Federal Energy Regulatory Commission

The FERC Regulatory Process

Dennis H. Melvin, Esq.

Director – Legal Division (OAL)

Federal Energy Regulatory Commission

Washington, DC

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Question

•How does FERC decide what a utility can charge and what goes into a tariff?

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How Does FERC Regulate?

• Industry-wide Decisions– Notice of Inquiry (NOI)– Notice of Proposed Rulemaking (NOPR)– Final Rule or Policy Statement

• Company Specific Decisions– Applications (rate increase, change in a term or

condition of a contract, etc.) or complaints filed by utilities, customers, interested parties or state commissions

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Company Specific Decisions

• Application or complaint filed

• Filing is publicly noticed

• Staff analysis and recommendation to the Commission (tight deadlines)

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• Commission action– Decide merits of case without further

procedures

– Hold a technical conference or call for more written information

– Hold trial-type hearing before an Administrative Law Judge

Company Specific Decisions (con’t)

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OAL• Represents the public interest• Only unbiased party• The results we seek:

– Lowest rates consistent with a well-run utility

– Non-discriminatory treatment for all customers

– Opportunity for utility to earn a fair return and compete

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Settlements Are Important

• Prevents the legal system from being overloaded

• Settlement allows for faster resolution of disputes

• Parties are usually happier with a settlement

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Adjudication Milestones

• 1. Judge assigned and Procedural Track set• 2. Prehearing/Discovery• 3. Prepared Testimony• 4. Pre Trial Brief• 5. Hearing• 6. Initial and Reply Briefs• 7. Initial Decision • 8. Exceptions Briefs• 9. Commission Order & Rehearing

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Milestone One

• The Chief Judge will:– Assign an Administrative Law Judge to the

case– May indicate a deadline for decision

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Milestone Two• Prehearing Conference

– Conducted by Presiding Judge assigned– Scope and timetable to be determined– Settlement urged, Trial Staff available

• Discovery– Discovery concerns raised with ALJ– Procedures established– Wide range of options

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Discovery

• Information regularly filed with the agency

• Written questions and answers

• Subpoenas available– Necessary if non-party data required– Nationwide reach

• Depositions, Inspections, Audits

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Protective Orders

• Intent is to safeguard confidential information

• Order describes how confidential data is to be handled

• Issued by the Judge

• Everyone must sign and agree to its terms

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Milestone Three

• Prepared Testimony– Prefiled before the hearing– May contain confidential information and

need special handling– May be electronically filed– Several rounds

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Milestone Four

• Pre Trial Brief– Includes the theory of the case– Evidence to be presented– Summary of witnesses’ testimony – Description of exhibits– Legal foundation and precedent– Weaknesses in presentations of others

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Milestone Five• Hearing

– Can last one day to many months– Witnesses sworn, direct testimony and

exhibits admitted, then cross-examination– Confidential testimony requires special

procedures– Written transcript made – Judge ultimately decides admissibility of

evidence

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A Hearing Room at the FERC

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Another Hearing Room

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Milestone Six

• Initial and Reply Briefs– Dates set by Presiding ALJ– Simultaneous unless ordered otherwise– Must not discuss evidence outside of the

record

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Milestone Seven

• Initial Decision – Usually summarizes evidence and

arguments– Published in FERC Reports– Certified to Commission with the record– Always subject to Commission review

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Milestone Eight

• Briefs On and Opposing Exceptions– 30 days after ID, 20 days thereafter– Must be less than 100 pages

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Milestone Nine• Commission Order & Rehearing

– No deadlines on Commission action on Judge’s ruling

– Published in FERC Reports– Rehearing request must be filed within 30

days– Further appeals can be made to the court

system

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Thank you for your attention !

• Dennis H. Melvin, Esq.» Director, Legal Division» Office of Administrative Litigation» Federal Energy Regulatory Commission» 888 First Street, NE» Washington, DC 20426» (202) 502-8042 : Phone» (202) 208-0188 : FAX» dennis.melvin@ferc.gov