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

    \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.

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

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

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\
---------------------------------------------------------------------------

    \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

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\
---------------------------------------------------------------------------

    \204\ ITC at 7-8.
    \205\ ITC at 11.
    \206\ MISO TOs at 5.
---------------------------------------------------------------------------

    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

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

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

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

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,

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

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

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

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.

                           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

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:
<EMAIL_ADDRESS>Phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>.
    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:
<EMAIL_ADDRESS>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
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
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

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