Order No. 697-D: Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, RM04-7-008

Reporting Requirements

Order No. 697-D clarifies: (1) the reporting procedures for land acquisitions for new generation capacity development for which site control has been demonstrated in the interconnection process (Item 1); and (2) it eliminates the reporting requirement for land acquisitions for new generation capacity development in circumstances where site control has not been demonstrated during the prior three years (Item 2).

With respect to Item 1, the change in status reporting requirement in § 35.42 of FERC’s regulations requires market-based rate sellers to report the acquisition of land sites for new generation capacity development for which site control has been demonstrated in the interconnection process on a quarterly basis. FERC clarifies that:

(1) If there has been no acquisition of land sites for new generation capacity development for which site control has been demonstrated in the interconnection process during a quarter, then a seller should not file a report for that quarter; and

(2) The quarterly report also is not cumulative. You should only report the land sites for new generation capacity development for which site control has been demonstrated in the interconnection process during that quarter. The quarterly report does not need to include such land sites reported in previous quarterly reports.

With respect to Item 2, FERC eliminated the new reporting requirement that market-based rate sellers are required to report the acquisition of land sites for generation capacity development for which site control has not been established during the prior three years. (FERC had previously granted an extension to comply with this reporting requirement until 30 day after FERC issued this rehearing order in Order No. 697-D). FERC eliminated this reporting requirement after assessing the difficulty and burden of complying with this requirement. FERC reserved the right to reconsider this determination after it assesses the sufficiency of the information that is being reported in the quarterly reports.

Sales by Mitigated Sellers

In Order No. 697-D, FERC also rejected requests to permit mitigated sellers making market-based rate sales at the metered boundary to sell power back into the mitigated market, either directly or through their affiliates. This means that once a mitigated seller makes a market-based sale at the metered boundary of its mitigated market, the mitigated seller or its affiliate cannot make any sale (including a cost-based rate sale), at any time, from outside its mitigated market for delivery to its mitigated market. FERC’s basis for justifying this very broad-brush sales prohibition is the fact that certain members of the industry had commented that it could not track sales to ensure that a market-based sale at the metered boundary would not be resold back into the mitigated market. This overly-broad prohibition has received numerous rounds of appeal without any movement from FERC.

Click here to access Order No. 697-D.