Transmission Providers Must Make Clear What Transmission Services Are Available

The Federal Energy Regulatory Commission ("FERC") has just issued an order indicating that Transmission Providers with Open Access Transmission Tariffs ("OATTs") that reference the NAESB OASIS Business Practices, but do not actually follow all of those business practices, should revise their OATTs to clearly state what portions of those business practices they follow.  FERC requires transmission providers’ OATTs to specify all terms and conditions of the service they provide.

On July 29, 2010, FERC granted a complaint filed by Cargill Power Markets, LLC (“Cargill”) against Public Service Company of New Mexico (“PNM”).  Cargill alleged that PNM had improperly invalidated Cargill’s request for transmission service even though the request was for service that PNM’s OATT implied was available.  PNM’s OATT states that it follows the NAESB Business Practices, which provide for three types of yearly firm point-to-point transmission service: fixed, which must start on January 1 and end on December 31 of the same year; sliding, which may start on any date and stops on the same date the following year; and extended, which may start on any date and stops on the same date two or more years later. Cargill had requested sliding yearly point-to-point transmission service, but PNM invalidated Cargill’s request on the ground that it offered only fixed yearly service.  FERC found that it was reasonable for customers to conclude that PNM was offering all the types of point-to-point transmission services that are described in the NAESB Business Practices.  FERC explained that while PNM may have adhered to its unwritten policies regarding types of services offered, the language contained in PNM’s OATT stating that it adopted the NAESB Business Practices indicated that PNM was offering sliding service.  FERC directed PNM to file tariff revisions that specify all transmission services the company provides, and to detail the procedures PNM follows when processing transmission service requests.  FERC also found that PNM should provide appropriate relief to Cargill to remedy the harm caused by the invalidated transmission service request.  FERC set this issue for hearing and referred it to a settlement judge.

Based on FERC’s order, each transmission provider should review its OATT and ensure that the OATT correctly references the business practices it follows in administering transmission service.  If a transmission provider adopts some but not all of the business practices it references, it should be sure to make that clear in its OATT.

To access the order, please click here.

For more information, please contact Joe Fina.