Ex Parte Contacts and Separation of Functions, 62881-62886 [E8-25103]
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Federal Register / Vol. 73, No. 205 / Wednesday, October 22, 2008 / Rules and Regulations
§303.2(a)(14)(ii), §303.2(a)(14)(ii)(A),
§303.16(a)(9)(ii), §303.16(a)(9)(ii)(A),
§303.16(a)(10)(ii), and
§303.2(a)(10)(ii)(A) by increasing the
percentage used to calculate the
combined amount of individual and
family health and life insurance per year
that is creditable towards the duty
refund benefit for watch and jewelry
producers. Under the rule, the
combined creditable amount of
individual health and life insurance per
year may not exceed 130 percent of the
‘‘weighted average’’ yearly individual
federal employee health insurance, and
the combined creditable amount of
family health and life insurance per year
may not exceed 150 percent of the
‘‘weighted average’’ yearly family
federal employee health insurance.
The Departments received no
comments in response to the proposed
rule and request for comments. As a
result, the Departments are adopting the
proposed regulations without change.
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Administrative Law Requirements
Regulatory Flexibility Act. In
accordance with the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., the
Chief Counsel for Regulation at the
Department of Commerce certified to
the Chief Counsel for Advocacy, Small
Business Administration, at the
proposed rule stage, that this rule would
not have a significant economic impact
on a substantial number of small
entities. The factual basis for this
certification was published in the
proposed rule and is not repeated here.
No comments were received on the
certification or on the economic effects
of the rule more generally.
Paperwork Reduction Act. This
rulemaking does not contain revised
collection of information requirements
subject to review and approval by the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act of 1995. Collection activities are
currently approved by the Office of
Management and Budget under control
numbers 0625–0040 and 0625–0134.
Notwithstanding any other provision
of the law, no person is required to
respond to, nor shall any person be
subject to a penalty for failure to comply
with a collection of information unless
it displays a currently valid OMB
control number.
E.O. 12866. It has been determined
that this rulemaking is not significant
for purposes of Executive Order 12866.
List of Subjects in 15 CFR Part 303
Administrative practice and
procedure, American Samoa, Customs
duties and inspection, Guam, Imports,
Marketing quotas, Northern Mariana
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Islands, Reporting and record keeping
requirements, Virgin Islands, Watches
and jewelry.
For reasons set forth above, the
Departments amend 15 CFR Part 303 as
follows:
■
62881
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 385
PART 303—WATCHES, WATCH
MOVEMENTS AND JEWELRY
PROGRAMS
[Docket No. RM08–8–000; Order No. 718]
1. The authority citation for 15 CFR
Part 303 continues to read as follows:
Issued October 16, 2008.
■
Authority: Pub. L. 97–446, 96 Stat. 2331
(19 U.S.C. 1202, note); Pub. L. 103–465, 108
Stat. 4991; Pub. L. 94–241, 90 Stat. 263 (48
U.S.C. 1681, note); Pub. L. 106–36, 113
Stat.167; Pub. L. 108–429, 118 Stat. 2582.
§ 303.2
[Amended]
2. Section 303.2 is amended as
follows:
■ A. Remove ‘‘100’’ from the first
sentence in paragraph (a)(13)(ii)
introductory text and add ‘‘130’’ in its
place.
■ B. Remove ‘‘120’’ from the first
sentence in paragraph (a)(13)(ii)(A) and
add ‘‘150’’ in its place.
■ C. Remove ‘‘100’’ from the first
sentence in paragraph (a)(14)(ii)
introductory text and add ‘‘130’’ in its
place.
■ D. Remove ‘‘120’’ from the first
sentence in paragraph (a)(14)(ii)(A) and
add ‘‘150’’ in its place.
■
§ 303.16
[Amended]
3. Section 303.16 is amended as
follows:
■ A. Remove ‘‘100’’ from the first
sentence in paragraph (a)(9)(ii)
introductory text and add ‘‘130’’ in its
place.
■ B. Remove ‘‘120’’ from the first
sentence in paragraph (a)(9)(ii)(A) and
add ‘‘150’’ in its place.
■ C. Remove ‘‘100’’ from the first
sentence in paragraph (a)(10)(ii)
introductory text and add ‘‘130’’ in its
place.
■ D. Remove ‘‘120’’ from the first
sentence in paragraph (a)(10)(ii)(A) and
add ‘‘150’’ in its place.
■
Dated: October 16, 2008.
David Spooner,
Assistant Secretary for Import
Administration, Department of Commerce.
Dated: October 16, 2008.
Joseph McDermott,
Acting Director, Office of Insular Affairs,
Department of the Interior.
[FR Doc. E8–25167 Filed 10–21–08; 8:45 am]
BILLING CODE 3510–DS–S
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Ex Parte Contacts and Separation of
Functions
Federal Energy Regulatory
Commission, Department of Energy.
ACTION: Final rule.
AGENCY:
SUMMARY: The Commission is revising
its regulations to clarify its rules
governing ex parte contacts and
separation of functions as they apply to
proceedings arising out of investigations
initiated under Part 1b of the
Commission’s regulations. The revisions
specify when Commission litigation
staff and persons outside the
Commission may contact decisional
employees once the Commission has
established proceedings on matters that
had been investigated under Part 1b.
The Commission also is revising its
regulations governing intervention to
clarify that intervention is not permitted
as a matter of right in proceedings
arising from Part 1b investigations.
DATES: Effective Date: This rule will
become effective November 21, 2008.
FOR FURTHER INFORMATION CONTACT:
Wilbur Miller, Federal Energy
Regulatory Commission, 888 First
Street, NE., Washington, DC 20426,
(202) 502–8953, wilbur.miller@ferc.gov.
SUPPLEMENTARY INFORMATION:
1. On May 15, 2008, the Commission
issued a Notice of Proposed Rulemaking
(NOPR) 1 proposing to revise its
regulations governing ex parte contacts
and interventions in the context of
investigations under Part 1b of its
regulations.2 Specifically, the NOPR
proposed to revise the Commission’s
regulations governing ex parte contacts
and separation of functions to clarify the
circumstances in which Commission
litigation staff and outside persons may
contact Commissioners and decisional
staff while an investigation is pending.
The NOPR further proposed to clarify
the Commission’s regulations governing
intervention to provide that intervention
is not available as of right in a
proceeding arising from an investigation
under Part 1b.
1 Ex Parte Contacts and Separation of Functions,
73 FR 29451 (May 21, 2008), FERC Stats. & Regs.
¶ 32,634 (2008).
2 18 CFR part 1b.
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I. Background
2. In the NOPR, the Commission
noted that, while its regulation
governing interventions provided that
there is no intervention in a Part 1b
investigation, the regulation did not
address the subject of intervention in a
proceeding arising from a Part 1b
investigation.3 The NOPR explained
that the Commission’s precedents have
recognized that, because a proceeding
arising from an investigation is focused
on the alleged conduct of a specific
entity, intervention ordinarily is
inappropriate and may delay or
sidetrack the proceeding.4 The NOPR
therefore proposed to revise the
regulation to provide that intervention
is not available as of right in a
proceeding arising from a Part 1b
investigation. The Commission noted
that, under this revision, it would retain
the ability to permit intervention in
cases where it might be appropriate, as
the Commission had in fact done on
past occasions.
3. With respect to off-the-record
communications, the NOPR explained
that the current Commission rules
created a potential inconsistency
between the ability of Commission
litigation staff and persons outside the
Commission to contact Commissioners
and decisional staff in situations where,
as the result of a Part 1b investigation,
the Commission initiates proceedings
other than trial-type proceedings. The
NOPR further noted some uncertainty
within the regulated community about
the application of the ex parte rules in
the context of Part 1b investigations.
The NOPR proposed to revise the
Commission’s ex parte 5 and separation
of functions 6 regulations to provide that
neither outside persons nor litigation
staff may engage in off-the-record
communications with Commissioners
and decisional staff once the
Commission has initiated a proceeding
in connection with a Part 1b
investigation, regardless of the type of
proceeding.
4. The NOPR also made reference to
the Revised Policy Statement on
Enforcement,7 which was issued at the
same time as the NOPR. In the Revised
Policy Statement on Enforcement, the
Commission announced that, as a matter
of policy, Commissioners and their
3 Rule 214 of the Commission’s Rules of Practice
and Procedure, 18 CFR 385.214.
4 See Energy Transfer Partners, L.P., 121 FERC
¶ 61,282, at P 19 & n.28 (2007) (ETP).
5 Rule 2201 of the Commission’s Rules of Practice
and Procedure, 18 CFR 385.2201 (2008).
6 Rule 2202 of the Commission’s Rules of Practice
and Procedure, 18 CFR 385.2202 (2008).
7 Enforcement of Statutes, Regulations, and
Orders, 123 FERC ¶ 61,156 (2008).
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personal staffs will no longer accept oral
communications about pending
investigations from the subjects of those
investigations. Such communications
will have to be in writing. This measure
is a policy and not a part of the
Commission’s regulations.
5. In total, the Commission received
14 comments regarding the NOPR.
Multiple State Utilities Commissions
joined the comments of the National
Association of Regulatory Utility
Commissioners (NARUC).8 In addition,
the Industry Associations’ (IA)
comments represented the views of
several entities.9 In general, the
commenters expressed appreciation of
the Commission’s attempt to refine its
enforcement practices, but expressed
concern with both the proposal
prohibiting intervention as a matter of
right in enforcement proceedings, as
well as the proposal regarding ex parte
contacts with decisional staff prior to
the issuance of an order to show
cause.10
II. Discussion
A. Intervention
6. The bulk of the comments
expressed concern about the NOPR’s
proposal to revise the Commission’s
intervention rules to provide that there
is no intervention as a matter of right in
proceedings arising from Part 1b
investigations. For the most part, the
commenters were concerned with
specific situations that may arise from
time to time in which they believe
intervention would be warranted. A few
comments reflected broader concerns
about possible restrictions on
intervention.
1. Broader Issues
7. With respect to broader concerns,
the National Rural Electric Cooperative
8 The Public Utilities Commissions of California,
Indiana, Nevada, Ohio, and South Dakota, as well
as the Public Service Commissions of New York,
Maryland, and West Virginia, and the Illinois
Commerce Commission, supported the comments of
NARUC.
9 The Industry Association consists of the
American Gas Association, the Edison Electric
Institute, the Electric Power Supply Association,
the Independent Petroleum Association of America,
the Interstate Natural Gas Association of America,
the Natural Gas Supply Association, and the
Process Gas Consumers Group.
10 Several commenters filed interventions or
requested to intervene out of time, or requested to
file late comments. These included the Indiana
Utility Regulatory Commission, the Public Service
Commission of West Virginia, the Illinois
Commerce Commission, the Maryland Public
Service Commission, the Public Utilities
Commission of the State of California, the Public
Service Commission of the State of New York, and
the Public Utilities Commission of Ohio. The
Commission will treat all such submissions as
comments on the NOPR and has considered them
regardless of when they were filed.
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Association and American Public Power
Association (NRECA/APPA), and Ergon
Energy Partners, LP (Ergon), assert that
the Commission should not adopt the
proposed rule abolishing intervention as
a matter of right in enforcement
proceedings. NRECA/APPA state that
the proposed rule is ‘‘likely unlawful to
the extent it purports to eliminate
statutory intervention rights’’ and is
unnecessary in light of the standards
contained in Rule 214.11 They assert
that it would be more consistent with
the Administrative Procedure Act (APA)
if the Commission followed the
standards contained in the existing
rule.12 They further suggest that, as an
alternative to the automatic grant of a
timely, unopposed intervention, the
Commission could adopt procedures
employed by other agencies that provide
for public notice and comment periods
on consent decrees.13 Ergon, while
agreeing that intervention in an
investigation may be inappropriate,
suggests that the Commission modify
the rule to allow third parties the
opportunity for meaningful
participation in proceedings that
directly affect their interests, and to
allow intervention once the Commission
finds culpable conduct.14
8. We do not agree that the proposed
revisions will contravene any statutory
right to intervene. The APA requires
agencies to give interested parties an
opportunity for ‘‘the submission and
consideration of facts, arguments, offers
of settlement, or proposals of
adjustment when time, the nature of the
proceeding, and the public interest
permit.’’ 15 The concerns underlying the
NOPR’s proposal are directly related to
these considerations. In an adjudicative
proceeding before the Commission,
third parties typically provide facts to
assist us in developing a case. However,
the purpose of investigations and
enforcement proceedings is to examine
instances of potential wrongdoing and
take remedial action where needed.
Only in unusual circumstances, as
discussed below, would third parties
have additional information that is
necessary for the Commission’s
investigation. As we have stated
previously:
As a general proposition, when a Part 1b
investigation becomes an enforcement action,
we find that it would be inappropriate to
allow entities to intervene as parties to the
proceeding. We find that allowing parties to
11 NRECA/APPA
Comments at 2, 5.
at 6–9 (citing 5 U.S.C. 554(c)(1)).
at 6, 11. NRECA/APPA cite Federal Trade
Commission and Department of Justice Regulations.
Id. at 11.
14 Ergon Comments at 2.
15 5 U.S.C. 554(c)(1) (emphasis added).
12 Id.
13 Id.
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intervene during an enforcement action
potentially would be contrary to the public
interest and would interfere with the
Commission considering issues in a timely
and judicious manner. This is because in
such an enforcement proceeding, the
Commission is considering closely the
particular actions/inactions, rights,
obligations and, potentially violations and
penalties of the subject party—here, ETP.
Such a proceeding is different from a rate
filing, rulemaking, or other proceeding where
the rights of third parties are clearly affected.
Allowing third parties to intervene in
enforcement proceedings in pursuit of their
own objectives could delay or sidetrack a
proceeding extending or even creating
additional uncertainty for the subject party.16
Furthermore, the presence of
intervenors could damage the ability of
the Commission to conduct
investigations, impair our ability to
enter into settlements, and be contrary
to the public interest. If our ability to
enter into settlements is impaired, the
result could be litigation of matters that
could otherwise be settled, draining
Commission enforcement resources.
Since litigation could be prolonged, the
benefits of settlements could be delayed,
perhaps for years. Another result from
the strain on the Commission’s
investigative resources could be fewer
investigations, with fewer remedies
being imposed and fewer signals being
sent to the industry regarding which
sorts of behaviors might expose an
entity to an enforcement action, along
with greater costs and prolonged
uncertainty imposed on the subjects of
investigation.
9. We consider our views in line with
judicial precedent on the subject of an
agency’s considerable discretion in
making enforcement decisions.17 This
discretion extends, among other things,
to the decision whether to initiate an
enforcement proceeding 18 as well as the
conduct of the proceeding and any
settlement efforts.19 Inclusion of third
parties as a matter of right would
necessarily cede a portion of the
Commission’s discretion to those
parties. Furthermore, the proposal made
by NRECA/APPA that the Commission
rely on the standards currently
contained in Rule 214 would limit or
eliminate the Commission’s ability to
take into account parameters such as
16 ETP,
121 FERC ¶ 61,282, at P 19.
Heckler v. Chaney, 470 U.S. 821, 831
(1985) (agency decisions regarding conduct of
enforcement actions are presumptively
unreviewable by the courts).
18 Baltimore Gas & Electric Co. v. FERC, 252 F.3d
456, 459 (DC Cir. 2001) (BG&E) (‘‘agency’s decision
not to exercise its enforcement authority, or to
exercise it in a particular way, is committed to its
absolute discretion’’).
19 Id. at 458 (decision to settle is committed to
FERC’s nonreviewable discretion).
time and the nature of the proceeding,
even though those parameters are
specifically set out in the APA. The
current rule focuses on the nature of the
prospective intervenor’s interest, not on
the unique considerations that pertain
to an enforcement proceeding.20 We
therefore find that NRECA/APPA’s
proposal is not appropriate to the
enforcement context.
10. In our view, the NOPR’s proposal
addresses Ergon’s concerns that third
parties be able to participate in
proceedings that directly implicate their
interests, where those interests can be
addressed in a manner that does not
unduly hamper the Commission’s
enforcement efforts. As noted in the
NOPR, the Commission has recognized
that, on occasion, special circumstances
might justify intervention in an
enforcement proceeding. One such
situation was an intervention in an
enforcement proceeding where a state
public service commission sought to
clarify the impact of a settlement on
state interests.21 The Commission also
has noted that intervention might be
appropriate to allow parties to
participate in the allocation of disgorged
profits.22 The proposed revisions to
Rule 214 do not categorically bar
interventions in proceedings arising
from Part 1b investigations. Situations
in which intervention would be
appropriate are, however, necessarily
limited in keeping with the nature of the
enforcement function and the
significant discretion accorded the
Commission in that area.
2. Specific Situations
11. NARUC and the state regulatory
bodies argue that state entities should be
able to intervene given their unique
position as regulators charged with
serving the public interest.23 The state
regulators argue that they have a direct
interest in enforcement proceedings due
to the impact on their ratepayers 24 and
that their collaboration will enhance
enforcement efforts by avoiding
duplicative efforts and inconsistent
outcomes.25 They further maintain that
the NOPR’s proposal is inconsistent
with section 308 of the Federal Power
Act (FPA),26 which authorizes the
Commission to admit interested state
and local entities as parties to its
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17 See
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20 Rule 214(b) of the Commission’s Rules of
Practice and Procedure, 18 CFR 385.214(b).
21 Williams Gas Pipelines Central, Inc., 94 FERC
¶ 61,285 (2001).
22 ETP, 121 FERC ¶ 61,282 at P 19 & n.28.
23 NARUC Comments at 5.
24 Id. at 5–6.
25 Id. at 6.
26 16 U.S.C. 825g(a).
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62883
proceedings.27 According to NARUC,
the FPA contains ‘‘no qualifiers
regarding the type of FERC
proceedings’’ to which a state may be
granted party status.28 NARUC proposes
to allow states to intervene as a matter
of right, and institute a process
requiring ‘‘specific notification of
parties that could have an interest in
these determinations, including affected
State commissions.’’ 29 NARUC also
states that the Commission should
clarify that the resolution of a Part 1b
proceeding will not affect the rights of
states to pursue their own remedies for
the wrongdoing that was the subject of
the FERC investigation.30 The Public
Service Commission of Maryland
additionally asserts that state
commissions must be able to intervene
as of right to request rehearing in
enforcement proceedings.31 Finally, the
Indiana Utility Regulatory Commission
proposes that market monitors be
allowed to intervene and be informed of
the status of ongoing investigations.32
12. One other specific circumstance
drawing concern was North American
Electric Reliability Corp. (NERC)
Reliability Standards investigations,
particularly so-called ‘‘root cause’’
investigations to determine which entity
is at fault for alleged violations of NERC
reliability standards.33 Public Service
Electric and Gas Company (PSEG),
while agreeing with the Commission
generally about intervention in Part 1b
investigations, states that, ‘‘because in
the RTO/ISO construct responsibility for
complying with NERC Reliability
Standards does not in every case align
with responsibilities between PJM and
its members,’’ NERC Reliability
Standards investigations are
substantially different from other Part
1b investigations and participants
deserve more latitude in joining other
parties. PSEG asserts that, in the interest
27 NARUC Comments at 3; see New York Pub.
Serv. Comm’n Comments at 4 (Commission should
preserve carefully crafted balance by continuing to
recognize state interests); Pub. Serv. Comm’n of
Maryland Comments at 3 (it would be
counterproductive not to include state regulatory
authority in enforcement proceedings).
28 NARUC Comments at 3.
29 Id. at 8.
30 Id.
31 Pub. Serv. Comm’n of Maryland Comments at
4.
32 Indiana Utility Regulatory Commission
Comments at 3–4.
33 There may be many situations where several
entities could be investigated for violations for facts
arising out of the same event and in such a case we
would expect each entity would be afforded the full
rights allowed to a subject of an enforcement action.
Moreover, the conduct of any entity that might
mitigate the severity of the violation or penalty as
to the subject of an investigation can always be
evaluated in an enforcement action regardless of
whether such other entity is an intervenor.
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of due process, it may be necessary in
enforcement proceedings arising from
reliability standards investigations to
‘‘widen the scope of permitted
interventions,’’ 34 and that an entity
accused of a NERC violation must be
allowed to argue that another entity is
responsible for the violation, and join
them as a party to the proceeding prior
to the penalty phase in order to ensure
that there is an accurate finding of the
‘‘root cause’’ entity.35
13. As we note above, nothing in the
proposed revisions to Rule 214
precludes intervention in enforcement
proceedings. While clarifying that there
is no right to intervene in proceedings
arising from Part 1b investigations, the
Commission nevertheless retains the
discretion to take into account specific
circumstances that might favor
intervention, although such
circumstances would be uncommon and
the participation by intervenors may be
limited to specific matters.
14. We disagree with PSEG that there
is any fundamental difference
concerning interventions in
investigations carried out by the
Regional Entities and the Electric
Reliability Organization (ERO) with
respect to possible violations of
Reliability Standards approved by the
Commission and in Part 1b
investigations conducted by the
Commission staff into the same kinds of
violations. The Commission found in
Order No. 672 that, in general, there
should be no right to intervene in
investigations carried out by Regional
Entities or the ERO, for the same reasons
that interventions are not permitted in
our staff’s Part 1b investigations.36 We
note that in its investigation, a Regional
Entity or the ERO has authority to
inquire into all facts relevant to whether
a violation of a Reliability Standard
occurred, and to identify all entities,
whether listed on the ERO’s compliance
registry or not, whose actions related to
the possible violation of a Reliability
Standard.37
34 PSEG
Comments at 3.
at 5.
36 Rules Concerning Certification of the Electric
Reliability Organization; and Procedures for the
Establishment, Approval, and Enforcement of
Electric Reliability Standards, Order No. 672, 71 FR
8662 (Feb. 17, 2006), FERC Stats. & Regs. ¶ 31,204
at P 510, order on reh’g, Order No. 672–A, 71 FR
19814 (April 18, 2006), FERC Stats. & Regs. ¶ 31,212
(2006).
37 See Reliability Standard Compliance and
Enforcement in Regions with Regional Transmission
Organizations or Independent System Operators,
122 FERC ¶ 61,247, at P 19 (2008) (NERC and
Regional Entities will conduct thorough
investigations that will examine the ‘‘root cause’’ of
violations, and would extend such investigations to
entities not listed on NERC’s compliance registry if
necessary).
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35 Id.
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15. We also stated in Order No. 672
that if a Regional Entity or the ERO
concluded that interventions would be
appropriate in a particular proceeding it
would conduct arising from an
investigation into possible violations of
Reliability Standards, it must receive
advance authorization to do so from the
Commission.38 The Commission,
therefore, will be in a position to
evaluate on a case-by-case basis whether
allowing interventions in a particular
Regional Entity or ERO proceeding
would be appropriate.39 We anticipate
that the Commission could consider the
issues PSEG mentions when making this
determination in particular cases.
16. We do not agree with the
expansive view of state participation in
enforcement proceedings taken by
NARUC and some of the state regulatory
bodies. The proposed revisions are in no
way inconsistent with the FPA. Section
308 of the FPA states as follows:
In any proceeding before it, the
Commission, in accordance with such rules
and regulations as it may prescribe, may
admit as a party any interested State, State
commission, municipality, or any
representative of interested consumers or
security holders, or any competitor of a party
to such proceeding, or any other person
whose participation in the proceeding may
be in the public interest.40
Although this provision recognizes the
role of state authorities, it does not draw
a fundamental distinction between them
and other interested persons.
Furthermore, the FPA leaves the
Commission with discretion to prescribe
appropriate rules and to admit parties
when it is ‘‘in the public interest.’’ By
using ‘may’ instead of ‘shall,’ it is clear
that section 308 establishes no right of
intervention. The section merely
authorizes the Commission to admit
state commissions into FERC
proceedings. Nothing in the provision
prevents the Commission from
recognizing the differing public interests
that may be at stake in different types
of proceedings. The provision likewise
places no limitations on the
considerations that the Commission
may take into account in determining
the public interest.
38 Order
No. 672 at P 511.
e.g., North American Electric Reliability
Council; North American Electric Reliability
Corporation, 119 FERC ¶ 61,060, at P 150, order on
reh’g, 120 FERC ¶ 61,260 (2007) (recognizing
exceptions to the general rule that no interventions
should be permitted in Regional Entity and NERC
enforcement proceedings, but stating that
exceptions to this rule exist, which the Commission
would evaluate in advance upon request on a caseby-case basis).
40 16 U.S.C. 825g(a). Section 15(a) of the Natural
Gas Act, 15 U.S.C. 717n(a), includes a nearly
identical provision.
39 See,
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17. In our view, as a general matter
the availability of intervention in
enforcement proceedings would be
inconsistent with the discretion in
pursuing enforcement measures that
Congress has afforded the Commission.
The DC Circuit, for instance, has
determined that the Natural Gas Act
(NGA) 41 places no limitations on the
Commission’s exercise of its
enforcement powers. The court has
stated, ‘‘At every turn the NGA confirms
that FERC’s decision how, or whether,
to enforce that statute is entirely
discretionary.’’ 42 Congress evinced no
intention to ‘‘cabin FERC’s enforcement
discretion,’’ because if it had, it would
have used ‘‘obligatory terms such as
‘must,’ ‘shall,’ and ‘will,’ not the wholly
precatory language employed in the
act.’’ 43
18. We also see no reason why the
revisions to Rule 214 would have any
impact upon the ability of states to
pursue remedies for wrongdoing that
was the subject of a Part 1b
investigation. The revisions address
only the availability of intervention in
proceedings arising from Part 1b
investigations. As the above discussion
shows, the Commission’s enforcement
powers lie within its own discretion and
the revisions therefore do not deprive
any person or entity of any remedies
that it previously possessed.
19. Although we fully recognize the
significant role played in oversight and
enforcement by state regulatory
commissions, the Commission has the
sole authority to enforce its own
jurisdictional statutes. As the courts
have recognized, enforcement authority
is generally considered discretionary
with the agencies to which it is granted.
In our view, the effective exercise of that
discretion requires that enforcement
proceedings remain focused on the
primary issue, which is the alleged
misconduct of the respondent. The
revisions to Rule 214 nevertheless will
leave the Commission with the ability in
appropriate cases to permit the
participation of third parties, but that
participation will be tailored to
appropriate situations based on factors
that are unique to the particular
enforcement context.
20. For similar reasons, we are not
persuaded by the various suggestions
41 15 U.S.C. 717, et seq. There is no meaningful
difference between the relevant provisions of the
NGA and those of the FPA. Compare 15 U.S.C.
717s(a) with 16 U.S.C. 825m, and 15 U.S.C. 717m
with 16 U.S.C. 825f. Analogous provisions of the
NGA and FPA are to be read in pari materia. See,
e.g., Arkansas-Louisiana Gas Co. v. Hall, 453 U.S.
571, 577 n.7 (1981).
42 BG&E, 252 F.3d at 460.
43 Id. at 461.
E:\FR\FM\22OCR1.SGM
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Federal Register / Vol. 73, No. 205 / Wednesday, October 22, 2008 / Rules and Regulations
that we solicit participation in
investigations and enforcement
proceedings. Given that we expect
intervention to be permitted only in
unusual situations, measures designed
to invite such participation will in most
cases result in delay and distraction
from the central issues. Consequently,
we find it appropriate to adopt the
revisions to Rule 214 contained in the
NOPR.
B. Off-the-Record Communications
21. The Commission received
comments on the NOPR’s proposed
revisions to its ex parte and separation
of functions rules from IA representing
the views of several entities. The IA
states that it supports the Commission’s
goal of equal treatment of investigative
staff and subjects of an investigation
subsequent to a show cause order, and
argues that the Commission should
extend the proposal to include the early
stages of the investigation.44 In its view,
allowing Commission investigative staff
unrestricted access to decisional
employees, while allowing the subject
of an investigation only written
communication, puts the subject of an
investigation at a disadvantage in
making its case to the Commission. The
IA specifically requests that the
Commission ‘‘allow oral
communications with Commissioners
and other decision-making employees
by both [i]nvestigative [s]taff and the
[s]ubject.’’ 45
22. The IA also makes specific
procedural suggestions. It maintains that
the subject of an investigation should be
allowed to respond to the investigator’s
report and should be provided with ‘‘the
full set of material facts and legal
conclusions appearing in the
investigator’s report, at the same time
the report or draft is submitted to any
decisional employee.’’ 46 It further
requests clarification of Order No.
711.47 That Order states that a ‘‘notice
of intent to seek a show cause order
‘shall provide sufficient information and
facts’ to enable the Subject to prepare a
response.’’ 48 The IA requests that
‘‘sufficient information and facts’’ be
clarified to mean ‘‘all of the material
facts and legal conclusions being relied
on in the investigator’s report.’’ 49 It
further requests that a subject be
allowed to respond to an investigator’s
44 IA
Comments at 2.
at 8–9.
46 Id. at 3.
47 Submissions to the Commission upon Staff
Intention to Seek an Order to Show Cause, Order
No. 711, 73 FR 29431 (May 21, 2008), FERC Stats.
& Regs. ¶ 31,270 (2008).
48 Id. at 9.
49 Id.
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45 Id.
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15:16 Oct 21, 2008
Jkt 217001
report if it is revised after a response is
filed.50
23. The IA’s comments are outside the
scope of this rulemaking. Although the
NOPR made reference to the Revised
Policy on Enforcement, which was
issued on the same date, it was the latter
that announced the policy whereby
neither Commissioners nor their
personal staffs will receive oral
communications, in person or by
telephone, about pending investigations
from the subjects of those investigations.
That policy does not appear in any
regulation proposed here. The NOPR
proposed only to revise the rules on
separation of functions and off-therecord communications to clarify that
both outside persons and Commission
investigative staff will be able to
communicate with decisional staff
during the same time periods,
specifically while an investigation is
pending until the point at which the
Commission initiates an enforcement
proceeding. The NOPR did not in any
way address the procedures for staff to
submit, and the subject of an
investigation to respond to, a request for
a show cause order. Those procedures
therefore cannot be addressed properly
here. The Commission therefore will
adopt the proposed revisions to its rules
governing off-the-record
communications and separation of
functions.
III. Information Collection Statement
24. Office of Management and Budget
(OMB) regulations require OMB to
approve certain information collection
requirements imposed by agency rule.51
This Final Rule does not contain any
information collection requirements and
compliance with the OMB regulations is
thus not required.
IV. Environmental Analysis
25. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
environment.52 Issuance of this Final
Rule does not represent a major federal
action having a significant adverse effect
on the quality of the human
environment under the Commission’s
regulations implementing the National
Environmental Policy Act of 1969. Part
380 of the Commission’s regulations
lists exemptions to the requirement to
draft an Environmental Analysis or
50 Id.
at 10.
CFR 1320.12.
52 Regulations Implementing the National
Environmental Policy Act of 1969, Order No. 486,
52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs.,
Regulations Preambles 1986–1990 ¶ 30,783 (1987).
51 5
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Frm 00035
Fmt 4700
Sfmt 4700
62885
Environmental Impact Statement.
Included is an exemption for
procedural, ministerial or internal
administrative actions.53 This
rulemaking is exempt under that
provision.
V. Regulatory Flexibility Act
26. The Regulatory Flexibility Act of
1980 (RFA) 54 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. This Final Rule concerns solely
procedural matters. The Commission
certifies that it will not have a
significant economic impact upon
participants in Commission
proceedings. An analysis under the RFA
is not required.
VI. Document Availability
27. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the Internet through the
Commission’s Home Page (https://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE.,
Room 2A, Washington DC 20426.
28. From the Commission’s Home
Page on the Internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
29. User assistance is available for
eLibrary and the Commission’s Web site
during normal business hours from
FERC Online Support at 202–502–6652
(toll free at 1–866–208–3676) or e-mail
at ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. E-mail the
Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional
Notification
30. These regulations are effective
November 21, 2008. The Commission
has determined, with the concurrence of
the Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not a ‘‘major rule’’
as defined in section 351 of the Small
Business Regulatory Enforcement
Fairness Act of 1996.
53 18
54 5
E:\FR\FM\22OCR1.SGM
CFR 380.4(1) and (5).
U.S.C. 601–12.
22OCR1
62886
Federal Register / Vol. 73, No. 205 / Wednesday, October 22, 2008 / Rules and Regulations
List of Subjects in 18 CFR Part 385
Administrative practice and
procedure, Electric utilities, Penalties,
Pipelines, Reporting and recordkeeping
requirements.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
In consideration of the foregoing, the
Commission amends Part 385, Chapter I,
Title 18, Code of Federal Regulations, as
follows.
■
PART 385—RULES OF PRACTICE AND
PROCEDURE
1. The authority citation for Part 385
continues to read as follows:
■
Authority: 5 U.S.C. 551–557; 15 U.S.C.
717–717z, 3301–3432; 16 U.S.C. 791a–825v,
2601–2645; 28 U.S.C. 2461; 31 U.S.C. 3701,
9701; 42 U.S.C. 7101–7352, 16441, 16451–
16463; 49 U.S.C. 60502; 49 App. U.S.C. 1–85
(1988).
Separation of functions (Rule
In any proceeding in which a
Commission adjudication is made after
hearing, or in any proceeding arising
from an investigation under part 1b of
this chapter beginning from the time the
Commission initiates a proceeding
governed by part 385 of this chapter, no
officer, employee, or agent assigned to
work upon the proceeding or to assist in
the trial thereof, in that or any factually
related proceeding, shall participate or
advise as to the findings, conclusion or
decision, except as a witness or counsel
in public proceedings.
[FR Doc. E8–25103 Filed 10–21–08; 8:45 am]
BILLING CODE 6717–01–P
39 CFR Part 3020
Intervention (Rule 214).
(a) * * *
(4) No person, including entities
listed in paragraphs (a)(1) and (a)(2) of
this section, may intervene as a matter
of right in a proceeding arising from an
investigation pursuant to Part 1b of this
chapter.
*
*
*
*
*
■ 3. Amend § 385.2201 by revising
paragraph (c)(1) to read as follows:
§ 385.2201 Rules governing off-the-record
communications (Rule 2201).
*
ebenthall on PROD1PC60 with RULES
§ 385.2202
2202).
POSTAL REGULATORY COMMISSION
2. Amend § 385.214 by adding new
paragraph (a)(4) to read as follows:
■
§ 385.214
4. Amend § 385.2202 by revising it to
read as follows:
■
*
*
*
*
(c) * * *
(1) Contested on-the-record
proceeding means
(i) Except as provided in paragraph
(c)(1)(ii) of this section, any proceeding
before the Commission to which there is
a right to intervene and in which an
intervenor disputes any material issue,
any proceeding initiated pursuant to
rule 206 by the filing of a complaint
with the Commission, any proceeding
initiated by the Commission on its own
motion or in response to a filing, or any
proceeding arising from an investigation
under part 1b of this chapter beginning
from the time the Commission initiates
a proceeding governed by part 385 of
this chapter.
(ii) The term does not include noticeand-comment rulemakings under 5
U.S.C. 553, investigations under part 1b
of this chapter, proceedings not having
a party or parties, or any proceeding in
which no party disputes any material
issue.
*
*
*
*
*
VerDate Aug<31>2005
15:16 Oct 21, 2008
Jkt 217001
[Docket Nos. MC2008–8 and CP2008–26]
Administrative Practice and
Procedure; Postal Service
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Commission is adding a
new product identified as Priority Mail
Contract 1 Negotiated Service
Agreement to the Mail Classification
Schedule Competitive Product List,
pursuant to a Postal Service request.
The request incorporates notice of the
Postal Service’s execution of a related
contract. The Commission is also republishing the lists of market dominant
and competitive products. The
Commission’s actions are consistent
with changes in a recent law governing
postal operations.
DATES: Effective October 22, 2008.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–789–6820 or
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On September 23, 2008, the Postal
Service filed a formal request pursuant
to 39 U.S.C. 3642 and 39 CFR 3020.30
et seq. to add Priority Mail Contract 1
to the competitive product list. The
Postal Service asserts that Priority Mail
Contract 1 is a competitive product ‘‘not
of general applicability’’ within the
meaning of 39 U.S.C. 3632(b)(3). This
PO 00000
Frm 00036
Fmt 4700
Sfmt 4700
Request has been assigned Docket No.
MC2008–8.1
The Postal Service
contemporaneously filed a contract
related to the proposed new product
pursuant to 39 U.S.C. 3632(b)(3) and 39
CFR 3015.5. The contract is assigned
Docket No. CP2008–26. The Postal
Service represents that the contract fits
within the proposed Mail Classification
Schedule (MCS) language.
In support of its Request, the Postal
Service filed the following materials: (1)
A redacted version of the Governors’
Decision, which also includes an
analysis of the Priority Mail Contract 1; 2
(2) a redacted version of the contract;
which, among other things, provides
that the contract will expire 2 years
from the effective date, which is
proposed to be 1 day after the
Commission issues all regulatory
approvals; 3 (3) requested changes in the
MCS product list; 4 (4) a Statement of
Supporting Justification as required by
39 CFR 3020.32; 5 and (5) certification of
compliance with 39 U.S.C. 3633(a).6
In the Statement of Supporting
Justification, Kim Parks, Manager, Sales
and Communications, Expedited
Shipping, asserts that the service to be
provided under the contract will cover
its attributable costs, make a positive
contribution to coverage of institutional
costs, and will increase contribution
toward the requisite 5.5 percent of the
Postal Service’s total institutional costs.
Attachment D at 1. Ashley Lyons,
Manager, Corporate Financial Planning,
Finance Department, certifies, based on
the financial analysis provided by the
Postal Service, that the contract
complies with 39 U.S.C. 3633(a).
Attachment E.
The Postal Service filed much of the
supporting materials, including the
Governors’ Decision and the specific
Priority Mail Contract 1, under seal. In
its Request, the Postal Service maintains
that the contract and related financial
information, including the customer’s
name and the accompanying analyses
that provide prices, terms, conditions
and financial projections should remain
under seal. Request at 2.
In Order No. 111, the Commission
gave notice of the two dockets,
1 Request of the United States Postal Service to
Add Priority Mail Contract to Competitive Product
List and Notice of Establishment of Rates and Class
Not of General Applicability, September 23, 2008
(Request).
2 Attachment A to the Request. The analysis that
accompanies the Governors’ Decision notes, among
other things, that the contract is not risk free, but
concludes that the risks are manageable.
3 Attachment B to the Request.
4 Attachment C to the Request.
5 Attachment D to the Request.
6 Attachment E to the Request.
E:\FR\FM\22OCR1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 205 (Wednesday, October 22, 2008)]
[Rules and Regulations]
[Pages 62881-62886]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25103]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 385
[Docket No. RM08-8-000; Order No. 718]
Ex Parte Contacts and Separation of Functions
Issued October 16, 2008.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is revising its regulations to clarify its
rules governing ex parte contacts and separation of functions as they
apply to proceedings arising out of investigations initiated under Part
1b of the Commission's regulations. The revisions specify when
Commission litigation staff and persons outside the Commission may
contact decisional employees once the Commission has established
proceedings on matters that had been investigated under Part 1b. The
Commission also is revising its regulations governing intervention to
clarify that intervention is not permitted as a matter of right in
proceedings arising from Part 1b investigations.
DATES: Effective Date: This rule will become effective November 21,
2008.
FOR FURTHER INFORMATION CONTACT: Wilbur Miller, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202) 502-8953, wilbur.miller@ferc.gov.
SUPPLEMENTARY INFORMATION:
1. On May 15, 2008, the Commission issued a Notice of Proposed
Rulemaking (NOPR) \1\ proposing to revise its regulations governing ex
parte contacts and interventions in the context of investigations under
Part 1b of its regulations.\2\ Specifically, the NOPR proposed to
revise the Commission's regulations governing ex parte contacts and
separation of functions to clarify the circumstances in which
Commission litigation staff and outside persons may contact
Commissioners and decisional staff while an investigation is pending.
The NOPR further proposed to clarify the Commission's regulations
governing intervention to provide that intervention is not available as
of right in a proceeding arising from an investigation under Part 1b.
---------------------------------------------------------------------------
\1\ Ex Parte Contacts and Separation of Functions, 73 FR 29451
(May 21, 2008), FERC Stats. & Regs. ] 32,634 (2008).
\2\ 18 CFR part 1b.
---------------------------------------------------------------------------
[[Page 62882]]
I. Background
2. In the NOPR, the Commission noted that, while its regulation
governing interventions provided that there is no intervention in a
Part 1b investigation, the regulation did not address the subject of
intervention in a proceeding arising from a Part 1b investigation.\3\
The NOPR explained that the Commission's precedents have recognized
that, because a proceeding arising from an investigation is focused on
the alleged conduct of a specific entity, intervention ordinarily is
inappropriate and may delay or sidetrack the proceeding.\4\ The NOPR
therefore proposed to revise the regulation to provide that
intervention is not available as of right in a proceeding arising from
a Part 1b investigation. The Commission noted that, under this
revision, it would retain the ability to permit intervention in cases
where it might be appropriate, as the Commission had in fact done on
past occasions.
---------------------------------------------------------------------------
\3\ Rule 214 of the Commission's Rules of Practice and
Procedure, 18 CFR 385.214.
\4\ See Energy Transfer Partners, L.P., 121 FERC ] 61,282, at P
19 & n.28 (2007) (ETP).
---------------------------------------------------------------------------
3. With respect to off-the-record communications, the NOPR
explained that the current Commission rules created a potential
inconsistency between the ability of Commission litigation staff and
persons outside the Commission to contact Commissioners and decisional
staff in situations where, as the result of a Part 1b investigation,
the Commission initiates proceedings other than trial-type proceedings.
The NOPR further noted some uncertainty within the regulated community
about the application of the ex parte rules in the context of Part 1b
investigations. The NOPR proposed to revise the Commission's ex parte
\5\ and separation of functions \6\ regulations to provide that neither
outside persons nor litigation staff may engage in off-the-record
communications with Commissioners and decisional staff once the
Commission has initiated a proceeding in connection with a Part 1b
investigation, regardless of the type of proceeding.
---------------------------------------------------------------------------
\5\ Rule 2201 of the Commission's Rules of Practice and
Procedure, 18 CFR 385.2201 (2008).
\6\ Rule 2202 of the Commission's Rules of Practice and
Procedure, 18 CFR 385.2202 (2008).
---------------------------------------------------------------------------
4. The NOPR also made reference to the Revised Policy Statement on
Enforcement,\7\ which was issued at the same time as the NOPR. In the
Revised Policy Statement on Enforcement, the Commission announced that,
as a matter of policy, Commissioners and their personal staffs will no
longer accept oral communications about pending investigations from the
subjects of those investigations. Such communications will have to be
in writing. This measure is a policy and not a part of the Commission's
regulations.
---------------------------------------------------------------------------
\7\ Enforcement of Statutes, Regulations, and Orders, 123 FERC ]
61,156 (2008).
---------------------------------------------------------------------------
5. In total, the Commission received 14 comments regarding the
NOPR. Multiple State Utilities Commissions joined the comments of the
National Association of Regulatory Utility Commissioners (NARUC).\8\ In
addition, the Industry Associations' (IA) comments represented the
views of several entities.\9\ In general, the commenters expressed
appreciation of the Commission's attempt to refine its enforcement
practices, but expressed concern with both the proposal prohibiting
intervention as a matter of right in enforcement proceedings, as well
as the proposal regarding ex parte contacts with decisional staff prior
to the issuance of an order to show cause.\10\
---------------------------------------------------------------------------
\8\ The Public Utilities Commissions of California, Indiana,
Nevada, Ohio, and South Dakota, as well as the Public Service
Commissions of New York, Maryland, and West Virginia, and the
Illinois Commerce Commission, supported the comments of NARUC.
\9\ The Industry Association consists of the American Gas
Association, the Edison Electric Institute, the Electric Power
Supply Association, the Independent Petroleum Association of
America, the Interstate Natural Gas Association of America, the
Natural Gas Supply Association, and the Process Gas Consumers Group.
\10\ Several commenters filed interventions or requested to
intervene out of time, or requested to file late comments. These
included the Indiana Utility Regulatory Commission, the Public
Service Commission of West Virginia, the Illinois Commerce
Commission, the Maryland Public Service Commission, the Public
Utilities Commission of the State of California, the Public Service
Commission of the State of New York, and the Public Utilities
Commission of Ohio. The Commission will treat all such submissions
as comments on the NOPR and has considered them regardless of when
they were filed.
---------------------------------------------------------------------------
II. Discussion
A. Intervention
6. The bulk of the comments expressed concern about the NOPR's
proposal to revise the Commission's intervention rules to provide that
there is no intervention as a matter of right in proceedings arising
from Part 1b investigations. For the most part, the commenters were
concerned with specific situations that may arise from time to time in
which they believe intervention would be warranted. A few comments
reflected broader concerns about possible restrictions on intervention.
1. Broader Issues
7. With respect to broader concerns, the National Rural Electric
Cooperative Association and American Public Power Association (NRECA/
APPA), and Ergon Energy Partners, LP (Ergon), assert that the
Commission should not adopt the proposed rule abolishing intervention
as a matter of right in enforcement proceedings. NRECA/APPA state that
the proposed rule is ``likely unlawful to the extent it purports to
eliminate statutory intervention rights'' and is unnecessary in light
of the standards contained in Rule 214.\11\ They assert that it would
be more consistent with the Administrative Procedure Act (APA) if the
Commission followed the standards contained in the existing rule.\12\
They further suggest that, as an alternative to the automatic grant of
a timely, unopposed intervention, the Commission could adopt procedures
employed by other agencies that provide for public notice and comment
periods on consent decrees.\13\ Ergon, while agreeing that intervention
in an investigation may be inappropriate, suggests that the Commission
modify the rule to allow third parties the opportunity for meaningful
participation in proceedings that directly affect their interests, and
to allow intervention once the Commission finds culpable conduct.\14\
---------------------------------------------------------------------------
\11\ NRECA/APPA Comments at 2, 5.
\12\ Id. at 6-9 (citing 5 U.S.C. 554(c)(1)).
\13\ Id. at 6, 11. NRECA/APPA cite Federal Trade Commission and
Department of Justice Regulations. Id. at 11.
\14\ Ergon Comments at 2.
---------------------------------------------------------------------------
8. We do not agree that the proposed revisions will contravene any
statutory right to intervene. The APA requires agencies to give
interested parties an opportunity for ``the submission and
consideration of facts, arguments, offers of settlement, or proposals
of adjustment when time, the nature of the proceeding, and the public
interest permit.'' \15\ The concerns underlying the NOPR's proposal are
directly related to these considerations. In an adjudicative proceeding
before the Commission, third parties typically provide facts to assist
us in developing a case. However, the purpose of investigations and
enforcement proceedings is to examine instances of potential wrongdoing
and take remedial action where needed. Only in unusual circumstances,
as discussed below, would third parties have additional information
that is necessary for the Commission's investigation. As we have stated
previously:
---------------------------------------------------------------------------
\15\ 5 U.S.C. 554(c)(1) (emphasis added).
As a general proposition, when a Part 1b investigation becomes
an enforcement action, we find that it would be inappropriate to
allow entities to intervene as parties to the proceeding. We find
that allowing parties to
[[Page 62883]]
intervene during an enforcement action potentially would be contrary
to the public interest and would interfere with the Commission
considering issues in a timely and judicious manner. This is because
in such an enforcement proceeding, the Commission is considering
closely the particular actions/inactions, rights, obligations and,
potentially violations and penalties of the subject party--here,
ETP. Such a proceeding is different from a rate filing, rulemaking,
or other proceeding where the rights of third parties are clearly
affected. Allowing third parties to intervene in enforcement
proceedings in pursuit of their own objectives could delay or
sidetrack a proceeding extending or even creating additional
uncertainty for the subject party.\16\
---------------------------------------------------------------------------
\16\ ETP, 121 FERC ] 61,282, at P 19.
Furthermore, the presence of intervenors could damage the ability
of the Commission to conduct investigations, impair our ability to
enter into settlements, and be contrary to the public interest. If our
ability to enter into settlements is impaired, the result could be
litigation of matters that could otherwise be settled, draining
Commission enforcement resources. Since litigation could be prolonged,
the benefits of settlements could be delayed, perhaps for years.
Another result from the strain on the Commission's investigative
resources could be fewer investigations, with fewer remedies being
imposed and fewer signals being sent to the industry regarding which
sorts of behaviors might expose an entity to an enforcement action,
along with greater costs and prolonged uncertainty imposed on the
subjects of investigation.
9. We consider our views in line with judicial precedent on the
subject of an agency's considerable discretion in making enforcement
decisions.\17\ This discretion extends, among other things, to the
decision whether to initiate an enforcement proceeding \18\ as well as
the conduct of the proceeding and any settlement efforts.\19\ Inclusion
of third parties as a matter of right would necessarily cede a portion
of the Commission's discretion to those parties. Furthermore, the
proposal made by NRECA/APPA that the Commission rely on the standards
currently contained in Rule 214 would limit or eliminate the
Commission's ability to take into account parameters such as time and
the nature of the proceeding, even though those parameters are
specifically set out in the APA. The current rule focuses on the nature
of the prospective intervenor's interest, not on the unique
considerations that pertain to an enforcement proceeding.\20\ We
therefore find that NRECA/APPA's proposal is not appropriate to the
enforcement context.
---------------------------------------------------------------------------
\17\ See Heckler v. Chaney, 470 U.S. 821, 831 (1985) (agency
decisions regarding conduct of enforcement actions are presumptively
unreviewable by the courts).
\18\ Baltimore Gas & Electric Co. v. FERC, 252 F.3d 456, 459 (DC
Cir. 2001) (BG&E) (``agency's decision not to exercise its
enforcement authority, or to exercise it in a particular way, is
committed to its absolute discretion'').
\19\ Id. at 458 (decision to settle is committed to FERC's
nonreviewable discretion).
\20\ Rule 214(b) of the Commission's Rules of Practice and
Procedure, 18 CFR 385.214(b).
---------------------------------------------------------------------------
10. In our view, the NOPR's proposal addresses Ergon's concerns
that third parties be able to participate in proceedings that directly
implicate their interests, where those interests can be addressed in a
manner that does not unduly hamper the Commission's enforcement
efforts. As noted in the NOPR, the Commission has recognized that, on
occasion, special circumstances might justify intervention in an
enforcement proceeding. One such situation was an intervention in an
enforcement proceeding where a state public service commission sought
to clarify the impact of a settlement on state interests.\21\ The
Commission also has noted that intervention might be appropriate to
allow parties to participate in the allocation of disgorged
profits.\22\ The proposed revisions to Rule 214 do not categorically
bar interventions in proceedings arising from Part 1b investigations.
Situations in which intervention would be appropriate are, however,
necessarily limited in keeping with the nature of the enforcement
function and the significant discretion accorded the Commission in that
area.
---------------------------------------------------------------------------
\21\ Williams Gas Pipelines Central, Inc., 94 FERC ] 61,285
(2001).
\22\ ETP, 121 FERC ] 61,282 at P 19 & n.28.
---------------------------------------------------------------------------
2. Specific Situations
11. NARUC and the state regulatory bodies argue that state entities
should be able to intervene given their unique position as regulators
charged with serving the public interest.\23\ The state regulators
argue that they have a direct interest in enforcement proceedings due
to the impact on their ratepayers \24\ and that their collaboration
will enhance enforcement efforts by avoiding duplicative efforts and
inconsistent outcomes.\25\ They further maintain that the NOPR's
proposal is inconsistent with section 308 of the Federal Power Act
(FPA),\26\ which authorizes the Commission to admit interested state
and local entities as parties to its proceedings.\27\ According to
NARUC, the FPA contains ``no qualifiers regarding the type of FERC
proceedings'' to which a state may be granted party status.\28\ NARUC
proposes to allow states to intervene as a matter of right, and
institute a process requiring ``specific notification of parties that
could have an interest in these determinations, including affected
State commissions.'' \29\ NARUC also states that the Commission should
clarify that the resolution of a Part 1b proceeding will not affect the
rights of states to pursue their own remedies for the wrongdoing that
was the subject of the FERC investigation.\30\ The Public Service
Commission of Maryland additionally asserts that state commissions must
be able to intervene as of right to request rehearing in enforcement
proceedings.\31\ Finally, the Indiana Utility Regulatory Commission
proposes that market monitors be allowed to intervene and be informed
of the status of ongoing investigations.\32\
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\23\ NARUC Comments at 5.
\24\ Id. at 5-6.
\25\ Id. at 6.
\26\ 16 U.S.C. 825g(a).
\27\ NARUC Comments at 3; see New York Pub. Serv. Comm'n
Comments at 4 (Commission should preserve carefully crafted balance
by continuing to recognize state interests); Pub. Serv. Comm'n of
Maryland Comments at 3 (it would be counterproductive not to include
state regulatory authority in enforcement proceedings).
\28\ NARUC Comments at 3.
\29\ Id. at 8.
\30\ Id.
\31\ Pub. Serv. Comm'n of Maryland Comments at 4.
\32\ Indiana Utility Regulatory Commission Comments at 3-4.
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12. One other specific circumstance drawing concern was North
American Electric Reliability Corp. (NERC) Reliability Standards
investigations, particularly so-called ``root cause'' investigations to
determine which entity is at fault for alleged violations of NERC
reliability standards.\33\ Public Service Electric and Gas Company
(PSEG), while agreeing with the Commission generally about intervention
in Part 1b investigations, states that, ``because in the RTO/ISO
construct responsibility for complying with NERC Reliability Standards
does not in every case align with responsibilities between PJM and its
members,'' NERC Reliability Standards investigations are substantially
different from other Part 1b investigations and participants deserve
more latitude in joining other parties. PSEG asserts that, in the
interest
[[Page 62884]]
of due process, it may be necessary in enforcement proceedings arising
from reliability standards investigations to ``widen the scope of
permitted interventions,'' \34\ and that an entity accused of a NERC
violation must be allowed to argue that another entity is responsible
for the violation, and join them as a party to the proceeding prior to
the penalty phase in order to ensure that there is an accurate finding
of the ``root cause'' entity.\35\
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\33\ There may be many situations where several entities could
be investigated for violations for facts arising out of the same
event and in such a case we would expect each entity would be
afforded the full rights allowed to a subject of an enforcement
action. Moreover, the conduct of any entity that might mitigate the
severity of the violation or penalty as to the subject of an
investigation can always be evaluated in an enforcement action
regardless of whether such other entity is an intervenor.
\34\ PSEG Comments at 3.
\35\ Id. at 5.
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13. As we note above, nothing in the proposed revisions to Rule 214
precludes intervention in enforcement proceedings. While clarifying
that there is no right to intervene in proceedings arising from Part 1b
investigations, the Commission nevertheless retains the discretion to
take into account specific circumstances that might favor intervention,
although such circumstances would be uncommon and the participation by
intervenors may be limited to specific matters.
14. We disagree with PSEG that there is any fundamental difference
concerning interventions in investigations carried out by the Regional
Entities and the Electric Reliability Organization (ERO) with respect
to possible violations of Reliability Standards approved by the
Commission and in Part 1b investigations conducted by the Commission
staff into the same kinds of violations. The Commission found in Order
No. 672 that, in general, there should be no right to intervene in
investigations carried out by Regional Entities or the ERO, for the
same reasons that interventions are not permitted in our staff's Part
1b investigations.\36\ We note that in its investigation, a Regional
Entity or the ERO has authority to inquire into all facts relevant to
whether a violation of a Reliability Standard occurred, and to identify
all entities, whether listed on the ERO's compliance registry or not,
whose actions related to the possible violation of a Reliability
Standard.\37\
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\36\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, 71 FR
8662 (Feb. 17, 2006), FERC Stats. & Regs. ] 31,204 at P 510, order
on reh'g, Order No. 672-A, 71 FR 19814 (April 18, 2006), FERC Stats.
& Regs. ] 31,212 (2006).
\37\ See Reliability Standard Compliance and Enforcement in
Regions with Regional Transmission Organizations or Independent
System Operators, 122 FERC ] 61,247, at P 19 (2008) (NERC and
Regional Entities will conduct thorough investigations that will
examine the ``root cause'' of violations, and would extend such
investigations to entities not listed on NERC's compliance registry
if necessary).
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15. We also stated in Order No. 672 that if a Regional Entity or
the ERO concluded that interventions would be appropriate in a
particular proceeding it would conduct arising from an investigation
into possible violations of Reliability Standards, it must receive
advance authorization to do so from the Commission.\38\ The Commission,
therefore, will be in a position to evaluate on a case-by-case basis
whether allowing interventions in a particular Regional Entity or ERO
proceeding would be appropriate.\39\ We anticipate that the Commission
could consider the issues PSEG mentions when making this determination
in particular cases.
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\38\ Order No. 672 at P 511.
\39\ See, e.g., North American Electric Reliability Council;
North American Electric Reliability Corporation, 119 FERC ] 61,060,
at P 150, order on reh'g, 120 FERC ] 61,260 (2007) (recognizing
exceptions to the general rule that no interventions should be
permitted in Regional Entity and NERC enforcement proceedings, but
stating that exceptions to this rule exist, which the Commission
would evaluate in advance upon request on a case-by-case basis).
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16. We do not agree with the expansive view of state participation
in enforcement proceedings taken by NARUC and some of the state
regulatory bodies. The proposed revisions are in no way inconsistent
with the FPA. Section 308 of the FPA states as follows:
In any proceeding before it, the Commission, in accordance with
such rules and regulations as it may prescribe, may admit as a party
any interested State, State commission, municipality, or any
representative of interested consumers or security holders, or any
competitor of a party to such proceeding, or any other person whose
participation in the proceeding may be in the public interest.\40\
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\40\ 16 U.S.C. 825g(a). Section 15(a) of the Natural Gas Act, 15
U.S.C. 717n(a), includes a nearly identical provision.
Although this provision recognizes the role of state authorities, it
does not draw a fundamental distinction between them and other
interested persons. Furthermore, the FPA leaves the Commission with
discretion to prescribe appropriate rules and to admit parties when it
is ``in the public interest.'' By using `may' instead of `shall,' it is
clear that section 308 establishes no right of intervention. The
section merely authorizes the Commission to admit state commissions
into FERC proceedings. Nothing in the provision prevents the Commission
from recognizing the differing public interests that may be at stake in
different types of proceedings. The provision likewise places no
limitations on the considerations that the Commission may take into
account in determining the public interest.
17. In our view, as a general matter the availability of
intervention in enforcement proceedings would be inconsistent with the
discretion in pursuing enforcement measures that Congress has afforded
the Commission. The DC Circuit, for instance, has determined that the
Natural Gas Act (NGA) \41\ places no limitations on the Commission's
exercise of its enforcement powers. The court has stated, ``At every
turn the NGA confirms that FERC's decision how, or whether, to enforce
that statute is entirely discretionary.'' \42\ Congress evinced no
intention to ``cabin FERC's enforcement discretion,'' because if it
had, it would have used ``obligatory terms such as `must,' `shall,' and
`will,' not the wholly precatory language employed in the act.'' \43\
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\41\ 15 U.S.C. 717, et seq. There is no meaningful difference
between the relevant provisions of the NGA and those of the FPA.
Compare 15 U.S.C. 717s(a) with 16 U.S.C. 825m, and 15 U.S.C. 717m
with 16 U.S.C. 825f. Analogous provisions of the NGA and FPA are to
be read in pari materia. See, e.g., Arkansas-Louisiana Gas Co. v.
Hall, 453 U.S. 571, 577 n.7 (1981).
\42\ BG&E, 252 F.3d at 460.
\43\ Id. at 461.
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18. We also see no reason why the revisions to Rule 214 would have
any impact upon the ability of states to pursue remedies for wrongdoing
that was the subject of a Part 1b investigation. The revisions address
only the availability of intervention in proceedings arising from Part
1b investigations. As the above discussion shows, the Commission's
enforcement powers lie within its own discretion and the revisions
therefore do not deprive any person or entity of any remedies that it
previously possessed.
19. Although we fully recognize the significant role played in
oversight and enforcement by state regulatory commissions, the
Commission has the sole authority to enforce its own jurisdictional
statutes. As the courts have recognized, enforcement authority is
generally considered discretionary with the agencies to which it is
granted. In our view, the effective exercise of that discretion
requires that enforcement proceedings remain focused on the primary
issue, which is the alleged misconduct of the respondent. The revisions
to Rule 214 nevertheless will leave the Commission with the ability in
appropriate cases to permit the participation of third parties, but
that participation will be tailored to appropriate situations based on
factors that are unique to the particular enforcement context.
20. For similar reasons, we are not persuaded by the various
suggestions
[[Page 62885]]
that we solicit participation in investigations and enforcement
proceedings. Given that we expect intervention to be permitted only in
unusual situations, measures designed to invite such participation will
in most cases result in delay and distraction from the central issues.
Consequently, we find it appropriate to adopt the revisions to Rule 214
contained in the NOPR.
B. Off-the-Record Communications
21. The Commission received comments on the NOPR's proposed
revisions to its ex parte and separation of functions rules from IA
representing the views of several entities. The IA states that it
supports the Commission's goal of equal treatment of investigative
staff and subjects of an investigation subsequent to a show cause
order, and argues that the Commission should extend the proposal to
include the early stages of the investigation.\44\ In its view,
allowing Commission investigative staff unrestricted access to
decisional employees, while allowing the subject of an investigation
only written communication, puts the subject of an investigation at a
disadvantage in making its case to the Commission. The IA specifically
requests that the Commission ``allow oral communications with
Commissioners and other decision-making employees by both
[i]nvestigative [s]taff and the [s]ubject.'' \45\
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\44\ IA Comments at 2.
\45\ Id. at 8-9.
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22. The IA also makes specific procedural suggestions. It maintains
that the subject of an investigation should be allowed to respond to
the investigator's report and should be provided with ``the full set of
material facts and legal conclusions appearing in the investigator's
report, at the same time the report or draft is submitted to any
decisional employee.'' \46\ It further requests clarification of Order
No. 711.\47\ That Order states that a ``notice of intent to seek a show
cause order `shall provide sufficient information and facts' to enable
the Subject to prepare a response.'' \48\ The IA requests that
``sufficient information and facts'' be clarified to mean ``all of the
material facts and legal conclusions being relied on in the
investigator's report.'' \49\ It further requests that a subject be
allowed to respond to an investigator's report if it is revised after a
response is filed.\50\
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\46\ Id. at 3.
\47\ Submissions to the Commission upon Staff Intention to Seek
an Order to Show Cause, Order No. 711, 73 FR 29431 (May 21, 2008),
FERC Stats. & Regs. ] 31,270 (2008).
\48\ Id. at 9.
\49\ Id.
\50\ Id. at 10.
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23. The IA's comments are outside the scope of this rulemaking.
Although the NOPR made reference to the Revised Policy on Enforcement,
which was issued on the same date, it was the latter that announced the
policy whereby neither Commissioners nor their personal staffs will
receive oral communications, in person or by telephone, about pending
investigations from the subjects of those investigations. That policy
does not appear in any regulation proposed here. The NOPR proposed only
to revise the rules on separation of functions and off-the-record
communications to clarify that both outside persons and Commission
investigative staff will be able to communicate with decisional staff
during the same time periods, specifically while an investigation is
pending until the point at which the Commission initiates an
enforcement proceeding. The NOPR did not in any way address the
procedures for staff to submit, and the subject of an investigation to
respond to, a request for a show cause order. Those procedures
therefore cannot be addressed properly here. The Commission therefore
will adopt the proposed revisions to its rules governing off-the-record
communications and separation of functions.
III. Information Collection Statement
24. Office of Management and Budget (OMB) regulations require OMB
to approve certain information collection requirements imposed by
agency rule.\51\ This Final Rule does not contain any information
collection requirements and compliance with the OMB regulations is thus
not required.
IV. Environmental Analysis
25. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\52\
Issuance of this Final Rule does not represent a major federal action
having a significant adverse effect on the quality of the human
environment under the Commission's regulations implementing the
National Environmental Policy Act of 1969. Part 380 of the Commission's
regulations lists exemptions to the requirement to draft an
Environmental Analysis or Environmental Impact Statement. Included is
an exemption for procedural, ministerial or internal administrative
actions.\53\ This rulemaking is exempt under that provision.
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\51\ 5 CFR 1320.12.
\52\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
\53\ 18 CFR 380.4(1) and (5).
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V. Regulatory Flexibility Act
26. The Regulatory Flexibility Act of 1980 (RFA) \54\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
This Final Rule concerns solely procedural matters. The Commission
certifies that it will not have a significant economic impact upon
participants in Commission proceedings. An analysis under the RFA is
not required.
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\54\ 5 U.S.C. 601-12.
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VI. Document Availability
27. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (https://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A,
Washington DC 20426.
28. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
29. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or e-mail at
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional Notification
30. These regulations are effective November 21, 2008. The
Commission has determined, with the concurrence of the Administrator of
the Office of Information and Regulatory Affairs of OMB, that this rule
is not a ``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996.
[[Page 62886]]
List of Subjects in 18 CFR Part 385
Administrative practice and procedure, Electric utilities,
Penalties, Pipelines, Reporting and recordkeeping requirements.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
0
In consideration of the foregoing, the Commission amends Part 385,
Chapter I, Title 18, Code of Federal Regulations, as follows.
PART 385--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for Part 385 continues to read as follows:
Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16
U.S.C. 791a-825v, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701;
42 U.S.C. 7101-7352, 16441, 16451-16463; 49 U.S.C. 60502; 49 App.
U.S.C. 1-85 (1988).
0
2. Amend Sec. 385.214 by adding new paragraph (a)(4) to read as
follows:
Sec. 385.214 Intervention (Rule 214).
(a) * * *
(4) No person, including entities listed in paragraphs (a)(1) and
(a)(2) of this section, may intervene as a matter of right in a
proceeding arising from an investigation pursuant to Part 1b of this
chapter.
* * * * *
0
3. Amend Sec. 385.2201 by revising paragraph (c)(1) to read as
follows:
Sec. 385.2201 Rules governing off-the-record communications (Rule
2201).
* * * * *
(c) * * *
(1) Contested on-the-record proceeding means
(i) Except as provided in paragraph (c)(1)(ii) of this section, any
proceeding before the Commission to which there is a right to intervene
and in which an intervenor disputes any material issue, any proceeding
initiated pursuant to rule 206 by the filing of a complaint with the
Commission, any proceeding initiated by the Commission on its own
motion or in response to a filing, or any proceeding arising from an
investigation under part 1b of this chapter beginning from the time the
Commission initiates a proceeding governed by part 385 of this chapter.
(ii) The term does not include notice-and-comment rulemakings under
5 U.S.C. 553, investigations under part 1b of this chapter, proceedings
not having a party or parties, or any proceeding in which no party
disputes any material issue.
* * * * *
0
4. Amend Sec. 385.2202 by revising it to read as follows:
Sec. 385.2202 Separation of functions (Rule 2202).
In any proceeding in which a Commission adjudication is made after
hearing, or in any proceeding arising from an investigation under part
1b of this chapter beginning from the time the Commission initiates a
proceeding governed by part 385 of this chapter, no officer, employee,
or agent assigned to work upon the proceeding or to assist in the trial
thereof, in that or any factually related proceeding, shall participate
or advise as to the findings, conclusion or decision, except as a
witness or counsel in public proceedings.
[FR Doc. E8-25103 Filed 10-21-08; 8:45 am]
BILLING CODE 6717-01-P
