accepting those filings on the ground that Paiute's use of the purchase deficiency mechanism to allocate fixed take-or-pay charges violates the filed rate doctrine.

Paiute's tariff provisions authorizing the passthrough, on an as-billed basis, to Paiute's customers of the fixed take-or-pay charges billed to Paiute by Northwest are currently stayed by Order No. 528.

Paiute's Motion

On January 11, 1991, Paiute filed a motion to have its flowthrough of the costs billed it by Northwest pursuant to Northwest's first four Order No. 500 filings exempted from Order No. 528. Paiute states that in its December 14, 1990 order in Docket No. RM91-2-000,1 the Commission found, among other things, that the orders in Docket Nos. RP89-137-000, RP89-219-000, RP90-50-000, and RP90-90-000 approving Northwest's first four Order No. 500 filings were final and nonappealable on the filed rate doctrine. Paiute further states that no party protested any of its filings or sought rehearing of the Commission orders accepting those filings on the ground that Paiute's use of the purchase deficiency method for allocating fixed take-or-pay charges violates the filed rate doctrine. Accordingly, Paiute requests that its take-or-pay flowthrough filings related to the four filings of Northwest found to be exempt from the stay of Order No. 528 be included in the category of filings that have become final and nonappealable and are, therefore, not sub

ject to the stay of Order No. 528.5 No party opposes Paiute's motion.

Discussion

The Commission has granted motions exempting the filings of downstream pipelines from Order No. 528 where (1) their filings have become final and nonappealable and (2) they passthrough take-or-pay costs from upstream pipelines whose own take-or-pay filings are exempt from Order No. 528.6 Since no party protested Paiute's filings or sought rehearing of the Commission orders accepting those filings on the ground that Paiute's use of the purchase deficiency method for allocating fixed take-orpay charges violates the filed rate doctrine, Paiute's recovery mechanism is final and nonappealable. Paiute is also correct in its assertion that the orders in Docket Nos. RP89-137-000, RP89-219-000, RP90-50-000, and RP90-90-000 approving Northwest's recovery of fixed take-or-pay charges based on the purchase deficiency mechanism are final and nonappealable. Accordingly, the Commission will grant Paiute's motion to have its flowthrough of the costs billed it pursuant to Northwest's first four Order No. 500 filings exempted from Order No. 528.7

The Commission orders:

Paiute's motion to have its flowthrough of the costs billed it pursuant to Northwest's first four Order No. 500 filings exempted from Order No. 528 is granted.

4 53 FERC 61,380 (1990).

5 In its December 14, 1990 order, the Commission found that the order in Docket No. RP90-118-000 accepting Northwest's filing to recover fixed take-orpay charges based on the purchase deficiency method is not final and nonappealable. On January 30, 1991, the Commission issued a suspension order, which among other things, accepted Northwest's proposal to recover the costs in Docket No. RP90-118-000 through a volumetric surcharge on all throughput.' That volumetric surcharge, together with Northwest's presently effective volumetric surcharge will result in Northwest recovering 75 percent of the costs in

On March 16, 1990, Arizona Public Service Company (Arizona) filed a request for rehearing.

Background

On January 5, 1990, Arizona Public Service Company (Arizona) filed a reciprocal distribution wheeling service agreement, designated Rate Schedule FERC No. 178, entered into by Arizona and Electrical District No. 2, to provide for reciprocal wheeling service to points of delivery within their respective retail service territories. Arizona also filed a reciprocal emergency service agreement, designated Supplement No. 1 to Rate Schedule FERC No. 178, entered into by Arizona and Electrical District No. 2, to provide for reciprocal emergency deliveries of power and energy in the event of an outage on the distribution facilities of either utility.2 Arizona states that there is no rate or charge for these services as they are to cure potential operating difficulties and to enable a pending settlement to be consummated.3

By letter dated February 14, 1990, the Secretary required a filing fee of $6,630.00 from Arizona in connection with its filing of the service agreement.4 Arizona urges the Commission to reverse the Secretary's assessment of the fee for two reasons. First, Arizona contends that the service agreement proposed no change in its filed rates and therefore is exempt from a fee under the Commission's regulations because it has "no effect on the rate the utility

Arizona originally filed an appeal of staff action. However, on December 3, 1990, the Commission issued a final rule in Docket No. RM90-11-000 amending Rule 1902 of the Commission's Rules of Practice and Procedure, 18 C.F.R. § 385.1902. Order No. 530, 55 Fed. Reg. 50,677 (1990), FERC Statutes and Regulations ¶ 30,906 (1990), reh'g denied, Order No. 530-A, [FERC Statutes and Regulations 30,914] (1991). Order No. 530 eliminated appeals of staff action as an intermediate step prior to rehearing. Order No. 530 became effective on its date of issuance.

2

These two agreements will be collectively referred to as the "service agreement."

3 The service agreement is part of a comprehensive settlement intended to resolve over 20 years of litigation between Arizona and Electrical District No. 2 involving disputes over retail territorial service rights in Pinal County, Arizona. This settlement was filed with the Arizona Corporation Commission (Arizona Commission) on March 5, 1990. The settlement involves local distribution issues, and, to cover certain potential future operating difficulties, the parties entered into the service agreement.

4 Arizona did not submit the $6,630 fee requested by the Secretary.

5 18 C.F.R. § 381.502(b) as it existed at the time provided: "There is no fee charged for rate schedule filings under sections 205 and 206 of the Federal

The narrow issue presented here is whether the Secretary erred in assessing a fee of $6,630.00 for the filing of the service agreement. However, a necessary threshold determination is whether the Commission's filing fees for rate schedule filings under sections 205 and 206 of the Federal Power Act, as effective pursuant to Commission Order Nos. 494 and 494-A, are fair and based on the Commission's costs as required by the IOAA.?

In recent proceedings, various utilities have challenged the Commission's filing fees for electric rate filings on the grounds that the fees violated the IOAA.8 Those cases were remanded at the request of the Commission so that the Commission might reconsider its orders and potentially dispose of the grounds for appeal.9

Under the IOAA, the Commission is authorized to establish fees for the services and benefits the Commission provides. Under the generic order establishing the particular filing fees that existed at the time this dispute arose, the Commission set its filing fees based on the work associated with review of filings10 and

Power Act which have no effect on the rate the utility charges or which involve only rate decreases."

631 U.S.C. § 9701(b) (1988).

7 Filing Fees under the Independent Offices Appropriations Act of 1952, Order No. 494, FERC Statutes and Regulations 30,809, at pp. 31,087, 31,096, reh'g denied, Order No. 494-A, 43 FERC 61,464 (1988) (codified at 18 C.F.R. § 381.502 (1989)); see also 54 Fed. Reg. 12,901 (1989). These orders made effective the filing fee at issue here.

8

Southwestern Electric Power Company v FERC, Nos. 88-1507, 1518 and 1546 (D.C. Cir. remanded August 11, 1989) (Challenge of fees imposed under Commission's Order No. 435, effective November 4, 1985 through May 30, 1988); Central Illinois Public Service Company v. FERC, No. 88-1545 (D.C. Cir, remanded August 11, 1989) (Challenge of fees imposed under Commission's Order Nos. 494 and 494-A, effective May 31, 1988).

9 See, e.g., Commission's Motion for Remand at 2, Central Illinois Public Service Company v. FERC, No. 88-1545 (D.C. Cir. remanded August 11, 1989).

10 See, e.g., FERC Statutes and Regulations 30,809, at pp. 31,088-89. As discussed infra, our latest generic order establishing filing fees also sets filing fees based on the work associated with review of filings.

pursuant to that order was entitled to assess a filing fee of $6,630. However, in recognition of the fact that the specific filing fee at issue here was challenged by Arizona in the instant rehearing, that the generic order establishing that particular filing fee was challenged and subsequently remanded to the Commission at our request, that the Commission subsequently changed its filing fees, in part, for the reasons Arizona asserts on rehearing, and that the Commission could have applied the new filing fees (which are lower than the pre-existing fees) retroactively on a generic basis, we believe it appropriate to exercise our discretion in this proceeding and to impose a lesser filing fee. We believe that our latest generic order establishing filing fees provides a reasonable and justifiable filing fee to impose in these circumstances. Accordingly, as explained more fully below, rather than assess a filing fee of $6,630, we will instead assess a filing fee of $2,970.

13

As just noted, the Commission has adopted a new fee schedule.11 The adoption of the new fee schedule addresses the issues identified by the court in Raton Gas Transmission Company v. FERC 12 and resolves the matters set forth in the Commission's motion for remand in Southwestern Electric Power Company v. FERC and Central Illinois Public Service Company v. FERC.14 Under the new fee schedule, filings will be assigned to one of five fee classes based on the type of filing, ranging from the simplest rate schedule filings to the most complex. The fee is based on the actual cost to the Commission of processing an average filing within each class. The new fee schedule also implements categorical reductions proposed in order to ameliorate potential unfairness or hardship.

Under the new fee schedule, Class II rate filings are those filings under sections 205 and 206 of the Federal Power Act that have an effect on the rate the utility charges but do not involve rate decreases or rate increases. After reexamining Arizona's January 5, 1990 filing, the Commission finds that Arizona's filing is a Class II filing under the new fee schedule since Arizona's January 5, 1990 filing extends an existing service and rate to a customer not previously taking such service and, thus, has an effect on rates which is neither a rate increase or rate decrease.1 16 Accordingly, the appropriate filing fee is a Class II filing fee, or $2,970. This is $3,660 less than the fee originally assessed under the old fee schedule.

Arizona argues that even if the filing of the service agreement is properly deemed to affect its rates, the assessed fee is illegal because it is not justified by the Commission's costs as required by the IOAA. However, we are apply. ing the new filing fee rule, which explicitly takes into consideration the IOAA in determining the fair and appropriate fee and thus explicitly responds to the company's concern. 12

17

We conclude, for the foregoing reasons, that Arizona's rehearing request should be denied, and a payment be ordered.

The Commission orders:

(A) Arizona request for rehearing is hereby denied.

(B) Arizona is hereby directed to pay a filing fee of $2,970.

On March 15, 1990, Southwestern Electric Power Company (Southwestern) filed a request for rehearing.1

Background

On December 28, 1989, Southwestern submitted for filing a letter agreement with Central Louisiana Electric Company (Central Louisiana). Central Louisiana will purchase up to 40 MW of power and associated energy from Oklahoma Gas and Electric Company (Oklahoma Gas). Central Louisiana and Oklahoma Gas are not directly interconnected. The letter agreement provides that Southwestern will transmit the power and associated energy on Central Louisiana's behalf from Southwestern's interconnection with Oklahoma Gas to Southwestern's interconnection with Central Louisiana.

By letter dated February 14, 1990, the Secretary required a filing fee of $6,630.00 from Southwestern in connection with its filing of the letter agreement.2 Southwestern urges the Commission to reverse the Secretary's assessment of the fee for two reasons. First, Southwestern contends that the amendment proposed no change in its filed rates and therefore is exempt from a fee under the Commission's regulations because it has "no effect on the rate the utility charges."3 Second, Southwestern maintains that even if the filing of the amendment is properly deemed to affect its rates, the assessed fee is illegal because it is not justified by the Commission's costs as required by the Independent Offices Appropriations Act (IOAA).4

Southwestern originally filed an appeal of staff action. However, on December 3, 1990, the Commission issued a final rule in Docket No. RM90-11-000 amending Rule 1902 of the Commission's Rules of Practice and Procedure, 18 C.F.R. § 385.1902. Order No. 530, 55 Fed. Reg. 50,677 (1990), FERC Statutes and Regulations ¶ 30,906 (1990), reh'g denied, Order No. 530-A, [FERC Statutes and Regulations 30,914] (1991). Order No. 530 eliminated appeals of staff action as an intermediate step prior to rehearing. Order No. 530 became effective on its date of issuance.

2 Southwestern did not submit the $6,630 fee requested by the Secretary.

3 18 C.F.R. § 381.502(b) as it existed at that time provided: "There is no fee charged for rate schedule filings under sections 205 and 206 of the Federal Power Act which have no effect on the rate the utility charges or which involve only rate decreases."

431 U.S.C. § 9701(b) (1988).

5 Filing Fees under the Independent Offices Appropriations Act of 1952, Order No. 494, FERC Statutes and Regulations 30,809, at pp. 31,087,

Discussion

The narrow issue presented here is whether the Secretary erred in assessing a fee of $6,630.00 for the filing of the letter agreement. However, a necessary threshold determination is whether the Commission's filing fees for rate schedule filings under sections 205 and 206 of the Federal Power Act, as effective pursuant to Commission Order Nos. 494 and 494-A, are fair and based on the Commission's costs as required by the IOAA.5

In recent proceedings, Southwestern and other utilities have challenged the Commission's filing fees for electric rate filings on the grounds that the fees violated the IOAA.6 Those cases were remanded at the request of the Commission so that the Commission might reconsider its orders and potentially dispose of the grounds for appeal.?

Under the IOAA, the Commission is authorized to establish fees for the services and benefits the Commission provides. Under the generic order establishing the particular filing fees that existed at the time this dispute arose, the Commission set its filing fees based on the work associated with review of filings and pursuant to that order was entitled to assess a filing fee of $6,630. However, in recognition of the fact that the specific filing fee at issue here was challenged by Southwestern in the instant rehearing, that the generic order establishing that particular filing fee was challenged and subsequently remanded to the Commission at our request, that the Commission subsequently changed its filing fees, in part, for the reasons Southwestern asserts on rehearing, and that the Commission could have applied the new filing fees (which are lower than the pre

31,096, reh'g denied, Order No. 494-A, 43 FERC 61,464 (1988) (codified at 18 C.F.R. § 381.502 (1989)); see also 54 Fed. Reg. 12,901 (1989). These orders made effective the $6,630 fee at issue here.

6 Southwestern Electric Power Company v. FERC, Nos. 88-1507, 1518 and 1546 (D.C. Cir. remanded August 11, 1989) (Challenge of fees imposed under Commission's Order No. 435 [FERC Statute and Regulations, Regulations Preambles 1982-198530,663], effective November 4, 1985 through May 30, 1988); Central Illinois Public Service Company v. FERC, No. 88-1545 (D.C. Cir, remanded August 11, 1989) (Challenge of fees imposed under Commission's Order Nos. 494 and 494-A, effective May 31, 1988).

7 See, e.g., Commission's Motion for Remand at 2, Central Illinois Public Service Company v. FERC, No. 88-1545 (D.C. Cir. remanded August 11, 1989).

8 See, e.g., FERC Statutes and Regulations at pp. 31,088-89. As discussed infra, our latest generic order establishing filing fees also sets filing fees based on the work associated with review of filings.

existing fees) retroactively on a generic basis, we believe it appropriate to exercise our discretion in this proceeding and to impose a lesser filing fee. We believe that our latest generic order establishing filing fees provides a reasonable and justifiable filing fee to impose in these circumstances. Accordingly, as explained more fully below, rather than assess a filing fee of $6,630, we will instead assess a lesser filing fee of $2,970.

As just noted, the Commission has adopted a new fee schedule. The adoption of the new fee schedule addresses the issues identified by the court in Raton Gas Transmission Company v. FERC 10 and resolves the matters set forth in the Commission's motion for remand in Southwestern Electric Power Company v. FERC 11 and Central Illinois Public Service Company v. FERC 12 Under the new fee schedule, filings will be assigned to one of five fee classes based on the type of filing, ranging from the simplest rate schedule filings to the most complex. The fee is based on the actual cost to the Commission of processing an average filing within each class. The new fee schedule also implements categorical reductions proposed in order to ameliorate potential unfairness or hardship. The Commission will apply the new fee schedule to Southwestern's filing. 13

Under the new fee schedule, Class II rate filings are those filings under sections 205 and 206 of the Federal Power Act that have an effect on the rate the utility charges but do not

involve rate decreases or rate increases. After reexamining Southwestern's December 28, 1989 filing, the Commission finds that Southwestern's filing is a Class II filing under the new fee schedule since Southwestern's December 28, 1989 filing extends an existing service and rate to a customer not previously taking such service and, thus, has an effect on rates which is neither a rate increase or rate decrease.14 Accordingly, the appropriate filing fee is a Class II filing fee, or $2,970. This fee is $3,660 less than the filing fee originally assessed under the old fee schedule.

Southwestern argues that even if the filing of the amendment is properly deemed to affect its rates, the assessed fee is illegal because it is not justified by the Commission's costs as required by the IOAA. However, we are applying the new filing fee rule, which explicitly takes into consideration the IOAA in determining the fair and appropriate fee and thus explicitly responds to the Company's concern.

15

We conclude, for the foregoing reasons, that Southwestern's rehearing request should be denied and a payment be ordered.

The Commission orders:

(A) Southwestern request for rehearing is hereby denied.

(B) Southwestern is hereby directed to pay a filing fee of $2,970.

12 No. 88-1545 (D.C. Cir. remanded August 11, 1989).

13 Cf. Revision of Filing fees for Natural Gas Rate and Tariff Filings, Order No. 506, 53 Fed. Reg. 44,182, FERC Statutes and Regulations ¶ 30,836, at p. 31,258 (1988).

14 See FERC Statutes and Regulations at p. 31,826.

15 55 Fed. Reg. at 41,997.