In a fiscal year 1999 performance report card submitted toCongress and the White House, the Federal Energy RegulatoryCommission gave itself high marks for furthering competition in thenatural gas and electricity markets last year, citing the mega gasrule (Order 637), the RTO decision (Order 2000) and its FERC Firstinitiative as proof of its progress.

The Commission has met the “spirit” of the GovernmentalPerformance and Results Act (GPRA), which requires the annualreviews, by “examining its performance measures, identifyinginadequacies in the markets and instituting major initiatives toaddress the problems,” it said in the yearly performanceevaluation, which along with a “State of the Markets 2000” report,was sent to lawmakers last week.

In the gas market, for example, FERC had observed thatdisparities in inter-regional spot prices had created a “value fortransportation which was at times far in excess of what pipelinecompanies could charge for the service,” the report said.Consequently, the Commission determined there was a need for a”major rulemaking” to remove the price caps on short-term capacityreleases, which subsequently led to the groundbreaking Order 637 inFebruary, it noted.

FERC further believes it has made a lot of headway in reducingmarket-power abuses in the natural gas, electric and oiltransportation markets. But it conceded the best way to gauge itsperformance on this issue is through “discussions with the industryand its customers.” Although it met with a number of customersduring its FERC reinvention effort, the Commission said it needs toget “closer” to customers.

For this reason, FERC noted it was in the process of seekingblanket approval from the Office of Management and Budget (OMB) soit can survey customer “perceptions of how well the Commission ismitigating market power in the natural gas and electricindustries.” It said it hopes to begin the surveys this year.

FERC also reported it did a bang-up job of approving gaspipeline certificates by their targeted deadlines in 1999. TheCommission grouped the certificate filings into four categories:prior notice filings (small cases), unprotested filings, protestedfilings and cases of first impression that involve larger policyimplications. It estimated it reviewed 261 prior-notice cases lastyear, with each filing completed in an average of 57 days, justshy of its 56-day target. Unprotested certificate cases totaled174, with each filing completed in 152 days, ahead of the targeted159 days. Thirty protested certificate cases came before FERC in1999, and each case on average was reviewed within the targeted 304days, according to the report. The cases of first impression, 39 inall, also met their target of 365 days for each filing.

The Commission said it’s been able to reduce the processing timefor certificates through the use of collaborative procedures andearly involvement of its staff, and through the use of a new pilotprogram that allows for third-party, independent monitoring of apipeline project’s compliance with environmental conditions. Thecompliance monitor is hired by the pipeline, but is under thedirection of FERC. The monitor makes weekly inspections of aconstruction site, and is empowered to make decisions involvingminor variations from FERC’s environmental conditions. Thislightens FERC’s load, ensures better environmental compliance andhelps to speed up the pipeline construction process, the reportsaid. The pilot is being used in the construction of the AlliancePipeline.

Last year, the Commission said it inspected at least once 96construction projects that were more than two miles in length, with93, or 97%, passing inspection. It also noted it conductedinspections of eight major onshore construction projects at leastonce every four weeks, with all meeting the inspection criteria.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.