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FERC Awards Itself High Marks for '99 Performance

FERC Awards Itself High Marks for '99 Performance

In a fiscal year 1999 performance report card submitted to Congress and the White House, the Federal Energy Regulatory Commission gave itself high marks for furthering competition in the natural gas and electricity markets, citing the mega gas rule (Order 637), the RTO decision (Order 2000) and its FERC First initiative as proof of its progress.

The Commission has met the "spirit" of the Governmental Performance and Results Act (GPRA), which requires the annual reviews, by "examining its performance measures, identifying inadequacies in the markets and instituting major initiatives to address the problems," it said in the yearly performance evaluation, which along with a "State of the Markets 2000" report became publicly available last week.

In the gas market, for example, FERC had observed that disparities in inter-regional spot prices had created a "value for transportation which was at times far in excess of what pipeline companies could charge for the service," the report said. Consequently, the Commission determined there was a need for a "major rulemaking" addressing the price caps in the short-term transportation market, which subsequently led to the ground-breaking Order 637 in February, it noted.

FERC further believes it has made a lot of headway in reducing market-power abuses in the natural gas, electric and oil transportation markets. But it conceded the best way to gauge its performance on this issue is through "discussions with the industry and its customers." Although it met with a number of customers during its FERC reinvention effort, the Commission said it needs to get "closer" to customers.

For this reason, FERC noted it was in the process of seeking blanket approval from the Office of Management and Budget (OMB) so it can survey customer "perceptions of how well the Commission is mitigating market power in the natural gas and electric industries." It said it hopes to begin the surveys this year.

FERC also reported it did a bang-up job of approving gas pipeline certificates within their targeted deadlines in 1999. The Commission grouped the certificate filings into four categories: prior- notice filings (small cases), unprotested filings, protested filings and cases of first impression that involve larger policy implications. It estimated it reviewed 261 prior-notice cases last year, with each filing completed in an average of 57 days, just shy of its 56-day target. Unprotested certificate cases totaled 174, with each filing completed in 152 days, ahead of the targeted 159 days. Thirty protested certificate cases came before FERC in 1999, and each case on average was reviewed within the targeted 304 days, according to the report. The cases of first impression, 39 in all, also met their target of 365 days for each filing.

The Commission said it's been able to reduce the processing time for certificates through the use of collaborative procedures and early involvement of its staff, and through the use of a new pilot program that allows for third-party, independent monitoring of a pipeline project's compliance with environmental conditions.

Susan Parker

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