Response to Senator Bingaman

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FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON. DC 20426

OFFICE OF THE C H A I R M A N

July 3, 2006

The Honorable JeffBingaman
United States Senate
Washington, DC 20510

Dear Senator Bingaman:
Thank you for your June 20, 2006 letter concerning the Federal Energy Regulatory
Commission's ongoing rulemaking proceeding providing for long-term transmission
rights in organized electricity markets.
On February 2, 2006, the Commission issued a Notice of Proposed Rulemaking
(NOPR) that would adopt regulations to require independent transmission organizations,
such as Regional Transmission Organiz~xtionsand Independent System Operators, that
oversee organized electricity markets to make long-term firm transmission rights
available to all transmission customers. The availability of such rights will provide an
added measure of certainty to load-serving entities that wish to enter into long-term
power supply arrangements to serve their load, which in turn should allow load-serving
entities to more readily obtain financing for new infrastructure. By proposing guidelines,
the rule would allow regional flexibilityto account for different market designs and
regional differences when developing the framework for long-term rights.
This proceeding will implement new section 214(b)(4) of the Federal Power Act in
transmission organizations with organized electricity markets, as directed by Congress in
section 1233(b) of the Energy Policy Act of 2005. We intend to issue a Final Rule by
August 8, 2006, as Congress required in section 1233Co).
The Commission is now reviewing the comments received in response to that
NOPR, some ofwhich touch on the concerns raised in your letter. Commission staffhas
also met with many interested parties and groups to better understand their concerns
regarding our proposal. I can assure you the Commission will work to expeditiously
implement the new rules under section 1233. The Commission fully appreciates the
importance of addressing the allocation of long-term finn transmission rights and the
impact of that allocation on the ability of load-serving entities to satisfy their service
obligations.
Your letter and this response will be placed in the public file in the RM06-8-000
and AD05-7-000 dockets, which serves to alert the Commission to the concerns of
interested individuals and groups.

Jnofflclal

FERC-Generated

PDF of 20060707-0244

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07/03/2006 in D o c k e t # : A D 0 5 - 7 - 0 0 0

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I f I can be o f further assistance on this or any other Commission matter, please do
not hesitate to contact me.
Sincerely,

LTUL
'. Kelliher