Compliance Deadlines Approach for Implementing Order No. 890 (Open Access Transmission Service Policies)

Transcription

1 May 2007 Compliance Deadlines Approach for Implementing Order No. 890 (Open Access Transmission Service Policies) By Bill DeGrandis, Kirk Morgan and Eric Pogue On February 16, 2007, the Federal Energy Regulatory Commission ( FERC or the Commission ) issued its final rule ( Order No. 890 ) with respect to changes to its Open Access Transmission Rules that it had previously issued as part of Order Nos. 888 and 889. This is the first major revamping of the Commission s Open Access Policies and pro forma Open Access Transmission Tariff ( OATT ) in almost ten years. In an effort to increase transparency and eliminate barriers to the grid, the Commission has proposed substantive changes in areas of calculation and reporting of Available Transfer Capability ( ATC ). Many of the details will be worked out through various working committees of the North American Electric Reliability Corporation ( NERC ) and the North American Energy Standards Board ( NAESB ). Order No. 890, for the first time, required standards for transmission planning that public utility transmission providers will be required to adopt and also required such providers to amend their tariff to include details that would implement the Commission s transmission plan and principles. Similar to Order Nos. 888 and 889, the Commission does not seek to divest control over transmission or require corporate restructuring. The revisions instead have been targeted at strengthening the existing OATT to address certain deficiencies that have become apparent to the Commission over the past decade. As discussed in more detail below, various deadlines for implementing Order No. 890 are now approaching. The transmission providers strawman transmission planning filing must be filed by May 29, NERC/NAESB status reports and work plans for ATC and Open Access Same Time Information Systems ( OASIS ) are due by June 13, BACKGROUND/OVERVIEW In 1992, Congress, through the enactment of the Energy Policy Act of 1992, expanded the ability of the Commission through section 211 of the Federal Power Act ( FPA ) to compel utilities that owned or operated interstate transmission facilities to provide unbundled access to their transmission systems at cost based rates. The Commission was authorized to compel covered utilities to provide wheeling after development of a record on a case by case basis against individual utilities. But, by 1996, the Commission regarded the section 211 wheeling process as too cumbersome and attenuated. Recognizing that many of its policy objectives in the electric area depended on a more generic open access program, the Commission issued in that year its landmark Order Nos. 888 and 889. To remedy undue discrimination in the provision of electric transmission service, Order Nos. 888 and 889 required each public utility that owns, operates or controls facilities used for transmission in interstate commerce to offer unbundled transmission service pursuant to a pro forma OATT and to separate its transmission and merchant generation functions. Since then, the Commission has not proposed any universal changes to the core pro forma OATT, although under Order Nos and 2006, the Commission did require public utilities to amend their OATTs to add standardized interconnection procedures and agreements applicable to both large and small generators. Instead, with respect to the core pro forma OATT, the Commission has addressed issues on an ad hoc basis in response to transmission customer complaints and through consideration of deviations in the OATT of a particular public utility, filed pursuant to section 205 of the FPA, that the Commission has 18 Offices Worldwide Paul, Hastings, Janofsky & Walker LLP

2 determined to be consistent with or superior to the pro forma OATT s terms and conditions. In September 2005, the Commission issued a Notice of Inquiry ( NOI ) seeking comment on necessary reforms of the OATT. After hearing about deficiencies in the pro forma OATT for a number of years in various other Commission rulemakings that dealt with standard market design or Regional Transmission Organizations ( RTOs ), the Commission determined that reform of the open access rules was necessary to address deficiencies in the OATT that had become apparent since The Commission concluded that Order No. 888 did not eliminate the potential for undue discrimination and preference in providing transmission service and that public utilities continue to have the discretion and incentive to interpret and apply OATT provisions to their advantage. On May 19, 2006, the Commission issued a Notice of Proposed Rulemaking ( NOPR ), reaffirming the core elements of Order No. 888, but proposing reforms in the areas of transparency, regional coordination, transmission pricing, and non rate terms and conditions. Over 5,700 pages of comments were received in response to the NOPR and, in October 2006, a technical conference was held to discuss the key issues of the proposed revisions. In November 2006, the Commission issued a notice requesting supplemental comments specifically as to conditional firm service and the redispatch proposal of the Transparent Dispatch Advocates. All of these elements were taken under consideration in the completion of Order No Key Reforms: Consistency and Transparency in Calculation of ATC and Transmission Planning Of the final reforms, new rules requiring consistency and transparency of ATC calculations and participation in open and transparent regional transmission planning processes are the most significant. Order Nos. 888 and 889 do not specify a specific methodology for ATC calculation. Instead the transmission providers retain broad discretion in this area, which the Commission has determined presents an opportunity for them to discriminate against competitors. To combat the lack of consistency and transparency on this issue, Order No. 890 directs public utilities to work with NERC to develop consistent standards for calculating ATC and with NAESB to identify appropriate business practices to complement the standards developed by NERC. Transmission providers will be required to incorporate/post the new standards and business practices into their OATTs and OASIS. Similarly, Order No. 888 lacks specificity with respect to the transmission provider s planning obligations. This lack of clarity, coupled with what the Commission perceives to be a disincentive among transmission providers to remedy transmission congestion when doing so would reduce the value of their generation or otherwise would stimulate new entry or greater competition in their market area, has led the Commission to require in Order No. 890 that transmission providers participate in an open and transparent regional transmission planning process that adheres to certain core principles, including coordination, openness, transparency and comparability. Moreover, the Commission makes clear that it expects all transmission providers, including municipal, cooperative and other public power entities, to participate in the planning processes, consistent with their obligation to provide reciprocal transmission service. Additional Reforms Other reforms include: transmission pricing reforms with respect to imbalances, credits for customer owned transmission facilities and capacity reassignment; longer contract and notice requirements to qualify for rollover rights; addition of hourly firm point to point service; new methods for evaluating transmission service requests, including the obligation to use all available redispatch options to satisfy a request; a requirement to include credit review procedures in the OATT; new posting requirements with respect to designating and undesignating network resources; and posting requirements and penalties for failure to complete studies in a timely manner. Core Elements of Order No. 888 Reaffirmed Perhaps as significant as what the Commission changed are the core elements of Order Nos. 888 and 889 that the Commission retained. Key among them are retention of 2

3 Order No. 888 s comparability requirement, in which third party users of the transmission system must be dealt with in a manner comparable to the transmission owner s use of the system, including its transmission service to bundled customers. Also retained are the OATT s two forms of transmission service: network and point to point. Order No. 888 s protections for native load customers are also preserved. Specifically, transmission providers are not required to unbundle transmission service to their retail native load, nor are they required to place bundled retail service under the terms of the pro forma OATT. Transmission providers are also permitted to reserve, in their calculation of ATC, transmission capacity necessary to accommodate native load growth reasonably forecasted in their planning horizon. The Commission also chose to preserve the jurisdictional boundaries it established in Order No. 888, i.e., the Commission again chose not to exercise jurisdiction over the transmission component of bundled retail sales. Finally, Order No. 890 maintains Order No. 888 s reciprocity provisions for nonjurisdictional transmission owners and does not propose a generic rule to implement expanded authority to order nonpublic utilities to wheel pursuant to new FPA section 211A (sometimes referred to as FERC lite ) that was added as part of the Energy Policy Act of REHEARING AND COMPLIANCE FILING DEADLINES Requests for rehearing or clarification were due March 19, The Commission, by a tolling order issued April 12, 2007, granted further time to consider the rehearing requests. Those requests are still pending. Order No. 890 established a number of compliance requirements with corresponding deadlines. In response to several requests for extension of compliance deadlines, the Commission issued an Order Granting Extension of Compliance Action Dates on April 11, 2007 ( Order on Compliance Extension ). Under the Order on Compliance Extension, the reforms adopted in Order No. 890 are to be effective as of July 13, Pursuant to Order No. 890 and the Order on Compliance Extension, the following compliance actions are due as follows: April 16, 2007 Transmission providers that have not been approved as Independent System Operators ( ISOs ) or RTOs, and whose transmission facilities are not under the control of an ISO or RTO may submit an FPA section 205 filing seeking a determination that previously approved variations from the pro forma OATT that have been substantively affected by the reforms adopted in Order No. 890 continue to be consistent with or superior to the revised provisions of the pro forma OATT. May 29, 2007 Transmission providers must post a strawman proposal for each of the nine planning principles adopted in Order 890, including a specification of the broader region in which it will conduct coordinated regional planning. This strawman proposal should be posted on the provider s OASIS or on their website. June 13, 2007 Public utilities are to work through NERC to modify the ATC related reliability standards. In addition, NERC and NAESB are to submit a joint status report on standards and business practices development and a work plan to accomplish these tasks within the specified timeline. July 13, 2007 Non ISO/RTO transmission providers are required to submit FPA section 206 filings that contain the revised non rate terms and conditions set forth in Order No Only the revised tariff sheets are required to be filed and not the transmission provider s entire OATT. Transmission providers must submit redesigned transmission charges that reflect the Capacity Benefit Margin ( CBM ) set aside through a limited issue FPA section 205 rate filing as part of their initial ATC related compliance filings. September 11, 2007 Non ISO/RTO transmission providers are required to file their Attachment C (Methodology to Assess ATC). If any changes to NERC s and NAESB s reliability and business practice standards are implemented to achieve consistency, a revised Attachment C must be filed within 60 days of the completion of the NERC and NAESB processes. October 11, 2007 ISOs, RTOs and transmission providers within an ISO/RTO footprint are required to submit FPA section 206 filings that contain the revised non rate terms and conditions set forth in Order No Only the revised tariff sheets are required to be filed and not the 3

4 transmission provider s entire OATT. Non ISO/RTO transmission providers are required to file their Attachment K (Transmission Planning Process). ISOs and RTOs must file a demonstration that their planning processes are consistent with or superior to the planning processes in Order No After making compliance filings, public utility transmission providers will be permitted, as they were under Order No. 888, to submit filings pursuant to FPA section 205 proposing rates as well as non rate terms and conditions that differ from their existing tariffs or those set forth in the final rule, if the provisions are consistent with or superior to the pro forma OATT. SUMMARY OF REFORMS Generally, the reforms in Order No. 890 consist of (i) new rules to improve transparency and consistency in several critical areas of the OATT; (ii) new transmission planning requirements targeted at eliminating undue discrimination and supporting construction of new facilities; (iii) various OATT modifications aimed at eliminating opportunities for discrimination against new merchant generators; (iv) greater transparency and better access for customers to information; and (v) clarification of certain areas that have been prone to disputes over the past decade. The following is a summary of some of the more significant reforms: New Requirements to Enhance Consistency and Transparency of ATC Calculations The Commission places great importance on the calculation of ATC, stating in Order No. 890 that the ATC calculation is one of the most critical functions under the pro forma OATT because it determines whether transmission customers can access alternative power supplies and that the industry has not developed a consistent methodology for evaluating ATC nor have transmission providers adequately made their ATC calculation methodology transparent... [which has] creat[ed] the potential for undue discrimination in the provision of open access transmission service. Order No. 890 concludes that industry wide consistency of all ATC components (i.e., Total Transfer Capability ( TTC ), Existing Transmission Commitments ( ETC ), CBM, and Transmission Reliability Margin ( TRM )) and certain data inputs and exchange, modeling assumptions, calculation frequency, and coordination of data relevant for calculation of ATC will reduce the opportunities for the exercise of discretion that may lead to such undue discrimination. Rather than requiring a single industry wide calculation methodology, the Commission concluded in Order No. 890 that, if all of the ATC components and certain data inputs and assumptions are consistent, the use of any of the three ATC calculation methodologies included in the reliability standards currently being developed by NERC is acceptable. Consistent with the NOPR, Order No. 890 directs public utilities, working through NERC and NAESB and following the specific guidance provided by the Commission in Order No. 890, to work together to modify the ATC related reliability standards and business practices. Order No. 890, however, extends the timeline provided by the NOPR. Specifically, Order No. 890 directs public utilities, working through NERC, to modify the ATC related reliability standards within 270 days after the March 15, 2007 publication of Order No. 890 in the Federal Register; and Order No. 890 directs public utilities to work through NAESB to develop business practices that complement NERC s new reliability standards within 360 days of the March 15, 2007 publication of Order No. 890 in the Federal Register. Lastly, the Commission directs NERC and NAESB to file, within 90 days of the publication of Order No. 890 in the Federal Register, a joint status report on standards and business practices development and a work plan for completion of the task within the established timeframe. The Commission adopted its proposal from the NOPR to increase transparency regarding ATC calculations by requiring each transmission provider to set forth its ATC calculation in Attachment C to its OATT. In Attachment C, transmission providers are required to: (i) identify which NERC approved methodologies are employed; (ii) provide a detailed description of the specific mathematical algorithm used to calculate firm and non firm ATC for the scheduling horizon, operating horizon and planning horizon; (iii) include a process flow diagram that describes the various steps taken in performing the ATC calculation; (iv) set forth a definition of each ATC component (i.e., TTC, ETC, TRM, and CBM) and a detailed explanation of how each component is derived; and (v) provide a narrative description detailing the transmission provider s CBM. Transmission providers are required, under Order 4

5 No. 890, to file a revised Attachment C within 60 days of the completion of the NERC and NAESB processes, which incorporates any changes resulting from NERC s and NAESB s revised reliability standards and business practices related to ATC calculations. In order to increase transparency, Order No. 890 also enhances the ability of customers and potential customers to access ATC related information by requiring transmission providers to post much more detailed information and to update it more frequently. For example, Order No. 890 requires transmission providers to post a brief, but specific, narrative explanation of the reason for any change in monthly and yearly ATC values on a constrained path. Transmission providers are also required to post and maintain the reason for a denial of a request for service for five years. Coordinated, Open and Transparent Planning Another perceived shortcoming of Order No. 888 which the Commission hopes to remedy through Order No. 890 is the lack of clarity in the transmission provider s planning obligations. To eliminate the potential for undue discrimination through the planning process, Order No. 890 requires all public utilities to participate in a coordinated, open and transparent transmission planning process on both a local and regional level. Furthermore, each public utility transmission provider is required to file with the Commission, within 210 days after the publication of Order No. 890 in the Federal Register, a new Attachment K to its OATT containing a coordinated and regional planning process that complies with nine coordinated and regional planning principles or demonstrates that the transmission provider s existing coordinated and regional planning process is consistent with or superior to such principles. The nine principles are: (1) Coordination the transmission provider must meet with all of its transmission customers and interconnected neighbors to develop a transmission plan on a nondiscriminatory basis; (2) Openness transmission planning meetings must be open to all affected parties (including all transmission and interconnection customers, and state commissions); (3) Transparency the transmission provider is required to disclose to all customers and other stakeholders the basic criteria, assumptions, and data that underlie its transmission system plans; (4) Information Exchange network transmission customers and point to point customers are required to submit information on their projected loads, resources and service needs, as applicable, on a comparable basis; (5) Comparability after considering input from market participants, the transmission provider is to develop a transmission system plan that: (i) meets the specific service requests of its transmission customers; and (ii) otherwise treats similarly situated customers comparably; (6) Dispute Resolution the transmission provider (i) must propose a dispute resolution process; (ii) must, in the event that an existing process is utilized, specifically address how its procedures will be used to address planning disputes; and (iii) continues to be encouraged to utilize the Commission s Dispute Resolution service; (7) Regional Participation the transmission provider is required to coordinate with interconnected systems to: (i) share system plans to ensure that they are simultaneously feasible and otherwise use consistent assumptions and data; and (ii) identify system enhancements that could relieve significant and recurring transmission congestion; (8) Congestion Studies the transmission provider is required annually to prepare studies identifying significant and recurring congestion (considerate of both reliability and economic concerns) and to post such studies on its OASIS; and (9) Cost Allocation the transmission provider is required to address the manner in which the costs of new transmission are allocated. Note this principle was not included in the NOPR, but was added to Order No. 890 in response to comments received by the Commission. In order to assist transmission providers in complying with Order No. 890, and to ensure that the planning procedures are developed with customer and stakeholder participation, the Commission plans to convene staff technical conferences in several broad regions around the country to discuss regional 5

6 implementation and other compliance issues. The Commission plans to hold such conferences throughout June 2007 and asks that each transmission provider, by May 29, 2007, post a strawman proposal in order to facilitate such conferences. Order No. 890 makes clear that the Commission expects all non public utility transmission providers to participate in the planning processes required by th[e] Final Rule, consistent with their obligation to provide reciprocal transmission service. Moreover, the Commission also states that, if it finds that nonpublic utility transmission providers are not participating in the planning processes required by Order No. 890, the Commission may exercise its authority under section 211A of the FPA on a case by case basis to require such participation. Also, although not requiring that public utilities cede control of the planning process to an independent third party, Order No. 890 encourages the use of an independent third party to oversee or coordinate the planning process, thereby providing greater confidence in the process and resulting studies. Transmission Pricing Reforms Energy and Generation Imbalance Charges To remedy what the Commission perceives to be excessive imbalance charges that are many times unrelated to the transmission provider s cost of providing the service, Order No. 890 adopted the following pro forma OATT imbalance provisions: (i) imbalances of less than or equal to 1.5 percent of the scheduled energy (or two megawatts, whichever is larger) will be netted on a monthly basis and settled financially at 100 percent of incremental or decremental cost at the end of each month; (ii) imbalances between 1.5 and 7.5 percent of the scheduled amounts (or two to ten megawatts, whichever is larger) will be settled financially at 90 percent of the transmission provider s system decremental cost for over scheduling imbalances that require the transmission provider to decrease generation or 110 percent of the incremental cost for under scheduling imbalances that require increased generation in the control area; and (iii) imbalances greater than 7.5 percent of the scheduled amounts (or 10 megawatts, whichever is larger) will be settled at 75 percent of the system decremental cost for overscheduling imbalances or 125 percent of the incremental cost for under scheduling imbalances. Order No. 890 states that these provisions are consistent with the principles, set forth first in the NOPR, that all imbalance charges be related to the cost of correcting the imbalance, be tailored to encourage accurate scheduling behavior, and account for the special circumstances presented by intermittent generators. As it did in the NOPR, the Commission also reiterated its view that inadvertent energy exchanges between control areas should be treated differently than imbalances. Capacity Reassignment Pricing In the NOPR, the Commission proposed abolishing the existing cap on the reassignment of point to point service, but keeping the cap for capacity reassigned by a transmission provider s merchant function or its affiliates. In Order No. 890, the Commission went a step further than its proposal in the NOPR and lifted the price cap for all transmission customers reassigning transmission capacity. The Commission explained that retaining the price caps for any portion of the market would continue to impair development of the secondary market. Crediting of Customer Owned Facilities In the NOPR, the Commission proposed carrying over the existing criteria for crediting of customer owned facilities, including the integration and benefits requirement, but eliminating the requirement that new facilities can receive credits only if they are jointly planned with the transmission provider. The Commission reasoned that the joint planning requirement acts as a disincentive for transmission providers to jointly plan facilities because of their concern that their bundled ratepayers will then be required to share in the cost of the facilities constructed. In response to the comments it received, the Commission adopted the NOPR s proposal to sever the link in the pro forma OATT between joint planning and credits for new facilities owned by network customers. Order No. 890 also stipulates that, to receive credits, a showing must be made that a network customer s facilities provide benefits to the transmission provider s grid. However, to ensure comparability, Order No. 890 also stipulates that a presumption of integration will be afforded to transmission customer facilities if it is shown that, if owned by the transmission provider, such facilities would be eligible for inclusion in the transmission provider s rate base. Non-Rate Terms and Conditions Redispatch Options to Satisfy Point to Point Transmission Service Requests In the NOPR, the Commission proposed requiring that a transmission provider must use all of its available redispatch options to satisfy a request for firm point to point service and, at the 6

7 transmission customer s option, these redispatch options must be studied before the customer is obligated to incur the costs and time delays associated with a facilities study. In the alternative, the Commission sought comment on whether transmission providers should be required to offer conditional firm service that would be subject to curtailment prior to firm service, but only for a limited number of hours of the year. The Commission reasoned that these reforms were necessary to ensure comparability because of its determination that, when considering new resources to serve bundled retail native load, the transmission provider will not eliminate an otherwise economic option because the resource may not be deliverable in a few hours of the year. Instead, the transmission provider will evaluate whether it can redispatch its resources as necessary to ensure that load is served on a reliable and economic basis. In Order No. 890, the Commission stated that the redispatch requirement and the creation of a conditional firm option were both necessary for provision of reliable and non discriminatory point to point transmission service. Accordingly, Order No. 890 requires that, if planning redispatch is unavailable from the transmission provider s resources or inadequate to meet customers needs, transmission providers have an independent obligation to offer conditional firm, if available, as part of the firm point to point service. Rollover Rights Order No. 890 revised the rollover rights provision of the OATT to apply to contracts that have a minimum term of five years (rather than the current one year) and to require a transmission customer intending to roll over service to provide no less than one year s notice prior to the expiration date of the existing agreement (rather than the current 60 day period). The changes are intended to address concerns by transmission providers about the previous rollover procedures that made it difficult for them to plan their system and remarket capacity in the event that a current customer decided not to roll over service. Processing of Study Requests The NOPR proposed to require transmission providers to report the length of time they take to complete studies under the OATT by posting on OASIS metrics that track their performance in processing system impact studies and facilities studies associated with requests for transmission service. Operational penalties would be imposed when transmission providers routinely failed to meet the 60 day deadlines prescribed in the OATT. Although the NOPR proposed that RTOs not be subject to penalties because of their apparent lack of any incentive to delay competitors by failing to complete studies in a timely manner, Order No. 890 declined to exempt RTOs from operational penalties for completing studies on an untimely basis. Designation of Network Resources Order No. 890 requires a number of clarifications with respect to the types of agreements that may be designated as network resources. Importantly, Order No. 890 reiterates that for any power purchase agreement a network customer must be able to specify all of the information required by section 29.2(v) of the pro forma OATT (e.g., source of supply, control area location, transmission arrangements and delivery point(s) to the transmission provider s transmission system) or it cannot be designated as a network resource. All entities submitting applications for network service are also required to include a statement with the application that attests that, for each network resource identified in the application for service: (i) the transmission customer owns or has committed to purchase the designated network resource; and (ii) the designated network resource comports with the requirements for designated network resources. Order No. 890 also requires that the transmission provider and network customers must designate, undesignate and redesignate network resources in accordance with the OATT and that they may not engage in firm sales from a currently designated network resource. Transparency of Credit Terms Order No. 890 requires transmission providers to include their creditworthiness and security requirements in their OATTs. Enforcement Order No. 890 states that the Commission will address OATT violations and appropriate responses on a case by case basis. Order No. 890 also stipulates that, where appropriate, the Commission staff will conduct compliance audits. IMPLICATIONS To some industry participants, Order No. 890 is long overdue. Order No. 888 was a groundbreaking initiative, requiring all public utility transmission owners/operators to provide unbundled access to their systems, regardless of whether there had ever been any allegations that they had denied such access in the past. Given the substantial change in the utility industry 7

8 triggered by Order No. 888, it is inevitable that after ten years certain reforms or changes would be identified. Many of the changes are more aptly described as refinements to the existing Order No. 888 OATT, rather than wholesale changes. Order No. 890 does take bold steps toward imposing consistent and transparent processes for calculating ATC and conducting the transmission planning requirements that may especially impact the areas of the country where there has not been much coordinated transmission planning between public utilities, municipal utility systems and electric cooperatives. The Commission has expressed concern as to what it views as the lack of construction of new transmission facilities around the country and hopes that its transmission planning initiatives in the context of OATT reform and its new rules on attracting new transmission investment will help spur further transmission facility construction. In many ways, Order No. 890 reflects a balance between transmission providers and transmission customers. Notice provisions for exercising rollover rights are lengthened, responding to transmission providers concerns that they had inadequate notice in which to plan long term transmission system upgrades to meet their customers demands. Transmission customers strongly favor the increase in transparency in ATC calculations, and hope to see much more uniform ATC calculations in transmission providers around the country. centralized market for capacity, energy or ancillary services. The improvements to ATC should help improve the bilateral capacity and energy markets in non RTO areas, enabling suppliers and customers to more readily identify ATC that could be utilized for their transactions. Transmission planning reforms might lead to relieving transmission bottlenecks or impediments that adversely affected the ability of suppliers to reach customers. Order No. 890 is also notable for what it does not change. Order No. 890 proposes to carry forward the foundation of Order No. 888 unaltered. Order No. 890 does not propose to establish new market structures. Transmission providers will not be forced into divesting control over transmission. The existing jurisdictional boundary between federal and state remains. Protections for native load customers remain. In that respect, Order No. 890 is very much an evolutionary proposal that builds upon the Order No. 888 OATT rather than moving the industry in an entirely new direction. Because of the broad scope of the reforms proposed in Order No. 890 and the fact that the OATT is at the heart of the wholesale electric industry, touching upon most aspects of the businesses of transmission providers and transmission customers alike, it is important for entities with an interest in this area to understand the proposed reforms and appreciate how they might affect their business. The reforms of Order No. 890 should also help industry participants in non RTO markets where there is no If you have any questions or need any additional information regarding these issues, please do not hesitate to contact one of the following Energy Team members in the Washington, D.C. office: Charles Patrizia charlespatrizia@paulhastings.com Bill DeGrandis billdegrandis@paulhastings.com Kirk Morgan kirkmorgan@paulhastings.com Eric Pogue ericpogue@paulhastings.com 18 Offices Worldwide Paul, Hastings, Janofsky & Walker LLP is published solely for the interests of friends and clients of Paul, Hastings, Janofsky & Walker LLP and should in no way be relied upon or construed as legal advice. For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. These materials may be considered ATTORNEY ADVERTISING in some states. Paul Hastings is a limited liability partnership. Copyright 2007 Paul, Hastings, Janofsky & Walker LLP. IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations governing tax practice, you are hereby advised that any written tax advice contained herein or attached was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code. 8