As the implementation deadline for the expanded standards of conduct drew near last Wednesday, the Federal Energy Regulatory Commission responded to a host of requests for waivers and exemptions from all or some of the requirements under the standards of conduct governing the relationships between regulated natural gas/electric transmission providers and their affiliates. And more requests are pending.
Significantly, the Commission granted far more waivers/exemptions than it denied, and it withheld making decisions in a number of cases until companies can provide the agency with more information [TS04-261]. In those cases, FERC said it would not enforce the standards for which waivers/exemptions were sought until the companies respond and it rules on the filings.
FERC, in a 66-page order issued last Monday, tended to award partial or limited exemptions/waivers of the standards of conduct, with few, if any, walking away with wholesale exemptions.
The final rule, which the Commission approved in November 2003 and affirmed in later decisions, combined the standards of conduct for both jurisdictional natural gas pipelines and transmission-owning public utilities, and significantly expanded the Order 497 regulations that barred pipeline/transmission providers from giving preferential treatment solely to their marketing and wholesale merchant affiliates.
Aimed at thwarting abuse in the energy industry, the new standards-of-conduct rule and subsequent rehearing orders extended the FERC restrictions against preferential treatment, information disclosure and employee sharing to a number of other affiliates of regulated pipeline/transmission providers in certain circumstances, including traders, producers, gatherers, processors, intrastate and Hinshaw pipelines, and any affiliate making a sale for resale of natural gas or electric energy in interstate commerce.
Regulated energy companies tried to weaken the standards of conduct — particularly the part about banning the sharing of employees and operations between affiliates — because of the additional costs they would incur each year as a result, but they were mostly unsuccessful in the end. Firms have besieged the Commission with requests to be excused from the standards of conduct.
Key Waivers/Exemptions Granted:
FERC Withheld Waivers/Exemptions Pending Further Information:
Key Waivers/Exemptions Denied:
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