[Federal Register Volume 63, Number 186 (Friday, September 25, 1998)]
[Proposed Rules]
[Pages 51312-51322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25373]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM98-1-000]


Regulations Governing Off-the-Record Communications

September 16, 1998.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to revise its rules concerning communications between persons 
outside the Commission and the Commission and its employees. The 
proposed regulations are designed to clarify ambiguities in the 
existing ex parte rules and to provide better guidance on what 
communications to and from the Commission are permissible and what 
communications are prohibited.

DATES: Written comments are due on or before December 24, 1998.

ADDRESSES: File comments with the Office of the Secretary, Federal 
Energy Regulatory Commission, 888 First Street, N.E., Washington, DC 
20426.

FOR FURTHER INFORMATION CONTACT: David R. Dickey, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, N.E., 
Washington, DC 20426, (202) 208-2140.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or -1a -copy the contents 
of this document during normal business hours in the Public Reference 
Room at 888 First Street, N.E., Room 2A, Washington, DC 20426.
    The Commission Issuance Posting System (CIPS) provides access to 
the texts of formal documents issued by the

[[Page 51313]]

Commission. CIPS can be accessed via Internet through FERC's Homepage 
(http://www.ferc.fed.us) using the CIPS Link or the Energy Information 
Online icon. The full text of this document will be available on CIPS 
in ASCII and WordPerfect 6.1 format. CIPS is also available through the 
Commission's electronic bulletin board service at no charge to the user 
and may be accessed using a personal computer with a modem by dialing 
(202) 208-1397, if dialing locally, or 1-800-856-3920, if dialing long 
distance. To access CIPS, set your communications software to 19200, 
14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, no 
parity, 8 data bits and 1 stop bit. User assistance is available at 
(202) 208-2474 or by E-Mail to [email protected].
    This document is also available through the Commission's Records 
and Information Management System (RIMS), an electronic storage and 
retrieval system of documents submitted to and issued by the Commission 
after November 16, 1981. Documents from November 1995 to the present 
can be viewed and printed. RIMS is available in the Public Reference 
Room or remotely via Internet through FERC's Homepage using the RIMS 
link or the Energy Information Online icon. User assistance is 
available at (202) 208-2222, or by E-Mail to [email protected].
    Finally, the complete text in WordPerfect format may be purchased 
from the Commission's copy contractor, RVJ International, Inc. RVJ 
International, Inc. is located in the Public Reference Room at 888 
First Street, N.E., Washington D.C. 20426.

I. Introduction

    The Federal Energy Regulatory Commission (Commission or FERC) 
proposes to revise its rules governing communications with 
Commissioners and Commission employees. The proposed revisions are 
designed to permit fully informed decision making while at the same 
time ensuring the integrity of the Commission's decision making 
process. The proposed revisions are intended specifically to provide 
clearer direction both to the Commission and its staff and persons 
outside the Commission on the ground rules for communication. In 
keeping with the Commission's outreach goals, specific changes are 
proposed to enhance the ability of the Commission to interact with 
other regulatory agencies and the public.

II. Background

    The amendments added to the Administrative Procedure Act (APA) in 
1976 by the Government in the Sunshine Act provided a general statement 
as to the limitations and procedures governing ex parte communications 
in matters that statutorily require an on the record 
hearing.1 Except as otherwise authorized by law, the APA 
prohibits ex parte communications relevant to the merits of a 
proceeding between employees involved in the decisional process of a 
proceeding and interested persons outside the agency.2 The 
prohibitions on ex parte communications have two primary underlying 
premises: (1) a hearing is not fair when one party has private access 
to the decision maker and can present evidence or argument that other 
parties have no opportunity to rebut; 3 and (2) reliance on 
``secret'' evidence may foreclose meaningful judicial 
review.4 The 1976 Act instructed agencies to issue 
regulations necessary to implement the APA's requirements.5 
Shortly thereafter, the Federal Power Commission implemented ex parte 
regulations based on the APA's guidance.6 This rule, Rule 
2201, applies to all covered proceedings before the Commission except 
those involving oil pipelines.7 The Commission has a second 
ex parte rule, Rule 1415, which was originally developed by the 
Interstate Commerce Commission (ICC) and which applies only to oil 
pipeline proceedings.8/ Although directed to the same end--
both prohibit certain ex parte communications and both describe methods 
for public disclosure of such communications--they differ in 
significant details.
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    \1\ 5 U.S.C. 551-557. Section 557 applies ``according to the 
provisions thereof, when a hearing is required to be conducted in 
accordance with section 556 of this title.'' Section 556 applies to 
hearings required by sections 553 and 554.
    \2\ See 5 U.S.C. 557(d)(1).
    \3\ WKAT, Inc. v. FCC, 296 F.2d 375 (D.C. Cir.), cert. denied, 
360 U.S. 841 (1961).
    \4\ Home Box Office, Inc. v. FCC, 567 F.2d 9, 54 (D.C. Cir.), 
cert. denied, 434 U.S. 829 (1977); U.S. Lines v. Federal Maritime 
Commission, 584 F.2d 519, 541-542 (D.C. Cir. 1978).
    \5\ 5 USC 559.
    \6\ FPC Order No. 562, 42 FR 14701, (March 16, 1977).
    \7\ Proposed 18 CFR 385.2201.
    \8\ 18 CFR 385.1415.
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III. Discussion

    The problems with the existing regulations were recognized by the 
participants in the Commission's 1992 Public Conference on ex parte 
issues, where a general consensus developed favoring a revised rule 
that would provide the Commission, the industry, and the public with a 
clearer statement of what communications are prohibited and when the 
prohibitions apply.9 In sum, the current regulations have 
been viewed as needlessly complex and confusing, and therefore provide 
inadequate guidance to Commission officials and the public. For 
example, as noted above, the Commission currently has two ex parte 
rules while it clearly has need for only one. Accordingly, the proposed 
rule would eliminate Rule 1415 in its entirety and provide that revised 
Rule 2201 will apply to oil pipeline cases in addition to other 
proceedings.
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    \9\ See, e.g., the comments filed by Interstate Natural Gas 
Association, the Industrial Groups, Pacific Gas Transmission 
Company, and Environmental Action in Docket No. RM91-10-000. Notice 
of Public Conference, 57 FR 10622 (Mar. 27, 1992); 58 FERC para. 
61,320 (Mar. 20, 1992).
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    Moreover, the current regulations fail to reflect adequately the 
APA ex parte prohibitions. For example, current Rule 2201 covers 
communications from someone outside the Commission to a Commissioner, 
Administrative Law Judge, or advisory staff, while the APA prohibitions 
cover communications in both directions.
    Finally, the Commission staff recently undertook an initiative, 
known as ``FERC First,'' to study the Commission's current and 
anticipated future missions and functions, identify the internal and 
external obstacles to carrying out those missions and functions 
efficiently and effectively, and, to the extent practicable, design 
processes enhancing the effectiveness of the Commission's operations. 
The FERC First team recognized the need to strengthen the Commission's 
relationships with Congress, federal and state agencies and other 
interested persons. Discussions undertaken as part of Commission 
staff's reengineering effort, indicated that many people feel that 
changes to the current ex parte rule could enhance the Commission's 
operations.
    For all of the above reasons, we believe that the existing ex parte 
rule should be revised to help achieve our goals of improving 
communications while at the same time ensuring the integrity of the 
Commission's decision making.
    The significant proposed revisions are discussed below. The 
proposed text for Rule 2201 is set out in full at the end of this 
notice.

[[Page 51314]]

A. Prohibitions on Communications Relevant to the Merits of a Contested 
Proceeding.

    Under the proposed regulations, the prohibitions would apply to 
``proceedings involving a party or parties'',10 defined as 
all docketed 11 Commission matters except investigations 
under Part 1b of the Commission's regulations. Non-covered proceedings 
would include informal (i.e., notice and comment) rulemaking 
proceedings, and any other proceeding not having a party or parties, 
and public technical, policy, and other conferences intended to inform 
the public or solicit their comments on issues of interest to the 
Commission and the industry.
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    \10\ The definition of ``party'' may be found at 18 CFR 385.102.
    \11\ ``Docketed'' matters include those bearing a ``docket'' 
number and those bearing a ``project'' number.
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    The proposed regulations would continue to prohibit ``off-the-
record communications relevant to the merits of a Commission 
proceeding'' in covered proceedings. The term ``relevant to the 
merits'' is taken directly from the APA provisions and its definition 
is drawn in substantial part from the legislative history of those 
provisions.12 The proposed regulations would define 
``relevant to the merits'' to mean capable of affecting the outcome of 
a proceeding, or of influencing, or providing an opportunity to 
influence, a decision on any substantive issue. Purely procedural 
inquiries or status requests generally will not have an effect on the 
outcome of a case or on the decision on any substantive issue. Under 
the proposed rule, communications would not be characterized as status 
requests, however, where the request states or implies a preference for 
a particular party or position, advocates expedited action or action by 
a certain date, or ``is otherwise intended, directly or indirectly, to 
address the merits or influence the outcome of a proceeding.'' 
13
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    \12\ See H.R. Rep. No. 880 (Part I), 94th Cong., 2d Sess. at 20, 
reprinted in 1976 U.S.C.C.A.N. at 2202: The [statute] prohibits an 
ex parte communication only when it is ``relative to the merits of 
the proceeding.'' This phrase is intended to be construed broadly 
and to include more than the phrase ``fact in issue'' currently used 
in the Administrative Procedure Act. The phrase excludes procedural 
inquiries, such as requests for status reports, which will not have 
an effect on the way the case is decided. It excludes general 
background discussions about an entire industry which do not 
directly relate to specific agency adjudication involving a member 
of that industry, or to formal rulemaking involving the industry as 
a whole. It is not the intent of this provision to cut an agency off 
from general information about an industry that an agency needs to 
exercise its regulatory responsibilities. So long as the 
communication containing such data does not discuss the specific 
merits of a pending adjudication it is not affected by this section.
    \13\ See Proposed 18 CFR 2201((c)(6).
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    Communications relating to purely procedural inquiries, such as how 
to intervene in a proceeding, the number of days before a responsive 
filing is due, or the number of copies that must be provided for a 
required filing are permitted. However, even some communications that 
appear to be procedural, in that they relate to how a proceeding is 
conducted, also may be capable of influencing the result on the 
substantive issues. These include communications about whether to hold 
a hearing and, if so, what type of hearing, and communications 
regarding the admissibility of evidence or the timing of a decision, 
since when the Commission acts can be highly relevant to the merits of 
the proceeding.14 Requests and advocacy of positions 
concerning such matters, especially by parties in a proceeding, should 
be presented on the record and in compliance with the Commission's 
procedural rules governing the format and service of pleadings.
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    \14\ But c.f., Gulf Oil Corp. v. Federal Power Commission, 563 
F.2d 588, 611 (3rd Cir. 1977) cert. denied, 434 U.S. 1062 (1978) 
(where Congressional communications are directed not at the agency's 
decision on the merits but at accelerating the disposition and 
enforcement of pertinent regulations, such legislative conduct does 
not affect the fairness of the agency's proceedings).
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    The proposed regulations are intended to apply to communications 
between decisional employees and persons outside the Commission without 
regard to who initiated the communication. Thus, for example, if a 
decisional Commission employee initiates a covered communication with a 
person outside the Commission, the employee may thereby be providing 
that person the opportunity to influence a decision on any substantive 
issue. The prohibitions apply both to oral and to written 
communications. The term ``written communications'' as used in the 
proposed rule extends to electronic communications (e.g., e-mail).
    Additionally, the APA ex parte prohibitions apply essentially to 
adjudications and similar cases required by statute to be decided on 
the record after an opportunity for hearing. Courts generally have 
treated rules barring private communications as a basic element of a 
fair hearing--whether an APA-type oral evidentiary hearing or one 
involving ``paper'' exhibits and pleadings--in any case involving 
competing private claims to a valuable privilege or 
benefit.15 The Commission's existing Rule 2201, and the 
proposed rule, extends the prohibitions to ``contested on-the-record'' 
proceedings required to be decided on the record of a Commission 
hearing, regardless of whether the hearing is required by statute, the 
Constitution, a Commission regulation, or an order in a particular 
case. Rule 1415 (applicable to oil pipeline cases) specifies that the 
rule covers both oral hearings and the ``taking of evidence by modified 
procedure,'' a reference to a ``paper hearing'' procedure, and this 
clarification is made in the proposed revisions to Rule 
2201.16
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    \15\ Sangamon Valley Television Corp. v. United States, 269 F.2d 
221 (D.C. Cir. 1959); and Sierra Club v. Costle, 657 F.2d 298, 400 
(D.C. Cir. 1981).
    \16\ See proposed Rule 18 CFR 385.2201(c)(4).
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    The existing rule further defines a proceeding as contested if a 
petition or notice to intervene in opposition has been filed. The 
explicit requirement that the proceeding be ``contested'' before ex 
parte rules attach reflects the notion that procedural requirements and 
constraints originally developed to preserve the rights of parties in 
an adjudication have no place in an administrative proceeding in which 
there is no ``contest'' comparable to the controversy in a judicial 
case. Accordingly, as discussed below, the proposed rule retains the 
triggering date of the existing rule, and off-the-record communications 
will not be prohibited until such time as a protest or intervention in 
opposition to an application has been filed.

B. When Communications Are Prohibited

    The proposed regulations would provide a clear-cut time frame for 
beginning and ending the prohibitions. The restrictions on 
communications would be inapplicable to off-the-record communications 
before the commencement of a proceeding. When there is no pending 
proceeding, there can be no barred communications pertaining to a 
proceeding. Accordingly, the prohibitions would take effect at the time 
of the filing with the Commission of a complaint, or a protest or 
intervention in opposition to a proceeding initiated by a person 
outside the Commission. (The prohibitions on off-the-record 
communications would not be triggered by a premature filing.)
    We note that the Commission often receives filings that do not 
specify whether a filed intervention is actually protesting or opposing 
a requested Commission action, or was filed merely to support the 
applicant or to allow the filer to be placed on a service list. The

[[Page 51315]]

Commission will consider interventions as opposing an application, and 
triggering the proposed rule's prohibitions, when they are expressly 
styled as such. Additionally, based on arguments or issues raised in 
the document, the Commission may consider a filing not styled as an 
intervention in opposition as nonetheless opposing the application, 
thus triggering the prohibitions contained in this proposed rule. 
However, the Commission will not treat as opposing an application those 
interventions that appear to have been filed solely to request that the 
filer be placed on the service list, or to preserve the opportunity to 
present oral argument should the Commission order a hearing to be held.
    The prohibitions would remain in force until final disposition of 
the proceeding by the Commission, or until the opposition, complaint or 
protest is withdrawn. Final disposition refers to the final Commission 
decision and the rehearing of that decision, where applicable. This 
means the prohibitions would continue until the Commission has acted on 
petitions for rehearing, rehearing has been denied by operation of law, 
the time for petitions for rehearing has passed and none has been 
filed, an application is withdrawn, or, in matters where there is no 
right to rehearing (e.g., DOE remedial order cases), when the 
Commission issues its final decision. Where an administrative law 
judge's initial decision becomes final by operation of law because no 
party has filed exceptions, and the Commission has taken no action to 
stay the effectiveness of an initial decision under section 375.712 of 
our regulations,17 final disposition of the case will be 
assumed to have occurred at that point. If a rehearing petition is 
filed, notwithstanding a party's failure to file exceptions, the 
prohibitions would apply to the rehearing process.18
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    \17\ 18 CFR 375.712.
    \18\ See 18 CFR 385.709(d). Where a document initiating a 
proceeding is filed but subsequently rejected (see 18 CFR 4.32 and 
385.2001), the document is deemed not to have been filed with the 
Commission. Accordingly, until the document has been resubmitted, no 
proceeding is pending before the Commission and the proposed Rule 
2201 prohibitions would not apply.
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    After final Commission disposition, the constraints on 
communication would cease to apply even if judicial review of the case 
has been sought. If a court remands the proceeding to the Commission 
following judicial review, the prohibitions would attach once more at 
the time the Court issues its mandate.

C. Who Is Covered

    The proposed regulations would prohibit off-the-record 
communications between a person outside the Commission and a 
``decisional employee.'' The definition of ``person'' as presently 
defined in Rule 102(d) arguably includes Commission staff.19 
Accordingly, for the purposes of this proposed Rule 2201, ``person'' 
would be defined as any person, other than an employee of the 
Commission. ``Decisional employee'' would be defined, as under existing 
Rule 2201, to mean a Commissioner, a member of his or her personal 
staff, an administrative law judge, or any other employee of the 
Commission who is or may be reasonably expected to be involved in the 
decisional process of a particular Commission proceeding. The revised 
definition is intended to clarify that the term does not include: (1) 
members of the Commission's trial staff, (2) a settlement judge 
appointed under existing Rule 603 (who is not also the presiding judge 
in the proceeding) 20, (3) a neutral (other than an 
arbitrator) in an alternative dispute resolution proceeding, and (4) an 
employee designated as non-decisional for a particular case. The 
revised definition, however, has been expanded to clarify that the term 
includes contractors involved in the Commission's decisional 
process.21
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    \19\ 18 CFR 385.102(d).
    \20\ 18 CFR 385.603.
    \21\ For purposes of the proposed rule, ``contractor'' means a 
direct Commission contractor or a third-party contractor subject to 
Commission supervision and control.
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    Members of the trial staff (or their supervisors in the conduct of 
the trial) are not decisional employees because they are barred by the 
separation of functions requirements from serving as advisors to the 
Commission in the same proceeding.22 For the same reason, 
any employee designated by the Commission to be non-decisional for a 
particular case is subject to similar separation of functions 
requirements and would not be involved in the Commission's decisional 
process. The prohibitions also would be inapplicable to communications 
with a settlement judge because settlement judges are not decisional 
employees and communications relating solely to settlement are not 
viewed as relating to the merits for purposes of restrictions on off-
the-record communications.23
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    \22\ See 18 CFR 385.2202.
    \23\ Louisiana Ass'n of Independent Producers and Royalty Owners 
v. FERC, 958 F.2d 1101, 1113 (D.C. Cir. 1992) (In a settlement or in 
a purely procedural proceeding there are no issues to be decided 
upon an open record and, therefore, in communicating with a 
settlement judge, the parties do not engage in ``surreptitious 
efforts'' to influence an official charged with the duty of deciding 
contested issues).
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D. Non-Covered Proceedings

1. Enforcement Investigations Not Covered
    Under the terms of part 1b of the Commission's regulations, 
enforcement investigations do not adjudicate any person's rights and 
have no parties.24 Moreover, section 385.101(b)(1) of the 
Commission's regulations provides that the Commission's Rules of 
Practice and Procedure, including existing Rule 2201, do not apply to 
part 1b investigations. The proposed regulations would clarify that the 
prohibitions will continue to be inapplicable to such 
investigations.25 The Commission recently proposed 
amendments to part 1b and to its Rule 206 complaints procedures 
26 that added provisions allowing, inter alia, non-public, 
anonymous communications between the Commission's Enforcement Hotline 
Staff. We note that these communications are permitted because there 
are no parties to such investigations. However, once a matter being 
investigated is set for hearing, the prohibitions against off-the-
record communications would apply to that proceeding.
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    \24\ 18 CFR Part 385.101(b)(1).
    \25\ 18 CFR Part 1(b).
    \26\ See Complaint Procedures, 63 FR 41,982 (Aug. 6, 1998), 
(Notice of Proposed Rulemaking).
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2. Rulemaking Proceedings Not Covered
    Similarly, neither the APA ex parte prohibitions nor the 
Commission's existing ex parte regulations apply to informal, notice 
and comment, rulemaking proceedings. Communications with outside 
sources of information are proper and often necessary to the full 
development of a rulemaking.27
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    \27\ We note, however, that the information available to support 
a final rule upon judicial review is generally limited to that found 
in the final rule itself and material that has been placed in the 
associated rulemaking record.
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E. Exempt Communications

    The proposed rule sets out ten exemptions from the general 
prohibitions against off-the-record communications. These exemptions 
are intended to be independent of one another. Accordingly, if any 
individual exemption applies to the circumstances of a particular 
proceeding, off-the-record communications will be permitted subject to 
any disclosure requirements. For example, under proposed exemption 18 
CFR 385.2201(d)(8), a Federal agency with concurrent jurisdiction that 
is a party to a

[[Page 51316]]

proceeding may not participate in off-the-record communications 
relating to that proceeding. Yet, that party agency may freely 
participate in the development of an environmental assessment or 
environmental impact statement in accordance with proposed exemption 18 
CFR 385.2201(d)(9).
    We note that while the proposed rule seeks to establish clear 
boundaries between prohibited and permitted communications, the 
Commission and Commission staff would, of course, retain the discretion 
not to engage in permitted discussions if in their judgment such 
communications would create the appearance of an impropriety or 
otherwise seem inconsistent with the best interests of the 
Commission.28
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    \28\ Proposed Rule 18 CFR 385.2201(i)(2).
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1. Communications Expressly Permitted by Rule or Order
    As a general principle the APA recognizes that its prohibitions 
against off-the-record communications do not include those ``required 
for the disposition of ex parte matters as authorized by law.'' 
29 Existing 18 CFR 385.2201(b)(1) also allows the 
Commission, by rule or order, to modify any of the provisions of Rule 
2201, or Rule 1415, as they apply to all or part of a proceeding, to 
the extent permitted by law. The proposed rule contains a similar 
provision without the reference to Rule 1415.
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    \29\ 5 U.S.C. 557(d)(1). The legislative history of this section 
indicates that it was envisioned as allowing ex parte requests for 
subpoenas and other matters that might be resolved by the decisional 
authority on an ex parte basis. See 1977 U.S.C.C.A.N. at 2201.
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    The proposed regulations track the legislative history in 
permitting general background or broad policy discussions about an 
industry or a segment of an industry where these discussions do not 
relate to the specific merits of a particular pending case. General 
discussions about industry conditions or broad policies provide useful 
information important to effective regulation. Restrictions on off-the-
record communications were not intended to cut an agency off from the 
general information it needs to carry out its regulatory 
responsibilities.30 Such general discussions are permitted 
even where they may touch on an issue that also happens to be before 
the Commission in the specific factual context of an individual case.
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    \30\ H.R. Rep. No. 880 (Part 1), 94th Cong., 2d Sess. at 20, 
reprinted in 1976 U.S.C.C.A.N. at 2202.
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    However, where the discussion is carried on in the context of a 
particular case, the prohibitions extend to policy and legal issues as 
well as to issues of fact. Moreover, where a general discussion relates 
to the specific merits of a pending case (where, for example, the 
discussion turns on the specific facts of the case), the prohibitions 
would apply even if the case is not mentioned by name during the 
discussion.
2. Communications Related to Emergencies
    Subject to a disclosure requirement, the proposed rule would allow 
the Commission to engage in off-the-record communications with regard 
to emergencies. This provision would allow the Commission to respond to 
emergencies such as earthquakes, floods, severe weather conditions, 
fires, or explosions that damage or threaten to damage FERC-regulated 
facilities, or significant market anomalies that undermine the ability 
of FERC-regulated entities to deliver energy. Written communications, 
or summaries of oral communications, taking place during an emergency 
would be delivered to the Secretary to be noticed and placed in the 
public file of the proceeding(s) most readily identifiable with 
facilities affected by the emergency. The Commission invites comments 
on this proposal. The Commission is particularly interested in comments 
on whether, for example, a significant but temporary economic impact on 
regional markets may properly constitute an emergency that, subject to 
the disclosure requirements described above, would appropriately permit 
the Commission to conduct off-the-record communications to address 
those issues expeditiously.
3. Communications Concerning Published or Widely Disseminated Public 
Information Permitted
    The Commission is free to take official notice of its own decisions 
as well as the published decisions of judicial and other administrative 
tribunals. In addition, since the basic concern of the prohibitions is 
with private communications and ``secret'' evidence, Commissioners and 
Commission staff may freely consult legal, economic, engineering and 
other technical or scholarly journals. Material appearing in the trade 
press, the general news media, and on publicly available Internet sites 
is also not subject to the prohibitions.31 Similarly, 
speeches and statements made to a large audience at a public forum will 
rarely raise the types of concerns that the proposed rule is intended 
to address.
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    \31\ While materials in scholarly journals, the news media, and 
on the Internet are not communications prohibited by the proposed 
rule, this does not necessarily mean that they are accurate, valid 
or persuasive in all circumstances. Under Commission regulations, 
even officially noticeable facts are subject to rebuttal at the 
request of any participant. 18 CFR 385.508(d).
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    Communications relating to such published or other widely 
disseminated public information would be permitted to the extent that 
they do not seek to determine how precedent might apply to fact-
specific issues in a pending proceeding. Thus, the Commission and the 
staff would be permitted to explain events such as actions that courts 
or the Commission have already taken, and to describe objectively 
issues before the Commission or the positions of the parties regarding 
those issues.
4. Pre-filing Consultations Permitted
    Pre-filing communications would be permitted under the proposed 
rule. Pre-filing consultations are often useful in educating applicants 
as to the appropriate format, content, and form that an application or 
other filing should take. Such consultations can therefore improve the 
chances that filings, once made, will be ready for evaluation on the 
merits. The value of pre-filing consultations is explicitly recognized 
in Commission regulations, which permit such informal consultations in 
connection with pipeline certificate applications 32 as well 
as public utility and natural gas rate schedules and tariff 
filings.33 Other specific examples of permitted pre-filing 
communications would include consultations under sections 4.34(i), 
4.38, and 16.8 of our regulations taking place before the filing with 
the Commission of an application for certain hydropower licenses, 
exemptions or license amendments.34
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    \32\ 18 CFR 157.14(a).
    \33\ 18 CFR 35.6 and 154.25.
    \34\ See 18 CFR 4.34, 4.38 and 16.8.
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    Our alternative hydropower licensing procedures permit establishing 
pre-filing communications protocols.35 Under these 
procedures, an applicant must demonstrate that it has made an effort to 
contact all resource agencies, citizens groups and others that may be 
affected by the project, and that a consensus exists for the 
participants to communicate off-the-record under a communications 
protocol. The alternative procedures may be used only upon Commission 
approval and must include a disclosure requirement providing that 
information specified in the protocol will be placed in the public 
record. The Commission invites comments on whether off-the-record 
communications, occurring under

[[Page 51317]]

protocols entered into under the alternative procedures during the pre-
filing stages, should be permitted to continue after the application is 
formally filed with the Secretary. Is there a need to renew the 
consensus in order for the communications protocol to survive? Should 
the protocol remain in effect following an application absent formal 
opposition by a party (whether an existing or new participant)?
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    \35\ See Docket No. RM95-16, Order No. 596, Regulations for the 
Licensing of Hydroelectric Projects, 62 FR 59802 (Nov. 5, 1997), 81 
FERC para. 61,103 (October 29, 1997).
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5. Communications Agreed to by the Parties Permitted
    Proposed 18 CFR 385.2201(b)(5) would retain the existing provision 
in 18 CFR 385.2201(b)(6) permitting communications which all the 
parties agree may be made without regard to communications constraints. 
The proposed regulations would retain the current policy of imposing no 
prohibition on communications during a meeting or conference noticed 
and open to all parties in a proceeding. The fundamental concern posed 
by off-the-record communications is with private or secret 
communications. The right to a fair hearing is denied when one party or 
interest has private access to the decision maker and can present 
evidence or argument that other parties have no opportunity to 
rebut.36 This concern is not present in meetings which all 
parties have an opportunity to attend.
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    \36\ WKAT, Inc. v. FCC, 296 F.2d at 383.
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6. Written Communications with Non-party Elected Officials Permitted
    Proposed 18 CFR 385.2201(d)(6) would permit written communications 
from non-party elected officials acting in their official 
representative capacities. The Commission receives numerous letters 
from Federal and state elected officials requesting expedition or 
forwarding correspondence from constituents.37 This proposal 
would treat such letters as permitted communications, subject to a 
disclosure requirement under which the communications would be placed 
in the public record and noticed, providing an opportunity for review 
and comment, thus mitigating any potential due process concerns.
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    \37\ The legislative history of the APA makes clear that members 
of Congress are ``interested persons'' subject to the APA 
restrictions on communications. It also indicates, however, that 
this prohibition is not intended to prohibit routine inquiries or 
referrals of constituent correspondence. See H.R. Rep. No. 880 (Part 
1), 94th Cong., 2d Sess at 21-22, reprinted in 1976 U.S.C.C.A.N. at 
2203.
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7. Certain Staff Communications Concerning Compliance Matters Permitted
    We are concerned with the fact that Commission staff frequently is 
restrained from being able to communicate with regulated entities and 
others regarding compliance with the requirements of Commission orders 
pending on rehearing. Such situations can lead to regulatory delay in 
compliance.
    Most post-licensing compliance takes place after all the underlying 
issues have been resolved. Therefore, the proposed restrictions would 
not apply to conversations or exchanges of information during 
Commission staff safety inspections, post-licensing or post-
certification environmental monitoring or compliance, or routine staff 
audits of company books or records when the inspections, monitoring, or 
audits are not undertaken in connection with an ongoing licensing or 
certificate case or other specific pending proceeding. Proposed 18 CFR 
385.2201(d)(7) would make clear that limited off-the-record 
communications also would be permitted where, for example, a licensee 
is undertaking a good faith compliance effort, while pursuing rehearing 
on the underlying order. Only discussions concerning the mechanics of 
compliance, as opposed to the merits of the underlying order, would be 
permitted.
    For example, in a hydropower licensing context, we do not believe 
that post-licensing communications on compliance with dam safety 
matters should be encumbered by the fact that a party has sought 
rehearing on the underlying licensing order.
8. Communications with Other Federal, State and Local Agencies
    Existing 18 CFR 385.2201(b)(1) does not prohibit communications 
from interceders who are Federal, state or local agencies that have no 
official interest in and whose official duties are not affected by the 
outcome of a covered proceeding to which the communication relates. 
Because many of the outside agencies with which the Commission works do 
have an official interest in the proceeding to which interagency 
communications relate, the proposed rule would permit some 
communications with Federal, state, or local agencies that are not 
parties in the relevant Commission proceeding. This exemption would 
apply to communications involving: (1) a request for information by the 
Commission or Commission staff; or (2) a matter over which the other 
Federal, state, or local agency and the Commission share regulatory 
jurisdiction, including authority to impose or recommend licensing 
conditions.
    The partial exemption recognizes that, except where the other 
Federal, state, or local agency is directly involved in a Commission 
case as a party, the public interest favors a free flow of information 
between government agencies with shared jurisdiction. Where agencies 
are charged with shared jurisdiction and regulatory responsibilities, a 
cohesive government policy can best be developed and implemented 
through communication, cooperation and collaboration between agencies 
and their staff that sometimes can take place most effectively off-the-
record.38 To ensure that such communications do not 
compromise the procedural rights of the parties or the integrity of the 
Commission's decisional record, proposed 18 CFR 385.2201(g)(1)(ii) 
would require that actual information obtained through off-the-record 
communications with Federal, state or local agencies, and relied upon 
by the Commission in reaching its decision, be placed in the public 
record to allow the public to discern the basis of the Commission's 
decision.
---------------------------------------------------------------------------

    \38\ Similar exclusions appear in the Federal Communications 
Commission's ex parte regulations. See 47 CFR 1.1204(b)(5), (7) and 
(8).
---------------------------------------------------------------------------

9. Communications Relating to Environmental Documentation
    The Commission is interested in establishing rules that will permit 
more effective cooperation with other agencies, applicants, and the 
public in developing documentation, consistent with the National 
Environmental Policy Act of 1969 (NEPA),39 that supports 
decisions made by the Commission. Accordingly, the Commission proposes 
to exclude from the coverage of the rule all off-the-record 
communications required to comply with the NEPA and implementing 
regulations issued by the Council on Environmental Quality (CEQ) 
40 and the Commission.41
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    \39\ National Environmental Policy Act of 1969, as amended, 42 
U.S.C. 4321 et seq.
    \40\ 40 CFR 1500-1508.
    \41\ 18 CFR Part 380.
---------------------------------------------------------------------------

    The CEQ's regulations describe an open and public NEPA process 
leading up to the issuance of an environmental document that includes 
opportunity for public comment and participation, and record 
development akin to the procedures used in informal rulemaking. For 
example, in cases necessitating the preparation of an Environmental 
Impact Statement (EIS), CEQ rules describe a public scoping requirement 
that may include noticed,

[[Page 51318]]

public, on-the-record meetings,42 and requirements that all 
substantive comments (whether written or oral) received on the draft 
statement (or summaries thereof where the response has been especially 
voluminous) should be addressed in the final statement whether or not 
they are relied upon by the agency.43 Comments or 
communications received after issuance of the final EIS should be made 
on-the-record or else they will be considered as prohibited 
communications, unless they are exempt under another provision of this 
rule.
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    \42\ Scoping meetings convened by the Commission are frequently 
transcribed by a court reporter. In the absence of a stenographic 
report, the substance of significant communications taking place in 
such meetings is memorialized, in writing, by Commission staff. 
These documents are made available to the parties and placed in the 
public record of the proceeding.
    \43\ 40 CFR 1503.4(b).
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    Just as with the development of an EIS, CEQ regulations provide 
that, to the extent practicable, environmental agencies, the applicant, 
environmental interest groups, and the public should be involved in the 
process of crafting an environmental assessment (EA).44 
However, the CEQ's regulations for preparation of an EA do not require 
the same procedures to further public participation as those related 
solely to EIS preparation.
---------------------------------------------------------------------------

    \44\ 40 CFR 1501.4.
---------------------------------------------------------------------------

    Based on our experience, a substantial majority of applications 
requiring preparation of an EA are uncontested. Because the rule does 
not apply to uncontested proceedings, communications undertaken in the 
environmental review process for these proceedings may take place off-
the-record. However, this rule must address how off-the-record 
communications should be handled in those cases where an application 
requiring preparation of an EA is contested.
    Accordingly, the Commission proposes, in cases that are contested, 
to exempt from the coverage of the proposed rule those communications 
relating to the preparation of an EA in cases where the Commission has 
determined to solicit and address public comment. In this manner, we 
believe that the Commission will have access to the information it 
needs to make an informed decision, and the public will have the 
requisite opportunity to participate in the process leading up to 
issuance of an environmental assessment. We note that the ``final'' 
environmental assessment may in fact be incorporated in the 
Commission's final order on the underlying action.
    CEQ regulations require, to the fullest extent possible, that 
Federal agencies integrate related surveys, required by other relevant 
environmental review laws, into an EIS. Therefore, communications 
necessary to assure compliance with all relevant statutes protecting 
environmental, cultural and historic preservation concerns 
45 also would be considered as excluded from the rule, if 
they occur prior to the issuance of a completed EA or EIS. Thus, to the 
extent that an applicant's compliance with these statutes is addressed 
in a final EA or EIS associated with a particular proceeding, the 
integrity of decisions arising under these statutes is protected by the 
EIS process. Any communications taking place after the Commission's 
issuance of the final environmental document would have to take place 
on-the-record.46
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    \45\ Such statutes include, but are not limited to, the Coastal 
Zone Management Act of 1972, 16 U.S.C. 1451 et seq.; National 
Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.; Endangered 
Species Act, 16 U.S.C. 1532 et seq.; and section 401 the Clean Water 
Act, 33 U.S.C. 1341.
    \46\ The Commission believes that it is not required to disclose 
the specific details of communications with some cultural, 
historical, and environmental protection agencies. Rather, in order 
to protect the location or specific nature of an endangered 
resource, a general description of the problem encountered and 
proposed mitigative action, should be sufficient disclosure. This 
rationale would apply whether the communication is addressed in an 
environmental document, or as a separate part of the decisional 
record.
---------------------------------------------------------------------------

    The Commission is mindful that other Federal and state resource 
agencies with which we share jurisdiction may choose to intervene in 
the same Commission proceeding in which they have been serving as a 
cooperating agency 47 in the preparation of NEPA 
documentation, and thus may have been made privy to non-public 
predecisional information. The Commission invites comments on whether 
cooperating agencies who are also parties should have access to 
materials to which other parties lack access.
---------------------------------------------------------------------------

    \47\ The term ``cooperating agency'' is defined in the CEQ 
regulations as an agency invited by the lead agency to participate 
in the preparation of an environmental document. See 40 CFR 1501.6.
---------------------------------------------------------------------------

10. Communications With Individual, Non-Party Landowners Permitted
    Communications involving individual, non-party landowners, whose 
property may be directly affected by a pending proceeding, would be 
permitted, subject to a disclosure requirement. This exemption would 
apply even after the issuance of a completed NEPA document. Consistent 
with fundamental fairness, such individual landowners should be 
permitted to comment without the need to incur the expense of formally 
intervening in a proceeding. Any possible bias to the parties would be 
mitigated by a requirement that communications with affected landowners 
be placed in the record of the proceeding. This exception would not 
apply, however, in the case of communications with a landowner 
organization, or if an individual landowner is a party to the 
proceeding.

F. Handling of Off-the-Record Communications

1. Prohibited Off-the-Record Communications
    The proposed regulations differentiate between two types of off-
the-record communications: those prohibited by the regulations and 
those permitted by the regulations. Commission decisional employees who 
make or receive a prohibited communication would remain obligated to 
deliver a copy of the communication, if written, or a summary of the 
substance of any oral communication to the Secretary for submission 
into the public record associated with, but separated from, the 
decisional record in the proceeding. The Secretary will acknowledge 
receipt of the prohibited communication by periodically issuing a 
public notice that the agency has received a prohibited communication. 
Such notice will list the author of the communication, date of receipt 
by the Commission, and the docket number to which the communication 
relates. Parties may seek an opportunity to respond on the record to 
any facts or contentions made in a communication placed in the non-
decisional associated file. The Commission will grant such requests 
only where it determines that the dictates of fairness so require. When 
the request is granted, a copy of the off-the-record communication and 
the permitted response will be made a part of the decisional record.
    The proposed regulations depart from existing Rule 2201 (but not 
the APA) in dropping the requirement that submissions in the public 
file revealing barred communications must also be routinely served on 
the parties to the relevant proceeding. The substitution of ``public'' 
notice is modeled on the approach used in the FCC's ex parte rule with 
regard to permitted off-the-record communications.48 Given 
that these prohibited communications are not part of the Commission's 
decisional record, we believe there is no justification for imposing on 
the Commission a burdensome requirement of service on the parties. We 
note that the FCC's requirement is that its

[[Page 51319]]

Secretary publicly notice receipt of the off-the-record contact. Such 
notice apparently is accomplished by a regular posting on the public 
bulletin board, without resort to more formal Federal Register notice. 
Considering that the communications in question are prohibited, we 
believe the FCC's approach is valid and therefore propose that the 
Commission adopt it.
---------------------------------------------------------------------------

    \48\ 47 CFR 1.1206(b).
---------------------------------------------------------------------------

    The Commission specifically invites comments on the use of public 
notice in lieu of service.49 We also invite comments on 
whether the Secretary should retain the prohibited communication and 
response thereto in a file separate from the decisional file (i.e., the 
associated file) or whether the incoming communication should be 
immediately placed in the decisional file and noticed (in the Federal 
Register) by the Secretary for public comment, and whether the latter 
approach would provide adequate incentive to comply with the ex parte 
rules.
---------------------------------------------------------------------------

    \49\ The Commission may also notice prohibited communications on 
its Homepage (http://www.ferc.fed.us) and/or its official bulletin 
board.
---------------------------------------------------------------------------

    The proposed regulations also would drop the requirement that 
appears in existing Rule 2201, but not in Rule 1415 or the APA, for 
``sworn'' statements summarizing oral communications. While sworn 
statements may be appropriate in certain specific circumstances, the 
proposed regulations follow the practice of most Federal agencies in 
not imposing a general requirement of sworn statements.
2. Permitted Off-the-Record Communications
    The due process principles underlying ex parte relate to preserving 
the actual and apparent integrity of administrative processes and 
creation of an agency decision-making record capable of judicial 
review. Consistent with these principles, the Commission proposes to 
permit certain off-the-record communications, but require that 
documentation of such communications be placed in the decisional record 
with public notice that the communication has been placed in the 
record. This disclosure requirement may, however, create some 
incremental burden on FERC staff relating to drafting memoranda or 
notes on oral communications, and may chill communications that outside 
parties would prefer not to disclose. The Commission invites comments 
on whether the proposed rule attains an appropriate balance of these 
interests.50/
---------------------------------------------------------------------------

    \50\ For communications under five exceptions we propose a 
disclosure and notice requirement. These five exceptions--relating 
to emergencies, communications by non-party public officials, agency 
communications, the NEPA process, and landowner interests--might 
otherwise be viewed as violative of the ex parte principles designed 
to ensure the integrity of the Commission's proceedings if they were 
not accompanied by alternative procedural assurances that the 
Commission's records will be complete and that others will have a 
fair opportunity to respond. Thus, we propose to require that 
communications under these five areas be placed in the public 
record.
    In total, the Commission proposes to exempt ten categories of 
communications from coverage under the proposed rule. The other 
proposed exemptions relate to communications that may be viewed as 
falling outside the penumbra of ex parte communications recognized 
by the APA. Therefore, we do not require notice and a record of 
their occurrences. These include communications permitted by law, 
prefiling communications, communications that all parties agree may 
take place off the record, procedural inquiries, communications 
taking place in public fora, and communications relating to 
compliance with Commission orders.
---------------------------------------------------------------------------

    The proposed rule would require the Secretary periodically to 
notice receipt of these permitted communications, thereby notifying the 
parties, in lieu of direct service, that the communications are in the 
decisional record (or environmental record), and that they have the 
right to file a response.
    We propose that notice be accomplished through publicly posting 
receipt of these communications. In addition, the notice might be 
accessible through the Commission's Internet homepage. We request 
comments on the sufficiency of this type of notice for publicizing 
permitted off-the-record communications.

G. Sanctions

    The proposed regulations expand the sanctions provision in existing 
Rule 2201 in one respect. Added as a possible sanction for violations 
of the proposed regulations is disqualification or suspension from 
practice or appearance before the Commission. This sanction is already 
available under Rule 2102 to deal with misconduct by those appearing 
before the Commission.51/ It is included in the proposed 
regulations to clarify that persons who engage in barred communications 
are among those who may be subject to disqualification or suspension in 
the appropriate circumstances. One purpose of the proposed rule is to 
assure that the Commission's decisions are based only on information 
available to all parties. Accordingly, this sanctions portion of the 
rule would apply notwithstanding that the prohibited off-the-record 
communication would be made publicly available under proposed 18 CFR 
385.2201(f). As under existing Commission regulations, the proposed 
sanctions provision would apply only to persons outside the Commission. 
Commission employees who violate the proposed Rule 2201 prohibitions 
would be subject to administrative disciplinary measures applicable to 
Federal employees.
---------------------------------------------------------------------------

    \51\ 18 CFR 385.2102.
---------------------------------------------------------------------------

IV. Regulatory Flexibility Certification Statement

    The Regulatory Flexibility Act 52/ requires rulemakings 
either to contain a description and analysis of the impact the rule 
would have on small entities, or to certify that the rule will not have 
a significant economic impact on a substantial number of small 
entities. An analysis is not required if a proposed rule will not have 
such an impact.53/
---------------------------------------------------------------------------

    \52\ 5 U.S.C. 601-612.
    \53\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

    The regulations proposed in this rulemaking would revise the 
Commission's Rules of Practice and Procedure dealing with certain off-
the-record communications. The Commission certifies that this proposed 
rule will not have a significant economic impact on small entities.

V. Environmental Statement

    Commission regulations require that an environmental assessment or 
an environmental impact statement be prepared for any Commission action 
that may have a significant adverse effect on the human 
environment.54/ The Commission has categorically excluded 
certain actions from this requirement as not having a significant 
effect on the human environment. Among these are proposals for rules 
that are clarifying, corrective, or procedural, or that do not 
substantively change the effect of the regulations being 
amended.55/ The proposed rule falls under this exception; 
consequently, no environmental consideration is necessary.
---------------------------------------------------------------------------

    \54\ Order No. 486, Regulations Implementing National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1997), FERC Stats. & 
Regs., Regulations Preambles 1986-90 para. 30,783 (1997).
    \55\ 18 CFR 380.4(a)(2)ii).
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VI. Information Collection Statement

    The Office of Management and Budget's (OMB's) regulations require 
that OMB approve certain information collection requirements imposed by 
agency rules.56/ However, this proposed rule contains no 
information collection requirements and therefore is not subject to OMB 
approval.
---------------------------------------------------------------------------

    \56\ 5 CFR Part 1320.
---------------------------------------------------------------------------

VII. Public Comment Procedures.

    The Commission invites interested persons to submit written 
comments on

[[Page 51320]]

this Notice of Proposed Rulemaking. An original and 14 copies of the 
comments must be filed with the Commission no later than December 24, 
1998.
    Comments should be submitted to the Office of the Secretary, 
Federal Energy Regulatory Commission, 888 1st Street, N.E., Washington, 
DC 20426 and should refer to Docket No. RM98-1-000.
    All written comments will be placed in the Commission's public 
files and will be available for inspection in the Commission's Public 
Reference Room at 888 1st Street, N.E., Washington, DC 20426, during 
regular business hours.

List of Subjects in 18 CFR Part 385

    Administrative practice and procedure, Electric power, Penalties, 
Pipelines, and Reporting and recordkeeping requirements.
    By direction of the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 385, Chapter I, Title 18, Code of Federal Regulations, as set 
forth below.

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. 717-717w, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352; 49 
U.S.C. 60502; 49 App. U.S.C. 1-85.

    2. Section 385.101(b)(4) is revised to read as follows:


Sec. 385.101  Applicability (Rule 101).

* * * * *
    * * *
    (4) With respect to any oil pipeline filing or proceeding, the 
modified procedures set forth in Rules 1404 and 1414 will apply.
* * * * *
    3. Section 385.915 is revised to read as follows:


Sec. 385.915  Off-the-record communications (Rule 915).

    The provisions of Rule 2201 (prohibited communications and other 
communications requiring disclosure) apply to proceedings pursuant to 
this subpart, commencing at the time the Secretary issues a proposed 
remedial order under 10 CFR 205.192, an interim remedial order for 
immediate compliance under 10 CFR 205.199D, or a proposed order of 
disallowance under 10 CFR 205.199E.
    4. Section 385.1012 is revised to read as follows:


Sec. 385.1012  Off-the-record communications (Rule 1012).

    The provisions of Rule 2201 (prohibited communications and other 
communications requiring disclosure) apply to proceedings pursuant to 
this subpart, commencing at the time a petitioner files a petition for 
review under Rule 1004 (commencement of proceedings).


Sec. 385.1415  [Removed]

    5. Section 385.1415 is removed.
    6. The Subpart V heading and Sec. 385.2201 are revised to read as 
follows:

Subpart V--Prohibited Communications and Other Communications 
Requiring Disclosure; Separation of Functions


Sec. 385.2201  Prohibited communications and other communications 
requiring disclosure (Rule 2201).

    (a) Purpose and scope. The purpose of this section is to govern 
communications with the Commission in a manner that permits fully 
informed decision making by the Commission while ensuring the integrity 
and fairness of the Commission's decisional process. This rule shall 
apply to all contested on-the-record proceedings except that the 
Commission may, by rule or order, modify any provision of this subpart, 
as it applies to all or part of a proceeding, to the extent permitted 
by law.
    (b) Prohibited off-the-record communications in proceedings 
involving a party or parties. (1) Except as permitted in paragraph (d) 
of this section, no person shall make or knowingly cause to be made to 
any decisional employee an off-the-record communication relevant to the 
merits of a contested on-the-record proceeding involving a party or 
parties; and
    (2) Except as permitted in paragraph (d) of this section, no 
decisional employee shall make or knowingly cause to be made to any 
person an off-the-record communication relevant to the merits of a 
contested on-the-record proceeding involving a party or parties.
    (c) Definitions. For purposes of this section:
    (1) Off-the-record communication means a communication which, if 
written, is not served on the parties to the proceeding, and if oral, 
is made without reasonable prior notice to the parties to a proceeding.

    Note: Written communications includes a communication 
transmitted by electronic means such as ``e-mail.''

    (2) Contested on-the-record proceeding means any complaint, action 
initiated by the Commission, or other proceeding involving a party or 
parties in which an intervenor opposes a proposed action.

    Note: The Commission will consider an intervention as contesting 
the proposed action, and triggering the prohibitions on off-the-
record communications, when the intervenor expressly styles its 
petition as being in opposition. Additionally, the Commission will 
consider an intervention as being in opposition, even when not so 
styled, if the arguments contained therein reasonably establish the 
filer's opposition to the application. However, the Commission will 
not treat an intervention as being in opposition to the applicant 
when it appears to have been made solely for the purpose of being 
placed on the service list or to seek permission to participate in a 
hearing, should the Commission order that a hearing be held.

    (3) Decisional employee means a Commissioner or member of his or 
her personal staff, an administrative law judge, or any other employee 
or contractor of the Commission who is or may reasonably be expected to 
be involved in the decisional process of a particular proceeding, but 
does not include an employee designated as part of the Commission's 
trial staff in a proceeding, a settlement judge appointed under Rule 
603 (settlement of negotiations before a settlement judge), a neutral 
(other than an arbitrator) in an alternative dispute resolution 
proceeding, or an employee designated as non-decisional in a particular 
proceeding subject to the separation of functions requirements 
applicable to trial staff under Rule 2202 (separation of functions of 
staff).

    Note: For purposes of this paragraph, ``contractor'' means a 
direct Commission contractor or a third-party contractor subject to 
Commission supervision and control.

    (4) Person means any person outside the Commission.
    (5) Proceeding involving a party or parties means any docketed 
Commission proceeding other than an investigation under part 1b of this 
chapter, an informal rulemaking under the procedures of 5 U.S.C. 553 or 
exempted from those procedures under 5 U.S.C. 553(a)(1) and (a)(2), or 
any other proceeding not having a party or parties.

    Note: An on-the-record proceeding includes both proceedings set 
for oral hearings and those hearings disposed of on evidence taken 
by modified procedures, that is a ``paper hearing.''

    (6) Relevant to the merits means capable of affecting the outcome 
of a proceeding, or influencing a decision, or providing an opportunity 
to influence a decision, on any substantive issue in the proceeding, 
but does not include:

[[Page 51321]]

    (i) A request for information relating solely to the status of a 
proceeding, unless the request states or implies a preference for a 
particular party or position, advocates expedited action or action by a 
certain date or time, or is otherwise intended, directly or indirectly, 
to address the merits or influence the outcome of a proceeding; or
    (ii) A general background or broad policy discussion involving an 
industry or a substantial segment of an industry, where the discussion 
occurs outside the context of any particular proceeding involving a 
party or parties and does not address the specific merits of the 
proceeding.

    Note: Although the Administrative Procedure Act permits off-the-
record communications concerning general background or policy 
discussions about an industry or segment of an industry, discussions 
of how such background or policy information might apply to the 
specific merits of a pending proceeding are not permitted.

    (d) Exempt communications. The general prohibitions in paragraph 
(b) of this section do not apply to the following:
    (1) A communication specifically authorized by law, or permitted by 
Commission rule or order in a particular proceeding;
    (2) Subject to the disclosure requirements of paragraph (g) of this 
section, a communication related to an emergency;
    (3) Communications of published or broadly disseminated public 
information;

    Note: Communications taking place in public fora, and material 
appearing in the public domain, are not subject to the general 
prohibitions on off-the-record communications.

    (4) Pre-filing communications, including communications under 
Secs. 4.34(i), 4.38, and 16.8 of this chapter, to take place before the 
filing with the Commission of an application for an original, new, 
nonpower, or subsequent hydropower license or exemption or a license 
amendment;

    Note: Application of this section is not limited to the above 
listed hydropower regulations. Other examples of permitted pre-
filing communications would include, but are not limited to, 
submitting draft rate schedules for the purpose of receiving staff 
suggestions under Sec. 35.6 of this chapter, and certain informal 
pipeline certificate consultations pursuant to Sec. 157.14(a) of 
this chapter.

    (5) A communication that all parties to a proceeding agree may be 
made without regard to the prohibitions in paragraph (b) of this 
section;

    Note: Absent formal opposition by a party, this exemption allows 
pre-filing communications protocols to remain in effect after an 
application is filed with the Commission.

    (6) Subject to the disclosure requirements of paragraph (g) of this 
section, a written communication from a non-party elected official;

    Note: This exemption covers written communications requesting 
expedition or forwarding constituent correspondence; oral 
communications would be subject to the prohibitions of this subpart.

    (7) Where an order is pending rehearing, communications on issues 
relating to compliance with order conditions;

    Note: Communications related to the basis for, or seeking 
changes in, the underlying order for which rehearing is being sought 
would not be permitted.

    (8) Subject to the requirements of paragraph (g) of this section, a 
communication to or from another Federal, state or local agency that is 
not a party in the Commission proceeding where the communication 
involves:
    (i) A verbal or written request for information made by the 
Commission or Commission staff; or
    (ii) A matter over which the other Federal, state, or local agency 
and the Commission share jurisdiction, including authority to impose or 
recommend conditions in connection with a Commission license, 
certificate, or exemption;
    (9) Subject to the disclosure requirements of paragraph (g) of this 
section, and without regard to party status, any communication that 
relates to:
    (i) The preparation of an environmental impact statement, if such 
communications occur prior to the issuance of the final environmental 
document; or
    (ii) The preparation of an environmental assessment in those cases 
where the Commission has determined to solicit public comment in the 
preparation of an environmental assessment, if such communications 
occur prior to the issuance of the final environmental document.

    Note: This exemption applies to discussions with Federal, state, 
or local agencies, applicants, landowners, and non-governmental 
entities engaged in preparation of an environmental document. Once 
the final environmental document is issued, further communications 
with parties would be subject to the general prohibitions described 
in this section unless another exemption applies.

    (10) Subject to the disclosure requirements of paragraph (g) of 
this section, any communications involving individual, non-party 
landowners whose property may be affected by a pending proceeding.

    Note: This exemption applies even after the National 
Environmental Policy Act process has been completed, but is 
inapplicable to landowner organizations and individual landowners 
who are parties to the underlying proceeding.

    (e) When the prohibitions apply. (1) The prohibitions in paragraph 
(b) of this section will apply:
    (i) For proceedings initiated by the Commission--from the time an 
order initiating the proceeding is issued;
    (ii) For proceedings returned to the Commission on judicial 
remand--from the date the Court issues its mandate;
    (iii) For complaints initiated pursuant to Rule 206 (complaints)--
from the date of the filing of the complaint with the Commission, or 
the date the Commission initiates an investigation on its own motion; 
and
    (iv) For all other matters--from the time of the filing, in 
accordance with Sec. 385.2001(a)(2), of any protest or intervention in 
opposition to an application, petition, tariff or rate filing, or other 
matter that is, or will be, the subject of the proceeding, including a 
petition for rehearing of an administrative law judge's decision that 
becomes a final decision under Rule 708(d).

    Note: Prematurely filed interventions would not trigger the 
prohibitions on off-the-record communications.

    (2) The prohibitions will remain in force until final disposition 
of the proceeding by the Commission, including a decision on rehearing 
where applicable. The prohibitions will also remain in effect until the 
time period for seeking rehearing has expired. In the case of an 
initial decision by an administrative law judge, the prohibitions will 
remain in force until it becomes final pursuant to Rule 708(d).
    (f) Handling of prohibited off-the-record communications. A 
prohibited communication in violation of paragraph (b) of this section 
will not be considered part of the record for decision in the 
applicable Commission proceeding except to the extent that the 
Commission by order determines otherwise.
    (1) Disclosure requirement. Any decisional employee who makes or 
receives a communication prohibited by paragraph (b) of this section 
will submit to the Secretary the communication, if written, or a 
summary of the substance of any oral communication. The Secretary will 
place the communication or summary in the public file associated

[[Page 51322]]

with, but not part of, the decisional record of the proceeding.
    (2) Public notice requirement. The Secretary shall periodically 
issue a public notice listing any prohibited off-the-record 
communications or summaries thereof received by his or her office 
relating to a proceeding. Such notice shall identify the author of the 
communication, the date the communication was received, and the docket 
number to which it relates.
    (3) Responses to prohibited off-the-record communications. Any 
party may file a response to a communication placed in the non-
decisional public record under paragraph (f)(1) of this section. A 
party may also file a written request for an opportunity to respond, 
on-the-record, to any facts or contentions made in an off-the-record 
communication placed in the non-decisional public file. The Commission 
will grant such request only where it determines that the dictates of 
fairness so require. When the request is granted, a copy of both the 
off-the-record communication, and the permitted response, will be made 
a part of the decisional record.
    (g) Handling of permitted off-the-record communications.--(1) 
Disclosure requirement. (i) Any written information, and a summary of 
the substance of any significant oral information, not already in the 
record, obtained through a permitted communication in response to an 
emergency covered by paragraph (d)(2) of this section, will be 
submitted to the Secretary and placed in the decisional record of the 
underlying Commission proceeding.
    (ii) Any permitted written information obtained through a permitted 
communication with a non-party elected public official under paragraph 
(d)(6) of this section will be submitted to the Secretary and placed in 
the decisional record of the proceeding.
    (iii) Except for information of which official notice may be taken, 
any written information, and a summary of the substance of any 
significant oral information, not already in the record, obtained 
through a permitted communication with a Federal, state, or local 
agency under paragraph (d)(8) of this section, will be submitted to the 
Secretary and placed in the decisional record of the Commission 
proceeding.
    (iv) Any written information, and a summary of the substance of any 
significant oral information, not already in the environmental 
documentation of a proceeding, obtained through a permitted 
communication to or from any person under paragraph (d)(9) of this 
section, will be submitted to the Secretary, placed in the public 
record of the proceeding, and addressed in the final environmental 
document issued by the Commission.
    (v) Any written information, and a summary of the substance of any 
significant oral information, not already in the record, obtained 
through a permitted communication involving an individual non-party 
landowner under paragraph (d)(10) of this section will be submitted to 
the Secretary, and placed in the decisional record of the Commission 
proceeding.
    (2) Public notice requirement and response. For each communication 
required to be disclosed under paragraph (g)(1) of this section, the 
Secretary shall periodically issue a public notice listing any 
permitted off-the-record communications or summaries thereof received 
by his or her office relating to a proceeding. Any party may file a 
response on the record.
    (h) Sanctions. (1) If a person knowingly makes or causes to be made 
a communication in violation of paragraph (b) of this section, the 
Commission may disqualify and deny the person, temporarily or 
permanently, the privilege of practicing or appearing before it, in 
accordance with Rule 2101 (appearances); and
    (2) If a party or its agent or representative knowingly makes or 
causes to be made a communication in violation of paragraph (b) of this 
section, the Commission may require the party, agent, or representative 
to show cause why the party's claim or interest in the proceeding 
should not be dismissed, denied, disregarded, or otherwise adversely 
affected because of the prohibited off-the-record communication.
    (i) Section not exclusive. (1) The Commission may, by rule or 
order, modify any provision of this section as it applies to all or 
part of a proceeding, to the extent permitted by law.
    (2) The provisions of this section are not intended to limit the 
authority of a decisional employee to decline to engage in permitted 
off-the-record communication, or where not required by the rule, to 
make a public disclosure of a permitted off-the-record communication, 
in circumstances where the employee determines that such action is 
appropriate.
    7. The heading of Sec. 385.2202 is revised to read as follows:


Sec. 385.2202  Separaton of functions (Rule 2202).

[FR Doc. 98-25373 Filed 9-24-98; 8:45 am]
BILLING CODE 6717-01-P