would not apply.'' \133\
---------------------------------------------------------------------------

    \133\ NOPR, FERC Stats. & Regs. ] 32,701 at P 51.
---------------------------------------------------------------------------

b. Comments
    77. AWEA, First Wind, and Invenergy argue that a public utility's 
eligibility for the blanket waivers should not depend on the status of 
any such potential third party that might seek access to ICIF. They 
argue that the waiver would not provide the expected benefits of 
reducing risks if it would not apply in the circumstance of an 
ineligible third-party requester. They argue that the Commission does 
not explain how an ICIF owner would be expected to deal with requests 
from such a third-party requester. These parties argue that, if the 
Commission is concerned about this, it should by regulation require 
such entities to follow procedures under sections 210 and 211.\134\
---------------------------------------------------------------------------

    \134\ AWEA at 14; First Wind 8-9; and Invenergy at 11-12.
---------------------------------------------------------------------------

c. Commission Determination
    78. We agree with commenters that making the applicability of the 
blanket waiver to the ICIF owner dependent on the status of a potential 
third-party requester would create unnecessary uncertainty for ICIF 
owners. Accordingly, we clarify that applicability of the blanket 
waiver will not depend on the status of the third-party requester. The 
applicability of the blanket waiver does, however, depend on the status 
of the ICIF owner or the ICIF owner's willingness to file a section 210 
statement, as described above.
4. Non-Public Utilities
a. Commission Proposal
    79. The Commission proposed to grant a blanket waiver of all OATT, 
OASIS, and Standards of Conduct requirements to any public utility that 
is subject to such requirements solely because it owns, controls, or 
operates ICIF, in whole or in part, and sells electric energy from its 
generating facility.\135\ The NOPR did not specify how the blanket 
waiver would apply to non-public utilities.
---------------------------------------------------------------------------

    \135\ NOPR, FERC Stats. & Regs. ] 32,701 at P 35.
---------------------------------------------------------------------------

b. Comments
    80. APPA and TAPS state that, in the event the Commission modifies 
its regulations to create blanket waivers for public utility ICIF 
owners, the same blanket waiver and safe harbor should also apply to 
non-jurisdictional utilities for purposes of satisfying reciprocity 
obligations.\136\ APPA, TAPS, and SWP explain that non-public utilities 
are not directly subject to OATT, OASIS, and Standards of Conduct 
requirements, but are obligated to provide reciprocal service over 
transmission they own, operate, or control as a condition of taking 
service under a public utility's OATT. APPA and TAPS state that, to the 
extent a non-public utility is subject to reciprocity solely because it 
owns, controls, or operates ICIF and sells energy from its generation 
facility, it should be able to point to any blanket waiver adopted by 
the Final Rule for public utilities as eliminating its obligation to 
individually file for ``limited and discrete'' waivers to satisfy 
reciprocity obligations, thereby avoiding the burden on it and the 
Commission associated with such waivers. They state that any 
restrictions or safe harbors adopted with respect to section 210 or 211 
proceedings regarding public utility ICIF should also be available to 
such a non-public utility.
---------------------------------------------------------------------------

    \136\ APPA and TAPS at 27-29.
---------------------------------------------------------------------------

    81. NCPA and SWP contend that the Final Rule should make clear that 
any blanket waiver adopted in this proceeding applies to eligible 
public utilities and non-public utilities alike, arguing that treating 
similarly situated utilities differently in this respect would be 
unduly discriminatory.\137\ SWP states that non-public utilities may 
request waivers from these obligations according to the same criteria 
as public utilities. SWP also argues that there is no justification for 
conferring an advantage on public utilities that non-public utilities 
do not share.\138\
---------------------------------------------------------------------------

    \137\ NCPA at 4 and SWP at 4.
    \138\ SWP at 5.
---------------------------------------------------------------------------

c. Commission Determination
    82. The blanket waiver made available to public utilities under 
this Final Rule is also available, as commenters suggest, to non-public 
utilities with a reciprocity obligation.
5. Applicability to Industrial Power Systems' Tie Lines
a. Comments
    83. ELCON comments that many industrials own and operate combined 
heat and power systems or other types of generation that are primarily 
dedicated to their own consumption needs, and that ambiguity with the 
scope of the NOPR may arise because of commonly used nomenclature, 
because dedicated lines operated by industrials are often referred to 
as one type of ``generator tie line.'' ELCON argues that the NOPR 
should be revised to clarify that the regulations respecting third-
party rights to interconnection facilities, even as newly constrained, 
do not apply to the generator tie lines operated by industrials and 
dedicated to their own internal consumption.\139\
---------------------------------------------------------------------------

    \139\ ELCON at 2-3.
---------------------------------------------------------------------------

b. Commission Determination
    84. We decline to revise the proposed regulation as ELCON suggests. 
ELCON's argument that the NOPR's discussion of third-party rights to 
request interconnection and transmission on ICIF should not apply to 
electric lines from industrial-owned combined heat

[[Page 17666]]

and power systems raises an issue that is not the subject of this 
rulemaking. This Final Rule does not make any determination with 
respect to the applicability of the Commission's OATT requirements to 
any particular lines or types of lines. Rather, it applies to any 
transmission providers who are subject to the requirements of section 
35.28 of our regulations, i.e., any public utility that owns, controls, 
or operates facilities used for the transmission of electric energy in 
interstate commerce.\140\

---------------------------------------------------------------------------

    \140\ 18 CFR 35.28(a).
---------------------------------------------------------------------------

6. Applicability of the Blanket Waiver to Additional Regulations
a. Commission Proposal
    85. In the NOPR, the Commission proposed that the blanket waiver 
would apply to section 35.28 of the Commission's regulation, which 
relates to OATT requirements, Part 37, which relates to OASIS 
requirements, and Part 358, which relates to Standards of Conduct for 
Transmission Providers.\141\
---------------------------------------------------------------------------

    \141\ NOPR, FERC Stats. & Regs. ] 32,701 at P 1.
---------------------------------------------------------------------------

b. Comments
    86. Linden argues that the blanket waiver should be expanded to 
also apply to all of Parts 34, 35, 41, 50, 101, and 141 (except 
sections 141.14 and 141.15) of the Commission's regulations with 
respect to any provision of transmission service or interconnection 
service or other sharing with respect to ICIF.\142\ Linden contends 
that this is consistent with the Commission's findings in an order on a 
proposed shared facilities agreement between Linden and its affiliate, 
in which the Commission found that such regulations are waived with 
respect to Linden.\143\
---------------------------------------------------------------------------

    \142\ Linden at 8.
    \143\ Linden at 8 (citing Cogen Technologies Linden Venture, 
L.L.P., 127 FERC ] 61,181, at P 20 (2009)).
---------------------------------------------------------------------------

c. Commission Determination
    87. While we recognize that waiver of the provisions mentioned by 
Linden have, under certain circumstances, been granted by the 
Commission, we decline to expand the scope of this Final Rule. The 
blanket waivers granted in this Final Rule are the same as those that 
could be requested on a case-by-case basis for good cause shown in the 
Commission's pre-existing regulations at 18 CFR 35.28(d). Whether to 
grant additional waivers on a generic basis was not something proposed 
to be addressed in this proceeding.
7. Existing Agreements and Waivers
a. Comments
    88. Linden contends that the Commission should clarify that the 
blanket waiver will apply regardless of whether a public utility has 
already granted access to its ICIF pursuant to a Commission-accepted 
agreement. Linden argues that the fact that an owner and/or operator of 
ICIF has allowed a third-party to use its ICIF pursuant to a 
Commission-accepted agreement does not change the nature of such ICIF, 
and the blanket waiver should accordingly continue to apply.\144\ 
Linden states that, at the very least, the Commission should clarify 
that all existing waivers that have been granted to public utilities 
like Linden will continue to apply.\145\
---------------------------------------------------------------------------

    \144\ Linden at 7.
    \145\ Linden at 7-8.
---------------------------------------------------------------------------

b. Commission Determination
    89. We affirm granting access over ICIF via an existing agreement, 
such as a common facilities agreement or shared use agreement, does not 
affect an ICIF owner's eligibility for the blanket waiver granted by 
this Final Rule. Further, we affirm that, if an entity has previously 
received a specific waiver of the OATT and related obligations pursuant 
to the Commission's ``limited and discrete'' or ``small entity'' 
standards, the blanket waiver will supersede the existing waiver.\146\ 
If, as Linden postulates, an entity has received a case-specific waiver 
that waives requirements in addition to those waived by the blanket 
waiver, the blanket waiver would not rescind the broader waiver.
---------------------------------------------------------------------------

    \146\ NOPR, FERC Stats. & Regs. ] 32,701 at P 40.
---------------------------------------------------------------------------

8. Existing OATTs
a. Commission Proposal
    90. The Commission proposed that the grant of a blanket waiver 
would have no automatic impact on an OATT already on file or on service 
already being taken under it, but the Commission might on a case-by-
case basis consider requests to withdraw an OATT on file for ICIF if no 
third party is taking service under it.\147\
---------------------------------------------------------------------------

    \147\ NOPR, FERC Stats. & Regs. ] 32,701 at P 40.
---------------------------------------------------------------------------

b. Comments
    91. AWEA, Terra-Gen, and NextEra assert that an ICIF owner with an 
OATT on file should be able to withdraw its OATT if there are no third 
parties taking, or currently pursuing a request for, interconnection or 
transmission service.\148\ AWEA and Terra-Gen ask that the Commission: 
(1) Clarify that this cancellation policy will apply when the ICIF 
owner has no existing customers and that any new service requests 
submitted after such a filing has been made must proceed under sections 
210, 211, and 212; and (2) provide an expedited process to grant such 
requests to withdraw such OATTs.\149\ Terra-Gen states that it incurred 
substantial costs in attempting to comply with the Commission's OATT 
requirements over several years, only to find that it could not recover 
those costs because the customer that requested transmission service 
ultimately did not become a transmission customer. Terra-Gen argues 
that this experience underscores the importance of the Commission's 
proposal to provide a case-by-case mechanism to accept cancellation of 
OATTs filed by ICIF owners that have proven to be unnecessary because 
no third parties are taking service under them.\150\ NextEra requests 
that the Commission clarify its statement in the NOPR that withdrawal 
of an OATT ``if no party is taking service under it'' was not intended 
to preclude the ability of an ICIF owner with an OATT on file from 
exercising its rights under section 205 of the FPA to propose 
alternative tariff structures in the future, as appropriate to the 
facts and circumstances of service available on the ICIF.\151\
---------------------------------------------------------------------------

    \148\ AWEA at 17; NextEra at 10; and Terra-Gen at 2.
    \149\ AWEA at 17 and Terra-Gen at 4.
    \150\ Terra-Gen at 2.
    \151\ NextEra at 10-11.
---------------------------------------------------------------------------

    92. AWEA further contends that the blanket waivers should also 
automatically apply to those that already have OATTs on file. AWEA 
states that ICIF owners that currently have an OATT on file are in need 
of the proposed reforms just as much as future ICIF owners, and argues 
that providing blanket waivers to this group as well would provide 
consistency and certainty to these entities.\152\
---------------------------------------------------------------------------

    \152\ AWEA at 11.
---------------------------------------------------------------------------

c. Commission Determination
    93. In the instance where an ICIF owner has an OATT on file and no 
third parties are taking service, the Commission will consider a 
request to withdraw an OATT on a case-by-case basis. Thus, we decline 
to automatically apply blanket waivers to those that already have OATTs 
on file. We believe this is appropriate in order to give any potential 
customer actively pursuing service sufficient notice before allowing a 
filed OATT to be withdrawn. As such, we decline to establish a separate 
process for cancelling existing OATTs because the Commission will 
consider the specific circumstances of each

[[Page 17667]]

request to withdraw an OATT already on file.
9. Revoking the Blanket Waiver
a. Commission Proposal
    94. In the NOPR, the Commission proposed that the blanket waiver 
would not be automatically revoked by a service request, but could be 
revoked in a Commission order if the Commission determines that it is 
in the public interest to do so pursuant to a proceeding under sections 
210 and 211. The Commission also proposed that the waiver would be 
deemed to be revoked as of the date the public utility ceases to 
satisfy the qualifications for such waiver (e.g., it owns, controls, or 
operates transmission facilities that are not ICIF, or the corporate 
structure changes such that the ICIF owner is no longer the entity that 
sells electric energy from its Generating Facility). The Commission 
sought comment on the circumstances under which and the mechanism by 
which the Commission should revoke the proposed waiver.\153\
---------------------------------------------------------------------------

    \153\ NOPR, FERC Stats. & Regs. ] 32,701 at P 38.
---------------------------------------------------------------------------

    95. The Commission also proposed that, if an OATT waiver were 
revoked because of such a change in circumstances, the waivers of OASIS 
and Standards of Conduct would also be revoked, without prejudice to 
the ICIF owner filing a request to continue its waivers of OASIS and 
Standards of Conduct pursuant to the waiver criteria then in 
effect.\154\ In the instance where the Commission revokes the ICIF 
waiver by order, the Commission noted that it may determine whether the 
OASIS and Standards of Conduct waivers should be continued based on the 
criteria that are in effect.\155\
---------------------------------------------------------------------------

    \154\ Waivers of the Standards of Conduct may be granted for 
good cause pursuant to 18 CFR 358.1(d).
    \155\ NOPR, FERC Stats. & Regs. ] 32,701 at P 39.
---------------------------------------------------------------------------

b. Comments
    96. NextEra, BHE, and AWEA agree that revocation of the blanket 
waiver should be considered on a case-by-case basis and believe that 
the processes set forth in sections 210 and 211 of the FPA and section 
2.20 of the Commission's regulations are sufficient to evaluate 
potential revocation of waivers granted to ICIF owners.\156\ If, for 
example, the Commission were to determine that an ICIF owner employed 
market power against the third party requesting service over the ICIF, 
it would be reasonable for the Commission to consider the revocation of 
waiver or other enforcement remedies.\157\ Similarly, AWEA asserts that 
the only plausible basis for revocation of the waiver, besides losing 
eligibility, is if an ICIF owner refuses to provide transmission access 
following proceedings under sections 210, 211, and 212. AWEA seeks 
clarification on what, if any, other criteria might be used by the 
Commission to determine that it is in the public interest to revoke 
such a waiver and requests the Commission to provide clear criteria for 
what would constitute a waiver revocation.\158\ BHE states that the 
waiver should only be revoked in limited circumstances, such as when a 
third party is granted access under sections 210 and 211 of the FPA or 
when material circumstances change such that the ICIF owner no longer 
satisfies the waiver qualification.\159\
---------------------------------------------------------------------------

    \156\ NextEra at 9-10; BHE at 7-8; and AWEA at 8.
    \157\ NextEra at 10.
    \158\ AWEA at 9.
    \159\ BHE at 7.
---------------------------------------------------------------------------

    97. AWEA states that acquisition of transmission facilities should 
not automatically trigger revocation of the blanket waiver. AWEA argues 
that service over such transmission facilities will be subject to 
applicable open access regulations but that ICIFs are distinct 
facilities that exist for the limited purpose of connecting generation 
to the grid.\160\
---------------------------------------------------------------------------

    \160\ AWEA at 9.
---------------------------------------------------------------------------

    98. With respect to the revocation process, AWEA recommends that 
the Commission provide an ICIF owner with reasonable advanced notice 
detailing the reasons for potential revocation, and give the ICIF owner 
an opportunity to dispute and to cure the reasons for such a potential 
revocation.\161\ AWEA suggests that the Commission first issue a show 
cause order to the waiver holder to address why the waiver should not 
be revoked and provide an opportunity for the waiver holder to make 
that demonstration.\162\
---------------------------------------------------------------------------

    \161\ AWEA at 9-10.
    \162\ AWEA at 10.
---------------------------------------------------------------------------

    99. AWEA recommends that the Commission outline the process to 
reinstitute an ICIF owner's waiver if, after revocation of a waiver, it 
is discovered that the waiver revocation was unnecessary, such as, for 
example, if the requirement to file an OATT proves to be unnecessary 
because of the failure of the requesting third party to take 
transmission service.\163\
---------------------------------------------------------------------------

    \163\ AWEA at 10.
---------------------------------------------------------------------------

    100. AWEA supports the Commission proposals that (1) if the OATT 
waiver is revoked, the Commission may determine whether the OASIS and 
Standards of Conduct waivers should continue to be based on the 
criteria in effect; \164\ and (2) if the OATT waiver is revoked due to 
loss of eligibility, the OASIS and Standards of Conduct waivers will 
also be revoked without prejudice to the entity filing a request to 
continue the OASIS and Standards of Conduct waivers.\165\
---------------------------------------------------------------------------

    \164\ AWEA at 10-11.
    \165\ AWEA at 10-11.
---------------------------------------------------------------------------

c. Commission Determination
    101. We adopt the NOPR proposal that the blanket waiver would not 
be automatically revoked by a service request, but could be revoked in 
a Commission order if the Commission determines that it is in the 
public interest to do so pursuant to a proceeding under sections 210 
and 211 of the FPA. We also adopt the NOPR proposal that the waiver 
would be deemed to be revoked as of the date the public utility ceases 
to satisfy the qualifications for such waiver. Additionally, if the 
ICIF that are covered by a blanket waiver become integrated into a 
transmission system such that they can no longer be considered ICIF, 
the blanket waiver would be deemed to have been revoked. To the extent 
that a dispute arises regarding whether a facility is eligible for the 
waiver, the Commission will address such a dispute at that time.
    102. If the OATT waiver is automatically revoked because of a 
change in circumstances, we affirm that the waivers of OASIS and 
Standards of Conduct would also be revoked, without prejudice to the 
ICIF owner filing a request to continue its waivers of OASIS and 
Standards of Conduct pursuant to the waiver criteria then in effect.
    103. We decline to elaborate on the specific circumstances that 
would lead to the revocation of the blanket waiver other than ceasing 
to satisfy the qualifications for such waiver, because it is not 
possible to anticipate every circumstance that would result in a 
revocation. Revocation of the blanket waiver in circumstances other 
than ceasing to satisfy the qualifications for such waiver will be 
determined by the Commission under applicable statutory and regulatory 
provisions. Any instance of revocation, however, would be the result of 
a Commission proceeding, so the ICIF owner would have notice of the 
revocation and full due process rights to respond. Moreover, under 
sections 210 and 211 the Commission may direct service to be provided 
under an interconnection and transmission service agreement without 
directing that the ICIF owner file an OATT. However, the Commission 
reserves the right to revoke the blanket waiver and require the filing 
of an OATT to ensure open access in appropriate circumstances.

[[Page 17668]]

C. Interconnection and Transmission Under Sections 210 and 211 of the 
Federal Power Act

1. Sections 210 and 211
    104. Sections 210 and 211 of the FPA describe the process for 
seeking Commission-ordered interconnection and transmission services. 
Section 210 of the FPA provides, in relevant part, ``Upon application 
of any electric utility . . . the Commission may issue an order 
requiring (A) the physical connection of . . . the transmission 
facilities of any electric utility, with the facilities of such 
applicant.'' \166\ An ``electric utility'' is defined as ``a person or 
Federal or State agency . . . that sells electric energy.'' \167\ 
Section 211 provides that ``any electric utility, Federal power 
marketing agency, or any other person generating electric energy for 
sale or resale'' may apply to the Commission for an order requiring a 
``transmitting utility'' to provide transmission services, including 
enlargement of facilities if necessary.\168\ The term ``transmitting 
utility'' is defined as an entity that ``owns, operates, or controls 
facilities used for the transmission of electric energy . . . in 
interstate commerce . . . for the sale of electric energy at 
wholesale.'' \169\ For a third party to obtain interconnection services 
and transmission services, an application must be made under both 
sections 210 and 211.\170\ An applicant may consolidate the 
applications for the Commission's consideration.\171\
---------------------------------------------------------------------------

    \166\ 16 U.S.C. 824i(a)(1)(A).
    \167\ 16 U.S.C. 796(22).
    \168\ 16 U.S.C. 824j.
    \169\ 16 U.S.C. 796(23).
    \170\ Tres Amigas LLC, 130 FERC ] 61,205, at P 43, reh'g denied, 
132 FERC ] 61,232 (2010). In Laguna Irrigation District, the 
Commission explained that ``[n]othing in our [section 210] 
interconnection order requires transmission service. Rather, 
transmission service will be obtained by Laguna pursuant to other 
transmission tariffs or agreements.'' 95 FERC ] 61,305, at 62,038 
(2001), aff'd sub nom. Pacific Gas & Electric Co. v. FERC, 44 Fed. 
Appx. 170 (9th Cir. 2002) (unpublished); see also City of Corona, 
California v. Southern California Edison Co., 104 FERC ] 61,085, at 
PP 7-10 (2003) (Corona's application under section 210 did not 
constitute a request for transmission under section 211).
    \171\ See Aero Proposed Order, 115 FERC ] 61,128.
---------------------------------------------------------------------------

    105. An application under section 210 must show that the 
interconnection: (1) Is in the public interest; (2) would either 
encourage conservation of energy or capital, optimize efficient use of 
facilities and resources, or improve reliability; and (3) meets the 
requirements of section 212.\172\ The requirements of section 212 are 
discussed further below.
---------------------------------------------------------------------------

    \172\ 16 U.S.C. 824i(c); Aero Proposed Order, 115 FERC ] 61,128 
at PP 15-16.
---------------------------------------------------------------------------

    106. An application under section 211 requires that the third party 
seeking transmission service first make a good faith request for 
service, complying with 18 CFR 2.20, specifying details as to how much 
capacity is requested and for what period, at least 60 days before 
making an application to the Commission for an order requiring 
transmission service.\173\ The Commission may grant an application 
under section 211 if the application is in the public interest and 
otherwise meets the requirements under section 212.
---------------------------------------------------------------------------

    \173\ See 16 U.S.C. 824j(a) (``No order may be issued under this 
subsection unless the applicant has made a request for transmission 
services to the transmitting utility that would be the subject of 
such order at least 60 days prior to its filing of an application 
for such order.''); 18 CFR 2.20.
---------------------------------------------------------------------------

    107. Section 212 further requires that, before issuing a final 
order under either section 210 or 211, the Commission must issue a 
proposed order setting a reasonable time for the parties to agree to 
terms and conditions for carrying out the order, including allocation 
of costs. If parties can agree to terms within that time, the 
Commission may issue a final order approving those terms. If parties do 
not agree, the Commission will weigh the positions of the parties and 
issue a final order establishing the terms of costs, compensation, and 
other terms of interconnection and transmission and directing 
service.\174\
---------------------------------------------------------------------------

    \174\ 16 U.S.C. 824k(c)(2); Aero Proposed Order, 115 FERC ] 
61,128 at PP 17-18 (providing parties 28 days to negotiate and 
provide briefing on issues of disagreement).
---------------------------------------------------------------------------

a. Commission Proposal
    108. The Commission proposed in the NOPR that, if a third party 
seeks to use ICIF that qualify for the blanket waiver discussed above, 
an eligible entity seeking interconnection and transmission service on 
ICIF would need to follow the rules and regulations applicable to 
requests for service under sections 210 and 211 (subject to the safe 
harbor presumption proposed in the NOPR).\175\
---------------------------------------------------------------------------

    \175\ NOPR, FERC Stats. & Regs. ] 32,701 at P 41.
---------------------------------------------------------------------------

    109. As discussed above, the Commission's current practice with 
respect to allowing an ICIF owner to have priority use of excess 
transmission capacity it has built is to allow the ICIF owner to 
demonstrate specific plans and milestones for any planned future 
generation development by the ICIF owner or its affiliates. Consistent 
with that practice, the Commission proposed in the NOPR to find that, 
outside of the safe harbor period and to the extent the ICIF owner can 
demonstrate specific plans and milestones for its and/or its 
affiliates' future use of the ICIF, with respect to ICIF that are 
eligible for the blanket waiver discussed above, it is generally in the 
public interest under sections 210 and 211 to allow an ICIF owner to 
retain priority rights to the use of excess capacity on ICIF that it 
plans to use to interconnect its own or its affiliates' future 
generation projects.\176\ Thus, the Commission proposed to make 
priority determinations for use of ICIF, in the event of a third party 
request, in the process under sections 210 and 211. The Commission 
sought comment on whether an ICIF owner's or affiliate's planned future 
use of the ICIF is an appropriate consideration to factor into a 
proceeding under sections 210 and 211.
---------------------------------------------------------------------------

    \176\ NOPR, FERC Stats. & Regs. ] 32,701 at P 47.
---------------------------------------------------------------------------

    110. Any disputes as to the extent of excess capacity on ICIF or 
the ICIF owner's future plans to use such excess capacity would be 
resolved, subject to the safe harbor presumption discussed below, 
during the proceedings under sections 210 and 211, using an excess 
capacity analysis similar to that used in Aero and Milford, in which 
the ICIF owner must demonstrate specific plans and milestones for the 
future use of its ICIF. Even if an ICIF owner were able to demonstrate 
in such a proceeding that no excess capacity exists, if supported by 
the record in the case, the Commission could order the eligible ICIF 
owner to expand its facilities to provide interconnection and 
transmission service under sections 210 and 211.\177\ Section 212 
requires that the eligible ICIF owners would be fully compensated for 
any required expansion.\178\ This is similar to the rights and 
obligations under the pro forma OATT.\179\
---------------------------------------------------------------------------

    \177\ 16 U.S.C. 824i(a)(1)(D) (``The Commission may issue an 
order requiring . . . such increase in transmission capacity as may 
be necessary. . . .''); 16 U.S.C. 824j(a) (``Any electric utility . 
. . may apply to the Commission for an order under this subsection 
requiring a transmitting utility to provide transmission services 
(including any enlargement of transmission capacity necessary to 
provide such services) to the applicant.'').
    \178\ Section 212(a) provides that an order under section 211 
shall require the transmitting utility subject to the order to 
provide wholesale transmission services at rates, charges, terms, 
and conditions which permit the recovery by such utility of all the 
costs incurred in connection with the transmission services and 
necessary associated services, including, but not limited to, an 
appropriate share, if any, of legitimate, verifiable and economic 
costs, including taking into account any benefits to the 
transmission system of providing the transmission service, and the 
costs of any enlargement of transmission facilities.
    \179\ Section 15.4 of the pro forma OATT states that f the 
Transmission Provider determines that it cannot accommodate a 
Completed Application for Firm Point-To-Point Transmission Service 
because of insufficient capability on its Transmission System, the 
Transmission Provider will use due diligence to expand or modify its 
Transmission System to provide the requested Firm Transmission 
Service, consistent with its planning obligations in Attachment K, 
provided the Transmission Customer agrees to compensate the 
Transmission Provider for such costs pursuant to the terms of 
Section 27.

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[[Page 17669]]

b. Comments
    111. Most commenters support the NOPR proposal that third parties 
seeking to use ICIF subject to the blanket waiver should do so pursuant 
to sections 210 and 211. AWEA, BHE, EEI, NextEra, Recurrent, and 
Southern argue that this approach will protect the ICIF owner from 
speculative requests for transmission service.\180\ NextEra and BHE 
further argue that the requirements of sections 210 and 211 also 
protect the interests of third parties seeking to use ICIF.\181\ 
NextEra and Southern also support the NOPR's proposal to evaluate, in 
the course of a proceeding under sections 210 and 211, whether an ICIF 
owner's ``specific plans and milestones'' justify priority rights to 
use excess capacity on the ICIF, to the extent the safe harbor is not 
applicable.\182\ Finally, NextEra and AWEA contend that the framework 
under sections 210 and 211 provides the flexibility necessary for ICIF 
owners and third parties to reach mutually agreeable arrangements 
tailored to their respective needs.\183\
---------------------------------------------------------------------------

    \180\ Recurrent at 4; Southern at 7; NextEra at 11-14; AWEA at 
12-13; BHE at 8; and EEI at 16.
    \181\ NextEra at 11-14 and BHE at 8.
    \182\ NextEra at 11-14.
    \183\ NextEra at 11-14 and AWEA at 12-13.
---------------------------------------------------------------------------

    112. APPA and TAPS argue that the NOPR, as proposed, would erect an 
impassable barrier to accessing ICIF. APPA, TAPS, and NRECA argue that 
a proceeding under sections 210 and 211 is time-consuming, burdensome, 
and expensive.\184\ They state that Order No. 888 expressly found those 
statutory processes to be too cumbersome and time-consuming to provide 
non-discriminatory access and placed customers ``at a severe 
disadvantage compared to the transmission owner.'' \185\ They contend 
that by limiting requesters to access only through sections 210 and 
211, even if the request is received many years after the ICIF is 
energized and there is ample unused capacity, the NOPR creates a potent 
and permanent obstacle to open access that enhances the ICIF owner's 
vertical market power without any justification.\186\ NRECA argues that 
prospective customers should not have to initiate such a proceeding 
with the Commission in order to demonstrate entitlement to service on 
these Commission-jurisdictional lines.\187\ APPA and TAPS also contend 
that the NOPR has not demonstrated that the proposed procedures will 
cost less than existing requirements, arguing that the lengthy and 
costly procedures of sections 210 and 211 could not possibly be less 
expensive for ICIF owners on an industry-wide basis.\188\
---------------------------------------------------------------------------

    \184\ APPA and TAPS at 11-12.
    \185\ APPA and TAPS at 12 (citing to Order No. 888, FERC Stats. 
& Regs. ] 31,036 at 31,646).
    \186\ APPA and TAPS at 24-25.
    \187\ NRECA at 5.
    \188\ APPA and TAPS at 20-21.
---------------------------------------------------------------------------

c. Commission Determination
    113. We find that with respect to ICIF eligible for the blanket 
waiver discussed above, it is appropriate for entities seeking 
interconnection and transmission service on ICIF to follow the rules 
and regulations applicable to requests for service under sections 210 
and 211 (subject to the safe harbor discussed below).\189\ Given the 
risk of investment in generation and ICIF, it is appropriate to provide 
an ICIF owner with priority rights over the use of the excess capacity 
on ICIF that it plans to use to interconnect its own or its affiliates' 
future generation projects to the extent the ICIF owner can demonstrate 
specific plans and milestones for its and/or its affiliates' future use 
of the ICIF. In addition, we find that given the relatively small 
percentage of ICIF owners that have actually had to file an OATT,\190\ 
requiring the entity requesting service over ICIF to pursue such 
service under sections 210 and 211 will not overly burden potential 
customers of service on ICIF. The process under sections 210 and 211 
assures third-party entities requesting service on ICIF and eligible 
ICIF owners alike that they will have specified procedural rights as 
set forth in sections 210, 211, and 212 of the FPA and appropriately 
balances ICIF owners' and third parties' rights to service on ICIF. 
Further, this framework provides the contractual flexibility that some 
commenters suggest is not available under our existing policy so that 
contractual arrangements (e.g., transmission service agreements, 
interconnection agreements, and/or shared facilities agreements) can be 
tailored to the special situations for ICIF in determining the 
appropriate terms and conditions of service, as many of the pro forma 
OATT provisions are not applicable to service over ICIF. Finally, we 
recognize that our existing policy to allow an ICIF owner to retain 
priority rights if it has plans to use the ICIF capacity and is making 
progress to achieve those plans can involve a potential transmission or 
interconnection customer in complex proceedings associated with a 
request for service. Thus, we believe the reforms adopted herein will 
not meaningfully change the expense potential customers incur to obtain 
service.
---------------------------------------------------------------------------

    \189\ Such third-party requests for service could include 
requests for firm, nonfirm, conditional, or interim service. See, 
e.g., 18 CFR 2.20(b)(9).
    \190\ See supra P 38.
---------------------------------------------------------------------------

    114. APPA and TAPS are correct that the Commission in Order No. 888 
found section 211 to provide insufficient relief as a general method of 
enabling more competitive generation to obtain open access transmission 
service. As a result, Order No. 888 required that public utilities file 
an OATT to provide readily available, comparable service at known 
rates, terms, and conditions. In this Final Rule, the Commission finds 
that the filing of an OATT and compliance with certain regulations are 
not necessary to prevent unjust and unreasonable rates or unduly 
discriminatory behavior with respect to ICIF. ICIF are sole-use, 
limited and discrete, radial in nature, and not part of an integrated 
transmission network, and third-party requests to use ICIF are 
infrequent. Case-by-case determinations under sections 210 and 211 are 
not appropriate for the large number of transmission service requests 
on the integrated grid, but are appropriate for the few expected 
requests for service on ICIF, each of which would likely have different 
circumstances. We find that, for this set of circumstances, the 
framework of sections 210 and 211 provide a sufficient means for third-
party access to ICIF.
2. Voluntary Arrangements
a. Comments
    115. First Wind and Invenergy ask the Commission to confirm that 
ICIF owners may continue to enter into shared use agreements with 
affiliates without requiring the affiliated party to utilize sections 
210, 211 and 212 to obtain access.\191\ Similarly, Linden requests that 
the Commission clarify that the Commission's proposed process does not 
preclude an ICIF owner and a non-affiliated entity seeking service to 
mutually agree upon an appropriate arrangement outside of the context 
of a proceeding under sections 210 or 211, if the parties file any 
resulting mutually agreed upon arrangement pursuant to section 205 of 
the FPA.\192\ Linden contends that the new proposed section 
35.28(d)(2)(ii) suggests that the parties must use the process before 
the Commission that is outlined in sections 210, 211, and 212 of the 
FPA and the

[[Page 17670]]

Commission's corresponding regulations. Linden asserts that even where 
sections 210 and 211 apply, section 212(c)(1) of the FPA requires that 
the Commission ``set a reasonable time for parties . . . to agree to 
terms and conditions under which such order is to be carried out'' and 
that the Commission generally directs the parties to negotiate 
appropriate agreements.\193\ Accordingly, Linden recommends that the 
Commission should consider revising section 35.28(d)(2)(ii) to 
explicitly allow for the possibility that parties may arrive at 
mutually agreeable arrangements without undergoing a proceeding under 
sections 210 and 211 at the Commission.\194\ Linden further states that 
parties to the relevant arrangements should be allowed flexibility to 
negotiate appropriate terms and conditions without restriction as to 
the form or nature of the agreement for greater regulatory efficiency, 
and recommends that the Commission add an additional section 35.28(iii) 
explicitly acknowledging that parties may mutually agree on rates, 
terms and conditions, subject to Commission review and acceptance.\195\
---------------------------------------------------------------------------

    \191\ First Wind at 15 and Invenergy at 14-15.
    \192\ Linden at 4-5.
    \193\ Linden at 5.
    \194\ Linden at 5-6.
    \195\ Linden at 6-7.
---------------------------------------------------------------------------

    116. E.ON asks the Commission to clarify that the blanket waiver 
should not be jeopardized if a planned phase of a generation project is 
owned by a non-affiliate.\196\ Similarly, NRG and E.ON ask for 
clarification that voluntarily negotiating a bilateral agreement with a 
third party that is seeking access to the ICIF during the safe harbor 
period, discussed below, would not jeopardize the continuation of the 
safe harbor period.\197\
---------------------------------------------------------------------------

    \196\ E.ON at 13.
    \197\ NRG at 3-4 and E.ON at 13.
---------------------------------------------------------------------------

b. Commission Determination
    117. We clarify that the availability of the process under sections 
210 and 211 does not preclude the opportunity for an ICIF owner and an 
entity seeking service, including an affiliate, to mutually agree, 
outside of the process under sections 210 and 211, to an arrangement 
for service over the ICIF. In fact, this flexibility benefits both the 
ICIF owner and an entity seeking service, as it allows the parties the 
opportunity to craft an agreement appropriate for the circumstances and 
potentially expedite access to ICIF. In that case, availability of the 
process under sections 210 and 211 provides protection to entities 
seeking service by allowing them to seek service under the process 
under sections 210 and 211 if an agreement cannot be reached. 
Furthermore, we likewise clarify that this flexibility applies both to 
affiliates and non-affiliates of the ICIF owner, such that ICIF owners 
may enter into shared use agreements with affiliates or non-affiliates, 
without requiring a proceeding under sections 210 and 211 to obtain 
access. Finally, we clarify that a shared-use agreement or bilateral 
agreement with either an affiliate or non-affiliate will not in itself 
jeopardize the applicability of the blanket waiver or the continuation 
of the safe harbor period, discussed below. We find that this will 
allow flexibility and promote mutually agreeable arrangements for 
sharing facilities. In any case, ICIF owners that are public utilities 
would still be subject to the statutory requirement of sections 205 and 
206 forbidding unduly discriminatory practices.
    118. We agree that our use of the term ``shall'' in new section 
35.28(d)(2)(ii) may have inadvertently given the impression that 
voluntary agreements without resort to sections 210 and 211 were not 
allowed. We did not intend that, and therefore change the word 
``shall'' to ``may'' in section 35.28(d)(2)(ii). Indeed, the 
flexibility to enter into voluntary agreements is inherent in the 
process under sections 210 and 211. As Linden points out, section 212 
recognizes that parties should have a reasonable time to agree to terms 
and conditions,\198\ and section 211 requires that a third party must 
have submitted a good faith request for service at least 60 days before 
it may submit a section 211 application before the Commission. Nothing 
in sections 210 or 211 precludes entities from arriving at mutual 
agreements prior to or instead of seeking to establish a process under 
sections 210 and 211. Accordingly, we confirm that an ICIF owner and an 
entity seeking service may mutually agree to an arrangement for 
interconnection and transmission service over the ICIF, without 
initiating a process under sections 210 and 211.
---------------------------------------------------------------------------

    \198\ See 16 U.S.C. 824k(c)(1).
---------------------------------------------------------------------------

3. Interaction With the Transmission System
a. Comments
    119. AWEA states that a third party requesting service on an ICIF 
should be required to submit an appropriate interconnection or 
transmission service request to the transmission provider with whom the 
ICIF are interconnected within 30 days of the good faith request to the 
owner of the ICIF and/or within a reasonable time before an application 
under sections 210 and 211 is made. NextEra argues for a similar 
requirement, stating that the third party should make a request to the 
transmission provider within 60 days following the completion of a 
feasibility study by the ICIF owner in order for a subsequent petition 
under sections 210 or 211 of the FPA to be considered in good 
faith.\199\ AWEA explains that, even if the proposed reforms were put 
into place, failing to require such a submittal could lead to gaming 
opportunities by unaffiliated generators who may wish to establish a 
queue position on an ICIF, while avoiding upfront costs associated with 
actually injecting power into a transmission provider's network 
grid.\200\ AWEA argues that it is reasonable to make such a requirement 
because it is critical for system reliability that all three of the 
relevant parties are involved in any interconnection of new generation 
to the grid.\201\
---------------------------------------------------------------------------

    \199\ NextEra at 14-15.
    \200\ AWEA at 16-17.
    \201\ AWEA at 17.
---------------------------------------------------------------------------

    120. MISO and the MISO TOs suggest that the Commission should 
require the new interconnection customer who requests to interconnect 
to the existing ICIF to enter into an agreement with the existing 
interconnection customer before allowing the new interconnection 
customer to enter the binding portion of the governing interconnection 
procedures.\202\ They argue this is reasonable because adding 
generating facilities to existing ICIF will complicate the existing 
interconnection process and require coordination with the relevant RTO 
or the use of existing RTO interconnection procedures to ensure that 
new interconnections to ICIFs will not adversely impact the reliable 
operation of the transmission system.\203\
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    \202\ MISO at 7 and MISO TOs at 5.
    \203\ MISO at 5-6 and MISO TOs at 4-5.
---------------------------------------------------------------------------

    121. While ITC does not oppose the reforms proposed in the NOPR, 
ITC is concerned that the Commission's proposal to rely exclusively on 
sections 210 and 211 of the FPA to govern third-party interconnections 
on ICIF fails to provide sufficient clarity on the precise contractual 
relationship that will exist between the ICIF owner, a third party 
proposing to interconnect with ICIF, the transmission provider, and the 
impacted transmission owner (provided these are separate entities). ITC 
recommends that the Commission provide additional guidance in the Final 
Rule on the process for establishing contractual relationships between 
these four types of parties, the nature of these contractual 
relationships, and how

[[Page 17671]]

successful applications will fit into the relevant transmission 
provider study processes necessary to ensure that such connections 
occur safely and reliably. Specifically, ITC recommends that the 
Commission include in the Final Rule requirements that: (1) 
Interconnection requests approved under sections 210 and 211 must 
proceed under the LGIP of the transmission provider to which the ICIF 
owner is interconnected; and (2) the third party must enter into a 
separate LGIA with the impacted transmission owner and facilities 
agreement with the ICIF owner.\204\ Given that the transmission owner 
owns and operates facilities to which the shared ICIF are 
interconnected, the third party should be required to enter into an 
LGIA with the impacted transmission owner. This will clearly establish 
the rights and obligations of all parties and, more importantly, ensure 
that the appropriate reliability studies are conducted prior to 
allowing an interconnection.\205\ The MISO TOs agree with ITC that the 
Commission should modify its NOPR proposal to require greater 
coordination with the transmission provider and transmission owner 
because this will lessen the likelihood of operational and reliability 
problems while lessening the OATT, OASIS, and Standards of Conduct 
burdens on ICIF owners that the Commission seeks to alleviate.\206\
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    \204\ ITC at 7-8.
    \205\ ITC at 11.
    \206\ MISO TOs at 5.
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    122. Similarly, EPSA recommends that the Commission should 
encourage parties to utilize appropriate existing LGIA and LGIP 
provisions regarding terms, conditions and procedures in the Final Rule 
because the provisions of the LGIA and LGIP (e.g., section 9.9.2 of the 
LGIA) work well for the interconnection process and that augmenting the 
process under sections 210, 211 and 212 with these procedures will 
offer clarity to industry stakeholders.
    123. EEI requests that the Commission not be prescriptive with 
respect to a mechanism for interconnection or transmission under this 
rule, and states that under the framework under sections 210 and 211, 
the ICIF owner, the eligible entity seeking interconnection to the ICIF 
and the transmission provider will have flexibility on how to develop 
the terms and conditions of the interconnection to the ICIF and any 
associated transmission delivery service over the ICIF.\207\
---------------------------------------------------------------------------

    \207\ EEI at 16-17.
---------------------------------------------------------------------------

    124. Southern asserts that the ICIF owner, the party seeking 
interconnection to the ICIF, and the transmission provider should have 
the flexibility to develop appropriate arrangements for both 
interconnection and transmission service that meet all parties' needs 
so long as the new interconnection customer is able to interconnect its 
generating facility and acquire transmission service on terms and 
conditions that are similar to other customers. Therefore, Southern 
contends, the Commission should not be prescriptive with respect to the 
mechanism to be used for interconnection or transmission service under 
this rule as long as all affected parties agree to jointly study and 
provide interconnection and transmission service for the new generator 
requesting interconnection, with the new generator's commitment to bear 
the expense of such work. Moreover, Southern notes that the Commission 
would retain oversight over the third-party requests for service over 
the ICIF because it would have an opportunity to review such 
arrangements under FPA sections 210, 211 and 212 and amendments to 
existing interconnection agreements under section 205.\208\
---------------------------------------------------------------------------

    \208\ Southern at 7-8.
---------------------------------------------------------------------------

b. Commission Determination
    125. Commenters appear to be conflating the scope of this Final 
Rule--access to ICIF--with requirements for access to the network/
integrated grid. As such, we decline to prescribe additional 
requirements for access to the network/integrated transmission system 
by entities seeking to interconnect with ICIF or a process for how 
requests to interconnect with ICIF must fit into the transmission 
provider's study processes. We reaffirm the existing policy that third-
party requesters are obligated to obtain service on the transmission 
facilities at or beyond the Point of Change of Ownership as well as 
those facilities beyond the Point of Interconnection with ICIF pursuant 
to the relevant existing OATT and interconnection procedures.\209\ The 
existing policy, under which third-party requesters are obligated to 
obtain service on the transmission facilities beyond the ICIF pursuant 
to the relevant existing OATT and interconnection procedures, will 
maintain the reliability of the network transmission system by ensuring 
that the appropriate studies are conducted. At the same time, the 
Commission's existing policy provides the flexibility for the entity 
seeking interconnection to the ICIF, the ICIF owner, and the public 
utility transmission provider to develop arrangements for the 
interconnection to the ICIF and any associated transmission delivery 
service over the ICIF.
---------------------------------------------------------------------------

    \209\ In addition, an application under section 211 requires 
that the third party seeking transmission first make a good faith 
request for service, complying with 18 CFR 2.20, specifying details 
as to how much capacity is requested and for what period, at least 
60 days before making an application to the Commission for an order 
requiring transmission service. The Commission may grant an 
application under section 211 if the application is in the public 
interest and otherwise meets the requirements under section 212. As 
part of the evaluation of whether the third party seeking 
transmission service made a good faith request for service, the 
Commission may look to see what measures, if any, the third party 
has taken to acquire service on the network transmission system 
beyond the ICIF.
---------------------------------------------------------------------------

    126. In response to AWEA's assertion that failing to require a 
third party seeking service on ICIF to submit an interconnection or 
transmission service request to the transmission provider with whom the 
ICIF are interconnected could lead to gaming opportunities by 
unaffiliated generators, we find that the process under sections 210 
and 211 will limit speculative requests for transmission service from 
the ICIF owner and deter attempts to game the interconnection process. 
We are not persuaded that additional protection is needed at this time. 
The framework under sections 210 and 211 assures that ICIF owners have 
specified procedural rights as set forth in sections 210 and 211 of the 
FPA.
    127. We conclude that the existing policy, that third-party 
requesters are obligated to obtain service on the transmission 
facilities at or beyond the Point of Change of Ownership as well as 
those facilities beyond the Point of Interconnection pursuant to the 
relevant OATT and interconnection procedures, strikes the right balance 
between ensuring reliability, providing flexibility, and protecting the 
rights of the ICIF owner. Accordingly, we decline to further prescribe 
how a third-party seeking service over ICIF pursuant to sections 210 
and 211 also gains access to the networked transmission provider's 
transmission system.
4. Scope of Regulations To Be Modified
a. Commission Proposal
    128. In the NOPR, the Commission proposed to add subsection 
35.28(d)(2) to the Commission's regulations for the purpose of setting 
forth the terms of the blanket OATT waiver, and did not propose to 
revise other regulations.\210\
---------------------------------------------------------------------------

    \210\ NOPR, FERC Stats. & Regs. ] 32,701 at P 35.
---------------------------------------------------------------------------

b. Comments
    129. E.ON argues that section 2.20 of the Commission's regulations, 
which

[[Page 17672]]

implements the section 211 process with respect to making and 
responding to ``good faith'' requests for transmission services, should 
be amended as to its applicability to ICIF because an ICIF owner cannot 
fulfill all of the requirements of a traditional transmission provider 
in that regulation. For example, section 2.20 requires the transmitting 
utility to respond to the requester with a date by which a response 
will be sent to the requester and a statement of any fees associated 
with responding to its request (e.g., initial studies), and if the 
transmitting utility determines it cannot provide the requested service 
with existing capacity, then it must provide studies and data regarding 
constraints and offer an executable agreement wherein the requester 
agrees to reimburse the transmitting utility for all costs of 
performing any studies.\211\ E.ON argues that the Commission should 
clarify that the section 2.20 process requires the third-party 
requester to arrange and pay for all required studies with the ICIF's 
transmission provider, and that the ICIF owner has no obligation to 
arrange and pay for all such studies. E.ON argues that this would 
encompass impacts on the ICIF, interconnecting transmission owner's 
interconnection facilities and transmission facilities, the 
transmission provider's grid and any other affected entities' 
facilities.\212\
---------------------------------------------------------------------------

    \211\ E.ON at 13-14.
    \212\ E.ON at 14.
---------------------------------------------------------------------------

c. Commission Determination
    130. We see no reason to revise section 2.20 of our regulations. We 
do not expect the ICIF owner to study the networked transmission 
system, but only to study the capacity available on its ICIF. Further, 
we believe that section 2.20 is clear that the requesting party pays 
for any studies associated with a request for service over ICIF.\213\ 
Given the nature of the study to determine available capacity on the 
ICIF (typically by comparing the thermal rating of the facilities to 
the existing commitments on the line) and that the ICIF owner should 
have the information necessary to perform such studies, this is likely 
to be a fairly straightforward process that is best performed by the 
ICIF owner. Accordingly, the transparency and timing requirements of 
section 2.20 should not prove overly burdensome for ICIF owners and do 
not require revision.
---------------------------------------------------------------------------

    \213\ See 18 CFR 2.20(c)(1) and 18 CFR 2.20(c)(4)(iii).
---------------------------------------------------------------------------

5. Reliability Standards
a. Comments
    131. ITC requests that the Commission clarify how the proposed 
interconnection process interacts with the requirements of NERC 
Reliability Standard FAC-001-1 (Facility Connection Requirements).\214\ 
This standard applies to all transmission owners and those generator 
owners that have an executed agreement to evaluate the reliability 
impact of interconnecting a third party facility to the generator 
owner's existing facility that is used to interconnect to the 
interconnected transmission systems.
---------------------------------------------------------------------------

    \214\ ITC at 11-12.
---------------------------------------------------------------------------

b. Commission Determination
    132. We clarify that nothing in this Final Rule changes the 
requirement to comply with all Commission-approved mandatory 
Reliability Standards, including FAC-001-1.

D. Safe Harbor

1. Whether and To What Extent There Should be a Safe Harbor Period
a. Commission Proposal
    133. To reduce risks to ICIF owners eligible for the blanket waiver 
discussed above during the critical early years of their projects, the 
Commission proposed a safe harbor period of five years during which 
there would be a rebuttable presumption that: (1) The eligible ICIF 
owner has definitive plans to use its capacity without having to make a 
demonstration through a specific plans and milestones showing; and (2) 
the eligible ICIF owner should not be required to expand its 
facilities. A third-party requester for service on ICIF during the safe 
harbor period could attempt to rebut these presumptions, but it would 
have the burden of proof to show that the owner and/or operator does 
not have definitive plans to use its capacity and the public interest 
under sections 210 and 211 is better served by granting access to the 
third party than by allowing the eligible ICIF owner to reserve its 
ICIF capacity for its own future use.
b. Comments
    134. Many commenters \215\ support the proposed safe harbor period, 
during which a developer of a generator tie line would be presumed to 
have priority rights to the capacity on the generator tie lines it 
funded for five years from the date the line is energized. However, a 
few commenters oppose the safe harbor, and a few others argue it should 
be strengthened.
---------------------------------------------------------------------------

    \215\ AWEA at 5; BHE at 3; BP Wind at 4; E.ON at 10; EEI at 4; 
EPSA at 6; ELCON at 2-3; First Wind at 2; Invenergy at 2; NextEra at 
6; NRG at 3; Recurrent at 3; Sempra at 2; SEIA at 3; Southern at 6; 
and Terra-Gen at 4.
---------------------------------------------------------------------------

    135. APPA and TAPS argue that the NOPR's proposed safe harbor cuts 
back on the relief otherwise available under sections 210, 211, and 
212, and all but ensures absolute foreclosure of competitors from 
access to ICIF.\216\ They explain that in order to rebut the 
presumptions, a requester would have the burden of proof to show that 
the ICIF owner lacks definitive plans to use its capacity, and that the 
public interest under sections 210 and 211 is better served by granting 
access to the third party than by allowing the ICIF owner to reserve 
its ICIF capacity for its own future use. They contend that the 
proposed presumption is effectively irrebuttable because the 
Commission's determinations as to whether the ICIF owner and its 
affiliates have definitive plans have been based on confidential 
demonstrations available only to the ICIF owner and its affiliates. 
They note that the bar on any ``expansion'' during the safe harbor 
period may also foreclose all interconnections, even if the definitive 
plans presumption were somehow surmounted, because while the NOPR does 
not define the term ``expansion,'' modifications to the ICIF owner's 
facilities will be necessary in any interconnection of a competitor's 
generator.
---------------------------------------------------------------------------

    \216\ APPA and TAPS at 14-15.
---------------------------------------------------------------------------

    136. NRECA argues that the Commission should not implement its 
proposed safe harbor creating a rebuttable presumption against 
transmission access for five years in cases where the customer 
requesting service on the ICIF needs it to serve load efficiently.\217\ 
NRECA states that load has little or minimal impact on the available 
capacity of ICIF, and, in many cases may actually increase the 
capability of ICIF with counterflow. NRECA states that the burden of 
proof should be on the ICIF owner to demonstrate that it has specific 
plans to use the transmission capacity in such a way that would prevent 
it from providing access to a load-serving transmission customer, 
adding that the Commission cannot reasonably require a prospective 
customer to prove a negative--that the owner has no such plans--when 
all of the relevant information is in the hands of the owner.\218\ 
NRECA also argues that the Commission has not provided any 
justification for granting a five-year presumption against requiring an 
ICIF

[[Page 17673]]

owner to expand its facilities to accommodate a service request when 
sections 210 and 211 of the FPA provide for potential increases in 
transmission capacity as necessary.\219\
---------------------------------------------------------------------------

    \217\ NRECA at 7.
    \218\ NRECA at 8.
    \219\ NRECA at 8 (citing 16 U.S.C. 824i(a)(1) (``Upon 
application . . . the Commission may issue an order requiring . . . 
such increase in transmission capacity as may be necessary to carry 
out the purposes of any order under subparagraph (A) or (B)''); 16 
U.S.C. 824j(a) (``Any electric utility . . . may apply to the 
Commission for an order under this subsection requiring a 
transmitting utility to provide transmission services (including any 
enlargement of transmission capacity necessary to provide such 
services) to the applicant.'')).
---------------------------------------------------------------------------

    137. On the other hand, AWEA and E.ON support the safe harbor 
concept but urge the Commission to consider removing the rebuttable 
presumption standard. E.ON expresses concern that the safe harbor the 
Commission proposes would not relieve the interconnection customer of 
the regulatory compliance burden, because a third party could still 
initiate the process under sections 210 and 211 during the safe harbor 
period and thus force the ICIF owner to demonstrate specific plans and 
milestones in order to sustain the rebuttable presumption.\220\ 
Further, while the NOPR proposed to rebuttably presume that an ICIF 
owner should not be required to expand the ICIF during the five-year 
safe harbor period, E.ON argues that it is unclear how a rebuttable 
presumption would apply in that context and what might be rebutted. 
E.ON argues that what is clear is that the ICIF owner needs to be 
unencumbered during the safe harbor period, so that it may focus on 
developing and bringing online successive phases of new 
generation.\221\ More generally, AWEA contends that if the generation 
developer dedicates the extra capital and builds ICIF that accommodate 
more capacity than needed for initial generation, it is because the 
generation developer plans to develop more generation in future phases. 
Accordingly, AWEA believes that removing the rebuttable presumption is 
appropriate because it will clarify that the generation developer and 
owner of the ICIF have sole use of the excess capacity, without the 
need to defend the right to that capacity.\222\
---------------------------------------------------------------------------

    \220\ E.ON at 10.
    \221\ E.ON at 11-12.
    \222\ AWEA at 13.
---------------------------------------------------------------------------

c. Commission Determination
    138. We will adopt the safe harbor period, but we will modify it to 
remove the rebuttable presumption that the ICIF owner should not be 
required to expand its facilities. During the safe harbor period, there 
will be a rebuttable presumption that the eligible ICIF owner has 
definitive plans to use its capacity without having to make a 
demonstration through a specific plans and milestones showing. We 
believe this Final Rule will relieve regulatory burdens and unnecessary 
risks from generation developers to encourage the development of new 
generation and efficient interconnection facilities and promote 
competition while ensuring access to transmission on a not unduly 
discriminatory basis. Under this Final Rule, the ICIF owner gains a 
degree of protection through the reduced likelihood that a third-party 
requester could rebut the presumption that an ICIF owner has plans to 
use all of its capacity. However, by making the presumption rebuttable 
rather than absolute, a third-party requester with strong evidence has 
the opportunity to gain access to the ICIF, even during the safe 
harbor.
    139. The proposal in the NOPR that the safe harbor period would 
also contain a rebuttable presumption that the ICIF owner should not 
have to expand its facilities was intended to provide generation 
developers an initial opportunity to establish their generation 
projects while limiting the burden and distraction of studying requests 
to expand its ICIF and potentially expanding those facilities to 
accommodate third party use. However, upon consideration of the 
comments, we believe such a rebuttable presumption could prevent third-
party access without providing a substantial ease of burden for the 
ICIF owner.\223\ We conclude that eliminating this presumption strikes 
an appropriate balance by providing certainty to an ICIF owner over its 
planned capacity without hindering expansion of the facility in 
question when a potential customer requesting that expansion is willing 
to carry the burden associated with that possible expansion.
---------------------------------------------------------------------------

    \223\ We would expect that, in any order under sections 210 and 
211, we would require the potential customer requesting expansion to 
pay all costs to study the request to expand and to take full 
responsibility for the costs to expand and operate the ICIF.
---------------------------------------------------------------------------

    140. With regard to NRECA's argument that load-serving entities' 
use of ICIF has minimal or positive impact on available ICIF capacity, 
we find that such arguments are based on an unlikely scenario that 
assumes away the intended function of the interconnection facilities at 
issue in this Final Rule. By definition, the facilities at issue are 
not part of the integrated transmission system, so it is a slim 
possibility that a load-serving entity would be in a position to make 
use of ICIF to serve load by counterflowing power relative to the 
generation associated with the ICIF. However, a load-serving entity may 
make arguments to support such a scenario in a proceeding under 
sections 210 and 211.
2. Starting Point for the Safe Harbor Period
a. Commission Proposal
    141. In the NOPR, the Commission proposed that the safe harbor 
period begin on the ICIF energization date. Because the energization 
date is not always publicly available, the Commission proposed that any 
eligible ICIF owner seeking to take advantage of the safe harbor must 
file an informational filing with the Commission (requiring no 
Commission action) documenting: (1) The ICIF energization date; (2) 
details sufficient to identify the ICIF at issue, such as location and 
Point of Interconnection; \224\ and (3) identification of the ICIF 
owner. For generators that are already operating as of the effective 
date of the Final Rule, the Commission proposed to allow them to seek 
safe harbor status by filing at the Commission to document the 
information listed above, and that the safe harbor would expire five 
years after the initial energization of their ICIF.\225\
---------------------------------------------------------------------------

    \224\ See supra n. 19.
    \225\ NOPR, FERC Stats. & Regs. ] 32,701 at P 56.
---------------------------------------------------------------------------

b. Comments
    142. E.ON, AWEA, First Wind, and NRG argue that ICIF energization 
is not the proper starting date for the safe harbor period and that the 
safe harbor period should instead begin when the first generating 
facility using the ICIF achieves commercial operation, the commercial 
operation date.\226\ E.ON argues that the point in the interconnection 
process where access to the grid begins is the appropriate starting 
point for the safe harbor period.\227\ E.ON states that, prior to this, 
the interconnecting transmission owner's interconnection facilities and 
network upgrades may not be complete and available for use and that all 
necessary interconnecting transmission owner's network upgrades may not 
be scheduled for completion for years after the ICIF are 
energized.\228\ E.ON adds

[[Page 17674]]

that, if the safe harbor begins on the ICIF energization date, it may 
only encourage energization to be delayed as long as possible in order 
to have as long a safe harbor period as is needed to support future 
phase's priority use of the ICIF.\229\
---------------------------------------------------------------------------

    \226\ The Commercial Operation Date is defined in the LGIP and 
LGIA as the date on which the Generating Facility commences 
generating electricity for sale, excluding electricity generated 
during on-site test operations and commissioning of the Generating 
Facility, as agreed to by the Parties pursuant to Appendix E to the 
Standard Large Generator Interconnection Agreement.
    \227\ E.ON at 8.
    \228\ E.ON at 9.
    \229\ E.ON at 9.
---------------------------------------------------------------------------

    143. AWEA and First Wind explain that for many wind projects the 
ICIF may be energized well before commercial operation of the wind 
project begins in order to provide backfeed power to the construction 
site.\230\ Accordingly, AWEA contends that the ``energization date'' 
would significantly limit the safe harbor period for phased development 
projects.\231\ First Wind and NRG argues that the commercial operation 
date not only provides a more appropriate starting date, but it also is 
a date that is routinely documented for other purposes (e.g., under 
Appendix E of the LGIA, the customer is required to provide written 
documentation of the commercial operation date, and power purchase 
agreements will have the commercial operation date.\232\ NRG also 
argues that the commercial operation date is universally 
understandable.\233\
---------------------------------------------------------------------------

    \230\ First Wind at 16.
    \231\ AWEA at 15-16.
    \232\ First Wind at 16 and NRG at 4.
    \233\ NRG at 4.
---------------------------------------------------------------------------

    144. NRG and Linden argue that the Commission should decline to 
adopt the requirement that owners of existing and new ICIFs submit an 
informational filing to get the benefit of the safe harbor provision. 
NRG argues that the Commission is already generally aware of the 
commercial operation date for interconnection facilities through 
market-based rate, exempt wholesale generator, and interconnection 
agreement filings. NRG further argues that the commercial operation 
date is an established and verifiable date, and interconnection 
facility owners are often required to provide notice of the commercial 
operation date to various parties under different project agreements. 
Additionally, third-parties that seek to interconnect can contact the 
ICIF owner directly and ask for the same information detailed in the 
informational filing, and ICIF owners can be required to provide the 
commercial operation date upon request. NRG argues that if there is any 
dispute regarding the commercial operation date, the third party can go 
to the Commission and seek clarification of the commercial operation 
date.\234\ Linden argues that the informational filing proposal would 
simply require numerous public utilities to make filings that will 
never be needed until and unless an entity seeks service over the 
ICIF.\235\ It argues that no policy would be served by requiring public 
utilities to preserve rights through an otherwise unnecessary 
informational filing.\236\
---------------------------------------------------------------------------

    \234\ NRG at 5.
    \235\ Linden at 9-10.
    \236\ Linden at 9-10.
---------------------------------------------------------------------------

    145. MISO supports the Commission's proposal to require 
interconnection customers to submit their ICIF energization date to the 
Commission. Currently, MISO interconnection customers submit their test 
dates, which are very close to the energization date, to MISO's 
resource integration group as part of the Generator Interconnection 
Agreement milestones.\237\
---------------------------------------------------------------------------

    \237\ MISO at 6.
---------------------------------------------------------------------------

c. Commission Determination
    146. We will modify the proposal and will use the commercial 
operation date instead of the energization date. We find commenters' 
argument convincing that the commercial operation date is the 
preferable starting point for the safe harbor period. The ICIF may be 
energized to provide needed backfeed power for construction equipment 
well before the first generator is ready to produce test power, thus 
shortening the safe harbor period and undermining the goal to give the 
generation project sufficient time to develop. Using the energization 
date would likely disadvantage certain developers who must energize 
their ICIF early in the construction process because of their 
particular circumstances, while other developers are not required to do 
so. Although commenters argue that the commercial operation date is 
frequently documented in other contexts, we are not aware of a publicly 
available source that would consistently provide the commercial 
operation date for ICIF. Commenters' suggestion that potential 
customers request information from the ICIF owner or seek relief from 
the Commission creates an unnecessary barrier to potential customers 
and is inconsistent with the transparency we require for other elements 
of transmission and interconnection service. Accordingly, we will 
require, consistent with the NOPR proposal, that any eligible ICIF 
owner seeking to take advantage of the safe harbor must file an 
informational filing with the Commission (requiring no Commission 
action) stating: (1) The ICIF commercial operation date, as we define 
it below; (2) details sufficient to identify the ICIF at issue, such as 
location and Point of Interconnection; and (3) identification of the 
ICIF owner seeking to take advantage of the safe harbor.\238\ For ICIF 
that are already in commercial operation as of the effective date of 
the Final Rule, the ICIF owner may seek safe harbor status by filing at 
the Commission to provide the information listed above, and the safe 
harbor would expire five years after the commercial operation date of 
its ICIF. ICIF owners making such an informational filing should file 
under the following docket, Docket No. AD15-9-000, so that any 
interested third party will be able to easily identify the relevant 
filing and determine when a safe harbor is applicable. We consider the 
commercial operation date of ICIF to be the date those facilities are 
first used to transmit energy for sale, excluding use for on-site 
testing and commissioning of the generating facility.
---------------------------------------------------------------------------

    \238\ We do not intend to issue a public notice, accept 
comments, or issue an order on the informational filings.
---------------------------------------------------------------------------

3. Length of the Safe Harbor Period
a. Commission Proposal
    147. In the NOPR, the Commission proposed a safe harbor period of 
five years during which there would be a rebuttable presumption that: 
(1) The eligible ICIF owner has definitive plans to use its capacity 
without having to make a demonstration through a specific plans and 
milestones showing; and (2) the eligible ICIF owner should not be 
required to expand its facilities.\239\
---------------------------------------------------------------------------

    \239\ NOPR, FERC Stats. & Regs. ] 32,701 at P 54.
---------------------------------------------------------------------------

b. Comments
    148. Several commenters argue for a seven-year safe harbor 
period.\240\ EEI argues that a presumption of five years from the date 
the line is energized is only minimally sufficient and providing an 
additional two years of safe harbor protection would allow the eligible 
ICIF owner to focus on building generation and achieving commercial 
operation during the safe harbor period.\241\ NextEra argues that a 
safe harbor of five years effectively presumes that the second phase 
will be completed without any delays and that the developer will not 
pursue development in additional phases. NextEra argues that a seven-
year safe harbor would more fully achieve the Commission's stated 
goals.\242\ EPSA and NRG agree that a seven-year period would better 
support ICIF project development, and argue that a seven-year time 
period is supported by section 3.3.1 of the pro forma LGIP under which 
the expected in-service date of a new

[[Page 17675]]

generating facility or increase in capacity of an existing facility 
should not be more than seven years from the date the interconnection 
request is received by the transmission provider.\243\ SEIA states that 
a seven-year safe harbor period would ensure adequate time for 
financing and construction of additional generation capacity. SEIA 
asserts that analysis of the dozen largest solar projects expected to 
be online by 2016 reveals the median time from development to 
commercial operation is nearly six years. A seven-year safe harbor will 
ensure that most, if not all, future phases of a solar power plant can 
be constructed within the safe harbor timeframe.\244\
---------------------------------------------------------------------------

    \240\ EEI at 14; NextEra at 17; EPSA at 6-7; NRG at 3-4; and 
SEIA at 4.
    \241\ EEI at 14.
    \242\ NextEra at 17.
    \243\ EPSA at 6-7 and NRG at 3-4.
    \244\ SEIA at 4.
---------------------------------------------------------------------------

    149. Some commenters argue for a ten-year safe harbor period. BHE 
also agrees that the proposed five-year duration is impractically short 
given the commercial and permitting realities generation developers 
face and, argues the safe harbor should be for ten years from the date 
that the ICIF is energized.\245\ AWEA argues that the proposed five-
year period should be extended to ten years in order to reduce the 
risks encountered by generation developers developing phased generation 
projects. AWEA explains that often times a wind generation project may 
be planned in three or four phases, which could not reasonably be 
expected to reach completion in a five-year period. According to AWEA, 
a ten-year safe harbor period would provide developers the appropriate 
amount of time and reasonable incentive needed to develop the ICIF 
necessary for the development of new, cost-effective wind energy 
resources.\246\
---------------------------------------------------------------------------

    \245\ BHE at 12-13.
    \246\ AWEA at 15.
---------------------------------------------------------------------------

    150. As discussed above, APPA, TAPS, and NRECA argue that the 
Commission should not implement a safe harbor period of any 
duration.\247\ Additionally, APPA and TAPS argue that the monopoly on 
ICIF will extend for longer than the five years of the safe harbor 
period.\248\ They argue that in order to avoid the safe harbor barrier, 
a requester must not file its application under sections 210 and 211 
until after the five-year period. They point out that it will take some 
time for the Commission to issue a final order requiring 
interconnection and transmission service, and additional studies or 
modifications may be required even after a final order. Therefore, they 
contend, the proposed safe harbor effectively grants to the ICIF owner 
and its affiliates a monopoly over use of its ICIF for six years at a 
minimum. They argue that such a result cannot be harmonized with the 
Commission's obligations to remedy undue discrimination in transmission 
service and its reliance on competitive markets to ensure just and 
reasonable wholesale prices.
---------------------------------------------------------------------------

    \247\ See supra PP 135-136.
    \248\ APPA and TAPS at 15-16.
---------------------------------------------------------------------------

c. Commission Determination
    151. We adopt in this Final Rule the five-year safe harbor period. 
It represents a balancing of interests. On the one hand, we want to 
relieve regulatory burdens and unnecessary risks from generation 
developers to encourage the development of new generation and promote 
competition. On the other hand, we want to ensure not unduly 
discriminatory access to transmission which also promotes competition. 
We find that using the commercial operation date as the starting point 
for the safe harbor period eliminates some of the concerns regarding 
sufficient time for safe harbor protection. As such, we decline to 
increase the safe harbor period from five years to either seven or ten 
years.
    152. We disagree with APPA and TAPS that the safe harbor protection 
is effectively a minimum of six years instead of five. That is, the 
rebuttable presumption that the ICIF owner has definitive plans to use 
its capacity, without having to make a demonstration through a specific 
plans and milestones showing, ends five years after the commercial 
operation date. The fact that it takes time to get service under 
sections 210 and 211 does not change the fact that, at the end of the 
five year safe harbor period, if there were to be an application under 
sections 210 and 211, the ICIF owner would need to show it has plans to 
use any remaining capacity on the ICIF and is making progress to 
completing those plans. In any event, we note that any request for 
interconnection or transmission service takes time to prepare and 
process, whether it is addressed to an ICIF owner pursuant to sections 
210 and 211 or a public utility under its OATT.

E. Affiliate Concerns

1. Commission Proposal
    153. In the NOPR,\249\ the Commission sought comments on whether to 
extend the proposed reforms to generators whose ownership or operation 
of transmission facilities is limited to ICIF, but who are affiliated 
with a public utility transmission provider and are within or adjacent 
to the public utility transmission provider's footprint (ICIF-Owning 
Affiliates).\250\
---------------------------------------------------------------------------

    \249\ NOPR, FERC Stats. & Regs. ] 32,701 at P 59.
    \250\ For generators owned by a public utility transmission 
provider within its footprint, transmission service on the 
generator's interconnection facilities has generally been governed 
by the public utility transmission provider's OATT. See Puget Sound 
Energy, Inc., 133 FERC ] 61,160 (2010), reh'g denied 139 FERC ] 
61,241 (2012).
---------------------------------------------------------------------------

2. Comments
    154. Several commenters argue that ICIF-Owning Affiliates should be 
eligible for the blanket waiver.\251\ Commenters assert that excluding 
ICIF-Owning Affiliates from the proposed waivers would bestow an unfair 
advantage on their competitors without providing any regulatory 
benefits.\252\ Southern emphasizes that ICIF-Owning Affiliates function 
separately from the public utility transmission provider and are 
independent generators.\253\ BHE argues that the same reasons that 
warrant the Commission replacing its current case-by-case approach to 
granting waivers apply irrespective of corporate structure.\254\
---------------------------------------------------------------------------

    \251\ Southern at 4-5; EEI at 11-13; BHE at 8-11; Sempra at 6-9; 
BP Wind 7-10; First Wind at 10; AWEA at 16; and NextEra 18-20.
    \252\ EEI at 9; BHE at 8-10; and Southern at 4-5.
    \253\ Southern at 4-5.
    \254\ BHE at 8-10.
---------------------------------------------------------------------------

    155. BP Wind, Sempra, and First Wind take issue with the 
Commission's stated concern in the NOPR that the generator's 
vertically-integrated utility affiliate, if granted the blanket waiver, 
may take steps to structure its development projects to limit or deny 
access to transmission facilities. BP Wind emphasizes that there are 
various reasons why a company would place ownership of generation and 
associated generation interconnection facilities into a separate legal 
entity that are not in any way for the purpose of limiting access to 
generator interconnection facilities.\255\ First Wind argues that, as a 
practical matter, a transmission owner will not attempt to push 
facilities that are not properly defined as ICIF into the ICIF 
classification in order to remove them from availability under their 
OATTs or to secure priority rights, because it would violate the OATT 
and shift costs to the generation affiliate that would otherwise be 
recovered from OATT customers.\256\ Further, Sempra argues that the 
Commission has for years granted OATT waivers to ICIF-owning generators 
interconnected to their affiliated utility systems because the 
facilities in question are sole-use, limited and discrete, radial in 
nature,

[[Page 17676]]

and not part of an integrated transmission network.\257\
---------------------------------------------------------------------------

    \255\ BP Wind at 8-9.
    \256\ First Wind at 10.
    \257\ Sempra at 8 (citing the TDM Rehearing Request at n. 20, 
pointing to the then-significant number of OATT waivers granted to 
such affiliated entities as of 2003).
---------------------------------------------------------------------------

    156. Several commenters argue that there are sufficient protections 
already in place to deter such behavior. Sempra notes that the 
Commission-jurisdictional interconnection process and the Commission's 
Standards of Conduct provide additional protections to affiliated and 
unaffiliated generators alike, and that further protection is provided 
when the interconnection process is administered by an RTO or ISO.\258\ 
Sempra also states that if the Commission is made aware that a 
vertically-integrated utility has structured its generation and 
interconnection facilities development in such a way that 
inappropriately limits access to those facilities, the Commission 
could, among other things, revoke the blanket waiver and safe harbor 
treatment for those facilities.\259\ Further, BHE asserts that 
affiliate restrictions and enforcement tools all function to achieve 
non-discriminatory access over ICIF for third parties and that the 
procedures under sections 210 and 211 of the FPA provide an extra level 
of protection.\260\ Southern agrees that the Commission's concerns with 
respect to anti-competitive behavior by a transmission provider should 
be addressed by the Commission's open access requirements, the 
Standards of Conduct, and the code of conduct.\261\ BHE contends that 
the Commission should extend eligibility for the proposed blanket 
waiver not only to affiliates of the transmission provider, but also to 
the wholesale generation function of a vertically-integrated utility, 
irrespective of whether the ICIF is physically located within or 
adjacent to the affiliated public utility transmission provider's 
footprint.\262\
---------------------------------------------------------------------------

    \258\ Sempra at 8.
    \259\ Sempra at 8-9.
    \260\ BHE at 10.
    \261\ Southern at 5.
    \262\ BHE at 2, 10-11.
---------------------------------------------------------------------------

    157. BP Wind and AWEA argue that the Commission should at least 
extend eligibility of the blanket waiver to ICIF-owning Affiliates 
where they are geographically separate from the public utility 
transmission provider's footprint.\263\ Southern, BP Wind, and NextEra 
question how ICIF-owning Affiliates will be treated if they do not 
receive the blanket waiver. Southern argues that a wholesale generator 
affiliate that is not a part of a vertically-integrated utility's OATT, 
and whose ownership/operation of transmission facilities is limited to 
ICIF, should not be required to be added to the public utility's OATT 
because this could shift the costs of the ICIF to native load customers 
of the transmission provider and create other complexities for the 
transmission provider (e.g., compliance with Standards of 
Conduct).\264\
---------------------------------------------------------------------------

    \263\ BP Wind at 7-8 and AWEA at 16.
    \264\ Southern at 5.
---------------------------------------------------------------------------

    158. BP Wind points out that excluding ICIF-owning Affiliates from 
the blanket waiver could disadvantage jointly owned projects, as 
unaffiliated generator owners would effectively lose the value 
associated with their blanket waiver if they share ownership in a 
common set of ICIF with a generator that is affiliated with a public 
utility transmission provider.\265\ Similarly, if the Commission 
declines to extend the blanket waiver to ICIF-owning Affiliates, 
NextEra questions: (1) How ICIF-owning Affiliates could request the 
waiver on a case-by-case basis; (2) whether, without a waiver, each 
ICIF-owning Affiliate is required to file its own OATT, resulting in 
holding companies with numerous OATTs on file, even for facilities 
located in the affiliated public utility transmission provider's 
footprint; and (3) whether the ICIF-owning Affiliates have to transfer 
ownership or control of their facilities to the affiliated public 
utility transmission provider.\266\ In the event the Commission does 
extend the blanket waiver to ICIF-owning Affiliates, BHE asks the 
Commission to confirm that, in instances where a third party is granted 
a request for service under sections 210 and 211 over an incumbent 
utility generator's ICIF, that incumbent utility generator can fulfill 
its access responsibility by transferring operational control and 
responsibility for the relevant ICIF to its transmission provider to 
ensure non-discriminatory access over the ICIF.\267\ Additionally, BHE 
asks the Commission to clarify its expectations, in this scenario, as 
to whether the ICIF should be treated by the transmission provider as 
Transmission Provider's Interconnection Facilities and managed under 
Article 9.9.2 of the Commission's pro forma LGIA.\268\
---------------------------------------------------------------------------

    \265\ BP Wind at 8-9.
    \266\ NextEra at 18-20.
    \267\ BHE at 17-18.
    \268\ BHE at 17-18.
---------------------------------------------------------------------------

    159. Linden states that in the event that the Commission limits the 
applicability of the blanket waiver to non-affiliates, it requests that 
the Commission clarify that any such limitation would not apply to an 
affiliate of a merchant transmission provider.\269\
---------------------------------------------------------------------------

    \269\ Linden at 8-9.
---------------------------------------------------------------------------

    160. Southern and BHE also argue that the Commission should extend 
the safe harbor protection to ICIF-owning Affiliates because such 
generators are similarly situated to and operate the same as other 
wholesale generators. Southern believes that all wholesale generators 
and ICIF owners would benefit from the proposed safe harbor 
period.\270\ BHE requests that the Commission also extend eligibility 
for the safe harbor presumption to incumbent utility generators.\271\ 
BHE asserts that wholesale generator ICIF owners share the same 
commercial risks of having their specific generation expansion plans 
pre-empted by a competing unaffiliated generation developer and burden 
of pursuing a declaratory order from the Commission in order to reserve 
capacity for their future plans.\272\ According to BHE, any concerns 
with extending the safe harbor presumption beyond non-affiliates are 
reasonably mitigated without limiting the presumption to non-affiliated 
ICIF owners. BHE explains that under Commission rules, all generators 
seeking transmission interconnection and/or transmission service are to 
be treated comparably. BHE further notes that employees of a public 
utility with captive customers and its affiliates with market-based 
rate authority are to operate separately to the maximum extent 
practical.\273\ BHE also contends that it would be unduly 
discriminatory to deny incumbent utility generator and ICIF-owning 
Affiliates identical access to the safe harbor presumption, given that 
existing policy is equally burdensome, and creates the same regulatory 
uncertainty with respect to priority rights for all ICIF owners.\274\
---------------------------------------------------------------------------

    \270\ Southern at 6.
    \271\ BHE at 13.
    \272\ BHE at 14.
    \273\ BHE at 15.
    \274\ BHE at 16.
---------------------------------------------------------------------------

    161. BHE argues that, at a minimum, eligibility for the proposed 
safe harbor presumption should be extended to ICIF-owning 
Affiliates.\275\ BHE also argues that the safe harbor presumption 
should be applied to ICIF-owning Affiliates irrespective of whether the 
ICIF is physically located within or adjacent to the affiliated public 
utility transmission provider's footprint.\276\
---------------------------------------------------------------------------

    \275\ BHE at 3-4.
    \276\ BHE at 3-4.
---------------------------------------------------------------------------

    162. In contrast, some commenters argue that the Commission should 
not extend the proposed reforms to entities that are affiliated with a 
public utility

[[Page 17677]]

transmission provider.\277\ APPA and TAPS contend that the NOPR's 
treatment of affiliates is inconsistent and contrary to the 
Commission's market-based rate policies which have been crafted over 
decades to protect customers from the use of control over transmission 
facilities to erect barriers to competition in favor of the owner's 
corporate family.\278\ They state that, while the NOPR does not 
consider the ICIF owner's affiliates in defining eligibility for the 
blanket waiver or safe harbor, potentially even if the ICIF owner's 
affiliate is a transmission provider, the Commission proposes to 
continue its policy of allowing the ICIF owner to point to its 
affiliate's planned usage to demonstrate definitive plans to use any 
remaining ICIF capacity after the safe harbor period.\279\ APPA and 
TAPS argue that by ignoring affiliates in determining eligibility for 
waiver or safe harbor while allowing ICIF owners to use those same 
affiliates to fend off third-party access, the NOPR would incent 
utilities to organize their corporate structures to maximize their 
opportunities to block third-party competitive generation.
---------------------------------------------------------------------------

    \277\ APPA and TAPS at 16-17 and NRECA at 9-10.
    \278\ APPA and TAPS at 16-17.
    \279\ APPA and TAPS at 17 (citing to NOPR, FERC Stats. & Regs. ] 
32,701 proposed section 35.28(d)(2)(ii)(A)).
---------------------------------------------------------------------------

    163. APPA and TAPS also contend that transmission providers are 
already ``in the business of providing transmission service'' and are 
subject to Standards of Conduct, and thus face no significant 
additional burden from the requirements the Commission proposes to 
waive. NRECA adds that such entities should not be granted privileges 
that are intended for generators that are completely independent of 
transmission providers. They argue that if extended to affiliates of 
transmission providers, the proposed reforms would incent transmission 
providers to structure generation and ICIF development to avoid open 
access and transmission planning obligations.\280\
---------------------------------------------------------------------------

    \280\ APPA and TAPS at 18 and NRECA at 9-10.
---------------------------------------------------------------------------

    164. APPA and TAPS contend that any ICIF policy changes should 
exclude affiliates of transmission providers from eligibility for the 
blanket waiver or safe harbor status at least within the transmission 
provider's planning region.\281\ They argue that requiring transmission 
provider-affiliated ICIF owners within the transmission provider's 
planning region to utilize the transmission provider's existing OATT 
processes, rather than artificially walling-off such ICIF from access 
and transmission planning and expansion obligations, is necessary to 
prevent the transmission provider from evading its affirmative 
obligation to work within its transmission planning region to create a 
regional transmission plan. They assert that, at an absolute minimum, 
ICIF owners affiliated with transmission providers should be excluded 
from the blanket waiver and safe harbor as to any ICIF within the 
transmission provider's footprint or an adjacent system.\282\
---------------------------------------------------------------------------

    \281\ APPA and TAPS at 25-27.
    \282\ APPA and TAPS at 26-27.
---------------------------------------------------------------------------

3. Commission Determination
    165. We conclude that the blanket waiver and safe harbor should 
apply to a public utility transmission provider's affiliates whose 
ownership/operation of transmission facilities is limited to ICIF, 
regardless of geographic location. An ICIF-Owning Affiliate, as we use 
the term here, is a corporate entity that is separate from, and 
functions independently from, an affiliated public utility transmission 
provider that owns, controls, or operates non-ICIF transmission 
facilities. As such, the ICIF-Owning Affiliate is comparable to other 
independent generation companies that own ICIF within the public 
utility transmission provider's footprint. Like other independent 
generation companies, an ICIF-Owning Affiliate faces the risk and 
potential burden of having to file an OATT if it receives a third-party 
request for service. The undue discrimination provisions of section 205 
and section 206 and the Commission's existing Standards of Conduct 
rules should prevent undue discrimination and ensure that the 
transmission provider's open access and transmission planning 
obligations are not circumvented. However, we decline to extend the 
blanket waiver to ICIF that are controlled or operated by the 
generation units of vertically-integrated public utilities (Generation 
Functions), as requested by BHE.
    166. We disagree with APPA and TAPS that extending the reforms 
adopted herein to ICIF-Owning Affiliates would constitute a departure 
from the Commission's requirements that transmission service be not 
unduly discriminatory. Sections 205 and 206 of the FPA continue to 
govern the behavior of the ICIF-Owning Affiliates and public utility 
transmission providers after the reforms adopted herein become 
effective. Therefore, ICIF-Owning Affiliates and public utility 
transmission providers are prohibited from engaging in unduly 
preferential or unduly discriminatory behavior. In addition, the 
independent functioning and transparency requirements of the Standards 
of Conduct under Part 358 of the Commission's regulations impose 
specific requirements governing the relationship between the ICIF-
Owning Affiliates and the transmission provider.\283\ While a waiver of 
the Standards of Conduct for the ICIF-Owning Affiliate would relieve it 
of the obligation to comply with the Standards of Conduct that require 
separation of transmission and marketing functions, that waiver has no 
effect on the transmission provider's obligation to comply with the 
Standards of Conduct consistent with Part 358 of the Commission's 
regulations.\284\ The Standards of Conduct also require, among other 
things, a transmission provider to treat all transmission customers, 
affiliated and non-affiliated, on a not unduly discriminatory basis, 
and prohibits the transmission provider from making or granting any 
undue preference or advantage to any person with respect to the 
transmission or sale of electric energy.\285\
---------------------------------------------------------------------------

    \283\ 18 CFR pt. 358.
    \284\ ICIF Generator Affiliates are typically making sales for 
resale in interstate commerce and meet the Commission's definition 
of marketing affiliates. See 18 CFR 358.3(a) and (c).
    \285\ 18 CFR 358.4.
---------------------------------------------------------------------------

    167. We disagree with APPA and TAPS' claim that granting the waiver 
to ICIF-Owning Affiliates would be inconsistent and contrary to the 
Commission's market-based rate policies by failing to consider the 
ICIF-Owning Affiliates in defining eligibility for market-based rates. 
The Commission considers the ICIF-Owning Affiliates when granting 
market-based rate authority. The market-based rate requirement under 
section 35.37(d) requires a seller that owns, operates, or controls 
transmission facilities, or whose affiliates own, operate, or control 
transmission facilities, to have on file with the Commission an OATT as 
described in section 35.28. However, the Commission allows sellers to 
rely on Commission-granted OATT waivers to satisfy the vertical market 
power part of

[[Page 17678]]

the requirement.\286\ As noted above,\287\ the waiver in section 
35.28(d)(2) is an additional way in which to satisfy the vertical 
market power requirements for transmission. Market-based rate authority 
is conditioned on compliance with the Affiliate Restrictions in section 
35.39 of the Commission's regulations. Like the Standards of Conduct, 
the Affiliate Restrictions include independent functioning requirements 
as well as information sharing prohibitions.\288\ Thus, with the 
statutory prohibitions and implementing regulations, public utility 
transmission providers are not permitted to organize their corporate 
structures in a way that would block third-party competitive 
generation.
---------------------------------------------------------------------------

    \286\ Market-Based Rates for Wholesale Sales of Electric Energy, 
Capacity and Ancillary Services by Public Utilities, Order No. 697, 
72 FR 39904 (July 20, 2007), FERC Stats. & Regs. ] 31,252 at P 408, 
clarified, 121 FERC ] 61,260 (2007), clarified, 124 FERC ] 61,055, 
order on reh'g, Order No. 697-A, 73 FR 25832 (May 7, 2008), FERC 
Stats. & Regs. ] 31,268, order on reh'g, Order No. 697-B, 73 FR 
79610 (Dec. 30, 2008), FERC Stats. & Regs. ] 31,285 (2008), order on 
reh'g, Order No. 697-C, 74 FR 30924 (June 29, 2009), FERC Stats. & 
Regs. ] 31,291 (2009), order on reh'g, Order No. 697-D, 75 FR 14342 
(Mar. 25, 2010), FERC Stats. & Regs. ] 31,305 (2010), aff'd sub nom. 
Mont. Consumer Counsel v. FERC, 659 F.3d 910 (9th Cir. 2011), cert. 
denied, 133 S. Ct. 26 (2012).
    \287\ See supra P 57.
    \288\ See 18 CFR 35.39(c) and Sec.  35.39(d).
---------------------------------------------------------------------------

    168. Moreover, we note that entities may file a complaint under 
section 206 with the Commission if they believe discrimination is 
occurring. Also, in determining whether a third party has rebutted the 
presumption under this Final Rule that an ICIF owner has definitive 
plans to use excess capacity on the ICIF during the safe harbor period, 
the affiliate relationship between the ICIF owner and a public utility 
transmission provider may be a factor in that determination. Finally, 
as a backstop, we note that the Commission possesses ample statutory 
remedies to address violations of the applicable regulations and 
statutes. As noted by Sempra, if the Commission became aware that a 
public utility transmission provider and an ICIF-Owning Affiliate 
structured their transmission, generation, and interconnection 
facilities development in such a way that inappropriately limits access 
to those facilities, the Commission could, among other things, revoke 
the blanket waiver and safe harbor treatment for the ICIF-Owning 
Affiliate. Accordingly, the Commission's existing rules, in concert 
with other tools available to hold entities accountable, are sufficient 
to ensure comparable treatment of affiliates and non-affiliates, and 
enforce the Commission's requirements prohibiting undue discrimination 
without the provisions waived through this Final Rule.
    169. We find that it is not appropriate to grant the blanket waiver 
to Generation Functions. The public utility transmission provider has 
certain rights and obligations, one of which is to administer the 
transmission grid pursuant to its existing OATT. Where a Generation 
Function of the public utility transmission provider is an ICIF owner, 
we find it appropriate, in the event of a third-party request, for the 
request to be processed pursuant to its affiliated public utility 
transmission provider's OATT.

F. Miscellaneous

1. Treatment of Line Losses on ICIF
a. Comments
    170. NRG requests that the Commission explicitly state that all 
transmission line losses associated with a third party gaining access 
to an incumbent owner's interconnection facility be borne solely by the 
third party. NRG argues that as more capacity is transmitted on these 
interconnection facilities and the excess capacity on these facilities 
diminishes, line losses will continue to increase to the detriment of 
the incumbent interconnection facility owner.\289\
---------------------------------------------------------------------------

    \289\ NRG at 6.
---------------------------------------------------------------------------

b. Commission Determination
    171. We find the NRG's argument to be beyond the scope of the 
proceeding. Treatment of line losses on ICIF should be negotiated 
between the parties using the ICIF.
2. Applicability of the Commission's ``Prior Notice'' Policy
a. Comments
    172. First Wind and Invenergy ask the Commission to confirm that 
its Prior Notice policy \290\ also applies to requests for ICIF access. 
In Prior Notice, the Commission, among other things, found that 
transmission study contracts and charges, while jurisdictional, do not 
have to be filed unless they are the subject of a complaint filed by 
the transmission requester under section 206 of the Federal Power Act 
alleging that the rates charged for a transmission feasibility study 
are unjust, unreasonable or unduly discriminatory, or preferential. 
First Wind and Invenergy contend that the Commission should confirm 
that this Prior Notice policy applies not only to transmission requests 
under section 211, but also to interconnection requests under section 
210 and to any requests for ICIF access.\291\
---------------------------------------------------------------------------

    \290\ Prior Notice and Filing Requirements Under Part II of the 
Federal Power Act 64 FERC ] 61,139, clarified, 65 FERC ] 61,081, at 
61,508 (1993) (Prior Notice).
    \291\ First Wind at 12-14 and Invenergy at 12-13.
---------------------------------------------------------------------------

b. Commission Determination
    173. We decline to address the Commission's filing requirements as 
they are beyond the scope of the proceeding.
3. Technical Aspects of Interconnection
a. Comments
    174. BHE states that third-party access to an ICIF should only be 
allowed at a point past the high side (transmission side) of a 
collector bus, and not on the low side (generator side) of the 
collector bus. It argues that such access to the generator side of the 
collector introduces technical system protection and control 
complexities that would be impractical to accommodate, requiring an 
inordinate amount of coordination between interconnecting generation 
projects and may even compromise the reliability of the interconnecting 
facilities.\292\
---------------------------------------------------------------------------

    \292\ BHE at 19.
---------------------------------------------------------------------------

b. Commission Determination
    175. We find BHE's argument to be beyond the scope of the 
proceeding. Disputes regarding technical requirements of the reliable 
interconnection of third-party generators should be addressed in 
particular proceedings under sections 210 and 211.
4. Implementation
    176. For those entities that satisfy the eligibility requirements 
set forth in this Final Rule, the blanket waiver will be effective as 
of the effective date of this Final Rule. For those entities that must 
file a statement of compliance with section 210 of the FPA in order to 
achieve eligibility, the blanket waiver will be effective as of the 
latter of the effective date of this Final Rule or the date the 
statement of compliance is filed. If an entity has a case-specific 
request for waiver of OATT requirements pending as of the date that the 
entity becomes eligible for the blanket waiver, the blanket waiver will 
apply as of that date, and the entity should file to withdraw the 
waiver request to the extent it has been rendered moot by the blanket 
waiver. As discussed in section IV.B.7 above, an entity that has 
already been issued a waiver of the same requirements waived by the 
blanket waiver and is eligible for

[[Page 17679]]

the blanket waiver will be deemed to be operating under the blanket 
waiver without further filings necessary with respect to the issued 
waiver. However, as discussed in section IV.B.8 above, the blanket 
waiver will have no automatic impact on existing OATTs that govern 
service requests over ICIF, although the Commission will consider a 
request to withdraw an OATT on a case-by-case basis if no third parties 
are taking service under it. With respect to the informational 
statement regarding the commercial operation date of the ICIF discussed 
in section IV.D.2 above, we note that such statement need only be filed 
if the ICIF owner seeks to take advantage of the five-year safe harbor 
period.

V. Information Collection Statement

    177. The Office of Management and Budget (OMB) regulations require 
approval of certain information collection and data retention 
requirements imposed by agency rules.\293\ Upon approval of a 
collection(s) of information, OMB will assign an OMB control number and 
an expiration date. Respondents subject to the filing requirements of a 
rule will not be penalized for failing to respond to these collections 
of information unless the collections of information display a valid 
OMB control number.
---------------------------------------------------------------------------

    \293\ 5 CFR 1320.11(b) (2013).
---------------------------------------------------------------------------

    178. The Commission is submitting the proposed modifications to its 
information collections to OMB for review and approval in accordance 
with section 3507(d) of the Paperwork Reduction Act of 1995.\294\ In 
the NOPR, the Commission solicited comments on the Commission's need 
for this information, whether the information will have practical 
utility, the accuracy of the burden estimates, ways to enhance the 
quality, utility, and clarity of the information to be collected or 
retained, and any suggested methods for minimizing respondents' burden, 
including the use of automated information techniques. The Commission 
included a table that listed the estimated public reporting burdens for 
the proposed reporting requirements, as well as a projection of the 
costs of compliance for the reporting requirements.
---------------------------------------------------------------------------

    \294\ 44 U.S.C. 3507(d) (2012).
---------------------------------------------------------------------------

    179. The Commission did not receive any comments specifically 
addressing the burden estimates provided in the NOPR. However, the 
Commission has made changes to its proposal that are adopted in this 
Final Rule.
    180. First, the regulations adopted in the Final Rule give a 
blanket waiver of OATT, OASIS, and Standards of Conduct filing 
requirements, to all ICIF owners, including those that do not sell 
electric energy. Under the Final Rule, an ICIF owner that does not sell 
electric energy is required to make an informational filing stating 
that it commits to comply with and be bound by the obligations and 
procedures applicable to electric utilities under section 210 of the 
FPA in order to receive the blanket waiver. We have increased the 
burden estimate in the table below to reflect this filing.
    181. Second, the Commission revised the beginning of the safe 
harbor period from the ICIF energization date to the ICIF commercial 
operation date. The Commission recognizes that most ICIF owners will 
likely make a brief notification filing documenting: (1) The ICIF 
commercial operation date; (2) details sufficient to identify the ICIF 
at issue, such as location and Point of Interconnection; and (3) 
identification of the ICIF owner. However, because the filing is 
similar to that proposed in the NOPR, we are not modifying the 
estimated public reporting burdens for this proposed reporting 
requirement in the table below. The Commission believes that the 
revised burden estimates below are representatives of the average 
burden on respondents.

[[Page 17680]]



                           RM14-11 (Open Access and Priority Rights on Interconnection Customer's Interconnection Facilities)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Average
                                                                                Annual  number                   burden and   Total  annual    Average
                                                                    Number of    of  responses   Total  number    cost per    burden  hours    cost per
                                                                   respondents        per        of  responses    response     and  total     respondent
                                                                                  respondent                       \295\      annual  cost       ($)
                                                                           (1)             (2)     (1) * (2) =          (4)     (3) * (4) =    (5) / (1)
                                                                                                           (3)                          (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individual Requests for Waiver (FERC-917)........................           16              -1             -16           10            -160        -$947
                                                                                                                       $947        -$15,146
OATT Filings (FERC-917)..........................................            1              -1              -1          100            -100      -$9,466
                                                                                                                     $9,466         -$9,466
Petitions for Declaratory Order requesting priority rights (FERC-            1              -1              -1           30             -30      -$2,840
 582)............................................................                                                    $2,840         -$2,840
Safe Harbor Commercial Operation Date Filing (average of first              39               1              39            1              39          $95
 three years) \296\ (FERC-917)...................................                                                       $95          $3,692
ICIF Owner that Does Not Sell Electric Energy Filing to Receive             19               1              19            1              19          $95
 Blanket Waiver (average of first three years) \297\ (FERC-917)..                                                       $95          $1,799
                                                                  --------------------------------------------------------------------------------------
    Total........................................................  ...........  ..............              40  ...........            -232     -$13,063
                                                                                                                                   -$21,961
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Cost to Comply: The Commission has projected the cost of compliance 
with the safe harbor commercial operation date filing to be $7,573 in 
the initial year and $1,704 in subsequent years, as new ICIF owners 
make safe harbor filings for their new projects. In addition, the 
Commission has projected the cost of compliance for ICIF owners that do 
not sell electric energy to make an informational filing stating that 
it commits to comply with and be bound by the obligations and 
procedures applicable to electric utilities under section 210 of the 
FPA in order to receive the blanket waiver to be $3,786 in the initial 
year and $852 in subsequent years, as new ICIF owners make such 
filings. This is offset by the reduction in burden associated with the 
waiver of filing requirements of $27,452 per year. As an average for 
the first three years, this amounts to a net reduction in burden of 
$21,961.
---------------------------------------------------------------------------

    \295\ The estimates for cost per response are derived using the 
following formula: Average Burden Hours per Response * $94.66 per 
Hour = Average Cost per Response. The hourly cost figure represents 
a combined hourly rate of an attorney ($131.00), economist ($71.00), 
engineer ($65.34), and administrative staff ($38.63), with a 50 
percent weighting on the attorney's rate (i.e. [$131(1/2) + 
$71.00(1/6) + $65.34(1/6) + $38.63(1/6)]/4 = $94.66. The estimated 
hourly costs (salary) are based on Bureau of Labor and Statistics 
information (available at http://www.bls.gov/oes/current/naics2_22.htm, and are adjusted to include benefits by assuming that 
salary accounts for 68.7 percent of total compensation). See http://www.bls.gov/news.release/ecec.nr0.htm.
    \296\ The average number of filings for the first three years is 
computed as follows. The Commission expects approximately 80 safe 
harbor filings in the first year, which represents the number of 
waiver filings over a historical five-year period and thus the 
approximate number of existing entities which will be able to take 
advantage of the five- year safe harbor period as of the effective 
date of the Final Rule in this proceeding. In the subsequent two 
years, the Commission expects approximately 18 safe harbor filings 
per year, which represents the historical number of OATT waiver 
filings (16), OATT filings (1), and petitions for declaratory order 
(1) per year. Going forward, we would expect the entities complying 
with the Final Rule would avoid these filings and that the relevant 
entities would instead avail themselves of the safe harbor period. 
The average of the three-year period then is (80 + 18 + 18)/3 = 39.
    \297\ The average number of filings for the first three years is 
computed as follows. The Commission expects approximately 40 section 
210 applicability filings in the first year, which represents half 
the number of waiver filings over a historical five-year period. The 
Commission does not know the precise number of existing ICIF owners 
that do not sell electric energy. Of the 80 ICIF owner that have 
requested waiver in the past five years, the Commission reasons that 
some share of them do not sell electric energy, and we use 50 
percent as an estimate. While there is no five year limitation that 
applies to entities that may make this filing, we reason that this 
issue, while not new, has become more relevant in recent years 
because of an increase in generation owners retaining control of 
their ICIF; hence, we are not including in our estimate any estimate 
of the number of ICIF owners that do not sell electric energy that 
would have requested waiver prior to 2010. In the subsequent two 
years, the Commission expects approximately nine section 210 
applicability filings per year, which represents half the historical 
number of OATT waiver filings (16), OATT filings (1), and petitions 
for declaratory order (1) per year. Going forward, we would expect 
the entities complying with the Final Rule would avoid these filings 
and that the relevant entities would instead avail themselves of the 
blanket ICIF waiver. The average of the three-year period then is 
(40 + 9 + 9)/3 = 19.
---------------------------------------------------------------------------

    Total Annual Hours for Collection in initial year (120 hours) 
@$94.66 an hour = $11,359.
    Total Annual Hours for Collection in subsequent years (27 hours) 
@$94.66 an hour = $2,556.
    Total Annual Hours for Reduced Collection per year (290 hours) 
@$94.66 an hour = $27,452.
    Title: FERC-582, Electric Fees and Annual Charges; FERC-917, Non-
Discriminatory Open Access Transmission Tariff.
    Action: Revision of Currently Approved Collection of Information.
    OMB Control No. 1902-0132; 1902-0233.
    Respondents for this Rulemaking: Businesses or other for profit 
and/or not-for-profit institutions.
    Frequency of Information: As indicated in the table.
    Necessity of Information: The Commission is adopting these changes 
to its regulations related to which entities must file the pro forma 
OATT, establish and maintain an OASIS, and abide by its Standards of 
Conduct in order to eliminate unnecessary filings and increase 
certainty for entities that develop generation. The purpose of this 
Final Rule is to reduce regulatory burdens and promote development 
while continuing to ensure open access to transmission facilities. The 
safe harbor commercial operation date filing is necessary to ensure 
transparency as to the applicability of the safe harbor period.
    Internal Review: The Commission has reviewed the proposed changes 
and has determined that the changes are necessary. These requirements 
conform to the Commission's need for efficient information collection, 
communication, and management within the energy industry. The 
Commission has assured itself, by means of internal review, that there 
is specific, objective support for

[[Page 17681]]

the burden estimates associated with the information collection 
requirements.
    182. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director], email: 
DataClearance@ferc.gov, Phone: (202) 502-8663, fax: (202) 273-0873.
    183. Comments on the requirements of this Final Rule can be sent to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th Street NW., Washington, DC 20503 [Attention: Desk 
Officer for the Federal Energy Regulatory Commission]. For security 
reasons, comments to OMB should be submitted by email to: 
oira_submission@omb.eop.gov. Comments submitted to OMB should include 
Docket No. RM14-11-000 and OMB Control No. 1902-0132 and/or 1902-0233.

VI. Regulatory Flexibility Act Analysis

    184. The Regulatory Flexibility Act of 1980 (RFA) \298\ generally 
requires a description and analysis of final rules that will have a 
significant economic impact on a substantial number of small entities. 
The Small Business Administration (SBA) revised its size standard 
(effective January 22, 2014) for electric utilities from a standard 
based on megawatt hours to a standard based on the number of employees 
including affiliates.\299\ Under SBA's new size standards, ICIF owners 
likely come under the following category and associated size threshold: 
Electric bulk power transmission and control, at 500 employees.\300\ 
The Final Rule states that approximately 80 entities will be affected 
by the changes imposed. Of these, the Commission estimates that 
approximately 93.1 percent \301\ or 75 of these are small entities. In 
the Final Rule, the Commission estimates that, on average, each of the 
small entities to whom the Final Rule applies will incur one-time costs 
of $142 in order to: (1) Document its commercial operation date and 
thus avail itself of the safe harbor provision; and, (2) if the entity 
does not sell electricity, commit to comply with section 210 of the 
FPA.\302\ This is true for those existing entities that have already 
received waiver of the OATT prior to the issuance of the Final Rule, as 
well as for new entities. This cost will be offset for new entities by, 
on average, $1,525.\303\ As the Commission has previously explained, in 
determining whether a regulatory flexibility analysis is required, the 
Commission is required to examine only direct compliance costs that a 
rulemaking imposes on small business.\304\ It is not required to 
examine indirect economic consequences, nor is it required to consider 
costs that an entity incurs voluntarily. The Commission does not 
consider the estimated costs per small entity to have a significant 
economic impact on a substantial number of small entities. Accordingly, 
the Commission certifies that the Final Rule will not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \298\ 5 U.S.C. 601-612 (2014).
    \299\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77,343 (Dec. 23, 2013).
    \300\ 13 CFR 121.201, Sector 22, Utilities.
    \301\ The Small Business Administration sets the threshold for 
what constitutes a small business. Public utilities may fall under 
one of several different categories, each with a size threshold 
based on the company's number of employees, including affiliates, 
the parent company, and subsidiaries. The possible categories for 
the applicable entities have a size threshold ranging from 250 
employees to 1,000 employees. For the analysis in this final rule, 
we are using the 500 employee threshold for each applicable entity 
type.
    \302\ See supra n. 298. We estimate that all affected entities 
will make the safe harbor filing, but that only half do not sell 
electric energy and thus need to make the commitment to comply with 
section 210 of the FPA. Thus, $142 = (1) x ($94.66) + (1/2) x 
($94.66).
    \303\ This reduced burden amount is calculated by taking the 
total estimated burden reduction per year, $27,452, and dividing by 
18, the estimated number of filings avoided because of the new 
regulations.
    \304\ Credit Reforms in Organized Wholesale Electric Markets, 
133 FERC ] 61,060, at P 184 (2010).
---------------------------------------------------------------------------

VII. Document Availability

    185. 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 FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5:00 
p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 
20426.
    186. From FERC's Home Page on the Internet, this information is 
available on 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.
    187. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

VIII. Effective Date and Congressional Notification

    These regulations are effective June 30, 2015. The Commission has 
determined, with the concurrence of the Administrator of the Office of 
Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Act of 1996. The Commission will submit this 
Final Rule to both houses of Congress and the Government Accountability 
Office.

List of Subjects in 18 CFR Part 35

    Electric power rates, Electric utilities, Reporting and 
recordkeeping requirements.

    By the Commission.

    Issued: March 19, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission amends Part 35, 
Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

0
1. The authority citation for part 35 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7101-7352.


0
2. Amend Sec.  35.28 by revising paragraph (d) to read as follows:


Sec.  35.28  Non-discriminatory open access transmission 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.
    (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

[[Page 17682]]

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.

    Note: Appendix A will not be published in the Code of Federal 
Regulations.

Appendix A: List of Short Names of Commenters on the Notice of Proposed 
Rulemaking

Commenter (Short Name or Acronym)
American Public Power Association and Transmission Access Policy 
Study Group (APPA and TAPS)
American Wind Energy Association (AWEA)
Berkshire Hathaway Energy Company (BHE)
BP Wind Energy North America Inc. (BP Wind)
California Department of Water Resources State Water Project (SWP)
Cogen Technologies Linden Venture, L.P. (Linden)
DTE Energy Company (DTE)
Edison Electric Institute (EEI)
Electric Power Supply Association (EPSA)
Electricity Consumers Resource Council (ELCON)
E.ON Climate & Renewables North America (E.ON)
First Wind Energy, LLC (First Wind)
Invenergy Wind LLC, Invenergy Wind Development LLC, and Invenergy 
Thermal Development LLC (Invenergy)
ITC Transmission, Michigan Electric Transmission Company, LLC, ITC 
Midwest, LLC, and ITC Great Plains, LLC (ITC)
Midcontinent Independent System Operator, Inc. (MISO)
MISO Transmission Owners (MISO TOs)
National Rural Electric Cooperative Association (NRECA)
NextEra Energy, Inc. (NextEra)
Northern California Power Agency (NCPA)
The NRG Companies (NRG)
Recurrent Energy (Recurrent)
Sempra U.S. Gas & Power, LLC (Sempra)
Solar Energy Industries Association (SEIA)
Southern Company Services, Inc. (Southern)
Terra-Gen Dixie Valley, LLC (Terra-Gen)

[FR Doc. 2015-06953 Filed 3-31-15; 8:45 am]
 BILLING CODE 6717-01-P


