FERC Proposes to Strengthen, Clarify Standards of Conduct
The Federal Energy Regulatory Commission (FERC) recently proposed a series of reforms to the Standards of Conduct for transmission providers that aims to simplify and strengthen the rules.
The Federal Energy Regulatory Commission (FERC) recently proposed a series of reforms to the Standards of Conduct for transmission providers that aims to simplify and strengthen the rules.
The intent of the proposal, outlined in a Notice of Proposed Rulemaking (NOPR), is to return to the core principles of Order Nos. 497 and 889, which until 2003 addressed standards of conduct for, respectively, natural gas pipeline and electric transmission provider employees, according to FERC.
The NOPR proposes to revamp the Standards to make enforcement easier and compliance less elusive, provide clarity by rewording and reorganizing the Standards, avoid impeding business operations due to overly broad coverage and eliminate the concept of “energy affiliates” for both electric and gas companies, according to FERC.
The NOPR is broken down into three rules: the “independent functioning rule” as used in Order Nos. 497 and 889; the “no-conduit rule” that prohibits both passing and receipt of transmission function information; and the “transparency rule” that improves transparency to detect, correct and sanction any undue discrimination.
The independent functioning rule requires transmission function employees to function independently of marketing function employees, defining both transmission and marketing functions and using those definitions to define employees of both functions. It also carries over from existing standards the exceptions to marketing functions.
The no-conduit rule prohibits transmission provider employees from disclosing information concerning the transmission system to marketing or energy affiliates. It also prohibits employees from passing restricted information to marketing function employees.
The transparency rule allows information to be taken out of the no-conduit rule by contemporaneously posting it on the Open Access Same Time Information Service (OASIS) or the company’s Internet Web site. Inadvertent disclosure of non-public information can be cured by posting it on OASIS or the Internet.
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