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FERC Sends ADR Report to Justice Department

FERC Sends ADR Report to Justice Department

FERC approval of a settlement ending a two-year complex contract dispute between Phelps Dodge Corp. and El Paso Natural Gas is the most "recent success story" of the use of alternative dispute resolution (ADR) methods at the Commission.

FERC cited the Phelps Dodge-El Paso case in a report submitted to the Department of Justice (DOJ) last week as an example of the progress it has made in using ADR as a tool to resolve difficult cases. The staff report was prepared by the Commission's Dispute Resolution Service (DRS) in response to President Clinton's May 1998 initiative encouraging agency use of ADR procedures.

".....[It] became clear that this case was going to head to litigation. It was going to be a very difficult one," Hoecker said at the Dec. 15 Commission meeting, during which the settlement was approved. In a complaint filed in late 1997, Phelps Dodge accused El Paso of violating a 1995 rate agreement by refusing to add delivery points to service its mining facility in El Paso, TX.

A mediator from FERC's DRS, who convened the two sides in September, helped to quickly resolve the contentious issue. After a one-day session, "an agreement was reached and potential hearings were avoided. Appellate review of the Commission orders was also avoided. The settlement [further] resolved another contested proceeding pending before the Commission that had been the subject of numerous protests," the report said.

"The business interests of the parties were met without having to determine which [had] the best position," Hoecker said. The use of the ADR procedures in this contentious case, which were voluntary, "saved the parties and the Commission a lot of time and money."

Hoecker believes that all companies involved in disputes at the Commission should consider ADR as an option. "There's nothing too technically difficult that we can't use ADR." He urged interested parties to either call the toll-free number of 1-800-FERC-ADR or send an e-mail at ferc.ADR@ferc.fed.us.

The Commission reported the DRS was established during this past year to foster the increased use of ADR procedures. "The DRS is independent and neutral. [It] is not involved in the decisional processes, does not advocate positions, and does not conduct investigations," the Commission told the DOJ.

"As part of its goal to expand ADR knowledge throughout the Commission, the DRS plans to invite Commission employees from other offices to apply for a one-year detail to the DRS," the report said. While there, "the employees will receive specialized education and training in ADR theory and practice as well as gain firsthand experience in the practical application of ADR. At the end of the one-year detail, the employees will return to the program offices to apply ADR when appropriate." Moreover, the DRS office also will consider offering internships to students pursuing graduate degrees in ADR and mediation, according to the report.

Susan Parker

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