FERC approval of a settlement ending a two-year complex contractdispute between Phelps Dodge Corp. and El Paso Natural Gas is themost “recent success story” of the use of alternative disputeresolution (ADR) methods at the Commission.

FERC cited the Phelps Dodge-El Paso case in a report submittedto the Department of Justice (DOJ) last week as an example of theprogress it has made in using ADR as a tool to resolve difficultcases. The staff report was prepared by the Commission’s DisputeResolution Service (DRS) in response to President Clinton’s May1998 initiative encouraging agency use of ADR procedures.

“…..[It] became clear that this case was going to head tolitigation. It was going to be a very difficult one,” Hoecker saidat the Dec. 15 Commission meeting, during which the settlement wasapproved. In a complaint filed in late 1997, Phelps Dodge accusedEl Paso of violating a 1995 rate agreement by refusing to adddelivery points to service its mining facility in El Paso, TX.

A mediator from FERC’s DRS, who convened the two sides inSeptember, helped to quickly resolve the contentious issue. After aone-day session, “an agreement was reached and potential hearingswere avoided. Appellate review of the Commission orders was alsoavoided. The settlement [further] resolved another contestedproceeding pending before the Commission that had been the subjectof numerous protests,” the report said.

“The business interests of the parties were met without havingto determine which [had] the best position,” Hoecker said. The useof the ADR procedures in this contentious case, which werevoluntary, “saved the parties and the Commission a lot of time andmoney.”

Hoecker believes that all companies involved in disputes at theCommission should consider ADR as an option. “There’s nothing tootechnically difficult that we can’t use ADR.” He urged interestedparties to either call the toll-free number of 1-800-FERC-ADR orsend an e-mail at ferc.ADR@ferc.fed.us.

The Commission reported the DRS was established during this pastyear to foster the increased use of ADR procedures. “The DRS isindependent and neutral. [It] is not involved in the decisionalprocesses, does not advocate positions, and does not conductinvestigations,” the Commission told the DOJ.

“As part of its goal to expand ADR knowledge throughout theCommission, the DRS plans to invite Commission employees from otheroffices to apply for a one-year detail to the DRS,” the reportsaid. While there, “the employees will receive specializededucation and training in ADR theory and practice as well as gainfirsthand experience in the practical application of ADR. At theend of the one-year detail, the employees will return to theprogram offices to apply ADR when appropriate.” Moreover, the DRSoffice also will consider offering internships to students pursuinggraduate degrees in ADR and mediation, according to the report.

Susan Parker

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