BNUMBER:  B-271810.3, GAO/OGC-96-12 
DATE:  May 24, 1996
TITLE: Open Access Same-Time Information System and Standards of
Conduc, B-271810.3, GAO/OGC-96-12, May 24, 1996
**********************************************************************

Subject:   Open Access Same-Time Information System and Standards of 
Conduct

File:        B-271810.3, GAO/OGC-96-12

Date:        May 24, 1996

B-271810.3

May 24, 1996

The Honorable Frank H. Murkowski
Chairman
The Honorable J. Bennett Johnston
Ranking Minority Member
Committee on Energy and Natural Resources
United States Senate

The Honorable Thomas J. Bliley, Jr.
Chairman
The Honorable John D. Dingell
Ranking Minority Member
Committee on Commerce
House of Representatives

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this 
is our report on a major rule promulgated by the Federal Energy 
Regulatory Commission (Commission), Department of Energy, entitled 
"Open Access Same-Time Information System and Standards of Conduct" 
(Docket No. RM95-9-000; Order No. 889).  The Commission issued the 
final rule on April 24, 1996, and we received it on 
April 25, 1996.  The final rule was published in the Federal Register 
on 
May 10, 1996.  61 Fed. Reg. 21737.  

A companion rule entitled "Promoting Wholesale Competition Through 
Open Access Non-Discriminatory Transmission Services by Public 
Utilities; Recovery of Stranded Costs by Public Utilities and 
Transmitting Utilities" (Docket Nos. RM95-8-000 and RM94-7-001; Order 
No. 888) was also published in the Federal Register on 
May 10, 1996.  61 Fed. Reg. 21540.  Today, we are issuing a separate 
report, captioned B-271810.4, GAO/OGC-96-13 on the companion rule.  On 
May 1, 1996, Representative Bob Franks introduced a joint resolution 
to disapprove both final rules pursuant to section 802(a) of title 5.  
142 Cong. Rec. H4397.

This rule would require each public utility that owns, controls, or 
operates transmission facilities used for transmitting electric energy 
in interstate commerce  to create or participate in an open access 
same-time information system (OASIS).  The OASIS would provide 
potential customers with information needed to obtain the open access 
non-discriminatory service required by the Commission's companion 
rule.  This rule would also require public utilities to implement 
standards of conduct to functionally separate transmission and 
wholesale power merchant functions.

Enclosed is our assessment of the Commission's compliance with the 
procedural requirements referred to in sections 801(a)(1)(B)(i) 
through (iv) of title 5 with respect to the rule.  Our review 
indicates that the Commission complied with the applicable 
requirements.

If you have any questions about this report, please contact Helen T. 
Desaulniers, Senior Attorney, at (202) 512-4740.  The official 
responsible for GAO's work related to the Commission is Victor S. 
Rezendes, Director for Energy, Resources, and Science Issues.  Mr. 
Rezendes can be reached at (202) 512-3841.

Robert P. Murphy
General Counsel

Enclosure

cc:  The Honorable Elizabeth A. Moler
     Chair
     Federal Energy Regulatory Commission
                                                      ENCLOSURE

ANALYSIS UNDER 5 U.S.C.  sec.  801(a)(1)(B)(i)-(iv) OF A MAJOR RULE 
                            ISSUED BY
            THE FEDERAL ENERGY REGULATORY COMMISSION
                            ENTITLED
        "OPEN ACCESS SAME-TIME INFORMATION SYSTEM (OASIS)
                    AND STANDARDS OF CONDUCT"
             (DOCKET NO.  RM95-9-000; ORDER NO. 889)

(i) Cost-Benefit Analysis

The Commission indicated in its submission to us that it was not 
required to prepare and did not prepare a cost-benefit analysis of the 
rule.  

(ii) Agency Actions Relevant to the Regulatory Flexibility Act, 5 
U.S.C.  sec.  603-605, 607 and 609

Section 603:  Initial Regulatory Flexibility Analysis

The preamble to the proposed rule stated that the entities that would 
be required to comply with the rule are public utilities and 
transmitting utilities that do not fall within the Regulatory 
Flexibility Act's definition of small entity.[1]  60 Fed. Reg. 
66197-8.  Accordingly, the Commission certified, pursuant to 5 U.S.C.  sec.  
605(b), that the rule would not have a significant economic impact on 
a substantial number of small entities and did not prepare an initial 
regulatory flexibility analysis. 60 Fed. Reg. at 66198.  Section 
605(b) states that the certification and explanatory statement shall 
be provided to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA).  In response to our inquiry, Commission 
officials explained that the Commission did not provide a separate 
certification and statement to SBA because it considers publication of 
the certification in the Federal Register to be notice to SBA.  An SBA 
official has confirmed that some agencies follow this practice, and 
SBA has not objected to it.  

Section 604:  Final Regulatory Flexibility Analysis

In the preamble to the final rule, the Commission reiterated that the 
rule would only apply to public and transmitting utilities and again 
certified that the rule would not have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act.  See 61 Fed. Reg.  21762.   Therefore, the 
Commission did not conduct a final regulatory flexibility analysis 
under 5 U.S.C.  sec.  604(a).  One commenter expressed concern that the 
Commission would extend the requirement for an open access same-time 
information system (OASIS) to non-public, not-for-profit cooperative 
utilities and stated that the Commission would then be required to 
analyze the requirement's effect on those utilities.  In response, the 
Commission emphasized that the rule would only apply to public 
utilities that own, operate, or control transmission facilities 
subject to the Commission's jurisdiction.  See 61 Fed. Reg. at 21763.  
By letter of May 9, 1996, the Commission informed SBA of its 
certification.
    
In light of the Commission's determination that the rule would not 
have a significant economic impact on a substantial number of small 
entities, sections 605(a) and (c), 607, and 609 are inapplicable. 

(iii) Agency Actions Relevant to Sections 202-205 of the Unfunded 
Mandates Reform Act of 1995, 2 U.S.C.  sec.  1532-1535

As an independent regulatory agency, the Commission is not subject to 
title II of the Unfunded Mandates Reform Act of 1995.

(iv) Other Relevant Information Under Acts and Executive Orders

Administrative Procedure Act, 5 U.S.C.  sec.  551 et seq.

The Commission promulgated the OASIS rule under the notice and comment 
procedures of 5 U.S.C.  sec.  553.  A notice of proposed rulemaking was 
published on December 21, 1995.  60 Fed. Reg. at 66182.  The 
Commission received comments on the proposed rule from 104 commenters.  
In the preamble to the final rule, the Commission responded to issues 
raised during the comment period.

Paperwork Reduction Act, 44 U.S.C.  sec.  3501-3520

The rule requires public utilities to create or participate in an 
OASIS designed to provide potential customers with information by 
electronic means about available transmission capacity and prices.  
According to the preambles to the proposed and final rules, the 
Commission reviewed its proposed information collection and, among 
other things, assessed the need for the information, how the 
information would be used, and the associated burden.  60 Fed. Reg. at 
66184, 66198; 61 Fed. Reg. at 21739, 21763.  

In addition, the Commission solicited and evaluated comments on the 
proposed information collection.  The Commission specifically 
solicited public comments on the need for and utility of the 
information; the accuracy of the burden estimate contained in the 
preamble to the proposed rule; ways to enhance the quality, utility, 
and clarity of the information to be collected; and suggested methods 
for minimizing the burden.  See 60 Fed. Reg. at 66184.  In the 
preamble to the final rule, the Commission responded to comments on 
various aspects of the OASIS requirement.  The Commission also 
adjusted its burden estimate in response to issues raised by 
commenters.  See 61 Fed. Reg. at 21739, 21763.  

Consistent with the requirements of the Paperwork Reduction Act, the 
preambles to the proposed and final rules set forth significant 
information about the proposed collection of information.  Among other 
things, the preambles included a title and reasons for the information 
collection, the proposed use for the information, a description of the 
respondents, and the frequency of responses.  60 Fed. Reg. at 66198; 
61 Fed. Reg. at 21763.  The preambles also cited OMB's clearance 
requirements, though not specifically 44 U.S.C.  sec.  3507.[2]  60 Fed. 
Reg. at 66198; 61 Fed. Reg. at 21763.   

At the same time as it requested public comments, the Commission 
submitted its proposed collection of information and certification 
under 44 U.S.C.  sec.  3506(c)(3) to the Office of Management and Budget 
(OMB).  See 60 Fed. Reg. at 66184.  In response to our inquiry, 
Commission staff advised that OMB approved the information collection 
requirement.  OMB also asked that the Commission examine the burden 
associated with "third party reporting" and ensure that this burden 
was reflected in the Commission's final rule.  The Commission also 
submitted the final rule to OMB.  See 61 Fed. Reg. at 21763.  On May 
3, 1996, the Commission again certified to OMB that the information 
collection complied with each of the objectives identified in 44 
U.S.C.  sec.  3506(c)(3).

Statutory Authorization for the Rule

In the preambles to the proposed and final rules on the open access 
non-discriminatory tariff and "stranded costs," the Commission 
explained that sections 205 and 206 of the Federal Power Act, 16 
U.S.C.  sec.  824d and 824e, require it to ensure that, with respect to 
any transmission in interstate commerce or any sale of electric energy 
for resale in interstate commerce by a public utility, no person is 
subject to any undue prejudice or disadvantage.  60 Fed. Reg. at 
17664; 61 Fed. Reg. at 21541.  In the preamble to the final OASIS 
rule, the Commission explained that the information access requirement 
embodied in the OASIS rule is necessary to meet the requirements of 
the open access rule.  61 Fed. Reg. at 21739-40.

The Commission did not identify any other statute or executive order 
imposing procedural requirements relevant to the OASIS rule.

1. Section 601(3) of title 5, United States Code, provides that the 
term "small business" generally has "the same meaning as the term 
'small business concern' under section 3 of the Small Business Act."  
Section 3 of the Small Business Act defines a "small business concern" 
as a business which is independently owned and operated and which is 
not dominant in its field of operation.  15 U.S.C.  sec.  632(a).

2. Section 3506(c)(1)(B) requires each agency to establish a process 
to ensure that each information collection indicates the collection is 
in accordance with the clearance requirements of section 3507.