rather than in a new storage fuel account. California Storage Alliance
and ESA's

recommended O&M expense accounts are discussed in the next section.
c. Operation and Maintenance Expense Accounts
    95. As previously indicated there are O&M expenses related to the
use of these energy storage assets to provide utility services and
there are no existing O&M expense accounts in the USofA specifically
dedicated to accounting for the cost of energy storage operations. EEI
comments that, as it relates to the transmission function, the current
O&M expense accounts would adequately provide for recording expenses
associated with operation and maintenance of energy storage
assets.\105\ The Commission agrees that there are some existing O&M
expense accounts that can adequately support energy storage-related
operation and maintenance activities. We also believe current O&M
expense accounts for the production and distribution functions can
provide for recording some energy storage-related expenses. However,
the operations and maintenance of certain energy storage assets may
differ from conventional assets.\106\ Further, some existing O&M
expense accounts may not be well suited to record the cost of certain
activities associated with energy storage operations.\107\ To the
extent that there are activities and associated costs of energy storage
operations that are not specifically provided for in the existing O&M
expense accounts, there is a need for accounts to report the costs.
---------------------------------------------------------------------------

    \105\ EEI Comments at 12. EEI indicated that in instances where
energy storage assets provide a transmission function, the following
O&M accounts associated with transmission can be used: Accounts 560,
561.5, 561.8, 562-564, 566-576.
    \106\ For example, the procedures and practices involving repair
of a flywheel that serves a transmission function may not be the
same as the procedures and practices involving repair of a
transmission line.
    \107\ For example, certain O&M expenses for generator equipment
used in storage operations that serves a transmission function are
not well suited for recording in existing transmission O&M expense
accounts. Such expenses are the type of expenses that would
typically be incurred in production operations; however, because the
generator equipment serves a transmission function, the nature of
the expense is not production. In such cases, the O&M expenses for
generator equipment should be recorded as a transmission expense
using the appropriate energy storage equipment transmission O&M
expense account.
---------------------------------------------------------------------------

    96. California Storage Alliance and ESA recommended that all energy
storage-related O&M expense costs be recorded in new accounts entitled
``Operation of Electric Storage Equipment'' and ``Maintenance of
Electric Storage Equipment.'' However, aggregating all of the O&M costs
for energy storage into two accounts reduces the transparency of the
amounts reported, which is contrary to the purpose of the rulemaking.
Further, because certain costs of energy storage operations can be
adequately accounted for in the existing O&M expense accounts the costs
should be reported there in accordance with the instructions of the
accounts. Consequently, the Commission proposes that companies record
energy storage-related O&M expenses in the existing O&M expense
accounts according to the nature of the expense to the extent that the
account adequately supports recording of the cost.
    97. For energy storage-related O&M expenses that are not
specifically provided for in the existing O&M expense accounts the
Commission proposes that such costs be recorded in Account 548.1,
Operation of Energy Storage Equipment, and Account 553.1, Maintenance
of Energy Storage Equipment, for energy storage plant classified as
production; Account 562.1, Operation of Energy Storage Equipment, and
Account 570.1, Maintenance of Energy Storage Equipment, for energy
storage plant classified as transmission; and Account 582.1, Operation
of Energy Storage Equipment, and Account 592.2, Maintenance of Energy
Storage Equipment, for energy storage plant classified as distribution.
    98. The Commission proposes that the instructions of the accounts
provide for the inclusion of the cost of labor, materials used and
expenses incurred in the operation and maintenance, as appropriate, of
energy storage equipment, to the extent that the costs are not
appropriately recorded in other O&M expense accounts. Furthermore, we
propose that Accounts 592, Maintenance of Station Equipment (Major
only), and 592.1, Maintenance of Structures and Equipment (Nonmajor
only), be revised such that the accounts do not include O&M expenses
related to energy storage operations. Additionally, we propose that the
instructions of these accounts be revised to remove the reference to
Account 363. The Commission seeks comment on its proposal, including
whether the operations of certain energy storage assets differ enough
from conventional assets or maintenance activities to require the
proposed revisions.
d. No New Revenue Accounts
    99. In the NOI, the Commission asked whether new revenue accounts
should be created or existing revenue accounts used to account for
revenue associated with energy storage operations. The Commission also
asked whether all revenues for energy storage operations should be
recorded in a single revenue account: Account 456, Other Electric
Revenues. Most commenters oppose recording all revenues associated with
energy storage operations in a single account because it would not
provide sufficient transparency as to the relation of the revenue to a
particular service provided. Some commenters argue that new revenue
accounts were needed to account for revenues generated using energy
storage assets.\108\ These commenters generally argue that the existing
revenue accounts do not provide sufficient transparency. However,
commenters opposed to creating new revenue accounts argue that
production, transmission, and distribution services currently have
adequate revenue accounts, and energy storage technologies will simply
comprise a component of those services. These commenters contend that
revenue derived from the use of energy storage assets will originate
from the same type of activities associated with revenue derived from
the use of traditional utility assets.\109\ They argue that the type of
resource used to provide the service does not change the accounting for
the associated revenue.
---------------------------------------------------------------------------

    \108\ See, e.g., TAPS Comments at 17-18; BrightSource Comments
at 7; and Viridity Comments at 4.
    \109\ See, e.g., California Storage Alliance Comments at 34; ESA
Comments at 42; and FirstEnergy Comments at 5.
---------------------------------------------------------------------------

    100. The Commission agrees with commenters who contend that the
existing revenue accounts sufficiently provide for accounting for
revenue associated with using energy storage assets. We also agree that
revenues associated with the use of energy storage assets will
originate from the same type of activities associated with revenue
derived from the use of traditional utility assets. The current revenue
accounts provide for recording revenue based on sales of electricity
and other products and services by type of customer, product, or
service. Revenue derived from the operation of energy storage assets
will originate from one or more of these items. Commenters recommending
new accounts have not identified new revenue streams that may require
different accounting. As such, the Commission does not propose new
revenue accounts for energy storage. Companies using energy storage
assets to provide utility service must record revenues associated with
use of the assets in existing revenue accounts in accordance with the
instructions of the accounts, as appropriate.

2. Proposed New and Amended Form Nos. 1, 1-F, and 3-Q Schedules
    101. The Form Nos. 1, 1-F, and 3-Q have schedules that include a
basic set of financial statements: Comparative Balance Sheet, Statement
of Income and Retained Earnings, Statement of Cash Flows, and the
Statement of Comprehensive Income and Hedging Activities. Supporting
schedules with supplementary information are filed, including revenues
and the related quantities of products sold or transported; account
balances for O&M expenses; selected plant cost and operational data;
and other information. The Form No. 1 provides schedule pages 408-409,
Pumped Storage Generating Plant Statistics (Large Plants), and pages
410-411, Generating Plant Statistics (Small Plants) to report, among
other items, operational information on pumped storage plants. These
are the only schedules that provide for reporting information on energy
storage and these schedules do not provide for reporting information on
new types of energy storage assets such as batteries and flywheels, or
allow any possibility of treating pumped storage plants as anything
other than generating assets.
    102. Several commenters responded to the NOI's inquiry about
whether the Form Nos. 1 and 1-F should be amended to capture data on
energy storage assets and operations. Commenters recommend that certain
existing schedules be revised to include energy storage assets and a
new schedule be created to report operational and statistical data on
the assets.\110\ The primary difference among the recommendations is
the amount of detail proposed for inclusion in the new schedule.
---------------------------------------------------------------------------

    \110\ See, e.g., California Storage Alliance Comments at 41; ESA
Comments at 49; and TAPS Comments at 16.
---------------------------------------------------------------------------

    103. Some commenters recommend that the schedule include all input
items that are included in the total amount of O&M expenses for an
energy storage asset, similar to how O&M expenses and plant information
are currently required to be reported in schedule pages 408-409 of the
Form No. 1.\111\ In contrast, other commenters propose that the
information be presented at a higher, aggregated, level with only total
operation and total maintenance expense for energy storage operations
reported in the schedule. The Form No. 1 provides schedule pages 408-
409 for reporting detailed plant and O&M expense information on
generating plants that are considered ``large'' and less detailed plant
and cost information on generating plants that are considered ``small''
in schedule pages 410-411, Generating Plant Statistics (Small Plants).
According to the instructions of these schedules, the specific schedule
a utility must use to report its plant statistics and certain
associated costs is determined by the installed capacity of the unit.
Generating units with 10,000 kilowatts or more of installed capacity
will generally report this information in schedule pages 408-409.\112\
While this kilowatt threshold may be an appropriate measure of
information reporting requirements for traditional generating plants,
it may not be appropriate for new energy storage assets that in many
instances will be rated below 10,000 kilowatts. Consequently, the
Commission seeks comment on what would be an appropriate kilowatt
threshold for requiring utilities to report more detailed plant and
cost information for energy storage plant.
---------------------------------------------------------------------------

    \111\ See, e.g., California Storage Alliance Comments at 39-42;
and ESA Comments at 47-50.
    \112\ The 10,000 kW threshold is currently applied to gas-
turbine, internal combustion, nuclear, and conventional hydro and
pumped storage plants. There is a separate 25,000 kW threshold for
steam plants (e.g., coal, oil).
---------------------------------------------------------------------------

    104. The Commission proposes to add two new schedules to the Form
Nos. 1 and 1-F to report statistical and cost data on energy storage
plant. One schedule will require more detailed information than the
other to lessen the reporting burden on companies with small energy
storage operations. We preliminarily propose that 10,000 kilowatts be
the threshold for determining whether a filer reports more detailed
information in proposed schedule pages 414-417, Energy Storage
Operations (Large Plants), or less detailed information in proposed
schedule pages 419-421, Energy Storage Operations (Small Plants). We
propose that the following information be reported on pages 414-417 in
the proposed schedule: (1) Megawatts (MW) purchased, MW delivered to
the grid to support production, transmission, or distribution
operations, MW lost during conversion and discharge of energy, and MW
sold; (2) Account No. 555.1, Power Purchased for Storage Operations;
(3) cost of fuel used in energy storage operations; (4) revenue from
the sale of stored energy by revenue account; (5) other energy storage-
related cost incurred; (6) cost of energy storage plant recorded in
Accounts 101, 103, 106, and 107 by actual or expected functional
classification; (7) operation and maintenance expenses associated with
each function; and (8) name and location of energy storage plant, by
project, and functional classification.
    105. Additionally, we propose that the following information be
reported on pages 419-421 in the proposed schedule: (1) Cost of plant;
(2) operation expenses excluding fuel; (3) maintenance expenses; (4)
cost of fuel used in energy storage operations; (5) Account No. 555.1,
Power Purchased for Storage Operations; (6) other energy storage-
related cost incurred; and (7) name and location of energy storage
plant, by project, and functional classification.
    106. Finally, we propose to amend several schedules of the Form
Nos. 1 and 1-F to include the proposed energy storage plant, purchased
power and O&M expense accounts discussed above, and schedule page 397,
Amounts Included in ISO/RTO Settlement Statements, of the Form No. 3-Q
to include the proposed purchased power account.\113\ The Commission
seeks public comment on each of the proposals discussed above,
including whether the proposed changes will provide sufficiently
transparent information on the activities and costs of new energy
storage assets and operations.
---------------------------------------------------------------------------

    \113\ See Appendix B Proposed Amendments to Form Nos. 1, 1-F and
3-Q.
---------------------------------------------------------------------------

III. Information Collection Statement

    107. The collections of information below for this proposed rule
have been submitted to the Office of Management and Budget (OMB) for
review under Section 3507(d) of the Paperwork Reduction Act of
1995.\114\ OMB's regulations require approval of certain information
collection requirements imposed by agency rule.\115\ The Commission
solicits comments on its need for this information, whether the
information will have practical utility, the accuracy of burden and
cost 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.
---------------------------------------------------------------------------

    \114\ See 44 U.S.C. 3507(d).
    \115\ 5 CFR 1320.11 (2011).
---------------------------------------------------------------------------

    Burden Estimate and Information Collection Costs: The additional
estimated annual public reporting burdens and costs for the
requirements in this proposed rule are as follows.
---------------------------------------------------------------------------

    \116\ The Form No. 3-Q estimate is one hour since the
information is already collected and will only require a minor
separation of costs.
    \117\ The burden in Year 1 is 1,320 hrs. The average annualized
burden over Years 1-3 is 440 hr. (1,320/3).

----------------------------------------------------------------------------------------------------------------
                                                                                Change in the      Estimated
                                   Number of     Change in the    Filings per     total annual      annual cost
        Data collection           respondents      number of    respondent per   hours for this    (at $120/hr.)
                                      (a)          hours per       year (c)      collection (a x  (d x $120/hr.)
                                                  filing (b)                        b x c=d)            ($)
----------------------------------------------------------------------------------------------------------------
Form No. 1....................             210               6               1  1,260...........         151,200
Form No. 1-F..................               5               6               1  30..............           3,600
Form No. 3-Q..................             213         \116\ 1               3  639.............          76,680
FERC-917 [includes 18 CFR                  132              10               1  440 averaged        \117\ 52,800
 35.28 pro forma open-access                                                     over Years 1-3
 transmission tariff (OATT)].                                                    [1320 in Year
                                                                                1].
FERC-717 [includes OASIS &                 176               2               1  352.............          42,240
 posting data on self-supply
 ancillary services].
FERC-919 [includes `20 percent             155               7               1  1,085...........         130,200
 screen'].
                               ---------------------------------------------------------------------------------
    Total.....................  ..............  ..............  ..............  3,806 (averaged          456,720
                                                                                over Years 1-3).
----------------------------------------------------------------------------------------------------------------

    Titles: FERC Form No. 1, ``Annual Report of Major Electric
Utilities, Licensees, and Others;'' FERC Form No. 1-F, ``Annual Report
for Nonmajor Public Utilities and Licensees;'' FERC Form No. 3-Q,
``Quarterly Financial Report of Electric Utilities, Licensees and
Natural Gas Companies;'' FERC-917, ``Non-discriminatory Open Access
Transmission Tariff,'' FERC-717, ``Standards for Business Practices and
Communication Protocols for Public Utilities,'' and FERC-919,
``Electric Rate Schedule Filings: Market Based Rates for Wholesale
Sales of Electric Energy, Capacity and Ancillary Services by Public
Utilities.''
    Action: Proposed revisions to information collections.
    OMB Control Nos.: 1902-0021 (FERC Form No. 1); 1902-0029 (FERC Form
No. 1-F); 1902-0205 (FERC Form No. 3-Q); 1902-0233 (FERC-917), 1902-
0173 (FERC-717); and 1902-0234 (FERC-919).
    Respondents: Public utilities, FERC licensees, and public utility
transmission providers.
    Frequency of responses: Annually (FERC Form Nos. 1 and 1-F);
quarterly (FERC Form No. 3-Q); and as needed (FERC-917, FERC-717, and
FERC-919).
    Necessity of the Information: The proposed rule would amend the
Commission's regulations to reflect changes occurring in the electric
industry due to the availability of new energy storage technologies
that can be used in the provision of large-scale utility operations.
The addition of these plant accounts, and new and amended reporting
forms, should enhance transparency and provide detailed information on
transactions and events affecting public utilities and licensees that
file reports with the Commission. Without specific instructions and
accounts for recording and reporting the above transactions and events,
inconsistent and incomplete accounting and reporting will likely
result. With regard to FERC-917, FERC-919, and FERC-717 the proposed
rule would provide increased transparency in the determination of
Regulation and Frequency Response requirements, historical ancillary
service information, and ancillary service capacity in order to ensure
that rates for that service remain just, reasonable, and not unduly
discriminatory.
    Internal Review: The Commission has reviewed the requirements
pertaining to the USofA and the reports it prescribes and determined
that the proposed amendments are necessary because the Commission needs
to establish uniform accounting and reporting requirements for the
costs of utility assets and expenses incurred for providing services as
part of a utility's operations. The Commission has reviewed the
requirements associated with the OATT, OASIS, and market power analysis
and determined they are necessary to increase transparency and ensure
that rates remain just, reasonable, and not unduly discriminatory.
    108. These requirements conform to the Commission's need for
efficient information collection, communication, and management within
the energy industry. The Commission has assured itself, through
internal review, that there is specific, objective support for the
burden estimates associated with the information collection
requirements.
    109. 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:
<EMAIL_ADDRESS>Phone<PHONE_NUMBER>, fax:<PHONE_NUMBER>.
    Comments on the collections of information and associated burden
estimates in the proposed rule should be sent to the Commission in this
docket and may also be sent to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, DC 20503
[Attention: Desk Officer for the Federal Energy Regulatory Commission].
For security reasons, comments to OMB should be submitted by email to:
<EMAIL_ADDRESS>Please refer to OMB Control Nos. 1902-
0021 (FERC Form No. 1); 1902-0029 (FERC Form No. 1-F); 1902-0205 (FERC
Form No. 3-Q); 1902-0233 (FERC-917), 1902-0173 (FERC-717); and 1902-
0234 (FERC-919) and Docket Number RM11-24.

IV. Environmental Analysis

    110. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\118\ The
Commission concludes that neither an Environmental Assessment nor an
Environmental Impact Statement is required for this Final Rule under
section 380.4(a)(15) of the Commission's regulations, which provides a
categorical exemption for approval of actions under sections 205 and
206 of the FPA relating to the filing of schedules containing all rates
and charges for the transmission or sale subject to the Commission's
jurisdiction, plus the classification, practices, contracts, and
regulations that affect rates, charges, classifications, and
services.\119\
---------------------------------------------------------------------------

    \118\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC Stats. &
Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \119\ 18 CFR 380.4(a)(15) (2011).

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

V. Regulatory Flexibility Act

    111. The Regulatory Flexibility Act of 1980 (RFA) \120\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and that minimize
any significant economic impact on a substantial number of small
entities. The Small Business Administration's (SBA's) Office of Size
Standards develops the numerical definition of a small business.\121\
The SBA has established a size standard for electric utilities, stating
that a firm is small if, including its affiliates, it is primarily
engaged in the transmission, generation and/or distribution of electric
energy for sale and its total electric output for the preceding twelve
months did not exceed four million megawatt hours.\122\ Most companies
regulated by the Commission do not fall within the RFA's definition of
a small entity.\123\ The proposed rule applies exclusively to public
utilities that own, control, or operate facilities for transmitting
electric energy in interstate commerce and not electric utilities per
se. Based on the filers of the annual FERC Form No. 1 and Form No. 1-F,
as well as the number of companies that have obtained waivers, we
estimate that 6.8 percent of the filers affected by this proposed rule
are ``small.'' The Commission believes this rule will not have a
significant economic impact on a substantial number of small entities,
and therefore no regulatory flexibility analysis is required.
---------------------------------------------------------------------------

    \120\ 5 U.S.C. 601-612.
    \121\ 13 CFR 121.101 (2011).
    \122\ 13 CFR 121.201, Sector 22, Utilities.
    \123\ See 5 U.S.C. 601(3) citing to section 3 of the Small
Business Act, 15 U.S.C. 632. Section 3 of the Small Business Act
defines a ``small-business concern'' as a business which is
independently owned and operated and which is not dominant in its
field of operation. The Small Business Size Standards component of
the North American Industry Classification System defines a small
electric utility as one that, including its affiliates, is primarily
engaged in generation, transmission, and/or distribution of electric
energy for sale and whose total electric output for the preceding
fiscal years did not exceed 4 million MWh. 13 CFR 121.201 (2011).
---------------------------------------------------------------------------

VI. Comment Procedures

    112. The Commission invites interested persons to submit comments
on the matters and issues proposed in this notice to be adopted,
including any related matters or alternative proposals that commenters
may wish to discuss. Comments are due 60 days after publication in the
Federal Register. Comments must refer to Docket No. RM11-24-000, and
must include the commenter's name, the organization they represent, if
applicable, and their address in their comments.
    113. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    114. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    115. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VII. Document Availability

    116. In addition to publishing the full text of this document in
the Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington DC 20426.
    117. From the Commission'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.
    118. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at<PHONE_NUMBER> (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
List of Subjects in 18 CFR Parts 35, 37, and 101

    Electric power rates; Electric utilities.

    By direction of the Commission. Commissioner Clark voting
present.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend
Parts 35, 37, and 101, Chapter I, Title 18, Code of Federal
Regulations, as follows.

PART 35--FILING OF RATE SCHEDULES AND TARIFFS

    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. Sec.  9701;
42 U.S.C. 7101-7352.

    2. Amend Sec.  35.28 by adding a new paragraph (c)(1)(viii) as
follows.

Sec.  35.28  Non-discriminatory open access transmission tariff.

* * * * *
    (c)(1)(viii) Each public utility's open access transmission tariff,
at Schedule 3--Regulation and Frequency Response Service, must include
provisions explaining how it will determine its Regulation and
Frequency Response reserve requirements. These provisions must take
into account speed and accuracy of regulation resources and include a
description of how the public utility transmission provider would make
adjustments to the capacity requirement when a customer opts to
purchase from third-parties or self-supply its requirements using
resources with speed and accuracy characteristics that differ from the
set of resources otherwise being used for Regulation and Frequency
Response Service.
* * * * *
    3. Amend Sec.  35.37 as follows:
    a. Paragraph (c)(1) is revised.
    b. New paragraph (c)(5) is added.

Sec.  35.37  Market power analysis required.

* * * * *
    (c)(1) There will be a rebuttable presumption that a Seller lacks
horizontal market power with respect to sales of energy, capacity,
energy imbalance service, and generation imbalance service if it passes
two indicative market power screens: a pivotal supplier analysis based
on annual peak demand of the relevant market, and a market share
analysis applied on a seasonal basis. There will be a rebuttable
presumption that a seller possesses horizontal market power with
respect to sales of energy, capacity, energy imbalance service, and
generation imbalance service if it fails either screen.
* * * * *
    (c)(5) There will be a rebuttable presumption that a Seller of
Operating

Reserve--Spinning, Operating Reserve--Supplemental, Reactive Supply and
Voltage Control, or Regulation and Frequency Response services lacks
horizontal market power with respect to sales of the ancillary service
in question if the amount of capacity in MWs (or, as applicable, MVARs)
that it can dedicate to providing the ancillary service in the relevant
geographic market, taking into account any reported historical
locational requirements, is no more than 20 percent of the relevant
reported aggregate requirement for that ancillary service as reported
pursuant to Sec.  37.6(k) of the Commission's Regulations.
* * * * *
    4. Amend Sec.  35.38 as follows:
    a. Paragraph (a) is revised.
    b. Paragraph (b) is revised.
    c. New paragraph (c) is added.

Sec.  35.38  Mitigation.

    (a) A Seller that has been found to have market power in generation
or ancillary services, or that is presumed to have horizontal market
power in generation or ancillary services by virtue of failing or
foregoing the relevant market power screens, as described in 35.37(c),
may adopt the default mitigation detailed in paragraph (b) of this
section for sales of energy or capacity or paragraph (c) of this
section for sales of ancillary services or may propose mitigation
tailored to its own particular circumstances to eliminate its ability
to exercise market power. Mitigation will apply only to the market(s)
in which the Seller is found, or presumed, to have market power.
    (b) Default mitigation for sales of energy or capacity consists of
three distinct products:
* * * * *
    (c) Default mitigation for sales of ancillary services consists of:
(1) A cost-based cap based on the relevant OATT ancillary service rate
of the purchasing public utility transmission operator; (2) a cost-
based cap based on the highest relevant public utility OATT ancillary
service rate in the proposed trading area; or (3) the results of a
competitive solicitation that meets the Commission's requirements for
transparency, definition, evaluation, oversight, and adequate seller
interest to ensure competitiveness.

PART 37--OPEN ACCESS SAME-TIME INFORMATION SYSTEMS

    5. The authority citation for Part 37 continues to read as follows:

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

    6. Amend Sec.  37.6 by adding a new paragraph (k) as follows.

Sec.  37.6  Information to be posted on the OASIS.

* * * * *
    (k) Posting data related to historical ancillary service
requirements. The Transmission Provider must post on OASIS information
as to the aggregate amount (MW or MVAR, as applicable) of Operating
Reserve--Spinning, Operating Reserve--Supplemental, Reactive Supply and
Voltage Control, and Regulation and Frequency Response services that it
has historically required in order to serve its long-term firm
obligations, including any geographic limitations it may face in
meeting such ancillary service requirements.

PART 101--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC
UTILITIES AND LICENSEES SUBJECT TO THE PROVISIONS OF THE FEDERAL
POWER ACT

    7. The authority citation for Part 101 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, 7651-7651o.

    8. In Part 101, Electric Plant Chart of Accounts, Account 348 is
added to the list:

Electric Plant Chart of Accounts

* * * * *
2. PRODUCTION PLANT
* * * * *
D. OTHER PRODUCTION
* * * * *
348 Energy Storage Equipment--Production
* * * * *
    9. In Part 101, Electric Plant Accounts, Account 351, the name of
the account is amended and instructions are added to read as follows:

Electric Plant Accounts

* * * * *

351 Energy Storage Equipment--Transmission

    A. This account shall include the cost installed of energy storage
equipment used to store energy for load managing purposes. Where energy
storage equipment can perform more than one function or purpose, the
cost of the equipment shall be allocated among production,
transmission, and distribution plant based on the services provided by
the asset and the allocation of the asset's cost through rates approved
by a relevant regulatory agency. Reallocation of the cost of equipment
recorded in this account shall be in accordance with Electric Plant
Instruction No. 12, Transfers of Property.
    B. Labor costs and power purchase and generation costs incurred to
install and energize the equipment are includible on the first
installation only. The cost of removing, relocating and resetting
energy storage equipment shall not be charged to this account but to
Account 562.1, Operation of Energy Storage Equipment, and Account
570.1, Maintenance of Energy Storage Equipment, as appropriate.
    C. The records supporting this account shall show, by months, the
function(s) each energy storage asset supports or performs.
ITEMS
1. Batteries/Chemical
2. Compressed Air
3. Flywheels
4. Superconducting Magnetic Storage
5. Thermal

    10. In Part 101, Electric Plant Accounts, Account 363, the name of
the account and the instructions are amended and added to read as
follows:

Electric Plant Accounts

* * * * *

363 Energy Storage Equipment--Distribution

    A. This account shall include the cost installed of energy storage
equipment used to store energy for load managing purposes. Where energy
storage equipment can perform more than one function or purpose, the
cost of the equipment shall be allocated among production,
transmission, and distribution plant based on the services provided by
the asset and the allocation of the asset's cost through rates approved
by a relevant regulatory agency. Reallocation of the cost of equipment
recorded in this account shall be in accordance with Electric Plant
Instruction No. 12, Transfers of Property.
    B. Labor costs and power purchase and generation costs incurred to
install and energize the equipment are includible on the first
installation only. The cost of removing, relocating and resetting
energy storage equipment shall not be charged to this account but to
Account 582.1, Operation of Energy Storage Equipment, and Account
592.2, Maintenance of Energy Storage Equipment, as appropriate.
    C. The records supporting this account shall show, by months, the
function(s) each energy storage asset supports or performs.

ITEMS
1. Batteries/Chemical
2. Compressed Air
3. Flywheels
4. Superconducting Magnetic Storage
5. Thermal

    11. In Part 101, Electric Plant Accounts, new primary plant account
348 is added to read as follows:

Electric Plant Accounts

* * * * *

348 Energy Storage Equipment--Production

    A. This account shall include the cost installed of energy storage
equipment used to store energy for load managing purposes. Where energy
storage equipment can perform more than one function or purpose, the
cost of the equipment shall be allocated among production,
transmission, and distribution plant based on the services provided by
the asset and the allocation of the asset's cost through rates approved
by a relevant regulatory agency. Reallocation of the cost of equipment
recorded in this account shall be in accordance with Electric Plant
Instruction No. 12, Transfers of Property.
    B. Labor costs and power purchase and generation costs incurred to
install and energize the equipment are includible on the first
installation only. The cost of removing, relocating and resetting
energy storage equipment shall not be charged to this account but to
Account 548.1, Operation of Energy Storage Equipment, and Account
553.1, Maintenance of Energy Storage Equipment, as appropriate.
    C. The records supporting this account shall show, by months, the
function(s) each energy storage asset supports or performs.
ITEMS
1. Batteries/Chemical
2. Compressed Air
3. Flywheels
4. Superconducting Magnetic Storage
5. Thermal

    Note: The cost of pumped storage hydroelectric plant shall be
charged to hydraulic production plant. These are examples of items
includible in this account. This list is not exhaustive.

    12. In Part 101, Operation and Maintenance Expense Chart of
Accounts, Accounts 548.1, 553.1, 555.1, 562.1, 570.1, 582.1, and 592.2
are added to the list:

Operation and Maintenance Expense Chart of Accounts

* * * * *
1. POWER PRODUCTION EXPENSES
* * * * *
D. OTHER POWER GENERATION
* * * * *
Operation
* * * * *
548.1 Operation of Energy Storage Equipment
* * * * *
Maintenance
553.1 Maintenance of Energy Storage Equipment
* * * * *
E. OTHER POWER SUPPLY EXPENSES
* * * * *
555.1 Power Purchased for Storage Operations
* * * * *
2. TRANSMISSION EXPENSES
* * * * *
Operation
* * * * *
562.1 Operation of Energy Storage Equipment
* * * * *
Maintenance
* * * * *
570.1 Maintenance of Energy Storage Equipment
* * * * *
4. DISTRIBUTION EXPENSES
* * * * *
Operation
* * * * *
582.1 Operation of Energy Storage Equipment
* * * * *
Maintenance
* * * * *
592.2 Maintenance of Energy Storage Equipment
    13. In Part 101, Operation and Maintenance Expense Accounts, new
operation expense account 548.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

548.1 Operation of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the operation of energy storage equipment
includible in Account 348, Energy Storage Equipment-Production, which
are not specifically provided for or are readily assignable to other
production operation expense accounts.
    14. In Part 101, Operation and Maintenance Expense Accounts, new
maintenance expense account 553.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

553.1 Maintenance of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of energy storage equipment
includible in Account 348, Energy Storage Equipment-Production, which
are not specifically provided for or are readily assignable to other
production maintenance expense accounts.
    15. In Part 101, Operation and Maintenance Expense Accounts, new
power supply expense account 555.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

555.1 Power Purchased for Storage Operations

    A. This account shall include the cost at point of receipt by the
utility of electricity purchased for use in storage operations,
including power purchased and consumed or lost in energy storage
operations during the provision of services, including but not limited
to energy purchased and stored for resale. It shall also include but
not be limited to net settlements for exchange of electricity or power,
such as economy energy, off-peak energy for on-peak energy, and
spinning reserve capacity. In addition, the account shall include the
net settlements for transactions under pooling or interconnection
agreements wherein there is a balancing of debits and credits for
energy, capacity, and possibly other factors. Distinct purchases and
sales shall not be recorded as exchanges and net amounts only recorded
merely because debit and credit amounts are combined in the voucher
settlement.
    B. The records supporting this account shall show, by months, the
kilowatt hours and prices thereof under each purchase contract and the
charges and credits under each exchange or power pooling contract.

    16. In Part 101, Operation and Maintenance Expense Accounts, new
operation expense account 562.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

562.1 Operation of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the operation of energy storage equipment
includible in Account 351, Energy Storage Equipment-Transmission, which
are not specifically provided for or are readily assignable to other
transmission operation expense accounts.
    17. In Part 101, Operation and Maintenance Expense Accounts, new
maintenance expense account 570.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

570.1 Maintenance of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of energy storage equipment
includible in Account 351, Energy Storage Equipment-Transmission, which
are not specifically provided for or are readily assignable to other
transmission maintenance expense accounts.
    18. In Part 101, Operation and Maintenance Expense Accounts, new
operation expense account 582.1 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

582.1 Operation of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the operation of energy storage equipment
includible in Account 363, Energy Storage Equipment-Distribution, which
are not specifically provided for or are readily assignable to other
distribution operation expense accounts.
    19. In Part 101, Operation and Maintenance Expense Accounts, new
maintenance expense account 592.2 is added to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

592.2 Maintenance of Energy Storage Equipment

    This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of energy storage equipment
includible in Account 363, Energy Storage Equipment-Distribution, which
are not specifically provided for or are readily assignable to other
distribution maintenance expense accounts.

    Note:  The following appendix will not be published in the Code
of Federal Regulations.

   Appendix A: List of Short Names of Commenters on the Federal Energy
  Regulatory Commission's Notice of Inquiry on Third-Party Provision of
 Ancillary Services; Accounting and Financial Reporting for New Electric
         Storage Technologies--Docket No. RM11-24-000, June 2011
------------------------------------------------------------------------
         Short Name or Acronym                      Commenter
------------------------------------------------------------------------
A123...................................  A123 Systems, Inc.
AEP....................................  American Electric Power Service
                                          Corporation.
AES Energy Storage.....................  AES Energy Storage.
APPA...................................  American Public Power
                                          Association.
Apparent Inc...........................  Apparent Inc.
Aquion Energy, Inc.....................  Aquion Energy, Inc.
AWEA...................................  American Wind Energy
                                          Association.
Beacon Power Corporation...............  Beacon Power Corporation.
Bonneville.............................  Bonneville Power
                                          Administration.
BrightSource...........................  BrightSource Energy, Inc.
Business Council for Sustainable Energy  Business Council for
                                          Sustainable Energy.
California PUC.........................  California Public Utilities
                                          Commission.
California Storage Alliance............  California Energy Storage
                                          Alliance.
CAREBS.................................  Coalition to Advance Renewable
                                          Energy Through Bulk Storage.
EEI....................................  Edison Electric Institute.
Electricity Consumers..................  Electricity Consumers Resource
                                          Council.
ENBALA.................................  Enbala Power Networks.
Environmental Defense Fund.............  Environmental Defense Fund.
EPSA...................................  Electric Power Supply
                                          Association.
ESA....................................  Electricity Storage
                                          Association.
FirstEnergy............................  The Cleveland Electric
                                          Illuminating Company, Jersey
                                          Central Power & Light Company,
                                          Metropolitan Edison Company,
                                          Ohio Edison Company,
                                          Pennsylvania Electric Company,
                                          Pennsylvania Power Company,
                                          The Toledo Edison Company,
                                          Monongahela Power Company, The
                                          Potomac Edison Company, West
                                          Penn Power Company,
                                          FirstEnergy Solutions Corp.,
                                          American Transmission Systems,
                                          Incorporated and Trans-
                                          Allegheny Interstate Line
                                          Company.
FriiPwr................................  FriiPwr USA.
Hydro Association......................  National Hydropower
                                          Association.
IID....................................  Imperial Irrigation District.
Mark Lively............................  Mark B. Lively.
National Grid..........................  National Grid USA.
National Park Service..................  National Park Service.
NaturEner..............................  NaturEner USA, LLC.
NextStep...............................  NextStep Electric, LLC.
NGK/TI.................................  NGK Insulators, Ltd and
                                          Technology Insights.
NGSA...................................  Natural Gas Supply Association.

Northwest Group........................  Avista Corporation, Bonneville
                                          Power Administration, Chelan
                                          County PUD, Clark Public
                                          Utilities, Cowlitz County PUD,
                                          Idaho Power Company,
                                          NorthWestern Energy,
                                          PacifiCorp, Public Power
                                          Council, Public Utility
                                          District No. 2 of Grant
                                          County, and Puget Sound
                                          Energy, Inc.
Portland General.......................  Portland General Electric
                                          Company.
Powerex................................  Powerex Corporation.
PPL Companies..........................  PPL EnergyPlus, LLC and PPL
                                          Montana, LLC.
Prudent Energy.........................  Prudent Energy Corporation.
Public Interest Organizations..........  Center for Rural Affairs, Clean
                                          Wisconsin, Climate + Energy
                                          Project, Conservation Law
                                          Foundation, Environment
                                          Northeast, Fresh Energy, Land
                                          Trust Alliance, Natural
                                          Resources Defense Council,
                                          Pace Energy and Climate
                                          Center, Project for
                                          Sustainable FERC Energy
                                          Policy, Sierra Club and Union
                                          of Concerned Scientists.
Riverbank..............................  Riverbank Power Corporation.
Saft...................................  Saft America, Inc.
SDG&E..................................  San Diego Gas & Electric
                                          Company.
Shell Energy...........................  Shell Energy North America
                                          (US), L.P.
Solar Energy Association...............  Solar Energy Industries
                                          Association.
SolarReserve...........................  SolarReserve LLC.
Southern California Edison.............  Southern California Edison
                                          Company.
Starwood...............................  Starwood Energy Group Global,
                                          LLC.
Steffes................................  Steffes Corporation.
TAPS...................................  Transmission Access Policy
                                          Study Group.
Viridity...............................  Viridity Energy Inc.
WADE/Wartsila..........................  WADE USA and Wartsila North
                                          America.
WSPP...................................  WSPP, Inc.
Xtreme.................................  Xtreme Power.
------------------------------------------------------------------------

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

Appendix B--New and Amended Form 1/1F/3Q Pages

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[FR Doc. 2012-15763 Filed 7-6-12; 8:45 am]
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