PL983000.docx

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
PROCESS FOR ASSURING NON-)
DISCRIMINATORY TRANSMISSION)
SERVICES AS NEW RELIABILITY)DOCKET NO. PL98-3-000
RULES ARE DEVELOPED FOR )
USING THE TRANSMISSION )
SYSTEM)
___________________________________)
THE IDAHO PUBLIC UTILITIES COMMISSION’S COMMENTS
FILED IN RESPONSE TO THE FEBRUARY 20, 1998, CONFERENCE
On January 5, 1998, the Federal Energy Regulatory Commission announced its intention to convene a public conference to discuss procedural approaches to addressing the effect of new reliability standards on jurisdictional electric transmission service.  Notice, 63 Fed. Reg. 1453-1454.  On February 2, 1998, the Commission disclosed the membership of the round table discussion group and invited interested parties to file written responses to the conference by March 2, 1998.  Notice, 63 Fed. Reg. 6559-6560.  The public conference was held February 20, 1998.  Pursuant to the February 2, 1998, Federal Register Notice, the Idaho Public Utilities Commission (IPUC) files its written response to procedural models proposed at the public conference.
The IPUC has statutory jurisdiction over rates and services of investor owned utilities providing services to customers in the state of Idaho and is authorized to require reasonable services and facilities at just and reasonable rates.  As a regulator, it therefore is interested in the process the Commission adopts for addressing the effect of new reliability standards on jurisdictional electric transmission service.  It recognizes the Commission’s commitment to rules and practices for reliable operation of the grid that are compatible with open, non-discriminatory use of transmission systems.
While several methods for sustaining reliability in a competitive market were advocated at the public conference, absent new federal legislation, the IPUC concludes that the appropriate organization to set reliability standards is the lowest level organization.  The lowest level organization is one where the impacts from its decisions are confined to the organization’s geographical boundaries.  By assigning the responsibility for setting and enforcing reliability criteria to the lowest level organization possible, avoiding external impacts, reliability standards are more likely to be appropriate, measurable and enforceable, and the organization setting and enforcing the standards will be more accountable and accessible.  
To fulfill its current responsibilities, the Commission should adopt a reliability policy statement that establishes procedures for determining whether the lowest level organization’s reliability standards cause external electrical impacts and for considering whether, in those instances, the standards are in the public interest.  At a minimum, when reviewing a proposed reliability standard, the Commission should presume, until demonstrated otherwise, that the proposed standard is in the public interest if the proposed standard is adopted by an organization that meets the following criteria:
1. The composition and voting procedures of the board of directors of the organization ensures non-discrimination in the development and enforcement of standards.  No segment of the industry or geographic subregion apparently dominates board decisions.
2.  The organization’s decision process is open and clear.
3.  Enforcement and adjudication of enforcement actions are separate.
4.  The organization explicitly identifies the commercial and economic impacts of a proposed reliability standard prior to adoption of the standard.
5.  The organization’s reliability standards are measurable.
6.  The organization clearly identifies which entities are responsible for compliance with standards.
7.  The organization’s legal authority and accountability for setting and enforcing standards is clear and unambiguous.
8.  The organization has availed itself of expertise in the operation of the transmission system.
9.  The organization’s standards are consistently developed and enforced for all affected entities, regardless of whether such entities are located in Canada, Mexico or the United States.
If the proposed standard has been approved by the appropriate state/provincial regulatory agencies in the affected geographic area, the Commission should adopt the proposed standard.  
Challenges to existing reliability standards should be treated similarly.  Where the existing standard was adopted by an organization meeting the above criteria, the Commission should give it deference.  Likewise, the Commission should accept any standard previously approved by the appropriate state/provincial regulatory agencies.
The IPUC supports this process because it is consistent with the Federal Power Act and is efficient.  
Respectfully submitted this                 day of March 1998.
                                                                                                                                      DENNIS S. HANSEN, PRESIDENT
                                                                                           RALPH NELSON, COMMISSIONER

MARSHA H. SMITH, COMMISSIONER
ATTEST:

Myrna J. Walters
Commission Secretary