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ARTICLE · 02 AUGUST 2006

Energy Client Alert, August 2006

Powell Goldstein LLP
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On July 20, 2006, the Federal Energy Regulatory Commission issued a final rule requiring transmission organizations in organized electricity markets to make available long-term firm transmission rights that satisfy the guidelines set forth in the final rule. (Docket No. RM06-8-000).

United StatesEnergy and Natural Resources
Richard Drom
Richard Drom
Jennifer Hein
Jennifer Hein

FERC ISSUES FINAL RULE RELATING TO LONG-TERM FIRM TRANSMISSION RIGHTS

On July 20, 2006, the Federal Energy Regulatory Commission ("FERC") issued a final rule requiring transmission organizations in organized electricity markets to make available long-term firm transmission rights (each, a "LTFTR") that satisfy the guidelines set forth in the final rule. (Docket No. RM06-8-000). The guidelines provide a framework within which the transmission organizations and their market participants can design and implement LTFTRs to allow parties to hedge congestion costs.

The purpose of the final rule is to provide increased certainty regarding the congestion cost risks of long-term transmission service in organized electricity markets. This certainty will help load-serving entities and other market participants make new investments and other long-term power supply arrangements. Specifically, the rule adopts seven guidelines:

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