Policy Statement and Interim Rule Regarding Ratemaking Treatment of the Cost of Emissions Allowances in Coordination Rates

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The Federal Energy Regulatory Commission (Commission) is adopting a policy statement setting forth the elements of what generally constitutes appropriate ratemaking treatment of sulfur dioxide emissions allowances in coordination transactions under the Federal Power Act. The Clean Air Act Amendments of 1990, Pub. L. No. 101-549, Title IV, 104 Stat. 2399, 2584 (1990), require issuance of emissions allowances as a means to reduce sulfur dioxide emissions levels. The Commission also is issuing an interim rule that implements the guidelines set forth in the policy statement.