| Promoting Wholesale Competition Through Open Access Services by Public Utilities
Recovery of Stranded Costs by Public Utilities and Transmitting Utilities | Docket No. RM95-8-000 Docket No. RM94-7-001 |
The Regulatory Flexibility Act (RFA) 1069/ requires rulemakings to contain either a description and analysis of the effect that the proposed rule will have on small entities or a certification that the rule will not have a significant economic impact on a substantial number of small entities. In the Open Access and Stranded Cost NOPRs, the Commission concluded that the proposed rules would not have a significant economic impact upon a substantial number of small entities. 1070/
SBA questions this conclusion. 1071/ It states that, "[a]ccording to data from the Department of Energy, the vast majority of utilities are small." 1072/ SBA requests that if, upon reconsideration, the Commission determines that the final rule in the Open Access NOPR proceeding would have a significant economic impact on a substantial number of small entities, the Commission perform a Regulatory Flexibility Analysis under the requirements of the RFA. 1073/
The Open Access Final Rule is applicable to public utilities that own, control or operate interstate transmission facilities, not to electric utilities per se. 1074/ The total number of public utilities that, absent waiver, would have to have open access tariffs on file is 166. 1075/ Of these, only 50 public utilities dispose of 4 million MWh or less per year. 1076/ Eliminating those utilities that are affiliates of other utilities whose sales exceed 4 million MWh per year, or are not independently owned, 1077/ the total number of public utilities affected by the Open Access Final Rule that qualify under the SBA's definition of small electric utility is 19, or 11 percent of the total number of public utilities that would have to have on file open access tariffs. 1078/ We do not consider this a substantial number, 1079/ and, in any event, these entities may seek waiver of the Open Access Final Rule's requirements under the Rule's waiver provisions.
Moreover, in the Open Access Final Rule, the Commission is specifying the non-rate terms and conditions of the tariffs that the public utilities must have on file. The public utilities need only develop and file a rate. 1080/ When one considers that the disposition of 4 million MWhs a year translates into sales in the range of $120 million to $180 million per year, the cost to prepare and file proposed rates, 1081/ which these utilities must regularly do anyway in the ordinary course of business, is not a significant economic impact.
The Open Access Final Rule will not impose any burden on non-public utilities, since they need not themselves file open access tariffs. Triggering the reciprocity provision in the Open Access Final Rule is optional; it is merely a condition of receiving a benefit, i.e., open access transmission service from a public utility. If non-public utilities elect not to take advantage of open access services because they do not want to meet the tariff reciprocity provision, they can still seek voluntary, bilateral transmission services from public utilities. Also, under the waiver provisions in the Open Access Final Rule, small non-public utilities may seek waiver from the reciprocity provision.
As with the Open Access Final Rule, there are not a substantial number of public utilities that qualify under the SBA's definition of small electric utility that are subject to the Stranded Cost Final Rule. The Stranded Cost Rule applies only to public utilities that seek stranded cost recovery in connection with a limited set of wholesale requirements contracts (those executed on or before July 11, 1994 that do not contain an exit fee or other explicit stranded cost provision). To the extent that public utilities seek stranded cost recovery, they will do so in a rate filing, where stranded cost recovery is likely to be one of many items considered. Accordingly, the Stranded Cost Final Rule will not pose a significant economic impact on a substantial number of public utility small entities.
With regard to non-public utilities, the stranded cost issue would only arise in a proceeding under sections 211 and 212 of the FPA when, in directing transmission, the Commission addresses the stranded cost issue in determining a just and reasonable rate. As with public utilities, stranded costs will be just one more item to be considered in establishing just and reasonable rates for transmission. As a result, the Stranded Cost Final Rule will not impose a significant economic impact on a substantial number of non-public utility small entities.
Accordingly, the Commission certifies that these final rules will not have a significant economic impact on a substantial number of small entities.
Convergence Research - 5/2/96