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News Analysis

Fortnightly Magazine - April 1 1998

Hoecker saw that option as more in tune with the FERC's traditional expertise and meager budget.

"Let's assume," Hoecker suggested, "that we look [instead] at all the rules and that those rules are then subject to comment. What standards [of review] should we apply? Are rules discriminatory? Are they just and reasonable? Do they conform to pro forma tariffs?

"I think if we are going to check for discrimination, we have no choice but to use complaint procedures. Congress will have to help us out. We have limited resources."

Another reason to favor a complaints process is that FERC jurisdiction attaches in the first instance to utility companies. At the conference, concern emerged that if NERC (or a reliability council, stakeholder group or successor in interest) were to present a scheme of reliability rules, and FERC were to approve the package and direct affected parties to file tariffs, some parties could file lawsuits and claim exemptions from FERC jurisdiction. After all, with public power entities and other new players added to NERC boards and committees, not all parties in the stakeholder process would remain subject to FERC enforcement jurisdiction after the process was completed.

Others questioned whether a complaint procedure could work. EPSA's Julie Simon, who explained that a system relying upon adversarial complaint procedures would force marketers or suppliers to do battle with business partners: "Our members are reticent to bring complaints because they have to work with these people," Simon advised. "We may be angry but we don't want to alienate our clients."

A New NOPR?

Ironically, just as the FERC would prefer to sit back and hear complaints to avoid straining its budget, various industry associations favor the idea of a new FERC-led NOPR to craft a generic, industry-wide reliability tariff, as with the notice of proposed rulemaking completed in Order 888. While that option would strain resources at the commission, it would help industry players marshall their resources in a single docket. Otherwise, under process two or three, trade groups could find themselves intervening in many different parallel policy forums, specific to companies or regions. No one made that point better than Susan Kelly, senior regulatory counsel for the National Rural Electric Cooperative Association:

"We support a broad process. You don't need to watch a huge number of dockets. However, we didn't reach this conclusion with a happy heart. It would be a career-limiting thing for me with my members to suggest a new NOPR. We are not a fan of more rules."

Putting aside the problem of resources, how would the FERC conduct this new generic rulemaking to create a reliability tariff?

Commissioner Massey asked the question: "If the NERC rules are developed in an open process, with lots of stakeholders and an independent board, which has struggled to develop a consensus, how do we address those rules? Do we give deference?"

"You ask how much deference. I say, 'a lot,'" answered Delgado.

"If we're talking about a process like Orders 888 and 889, I think it could turn into a nightmare," Delgado added. "Either you stay