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
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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.