OMB files this
comment in accordance with 5 CFR 1320.11(c) of the Paperwork
Reduction Act and is withholding approval of this collection at
this time. This OMB action is not an approval to conduct or sponsor
an information collection under the Paperwork Reduction Act of
1995. The agency shall examine public comment in response to the
Notice of Proposed Rulemaking and will include in the supporting
statement of the next ICR, to be submitted to OMB at the final rule
stage, a description of how the agency has responded to any public
comments on the ICR. This action has no effect on any current
approvals.
Inventory as of this Action
Requested
Previously Approved
36 Months From Approved
0
0
0
0
0
0
0
0
0
FERC proposes to revise its
regulations to require that each regional transmission organization
(RTO) and independent system operator (ISO) cap each resource’s
incremental energy offer to the higher of $1,000/MWh or that
resource’s verified cost-based incremental energy offer. Under this
proposal, verified cost-based incremental energy offers above
$1,000/MWh would be used for purposes of calculating Locational
Marginal Prices (LMPs). The Commission preliminarily finds that the
offer cap on incremental energy offers (offer cap) may no longer be
just and reasonable for several reasons. The offer cap may unjustly
prevent a resource from recouping its costs by not permitting that
resource to include all of its short-run marginal costs within its
energy supply offer (supply offer). The offer cap may result in
unjust and unreasonable rates because it can suppress LMPs to a
level below the marginal cost of production. Further, because of
the offer cap, a resource with short-run marginal costs above that
cap may choose not to offer its supply to the RTO/ISO, even though
the market may be willing to purchase that supply. Finally, when
several resources have short-run marginal costs above the offer cap
but are unable to reflect those costs within their incremental
energy offers due to the offer cap, the RTO/ISO is not able to
dispatch the most efficient set of resources because it will not
have access to the underlying costs associated with the multiple
incremental energy offers above the offer cap. To remedy these
potential problems associated with the offer cap, the Commission
proposes to require that each RTO/ISO cap each resource’s
incremental energy offer to the higher of $1,000/MWh or an
incremental energy offer based on that resource’s short-run
marginal cost (cost-based incremental energy offer). Under the
proposal, the costs underlying each cost-based incremental energy
offer above $1,000/MWh must be verified before that offer could be
used for purposes of calculating LMPs. Under this proposal, the
Market Monitoring Unit or the RTO/ISO, as prescribed in the RTO/ISO
tariff and consistent with FERC Order No. 719, must verify the
costs within a cost-based incremental energy offer. The proposed
offer cap would be resource neutral, that is, any resource,
regardless of fuel-type, would be eligible to submit a cost-based
incremental energy offer above $1,000/MWh. The Commission proposes
to make a generic change to the offer cap applicable to all
RTOs/ISOs through a rulemaking to avoid exacerbating seams issues.
Seams issues could arise if one RTO/ISO has an offer cap that
materially differed from a neighboring RTO/ISO’s offer cap.
Different offer caps in neighboring RTOs/ISOs could result in flows
that depend on the level of the two offer caps as opposed to
economics or reliability needs.
US Code:
16
USC 824f Name of Law: Federal Power Act
US Code: 16
USC 824e Name of Law: Federal Power Act
The existing tariff filings
(covered by FERC-516) related to the electric utility industry are
not affected by this NOPR in RM16-5-000. FERC requires this new
information (to be covered by a temporary collection no.,
FERC-516C) in order to perform its mandated oversight and review
responsibilities with respect to electric market-based rates being
just and reasonable. Without this information, the Commission would
be unable to meet its statutory responsibility under Section 206 of
the FPA to ensure public utility rates and tariffs are just and
reasonable. Failing to meet this responsibility could result in
public utilities charging rates that are not just and reasonable.
Temporary collection no. FERC-516C is being used in order to submit
the NOPR timely. Another unrelated package under FERC-516 is
currently pending OMB review, and only one package per OMB Control
No. can be pending review at a time.
$378,916
No
No
No
No
No
Uncollected
James Nachbaur 202
502-6807
No
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.