FERC Order 890 (2007) — Preventing Undue Discrimination and Preference in Transmission Service

Order No. 890, issued in February 2007 in Docket RM05-17-000, significantly strengthened and reformed the Open Access Transmission Tariff framework first established in Order 888. After a decade of open-access experience, FERC found that undue discrimination and preference in transmission service persisted across the industry despite nominal OATT compliance. Utilities continued to exploit procedural gaps, informational advantages, and ambiguous tariff language to favor their own generation and frustrate third-party access.

The Commission implemented 26 specific reforms addressing transparency, coordination, and the procedures utilities must follow when providing transmission service. Key changes included improved processes for requesting and evaluating transmission service, enhanced standards for coordination between transmission providers and customers, and clearer rules governing ancillary services so that customers could obtain necessary supporting services on non-discriminatory terms. FERC revised the pro forma OATT to close loopholes that had allowed utilities to delay, deny, or condition service in ways that disadvantaged competitors.

Order 890 also refined how transmission providers calculate and post available transfer capability, strengthened requirements for responding to completed applications, and improved rules for curtailment and interruption so that non-firm service could not be used as a tool to protect affiliate transactions. The order addressed reciprocity concerns, ensuring that utilities seeking benefits of open access in other regions could not deny comparable access at home.

Follow-on orders in the 890-A through 890-D series addressed rehearing requests and provided clarifications on compliance timelines and specific tariff provisions. The reforms were designed to create a more transparent, efficient, and genuinely non-discriminatory transmission system for all market participants, reaffirming FERC's commitment to the open-access principles of Order 888 while adapting them to modern market conditions.

Among the most consequential reforms, Order 890 revised how transmission providers evaluate and respond to completed applications for service, tightened rules on secondary transmission service and resales, and improved coordination obligations when multiple providers operate across a transaction path. FERC also addressed long-term firm point-to-point service, partial interim service, and redispatch practices that had allowed incumbents to retain de facto control over constrained paths. The Commission required tariff revisions across the industry and set compliance schedules that forced a comprehensive OATT modernization effort, making Order 890 the most significant OATT revision since the original 1996 pro forma tariff.

Industry compliance required each transmission provider to submit revised tariffs and demonstrate that operational practices—not just tariff text—met the non-discrimination standard. FERC continued to enforce Order 890 principles in later undue preference cases, making the 2007 reforms a durable reference point for open access litigation and compliance audits.