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Transmission or Distribution - FERC Seven Factor Test

Order No. 888 sets forth the Commission’s seven-factor test to identify distribution facilities, and include:  (1) local distribution facilities are normally in close proximity to retail customers; (2) local distribution facilities are primarily radial in character; (3) power flows into local distribution systems and it rarely, if ever, flows out; (4) when power enters a local distribution system, it is not re-consigned or transported on to some other market; (5) power entering a local distribution system is consumed in a comparatively restricted geographical area; (6) meters are based at the transmission/local distribution interface to measure flows into the local distribution system; and (7) local distribution systems are of reduced voltage.

 

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