18 Cfr 42.1

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Federal Energy Regulatory Commission
§ 42.1 Requirement that Transmission
Organizations with Organized Electricity Markets Offer Long-Term
Firm Transmission Rights.
(a) Purpose. This section requires a
transmission organization with one or
more organized electricity markets
(administered either by it or by another entity) to make available longterm firm transmission rights, pursuant to section 217(b)(4) of the Federal
Power Act, that satisfy each of the
guidelines set forth in paragraph (d) of
this section. This section does not require that a specific type of long-term
firm transmission right be made available, and is intended to permit transmission organizations flexibility in
satisfying the guidelines set forth in
paragraph (d) of this section.
(b) Definitions. As used in this section:
(1) Transmission Organization means a
Regional Transmission Organization,
Independent System Operator, independent transmission provider, or
other independent transmission organization finally approved by the Commission for the operation of transmission
facilities.
(2) Load serving entity means a distribution utility or an electric utility
that has a service obligation.
(3) Service obligation means a requirement applicable to, or the exercise of
authority granted to, an electric utility under Federal, State, or local law
or under long-term contracts to provide electric service to end-users or to
a distribution utility.
(4) Organized Electricity Market means
an auction-based day ahead and real
time wholesale market where a single
entity receives offers to sell and bids to
buy electric energy and/or ancillary
services from multiple sellers and buyers and determines which sales and
purchases are completed and at what
prices, based on formal rules contained
in Commission-approved tariffs, and
where the prices are used by a transmission organization for establishing
transmission usage charges.
(c) General rule. (1) Every public utility that is a transmission organization
and that owns, operates or controls facilities used for the transmission of
electric energy in interstate commerce
and has one or more organized elec-

§ 42.1
tricity markets (administered either
by it or by another entity) must file
with the Commission, no later than
January 29, 2007, one of the following:
(i) Tariff sheets and rate schedules
that make available long-term firm
transmission rights that satisfy each of
the guidelines set forth in paragraph
(d) of this section; or
(ii) An explanation of how its current
tariff and rate schedules already provide for long-term firm transmission
rights that satisfy each of the guidelines set forth in paragraph (d) of this
section.
(2) Any transmission organization approved by the Commission for operation after January 29, 2007 that has
one or more organized electricity markets (administered either by it or by
another entity) will be required to satisfy this general rule.
(3) Filings made in compliance with
this paragraph (c) must explain how
the transmission organization’s transmission planning and expansion procedures will accommodate long-term
firm transmission rights, including but
not limited to how the transmission organization will ensure that allocated
long-term firm transmission rights remain feasible over their entire term.
(4) Each transmission organization
subject to this general rule must also
make its transmission planning and expansion procedures and plans publicly
available, including (but not limited
to) both the actual plans and any underlying information used to develop
the plans.
(d) Guidelines for Design and Administration of Long-term Firm Transmission
Rights.
Transmission
organizations
subject to paragraph (c) of this section
must make available long-term firm
transmission rights that satisfy the
following guidelines:
(1) The long-term firm transmission
right should specify a source (injection
node or nodes) and sink (withdrawal
node or nodes), and a quantity (MW).
(2) The long-term firm transmission
right must provide a hedge against
day-ahead locational marginal pricing
congestion charges or other direct assignment of congestion costs for the
period covered and quantity specified.
Once allocated, the financial coverage
provided by a financial long-term right

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Pt. 45

18 CFR Ch. I (4–1–16 Edition)

should not be modified during its term
(the ‘‘full funding’’ requirement) except in the case of extraordinary circumstances or through voluntary
agreement of both the holder of the
right and the transmission organization.
(3) Long-term firm transmission
rights made feasible by transmission
upgrades or expansions must be available upon request to any party that
pays for such upgrades or expansions in
accordance with the transmission organization’s prevailing cost allocation
methods for upgrades or expansions.
(4) Long-term firm transmission
rights must be made available with
term lengths (and/or rights to renewal)
that are sufficient to meet the needs of
load serving entities to hedge longterm power supply arrangements made
or planned to satisfy a service obligation. The length of term of renewals
may be different from the original
term. Transmission organizations may
propose rules specifying the length of
terms and use of renewal rights to provide long-term coverage, but must be
able to offer firm coverage for at least
a 10 year period.
(5) Load serving entities must have
priority over non-load serving entities
in the allocation of long-term firm
transmission rights that are supported
by existing capacity. The transmission
organization may propose reasonable
limits on the amount of existing capacity used to support long-term firm
transmission rights.
(6) A long-term transmission right
held by a load serving entity to support
a service obligation should be re-assignable to another entity that acquires that service obligation.
(7) The initial allocation of the longterm firm transmission rights shall not
require recipients to participate in an
auction.

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PART 45—APPLICATION FOR AUTHORITY
TO
HOLD
INTERLOCKING POSITIONS
Sec.
45.1
45.2
45.3
45.4
45.5
45.6

45.7
45.8
45.9

Form of application; filing procedure.
Contents of application.
Automatic authorization of certain
interlocking positions.

AUTHORITY: 16 U.S.C. 791a–825r, 2601–2645; 31
U.S.C. 9701; 42 U.S.C. 7101–7352; 3 CFR 142.
SOURCE: Order 141, 12 FR 8501, Dec. 19, 1947,
unless otherwise noted.
CROSS REFERENCES: For rules of practice
and procedure, see part 385 of this chapter.
For forms under rules of practice and regulations under the Federal Power Act, see part
131 of this chapter.

§ 45.1 Applicability; who must file.
(a) This part applies to any person
seeking to hold the following interlocking positions:
(1) Officer or director of more than
one public utility;
(2) Officer or director of a public utility and of any bank, trust company,
banking association, or firm that is authorized by law to underwrite or participate in the marketing of securities
of a public utility; or
(3) Officer or director of a public utility and of any company supplying electrical equipment to a public utility.
(b) Any person seeking to hold any
interlocking position described in § 45.2
of this chapter must do the following:
(1) Apply for Commission authorization under § 45.8 of this chapter; or
(2) If qualified, comply with the requirements for automatic authorization under § 45.9 of this chapter.
[Order 446, 51 FR 4904, Feb. 10, 1986]

§ 45.2 Positions requiring authorization.
(a) The positions subject to this part
shall include those of any person elected or appointed to perform the duties
or functions ordinarily performed by a
president, vice president, secretary,
treasurer, general manager, comptroller, chief purchasing agent, director or partner, or to perform any other
similar executive duties or functions,
in any corporation 1 within the purview
1 Corporation means any corporation, jointstock company, partnership, association,
business trust, organized group of persons,
whether incorporated or not, or a receiver or
receivers, trustee or trustees of any of the
foregoing. It shall not include municipalities
as defined in the Federal Power Act (sec. 3,
49 Stat. 838; 16 U.S.C. 796).

Applicability; who must file.
Positions requiring authorization.
Time of filing application.
Supplemental applications.
Supplemental information.
Termination of authorization.

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