[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Rules and Regulations]
[Pages 31493-31497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13986]



Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM99-6-000; Order No. 604]

Electronic Service of Documents

Issued May 26, 1999.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.


SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
amending Rule 2010(f) (18 CFR 385.2010(f)) to permit participants to 
proceedings before the Commission voluntarily to serve documents on one 
another by electronic means. This revision is intended to give the 
participants more flexibility in meeting the service requirements, and 
to encourage participants to gain experience with electronic service. 
This change is an important step in the Commission's plan to convert to 
broad-based electronic filing.

DATES: This final rule is effective July 12, 1999.

Brooks Carter, Office of the Chief Information Officer, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 501-8145;
Wilbur Miller, Office of the General Counsel, 888 First Street, NE., 
Washington, DC 20426, (202) 208-0953.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in the Public Reference Room 
at 888 First Street, NE, Room 2A, Washington, DC 20426
    The Commission Issuance Posting System (CIPS) provides access to 
the texts of formal documents issued by the Commission from November 
14, 1994, to the present. CIPS can be accessed via Internet through 
FERC's Home page (http://www.ferc.fed.us) using the CIPS Link or the 
Energy Information Online icon. Documents will be available on CIPS in 
ASCII and WordPerfect 6.1. 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

[[Page 31494]]

(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 Home page 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 on diskette 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, NE, Washington, DC 20426.

    Before Commissioners: James J. Hoecker, Chairman; Vicky A. 
Bailey, William L. Massey, Linda Breathitt, and Curt Hebert, Jr.

I. Introduction

    The Federal Energy Regulatory Commission (Commission) is amending 
18 CFR 385.2010 to allow for electronic service of documents in certain 
circumstances. The Commission is modifying the existing service rule to 
make clear that willing participants may serve and receive documents by 
electronic means. This revision is intended to give participants more 
flexibility in meeting the service requirements, and to encourage 
participants to gain experience with electronic service. This change is 
an important step in the Commission's plan to convert to broad-based 
electronic filing.

II. Background

    In order to increase the efficiency with which it carries out its 
program responsibilities, the Commission is moving forward with 
measures to use information technology to reduce the amount of 
paperwork required in proceedings before the Commission. One part of 
that effort, and the subject of this rulemaking, is to make document 
service more efficient by employing electronic means where the 
participants so agree. This rule follows the Commission's action in 86 
FERC para. 61,324 (1999) (rehearing pending), in which it amended its 
complaint procedures, in 18 CFR 385.206(c), to allow service of 
complaints by electronic mail.
    Both the legislative and executive branches of the Federal 
Government have set as goals the substitution of electronic means of 
communication and information storage for paper means. For example, the 
Government Paperwork Elimination Act directs agencies to provide for 
the optional use and acceptance of electronic documents and signatures, 
and electronic record-keeping, where practical, by October 
2003.1 Similarly, Office of Management and Budget Circular 
A-130 requires agencies to employ electronic information collection 
techniques where such means will reduce the burden on the public, 
increase efficiency, reduce costs, and help provide better 

    \1\ Pub. L. 105-277, Sections 1702-1704.
    \2\ Circular A-130, Para. 8.a.1(k).

    On May 13, 1998, the Commission issued a request for comments and 
notice of intent to hold a technical conference in its Electronic 
Filings Initiative, Docket No. PL 98-1-000. The Commission stated, 
inter alia, that it intended to clarify its rules to facilitate the use 
of electronic service.3 It also presented the question 
whether it should encourage electronic service among parties over the 

    \3\ 63 FR 27532 (May 13, 1998).
    \4\ Id.

    Most commenters and participants at the conference favored some 
form of electronic service, including the following recommendations: 
(a) allowing participants to reach agreement among themselves regarding 
electronic service; (b) allowing electronic service over the Internet; 
(c) allowing e-mail notice of filing with a reference to a copy of the 
filing on the filer's or the Commission's web site; and (d) use of a 
server to facilitate electronic service by the Commission and by 
participants in proceedings.
    The Commission continues to believe that electronic service among 
participants should be encouraged. The revision contained in this 
rulemaking is preliminary to the separate task of implementing 
procedures governing electronic filing of documents.

III. Discussion

    Rule 2010(f) currently states that service may be effected by 
first-class United States mail or better, or ``[b]y delivery in a 
manner that, and to a place where, the person on whom service is 
required may reasonably be expected to obtain actual and timely 
receipt.'' The current rule does not provide specifically for 
electronic service. To make clear that such service is permissible, the 
Commission is amending the service rule to add the express option of 
service by electronic means among participants who voluntarily agree to 
use electronic service.
    This rule is only intended to address service among participants, 
and does not change the rules for filings made with the Commission. 
Electronic filing with the Commission will be the subject of a future 
    This rule leaves it up to individual participants to come to 
agreement about the use of electronic service. It will not be necessary 
for every participant in a particular case to agree to use electronic 
service. Agreements need not be reciprocal. For instance, if 
participant A prefers to receive service electronically, participant B 
could agree to serve A electronically even if B did not want electronic 
    Under this rule, participants should not discriminate in their use 
of electronic service. For instance, if multiple participants agree to 
serve one another documents in a particular format via e-mail, they 
cannot refuse to serve another willing participant the same way. 
However, the rule contains no restriction on the number or variety of 
methods of electronic service that can be used in a particular matter. 
Some participants could agree to receive service in one format, while 
at the same time other participants could agree to receive service in 
another format.
    Depending on the software used for creation of documents, the page 
numbering of documents may vary depending on the fonts, margins and 
other formatting options used. The Commission recognizes that such 
formatting differences can create problems in accurate citation to 
documents filed with the Commission. But such problems should be 
surmountable. To ensure a consistent citation format for documents 
officially filed with the Commission, participants should cite to the 
official version of the filed document in compliance with Rule 

    \5\ 18 CFR 385.2003(c).

    Under this rule, in matters set for hearing before an 
Administrative Law Judge (ALJ), the ALJ should consult the participants 
to determine where use of electronic service is appropriate. One 
difficulty in litigated cases is that many of the documents served are 
not filed with the Commission, which may complicate the issue of which 
version of a document should be used for citation purposes. Moreover, 
Rule 403(c) 6 requires that responses to discovery be under 
oath or certified as true and accurate. The Commission believes that 
the ALJs are in the best position to determine whether participants may 
serve responses to discovery via electronic means, and if electronic 
service is permitted, how to satisfy the oath/certification 

    \6\ 18 CFR 385.403(c).

    The Commission recognizes that some methods of electronic service, 

[[Page 31495]]

some circumstances, may not be as reliable as other traditional means 
of service. Participants under this rule will need to consider how to 
verify service. Some participants' mail systems may provide 
notification that a recipient has received a transmission. If that type 
of system verification were not available, the transmitter could agree 
to notify the recipients by telephone to let them know that they were 
being served, and the recipient could assume the obligation to notify 
the transmitter if the service was not received. Alternatively, the 
document itself could request that the recipient notify the transmitter 
that the document had been received. If the transmitter did not receive 
timely notification of receipt, it would contact the intended recipient 
to learn whether the document was successfully received.
    The Commission has considered the potential effect of this final 
rule on Year 2000 preparations and has concluded that the rule will not 
have any adverse impact on Year 2000 readiness.
    Due to the limited scope of this rule, the Commission is issuing it 
as a final rule without a period for public comment. Under 5 U.S.C. 
553(b), notice and comment procedures are unnecessary where a 
rulemaking concerns only agency procedure and practice, or where the 
agency finds that notice and comment is unnecessary. This rule concerns 
only a matter of agency procedure. Furthermore, it merely clarifies the 
existing service rule to provide electronic service as an option 
expressly. Electronic service has in fact already been used in some 
Commission proceedings. Finally, the rule is entirely voluntary; no 
participant can be required to send or receive service electronically. 
Therefore, the Commission finds notice and comment procedures to be 
    Although the Commission invites participants to agree to use 
electronic service, this rulemaking does not include any change 
regarding service on or by the Office of the Secretary (OSEC); service 
on OSEC must be made via the more traditional methods of service found 
in Section 2010(f)(1) and (2).
    To the extent that the regulations regarding a particular type of 
document place additional requirements on service, those rules will 
prevail over the generic rule on service. For instance, sections 4.22 
and 375.314 require service or notification by certified mail; those 
requirements cannot be met by electronic service at this time. No 
changes to these regulations are being made at this time.

IV. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (RFA) requires agencies to prepare 
certain statements, descriptions and analyses of rules that will have a 
significant impact on a substantial number of small 
entities.7 The Commission is not required to make such 
analyses if a rule would not have such an effect.

    \7\ 5 U.S.C. 601-612.

    The Commission does not believe that this rule will have such an 
impact on small entities. Most companies regulated by the Commission do 
not fall within the RFA's definition of small entity.8 
Further, the filing requirements of small entities are not impacted by 
this rule. No participants are required to use electronic service; they 
will do so only voluntarily. Therefore, the Commission certifies that 
this rule will not have a significant economic impact on a substantial 
number of small entities.

    \8\ 5 U.S.C. 601(3) provides the definition of small business 

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.9 The Commission has categorically excluded 
certain actions from this requirement as not having a significant 
effect on the human environment. Among these are rules that are 
clarifying, corrective, or procedural, or that do not substantively 
change the effect of the regulations being amended.10 This 
rule is procedural in nature and therefore falls under this exception; 
consequently, no environmental consideration is necessary.

    \9\ Order No. 486, Regulations Implementing National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs., Regulations Preambles 1986-1990 para. 30,783 (1987).
    \10\ 18 CFR 380.4(a)(2)(ii).

VI. Information Collection Statement

    The following collection of information contained in this rule is 
being submitted to the Office of Management and Budget (OMB) for review 
under Section 3507(d) of the Paperwork Reduction Act of 
1995.11 FERC identifies the information provided under 18 
CFR Part 385 as FERC-601.

    \11\ 44 U.S.C. 3507(d).

    Public Reporting Burden: Estimated Annual Burden: The burden 
estimates for complying with current paper service regulations are 
reflected in all of the Commission's information collections which 
require service by the applicant or parties to a proceeding. As part of 
the Commission's ongoing efforts to streamline the regulatory process, 
the Commission has consolidated the burden hours associated with the 
service of documents to a proceeding under single collection of 
information for easier reference.12 FERC-601 has been 
designated to be that point of reference. The total burden estimates 
for service under these existing information collections, based on 
10,000 applications and 10,000 intervenors per year are as follows:

    \12\ Currently, the burden hours are attributed to the following 
collections of information approved by OMB: 1902-0082; 1902-0083; 
1902-0096; 1902-0098; 1902-0058; 1902-0115; 1902-0073; 1902-0060; 
1902-0062; 1902-0153; 1902-0154; 1902-0155; 1902-0086; 1902-0089; 

                                                                          No. of
                          Data collection                              (applicants         No. of           No. of         Hours per       Total annual
                                                                           plus          documents        responses         response          hours
FERC-601 (see footnote 12).........................................          20,000           40,000        1,000,000             0.50          500,000

Record keeping adds an additional 20,000 hours. Therefore, the total 
annual hours for Service under the current regulations, (Reporting + 
record keeping) = 520,000 hours.
    Based on the Commission's experience with electronic service of 
documents, it is estimated that about 20% of the 1,000,000 responses 
will be served electronically in the first year, 30% in the second 
year, and 40% in the third year, at a burden rate of 0.25 hours per 
document. This includes an allowance for the overhead of working out 
electronic service agreements, maintaining Internet addresses, and 
storing electronic records. The current

[[Page 31496]]

annual reporting burden for proposed FERC-601, based on current 
regulations, is 520,000 hours.
    The comparison of burden under the pre-existing and new regulation 
for the estimated number of documents that will be served 
electronically is:

                                         Burden Hours for 3 Year Period
                                                    First Year      Second Year     Third Year     Total burden
                 Form of service                   reduction 20%   reduction 30%   Reduction 40%       hours
Current (all paper).............................         520,000         520,000         520,000       1,560,000
New (paper or optional electronic)..............         470,000         445,000         420,000       1,335,000

The burden reduction under the revised regulation is estimated to be 
225,000 hours over three years.
    Information Collection Costs: The Commission has projected the cost 
savings over three years to be approximately $11,800,000. The 
Commission assumes that there are no other startup costs, such as 
having to acquire Internet access. The program is voluntary and 
contingent on agreement of the parties, so that no one is required to 
obtain Internet access if they do not have it for other business 

(The Commission makes the assumption that the average cost for a 
Commission employee is comparable to the costs for industry. This 
assumption equates to total number of reporting hours  2,080 
hours in the work year  x  $109,889 (current costs for FERC employee-
salary + benefits). A true reflection of the costs to industry should 
be based on market prices for the resources necessary to comply with 
the information collection. Financial costs include both non-recurring 
costs such as the cost of capital investments necessary to fulfill the 
information collection and recurring costs such as the cost of 
operating and maintaining capital investments.)
    The OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule.13 
Accordingly, pursuant to OMB regulations, the Commission is providing 
notice of this revised information collection to OMB.

    \13\ 5 CFR 1320.12.

    Title: FERC-601, Electronic Service.
    Action: Proposed Data Collection.
    OMB Control No. (See footnote 12).
    The respondent shall not be penalized for failure to respond to 
this collection of information unless the collection of information 
displays a valid OMB control number.
    Respondents: Business or other for profit, including small 
    Frequency of Responses: On occasion.
    Necessity of Information: This rule adds an optional method for 
service of documents. Because it is voluntary, parties will be able to 
determine for themselves the benefits costs of electronic service, in 
particular the cost savings, over the traditional method of serving 
documents. The Commission believes that the rule will, in many cases, 
make service of documents quicker, more reliable and less expensive 
than the other existing options. Internal Review: The Commission 
already requires in most instances that parties filing documents in 
proceedings before it serve those documents upon other interested 
parties. This requirement is necessary to ensure fundamental fairness 
in the Commission's proceedings. This rule does not add any 
requirement, but instead adds an alternative method of a voluntary 
nature to accomplish service. The Commission has assured itself, by 
means of its internal review, that there is specific, objective support 
for the burden estimates associated with the information collection 
requirements. Parties receiving service require the documents in order 
to inform themselves of arguments being made, and evidence and other 
information being submitted, in Commission proceedings. The parties use 
this information to form and develop their own positions and 
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, NE, Washington, DC 20426, Attention: 
Michael Miller, Office of the Chief Information Officer, Phone: 
(202)208-1415, fax: (202)273-0873, e-mail: [email protected].
    For submitting comments concerning the collection of information 
and the associated burden estimate, please send your comments to the 
contact listed above and to the Office of Management and Budget, Office 
of Information and Regulatory Affairs, Washington, DC, 20503. 
Attention: Desk Officer for the Federal Energy Regulatory Commission, 
phone: (202)395-3087, fax: (202)395-7285.

VII. Congressional Review

    The provisions of 5 U.S.C. 801, regarding Congressional review of 
rulemakings, do not apply to this rulemaking because it concerns agency 
procedure and practice and will not substantially affect the rights and 
obligations of non-agency parties. 5 U.S.C. 804(3)(C).

VIII. Effective Date

    This regulation becomes effective July 12, 1999. The Commission has 
concluded, 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 251 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 385

    Administrative practice and procedure, Electric power, Penalties, 
Pipelines, Reporting and recordkeeping requirements.

    By The Commission.
David P. Boergers,

    In consideration of the foregoing, part 385, chapter I, title 18, 
Code of Federal Regulations, is hereby amended as set forth below.


    1. The authority citation for part 385 continues to read as 

    Authority: 5 U.S.C 551-557; 15 U.S.C. 717-717z, 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 385.2010(f) is revised to read as follows:

Sec. 385.2010  Service (Rule 2010).

* * * * *
    (f) Methods of service. Service of any document must be made:
    (1) By United States mail, first-class or better;
    (2) By delivery in a manner that, and to a place where, the person 
on whom service is required may reasonably be expected to obtain actual 
and timely receipt; or
    (3) By electronic means to participants who have agreed to receive

[[Page 31497]]

service via the specified electronic means.
* * * * *
[FR Doc. 99-13986 Filed 6-10-99; 8:45 am]